Detail on Hamilton-AIG SME venture revealed soon

Details of the brand and structure that will underpin Hamilton Insurance Group’s previously announced plans to launch a new insurance platform targeting the small to medium-sized enterprise (SME) market in the US will be revealed very soon, Brian Duperreault, chief executive of Hamilton, told Monte Carlo Today.

The venture, first revealed in April, will be done as a joint venture between Hamilton, AIG and Two Sigma Investments. The concept will combine the data science expertise of Two Sigma with the underwriting and insurance expertise of Hamilton and AIG to offer a streamlined product targeting the $76 billion SME market in the US, which Duperreault describes as underserved.

He confirmed that a new brand will be launched to market the product and, while the risk will be shared 50:50 between Hamilton and AIG, it is not yet clear which balance sheet the risk will initially sit on.

“SMEs are a wonderful market in the US—it is the engine of the economy. But it is underserved,” he said. “The way insurers currently serve it is practically mediaeval. We are going to make it more efficient and use technology to its full potential to deliver solutions to clients.”

Commenting on the current soft market facing his reinsurance operation Hamilton Re, he predicts the market will eventually change but for reasons that are, as yet, unclear.

“I have seen many big changes in this market and they have always been a surprise,” he said. “How can you predict a shock? I don’t know that this is the so-called new normal. Every time it has turned it has been for different reasons,” Duperreault said.

“Often, as was the case with 9/11, there is an unexpected loss that also causes that fear factor. More capital withdrew than was destroyed after that loss. If something occurs that shakes the industry’s confidence, the market will harden but you cannot predict what that will be.”