Regional reinsurers won’t survive in MENA
The idea that regional reinsurers can thrive in the MENA region will be challenged over the next five years, although businesses may still have time to adapt.
This is the opinion of Gunther Saacke, chief executive officer of Qatar Re, speaking at a panel discussion at MultaQa Qatar 2015.
“The concept of the regional reinsurer has a flaw: for an efficient portfolio, you must have the best possible diversification. Over the next five years, the very concept of a regional reinsurer will be challenged,” he said.
“There are too many players making it difficult to be a meaningful reinsurance operation,” added Saacke.
However, he explained that regional reinsurers will “not just simply sink into the dust of the arena,” where there is quality. Saacke believes that the industry has two resources, capital and people, and the MENA region has talent.
He believes that these reinsurers will take meaningful steps to have a global presence and become part of larger operations that are strategically positioned.
Farid Chedid, chairman and chief executive officer of Chedid Re, disagreed in part. He explained that all reinsurers, whether created in the region or imported, have suffered from a very challenging environment, but regional players have been faster in reacting and improving results.
“It’s very challenging for regional reinsurers. But it’s not all pessimistic and they don’t have to shut down. Regional players still have time to adapt and fix their business model,” said Chedid.