Company profile: Deutsche Rück

Deutsche Rück, the German reinsurer based in Düsseldorf, reported a healthy set of annual figures for 2023 that saw gross premium income rise significantly by 16.8% to just under €1.8bn, while net premiums earned were up 18.3% at €1.2bn Group CEO Franck Schaar said that the group is “very satisfied” with this result, because it shows the reinsurer is achieving strong, profit-oriented growth not only in its domestic market of Germany, but also in international markets, notably Asia, the Middle East and wider Maghreb region and Latin America. Deutsche Rück emerged from its German homeland a decade ago to write wider European risks initially focused on central and Eastern Europe, and successfully established itself as a pan-European reinsurer Then the group looked further afield to internationalise and diversify its business further, and its focus in recent years has included the Maghreb region, the Middle East, Latin America and, of course, Asia where it commenced operations at the start of 2023. Following the publication of the reinsurer’s latest results, Tarik Aouad, head of Middle East/Asia markets at Deutsche Rück, told Commercial Risk Asia that the reinsurer had “outperformed” its business plans for the region so far. A key reason for this success is the group’s effort to properly understand local business cultures and explain its own German approach to doing business, he said. “Since we started writing business in Asia in January 2023, we have outperformed our business plan projections in terms of top and bottom lines so far. Key to success was our conviction that visiting these markets in person enhances mutual cultural understanding, so that we understand the markets’ business cultures and conversely the market understands our Deutsche Rück business values, which are rooted in the German business culture. This enabled building strong foundations of trust, long-term relationships and sustainability of the business in the first year already,” he explained. Aouad said that key focus territories and lines of business has been based on long-term relationships particularly focused on the SME segment in its core lines. The reinsurer has taken a typically German steady and service-driven approach. “Having started only in 2023 and guided by our strategy and guidelines, we began writing P&C treaties that fit our appetite and business values within selected markets in East Asia, Southeast Asia and the Indian subcontinent. We like businesses around the SME area because it fits our business tradition and our risk profile. Our business relationship is meant to be based on the long term, ideally diversified in terms of property, engineering, miscellaneous accident, marine, casualty and in the form of a balanced share across all treaties whenever possible. Step by step we learn more, and we continuously strive to improve or services.” Growth opportunities abound in Asia for insurers and reinsurers on the back of rapid economic growth, the digital transformation and increasingly savvy and risk-aware younger population, growth of the SME segment across the region and, of course, urbanisation and investment in infrastructure, said Aouad. “These markets are still untapped, with low insurance penetration, and so the P&C insurance market in the region offers great opportunities in various areas. In this regard, we are all experiencing rapid economic growth – compared to Europe – and the fast digital transformation in these countries. This is enabling insurers to reach a broader and increasingly educated young audience through online platforms and insurtech products,” he explained. “Other fields of interest are the rapid urbanisation and infrastructure projects, which present substantial demand for property and liability insurance. Additionally, the rising middle class and increasing wealth in the region is clearly boosting demand for insurance. Last, but not least, expanding SMEs create opportunities for consumer-based business insurance. These are the prospects we wanted to be part of when we entered the region,” continued Aouad. But despite these great opportunities for risk carriers, Asia also presents significant challenges, as elsewhere in the world. The key is to focus on the risk management credentials of the insurer and insureds to remain profitable while growing, explained Aouad. “Top risks in the region are clearly natural catastrophes such as earthquakes, storms, floods. Other risks to consider are in areas of technology (cyber, AI), geopolitics and economics. All these risks need a clear and comprehensive risk management strategy and a sound framework on how to make the insured and the insurance and reinsurance companies sufficiently resilient. For us, as an informed capacity provider, we strive to write only businesses that we understand and that is subject to fair and acceptable terms and conditions. Our figures so far confirm that this is our way to success in the region,” he concluded.

Company profile: Deutsche Rück

Risk management: The key to growth in Asia

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