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EC News (9th November 2017)

November 09, 2017

Round-up of the weekly news and developments from the global insurance market with stories from, Ascent, Verto, Blenheim and more.

Preservation Capital makes investment in Ascent

Private equity firm Preservation Capital Partners has agreed to take a “substantial” stake in specialist managing general agent (MGA) Ascent Underwriting.

Ascent confirmed the current management team will continue to hold a significant shareholding in the company and will continue to manage the business in its next stage of expansion.

Further terms of the transaction are not disclosed.

The capital provided by Preservation Capital will be used to support Ascent's growth ambitions through the development of new business lines and complementary products via the acquisition of emerging risk/specialist MGAs and through selective team hires.

The investment will also assist Ascent to meet the strong growth in demand for cyber insurance cover globally and further develop Ascent's proprietary OPTIO technology platform, while expanding its global distribution and in-house talent base.

Ascent CEO David Umbers said: "Since launching, Ascent has grown rapidly to become a successful and well-regarded MGA. Our independence is important, and we are pleased that our independence will be maintained through this deal with Preservation Capital who will provide us with investment to support our ambitious growth plans."

Meanwhile, Jatender Aujla, partner of Preservation Capital remarked: "We have been impressed by the growth Ascent has experienced since its launch in 2013. It is now one of the leading cyber markets within the Lloyd's insurance market. The management team of Ascent has done a fantastic job in rapidly growing the business in an attractive end market that is expected to experience significant growth over the next few years. The team has done this while maintaining exceptional underwriting performance. We see significant opportunity for further growth within cyber and in other emerging risk/specialty business lines and look forward to working with the management team to further build the business in its next stage of development."

FCA to probe competition in wholesale broking market

The Financial Conduct Authority (FCA) has launched a market study to assess how competition is functioning in the wholesale insurance broker sector and whether it could work better.

The FCA said it wants to ensure that the sector is working well, and fosters innovation and competition in the interests of its diverse range of clients.

The regulator explained that there have been remarkable changes in the wholesale insurance sector in recent years which have resulted in brokers developing new services and business practices.

As part of the study, the FCA said that it plans to explore how brokers compete in practice and whether they use their bargaining power to get clients a good deal, assess what conflicts of interest exist, how they are managed and how they affect competition and client outcomes and examine how broker conduct impacts on competition in the sector.

The FCA said it believes that effective competition contributes to ensuring London continues to be an international centre for insurance FCA executive director of strategy and competition Christopher Woolard said: “Given the size of the wholesale insurance sector and the type of large scale risks it covers, the way it functions can have a wide-ranging impact on the broader economy. If businesses cannot get appropriate cover or pay more for services than they should, it can impact on their ability to operate and grow. 

“Brokers play an important part in the wholesale insurance sector ensuring clients get appropriate coverage at good value. However, following significant changes in the sector, we are looking at the dynamics to ensure competition is working well.”

The FCA aims to publish an interim report in autumn next year which will plan out its analysis, preliminary conclusions and any potential solutions to address concerns.

The London insurance market is one of the world’s leading centres for large scale, complex commercial and specialist risks, controlling more than £68bn in gross written premium.

Verto to begin writing business in 2018 with £115mn stamp capacity

Verto Syndicate 2689 is set to begin writing business in 2018 with a stamp capacity of £115mn after receiving approval of its 2018 business plan.

The news came as Hampden announced that it had reconsidered the terms of participation for 2018 on Syndicate 2689 and that it had agreed with Asta and Lloyd's that all Hampden Members' capacity will be freehold for 2018, which will make its syndicate capacity tradable in next year's auctions.

Verto's business plan for 2018 has been approved as submitted with capacity of £115mn and an Economic Capital Assessment (ECA) of 92.4 percent which represents a reduction from the mid-year ECA of 136.5 percent meaning that the pre-emption can be taken up in full with a 42 percent average increase in ECA as part of a diversified portfolio.

“We welcome the change to freehold capacity for 2018,” remarked Hampden.

“This is always our preferred option at Hampden in any event when we look at potential new syndicates. The reduction in ECA is also welcome for enabling take up of capacity offered by the pre-emption,” the firm added.

Blenheim moves into A&H and specialty re with duo of hires

Blenheim has made two new appointments as it announced the launch of its accident and health (A&H) and specialty reinsurance divisions in line with its 2018 business plan.

The carrier revealed that Nick Faux will head up the A&H unit while Stephanie Hunt will join the specialty reinsurance division, which will be spearheaded by John Cutts following his arrival in June 2018. Both appointments are effective immediately.

Faux joins the syndicate from Munich Re where he was most recently an A&H and contingency underwriter.

Meanwhile, Hunt moves over from specialty excess of loss MGA Tamesis Dual, where she was responsible for underwriting specialty reinsurance business across marine and composite business lines.

Commenting on the hires, John Hamblin, active underwriter of Blenheim Syndicate 5886 said: “We are delighted to announce the arrival of both Nick and Stephanie, and the launch of our accident and health and specialty reinsurance divisions. We have long viewed accident and health and specialty reinsurance as key classes in our long-term business plan.”

Probitas appoints Bale for retail expansion

Probitas Syndicate 1492 has named former ProSight active underwriter Marcus Bale as head of strategy and development for retail as it moves ahead with its plans to grow its retail business.

In his role, Bale will lead the expansion of the retail portfolio, which will sit alongside its existing property, casualty and construction divisions.

He joins from ProSight Syndicate 1110, where he was active underwriter. During his career he has held numerous leadership positions in both company and Lloyd’s markets and has experience of developing commercial insurance portfolio across multiple channels of sale including direct to consumer, bank and broker.

Commenting on the appointment, Probitas CEOAsh Bathia said: “We’re pleased to welcome Marcus to the Probitas team at such an exciting time for our business,”

“He brings valuable experience to the table, allowing us to continue to bring new and accretive business to the Lloyd's market through innovative solutions.”

LSM appoints Beard as senior war & terrorism underwriter

Liberty Specialty Markets (LSM) has hired Jennie Beard as senior underwriter of war and terrorism.

In her new role, Beard will report to war and terrorism underwriting manager Paul Beattie and will be based in London.

Beard joins the carrier from Sompo Canopius, where she was co-head of its London-based terrorism team, writing a diverse global account including major corporate clients.

Michael Burle, head of marine at LSM said: “With the solid growth in war and terrorism business we’re seeing, we are expanding our underwriting team in order to better serve our brokers and clients.

Jennie is a well-respected market practitioner and has a strong track record in this sensitive and complex line of business. Her arrival gives us real strength in depth plus additional insight into key territories.”

AFL appoints Gordon in surety and trade credit push

AFL Insurance Brokers has appointed Nathalie Gordon as director of surety as it looks to expand its surety and trade credit capabilities.

In her new role based out of Munich and London, Gordon will be responsible for working with AFL’s global broking and managing general agent clients to develop AFL’s surety practice.

Gordon joins from Munich Re where she most recently served as a credit and bond underwriter, responsible for overseeing a Latin American portfolio of surety, credit and political risk. Prior to Munich Re, Gordon worked at Atradius Re in Ireland and Coface in Spain. She also lectures in surety at the Pan-American Surety Association.

AFL CEO Bob Finch said: “Due to the current reluctance of banks to tie up capital in bonds, we are seeing a steady trend globally for surety products to migrate to insurers. We are proud to be at the cutting edge of change and progress in our market, and are using our expertise to develop products that deliver at the highest level.”

AFL chairman Toby Esser added: “Nathalie brings a wealth of experience and insight to our growing team and we are delighted to welcome her to AFL. We are also pleased to be able to offer the technology and flexibility to enable Nathalie to work from Munich as well as London.”