News


he re/insurance market must aim to expand and achieve a greater saturation of


insurance buying globally, Adam Szakmary, the recently appointed chief executive officer of Blue Capital Management, told PCI Today. Szakmary, who also serves as portfolio


27.10.15 TUESDAY


Breadth of Endurance offers Blue Capital stability T


“All capital is not created equal and 50 percent


of our capital is permanent in nature, with two listed vehicles on London and New York.” Given the scale of the ACE/Chubb deal,


manager of the investment manager, believes that re/insurance companies have a responsibility to also wear a risk management hat to support their clients while ultimately trying to develop products that expand the marketplace. However, he warns that the industry must be cautious of products that are not fully vetted for this environment.


“Cyber insurance is in its infancy and I


applaud the people looking at this right now. But there are a number of unresolved questions, such as how quickly will you be paid back? The availability of information is probably in government hands right now,” he explained. “This is a specialty market product and the


industry needs talented underwriters who have access to information


that provides for the


incubation of that marketplace.” He added that to select risk, quantitative and qualitative information should be looked at but


Adam Szakmary


he was concerned that within the cyber space adequate information was not currently available. And he warned that insurance shouldn’t be a


product that replaces risk management. Szakmary praised the


acquisition of


Montpelier Re by Endurance, stating that “Blue Capital was fully integrated three days after the close of the transaction”. The larger breadth of Endurance has allowed


Blue Capital to become more stable and offer longer term value to its clients, he said. “Generally, mergers and acquisitions (M&A)


are not always a comfortable situation. However, our capital structure has created continuity and a seamless rollover of capacity,” said Szakmary.


Szakmary is unsure whether he would see another transaction like this in his lifetime. However, he believes there is great opportunity for small and medium-sized reinsurers in the space. “As re/insurers push for a market share,


consolidation is unlikely to go away unless there’s a large catastrophic event or potentially a black swan event,” he explained. In the future, Blue Capital will ensure it continues to provide value, while


both sides of its parental ownership by offering multiple products. Szakmary said: “It’s about creating and maintaining strong relationships across multiple product lines in a better managed risk environment. “Being a part of the larger Endurance group


allows us to provide a product that wasn’t there before for Endurance. Additionally, we can now offer products across the insurance reinsurance spectrum that we didn’t have before the acquisition.” n


Manage the risk before it manages us: Ridge T


he US needs to manage emerging risks before they begin to manage the US—


while also accepting change as a positive force. This is the opinion of Tom Ridge, the first


secretary of the US department of homeland security, speaking at


the PCI annual meeting


in Hollywood, Florida, yesterday (Monday October 26). “We have challenges, we always have and we


always will,” said Ridge. “But we are up to the task.” Ridge, who also serves as a partner at Ridge-


Schmidt Cyber, a firm that helps companies manage their cyber security, explained that, with over half of the world’s population now connected to the internet, one of the biggest treats is cyber crime. “By 2020, it’s expected that 50 billion devices will be connected to the internet. The internet


leveraging


will be like electricity in the next five to 10 years’ time,” he said. Ridge believes there is a cyber war currently


going on and the private and public sectors must unite and share information. “It’s about time the government started sharing information; we need to give you a safe harbour,” he said. “We have a responsibility as citizens and companies to do what we can to mitigate the risk as well. We’re all in this together.” In 2014, Ridge teamed up with Lloyd’s


Tom Ridge www.intelligentinsurer.com | www.bermudareinsurancemagazine.com


to launch an insurance company specialising in corporate cyber security policies. Ridge Insurance Solutions sells cyber policies covering the cost of notifying customers that their data has been breached, hits to profits from negative publicity and the threat of extortion. n


DAY 3: Tuesday October 27 2015 | PCI TODAY | 7


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