The hardening market may be cause for consternation among brokers and insureds, but for underwriters it is a glorious time to be alive. So much so that some are coming out of retirement to capitalise on the new opportunities that are emerging.
Such is the case of John Boylan, the founder and chief executive officer of Arcadian Risk Capital, who admitted prevailing market conditions have enticed him out of retirement.
After a career that stretches back to the 1980s when he was a casualty underwriter at AIG, and took him to XL and Markel, Boylan called it a day in 2018.
On October 1 he reversed that decision, launching the business with support from Third Point Re, an investor and paper provider that is managed by his friend Dan Malloy.
“This is just the third hard market in 35 years, so there is a real opportunity for experienced price-making teams to build well priced, well-balanced books and in the process, generate alpha returns,” he said.
Malloy, chief executive of Third Point Re, said he was delighted to have been able to lure his long-time friend out of retirement with the prospect of building a profitable book of business.
“Now is the time the market needs experienced participants who are willing to bring meaningful capacity to a correcting market,” Malloy said.
Boylan started Arcadian as a new managing general agent (MGA) in Bermuda, a clean slate on which to build new business. Arcadian already has 15 underwriters across offices in Bermuda, where Boylan is based, as well as Dublin and London. Boylan said he may look at a New York presence in due course.
“This dynamic has now shifted in favour of the risk-taker and capacity provider.” John Boylan, Arcadian Risk Capital
Starting a new business was a key part of the appeal for Boylan.
“Having no legacy issues is a huge advantage,” he said. “Book remediation takes time and when your underwriters are investing time in remediating legacy books that is a distraction from writing new business.”
Boylan is enthusiastic about the current opportunities in the market. The last—very elongated—soft market cycle resulted from a capital supply and demand mismatch, he said, which led to compound rate degradation, a loosening of contract terms and conditions and eventually sub-par returns.
“This dynamic has now shifted in favour of the risk-taker and capacity provider,” he added.
“Rates are on the up, universally, with attendant terms and conditions also improving. We have an opportunity to build selective and technically-priced and sustainable accounts that will serve to generate return at all points in a cycle.”
Malloy highlights Boylan’s reputation for underwriting discipline, his strong track record, and historic support from top-notch reinsurers, which were all positive factors in building a partnership between Arcadian and Third Point Re.
Boylan emphasises the qualities in the team he has built at Arcadian.
“It’s all about team collaboration, especially in the underwriting process,” he said. “Our teams have worked together for many years, in some instances for all their careers.
“They have built strong broker and client relationships which will benefit Arcadian as we set about our book build.”
“With strong capital support and no legacy challenges, John will be able to attract like-minded underwriters who want to build a team of experienced experts focused purely on underwriting profitability,” added Malloy.
“He’s luring great underwriters from big firms to come and work for a startup MGA—that should tell you how exciting this opportunity is to the people who know the market best,” he concluded.
Arcadian Risk Capital, Hardening market, Insurance, Reinsurance, John Boylan, North America