ROUNDTABLE: LEGACY RE/INSURANCE
HAVE PEOPLE’S ATTITUDES TO USING LEGACY CARRIERS AS A STRATEGIC TOOL CHANGED? DOES THAT ALSO APPLY TO THE BMA?
“We certainly add value to both sides.”
James Ferris
James Ferris: Definitely. Some people still have a negative view of legacy transaction but for most it’s about creating a better capital position. Freeing up capital through a legacy transaction can often be easier than raising more capital, especially if a client is looking to increase regulatory capital.
Brokers add value because we can invoke competition and help the seller get everything in order before going to market. Markets may also look to source deals themselves; they’re experts in what they do, but we certainly add value to both sides.
“Since I joined the industry, there has been a total change in perspective.”
Michael Fontanetta
Michael Fontanetta: Agreed. When I joined the business back in 2017, I was treated to stories about how counterparties would actively avoid being seen in public with us for fear of market perception. Since I joined the industry, there has been a total change in perspective. It’s now a capital management tool, a means of reducing earnings volatility, a way getting risk off the books, or all of the above.
Mary Ward: The BMA looks at every company on a standalone basis. But as a result of the number of new entrants there is an element of standardisation and their understanding is growing as the legacy industry matures. There’s a framework in place and they are building from that.
“We work very closely with them.”
Brid Reynolds
Brid Reynolds: I agree that the BMA’s legacy expertise is growing. They are willing to hold meetings to discuss and understand our business and have implemented a standard application process for each deal, including review of the legal contracts. I would say we work very closely with them.
John McGlynn: I think we need a legacy association, that would be hugely advantageous. It could be a voice for legacy.
“We need a legacy association, that would be hugely advantageous.”
John McGlynn
Ferris: The BMA is definitely interested in having a good dialogue with the sector. A legacy association could help address any BMA concerns as a market.
Ward: The BMA works with all industry bodies. It’s a reciprocal relationship—it’s in all parties’ interests that the BMA understands the legacy business model and the BMA certainly has demonstrated a willingness to work with the market participants.
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