The excess financial lines market in the Benelux region is competitive, and while economic conditions are fueling a flight to quality in terms of underwriting, balance must be found when it comes to securing quality capacity at the the right price, says Mark Haverkate, Branch Manager for Benelux.
Over the past few years the global economy has been rocked by several large-scale events; the pandemic, climate change, the turn of the hard market, and most recently, war on European soil. All of these have had – and continue to have – an impact on the economy.
Throughout the pandemic, governments stepped in, boosting businesses with cash injections, and premiums were kept stable to ensure businesses could survive; however, such support is now being scaled back, resulting in an increase in bankruptcies for SME businesses. Coupled with the financial implications of sanctions, competition for talent, plus rising inflation and interest rates propelled by the hard market, insurers’ risk appetite is contracting.
At the same time, the competitive tension between the Lloyd’s market and the European companies market continues to play out, with fresh high quality capacity being much in demand. Alta Signa benefits from having both a panel of capacity providers, plus local knowledge and expertise, allowing us to be engaged in specific exposures.
This is crucial for the Benelux, where Financial Institutions are a large part of the economy. Benefiting from high interest rates, we have seen firsthand how market conditions have been stable, but we also know that over the past few years FI has faced high premium increases, so setting premiums at the current market rate is vital.
This local expertise allows us to calculate and move with the markets, setting the pace for brokers to follow, and as we move into the coming months we expect commercial D&O to soften, and wider pricing dynamics point to FI and commercial PI pricing stabilisation as well.
The DNA of an MGA
As an excess player, it is a balancing act of limiting exposures, which is why we employ people with experience – ones who know the clients, know the people, and are able to act quickly. Being a startup means we are naturally entrepreneurial and ambitious, always looking for that next opportunity, and so we pride ourselves on having a frontline customer service, one where we offer a quality, expert response within 48 hours.
The second half of 2022 will start to lay bare weakened financial institutions and other corporate entities and we anticipate further insolvencies in the coming months, but by no means a tidal wave - it will be a natural progression for some businesses that were artificially propped up with liquidity from governments during the pandemic.
While insurers are taking a cautious approach in terms of risk appetite in Benelux financial lines and beyond, it is critical for our team to truly understand their underwriting terms and find the right matches with our broking partners and the risks they bring to the table. For us it’s about the continuous feedback loop of talking to the market, and adapting with the changing nature of demand and matching that with the supply that is available.
As an MGA, this approach of being open, direct and transparent means we can provide a high level of service to brokers. This is paramount to our offering, and is what gives us weight for future business development. We are uniquely positioned to support the market in navigating these choppy waters, and emerging stronger as we head into 2023.
BOX STORY - Financial Lines Societeit Nederland
In 2016, Pim van der Drift (TMHCC) and Mark Haverkate founded the Financial Lines Societeit Nederland, a platform for those in Financial Lines to meet. It remains the unique market platform in the Dutch Financial Lines arena and to date has 160 members, made up of brokers, underwriters and claims handlers.
The society holds two meetings a year, the first a general sponsored social event, followed later in the year by a knowledge meeting. On the 28th of June and after two and a half years of “lockdown” a large social event took place at the Golfclub, Kralingen. So good to catch-up again!
For more details and information on how to become a member, please contact Mark Haverkate via Financial Lines Sociëteit Nederland at LinkedIn.