In this episode, your host, John Pelle, Director of Communications at Acrisure, is joined by Simon Hedley, Chief Executive Officer of Acrisure Re.
John and Simon catch up ahead of Monte Carlo Rendez-Vous, the largest gathering for insurance and reinsurance leaders. Simon chats trends affecting the world of reinsurance, the importance of DE&I and giving back, and factors in Acrisure Re's exceptional growth over the past few years.
Tune in for a rundown of reinsurance today as we look ahead to 2023.
Subscribe to the Limitless Possibilities podcast on Spotify, Apple Podcasts, and Simplecast.
Further Reading:
Acrisure.com
Acrisure on LinkedIn
AcrisureRe.com
Acrisure Re on LinkedIn
TRANSCRIPT BELOW:
John Pelle:
Welcome to the Limitless Possibilities podcast. I'm your host, John Pelle, and joining me is Simon Hedley, Chief Executive Officer of Acrisure's reinsurance division, Acrisure Re. Simon, welcome to the program.
Simon Hedley:
Thanks, John. I'm very pleased to be here.
John Pelle:
Yeah, this is a busy time of year for you and your team at Monte Carlo. So I'm excited to have a chance to catch up with you and learn a little bit about what you guys are all doing at the conference and just in general, how things have been going in Re this year.
Simon Hedley:
Yeah, I'm looking forward to being back at Monte Carlo and it's an opportunity to connect at the senior level with a lot of carriers, a lot of reinsurers. We've got a strong team from Acrisure in attendance this year, including Greg Williams and Grahame Millwater, Jason Howard, and then 10+ people from the reinsurance broking company, both London and the US. So a lot to talk about, a lot going on with Acrisure. We can update a lot of our key trading partners in person with what's going on with us, and, of course, we want to listen and learn and find ways to do more business with the carrier partners and our reinsurance partners. So a lot to do, John.
John Pelle:
What do you think is going to be the dominant conversation this year at Rendez-Vous?
Simon Hedley:
There's going to be a number of key themes. The casualty market has seen a lot of price correction and improvement over the last period of time. We see a discussion around where that's going over the next 12 months or so, and then the other, I think, big, broad topic will be property, particularly focused on peak CAT zones in the US and elsewhere, and making sure we understand the appetite of our reinsurance trading partners so we can best serve our reinsurance buying clients. So it is going to be all sorts of sub-plots under those headings, John, but I think they're going to be a couple of big key themes.
John Pelle:
We put out some content that's available on acrisure.com in partnership with Acrisure Re around cannabis, that emerging market. Your annual Hurricane Report is also available on acrisure.com. So from a trend perspective, what trends do you see as being the most timely for discussion as we get into this period of '22?
Simon Hedley:
I think, generally speaking, it would be the pricing environment, which is staying pretty robust. We don't see that changing through 2023. I think that's pretty good news for all our participants. M&A, there's been a certain amount of M&A within the reinsurance broking community. So I think we'll touch on that and M&A generally, as Acrisure leads the charge again in 2022, just certainly in the number of transactions. I think everyone's just interested to hear our story around our view on M&A and how we see that panning out in 2023 as well.
John Pelle:
So I think most people listening would have a firm enough grasp on insurance, even if you're not an expert. We all, generally, have or need insurance. When I was learning about reinsurance, it was an interesting thought because eventually, where does the rabbit hole take you? There's reinsurance, re-reinsurance. This could go on forever. So how would you explain reinsurance to someone who's not as familiar with the concept?
Simon Hedley:
Well, reinsurance, first of all, who are our clients? Our clients are the insurance companies themselves. So they do whatever they are going to do. They specialize in, whether it be product lines, geographies, and they have a certain size of a balance sheet to execute their business plans. They accumulate risk, property risk, casualty risk, and it's efficient for that type of business to lay off risk into a wholesale market. So the reinsurers and the capital markets, in addition, all sit behind those insurance companies and it makes the whole insurance universe more efficient. If there was no reinsurance, a lot of these insurance companies would have to run absolutely huge balance sheets in their own right to support the risk that they were doing. As I said, the bottom line benefit of reinsurance, it just makes a more efficient market and a more affordable product at the end of the day.
John Pelle:
What are we doing from the broking standpoint that's innovating in your view? Obviously, there's a lot of reinsurance brokers out there, not as many that are doubling in growth since 2018. So you must be doing something right and different than other brokers.
Simon Hedley:
Well, it's a big world, the reinsurance broking universe, and there's relatively few players given the size of the segment. So for us, there's so much potential for growth and we've been making the most of that growth with the tremendous backing of our parent, Acrisure.
Simon Hedley:
What have we been doing differently? We've been investing heavily in property reinsurance broking, a great deal of challenge around property right now. I think we can bring expertise to that market segment and people are trying to figure out a lot of things right now, and there's been four or five years of frequency of catastrophic type losses every year. So I thought that opportunity to invest in that particular segment to help our clients was a good place to focus.
Simon Hedley:
We've recently brought on some expertise, not just on the broking side, but also on the technical side. Ming Li joined us fairly recently to head up CAT modeling, and it's just not the mechanics of the modeling side, it's the thought leadership and the vision of where this market is going. We want to bring that expertise to our clients and to our markets.
John Pelle:
That's great. One of the things that I want to make sure we touch on too, Simon, is obviously, your business is differentiated because of the people you mentioned, the technology, the connection back to Acrisure, but I feel like Re does a tremendous job in the social responsibility and the DE&I space. I'd be remiss if I didn't ask you to highlight a few of those incredible charitable initiatives that you have going on. I know your office is at the tip of the spear when it comes to Acrisure's efforts. So if there's anything coming up or previously that you'd love to shine a light on, I think this would be a great opportunity to do that.
Simon Hedley:
Thanks, John. I appreciate you acknowledging that. Yeah, we've put a lot of focus on DE&I activities and initiatives, and the way that we've done it is our regions and offices, and that is Canada, the London office, New York, and then we have Burlington representing the South and Bermuda. We have a presence in Bermuda. All picked a charity related to DE&I activities, and then they went about raising money for those charities. So I'm very proud of that, John, the initiatives that Acrisure is undertaking. We're doing it all again this year. We have our charities, we'll organize events, and we'll raise as much money as we can.
John Pelle:
What is it about your culture that specifically, obviously, the Beach Group, Acrisure Re, are you looking for folks who are more inclined to be charitable? What is it about your culture that you think allows you to have by each office these impactful programs happening each year?
Simon Hedley:
We collectively felt it was important for us as a business, important for us as people, to be involved in these initiatives. I think ultimately, we become a better business. We want to be attractive to all society. We want to bring the best talent in, and I think this helps us understand that objective. It helps us to do it. It makes us a better business, and a better business is good for us and good for everyone.
John Pelle:
How are you spending your time these days? What are you focused on for the rest of 2022?
Simon Hedley:
I'm focused on making all of our aspects of our business, giving them the support that they need, to do what they need to do to be successful. I'm still very much in touch with clients who I've had a close association with for many years, and that will always be the case. It keeps me very much at the coalface. In that sense, I'm enjoying working with the business leaders across the Acrisure Re Group. The other one I do want to mention is Ghassan Mansour. It is the most recent business that we're standing up within Acrisure Re Group and again, based in London, they're focused on international facultative business. So single-risk business. I do see a good chance that we'll expand that capability to North America, US clients over time, but certainly, right now, he's focused on international and the London market.
John Pelle:
Any other folks you want to mention on the team, what they're up to over the last few months?
Simon Hedley:
Well, I'd like to mention, a big part of the reason why we've been able to double in size, double our revenue over the last four years since joining Acrisure, is that we have diversified our business. So let me just touch on that. The first piece was to establish a London Wholesale broking business. That's headed up by John Sutton. It's been going two or three years now. It's a very meaningful part of our overall revenue now and that's programs and single-risk business that is handled into the London market, and a fair amount of the growth of Acrisure London Wholesale, which is part of Acrisure Re Group has come from the support and partnership of Acrisure retail partners.
Simon Hedley:
More recently, we added Ben Canagaretna to head up Acrisure capital advisory and solutions business. So this is an extension of what we do on the reinsurance broking side where we're effectively providing contingent capital in the form of reinsurance transactions to insurance companies. Now with Ben and his team, the addition there is that they are in the business of advising on capital itself in the form of debt or equity for insurance companies and service businesses. Also, within Ben's division is legacy. So that's dealing with past portfolios of risk and he has a great team of brokers and technicians who are experts in terms of lost portfolio transfers, adverse development covers, which deal with risks and liabilities that are already on an insurance company's books. That's becoming part of the overall capital efficiency, the capital solution world. It's not just about reinsurance in terms of contingent capital or forms of debt and capital themselves, but also looking back at the liabilities, which require capital to support them, and can we do something more efficient with that to make the business going forward, a better business?
John Pelle:
So from a retail insurance perspective, obviously, where are you seeing the most interplay, where are you seeing the most collaboration happening? You mentioned a lot of it happening through John Sutton.
Simon Hedley:
Yeah, that's the obvious place for it to start because what comes out of Acrisure retail, the Acrisure retail platform are typically single risks. John and his team, they're creative. They have great market relations and bringing solutions to those types of opportunities.
John Pelle:
Simon, any words you'd like to share with any of the Re colleagues listening today?
Simon Hedley:
Thanks, John, yeah. What I'm going to do, is tie that back to the Limitless Possibilities, which is very much at the heart of Acrisure. I think it's very much at the heart of Acrisure Re as part of that. I think we've got a phenomenal opportunity right in front of us. We're executing on that opportunity. I'm very excited to be a part of Acrisure Group. I think we're a great fit. It's been four years. It's been a phenomenal success to date. I only see that continuing. Let's try and double again in the next three or four years. There's nothing stopping us doing that. It's been a wonderful journey so far, and I'm looking forward to, as I said, another few years of extreme growth.
John Pelle:
Thank you, and thanks to the team for what you guys are doing to drive us forward. Thanks, Simon.
Simon Hedley:
Thank you, John. Thanks for having me.
John Pelle:
And to folks listening, how could you be limitless today?
John and Simon catch up ahead of Monte Carlo Rendez-Vous, the largest gathering for insurance and reinsurance leaders. Simon chats trends affecting the world of reinsurance, the importance of DE&I and giving back, and factors in Acrisure Re's exceptional growth over the past few years.
Tune in for a rundown of reinsurance today as we look ahead to 2023.
Subscribe to the Limitless Possibilities podcast on Spotify, Apple Podcasts, and Simplecast.
Further Reading:
Acrisure.com
Acrisure on LinkedIn
AcrisureRe.com
Acrisure Re on LinkedIn
TRANSCRIPT BELOW:
John Pelle:
Welcome to the Limitless Possibilities podcast. I'm your host, John Pelle, and joining me is Simon Hedley, Chief Executive Officer of Acrisure's reinsurance division, Acrisure Re. Simon, welcome to the program.
Simon Hedley:
Thanks, John. I'm very pleased to be here.
John Pelle:
Yeah, this is a busy time of year for you and your team at Monte Carlo. So I'm excited to have a chance to catch up with you and learn a little bit about what you guys are all doing at the conference and just in general, how things have been going in Re this year.
Simon Hedley:
Yeah, I'm looking forward to being back at Monte Carlo and it's an opportunity to connect at the senior level with a lot of carriers, a lot of reinsurers. We've got a strong team from Acrisure in attendance this year, including Greg Williams and Grahame Millwater, Jason Howard, and then 10+ people from the reinsurance broking company, both London and the US. So a lot to talk about, a lot going on with Acrisure. We can update a lot of our key trading partners in person with what's going on with us, and, of course, we want to listen and learn and find ways to do more business with the carrier partners and our reinsurance partners. So a lot to do, John.
John Pelle:
What do you think is going to be the dominant conversation this year at Rendez-Vous?
Simon Hedley:
There's going to be a number of key themes. The casualty market has seen a lot of price correction and improvement over the last period of time. We see a discussion around where that's going over the next 12 months or so, and then the other, I think, big, broad topic will be property, particularly focused on peak CAT zones in the US and elsewhere, and making sure we understand the appetite of our reinsurance trading partners so we can best serve our reinsurance buying clients. So it is going to be all sorts of sub-plots under those headings, John, but I think they're going to be a couple of big key themes.
John Pelle:
We put out some content that's available on acrisure.com in partnership with Acrisure Re around cannabis, that emerging market. Your annual Hurricane Report is also available on acrisure.com. So from a trend perspective, what trends do you see as being the most timely for discussion as we get into this period of '22?
Simon Hedley:
I think, generally speaking, it would be the pricing environment, which is staying pretty robust. We don't see that changing through 2023. I think that's pretty good news for all our participants. M&A, there's been a certain amount of M&A within the reinsurance broking community. So I think we'll touch on that and M&A generally, as Acrisure leads the charge again in 2022, just certainly in the number of transactions. I think everyone's just interested to hear our story around our view on M&A and how we see that panning out in 2023 as well.
John Pelle:
So I think most people listening would have a firm enough grasp on insurance, even if you're not an expert. We all, generally, have or need insurance. When I was learning about reinsurance, it was an interesting thought because eventually, where does the rabbit hole take you? There's reinsurance, re-reinsurance. This could go on forever. So how would you explain reinsurance to someone who's not as familiar with the concept?
Simon Hedley:
Well, reinsurance, first of all, who are our clients? Our clients are the insurance companies themselves. So they do whatever they are going to do. They specialize in, whether it be product lines, geographies, and they have a certain size of a balance sheet to execute their business plans. They accumulate risk, property risk, casualty risk, and it's efficient for that type of business to lay off risk into a wholesale market. So the reinsurers and the capital markets, in addition, all sit behind those insurance companies and it makes the whole insurance universe more efficient. If there was no reinsurance, a lot of these insurance companies would have to run absolutely huge balance sheets in their own right to support the risk that they were doing. As I said, the bottom line benefit of reinsurance, it just makes a more efficient market and a more affordable product at the end of the day.
John Pelle:
What are we doing from the broking standpoint that's innovating in your view? Obviously, there's a lot of reinsurance brokers out there, not as many that are doubling in growth since 2018. So you must be doing something right and different than other brokers.
Simon Hedley:
Well, it's a big world, the reinsurance broking universe, and there's relatively few players given the size of the segment. So for us, there's so much potential for growth and we've been making the most of that growth with the tremendous backing of our parent, Acrisure.
Simon Hedley:
What have we been doing differently? We've been investing heavily in property reinsurance broking, a great deal of challenge around property right now. I think we can bring expertise to that market segment and people are trying to figure out a lot of things right now, and there's been four or five years of frequency of catastrophic type losses every year. So I thought that opportunity to invest in that particular segment to help our clients was a good place to focus.
Simon Hedley:
We've recently brought on some expertise, not just on the broking side, but also on the technical side. Ming Li joined us fairly recently to head up CAT modeling, and it's just not the mechanics of the modeling side, it's the thought leadership and the vision of where this market is going. We want to bring that expertise to our clients and to our markets.
John Pelle:
That's great. One of the things that I want to make sure we touch on too, Simon, is obviously, your business is differentiated because of the people you mentioned, the technology, the connection back to Acrisure, but I feel like Re does a tremendous job in the social responsibility and the DE&I space. I'd be remiss if I didn't ask you to highlight a few of those incredible charitable initiatives that you have going on. I know your office is at the tip of the spear when it comes to Acrisure's efforts. So if there's anything coming up or previously that you'd love to shine a light on, I think this would be a great opportunity to do that.
Simon Hedley:
Thanks, John. I appreciate you acknowledging that. Yeah, we've put a lot of focus on DE&I activities and initiatives, and the way that we've done it is our regions and offices, and that is Canada, the London office, New York, and then we have Burlington representing the South and Bermuda. We have a presence in Bermuda. All picked a charity related to DE&I activities, and then they went about raising money for those charities. So I'm very proud of that, John, the initiatives that Acrisure is undertaking. We're doing it all again this year. We have our charities, we'll organize events, and we'll raise as much money as we can.
John Pelle:
What is it about your culture that specifically, obviously, the Beach Group, Acrisure Re, are you looking for folks who are more inclined to be charitable? What is it about your culture that you think allows you to have by each office these impactful programs happening each year?
Simon Hedley:
We collectively felt it was important for us as a business, important for us as people, to be involved in these initiatives. I think ultimately, we become a better business. We want to be attractive to all society. We want to bring the best talent in, and I think this helps us understand that objective. It helps us to do it. It makes us a better business, and a better business is good for us and good for everyone.
John Pelle:
How are you spending your time these days? What are you focused on for the rest of 2022?
Simon Hedley:
I'm focused on making all of our aspects of our business, giving them the support that they need, to do what they need to do to be successful. I'm still very much in touch with clients who I've had a close association with for many years, and that will always be the case. It keeps me very much at the coalface. In that sense, I'm enjoying working with the business leaders across the Acrisure Re Group. The other one I do want to mention is Ghassan Mansour. It is the most recent business that we're standing up within Acrisure Re Group and again, based in London, they're focused on international facultative business. So single-risk business. I do see a good chance that we'll expand that capability to North America, US clients over time, but certainly, right now, he's focused on international and the London market.
John Pelle:
Any other folks you want to mention on the team, what they're up to over the last few months?
Simon Hedley:
Well, I'd like to mention, a big part of the reason why we've been able to double in size, double our revenue over the last four years since joining Acrisure, is that we have diversified our business. So let me just touch on that. The first piece was to establish a London Wholesale broking business. That's headed up by John Sutton. It's been going two or three years now. It's a very meaningful part of our overall revenue now and that's programs and single-risk business that is handled into the London market, and a fair amount of the growth of Acrisure London Wholesale, which is part of Acrisure Re Group has come from the support and partnership of Acrisure retail partners.
Simon Hedley:
More recently, we added Ben Canagaretna to head up Acrisure capital advisory and solutions business. So this is an extension of what we do on the reinsurance broking side where we're effectively providing contingent capital in the form of reinsurance transactions to insurance companies. Now with Ben and his team, the addition there is that they are in the business of advising on capital itself in the form of debt or equity for insurance companies and service businesses. Also, within Ben's division is legacy. So that's dealing with past portfolios of risk and he has a great team of brokers and technicians who are experts in terms of lost portfolio transfers, adverse development covers, which deal with risks and liabilities that are already on an insurance company's books. That's becoming part of the overall capital efficiency, the capital solution world. It's not just about reinsurance in terms of contingent capital or forms of debt and capital themselves, but also looking back at the liabilities, which require capital to support them, and can we do something more efficient with that to make the business going forward, a better business?
John Pelle:
So from a retail insurance perspective, obviously, where are you seeing the most interplay, where are you seeing the most collaboration happening? You mentioned a lot of it happening through John Sutton.
Simon Hedley:
Yeah, that's the obvious place for it to start because what comes out of Acrisure retail, the Acrisure retail platform are typically single risks. John and his team, they're creative. They have great market relations and bringing solutions to those types of opportunities.
John Pelle:
Simon, any words you'd like to share with any of the Re colleagues listening today?
Simon Hedley:
Thanks, John, yeah. What I'm going to do, is tie that back to the Limitless Possibilities, which is very much at the heart of Acrisure. I think it's very much at the heart of Acrisure Re as part of that. I think we've got a phenomenal opportunity right in front of us. We're executing on that opportunity. I'm very excited to be a part of Acrisure Group. I think we're a great fit. It's been four years. It's been a phenomenal success to date. I only see that continuing. Let's try and double again in the next three or four years. There's nothing stopping us doing that. It's been a wonderful journey so far, and I'm looking forward to, as I said, another few years of extreme growth.
John Pelle:
Thank you, and thanks to the team for what you guys are doing to drive us forward. Thanks, Simon.
Simon Hedley:
Thank you, John. Thanks for having me.
John Pelle:
And to folks listening, how could you be limitless today?