Specialty insurer and reinsurer Argo attributed much of its $49 million underwriting income success to leveraging digital tools to drive growth across specialty commercial lines, in its 2016 annual review.
Chief Executive Officer (CEO), Mark Watson, said the firm’s technology and engineering teams had closely worked together to achieve better underwriting through improved analysis and selection of risk.
Watson said; “We reduced cycle times substantially through automation, exponentially increasing the number of submissions we respond to, while freeing our underwriters to reach out to new clients. This led to what otherwise would have been a decline in premiums, given prevailing market conditions.”
Argo reported casualty business growth of over 10%, and an overall 4.1% E&S growth, with gross written premiums in E&S at $585.8 million.
Watson said across commercial specialty lines, “growth came mainly from program, surety and professional lines businesses that leveraged our digital tools, focused on real-time market re- search and aggressively pursued potential markets. Trident Public Risk Solutions found innovative ways to grow our public-entity business across the United States.”
And the Argo CEO said the firm would continue to place its bets on technology, saying the convergence of digital tools, risk analysis models and automated process provided a convergence which “will ultimately prove to be to the benefit of the policyholder and those who possess superior technology and the know-how to use it.
“As we continue to make our own business more simple and intimate through technology, I am confident that our own deep-domain expertise will allow us to thrive as a specialty insurer in an industry where new entrants cannot easily compete without such expertise.”
Specialty lines have come to the fore for reinsurers as they present new lines of business that could drive higher profit rates due to not yet being saturated with risk solutions.
Reinsurance giants like Swiss Re and Munich Re have been investing in pioneering niche specialty products, with Swiss Re seeing success in offering specialised products for Chinese farmers’ severe weather protection and Munich Re tapping into tailor-made aerospace and cyber risk products.
Both companies are making large investments in new technologies to back this product development.
Rating agency A.M. Best said a drive to move into specialty lines has become a market trend – a natural response to the operating environment to move away from long-established and fiercely competitive business lines and into newer, more innovative risks.
With both the reinsurance and insurance industries honing in on and developing specialty lines, the reinsurance sector is lined up for further growth, gradually taking on a larger business share as primary insurers buy higher premiums to enable underwriting of new risks.
