Meaningful advances in technology and analytics provides a new re/insurance carrier with far greater capabilities today than in previous periods of market hardening, according to Greg Hendrick, Chief Executive Officer (CEO) of Vantage.
Vantage announced its launch last week with $1 billion of equity capital ahead of the January 1st, 2021 reinsurance renewals.
Established to take advantage of the hardening market environment, the new re/insurer will utilise advanced technology and leading talent to target business where existing capacity is declining.
Around the Bermuda-based company’s launch, Reinsurance News spoke with co-founder and CEO Hendrick, previously of AXA XL, about the current operating landscape and how this differs from previous market cycles.
“Every market change is different,” said Hendrick. “What this one has is in common with past cycles, is that the event that everyone’s looking at, which is the most recent one, which is COVID, wasn’t necessarily the only thing, but it was the tipping point.
“So, if you go back to 2001, in 1999 and 2000 carriers were starting to realise they had reduced pricing on property exposure too much, and they were starting to turn in a small and gradual way. And, then, 9/11 came and disrupted not just property, but many lines of business.
“I think you can make the same argument here about COVID, right? The change was coming already in the industry, this just accelerated it. But each one’s different, and the reality of the time when the event comes to light is also a big factor.”
According to Hendrick, one of the main benefits of today’s hardening market, in terms of launching a new entity, is the technology piece.
“What you can do now as a new carrier is a whole lot different than what you could do even back in 2005. And, certainly, a lot different than what you could do back in 2001 and 1992, and the late 80s,” explained Hendrick.
Of course, Vantage launches with no legacy reserves and while this ensures the re/insurer will not have to worry about developments of the past, it’s the advancements in technology that the firm is really excited about.
“Insurance has historically been not great as an industry about utilising technology, but over the last decade or so that’s changed a fair bit. You’ve had the emergence of InsurTech and that has solved some major issues that we had before. And, a lot of the prevailing platforms have gone on to the cloud.
“And, so, for me, that opportunity doesn’t exist all the time and, now’s a great time to have a blank piece of paper on the technology side, not hindered by legacy systems, so you’re able to design the technology the way you want to be more efficient and better analytically,” said Hendrick.
Adding: “Having no legacy technology lets us build the capabilities that we’d like to have from a blank piece of paper, which I think is a big advantage. These are based across reinsurance and insurance, right. We’re reinsurance at the moment, because of just getting going but we plan to be, during 2021, building out a meaningful insurance operation.”
Clearly, the utilisation of advanced tech and analytics is a cornerstone of Vantage, but as noted by Hendrick, talent is also a very important piece of the puzzle.
“I think, at the moment, particularly in insurance but you see it in reinsurance as well, firms are closing businesses, firms are retracting capacity from lines of business, and that tends to shake free good talent that wants to get back on the front foot and look for a new startup to build and create with together.
“So, I think, those two things together, having the ability to do great things technology wise and attract great talent, gives us a good foundation to jump off of,” said Hendrick.
Vantage has already started to build out its reinsurance operation in Bermuda and is actively underwriting 1/1 business for property catastrophe, in all different forms, and specialty reinsurance, Hendrick told Reinsurance News.
“So, the next 12 months, in the near-term, we’re going to see the completion of the build out of a reinsurance franchise that has property catastrophe and specialty reinsurance capabilities. And, the catch up of a build out of insurance business, looking at excess casualty, D&O, E&O, healthcare, E&S property, and other lines of business.
“The commonality across all those is the market’s dislocated, capacity has been shrinking, pricing has been increasing, and there’s a need for a new carrier to provide some solution. So, the first year is going to be very much focused on building out those capabilities,” said Hendrick.
Over the longer-term, he continued, it’s very much around the idea that Vantage sees risk differently.
“I touched on what I expect people to see us do, which is, harness technology and analytics, particularly to be able to enable great talent to go out and create new coverages or different ways of protecting risk. This way we can increase the pie on the insurance and reinsurance marketplace, as opposed to just going back to what we’ve done in prior cycles, which is just continuing over the existing pie.
“I think that creativity and curiosity is a very big part of what you should see from us in the longer term,” said Hendrick.
