Sompo Canopius Re to attack US market
Sompo Canopius Re, a new reinsurer formed this week to manage reinsurance business previously written separately by Canopius and Sompo Japan Nipponkoa Insurance, is set to establish a new office in the US targeting a completely new business stream.
Monte Carlo Today has learned that efforts are underway to hire a specialist team that will operate out of the US and concentrate on new lines of business that have previously remained untapped by both Canopius and Sompo as standalone entities.
Chairman Michael Watson said: “Yes, we are looking to bring new people on board for a new class of business.
“We want to increase scale there. Over the next 12 months two new underwriting teams will be coming on board and later this year there will be a new branch opening in the US. We are actively looking to develop the franchise.”
He added that Canopius also wanted to “ramp up accident and healthcare, which has good potential for growth”.
It will also be looking to increase its specie business where historically it has been a modest player. Now it will seek a “more prominent position”.
“We have huge advantages through ownership—their financial strength will help us grow the business, although there is no pressure to go out and grow the business today. They are patient and take a long-term view,” Watson said.
Watson also suggested that Sompo’s existing global licensing deals will help it mine new business in areas where Lloyd’s currently has no presence.
The new combined company - Sompo Canopius Re - will operate under one underwriting philosophy, led by Markus Eugster.
It also brings some new ways of operating for Canopius. For example, it is subject, as a Sompo affiliate, to oversight from the Japanese financial services authority.
Watson also admitted that the respective cultures of the two firms had been different. “Their culture is more reserved than our more confrontational style. We have had to interpret what their thinking is but I think they understand what we are doing today and the way we work, and we are getting to know them,” he said.
“Sompo and Canopius coming together can find ways to bring to market something that is bigger and better.”
The operation’s head office has moved away from Bermuda since the deal, to Switzerland.
“Basically, it was considered a better global hub for the Japanese,” said Watson. “They like to do things properly. They are respectful of the established order and they don’t like to cut corners and are comfortable operating in the background.”
It was for these reasons that Bermuda’s tax regime had too many implications for the Japanese management team. However, Watson confirmed, the new company will maintain a presence on the Island with an increased headcount.
