A view from Nexus Asia CEO Anthony Egerton

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A view from Nexus Asia CEO Anthony Egerton
Anthony Egerton is Chief Executive Officer, Asia, for Nexus. In this interview, Anthony shares his thoughts about a range of topics including an overview of specialty insurance markets in the region, the challenges of doing business during the pandemic and his ambitions for the Asia business.
How would you describe the specialty insurance market in Asia at this time?
It is worth noting at the outset that there is no such thing as Asia per se – Asia encompasses a broad range of geographies and economies, cultures and insurance markets.
<ul>
<li>We have highly-developed markets like Japan, South Korea, Hong Kong and Singapore</li>
<li>We have emerging markets such as Malaysia, the Philippines, Vietnam, Indonesia and Thailand &#8211; all of which are growing fast, becoming more sophisticated, insurance penetration is increasing and with the demand for specialty products growing</li>
<li>And then we’ve got some frontier markets such as Laos, Cambodia and Myanmar</li>
<li>To which, of course, we then need to add China and India &#8211; already huge and the mammoths of the future.</li>
</ul>
We have a huge diversity of sophistication, demand and development across this region – which makes it difficult to talk in general terms about specialty insurance in Asia because it is so diverse.
Despite economic cycles and the impact of the pandemic, demand is growing and the long-term trend is attractive. Some lines of business have been very competitive in terms of pricing and rating but have for the most part been quite profitable.
The other factor to bear in mind is that we have experienced across specialty lines the recent uptick in the market cycle, but it has been nowhere near as severe as in London, for example – so the corrections and rate increases seen in other markets have been much more muted here.
What was the biggest challenge you faced during the Covid pandemic?
One of our biggest challenges has been to add to our resources in terms of headcount to keep pace with our business growth. I am pleased that we have made a significant number of hires across the region over the last two years – many of whom I have unfortunately not yet had the chance to meet in person.
It has been a very encouraging growth story for Nexus in Asia, both in terms of numbers and people – and doing that in quite extraordinary circumstances has been no mean achievement and extremely rewarding.
The acceleration of digital working enabled many financial services companies to remain resilient during the pandemic – is this your experience from the perspective of insurance markets across Asia?
Nexus is a collection of MGAs and we have built the business through organic growth, new geographies and acquisitions. One of the things that we have spent the last couple of years doing is migrating some of those acquired businesses onto our main systems – which has given us the opportunity to digitalise more of our operations. Therefore, we have been able to accelerate the shift and step-change in our business.
We are also now doing a lot more of the global servicing of the wider Nexus business from Asia. In Labuan, for example, we have a team inputting data into our underwriting system for underwriters elsewhere in the world to open the following morning. It is a 24-hour servicing operation and the value-add across our global operations is considerable. So it is digitalisation for some of our lines of business in Asia while also providing digitalisation support for the wider Group.
You offer a range of insurance products throughout Asia. Are there any in particular where you see significant opportunities for growth and equally, are there any that are challenged?
Our key lines of business are Marine Cargo, Financial Lines and a niche Property book in Australia – as well as Accident &amp; Health and Travel, which we have historically written from overseas but where we now have a dedicated marketing resource in the region. Our A&amp;H business in particular has grown fast over the last 12 months.
Our structured solutions business is a niche treaty reinsurance business &#8211; run out of Labuan, Malaysia &#8211; and involves a mix of specialised risk financing and alternative risk transfer structures. This is an area of specialism for us through our in-house analytical and data modelling capabilities – and one which has continued to grow and be very profitable from an underwriting perspective. We have recently hired a traditional Treaty underwriter in Malaysia to sit alongside the structured book to write a small Treaty book but also to help us to get in front of more cedants so that we can grow the structured business.
Some specialty lines have inevitably experienced the same sorts of challenges and market hiatus as other lines such as Aviation and Travel over the last 18 months – but these are global challenges and not ones that are particular to just Asia.
What are your ambitions for Nexus in Asia over the next few years?
As we have publicly indicated, we want to write an annualised US$50 million of gross written premium in Asia and we are broadly on target to achieve that goal. We have grown significantly in 2021 and the market dynamics and prospects for the business are very encouraging. Not only are we growing but we are also highly profitable as a business – and crucially, we are now beginning to pull our weight as a region for Nexus in terms of margin and growth targets which is very pleasing.