Refocused, growing, ready to thrive: BMS Re

On the back of three years of rapid growth yet also a refocusing on its core strengths, BMS Re is well positioned to continue that trajectory—something that could be aided by the hard market conditions and a potential 2023 refinancing.

That is the message from Pete Chandler (pictured), president and CEO of BMS Re North America. It has been a busy period for the executive. In 2021, BMS Re acquired Trean Intermediaries, which expanded its footprint in a number of specialty lines including workers’ compensation, accident and health, personal auto, public entity, and professional liability lines. It also cemented its position as a force in placing property-cat business.

In addition to the integration of that business, BMS Re has continued to hire. It has taken on some 120 people during the last three years, opened six new offices in the US and an office in Bermuda. Its revenues have increased threefold.

That growth disguises something important. It has been a period of rationalisation for the business. When it was formed 43 years ago, BMS was a reinsurance broker only. It has diversified since then. While it retains a wider offering especially in specialty lines, Chandler’s mandate, when he joined three years ago, was to bring the business back to its roots.

“BMS was originally a reinsurance intermediary. That’s in our DNA. We had started to branch off into other disciplines, other lines of business. But I was hired to fully restore BMS back to its roots. We have had some phenomenal success as a specialty intermediary, particularly in the UK. We have no reason to change that. But now we’re coming back. We will have specialty wholesale and specialty retail in other parts of the world and reinsurance in the US, the UK, Latin America and Bermuda.”

This renewed focus was agreed with the company’s investors: UK private equity (PE) firm Preservation Capital Partners and Canadian pension fund British Columbia Investment Management Corporation. As is the nature of PE investors, a partial exit strategy has been mooted. This could lead to a refinancing in 2023 but Chandler stresses its investors will not depart completely and any such deal does not affect the strategy of the business.

“It represents a natural evolution,” he says. “We are 100 percent committed to remaining independent. We love the private equity/pension fund model as far as capital providers, and we will continue down that path. We’ll keep doing what we’re doing.”

Despite the rapid growth, he says size is not the objective. Instead, the company wants to remain focused on its strengths and its clients. “It has never been our goal, to be the biggest. We just want to be recognised for our excellence in the areas we choose to trade. In those, we feel we can offer a discernible competitive advantage to our clients.”

Independent advocate

Chandler emphasises the holistic approach the business uses. While placing reinsurance is its main role, it advises on many other things including rating agencies, banking facilities and liaising with other stakeholders. “We are an independent adviser and advocate for our clients. Yes, we are very good at solving risk transfer problems, especially in a time of uncertainty. But our remit is much wider.”

He notes that this deep relationship is especially valuable for mutual insurers, which he describes as the backbone of BMS Re. “Those firms want a dedicated team of reinsurance professionals to help them navigate the complexities they’re dealing with, whatever they may be. We can make a significant difference for them in a very positive way.

“That applies to their risk transfer but also in helping them determine their products, their portfolio and where they choose to compete. We always try to think creatively to bring clients differentiated solutions.”

BMS Re has gained traction in recent years in the non-admitted space. This has partly been driven by challenging market conditions and a dynamic whereby more business is being placed in this way in the US. That has suited BMS Re.

“The growing prevalence of E&S in our industry has played very well for us because we know that space. The freedom it offers our clients to set rate and form has resonated strongly with reinsurers. It’s allowed us to secure covers that historically would have taken much longer. The E&S market has stepped up and filled a void.”

Speaking in the context of what was already a challenging market before Hurricane Ian, Chandler says the mantra for the short term is just hard work.

“It’s an exciting time in the business but it’s all about execution. We have done a tonne of heavy lifting in North America in the last three years. As such, we have a fantastic foundation to build upon. We don’t see any reason why our trajectory will change. We just need to work hard, be smart and practise our craft well,” he concluded.