Daily Willis Review | 14 May 2018

Daily Willis Review | 14 May 2018
  • MENA presents great opportunities for takaful operators
  • Bermuda reinsures prove resistant, despite 2017 challenges
  • ICA declares catastrophe after storm in Hobart
  • Compre appoints new COO
MENA presents great opportunities for takaful operators
According to A.M. Best, most Middle East and North Africa (MENA) markets present great opportunities for takaful operators to provide financial solutions in line with consumers’ religious beliefs.

However, the report has found that these opportunities remain unrealized, with many takaful companies struggling to establish strong profiles.

The main issue faced by takaful providers is a lack of differentiation, meaning they are subject to price competition with larger insurers that already have brand awareness and established distribution networks, the report said.

A.M. Best believes that support from sharia scholars in promoting Islamic financial products is essential for the growth of the takaful sector.

Salman Siddiqui, Associate Director, said: “Given the proportion of Muslims in the MENA region, A.M. Best considers the take-up of shari’a-compliant insurance to be disappointing, especially in contrast with the Malaysian experience, which exhibits higher takaful penetration – despite the country having a lower proportion of Muslims.”

Bermuda reinsures prove resistant, despite 2017 challenges
In its latest peer review of the sector, Fitch Ratings has found that Bermudian reinsurers have remained strong against 2017 losses due to strong capitalization, positive pricing, low exposures, and conservative reserving practices.

However, the sector continues to deal will low investment yields, as well as pressure on profitability, Reinsurance News has reported.

The ratings agency also found that Bermuda reinsurers have successfully reduced their overall net catastrophe exposures in the last few years by transferring much of their business to the capital markets.

The Bermudian insurers and reinsurers discussed by Fitch include Arch, Axis, PartnerRe, RenaissanceRe, XL Catlin, and Validus.

Brian Schneider, Senior Director at Fitch, said: “Bermuda reinsurers typically maintain very strong capitalization while keeping leverage modest, which will serve them well as they continue to work through sizable catastrophe losses and shrinking profits.”

“The willingness of the capital markets to accept a lower price for catastrophe risk has helped to reduce the financial impact to Bermuda reinsurers.” Mr. Schneider said.

Daily Willis Review | 11 May 2018

Daily Willis Review | 11 May 2018
  • U.S. cyber market reaches $2.0 billion: Fitch Ratings
  • Hannover Re launches joint growth initiative with HDI Global
  • Third Point Re reports $26 million loss for Q1 2018
  • Boost Insurance secures dedicated reinsurance capacity
U.S. cyber market reaches $2.0 billion: Fitch Ratings
According to Fitch Ratings, the U.S. stand-alone and package cyber premiums combined grew by 54% year-on-year to $2.0 billion in 2017, Insurance Journal has reported.

During 2017, stand-alone cyber direct written premiums grew by 7% to $986 million, according to aggregate statutory data for the property and casualty (P&C) industry.

The industry statutory direct loss ratio for stand-alone cyber insurance fell from 43% in 2016 to35% in 2017, which is indicative of strong underlying profitability in the cyber market, Fitch said.

Analysts said that the growth in package-related cyber premiums reflects expanding insurer efforts to specifically include cyber coverage and endorsements in policies that lack explicit terms or premiums related to cyber risk.

However, the ratings agency notes that the growth does also demonstrate the changes in how companies report cyber premiums in the statutory supplement.

James Auden, Managing Director, said: “Profitable results in a new market are attracting competition to the cyber space.

“Roughly 75 distinct insurers wrote over $1 million each of annual cyber premiums last year alone.”

Hannover Re launches joint growth initiative with HDI Global
Under the Talanx umbrella, Hannover Re and HDI Global are launching a joint initiative in global growth and high-margin specialty business.

The new company, HDI Global Specialty, will write agency and specialty business in a broad range of business lines.

As part of the initiative, HDI Global SE will acquire the majority of the shares in International Insurance Company of Hannover SE (Inter Hannover), a subsidiary company of Hannover Re, for €100 million ($119 million).

Following completion of the transaction, HDI Global will retain 50.2% of the new company and Hannover Re 49.8%.

HDI Global Specialty will be launched with a premium volume of more than €1 billion ($1.19 billion).

Torsten Leue, Chairman of the Board of Management of Talanx, said: “This step strengthens our roots as an industrial insurer.

“The joint venture enables us to bring together the cross-business segment expertise we have in the area of specialty in one place within the Group and concentrate our know-how.”

Third Point Re reports $26 million loss for Q1 2018
Third Point Re has reported a net loss of $26 million for the first quarter of 2018, compared to a net income of $104.2 million for the same period in 2017.

Gross written premiums increased to $378.4 million in Q1 2018, compared to $146.4 million in Q1 2017.

The company’s combined ratio decreased in the first quarter of 2018 to 104.5% from 106.3% in Q1 2017.

Third Point Re posted a net investment income loss of $2.2 million for Q1 2018, compared to a $128.5 million profit for the same period in 2017.

Rob Bredahl, President and Chief Executive Officer, said: “During the first quarter, we generated premiums written of $378 million, an increase of 159% compared to the prior year’s quarter.”

Boost Insurance secures dedicated reinsurance capacity
Boost Insurance has announced it has obtained a dedicated reinsurance facility to power its business-to-business insurtech development platform.

The facility will be led by Nephila alongside Markel Digital, the insurtech group within Markel Corporation, and RenaissanceRe Holdings.

According to the release, Boost will manage a program supporting multiple insurtech startups entering the property and casualty industry and will support all personal and commercial lines of business.

Alex Maffeo, Chief Executive Officer and Founder of Boost Insurance, said: “This is a landmark day for Boost because it makes us a truly one-stop shop for insurtech startups looking to bring their ideas from concept to reality.”

Barney Schauble, Nephila Managing Partner, said: “Boost offers Nephila and the rest of the reinsurance facility members exposure to the best insurtech startups and new insurance products with the confidence that underwriting and compliance is being closely monitored by an experienced team.”

Daily Willis Review | 10 May 2018

Daily Willis Review |10 May 2018
  • Citizens approved for $1.42 billion reinsurance program
  • Prudential and PIC enter sixth longevity reinsurance agreement
  • MIGA to share risk with NEXI through reinsurance
  • XL Catlin establishes insurance hub in San Francisco
Citizens approved for $1.42 billion reinsurance program
Florida’s Citizens Property Insurance Corporation has received approval from its board of governors to purchase a $1.42 billion reinsurance program for 2018, the risk transfer blog Artemis has reported.

The new program is a 7% increase on the total limit of risk transfer secured last year and includes more coverage from the capital markets via Everglades Re cat bonds.

As part of its renewal this year, Citizens will combine traditional reinsurance with fully-collateralized coverage, including its Everglades Re cat bonds.

Citizens said its strategy was to: “Transfer risk alongside the FHCF, transfer commercial non-residential (CNR) risk, and transfer aggregate annual risk in order to protect a portion of surplus for most catastrophic events and thereby further reducing the amount and likelihood of assessments beyond the 1-100 year event to the citizens of Florida.”

Prudential and PIC enter sixth longevity reinsurance agreement
Pension Insurance Corporation (PIC) has entered into its sixth longevity reinsurance agreement with Prudential Retirement, a unit of Prudential Financial.

As part of the agreement, PIC will assume the longevity risk for £900 million ($1.2 billion) in pension liabilities, representing approximately 7,500 pensioners across two pension schemes.

According to the release, the agreement is a result of a growing desire among companies to de-risk their pensions.

Tom Cahill, Director of Prudential’s longevity reinsurance team, said: “We at Prudential are proud to strengthen our growing partnership with Pension Insurance Corporation.

Jay Shah, Chief Origination Officer at Pension Insurance Corporation, said: “This agreement represents the sixth major reinsurance transaction between the PIC and PICA teams during the past three years.”

MIGA to share risk with NEXI through reinsurance
The Multilateral Investment Guarantee Agency (MIGA) has signed a memorandum of understanding with NEXI, Japan’s official export credit agency.

The MoU is an agreement to share risk, through reinsurance, on investments made by Japanese firms in developing countries.

As part of the arrangement, MIGA and NEXI will share risk by purchasing reinsurance policies from each other, reducing the exposure either would face individually.

Currently, MIGA provides over $2 billion in guarantees for investments made by Japanese firms across the globe, representing the fourth highest among investor countries.

Keiko Honda, MIGA Executive Vice President and Chief Executive Officer, said: “MIGA’s strategy for the next few years focuses on mobilizing private capital to three priority areas: clean energy, fragile and conflict-affected situations, and low-income countries.”

Kazuhiko Bando, NEXI Chairman and CEO, said: “Through the MoU, MIGA and NEXI are expected to use their own strengths to help Japanese companies develop effective investment projects.”

XL Catlin establishes insurance hub in San Francisco
XL Catlin’s North America Construction insurance business has opened a multi-line underwriting hub in San Francisco.

Charles Marmolejo has been appointed Executive Underwriter and Senior Underwriter Dan McCarthy will join the hub from XL Catlin’s Chicago office.

In his new role, Mr. Marmolejo will help construction clients address their general liability, workers’ compensation and commercial auto risks.

He brings with him almost 29 years’ property and casualty insurance experience across a range of industry segments.

Mr. McCarthy first joined XL Catlin’s North America Construction team in 2014 in Chicago and in his new role he will assist brokers in helping address customers’ excess liability risks throughout the Western region.

Gary Kaplan, President of XL Catlin’s North America Construction, said: “Construction activity throughout the Western region, especially California, is bustling with a wide range of public and private projects in progress and more plans in the works.”

Daily Willis Review | 9 May 201

Daily Willis Review | 9 May 2018
  • Fitch maintains negative outlook for global reinsurance sector
  • ANZ finalizes $0.74 billion reinsurance deal with Zurich
  • Tokio Marine gains approval for post-Brexit subsidiary
  • Sompo completes Nipponkoa integration
Fitch maintains negative outlook for global reinsurance sector
Fitch Ratings has retained a negative outlook for the global reinsurance market due to ongoing competition, low interest rates and the influx of alternative capital.

According to Reinsurance News, the ratings agency does anticipate that profitability is likely to improve for the sector in 2018.

This increase in profitability will be driven by normalized catastrophe losses and improved pricing as a result of the high level of catastrophe losses experienced in 2017, the report said.

The firm believes the underlying accident-year reinsurance combined ratio, excluding catastrophes, will improve to 92.1% this year, from 92.6% in 2017.

However, these improvements may not be sustainable, following the softness of April renewals, which struggled against the persistent flow of alternative reinsurance capital, the report said.

Fitch said: “The influx of alternative capital (the additional capacity being provided by capital market investors willing to accept lower prices for catastrophic risk) limits cyclical price rebounds historically seen after periods of severe catastrophe losses.”

ANZ finalizes $0.74 billion reinsurance deal with Zurich
Australia and New Zealand Banking Group (ANZ) has announced it has finalized its reinsurance arrangements with Zurich and has received AUS $1 billion ($0.74 billion) of reinsurance proceeds.

The agreement is the first step in Zurich’s acquisition of ANZ’s Australian life insurance business, One Path Life.

The sale is comprised of two transactions totaling AUS $2.85 billion ($2.11 billion), including the AUS $1 billion ($0.74 billion) of upfront reinsurance commission.

The acquisition of 100% of ANZ’s One Path Life was first announced on December 12, 2017.

Tokio Marine gains approval for post-Brexit subsidiary
Tokio Marine has received regulatory approval from the Commissariat aux Assurances (CAA) and the Japanese Financial Services Authority (JFSA) to set up Tokio Marine Europe in Luxembourg.

According to Intelligent Insurer, the new European subsidiary is in response to the UK decision to leave the European Union and is expected to begin operations in the second half of 2018.

Thibaud Hervy, Chief Underwriting Officer for Specialty Lines at Tokio Marine HCC, has been appointed Chief Executive Officer of the new entity.

Tokio Marine Europe will operate as a Tokio Marine HCC subsidiary in partnership with Tokio Marine Kiln, the report said.

Barry Cook, CEO of Tokio Marine HCC International, said: “It is important that Tokio Marine Group ensures that the relevant steps are being taken to allow the business to continue to grow throughout Europe.”

Charles Franks, CEO of Tokio Marine Kiln, added: “Tokio Marine Europe S.A. will provide a long-term solution to the uncertain developments around Brexit, and the company will provide all brokers and coverholders with continued security and high service levels going forward.”

Sompo completes Nipponkoa integration
Sompo International has completed its integration of Sompo Japan Nipponkoa Insurance Company of Europe (SJNKE) as a wholly-owned subsidiary of Sompo International.

It said the integration is a “significant milestone” for the company.

The announcement is one of many from the company highlighting its continued European expansion.

Sompo has already received regulatory approval from the Ministry of Finance of Luxembourg to launch its new subsidiary, SI Insurance (Europe) (SIIE).

The company said once SIIE becomes fully operational later in 2018, SJNKE’s continental European business will transfer to SIIE.

Sompo will retain its presence in the Lloyd’s market with Endurance at Lloyd’s and the London company market with Endurance Worldwide Insurance.

Daily Willis Review | 8 May 2018

Daily Willis Review | 8 May 2018
  • Willis Re appoints deputy head of Global Engineering practice
  • Hannover Re posts profit of $326 million for Q1 2018
  • Africa insurers to benefit from economic recovery: report
  • Munich Re reports Q1 profit of $986.6 million
Willis Re appoints deputy head of Global Engineering practice
Willis Re has announced the appointment of Andrew Vince as deputy head of its Global Engineering Practice.

Mr. Vince brings with him more than 25 years’ underwriting experience, most recently as manager of engineering treaty and onshore energy at Trans Re.

Previously he held various positions at RSA, GE Frankona Re, and Chaucer.

Tony Melia, Chief Executive Officer, Willis Re International, said: “Andrew is a major addition to our well-established Global Engineering Practice.

“His extensive expertise and contacts in the engineering and construction arena will be invaluable in building Willis Re’s offer, at a time when global demand for re/insurance solutions in construction and engineering is growing rapidly.

“We see huge growth potential in this vital specialist segment, and Andrew’s arrival will further enhance our market-leading position.”

Hannover Re posts profit of $326 million for Q1 2018
Hannover Re has reported a net income of €273.4 million ($326 million) for the first quarter of 2018, compared to €264.8 million ($315.7 million) for Q1 2017.

Gross written premiums rose by 17.6% to €5.3 billion ($6.3 billion) in Q1 2018 from €4.5 billion ($5.36 billion) for the same period in 2017.

Net investment income for the first quarter of 2018, including interest on funds withheld and contract deposits, was €391.5 million ($381 million), compared to €392.9 million ($468.6 million) in 2017.

Ulrich Wallin, Chief Executive Officer, said: “We made the most of the available opportunities on the reinsurance markets and substantially expanded our portfolio.

“With Group net income of €273.4 million ($326 million) we have taken the first step towards achieving our year-end target of more than €1 billion ($1.19 billion).”

Africa insurers to benefit from economic recovery: report
According to the 3rd Africa Insurance Barometer, insurers on the continent consider the slow recovery from the 2015 and 2016 recession will positively impact their rates and earnings.

In the survey by the African Insurance Organisation (AIO), African insurers also believe that recovery from the recession will ease the pressure from excess capacity and fierce competition.

The survey also found that a number of executives expect rate increases in the next 12 months, driven by stronger economic growth, and anticipate the regulator to intervene to maintain market safety.

Africa’s insurance markets are expected to become more concentrated, the report said, following the introduction of tighter capital requirements.

In order to increase penetration, insurers will need to invest in marketing to build awareness and overcome a lack of product understanding or low consumer confidence.

Prisca Soares, Secretary General of the African Insurance Organisation, said: “This year’s Africa Insurance Barometer demonstrates that confidence is returning to Africa’s insurance markets.”

Munich Re reports Q1 profit of $986.6 million
Munich Re has reported a profit of €827 million ($986.6 million) for the first quarter of 2018, compared to €557 million ($664.4million) for the same period in 2017.

Gross written premiums were €13,126 million ($15,659 million) for Q1 2018, an increase of 1.6% from €12,925 million ($15,417 million) in 2017.

The company’s annualized return on risk-adjusted capital (RORAC) was 13.2% and the return on overall equity (RoE) totaled 11.9%.

Regular income from Munich Re’s investments declined from €1,634 million ($1,949.6 million) in 2017 to €1,493 million ($1,781 million) in Q1 2018.

Jörg Schneider, Chief Financial Officer, said: “The first quarter was mainly influenced by low major losses in property-casualty reinsurance.

“We also achieved a good quarterly result in life and health reinsurance and at ERGO. We can be very satisfied with the start to the year.”

Daily Willis Review | 3 May 2018

Daily Willis Review | 3 May 2018
  • Swiss Re expands Africa operations
  • Cyber markets present both opportunities and risks: PwC
  • Validus reports net loss of $4.1 million for Q1 2018
  • LSM launches intellectual property cover
Swiss Re expands Africa operations
Swiss Re’s reinsurance business unit has received an approved license to upscale its property and casualty (P&C) business in South Africa.

The company’s subsidiary, Swiss Re Life and Health Africa, will be expanded to become a composite entity that can service both life and health as well as P&C business.

The new entity, which will be renamed Swiss Re Africa, will be led by Thys Nieuwoudt and will be based in Cape Town.

According to the release, the new business completes Swiss Re’s ambition to re-domicile its Southern African P&C business onto the continent.

Jean-Jacques Henchoz, Chief Executive Officer Swiss Re Reinsurance EMEA, said: “Our expansion in South Africa lays the basis for Swiss Re to upscale its market strategy in Africa.

“By shifting the center of gravity of our African business back to Africa, we are sending a clear signal that we believe insurance in Africa has a strong future.”

Cyber markets present both opportunities and risks: PwC
A PwC report has found that while the cyber insurance and reinsurance market is rapidly growing, there remains significant risks and downsides such as limitations in historical data and uncertainties in accumulation risk, Reinsurance News has reported.

The current U.S. cyber insurance and reinsurance market is estimated at $2.5-3.5 billion and is expected to increase by $2 billion per year over the next three years.

PwC also found that over 75% of companies are currently transferring risk to reinsurers to manage the growth of their cyber exposures.

However, the survey has also reported that the average respondent had access to just 7 years of data for incidents like ransomware, malware, data breach and phishing.

Companies are also most concerned about cyber-related business interruption (CBI) because of its potentially systemic impact.

PwC believes there will be an inevitable market-turning event that will separate carriers that have sufficient risk management, underwriting processes and capital in place from those that do not.

Validus reports net loss of $4.1 million for Q1 2018
Validus Holdings has reported a net loss of $4.1 million for the first quarter of 2018 compared to a net income of $94.6 million in the same period of 2017.

Gross written premiums were $1,832.5 million for Q1 2018, compared to $1,190.9 million for Q1 2017, an increase of 53.9%.

The company’s combined ratio increased from 83.2% for the first quarter of 2017 to 90.9% for the same period in 2018.

The total managed investment return from the company’s investment portfolio was a loss of $2.8 million for Q1 2018, compared to $52.8 million profit for Q1 2017.

The company also incurred transaction expenses of $7.8 million in relation to its merger with American International Group, which is expected to close in mid-2018.

LSM launches intellectual property cover
Liberty Specialty Markets has developed intellectual property contractual liability insurance to prevent contract negotiations between businesses stalling because of concerns relating to intellectual property (IP).

The new product is based on the company’s existing IP insurance but has been streamlined to speed up the application and underwriting process.

It will cover in-licensing and out-licensing for both the sale and purchase of the right to use a product or service.

The coverage will be underwritten by the IP team based in London and will be available to clients globally.

Underwriter Camilla Walker said: “This product is relevant to any contract in which intellectual property is addressed, across a wide variety of sectors including engineering, technology, packaging and software development.”

Daily Willis Review | 01 May 2018

Daily Willis Review | 1 May 2018
  • Current reinsurance market unsustainable, say executives
  • The Hartford on the lookout for acquisitions: report
  • Economic slowdown risk to U.S. insurers: Goldman Sachs
  • Swiss Re Corporate Solutions appoints new Head of UK and Ireland
 
Current reinsurance market unsustainable, say executives
Industry executives have told a seminar in Canada that the current reinsurance market is unsustainable, Reinsurance News has reported.

Panellists speaking at the A.M. Best Meeting of Reinsurance Officials (MORO) event in Montreal said that after assessing the impacts of the 2017 natural disasters on re/insurance market dynamics, that the industry is “just not sustainable,” according to the report.

It quoted panellist Gregg Lockhart, Director of Reinsurance at Shelter Mutual, as saying “some information was shared that over the long-run, there is still a margin in reinsurance when you look 10-15 years out, but part of that margin is being subsidised by reserve releases, and that continuance is not going to be available, that is going to be able to further subsidise the reinsurance pricing”.

The report said that with the soft market, some reinsurers would be unprofitable were it not for releasing high levels of reserves to offset poor underwriting returns.

Referring to pricing, Andreas Beckman, Chief Underwriting Officer (CUO), Director at R+V Versicherung AG, said: “Before last year’s events, the last big event was 2005, Hurricane Katrina, and since then the reinsurance market made profitable year after profitable year, which led to tremendous pressure on reinsurance pricing, and just one bad year doesn’t get the prices back where they should be.

“Where should the prices be? Again, the prices we all think should be a little higher, but it’s supply and demand.”

The Hartford on the lookout for acquisitions: report
The Hartford’s Chief Executive Officer Chris Swift has said he is looking for acquisitions in commercial lines and specialty insurance, Intelligent Insurer has reported.

“From a strategic perspective, we believe acquisitions can help build greater competitive advantages and accelerate earnings growth,” it quoted him as saying during the insurer’s first quarter results conference call.

He said a good example of this was the $1.45 billion acquisition by The Hartford last year of Aetna’s U.S. life and disability business.

The company said that acquisition enhanced its benefits distribution capabilities and accelerates its technology strategy.

Mr. Swift said the company is looking for acquisitions in the commercial lines business where it is currently building broader risk and underwriting expertise organically.

“We will consider financially accretive acquisitions that accelerate these goals,” he said.
“And to-date the deals that we have done in commercial lines have been smaller bolt-on transactions.”

 
Economic slowdown risk to U.S. insurers: Goldman Sachs
The asset management unit of Goldman Sachs has warned that an economic slowdown in the United States is the biggest investment risk the insurance industry has faced since the financial crisis, the Bloomberg news service has reported.

Goldman Sachs, which oversees $250 billion for the insurance industry, said inflation expectations have also risen as growing U.S. protectionism dampens prospects for growth.

“Insurers expressed a growing consensus that we are in the late stage of the U.S. credit cycle,” Goldman said in a report following a survey of 300 senior insurance executives.

“With rates expected to rise and equity valuations high, insurers are concerned with achieving adequate returns without leaving their portfolios exposed in the event of a downturn.”

 
Swiss Re Corporate Solutions appoints new Head of UK and Ireland
Swiss Re Corporate Solutions has announced the appointment of Jake Algar as Head of UK and Ireland, effective May 1.

Based in London, Mr. Algar will be responsible for managing the strategy, development and performance of the company in the UK and Irish corporate insurance markets.

He will also be responsible implementing the company’s primary insurance strategy and accelerating growth through the new regional hub in Manchester.

He succeeds Marc Davis, who continues with Corporate Solutions as Head of Sales, UK and Ireland.

Swiss Re said Mr. Algar has more than 15 years’ experience in the primary insurance market and has held senior positions in broker management, sales and business leadership.

“Jake is joining us at an exciting time,” said Fred Kleiterp, Chief Executive Officer of Europe, Middle East and Africa, Swiss Re Corporate Solutions.

“We have expanded our regional presence in the UK and are starting to lead domestic and international corporate insurance programmes.

“Continuing our momentum in delivering relevant products and services to clients and brokers locally remains our focus.”

Daily Willis Review | 30 April 2018

Franck Pinette joins Willis Re as Managing Director of EMEA Life and Health
Willis Re has announced the appointment of Franck Pinette as Managing Director of its EMEA Life & Health practice with effect from April 30, 2018.

Reporting to Tony Melia, Chief Executive Officer of Willis Re International, Mr. Pinette will be based in London and will lead Willis Re’s development in the life and health market in the EMEA region.

Mr. Pinette has more than 30 years’ experience in life reinsurance, and most recently spent eight years as CEO of Guy Carpenter’s European Life Reinsurance operations.

Mr. Melia said: “Franck’s experience and proven expertise will significantly enhance the capabilities of our International Life & Health practice, which, led by Greg Solomon in Hong Kong and supported by Nigel Sedgwick in London, works in partnership with our market leading Willis Towers Watson life consulting teams.”

Alkis Tsimaratos and Dirk Spenner, Managing Directors for EMEA, Willis Re added: “We are delighted that Franck has joined Willis Re to lead the EMEA Life & Health practice, which represents one of our most exciting growth areas.

“With the advent of Solvency II and other regulatory frameworks around the world, life insurers are much more conscious of the impact that reinsurance can have on their balance sheets, P&L and wider risk management.

“As clients increasingly review their reinsurance arrangements Willis Re can provide impartial advice and broader market access.”

AXA develops Shariah-compliant insurance product for the real estate sector
AXA has partnered with Cobalt Underwriting to create a new Shariah-compliant insurance product for the real estate sector, Intelligent Insurer has reported.

The product has been developed with new premium payment and claims processes to ensure it adheres to the key principles of Islamic insurance.

As part of the agreement, AXA will directly manage the trading and underwriting of the product and utilize Cobalt’s in-house Shariah scholars who provide each client with a Shariah compliant certification.

Ryan Birbeck, Head of Real Estate Specialty, AXA Insurance, said: “We are always exploring ways to reach potential customers and, with overseas investment continuing to flow into the UK real estate sector, a Shariah-compliant insurance policy was an obvious addition to our suite of products.”

 
RGA posts first quarter profit of $100.2 million
Reinsurance Group of America (RGA) has reported first quarter 2018 net income of $100.2 million compared to $145.5 million in Q1 2017.

Net premiums for the quarter were $2.6 billion, up from $2.4 billion in the same period in 2017, with favorable net currency effects of $79.3 million.

RGA President and Chief Executive Officer Anna Manning said: “Our operating results were below our expectations this quarter, but this reflects normal volatility of claims that is inherent in our business.

“As we have pointed out in the past, the nature of our business is such that we can experience some volatility of claims, in both directions, in the short term.

“However, any volatility tends to even out over longer periods, and our diversified global platform has helped mitigate overall relative volatility in recent periods.”

 
ILS will limit mid-year reinsurance rate rises: KBW
The ongoing growth of insurance-linked securities (ILS) and continuing inflows of alternative capital from institutional investors into the reinsurance markets will limit rate increases at mid-year renewals, according to analysts Keefe, Bruyette & Woods (KBW).

The risk transfer blog Artemis quoted KBW as saying there continues to be a strong appetite from institutional investors for catastrophe bonds and that ILS will be a factor that limits the ability of the reinsurance market to raise prices as much as it would like at June 1 and July 1 renewals.

KBW said the ILS market is experiencing “continuing inflows that we expect to limit mid-year property catastrophe reinsurance rate increases”.

They also said recent broker reports had shown that the catastrophe losses of 2017 haven’t resulted in reinsurance price spikes outside of the impacted areas.

Daily Willis Review | 18th April 2018

Sedgwick finalizes purchase of Cunningham Lindsey
Sedgwick has announced it has completed its acquisition of Cunningham Lindsey and its subsidiaries, which will operate globally under the Sedgwick brand name.

Through the transaction, Sedgwick, which delivers property, casualty, risk services and administration to insurers, brokers and policy-holders, will gain an additional 6,000 employees across 65 countries.

Following completion of the acquisition, Jane Tutoki, previously Chief Executive Officer of Cunningham Lindsey, will assume the role of Vice-Chair of Sedgwick’s Executive Council.

Also serving on the council is Global Chief Financial Officer Henry Lyons and Group Presidents Mike Arbour and Bob Peterson, all previously of Cunningham Lindsey.

Dave North, Sedgwick’s President and CEO, said: “The close of this transaction brings a wealth of talent to Sedgwick, broadens our international footprint, and reinforces our position as the leading global provider of technology-enabled business solutions in the risk and benefits space.”

Monument Re acquires run-off portfolio
Monument Re has announced that through its European subsidiary Laguna Life, it has acquired a run-off portfolio of flexible premium retail life insurance contracts from Ethias, known as First A Portfolio.

The policyholders will be informed of the change from Ethias to Ireland-based Laguna Life, and the terms and conditions of the contacts will remain unchanged, the company said.

The transfer will result in the loss of savings guarantee of up to €100,000 ($123,698) in Belgium, due to there being no equivalent system in Ireland.

Once the transaction has been completed, Monument Insurance has said it intends to make a new surrender offer, which it said it will communicate to the relevant policyholders in due time.

Manfred Maske, Chief Executive Officer of Bermuda-based Monument Re Group, and Kieran Hayes, CEO of Monument Insurance, said: “It has been a pleasure to work with Ethias on the divestiture of the First A portfolio.

“We continue to make progress executing our Benelux and Ireland consolidation strategies and firmly establishing our long-term presence in these key markets.”

 
PartnerRe appoints Chris Shanahan Head of Corporate Development. U.S. Life
PartnerRe has announced the appointment of Chris Shanahan as Executive Vice-President, Corporate Development, U.S. Life.

He has 25 years of industry experience and joins the company in May from Hannover Re in the U.S., where he served as EVP, Mortality Solutions and Corporate Marketing.

A Fellow of the Society of Actuaries and a member of the American Academy of Actuaries, he will be responsible for developing PartnerRe’s U.S. life reinsurance business by leveraging the company’s global expertise to deliver solutions for the U.S. market.

Mr. Shanahan will work within the Life department and will report to Alan Ryder, CEO North America Life.

 
PERILS issues second loss estimate of $2,013 million for Windstorm Friederike
PERILS has issued a second insured loss estimate of €1,629 million ($2,013 million) for Windstorm Friederike.

The storm, also known as David, hit the British Isles, Belgium, the Netherlands and Germany on January 17 and 18, 2018, with maximum gusts of 87-99 MPH.

In line with its loss reporting schedule, PERILS will issue a third loss estimate on July 17, six months after the event.

Zurich-based PERILS provides aggregated, market-wide industry exposure and event loss data for catastrophes in Europe, Australia and Turkey.

Daily Willis Review | 16th April 2018

Insurers must adjust to changing terrorism risk landscape: A.M. Best
With the potential termination of the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA), insurers will need to reconsider their longer-term policies and prepare their risk management practices, according to A.M. Best.

It said there was a lack of permanency and that there was a decline in protection with each TRIPRA renewal which was a concern for many insurers.

Data from the ratings agency found that small-sized and some medium-sized insurers are unlikely to amass sufficient gross losses to satisfy the $160 million program trigger in 2018.

However, with the scope of terrorism changing and the shift from inflicting property damage towards newer threats such as cyber or biological attacks, insurers need to be prepared.

A.M. Best believes that an over-reliance on TRIPRA is not an adequate substitute for sound risk management.

As part of its current assessment, A.M. Best uses its enterprise risk management (ERM) evaluation, stress tests and their relationship to capital, and it expects insurers to implement a similar judgement process.

The ratings agency has said that companies that currently rely heavily on TRIPRA should be prepared to present detailed plans if the program is not renewed.

 
Severe convective storm losses higher than hurricanes and earthquakes combined: KCC
Analysts at Karen Clark & Company (KCC) have found that expected annual aggregate losses from severe convective storms (SCS) are above expected insured losses from hurricanes and earthquakes combined.

Reinsurance News reported KCC as finding that SCS losses are at almost $25 billion, which is higher on average than hurricanes and above the ten-year return period.

KCC said: “SCS losses are a growing concern of the insurance industry. This study has shown that while the numbers of tornadoes and hailstorms are not exhibiting increasing trends, there has been an increase in the annual variability of significant SCS events.

“Specifically, the number of days on which there is at least one EF1 or stronger tornado is decreasing while the number of days with large numbers of tornadoes is increasing.”

 
EY partners with insurtech firm Concirrus
EY and insurtech firm Concirrus have entered into an agreement which they say will accelerate the adoption of behavioral-based underwriting and risk management in marine insurance.

The partnership will utilize Concirrus’ artificial intelligence (AI)-powered marine insurance software to help marine insurers move from demographic-based underwriting models “to a new world of more accurate, live behavioural based underwriting”.

Andy Yeoman, Chief Executive Officer of Concirrus, said: “With recent advances in technology and the masses of data available from insurers and the shipping industry, we have found a way to understand the behaviour of the assets insured.”

Chris Payne, EY EMEIA Head of Insurance Technology Go To Market and Alliances, said: “Driving innovation within the specialty insurance market is something we are very focused on.

“The unique toolsets and data that Concirrus has access to will drive new insights in the marine insurance industry, and we are thrilled to be working together.”

 
AIG appoints Chief Claims Officer of General Insurance
American International Group (AIG) has appointed Anthony Vidovich as Chief Claims Officer, General Insurance, effective May 14, 2018.

In his new role, Mr. Vidovich will be responsible for the strategic direction of the general insurance claims division and will serve as a member of the general insurance executive leadership team.

He joins the company from XL Catlin, where he has served as Global Head of Claims, Insurance and Reinsurance since 2015.

Peter Zaffino, Chief Executive Officer, General Insurance, said: “Anthony is an accomplished Property and Casualty executive with a demonstrated track record of managing complex claims and legal issues.”

Mr. Vidovich said: “I am very pleased to join AIG’s General Insurance leadership team as our industry faces new and more complex risks.”