Markel Re to target untapped segments
Markel Re will use third party capital to supply under-served segments of the industry with relevant products, according to Jed Rhoads, president and chief underwriting officer, reinsurance, Markel Re.
Following the announcement of three new hires—all of whom have relevant expertise within the insurance-linked securities (ILS) area—Rhoads says that Markel will combine its efforts to grow this portion of the business.
“The hires will help us build out our existing business, but the team will work on creating new products that we think the industry could use. Segments of our industry are not being served properly despite the oversupply of capital,” said Rhoads.
As one of the largest buyers and sellers of reinsurance in the world, Rhoads said, Markel brings a “unique understanding” to the advantages and disadvantages of traditional and third party capital, having utilised both for so long.
“New Point is arguably one of the oldest dedicated retro sidecars in the market, and in addition, we’re agnostic to how the capital is delivered. What we’re not agnostic about is naive capital—whether it comes from the traditional side or the alternative markets,” said Rhoads.
“It has more to do with how intelligent we are about how we deploy the capital, more so than size or platform. I think we’re in a pretty classic soft market build-up and as an industry we need to be careful that we don’t get ahead of ourselves.”
He continued by warning of the dangers of doing business with “just anybody” and said that reinsurers should be cautious.
“We’re not in a business about price—yes it’s important, but at the end of the day, you need to be able to look your underwriter and broker in the eye and know who you’re dealing with. We need to be careful that we don’t think that we can do business with just anybody,” he said.
Rhoads also spoke of M&A rumours, which he said are circulating at the conference.
“I’m not surprised to see these happen—I’m a little surprised that we haven’t seen more happening already. Post-US wind season, I think we’ll hear some announcements,” he said.
