Capacity providers look to the future

As the world’s reinsurers gather in Monte Carlo for the annual Rendez-Vous, Ross Lazaroo-Hood of Landmark Holding Group explains that while there are opportunities for MGAs there needs to be more than just a compelling underwriting case.

The reinsurance sector arrives in Monte Carlo at a time when the market is looking at how to define its future.

In an environment where many of the rating agencies believe that reinsurance rates are still below technical levels, there remains a view that the ability to support managing general agents (MGAs) will provide opportunities to access markets where insurers and reinsurers do not currently participate. However, this must be done in a way that will deliver returns, while not impacting on their core relationships with international insurers.

Through Landmark we provide an underwriter-driven MGA incubator model, working with our partners to create new solutions and new operations in a wide range of business classes globally.

Our first MGA, Landmark Underwriting, is a specialist MGA. We have built it on solid expertise from the board including Tom McGrath (non-executive director) to our underwriting team, Roger Millgate, Brian Denton and Michael Comfort, all of whom joined the Landmark family in 2019.Through our expertise we bring true innovation and solutions for our partners.

Landmark Underwriting is seeing opportunities in the London Market. These have been created, in the most part, by the decision of Lloyd’s of London to challenge the lowest performing syndicates and their underwriting portfolios. The result has been that several syndicates have withdrawn their capacity in markets within our core risk classes.

The vacuum created by the withdrawal has led to opportunities that can provide long-term partnerships for capacity, brokers and clients alike. However, such an opportunity can be fully realised only by experienced underwriters who understand the risks and the reasons those markets have had to withdraw from offering cover. It remains a case of fully understanding the market and having the ability to be open with your long-term broking partners.

Partners
We work in close partnerships, building meaningful long-term business relationships through our existing and potential capacity partners. Through the Landmark Brand Ambassadorship programme we build trust, visibility and brand awareness, working with Esmee Hawkey (W Series and Porsche Carrera Cup racing driver) and the Westminster Wanderers Football Club. They communicate what the brand represents, what the group stands for, and its differences from the competition.

This year’s will be the 63rd Rendez-Vous, and the market and its dynamics have fundamentally changed in those six decades. Reinsurers are looking at the MGA sector as a home for their capacity. However, that appetite is more than matched by those who believe they have an opportunity that can deliver value to a capacity partner. It has created a supply and demand dynamic that leads reinsurers to become ever more prescriptive as to where they commit their capital.

Landmark has been built on its underwriting expertise and as such we will be talking to insurers and reinsurers in Monte Carlo about the underwriting merits of our MGAs.
Landmark directors Sitki Gelmen and David Robinson will be attending to identify capacity providers that will best share the ethos and commitment to the relevant class of business.

Gelmen, Landmark’s group chief financial officer, believes we stand above our peers because we are better able to explain our MGAs’ opportunities and the value of their products. Landmark MGA’s incubator provides a solid infrastructure to our MGAs and those wishing to join the Landmark family.

Capacity providers are demanding greater levels of data about risks. Reinsurers and insurers want to be satisfied that there is a competent and secure infrastructure behind the MGA. Greater regulatory pressures and the demand for real-time data mean that while the underwriting proposition can be compelling, there is a demand for an effective infrastructure to be in place to support underwriting operations.

Robinson, Landmark’s group chief underwriting officer, has noted that the MGA sector continues to prove its value, causing a growth in the number of underwriters seeking to set up MGAs. It has resulted in insurers and reinsurers becoming more discerning and selective as to who they partner with.

The Rendez-Vous acts as the starting gun for the race to the 1/1 renewals, and the market is looking at its capacity allocation for 2020 and beyond. We at Landmark head to Monte Carlo fully aware that there is an appetite to consider the real prospect of partnering with quality underwriters from MGAs for the long term.

Ross Lazaroo-Hood is the founder & group chief executive officer of Landmark Holding Group. He can be contacted at:  r.lazaroohood@landmarkholdinggrp.com