Patria Re on track for 2020 targets despite ‘unusual’ times

Multiline Mexico-based reinsurance specialist Patria Re is on track to meet its targets for this year despite the “unusual circumstances” of 2020 so far, according to Thomas Cunningham, the reinsurer’s vice president of its reinsurance division.

“Considering the unusual circumstances that we find ourselves in as a company, we’re very happy with business,” Cunningham told Intelligent Insurer.

“We are in catastrophe-prone territories: our headquarters is in Mexico, we have an office in Chile and I’m based in Miami.

“We have very robust resilience plans in place if a cat comes through winds, or an earthquake, in those territories. We’re ready to deal with extreme events and ultimately working remotely.”

The broader switch to greater digital and remote working has also worked for the firm’s special purpose arrangement in Lloyd’s.

“For this part of the business a very large proportion is done electronically these days, so working remotely or from home has been relatively straightforward and business flow has been fine,” he said.

Cunningham described Patria Re’s business as “generally very good”, pointing to the firm’s first half-year results. He said that even going into the wind season, which is very important for the reinsurer, the figures still look extremely good “and we’re online to hit our targets”.

“The last five years, considering the region that we deal with is mainly Latin America, has been in a very soft cycle.

“Our average combined ratio has been 95 percent. I think this shows considered growth in our portfolio, good cycle management and some prudent reinsurance buying in that process.”

Renewals and COVID-19
On whether the pandemic would affect renewals, Cunningham said: “Logistically, six months in, where the pandemic is now, I don’t think it’s going to have a huge effect on our renewals season.

“Clients and providers are aware that the analysis and underwriting for all companies is going to be a bit slower, so they’ve adjusted their timelines accordingly.

“Thinking about it economically, and I can speak only to the regions we deal with, we’ve not seen the full effects, but clearly there is going to be an economic downturn from the impacts of the pandemic.”

Six months previously, he added, the firm had been “more concerned” about the effects of the pandemic.

“We’ve lived with it for six months, we’ve worked our way through it, clients and providers understand it, and you need to be conscious of timelines and getting your information if you’re buying into reinsurance.

“I think it will be manageable going forward,” he said.

“The industry as a whole deserves credit for the way it has dealt with the situation.”

Commenting on the hard/hardening market, he said some in the industry were very bullish about it but others were not.

“If you look at all the reports, globally there’s definitely been hardening, but it’s still sporadic in territories that have had losses.

“I don’t think a hard market as such affects our planning and what we’re planning for the next five years.

“Obviously, it will help to enhance results but we’ve been in business for almost 70 years, so we’ve ridden a lot of cycles in a territory in which it is tough to make money and we’ve been very successful.

“We have a proven platform, which is flexible, good underwriting teams and our ability to react to new opportunities as the hard market presents them puts us in a very good position,” he concluded.