The Lloyd’s market is the most suitable arena to create a commoditised risk product to open up the (re)insurance sector to outside investors, according to IGI COO Hatem Jabsheh.
The executive said that a standardised insurance product would make for a more fluid movement of capital between insurers, reinsurers, alternative capital providers and private wealth, and that Lloyd’s was best placed to develop such a product.
“I think the best people to do something like this would be Lloyd’s because they are such a respected institution,” he explained.
“It’s been there for hundreds of years, the capacity they have is second to none globally.”
Jabsheh made the comments in a fireside as part of the (Re)Connect digital conference hosted by this publication.
He said that Lloyd’s could create a platform “like the Chicago Mercantile Exchange [CME] of insurance”, using its access to global insurance data.
The CME is a leading global marketplace for commoditised derivatives products.
Jabsheh said that the lack of standardisation is causing an issue for the insurance market, including trapped capital.
Clients would be the ultimate beneficiaries of the more efficient flow of capital that could be achieved if the insurance industry agreed to share its data, he explained.
Jabsheh said that the onset of the Covid-19 pandemic had forced companies to adapt rapidly and raised questions about the pace of transformation in the past.
“We can move much quicker, we can be more nimble and we also don’t want to be caught off-guard in the future,” he said.
Jabsheh said that the reinsurance market was hardening, but there were still improvements to be made on rates. “It’s not a hard market or an extremely hard market.”
According to the executive, IGI is a “very opportunistic underwriter” and has identified pockets of the market in which pricing is attractive.
“We are writing more in our reinsurance side and we will look to continue to take advantage of the upward pricing and upward momentum in the market,” he said.
Jabsheh said IGI’s $400mn-odd reverse merger in March with Tiberius, which gave the carrier a Nasdaq listing, had secured the backing of “very intelligent long-term financial institutional investors” and strengthened IGI’s visibility and reputation in the market.