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EC News (14th June 2018)

June 14, 2018

Round-up of the weekly news and developments from the global (re)insurance market with stories from Hyperion, Chubb, Integro and more.

Hyperion takes 9.9% stake in Apollo managing agency

Hyperion has acquired a minority stake in the parent of Lloyd’s managing agency, Apollo Syndicate Management Limited (ASML).

The deal has seen the broker purchase a 9.9 percent share in Apollo Partners LLP, the holding entity for the managing agency, from existing partners.

ASML manages Lloyd’s Syndicate 1969, a multi-line syndicate operating across 12 main classes of business that was established in 2009. For the 2018 underwriting year, ASML also launched SPA 6133, which focuses on property treaty lines. Combined, the syndicate and SPA have a 2018 stamp capacity of £260mn.

ASML was authorised as a standalone managing agency in 2015.

Commenting on the transaction, Hyperion CEO David Howden said: “The Hyperion Group is invariably intertwined with the Lloyd’s market at various levels including our broking and underwriting operations. This opportunity to invest in a respected managing agency allows us to benefit from Apollo’s insights and knowledge.

“David Ibeson’s contribution at DUAL has already been invaluable and we are looking forward to a closer working relationship with him and Apollo.”

David Ibeson, CEO of Apollo Partners LLP added: “We are delighted to have a closer relationship with the Hyperion Group. As a non-executive Director of DUAL, I know we share the same values and client centric approach. The partnership will be enhanced as a result of this relationship and we are all excited about the future opportunities it will bring.”

The transaction comes after Hyperion secured $400mn of backing from long-term institutional investor Caisse de dépôt et placement du Québec (CDPQ) in December 2017.

Kendrick to retire from Chubb at year-end

Chubb European president Andrew Kendrick is set to retire at the end of 2018, handing over leadership for the region to David Furby from 1 July.

Furby, who currently serves as division president of the company’s international commercial P&C business, will take over the reins as regional president for the firm’s European business and will be promoted to senior vice president of Chubb Group at the beginning of next month.

Industry veteran Kendrick has spent four decades in the (re)insurance industry, having begun his career at Sturge Syndicate 210 in 1978. He has led the carrier’s European operations as regional president since 2004.

Furby and Kendrick have been with the firm for more than 20 years, have both joined legacy ACE in 1996 when the company acquired the Ockham Syndicate.

Kendrick will remain with the carrier until end of the year as senior vice president of Chubb Group and executive chairman of its European operation. During this time, Chubb said that he will focus primarily on regulatory matters, including the company's Brexit plans and duties related to the Chubb European Group board of directors and its joint underwriting control committee.  

Commenting on Kendrick’s retirement, Chubb Group chairman and CEO Evan Greenberg said: "As Chubb's second-largest region, Europe is a core franchise and a significant contributor to the results of our organization.

" He has done much to lead and build our business and our reputation across the UK and Continental Europe. His distinguished career has been defined by his leadership, skill and collegiality.”

Greenberg added: “Andrew has earned his retirement, but we look forward to continuing to benefit from his experience, counsel and energy in the coming months.”

Speaking on Furby’s appointment, Greenberg remarked: “David has proven he's ready for this important role, and I have every confidence in his abilities and skill as a leader to drive sustained growth and profitability across the UK and Continent.”

Separately, Chubb announced that financial lines executive Timothy O’Donnell will succeed Furby in his role as overseas commercial P&C president.

Both Furby and O’Donnell will report to Juan Andrade, executive vice president, Chubb Group and president of its overseas general insurance division.

Integro finalises Tysers acquisition

Integro has completed its acquisition of Tysers’ parent Hawkes Bay Holdings, marking its largest purchase to date.

The broker noted the acquisition nearly doubles the size of its current wholesale business, adding that the structures and cultures of the two businesses were “highly complementary”.

Integro said that it will now begin the process of merging its wholesale and retail operations with Tysers, with integration plans “well underway”.

The combined wholesale business will be led by Integro’s co-heads of wholesale, David Abraham and Jason Collins, whilst the combined corporate and private clients segment will be overseen by Integro’s head of UK retail Bob Pybus. 

The entertainment and sport segment will continue to be led by Neil Clayton.

Abraham said: “This is a very exciting milestone in the history of both firms. Together, we have created a significantly larger wholesale platform, one which will bring a unique and attractive offering to the UK market and our international clients.”

Gary Andrews, Tysers’ head of North America added: “Integro and Tysers have similar cultures and ways of doing business.  We have a great opportunity to attract and retain the very best, entrepreneurial talent in our industry.”

RTG’s Limehouse acquires Corporate Underwriting

Limehouse Agencies, the MGA business of Risk Transfer Group (RTG), has acquired Dublin-based specialist marine underwriting agency and Lloyd’s coverholder Corporate Underwriting Limited (CUL).

RTG, which is the recently rebranded holding company of independent wholesale broker RFIB, said that the acquisition forms part of the strategy it unveiled last month to double revenues to £100mn by 2021. 

CUL is a leader in the specialist marine insurance market in Ireland and has a distribution network of over 100 retail brokers.

Following the transaction, Myles O’Brien, founder and managing director of CUL, will continue to lead the business, which RTG said it intends to grow.

Commenting on the deal, RTG CEO Steven Beard said: “Corporate Underwriting Ltd is a leader in the Irish marine market and it has an excellent reputation for providing flexible, tailored solutions for brokers and clients which are competitively priced.

“This is the first step in our growth strategy to double our revenues to £100mn in the next three years establishing MGAs and captive businesses and by outgrowing the market on the broking side through RFIB. It is an exciting time for RTG and I am delighted to welcome Myles and his team to the business.”

O’Brien added: “This is a fantastic marriage of international expertise and local know-how. We’re incredibly excited about the future opportunities this presents for the Irish market. 

“We look forward to working closely with RTG in delivering outstanding products and services to our brokers and clients.”

Lloyd's predicts France will win World Cup

Lloyd’s has tipped France as the winners of the forthcoming 2018 FIFA World Cup, based on insurable value.

Citing research with the Centre for Economics and Business Research (Cebr), the Corporation explained that France has the most expensive team competing in the tournament and therefore should emerge victorious and be crowned World Champions.

The findings show that France (£1.4bn), England (£1.17bn), Brazil (£1.1bn) have the three most expensive teams in terms of insurable value and that the average insurable value of one England player is more than the entire Panama squad.

The total collective value of all teams in this year’s tournament is estimated at £13.1bn.

The research also showed that forwards are the most valuable players, with their legs worth on average £19.2mn, whilst players aged between 18-24 years old have on average the highest insurable value at £20mn.

Lloyd’s highlighted that similar analysis was undertaken in collaboration with Cebr ahead of the 2014 FIFA World Cup, which correctly predicted that Germany would be victorious.

Cebr used players’ wages and endorsement incomes, alongside a collection of additional indicators, to construct an economic model which estimates players’ incomes until retirement. These projections formed the basis for assessing insurable values by player age, playing position and nationality.

Lloyd’s said the analysis enable it to predict who would qualify from their respective groups. After that, Lloyd’s plotted the path of each team in the knockout stages based upon their insurable values. The team with the highest insurable value in each match is the team Lloyd’s predicts to win and progress.

The research was supported by Sporting Intelligence, who provided anonymised footballer salary data for each of the 32 teams participating in the 2018 FIFA World Cup, based upon an indicative 30-man squad for each nation.

According to the analysis, Group G, which includes Belgium, England, Panama and Tunisia, has the highest insurable value at over £2.3bn.

Colombia, Japan, Poland and Senegal will battle it out in the ‘Group of Death’ for a place in the knockout stages – with just £26.5m separating the three teams in terms of valuation, Group H will be the most competitive in the tournament.

Victoria De’Ath, Lloyd’s Class of Business, said: “Our model correctly predicted the winner of the 2014 FIFA World Cup so we wanted to put it to the test once again. The analysis makes interesting reading for football fans who are preparing for the most popular and widely viewed sporting event in the world.

“The contrast between the teams at the top and bottom in terms of insurable value is staggering, with the top six national teams worth more than the other 26 combined. We can’t wait to see if some teams can defy the odds and make it through, and if the favourites can prove their worth.”

Brit taps Talbot for COO

Fairfax-owned Lloyd’s carrier Brit has appointed Michael Gould as its new COO.

Gould joins from Talbot where he served as COO since 2015 and was responsible for operational change designed to improve responsiveness and efficiency.

Brit said that he has also been instrumental in helping drive the Lloyd's TOM modernisation initiative, where he has spearheaded the Structured Data Capture initiative.

Prior to Talbot, Gould was group COO of Hiscox for six years. During his career, he has also held senior positions at Aon and American Express.

Welcoming Gould’s appointment, Brit CEO Matthew Wilson said: “He brings unrivalled experience, both of the Lloyd’s market and in transforming and leading best-in-class operational functions. 

“Brit aspires to be at the forefront of innovation in our industry, by embracing the rapid changes in technology and business process, to drive meaningful competitive advantage. Michael’s track-record of execution and transformation therefore make him a natural fit.”

“I look forward to working with Michael as he leads the operations team to support the business as we continue to grow and execute on our strategic objectives,” he concluded.

Gould’s appointment follows the departure of former COO Nigel Meyer who left Brit to join Canopius as its new CFO in March.

AmWins MGA Unicorn launches SME division

AmWins has launched an SME division within its London-based MGA Unicorn Underwriting.

Kevin Hawkins and Richard Ellis have joined the MGA to run the small business unit, taking on the roles of UK SME underwriting director and UK SME pricing director, respectively.

The pair join from LV=Broker, where they spent the past 11 years building and managing SME accounts.

Unicorn will initially offer SMEs commercial combined, retailers, office and surgery and property owners products, alongside the previously available unoccupied residential and commercial property policies. New SME products are underwritten by AA- rated Travelers.

Unicorn CEO Sasa Brcerevic said: “I am very pleased to welcome two very talented, experienced and skilled leaders to head Unicorn’s new SME division. Having spent many years serving UK SME clients, both have consistent track records in delivering market-beating results.”

Hawkins said: “The SME market is ripe with opportunity for a fresh, client-centric underwriting agency. Unicorn enjoys the support of a strong and stable backer in AmWins and, with policies underwritten by AA rated Travelers, we have the ideal foundation to offer clients the very best products.”

Price Forbes launches reinsurance subsidiary

Price Forbes has launched a new reinsurance subsidiary that will specialise in treaty and facultative business.

The new broking entity, Price Forbes Risk Solutions Ltd (PFRS), will operate as an Appointed Representative of Price Forbes and exist as a subsidiary operating within the international and specialty segment of Price Forbes’ parent company, The Ardonagh Group.

PFRS will be led by former Tysers Re and RK Harrison broker David Barrie and will focus both treaty and facultative reinsurance business, with the aim of maximising opportunities across the group.

Commenting on the launch of PFRS, Price Forbes CEO James Masterton remarked: “We are confident that our investment to create an independent reinsurance and specialty insurance intermediary has come at an opportune time and we look forward to this new venture and the opportunities it will bring.”

PFRS CEO Barrie said: “We are delighted to be joining the Ardonagh Group as an Appointed Representative of Price Forbes and we look forward to working closely with the various teams in the business to create exciting opportunities across the group.”