Open for business: NewRe
A severely hardening market can draw in some reinsurance capacity that might have appeared more niche in easier times. NewRe, Munich Re’s unit for complex risks and bespoke insurance solutions, is ready to step into the fray.
“We are open for business,” CEO Thomas Braune (pictured) told Intelligent Insurer. He’s as fluent on market conditions and the justifications for reinsurer demands as anyone at Baden-Baden, but has a deal-maker’s zeal: “We are open to price anything.”
NewRe is traditionally a provider of structured solutions in casualty but with a book of property, and a hardening market has left the smallish niche player “happy to take regular business because there is demand for reinsurance”.
Munich Re has let the unit off the leash with no particular instructions on growth targets or growth directions. “We have to deliver profits and the dividend,” Braune said. NewRe often joins programmes complementing a leading share taken by Munich Re. But it is also free to step in on programmes where Munich Re is not participating.
“Capacity is limited, in part due to the large players, but also some smaller players who cannot utilise the retro market. We don’t have capacity constraints so we are in an attractive position.”
“We have to deliver profits and the dividend.” Thomas Braune, NewRe
Braune is no pushover, however. Echoing the message of his chief underwriting officer elsewhere in this publication, he may take a slice of a well-priced programme if the capacity crunch threatens to leave a quality cedant wanting. But he isn’t backing down on the season’s ever-rising pricing demands.
“We need to understand the exposure, how it is impacted by inflation or by gas shortages in winter or whatever else,” Braune said. “And then we need a fair price to reflect inflation, as well as the additional uncertainties.”
Braune is just as ready to demand price in addition to higher retentions, tighter structures, named perils or any of the long list of demands set as litmus tests by the many reinsurers making heavy demands of cedants this year.
Given his preference, he’d look at contracts with improved definitions of single events to avoid accumulations, but what isn’t in the terms can just as easily go into the price.
“Just like on capital markets, uncertainty has a price. We are open to price anything; we are just strict in what we can accept,” he concluded.
