TMR keeps feet on ground as it grows
A ‘feet on the ground’ approach is central to Tokio Millennium Re’s (TMR) expansion and diversification, Tatsuhiko Hoshina, the company’s chief executive, has told Monte Carlo Today.
“For us, diversification is very important, both in lines of business and by territory,” he said. “Our newly opened US branch will improve our footing in the US market, bringing us closer to clients. Instead of being completely catastrophe-orientated we are trying to concentrate on the non-cat, so the US office will concentrate on the non-cat business.
“We also have our eyes on expansion in Asia and more growth in Europe, on the traditional reinsurance side.”
Recognising the growing importance of third party capital to the industry, the company formed Tokio Solution Management to act as a conduit between the capital markets and the reinsurance market. It supports capital market entities coming into the market in return for a fee.
“The fees will never overcome the losses on the margins on the cat side but they help to balance it out—we lose on one hand, but win on the other,” he said.
“For the next three years we anticipate that one of the biggest potential growth areas within the TMR group will be Tokio Solution Management.
“The more the capital markets investors come in the more fees we get and we are creating new products and utilising our platform more in order for us to grow.”
While Hoshina has seen a tendency for cedants to retain more risk, he says that they are buying more aggregate sideways cover.
“We do see potential opportunities in various areas by product and by region,” he said.
Having re-domesticated from Bermuda to Zurich, the company is now looking to deepen its footprint in Europe.
“It’s a very tough market—the upside is that they are very loyal to their reinsurers so once you’ve built a relationship it’s a long one; the down side is that it can be hard to get your foot in that door.
“However, we take a long-term view; it has always been TMR’s approach that we are not here for the fast buck, we are here for the long term, so we are very patient about penetrating the European market.”