You could hold it in New York, or London, or practically anywhere, but it wouldn’t be the same. The annual Reinsurance Rendezvous in Monte Carlo, which translates as Charles’ Hill, in Monaco is a unique event. It brings together not only representatives from all of the world’s larger reinsurance providers, but also the brokers, lawyers, accountants, cat modelers, actuaries, risk managers and members of the press, as well as others, who serve them.
As Jerry Sullivan explained to the IJ in a recent video, the “heart of our business” is spreading risk, and that frequently involves reinsurers and reinsurance brokers who help spread that risk by placing reinsurance contracts.
The business is high profile, which may be one reason it’s held in an equally high profile venue. There are few other places in the world where you can look out over the harbor and see gathered a number of billion dollar plus yachts, where Porsches are common, Ferrari’s and Lamborghini’s are plentiful, and there are more Rolls-Royces and Bentleys than Fords.
Over 2000 individual people are listed in the official directory for this year’s gathering. They come from more than 100 countries, with the biggest delegation being from the UK. From Sunday, Sept. 11 through Wednesday Sept. 14 they will listen to presentations, go to conferences, attend company meetings, and above all – network, network, network, and after that eat, drink and party.
However, many of the discussions will be on some serious concerns: Will there be another major catastrophe that will raise reinsurance rates? If it doesn’t happen, is there any chance that we can set higher rates, or will we have to in fact lower them? What are we going to do if interest rates stay at their present all time low? Will regulations like Solvency II drive more mergers and acquisitions (M&A) activity? Are insurance linked securities (ILS) here to stay? Are they the wave of the future? Or are “hybrids” – companies that sell both reinsurance and primary insurance. Geographically isn’t Asia, and particularly China, the wave of the future? Has the reinsurance industry made such good use of improved modeling abilities (in all fields, not just catastrophes) that the “cycle” might finally be tamed? But would that be an entirely good thing? There are a lot more.
Given its high profile one would think that reinsurance is one of the industry’s major occupations. However, important as it may be, reinsurance is only a small part of the overall global insurance industry. According to statistics compiled by the London-based Insurance Insider, which were presented at its Pre-Monte Carlo Executive briefing, “reinsurers currently command just 6 percent of the $2.3 trillion global premium pot.”
Despite this rather paltry figure, it’s hard to imagine the insurance industry without a reinsurance component. This segment of the industry has weathered tough times before, and it’s generally acknowledged to have performed its job – essentially bailing out primary carriers – quite well.
More information on what the Rendezvous’ participants have to say will appear in the coming days.
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