Altcap takes on Asia: Markel
Alternative capital will play an increasing part in Asia-Pacific as data improves, Matt Cannock, managing director for Asia at Markel, told SIRC Today.
“My gut feeling is that the Chinese insurers will be all over it; others may be more reticent to understand it,” Cannock said.
“Alternative capital has really established itself—it is not an idea that is going to go away. It can be more straightforward than traditional reinsurance, and for risk managers it’s another arrow in the quiver of their risk management strategy.”
Alternative capital is reliant on having strong sets of data, according to Cannock, and the Gulf of Mexico is an area where it has been successful. In terms of Asia, certain countries such as Japan have good data, but in other regions it can be lacking.
Cannock said that it is hard to say at this point which markets in Asia-Pacific will be part of Markel’s alternative capital strategy, although Markel is meeting with Nephila at this year’s SIRC to discuss opportunities.
Markel announced in August that it would be acquiring Nephila. Between Nephila and Markel CATCo, its assets under management will stand at approximately $19 billion, representing almost 20 percent of the insurance-linked securities (ILS) sector.
“For us at the moment it is seeing what we currently do with CATCo and Nephila and fact-finding, marrying up opportunities where we can.
“With our expertise and the geographies they operate in, we have a great platform to help them going forward,” said Cannock.
Off the back of the Markel-Nephila deal, he said that Markel is looking at what it needs to do to make the best return for its shareholders.
Cannock suggested there may be opportunities for alternative capital in India—a market he is focused on building out—particularly in the agricultural space, which is weather-dependent and has substantial nat cat exposures.
However, he stressed, there is nothing set in stone in India in terms of alternative capital; rather the main focus is building its reinsurance offering to Indian insurers.
Markel started actively writing business from its Mumbai office at the start of October, headed by Deepika Mathur.
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