November 13th, 2009

Reinsurance Brokers: Orderly Markets and Optimized Results, Conclusion

Posted at 12:30 AM ET

klein_chris_bioChris Klein, Global Head of Business Intellience
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The term “broker” implies a transactional focus, but in the (re)insurance business, a wide range of activities is necessary, far beyond merely bringing buyers and sellers together. To complete a transaction in a manner that gives both insurers and reinsurers the ability to make their capital as productive as possible, the intermediary analyzes data, runs catastrophe and model scenarios to immobilize the element of surprise. Each task contributes to the ultimate determination of capital sources and completion of risk transfer.

In addition to facilitating order within the (re)insurance marketplace, the broker brings advice from related disciplines to help the participants maximize the productivity of their capital. A profound understanding of regulatory, rating agency and financial market issues ensures that the core risk transfer effort is not derailed by a related consideration that could be overlooked if myopia is permitted to prevail. This keen understanding of the risk environment as a whole works to the benefit of both cedents and reinsurers, as both operate with a fuller understanding of the risks involved and how they can impact each party’s balance sheets.

As the risk environment and (re)insurance industry are not static, the role of the reinsurance broker must evolve. Reinsurance intermediaries tend to reside at the leading edge of risk transfer innovation, finding new ways to help their clients optimize their portfolios with new techniques and technology that lends precision to the efforts of risk managers around the world. The reinsurance broker may be focused on the transaction — but is already thinking about those that will be conducted a decade from now.

Click here to read Overview >>

Click here to read Executing the Transaction >>

Click here to read Benefits to Capital Suppliers >>

Click here to read Value Beyond the Transaction >>

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