Everest’s success steeped in growing international reinsurance division

Global (re)insurer Everest is enjoying “great success” in its international reinsurance division after being created just two years ago, according to its head of international reinsurance Artur Klinger.

“Last year when there was market turbulence, we were really able to deliver,” Klinger told The Insurer TV last month in Monte Carlo at the reinsurance Rendez-Vous.

The division is especially getting a boost from growth in Asia and Europe.

Klinger said the company’s new head for the region, Kevin Bogardus, has more than doubled Everest’s Asian book.

Everest Re’s Q2 earnings beat analysts’ expectations. Klinger attributes those results to a number of factors, including a successful division of labour. He said the international division is made up of five business units that operate independently, with each unit focusing on a core strength.

“I think across all markets we made something like 30 new customers, new clients. But in addition, most of our growth comes from existing customers,” said Klinger.

Earlier on this year the company raised $1.5bn in capital, which Klinger said gave the company more flexibility to increase lines in property cat for core reinsurance clients, while also allowing the group to seek out opportunities in specialty lines including engineering, cyber and other financial lines, as well as in Asia.

“Aviation is a difficult market, but since the Boeing loss, market conditions are good. We continue to really seize opportunity there. Cyber, we have good growth, and here we see the cyber market maturing, also here we seize this opportunity,” said Klinger.

In the strikes, riots and civil commotion (SRCC) space, risks have become more volatile. Klinger said social media is pouring oil on the fire, and that this has the potential to amplify riots.

“This means we see the spread of riots and strikes getting more complex. For us it's important that we can price SRCC separately, so to get a clear event definition – is it on a country level? Is it on a city level? – to really define the event properly,” said Klinger.

Overall, Klinger said heightened demand is helping the firm succeed, despite some rough seas on the horizon.

“The perils are getting more complex as we have seen in cyber. You know, we have seen ransomware attacks, and now we see the next wave of cyber attacks. And we also see, in engineering and in marine lines, much more complexity than there used to be,” he said.

Klinger said that it is essential for reinsurers to understand the impact of climate change, geopolitics and inflation, along with a core understanding of what is driving losses, and to what extent the loss increase is subject to inflation.

He also expressed scepticism of the ‘secondary perils’ moniker. Climate change-related risks are correlated and interconnected, he said, adding a higher complexity to pricing.

“I think climate change-related perils need special treatment in retention and pricing -– non- climate change-related perils, usually I think reinsurance is able to model and price it. But in my opinion, [climate change-related perils] are insurable, they're reinsurable, and in this area reinsurance is needed more than ever,” he said.

“I mean, it's an opportunity – and let's face it, we are here to do business, and that creates demand,” added Klinger.

Watch the 13-minute interview with Everest’s Artur Klinger to hear more on: