Providing strategic advice in a post-COVID world

strategicadvice_huntington

At the end of last month, (re)insurance strategic advisory firm Huntington Partners announced a partnership with Hong Kong-based financial services firm Huizhi International. Huntington managing partner Gerard Pennefather called the move a necessary one for companies looking for solutions in a post-COVID world.

“We believe in a post-COVID world our creative approach to the significant challenges and opportunities our partner companies will be facing calls for high-touch experienced advisers who understand these challenges and have the ability to move swiftly,” he said.

“One needs to work with solutions that are not ‘same old’ – they need advisers who can push the boundaries of perception which existed in the pre-COVID world with well thought through plans and quickness of response is paramount. Advisers who have been through several economic cycles/downturns will be in a position to give practical insights. How does an insurance company cope with a reduction of 50, 75% drop in GWP? (Re)insurance companies will be in the market for capital – the source of that capital could well be from Asia, particularly China.”

This partnership with Huizhi, who focuses on servicing corporates in Hong Kong and Greater China, will allow Huntington access to investors in the region, which Mr Pennefather said will be ideal partners for their clients.

The two firms were in discussions for a year: “Our thoughts and views congregated with what we anticipate the world might look like in our sector post-COVID – capital in Asia will play a part in recapitalising insurers with sub optimal market positions and balance sheets,” he said.

“We believe Huntington’s deep expertise within (re)insurance and specialized FIG in both Asia and Europe will make an ideal partner for Huizhi, and we are excited with the combination of skills our two companies bring,” said Huizhi CEO Dr Roger Zhu.

These skills, according to Mr Pennefather, will help privately held insurers who will be facing capital issues once the pandemic crisis is over, global insurers who are looking to exit sub-optimal markets, insurance intermediaries who will be seeing a significant fall off in business. “Our role will be to facilitate either the on the buy or sell side of these deal and the strategies involved,” he said.

Capital will be in short supply once the crisis has ended he said, “Reinsurers will be a lot more careful in exposing their balance sheets – rates should rise coupled with reduced risk appetite.”

This will expedite the trend towards ILS and capital markets for funding, alongside a significant fall off in jobs in the sector. With tumultuous times for the industry ahead, Mr Pennefather believes that firms such as Huntington and Huizhi will be vital.

Original article at Asia Insurance Review