Programs an integral part of Munich Re Specialty buildout
Munich Re’s recent move to bring its global specialty operations under one brand has reinforced the company’s commitment to the sector, with the firm poised to make further investments in its programs offering as it targets greater returns and growth in the segment, Kevin Johnson, president of North America programs at Munich Re Specialty – North America, has told Program Manager.
The reinsurance giant signaled its plan to establish a North American primary platform with the formation of Munich Re Specialty Insurance back in 2019, with Mike Kerner initially leading that business.
Earlier this year, Munich Re further strengthened its commitment to the specialty market by bringing its global specialty operations together under the Munich Re Specialty brand, with the worldwide platform led by Kerner.
“Mike being on the global board of management at Munich Re certainly sends a clear message about the importance and the relevance of the specialty insurance segment for the group – an area that globally, we see as a segment that's going to produce outsized growth beyond what you would expect out of the standard markets,” said Johnson, president of North America programs at Munich Re Specialty – North America.
“For the group, it’s an area where investment remains high,” he added.
The North America programs business that Johnson leads will play a prominent role in Munich Re Specialty’s expansion.
“The pillars of our specialty insurance value proposition really resonate in the MGA market,” said Johnson.
“Things like expertise, stability and partnership are at the core of what any MGA is looking for in a strong carrier partner, and [they are integral to] how we're looking to go to market,” he said.
Munich Re’s AM Best A+ financial strength rating is very attractive to possible MGA partners, not only because it draws in clients, but also because it highlights the firm’s deep balance sheet and its ability to withstand potential stresses.
“Programs is a segment where markets tend to come and go as it can be an opportunity to grab top and bottom line premium pretty quickly,” said Johnson.
“Appetites tend to change fairly quickly in the programs space, but we’ve been in the market for over 25 years with a pretty steady appetite.
“Yes, we’ve made our adjustments over time as any underwriting operation would do, but we’ve been there, and we work really closely with our partners to develop these mutually successful relationships over time,” he added.
Munich Re Specialty currently supports 26 programs across 10 MGA partners in North America. It generates around $1bn of premium through the channel in the US, and another $400mn via its Canadian operation and insurtech MGA partnerships.
It currently supports programs writing a range of coverages, including property and casualty, with Johnson forecasting there will be growth in the specialty, professional and financial lines segments in the near term.
“We're looking for partners that look and act like insurance companies,” he said.
“The bar has been raised so much in the last five to 10 years in terms of what makes a top-notch MGA operation,” said Johnson.
“They need to have invested in capabilities to operate in a specialty market. Do they have an actuary on staff? Have they built systems and platforms? Do they have portfolio management tools? What are their distribution capabilities?” he said.
“Our core philosophy is around building wide and deep partnerships with the MGAs. We want two, three or more programs over time, so we can build a diverse portfolio together in terms of line, class, and geography,” Johnson added.
Learn more about Munich Re Specialty – North America’s Program solutions: https://www.munichre.com/specialty/north-america/en/solutions/programs.html