Realism, diversification and true partnership needed ahead of renewals

A more measured, partnership-based approach anchored in discipline and diversification is needed, says Fabian Pütz, of DEVK Re.

Key points:
Market needs mutual responsibility
Discipline as ‘self-regulation’, not rigidity
Diversification via Echo Re adds strength

“The market has moved back to tactical discussions about pricing levels for the upcoming renewal,” said Fabian Pütz, CEO of Echo Re and executive board member at DEVK Re. “There’s nothing wrong with that, but we also need to be realistic about expectations.”

This tactical mindset, he argued, risks obscuring the deeper purpose of reinsurance, and he told Baden-Baden Today: “We should not only focus on renewal tactics, but remember our role in the insurance value chain. Reinsurers as well as insurers must price risk and volatility adequately and consistently.”

“There is no such thing as a bad risk – only a bad structure, price or the wrong partner.”

He noted that only a short time ago, some questioned whether nat cat would remain insurable at all. With capacity returning, the sector could slip back into short-termism. “If we don’t insist on sufficient premium in the system to finance rising exposures, we won’t provide the right incentives for societies and policymakers to invest in resilience rather than rely on loss compensation,” Pütz warned. That, he suggested, was where discipline has a broader societal role beyond pure market mechanics. 

“There is no such thing as a bad risk – only a bad structure or price for the coverage we are providing, or the right structure and price but with the wrong partner.” It is a statement that captures the disciplined but pragmatic philosophy at the core of DEVK Re’s underwriting. Rather than withdrawing capacity from NatCat and other exposures over the last years, the group’s stance was to scale the business provided that the risk exposure can be priced responsibly and managed within a broadly diversified portfolio. 

“As a group, DEVK has established itself as one of the top 40 reinsurers globally,” Pütz said. “We are an ambitious, long-term-oriented treaty reinsurer with meaningful capacity, offering broad support across P&C and specialty lines, as well as a small, but steadily growing, life reinsurance portfolio.”

Within that structure, DEVK Re focuses on Europe – including Turkey and Israel – and North America, while sister company Echo Re writes business from Latin America, the Caribbean, the Middle East, Africa and Asia Pacific. The overall reinsurance GWP written by both carriers is about €1.5 billion. Given that DEVK RE is owned by DEVK a German mutual insurance group writing approximately €4 billion of direct insurance premium in Germany, this is not insignificant. 

Supported by DEVK Re group’s mutual ownership and strong capital base, the reinsurer is in a sweet spot position. “We don’t feel under pressure to grow if we don’t feel it’s the right time but we have the strong mandate to strategically scale the portfolio in a sustainable way. We are not focusing on market share but on building a diversified portfolio across lines and regions. This is what we believe adds resilience.” 

That long-term view also underpins how DEVK Re approaches renewals. “Client support matters most when placements are difficult to complete, and we have always presented ourselves as approachable and supportive trying to create win-win situations over time,” Pütz said.

He described DEVK Re’s approach as pragmatic and transparent. “Even when the market was in turmoil three years ago, we voiced our pricing expectations early. Delaying terms to squeeze advantage simply isn’t compatible with talking about partnership.”

At a time when capacity has returned and price negotiations are again sharpening, Pütz is concerned: “Results in many European markets have not been too positive over recent years. Good results of the global market should not distract us from this fact,” he said. “As the market remains very fragile with volatility and uncertainty dominating, trying to leverage on short-term gains at the expense of the other parts of the value chain could backfire.”

“Let’s use this time in Baden-Baden to be frank about expectations and find a sustainable equilibrium. Pricing might be easier to debate than structure, but only for markets and clients where underlying results justify it. Discussions about attachment levels and frequency protection seem a bit ironic considering that attachment levels are often still quite low. That said, we are not dogmatically negating frequency protections but only in case of a sufficient alignment of interests between involved parties. Simply offloading the risk of expected frequency losses from one's own P&L without a transparent and consistent narrative and adequate price will prove challenging,” he concluded.

For DEVK Re, that honesty is rooted in a consistent philosophy: disciplined, long-term, and anchored in mutual trust – the kind of partnership that endures beyond any single renewal.

Fabian Pütz is the chief executive officer of Echo Re and executive board member at DEVK Re. He can be reached at: Fabian.Puetz@devk.de.

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