Shevawn Barder, Chief Executive Officer (CEO) of reinsurance MGA, AM RE Syndicate Inc., discussed recently how the US specialty risk-focused firm is keen to broaden its underwriting model with the right capital partners.
Leveraging its originate/underwrite distribution model, AM RE matches US specialty insurance risk with different capital sources.
The company is focused on low severity types of risks that are sourced with low limits across a selection of classes of business.
Earlier this year, the reinsurance MGA spoke with Artemis about its business model and its intentions to utilise new sources of capital in the months ahead.
More recently, at our virtual ILS Asia 2021 conference, CEO Barder discussed how AM RE, the event’s headline sponsor, generates its underwriting opportunities.
“In terms of where we find our underwriting opportunities, it’s organic, in that we have created our model and our platform, which are unique and distinct. AM RE is a very well recognised brand in the market, so opportunities come to us.
“Many market participants understand the value and sustainability that we add to their business. This is great for AM RE, as it allows us to choose the highest quality MGAs to work with,” said Barder.
Rates in the US market are at all-time highs, and Barder explained that this is reflected in AM RE’s portfolio results. All of the firm’s business is written on a quota share model, which ensures “all parties’ interests are aligned to create a profitable outcome.”
While AM RE clearly has its specialisms and expertise, Barder said with the right capital partners, “we would be very happy to expand our underwriting model.”
“If investors or reinsurers have a particular appetite, our platform gives us the ability to access a broad spectrum of risk classes,” she continued. “So due to our traction within the market, we have a very broad selection of quality programme business, and at the moment we lack the capacity to write some of those classes.”
Adding, “We have a very high level of underwriting expertise, and as a result we can tailor a security or an investment funds appetite to meet with the classes of risk they would select.
“Our in house analytics mean we closely monitor our programme business in real time, so that performance can be monitored and tracked to meet expectations. Any deviation, we can tackle quickly and effectively. We can also critique terms and conditions to meet a particular appetite and work to our advantage.”
Currently, AM RE is in the process of authorising an excess and surplus lines carrier in the US market, and Barder told the audience that the company would love to partner with an insurance-linked securities (ILS) investor.
“For example, we could replicate the concept of a sidecar with program business that we currently write. And due to the current trading environment, we see excellent trading conditions that manifest into solid combined loss ratios. And with quota share, it results in a steady balance of payments, so we can create a steady income stream on specific business classes with real longevity and sustainability as we partner with the right MGAs,” said Barder.
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