Antares backs cedant quality as reinsurance rates soften

Antares is putting cedant quality and the breadth of its client relationships at the centre of its response to softening reinsurance conditions, its senior leadership says, as abundant capacity drives competition across multiple classes.

Mat Storr (pictured, top), Antares’ head of reinsurance, said the company was looking beyond loss experience and price to assess insurers’ claims management, operations, data quality and transparency.

He responded to discussion of current soft market competitive conditions.

“I don’t think that this is a race to the bottom, and I don’t think it is a return to indiscriminate soft market conditions,” Storr said.

Antares’ reinsurance portfolio is divided between property, marine, specialty and casualty, he explained.

The strongest cedants, including those with loss-free portfolios, would receive the most favourable terms, Storr said, but underwriting decisions would reflect a broader assessment of their businesses.

Martin Campbell (pictured next), chief underwriting officer and active underwriter, said pricing remained adequate across Antares’ reinsurance classes, although some were “approaching the point” at which that could change.

“We monitor pricing adequacy very closely, and I don’t think we have got into the negative yet,” Campbell said. “Some classes are getting close, but we haven’t reached that extent yet.”

Property has experienced aggressive rate reductions over the past two years, Storr acknowledged. However, this pricing adjustment should be seen in the context of the high base achieved by reinsurers in 2023.

“Price is one thing, but it was the structural change that really made the difference in that hard market,” he said.

Capacity oversupply extends beyond property, making individual deal assessment more useful than blanket decisions about entire classes, Storr added.

For Campbell, maintaining broad relationships gives Antares greater flexibility to support clients through the cycle.

Weakening pricing in one part of a relationship could be accommodated where the rest of the portfolio remained adequately priced.

That makes visibility across a cedant’s business particularly important, they suggested. Antares wants to assess and support as much of a client’s portfolio as possible, while remaining less inclined to continue standalone products that fail its pricing requirements.

The group’s growth ambitions are concentrated in its retail operations and Bermuda-based Antares Re platform. Campbell said the Lloyd’s syndicate, approximately 75% insurance, “is not expected to grow” in the prevailing market conditions, keeping the focus instead on discipline, particularly as it remains the group’s principal profit engine.

Storr also stressed that expansion goals would depend on underwriting returns, with diversification providing opportunities in areas where Antares currently has a smaller presence.

“That can’t happen. It’s not growth for growth’s sake. It’s not growth at all costs,” he said.

Selective entry into those sectors would remain measured and subject to pricing adequacy and underwriting discipline.

Alongside that portfolio strategy, Antares has separated its retail and commercial operations to give each a clearer focus and dedicated resources.

Campbell said shorter reporting lines were intended to “accelerate responses to customers and brokers”.

Storr added that “direct access to underwriters and decision-makers” is an important part of the proposition as Antares seeks to strengthen and reinforce its core relationships.