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In depth: Cat hit makes 2018 a crucial year for Lloyd’s

p4-7 Raging Thomas fire threatens to IAG deal add to $10bn California wildfire bill lays ground for ‘10% premium boost’ for top three reinsurers

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ID-Complete Picture-260x70.indd 1 08/09/2017 14:23 2 www.insuranceday.com | Tuesday 12 December 2017 NEWS Raging Thomas fire

Market news, data and insight all day, every day Insurance Day is the world’s only daily newspaper for the international insurance and reinsurance and risk industries. Its primary focus is on the London market and what affects it, threatens to add to $10bn concentrating on the key areas of catastrophe, property and marine, aviation and transportation. It is available in print, PDF, mobile and online versions and is read by more than 10,000 people in more than 70 countries worldwide. California wildfire bill First published in 1995, Insurance Day has become the favourite publication for the London market, which relies on its mix of news, analysis and data to keep in touch with this fast-moving and vitally important sector. Its experienced and highly skilled insurance writers are well known and respected in the market Fire in southern California is among state’s 10 most destructive and their insight is both compelling and valuable.

Insurance Day also produces a number of must-attend annual Scott Vincent Firefighters events to complement its daily output, including the Insurance Editor, news services monitor the Day London Market Awards, which recognise and celebrate the Thomas fire as very best in the industry. it burns through Los Padres For more detail on Insurance Day and how to subscribe or National Forest: attend its events, go to subscribe.insuranceday.com the blaze is now alifornia’s Thomas fire has be- the fifth-largest Insurance Day, Christchurch Court, 10-15 Newgate Street, come the fifth most expansive in state history London EC1A 7HD in state history with more than © 2017 Noah 230,000 acres burned, further Berger/AP Cadding to this year’s record-breaking Editor: Michael Faulkner wildfire insured loss bill. weekend, prompting evacuation orders ance has reported insured losses of +44(0)20 7017 7084 The fire has destroyed 798 structures, for the coastal city of Carpinteria and $9.4bn from October’s fires as of Decem- [email protected] with a further 191 damaged, the Cali- parts of Santa Barbara. ber 1. Loss declarations have so far ac- Deputy editor: Lorenzo Spoerry fornia Department of Forestry and Fire The most destructive wildfire in the counted for up to $1.775bn of this total. +44 (0)20 7017 6340 Protection (Cal Fire) said. However, up state’s history was this October’s Tubbs Travelers said it expects a pre-tax loss [email protected] to 18,000 structures are potentially at fire, which destroyed 5,643 structures of between $525m and $675m from the risk as firefighters struggle to bring the in October. October events, with AIG expecting a Editor, news services: Scott Vincent +44 (0)20 7017 4131 blaze under control. This month’s activity means a quarter bill of $500m, largely through its per- [email protected] Five other fires are also active in of California’s 20 most devastating wild- sonal insurance business. southern California and have destroyed fires on record have occurred within Chubb expects a pre-tax loss of $280m Global markets editor: Graham Village 294 structures combined, the majority the past 70 days. Of the 20 most dam- from the northern California wildfires, +44 (0)20 7017 4020 of which are in San Diego and Los An- aging blazes to hit the state, only 2003’s with its fourth-quarter catastrophe bill [email protected] geles counties. Cedar fire has burned more acres than reaching $320m in total. XL Group ex- Global markets editor: Rasaad Jamie Only four fires in state history have the Thomas fire. pects an October wildfire bill of $200m, +44 (0)20 7017 4103 burnt more acres than the Thomas fire, The ongoing wildfires in southern with fourth quarter catastrophe losses [email protected] which is also now in the top 10 in terms California follow October’s events in reaching $250m. of property destruction. northern parts of the state, which are RenaissanceRe ($90m), Markel ($40m Account manager: Matthew Smith +44(0)20 7017 7894 Having charred a large swath of Ven- expected to cause insured losses of to $80m) and Arch Capital ($25m to $30m) Business development manager: Toby Nunn +44(0)20 7017 4997 tura county last week, the Thomas fire around $10bn. have also made preliminary disclosures Advertising/events: Jefferson Emesibe +44(0)20 7017 4061 entered Santa Barbara county at the The California Department of Insur- of their expected share of the loss. Head of production: Liz Lewis +44 (0)20 7017 7389 Production editor: Toby Huntington +44 (0)20 7017 5705 Subeditor: Jessica Sewell +44 (0)20 7017 5161 Table: Top 20 most destructive California wildfires Events manager: Natalia Kay +44 (0)20 7017 5173 Fire name (cause) Date County Acres burned Structures** Deaths Editorial fax: +44 (0)20 7017 4554 Tubbs (under investigation) Oct 2017 Sonoma 36,807 5,643 22 Display/classified advertising fax: +44 (0)20 7017 4554 Tunnel, Oakland Hills (rekindle) Oct 1991 Alameda 1,600 2,900 25 Subscriptions fax: +44 (0)20 7017 4097 Valley (electrical) Sep 2015 Lake, Napa, Sonoma 76,067 1,955 4 All staff email: [email protected] Witch (power lines) Oct 2007 San Diego 197,990 1,650 2 Nuns (under investigation) Oct 2017 Sonoma 54,382 1,355 2 Insurance Day is an editorially independent newspaper and Jones (undetermined) Oct 1999 Shasta 26,200 954 1 opinions expressed are not necessarily those of Informa UK Ltd. Informa UK Ltd does not guarantee the accuracy of the Butte (power lines) Sep 2015 Amador, Calaveras 70,868 921 2 information contained in Insurance Day, nor does it accept Thomas* (under investigation) Dec 2017 Ventura 230,000* 790* 1 responsibility for errors or omissions or their consequences. Paint (arson) Jun 1990 Santa Barbara 4,900 641 1 ISSN 1461-5541. Registered as a newspaper at the Post Office. Published in London by Informa UK Ltd, 5 Howick Place, Fountain (arson) Aug 1992 Shasta 63,960 636 0 London, SW1P 1WG. Sayre (miscellaneous) Nov 2008 Los Angeles 11,262 604 0 City of Berkeley (power lines) Sep 1923 Alameda 130 584 0 Printed by Stroma, Unit 17, 142 Johnson Street, Southall, Middlesex UB2 5FD Harris (under investigation) Oct 2007 San Diego 90,440 548 8 Redwood Valley Oct 2017 Mendocino 36,523 544 9 © Informa UK Ltd 2017. Bel Air (undetermined) Nov 1961 Los Angeles 6,090 484 0 Laguna (arson) Oct 1993 Orange 14,437 441 0 No part of this publication may be reproduced, stored in a Erskine (under investigation) Jun 2016 Kern 46,684 386 2 retrieval system, or transmitted in any form or by any means electronic, mechanical, photographic, recorded or This list does not include fire jurisdiction. These are the top 20 regardless of whether they were state, federal or local responsibility otherwise without the written permission of the publisher * Fires are uncontained and totals are likely to change of Insurance Day. ** Structures include homes, outbuildings (barns, garages, sheds, etc) and commercial properties destroyed# Source: Cal Fire www.insuranceday.com | Tuesday 12 December 2017 3 NEWS IAG deal lays ground for ‘10% premium boost’ for Flooding in Hamburg after Herwart hit : Perils estimates the storm will cost top three reinsurers insurers €242m © 2017 Bodo Marks/DPA via AP Perils: Storm Sizeable quota-share deal with upcoming renewals could take Zealand. These quota-share agree- the reinsurers’ top-line premium ments, including ceded premi- Herwart to IAG sets up Munich Re, Swiss Re growth to near the double-digit ums, cost IAG A$2.6bn ($1.96bn) and Hannover Re for significant mark, the analysts added. in its 2017 financial year ended cost insurers “While the impact from this June 30, Deutsche Bank said. premium growth as rates set to single deal is small in a group €242m head upwards, analysts say context, it sets the scene for the Prices on the up upcoming renewals,” the ana- The new deal with Europe’s top Extratropical Herwart will lysts said. “After this deal, the three will reduce IAG’s placement cost insurers €242m ($285.5m), ac- Group (IAG), according to analysts. 2018 top-line growth for those of its gross catastrophe cover from cording to the provisional estimate Lorenzo Spoerry The 12.5% quota-share agree- three reinsurers could approach 80% to 67.5% at the 2018 renewal, from catastrophe loss aggregator Deputy editor ment, which covers IAG’s con- the 10% level.” when prices are expected to in- Perils, writes Scott Vincent. solidated business in Australia, The agreement, the Deutsche crease in the wake of the second The storm most significantly af- New Zealand and Thailand, is Bank analysts added, “overall half’s record catastrophe losses. fected and Germany when alone expected to contribute confirms our positive view on Hurricanes Harvey, Irma and it struck northern Europe on Oc- unich Re, Swiss between €900m ($1.06bn) and the sector”. Maria, plus earthquakes in Mex- tober 29. Re and Hannover €950m in gross written premi- IAG said it signed the deal to ico, are expected to generate an The storm’s rapid passage Re could see 10% ums, or 2% to 3% of the total reduce its earnings volatility and insured loss of about $100bn, meant its extreme winds only last- top-line growth in growth for these reinsurers, capital requirements. Deutsche causing reinsurance prices to ed for two to three hours. Germa- M2018 on the back of a prominent Deutsche Bank’s analysts said. Bank analysts estimated it could rise after six years of price de- ny was hit in the morning, while deal with Insurance Australia And an expansionary strategy at add about €375m in gross written clines. But brokers and analysts Austria was battered by Herwart premiums to Munich Re’s book, have warned intense competition during the late morning and early $440m to Swiss Re’s and €190m to for risk from the capital markets afternoon. Hannover Re’s. means price hikes are likely to be Strong gusts mainly affected The ceded IAG portfolio is un- limited in scale. the eastern half of the country, derstood to be a profitable one, As a result, most cedants expect including the states of Upper and with a combined ratio of approx- to see rate hikes of less than 10% Lower Austria, Vienna, Salzburg, imately 90%. Assuming a 10% on US and Caribbean excess-of- Styria and Burgenland. underwriting margin, it is esti- loss business, a survey of rein- To a lesser extent, mated the deal could add 1% to surance buyers by rating agency was also affected. Perils said the the group profits of each of the Moody’s revealed. storm also hit three countries that three reinsurers. By Barclays’ estimation, prop- are not among the territories it IAG already has a 10-year, 20% erty catastrophe reinsurance covers: , the Czech Repub- Financials: IAG’s deal with quota-share agreement with Berk- pricing will increase by between lic and Slovakia. Europe’s three largest shire Hathaway, which has been 15% and 25% on loss-affected ac- Perils will provide its next up- reinsurers could deliver 10% in place for two years, and a sep- counts. Loss-free accounts, the dated estimate for Herwart on top-line growth to all three arate quota-share deal with Mu- bank’s analysts said, will see hikes January 29, three months after Alzay/Shutterstock.com nich Re covering business in New of between 5% and 15%. the event start date. Skuld targets North America with London P&I hire

Marine insurer Skuld is seeking Skuld said it would continue to expand its protection and in- ‘Recruiting Rachael to develop its offering in the demnity (P&I) business in North clearly demonstrates region through its New York of- America with a senior hire, writes not only our fice, as well as its teams in London Lorenzo Spoerry. commitment to and Oslo. The marine mutual has ap- our London P&I Ståle Hansen, Skuld president pointed Rachael Simpson senior and chief executive, said: “Re- vice-president for its London P&I operations, but our cruiting Rachael clearly demon- operations. She was previously intent to develop strates not only our commitment underwriting manager for Steam- further our business to our London P&I operations, but ship Mutual’s American business. in North America’ our intent to develop further our New York: Skuld’s new The North American market business in North America.” hire Rachael will focus on North America has been a growth area for Skuld’s Ståle Hansen Simpson assumes her new role business development P&I business in recent years. Skuld in March 2018. 4 www.insuranceday.com | Tuesday 12 December 2017 www.insuranceday.com | Tuesday 12 December 2017 5 COMPANIES HOUSE

Chart 1: Lloyd’s and the competition, combined ratios compared n Lloyd’s n Competitor group* Cat hit makes 2018 a crucial year for Lloyd’s 115 *13 leading large insurance 115 and reinsurance groups

The market is on course to post a big loss for 2017 but has a struggle on to 110 ensure it achieves vital rate rises next year 110

chart 1 shows, Lloyd’s has under- Jon Hancock, the new performance insurance specialist, almost all of 105 Graham Village performed its competitors recently management director at Lloyd’s, the damage will fall to the 2017 year 105 Global markets editor even though cat losses have been warned at the Association of Lloyd’s because most cat business attaches comparatively low. Members (ALM) annual conference in the first half of the calendar year. 100 Lloyd’s senior executives have in June of the dangers posed by the Looking at the market’s loss re- 100 been warning well before this market’s rising catastrophe expo- porting in more detail, only a hand- maller Lloyd’s and compa- year’s cats about the market’s sure. Risk appetite had exceeded ac- ful of Lloyd’s businesses have issued ny market underwriters deteriorating performance and ceptable levels in 2016, he said, and cat loss estimates. Reporting at the 95 95 are likely to face the big- reliance on favourable reserve de- was continuing to rise. He attribut- nine-month mark is fairly patchy

gest challenge of all mar- velopment to massage underwrit- ed this to three main factors: the for Lloyd’s businesses and the table (%) Combined ratio Skets as they pay this year’s huge ing results. strength of the dollar to the pound; shows highlight figures for compa- 90 catastrophic losses and position A particular worry has been the better returns in the cat market for nies and groups that issue figures. 90 themselves to benefit from rate rising expense bill (see chart 2). some syndicates, albeit in a benign Hiscox posted a group loss esti- improvements next year. Rating agency Fitch pointed out ac- loss environmental up to that point; mate of $225m for Hurricanes Har- 85 Lloyd’s business profile and quisition costs (effectively broking and the practice of some syndi- vey, Irma and Maria and said it was 85 unique capital structure combine to fees and commissions) have risen cates writing above business plan. not expecting material claims from make it more vulnerable than other from 17% of gross premiums in His department would be focusing the Mexican quakes or the Califor- sectors of the global industry to ma- 2005 to 22% last year, and the rat- on those syndicates writing above nia wildfires. 80 80 jor catastrophic loss, and this year’s ing agency said underwriters will plan, he said, and for 2018 all syndi- Lancashire put its group net loss run of north Atlantic hurricanes, be hoping the recently announced cates would be required to write cat – comprising exposure at Lloyd’s, Mexican earthquakes and wildfires review by the Financial Conduct business within plan throughout the company sector and its partic- 75 in California will put the market ful- Authority into the workings of the the year. ipation in the Kinesis facility – at 75 ly to the test. London wholesale market will re- Fitch similarly has a negative $106m to $212m for the three hurri- 20112011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2016 2016 H1 2017 2017 H1 Centrally, Lloyd’s estimates its sult in reduced costs. However, outlook for the sector rating for canes and the Mexican quakes. overall bill for the third-quarter that review is not due to close until the London market. In an update Beazley said it expected claims cats at $4.8bn, of which $3.9bn autumn next year at the earliest. issued last month, the rating agen- of $200m to $300m for the second Chart 2: Lloyd’s operating expenses (£m)Lloyd’s CR% *Competitor group CR % relates to Hurricanes Harvey and S&P Global Ratings revised its cy said the market should be able half of the year, including the Cal- Irma, with another $900m from outlook for the Lloyd’s market to to absorb the capital hit from the ifornia wildfires, with an expected 30K 35 Hurricane Maria. negative following the catastroph- catastrophes, “although we expect midpoint pre-tax impact of $175m. 30k 35 As at the end of November, the ic losses of the third quarter. Addi- a number of Lloyd’s syndicates to Brit, owned by Canada’s Fair- market had paid claims of $1.7bn tional capital entering the market be temporarily below their Lloyd’s fax, reported losses of $241.1m for the three hurricanes and, as its and rate rises would both help the capital requirement”. Syndicates from the hurricanes and the Mex- claims-paying ability comes under capital position into 2018, the rat- have been working through the ican earthquakes, the most expen- 25K 29 closest scrutiny, Lloyd’s took the ing agency said, but Lloyd’s faced “coming into line” process that sive event being Irma at a cost of 25k 29 opportunity to underline its track uncertainty, including “further ensures members have sufficient $111.3m. The insurer recorded net record. Over the past five years, the major losses, weaker than antici- assets to meet existing under­ premium reductions for the third market has paid out $85bn in claims. pated rate recovery or members writing liabilities and to support quarter and nine months, partly With some major losses in the choosing to take advantage of future underwriting. due to the purchase of additional 20K 23 first half of the year and further rate revivals outside of their outwards protection. 20k 23 damage from Hurricane Nate plus Lloyd’s platforms”. Unaccounted-for losses Fairfax’s “other insurance and the California wildfire loss now S&P said Lloyd’s capital had de- Lloyd’s $4.8bn loss estimate is part reinsurance” reporting segment, of

approaching $10bn, 2017 is set to teriorated this year before the cats of a total industry bill put at some- which Advent forms a part, suffered %

be Lloyd’s worst year on record struck because of the market’s pre- where between $90bn and $110bn. third-quarter cat losses of $66.5m. £m 15K 18 15k 18 for catastrophic loss, exceeding mium growth, in part because of Disclosed loss estimates from tra- Lloyd’s business Talbot, owned the $4.9bn bill suffered in 2011. In the strength of the US dollar, and ditional insurers and reinsurers by Validus, suffered a hit of terms of relative damage, the hur- higher catastrophe exposure. total about half of that, leaving a $165.4m gross from the third quar- ricanes of 2005 made that year a Lloyd’s has doubled the size of significant amount unaccounted ter hurricanes, cut to $88.6m after 10K 12 more troubling one for Lloyd’s, as its overall account over the past for. A large chunk of that will fall reinsurance recoveries and rein- 10k 12 cats added a thumping 30.8 per- decade and a large chunk of that to collateralised vehicles that prob- statement costs. centage points to the market’s com- increase has come from the US ably will not release any figures but Chaucer, owned by Hanover, bined ratio. The 2011 cat bill added market, either in primary or rein- the suspicion is some underwriters said it faced cat losses for the nine 25.5 points. surance form, and notably through have underestimated their likely months of $125.9m, mostly due to 5K 6 Lloyd’s has tended to outperform managing general agents and in losses. Analyst Jefferies said smaller the three hurricanes and the Mexi- 5k 6 its main competitor groups – the the excess and surplus lines sector. Lloyd’s syndicates and US primaries can quakes. Chaucer’s gross account larger US primaries and specialty According to the latest survey were the most likely to have to re- for the period increased 8.5% but players plus Bermudian, European by AM Best, Lloyd’s was by some vise their estimates upwards in the net premiums were up just 1.7%. and other international reinsurers distance the largest surplus lines light of further information. Japanese group Mitsui Sumitomo 0 0 0 0 – except in years of major loss. player in the US in 2016, writing Under Lloyd’s three-year ac- reported recent acquisition MS Am- 20122012 20132013 20142014 20152015 20162016 The market has recorded good premiums of $9.6bn, giving it a counting convention, about 20% of lin suffered losses of £398m from annual profits in a range between market share of 22.6%, ahead of this year’s hurricanes should fall the third-quarter catastrophes, £2.1bn ($2.8bn) and £3.2bn since AIG in second place with a share of to the 2016 underwriting year of pushing the operation to an under- n Acquisition costs n Administrative expenses n Total n Gross written premium 2011 but competitive pressures 8.9%. Lloyd’s take has increased 5.2 account and the balance to 2017, Acquisition costs Administrative expenses Total Gross written premium n Operating expenses as a % of premium have chipped away at margins. As points over the past decade. Lloyd’s agent Argenta said. For re- Continued on p7 >> Operating expenses as a % of premium 6 www.insuranceday.com | Tuesday 12 December 2017 www.insuranceday.com | Tuesday 12 December 2017 7 COMPANIES HOUSE

Table: Selected Lloyd’s groups’ performance, first nine months tum is building ahead of the busy their plans publicly, Chaucer 1176 average renewals for reinsurances Skuld has the go-ahead to trans- renewal season and reductions are intends to increase its capacity to with business mixes weighted to- fer special purpose arrangement Company Currency Gross written premium Change (%) Net written premium Underwriting result Combined ratio (%) Pre-tax result coming to an end. For reinsurance, £46.5m from £37.5m, and Canopius wards January 1 renewals or loss- 6126 into what will be known as we anticipate double-digit increas- 4444 is looking to up its stamp ca- hit areas such as the Caribbean. Agora 3268, led by underwriter 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 es in rates for US catastrophe- pacity by 7.5%. Retro pricing should rise by great- Mike Pritchard and with a planned Advent (Fairfax) $m 197.1 220.3 11.8 131.9 146.2 (2.1) (44.3) 101.6 131.9 **6.3 **(41.1) exposed business at the important er amounts, taking the edge off capacity for 2018 of £98m. January renewals, with higher in- Rating agency scepticism the improvement. For primary Dale Underwriting has approval Beazley $m 1,666.0 1,762.0 5.8 – – – – – – – – creases on loss-affected accounts Underwriters in both the Lloyd’s cat-exposed property, its forecast is to set up SPA 6131 to reinsure a book Brit (Fairfax)‡ $m 1,519.7 1,581.2 4.1 1,162.4 1,154.1 25.9 (199.2) 97.5 117.7 246.5 (115.2) and retro business,” Hiscox said. and company markets are making for rises of 5%. of contingency and specialty prop- Hiscox has Lloyd’s approval to in- optimistic noises about the scale The attitude of alternative capital erty business underwritten by Dale Cathedral $m 185.4 179.1 (3.4) 131.8 121.2 39.7 (35.6) 68.9 131.3 – – crease the capacity of syndicate 33 of rate rises but analysts remain investors now becomes crucial, par- 1729. The incremental business has (Lancashire) for 2018 by £450m to £1.6bn. The less convinced. ticularly for the supply and price of a planned premium of $22m, to be Chaucer (Hanover) $m 904.1 980.5 8.5 645.5 656.5 53.8 (55.9) 91.5 108.9 **87.6 **(19.2) group expects its London market di- Fitch acknowledged rates would retro protection. Initial moves sug- split 60-40 in favour of the SPA. vision to return to growth next year rise significantly for large US prop- gest the capital markets are ready US group Coverys has in principle Hiscox (group) £m 1,858.2 2,088.8 12.4 – – – – – – – – following a reduction of 11% at the erty, although excess capital in the to reload but some existing capital approval to set up syndicate 1975 Hiscox London £m 520.2 463.0 (11.0) – – – – – – – – nine-month mark for 2017. global re/insurance system makes may be trapped for a while under to write medical liability insurance Market division Argenta 2121 had planned to it likely increases would be in the the collateral terms of covers. Al- and healthcare reinsurance. Cov- Hiscox Re £m 466.8 553.3 18.5 – – – – – – – – up its capacity by £20m but has range that followed the major cats ternative vehicles will have to re- erys acquired R&Q Managing Agen- increased that to a £40m rise be- of 2011 rather than 2005, the agen- assure the investment community cy earlier this year. Talbot (Validus) $m 752.1 702.5 (6.6) 614.6 548.3 34.2 (44.6) 94.4 108.1 – – cause of opportunities follow- cy added. Although the 2011 events that the models underpinning their Chord Re has already started un- ing the catastrophes. That would produced bigger losses, the rating underwriting have accurately iden- derwriting as a Lloyd’s coverholder *net earned †net result ‡from June 5, 2015 **operating result bring the syndicate’s capacity for reaction was sharper in 2006 be- tified risk and exposure. focusing on specialty reinsurance Source: company announcements and filings, Insurance Day database 2018 to £340m. cause of the market’s less robust Several new underwriting oper- lines. The operation is supported At its third quarter analyst up- capital position. And the impact on ations are known to be preparing by a group that includes the com- A man sits in the remains of Continued from p5 date last month, Lancashire said its unaffected lines is unclear, the rat- to start writing 2018 risks from pany’s management team, Neon his beachfront home in Puerto stamp capacity for Cathedral syndi- ing agency said. Lloyd’s platforms. and Beat Capital, which is backed Rico after Hurricane Maria writing loss of £489m for the first cates 2010/3010 was unchanged but Last week Keefe, Bruyette & Toa Re is backing a special- by Neon, American Financial and © 2017 Ramon Espinosa, File/AP six months of the current Japanese the group has a 15% pre-emption Woods last week said it expected purpose arrangement (SPA), num- others. Neon is also reported to be fiscal year. available in the event the market January 1 reinsurance rate increas- ber 6132, to support the parent looking to set up a sidecar backed The group also said the three sees significant rating changes. The es would disappoint the extreme company’s international account, by insurance-linked security cap- hurricanes plus the Mexican syndicates were writing below ca- bulls although rates would be up introduce new business into the ital to provide support for the re- earthquakes and the Californian pacity before the losses this year. about 20% to 30% for retro; 10% to London market and expand Lloyd’s insurance accounts of its existing wildfires led to MS Amlin suffer- Ascot has received approval to 15% for North American property reach in Japan. The syndicate, man- Lloyd’s business. ing incurred losses of ¥57.2bn increase the capacity of syndicate cat; flat to up 5% for global proper- aged by Barbican, will have capaci- Last month, Chinese interests an- ($503.6m) for the first half-year 1414 by 23%. The group has also ty cat; and 5% to 15% for affected ty of £31.4m. nounced the formation of Brilliant with another ¥16.6bn expected raised $1bn in capital to set up As- property business. “And we expect Managing general agent Pioneer, Re in Guernsey to write retroces- during the second six months. And cot Re to write a quota-share of the very little spillover into unaffected which has been operating at Lloyd’s sion of Lloyd’s business. other natural disasters, including Lloyd’s business, as well as North lines and/or regions,” it said. through a risk-sharing agreement Beazley is understood to be look- the Australian , brought in- American property business and se- Reporting in October, Credit Su- with Liberty, has approval to set ing to set up SPA 5623 to provide curred losses of ¥5bn to give a full- lected other lines. isse said it expects rate increases of up its own syndicate, number 1980, quota-share cover for broker facil- year total of ¥78.8bn. Among others that have disclosed 10% for property cat, with higher for 2018. ity business. n Canopius, in the process of carry- Chart 3: London market premium income (£bn) ing out a management buyout from its Japanese owner Sompo, suffered 60 incurred losses of ¥21.6bn, made up of Harvey ¥9.5bn, Irma ¥10.7bn and Maria ¥1.3bn. At the time he was speaking to 50 the ALM in June, Hancock faced the challenge of holding syndi- cates back from writing too much business in what was a poor rat- 40 ing environment. “Premiums must surely reduce for performance to noticeably improve,” he said. “We do expect to see growth in some 30 syndicates but only if they are do- 52.587 ing something different – be that new footprint, products, proposi- tions, acquisitions.” 20 Now, six months on and at least $4.8bn of losses down, Lloyd’s has 29.862 to take a view on exactly how con- 22.725 fident it should be that syndicates 10 can translate any increased stamp 16.034 capacity into profit. Hiscox is particularly bullish, re- 6.691 porting early last month it had ex- 0 perienced rate rises of 10% to 50% Lloyd’s Company market Company market additional Company market total London total in loss-affected and loss-exposed written in London ‘controlled business* US property lines. “In other London *business written abroad but overseen by London operations market insurance lines, momen- Source: London company market statistics report 2017 using International Underwriting Association and Lloyd’s figures US personal lines market Validus names new stable despite catastrophe segment heads

losses: Moody’s Bermudian re/insurer Validus in addition to his role as chief ex- Holdings has named heads of ecutive of AlphaCat Managers. new reinsurance, insurance and Within the group’s US insur- Personal motor and home insurers continue to benefit asset management reporting ance platform, Bob Livingston segments as it looks to develop has been named chairman of from a strong capital base and adequate earnings its global strategy, writes Michael Western World Insurance Group, Faulkner. in his addition to his role as the Personal motor insurers are ex- the ongoing wildfires in Cali­ Kean Driscoll will serve as glob- unit’s chief executive, while Lorenzo Spoerry pected to benefit from stabilising fornia,” Moody’s vice-president al head of reinsurance, in addition Jonathan Ritz has been named Deputy editor or improving accident frequency Bruce Ballentine said. “It will to his existing role as president of president of Western World in trends and better accident avoid- take time to tally aggregate losses Validus Holdings and chief execu- addition to his role as chief exec- ance technologies. from these events, but we expect tive of Validus Reinsurance. utive of Validus Specialty. Home insurers, meanwhile, that 2017 will be one of the costli- In addition, Peter Bilsby has Ed Noonan, Validus chairman he outlook for the US per- should enjoy low single-digit rate est years for US insured catastro- been appointed global head of and chief executive, said: “These sonal insurance market increases across the market, with phe losses.” insurance.This is in addition executives will be responsible remains stable for 2018, higher rates in loss-affected areas. Some estimates have put the to his role as chief executive for developing strategy and driv- reflecting the industry’s “Insurers’ risk management insured losses from the three of Talbot Group, the group’s ing profitable growth across Tstrong capital base and adequate and capital resources are hold- hurricanes, plus this autumn’s Lloyd’s insurer. our reinsurance, insurance and earnings capacity, Moody’s Inves- ing up well against hurricanes earthquakes in Mexico, at about Lastly, Lixin Zeng will serve as asset management businesses tors Service said. Harvey, Irma and Maria and $100bn. global head of asset management, respectively.”

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