Canopius's debut at Baden-Baden
LLOYD'S COMPANY READY TO MAKE ACQUISITION BID
Lloyd's company Canopius is a newcomer to Baden-Baden, in name at least. But plenty of people are talking about the company because of strong rumours that the company is about to acquire another medium-sized reinsurer, according to one of their senior executives. “It is true that we are looking for opportunities both inside and outside the Lloyd's market,” says Paul Tester, Canopius director and treaty underwriter. “And it is also true that we are talking to potential strategic partners and that our investors are very supportive.” But Tester would not comment further on possible takeover targets.
Canopius was formed in November last year through a management buyout of what was originally Trenwick's London market operation.
It was renamed Canopius and backed by Engefield Capital. The company has £250m capacity and writes a broad book of treaty reinsurance.
“We've had fantastic support from the market and half the premium we have written this year is new business,” says Tester. He adds that Canopius is growing its share of US property and marine business as well as some speciality areas such as engineering.
The Lloyd's market's recent rating upgrade from AM Best has improved its prospects in the US, Tester says. “It has really helped us to develop our US property and marine business,” he told the Baden-Baden Reporter.
The Lloyd's company is also seeing the return of Trenwick's casualty business as old contacts are renewed.
In Europe, Tester says that Canopius, like other reinsurers, has benefited from the problems experienced by Converium. “The uncertainty around Converium means that they are losing business to companies like us, and especially long-tail business,” he says.
Tester says that he expects a fairly tough renewal season, especially in marine business, partly because of the losses suffered by reinsurers as a result of the recent hurricanes that hit the US. Marine underwriters have been hit by losses in their energy accounts because of the destruction wrought on offshore oil and gas platforms.
Canopius also writes a small book of marine retrocession business. “Capacity is returning slowly to the retro market, as Bermudian companies become more active,” Tester says. “We will write retro business if we can find the right clients.”
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