News


pecialist broker Capsicum Re is looking to keep growing as it approaches the end of


its second year of operation. The company was founded in December


2013 by Grahame Chilton, the former head of Benfield, and Rupert Swallow. “The genesis of the company had been when


Grahame and I had identified an opportunity in the reinsurance intermediary marketplace to provide and challenge to the status quo there,” Swallow told Monte Carlo Today. According to Swallow, the company has


seen rapid growth and now has more than $25 million in revenue, having placed its first business in June 2014. Capsicum Re was established in partnership with Arthur J. Gallagher which, while being a broker itself, did not have a reinsurance subsidiary and was able to provide Capsicum


WEDNESDAY 16.09.15


Capsicum Re seeks further expansion S


with all it needed to start business straight away. The company now has six business units


established, dealing with property, casualty, marine & energy, facultative, specialty and capital & structured solutions. It has offices in Bermuda and London. Swallow described business at Capsicum Re


so far as “very entrepreneurial”, and stressed that the company was still seeking to grow, attracting the right people and adding new business units for areas that remain confidential. He also said that because the company was


still building its business he was quite agnostic about the current state of


the reinsurance Rupert Swallow


Appleby stresses areas of concern M


erger and acquisition (M&A) activity, insurance-linked securities (ILS) and


regulatory changes caused by Solvency II and Solvency II equivalence, have been the biggest talking points in Monte Carlo, said Timothy Faries, partner at Appleby. Faries said that the number of high-


profile M&A transactions had made 2015 an interesting year so far, and that Bermuda’s reinsurance market was changing rapidly. According to Faries, the


Bermudian


regulatory authorities will be providing further information about changes to the solvency regulations on the Island, made in response


market cycle, which tends to be the main topic of discussion at the Rendez-Vous. He said that may change once Capsicum Re had built itself to the point where the market cycle affected it. n


to Solvency II, in October. He added that there were still some areas of uncertainty over these, partly because of the fact that Solvency II itself is still being tweaked by European regulators. Turning to the M&A activity, Faries said


that Appleby had been at the centre of almost all the deals on Bermuda, which had required a wide range of legal expertise. Appleby has also been closely involved in


the burgeoning cat bond market. “The ILS market has grown so much over


the past four years,” he said. He added that one way the market has changed is that market


Insurers are vulnerable to new risks I


nsurers are vulnerable to risks they do not understand, said Sandip Patel, global


industry leader for insurance, healthcare and life sciences, IBM.


He was speaking at the Rendez-Vous de


Septembre’s presentation debate called Industry 4.0: Will insurers participate in the expected upswing or will they miss the boat, which was hosted by Torsten Jeworrek, member of the board of management, Munich Re. He claimed that this lack of protection is


Timothy Faries


participants are now a lot more familiar with the way that ILS products such as cat bonds work, indicating a degree of comfort with them. n


causing a “white space” in the industry, which is leaving insurers at risk. Patel named five key risks to the industry: cyber,


arising from a high reliance on IT and connected systems; business disruption, either natural or cyber; macro-environment risk; reputation risk, through situations such as data loss, which can result in loss of revenues; and talent risk. “The challenge we have as an industry


is first to understand these risks; second and more important is to think about which of


26 | MONTE CARLO TODAY | DAY 4: Wednesday September 16 2015


these are threats to our business which we need to proactively manage and then to develop opportunities for new revenue,” said Patel. The expert


claimed that “exacerbating” these globalisation risks, because is they are


manifesting themselves in different situations and industries, which is having a “cascade” effect. He claimed that there is a serious need for


“communication across supply lines” and risk mitigation strategies that are supported by predictive analytic solutions to help risk prevention.n


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