Former Tokio Millennium CEO Tats Hoshina seeks backers for new reinsurer
Tatsuhiko ‘Tats’ Hoshina (pictured), the industry veteran credited with steering Tokio Millennium Re from being a $125 million Bermuda property-cat reinsurer to a $1.2 billion global, multiline player, is looking for a new job. Well, more backers, actually. He thinks now is the perfect time to start a reinsurer—and he is open to offers.
“It seems to me that now is a perfect time to start a reinsurer,” he told Monte Carlo Today. “I am open to finding an opportunity where I could attract investors into a balance sheet reinsurer play—something new just like Tokio Millennium Re was in 2000.
“I have done a lot of different things since then. I’ve advised on the capital markets side, on managing general agents (MGAs). I am smarter than I was before, I would run things a bit differently. But now is the time.”
Since stepping down as chief executive officer of Tokio Millennium Re in 2015, becoming vice-chairman, he has acted as a consultant and adviser to a number of firms. Notably, in 2019 he joined the advisory board of Bermuda-based electronic risk market AkinovA. He has also helped a number of insurtechs raise capital and advised several firms intent on MGA roll-up strategies.
Now, he is seeking a new challenge. “Rates in almost all lines of business are adequate and also hardening,” he said. “You can debate whether the increases match inflation, that is more about the terms and conditions then, but these are good market conditions. And money is entering the sector because of this, but investors are looking at insurtech, at MGAs, just not true reinsurers.
“You could say the capital markets are shying away from investing in balance sheets. But this is the time to do it. The rates and the results are great. If you’re an investor wanting to invest in the balance sheet, now is the time.”
He believes that the hardening market conditions are more durable than in previous cycles—because they have been caused by a number of different but intertwined factors. “It has not been caused just by cat losses this time. There are many drivers from COVID-19, to the Russia-Ukraine war, to inflation. It means we are seeing it across all lines of business. And I would not say rates have peaked yet, given the further increases we are seeing with inflation.”
One reason investors are skittish around backing new balance-sheet players, he believes, is because the results of some of the recent startups have been underwhelming. But this has been for specific reasons and some specific losses, he believes. The results of the more established players have remained healthy.
“Perhaps that has skewed the view of investors. Unfortunately, the performance of some newcomers has not been great and more money is not flowing in as a result. But, having said that, this is the time to do it. It’s all about timing. Sometimes it’s better to be lucky than good.”
