Demands on Reinsurance Buyers Challenge Brokers To Up Their Game
LONDON and NEW YORK, September 13, 2010 � The growing complexity of reinsurance markets in recent years has ramped up demands on buyers and radically transformed the industry, according to global professional services company Towers Watson (NYSE, NASDAQ: TW). The company asserts that complex market data, Solvency II implementation, the dual challenges of accessing risk and distributing risk taking are generating the need for reinsurance buyers to achieve a holistic view of capital adequacy in order to invest for future profit and growth.
�New market opportunities are emerging in spite of exceptional regulatory and political intervention and the market is undergoing more consolidation,� said Ross Howard, COO Europe of Towers Watson�s reinsurance brokerage business. �A wide range of pressures has created a landscape that looks very different from that of only a few years ago. In this post-consolidated world, reinsurance buyers can derive huge benefits by working with brokers who are more prepared than ever to deliver a more integrated and complete service offering.�
For these reasons, Towers Watson sees the following as growing trends in the market:
- Holistic risk perspective: A fundamental change in the nature of reinsurance purchasing, planning, evaluation and marketing driven by Solvency II, is prompting insurers to consider a wide spectrum of holistic risks that go beyond traditional underwriting risk.
- Buying process under scrutiny: More rigorous testing and validation of the reinsurance buying process are determining its benefits compared with prior forms of solvency provision.
- Technology gap narrowing: Barriers to technology are falling as cutting edge software is forged by innovative broking houses outside of the �big three�.
- Brokers as risk advisors: Major international brokers will increasingly focus on improving their use of complex market data regarding placement of risk to provide specialized expertise to find the best price and terms in the market.
According to Towers Watson, in a world of increasingly unpredictable risks and challenging regulatory requirements, brokers now find themselves well placed to provide a sophisticated and reliable market overview of reinsurance purchasing, as well as to act as risk adviser and obtain better terms.
�Powerful trends have created a unique opportunity where successful brokers will be defined by their ability and commitment to exploit both scale and specialist markets,� said Howard.
About Towers Watson
Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company offers solutions in the areas of employee benefits, talent management, rewards, and risk and capital management. Towers Watson has 14,000 associates around the world and is located on the web at www.towerswatson.com.