Brand, who serves as deputy CEO of the London-Bermuda specialty carrier, highlighted that London remains a “great platform” for US E&S business with hardening rates driving improvements in terms for underwriters willing to cease the opportunity.
“As the market hardens we’re going to see improvements in the flow of that business into London and the terms on that businesses,” the executive told The ReInsurer. “It’s a great opportunity for underwriters to achieve profitable growth.”
But not all the US E&S business comes into London, Brand added, noting that Convex – which received regulatory approval to write E&S lines across the United States in October last year – may look at “other methods” of securing that business over time.
“At the moment Convex is very happy to get the business it does from the London brokers, over time we may look at other methods,” he said.
The emergence of improved rates and hardening market conditions has been “tremendously good news” for Convex, Brand said, noting that the specialty carrier is able to concentrate on the future and is not plagued with concerns such as casualty reserves which may be impacting its rivals.
“We’re immensely fortunate in terms of timing,” he said. “We’re able to concentrate on the future.”
“Many other companies are looking backwards and regretting things they had written into their portfolios before. We can look forward, can be there for our clients and be there for brokers. It creates optimism in the company and enables us to go faster.”
Despite his optimism, the hard market conditions are not being felt consistently across all lines of business, he added.
“Clearly there is a huge amount of variance between individual lines and I’d expect that to continue,” he said. “At the moment we’re seeing prices rise and we would expect that to continue. It’s a question of how you balance between good news and bad news.”
Brand offered a more pessimistic outlook on certain market commentary that perhaps the industry’s Covid-19 losses are less than are currently being guided for.
“I’d be surprised if that is the case. It would be the first time that I’ve seen a major loss event come inside the early estimate instead of moving beyond them. I’m looking at an environment where we will continue to get some bad news coming out that offsets the good news – this will keep prices harder.”
Brand said that while Lloyd’s remains “entirely central” to the London Market, Convex would be “constrained” at Lloyd’s, noting that the possibility of a Convex Lloyd’s platform is “something we’re keeping an eye on”.
“We’re a rapidly growing company and we’re trying to seize the opportunity the market is offering to us with both hands”, he explained. “We’d be a little bit constrained at Lloyd’s. I think Lloyd’s would add complexity that perhaps we don’t need at the moment.”