Opportunities for those that avoid the herd
Brit Insurance’s new Bermuda office, which will open in October, will allow the company to access Bermuda at a time that business is booming.
“Bermuda has been a market of force for a long time and is a global centre which we weren’t represented in,” said Mark Cloutier, group chief executive officer, Brit Insurance. “We’d been thinking about it for some time, however, we were waiting for the opportune moment, which has now presented itself.”
The office will focus on underwriting excess workers’ compensation reinsurance as well as US property-catastrophe reinsurance, retrocession and industry loss warranties.
“If you think about what we’re opening, the opportunity was now,” he said. “Especially on the casualty side; we see positive direction on workers’ compensation rates in the US.
“On the property/treaty side we believe there are opportunities that are presented in Bermuda that don’t find their way to London.”
Cloutier continued: “If you believe what everyone is saying about the state of the market today, London signings could be under pressure, so getting an opportunity to see parts of programmes or layers of things that don’t come to London is a great way to defend against that.
“While everyone else is talking rates down, they’re coming down from a pretty good place, so it’s not that we’re rushing head-first into a soft market. It’s about being able to deploy our capital.
Cloutier also spoke of the industry’s “herd mentality”, a factor which he considers to be detrimental.
“The Rendez-Vous just underscores the herd mentality in the business,” he said. “You focus on a subject and the herd starts to run in that direction. We have a number of other issues that we could and should be talking about, such as the efficiency of models, which does link into ILS, but we get hijacked by following the crowd.
“It’s an interesting time for our industry, yet if you pay attention to the detail and decide that running with the herd isn’t the best option, then there are some good opportunities for investors.”
