Lara Mowery and Dinos Iordanou

Speaking during The Insurer TV’s inaugural broadcast, which is focused on the dynamics impacting the 1 January 2021 renewal, Mowery affirmed these start-ups would be here to stay as “long term solutions bringing brokers and cedents throughout the industry an alternative to accessing capital”. 

She said: “In terms of the start-ups we’re talking to, there really is a great deal of experience there and a lot of underwriting talent.

“These are people who know their way around the business and are being very thoughtful about how they’re raising capital, how they’re approaching brokers and cedents to work on building portfolios and thinking long term.”

She added: “None of these new players are in here to say, ‘Oh, in 2021, we’re going to take advantage’ and then go off and do something different. These are long, long term solutions that are being brought to market and it is exciting to see.” 

A big question going into this renewal has been the potential impact of new capital, both in terms of incumbents raising funds or scaling up new or existing platforms.

This has inevitably led some to suggest that capital coming into the sector will have a dampening effect on pricing conditions, and potentially shorten or lessen the opportunity for incumbents and new players.

But plenty of industry sources have played that down, suggesting that the current environment is not the result of capital erosion, but instead a refocus by underwriters on the need to generate underwriting profits as margins have been squeezed by the long soft market and deteriorating loss trends.

Indeed, earlier this month, AM Best said that while the impact of new capital remains uncertain on the global reinsurance market, it believes that new entrants are unlikely to have a material impact on excess supply or market discipline.

“Very few start-ups have failed”

Class of 2020

Among the new entrants, one of the most high profile is Vantage, which will initially look to begin building a reinsurance book from its Bermuda platform before targeting an insurance build-out next year. 

With $1bn of funding led by private equity firms The Carlyle Group and Hellman & Friedman, Vantage is led by CEO Greg Hendrick and non-executive chairman Dinos Iordanou. 

Speaking to The Insurer TV, Iordanou shared some insight as to why these new market entrants are best placed to take advantage of the current upcycle, stating that very few start-ups have failed.

“Those that started in 2001 and those starting today have the wind behind their sails and will probably do better than if you were to start up during the soft part of the cycle,” he said.

He said most 2001 start-ups saw success, with only a limited number of exceptions such as Quanta Capital Holdings, which entered run-off following heavy losses in the 2004 and 2005 hurricane seasons.

“Most of the class of 2001 are still in existence, even those who have been bought,” he said.

The environment for start-ups today has similarities with the market in 2001, Iordanou said, with underlying business at incumbents showing signs of stress that needs to be corrected through rate increases.

“In 2001, some companies had balance sheet issues and were thin in capital, which is not the case today. Most companies are now in good capital positions, and the rate increases are not required to address that,” he said.

However, he said the investment environment is now vastly different to 2001, when interest rates were between 4 percent and 5 percent.

“Today they are close to zero, so 100 percent of earnings have to emanate from underwriting rather than investments. The market is responding with rate increases and changes to terms and conditions that will improve profitability.”

Iordanou said start-ups bring the advantage of unencumbered capital. “Even though rating agencies will start you on A-, the balance sheets are stronger than that and I think the customer base recognises that,” he said.

In addition, he said start-ups “do not have a back book to distract them from moving forward”, and can also draw on the history, knowledge and ability of their key personnel when shaping the new company.

“In a good market, you have the opportunity to participate and don’t have to fight your way into these placements.

“For that reason, it is always good to start a new company on the upswing in the cycle, rather than on the downside,” he said.

“Cycles are short in nature on the upside and longer on the downside. Usually you get three to four years of price improvements to get pricing to profitability levels that are acceptable.

“Then you get two to three years where even though there may be adjustments downward, still the business is very profitable.”


Watch full programme here or below: 


Throughout the programme, we will be covering:

  • Key drivers influencing 1 January 2021 renewals
  • Impact of Covid-19
  • Terms and conditions: negotiating the fine print 
  • How casualty is at the heart of the battleground in the lead up to 1.1
  • Start-up capital and the new class of 2020

You will hear from our expert guests:

Ken Brandt, President of Underwriting Operations, TransRe
Jean-Paul Conoscente, CEO, Scor Global P&C
Dinos Iordanou, Non-executive Chairman, Vantage
Mike Mitchell, Head P&S Underwriting Reinsurance, Swiss Re
Lara Mowery, Global Head of Distribution, Guy Carpenter
Tony Rettino, Founding Partner, Elementum Advisors
Darius Satkauskas, Vice President, Equity Research - Insurance, KBW
David Bull, North American Editor, The Insurer

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