INTERVIEW: CHRISTA COLETTI, BMS RE
People are the difference
Ahead of a potentially challenging renewal, cedants and brokers that have previously invested in deep relationships will now be rewarded.
US insurers facing what could be a tricky year-end renewal should start negotiations early and be transparent. But those that have been consistent and continuously invested in long-term relationships with reinsurers should be in the strongest position.
That is the advice of Christa Coletti, executive vice president at reinsurance broker BMS Re and head of its Philadelphia office. She is also a specialist in the renewal of the reinsurance treaties with specific expertise in helping mutual insurers.
Coletti has her hands full at the moment, but is adamant that the principles that are important in a relationship-based industry do not change with market conditions. Clients that have nurtured relationships and remained loyal will reap the rewards now.
“Our advice is to get information out early, have the discussions, be transparent, and allow reinsurers time,” she said. “That constant dialogue is important. This industry is all about people, about relationships. We have worked hard for decades to build trust between clients and reinsurers.
“Now that will bear fruit. We’re in a difficult cycle, which could get even more difficult depending on further losses. But that’s when relationships matter.”
This ethos reflects BMS Re’s wider approach to business—and how it sets itself apart. Coletti explains that it invests in relationships, seeking partners whose values align with its own, those open to long-term relationships.
“We’re not everything to everyone, but we’re everything to some—companies whose values align with our values, our mission. That’s what drives us. Our clients’ success is our success. We are an employee-led organisation with an entrepreneurial spirit. We fully service our clients to the best of our ability,” she explained.
“Each portfolio is different and should be assessed on its own merits.”
Christa Coletti, BMS Re
Coletti started at BMS Re in 2010, launching its Philadelphia office. Since then, the Philadelphia office has grown to a hub of 21 people. In addition to placing standard property/casualty business, it has developed a specialist niche in working with mutual insurers and has experts in a number of other lines including professional lines and workers’ compensation. The team also offers advisory services, actuarial support and risk and analytics capabilities.
Dialogue is key
Coletti says the company believes that each cedant and its portfolio should be treated on merit—regardless of wider market conditions. While she acknowledges that this is not always possible, BMS Re endeavours to make the case for clients based on their own loss experience and the profitability of their business.
“Market conditions are very challenging. But we are believers in the idea that each portfolio is different and should be assessed on its own merits. Each has a different loss experience; each has a different geographic distribution. They all manage their exposures in different ways.
“So, where we have a client with a well-run book of business that’s always profitable, we encourage reinsurers to underwrite that business on its own merit,” she said.
It is also important to understand the challenges reinsurers are facing, but that is why dialogue is key, she added.
“If the reinsurer is hurting, but that’s not driven by our specific portfolio, we must understand their perspective and seek a mutual agreement. It’s the relationship that matters. If that is strong, there can be a candid conversation and a mutual agreement. I’m sure we’ll have bumps in the road but that goes back to getting out early.”
For her mutual insurance clients, Coletti says there is a different dynamic, partly because of the way they use reinsurance. She stresses that many view reinsurance as an essential part of their capital, which is quite different from listed companies, for example, which can raise capital in other ways and may use reinsurance for profit/loss protection.
“You want to make sure the business is profitable for their reinsurance partners.”
“Perhaps in that latter instance, reinsurance can be more transactional. For mutuals it is a big expense but also central to their ability to trade, so the relationships are critical,” she said.
“Whatever size, shape or form that reinsurance takes, there’s a real relationship there. For us, the broker, we become an extension of that mutual insurer. We’re always trying to better understand their strategy, what they need. And we look to smooth the cycle.
“You want to make sure the business is profitable for their reinsurance partners because that creates a sustainable relationship.”
She believes all lines could be difficult in this renewal because there are so many, often entwined, challenges including macro-economic factors such as inflation and interest rates. “I don’t think any one particular line is going to be a slam dunk—they’re all going to be a challenge.”
But this is when brokers can come into their own, she says, stressing that BMS Re has both the tools and the people to make a difference.
“We want to be the centre of excellence for our partners because that’s a successful relationship at both ends of the equation. We have the full suite of analytics and tools to help clients but the real difference is in the people operating those tools.
“Are they delivering options and solutions to clients? Are they collaborating with clients? You only get there through human interaction, through the people. I think our people ask better questions. And our people are better listeners,” she concluded.
Christa Coletti is executive vice president at reinsurance broker BMS Re and head of its Philadelphia office. She can be contacted at: christa.coletti@bmsgroup.com
Main image: Shutterstock / NDAB Creativity