• 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

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.”

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).”

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.”

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.”

• 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

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.”

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.

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.

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.”

• 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

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.”

“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.”

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.”

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.”

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.”

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.”

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.”

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.

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.”

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.”

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.

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.

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.

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.”

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.”

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.”

This marks a further decline from the $2.5 billion deficiency Morgan Stanley estimated for 2016, representing an overall YoY deterioration of $1.6 billion, Reinsurance News has reported.

Analysts have estimated an actuarially reasonable range of reserves between $605.8 billion and $633.7 billion, and the report found that at the 34th percentile of this range, industry carried reserves of $615.4 billion, which were $4.3 billion below the midpoint.

The report found that deficiencies are now present in five of the top six reserve lines, including workers’ compensation, personal auto liability, other liability occurrence, other liability claims-made, and commercial auto liability.

Morgan Stanley said that the bulk of the decline was in the other liability lines, which deteriorated $3.7 billion year-on-year.

The firm said that it does not consider large industry reserve releases to be sustainable, and forecasts slower reserve releases in 2018 and 2019.

The ratings agency has updated Best’s Credit Rating Methodology, in which ERM is now formally recognized as one of the core building blocks in developing a credit rating opinion on an insurance company.

Technological advancements open up new horizons in risk management and the assessment and mitigation of cyber risk poses “a myriad of challenges for insurers”.

The ratings agency said “cyber risk brings insurers’ operational risk to the fore, and for those insurers underwriting cyber risks, a focus on coverage limits and aggregation risks from industries is critical.

“Insurtech and fintech innovations and the growing use of third-party vendors for data analytics add layers of cyber and infrastructure risk, requiring that companies expand and enhance their ERM,” the report said.

The majority of losses come from the California wildfires in October and December 2017, and other related events.

Currently, the industry loss estimate from the Northern and Southern California wildfires is projected at over $13 billion, a rise from initial loss estimates of between $8 billion and $10 billion.

The company has also made a change to its reporting of operating income, a non-GAAP financial measure.

Beginning Q1 2018, Everest Re will adjust its operating income to exclude foreign exchange gains and losses.

According to the report, this is because the company believes the impact of foreign currency movements on income is not indicative of the performance of the underlying business in a particular period.

In his new role, Mr. Probert will be responsible for managing the firm’s global underwriting strategy, and to monitor technical and business performance across all portfolios.

He brings with him more than 35 years of underwriting experience and joins the managing general agent from QBE’s European operations, where he served as Director of Europe.

Talbir Bains, Founder and Chief Executive Officer of Volante, said: “Jerry is a fantastic addition to the Volante team and brings an outstanding level of underwriting expertise and leadership experience to the role.

“His appointment underlines our continued commitment to achieving and maintaining the highest standards of underwriting excellence across the Group.”