“In excess casualty the firm is looking at areas its underwriting teams have experience in.”
John Boylan, Arcadian Risk
When was the company formed and with how much capital?
Arcadian Risk is a managing general agent (MGA) that received BMA Regulatory approval in August 2020. Since then, it has succeeded in attracting all the underwriting talent it initially targeted and more.
Arcadian Bermuda, with its core teams of casualty and professional liability underwriters, has gained positive market traction, having written tens of millions of dollars of business in Q4 2020 and in 2021.
It officially began underwriting in October 2020 in Bermuda with a skeleton underwriting team of just two casualty and two professional liability underwriters up to January 1. This team has been complemented by an additional five underwriters.
It has generated strong premium volume from its Bermuda platform, saw very attractive underwriting opportunities across the risk sectors and succeeded in gaining universal broker support.
Who are the main investors?
Arcadian is backed, with both capital and paper, by Third Point Bermuda.
What was the inspiration for the name?
The name Arcadian was the consensus of my four daughters. The name denotes a pastoral pace conducive to growth, which is appropriate for a hard market where book builds generate more margin and are more fun.
“Legacy issues will not impact new capital.”
Who are the key figures/senior management at this stage?
Almost all of the hires are from Markel, where I was most recently global casualty chief underwriting officer, before leaving in 2018, having also worked at XL Bermuda in its early days.
Deirdre Lohan is executive vice president for general liability, and was formerly at XL and Argo.
Sharon Lynch is executive vice president of professional liability and employment practice liability and is ex-Markel, as are Sally Gibson, executive vice president of professional liability for errors and omissions; Laurel Powell, senior vice president of general liability; and Nicole Barna, senior vice president of professional TL and tax.
Johnny Evans is senior vice president of directors and officers and is ex-Max/Alterra. Ronan Kane is senior vice president of general liability and is ex-Argo.
What is your initial business plan in terms of target lines of business?
Writing on the paper of Third Point Re—which also invested in the MGA—Arcadian is budgeting premium volume in the range of $75 million and $125 million in 2021.
The startup has initially been writing from its Bermuda launch platform but is now in the process of rolling out platforms in Dublin and London as it proceeds towards regulatory approval.
Arcadian is initially putting down lines of up to $15 million, with a minimum attachment point of $5 million for excess casualty and professional liability business. The capacity, supported by reinsurance, is typically being deployed lower down on programmes where the MGA is able to get reasonable rate-on-line with a better risk:reward return.
In excess casualty the firm is looking at areas its underwriting teams have experience in, such as life sciences, healthcare, transportation, utilities and construction.
It is targeting professional liability classes including public D&O, private companies D&O, E&O for accountants, consultants, brokers, Employment Practices Liability Insurance as well as architects and engineers professional liability.
The lines of business we want to go after are: general liability/professional liability; Fortune 1000/FTSE companies’ risk management accounts. The risk characteristic is high severity/low frequency.
“Rates will continue to rise and demand will be plentiful through 2021.”
Why did you feel now was a good time to launch a new reinsurer?
The market has finally turned, and this is only the third hard market in 34 years. Legacy issues will not impact new capital. More recent accident year numbers have been stressed, while the frequency and severity of losses have increased in the last number of years.
Investment returns are benign, expense ratios are climbing. Consequently many companies have pulled back or pulled out of business lines. Rates and margins are going up and contract terms and conditions are generally improving.
Why did you choose Bermuda?
I have been here since 1987. It is a particularly good place for startups. It is relatively easy to get regulatory approval here and there is liquidity in the market now. Business supports (legal, tax accounting) are plentiful and there is underwriting talent on the ground.
What has been your experience of Bermuda so far?
Very good. But caution—banks need to be a little more open and a lot more responsive.
What are your predictions for insurance market conditions in 2021?
More of the same as 2021—this market will have legs. Legacy results are still problematic, COVID-19 is impactful and many legacy companies still have book remediation to contend with. Rates will continue to rise and demand will be plentiful through 2021.
What are your medium-term objectives as a business?
To build in a margin-rich environment.
Image courtesy of Shutterstock / sirtravelalot / Dean Drobot
In association with:
A Bermuda:Re+ILS Special Report