>The interview that follows is taken the very next day, when the President of POLAND’s sole reinsurer agreed to share his views on the Central and Eastern European markets and on the future
of POLISH Re. |
Interview with
Marek CZERSKI,
President of POLISH Re
PRIMM: Why a Polish Reinsurer? The Czech market doesn’t have one, neither the Hungarian market...
Marek CZERSKI: It is quite a long story. As you may already know, before 1988 in Poland there were only two insurance companies, PZU and VARTA. Both of them were state owned, the first being oriented to the domestic business, while the other, VARTA, to foreign business including inward reinsurance business.
I think that even from the beginning, from the early 90’s, Poland was considering the establishment of a reinsurance company. I think the first serious idea was in ‘94-‘95. When we had the contacts with some of the big western companies which were very active in Poland, they started to deliver some business. Afterwards, discussion with the Polish insurers such as VARTA or PZU started, as it was necessary for them to invest in this project. There was a huge discussion later on with the Government about the flow of money going outside Poland on reinsurance contracts. The project started with obligatory cessions from existing companies although it soon became clear that POLISH Re should be a professional reinsurance company without any obligatory cessions. This gave us a big advantage because from the very beginning we had to work and develop in a very competitive environment, nothing was for granted. This was the beginning.
Why in Poland? Because the Polish market is a bit larger than the Slovak and Czech markets are and also because it was the area of activity of several Western companies. For countries like Poland, the Czech Republic, Slovakia, Bulgaria and Romania it is important to have an experienced regional reinsurer with local capital. Our plan is to become the first regional reinsurer, as we believe we can have results only when working in the area we know, with the companies and with the brokers we know. Our area of development is Eastern and Southern of Poland but we are now thinking of expanding our activity, as we want to buy maybe one or two reinsurance companies from the region.
PRIMM: Is POLISH Re looking for investors who can contribute to its capital base?
M.C.: It basically depends on the capital those investors would bring. At the time being, the capital of POLISH Re is neutral. We don’t want to become a captive reinsurer.
We designed a two phase strategy for our development: a private infuse of capital, followed by our first IPO. This is scheduled for the 4th quarter of this year. We want to be a public company. The money we will get form this listing on the stock exchange are going to be used for the acquisition of other reinsurance companies or just to build a middle size reinsurer.
PRIMM: How do you feel about ratings, as few reinsurers in Eastern Europe are rated?
M.C.: We had our company rated three times until now. The first rating was done in 2004 by STANDARD & POOR’s (S&P’s), A.M. BEST and also by Russian EXPERT Ra. At the beginning we had “BBB-” with S&P’s and “B+” with A.M. BEST. That’s the official rating, with a stable outlook. Well, based on the models that S&P’s has, we know that capital wise POLISH Re should be rated at the level of “AA” but due to the size of the absolute figures we had to be put at “BBB” level, which is also excellent, because this is the investment rating and we are really proud of this. We are now working on improving our rating, so the most important for us is to increase our capitalization and to develop. However, we don’t want to grow organically too fast, so there is a slowly but steadily stream which is important for POLISH Re, with selective underwriting.
PRIMM: Do you think your rating might be a problem with certain clients?
M.C.: It is not a problem, but surely it doesn’t make life easier for us. Our rating is more than acceptable for our region, but we can not compete in terms of ratings with international reinsurers.
Our advantage and also our message to our partners in the region is that we are dedicated to them. We are here, we have local knowledge, we speak the local languages, and we can read between the lines and understand the mentalities.
PRIMM: What is your relationship with the Romanian market, considering the fact that at the Insurance Market Awards Gala, granted by PRIMM Magazine - Insurance&Pensions last December in Bucharest, POLISH Re was designated as The Most Dynamic Reinsurer of the Year 2006?
M.C.: We worked almost from the beginning with Romanian insurers and our general impression is very positive because we can observe how the market is growing and how the changes are implemented, how companies are growing and becoming more and more aware of the business they should write. We can see the change in the way companies approach business, and we are very glad about this, because when our clients grow we grow too.
We have established constant cooperation with numerous Romanian companies. Also, we can see the market’s potential. So we have a positive outlook regarding the development.
We are really surprised about the trophy, because we are not focused on receiving awards on our daily business. Honestly, the Award took us by surprise. For me, what is the most important is that this Award was not granted by the Polish market, but by another CEE country. Therefore, I consider it to be recognition from the market partners in the region.
PRIMM: Generally speaking, the European market is going through a consolidation process. This means that the reinsurance companies have less non-captive companies to work with. Have you been affected by this?
M.C.: Somehow we are affected because we need to present a better rating and its more complicated than before. However as we were working with the companies that are now part of different groups, the investors - like WIENER STAEDISCHE or ALLIANZ, allowed us to maintain the cooperation, so from this point of view we are not affected.
When you are talking about consolidation on the reinsurance market you have to mention that SWISS Re bought GE Insurance Solutions and so on, therefore you have a few extra-large reinsurance companies but there are few medium-sized reinsurance companies. This creates a niche for our size companies, because when you talk about large companies they have minimum premium requirement and other restrictions which we do not have.
Our costs are lower than those of a giant reinsurer. As POLISH Re is a young company, we have a lot of new procedures, already implemented from the early beginning. For example, we use only electronic documents and therefore our internal costs are considerably lower. Also, because POLISH Re is focused on the CEE region, we are not exposed to all the risks my bigger colleagues are. This gives us another advantage. We are trying to learn from the mistakes of our competitors.
Alexandru CIUNCAN |
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Marek CZERSKI |
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Professional experience
• Marek CZERSKI has been appointed as President of the Management Board of POLISH Re on July 14th 2006. He has ten years of experience in the international insurance and reinsurance markets;
• Between 2004 and 2006, he
was Director of the Department of Marine and Air Insurance and Reinsurance in TUiR Warta S.A.
In addition, he was involved in numerous projects conducted by the KBC Group;
• In the years from 1997 to 2004 he organized and ran a branch office of the SWISS Re in Poland while from 1994 to 1997 he was the Director of the Reinsurance Office and the Director of the Department of Insurance and Reinsurance in TU Fenix. Education
• Graduated from the Silesian Polytechnic in Gliwice; was involved in several exchange scholarships and scientific cooperation universities from Denmark and the Netherlands;
• He has taken part in many courses in the field of insurance, reinsurance and management organized by, among others, SWISS Re, MUNICH Re, SCOR
and GEN Re. |
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