Inreon sees limited deal volumes

The platform is currently seeing around four to five new postings a week, with the size of potential deals ranging from $30,000 up to $200,000, said a company spokesperson. A 'deal' could represent only part of a risk being taken on by a reinsurer. So far, around 30 potential risk deals, with a total premium value of $2.25 million, have been posted to the platform.

While activity has been limited compared with the market in general - a large reinsurer would typically work on about 500 deals at a time - an inreon spokesperson claimed the company is happy with activity to date. "We are on track compared to where we wanted to be. We, and the clients, are gaining experience and improving the system. And we expect volumes to grow."

Inreon, set up in December 2000, saw its first proposed risk deal posted in June this year. So far the company has 10 brokers and 12 primary companies in four different countries dealing through its platform. It currently has nine reinsurers on board, with around 15 buyers using the system.

Management believes activity will grow as the advantages of internet-based trading becomes more widely realised. "Internet transactions will cut down on the administration costs associated with reinsurance transactions. Currently administration costs can be as high as 30% of the overall premium. Dealing online could reduce this by up to 50%," the spokesperson claimed.

Reinsurers accepting business through inreon have to pay a fee for using the platform but are able to benefit through the increased distribution channels. Buyers themselves have the advantage of being able to deal with a broad range of reinsurers. "Inreon provides reinsurance buyers with a unique platform to access reinsurance capacity on a global basis," said Rob Bredahl, inreon chief executive.

At present reinsurers only offer facultative property contracts on inreon. These are single policies rather than treaty reinsurance contracts that cover portfolios of multiple policies, which generally command higher margins.

Inreon said it plans to roll out a wider range of products sometime later this year.