Market conditions suit new player AM Specialty

The current hard market, combined with very limited capacity, has created conditions where year-old startup AM Specialty has been able to thrive.

Business is very good at the excess and surplus lines carrier and reinsurer, says chief executive officer Shevawn Barder (pictured).

“The market is hard and capacity is very limited, particularly in the US market. As a new player in the market, these conditions benefit us. We have no legacy and can selectively choose the programmes we participate in.”

She says the indications are that the hard market will continue in 2024, but she is not complacent about capacity, watching market developments closely.

“Capacity is king in this market currently. Any company that has capacity can pretty much dictate its own terms and conditions. As a startup, becoming active in a hard market is a massive benefit to us. We have limited capacity, but we’re able to deploy it under optimal conditions,” she explains.

Barder is mindful of the very limited retro capacity. She says: “Fortunately, due to our high level of underwriting expertise we’re comfortable being able to write all our business net of reinsurance if that’s necessary. But of course, reinsurance is always a very nice thing to have within your portfolio.”

Underwriting first

AM Specialty has an interesting and unique selling point: it uses an “underwriting first” philosophy as its business model.

“This means we look technically at every programme we participate on, whether it’s providing paper with a meaningful retention or reinsurance capacity,” Barder says.

“We make a significant capacity commitment to every programme. We will not support a programme without the confidence to commit meaningful capacity to it.

“We’re underwriters first and foremost, and we prioritise underwriting profitability over volume. We look at each portfolio of business as if we were the primary underwriters, which I think is unique in the market.”

Barder emphasises the “very deep bench of experienced underwriters” in the business as well as the “tried and tested” business model, which looks at low-limit non-nat cat grassroots, well geographically spread, US domestic business. She says AM Specialty focuses on specific business segments, and works to ensure spread and diversification across the business classes within the company. “This creates inherent balance within our portfolio,” she says.

The team tracks business performance and looks at the numbers weekly. Any portfolio that deviates from expectations receives immediate attention and corrective action, she says.

“We believe in having a high level of communication with all our partners, and all these elements work together to produce a cohesive approach to underwriting business which produces consistent results.”

Consistent results are much sought-after in today’s uncertain world, so how is the business positioning itself to capitalise on emerging opportunities and trends in this highly competitive and evolving market landscape?

“As a company AM Specialty is very small and nimble, and although the company might be a new startup the people involved have worked in the space for more than 20 years,” she says.

“We understand and value risk beyond price alone. This is due to our underwriting expertise.”

The company’s stated mission is to consistently add value to its partners and provide meaningful capacity, customised coverage and superior service. And, Barder says, the carrier and reinsurer works hard to build relationships with each opportunity.

The firm’s relatively small size means it has the flexibility and confidence to support programmes in multiple ways. “We believe in a very high level of communication with each company we partner with, and we look to engage with them over the long term. So we create a long-term partnership that enhances not only our business, but their business model as well.”

Coming back to the current market, Barder has a fairly optimistic take when it comes to the future potential for AM Specialty. “When you look at the economy, everyone thought that we would be in recession, but we’re not. Money has value today, interest rates have increased.

“We’ve seen a very hard market, we’ve seen a lack of capacity like never before. And there has been the Vesttoo reinsurance collapse.

“I think 2024 will be an extremely interesting year for the insurance market, and I feel that our company is very well-positioned to take advantage of that,” she concludes.

Shevawn Barder is chief executive officer of AM Specialty. She can be contacted at: email  contact.us@amspecialty.com