Program business can be “cash-positive” for ILS investors: AM RE CEO Barder

Program business, especially that focused on casualty lines of insurance and reinsurance, should prove increasingly attractive to insurance-linked securities (ILS) investors over time, as the cash-positive nature of the structure is beneficial for them, Shevawn Barder, CEO of AM RE Syndicate told us in a recent interview.

We spoke with Barder, the CEO of reinsurance managing general agent (MGA) AM RE Syndicate Inc., recently as part of our series of showcase sponsor video interviews for the April 22ndArtemis ILS NYC conference, held in New York City.

AM RE Syndicate is one of our Bronze sponsors for the upcoming and sold out ILS industry event and Barder explained her thoughts on the opportunity for insurance-linked securities (ILS) investors in program business.

“This business is written with a very low-limit, it is well spread and these contracts report on a short timescale, a monthly basis, which frees up balances paid for ILS investors to access. It’s a very effective cash-positive structure,” Barder explained.

Adding that, “These classes should attract more ILS capacity as their terms, conditions and pricing continue to be very favourable and with these lines ILS capacity will increasingly flow into portfolios that are well-positioned for long-term performance.”

Barder said that with rates still hardening in the program business classes that AM RE underwrites, she expects ILS investors may find this opportunity increasingly attractive in 2022 and beyond.

Also, there are specific reasons ILS investors are looking at differentiated sources of insurance-linked returns at this time, and Barder also highlighted the fact program business can be very diversifying for experienced ILS allocators.

“With nat cat loss posing an ongoing challenge and climate change to be factored in, we believe ILS investors will seek lower-limit exposures with less nat cat exposure and at AM RE we have developed a very specific model to write this type of business,” she explained.

Barder also said AM RE has a desire to find ILS capital partners, to support its continued growth as a reinsurance MGA and to help it capitalise on its expanding platform.

“For 2022 we’re seeking to bring in new strategic ILS partners, investors to replace lost capacity in certain lines of business and we’re also expecting to launch our E&S carrier, ASI, authorised out of Arizona,” Barder said.

The full video interview is embedded below and can also be viewed in full, along with previous Artemis Live video interviews here.