For policyholders, insurance is an excellent mechanism for risk and capital management — selling itself on a wide ranging product choice, expert advice and the promise of certainty over uncertainty, whatever life presents. Reinsurance does exactly the same for insurers, being a highly adaptable and efficient tool for risk and capital management, and thus for sustainability. That role is now taking on ever more importance as the background pressures against which insurers write business continue to mount.

Today’s economic and financial environment is volatile, uncertain and lacking the visibility required for calculated, decisive investments. At the same time, losses have been high, asset values have fallen and regulatory requirements are increasing. Not surprisingly, and as the many discussions with clients and the market at recent industry conferences confirm, the fundamental areas of solvency and capital optimization are top of the agenda. The need for stable, sustainable capital is high. Reinsurance has that track record and is an excellent complement to the capital structure of insurance companies. The insurer-reinsurer relationship looks set to turn into an even stronger partnership.

At PartnerRe, we are working with insurers to determine the reinsurance solutions that will optimize their individual solvency and capital situations. With experts in diverse lines and worldwide markets, we are close to our clients. Our priority is to understand their concerns and requirements and from there to develop the solvency solutions that they need, be that in one area or across business lines. Solutions will vary from standard single-line solvency quota shares, through multi-line solvency deals and products protecting adverse reserve deviation, to complex products protecting underwriting, reserving and investment risk. As evidenced below, the support given by our teams can also go beyond determining and providing the products themselves.

Our life team, for example, has worked alongside European life insurers to provide them with capital oriented reinsurance that either reduces their solvency strain or improves their excess capital. Worked scenarios show clients the efficacy of each option. The team has also assisted clients in setting Best Estimate assumptions, essential for Solvency II and now the basis of most financial projections in the life industry. The support and chosen solutions (including large quota share programs) have enabled these clients to reach their mid-term strategic targets and are thus helping them to successfully manage their transition into the new regulatory environment.

Reinsurance — the people and the product — is an excellent solvency tool. With our assured financial strength, broad expertise, proximity to markets and genuine solvency support, we look forward to helping you determine and achieve the best way forward.