Reinsurance

“Differentiation is at the core of our strategy.”

Moses Ojeisekhoba

CEO, Reinsurance

Strategy and priorities

Differentiation is at the core of our strategy. That differentiation is built on deep understanding of our clients. We create that understanding through our advanced interaction model and by focusing on building applied knowledge that helps address the challenges our clients face. We continue to systematically allocate capital towards the risk pools that we expect will grow over the long term in both Property & Casualty (P&C) and Life & Health (L&H) Reinsurance. We believe that broad macro factors such as demographic changes and the expected rise in global GDP will continue to expand these risk pools. These factors work in addition to the significant global protection gap which already exists and which continues to offer opportunities today, especially in high growth markets, which are also an area of focus.

Differentiation is at the core

We stay relevant to our clients by addressing their specific needs, and we can only do this if we spend sufficient time with them to understand their needs and buying preferences. Client segmentation is a foundational element of our differentiation approach and it is built on a deep understanding of our clients, facilitating delivery of tailored offerings. We interact with clients across all levels and functions, enabling strategic discussions between the right people at the right time. This dedicated delivery model — serving global, large, and regional & national clients — continues to be effective.

In P&C Reinsurance, we continue to differentiate ourselves through active cycle management and by managing capacity according to price adequacy. Our P&C portfolio is well balanced and generates attractive economic returns, including long-tail lines. We remain committed to our disciplined underwriting approach. The global protection gap remains a significant opportunity and we continue to work with our clients on solutions to close it.

The business generated in L&H Reinsurance remains strategically attractive for us because we see opportunity to deploy unique knowledge which addresses the needs of our clients in a differentiated way. New business continues to show attractive economic profit, while management of in-force business remains a key priority in delivering returns in line with our target. Our L&H portfolio has also been improved through greater product, duration, and geographic diversification.

High growth markets, a key focus in our strategy

Despite material foreign currency volatility for most high growth markets, our business has continued to thrive because demand for our products and solutions remains high. We remain disciplined in our underwriting approach and have built a diversified portfolio across lines of business and across focus markets of Brazil, China, India, Indonesia, Mexico, Sub-Saharan Africa and other parts of Latin America. From 2010 to 2016, reinsurance premiums in these markets grew at a CAGR of 15% in US dollar terms.

Our risk knowledge company approach in these focus markets has enabled new product launches, including the largest disaster insurance programme in China’s Heilongjiang Province, and the opportunity to be the sole reinsurer of natural catastrophe risks for the economic hub of Guangdong Province, also in China.

We remain committed to developing a strong local talent base to identify opportunities and drive sustainable growth and fully engage with regulators and governments to address challenges faced in these markets. Our workforce in our focus markets has more than doubled since 2011.

Technology is a key enabler

Technology plays an important part in developing solutions for our clients along the entire insurance value chain. We leverage technology to understand risks better, improve underwriting and pricing, and to increase efficiency of the value chain. To help our clients improve their performance, we have developed new solutions such as an end-to-end telematics platform, predictive analytics to identify non-smokers as well as mobile underwriting platforms for life insurance.

We also prioritise internal efficiency. One example is our P&C Business Management Intelligence tool, which leverages big data techniques for claims management. Another is our L&H Underwriting Document Analytics capabilities, which automate content identification and extraction to streamline handling of non-digital and unstructured data inputs. Technology is a critical catalyst for change which we will continue to use in order to address the needs of our clients more effectively.