Eric Malterre: ASR expansion will retain underwriting discipline

Expansion into new developing markets by Africa Specialty Risks (ASR) will not come at the cost of underwriting discipline, chief underwriting officer Eric Malterre tells GR.

The challenge to uphold underwriting discipline comes amid softening conditions as the re/insurance hybrid MGA-carrier seeks a broader geographic and product footprint to continue its growth story.

“More than ever, consistency in risk appetite, underwriting standards, and discipline in executing underwriting strategy are critical to our success,” says Malterre. 

Same model, new markets

He explains that ASR is pursuing growth selectively and adjusting its capacity deployment and line sizes where needed, such as in property and energy. Political violence and terrorism represent one pocket of hardened pricing where he referenced opportunities across its Global South footprint.

Africa and the Middle East remain central to ASR’s strategy and are intended to account for around 75% – 80% of its book, even as the business expands elsewhere.

Malterre says entering new developing markets has always been part of ASR’s plan. The insurer has indicated it intends to begin underwriting in Latin America and has started to establish a presence in India.

“Our mandate, our vision is to enable economic development by bringing expertise, knowledge, capacity and innovative solutions to those developing markets,” he says.

The model used in Africa is being applied to new territories, with local underwriting and distribution capabilities, and partnerships intended to support domestic insurance ecosystems.

In India like in Latin America, ASR sees opportunities in parametric and agriculture, political risks and trade credit, construction and green energy.

“The idea is not for us to just compete and cut price to gain market share on markets where others are already providing capacity. Our objective is to localise our underwriting expertise, to have boots on the ground to help develop the local ecosystem, and to add value not only to the local market but to the global market as well.”

New investor Vitruvian’s technology and global growth experience is expected to support investment in ASR’s digital 24/7 platform which has allowed expansion into SME business.

“It’s about delivering profitable growth,” Malterre says. “We are ambitious, but we remain focused when it comes to underwriting strategy.”

Part of that discipline is inherent in the hybrid model: ASR retains a meaningful share of the risks it writes alongside external capacity.

“We participate on every risk ourselves. We retain 25% on our own balance sheet on every risk, and the recent credit rating update of A- by Fitch comforts our growth strategy, underpinned by disciplined underwriting and responsible stewardship of capital.

“We’ve got skin in the game, and we’ve got it across the board.” 

Malterre sees room to build out product types, particularly in cyber, political risk and trade credit, while also exploring captive structures and alternative risk transfer for infrastructure and renewable energy projects.

“Our business strategy is to provide specialist solutions where there is a lack of them,” he says. “We are excited about cyber as well because there is a deep lack of solutions across Africa. We are looking to fill that gap.”

Volatility is not a bad word

As ASR diversifies geographically, Malterre underlined the importance of managing correlation, aggregation and exposures as increasingly important, particularly across its catastrophe and agricultural portfolios.

“Volatility is not a bad word. In fact, there is an upside in managing volatility, provided you’ve got the right tools, the right ambition, and provided you are extremely disciplined with your core principles from an underwriting standpoint,” he says.

“You need to be clear on what you are prepared to do, and more importantly you need to know what you are not prepared to do.”