Baden_Baden_2010

What are the results of the annual meeting of reinsurance market players in Baden-Baden ?

Vadim Klementiev, Profile-Re Director General, answered this question for insurance portal Insurance Today:

 “I am sure that major participants of this annual event have felt a kind of “wind of change.” Compared with the previous year the number of participants from Russia, some CIS countries, e.g. from Azerbaijan, increased, while there were fewer representatives from the Ukraine and Kazakhstan (“Dagomys ended, vivat Baden-Baden !”).

I would also like to point out that the following interconnected trends may be traced: on the one hand, East European brokers and reinsurers, who are searching for alternative markets, are becoming more and more aggressive. On the other hand, over the last years our meetings in Baden-Baden that previously were European have been attended by more and more Asian companies who are trying to enter the European market. What topics were the subjects of the hottest discussions? With respect to our national companies that was the problem of increased prices for Western reinsurance cover in connection with large losses (exceeding US$ 100 million) suffered in July by one of Russian major reinsurers, in which many major international players participate. Ukrainian companies are also afraid that prices for international reinsurance can grow: they suffered considerable losses in the recent years.

 At the same time, however, international players state that rates in the global market have reduced. From a bit cynical point of view of the insurance market, for rates to go up an event similar to the 9/11 attacks or Hurricane Katrina is needed.

However, rates are going down not only because there have been no global losses for a long time, but also in connection with excessive capitalization of the reinsurance market. Redistribution of capital is considered to be a way out: such options as buying out shares of international reinsurance companies, distribution of capital in the form of dividends, etc. are being discussed. We all feel changes in the market: new players appear, new capital is attracted. Meetings in Baden-Baden were attended by new reinsurers created last year or two years ago.

It is important that this renovation be beneficial for the industry in general, including by enhancing reinsurance practices.”

02.11.2010