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EC News (12 March 2020)

March 12, 2020

Round-up of the weekly news and developments from the global (re)insurance market with stories from Aon, Skuld, UIB and more.

Aon confirms amalgamation with Willis Towers Watson

Global (re)insurance broker, Aon confirms the merge with broker Willis Towers Watson announcing a definitive agreement in an all-stock transaction with an implied combined equity value of approximately $80bn.

The combined company will continue to operate under the name Aon and will maintain operating headquarters in London.

The new firm will be led by Greg Case and Aon chief financial officer Christa Davies, along with a highly experienced and proven leadership team that reflects the complementary strengths and capabilities of both organisations.

Current CEO of Willis Towers Watson, John Haley will take on the role of executive chairman of the combined company and focus on growth and innovation strategy.

The Board of Directors will comprise proportional members from Aon and Willis Towers Watson's current directors.

Now the confirmation has been released after speculation last week, Aon explained the deal with Willis Towers Watson will provide both companies an opportunity to expand and further accelerate its existing growth strategy. The new firm will be positioned to maintain and immediately deliver mid-single digit organic revenue growth and double-digit free cash flow growth.

Aon states in the press release that the rationale of the combination of two highly complementary businesses into a technology-enabled global platform is more relevant and responsive to client needs sharing a belief in the power of data-driven insights to create new sources of client value.

The deal is expected to drive year one earnings accretion to Aon adjusted EPS with free cash flow accretion of more that 10% after full realisation of $800mn of expected pre-tax synergies.

Aon claims the transaction is expected to generate more than $10bn in shareholder value creation from the capitalized value of expected pre-tax synergies.

Willis Towers Watson and Aon anticipate savings of $267mn in the first full year of the combination, reaching $600mn in the second full year, with the full $800mn achieved in the third full year.

Each Willis Towers Watson shareholder will receive 1.08 Aon ordinary shares for each Willis Towers Watson ordinary share, and Aon shareholders will continue to own the same number of ordinary shares in the combined company as they do immediately prior to the closing.

Upon completion, existing Aon shareholders will own approximately 63% and existing Willis Towers Watson shareholders will own approximately 37% of the combined company on a fully diluted basis.

The combination is subject to the approval of the shareholders and regulatory approvals, however both parties expect the transaction to close in the first half of 2021.

John Haley, Willis Towers Watson CEO said: "The combination of Willis Towers Watson and Aon is a natural next step in our journey to better serve our clients in the areas of people, risk and capital. This transaction accelerates that journey by providing our combined teams the opportunity to drive innovation more quickly and deliver more value."

Greg Case, Aon CEO commented: "This combination will create a more innovative platform capable of delivering better outcomes for all stakeholders, including clients, colleagues, partners and investors. Our world-class expertise across risk, retirement and health will accelerate the creation of new solutions that more efficiently match capital with unmet client needs in high-growth areas like cyber, delegated investments, intellectual property, climate risk and health solutions."

Skuld announces reshuffle to the London management team

Marine insurance provider Skuld announced key changes to its management team in London.

Gregory Thomas, chief business development officer at Skuld London will relocate to Norway and focus on continuing to drive the developments of Skuld’s global commercial business from the Oslo headquarters, effective 1 July 2020.

At the same time Matthew Burton, senior vice president, head of London P&I, has been appointed as senior vice president, head of business, London.

Ståle Hansen, president and CEO of Skuld, commented: “Greg has played a vital role in the successful growth in business in the Skuld London office. I would therefore like to thank him for all his efforts and excellent work. I look forward to welcoming him back to our headquarters in Oslo.”

Adding: “Skuld London will continue to play an important role for our global operations, and I am very pleased to announce Matthew Burton as SVP, head of business, Skuld London. With Matt’s solid experience in the London and international markets and his dedication to the business, I am confident that our London office will continue providing our members and clients the high-quality service and competence they rely on.

“I wish them both the best of luck in their tasks ahead.”

UIB names two senior appointments 

International (re)insurance broker UIB has named Carl Smith as operations director and Oliver Carriere as senior risk engineer.

Smith joins the business from Marsh where he previously served as chief operating officer (COO) specialty practices between 2010 and 2017 and as COO London Markets from 2017.

Before this, he served with Cox Insurance as aviation underwriter and head of administration, with Sedgwick (Broker Airlines and General Aviation), and with British Insurance and Investment Brokers Association (BIBA).

Smith will join the firm in mid-April and report to UIBL CEO Shaun Barrington.

Carriere, is a trained engineer and has spent his 30-year career within energy (re)insurance as an underwriter and consultant, with expertise in the African markets.

Prior to running his own consultancy and training business, he held the position of senior upstream and downstream energy underwriter at PartnerRe for 10 years. Before that he spent 14 years as AXA Re also as senior downstream energy underwriter.

Barrington, CEO of United Insurance Brokers Limited (UIBL) said: “Both Carl and Olivier are great additions to the team here at UIB. They bring vast experience of their respective roles and following our recent announcement of Miles Taffs’ arrival, we are delighted UIB continues to attract the best talent that is available across the London market and is consistently able to offer our clients additional value in all our service propositions to help them fulfil their own requirements.”

Nexus broking division acquires trade credit business from Howden UK

Insurance intermediary holding company, Nexus Group announced its independent broking arm Xenia Broking Group is set to acquire the trade credit business of Howden UK.

The transactions will complete on 31 March 2020 following which Xenia will integrate Howden’s trade credit business with its regulated entity Credit Risk Solutions Limited.

Tim Coles, CEO of Xenia, said: “This is an exciting and complementary acquisition for us and will form an integral part of Xenia going forward. The fact that a business of the quality of Howden has agreed that Xenia is the right home for its trade credit business further supports our strategy to build the leading independent trade credit broking business.  We are delighted to welcome Stuart and his team into the group and very much look forward to, together, exceeding our clients’ expectations for service and results.”

Chris Evans, CEO of Howden UK, added: “Xenia is clearly now the leading independent trade credit intermediary in the UK and I compliment Tim and the Xenia team on what they have achieved. Whilst Howden will now concentrate on our highly successful global trade credit, surety and political risks business, I am confident our UK regional trade credit customers and trade credit experts will benefit from the specialist proposition presented by Xenia. Xenia and Howden will continue to work in close partnership.” 

Stuart Grice, head of trade credit, Howden UK added: “I am very excited that our team is partnering with Xenia to deliver best-in-class products and services to our clients. Our culture which is underpinned by independence and entrepreneurship makes this an ideal fit. Our initial focus post acquisition will be on ensuring a smooth transition for our business and team, and a seamless continuation of trading for all existing and new clients, and insurers.” 

Grice will become client service director, North West and Scotland for Xenia post completion. 

Admiral’s CEO to retire, successor announced

Admiral Group’s CEO and director David Stevens has announced his retirement from the firm in 12 months’ time after nearly 30 years of service.

Stevens will be succeeded by Milena Mondini de Focatiis, the group’s current head of UK and European insurance.

Stevens co-founded Admiral in 1991 before becoming group CEO since May 2016. He will continue to work for the Group in a part-time advisory capacity after the transition period.

Mondini de Focatiis joined Admiral in 2007 and since then has been a member of the leadership team. She has extensive experience of the group’s operations and has attended and actively contributed at Board meetings as an observer since 2011.

Prior to joining Admiral, her previous roles included being CEO of ConTe.it, Admiral’s Italian insurance business which she founded in 2008.

Annette Court, Admiral Group chair, commented: “Having been through a comprehensive and robust succession process, the Board is confident that in Milena we have a natural successor and a leader for the next generation.  We have a wealth of management talent at Admiral and bringing this through has always been a central pillar to Admiral’s management philosophy as the business evolves alongside its customers.  Milena brings a deep appreciation of the special Admiral culture, entrepreneurial spirit, commercial track record and people development skills.”

Stevens shared: “Few managers are lucky enough to be part of as fulfilling a corporate story as Admiral. Alongside my sense of good fortune and gratitude to those who made it possible, notably, Admiral’s founder Henry, and my many talented colleagues over the years, I feel a responsibility to do what’s best for the long-term future of Admiral.  That’s why I am looking to pass on stewardship of Admiral to a very talented next generation of Admiral management led by Milena Mondini.  They are collectively more than capable, not just of sustaining, but also of improving Admiral’s competitive competence and potent culture.”

“I am particularly glad that, in Milena, I have a successor who has the intelligence, the values, the track record and the clarity of vision to take on the role of Group CEO, and ensure that Admiral will continue to “go like a freight train” in the years to come.”

Mondini de Focatiis added: “I am immensely proud and humbled to be given the opportunity to succeed David as CEO of a truly special company.  During my 13 years with the Group I have worked closely with David, and previously Henry, and look forward to building on their legacy.  Admiral has a unique culture with staff and customers at its core, which has underpinned its track-record of growth and success.  The responsibility of ensuring this remains the case into the future is a challenge I am excited to take on.

“Thank you, David, for everything you’ve done for Admiral, and I look forward to continuing to work closely with you during the transition.”

Euler Hermes appoints Loeiz Limon-Duparcmeur as group chief financial officer

Global trade credit insurer has announced the appointment of Loeiz Limon-Duparcmeur as the new group chief financial officer (CFO) and member of the board of management, effective 1 April 2020.

Limon-Duparcmeur, currently group head of risk underwriting will succeed Chantal Schumacher who has decided to take on a new role in Allianz SE.

Limon-Duparcmeur joined Euler Hermes in 1995 as an investment manager for Euler SFAC. Since then he has held several senior controlling and finance positions in France, the Netherlands, United Kingdom, Italy and at group level. In 2016 he was country CEO for Euler Hermes Italy before joining the group again in 2019 as group head of risk underwriting.

Wilfried Verstraete, chairman of the Euler Hermes Board of Management, said: "I would like to thank Chantal for her support and commitment to the Group and to welcome Loeiz to the EH Board of Management. I am confident that Loeiz with his in depth knowledge of our business and with his broad international experience will do a great job in his new role. This appointment demonstrates once again the depth and breadth of experience of our teams all around the globe.”