Insurance results season is pretty much over, and there has been a common theme among those declaring their full-year 2017 results – doom and gloom. Whether they were stung by natural catastrophes, or hit by the Ogden rate, insurers have, in most cases, been hit badly over the period – with just a handful of exceptions.
One of those exceptions is AEGIS London. While it certainly wasn’t immune to the negative industry events of 2017, it appears to have survived the worst – managing to deliver a 23% rise in GWP to £462 million and reporting a combined ratio of 99% for Syndicate 1225, placing it 15% ahead of the Lloyd’s market overall.
So how was it done? Insurance Business reached out to Alex Powell, the firm’s active underwriter, to find out.
“Pivotal to the success… has been the prudent and pro-active cycle management of the underwriting; actively reducing classes of business that have had technical margins eroded in recent years, while at the same time growing lines of business that we would recognise as offering a better return,” he explained. “This has been executed within the confines of a relatively modest risk appetite, which has ensured that we do not have overweight shares of substantial market events.”
When announcing its results, the firm made no secret of the fact that it was ahead of the Lloyd’s market overall – pointing out that it had been so for nine of the last 10 years. David Croom-Johnson, AEGIS London managing director, went as far as to say that the Lloyd’s market had some “core issues” with a number of businesses.
“The dilemma around rising acquisition costs persists,” Powell said, expanding on Croom-Johnson’s thoughts. “The headline figures show that Lloyd’s as a market really needs to address this. While underwriting performance has been chiefly affected by a compound softening of rates, the added challenge of rising acquisition costs has put a lot of pressure on certain lines of business.
“At AEGIS London we have been pursuing a strategy of disciplined profitable growth; targeting lines of business where we believe we can achieve the required return, empowering underwriters to be very focussed on bottom line as opposed to top line and taking risk and catastrophe positions that are commensurate for our size.”
The company has its sights set on further success in the future too – with Powell outlining an expanded product offering through its Online Platform Aegis London (OPAL) mechanism that gives trading partners access to bespoke products through an online quote and bind system.
“To date we have two products being actively traded; a wind deductible buyback; and a stock thru put offering, with three additional products being rolled out during 2018,” said Powell.
“We want people to pick up the phone and talk to us about how they can help us build our business,” stated Croom-Johnson.
