12 September 2016 Insurance

The most political Monte Carlo ever?

In terms of the main topics of discussion, this will possibly be the most “political” Monte Carlo Rendez-Vous ever, because of the importance of the outcome of the US election and the implications for the insurance industry of the UK’s leaving the EU.

That is the view of Ingrid Carlou, director general of Latin American reinsurer Patria Re, who told Monte Carlo Today that the company does not expect Brexit to harm its business, despite the fact it launched a Lloyd’s syndicate in January this year: Patria Re SPS PAT6125. She also said that the current climate contains “more macro uncertainty than at any time during my career”.

Carlou said the new syndicate has been developing nicely and notes that Lloyd’s has said Brexit does not pose an enormous threat to Lloyd’s.

“In the worst case scenario they expect that only a limited amount of direct insurance from the EU could be at risk,” she said. “As far as we are concerned, and because we only write reinsurance through our Lloyd’s vehicle, we do not expect the Brexit decision and its eventual outcome to harm our plans.”

But, she says, the list of macro developments creating uncertainty has been growing. In addition to Brexit and subsequent political fallout and the US elections, the pound and the peso have devalued and the Mexican Central Bank has increased interest rates.

“The entire world will monitor developments in the UK and the EU closely, with an eye towards the economic and social impact. This period of uncertainty is likely to last for several years,” Carlou said.

She added: “The long aftermath to the global financial crisis has many lasting implications including, in my view, rising global inequality, loss of trust in public institutions and large corporations, the rise of populism as evidenced by the Trump candidacy in the US presidential election, Brexit etc. There is more of a willingness to reject the status quo and this will play out for a period of time.”

Despite all this, Carlou is optimistic about the prospects for Patria Re which, she said, is gradually increasingly its diversification.

“Patria Re is currently positioned as an international reinsurer with a specialty in Latin America. Our relationship in the syndicate with Pembroke as managing agent means that we want to increase our geographical diversification. Our goal is to be a strategic partner to key clients and we always strive to be supportive and add value,” she said.

“We believe the name of the game today is to be relevant. To me, being relevant is about bringing value to the market, being willing to innovate and use appropriate data and analytics to improve our offerings.”

She added that the company must remain on the ball in such a difficult operating environment, and that its relationship with Lloyd’s is a two-way street for the business.

“We will remain clear-eyed and objective in this difficult market environment. We know Latin America and we have an intimate relationship with our clients in the region.

“We may not be able to provide this same type of service operating from London in a broker-dominated market, but we do desire deep, strategic relationships with clients that we attract from

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