Reinsurance as a basis for stability – and growth

With risks emerging from a wide variety of sources, Jörg Bruniecki, chief underwriting officer – EMEA at MS Re, considers how a reinsurer can support their customers through whatever the future brings.

Across many aspects of the risk landscape, volatility is increasing at a rapid pace. The transformation is not limited to the effects of climate change and its related consequences. Shifts in the socio-economic environment are having pronounced effects too. As we cannot avoid this evolution, we must do our best to manage and work with it.

Reinsurance plays a significant role in supporting the insurance industry and its own clients. As the world faces increasingly numerous and complex risks, we believe the collaboration between all related parties becomes more and more important.

One of the main functions of reinsurance has always been to provide the capacity to manage outsized risks and volatility. To continue to sustain this role, adequate portfolio diversification is key. We therefore have built our strategy around working with clients on a broad basis, so they can profit from our expertise across multiple classes and we can support them in achieving their strategic goals.

Talent, tools, collaboration

With a view into multiple portfolios across many lines of business as well as geographies, reinsurers have an unparalleled insight into the risk landscape, which we can turn into valuable insights for our clients.

Experience-based underwriting approaches need to be increasingly complemented by scenario-based views on possible future outcomes. Hence getting to risk adequate prices becomes increasingly complex across the value chain. No one has a crystal ball to predict what individual outcomes will manifest over the coming years, but resilience is the result of building the adequate financial resources today to deal with the partially unknown outcomes in the future. Pricing therefore needs to continue to evolve. Some of the larger-scale losses of the recent past were surprises (e.g. Covid, SRCC) and not adequately reflected in our evaluation of risk as an industry.

We see no alternative to a disciplined approach to pricing, retention levels and clarity of contract wordings. We believe what has been achieved in the prior renewal rounds has led to a better alignment in the industry. Managing an increasingly complex risk landscape needs all stakeholders to be invested in managing risk at their respective positions in the market.

Working together for the long term

At MS Re, we are working with our clients to develop deep, long-term relationships. We have built a portfolio which is in line with the expectations of our shareholder. We have therefore their explicit commitment to our vision and strategy. We have strengthened our financial security, which is reflected in our rating upgrades during this year. We have listened closely to what our clients have been telling us on what they are looking for in a reinsurance partner and have positioned the company accordingly. The good news is our strategy is proving to be the right strategy and has been stable since we rebranded as MS Reinsurance two years ago here in Monte Carlo.

Of course, there is no better place to develop new and existing relationships than at an event such as Les Rendez-Vous de Septembre, where the industry comes together to discuss the future. We will use this time to articulate our value proposition to our clients and brokers clearly and with a defined purpose.

At MS Re, we know reinsurance is a vital tenet to the world economy and as well as providing support when volatility spikes, we believe we can help our clients to support their own customers through whatever is coming next.

We look forward to meeting with partners and colleagues in Monte Carlo and exploring our potential as an industry together.