Document 424343

every wednesday • Issue 19 • 5 november 2014
Question marks remain
over SpaceShipTwo crash
Headline grabbing shock losses are not new to the aviation sector, but the crash
of Virgin Galactic’s SpaceShipTwo craft on Friday took the market by surprise.
Investigators probing the accident, which cost the life of one
of the two pilots, have confirmed that a critical mechanism
that would ordinarily only be
used during the descent from
sub-orbital space was activated
at the beginning of the vehicle’s
journey skywards, on ascent.
The US National Transportation Safety Board (NTSB) says
SpaceShipTwo broke apart just
two seconds after this “feathering” system was deployed.
Feathering is supposed to be
one of the vehicle’s key safety
The inquiry team says is not
yet in a position to say why the
mechanism came out when it
“This is not a statement of
cause but rather a statement of
fact. There is much more that
we don’t know, and our investigation is far from over,” NTSB
acting chairman Christopher
Hart told a news conference in
Mojave Desert in California
where the test flight took place.
Pete Sebold, 43, ejected and
landed seriously injured in his
ejector escape pod; co-pilot
Michael Alsbury, 39, was killed.
The pilots were both believed
to have been insured under
personal accident policies. The
insurance broker JLT, which
acts on behalf of Virgin Galactic
said in a statement that it is
providing every assistance as is
appropriate in the tragic circumstances. “Our thoughts are with
the family and colleagues of the
pilot who lost his life and for
the injured pilot,” JLT said.
The spacecraft itself was
insured under an aviation hull
insurance policy for an insured
value of $48 million. The lead
underwriter is widely reported
to be AIG. Expensive instrumentation onboard the space
craft will push up the cost of the
loss to insurers, experts believe.
Continued on page 4 >
Strong insurers could handle
deflationary Eurozone
Insurers in Europe would be able to deal with the pressures of an inflationary
Eurozone, according to ratings agency Fitch.
It expects the strongest and largest insurers to be proactive in
response to deflation and probably to avoid downgrades.
Weaker or niche players could
be more susceptible to multiple
adverse influences and their ratings could be downgraded.
“We devised a scenario in
which deflation occurs: among
other assumptions, inflation falls to negative 1% for
two years; economic growth
Continued on page 4 >
ALSO in this issue: IPCC calls for fossil fuels to be phased out in face of irreversible climate change page 16
2 EDITORIAL comment
21people moves
• Imagination is
needed in period of
effective deflation
• Pool Re faces
fee hike
• APAC 2014 cat
bond limits double
• Innovation, a
challenge and an
• AIG agrees to
$35m fine
• CGSC Argentinian
boss set to leave
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Editorial comment
Imagination is
needed in period of
effective deflation
If Western Europe is really entering a Japanstyle decade of effective deflation, one has to
wonder how chief executives who were either
students or young men at a time of inflationary
threats just about everywhere bar Germany
will cope with the “new normal”.
It’s not just “ordinary” members of the
public who seem to get confused by the difference between low real interest rates and
low nominal interest rates. CEOs too seem to
imagine that the often nominally significant
increases in profits in past years were as “real”
as the bonuses they received that were based
on those increases, rather than just a product
of inflation.
A recent Fitch report on the impact of possible deflation on insurers (see page 1) claims
that most insurers would be able to cope with
deflation in the eurozone. The report tends
to favour the stronger or larger insurers, but
another factor could be the age of the CEO.
As an era of price stability looks set to fall
upon us, bonuses linked to nominal increases
in profit rather than real increases are not good
news for the C-suite bonus hunter.
But executives, understandably, still want
their bonuses, and the more used to them
they are, the more they will want them. This
leads to often unrealistic demands for profit
increases that are based on those achieved in
high-inflation years rather than ones which are
possible in the new reality. That in turn can
lead to strategic errors in pricing. If market
share is not increasing, an old fallback was
either an increase in prices or a cutback in
costs. But in a price-sensitive world and in an
economy where most “easy” cuts have already
been made, these options often lead to longterm loss rather than long-term gain.
That this outlook is endemic to a certain
age-group has been evidenced by the UK Treasury’s plan to increase the fees that it takes in
return for offering the unlimited backstop to
Pool Re, the UK’s terrorism insurance pool.
The existing agreement between the Treasury and Pool Re sees the former take 10% of
premiums. Pool Re CEO Julian Enoizi, wrote
to Pool Re’s members last Thursday warning
of the proposed changes.
The interesting question here is, simply,
“What on earth were the civil servants at the
Treasury thinking?”
And the logical answer is that they were
thinking in exactly the same way as senior
executives in private and listed companies.
In years gone by, inflation had done much of
the hard work. Now that the Treasury has to
do the work itself, rather than just let inflation
increase revenues (a perk of any progressive
tax system) it is resorting to fee increases
where it thinks that it can get away with it.
Ignore the nonsense about this being “the
right time” to review the amount charged. By
any logical train of thought it’s just about the
wrongest time possible. The terrorism pool has
a cushion of more than £5bn. Taxpayers have
never had to pay out since Pool Re’s formation
in 1993.
The Treasury appears to think that demand
is inelastic when, as we are likely to see, it is
anything but.
The net result could be bad all round.
Insurers could walk away from Pool Re as
it is currently structured. That would see a
loss of income for the Treasury. It would also
see tougher caps on payouts for policyholders (and/or tighter terms and conditions),
which could in turn lead to lower economic
activity which in itself could in turn lead to,
yes, you’ve guessed it, lower income for the
As hardened members of the capitalist system, we tend to look down at such economic
insanity, saying that it’s all you can expect
from people who have never worked in the private sector. But think again. How many companies still have old-fashioned profit increase
targets that are based on the past rather than
the present or the likely future? How many
companies offer bonuses if profit can be kept
the same in a deflationary environment? After
all, if the value of money is falling, a constant
profit rate is a real increase. It merits a bonus.
But I’ve yet to see a company announcing
that as a strategy.
The world has had inflation, from modest to
out-of-control, for nigh-on 75 years. A system
of reward and expectation has been built up
that even C-Suiters cannot get rid of. If we are
entering an effectively zero-inflation decade,
Exchequers and senior executives alike will
need to adjust their expectations. That which
they used to be able to take for granted, will
no longer be true. The question is, do they
have the imagination needed? n
Peter Birks, Managing Editor, Reactions
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5 november 2014
top stories
Pool Re faces fee hike
UK finance minister George Osborne is reported to be demanding a significant rise in the fees
received by the Treasury from Pool Re, the scheme set up in 1993 to protect commercial UK property
against loss from terrorist attacks.
The funds currently stand at £5.5bn, built
up from premiums, but if these should be
exhausted, the Treasury steps in to make
up the shortfall. In return for this unlimited
collective backstop guarantee, it charges a
fee of 10% of Pool Re's annual premium
income. For the first time since Pool Re was
established, the Treasury wants to raise that
percentage. The Financial Times reported
that Treasury officials had been negotiating
with Pool Re officials since the start of the
year and the talks were now reaching the
final stages. Late last week Julian Enoizi
wrote to insurers warning them of the
proposed changes, asserting that Treasury
officials had failed to engage properly with
Pool Re, even though there ad been several
meetings between the two.
Pool Re is expected to call an
extraordinary general meeting to vote on
the fee increase. If insurers reject it, there
is a possibility that Pool Re will be wound
up, and terrorist-related risk will return to
the industry.
Airmic chief executive John Hurrell
told the Financial Times that “there is
a dramatic undermining of the Pool
George Osborne
Re scheme by actions being taken the
Treasury. The implication of what
they’re doing is that they’re robbing the
future to pay the present.” He found it
“extraordinary” that Treasury officials
appeared to be trying to push through
the changes in funding without holding a
The Treasury said that "we believe it is
Question marks remain over
SpaceShipTwo crash
< Continued from page 1
At the time of writing it is
unclear whether Virgin Galactic is the beneficiary of the
hull policy however. According to some sources, Virgin
Galactic had not yet taken
delivery of SpaceShipTwo
from its maker, Scaled Composites.
The crash comes exactly 10
years after Scaled Composites, a Northrop Grumman
subsidiary, won the Ansari
XPRIZE spaceflight competition with SpaceShipOne. The
competition was to build a
reliable, reusable, privatelyfinanced, manned spaceship
| 5 november 2014
capable of carrying three
people 62 miles (100 kilometers) above the Earth’s surface
twice within two weeks.
Over 500 “space tourists”
have signed up for a $200,000
ticket to travel on Virgin
Galactic’s suborbital SpaceShipTwo, which has been
dogged by delays.
Virgin’s rival, XCORE
Aerospace, is also taking
bookings, charging $95,000
for a suborbital flight ticket
aboard its Lynx craft, a piloted, two-seat, fully reusable
liquid rocket-powered vehicle
that takes off and lands horizontally.
the right time to review this", claiming that
a rise in its fees would not have an impact
on premiums for businesses or reinsurance
premiums for insurers.
Pool Re has paid out £600m over the
years, but the Treasury has not had to fork
out any cash in return for its fees. The fund
itself has been strong enough to meet any
claims. n
Strong insurers could handle
deflationary Eurozone
< Continued from page 1
drops to 0% for two years; the
German 10-year bund yields
1%; and policy interest rates
are unchanged. The same
assumptions are used in this
report, "said Fitch.
Non-life insurers should be
better placed than life insurers to withstand deflationary
risks, says the report.
However, Fitch notes that
for non-life insurers deflation
would mean that investment
earnings could fall, placing
greater dependence on underwriting.
For life insurers the situation is more severe says Fitch.
“The main concern for life
insurers in a deflationary environment is that interest rates
are low, harming earnings
from fixed-rate bonds in their
investment portfolios,” said
the ratings agency. “Guaranteed liabilities pose a particular threat, as subdued earnings
may be too small to meet
long-term obligations. The
long-term nature of policies
means it may be some years
before severe difficulties arise. “Revenues, and the level of
guaranteed payments, have
already fallen in response to
low interest rates, limiting
potential flexibility.”
As part of the final step of its development plan for the period 20102014, Société Tunisienne de Réassurance ("Tunis Re" or the
"Company") plans to open its capital through a capital increase
reserved to a strategic partner ("Strategic Partner"), to 25% of its
share capital after increase (the "Transaction").
The extraordinary general meeting held September 19, 2014 decided
a capital increase reserved to a Strategic Partner with the amount of
25 million dinars, divided into 5,000,000 shares with a nominal value 5
dinars, from 75 million to 100 million dinars.
It’s expected that the Strategic Partner provide strong expertise in
order to participate to the improvement of its technical and financial
ratings including the strengthening of its financial and commercial
capacity at the regional and international levels.
 Tunis Re, a leading reinsurer in the Tunisian market, was
established March 25, 1981 at the initiative of the authorities with
the help of insurance and reinsurance companies as well as some
local banks.
At the end of June 2014, Tunis Re generates nearly 64% of its sales
in the local market and 36% in the MENA region including 14% in
To confirm its status as a regional reinsurer, Tunis Re initiated in
2012, its first representative office in Ivory Coast.
Tunis Re has been assigned several national and international
missions, including the reduction of remittance flows of reinsurance
abroad and contributing to the establishment and development of
national reinsurance pools. Tunis Re is in charge of their
management on behalf of the Tunisian State.
Tunis Re is the first African reinsurance company listed on the stock
market. The IPO funds raising was achieved in May 2010. In 2012,
a second public offering was performed to increase the capital of
Tunis Re from 45 to 75 MTND.
Tunis Re is certified to MSI 20000 standards by the Institute of the
Paris Stock Exchange since October 2010.
The international rating agency AM Best reaffirmed, in July 10,
2014, the technical and financial ratings of Tunis Re B + (Good) with
a stable outlook, which confirm the strength of the Company and its
ability to overcome difficulties.
This confirmation reflects the good capitalization adjusted on the
Company risk, better underwriting policy and a strong position in its
In early 2011, Tunis Re has launched a specialized unit of islamic
reinsurance "Retakaful" to target high added value crenel. This
structure operates in accordance with the Islamic insurance rules
and norms and is followed by a Chariaa supervisor.
Investors wishing to be pre-qualified to participate in the tender are
invited to express their interest individually or by forming a
consortium in accordance with the terms and calendar described in
the pre-qualification document ("DPQ").
The strategic partner should be an internationally renowned financial
A direct insurer or reinsurer interested in a presence in the
African and the MENA region markets
A bank, a specialized investment fund or an international
renowned financial institution those are willing to expand
or diversify its insurance and reinsurance activities.
Expressions of interest must be submitted at Banque d'Affaires de
Tunisie ("BAT") no later than November 14th, 2014 at 17:00 whose
contact details are mentioned below.
Tunis Re reserves the right, at any time during the process, to not
retain one or several Investors to participate in the process of
increasing the capital, in case of non-compliance by interested
Investor(s) with the current rules of law and public order.
Investors interested in participating in the Transaction must register
first. To register, Investors should submit to the Advisor, whose
details appear at the end of this notice, by fax or email, the
Presentation Sheet ("Presentation Sheet") dully filled according to
model available at the Advisor.
Then, Investors will be invited to:
sign the non-disclosure agreement (the "NDA") available
at the Advisor (Cf. contact details at the end of this notice.
Pay the non-refundable registration fee, amounting to
3,000 dinars or 1,300 Euros or 1,700 USD.
After steps (i) and (ii) Investors will be invited to withdraw DPQ,
which presents the investment opportunity, the process and prequalification criteria.
Registration fees are payable by certified check or by bank transfer to
BAT in its account # (STB Bank).
Pre-qualified investors will have access to the tender document
("DAO") and the Rules of data room, and have the opportunity to (i)
conduct due diligence works as part of a virtual data room that will be
open according to a timetable and specific rules (rules of the data
room and list of available documents), (ii) to visit the Company
buildings and (iii) meet with its management.
The closing of the Transaction is planned for February 2015.
Contacts and information:
Banque d’Affaires de Tunisie ("BAT" or le "Advisor") was retained by Tunis Re as exclusive advisor to realize the Transaction. Any
request for information, NDA, presentation Sheet or DPQ must be sent to:
Mr Thameur CHAGOUR / Mr Tarek MANSOUR
10 bis, Rue Mahmoud El Materi, Mutuelleville, 1002 Tunis, Tunisie
Tel.: +216 71 143 804 / +216 71 143 806
Fax: +216 71 891 678
Emails: [email protected] / [email protected]
Web site:
top stories
Willis reports $7m net loss in Q3
Willis Group has reported a $7m net loss in the third quarter of the
year compared with a loss of $27m in the third quarter of 2013.
The company recorded total revenues of
$812m in the third quarter of 2014 which
represented an increase of 2.1% from the
$791m the broker reported in Q3 2013.
Willis also noted that its reported commissions and fees also grew to $808m in the
third quarter from $791m in the third quarter
of 2013. The broker reported a 2.5% growth
in organic commissions during the third
three months of the year.
The company reported $17m of restructuring expenses related to its operational
Chubb redefines
Syria/Sudan claims
improvement programme during the quarter.
The company also lost $7m through what it
described as unfavourable currency movements in Q3. Willis’ group chief executive Dominic
Casserly expressed his pleasure at the
growth in the companies organic commission growth which he said was mainly
because of the company’s international
“Our overall organic commissions and
fees grew 2.5% in the quarter,” Casserly
said. “This reflects good growth in Willis
International, led by emerging markets and
solid performance in Willis North America.
Within our Willis global businesses, reinsurance continued to grow despite difficult
headwinds while the UK insurance business was down, primarily due to a difficult
comparison in the construction specialties
Casserly continued: “On expenses, in the
quarter we started to see the moderation in
growth relative to the previous quarters that
we expected. Additionally, we continued to
make very good progress on our Operational
Improvement Program. I am pleased that
our current expectations for savings from
actions we expect to take in 2014 and 2015
are ahead of initial estimates- this bodes
well for the program.” n
Aon Benfield Q3 revenue declines
New Jersey-based insurer Chubb Corp has
renamed its claims adjusters in Syria and
Sudan as "surveyors" rather than "representatives", the term previously used. The
move followed a US Securities & Exchange
Commission inquiry into business in nations
blacklisted by the U.S. because of terrorism
The third-party adjusters examined marine claims are now being called “surveyors” rather than “representatives,” according
to a just-released September 18 letter from
the insurer to the SEC. Chubb said in its
letter that, while it does not sell coverage in
Sudan or Syria, it provides a list of surveyors in the eventuality that they are needed by
multinational clients
“The company is strongly committed to
compliance with US economic sanction
laws,” wrote Maureen Brundage, Chubb’s
general counsel in the letter. She added that
Chubb does not have any operations, employees or agents in Sudan or Syria.
The SEC reportedly contacted Chubb on
August 7 about a document on the insurer’s
website that identified claim representatives
in the two countries. n
| 5 november 2014
Reinsurance broker Aon Benfield booked revenue of $371m for the
third quarter, down from $389m in the same period last year. For the
year to date, revenues declined to $1.14bn, from $1.17bn.
Aon's retail brokerage reported a small gain
in revenue for the quarter, up to $1.46bn,
from $1.42bn in Q3 2013. For the year to
date, revenues rose slightly to $4.62bn, from
Aon observed that for Q3 and for the first
nine months of the year "we continued to
face certain headwinds that have adversely
impacted our business. In our Risk Solutions segment, these headwinds included an
unfavorable impact from foreign currency
exchange rates, economic weakness in
continental Europe and a negative market
impact in our Reinsurance business".
Aon said that there had been "unprecedented disruptions in the global economy",
with a repricing of credit risk and a deterioration in the financial markets. The
broker said that "weak economic conditions
in many markets around the globe" had
reduced customer demand for retail and
reinsurance broking products.
Referring specifically to reinsurance,
Aon said that there had been an unfavourable market impact in treaty and a decline
in capital markets transactions and advisory
business. This was only partially offset by
a growth in facultative placements and net
new business growth in treaty placements
Aon as a hole reported net income of
$315m for the third quarter, up from $256m
in the same period last year. For the first
nine months, net income rose to $964m.
from $758m. n
top stories
Gonzalo triggers Anguilla
rainfall cover
Hurrciane Gonzalo has triggered The Caribbean Catastrophe Risk Insurance Facility’s (CCRIF)
parametric excess rainfall insurance product for the first time.
This has caused a $500,000 payout to the
Government of Anguilla.
Anguilla and eight other Caribbean
countries purchased the parametric excess
rainfall policy in June as part of its annual
renewal. Anguilla also renewed its tropical cyclone
cover, but the modelled losses required to
trigger this were not enough.
Gonzalo passed directly over Anguilla as
a Category 1 hurricane on October 13, 2014,
leaving communities flooded.
Developed by CCRIF, Swiss Re and
Kinetic Analysis Corporation (KAC), the
excess rainfall product is aimed primarily at extreme high rainfall events of short
duration (a few hours to a few days) whether
they happen during a hurricane or outside
of one. The excess rainfall product is parametric,
which means that a payout can be made
within 14 days after a rain event that triggers
a country’s policy, without waiting for damage and loss assessments on the ground.
This payout is the second payment the
Government of Anguilla will receive from
CCRIF. In 2010, CCRIF made a payout of $4.2m
to Anguilla under its tropical cyclone
policy following Hurricane Earl, which
passed close to the island in August 2010. CCRIF is working with regional partners, particularly the Caribbean Institute
for Meteorology and Hydrology (CIMH),
and local disaster management officials
in Anguilla to collect on-the-ground
information on the impacts of Hurricane
Gonzalo. “CCRIF is hopeful that the rapid payment of funds to Anguilla under its excess
rainfall policy will assist the Government
of Anguilla in addressing immediate
needs,” said CCRIF in a statement.
“The Board and operations team at
CCRIF wish the country a speedy recovery
from the impacts of Gonzalo,” it said. n
Argo boosts profit despite
increased competition
Argo Group ended the third quarter with only one of its business segments recording significant gross written
premium growth, but the Bermuda-based company did manage to boost its net profit during the period.
It was Argo’s excess and surplus lines business which recorded the biggest increase in
gross written premiums, with the $146.5m it
posted in the three months to September 30,
2014 growth of $7.1m compared with the
same period last year.
However, even this segment saw its potential growth constrained. Argo did see growth
in higher margin business, although it said
this was partially offset by competitive
market conditions and premium reductions
as it looks to trim its commitment to the
commercial auto segment.
Argo’s commercial specialty unit also
managed to record a year on year increase
in gross written premiums during the third
quarter, although at just $100,000, the
growth was marginal.
“Growth at Argo Surety and Rockwood,
our mining business, was offset by modest declines in premium at Argo Insurance
and Trident, our public entity business,”
Mark Watson
explained Argo.
The top line at both Argo’s international
specialty and Lloyd’s syndicate 1200 also
suffered from the high level of competition
currently at play within the wider re/insurance industry.
International specialty posted a drop of
7% year on year in gross written premiums
to $64m, which, as Argo explained, was
primarily due to increased competition in
the short-tail reinsurance segment.
For its Lloyd’s operation, gross written
premiums dropped by $1m year on year to
“The decline in premium reflects continued pressure on premium rates in the
Lloyd’s market, particularly in property
related lines,” Argo said.
In spite of these declines, Argo actually managed to increase its net profit to
$123.5m, up $28.1m year on year.
Its combined ratio also improved, dropping 2.3 percentage points compared with
the third quarter of 2013 to 96%.
Argo Group’s chief executive, Mark
Watson, said the third quarter results “were
“Our underwriting margins continue to
steadily improve. Top line growth was modest as we continue to focus on our higher
margin businesses while reducing in areas
where we do not see sufficiently attractive
returns.” n
5 november 2014
top stories
Rocket explosion casts a
shadow over space insurers
The destruction of an unmanned supply rocket bound for the International Space Station shortly after its
launch on October 28 is bad news for the space insurance market. The sum insured isn’t large by space
standards but it comes on top of a series of big insured losses to hit the market this year.
According to the website Seradata Space Intelligence, the launch of the Orbital Sciences
Antares 130 rocket carrying the Cygnus Orb
3 cargo craft was insured by Orbital Sciences
Corp for $48m million. Around 20% of the
losses will be borne by Lloyd’s. Antares, built
by Orbital, blew up spectacularly seconds
after leaving the seaside launch pad at the
Wallops Flight Facility in Virginia.
The loss will be the fourth claim in this
year of account for space insurers. In October
a significant Russia-directed satellite beam
aboard the ABS-2 satellite launched in February failed. A partial loss claim, it will still
result in an insurance claim of up to $214
million, an unusually large sum for a single
beam, industry officials said.
In May, an advanced Russian communications satellite was destroyed when its Proton
rocket booster failed minutes after lift-off
from the Baikonur Cosmodrome in Kazakhstan. The Express AM4R spacecraft, which
was worth around $200 million, was for a
15-year mission beaming radio, television,
broadband Internet and telephone services
across Russia and neighbouring countries.
In April, Hispasat’s Amazonas 4A telecommunications satellite, launched in March,
suffered an anomaly in its power system but
was reported to be stable in orbit. Madridbased Hispasat said at the time that it has
full insurance coverage for the satellite that
would compensate it for the satellite’s loss,
for a partial failure or for a delay in its entry
into commercial service. David Wade, space underwriter at Lloyd’s
insurer Atrium says the Antares loss adds
to an already difficult year for his line of
business. “There have been some significant
claims in the space market this year and this
will probably bring the loss ratio up to 85%90%. So it’s not looking great. The volatility
of this line of business means we like to see
News in brief
Apollo to buy Italian bank’s
insurance businesses
An affiliate of private equity company Apollo is
set to buy the insurance assets of Italy-based
Banca Carige, which was found to have a capital
shortfall of about €700m in a pan-European
stress test last year that found nine Italian
banks to be short of capital. A recent stress test
found that Carige still needed to raise cash.
Carige said last week that it would sell its life
business Carige Vita Nuova and non-life business Carige Assicurazioni.
The bank said that the sale would reduce its
capital shortfall by about €100m.
No pressure on premiums says IAG chief
Insurance premiums in Australia are not
expected to rise significantly during the current
financial year, according to IAG chief executive
officer Mike Wilkins.
“We don’t see that there is a lot of pressure
| 5 november 2014
on premiums to rise,” said Wilkins told AAP.
Wilkins said low inflation and stabilisation in
the reinsurance market had taken the pressure
off for premium rises for the time being.
Higher reinsurance costs have played a key
role in pushing up insurance premiums in recent
years reported AAP.
“We think we’re in a place of equilibrium and
on that basis really all we’ve got to do is look to
recover the underlying inflation that’s been coming through on our claims and that’s negligible,”
he said.
IAG is expecting natural disaster claim to run
to around $700m for the year, up from around
$540m the previous year.
Wilkins added there’s no certainty around
that number. “There’s only one thing I know
about that $700m, it won’t be right,” he said.
“I’m just not sure which side of $700m it will
be on.”
better returns than that,” Wade told Reactions.
“All told, claims will be around $600 million
this year compared with income totalling
around $680 million for the year. Not a great
The flight was to be the third contracted
mission with the National Aeronautics and
Space Administration (Nasa) and the rocket
was carrying nearly 5,000 pounds (2,200kgs)
of supplies to six astronauts aboard the International Space Station (ISS).
It included experiment kits for the astronauts to conduct tests on blood flow to the
human brain and the analysis of meteors.
The Antares rocket was part of Nasa's programme to contract out routine cargo resupply to the ISS. The US space agency seeded
development of Antares - and the supply ship
it launches, Cygnus - by giving incentive
payments to manufacturer Orbital Sciences,
to help them develop a low-cost, commercial
vehicle to fill the cargo gap left by the retired
space shuttles.
The rocket engines were developed as part
of the Soviet moon programme. But they
were put in storage and then refurbished, David Wade explains. “These engines are tested
prior to flight, which doesn’t always happen
with other engines. They have had four full
flights of Antares that have gone well, so it’s
too early to say that the engine is at fault,” he
The day after the Antares failure in the US,
Russia successfully launched its own supply
mission to the ISS, the cargo ship Progress,
from the Baikonur launch site in Kazakhstan.
Nasa said it would be reordering its
manifest on a separate SpaceX mission due
in November to make sure necessary supplies
reached the crew before a safety buffer runs
out in March.
“The number of losses this year, after 2013
which was a loss making year, shows that
current rates are not sustainable. Current
rating levels are just inadequate. Longer term
some adjustments will have to be made,”
Wade said. “Most of the launches taking
place this year were written two to three
years ago, at higher prices. If we had written
that business at today’s rates we would definitely be running a loss by now. As it is we
are just about breaking even.” n
top stories
XL reports strong Q3 earnings
XL group has reported strong third quarter earnings as group chief executive Mike McGavick warns
expense management and the ability to gain leverage from the prior strategic investments will
become increasingly important to the reinsurer in the tough operating environment.
The reinsurance arm of the business contributed another strong quarter with an underwriting profit of $90m and a combined ratio
of 79.2%, according to McGavick.
The results were $25m and six points
improved on the prior year quarter on lower
gross written premium, which McGavick
attributed to “the quality of our reinsurance
book and the talent of our underwriters,” in
a call to investors and analysts.
Operating income for the third quarter
was $187m, compared to $155m in Q3
2013. Net income attributable to ordinary
shareholders was $72m or $0.27 per share
on a fully diluted basis.
Total P&C underwriting profit for the
quarter was $144m, $67m greater than the
prior year quarter. This was driven by better year-over-year P&C combined ratio of
90.1% and a loss ratio of 59.1%, technically
six points better than the third quarter of
The group’s insurance arm segment
produced $54m in underwriting profit in the
quarter and an accident ex-CAT combined
ratio of 94.8%, which is $42m and three
points better respectively than the prior year
“From a year-to-date view, the majority
of our core metrics including gross written
premium, our calendar combined ratio and
loss ratio are also all better than the same
period a year ago,” said XL group chief
executive officer, Mike McGavick, in an
investors’ call.
“While we, like the majority of the
industry benefited from a relatively quiet
CAT quarter, the primary driver of these
results were the continuing improvement of
our businesses and the cementing of our reunderwriting and remixing actions,” added
McGavick. n
PartnerRe Q3 results beat
Wall St forecasts
PartnerRe has reported net income of $182.2m for the third
quarter of 2014, down on the $319.2m reported for the 2013
comparable quarter.
The reinsurer's Q3 operating earnings
of $226.7mn or $4.47 per share beat the
analysts' consensus of $3.60 a share, despite
falling below the $311.2mn or $5.70 a share
of profits recorded in the same quarter last
The Bermuda-based reinsurer's reported
figures for the first three months also included net after-tax realised and unrealised
losses on investments of $35.4m, up 96%
Costas Miranthis
year-on-year (Q32013: $1.3m).
The reinsurer's figures surpassed Wall
Street expectations with average estimate of
analysts surveyed by Zacks Investment Research was for earnings of $3.44 per share.
Net income for the first nine months of
2014 was $735.5m, more than double the
previous year's figures of $339.4m for the
same period.
For the first nine months of 2014, Partner
Re's net premiums written of $4.5bn were
up 7%, with the increase driven by lower
catastrophe expectations and further trimming of its catastrophe premium volume at
PartnerRe president and chief executive
officer, Costas Miranthis said, "I am very
pleased with our third quarter results. While
the absence of major catastrophe losses and
the continued favourable reserve development were important factors in our operating performance, the foundation of these
results is our seasoned diversified portfolio.
Our strong operating results allowed us to
absorb some volatility in investment markets
and continue on our path of compounding
book value per share."
Miranthis added, "There has been no
change in our view of the current competitive environment. We continue to see current
conditions as challenging, but we are confident in our ability to identify opportunities
to create value for our shareholders over the
long-term." n
News in brief
Aon Benfield opens
Houston fac office
Aon Benfield has opened a new facultative
property branch in Houston as part of
its strategic focus on delivering industry
specialisation to clients throughout the US.
Alongside the new office, the broker has
appointed Andrea Mulvey to the Houston-based
facultative property team as an associate
director, while in Chicago, Justin Conway has
joined the Midwest property facultative team
also as an associate director.
5 november 2014
top stories
UK Club’s members face
6.5% general increase
Montpelier Re
takes Q3 profit hit
The UK Protection and Indemnity (P&I) Club will be imposing a
6.5% general increase on its members come the market’s renewal
on February 20 next year, a marked reduction on the 10% rise it
sought earlier this year.
One of the 13 International Group members,
the UK Club said the 6.5% rise “reflects the
club’s commitment to maintain balanced
underwriting and put the club in the best position to meet the challenges of the future”.
“In setting the general increase, the
News in brief
Everest Re launches new
$350m Kilimanjaro Re bond
Bermuda-based Everest Re has launched a new
Kilimanjaro Re US and Canada quake-only cat
bond, its second issuance for the year following
its insurance-linked securities (ILS) market following its debut $450m issuance in April.
The new single-tranche deal will focus purely
on US and Canada earthquake risks with a
per-occurrence weighted industry loss trigger. It
carries a five-year term, which is relatively rare
in the ILS market, Reactions sister title Trading
Risk reported.
In its latest issuance, Everest Re is seeking a
source of fully-collateralised retrocessional reinsurance protection against losses from North
American earthquakes.
The reinsurer, in combination with the initial
Kilimanjaro bond, is aiming to raise around
$800m of cat bond protection from investors.
Kilimanjaro Re Ltd., Everest Re’s Bermuda
domiciles special purpose insurer, will seek to
issue a single tranche of Series 2014-2 Class
C notes which will be exposed to U.S. earthquakes, according to
The deal is said to have a five-year term and
the structure has been designed around a PCS
industry loss trigger.
| 5 november 2014
UK Club board is mindful of the balance
between the needs of the club's members on
the one hand, and the Club's commitment
to maintaining balanced underwriting and
sound financial planning on the other,” it
Last year – the 2013/14 policy year –
has emerged as one of the most expensive
claims years within the last two decades,
and as such, the Club feels the need to
increase its premium income.
Despite the impact of these claims, the
UK Club’s capital position remains strong.
At the half year point, free reserves and
capital totalled $529m, while its total assets
amounted to $1.6bn.
“The 2013 policy year has proved to be
particularly expensive for the Club due to
a few large claims,” said Hugo Wynn-Williams, the chief executive of the UK Club's
managers, Thomas Miller P&I (Europe).
“The strength of the Club has enabled it to
weather this storm and emerge with a stable
level of capital. The Club has built a firm
foundation from which it will continue to
provide first class service to our members.”
According to figures obtained from broker
Tysers, the UK Club is the third largest
P&I mutual within the International Group
behind Norway’s Gard and the North of
England club. However, during the 2013/14
policy year, the UK Club recorded the
second largest premium volume at almost
$393.3m. Gard topped the list with just over
Alan Olivier, the UK Club’s chairman,
said: “The board is determined to maintain
our highly disciplined approach to underwriting to secure the long term stability of
the Club. The board is equally determined
to support our members through the current
commercial environment.”
Tysers, in its 2014 P&I Report published
at the end of September, predicted “we can
expect another sizeable general increase for
2015 to reflect the Club’s commitment to
disciplined financial management”.
While the UK Club’s members will face
the 6.5% general increase, further costs
could be added on top when the International Group reinsurance contract is renegotiated and confirmed early next year. n
Short-tail reinsurer Montpelier
Re’s third quarter earnings
have been hit by an increase in
loss expenses in the first nine
months of 2014.
Short-tail reinsurer Montpelier Re’s third
quarter earnings have been hit by an
increase in loss expenses in the first nine
months of 2014.
The Bermudian reinsurer reported a fall in
net income for the quarter of $42.9m from
$70.4m for the comparable third quarter in
The reinsurer posted a clear underwriting profit with a combined ratio of 74%,
up from 53.9% in the third quarter of 2013
when no catastrophes hit the reinsurer. Combined operating ratio figures for the first
nine months were 67.3%, up from 61.5% for
the comparable period in 2013.
Net premiums written in the third quarter
were up 13% year-over-year to $115m
(Q32013: $101.5m), when adjusting for reinstatements, with increased writings within
the firm’s Lloyd’s division and collateralised
reinsurance segments offsetting a decrease
in writings at Montpelier Bermuda. Net premiums earned in the third quarter
were up 7% to $165m on the same basis.
?The loss ratio for the quarter was 38%,
which includes $20 million of net losses
from June 2014 catastrophe events, offset
by $37 million of favourable prior year loss
reserve movements. Loss expenses for the
period came to $100m compared to $63m
for the same period.
Montpellier Re president and chief
executive officer, Christopher Harris, said:
“Our underwriting teams executed well in a
competitive market environment during the
third quarter, driving solid profitability with
a 74% combined ratio.”
“We are well positioned to navigate a
challenging market by building on our
strengths as a long-term partner for our
investors and clients,” added Harris. n
top stories
APAC 2014 cat bond limits double
Asia Pacific catastrophe reinsurance demand has increased
throughout 2014 but reinsurance premium spend has seen a big
drop, Guy Carpenter reported.
There was a continued increase in 2014 of
total Asia Pacific catastrophe limit purchased. However, the weakening of some important currencies has meant that reinsurance
premium spend in the region has declined
significantly. “Benign loss activity, program consolidation and restructuring, increasing retentions
by global carriers, pressure from increasing
supply and the weakening of key zone rates
of exchange has propagated the unique trading environment for reinsurance buyers in
the region,” said Guy Carpenter. It is estimated that over the past twelve
months the weakening of key zone currencies against the US dollar alone has
extracted $315m of regional reinsurance
premium spend from the market on a likefor-like basis. Alternative capital activity remains sub-
dued compared to other regions. However, outstanding catastrophe bond
limit in the region has more than doubled
over the last year to $1.625bn. When combined with capacity from collateralized vehicles Guy Carpenter estimates
that close to 6% of regional cat limit bought
is now from alternative capital. This capacity is mostly concentrated
in Japan and Australia and excludes the
supporting aggregate excess of loss and
retrocession products where the percentage
would be significantly higher. “With a reduction in the cost of capital
supporting the industry and enhanced innovation we see an environment where insurance companies can find ways to optimize
their businesses through expanding and
enhancing the reinsurance products that protect earnings and capital,” said James Nash,
Guy Carpenter’s chief executive officer for
the Asia Pacific. Growth rates in catastrophe limit have
failed to keep pace with overall economic
growth in the Asia Pacific region over the
past ten years. This is more extreme in the emerging
markets where insurance penetration is still
modest. “The onus now is on the industry to find
new and pioneering ways to deploy its
capital to meet the obvious need,” said Guy
Carpenter. The industry must find ways to support
economic growth through the management
of catastrophe risk and with a product suite
that stimulates insurance and reinsurance
buying. n
Rapid Asian growth may lead to flood cat: Guy Carpenter
Rapid economic growth in Asia could lead to another catastrophic flood akin to that of the Thailand
floods of 2011, Guy Carpenter reported.
It has released a report with an in-depth
study of the flood potential in Asia along
with the prevention and protection systems
in place.
“Our intent in publishing this report is to
identify the flood potential in Asia so the
insurance industry can be better prepared
when the next flood occurs,” said Michael
Owen, head of GC Analytics, Asia Pacific. “Our findings show that the potential areas at risk are in no way limited to the ones
considered. “And more importantly, with economic
growth and increased wealth of the various
countries in the region, historic events that
did not cause much damage could potentially be catastrophic if they were to happen
again,” said Owen.
In addition to rapid economic growth in
Asia, these developing economies are also
experiencing a shift in the population from
rural to urban areas, particularly in China,
Indonesia, Thailand, Vietnam and Malaysia
where the concentration of people in urban
areas has grown by more than 50% between
1990 and 2010. Much of this growth is occurring in floodprone areas, said Guy Carpenter.
The 2011 Thailand floods lasted several
months, severely damaged and disrupted
manufacturing operations across the region. Such a flood loss was unprecedented in
history. n
5 november 2014
| 11
top stories
Energy, aviation losses hit Validus
Bermuda-based Validus has reported net income $39.7m for Q3
2014, down 78% from the $183.4m reported for the corresponding
period last year For the year to date net income was $355.4m,
down from $437.3m for 9mo 2013.
Book value per diluted common share rose
1.2% on the quarter to $38.70, reflecting quarterly growth of 1.2% inclusive of
dividends. Validus Chairman and CEO Ed Noonan
noted that the company's results for the
quarter were impacted by $61.4m of losses
"concentrated in the classes of aviation war
and energy." Noonan noted that "Validus takes on volatile business as we get paid more for assuming the risk. By definition this means that
our results will sometimes be lumpy, but I’d
rather have a lumpy high return on equity
than a lower consistent one. Our thoughtful
underwriting of these classes of business is
what has allowed Validus to create strong
growth in book value since the company’s
formation.” Gross premiums written for Q3 were
$359.0m compared to $356.8m in Q3 last
However, net earned premiums for Q3
declined to $494.7m, from $531.3m in the
corresponding period in 2013. Underwriting
income for Q3 was $92.1m, down 44.8%
from the $166.8m reported in the same
period last year.
The combined ratio for the latest quarter was 81.4%, which included $55.6m
of favourable loss reserve development.
That benefited the loss ratio by 11.2pp and
compared to a combined ratio for Q3 2013
of 68.6%, which included $65.1m of favourable loss reserve development, benefiting
the loss ratio by 12.2 percentage points.
Net operating income available to Validus
for Q3 2014 fell to $77.3m from $155.2m
Flat Q3 for White Mountains
Bermuda-based White Mountains Group, the parent of primary
operation One Beacon and reinsurance business Sirius, has
reported an “essentially break-even” quarter for Q3 2014, although
the book value was up 3.8% for the year to date.
White Mountains chairman and chief executive Ray Barrette said that "it was a flat
quarter. Investment returns were lacklustre as
a small gain in bonds was offset by a loss in
equities and a $7 a share loss from currency
Adjusted comprehensive loss for Q3 was
$13m, down from a gain of $104m in the
same period last year. For the year the gain was $142.8m, down
from $212.2m.
| 5 november 2014
Earned premiums for the quarter rose
to $538.6m, from $500.4m in Q3 2013.
For 9mo 2014 they were $1.54bn, up from
At reinsurance operation Sirius the combined ratio was 79% for the quarter, a 10
percentage point improvement on the same
period last year.
The combined ratios this year benefited
from lower catastrophe lossesQ3 2014
for the same period last year, down 50.2%.
For the year to date, GWP was $2.03bn,
down 6.3% from $2.16bn in the corresponding period last year.
Net premiums earned fell 10.3% to
$1.44bn from $1.61bn
Underwriting income for 9mo 2014 was
$391.3m, down 20.9% from $494.5m in
9mo 2013. The combined ratio rose to
72.9%, from 69.3%.
Net operating income available to Validus
for year to date reached $356.0m, down
26.2% from $482.3m for the nine months
ended September 30, 2013. n
included 6pp of catastrophe losses, including from $4m hurricane Odile and $4m from
hailstorms in Bulgaria. This compared to
14pp ($31m) of catastrophe losses in Q3
2013, primarily from hailstorm losses in
The first nine months of 2014 included 4pp
of catastrophe losses ($29m) compared to
11pp ($68m) in the first nine months of 2013.
Favourable loss reserve development was
8pp ($19m) for Q3 and 5pp ($35m) for 9mo
2014. These were primarily due to reductions
in property loss reserves, including reductions for prior period catastrophe losses.
The relevant percentages last year were 7pp
($15m) in the third quarter and 4pp ($26m) in
first nine months of 2013.
Sirius Group chief executive Alan Waters
said that "despite a difficult market environment, written premiums exceed prior year for
both the quarter and nine months, reflecting
the strength of our long-term partnerships
across the globe".
Adjusted book value grew by 6% over the
first nine months, although this was reduced
by three points from the unfavourable effects
of foreign exchange, particularly the US dollar's 12% appreciation against the Swedish
Earned premiums for the nine months at
Sirius were $656.5m, up from $646.9m in
the same period last year. Pre-tax income was
$221,9m, up from $113.1m in 9mo 2013. n
top stories
London market boosted by
premium income from overseas
“It is no longer appropriate to use only
premium physically written in the square
mile as a measure of the size of the
London market,” – Dave Matcham, chief
executive of the IUA
A new measure of premium income has been coined by the
International Underwriting Association - overall intellectual
and economic premium.
The term is intended to more closely represent the total insurance and reinsurance
business generated by London, even if it is
not actually written in London.
The overall intellectual and economic
premium total for the London company
market in 2013 was £24.276bn, according to
a new report from the IUA, almost the same
as 2012 (£24.225bn).
The IUA says there’s a rise in income
that is identified as written by companies in
other locations around the world but subject
to a level of oversight by London operations. Such business accounted for £6.831bn
of premium in 2013, a rise of more than
10% on the total reported 12 months ago
“It is no longer appropriate to use only
premium physically written in the square
mile as a measure of the size of the London
market,” Dave Matcham, chief executive of
the IUA, said in a statement. “Local offices
increasingly have the skills to underwrite
more business locally and are able to access
mobile capital.
Combining the overall company market
figure of £24.276bn with the £26.106bn
gross written premium reported by Lloyd’s
of London for 2013 gives a total income for
the London market of £50.382bn.
Gross premium written in London totalled
£17.445bn in 2013, while the restated
figure for 2012 was £17.712bn, indicating
a decline in income of 1.5% over the year.
The IUA attributes the dip to the soft market
conditions and a deteriorating exchange rate.
“In addition, some organisations may have
written more premium through their Lloyd’s
platform if they do not have the same
licence structure available on their company
side and perhaps used to write such business
as reinsurance,” the report added.
London company market business continues to be dominated by direct and facultative placements (81.2%) compared to treaty
business (18.8%). Direct premium accounts
for two thirds of the combined direct and
facultative total.
Property is the most significant class of
business, making up just under one quarter
of total income. Liability and marine are
also important lines of business, the IUA’s
report shows.
The UK and Ireland are still the most
important source of income for business
written in London, accounting for 54% of
premium in 2013. For business written in
other locations but overseen by London
operations, Europe is the biggest regional
contributor supplying 42% of business, followed by Asia on 14%.
“Nearly £3bn of premium income in 2013
was written in European offices outside the
UK and Ireland, but managed by London
company market operations,” Matcham said
in a statement. “This figure illustrates the
vital economic importance of the trading
rights afforded by the EU’s financial services
passport to IUA member companies.” n
News in brief
Zurich closes sale of Russian
retail business
Zurich Insurance Group has successfully closed
the sale of its general insurance retail business
in Russia to OLMA Group that was announced in
early July.
The insurer said in a statement that the transaction generates a loss through net income on
disposal which will be recorded in Zurich’s fourth
quarter results.
This is mainly due to the realisation of previously unrealised currency losses already reflected
in shareholders’ equity. The loss is expected to be
in line with what was announced in July.
Zurich will retain and further build on its
Russian corporate business which is primarily
focused on underwriting risks for large Russian
and multi-national commercial customers.
5 november 2014
| 13
top stories
Marsh reports
13th double-digit
growth quarter
Global broking firm Marsh
& McLennan Companies
has reported its thirteenth
consecutive quarter of doubledigit growth in the third quarter
despite toughening market
Consolidated revenue in the third quarter of
2014 was $3.1bn, an increase of 7%, compared
with the third quarter of 2013. Operating income rose 10% to $445m, compared with $404m in the comparable prior year
period. Net income attributable to the Company
was $297m, or $0.54 per share, compared with
$253m, or $0.45 per share, in the prior year.
Marsh & McLennan Companies president
and chief executive officer Dan Glaser said:
“The company delivered its thirteenth consecutive quarter of double-digit growth in adjusted
earnings per share. This strong performance
reflects revenue growth of 7% and underlying
revenue growth of 5%, with all operating companies contributing. Adjusted operating income
grew 11%, and the adjusted margin expanded
50 basis points.”
“For the nine months of 2014, results were
excellent: revenue growth of 6% and underlying
revenue growth of 5%; an 11% increase in adjusted operating income; margin improvement
of 80 basis points; and 13% growth in adjusted
EPS,” added Glaser. n
Aspen raises re/
insurance GWP in Q3
Aspen Insurance Holdings recorded growth across both its
insurance and reinsurance businesses during the third quarter with
its operations in the US continuing to expand in the region.
Gross written premiums reached $652.5m
during the third quarter, up 12.2% compared
with the same period in 2013. Reinsurance
contributed $256.9m of gross written premiums, up 17% year on year, while insurance
grew by 9.3% compared with the third
quarter of last year to total $395.6m.
“Reinsurance had another very strong
quarter and continues to successfully
navigate a dynamic market. Insurance
continued to evidence momentum, with our
US insurance teams continuing to make
strong progress in building out the platform
through profitable growth,” said Aspen’s
chief executive, Chris O’Kane.
The company ended the third quarter
of 2014 with a combined ratio of 94.6%,
although that drops down to 91.3% when
removing corporate expenses related to its
defence of Endurance’s hostile takeover
bid. In the third quarter of 2013, Aspen’s
combined ratio totalled 91.8%.
Included within the third quarter 2014
combined ratio were 2.8 percentage points,
of pre-tax catastrophe losses, equal to
$17.1m, compared with 2.6 percentage
points, or $14.2m, during the same stretch
in 2013. The figure for 2013 is for pre-tax
catastrophe losses net of reinsurance recov-
Follow us @reactionsnet
| 5 november 2014
Chris O’Kane
eries and reinstatement premiums.
Aspen’s net investment income during
2014’s third quarter was $48m compared
with $45m last year. Book yield as at
September 30, 2014 on the fixed income
portfolio was 2.65% compared with 2.74%
at December 31, 2013 and 2.82% at September 30, 2013.
“During the third quarter we continued
to execute our strategy to increase ROE
and shareholder value with good operating
results, opportunistic share repurchases and
further rebalancing of our investment portfolio,” said O’Kane.
“As we enter the final quarter of 2014 we
are well positioned to comfortably exceed
our 10% return on equity (ROE) target for
the year. We will continue to focus on ROE
improvement in 2015 and beyond.” n
top stories
China’s insurers at risk
as shadow banking rises
Chinese insurers are now holding almost double the trust holdings
they were at the close of 2013 prompting ratings agencies to warn
the industry is carrying too much shadow banking default-risk. Insurers held 281bn yuan ($46bn) of trust
products at June 30, rising from 144bn
yuan at the end of last year, China Insurance Regulatory Commission data shows. The companies’ shadow bank assets,
including wealth management products and
other financing kept off commercial lenders’ balance sheets, reached 1.14trn yuan,
or 13% of their investments, according to
estimates from Standard & Poor’s, making
them “vulnerable in times of stress.”
Moody’s said in a market report that
China Pacific Life Insurance Co., Taiping
Life Insurance Co. and Du-Bang Property
& Casualty Insurance Co. all expanded
trust investment fivefold or more in the first
six months of 2014.
The ratings agency added this move is
“credit negative” for companies traditionally focused on fixed-income securities. “If the insurers experience any liquidity
problems, they won’t be able to easily turn
these trust investments into cash,” Sally
Yim, a Moody’s analyst in Hong Kong told
Bloomberg. “These assets also tend to be
more volatile. The yield may be higher, but
there may also be defaults.”
Chinese insurers’ assets doubled in the
past five years to 9.6 trillion yuan last
month, as premium income climbed an
average of 14 percent annually. Squeezed
by competition from wealth management
products sold by banks and online funds,
insurers started offering policies with investment characteristics to compete for money.
“Over the last two or three years, banking product rates have been quite competitive compared with some of the rates
offered by the insurers,” Terrence Wong, a
director at Fitch in Hong Kong told Bloomberg. “So to enhance the yield, they have
to seek investment instruments with higher
returns.” n
Axis boosts profit despite Q3 GPW drop
Bermuda’s Axis Capital managed to boost net profit during the
third quarter of the year despite gross premiums written dropping
by 1% and its combined ratio increasing by 5.9 percentage points
during the period.
Net profit attributable to Axis for the three
months to September 30, 2014 reached
almost $289.1m, up from $150.6m during
the same stretch last year. That result was
achieved even though Axis saw its overall
level of gross premiums written decreasing
from almost $904.8m in 2013’s third quarter
to just over $896.8m this year.
It was the insurance side of Axis’ business
rather than the reinsurance part that experienced the reduction in gross premiums written. Whereas Axis posted close-to $574.8m
of insurance gross premiums written during
the third quarter of 2013, this year, that figure
fell by 3%, or $19.5m, to just under $555.3m.
This reduction emanated from Axis’
accident and health and professional lines
business, although that decrease was partially
offset by growth in our aviation lines.
Albert Benchimol
However, the reinsurance business also
made up some of the decrease by growing
gross premiums written by $11.5m year on
year to $341.5m for the third quarter of 2014.
This rise can be attributed to the expansion
of Axis’ liability lines reinsurance business,
and in particular new multi-year quota share
business. But even this growth was slightly
offset by decreases in the company’s agriculture, professional and property reinsurance
A combined ratio of 92.2% represented an
increase of 5.9 percentage points compared
with the prior year period.
“We delivered strong underwriting results
reflecting low catastrophe losses in the quarter, ongoing favourable reserve development
and the value of our diversification, as well
as the benefits of a more holistic approach to
risk management,” said Albert Benchimol,
Axis’ president and chief executive.
“Investment results, however, were encumbered by the weak returns of the global
equity markets. Our diluted book value per
share adjusted for dividends, a key measure
of shareholder value creation, is now 14%
above last year’s level.
“Against a backdrop of more challenging
market conditions, we believe our market reputation for superior service, strong
capital and superior ratings will allow Axis
to enhance its position and access profitable
business.” n
5 november 2014
| 15
IPCC calls for fossil fuels
to be phased out in face of
irreversible climate change
The use of fossil fuels must be phased out by 2100 if the world
is to avoid dangerous climate change, according to the latest
Intergovernmental Panel on Climate Change (IPCC) report. The UNbacked expert panel says that most of the world’s electricity can and must - be produced from low-carbon sources by 2050 because
the world faces “severe, pervasive and irreversible” damage.
The IPCC warned in its Synthesis Report
published on Sunday that inaction would
cost “much more” than taking the necessary
action. There are multiple ways of achieving
the emissions reductions over the next few
decades needed to limit the warming to 2ºC
with a greater than 66% chance, the report
The Synthesis Report finds that mitigation
cost estimates vary, but adds that global economic growth would not be strongly affected.
In business-as-usual scenarios, consumption
– a proxy for economic growth – grows by
1.6 to 3 per cent per year over the 21st century. Ambitious mitigation would reduce this
by about 0.06 percentage points, it says.
The report suggests renewables will have
to grow from their current 30% share to
80% of the power sector by 2050. In the
longer term, the report states that fossil fuel
power generation without carbon capture and
storage (CCS) technology would need to be
“phased out almost entirely by 2100”.
The Synthesis Report summarises three
previous reports from the IPCC, which
outlined the causes, impacts and potential
solutions to climate change.
“Science has spoken,” UN SecretaryGeneral Ban Ki-moon said. “There is no
ambiguity in their message. Leaders must act.
Time is not on our side.”
| 5 november 2014
The report confirms that warming is
“unequivocal” and the human influence on
climate is clear. It says the period from 1983
to 2012 was the warmest 30 year period of
the last 1,400 years. Without concerted action
on carbon, temperatures will increase over
the coming decades and could be almost 5C
above pre-industrial levels by the end of this
Some risks of climate change, such as risks
to unique and threatened systems and risks
associated with extreme weather events, are
moderate to high at temperatures 1°C to 2°C
above pre-industrial levels, the report says.
Without additional mitigation efforts
beyond those in place today, and even with
adaptation, warming by the end of the 21st
century will lead to “high to very high”
risk of severe, widespread, and irreversible
impacts globally. In this no-action scenario
warming is more likely than not to exceed
4°C above pre-industrial levels by 2100
“leading to substantial species extinction,
global and regional food insecurity, consequential constraints on common human
activities, and limited potential for adaptation
in some cases”.
The report will confirm many of the
concerns already expressed by insurers and
reinsurers. In urban areas, climate change
is projected to increase risks for people, as-
sets, economies and ecosystems, including
risks from heat stress, storms and extreme
precipitation, inland and coastal flooding,
landslides, air pollution, drought, water
scarcity, sea-level rise, and storm surges. The
risks are amplified for those lacking essential infrastructure and services or living in
exposed areas.
By the end of the 21st century, it is very
likely that the sea level will rise in more than
about 95% of the ocean area. About 70% of
coastlines worldwide are projected to experience a sea-level change within ± 20% of the
global mean.
“Global warming will mean huge risks
worldwide in the future – if no action is
taken. That is the clear finding of the IPCC,”
says Peter Höppe, head of Geo Risks
Research and Corporate Climate Centre at
Munich Re. “Since 1980 the overall number of weather-related natural catastrophes
worldwide that have resulted in losses has
risen roughly threefold. By contrast, there are
no significant trends for geophysical events
that are not influenced by climate change.”
In any case we should prepare now for
unavoidable consequences of global warming
in the medium and long term, Höppe says.
“Sea levels will continue to rise, and in the
long term we should expect to suffer more
and stronger extreme weather events (differing according to region and type of risk),
such as heavy rainfall events with flooding or
severe thunderstorms.
“Strengthening the resistance of buildings
and infrastructure against natural catastrophes makes sense today, even if the effects of
climate change cannot yet be quantified. It is
an economic imperative to act now to slow
climate change, because adaptation costs
and losses will in all likelihood continue to
increase,” Höppe added.
With the release of the Synthesis Report,
the IPCC has now finalised the Fifth Assessment Report (AR5). The AR5 is the most
comprehensive assessment of climate change
ever undertaken. Over 830 scientists from
over 80 countries were selected to form the
author teams producing the report. They in
turn drew on the work of over 1,000 contributing authors and over 2,000 expert reviewers. AR5 assessed over 30,000 scientific
papers. n
Innovation, a challenge
and an opportunity
“We live in the age recently described by Roger Cohen as ‘the
great unravelling” said David Sampson in his presidential address
to the PCI annual meeting last week, on the opening day of the
general session.
Observing the "hyper-partisanship" in Washington DC, Sampson was reminded of the
famous WB Yeats comment in the aftermath
of World War I. "The centre cannot hold".
Sampson observed that, while disruptive transformation presented challenges, it
also presented opportunities, and this was
a theme that was to emerge throughout the
morning session.
Robert Gates, former US Secretary of
Defence under both George W Bush and
Barack Obama, from 2006 to 2011, gave a
keynote address. He noted that one thing the
insurance and national security professions
held in common was that they were both
in the business of dealing with risk. Gates
felt that President Obama was somewhat in
uncharted territory here, because he had effectively withdrawn from two wars without
a clear victory. Gates noted a difference
between the Bush era and the Obama years
in that he felt Bush had made a strategic decision and was comfortable with the upshot
publicly, even if that included unpopularity. With Obama, Gates felt that political
considerations were also a factor in military
Gates noted that Richard Nixon and
Henry Kissinger performed well after the
defeat in Vietnam by making diplomatic
moves to China – keeping the US at the
centre of the world stage. "Today, I don't
see any similar opportunities on the global
stage. Obama focusing on 'America Coming
Home' combined with military cuts does not
inspire much confidence in our friends or
trepidation in our enemies", Gates said.
Gates was succeeded by Luke Williams,
who gave an inspirational speech on disruptive change that was in no way hampered
by a technological failure 10 minutes in.
Speaking without a microphone, Williams
was evangelical about disruptive innovation,
while being realistic about the forces for stasis that exist in all organizations. He warned
that the complacent could be signing their
own death warrant, referring to the dominant
players in the phone market just five years
ago – Nokia, Motorola and Blackberry. He
compared Hertz and Avis with ZipCar, and
Blockbuster with LoveFilm and now Netflix.
There was, he said "far too little emphasis
on deliberate provocation".
Perhaps his most perceptive point was
that modern management spent about 98%
of its time being reactive, putting out fires
and coping with the pace of change in their
own industries, meaning that they had no
time to look at the pace of change in other
But what companies should be focusing
on is not what is going wrong in their own
business, and not on what their immediate
competitors are doing differently. Instead
they should look at what everyone in the
business was doing the same, what everyone took for granted – "Businesses are
all competing in a remarkably small area,
which leads them into a commodity trap",
Williams said.
Williams' view was a breath of fresh air,
forcing people to rethink from the ground
up, to take such radical ideas of inverting,
exaggerating, denying.
This could have been a problem for the
succeeding panel, moderated by Adrian
Lund, president of the Insurance Institute
for Highway Safety. Panel members Steve
Kenner from Ford Motor, Tom Hollyer
from Progressive Insurance and Richard
Schmitzer from James River Insurance Co,
but if it was, they were not fazed.
Discussions ranged from the impact of
ride-sharing (now apparently called a transportation network company, or TNC) new
car technologies, autonomous vehicles and
telematics. An interesting concept to emerge
was the intrinsically slow-moving nature
of motor technology, and how this was effectively getting slower because cars were
becoming more safe. Although the technology was speeding
up, this was leading to people replacing their
cars less often. And with the expected life of
a car in the US already being 20 years, this
meant that in the personal motor sector you
had to wait a generation for all cars to have
a technology introduced to all cars this year.
Steve Kenner said that Ford was aiming
for fewer crashes and safer driving, so this
was a problem that he was not unhappy to
face. But it's an interesting problem. The
safer you make cars, the longer they last,
and the longer they last, the slower the next
"more safe" innovation will be. n
5 november 2014
| 17
news round-up
AM Best upgrades Greenlight
Re Ireland
AIG agrees to $35m fine
New York-based insurer AIG has agreed to
pay a $35m fine to New York State Department of Financial Services as a result of
former subsidiaries soliciting insurance
business in New York without a licence.
The Department said that the former units
of AIG units had also misrepresented those
activities to regulators.
American Life Insurance Co (ALICO),
and DelAm were bought by MetLife in
2010. In March this year MetLife paid a
fine of $50m to the NY financial services
department and $10m to the Manhattan District Attorney's office because of the activities of subsidiaries. In early April, AIG sued
New York regulators to try to force them
off enforcement proceedings over ALICO's
As part of Friday's announcement, AIG
will withdraw a suit it brought earlier this
year in an attempt to force NY regulators
off enforcement proceedings against AIG
relating to the activities of ALICO
be effective. In a speech to the American
Chamber of Commerce in Australia, Snowball called instead for measures to mitigate
potential losses, such as flood levees.
Finance Minister Mathias Cormann
recently announced plans for a Governmentrun price comparison website. Brokers
could use unauthorised foreign insurers if
they offered cheaper rates. Snowball warned
that aggregators were "too sharply focused
on price". He also queried whether foreign
insurers would be subject to the same rules
and regulations as domestic insurers.
"Recently, we’ve seen towns such as
Roma in Queensland implement flood levees and we have been able to respond with
premium reductions of up to 90%. When
governments implement mitigation, we are
true to our word, responding with premium
reductions to reflect the lowered risk",
Snowball said.
Decline in premiums
at Direct Line
Suncorp boss Snowball
questions comparison site plan
Patrick Snowball, chief executive of
Queensland-based financial services group
Suncorp, has said that he is unconvinced
that the plans announced by the Australian
Federal Government to reduce home insurance levels in northern Queensland will
| 5 november 2014
The financial strength rating (FSR) of
Greenlight Reinsurance Ltd Ireland has
been upgraded by rating agency AM Best to
'A (Excellent)' from 'A- (Excellent)', while
the issuer credit rating (ICR) has also been
upgraded to 'a' from 'a-'.
The FSR of Greenlight Re has been
affirmed at ' (Excellent)' , while holding
company Greenlight Capital Re's ICR has
been affirmed at 'bbb'.
The outlook for all ratings is stable.
AM Best said that Greenlight Re Ireland's
rating was based on its excellent riskadjusted capitalization, its experienced
management team "and the disciplined
implementation of its overall business strategy". The agency also noted the company's
"exceptional enterprise risk management as
it aggressively manages risks on both sides
of the balance sheet."
However, AM Best also noted the challenges Greenlight Re faced "writing profitable business in a market with increased
capacity and further competition from new
reinsurance companies with a similar alternative investment strategy".
Another area of possible concern is the
leverage resulting from "an investment portfolio that is primarily composed of publicly
traded equity securities".
However, AM Best felt that "this concern
has been diminished as Greenlight Re’s
investment portfolio has performed well
over time."
Greenlight Re's underwriting results to
date have been good. AM Best noted that
"The underwriting team’s acumen was
evident by the company’s very minimal
catastrophe losses in 2012 and 2013."
Patrick Snowball
Gross written premiums (GWP) at UKbased motor insurer Direct Line Group,
which consists of the insurance businesses
spun off by the Royal Bank of Scotland,
were down 5% year on year for the first
nine months of 2014, reflecting lower gross
written premium in Motor and Home, partially offset by growth in Commercial.
news round-up
A case brought in the US in March was
dismissed by a judge, who said that it was
an improper filing.
The MH-370 was covered under two
separate policies for hull and machinery,
one for war and one for accident. The two
carriers split the difference on that liability.
Eiopa submits ITS for approval
The number of motor in-force policies
was down 0.7% on the previous quarter,
with prices stable quarter-on-quarter. However, the home insurance market saw further
9mo Motor GWP was £1.03bn, down
from £1.12bn in the same period last year.
For Q3 the figures were £365.2m, down
from £386.0m.
In Home, 9mo GWP fell to £681.0m,
from £761.8m.
Rescue and other Personal Lines were
roughly flat at £101.0m for the quarter, as
was Commercial, at £109.6m.
The total for the year to date was
£2.80bn, down from £2.953bn. For Q3
GWP was £928.0m, down from 977.7m.
“Total Ongoing”, eliminating International,
was down to £2.365b, from £2.490bn in
9mo 2013.
Direct Line reported a 6% year on year
decrease in its total cost base, and said that
it was on track to achieve its targeted total
cost base2 of approximately £1bn in 2014. Investment income yield for the first nine
months of 2014 increased by 20bp year on
year to 2.3%, “reflecting actions to diversify
the portfolio”.
The 5.4% fall in GWP in Q3 was less
than in previous quarters. Direct Line said
that its prices “were more competitive in
a stable market, and the benefits from improvements in pricing and claims capability
The Home insurance division “increased
its competitiveness in the third quarter following strong underlying claims performance, which reflected the benefits from
recent pricing and claims initiatives. Home
retention continued at good levels.”
A 4.3% year on year reduction of the
number of in-force policies in Home and
a 2.5% reduction in Motor “reflected the
Group’s focus on maintaining its underwriting discipline in a competitive marketplace.” Direct Line reported no claims from
major UK weather events in Q3.
Home and Commercial claims from ma-
jor weather events for 9mo 2014 were about
£64m and £16m respectively.
Direct Line reported that current-year
Motor claims trends had been mixed. “The
Group will continue to take a prudent view
of these when assessing current-year loss
Direct Line noted “higher than expected
large bodily injury claims, partially offset
by continued positive experience on small
bodily injury claims”.
Taken together the group expects that the
Motor current-year loss ratio in H2 2014
will be similar to the first half.
Malaysian Airlines sued in
Kuala Lumpur
Two Malaysian children whose father is
presumed to have died on missing Malaysian Aircraft MH-370 have taken legal
action against Malaysia Airlines and the
Malaysian government in what is thought to
be the first legal case filed in Malaysia since
the plane disappeared on March 8.
The suit accuses the Malaysian civil aviation authority of negligence for failing to
attempt to contact the plane quickly enough
after it disappeared off radar screens tracking its intended path.
Jee Jing Hang was one of 239 people on
board, missing, presumed dead. Lawyers
representing his two young sons have filed
the suit on the sons’ behalf.
Malaysian Airlines is also named in the
suit, being accused of breach of contract by
failing to take all reasonable measures to
ensure a safe flight. The lawyers confirmed that damages
were being sought, but would not name a
The European Insurance & Occupational
Pensions Authority (Eiopa) has submitted
to the European Commission the first set of
draft Solvency II implementing Technical
Standards (ITS).
Eiopa said hat the current ITS "define the
processes for approval of the Internal Models, Matching Adjustment, Ancillary Own
Funds, Undertaking-Specific Parameters
and Special Purpose Vehicles as well as the
joint decision process on Group Internal
Eiopa is aiming the ITS at both regulators
and companies, with the aim of ensuring
that all insurers and reinsurers "present all
information that is necessary for supervisors to give a legally certain and prudentially sound approval of key elements of
Solvency II."
Following endorsement by the EC, which
Eiopa said that it "has to do within three
months", the ITS will be translated into
the official EU languages and will become
legally binding.
Hardy and CNA Europe head for
Walkie Talkie
Hardy (Underwriting Agencies) Limited
and CNA Insurance Company Limited
(CNA Europe) are to move to floors 12
and 13 of 20 Fenchurch St – the “Walkie
Talkie” from Monday November 3.
David Brosnan, chief executive of Hardy
and CNA Europe, said: “We are committed to maintaining a strong presence in the
London market, and are focused on being
a company that is easy to do business with.
Moving Hardy and CNA Europe to one
location will allow for more opportunities
to share expertise while improving business
efficiency for our brokers and clients”.
Hardy and CNA Europe are independent
wholly-owned, indirect subsidiary of CNA
with independent boards.
The announcement comes amid mounting speculation that Lloyd’s itself might be
considering an eventual move.
Chinese insurer Ping An paid £260m for
the iconic Lloyd’s Building in 2013, but at
the time the then chief executive Richard
Ward noted that Lloyd’s the market was not
tied to the building of the same name. Lloyd’s £16.7m lease expires in 2031,
but it has a break option in 2021. Richard
5 november 2014
| 19
news round-up
Ward last year noted that the Richard Rogers design was iconic, but came with a cost.
“Everything is exposed to the elements and
that makes it very costly”, he said last year,
while accepting an emotional attachment to
the site, which Lloyd’s has occupied since
Running costs are rumoured to be several
times higher than they would be for a comparable modern building, possibly on a par
with the annual rent.
Ted Baker loses loss of profit
claim from Axa
UK-based clothing firm Ted Baker said
late last week that it had received judgment
from the High Court that its on-going claim
against AXA Insurance UK PLC, its previous insurers, for loss of profit arising from
the theft of inventory from its warehouse
from 2004 to 2008 had been rejected. Ted
Baker said that a further hearing to determine the award of costs was expected to be
held in the next few weeks.
In December 2008 an employee working
at one of Ted Baker’s warehouses in London, together with two accomplices, were
arrested, charged and later convicted of
stealing stock from the retailer’s premises.
Ted Baker was insured by AXA along
with two co-insurers, Fusion and Tokio
Marine, under a commercial combined
insurance policy. Ted Baker sought to bring
an insurance claim for £1m for the loss of
stock and £3m for consequential loss and
business interruption. AXA declined cover
arguing that the terms of its policy did not
cover claims for employee theft. AXA
claimed that Ted Baker would have needed
to take out fidelity cover in line with market
practice had it wanted to be covered for
such losses.
The loss of stock claim has been paid, but
the loss of profit claim has been rejected.
Ted Baker said that it was "disappointed
with this outcome and is considering its
In its Interim Results announcement for
the 28 weeks ended 9 August 2014, Ted
Baker said that it had provided £2.6m for
its own legal costs incurred up to 9 August
2014 "and those results did not include any
contingent asset for the claim". Eder J handed down judgment on 25 May
2012 in the £4m insurance claim
The main issue was whether employee
theft was covered by the AXA policy, which
had been intended to replicate the cover
provided by a previous insurer, which AXA
contended did not cover employee theft.
The court concluded that the losses were
covered. Fidelity Insurance and that AXA
asserted it had charged no premium for
this type of cover. The co-insurers also put
forward a separate defence that the scope of
the AXA cover had been misrepresented to
them by the brokers.
Richard Lynagh QC and James Medd,
instructed by Kennedys, represented the
In February 2014 the Court of Appeal rejected insurance group AXA’s application to
appeal part of the earlier High Court ruling.
RGA helps Mapfre US with term
life offering
RGA Reinsurance Company (RGA), the
principal operating subsidiary of Reinsurance Group of America, Inc, provided key
support to MAPFRE USA in connection
with the Webster, Massachusetts company's
entry into the term life market in the US,
announced on August 25th.
RGA said that it provided consultative assistance in the development of MAPFRE's
initial life offering, and that the company
would also provide ongoing underwriting
and risk assessment support for the product
via AURA, RGA's proprietary e-underwriting solution.
"RGA is very pleased to have been chosen by MAPFRE to support its expansion
into the US life insurance market. " said
Anna Manning, Executive Vice President,
Head of US and Latin American Markets,
MAPFRE USA. announced its entry into
the US life insurance market. in August
when it began selling a term life product in
Massachusetts, where MAPFRE’s affiliate
Commerce Insurance Company is the largest auto and home insurance carrier. MAPFRE Insurance said that it was "seeking to
leverage its dominant position in the Massachusetts personal lines market by offering
life insurance to customers in conjunction
with the company’s network of independent
agents throughout Massachusetts".
MAPFRE USA said that it planned to roll
out its life product in additional US states
later this year. Jaime Tamayo, President and CEO of
MAPFRE USA, said that “as with our
property and casualty products, the term life
product will be competitively priced and
will be backed by MAPFRE’s commitment
to superior service.” Customers in Massachusetts who purchase a life insurance policy from MAPFRE Insurance will also receive a discount
on auto insurance with affiliate Commerce
Insurance. Insurer ratings to be unaffected
by Tria expiration
The ratings of companies that failed an
AM Best stress test on terrorism a year ago
| 5 november 2014
news round-up
would now be unaffected if the Terrorism
Risk Insurance Act (Tria) were to expire at
the end of the year, the company told Reactions at this year’s PCI.
“We’ve tested companies that were
exposed to terrorism from aggregation
to workers compensation and property,”
Anthony Diodato group vice president of
property/casualty at AM Best told Reactions. “We’ve scrubbed them pretty hard
over the last seven years and we did a stress
test at the end of last year and there were
about 34 to 35 companies that didn’t pass
the test. We’ve had dialogue with them and
they are currently now able to sustain their
rating if Tria were to go away. “It is something that influences the
industry as far what the risk appetite is and
they are deciding that right now they have a
comfort level and they will write terrorism
because there is a backstop. “If that backstop goes away the risk appetite and the ability for a company to take
that risk is going to change.” While the industry remains almost
unanimous on the need for the programme,
the declaration from AM Best that ratings
would be unaffected would lessen the blow
if for some reason the programme were not
to be extended by Congress.
Chedid Re and GML to
launch E African JV
Mauritius-based conglomerate GML and
broker Chedid Capital are to launch a 50:50
joint venture in East Africa, called GMLChedid & Associates East Africa Ltd.
Chedid Capital founder and chief executive Farid Chedid said that the new broker
would cover major rising economic sectors
in East Africa including energy, construction, marine and others.
The new JV will be based in Mauritius.
GML said that the new business would “focus on conducting equity participation and
providing operational management services
to a series of selected insurance brokers
across 10 countries in East Africa, including
Botswana, Ethiopia, Kenya, Madagascar,
Mozambique, Rwanda, Tanzania, Uganda,
Zambia and Zimbabwe.
Chedid Re is authorised by several
Lloyd’s syndicates as a correspondent
In April this year Chedid Re signed an
agreement with Partner Re Wholesale to
provide capacity to a Management General
Agency to underwrite commercial professional indemnity (PI), single project PI;
commercial PI annual cover; directors
and officers insurance for commercial and
financial institutions, and PI for financial
institutions from the Middle East, Turkey,
Greece and Cyprus. n
people moves
CGSC Argentinian boss
set to leave
The founder and chief executive of Cooper Gay Cono Sur, Guillermo Pastore,
is set to leave the Argentinian arm of
reinsurance broker Cooper Gay Swett &
Crawford (CGSC) at the end of the year,
the firm has announced.
The broker confirmed in a statement
that imminent changes to the management structure of the group’s Argentinian
reinsurance business Cooper Gay Cono
Sur were afoot.
Following Pastore’s departure, Javier
Medina, Executive Director and Mariano
Ruiz, Director of Operations, will be
responsible for the commercial and operational sides of the business respectively.
Working alongside Medina and Ruiz
will be Javier Sabaris, Commercial Director; Florencia Gacias, Director of Reinsurance, and Alejandro Diego, Technical
CGSC group chief executive officer
Toby Esser said: “Guillermo established
our presence in Argentina in 2009, and
since then Cooper Gay has grown become
Toby Esser
the country’s largest reinsurance broker. I
am very grateful to Guillermo for his hard
work and leadership in developing our
business in Latin America. He has been a
key member of the CGSC Latin America
regional team and I wish him well in his
new career.”
Zurich appoints UK
commercial manager
Zurich has appointed Richard Coleman
as managing director of its commercial
broking business in the UK with immediate effect.
Coleman has been with the company
for 17 years and has led the commercial
broker business on an interim basis since
Dave Smith took over as CEO of the
leading insurer’s UKGI operation in the
summer and will continue to be supported
by Roy Standish and the heads of regional
broker markets and segments.
Smith said: Richard has been the stand
out candidate throughout our search for
a new MD – not only with the skills and
qualities to lead Commercial Broker right
now, but also to steer the business through
the market, technological and societal
challenges of the future.
“The Commercial Broker business and
market it serves are close to my heart
following a decade at the helm and it’s
fantastic that we are able to appoint someone from within our own ranks. It really is
testament to the wealth of talent we have
in the organisation and I know that Richard will have the continued support of our
exceptionally strong market team.” n
5 november 2014
| 21