AM Re holds a unique place in the US, as one of the largest quota share reinsurers in the US market. We spoke to AM Re Syndicate CEO Shevawn Barder about how she sees the market and the syndicate’s plans for 2021.
AM Re holds a unique place in the US, as one of the largest quota share reinsurers in the US market. We spoke to AM Re Syndicate CEO Shevawn Barder about how she sees the market and the syndicate’s plans for 2021.
What plans does AM Re Syndicate have in 2021?
SB: “We have had an exciting 2020 at AM Re where we have restructured the group with a holding company, AM Star Hold Co, which owns and operates AM Re, the non-risk bearing entity, and ASI, the prospective E&S carrier. Looking to the future, AM Re will continue as an MGA in the specialty programme space with capacity of a minimum of $750m. In respect to ASI, we will have the ability to write excess and surplus lines across diverse classes with a capacity of $250m in year one. AM Star Hold Co will have a combined income of $1bn in 2021.”
What trends in the reinsurance market make you see now as a good time to launch a new carrier?
SB: “It’s a fantastic time to launch a new company. There is so much dislocation currently in the market due to the COVID-19 pandemic. Companies have not had the ability to reserve or anticipate these losses so there will be a sea of change to the market; particularly in the excess and surplus market line space.
Starting an E&S carrier is a natural extension of our existing model because we are currently writing this business through AM Re on a programme quota share reinsurance basis. The underwriting team at AM Re has a high level of technical underwriting capability. We are effectively writing this business as if we are primary writers. We have the primary expertise to understand and create profitable quota share portfolios. The great thing about quota share programme business is that the interests of all parties are aligned to create a profitable outcome.
What is the appeal for Asian securities to do business in the domestic US?
SB: “We love working with Asian securities. This is mainly because they have a long-term view when it comes to relationships. They are very relationship oriented. We started our association with Asia in 2017. We have consistently built on that. We bring great diversification to their domestic portfolios because our programme business is indigenous US business that is grassroots, low average value and well geographically spread. Our portfolios do not travel into the international market, so not competitively oriented. We have a very high renewal retention rate and a very low risk limit profile so it’s ideal for large Asian companies to diversify their portfolios and get a very economic foot-in-the-door in the US market. We have very low overhead costs and utilise an efficient model structure. Our track record speaks for itself having been in this space for 20 years. So, we have a tried and tested model that is consistently profitable”
How will the growth of AM Re in 2020 lead to the successful launch of the new carrier in 2021?
SB: “We have strategically looked at our position in the US market. As a result, we relocated from New York to Dallas to focus more clearly on the programme market. We have built out our team, we have expanded our management structure to include Mr Ernie Zayicek and Mr David Saylors and hired additional support on the analyst side. We have real depth and expertise within our company. We are always looking for new opportunities to grow and better ways to support our team.