PartnerRe looks east

PartnerRe looks east

PartnerRe is gearing up for growth in Asia. The group has increased underwriting resources in the region and created a new Asian subsidiary, PartnerRe Asia. From April 1, PartnerRe Asia will become the group’s principal reinsurance carrier in Asia-Pacific, underwriting both non-life and life business. Industry veteran Alain Flandrin, previously head of Partner Reinsurance Europe, Singapore branch, will head up the new Singapore-based platform.

PartnerRe is no stranger to Asia and has been operating in the region for two decades. The group has offices in Singapore, Hong Kong and Beijing, employing a total of 40 people in the region. Increasingly it has been building up its presence in Asia, as it localises more business in Singapore and Hong Kong. But the creation of PartnerRe Asia marks a significant milestone in the group’s strategy for the rapidly growing Asia-Pacific region.

Long-term commitment

Flandrin says: “We have a long-term strategic commitment to Asia. Over the years we have built up a well-established brand, strong relationships with our clients and an outstanding reputation in terms of claims payments.

“The move to establish PartnerRe Asia as a separate subsidiary is a continuation of these commitments. It is a purposeful step forward that brings Asia on to an equal footing with our North American and European operations.”

As part of its commitment to the region, the group, which recently agreed an $11bn merger with Axis Capital, is increasing its presence in Asia-Pacific, to ensure its operations are fully aligned to the needs of its Asian clients.

Flandrin says: “We have been progressively moving local presence into the region, increasing local underwriting expertise and empowering local decision making.

“Most insurers and reinsurers talk about having a strategic commitment to Asia, but for us it means developing long-term partnerships with our clients towards a shared goal of sustainable growth, understanding their needs, so that we can share our insight and expertise in the market to deliver high quality solutions.”

PartnerRe does not provide a breakdown for its operations in APAC, but its latest financial results show that total revenues for the whole group were $6.5bn at the end of December, with total assets of $22.3bn and capital of $7.9bn.

Underwriting business in APAC accounted for around 11% of PartnerRe’s total portfolio, with Europe and North America the group’s major markets, making up 40% and 39% of total business respectively. But the proportion of underwriting done in APAC is expected to increase going forward.

Asia a core part of PartnerRe

Flandrin says: “We are convinced Asia will become an increasingly important source of business for PartnerRe; it is a core part of our strategic expansion.”

Flandrin’s career in the insurance industry spans more than 38 years. He spent the first 25 years working on the insurance side of the business, before moving into reinsurance 13 years ago.

“I answered an ad”

He says: “I came to insurance by pure chance but I am extremely motivated by this industry. I answered an advert in the newspaper. They were looking for someone with a Masters in Economics and I had just got mine, so I applied and got the job.”

He moved out to Singapore 18 months ago, and started a review of the group’s positioning in the region. He focused on its products, lines of business and customer approach to see how it should respond to the evolving needs of its clients, to ensure it remained a “relevant reinsurer”.

Flandrin says: “We looked at the evolution of the needs of our clients and the way we have to adapt to those needs. In the past, we achieved sustainable growth in Asia by writing mainly traditional property and casualty business, property facultative and life business, while most of our specialist skills remained centralised in Europe.

“Today our clients are looking for reinsurance partners who are local, who offer a broad range of products, who have a track record in supporting them through sharing expertise and best practice, and who are developing innovative solutions and products.”

As a result, the group will expand its specialty lines underwriting presence in the region.

“Our strategy for Asia is to expand all specialty lines, i.e. aviation, marine, credit and surety, agriculture, energy, engineering, and specialty casualty, as well as facultative property lines, life and customised solutions,” Flandrin says.

“Demand for both property and casualty and speciality lines of business is increasing as the market is becoming increasingly sophisticated and regulated.”

The growth will be organic, especially in the segments where PartnerRe has strong expertise. But Flandrin expects there to be a significant shift in the reinsurer’s portfolio mix during the next two to three years, with the proportion of specialty products increasing to account for approximately 50% of the group’s Asian book.

New Singapore CUO

In a bid to keep up with the growing demand, PartnerRe has started to increase its local underwriting presence in Asia, doubling the number of underwriters it has in the region in the past 12 months. It has also created a new position of chief underwriting officer based in Singapore.

“This enables our clients to benefit from access to almost all our lines of expertise locally, as well as faster decision making and an enhanced consistency of services from PartnerRe across all lines of products and programmes,” Flandrin says.

The group is also focused on growing the life side of its business.

“We will see growth in both life and non-life. They are both equally important going forward and when we are moving specialist know-how to the Asia region, we are also doing that on the life side. We will have both life and non-life underwriters in Singapore and Hong Kong,” he says.

PartnerRe is active in all the major markets in APAC, including Australia, Japan, India, Taiwan, Korea and a number of South East Asian countries. It also has a representative office in China.

But the Asian market is highly diverse and this fact can make it a challenging region in which to operate. Flandrin says: “When you talk about Asia-Pacific it is a patchwork of countries with differences at all levels: economic, political, regulatory and even geographical.

“That is why for me operating in APAC is exciting, it is complex and very challenging.”

He explains that within the region there are both mature and high growth markets. The mature markets, such as Japan, have a low GDP growth, while the less developed, but high growth markets show growth in excess of 7% per annum.

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