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“Laser focus” on building best possible portfolio key for reinsurers: Reardon, Hiscox Re & ILS

13th September 2022 - Author: Kassandra Jimenez-Sanchez

Hiscox Re & ILS Chief Executive Officer, Kathleen Reardon, sat down with Reinsurance News to share her thoughts regarding the importance of diversification for reinsurers, particularly as many look to reduce catastrophe exposures.

Reardon said: “Most reinsurers endeavour to deploy a multi-line strategy – for example, at Hiscox Re & ILS, we have a diverse book of Property, Marine and broader specialty lines. To be successful though requires a laser focus on building the best possible portfolio of risk in your chosen areas of expertise.

“However, many reinsurance lines of business are not for the faint of heart; they require deep experience and total understanding of the perils, so rushing into a line of business post-loss without proper preparedness is fraught with risk.

“The lines of business being impacted by the war in Ukraine are examples of where thorough knowledge of the interaction between multiple lines of business is necessary.”

Additionally, according to Reardon, many reinsurers have diversified their capital bases. However, these capital partners expect performance in-line with expectations and that has not recently proved easy to achieve.

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“At Hiscox Re & ILS, our relative outperformance has allowed us to continue to attract additional capital, but that has not been the case for some of our peers,” added Reardon.

She also shared her views regarding market modernisation. She highlighted that, even though there has been some progress, the move towards modernisation has been slow.

Reardon said: “The larger brokers have built their own e-trading platforms which reinsurers are utilising, and there has been some progress when it comes to establishing a standard data format for claims and premium bordereaux, but overall the move towards modernisation across the market as a whole has been slow. Although there is still more work to be done in terms of modernisation to improve efficiencies, the industry is moving in the right direction.

“At Hiscox Re & ILS, we are ingesting data faster which frees up our talent to do higher value-add work. At the same time though, this is a people business and we still believe that the face-to-face element of transacting business is important, particularly for large complex risks, so we don’t envisage moving to an entire end-to-end electronic binding process.”

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