CHICAGO — Asking the right questions can help companies choose a reinsurer and save money.

It's important to know how long a reinsurer has been in business and if they're likely to stay around because “these are very long claims we're talking about here,” said Joseph Meli, Stamford-Connecticut-based senior vice president for General Re Corp. Mr. Meli added that he recently saw a claim paid with a date of loss of 1942.

Mr. Meli spoke during the National Risk Retention Association's conference in Chicago on Wednesday about how to lower reinsurance costs while still maintaining adequate coverage.

Companies should also ask reinsurers if they're committed to and familiar with their particular line of business, he said.

“Can they understand your business plan, your risk appetite, your capital structure?” Mr. Meli said. “(Can they) really suggest a plan, a structure for you that's consistent with those goals and objectives?”

It's also a good idea to ask reinsurers if they can bring to the table underwriting input, claims input and information about emerging issues, he said. “Cheaper is not necessarily least expensive in the long run,” he added.

And because companies tend to outgrow their reinsurance structure, it doesn't hurt to reevaluate options every so often, Mr. Meli said.

“Reinsurance is a capital substitute,” he said. “The more capital you have, the less reinsurance you need and, therefore, the lower your cost, but the more volatility you accept.”

Companies need to decide what's going to be less expensive for them: the direct cost of reinsurance, or moving capital from the business to the captive, he added.

Also during the conference, the National Risk Retention Association named Dan Labrie, Cheshire, Connecticut-based president and CEO of HAI Group, the new chairman of the association.

“NRRA is the public voice of risk retention and purchasing groups with a successful record of defending the industry against challenges to the authority of RRGs to operate in some states,” Mr. Labrie said in a statement. “I am confident in the future growth of this important sector of the insurance industry.”