We are a diverse financial holding company serving a variety of niche markets.
Our principal business markets and underwrites specialty insurance products.
We believe that our specialty product focus and niche market strategy enable
us to develop expertise and specialized market knowledge. We seek to differentiate
ourselves from competitors by our expertise, service, continuity and other value-based
considerations. We also own interests in various industrial and service businesses
that operate outside of the specialty insurance marketplace. Our financial goals
are to earn consistent underwriting and operating profits and superior investment
returns to build shareholder value.
The specialty insurance market differs significantly from the standard market.
In the standard market, insurance rates and forms are highly regulated, products
and coverages are largely uniform with relatively predictable exposures and
companies tend to compete for customers on the basis of price. In contrast,
the specialty market provides coverage for hard-to-place risks that generally
do not fit the underwriting criteria of standard carriers.
Competition in the specialty insurance market tends to focus less on price
than in the standard insurance market and more on other value-based considerations,
such as availability, service and expertise. While specialty market exposures
may have higher perceived insurance risks than their standard market counterparts,
we seek to manage these risks to achieve higher financial returns. To reach
our financial and operational goals, we must have extensive knowledge and expertise
in our chosen markets. Many of our accounts are considered on an individual
basis where customized forms and tailored solutions are employed.
By focusing on the distinctive risk characteristics of our insureds, we have
been able to identify a variety of niche markets where we can add value with
our specialty product offerings. Examples of niche insurance markets that we
have targeted include wind and earthquake-exposed commercial properties, liability
coverage for highly specialized professionals, equine-related risks, workers
compensation insurance for small businesses, classic cars and marine, energy
and environmental-related activities. Our market strategy in each of these areas
of specialization is tailored to the unique nature of the loss exposure, coverage
and services required by insureds. In each of our niche markets, we assign teams
of experienced underwriters and claims specialists who provide a full range
of insurance services.
We also participate in the reinsurance market in certain classes of reinsurance
product offerings, which were expanded in 2013 through the acquisition of Alterra.
In the reinsurance market, our clients are other insurance companies, or cedents.
We typically write our reinsurance products in the form of treaty reinsurance
contracts, which are contractual arrangements that provide for automatic reinsuring
of a type or category of risk underwritten by cedents. Generally, we participate
on reinsurance treaties with a number of other reinsurers, each with an allocated
portion of the treaty, with the terms and conditions of the treaty being substantially
the same for each participating reinsurer. With treaty reinsurance contracts,
we do not separately evaluate each of the individual risks assumed under the
contracts and are largely dependent on the individual underwriting decisions
made by the cedent. Accordingly, we review and analyze the cedents risk management
and underwriting practices in deciding whether to provide treaty reinsurance
and in pricing of treaty reinsurance contracts.
Our reinsurance products are written on both a quota share and excess of loss
basis. Quota share contracts require us to share the losses and expenses in
an agreed proportion with the cedent. Excess of loss contracts require us to
indemnify the cedent against all or a specified portion of losses and expenses
in excess of a specified dollar or percentage amount. In both types of contracts,
we may provide a ceding commission to the cedent.
We distinguish ourselves in the reinsurance market by the expertise of our
underwriting teams, our access to global reinsurance markets, our ability to
offer large lines and our ability to customize reinsurance solutions to fit
our clients needs. Our specialty reinsurance product offerings include coverage
for general casualty, professional liability, property, workers compensation
and credit and surety risks.
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