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EC News Asia Edition (15th November 2018)

  • Publish Date: Posted over 5 years ago
  • Author:by Alan Jarque

Round-up of the latest news and developments from the Asian insurance market with stories from Marsh, QBE, HSBC and more.

Marsh combines specialty unit with JLT 

Marsh & McLennan Companies (MMC) is set to merge the specialty teams of Marsh and JLT into one combined specialty business, Marsh-JLT Specialty.

JLT Specialty CEO Lucy Clarke has been named president of the new unit, which will become effective upon completion of MMC’s previously announced £4.3bn acquisition of JLT.

Based in London, Clarke will be directly responsible for Marsh-JLT Specialty’s energy, credit, marine, financial and professional, private equity and M&A (PEMA), construction, and aerospace business worldwide, and will become a member of the Marsh executive committee.

In addition to becoming vice chairman of MMC and a member of the MMC executive committee, current JLT Group CEO Dominic Burke will assume the role of chairman of Marsh-JLT Specialty and will also continue to be based in London.

Meanwhile, Mark Drummond Brady, JLT deputy group CEO, will become vice chairman of Marsh, based in London. He will also become a member of the Marsh executive committee.

Dean Klisura will take on the position of president of Marsh Global Placement. In this capacity, he will be responsible for placement protocols and standards across all lines within Marsh. He will also lead the non-specialty placement operations of Marsh, including Bowring Marsh and existing multi-line placement hubs. Klisura will remain a member of the Marsh executive committee and will continue to be located in New York.

Clarke, Drummond Brady and Klisura will all report to John Doyle, president and CEO of Marsh.

Commenting on the formation of the new combined specialty business, Doyle said: “It’s exciting to begin planning for the integration of Marsh and JLT. With the formation of Marsh-JLT Specialty, we will be well positioned to grow our specialty business through the combined value proposition of the two firms,

“While our brand is Marsh, Marsh-JLT Specialty will leverage the exceptional reputations of both firms’ specialty units with clients that require specialized products and services.”

Burke added: “I am proud of what JLT’s people, brand and experience can offer the specialty clients of Marsh and JLT, bringing together the best of our two firms. I look forward to working with Marsh colleagues on a successful integration and in leading this industry in exceptional client service and risk expertise through Marsh-JLT Specialty.”

Last week, MMC’s acquisition of JLT received approval from the target’s shareholders, taking the deal one step closer to completion, which is slated for spring 2019.

QBE merges European and Asia operations

QBE has announced a restructure of its operations that will see its European and Asia businesses combined into one division from 1 January 2019.

The Australian carrier said that the changes to its structure are “an important step towards further simplifying its operations building a more streamlined, agile and customer-oriented business".

Following the underwriting remediation in Asia, which QBE said is now largely complete, Asia Pacific will no longer be a separate division.

Instead, QBE intends to create a new international division that will encompass its European Operations and Asia, that will sit alongside a newly established Australia Pacific unit and its existing North America business.

The carrier said that Richard Pryce, currently CEO European Operations, will become CEO International, adding that a new senior leader for Asia will be appointed and will report directly to Pryce.

Meanwhile, the Australia Pacific business – which will include Australia, New Zealand, the Pacific and India – will be led by Vivek Bhatia, currently chief executive of QBE’s Australian & New Zealand operations, who will assume the role of CEO Australia Pacific.

North America will continue as is, led by CEO North America, Russ Johnston.

Alongside the restructure, QBE announced that Jason Brown will move from the position of CEO Asia Pacific Operations to the new role of group chief underwriting officer. 

In his new position, Brown will be responsible for underwriting, pricing and reinsurance placement and will play a critical role in driving QBE’s “Brilliant Basics” agenda globally.

The carrier said that the changes to simplify and streamline its operations will “contribute to the group’s efficiency agenda with much of the administration and governance of the former standalone Asia Pacific operations absorbed by the significantly larger and better resourced International and Australia Pacific divisions”.

QBE chief executive Pat Regan said: “Today’s announcement represents the next step in creating a stronger, simpler QBE. These changes enable QBE to enhance our customer proposition and build a stronger platform for long term, sustainable and profitable growth.

“The Asia Pacific region remains important to QBE. Following a significant and successful program of work to remediate Asia Pacific Operations and its improved underwriting performance, we continue to see opportunities in these markets.”

He added: “Asia Pacific and European Operations are already collaborating in relation to underwriting opportunities and we expect to see further benefits from leveraging our underwriting expertise, scale and global capabilities across these business divisions.

“Aligning Asia with European Operations and the Pacific with Australian & New Zealand Operations will ensure we are best placed to support our customers and partners in those regions.”

“I would like to personally thank Jason and his team for the turnaround they have led in these markets over the past 12 months and look forward to Jason bringing the same level of focus and discipline to our Brilliant Basics agenda,” Regan concluded.

RenRe acquires Tokio Millennium Re for $1.5bn

Bermudian reinsurer RenaissanceRe has struck a $1.5bn cash and paper deal to acquire Tokio Millennium Re (TMR).

The transaction - which will see RenRe acquire Tokio Marine’s reinsurance platform, including Tokio Millennium Re AG and Tokio Millennium Re (UK) Limited – values the business at 1.02x tangible book value at the date of closing.

If closing tangible book value is unchanged from 30 June 2018, this would result in a total consideration of c.$1.5bn, consisting of around $1.22bn of cash and $250mn of RenaissanceRe common shares, with the cash portion part funded by a potential $250mn pre-closing dividend from TMR.

The deal has been unanimously approved by the boards of directors of both companies.

The announcement comes after RenRe faced recent pressure from an activist investor to commence a strategic review of the company, including the consideration of a potential sale.

According to an investor presentation, the acquisition is expected to boost RenRe’s gross written premiums from $3.2bn to around $3.9bn on a pro-forma twelve-month trailing basis.

In connection with the transaction, Tokio Marine has agreed to provide RenRe a $500mn adverse development cover that will protect TMR’s stated reserves at closing, including unearned premium reserves. 

In addition, Tokio Marine and RenRe will enter a business cooperation agreement, which will enhance their business relationship and facilitate cooperation on a portion of the international reinsurance purchases of Tokio Marine and its affiliates.

It was also announced that US insurer State Farm has agreed to invest $250mn in the Bermudian reinsurer through its purchase of RenRe’s common shares in a private placement, after which State Farm will own about 4.8 percent of RenRe’s common shares.

RenRe president and CEO Kevin O’Donnell commented: “We are very pleased to have entered into a definitive agreement to acquire Tokio Millennium Re from Tokio Marine. This transaction will increase our scale, broaden our reach and extend our ability to apply our core strengths to a deeper customer base. 

“Our unique ability to capitalize on large, one-of-a-kind opportunities underscores our global reinsurance leadership, including in casualty and specialty lines, and our ability to execute on our successful, highly differentiated strategy.”

State Farm executive vice president, Paul Smith, added: “We see this as an opportunity to strengthen the long-term relationship we have with RenaissanceRe.”

RenRe said that is expects the deal to be immediately accretive to book value per share, tangible book value per share, operating earnings per share and operating return on equity upon closing, with “material synergies” within the first two years.

The transaction is slated to close in the first half of 2019, subject to customary closing conditions and regulatory approvals.

HSBC named Mark Wang as chief investment officer, group insurance

Mark Wang has been appointed as chief investment officer (CIO), group insurance at HSBC, effective 22 October 2018.

Based in Hong Kong, Wang will provide leadership to the investment teams across HSBC’s life insurance manufacturing entities globally with responsibility for investment strategy, investment governance process and mandate management.

He will work closely with HSBC Global Asset Management to ensure delivery of optimal outcomes for policyholders and shareholders.

He will report to Ms Katrien Verwilst, head of balance sheet optimisation, group insurance, and will also support balance sheet management initiatives for the insurance business globally.

Wang boasts over 20 years of experience in the insurance investment industry.

He has held a number of senior positions, as CIO or fund manager at insurance companies in different parts of the world, including the US, Hong Kong, Malaysia and most recently Singapore where he was CIO for NTUC Income Insurance, a Singaporean insurer.

Before that, he was CIO of AIA Malaysia and CEO of AIA Pension & Asset Management Company..

Manulife Malaysia appoints Sang Hui Lee as CEO

Sang Hui Lee has been appointed as Group CEO for Manulife Holdings Berhad and CEO of Manulife Insurance Berhad, succeeding Mark O'Dell, who retires from Manulife.

Effective 1 November 2018, Sang will be responsible for the company’s operations in Malaysia, including its life insurance, health insurance, wealth management and retirement solutions businesses.

He brings over 25 years of experience in the life insurance and asset management industries, in various senior roles.

His career started in American Life Insurance in Japan before joining AIG/AIA where he had a noteworthy career across investments, finance, marketing and distribution.

Insurance institute outlines training plans to boost HR capabilities

Thailand Insurance Institute (TII) has plans to establish an insurance curriculum by partnering with Malaysia and Singapore to serve the staff of insurance companies and brokerage firms in provincial areas, the institute's director Tadthep Sujitjorn has said.

Tadthep, outlining the TII's training and development ideas, told The Bangkok Post that the institute intends to help develop human resources for insurance businesses over the next three years, beginning in 2019.

The organisation has partnered with Chartered Insurance Institute (CII), on a plan to develop quality human resource for both life and non-life insurance businesses in preparation for quick changes in the business environment. The curriculum is to be composed of courses for financial advisers and life insurance professionals on online learning platforms, with plans to extend the programme to Cambodia, Laos, Myanmar and Vietnam.

Tadthep said: "The insurance industry is facing rapid changes and challenges from both external factors and limited domestic growth. These could affect the future of insurance businesses, so we must prepare capable human resources,"

At the end of 2018, TII plans to join the Society of Actuaries of Thailand to develop its human resource development programme, to reach the goal of becoming a centre for international actuarial examinations,

Generali Global Health appoints Ran Wang as new head of market development

Generali Global Health has appointed Ran Wang as head of market development for the Asia Pacific region.

Wang will report to chief commercial officer Stuart Leatherby.

He joins the company from Aetna, where he held a key strategy and product development role.

He has a broad understanding of market needs in the region, and valuable experience in deploying products and propositions accordingly.