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EC News (22nd November 2018)

November 22, 2018

Round-up of the weekly news and developments from the global (re)insurance market with stories from Lloyd’s, Guy Carpenter, PPL and more.

Lloyd’s COO Khoury-Haq to depart

Lloyd’s chief operating officer Shirine Khoury-Haq has decided to the leave the Corporation after nearly five years.

Since joining Lloyd’s in 2014, she has been the driving force behind the creation of the London Market Tarket Operating Model (TOM) and, as its sponsor, worked with the market to design and deliver the first comprehensive programme to digitise the London (re)insurance market and make it easier to do business.

As COO, her remit includes global operations, information technology, data, innovation, business transformation and corporate real estate. She is also a member of the Lloyd’s executive committee.

Khoury-Haq joined Lloyd’s from Catlin, where she was group head of operations and UK COO. Prior to this, she was an associate partner at IBM, specialising in large systems and business transformation projects as well as post-merger/acquisition integration. She also had responsibility for finance and operations for several regions while employed at McDonald's Corporation.

The announcement of Khoury-Haq’s departure follows that of Lloyd’s first female CEO Inga Beale last month, whilst Lloyd’s CFO John Parry is set to exit the Corporation next April having revealed his decision to leave in May.

Lloyd’s said that Khoury-Haq’s departure date will be confirmed in due course.

In a statement, Khoury-Haq said: "The last five years have been incredibly rewarding, working with colleagues in Lloyd’s and across the industry to deliver real digital change for the first time in decades. Solutions have been designed and built that are transforming the way insurance is conducted in London. I'm delighted that the experiences I brought from effecting profitable and complex change in insurance and other industries have been helpful in delivering what we promised for London. 

“I have also been very lucky to work with two great CEOs, Inga Beale and John Neal, who have backed me both professionally and personally. We have made considerable progress in Operations within Lloyd’s and the London Market TOM has been well adopted. So now, with Lloyd’s full support, this feels like the right time to look for the next challenge."

Commenting on Khoury-Haq’s departure, recently instated Lloyd’s CEO John Neal said: "I would like to take this opportunity to personally thank Shirine for the role she has taken in delivering real change to the way the Lloyd’s market does business over the last five years. Having created the vision for the TOM, she built the consensus and momentum needed to deliver on its promise so that market firms are now seeing genuine benefits. 

“Shirine’s knowledge, tenacity and commitment have also made her an inspirational role model to women and the BAME community in both the market and Corporation. She can take great credit for the progress made. In my short time at Lloyd’s I have very much enjoyed working with Shirine, and value the support she has given me. Shirine will continue as COO and a fully committed member of the ExCo until she leaves during the first half of 2019, with our sincere thanks and best wishes for the future.”

JLT Re’s Howard named Guy Carpenter vice chair

JLT Re chairman Ross Howard is set to become vice chairman of Guy Carpenter following the completion of Marsh & McLennan Companies (MMC)’s £4.3bn acquisition of JLT.

In his new role, Howard will be responsible for developing new business opportunities and assisting with client relationships in order to continue the growth of the combined global reinsurance business, as well as playing a key role in executing the integration of JLT Re with Guy Carpenter.

He will also become a member of Guy Carpenter’s executive committee and will report to the reinsurance broker’s president and CEO, Peter Hearn.

The latest integration news comes after MMC unveiled last week that it would merge the specialty teams of Marsh and JLT into one combined specialty business, Marsh-JLT Specialty, with JLT Group CEO Dominic Burke and JLT Specialty CEO Lucy Clarke being named chairman and president of the new unit, respectively.

Commenting on Howard’s appointment, Hearn said: “We are very excited to take the first steps in bringing together these two great reinsurance businesses. 

“I have known Ross in the market over the years and believe he will play a pivotal role in the success of the combined organisation, driving growth and global collaboration, while further differentiating our client value proposition. I am very pleased to welcome Ross to our leadership team.”

Howard remarked: “I am delighted at the prospect of joining Guy Carpenter’s industry-leading executive team and look forward to adding a complementary perspective and diversity of thought that will deliver greater value and profitable growth to clients.”

MMC’s acquisition of JLT is expected to close in spring 2019.

Beazley, Aegis and Allied World lead PPL adoption in Q3 as targets exceeded

Beazley, Aegis and Allied World have topped the first published PPL adoption table as adoption of the e-placing platform gained momentum in the third quarter.

According to data released by the PPL board, Lloyd’s syndicates placed 29.6 percent of in scope risks through electronic placement during the third quarter of 2018, while International Underwriting Association (IUA) companies signed up to PPL accepted an average of 29 percent of in scope risks – outstripping the 20 percent target set for the period.

Around 71 percent of syndicates met or exceeded the target, although 12 percent did not reach the target and 17 percent reported that they had no in scope risks during the period.

According to the first PPL adoption table, Beazley Syndicate 3623 emerged as the strongest performer, accepting 61.2 percent of in scope risks through e-placement in Q3 2018, followed by Aegis Syndicate 1225 at 59.9 percent and Allied World Syndicate 2232 at 51.2 percent.

Apollo Syndicate 1969 and Blenheim Syndicate 5886 took fourth and fifth place respectively.

Meanwhile, the PPL board reported that 58 percent of IUA companies met or exceeded the target during the quarter.

One hundred percent of syndicates at Lloyd’s reported under the mandate, and figures for almost all IUA companies signed up to PPL were also analysed.

As of 15 October 2018, 46 brokers and 113 carriers are signed up to PPL, with all classes of businesses now rolled out on the platform.

Bronek Masojada, chair of the PPL Board commented: “We have always wanted to celebrate success and our adoption table is about a race to the top. We hope businesses will be proud of what they have achieved in the last six months. The fact that the market has, as a whole, significantly exceeded the target set is hard evidence that many in the market are taking the challenge of digitalisation very seriously.

“There is no doubt that most focus is still in the latter stages of the placement process or beyond. If you look at endorsement activity, brokers have saved over 50,000 visits to underwriters that have not been required because of PPL – releasing time for more valued added activities. But we want to get it right, right from the start of the value chain – at submission, and there is still a long way to go on those metrics.

“Quotes and submissions are rising but more slowly than firm orders, risk bound or endorsements. Accurate data right from the start is the critical path to success.”

Lloyd’s COO Shirine Khoury-Haq added: “I am pleased to see that momentum continues to build around PPL adoption and Lloyd’s has again significantly exceeded its quarterly targets. 

“The impressive adoption of electronic placement just goes to show that market participants are committed to transforming the way the London market operates. These actions, which target not only efficiency improvements but also help to further enhance our customer value proposition, are critical to ensure that London remains the global hub for (re)insurance.”

Louise Day, director of operations at the IUA, said: “The number of risks accepted via PPL continues to grow across the company market with several firms doubling their trade on the platform since the previous quarter. IUA members comprise many different business models and processing arrangements yet support for PPL is widespread with adoption rates matching those achieved by Lloyd’s managing agents.”

MS Amlin partners with Folgate ahead of relaunch

MS Amlin has entered into a co-insurance deal with Folgate Insurance Company as the UK insurer prepares to relaunch and underwrite live business once again.

As part of the partnership, the Lloyd’s carrier will provide paper for Folgate’s property, liability, professional indemnity and other lines of business throughout the UK from 1 January 2019.

Folgate’s managing agent, APC, will facilitate the underwriting to ensure its panel of supporting brokers continue to get the service they need.

Folgate is set to relaunch in December and begin writing business from 1 January 2019, after it received regulatory approval from the Prudential Regulation Authority to recommence writing primary insurance and reinsurance business in the UK earlier this year.

Folgate is owned by MGA APC Underwriting, which acquired the UK insurer in 2014 after it was put into run-off by its former owner, Towergate, in 2002. Folgate was originally established in 1877.

Once relaunched, the UK insurer will give brokers access to classes such as property, general and professional liability, directors & officers and warranty. It also underwrites binding authorities through managing general agents, independent brokers, and Lloyd’s coverholders.

Folgate chief underwriting officer Ian Russell said: “We are absolutely delighted to relaunch Folgate into the UK market with a partner as strong as MS Amlin. This is the start of moving Folgate back to where it once was,

“There have been recent signs that the market is turning, especially in London, therefore this new partnership could be valuable for a lot of brokers and MGAs in the UK during 2019.”

Richard Coxon, head of underwriting for UK P&C at MS Amlin, commented: “We are incredibly pleased to be partnering with a long-established insurer like Folgate Insurance Company and we are very proud to be a part of the launch. 

“We believe that the combined experience and expertise of MS Amlin, Folgate and APC will result in a very strong offering for the broker market.”

Arch appoints Sturgess as international insurance CEO

Hugh Sturgess has been named CEO of Arch Insurance International.

He succeeds Matt Shulman, who was recently named chief executive of Arch Insurance North America.

Based in London, Sturgess will be responsible for Arch’s international insurance operations, including those in Europe, Bermuda and Australia, with his new role taking effect from 1 January 2019. He will report to Nicolas Papadopoulo, chairman and CEO of Arch Worldwide Insurance Group.

Sturgess currently serves as president and CEO of Arch Insurance Canada, having been with the company since 2005. Prior to joining the carrier, he held various positions in the financial services industry, including tenures with the Royal Bank of Canada and Chubb Insurance Company of Canada.

Papadopoulo commented: “Hugh is an experienced industry executive who knows and values the Arch brand,

“His elevation to lead our international operations is well deserved, and I’m confident in his ability to successfully build on the transformation started by Matt Shulman.”

Sturgess remarked: “Arch Insurance International underwrites a diverse portfolio of specialty insurance solutions across a number of geographies, with a key focus on providing value to our distribution partners and customers,

“I look forward to the opportunity to work with our team in continuing to expand the value proposition of our International platform.”

Alongside Sturgess’ appointment, Arch also announced two appointments at Arch Insurance Canada.

Gale Lockbaum will become president and COO of the Canadian operation, with responsibility for finance, actuarial, claims, risk and compliance, as well as overseeing regulatory matters. She has been with Arch Insurance Canada since 2011 and currently serves as chief financial officer.

Meanwhile, Jean-Pierre Galipeault will become Arch Insurance Canada’s chief regional executive, with responsibility for strategy, distribution and underwriting. He has been with Arch Insurance Canada since 2013, managing its Lenders business unit.

Both appointments are effective 1 January 2019.

“During the last five years under Hugh’s leadership, Arch Insurance Canada has experienced a successful turnaround and is now positioned to grow profitably,” said Shulman. 

“I am pleased that we are promoting from within and look forward to the operation’s continued success under Gale and Jean-Pierre,” he concluded.

Tokio Marine HCC taps Axis for marine liability head

Tokio Marine HCC has named Darren Carr as head of marine liability for its London Market division.

Carr joins Tokio Marine HCC from Axis, where he most recently served as head of marine and managed various underwriting teams, including marine liability, hull, cargo and specie, reinsurance and renewable energy.

He joined Axis (then Novae) in 2013 from Mitsui Sumitomo where he successfully established marine liability as a new class of business. Prior to that, he spent nearly five years with Hiscox as the deputy class underwriter developing broad experience across the marine liability market. He began his career as a broker within Aon’s marine division.

Tokio Marine HCC said that Carr’s appointment would support its growth strategy in the marine (re)insurance market as it develops its product offering, which includes marine trades, marine property, protection and indemnity (P&I) reinsurance, and marine and energy liability.

In his new role, Carr will report to Simon Button, chief underwriting officer for Tokio Marine HCC’s London Market division.

Carr said: “I am delighted that Darren has joined the Marine team. His experience and knowledge of the industry will help Tokio Marine HCC advance and invest in the marine liability space.”

Barry Cook, CEO of Tokio Marine HCC’s International Group, added: “The London Market division continues to grow, withstanding challenging market place conditions. 

“Recruiting reputable and experienced hires such as Darren highlights the steps that Tokio Marine HCC is taking to continually improve its offering to the broker and client community that is at the heart of our business.”

Brit launches Sussex Capital UK

Lloyd’s carrier Brit has launched a new multi-arrangement insurance special purpose vehicle (MISPV) in the UK for writing collateralised reinsurance.

According to Brit, Sussex Capital UK is the first transformer vehicle to be given permission by the Prudential Regulation Authority under the UK’s new insurance-linked securities (ILS) regime to carry on the activities of a MISPV, writing general collateralised reinsurance for multiple cedents via Brit’s distribution network in the London market.

Sussex Capital UK will initially focus on property catastrophe coverage, with capacity provided by Sussex Capital, Brit’s Bermuda-domiciled ILS fund platform, which it launched in December 2017 and writes direct collateralised reinsurance for third-parties while also providing collateralised reinsurance to Brit’s reinsurance portfolio and Lloyd’s syndicate.

Brit CEO Matthew Wilson commented: “I am both excited and proud to announce the launch of Sussex Capital UK, a landmark development in the emerging ILS market here in the UK.

“Sussex Capital UK further enhances Brit’s client and broker proposition and positions Brit extremely well to support growth in the UK’s ILS market as demand evolves over time.”

Mark Allan, Brit CFO, added: “Sussex Capital UK extends Brit’s ILS capability into the UK, further enhancing optionality and access to property catastrophe risk for our investors over the long term. 

“We are excited to be at the forefront in supporting the London market’s ILS ambitions and would like to thank the UK regulators for their commitment and responsiveness through the application process.”

Willis Towers Watson announces new chairman

Willis Towers Watson (WTW) has appointed Victor Ganzi as its new chairman.

Effective 1 January 2019, Ganzi will succeed James McCann, who will complete his current term as chairman of the board, three years after the merger of Willis and Towers Watson.

WTW said that McCann will continue to serve as a director and as chairman of the nominating and governance committee after he steps down from his position as chairman.

Ganzi has been a director of Willis Towers Watson since the January 2016 merger, although his service with the company dates back to 2010 when he served as chairman of Towers Watson’s audit committee and as a member of its nominating and governance committee.

In addition, WTW announced that Brendan O’Neill will become chairman of the audit committee, replacing Ganzi in that position. O’Neill has served as a director since January 2010.

Commenting on the announcement, WTW CEO John Haley, said: “Jim served as chairman of the board during the three-year period when Willis Towers Watson built a successful, integrated and leading advisory, broking and solutions company. Both I and the board would like to take this opportunity to thank Jim for his efforts in support of our company since 2004 and to wish him every future success.”

“As we look to the next phase of our company’s evolution, Victor brings considerable experience and insight to the company and we are delighted to announce his appointment as chairman of the board, effective January 1, 2019,” he added.

Ganzi remarked: “Three years after the merger, Willis Towers Watson has made excellent progress in delivering on its integration goals and driving sustainable, profitable revenue growth across the business. Our ability to deliver on the merger’s strategic rationale, namely our integrated approach to people and risk and a uniquely holistic perspective on client needs, is central to our continued success. I am very much looking forward to building on the foundation created over the past three years and taking our company to the next level.” 

McCann said: “I am immensely proud of what we have achieved at Willis Towers Watson in recent years, and glad to have played a leading role in delivering on the 2016 merger and its subsequent progress. It’s been a pleasure to lead the Board through this transformational time in the company’s development and I know that Victor and the rest of the leadership team will continue to lead the company to even greater future success.”