Arch has been quietly active in the “convergence market” through which institutional investors seek to directly access pure-play reinsurance exposure rather than investing in the equity of publicly-traded reinsurers. Since introducing this third-party capital management initiative in 2006, Arch has managed approximately $1.2 billion for institutional counterparties, providing those investors with reinsurance portfolio economics, primarily in the property catastrophe reinsurance arena, that on a modeled-expected basis met pre-agreed risk/return and volatility parameters.
As a multi-line company, Arch writes many other lines of insurance and reinsurance and has also been an industry leader in total value creation. We are in constant discussions with potential capital providers, exploring alternative structures through which our underwriting expertise can provide additional value. We have the flexibility and expertise to create bespoke solutions that provide investors with a portfolio of reinsurance exposures consistent with their desired risk profile. This approach leverages the worldwide Arch platform, and investors benefit from the same rigorous underwriting and analysis that Arch employs for its own portfolio of risks.
Very few reinsurers can match Arch’s track record of demonstrated underwriting discipline and active portfolio management throughout the various reinsurance cycles experienced by the insurance industry. Even fewer can claim to have produced results similar to Arch’s historical property catastrophe results. Constructing consistently prudent property catastrophe portfolios in the face of this inherent volatility requires experienced underwriting judgment, combined with the discipline to reduce writings when warranted.