Tailor-made approach paying off for Newline Germany

As the German risk and insurance management community gathers for the GVNW’s annual Symposium in Munich, CRE’s Adrian Ladbury interviewed Manuel Wirtz, CEO of Cologne-based Newline Europe Versicherung, about his strategy and the state of the market. Adrian Ladbury (AL): How has the Newline Germany business grown and developed since its establishment in Cologne? What were the main goals and objectives and to what extent have these been achieved? Manuel Wirtz (MW): This year we celebrated our fifth anniversary in Cologne. I can remember the first months after the foundation well: a large, empty office space, two rented desks and a coffee machine. In January 2017, things really took off with three colleagues and we immediately wrote our first business – it was a participation in a large German liability programme. The first years were characterised by building up the team and expanding the business organisation. Today, we employ more than 20 people in underwriting, claims and staff functions, and I am extremely proud of them. When I see how dedicated they are to our clients every day, I know that we are doing the right thing here and have found our place in the German insurance market. Probably the most important event in these first five years was our licensing as a property and casualty insurer in 2019, when we ceased to be a branch and became a German insurance company under the supervision of BaFin. Then came the unforeseen challenge of the pandemic. During this time, our team did everything in its power to ensure that we maintained our service and were always there for our customers, despite the lockdown and working from home. AL: What is Newline’s wider strategy for Europe in Germany and elsewhere? What is the growth plan? MW: Our approach and part of our mission statement is: ‘maximising underwriting profitability’. This applies not only to us but to the entire group. For us, this is not a written-down mission, but lived practice. Although 2021 was another very expensive year for the global insurance industry, we managed to report an underwriting profit as a group. We are able to do this by having a clearly defined risk appetite and by following a consistent and disciplined underwriting approach. Our consistent bottom-line approach is reflected in our combined ratio, which has now been below 100% for ten consecutive years. These good underwriting figures ultimately have a positive impact on our financial strength, which directly benefits our policyholders. For us, there is nothing more important than being able to pay claims in the long term. But it should also be mentioned that without our dedicated team, the business plan for Newline in Germany would only be a dust collector in the filing cabinet. Also, in the future we want to attract talented people who enjoy contributing their own ideas, making decisions and building a specialist insurer. So, one of our most important goals is to remain an exciting employer. We are definitely in growth mode and want to expand our portfolio in all underwritten lines and extend our reach to other European countries. We regularly receive positive feedback from the broker community about our service mentality. We are committed to maintaining this service as our business grows. AL: What strategy did Newline Germany pursue in difficult times during the past few years? MW: We see ourselves as a specialty insurer for industry with a focus on liability products. This ranges from public and product liability to D&O. We are often praised by the brokerage community for our versatility and, at the same time, for our niche policies. Last year, for example, we insured more than 700 Covid-19 trials in the area of human clinical trials coverage, and at the same time provided insurance capacity for 80% of IPOs in Germany through securities prospectus coverage. We have a clearly defined risk appetite and write the business in which we have experience. Our aim is always to provide tailor-made business, and it is precisely this service that is so highly valued. Our employees are experts in their field. We want to maintain all this in the future. AL: How did you react to the rapidly hardening market, particularly in key lines such as financial lines, D&O and cyber? Did you see this as an opportunity? MW: Yes. What we have seen on the part of D&O insurers in Germany during the past two years has been nothing more than a catchup effect from the exponentially increased liability risks facing directors during the last decade. As insurers, we have now had our claims experience within D&O insurance and are catching up with the underpricing. Nevertheless, the premium level here is still far below the US or London market. Not to mention the above-average range of conditions in Germany compared to other countries. The German market therefore continues to provide high-quality D&O insurance cover. It becomes difficult when the market is no longer able to provide the desired capacity. We have been able to fill many gaps with our capacity here in the past and want to continue to do so. The financial lines sector is a growth market for us. AL: What could and should brokers and risk managers do to ensure that their coming renewals are as painless and efficient as possible? MW: It is certainly no secret when I say that transparency and keeping promises are the key factors to a well-functioning partnership between client and insurer. Insurers need to disclose their information needs as early as possible and engage in an open dialogue with brokers and risk managers. We have had the best experience with annual risk dialogues that always take place on the same date. The underwriters have the meeting firmly in their calendars and this ensures long-term planning security on both sides. Brokers and insurance carriers really have a joint responsibility towards policyholders. In the long-term interest of clients, we should move away from the constant hardening and softening market cycle, and be transparent with regard to the loss ratio and the resulting requirement for premium. AL: What is your outlook for the German industrial insurance market at coming renewals as the GVNW gathers for its annual Symposium? What can customers expect? MW: The financial lines segment is now visibly moving into a phase of consolidation after a two-year period of hard market. Market-wide premium increases and reductions in coverage are not to be expected. However, with a looming global recession and many other challenges – such as the energy crisis, supply chain disruptions, ESG litigation etc – always resulting in a higher liability for managers, a soft market is not in sight. In the area of general liability, the trend towards a tougher market continues for exposed risks. In addition to a slight price increase, there are capacity reductions and adjustments to deductibles. This mainly affects automotive suppliers, the pharmaceutical industry and food production, but to some extent also the chemical industry. Continuing inflation will lead to higher claims costs. This will also have to be taken into account in the premium determination.

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