By CYRIL TUOHY, managing editor of Risk & Insurance®
Among the more unexpected--and welcome--developments at the annual Rendez-Vous de Septembre of the world's most powerful reinsurance companies in Monte Carlo last week was the launch of the Global Reinsurance Forum (GRF).
For sister reinsurance interests, from the powerful Washington, D.C.-based Reinsurance Association of America to the Bermuda-based Association of Bermuda Insurers and Reinsurers, the creation of the GRF was welcome news--more lobbying organizations usually mean a louder voice.
"Today, there is no such global representation for the reinsurance industry with the clear mandate to promote a regulatory framework that facilitates global risk transfer through reinsurance and other reinsurance-linked capital solutions," said GRF Chairman Dennis Kessler, CEO of the French reinsurer SCOR.
NO PHYSICAL PRESENCE
Yet, even as the GRF executives were touting their newfound voice to seek common positions on tax, solvency, accounting and other rules and avoid being tarred with the same regulatory brush as banks, there was reason to doubt just how effective the GRF will ultimately be.
The GRF, after all, has no staff, no lawyers, no policy analysts, no lobbyists, not even a permanent address. The GRF maintains no offices, not in London, nor Hamilton, nor Paris, nor Washington, nor Brussels, nor Monte Carlo.
The GRF, said Kessler, will simply consist of a meeting once a year in Monte Carlo during the Rendez-Vous, when CEOs of the top reinsurance executives and buyers meet to discuss upcoming renewals..
Indeed, Kessler almost seemed proud of the fact that the forum had no physical address.
"You will have a hard time to find us, but we want to be reactive to issues," he was quoted as saying.
Even the news briefing announcing the creation of the GRF was held on the fringes of the main attractions in Monaca, the high-powered meetings held between reinsurance and insurance company clients.
Can and should the GRF be taken seriously?
GRF's 11 founding members are a high-powered group, certainly: With CEOs of Gen Re, Hannover Re, Lloyd's, Munich Re, PartnerRe, RGA, SCOR, Swiss Re, Toa Re, Transatlantic Re and XL Capital making up the GRF, in the reinsurance world, it doesn't get much more powerful than that.
Kessler insisted that the group would remain relevant as it seeks to protect the interests of reinsurers and represent industry positions before international regulatory and supervisory bodies.
Global regulators are suddenly under more pressure than they were just a few years ago to tighten standards in the wake of the financial crisis. The Obama administration made no secret of its intent to crack down on companies that use offshore domiciles as tax havens.
The GRF is also expected to promote worldwide, open and fair frameworks for the development of reinsurance markets as reinsurers compete with banks and the capital markets for global clients.
"Banks have got real problems but our industry is in good shape and we are very keen to make sure that people understand these are two different businesses," said Peter Levene, chairman of Lloyd's, speaking to Reuters in Monaco last week.
Lloyd's CEO Richard Ward said there's no reason global reinsurers should toot their own horns once in awhile.
"Politicians of all parties should recognize the contribution that the reinsurance sector makes to the economy," he said, in an interview with Risk & Insurance® correspondent Graham Buck last week. "The industry could and should be a little more vocal in differentiating itself from the banking sector."
What is it going to take for a CEO to join the GRF? For starters, the companies they run cannot be state-owned, the companies must also operate globally, and reinsurance needs to form the core business of their firms, Kessler said.
September 14, 2009
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