Roundup of the weekly news and developments from the global insurance market with stories from Swiss Re, XL Catlin, Intesa and more
Swiss Re and XL Catlin to launch India branch offices
Swiss Re and XL Catlin have announced they have been granted regulatory approval to open branches in India, following the government’s move last year to open its market to foreign insurers and reinsurers. XL Catlin’s approval means it will open an onshore reinsurance branch of its XL Insurance Company in Mumbai. The branch will provide treaty and facultative reinsurance and it will be open for business in time for the 1 April renewal period. Joseph Augustine will serve as branch CEO. XL Catlin CEO Mike McGavick said of the Indian market that it was “evolving and developing at a staggering pace, a trend that represents huge opportunity for reinsurance companies who understand the local market and have a global track record in delivery.” XL has had service operations in India since 2004, when it opened its first offices in Gurgaon, later adding offices in Bengaluru. Swiss Re also gained approval for a branch in Mumbai. With a composite branch license in hand, the reinsurer plans to offer non-life and life and health reinsurance products to clients and brokers in India. Jayne Plunkett, Swiss Re’s chief executive officer reinsurance Asia, said that the new operation serves as the reinsurer’s “commitment and investment in India’s long term future.” Kalpana Sampat, managing director of Swiss Re Services India Private Ltd., will lead the new Swiss Re India branch as its CEO.
Intesa confirms possible bid for Generali
Intesa Sanpaolo, Italy’s biggest bank by market value, has announced a possible bid for Generali, Italy’s largest insurer. Intesa Sanpaolo said in a statement that the bank “is interested in industrial growth in the areas of asset management, private banking and insurance in synergy with its banking networks, including through possible international partnerships. These opportunities, including possible industrial combinations with Assicurazioni Generali, are currently being examined by the bank’s management.” Generali shares were 2.5% up this week while Intesa shares fell 3%. A merger of Intesa and Generali would form an internationally significant financial institution with a market value of about €60bn. Generali aquired voting rights worth 3.01% in Intesa Sanpaolo in an attempt to block a hostile bid under Italian takeover law. Generali is due to hold a board meeting in Milan on Wednesday, while Intesa is due to hold a board meeting in Milan on Friday.
Neil Stevens departs Sciemus
Neil Stevens, head of space risk at Sciemus, has left the company after spending 18 months at the data analytics and underwriting management firm. Stevens joined Sciemus in October 2015 having previously held the position of director of space underwriting at Pembroke Managing Agency, a position he held for two years. Prior to joining Pembroke, Stevens served at Atrium Underwriters for four years as a space underwriter and legal counsel. Sciemus announced that Phil Duffin will be the new director of space and aviation last year. Duffin will join the company from Willis Re where he was an executive director for non-proportional and facultative reinsurance across all aerospace classes.
Tuplin hired by XL Catlin as cyber head
XL Catlin has hired James Tuplin to lead its cyber team. It has been reported that Tuplin will officially become head of cyber and technology, media and telecoms for XL Catlin, starting in his new role in March. Tuplin was previously a cyber portfolio manager at QBE Europe having joined the company in 2014 as portfolio manager for technology, media and telecoms. Tuplin previously served at Allianz Global Corporate & Specialty and Zurich Global Corporate. Tuplin joins XL Catlin at a time when many of its team has parted the company in an industry that has seen a number of new hires over recent years. Brokers, carriers and managing general agents have kept an eye open for skilled cyber professionals in a bid to grow and expand their lines of business.
JLT report suggests January renewals saw some stabilisation
The challenging operating environment confronting reinsurers saw a degree of price stabilisation at the 1 January 2017 renewals. Insurers are facing the reality of deteriorating results and margin compression, according to JLT Re in a newly published report. The report highlighted that twelve months ago, single-digit pricing declines were common in America, while the rest of the world witnessed double-digit price declines. The report said that, “There was a broader trend towards moderating price declines. As a result, programs across a number of different territories and lines of business generally renewed closer to expiring levels, although some continued to experience more significant downward pricing pressures. Near-record levels of capital currently remain the dominant force in determining the direction of reinsurance pricing, as excess supply chases relatively muted demand.” David Flandro, global head of analytics at JLT Re said, “Nevertheless, moderating capital inflows, increasing cessions at the margin, the prospect of higher insured catastrophe losses, reserving volatility, inflationary and interest rate concerns and declining forward reinsurer returns are coalescing to push back against downward pricing pressures.”
W/R/B Underwriting reviews its marine book
W/R/B Underwriting has put its London marine book under review as it assesses the best way to proceed with the struggling line of business. The marine team writes marine hull, liability, marine war and cargo thought to be in the region of $30mn. The book is led by director of underwriting for non-static risks Louise Nevill. W/R/B Underwriting, led by Alastair Blades, consists of WR Berkley Syndicate 1967 and WR Berkley Insurance Limited and is a unit of WR Berkley Corp. In 2015 W/R/B Underwriting contributed 38.9% of GWP for Insurance International, valued at $778mn.
Tokio Marine Kiln online offering now includes drone insurance
Tokio Marine Kiln (TMK) has begun offering Unmanned Aerial Systems (UAS) insurance on its One TMK digital exchange. The insurer said that this will allow brokers to quote and bind drone insurance policies online in real time from anywhere in the world. It detailed that the product, which features a newly enhanced policy wording, will be available immediately to the global UAS broking community. James Walker, head of aviation at Tokio Marine Kiln said, "UAS, more commonly known as drones, are playing an increasingly important role in the world and they're a class of business we've been pioneering for a number of years. We are delighted to be able to offer efficiencies and cost savings to our clients and broking partners by distributing our enhanced coverage through the One TMK platform." Tom Hoad, head of innovation at Tokio Marine Kiln added, "When we launched our digital exchange, we were adamant that we would have multiple products available with the capability to add new lines of business in an efficient manner. Following the addition of UAS, we'll continue to add relevant products to One TMK that will assist our brokers and clients."
Brokers positive as profits push up growth
Insurance brokers have been increasingly optimistic in the last quarter of the year after a decline in the previous quarter, while profitability returned to positive growth, according to a CBI/PwC Financial services survey. It found that 40% more brokers were upbeat about the sector than pessimistic. This is a change in attitude from the previous quarter when the overall sentiment was negative by a net 27%. Brokers also witnessed growth in business volumes strengthen over the quarter, yet for the first time since 2011 they have predicted that volumes could likely fall over the next three months. Also, 3% believe growth will come from engaging in M&A transactions, while 60% feel it will come from new customers. The number of employed brokers grew for the first time in three quarters and headcount is thought to continue increasing in the first quarter of this year.