Culture critical to APAC growth
Understanding the cultures of
different markets in the Asia-
Pacific region is vital to success for
re/insurers operating in the region, Chris
Kershaw, managing director, Global Markets
at Peak Re, told Monte Carlo Today.
He explained that emerging markets
in Asia, namely China and India, are key
to generating significant growth for the
“Peak Re was not formed out of a market
dislocation, like the typical Bermudian player.
We were founded out of an intent to help the
economies and societies of emerging Asia
grow and to support its expanding middle
class,” he said.
“Over the next few decades Asia-Pacific
will remain the global growth engine for
insurance and reinsurance. We felt that it
wasn’t particularly well served by expertise
that understands it.”
Kershaw said the expertise and regional
knowledge within Peak Re comes from the
fact senior management have spent most of
their careers in Asia.
“The underlying growth in Asia-Pacific
will help us also to grow. Within that we have
two sizable economies—China and India—as
developing markets, and Japan and South
Korea are substantial markets as well.
“When you look at the population of
China and India, roughly 1.3 billion each,
they have very different demographics. For
example, in India 50 percent of the people are
under the age of 25.
“The approach we have to business needs
to fit the market being targeted. You’ll never
understand business if you don’t understand
culture,” Kershaw said.
The company puts a lot of emphasis on
understanding the needs of its clients, not just
in a reinsurance sense, but by understanding
what they need in the context of what is
happening in their countries, which includes
very large countries and much smaller ones,
Peak Re has organised various client
events in the market in China to present new
products for emerging cyber risk as well as
emerging liability risk.
“There are emerging casualty risks in that
market which we see as quite exciting from a
business perspective,” he said.
In India, the company has spent time
working with the local markets and presenting
its thoughts on agriculture.
“That’s important to us. Agricultural
insurance in India is fully governmentsubsidised
and is there to advance social
stability,” he concluded. l
Lloyd’s needs to become more relevant to its clients
Lloyd’s needs to adapt to become
more relevant to its clients, Michael
Papworth, head of Miller’s property/
casualty business unit and head of Asia, told
Monte Carlo Today.
“We are doing significantly less business
with Lloyd’s than we used to and finding that
to service our clients we have to throw the net
out wider,” Papworth said.
“We would like Lloyd’s to recalibrate
and become more relevant to our business,
as it was a few years ago. Across our global
portfolio we used to place some 30 to 40
percent of our business; today it’s probably
less than 10 percent.”
The team Papworth started at Miller is 10
years old in 2019 and he is proud of how the
business has grown.
“Everyone said it was impossible to set up a
smaller platform doing facultative that would
compete with Aon, Marsh, and Willis. Ten
years on I have a team of 120 people in five
offices. It feels fantastic—I’m proud of what
we’ve achieved,” he said.
“Our job is always to compete with the big
three brokers, so we have to be very nimble,
quick and adaptable. We are always looking
for innovation and for more efficient ways
of transacting reinsurance. Our people pride
themselves on very rapid service.”
His clients’ main concerns focus around
volatility, mainly within retention. They
have well established and structured treaty
placements, but within their retention there are
pockets of risk they are not comfortable with
and which cause earning volatility. This is where
facultative reinsurance provides the solution.
“Facultative is very effective at taking those
risks off the balance sheet,” Papworth said.
“The approach we take is to look at
portfolios and identify the outliers that cause
problems for clients. It’s often less than 5
percent of a portfolio that has any issues, but
that is our sweet spot.
Monte Carlo Today Day 4 Wednesday September 11 2019
“Balance sheet volatility is where
facultative now operates. A few years ago
it was used for capacity and capital but it is
mainly now a volatility tool—and it’s a very
efficient way of taking out issues around cat
or high risk industry,” he concluded. l