NEWS
IQUW is seeking a rating for its Bermuda balance sheet
IQUW is enjoying the fruits of the hard market and seeking more growth.
While he does not claim complete foresight, Stephen Young, chief executive of IQUW Bermuda and global head of reinsurance, says the company had an inkling rates were changing when it launched. That was in 2020 and it has enjoyed a solid start as a result.
“At the time of launch, we felt rates were changing,” he said. “It seemed like a real opportunity and things have certainly panned out that way. But the industry as a whole has a lot of work still to do.
“We need to prove to investors that we can write business and be profitable well above the cost of capital on a regular basis.”
The last renewal was particularly successful for the reinsurer. Young said risk-adjusted rates were up 38 percent in its property-cat portfolio and attachment points have increased substantially. Contracts were also tighter, covering named perils and with more substantive exclusions.
That said, he believes further improvements will come this year. “We think rates have further to go on some lines,” he said.
“The industry as a whole has a lot of work still to do.”
Stephen Young, IQUW Bermuda
Multiple losses in the first half of the year from secondary perils illustrated that reinsurers’ collective strategy has been a good one. The majority have been absorbed by cedants this time around.
“If anything, that makes the case for where we need to be” he said. “We need to prove to investors we are doing the correct things for improved returns.”
All this has made for solid growth for the business, which writes through IQUW Syndicate 1856 at Lloyd’s. Young said the business has invested heavily in talent and technology to create a culture of underwriting and analytical talent. He says it wants to be able to give clients and brokers consistent, accurate solutions faster.
Fast-forward to 2023 and the group is forecast to do some $1.3 billion of premium, which is 24 percent year-on-year growth. Bermuda’s contribution to that is growing: now with 10 staff, he says the business is considering the prospect of writing paper on its Bermuda balance sheet with a rating in the pipeline. “There is no timeline but that is the eventual aim,” he concluded.
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