Barbican willing to work with ‘responsible’ capital providers

Barbican is open to working with other capital providers on new ventures, said David Reeves, group chief executive officer, Barbican Insurance Group, speaking in the wake of the announcement it will manage a Lloyd’s syndicate funded by Credit Suisse’s insurance-linked securities (ILS) team.

Syndicate 1856 will have a first year stamp capacity of £90 million ($139 million) and will begin underwriting business attaching on or after January 1, 2016, subject to approval.

“The Lloyd’s market is an increasingly attractive one for capital market investors. At Barbican, we have long acknowledged our willingness to work with sophisticated capital providers keen to build a long-term presence in the insurance sector,” said Reeves.

“We have been working closely with Credit Suisse’s ILS team for some time, and were able to help them put forward their business case to Lloyd’s, which has resulted in an ‘in principle’ approval for a syndicate. Moving forward, we will continue to seek opportunities to partner with responsible, well-informed capital providers.”

Outside of such partnerships, Reeves said the company is wary of expansion in such a tough market and is instead focused on securing profitable business.

“This will continue. From the start, we have capitalised on our ability to flex and adapt to rapidly changing market conditions, enabling us to move quickly when we see the right opportunity, whether entering a new territory or business line, setting up consortiums to achieve necessary scale, or working with investors to help them secure a more prominent position in the market,” Reeves said.

He added that many of the challenges facing the market—including a softening rate environment, an over-supply of capacity, the influx of new capital and increasing retention levels—could actually benefit the London Market and Lloyd’s.

“Such market dynamics may serve to enhance the market’s appeal as there is a potential flight to quality. The Lloyd’s market in particular is proving an extremely attractive proposition both from a buyer perspective and for strategic capital investors seeking to capitalise on Lloyd’s strong brand and ever-expanding global reach,” Reeves said.

One area in which he sees opportunities is the growth of demand for cyber coverage.

“Cyber insurance is certainly a rapidly expanding market and one which offers significant new opportunities for growth, with global premiums having tripled between 2012 and 2014, and 2015 looking set to see the market reach premiums of $4 billion.

“However, current penetration levels remain low, representing only a fraction of the global market’s potential.”