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EC News (25th October 2018)

October 25, 2018

Round up of the weekly news and developments from the global (re)insurance market with stories from Standard Syndicate 1884, Hyperion, Swiss Re and more. 

Standard Syndicate 1884 to be placed into run-off

The Standard Club is set to withdraw from the Lloyd’s market from 2019, with Syndicate 1884 to be put into run-off. 

The club established the syndicate in 2015 to underwrite marine and energy risks and has been its principal capital provider since.

The decision comes as the UK P&I mutual concluded that “current overcapacity and a weak pricing environment have made Lloyd’s a challenging environment for it to develop a profitable underwriting business with sufficient scale”.

Nonetheless, the Standard Club said that it is “exploring alternative approaches to provide its members with additional insurance covers, including establishing an underwriting agency”.

Syndicate 1884, which is managed by third-party turnkey provider Charles Taylor Managing Agency (CTMA), will write live business for the remainder of 2018 and will enter run-off on 1 January 2019 – a process that CTMA said it intends to manage.

In 2017, the syndicate booked gross written premiums of £89.3mn and reported a combined ratio of 156.5 percent.

Jeremy Grose, CEO of the Standard Club said: “Conditions in the Lloyd’s market are far more challenging today than they were when we planned the launch of the syndicate and it is the right decision to pull out now and allocate the capital to other initiatives.

“Lloyd’s represented a small part of our overall growth strategy.  The plan is delivering in line with expectations. We are diversifying our business to provide an even stronger and more stable business to meet our members core P&I insurance needs.”

“Recent initiatives include helping to establish the highly successful Singapore War Risks Mutual and setting up an innovative mutual collaboration facility with Korea P&I,” Grose added.

In a separate statement, CTMA said that it believes there will be increased demand for live and run-off syndicate management capabilities in the Lloyd’s market.

CTMA chairman Barnabas Hurst-Bannister said: “We are very confident in the prospects for Charles Taylor Managing Agency, both as a manager of live and run-off syndicates. We established the managing agency as a third- party syndicate manager in 2015 and developed up-to-the-minute systems and processes, designed specifically for that purpose.”

Jon Hancock, performance management director at Lloyd’s, remarked: “Lloyd’s is pleased to continue to work with and support Charles Taylor Managing Agency. We are confident that Syndicate 1884 will be run-off in an orderly and professional manner and that policyholders’ interests will be protected.”

Hyperion unveils new technology business

Hyperion has created a new technology-focused business, Hyperion X, which will specialise in the development of key areas of data, analytics and digital platform delivery.

Hyperion X, which is set to launch on 1 January 2019, will become the group’s fourth operating arm and will sit alongside its existing broking businesses Howden Broking Group and RKH Specialty (RKH), and its managing general agency (MGA), Dual.

Hyperion X will also manage Hyperion’s third-party InsurTech investments, as well as incubating its own start-up ventures.

Barnaby Rugge-Price will lead the new initiative as CEO, while Elliot Richardson will become chairman of Hyperion X.

Hyperion CEO David Howden said that the creation of the new business was a demonstration of the group’s commitment to innovation.

“As a group, we have always embraced change. For us to continue as independent leaders in the markets in which we operate, investment in technology and data is critical,” he said.

“By combining our expertise in international insurance markets with improved business insights from data, we aim to enhance the products and services that we offer to our clients, to reduce the unacceptably high cost of doing business and to open up new markets,” he added.

Rugge-Price commented: “There has been growing pressure on the cost of delivery across our industry which represents a great threat to us all but, at the same time, a great opportunity for those who can grasp it.

“I hope that Elliot’s and my experience across the market spectrum will combine with our growing inhouse analytics and technology capabilities to deliver a series of products and market platforms that address the needs of clients and markets. I believe the evolution of our industry’s proposition is the most important challenge we face, so when David asked me to lead Hyperion X, I eagerly accepted it as an opportunity to devote my time and energy to a critically important project.”

From 1 January, Andy Bragoli will take over as CEO and Rugge-Price as chairman of RKH, with Richardson continuing to lead RKH’s reinsurance business.

Bragoli currently serves as deputy CEO of RKH and has led RKH’s property and casualty (P&C) business since its acquisition by Hyperion in 2015. He has been with the group since 1997.

Swiss Re names Madzinga as UK&I CEO

Swiss Re has appointed Tavaziva Madzinga as its new UK & Ireland CEO.

He succeeds Frank O’Neill, who stepped down from the position in September to “pursue other interests”.

Madzinga, who will assume his new role from 1 January 2019, currently serves as market executive for the Middle East & Africa across both property & casualty (P&C) and life & health (L&H).

Based in London, he will remain a member of the group’s EMEA management team.

Madzinga joined Swiss Re in Zurich in 2016 following a 16-year career at South African insurer Old Mutual, most recently as regional CEO for South and East Africa.

Russell Higginbotham, CEO Reinsurance EMEA said: “I am delighted to have Tava as the leader of our business in the UK and Ireland. His strong and successful leadership of the Middle East & Africa region shows that he is the ideal candidate to lead and grow our UKI business.

“This appointment also shows our intention to continuously develop and grow the strong bench of talent we have at Swiss Re.”

The reinsurer said that the search for Madzinga’s successor in the Middle East & Africa is underway.

Miller to acquire Alston Gayler

Miller has agreed to acquire independent London market (re)insurance broker, Alston Gayler (AG).

Miller said the deal will “bolster offering to clients and strengthen its position as a leading London wholesale and specialist broking platform”.

The terms of the transaction were not disclosed.

Historically a marine specialist, the London market wholesaler - which is majority owned by Nelson Holdings Limited and employs more than 60 people - now operates across a number of classes, ranging from traditional and specialised reinsurance to property, political risk, aerospace and terrorism.

Commenting on the agreement, Miller CEO Greg Collins said: “AG and Miller are aligned in numerous ways, including our client-focussed approach, values, high level of expertise and strategic vision.”

“We are extremely excited to announce this development and look forward to delivering increased value to our clients through the alliance of our experienced teams,” he added.

Meanwhile, Robert Alexander, AG managing director added: “We have been looking for a partner that shares the same culture and the right platform from which we could continue to offer a high-quality service to our clients.

“We were thrilled to find such an opportunity with Miller and look forward to joining Miller’s highly talented team and continuing to grow together.”

Liberty puts Pembroke under strategic review

Liberty Mutual has launched a strategic review of its Lloyd’s managing agency, Pembroke.

In a statement, the carrier said that it has retained Evercore to serve as its adviser through the process.

Liberty acquired Pembroke back in May 2017 through its $3bn acquisition of US specialty carrier lronshore.

Pembroke underwrites a portfolio of specialty insurance through Lloyd’s Syndicate 4000 and company paper, including property, liability, political risks, marine and energy, accident and health, agriculture, and select specialist lines.

For the 2017 underwriting year, Syndicate 4000 reported gross written premiums of £414.3mn and a combined ratio of 111.5 percent.

Pembroke also manages Acapella Syndicate 2014 and Patria Re Syndicate 6125.

Liberty Mutual said that it does not plan on providing additional details of the review until its completion.

TigerRisk adds Hughes to London retro team

Jonathan Hughes has joined TigerRisk as a partner within the firm’s London-based retro team.

He moves to the reinsurance intermediary from Aon, where he most recently served as a senior broker specialising in retro and other protections for Lloyd’s syndicates.

Before that, he was a senior vice president and actuarial lead for the London market specialty lines division at Axis.

In his new role, Hughes will report to Alex Bridges, head of TigerRisk’s retro team.

TigerRisk CEO Rod Fox said: “Jonathan has a wealth of experience being one of the industry’s foremost retrocession specialists.

“He will be an invaluable asset to TigerRisk, and more importantly, our clients.”

Bridges added: “We’re very excited to have Jonathan join the team at a time when our clients need the best-in-class thought leadership and innovation around new retro products.”

Hughes commented: “Joining TigerRisk, an innovative and creative organisation, will enable me to develop the kind of bespoke programs clients need in this marketplace.”

LMG enlists Sequel for coverholder platform

The London Market Group (LMG) has signed a contract with Sequel to deliver the next wave of delegated authority tools for the market.

The contract between the two parties will see Sequel implement a faster and more efficient solution for approving and registering coverholders, and a new integrated tool for generating delegated authority binder contracts.

The initiative is a core part of the London Market Target Operating Model (LM TOM) and will replace the existing Atlas (the Lloyd’s coverholder approvals and compliance system) and the Binding Authority Registration (BAR) system.

The LMG said that authorised users will benefit from a modern and intuitive workflow system that streamlines processes, as well as a more intelligent process of approvals that take a more risk-based approach to save time and effort.

Additionally, the new solutions will only require users to enter data once, which will speed up processes, remove the opportunity for error, and increase the quality of data held and managed in the market.

The LMG added that it hopes to provide a ‘golden source’ for entity and contract data that can be effectively consumed by other LM TOM initiatives and market systems.

“This is the next stage of our strategy to automate and simplify our processes for coverholders,” said Ian Fantozzi, Beazley COO and market sponsor for the delegated authority solution.

He added: “Our ambition is to save time and remove duplication at every stage – replacing separate tools with one platform that eliminates manual processes.

“But most importantly, it allows data to flow seamlessly so that it can be made available in other parts of the value chain including DA SATS and other solutions.”

Sequel CEO Ian Summers commented: “We are delighted to be working with the LM TOM to adapt our workflow and product builder tools to provide enhanced functionality and make the process for delegated authority approval, compliance and binder registration faster and more efficient.

“Everyone in the market should benefit; with brokers being able to produce binders electronically or be loaded from existing market Contract Builders, underwriters will have accurate and timely data and coverholders should find the compliance process much less onerous.”

Axa to sell Ukrainian operations

Axa has struck a deal to sell all of its insurance operations in Ukraine to Canadian conglomerate Fairfax Financial.

The deal will see Axa exit the Ukrainian market.

Under the terms of the agreement, Fairfax will acquire 100 percent of the non-life entity (Axa Insurance) and the life entity (Axa Insurance Life) in Ukraine.

According to the statement, 50 percent of Axa Insurance in Ukraine is owned by the commercial bank Ukrsibbank.

The financial terms of the deal were not disclosed.

The closing of the transaction is subject to regulatory approval and other customary closing conditions.