EXPANSION
Nine expansion strategies to watch
From plans for growth at major insurers to unique consortium-backed visions for expansion, this year presented opportunities for the brave. Intelligent Insurer picks its nine most interesting expansion schemes from 2022.
It was a year of opportunity for many re/insurers and they were not afraid to jump in with both feet as the strategies for expansion below show. Intelligent Insurer exclusively revealed significant expansion strategies at Munich Re and Deutsche Rück, accessing the inside story from those leading the charge. Read on to find out more and see what other growth plans should be on your radar.
1. Munich Re
Big 4 reinsurer Munich Re unveiled a new organisational structure for its Asia-Pacific and Africa (APA) P&C business as part of expansion and growth plans for the region.
Achim Kassow, Munich Re board member with responsibility for the APA division, told Intelligent Insurer that the restructure represented a shift away from the more traditional configuration where markets that are close to each other are managed together, towards one that focuses more on the maturity of markets. Three new market clusters have been created, which broadly cover China, developed markets and emerging markets.
The strategy shift was born out of the COVID-19 pandemic and restrictions on global travel. Kassow said: “In a way the pandemic was a driver in getting closer to clients, and proximity a key to success, because at that time it was the only way to continue with relationships.
“Now, with the hindsight of the last two-and-a-half years, the pandemic as a catalyst to become even more local has turned out to have given the right way to move forward, also in terms of structure. We looked at our numbers and they showed that we are on the right track.”
Munich Re recorded approximately 30 percent growth for its top line in the region in 2020 and 2021 combined. This year there will again be double-digit percentage growth, Kassow said, confirming for him that the firm’s strategy during the pandemic had worked well.
The new structure will come into effect on January 1, 2023.
“The restructure represented a shift away from the more traditional configuration.”
Achim Kassow, Munich Re
2. Deutsche Rück
Germany-headquartered reinsurer Deutsche Rück expanded into new territory this year with its move into the South, South East and East Asian markets.
In an exclusive interview with Intelligent Insurer Achim Bosch, chief underwriting officer at Deutsche Rück, revealed the reinsurer would begin writing business in the region effective from January 2023.
The long-term strategy has been to diversify its portfolio, as the firm traditionally had a concentration of business in Germany. This latest expansion builds on past growth into markets in Europe and, in 2021, into new markets in the Middle East, North Africa and Latin America. Bosch described the move into Asia as “the next logical step”.
The global CUO said the emphasis in Asia would be on “searching for profitable business” and “diversified business” with a focus on standard P&C business which is the reinsurer’s home turf.
“We don’t want to concentrate on just a few countries,” he said. “At the beginning we will not be able to do business in every market in Asia, so we will concentrate on a significant number of states.”
Tarik Aouad, currently managing director for the Middle East, will lead the market entrance.
https://www.intelligentinsurer.com/news/deutsche-ruck-to-start-writing-business-in-asia-30314
“We don’t want to concentrate on just a few countries.”
Achim Bosch, Deutsche Rück
3. Allianz
Allianz Group’s corporate insurance carrier Allianz Global Corporate & Specialty (AGCS) unveiled plans to expand in the alternative risk transfer (ART) space. It has hired a host of new faces and marketed new products to target the growing interest in tailored solutions in 2022’s hard market.
The insurer’s ART line of business will target multiyear, multiline structured insurance, in the main, with a focus on captive solutions, in particular captive fronting, according to AGCS’s global head of ART Grant Maxwell.
This growth will create dozens of new roles across the whole value chain in business-critical functions such as operations, accounting, actuarial, claims and multinational services.
“We are currently about 100 ART specialists globally, and we now plan to recruit 20 more people in the ART line and also a dozen others in other functions,” Maxwell said.
4. Sompo International Holdings
In April 2022, global specialty re/insurer Sompo International Holdings overhauled its insurance operations to expand the business and achieve sustainable profitable growth. The re/insurer wanted to ensure a consistent market approach and a streamlined process for its global clients.
A number of senior executives had changes to their responsibilities to boost the focus on key global relationships and build its EMEA and Asia business. Julian James became CEO, Global Markets. Sompo created a new North America region in the business, which is led by Christopher Sparro, and includes all P&C insurance in the US, Canada, Mexico and Bermuda regions.
Chief executive James Shea said at the time: “As part of a very large P&C business with over 130 years of history, Sompo International has become a stronger, dynamic and more relevant market presence in our industry.
“Our leadership team is committed to investing in the best talent and tools to meet the strategic goals of the business and successfully enter new markets while helping to drive our brand recognition around the world.”
“Our leadership team is committed to investing in the best talent and tools.”
James Shea, Sompo International
5. Markel
This global re/insurance business has been busy in the past 12 months attracting talent to support growth efforts across multiple regions and business lines.
In Asia, the business has grown 45 percent this year, which Markel’s managing director for Asia Christian Stobbs called “a phenomenal success for us”.
Stobbs said Markel is currently expanding and is recruiting underwriters in Hong Kong, Mumbai, Shanghai and Singapore. In Asia in 2019 alone, the company reported a rise in premiums of 35 percent in local offices compared to 2018. Markel is committed to expanding its local presence in Asia and combining it with the company’s teams in London and around the world to bring the best expertise and capacity to every client, he said.
“To achieve this, we have developed a simple global P&L to deliver across all classes, and we are already seeing a difference in the way both Markel and our brokers go to market.”
In January, Markel International, a subsidiary of the Markel Corporation, hired a former Liberty underwriter to support the expansion of its professional indemnity portfolio, and the business secured a trio of appointments to boost the growth of its Dubai office in trade credit, energy and marine markets across the Middle East and Asia-Pacific.
https://www.intelligentinsurer.com/news/phenomenal-growth-for-markel-asia-30945
https://www.intelligentinsurer.com/news/trio-of-senior-people-moves-for-markel-dubai-30993
“We have developed a simple global P&L to deliver across all classes.”
Christian Stobbs, Markel
6. Howden
Howden Group’s union with TigerRisk Partners in June this year was one of the high profile M&A stories of the year. The birth of Howden Tiger will create a global broker of significant size, boasting reinsurance operations on a par with some of the biggest players in the market, including Aon’s Reinsurance unit and Guy Carpenter/JLT Re.
But this tie-up was just one of Howden’s expansion plays. With big growth plans for Europe, Howden created the new role of chief operations officer for Europe in October and engaged 20-year AXA XL veteran Philippe Lutgen to take it on.
Lutgen will support the development and execution of Howden’s ambitious growth strategy, while driving integration as it establishes and consolidates its European platform.
7. Gallagher Re
Seizing new ground was high on the agenda for broker Gallagher Re as it prepared to expand in Europe and Asia with a sustained recruitment drive for senior people.
The company drew former RGA executive Arnaud Mézière into its ranks to lead its growth and expansion in the life reinsurance markets of France and Belgium.
In Asia, the broker continued to make strategic appointments in Japan and London as it sought to expand its service capabilities and offering across the Asia-Pacific region.
In June, the firm unveiled a multitude of senior “client-focused” hires to support the build-out of its strategic analytical, actuarial and client engagement capabilities across the wider region. This is an area the company has flagged as offering “significant” growth.
8. Blue Marble
Backed by a consortium, this innovative organisation has ambitions, and a strategy, to try to create 100 million new customers who have never had insurance or insurance-related protection in the past.”
The insurance solutions company’s lofty ideas have a more down-to-earth goal: to help to close the protection gap. Set up in 2016, the company spent its first six years launching 11 ventures in multiple territories. Jaime de Piniés, chief executive officer at Blue Marble, said this meant getting people on the ground in the country or region to work with local partners.
By doing its homework in countries including Colombia, Zimbabwe and Indonesia, the company has been able to understand what customers need, what their risk needs are, and from this design a product that meets those needs.
De Piniés says: “There’s a lot of field work and research that goes into designing a solution, and then packaging it into an insurance product.”
The firm has worked to “stitch together the risk supply chain with insurers and reinsurers” to ultimately expand and scale up its ventures.
https://www.intelligentinsurer.com/article/blue-marble-protecting-the-uninsured-together
9. LatAm prospects
With its booming population and growing middle class, there are potentially plenty of prospects for growth in the Latin America region.
Two Intelligent Insurer panel discussions with leaders working in the region revealed a consensus that Latin America is brimming with opportunities and ripe for global re/insurance firms looking to expand.
In one panel, Eduardo Betancourt, chief underwriting officer at Patria Re, said demand for insurance from businesses and consumers has increased coming out of the COVID-19 pandemic. He said that with more people working from home, insurance companies have developed new products to cater for the shift in work-life balance.
Betancourt believes that direct insurance is growing, so insurance companies have an opportunity to shape how they distribute products.
He said: “The dynamics of the market in the coming years will be about trying to find solutions, trying to find a way if customers require agents. I am convinced that agents are required for certain coverages, but in others, maybe you can go direct to be insured in a more efficient way.”
“Insurance companies have developed new products to cater for the shift in work-life balance.”
Eduardo Betancourt, Patria Re
Main image: Shutterstock.com / Triff
