MONTE CARLO, Monaco—Buyers have begun discussions with brokers and underwriters about changes in their reinsurance buying patterns once Solvency II and equivalent regulations come into force.

But firm decisions about reinsurance buying strategies and any uptick in demand are not expected until those rules have been finalized, experts said during the Rendez-Vous de Septembre gathering of the reinsurance industry.

Solvency II is slated to go into effect in 2013 with a gradual implementation over several years, but could be delayed until 2014.

Solvency II is “for the most part, good news for global reinsurers,” said Stefan Holzberger, London-based managing director of analytics at A.M. Best Europe.

Among other things, Solvency II will create greater demand for reinsurance, he said.

“We expect more demand for reinsurance,” said Torsten Jeworrek, reinsurance CEO of Munich Reinsurance Co., during a media briefing at the Monte Carlo, Monaco, meeting.

Peter Schmidt, Zurich-based CEO of European reinsurance for Catlin Group Ltd., agreed that Solvency II likely will increase demand for reinsurance. “People will need to spread their exposures and diversify and will start buying (reinsurance) more consciously,” he said.

While full implementation of Solvency II is still some way off, many cedent insurers, as well as reinsurers, already are operating under Solvency II rules to an extent, said Martin Davies, CEO of Towers Watson Capital Markets Ltd. in London.

For example, in formal written tenders, some cedents are asking their brokers to demonstrate the capital benefits of reinsurance coverage as if Solvency II were in effect, he said.

While some buyers still buy reinsurance tactically on the basis of price, Solvency II is getting buyers to think more strategically about their reinsurance purchases, Mr. Davies said.

Discussions are happening about different reinsurance buying patterns because of Solvency II, said James H. Veghte, president and CEO of the reinsurance arm of Hamilton, Bermuda-based XL Group P.L.C.

“We are working with the big brokers to discuss the types of products” cedents will require, he said.

There is no question that there will be increased demand for reinsurance, especially from the middle tier of insurers, he said.

It is possible demand will increase for proportional reinsurance once Solvency II comes into force, as this could help lower cedents' capital requirements, said Marc Bekkers, head of analytics for the Europe, Middle East and Africa region at Aon Benfield Analytics.

While some smaller and midsize insurers are beginning to hold discussions with brokers and reinsurers about how they will buy reinsurance under the new rules, those discussions have not yet translated into increased demand, he noted.

Rob Jones, a managing director at Standard & Poor's Corp. in London, agreed. Buyers are waiting for the rules to be finalized, he said, and then reinsurance can be put into place swiftly.

The likely delay of full implementation of Solvency II until 2014 or beyond means that primary insurers are still “waiting to see” how the new rules will affect their capital needs, said Denis Kessler, chairman and CEO of Paris-based SCOR S.E.

Even so, he said, primary insurers' need to increase their capital likely will happen before demand rises for reinsurance.

Solvency II ultimately will become “somewhat of a global standard,” said W. Marston Becker, president and CEO of Hamilton, Bermuda-based Alterra Capital Holdings Ltd.

U.S. insurers doing business in Europe will have to implement Solvency II, which may pressure the United States' new Federal Insurance Office to become a “leader” of the states on how the country will deal with Solvency II, he said.

In Bermuda, where regulators are aiming for equivalence with the Solvency II regime, the industry is well-prepared for the changes ahead, experts said.

One of the attractions of the Bermuda market for reinsurance startups has been the “speed to market” at which companies can be set up, noted Arthur Wightman, a partner at PricewaterhouseCoopers L.L.P.

Achieving Solvency II equivalence on the island may mean that startups have some “additional hoops to jump through,” but the industry and Bermuda's regulator are confident that it would not negatively affect the ability of companies to set up swiftly, he said.