Postcard from Monte Carlo: Essential news dispatches from the Fairmont
As Monte Carlo Rendez-Vous closes, Insurance Insider has compiled the exclusive news stories and c-suite interviews that comprise everything readers might have missed from a diary crunch.
With the starting gun now fired for the run up to the 1 January renewals, we covered CEOs' views on the dynamics that will influence negotiations – with one calling for an end to the "posturing by all parties" – as well as news of two reinsurance start-ups, a legacy M&A deal and one major carrier's plans to grow in cat treaty.
Mereo Advisors chairman Duperreault sets out vision for start-up
After Insurance Insider revealed that former Marsh McLennan and Ace CEO Brian Duperreault is targeting a return to the market as chairman of reinsurance start-up Mereo Advisors, the industry veteran explained to this publication his vision for the firm.
Duperreault has teamed up with investment executives Lawrence Minicone and Jason Miller to form the new reinsurance underwriting business – which will marry elements of the hedge fund world to reinsurance.
In an interview, Duperreault said that Mereo would be distinct from total return reinsurers (which had run into trouble in the recent past) because of its emphasis on the liability side of the balance sheet, not the asset side.
Ex-TMK duo Curran and Huckstepp explore start-up
In news of another reinsurance venture, Insurance Insider revealed that former Tokio Marine Kiln (TMK) reinsurance heads Will Curran and David Huckstepp are testing the water for an underwriting start-up.
Curran exited TMK in the spring of last year when the carrier dropped treaty reinsurance following a strategic review of the business. Huckstepp was appointed deputy head of reinsurance at Syndicate 510 in 2000 and succeeded Andrew Carrier in the head role in 2007.
Sources said plans for the treaty start-up are at a fairly early stage.
Aspen auditions bankers for ~$4bn H1 IPO in New York
Apollo-owned specialty carrier Aspen held a beauty parade last week as it lines up banks to advise on an IPO in the first half of 2024, this publication revealed.
Sources said Aspen met with a range of potential lead IPO banks, and is expected to appoint two or three this month. At Monte Carlo, Aspen chairman and group CEO Mark Cloutier said: "In the coming 24-36 months we would like to have access to capital markets in order to take advantage of potential opportunities we might see."
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, CEO Andrew Carrier told this publication in Monte Carlo.
The executive said after extensive turnaround work at the carrier, it was well positioned to grow next year.
He added: “This isn’t about going gangbusters because the market needs discipline at this stage. But finally, after all the hard work we've been doing, we can try and take advantage of some of the opportunities in the market for 2024.”
Chubb gets top-up $500mn cat layer done
Insurance Insider revealed that Chubb has now secured the commitments needed from reinsurers to get its new $500mn cat treaty layer home, providing an early read on appetite to meet new cedant demand at remote return periods.
In August, this publication revealed that the carrier was seeking to buy the top layer, in a sign that major buyers are returning to the market for additional capacity deemed too difficult to source during the 1 January renewal.
Aon heads into battle for cedants
Aon CEO Greg Case told this publication that the brokerage would be relentlessly advocating for its client base in early renewal discussions at Monte Carlo, just as reinsurers were signalling the need for further rate rises following a year of hard pricing.
Responding to suggestions that markets naturally find their level on pricing and terms and conditions, Case rejected the idea that “the market will be the market, and the price will be the price” as “ridiculous”.
Darag faces narrow path to deal as Enstar, Premia and RiverStone talks grind on
Insurance Insider's editor-at-large Adam McNestrie revealed that legacy firm Darag is facing an uphill struggle in its sale process as it labours to convince other legacy companies that there is strategic value in a merger deal.
Sources told this publication that while Darag remains in talks with rivals Enstar, Premia and RiverStone International, there is a significant mismatch in valuation expectations, and major work needed to get a transaction to the line.
Arch Re CEO on 1.1: "We're done with posturing from all parties"
The upcoming 1 January renewals will require a collaborative approach with early discovery of risk appetite among reinsurers, according to Maamoun Rajeh, chairman and CEO of Arch Worldwide Reinsurance Group, who told Insurance Insider that the market should be “done with the posturing from all parties.”
He added: “I think [mid-year] was orderly not because markets got harder and not because clients got a better deal. I think it was because there was a reset in expectations. And I think that there was price discovery that was early and that was collaborative.”
Tokio Marine's FICOH to hand Hawaii loss to reinsurers
This publication revealed that First Insurance Company of Hawaii (FICOH), a subsidiary of Tokio Marine, looks set to cede a significant loss to its reinsurers following last month’s Lahaina Fire.
Sources said early indications suggest that FICOH would cede in the region of $400mn of losses to its panel of reinsurers. The estimate is likely subject to change as the loss develops.
Explosive Vesttoo fallout continues with ~$50mn Clear Blue impact
This publication reported that fronting carrier Clear Blue and its subsidiaries took $49.6mn in reinsurance charges for the write-down of collateral on run-off business in relation to Vesttoo and Corinthian Group, according to delayed Q2 statutory financial filings.
The company also said it had secured the replacement of all reinsurance on its ongoing portfolio of business through third-party reinsurers and an affiliated reinsurer.
Insurance Insider has analysed the wider impact of the Vesttoo scandal for reinsurance.
Scor’s Léger highlights $50bn annual capacity gap
The global reinsurance market faces a roughly $50bn gap in capacity each year – and that will drive continued hard market conditions in the medium term, Scor CEO Thierry Léger told Insurance Insider.
In an interview, Léger laid out Scor’s evolving underwriting philosophy and its key messages to the market as the renewal season kicks off.
IQUW lands in-principle Lloyd’s approval for ‘portfolio solutions’ segment
IQUW has been granted in-principle approval from Lloyd’s to launch a line in bespoke specialty policies addressing non-traditional, nascent and dislocated market risks, Insurance Insider revealed during Monte Carlo.
The carrier’s Syndicate 1856 is to launch its “portfolio solutions” line in 2024 in a bid to write business not traditionally supported by Lloyd’s businesses.
Morocco govt expected to get $250mn parametric quake payout
A parametric insurance pool that benefits the Moroccan government is expected to receive a full $250mn insurance payout after an earthquake devastated parts of the country, sources told this publication.
In addition, there exists a further insurance pooling scheme covering Moroccan earthquake risk providing up to $1bn in cover, but only a partial payout is expected due to its different structure.