Andreas GROSSE, Market Coordinator Romania, MUNICH Re
In the past renewal season we have seen a slight drop in reinsurance prices in the Romanian market, especially in some property reinsurance treaties. This can partially be explained by the fact that reinsurers increasingly seek to find an entry into the Romanian insurance market.
XPRIMM: Do you think the reinsurance market is going to turn soft
as estimations for 2008 indicate a drop in reinsurance rates?
Andreas GROSSE: In the past renewal season we have seen a slight
drop in reinsurance prices in the Romanian market, especially in some
property reinsurance treaties. This can partially be explained by the
fact that reinsurers increasingly seek to find an entry into the Romanian
insurance market. We at MUNICH Re are only prepared to accept business
at risk adequate terms and conditions. We focus on profitable business
across all lines and are prepared to give up market share if necessary.
XPRIMM: How do see the major development of the re/-insurance markets
in CEE and CIS region?
A.G.: Whereas in motor business we have seen double-digit growth
in the last three years, we consider that the Romanian market's future
growth perspectives will come from property and engineering lines of
business. If and when the NAT CAT Pool actually becomes a reality,
this will certainly have a positive impact on insurance penetration
in property, and also to some extent on reinsurance demand. As to the
planned infrastructure projects, in part financed by the European Union,
this is where the tremendous future potential lies.
XPRIMM: Taking into consideration the opportunities, what are the
plans MUNICH Re made for this region in 2008?
A.G.: The recent takeovers by large insurance groups / companies
mean that a large part of the Romanian non-life market is now in the
hands of foreign players. These players have a much lower need for
reinsurance coverage than smaller local companies, mainly centered
on property cat covers and accumulation XL covers in motor business.
XPRIMM: What are the major opportunities and threats of the Romanian
insurance market, one year after joining EU?
A.G.: The above-mentioned changes in market structure will in our
view accelerate much-needed developments in the Romanian insurance
market regarding the introduction of deductibles for motor hull business.
There may also be necessary progress in relation to the bonus-malus
system. It works on the basis that all companies in the insurance market
exchange information on any insured's historical loss experience when
the policyholder is looking for alternative quotations in the marketplace.
In this way, fairer pricing can be achieved. Ultimately, technical
risk analysis will become standard market practice in motor underwriting.
XPRIMM: What is the MUNICH Re's strategy in Romania in 2008?
A.G.: We support the creation of a NAT CAT Pool in the Romanian
insurance market since it represents a state-of-the-art insurance solution
to protect Romania and its insurance industry against the risks of
earthquake and flooding. It is also a major business opportunity for
MUNICH Re. After final approval from the legislature, we are looking
forward to in-depth talks with all parties involved in respect of all
pool aspects.
XPRIMM: What are your expectations regarding the reinsurance demand
in Romania for this year and for which lines of business do you think
this demand would increase?
A.G.: At Munich Re, we see an increasing demand for risk management
services due to the upcoming new Solvency II regime in the European
Union. MUNICH Re offers a variety of services - from pure and plain
analysis of consequences for the market to coaching and software solutions,
i.e. www.pillarone.org. This is an open-source initiative sponsored
by Munich Re to provide all participating clients with the required
modeling tools to develop their own internal models.
XPRIMM: Thank you!
| Published on 15.05.2008 |