Ep310 Dan Burrows Group CEO Pelagos: Very few people get to see the whole market

Yeah.

It's been really interesting because if I go back to, say, last year's Monte Carlo, it was a very bullish time.

Obviously, it could not be.

We'd come off great results.

Everything's rated adequate, more or less, and everyone is looking to write a bit more.

And lo and behold, what inevitably happened was the market softened, and it softened by more than most people were expecting.

That seems to have taken a lot of people by surprise, sort of in, in their commentary in Q1, Q2.

Did it take you by surprise? I mean, I wouldn't have expected it to.

[chuckles]

I think it depends where you sit in the food chain, and you know we talk about verticalized markets, the importance of being a leader, a price setter, not a price taker.

So yes, we see the headlines.

In my prior life as a broker, I helped write some of those headlines for many years.

[chuckles]

But, you know, we're definitely seeing, in certain lines, a far more competitive market.

I think that's helped somewhat by your ability to match that with outwards reinsurance, and we talk very openly about that being a very fungible form of capital for us, and that can improve the inwards margin.

I think the retrocession market and property has been the most competitive for probably for the last eighteen months.

But no, no, I think as expected, we plan for a more competitive landscape, but we do use our outwards program.

We can reshape the inwards.

And don't get too obsessed.

The market is obsessed with property CAT, property insurance.

We write well over a hundred different lines of business.

Many of the lines that we're active in don't respond to the same market cycles as some of those more commodity-driven lines.

I suppose, yeah, I mean, the more specialty-

Yeah, exactly

... probably less of a cycle they have because they're probably still in such a growth phase that they're still quite-

Yeah.

It's been really interesting because if I go back to, say, last year's Monte Carlo, it was a very bullish time.

Obviously, it could not be.

We'd come off great results.

Everything's rated adequate, more or less, and everyone is looking to write a bit more.

And lo and behold, what inevitably happened was the market softened, and it softened by more than most people were expecting.

That seems to have taken a lot of people by surprise, sort of in, in their commentary in Q1, Q2.

Did it take you by surprise? I mean, I wouldn't have expected it to.

[chuckles]

I think it depends where you sit in the food chain, and you know we talk about verticalized markets, the importance of being a leader, a price setter, not a price taker.

So yes, we see the headlines.

In my prior life as a broker, I helped write some of those headlines for many years.

[chuckles]

But, you know, we're definitely seeing, in certain lines, a far more competitive market.

I think that's helped somewhat by your ability to match that with outwards reinsurance, and we talk very openly about that being a very fungible form of capital for us, and that can improve the inwards margin.

I think the retrocession market and property has been the most competitive for probably for the last eighteen months.

But no, no, I think as expected, we plan for a more competitive landscape, but we do use our outwards program.

We can reshape the inwards.

And don't get too obsessed.

The market is obsessed with property CAT, property insurance.

We write well over a hundred different lines of business.

Many of the lines that we're active in don't respond to the same market cycles as some of those more commodity-driven lines.

I suppose, yeah, I mean, the more specialty-

Yeah, exactly

... probably less of a cycle they have because they're probably still in such a growth phase that they're still quite-