Global players battle for best talent

Global reinsurers are increasingly investing in seeking growth opportunities in Latin America with this making pricing and the battle for the top talent in the region increasingly competitive.

That is the view of Matthew Mosher, senior vice president and chief rating office, AM Best. “Global reinsurers are tooling up to be effective in Latin America and some have been hiring top talent to represent their interests for the long term. This will lead to more competition in the Latin American reinsurance market, but the time line for that increase in competition will vary, with regulation being one of many determinants,” he said.

Andrea Keenan, vice president of research and ratings criteria, relations & Training, AM Best, echoes this. She said that the big theme of FIDES 2013 will be that the region is an exciting one that is reaching its next stages of development. She adds that trends in the wider global reinsurance markets inevitably have a tangible effect on the markets – but often in a positive way.

“The markets are subject to competition but there is also a certain amount of transfer of expertise that comes with the influx of global reinsurance companies and brokers which is benefiting the Latin American markets,” she said.

While the big talking point in reinsurance globally has been the recent influx of alternative capacity, Mosher said this influence has been minimal in Latin America, partly because of the regulations in place in some countries.

“Some markets have put in regulation that ensures that local reinsurance providers are not crowded out by global reinsurance capital,” he said. “This diminishes the diversification of risk and possibly keeps direct prices higher than they need to be, but it also allows local reinsurers time to grow their businesses so they can be competitive against other forms of risk transfer. As a result, the Latin American has not benefited as much as other regions from the influx of alternative capital coming into the market.”

The analysts agree that there are solid growth prospects across the region in the coming years. They said that Colombia has the most interesting potential, partly because the government's focus on economic and infrastructure growth is creating much opportunity for insuring commercial risks. They add that Brazil, despite already being the largest market, also continues to show strong growth.