Deutsche Rück moves beyond Germany for life segment growth
Deutsche Rück will take its first steps into the life segment outside Germany as a part of the company’s ongoing diversification and expansion strategy, Intelligent Insurer can reveal.
“Our geographic expansion is running as planned.” Achim Bosch, Deutsche RückThe move, which is in its early stages and will see the reinsurer start writing life business in the Middle East and North Africa (MENA) next year, was shared by Achim Bosch, chief underwriting officer at the Germany-headquartered reinsurer, in an exclusive interview.
This latest development follows the reinsurer’s positive experience of writing new business in South, South East and East Asia where it entered several select markets in January 2023. Bosch says Deutsche Rück has exceeded its business plan targets in these Asian markets by “more than double” although the CUO was guarded about sharing exact figures. The company currently writes business in around 10 countries across the region including Japan, Singapore, South Korea, Taiwan, Thailand, and Vietnam.
Commenting on progress since January 2023, he says: “The timing was good as terms and conditions are sufficient, so even if the situation doesn’t guarantee us profit, it makes profits quite likely.”
What has helped is that from the beginning, the reinsurer “clearly communicated our sweet spot”, he explains. Deutsche Rück’s roots are in the classic P&C business, which includes natural catastrophe. So in the Asia expansion, the reinsurer is writing “plain vanilla” private and small commercial business for almost all lines. It doesn’t cover specialty lines and the company is not searching for industrial business. “That is clearly communicated to all partners, whether that’s our customers or brokers.”
There were no premium targets for the Asia market move but the business is working towards an expected result. So far, Bosch says, the results are very good.
“The next step is to grow that portfolio, and of course diversify further. Our geographic expansion is running as planned and we will stick to the countries we are currently focusing on.”
Keeping costs down
Part of the strategy for this expansion is based on the fact that people can work from home, so the reinsurer doesn’t have any footprint on the ground in these regions.
This is partly down to the cost that would be associated with growing teams of people in-country.
“We want to keep our cost ratio low as a competitive advantage. We don’t want to lose that,” says Bosch.
