TigerRisk unveils cat capacity SWAT team as a tricky renewal looms for cedants
Reinsurance broker TigerRisk Partners has formed what it is calling a cat capacity SWAT team, dedicated to identifying new sources of property-catastrophe capacity, as a potential capacity crunch looms for cedants ahead of next year’s cat renewals, many of which are themselves seeking more coverage as property exposures soar.
Rob Bredahl (pictured), chief executive of TigerRisk Partners, which is in the midst of merging with Howden following the $1.6 billion deal unveiled in June, says that cedants seeking large amounts of property-catastrophe capacity should be under no illusions as to how tough this renewal could be.
“I have seen some brokers playing down how difficult the market is going to be,” Bredahl said. “We think it could be extremely difficult and we, and our clients, are preparing for a very tough market. If we are wrong, it would be a great relief, but it’s better to prepare.
“So, we are preparing, we are advising our clients to prepare and we are putting in place backup plans if the renewal doesn’t go as we hope it will go. Clients are concerned about availability of capacity for the first time in decades. They’re pausing on adding more catastrophe exposure to their balance sheets because of the potential lack of reinsurance.”
Central to its strategy to find solutions is Tiger’s so-called SWAT (special weapons and tactics) team. The logic is sound: in the context of hardening rates, now is a very good time to invest in property-cat business. The challenge is simply explaining the opportunity to investors in a way that cuts through the wider noise of macroeconomic challenges including inflation and rising interest rates—and to get deals done in time for the year-end.
Led by Jarad Madea, chief executive officer of TigerRisk Capital Markets & Advisory, the unit contains experts from across the business, including traditional brokers, insurance-linked securities (ILS) experts and analytics specialists. Its job is to approach investors from many different specialities and educate them about market conditions now, and the resultant opportunity.
“We are systematically approaching investors that have either invested or shown interest in property-cat business before and we’re presenting them with a menu of ways they can enter the market,” Bredahl said.
“We’re showing them all sorts of live opportunities: traditional placements, sidecars, ILS fund investments, cat bonds, and how they can invest through Lloyd’s. And we’re showing them the pros and cons of each option.
“We’re reaching out to insurance companies: regional insurers, mutuals, and life companies, if they have written cat in the past or maybe we believe they have some interest in doing so. Finally, we are going to the traditional markets. We need to understand exactly what their appetite looks like and where they might have more capacity available.
“It is a big job but it needs to be done to best serve our clients. When we sit down with our clients and they say: ‘what are you doing to help us?’—there’s the answer. We are scouring the planet for cat capacity for the benefit of our clients.”
