Wiechers and his four colleagues in the Centre of Competence for offshore risks process around 300 insurance proposals per day
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"Models alone are not enough"

Wiechers’ answer to the question as to how he became an underwriter for offshore risks generally comes as a surprise to many people. “When I started at Munich Re in 1997, I didn't really know what an underwriter was”, Wiechers confesses. Up till then, he had worked as a plant engineer for the oil and gas industry and had had absolutely no contact with the world of reinsurance. In search of a new challenge, however, Wiechers decided to apply for the job as a specialist for offshore risks business – a leap into the unknown.


The leap proved successful because he dedicated himself to learning the ropes and gained an in-depth insight into the business of insurance and the tasks of an underwriter. “Unlike at other reinsurance companies, the engineers at Munich Re do not just write surveys and reports but actually play an active role in deciding whether a risk will be written or not. That is where the term underwriter comes from.” Wiechers and his four colleagues in the Centre of Competence for offshore risks process around 300 insurance proposals per day – a demanding workload, to say the least.

With the first hurdle cleared, fine-tuning is the next step

From the beginning, it was Wiechers’ job to develop models with which risks could be adequately assessed at an early stage. But models alone are not enough. Proposals that make it past the first hurdle need to be fine-tuned. Wiechers is particularly on the lookout for any unusual aspects of a risk, he calculates a risk-based premium and weighs up what restrictions or deductibles might be needed.

“Instinct plays a major part, too. If not, a machine could do the job", explains Wiechers. However, you have to have very sound reasons for ignoring the results of the models. “In the end, the client must be able to see and understand how the price was arrived at or why cover has been restricted.” There is usually not enough time to inspect all the projects on site. As is customary in this line of business, Wiechers and his team rely on specialist companies to do the job, companies that have the time to go into things in much more depth and follow them up if required.

Largest facultative offshore energy risk

Wiechers needs to liaise closely with the project managers for construction projects as large as the pipeline through the Baltic. “We find it very important to have warranty surveyors on hand to monitor the risks. They continuously check requirements and conduct safety assessments.” The challenge with Nord Stream was not so much the technology involved but rather reconciling the different interests of the consortium, banks, insurers and brokers. This required expertise and negotiating skills.

Even though Nord Stream has been the largest facultative risk in Munich Re's offshore energy sector to date, it did not give Wiechers any sleepless nights. After all, he has over ten years of experience in the assessment of such projects to fall back on. “Besides, we are well prepared should anything happen. We conduct workshops with our clients to simulate specific scenarios. This way everyone knows exactly how to respond in the event of a loss”, assures Wiechers.

Spare-time student

So what lies in store after Nord Stream? Wiechers admits that this project will be very hard to top. The Dii GmbH project to bring electricity to Europe from the deserts of North Africa is likely to eventually involve the offshore energy sector because of the undersea cables. However, that is still a long way off. Closer at hand is the South Stream pipeline through the Black Sea. And as if he did not already have enough to keep him busy, the father of three is currently finishing his Masters degree in stochastics, which he started around three years ago. "Despite the hard work involved, I would certainly recommend taking on new challenges in middle age", he says with a certain amount of pride. He believes his studies have helped him to maintain his focus on his main job. And that is the best way to keep Munich Re at the top of the offshore business sector.