Round-up of the weekly news and developments from the global insurance market with stories regarding Inga Beale, Carrie Fisher and BGC Partners.
Lloyd's of London's Inga Beale made a dame in New Year honours list
Chief executive of Lloyd’s of London, Inga Beale, has been named in the New Year honours list. Beale has been made a dame and said she was “incredibly proud of the work that Lloyd’s are doing to encourage diversity”. She became chief executive of the insurance market in 2014, becoming the first woman to hold the top job at Lloyd’s in its 328-year history. In 2015, Beale became the first woman and bisexual person to top the annual power list of the world’s leading 100 LGBT executives. Beale said, “Lloyd’s represents so much of what is good about British business and the insurance sector in particular. This honour is a reflection of the work and commitment of everyone who works within the Lloyd’s market, enabling others to take risks that enable society to progress. I am also incredibly proud of the work that we are doing to encourage diversity. When I think back to what the workplace was like 30 years ago, we have come a long way on our journey to become a truly modern, global and inclusive sector.”
$50mn Carrie Fisher Star Wars claim set to hit Lloyd's
Lloyd’s of London insurers are readying themselves for a $50mn claim by Disney following the death of Carrie Fisher. Should the full amount be claimed it will be the biggest single person accident claim in history. The cover was taken out by Disney in the event that Carrie Fisher was unable to fulfil her contractual obligations and complete filming of the new Star Wars films. It is understood that over 20 insurers have a share in the policy and it is thought it would have an impact on final 2016 results in the sector. The policy was underwritten by specialist New Jersey-based managing general agent Exceptional Risk Advisors, but if the policy triggers the loss will be entirely borne by capacity providers in Lloyd's, with Enstar subsidiary Atrium the lead on the facility. Fisher passed away on Tuesday 27 December after suffering a heart attack on a flight from London to LA. She was due to star in the next Star Wars film as Princess Leia and it is still not clear how Disney will respond.
BGC Partners acquires Lloyd's broker Besso in deal worth £71m
Lloyd's of London broker Besso has been acquired by US broking giant BGC Partners in a deal that values the firm at £71m. The purchase gives Besso's owner, its senior management team and private equity house BP Marsh an exit from the company. The fund's share of the proceeds totalled £20.6m net of transaction costs, slightly above the £20.1m valuation BP Marsh ascribed to its share of the business in July 2016. However, the returns are notably above the £13.9m BP Marsh calculated in August 2015 when it first kicked off a "strategic review" in conjunction with advisers Canaccord Genuity. Current Besso chairman Colin Bird will remain in his role post-completion and marked the transaction as increasing the prospects for the Lloyd's broker to grow. He said, “The opportunities this deal presents are substantial. BGC and its affiliates have deep relationships with leading companies in real estate, financial services, and other industries, which we believe will help us grow our franchise.”
Date set for Sompo takeover vote
Endurance shareholders will vote on the 27 January on the company’s $6.3bn takeover of Sompo which was the largest P&C M&A deal of last year. Shareholders registered before the 28 December will be eligible for a vote in a deal that could see Sompo bought for $93 a share. The takeover requires the approval of a majority of votes cast at a meeting where at least half the owners of Endurance's share capital, spread between four shareholders, must be represented. Preferred and ordinary shares will count as one class. There is a date for walking away set at the 5 July which can be extended to 5 October to allow for approvals from the regulator. It has taken nearly a year to get to this position with Endurance CEO, John Charman and Sompo’s M&A Chief, Nigel Frudd, meeting regularly thought 2016 to discuss the possible transaction.
Cat rates in global property down 5.7%
January renewals witnessed a continued soft reinsurance market despite hopes by some of an improvement in the new year. JLT released a statement before New Year’s Day estimating an average risk-adjusted reduction in property catastrophe rates around the globe of 5.7%, an improvement in the declines witnessed in the last 3 years. Analysts have reported that the scale of the reduction year on year is lessening although with a 33% decline in pricing since 2013 margins are being squeezed.
Indian Authorities grant approval to a number of foreign and domestic reinsurers
Numerous foreign and domestic reinsurers have been given approval by the Indian authorities to set up operations in the country. The Regulatory and Development Authority of India (Irdai) said that the decision was made as it looks to increase competition in the market. Approval for branch offices within the Indian non-life insurance market were given to Swiss Re, Hannover Re, Reinsurance Group of America, Munich Re and India’s first domestic private reinsurer, ITI Re. The value of India’s non-life market is thought to be in the region of $12.9bn. The market is presently occupied largely by the state owned reinsurer GIC Re and competition in the segment is small. With these new approvals the Indian Government hopes to increase competition and the quality of service offered in the sector.
XL Catlin head of cargo hired by Markel
Ryan Godfrey has been hired by Markel International as senior underwriter and head of the cargo team within its marine, energy and property division. Godfrey will work alongside senior underwriter Richard Burnett and under marine managing director Chris Fenn. Godfrey was previously at XL Catlin where he was cargo class underwriter for eight years. Prior to XL Catlin he held positions at Allianz Group and Eagle Star. Godfrey will assume responsibility for broadening Markel’s broker relationships. Managing Director of marine, energy and property divisional, Paul Jenks said, "Ryan’s appointment reflects a real commitment to expanding our cargo portfolio. With two senior underwriters on the team we are looking to grow our business, broaden and strengthen our broker reach while continuing to offer the high levels of service we offer our clients. It’s another step in the development of the marine businesses service portfolio."
Marsh completes Bluefin deal
Marsh is to buy Axa subsidiary Bluefin Insurance Group for £295m in an agreement thought to be completed in the first quarter of 2017. On completion, Marsh will amalgamate Bluefin and Jelf to create one business unit headed by Jelf CEO Phil Barton who will be supported by a management team combining staff from both firms. This unit will bring together two leading community brokers with complementary regional offices across the UK, serving over 250,000 clients in 80 locations. The broker will provide technical advice, bespoke products and distinctive services including claims consultancy and risk management, along with intelligent risk insights that will enable companies to address emerging risks such as cyber and people-related issues through a strong employee benefits team. Mark Weil, Marsh CEO for UK & Ireland said, "We want to make sure that businesses of all sizes are getting the very best risk and insurance advice to help them navigate the uncertainties of today's environment. Bringing the Bluefin and Jelf teams together will give us a great platform to do just that. We are investing in new policies, products and analytic tools to help businesses make informed choices on how best to manage the risks they face. Under Rob Organ, Bluefin have built a fantastic business and we look forward to welcoming him and his colleagues to the firm."
Senior UK underwriters appointed by RSA
RSA has appointed a pair of senior UK underwriters within its global risk solutions business. Joining as property underwriting director is Robert Kemp who was previously managing director and head of placement within Marsh’s risk management practice where he spent nine years. Prior to this he worked at Willis within their UK and Ireland property arm. Within the newly created underwriting leader role comes Leigh Langton who joins from XL Catlin. Langton was client and distribution leader at XL Catlin after starting his career at RSA. Both will report to Gary Long, who is RSA's director of risk managed business, UK and wholesale.
