Interview: William Fawcett, Haverford (Bermuda)


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21.10.14 TUESDAY


Competition means more deals


Its unique offering has meant a flying re-start for property/casualty reinsurer Haverford (Bermuda) as William Fawcett, its chief executive, explains. In traditional reinsurance arrangements,


ncreased competition in the reinsurance markets has triggered increased deal flow


for property/casualty reinsurer Haverford (Bermuda), to the extent it has had to turn some opportunities away, William Fawcett, the company’s chief executive, has said. Formed in 1993, Haverford (Bermuda) is a


Class 3A reinsurance company based in Hamilton, Bermuda. When Flagstone Reinsurance was active, it only passively underwrote business. After the sale of Flagstone, it re-started active underwriting. Fawcett believes the company’s innovative


approach combined with a focus on underwriting discipline and sustainable pricing means it is very attractive to cedants wishing to make changes to their panels in the current market. “As a result of the more competitive market


we have been seeing an increased amount of deal flow,” Fawcett said. “We’ve had to turn down many opportunities and will continue to look at new opportunities after the renewals to write our planned volume. “We strongly believe that longer term focus


on underwriting discipline and sustainable pricing is the right


foundation to build our business.


Flexibility in overcoming prejudices against specific markets and an open eye for new developments helps us to find the right opportunities.” He acknowledges that, to a large extent, competition has been driven by an influx of capital into the market from alternative sources. But he said he has been keeping a close eye on how this dynamic may unfold and he sees potential opportunities in this for Haverford (Bermuda) Limited. “We have been watching this with interest.


The most immediate effect has been that the alternative capital is competing for the same business as traditional reinsurers, and undermining rates,” Fawcett said. “We believe that the longevity of the


alternative capital providers will depend on overall financial markets. In a soft market we’ll have to see whether they will achieve good returns and be willing to wait out the cycle. We expect to see capital flowing out of the market once major catastrophes happen and the global interest rate environment changes.


he acknowledges, prices are soft in many lines of business but he stresses that the company will participate only in business it judges to be priced adequately. This will be a key element of negotiations in Baden-Baden, he said. “It has caused us to be more selective in our risks—we will not chase market share in a poor pricing environment. “Our model allows us flexibly to focus


William Fawcett, St Bernard Assure


“We like some of the creative things that can be done with new sources of capital; we remain fond of cat bonds and sidecars.”


“We are interested in alternative capital for


opportunities which exceed our current appetite. In all instances, however, the pricing must be right. We like some of the creative things that can be done with new sources of capital; we remain fond of cat bonds and sidecars. “For some of the more creative opportunities,


alternative capital helps us to secure a relationship. To facilitate this we plan to prepare an adaptable structure in 2015 or 2016 that allows us to be opportunistic depending on market developments,” Fawcett said.


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more on the direct insurance (through our sister company, St Bernard Assure) or the reinsurance sector depending on the outlook and performance of each segment. Of course the main challenge remains to select the right partners and markets to achieve long-term sustainable growth and profitability.” His own focus will be on renewal pricing, an assessment of its 2014 performance and the search to establish new strategic partnerships for the future. “Haverford is open for business; and we are willing to be creative,” he said. “We also want to maintain our good


relations with key cedants, with the possibility to evaluate new opportunities and renewal terms meeting our expectations.” Fawcett has two distinct agendas in Baden-


Baden: to seek new reinsurance business and to negotiate with Haverford’s own reinsurance partners. “We are seeking both—because we are entering additional markets in direct insurance we look for structuring our own reinsurance on the basis of our overall portfolio,” he said. The other trend he notes in relation to


the European market is around the effects of Solvency II. “In the European market we are seeing some effects of Solvency II capital requirements on the behaviour of our competitors, which creates opportunities for us. Technological development has a direct impact on our expense ratio in some markets and this again creates opportunities for us,” he said. n


William Fawcett is the chief executive of Haverford (Bermuda) Limited. He can be contacted at: william.fawcett@ haverfordbermuda.com


DAY 2: Tuesday October 21 2014 | BADEN-BADEN TODAY | 19


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