TransRe-Gen Re deal an ‘unqualified success’, says CEO of parent Alleghany
The partnership between TransRe and Gen Re that will see the former help the latter access the broker markets in the US has been an “unqualified success” the CEO of TransRe’s parent company has stated in relation to the reinsurer’s second quarter results.
Weston Hicks, president and chief executive officer of parent company Alleghany, said he expected the business bound during the first year to generate approximately $350 million of premiums for Gen Re on an underwriting year basis.
Some 12 months ago, General Reinsurance Corporation, bastion of the direct reinsurance relationship, owned by Berkshire Hathaway, revealed it had done a deal with Transatlantic Reinsurance Company, part of Alleghany Corporation, which would give it access to the broker markets and TransRe access to its balance sheet.
The deal has taken the form of an initial five-year agreement for TransRe to act as exclusive underwriting manager on behalf of Gen Re for US and Canadian property/casualty treaty reinsurance business produced by brokers and intermediaries. Around 80 percent of such business in this region is broker-controlled.
This new arrangement gives brokers and intermediaries access to Gen Re’s traditionally direct-only capacity through a new underwriting platform fully managed by TransRe, which will also provide all the underwriting and claims services for the business.
The idea is that the combined financial strength of the two companies will deliver broader capacity and line size, while providing consistency and assurance in execution. The facility will result in identical terms written on both TransRe and Gen Re balance sheets, giving clients diversification of counterparties and access to greater capacity.
For Gen Re this is a change of tack, giving it access to broker-sourced business; for TransRe it is also a shift in strategy to share risk with a third party in a way that will make it more relevant to brokers and a bigger player in its existing world.
Speaking in relation to the second quarter results of TransRe, Hicks called the deal “an unqualified success for all involved” so far.
“It is also worth noting that TransRe and Gen Re just passed the one year anniversary of their exclusive North American broker market underwriting partnership. The first year results were an unqualified success for all involved -- ceding companies and their brokers, as well as Gen Re and TransRe,” Hicks said.
“Over the past year, TransRe delivered Gen Re's high-quality capacity through 19 brokerage organizations to 150 clients across 18 diversified lines of business. In total, the business bound during the first year is expected to generate approximately $350 million of premiums for Gen Re on an underwriting year basis.”
Get the days re/insurance news - Sign up to our free daily email newsletters
Today’s stories
Allianz and Liverpool Victoria partner to form UK’s third biggest personal lines insurer
Brit grows in H1 despite rates softening by 2.2% across portfolio
Profits soar but cancellations and rate pressures hit Q2 premiums at TransRe
Investment returns mask poor combined ratio at Liberty Mutual in Q2
Arthur J Gallagher acquires Canadian broker GPL Assurance
Q2 profits leap at Allianz as P/C benefits from lower nat cat losses
Willis Towers Watson hires USI exec for CRB leadership role
Athene Holding signs flow reinsurance treaty with Lincoln Financial
