Bernard Goyder and Rachel Dalton
The People’s Insurance Company of China (PICC) is deploying capacity into the Latin America market through a start-up founded by a former Brit underwriter, The Insurance Insider can reveal.
Yesid Rodriguez, a former vice president at Brit, has launched a construction and property coverholder in the Miami market.
The move comes after Brit closed its Latin America and Caribbean-focused Miami office after five years of trading, shifting the business there to London and other locations.
Specialty Lines Underwriters (SLU) will write an array of construction reinsurance risks including construction all risks, erection all risks and construction liability cover, according to a post on social media. The business will also underwrite property fac risks.
Rodriguez told The Insurance Insider: “We have capacity from PICC China, it’s their first time underwriting directly from the region.”
SLU has $25mn of capacity that can be deployed for 48-month periods, plus an additional 24 months of post-completion maintenance. Unlike most specialty insurance lines, which renew annually, a construction-all-risks policy lasts for the entire length of a project’s duration.
“It really is new capacity – traditionally Miami MGAs have been backed by European reinsurers,” Rodriguez said.
The MGA began writing business on 1 December and is based on Brickell Avenue in Miami, the beachside city’s answer to Lime Street in London for its concentration of specialty (re)insurance underwriters and brokers.
SLU’s arrival in Miami comes amid a squeeze on engineering capacity in the region. As well as Brit’s recent exit, Lloyd’s carriers including Talbot and Beazley put their global construction books into run-off last year.
The Latin American construction market has endured nearly a decade of soft conditions but is now hardening. The world’s worst construction loss in history at over $1.5bn, the Ituango Dam, was written jointly in Miami and London.
“Ituango definitely changed the market,” Rodriguez said. “My feeling is the market is at a very interesting point.”
Power generation risks are now seeing rates up around 100 percent in many cases, he noted.
Rodriguez began his insurance career at RSA in Colombia, before moving to Marsh. He later worked on the construction team at TransRe, before becoming a senior engineering underwriter at PartnerRe, according to details on his LinkedIn profile. He joined Brit in May 2016 as vice president of engineering fac Latin American and Caribbean.
In October, this publication revealed that the former divisional director of Brit’s Latin America and Caribbean operation, Juan Calvache, was setting up an MGA called Brickell Underwriting Agency.
Having launched on 1 November, the new platform focuses on property facultative reinsurance business emanating from Latin America and the Caribbean and in particular primary and lower layers in the property, energy and engineering segments.
China is a huge source of foreign direct investment into Latin America. Chinese-owned insurers active in the region include China Re-controlled Chaucer and Fosun-backed Positiva in Peru.
PICC is one of the world’s largest insurers and had 1.03tn yuan ($146.2bn) in total assets as of 2018. The carrier could not be reached for comment outside Chinese business hours at the time of publication.
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Withdrawals of capacity and a series of major losses have made the first of Latin America’s major renewal dates typified by significant pricing changes for facultative business.