Looking at the future, a panel of executives from leading global reinsurers predicted a broader framework in which capital markets, reinsurers and direct writers would be able to provide ways to offer or free up capital.
Speaking at ReFocus 2008, Wolfgang Strassl, head of the divisional unit of the life and health division with Munich Re, Munich, Germany, said, “I wonder if it will be so definable who is the reinsurer and the direct writer?”
ReFocus is an annual life reinsurance conference co-sponsored by the American Council of Life Insurers, Washington, and the Society of Actuaries, Schaumburg, Ill.
Strassl also noted that this blurring has already happened in the U.S. health market. Legally, he said, there is a distinction, but practically, the two are not distinguishable.
That trend is global, the discussion revealed. Wolf Becke, head of the life reinsurance department with Hannover Re, Hannover, Germany, citing an example in South Africa where a reinsurer is underwriting on behalf of a client at the client’s offices. Thus, he said, the reinsurer, through outsourcing, is both conceptually and physically taking on the job of the direct writer.
The blurring of more defined capital management functions is starting to be seen in other ways, according to Becke. In the event of a pandemic, he said, the “risk is simply too big to just take on ourselves. We will need the capital markets in order to manage this risk properly.”
Additionally, Becke continued, life reinsurers are focusing on certain parts of the business now, and do not all look alike anymore.