The Voice of Insurance

Cyber is rightly never far from the news. It’s a class of business that’s only 15 years old, but is already producing annual income in the billions of dollars for many insurers and reinsurers. Today’s guest is Paul Bantick, Global Head of Cyber Risks at Beazley Beazley’s gross cyber income was already well over a billion dollars in 2022 and is still growing strongly into this year on the back of seemingly insatiable demand, despite a near trebling of rate over the last three years. And this is demand that is picking up globally well outside the core market of the US. A lot of the cyber buck therefore stops with Beazley, and so what Paul has to say is really important for the future direction of the market. And we’ve got a huge amount to talk about. Cyber is at a crossroads. Rate has come off recently as underwriters have benefited from the pricing re-set of 2020 to 2022 and posted some very healthy combined ratios. The question now is whether we are going to descend into a difficult-to-comprehend downwards spiral like has happened in D&O or whether core discipline will hold. At the same time Beazley and others have pushed to impose much greater clarity around cyber war coverage, something that has sent waves through the market. In the meantime the work to get reinsurers and capital markets more comfortable with its view of systemic risk and supporting a cyber catastrophe market has continued in earnest with Beazley sponsoring a cyber cat bond - Cairney - at the beginning of 2023, a cover that it has since topped up twice with subsequent issuances. We talk about all this and an awful lot more besides. Happily Paul is really easy to talk to - and easy to follow. So if you want a comprehensive update on the insurance world’s most exciting class of business from one of its best-known lead underwriters, listen on. LINKS: We thank our naming sponsor AdvantageGo: https://www.advantagego.com/ We also thank our audio advertiser, Aventum Group Please contact them on: voi@aventumgroup.com

Often when we go to a conference a CEO will pop up to give us an inspiring pep talk about how nothing good in the world happens without insurance and how our industry is one with a genuinely useful moral purpose that has a positive effect on everything that it touches. We may nod along and then think little more of it. But today’s guest is living proof that those CEOs are right to feel inspired. That’s because Ekhosuehi Iyahen, Secretary General at the Insurance Development Forum’s (IDF) job is to harness the strong purpose of insurance to good effect in some of the countries in the world that can most benefit from it. Insurance is a business that brings together a vast array of different skills from science and engineering to statistics and finance all to try and prevent bad things from happening and to fix them when they do. But our skills and experience around prevention and risk mitigation are often lacking in developing countries that haven’t yet grown sophisticated financial systems and that’s where the IDF comes in, acting as a convener between the insurance industry, the aid community and international sovereign governments and local authorities on the ground. For instance how does a developing country know where to site its critical infrastructure if its country hasn’t been properly modelled for natural hazards? Ekhosuehi is a really interesting and intelligent guest. She’s also a very rare example of an academic of high intellect who has moved from the world of ideas to one of putting theory in practice on the ground. There are a lot of misconceptions to dispel – the first of which is the idea that what the IDF is doing is a form of charity. Nothing could be further from the truth – from this encounter you’ll learn very quickly that the IDF’s work is all about developing the vast new insurance markets of the future – and that these are long-term profitable commercial opportunities that will give rise to even bigger opportunities as they take hold. So listen on – if you have ever felt disillusioned at work and wondered whether what you do makes a difference, what you are about to hear should put a spring in your step. NOTES The IDF’s website is here: https://www.insdevforum.org/ Get in touch via email: info@insdevforum.org LinkedIn: www.linkedin.com/company/insdevforum/ X (formerly Twitter): @InsDevForum LINKS: We thank our naming sponsor AdvantageGo: https://www.advantagego.com/

This Monte Carlo Rendez-Vous was very different from last year’s. Last year it was all about reinsurers and brokers getting the clearest message possible across to buyers that the market was going to re-set in a major way at the first of January 2023. That made it pretty straightforward to report upon – for me or anyone listening to last year’s inaugural reinsurance documentary episode the message was obvious. And then, if the intentions of mortals weren’t clear enough, the insurance Gods chipped in with major Florida landfalling Hurricane Ian only days later. The message may or may not have got through but a huge lack of certainty for buyers was the result. Everyone could see that prices and attachment points had to rise and terms and conditions had to improve, but it was hard to find out specifically what that meant in firm terms from the market until very late in the day. This was traumatic and painful for many and put relationships under an enormous amount of strain. I’m recapping all of this because the trauma of the recent past meant that a reasonable part of this year’s Rendez-Vous necessarily dealt with looking back and trying to heal some of that scar tissue, repair fractured alliances and rationalise some of the changes that were made after everybody had last met in 2022. Reinsurance is a people and trust business and human emotions ran high at 1.1.23 so there was much more of the past tense than you would usually expect from a forward-looking gather such as this. Things are much calmer now and the word you’ll hear most in this podcast is orderly. But only once that pain of 1.1 23 was got out of the way was this a Rendez-Vous where we could look forwards and try to answer some of the big questions looming in 2024: Were the major changes of the-once-and-done variety or was more to come? Or conversely would the favourable reinsurance market conditions replenish appetites and attract new capital that would unleash renewed competitive forces in a way that has happened so many times in the past? Would this allow cedants to begin the slow process of chipping away at what reinsurers had gained at the last renewal? Would anyone be willing to look at selling a product to ease the increased burden on cedants’ earnings? And after a year marked by back-year deterioration, current inflation and painful US court awards, whether Casualty Reinsurance was likely to be subjected to the kind of re-set that had happened to property markets a year earlier? What follows will cover all of this and a lot more besides. My promise to you is that if you weren’t lucky enough to be down on the Med in mid-September, listening to this podcast will be the absolute next best thing to having been there in person, in the room with me as I canvas the views of a very large number key industry figures. Give me the next hour and I’ll give you the State of (Re)insurance. LINKS We thank our sponsor Stephens Rickard: www.stephensrickard.com

The Voice of Insurance podcast was very much made with guests like Richard Brindle in mind. A lot of people talk about being independent, but very few live it in the way today’s guest has done. And by that I mean independence of mind, thought and action, sometimes including independence from your reinsurers. Mr Brindle has always spoken his mind but he has also backed up his strong opinions with equally strong conviction and financial support for his views. Today’s market was made for underwriters like him, willing to do deals while others aren’t sure, and able to move quickly and give meaningful support to clients willing to trade on his terms. And now that Fidelis MGU is formally separated from its balance sheet Richard is even more energised and intensely focused on the world’s underwriting opportunities than at probably any time since his early days in Lloyd’s. So we have the ideal guest in an ideal situation, in a fascinating market in a real world that is presenting unique challenges almost daily. The result is one of the best podcast interviews the Voice of Insurance has managed so far. There’s no need to list out everything we talk about because it’s all here. We recorded this down in Monaco on September the tenth. We often moan about the Reinsurance Rendez-Vous in Monte Carlo and whether it is still relevant in the 21st century, but when it throws up opportunities to spend valuable time with some of its most singular industry leaders, it becomes obvious that it is easily worth the effort. If we didn’t have a world forum like this we would surely have to reinvent it, but if we needed to reinvent another Mr Brindle, I’m not quite sure we could. Listen on to see what I mean. NOTES: Richard mentions Fidelis involvement in the Howden-brokered insurance programme covering the UN-sponsored plan to clean up and secure the FSO Safer supertanker decaying off Yemen’s Red Sea coast. More information is available from the UN here: https://www.un.org/en/StopRedSeaSpill LINKS: We thank our naming sponsor AdvantageGo: https://www.advantagego.com/

I last spoke to today’s guests as part of last year’s The State of Reinsurance Special Episode from Monte Carlo. In that documentary-style podcast I spoke to over 20 people, so a one-on-one with this duo to look more closely at their still relatively young business was long overdue. Tim Gardner (left) and Bob Bisset (right) of Lockton Re have been very busy in the last four years since the project to build a challenger reinsurance broker began in earnest. The business has hired over 300 staff, run through $200mn in revenues and became profitable last year and in this episode we check in on how the reinsurance broker’s expansion plans are progressing. We also take the temperature on this still relatively hot reinsurance market. The result is a very lively and good-humoured encounter. Tim and Bob are buzzing and are clearly enjoying the considerable challenge of building out and scaling a global reinsurance broker. This is a task others have tried and failed to do and if you listen carefully I think you will hear the tiniest sense of relief in Tim’s voice that much of his early vision has been vindicated. I also think that this episode will give you a lot of insight into what Tim and his team are trying to do that is subtly different from some of Lockton Re’s peers. Tim and Bob say that getting the people, culture and capabilities right is the key and if you do that the revenue and profit will take care of themselves. That is to say they are just a byproduct and not the goal in itself. Lots of people say these kinds of things, but rarely have I met an executive team that really sounds like they mean it. So listen on and see if you hear what I hear. LINKS: We thank our naming sponsor AdvantageGo: https://www.advantagego.com/

Today’s guest is exactly the right person to have on the show at exactly the right time. The reinsurance world is about to head down to Monaco for its annual global Rendez-Vous. So ahead of that, speaking to the CEO of the reinsurer that according to AM Best is now the second largest writer of gross non-life reinsurance premium in the world, producing almost $26bn in P&C top line, has got to be a good call. A business of that scale has visibility into every nook and corner of the insurance value chain. So I am delighted to be welcoming Jean-Jacques Henchoz CEO of Hannover Re back to the podcast. But not just because of Hannover Re’s scale and strategically important position in the market, but also because of its, and Jean-Jacques’, straightforward approach to communication. Hannover Re is a massive player but it has always spoken to the market in a very direct style that has always struck me as being far more intimate and approachable than its more formal peers. I think that reflects the down-to-earth, no-nonsense nature of this still fast-growing and high performing business and it makes for a very valuable listen. From this conversation I think we can expect a much less dramatic and far more stable renewal season than the radical and revolutionary one we have just had. Jean-Jacques calmly answers all my questions, with no omissions or deviations and exudes all the smarts, coolness, stability and continuity that all cedants are really buying into when they seek out a major reinsurer like Hannover Re’s support. In fact I don’t think I have met a CEO yet who better personifies his company’s brand. LINKS: We thank our naming sponsor AdvantageGo: https://www.advantagego.com/

Today’s guest is an insurance technology entrepreneur with a great story to tell. Arun Balakrishnan started his career at sea but went back to business school, became an internet entrepreneur and ended up captaining Berkshire Hathaway’s foray into the Indian insurance market. Ten years ago he founded Insurance technology firm Xceedance and the growth has been rapid. But that’s just a bit of background because the main purpose of today’s podcast is to talk about Artificial Intelligence (AI) and in particular the generative AI that has exploded onto the world’s consciousness in the past six months. When something has been this hyped having someone like Arun on the show is an absolute godsend. Arun is a great explainer and first helps educate me about what the terms bandied around in AI really mean. Then we start to get to work on decoding what the best applications are going to be in the insurance world. This is fascinating stuff and we soon get down to the fundamentals of what machines and humans are really best at. I won’t spoil anything by saying that the humans in insurance really shouldn’t worry about being made redundant by this new technology – there are some things that AI can’t do well, and even if it could, we probably wouldn’t want it to do them for us. This is far more about improved accuracy and vastly increased productivity. Arun says we should think of it a bit like being allocated a smart intern, apprentice or an indefatigable underwriting assistant. Arun is a great teacher and I can highly commend this episode to anyone feeling bewildered or daunted as to how to start to engage with this exciting new technological development NOTES, ABBREVIATIONS AND FURTHER READING Arun mentions Word2Vec, which comes from ‘word to vector’, a technique whereby words are transformed into a numerical representation – ie. a vector, and is at the heart of the development of this new form of Artificial Intelligence. Another concept mentioned and worth reading up about further is Zero-Shot classification, which is all about creating a tool that can do a job that it hasn’t been specifically trained to do. An example might be for the AI to have learned a lot about football and then use this insight to classify an article about basketball, upon which it has never been trained. LINKS & CONTACT https://xceedance.com/ As Arun said, you can contact him directly on arun@xceedance.com

The older we get the more we lament the passing of the great personalities in the marketplace. Over an after-work drink we tend to reminisce about the entrepreneurial characters of old and how we wish there were more of their kind today. I know I do. Well, today’s guests are proving that this is a myth caused by old age because they are some of the most singular insurance people I have had on the programme to date. Craig Kingaby CEO of Meridian (Left) and Mark Heath CEO of Acies MGU (Right) both have vast London market and international insurance and reinsurance experience but what the Meridian business are trying to achieve is something different and a little special. For instance, they are trying to build a London-based diversified specialist insurance group, but one that is almost sitting outside the market. They have big growth plans and are moving fast but are doing so because the opportunity is in front of them, not because they have to satisfy the ambitions of impatient investors and hit target numbers. They don’t have an eye on an exit, but instead on building a generational business which will stop growing if it ever hits conflicts that might affect its clients. They are largely self-funded and wholly management controlled and they have even decided to spend a lot of time building their own technology platform. I told you that they’re a bit different. They’re also ideal interviewees because they can sign off on their own quotes. So what follows is one of the most frank exchanges about how to build a differentiated broking and MGA business I have ever had. This is a duo that has spent decades learning how things should and shouldn’t be done and becoming experts in the insurance game – the thing is that now they have decided to play their own game. Craig and Mark are great communicators and I think they are onto something interesting, so listen on for a very refreshing and challenging chat about what this new game is all about. Mark speaks first. NOTES: Craig mentions a Marcus at insurance placement platform, Whitespace. That’s Marcus Broome, its chief platform officer. LINKS: We thank our naming sponsor AdvantageGo: https://www.advantagego.com/

Today’s guest is someone pretty unique for our sector because he’s a software engineer who became a senior actuary and then founded his own insurance-focused technology business. Amrit Santhirasenan, Co-founder and CEO at hyperexponential’s story is a classic of the entrepreneurial genre: Frustrated with a lack of an insurance-specific decision-making platform to bring together underwriters, actuaries and the exponentially growing datasets that an increasingly digital world is producing, Amrit decided to build his own. The longer I am around, the more I find that an unorthodox combination of skills and experience often unlocks extra value and Amrit is a great example of this. He’s also not a stereotypical actuary because, amongst his many talents, he has the sort of communications skills that would put many top brokers to shame. So this podcast is an incredibly eloquent summing up of hyperexponential’s business model and a wider and very detailed examination of the state of insurance today. Ironically you could argue that underwriters and actuaries used to work closer together until technology started to get in the way. Amrit is on a mission to bring back a much tighter feedback loop between the actuaries who interrogate the data to uncover insights and the underwriters who have to take those insights and turn them into decisions out in the real world. Pricing is at the intersection of all the most exciting things that are happening in insurance today – it’s where data, brain power and market savvy all come together to try and give carriers an edge over their competitors. Amrit’s great company and a dream guest, so technologists and technophobes alike do listen on as we set the world to rights. You certainly don’t need any tech knowledge to get the benefit of Amrit’s insights. LINKS: www.hyperexponential.com

Today’s guest is someone with a fascinating story to tell. Today Antony Erotocritou is the CEO of Ardonagh Specialty but he has ridden the Ardonagh story all the way from its origins in the debt-for-equity swap for troubled UK retail consolidator Towergate in 2015. Ardonagh has since been on a journey to build its specialty and international operations, which included 2021’s transformational deal to buy the newly-formed Corant Global Group, comprising the brokers Ed and Besso. The organic and inorganic investment continues at high speed. Over the last eight years, perhaps the only part missing from this story has been a clear narrative from the broking group itself. It has given the impression that it is too busy with its head down to worry about what others might think of it. Ardonagh seemed happy to leave a vacuum that many of its peers have been eager to exploit. It’s fair to say that media coverage of the group in the past few years has been chequered, with as many negative stories of team defections as positive ones around new hires or acquisitions. Well, this podcast gives me the sense of being the start of the group getting out on the front foot. Ardonagh Specialty has consolidated its many brands into Price Forbes and Bishopsgate and Antony has a very positive growth story to tell. As a former CFO he is absolutely on top of the numbers and strategy and we have a very detailed discussion about the economics of scaling up an expansive broking platform. He’s excellent company and as someone who arrived to rectify one of UK broking’s most serious mis-steps, here is someone who knows in great detail how expansion should not be done. Here we learn how he thinks it should be done properly and given his unique experience, it’s really worth hearing him out. There’s a lot to learn and plenty of myths to be exploded. LINKS: We thank our naming sponsor AdvantageGo: https://www.advantagego.com/