November 15, 2018
Round-up of the weekly news and developments from the global (re)insurance market with stories from MMC, RSA, IASB and more.
Marsh combines specialty unit with JLT
Marsh & McLennan Companies (MMC) is set to merge the specialty teams of Marsh and JLT into one combined specialty business, Marsh-JLT Specialty.
JLT Specialty CEO Lucy Clarke has been named president of the new unit, which will become effective upon completion of MMC’s previously announced £4.3bn acquisition of JLT.
Based in London, Clarke will be directly responsible for Marsh-JLT Specialty’s energy, credit, marine, financial and professional, private equity and M&A (PEMA), construction, and aerospace business worldwide, and will become a member of the Marsh executive committee.
In addition to becoming vice chairman of MMC and a member of the MMC executive committee, current JLT Group CEO Dominic Burke will assume the role of chairman of Marsh-JLT Specialty and will also continue to be based in London.
Meanwhile, Mark Drummond Brady, JLT deputy group CEO, will become vice chairman of Marsh, based in London. He will also become a member of the Marsh executive committee.
Dean Klisura will take on the position of president of Marsh Global Placement. In this capacity, he will be responsible for placement protocols and standards across all lines within Marsh. He will also lead the non-specialty placement operations of Marsh, including Bowring Marsh and existing multi-line placement hubs. Klisura will remain a member of the Marsh executive committee and will continue to be located in New York.
Clarke, Drummond Brady and Klisura will all report to John Doyle, president and CEO of Marsh.
Commenting on the formation of the new combined specialty business, Doyle said: “It’s exciting to begin planning for the integration of Marsh and JLT. With the formation of Marsh-JLT Specialty, we will be well positioned to grow our specialty business through the combined value proposition of the two firms,
“While our brand is Marsh, Marsh-JLT Specialty will leverage the exceptional reputations of both firms’ specialty units with clients that require specialized products and services.”
Burke added: “I am proud of what JLT’s people, brand and experience can offer the specialty clients of Marsh and JLT, bringing together the best of our two firms. I look forward to working with Marsh colleagues on a successful integration and in leading this industry in exceptional client service and risk expertise through Marsh-JLT Specialty.”
Last week, MMC’s acquisition of JLT received approval from the target’s shareholders, taking the deal one step closer to completion, which is slated for spring 2019.
RSA to scale back London market premiums by a third
RSA has announced that it will cut its premiums written through the London market by around a third following a review and restructure of its specialty and wholesale business.
As part of the restructure, the UK carrier revealed that it would be exiting three lines of business with immediate effect or at contract expiry, namely international construction, international freight and fixed price marine protection and indemnity insurance, explaining that these lines are “unlikely to satisfy the Group’s profitability requirements in the foreseeable future.”
Meanwhile, RSA’s London market portfolios in international marine cargo and international marine transportation will be restructured into one unit under new leadership, with exposures in both areas significantly reducing as the company focuses on targeted areas where sustained profitability can be achieved.
RSA’s London market business, which is reported as part of RSA’s UK and International region, will now focus on four key specialisms; international hull, international cargo and transportation, international property, and international engineering and renewable energy risks.
The carrier said that these core portfolios, whilst subject to rigorous and selective underwriting, will allow it to concentrate on areas of existing strength and establish a platform for profitable growth in the future.
RSA said the plans to restructure its specialty and wholesale business, which forms part of its global risk solutions (GRS) unit, was part of an ongoing review to streamline the group’s international exposure, improving underwriting, pricing accuracy and risk management.
It said that combined, these actions are expected to reduce its premiums written through the London market by around one third in 2019 versus the prior year.
Steve Lewis, chief executive of RSA UK & International, commented: “RSA has historically served the London international specialty and wholesale market across a broad range of products and exposures.
“The changes we are making to our portfolio will enable us to take a much more targeted approach, focusing our efforts on specialist areas where we have market leading expertise and capacity. We will continue to evolve and build on this strategy over time in order to deliver sustained value for our customers and shareholders alike.”
Tony Buckle, managing director of RSA GRS, added: “As a specialist insurer to the London market, RSA will offer distinctive, best-in-class propositions to our customers in the segments on which we are focused. This will enable us to develop and sharpen our expertise and manage our exposures and volatility more effectively. We will be working closely with our customers and their brokers to assist them in a smooth transition.”
IASB proposes one-year delay on IFRS 17 implementation
The International Accounting Standards Board (IASB) has proposed delaying the implementation of its new IFRS 17 reporting standard by one year to 2022.
The accounting standard for insurance contracts was originally scheduled to come into effect from January 2021, but there have been calls from the insurance industry around the world to delay the standard for two years in order to prepare for such a significant change.
The new IFRS 17 rules require companies to recognise profit when insurance services are delivered, rather than when premium payments are received, as well as to provide information about insurance contract profits that are expected to be recognised in the future.
Last month, a global group of nine insurance associations penned a joint letter to Hans Hoogervorst, chair of the IASB, underscoring concerns surrounding IFRS 17’s impact on insurance contracts.
The proposed deferral is subject to public consultation, which is expected next year.
In addition, the IASB has proposed to postpone the implementation of IFRS9, the accounting standard for financial instruments, by one more year so that it will now come into effect alongside the implementation of IFRS 17.
“The board has proactively been working to support insurers and others with the transition to the new insurance contracts standard, including through establishing a Transition Resource Group and providing education materials. As part of that process, it has sought to understand any concerns companies may have about their ability to get ready for the new insurance contracts Standard by the 2021 effective date,” the global accounting body said in a statement.
“The decision to propose a one-year deferral at this meeting acknowledges the uncertainty that arises from the Board’s discussions about IFRS 17, while being responsive to comments from stakeholders that implementation should not be unduly disrupted. By making this decision, the Board has provided a clear direction, which will help companies with their planning,” it added.
IASB said that it expects to discuss the merits of potential amendments to the standard during its December meeting.
CNA Hardy announces senior leadership appointments
CNA Hardy has hired Jalil Rehman as its chief operating officer (COO), whilst naming Lisa Skeels as its head of human resources.
Rehman arrives from Chubb, where he most recently served as chief business operations officer, leading the integration of Chubb and Ace.
In the newly created role of COO at CNA Hardy, he is responsible for driving operational excellence throughout the business and building and maintaining a robust governance framework across the organisation, as well as becoming the direct report for the company’s data and analytics, claims, HR, IT/ops, risk and actuarial teams.
He will also join the board as an executive director, subject to legal and regulatory approval.
Meanwhile, Skeels moves over from Marex Spectron, where she was group head of HR. Before that, she spent 14 years at Chubb in a variety of HR leadership roles responsible for the development and implementation of its HR people strategy across Europe.
In her new role, she is responsible for the strategic people agenda of CNA Hardy’s talent management and attraction, compensation and benefits and HR business partnering programmes.
In addition, the firm said that she will work with the wider leadership team to drive a stronger performance driven culture whilst also progressing the company’s diversity and inclusion agenda.
Commenting on the appointments, CNA Hardy chief executive Dave Brosnan remarked: “Our focus at CNA Hardy is on driving synergy, and profit improvement. Both Jalil and Lisa have solid track records working for global organisations, building robust operational frameworks and working with leaders around the world to build successful and high performing teams. I am delighted to welcome Jalil and Lisa to CNA Hardy.”
Alesco names Smith as managing partner of energy
Alesco has tapped RK Harrison’s Jonathan Smith as managing partner of energy.
He succeeds Simon Clarkson, who has been promoted to deputy chairman of energy, which the broker said will “enable him to dedicate more time to business production and managing key client relationships.”
Smith joins Alesco following an 11-year career at RK Harrison, where he was most recently executive director, head of upstream energy. Before that, he spent nine years at Agnew Higgins Pickering, joining its board in 2005 and taking responsibility for the upstream division. His career has also included positions at Willis and Alexander Howden.
Jonathan Lyne, chairman of energy at Alesco, said: “Our business and reputation are built on attracting, investing in and retaining the best talent in the market. Naturally, therefore, we are delighted to welcome Jonathan — a recognised energy sector leader — into the Alesco fold and congratulate Simon on his new role.
“This transition demonstrates the flexibility of Alesco’s senior management, and its dedication to creating innovative and industry-leading solutions for both existing and prospective clients — more of whom will now benefit from Simon’s extensive knowledge of Alesco’s capabilities, while receiving a fantastic service from our dedicated energy practice. I expect to see continued growth from this division under its new leadership team.”
Maidment to join Lloyd’s board in 2019
Lloyd’s has announced that Neil Maidment has been appointed as an independent non-executive of the Lloyd’s board.
The appointment will take effect from February 2019 once Maidment’s term of office on the Council of Lloyd’s comes to an end on 31 January, and is for an initial term of three years.
The news comes as Maidment nears his retirement from Beazley in December 2018, having spent most of his 34-year insurance career with the Lloyd’s carrier, where, during the last decade, he has served as chief underwriting officer.
The Corporation said that Maidment’s appointment to the board will ensure that “his knowledge and experience will be retained for the benefit of the Lloyd’s market.”
It added that while he will continue serving as a member of Lloyd’s Risk Committee, he is stepping down as chairman of the Lloyd’s Market Association (LMA), where he has worked on key strategies including market modernisation and the response to Brexit.
“We would like to congratulate Neil on his appointment. His knowledge and experience will be an invaluable contribution to the work of the board,” Lloyd’s concluded in a statement.
Capsicum Re adds duo to London property and specialty division
Capsicum Re has bolstered its London property and specialty teams with two new hires.
Ed Le Flufy has joined the firm as a speciality broker, focusing on cyber business. He moves over from BMS, where he most recently served as divisional director of its global reinsurance team, having begun his career with the broker on its graduate scheme before moving onto a number of senior positions with the company.
In his new role, Le Flufy will report to global head of cyber, Ian Newman.
Meanwhile, Piers English has joined Capsicum Re as a treaty reinsurance broker, reporting to Patrick Sheehy, specialty casualty partner.
English arrives from Accenture, where he was a management consultant in the London market insurance division. Prior to this, he was a casualty treaty broker at Willis Re for four years.
Newman said: “Rapid technological evolution is making the possibility of a marketplace consisting of three core classes – property, casualty and cyber (PC&C) – ever more likely. In preparation, we continue to bring on exceptional talent of Ed and Piers’ calibre to bolster our capabilities, as we help clients navigate the new risks they face.”
Sheehy added: “I am delighted to welcome Piers to the team. His extensive knowledge of casualty treaty will complement the skills of our existing team, as we help clients around the world prepare for the risks of the future.”
BMS makes senior energy hire
BMS has appointed Duncan Hayward as a director within its energy division.
Hayward joins the broker from Price Forbes, where he most recently served as divisional director. Prior to that, he served as an associate at JLT, having begun his insurance career as an oil and gas broker at Agnew Higgins Pickering.
In his new role, which he will begin in 2019, Hayward will lead the casualty initiative within BMS’ energy division.
Ian Gormley, director at BMS Group, commented: “Our London wholesale platform has gone from strength to strength in recent years, with market-beating growth. We place exceptional value in our people and work hard to attract the very best talent in the market.
“Our client-centric and flexible model of broking, combined with our employee-ownership structure, lies at the heart of our success. We are very pleased that it continues to draw the best and brightest individuals from across the market and I would therefore like to welcome Duncan to our team.”