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EC News (17th May 2018)

  • Publish Date: Posted almost 6 years ago
  • Author:by Alan Jarque

Round-up of the weekly news and developments from the global (re)insurance market with stories from XL Catlin, Aon, Hannover Re and more.

XL Catlin unveils senior departures as it prepares for AXA takeover

XL Catlin has outlined a number of senior departures and leadership changes as it gears up for its $15.3bn acquisition by AXA.

Among the departures is chief experience officer Paul Jardine, who is expected to leave the company at or shortly after the close of the transaction, along with Susan Cross, XL’s chief actuary, Kirstin Gould, general counsel, and chief human resources officer Eileen Whelley.

In addition, Paul Brand, head of the carrier’s insurtech and innovation lab Accelerate, will leave the firm at the end of June. He will be succeeded by Vincent Branch, who will take the reins of the business unit on 1 July.

Doug Howat, CEO of global lines at XL Catlin, has also decided to leave the company.

Meanwhile, XL also outlined a number of new leadership appointments and structural changes.

In insurance, the firm said that it intends for Neil Robertson and Jason Harris, currently chief executive insurance underwriting and chief executive international insurance, to each take on new roles as chief executives for global specialty and global P&C respectively.

Joe Tocco will remain as chief executive for North America insurance, reporting to Harris.

Reinsurance will continue to be led by Charles Cooper, while underwriting capital management - which includes ceded re and alternative capital - will continue to be led by incumbent chief executive P&C underwriting capital management, Mark Van Zanden.

Furthermore, XL said it would merge its data and analytics businesses, which will be headed up by the current chief executive for insurance pricing and analytics Paul Shedden.

Effective 1 July, Shedden’s team will include include Kim Holmes who leads strategic analytics, Henna Karna who heads up enterprise data and Branch, who will lead Accelerate.

The carrier said that it would not be able to reveal the complete line-up for the new leadership team until after completion of the deal.

Aon retires Risk Solutions and Benfield brands

Aon has announced that it is integrating Aon Risk Solutions and Aon Benfield under a single brand, appointing Eric Andersen and Michael O'Connor as co-presidents of the firm.

As part of the changes, Aon will retire the firm’s remaining business unit brands, Aon Risk Solutions and Aon Benfield, and will go-to-market under the unified brand of Aon. It will also create an integrated global operating committee, co-led by Andersen (most recently CEO of Aon Benfield) and O'Connor (most recently CEO of Aon Risk Solutions).

Aon said the restructure follows the retirement of the Aon Hewitt brand last year.

In their new positions, O'Connor and Andersen will continue to report to Aon CEO Greg Case, whose contract was recently extended by the board of directors until April 2023.

Aon said that the moves are “designed to increase the rate of innovation across the firm and make it easier for colleagues to work together to bring the best of Aon to clients.”

Aon previously announced a single P&L structure, which is part of an ongoing effort to increase colleague connectivity and accelerate reinvestment in innovation that serves clients. That effort is overseen by Aon's global CFO Christa Davies, whose contract was also recently extended to April 2023.

As part of the restructure Cary Grace, head of the retirement solutions business, will also become responsible for global M&A integration, while health solutions chief John Zern will take on the position of CEO of North America commercial risk solutions.

Aon COO John Bruno will take on the additional role of CEO of data and analytic services.

Case said the changes aim to remove “structural barriers”, enabling the firm to “innovate new sources of value” and realise its “full potential”.

"The appointment of Mike and Eric as co-presidents reflects the enormous contributions that they have made to the ongoing success of our firm. Both have proven track records and have played critical leadership roles across Aon, ensuring that they understand the breadth of our capabilities and how to bring them together to best serve our clients,” said Case.

Andersen joined Aon in 1997 and has held a number of senior roles. He was previously CEO of Aon Risk Solutions Americas before moving into the position of CEO of Aon Benfield in 2013.

O’Connor has been with Aon for a decade, most recently as CEO of Aon Risk Solutions and prior to that as COO of Aon Risk Solutions and Aon Benfield. Before joining Aon, O’Connor was a partner at McKinsey.

Hannover Re and HDI to launch EUR1bn specialty joint venture

Hannover Re and HDI Global are merging their specialty insurance activities into a new joint venture to establish a EUR1bn premium commercial insurer, HDI Global Specialty.

The new entity is set to launch on 1 January 2019, and will write agency and specialty primary insurance business including errors and omissions, directors’ and officers’, sports and entertainment, aviation, offshore energy and animal lines.

As a first step, HDI Global, which is a subsidiary of the Talanx Group, will acquire the majority of shares in Hannover Re’s insurance arm, Inter Hannover, for EUR100mn. After the transaction has taken place, Inter Hannover will be renamed HDI Global Specialty SE and HDI Global will contribute its specialty portfolio to the new company.

Hannover Re – which is also part of Talanx –will own 49.8 percent of the new company, with HDI Global owning the remaining 50.2 percent.

Hannover Re chairman Ulrich Wallin said: “We have a number of reasons for bringing together the agency and specialty primary insurance business of Inter Hannover in the joint venture. This strengthens the focus on our core business in accordance with our strategy of “creating value through reinsurance”.

“At the same time, reinsuring the portfolio enables us to derive even more benefit from the growth opportunities available in specialty business. We can then make use of the capital that becomes available as a result to grow the business further.”

Dr Christian Hinsch, HDI Global chairman, added: “The speciality business has attractive above-average margins and is growing faster every year than classic industrial business.

“This highlights the demand and we want to benefit from that. We will provide our customers and broker partners with even more comprehensive service based know-how.”

AssuredPartners expands London platform with B&W acquisition

AssuredPartners has agreed to acquire Lloyd’s broker B&W as the US broker continues to expand its London operation.

B&W specialises in providing casualty and property insurance and has a strong reputation in placing binding authorities, servicing clients in Canada, Australia, UAE and North America.

Following completion of the deal, AssuredPartners said that the B&W business will continue to be run by its current managing director Michael Bender and that all of its staff will roll into AssuredPartners London office.

Commenting on the announcement, AssuredPartners London CEO David Heathfield said: “The acquisition of B&W allows us to expand our breadth of expertise here in London and service the ever increasing flow of business entering the London market via our US operations.

“We have been looking carefully at expanding APL and believe that the B&W business, together with the experience and expertise held by Mike and his team, will generate cost synergies and revenue growth for all parties immediately.”

Healthfield added that this was an “exciting time” for the London operation and that it is expecting further expansion via acquisitions in the “near future”. The latest deal follows AssuredPartners’ acquisition of London A&H broker, Chisholm, Richards & Hart in 2016.

Bender said that he and his team were “delighted” to be joining AssuredPartners London.

“Whilst B&W is still in its infancy we have had a very successful couple of years and have had various offers to sell during that period. Up until now we hadn’t considered any of the approaches seriously but APL ticked a lot of boxes for us”, he said.

“The added opportunity to tap into AssuredPartners domestically in the USA for potential business will increase our footprint in a territory we were looking to expand into, and with the help of some strategic underwriting partners we expect to be successful with this endeavour,” he added.

AssuredPartners said it expects to receive regulatory approval for the deal in the coming weeks.

JLT Specialty names Roberts as power head

JLT Specialty has appointed Hamish Roberts to lead its power specialty business.

Based in London, Roberts will coordinate with JLT’s power specialists across the globe and will oversee the power business, which combines JLT’s specialist sector knowledge to offer a suite of services to both regulated power companies and independent power producers.

Roberts joined JLT in 2014, most recently serving as business development director. Prior to that, he built and led global power practices for both Aon and Marsh.

Commenting on his appointment, Roberts said: “JLT Specialty already has a strong presence in the power sector and as part of a much larger global offering, I am confident that we can better meet our clients’ needs and provide innovative and more effective solutions in this fast-evolving sector.

“This is an exciting new focus for our already successful team, and one that supports our strategy to become the leading global Power specialist risk adviser and broker.”

Former Anbang chairman sentenced to 18 years in prison

Former chairman of Anbang Insurance Group, Wu Xiaohui, has been sentenced to 18 years in prison for fundraising fraud and embezzlement of corporate funds.

The Shanghai First Intermediate People’s Court also ordered the confiscation of RMB10.5bn ($1.7bn) in assets from Wu, according to state news agency Xinhua.

Wu initially struck a defiant tone in court, denying the charges against him, but in late March relented and “expressed deep self-reflection, understanding of and regret for the crimes and expressed deep remorse for his actions”, according to an official summary from the court in Shanghai.

He potentially faced life in prison, with prosecutors accusing him of defrauding investors by diverting billions from the sale of investment products to related companies he personally controlled.

A series of investigative reports on Anbang in 2017 by Caixin, a Chinese financial news magazine, prompted suspicions that senior Communist party leaders were targeting Wu. His downfall is the latest for China’s financial sector, which since 2016 has endured a sustained crackdown on foreign acquisitions amid worries about capital flight and currency weakness.

Aspen to establish Irish subsidiary

Aspen has applied to the the Central Bank of Ireland for authorisation to set up a subsidiary in Dublin in preparation for Brexit.

The Bermudian (re)insurer said that the new Irish subsidiary - Aspen Insurance Ireland DAC (Aspen Ireland) - will ensure that it continue doing business in the European Economic Area following the UK’s exit from the EU.

It added that it will also utilise the proposed Lloyd’s Belgium Subsidiary through Aspen Managing Agency Limited (AMAL).

Aspen said that it expects the Irish subsidiary to be up and running by the first quarter of 2019, subject to regulatory approval.

Classes of insurance business currently planned to be written via Aspen Ireland include casualty, credit and political risk, accident and health, and commercial property.

Existing UK and non-EEA policies not impacted by Brexit will continue to be written within Aspen Insurance UK Limited (AIUK).

Aspen said that it does not believe that its reinsurance business will be affected by Brexit, subject to political agreements regarding Solvency II equivalence.

Mike Cain, CEO of AIUK and AMAL, said: “Aspen has had a strong local branch presence in the Republic of Ireland for many years. Dublin is, therefore, a logical fit for our new insurance subsidiary given its highly-regarded business and regulatory environment. Aspen Ireland, together with our use of the Lloyd’s Belgium Subsidiary, will ensure that we can continue to meet the needs of our EEA clients and brokers post-Brexit.”

Lyons rejoins AIG as general insurance chief actuary

Arch CFO Mark Lyons has been appointed senior vice president and chief actuary of general insurance at AIG.

Effective 1 June, Lyons will lead the general insurance global actuarial organisation and report to Peter Zaffino, AIG’s CEO of general insurance. He will also serve as a member of the general insurance executive leadership team.

In this role, he will oversee actuarial strategy and provide input into key general insurance strategic decisions, as well as pricing and reserving practices.

Lyons will rejoin AIG after nearly 33 years. He will move over from Arch, where he has served as executive vice president, CFO and treasurer since 2012. He joined the Bermudian (re)insurer in 2002 and served in various capacities within Arch Insurance US operations, eventually rising to chairman and CEO Arch Worldwide Insurance Group.

Prior to that, Lyons held various positions at Zurich US, Berkshire Hathaway and AIG.

Commenting on the appointment, Zaffino said: “Mark’s broad and deep expertise along with his demonstrated track record leading high-performing teams will be a great asset as we redefine the value we deliver to clients and broker partners in a dynamic risk environment. I am pleased to welcome Mark back to AIG as we implement best practices and drive improvement in our core business performance.”

In a separate announcement, Arch announced that its incumbent chief risk officer and actuary, François Morin, will succeed Lyons as CFO effective 25 May.