The Management Board of the holding company determines, directly and indirectly, the strategic contents of reinsurance policy with its decisions regarding risk and capital policy. The following principles can be derived from external reinsurance to inform purchasing.
Reinsurance structures sustainably support the optimisation of required risk capital and management of the use of this risk capital. Major significance accrues to the maximum use of diversification effects. Decisions regarding all reinsurance business ceded are taken with special consideration of their effects on required risk capital. Continuous analysis of reinsurance purchasing for efficiency characteristics is an essential component of internal risk management processes.
UNIQA Re AG in Zurich is responsible for the operational implementation of these tasks. It is responsible for and guarantees the implementation of reinsurance policies issued by the Management Board of the holding company. It is responsible for central guideline expertise on all activities, organisation and questions regarding internal and external reinsurance relationships. UNIQA Re AG is available to all Group companies as the risk carrier for their reinsurance needs. Internal risk transfers, of course, are subject to the same requirements and valuation processes in terms of efficiency measurement, risk capital optimisation and diversification as retrocessions to external reinsurance partners.
The assessment of the risk check of the portfolios assumed by the Group companies is of central importance. Periodic risk assessments have been performed for years in order to facilitate value-oriented management of capital expenditure. Extensive data are used to assess risk capital requirements for affected units. Reinsurance programmes are constantly structured in a goal-oriented manner in accordance with their influence on the assignor’s risk situation.
For the property and casualty insurer, promises of performance for protection against damages from natural disasters represent by far the highest stress on risk capital due to the volatile nature of such claims and the conceivable amount of catastrophic damages. The UNIQA Group has set up a specialised unit within UNIQA Re AG in order to deal with this problem. Exposure is constantly monitored and evaluated at country and Group level in cooperation with internal and external bodies. With goal-oriented use of all applicable diversification effects and the positioning of a highly efficient retrocession programme, the UNIQA Group achieves a substantial relief of the load on risk capital.
UNIQA Re AG has assumed almost all of the UNIQA Group’s required reinsurance business ceded in the reporting period. Only in the life insurance line was a portion of the necessary cessions given directly to external reinsurance partners. The Group’s retrocessions in the non-life insurance line were done on a non-proportional basis. The Group assumes moderate excesses in the affected programmes according to risk and value-oriented approaches.