Ascot’s Kramer: Casualty clients increasingly seeking risk sharing rather than risk transfer

By Michael Loney

June 11 - (The Insurer) - Ascot is confident of growing its alternative risk solutions business as casualty clients increasingly look to captives to share more in the risk, the carrier's U.S. CEO Matt Kramer told The Insurer.

In an interview at last month’s RIMS Riskworld event in Chicago, Kramer told The Insurer he is excited about the opportunities the U.S. presents for the carrier.

“We've got over 600 employees here in the United States so, we're operating at scale,” he said. “We've got a tremendous amount of firepower from our product mix that we're improving on a daily basis.

“We feel really good about the marketplace as it is, and that diversified portfolio gives us a lot of opportunity to lean in and lean out where appropriate.”

The largest part of Ascot’s U.S. portfolio is casualty, a market that Kramer believes is showing good discipline.

The executive said that Ascot is having more conversations with casualty clients about risk sharing rather than pure risk transfer.

Ascot in December hired Mark Benz from Axa as head of alternative risk solutions to build and lead a portfolio focused on captive solutions and fronting opportunities.

“That is something we're really excited about,” said Kramer. “We talk a lot internally about building out our capabilities to be creative, to be nimble and to be responsive to client needs. We're seeing definite interest in the marketplace for more risk sharing rather than risk transfer.”

Kramer said Ascot is able to work with clients on risk management and loss control using these solutions. He noted this is not a U.S.-only offering and that Ascot can bring capital to bear for brokers and clients from across its three geographies: the U.S., Bermuda and London.

“It provides options for those clients that are thinking about more risk sharing than risk transfer to have partnerships with their carriers,” he said.

Clients are looking for these types of solutions particularly for general liability, workers’ compensation and commercial auto.

“Typically, they have a higher deductible or they are more sharing in the risk. They'll work with their captive managers to create a structure where they're putting their own capital to work, instead of just relying upon the marketplace to respond,” Kramer said.

In addition, one of Ascot's newer initiatives is in the primary casualty space.

Ascot added Christopher McKeon from Everest in April to lead the new U.S. middle-market loss-sensitive casualty segment. Kramer said Ascot will be hiring more talent in this area.

The company also rebranded its management liability business as AscotEXEC in February. Ascot is preparing to launch new products for crime, primary employment practices liability and primary fiduciary for financial institutions.

BellTower Partners closed a minority investment in Ascot in a private financing in November, which was upsized following what it described as strong demand from investors. Canada Pension Plan Investment board continues to maintain the significant majority ownership position.

When asked what the minority investment will bring for Ascot, Kramer said: “We obviously have tremendous capital that's supporting us. It provides opportunity for us to continue to grow, not only in the U.S., but across all three geographies.”