Recent Activity in the Global Reinsurance Market
Recent Activity in the Global Reinsurance Market, by Claude Penland
We’re going to investigate activity since July, 2010 in the international reinsurance market.
On the mergers and acquisitions front, Montpelier Re’s CEO says to expect many more acquisitions and mergers. Some are in fact expecting consolidation specifically in the Asian market. Cayman Islands reinsurer Atlantic Re was sold to an investor group by Eastern Insurance. Gerova acquired an investment bank and renamed themselves Seymour Pierce & Company, redomesticating in Bermuda. Renaissance Re sold United States insurance operations to QBE. Integro bought ReSource Intermediaries. Channel Re was sold to MBIA.
Berkshire Hathaway has acquired more than ten percent of Munich Re. Endurance purchased Glacier Re’s international renewal rights, since Glacier Re went into runoff. Private equity firms took a step back from investing in the reinsurance business. Transamerica Re remains for sale. Apollo looked to reinsurers to help with their bid for Brit Insurance.
Regarding new activity, in Egypt, African Takaful Re was created. Greenlight Capital Re launched a unit within Dublin, Ireland. In Japan, Munich Re put together a Tokyo unit.
Willis Re launched a specialty casualty practice group, while Aon Benfield has a new hub for life reinsurance in the Asia Pacific. Barbican looked to operate a Lloyd’s syndicate. Alterra Capital reorganized in Bermuda. Steve Roder and his team were looking to start a Hong Kong reinsurer. TigerRisk considered entering London. Three types of reinsurance were created by the United States federal health law changes. Novae Re entered credit and surety reinsurance.
China Re was to IPO. Catco Investment Management formed as a catastrophe reinsurance fund, while Atropos is a new ILS fund.
Munich Re in 2010 surpassed Swiss Re’s gross premium.
On the research and analysis side, ReinsuranceSalarySurvey.com released their reinsurance compensation survey. Aston Business School has considered the convergence in approaches by Bermuda & Lloyd’s firms. Willis Re’s Latin American flood models were released, while Aon Benfield partnered with the Institute of Cat Risk Management (ICRM) and Nanyang Tech in Singapore. The ICRM is looking to raise $50 million. Reinsurers may still have too much capital, although business remains tough for life reinsurers. New risks and regulations are changing the reinsurance industry.
Going forward, Bermuda, Asian, European and US reinsurers are divided on business strategies since the financial crisis. Some Bermuda reinsurers are redomiciling to Europe. Solvency II should drive demand for reinsurance. Some reinsurers are very well capitalized and are looking forward to competing under the new European insurance regulations. A Hong Kong reinsurance pool might be launched for high-risk health insurance. Some have argued that China needs a cat pool. Some are also posing arguments on why the National Flood Insurance Program should be privatized.
And, finally, Florida and New York have lowered collateral requirements for some reinsurers to increase participation.
Related posts:
- 24 Significant Bermuda Reinsurance and Insurance Stories from 2010
- US, Bermuda and European Reinsurers divided on Business Strategies
- Top Reinsurer Domicile: Who Will Win, Europe or Bermuda?
- Variable Annuity Reinsurance Market trends
- 18 Reinsurance Startups, Reorganizations, New Practices and New Funds in 2010
