WTW’s Swift not ruling out reinsurance re-entry
As WTW’s block-out with reinsurance draws to an end, Alastair “Swifty” Swift says the firm would consider re-entering the space and accessing other capital market vehicles “if it creates better value for clients”.
Speaking on The Insurer TV’s Leading Voices programme, Swift – head of global lines of business within WTW’s corporate risk and broking division – said the firm is focused on every aspect of “specialisation business” in order to go as “broad, deep or narrow” as required for clients.
“If reinsurance was to figure in that in the future, it might do so if we thought it was something that was going to create value for our client base, and particularly if we think around the capital side of business,” Swift said.
“For us, the key for our client base is ensuring that we're capturing and developing as much capital as we possibly can, and the right sort of solutions,” he added.
“We hope we'll be able to do that through insurance and distribution, but it may be at some stage that we also have to think that there are other avenues from the point of view of reinsurance, and other capital market vehicles that we'd want to consider bringing to those clients,” he said.
His comments coincide with several significant talent moves in the reinsurance broking space.
Just this week, The Insurer revealed that Howden Tiger has once again raided its larger rival Guy Carpenter, hiring its European CEO Massimo Reina together with at least three members of his leadership team.
Before Arthur J Gallagher completed its acquisition of Willis Re in December 2021 for $3.25bn, WTW had been a top tier reinsurance intermediary.
Willis Re became part of Gallagher Re with the combined reinsurance businesses subsequently led by former Willis Re CEO James Kent.
However recently, there has been a reshuffling at the top at Gallagher Re, with Kent moving into a newly created role within the parent company as CEO of global insurance strategic relationships and the reinsurance unit now being headed up by former Gallagher Re CEO Tom Wakefield.
WTW’s reinsurance blackout clause is due to finish later this year.
Cyber “huge area of growth” in medium-term
Putting reinsurance aside, Swift is – first and foremost – focused around building out capabilities from a specialty perspective and is bullish on WTW’s growth plans in 2023, with cyber featuring as a prominent area.
He characterised the market as a “natural” and “vast” area of opportunity with the potential for the segment to grow and become a $25bn business by 2025.
Already this year, WTW launched a $50mn excess layer cyber facility called CyXS. Available to WTW clients that purchased excess layer cyber programs, Swift described the new facility as “going great guns”.
While Swift is cautious of the systemic risk attached to cyber that runs through the marketplace, he believes that’s beginning to “finding a level”.
He also isn’t deterred by Lloyd's new cyber exclusions which are due to be implemented on 31 March.
“As much as Lloyd’s may want to implement certain restrictions on the type of language and exclusions that are out there from a cyber perspective, you're also seeing a whole market that sits outside of Lloyd's which is very happy to pick up those risks, and insurers are looking to grow in that space as well,” Swift said.
“These things don't necessarily go in lockstep – where one market might decide that it needs to do something, another market might see that as an opportunity.”
Swift concluded: “It comes down to finding the sustainable balance from the point of view of coverage that is offered over a long period of time that insurers can take against their balance sheets, whilst clients still see the value in the product.”
The Insurer TV talks to WTW’s head of global lines of business CRB division, Alastair “Swifty” Swift
Watch the 15-minute interview with Swift to hear his thoughts on:
- How reinsurance dynamics are impacting the end client and relationships in the market
- The impact of Russia-Ukraine more than a year on in aviation and marine
- Whether the industry needs to be worried about business leaking out of the market as clients explore more self insured options
- WTW’s bullish growth plans for 2023, with a focus on cyber
- Whether a re-entry into reinsurance is on the cards