Aussie insurer reveals risk appetite shake-up

Aussie insurer reveals risk appetite shake-up

Aussie insurer reveals risk appetite shake-up

Australian insurer Calliden has revealed plans to shake-up its risk appetite as it becomes a more focussed insurer.

As Calliden focusses on building up its new managing general agency model, CEO Nick Kirk has revealed that the MGA is likely to pull in a projected $170m GWP in 20313, a $60m increase on 2012’s $110m.

However, the make-up of the GWP will change. In 2012, around 40% came from home, 25% from motor, 26% from niche casualty, 3% from warranty and 6% from other.

For the 2013 financial year, Calliden Agency expects home insurance GWP to fall by 15% to 25%; it estimates 34% of the projected $170m GWP will come from business pack and mid markets, 25% from home, 13% from farm, 7% from NSW warranty, 6% from mansions and 4% from other, with capacity from Calliden Insurance Limited, Great Lakes Australia, Lloyd’s and SICorp.

 “While much of the work associated with developing Calliden’s MGA model was completed during 2012, the focus in 2013 will be on consolidating the new operating structure,” Kirk said.

 “In 2013 the size and composition of Calliden insurance’s portfolio will begin to look quite different,” he said. “The reduced range of product it continues to underwrite is more tailored to suit its risk appetite. This will allow CIL to grow its net revenue by reducing the amount of proportional reinsurance and providing a more efficient use of capital.”

But he added: “Calliden Agency Services will become a sizable operation in 2013 with a projected GWP of around $170m and an attractive, diverse range of products for its intermediary network.”

Calliden swung back into the black with a $1.1m net profit in 2012, compared to a $10.2m loss in 2010. The modest figure was due to the insurer transitioning into a managing general agency model, as well as one-off costs associated with the restructure.