Cat losses demonstrate value and resilience of industry
The insurance industry should view the recent catastrophe losses it has suffered as an opportunity to shine and demonstrate its value and resilience to policymakers and policyholders alike, Mike Mulray, chief underwriting officer of Everest Insurance North America, the specialty insurance operation of the Everest Re Group, told PCI Today.
He said the human cost from some of the recent evets has been quite shocking but this is what the industry, and Everest Insurance, is designed to do.
“We as a company are built to withstand this,” Mulray said. “We have a fortress of capital and excellent underwriting discipline and it is at times like this we can step up and shine, show leadership and really make a positive difference through what we do.”
He said that although Everest will suffer losses as a result of the hurricanes Harvey, Irma and Maria, everything has been within its expectations and he has been pleased with the way the company’s risk and exposure management systems have performed. The Everest Group, including Everest Re, expects the storms to cost it around $900 million net—at the low end of what analysts were predicting.
This represents the first major test for a company that has grown rapidly since its board made the decision to invest in growing Everest Insurance through an organic growth strategy almost three years ago.
Since then, it has made a significant investment in new talent across the company including executive ranks, line underwriters, technology, operations, actuarial, and modelling and launched a number of new specialty insurance products, boosting its growth. Mulray said the acquisition of best-in-class talent has been at the heart of this growth strategy while also investing in existing talent through training and mentoring programmes.
“It has been one of the biggest organic builds the industry has seen,” he said. “At its core we have been recruiting the best and the brightest people. It has allowed us to transform the company and shape it in the way we want. We are very pleased with the results so far.”
On the underwriting side specifically, Mulray added, the business has also invested heavily in ensuring it understands its risk tolerances and has a robust enterprise risk management strategy in place—the core of his expertise during a career with GE.
“We have been defining what the underwriter of the future looks like,” he added. “They will be data-driven and able to interact with technology and machines. Will a machine ever make an underwriting decision? No. But they will help us make better decisions.
“I want underwriters who will kick my door down and demand better data to work from,” he concluded.
Get the latest re/insurance news sent to your inbox every day - Sign up to our free email newsletters
Other stories from today's PCI newsletter
SCOR vows to take a nuanced view on rate rises, assessing clients on a case-by-case basis
Beazley seeks global rate hikes of 5 to 10% for renewals
Risk-based pricing is best way to manage the burden of flood losses
Insurtech firms become MGAs out of frustration
Alternative thinking: the historic rise of ILS
ILS capacity demystified for US cedants
2017 insured losses could total $100 billion: RMS
Expert support for catastrophe and exposure management
Cedants: how much coverage to buy?
Insurers need to reach for the cloud
Firms grasp importance of data assets, yet don’t insure risk
Anticipate change and innovate: Sampson
RAA highlights growth opportunities at PCI
Wildfires among the costliest on record
PCI unveils new officers to board of governors
Technology should mean evolution
$93bn premium forecast in US homeowners’ insurance
The bottom of the cycle has been reached
