Daily Willis Review – January 3, 2018

A.M. Best revises U.S. health insurance market to stable
A.M. Best has revised its outlook for the U.S. health insurance segment from negative to stable based on the improvement in earnings and risk-adjusted capitalization.

While individual exchange business has reported losses, this segment still constitutes only a small portion of health insurers operations and other product lines, particularly the employer group, remain profitable.

A repeal or replacement of the Patient Protection and Affordable Care Act (ACA) is still a possibility.

However, the ratings agency argues that after several failed attempts to pass a bill in 2017, the House and Senate may choose to focus on other issues over the next year.

A.M. Best also believes that insurers have been able to handle the challenges facing the industry so far, and does not expect any significant deterioration in market conditions over the next year.

The ratings agency also notes that the improvement in risk-adjusted capitalization due to slower premium growth, combined with an improvement in earnings, is a trend that is expected to continue.


NCM Re enters into $72 million quota share
The NCM Re vehicle, from insurance and reinsurance company Neon Underwriting, has successfully completed the first UK Insurance-Linked Securities (ILS) transaction, entering into a $72 million quota-share with Neon’s Syndicate 2468.

The risk transfer blog Artemis first reported in December 2017 that Neon had gained approval from the Prudential Regulation Authority to establish the first ILS vehicle to transact business in the UK.

The reinsurance agreement with Syndicate 2468 provides Neon with the ability to bring third-party investor capital into its structure to support its London market underwriting.

The transaction was completed on January 1, and sees NCM Re assuming a portion of Neon Syndicate 2468’s property treaty reinsurance and direct and facultative portfolios.

Martin Reith, Neon Group Chief Executive, said, “I am both excited and proud to see Neon making history – not only is it a testament to Neon’s commitment to doing things differently but it also underpins our attitude as a business – unafraid to lead the way and embrace change.”

Athene announces deconsolidation of AGER
Athene Holding has completed the deconsolidation of AGER Bermuda Holding, the former holding of Athene’s European operations.

Following the deconsolidation, AGER will be renamed to Athora Holding and will launch in mid-January.

In 2017, AGER successfully raised €2.2 billion ($2.6 billion) in capital, which the company said was an important step towards AGER’s goal of becoming a European run-off consolidator and life reinsurance partner.

AGER announced in August 2017 its intention to acquire Aegon Ireland, a Dublin-based insurer, and expects to draw down capital to close the acquisition.

As part of the deconsolidation, Athene will remain a minority shareholder in AGER along with other global investors.

Athene will also be a preferred reinsurer for AGER’s spread liabilities and have representation on its board of directors.

Pioneer Underwriters launches Ocean Marine division
Pioneer Underwriters has launched a new Ocean Marine underwriting capability and appointed Zach McAbee as Head of Ocean Marine.

The new division will initially focus on the North-West region of the U.S and will write hull/P&I and primary and excess marine liability.

Based in Seattle, Mr. McAbee joins the company from Crum & Forster where he served as Head of Ocean Marine and brings with him 20 years’ experience in the sector.

Gene Hinman, Chief Executive Officer of Pioneer’s U.S. operation, said: “Zach has an impressive track record of developing profitable books of business in this niche market and Pioneer will provide him with an excellent platform from which to trade with his established network of close broker relationships.

“This recent appointment is in line with our strategy to establish a regional hub network to access local markets and enhance the scope of our business.”