MONTE CARLO, Monaco, September 12, 2018 /PRNewswire/ --
The Global Reinsurance Forum (GRF) announced today that no new major trade barriers have been added to the latest edition of its Reinsurance Trade Barriers and Market Access Issues Worldwide list . Despite this encouraging development, the GRF remains concerned that significant barriers still are in place worldwide.
Kevin J. O'Donnell, Chairman of the GRF and President and CEO of RenaissanceRe, said: "Trade barriers undermine the efficiency of reinsurance markets and reduce competition, leading to reduced customer choice, higher reinsurance costs and less capacity over the long-term horizon. Growing protectionism is an unfortunate trend at a time when, as research shows, there remains a huge and persistent gap between the levels of economic losses experienced and insured levels worldwide."
The GRF reinsurance barriers list can be found on the website and is updated twice per year. In its updated list, the GRF highlights the following issues affecting the reinsurance industry:
- Restrictions on the ability of reinsurers to freely conduct business on a cross-border basis, thus limiting the capacity of reinsurers to spread risk globally and to prevent domestic concentrations of risk.
- Requirements for reinsurers operating on a cross-border basis to collateralise or localise assets, preventing the global reinsurance market from transferring and spreading risk on the basis of a competitive level playing field across borders.
- Restrictions on foreign ownership of subsidiaries and other barriers to the establishment of branches, subsidiaries and operations.
- The use of discriminatory and anti-competitive mechanisms such as compulsory cessions to domestic entities, systems of 'right of first refusal', and compulsory, subsidized or monopolistic governmental mechanisms limiting the competitive capacity of global reinsurers to operate on a level playing field.
The GRF members are the CEOs of thirteen leading global reinsurers which represent 65 per cent of total market gross premiums. Its main objective is to promote a stable, innovative, and competitive reinsurance market worldwide. The GRF helps to define industry positions and works to advance understanding of the value of reinsurance to the economy, encouraging an open and fair international framework for the development of reinsurance markets. The GRF is an independent organisation whose secretariat is supported by The Geneva Association.