Alimco Re eyes $300m on growth spurt but is now consolidating

Alimco Re, a reinsurer formed four years ago by the Miller Family Office, could reach $300 million in underwriting premium this year. But after what has been a period of rapid growth over the last 18 months, it is now more focused on building out its infrastructure in the next 12 months, while remaining small and nimble, Chris Dougherty, its chief executive, told APCIA Today.

“We have grown a lot in a short space of time, and so we have relied on outsourcing parts of our infrastructure such as analytics,” he said. “We will now look to change that. Equally, some of the book will need to be turned over. Maybe we will grow a little next year, maybe 15 percent, but not as quickly as we have been.”

The family office that formed the reinsurer originally did so as part of a broader investment strategy related to other portfolio companies, and was attracted by the notion of the “float” it could then invest. It initially outsourced all underwriting, but that stance changed some two years ago, leading to Dougherty taking the reins of the reinsurer in April 2023. 

This led to more underwriting collaboration and oversight, including direct sourcing of business. “They decided they wanted to do it properly,” he said.

Starting from scratch

A veteran of Axis Re, AXA XL (XL and XL Catlin before that) and Coaction Global most recently, Dougherty is from an entrepreneurial family and says he was attracted to the opportunity to build a reinsurer (almost) from scratch. Two months ago, Larry Richardson, a veteran of Watford, Arch and RenRe Ventures, joined him at Alimco Re as chief operating officer.

He stresses that the company has no plans to have a very large permanent staff. “We intend always to have a staff base as if we were operating in a soft market—we don’t want to grow, only to let people go if the market changes,” he said. “We can then flex outsourcing agreements as needed.”

Alimco Re currently writes roughly 75 percent long-tail business, of which some 40 percent is general liability, and 25 percent short-tail lines. It is all quota share business, with a small number of clients it has “deep” relationships with. It has almost no exposure to property-cat. “Our capital base is small; we do not want the volatility,” Dougherty said.

“We like the size and shape we are right now.”

The company’s vision is long term, he says. There is no aspiration to eventually sell, list or spin it off. There is also no pressure to grow. “They want to be profitable on both sides of the business. If market conditions change, we have no issue shrinking,” he said. 

“On the underwriting side we take low risk; perhaps they take more on the investment side. But we like the size and shape we are right now.”

Dougherty says he will use his time at APCIA to meet core clients with which the reinsurer has “some very large positions”, to prospect some potential new clients “very selectively” and discuss market conditions.

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