Business as usual: NewRe sticks to business despite losses

Supply and demand should balance out in this renewal, with rates remaining steady and terms and conditions consistent. But the story could be different on loss-affected lines as reinsurers become more discerning, Thomas Braune, chief executive officer of NewRe told Monte Carlo Today.

“There has been very little new money entering the market and there remain concerns around things such as secondary perils and the scale of the nat cat losses the industry should expect every year. There is also very high claims inflation. That will mean a balance,” he said.

Dirk Herrenpoth, NewRe’s chief underwriting officer, property and casualty, added that while there is no shortage of capacity in the market, he believes discipline will hold. 

“It is different from the hard markets of the past. We anticipate that things will be stable,” he said.

“Overall we are happy to say it is business as usual.”

Herrenpoth is sceptical as to whether investors will be attracted to an industry now in a more lucrative part of the cycle. “The industry has earned its cost of capital for only four of the past seven years. I am not sure we are that attractive as an industry in that sense,” he said.

NewRe posted a loss of €185 million last year due to a combination of cat losses and the need for reserve strengthening on its UK motor book. Braune admits that the reinsurer examined its strategy after that, but concluded that the strategy was sound and only small adjustments were needed. 

“Last year was difficult for an EU cat writer, but nat cat is our business and we can bear losses. We reduced our UK motor book a little but overall we are happy to say it is business as usual,” Braune said.

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