1. Art and Diseño

every wednesday • Issue 29 • 28 january 2015
PartnerRe and
Axis to merge
Bermuda-based Axis Capital and PartnerRe are to merge,
creating an $11bn-in-premiums top-five global reinsurer.
The companies said that the
paper-based deal was a "merger
of equals" and that it had been
approved unanimously by both
boards of directors.
Under the terms of the deal,
PartnerRe shareholders will
receive 2.18 shares of the
combined company's shares for
each share owned of PartnerRe.
Axis Capital shareholders will
receive "new" Axis-PartnerRe
shares at a ratio of one-to-one.
Upon completion of the deal
PartnerRe shareholders will own
about 51.6% of the combined
company, while Axis Capital
shareholders will own about
48.4%.
The deal is at about a 6% premium to the Friday closing price
of Axis Capital if PartnerRe's
share price is constant, valuing
Axis at about 1.03 times projected full year 2014 book value
per share of $50.63. PartnerRe
trades at about 0.90 x book
value per share of $126.24.
PartnerRe chairman Jean-Paul
Montupet will be non-executive
chairman of the combined company, with Michael Butt serving
on the board as chairman emeritus. Axis Capital chief executive
Albert Benchimol will head the
combined operation. PartnerRe
chief executive Costas Miranthis
will step down with immediate
effect. PartnerRe director David
Zwiener will become interim
CEO of PartnerRe until the deal
completes.
Miranthis said "it has been
my pleasure to serve as Part-
nerRe's CEO as we continued
to build upon its leadership
position in reinsurance. This
merger with Axis Capital offers a unique opportunity to
enhance PartnerRe's scale in the
reinsurance sector and to enter
the primary insurance market
with a high-quality partner with
a global franchise. This is the
right step for PartnerRe at the
right time".
Other senior positions in the
Continued on pages 4>
Micro insurance consortium
launched at WEF
A new micro insurance consortium has been launched by a number of insurers at the
World Economic Forum in Davos.
Some of the biggest companies
in the re/insurance industry have
come together and launched a
new micro insurance consortium
and micro insurance venture
incubator (MVI) at the World
Economic Forum (WEF) in
Davos.
The consortium consists of
AIG, Aspen Insurance Holdings
Limited, Catlin Group, Guy
Carpenter & Company, together
with Marsh & McLennan Companies, Hamilton Insurance
Group, Transatlantic Reinsurance Company, XL Group and
Zurich Insurance Group.
The MVI has pledged to
support launching 10 micro
insurance ventures over the next
Continued on page 4 >
ALSO in this issue: PartnerRe and Axis Capital: More than just scale – page 12
2 EDITORIAL comment
6 TOP STORIES
10 TOP STORIES
13 FEATURE
18NEWS ROUND up
20people moves
• The year of
the decade for
acquisitons
•Severe winter
weather hits early in
2015
•New ABIC chair
issues call to arms
• The January
reshuffle
•New York Sandy
claims face
attorney general
probe
•Allied World Europe
enters marine
liability
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Editorial comment
The year of the decade
for acquisitons
Late Sunday night/early Monday morning it
was announced that Axis Capital and Partner
Re would be combining in “a merger of
equals”. That $11bn deal will take some beating. And it established that 2015 would likely
go down as the year of the decade when it
comes to mergers and acquisitions.
Nearly all events are predictable with hindsight. Albert Benchimol, who will be leading
the combined company, was chief financial
officer at PartnerRe for many years. In 2010
he departed PartnerRe when it became clear
that the top job there would be going to
someone else (Costas Miranthis was named
shortly after). Benchimol was soon appointed
chief financial officer at Axis before stepping
up to the role of chief executive when John
Charman, who had been in charge since Axis
was launched, departed.
PartnerRe was always a favourite for consolidation because it was an outlier in terms
of combined ratio volatility, with a standard
deviation of 18 for its combined ratio (2009
to 2013, figures courtesy Fitch Ratings).
Axis, too, was at the higher end, with an SD
of 12 (where it keeps company with Validus, Everest, Endurance and Aspen). How
will that position the combined company?
Certainly not as low as Berkshire, Ace and
Hannover Re, but, in terms of volatility, probably only slightly higher than the big two of
Munich Re and Swiss Re.
PartnerRe just sneaked into Fitch’s “large”
categorisation, while Axis (which writes considerably more primary as a proportion of its
total business than does PartnerRe) slap bang
in the middle of the “medium” sector.
There are two major factors involved in the
market’s consolidation at the moment. One
is the need for reinsurance, particularly propcat, to expand into primary business, which
has suffered less in terms of premiums. The
second is the need for the non-tier-one players to consolidate, with the aim of becoming
tier-one players.
One reason that this was a deal predictable
with hindsight is that the cultural fit is good.
Benchimol, who will be leading the new
company, has an in-depth knowledge of both
businesses.
A look at the top 10 global reinsurers by
2013 Gross written premiums puts the combined Axis-PartnerRe business at seventh,
ahead of RGA, China Re and Korean Re, but
behind Berkshire Hathaway and Scor.
The significant points here are that Munich
Re and Swiss Re continue to dominate (both
between $30bn and $40bn annual premiums).
There is then a sharp drop to HannoverRe,
Scor, the Lloyd’s market and Hannover Re
(annual GWP of between $10bn and $20bn).
It is into this select band that Axis-PartnerRe
will enter. Does that make it Tier One? It’s
a marginal call. What it does do is move the
company into the S&P 500.
And putting the Lloyd’s market in as a
single entity is, of course, slightly misleading. That is one area where consolidation can
be expected over the next 12 months.
The newly merged firm will have a
significant specialty operation, plus a life,
accident and health that the companies said
was growing. About $2.5bn in premium will
come from specialist insurance, with $1.5bn
in premiums coming from the life, accident
& health division.
With $200m in savings predicted, analysts
will be looking at the duplication of offices
in New York, Zurich, Ireland and, of course,
Bermuda. The two companies have a combined workforce of 2,300.
Axis Capital was formed by Marsh &
McLennan in 2001 in the wake of the 9/11
terrorist attacks. PartnerRe is one of the old
guard, having been formed in 1993 in the
aftermath of hurricane Andrew, which caused
a considerable capital shortage. In 2009 it
bought Paris Re.
Only this month PartnerRe formed PartnerRe Asia, having obtained a licence from
Singapore regulators.
Compared with the XL takeover of Catlin,
which put the latter at a 23.5% premium to
share price, the Axis-PartnerRe deal is nilpremium. Although PartnerRe is the larger
player, the deal appears to be structured so
that Axis Capital (marginally) will be the
dominant player, if only because Benchimol
will be chief executive. And Butt remains on
the board. Meanwhile Miranthis is departing,
with an interim CEO in place at PartnerRe
until the merger is complete.
Analysts and the larger reinsurers have
been emphasising that customers are gravitating towards the Tier One players because
they offer safety and diversity, confidence in
getting paid, and the ability to put together
global cessions in multiple areas. The monoline traditional reinsurer is looking increasingly out-of-date, because in terms of pricing
it simply cannot match cover offered by other
structures. n
Peter Birks, Managing Editor, Reactions
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28 january 2015
|3
top stories
PartnerRe and Axis to merge
< Continued from page 1
new company have also been announced.
1: Emmanuel Clarke: CEO Reinsurance
2: Peter Wilson: CEO Insurance
3: Chris DiSipio: CEO Life, Accident &
Health
4: Jay Nichols: Strategic Business Development and capital solutions
5: Joseph Henry: CFO
6: Bill Babcock: Deputy CFO, Chief Integration Officer
Babcock will become CFO upon
Henry's retirement in July 2016.
The companies said that the deal was
expected to achieve at least $200m in
annual pre-tax cost synergies in the first
18 months, being accretive to earnings
per share and return on equity for both
companies.
The deal is expected to close in H2
2015.
Crédit Suisse is acting as financial
adviser to PartnerRe. Davis Polk &
Wardwell and Appleby Global Services
are legal counsel. Goldman Sachs is acting
as legal adviser to Axis. Simpson Thacher
& Bartlett and Conyers Dill & Pearman
are legal counsel.
PartnerRe and Axis Capital have
released preliminary Q4 numbers to
accompany the announcement of their
planned merger.
2014e ($mn)
Gross premiums written
Net Written Premiums
Loss Ratio
Expense Ratio
Combined Ratio
Oper Earnings
Invested Assets
Total Debt
Shareholders equity
Debt/Capital
Oper. ROE
In the light of the planned merger
between Bermuda's Axis Capital and
PartnerRe, Axis Capital has reported expected Q4 income of "between $117m and
$123m", with Q4 operating income per
diluted common share of between $1.15
and $1.21. Q4 annualized operating return
on average common equity of between
9.0% and 9.5%.
Meanwhile, PartnerRe also released preliminary figures, stating that it expected
Q4 earnings to be between $210m and
$230m, with Q4 diluted earnings per share
of between $4.20 and $4.60. Annualised
return on equity is expected to be between
15.4% and 16.9%.
Axis Capital is releasing its final-year
results on February 3.
PartnerRe is releasing its Q4 and fullyear numbers in February n
PRE
AXS
Pro-forma*
5,636
5,736
62.2%
30.5%
92.7%
687
17,281
1,667
6,173
9.6%
11.7%
4,778
3,997
57.1%
34.6%
91.7%
637
15,012
1,618
5,257
14.4%
11.1%
10,414
9,734
60.1%
30.1%
90.2%
1,498
32,293
3,285
11,429
11.8%
13.3%
Proforma includes $200m pre-tax cost synergies as announced
Source: Morgan Stanley
Micro insurance consortium launched at WEF
< Continued from page 1
decade in currently unserved or under
served emerging markets.
These re/insurance companies taking
part in the MVI are currently evaluating
opportunities in Latin America, Africa and
emerging Asia, with the initial venture set
4
| 28 january 2015
to be launched this year. Joan Lamm-Tennant, global chief
economist and risk strategist at Guy Carpenter, has been appointed to serve as the
MVI’s chief executive (CEO) and will be
based in New York.
Recent reports on last year’s catastrophe losses continue to highlight the vast
gap between global insured losses and
economic losses. In 2014 for example, the US represented the costliest market for insured
losses, despite high profile catastrophes in
developing markets causing more damage
and claiming more lives. This included typhoons in the Philippines and heavy rains
and flooding in India and Pakistan.
Micro-insurance is one possible way
in which to bridge this gap and provide
insurance to the emerging markets.
“The ability to manage and finance
risk is important to the development
of a society. As an industry, we have a
responsibility to be socially relevant,” said
Alexander Moczarski, president and CEO
of Guy Carpenter and chairman of Marsh
& McLennan Companies International.
“The gap between economic and
insured losses continues to be an impediment to the emergence of societies.
“The establishment of the MVI demonstrates our commitment to advance the relevance of insurance in society by addressing the risk needs of the under served.”
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top stories
Severe winter weather
hits early in 2015
Insurers are preparing for the ramifications from storm
Juno which brought severe winter weather to the US on
Monday and Tuesday.
Insurers are bracing themselves for the ramifications of winter storm Juno which has been
wreaking havoc across the North Eastern US.
The early winter weather in 2015 is unlikely
to be welcomed by insurers given the losses
associated with the peril last year.
Winter weather accounted for 15% of insured losses in 2014 somewhat mitigating the
positives of a quiet hurricane season.
“Severe winter weather caused 15% of all
insured auto, home and business catastrophe
losses in the United States in 2014,” said Bob
Hartwig, president of the Insurance Information Institute (III).
“Losses from snow, ice, freezing and
related causes totalled $2.3bn last year, after
averaging about $1.2bn annually over the
previous 20 years. Insured losses caused by
winter weather were $1.9bn in 2013 so the
last two years have been well above what
the insurance industry has traditionally seen
from this type of severe weather,” Hartwig
added.
The Polar Vortex that struck the North
East US between January 5 and 8 last year
hit multiple states with freezing wind, ice
and snow and generated nearly $1.7bn of
the entire winter’s $2.3bn in insured losses,
according to ISO’s Property Claim Services
(PCS), a unit of Verisk Analytics.
The historical losses for winter storms have
been varied and between 1994 and 2013,
winter storm claims accounted for 6.7 percent
of all insured US catastrophe losses, placing
them third behind hurricanes and tropical
storms (40%) and tornadoes (36%) as the costliest natural disasters, according to PCS.
In 2014, however, winter storms ranked as
the second highest peril because of the quiet
hurricane season.
New York's biggest snowstorm on record
was in 2006. Measurements taken in Central
Park showed that 26.9in had accumulated by
the storm's end. The snow fell for 16 hours,
and meteorologists classified the storm as a
nor'easter with winds about 20-30 mph.
On December 26, 2010, a nor'easter
dropped more than 20in of snow on New York
City. Strong winds pushed the falling snow
into drifts that measured up to four feet. Transportation suffered major delays as airports and
rail shut down across the city and Long Island.
With more than 20 inches of snow in Central Park, the blizzard of January 7-8, 1996,
marked the second biggest snowstorm in New
York City history. With winds gusting to more
than 50 miles an hour, the powerful nor'easter
caused widespread power outages, scores
of fatalities and $1 billion in damages from
Washington, D.C. to Boston.
The March 12-14, 1993 superstorm affected
the entire eastern third of the U.S. There was
a major severe weather event in the southeast,
flooding and snow in the Mid-Atlantic states
and blizzard conditions in the northeast. New
York City's Central Park recorded 10.2 inches
of snowfall on March 13. Overall, the nation
incurred more than $3 billion in damages.
Holding the previous record for the biggest
snowstorm in New York City history, the blizzard of 1947 dropped 26.4 inches of snow in
Central Park over two days (December 26-27).
As moisture in the Gulf Stream fed the storm's
energy, the City was paralyzed when the
blizzard barreled its way through, stranding
cars and buses in the streets, halting subway
service, and claiming 77 lives. n
News in brief
Chinese insurers get
junior debt rights
Chinese insurers are to be allowed to sell
bonds in the interbank market in order to
replenish capital levels, Chinese regulators
have ruled.
The central bank said on Thursday January 22 that the rule would strengthen the
financial position of insurers, while also
broadening the Chinese interbank market. As
6
| 28 january 2015
a result of the change, insurers will be able
to sell in the interbank market debt that has
a maturity of at least five years.
The “junior” debt would rank ahead of
equity but behind other bond investors.
Ping An buys Tower Place
Chinese insurer Ping An has bought Tower
Place in London from Deutsche Bank’s asset
and wealth management division for £327m
($490m), the previous owner stated on
Thursday January 22.
Tower Place, which has 385,000 square
feet of floor space, is close to the Tower
of London and to the centre of London’s
insurance district. Its main tenant is Marsh
& McLennan Cos, parent of insurance broker
Marsh and reinsurance broker Guy Carpenter.
Ping An bought the Lloyd’s building in July
2013.
top stories
US insured losses rise in
quiet catastrophe year
Despite the lack of any significant catastrophe in the US in 2014 insured losses climbed 20% from
2013, says new PCS report.
The value of US insured losses increased
by a fifth in 2014 despite the year being a
comparatively quiet year for catastrophes,
figures from Property Claims Services
(PCS) show.
The US experienced $15.4bn of insured
catastrophe losses in 2014 and although, this
was higher than the previous year, it was
still well below the 10 year average.
Frequency grew slightly for North
America, rising to 37 events in 2014 from
35 in the prior year.
Catastrophe activity last year affected 38
states, with Texas remaining the most affected, suffering $2.2bn of losses.
Colorado was the second most affected
state experiencing $1.7bn of losses, followed by Illinois and Pennsylvania, both at
$1.2bn. Verisk subsidiary PCS also noted that
Oklahoma was not among the 10 most affected states of the year, despite historically
suffering from a high frequency and severity
of tornadoes.
Heavy hail storms battered Texas last year
and contributed to most of the catastrophe
losses in the state.
“This year we have had three major
storms one in Dallas, one in Abilene and
one in Denton. The Abilene hail storm was
in the hundreds of millions of dollars and
the hailstorm in Denton was also in the hundreds of millions of dollars,” Mark Hanna,
spokesman for the Insurance Council of
QBE to sell NA agency businesses
Australia-based QBE is to sell its agency business in North America
to Alliant Insurance Services for about $300m (AUD366m), of which
$217m will be upfront in cash. The remainder will be paid via a
performance-based earn-out over the next five years.
The businesses to be sold include Community Association Underwriters, Deep South
and SIU. The deal is expected to close in
February 2015.
QBE chief executive John Neal said
that the move was "another important step
of our capital plan in the sale of the US
agency businesses at a price we consider
attractive for our shareholders".
He added that an important part of the
sale was the long-term agreement into
which QBE had entered with Alliant under
which QBE would retain the underwriting
business provided by the agencies. He said
that QBE was looking forward to continuing to grow its program business.
The deal is expected to close in February
2015.
QBE said last October that it was
exploring options for its US operations,
which have not performed well since
former chief executive Frank O'Halloran
extended the insurer's operations to the US
in 2006. Apart from the impact of drought
claims and hurricane Sandy, there were
legal issues over the pricing of so-called
"force-placed" home insurance, taken out
by financiers but ultimately charged to the
borrower. n
Texas (ICT) told Reactions in December.
“Those were three storms that standout
and they weren’t the only hailstorms to hit
the state of Texas,” he continued.
Although Texas is traditionally more
associated with hurricanes, Hanna said that
hail storms are in fact the primary driver of
property rates in the state.
PCS designated five catastrophe events
in Canada in 2014, with one in the fourth
quarter.
Insured losses from those events reached
about CAN$900m, which made 2014
the quietest catastrophe year since 2010
(CAN$800m). Catastrophe losses fell 72%
year over year.
While that may appear to be a significant drop, 2013 was the most active year
on record for PCS Canada, with more than
CAN$3bn in insured losses from PCS-designated catastrophe events which included
the devastating floods in Alberta in June
2013. n
News in brief
FM Global rated A+, Stable
FM Global has received an “A+” financial
strength rating and “stable” outlook from Standard and Poor’s.
Commercial and industrial property insurer FM
Global has received an ‘A+’ financial strength and
counterparty credit rating with a “stable” outlook,
from Standard & Poor’s (S&P).This first-ever
interactive S&P rating assignment to FM Global
also applies to the company’s affiliates: Affiliated FM Insurance and FM Insurance Company.
S&P indicated the rating reflects its view of
FM Global’s “very strong business risk profile
and strong financial risk profile, based on the
company’s market-leading competitive position
in the large commercial property segment and
extremely strong capital and earnings.” The rating
agency noted that FM Global “works diligently
with its insureds to help foster best-in-class lossprevention plans. “FM Global’s highly regarded
reputation for using its engineering expertise to
assess client risks to help prevent and mitigate
loss gives it a significant commercial advantage
over competitors,” said S&P. 28 january 2015
|7
top stories
News in brief
Wells Fargo implements high
school football programme
Wells Fargo insurance has implemented
an insurance programme with Venice High
School in California to protect athletes
against concussion.
Wells Fargo and Venice high school in
California, has implemented an insurance
programme (The Play it Safe Program) to protect its football players against concussion.
The Centers for Disease Control and Prevention (CDC) estimate more than 38 million
youths aged between five and 18 participate
in organised youth sports in the US.
The CDC also cites concussions as one
of the most commonly reported injuries in
children and adolescents who participate in
sports and recreation activities, with nearly
half a million emergency room visits made
each year by youths treated for traumatic
brain injury.
“The Play It Safe Program will further help
Venice High School in its mission to develop
youth athletes with a valuable concussion
care program,” said John Breckenridge, senior
vice president of Wells Fargo’s student insurance division. “With care and protocol similar
to those afforded to professional athletes, we
can help ensure young athletes safely return
to an activity they enjoy.”
Well Fargo’s student insurance division
designs student insurance solutions and
programme support. Insurance products
are offered through non-bank insurance
agency affiliates of Wells Fargo & Company
and underwritten by unaffiliated insurance
companies.
Aviva to cut 1500 jobs
After announcing its $8.5bn Friends Life takeover, Aviva has warned there could be a 5%
cut to the combined operation’s headcount.
Aviva will cut 1,500 jobs by the end of
2017, the insurer has said.
The cuts amount to 5% of the company’s
31,500-strong workforce.
The news follows the British insurer’s
£5.6bn ($8.5bn) planned acquisition of
Friends Life.
“We appreciate that this news may be disconcerting for employees and we would look
to ensure that any redundancies are kept to a
minimum wherever possible, by using vacancies and natural turnover,” said a statement
from Aviva.
“At this stage, no specific teams, roles
or locations have been identified, as the
proposed transaction has not completed,” the
insurer added.
8
| 28 january 2015
Sharp increase in
US floods forecast
The majority of US coastal areas will be threatened by a
month’s worth or more of flooding every year by 2050, claims
the NOAA in a new study.
By 2050, the majority of US coastal areas
are likely to be threatened by 30 or more
days of flooding each year due to dramatically accelerating impacts from sea level
rise, according to a new study from the National Oceanic and Atmospheric Administration (NOAA), published in the American
Geophysical Union’s online peer-reviewed
journal Earth’s Future.
NOAA scientists established a frequencybased benchmark for what they call “tipping
points,” when so-called nuisance flooding, defined by NOAA’s National Weather
Service as between one to two feet above
local high tide, occurs more than 30 or more
times a year.
These regional tipping points will be
surpassed in the coming decades in areas
with more frequent storms, the report said.
The tipping points will be also be exceeded
in areas where local sea levels rise more
than the global projection of one and half to
four feet.
NOAA tide gauges show the annual rate
of daily floods reaching these levels has
drastically increased – often accelerating
– and are now five to ten times more likely
today than they were 50 years ago.
NOAA found that in 30 to 40 years, even
modest projections of global sea level rise
- 1½ feet by the year 2100 - will increase
instances of daily high tide flooding to a
point requiring an active, and potentially
costly response. By the end of this century,
NOAA’s projections show that there will be
near-daily nuisance flooding in most of the
locations that it reviewed.
“The importance of this research is that
it draws attention to the largely neglected
part of the frequency of these events. This
frequency distribution includes a hazard
level referred to as ‘nuisance’: occasionally
costly to clean up, but never catastrophic or
perhaps newsworthy,” said Earth’s Future editor Michael Ellis.
The scientists base the projections on
NOAA tidal stations where there is a
50-year or greater continuous record. The
study does not include the Miami area, as
the NOAA tide stations in the area were
destroyed by Hurricane Andrew in 1992 and
a continuous 50-year data set for the area
does not exist.
Based on those criteria, the NOAA team
is projecting that Boston; New York City;
Philadelphia; Baltimore; Washington, D.C.;
Norfolk, Virginia; and Wilmington, North
Carolina; all along the Mid-Atlantic coast,
will soon make, or are already being forced
to make, decisions on how to mitigate nuisance floods earlier than planned.
In the Gulf, NOAA forecasts earlier than
anticipated floods for Galveston Bay and
Port Isabel, Texas. Along the Pacific coast
the earlier impacts will be most visible in
the San Diego/La Jolla and San Francisco
Bay areas. Mitigation decisions could
range from retreating further inland to
coastal fortification or to a combination of
“green” infrastructure using both natural
resources such as dunes and wetland, along
with “grey” man-made infrastructure such
as sea walls and redesigned storm water
systems. n
top stories
Guernsey now home to 800 global insurers
The Guernsey Financial Services Commission licensed 85 new international insurers during 2014. The total included eight limited companies,
three Protected Cell Companies (PCCs), 54
PCC cells, five Incorporated Cell Companies
(ICCs) and 15 ICC cells.
The new owners’ originate from diverse
locations, including the UK (35%), Cayman
Islands (29%) and Ireland (13%).
Insurance Linked Securities (45%) dominated the range of business written by Guernsey’s international insurance sector in 2014
which also included insurance lines covering
property (13%), life/health (8%), and After
the Event (ATE) legal expenses (7%).
Dominic Wheatley, Chief Executive of
Guernsey Finance – the promotional agency
for the island’s finance industry, said: “These
figures show that last year was very successful for Guernsey as an international insurance
centre. We continue to see growth in new
entities related to ILS transactions but also a
steady stream of more conventional captive
insurance vehicles.
The latest figures show that there were a
total of 797 international insurers licensed in
Guernsey at the end of 2014, comprising 242
limited companies, 67 PCCs, 436 PCC cells,
12 ICCs and 40 ICC cells. This compares
with a total of 758 international insurers
licensed by the GFSC at the end of December
2013, producing a net growth of 39 entities
during the 12 months.
Kelvin Re, backed by ILS investment manager Credit Suisse Asset Management and
Miller and Willis team
up in London
Brokers Willis Group and Miller Insurance Services have agreed to
form a specialist wholesale broking joint venture, with Willis taking a
majority stake in the Miller partnership.
Miller and Willis are forming a new London
joint venture within the wholesale specialist
broking space.
The agreement will combine the brokers’
wholesale and specialty businesses under the
Miller brand, managed, governed and regulated as a standalone legal entity and separate
Lloyd’s broker.
In return, Willis will take an 85% share in
the partnership and become a corporate member in Miller Insurance Services LLP.
Partners of Miller will retain the remaining
interest in perpetuity to be transferred across
generations of new partners, noted Miller.
A series of wholesale broking units will
transfer from Willis to Miller, while Miller’s
treaty reinsurance, UK corporate client and
financial institutions teams will transfer
across to Willis.
“This transaction positions Miller as a
leading London specialist wholesaler, allowing Willis and Miller to draw on each
other’s professional strengths, and underlines
the deep commitment of both parties to the
London insurance market,” said Dominic
Casserley, Willis Group’s CEO.
Miller issued a press release saying it had
“reached a successful conclusion to the negotiations” with Willis.
“This agreement will accelerate our growth
strategy and enhance our offering to our
clients. It is a unique opportunity to combine
the strengths of two firms for whom client
service is paramount,” said Graham Clarke,
CEO of Miller.
The two brokers expect the deal to conclude, subject to approvals, in the second
quarter of 2015.
managed by Aon, became Guernsey’s first
rated commercial reinsurer in 2014.
Artex Risk Solutions was selected to provide the insurance management services for
the BT Pension Scheme’s longevity risk vehicle BTPS Insurance ICC. Its first transaction
involved the Prudential Insurance Company
of America completing what was believed to
be the largest longevity risk transaction ever,
assuming a quarter of the scheme’s longevity
exposure, thereby hedging around $16 billion
of liabilities.
Towers Watson recently announced that
it will provide its pension clients with direct
access to the reinsurance market through the
use of its Guernsey ICC, Longevity Direct,
managed by Willis. Longevity Direct is
aimed at providing cover through the reinsurance market for liabilities between £1bn and
£3bn. The Merchant Navy Officers Pension
Fund (MNOPF) has subsequently become the
first scheme to utilise this facility. n
News in brief
Axa plans UK cyber add-on
French insurer Axa is planning to offer cyber
“clean-up” insurance as an add-on to home
insurance
French insurer Axa is considering the
introduction of a retail cyber defence policy
in the UK. It already offers such a policy in
France.
Axa’s Nicolas Moreau said that the
policy would be sold as an add-on to house
insurance, and the aim was to help pay for
cleaning up private images published online
rather than to hide information that was
legally available on the web.
Speaking on the fringes of the World
Economic Forum meeting in Davos, Moreau
said that the aim of the policy was to help
clean up individuals’ reputations, but not to
remove news articles.
The Axa product is a far cry from the
commercial cyber policies that insurers have
been more concerned about writing, partly
because the extent of the liability is so hard
to quantify. However, cyber-protection in
personal lines is a step in the direction of
protection against damage that can be inflicted through the internet. Moreau warned
that cyber-attacks on electronic infrastructure such as stock exchanges could have the
same effect on the functioning of a country
as the bombing of a major city.
28 january 2015
|9
top stories
New ABIC chair
issues call to arms
Patrick Tannock, the new chairman of the ABIC, believes Bermuda must stay cost competitive and
have low barriers to entry if it is to remain relevant.
The new chairman of The Association of
Bermuda International Companies (ABIC)
says the domicile must remain cost competitive and have a low barrier of entry, both
financially and for high-quality intellectual
capital, if it is to remain relevant in global
business. Patrick Tannock, the president
of XL Insurance (Bermuda), has replaced
Oil Insurance Ltd’s George Hutchings as
the new chairman of the ABIC. Hutchings
had held the position for the last four years.
Tannock has been member of ABIC’s board
since 2005, and was handed a seat on the
organisation’s executive committee in 2008.
In taking on the role, Tannock said he will
continue the work that Hutchings started,
in particular reinforcing the strong relationships his predecessor created between stakeholders and the Bermudian government. He
takes up the role at a time when Bermuda,
as with many other countries around the
world, continues to feel the fallout from
the economic downturn, with the domicile
experiencing accelerated and unprecedented
change. “The issues we are experiencing
are not unique to Bermuda,” Tannock said.
“We are very much a part of a global village
so in order to remain relevant and respected
as a leading business jurisdiction, we must
ensure that Bermuda is internationally cost
competitive, maintains a low barrier of entry
for financial and high-quality intellectual
capital and continues to identify ways to
enhance our value proposition. This includes
focusing on providing superior services and
execution excellence while remaining user
friendly and solution oriented. “Bermuda
has a great track record of responding to
opportunities and challenges that come from
change. If both Bermudians and internationals work together, I am confident that
despite facing unprecedented challenges,
we will continue to evolve as the jurisdiction of choice.” ABIC represents over 100
companies that are incorporated in Bermuda
but also have international operations. Its
membership is not limited to companies
operating in the re/insurance industry, and
includes businesses operating in the investment management, banking, accounting,
auditing, pharmaceutical and shipping sectors. “At ABIC, our mission is to promote a
sound business environment in Bermuda for
the international business community and to
advocate for balanced government policies
that maintain Bermuda as a well-respected
domicile of choice, while respecting the
aspirations and values of Bermudians,” said
Tannock. “Through the Education Awards,
ABIC continues to lead in offering scholarships to qualified Bermudians with financial
need and supporting studies in areas related
to international business.” n
Aon Benfield buys Swiss portfolio
Reinsurance broker and capital advisor Aon Benfield, a subsidiary of UK-based Aon, had bought the
in-force business portfolio of Switzerland-based Sipex Insurance and Reinsurance Brokers. Sipex
specialises in Continental European marine hull business.
Aon Benfield said that the book would
continue to be managed by the existing
Sipex team, headed by Giorgio Mitolo. That
team will transfer to a newly formed Swiss
branch of Aon Benfield Italy.
The run-off portfolio will be administered
by Aon Benfield Italy, but does not form
part of the acquisition.
Aon Benfield Italy chairman Gianluca
Venturini said that the acquired book would
10
| 28 january 2015
be “highly complementary and accretive
to Aon Benfield’s existing marine portfolio”. He said that the portfolio acquisition,
combined with the new Swiss branch, would
provide Aon Benfield Italy in particular with
“an exciting new platform in the increasingly important specialist marine business
segment”, from which the company planned
to “launch strategic growth initiatives in the
principal continental marine markets”. n
top stories
Indian govt prepares
for new session
Howden lowers
Hyperion IPO
priority
India’s ruling party is preparing for the new parliamentary session
with the aim of passing into law an ordinance on insurance
executed after the closing of the last session.
Hyperion chief executive David
Howden has postponed IPO
plans for the group.
Indian government whips and “floor managers” have been reaching out to opposition
parties ahead of the forthcoming Budget
parliamentary session in the hope of gaining
their backing for bills that need to be passed
to replace the executive ordinances issued
after the close of the winter session. The
Budget session begins on February 23.
Arun Jaitley, who is finance minister in
the ruling coalition and leader of the upper
house the Rajya Sabha, hopes that it has the
support of the Congress opposition when it
comes to pushing the insurance ordinance
through the Upper House.
Jaitley met J Jayalalithaa, head of minority AIADMK party, at the Mamata Banerjee
organised business summit in Kolkata. Government sources are leaking to the Indian
press claims that Congress has indicated that
they will not oppose the bills, but there has
been no indication from the opposition Congress party, officially or unofficially, stating
that this is the case. n
“If you take all the insurance
industry, all the money they
can invest, and if you take the
infrastructure need of this planet
- there is a perfect match,”
Swiss Re CEO calls for
infrastructure assets
An initial public offering (IPO) “isn’t currently on [the] agenda” for Hyperion, the
company’s CEO has said.
David Howden, speaking to London newspaper City AM, confirmed it was still an aim
but would not be happening soon.
Floating the company on the stock market
“clearly isn’t currently on my agenda”, said
Howden.
According to the firm’s recent 2014 results
statement, Hyperion is in “advanced” merger
talks with broking rival RK Harrison.
“The most important things we need to
think about are making successes of the
acquisitions we made last year and the RK
Harrison merger,” said Howden.
“This is a very, very important deal for
us,” he added. “It would create a very unique
business, the biggest independent insurance
intermediary in the world,” he added.
Hyperion bought four other companies in
2014, across its broking and underwriting
businesses, the latter of which, Dual, also
underwent an internal restructuring. n
Swiss Re boss Michel Liès has called for the creation of a special infrastructure asset class to allow
insurers to invest in projects such as roads and bridges.
“If you take all the insurance industry, all
the money they can invest, and if you take
the infrastructure need of this planet - there
is a perfect match,” Liès said in an interview
in Davos, Switzerland. This new asset class
would be an alternative investment opportunity as low interest rates erode earnings from
fixed-income investments. European Commission president, Jean-Claude Juncker, is also
seeking private-sector support for his €315bn
($365bn) investment plan. Making infrastructure investment a specified class would allow
a secondary market where investors who can
invest long term in an asset that is liquid during the time of investment, Liès said. He said
infrastructure investment was a priority of the
Obama administration in the US and Juncker
in Europe. “We should make sure that the rules
of the game go in the same direction as the political appetite,” Liès said. “We are very active
in this area. Davos is a good opportunity to
meet different people and to discuss these kind
of challenges.” Barack Obama has pushed for
higher spending on roads, bridges, railways
and other transportation projects. Last year he
proposed a four-year, $302bn infrastructure
plan, but Congress has ignored his request. n
28 january 2015
| 11
feature
PartnerRe and Axis Capital:
More than just scale
While the merger between
PartnerRe and Axis Capital will
greatly enhance both companies’
positions in the global re/
insurance market, Albert
Benchimol, chief executive to be
of the new combined business,
insists there is more to the deal
than expanding.
The merger between PartnerRe and Axis
Capital may well propel the combined business among the world’s largest re/insurers
but that alone will not ensure the company
has a prosperous future, Albert Benchimol,
chief executive in waiting of the new united
firm, has insisted.
Current conditions in the reinsurance
market can be described as challenging at
best, and there has been considerable talk
recently about the value of scale.
As Nick Frankland, Guy Carpenter’s chief
executive for Europe, the Middle East and
Africa, said earlier in January, “there was
a heavy focus on the top six reinsurers [in
2014], with most clients seeking to maximise
their relationships with these companies”.
Frankland’s comments echo those made
by industry luminaries such as the chairman
and chief executive of Scor, Denis Kessler,
who has been very vocal about the so-called
“tiering” of reinsurers and believes those
companies that are truly diverse in product
and presence around the world will reap the
benefits and emerge from the current industry malaise stronger.
While clients are now looking beyond that
sextet of reinsurers, that group will continue
to garner a lot of attention from cedants and
brokers alike. And there is little doubt the
merger between PartnerRe and Axis Capital
will put the combined business in this group.
However, Benchimol, currently the chief
executive of Axis Capital, told Reactions
that size is not a guarantee of achieving
results.
“Size is of course very good and it gives
some benefit, but size alone without the
right people, without the right products and
without the right service and expertise, does
not necessarily guarantee results.
“To me, what’s fantastic about this merger
12
| 28 january 2015
of equals with PartnerRe is that both companies have outstanding reputations that are
based on very strong underwriting cultures,
outstanding service and great financial
strength. So what this does is combine not
only size, but the key attributes for success
in the insurance and reinsurance fields.”
But there is little getting away from the
fact that prior to the merger, Axis Capital was a $2bn reinsurer sitting between
numbers 10 and 15 in the list of the global
reinsurers. Now, according to Benchimol,
the combined company will sit within the
top five.
“Scale has benefits because you can
do more with it, but that is not enough.
You have to have the right talent, the right
underwriting and risk management, the right
service and the right brand. There are a lot
of large companies that don’t add value to
their clients or shareholders.
“What’s great here is we are taking two
companies that have a very well established
history of creating value for their clients,
brokers, shareholders and their employees.
“We are putting two strong companies
together, so in this merger of equals, we
believe we will have that ideal combination
not only of scale, but of talent, products and
expertise to continue to add an enhanced
portfolio to our clients, brokers, shareholders and to our employees.”
In light of the tough reinsurance trading conditions, primary business has been
regarded as an opportunity to find new
revenue streams. Indeed, the desire to be
a business that operates in both the insurance and reinsurance classes has played at
least some role in other recent merger and
acquisition deals such as RenaissanceRe’s
proposed purchase of Platinum Underwriters for $1.9bn and XL Group’s $2.6bn deal
for Catlin.
Both of those transactions will produce
companies that have significant operations in both the insurance and reinsurance
spaces, as well as global capabilities.
And the same is true for the PartnerRe/
Axis Capital merger.
Aside from the circa-$7bn of reinsurance premium the combined businesses
will have generated between them last year,
further revenues will be derived from the
two respective firms’ primary insurance
operations.
The combined PartnerRe and Axis Capital
will have a significant specialty operation,
plus a life, accident and health operation.
It is thought about $2.5bn in premium will
come from specialty insurance, with another
$1.5bn in premiums coming from the life,
accident & health division.
As outlined in the investor presentation
that accompanied the merger announcement,
in the year to September 30, 2014, PartnerRe generated $5.9bn of gross premium
written, 79% of which came from non-life
reinsurance and the remained from its life
and health business. Axis Capital generated
$4.8bn of GPW during the same period,
47% of which was property and casualty reinsurance, 47% insurance and the remainder
accident and health.
On a pro forma combined basis, that
creates $10.7bn of GPW, 62% of which
is property and casualty reinsurance, 24%
insurance and 14% life, accident and health.
As the business grows, Benchimol expects
the insurance book will increase in proportion to the rest of the lines.
“We’ve been very enthusiastic about our
accident and health operation which has
grown exponentially over the last three
years. Putting together the accident and
health books of PartnerRe with ours, and
then adding to that the overlay of the life
business, we now have three very meaningful businesses - a $2.5bn specialty book, a
$1.5bn life, accident and health book and a
$7bn reinsurance company.
“One of the great things about this transaction is we expect to have improved profitability and capital efficiencies which will
allow us to invest more money in the growth
of our specialty insurance and accident and
health lines.” n
feature
The January reshuffle
For those looking to poach dissatisfied employees from
competing firms, the insurance industry is abuzz with
gossip right now, particularly within the relationshipfocused London market. Victoria Beckett reports
People in the insurance industry are shy
of using the word 'poaching' to describe
the present flurry of individuals and whole
teams moving from one firm to another.
But it has certainly been a prominent factor
among insurance market firms at the turn of
the year, across several levels of seniority.
Alastair Speare-Cole, the boss of JLT Re,
has joined Qatar Re as chief underwriting
officer (CUO). Elsewhere, Canopius, part
of Sompo Japan, recently hired an entire
renewable energy team, five-strong, from
Delta Lloyd in Amsterdam.
The list goes on. In London. Steven Herbert has moved from Cooper Gay to rival
Lloyd’s broker BMS Group, taking the role
of director of its specialty reinsurance division. David Jones, who led the divisional
head of casualty at AmTrust in Lloyd’s
left to join Acappella Syndicate 2014 as
divisional head of casualty, insurance. Jones
is simultaneously joined by class underwriters Laurie Devereaux and Helen Beamish,
also from AmTrust at Lloyd's. Meanwhile.
broker Capsicum Re is to launch a Facultative Reinsurance division under the leadership of Malcolm Payton, recruited from Guy
Carpenter.
“The reason lots of poaching appears to
go on at the start of the year is that the recruitment process usually takes about three
months, with another six months gardening
leave,” says David Flint, a partner at industry headhunter TPD & Associates.
“Nine months is usually the minimum
amount of time it takes to hire someone.
Starting the process in January allows
people receive their bonuses around April,
resign and be in their new job by September
or October.
“This is why there are so many firms
looking for new people in January. I’m
always telling companies they need to start
recruiting sooner because they would normally want someone in the office by the end
of the year,” added Flint.
To add to this process many senior executives will have up to a year’s gardening
leave, or a 12 month non-compete clause,
in their contract. Flint notes that even junior
staff frequently sign non-compete clauses on
their contracts these days.
On the other hand, whatever their contracts may say, the relationship-based nature
of the insurance and reinsurance sector –
and in particular the London market as the
industry’s most face-to-face hub – means
that recruitment among peers and rivals can
still be easy.
“We work in the biggest gossip hall, so if
someone is dissatisfied in their current role,
news spreads fast in places such as Lloyd’s,”
explained Flint. “When a company wants to
grow it will generally identify specific new
product lines or under-performing areas of
its business it wants to improve.
“Buying teams in tends to be easier than
getting your staff to work harder or moving
them into areas they don’t know. However,
things can easily go wrong if companies do
not obey restrictive covenants in employees’
contracts,” he says.
Non-compete clauses can be the most
powerful hold an employer has over its employees, as they have the potential to restrict
severely former employees' activities. “With
restrictive covenants people try to negotiate rather than go legal. The new company
would often speak to the employees about
moving over to them and then go to the
employer and ask to buy the whole business
off them,” says Flint.
In the US, in August 2013 The Wall
Street Journal reported a 60% rise over the
previous decade in the number of departing employees getting sued by their former
companies for breaching their employment
agreements. That figure is across sectors,
not just insurance and reinsurance, but there
are notable precedents within the industry.
Broker Marsh & McLennan took one of
its former employees in Texax, Rex Cook, to
court over breaking his non-compete clause,
and won the case, back in 2011.
In 2006 Willis Group won a preliminary
court order barring five executives who left
the company earlier that year from soliciting
former clients or trying to hire away former
co-workers. The judge ruled that Willis
could be irreparably harmed without the
injunction, as the five executives had held
several discussions with their former clients
at Willis after they left the broker to form a
competing brokerage.
In 2006, AIG filed a complaint against
five former employees of its private equity
arm, AIG Capital Partners, alleging they
violated their non-compete clauses and stole
proprietary information from the company.
“As a recruiter, you never go out intending
to take a team – you aim for an individual.
Otherwise you are encouraging people to
break their covenants,” says Flint. “Staying
somewhere all your life is rare nowadays.
People move around. Even graduates go into
jobs expecting to be on the fast track and if
they are not they will just move. Everyone is
looking for that next opportunity.
“The number of times I’ve spent two
years building a team for somebody and
then they turn around and tell me they are
looking for a new opportunity themselves,”
says Flint. “It likely that we will see more
and more buying of entire businesses this
year, as capital is easy to find in the industry.
Whereas teams who can fight off such stuff
competition are not.” n
28 january 2015
| 13
news round-up
The insurance bill was around $30bn
when Hurricane Sandy – dubbed Superstorm Sandy by US state regulators for
claims reasons – struck in October 2012.
Talanx buys into Asset
Management JV
New York Sandy claims face
attorney general probe
Eric Schneiderman has begun a criminal
investigation into allegations of falsified
survey reports from engineers into the
veracity of property damage claims from
2012’s Hurricane Sandy.
New York’s attorney general is investigating whether insurers made flawed claims
decisions based on falsified reports from
engineers investigating insured damage to
properties caused by Sandy.
In a November ruling, US Judge Gary
Brown reported evidence of “unprincipled
practices” in engineering reports, fearing
such practices had been “widespread.”
Insurers such as Travelers and The Hartford have been asked by attorney general
Eric Schneiderman to hand over claims
documentation.
Hundreds of miles of the US east coast,
including New York, New Jersey and Connecticut suffered $60bn of damage from
Sandy. The storm killed more than 100
people.
Germany’s Talanx has taken a 45% stake in
Alternative Asset Manager Caplantic
Germany-based re/insurance holding
company Talanx has entered a joint venture
deal with NORD/LB banking group and
private bank Bankhaus Lampe, under which
Talanx will take a 45% stake in Germanybased investment service provider Caplantic
Alternative Assets. The price was put at
“single digit millions of euros”.
Talanx said: “The owners want to develop
Caplantic into one of Germany’s leading
service providers for Alternative Asset
Management and Financial Solutions”. It
added that the JV would give Talanx access
RESULTS CALENDAR UPDATE
14
Company
Release of
4th Quarter Results
AIG
12 February 2015
AJ Gallagher
03 February 2015
Allied World
04 February 2015
Arch
10 February 2015
Aspen
05 February 2015
Assurant
12 February 2015
Axis Capital
03 February 2015
Cigna
05 February 2015
Cincinnati
05 February 2015
Everest Re
04 February 2015
Hanover
04 February 2015
Kemper
06 February 2015
| 28 january 2015
to infrastructure loans and other alternative
asset classes of NORD/LB group, while
Caplantic could also be a service provider
for the area of private equity in investment
management in Talanx.
Caplantic’s owners said that, because of
the prevailing low interest rate currently
prevailing, they were “anticipating an increasing shift in investment towards alternative asset classes such as real estate, private
equity and infrastructure investments”.
Talanx noted that it was “already strategically increasing the proportion of these investment classes in order to counteract the declining yields as a result of low interest rates.
Bankhaus Lampe and NORD/LB (Norddeutsche Landesbank) established Caplantic
in 2013. As a result of the Talanx deal,
NORD/LB will retain a 45% stake, while
Bankhaus Lampe will have a 10% stake.
The new ownership structure requires the
approval of the anti-trust regulator.
Lancashire
12 February 2015
MetLife
11 February 2015
MMC
06 February 2015
Montpelier Re
09 February 2015
PartnerRe
04 February 2015
Prudential
04 February 2015
RenaissanceRe
03 February 2015
RGA
02 February 2015
The Hartford
02 February 2015
Towers Watson
05 February 2015
Willis
10 February 2015
WR Berkeley
05 February 2015
XL
02 February 2015
Blue Capital
09 February 2015
C N A
09 February 2015
news round-up
Hiscox 9mo 2014 GWP (£m)
ce
Re
in
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ra
n
ke
t
Lo
nd
on
M
ar
Di
re
ct
As
ia
USA
ns
ey
er
Gu
e
Eu
ro
p
UK
450
400
350
300
250
200
150
100
50
0
n 2014 n 2013
Hiscox’s Kiskadee ups funds
under management
Hiscox’s dedicated ILS subsidiary Kiskadee Investment Managers has increased its
funds under management to over $400m.
A successful renewal has meant that
Hiscox’s specialist insurance linked securities (ILS) subsidiary now has more than
$400m of total assets under management.
That marks an increase of almost $300m
compared with the beginning of last year
when Kiskadee Investment Managers had
$110m of assets under management. “Our
Kiskadee funds combine superior risk
selection with diversified market access
provided by the Hiscox Group,” said Jeremy Pinchin, the chief executive of Hiscox
Re. “We believe this is a truly distinctive offering and so are pleased at the enthusiastic
response from new and existing investors.”
Kiskadee Investment Managers, a wholly
owned subsidiary of specialist insurer
Hiscox, provides third party investors with
the opportunity to access the reinsurance
business that Hiscox writes. At present,
Kiskadee Investment Managers is made up
of two funds, one called Kiskadee Select
and the other Kiskadee Diversified. Both
the Diversified and Select operations are
actively managed open-ended Bermuda domiciled funds. According to Hiscox, these
two funds “offer investors greater capital
efficiency and market access than traditional direct collateralised ILS funds. That
is because they are aligned with Hiscox.
“This structure enables the construction of
investible portfolios from a broad and more
diverse universe of reinsurance and retrocession risks,” the company said.
Capsicum nabs Payton for new
Fac division
Broker Capsicum Re is to launch a Facultative Reinsurance division under the leadership of Malcolm Payton, recruited from
Guy Carpenter.
Malcolm Payton is to run the Facultative
Reinsurance division of specialist reinsurance broker Capsicum Re. He will join the
company later this year.
Payton is moving from broker Guy
Carpenter, where he is currently Head
of Property & Energy for Guy Carpenter
Facultative UK. Previously he oversaw the
International Property Division.
Before that, Payton had been at JLT Re.
Also on his CV is his responsibility for
establishing the London operation of US
broker Swett & Crawford, now part of Cooper Gay, Swett & Crawford.
Capsicum Re chief executive Grahame
Chilton said that Payton was “a great
example of the success and appeal of our
business model. He is one of the leading
Facultative brokers in the market and we
are delighted that he is going to join the
Capsicum team to lead this new class of
business”.
Grahame Chilton
CGSC launches lumber and
building materials MGA
materials sectors.
The programme will be offered through
Swett & Crawford wholesale brokers
directly to retailers in the US. The ICBM
venture offers full-scale underwriting for
general liability, commercial automobile,
for property up to $100m
ICBM also offers employment practices
liability (EPLI), earthquake and workers’
compensation coverage.
The new team will be led by Jamie
Taylor, Bill Osborne & Paul Utrecht. All
three have experience in the lumber and
building materials market which includes
building lumber-specific carriers as well as
developing practices within AIG, Cincinnati
Insurance Company, Liberty Ram, CNA,
Employers Re and USF&G.
“We have been writing since mid-December and our target accounts are wellmaintained, family-owned businesses that
are trusted names in their community,” said
Jamie Taylor, managing director of ICBM.
“These consist of hardware retailers and
distributors, lumber yards, wood/wood
products and building materials distributors
and manufacturers.
“ICBM serves a super-regional, regional,
state-wide and local broker market and
we are excited to join the CGSC North
America team including the Swett & Crawford wholesale broker team.”
AirAsia claims fully reinsured –
Malay insurer Tune
Claims from the AirAsia Indonesia QZ8501
disaster are fully covered by reinsurance,
according to Malay insurer Tune Insurance.
Tune Insurance, a Malaysian insurer
exposed to the AirAsia Indonesia QZ8501
crash, says claims from the disaster are covered in full by its excess of loss reinsurance.
The flight crashed into the Java Sea on
December 28, flying from Surabaya in
Indonesia to Singapore, with 162 people
on aboard. Investigators are still retrieving
wreckage and those killed in the disaster.
The Malay personal accident and travel
insurance firm did not elaborate on the
claims involved.
The firm is known to be expanding via
a number of tie ups with airlines and other
insurance business in the Middle East and
Thailand.
Insurance broker CGSC North America has
launched ICBM, a new MGA designed at
serving the lumber and building materials
markets.
Cooper Gay Swett & Crawford (CGSC)
North America has launched the Insurance
Center for Building Materials (ICBM), a
new managing general agent (MGA) offering coverage to the lumber and building
28 january 2015
| 15
news round-up
Jay Fishman
Travelers profits up in 2014
Insurance group Travelers saw profits rise
by over 5% in the Q4 of 2014 as underwriting gains rose and natural disasters fell; full
year profits rose 1% year on year.
Travelers increased its profits in the final
quarter of 2014 on the back of improved
underwriting gains and low levels of natural
catastrophes.
The insurer’s net income rose by over 5%
in Q4 of 2014 to almost $1.04bn compared
with $988m in the same period the year
before.
It generated profit of $3.69bn for all
of 2014 compared with $3.67bn the year
before; a rise of around 1%.
Travelers’ fourth quarter combined ratio
improved 2.7 percentage points to 85% due
to higher net favourable prior year reserve
development, an improved underlying combined ratio, and lower catastrophe losses.
Its full year combined ratio improved by
one percentage point to 89.9% primarily
due to the benefits of earned pricing that
exceeded loss cost trends and a reduction in
the estimated liability for state assessments.
Travelers said that net favourable prior
year reserve development occurred in all
business segments. It added that catastrophe
losses were primarily because of wind, hail
and winter storms in several regions in the
US.
The insurer stated that its positive results
were the consequence of a proactive strategy to asses business on a class by class
basis.
“For the full year, all our business seg-
16
| 28 january 2015
ments performed very well,” said Jay Fishman, chairman and chief executive (CEO)
of The Travelers Companies.
“Business and international insurance
profitability was very strong, with a combined ratio of 93.1% and operating income
of over $2.3bn.
“We remain very pleased with, and intend
to continue, our proactive, account by account, class by class pricing strategy.
Fishman’s strategy of targeting less profitable lines for price increases appears to be
paying off, and it will be interesting to see
whether Travelers’ performance is reflective
of the industry as a whole as insurers report
on their results over the next few weeks.
Rise of drones could have
insurance implications
The proliferation of the use of drones
presents a number of legal issues that could
have ramifications for the insurance industry says a report released by Swiss Re.
The increasing use of drones over the
next 10 years has a number of legal ramifications that could affect the insurance
industry, says a report released by Swiss Re
this week.
The report notes that an estimated $89bn
will be spent on drones in the next 10 years,
with $8.2bn of that on commercial and
civilian drones.
As the proliferation of these drones increases, such as with the commercial use of
drones to deliver packages and the number
of consumer drones being purchased as
gifts, so too do legal issues and problems.
The report lists privacy concerns, physical damage and bodily injury in cases of a
drone crash as the main legal problems that
may arise.
It also notes that the FAA and industry
groups have launched a safety awareness
campaign to help clarify the laws and regulations around drone use.
It advises underwriters to consider potential aviation liability, workers’ compensation, directors’ and officers’ liability and
the feasibility of writing stand-alone drone
liability insurance policies when examining
this risk.
“Underwriting drones is a very new
undertaking for insurance companies,” says
the report.
“Asking the right questions, gathering
key information and looking closely at the
use of this new technology will be critical
to properly assessing and underwriting the
risk.
“In the near future, as regulation of drone
use becomes clearer and insurers become
more comfortable with this unfamiliar
territory, it’s expected that the capacity to
underwrite drone liability will increase.”
Former boss takes RSA to court
in Ireland
The former chief executive of RSA in Ireland has launched a legal challenge against
his former employer.
Philip Smith was suspended in November 2013, along with chief financial officer
Rory O’Connor and claims director Peter
Burke.
The action followed an internal audit
investigation into financial and claims activities within the firm’s Irish subsidiary.
RSA subsequently revealed £200m in
losses within its Irish arm for the fourth
quarter of 2013 – £72m from claims and
finance irregularities, plus a £128m top
up after a reserve review – necessitating a
capital injection by the group to restore the
business’s solvency capital ratio.
Smith resigned in November 2013 without a severance payment.
Martin Scicluna, RSA’s former executive
chairman, attributed the irregularities to a
“deliberate collaboration between a small
number of executives there”.
news round-up
Korean Dongbu’s
ownership in question
Scor retrocedes via Atlas IX
Dongbu Group could have new owners,
as the chairman’s shares are now being
used as collateral to the insurer’s banking
creditors.
Korean insurer Dongbu’s chairman Kim
Jun-ki faces a potential loss of control of
his family firm, with around 90% of the
shares controlled by him and his children
used as collateral on banking loans.
Dongbu is one of Korea’s biggest
conglomerates, with businesses within the
steel, insurance and information technology sectors. The company increased the size
of its debts since the 2008 financial crisis.
Korean site Chaebul.com said that
Kim, his son Nam-ho and his daughter
Joo-won provided 90.08 percent of their
shares in the insurer as collateral for loans
from lenders including Hana Bank, Korea
Exchange Bank and Korea Development
Bank.
The chairman’s family owns 26% of
the insurer’s shares, valued at around
KRW900m ($830m), according to the
Korean site.
If the share price falls below the value of
the company’s debts, creditors could sell
the shares seized as collateral.
French reinsurer Scor is to retrocede some of
its US named storm risk, US earthquake risk
and Canadian earthquake risk through Irelanddomiciled Atlas IX Capital series 2015-1.
This is a shift of direction for Atlas IX,
which in 2013 issued a mortality catastrophe bond.
Atlas IX 2015-1 will protect Scor Global
P&C to the tune of at least $150m over a
four-year period. Longer periods are becoming more popular with cedants because
they often have a “variable rest”, permitting
the cedant to increase the risk of attachment
in return for an increase in the coupon.
It is reported that the single-tranche issue
will use weighted industry losses, as measured by PCS. The named storm coverage
offers protection in 29 states, plus Puerto
Rico and Washington DC. The earthquake
cover is North America-wide.
The initial attachment is a fraction over
4%, with an exhaustion chance of just under
3% and an expected loss of just under 3.5%.
The initial coupon guidance is just above
the 2x range at around 7.5%.
Aon Benfield Securities is acting as bookrunner and structuring agent, while AIR
Worldwide is the risk modeller. PCS will be
used as loss measurement calculator.
Scor by sector H1 2014 GWP em (includes Generali US life purchase)
3500
3000
2500
2000
1500
1000
500
0
Global P&C
Global Life
n 2014 n 2013
Going, going, gone
The Hotel de Paris, focal point of the
Rendez-Vous de Septembre in Monte Carlo,
is auctioning off much of its interior.
Reinsurance top brass attending the RendezVous de Septembre are reportedly cheesed off
that the Hotel de Paris is closed for renovation,
writes Garry Booth. But there’s consolation
because next week they have the opportunity
to buy a souvenir from the glory days of the
old place: the hotel’s furniture, fabrics and dinnerware is being sold off at auction by owner
Société des Bains de Mer.
A focal and vocal point of the annual
reinsurance meeting, the Hotel de Paris’
belle epoque lobby, Bar Americain and its
luxurious suites have been a meeting place
for top industry executives for over half a
century.
Now 10,000 items have been collected
together from its 138 rooms and suites,
two restaurants, the lobby and garden to go
under the hammer next week. The items
range from the wool and silk Persian rug
that adorned the lobby (est €10,000-20,000)
to monographed his and her bathrobes
(€300-500).
Several of the pieces for sale are from
the top floor Sir Winston Churchill suite,
favoured by former Lloyd’s chairman Lord
Levene. An easel and palette used by Sir
Winston during his lengthy stays in the
hotel is up for grabs along with a copy of
one of his paintings (€500-€700).
For wealthy brokers with fond memories
of doing deals over a cocktail or two, all the
bar furniture is being auctioned, as is the
Yamaha piano (€4,000-€6,000).
Underwriters of a superstitious bent need
not worry about losing their favourite charm
- the statue of a brass horse with rider that
stands in the entrance. It isn’t included in
the catalogue (from auction house Artcurial) so the tradition of rubbing the horse’s
knee for luck will continue after the hotel
re-opens in September 2018.
28 january 2015
| 17
news round-up
methodologies have in the past made it difficult to assess earthquake risks.
“The OpenQuake platform is a milestone
on the road to a better understanding of
the risks, which will make it easier to be
prepared for disasters and to offer insurance
solutions in countries where there has been
virtually no cover for earthquake risks.”
Several hundred scientists from around
the world worked together to produce the
platform, which contains national and
worldwide data on vulnerability and exposure, making it possible to predict the extent
of possible losses. GEM is sponsored by 14
international companies, including several
insurers and reinsurers, and numerous national and international organisations such
as the OECD and UNESCO.
The aim of GEM is to increase risk
awareness by providing assessments of the
earthquake risks, thereby enabling prevention to be improved.
Catlin to issue new Galileo cat
bond
Catlin has returned to the catastrophe bond
market with Galileo Re 2015-1, a threeyear industry-loss indexed bond currently
sized at $200m. GC Securities is structuring
agent and bookrunner, while AIR Worldwide is providing the risk modelling and
loss calculation. The bond will mature at
the end of 2017.
The perils covered are named US storms,
US earthquake, Canadian earthquake and
European windstorm. These are the same
perils as were covered in Galileo Re 2013,
covering all US states for quake and states
vulnerable to Atlantic hurricanes, including
some inland states where a degraded storm
could still have an impact.
The European windstorm cover is for the
British Isles, Germany, the Benelux countries, France, Switzerland and Scandinavia.
Galileo Re has a couple of unusual
characteristics. Its expected loss is relatively high, at more than 15%%, but there
is a wide gap of more than $300m between
attachment and exhaustion, meaning that
the likelihood of total loss is considerably
lower, at less than 4% and within what
might be defined as “normal” cat loss
expectancy range. The initial expected loss
is just under 8%.
That relatively high probability of attachment is said to be reflected in the coupon
being offered, at 13.5% to 14%. As such the
bond is thought likely to appeal to either
large investors in the cat bond sector who
already have a spread of investments, or to
those investors deliberately seeking high
return for relatively high risk.
The coupon is just under 2x expected
18
| 28 january 2015
loss, in line with recent averages, but new
territory for such a high-risk offering.
Catlin has recently announced a merger
deal with XL Group, meaning that most of
the benefits of this cession will accrue to
the enlarged XL Group.
Ahmed sees decline in rate of
reinsurance pricing fall
Global earthquake model
unveiled
GEM’s new OpenQuake cat model platform is designed to be freely accessible to
authorities, organisations, scientists and
companies.
The Global Earthquake Model (GEM)
community initiative has unveiled its OpenQuake platform, a model framework for
estimating exposure to earthquakes.
The OpenQuake platform will be freely
accessible to authorities, organisations, scientists and companies, and is to be extended
to all countries by the addition of more data
and models.
Munich Re was a founding sponsor of the
GEM and one of the main supporters of the
project.
Board member Torsten Jeworrek said,
“In emerging and developing countries
in particular, inadequate data and varying
Amer Ahmed
Allianz Re boss Amer Ahmed thinks that in
2015 there will be a decline in the rate of
reinsurance pricing falls.
There is likely to be a slowing in the rate
of decline of reinsurance pricing in the
coming year, according to Amer Ahmed,
head of Allianz’s reinsurance division Allianz Re. Speaking in Munich, he said that
“our assessments show that rates in some
parts of the market are reaching a level
where they don’t seem sustainable and
don’t justify the risk reward”.
He added that at the January renewals it
was necessary to re-price some programmes
in order to stop reinsurers “walking away”,
and that this showed that “we are reaching
a point where economics prevent further
significant price reductions”.
Ahmed felt that the July renewals would
be the most interesting ones this year because it focused on the US. Ahmed said that
if, “contrary to expectations, rates continue
to fall significantly this year, we would consider buying more reinsurance than we did
in the recent past and likely sell less”.
Allianz Re gets more than 80% of its
business from other Allianz units.
news round-up
it was in the midst of negotiations that
would affect its shareholding structure. Alibaba said that it did not comment on market
speculation. Alibaba is already invested in
China’s insurance market. The founders of
Alibaba and Tencent Holdings were among
a consortium of investors who purchased
stakes in Ping An Insurance Group Co of
China in a HK$36.5bn ($4.7bn) deal in
December 2014.New China Life Insurance has a market capitalisation of $24bn
and provides life insurance services and
products.
BoE will not ramp insurer
capital requirements
The Bank of England’s Prudential Regulation Authority will not use the introduction of Solvency II capital requirements to
ramp up its own capital rules, according to
the BoE’s executive director for insurance
supervision.
The Prudential Regulation Authority
(PRA) is not planning to use Solvency II
regulations, which come into effect at the
beginning of 2016, to increase capital requirements “across the board” for insurers,
according to Paul Fisher, Bank of England
executive director for insurance supervision. Speaking at a conference in London.
Fisher said that “the PRA believes the UK
industry is in a good position”, adding that
“we can’t and won’t gold-plate”.
Fisher felt that the UK insurance market
was in roughly the right place when it
came to capital levels, and that the overall
requirement was likely to go down once
Solvency II was fully implemented.
He thought that the new rules would be
more challenging for the rest of Europe
because insurers there would have to raise
their capital levels to close the gap with the
UK.
The Bank of England’s PRA will have
to approve some 40 internal models when
the Solvency II regulations come into force,
and Fisher said that the agency would focus
on the internal models of key insurers first.
China’s Alibaba may buy New
China Life shares
China’s Alibaba Group Holding, the world’s
biggest e-commerce company, is reportedly
planning to buy shares in New China Life
Insurance Co. Central Huijin Investment
Ltd, the Chinese government’s investment
arm and the insurer’s largest shareholder,
plans to sell some of its stake to Alibaba,
Shanghai Securities News reported, without
giving any details on the size of the deal.
Central Huijin currently owns 31.34% of
the state-run insurer, according the Shanghai paper. New China Life Insurance asked
for a trading suspension on Jan. 19, saying
AIG acquires Laya Healthcare
AIG has announced the acquisition of Laya
Healthcare, an Irish health insurance provider. The transaction is expected to close
in the first half of 2015, subject to regulatory approvals.
Laya Healthcare was initially the Irish
arm of Bupa, but the UK-based company
quit the Irish market after claiming that
the Irish government’s Risk Equalisation
Scheme made its business unviable. It was
bought by Quinn Insurance, which later fell
into administration, before being rebranded
as Laya Healthcare in May 2012.
Laya has nearly 500,000 customers. It
employs 450 people, mainly in Cork, and
serves more than 23% of the Irish private
health market. The company also offers life, dental, and
travel insurance, as well as health and wellness coverage. “Laya Healthcare’s experienced management team and its success
focusing on consumers in the healthcare
space strengthen our commitment to selectively expanding healthcare solutions,” said
Kevin Hogan, AIG’s chief executive officer
of AIG Consumer Insurance. UK Q414 car insurance
premiums up 0.2%
UK car insurance premiums rose 0.2% in
2014’s fourth quarter, the AA has announced, making it the second consecutive
quarterly rise after three years of declining
prices.
Rising personal injury claims were one
of the main reasons for rising prices, the car
recovery service, The AA, said.
The average quote for an annual comprehensive car insurance policy rose 0.2% to
£540.26 ($818), the AA stated.
Despite the quarterly rises, premiums are
still down 10% year on year.
Rising personal injury claims meant the
decline in prices was unsustainable, according to Janet Connor, managing director of
AA Insurance.
She said the rising prices could rise 10%
this year and that the underlying trend was
upward.
Car insurance premiums have been
dropped to adjust to UK government
reforms that came into effect in April 2013.
The reforms were created to cut fraudulent
and exaggerated claims, particularly whiplash injuries.
Insurers such as Admiral and Direct
Line’s share prices have risen 8% and 3%
respectively in the past 10 days, according
to Reuters. A rival price index from Towers
Watson showed a 2% rise in car insurance
prices in the fourth quarter, Reuters said.
Starr launches umbrella policy
for small businesses
Hank Greenberg’s Starr Companies has
launched a new umbrella commercial insurance policy targeting small businesses.
The policy is designed to complement
Starr’s Business Owners Policy (BOP) and
provides policy limits up to $5m, in $1m
increments.
“At Starr, we are focused on developing
insurance solutions that meet the needs
of small businesses. Many of our existing
clients and prospects require higher limits
of coverage to address their growing businesses. This new product furthers Starr’s
commitment to this segment,” said Jim
Vendetti, executive vice president & chief
underwriting officer, Starr Indemnity & Liability Company.
Starr said that the new policy will be the
first of many coverage extensions to the
BOP policy that will be introduced in the
coming months.
In its announcement Starr, defined smallsized enterprises as organisations with up to
$15m in annual sales and up to 50 employees.
The launch of Starr’s new policy follows
an announcement last October that the
company was releasing a new cyber insurance product specifically targeting security
and privacy liability. That product offers
coverage for both first and third party costs
related to a cyber breach, including network
security and privacy liability, data breach
notification and credit monitoring, forensics
and investigations, business interruption,
data recovery and repair, regulatory fines
and penalties and extortion threats. n
Maurice “Hank” Greenberg
28 january 2015
| 19
people moves
Tooker departs
Gen Re
Berkshire Hathaway's Gen Re has
promoted Robert M
Jones and Carole M
Ferrero to lead direct
Morris “Mo” Tooker
sales of property
casualty coverage, following the departure
of Morris (Mo) Tooker, previously president
of Gen Re.
Jones will lead the marketing side, while
Ferrero will be global chief underwriting
officer.
Gen Re chief executive Tad Montross
said that Ken Lundgren had been promoted
to vice-chairman, while Martin Hacala
would take over some of the positions
previously occupied by Jones, including
president and CEO of E&S lines business
General Star Management Co and alternative risks operation Genesis Management &
Insurance Services.
Tooker had been with Gen Re for 23
years, mainly in global property facultative, but with a period from 2012 to March
2014 as the head of direct treaty business
globally. Willis reshuffles China
management team
Willis, in its bid to become the biggest
broker in the emerging market of China,
has made a series of promotions within its
office in the country.
Mitchell Ma has been named chairman
of Willis China in the most high profile of
a series of senior management changes the
company has made in its bid to become the
country’s leading broker. It brings to an
end Ma’s 11 year stint as the chief executive of Willis China, a position he took up
when the broker made its first foray into
the country back in 2004. His new position
means he has responsibility for growing
and developing Willis’ business in China
with the aim of becoming the biggest
broker in the country. Despite the growth
of its economy slowing down in recent
years, China continues to be seen as one
of the great hopes for re/insurance firms
around the world. Market penetration in the
country has vast potential, and brokers and
re/insurers alike are keen to gain a foothold in the market so they are in a position
to take advantage of the market’s growth
when it occurs. In 2013, combined life and
non-life premium volume in China totalled
almost $278bn, an increase of close-to 13%
compared with the previous year, figures
from Swiss Re’s World Insurance in 2013
report show. At the end of 2012, China was
home to more than 400 insurance brokers
which between them placed some €5.13bn
20
| 28 january 2015
of non-life premium. Local brokers for
some of China’s state owned re/insurers
dominate the market, although the large
global brokers such as Aon, Marsh, JLT
and indeed Willis all have operations in the
country as well. Willis itself has a network
of 22 offices in China, close-to 400 staff
and the company is keen to further expand
its presence in the country. Ma’s promotion
to chairman is only one aspect of Willis
reshuffling its operations in China, with
Lincoln Pan, formerly executive director of
Willis Hong Kong, promoted to become the
broker’s new chief executive in the country.
Pan will look after the day-to-day management of the operations’ work with Ma and
Wise Xu on Willis China’s future strategy
and business development. Pan made the
move to Willis a year ago, having previously been with Japanese private equity fund
Advantage Partners. With that firm, he was
a principal, a role which gave him oversight
for non-Japan buyout investments. Xu,
who is one of the founding members Willis
China, has been handed the title of deputy
chief executive at the unit. This position
gives Xu responsibility for the management
of various specialist business units, placement and the Beijing operations. “This is a
first-rate team that will take us to the next
level in this hugely important market,” said
Adam Garrard, Willis Asia Regional’s chief
executive. “We have a well-established
presence in China with an unmatched office
footprint and a diverse range of clients. The
business is entering an exciting new phase
of growth and these changes broaden and
strengthen our leadership base, combining
optimal operational management with a
bold drive for new business and growth.”
Respects paid to Third Point Re
senior underwriter
Bryan M. Bumsted, senior underwriter at
Third Point Re, passed away on January 11,
2015 at the age of 37 after battling kidney
cancer.
He joined Third Point Re in 2012 as the
senior underwriter for the Third Point Cat
Fund following earlier positions in reinsurance and financial services.
Bumsted first joined the industry at Everest Reinsurance in New Jersey as a property
underwriter. He relocated to Bermuda to
join Lancashire Insurance in 2006, focusing
on retrocessional reinsurance and, in 2010,
he helped to establish Q Re Bermuda Advisors, where he was a partner and Underwriting Advisor.
"As well as a successful business executive, Bryan will be remembered as an amazing family man who was wholly devoted
to his wife and two young daughters," said
Third Point.
"Bryan was a loving husband, father, son,
brother and uncle. His enthusiasm, humour
and integrity will be missed dearly by his
family, friends and colleagues alike."
Allied World
Europe enters
marine liability
Allied World Europe
is to enter the marine
liability market,
which will be an
Pene Reuben
addition to the company’s current marine cargo offering. Pene
Reuben, Assistant Vice President, Marine
liability, has been appointed to develop and
manage the product line
Allied World Europe is to enter the
marine liability market, which will be an
addition to the company’s current marine
cargo offering. Pene Reuben, Assistant Vice
President, Marine Liability, has been appointed to develop and manage the product
line. Bart Grefe, Vice President, Marine, Allied World Global Markets, said “that "our
goal has always been to offer a comprehensive marine product suite, adding additional
classes to expand our primary capabilities".
Prior to joining Allied World, Reuben
was Senior Marine Liability Underwriter at
Royal & Sun Alliance and Deputy Underwriter at The Shipowners Mutual.
RFIB hires medical
reinsurance Middle East head
RFIB Group has hired Wolfgang Petz
as head of medical reinsurance for the
Middle East with immediate effect. Petz
will report to Martin Pyrke, deputy senior
executive officer in RFIB’s Dubai office.
Wolfgang brings over 25 years’ of medical
insurance and reinsurance experience to
RFIB and has worked for over a decade
in senior positions in the Middle East. He
joins from Munich Health, Munich Re’s
global medical reinsurance arm. “Wolfgang has built an exceptional reputation
in the Middle East based on his expertise,
market knowledge and a focus on providing innovative reinsurance solutions,”
Jonathan Turnbull, chief executive officer
of RFIB said. “The Middle East represents
an area of tremendous growth potential
and we have the team in place to support
our clients and partners and to become the
broking partner of choice for specialist
insurance products in the region. “Medical
business accounts for about 30% of insurance premiums in the region and Wolfgang
is the ideal person to develop medical
reinsurance programmes for our growing
number of clients in the Middle East. I am
delighted to welcome him to the team,”
said Turnbull. people moves
Travis Bethune
BHSI makes San Francisco
appointment
Former Fireman’s Fund executive Travis
Bethune has joined Berkshire Hathaway
Specialty Insurance (BHSI) as head of its
customer and broker engagement operation
in San Francisco.
He has over 20 years of experience in the
insurance industry and prior to joining Fireman’s Fund he held various appointments
at Chubb including marketing manager
for Northern California. He was also an
underwriting manager at Chubb Specialty
Insurance.
“Travis will lead our efforts to drive
growth strategies and deepen relationships
with our customers and brokers in the Western United States,” said Lori Spoon Rafkin,
senior vice president, customer & broking
engagement at BHSI.
“With his extensive industry experience
and strong market relationships, Travis is
an excellent addition to our team and to our
efforts to forge ever stronger relationships
in the marketplace.”
The appointment is the second announced
by the specialty insurer this month.
Bethune’s appointment follows the appointment of environmental underwriter
Chuck Hasselback who joins BHSI’s Boston team.
Lloyd’s appoints rep in Australia
Lloyd’s has appointed Christopher Mackinnon as general representative for Australia.
He takes up the role for the London insurance market from his former position as
CEO of Gow-Gates Insurance Brokers.
Mackinnon replaces Adrian Humphries in
the job, who left to join Steadfast in 2014.
Lloyd’s said he will be responsible for
developing the insurance market's presence
in Australia, liaising with industry figures
and regulators.
Mackinnon has previously worked at
Aon, AJ Gallagher, Marsh and Bowring,
based in Australia and in Europe.
“Australia is an important market for
Lloyd’s, and we've built excellent relationships with brokers and cover-holders over
the years,” said Vincent Vandendael, director of global markets at Lloyd’s.
“Chris has a strong background in insurance and established relationships in the
industry and will be an asset to the team.”
Mackinnon starts at Lloyd’s in February.
Skuld appoints commercial P&I
head
Skuld has promoted Gregory Thomas to
executive vice president for commercial
protection and indemnity (P&I). He will
also join the management board.
Thomas, who
joined Skuld in
2008, will assume
overall responsibility
for Skuld’s operations in the offshore,
fixed premium, and
Gregory Thomas
yacht markets.
“This is a very exciting opportunity to
capitalise on all of the great work that Skuld
has done these past years in developing
its appetite for commercial P&I; the yacht
portfolio and the fixed portfolio have been
great additions to the Skuld range of products and the aim from our side is to be the
very best provider of cover,” said Thomas.
While the role is global, Thomas will be
based in Norway and will divide his time
between Oslo and London.
The appointment takes effect on February
15, the same day that Ståle Hansen completes his transition to CEO, taking over
from Douglas Jacobsohn.
Kristian Løberg has been appointed CFO;
he is currently senior vice president, head
of corporate accounts in Skuld.
Løberg joined Skuld in October 2013,
having previously been a senior manager at
Deloitte.
Following the appointment of Thomas
and Løberg, from February 15 the Skuld
management board will comprise:
• Ståle Hansen, President and CEO
• Trude Husebø, EVP Communication and
Organisation
• Claes Lindh, EVP Marketing • Lars Dueled, EVP P&I Operations
• Keith Parker, EVP UK Operations
• Greg Thomas, EVP Commercial P&I
• Kristian Løberg, EVP CFO
RMS appoints Isaacson CTO
Catastrophe modeller RMS has named Cory
Isaacson as its new chief technology officer
(CTO), a role which will see him lead the
development of the company’s flagship
product RMS(one). Isaacson was most
recently the founder and chief executive of
data analytics software developer CodeFutures Corporation, a business that has
worked closely with RMS in designing the
RMS(one) platform. Having joined RMS,
he will report into the modeller’s chief
executive, Hemant Shah. “Cory has more
than 20 years’ experience with advanced
software architectures, is recognised as
one of the brightest innovators in the field
of big data and analytic computing, and
has a track record of building successful
systems,” said Shah, who is also RMS’ cofounder. As RMS’ new CTO, Isaacson will
be responsible for the integrated architecture of RMS(one), as well as leading the
platform’s development programme. In
28 january 2015
| 21
people moves
addition to the arrival of Isaacson, Chandler Hoisington will also join RMS as vice
president of engineering. Paul Winsberg is
another who will be making the move to
RMS, having been handed the position of
senior vice president for software development.
Liberty Specialty Markets hires
CRO
Liberty Specialty Markets (LSM), part
of Liberty Mutual Insurance Group, has
appointed Elizabeth Fullerton-Rome to
the newly-created role of chief risk officer.
Reporting to Nick Metcalf, president and
group managing director, Fullerton-Rome
takes responsibility for LSM’s Risk Management and Compliance functions. She
will also sit on LSM’s executive committee.
Novae hires AIG’s James Creasy
Novae has appointed James Creasy as
class underwriter of the cyber division. He
reports to Dan Trueman, head of cyber.
James was previously senior underwriter of
financial lines at AIG cat excess liability,
where he was responsible for the professional indemnity and cyber book. Prior to
this he spent three years at WR Berkley Insurance as a Professional Indemnity Underwriter. He also held roles at Berkley Re in
Australia and Admiral Insurance Company
in the USA. “Cyber is a rapidly growing
area and Novae has been at the forefront
Cory Isaacson
of the market in developing a specialism
for this class of business. I am looking
forward to working with Dan and the team,”
said Creasy. Jo Butcher, head of casualty
at Novae, said: “Novae launched its cyber
division at the beginning of 2014 and in just
over a year we have seen significant growth
in this niche and complex class, as awareness of cyber risks is increasing. “We need
talented underwriters like James to help us
take advantage of these opportunities; his
experience and relationships in the market
will play an important role in helping us
expand our offering.” n
www.reactionsnet.com
22
| 28 january 2015
James Creasy
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