Ariel Re can ‘tolerate some rate erosion’ in property cat book: Mather
‘It’s deal by deal, layer by layer and client by client,’ Ryan Mather says
Lloyd’s carrier’s chief executive says there is profitable business to be found despite the wider softening market conditions
ARIEL Re can “tolerate some rate erosion” in its natural catastrophe reinsurance book, the Lloyd’s carrier’s chief executive Ryan Mather, has said.
Speaking to Insurance Day at the Rendez-vous de September in Monte Carlo, Mather said there was profitable catastrophe business to be found despite the wider softening market conditions.
Last year Ariel Re announced the transformation of its syndicate 1910 into a property catastrophe-only syndicate and the launch of a diversified syndicate 2006.
“We love the [syndicate 1910] book of business we have. The returns on that book of business in particular are great, so we’re super happy. Can it tolerate some rate erosion? Sure,” Mather said.
“It’s deal by deal, layer by layer and client by client. We couldn’t say, ‘in this part [of the market] it’s amazing, and in that part it’s not amazing’. It’s just not like that at all.”
While the size of syndicate 1910 has gone down a little, Mather said the transition had allowed the reinsurer to increase its focus and to provide more clarity to investors over the risks they were taking.
In the specialty market, the picture was more complex than in property, said Mather, with some aviation coverage disputes following the war in Ukraine still ongoing, the large marine loss following the Baltimore Bridge allision and material losses originating from the war in Iran, including potential blocking and trapping losses that have not yet materialised.
Mather did not weigh in on what he thought this would do to the market, but he said Ariel Re would “assess the situation and play our cards accordingly”.
In its energy and transition book, Ariel Re was still limiting itself to writing technology performance insurance, a non-physical damage risk, meaning it has been insulated from a number of losses including hailstorm damage that has recently impacted the solar energy market. However, Mather said the reinsurer was considering expanding the book.
“The performance has been wonderful, but it’s quite niche. So, at some stage, we’re going to have to spread our wings and try and figure out what other opportunities there are out there,” he said.
“We have a tremendous amount of expertise. We have a big Lloyd’s consortium. I think it makes sense to at least investigate what the next steps are.”
