Hannover Re can fill basic retro needs easily; can take or leave top-ups

Hannover Re is confident it can meet its minimum retrocession requirements from a very stable panel of providers and will work only opportunistically to seek out added coverage as it manages its net exposure, the company’s top officials have said.

“I remain confident of our ability to secure retrocession capacity,” CEO Jean Jacques Henchoz (pictured) told analysts during a presentation opening the group’s 2022 Investor Day.

Henchoz brags of a stable panel of retrocession providers built over the course of many years, capable of filling the minimum requirements without major concern. “Over the years we have been able to cement this real panel of people who are long term oriented.”

“The focus is very much on the platform of minimum protection and this will remain the case,” he said. “By early November we should be good to go.”

After building that base, Hannover Re turns opportunistic. “If there is more capacity than our minimum requirement, then, depending on the price and terms and conditions, we might get more protection because we see an opportunity to improve our performance.”

The current year’s market looks “very different” from years past and won’t make it easy to lather on additional coverage. “Each year has its own set of emotions and surprises.”

“We have other options if we think there are more growth opportunities,” Henchoz said, citing ILS and possible tweaks to underwriting amongst top picks. “There’s always an opportunity to manage our nete exposure.”

Should alternative capital fail to fill gaps “we would look more closely at the profitability per segment and be more stringent on less profitable lines,” Henchoz said.

Hannover Re has only collected more from retro than paid in premium for two of the past ten years, board member Sven Althoff noted.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.