Round-up of the latest news and developments from the global insurance market with stories from Lloyd’s, Berkshire Hathaway, the Mexico riots and more.
Lloyd’s city workers prevented from daytime drinking
Lloyd’s of London have banned its workers from drinking during the working day following a discovery that half of disciplinary cases were related to alcohol. The ban prevents the insurance market's 800 employees from drinking alcohol between 9am and 5pm, Monday to Friday. The policy was adopted after roughly half of grievance and disciplinary procedures in 2016 were found to be the result of consuming too much alcohol. The ban is included in the employee guide, which has been reviewed by HR. However, staff are less than impressed with the new rule, which will stop them from enjoying a drink at lunchtime. Lloyd's was founded in the 17th century, when it was a coffee house that served as a meeting point for sailors, merchants and ship owners to find out shipping news. A Lloyd’s spokesperson said, “Our employee guidance was recently updated and provided clarification on the Corporation’s position on drinking alcohol during the working day, which is prohibited.” The ban does not affect the brokers and underwriters from other firms who are based in the same building.
BHSI favours steady growth in Europe
Berkshire Hathaway Specialty Insurance (BHSI) has said it prefers the steady growth strategy to a quick one for its Europe operation. The reason for this measured approach is reportedly because the company likes to build long term relationships with brokers, saying that earning business takes time. BHSI has recently made three new additions to its London underwriting team with Richard Nathan as head of property lines, Patrick Brown as head of executive and professional liability and Andrew Walker as head of claims. They will be joined by a fourth later in the year and have been tasked with growing business in the UK, Ireland, Spain, France and Italy with Ireland and Spain the main focus this year.
Losses from the Mexico riots could hit $200mn
The January riots in Mexico over the price of petrol could cost the global insurance market as much as $200mn. The protests were caused when it was announced there would be a 20% rise in the cost of petrol. Walmart alone is asking its political risk teams for a payment of between $60mn and $70mn. The cover was put together by BP Global and includes political violence protection against strikes, riots and civil commotion. The policy is led by QBE, which has a $15mn line on the $7mn primary layer. Other carriers affected are Pembroke, Talbot, Sompo Canopius and Lancashire. A source from Lloyds said that some wrote the excess but not the primary so there are a few who are waiting to see if they are liable for any payments.
Large reserve charge results in a Q4 loss of $2.8bn for AIG
AIG paid a large $5.6bn reserve change in the fourth quarter of last year causing it to experience a loss of $2.8bn for the period. A retroactive reinsurance agreement with National Indemnity has only just been finalised and now 80%, or $4.2bn, of total 2016 adverse development of $5.3bn will be passed on to Nico, a subsidiary of Berkshire Hathaway. The charge of $5.6bn is notably higher than that predicted by the market after many analysts suggested a figure around the $3bn mark. AIG has confirmed it anticipates to make a pre-tax gain of approximately $2.6bn in the current quarter to mirror the movement on the reserve in 2016 and the final premium paid for the Nico cover.
Nichols steps down as Axis Re CEO
Jay Nichols has resigned as chief executive officer of Axis Re to take on new challenges. He will remain with the Bermudian reinsurer in a transitional role until the end of March. Jan Ekberg, Axis Re Europe president and chief underwriting officer, has been named as Nichols’ successor on an interim basis. Ekberg has been with the company since 2004. Axis Re is the reinsurance operation of Axis Capital Holdings. Nichols said, “When I joined Axis Re, we set a plan to profitably grow the reinsurance business, improve our analytical capabilities and expand into strategic capital partnerships to match the right risk with the right capital. I am grateful for what we have accomplished in all areas of the reinsurance business and I have been honoured to lead such a talented and committed group for the past five years. I’ve deeply enjoyed working with my team, my colleagues across Axis, and being a part of the company’s leadership.” Nichols joined Axis in 2012 to take the reinsurance CEO role. He joined the company after a 15-year stint with fellow Bermudian firm RenaissanceRe, where he held several senior roles, most recently as head of the firm’s Ventures division.
First round bids submitted for CFC Underwriting
Last week saw the submittal of the first round of bids for CFC Underwriting with those involved believed to be all private equity houses. It has been reported that the company could go for 12x forward Ebitda of £15mn ($18.7mn), equating to more than £180mn. Warburg Pincus, Lightyear Capital and Aquiline are understood to have been involved in the first stage. The MGA is keen to retain its independent status which is why the process is closed to strategic bidders. 50% of the business is believed to be available for purchase and could end up being a slight majority or minority depending on where the deal closes.
Simon Low hired by StarStone as group head of political risk and crisis management
StarStone have appointed Simon Low as their new group head of political risk and crisis management to manage all the business’s political violence and political risk books. Tim Woodhouse previously led the team but left for Novae in the second half of last year. Low joined Sompo Canopius in 2011 from Ark to launch a terrorism, war and political risk offering at the company. The appointment of Low will see the political risk team expand into new areas such as structured trade credit insurance, kidnap and ransom and aviation. The appointment is another move that shows the intent of the company to grow into new areas with the launch of their Dubai managing general agency earlier in the year.
Barbican adds two hires to its cyber team
Graeme King and Richard Spotswood have been appointed by Barbican to lead its cyber offering. It has been reported that King will join as business group leader for cyber with Spotswood becoming cyber underwriting manager. Barbican has been eager to develop its cyber team since former business group leader for cyber, Geoff White, left the company in August. White left with a couple of colleagues last year to run the division at Neon owned Tarian. King was previously practice leader and underwriter for technology professional indemnity (PI) and cyber at AGCS, joining the company in 2014. Before this he served as a senior technology and cyber underwriter at XL. Spotswood has been on Kings team before as a senior tech PI and cyber underwriter, with a focus on AGCS's tech errors and omissions and cyber liability portfolio. He has previously worked at Principia Underwriting and Willis.
Price Forbes adds to its healthcare brokerage operation
Price Forbes has added to its healthcare brokerage operation, all four of the new hires coming from JLT. Marin Eddison will join as an executive director specialising in life sciences and on supporting the wider casualty business. James Bird will also become an executive director and will lead the now larger life sciences and healthcare team. Neil Livingston will join as life sciences director and Mike Brown will become divisional claims director. Bird was a senior partner within JLT and joined the company in 2004 from AstraZeneca. Livingston, also a partner, joins Price Forbes after spending 3 years at JLT. Brown spent the longest at JLT with 22 years at the firm. Price Forbes' healthcare team places coverage including medical malpractice, clinical trials, general liability and professional indemnity insurance.