The process of building up Munich Re’s presence in the Latin American marine market took on a new dimension with the establishment of the Global Marine Partnership hub in Bogotá, headed by Michael Yeats. Since then, we have significantly increased our market penetration, visibility and relevance across the region. In addition, we have continued to grow our top-line, for example, achieving facultative and treaty placements in areas where we were previously not represented.
During this period, we have seen the Latin American insurance market grow and mature further. Although overall penetration remains low in global comparison, at €245 in premiums per capita in 2017 as compared to €2,879 in Western Europe or €3,513 in North America, Latin America’s insurance sector is showing vigorous and accelerating growth. Gross written premium in property & casualty grew by 2.3% in 2017 and 3.7% in 2018, with growth for 2019 projected at 4.1% and a CAGR calculated at 3.5%. These figures exceed expectations for Western Europe or North America, where 2019 growth is projected at 1.8% and 2.1%, respectively. This translates into big opportunities for early movers and niche players in the market, and Munich Re is committed to supporting clients in profiting from the situation. [source: Munich Re Economic Research]
Over the past three years we have made a lot of new contacts and raised expectations. Now we’re in a strong position to follow up and fulfil expectations with targeted lighthouse projects.
The successes over the past years are, to a large extent, thanks to the outstanding work of the team, whose members have travelled and met with primary marine insurers tirelessly. Michael Yeats and his marine colleague Henrique Cabral have also served as Board Member and Committee member, respectively, of the Asociación Latinoamericana de Suscriptores Maritimos (ALSUM). This important marine insurance organisation is a key forum for discussion, learning, consultation and the exchange of information for maritime insurance across Latin America, and the team’s involvement has helped to consistently build up Munich Re’s presence in the region’s marine market and support open dialogue among stakeholders.
Now that Michael has opted to move on and assume a new role within Munich Re (Group), we’re happy to have won Henrique Cabral as the new head of the Latin American marine hub and Senior Marine Production Underwriter. “Over the past three years, Henrique has been a key player at Michael’s side,” says Thorge Scheel, Head of Marine Underwriting Section. “He’s a perfect fit to follow in Michael’s footsteps, and we’re more than confident he will continue to work toward our goals with the same outstanding level of professionalism and enthusiasm.”
While the Bogotá offices will continue to serve markets in Colombia and elsewhere, the marine hub will migrate to São Paulo, Brazil, where Henrique is well established. The move is a case of “follow the talent”, and by no means a decision against Bogotá as a business location for Munich Re. At the same time, as Brazil is the region’s largest market, São Paulo is also an excellent location. Our role as sponsor and strong supporter of ALSUM will continue, with Henrique Cabral succeeding Michael Yeats on the organisation’s board. In addition, Facundo Cardello, who is a cargo specialist, will join the ALSUM Cargo Committee and Carlos Duran will support the Hull Committee.
We are happily supporting ALSUM in educating and uniting marine underwriters throughout Latin America.
Global Marine Partnership has defined a number of key initiatives to further enhance our support for marine insurers, brokers and other stakeholders in Latin America. These include expanding our cooperation with independent underwriting agencies in facultative business in Brazil, with a specific focus on cargo.
Above all, we are partnering more closely than ever with clients on innovation projects. Here, we emphasise flexibility and our commitment to providing solutions to the challenges our clients face. As Henrique Cabral puts it, “Just to offer another cargo quota share or cargo XL is fine, but not exciting. We want to deliver something that solves a real problem for the client – and actually relieves pain.” Flexibility is one of the advantages of the Global Marine Partnership, which enables networking of special capabilities and knowledge. For example, the Munich Re Syndicate is specialised in providing capacity for niche risks and we have third-party administrators (TPAs) in place to provide solutions for special risks. At a time when many London syndicates have recently adopted very strict terms or even withdrawn capacity from marine business, Munich Re has stayed in and remained available to primary insurers needing support for yacht, cargo and hull business.
With punitive international trade tariffs and a slowdown in China’s economic growth putting a damper on the worldwide flow of goods, marine insurance will remain a highly demanding business for the foreseeable future. In Latin America, growth opportunities must also be seen against the backdrop of uncertainty regarding political developments in some countries. At Munich Re, we remain vigilant but decidedly optimistic – and committed to supporting the Latin American marine market in mastering challenges and capturing opportunities.