21 October 2013

Supporting clients’ evolving needs

Where does Maiden Holdings focus its corporate development resources?

Historically the most common function of corporate development has been acquisitions and divestitures for the parent company. Indeed, we continue to look for opportunities to add resources and capabilities to complement our non-catastrophe, low volatility portfolio. Whether it is product or geographic expansion, the acquisition of financial and operational assets is always being considered.

Philosophically and operationally, Maiden’s client-centric structure is designed to focus all of the resources of our firm on each customer. Deep and long tenured client relationships provide a granular understanding of each client’s goals.

The wide-ranging nature of these goals requires that we pursue any number of transaction structures. This flexible view allows for the development of a broad range of strategic private equity investments, joint venture investments, white label service delivery, purchasing group arrangements, and bespoke alliances.

What does strategic private equity mean at Maiden Holdings?

The definition of strategic can take many forms. However, when Maiden Holdings discusses the concept of ‘strategic’ investments we remain anchored in our client-centric philosophy. There are a tremendous number of evolving developments in the insurance industry. We focus our attention on those capabilities that 1) assist clients in executing profitable growth strategies; 2) reduce operating expenses; and 3) mitigate the underwriting volatility of a client’s portfolio. By structuring access to emerging technologies, enhanced servicing capabilities, or improved underwriting tools in an efficient manner, Maiden remains focused on helping our customers succeed in today’s challenging environment.

How does Maiden approach the subject of value added?

At Maiden Holdings, the focus on long-term relationships has always been central to our corporate philosophy. The key to maintaining long-term relationships is rooted in a deep understanding of the challenges and aspirations of our clients. While some customer needs are unique, many are reflective of the industry’s allocation of limited resources in a rapidly expanding universe of emerging potential initiatives.

Additionally, there are some issues whose solutions are beyond the resources of a single company. This is where Maiden’s corporate development team can develop alternative value delivery mechanisms. Whether it is strategic joint ventures, bespoke service offerings or equity investment, Maiden has the insight, resources and unswerving focus to create optimal solutions.

How does Maiden Holdings support the M&A activities of its clients?

Maiden can provide support for clients as they consider a potential acquisition. While the market provides sporadic opportunities to participate in broadly marketed auction processes, there are alternatives.

While many companies see the possibilities of combining two companies, many CEOs feel that the auction process does not fit their corporate philosophy. Through a deep understanding of clients’ goals and a vested interest in seeing them succeed, Maiden’s business development team can support clients in reaching their objectives. Exclusive and discreet discussions can sometimes be the optimal way to investigate the many issues and opportunities that are created by the merger of two corporate cultures. Maiden is able to serve as a complementary resource that can support the efforts of investment banks, other trusted advisers and internal corporate development teams.

How is the impact of capital market innovations changing the insurance/ reinsurance business?

The theories of the impact of the capital markets are far-reaching and rapidly changing. Clearly, the availability of catastrophe capacity has been the most significant recent development. The traditional model of a cat event-driven ‘turn of the market’ is coming under increasing pressure. The ability of temporary capital to flow into the reinsurance business creates increased efficiency and challenges the historical model, which was dominated by permanent equity and a long-term focus.

As the capital markets continue to expand their participation in the business of bearing risk, reinsurers must constantly consider all the alternatives that will allow us to deliver the most efficient balance sheet support to our clients.

What is your current focus?

We will continue identifying and pursuing platforms, portfolios and people to grow and broaden the Maiden product offering. However, our focus remains on the objectives and challenges of our customers. The ever-growing list of emerging solutions must be constantly scrutinised, judged and efficiently delivered. Maiden’s commitment to this never-ending process is just one of the elements to the execution of our client-centric philosophy.

Colin Fitt is a senior vice president of corporate development at Maiden Holdings. He can be contacted at: cfitt@maidenre.com