The power of an intermediary
Anke Salm-Reifferscheidt, managing director of DACH for Howden Tiger, discusses why the role of the reinsurance intermediary has never been more important.
Why has the role of the reinsurance intermediary been so important in 2023?
The role of the reinsurance intermediary was crucial in 2023 and will be in 2024 due to the significant transformation occurring in the industry. In turbulent times, with natural disasters, geopolitical uncertainties and economic headwinds, the skills of an intermediary are invaluable. This was particularly the case last year because inflation had a real impact on capital availability. After catastrophe losses, we did not see that ‘refill’ of capital as expected, because people were investing elsewhere. Therefore, it was crucial for intermediaries to step in and play a role in renewals. I had never faced so many complex negotiations before.
As conditions have improved, some carriers have found themselves in favourable positions. Why does an intermediary remain a vital connection to have despite this improvement?
Intermediaries are more vital than ever to help clients protect their interests. After such a long soft market, reinsurers tried to get their costs under control and reduced their teams, meaning they had fewer underwriters to go out into the market. This is where we stepped in because we have more client-facing contacts due to our large distribution capacity. Our economies of scale give us great perspective to identify trends, recognise opportunities and select the right market partners. This is vital as markets remain volatile and unexpected events can occur at any time.
Furthermore, a lot of service functions fall to intermediaries like us that facilitate efficient market penetration and access to various markets worldwide, which would often be a time-consuming task for insurers. Sometimes there are also difficult messages to communicate around renewals and it is up to us – as a buffer – to pass this along in a sensitive and diplomatic way, helping protect relationships between parties and avoid them being destroyed.
Looking ahead, what are the expectations and priorities ahead of renewal?
It will be like last year. Inflation is stubborn, and a new political crisis has already started in the Middle East with significant geopolitical impacts, which sometimes drive the reinsurance market more than actual catastrophe losses because they are more predictable. The situation has not changed and the pricing expectations from reinsurers are valid. Looking ahead, there are several expectations and priorities for the renewal process. First is the need to ensure long-term stability and profitability. This requires a careful review of contract terms and pricing to ensure they align with current market realities. Finally, the ability to adapt to changing market conditions and offer innovative solutions is a key success factor.
How does Howden support reinsurers as an intermediary? How is this different from others in the space?
At Howden, we support insurance companies with comprehensive market knowledge, tailored solutions and a strong customer focus. This includes identifying market trends, risk analysis and negotiating competitive contract terms. With a single P&L, that means team collaboration is incredibly strong. Our truly diverse team goes beyond mere talk of diversification, and we specifically select teams tailored to our clients' needs, with analytical teams integrated into their operations. This combination of expertise, global reach and innovation capability makes Howden a standout intermediary in the reinsurance industry.