Sompo Intl’s Sparro on NA expansion: “We’ve not even really scratched the surface”
Sompo International’s P&C, financial lines, and specialty segments will all continue to push into additional markets in the coming months, according to Chris Sparro, the company’s North America CEO for commercial P&C.
The company recently opened up shop in Toronto, Denver and Houston, and its global markets team is working to expand internationally.
“I think the next three to five years, you'll continue to see the same level of success that we've had over the past three to five years,” Sparro told The Insurer TV.
The CEO also outlined the dominant themes of this past year when it comes to market conditions around pricing, terms and conditions.
“Market correction within property was clearly the most dominant of all the themes,” said Sparro.
“That was followed by casualty and specialty remaining consistent and maintaining great adequacy, from our perspective, being an excess of loss cost trend.”
Overall, the CEO noted a strengthening within property, deterioration within financial lines, and consistency among casualty and specialty segments.The only negative note Sparro pointed out for the year, was centred around financial lines.
“Whether it be certain sectors to go around public D&O, where there was a lot of commentary and continued support, that rate will continue to deteriorate and as it has,” said Sparro.
“Carriers are trying to focus more on, not on what is the rate deterioration, but is rate adequate for the portfolio and particularly within each of the different segments of that portfolio, so that they can make a proper determination on how they want to manage that portfolio through the cycle.”
As we head into 2024, Sparro cited the major concern being how much more room there will be in rate adequacy, which will likely depend on the particular segment.
“There's an expectance that there will be rate moderation in 2024 and not this continued decline,” said Sparro.
Much will be determined around the 1.1 reinsurance renewal season, with a lot of conversations focused on financial lines, as opposed to last year’s focus on property.
“Financial lines will be centre stage once again in those discussions and hopefully will give us a better sense of how those rates will continue to trend in 2024,” said Sparro.
Sparro also noted the rise in secondary perils that crystallised during 2023, but he considers these an opportunity in a way, to help educate Sompo’s insureds on the best way to minimise and mitigate risks.
“Bad storms can happen at any point in time, right? So, from an underwriting perspective, we still want to maintain consistency around how we manage that portfolio, whether it's around how we limit our risk via attachment points, the amount of capital we want to provide on an individual basis, concentration within geographies,” said Sparro.
When considering the opportunities yet to come, Sparro focused on fundamentals, like a well-diversified book, including around limits, geographic concentration and client base.
“We try to take a very, very broad view of what our book looks like and measure it by concentration and keep an eye on the past, but be more concerned about what's coming in the future, so that we can try to best position ourselves,” said Sparro.
“And a lot of that, for us, has been around limit management, integrity of our contract, making sure that the terms and conditions are clear and concise, so that we can honour the four walls of our contracts to our customers, and have the best-in-class capabilities to support that from our claims team in particular.”
Watch this 14-minute video to learn more about:
- Sompo’s growth strategy in North America and beyond
- Why Sompo International’s NA CEO considers the D&O market ‘Irrational”
- The dominant market themes of 2023
- What’s ahead for 2024, and what Sparro is watching for during 1.1 renewals
- Sparro’s overall long term outlook, and the importance of fundamentals, like diversification