Insurance Jottings

Updates at The Standard Club

The Standard Club’s London team moved into a new office at:

The Minster Building
21 Mincing Lane
London

EC3R 7AG

This has been the registered address since the 11^th April 2018, when Standard House was vacated.

With effect from 9^th July 2018 The Standard Club Europe Ltd is re-named The Standard Club UK Ltd.

Neon launches Nordic-focused marine business in Copenhagen

Specialist Lloyd’s insurer Neon has launched Orca Insurance Agency, a Lloyd’s approved coverholder which will underwrite on behalf of Neon Syndicate 2468.

Headquartered in Copenhagen and led by CEO Lars Hendriksen, Orca will focus on the Nordic markets, offering comprehensive marine risk solutions. This includes offering insurance products, as well as risk consultancy and engineering services for the shipping industry.

Mr Hendriksen has over three decades of experience in the marine industry. He has held a number of senior management roles within the sector including at Codan Marine RSA Scandinavia and the Survey Association.

Additionally, Henrik Pilegaard has been appointed chief underwriting officer of Orca. He has 16 years of marine insurance experience. Throughout his career, he has held senior roles in underwriting, risk management and claims.

Neon said risk engineering capability and technical expertise will sit at the core of Orca’s offering and it will offer clients dedicated in-house claims handling.

Martin Reith, Neon group CEO, commented: “Copenhagen is an excellent base to build out our marine capabilities and establishing a significant presence here is core to our growth aspirations. Orca will not be just another marine business, however. The team shares Neon’s philosophy and commitment to a technical approach, based on considerable experience and expertise. The combination of this and their relationships in the local market – and ability to offer both underwriting and risk consultancy – represents a unique client proposition.

“This will be further complemented by Neon’s entrepreneurial and innovative approach and, over the coming years, we anticipate adding new classes and underwriting teams to the Orca platform, as Neon continues its international growth.” Mr Reith added.

Advent pulls the plug on hull and cargo book

Fairfax-owned Lloyd’s syndicate Advent has become the latest carrier to pull out of marine classes, after it stopped writing hull and cargo lines at the end of June.

It is understood that Syndicate 780 will continue to write some marine business, however.

International Underwriting Association Publishes Brexit Contract Continuity Clause

A Brexit clause has been published by the International Underwriting Association (IUA) to help companies manage insurance contracts as the UK leaves the European Union.

The Brexit Contract Continuation Clause aims to clarify how firms will continue to pay claims despite any business disruption caused by a situation in which adequate transitional arrangements are not agreed.

Insurers currently relying on the EU financial services passport to conduct cross-border business between the UK and continental Europe may not be licensed to continue providing cover, or pay claims, on existing contracts after March 2019, IUA explained.

The new clause, therefore, allows a risk to be placed with both a UK domiciled insurer and a ‘contingent’ EU-based insurer. In the event of any Brexit difficulties, this contingent insurer will step in and fulfil any policy obligations that the original carrier is no longer able to cover.

“The Brexit process continues to be quite uncertain in the nature of its final outcome and the future trading relationship trading relationship between the UK and remaining EU states,” said Chris Jones, the IUA’s director of market and legal services.

“A number of other market clauses have already attempted to address the issue of contract continuity, but it has proved difficult drafting a solution which covers all political eventualities. Another problem has been catering for the many different corporate structures, both currently present in the London market and planned by firms as part of their Brexit contingency responses,” Mr Jones continued.

“Consequently, a key concern of the IUA’s new clause has been to ensure that the legal principles underpinning the contingent insurer approach are sound and that the terminology and intent of the wording is as clear as possible,” he said.

The IUA Brexit Contract Continuity Clause (reference IUA 09-077) has been drafted by the association’s Clauses Committee at the request of its Brexit Working Group. It is published alongside an accompanying commentary which outlines in detail circumstances in which it may be of use. Whilst the clause is primarily intended for insurance business, it could also, in principle, be used for reinsurance risks.

The clause will be freely available from the IUA clauses website. Its use is not compulsory and firms are free to adopt and adapt its provisions as they see fit.

Managing agents prefer Lloyd’s Brussels

Managing agencies slightly favour the use of the Lloyd’s Brussels subsidiary (57 percent) over the creation of their own EU subsidiary (43 percent), according to a survey with Lloyd’s market chief operating officers  commissioned by the Lloyd’s Market Association (LMA).

Lloyd’s has started hiring staff for its Brussels subsidiary which will involve positions in finance, operations, compliance, HR, and underwriting.

Lloyd’s had decided to create an insurance company in Brussels to ensure it can continue to serve the European Economic Area (EEA) after the UK leaves the European Union. In May Lloyd’s received licence approval from the National Bank of Belgium for its EU subsidiary Lloyd’s Insurance Company.

Lloyd’s Brussels will be able to write all non-life risks from the EEA to ensure its partners can continue to have seamless access to the specialist policies of the Lloyd’s market.

Brexit is seen as an internal and market-level priority issue for 2018 by a majority of COOs, according to the LMA survey.

The research also shows that within market modernisation initiatives, delegated authority transformation has the highest priority, and 93 percent of COOs believe straight-through processing is a viable option for delegated authority relationships.

All respondents are planning systems upgrades in 2018. Almost 77 percent plan to upgrade Coverholder reporting systems and processes.

AmTrust shutters its Lloyd’s marine book

AmTrust has jettisoned its Lloyd’s marine business – which is thought to be worth up to £30 million (US$39.9 million) – in a shock decision.

It is understood that the cargo, hull and marine liability lines of business have all been axed.

Price Forbes launches reinsurance subsidiary

Price Forbes has launched a new reinsurance subsidiary which will specialise in treaty and facultative business.

The new broking entity, Price Forbes Risk Solutions Ltd (PFRS), will operate as an Appointed Representative of Price Forbes and exist as a subsidiary operating within the international and specialty segment of Price Forbes’ parent company, The Ardonagh Group.

PFRS will be led by former Tysers Re and RK Harrison broker David Barrie and will focus both treaty and facultative reinsurance business, with the aim of maximising opportunities across the group.

Markel Gets Licence to Underwrite Reinsurance on Lloyd’s India Platform

Markel International, the specialist insurer, has been granted a licence by the Insurance Regulatory and Development Authority of India to write reinsurance business in the country.

Capacity will be provided by Markel’s Syndicate 3000 at Lloyd’s and written through the Lloyd’s India platform.

Markel India will provide treaty and facultative reinsurance to local Indian insurers, in a broad range of commercial classes. It will initially focus on marine, energy, contingency, and professional and financial risks.

Markel India is being led by Deepika Mathur, who has had some 20 years’ experience in the Indian insurance industry, most recently as executive vice president at HDFC Ergo, the Indian/German joint venture general insurance company, with responsibility for the casualty and financial lines business.