1. Credit claims keep on rising
10
INSIGHT
www.insuranceday.com| Wednesday 9 May 2012
Global insurance market sees sustained M&A
L
ast year saw a surge in
mergers and acquisitions
(M&A) in the global insur-
ance industry, with the
deal flow reaching its highest level
fortwoyears.Afteradecliningtrend
through 2009 and 2010, there was a
sharpuptickinactivityinthefirstsix
months of last year, followed by a
sustained level of transaction activ-
ityinthesecondofhalfoftheyear.
According to data supplied by
Thomson Reuters, there were 546
dealsoverallin2011comparedwith
521in2010.Thiswasdespitecontin-
uingbroadereconomicuncertainty,
especially around the ongoing debt
crisisintheeurozoneandthedown-
gradeoftheUSbyStandard&Poor’s.
So, what has changed? Certainly,
rising financial asset values have
given boards greater confidence
andbalance-sheetflexibility.There
has also been more readily availa-
ble finance, including leveraged
deals, which are attracting private
equity firms, although some are
concluding deals with co-equity
investors. The final element is buy-
ers and sellers are more closely
alignedonpriceexpectations.
There is also strong evidence
that – almost irrespective of the
geography in which they are oper-
ating – there is a growing under-
standing insurers need to build
scale to strengthen their balance
sheetsandsustaintheirmargins.
Investors’appetitehasimprovedastheyseekopportunitiesfordealsaroundtheworld
Andrew Holderness and Gary Thorpe,
global corporate insurance team partners
Clyde & Co
Graph1:Volumeofmergerandacquisitiondealsglobally,2009to2011
300
290
280
270
260
250
240
230
220
1H2009 2H2009 1H2010 2H2010 1H2011 2H2011
Source:ThomsonReuters
The US dominated the M&A pic-
ture, accounting for almost half
the deals done. This is backed up
by figures released in a recent
renewal report by reinsurance
broker Guy Carpenter, which
reveal M&A deals in the US
and Bermudian non-life sector
picked up last year in terms of
total dollar value to $12.8bn from
$7.3bnin2010.
In the US, the much-predicted
hardening of insurance prices
seems to be getting under way,
climbing at the fastest rate in
nearly four years, with the market
expecting this trend to continue as
insurers impose greater under-
writing discipline to compensate
for weaker investment returns. A
monthly review of medium-sized
and large-cap US client data by
Marsh early in 2011 has shown a
5.3% average uplift in commercial
property insurance rates in Janu-
ary from a year ago. If the market
hardening is sustained, valuation
levelsforinsurersshouldincrease
and this, combined with a pro-
longed period of reserve releases
coming to an end, could act as a
catalyst for more M&A trans-
actions. There is also pressure
building on some private equity
investors to realise earlier invest-
mentsininsuranceoperations.
US
Graph3:USandBermudiannon-lifeM&Adeals
2010 2011
$7.3bn
$12.8bn
There is still keen interest in the Lloyd’s
market, with almost all the small-
cap quoted vehicles seeing some inter-
est – with a number of possible suitors
being mooted. In recent weeks we have
operations in the market and diversify
their portfolio of business, the attrac-
tion of having a Lloyd’s platform is
clear. However, with ongoing excess
capital and a soft market, the Lloyd’s
franchise board is setting tough crite-
ria for new entrants and start-ups have
Lloyd’s
Slightly m
deals in the
were in Eu
look likely
number o
undoubted
imminent
This has in
requireme
insurers a
books of b
inrun-off.
Any cap
act as a c
corporate
organisatio
sales and
will hope
applying m
manageme
nies that m
relatively
while sell
offload b
capital req
thereturns
EuropInsight
Technology Focus
www.insuranceday.com| Wednesday 9 May 2012
Qatar non-life market
T
here is a total of 21 direct
insurance companies
and branches of foreign
insurers licensed in the
Qatar non-life insurance market.
These include five national compa-
nies and four branches of foreign
companies licensed by the Qatari
Ministry of Business and Trade
(MBT) under Insurance Decree
No 1 of 1966; 11 companies and
branches of foreign companies
licensed by the Qatar Financial
Centre (QFC); and one captive
insurance and reinsurance com-
panylicensedbytheMBT.
There were five national compa-
nies in the market in 2011 licensed
by the MBT. These were Qatar
Insurance Company (QIC), Qatar
General Insurance and Reinsur-
ance Company (QGIRCO), Al
Khaleej Takaful Insurance and
Reinsurance Company, Doha
Insurance Company and Qatar
IslamicInsuranceCompany(QIIC).
National companies licensed by
the MBT must be publicly quoted
and fully owned by Qatari share-
holders. The most significant
part of the insurance market – the
government-owned energy sector
– is reserved for them. These risks
are put out to competitive tender,
normallyeverythreeyears.
Energybusiness
The Qatar non-life market not
related to energy business is still
comparatively small. The energy
and petrochemical market makes
up an estimated 50% of the whole
market. It is this dominance of
energy business that largely
accounts for Qatar’s relatively ele-
vated position in world market
rankings compared with countries
with similar populations in the
Gulf Co-operation Council (GCC)
statessuchasBahrainandKuwait.
The MBT has not published
statistics for several years and the
QFC does not publish statistics
regarding the activities of its mem-
bers. The Qatar Statistical Author-
ity publishes some figures related
tobanks,insurancecompaniesand
other business activities (covering
37 firms) but these are not split by
tinuing fierce local and interna-
tional competition leading to
reductions in premium rates in the
principal classes of business. In
any event, such trends are in line
with other energy-dominated
insurancemarketsintheregion.
Thereisinternalmarketactivity
in Qatar in respect of locally
placed facultative reinsurance,
especially as between the national
companies (including facultative
cessions by the latter to the local
captive, Al Koot, owned by Qatar
Petroleum). It is not known
whether the GSDP data takes
account of such activity, which
could result in double counting of
premium from the same original
grosspremium source.
Compared with other GCC states,
the motor account (third-party
liability and casco) constituted a
relatively small proportion of total
non-life business (close to 20.6% in
2008),butitistheareawheremany
of the foreign companies have con-
centratedtheirefforts,sincetodate
they have been denied participa-
tioningovernment-ownedrisks.
Thisremainsthecaseinpractice,
although whether it will do so for
the future is now a matter of some
conjecture, given the dynamic and
liberal economic policies being
pursued in the country in the
recent years, one of the manifesta-
tions of which has been the emer-
gence of the QFCA. Since the latter
permits authorised retail and
wholesale carriers and brokers to
operate within the local market, as
well as in overseas markets, some
changes to the established status
quo would appear to be a possibil-
ityinthefuture.
In the meantime, however,
according to anecdotal evidence
thenationalcompaniescontinueto
have a monopoly of government
business and therefore of most of
the largest accounts. Brokers also
appear to have made only very
limited inroads into the histori-
cally established direct placement
of large risks, even though some
large brokers such as Marsh and
Aon have entered the retail market
inrecentyears.
ComparedtootherGCCcountries,themotoraccountinQatar
constitutearelativelysmallproportionoftotalnon-lifebusiness,
butitistheareawheremanyoftheforeigncompaniesinthemarket
haveconcentratedtheirefforts
Table1:TotalinsurancemarketpremiumincomeinQatarin2007
Category Life Non-life
Personal
accident
andhealth
Total
market
Premium(Riyalm) 34.9 3,106.7 n/a 3,141.6
Premium($m) 9.6 853.5 n/a 863.1
%oftotalmarket 1.1 98.9 n/a 100.0
Source:AxcoGlobalStatistics
Note:TheMinistryofBusinessandTradehasnotpublishedstatisticsforseveral
yearsandQFCdoesnotpublishstatisticsregardingtheactivitiesofitsmembers.
Table2:Annualgrowthratesofnon-lifepremiumincomeinlocal
currencyinQatarcomparedwithnominalGDPgrowthandinflation
ratesoverthelastfiveto2008
2004 2005 2006 2007 2008
Premiumgrowth(%) 31.8 33.3 140.5 (6.0) (21.7)
NominalGDPgrowth(%) 34.8 35.6 40.6 33.5 37.1
Inflationrate(%) 6.8 8.8 11.8 13.8 15.1
Source:AxcoGlobalStatistics
Table3:Approximatemarketshare(%)bylineofbusinessandby
distributionchannelQatarin2010
Lineof business Agents Brokers Directsales
Non-motor 2 8 90
Motor 20 10 70
Source:AxcoGlobalStatisticsestimatesbasedonmarketopinion
Graph1:Non-lifepremiumsplit
inQatarin2008
++++AMotor
Miscellaneous
Marine,aviationandtransport
Property
Source:AxcoGlobalStatisticsbasedon
datafrominsuranceindustry
associationsandregulatorybodies
activity and therefore do not give
precise indications regarding the
insurance industry in isolation.
Axco has, however, obtained some
market statistical data for the
period 2003 to 2008, sourced from
the General Secretariat for Devel-
opmentPlanning(GSDP)data.
There is another source of data
related to the non-life market pro-
vided by Swiss Re. The data in this
source is not split by class of busi-
ness, however, and is therefore of
somewhatlimitedvalue.SwissRe’s
data does not completely accord
withthatfromtheGSDP.
Reductioninpremiumvolume
Both sets of figures appear to indi-
cate reductions in total market
non-lifepremiumvolumeinrecent
years.Anecdotalevidencefromthe
market suggests in 2008 and 2009
such reductions in volume were
caused primarily by the effects of
the global economic crisis and con-
Graph2:Topfiveinsurersin
Qatarrankedbypremium
incomein2007($m)
QatarInsuranceCompany
QatarGeneral
0 100 200 300 400 500
AlKahleej
Doha
QIIC
Source:AxcoGlobalStatisticsbasedon
datafrominsuranceindustry
associationsandregulatorybodies
Supervision
To rationalise the supervision and
control of the financial industry,
including insurance, in 2007 the
government appointed an interim
board to oversee the establishment
of an integrated financial supervi-
sory body, to be called the Financial
RegulatoryAuthority(FRA),dealing
withbanking,insurance,assetman-
agement, securities and all other
financial services. The plan was to
co-ordinate by the end of 2008 the
activities of Bank of Qatar’s depart-
ment of banking supervision and
customer service unit, the Qatar
Financial Markets Authority and
theQFCRegulatoryAuthority,butit
has been delayed for unknown rea-
sons and at the time of preparation
ofthisreportitwasuncertainwhen
itwillbecomeoperational.
Companychanges
Al Khaleej became a fully takaful
company effective from January 1,
2010, changing its name from Al
Khaleej Insurance and Reinsurance
Company to Al Khaleej Takaful
Insurance and Reinsurance Com-
pany.Establishedin1978,AlKhaleej
was the fourth-largest company in
the market in 2009, with gross pre-
mium income of Riyal281.9m
($77.4m). In 2010, it recorded gross
contributions of Riyal286.5m, of
which Riyal267.4m was non-life
business(93%oftotalcontributions)
andRiyal19.1mwastakafullifebusi-
ness(7%oftotalcontributions).
Each national company has a
number of tied accounts derived
fromitsshareholders.
The figures in respect of Al
Khaleej, Doha and QIIC include
life business since because these
companies operate in this class of
business according to Islamic
principles, they are permitted by
the MBT to write such business.
Nevertheless, the other national
companieswriteannualgroupper-
sonal accident business covering
death by any cause as a non-life
class of business and this approach
frequently substitutes for group
lifebusinessassuchinthemarket.
It is curious the two largest com-
panies–QICandQCIRCO–suffered
the largest reductions in gross pre-
miumincomein2009and2010.Itis
thought this may have been par-
tially the result of pressure on
major energy risk premium rates
and the effects of the global eco-
nomiccrisisonthelocaleconomy.
Distributionchannels
It is difficult to arrive at accurate
distributionmixestimatesbecause
of the potential impact of the entry
inthelocalmarketforthefirsttime
of large international brokers. His-
torically, brokers have never been
a feature of the market and the
major firms have long been accus-
tomed to writing most of their
major accounts on a direct basis.
Anecdotal evidence clearly sug-
geststhissituationstillpertains.
Competition is, however, un-
questionably accelerating in a soft
marketandthiswillinevitablybegin
to give the brokers opportunities to
break into the major risk retail mar-
ketovertimealthoughevidencesug-
gests the monopoly of the national
companies over government busi-
nessisunlikelytoendsoon.
The presence of international
brokers in the reinsurance place-
ment of all major energy risks and
some major property risks has
already advanced awareness of
risk management in the market
and thus the degree of sophistica-
tionwithwhichthelargestarehan-
dledandplaced.
Bancassuranceisdefinitelygrow-
ing and there is now direct involve-
ment by banks in the market. A
recentexampleistheestablishment
of its own insurer by Doha Bank,
launched in January 2008 with a
licence from the QFC to write all
classesofgeneralbranchinsurance.
Directhandling
The leading families in Qatar have
a range of business interests
including insurance and it is usual
fortheseaccountstobeplacedwith
the in-house insurer on a more or
less“tied”basis.
Otherwise, insurers use a direct
sales force operating from com-
pany head offices in Doha. These
sales agents are either remuner-
atedbyamixtureofsalaryandcom-
mission or salary and bonuses.
Some of these may operate from a
branch office but as Qatar is not a
largecountry,therearenotmanyof
them. The branch offices which
exist are mainly used for servicing
motor insurance; some insurers
have sales offices in the Traffic
Departmentsomotoristscanobtain
cover on the spot when applying
fororrenewingvehicleregistration.
There are no telesales in Qatar
andthissaleschannelisnotthought
tohavemuchofafutureaspersonal
contact is preferred. There is
comparatively little advertising of
insurance products, although some
national companies sponsor sport-
ingeventsforpublicitypurposes.
Bancassurance
All of the major national insurance
companiesworkcloselywithbanks
in respect of distribution. For
example, Qatar Islamic Insurance
works closely with Qatar Interna-
tional Islamic Bank and provides
marine cargo coverage for exports
andimportsfinancedbythebank.
Bancassurance has not histori-
cally been a major distribution
insurance channel in Qatar
although when a bank is lending
money for car purchase it will usu-
allyinsistoninsurancebeingtaken
outwithoneofthenationalcompa-
nies. Banks do not receive commis-
sion on directed business but the
insurers debit them with premi-
ums and the bank also charges an
additional fee to the client account.
The Central Bank does not appear
to impose specific controls as to
how banks deal with insurance
sales and client debiting and Basel
IIIisnotyetofrelevance.
Other bank/insurer relation-
ships involve the granting of auto-
matic personal accident/natural
death cover to those taking out a
personal loan by way of credit life
masterpolicies.
With the emergence of the QFC,
providing as it does significant
marketingopportunitiesforawide
range of financial institutions and
intermediaries, it is expected banc-
assurance techniques will be more
widely deployed in the future.
There certainly appears to be
increasing interest in bancassur-
ance and even direct involvement
bybanksintheinsurancemarket.
Apart from bank
insurers also have al
main car dealerships
issue cover notes for
motor third-party lia
anceandcanaccessdir
databasestoenterinsu
Affinityschemespe
be rare, but the QIIC
group personal accid
covering members of
Association of India
AdministratorsQatar
Agencies
Insurance agents ar
under art 20 of Insur
No 1 of 1966. There is n
ent agency system, alt
isnoprohibitionagain
agent, the individual
least 21 years of age
national. They must
repute and not an unr
bankrupt.Thesameap
nersordirectorsofage
More than 400 Qat
eign individuals ha
authorisationtoopera
QFC. The professions
viduals are not ment
fewmayactasinsuran
The foreign insurers
soredbylocalmerchan
will support the compa
ownbusinessandanyi
theycanmake.
Insurancebrokers
Relevant to brokers, th
Mediation Business
were published in Jun
Qatar Financial Centr
Authority (QFRCA) an
effect on July 1, 201
coverprincipally:
l Definitions of insu
mediary/insurance
captive insurance
clientmoney;
l Prudential require
ing to financial
system controls for
asset requiremen
capital and asset re
professional indem
ance/filing and d
the filing of pruden
mentreturns;
l Regulations relatin
money, opening c
bank accounts, cl
exceptions, treatm
money and relate
duties and the se
clientmoney;
l Performing calcu
reconciliations/trea
materialdiscrepanc
l Clientmoneydistrib
l Collateral;
l Client mandates/s
Graph3:Developmentofthelifeandnon-lifemarketfortheperiod
2004to2008($bn)
n Life n Non-life
1.0
0.8
0.6
0.4
0.2
0
Source:AxcoGlobalStatisticsbasedondatafrominsuranceindustryassociations
andregulatorybodies
2004 2005 2006 2007 2008
Insurance Day Atlas
Industrysees
sustainedM&A
activity p10-11
Externalforces
driveLondon
marketchange p4
Qatar’snon-life
sectorunderthe
microscope p8-9
Reinsurance rates
•MunichRehails
pricehikefornat
catrisks
•Butstructural
priceproblem
remainsfor
UScasualty,
reinsurance
giantsays p2-3
Risk Foresight
Risingcivilunrest
risksinAngola
andBotswana p5
p6-7
MARKETNEWS,DATAANDINSIGHTALLDAY,EVERYDAY WEDNESDAY9MAY2012
ISSUE3,600
SouthernEuropeisregionof
greatestconcerntoinsurers
Wednesday 9 May 2012 7www.insuranceday.com| Wednesday 9 May 2012
OLITICAL & TRADE
UK:TwonewsurveyshaveindicatedrenewedconfidenceamongUKcompaniesdespitethedouble-diprecession.
ThelatestBusinessConfidenceMonitorfromICAEW/GrantThorntonhasshownastrongimprovementinconfi-
dence,withquarter-on-quartergrowthof0.6%forecastforthesecondquarterof2012.
Businesses expect capital investment to grow by just 1.4% over the next 12 months., the survey showed. Compa-
niesreportedexportsare4.1%higherthanayearago,upfrom3.3%lastquarterandthestrongestgrowthsincethe
thirdquarterof2011.
Scott Barnes, chief executive of Grant Thornton, said: “Any improvement in the key performance indicators in
theBusinessConfidenceMonitorispositive.
“Turnoverandprofitsareallincreasing,butnowhereneartherateseenpre-recession,andbusinessesarebegin-
ning to realise this environment may be the norm for some time. However, we are working with dynamic compa-
nies that are delivering high growth in both domestic and global markets, so businesses must continue to look for
opportunities.”
A separate survey from the Confederation of British Industry showed a net 22% of small and medium-sized
enterpriseswhoaremanufacturerssaidtheyweremoreoptimisticinthethreemonthstoApril.
Credit insurer Atradius has warned the UK will struggle to keep its economy growing and withstand the deterio-
ratingoutlookformainlandEurope.
Butgrowthisexpectedtoremainpositive–ifmodest– in2012andincreasefurtherin2013.
INTOMORROW’SWORLDLOSSINTELLIGENCE:
LIABILITY&SETTLEMENTS
emporary rebound in January
K companies upbeat as they adjust to new norm
Eurozone crisis: Increase in insolvencies expected across much
of Europe
EUROPE: Credit conditions in the eurozone remain tight, Atradius has reported, with an
increaseininsolvenciesexpectedacrossmuchofthecontinent.
Thetighteningcreditconditionsaretheresultofpersistentlyhighriskaversionandhighdebt
levelsinboththepublicandprivatesectors.
“In light of continued uncertainty about future write-downs, weak capital positions and sov-
ereign-related risks, the most recent evidence suggests the credit channel is not yet functioning
effectively,”Atradiusreportedinitslatestglobaleconomicoutlookreport.
Given the uncertainty about future economic developments, the tightening of loan supply is
expectedtocontinueacrossEurope.
“This is especially troublesome for small and medium-sized businesses, often reliant on bank
financing.Newinvestmentwillbehampered,aswilltherefinancingofexistingloans,”itadded.
War risk: Tensions escalate between two Sudans
SUDAN: Tensions have risen between the
two Sudans after South Sudan invaded the
Heglig oil field north of the country’s bor-
der,reportsEulerHermes.
Although Sudan has recaptured the area,
tensions remain high on issues such as allo-
cationofoilrevenues–mostoftheoildepos-
its are in south but pipelines go through
Sudan.
Euler Hermes reports a build up in mili-
taryactivityandaction.Evenifoutrightwar
is avoided, the credit insurer says economic
damage can be expected as oil production
hasallbutceased.
“Do not expect a quick resolution to the
conflict, which may yet spill over into other
countries,”thecreditinsurerwarned.
Eurozone crisis: Political uncertainty
follows Greek parliamentary election
GREECE: Political instability and the prospect of demonstra-
tions will continue in Greece this week, according to IHS Global
InsightanalystBlankaKolenikova.
“Amid continuous economic and fiscal hardship and months
of austerity, electors will punish the two main pro-bailout
parties – the Panhellenic Socialist Movement and New Demo-
cracy – both of which have dominated the Greek political scene
fordecades,”Kolenikovasaid.
“As many as ten parties are likely to enter parliament, which
will make government-creation extremely difficult and raise
concerns about political vac-
uumandinstability.
“The aftermath of
the election might
also be accompa-
nied by mass pro-
tests staged by the
far left, especially
if their surge in
support does not
win them a place in
the ruling coalition,”
Kolenikovasaid.
10Different political
parties could be
represented in the
Greek parliament
Hegligoilfield
Low Average High
GraphInsolvency riskin2012
Deterioriating
Stable
Improving
Canada
Finland
Germany
Sweden
Japan
NewZealand
Norway
Austria
Netherlands
Switzerland
Australia
Belgium,Spain,
France,Greece,
Italy,Portugal,
UK
Ireland
Luxembourg
Denmark
US
Source:Atradius
Change
Level
10.9%....Unemployment
rate across the
eurozone
17.3 m...Unemployed
in the eurozone,
equivalent to...
160,000rease in number
unemployed in
rch, a total of...
3. 3
NEWS
www.insuranceday.com| Wednesday 9 May 2012
price hikes Hiscox expects US reinsurance
conditions to keep improving
Hiscox has provided an indicator it expects
further improvements in reinsurance mar-
ket conditions by holding back some US
capacity at the start of the year for forthcom-
ingrenewals,writesScottVincent.
The Bermudian firm’s interim statement
showed a slight reduction of premium
income0.9%to£180.7m($291.6m)foritsLon-
don market operations in the first quarter,
due to some US reinsurance clients purchas-
ing less cover as well as some reinsurance
capacity being held back. Hiscox Bermuda’s
gross written premiums were down 15.7% to
$117.2m, due to the non-renewal of a pro rata
treatyonalargeUSaccount.
However, Hiscox said its Bermuda pre-
miumincomewasnowgrowingyearonyear,
followingtheApril1renewalseason.
Hiscox said rates for Japanese earthquake
catastropheexcess-of-losshavedoubledsince
theMarch2011earthquakeandtsunami.
“At the April renewals, our reinsurance
businessmorethandoubleditsbudgetedpre-
miumincomeinthisarea,”Hiscoxstated.
Elsewhere, Hiscox saw growth in its US, UK
andEuropeanbusinesses.
Hiscox USA grew premium income
by 21.6% to $47.8m, with growth driven by
management liability, construction and ter-
rorismlines.
Gross written premiums rose 3.4% to
£89.1m at Hiscox UK, with the company plan-
ningaTVadvertisingcampaigninthecoming
monthstohelpfurtherbuildthebrand.
Hiscox Europe grew 7.9% to produce gross
written premiums of €69.4m ($90.1m) for the
quarter, driven by its specialty commercial,
technologyandmedialines.
Argo returns to black on back
of low catastrophe losses
Argo generated net profit of $19.6m
during the first quarter of 2012, compared
with a net loss of $94.1m during the open-
ing three months of last year, writes
ScottVincent.
The performance improvement was
driven by the benign first quarter of 2012 –
pre-taxcatastrophelosseswere$4mforthe
quarter, compared with $113.1m for the
firstquarterof2011.
The Bermudian firm gener-
ated a combined ratio of
103.4% for the period,
compared with 144.9%
during the first three
monthsof2011.
Argo’s chief executive,
MarkWatson,saidmarket
conditions were improving
“to varying degrees” across
the company’s platforms.
Argo’s international specialty seg-
ment helped drive the improvement, gen-
erating an operating profit of of $5.8m
compared with a loss of $52.8m during the
firstquarterof2011.
Syndicate 1200 also swung from a loss of
$47.3m during the first quarter of last year
to a profit of $1.7m during the first three
monthsof2012.
In Argo’s excess and surplus lines seg-
ment,operatingprofitrosefrom
$13mto$18.9m.
Watson said the com-
pany’s new ventures,
most notably in Brazil,
had got off to a strong
start.
Argo had previously
announced a target of
$30m to $50m of written
premium through its
new Brazilian operation
in2012.
HBH ‘gratifyingly close’ to
hitting five-year plan
Hawkes Bay Holdings’ (HBH), the parent com-
pany which oversaw the management buyout
of Tysers and Aquila Underwriting, is “gratify-
ingly close” to hitting the targets set out in the
five year plan it established in 2007, writes
Christopher Munro.
Overall revenues for HBH reached £37.6m
($60.6m) in 2011, up 6% compared with the
previousyear,leavingtheholdingfirmforTys-
ers and Aquila with earnings before interest,
taxes,depreciationandamortisationof£7.6m,
an increase of 41% over 2010. Pre-tax profit hit
£5.18m,upfrom£2.67mfor2010.
“[We are] gratifyingly close to the targets set
inthecompany’sfive-yearstrategicplanatthe
time of the Tysers management buy-out in
2007,” HBH chairman, Christopher Spratt,
said. HBH is owned entirely by its employees
and the decision has been taken to not pay a
dividend for the last year, instead putting the
£2.73mofprofitintoitsreserves.
The results have been bolstered by a solid
performance, Tysers’ chief executive, Chris
Elliott, said. “We have further refined our
strategy and have identified specific areas of
thebusinesstostrengthen.
“In addition, we will be adding some com-
plementary business lines that will enhance
our offering to clients and we expect to see
the benefits emerge over the next 12 to 18
months,”hesaid.
AsforAquila,Elliottsaidtheunitcontinues
to develop and “remains a strategically
importantbusinessforHBH”.
Four Lloyd’s coverholders operate under
the Aquila umbrella – Hong Kong-based
SART Underwriting, the London-situated
Vectura Underwriting and Principia Under-
writing and Cove Program Underwriters.
SART focuses on marine, marine-related and
engineering risks based in the Asia-Pacific
region, while Vectura is a marine cargo
insurerandreinsurer.
Principia offers a range of specialist liabil-
ity, business interruption, brand protection
andcrisismanagementtothecreativemedia,
informationtechnologyandcorporateindus-
tries.CovedealswithUSconstructionrisks.
Berkshire profit doubles with a
net profit of $3.25bn
Berkshire Hathaway closed the first quarter
with a net profit of $3.25bn, more than
double the year-earlier profit of $1.51bn, writes
PeterBirks.
Berkshire’s insurance operations saw
fewer catastrophe losses and swung to under-
writing income of $85m from a year-earlier
loss of $1.28bnand its financebusinessposted
derivative gains of $1bn, more than tripling
the prior-year $271m. The group’s operating
income jumped to $2.67bn from $1.59bn,
which, in addition to the underwriting result,
included $791m in investment income from
insurance units, down 17%, and income of
$2bnfromnon-insurancebusinesses,up28%.
The improved underwriting result
reflected total earned premiums of $8.07bn,
an increase of 7.8%; claims costs of $4.77bn,
down 21%; and outlays for life, annuity and
health benefits of $1.09bn, up 7.6%. Berk-
shire’s insurance units posted no significant
catlossesduringthe2012period.
Berkshire Hathaway Re’s underwriting
loss dropped to $191m, from $1.34bn in
Q1 2011, on earned premiums of $2.07bn,
up6.5%. Berkshire’sGeneralRereinsurance
unit, which also posted some of the year-
earlier cat losses, swung to underwriting
income of $81m from a loss of $326m, as
earnedpremiumsrose2.4%to$1.47bn.
bondsor€2.6bn–upfrom€2.2bnattheend
ofDecember2011.
Munich Re has no plans to go for higher
risksininvestments,Schneidersaid.
“The environment is difficult, with the
European economy apart from Germany
slowing down considerably,” he said.
“This is not the time for an aggressive posi-
tioning in investments.” However, it was
so strongly capitalised it could react
quicklyifchancespresentedthemselves.
on the 3.9% of the first quarter of 2011 –
bothfiguresannualised.
“We feel the pinch of lower interest
rates,” Schneider said. Munich Re has
€183bn in fixed-income papers and half
ofthatingovernmentbonds,withsmaller
problemcountriesinEuropeplayingonly
aminorrole.
The company has invested heavily in
Germany,theUS,CanadaandtheUK,and
also in Italy, with 3% of all government
$19.6mArgo net profit
for the first
quarter of
2012
4. 4
TECHNOLOGYFOCUS
www.insuranceday.com| Wednesday 9 May 2012
T
hereisnodoubtwelivein
challenging times. Insur-
ers and reinsurers face
change at every level of
their business, from new risks,
such as cyber risks, to unprece-
dented and catastrophic weather
patterns, which have led to
recordclaims.
Virtually no aspect of insurance
is unaffected by these global and
far-reachingchanges.
You could argue the drivers of
change–economic,social,political,
technological and environmental
factors – are ever-present. How-
ever, the difficulties being created
byeachisatanall-timehigh.
For the London market,
responding and adapting to these
changes requires double the effort
forinsurersoutsidethismarket.
Responding to external pres-
sures, largely by adapting internal
processes, is commonplace for
insurers.IntheLondonmarket,the
challengeistwo-fold.
First, businesses have to adapt
their internal processes to meet
thesechallenges.Second,theyneed
to ensure these processes align
with the centralised infrastructure
andservicesoftheLloyd’sandcom-
panymarketbureaux.
These are not within the control
ofanyoneinsurerbutoftherespec-
tivemarketsasawhole.
Therefore,changeneedstomeet
the needs of the whole market, not
a single insurer. This means each
insurer’s and reinsurer’s London
market component is operation-
allyunique.
Of the five macro-drivers of
change, which is having the most
impact? C-level executives are con-
cerned by the economic outlook;
some are more worried about
the financial precariousness of the
eurozone, while for others, the
record level of catastrophe claims
dominatestheirhorizon.
Suffice to say, each issue is leav-
ing its own particular mark. So, let
uslookattheimpactofeach.
Theeconomicoutlook
Theeconomyaffectsinsurers,rein-
surersandbuyersalike.
Typically, recessions or slow
growth will see an increase in the
levels of fraudulent claims. Market
research reveals a perverse justifi-
cation from some consumers
insurance fraud is justified; it is
just payback for years of paying
premiums. Usually, it corresponds
with a reduction in insurance pur-
chases, as individuals and busi-
nesses accept more risk, to reduce
spend. These two factors alone cre-
ate many challenges. The result is a
reduction in the levels of income;
while claims increase, specifically
individual claims, increasing mon-
ies paid out, especially where dubi-
ousclaimsaremissed.
Thesociallandscape
Interaction between insurers and
consumers has changed enor-
mously over the past 10 to 15 years.
The internet and mobile communi-
cations have created a require-
ment for instant gratification,
particularly as younger people
conduct most of their interactions
viamobiledevices.
Whether it is to book a restau-
rant or find an address, the expec-
tation is of a response in seconds,
notminutes.
These changes affect our social
lives, as well as our working lives.
Insurers are responding in a
number of ways, from the creation
of mobile applications, to being
able to produce a quote within
“60seconds”.
We also carry these expectations
to our place of work; demanding to
use the same tools to do our jobs as
weusetorunoursociallives.
Thepoliticalspectrum
Regulationis,byfar,havingthemost
far-reaching affect on the industry.
Political intervention has come in
severalguisesinrecentyears.
Personal lines insurance has felt
the effect most forcefully, with
changes to the Compensation Act
and the introduction of the Minis-
tryofJusticeportal.
Althoughthesetypesofinterven-
tion can have a large impact on a
single line or even a type of busi-
ness, their impact is relatively
small when compared to the EU-
wide regulation being introduced
bySolvencyII.
Insurers and reinsurers are
spending millions preparing for this
regulationanditaffectseveryaspect
ofoperations,frombothacapitaland
enterpriseriskperspective.
Thetechnologywave
Arguably, technology is the biggest
change agent to affect the industry
in the past five years. Not only is it
influencing all the other drivers to
some extent, it is also often provid-
ing the solutions and exacerbating
theproblems.
Companies and individuals are
substantially increasing their use
oftechnologytorunaffairs.
In doing this, businesses are vul-
nerabletoanewtypeofrisk:cyber-
risk. It is a growth market, con-
stantlylookingfornewandflexible
products, especially as the risks of
technology usage and data storage,
via different methods, are not yet
fullyunderstood.
This presents fresh challenges to
insurers and reinsurers, as does
evolving customers’ needs, partic-
ularly in relation to new products,
such as software to protect data
andprocessesincloudcomputing.
It is a good example of technol-
ogy as the problem and solution,
with the solution being complex,
flexibleratingenginesallowingthe
sector to create and rate new and
emergingproductswithinhours.
Environmentalconsiderations
If technology is having the biggest
impact, it is arguably environmen-
tal considerations that have the
potentialtobethemostcostly.
Regardless of what is causing
environmental change, clearly the
world’s weather patterns are
changing; 2010 and 2011 both set
new records for the level of catas-
trophe claims. While most of the
industry is adequately capitalised,
losses of this magnitude cannot be
sustained indefinitely, without sig-
nificantincreasesinpremium.
This affects every sphere of the
sector and every market. Here too,
technology is helping, by improv-
ingthesector’sabilitytopredictthe
weather and to support develop-
ment of products to provide more
specific cover to individuals and
businessesmostaffected.
So far, I have only scratched the
surface on each of the macro-
drivers of change and the impact
each is having on the industry. I
think it shows the world for cus-
tomers and insurers is changing at
apaceandonascaleunforeseen.
The question remains, how can
theindustryrisetotheseenormous
challenges? While it cannot stop
this change, there are many things
it can do to respond, a theme I will
exploreinmynextarticle.n
Michael Cook,
associate partner,
consulting practice
CSC (EMEA)
External pressures drive
London market change
Inthesecondofthreearticles,MichaelCookexploresthe
externalpressuresthathaveledtochangeintheLondon
marketandtheimpactofthese
The internet and mobile
communications have
created a requirement
for instant gratification,
particularly as younger
people conduct most of
their interactions via
mobile devices.
Whether it is to book a
restaurant or find an
address, the expectation
is of a response in
seconds, not minutes
5. 5
RISKFORESIGHT
www.insuranceday.com | Wednesday 9 May 2012
Rising civil unrest risks in
Angola and Botswana
As Angola enters its pre-electoral
phase, civil unrest is very likely to
rise. The political opposition is
likely to capitalise on popular
discontent, especially among the
economically marginalised youth
in Luanda and in provincial capi-
tals,tomobiliseagainstthegovern-
ment. Commercial assets will not
be the primary targets, but violent
outbreaks are likely in instances
where the security forces use vio-
lencetocontaindemonstrations.
The ruling MPLA party and
Angola’s president, José Eduardo
dosSantos,havebeeninpowersince
1979. However, socio-economic
grievancesaregrowing.Inaddition,
a new electoral law adopted in
September2011,whichshouldhave
led to the establishment of an in-
dependent electoral commission,
has fallen short of the expectations
oftheopposition.Oppositionparties
Unita (MPLA’s wartime opponent)
and PRS have already threatened to
boycotttheelections.
Demonstrationsdispersed
Demonstrations in Luanda,
Lubango, Benguela and Huambo
havebeendispersednon-violently,
but the use of violence against
demonstrators would be a trigger
for large-scale popular unrest,
mainly in Luanda, and violence
against security forces and govern-
mentproperty.
While the leadership of the army
and the police remain loyal to the
government for fear of losing their
business ventures, our sources
indicatediscontentmentisincreas-
ing among the rank and file. We
therefore expect an increase of
non-violent protests until after the
elections, which will become
increasingly disruptive if the gov-
ernmentpostponestheelectionsor
resorts to electoral fraud, as was
allegedinthe2008election.
Also, ahead of the elections,
wage-related strikes are increas-
ingly likely. Strikes formerly
occurred mostly in the oil sector
(the workers union at Chevron/
CabindaGulf threatened a strike
over the “Angolanisation” of the
workforce last July) but have
spread to other sectors, such as
health, transport, education and
diamond mining. There are also
likely to be frequent non-violent
protests calling for better pay and
working conditions in urban cen-
tres, especially Luanda, the princi-
palcommercialcity.
‘Indigenisation’policy
To reduce unrest, the government
has focused its labour policy on
“indigenisation”, a process by
which expatriate workers are
replaced with native Angolan
employees. Compulsory targets
and requirements present opera-
tional hurdles for all companies:
theinadequatelocaleducationsys-
tem has created a shortage of
skilled local workers, requiring
foreign investors to rely on large
budgets for overseas study and
trainingtomeetquotas.
Furthermore, the poaching of,
and high wage demands from,
trained Angolans take place regu-
larly. Despite this, labour relations
do not present a significant direct
obstacle to business operations,
particularlyintheoilsector.n
Since 2011, labour unions in Bot-
swana have stepped up their
demands for higher pay and
improved working conditions, as
wellasbecomingincreasinglycrit-
icaloftherulingBDPpartyofpres-
ident Ian Khama. A public sector
strike last year resulted in a harsh
government response and the
amendment of the Trade Disputes
Act. The government reclassified
additional sectors as essential
service providers that are prohib-
ited from striking, including dia-
mondindustryworkers.
In response, the Botswana Fed-
eration of Public Sector Unions,
which represents more than 90%
of the government workforce, has
pledged its support for a mooted
opposition coalition at the 2014
general elections. Further strike
action is very likely to recur in the
mining, public, construction and
energy sectors over the next year.
Diamond mining firms are likely
to be at highest risk of falling
revenues owing to business dis-
for the BDP at the polls, Khama is
likely to ensure a smooth and
peaceful transition of power,
given Botswana’s long-time
democratic traditions.
Meanwhile, frustration with
illegal immigrants is expected to
mount, specifically those from
neighbouring Zimbabwe who are
blamed for an increase in crime in
Gaborone and Francistown. Com-
munal protests against Zimba-
bweans will therefore be a risk
over the next year, although sig-
nificant property damage is
unlikely. The government is tak-
ing steps to mitigate the risk. For
example, in a report to parliament
the regional immigration officer
for Francistown reported the
immigrationservicehaddeported
an average of 1,600 Zimbabweans
everymonthin2011.
Sanevictions
Another source of protest relates
to the long-standing dispute
regarding evictions from the tra-
ditional lands of the San people to
allow mining operations to be
Angola
Botswana
ruption. Manufacturing, energy,
retailandconstructionwillalsobe
atgrowingrisk.
Riotpolicedeployed
As the 2014 elections approach,
authorities are likely to deploy
riot police on opposition protests,
as well as striking workers and
civil society demonstrations.
Risks will be highest in the capi-
tal, Gaborone, as well as other
urban centres, thus raising risks
of collateral damage to commer-
cial and government assets, as
wellastoindividualscaughtupin
any violent confrontations. Cru-
cially,however,incaseofadefeat
conducted. While the dispute has
mostly been handled through
mediation, future displacement of
the San in favour of diamond
mining on their ancestral land
on the Central Kalahari Game
Reserve has the potential of turn-
ing into a violent confrontation
against the government and min-
inginvestors.n
ExclusiveAnalysisisaspecialist
intelligencecompanythatforecasts
commerciallyrelevantpoliticaland
violentrisksworldwide.For
additionalinformation,pleasevisit
ourwebsitewww.exclusive-
analysis.com
1,600Number of Zimbabweans Botswana’s
immigration service deported a month
in 2011, according to the Francistown
regional immigration officer
SupportersofdosSantosata
pre-electionrallyinLuanda
MikeCohen/BloombergNews
33Number of years
Angola’s MPLA
party has been
in government
6. 6 www.insuranceday.com| Wednesday 9 May 2012
WORLD LOSS INTELLIGENCE/POLITICA
UK:Twonewsurveyshaveindic
ThelatestBusinessConfidenc
dence,withquarter-on-quarter
Businesses expect capital inv
nies’reportedexportsare4.1%h
thirdquarterof2011.
Scott Barnes, chief executive
theBusinessConfidenceMonito
“Turnover and profits are al
beginning to realise this enviro
companies that are delivering h
lookforopportunities.”
A separate survey from the C
enterprisesthataremanufactur
Credit insurer Atradius has w
ratingoutlookformainlandEur
Butgrowthisexpectedtorem
LATIN AMERICA: Rating agency Moody’s has said there is little risk of recent expropriation in Latin America extending to
countriesintheregionwithrobustinstitutionalframeworksandrespectfortheruleoflaw.
TheratingagencywascommentingfollowingrecentnationalisationsinBolivia,ArgentinaandBelize.
Moody’ssaidVenezuelahasshownthegreatestwillingnesstonationalisecompaniesandfurtherexpropriationislikely.
Incontrast,Moody’ssaidallthemajorinvestment-graderatednationsintheregionsuchasChile,Mexico,Brazil,Peruand
Colombiahavestrongerinstitutions.
Eurozone crisis: Contraction continues following temporary rebound in Jan
Trade credit: Southern Europe is region of highest
concern for credit insurers
EUROPE:Claimstrendsinthecreditinsurancesectorhavecontinuedtodeteri-
orate since the beginning of the year, with Southern Europe the region of high-
estconcern.,writesScottVincent.
According to Robert Nijhout, executive director at the International Credit
Insurance & Surety Association (ICISA), the first quarter saw an increase in
claims,particularlyinfrequency.
“The number of companies with a deteriorating outlook is also on the rise.
SouthernEuroperemainstheregionofhighestconcern,”hetoldInsuranceDay.
Nijhoutsaidtheriseinclaimswasvisibleacrossallsectors.
“Sectorsofparticularconcernaretheconstructionsector –forexample,steel
–retailandautomotive,”hesaid.
However,LatinAmericacontinuestobuckthetrendwithincreasingdemand
forcoverandagoodclaimsperformance.
“OurglobaloutlookremainsmixedwithapositiveoutlookforAsiaandLatin
America. For Europe, we do not foresee an early improvement and we expect
thepresenttrendwillcontinueduringthenextsixmonths,”hesaid.
The mood concurs with credit insurer Atradius, which has predicted an
increaseininsolvenciesacrossmanyEuropeaneconomiesduring2012.
Countries highlighted by Atradius as having a high and deteriorating insol-
vency risk in 2012 include Belgium, Spain, France, Greece, Italy, Portugal and
the UK. Credit insurers have attributed the concerning global trade conditions
to a lack of adequate financing by banks, as well as the consequences of sover-
eigndebtintheEU,USandJapan.
In a recent newsletter to ICISA members, Nijhout said there was particular
concernamonghisassociation’smembershipabouttheabilityorwillingnessof
bankstocontinuetofinancetrade.
“Market conditions for trade credit insurance in 2012 are generally consid-
ered to be soft, although it is unclear if they will stay that way. If the envisioned
riskenvironmentworsens,thisisexpectedtoleadtopriceadjustmentsthatbet-
terreflecttheunderwrittenrisk,”hesaid.
NijhoutsaiddemandfortradecreditcoverisrisingintheBriccountries(Bra-
zil,Russia,IndiaandChina),ineasternEuropeand,moregenerally,inAsiaand
LatinAmerica.
The sector’s other main association, the Berne Union, reported a 17% growth
in the volume of export credits and foreign direct investment insured by mem-
bers during 2011. The Berne Union said credit and investment insurers have
paid $15bn to exporters and investors since the beginning of the global finan-
cialcrisisin2008.
Business confidence: UK companies upbeat as t
4.1%Reported rise in
exports from
companies
surveyed
Expropriation risk: Recent nationalisations in Latin America do not indicate trend
22%Of SMEs who
were manufacturers
were more
optimistic
EUROPE: Eurozone economic activity saw a further decline
in April, Euler Hermes has reported, with manufacturing at
itslowestlevelinclosetothreeyears.
Deterioration in manufacturing was evident across the
eurozone’s five largest economies – Germany, France, Spain,
ItalyandtheNetherlands.
European bank credit growth to the private sector has also
groundtoahalt,withcredittobusinessinthethreemonthsto
Marchfalling3%onthepreviousthreemonths.
Unemploymentinthezoneincreased160,000inMarchtoa
record high of 17.36 million, equivalent to a eurozone un-
employmentrateof10.9%.
“Expecttheeurozonetoremainaleadingdragontheglobal
economy,”EulerHermessaid.
160,000Increase in number
of unemployed in
March, a total of...
7. 7www.insuranceday.com| Wednesday 9 May 2012
AL & TRADE
catedrenewedconfidenceamongUKcompaniesdespitethedouble-diprecession.
ceMonitorfromICAEW/GrantThorntonhasshownastrongimprovementinconfi-
rgrowthof0.6%forecastforthesecondquarterof2012.
vestment to grow by just 1.4% over the next 12 months, the survey showed. Compa-
higherthanayearago,upfrom3.3%lastquarterandthestrongestgrowthsincethe
of Grant Thornton, said: “Any improvement in the key performance indicators in
orispositive.
ll increasing, but nowhere near the rate seen pre-recession, and businesses are
onment may be the norm for some time. However, we are working with dynamic
high growth in both domestic and global markets, so businesses must continue to
Confederation of British Industry showed a net 22% of small and medium-sized
rerssaidtheyweremoreoptimisticinthethreemonthstoApril.
warned the UK will struggle to keep its economy growing and withstand the deterio-
rope.
mainpositive–ifmodest– in2012andincreasefurtherin2013.
INTOMORROW’SWORLDLOSSINTELLIGENCE:
LIABILITY&SETTLEMENTS
nuary
they adjust to new norm
Eurozone crisis: Increase in insolvencies expected across much
of Europe
EUROPE: Credit conditions in the eurozone remain tight, Atradius has reported, with an
increaseininsolvenciesexpectedacrossmuchofthecontinent.
Thetighteningcreditconditionsaretheresultofpersistentlyhighriskaversionandhighdebt
levelsinboththepublicandprivatesectors.
“In light of continued uncertainty about future writedowns, weak capital positions and
sovereign-relatedrisks,themostrecentevidencesuggeststhecreditchannelisnotyetfunction-
ingeffectively,”Atradiusreportedinitslatestglobaleconomicoutlookreport.
Given the uncertainty about future economic developments, the tightening of loan supply is
expectedtocontinueacrossEurope.
“This is especially troublesome for small and medium-sized businesses, often reliant on bank
financing.Newinvestmentwillbehampered,aswilltherefinancingofexistingloans,”itadded.
War risk: Tensions escalate between two Sudans
SUDAN: Tensions have risen between the
two Sudans after South Sudan invaded the
Heglig oil field north of the country’s bor-
der,reportsEulerHermes.
Although Sudan has recaptured the area,
tensions remain high on issues such as
allocation of oil revenues – most of the oil
deposits are in south but pipelines go
throughSudan.
Euler Hermes reports a build up in mili-
taryactivityandaction.Evenifoutrightwar
is avoided, the credit insurer says economic
damage can be expected as oil production
hasallbutceased.
“Do not expect a quick resolution to the
conflict, which may yet spill over into other
countries,”thecreditinsurerwarned.
Eurozone crisis: Political uncertainty
follows Greek parliamentary election
GREECE: Political instability and the prospect of demonstra-
tions will continue in Greece this week, according to IHS Global
InsightanalystBlankaKolenikova.
“Amid continuous economic and fiscal hardship and months
of austerity, electors will punish the two main pro-bailout
parties – the Panhellenic Socialist Movement and New Demo-
cracy – both of which have dominated the Greek political scene
fordecades,”Kolenikovasaid.
“As many as 10 parties are likely to enter parliament, which
will make government creation
extremely difficult and
raise concerns about
political vacuum and
instability. The
aftermath of the
election might
also be accompa-
nied by mass pro-
tests staged by the
far left, especially if
their surge in support
does not win them a
placeintherulingcoalition.”
10Different political
parties could be
represented in the
Greek parliament
Hegligoilfield
Low Average High
GraphInsolvency riskin2012
Deterioriating
Stable
Improving
Canada
Finland
Germany
Sweden
Japan
NewZealand
Norway
Austria
Netherlands
Switzerland
Australia
Belgium,Spain,
France,Greece,
Italy,Portugal,
UK
Ireland
Luxembourg
Denmark
US
Source:Atradius
Change
Level
10.9%....Unemployment
rate across the
eurozone
17.3 m...Unemployed
in the eurozone,
equivalent to...
8. 8
INSURANCEDAYATLAS
www.insuranceday.com| Wednesday 9 May 2012
Qatar non-life market
T
here is a total of 21 direct
insurance companies
and branches of foreign
insurers licensed in the
Qatar non-life insurance market.
These include five national compa-
nies and four branches of foreign
companies licensed by the Qatari
Ministry of Business and Trade
(MBT) under Insurance Decree
No 1 of 1966; 11 companies and
branches of foreign companies
licensed by the Qatar Financial
Centre (QFC); and one captive
insurance and reinsurance com-
panylicensedbytheMBT.
There were five national compa-
nies in the market in 2011 licensed
by the MBT. These were Qatar
Insurance Company (QIC), Qatar
General Insurance and Reinsur-
ance Company (QGIRCO), Al
Khaleej Takaful Insurance and
Reinsurance Company, Doha
Insurance Company and Qatar
IslamicInsuranceCompany(QIIC).
National companies licensed by
the MBT must be publicly quoted
and fully owned by Qatari share-
holders. The most significant
part of the insurance market – the
government-owned energy sector
– is reserved for them. These risks
are put out to competitive tender,
normallyeverythreeyears.
Energybusiness
The Qatar non-life market not
related to energy business is still
comparatively small. The energy
and petrochemical market makes
up an estimated 50% of the whole
market. It is this dominance of
energy business that largely
accounts for Qatar’s relatively ele-
vated position in world market
rankings compared with countries
with similar populations in the
Gulf Co-operation Council (GCC)
statessuchasBahrainandKuwait.
The MBT has not published
statistics for several years and the
QFC does not publish statistics
regarding the activities of its mem-
bers. The Qatar Statistical Author-
ity publishes some figures related
tobanks,insurancecompaniesand
other business activities (covering
37 firms) but these are not split by
tinuing fierce local and interna-
tional competition leading to
reductions in premium rates in the
principal classes of business. In
any event, such trends are in line
with other energy-dominated
insurancemarketsintheregion.
Thereisinternalmarketactivity
in Qatar in respect of locally
placed facultative reinsurance,
especially as between the national
companies (including facultative
cessions by the latter to the local
captive, Al Koot, owned by Qatar
Petroleum). It is not known
whether the GSDP data takes
account of such activity, which
could result in double counting of
premium from the same original
grosspremium source.
Compared with other GCC states,
the motor account (third-party
liability and casco) constituted a
relatively small proportion of total
non-life business (close to 20.6% in
2008),butitistheareawheremany
of the foreign companies have con-
centratedtheirefforts,sincetodate
they have been denied participa-
tioningovernment-ownedrisks.
Thisremainsthecaseinpractice,
although whether it will do so for
the future is now a matter of some
conjecture, given the dynamic and
liberal economic policies being
pursued in the country in the
recent years, one of the manifesta-
tions of which has been the emer-
gence of the QFC Authority. Since
the latter permits authorised retail
and wholesale carriers and bro-
kers to operate within the local
market, as well as in overseas mar-
kets, some changes to the estab-
lished status quo would appear to
beapossibilityinthefuture.
In the meantime, however,
according to anecdotal evidence
thenationalcompaniescontinueto
have a monopoly of government
business and therefore of most of
the largest accounts. Brokers also
appear to have made only very
limited inroads into the histori-
cally established direct placement
of large risks, even though some
large brokers such as Marsh and
Aon have entered the retail market
inrecentyears.
ComparedtootherGCCcountries,themotoraccountinQatar
constitutesarelativelysmallproportionoftotalnon-lifebusiness,
butitistheareawheremanyoftheforeigncompaniesinthemarket
haveconcentratedtheirefforts
Table1:TotalinsurancemarketpremiumincomeinQatarin2007
Category Life Non-life
Personal
accident
andhealth
Total
market
Premium(Riyalm) 34.9 3,106.7 n/a 3,141.6
Premium($m) 9.6 853.5 n/a 863.1
%oftotalmarket 1.1 98.9 n/a 100.0
Source:AxcoGlobalStatistics
Note:TheMinistryofBusinessandTradehasnotpublishedstatisticsforseveral
yearsandQFCdoesnotpublishstatisticsregardingtheactivitiesofitsmembers.
Table2:Annualgrowthratesofnon-lifepremiumincomeinlocal
currencyinQatarcomparedwithnominalGDPgrowthandinflation
ratesoverthelastfiveto2008
2004 2005 2006 2007 2008
Premiumgrowth(%) 31.8 33.3 140.5 (6.0) (21.7)
NominalGDPgrowth(%) 34.8 35.6 40.6 33.5 37.1
Inflationrate(%) 6.8 8.8 11.8 13.8 15.1
Source:AxcoGlobalStatistics
Table3:Approximatemarketshare(%)bylineofbusinessandby
distributionchannelQatarin2010
Lineof business Agents Brokers Directsales
Non-motor 2 8 90
Motor 20 10 70
Source:AxcoGlobalStatisticsestimatesbasedonmarketopinion
Graph1:Non-lifepremiumsplit
inQatarin2008
++++AMotor
Miscellaneous
Marine,aviationandtransport
Property
Source:AxcoGlobalStatisticsbasedon
datafrominsuranceindustry
associationsandregulatorybodies
activity and therefore do not give
precise indications regarding the
insurance industry in isolation.
Axco has, however, obtained some
market statistical data for the
period 2003 to 2008, sourced from
the General Secretariat for Devel-
opmentPlanning(GSDP)data.
There is another source of data
related to the non-life market pro-
vided by Swiss Re. The data in this
source is not split by class of busi-
ness, however, and is therefore of
somewhatlimitedvalue.SwissRe’s
data does not completely accord
withthatfromtheGSDP.
Reductioninpremiumvolume
Both sets of figures appear to indi-
cate reductions in total market
non-lifepremiumvolumeinrecent
years.Anecdotalevidencefromthe
market suggests in 2008 and 2009
such reductions in volume were
caused primarily by the effects of
the global economic crisis and con-
Graph2:Topfiveinsurersin
Qatarrankedbypremium
incomein2007($m)
QatarInsuranceCompany
QatarGeneral
0 100 200 300 400 500
AlKhaleej
Doha
QIIC
Source:AxcoGlobalStatisticsbasedon
datafrominsuranceindustry
associationsandregulatorybodies
9. 9www.insuranceday.com| Wednesday 9 May 2012
Supervision
To rationalise the supervision and
control of the financial industry,
including insurance, in 2007 the
government appointed an interim
board to oversee the establishment
of an integrated financial supervi-
sory body, to be called the Financial
RegulatoryAuthority(FRA),dealing
withbanking,insurance,assetman-
agement, securities and all other
financial services. The plan was to
co-ordinate by the end of 2008 the
activities of Bank of Qatar’s depart-
ment of banking supervision and
customer service unit, the Qatar
Financial Markets Authority and
theQFCRegulatoryAuthority,butit
has been delayed for unknown rea-
sons and at the time of preparation
ofthisreportit wasuncertainwhen
itwillbecomeoperational.
Companychanges
Al Khaleej became a fully takaful
company effective from January 1,
2010, changing its name from Al
Khaleej Insurance and Reinsurance
Company to Al Khaleej Takaful
Insurance and Reinsurance Com-
pany.Establishedin1978,AlKhaleej
was the fourth-largest company in
the market in 2009, with gross pre-
mium income of Riyal281.9m
($77.4m). In 2010, it recorded gross
contributions of Riyal286.5m, of
which Riyal267.4m was non-life
business(93%oftotalcontributions)
andRiyal19.1mwastakafullifebusi-
ness(7%oftotalcontributions).
Each national company has a
number of tied accounts derived
fromitsshareholders.
The figures in respect of Al
Khaleej, Doha and QIIC include
life business since because these
companies operate in this class of
business according to Islamic
principles, they are permitted by
the MBT to write such business.
Nevertheless, the other national
companieswriteannualgroupper-
sonal accident business covering
death by any cause as a non-life
class of business and this approach
frequently substitutes for group
lifebusinessassuchinthemarket.
It is curious the two largest com-
panies–QICandQCIRCO–suffered
the largest reductions in gross pre-
miumincomein2009and2010.Itis
thought this may have been par-
tially the result of pressure on
major energy risk premium rates
and the effects of the global eco-
nomiccrisisonthelocaleconomy.
Distributionchannels
It is difficult to arrive at accurate
distributionmixestimatesbecause
of the potential impact of the entry
inthelocalmarketforthefirsttime
of large international brokers. His-
torically, brokers have never been
a feature of the market and the
major firms have long been accus-
tomed to writing most of their
major accounts on a direct basis.
Anecdotal evidence clearly sug-
geststhissituationstillpertains.
Competition is, however, un-
questionably accelerating in a soft
marketandthiswillinevitablybegin
to give the brokers opportunities to
break into the major risk retail mar-
ketovertimealthoughevidencesug-
gests the monopoly of the national
companies over government busi-
nessisunlikelytoendsoon.
The presence of international
brokers in the reinsurance place-
ment of all major energy risks and
some major property risks has
already advanced awareness of
risk management in the market
and thus the degree of sophistica-
tionwithwhichthelargestarehan-
dledandplaced.
Bancassuranceisdefinitelygrow-
ing and there is now direct involve-
ment by banks in the market. A
recentexampleistheestablishment
of its own insurer by Doha Bank,
launched in January 2008 with a
licence from the QFC to write all
classesofgeneralbranchinsurance.
Directhandling
The leading families in Qatar have
a range of business interests
including insurance and it is usual
fortheseaccountstobeplacedwith
the in-house insurer on a more or
less“tied”basis.
Otherwise, insurers use a direct
sales force operating from com-
pany head offices in Doha. These
sales agents are either remuner-
atedbyamixtureofsalaryandcom-
mission or salary and bonuses.
Some of these may operate from a
branch office but as Qatar is not a
largecountry,therearenotmanyof
them. The branch offices which
exist are mainly used for servicing
motor insurance; some insurers
have sales offices in the Traffic
Departmentsomotoristscanobtain
cover on the spot when applying
fororrenewingvehicleregistration.
There are no telesales in Qatar
andthissaleschannelisnotthought
tohavemuchofafutureaspersonal
contact is preferred. There is
comparatively little advertising of
insurance products, although some
national companies sponsor sport-
ingeventsforpublicitypurposes.
Bancassurance
All of the major national insurance
companiesworkcloselywithbanks
in respect of distribution. For
example, Qatar Islamic Insurance
works closely with Qatar Interna-
tional Islamic Bank and provides
marine cargo coverage for exports
andimportsfinancedbythebank.
Bancassurance has not histori-
cally been a major distribution
insurance channel in Qatar
although when a bank is lending
money for car purchase it will usu-
allyinsistoninsurancebeingtaken
outwithoneofthenationalcompa-
nies. Banks do not receive commis-
sion on directed business but the
insurers debit them with premi-
ums and the bank also charges an
additional fee to the client account.
The Central Bank does not appear
to impose specific controls as to
how banks deal with insurance
sales and client debiting and Basel
IIIisnotyetofrelevance.
Other bank/insurer relation-
ships involve the granting of auto-
matic personal accident/natural
death cover to those taking out a
personal loan by way of credit life
masterpolicies.
With the emergence of the QFC,
providing as it does significant
marketingopportunitiesforawide
range of financial institutions and
intermediaries, it is expected banc-
assurance techniques will be more
widely deployed in the future.
There certainly appears to be
increasing interest in bancassur-
ance and even direct involvement
bybanksintheinsurancemarket.
Apart from bank connections,
insurers also have alliances with
main car dealerships. These can
issue cover notes for compulsory
motor third-party liability insur-
anceandcanaccessdirectlyinsurer
databasestoenterinsurancedetails.
Affinityschemesperseappearto
be rare, but the QIIC provides a
group personal accident scheme
covering members of the Welfare
Association of Indian Business
AdministratorsQatar(Waibaq).
Agencies
Insurance agents are regulated
under art 20 of Insurance Decree
No 1 of 1966. There is no independ-
ent agency system, although there
isnoprohibitionagainstit.Tobean
agent, the individual must be at
least 21 years of age and a Qatari
national. They must be of good
repute and not an unrehabilitated
bankrupt.Thesameappliestopart-
nersordirectorsofagencyfirms.
More than 400 Qatari and for-
eign individuals have received
authorisationtooperatewithinthe
QFC. The professions of these indi-
viduals are not mentioned, but a
fewmayactasinsuranceagents.
The foreign insurers are all spon-
soredbylocalmerchantfamiliesthat
will support the company with their
ownbusinessandanyintroductions
theycanmake.
Insurancebrokers
Relevant to brokers, the Insurance
Mediation Business Rules 2011
were published in June 2011 by the
Qatar Financial Centre Regulatory
Authority (QFRCA) and came into
effect on July 1, 2011. The rules
coverprincipally:
l Definitions of insurance inter-
mediary/insurance mediation/
captive insurance managers/
clientmoney;
l Prudential requirements relat-
ing to financial resources/
system controls for capital and
asset requirements/minimum
capital and asset requirements/
professional indemnity insur-
ance/filing and deadlines for
the filing of prudential require-
mentreturns;
l Regulations relating to client
money, opening client money
bank accounts, client money
exceptions, treatment of client
money and related fiduciary
duties and the segregation of
clientmoney;
l Performing calculations and
reconciliations/treatment of
materialdiscrepancies;
l Clientmoneydistributionrules;
l Collateral;
l Client mandates/systems and
controlsrelatedtoclientmandate;
l Record keeping/giving informa-
tion/safeguarding documents
andassets;and
l Transitionalprovisions.
Historically, no licences have been
issued to insurance brokers and
they are not contemplated under
the1966insurancelegislation.
The QFC now allows for authori-
sation of brokers to operate in the
local market, however, and
recently the MBT granted a licence
toQatarInternationalBroker,even
though brokers are not contem-
plated within Insurance Decree No
1of1966,sobrokerslicensedbythe
MBT do not appear to be subject to
anyspecificregulations.
Qatar InternationalBroker,with
initial capital of Riyal600,000, is
licensed to provide insurance
broking and risk-management
services to the corporate sector in
Qatar. According to media reports,
the broking firm was established
followingdemandforlocalspecial-
ist insurance broking services by
companies involved in complex
and technical projects within both
privateandgovernmentsectors.
It is headed by David Ezzard,
chairmanofCarrollandPartners,a
Lloyd’s insurance broker. This
development appears to have
raised some eyebrows in the local
market, especially in respect of
brokers that have had to subject
themselvestothestrictcompliance
criteria of the QFC to obtain an
operating licence. The new entity
has an outsourcing contract with
Carroll and Partners to support all
technicalandclaimsoperations.
Therearestringentlicensingand
compliance requirements for bro-
kers established in the QFC. These
requirements are all consolidated
with other financial intermediary
regulations and they are lengthy
andcomplex.Therearenorequire-
ments in QFC rules, however, for
brokers to have professional
indemnityinsurance.n
Thisarticleisbasedonmaterial
suppliedbyAxcoInsurance
InformationServices
(www.axcoinfo.com).Axcoisa
leadinginsurancemarketresearch
organisationandwebpublisher
thatprovidesmarketreportsand
statisticsonmorethan160
countries.Thefieldresearchteams
deliverregularupdatesonall
aspectsofnon-life(property/
casualty)andlifeandbenefits
marketsincludingregulationand
compliance,marketconditions,
hazards,reinsurance,market
backgroundsandbusiness
directories.
Graph3:Developmentofthelifeandnon-lifemarketfortheperiod
2004to2008($bn)
n Life n Non-life
1.0
0.8
0.6
0.4
0.2
0
Source:AxcoGlobalStatisticsbasedondatafrominsuranceindustryassociations
andregulatorybodies
2004 2005 2006 2007 2008
10. 10
INSIGHT
www.insuranceday.com| Wednesday 9 May 2012
Global insurance market sees sustained
L
ast year saw a surge in
mergers and acquisitions
(M&A) in the global insur-
ance industry, with the
deal flow reaching its highest level
fortwoyears.Afteradecliningtrend
through 2009 and 2010, there was a
sharpuptickinactivityinthefirstsix
months of last year, followed by a
sustained level of transaction activ-
ityinthesecondofhalfoftheyear.
According to data supplied by
Thomson Reuters, there were 546
dealsoverallin2011comparedwith
521in2010.Thiswasdespitecontin-
uingbroadereconomicuncertainty,
especially around the ongoing debt
crisisintheeurozoneandthedown-
gradeoftheUSbyStandard&Poor’s.
So, what has changed? Certainly,
rising financial asset values have
given boards greater confidence
andbalance-sheetflexibility.There
has also been more readily availa-
ble finance, including leveraged
deals, which are attracting private
equity firms, although some are
concluding deals with co-equity
investors. The final element is buy-
ers and sellers are more closely
alignedonpriceexpectations.
There is also strong evidence
that – almost irrespective of the
geography in which they are oper-
ating – there is a growing under-
standing insurers need to build
scale to strengthen their balance
sheetsandsustaintheirmargins.
Investors’appetitehasimprovedastheyseekopportunitiesfordealsaroundtheworld
Andrew Holderness and Gary Thorpe,
global corporate insurance team partners
Clyde & Co
Graph1:Volumeofmergerandacquisitiondealsglobally,2009to2011
300
290
280
270
260
250
240
230
220
1H2009 2H2009 1H2010 2H2010 1H2011 2H2011
Source:ThomsonReuters
The US dominated the M&A pic-
ture, accounting for almost half
the deals done. This is backed up
by figures released in a recent
renewal report by reinsurance
broker Guy Carpenter, which
reveal M&A deals in the US
and Bermudian non-life sector
picked up last year in terms of
total dollar value to $12.8bn from
$7.3bnin2010.
In the US, the much-predicted
hardening of insurance prices
seems to be getting under way,
climbing at the fastest rate in
nearly four years, with the market
expecting this trend to continue as
insurers impose greater under-
writing discipline to compensate
for weaker investment returns. A
monthly review of medium-sized
and large-cap US client data by
Marsh early in 2011 has shown a
5.3% average uplift in commercial
property insurance rates in Janu-
ary from a year ago. If the market
hardening is sustained, valuation
levelsforinsurersshouldincrease
and this, combined with a pro-
longed period of reserve releases
coming to an end, could act as a
catalyst for more M&A trans-
actions. There is also pressure
building on some private equity
investors to realise earlier invest-
mentsininsuranceoperations.
US
Graph3:USandBermudiannon-lifeM&Adeals
2010 2011
5.3%Average uplift in commercial property
insurance rates, Jan 2011 versus 2010
$7.3bn
$12.8bn
There is still keen interest in the Lloyd’s
market, with almost all the small-
cap quoted vehicles seeing some inter-
est – with a number of possible suitors
being mooted. In recent weeks we have
seen a number of high-profile trans-
actions. US insurer CNA Financial has
agreed a £143m ($230.7m) deal to buy
Bermuda-based insurer Hardy Under-
writing,whileprivatelyownedspecialty
insurer Canopius will buy Omega Insur-
ance for £163.6m. These deals underline
the enduring strength of the Lloyd’s
market and its attraction to both estab-
lishedinsurersandexternalinvestors.
As companies look to build scale of
operations in the market and diversify
their portfolio of business, the attrac-
tion of having a Lloyd’s platform is
clear. However, with ongoing excess
capital and a soft market, the Lloyd’s
franchise board is setting tough crite-
ria for new entrants and start-ups have
been hard to achieve. This means those
aspiring to underwrite at Lloyd’s are
left with acquisition as the most likely
routein.
However, the number of acquisition
targetsatLloyd’sisreducing–thereare
now only five listed Lloyd’s managing
agencies remaining – so other inter-
ested parties are starting to look at
alternatives such as strategic invest-
mentsasanentrypointintothemarket.
Lloyd’s
11. 11
INSIGHT
www.insuranceday.com| Wednesday 9 May 2012
Slightly more than one-third of
deals in the second half of last year
were in Europe and levels of M&A
look likely to remain high for a
number of reasons. Activity is
undoubtedly being driven by the
imminent arrival of Solvency II.
This has increased focus on capital
requirements and reviews by
insurers and reinsurers of their
books of business – both live and
inrun-off.
Any capital adjustments will
act as a catalyst for a range of
corporate activity; from re-
organisationsandcapitalraisingto
sales and purchases. Buyers
will hope to increase returns by
applying more effective capital-
managementtechniquestocompa-
nies that may have been operating
relatively inefficient structures,
while sellers will be looking to
offload businesses where the
capital requirements do not justify
thereturns.
Europe Activity is undoubtedly
being driven by the
imminent arrival of
Solvency II. This has
increased focus on
capital requirements
and reviews by
insurers and reinsurers
of their books of
business – both live
and in run-off
While activity in the emerging
markets was at a lower level in the
last six months of 2011 compared
withthefirsthalfoftheyear,there
remains a strong consolidation
trend as the markets reach new
levels of maturity. Markets at
earlier stages of development
tended to see numerous start-ups
in the insurance sector, not all of
whichwillhavethecriticalmassto
survive going forward. In these
markets, therefore, a wave of
merger activity is predicted to cre-
atefewer,strongerbusinesses.
In Latin America, for example,
we are seeing a new generation of
insurers with regional and global
ambitions. Companies confront-
ing growth challenges, generated
by pricing pressures and regula-
tory reform, are likely to focus
on their core strengths, divesting
certain assets or markets that do
not fit those strengths while
adopting more aggressive M&A
strategies as they seek access to
newmarkets.
Last year saw the arrival of a
Latin American insurer on to a
larger stage with Colombia’s
Grupo de Inversiones Sur-
americana’s acquisition of ING
ous year, representing 23% of all
global M&A activity in the period.
Although the pace of activity
slowed in the second half, the
Asia-Pacific region posted a year-
on-year increase of close
to 50%, with China
leadingtheway.
China will
remain a top pri-
ority for insur-
ers, both inside
and outside the
region, looking for
growth opportuni-
ties – either entering
the market for the first
time, increasing their existing
market share or improving their
profitability.
Emerging markets
Group’s Latin American insurance
unit for $3.9bn. At the same time,
players from established markets
are looking for opportunities in the
region with Spain’s ZS Insurance
America SL acquiring
Santander Seguros SA
ofBrazilfor$1.6bn.
Unlike the
Americas and
Europe, Asia-
Pacific was rela-
tively unscathed
by the impact of
the global reces-
sion, so it was perhaps
unsurprising to see a
sharp upturn in insurance M&A in
the first half of 2011, with more
deals than the whole of the previ-
Whether they are domestic or
international players, right across
theglobewearehearingourclients
say the same thing: regulators and
Conclusion
customers are looking for strength
and stability in the risk transfer
business. This is sustaining the
appetite for all types of trans-
actions – from fully fledged merg-
ers and acquisitions to more
tactically driven deals to sell off
portfoliosorrenewalrights.n
Graph2:Volumeofmergerandacquisitiondealsbyregionin2011
300
250
200
150
100
50
0
Mena AfricaAsia-PacificEuropeAmericas
Source:ThomsonReuters
$3.9bn
Price Grupo de
Inversiones
Suramericana
paid for ING’s
LatAm unit
Map:Asia-PacificregionM&Aactivityin2011
23%
Asia-Pacific
share of total
2011 M&A
activity
50%
Asia-Pacific
year-on-year
growth in
M&A
M&A activity
12. Insurance/Reinsurance Initiative of
the Year Award open for entries
T
he reinsurance sector’s
track record in produc-
ing initiatives to improve
efficiency, tackle a spe-
cific problem and generally
improve the experience of the
customerislongandimpressive.
Innovation has often been the
hallmark of the reinsurance sector
and it is especially apparent at
times of economic strain. There-
fore, this year, the Worldwide Re-
insurance Awards judging panel,
which comprises industry chief
executives and senior manage-
ment, is expecting particularly
strong contenders in this category,
which are likely to come from
diversebackgrounds.
Lastyear’swinner,VeriskAnalyt-
ics, was recognised for its catastro-
phe index, which provides
industry-wideinsuredpropertyloss
estimates by county and lines of
business, with the judging panel
concluding it was flexible enough to
adapt to individual companies’ par-
ticular risk protection needs and
robustenoughtoprovideagoodesti-
mateofactualdamageacrossperils,
countiesandlinesofbusiness.
However,previouswinnersinthis
category have also been recognised
for developing new products, use of
capital markets, capital-raising initi-
ativesandindustrylobbying.
John Winter, chief executive of
the sponsor of this year’s award,
RuxleyVentures,says:“Fromregu-
lation to natural catastrophes,
reinsurers have formed an essen-
tial component in the insurance
industry. They have an impressive
track record of innovation to
accommodate both expected and
unexpected market change. In
recent times this has been more
importantthanever.
“The insurance community is
proud of those whose technical
excellence and entrepreneurial
spirit has helped to improve our
industry’s image and efficiency.
Ruxley is delighted to support this
recognitionofindustryexcellence.”
With competition expected to be
fierce, interested parties or nomi-
nators should allow themselves
sufficient time to create a compel-
ling awards entry. It could make all
the difference to your company’s
success in a category in which
emerging triumphant will truly
mark you out as a leading industry
innovator among your peers, not
forgettingyourcompetitors.
This year’s award entry deadline
isFridayMay18.Fortunatelyenter-
ing the Worldwide Reinsurance
Awardshasneverbeeneasier.
Using the criteria for the Re/
Insurance Initiative of the Year,
explain in 500 words or fewer why
yourcompanyshouldwinaWorld-
wideReinsuranceAward.
Then complete the online entry
form and submit your entry at
www.reinsuranceawards.com.
Supplementaryinformationwill
be accepted if it supports points
madeintheentry.
The 19th Worldwide Reinsur-
ance Awards ceremony will once
againbeheld attheprestigiousThe
Dorchester hotel in London, on a
date that is already marked in
most insurance and reinsurance
industry practitioners’ calendars
– September 5, the Wednesday
before the start of the Monte Carlo
Rendez-Vous.
For sponsorship opportunities
and table sales contact +44 (0)20
7017 4027. For further information
on the Re/Insurance Initiative of
the Year category or any other
awards-related matters contact
+44(0)2070175173.n
EntriesarenowbeingsoughtfortheRe/InsuranceInitiativeofthe
Yearcategory,whichwillrecognisetheprojectthathasgenerated
themostpromisingchangetoasignificantareaofbusinessatthis
year’sWorldwideReinsuranceAwards
Greg Dobie
Managing editor
Criteria for the award
Thisyear’swinnerwillshineby:
l Showinginnovationthroughaparticulartransaction,dealor
partnership;
l Educationordevelopmentofanewmarketorproductarea;and
l Examplescouldincludedevelopinganewproduct,useofcapital
markets,acapital-raisinginitiativeorindustrylobbying
Roll of honour
2011VeriskAnalytics
2010GuyCarpenter&
CompanyCascat
2009SolvencyII
2008TheCaribbeanCatastrophe
RiskInsuranceFacility
2007TheNationalIndemnity
ReinsuranceAgreement,
Equitas
Ruxley Ventures was established
in December 2001 and specialises
in acquiring and running off US asbestos, pollution and health hazard
(APH) claims. Ruxley’s expertise and business model allows the transfer
ofAPHportfoliosfrombothactiveinsurersandrun-offentities.
Since 2001, Ruxley has completed transactions with some of Europe’s
biggest insurance names. Ruxley Ventures owns two authorised non-life
insurance companies: Aviation & General Insurance Company and City
GeneralInsuranceCompany.
www.ruxleyventures.com
About the sponsor
“The insurance community is proud of those
whose technical excellence and entrepreneurial
spirit has helped to improve our industry’s image
and efficiency”
John Winter
Ruxley VenturesVeriskAnalyticspicksupthe
InitiativeoftheYearAwardat
the2011event
