Focused, stronger, optimistic
Ironshore will keep its identity and be stronger than before since being acquired by Liberty Mutual in May this year, says Pepe Marquez, managing director, Latin America & Caribbean, Ironshore.
Ironshore will maintain its separate brand in Latin America but will benefit from the strong financial stability and expertise incumbent in its new parent company Liberty Mutual, which acquired Ironshore from Fosun International in May this year.
That is the view of Pepe Marquez, managing director, Latin America & Caribbean, Ironshore, who says that Ironshore will keep a separate focus, management and strategy in Latin America. But he says the company can also benefit from a large stable parent.
“We have maintained our focus in the region but, if anything, there will be an improvement as we are backed by very strong capacity and we are part of a broader family with a presence in the region,” Marquez said.
“Liberty acquired us because we think in a different manner. Liberty likes our innovative mindset and the fact that we offer something different.”
He says Ironshore’s different approach to the market is characterised by its willingness to identify and consider underserved insurance or reinsurance needs.
“We like to position ourselves as a carrier of strength in market segments not well-served and differentiate ourselves in the process” he says.
An example of this is the company’s willingness to underwrite smaller but complex construction industry needs (including surety or cargo on a facultative basis) considering small projects with a value below $40 million; yet another is its offering of environmental insurance, which is increasingly demanded by international investors moving into the region and wary of regulatory changes.
The insurer has also enhanced its specialist M&A capabilities with dedicated underwriting to the region based in Miami which completes its wider team of 40 based globally covering this line. It has completed transactions in two countries already since the unit was launched in May and Marquez believes this unit will enjoy strong growth in the future.
“We anticipate further growth as we see more foreign investment coming in,” he says.
Commenting on the wider economic health of the region, Marquez says that the recovery in the Latin American economy firmed up in Q2, due largely to a turnaround in Brazil’s economy, with higher commodities prices, stronger demand and better financial conditions all helping the region’s growth prospects.
The political climate
Political uncertainty remains high after a number of economies have been affected by corruption scandals; it is likely to increase, as in 2018 there will be elections in Brazil, Colombia, Mexico and Paraguay.
Chile has an election this month. Meanwhile, the result of the Argentinian mid-term elections strengthened the current government to carry out the necessary economic changes to improve the country’s economy.
“We think this will have an immediate positive impact in foreign investment in this country. It also seems the Latin American economy overall will return to growth this year and should continue next year. But the evolution of political events, mainly in Brazil, will be key to this,” he says.
Marquez says that Ironshore International’s focus is in a few key areas. The first is that since the method and supply of capital to the insurance industry has changed, traditional distribution lines have been consolidated and new channels have emerged.
“Against this backdrop, our strategy is to consistently deliver superior profitable growth through a balanced and diversified portfolio with a keen focus on execution. We continue to drive this through product growth, geographic diversification and strategic partnerships.
“While London remains a significant specialty market our investment in Latin America was driven by our desire to expand our distribution base to access more business,” he says.
In addition to the strengthening of its M&A capabilities, Ironshore’s most recent strategy initiative has been investing in the Strategic Partnership business, which is managing and building a Lloyd’s presence for third parties.
Ironshore’s Pembroke Managing Agency is a provider of services to third parties helping them with the development of their business plan, structuring exposure swaps and guiding new entrants through the Lloyd’s approval process.
“Our team has made great strides. We were the first to successfully develop a Special Purpose Syndicate into an independent Syndicate in 2013, and in 2015 we worked with Patria Re, a Mexican reinsurance company, to develop another Special Purpose Syndicate, becoming the first Mexican insurance company to join the Society of Lloyd’s with our own Lloyd’s vehicle,” Marquez explains.
“Especially during today’s dynamic market, insurance companies are being challenged in how they can offer competitive coverage while still remaining profitable. Ironshore International’s three key strategies—product growth, geographic diversification and strategic partnerships—continue to be the drivers of our growth,” he says.
Pepe Marquez is the managing director, Latin America & Caribbean, Ironshore. He can be contacted at: pepe.marquez@ironshore.com
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