Although smaller in market size to non-Life, at an estimated value of USD76bn and expected to grow in the mid-single digits in the coming years, Life is a reinsurance market offering plenty of opportunity. Life reinsurance (encompassing Life and Accident & Health) is highly competitive with a small number of large, well-established players predominant in the market. But it is this very dynamic which presents opportunities for the more agile players to achieve profitable growth in specialist areas; a strategic approach entirely in keeping with the Barents ambition to be the World’s Niche Reinsurer.
By focusing on mortality and disability where there are gaps in coverage for smaller deals, shares of treaties or entities that are of lesser interest to the bigger players, we believe that the more nimble players such as ourselves can provide the coverage clients are currently lacking.
Determining the right geographic focus will be pivotal to success. The saturated North American markets of the USA and Canada, where reinsurance cession rates have in fact declined significantly since the early 2000s, are not an especially attractive proposition for the newer players. Europe, although very well developed in Life reinsurance, differs from North America in that there is greater potential for Barents to fill the coverage gaps for clients seeking a like-minded reinsurer.
Of greater interest though are the growth markets in Latin America and Asia. In Latin America, the population growth coupled with evolving regulatory environments, such as those in Mexico and Brazil, is witnessing increased demand for Life reinsurance protection. Asia, and notably South East Asia, benefits from favourable conditions for Life reinsurance given the rapid growth in population and wealth alongside improving mortality rates.
2017 was a year of development for our Life operation as we increased our resources in underwriting, actuarial and business development. As a result, in 2018 we anticipate growth in our Life business from Latin America, Asia and selectively from Europe.