Soft Market Causing (Re)Insurers to Look Inwards: Pro-global

Chief executive Artur Niemczewski explains trends in the consultancy and outsourcing markets.

The soft market is leading (re)insurers and brokers to increasingly look to streamline their own businesses in order to save money, according to Pro Global chief executive Artur Niemczewski.

“In the flat and declining rate environment we’re in, where we are in a zero sum game, if not a declining sum game, in the reinsurance market and primary market, so you have to innovate and change your business model,” Niemczewski said.

“You either have to innovate product-wise, innovate in terms of distribution, innovate in terms of what your business model looks like. But you cannot stand still.”

The Pro Global chief added that he had seen a lot more reinsurers looking to restructure their businesses as a result: “Taking market share from each other based on price, as a reinsurer, you just can’t do it, because it’s a downwards spiral.”

Niemczewski said that he had also observed a trend towards reinsurers and brokers working more with MGAs as another way of increasing efficiency and diversifying their distribution options.

The MGA model was also spreading increasingly in Europe, away from its birthplace in the UK, he went on: “We also now see the trend in continental Europe. Rather than MGAs being an import from the UK market, we now see them more and more in places like Germany and France.”

In the London market there is a great desire for change, but also a scepticism about the topic due to the failure of past large modernisation programmes, Niemczewski went on.

Source: GlobalReinsurance