Behind the scenes: the capital that keeps insurance moving

This article forms part of CN&CO’s series covering The Insurance Conference Western Cape 2026. Across the series, we revisit the ideas, stories and conversations shared by the conference’s speakers, highlighting the insights that are shaping insurance, business and leadership in a changing world.

Many people understand insurance. Reinsurance, perhaps less so.

Yet behind many of the major losses that make headlines, and behind the ability of insurers to keep writing business after those losses, there is an international reinsurance market quietly absorbing risk, providing capital and helping insurance companies manage volatility.

Paul Griessel, CEO of Aon Re South Africa, has spent close to 40 years in that world.

Speaking at The Insurance Conference Western Cape, Paul set out to demystify reinsurance and explain how dramatically the profession has changed during his career. His central message was simple: modern reinsurance broking is no longer primarily about placing cover. Done properly, it is a strategic function that can give insurers the capital, clarity and confidence to grow.

From educated guesses to advanced analytics

When Paul entered reinsurance nearly four decades ago, the business looked very different. Brokers structured catastrophe and risk covers, surplus treaties and other programmes before taking them to a relatively small group of reinsurers, mostly in South Africa. Larger catastrophe programmes might occasionally make their way to European markets.

Pricing involved considerably more judgement than science.

“There was no catastrophe modelling and nothing resembling the analytics we have today,” Paul said. “You would take a placement into the market, work out a price between the broker and reinsurers and place the business.”

Today, reinsurance brokers have access to advanced analytics, catastrophe modelling, climate risk capabilities, predictive modelling and rating advisory expertise. The market itself has become truly global, with brokers potentially engaging with more than 100 reinsurers around the world.

That has fundamentally changed the role.

“We are increasingly part of the strategy of an insurance business,” Paul said. “A good reinsurance broker should be an extension of the leadership team.”

A reinsurer understandably needs to construct solutions within its own appetite, capital requirements and commercial objectives. An independent broker can explore multiple markets, appetites, structures and pricing options with the insurer’s broader objectives in mind.

“The goal is not simply to buy reinsurance at a good price,” said Paul. “It is to find the right capital solution for the business.”

The protection you don’t always see

The importance of reinsurance becomes particularly apparent when catastrophe strikes.

Paul pointed to the July 2021 civil unrest in KwaZulu-Natal and Gauteng, which produced enormous losses for Sasria and the insurance sector, as well as the devastating KwaZulu-Natal floods the following year. Consumers and businesses generally dealt with their insurers following these events. What they didn’t necessarily see was the reinsurance capital operating behind the scenes.

“Reinsurance doesn’t carry every rand of a loss, but it can carry an enormous part of the risk,” Paul explained. “That protection is what allows insurers to withstand major events and continue doing business.”

The value extends beyond simply paying a share of a catastrophe claim. After an extreme event, insurers need to think about what comes next: how much capital remains, what protection is required for the following year, how the programme should change and how much volatility the balance sheet can absorb. This is where Paul believes the strategic role of the broker becomes especially important.

Reinsurance allows insurers to transfer some of the volatility that could otherwise threaten their balance sheets. With appropriate protection in place, management can concentrate on the business of insurance: developing products, writing policies, serving customers and pursuing growth.

“Ultimately, we are there to provide capital solutions that support growth while controlling volatility,” Paul said. “That ability to manage uncertainty gives businesses confidence to pursue their ambitions.”

Technology changed the job, but not its foundations

The technology Paul encountered at the beginning of his career amounted largely to mainframes and manual data entry. Today, AI, sophisticated modelling and huge quantities of data allow reinsurance professionals to analyse exposures and predict potential losses with a level of accuracy that would have been unimaginable 40 years ago.

The job has changed accordingly. Paul joked that the old perception was that brokers worked hard through the three-month renewal season, then spent the rest of the year playing golf and travelling. That world, if it ever quite existed, is gone. Modern reinsurance broking involves long hours, complex analysis, year-round engagement and considerable international travel, with South African brokers now regularly engaging markets in London, Zurich and other global reinsurance centres.

Technology has made those connections easier, and the pandemic accelerated the adoption of virtual meeting platforms. But Paul is adamant that technology cannot replace one fundamental ingredient: trust.

“You can speak to clients and reinsurers anywhere in the world now, and that’s brilliant,” he said. “But a screen doesn’t build relationships in the same way. Insurance and reinsurance are still businesses built around people.”

Bring the broker in earlier

Paul’s advice to insurance companies and UMAs is to rethink when they engage their reinsurance brokers. Too often, reinsurance is treated as a transaction that takes place when a programme needs to be renewed. Paul believes the conversation should begin much earlier, as part of any decision to enter a new market, grow a portfolio, launch a product or change risk appetite.

“Bring your reinsurance broker into the conversation early,” he said. “Challenge them, use their expertise and insight and treat them as an extension of your leadership team.”

The tools are more sophisticated, the data is better and the markets are more global, but the purpose remains clear: helping businesses understand uncertainty, manage volatility and find the capital they need to move forward. And behind much of that work is a part of the insurance industry most people will never see.