Making the connection: AM RE brings US business to Asian carriers

It’s been a busy year at AM RE Syndicate. The US-based managing general agent (MGA), which writes primary programme business on a reinsurance basis, moved its operation to Dallas, Texas, had its best-ever year in terms of written income, and is now planning to launch a carrier.

It’s headed by husband-and-wife team Shevawn and Simon Barder, its chief executive and chief underwriting officer, respectively. Both Lloyd’s trained (she started as a broker with Willis), they launched their first MGA in 2000, brought it to Toronto and ultimately sold it to Ironshore Insurance.

Returning to the market in 2014 with AM RE, originally based in Manhattan, New York, last year they decided to move to Dallas, Texas. As Shevawn Barder notes, that proved tactical benefit.

“The move coincided with COVID-19, so we were lucky with our timing,” she told the 1.1 Club, Intelligent Insurer’s online, on-demand platform for one-on-one interviews with industry leaders. “Dallas, and the State of Texas, have taken a very positive view to keeping their economies open, and that has indirectly benefited our business,” Barder said.

It was, however, a strategic move. “Texas is the hub of programme business,” she said.

For AM RE, that business primarily involves excess and surplus (E&S) lines, writing specialty quota share reinsurance matching US cedants with Asian reinsurers.

“They don’t have a presence in the US on the ground, so what we’re bringing to them is high-quality grassroots business in the US market,” she explained.

The business has several attractions to the Asian market.

“This creates diversification for their business model, and because it’s written on the quota share basis, the volumes are pretty significant,” she continued. “We can bring them low limit, primary, non-nat cat business in a portfolio structure that settles on a 45 day time window.

“The business is compact, low limit and well geographically spread, and it settles on a finite time window. That’s fantastic in terms of being able to monitor the business and the cash flow.

“It really appeals to their appetite,” she added.

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A popular niche

Barder admits that E&S business is a niche in the market and not core, but that’s been a benefit, particularly in the last year, she insists.

“It’s a positive because it’s almost sitting outside the big lines, and that’s been interesting in the last year with the pandemic,” she said.

“A lot of business that would automatically flow into the admitted market has now started to flow into the non-admitted E&S market because of demand and the ability for the E&S market to react quickly to conditions. It has been a real positive with regard to hardening.”

The market remains hard, she added, partly because of the “fallout” due to COVID-19, and because of natural catastrophes.

“There have been a lot of natural disasters. We’ve had hurricanes, floods and wildfires, and that has continued to keep market conditions hard.”

That’s been a boon to AM RE—it’s written more business than ever before. “It’s high-quality business that we’re writing. It’s very profitable, and we see this rolling into 2022,” Barder said.

The other thing that benefits the business is its technical underwriting approach to programme business.

“We take primary underwriters and train them to write this business on a reinsured basis. That means they have the technical expertise to understand the business,” she explained. “The thing about the programme segment is it requires a special skillset. It can’t be written at a distance, contrary to what people may think.

“We need to stay in touch with the grassroots market, and that’s what we do.”

AM RE is, however, willing to branch out. It’s already beginning to write new lines, expanding into cyber and general liability business, and is now looking to launch its own carrier.

As Barder told Intelligent Insurer in October, it expects rates to remain positive for three to five years, and the business has no legacy from the soft market to worry about.

Initially, that was planned for as soon as this year, but the pandemic has meant some delays. Barder’s optimism, however, is undiminished.

“That’s a bit out of our hands, but we’re full steam ahead and looking forward to the launch in the first quarter of 2022,” she concluded.

To view the full 1.1 Club session click here