Changing Reinsurance Market Favours Mutual Insurers, says Willis Re
Mutual insurers have found themselves in a prime position to capitalise on changes in the traditional reinsurance market, according to Willis Re, the reinsurance broking arm of Willis Group Holdings.
‘1st View April 2013 Renewals Report’
released by Willis Re found that changing distribution models coupled with a flood of alternative capital has left many reinsurers concerned over both their existing portfolios and their access to future growth.
This provides mutual insurers with the perfect opportunity to strengthen their existing relationships with traditional reinsurers and to forge new ones.
“Traditional reinsurers are very aware that while some larger commercial buyers are reducing their use of reinsurance in this phase of the reinsurance cycle, mutual buyers value long-term sustainable relationships throughout the entire cycle,” said Robin Swindell, executive vice president of Willis Re. “This is the perfect time for mutuals to demonstrate that they are reinsurers’ preferred customers.”
Mutual insurers have a unique ownership structure where policyholders, not external shareholders, are the ultimate owners, reports Willis Re. This means they have less access to other forms of capital, and as a result, mutual insurers are often heavily reliant on reinsurance to provide them with additional capital to deal with catastrophes and large losses.
John Haydon, EVP of Willis Re, added: “Mutual insurers are in business for their members for the long-term and should receive the recognition they deserve from reinsurers. Like mutuals themselves, reinsurers should never leave their loyal customers in the lurch.”