Denisa DUMITRU, President, STELLAR Re
International reinsurers have enjoyed positive results recently. This enables them to be more competitive and there may be some more favorable pricing for reinsureds in the coming year as a result. However, this will depend on reinsurers' experience with specific individual reinsureds.
XPRIMM: How will evolve the reinsurance price in 2008?
Denisa DUMITRU: International reinsurers have enjoyed positive results
recently. This enables them to be more competitive and there may be some
more favorable pricing for reinsureds in the coming year as a result. However,
this will depend on reinsurers' experience with specific individual reinsureds.
XPRIMM: How do you perceive the Reinsurance offer's evolution, especially
on the natural catastrophe segment?
D. D.: The small amount of new capital that has entered the market
recently will probably be offset by recent mergers between some medium
sized reinsurers. When two reinsurers merge the resulting capacity is usually
less. Consequently the prospect is for overall capacity for natural catastrophe
coverage to remain stable. This could change if capacity is withdrawn or
new capacity is introduced between now and year end.
XPRIMM: Do you consider that the introduction of the compulsory insurance
for homeowners will result in a growth of Reinsurers' interest in our country?
D. D.: The introduction of obligatory homeowners insurance will result
in a higher concentration of natural perils risks which will need to be
diversified by means of transfer to the international reinsurance market.
The international market is fully capable of accommodating this increased
demand for additional reinsurance capacity. However, much will depend on
the design of the enabling legislation and how effectively it is implemented.
XPRIMM: Do you consider necessary the introduction of a deductible in
case of compulsory insurance for homeowners?
D. D.: When insurance is made mandatory, then affordability becomes
a key issue. Coverage that reimburses every small claim is unlikely to
meet the affordability threshold that such a program requires. Some sort
of deductible is necessary if the coverage is to be affordable for everyone.
The problem is finding a balance between affordability (high deductible)
and adequate coverage (low deductible). The best solution would be to offer
a variety of deductible/price combinations for the insurance buyer to choose
XPRIMM: According with the opinions of some analysts in Monte Carlo,
the insurance industry is on an ascendant trend, because of the introduction
of new risks management methods. How do you comment this?
D. D.: The science of Risk Management is becoming more sophisticated
and many businesses now practice ERM (Enterprise Risk Management). ERM
seeks to manage not only the hazard risk by means of insurance but also
the generally uninsurable business (strategic, financial and operational)
risks. The management of business risks does not directly impact the insurance
mechanism. Indirectly however, the greater focus on and understanding of
the overall issue of ERM, usually at more senior levels of management,
probably results in better and more effective use of the insurance mechanism.
XPRIMM: Thank you!
Editor: Mihaela CIRCU
| Published on 08.11.2007