As the debate over domiciles continues leading members of the global reinsurance market have had their say at the annual Baden Baden meeting.
Intermediary Guy Carpenter hosted a debate on the issue of “Does Domicile Matter?,” examining on the relative merits of re/insurance hubs in Bermuda, London and Europe, and the drivers behind new centres such as Zurich.
Victor Peignet, CEO of SCOR Global P&C told the audience that successful companies had the flexibility to adapt to the changing regulatory and business environment.
Mr. Peignet said that for global groups there is not just one but a range of domiciles, and that while the parent company’s domicile may be the most visible; it may not be the most critical.
He added: “Every group must have its own vision of the optimum domicile structure based on its history and legacy. However, this structure is not fixed but is a moving target, and the successful groups will be those that make the right choices at the right times. They will have geared their company structure to their optimum domiciles, with sufficient flexibility to adapt their vision, and to change and manage their structure closest to the optimum at all times.”
However John Berger, Vice Chairman of the Board and CEO of Reinsurance atAlterra Capital said site did not matter.
He acknowledged that every domicile has its advantages and disadvantages, but added there were other factors that were of greater value to the success of the company.
“To a degree, the choice of domicile can be largely irrelevant as what will effectively determine the level of success for any organisation is the quality of its leadership, its underwriting talent, and the overall financial strength of the company,” added Mr Berger.
Unsurprisingly Tom Bolt Director of Performance Management at Lloyd’s said London remained the global centre for re/insurance and that was down to talent and concentration of capacity not tax regime.
He highlighted the advantages offered by operating within the London market, stating he believed the importance of access to market had to be considered.
“It's not domicile that matters, it's market access,” he added. “London remains the only place in the world where all 20 of the world's largest insurers and reinsurers have offices, and the concentration of talent and expertise on one underwriting floor at Lloyd's, let alone within a square mile of the building, should not be underestimated.”