New chief plans ‘evolution not revolution’

Thomas Braune, the newly appointed CEO of NewRe, may have been in post for only a few weeks, but he already has a handle on how the company is doing and where he wants to take it, he tells Intelligent Insurer.

Thomas Braune took up the post of chief executive officer at NewRe on October 1, 2020, moving from Munich Re where he led the life and health reinsurance business in Europe, Latin America and the Middle East.

Braune has been in the industry for more than 30 years so it’s no surprise that he has big plans for the reinsurer.

But while he has some exciting ideas about growth, he is clear “there will be no revolution at NewRe, it’s more an evolution”.

There is no case for restructuring, he said, adding: “You have to grow based on your strengths, this is the story of NewRe.”

This makes sense: NewRe has been very successful over the past three years with a bottom line that has increased significantly each year. “It’s proof that the strategy is working,” he said.

The reinsurer’s strategy is based on four pillars: the traditional P&C business in Europe; Structured Re—structured business in P&C; Structured business in life; and Weather and agribusiness worldwide and with a focus in the US.

“The numbers prove that the strategy was successful in the last three years. This year, we now see the impact of COVID-19, like everybody else, so we will be affected by smaller double-digit million figures (in Swiss francs) and we will see it in the profit and loss sheets.”

The result for 2020 will not be as good as in previous years, Braune confirmed, but his response to this is that the reinsurer will have to manage the situation carefully.

“The good thing is it does not affect our strength or our rating, and it does not really negatively affect our solvency ratio. There’s no real concern about it.”

Building on strengths

COVID-19 has certainly not deterred Braune from thinking about different types of growth.

“If we start to build on our strengths, meaning we will continue with the current strategy that already exists, we can expand in the reinsurance programmes we already participate in and expand our digital clients, as of today.

“In Zurich there is a fantastic labour market with all the experts you need. So if you want to open a new activity, Zurich is the right market. In the mid- to long-term we will think about how to expand into new business fields that fit with our company.”

“In Zurich there is a fantastic labour market with all the experts you need.”
Thomas Braune, NewRe

He added: “With our position of financial strength we could also have volatile business, no doubt. So it’s not only the bread and butter business we are looking at, future growth can be in to extraordinary business too, because of the experts we have and those who are available in the Zurich employment market.

“This is the framework I am working and thinking in. I have some ideas but I have to think them through first.” One thing that concerns him more generally is the low interest rate environment.

“Everybody expects that the low interest rates will continue, unfortunately, and this is what we will see also in our investment results which I expect for the next year.

“We also see some positive effects, so everybody is talking about the hardening of the markets and what I am hearing in my discussions with the clients at virtual Baden-Baden is that while there will be a hardening, it will not be for every line of business or for every client, but in general there will be a hardening that supports us.”

Renewal topics

The new CEO has arrived in post in time to tackle January renewals. He pointed to two main topics that will be discussed during these important meetings.

“The first one is the question of the prices: what is an adequate technical price? What you cannot count on is that you earn over interest on investments to compensate for potential losses.

“So the price for the reinsurance must be a technical price. And this is something which for me is one of the key triggers of the hardening markets, because other reinsurers will also follow this more technical approach.

The second talking point centres of business interruption, Braune said.

“The whole industry realises that the wordings already in use in the insurance industry are not as clear as they should be.

“To avoid negative surprises in the future, everybody is now working on very clear wordings. I’m happy to say that NewRe’s wordings are relatively clear, so we do not expect to see as many unpleasant surprises as the whole industry might see in this area,” he concluded.

Images (from top): Shutterstock / favorita1987

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