XL Catlin targets top 5 spot in P/C reinsurance despite tough conditions

XL Catlin wants to be a top five player in property/casualty reinsurance as it aims for growth despite the tough market conditions the industry is facing, Greg Hendrick, chief executive of reinsurance for the company, told Monte Carlo Today.

Hendrick said the company is looking to create a bigger platform, grow and move up the rankings despite what he described as a “difficult market”.

“We want to grow our market share with our current clients as well as finding new business. We are a viable player in the market and view ourselves as being in the top 10 P/C reinsurers. We’d like to get towards that top five,” he said.

He stressed that the integration between XL and Catlin has gone well since the merger in 2015 and that the amalgamation is now complete under the new brand.

It was important for the companies to merge their operations as smoothly and quickly as possible, he said. To help this along, the various offices of the two companies were coalesced on the first day of the merged company’s existence. Since then, the process has been smooth and successful, he said.

“I can assert that XL Catlin’s reinsurance operation is in place. It’s not XL reinsurance, it’s not Catlin reinsurance, it’s XL Catlin reinsurance. We’re going to be very client-focused. Both firms always were, both firms had great relationships, but we are putting into place a formal plan for our global clients,” Hendrick said.

He added that the company’s P/C reinsurance offering is completely global in its scope, able to entertain risk anywhere in the world and offering a full complement of P/C products for reinsurance.

He said that XL Catlin reinsurance is now greater than the sum of its previous component parts. What one firm lacked, the combined entity now possesses. He believes the company is able to handle any transaction, in terms of its size or complexity, on a global basis for P/C business, allowing it to go toe to toe with the biggest reinsurers globally.

Since the 2015 merger client retentions have been high, with only a very small percentage of business lost—usually in instances where both companies had previously worked with a client and the concentration of risk meant a reduction was necessary.

“It was stunning how well-supported the transaction has been in the market,” Hendrick said. He admitted the company had anticipated a bigger loss of clients because of concerns over the size of the combined share of the new entity on individual treaties. However, the total loss of business has actually been less than 0.5 percent, he said.

Turning to the future, Hendrick said that XL Catlin was now targeting a number of areas for growth, as well as a number of innovative projects designed to ensure it remains at the cutting edge of developments in the market in other ways.

One of these is a venture capital fund called XL Innovate. Based in California, XL Innovate researches and invests in innovative technology with the potential to revolutionise risk transfer. As well as being an investment strategy, the company gives XL Catlin a good handle on what’s technologically—and financially—possible and what might change the industry going forward.

He also sees potential for growth in specific geographic areas. He said Latin America and Africa both represent interesting opportunities and added that India is a key target for the business since the Indian regulator relaxed the rules around the foreign ownership of reinsurers within the country.

Like many other reinsurers, XL Catlin’s reinsurance arm is attracted to India for a number of reasons, including the size of the population and the wider economic potential within the subcontinent. The company has some 1,400 personnel in India and views it as a long-term opportunity.