Monte Carlo Today 08/08/2013

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MONTE CARLO TODAY Sunday September 8, 2013

No news is good news in reinsurance: SCOR CEO

What’s inside

“

No news is usually good news in reinsurance.” That was the message from Denis Kessler, the chairman and chief executive WNÅKMZ WN \PM ZMQV[]ZMZ ;+7: LQ[K][[QVO details of the group’s new strategic plan which PM XZM[MV\ML \W QV^M[\WZ[ WV ;MX\MUJMZ <PM XTIV KITTML 7X\QUIT ,aVIUQK[ NWTTW_[ Q\[ ;\ZWVO 5WUMV\]U XTIV _PQKP KW^MZ[ \PM period 2010–2013, and which was updated in ;MX\MUJMZ NWTTW_QVO \PM IKY]Q[Q\QWV WN <ZIV[IUMZQKI :M¼[ UWZ\ITQ\a XWZ\NWTQW <PM UW[\ ZMKMV\ XTIV _PQKP \ISM[ \PM ÅZU to 2016 and comes just three months after the KWUXIVa JW]OP\ \PM =; TQNM J][QVM[[ WN /MVerali, is the continuation of the same strategy. <PM NW]Z [\ZI\MOQK XQTTIZ[ WN \PM J][QVM[[ ZMmain unchanged, Kessler said, as does its target NWZ IKPQM^QVO XZWÅ\IJQTQ\a WN JI[Q[ XWQV\[ IJW^M \PM ZQ[S NZMM ZI\M W^MZ \PM KaKTM <PM KWUXIVa _QTT OZW_ J]\ [\MILQTa 3M[[TMZ [IQL 1\ LWM[V¼\ XTIV IVa IKY]Q[Q\QWV[ J]\ any opportunities that do emerge would only JM KWV[QLMZML _Q\PQV ^MZa [\ZQK\ XZM [M\ KZQ\MZQI ¹5IVa KWUXIVQM[ IZM NWZKML \W ]VLMZOW UI[[Q^M ZM[\Z]K\]ZQVO IVL N]VLIUMV\IT KPIVOM[ JMKI][M \PMQZ J][QVM[[ UWLMT Q[ VW\ []Q\ML VWZ ILIX\IJTM \W UIZSM\ KWVLQ\QWV[ WZ \PM _Ia I XIZ\QK]TIZ [MK\WZ PI[ KPIVOML 5IVa aMIZ[ IOW ;+7: _MV\ through the same thing,” Kessler said. ¹:QOP\ VW_ _M IZM QV ^MZa LQNNMZMV\ XTIKM 7]Z J][QVM[[ UWLMT Q[ ZWJ][\ IVL _MTT ILIX\ML

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11 TOP TIPS FOR MANAGING YOUR RATING AGENCIES

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JUNK BONDS MAY NOT BE GARBAGE AFTER ALL

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SMALLER PLAYERS WILL INCREASINGLY USE ILS

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BRIT EXPANDS NETWORK WITH BERMUDA OFFICE

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INDUSTRY WELL PLACED TO HANDLE CATS

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BROKER TEAM FROM JLT RE CYCLE TO MONTE CARLO

10 INFLUX OF CAPACITY IS A WORRY FOR PRICING

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2

5

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10 ENDURANCE EXPANDS CAPABILITIES IN ASIA PACIFIC 13 QBE EUROPE TO PROVIDE CAPACITY TO COBALT 9

13 ASBESTOS TO HIT REINSURERS 14 REINSURERS MUST WORK WITH GOVERNMENTS 14 BERMUDA SET TO BECOME ILS GLOBAL LEADER

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16 AHJ CHAIR PONDERS 40 YEARS OF CHANGE 16 CHUBB TO OFFER CYBER SECURITY AT LLOYD’S

Denis Kessler, SCOR \W \PM MV^QZWVUMV\ _M IZM WXMZI\QVO QV ;W _Pa change things? If we had decided we were not suited to this environment, we would have factored Q\ QV\W W]Z J][QVM[[ XTIV *]\ _M IZM _MTT LQ^MZ[QÅML IVL _MTT XW[Q\QWVML (Continued top of page 2)

17 LEGACY OUT— INVESTORS IN

0M [Ia[ \PM LQNNMZMV\ ^MPQKTM[ JMQVO ][ML to cover these risks are sometimes distracting KWUXIVQM[ NZWU \PM NIK\ \PI\ [WUM WN \PQ[ J][Qness is under-priced. ¹<PM JQOOM[\ \ITSQVO XWQV\ \PQ[ aMIZ _QTT JM the capital markets and their feverish interest in \PM ZMQV[]ZIVKM J][QVM[[ º PM [IQL ¹0MLOM N]VL[ XZQ^I\M MY]Q\a IVL VW_ \PM XMV[QWV N]VL[ IZM ITT [KZIUJTQVO NWZ I XQMKM WN \PM IK\QWV IQLML Ja IV IZUa WN JIVSMZ[ IVL lawyers looking to replace lost revenue from the

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18 GIC RE: SPREADING ITS WINGS BEYOND INDIA 19 HEADING FOR A SOFT MARKET

Beware under-priced business in whatever form Q^MZ[QÅKI\QWV [PW]TL VW\ JM ZMOIZLML I[ I XIVIKMI Ja ZMQV[]ZMZ[ IVL \PM QVL][\Za I[ I _PWTM U][\ JM _IZa WN \PM KWV[MY]MVKM[ WN under-pricing catastrophe risks however they are packaged. <PI\ Q[ \PM [\IZS _IZVQVO UILM Ja <IL 5WV\ZW[[ KPIQZUIV IVL +-7 WN /MVMZIT :M [XMISQVO QV \PM KWV\M`\ WN \PM QVÆ]` WN IT\MZnative capital that has entered the industry – [WUM\PQVO PM [Ia[ _QTT JM I JQO LQ[K][[QWV XWQV\ I\ \PM aMIZ¼[ 5WV\M +IZTW :MVLMb >W][

1

UWZ\OIOM JIKSML [MK]ZQ\a ÅI[KW “But there are two underlying issues: the industry’s dependence on cat models and that diversification is not a panacea. If you put a portfolio of under-priced risks togethMZ IVL KITT Q\ I JWVL WZ IV QV[]ZIVKM TQVSML [MK]ZQ\a aW] [\QTT PI^M I J]VKP WN ]VLMZ XZQKML ZQ[S[ <IQT ZQ[S TM^MZIOM IVL TQY]QLQ\a are the lessons learned from the historical NQVIVKQIT NIQT]ZM[ º 5WV\ZW[[ [IQL (Continued bottom of page 2)

DAY 1: Sunday September 8 2013 | MONTE CARLO TODAY | 1

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SUNDAY

News

08.09.13

No news is good news in reinsurance: SCOR CEO (Continued from top of page 1) NWZ I \ZIV[Q\QWV QV QV\MZM[\ ZI\M[ TM^MT[ _M JMTQM^M will occur. No news is usually good news in reinsurance.� ?Q\PQV \PQ[ UMI[]ZML IXXZWIKP 3M[[TMZ PI[ QLMV\QÅML [M^MZIT OWWL ZMI[WV[ PM JMTQM^M[ ;+7: KIV W]\XMZNWZU Q\[ KWUXM\Q\WZ[ .QZ[\ PM JMTQM^M[ \PM TW_ QV\MZM[\ ZI\M MV^QZWVUMV\ _PQKP PI[ \ZW]JTML \PM QVL][\Za NWZ [W TWVO VW_ _QTT [WWV MVL IVL \PI\ ;+7: Q[ _MTT positioned to take full advantage of this. ;+7: PI[ PM [Ia[ QV^M[\ML I TW\ WN MNNWZ\ QV ]VLMZ[\IVLQVO PW_ Q\ KIV JM[\ UIVIOM \PQ[ transition from very low interest rates to more VWZUIT TM^MT[ 7VM WN \PM \PQVO[ ;+7: PI[ LWVM NWZ M`IUXTM Q[ ZMJITIVKM Q\[ QV^M[\UMV\ portfolio with an emphasis on shorter duration QV^M[\UMV\[ [WUM\PQVO \PI\ Q[ IT[W ZMÆMK\Q^M WN \PM UISM ]X WN U]KP WN Q\[ TQIJQTQ\a XWZ\NWTQW <PQ[ _QTT ITTW_ Q\ \W Y]QKSTa ZMITQOV Q\[ XWZ\NWTQW as interest rates improve to maximise the upside. Kessler’s second area of focus—and reason for optimism—is the growth of the company’s XZWXMZ\a KI[]IT\a J][QVM[[ 0M M`XMK\[ \PQ[ J][QVM[[ \W OMVMZI\M I ^MZa PMIT\Pa KWUJQVML ZI\QW WN ! \W ! XMZKMV\ _Q\PQV \PM PWZQbWV WN \PM VM_ XTIV 0M IOIQV JIKS[ ]X \PQ[ M`XMK\I\QWV .QZ[\ PM JMTQM^M[ \PM QVÆ]` WN IT\MZVI\Q^M KIXIKQ\a _QTT [\IJQTQ[M IVL ZM\ZMI\ [TQOP\Ta QV TQVM with rises in interest rates. He is convinced that the wider low yield environment is the primary driver for this money seeking alternative investments and, as this changes, so will the sentiment of these investors – something that would

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ITTW_ ZMQV[]ZMZ[ \W UW^M JIKS QV\W \PQ[ [XIKM *]\ \PM JQOOMZ [W]ZKM WN OZW_\P NWZ ;+7:Âź[ XZWXMZ\a KI[]IT\a JWWS _QTT KWUM \PZW]OP I simple gradual expansion of its lines with existQVO KTQMV\[ 0M [Ia[ I LZQ^MZ WN \PQ[ _QTT JM IV QVcreased sensitivity to counterparty risk among OTWJIT QV[]ZMZ[ KWUJQVML _Q\P \PM NIK\ \PI\ WN \PM JQOOM[\ ZMQV[]ZMZ[ UIVa PI^M \PM TW_M[\ M`XW[]ZM \W ;+7:

“Many of the biggest insurers have expanded rapidly in recent years. As such, they increasingly want to work with reinsurers with a truly global presence.�

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MONTE CARLO TODAY Sunday September 8, 2013

INTELLIGENT INSURER’S MONTE CARLO TODAY 1; 8=*41;0-, *A 6-?<76 5-,1) 4151<-, :MOQ[\MZML )LLZM[[" 3QVOÅ[PMZ 0W][M -TUÅMTL :WIL *ZWUTMa *: 4< =VQ\ML 3QVOLWU <MTMXPWVM" www.newtonmedia.co.uk ,1:-+<7: )6, 8=*41;0-: 6QKPWTI[ 4QXQV[SQ A7=: +76<)+<; 16 576<- +):47 2WPV ?IT[P <MTMXPWVM" ! Email: john.walsh@newtonmedia.co.uk 6QKPWTI[ 4QXQV[SQ <MTMXPWVM" ! Email: nlipinski@newtonmedia.co.uk 8:7,=+<176 )6, ,-;1/6 .Q[PMZUIV +ZMI\Q^M �6M_\WV 5MLQI 4QUQ\ML )TT ZQOP\[ ZM[MZ^ML

š5IVa WN \PM JQOOM[\ QV[]ZMZ[ PI^M M`XIVLML ZIXQLTa QV ZMKMV\ aMIZ[ )[ []KP \PMa increasingly want to work with reinsurers with I \Z]Ta OTWJIT XZM[MVKM IVL QLMITTa \PMa _IV\ \W _WZS _Q\P NM_MZ ZMQV[]ZMZ[ 7V \WX WN \PQ[ these companies are much more risk-aware when it comes to counterparty risk. š*MKI][M WN ;+7:Âź[ PQ[\WZa XZWXWZ\QWVITTa _M _QTT WN\MV JM \PM XTIaMZ \PMa PI^M \PM least exposure to on the programme,â€? Kessler [IQL šAM\ _M KIV WNNMZ \PM OTWJIT [MZ^QKM IVL expertise they are looking for. That makes us a good option for them when they review their reinsurance arrangements or seek a new partVMZ ;UITTMZ XTIaMZ[ _QTT PI^M UWZM LQNĂ…K]T\a accessing these risks.â€? Q

6W XIZ\ WN \PQ[ X]JTQKI\QWV UIa JM ZMXZWL]KML stored in a retrieval system, or transmitted in any NWZU WZ Ja IVa UMIV[ MTMK\ZQKIT UMKPIVQKIT XPWtocopying, recording or otherwise without the prior _ZQ\\MV XMZUQ[[QWV WN \PM X]JTQ[PMZ The views expressed in Intelligent Insurer’s Monte Carlo Today IZM VW\ VMKM[[IZQTa \PW[M [PIZML Ja \PM X]JTQ[PMZ 6M_\WV 5MLQI 4QUQ\ML ?Q[PQVO \W ZMÆMK\ \PM \Z]M nature of the market, the editor has included articles NZWU I V]UJMZ WN [W]ZKM[ IVL \PM ^QM_[ M`XZM[[ML IZM \PW[M WN \PM QVLQ^QL]IT KWV\ZQJ]\WZ[ 6W ZM[XWV[QJQTQ\a WZ TQIJQTQ\a Q[ IKKMX\ML Ja 6M_\WV 5MLQI 4QUQ\ML NWZ any loss to any person, legal or physical, as a result WN IVa [\I\MUMV\ NIK\ WZ Ă…O]ZM KWV\IQVML QV Intelligent Insurer’s Monte Carlo Today. <PQ[ X]JTQKI\QWV Q[ VW\ I []J[\Q\]\M NWZ IL^QKM WV I [XMKQĂ…K \ZIV[IK\QWV <PM X]JTQKI\QWV WN IL^MZ\Q[MUMV\[ LWM[ VW\ ZMXZM[MV\ MVLWZ[MUMV\ Ja \PM X]JTQ[PMZ 1V\MTTQOMV\ 1V[]ZMZ ¡ 1;;6 !! !

Beware under-priced business in whatever form (Continued from bottom of page 1) 0M [IQL W\PMZ JQO \ITSQVO XWQV\[ I\ \PM M^MV\ _QTT JM \PM KWV\QV]ML KWV[WTQLI\QWV _Q\PQV \PM JZWSMZIOM QVL][\Za IVL \PM TWVOMZ \MZU ZMXMZcussions of this as well as the growing regulatory challenges. He said that although delegates would likely discuss rates and terms and conditions in the market “one can’t and shouldn’t generalise IJW]\ UIZSM\ ZI\M[ ?M TWWS I\ M^MZa KTQMV\ IVL

“One can’t and shouldn’t generalise about market rates. We look at every client and every transaction on its own merit.�

Tad Montross, General Re

2 | MONTE CARLO TODAY | DAY 1: Sunday September 8 2013

every transaction on its own meritâ€?. 0M [IQL PQ[ WJRMK\Q^M I\ \PM :MVLMb >W][ is simply to meet with clients and prospects to JM\\MZ ]VLMZ[\IVL \PMQZ KPITTMVOM[ IVL VMML[ š[W _M KIV JM ZM[XWV[Q^M QV \PM ]XKWUQVO ZMnewals.â€? )VL PM [IQL \PM KWUXIVa Q[ QV VW P]ZZa \W make headlines, as long as it keeps doing what it does well. š?M _QTT JM UISQVO I JQO IVVW]VKMUMV\ QV 5WV\M +IZTW" \PI\ _M PI^M VW M`Q\ [\ZI\MOa Âş he joked. “In all seriousness, we are committed \W \PM ZMQV[]ZIVKM J][QVM[[ ?M LWVÂź\ KWUXM\M _Q\P W]Z KTQMV\[ IVL _MÂźTT JM IZW]VL \W UISM good on the promises, the commitments we UISM 1\ UIa VW\ UISM IVa PMILTQVM[ \WLIa J]\ \PI\Âź[ Ă…VM _Q\P ][ Âş Q

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Wells Fargo Collateral Trust Services is internationally recognized for outstanding products and services ĆŒÉ„É„ Ɔ ƆɄ ).0- ) É„ -0./É„ (É„*!É„/# É„ -É„ (2013) ĆŒÉ„É„ *'' / - 'É„ -1$ É„ -*1$ -É„*!É„/# É„ -É„ (2012, 2013) ĆŒÉ„É„ '* 'É„ ./É„ )&É„!*-É„ ).0- ) É„ -0./.É„ (2011, 2012)

+/$1 É„ĆŒÉ„ 0 /$ ' É„ĆŒÉ„ $).0- ) É„ĆŒÉ„ É„ĆŒÉ„ Ɔ ƆɄ +/$1 Ɔ ƆɄ 0 /$ ' É„ĆŒÉ„ 0- /4É„ĆŒÉ„ -(*)/É„ "0' /*-4 Wells Fargo Corporate Trust Services does not provide legal or tax accounting services for its customers. Customers should always consult their own professional tax and legal advisors in connection with any effort to qualify a particular transaction for favorable treatment under applicable tax laws and regulations. Wells Fargo Corporate Trust Services is a division of Wells Fargo Bank, N.A. and may refer business to its affiliates, including Wells Fargo Bank International and Wells Fargo Securities International Limited. Wells Fargo Bank International is regulated by the Central Bank of Ireland and both Wells Fargo Bank, N.A. and Wells Fargo Securities International Limited are authorized and regulated by the UK’s Financial Services Authority under the Financial Services and Markets Act 2000. Š 2013 Wells Fargo Bank, N.A. All rights reserved. MC-6412

SUNDAY

News

08.09.13

11 top tips for managing your rating agencies Litmus Analysis, the consultancy that specialises in helping COMPANIESĂ?BETTERĂ?UNDERSTANDĂ?THEIRĂ?lNANCIALĂ?STRENGTHĂ?ANDĂ? ratings, gives 11 top tips on how reinsurers can better manage their relationships with rating agencies.

1

Make sure the agency capital model is completed properly <PQ[ [MMU[ WJ^QW][ J]\ _MÂź^M [MMV I V]UJMZ of examples where there were errors that weakened the result and/or key strengths that could PI^M JMMV PQOPTQOP\ML J]\ _MZM UQ[[ML

2

Prospective earnings are crucial, but you have to make a compelling case for them *W\P )5 *M[\ IVL ; 8 PI^M IT_Ia[ [MMV XZWspective earnings as fundamental to the rating IVL ; 8Âź[ ZMKMV\ KZQ\MZQI KPIVOM UISM[ \PQ[ M^MV UWZM M`XTQKQ\ 1\Âź[ XIZ\Ta IJW]\ aW]Z \ZIKS ZMKWZL J]\ IT[W \PM Âť_PaÂź WN PW_ aW]Z UIZSM\ XW[Q\QWV competitive advantages and underwriting controls will deliver the results you are forecasting.

3

They are NOT asking you to diversify! It might seem this way and they might even appear to suggest it (although they shouldn’t as \PI\ _W]TL KWV[\Q\]\M IL^QKMŸ J]\ \PQ[ Q[ R][\ I confusion of the analytical point. Namely, concentration risk is a fact of life for specialists and aW] OM\ XMVITQ[ML NWZ Q\ QN \PI\ Q[ aW]Z XZWÅTM <PI\ Q[ VW\ [WT^MLŸ Ja LQ^MZ[QÅKI\QWV NWZ LQ^MZ-

[QĂ…KI\QWVÂź[ [ISMÂź ]VTM[[ Q\Âź[ QV\W IZMI[ aW] KIV demonstrate you really understand well and \PI\ aW] _QTT VW\ JM ÂťJ]aQVO J][QVM[[Âź JW\P WN _PQKP \PMa _QTT JM KWVKMZVML IJW]\

4

Reserve adequacy is always a concern It’s the hardest thing for a third-party IVITa[\ \W JM KWVÅLMV\ IJW]\ 1N aW] \PQVS you over-reserve, provide as much supporting M^QLMVKM []KKQVK\Ta \PI\ aW] KIV 1N aW] PI^M ]VLMZ ZM[MZ^ML QV \PM XI[\ \PMa IZM JW]VL \W JM worried, so address it.

5

Remember, ratings are decided by committees (not individuals or computers) The analysts you meet are your communica\QWV KPIVVMT \W \PM UMUJMZ[ WN \PM KWUUQ\\MM 6W\ WVTa LW aW] VMML \PMU \W JMTQM^M QV \PM [\ZMVO\P WN aW]Z XZWĂ…TM \PMa VMML \W JM IJTM \W effectively explain this to a committee whose RWJ Q[ ¡ QV XIZ\ ¡ \W JM [KMX\QKIT

6

Why don’t they believe us? +TIQUQVO N]\]ZM []KKM[[ M^MV OQ^MV I [\ZWVO \ZIKS ZMKWZL Q[ VW\ MVW]OP 1\ UQOP\ [MMU OITT-

ing that they won’t just accept what you say at NIKM ^IT]M J]\ \PI\Ÿ[ \PMQZ RWJ /Q^M IVITa\QKIT ZMI[WV[ NWZ JMTQM^QVO QV aW]Z [\ZMVO\P[ UIZSM\ [PIZM LQ[\ZQJ]\QWV KPIVVMT [\ZMVO\P[ ]VLMZwriting controls, specialist knowledge, strength WN KTQMV\ ZMTI\QWV[ M\K IVL LI\I ZM[MIZKP \PI\ support them.

7

Don’t look to rely on ‘comments’ you make at the management meeting If it’s important, put it in the presentation. -^MV QN \PMa IKK]ZI\MTa VW\M ITT aW]Z ^MZJIT KWUUMV\[ IVL ZM[XWV[M[ \W Y]M[\QWV[ \PMa UIa VW\ ZMUMUJMZ \PM M`IK\ ZI\QWVITM <PI\ will not work with the committee.

8

Understand the point of each part of the criteria and address all their questions -IKP XIZ\ WN \PM ZI\QVO KZQ\MZQI PI[ I XWQV\ \W Q\ QV \MZU[ WN LMKQLQVO \PM ZI\QVO <PM JM\\MZ M^MZaJWLa QV^WT^ML ]VLMZ[\IVL[ _PI\ \PI\ Q[ the more likely you are to successfully explain your strengths in that context and/or address any perceived weaknesses.

9

Make sure the message is clear and memorable 1N aW] JMTQM^M aW] PI^M I OWWL [\WZa \W \MTT WV IVa part of the analysis put the message in the slide PMILQVO LWVÂź\ TMI^M Q\ I[ \PM Ă…VIT J]TTM\ I\ \PM JW\\WU WN \PM [TQLM 1N [WUM\PQVO Q[ []JRMK\Q^M ][M UMUWZIJTM IVMKLW\M[ \W QTT][\ZI\M \PM XWQV\

10

Graphs and diagrams are good but don’t be too clever, or cute, with them =[M OZIXP[ \W KTMIZTa [PW_ \PM QUXWZ\IV\ trend, fact or process. But don’t make them too complex or the power of the point will get lost. )VL LWVŸ\ JM K]\MŸ _Q\P \PM aMIZ[ aW] [MTMK\ WZ \PM I`Q[Ÿ WN I OZIXP <PMa _QTT XZWJIJTa [XW\ Q\ WZ _WZ[M \PMa _QTT UQ[[ Q\ J]\ [WUMJWLa I\ \PM KWUUQ\\MM _QTT VW\QKM

11

ERM is a strategic process 5ISM []ZM aW] KW^MZ aW]Z -:5 N]VK\QWV [XMKQĂ…KITTa J]\ IT[W UISM []ZM Q\Âź[ KTMIZ PW_ Q\ QVNWZU[ [\ZI\MOa LMZQ^M[ NZWU \PM JWIZL IVL Q[ MUJMLLML IKZW[[ aW]Z WXMZI\QWV[ Q Litmus Analysis is staffed by ex-senior rating agency analysts.

Stuart Shipperlee

Peter Hughes

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DAY 1: Sunday September 8 2013 | MONTE CARLO TODAY | 5

SUNDAY

Insight Investment – a BNY Mellon company

08.09.13

Junk bonds may not be garbage after all As the current low yield environment is expected to persist, insurers have been SEEKINGÏWAYSÏTOÏGENERATEÏHIGHERÏYIELDS ÏANDÏSUB INVESTMENTÏGRADEÏBONDSÏMAYÏlTÏ the bill, says Simon Richards. Background 0Q[\WZQKITTa LM[XQ\M QV^M[\QVO I [QOVQÅKIV\ XZWXWZ\QWV WN \PMQZ JITIVKM [PMM\[ QV\W Å`ML QVKWUM I[[M\[ insurance companies focused almost solely on govMZVUMV\ JWVL[ IVL QV^M[\UMV\ OZILM KWZXWZI\M LMJ\ 5WZM ZMKMV\Ta I[ LMZQ^I\Q^M[ PI^M UILM Q\ easier to hedge the overseas interest rate and currency exposures arising from investing in overseas JWVL[ QV[]ZMZ[ PI^M JMMV IJTM \W LQ^MZ[QNa \PMQZ M`posure into different issuers, sectors and economies. However, BBB- remains a psychological cut off point for the majority of insurers and even \PW[M \PI\ LQL XMZUQ\ M`XW[]ZM \W []J QV^M[\UMV\ OZILM¸»R]VS¼ WZ »PQOP aQMTL¼¸JWVL[ _Q\PQV \PMQZ XWZ\NWTQW[ \MVLML \W ZM[\ZQK\ \PW[M PWTLQVO[ \W JWVL[ \PI\ PIL ZMKMV\Ta JMMV LW_VOZILML NZWU QV^M[\UMV\ OZILM [\I\][ \PM [W KITTML »NITTMV IVOMT[¼

How risky are high yield bonds? .WZ I N]VL UIVIOMZ _Q\P [\ZWVO JW\\WU ]X IVITa\QKIT [SQTT[ \PM XZMLQK\IJQTQ\a WN KI[P ÆW_[ IVL QVKWUM OMVMZI\ML Ja I J][QVM[[ IZM MI[QMZ \W I[sess over a shorter time period. This is particularly \PM KI[M NWZ PQOP aQMTL Q[[]M[ _PMZM \PMZM UIa JM KWV[QLMZIJTM ]VKMZ\IQV\a JMaWVL \PM VM`\ \W UWV\P[ 1VLMML \PM JQOOM[\ XZW\MK\QWV IOIQV[\ \PM KZMLQ\ ZQ[S WN PWTLQVO IVa LMJ\ Q[ \PM [PWZ\ L]ZI\QWV IVL KWZZM[XWVLQVO PQOP ^Q[QJQTQ\a WN \PM Q[[]MZ¼[ IJQTQ\a \W UMM\ \PM KW]XWV XIaUMV\[ IVL ZM\]ZV \PM principal as scheduled. This increased certainty of outcome over shorter durations is a critical risk mitigant when considering high yield opportunities. .]Z\PMZ \PM IXXZWIKP ][ML Ja ZI\QVO IOMV-

Figure 1: Mismatch between rating and maturity Probability of default

higher

from reinvesting at higher yields, rather than locking in low rates for an extended period.

The search for yield

Simon Richards

“Insurers seeking increased risk-adjusted returns should be prepared to look beyond their usual comfort zones to take advantage of market opportunities in a number of areas.” KQM[ Q[ \W I[[QOV I ZI\QVO JI[ML WV \PM _PWTM issuer curve regardless of maturity, so the ac\]IT MKWVWUQK ZQ[S QVPMZMV\ QV I []J QV^M[\UMV\ OZILM KWZXWZI\M JWVL _Q\P [Ia R][\ I aMIZ \W UI\]ZQ\a UIa JM UI\MZQITTa TW_MZ \PIV \PM credit rating would suggest. This creates opXWZ\]VQ\QM[ NWZ \PW[M IJTM \W \ISM IL^IV\IOM WN \PQ[ IVWUITa _PMZMJa aQMTL[ IZM PQOPMZ \PIV ZMY]QZML \W R][\QNa \PM MNNMK\Q^M LMNI]T\ IVL QTTQY]QLQ\a ZQ[S[ <PQ[ Q[ QTT][\ZI\ML QV .QO]ZM For insurers seeking attractive risk-adjusted returns, the recommended approach is therefore to seek out short-dated positions where certainty Q[ OZMI\M[\ J]\ _PMZM I\\ZIK\Q^M [XZMIL[ KIV [\QTT JM IKPQM^ML

yield

Current economic conditions Targeted maturity

Probability of default

lower 1

2 3 4 Years to maturity

Source: Insight investment. For illustrative purposes only.

5

In addition to seeking higher returns in the [PWZ\ \MZU QV[]ZMZ[ IZM IT[W KWVKMZVML IJW]\ the potential for future interest rate rises and hence the adverse impact this would have on \PMQZ Å`ML QVKWUM XWZ\NWTQW[ ) N]Z\PMZ IL^IV\IOM WN [PWZ\ LI\ML PQOP aQMTL JWVL[ Q[ \PI\ I[ positions are constantly maturing there is po\MV\QITTa [KWXM W^MZ \PM TWVOMZ \MZU \W JMVMÅ\

6 | MONTE CARLO TODAY | DAY 1: Sunday September 8 2013

)[ \PM K]ZZMV\ TW_ aQMTL MV^QZWVUMV\ Q[ M`XMK\ML \W XMZ[Q[\ QV[]ZMZ[ PI^M JMMV [MMSQVO _Ia[ \W OMVMZI\M PQOPMZ aQMTL[ \W MVIJTM \PMU \W UMM\ \PM promises made to shareholders and policyholders. ?PQTM Q\ Q[ OMVMZITTa MI[a \W QVKZMI[M M`XMK\ML ZM\]ZV[ Ja QVKZMI[QVO ZQ[S NWZ QV[]ZMZ[ \PQ[ Q[ IKKWUXIVQML Ja PQOPMZ ZMO]TI\WZa KIXQ\IT ZMY]QZMUMV\[ and potentially increased downside risk. ;WXPQ[\QKI\ML QV[]ZMZ[ IZM \PMZMNWZM [MMSQVO QVvestments which offer increased yields due to other NIK\WZ[ []KP I[ QTTQY]QLQ\a WZ KWUXTM`Q\a ZQ[S[ WZ QV^M[\WZ I^MZ[QWV \PI\ UIa VW\ ZMÆMK\ \PM IK\]IT MKWVWUQK[ WN IV I[[M\ KTI[[ 7N KW]Z[M QV WZLMZ \W do this they need to understand the impact of those ZQ[S[ WV \PMQZ JITIVKM [PMM\[ IVL MV[]ZM \PI\ \PMa have appointed an investment manager who has the relevant expertise in managing these types of asset. )[[M\ JIKSML [MK]ZQ\QM[ MUMZOQVO UIZSM\ LMJ\ TWIV[ ][ML \W ÅVIVKM KWZXWZI\M J]a W]\[ KWUUMZKQIT ZMIT M[\I\M TMVLQVO IVL PQOP aQMTL JWVL[ ITT K]ZZMV\Ta Å\ QV\W \PQ[ WXXWZ\]VQ\a [M\ NWZ QV[]ZMZ[

Conclusions 1V[]ZMZ[ [MMSQVO QVKZMI[ML ZQ[S ILR][\ML ZM\]ZV[ [PW]TL JM XZMXIZML \W TWWS JMaWVL \PMQZ ][]IT KWUNWZ\ bWVM[ \W \ISM IL^IV\IOM WN UIZSM\ WXXWZ\]VQ\QM[ QV I V]UJMZ WN IZMI[ ;XMKQITQ[\ I[[M\ UIVIOMZ[ IZM TQSMTa \W JM ZMY]QZML \W PMTX UIVIOM \PM MKWVWUQK IVL ZMOulatory risks that arise from new investments. ;PWZ\ LI\ML PQOP aQMTL Q[ WVM []KP WXXWZ\]VQ\a for insurers considering where enhanced returns KIV JM IKPQM^ML _PQTM UIVIOQVO JW\P MKWVWUQK ZQ[S IVL ZMO]TI\WZa KIXQ\IT ZMY]QZMUMV\[ ?PQTM PQOP aQMTL JWVL[ _QTT VM^MZ IVL QVLMML [PW]TL VM^MZ UISM ]X I [QOVQÅKIV\ XIZ\ WN I \aXQcal insurer’s asset strategy, as a non-core, returnMVPIVKQVO IT\MZVI\Q^M PQOP aQMTL JWVL[ QV I [PWZ\er-maturity format make a lot of sense and should have an active role in insurance portfolios. Q Simon Richards is head of insurance solutions at Insight Investment. He can be contacted at: Simon.Richards@insightinvestment.com

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SUNDAY

News

08.09.13

Smaller players will increasingly use ILS 7

VM WN \PM PW\\M[\ \WXQK[ I\ 5WV\M +IZTW \PQ[ aMIZ _QTT ]VLW]J\MLTa JM \PM OZW_QVO QVÆ]` WN \PQZL XIZ\a KIXQ\IT QV\W the collateralised reinsurance market and the many challenges this presents for traditional reinsurers. <PI\ Q[ \PM ^QM_ WN ?QTTQIU 8WTTM\\ XZM[QLMV\ IVL KPQMN M`MK]\Q^M WN *T]M +IXQ\IT 5IVagement, the investment management company specialising in reinsurance-linked investment XZWL]K\[ _PQKP PI[ I XIZ\VMZ[PQX _Q\P 5WV\XMTQMZ :M IVL W_VML Ja 5WV\XMTQMZ /ZW]X )VL PM IZO]M[ \PI\ \PM UW[\ QUXWZ\IV\ change occurring in this market is around the fact that smaller players are also increasingly using such markets. š)T\PW]OP UIVa WN \PM \WX OTWJIT J]aers of catastrophe reinsurance, who typically X]ZKPI[M UWZM \PIV WVM JQTTQWV LWTTIZ[ WN TQUQ\ XMZ M^MV\ PI^M JMMV \ZILQVO _Q\P IT\MZVI\Q^M markets for over a decade, we are now seeing smaller insurance groups, who in the past would not have sought collateralised protection, also considering such markets in order to reduce the credit risk in their reinsurance programmes,â€? he said. He says there are a couple of trends underpinning this trend: a greater desire for diversity QV KZMLQ\ ZQ[S IVL I NMIZ WN \PM KWV[MY]MVKM[ WN unforeseen systemic risk. š)V M`XTIVI\QWV NWZ \PQ[ \ZMVL QV^WT^M[ \_W important lessons that risk managers learned NZWU \PM Ă…VIVKQIT KZQ[Q[" Ă…Z[\ \PI\ \MV Âť)Âź ZI\ML KW]V\MZXIZ\QM[ XZW^QLM I JM\\MZ KZMLQ\ ZQ[S XZWĂ…TM \PIV \_W Âť)))Âź ZI\ML KW]V\MZXIZties and, secondly, that there is the potential for systemic or contagion risk across all rated counterparties in the most extreme scenarios,â€? 8WTTM\\ [IQL

William Pollett

“This accelerating trend leaves traditional reinsurers who lack a collateralised product ofNMZQVO NWZ \PMQZ KTQMV\[ I\ ZQ[S WN UQ[[QVO [QOVQĂ…KIV\ J][QVM[[ WXXWZ\]VQ\QM[ Âş He adds that a gap is emerging around the M`XMZ\Q[M KWUXIVQM[ PI^M QV \PQ[ IZMI ?PQTM large multinational insurers are already comNWZ\IJTM LMITQVO LQZMK\Ta _Q\P IT\MZVI\Q^M KIXQ\IT markets through products such as catastrophe JWVL[ 14?[ IVL KWTTI\MZITQ[ML ZMQV[]ZIVKM many of the smaller players are still uncomfortIJTM \ZILQVO _Q\P XZWL]K\[ IVL KW]V\MZXIZ\QM[ with which they are unfamiliar. š<PMa IZM WN\MV KWVKMZVML IJW]\ \PM KW]Vterparty’s long-term commitment to the space, an important consideration for smaller insurance companies who rely on reinsurance to enIJTM \PMU \W \ZILM NWZ_IZL NWTTW_QVO I [QOVQĂ…KIV\ KI\I[\ZWXPM M^MV\ Âş 8WTTM\\ [IQL

š8I[\ M`XMZQMVKM PI[ [PW_V \PI\ IT\MZVI\Q^M KIXQ\IT UIZSM\[ KIV LQ[IXXMIZ I[ Y]QKSTa I[ \PMa appear, often due to circumstances unrelated to underwriting performance, including inves\WZ ZMLMUX\QWV[ 1V ILLQ\QWV \PM JI[Q[ ZQ[S \PI\ index triggered instruments introduce is often ]VIKKMX\IJTM \W [UITTMZ J]aMZ[ Âş 0M [Ia[ \PI\ NWZ *T]M +IXQ\IT \PM \WX OTWJIT ZMQV[]ZIVKM J]aMZ[ IZM VW\ Q\[ XZQUIZa target. “Instead, we focus on trading with smaller insurers; typically regional companies QV \PM =; IVL W\PMZ LM^MTWXML ZMQV[]ZIVKM UIZSM\[ _PW _ZQ\M J][QVM[[ QV I TWKITQ[ML OMWgraphic area. š)[ \PM[M KWUXIVQM[ [MMS \W LQ^MZ[QNa \PMQZ ZMQV[]ZIVKM KZMLQ\ ZQ[S _Q\P QVLMUVQ\a JI[ML KWTTI\MZITQ[ML XZW\MK\QWV *T]M +IXQ\IT Q[ IJTM \W meet this new demand while allowing them to trade with a counterparty they have known and trusted for years.â€? *T]M +IXQ\IT [MMS[ \W LM^MTWX TWVO \MZU ZMlationships with these cedants, he says, resulting QV I XWZ\NWTQW \PI\ _QTT ZMVM_ I [QOVQĂ…KIV\ XWZ\QWV WN Q\[ J][QVM[[ MIKP aMIZ š)[ I [XMKQITQ[\ XZWXMZ\a KI\I[\ZWXPM ZMQV[]ZMZ 5WV\XMTQMZ Q[ KWUUQ\\ML \W \PM [XIKM and has a strong track record of paying claims XZWUX\Ta )[ XIZ\ WN \PM 5WV\XMTQMZ /ZW]X *T]M +IXQ\IT ]VTQSM \PM UIRWZQ\a WN KWTTI\MZITQ[ML UIZSM\[ Q[ [M\ ]X \W XZW^QLM I N]TT Y]W\QVO [MZ^QKM WV \ZILQ\QWVIT QVLMUVQ\a JI[ML ZMQVsurance placements. š1UXWZ\IV\Ta W]Z JZWSMZ[ IVL KTQMV\[ IT[W ]VLMZ[\IVL \PI\ ÂťVW\ ITT KWTTI\MZIT Q[ KZMI\ML MY]ITTaÂź IVL ZMKWOVQ[M \PM ^IT]M WN \PM KIXQtal against which we underwrite, such as Blue +IXQ\IT /TWJIT :MQV[]ZIVKM .]VLÂź[ XMZUIVMV\ KIXQ\IT JI[M _PQKP Q[ VW\ []JRMK\ \W QV^M[\WZ ZMdemption.â€? Q

"RITĂ?EXPANDSĂ?NETWORKĂ?WITHĂ?"ERMUDAĂ?OFlCE

B

ZQ\ /ZW]X PI[ [IQL Q\ Q[ TWWSQVO \W M`XIVL Q\[ LQ[\ZQJ]\QWV VM\_WZS Ja WXMVQVO I JZIVKP WNÅKM QV *MZU]LI <PM WNÅKM _QTT NWK][ on underwriting excess workers’ compensation ZMQV[]ZIVKM I[ _MTT I[ =; XZWXMZ\a KI\I[\ZWXPM ZMQV[]ZIVKM ZM\ZWKM[[QWV IVL 14?Ÿ[ KW^MZ[ To run the new venture, Brit has appointed Joe Bonanno, a specialist in excess workers’ compensation reinsurance and previously a senior

^QKM XZM[QLMV\ WN 5IZSMT *MZU]LI 0M _QTT JM PMIL WN \PM VM_ *MZU]LI WNĂ…KM _PQKP Q[ []JRMK\ \W Ă…VIT ZMO]TI\WZa IXXZW^IT NZWU \PM *MZU]LI 5WVM\IZa )]\PWZQ\a *5) IVL 4TWaLÂź[ 2WQVQVO *WVIVVW QV *MZU]LI _QTT JM 2]TQI 0MVLMZ[WV XZM^QW][Ta I ^QKM XZM[QLMV\ I\ 8IZ\VMZ:M _PW _QTT JM J]QTLQVO \PM J][QVM[[ QV \PM IZMI[ WN =; XZWXMZ\a KI\I[\ZWXPM ZMQV[]ZIVKM ZM\ZWKM[[QWV IVL 14?Âź[ KW^MZ[

8 | MONTE CARLO TODAY | DAY 1: Sunday September 8 2013

5I\\PM_ ?QT[WV +-7 WN *ZQ\ /TWJIT ;XMKQIT\a [IQL" š7XMVQVO I JZIVKP WNĂ…KM QV *MZU]LI _QTT MVPIVKM \PM LQ[\ZQJ]\QWV KIXIJQTQ\a WN \PM OZW]X Ja INNWZLQVO *ZQ\ JZWILMZ IKKM[[ \W JW\P KI[]IT\a IVL XZWXMZ\a \ZMI\a J][QVM[[ These are areas in which the group already has [QOVQĂ…KIV\ M`XMZ\Q[M IVL _PMZM XZWĂ…\IJQTQ\a PI[ JMMV [\ZWVO <PQ[ Q[ IVW\PMZ SMa [\MX QV LM^MTWXQVO *ZQ\Âź[ OTWJIT WNNMZQVO Âş Q

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SUNDAY

News

08.09.13

Industry well placed to handle cats T

PM QVL][\Za Q[ JM\\MZ XZMXIZML \W LMIT _Q\P TIZOM KI\I[\ZWXPM[ \PIV M^MZ JMNWZM I NIK\WZ _PQKP PI[ JMMV I[[Q[\ML Ja KWV^MZOMVKM KIXQ\IT IKKWZLQVO \W )TI[\IQZ ;XMIZM +WTM +-7 WN 24< :M š<PM IJQTQ\a WN \PM QVL][\Za \W ZM[XWVL \W KI\I[\ZWXPM TW[[M[ PI[ JMMV XZW^ML W^MZ \PM last few years,â€? he said. “Just look at Hurricane ;IVLa ¡ Q\ LQLVÂź\ UISM I []J[\IV\QIT LQNNMZMVKM \W ZI\QVO[ M`KMX\ QV XW[[QJTa [MK\WZ[ WN \PM UIrine market.â€? The additional capital, which continues \W ÆWWL \PM UIZSM\ PI[ ZMKMQ^ML UQ`ML ^QM_[ NZWU \PM QVL][\Za PW_M^MZ IVL I[ ;XMIZM +WTM M`XTIQV[ Q\ Q[ VW\ [WUM\PQVO \PI\ [PW]TL JM [QUXTa JZIVLML I[ OWWL WZ JIL š1N aW] [\MX JIKS NZWU Q\ 1 \PQVS \PI\ Q\Âź[ I good thing that there are a lot of people who are willing to take society’s risk transfer into the capital markets, however, there are those who will not view it positively.â€? He adds: “It’s a continuation of what has JMMV JMNWZM J]\ I\ IV IKKMTMZI\QVO XIKM -^MZa-

[WUM Q\Âź[ I LQUQV]\QWV WN XZWĂ…\IJQTQ\a [W Q\Âź[ PIZL \W [Ia _PM\PMZ \PQ[ Q[ [QUXTa I OWWL WZ JIL thing. “There is now a complicated interaction JM\_MMV LQNNMZMV\ XIZ\[ WN \PM KIXQ\IT UIZSM\[ with different appetites going through different vehicles, which are going into different portfolios of risk transference. š?PQT[\ 1ÂźU []ZM \PMZM _QTT JM KMZ\IQV MTMments to all of that, if there was a major loss or a series of major catastrophe losses, there might JM [WUM _PW UQOP\ JM []ZXZQ[ML WZ KPIVOM their strategies as a result.â€? Q

Alastair Speare-Cole WVM PI[ I LQNNMZMV\ ^QM_ IJW]\ \PM VM_ IJ]Vdance of alternative capital, and for some its welcome capacity, for some it’s a threat and for

“There is now a complicated interaction between different parts of the capital markets, with different appetites going through different vehicles, which are going into different portfolios of risk transference.�

Broker team from JLT Re cycle to Monte Carlo

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LIa ZQLM NZWU 4QUM ;\ZMM\ WV )]O][\ ZMIKPQVO +I[QVW ;Y]IZM WV ;MX\MUJMZ š?M PI^M KaKTML UQTM[ [W IV I^MZIOM WN ! UQTM[ XMZ LIa Âş [IQL *QOO[ š1\ _I[ I \W]OP ride in places with some very challenging hill KTQUJQVO ¡ \PM \W\IT ^MZ\QKIT MTM^I\QWV OIQV NWZ \PM RW]ZVMa Q[ SU _PQKP Q[ \PM MY]Q^ITMV\ WN ZMIKPQVO \PM [\ZI\W[XPMZM WZ KTQUJQVO \PM PMQOP\ WN 5\ -^MZM[\ WVM IVL I PITN \QUM[ 8T][ on day seven we tackled the famous 21 hairXQV JMVL[ WN )TXM ,Âź0]Mb _PQKP Q[ SU QV TMVO\P IVL IV I^MZIOM QVKTQVM WN ! XMZKMV\ Âş )TZMILa []ZXI[[QVO \PMQZ N]VLZIQ[QVO \IZOM\ XZQWZ \W [M\\QVO WNN \PM OZW]X PI[ JMMV W^MZ_PMTUML Ja \PM []XXWZ\ “It’s a great thing that they’re doing – and KMZ\IQVTa [I^M[ WV IQZ NIZM[ Âş [IQL )TI[\IQZ ;XMIZM +WTM +-7 WN 24< :M š?MÂźZM ^MZa OZI\MN]T NWZ everyone that has supported our team.â€? <PM \MIU [XMV\ JM\_MMV [M^MV IVL MQOP\ hours a day cycling and faced a variety of terrain. š1\ _I[ I JMI]\QN]T ZQLM IVL _MÂź^M PIL [WUM OZMI\ _MI\PMZ \WW [IQL *QOO[ š7V LIa \PZMM we ended with a fun race against the sunset to the hotel.â€? Q

DAY 1: Sunday September 8 2013 | MONTE CARLO TODAY | 9

SUNDAY

News

08.09.13

)NmUXĂ?OFĂ?CAPACITYĂ?ISĂ?AĂ?WORRYĂ?FORĂ?PRICING )

UMZ )PUML \PM KPQMN M`MK]\Q^M WNĂ…KMZ WN )TTQIVb :M [Ia[ \PM MNNMK\ \PM ZMKMV\ QVÆ]` WN IT\MZVI\Q^M KIXIKQ\a Q[ PI^QVO WV XZQKQVO _QTT JM I JQO Q[[]M IVL LQ[K][[QWV XWQV\ QV 5WV\M +IZTW \PQ[ aMIZ 0M [MM[ \PM Q[[]M _Q\P \PM XMZ[XMK\Q^M WN JW\P I J]aMZ IVL [MTTMZ WN reinsurance and he says the impact it is having on pricing worries him. š<PM KWV[\IV\ KIXQ\IT QVÆW_ NZWU QV^M[\WZ[ into the reinsurance sector has changed the TIVL[KIXM KWV[QLMZIJTa <PM IJ]VLIV\ I^IQTIJQTQ\a WN KIXIKQ\a QV \PM UIZSM\ \PZW]OP \PM[M ILLQ\QWVIT [W]ZKM[ QVKZMI[M[ KWUXM\Q\QWV JMtween investors and reinsurers and has a downwards impact on pricing,â€? he said. š)TTQIVb :M Q[ VW\ WVTa I XZW^QLMZ J]\ IT[W I TIZOM J]aMZ WN ZMQV[]ZIVKM )T\PW]OP \PM PQOP capacity and pricing competition might seem NI^W]ZIJTM NZWU I J]aQVO XMZ[XMK\Q^M Q\ JMIZ[ the danger that certain risks get covered at inILMY]I\M ZI\M[ *]\ Q\ Q[ QV M^MZaJWLaÂź[ QV\MZest that the overall insurance and reinsurance [a[\MU ZMUIQV[ [\IJTM IVL [][\IQVIJTM <PQ[ ZMY]QZM[ ZQ[S ILMY]I\M XZQKQVO¸JMaWVL \PM Lanamics of supply and demand.â€? )PUML I\ )TTQIVb [Ia[ Q\ Q[ LQNĂ…K]T\ \W XZMLQK\ _PI\ [WZ\ WN aMIZ Q\ _QTT JM [QVKM aW] WVTa VMML WVM JQO [\WZU PQ\\QVO I ^]TVMZIJTM IZMI NWZ TW[[M[ \W M[KITI\M Y]QKSTa 0M JMTQM^M[ \PM QVL][\Za _QTT ZM[XWVL _Q\P ÆM`QJQTQ\a IVL WXportunism, as it has following previous losses, J]\ _Q\P \PM KIXQ\IT [QUXTa MV\MZQVO \PM UIZSM\ in a different way. š1N \PMZM _MZM \W JM []J[\IV\QIT TW[[M[ _M would expect sidecar capacity to enter the IZMVI Âş PM [Ia[ š5WZM WXXWZ\]VQ[\QK QV^M[\WZ[ _W]TL [MMS \W JMVMĂ…\ NZWU KIXQ\IT [PWZ\IOM[ IVL MV\MZ \PM UIZSM\ ^MZa Y]QKSTa ][QVO [QLMcars as a vehicle. š5IVa ZMQV[]ZIVKM KWUXIVQM[ PI^M I [QLMcar on the shelf and are ready to offer their

“The Rendez-Vous sets the stage for the reinsurance renewals every year. Monte Carlo will absolutely remain relevant to the industry for the foreseeable future.�

Amer Ahmed capacity if the market turns. It is also pretty [\ZIQOP\NWZ_IZL \W QV^M[\ QV IV M[\IJTQ[PML N]VL \PM[M LIa[ IVL _Q\P TQ[\ML N]VL[ VW_ JMQVO WNNMZML Q\ Q[ ZMI[WVIJTM \W I[[]UM \PI\ \PM[M TQ[\ML N]VL[ _QTT JM IJTM \W Y]QKSTa KZMI\M I VM_ KTI[[ with attractive risk-return characteristics for an opportunistic investor. The presence of an es\IJTQ[PML 14; UIZSM\ _Q\P TWVOMZ \MZU QV^M[\WZ PWZQbWV[ XZWJIJTa LIUXMV[ \PM KaKTQKIT MNNMK\ of large events these days.â€? ;XMISQVO IPMIL WN \PM :MVLMb >W][ PM IT[W UIQV\IQV[ \PI\ \PM M^MV\ _QTT JM I[ J][a ^QJZIV\ IVL ZMTM^IV\ I[ M^MZ QV š.WZ UWZM \PIV aMIZ[ 5WV\M +IZTW PI[ JMMV \PM XTIKM NWZ LQ[K][[QWV[ JM\_MMV XTIaMZ[ QV W]Z QVL][\Za )T\PW]OP \PMZM IZM IT[W PQOPTa [QOVQĂ…KIV\ QVL][\Za M^MV\[ QV W\PMZ ZMOQWV[ \PM 5WV\M +IZTW ZMQV[]ZIVKM KWVNMZMVKM PI[ I\tendees from everywhere in the world,â€? he said.

The reason for that is geographical and \QUM ZMTI\ML <PM \QUQVO¸MIZTa ;MX\MUJMZ¸ Q[ QLMIT JMKI][M \PI\Âź[ _PMV LQ[K][[QWV[ NWZ \PM 2IV]IZa ZMVM_IT[ [\IZ\ _Q\P \PM Ă…Z[\ KWV^MZ[I\QWV[ JM\_MMV KTQMV\[ IVL ZMQV[]ZMZ[ š<PM 5WV\M +IZTW :MVLMb >W][ PI[ LM^MTWXML I JZIVL W^MZ \PM aMIZ[ <PQ[ JZIVL [\IVL[ NWZ XZWJIJTa \PM PQOPM[\ IKK]U]TI\QWV of industry players in one place, providing conLMV[ML ZMQV[]ZIVKM J][QVM[[ QV\MTTQOMVKM \WX TM^MT \PW]OP\ TMILMZ[PQX IVL Ă…Z[\ PIVL UIZSM\ VM_[ ITT QV WVM _MMS MIZTa QV ;MX\MUJMZ 8T][ there is the convenience of meeting, in a short time, within close reach, clients and reinsurers _PW IZM W\PMZ_Q[M [XZMIL IZW]VL \PM OTWJM š<PM :MVLMb >W][ [M\[ \PM [\IOM NWZ \PM ZMQV[]ZIVKM ZMVM_IT[ M^MZa aMIZ 5WV\M +IZTW _QTT IJ[WT]\MTa ZMUIQV ZMTM^IV\ \W \PM QVL][\Za NWZ \PM NWZM[MMIJTM N]\]ZM ÂşQ

%NDURANCEĂ?EXPANDSĂ?CAPABILITIESĂ?INĂ?!SIAĂ?0ACIlC

-

VL]ZIVKM ;XMKQIT\a 0WTLQVO[ PI[ M`XIVLML Q\[ ;QVOIXWZM JI[ML )[QI 8IKQÅK ZMQV[]ZIVKM J][QVM[[ ]VQ\ \W QVKT]LM I TWKIT OTWJIT KI\I[\ZWXPM ZMQV[]ZIVKM \MIU _Q\P I focus on the region’s markets. 8I\ZQKS )M[KPJIKPMZ _PW PMIL[ \PM KWUXIVaŸ[ )[QI 8IKQÅK ZMQV[]ZIVKM WXMZI\QWV[ _QTT

ZMXWZ\ \W -VL]ZIVKMÂź[ +-7 WN OTWJIT ZMQV[]Zance Jerome Faure. )\ \PM MVL WN -VL]ZIVKM [MVQWZ ^QKM XZM[QLMV\ IVL PMIL WN )[QI 8IKQĂ…K XZWXMZ\a KI\I[\ZWXPM ZMQV[]ZIVKM[ :MVM 4IUMZ _QTT \ZIV[NMZ \W ;QVOIXWZM 0M _QTT JM []XXWZ\ML Ja I TWKIT XZWXMZ\a

10 | MONTE CARLO TODAY | DAY 1: Sunday September 8 2013

catastrophe underwriting team, and report to ;\MXPMV AW]VO M`MK]\Q^M ^QKM XZM[QLMV\ KPQMN ]VLMZ_ZQ\QVO WNĂ…KMZ IVL PMIL WN OTWJIT KI\I[trophe reinsurance. Faure said of the expansion: “Bolstering our ]VLMZ_ZQ\QVO ZM[W]ZKM[ QV \PQ[ ZMOQWV ZMÆMK\[ W]Z LMMX KWUUQ\UMV\ \W \PM )[QI 8IKQĂ…K ZMOQWV Q

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QBE Europe to provide capacity to Cobalt 4

WVLWV PI[ \PM XW\MV\QIT \W JMKWUM \PM PMIZ\ WN XZQV\ \PI\ KW]TL JM ILWX\ML Ja \PM 4WVLWV UIZSM\ º PM [IQL \PM 1[TIUQK ÅVIVKQIT UIZSM\ IKKWZLQVO \W :QKPIZL Bishop added: “I would like to let you all know that whilst *Q[PWX KPQMN M`MK]\Q^M WN +WJIT\ =VLMZ_ZQ\QVO IV VW\ Y]Q\M KWUXTM\ML NWZ \PQ[ M^MV\ _M IZM [PWZ\Ta _M PWXM QV[]ZMZ [XMKQÅKITTa NWZUML \W XZW^QLM ;PIZQIP KWUXTQIV\ \W [MK]ZM \PM KIXIKQ\a WN IVW\PMZ UIRWZ OTWJIT QV[]ZMZ ?M QV[]ZIVKM [XMISQVO I\ \PM TI]VKP QV 4WVLWV IZM K]ZZMV\Ta QV IL^IVKML LQ[K][[QWV[ _Q\P 9*- -]ZWXM \W ;PIZQIP XZQVKQXTM[ XZWPQJQ\ \PM ][M WN \ZILQ\QWVIT QV[]ZXZW^QLM ][ _Q\P ILLQ\QWVIT KIXIKQ\a NWZ JW\P W]Z XZWXMZ\a IVL IVKM I[ Q\ ]\QTQ[M[ I[XMK\[ WN ][]Za OIUJTQVO IVL ]VKMZ\IQV\a KWV[\Z]K\QWV XZWXW[Q\QWV[ K]ZZMV\Ta XZW^QLML WVTa Ja @4 1V)[ UIRWZ 1[TIUQK QV[\Q\]\QWV[ KWZXWZI\QWV[ IVL QV^M[\WZ[ PI^M []ZIVKM I[ _MTT I[ QV ILLQ\QWV ]VQY]MTa WNNMZQVO ][ []XXWZ\ [W]OP\ \W M`XIVL QV\MZVI\QWVITTa \PMa PI^M JMMV NWZKML \W ][M for a new casualty facility. Naturally we will let everyone know \ZILQ\QWVIT QV[]ZIVKM XZWL]K\[ W]\ WN VMKM[[Q\a J]\ PI^M JMMV when our discussions are complete. [MMSQVO I ;PIZQIP KWUXTQIV\ IT\MZVI\Q^M ¹<PQ[ VM_ KIXIKQ\a _QTT JZQVO W]Z XZWXMZ\a NIKQTQ\a \W )KKM[[ \W \PM VMKM[[IZa QV[]ZIVKM KIXIKQ\a _Q\P \PM ZM[\IVL I\ UQTTQWV IVL W]Z +WV[\Z]K\QWV NIKQTQ\a \W Y]QZML [MK]ZQ\a PI[ JMMV I [QOVQÅKIV\ P]ZLTM PW_M^MZ [WUMUQTTQWV ?PQT[\ WN KW]Z[M \PM[M IZM PMILTQVM ÅO]ZM[ \PM[M Richard Bishop, \PQVO +WJIT\ QV\MVL[ \W W^MZKWUM ZMXZM[MV\ I [QOVQÅKIV\ VMMLTM UW^MZ NWZ \PM 1[TIUQK QV[]ZCobalt Underwriting *Q[PWX IT[W [IQL +WJIT\ Q[ QV IL^IVKML LQ[K][[QWV[ _Q\P ance sector.” two major underwriters to provide capacity alongside current capacity pro0M ILLML" ¹1 KIV IT[W [\I\M \PI\ _Q\PQV \PM VM`\ NM_ _MMS[ _M [PW]TL JM ^QLMZ @4 IJTM \W IVVW]VKM \PM []XXWZ\ WN I \PQZL UIZSM\ \W W]Z XIVMT ?PQT[\ 1 KIVVW\ The underwriters will provide capacity for construction, property and ca- VIUM VIUM[ \PQ[ UIZSM\ _QTT VW\ WVTa [QOVQÅKIV\Ta QVKZMI[M W]Z M`Q[\QVO NIKQTQsualty products and Bishop said the aim was to expand the range of classes \QM[ J]\ _QTT IT[W ILL UIZQVM KIZOW IVL WV[PWZM IVL WNN[PWZM MVMZOa KIXIKQ\a ]VLMZ_ZQ\\MV \W QVKT]LM \PM TQSM[ WN UIZQVM KIZOW IVL IKKM[[ 4TWaL¼[ KIXIKQ\a to the mix.” Q +WJIT\ _QTT ]VLMZ_ZQ\M UMLQ]U \W TIZOM KWUUMZKQIT _PWTM[ITM ZQ[S[ \PZW]OP JZWSMZ[ IVL VW\ LQZMK\ XMZ[WVIT WZ KWUUMZKQIT TQVM[ J][QVM[[ 0M [IQL \PI\ [QVKM 1[TIUQK [KPWTIZ[ PIL JMMV MVKW]ZIOQVO MNNWZ\[ \W ÅVL I [WT]\QWV \W \PM TIKS WN KIXIKQ\a NWZ \PM XZW^Q[QWV WN ;PIZQIP KWUXTIQV\ insurance. ¹7VM WN W]Z NW]VLQVO XZQVKQXTM[ IVL WVM WN W]Z ÅZ[\ UIRWZ IKPQM^MUMV\[ _I[ \PI\ +WJIT\ [PW]TL JM ZM[XWV[QJTM NWZ \PM KZMI\QWV WN VM_ [\IVLIZL[ NWZ \PM ;PIZQIP KWUXTQIV\ QV[]ZIVKM IVL ZMQV[]ZIVKM QVL][\Za Ja LM^MTWXQVO I JT]M-

Asbestos to hit reinsurers

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]ZWXMIV ZMQV[]ZMZ[ KW]TL JIZM \PM JZ]V\ WN PQSM[ QV I[JM[\W[ KW[\[ IVL ZM[MZ^M[ I[ I[JM[\W[ TW[[M[ [WIZ Ja JQTTQWV NWZ =; QV[]ZMZ[ IKKWZLQVO \W I ZMXWZ\ Ja :]`TMa:M[MIZKP XIZ\ WN Z]V WNN [XMKQITQ[\ :]`TMa >MV\]ZM[ 1V Q\[ ÅN\P ZM[MIZKP X]JTQKI\QWV :]`TMa:M[MIZKP PI[ QLMV\QÅML \PM [QOVQNQKIV\ QVKZMI[M Ja JQTTQWV QV \PM M`XMK\ML ]T\QUI\M KW[\ WN LMITQVO _Q\P I[JM[\W[ KTIQU[ I[ I [W]ZKM WN OZW_QVO ]VKMZ\IQV\a NWZ -]ZWXMIV ZM QV[]ZMZ[ <PM ZM[MIZKP KWVKT]LML \PI\ _PQTM \PM I^MZIOM =; I[JM[\W[ []Z^Q^IT ZI\QW WN -]ZWXMIV ZM QV[]ZMZ[ ZMUIQV[ PMIT\Pa IVL KWV[Q[\MV\ _Q\P XZM^QW][ aMIZ[ \PM KPITTMVOM[ NIKQVO =; QV[]ZMZ[ KW]TL JMKWUM I XZWJTMU NWZ \PMQZ -]ZWXMIV counterparts, particularly reinsurers. <PQ[ ]VKMZ\IQV\a KWUM[ IOIQV[\ I JIKSOZW]VL WN UW]V\QVO XZM[[]ZM NZWU QV^M[\WZ[ IVL ZMO]TI\WZ[ NWZ QV[]ZMZ[ \W LMTQ^MZ M^MZ OZMI\MZ KIXQ\IT MNÅKQMVKa <PM ZM[MIZKP KWVKT]LM[ \PI\ \PM LMTIa QV ;WT^MVKa 11¼[ QV\ZWL]K\QWV ]V\QT XZW^QLM[ IV WXXWZ\]VQ\a NWZ ZM QV[]ZMZ[ \W NWK][ WV LMITQVO _Q\P XZWJTMU[ []KP I[ =; I[JM[\W[ VW_ \PMZMJa ITTW_QVO ZM[MZ^M[ \W JM ZMTMI[ML IVL KIXQ\IT ZMITTWKI\ML \W UWZM XZWÅ\IJTM ]VLMZ_ZQ\QVO IK\Q^Q\QM[ ¹?PQTM Q\ Q[ PMIZ\MVQVO \W [MM \PI\ \PM I[JM[\W[ ZM[MZ^M[ WN -]ZWXMIV QV[]ZMZ[ KWV\QV]M \W JM ZWJ][\ \PM XZM[[]ZM NZWU I ZQ[QVO I[JM[\W[ ]T\QUI\M IVL \PM KW[\[ I[[WKQI\ML _Q\P PWTLQVO WV \W \PM[M TQIJQTQ\QM[ IZM QVKZMI[QVOTa ]VI\\ZIK\Q^M \W QV^M[\WZ[ º [IQL 2WPV ?QV\MZ +-7 WN :]`TMa >MV\]ZM[ Q

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10 years doing work that matters

MATRIX

insurance & reinsurance brokers SA

DAY 1: Sunday September 8 2013 | MONTE CARLO TODAY | 13

SUNDAY

News

08.09.13

Reinsurers must work with governments /

TWJIT ZMQV[]ZMZ[ U][\ MVLMI^W]Z \W _WZS more closely with governments and OW^MZVUMV\ JWLQM[ \W XWWT M`XMZ\Q[M IVL ร VL _Ia[ WN JM\\MZ PIVLTQVO VI\]ZIT LQ[I[\MZ[ IVL catastrophes. <PI\ Q[ \PM ^QM_ WN )[PWS 3]UIZ :Wa KPIQZUIV IVL UIVIOQVO LQZMK\WZ WN /1+ :M the Indian reinsurer that is rapidly spreading its ZMIKP IKZW[[ )[QI IVL \PM 5QLLTM -I[\ ยน:MQV[]ZMZ[ [PW]TL _WZS QV ^MZa KTW[M I[[WKQI\QWV _Q\P OW^MZVUMV\[ \W KZMI\M JM\\MZ [WT]\QWV[ NWZ \PM XZWJTMU WN VI\]ZIT KI\I[\ZWXPM[ which are increasing in regularity and ferocity,โ he said.

โ Usually, the relief packages provided by the government and other authorities in the wake of such tragedies do not encourage people to act proactively and prepare for such unexpected events.โ ยน<WLIa M^MV QV 1VLQI PIZLTa XMZKMV\ WN \PM LQ[I[\MZ KW[\[ IZM QV[]ZML ?M PI^M I XZIK\QKM WN XW[\ LQ[I[\MZ ZMTQMN IVL ZMPIJQTQ\I-

tion efforts and this takes up a major chunk of the government resources allocated to the management of natural catastrophes. ThereNWZM QV[]ZIVKM KIV JM IV M`KMTTMV\ ZQ[S \ZIV[fer vehicle, especially in the case of natural catastrophes.โ 0M ILL[ \PI\ Q\ Q[ VW\ WVTa IJW]\ QV[]ZQVO \PM[M ZQ[S[ /W^MZVUMV\[ KIV IT[W PMTX MV[]ZM the development of an infrastructure that reduces overall risks and which in turn can reL]KM LIUIOM[ []J[\IV\QITTa โ This will also help us in the insurance QVL][\Za \W XZW^QLM I ZQ[S JI[ML XZQKQVO \PI\ _W]TL JM UWZM INNWZLIJTM \W W]Z K][\WUMZ[ IVL thus also achieve the target of increasing insurIVKM XMVM\ZI\QWV ยบ [IQL :Wa ยน+WTTIJWZI\QWV Q[ \PM SMa _WZL PMZM =[]ITTa \PM ZMTQMN XIKSIOM[ XZW^QLML Ja \PM OW^ernment and other authorities in the wake of such tragedies do not encourage people to act proactively and prepare for such unexpected events. In fact such arrangements lull them into complacency and deter them from adoptQVO ZQ[S KWV\ZWT UMI[]ZM[ IVL J]aQVO ILMY]I\M risk covers. โ Hence, the insurance industry and the govMZVUMV\[ KIV KWTTIJWZI\M \W KZMI\M I_IZMVM[[ IJW]\ []KP M^MV\[ [\MX[ \W JM \ISMV \W UQ\QOI\M

losses if and when such an event occurs and promote a culture of insurance to help spread \PM ZQ[S <PQ[ _W]TL JM \PM JM[\ [\ZI\MOa \W [\Ia ahead of catastrophic events if and when they WKK]Z ยบ [IQL :Wa Q

Ashok Kumar Roy

Bermuda set to become ILS global leader

-

`XMZ\[ M[\QUI\M \PM OTWJIT 1V[]ZIVKM 4QVSML ;MK]ZQ\QM[ 14; UIZSM\ KW]TL LW]JTM WZ M^MV \ZQXTM QV \PM VM`\ ร ^M \W \MV aMIZ[ IVL \PI\ Bermuda is set to take pole position in the market QV \PM M[\IJTQ[PUMV\ IVL TQ[\QVO WN \PM[M ^MPQKTM[ <PI\ Q[ \PM ^QM_ WN 14; *MZU]LI I \MIU WN OTWJIT XTIaMZ[ _PW IZM UI`QUQ[QVO \PM XW\MV\QIT of the alternative reinsurance, convergence and insurance-linked securitisation marketplace. It says a large part of this lucrative market is comQVO \W \PM Q[TIVL T]ZML Ja \PM SVW_TMLOM \PI\ Q\ Q[ ITZMILa IV M[\IJTQ[PML ZMQV[]ZIVKM UIZSM\ PI[ great service providers and the right legislation QV XTIKM \W UISM [M\\QVO ]X 14; Y]QKS IVL MI[a Investors, cedents and others involved see great growth opportunity which is resulting in QVKZMI[ML TM^MT[ WN IK\Q^Q\a QV 14; IVL PI[ I positive knockon effect on the economy of Bermuda, the organisation said. Bermudaโ s market has already grown from

I [\IVLQVO [\IZ\ QV ! _PMV TMOQ[TI\QWV _I[ JZW]OP\ QV \W UISM Q\ MI[QMZ \W [M\ ]X [XMKQIT X]ZXW[M ^MPQKTM[ _PQKP IZM ][ML \W [M\ ]X 14; 1VL][\Za 4W[[ ?IZZIV\QM[ IVL [QLM KIZ[ <PM *MZU]LI ;\WKS -`KPIVOM VW_ PI[ I ZMKWZL

JQTTQWV WN 14; TQ[\ML ^MPQKTM[ I ร O]ZM _PQKP PI[ R]UXML NZWU R][\ UQTTQWV QV ยน5IVa QV \PM QVL][\Za JMTQM^M \PI\ \PM \QUQVO Q[ VW_ NWZ 14; IVL \PI\ [WUM\PQVO WN I \QXXQVO XWQV\ PI[ JMMV ZMIKPML 1\ Q[ _Q\P \PQ[ JIKSLZWX \PI\ \PM 14; *MZU]LI +WV^MZOMVKM 6M\_WZSQVO -^MV\ _I[ JWZV ยบ [IQL 2I[WV +IZVM PMIL WN 14; I\ 385/ QV *MZU]LI IVL IV 14; *MZU]LI +WV^MZOMVKM WZOIVQ[QVO KWUUQ\\MM UMUJMZ ยน)XXZW`QUI\MTa XMZKMV\ WN 14; UIZSM\ KI\ JWVL Q[[]IVKM[ QV _MZM QV *MZU]LI UISing this inaugural event a fantastic opportunity for key players in the industry to gather and for VM_ QV^M[\WZ[ \W TMIZV UWZM IJW]\ \PM WXXWZ\]VQ\QM[ I^IQTIJTM \W \PMU IVL \W OM\ QV^WT^ML ยบ

14 | MONTE CARLO TODAY | DAY 1: Sunday September 8 2013

14; *MZU]LI ITWVO _Q\P Q\[ UMUJMZ[ MVgaged in capital markets and insurance, are PW[\QVO +WV^MZOMVKM \ISQVO XTIKM QV 0IUQT\WV *MZU]LI WV 6W^MUJMZ IVL <PQ[ Q[ IV QV^Q\I\QWV WVTa M^MV\ JZQVOQVO \Wgether Bermudaโ s capital market leaders and insurance innovators. ยน*MZU]LI Q[ _PMZM \PM 14; QV^M[\WZ[ IVL [XWV[WZ[ IZM IVL VW_ _M IZM [MMQVO J][QVM[[M[ moving from other jurisdictions to Bermuda. +WV^MZOMVKM _QTT JZQVO \PM[M OZW]X[ together in a way no other event can,โ said *ZIL )LLMZTMa QV[]ZIVKM XIZ\VMZ I\ TI_ ร ZU )XXTMJa IVL 14; *MZU]LI +WV^MZOMVKM WZOIVQ[QVO KWUUQ\\MM UMUJMZ ยน+WV^MZOMVKM IT[W _QTT JZQVO QV[QOP\ on why Bermuda has the longevity and infra[\Z]K\]ZM VMMLML Q[ I VI\]ZIT ร \ NWZ 14; IVL PI[ XW\MV\QIT \W J]QTL I [VW_JITT MNNMK\ _M IZM [MMing in the market.โ Q

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No.1 asset manager in Europe (1)

Earning your confidence through long-term partnership.

Amundi Insurance Solutions Amundi is a reference point and long-standing asset manager for insurance clients, having served the industry for over 25 years. Managing over â‚Ź300 bn of assets for insurance clients, Amundi ranks among the leading asset managers for the insurance industry, with more than 150 external clients in 20 countries(2).

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(1) Total assets under management - Source IPE “Top 400 asset managers active in the European marketplaceâ€? published in June 2013, data as at 31 December 2012. Interviews of asset management companies on their assets as at endDecember 2012 (open-end funds, dedicated funds, mandates). (2) Amundi Group data as at 31 March 2013. This material is solely for the attention of “Institutionalâ€? investors only, as defined as the case may be in each local regulations. It is not for any person, qualified investor or not, from any country or jurisdiction which laws or regulations would prohibit such material, nor for “US Personsâ€?. This material does not constitute an offer to buy or a solicitation to sell, nor does it constitute public advertising for any product, financial service or investment advice. Amundi S.A. French joint stock company with a registered capital of â‚Ź596 262 615 - Portfolio Manager regulated by AMF under number GP 04000036 - Registered office: 90, boulevard Pasteur - 75015 Paris - FRANCE - 437 574 452 RCS Paris - www.amundi.com - Photo credits: Getty images. |

Director, Insurance Supervision, BMA Reporting to the Managing Director of Supervision, the Director will direct and manage a 60 strong team of individuals in meeting the department’s goals and objectives by way of effective plans and schedules that support the Strategic Plan and overall objectives of the Bermuda Monetary Authority. ROLE RESPONSIBILITIES TO INCLUDE: ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡

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7KH UHPXQHUDWLRQ IRU WKLV SRVLWLRQ LV FRPSHWLWLYH DQG ZLOO GHSHQG RQ TXDOLÂżFDWLRQV DQG H[SHULHQFH 7KH FORVLQJ GDWH IRU DSSOLFDWLRQV LV WK 6HSWHPEHU 2013. $OO DSSOLFDQWV ZLOO EH DFNQRZOHGJHG XSRQ UHFHLSW 2QFH WKH FORVLQJ GDWH KDV SDVVHG DQG DOO DSSOLFDWLRQV KDYH EHHQ UHYLHZHG DSSOLFDQWV ZLOO EH FRQWDFWHG DJDLQ Please apply by letter or e-mail with an accompanying CV to: &DUROLQH :ULJKW +DQVRQ *UHHQ 110 3DUN 6WUHHW /RQGRQ W1K 6NX 7HO +44 (0) 20 7255 7940 )D[ +44 (0) 20 7355 1436 (PDLO FZULJKW#KDQVRQJUHHQ FR XN :HEVLWH ZZZ KDQVRQJUHHQ FR XN

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08.09.13

AHJ chair ponders 40 years of change T

he reinsurance industry has changed for \PM JM\\MZ QV ZMKMV\ aMIZ[ QV I _Ia \PI\ should smooth out the sharp peaks and troughs in pricing and – yet fundamentally remains an industry founded on uncertainty. <PI\ Q[ PW_ I ZMÆMK\Q^M 0]OP 8ZQKM \PM chairman of independent privately-owned JZWSMZ )T_MV 0W]OP 2WPV[WV LM[KZQJM[ \PM industry he has spent a career working in. His KWUXIVa KMTMJZI\M[ aMIZ[ QV J][QVM[[ \PQ[ aMIZ IVL PM [Ia[ WVM WN \PM ZMI[WV[ \PM ÅZU PI[ MVL]ZML NWZ [W TWVO Q[ JMKI][M WN Q\[ IJQTQ\a to change with the times. The most fundamental changes have come around the use of risk models and the level of IVITa[Q[ ][ML Ja ITT KWUXIVQM[ VW_ · XZIK\QKM[ \PI\ LQL VW\ M`Q[\ aMIZ[ IOW \W \PM LM\ZQUMV\ of the industry. ¹<PM[M \PQVO[ LQL VW\ M`Q[\ JIKS \PMV IVL \PM QVL][\Za [WUM\QUM[ []NNMZML I[ I ZM[]T\ º 8ZQKM said. “It is a much more professional market now IVL _M PI^M PIL \W ILIX\ IVL KPIVOM _Q\P Q\ ?M have invested heavily in our own analytics and software over the years to put us on a par with the _Ia J][QVM[[ Q[ VW_ LWVM QV \PQ[ QVL][\Za º 0M JMTQM^M[ IVW\PMZ KWV[MY]MVKM WN \PQ[ KI][ML Ja I _QLMZ ][M WN ZQ[S UWLMT[ IVL OZMI\MZ ZMO]TI\WZa W^MZ[QOP\ PI[ JMMV I [UWW\PMZ cycle in the market with companies less willing IVL TM[[ IJTM \W K]\ ZI\M[ \W KPI[M UIZSM\ [PIZM ¹<PQVO[ IZM [UWW\PMZ J]\ QV \PQ[ J][QVM[[ you never know what is around the corner,” he [IQL ¹?PMV Q\ KWUM[ \W UIZSM\ PIVOQVO M^MV\[ \PMa IZM VW\WZQW][Ta LQNÅK]T\ \W XZMLQK\ º 0M JMTQM^M[ \PI\ I[ I XZQ^I\MTa W_VML KWUXIVa )T_MV 0W]OP 2WPV[WV PI[ JMMV JM\\MZ IJTM \W ILIX\ \W \PM[M KPIVOM[ 1\ PI[ JMMV IJTM \W UISM QUXWZ\IV\ [\ZI\MOQK LMKQ[QWV[ Y]QKSTa _PQTM ZMUIQVQVO NWK][ML WV Q\[ SMa WJRMK\Q^M[ and values.

UQ[[QWV JI[ML QVL][\Za IVL W]Z ZM^MV]M[ PI^M risen and fallen over the years with the pricing trends in the wider market. But the lack of external shareholders makes it easy to handle that and take a very long-term view.” 0M ILL[ \PI\ I TIKS WN J]ZMI]KZIKa IZW]VL \PM LMKQ[QWV UISQVO XZWKM[[ QV \PM JZWSMZ PI[ IT[W ITTW_ML Q\ \W IK\ NI[\ IVL MNÅKQMV\Ta _PMV KPIVOM PI[ JMMV VMMLML ¹<PI\ PI[ JMMV I LMÅVQ\M IL^IV\IOM W^MZ \PM aMIZ[ º PM [IQL

“We are in a commission based industry and our revenues have risen and fallen over the years with the pricing trends in the wider market. But the lack of external shareholders makes it easy to handle that and take a very long-term view.”

Hugh Price, Alwen Hough Johnson ¹?PQTM \PM ZMQV[]ZIVKM QVL][\Za PI[ changed dramatically, we remain very client WZQMV\I\ML · I Y]ITQ\a \PI\ OWM[ JIKS \W W]Z NW]VLMZ[ º 8ZQKM [IQL ¹7]Z [PIZMPWTLMZ[ IZM IT[W W]Z [\INN IVL \PI\ PI[ JMMV ^MZa PMTXN]T through challenging times and times of change. ¹?M PI^M VM^MZ JMMV QVKTQVML \W KPI[M ]VXZWÅ\IJTM J][QVM[[ I[ I ZM[]T\ ?M IZM QV I KWU-

1V \MZU[ WN \PM 5WV\M +IZTW :MVLMb >W][ 8ZQKM [Ia[ \PM JQO \ITSQVO XWQV\ _QTT JM \PM UIOnitude of the growth of the collateralised market in recent years. ¹1\[ [KITM PI[ JMMV I []ZXZQ[M \W [WUM XMWXTM º PM [IQL ¹<PMZM _QTT JM I TW\ WN LQ[K][[QWV IZW]VL _PI\ J]aMZ[ [PW]TL JM LWQVO IVL \PM way this capacity is slowly working its way into the primary market. ¹4WVO \MZU \PI\ LaVIUQK LWM[ KPIVOM \PM UISM\ *]\ I[ I JZWSMZ aW] R][\ PI^M \W ILR][\ and take the capacity wherever it is and in _PI\M^MZ NWZU _PQTM [QUXTa LWQVO _PI\ Q[ JM[\ for the client.” )T_MV 0W]OP 2WPV[WV Q[ XTIVVQVO I [\INN XIZ\a \W KMTMJZI\M Q\[ aMIZ[ QV J][QVM[[ QV TI\M ;MX\MUJMZ Q

Chubb to offer cyber security at Lloyd’s

+

P]JJ Q[ [M\ \W WNNMZ KaJMZ [MK]ZQ\a QV[]ZIVKM \PZW]OP Q\[ 4TWaL¼[ [aVLQKI\M +P]JJ <PM XZWL]K\ _QTT JM JI[ML WV \PM KWUXIVa¼[ =; WNNMZQVO +P]JJ¼[ KaJMZ XZWL]K\ _QTT KWUJQVM \PQZL XIZ\a IVL ÅZ[\ XIZ\a KW^MZIOM WV I _WZTL_QLM JI[Q[ +P]JJ Q[ PWXQVO \W \ISM IL^IV\IOM WN ZQ[QVO LMUIVL NWZ KaJMZ [MK]ZQ\a QV[]ZIVKM _PQKP PI[

OZW_V aMIZ WV aMIZ QV \PM =; 4MOIT ZMY]QZMUMV\[ PI^M JMMV \PM UIRWZ LZQ^MZ \PMZM J]\ QVKZMI[QVO ZMO]TI\WZa IVL TMOIT ZMY]QZMUMV\[ QV -]ZWXM IZM QVKZMI[QVO LMUIVL[ NWZ IKKW]V\IJQTQ\a [KZ]\QVa IVL ZM[XWV[QJQTQ\a NWZ XMZ[WVIT IVL KWVÅLMV\QIT LI\I +WUUMV\QVO WV \PM ILLQ\QWV WN \PM KaJMZ WNNMZQVO 3M^QV ,WKPMZ\a +P]JJ )K\Q^M

16 | MONTE CARLO TODAY | DAY 1: Sunday September 8 2013

=VLMZ_ZQ\MZ [IQL" ¹1V\ZWL]KQVO I KaJMZ [MK]ZQ\a XZWL]K\ Q[ IV QUXWZ\IV\ [\IOM QV \PM ;aVLQKI\M¼[ LM^MTWXUMV\ ?Q\P \PQ[ TI\M[\ ILLQ\QWV to our product range we are drawing on the exXMZ\Q[M +P]JJ PI[ LM^MTWXML QV \PQ[ [XPMZM IVL as demand for the product grows in the coming aMIZ[ +P]JJ _QTT JM _MTT XW[Q\QWVML \W UMM\ \PM VMML[ WN KTQMV\[ IVL JZWSMZ[ ITQSM º Q

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SUNDAY

Interview: Arndt Gossmann, DARAG

08.09.13

Legacy out—investors in !SĂ?MOREĂ?INSURERSĂ?TRANSFERĂ?LEGACYĂ?BUSINESSĂ?TOĂ?SPECIALISEDĂ?INSURERSĂ?ANDĂ?lNANCIALĂ? investors look to run-off as a new investment, Arndt Gossmann, CEO of DARAG explains why the sector is booming. DARAG raised â‚Ź60 million earlier in the year. Why is this? ;QVKM ! _M PI^M KWUXTM\ML \ZIV[IK\QWV[ I[[]UQVO Ă‚ UQTTQWV WN QVIK\Q^M TQIJQTQ\QM[ which happened faster and was more than we QVQ\QITTa M`XMK\ML )\ \PM [IUM \QUM _M JMOIV this year with a solid pipeline of potential transIK\QWV[¸\PMZMNWZM _M VMMLML \W JZQVO NWZ_IZL the increase of capital that we had originally [KPML]TML NWZ .WZ W]Z KTQMV\[¸QV[]ZMZ[ \PI\ TQUJMZ ]X \PMQZ TQIJQTQ\a [\Z]K\]ZM \ZIV[NMZZQVO TMOIKa¸ reputation is as important as the terms of the \ZIV[IK\QWV ?M PIVLTM \PQ[ KWVKMZV I[ _M WNNMZ ZMTQMN QV\W I [WTQL JITIVKM [PMM\ WN I N]TTa ZMO]TI\ML IVL N]TTa TQKMV[ML QV[]ZMZ QV /MZUIVa 7V I ^WT]V\IZa JI[Q[ _M KWUUQ\ \W I [WT^MVKa TM^MT WN ! XMZKMV\ 7]Z KTQMV\[ [PW]TL IVL KIV M`pect that we have the capital to hand whenever we conclude a transaction.

“Whenever the risk premium of a run-off transaction is a fair remuneration for the release of capital, it makes perfect sense to externalise the legacy.�

Has the money been used yet? ?M PI^M [QOVML \PZMM [UITTMZ \ZIV[IK\QWV[ [W NIZ and we expect three more to come this year. In \W\IT _M PI^M \PM IUJQ\QW][ \IZOM\ \W QVKZMI[M W]Z TQIJQTQ\QM[ ]VLMZ UIVIOMUMV\ Ja Ă‚ UQTTQWV _PQKP Q[ I TW\ J]\ VW\ MVW]OP \W Âť][MÂź I \W\IT KIXQ\IT JI[M WN UWZM \PIV Ă‚ UQTTQWV ;QVKM ,):)/ IVVW]VKML \PM KIXQ\IT QVKZMI[M \_W KWUXM\Q\WZ[ PI^M NWTTW_ML" +I\ITQVI IVL : 9 )ZM \PMa WVTa NWTTW_QVO aW]Z M`IUple or is run-off now an attractive investment proposition? The capital measures happened within two months and I expected others to follow. The seY]MVKM Q[ KWQVKQLMV\IT \PM \QUQVO Q[ VW\ .WZ UM it is no surprise that most run-off consolidators _Q\VM[[ I [QOVQĂ…KIV\ [PQN\ QV LMUIVL NWZ Ă…VITQ\a ,WVÂź\ NWZOM\ \PM KWV\QVMV\IT -]ZWXMIV TMOIKa volume is immense and the interest from insurMZ[ Q[ VW\ I[ LQ[KZMM\ I[ Q\ _I[ JMNWZM

Arndt Gossmann

WN Z]V WNN UIa JM PQOP J]\ Q\ Q[ ^MZa XZMLQK\IJTM The most appealing attraction, however, is the correlation of an investment in non-live run-off _Q\P IVa W\PMZ I[[M\ KTI[[M[" bMZW 0MVKM Z]V off investments are outperforming from the moment they are at market interest. <PM JMVMĂ…\ NWZ QV[]ZMZ[ Q[ I ZMTMI[M WN KWUplexity and a release of capital. Independent NZWU \PM TQ^M LI\M WN ;WT^MVKa 11 \PMZM Q[ VW IZgument that can justify allocated capital to closed J][QVM[[ QV[\MIL WN ][QVO Q\ NWZ IK\Q^M J][QVM[[ WZ ZM\]ZVQVO Q\ \W \PM [PIZMPWTLMZ[ ;W _PMVM^MZ the risk premium of a run-off transaction is a fair remuneration for the release of capital, it makes perfect sense to externalise the legacy.

Why is run-off attractive for investors ANDĂ?BENElCIALĂ?FORĂ?INSURERS Ă?

Have you seen an increase in companies wanting to transfer their inactive business?

)V QV^M[\UMV\ QV MY]Q\a \PI\ JIKS[ TMOIKa J][QVM[[ WNNMZ[ I [\IJTM IVL TWVO \MZU ZM\]ZV XZWĂ…TM 5IZOQV[ IZM ZMTMI[ML W^MZ \QUM IVL \PM ^WTI\QTQ\a

?M [MM I [\ZWVO TM^MT WN QV\MZM[\ IKZW[[ -]ZWXM The dedicated run-off units in larger and mid[QbML OZW]X[ UWVQ\WZ IVL UIVIOM LMIL TQIJQTQ\QM[

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IVL IZM [\I\M WN \PM IZ\# \PM Ă…VLQVO[ NZWU \PM[M OZW]X[ IZM N]Z\PMZ NWZ\QĂ…ML Ja \PM +.7 1\ Q[ KTMIZ \PI\ \PM LMLQKI\ML KIXQ\IT MNĂ…KQMVKa \MIU[ _PW[M UQ[[QWV Q\ Q[ \W Ă…VL IVL [WT^M IVa QVIXXZWXZQI\M use of capital, have started their mission.

Is this being driven by Solvency II? <PM QV[]ZIVKM QVL][\Za Q[ VW\ LZQ^MV Ja ;WT^MVKa 11 ;WT^MVKa 11 Q[ I ZMO]TI\WZa NZIUM_WZS If a framework would drive an industry the industry is dead. It is however fair to say that ;WT^MVKa 11 [\QU]TI\M[ \PM QVL][\Za¸IVL \PM \ZIV[NMZ WN Z]V WNN Q[ WVTa WVM WN UIVa MNĂ…KQMV\ strategies. ) []Z^Ma Ja \PM 1V[\Q\]\M WN 1V[]ZIVKM -KWVWUQK[ I\ \PM =VQ^MZ[Q\a WN ;\ /ITTMV KWVKT]LM[ \PI\ W^MZITT ;_Q[[ QV[]ZMZ[ IZM IPMIL QV \PM management of run-off portfolios compared \W QV[]ZMZ[ QV -= KW]V\ZQM[ <PM M`XTIVI\QWV Q[ [QUXTM" 1V ;_Q\bMZTIVL \PM MY]Q^ITMV\ WN ;WT^MVKa 11 \PM ;_Q[[ ;WT^MVKa <M[\ Q[ ITZMILa implemented. Q

DAY 1: Sunday September 8 2013 | MONTE CARLO TODAY | 17

SUNDAY

0ROlLE Ă?')#Ă?2E

08.09.13

GIC Re: spreading its wings beyond India As his company spreads it wings and expands beyond its roots in India, Ashok Kumar Roy, chairman and managing director of GIC Re, discusses the OPPORTUNITIES�HE�SEES�FOR�BOTH�HIS�OWN�lRM�AND�FOR�GLOBAL�PLAYERS�TARGETING�)NDIA The company has backed the creation of a reinsurance hub in India—why do you feel this is needed? India has immense untapped potential in the area of insurance penetration. To exploit this TI\MV\ XW\MV\QIT _M VMML \W OQ^M I UI[[Q^M JWW[\ to the insurance infrastructure in the country. ?M VMML IV MVWZUW][ IUW]V\ WN KIXQ\IT M`XMZ\Q[M JM\\MZ ]VLMZ_ZQ\QVO XZIK\QKM[ IVL IT[W \MKPVQKIT SVW_PW_ ?M VMML I KI\ITa[\ \W SQKS start this entire process. <PQ[ Q[ PIXXMVQVO J]\ Q\ VMML[ \W PIXXMV on a much larger scale and a much faster pace. <PQ[ _QTT JM IKKMTMZI\ML QN _M IZM IJTM \W OM\ \PM JM[\ WN \PM OTWJIT QV[]ZIVKM QVL][\Za \W KWUM IVL [M\ ]X JI[M PMZM <WLIa /1+ :M Q[ UW^QVO JMaWVL \PM 1VLQIV [PWZM[ IVL _M _MTKWUM W\PMZ[ PMZM 1\ _QTT OQ^M I JWW[\ \W \PM W^MZITT growth of the sector. India has the infrastructure to form a rein[]ZIVKM P]J 1\ Q[ IV IKKMX\ML NIK\ VW_ \PI\ _M have much to offer the international insurance community: a strong and just judiciary, a young and prosperous middle class and well educated \MKPVQKITTa Y]ITQÅML XMWXTM

As GIC Re spreads its wings into new markets what have been your successes so far and what markets might you target next? ?M IZM UW^QVO JMaWVL W]Z [PWZM[ IVL \W JMOQV with we are looking at our immediate neighJW]ZPWWL IVL KTW[M XZW`QUQ\a 1V[]ZIVKM Q[ I KZW[[ JWZLMZ J][QVM[[ \PI\ VMML[ \W UW^M IKZW[[ OMWOZIXPQM[ NWZ \PM ^MZa [QUXTM WJRMK\Q^M WN IKPQM^QVO \PM [XZMIL WN ZQ[S 7]Z [\ZI\MOa PI[ JMMV ^MZa KTMIZ QV \PQ[ ZMOIZL <WLIa ITUW[\ ITT )[QIV KW]V\ZQM[ PI^M I low insurance penetration. They are of course MUMZOQVO MKWVWUQM[ IVL I\\ZIK\QVO OTWJIT I\\MV\QWV IVL MKWVWUQK LM^MTWXUMV\ J]\ \PM insurance sector is still to achieve a standing of its own in most of these countries. It needs expertise in all respects to achieve growth and KWV\ZQJ]\M \W \PI\ KW]V\ZaÂź[ W^MZITT XZWOZM[[ ;W _PQTM _M KWV\ZQJ]\M \W \PMQZ XZWOZM[[ _M IT[W M`XIVL W]Z JI[M )VL _M PI^M JMMV ZMI-

region that is attracting international investment and leading players in various sectors. <PQ[ XZWUW\M[ KWVĂ…LMVKM QV ][ IVL I [MV[M WN LMXMVLIJQTQ\a LM^MTWX[ )TT \PM[M [MK\WZ[ VMML insurance and insurance in an emerging marSM\ []KP I[ 1VLQI VMML[ I KZMLQ\IJTM ZMQV[]ZIVKM support. *MQVO IV M[\IJTQ[PML IVL \Z][\ML XTIaMZ QV \PM QVL][\Za _M _QTT OZW_ \WW ?Q\P I JQTTQWV XWX]TI\QWV IVL I aW]VO LMUWOZIXPQK XZWĂ…TM \PMZM Q[ \ZMUMVLW][ [KWXM NWZ ZM\IQT J][QVM[[ I[ _MTT :MQV[]ZMZ[ _Q\P LMMX XWKSM\[ _QTT JM ZMY]QZML \W UMM\ KIXQ\IT ZMY]QZMUMV\[

What are the key challenges facing the company at the moment?

Ashok Kumar Roy

[WVIJTa []KKM[[N]T QV \PQ[ ZMOIZL ?M IZM TMILMZ[ of the majority of the reinsurance programmes QV UW[\ WN \PM ;)):+ KW]V\ZQM[ 5QLLTM -I[\ IVL )NZQKI /1+ :M Q[ I ZM[XMK\ML WZOIVQ[I\QWV QV \PM[M ZMOQWV[ IVL IV M[\IJTQ[PML JZIVL VIUM ,]ZQVO the course of the next year we plan to strengthen our presence further in countries like Nepal, *IVOTILM[P IVL ;ZQ 4IVSI ?M IZM IT[W TWWSQVO I\ XW[[QJQTQ\QM[ QV ;W]\P )NZQKI ?M IZM ITZMILa present in Bhutan in a joint venture reinsurance company.

!SĂ?THEĂ?INmUENCEĂ?OFĂ?THEĂ?)NDIANĂ?ECONOMYĂ? in the world grows, what will that mean for its reinsurance sector? Today, the temporary slowdown notwithstanding, the Indian economy has very strong funLIUMV\IT[ ) UI[[Q^M QV^M[\UMV\ QV QVNZI[\Z]Kture is already in place and much more is on \PM KIZL[ ?M PI^M I OZW_QVO XZW_M[[ QV \PM

18 | MONTE CARLO TODAY | DAY 1: Sunday September 8 2013

In the Indian market, the mandatory cessions of 20 percent have come down over the years \W XMZKMV\ VW_ <PM QVL][\Za \PI\ _I[ KWVtinuously on the upswing over the last 12 years is showing a slowing down. Hence, to not only maintain our top line at the current standards J]\ \W IKPQM^M OZW_\P \WW _W]TL JM W]Z OZMI\M[\ KPITTMVOM QV \PM [PWZ\ \MZU )VL WN KW]Z[M \PQ[ _W]TL PI^M \W KWUM _Q\P I ÂťVW KWUXZWUQ[M WV \PM JW\\WU TQVMÂź KI^MI\ )[ 1 [IQL MIZTQMZ \PM ZQOP\ XZQKQVO _QTT JM \PM LQNNMZMV\QI\WZ QV \PQ[ regard.

How important are international reinsurance conferences such as Monte Carlo to you? *W\P 5WV\M +IZTW IVL *ILMV *ILMV NMI\]ZM I[ XMZUIVMV\ M^MV\[ \W JM I\\MVLML QV W]Z KITMVLIZ <PMa PMTX ][ UMM\ W]Z J][QVM[[ XIZ\VMZ[ and exchange notes which then largely helps us QV NWZU]TI\QVO W]Z W_V J][QVM[[ [\ZI\MOa NWZ \PM January 1 renewals which are around the corner. Baden Baden, which falls later, is an excellent place to set the tone of the renewals as \PM LI\I IVL \PM Ă…O]ZM[ [\IZ\ JMQVO KZa[\ITTQ[ML _Q\P \PZMM Y]IZ\MZ[ PI^QVO MTIX[ML 6MMLTM[[ \W add, the cementing of old and the creation of VM_ ZMTI\QWV[PQX[ ITUW[\ QVM^Q\IJTa PIXXMV[ QV \PM[M KWVNMZMVKM[ IVL Q[ KWV[MY]MV\Ta TWWSML NWZ_IZL \W Ja \PM QV[]ZIVKM ZMQV[]ZIVKM IVL JZWSMZ NZI\MZVQ\a Q

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SUNDAY

Barclays

08.09.13

Heading for a soft market Carl Boulton, head of insurance from the Non-Bank Financial Institutions team at Barclays, gives his views on what he sees as the big talking points at this year’s Rendez-Vous.

I

V \PM =3 W]Z QV[]ZIVKM J][QVM[[ KWV\QV]M[ to perform strongly, consisting of a wellM[\IJTQ[PML XWZ\NWTQW WN KTQMV\[ IVL IK\Q^Q\a )[ []KP \W []XXWZ\ W]Z OZW_\P IUJQ\QWV[ W]Z QV\MZVI\QWVIT [\ZI\MOa Q[ XIZIUW]V\ ?MÂź^M [MMV I TW\ WN W]Z 6WZ\P )UMZQKIV KTQMV\[ M`XZM[[ KWVKMZV IJW]\ JIVS KW]V\MZXIZ\a ZQ[S M`XW[]ZM [W _MÂź^M LM^MTWXML _PI\ aW] KW]TL LM[KZQJM I[ I ÂťP]J IVL [XWSMÂź UWLMT XZW^QLQVO \PW[M 6WZ\P )UMZQKIV KTQMV\[ _Q\P I -]ZWXMIV KI[P management proposition, particularly focused WV KW]V\MZXIZ\a TQY]QLQ\a IVL QV KW]V\Za XIaments. +WZM \W \PQ[ Q[ \PM QV\MZKWVVMK\Q^Q\a WN W]Z QV\MZVI\QWVIT \MIU[ IVL _MÂź^M JMMV [XMVLQVO \PM TI[\ aMIZ J]QTLQVO W]\ W]Z XZWXW[Q\QWV QV .ZIVKM ;XIQV IVL 8WZ\]OIT 4WWSQVO NWZ_IZL W]Z VM`\ UIZSM\[ WN NWK][ _QTT JM 1\ITa IVL /MZUIVa )NZQKI KWV\QV]M[ \W JM I SMa XZQWZQ\a NWZ Barclays and many organisations are looking at the continent with interest. The infra[\Z]K\]ZM XZWRMK\[ JMQVO ]VLMZ\ISMV QV )NZQKI ZMY]QZM I P]OM IUW]V\ WN QV[]ZIVKM IVL \PM ZMQV[]ZIVKM UIZSM\ Q[ M`XMK\ML \W OZW_ [QOVQĂ…KIV\Ta 1N aW] [\IZ\ \W \PQVS IJW]\ \PM UIKZWMKWVWUQK[ IZW]VL )NZQKI Q\[MTN¸\PM 15. NWZMcasts that seven out of the 10 fastest-growing MKWVWUQM[ W^MZ \PM VM`\ Ă…^M aMIZ[ IZM OWQVO \W JM QV )NZQKI¸\PMV _M _W]TL M`XMK\ I [QOVQĂ…KIV\ ZQ[M QV LMUIVL NWZ QV[]ZIVKM XZWL]K\[ certainly at a retail level, which will then need \W JM ZQ[S \ZIV[NMZZML QV\W W\PMZ UIZSM\[ []KP I[ ZMQV[]ZIVKM ?Q\P WV \PM OZW]VL WXMZI\QWV[ IKZW[[ )NZQKI _M JMTQM^M \PI\ _M IZM _MTT placed to serve corporates who are looking to invest or expand in the region. <]ZVQVO \W \MKPVWTWOa ;-8) *IZKTIa[ 8QVOQ\ IVL ;?1.< KWV\QV]M \W JM SMa \WXQK[ WN KWV^MZ[I\QWV[ _Q\P W]Z KTQMV\[ <W JMOQV _Q\P \PMZM _I[ I ZM\QKMVKM \PI\ ;-8) _I[VÂź\ OWQVO \W JM MVNWZKML JMKI][M WN ;WT^MVKa II and the delays in the implementation of \PI\ LQZMK\Q^M 1ÂźU IK\]ITTa ^MZa KWVĂ…LMV\ \PI\ ;-8) Q[ OWQVO \W PIXXMV# KWUXIVQM[ IZM JMOQVVQVO \W OM\ ZMILa NWZ Q\ IVL IT\PW]OP \PMZMÂź[ I TW\ \PI\ \PMa VMML \W \PQVS IJW]\ XIZ\QK]TIZTa IZW]VL 5IVLI\M 5IVIOMUMV\

Carl Boulton

“The infrastructure projects being undertaken in Africa require a huge amount of insurance, and the reinsurance market is EXPECTEDĂ?TOĂ?GROWĂ?SIGNIlCANTLY v we have some great products and services that can help our clients. 4WWSQVO \W 5WV\M +IZTW 1 [MM I NM_ PW\ \WXQK[ \PI\ _QTT JM WV \PM UQVL[ WN \PW[M I\\MVLQVO 7VM Q[ \PI\ TIZOM U]T\QVI\QWVIT[ IZM UW^QVO \W_IZL[ Âť[PIZML [MZ^QKM[Âź I[ XIZ\ WN \PMQZ \ZMIsury management strategies. They’re looking for economies of scale, to reduce counterparty exposure and also to make sure that capital is working effectively and it’s not trapped incountry.

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) [MKWVL NIK\WZ Q[ \PI\ \PMZM Q[ [W U]KP capital coming into the reinsurance market VW_ \PZW]OP 14; QV[]ZIVKM TQVSML [MK]ZQ\QM[ [QLMKIZ[ IVL KI\I[\ZWXPM JWVL[ _PQKP UMIV[ that rates are falling. The reinsurance market is heading into a soft market so those companies \PI\ PI^M [W]OP\ \W PI^M I UWZM LQ^MZ[M JWWS with direct insurance and reinsurance arms will do well, whereas those companies with a pure ZMQV[]ZIVKM NWK][ _QTT ZMY]QZM LQ[KQXTQVM QV \PMQZ ongoing approach. Q

DAY 1: Sunday September 8 2013 | MONTE CARLO TODAY | 19

Optimal Dynamics Strong Momentum Dynamic Lift Moving Forward

2 2016 2 2013

20 2010 20 2007

Back k on Track ack

2004 20

2002 0

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