The present low interest rate environment in a number of countries has a profound influence on life assurance. Although it is not clear yet whether we will see a repetition of a Japanese scenario with a prolonged continuation of low interest rates, there is no doubt that the present situation already has an impact on the existing book of life policies. Furthermore, the question arises whether it will be possible to continue providing long term guarantees in the future. The planned introduction of a risk based solvency regime (such as Solvency II) has a direct impact on this question.

The third meeting of the Karel’s Club looks at developments in reinsurance in general and at the role of the reinsurance industry in the development of alternative forms of risk transfer, benefiting from the input of a number of key experts in the field.

The discussion will focus on issues such as:

  • What are the likely regulatory changes in the near future? How will they affect the reinsurance industry? How should we deal with collateral requirements? Will the market fundamentally change if the collateral requirement is removed?
  • Will the reinsurance industry become more attractive as an investment opportunity because of the low interest rate environment?
  • How will insurers deal with reinsurance as part of their risk mitigating strategy? Is Solvency II introducing a golden opportunity for reinsurance?
  • How will the reinsurance industry deal with what is usually referred to as uninsurable risks, such as cyber risks? Will reinsurers become more aggressive in taking up insurance risk?
  • Will there be a European capital market union where insurance-linked securities will become a more attractive investment opportunity?
  • What is the role of hedge funds in providing capital to the reinsurance industry?
  • Will we see a rebirth of finite reinsurance?