Gable enjoys decreases in a buyer’s market

It would be “crazy” to carry more risk on the balance sheet than is necessary at a time when reinsurance is so cheap, believes William Dewsall, chief executive of European non-life insurer Gable Insurance, who attends Monte Carlo to meet and negotiate with his company’s reinsurers and brokers.

“It is definitely a buyer’s market. As a buyer, our aim is to ensure our balance sheet is well protected. There is only so much risk that we want to carry. Reinsurance is cheap at the moment although, that said, we are comfortable working in a productive way with our long-term reinsurance partners.”

He said he has negotiated rate decreases of between 5 and 7 percent with his existing carriers. This is partly based on the favourable market conditions generally and partly on the back of the company’s growing maturity and solid loss history as an entity.

“There is no point negotiating too hard; we want to have a good relationship with our carriers. It is all done through brokers and I think we know how hard to squeeze. We understand they need to make money too.”

Dewsall said he has found the company’s reinsurers very supportive and prepared to innovate if needed. Gable’s portfolio comprises around 50 percent UK business and 50 percent continental Europe. Dewsall said he has no intention of targeting peak catastrophe-prone zones such as North America and the Pacific Rim.

He said the company has not yet used alternative risk transfer methods such as collateralised reinsurance or insurance-linked securities (ILS). He added that he likes the level of expertise he gets from dealing with reinsurers direct but he may consider such options in the future if the correct level of knowledge were available.

Gable is growing fast. In the first six months of 2014, the company’s gross written premiums increased by 43 percent to £39 million and it made an underlying pre-tax profit of £4.9 million.

Its growth looks set to be further boosted by a substantial deal it has signed in which it becomes a key trading partner of iprism Underwriting Agency, an online trading platform offering brokers access to a variety of insurance products, to write commercial lines of business in the UK market.

Gable has started underwriting immediately and expects that the collaboration will deliver gross written premiums of £100 million over the next three years.

“We have already commenced writing new business and look forward to developing a strong working partnership with the team at iprism,” Dewsall said.