The reinsurance architect
What Mary Forrest enjoys most is running a business – any business, as long as she’s convinced of its potential for profitable growth. Fortunately for Munich Re, Mary chose the insurance industry, but her career path was by no means clear from the start. She began her studies in philosophy and mathematics and to this day remains passionate about art, design and architecture. At the suggestion of a math professor, Mary shifted her focus to actuarial science – a choice that led her to Munich Re and a highly successful career spanning more than 20 years.
Today, as Head of Munich Re North America, Life, Mary believes in building individual value propositions with the creativity and structure of an architect: “First, we have to understand the risk and our clients. Only then do we actually go about defining our value proposition.” This approach is only possible with close client relationships and top market knowledge, strengths Mary and her teams have spent years developing. The North American Life offices conduct more than 1200 client visits annually, concentrating on top life insurers. This helps build relationships at all levels – from junior pricing actuaries to CFOs and CEOs. Mary explains: “We want more information, so we focus not only on the reinsurance decision-makers, but anyone who is directly involved in business.”
Mary and her colleagues also cultivate a deep understanding of current regulatory requirements and – even more importantly – upcoming changes. This enables them to deliver proactive support when clients find themselves in the path of oncoming legislative challenges. Another key pillar in Mary’s architectural approach to life reinsurance deals is her team-building strategy. By systematically surrounding herself with the best people she can find, people who also have passion and commitment for their work combined with a very high level of technical expertise, Mary has created specialised teams for different North American markets. This adds up to a key competitive advantage, especially in light of the diversity and complexity of the various business environments Munich Re North America, Life, encounters in Canada, USA and the Caribbean nations.
More than 450 professionals based in Toronto, Montreal, Atlanta and Chicago, follow Mary’s blueprints to construct tailored solutions according to individual client needs and regulatory frameworks.
Different markets, different strategies
In Canada, the challenge is to offer attractive concepts in a changing environment: a very mature market with exacting capital requirements, the country traditionally has one of the highest reinsurance ceded rates in the world, yet there is a clear trend toward increased retention among primary life insurers. Here, expertise in structured reinsurance, or capital management solutions has proven a key asset. Munich Re has won 19 of the 25 structured reinsurance deals that have taken place in Canada and has seen positive experience variances for 20 years in a row. The largest national life insurance market, the US is characterised by relatively low capital requirements and much larger numbers of reinsurers and primary insurers. In contrast to its northern neighbour, US regulatory frameworks vary from state to state. Combined, these dynamics create a challenging and very competitive environment, where risk management and pricing discipline are essential. In the US market, Mary sees opportunities for growth, but takes a balanced approach aimed at sustainable business. “I don’t ever want any of our successors to have to strengthen reserves for business that we put on the books today,” she explains. Since 2007, MARC’s disciplined Underwriting and Pricing approach have contributed to increased profitability, increasing VNB by 40% while new business volumes are up by 13%. MARC has also been successful in eliminating poorly performing accounts.
Across North America, Mary expects regulatory and accounting changes to open up opportunities. She sees Munich Re as well positioned to dynamically adapt, embrace change and be first to market with innovative solutions. The results in both markets speak for themselves, and Mary can be proud of what she has helped to design and build: in Canada and the US, Munich Re has achieved industry leadership in large-deal life reinsurance and continues to leverage the ability to offer major capacity to generate more business from key clients. Keeping ahead of developments and maintaining this lead in shifting environments will demand resourcefulness, something Mary Forrest actively cultivates in her staff. “I receive a lot of satisfaction in challenging status quo in order to create a collaborative and creative environment,” she says. “Knowing what I now know about myself, I could have been an architect but I am finding great satisfaction in the career path I have taken.”