dr. bru n- but now th in 9s look bette r sowe sh0 uid not miss th is opp0 rtunity ! page 10 • reb0...
TRANSCRIPT
Dr. Bru n0 P0 rro
Chief Ris k eD fficer, Swiss Re
IMIA 20 02 in Rii sehlikn n
Group Product Mana gem entEnginee rin9Zurich, September 2002
Page 2
• •
• Res uIts
• P0 S iti0 nin 9 0 fEn gin eerin9
• The underwriting
• Cia im s
• Risk management
• Conv ergence with prop erty
• The en9 in eer
• 0 utlo 0 k
Page 3
• From 1998 to 2001, the line of business Engineeringpro duced 4 yea rsin a row 0 f negativere suits .
• Des pite cIea r imp r0 vemen tin re- underwriting, res uIts arestill critical for 2002
• So ft market
- The LoB was riding the soft cycle ... not steering thecycle
- Everyo ne involved ha d its ow n responsibility ... thisincIude s, 0 f c0 urse, th e reins ure rs
• Res uIts we re well baIancedin th e pa st, bu t we have noweate nail th e mea t ... and are d0 wn to th e b0 ne!
Page 4
• Itremains a niche product
• Important as a global reinsu rer
- We wan t to 0 ffe r ail pro ducts ran ge ...
• In EN the b0 undary betwe en insuran ce and reinsurance isless rigid.
• Globalisati0 n 0 f risks
- Big in te rn ati0 nalisati0 n 0 f te chnicaI supplie rs, as well asinsuran ce suppliers (risks are globa lly placed)
- Are 0 ur structu res adapted to th e situati0 n ?
• As line of business EN is kno w-ho w intensive
Page 5
• Is bein gin crea sin 9Iy imp r0 ve d as wardin 9san d con tractsare mare pro fe ssion ally deve lop ed,
- But we sti11 have difficui t se9men ts:
- Tunnels and und erqro und con structions
- Gas Tu rbines
- EntrepreneuriaI risk
• Pre miu mob ta in ed not ad equate to risk
• Cavers and wordings
• Is treaty bus in ess th e appro priate fa rm fa r suchas pecia Iline ?
Pag e 6
- Are we sure we only paid the covere d losses?
- Are we sure we always paid only th e quantum as perpolicy wording ?
- How is the Underwritin 9 in te ntio n 9rante d ?
• Chan ge in th e cons truction indus try environment
- Pro ject finance
- Very tig ht tim e sche dules
- Pushin 9 to wards te chn0 lo gicaI risky soluti0 ns
• Insurers together with the reinsurance ind ustry need tofo cuson pro active cIaims hand Iin9.
Page 7
• Increa sin gIy c0 mpie x riskiand scap e in th e con structi0 nindustry demand sophisticated integrated riskma nagement
• How to im prove risk co ntro l during the construction inorder to achieve a be tte r collaboration be tween insuredand insura nce I reinsurance
• If not possible for insurance/re insurance because lack ofres 0 urces . > 0 uts 0 urcin g
• Will not 0 nIy av0 id Ire duce 10 sses but enhance th eadjustment (tim e, quantu m, fairn ess I
Page 8
• The que stio n sh0 uId not be: sh0 uId MB be writte n inProperty but rath erho w can we ins urep r0 per UW.
• This conve rgence as a resultof the so ft market created:
- polluting the result in propertv
- reducin g profitability in EN loB
• This shift has co me to halt, due to re-un derwriting inso me markets and even reve rse trends are partiallyob served.
• EN as LoB is very intensive in technic al and insurancete chnique s know-how
- can we make bette r use 0 f it ?
Page 9
• Lack of marketing sense in the engineers community
• A certain lack of recogni tion
• Norm aI men ta Iity is th at 0 f a risk ta ker ...
• Finally duringas 0 ft cycle peri0 d marketin9 was rath er inth e drivin g seat, it is therefore not easy for Engineers .. .who are at first 9Iancelite chnicall y Iabelled"to imp 0 seth eir vie w.
- But now th in 9s look bette r sowe sh0 uId not miss th isopp0 rtunity !
Page 10
• Reb0 und in te rm s 0 f con ditio ns
- afte r soft-mark eta nd Iax underwriting
- insurers are in the driving seats when it come to priceand te rm s
• Fres h cap itaI has bee n flow in g in insuran ce Ire. industry
- in response to tight cap acity.
- rlsmg premium
- but not yet in EN niche segmen t
• Reinforce a strict and very discipline d Underwriting