Insurance Jottings
TransRe plans Luxembourg subsidiary in European expansion
TransRe, the reinsurance arm of Transatlantic Holdings and a wholly owned subsidiary of Alleghany Corporation, is planning a subsidiary in Luxembourg as it looks to restructure and bolster its presence in the European Union.
The new simplified corporate structure will see TransRe Zurich re-domiciled to Luxembourg and renamed while its Continental European offices in Munich, Paris and Zurich, as well as Dubai, will become branch offices of Luxembourg.
TransRe expects to build up its staff in Luxembourg over time to focus on risk, compliance and central management functions.
The company said the new structure will have no impact on the business activities and staff of TransRe’s operating offices (including TransRe London).
TransRe expects to complete the restructure by mid-2019.
Lloyd’s Lab selects 10 tech teams to help transform the market
Lloyd’s Lab, the global insurance market’s new innovation accelerator, has opened its doors following a global search for technology talent that drew more than 200 applications from 36 countries.
The launch event on the 4th September was attended by the Economic Secretary to the UK Treasury, John Glen MP, and Lloyd’s CEO Inga Beale. Some 20 teams pitched their ideas for the chance to develop products, platforms and processes that will help transform Lloyd’s into an increasingly technology-driven market.
Start-ups, entrepreneurs and businesses from as far afield as the US, Canada, Israel, the Netherlands, Ireland and the UK, presented ideas ranging from live-streaming drones for fast risk and disaster assessment, to harnessing the Internet of Things for live cargo tracking, to on-demand insurance for the gig economy.
Following the process, Lloyd’s selected ten teams which will be offered a spot in the founding Lloyd’s Lab cohort. These included: Layr, an AI powered insurance platform providing faster access for small businesses buying liability insurance; CargoSnap, a mobile transportation inspection app connected to a powerful online platform to collect, analyse, and share information in the supply chain, speeding up claims; and DropIn, an on-demand live video streaming platform to streamline insurance inspections and catastrophe response assessment using mobile phones and drones.
Some of the others selected included Insurercore, a digital-based risk appetite directory for those seeking to place and write risks quickly and conveniently; BelMead Tech, a claims support platform using blockchain and other technologies, to improve the insured’s claim journey whilst also improving efficiencies for the claim handling team; Parsyl, a platform which uses data and predictive analytics, allowing insurers to better anticipate risk and improve the claims process; and Geollect, creators of proprietary intelligence software for businesses to improve efficiencies, safety and security.
The final three were: ZASTI, an AI technology platform built using proprietary Deep Learning algorithms to provide predictive and diagnostic solutions to solve multiple business problems; Qnity, a digital insurance that allows individuals to design their own insurance solutions; and iCede, a cloud-based platform that enables large insurance companies to interact across borders in order to arrange insurance cover for multinational corporations.
The teams joining the Lab will gain access to the world’s largest market for specialist insurance and reinsurance, in support of its digital evolution. This tech talent will help deliver innovative solutions to some of the key challenges the Lloyd’s market faces.
Over the ten weeks, the selected Lab teams will have access to a co-working space located in the Lloyd’s building in London, potential funding and the chance to develop products, platforms and processes that will help transform Lloyd’s into an increasingly technology-driven market.
Mr Glen said: “InsurTech is booming. There was US$724 million of InsurTech investment globally in the first quarter of 2018 and the UK attracted 12 percent of that funding, placing it second only behind the US. We’re doing everything we can to maintain this momentum and cultivate innovation in the sector, but ultimately, it is down to firms like Lloyd’s to take the lead, and that’s exactly what they’re doing with their Lab.”
Ms Beale added: “Lloyd’s has always been at the forefront of innovation – the launch of our new innovation accelerator is an important step forward into our technology-driven future and we’re excited to see how the ideas develop. The Lab is an important part of our future focused strategy which will further strengthen our position as the global centre for insurance innovation.”
HIIG partners with MGA to provide captive solution for energy clients
Texas-based insurance holding company Houston International Insurance Group (HIIG) is set to enter into a partnership with Massachusetts-based managing general agency Energi Insurance Services, to provide a captive insurance solution for energy clients.
Energi’s target classes include fuel distribution, energy transport, energy construction, utilities, renewable energy, and agricultural cooperatives.
Coverages provided by the captive solution include auto liability, general liability, excess liability, and workers compensation.
eCaptiv is based in Vermont and funded by client participation. Significant excess reinsurance will be provided above captive retentions.
“We are pleased to have reached this agreement in principle with Energi and look forward to working with their very experienced management team and captive clients in building a best-in-class facility,” said Stephen Way, chairman and CEO of HIIG.
Brian McCarthy, CEO of Energi, added: “We are pleased to have HIIG as our partner for the energy group captive programmes. HIIG’s depth of resources will be extremely beneficial to the members and the long-term success of these programmes.”
Stonybrook Risk Management was responsible for facilitating this partnership and is also the financial advisor for mezzanine financing for Energy through its affiliated company, Stonybrook Capital.
What Will Happen to EU Financial Services Firms After No-Deal Brexit?
Britain will unilaterally accept some European Union rules and give EU financial services firms continued access to the UK market in order to maintain stability if the country crashes out of the bloc without a deal, the country’s top negotiator said on the 23rd August.
The details come in a raft of documents laying out government plans for a “no deal” Brexit and offering people and businesses advice on how to prepare.
The first 25 of more than 70 papers published cover everything from financial services to nuclear materials.
Britain says it will allow EU financial service firms to continue operating in the UK for up to three years – although it cannot guarantee the reverse will also be true.
The documents say “people and businesses should not be alarmed” by the planning.
Brexit Secretary Dominic Raab said Britain was determined to “manage the risks and embrace the opportunities” of Brexit.
He dismissed alarming headlines suggesting the UK could run out of sandwich supplies and other staples. “You will still be able to enjoy a BLT after Brexit,” he said in a speech in London.
Despite the upbeat tone, the documents reveal the scale of disruption to the British economy and daily life which could follow Brexit.
While the U.K. currently has customs-free trade with the 27 other EU countries, the documents say a no-deal Brexit would mean a much harder border.
For goods going to and coming from the EU, “an import declaration will be required, customs checks may be arrived out and any customs duties must be paid,” one document said.
Apollo acquires Aspen for US$2.6 billion
Alternative investment manager Apollo is offering US$2.6 billion to buy Bermuda-based Aspen Insurance Holdings and take the insurer private.
Under the terms of the agreement, which has been approved by Aspen’s board of directors, the Apollo Funds will acquire all of the outstanding shares of Aspen for US$42.75 per share in cash, representing an equity value of approximately US$2.6 billion.
Aspen reported an underwriting loss of US$558.1 million for 2017 after an underwriting profit of US$51.9 million in the previous year. The combined ratio deteriorated to 125.7 percent from 98.5 percent over the period.
For the year ended the 31st December 2017, Aspen reported US$12.9 billion in total assets, US$6.7 billion in gross reserves, US$2.9 billion in total shareholders’ equity and US$3.4 billion in gross written premiums.
The transaction is expected to close in the first half of 2019. Upon completion of the deal, Aspen will be a privately held portfolio company of the Apollo Funds and Aspen’s ordinary shares will no longer be listed on the New York Stock Exchange.
Aspen provides reinsurance and insurance coverage to clients in various domestic and global markets through wholly-owned subsidiaries and offices in Australia, Bermuda, Canada, Ireland, Singapore, Switzerland, the United Arab Emirates, the UK and the US.