“Our underwriters see PartnerRe as a risk-assumer and risk-manager. We do not transfer the risk. We assume it and manage it.”
“You can find risk management footprints in every transaction at PartnerRe. Our risk dashboard defines the organization’s tolerance for risk and everybody from the Board of Directors to the most junior underwriter knows what the limits are.”
It’s all about risk
At PartnerRe, risk assumption is our business. Our success is wholly dependent on our ability to manage risk, so we focus first on the risk and then we consider the expected return.
- Risk management is at the core of our value proposition. We transform the uncertainty presented by risk into the certainty of claims payment for our clients. We must also produce an adequate return for our shareholders. Our challenge is to find the optimal balance between the returns that we can produce over the course of the market cycle and the risk to which we expose our capital.
- Risk management is integral to our five-point strategy, which encompasses diversification, risk appetite, active capital management, excellence in evaluating and valuing risk, and consistency in how we deal with reinsurance and capital markets risks.
- Risk management is embedded in our culture, which encourages ownership and responsibility for risk management at all levels, with aligned return goals and compensation systems.
There are four key factors in our approach to risk management that have led to the stability that we have been able to achieve over the past eight years:
Diversification
Diversification is our primary risk management tool and provides the cornerstone of our stability. It allows us to offer efficient risk solutions to our clients, manage volatility and enhance overall return by mitigating the economic impact of any single event or development.
We seek a prudent balance between traditional reinsurance and capital markets risks that enhance the diversification and returns of our consolidated risk portfolio. On the reinsurance side, we are diversified by geography, by lines of business and by distribution system, both as a Group and within business units. On the capital markets side, we are diversified by asset class, industry, geography, currency and security.
We are always seeking new opportunities to diversify. For example, in 2008 our Global business unit achieved further diversification by integrating the international reinsurance business acquired from Mutuelle Centrale de Reassurance and the U.S. expanded its agriculture business. Next >