REINSURERS
Somerset Re CEO: Tariffs, Global Economic Volatility Could Present Opportunity
HAMILTON, Bermuda //BestWire// - The current economic uncertainty in the United States and globally could make a company such as Somerset Reinsurance Ltd. more attractive to insurers seeking a safe haven, Chief Executive Officer Danish Iqbal said.
Danish Iqbal“It’s tough to gauge when it’s all unfolding as we speak,” said Iqbal, who was appointed CEO on March 26. “There’s a lot of volatility around, so insurance companies may look for a strong reinsurance partner.”
To put it mildly, the recent past has been in flux on the economic front.
On April 11, China raised its tariffs on U.S. goods to 125% in response to a similar increase instituted by President Donald Trump, the New York Times reported. The world’s largest two economies are involved in a fast-moving trade dispute that has prompted concerns over a global recession, the paper reported. In total, Trump’s administration said it has placed a 145% tariff on all Chinese exports to the United States.
Recently, Trump paused for 90 days a larger set of global sanctions ratings duties on virtually every country. Equities markets dropped sharply when that tariff package was set to take effect, only to regain a large portion of that ground before dropping again amid the China dispute.
The insurance industry outside of the investment-heavy world of life insurance and reinsurance has also shown how global uncertainty in trade and economics can bleed into its operations.
Tariffs on U.S. trading partners could hike the annual average cost for automobile coverage 14% by year end, according to digital agent and aggregator Insurify (BestWire, April 1, 2025).
The effect on auto claims will start with the enactment of new, global tariffs on imported vehicles and parts and broaden as inventories dwindle, said Insurance Information Institute Chief Economist and Data Scientist Michel Leonard (BestWire, April 1, 2025).
The new tariffs could increase annual personal auto insurance claims costs by $26 billion to $52 billion, the American Property Casualty Insurance Association has said, based on insurance-related data on the potential inflationary jolt to consumers. The 25% tariffs on imported passenger vehicles and light trucks are scheduled to take effect on April 3 and by May 3 for key auto parts.
Iqbal’s appointment followed a restructuring at parent Aquarian insurance Holdings, Inc. (Bestwire, March 26, 2025).
Iqbal is returning to Somerset Re after previously serving as head of pricing and valuation earlier in his career, the company said in a statement. Immediately prior to rejoining the company, he was president of Neptune Reinsurance Ltd., a Bermuda-domiciled company integrated into Somerset Re in December 2024. He oversaw the establishment of that organization's infrastructure and ensured its licensing with the Bermuda Monetary Authority.
One day before that, Aquarian, a global holding company with insurance units in its portfolio, said it has formed Aquarian Insurance Holdings to provide a 'shared structure' for its reinsurance and retail insurance businesses (BestWire, March 25, 2025).
Aquarian has grown to about $22 billion in assets under management since its 2017 founding and established itself in the investment industry, the company said. The formation of the insurance holding company will provide for business growth at a greater scale, while increasing efficiencies across the operating structure, the company said.
Along with Somerset Re, Aquarian Insurance Holdings has U.S. life and annuity provider Investors Heritage Life Insurance Co.; life and annuity insurer Hudson Life and Annuity Co., which Aquarian said it rebranded in 2022 to provide insurance policies for New York state; and Via, a third-party administrator servicing Aquarian's insurance companies and third-party carriers.
That link has been beneficial for Somerset Re through access to capital, expanded investment expertise and origination capabilities, Iqbal said. In addition, he said the presence of a steady source of capital also removes what might otherwise be a growth pressure in uncertain economic times and will provide resources for future expansion.
Volatility in the financial and insurance markets could also present an opportunity for Somerset Re to consolidate, Iqbal said.
It’s close tie-up with Aquarian could also be an asset that helps it weather challenges in the global economy, he said. Somerset Re has no public equity exposure and the company looks to mitigate its exposure to interest rate fluctuation through its asset-liability matching program, he said.
“Being strong in terms of asset-liability match, I think we pass on those benefits to the insurers as well because it will certainly be important to them to have a strong reinsurance partner,” Iqbal said.
Apart from the current economic unrest, he said Somerset Re is seeing a healthy uptick in business inquiries coming from Japan following recent regulatory changes there. Iqbal declined to discuss potential deals that are in the works.
The company has also seen business interest coming from other emerging markets, he said. Currently, the business mix is roughly even between reinsuring life policies and annuities, with a small portion also dedicated to other risks, he said.
Iqbal said as CEO he hopes to continue the company’s focus on clients’ needs and in respect to its holding company he said the aim is to remain growing and profitable with a strong balance sheet.
“As the company has grown, we have added a lot more employees,” he said. “I want to make sure that I focus on and take care of our employees. That is our greatest asset and if we take care of our employees they will take care of the customers and take care of the company.”
Somerset Reinsurance Ltd. has a current Best's Financial Strength Rating of A- (Excellent).
(By Terrence Dopp, senior associate editor, Best’s Review: Terry.Dopp@ambest.com)