Page 204 - Reinsurance Management IC85

The Insurance Times

to discharge. At one level the intermediaries
compete with professional reinsurers who
encourage direct placements. In the matter of
reciprocity an intermediary driven programme can
work towards 100 % reciprocity whereas this
would be a limitation in direct placement as
professional reinsurers would target to provide a
reciprocity much less than 100 %. Both bring the
required expertise, in fact, the intermediary offers
a single window for a range of expertise of the
reinsurers whom he represents.

The intermediary drives the competition in the world
markets - targeting lower rates from quality reinsurers
in a soft market and least restrictive cover from
quality reinsurers in a hard market.

Two issues put him on the toes all the time - substantial
direct placement can be accepted by a professional
reinsurer marginalizing his presence and the brokerage
cost that is additionally borne by an accepting
reinsurer and manifest in the original gross rate to
the insurer's client.

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