Cat treaty to play part of MS Amlin growth strategy: CEO Carrier
MS Amlin Underwriting will be looking to cat treaty as one of the areas it can achieve “measured, profitable growth” in 2024, according to CEO Andrew Carrier.
Speaking to Insurance Insider at the Monte Carlo Rendez-Vous, the executive said after extensive turnaround work at the carrier, it was well positioned to grow next year.
“This isn’t about going gangbusters because the market needs discipline at this stage,” he said. “But finally, after all the hard work we've been doing, I think we can try and take advantage of some of the opportunities in the market for 2024.”
For cat risk, treaty products offer the most enhanced risk-reward balance in MS Amlin’s view, Carrier said, noting that his firm would still write cat risk via D&F and binders.
“We would probably grow [in cat treaty] more internationally than in the US, and likely more at the severity end rather than the frequency.”
The increase in nat cat claims frequency is something that can't just be addressed with putting rates up, the executive explained.
“I think attachment points are imperative. And perhaps we as a market haven't used that dimension enough yet.”
He continued: “The reinsurance community and insurance community have just been trading earnings volatility in an asymmetric way. I think that still needs to be addressed.”
As this publication has previously written, Lloyd’s and the London market has been losing global market share in treaty due to various structural issues.
Carrier said he would welcome any market initiatives to write more treaty in London, and MS Amlin would be keen to participate in that.
“But I think the offering has to be more than just capacity,” he said, explaining that there was extensive expertise in underwriting and claims handling in London which could also be leveraged as part of an attractive treaty proposition.
In terms of thought leadership on issues such as wordings, he said the Lloyd’s market was “still at the vanguard of that activity”.
MS Amlin booked a slim underwriting profit – the first in six years – for Syndicate 2001 in 2022, following extensive re-underwriting of the portfolio, a cost management push and two legacy transactions to address prior-year volatility.
While Carrier was unable to disclose MS Amlin company financials for H1 2023, “I have a smile on my face,” he said.
The Lloyd’s market reported a combined ratio of 85% and top line growth of 22% for H1.
In terms of other areas of growth, Carrier noted that geopolitical uncertainty created opportunities to serve clients in some of the broader specialty lines.
MS Amlin is also slightly more weighted to property rather than casualty in its portfolio, and would assess opportunities to write more “vanilla” casualty to balance the book, he said.
Looking forward to 2024, the executive said: “We are excited by the opportunity for our company now that the [remedial] work is done. And next year, I want the financial statements to do the talking.