Munich Re Specialty eyes non-property business to grow $1 billion-plus NA programs book

By Chris Munro

May 6 - (The Insurer) - Munich Re Specialty’s North American programs business continues to grow with the platform now generating over $1 billion of premium through the delegated underwriting channel, as it targets new partnerships including those in the non-property space.

The company’s North America programs business comprises three units: a U.S. traditional programs operation, a similar entity focused on Canada, and another targeting insurtech MGAs.

Talking to Program Manager, Kevin Johnson, president, insurance programs at Munich Re Specialty for North America, said the company now supports over 35 partnerships across those three platforms that collectively write north of $1 billion of premium.

That portfolio, Johnson said, is diverse both by product line and geography.

“Maintaining a very broad appetite within the MGA space is important for us,” he said. “We don't want to get overweight in any one kind of segment, line or class.”

Johnson said when it comes to programs business, Munich Re Specialty is “a little bit inherently a generalist underwriter”.

However, he said the carrier does regularly take a step back and reflect on its portfolio to see if it has any spots where its diversification could be improved.

Where Munich Re Specialty is particularly strong in the programs sector is property, Johnson said.

“If we think about where we have shaped the portfolio over the last five-plus years, and also capitalising on strong market conditions, we've seen our mix really lean towards property.”

Johnson said Munich Re Specialty’s property play in the North American programs space is broad, including ground-up full TIV-type business, property catastrophe, E&S, and shared and layered.

The executive said Munich Re Specialty continues to have “a good, balanced portfolio” of programs business.

But he said the company could make more of a play in certain other sectors outside of property to create greater balance within its book.

Johnson’s colleague Claudia Carnevale, head of U.S. programs Munich Re Specialty for North America, said one area where the company is “a little underweight” from a market share perspective is in smaller specialty lines of business.

“We see ways to grow in that area,” she said.

“Professional lines is a segment that would add to our diversification,” Carnevale added, with an emphasis on the small to middle market sector of that specialist market.

“That’s an area where we don’t have a lot of programs right now. But we can do anything casualty or property; we’re always looking to grow in those segments as well.”

Indeed, Carnevale said “there’s always a need in the property cat market for capacity and in habitational and builders’ risk, and there’s always a continuous flow of submissions in those areas as well”.

Given broader industry concerns about the impact of social inflation on driving loss costs and frequency, Johnson said there is a lot of “casualty leaning” business entering the MGA market currently.

“There are continued questions around the strength of reserves, and in the accuracy of loss cost trends and whether carriers have been meeting or exceeding them,” he said, noting that those concerns are creating opportunities for MGAs.

While Munich Re Specialty is generally open to taking on programs business in an array of product lines, Johnson said one segment where the carrier has limited appetite is for transportation risk.

“Transportation is a line that we’ve managed to a smaller portion of the portfolio,” said Johnson.

“That's a line that certainly the industry has struggled with, to say the least, over the last decade,” he added.

Munich Re Specialty does write some auto business, but generally only when it is a supporting line within a package program, with the carrier “really limiting our true “transportation” writings”, said Johnson.

Looking forward, Johnson said the company will remain focused on supporting MGA and program business that have “value-add expertise in a niche class”.

“Standard lines business with a standard lines approach; that’s not what we want to do on an MGA program basis,” he said.