Round-up of the latest news and developments from the global insurance market with stories from MS Amlin, CFC, XL Catlin and more
MS Amlin first to launch on Lloyd’s India platform
MS Amlin has become the first to launch on the Lloyd’s India platform. John Nelson was accompanied by members of Markel and MS Amlin during his fact finding tour in the summer last year with MS Amlin applying for a licence soon after. It has been reported that although Markel has explored joining the Indian platform they have chosen to review options in more detail for the foreseeable. More than half of the Indian property treaty book came up for renewal at 1 April, along with some agricultural business meaning MS Amlin have joined at an important time in the Indian insurance calendar. Other key reinsurance renewal dates include September and October for agriculture, aviation, accident and health and motor, while June and July see the majority of India's energy reinsurance books placed. GIC Re, which owns a large part of the Indian market, has opted not to drop its rate but increase them by 10 to 15% showing how India could be an attractive market for insurers who are having to reduce prices elsewhere.
CFC launches revamped cyber proposition
CFC Underwriting announced the launch of its revamped cyber insurance product. In what represents a significant upgrade to its existing cyber proposition, the new look product provides a number of innovative cover elements to protect policyholders against the emerging threats of the digital age. This includes the provision of first party cover on an “each and every claim” basis, ensuring that policyholders aren’t restricted by a policy aggregate and that the full benefits of cover are available each time a crisis strikes. This will even be true if they experience multiple cyber incidents in the same policy period. The policy is also one of the very few to offer full retroactive cover as standard meaning that policyholders are covered for breaches they discover during the policy period, even if it first occurred long before. Symantec has reported that the average time to discover a breach is 205 days, making this a particularly important feature. James Burns, CFC’s cyber product leader said, “No modern business can escape cyber risk, but as cyber criminals have become more sophisticated and as we live in an increasingly connected world, the nature of cyber incidents is changing. Insurance policies have to evolve to reflect the changing environment. We have completely reconstructed our proposition and now offer policyholders more than just a comprehensively worded policy, but rather an all-encompassing cyber incident solution. We’ve built an extensive in-house incident response capability to ensure that cyber incidents are dealt with quickly and efficiently in real time. And because we want to encourage engagement with our experts as soon as possible for a swift resolution, we’re offering initial response services with no deductible payable by the insured.”
Stephen Catlin to retire as XL deputy chairman
XL Group Ltd announced the retirement of Stephen Catlin, executive deputy chairman, this week effective 31 December, 2017. Catlin will continue as the company’s executive deputy chairman until 15 May 2017 and following that date he will act as a special advisor to Mike McGavick, XL’s chief executive officer, until the end of the year. Catlin will also continue to serve as chairman of the Insurance Development Forum (IDF), a forum launched in 2016 by leaders of the insurance industry, the UN and the World Bank. Catlin agreed to act as a consultant to XL from 1 January 2018 to 30 September 2018 to ensure a smooth transition. Catlin said of his decision, “When Mike and I first discussed combining XL and Catlin, we knew we could create a truly special company. Now, nearly two years after the business combination, with the integration largely completed and XL Catlin running at full steam, it is an appropriate time for me to take the opportunity to step back from an active leadership role within the company. I’m enormously proud of what we have achieved, and I wish Mike and the XL Catlin team every success with their future endeavours.” McGavick said, “Stephen is an original and a true statesman of our industry. From a teaboy at Lloyd’s to the Chief Executive of its largest syndicate, in Catlin Group he created a rare global success and a hive for talent that is now helping drive XL Catlin forward. We are eternally grateful for his selfless leadership which was essential to the success of the XL and Catlin combination. I look forward to continuing to work with Stephen in his new capacity, first as special advisor to me and then as a consultant to the Company in relation to the very important work of the IDF.”
Exin and Fosun favourites in Ethniki bidding process
Fosun, the Chinese financial institution, and Exin, the start-up fronted by Matt Fairfield, are the favourites to acquire the Greek state carrier Ethniki. The final bids for the Greek National Bank-owned insurer were due this week. It is understood that both Exin and Fosun made bids over EUR800mn. Some industry insiders have speculated that the Greek national bank might keep hold of 20% of the insurer. Those involved in the process have hinted that they would like the process to be completed sooner rather than later due to oncoming headwinds in the Greek market with Greece due to pay its international creditors in July. The preference for a swift conclusion could prompt Ethniki to run a parallel process for the sale and purchase agreements required to close the deal, seeing the two parties compete against each other rather than entering exclusivity.
The energy reinsurance market near a pricing cliff edge according to JLT
The energy insurance and reinsurance market is still witnessing price declines, despite demand having fallen significantly as primary clients reduce their costs and many underwriters operating at combined rations above 100%, according to broker JLT Group’s Lloyd & Partners unit. The offshore and onshore energy insurance sector has been hit with difficulties as energy company clients reduced spend, new project numbers fell, commissioning of floating production and storage units slowed and energy usage continues to shift due to innovation and modernisation. Despite this, energy insurance costs have been coming down, with one of the main causes of that being the excess capacity in both the insurance and reinsurance markets. Of the specialty lines, energy insurance and reinsurance is a target of the major global players, as well as the capital market players on the reinsurance and retrocession side, making the available capacity in the line of business one of the most extreme. Although there have been a number of big losses in the sector, the appetite to underwrite these risks at increasingly low prices continues. Couple this with the fact that many reinsurance firms are growing into commercial and specialty facultative insurance lines and it’s easy to envisage an increasing capacity chasing energy insurance opportunities.
Lee Meyrick named as Aon Risk Solutions marine specialty CEO
Lee Myrick has been hired by Aon Risk Solutions as global marine specialty CEO. Meyrick previously served at XL Catlin where he was managing director and chief underwriting officer for global marine. Prior to this he served at AIG and Zurich. Meyrick will be based in London and report to Sandeep Malik, CEO of Aon Risk Solutions Asia. Commenting on the new hire Malik said, "Lee is very well positioned to lead and grow our global marine business across mature and emerging markets, thanks to his extensive experience in global roles within the sector. He will be focusing on delivering innovative market-leading solutions to help our clients manage risk and volatility." This move is the latest in a number of senior marine moves with recent changes to the teams at Hiscox, Ed and Willis Re.
Reinsurers move away from US trucking and transportation
There has been falling excitement from reinsurers in the US trucking and transportation treaties market creating a difficult placement market for brokers. It has been reported that reinsurers have scaled back from the “wheels” space particularly when new treaties are bought to market. These carriers are thought to include Third Point Re and Tokio Millennium Re (TMR), while PartnerRe is also believed to have significantly cut the size of its book over the last couple of years. Third Point Re is understood to have come off a number of deals after parting company with Tony Urban and Shane Haverstick last September, with the duo currently working on a start-up venture. Aon is understood to have let other reinsurers know that Third Point Re was expecting to reduce its shares on the programme or look to exit, presenting a "credible" opportunity for another parties to support it at a point when market conditions are hardening.
Lawrence Holder to join Blenheim as non-executive chairman
Laurence Holder has been hired by Blenheim as a non-executive chairman. Holder was previously the managing director of Lancashire's Lloyd's arm Cathedral. It has been reported that Blenheim is looking to create its own managing agency targeting a launch date within 12 months. If Blenheim is given the go ahead to create a managing agency on this timetable, it will be the fastest approval since Chubb launched its now disbanded managing agency and syndicate in tandem in 2010. Many don’t seem to think this is beyond the realm of possibility with the support shown for Blenheim by Lloyd’s since its creation. Managing agents have been particularly exercised by the perception that Blenheim would cannibalise existing Lloyd's premium rather than bring new business into the market.