Broker consolidation and trapped value: new broker Augment’s CFO speaks out


Broker consolidation and trapped value: new broker Augment’s CFO speaks out

Reinsurers and cedants have been adversely impacted by consolidation among reinsurance brokers – making this a good moment for a new player to launch. That is the argument of Charlie Love, the newly appointed chief financial officer of Augment, launched in July, who also promises the broker will innovate and help clients unlock trapped value.

“The reinsurance industry has traditionally been characterized by legacy practices — but the landscape is evolving rapidly and there is a true need for innovation. Factors such as the growing frequency of catastrophic events, technological advancements, and changing customer expectations have created a demand for state-of-the-art solutions and fresh perspectives,” Love told Intelligent Insurer.

“If we look over the years, consolidation in the reinsurance space has been substantial. Clients lack a choice of broker and reinsurers lack sources of client opportunity and profitable premium revenue. We can see this when looking at reinsurer financials over the years in the context of deteriorating ROEs, reduction in their receipt of profitable premiums (ceded margin), and upticks in their volatility as they increase retention for clients. Our product and client offerings will provide reinsurers with a new distribution stream and the opportunity to build more long-term stable relationships with clients.”

Augment was launched in July with a $100 million investment from US private equity backer Altamont Capital Partners. The company is led by managing director Alex Kazanjian, who was recently partner – structured solutions at broker McGill and Partners, and prior to that, spent almost six years at Aon Benfield in various senior roles.

Love was appointed as CFO weeks later. Prior to Augment, he was interim group CFO at insurance distributor Abacai, after tenures as group CFO at Miller Insurance Services and Specialist Risk Group, providing insurance solutions and advice for difficult-to-place risks globally. Earlier in his career, Love spent nearly a decade in various roles at management consulting firm Aon Benfield, rising to CFO for UK and EMEA operations.

He said he was attracted to the role at Augment because he believes the business can be transformative for the reinsurance industry. “It is a forward-thinking organisation that embraces innovation and technology, which aligns perfectly with my passion for driving positive change in the financial sector. Working to revolutionise the way reinsurance brokerage operates while creating and delivering greater value to our clients were compelling reasons for me to take on this exciting role.”

He added that the key to its approach will be looking to structure multiple reinsurance instruments together in one transaction. He says such an approach reduces the traditional focus on divisional silos that is often seen in the reinsurance broking space. “Instead, we focus on multi-class, multi-year products, and creating client and counterparty connections. These larger, broader transactions have the scope to generate efficiencies and better partnerships, enabling us to create equity value for our clients.”

He stresses that Altamont Capital Partners has agreed a shared long-term goal with the business to build a “robust and sustainable platform”. He said it has also committed substantial resources allowing it to invest in data and analytics, attract top talent, and maintain a strategic focus.

It also appears they are under no illusion on some of the potential challenges. “The growth journey in the reinsurance brokerage space presents unique challenges and opportunities compared to other industries. Reinsurance is an intricate sector, heavily influenced by global market dynamics, risk management practices, and regulatory requirements. Building a successful reinsurance brokerage demands extensive knowledge of various insurance lines, complex risk assessment, and the ability to navigate a constantly evolving landscape with the broader economy in mind,” Love said.

“It is precisely these challenges that make it an exciting endeavour. Augment’s differentiated approach— delivering capital through structured transactions and building tailored solutions —positions us to streamline processes and enhances risk evaluation. The combination of experienced brokers who deeply understand client-centric solutions and our unique approach to data analysis is already fostering strong relationships between our clients and their reinsurance partners. This will drive growth and the ability to adapt more effectively to changes in the reinsurance market.”

He also acknowledges the unique market conditions at present, which, arguably, make the role of the broker more important than ever. The reinsurance industry in in the midst of one of the longest hard markets it has seen in decades, characterised by increasing rates in many lines of business and a shortage of capacity in some.

But Love said this also presents opportunities. “Market conditions play a crucial role in shaping our growth objectives. While we anticipate certain challenges due to market fluctuations and evolving risk landscapes, we also see opportunities to capitalise on these changes.”

“Through a combination of agility, advanced analytics, and strong industry relationships, Augment is well-positioned to navigate various market conditions and continue our growth trajectory. By maintaining a keen eye on reinsurance trends and staying committed to our core values, we aim to build a resilient and adaptable platform that can excel in both favourable and challenging market scenarios.”

He said the business’s priority now will be speaking to clients and engaging with industry leaders, clients, and partners through conference season. “We will showcase how Augment can help clients by leveraging the scale, diversification, and culture within their business to build reinsurance relationships that grow and are stable over time. We want to help reinsurers with new distribution streams and partnerships at scale. The transactions we have structured thus far have generated more than $1 billion of premium.

“We believe that our unique approach will not only benefit our clients and partners but also contribute to the overall growth and stability of the reinsurance industry. Reinsurers have been adversely impacted by consolidation and fighting back with only the instruments of increasing price and retention; Augment offers a rethink and the tools to achieve it. We are excited to share our vision and journey with the wider community and look forward to meaningful discussions and collaborations.”

Love said: “Our first priority is our clients, who will be able to assess our success by measuring our ability to drive and increase EBITDA and create solutions that are tailored to their business and balance sheet, delivering efficiency for both operations and execution, while enabling growth.

“We do this by unlocking trapped value and harnessing a client’s diversification across their business, rather than breaking it into the traditional broker siloes. It’s bespoke — the structuring in our approach means that each client’s solution will be different.”

“Efficiency is key; complex decentralised reinsurance and capital management strategies provide for excess costs in our client companies. Incidentally, for me as a CFO, the opportunity to work with our brokers to help articulate these financial benefits to clients was a key reason I joined Augment. We, and our reinsurance partners, want our clients to focus on running and growing their business, whilst better managing capital,” he concluded.

Augment, Charlie Love, Broking, Innovation, Catastrophe, Technology, Solutions, Inaurance, Reinsurance

Intelligent Insurer