27 October 2015 Reinsurance

Three ingredients required for success: Tokio CEO

Selective underwriting, a clearly defined client base and aligning yourself with non-traditional capital are the key “ingredients of future success” in the property-cat space, Stephan Ruoff, chief executive of Tokio Millennium Re (TMR), told PCI Today.

He also forecast that we will continue to see the “transformation of the value chain” of the industry.

He added: “The expectation is that much of the mergers & acquisitions (M&A) have already happened but we believe that to be successful in this environment three key ingredients are required: underwriting skill, customer focus and the ability to work alongside third party capital.”

Ruoff was also at pains to point out that TMR was not an acquisition target.

“TMR is not for sale,” he said. “We have just confirmed to our clients our long-term vision and our clients appreciate the fact that we are not for sale, there will be no change of ownership and they can rely on a solid and long-term partner.

“We will certainly see more M&A activity in the industry but we are a stable partner for clients. More than that, we represent a specific strong partner being 100 percent owned by Japanese giant Tokio Marine & Nichido Fire Insurance.”

Ruoff is also relatively bullish about the outlook at renewal for the sector, compared with some other industry commentators.

“It’s true that in the Florida cat market we have seen signs of a stabilising market. Retro capacity has been scarce and pricing around specific perils has increased, which are two indicators that a pricing floor is being considered,” Ruoff said.

“However, we still have huge amounts of capacity and even more sitting on the sidelines and if there was an increase we would probably see a further influx of that capital in the cat space.”

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