‘Our combined ratio makes people sit up!’

“Our combined ratio is what makes people sit up,” says Erik Feigelson Johansson, head of global credit & surety underwriting at Active Capital Reinsurance, as he discusses a rosy-looking future for the Barbados-domiciled reinsurer.

Feigelson Johansson, based in France, joined executive colleague Robert Ali, deputy chief operating officer at Active Re, in Barbados, to discuss the business’ prospects with Intelligent Insurer. The mood is buoyant as they outline a new era of potential supported by a recent rating upgrade from AM Best. They are also rightly proud of combined ratios of 60 percent and 80 percent for the managing general agent (MGA) and underwriting facilities, led by Ali, and credit & surety headed up by Feigelson Johansson, respectively.

Active Re has grown from a monoline reinsurer operating in the Latin America region to a global player working with multiple classes of business since it was founded in 2007.

“We try to have a combined ratio below 80 percent.” Erik Feigelson Johansson
The business celebrated its 15-year anniversary last year and with a fresh ratings upgrade under its belt—AM Best upped its investment grade rating to A (Excellent) in August 2023—the team is looking forward to scoping out yet more opportunities.

Outlining what makes his part of the business tick, Ali says that the reinsurer’s MGA and the underwriting facilities pillar let Active Re extend its products and services through the use of its third party strategic business partners.

“This allows us to offer niche lines of business or very specialised subsets of current product offerings. This extends into the likes of energy business, marine hull, cargo, liability and financial lines,” he says.

The structure offers a cohesive collaboration between the company’s third party strategic partners, its own reinsurance and clients.

Active Re’s involvement in the surety market is part of the firm’s heritage, says Feigelson Johansson. The firm hails from Latin America, which is one of the largest surety markets globally, he says. His book is 90 percent surety, but he sees room to grow the credit side in Asia. The business already operates in China but the surrounding countries in South East Asia, such as Korea and Indonesia present fresh potential. “We will pay special attention from next year to India, where there is a shift of focus from the banking business to the insurance sector,” he says.

Both executives are happy with performance in the past 12 months. Ali says that across MGA and underwriting facilities, Active Re has 16 binding authority agreements, across 10 different strategic partners. This represents a broad spectrum of business lines and territories. Performance is dependent on the product, but all 16 have performed “remarkably well”, achieving gross written premium of $68 million with a combined ratio of 60 percent.

“This is a tremendous success in terms of the partners that we look to establish strategic long term relationships with,” Ali says.

“The rating upgrade is linked with the recapitalisation of the company.” Robert Ali
Feigelson Johansson is also pleased. He says the credit & surety book represented 20 percent of the income for Active Re and in 2023 this has increased to 30 percent.

“Small is beautiful. We are a small company, we try to give the best service to the client. We have a conservative approach and we try to have a combined ratio below 80 percent to be sustainable in the long term on the credit & surety line, but mostly on surety.”

An era of opportunity