𝐀𝐧𝐝𝐫𝐞𝐚𝐬 𝐏𝐨𝐥𝐥𝐦𝐚𝐧𝐧
𝐌𝐮𝐧𝐢𝐜𝐡 𝐑𝐞… 𝐈𝐧𝐭𝐞𝐧𝐬𝐢𝐟𝐲𝐢𝐧𝐠 𝐩𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩𝐬 𝐚𝐧𝐝 𝐞𝐱𝐩𝐚𝐧𝐝𝐢𝐧𝐠 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐞𝐬
Mr. Andreas Pollmann, Client Management Executive at Munich Reinsurance Company’s Divisional Unit in the Middle East and North Africa (MENA), discussed in this interview the current situation of the world economy in general and the insurance sector in specific, following the spread of Covid-19 and the new work patterns it inforced. He also talked about Munich Re’s achievements during 2020 and its plan for 2021.
* 𝐂𝐨𝐯𝐢𝐝-𝟏𝟗 𝐡𝐢𝐭 𝐭𝐡𝐞 𝐰𝐨𝐫𝐥𝐝 𝐞𝐜𝐨𝐧𝐨𝐦𝐢𝐞𝐬, 𝐥𝐞𝐚𝐯𝐢𝐧𝐠 𝐛𝐞𝐡𝐢𝐧𝐝 𝐚 𝐡𝐮𝐠𝐞 𝐧𝐮𝐦𝐛𝐞𝐫 𝐨𝐟 𝐯𝐢𝐜𝐭𝐢𝐦𝐬 𝐚𝐧𝐝 𝐚 𝐥𝐨𝐭 𝐨𝐟 𝐦𝐚𝐭𝐞𝐫𝐢𝐚𝐥 𝐥𝐨𝐬𝐬𝐞𝐬…
𝐇𝐨𝐰 𝐝𝐨 𝐲𝐨𝐮 𝐬𝐮𝐦𝐦𝐚𝐫𝐢𝐳𝐞 𝐭𝐡𝐞 𝐞𝐟𝐟𝐞𝐜𝐭𝐬 𝐨𝐟 𝐭𝐡𝐢𝐬 𝐩𝐚𝐧𝐝𝐞𝐦𝐢𝐜 𝐨𝐧 𝐭𝐡𝐞 𝐫𝐞𝐢𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞 𝐬𝐞𝐜𝐭𝐨𝐫?
The entire industry – on a global level – is currently confronted with major COVID-19 uncertainty. At the same time, prior loss drivers, for example the loss trend in US casualty and low interest rates, still exist. COVID-19 has neither solved nor eased any of those topics but has added an additional layer of uncertainty.
The uncertainties in respect of claims either directly from COVID-19 or indirectly due to government lockdown decisions and the economic consequences will of course remain high, most likely also throughout 2021. For us at Munich Re, this will mean that we try to stay even closer to our clients in order to help them navigate through such times of uncertainty by providing stable and reliable reinsurance capacity that assists our clients in managing capital requirements and earnings volatility. Managing uncertainties and volatility is our daily business as a reinsurance company. For MENA specifically, we noticed it was important for insurers to quickly adapt to increased digital consumer requirements and it triggered questions around how to best service clients. We are happy to be able to support and guide with our expertise.
* 𝐂𝐨𝐯𝐢𝐝-𝟏𝟗 𝐢𝐦𝐩𝐨𝐬𝐞𝐝 𝐧𝐞𝐰 𝐰𝐨𝐫𝐤 𝐩𝐚𝐭𝐭𝐞𝐫𝐧𝐬, 𝐭𝐡𝐞 𝐦𝐨𝐬𝐭 𝐢𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭 𝐨𝐟 𝐰𝐡𝐢𝐜𝐡 𝐚𝐫𝐞 𝐰𝐨𝐫𝐤𝐢𝐧𝐠 𝐟𝐫𝐨𝐦 𝐡𝐨𝐦𝐞, 𝐫𝐞𝐦𝐨𝐭𝐞 𝐜𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐢𝐧𝐭𝐞𝐫𝐚𝐜𝐭𝐢𝐨𝐧…
𝐇𝐨𝐰 𝐝𝐨 𝐲𝐨𝐮 𝐞𝐯𝐚𝐥𝐮𝐚𝐭𝐞 𝐭𝐡𝐞 𝐰𝐚𝐲 𝐭𝐡𝐞 𝐫𝐞𝐢𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞 𝐜𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐢𝐧𝐭𝐞𝐫𝐚𝐜𝐭𝐞𝐝 𝐰𝐢𝐭𝐡 𝐭𝐡𝐢𝐬 𝐩𝐚𝐭𝐭𝐞𝐫𝐧 𝐨𝐟 𝐰𝐨𝐫𝐤?
Munich Re has proven to be a very digital company. The transition to working from home was smooth and fast. Of course, it is not the same to sit in front of a screen instead of meeting people and I and the entire Munich Re MENA team miss very much the personal interaction with clients.
But I have to say that even the remote renewal worked very efficiently from home or digitally form the Munich Re office as our clients and brokers seamlessly transitioned into digital working. I am looking forward to when we finally can meet again.
* 𝐂𝐨𝐮𝐥𝐝 𝐰𝐞 𝐩𝐨𝐬𝐬𝐢𝐛𝐥𝐲 𝐭𝐚𝐥𝐤 𝐚𝐛𝐨𝐮𝐭 𝐩𝐨𝐬𝐢𝐭𝐢𝐯𝐞 𝐢𝐦𝐩𝐚𝐜𝐭 𝐨𝐧 𝐭𝐡𝐞 𝐫𝐞𝐢𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞 𝐬𝐞𝐜𝐭𝐨𝐫 𝐞𝐬𝐩𝐞𝐜𝐢𝐚𝐥𝐥𝐲 𝐢𝐧 𝐭𝐡𝐞 𝐡𝐨𝐬𝐩𝐢𝐭𝐚𝐥 𝐚𝐧𝐝 𝐚𝐮𝐭𝐨 𝐬𝐞𝐜𝐭𝐨𝐫𝐬?
Due to Covid-19 and the restrictions there have been and are still less cars on the street and thus temporarily fewer losses. However, this is not a long-term trend and not the main trend shaping the results. As mentioned before, we still have many fundamental uncertainties overall in the economy.
For auto, we observe a higher demand to individualize policies. Consumers demand, expect and appreciate now flexible products that adapt to their changing habits, meaning they want to pay less when they drive less. The demand for pay-as-you-drive products is finally taking up- a trend we have anticipated for some years now and we are ready to implement further in MENA for our clients.
* 𝐇𝐨𝐰 𝐝𝐨 𝐲𝐨𝐮 𝐬𝐮𝐦𝐦𝐚𝐫𝐢𝐳𝐞 𝐭𝐡𝐞 𝐦𝐨𝐬𝐭 𝐢𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭 𝐢𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞 𝐥𝐞𝐬𝐬𝐨𝐧𝐬 𝐥𝐞𝐚𝐫𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞 𝐜𝐚𝐭𝐚𝐬𝐭𝐫𝐨𝐩𝐡𝐢𝐜 𝐛𝐨𝐦𝐛𝐢𝐧𝐠 𝐢𝐧 𝐁𝐞𝐢𝐫𝐮𝐭 𝐨𝐧 𝐭𝐡𝐞 𝐟𝐨𝐮𝐫𝐭𝐡 𝐨𝐟 𝐀𝐮𝐠𝐮𝐬𝐭? 𝐇𝐨𝐰 𝐝𝐢𝐝 𝐲𝐨𝐮 𝐝𝐞𝐚𝐥 𝐰𝐢𝐭𝐡 𝐢𝐭 𝐚𝐬 𝐚 𝐜𝐨𝐦𝐩𝐚𝐧𝐲?
It has been an extremely tragic event on 4 August 2020 and we shared our sentiment with our clients, friends and their families and partners. The event occurred next to a very tense economic, financial and political situation in Lebanon which has not improved so far. From day one, we stayed close to our clients and business friends in order to support, arrange and execute professionally in our role as a premium reinsurer with longstanding relationships and engagement in the market. We have been swift in making necessary arrangements to fulfill our obligations in line with international insurance custom and requirements. This tragic event has been a “moment of truth” for the insurance industry and we observe the strength and benefit of reputable players despite a very difficult claims settlement environment.
* 𝐖𝐡𝐚𝐭 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐭𝐡𝐞 𝐩𝐫𝐢𝐜𝐞𝐬 𝐚𝐧𝐝 𝐬𝐞𝐫𝐯𝐢𝐜𝐞𝐬 𝐭𝐫𝐞𝐧𝐝𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐫𝐞𝐧𝐞𝐰𝐚𝐥? 𝐄𝐬𝐩𝐞𝐜𝐢𝐚𝐥𝐥𝐲 𝐢𝐧 𝐥𝐢𝐠𝐡𝐭 𝐨𝐟 𝐭𝐡𝐞 𝐡𝐮𝐠𝐞 𝐥𝐨𝐬𝐬𝐞𝐬 𝐭𝐡𝐚𝐭 𝐭𝐡𝐞 𝐫𝐞𝐢𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞 𝐜𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐟𝐚𝐜𝐞𝐝 𝐝𝐮𝐞 𝐭𝐨 𝐭𝐡𝐞 𝐂𝐨𝐯𝐢𝐝-𝟏𝟗 𝐩𝐚𝐧𝐝𝐞𝐦𝐢𝐜?
Seeing the high uncertainty due to COVID-19 and that insurers are affected on both asset and liability side; insurers need to be prepared for further financial impacts. We are observing rising prices on both primary and reinsurance sides. For various reasons, we now see some players increasing their capital basis – either to bolster balance sheets or to take advantage of an expected market hardening. We do not expect the capital influx to change observable price trends.
We as Munich Re are well known for our consistent technical exposure pricing approach, which we apply also in the MENA region – as a consequence our clients can benefit from a consistent approach on a risk adjusted basis and where portfolios have a stable and aligned basis.
* 𝐃𝐨 𝐲𝐨𝐮 𝐭𝐡𝐢𝐧𝐤 𝐬𝐨𝐦𝐞 𝐫𝐞𝐢𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞 𝐜𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐰𝐢𝐥𝐥 𝐞𝐱𝐢𝐭 𝐭𝐡𝐞 𝐦𝐚𝐫𝐤𝐞𝐭 𝐚𝐬 𝐭𝐡𝐞𝐲 𝐰𝐨𝐧’𝐭 𝐛𝐞 𝐚𝐛𝐥𝐞 𝐭𝐨 𝐚𝐝𝐚𝐩𝐭 𝐭𝐨 𝐚𝐥𝐥 𝐭𝐡𝐞𝐬𝐞 𝐜𝐡𝐚𝐥𝐥𝐞𝐧𝐠𝐞𝐬?
Yes, this is what can be observed. There are shifts happening, especially for markets that are under financial, rating and solvency challenges.
Companies that had imbalanced books in terms of region or strategy, are now ever more under pressure. Munich Re is a well-diversified company all over the world, and can spread the risk on a global scale. Our commitment in the markets is sustainable and now is our time to showcase this ability.
* 𝐇𝐨𝐰 𝐝𝐨 𝐲𝐨𝐮 𝐬𝐮𝐦𝐦𝐚𝐫𝐢𝐳𝐞 𝐲𝐨𝐮𝐫 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐟𝐥𝐨𝐰 𝐚𝐧𝐝 𝐫𝐞𝐬𝐮𝐥𝐭𝐬 𝐢𝐧 𝟐𝟎𝟐𝟎?
What we are seeing is a trend towards flight to quality capacity and panel reassessments. Munich Re as a premium reinsurer has succeeded in expanding its strategy besides the traditional fields into the digital arena. Through our extensive investments into data science and IT infrastructure over the past years, we were able to intensify long-term partnerships and were able to win new clients. I am particularly proud we have established Cyber and Telematics as trending setting topics in the MENA region. Together, we are definitely spearheading and an example for other regions in the world.
* 𝐘𝐨𝐮𝐫 𝐩𝐫𝐞𝐩𝐚𝐫𝐚𝐭𝐢𝐨𝐧𝐬, 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬 𝐚𝐧𝐝 𝐩𝐥𝐚𝐧𝐬 𝐟𝐨𝐫 𝟐𝟎𝟐𝟏?
Munich Re is keenly focused on the digital revolution taking place, with all of the attendant opportunities and risks it presents. We are looking to work with clients to navigate the changing world of risk and find opportunities to grow in this space. This could mean introducing them to new technologies or platforms as potential strategic initiatives. Or it may mean co-developing new products with clients to meet an emerging need. Our goal is to work with clients to help them shape the future of the industry, and to own the disruption that is happening in the market.
Our aim is to expand and develop even further the MENA markets together with our clients, by moving forward with the planned projects and initiatives. After we hopefully all can get access to the COVID-19 vaccination we want to see the clients again of course! Hope to see you all again in 2021!
