Insurers maintain their position as insurtechs grow: ExecutivePosted On: Sep. 25, 2019 4:43 PM CST
LAS VEGAS — Established insurers will not cede their ground in the insurance industry even in the face of blistering competition and change from the insurtech sector, according to Richard R. Whitt III, co-CEO of Markel Corp., speaking Wednesday morning the InsureTech Connect technology conference in Las Vegas.
Together with fellow co-CEO Thomas S. Gayner, the two are the first nonfamily executive leadership team in the Glen Allen, Virginia-based specialty insurer’s 90-year history, now ranked No. 441 on the Fortune 500.
Mr. Whitt thinks insurers will compete well with insurtechs. “Don’t count us out,” he said. “We’ve been in this business a long time. We’ve got some skills. We’ve got capital.”
Technology does present challenges to established insurers, such as integrating with what Mr. Whitt called a “plethora” of legacy systems. “That’s a challenge for us.”
He said the specialty insurer continues to look for opportunity everywhere, even in seemingly troublesome situations like Brexit.
“Even things like Brexit, they provide opportunities. There’s the downside, and there’s the upside.”
A business unit set up in Germany to maintain business continuity with continental Europe, originally seen as a cost, has blossomed into a “great opportunity to grow in Europe and write new business. We’re seeing opportunities to write new business as a result of trying to de-risk Brexit.”
Markel also sees opportunity in insurance-linked securities, which Mr. Whitt explained as using “capital other than insurance company capital to support insurance and reinsurance risk.”
“We are all in on ILS because we just think it’s the future of our business,” Mr. Whitt said.
Markel acquired Nephila Holdings Ltd., which manages some $11 billion, Mr. Whitt said, in August 2018 to bolster its ILS position.
“The winners in our business are going to be the people that can most efficiently match risk to the right capital,” he added, noting the broader financial markets are much larger than the insurance industry and can serve as a source of capital to support the most outsized risks such as catastrophes.