PartnerRe refocuses Asia strategy to grow profits in challenging times

PartnerRe is placing a significant focus on achieving technically sustainable pricing with long-term client partners as a “business as usual” approach will not be sufficient to achieve profitable growth and adequate returns in today’s challenging environment.

Speaking to SIRC Today, Francis Savari, head of business development Asia-Pacific at PartnerRe, said reinsurers face challenges on several fronts.

“First, the competitive trading landscape of the past eight years, on the primary as well as the reinsurance side, has resulted in year-on-year rate erosion,” Savari said.

“Second, we are faced with a prolonged low interest rate environment putting further pressure on underwriting margins.

“Third, the restrictive regulatory policies in certain markets are making it challenging to access reinsurance business.”

These myriad challenges have prompted the reinsurer to prioritise achieving technically sustainable pricing with long-term client partners. But the deliberate move away from business as usual goes further, Savari said.

The company is putting significant focus on being highly responsive to client needs, delivering impactful solutions to trading partners and developing win-win strategic relationships with brokers.

“To achieve this, we believe that agility is a key ingredient. Agility for us means the speed with which we respond and the flexibility of our interaction with clients and brokers,” he explained.

This repositioning is evident in the Asia region.
While the region offers concrete future growth opportunities, increasing strength in the regulatory environment, unique client demands and diverse market dynamics, it also has markets that are considerably different on several levels.

“Asia is not one homogeneous entity but consists of a constellation of distinctly different markets and challenges,” Savari said.

“At PartnerRe we are cognisant of the need to tailor our approach to cater to different client needs within the various Asian markets in which we operate. Clients in Asia value certain qualities in their reinsurance partnerships and fulfilling these needs differentiates successful reinsurers from the competition.”

He explained: “A unique characteristic of Asia, especially South East Asia, is the family-owned insurers which have unique needs due to their generational leadership succession and uninterrupted long-term reinsurance partnerships.

“In order to develop lasting relationships with this client segment, it requires special understanding and investment in time from their reinsurance partners.

“PartnerRe is a privately-owned enterprise and its local industry professionals, who have decades of experience creating deep networks in the region, are well positioned to build mutually beneficial, lasting relationships with these insurers.”

Expertise
Savari added that Asian clients are keen to continually upgrade their technical expertise and regional market knowledge, as many are looking into regional expansion.

“Being a knowledge-based reinsurer, PartnerRe engages actively in knowhow transfer initiatives by way of offering training and workshops to enhance our value proposition to clients.

“Continuity and consistency are essential ingredients in building lasting partnerships in Asia. Our people on the ground in Asia have vast experience and profound local knowledge of the local cultures, peculiarities and sensitivities and are fully empowered to manage long-term relationships with clients and brokers.

“This is appreciated and acknowledged by our trading partners,” he explained.
In the next 12 months to two years, the cornerstone of the reinsurer’s plans in Asia will continue to be profitability.

Savari said: “We plan to achieve this through our thoughtful client segmentation, strategic broker engagement, robust underwriting approach and careful segment selection along with appropriate capacity deployment to ensure a balanced and diversified portfolio mix.

“The absolute need to remain focused is paramount in a marketplace that is challenged by increasing frequency and severity of loss activity and intense competition.”

Re/insurers are bracing themselves for potentially disruptive technology trends that could affect insurance value chains. Savari said that to remain relevant in this shifting trade landscape, the company supports its clients in Asia by partnering with them in managing disruptions through innovation and new product development.

“Using our in-house expertise and through our collaboration with third party experts, PartnerRe positions itself as a solutions provider that supports the growth ambitions of our clients, especially those looking to move into new markets and products.

“We have a broad appetite for new and emerging risks. As a pure-play reinsurer that never competes with our clients, we stay focused on supporting their needs as they continue to innovate in the face of disruptions,” he concluded.