The marine segment is notoriously challenging in Brazil with increasing demand, but often presenting high loss ratios in the insurance and reinsurance market, mainly due to the high incidence of cargo thefts in the country. In reinsurance this situation is aggravated by the low level of reinsurance cession in this segment, making it difficult to accumulate premiums at adequate levels to cope with the high volatility to which it is subject. This scenario, however, did not discourage Munich Re, who has been investing and stands out today as one of the leading reinsurers in this line in the country. In the last 4 years, the reinsurer’s operation in the segment has grown more than 500%. The premium issued in 2015 represented around 2% of net reinsurance ceded by the market, while in 2018 it had already reached 15%.

In Brazil for more than 20 years and acting as a local reinsurer since 2008, Munich Re has the advantage of knowing very well the peculiarities of the market, the insurers and the main risks, in addition to being fully adapted to the Brazilian market culture. These characteristics enabled the Munich Re Group subsidiary to adjust its strategy and risk appetite to the specific needs of the market without undermining the profitability of its operation. Munich Re is aware that only acting passively, analyzing and pricing the traditional risks offered, would not allow them to exploit all available opportunities and they would hardly acquire a larger portfolio.

Reinforced team

Since 2019 the Marine’s team in Brazil was strengthened, following the growth of the portfolio. The team is led by Henrique Cabral, who has been at Munich Re for 7 years and was one of the responsibles for the turnaround seen in this line. The team now also counts on Facundo Cardello, a specialist in cargo, who brings a greater diversity to the team, with his experience of 9 years in direct insurance in Brazil and Argentina. Facundo has acted both in the underwriting and commercial front of a large international insurance group and knows the needs of the local market well. Nayara Bonini, an actuary, who also has 7 years of experience in Munich Re,  will now dedicate herself entirely to Marine, in addition to being responsible for Aviation. Nayara has already worked as property and marine treaty underwriter, besides working for other departments of the company.

We believe that currently we have in Marine a perfect combination of technical and visionary people, who are focused on understanding the needs of each client and making solutions possible,” says Tânia Amaral Heydenreich, head of Non-Life Treaty Underwriting at Munich Re. Marine currently accounts for about 20% of the non-life portfolio of the local reinsurer. “Today we have a well-balanced portfolio, with no dependence on any line or segment, which gives us more strength to cope with the intrinsic volatility of the business without significant impacts on our financial stability. And it also gives us breath to invest in differentiated initiatives.”

New Hub for Latin America

With the success of the Brazilian operation and the high level of the local team, in a recent restructuring of the Group, the Brazilian team also assumed responsibility for the of Marine Munich Re operation throughout Latin America. Henrique Cabral, who was already responsible for the Southern Cone (Brazil, Argentina, Chile, Uruguay and Paraguay) 3 years ago, now takes over the responsibility of Head de Marine for the region. According to him, the Latin American market is extremely dynamic and has grown in relatively different ways in each country, each with its degree of maturity; still, markets of continuous growth and with the possibility of generating new opportunities. In addition, there is great potential with lower insurance penetration when compared to more developed markets. “In the last few years we have been getting a lot closer to our customers in tireless travel and visits, even in markets where we were not present. Now, with the consolidation of Hub in São Paulo, we are well positioned to meet the expectations of an even broader range of customers through concrete initiatives to generate business. “

With the change of the Hub, Henrique also becomes the “Board Member” representative of Munich Re with ALSUM (Latin American Association of Maritime Subscribers), while Facundo also assumes the position of Member of the Association’s Transportation Committee.

It is not just reinsurance capacity

The initiatives in Brazil and in other Latin American countries include strong partnerships with insurance companies, brokers and underwriting agencies in several projects. There are initiatives that give a new insight into transportation risk management, where Munich Re cooperates with customers and partners at all levels of the value chain to optimize shared results. There are also initiatives that involve new niche products, configured to offer a broader range of hedges, or aimed at optimizing capital along these lines. Finally, the company also offers solutions in innovation, as a digital platform to market in an online and automated way products tailored to the client, already counting on reinsurance. “Just offering capacity in traditional reinsurance contracts is interesting, but not exciting. We want more than that. We want to offer something that solves the real problem of the client and helps him achieve his goals,” says Henrique.

Risk management

While the entire market is experiencing increasing and intense competition in the quest for less exposed risks at ever lower rates, one of Munich Re growth drivers has been precisely to address risks of greater complexity and sometimes with historical results temporarily unfavorable. Naturally, it is not enough simply to accept risks of this nature with higher prices. It is necessary to deeply understand the entire business chain and, in partnership with the insurer and broker, to make them “insurable” through measures that actually have a positive impact on the insured’s operation. This requires cautious underwriting, strong partnership with quality risk managers, and continuous monitoring of account development. Having the know-how and structure for this, Munich Re believed in this niche and, together with partner insurers, has made possible the insurance for companies that were once considered “ugly ducklings” of the segment. Henrique still concludes: “Our proposal goes beyond risk transfer; it covers risk improvement in partnership with insurers, brokers and the insured, so that all links in the value chain are direct beneficiaries of the systemic development achieved.”