In an exclusive interview with Commercial Risk Europe for FERMA Forum 2024, Duncan Smith, Deputy CEO of Arch Insurance (EU) dac and Roberto Tous, EU Director of Strategy & Distribution shared their perspectives on how Arch is expanding into continental Europe and building local presence in key markets.
This interview was first published by Commercial Risk Europe
What is your current position in Europe in terms of size and premiums etc?
Duncan: Europe has been a core market for Arch since we established operations outside of the US and Bermuda in 2004. Originally London-based with operations in Italy, Arch has invested significantly in building out its Continental European platform over the last five years.
In 2019, Arch Insurance (EU) dac was established in Dublin as the headquarters of our European operations, to provide specialist property and casualty insurance solutions within the European Union. More recently, we have set up branches in Spain and France, each with an initial focus on building out our cyber insurance portfolio across Europe.
In addition to our growing number of operations across the EU, we also write European business through our London Market and Lloyd’s operations. Whilst we are a relatively new but rapidly growing presence in Continental Europe, we benefit from being part of Arch Capital Group Ltd., an S&P 500 company and one of the largest global specialty (re)insurers with A+/AA- ratings and strong capitalisation. This provides our clients with robust financial security as well as access to the expansive scope of specialist products, services and expertise that we provide globally.
In terms of our current position in Continental Europe, we have invested in local talent to build out our cyber underwriting teams and are also actively exploring opportunities to expand into other territories and lines of business, and will continue to build out our local underwriting capabilities through the remainder of 2024 and beyond.
How is Arch expanding into continental Europe (France and Spain)? What are your growth plans? Where, when, why and how?
Duncan: The opening of our offices in Paris and Madrid is part of our ambitions to build a network of offices in Europe and expand the range of solutions that we offer across the region.
Our growth strategy is based around establishing teams of local market experts with considerable sector experience. That combination enables us to develop strong relationships with brokers and mutual clients in a relatively short space of time.
This has been demonstrated by the positive performance of our newly formed teams over the last 12 months as we have built out our cyber portfolio. Cyber is an area where we have strong appetite for growth and believe we can offer real value to our brokers and their clients. Arch is a leading global provider of cyber insurance and the continued investment, particularly within Europe, demonstrates our clear commitment to the class.
Moving forward, we will continue to build out our local presence and develop our proposition in the European territories and lines of business where we feel we can provide compelling solutions for our brokers and clients. We see clear opportunities for growth in several areas including casualty, executive assurance and fine art and specie.
We recognise that in some cases, clients may also want to access international insurance markets. Our European underwriting teams work closely with their London Market counterparts and Arch has the flexibility in terms of platforms and underwriting bench strength to provide client-focused solutions in such cases.
Arch has highlighted the importance of building out a regional presence across Europe. How important is that local interaction in a European context both from a broker and insured perspective?
Roberto: We firmly believe that local interaction in the European insurance market is critical to developing long-standing and productive relationships.
Having that close and regular contact with both brokers and their clients enhances the ability to provide tailored insurance solutions aligned to the unique risk profile of each particular organisation and reflect awareness of local exposures and specific market conditions. We see this as integral to establishing trust which is critical to the success of any relationship.
Being on the ground also means we can offer direct access to underwriting and risk expertise, and provide greater support to customers, particularly in the event of a claim. Having that intrinsic understanding of the cultural sensitivities and nuances of a particular region, as well as the challenges unique to that area, is key to the delivery of an effective and more personalised service.
Personal interactions often lead to stronger trading relationships, help develop greater customer loyalty and enhance the quality of support that insurers can provide, such as facilitating a faster claims response or creating more bespoke risk management solutions.
Finally, having a regional presence is also important from a regulatory perspective. The regulatory landscape in Europe is complex and having an understanding of the legislative environment and its nuances is extremely valuable.