London-headquartered re/insurance specialist Neon has announced that from the start of January 2020 it will no longer write property treaty reinsurance, citing a lack of sustainable and appropriate returns.
As a result of the firm’s decision to exit the property treaty space, it will re-focus its Global Property and Property Binders business in London, leading to the closure of its Bermuda-based platform.
Neon says that this “decision has not been taken lightly,” adding that personnel in both London and Bermuda will be impacted, although the exact details are yet to be finalised.
“Over the past three years we have been incredibly proud of the traction and commitment to service that our Property Reinsurance underwriters in both London and Bermuda have brought. Whilst we had suffered some significant catastrophe losses in these books of business in 2017 & 2018, they were within our reinsurance/retro programme and below a number of our market peers,” explains the firm.
Neon continues to explain that with the meaningful hardening of retrocession pricing exceeding the pricing expectations of the inwards reinsurance business, and also to keep within the limits of Neon’s risk appetite, it has decided, along with its parent AFG, that the property treaty business line isn’t able to produce a “sustainable and appropriate risk/reward” balance for the company.
“AFG continues to support Neon and the Lloyd’s platform and believes that Neon can make a profitable contribution to AFG’s results. AFG remains open to new opportunities and the identification of new classes of profitable business,” says Neon.
