NEWS
Bullish Incline eyes future growth
Despite economic concerns, the firm expects to raise additional capital and retain additional risk.
The current reinsurance market is one of the hardest the market has seen in recent years, due to a complex set of factors—and Hurricane Ian, which hit Florida and South Carolina last week, will only make things worse.
That is according to Christopher McClellan, president and chief executive of Incline Insurance Group. “This is one of the hardest markets we’ve seen in the past few years,” McClellan told APCIA Today.
“It has really tightened up and I don’t think Hurricane Ian’s going to help with that, especially in the catastrophe area.”
He said the insurance markets have short memories of such markets and what triggers them.
“All our memories tend to be short-term,” McClellan stressed. “After 2007/08, after 2001, we saw reinsurance rates increase and certain capacity decrease. In the P&C market, catastrophe rates are going up and that naturally creates challenges for the primary market.”
McClellan acknowledged that inflation and other issues including the aftermath of the COVID-19 pandemic are also having an impact.
He pointed out that the market has seen loss ratios go up in the auto world, because of supply chain issues and delays. He noted that thanks to so much technology being used in cars, such as sensors, the supply chain is far more complex and prone to disruption. Replacement parts can also be much more expensive, and costs are rising further driven by inflation.
“The market has seen loss ratios go up in the auto world.”
Christopher McClellan, Incline Insurance Group
McClellan noted, however, that rate changes tend to take a while to filter through to re/insurers as most policies are for six months or a year. He added that some states appear to be waiting until after the US November mid-term elections to process rate filings.
Away from rates and the dynamics of supply and demand, he singled out insurtech as a particular area of interest to the market. He pointed out that this is an area of mixed fortunes, however, with some insurtechs growing fast while other entrants struggle with what he calls the realities of the re/insurance market.
However, McClellan acknowledged that the technology many of these companies have developed is very good and, over time, will have a significant positive impact.
According to McClellan, Incline intends to press ahead with strong growth plans, despite economic concerns. During the COVID-19 pandemic, “the company kept going full bore”, as he described it. In 2021 Incline onboarded 21 new programmes, some of which were holdovers from 2020, but the company still enjoyed rapid growth.
McClellan said Incline expects to raise additional capital and, with that capacity, to retain additional risk. The company has two captive insurance companies currently dormant but it plans to use them extensively in the future as part of its risk management plans.
Main image: Shutterstock / Alex Urs
