Ongoing uncertainty in the global and US economies may prompt insurers to seek more stable reinsurance relationships, according to Danish Iqbal, the newly appointed CEO of Somerset Reinsurance Ltd.
“It’s tough to gauge when it’s all unfolding as we speak,” said Iqbal, who assumed the CEO role last month. “There’s a lot of volatility around, so insurance companies may look for a strong reinsurance partner.”
The wider economic backdrop has been marked by fluctuations. On April 11, China raised tariffs on US imports to 125%, following earlier tariff increases implemented by US President Donald Trump.
The escalation in trade tensions between the world’s two largest economies has raised concerns about the potential for a global recession. According to the Trump administration, a 145% tariff was placed on all Chinese goods entering the United States.
Trump also issued a 90-day pause on a broader set of sanctions and trade duties that had been set to affect a wide range of countries. Markets initially dropped as the tariff plan was introduced, recovered partially, and then fell again amid continued developments with China.
Trade disputes and economic instability have extended into parts of the re/insurance sector. According to S&P, European re/insurers may face heightened financial pressure due to recent market volatility sparked by the tariff announcements.
Global equity and bond markets experienced a sharp decline following the announcements, with potential spillover effects on real estate, private equity, and private debt holdings – key asset classes for many insurers and reinsurers.
Iqbal’s appointment follows a corporate restructuring at Somerset Re’s parent company, Aquarian Insurance Holdings Inc. He previously worked at Somerset Re as head of pricing and valuation and most recently served as president of Neptune Reinsurance Ltd., a Bermuda-based reinsurer integrated into Somerset Re in December 2024.
At Neptune, he helped establish operational infrastructure and obtained regulatory approval from the Bermuda Monetary Authority.
Iqbal said that Somerset Re has benefited from its affiliation with Aquarian through access to capital, investment expertise, and sourcing capabilities. He noted that a steady capital base can support the company’s future expansion and alleviate growth pressures that may arise in unstable economic conditions.
He added that market volatility may also create consolidation opportunities. Somerset Re, he said, has no exposure to public equities and uses an asset-liability matching approach to manage interest rate risk.
“Being strong in terms of asset-liability match, I think we pass on those benefits to the insurers as well because it will certainly be important to them to have a strong reinsurance partner,” he said in a report from AM Best.
Iqbal also pointed to an increase in business interest from Japan following recent regulatory changes. He did not provide further details on specific deals. He said additional inquiries have come from other emerging markets.
The company’s current business mix is evenly split between life insurance and annuity reinsurance, with a smaller share in other risk categories.
As CEO, Iqbal said he plans to maintain Somerset Re’s focus on meeting client needs and supporting long-term profitability and balance sheet strength. He also emphasized the importance of supporting the workforce.
“As the company has grown, we have added a lot more employees,” he said. “I want to make sure that I focus on and take care of our employees. That is our greatest asset and if we take care of our employees they will take care of the customers and take care of the company.”
What are your thoughts on this story? Please feel free to share your comments below.
