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26 November 2018News

Argo passes more milestones

As 2019 looms ahead for the reinsurance industry, Argo Group is continuing to evolve to meet the challenges of the market, according to its chief executive officer, Mark Watson.

According to Watson, the company has passed a number of milestones as it heads towards the January 1 renewals—one of the key ones being developing its ability to work with and transfer risks for third parties.

“There are two positives I want to highlight,” he says. “The first is our continued progress towards being remunerated for originating risk for third parties.

“This time last year, we were putting in place a structure/risk transfer mechanism that would allow us to transfer risks to others if they were interested in our originating risk for them.

“If you fast-forward to today, the majority of the property cat reinsurance risk we originate, we originate on behalf of others. That’s been an important milestone over the past year.”

Watson adds Argo is focused on expanding its footprint from just property/cat reinsurance to other forms of insurance risk.

In addition, Argo is putting in place a couple of structures that Watson thinks will be of interest to third party capital providers, stating that it will be interesting to see over the next year whether Argo can expand its offering of risk to third parties beyond just property/cat reinsurers.

The second thing that Watson identifies is the progress the company has made with the evolution of its digital team and the business created within it.

“With another year under our belts, we’re now at a place where we have a pretty good sense for what’s working and what’s not, and how we can continue improving because we have data,” Watson says.

“There’s been an emphasis not just on making it easier for brokers or policyholders to transact with us, but also on how we think about risk, how we evaluate it and ultimately how we select it.”

New partners

According to Watson, Argo has met a number of partners over the past year, many of which are relatively new tech startups, and the company has made investments in a few through its Digital Ventures team.

As a result, Argo’s emphasis for the next year is continuing to find tech companies it can partner with to help it in all points of its operations, in multiple places on the value chain. According to Watson that’s one of the biggest differences between this time and a decade ago in the dotcom/e-commerce era.

Ten years ago the technology was much more focused on consumers, whereas today the technology initiatives—of which there are hundreds, if not more than 1,000—are focused all over the value chain and on all parts of Argo’s business enterprise.

Consequently, for Argo the challenge isn’t wishing that technology would come its way after waiting a couple of decades for such an approach; instead it’s being able to narrow the number of opportunities in the funnel to those that can help Argo the most.

“For decades we as an industry have gone to consumers and said ‘here’s a product, would you like to buy it?’, and then our clients said ‘no, but if you could do X that would be really great’,” Watson points out.

“We’d reply that we’d get back to them, and then either offer up the same thing and call it something different, or offer them Y instead of X, whereupon they thanked us but said that they’d actually asked for X.

“We’d then go away and come back with X—and the merry-go-round would continue. The irony now is that we have all these tech companies doing the same thing.

“The other challenge is that tech companies are creating very interesting solutions for products, but we can’t use them all, so I’m not sure what our willingness to pay is. Our willingness to engage is for all these products coming out on the market, so it’s really challenging.”

Watson says that one of the pivots in the digital team’s remit over the last year has been to move some resources over to vetting all the tech opportunities coming Argo’s way—either judging their usefulness to the company as a client or whether Argo wants to consider investing in them.

Remaining nimble

Watson admits that the company has dedicated a lot of bandwidth to tech opportunities, but perhaps not as much as it could have. That said, he underlines that Argo has been able to get a pretty good head start on most of its competitors, and that it will probably put more resources towards the topic in the next 12 months than in the previous year.

Watson stresses that Argo has made a point of being nimble at all times in its history, adding that it strives to be more responsive and faster-moving than its rivals. “Nimbleness is relative to a company of our size, relative to our competitors.

“We can project as big an image as many of our competitors, perhaps even the majority, but by being smaller we can be nimble—it’s a word I’ve been using for a long time. You can be large and efficient but being large and nimble is an illusion.”




More on this story

News
27 September 2018   Argo Group International Holdings has released its digital 2018 mid-year report, laying out the milestones the company has achieved in the first six months of 2018 for continued growth and profitability in both US and international operations.
News
11 April 2018   Argo Group International Holdings has released its digital 2017 Annual Report, which highlights Argo’s diverse product portfolio, strong investment results and growth in gross written premium.

More on this story

News
27 September 2018   Argo Group International Holdings has released its digital 2018 mid-year report, laying out the milestones the company has achieved in the first six months of 2018 for continued growth and profitability in both US and international operations.
News
11 April 2018   Argo Group International Holdings has released its digital 2017 Annual Report, which highlights Argo’s diverse product portfolio, strong investment results and growth in gross written premium.