Reinsurance Trade Group Seen By Some As Cartel
Is this reinsurance trade group a cartel? The Global Reinsurance Forum reached it’s first anniversary in September of this year. Launched by 10 major reinsurers, the forum’s aim is to be a lobby group that’s goal is to shape international regulatory and policy issues.
Though vigorously defended, this forum has been alleged to be little more than a cartel. Members of the GRF say that the forum’s first year has made great progress by promoting the role of reinsurance as a sort of financial shock absorber to both regulators and politicians.
Traditionally, Bermuda and London have always been hubs but new sites such as Zurich and Dublin have challenged their premier positions. Some have even dubbed Zurich as “the new Bermuda.”
There does seem to be agreement that Bermuda at least will remain a key reinsurance center, even though there have been a few defectors. Bermuda’s status, however, will depend on no major deterioration of it’s favorable political and tax environments.
London’s insurance market leaders realize that London must also do more to accentuate it’s strengths. While the London insurance market leaders have more clarity on the goals and how to achieve them, they have not yet reached the efficiency that it will take to hold off the new contenders.
Whether current reinsurance pricing levels are still adequate is a question that has caused differences in opinions even within the forum. Some industry giants take the position that they are not. Others in the big ten believe the industry is just fooling itself.
Information taken from the November 2010 issue of Risk and Insurance Magazine.
According to the Global Reinsurance Forum website,
The Global Reinsurance Forum (GRF) is composed of thirteen leading global reinsurers; its main objective is to promote a stable, innovative, and competitive worldwide reinsurance market. The members of the GRF, all private companies, are Everest Re, Gen Re, Hannover Re, Lloyd’s, MAPFRE Re, Munich Re, Partner Re, Renaissance Re, RGA, SCOR, Swiss Re, Toa Re and XL Capital. The GRF secretariat is managed by The Geneva Association.
In support of its main objective, the GRF helps to define industry positions on regulatory, legal, tax, and accounting developments. It represents these positions in discussions with relevant regulatory and supervisory bodies (especially international ones). It works to advance understanding of the value of reinsurance to the economy, and encourages an open and fair international framework for the development of reinsurance markets.
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