BNamericas interviewed Barents Re CEO and Chairman, Gerardo Garcia, about their recent expansion onto the European markets.

Panama-based reinsurer Barents Re is a fast-growing company that has significantly expanded its operations in Latin America as well as globally during the last several years.

In December the company obtained a capital injection of US$100mn to help finance its continued international expansion.

To find out more about the company’s international expansion plans, BNamericas spoke to Barents Re’s general director Gerardo García. This is the second of a two-part interview.

BNamericas: You said that Barents Re is today seeing the strongest growth in Europe and that your international expansion is now focused on that region. What can you tell me about the other regions where you operate? Let’s start with the Middle East and North Africa [MENA].

Gerardo García: In the MENA region we’ve been growing according to our projections and we’re happy with this. However, we believe that we’re reaching the levels of growth that we want to have in this region. So we have to look for growth in other geographical regions to continue expanding our business.

BNamericas: What about Latin America?

Gerardo García: The share that Latin America makes up of our total gross written premiums has declined during the last few years and this is likely to continue to do so in the coming years.

BNamericas: Why is that?

Gerardo García: In Latin America we’re reducing our presence in the parts of the region that have catastrophic exposure. The frequency and severity of catastrophic events is increasing in Latin America as well as in other parts of the world. But this is especially true in Latin America since it’s one of the regions in the world with the largest exposure to catastrophic events.

There’s also another problem today in the Latin American reinsurance industry and that is excess capacity and falling rates.

So we’re increasing our reinsurance presence in Europe, and also partly changing our business model to include having our own insurance operations in the European market.

BNamericas: As you have said, the acquisition of insurance companies is now part of your planned expansion in Europe. How do you view the strategy of growing through acquisitions?

Gerardo García: In terms of acquisitions, it’s very important for us that we don’t seek growth for the sake of growing. We will always grow with a clear strategy that takes into account the medium-and long-term risk profile of our business portfolio.

And in terms of Europe, I think that we’re doing something that no other insurer or reinsurer in Latin America has done before. I don’t know of any reinsurer or insurer with Latin American roots that has expanded from the developing world to the developed world. Today this is something pioneering, but I believe it will be a trend in the long term.

BNamericas: How easy or difficult is it for a company like Barents Re to scale down its business in some geographical regions and increase it in others?

Gerardo García: As a niche and specialty reinsurer, we’ve a big advantage over the larger global reinsurers since we can move more quickly from one region to another in search of market opportunities and growth. As a reinsurance company you also have much fewer offices and employees than insurance companies do, and this is also something that makes it easier to move between different geographical regions.

About Gerardo García 

Gerardo García has more than 18 years of experience in both the insurance and reinsurance industries, with a strong focus on underwriting. In addition, he has served as an advisor for several insurance companies and reinsurance brokers across Latin America.

About Barents Re

Barents Re operates its global reinsurance business through several regional offices: in Miami for Latin America and the Caribbean, in Paris for Europe and in Beirut for the Middle East and North Africa. Barents Re underwrites business in a total of 51 countries.