Pietro Toffanello says while many of his own friends and relatives don’t understand what he does for a living, he believes the earthquakes have made New Zealanders considerably more aware of what reinsurance is.
Since taking up his position as
Gen Re Australia Managing Director and Property/Casualty Manager of the Asia Pacific region three years ago, he has also become a board member on the Insurance Council of New Zealand (ICNZ) and now regularly passes through NZ customs.
“Sometimes when I come into New Zealand, whenever I put my occupation on the landing card as reinsurer I can see a smile on the faces of the customs officers and I think that’s why they always send me to the x-ray machine,” he told
Insurance Business.
“After the earthquakes it’s probably started to be way more popular – for the wrong reasons!”
But while more Kiwis may be aware of the role reinsurance plays, and while there is a high insurance penetration in New Zealand, he said the complexities of resolving the Canterbury earthquakes are still beyond most people’s understanding.
“I think the industry has put on a lot of effort in taking the leading role in pushing towards resolution on all the unique issues associated with the role
EQC plays. Another thing I think is discounted is that the insurance industry, with the backing of the large reinsurers, has really kept the economy going.
“We’re really talking about a major event. The data about the insurance penetration in New Zealand is pretty impressive. This is a rare case where the insured loss is a large proportion of the economic loss, which highlights even more the big role insurance and reinsurance are playing.”
This is why his work on the ICNZ board has been particularly rewarding, as one of the goals of ICNZ has been to improve the understanding of insurance and what insurance does for people.
“These initiatives are little steps that over time will make a big difference, but you need to start and invest early."
He continued: “I come from Milan in Italy which is a country with a very low insurance penetration where people tend to think that whatever happens, the government should step in.
“I really believe that individuals should take ownership of the situation and decide when to protect their assets and how, and be able to have the tools to do it.
“The New Zealand market is quite sophisticated in terms of the availability of policies but we need to make sure that people are aware of them, that there is transparency, disclosure and people are given a choice.
“Being part of the bigger discussions has been a fantastic learning experience for me personally.”
The fact that he is continually having to learn, even though he is at the top end of the corporate ladder, is a big reason why Toffanello is convinced he made the right career choice back in 1994.
But he admits even he didn’t know reinsurance existed before he accepted his first role at Gen Re when fresh out of university.
“I do feel that we still struggle to do a good enough job to explain how fascinating this world is,” he said.
“It is a very international environment, it offers great opportunities to deal with different markets, cultures, everything, and deals with a very diverse range of issues. And actually a lot of the stuff that is happening in the reinsurance world is really what is going on in the world around us.
“Social customs evolve and technology provides us with new ways of accessing products and services and changes the way we interact with their providers. People’s needs and thus their insurance needs are consequently changing, more rapidly than ever before.
“So the skills you need to work in the reinsurance industry can be absolutely diverse, it’s not just one size fits all. Whether you’re from a financial background, legal, engineering, actuary, political sciences, everybody can make a contribution.
“So as to how you make reinsurance sexy – once you know it, it really is!”
Perhaps one of the difficulties lay in actually getting people to know it, he said, with one reason for that being that while the dollar numbers involved are big, the number of people working in the industry is reasonably small.
“Gen Re writes $6 billion in premium but only has 2000 employees, so it’s a small industry in terms of numbers of people compared to others.”
While New Zealand is a small market with a big exposure, Toffanello says the company remains dedicated to maintaining a local office here, having celebrated its 50
th NZ anniversary two years ago.
“Global reinsurance is about pooling and diversifying risks across lines of business and geographies. This allows us to look at the large catastrophe exposure that New Zealand presents us with, and use the strength of our balance sheet to take it on. This would not be possible when looking at New Zealand in isolation,” he said.
“We need to thoroughly understand the underlying exposures to get the pricing right. At the same time the crucial thing we expect is having certainty after a loss that the rules of the game - that were there at the very beginning - don’t change after a loss, we really don’t want to see that happening.”
See the next edition of the newsletter for Part Two: Toffanello’s top five reinsurance trends
