Arrow Global MD says insurance underwriting is its own strategy

In a contributed column published Oct. 14 by Alternative Credit Investor, Dan Adams, managing director of Arrow Global Insurance, says private credit and insurance-related assets now exceed half of AUM at large alternative managers. He argues that treating insurance purely as permanent capital misses a separate opportunity in underwriting specialty risk.

The column puts a number on that underwriting pool: European managing general agents write more than €20 billion (£17.1 billion) of annual premium, Adams writes, citing Howden Re. He frames that premium as specialist underwriting activity, not capital available for a manager to run.

Adams separates asset gathering, where managers earn fees on long-duration insurance liabilities, from underwriting, where returns depend on underwriting skill and risk selection. The first model, he says, has dominated the past decade and reshaped parts of the alternatives industry; the second is where he sees insurance as an investment strategy in itself. He excludes life insurance, annuities, catastrophe risk and commoditised consumer insurance from the markets he finds interesting.

For an allocator considering insurance-linked credit, the question is which model is being sold and which risk is being paid for. The two approaches have different loss drivers, so a diligence file that treats them as one exposure misses the distinction Adams is making. The €20 billion of European MGA premium suggests the underwriting pool is large enough to matter, but it does not establish which managers can source and price that risk.

The piece ran under Alternative Credit Investor's joint ventures and promoted content label, and its author runs the insurance business whose approach it advocates. The €20 billion figure is attributed to Howden Re and can be checked. The claim that private credit and insurance-related assets exceed half of AUM at large managers appears without a cited source in the published text.