shutterstock-111487727-converted-lo-1
16 April 2013 Reinsurance

A potential giant awakens

While the reinsurance industry has been used to Bermudian start-ups entering the business through property-catastrophe underwriting when market conditions are ripe and then maturing into more rounded reinsurers, it is rare to find a serious new player in the industry emerge from elsewhere in the world.

Yet that is exactly what is happening, thanks to the recent recruitment drive at Q-Re, the reinsurance subsidiary of Qatar Insurance Company (QIC). The business has hired a plethora of new industry talent in recent months and has unveiled ambitious global expansion plans. And the company’s unique background and ownership could be exactly what set it apart as it looks to deliver on those plans.

Gunther Saacke, the chief executive officer of Q-Re, believes the unique ownership and capital structure of the reinsurer can offer cedants much-needed diversification on their panels away from what he calls the “vagaries of Wall Street”.

Speaking just days after taking the reins of the business, Saacke told Intelligent Insurer that one of the reasons he believes there is demand for Q-Re is that it can offer cedants a stable and alternative source of capital that offers diversification away from reinsurers funded via the capital markets. This is because its parent company QIC is ultimately owned by large Qatar-based companies, with a sizeable 20 percent stake owned by the State of Qatar.

“The global economy has been through some difficult times and one of the things that has been exposed is the sometimes erratic flow of capital both in and out of the reinsurance industry driven by external factors,” he said. “Our capital base is not impacted by external factors in this way. The vision for the business is long-term and that sort of stability can only make a reinsurance panel stronger.”

Humble beginnings

Q-Re, which is regulated by the Qatar Financial Centre Regulatory Authority and rated ‘A’ by Standard & Poor’s and AM Best, was formed in 2009 to handle some of the reinsurance business that QIC was already writing, while also looking to grow the business in terms of both products and markets covered.

It originally focused on local markets in Africa, Asia and the Middle East, but Saacke is now tasked with building a global reinsurance company. The business already has full offices in Doha (its headquarters) and Zurich, a representative office in London and is awaiting regulatory approval to open its doors in Bermuda. It expects to employ 80 staff by the end of this year.

Saacke said he expects the business to rapidly establish a global reach covering both speciality lines of business and writing more traditional lines such as property-catastrophe. But he added that its core focus will still be high quality technical underwriting and on offering very high standards in the execution of placements and accounts.

“Don’t be surprised to see us global by the end of the year,” he said. “We are already a sizeable operation and we have taken a number of steps to ensure we have a substantial presence in a number of locations so we can quickly access markets. We have hired some very high profile executives already and expect more to come.”

Last year, Q-Re announced it had hired more than 10 new senior executives from various parts of the reinsurance industry. In addition to Saacke, these among others included Willi Schuerch from Novae Re, Alain Chiolero, formerly of Swiss Re, PartnerRe and Converium, Stefano Lorenzini, formerly of Swiss Re, and Karl Schneider, whose career includes a long stint at Munich Re.

The other executives starting include Manfred Dennler, formerly of Helvetia Insurance Company and Novae Re, Peter Frei, formerly of Winterthur Re and PartnerRe and PERILS AG, and Johannes Goebel, formerly of Allianz Global Risks and Novae Re.

Grounded in expertise

With such expertise in place, Saacke says that the ability to understand risk and underwrite it in a technical way will be core to the business’s strategy and philosophy going forward. He says the business is looking to establish a global franchise of senior underwriters able to add value to clients on a wide range of different risk categories.

“The sort of catastrophe and specialty risks we will be dealing with do tend to be global,” he says. “Our book will comprise mainly technically intense business lines where we can make a difference to clients. Business like that has no geographical boundaries. We will have offices in London, Zurich and Bermuda as well as Doha and we will see ourselves as a global player.”

Describing the challenge as the most exciting of his career, Saacke is wary of speaking publicly about landmarks the group wishes to achieve but he says the company is working to a “mid-term” plan which should see it become a serious contender to work with cedants globally on certain lines of business.

He believes the quality of executives and their contacts will also stand the business in good stead. “All of them have decades of experience building reinsurance businesses in various parts of the world,” he says. “They are well known to clients thanks to their personal franchises and that will represent the core of our long-term vision.”

He also hints that more high profile hires are likely to follow in the coming months. “It is like a virtuous circle—as more high profile executives join, that attracts others,” he says. “A big attraction for staff coming here is the empowerment we will be offering them—to work directly with clients and make decisions. I do not believe in underwriting by committee.”

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk