Arch International CEO bullish carrier can “outpace pedestrian growth” amid dislocation opportunities

Arch Insurance International CEO Hugh Sturgess is confident in the group’s ability to “outpace pedestrian growth” as he looks at opportunities presented by market dislocation including contingency, terrorism and casualty lines.

Speaking to The Insurer TV’s Leading Voices programme, Sturgess, who took the helm of the carrier’s international division in January 2019, said he believes the business is well positioned to continue its growth trajectory following the transformation journey he has been leading.

“You can take any metric you want – it's an absolute and complete transformation,” he said. “When I arrived, we had about 190 employees and today we have over 900, which is the result of acquisitions and growth and different changes in our business.

“Our platforms – Bermuda, Australia, UK regional and London market – have all had their own version of some sort of market-changing growth, but also a change in mindset,” he said.

Looking at gross written premium performance, in 2022 the business unit wrote ~$2bn, up by an astonishing ~$1.5bn from $522mn in 2018.

Sturgess cites a number of factors for this success.

“We knew there was the basis, the talent, all the drive, and all the determination within this team to be able to do something different. But what really made the difference was a couple of acquisitions in 2019, that changed our disposition, both in the UK regional and London market,” he said.

One of the more notable acquisitions was Arch Capital’s purchase of Lloyd’s insurer Barbican Group Holdings from funds managed by US alternative asset management firm Carlson Capital in 2019.

The acquisition included Barbican Managing Agency Limited, Lloyd’s Syndicate 1955, Castel Underwriting Agencies Limited and other associated entities.

“We made the absolute most out of every opportunity and then some,” said Sturgess.

“We took every rate change and we brought it to the brokers' doorstep and said, ‘how can we help you better?’ And grew at multiples; to be specific more than three times what the market was giving us,” he explained.

Plans for Europe “imminent”

The CEO’s growth plans for the international insurance division are bullish, but Sturgess is also mindful of the headwinds facing the industry.

“We're keeping a close eye on reinsurance costs and a close eye on all the underlying dynamics,” he said.

“For the next three years, the fundamental for us is to try to not become complacent about what the market may give us, or what inflation might give us or whatever other conditions might have been pre-existing,” he said.

However, Sturgess said his team will continue to push on initiatives to support broker partnerships to continue bringing in opportunity “almost on a daily basis”.

With this plan in place, Sturgess said Arch Insurance International will be able to “outgrow the pace of pedestrian growth and grow into the dislocation”.

Specifically, the business unit’s appetite lies in “contingency, terrorism and casualty”.

“We're not looking to lead in all lines of business. It's really seven or eight core lines that are our biggest impact areas,” he added.

The group is also looking to expand geographically. With a current footprint in Australia, Bermuda and London, Sturgess views Europe as the next obvious step, confirming that Arch’s “plans for Europe are quite imminent”.

“There's a real ambition to say, could we be doing more in places like Europe? Could we be a bigger player in the London market? We've sort of answered most of those questions, but there's still some to come,” he said.

A key enabler for Arch Insurance International’s success, according to Sturgess, is that “there's really not a lot of constraints” regarding plans for growth at group level.

“We're dealing with a company that prides itself on looking for profitable opportunities. As long as we find the profitability in the markets that we're in, and we're testing on that constantly, then we'll get the opportunity to grow.

“So, the dynamic is about as positive as we could hope for,” he concluded.

Watch the full 14-minute interview with Hugh Sturgess for more insight on:

  • Arch Insurance International’s growth plans for 2023
  • Navigating market headwinds
  • Broker relationships