‘Deutsche Rück to focus on small and medium-sized insurers in Asia’
September 26 2022 by Mithun Varkey
German reinsurer Deutsche Rück will focus on building a portfolio of standard property and casualty treaty business from small and medium-sized local and regional insurers in Asia, said Tarik Aouad, managing director for Middle East and Asia.
“We are targeting countries in South Asia, South-East Asia and East Asia. We are concentrating on standard property and casualty treaty business, with a consistent focus on fair profitability. We will enter the markets as a financially strong capacity provider with a special appetite for treaties from local and regional insurers,” said Aouad.
The carrier will operate its Asian team from its Düsseldorf office in Germany, relying on its own network of brokers, “but at the same time we will certainly work with local brokers as well,” he said.
“Right at the start, we do not entertain country preferences. Our focus will be on forging lasting business relationships built on mutual trust, wherever the clients are located in the region. The pace will not be simultaneous in all countries and with all business partners. This will depend on the respective market opportunities,” said Aouad.
“Getting established in these markets and with these clients is a gradual process, and there will certainly be a learning curve for us as well,” he added.
The company is not targeting Australia at the moment as it is focused solely on the opportunities in the emerging Asian market with no plans for further expansions so far.
“We consider the markets in Asia as the future engine of worldwide economic growth as households are increasingly accumulating wealth and knowledge while we see a rapidly growing middle class. We regard these positive economic developments combined with the relatively low degree of insurance penetration as a great potential for profitable expansion and further geographic diversification of our portfolio,” he said.
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“We will enter the markets as a financially strong capacity provider with a special appetite for treaties from local and regional insurers.”
Tarik Aouad, Deutsche Rück |
While Aouad declined to divulge the company’s GWP targets from Asia, he said, “What is important at this point of time is establishing long-term, mutually profitable client relationships that are made to last . . . Getting established in these markets and with these clients is a gradual process, and there will certainly be a learning curve for us as well.”
The carrier, which announced its expansion into Asia earlier this month with an eye on the upcoming renewals in 2023, is not awaiting any regulatory approvals.
Achim Bosch, a member of the company’s board of executive directors, said in the company’s release, “The market entry in Asia is a logical step in Deutsche Rück’s strategic international expansion in the non-life reinsurance lines and will contribute to the diversification of our portfolio.”
For the 2021 financial year, the reinsurer’s combined ratio was 101.1% deteriorating from 95.9% in the previous year, according to its annual report. It wrote gross premiums of €1.39 billion (US$1.36 billion) in 2021 up from €1.21 billion in the previous year and posted a net profit of €3.5 million down from €9.7 million in 2020.
Founded in 1951, Deutsche Rück is an international multi-line reinsurer focusing on property and casualty. It has been expanding its presence across the world entering the Latin American market in February last year writing P&C business. It had started writing risks in the Middle East since September 2020.
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