Everest’s Klinger: Strong reinsurance growth amid industry challenges
At the Rendez-Vous de Septembre in Monte Carlo, Everest's head of international reinsurance Artur Klinger provided insights into the company's strategic developments and the evolving landscape of the global reinsurance market.
Everest's reinsurance arm has seen significant growth and diversification. Klinger elaborated on the strides made since the previous year, highlighting the expansion in specialised teams and products.
"Last year, we invested in experts, announcing our head of financial risk, Marco Schiattone, and creating a team for specialty solutions globally," said Klinger.
This strategic investment led to the successful closure of an innovative credit risk transaction in Latin America and additional covers for clients in Europe. These achievements, leveraging global expertise to support clients locally, contributed to Everest's double-digit growth.
Competitive edge in a crowded market
As competition intensifies in the international reinsurance market, Everest's earlier establishment and strategic positioning have granted it certain competitive advantages.
According to Klinger, the company's strength lies in three key areas: its people, lean capital structure and global expertise.
"Our people are a significant advantage. All decision-makers are local," Klinger emphasised, citing Melissa Ford, who has been leading the company’s Middle East and Africa operations for 30 years.
The empowerment of experienced market experts with decision-making authority gives Everest an edge in understanding and responding to local market nuances.
Klinger also stressed the importance of a lean structure, emphasising Everest’s streamlined approach.
"This lean structure enables us to execute nimbly and efficiently follow our clients' needs," he added.
Trends and challenges in the reinsurance industry
Discussing current trends in the international reinsurance market, Klinger pointed to geopolitical fragmentation and increased natural catastrophe costs driven by climate change.
"We have wars and a multilateral environment where protectionism is rising," he noted, adding that supply chain disruptions have led to higher costs for over 60 percent of clients and industries, contributing to inflation and complexity.
The impact of climate change on nat cat costs is another significant trend. Klinger highlighted the increasing frequency and severity of events such as floods and hail storms.
"Events have become different," he explained, citing unexpected large losses in Italy and Dubai. These complexities have resulted in higher losses due to factors like more significant hail storms and more complex construction methods, such as solar panels and insulation being affected.
While these challenges create additional demand in the industry, they also require reinsurers to invest in modelling to help clients mitigate risks. "It's good from an industry standpoint, but it asks the reinsurers to really invest into modelling and assist clients in finding answers to these risks," Klinger remarked.
Adapting to climate change and future growth
In response to increasing risks associated with climate change, Everest has been investing in its modelling capabilities. Klinger explained the company's approach to managing these risks through a growing team of nat cat experts in Europe and the US.
"We regularly review our reinsurance structures and request measures like increased retentions, aiming for fair risk-sharing," he said. Everest also provides structured reinsurance solutions to help clients meet strategic targets over the next few years.
Looking ahead, Everest's growth strategy involves scaling up its portfolio by partnering more closely with clients and expanding into specialty lines such as credit and surety. Klinger highlighted the company's focus on organic growth in regions such as Asia, where it has significantly increased its presence. "We have now more than doubled the premium volume out of the Singapore office," he stated, expressing satisfaction with the company's robust and diversified portfolio.
The long-term vision for Everest involves providing robust returns through a diversified portfolio, ensuring sustainable growth. "Our major aim is to create business for the long term," Klinger concluded.