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Member, Beacon International Group, Ltd.
MONTE CARLO, MonacoMarket demand for financial or structured reinsurance solutions is returning as fears of heightened regulatory scrutinydriven by New York Attorney General Eliot Spitzer's campaign to clean up the businessrecede, according to Hannover Re.
During a press conference at the Rendez-Vous de Septembre in Monte Carlo Monday, Silke Sehm, associate director of Advanced Solutions at the Hanover, Germany-based company, said that demand is rising fast and that the first new contracts had recently been written in Asia and Latin America.
Hannover Re is a leading writer of financial reinsurance worldwide and reported double-digit increases in premiums in this line within its half-year results compared with 2005.
"We can only underline that demand is now higher than in years before. Is Spitzer over? We can't say for certain but submissions in the U.S. are higher than in the past. It is maybe more from mid-sized than large companies," said Ms. Sehm.
"For non-U.S. business, Solvency II, the accounting project and (the need for higher) catastrophe reserves contingencies is leading to higher demand in Germany, Scandinavia and Japan. We wrote the first treaties in Asia and Latin America. Six years ago
90% of the business was out of the U.S. Today, it's more like 50-50" between the U.S. and other markets, she added.
Wilhelm Zeller, chairman of the executive board at Hannover Re, added that the company had recently completed its first major financial reinsurance treaty in China.He said that the alternative risk transfer market is benefiting from exceptionally high prices charged for retrocessional capacity.