Details of the new venture emerged last month following Italian professional indemnity (PI) specialist AEC Wholesale’s announcement that it had agreed a binding authority deal with PartnerRe.
This partnership actually involves PartnerRe Wholesale, an entirely new division designed to tap into the international financial lines market for SMEs.
It is an entirely new direction for PartnerRe. The company already writes financial lines products for corporate firms, but PartnerRe Wholesale’s client base is markedly different from that of its parent.
As Marc van der Veer, the general manager of PartnerRe Wholesale, told Reactions, the new platform will not be writing this business itself, instead handing over the underwriting pen to managing general agents (MGAs) and delegated underwriting authorities.
For emerging markets, the company is partnering with insurance companies and in the more developed parts of the world it is dealing with MGAs.
“We work with distribution partners to get hold of the intangible world of the SME sector. To capture SMEs, you need to partner to access the retail brokers. So our audience is insurance companies, MGAs and wholesale brokers,” said van der Veer.
This area of the market has historically been a volatile one, and van der Veer is mindful a diversified approach in needed if it is to be successful in this sector.
“We are trying to develop a balance both in geography and in business segments, so our potential distribution partners can be anywhere, but the books of business will also be spread out with traditional PI and also emerging PI and D&O for professions that didn’t really exist 10 to 15 years ago like IT and welfare,” he explained.
The company hopes this business model will allow it to generate business from areas outside those of its normal operating environment. To that end, the company has set up two underwriting hubs – one in London and another in Amsterdam. A third smaller office in Paris complements these.
While the move into PI for SMEs may seem a major step away from PartnerRe’s usual business models, van der Veer said there are many similarities with the reinsurer’s approach to this new venture and its more traditional areas of operation.
“It’s accessing business we don’t usually see through our regular reinsurance distribution channel