Insurance Jottings

Lloyd’s Creates Single Body for Governance to Improve Speed, Efficiency of Decisions

Lloyd’s has announced it has merged the Council of Lloyd’s with the Franchise Board, creating one body to govern the marketplace.

 

The decision to merge the two entities was first announced in November 2019.

 

‘The combination of board and council will allow robust and accountable governance with the ability to make swift decisions when necessary,” said Lloyd’s Chairman Bruce Carnegie-Brown, in a statement.

 

“The current COVID-19 pandemic serves as a primary example of our need to be as efficient as possible in our decision-making.”

 

In November, Mr Carnegie-Brown said the need for efficient governance structures coincides with the market’s Future at Lloyd’s modernisation project.

 

To build a new market which is innovative and responsive to the needs of its customers, Lloyd’s needs to make its governance structures as efficient as possible, he said at the time.

 

Following an election process in April this year, Lloyd’s confirmed on the 1st June, the roster of members of the new council:

 

  • Bruce Carnegie-Brown, Lloyd’s chairman and nominated member of the Council of Lloyd’s. (Lloyd’s defines a “nominated member” as a council member who is not an external member or a working member and whose appointment has been approved by the Bank of England)
  • Andy Haste, senior independent deputy chairman and nominated council member. Haste is also chairman of Esure Group
  • Angela Crawford-Ingle, audit committee chair and nominated member. She also is chair of the audit committee at River & Mercantile Group
  • Fiona Luck, nominated council member. She is also a member of the Lloyd’s Nominations & Governance Committee, the Remuneration Committee, the Risk Committee and is chair of the Lloyd’s Culture Advisory Group
  • Neil Maidment, nominated council member and chair of the Lloyd’s Risk Committee (subject to regulatory approval). A former executive at Beazley, Maidment is also a member of the Lloyd’s Audit Committee, the Technology & Transformation Committee and Underwriting Advisory Panel
  • John Sununu, nominated council member and a member of the Renumeration Committee. Previously, Mr Sununu represented New Hampshire in the United States Senate from 2003-2009 and served in the US House of Representatives from 1997-2003
  • John Neal, Lloyd’s CEO and nominated council member
  • Burkhard Keese, Lloyd’s CFO and nominated council member
  • Andrew Brooks, elected council member. He also is a member of the Risk Committee and the Underwriting Advisory Panel. He is chief executive officer of Ascot Underwriting Ltd. (Elected council members are drawn from working members of the Lloyd’s market who work for either managing agents or brokers)
  • Vicky Carter, elected council member. Ms Carter is also a member of the Lloyd’s Nominations & Governance Committee and the Risk Committee. She is vice chairman of Global Strategic Advisory for Guy Carpenter
  • Dominic Christian, an elected council member and deputy chairman of the Council of Lloyd’s. He is executive chairman of Aon Benfield International and chief executive officer of Aon UK Ltd
  • AXIS Corporate Capital UK Ltd, represented by Albert Benchimol, as a corporate external member of the council. He is a member of the Lloyd’s Audit Committee and chair of the Investment Committee. Benchimol is president and CEO of AXIS Capital Holdings Ltd
  • Flectat Ltd, represented by Michael Watson, as a corporate external member. Mr Watson is a member of the Lloyd’s Remuneration Committee and the Audit Committee. He is executive chairman of Canopius AG
  • Nameco (No 1249) Ltd, represented by Jeffery Barratt, an individual external member of the council. He is a member of the Nominations & Governance Committee and the Audit Committee. Barratt is a lawyer and has been a member of Lloyd’s since 1987. He is a director of the Association of Lloyd’s Members

 

Due to COVID-19 lockdown restrictions, Lloyd’s said it was unable in April to hold a full contested elections process as originally planned.

 

Instead, existing members of the council were rolled over and Karen Green and Dominick Hoare were retained as special advisers to the council until full elections can be held before the end of 2020.

 

Ms Green is a member of the Remuneration Committee, the Risk Committee and the Investment Committee. She is a non-executive director of Asta Managing Agency Ltd.

 

In addition to his position as special adviser to the council, Mr Hoare is also a member of the Underwriting Advisory Panel. He is group chief underwriting officer of Munich Re Syndicate Ltd and an executive director of both Munich Re Speciality Group Ltd and Munich Re Capital Ltd.

In the development of the new council, Mr Carnegie-Brown acknowledged the support of the Lloyd’s Market Association (LMA), the Association of Lloyd’s Members (ALM), the High Premium Group (HPG) and Lloyd’s Members’ Agents.

 

Syndicates seeking Lloyd’s sign-off to take advantage of hardening market

Syndicates are asking the Corporation of Lloyd’s to sign off on mid-year increases to their 2020 allocated capacity to allow them to take advantage of increasing rates and improvements in terms and conditions spurred on by the Covid-19 outbreak.

 

Senators Seek to Expand US Sanctions to Insurance for Russia-Europe Pipeline

US senators have announced a bill expanding sanctions on Russia’s Gazprom-led Nord Stream 2 project, Senate aides said, targeting a pipeline Washington says will make Europe too reliant on Russian gas.

 

The Protecting Europe’s Energy Security Clarification Act follows legislation signed by President Trump last year, which prompted Swiss-Dutch company Allseas to halt undersea work.

 

Two Russian-owned pipe-laying vessels may now be used to finish the remaining 100 miles (160 km) of the project, led by state-run Gazprom.

 

The new legislation, spearheaded by Senators Ted Cruz, a Republican, and Jeanne Shaheen, a Democrat, would expand sanctions to include penalties on parties involved in pipe-laying activities, not just laying pipes, and parties providing underwriting services, insurance or reinsurance for vessels.

 

A copy of a draft bill was seen by Reuters.

 

Senator Cruz said it “makes clear those involved with vessels installing the pipeline will face crippling and immediate sanctions.”

 

The bill must be passed by both chambers of Congress and signed by President Trump. It adds sanctions on companies providing services or facilities for the vessels, including welding equipment, retrofitting or tethering of the ships.

 

Many politicians and energy companies in Germany support Nord Stream 2 as Europe’s biggest economy seeks to end the use of coal and nuclear power.

The Trump administration has said US liquefied natural gas (LNG) would give Europe an alternative to Russian supplies. Gas flows to US LNG export plants have fallen to a 13-month low due to weak global demand.

 

German Economy Minister Peter Altmaier criticised Washington for “escalating this sanctions threat, which is extraterritorial and thus in conflict with international law.”

 

A pipe-laying ship Academic Cherskiy which Moscow could use changed ownership from Gazprom Fleet to regional firm STIF, Russia’s international vessel registry has showed.

 

STIF was linked to a group of Gazprom companies as of the 1st April but there was no data on STIF’s ownership since then, Gazprom spokesman Sergei Kupriyanov told Reuters.

 

Refinitiv Eikon ship tracking data showed Academic Cherskiy has been moored near Germany’s Mukran port in the Baltic Sea.

 

Nord Stream 2 did not immediately respond to a request for comment.

 

Pandemic Reinsurance Solution Gains Wide Support from UK Re/Insurance Industry

UK insurance executives have taken another step toward developing a public-private risk-financing mechanism for future pandemics with the creation of work streams to take the idea from the drawing board to an operating company.

 

So-called “Pandemic Re,” which was first launched in April as a steering group, has now formed a project committee with six working groups, supported by more than 50 volunteers from leading insurance brokers, insurers and reinsurers, management consultants, data modelers, the medical profession and academia. A further 65 have volunteered their or their organization’s help

 

At the same time, the Corporation of Lloyd’s has agreed to provide resources to two of the work streams.

 

The six working groups (or work streams), and their leaders follow:

 

  • Customer Engagement and Distribution, chaired by Julie Page (CEO of Aon UK Ltd.) with Chris Lay (CEO Marsh UK & Ireland) as deputy

 

  • Technical Insurance, chaired by Steve Coates (chief underwriting officer of Pool Re)

 

  • Modelling and Data, chaired by Paul Jardine (chairman of Asta and Chaucer)

 

  • Scheme Structure/Operating Models, chaired by Michael Dawson (active underwriter of Chaucer’s Nuclear Syndicate 1176)

 

  • Pandemic Preparedness and Mitigation, chaired by William (Bill) Marcoux (senior corporate lawyer)

 

  • Legal, Regulatory and Government Affairs, chaired by Amber Rudd (former senior politician).

 

Pandemic Re is following the template set by the UK’s government-backed terrorism mutual Pool Re, which was set up in 1993 to provide a disaster risk-financing mechanism for terrorism risks.

 

A similar solution is being discussed for the European Union.

 

Pandemic Re’s original steering group comprises: Stephen Catlin (chairman and CEO, Convex); Maurice Tulloch (CEO of Aviva); Stephen Hester (CEO RSA); Julian Enoizi (CEO Pool Re); Nick Frankland (UK CEO Reinsurance Solutions, Aon); James Nash (CEO, International, Guy Carpenter), and James Kent (CEO Willis Re). Since the group’s inception in April, Jon Dye, chairman of the Association of British Insurers and CEO of Allianz Insurance, also has agreed to join the steering group.

 

Michael Dawson (of Chaucer and the Scheme Structure/Operating Models working group) will chair the project committee and liaise with Pandemic Re’s steering group. The project committee will include the working group leaders listed above, and Martin Hattrell (formerly senior corporate lawyer at Slaughter and May).

 

“The Steering Committee has made considerable progress by identifying working groups and business leaders to direct them as well as helping to determine the detailed activities for each work stream. I would like to thank all these volunteers for giving their time to this project,” Mr Catlin said in a statement.

“We have a significant task ahead although we have received enormous levels of industry support. The insurance industry is collaborative by nature and with this highly experienced group, we hope to be able to deliver a structure in a relatively short time frame,” Mr Dawson, chairman of the project committee said.

 

“We have been following closely discussions on a number of different possible approaches to providing cover for future losses from pandemic risks,” commented Dave Matcham, chief executive of the International Underwriting Association (IUA).

 

“I am pleased that Pandemic Re has been able to gain support for its work from many volunteers across our industry. Many IUA members are represented in the working groups that are being formed to examine different aspects of the issue and the association looks forward to providing additional support,” Mr Matcham added.

 

“This backing clearly demonstrates our sector’s commitment to helping mitigate risk and finding more effective recovery solutions,” he said.

 

Organisations represented in Pandemic Re’s working groups follow:

 

  • Academia / research: Cambridge Centre for Risk Studies and Imperial College

 

  • Insurance brokers: Aon; Gallagher; Hyperion; Marsh and Willis Towers Watson

 

  • Consulting/advisory: Deloitte; KPMG; Oliver Wyman and PWC

 

  • Data: Dun & Bradstreet; Mastercard; Metabiota; Risk Management Solutions and Verisk

 

  • Industry associations: Association of British Insurers (ABI); British Insurance Brokers Association (BIBA); Confederation of British Industry (CBI); Lloyd’s Market Association (LMA) and London Market Group (LMG)

 

  • Re/insurers: Allianz; Asta; Aviva; AXA; Chaucer; Chubb; Convex; Ecclesiastical; Flood Re; Hiscox; Lloyd’s; Munich Re; Pool Re; RSA; Swiss Re and Zurich

 

  • Legal firms: Arnold & Porter; Clifford Chance and Herbert Smith

 

  • Medical: National Health Service