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In the period 22 of October, 2017 up to 26 of October, 2017 our reinsurance manager Mr. Florin Andreescu has attended the annual reinsurance event taking place in Baden Baden, Germany where facts, results and most important trends in the insurance industry are disclosed and analyzed.

During this event there were carried discussions with the representatives responsible for the insurance markets in the Balkan region from the most important reinsurance Companies such as: Swiss Re, Hannover Re, Partner Re, Mapfre Re, Transatlantic Re, Axis Capital, XL Catlin, Sirius Re, R+V, Everest Re, Endurance Re, Sompo International, Chaucer Underwriting A/S, Trust Re.

Apart from the discussions related to the existent and potential reinsurance business, placed through Balkan Broker the following conclusions could be drawn:

Rates in the reinsurance market have fallen in the latest four straight years because of oversupply and a lower incidence of major natural disasters since Japan’s 2011 tsunami. That means buyers of reinsurance cover are under less pressure to increase coverage, while reinsurers are sitting on capital buffers big enough to warrant price concessions. This trend will be maintained for next year, but not in the same manner and extent for all of the reinsurance buyers.

Although for the time being the reinsurance capital is still on the high side compared to the amount of claims for the insured part of the natural catastrophes, the majority of reinsurers present in Baden Baden this year suggested that it’s time for the primary insurers to improve the prices and conditions at a level where the measurable effect on the P&L should be positive.

A similar message has been delivered regarding the Motor business, especially in respect of the MTPL in the CEE region where the profits of the primary insurers diminished in the previous years due to the increase of the number of attritional losses and of the severity of claims. This negative trend could be also seen in the decision of certain reinsurers (Aspen Re for example) to stop accepting business in some areas of the Balkan region as from 2018.

This means that the primary insurers who will not take measures to improve their activity and results will face a deterioration of the reinsurance conditions available for the renewals to come.