Buyers seek extra protection after scare
Some insurers are looking to strengthen
their reinsurance programmes in the
aftermath of hurricanes Irma and Harvey as
they fear being underexposed with so much of
the hurricane season still to run.
Alexander Craggs, head of reinsurance at
Antares Managing Agency, said he had seen
several types of activity from buyers in the last
couple of weeks. There were a couple of socalled
‘live cat’ opportunities late last week from
buyers looking to expand their programmes
vertically when it looked as though Hurricane
Irma could hit Miami as a Category 5. He was
not sure whether they were placed.
He had also seen buyers seek more
horizontal coverage in the past week as
insurers look to ensure their programmes can
cope if there is a third, fourth or fifth such
event this hurricane season, one such deal he
In addition to this quick coverage being
sought, Craggs believes some buyers will look
to tweak their programmes for the January 1
renewals, although they will now be doing so
against a backdrop of potentially hardened
rates, especially in loss-affected zones.
“The problem they may have is that a lot of
budgets have already been set for the renewal,
so they are going to have to be clever,” he said.
“In that situation, you might see buyers
increase their retention and use that saving
to buy more at the top of their programmes,
where you can buy more for the same money.”
Richard Anson, head of ceded reinsurance,
Antares Managing Agency, added that the
recent storms will aid buyers make a business
case for buying more coverage.
“Cat losses had been benign for some time
and this was a reminder that a $100 billion loss
can occur,” he said. “Buyers know the risks
but it reminds senior management in insurers
about the importance of reinsurance.”
Anson said that in terms of his own
programme, he was expecting a stable renewal
although he admitted the hurricane losses
could put upward pressure on rates in some
areas. Antares has restructured its programme
in recent years to use more composite, multiclass
Richard Anson (left) and Alexander Craggs
covers. This also meant some changes in
reinsurers, as not all want to write such business,
but the programme is settled again now.
On the underwriting side, Craggs said, he
is also seeking a fairly stable renewal in which
it supports existing clients and maintains the
balance it has achieved in the portfolio in recent
years. He said he expects at least a stabilisation
in pricing and maybe some upwards pressure,
and he is willing to support existing clients with
extra capacity if they are seeking to strengthen
He added that the company has started writing
more composite business in recent years, for which
there is a growing demand from cedants looking to
rationalise their programmes in the same way that
Antares has done in recent years. n
Argo continues to chart a steady course towards sustainable profits
Argo Group is continuing to build on
its success as it maintains a focus on
sustainable profits, according to Mark E.
Watson III, CEO Argo Group.
At last year’s Rendez-Vous, the company was
working on its acquisition of Ariel Re, which
finally closed in February 2017. Watson said the
businesses are now integrated.
“For all of 2017 until now, Ariel Re and Argo
Re have been operating in parallel fashion, and
now is the time to bring everything together,”
In February Ryan Mather, Ariel Re’s former
CEO, was appointed global head of reinsurance
for Argo; Matthew Wilken, the deputy head of
Ariel Re, was appointed president.
“I want to make sure we can integrate the
capital supporting all of our business together
instead of in two separate pools. I’ve been focused
on that since coming here—I’ve been more in
buyer mode than seller mode,” Watson said.
In his view Irma will be manageable for the
industry and he was focusing discussions on
restructuring capital to support Argo Group’s
2018 business plans.
Looking to the future Watson said Harvey
and Irma had illustrated some of the potential
opportunities for those ready and able to take
them. He stressed that the area affected by the
storms was just a small part of Argo’s business.
Whereas in its early years Argo Group
enjoyed fast growth, it has now grown to the
point where it can be more selective in where it
chooses to do business, he concluded. n
Mark E. Watson III
8 | MONTE CARLO TODAY | DAY 4: Wednesday September 13 2017 www.intelligentinsurer.com | www.bermudareinsurancemagazine.com