Round-up of the latest news and developments from the global insurance market with stories from Markel, Pen Underwriting, Elesco and more.
Markel UK unveils social welfare policy
Markel UK has unveiled a social welfare insurance policy called Markel Care which gives policyholders access to a range of additional professional and business support services. Markel already covers 10,000 care homes and facilities across the UK and said the new product targets care sector providers including care and day centres, counselling and therapy services and nurseries and play groups. It highlighted that Markel Care gives policyholders access to six new areas of business and commercial support, on the same terms as the insurance cover alone. The insurer also said the new policy gives brokers access to a unique portal for sector specific content and resources. The new product will be revealed to brokers at the British Insurance Brokers’ Association’s conference in Manchester in May.
Pen and Markel enter partnership with an equestrian sector deal worth £25m
Pen Underwriting has joined forces with Markel International to target the equestrian market. The partnership will see Markel offer expertise and capacity for up to £25m in premiums over the next three years for Pen’s products. Seb Simmonds, commercial director of Pen Underwriting Delegated Solutions, said, “The equestrian market presents unique risks and challenges due to the diversity of activities undertaken in the different disciplines. This demands a tailored response and our underwriters have deep knowledge of everything from eventing and happy hackers, to trade associations and local riding clubs. So, by joining forces with Markel and leveraging our collective expertise, we aim to introduce an increasingly innovative offering to our coverholders – all of whom are equestrian specialists in their own right — for the benefit of our end customers with their diverse and changing needs.” Juliet Redfern, managing director of equine and livestock at Markel, added, “We’re excited to be entering a new strategic partnership with Pen Underwriting, building on Markel’s long-term trading relationship with the wider Gallagher group, which will provide a great complement to our existing equine footprint in the UK and globally, and underlines our long-term mutual commitment to the equestrian market.”
Macron hopes raise French insurance stocks
Markets saw on increase in the value of French insurance stocks with Emmanuel Macron emerging as the favourite to become Frances president following the first round of votes. AXA shares rose 6.53%, Eurostoxx 50 index climbed 3.9%, CNP Assurances shares jumped 3.5% and Scor gained about 2.9% on its shares. At the end of the first round of voting Macron won 24% of the vote, compared to Le Pen's 21% with the two going head to head on 7 May. Richard Champion, the deputy CIO of Canaccord Genuity Wealth Management said, "A large portion of the political risk that has been besetting investors' 2017 outlooks has been lifted. Opinion polls show Macron leading in the second round by around 63% to 37%. Macron is as close to a slam dunk for the presidency and a five-year term in the Elysée palace as it is possible to imagine, even in this strange era of political surprise."
$75mn of airline capacity won by Elseco
Elseco has secured $75mn of airline capacity adding to its already growing aviation platform. It has been reported that Swiss Re, Allied World, AmTrust and Hamilton have given Elseco their backing to increase its aviation offering to encompass airline business. Backers of Elseco’s original aviation offering, such as Sirius and Talbot, will continue to provide capacity on the extended aviation arm with a reduced share. It has been speculated that Elseco is negotiating $50mn of further capacity for the venture with a number of large carriers showing interest. It is expected that the platform will be launched on 1 May. Oliver Marre, the aviation specialist, was recently named head of aviation at Elseco with Gareth Small also joining the aviation team.
Abengoa collapse could lead to EUR250mn of losses
The collapse of Abengoa, the multinational renewables group, could mean trade credit and surety reinsures have to deal with EUR250mn worth of losses. It has been reported that those with the largest exposure are Swiss Re, Hannover, Munich Re, Zurich, Scor and Partner Re. Initial estimates were three times as high as this but it is expected that many will be able to mitigate claims payments via subrogation. It has however been said that the total figure could change due to the complexities surrounding the collapse. The three big trade credit carriers, Atradius, Coface and Euler Hermes, were initially thought to be exposed to the largest losses but it has since been confirmed they are well reinsured. In protracted disputes or insolvencies such as that of Abengoa, trade credit carriers typically indemnify the affected entity.
Financial Conduct Authority investigation causes confusion
The Financial Conduct Authority’s (FCA) investigation into the aviation insurance market has caused confusion in the sector about its intentions. It was reported last week that the FCA began the investigation looking at five aviation brokers; this involved seizing IT equipment from JLT, Aon, Marsh, Willis Towers Watson and UIB. Some of these insurers stated that the move by the FCA was regarding competition in the sector with particular attention given to the competition mandate launched in April 2015. Deb Jones, FCA director of competition said of the FCA’s investigation that they "will continue seeking breaches where they arise in the financial services sector, and step in quickly to take action if we need to". The powers the FCA relate to regard anti-competitive arrangements between organisations such as price fixing or bid rigging, in the most extreme cases. It has been said that this particular investigation is centred on a breach of client confidentiality around data.
Hamilton Re acquires Bermuda excess casualty book from Canopius
Hamilton Re has obtained renewal rights to the primary excess casualty book belonging to Sompo Canopius’ Bermudan subsidiary. As part of the deal Stephen Hartwig will join Hamilton as chief underwriting officer for casualty insurance. Jeremy Wright will also join as senior vice president of casualty insurance, both joining from Sompo Canopius. The deal is thought to be completed by the Autumn with Hartwig reporting to Hamilton Re CEO Kathleen Reardon. Reardon hailed the acquisition as complimenting the company’s diversification efforts. Mike Duffy Sompo Canopius group chief underwriting officer said, "We are pleased to have reached this agreement with Hamilton Re, which provides a great long-term home for the business, especially taking on the knowledge, expertise and relationships of Stephen Hartwig and Jeremy Wright. We remain committed to our property catastrophe business that is also written out of our Bermuda office, and look forward to continuing to work with our partners in Bermuda, particularly Hamilton."
Cyclone Debbie's insured losses exceed US$500-mln
The Insurance Council of Australia has confirmed that insurance losses from last month's cyclone and flooding have reached US$528mn, with more than 45,000 claims. Insured losses are thought to increase even more with Swiss Re estimating earlier this month that the total insured market losses from the cyclone would reach US$1.3bn. Tropical Cyclone Debbie made landfall on 28 March as a category 4 hurricane; making it the strongest cyclone to hit Australia since 2015. The eye of the storm hit Airlie Beach on the north Queensland coast, with estimated 10-minute sustained winds of close to 200km/h. The main disaster zone stretched more than 990 km from the point of landfall, reaching northern New South Wales. Queensland's Treasurer Curtis Pitt said that the loss attributed to cyclone Debbie through damage to public infrastructure and property alongside compensation payouts to homeowners and producers would be an estimated $1.3bn.