“I think it is going to continue to grow and, being conservative, I think we’re looking at $120bn [premium] plus for this year for the E&S market.
“There's a degree of gravity and momentum that's in play here as well, because you've got scale that's now compounding and growing,” he told Inside P&C on the sidelines of the WSIA conference in San Diego.
While premium growth is robust, there is not an overwhelming flow of new capital into the E&S space, Atkinsons said, which should mean supply and demand remain relatively in balance against the backdrop of overall growth.
“If you take a signal from recent reinsurance commentary, whilst the reinsurance brokers are saying it’s the best market in a generation, capital is not rushing in to fill that space,” he said.
It should also mean January 1 renewals will be more orderly, as this publication has written.
“There was a disproportionate discombobulation of the reinsurance market [at January 1 2023] and so I think people are hopeful for keeping things at even level [this renewal].”
Here to stay
While some lines, such as D&O, are seeing some pricing pressure after a couple of years of a hard market attracted new entrants, Aspen is looking to adjust its portfolio only incrementally.
“The last thing you want to be as a carrier is in and out of markets. We’ve re-engineered our portfolio suite of products and for the last two or three years we've had this stable suite of specialty insurance products. And we like the products we're in, we're confident in those products.”
More challenging areas also represent opportunity, however, and can be tested without overextending.
“You'll probably want to be a little bit more careful about limits,” Atkinson said of those more challenging areas. “So you're falling back to the traditional values of insurance and proper risk spreading and taking.”
Changes at Aspen
After some well documented tough times, the carrier has undertaken several steps over the last few years to turn around its underwriting strategy and improve its profitability as well as its reputation as an employer.
Aspen reported a 4.4-point improvement on its combined ratio, at 83.8%, for the first six months of the year, on a 10% drop in gross written premium (GWP).
“You need to have the right culture and I think we've spent a lot of time and effort getting that right, and it's a great joy to see what we've done. It's a much different and collaborative place,” said Atkinson.
The carrier’s multiple platforms meanwhile should mean it has a good solution for insureds and other partners.
“So you bring reinsurance portfolio capability and thinking with specialist insurance, product knowledge, and then an ability to bring in third-party capital, bring it all together again with that culture and making those parts all work together. It a powerful combination.”
Apollo-owned specialty carrier Aspen held a beauty parade last week as it lines up banks to advise on an IPO in the first half of 2024, this publication has revealed.
Sources said the roughly $2.7bn book value business is likely to target a valuation of 1.5x book or above – pointing to a valuation in excess of $4bn.
After a period of sustained underperformance, Bermudian (re)insurer Aspen was taken private by Apollo in 2019 in a $2.6bn deal, with Mark Cloutier parachuted in as CEO.
