Hannover Re sees good opportunities in ILS: CEO Henchoz

Hannover Re’s CEO says that the reinsurance company sees good opportunities in insurance-linked securities (ILS) and intends to leverage its strong position in that marketplace.

Speaking this morning in Monte Carlo at the annual Reinsurance Rendez-Vous event, Jean-Jacques Henchoz, the CEO of Hannover Re, highlighted the ILS market as an area of future growth for the company.

“In ILS, there are good opportunities for us a transformer linking the capital markets to traditional reinsurance,” Henchoz explained at the Hannover Re press briefing event.

Hannover Re is particularly active in the ILS market, sourcing a significant amount of capital for its own retrocession program from ILS investors, while also using its balance-sheet depth and rating to front and transform risk for ILS funds and investors.

Henchoz also said that, “The tailor made solutions and the ILS space, we also want to leverage that position going forward.”

Silke Sehm, Member of the Hannover Re Executive Board with responsibility for catastrophe XL, structured reinsurance, insurance-linked securities (ILS) and retrocession, provided an overview of the reinsurers activities in the ILS space, as well an outlook.

“We make use of the ILS market not only to obtain coverage for our own risk, as you know with our K-Cession, but we also transfer P&C and life and health risk for our clients to the capital market,” Sehm explained.

She added that, “This is what we are doing with our ILS division, and Jean-Jacques already mentioned we also have quite bespoke solutions, innovative solutions. This is what we are doing in ILS.”

Sehm went on to highlight the fronting for ILS business, in reinsurance and securitized products, saying this presents an opportunity for expansion to Hannover Re.

“The largest segment there is still the collateralised fronting business and furthermore, we were able to transfer several cat bonds to the capital markets for our clients on flood, windstorm, and also on earthquake.

“So, in both segments, collateralised fronting and also the cat bond market, we also see further growth,” Sehm explained.