October 18, 2018
Round-up of the weekly news and developments from the global (re)insurance market with stories from StarStone, Cincinnati Financial, Axis Re and more.
StarStone appoints Hendrickson as CEO
StarStone has selected former Validus executive John Hendrickson as its new group CEO.
He takes the reins of the global specialty carrier from Demian Smith, who resigned from the top job in September 2018 following eight years of service.
Hendrickson recently served as director of strategy, risk management and corporate development at Validus and was a member of the Validus Holdings public company board of directors until its $5.6bn acquisition by AIG in July.
Prior to that, Hendrickson was the founder and managing partner of SFRi LLC, an independent investment and advisory firm specialising in the insurance industry.
During his career, he has also held various positions at Swiss Re including: head of Capital Partners, Swiss Re’s Merchant Banking Division, managing partner of Securitas Capital and a member of the executive board.
Enstar CEO Dominic Silvester said: “In John, Enstar and Stone Point Capital have identified a proven industry veteran who provides immediate strong leadership and strategic direction to StarStone.
“StarStone remains a key part of the Enstar Group, and we are confident in John’s ability to optimise the business moving forward as a distinguished, multi-platform specialty insurer.”
Hendrickson added: “StarStone is at a pivotal point in its development, and I look forward to working with the team here to unlock the potential that exists for StarStone and our clients.
“Despite prevailing pricing, geopolitical and regulatory challenges, StarStone has good fundamentals and opportunities for profitable growth, and we will look to further solidify and advance our global offering while positioning the business for the future.”
Cincinnati Financial moves into Lloyd’s with Beaufort acquisition
Ohio-based P&C carrier Cincinnati Financial is set to make its entry into Lloyd’s with its acquisition of Munich Re’s MSP Underwriting, which operates through Beaufort Underwriting Agency and Syndicate 318.
Under the terms of the transaction, Cincinnati will pay Munich Re a £102mn cash consideration for the global specialty underwriter, based on MSP Underwriting's projected net asset value at closing.
The transaction has been approved by Cincinnati's board of directors.
Based in London, MSP Underwriting operates through Beaufort Underwriting Agency Limited, which underwrites for Lloyd's Syndicate 318.
Following the completion of the deal, MSP Underwriting will continue to operate under its own brand and with its existing leadership team as a wholly-owned subsidiary of Cincinnati.
Specialising in global property and aviation business, MSF Pritchard Syndicate 318 reported gross written premiums of £153mn in 2017 and has booked an underwriting profit in 20 out of the last 24 years, Cincinnati said in a statement.
Cincinnati said that it expects the acquisition to generate an attractive return over time and anticipates that the deal will be accretive to 2019 net income based on current assumptions.
Cincinnati Financial president and CEO Steven Johnston said: "Adding MSP Underwriting to the Cincinnati family brings experienced underwriters who we believe will open opportunities for us to support our agents in new geographies and lines of business.
“And, it complements our existing large commercial account, excess and surplus lines, high net worth personal lines and reinsurance assumed growth initiatives.”
"Munich Re is a long-time and valuable reinsurance partner. We are pleased to work with them through this transaction. MSP's size allows us to follow our proven strategy of building successful insurance businesses over time – just as we have with our excess and surplus lines subsidiary and our reinsurance assumed business,” he added.
Peter Röder, member of the board of management of Munich Re commented: “Cincinnati Financial is perfectly suited for enhancing MSP Underwriting’s business and we are looking forward to seeing the company prosper within Cincinnati Financial.”
“After the sale, Munich Re will have a focused and less complex set-up in order to drive profitable growth within the Lloyd’s market, instead of running two platforms in parallel. We remain committed to the Lloyd’s market, and will continue to grow the business within Munich Re Syndicate Ltd.”
The deal is slated to close in the first quarter of 2019, subject to regulatory approval.
Axis Re names Haugh as global markets president
Axis Re has appointed Ann Haugh as president of its global markets division.
Based in London, Haugh will be responsible for the oversight of Axis Re strategic partners, global specialty re and Axis Re’s international business platform in the Lloyd’s market.
She will become a member of the reinsurance leadership team and will report to Axis Re CEO Steve Arora.
Haugh joins Axis Re from insurance services firm Thomas Miller, where she served as group COO. Prior to that, she held a number of senior underwriting and operations leadership positions at Aspen and Zurich.
Concurrently, Axis Re announced that Rob Smart, who currently serves as interim president of global markets, has been appointed to the newly created role of head of specialty re. He will report to Haugh.
The specialty re unit, which sits within Axis Re’s global markets division, was established in May 2018 when Axis announced a new organisational design for its reinsurance segment as part of a commitment to strengthen market leadership.
Commenting on the appointments, Arora said: “We are excited to welcome Ann to Axis. Her 25 years of insurance experience spans underwriting, operations, strategy and P&L management.
“This breadth and versatility of experience is a great addition to our organization. Ann also demonstrates the strong cultural values of execution and empathy that we are building at Axis Re.”
“I am confident that Rob will be successful in leading this very important business for Axis Re and delivering global product strategies. We are appreciative of his energy and commitment in establishing the global markets division during the interim period,” he added.
Axa XL names Curran CUO of London market wholesale
Axa XL has appointed Dan Curran as chief underwriting officer (CUO) of its London market wholesale business.
Curran succeeds Paul Greensmith, who was recently named UK CEO for Catlin Underwriting Agencies and XL Catlin Insurance Company and appointed as regional leader for the UK to help shape the new division as part of the Axa and XL integration project.
In his new role, Curran will be responsible for Axa XL’s P&C London wholesale business. He began his career at legacy Catlin nearly two decades ago and has held a number of senior underwriting roles since then.
In 2012, he was appointed head of casualty at Catlin before being assigned responsibility for the UK and Ireland casualty portfolios, including general liability, US healthcare, employers’ liability and motor liability, three years later.
Following the re-organisation of XL Catlin’s target operating model in October 2016, Curran assumed responsibility of the casualty wholesale portfolio.
Neil Robertson, CEO of global specialty at Axa XL commented: “I am extremely pleased that Dan has assumed responsibility for our London-based property & casualty wholesale business, which is a considerable and important part of our operations at Lloyd’s.
“He started his career some 20 years ago as an underwriting assistant on the healthcare professional liability account at Catlin, and today his extensive knowledge and expertise positions him ideally to lead this part of our business.”
Ardonagh sells Direct Group’s claims unit to Davies
The Ardonagh Group has agreed to sell Direct Group’s claims business to Davies Group.
Under the terms of the deal, Davies will pay Ardonagh a consideration of up to £36mn dependent upon performance. Ardonagh said that the proceeds of the sale will be used for “further investment” in the group.
The transaction will see Direct Group (DG)’s 360-strong claims team, led by managing director Russell Crewe, come under new ownership with immediate effect including two dedicated claims centres in Elland and Preston.
Direct Group Claims and Davies Claims Solutions combined will form one of the UK’s leading providers of end-to-end claims solutions with operating centres in the UK, Ireland and Bermuda.
Davies Group will provide claims management services to Ardonagh’s underwriting and broking businesses in a six-year agreement made as part of the deal, continuing the existing claims servicing agreement carried out by DG Claims.
Direct Group’s distribution brands Simple Landlords, Fortress and Lutine Life Assurance remain as part of Ardonagh’s Schemes and Programmes segment under the leadership of DG CEO Derek Coles.
Commenting on the deal, Ardonagh CEO David Ross said: “At the heart of The Ardonagh Group strategy is the desire to be best in class across a core portfolio of brands and businesses.
“Under the ownership of Davies Group, the DG claims operation will be completely at home within a leading claims service provider and will undoubtedly benefit from shared expertise and ambition in this specialist market.”
“Today’s announcement will allow us to accelerate investment in our strategic priorities as a group and we look forward to continuing our strong relationship with DG’s claims business in the future as part Davies Group,” he added.
Meanwhile, Coles remarked: “Our claims operation has gone from strength to strength since its creation in 2007, earning a reputation for first class customer service and now delivering significant value as part of Ardonagh. I’m incredibly proud of the business we have built, and now creating this new opportunity for the claims business to thrive and prosper in future.”
“In Davies Group, we believe the team are well placed to continue growing on their success as part of a renowned specialist in the claims field, sharing the same appetite for innovation and quality.”
The divestment comes just weeks after Ardonagh struck a £165mn deal to acquire UK personal lines broker Swinton.
Lloyd’s welcomes new CEO John Neal
John Neal has officially begun his role as CEO of Lloyd’s as the Corporation formally welcomed his arrival and the former QBE chief executive outlined some of his immediate priorities.
In a statement, Neal said: “It is a privilege to take the helm at Lloyd’s, the world’s most important commercial insurance and reinsurance marketplace, and the place where I started my career in 1985.”
“As I begin this role, it is important that we focus on maintaining the market’s reputation for innovation, accelerating our efforts to modernise the ways in which we do business, and take the time to listen to all of our stakeholders, who are critical to the future wellbeing of the Lloyd’s market,” he said.
Meanwhile, the Corporation’s chairman Bruce Carnegie-Brown said that he was “delighted” to welcome Neal to Lloyd’s.
“He joins us at an important time and will continue the drive to improve the market’s long-term success through a number of critical areas of focus, including improving the market’s underlying performance, and the launch of Lloyd’s Brussels subsidiary.
“John brings a wealth of experience and real enthusiasm for tackling the challenges ahead. I am confident that Lloyd’s will continue to thrive under his leadership."
Neal’s entire career has been associated with the Lloyd’s market, most recently serving as group CEO of QBE. He was also an underwriter and later CEO of the Ensign Managing Agency.
He succeeds Inga Beale, who announced her intention to step down from the lead role in June after becoming Lloyd’s first female CEO at the beginning of 2014.
Antares hires CNA Hardy’s Taylor as specialty head
Antares has tapped John Taylor as its new head of specialty.
Taylor joins the Lloyd’s carrier from CNA Hardy, where he most recently led the firm’s specialty business.
He replaces Kieran Oliver, who is retiring from Antares after nearly two decades with the carrier. Taylor will report to Antares active underwriter Joe Battle.
Taylor began his insurance career as a broker at Willis, before turning his hand to underwriting with Chubb, where he spent nine years. After that, he went on to hold a range of senior roles at CNA Hardy during a 12-year tenure, including chief underwriting officer (CUO), European financial lines manager and UK financial lines manager. He became head of speciality in 2015.
Battle said: “Specialty is a key focus at Antares, and our team has gone from strength to strength under Kieran’s guidance in recent years. He has made a lasting impact on our team and I would like to thank him for his years of dedicated service.”
“John is a worthy successor to Kieran’s legacy and we have ambitious plans for the business. We see significant growth opportunities in the segment and John’s experience and understanding of the market will be crucial to continuing and further strengthening our market-beating results.”
Treaty reinsurance completes PPL rollout
Treaty reinsurance business has now gone live on the London market’s electronic placing platform PPL, completing the platform’s roll out of products.
PPL’s focus will now be on continuous improvement of the technology, functionality and usability of the platform, its board said.
Treaty reinsurance joins several other classes of business that can all be placed electronically, including terrorism, energy and construction, political risks, kidnap and ransom, accident and health and aviation risks.
In a statement, PPL board chairman Bronek Masojada said: "It is great news that PPL now has all insurance and reinsurance classes of business live so that the whole market can continue its progress in adopting electronic placement.
“With a record number of risks bound on the platform in recent weeks, there are positive signs that brokers and underwriters are working together to reap the benefits of increased efficiency, reduced back office costs and, most importantly, improved client service.”
PPL is a core component of the London market Target Operating Model.
Earlier this year, Lloyd’s issued a mandate for the use of electronic placement as it seeks to increase efficiency and reduce costs, warning of financial penalties for failures to comply.
As part of the mandate, each Lloyd’s syndicate was required to have written at least 10 percent of its risks electronically from the end of the second quarter of 2018.
This target will rise by another 10 percent each quarter until the fourth quarter to reach 30 percent, with further targets to be confirmed before the end of the year.
Lloyd’s said that by way of financial incentive, if managing agents meet with each of the target requirements then members of that syndicate will be eligible to receive a rebate on their annual subscriptions.
However, it warned that if managing agents do not meet with each of the target requirements, then members of that syndicate will pay additional fees, in order to contribute to the costs of modernising market systems and processes and may be subject to capital loading.
The electronic placing platform provided by PPL was launched in July 2016, initially for standalone terrorism business.