Swiss Re eyes growth in Austria & Central Eastern Europe
Swiss Re is considering growth in the region of Austria & Central Eastern Europe (ACEE), driven by strong economic growth in those regions and the changing requirements of cedants thanks to Solvency II, Nicola Rautmann, Swiss Re market executive Austria & CEE, told Baden-Baden Today.
“We see the ACEE region as a growth area,” Rautmann said. “Economic indicators are starting to reflect upward trends in average above the Western European level. Not all that will immediately transfer into insurance and, as a consequence, reinsurance, but in ACEE markets one can observe comparably lower insurance penetration in both life & health and property & casualty lines.”
Rautmann said Swiss Re sees an opportunity to develop specific products for target groups, together with its cedants. “On the reinsurance side we want to facilitate more nat cat coverage in the South Eastern European markets and we want to grow our property book in that region. A lot of discussions are also taking place in the context of Solvency II and capital requirements.”
Speaking about the European reinsurance market more widely, Rautmann noted there remains intense competition on the direct insurance side and in reinsurance. On top of this, insurance companies are retaining more business on their own balance sheets and ceding less to the reinsurance market.
These trends are also in play in ACEE. Where big players have subsidiaries throughout that region, the reinsurance placement is increasingly done outside the region, she said.
“As a consequence these structures have less of an ACEE flavour. In some cases local companies need new solutions, for example on a facultative basis.
“In ACEE, but not limited to that region, we also see a trend to buy more tailored solutions such as aggregate structures. Swiss Re is in a very good position to provide complex solutions based our wide range of in-house expertise. We see that our clients value this additional offering and service.”
Rautmann admitted this renewal will again be challenging due to pressure on prices and conditions. She said Swiss Re will examine each negotiation on a case-by-case basis but in some cases may need to cut back.
“For some treaties there is no longer any margin left and we need to decide case by case what we will do when faced with further decreases. I can imagine situations where we need to cut back,” she said.
“In such cases Swiss Re never looks at single pieces of business in isolation. The overall relationship and the entire portfolio with the client is crucial—as well as the future potential.”
