Round-up of the latest news and developments from the global insurance market with stories from Ping An, Liberty Mutual, Intact Financial Corp and more.
Ping An named the world's most valuable insurance brand
China's Ping An has overtaken Germany's Allianz to become the world's most valuable insurance brand with a brand value calculated at $16.3 billion. Ping An posted net profits of $9 billion in 2016. Despite a slowdown, its core market of China is far more dynamic than the US and Western Europe, where the other leading brands are based, helping it to the top spot. Furthermore, Ping An has been extremely successful at cross-selling based on excellent core products. The firm offers a limited number of free products and services to potential customers via its online platform. This has generated goodwill and significantly expanded Ping An’s user base, creating a platform for cross-selling. Ping An is just as focused on its brand as its revenues. It is the first Chinese financial firm to deploy a Net Promoter Score (NPS) model to track customer feedback and brand loyalty. This commitment to tracking and tweaking the brand is paying off, with very high customer equity scores on Brand Finance’s Brand Strength Index. Brand Finance’s CEO David Haigh said, “Ping An has lofty ambitions, aiming to become the world’s leading provider of personal finance. Based on this evidence, in the long term it may not be an unrealistic goal.”
Liberty Mutual acquires Ironshore
Liberty Mutual Insurance has acquired Ironshore Inc., forming a global specialty business with almost $6.5 billion in net written premiums. Liberty said at the end of 2016 its intention to buy 100% of Ironshore for $3 billion, or 1.45x Ironshore’s book value at the end of 2016. Liberty Mutual confirmed it is merging the Liberty International Underwriters U.S. business with Ironshore’s U.S. specialty lines business under the Ironshore brand. This will create the sixth largest writer of excess and surplus lines in the U.S. based on 2016 direct written premium. David H. Long, Liberty Mutual Insurance chairman and CEO said, “The combination of our two operations will create a top tier U.S. specialty insurer with a broad and deep set of solutions for clients and brokers. For Liberty’s worldwide operations, Ironshore becomes an ideal complement to our $5 billion global specialty business by providing additional scale, expertise, innovation and market relationships.” Kevin H. Kelley, present Ironshore chief executive officer, will stay to lead all Ironshore operations reporting to Long. Ironshore’s other businesses, including its Lloyd’s syndicate operation and Bermuda platform, will continue to run with their present business strategy, management team and Ironshore brand.
Intact Financial Corp to buy U.S.-based OneBeacon for $1.7 billion
Intact Financial Corp, Canada's biggest property and casualty insurer, said it would buy U.S.-based specialty insurer OneBeacon Insurance Group Ltd for $1.7 billion, creating a specialty insurer focused on small- and mid-sized businesses. Shares of OneBeacon were trading at the offer price in after-hours trading following the announcement. The deal will create an insurer with over $1.46 billion of annual premiums. Intact said it plans to finance the deal and related expenses using a combination of equity financing, some excess capital and financing consisting of loans, notes and preferred shares. OneBeacon's debt of about $275 million will remain outstanding, Intact said. Goldman Sachs is the financial adviser for Intact, while Credit Suisse advised OneBeacon.
Willis Re sees three team members leave the company
Willis Re has seen a trio leave the accident and health (A&H) team. Bob Ikin and Tim Mullis have joined Jeremy Mander, executive director and head of London and International A&H, in parting the company. Jeremy’s next position is still not yet know. All three were part of Miller before Willis bought into the company, Mander had been a partner since 2010. Ikin joined Miller in 2009 with Mullins joining in 2014. Ikin previously served at Benfield, Willis, Toa Re-Oatley and Royal Re beginning his career in 1976. Mullins was previously at JLT where he spent 23 years on personal accident treaty reinsurance. Steve Hearn was a key individual in the Willis-Miller merger when he was deputy CEO. Hearn is now CEO of Ed.
Generali’s Lloyd’s startup shows no signs of revival
The Lloyd’s start up established by Generali is to remain in a dormant state for the foreseeable future. It was put on hold following a leadership change at the carrier but is yet to be fully cancelled. The syndicate was due to launch in 2016 with reports saying that no work is being undertaken to change the present state of the syndicate. So far there has been no confirmation from Generali as to whether they see any value in joining the Lloyd’s market after conducting a review last year. Lloyd’s have not wanted to invite new competition into the market given the present market conditions and compressed rates. Entrants that may have been eager to join the market a year ago have been more cautious given the current market trends. These two factors have seen start up activity in the market cool.
Mozambique default could impact credit insurance market
Hundreds of millions of pounds are exposed to the recent debt default in Mozambique, a development that could leave credit insurers vulnerable. The two largest lines are XL Catlin and Liberty Mutual Insurance Europe who have a reported $350mn-$400mn of Mozambique government-guaranteed credit insurance policies purchased by Credit Suisse and VTB in 2013 and 2014. Loans sold by Credit Suisse and VTB represent a number of Mozambique risks insured in the non-trade contract frustration market. It is thought that 10 syndicates are exposed to these loans on the Lloyd’s market slip. The loans are classified as debt belonging to the Mozambique government which is why a number of Lloyd’s syndicates are exposed. The Mozambique government failed to pay a $119mn instalment on one of these loans on 22 March.
Everest acquisition of ProSight’s Lloyd’s business falters
Everest Re’s talks to purchase ProSight’s Lloyd’s operation have faltered due to regulatory pressure from Lloyd’s. It has been reported that the decision by Lloyd’s to watch ProSight more carefully comes after ProSight removed more than £200mn worth of US business from the syndicate. KPMG are understood to have been brought in to audit ProSight and give Lloyd’s conformation that everything is fit and proper. Everest were believed to be in talks with ProSight to buy its Lloyd’s business which is up for sale but with Everest’s exit it has been speculated that a more conventional process will take place to sell the entity. A number of other organisations are believed to have shown an interest, confirming to ProSight their intention to join any process. Acquisitions in the Lloyd’s market remain strong with Hannover Re’s recent big-money purchase of Argenta showing the appeal of a owning a syndicate.
Jeff Herman joines StarStone as head of global A&H
StarStone has targeted growth in its global accident and health businesses through the appointment of Jeff Herman to lead the class. Herman has joined from CV Starr, where he served as global head of accident and health (A&H). He will retain the same title at Starstone and will be based in New York but will oversee accident and health across the company’s global platforms. This includes Lloyd’s syndicate 1301. Starstone said he would work closely with the firm’s existing A&H teams in London and Brussels. Herman also brings experience from serving at Liberty Mutual and AIG and in growing A&H divisions in a variety of markets having established operations in China, Japan, South Korea, Eastern Europe and Latin America during his career. StarStone currently has a $30mn A&H book with a maximum line size of $25mn. His time at Starr saw him manage a book in the region of $70mn which shows the ambitions of StarStone to grow in the area.
Jerry Ridge to leave Willis after a 40 year career
Chairman of global specialty, Jerry Ridge, is to leave Willis following a career of 40 years in the market. Ridge has been in his role since 2015 with a two year stint as co-CEO of global speciality before that. There is currently no confirmation that Ridge will re-join the market in another role. Ridge joined Willis ‘s marine team in 1985 having started his career at Walsham Brothers, becoming a respected figure within the market. Ridge held a number of positions in marine and energy at Willis before becoming director of global marine and energy in 2004.
