We want profits for our partners: Aspen

While he would never wish to overpay for reinsurance, Stephen Postlewhite, chief executive officer of Aspen Insurance and the former CEO of Aspen Re, says he prefers to form long-term, sustainable partnerships with reinsurers which are profitable for both parties.

This means he is loath to shop around too opportunistically, even in a buyer’s market that is still softening in many areas, if the July renewals are to be taken as a guide of the health of the market.

“We want to use reinsurance to support us, not prop us up, and that means I want to be profitable in a way that also makes money for our reinsurers.”

Aspen Insurance has restructured its reinsurance programme since Postlewhite took the reins some 18 months ago, tasked with repositioning the company’s insurance business and moving it from operating in a number of silos globally into a company offering a truly global approach offered and executed through carefully selected regional hubs.

Since then, the company has developed worldwide product teams and aligned its operations under a common framework for delivering products to the global market. On the back of this, the company now intends to explore opportunities in new markets driven by regional teams with access to this global expertise.

This has meant establishing more quota share treaties with reinsurers willing to support the insurer’s ambitions as it repositions its portfolio and becomes more selective on the business it writes and also looks to manage volatility on its balance sheet.

“We are buying more quota share reinsurance to support our ambitions and remove volatility from our balance sheet,” Postlewhite says. “We will buy more coverage and we expect our net premiums to reduce on that basis.
“When we changed our structure our first instinct was to use the long-standing relationships we have with reinsurers but it is also true that reinsurers interested in pro-rata deals differ somewhat from those that prefer excess of loss business.

“That meant some changes and the reinsurers we work with taking reasonably big shares. But I am very pleased with where we have ended up with our programme. We spent a long time working through everything so that our reinsurers have full transparency and we now feel we have the right long-term partners in place.”

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