Linking reinsurance to Solvency II

23 June 2015 — Alexandru CIUNCAN
The role of the reinsurance broker has changed during the last year and Solvency II has been a major driver in that change. Retention management is now crucial because it is linked with the risk capital of an insurance company, Hamish DOWLEN, Executive Director, WILLIS Re, UK, explained during "IIF - Property Insurance in a Stormy Era" conference in Munich.

In 2014, WILLIS Re initiated a survey among European insurance companies in order to discuss the rising importance of the risk appetite concept and how this influencing reinsurance decisions is and how to prepare for the Solvency II framework.

The findings showed that Solvency II changes the behavior of insurance companies with more focus being put on capital management and risk appetite and reinsurance is one of the tools that can be used to optimize the use of capital by an insurance company.

Also, there is definitely a huge increase in appetite in the European Union by reinsurers to get involved into the market and a consolidation of reinsurance buying while there will be continuing interest to invest in Europe in the insurance market by people from outside the European Union.

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