News n increasing percentage of large US “Similar to property-cat, shared property-catastrophe placements are being


made with collateralised markets, James Kent, co-president, Willis Re and president of Willis Re North America, told PCI Today. He said that on 10 of the largest Willis Re North America property-cat placements this year, more than a third of each was placed with the collateralised markets including cat bonds. He acknowledged that alternative capital—now


worth 15 percent of the total $425 billion dedicated reinsurance capital worldwide and largely put to work through collateralised structures—is inducing pressure on the traditional markets with regard to pricing, particularly that of US property-cat. But, he added, the traditional markets for the large part are still driving pricing overall. “Certain commentary has raised the notion clash between


of the the alternative and


traditional markets but in reality, the traditional markets are using the insurance-linked securities (ILS) markets for retrocession protections and supporting their


own portfolios—embracing


alternative capital rather than fighting against it,” Kent emphasised. On the traditional side, he acknowledged a


further stratification of the market as tier one reinsurers strive for market share and larger buyers are responding favourably to this. He also noted that the larger, global, buyers


continue to consolidate long-tail lines and the trend continues towards clients purchasing single placement structures.


limit maximises buying efficiency while bigger balance sheets allow insurers to retain more risk,” he said. The other big concerns for PCI


27.10.15 TUESDAY


Collateralised markets’ grip on cat business grows A


needs ultimately


delegates this week will be around pricing and further consolidation, Kent said. “The current


state of the James Kent


market in terms of pricing is, as always, a main topic. The wave of mergers and acquisitions (M&A) activity and the continued influx of capital from non-traditional sources and the effect this is having on our sector are also key points of discussion,” he said. With regard to pricing specifically, he said the


downward pressure on pricing continues, albeit at a ‘softer’ rate. “We saw the easing of pricing declines


particularly in Florida at the mid-


year renewals this year—a result of increased demand from carriers as well as the Florida Hurricane Catastrophe Fund coming into the private market, while capital supply from both the traditional and the non-traditional markets stabilised for peak property-catastrophe zones,” he said. “A number of markets are showing pricing discipline by cutting the


capacity they are


prepared to offer as rates have continued to soften. However, overall, supply comfortably outstrips demand across most business lines with the favourable buyer’s market continuing through


global


the year, absent any major loss activity.” In terms of consolidation,


Kent said Willis Re expects the consolidation trend to continue. “Market


drive


market activity and the current M&A activity is largely a result of increasing market


demand


for larger, more diversified and strategic


reinsurance


partners, as well as wider market pressures of seeking growth beyond existing portfolios of business,” he said. “This trend comes as buyers have become


increasingly sophisticated with regard to their reinsurance purchasing, seeking more than just capacity providers on their programmes. There is still room for the smaller players, however. Choice is an important component of our market and most clients, although consolidating their panels, still recognise the importance of having several partners rather than relying on a handful of tier one companies.” He added that for all the challenges facing


the market, it was also a broker’s job to highlight opportunities. “We


see growth opportunities for the


industry across the US in many areas, such as regional and accident & health business, and in developing products and solutions to address the risks around cyber, flood, mortgage and crop. It’s certainly not all doom and gloom,” Kent said. n


Fidelis poaches from Catlin, Amlin Bermuda; appoints Bermuda CEO F


idelis Insurance has hired three senior executives, one of whom, Ben Savill, joins


as the company’s Bermuda chief executive officer. He comes from Amlin Bermuda where he led the North America Market Unit. In this role he was responsible for underwriting Amlin’s US reinsurance property portfolio and managing the unit’s specialty lines business. Nick Burkinshaw joins as chairman of specialty from Catlin where he was active


10 | PCI TODAY | DAY 3: Tuesday October 27 2015


underwriter of Syndicate 2003 and chief underwriting officer, London. Richard Holden joins as head of North American Underwriting. He was previously a leading class underwriter for Amlin Bermuda. The three join Fidelis’ underwriting team


of Dan Burrows, Philip Vandoninck, Richard Coulson and Ben Fortune, under the leadership of Richard Brindle, group chief executive. “Fidelis has made exceptional strides since launch. However, the realisation of our strategy and ambitions


depends on the continual enhancement of our team and the appointment of exceptional underwriters who understand the cycle,” Brindle said. “Success in today’s specialist insurance market


requires innovation, a clear direction and the provision of targeted bespoke solutions. Nick, Ben and Richard have consistently marked themselves out as some of the market’s leading underwriters. They have built their reputations on challenging outdated practices and working to forge lasting relationships by providing better solutions for clients.” n


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