Euler Hermes seeks stability
Credit insurance company Euler Hermes is becoming more selective in some parts of its portfolio as it fears the adverse effects of a global economic slowdown while also seeking some rate increases something that will benefit the reinsurers it works with on a proportional basis.
Benoît des Cressonnières, chief executive officer of Euler Hermes Reinsurance with responsibility for the company’s buying programme, told Monte Carlo Today that, while there would be no real change in its product offering, it was tweaking its underwriting stance in preparation for any change in the market.
“We watching for the possibility of a slowdown and adjusting things on that basis,” he said. “We cede a lot of business on a proportional basis so our reinsurers would benefit too.”
Des Cressonnières handles the reinsurance buying for all of Euler Hermes’ operations around the world. This means he manages a global risk profile and prefers to work with reinsurers that can match this. Euler Hermes Reinsurance works with around 10 a smaller panel than a few years ago when it was closer to 15.
Des Cressonnières highlighted the value the company places on working with reinsurance partners that have a deep understanding of its portfolio on a long-term basis. He always meets potential new players in Monte Carlo, however, to ensure the firm has options if some of its existing players’ appetite for this form of risk retracts.
“That is very important to us we do not want to work with short-term capital,” he said. “We have started renewal discussions already to get a sense of what our reinsurers are feeling about the market.”
He is aware of the wider discussion about rates potentially hardening but said he felt his reinsurers would be unlikely to look to apply rate hikes to Euler Hermes.
“It is a bilateral discussion but I feel rates should be reflective of the performance of the client. As we are increasing our primary rates that will benefit our reinsurers as well,” he said.
On that basis, he is expecting a steady renewal with little change in pricing, despite some pressure from reinsurers.
