Interview with Ernesto Medina Gomez, Head of Executive Assurance, Europe for Arch Insurance EU
This interview was originally published in Actualidad Aseguradora by INESE
How would you describe Arch’s current underwriting appetite in D&O for the European market?
Our underwriting appetite is broad, spanning nearly all corporate sectors and industries, as well as financial institutions, investment managers and fintech. We provide cover to SME, mid-market and large organisations, including those that are publicly listed and privately held. For financial institutions, in addition to D&O cover we provide professional indemnity and crime-related solutions.
We have considerable expertise across the European team which enables us to address complex and highly specialist risks, including those where the company’s exposure may span multiple geographies and markets. Our focus is often on those hard-to-place risks that demand detailed technical underwriting, where we can add value beyond a competitive price and capacity.
From a regional perspective, we have a particular focus on Iberia, and France/Benelux however we also have the expertise within our team to service clients in other parts of Europe, including CEE and Southern Europe.
It’s our experience and technical expertise, coupled with our claims capabilities and financial strength of the wider Arch Capital Group that also enables us to provide solutions to companies undergoing rapid change, such as IPOs – whether in Europe or in foreign exchanges including the US, – spin-offs, M&A transactions, restructurings, refinancings, as well as companies facing distressed conditions.
What are your organization’s strategic priorities in D&O insurance for the next 12-24 months?
Our primary focus over the next 12-24 months is to continue growing a balanced portfolio of business which is well diversified across our preferred market segments. To achieve this, we are fully committed to strengthening our collaboration with brokers and clients and ensuring that we continue to deliver high levels of service across our chosen sectors and geographies.
We will also target opportunities to strengthen our position in those highly specialist areas of the market where our teams excel. These include Investment Management Insurance (IMI), Side A DIC, fintech, special situation risks, complex placements, and multijurisdictional exposures. Key to this will be deploying our own market wordings for D&O and IMI/fintech, which we will be launching soon.
An additional element of our strategy will be looking to bolster our position on select broker panels and facilities. We have experience across Arch participating on panels and facilities particularly within the SME and mid-market segments and will be seeking to deploy that expertise across Continental Europe as well.
Finally, we will continue to look for opportunities to collaborate with other product lines within our European business, such as cyber and casualty, where we can offer compelling multi-line solutions that enhance our value to our brokers and clients.
In which segments or sectors do you see the greatest growth potential for D&O within Europe?
While Arch maintains a strong underwriting position in the more traditional areas of the D&O market, we see particular growth potential and have appetite for those highly complex, specialist risks. This might include companies with multinational exposures, including in the US, or industries which are undergoing rapid change, such as tech, infrastructure, biotech, pharma, energy, renewables, manufacturing, defence, and construction.
Arch has proven expertise writing complex risks in mature markets such as the US and Lloyd’s, and we’re keen to leverage that, combining it with our local European knowledge to deliver value to our clients.
We also see opportunities for growth in Side A DIC as the complex risk landscape is reinforcing the importance of enhanced protection of individual directors. We have appetite to offer bespoke, local language, solutions in this space tailored to mid-market clients and written in line with local laws and jurisdictional requirements.
What role does Spain specifically play within Arch’s European strategy?
Spain is currently Arch’s largest and most established European market for D&O, and we have gained strong traction across all the market segments and niche areas that I highlighted previously.
Overall, we’re really pleased with what we have achieved to date in terms of GWP, the diversification of our portfolio, the scale and strength of our broker and client relationships and the growth of our team and claims capabilities. We have established a robust platform and are excited about the road ahead.
In terms of what’s upcoming, we will be launching a range of D&O, FI and IMI products in Spanish soon. These are fully tailored to local market needs and designed to meet legal and jurisdictional requirements.
Our aim is not only to grow our partnerships with the larger brokers, but also to expand our proposition with medium-sized and regional brokers, both in Spain and Portugal. It is about ensuring that we bring the same service capabilities that we have historically provided to the larger brokers, to the more specialist distribution partners and those operating in smaller regional markets.
Spain and its regional markets are central to Arch’s strategy across Continental Europe. We will continue to pursue expansion opportunities and partnerships as we increase our market share and bolster our leadership presence and will continue to support brokers and clients in addressing critical risks and emerging exposures.
How would you describe the current stage of the D&O market cycle in Spain?
There is no doubt that the D&O market in Spain remains highly competitive, particularly in the context of standard risks where we see persistent pressure on T&Cs.
However, the market continues to mature at pace, and we’re seeing a greater focus on developing more sophisticated insurance solutions to meet the evolving risk requirements of clients in the region.
Arch is ready and able to respond accordingly in such a competitive and dynamic environment. Our technical underwriters have local authority and autonomy to deploy meaningful capacity with creativity. Our appetite for both innovative solutions and complex risks positions us well to meet current market demands.
What new products or coverages has Arch launched or is currently developing in D&O?
As mentioned, we will soon be launching a series of new wordings in both Spanish and French, fully tailored to domestic commercial D&O and financial institutions clients, as well as specialist IMI and fintech wordings for these two core markets.
We are also able to support the development of local Side A DIC propositions for middle market domestic clients that need a tailored product in local languages and written to reflect specific jurisdictional requirements.
What client needs are driving these product innovations?
There is clearly significant demand for ever more sophisticated solutions to address the complex risk requirements of those clients with multinational exposures, and in particular industries which are currently undergoing rapid growth and development.
There is also increased demand for specialist risk transfer products in response to rising investor expectations and the impact of increased regulatory requirements.
There is no doubt that we are seeing an ever more litigious culture emerge against a backdrop where senior executives are expected to manage increasingly complex organisations and take on an ever-expanding range of responsibilities towards multiple stakeholders.
How is Arch incorporating emerging risks (cybersecurity, ESG, AI) into its D&O policies?
Arch is committed to helping clients navigate an evolving risk environment by developing fully tailored coverage that addresses emerging exposures and their specific needs, collaborating across Arch’s global platform where required.
How does Arch differentiate itself from other insurers in an increasingly competitive D&O market?
We believe our technical capabilities, service standards and solution focused approach are real differentiators for us. We’re able to combine the agility of our local European operations with the scale and financial strength of the wider Arch Capital Group. This allows us to develop robust and enduring partnerships with our brokers and clients.
Given pricing pressure in the market, what other elements does Arch use to compete beyond price?
It is important to recognise that price is only one component of developing the most effective solution. Equally important is to us is ensuring disciplined underwriting, high level of service, specialist capabilities, and our ability to leverage our global platform and international experience.
Clients and brokers also value Arch’s flexibility and our clear and consistent coverage allows us to compete effectively beyond price. In addition, our claims team is highly experienced and an essential part of our proposition.
Our strong broker relationships are another important element, enabling us to understand our clients’ businesses and respond effectively to their evolving requirements.
Above all, our ability to remain disciplined and consistent throughout all stages of the market cycle ensures that we continue to deliver sustainable value for our clients.