Insurance EuropeThe report titled ‘The Power of Reinsurance: Supporting the resilience of societies through an open and well-regulated reinsurance market,’ underscores how the reinsurance industry’s global diversification plays a pivotal role in narrowing insurance protection gaps, fostering innovation, combating climate change-related threats, and bolstering financial robustness.

The report underscores the pressing need for the efficient pooling of risks across international borders, particularly in the face of escalating losses from global catastrophes.

To foster a competitive industry that can continue to protect insurers and expand insurance coverage worldwide, the RAB recommends various trade and regulatory policies.

These recommendations include promoting the free flow of affiliated and unaffiliated reinsurance capital and pay-outs to enhance resilience, recognising the specific expertise and global diversification inherent to reinsurance, and endorsing risk-based prudential regulation that acknowledges reinsurance’s benefits.

The report also encourages international supervisory cooperation and emphasises proportionate and risk-based supervision of reinsurance.

In contrast, the report cautions against counterproductive practices such as restricting cross-border business, favouring domestic reinsurers, hindering global risk diversification, mandating collateralisation of reserves, and imposing restrictions on reinsurers’ internal models and risk diversification recognition.

The Insurance Europe RAB, a specialised representative body for the European reinsurance industry, comprises seven major reinsurers — Gen Re, Hannover Re, Lloyd’s, Munich Re, PartnerRe, Scor, and Swiss Re. Insurance Europe provides the secretariat for the board.