Round-up of the weekly news and developments from the global insurance market with stories from Lloyd's, Marsh, Zurich and more.
Bruce Carnegie-Brown has been named as Lloyd's of London's new chairman
The chairman of Moneysupermarket.com has been confirmed as the new chairman of Lloyd's of London, following an extended period of speculation. Lloyd's confirmed that Carnegie-Brown, who is also vice-chairman of Banco Santander, will take up his new role in June. His appointment is still subject to approval from the Prudential Regulation Authority and the Financial Conduct Authority. There was a unanimous agreement for Carnegie-Brown to replace John Nelson at a meeting of the Lloyd's council. The appointment also has the unanimous support of the Lloyd's Franchise Board. John Nelson said, "Quite simply, this is an excellent appointment. Bruce has an extensive career in financial services, with major global firms particularly in insurance where he brings a deep knowledge and understanding of the broker and underwriting market.” Carnegie-Brown has held executive and non-executive roles at Marsh Europe, Aon UK, Catlin Group and JLT. He was appointed as chairman of Moneysupermarket Group in April 2014 and has been in his role at Santander since February 2015.
Marsh pitches “bridge solution” to insurers as a plan B to Brexit
Marsh has put together what it has called a legally watertight work-around that would allow insurer’s access to the European markets at no greater cost than the existing means of access. The proposal has been worked on by Marsh with a number of licenced carriers. Mark Weil, CEO of Marsh UK and Ireland, said that inspiration for the work around came from fronting arrangements commonly used in Latin American markets. The bridge solution addresses issues with fronting in South America, including the fact that it tends to be on an insurer-by-insurer basis. Weil said, "We formalised this to create a collective structure, which could be created now without needing to wait for the Brexit negotiations to be completed and wouldn't be subject to further EU fragmentation. This would allow clients to have a structure which works for them today." Weil also highlighted issues with two common solutions being explored by insurers, namely that setting up subsidiaries in the EU would need to be resilient and were at risk of being “timed out” during negotiations. There was also a risk of political interference by local governments and if the EU were to split up further those subsidiaries would fail to be a solution.
$120mn Ukraine civil war loss for policy leader Zurich
The conflict in the Ukraine has led to a $120mn political risk claim for which Zurich is the lead. Cargill, the large food company, abandoned a sunflower crushing plant near Donetsk before armed forces moved in to occupy the site. During this period it has been reported that the facility has been damaged by missiles. With two thirds of the risk reinsured some have said that the loss is “not really material” for Zurich. The political risk market has been extremely profitable in recent years with this latest claim being the largest for some time. Zurich has one of the industry's biggest political risk books and can write up to $150mn of cover per single risk.
Aon asking for $54mn in hiring dispute
Aon is chasing $54mn in compensation following the reduction of its central California team by nearly 80 employees. Aon has said that the departures, which were all over the space of 72 hours in 2014, caused the company to lose more than 51% of its business. Alliant is the main focus of Aon’s claim who are arguing that, after Alliant recruited 75 of its employees, they lost over 1000 pieces of business and completely lost their exposure in Fresno, Salinas and Walnut Creek. Aon are also claiming the loss of its employees was conducted by a former Aon regional head.
The Hanover appoints Fowle as CEO of Chaucer Syndicates, succeeding Slabbert
The Hanover Insurance Group Inc. have promoted John Fowle to chief executive officer of Chaucer Syndicates Ltd. Fowle is replacing Johan Slabbert, who is leaving the company to pursue other opportunities. Fowle has served in a number of leadership roles at Chaucer since joining the company in 2002, most recently serving as chief underwriting officer, responsible for the development and execution of the company’s underwriting strategy. Before joining Chaucer, Fowle held numerous underwriting positions in the London and Lloyd’s markets. President and chief executive officer of The Hanover, Joseph M. Zubretsky said, “We are thrilled to have John, with his extensive underwriting experience and expertise, move into the lead role at Chaucer. He has played a key role on Chaucer’s leadership team, helping us develop an outstanding underwriting discipline and culture. We look forward to continuing to build on the strong performance of the organization under his direction, providing responsive insurance solutions for our brokers, coverholders and clients. At the same time, we thank Johan for his many contributions to Chaucer and The Hanover.”
Aviation book to be transferred to Elseco by Allied World
Allied World has confirmed it is transferring its aviation book and underwriters to Elseco, the Dubai based managing general agency. Olivier Marre, Allied World’s aviation specialist, will write airline business through the Elseco platform. It has been reported that Elseco will look to grow its capacity to support a $150mn line size, with growth beyond this level planned. The Dubai MGA already has a maximum aviation capacity of $10mn for hull and $100 for liability last year. Elseco will have the renewal rights on Allied Worlds existing book. Reports have said that Allied World will still have responsibility for claims handling as well as being the lead paper provider for Elseco. The reason for the transfer is thought to be the challenges Allied World faced in competing in the aviation space.
Lloyd's reaffirms Asian underwriting hub status
Lloyd's hosted Liam Fox, the UK’s Secretary of State for International Trade, at its underwriting platform in Singapore, to show how it has developed into Lloyd's largest operation outside London providing tailored risk solutions across the Asia Pacific region. Fox and Scott Wightman, the British High Commissioner to Singapore, met Kent Chaplin, CEO of Lloyd’s Asia Pacific, where they discussed the Lloyd’s growth story in Asia and how the British government and Lloyd’s can work together in the future. Key discussion points were further enhancement of trade in the region, how to reduce underinsurance and how to pioneer the development of the cyber insurance market in the region to mitigate against emerging cyber threats. This visit comes as part of Fox’s three-day visit to the city-state to meet with Singapore and British businesses, underlining Britain’s openness and commitment to free trade. Launched in 1999, the Lloyd’s Asia platform in Singapore is the gateway to the Asia Pacific for Lloyd’s. Its premium income has tripled since 2009 to reach US$618 million in 2015. Lloyd’s is the largest provider of off-shore reinsurance premium income in Singapore.
La Playa approved as a Lloyd’s broker
La Playa has been registered as a Lloyd's broker and now has access to Lloyd's of London capacity. La Playa confirmed this access would benefit its clients and broker partners who place transatlantic risks via their London and New York offices. Matthew Clark, director of global markets said, "As a specialist broker, we work with clients who often have unusual risks which are hard to place in standard markets. Being a Lloyd's broker takes us straight to some of the finest minds in underwriting so that we can secure fast, great-value solutions for our clients." The broker stated that access to Lloyd's will facilitate La Playa's placement of larger fine art and specie risks, private aviation and superyachts, the more complex entertainment risks and emerging risks with limited precedent coming through its science and technology practice group. Chief executive officer Mark Boon added, "This is great news for us, our clients and our broker partners. Achieving Lloyd's status is integral to our expansion plans, allowing a relatively small broker to develop more business in the US and Far East. It will also be enormously useful in enabling us to expand our private client, aviation and marine offerings."