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Q&A: Kathleen Reardon, Hamilton Re Ltd.

Q&A: Kathleen Reardon, Hamilton Re Ltd.

Kathleen Reardon is CEO of Hamilton Re Ltd., the Bermuda-based reinsurance arm of Hamilton Insurance Group Ltd. She is a member of the company's founding management team and has more than 20 years of reinsurance experience, serving from 2005 to 2012 as chief underwriting officer and senior vice president for Ace Tempest Re Ltd.'s Bermuda international property catastrophe reinsurance business. Ms. Reardon is also a 2014 Business Insurance Women to Watch honoree. She recently spoke with Business Insurance Associate Editor Matthew Lerner. Edited excerpts follow.

Q: How does Hamilton Re approach the market?

A: Right from the start, we had a diversified strategy. We weren't solely relying on one line of business such as the property catastrophe line of business. Strategies in the past worked a very long time with having that monoline catastrophe focus. It was a high-margin business. It performed very well. But that's not the market we're in right now. We knew that we set up the company in a soft market. We knew that we had to have a diversified approach to build a sustainable, profitable, growing company. And that's exactly what we've done.

You'll see that Hamilton Re premium is split almost perfectly a third property, a third casualty and a third specialty, and within the specialty we are offering multiple classes of business.

Our approach was to have expertise in these lines of business before we marketed them, so over the last two years we've hired two underwriters on the specialty casualty team. They've come from Lloyd's syndicates and bring expertise in personal accident, satellite, aviation (and) terrorism. So we didn't want to do this without the expertise.

This year, since they've been here, they've really further diversified and developed that specialty book of business.

Q: Do you see growth coming organically, by acquisition or both?

A: Our strategy — each of Hamilton's operating company's strategy — is an organic one, and we're dedicated to meeting that strategy. We have a five-year plan. We've been pretty public saying on various occasions that if we were presented with an acquisition that brought us to these strategies more quickly or if it gave us some talent or technology or regional spread or new lines of business or different policy offerings, we would definitely be interested.

Q: Much has been said of the alternative capital flowing into the reinsurance sector. What are your views?

A: Well, first, I think it's here to stay. We actually welcome it. I view it as a positive, to the extent we need to buy retrocessional cover. We're embracing the alternative capital markets. It fosters innovation because it makes you say, “I have to keep up with the other guys and come up with some new ways of offering products and providing products to my clients that they actually want to buy and find useful.”

There's lots of capital out there, but you need to have relevant capital. You need to match the capital with the right risk. And that's a challenging job. So if you don't have the right capital on your rated traditional company, then it makes sense to partner with capital that has a different appetite than you do.

I would argue this is nothing new. Even reinsurance is a form of third-party capital. We're all offering capital. So I don't mind sitting side by side with alternative capital. There's plenty of room for everybody.

Q: Where do you see challenges?

A: The industry is being disrupted by technology, and a large percentage of the workforce is retiring in the next five years. We need to get the word out that this is an industry that is willing to change and that we're willing to be disruptive. We know we need to innovate and get that word out and hopefully attract the next generation.

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