DESPITE the challenges of the coronavirus pandemic, Active Capital Reinsurance (Active RE) has seen continued global expansion and diversification.
The company’s team has been faced with great obstacles in the past, and it has shown that with resilience and determination any challenge can be overcome. With stiff mobility restrictions in most countries where it operates, the Barbados-headquartered international firm has continued to operate without stoppages. Active Re provides reinsurance products and risk management services to 284 ceding companies and 107 brokers in 83 countries of Latin America, Europe, MENA, and APAC.
Digital tools and software have enabled a seamless transition from office to teleworking, providing business continuity for its growing clientele. “Although we do not know when and how this pandemic will end,” says Panama-born CEO Juan Antonio Niño Pulgar, “we do know that our efforts, ethics and hard work remain strong, and the commitment from the company to our employees, untouched.”
With its stated mission of Benefits For All, Active RE has dedicated 13 uninterrupted years to the promotion of its brand and work ethic. The firm is characterised by its unique, specialised reinsurance solutions aimed at the comprehensive management of risks of financial and credit institutions, as well as regional economic groups throughout Latin America.
“We have received nothing but trust, support and loyalty from our clients,” says Niño, “and we have to express our sincerest thanks and high appreciation to them and to our strategic allies, distribution channels, retrocessionaires, staff and employees. They have accompanied us on an exciting journey over the past 13 years, which we hope to continue with the same inspiration for many more.”
In the past five years, Active RE has reported a gross annual average premium of $108m, with an average combined ratio of 86 percent. It accumulated $832m in 2007-2019, offering high-class financial security to clients located in 83 markets across all continents. The technical results were delivered thanks to a diversified portfolio and a conservative underwriting policy, based on appropriate retention of core business and cession of balances and accumulations to first-line retro capabilities. Its equity base has grown too, due to increased reinvestment of earnings and capital injections, hence its performance and maintaining high levels of liquidity, profitability and regulatory adequacy.
Despite the fast-paced growth of facultative business proposals received, only one-fifth resulted in accepted and materialised businesses. “That’s in accordance with our risk appetite and underwriting guidelines,” explains Niño. “To embrace the challenge of growth, diversification and competitiveness in such a volatile environment — and in a short period of time — we reviewed and updated two of our fundamental pillars.”
Those pillars are the Enterprise Risk Management (ERM) framework and the Strategic Map (Mapa Estratégico®). Active RE’s risk matrix has shown changes in certain types of risks, such as cybercrime and pandemic, representing recent global trends and perils. Risks are regularly monitored and mitigated by the firm.
Entering new markets and business lines was an opportunity and a confident step of relevance in times of external and internal impacts, Niño says — “thanks to the combined effort of our team and the support of our allies and distribution channels”.
In less than two years, Active RE has completely renewed its technological platform, with a growing level of automation in operations that in other circumstances would have absorbed expensive and scarce resources.
“Since 2015, we have been working on a diversification strategy into other markets and lines of business,” says Niño, “thus augmenting its global reach and widening client solutions.
“This effort has led the company to develop a sizeable global portfolio, not only in bancassurance but also in traditional lines of reinsurance.”
As part of its expansion, Active RE has been recruiting new senior staff members. Ramon Martinez-Carrera has been appointed by Niño as deputy CEO. The firm has also welcomed three new colleagues from Mexico and Argentina for top positions in its offices around the world. The new team members will take up their roles in the Active RE offices in Panama and Miami.
Unfazed by the volatile markets, general disruption and gloomy global outlook that have come in the wake of the pandemic, Niño and his team remain upbeat. “Looking to the future,” he says, “we will pay close attention to the evolution of the global risk landscape. There are many challenges on the horizon for reinsurance, some of which involve facing exposures to new risks of difficult measurement, modelling and prediction.
“For Active Re, ratifying its vision as a global, specialised and innovative reinsurer means preserving — and trying to improve — our excellent rating. We will also be increasing our capitalisation and financial strength, as well as investing in technology and professional talent. We strive to always apply the best analytical tools to create innovative solutions that add tangible value and benefits to our customers.”
Active Re started out during conditions of transcendental changes for the international economy and the reinsurance industry. “Our strategy and business model have been configured during times of high uncertainty, deep profound global challenges,” says Niño, “such as the 2008-2009 financial crisis, uneven economic growth, slowdowns, and geopolitical changes.
“The global reinsurance market has undergone changes that already seem irreversible: less pronounced price cycles, the emergence of alternative sources of venture capital, unprecedented catastrophic events in the last three years.” With increasing recurrence, technological disruption and constant consolidation, under the pressure of narrow margins many times lower than the cost of capital, Active RE has soldiered on — and prospered.
Many traditional brands have not been so lucky, disappearing from their usual markets, and the uncertainty surrounding the coronavirus pandemic and its implications remain.
“We are closely following the situation with responsibility,” says Niño, “strengthening resilience and operational efficiency.”
In 2019, Active Re established a representative office in Spain, to focus its attention on the growing markets in Europe, MENA, and APAC. New facultative and treaty business participations in traditional lines were promoted, backed by an experienced team of professionals and new capacities.
“We have recently applied — and been accepted — as members of the Panamerican Surety Association,” says Niño. “This important entity is a not-for-profit organisation which was founded in 1972 by a group of sureties from the American continent. Today, with members from 35 countries in three continents, PASA represents the world market of suretyship and credit insurance and reinsurance.”
The company is also thrilled to have been accorded AM Best’s rating confirmation to FSR of A- (stable outlook) and ICR of a- (stable outlook). “It is an honor to be part of the select group of global companies rated by AM Best,” says Niño, “having attained the strongest level for balance sheet capitalisation according to the new Best’s Capital Adequacy Ratio model.