Nick Garrity, chief executive officer, IGI Labuan
Market conditions in Asia have been less favourable to re/insurers than in other parts of the world so far this year. But that is starting to change as the industry gets to grips with one of its toughest challenges to date, Nick Garrity, chief executive officer, IGI Labuan, told Intelligent Insurer.
“The world has been rocked by COVID-19 and the industry faces one of its toughest challenges to date. We are yet to see the full impact the pandemic and global lockdowns will have on the insurance and reinsurance market.
“IGI has always worked to stick to our corporate mantra of underwriting discipline and high-quality service, and this will go on as the pandemic continues to unfold,” Garrity said.
“Market conditions in Europe, the US and the Middle East have been more favourable for reinsurers than in Asia this year. That said, the market is changing: rates are increasing, and capacity is restricting in certain areas.
“With so much uncertainty from the ongoing complications of COVID-19, as well as other market pressures such as trapped collateral and low interest rates, clients are looking for support and security.
“More challenging market conditions in Asia will serve as an opportunity for reinsurance professionals to refocus their efforts on the basics of the profession—and for IGI to show its strengths in underwriting expertise and local knowledge.”
Garrity added that the performance of specialty insurance and reinsurance carriers such as IGI is not strongly correlated to economic cycles or shocks of the type created by the pandemic. As such, the company is focusing on how the wider economic challenges of the pandemic impact on the risk profile of insurance and reinsurance buyers.
“This can have an impact on our appetite for certain business sectors, but it has also created opportunities and fresh relevance for some classes of business.
“IGI has a history of successfully navigating challenging insurance and reinsurance cycles. “In 2020, we have seen hardening market conditions across lines and geographies—and we are perfectly poised to help our clients and brokers during this period.”
The company remains bullish about growth prospects in the region. Garrity said that in the Asia-Pacific market there are opportunities for growth in all of its 14 classes of business.
However, he said, IGI will focus on sectors where it has capacity, appetite or expertise that is needed in the region. “These include construction, power, renewable energy, financial institutions, ports and terminals.”
“We are perfectly poised to help our clients and brokers during this period.” Nick Garrity, IGI Labuan
Legal expenses cover
Garrity noted that IGI had launched legal expenses insurance (LEI) in June 2017 from its UK office and is now making this offering available to the Asia-Pacific region. Initially it is focusing on countries with a common law-based legal system (Singapore, Malaysia, Hong Kong, Australia and New Zealand).
“Currently, legal expenses products have some traction in Australia but are virtually unheard of in Asia. We believe there is a great opportunity for us to work with insurers with a commercial client base or affinity groups that want to enhance their standard products,” he explained.
Garrity added that this move is supported by the relocation to Malaysia this year of its class underwriter for LEI, Terry Mason, who has underwritten LEI for over 40 years.
IGI offers coverage for both before-the-event (BTE) and after-the-event (ATE) LEI and will cover the legal exposures that commercial entities face in their day-to-day business activities.
“We are aiming this value proposition primarily at direct insurance companies in jurisdictions with common law legal systems. The product is also aimed at managing general agents and reinsurance brokers.
“Business can be written on direct placements, through coverholders, line slips or as a reinsurance contract,” Garrity said.
“We see a huge opportunity for the product in Asia—particularly for before-the-event insurance.”
He added that LEI is a well-established product in the UK, Canada and Australian markets, and is seen as a valuable add-on that helps enhance the product for direct insurers and their small and medium-sized enterprises (SMEs) package.
“We see a huge opportunity for the product in Asia—particularly for BTE insurance. For any risk professional who has a commercial lines portfolio selling commercial packages primarily to SMEs, we want to work with them to grow and differentiate those portfolios.”
In terms of SIRC taking place in a virtual format this year, as SIRC 2020 Re-Mind, he said one of the biggest discussion points will be the extent to which the industry has adapted to the new working environment it faces thanks to COVID-19 and what it can learn from other sectors.
“An emerging issue for the industry as a whole, and one that worries me, is how properly to serve the needs of younger generations joining our industry who will not have the benefit of the face-to-face interactions which have been central to the way we have developed talent over the years.
“I am sure we can overcome this challenge, but it is an issue we need to be conscious of and act to identify and implement the right strategies,” he concluded.
IGI, SIRC, Insurance, Reinsurance, Nick Garrity, Asia-Pacific