DVS report from Munich

Despite the financial gloom around 500 delegates attended the Deutscher Versicherungs-Schutzverbad e.V. (DVS) Sympsium in Munich.

Attendance reportedly increased by 10 percent on last year’s conference. Looking around the exhibition hall and through ther delegate list the majority of those signed up were insurance and broker professionals with around 100 corporate risk managers. The conference took place over two days (September 9 and 10) at the Westin Grand Hotel in Munich’s leafy Arabellapark district.

DVS president Stefan Sigulla, also managing director of insurance for Siemens Financial Services, opened the symposium and remarked on the challenges posed by assessing the counterparty risk represented by insurers. There was also a panel debate on the failure of the credit rating agencies to spot problems and potential solutions, of which a state backed system of ratings was one suggestion. Spreading risk amongst carriers was raised as another possible course of action to mitigate the risk of an insurer going bust.

In other news, a legal development in Germany with implications for Directors and Officers (D&O) insurance was also hotly debated. The Act on the Adequacy of Managerial Salaries requires that employers who purchase D&O liability insurance impose a personal deductible of 10% on the covered directors and officers. With German Federal Elections looming some say the new law is an attempt by the government to appear tough on executive accountability in the wake of the financial crisis.

“A legal development with implications for Directors and Officers insurance was also hotly debated.

But Thomas Harmeyer, German regional manager of HCC Global Financial Products, said the new law is also prompting insurers to develop products for the new exposures. Given that the new law imposes a compulsory deductable, buyers are also wondering if premiums will fall.

It also emerged at the conference that the Federation of European Risk Management Associations (FERMA) has agreed to work more closely with the European Captive Insurance and Reinsurance Owners Association (ECIROA) to address the treatment of captives under Solvency II.

Solvency II, Europe’s new risk based capital regime, is a key topic for both associations. Buyers are concerned that the new regulation could force captives out of business because, with a limited spread of risk, they may be required to up their capitalisation. Concern has also been expressed that the new regime could lead to more consolidation in the wider insurance market as smaller insurers run into similar problems meeting Solvency II’s capital requirements.

FERMA’s new president Peter Den Dekker explained that the association had set up two new working groups. One would focus on the treatment of captives and work closely with ECIROA. The other working group would work on the impact of Solvency II on the general insurance marketplace, he said.