The world of insurance is vast. As increasing number of companies and investors continue to enter the market, the global reinsurance market anticipates a rapid growth. Thriving on the momentum of heightened uncertainties, few leaders are laser-focused on improving the reinsurance business. Leading the charge is Anthony McKelvy, a senior leader in the reinsurance industry.
Anthony is the co-founder and Managing Partner of Northern Re, an alternative asset group focused on securitizing risk in the casualty reinsurance space. Over the last decade he has been a driving force behind some of the most consequential strategic ventures in the reinsurance industry, having amassed a track record of securing over $1B in risk capital through collaborations with collateralized and capital markets.
In his current role at Northern Re, Anthony is responsible for the sourcing, underwriting, and structuring of insurance assets. His expertise spans the intricacies of risk securitization as well as a keen insight into market evolution. At Northern Re he has instilled an ethos of marrying strategic foresight with technological advancement.
In a recent conversation with The CEO Views, Anthony McKelvy shares insights into his entrepreneurial adventure, strengths, values and how is he achieving his volatility goals.
What inspired you to become an entrepreneur, and how did you identify the opportunity for your business?
I previously worked on very small teams within larger organizations (Willis Re, Guy Carpenter) as well as at Boost Insurance. There were many valuable lessons I learned working with talented leaders at these high caliber organizations. My brother Peter and I leveraged those experiences to modernize a market in which we gained a deep knowledge and experience: reinsurance.
Can you share a pivotal moment in your entrepreneurial journey that significantly impacted the trajectory of your business?
I spent years working as a senior member of the team at an innovative company called Boost Insurance, which prides itself on being a full stack digital insurance platform providing everything from risk capital to technology. In addition to being great people they taught me a lot about building a company and the ingredients and values necessary for growth. I joined at the seed stage and left at the conclusion of our third major fundraising round. A lot of things have to break your way in building a successful business. The role of an entrepreneurial leader is to create the conditions favorable to success.
How do you approach risk-taking in your business decisions, and what lessons have you learned from taking risks?
The assumption of risk is the essence of the reinsurance business. In one sentence: we insure the insurers. We study and factor in many factors when deploying capital. We take great care and proceed with caution in how we invest the money our investors entrust with us.
Would you be able to discuss the importance of mentorship and networking in your entrepreneurial journey?
I have been fortunate to have mentors at every place I have worked. But I have been especially lucky to have a symbiosis with my brother Peter in which our skills and experiences complement each other. We are the rare example of siblings who enjoy our time together and our professional collaboration bears that notion out.
What role do you believe innovation plays in sustaining a competitive edge in today’s business landscape, and how do you foster a culture of innovation within your company?
The first quarter of the twenty-first century has been shaped by the forces of change. Both man-made and natural. Positive and negative. Technology has played a significant role in shaping those currents. As we progress further into the century, innovators will play an increasingly vital role. Many industries that have remained stagnant for centuries have been upended in recent years by technological innovation.
At Northern Re we embrace technological advancement as well as Insurance Linked Securities as an alternative asset class, not for its own sake but to create value for our investors through our strategic foresight.
Can you provide an overview of the unique services and solutions that Northern RE offers to its clients?
Northern Re endeavors to generate strong risk-adjusted returns by acquiring data-driven, profitable portfolios of insurance risk. This is accomplished by identifying best-in-class underwriting teams who focus on casualty insurance lines such as Personal Auto, Commercial Auto and General Liability, and providing capital support to the insurance companies on which these teams write business.
Northern Re explicitly avoids Property catastrophe risks as data-rich casualty books provide more predictable performance overtime. Said differently, we insure the insurers in the spaces most Americans are familiar with, such as automobile and general liability.
Looking ahead, what emerging trends or developments do you foresee shaping the future of the reinsurance industry, and how is Northern RE preparing to adapt to these changes?
The reinsurance business like most other businesses that have been around for centuries will be at least marginally improved and at best radically evolve with the improvement of technology.
Further, reinsurance as an asset class has historically been available to investors in the form of Catastrophe bonds. Northern Re is expanding on that product set, providing the expertise and infrastructure for investors to allocate towards less volatile portfolios of business, like auto and general liability. We aspire to be the tip of the spear of that progress. In an unpredictable world we have the ability to improve outcomes for our investors.
The reinsurance industry often operates behind the scenes, yet plays a crucial role in supporting global economies. How do you think the perception of reinsurance could be improved, and what steps can Northern RE take to increase public awareness?
Not many people have fluuency in what the reinsurance industry does and how it’s relevant to their lives. Perhaps awareness isn’t what the industry needs, rather more technological innovation and private capital entering the space, which will in turn better serve our customers and achieve superior returns for our investors.
At Northern Re we embrace technological advancement as well as Insurance Linked Securities as an alternative asset class, not for its own sake but to create value for our investors through our strategic foresight
