Blanch intends new broker COIN Re to be a disruptive force
Industry veteran Ted Blanch wants and intends his new venture, a reinsurance broker that will be part-owned by its clients, to be a disruptive force in the industry, he told PCI Today.
“What we are doing is innovative and unique; no reinsurance broker has ever attempted to operate in this way. We hope it will be a game-changer for the industry,” Blanch said.
He has unveiled details of COIN Re (an acronym of Client Owned Intermediary Nexus), a new reinsurance broker focused on catastrophe business, at PCI this week. Its clients will own a 55 percent stake in the company, aligning their interests, much like a cooperative.
The other 45 percent will be owned by private investors and employees. It will initially focus on catastrophe risk in Florida.
As founder and chief executive, Blanch said the business model of the new venture has been devised drawing on all his experiences in the industry. These include building E.W. Blanch into a major force over more than 40 years until its sale in 2001. He has also worked in a primary carrier in recent years and acted as a consultant to many companies.
“I have been in this game for a very long time and one thing I have learned is that for both reinsurers and reinsurance brokers, it is a very varied landscape, they are not all the same,” he said.
“When it comes to cat business, it has historically been very profitable for reinsurers and that means primary insurers have spent a lot of premium over the years. The fact is, why shouldn’t they benefit from that? This is a better way of doing things.”
When devising the venture, he foresaw a couple of barriers to COIN Re achieving its goals. To give it a depth of resources from the start, it has partnered with Beach Group, which will supply analytical capabilities and other service-based functions that a startup broker would not otherwise have access to.
The second barrier he foresees is the perception of insurers being wary of working together for confidentiality reasons.
“Historically, insurers have had a hard time buying collectively—they often think their business is better than that of their rivals. But no-one has operated through a client-owned broker before. This will be a game-changer for some insurers.”
When an insurer opts to work with COIN Re it will also have the option to invest in the company; it will be given a portion of the 55 percent always allocated to clients as a result. Although the shareholding will be diluted in percentage terms as more clients do the same, their stake should be worth more in absolute dollar terms.
“The size of the pie will also be growing.” Blanch explained.
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