VIG Re seeks similar cedants
From its home market in Central Europe, VIG Re is expanding in Continental Europe taking advantage of its low cost base, Johannes Martin Hartmann, its chief executive, told Baden-Baden Today.
With its mutual business culture, VIG Re has started to write business in Continental Europe focusing on cedants that have either also a mutual background or a similar business culture. “We are looking for long-term relationships,” Hartmann said.
“We are not aiming to maximise our capital return on a short-term basis.”
He also pointed to the fact that the VIG Group based in Austria has a 200-year history. “Our clients can trust that we are here for long-term partnerships.”
The company opened a branch in Frankfurt last year and has since grown its premium to around €30 million in Germany. “We want to serve clients locally and recruited a German team for the front office. The underwriting, risk management, claims management, reinsurance accounting, all these functions remain centralised in Prague to leverage the cost benefits,” Hartmann said.
VIG Re has currently around 50 clients in Germany, 23 in Austria and six in Switzerland. According to latest numbers, the total gross written premium for Germany is €34.3 million and for the Germany, Austria, and Switzerland (DACH) region it is €43.8 million.
VIG Re is now replicating the same model for western European markets, including France and Benelux. The company has received approval for a branch office in Paris from where it will serve its French-speaking clients.
“We have a very low internal cost ratio from being based in Prague where the salaries are lower and we have outsourced our shared services with our sister companies which helps to manage the company at a very competitive internal cost ratio,” Hartmann said.
The low administration cost allows VIG Re also to write smaller tickets.
“We discovered a niche market in small local players that are not being served by the big reinsurance companies,” Hartmann said.
“Due to our low cost base we can cater for these local players and add value to them. The quality of the business we take on is pretty good and is generating nice margins,” he concluded.
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