Building the reinsurer of the future
Very few global companies have weathered the tough economic conditions that the world has thrown at them over the years to become the global icons that they originally hoped to be. Yet, there are some companies who show the grit and resilience needed to do just that and become pioneers in their field.
Hannover Reinsurance (Hannover RE) is celebrating its 50th anniversary this year, and is embarking on an innovative project to create the reinsurer of the future. FAnews caught up with Achim Klennert, CEO of Hannover RE Group Africa, to find out more about this project and the future of the company in Africa.
Journey RE
“Journey RE is an international Entrepreneurship Competition that aims to create new innovative business models in the reinsurance market,” says Klennert.
The competition is being run out of Hannover, Germany. The company has identified four countries where innovation hubs will be established to participate in the competition. The four hubs are Berlin (Germany), Dublin (Republic of Ireland), Boston (US), and Johannesburg, each hosting two teams of three.
Participants in the competition will be encouraged to establish an innovative business plan for a reinsurance company of the future. These business plans will be presented to a panel, consisting of executive board members from Germany as well as members of the project team, who will make the decision as to who the winning team will be. There will be a € 50 000 prize for the winning team as well as a € 20 000 award for the second placed team.
A major coup
Being able to host one of the hubs in this competition is a major coup for South Africa and is testament to the innovative nature of the insurance market in the country. Klennert points out that Hannover RE did extensive research into all of the countries that it operates in and felt that these four hubs would be the best launch pad for the competition.
“Three percent of the company’s global turnover comes out of Africa. South Africa as a country is where Hannover RE probably has the highest market share of any country. We need to find a way to grow the profile of insurance on the African continent to ensure that this will grow in the future,” says Klennert.
He also had significant praise for South African insurance professionals, pointing out that a number of high level positions within the company’s global network are being filled by South Africans. This includes the recent appointment of a top level executive in India.
The true nature of value
Klennert points out that the true nature of the South African market is not purely based on the business acumen of the market, but also because of the innovation that it possesses. “A major strength of the South African insurance market is its people, its ideas and its resources. Over the years, the country has had its fair share of challenges and has managed to come out of the other end without significant damage,” says Klennert.
While being the eternal optimist, Klennert adds that the company is keeping a close eye on the country’s sovereign debt rating. “Reinsurance is an industry that is very ratings sensitive. Reinsurers can only sit marginally higher than a country’s sovereign rating and if South Africa gets downgraded to junk status, it will be more difficult for reinsurers to operate without additional support by respective parent companies as questions will be asked about the companies’ abilities to cover significant claims.”
However, Klennert adds that Hannover RE has been in the country too long and has grown with too many of the country’s challenges for the company to pull out. “We are committed to the local market and we are in it for the long haul. The company has proven its mettle over the past 50 years and we are ready to continue proving this going forward,” Klennert concludes.
