News


WEDNESDAY 10.31.12


Beware of the unknown – and of striking oil


The risks and losses that take the industry by surprise remain a big concern for US insurers, says Robert Hovland at Center Mutual Insurance Company, who also has a modern-day gold rush to contend with in the company’s main market.


the fear of the unknown and severe loss scenarios that have not yet been anticipated, which remain the biggest concerns for many US insurers. That is the view of Robert Hovland, the presi-


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dent of Center Mutual Insurance Company, a home, auto, and farm insurer based in Rugby, North Dakota, who will be sitting on a panel this Wednesday at the PCI conference covering regu- latory and legislative developments. He says regulation is a constant concern for small insurers that lack the resources to easily adjust to and comply with multiple regulatory demands. However, his biggest concern remains the risk of a major catastrophe or other type of loss that the industry has not prepared for. “What really keeps me awake at night is the


fear of unknown risks. While the 9/11 terrorist attacks remain the best example, every year it


espite recent advances made in the modelling and understanding of risks, it is


Hovland is also full of praise for the reinsurers


he works with, who he describes as very supportive. “I am always so impressed by the way they


Robert Hovland, Center Mutual Insurance Company


seems a loss occurs that the industry just wasn’t  storms. The latest example seems to be Hur- ricane Sandy. Then there are things like cyber 


On the acquisition trail


Argo Group is one of the most acquisitive insurers around – Mark Watson, its chief executive, explains why this works for the insurer.


 account. That is the view of Mark Watson, chief executive of Argo Group International Holdings (Argo), whose business continues to steadily buy specialist underwriting agencies, building up the breadth of its expertise in the process. “We remain one of the more acquisitive com-


S


- son says. “We use these deals to build up both products and distribution in the US market. We have done some bigger deals in the past but these smaller acquisitions remain important to us as we  Just days ago, Argo announced its acquisition of specialty programme manager Mattei Insurance


www.intelligentinsurer.com Mark Watson, Argo Group


Services. Earlier in October, it bought John Sutak  - try more than 25 years ago. It is now better known as WineRe. And in September, it bought Sonoma Risk Insurance Agency, a litigation solutions pro-


mall and medium sized businesses in the US continue to offer many opportunities for


vider which provides contract litigation insurance. Watson says Argo has become skilled at inte-


grating such businesses into the wider company. He notes that when targeting smaller businesses, it is better to buy the entire company with its dedicated products and distribution as opposed to only individuals or underwriting teams.       


are dealing with larger corporates, but the more specialised you get, the more sense it makes to        Watson says. “Often that will include technical  He says that Argo will continue its acquisitive


strategy in the medium term. “We currently com- plete around half a dozen acquisitions a year and I 


Wednesday October 31 2012 | INTELLIGENT INSURER —PCIAA TODAY | 9


“What really keeps me awake at night is the fear of unknown risks. While the 9/11 terrorist attacks remain the best example, every year it seems a loss occurs that the industry just wasn’t  modelled in-land storms.”


have such a handle on things even in our small      - try has been beaten in terms of losses, they have never tried to pass that onto us. They have been 


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