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BADEN-BADEN GATHERING REMAINS POPULAR EVENT

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BADEN BADEN, Germany-The annual Baden-Baden reinsurance meeting continues to grow as global reinsurers meet to discuss renewals, though it is becoming less of a venue for finalizing deals, executives say.

At the Oct. 27-31 gathering in this spa town in Germany's Black Forest region, a record 1,022 insurers and reinsurers were present, up from 1,000 at the 1996 meeting and 941 the year before.

The international flavor of the event also is increasing. This year, Baden-Baden celebrated its 20th anniversary as a general event open to global reinsurers of all lines of business, having previously been purely a German, and primarily marine, meeting.

A record 344 insurance and reinsurance companies from 45 countries were represented here this year, compared with 333 companies from 46 countries in 1996. In addition, the event, once attended only by insurers and reinsurers, now attracts unrecorded numbers of accountants, brokers, consultants, runoff managers, underwriting managers and the media.

Most of the year, Baden-Baden is host to tourists seeking to test the waters in the famous baths, gamble at the plush casino or sample wines at the local vineyards.

During the last week of October, however, the global reinsurance industry takes over the town.

Hotel rooms are fully booked several months in advance of the meeting, with latecomers turning to accommodations in Black Forest towns and villages surrounding Baden-Baden.

This year, as in most years, hotel lobbies and bars were crammed with attendees discussing year-end renewals. Meetings overflowed on to the terraces, where attendees braved the crisp autumn weather.

Most attendees value the Baden-Baden meeting as a start of the hard bargaining for year-end renewals.

Michael Caley, chief executive officer of Kininmonth Lambert Ltd., the main reinsurance brokerage unit of Lambert Fenchurch Group P.L.C. in London, said he finds the Baden-Baden meeting "enormously useful."

Mr. Caley personally has been attending for the past six years, though Kininmonth Lambert has been represented for eight years. Like many other brokers, he said that having put in a lot of hard work the previous month at the annual Rendez-Vous de Septembre meeting in Monte Carlo, "we've been able to really move discussions along at Baden-Baden and get into placing programs."

Baden-Baden is much more productive than the Monte Carlo Rendez-Vous, said Stephen Gordon, director of international operations at Reliance National Insurance Co. in London.

"It's a working meeting and people come here for a specific purpose," he said.

Renewal offers are made at the meeting, even though many of the contracts may not be sealed until December, Mr. Gordon said.

Serge Osouf, president and chief operating officer of Paris-based reinsurer SCOR S.A., said his company has been sending about 30 people to Baden-Baden for a number of years, with each of them holding around eight to 10 appointments a day. However, in a desire to bring these talks closer to a successful conclusion, many of the meetings involve a number of different SCOR people meeting with the same clients, he explained.

Despite those efforts, Mr. Osouf said he did not think there would be many contracts finalized at Baden-Baden, unlike 10 years ago, when the German meeting was the venue for striking deals before year end.

"Every year, decisions are made later and later," and it is likely to be the second half of November or December before minds are made up, he said. The reasons for delay include client hopes that a better deal will come along, as well as clients waiting for their own third-quarter results. So, "for us it requires another visit with clients," he said.

That view is seconded by Timothy Stokes, underwriter for The Copenhagen Reinsurance Co. (UK) Ltd. of London.

"In the last five years or so, reinsurance arrangements always take much longer either to be decided upon or to be arranged," he said.

While this results in clients holding off for the best possible deal, it also reflects the difficulty that "a number of people can't really decide what they're able to write until they get their own reinsurance arrangements in place," he said.

Mr. Stokes said Copenhagen Re has a number of brokers working on its behalf on the marine, facultative accounts and treaty business, but still has not decided how it will place its reinsurance program.

"We're investigating what we're going to do. And I think a lot of that is going on here," Mr. Stokes said.

The 1997 meeting has been less productive than those of the past several years as reinsurers and cedents wait longer and longer to ascertain just how soft the market is, said Martin Oesterreicher, head of marketing for Central and Eastern Europe for Swiss Reinsurance Co. in Zurich.

"We are just in the process of quoting. Last year, we already had some feedback, but this year it is just talking," he said.

Stephen Hitchcock, deputy managing director-international division of Heath Reinsurance Broking Ltd. of London, said that when he first came to Baden-Baden 13 years ago it was a very German meeting, whereas now it is truly international.

Mr. Hitchcock said he wonders, however, if "perhaps we're now seeing the attendance at its zenith." He said the industry has some real problems ahead of it for the next few years for everybody, and "If I were sitting here in five years' time, or maybe the year 2000, I wonder who'll be left."

Sue Gwynne, planning and marketing director of Eagle Star Reinsurance Co. Ltd. of London, has been coming to Baden-Baden since 1992. She sees it as an event where she can see people she doesn't normally see in London, mainly from ceding companies.

Nicholas Bonnar, excess-of-loss underwriter for Lloyd's of London syndicate 588, is one of a growing number of Lloyd's underwriters to attend the reinsurance meeting. He said he found his first participation in Baden-Baden "very useful both as a market awareness exercise and also for the ability it provides to see many clients in one location."