Has Ended Reinsurance Pricing Cycle’

MARKET NEWS, DATA AND INSIGHT ALL DAY, EVERY DAY FRIDAY 26 JANUARY 2018

ISSUE 5,021

Alternative capital ‘has ended reinsurance pricing cycle’

p3 Profits soar Lloyd’s could at broker use ILS to CBC UK back Central Fund: CFO

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ID-Complete Picture-260x70.indd 1 08/09/2017 14:23 2 www.insuranceday.com | Friday 26 January 2018 OPINION E-placing at Lloyd’s? Fear

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, not, it might not be as 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. worrying as you think 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 and their insight is both compelling and valuable. PPL has rankled many, but there seems to be a genuine Insurance Day also produces a number of must-attend annual understanding that the important parts of Lloyd’s are not events to complement its daily output, including the Insurance Day London Market Awards, which recognise and celebrate the made for e-placing very best in the industry. “e” protagonists of change have often For more detail on Insurance Day and how to subscribe or Roger Foord attend its events, go to subscribe.insuranceday.com been unknown, naive about many as- The proposals that are Roger Foord Associates pects and nuances of the market and its being put forward for Insurance Day, Christchurch Court, 10-15 Newgate Street, love/hate relationships between clients London EC1A 7HD and brokers, and brokers and under- e-placing should not writers. Therefore, the so-called vision- mean or be presented f somebody were to tell me the life I ary aspects of change have never taken as the end of the EC3 Editor: Michael Faulkner have been used to – and quite like – off because nobody has had the ability +44(0)20 7017 7084 is going to be changed under some to say, “the emperor has no clothes” or, world as we know it [email protected] new compulsory rule from some on the other hand, to say “we are wrong Deputy editor: Lorenzo Spoerry Ifaceless wonders, usually in parliament – you know what you are doing, I’ll get the market where some activity is a gen- +44 (0)20 7017 6340 or my local authority, my immediate re- back to my life as an anorak”. uine waste of a broker’s time, such as en- [email protected] action is to be negative until I know the It could be, though, that the Lon- dorsements, some offers of a follow line facts. And even then, if I do not like the don market is being addressed about and simple renewals. There are, though, Editor, news services: Scott Vincent +44 (0)20 7017 4131 change I might still want to be negative change in the wrong way. It has always major discussions that need to take place [email protected] or disruptive. I imagine I am not alone seemed to me that an electronic market when brokers are representing clients’ and this attitude is probably why we are has been sold on the basis that it is a complex risks and these are the small-vol- Global markets editor: Graham Village now Brexit-bound. be-all-and-end-all solution, that brokers ume, big-premium cases in which Lloyd’s +44 (0)20 7017 4020 Ever since Edward Lloyd put away and underwriters will no longer need is the global expert. It is no coincidence [email protected] his blackboard in 1688 after persuad- to speak to each other, and Inga Beale a client starts its renewal process weeks Global markets editor: Rasaad Jamie ing shippers to buy into his subscrip- and the Lloyd’s board need not renew or months before a renewal date, not 10 +44 (0)20 7017 4103 tion model for insuring their ships, the lease on One Lime Street because minutes before at a screen. [email protected] somebody somewhere has been look- we are “Go Comparing” in Surrey, Hert- The Lloyd’s electronic placing proj- ing for an alternative idea but the fordshire and Sussex. Mr Davy and Mr ect, Placing Platform Limited (PPL), Account manager: Matthew Smith +44(0)20 7017 7894 system and its users have been con- Balls can sell out to Wetherspoons and and its PR has almost certainly ran- Business development manager: Toby Nunn +44(0)20 7017 4997 sistently strong in their resistance to tumbleweed can blow around Leaden- kled many in the market especially as Advertising/events: Jefferson Emesibe +44(0)20 7017 4061 change. No surprise, then, that this is hall Market. the project has resulted from an Aon Head of production: Liz Lewis +44 (0)20 7017 7389 Production editor: Toby Huntington +44 (0)20 7017 5705 referring to the Lloyd’s and London in- initiative 18 years ago with the unim- Subeditor: Jessica Sewell +44 (0)20 7017 5161 surance market. The only difference is Not the end of EC3 pressive Ri3k technology. The fact this Events manager: Natalia Kay +44 (0)20 7017 5173 from around 50 years ago the names of The proposals that are being put for- was also the basis for the current solu- the offered changes have been preced- ward for e-placing should not mean or tion for PPL offered by an IT company Editorial fax: +44 (0)20 7017 4554 ed by the word “electronic”. be presented as the end of the EC3 world called Ebix was also an unhappy start Display/classified advertising fax: +44 (0)20 7017 4554 The problem has usually been that the as we know it. There are many areas of for the Target Operating Model group. Subscriptions fax: +44 (0)20 7017 4097 What has happened since appears to suggest there is a genuine understand- All staff email: [email protected] ing that the important parts of Lloyd’s are not made for e-placing but there is Insurance Day is an editorially independent newspaper and a need for some data capture electroni- opinions expressed are not necessarily those of Informa UK cally at the placing stage – although no Ltd. Informa UK Ltd does not guarantee the accuracy of the doubt many techy types cannot under- information contained in Insurance Day, nor does it accept stand why the Lloyd’s/London market responsibility for errors or omissions or their consequences. should be any different from a Direct ISSN 1461-5541. Registered as a newspaper at the Post Office. Line system. Published in London by Informa UK Ltd, 5 Howick Place, If PPL can make this clear then they London, SW1P 1WG. would not have to go down the draco- nian path of using the word “compul- Printed by Stroma, Unit 17, 142 Johnson Street, Southall, sory”, as threatened for 2019. Instead, Middlesex UB2 5FD users in London would actually be hap- py to see the benefits of what is on offer, © Informa UK Ltd 2018. for time-saving solutions. The trouble is there is bound to be a No part of this publication may be reproduced, stored in a thin end of the wedge feeling and sus- retrieval system, or transmitted in any form or by any picion will always be there that the means electronic, mechanical, photographic, recorded or Lloyd’s market’s days are doomed in its otherwise without the written permission of the publisher current format, but that is not what is of Insurance Day. being offered now. n asiastock/Shutterstock.com www.insuranceday.com | Friday 26 January 2018 3 NEWS

Ascent plans Alternative capital ‘has ended new products and M&A reinsurance pricing cycle’ following takeover completion Influx of new capital after last year’s catastrophe losses has ‘ominous’

implications for traditional reinsurers, JLT Re warns Specialty managing general agent (MGA) Ascent Underwriting has targeted growth through new Michael Faulkner Damaged product lines and acquisitions fol Editor beachfront properties lowing completion of the deal that in Puerto has seen Preservation Capital Part Rico after ners acquire a majority stake in Hurricane Maria hit the the company, writes Scott Vincent. he extent of the influx Caribbean: The deal, first announced in No of alternative capital fol despite last vember 2017, has now received lowing last year’s devas year’s cat bill approval from the Financial Con alternative tating catastrophe losses capital has duct Authority. Tspells the end of the traditional recommitted Ascent said its management reinsurance pricing cycle, JLT Re to property team has retained a significant has warned. cat business shareholding in the company In a report published yesterday RailPhoto/ and will continue to manage the Shutterstock.com the reinsurance broker said the business during the next phase response of alternative capital of its growth. providers to the third-quarter hur predicted immediately after HIM ing was flat to up about 5%, by S&P the reinsurance asset class, not Further terms of the transac ricane losses – and the subsequent [Harvey, Irma and Maria] made Global Ratings’ estimation. Guy ing that investors had undertak tion have not been disclosed. impact on pricing – had “ominous” landfall played a crucial role in Carpenter’s property catastrophe en extensive due diligence before David Umbers, chief executive implications for traditional re capping rate increases seen at 1 rate-on-line index was up 6.1% on committing funds to the sector of Ascent, said: “Our indepen insurers. “It seems [reinsurers] January 2018,” JLT Re said. the previous year, while JLT Re’s and were “well-prepared” for last dence is important and we are can no longer rely on post-event “In fact, given claims mostly analysis showed a 4.8% rise. year’s losses. pleased it will be maintained price hikes to boost profitability, fell within risk tolerance ranges, Alternative capital vehicles Despite the lower-than-expected through this deal with Preserva regardless of the magnitude of the allocations could increase further have undertaken substantial rate increases at January 1, some tion Capital, which is providing loss,” JLT Re said. through 2018,” the broker added. capital-raising exercises in recent are expecting higher increases lat investment to support our strate The warning follows a disap Hurricanes Harvey, Irma and months. Insurance-linked securi er in the year. gic expansion plans.” pointing January 1 reinsurance Maria, and the spate of fierce wild ties fund manager Markel CatCo, S&P said reinsurers can look Ascent was formed in 2013 renewal season, which saw rate fires in California towards the end for instance, raised more than forward to double-digit rate in following the development and increases below what the re of the year pushed insured ca $2.5bn of new capital from inves creases in loss-affected Florida transformation of Lloyd’s broker insurance industry had hoped tastrophe losses marginally above tors for 2018. and Puerto Rico catastrophe busi Safeonline’s binding authority for in the wake of the last year’s $140bn for the first time ever in There has also been a flurry of ness at the mid-year renewals. In business into an MGA operation. record-breaking catastrophes. real terms, according to JLT Re. sidecars. Sompo International is addition, the industry can also Ascent operated for the first The volume of capital in the in Other estimates have put the total reported to have raised $62m for expect rate increases in pro-rata year-and-a-half of its existence as dustry, lacklustre demand and the tally slightly lower. a back-up vehicle for its global ca reinsurance as cedants push up a trading division of Safeonline willingness of alternative capital The losses reversed a six-year tastrophe reinsurance portfolio. prices in their primary lines, the and then set up as a separate, le providers to recommit funds to trend of falling reinsurance pric It follows launches from Chaucer, rating agency said. gal liability partnership. the market kept rates low. es at the January 1 renewals, al Neon, Brit and MS Amlim in re Price bumps on renewals of por The firm specialises in cyber “The fact much of this [alterna though they fell short of causing cent weeks. tions of multi-year programmes, and related professional indemni tive] capacity was deployed at a a broad-based pick-up in rates. In JLT Re said investors were be especially in loss-affected lines, are ty and corporate liability risks in lower rate of return than many aggregate, global reinsurance pric coming increasingly confident in also on the horizon, S&P added. the US, UK, Canadian and Europe an markets. Ascent said its growth plans include the acquisition of spe Lloyd’s could use ILS to back cialist MGAs and selective team hires. Last week the MGA launched its Allied Health profes sional liability product, with fur Central Fund: CFO ther launches planned following the new investment. Lloyd’s is at the very first stage The ILS market is heavily claims owed to policyholders. At Despite the unprecedented loss of considering whether to use weighted towards US natural ca the end of 2016 it had £1.95bn es they face, investors in ILS have ‘Our independence insurance-linked securities (ILS) tastrophe risk. Using ILS to back ($2.78bn) at its disposal. Syndi readily recommitted capital to the to back its Central Fund, the Lime the Lloyd’s Central Fund would al cates and Lloyd’s members had market, fund managers say. Part is important and Street market’s chief financial offi low investors to back all the risks more than £75bn in funds. of the attraction of ILS as an asset we are pleased it cer (CFO), John Parry, said, writes that Lloyd’s syndicates underwrite, Aon estimates the re/insurance class is that its returns bear little will be maintained Lorenzo Spoerry. Parry said. This could give much industry as a whole, including correlation with most other se Parry said Lloyd’s top brass has greater diversification benefits, alternative capital, could pay out curities. It can therefore be very through this deal only recently started to give seri from the point of view of investors, around $134bn to cover losses attractive to, for example, a pen with Preservation’ ous thought to using ILS to back than conventional cat bonds. arising from hurricanes Harvey, sion fund that is heavily invested the Central Fund, but he added The Central Fund can be called Irma and Maria, and other events in bonds and equities, which rise David Umbers the idea had “definite” potential. upon if syndicates fail to pay in 2017. and fall with economic cycles. Ascent 4 www.insuranceday.com | Friday 26 January 2018 VIEWPOINT Private equity set to take greater role in M&A activity in 2018

Concerns about private equity’s the ability to efficiently centralise There is clearly the lure of administrative functions. involvement in the sector are being capital availability for those Private equity is known for not outweighed by the changes in the just managing, but exploiting, in the industry with growth disruption. And with challeng- financial market environment es such as artificial intelligence, aspirations, especially coupled big data, and online competition from comparison aggregators, as Fatema Orjela and Martin Membery with regulation making it well as being somewhat protected Sidley Austin increasingly difficult for banks from the demands of managing a to deploy their capital in business quarter to quarter, private equity is well placed to put the same way capital to work, to invest in peo- rivate equity continues to profits. In addition, with high ple, technology and services and to show an interest in the retention and a stable client base, In the wider sphere of insur- namely private equity’s focus adapt to change at pace in the in- insurance sector. Wheth- strong revenues and cashflows ance, private equity has also been on profits, a short-term three- to surance sector. er through investments tend to be recurring. turning to insurance underwrit- five-year investment outlook and For savvy insurance manage- Pin agencies, brokers or under- Where regulatory complexity ers, which although more capital- a perceived greater resistance to ment teams, private equity could writers, as the supply of more was once a strong barrier to entry, intensive has proven a successful capital hold requirements. serve as the perfect backer – one traditional private equity targets by forging links with sophisticat- strategy for firms with a longer- However, the landscape is ever- that places significant weight on remains low – keeping competi- ed seasoned management teams term horizon. changing and certain of the con- the value of management, is fo- tion and valuations high – private private equity has been able to cerns appear to be being mitigated cused on ensuring management equity’s purview has broadened, self-teach and fill in the gaps. Changing landscape or outweighed by the evident val- feels sufficiently supported from including into financial services. There are existing top-end play- The usual block of concerns from ue to be gained from this union. a strategic perspective and is But is this interest just arising ers, but the market remains frag- the insurance industry has re- There is clearly the lure of cap- not hamstrung from an opera- from a need to deploy dry pow- mented. Adopting a buy and build mained somewhat consistent, ital availability for those in the tional perspective. der? Not at all; to say so would be strategy, private equity can do industry with growth aspi- With increased familiarity to to unfairly downplay the oppor- what it does best and use its capi- rations, especially cou- regulation, private equity is also tunities represented by the insur- tal resources, strong management, pled with regulation becoming increasingly comfort- ance sector for private equity. a clear strategic plan and acquisi- making it increasing- able with enhanced policyholder Insurance agencies and brokers tion skills to source, apply due dil- ly difficult for banks safeguards such as disclosure and in particular are great businesses igence and enhance synergies on to deploy their capi- transparency requirements. from a private equity standpoint. acquisitions, as well as manage in- tal in the same way. In light of this, it seems some- There are fixed costs and infra- vestor relations, to create market Growth can also what unsurprising that all signs structure requirements to enter leaders by consolidation. provide mutual are pointing to a continued in- the market but, beyond these, There is also the pull of non- benefits. Larger crease in private equity activity in there are limited marginal costs commoditised niche products and agency and broker- insurance M&A in 2018. n and the requirements do not in- specialist sub-insurance markets age firms can use the crease incrementally in line with relatively protected from compet- competitive advantage Fatema Orjela is a partner in income and commissions – these itive pricing pressures. to price better commission the private equity and M&A can disproportionately go straight rates with underwriters. It is also practice and Martin Membery easier to manage spiralling reg- is a partner and leader of the ulation and compliance costs via London insurance and financial larger platforms, together with services group at Sidley Austin www.insuranceday.com | Friday 26 January 2018 5

Insurers must be more responsive to change in renewable energy sector

Along with advances in technology, consolidation and the emergence of new maintenance models in the renewables sector comes a more complex set of risks, which require different insurance solutions Mimadeo/Shutterstock.com

wind energy sector, whereby the the end of their lifespan and plans positive things, but as with many are currently being installed and Alberto Mengotti electricity producers are installing for extending them are being car- other business sectors where big 10 MW (or higher) prototypes are Mapfre Global Risks bigger and heavier wind turbines ried out. This brings to insurers data is used, this also brings cyber being considered for the near fu- in order to get higher power out- new risks insurers must be aware risks. Something not even thought ture. Floating wind turbines are puts in their wind farms. In the of and be prepared to cover in about in the early days of wind already being installed in water early days wind turbines were partnership with their clients. farms, but which now need to be depths where bottom-mounted echnology today is evolv- very small, but today it is quite On the business front, some covered by insurers, ideally as part towers are not feasible and where ing quickly in almost common to see 2 MW to 3 MW European wind turbine manufac- of a package programme, to avoid the wind is typically more con- every business sector. wind turbines. As the installations turers are merging to bring about any gaps in coverage. sistent and stronger over the sea, Renewable energy, how- get bigger, some concrete towers scale and cope with increasing due to the absence of topographic Tever, stands out as a sector where are now being installed instead of competition, especially from Chi- Drones features that disrupt wind flow. change is more rapid and perva- steel ones to support the weight of nese manufacturers, which are Big data is not the only change we Due to advances in technolo- sive than most. the nacelles, with the rotor diame- becoming increasingly important are seeing in maintenance prac- gies, increased scale and greater Governments worldwide are ters reaching 100 metres or more. in the sector. These developments tices. The use of long-range cam- operational efficiencies, we are supporting the renewable energy It is early days, but this de- are bringing new challenges, eras and drones is increasingly now seeing how some big utili- sector, with strong incentives and velopment will bring benefits, which insurers must be prepared common for inspections of wind ties firms divesting from conven- investment over the last few years, as concrete towers have duc- for to protect clients and maxi- turbine blades and transmission tional energy sources to focus mainly driven by environmental tile behaviour, which provides mise their own opportunities. lines. These provide live assess- increasingly on renewable energy requirements agreed internation- greater stability in seismic ar- Another significant developments, which the operators can sources, especially wind. These ally. These investments, designed eas. These new towers are also ment in the wind sector is where act on quickly. developments bring many bene- to make renewable energy more maintenance-free and usually manufacturers are now providing In photovoltaic plants the use fits but also greater risks, which competitive compared with tra- have greater durability (more sophisticated software as part of of these technologies is also pres- insurers must be aware of and ditional energy sources such as than 50 years), as well as greater their installations. These provide ent, with drones now being used have the capacity to cover. coal and gas, have brought about tolerance to possible impact dam- wind farms with a digital infra- at some plants to carry out aeri- Looking ahead there is a big op- a rapid evolution in technologies, age and high fire resistance. structure, enabling operators to al thermography assessments, portunity for the insurance mar- including new designs, materials On the other hand, new risks collect, visualise and analyse unit to detect hot spots in the panels. ket to make a difference, though and components. appear, including with the use of and site level data. Through the This is enabling operators to im- sustainable business practices But a recent conference in Lon- higher cranes, which are needed constant collection of this data prove the efficiency of mainte- and by being responsive to the don revealed a strong sense with- to reach these greater heights, (weather, component information, nance works, as the number of rapid changes in the renewable in the renewable energy sector bringing additional risks during service reports and performance modules installed is usually very energy sector, including under- that insurers needed to increase the construction all-risks/erection of similar models) predictive large. This practice saves time standing the scale and complexity their understanding of these de- all-risks phase. models can be built with the data and resources, but, once again, of new risks in the renewable en- velopments so they can provide turned into actionable insights. brings new risks. ergy sector. n better risk assessments and more New risks This, in turn, enables wind farm Another example of the evolu- appropriate insurance solutions In some European countries operators to optimise their mainte- tion of technology, with a subse- Alberto Mengotti is technical to cover these evolving risks. where wind energy has been nance strategies, improve reliabil- quent increased sums insured, leader of the energy and As an example, there have been present for many years, some ity and availability and increase is with offshore wind energy in- construction underwriting team constant, significant changes in the wind farms are already reaching annual energy production. All stallations. 7-8 MW wind turbines at Mapfre Global Risks 6 www.insuranceday.com | Friday 26 January 2018 www.insuranceday.com | Friday 26 January 2018 7 SHARES ANALYSIS

Graph: One-week change (%) Table: Insurer share price performance, week ending Jan 24

10 Lloyd’s companies 10 Brokers Bermudians lifted Company Exchange Currency Close One-week Year-to-date One-year 52-week 52-week Market cap Price-earnings change (%) change (%) change (%) high low ratio

Beazley LSE Sterling (p) 5 5 as Validus stock sky- 531.00 0.76 (0.65) 33.62 542.00 393.90 £2.79bn 14.14 2.89 2.32 Hiscox LSE Sterling (p) 1,420.00 0.00 (3.01) 41.29 1,478.00 997.00 £4.03bn 17.38 1.82 1.71 1.17 Lloyd’s 0.76 0.86

0.00 JLT companies 0 0 rockets on AIG deal Lancashire LSE Sterling (p) 673.00 1.82 (1.32) 1.97 773.50 608.00 £1.36bn – Aon

MMC Average 0.86 (1.66) 25.63

Hiscox (2.25) Average Beazley Average Willis TW Willis

-5 Lancashire -5 Allianz Xetra Euro 204.80 1.16 6.95 26.03 206.85 154.25 €90.58bn 12.60

Graph: Stock index comparisons (%) Aviva LSE Sterling (p) 521.20 (1.10) 2.90 9.01 570.50 474.80 £21.03bn 19.02 Travelers’ shares 8.25% 8 -10 -10 boosted by Axa EN Paris Euro 27.14 2.03 9.15 15.66 27.58 21.90 €66.11bn 10.77 earnings beat Generali Milan SE Euro 16.19 3.06 6.51 3.98 16.48 13.21 €25.04bn 12.08 6 Hannover Re Xetra Euro 112.20 0.81 6.96 8.62 116.50 94.65 €13.49bn 14.55 10 European groups European Antony Ireland groups Journalist 4 Munich Re Xetra Euro 191.75 0.63 6.09 8.30 199.00 166.60 €29.89bn 96.36

5 RSA LSE Sterling (p) 616.00 (1.25) (2.61) 6.85 672.50 565.48 £6.32bn 55.50 2 3.06 1.25% 2.03 0.86% Scor EN Paris Euro 36.26 (0.22) 8.09 11.66 37.75 31.36 €6.97bn 35.20 1.32 0.71% 0.64% 1.16 0.81 0.63 0.64 hares in Bermuda-based RSA Generali Zurich Aviva 0 insurer Validus soared 0 Swiss Re SIX Swiss Ex Swiss franc 94.90 1.32 4.00 0.74 95.72 81.65 SFr33.04bn 12.03 (0.06) (0.22) more than 44% on Mon- Axa (1.10) (1.25) day as the company an- Zurich SIX Swiss Ex Swiss franc 316.30 (0.06) 6.64 9.86 321.80 262.10 SFr47.79bn 16.11

Allianz (1.06%) (1.11%) Average Generali Swiss Re Snounced it is to be acquired by -2 Munich Re Munich Average 0.64 5.47 10.07 -5 AIG. The news lifted Bermudian Hannover Re

insurance stocks, which gained Stoxx S&P 500 Lloyd’s 93.41 2.64 2.91 4.96 102.60 86.58 $12.22bn 30.15 600 FTSE 100 FTSE 250 Arch Capital Nasdaq US dollar on average 3.97% in the week Europe Europeans Bermudians -10 to Wednesday (excluding Vali- Argo Group Nasdaq US dollar 64.20 2.56 4.14 (2.58) 69.03 56.15 $1.93bn 37.74 dus), giving investors in recent price rose 7.86% this week (the across the Atlantic, European in- strugglers Aspen (up 7.09%) and biggest gain excluding Validus) surance stocks consolidated this Aspen NYSE US dollar 41.55 7.09 2.34 (27.99) 57.80 35.05 $2.51bn – Axis Capital (up 5.17%) reason to as investors found reassurance week, gaining on average 0.64%, Axis Capital NYSE US dollar 51.47 5.17 2.41 (20.99) 71.06 47.98 $4.31bn – 45 42.52 Bermudians cheer. AIG also gained 4.74% in in the company’s fourth-quarter while the three Lloyd’s players the week. results. Californian wildfire gained 0.86%. It has been w Everest Re NYSE US dollar 231.96 2.64 4.84 4.56 277.17 208.81 $9.51bn 36.68 Validus’s stock price was losses may have dented a slow start to 2018 for Bermudians worth 17.76% more on Wednes- annual profit by almost 4.74% the Lloyd’s group, but 10 RenaissanceRe Nasdaq US dollar 129.79 5.57 3.34 (6.23) 152.00 116.50 $5.21bn – 8.25 day than 12 months previously – one-third compared Rise in AIG’s even the Europeans’ stock this week 7.09 the buyout having reversed the to 2016, but earnings excellent start to the Third Point Re Nasdaq US dollar 14.55 1.75 (0.68) 29.33 17.10 11.10 $1.55bn 8.24 on news of effects of a prolonged erosion in per share comfortably year (+5.47% on av- 5.57 5.17 Validus deal 5 4.33 the company’s value – while the beat expectations and erage for the year to Validus NYSE US dollar 67.44 42.52 43.71 17.76 67.60 41.15 $5.36bn – 2.64 2.64 2.56 Bermudians as a group moved the company’s stock price date) and this week’s Ber- 1.75 into positive territory for 2018 jumped 5% on Tuesday. Trav- mudian rally could not budge XL Group NYSE US dollar 36.86 4.33 4.84 (2.92) 47.27 33.77 $9.47bn – for the first time after a bearish elers was worth 24.96% more on Hiscox and Beazley from the top 0 start to the year. Wednesday than 12 months ago. spots over 12 months (up 41.29% Average 8.25 7.54 (0.46) In the US, Travelers’ share With investors focused on news and 33.62% respectively). n AIG NYSE US dollar 64.32 4.74 7.96 (2.57) 67.30 57.85 $56.04bn – Aspen RenRe Validus Average XL Group Everest Re Everest Graph: Week-on-week average share price change, five company groups (%) -5 Argo Group Axis Capital Axis Chubb NYSE US dollar 154.98 5.04 6.06 16.47 156.00 127.15 $71.16bn 18.58 Arch Capital Third Point Re Third Point 30 Fairfax Toronto Can dollar 662.30 0.32 (1.05) 7.62 708.99 547.95 C$20.01bn 277.51

10 US US Greenlight Re Nasdaq US dollar 20.90 2.20 3.98 (10.11) 23.45 19.70 $0.80bn 18.83 7.86 15 Markel Corp NYSE US dollar 1,116.76 0.04 (1.96) 19.97 1,157.30 909.00 $15.78bn 248.17

5.04 5 4.74 Travelers NYSE US dollar 147.62 7.86 8.83 24.96 148.05 113.76 $40.03bn 20.14 3.37 2.20 0 Average 3.37 3.97 9.39 0.32 0.04 0 Aon NYSE US dollar 138.83 1.71 3.60 22.91 152.78 109.82 $34.55bn 28.77

AIG -15 — Lloyd’s companies JLT LSE Sterling (p) 1,390.00 (2.25) (0.07) 35.74 1,468.00 1,003.00 £3.09bn 25.50 Chubb Fairfax — European groups Average Brokers Travelers — Bermudians -5 — US MMC NYSE US dollar 83.42 2.32 2.49 21.34 86.54 67.32 $42.34bn 22.85 Markel Corp Markel — Brokers Greenlught Re Greenlught -30 Willis TW NYSE US dollar 159.02 2.89 5.53 24.64 165.00 120.87 $20.84bn 47.29 Oct 4 Jan 3 Jan Sep 6 Dec 6 Nov 1 Nov Nov 8 Nov Oct 11 Oct 18 Jan 17 Jan Sep 13 Oct 25 Sep 27 10 Jan Dec 13 Sep 20 Jan 24 Jan Dec 27

-10 Dec 20 Nov 15 Nov Aug 30 Aug Nov 22 Nov Nov 29 Nov Average 1.17 2.89 26.16 Profits soar AHJ appoints Rupert Atkin at broker as non-exec

Independent Lloyd’s broker Alw- en Hough Johnson (AHJ) has ap- CBC UK pointed industry veteran Rupert Atkin as a non-executive director, writes Michael Faulkner. Atkin, who won Insurance Day’s Lifetime Achievement Award in 2016, is also non-executive chairman of Talbot Underwriting, the Lloyd’s insurer he founded in 1991. As well as his long tenure with Talbot, during his lengthy career Atkin has chaired the joint war risk committee and the Lloyd’s Lloyd’s broker eyes further hires to support growth Underwriters’ Association. More recently, he chaired the £188,000 a year earlier and well Lloyd’s Market Association and Michael Faulkner ahead of previous forecasts. Reve- he became deputy chairman of Editor £767,000 ‘[The appointment will nues for the year were £5.5m. Lloyd’s in February 2014. CBC’s profit for 2017, In February CBC’s management AHJ said Atkin’s appointment enable us] to call upon the up from profit of... team undertook a buyout, backed would enable the board of direc- considerable knowledge by venture capital firm BP Marsh. tors “to call upon the considerable and experience Rupert has amassed’ loyd’s broker CBC UK has CBC chairman, Andrew Wallas, knowledge and experience Ru- reported soaring profits £4,000 who joined following the MBO, pert has amassed”. AHJ for 2017, nearly a year For 2016 said: “We have created a strong after its management platform from which to build. Lbuyout (MBO). £763,000 on its 2016 profit before “Our absolute priority is to ac- The broking firm achieved an tax of £4,000. quire additional quality people AIR estimates unaudited profit before tax for Earnings before interest, tax, with intellectual capital to sup- the year ended December 31 of depreciation and amortisation port the continuing growth of £767,000 ($1.1m) – an increase of were £836,000 compared to our business.” Friederike loss of Volante names QBE’s €1.3bn to €2.6bn Winter Storm Friederike will As well as the five countries ac- cost insurers between €1.3bn counting for most of the storm’s Drew chief actuary ($1.62bn) and €2.6bn, according loss impact, lower levels of in- to an estimate from AIR World- sured loss are expected in Austria, wide, writes Scott Vincent. the Czech Republic, Denmark, Start-up managing general agent ment “demonstrates our commit- QBE’s European business. He lat- The modelling firm said it ex- Estonia, Finland, Ireland, Latvia, (MGA) Volante Global has appointment to ensuring actuarial science er worked at Dual, where he was pected most of the losses to be Lithuania, Luxembourg, Norway, ed Chris Drew as chief actuarial underpins the foundations of our chief executive, before leaving at reported in Germany, France, Poland, and Sweden. officer, writes Michael Faulkner. underwriting approach”. the end of 2016. the UK, Belgium, and the Germany’s insurance Drew joins from QBE Euro- Volante was founded last year Nephila Capital is the princi- Netherlands. association GDV has es- pean Operations, where he was by Bains, who spent 14 years with pal equity investor behind the The estimates in- €500m timated an expected head of actuarial and manage- platform. clude wind damage GDV’s estimated insured bill of €500m ment information for the insur- Commercial motor underwriter to property, including for its country’s losses ‘[Chris Drew] insured bill for er’s retail division. Edison Motor is the first business motor, and the im- Germany from the storm. Volante has also appointed Paul brings outstanding to launch on the Volante plat- pacts of direct business German actuari- Rich head of operations. Rich was experience, form. Edison is led by former for- interruption. al company Meyerthole previously head of operations at intellectual mer QBE motor specialists Steven AIR’s estimate also includes in- Siems Kohlruss has estimated Barbican Insurance Group. pedigree and Dickie and Doug Ockwell. sured physical damage from wind total insured losses in Germany Talbir Bains, chief executive of commercial Horizon Managing Agency, a to greenhouses in the Netherlands will reach €800m. Volante, said Drew “brings out- acumen to the role’ property/casualty reinsurance and Denmark. The Dutch Association of Insur- standing experience, intellectual MGA focused on the continental Insured losses to forestry in ers has estimated insured losses pedigree and commercial acumen Talbir Bains European market, is also expected Finland, Norway and Sweden are of approximately €90m in the to the role”, adding his appoint- Volante to launch this quarter. also included. Netherlands from Friederike.