Steering NewRe through the Covid-19 stress test

10 March 2021

NewRe's chief risk officer (CRO) Christian Dahmen was highly commended in InsuranceERM's 2021 awards. He tells Ronan McCaughey how he has overhauled the reinsurer's risk management function and emerging risks to monitor

Christian Dahmen

NewRe's chief risk officer (CRO) Christian Dahmen is highly commended in the CRO category of this year's awards for the key role he has played in guiding the Zurich-based reinsurer through the Covid-19 pandemic, as well as expanding its risk management capability.

Thomas Braune, chief executive of NewRe, which is a subsidiary of Munich Re Group, describes Dahmen as a "CRO with an outstanding business-centric focus who enables the sustaining growth and success of NewRe".

NewRe says it has begun 2021 financially solid after coming out of 2020 relatively unscathed – and Dahmen has made a major contribution in securing this success.

The reinsurer says several initiatives led by Dahmen since 2018 have been key to establishing a robust and sustainable platform for growth in life reinsurance and derivatives. One example is the development of an internal model and securing its approval for all underwriting risks under the demanding Swiss Solvency Test regime in 2020.

Equally important in this growth strategy has been the expansion of the reinsurer's own risk and solvency assessment (Orsa) process and risk strategy.

Dahmen positioned NewRe's Orsa report as the central discussion point for all NewRe's decision makers.

He says: "In order to facilitate discussion with directors and other stakeholders, we had to realign the entire risk management framework in view of NewRe's very strong growth in 2020.

"Covid was one thing, but last year was also a decisive year in terms of our growth story in life reinsurance and derivatives. Last year we on-boarded life reinsurance business with present-value claims of $8bn.

"Also on derivatives, we doubled the book of variable annuity business we reinsure in terms of value-at-risk, so that was very strong growth. To sustain that growth, it was vital for us to secure internal model approval for this life reinsurance and derivatives block of business."

He adds: "We had to substantially overhaul the methods we used on risk modelling and validation for this business and we pulled together experts from NewRe and Munich Re.

"The outcome was we managed to successfully gain approval for the internal model for life reinsurance and the derivatives business. And we have laid the basis for continuing the growth path."

Dahmen says the Orsa was really the platform "where we developed a structured discussion on risk appetite and the roadmap for pursuing this growth".

"That is very unique because normally the Orsa process would follow the strategic discussion, and in that instance, it helped to facilitate it."

Dahmen also played an important role in helping NewRe to win modelling team of the year in the InsuranceERM UK & Europe awards 2018-2019. 

Staying on modelling, Dahmen says the pandemic has highlighted the value of having a fast and modern architecture for capital modelling.

He explains in the months following the surge in Covid-19 infections NewRe had to run about five times as many solvency and capital management reports as it would do in a normal year.

Asked about emerging risks, Dahmen says: "One thing on my radar is antimicrobial resistance. It is a topic that has been getting more press recently, especially because the World Health Organization has declared it as one of the top risks for humanity."

As a risk professional with a track record in shaping business-centric risk management functions, Dahmen also has sage advice on leadership.

He says: "Invest in your team and empower them. This will enable you to really influence the business and participate in strategic discussions."