Chartis Europe S.A. encompasses the property/casualty business of parent Chartis Inc. across continental Europe, and it sees significant opportunities to grow. Julio Portalatin, Paris-based president and CEO of Chartis Europe, recently spoke with Business Insurance Editor Regis Coccia about its plans in the European market.

Q: What are Chartis' activities in France, its home base?

In France, we have the legal entity of Chartis Europe, representative offices as well as a country operation. That operation continued to generate good client retentions, well into the 90s, through the third quarter of 2009 and continues to perform well. They have focused themselves on segmenting very closely with the type of business they want to attract and also expanding in the middle market. They are looking at a further expansion in the aviation practice as well as what we call the Private Client Group segment for high-net-worth individuals. Those are our next steps in our expansion in that marketplace.

The financial lines business has been a mainstay for us in France and other countries for the last several years. It has been a big generator of our growth and we want to continue to do that, but we want to diversify as well. You'll see us get a little more into the retail business and segments like aviation and Private Client Group.

Q: Does Chartis see commercial business flowing through the Private Client Group and vice versa?

In the U.S., you tend to find brokers that represent clients in a horizontal way. In Europe, we tend to find intermediaries that specialize in certain segments of business. In the case of Private Client Group in particular, we have found that specialization among the intermediary group.

While we of course look for opportunity to not only cross-sell to a client that we have a new relationship but to further cross-sell to clients we have current relationships with, we find that a lot of that is multiple-intermediary controlled as opposed to single-intermediary controlled. That said, we see that as an important opportunity for us to take these types of clients and intermediaries into these types of markets that we expand into.

We're pretty innovative in the way we approach our products and distribution. Many times, we're taking distribution with us as we move into new products or new segments, and many times they're taking us with them. It depends on the segment itself.

Q: Why do certain segments, such as aviation, tend to gravitate toward specific markets?

Every time we look to expand our business, we always do an extensive review of the way the business is conducted, both traditionally and where we think it's going in the future. And they're not always the same answer. Traditionally for Europe, it's been a U.K.-centric aviation market. We see it decentralizing in the years to come, so we've made a proactive play to take advantage of that decentralization. It's not necessarily happening as we speak, but we believe that it's going to happen and thus we want to be there when it does.

It's not as important to understand where things have been, but much more important to understand where things are going. That's why in many cases Chartis has positioned itself in markets that aren't quite yet there but where we think we're hopefully proactive enough to outperform others who haven't figured it out yet. So markets like China and India are very important to us.

When you look at the traditional base of some of the more traditional lines of coverages—you can go back to where we started in Shanghai in 1919, the marine business started exploding in that marketplace as trade picked up, and we happened to get there early and take advantage of that growth.

If you look at the export activity that takes place in Germany, it obviously is going to be conducive to the marine business. That export business is helped or at times challenged depending on exchange rates, economic conditions, etc. But Germany is a pretty big market. It has a large export community. You'll see a concentration of marine business there for many, many years to come. Then you look at where the future marine business might be going and some of the developments happening in Asia. You see China and Taiwan starting to open up. So there are some opportunistic plays for things that are developing. It's not always what's happened traditionally, but more importantly what's happening for the future.

Q: What strategies are helping Chartis in Europe cope with difficult market conditions?

It's important to be able to adjust but also to continue to invest. You can't just contract and look at expense savings. Those are important, for sure, but you also have to look at opportunities to take advantage as the economy continues to improve. The things that have kept us focused on what's important are underwriting discipline, expense discipline and continued investing in the business for long-term returns. We keep people very focused on the things that can make a difference operationally as well as strategically.

Q: What are some challenges in getting business done across the various cultures and markets in Europe?

We segment our markets. We try to understand the cultural differences and the maturity curves for the different markets. We develop strategies that are local but maximize the Europeanness of our operation and the international breadth of our operation.

We're very focused, especially in a market like this, on multinational and pan-European accounts where we have the opportunity to be able to maximize our network of being in all the countries of Europe as well as around the world as European companies expand. That is a linchpin that gives us the ability to establish a solid foundation in some of the countries so we can move on to indigenous strategies.

Another piece of this is we have local staffs as branches of the legal entity of Chartis Europe in all of these countries. We don't have sales offices, we have branches, and they're fully equipped and fully able to handle the market as if it were a local player. Some people say, “That's expensive.” At the end of the day, you invest, you get a return. It's an important strategy for us to be able to look at those markets and be as local as we need to be and as global when necessary.