Everest Insurance’s fine-tuning
After several years of rapid growth in
terms of its headcount and product
offering, Everest Insurance North
America, the specialty insurance operation of
the Everest Re Group, has entered a period of
fine-tuning the business and executing as the
rewards of the expansion start to filter through,
Mike Mulray, chief underwriting officer of the
business, told PCI Today.
Some four years ago, the company made a
decision to invest in growing Everest Insurance
through an organic growth strategy. This
involved a significant investment in new talent
across the company and the development of a
number of new specialty insurance products,
boosting its growth.
“We have completed the build-out phase, we
are now executing and we are starting to see the
benefits filter through in the P/L,” Mulray said.
“The good thing is that because our growth
has been purely organic, we have retained client
focus. There has been no disruption because of
In terms of where he sees opportunities
for growth, he said risk management casualty
business in the US looks promising, as do lines
including political risk, trade credit risk and
reps and its warranties business.
Everest is also seeing opportunities in the
European market since it formed a subsidiary
in Dublin, Everest Insurance Ireland, a year ago.
Mulray said this is partly because of the shakeup
occurring at Lloyd’s where uncertainty
around the capacity available in certain areas
next year has forced brokers to seek alternative
“There has been a knock-on effect where
a combination of that and Brexit has caused
uncertainly in the market. We are seeing
opportunities as a result of both,” he said.
Since the expansion, the company is now
relevant to a wider range of clients.
“We do not want to be everything to
everyone but we have something for everyone,”
he said. “We will remain focused on our clients
and nimble in our execution.”l
ILS investors in double flight to quality post-loss creep
There has been a ‘double flight to quality’
by investors in insurance-linked securities
(ILS) funds as a reaction to the losses
of 2017 and specifically the inability of some
ILS funds to get a handle on the extent of their
exposure to the losses, Jutta Kath, chief operating
officer, Secquaero Advisors, told PCI Today.
A number of ILS funds have had to
significantly increase their loss estimates in
2018—especially in relation to their exposure
to Hurricane Irma. This so-called loss creep
combined with the lack of rate hikes in the last
renewals has left some investors in ILS funds
But, Kath said, funds such as Secquaero,
which got their loss estimates correct the first
time around, have benefited from this dynamic
and the increased scrutiny of investors.
“Investors have educated themselves to a
much higher level now and there has been a
flight to quality,” she said.
“Investors increasingly want to know more
about a fund’s interaction with cedants; if
they are going to get a handle on losses, that
is important. But they also want to know more
about who the cedants are. Some are better
than others; we are seeing a double flight to
quality in that sense.”
She noted that Secquaero took a hit
relatively quickly after the hurricanes based
on its actuarial estimates and application of
its own knowledge—as opposed to waiting for
cedants. “We took a hit and some criticised us
for that but we never had to correct it and that
reveals a distinction in the market,” Kath said.
She said she resented the implication
sometimes made that ILS investors are
uneducated or naïve to the risks they are taking.
“That has never been the case. Some
investors simply view these risks differently
and are willing to price them in a different
way,” she said.
“That said, we agree rates should increase
and there should be better underwriting
discipline across the board. We live in hope of
Kath added that she is receiving a growing
number of enquiries from cedants interested
in using ILS capacity on risks outside of the
short-tail property-cat space.
“We have always seen ILS as having a
wider application. That is why we have a fund
dedicated to life business. We are starting to see
more discussions around new risks,” she said. l
He said the process has also meant
restricting capacity in some areas that were
unprofitable. For example, it has moved out of
non-standard auto business, which no longer
met its expectations for returns.
“This was a big line but exiting it showed
our discipline,” Mulray said.
PCI Today Day 3 Tuesday October 30 2018