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“Excess capital in the reinsurance sector will stay there for as long as the returns in our business are better than other places that they could put their money.”

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grams on price. That’ll put strain on everybody and the end result will be some loss of jobs.” And while business is not migrating to JLT Re – yet – “it’s early days”. Mr Nickerson also laments the lack of service he believes brokers are currently providing in the local market. “It’s become all too easy to send in submissions via email. Even in a small market like Sydney, brokers have decided not to get off their bums and come in with the slips.” He attributes the change in working habits to convenience, laziness and the drive for efficiency, but warns that brokers get better deals “when they get out and about”. “The good brokers are a dying breed. There’s nothing like old-fashioned broking and I think at some point the broking houses will recognise that and start to get their people out and about again.” He says that old-fashioned approach is something that continues to be instilled in staff at Berkley Re Australia. “We tell staff, ‘Shake the tree, shake the tree, shake the tree’! It’s amazing what you get when you go out and see someone.” It’s not the only old-school thing about the way Berkley Re does business. Mr Nickerson says the Berkley strategy of having a local presence in the market rather than servicing markets from offshore locations is “a very old-fashioned model”, but it is exactly that which attracted him to the organisation in the first place. “It’s the reason I joined them,” he says. “That’s what I’ve been used to in my career, and it’s been an absolutely fabulous fit.” Perfect match aside, Mr Nickerson is looking forward to his semi-retirement, where he can continue to do business, inspire younger reinsurance staff and even sit back a bit and contemplate what has been – by any measure – a stellar career. “Most of my mates are retired,” he says. “It’s time I spent a bit of time with them on golf courses.” insuranceNEWS

August/September 2013

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Mr Nickerson says the well-documented excess capital in the reinsurance sector is affecting rates, but again, he’s seen it all before. “It’ll stay there for as long as the returns in our business are better than other places that they could put their money,” he tells Insurance News. “Maybe this year it’ll get tested at some stage if the losses occur.” Having witnessed much market change, Mr Nickerson remembers that 20 years ago there were more than 30 reinsurers licensed and based in Australia. But takeovers, corporate collapses and market exits have taken their toll – and not necessarily for the worse. “We now have fewer than 10, but we have more capacity.” He says despite the loss of two-thirds of the reinsurers who used to operate here, the local market remains well serviced. Some business is still necessarily written offshore, either due to its size, companies seeking diversity to spread their reinsurance risk or as a part of global programs. “You can’t get away the big cat programs here in Australia – that’s not going to happen. The smaller ones always could, but they like the diversity and the brokers like the diversity as well.” One recent development in the local reinsurance broking market that has him scratching his head is the recruitment drive undertaken by JLT Re to rebuild its treaty broking team, which has resulted in a defection of staff from other major brokers. “It’s created a domino effect where the other traditional broking houses have to replace those people, but for me the economics in this don’t work,” he says. With a finite market for reinsurance in Australia, Mr Nickerson says the only way JLT Re’s new team is going to be able to attract business is by reducing fees. He says the result will be “having to attack pro-

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Profile for Insurance News (the magazine)

AUG/SEP 2013 - Insurance News (the magazine)  

The insurance centre of London is our focus in the latest edition of Insurance News (the magazine). We’ve got an exclusive in-depth intervi...

AUG/SEP 2013 - Insurance News (the magazine)  

The insurance centre of London is our focus in the latest edition of Insurance News (the magazine). We’ve got an exclusive in-depth intervi...