News
Patria Re sees enormous potential in Lloyd’s venture
purpose syndicate (SPS) in partnership with the
P Ironshore-owned Pembroke
atria Re’s entry into the Lloyd’s Market, achieved via the
launch of a special Managing
Agency, will allow the company to diversify and ultimately expand its presence in its home market of Latin America, Ingrid Carlou, chief executive of Patria Re, told PCI Today. Carlou said she expects the new entity to start underwriting on January 1, 2016. “This will allow Patria Re to diversify its portfolio
geographically, and by the same token, diversify sovereign risk in its operations,” Carlou said. “We will develop new specialties which will
reinforce our offering in our home markets. We aim to establish a parapet from which to proactively participate in a changing market more effectively than if we remain isolated in our own area of influence.” She said the reinsurer will invest part of its excess
capital in creating a profitable and efficient vehicle alongside human resources in specialty capabilities. All this will ultimately allow it to launch new lines of business and “grow the pie in Latin America”. Carlou added: “It will generate ideas that
will permit us to shake up our markets in Latin America. It will help us anticipate trends and the effects these will have back home. And finally we want our participation in the London Market to help us better underwrite risks in Latin America.” Asked why she had decided to partner with Pembroke Managing Agency, she said it was a matter
of finding common ground with the right partner. “After having met with many outstanding
potential partners it came down to making sure we were both speaking the same language, and looking for the same thing. In some cases we were not big enough for the host, and thus there was a risk of irrelevancy,” she said. “In other cases, our counterparty was not
interested in a strategic fit but was looking for funding for its own plans. Sometimes, there was no fit or a clash between their portfolio and ours. Some were too young to help us. So by taking the time to sit down with the different players and lay out each other’s interests we realised it was really about finding someone with whom we could have a good fit.” She added that she was delighted to have
found Pembroke and the Ironshore group. “I am sure there are still a lot of things we
need to discuss and plan before it will be a perfect relationship but we feel there is a great match between their plans and ours and enormous potential in what we can develop and bring to Lloyd’s together,” she said. Turning her attention to her home market of
Mexico, Carlou said discussions in the market have been overwhelmingly dominated by the negotiations of the Solvency II regulation in recent years—and they are ongoing. “We are right in the middle of implementation
and some final details are still to be negotiated, some of which are not unimportant, like the use of the economic balance in substitution of the
Ingrid Carlou
financial statement of account,” she said. “Corporate governance has now been fully implemented, and the mathematical models will start operating together with financial reporting early next year. So we will really see the full effect of the whole thing by the end of next year.” She added that
authorities is yet to come. “The negotiations were long and stressful
but making sure that they have the resources to implement will be an enormous task, one that could bring the market to a standstill and derail all that has been achieved until now. “We are concerned that Solvency II could
produce an uneven playing field in favour of large international groups. This will damage the local and regional industry and promote global companies. “We would not be surprised if the recent appointment of the former president of the Mexican regulator by an international group was aimed at promoting this type of regulation in other countries in Latin America.” n
AAMGA welcomes multi-year binding authority at Lloyd’s T
he American Association of Managing General Agents (AAMGA) has welcomed
the news that Lloyd’s is to allow multi-year binding authority agreements of up to 36 months—a change that the AAMGA had wanted for many years. “We’ve been advocating for this change
for several years to provide peace of mind and security—and frankly good business practices—
for all Lloyd’s coverholders,” said Roger Ware, president of AAMGA. “We met with Lloyd’s chairman John Nelson
in May this year at our annual meeting in Maryland to again press the issue, and we’re pleased to learn of Lloyd’s actions today.” Currently, Lloyd’s coverholders can enter into
binding authority agreements of only up to 18 months, while in most cases these agreements
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27.10.15 TUESDAY
the real challenge for the
are renewed annually. Under the new multi- year binding authority agreements, Lloyd’s coverholders will be able to establish these agreements for up to 36 months. A streamlined annual confirmation component is included, in which Lloyd’s will send a simple form to its coverholders each November or December requesting appropriate confirmation of binding authority. n
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