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PROFILE MARKET CHALLENGES YOUR BENEFITS ABOUT CUSTOMIZED PORTFOLIO SOLUTIONS CONTACT Tough capital market conditions all over the world present the insurance industry with new challenges realising opportunities means thinking outside the box. With investment returns remaining low, assetliability management has come under considerable pressure. Consequently, the cost of maintaining the required capital associated with loss reserves can threaten profitability and competitive strength. Retroactive reinsurance is a powerful tool for mastering an array of risk management and capital management challenges. In Munich Res Customized Portfolio Solutions (CPS), you have at your side a specialised team that knows your market and understands your needs.

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Market challenges
In todays difficult investment environment, opportunities that offer sufficient security as well as promising returns are scarce or non-existent. Low investment returns coupled with claims inflation threaten to undermine profitability, especially in long-tail business. At the same time, qualitative and quantitative demands on risk and capital management have risen, while supervisory authorities, rating agencies and investors expect greater transparency and efficiency. It all adds up to tremendous pressure on primary insurers to optimise their risk and capital situation. And it puts the focus on technical reserves both for ongoing business and for classic run-off and the investments that cover them.

Your benefits
The potential benefits of a retroactive reinsurance solution for your company are as individual as your position, situation and goals. Typical positive effects include reduced reserve risk, increased own funds, protection against adverse developments, reduced asset/market/investment risk, reduced asset-liability mismatch risk, and reduced timing risk or virtual finality by setting a reasonable limit.

Here are some specific client needs and targeted responses: Need: Capital relief / Capital efficiency

Response: Retroactive reinsurance that helps to significantly improve key figures for various capital requirements under RBC, S&P, AM Best, Solvency I, Solvency II or other regional solvency regimes. Whether you are seeking to explore capital relief or other ways of boosting your capital efficiency, a specially structured retroactive cover may address your needs better than other financing or prospective reinsurance models Need: M&A Protection / Optimisation Response: Retroactive reinsurance to take over the risk of materialisation of significant adverse developments in the portfolio and cover undesired lines of business. From freeing up capital for acquisitions to ring-fencing run-off liabilities and enhancing the predictability of your balance sheet stability in cases of sale, retroactive reinsurance can be instrumental in your M&A activities.

Need: Balance sheet certainty Response: Retroactive reinsurance that reduces reserve volatility and hence has a stabilising effect on the total balance sheet, including the profit and loss account. Our solutions improve predictability for potential investors.

Need: Strategic repositioning / Exit solutions

Response: Retroactive reinsurance to take over existing run-off liabilities, setting free resources and capital to be used for strategic purposes. It enables you to concentrate on your core business and growth initiatives. By freeing up capital, our solutions give you manoeuvrability to invest in new business, acquisitions, share buy-backs and other initiatives.

Need: Back-up and improvement of historic reinsurance Response: Retroactive reinsurance that can replace commuted long-tail treaties, offering flexibility in reinsurance programme placement and in securing your net liabilities.

Customized portfolio solutions

In Munich Re Customized Portfolio Solutions, you have a team of experienced actuarial, financial and strategic experts at your side. We combine the global reach, knowledge and financial strength of an internationally leading reinsurer with deep insights into local markets. Based in Munich, the team has been developing highly efficient retroactive and capital management reinsurance concepts since 1998. As Munich Res Centre of Competence for retroactive reinsurance, we are responsible for underwriting non-life solutions on a worldwide scale. Based on your portfolio and strategic goals, we will work with your companys top decision-makers to structure a high-performance retroactive solution precisely to your risk management and capital management needs. We offer full risk-transfer reinsurance products that combine the benefits of a loss portfolio transfer (LPT) and adverse development cover (ADC). Our comprehensive, consultative approach gives you the big picture, along with complete cost-benefit transparency. Your advantages at a glance: Effectiveness: Retroactive reinsurance is a powerful capital and risk management solution, either on a stand-alone basis or in combination with other measures. Flexibility: Coverage (attachment point, limit, etc.) can be flexibly geared to your needs. Sustainability: The effect of a retroactive cover on your capital position will be immediate and sustainable. Protection: On top of providing capital relief, retroactive reinsurance ensures protection against potential adverse reserve development. Continuity: With all claims handling activities remaining in your hands, you continue to be the one that interacts with your clients.

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Retroactive Reinsurance
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