The key to reinsurance remaining competitive lies in being able to create solutions that are valued believes Tani Alexander, Casualty Treaty Manager — ANZ at Berkley Re.
“Innovation is critical to remaining relevant in today’s reinsurance market,” Alexander says. An open and innovative reinsurance market is vital to ensure risk transfer and market development.
Alexander explains, “This does not mean rolling out new off-the-shelf products, but working with clients to develop new solutions. The industry needs to get better at working together to achieve goals and help the market place react to the changing consumer needs and remaining relevant to our clients’ needs.”
She acknowledges that there has definitely been a change in reinsurance relationships over time. “Historically, reinsurance was primarily about providing capacity at affordable terms and the transfer of risk. This is still the case, however, reinsurance buyers now add more value to the relationship, the partnership and the value which reinsurance brings to the table, in addition to the capacity they can provide.”
For Alexander, reinsurance is about protecting the unforeseen, and buying the right accumulation cover is necessary to ensure this is being considered. “Reinsurance is there to help protect balance sheets; it doesn’t matter if the loss is from a single policy or an accumulated number of policies that arise from the one event, customers need to be protected in the event of a loss of meaningful size and scale.”
She believes that the threats for reinsurers are around being able to manage accumulation exposure. “It is about building a system which allows you to track risks and understand potential loss accumulation scenarios,’
Alexander, who will debate the state of the reinsurance industry at this year’s ANZIIF Reinsurance Breakfast, argues that the industry has made incredible advances in innovation.
“For example, consider the impact the emergence of the ILS [insurance linked securities] market has had on capital, the development of cat bonds, the changing approach to modelling and pricing, and the use of parametric covers.”
Interested in hearing more? Don’t miss the interactive and engaging discussions at the Reinsurance Debate of the Year.