Column: Roger's Soapbox

The Underwriting Cycle Lives

By: | October 12, 2017 • 2 min read
Roger Crombie is a United Kingdom-based columnist for Risk & Insurance®. He can be reached at [email protected]

Here’s a joke. Why are they called pirates? Because they arrr.

Here’s another: Early last year, one of the global brokerage houses announced the imminent death of the underwriting cycle. “The inflows of new, lower-cost capital are helping to moderate (and perhaps kill) the reinsurance market cycle,” the broker stated, with all the authority that billions of dollars and acute market smarts could muster.

The broker has tens of thousands of employees and global clout, whereas I’m just a dude with a bad outlook. But I’ll tell you this much: The cycle is not dead. It’s resting.

The broker stated that a fall in U.S. property/casualty premiums as a percentage of GDP was evidence of the imminent end of reinsurance, showing up as “a proxy for the impact of the industry on the overall economy.”

The cycle is not dead. It’s resting.

The broker rated catastrophe models and “radical improvements in the technologies available to deploy capital very quickly, as and where needed” as the two most significant factors leading to the downfall of reinsurance.


Funny, that. The same company bleated about disintermediation in the 1930s by what was then called “alternative capital.” Today’s version of alternative capital is to be credited with taking down the reinsurance market.

The death of reinsurance, the broker said, feeds the growth of the ILS market. If companies would only abandon reinsurance and wholly embrace ILS, the broker said, greater stability could be guaranteed. Ha!

Too much money, allied to a pause of some years in heavily insured catastrophes, has been chasing too little understanding of business risk (e.g. cyber). A lull in economic proceedings always brings out forecasts of doom.

Then came this summer. I doubt the broker still thinks the underwriting cycle is over. Rather, with some ILS instruments being wiped out as the winds blew and the rains deluged, the cycle remains intact.

It was diminished somewhat as vast pools of capital sought better returns than have been available in interest-bearing accounts. Given the political and economic damage that might attend a meaningful raise in interest rates, they are stuck. Capital otherwise idle, or at the very least relaxed, has had to work for its living.

Big money seeks non-correlated alternatives, which is another joke. My fingers aren’t correlated to my toes, but soon after I fall off a tall building, their correlation would become apparent. In the early 2000s, what seemed to some a sensible conclusion, “the end of history” was declared and with it ever-expanding wealth for all. That opinion held water right up to 2007.

The inherent nature of markets does not, and will not, change in the short term. Harvey, Irma, Jose, the quake in Mexico and any other catastrophes that may occur between my writing this and your reading it, are a reversion to the norm, proof that the underwriting cycle lives on. Because what goes up must come down, and vice versa.

And that’s no joke. &

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Risk Management

The Profession

Maila Aganon is the personification of the American dream. The vice president of treasury and risk for Caesars Entertainment Corp. immigrated from the Philippines and worked her way to the top.
By: | October 12, 2017 • 4 min read

R&I: What was your first job?

I actually had three first jobs at the same time at the age of 16. I worked as a cashier in a fast-food restaurant, a bank teller and a debt collector for an immigration law firm.

R&I: Who is your mentor and why?

I have a few. The first one would be the first risk manager I reported to. He taught me the technical part of the job, risk financing, captives and insurance. I am also privileged to be mentored by Lori Goltermann (CEO of U.S. Retail for Aon Risk Solutions).  From her I learned to be resilient and optimize life/work balance. Then of course I also have a circle of ladies at work who I lean in to!

R&I: How did you come to work in this industry?


I was once a bank teller and had a client who was an insurance agent. He would come in every day to make deposits. One day, he offered me a job. He said, “How would you like to have your own desk, your own phone and your own computer?” And I said, “When do I start?” I worked for this personal lines insurance company for six years.

R&I: Did you take to it immediately?

Yes, I did sales, claims and insurance accounting. I left for a couple years and that is when AAA came calling, which was my first introduction to risk management. I didn’t know there was such a thing as commercial insurance. They called me and the pitch was “how would you like to run a captive insurance company?”

R&I: What have you accomplished that you are proudest of?

It is not so much the job but I say that I am the true product of the American Dream. I came to the U.S. when I was 16. I worked three jobs because I didn’t want to go to high school (She’d already graduated high school in the Philippines.) I spoke very little English, and due to hard work, grit and a great smile I’m now here working with all of you!

R&I: What is your favorite book or movie?

In movies, it is a toss-up between Gone with the Wind and Big Daddy.

R&I: What is your favorite drink?


I like anything sweet. If you liquify a dessert that’s my perfect drink.

R&I: What is the most unusual/interesting place you have ever visited?

This is easy because I just got back from Barcelona on a side trip. I visited the Montserrat Monastery, which is a thousand-year old monastery. It was raining and foggy. I hiked for three hours and I didn’t see a single soul. It was a very peaceful place.

R&I: What is the riskiest activity you ever engaged in?

This is going back to working at a fast food chain when I was young. I worked in a very undesirable location in San Francisco. At 16 I used to negotiate with gang members so they wouldn’t rob me during my shift. I had to give them chicken so they wouldn’t rob me.

Maila Aganon, VP, Treasury and Risk, Caesars Entertainment Corp.

R&I: If the world has a modern hero, who is it and why? 

I can’t say me. They have to be my kids Kyle and Hailey. They can make me laugh and cry within a half-minute of each other. Kyle is 10, a perfect Mama’s boy. Hailey is seven going on 18.

R&I: What about this work do you find the most fulfilling or rewarding?

I think the most fulfilling part is how you build relationships with people and then after a while they become your friends.

R&I: What is the risk management community doing right?

Risk managers do a great job of networking. They are number one. Which is not a surprise because the pillar of our work is building a relationship with underwriters, clients and brokers.

R&I: What could the risk management community be doing a better job of? 


I am experiencing that right now; talent.  We need to a better job in attracting and retaining talent. Nobody knows about what we do. You tell someone ‘I’m as risk manager’ and they give you a blank look. What does that mean?

We’re great marketers and we should use this skill set in attracting talent. We should engage our universities, our communities, even our yoga groups and talk to them about the exciting world of risk. It is an exciting career because there is nothing like it.

R&I: What emerging commercial risk most concerns you? 

It would have to be the increasing cyber risk and the interdependency of systems.

R&I: What does your family think you do? 

I took my seven year old daughter once to an insurance event that had live music, dancing and drinks. She thinks that whenever I go to an insurance meeting, I’m heading to a party.

Katie Siegel is an associate editor at Risk & Insurance®. She can be reached at [email protected]