German reinsurer Deutsche Rückversicherung AG (Deutsche Rück) is exploring potential risk absorbers and additional vehicles, while also keeping an open mind towards alternative capital instruments, according to Chief Executive Officer (CEO) Achim Bosch.
Bosch joined the firm in 2019 as Chief Underwriting Officer (CUO), where he was responsible for managing the company’s non-life market segment.
He began his professional career at Concordia Versicherung in Hanover and went on to serve at General Reinsurance AG in Cologne, where he was appointed to the Executive Board in 2008.
During a recent interview with Artemis, Bosch explained Deutsche Rück’s stance on the use of third-party capital or insurance-linked securities (ILS) structures to supplement traditional reinsurance capacity.
“Our shareholder clients, the public insurers, have traditionally maintained a particularly strong presence in their regional markets. While this close local focus makes them deeply rooted in their regions and entails strong customer relationships, it also exposes them to increasing risks from regionally confined extreme events,” Bosch told Artemis.
“In this context, Deutsche Rück positions itself as a central risk hub and trusted risk manager for its owners, enabling them to benefit from diversification and economies of scale.”
He continued: “For instance, the public insurers have established a natural catastrophe pool through Deutsche Rück. Based on a mutual, solidarity-driven pooling concept, this structure generates additional cost-efficient reinsurance capacity within the group of public insurers.”
Bosch added that this mechanism enhances their independence from fluctuations in the international reinsurance markets and reinforces long-term financial stability.
“Given the leading position of the public insurers in the German market – particularly in natural hazard cover for private customers – climate change and the ongoing debate in Germany about the potential introduction of compulsory NatCat insurance play an important role in our considerations,” Bosch explained.
In the wider reinsurance sector, the role of alternative capital has grown steadily over the past two decades.
ILS, catastrophe bonds, and sidecar vehicles have allowed reinsurers to tap into global capital markets and diversify their sources of risk-bearing capacity.
While these instruments are often linked to the Bermuda or U.S. markets, Bosch’s comments indicate that Deutsche Rück is open to exploring how these tools might enhance its current model.
Concluding, Bosch said: “Against this backdrop, we are actively exploring potential risk absorbers and additional vehicles, while also keeping an open mind towards alternative capital instruments.”
Read all of our interviews with ILS market and reinsurance sector professionals here.
