mike-mulray-chief-underwriting-officer-everest
Mike Mulray, chief underwriting officer, Everest
22 October 2019Insurance

Everest Insurance seeks more intimacy with its reinsurers

The chief underwriting officer of Everest Insurance, the specialty insurance operation of the Everest Re Group, is in Boston this week seeking deeper and more intimate relationships with its reinsurers.

Mike Mulray, chief underwriting officer of the business, told APCIA Today that, where such relationships are in place, it enhances and supplements the offering of the insurer.

“They give us a valuable perspective on things; we don’t always agree, but that is OK. We collaborate well together, and they help us solve problems,” he said.

Everest Insurance works with a variety of reinsurers. Mulray said he is particularly interested in working more closely with the ones that have made an effort to understand Everest’s business since it changed its strategy and started to reposition its portfolio some five years ago.

“We want broad, multiline, deep, intimate relationships with our reinsurers,” he said.

“We like to collaborate on solutions and solve problems together. For example, if they are working with an insurtech on a particular solution, we can partner on that. We can exchange data and ideas—that is where we find the most success.”

Mulray described market conditions on the insurance side as being an “orderly transition” towards improved rates on most lines of business.

“It is a fairly orderly correction and we are seeing an improving rate environment which we have not seen in quite some time,” he said.

“It is hard to pin a label on it because there are so many nuances to pricing depending on the line of business and its loss experience. But it is a positive market cycle and these do not last long, so we are mindful we want to seize the opportunity by being as quick and nimble as possible.”

Everest Insurance has enjoyed rapid growth in the last five years in terms of its headcount and product offering, although more recently it has been fine-tuning the business to deliver consistent underwriting profitability.

Mulray stressed that the headline growth figures disguise the fact that it has walked away from large swathes of business it deemed unprofitable or unsuitable for its portfolio.

With market conditions now turning, Everest is well positioned to benefit. As some of its competitors are adjusting their own portfolios and retracting from some lines, Everest is able to seize the opportunity.

“We are careful and thoughtful about new business we take on—some of it has been shed by others for good reason. But we are certainly on the front foot,” he said.

He stressed that the company’s focus has always been on achieving an underwriting profit—not on top line growth. He described good underwriting as being a “lost art” in many parts of the industry but it is something Everest has always focused on.

“Risk models are good, but they are just a guide. Our ethos is that we want our underwriters to underwrite, using all the information available to them,” he said.

The top line growth the company has experienced has been a result of its wider strategy—rather than its aim. Mulray identified three reasons for its solid growth: some of its competitors being distracted by internal issues and changing their portfolios; the talent it has attracted, who have brought business with them; and a flight to quality in some parts of the industry.

“Credit ratings are very important on some lines and we are an attractive counterparty,” he said.

As it enjoys the rising tide of rates, Everest is positioning itself to ensure it can benefit from opportunities in the UK and Europe—some of which are emerging from the dislocation and changes taking place in Lloyd’s. Everest Insurance formed a European subsidiary domiciled in Dublin two years ago.

More recently, this subsidiary formed a UK branch, to ensure it is ready for any form of Brexit, and secured approval from the NAIC as a surplus lines writer. In July, it opened an office in Bermuda.

“It is about being nimble and creating flexibility in our offering to meet our clients’ and brokers’ needs as we continue to expand,” Mulray said.

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