Interview:


John Pilkington, Barbican


lthough the company has faced some trying market conditions over the past


year and a half, Lloyd’s of London syndicate Barbican is now ready to take advantage of opportunities the current environment presents. That is the bullish view of John Pilkington,


deputy active underwriter at Barbican Syndi- cate 1955. “The last 18 months has been char- acterised by an unprecedented level of interna- tional and US natural catastrophe losses which hit profits across the entire insurance market, and Barbican was no exception,” he says. “This, together with a continued soft mar-


ket, surplus capacity, and low investment re- turns, has meant that achieving top line growth has been very difficult. However, we have built a solid core account since 2008 by investing in talented and experienced underwriters to write a broad range of reinsurance classes where we are recognised as providing market-leading ca- pabilities for international casualty reinsurance, marine reinsurance and North American casu- alty reinsurance. “We have deliberately built the business


slowly and methodically and our income from reinsurance lines is now £90m, which is 50 percent of our overall stamp. These classes pro- vide an all-important balance to some of our insurance classes and due to this diversity we are able to minimise the effect of adverse mar- ket conditions by deploying capacity based on market opportunity and profit. This also leaves


catastrophe risks in certain territories and have read- justed our book for 2012,” says Pilkington. “We are still committed to all re- insurance segments, but our property reinsurance portfolio will be focused on a limited number of perils and territories. At the same time we’re look- ing to reduce our reliance on outwards reinsurance in these classes as this has not been cost-effective. “Also, we’re


not im-


mune from the continued poor economic climate. Apart


impact that trading


tough conditions—


caused by low interest rates and a continued soft market—have had, some of our casualty classes are also affected by reductions in client


turnover and


from the general the


24.10.11 MONDAY


Seeking growth in a difficult market A


Despite market conditions, Lloyd’s syndicate Barbican has its sights set on growth says John Pilkington, deputy active underwriter at Barbican Syndicate 1955.


John Pilkington, deputy active underwriter at Barbican Syndicate


wage roll, which in turn have a negative impact on our ability to gener- ate premium income growth. “While we’re maintaining our capacity at £180m for 2012, which we feel will reflect mar-


“This, together with a continued soft market, surplus capacity, and low investment returns, has meant that achieving top line growth has been very difficult.”


us well positioned to grow the business when the market eventually turns.” Although it is now ready for growth, Bar- bican Syndicate 1955 also faces a number of challenges. The losses caused by recent catas- trophes such as the New Zealand and Japan earthquakes have affected the company’s re- sults. But the syndicate has reviewed its busi- ness and risk appetite and is now ready to tar- get growth once more. “Like most reinsurers we have reviewed our risk appetite for natural


ket conditions for much of next year, we feel that the overall long-term outlook is improving, with rate increases in property re and marine re leading to improved prospects for a broader up- ward rate movement. We also see the trend of reinsurers releasing reserves, which has helped to keep rates down, coming to an end. We ex- pect this will ultimately lead to market change and better trading conditions,” says Pilkington. Barbican is aware of the opportunities wait- ing to be grasped. “With a Lloyd’s syndicate


4 | INTELLIGENT INSURER —BADEN-BADEN TODAY | Monday October 24 2011


at the heart of our business we will continue to support the Lloyd’s strategy of maintaining underwriting discipline and focusing on profit,” he says.


“In terms of future development, it will be


essential for Lloyd’s to maintain its position as a leading centre for specialist reinsurance busi- ness. The whole market faces a number of chal- lenges in this respect, with the development of regional reinsurance centres potentially cutting off business flow to London and global reinsur- ers establishing platforms outside the Lloyd’s market in locations such as Bermuda, Switzer- land and the US. We must therefore work with Lloyd’s to ensure that the benefits of the market are understood and that together we continue to attract business. “Part of this strategy will involve continued


diversification of the business through a central proposition which provides clients with a broad range of classes and products.”


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