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Industrial property, energy and space insurance well positioned in hard market, says Helvetia

The current hard market and changing risk landscape are likely to be good for business for certain specialty lines, according to Swiss insurer Helvetia.

Oscar Treceno, head of engineering, energy, industrial property, cyber and space at Swiss all-lines insurer Helvetia, told Commercial Risk DACH that he sees strong potential for his business area in the current environment.

Helvetia’s technical lines were prudently managed during the last soft market spell, according to Treceno. “We stayed defensive during the prolonged soft market phase and avoided excessive exposures.”

As a result, the business area entered the hard market from a position of strength, enabling it to expand during the past two years to a current value in excess of CHF400m per year.

The company has also been boosted by a  recent rating upgrade to ‘A+’ with stable outlook by Standard & Poor’s, said Treceno.

“The upgrade is extremely important in that it promotes confidence among brokers and clients. Take, for example, a risk like Crossrail [a railway construction project in London], which is a multi-billion-pound project with a long time horizon,” he said.

Helvetia is also keen to expand its involvement in renewable energies, said Treceno.  The company is using its technical expertise and civil engineering background to cover the entire production process from energy generation to storage, involving huge battery system technology.

Although the conditions for growth are in place, namely capital strength, sophisticated technical knowledge and a healthy, diversified portfolio, business expansion is not the primary objective for Helvetia.

“Our priority is to give customers the products they really need at the right price and to guarantee technical excellence in doing so,” stressed Treceno. He added that this approach brings sustainable growth that will benefit the company over the long term.

In that context, uncorrelated lines are invariably of interest, given the considerable loss potential in engineering, industrial property, energy and space business. Treceno commented: “Our lines all have relatively high volatility. They also have a strong technical component in their DNA. That’s why we put them together to form a balanced and uncorrelated portfolio.”

Going forward, the main challenge in delivering fairly priced, customised solutions lies in the quality of data analysis, according to Treceno. The unprecedented volume of big data now available to the market presents big opportunities.

To illustrate this point, he said: “If you imagine an iceberg, some of it is visible but the main part is invisible. The key to improving our risk assessment lies in assessing the data below the surface. That is our big challenge over the next decade as we work to improve our pricing and risk selection.”

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