Demographics help Pro tighten its grip on German complex claims market

Demographic trends are working in Pro Global’s favour in Germany, helping it tighten its grip on a market that it is already dominant in, according to Robert Buchberger, managing director at the firm.

“If you look at the claims departments of primary insurers, a lot of experienced people are retiring,” said Buchberger. This is leaving them lacking the kind of expertise required to handle the complex claims in the life space in which Pro’s German team specialises.

That creates opportunities for Pro to help fill those gaps, advising on transactions and helping clients to introduce portfolio analysis and identify where there might be opportunities for resolutions concerning ongoing claims, he explained.

While other reinsurers ponder how to attract a new generation of talent to the sector, Pro feels well positioned to continue recruiting high quality graduates who will cement its position in the business for years to come.

Buchberger said: “Our differentiator is that we are a service provider with a very open philosophy. We can bring in young lawyers straight from university who are interested in doing complex deals, working with lots of different clients in very different situations.” Recruits might work with one client in one area one day, and then on something very different the next, which attracts a certain kind of individual, he said.

“We are probably not top of the list in terms of salaries, because we are not a reinsurer, but there is a steep learning curve and a lot of training,” Buchberger added.

Pro Global in Germany is focused on the complex claims market, especially for disability in the life space. It has around 40 dedicated staff, around two-thirds of whom are lawyers by training, with most of the remainder being re/insurance professionals.

“Given the dominance of the ‘claims occurred’ principle in Germany, it is very difficult for the Anglo-Saxon players to enter this market,” said Buchberger.
It means insurers have long-tail exposure to potential claims, lasting for many years after the event, for example a birth defect or an injury.

In Anglo-Saxon countries a “claims made” principle is more prevalent, meaning the exposure only lasts for a certain period of time. The insurer has an exposure for the duration of the coverage, even if the incident took place before the cover started, but once the policy expires there is no further exposure.