The long game
Last year, 18 months after the start of its transformation, Q-Re renamed itself Qatar Reinsurance. The rebrand is a reflection of a new strategy for the company that has seen it hire a plethora of well-known industry executives since early 2013 and build a carefully underwritten, well diversified global portfolio.
The initial fruits of this change appear encouraging. Qatar Re’s profits increased to $16 million in 2014 compared with $0.5 million in 2013, despite big investments in staff and infrastructure, and prior-year underwriting losses unrelated to its current portfolio.
But this is just the start. Gunther Saacke, chief executive of the reinsurer, says Qatar Re has all the attributes and the will to become a top-tier global reinsurer, and he has been pushing this strategy forward since he was appointed in early 2013.
Saacke argues that its unique ownership and capital structure represents a big factor that sets Qatar Re apart from its competitors. Its parent company, Qatar Insurance Company (QIC), is ultimately owned by a number of large Qatar-based companies, while the State of Qatar holds a minority stake of 13.5 percent.
“Look at the source and nature of our capital. As an important member of the dynamically growing family of companies of the QIC Group, Qatar Re has the full support of the QIC’s very strong capital base and balance sheet, which has steadily expanded over the course of the last 50 years,” Saacke says.
Ready for anything
This means Qatar Re can think and plan for the long term. He emphasises that the company’s strategy and approach is not geared to a certain market or phase of the underwriting cycle. It is committed to building a diversified portfolio underpinned by good quality underwriting and analytics.
“Our strategy is meant to work in a hard market, just as it’s meant to be resilient in a soft market,” he says. “From the outset we’ve diversified our book into a number of different classes of business, typically specialty lines. This strategy has served us well.”
That is not to say Qatar Re does not write mainstream property/casualty (P&C) lines. But, Saacke says, good risk selection has always been at the heart of its approach.
“Risk selection has been a main value over these last few years and the combination of that with our specialty lines has served us very well,” explains Saacke. “Building a strong reinsurer is all about managing and controlling risk. First and foremost is understanding that risk.”
The reinsurer has invested in analytics and has stress-tested its strategy. Saacke is confident that it is continuously delivering well in what he agrees remains a declining market in most lines of business.
