This document contains certain forward looking statements which are subject to assumptions, risks and uncertainties; actual future results may differ materially from those expressed in or implied in such statements. Many of these assumptions, risks and uncertainties relate to factors that are beyond Barents Re’s ability to control or estimate precisely. The forward looking statements reflect the knowledge and information available at the date of preparation of the Annual Report, and will not be updated during the year. Nothing in this Annual Report should be construed as a profit forecast.

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Welcome to the Barents Re Reinsurance Company
2016 ANNUAL REPORT
RESILIENTRESPONSIVEREINSURANCE

Barents Re at a Glance

BARENTS RE AT A GLANCE

 

Barents Re is a leading independent reinsurance group. Established in 1996, Barents Re has a well-established presence in Europe, Latin America, the Middle East and Asia. This translates into more than 600 reinsurance connections in 70 countries.
 
The company provides a wide range of niche and specialty reinsurance products to property and casualty insurers. Our vision is for Barents Re to become an integral part of the insurance value chain. The expertise of our specialty underwriting teams and their knowledge of our markets and products enables us to offer innovative solutions to our clients.
 
Barents Re does not participate in every type of business because underwriting discipline is fundamental to its success. On the commercial side, Barents Re is especially strong in Bonds, Energy, Financial Lines, Renewable Energy, Property, Liability, Marine Cargo, Life and Accident & Health. The company selectively provides treaty support in key business areas. Barents Re is also a growing presence in the Consumer arena with participation in a number of Affinity programs. The Barents Re portfolio is exemplified by low severity risk.
 
Barents Re seeks to create value for shareholders by generating an underwriting profit. To achieve this, the company allocates capital in line with risk exposure and potential underwriting returns. This is crucial to maintaining its strong financial position and supporting its business expansion. Barents Re’s investment strategy is focused on high grade bonds tailored to underlying insurance liabilities, with an allocation to alternative investments.
 
Barents Re is committed to providing the highest level of service to its clients and brokers, which it believes is critical to its ability to build and maintain long-term relationships and ensure its continued success.

 

Message from the President & Board of Directors

MESSAGE FROM THE CEO

Barents Re celebrated its 20th anniversary in 2016 and I am delighted to announce a solid set of financial results to commemorate this auspicious occasion. We generated a net profit of USD 19.3 million which equates to a very healthy 31.5% net profit margin. Our total assets increased to USD 515 million (2015: USD 453 million) and Shareholders’ Equity rose to USD 430 million (2015: USD 382 million). We are very satisfied with our 2016 results as, once again, we achieved our primary financial objective of retaining a strong balance sheet with excellent capitalisation.

As has been the case for many years, the combination of slow economic growth, low interest rates and intense competition were the prevalent drivers of financial performance in the reinsurance sector in 2016. As evidenced across the reinsurance sector, financial performance in 2016 was in part driven by a higher loss burden and a reduced contribution from prior year development.

Despite these challenges, Barents Re maintained its strategic course to deliver superior client service and shareholder value. One of the constant features of our business is the focus on managing severity and remaining outside of high frequency business. Furthermore, we withdraw from inadequately priced accounts as we will not compromise on underwriting discipline.

This consistency of approach coupled with the experience gained from managing the peaks and troughs of the cycle, punctuated by financial crises and catastrophe events, means we have been able to steer a steady course through the prolonged soft market. Whilst others may have fallen by the wayside, Barents Re remains a resilient partner for our clients.

The strength of our relationships with clients and business partners instils huge confidence in our continued ability to deliver on our strategic objectives. Our track record allows us to obtain superior quality retro cover and the fact that we have worked with most of our retro partners for over 10 years is testament to the belief that they have in our business model and our ability to deliver on our strategy.

We were able to celebrate a number of achievements in our twentieth year. Foremost amongst them were the announcements from A.M. Best in November which affirmed our Financial Strength Rating of A (Excellent) Stable Outlook for Barents Re Reinsurance Company, Inc. and assigned the A (Excellent) Stable Outlook Financial Strength Rating to Barents Reinsurance S.A., our recently established Luxembourg subsidiary company. Barents Reinsurance S.A. is the vehicle to manage our international development and is now underwriting international new and renewal business. To achieve the A (Excellent) rating at the first time of asking is an outstanding achievement which is testament to the company’s financial management and our ability to provide substantial capacity for our clients’ benefit over the long term.

As well as reflecting on the achievements of the past year, this is also an opportune moment to look to our future. In 2017, we will bring on board experienced and highly regarded underwriters to expand into those business lines where we can build a niche-product strategy that is focused on profitability and not on market share. In keeping with this strategy, we will expand into Marine Cargo and Renewable Energy. Renewable Energy will complement our highly-regarded Energy business, notably for hydrocarbon exploration and production companies, which has gone from strength to strength in recent years. Our reputation means that we continue to attract top quality personnel from around the world.

I would like to close by stating my gratitude to our excellent staff without whom we would not be the success story that we are today. We have a clear and proven strategy of being a niche player that is responsive to the needs of its clients. Our people make the achievement of this strategy possible. I am enormously proud of the company we have built together over the past two decades and I am very confident about our future.

We look forward to working with our clients and business partners throughout the coming year.

Gerardo García
President & CEO

BOARD OF DIRECTORS

GERARDO GARCIA

Chairman

Gerardo Garcia has over 20 years’ experience in insurance and reinsurance. Prior to joining Barents Re, he was an advisor to insurance companies and reinsurance brokerage firms throughout Latin America. He has an actuarial background.

 


 

KLAUS BULTMANN

Director

Klaus Bultmann has more than 40 years’ experience. Previously, he was a member of the board of Gerling Global Reinsurance and Frankona Re.

 

 


 

DIRK BORMANN

Director

Dirk Bormann has wide experience in the construction sector and has served on the board of directors of Philipp Holzmann AG, Hochtief AG and Wayss & Freytag. He is Chief Executive Officer of the German Federal Association for Economic Development and Foreign Trade.

 

 


 

ROBERTO ALFARO

Director

Roberto Alfaro’s career encompasses finance, politics and diplomacy. Previously, he was President of Union Group and Compañia de Seguros. Mr. Alfaro has also served as Panama’s Minister of Commerce and Ambassador to the United Nations, Italy and the Vatican. Currently, he is associated with Interglobal Consulting.

 


 

JUAN M. DE LA SIERRA URQUIJO

Director

Juan Manuel Urquijo is an international businessman and company director. He served on the boards of Urquijo Leasing S.A. and Banvivienda Bank for many years. He was also a director of Mundial Insurance Group in Central America for 20 years, until it was sold to Mapfre Central America.

 


 

ROBERT KOFFLER

Director

Mr. Koffler has 30 years of experience in global capital markets, and since 1999 has been the Chairman and Chief Executive of BiscayneAmericas Advisers LLC in Miami, Florida. Prior to joining BiscayneAmericas, he was the President and Director of Americas Trust Bank, Director and Executive Vice President of Vestrust Securities Inc.

 


 

ROBERTO BRENES

Secretary

With more than 30 years of experience in the financial market, Mr. Brenes has an extended career in the capital market in Panama, combining business and regulatory experience. He was the first President of the National Securities Commission, President of the Panama National Bank and Founder of the Panama Stock Exchange.

 


 

RICARDO CAZORLA

Treasurer

Ricardo Cazorla is a banker whose prior experience in the international banking arena includes the positions of Vice President at the Chase Manhattan Bank NA in Panama, Vice President at Bladex, the Foreign Trade Bank of Latin America, and Vice President at Credicorp Bank.

 

 

 

Timeline

TIMELINE

1996
2009
2010
2011
2012
2013
2014
2015
2016
Please rotate the dial to the desired year to read further information.

Key Financial Ratios

KEY FINANCIAL RATIOS
GROWTH IN
SHAREHOLDERS’ EQUITY
  • 2016  USD 429,883,822
  • 2015  USD 382,180,815
  • 2014  USD 349,571,474
2014
2015
2016
continue to Financial Highlights >
KEY FINANCIAL RATIOS
Financial Highlights
continue to Premium by Region >
KEY FINANCIAL RATIOS
Premium
by Region
  • EUROPE 67%
  • LATAM 14%
  • MIDDLE EAST 10%
  • ASIA 9%
67%
14%
10%
9%

Global Network

GLOBAL NETWORK

  • LONDON (**)

  • LUXEMBOURG (***)

  • MADRID(**)

  • MILAN (**)

  • MOSCOW (*)

  • PARIS (*) (**)

  • ROME (**)

  • MIAMI (**)

  • PANAMA

  • BEIRUT (*) (**)

  • 1st Floor, 10 Fenchurch Street
    London
    EC3M 3BE
    T +44 203 445 1058

  • 6 Rue du Fort Bourbon
    L-1249 Luxembourg
    Tel. +352 27 86 33 40

  • Paseo de la Castellana 60,

    2da Planta
    28046 Madrid
    Spain
    T +34 (9) 1123-9770

  • Largo Augusto, 3

    20122 Milano (MI)

    T +39 (2) 7779 9337

  • 121151, Moscow, Russia

    Mozhayskiy Val Str. 8B

    T +7 (495) 287-3430

  • 80, Avenue d’Iena

    75116 Paris

    France

    T +33 (1) 5367-7000

  • Largo Fontanella Borghese, 19

    00186, Rome

    T +39 (6) 4550-665

  • 1111 Brickell Avenue

    Suite 2600

    Miami, FL 33131

    United States of America

    T +1 (786) 691-1671

  • La Rotonda Avenue
    Costa Del Este
    Prime Time Tower, 23rd Floor
    Panama
    T +507 301-0578

  • Martyrs Square

    P.O. Box 11-4963 Riad El Solh

    Beirut Central District

    Lebanon

    T +961 (1) 998-772/3/4

*Representative office/branch   |   ** Barents Risk Management network   |   *** Subsidiary

Global Strategy

GLOBAL STRATEGY

  • Organic premium growth & geographic diversification; focus on uncorrelated low exposure catastrophe territories & specialty products.
  • Recruitment of top quality personnel internationally; people are our key advantage.
  • Stable capacity, offering tailor made products and solutions in each of its territories.
  • Underwriting discipline & controls, reinforced by pricing & risk modeling tools.

Consolidated Financial Statements

CONSOLIDATED FINANCIAL STATEMENTS

Disclaimer

DISCLAIMER

This document contains certain forward looking statements which are subject to assumptions, risks and uncertainties; actual future results may differ materially from those expressed in or implied in such statements. Many of these assumptions, risks and uncertainties relate to factors that are beyond Barents Re’s ability to control or estimate precisely. The forward looking statements reflect the knowledge and information available at the date of preparation of the Annual Report, and will not be updated during the year. Nothing in this Annual Report should be construed as a profit forecast.