Reprinted from the Intelligent Insurer, October 24 2022.
European reinsurers are as keen to embrace online reinsurance pricing and placing as their peers in the rest of the world – and even have an advantage because of the greater frequency of face-to-face contact reinsurers and cedants have in the market.
That is the view of Sean Bourgeois, chief executive officer of Tremor, the online reinsurance pricing and placing platform, which has unveiled its Reinsurer Product Council comprising eight global reinsurance companies and insurance-linked securities (ILS) funds representing nearly $100 billion in capital.
Participating companies include a cross-section of major US, Bermudian and European reinsurers as well as alternative capital providers. About one third of the council are European reinsurers. Some 130 reinsurers signed up to Tremor. Bourgeois says that all the major European reinsurers participate on Tremor, including 25 traditional reinsurers and alternative capital providers, and over 75 percent of Lloyd’s capacity.
“We do not see a major difference between reinsurers across various regions – this is one of the nice things about the industry, no matter where you are, reinsurers all speak a similar language,” Bourgeois said.
“In general, European cedants have embraced Tremor and appreciate the connectivity Tremor offers to their preferred trading partners to make the entire process more price and cost-efficient. European cedants tend to have more direct contact with their trading partners and this helps facilitate discussion about the benefits of Tremor for all parties and makes transactions placed on Tremor easier because of this.”
He argues that modern reinsurers know that the capital markets have changed profoundly over the past 10 to 20 years, and they see the efficiencies many markets have achieved with modern trading technology.
“Reinsurers building sophisticated portfolios appreciate the precision in authorising capacity that Tremor offers, along with contract certainty, speed of process and less time between authorising capacity and receiving a line. They are also governed by transparent trading rules, which is mostly not the case in a traditional placement process.”
He stresses that Tremor does not replace face-to-face relationships – even in the most advanced capital markets, relationships exist and persist, he notes. “Our role is to supercharge these trading relationships with technology. Cedants pricing and placing reinsurance on Tremor select their reinsurance trading partners and there are controls in place should they want them to manage how capacity is allocated to preferred partners,” he said.
“Reinsurers have control over exactly how they authorise. Our job is to manage the ‘last mile’: relationships set the table, Tremor allows buyers to make better decisions with real, comprehensive data. We think it’s a perfect partnership and the ideal model to power the future of reinsurance trading, and we feel Europe overall is a particularly exciting opportunity for us.”
He says the business continues to see growth year over year in Europe. “We are looking forward to spending more time in the market next year and continuing to grow as the market continues to evolve and become more dynamic.”
The product council will meet quarterly as a group for a progress update on platform activity, a review of aggregate market data, feature development progress and to discuss the near- and longer-term product roadmap for the platform. In addition, the council will have the opportunity to meet with Tremor’s product team and executive leadership between meetings on a direct basis to address specific ideas and opportunities.