Arora: You need to have sizzle

Ex Axis CEO Steve Arora appeared on the latest Voice of Insurance episode, produced in association with AdvantageGo.

Until recently, Steve Arora was on the cusp of launching Alpine Re, a new balance sheet reinsurer aimed at capitalising on a disrupted global reinsurance market.

Although the venture ultimately didn’t secure the $1bn in capital it sought, the experience has left Arora with a deeper understanding of what investors are really looking for — and what it takes to build a reinsurer from scratch.

Speaking to the Voice of Insurance podcast, Arora reflected on the 20-month capital-raising journey that followed the 2023 reinsurance reset.

“We took a swing,” he said. “It was tough macro conditions overall, and we just couldn’t drag the deal over the finish line. But it was tremendous learning.”

Understanding investor appetite

Arora co-founded Alpine Re with industry veteran Willie Zeller, targeting a Bermuda-based A- rated vehicle with a focused and selective underwriting strategy. Yet despite promising fundamentals, Arora encountered strong headwinds in the capital markets.

“What we were told when we started was PE is closed, and what I can confirm to you is that PE was closed,” he said. “The bar just gets raised very, very high for any new allocations. It’s very difficult to raise an anchor investment of $250m to $500m from a brand-name PE firm in this type of environment.”

Private equity’s reluctance stemmed from illiquidity, high interest rates and uncertain exit routes, leading to a preference for capital-light businesses and annuity platforms.

“Psychology trumps substance,” one investor advised him. “In such a competitive fundraising environment, you need to have sizzle — something forward-looking and a feeling of scarcity.”

Arora admitted Alpine Re could have leaned more into that. “Being self-critical, I think we could have over-rotated and sold a little bit more,” he said. “We could have added more sizzle to our business plan, that would have given the impression we had the world’s best algorithm or were the first and only to implement AI.”

While family offices and pension funds showed limited engagement, the strongest interest came from asset managers and sovereign wealth funds, particularly those pursuing insurance as part of an asset gathering strategy.

Building the ideal reinsurer

Alpine Re was structured around some clear fundamentals: a modern platform with centralised operations, minimal legacy drag, outsourced infrastructure and a product-centric, return-oriented philosophy.

“We set out with a nuts-and-bolts plan, very focused on the fundamentals,” Arora said. “Everything we did was rooted in consistent book value growth.”

He remains convinced that even in a market past its peak, opportunities exist for new entrants — especially those with clean balance sheets and modern operating models.

“There’s limited competition in P&C reinsurance,” he said. “Even with a low-90s combined ratio, the investment side of the equation can get you to a 20-plus percent ROE.”

Arora also stressed that AI and modern tech platforms offer clear benefits.

“From day one you can automate submissions, triage transactions, evaluate deals faster, reduce bias. It makes operations leaner and more consistent — and all of it can be cloud-based,” he said.

What next?

The experience has shifted Arora’s outlook.

“Once you enter the space of trying to do something entrepreneurial, you get a little bit rebooted,” he said.

He sees opportunity in diversification — notably bridging P&C with life and health—as well as in value creation models that are smaller, focused and tech-enabled.

While he explored the MGA model during Alpine’s buildout, he remains sceptical of its long-term sustainability in reinsurance.

“It’s just unnatural to add another link in the value chain – too much cost,” he said.

As for the future, Arora is open—but committed to doing something entrepreneurial again.

“I have no regrets on pursuing the opportunity,” he said, adding: “Aligning yourself with the right people who you can trust and lean on makes a big, big difference.”