Antares seeks rate cuts as it combines with Qatar Re
Antares plans to combine with sister company Qatar Re to buy reinsurance this year—and predicts rate reductions as a result, head of ceded reinsurance Richard Anson told Monte Carlo Today.
In addition, he will also seek a reimbursement for rate increases the company agreed to in the last renewal on the basis that some lines would be hit by hurricane losses; in the end, they were not.
“We are currently involved in a request for proposals (RFP) process. The RFP for the reinsurance programme is looking for potential joint cover between Antares and Qatar Re,” Anson said.
“Depending on the outcome of the RFP process, it could be that our programme does look very different next year.”
Antares wants to work more closely with its sister company—Antares Managing Agency, a specialist insurer and reinsurer operating in the Lloyd’s market, and Qatar Re are both part of the Qatar Insurance Company Group.
“Generally, if you bring two portfolios together and buy one reinsurance placement rather than two, costs should be lower,” Anson said.
“We would hope to save a bit of money but it’s also about having more of a joined-up approach towards the market in terms of what we do.”
Antares Syndicate 1274 offers a range of property, casualty, marine and aviation underwriting services. The syndicate increased its combined gross written premium (GWP) income to $540 million in 2017, compared with $457 million in 2016. Its combined ratio deteriorated to 108.4 percent from 95.8 percent over the period due to the 2017 hurricane season. Its net underwriting result declined to $6 million last year compared with $61.4 million in 2016.
Alexander Craggs, head of reinsurance at Antares Syndicate, said the results were within expectations.
“The result we had from our losses last year was not enough to make us review what we did,” said Craggs. “We were very happy with the result. We were very happy that, on both the marine and the property lines, we were profitable last year, despite the loss activity.”
Bermuda-based Qatar Re is a global multiline reinsurer writing most property/casualty and specialty lines of business. It increased its GWP to $1.63 billion in 2017 compared with $1.25 billion in 2016. Its combined ratio deteriorated to 121.9 percent in 2017 compared with 98.5 percent the year before. It posted a $66.8 million loss in 2017 compared with a profit of $54 million in 2016.
Craggs added that combining the buying power of the two units makes sense. “It is easier to buy one single programme and understand how that works rather than having two programmes working alongside each other,” he said.
“If you buy a group protection it is much easier to understand your risk appetite and what you have retained. That is an advantage and one of the drivers for this synergy.”
Antares also expects a rate reduction in this renewal for a different reason. In the January 2018 renewal, it accepted rate hikes on some lines of business on the basis they would be hit by losses from hurricanes Harvey, Irma, Maria (HIM). In fact, they were not; it now wants the next renewal to reflect this.
“We hope to get some or all of that small increase back at this next renewal.” Anson said.
