Patria Re seeks diversification via London

Patria Re is looking to extend its reach while also developing better ways to use its capital via specialty lines and services, Ingrid Carlou, its chief executive, told Baden-Baden Today.

The company recently partnered with Pembroke Managing Agency to form the Patria Special Purpose Syndicate. Carlou said the venture was driven by a number of factors, one of which was to build better ways to use its capital, while she also believes Patria Re’s expertise in emerging markets will complement what London offers.

She said the recent changes in the market have “turned capital into a commodity, which in turn is driving rates down and relaxing conditions”.

“Because of this, the circle between intermediaries and risk carriers is being disrupted and we are starting to compete against one another in order to get close to the client,” she said.

“If on top of that we consider technological changes that will either completely commoditise the more traditional lines of business or reduce the risk and thus the premium, it will be fundamental to concentrate on the real service we provide.”

Carlou said the relationship would provide better bidirectional access between the London and Latin American markets.

“London needs good partners not only to tread the jungles of the emerging markets but also to keep abreast of developments,” Carlou said. “There are many different tendencies in the region.

“Each country has a different positions, and vulnerabilities. We have re-evaluated the idea of London opening local offices; this will provide the market with better intelligence, but even in this case it will require local partnerships to support it.

“On the other side, these partnerships can allow underwriters in London to discuss market developments but also to come, train and get to know the market better, from the inside.”

Asked how the Latin American market compares to the London Market she said there were a number of similarities but she also some differences.

“London from a reinsurance perspective is a market reinsuring the UK and the world, even if heavily concentrated in certain regions. In contrast, the Latin American market is mostly dedicated to Latin America.

“In London reinsurance has thrived with its ups and downs, whereas in Latin America local reinsurers were a species on the fringe of extinction. We are now having a bit of a comeback, albeit a tendency supported by an element of national protectionism and funded by private equity funds. The longevity of some of our comrades in the region is still to be tested.”

Asked if Patria Re was looking to increase its operations in other regions as well as London and Latin America, Carlou replied that the company was already accessing international business through Lloyd’s, but that its main focus was Latin America.

Patria Re has also opened an office in Chile and is now considering how and when to reinforce its presence in Brazil.