Sunday, 20 August 2017

The next steps for Probitas

Chief executive Ash Bathia on emerging markets and relationships

Former QBE chief underwriting officer Ash Bathia returned to the market in October as chief executive of Probitas Syndicate 1492, which has emerging economies in its sights.

Here, Bathia opens up about his ambitions for the new venture, which will write a portfolio of property/casualty direct insurance and facultative reinsurance.

 

WHAT ARE SOME OF YOUR AMBITIONS FOR PROBITAS?

This business is about building a long-term legacy in the Lloyd’s franchise. Our aspiration is to build a quality business which is diverse, in terms of people, geography and the types of business we write.

Local markets are becoming more sophisticated, there are global reinsurers playing in local markets and local insurance companies are keeping much more of the business via co-insurance and buying more reinsurance etcetera. That is strangling, to a certain degree, the quality and quantity of business coming into the London market. So I think what we really want to try and do is find a way to get much closer to our client base and the origination of business.

There are a couple of ways we can do that. One is people, and I come back to my point about diversity. I just don’t think we fully recognise the quality of people sitting outside the London market in many other jurisdictions of this world.

But the second corollary to that is about knowledge transfer. We want underwriters in London to spend time in markets that we operate in. Not just a quick trip, a game of golf and a few client meetings, but to spend quality time out there and really get to know the culture and the people in the local markets. Then to get the local talent pool sitting outside London to come and spend more time in London. Suddenly you create a much richer vein of people available to you, and rather than having to push all the time in terms of business you create a pull force.

 

WHICH EMERGING MARKETS WILL PROBITAS FOCUS ON IN THESE EARLY STAGES?

We want to be seen as the champions, within Lloyd’s, of the emerging markets. There are many syndicates that write business out of these markets, but there is no one syndicate which is a champion of these markets. That’s where we want to be, so that’s number one.

For us, Latin America is a key priority. It is still a growing market in terms of GDP. We might say ‘these countries are going through a bad patch, they’re only growing by 5%’. Well wouldn’t it be fantastic to grow by 5%? And that’s just GDP, and insurance grows at a faster rate.

I think the other thing is we have Istmo, who are highly regarded and have relationships in those local markets. This is an opportunity for us and Lloyd’s to access business from the back of those relationships that would otherwise probably never have come to London.

The third part of this is the team we’re building, the understanding and experience of our people.

As we build out business beyond that, it’s central and eastern Europe. You can write direct business in those markets and they are growing. It would be driven more by distribution, through the brokers and using technology, because a lot of focus is on middle market business. The big business comes into London occasionally, but the middle market business never sees the light of day.

The other area we really do like is the Middle East and north Africa, and Africa particularly. Suddenly Africa is becoming quite sexy. There are considerations there, it’s not a mature market, we get all that, but it’s an emerging opportunity and it’s new to London.

Then looking at the Middle East. Yes, it’s a saturated market, but we genuinely feel that what we want to do there is align ourselves with a partner, that we have already identified, who will be an investor as much as a distribution opportunity.

The other area we really like is the emerging Asia market. There are a whole raft of countries like Vietnam, the Philippines, Thailand and Indonesia, who are all growing economies. Again, we have identified a company we have aligned ourselves with, who is an investor as much as a distribution partner.

Our whole play is about partnerships. Not with everybody, because we don’t want to build a business of 5,000 people and an expense ratio of 20%, we want to be a lean, mean machine, but with a wide reach. We want to cast our shadow well beyond our size.

 

HOW DO YOU WANT TO BE KNOWN AS A BUSINESS?

Our vision is to be universally recognised as a high-profile, culturally diverse global specialist business and a standard bearer for Lloyd’s emerging market strategy.

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