Euler Hermes anticipates a stable renewal
Benoît des Cressonnières, chief executive officer of Euler Hermes Reinsurance, with responsibility for the company’s buying programme, says he is expecting a steady renewal with little change in pricing, despite some pressure from reinsurers for rate increases on the back of the 2017 catastrophe losses suffered by many global reinsurers.
Euler Hermes Re, based in Zurich, handles the reinsurance buying for all of credit insurer Euler Hermes’ operations around the world. This means des Cressonnières manages a global risk profile and prefers to work with reinsurers that can match this.
He said the company currently deals with just 15 reinsurers on this basis, of which it regards five as being core to its panel and with which it negotiates the key pricing and terms. He said that although he has considered using alternative capital many times, this does not lend itself well to the solutions he requires, compared to traditional reinsurance structures the company prefers.
“Lots of reinsurers and other forms of capacity want to work with us. But they must be global and have a good rating and also work on a basis where they share our fortunes,” he said. “That rules out much of the collateralised market where payment is required up front.”
He added that, although it would offer diversification, because the company has an internal capital model approved by the regulator, it would also have to carefully consider the implications of using alternative structures.
In fact, this year’s renewal is smaller than in many previous years because of a comprehensive, global, long-term, non-proportional treaty it entered into last year for capital relief purposes.
Commenting on the company’s wider outlook, des Cressonnières said that despite many political uncertainties in the world, it is optimistic at the moment having seen positive economic growth in several countries.
“As a trade credit insurer we can adjust our appetite as needed but we are seeing positive signs at the moment,” he said.
Euler Hermes has been adjusting its portfolio in recent years. As growth in its traditional core of trade credit insurance has faltered, it has moved into surety products and recently secured approval to insure bonds issued by US states, an important achievement for the company.
Get all the latest re/insurance industry news with our daily newsletter - sign up here.
More of today's news from Baden-Baden
More cedants seek reinsurance to curb earnings volatility: SCOR
Where is consolidation taking the sector, asks GC panel
NewRe seeks non-Europe P&C growth
Swiss Re prepares for future growth markets in Europe
Mapfre Re to expand range & remit
Use of blockchain may overcome trust issues
Give MGA owners skin in the game: Citadel
Axis Re: growth in Asia & Lloyd’s
Europe a challenging environment for small reinsurers
UnipolRe’s new capital management tool to empower buyers
Ed embraces insurtech to put specialist products on line
Reinsurance is now an execution market: PartnerRe
Higher interest rates are no silver bullet
Fear over jobs may turn marine rates: Sompo
Insurers offering M&A insurance more than triple
Aon unveils details of new units
Open source platforms will drive insurtech forward: BMS
A good routine based on trust: Baden-Baden attendees
UnipolRe’s biggest team in Baden
Parametric bonds the best option for the protection gap
