Apollo’s Ibeson: Organic specialty expansion remains Plan A amid “flood of opportunities”

Expansive Lloyd’s insurer Apollo Syndicate Management has revealed growth in its existing specialty lines will remain “Plan A” as it takes advantage of the continued favourable pricing environment in the year ahead.

Speaking exclusively to The Insurer TV, David Ibeson, CEO at the ambitious Lloyd’s carrier, said the group was currently seeing “a flood of opportunities” to deploy capacity but was set to largely focus on organic growth in existing classes.

His comments follow a series of expansive moves at Apollo which have seen the combined stamp capacity on syndicates 1969 and 1971 rocket to £650mn ($866mn) for 2022.

At Syndicate 1969, Ibeson said the group will be underwriting only one new class of business – its previously announced move into casualty reinsurance – with the capacity increase absorbed through shares in the consortium business led by the syndicate and organic growth in existing speciality lines, both through growing market share and further rate increases.

“We have included an element of headline on the capacity so we can take advantage of new opportunities we see throughout the year,” he said.

Ibeson said the casualty reinsurance entry, which will be led by former Canopius head of casualty reinsurance Paul Sandi, would enable the syndicate to write in territories or on products that it would not see in its direct casualty account.

He said the syndicate had also reduced its absolute and relative cat risk appetite in response to continued high loss activity, both for large events and for more attritional losses.

“The D&F market is experiencing some of the highest rates we’ve seen in many years but the results are dampened by the cat frequency we are seeing in the market,” Ibeson said.

“There is a discussion in the market whether those cats are just volatility or whether they are actually attributable to climate change and I have seen a number of experienced market professionals sitting on both sides of the fence.

“From our perspective, it creates a challenging environment and in terms of delivering the returns, I think it’s difficult not to assume that the high frequency cat environment won’t remain at least for the short term.”

At Syndicate 1971, which is converting from a special purpose arrangement for the 2022 year of account, stamp capacity will leap to £200mn next year, an increase of 73.9 percent year on year.

The syndicate focuses on providing solutions for companies operating in the sharing economy.

“The growth rates of those clients has been stratospheric. Merely renewing what we have in the portfolio drives significant premium growth year on year,” he said.

He said Syndicate 1971 would be moving into one new class – operational accident – which had been developed for its existing clients.

“This is really a quite exciting move for the 1971 team, it’s a new business class from the sharing economy to Lloyd’s and we have developed a consortium to support client requirements.

“This product is aimed at supporting those people working in the sharing economy and therefore helping the individual businesses attract and retain their best quality workers.”

Although he said he was fascinated by the cyber market, Ibeson said this was not something Apollo was currently underwriting but could consider when the correct controls are in place.

“If you are being client-focused and innovative, and I think we pride ourselves on coming up with innovative solutions, it feels as if it should be a part of our product offering.

“But it’s about how you do it and understand it,  and at this point in time we are continuingly challenging ourselves in reviewing it.”

David Ibeson’s comments are part of a wider interview with The Insurer TV that took place immediately following the news the expansive Lloyd’s carrier had received the green light from Lloyd’s to establish and manage gig economy-focused Ibott Syndicate 1971 for the 2022 year of account.

The full interview covers a number of other areas including his other plans for the carrier in 2022, the future of the Lloyd’s underwriting floor and the role of the legacy market. Ibeson also goes into further depth on the opportunities and challenges presented by climate change and cyber.