Insurance Jottings

Asta to launch Agora syndicate

Lloyd’s third-party managing agent Asta said on the 22^nd September that it received “in principle” approval from the Lloyd’s Franchise Board to establish and manage Agora syndicate 3268.

In 2015, Asta and leading marine insurance provider Skuld announced the launch of Special Purpose Arrangement (SPA) 6126, specialising in the property direct & facultative, binder and treaty markets. After two successful years of business, the Lloyd’s Franchise Board has approved the transition of SPA 6126 into a syndicate.

Asta expects the syndicate to commence underwriting on or after the 1^st January 2018.

Syndicate 3268 has planned gross premium of £98 million for 2018 and its active underwriter will be Mike Pritchard, who has served as chairman and CEO of SPA 6126 since its creation. He has more than 30 years of industry experience and a successful track record in the syndicate’s specialist classes.

Agora syndicate 3268 will continue to underwrite property business with a focus on direct & facultative, binders and treaty business worldwide. It will be privately capitalised by a number of industry players, according to the press release.

Asta Capital is the parent company of Asta Managing Agency which is responsible for nine syndicates with capacity under management in 2017 of approximately £1 billion, including Syndicate 1729 (Dale Underwriting Partners), Syndicate 1897 (Skuld) and Syndicate 2357 (Nephila).

Pioneer and Asta to establish Lloyd’s syndicate

Pioneer Underwriters, which operates as a risk carrier and managing agent currently with the backing of Liberty Syndicate 4472, said that it has received approval “in principle” to establish its own Lloyd’s of London syndicate.

Working alongside Asta, the third-party managing agent at Lloyd’s, Pioneer is moving forwards to operate its own capacity source in the form of a stand-alone Lloyd’s syndicate.

Lloyd’s has approved the syndicate in principle and Pioneer and Asta will continue to work with the Lloyd’s market to gain permission for its Syndicate 1980 to begin underwriting business from the 1^st January 2018.

Pioneer said there will be no change to its underwriting operations after the new syndicate is launched, meaning it will continue to share risks with Liberty’s syndicate as well.

It said that, “this development of a stand-alone Lloyd’s syndicate marks an important next step in Pioneer’s development and supports the long-term strategic objectives of the business.”

Starr to relocate EU base in Malta

The Maltese insurance sector has received a significant boost as the government revealed that Starr Companies, the US-based global insurance and reinsurance group led by former AIG CEO Hank Greenberg, will relocate its European base to Malta.

Reports in the international media say that the company hopes to be operational by the 1^st January 2018, describing Malta as “a popular jurisdiction for captive insurers” like Volkswagen, BMW and Renault.

The company has had a presence in the London market since 2006, when it began writing aviation business through a Lloyd’s Syndicate; however, the history can be traced back to December 1919, when Cornelius van der Starr founded an insurance agency in Shanghai, China.

JLT Re partners to build solar energy output insurance product

Broker JLT Re has partnered with data repository and risk management provider kWh Analytics to create a risk transfer product insuring solar energy output.

San Francisco-based kWh reduces the overall cost of financing by providing a Solar Revenue Put which reduces the risk of loss for lenders, thereby enabling lenders to reduce debt service coverage ratios for asset owners.

JLT Re and kWh worked together to secure a preferential relationship with a global, investment grade insurance company to offer a product insuring US$100 million of coverage.

The relationship will bring liquidity to the growing solar energy industry, which is currently estimated at US$500 billion with another US$500 billion slated to be completed in the next few years – creating the next US$1 trillion asset class.

“Kudos, our Solar Revenue Put, improves lender terms and reduces the cost of capital for asset owners by guaranteeing up to 95 percent of solar production with investment-grade balance sheets,” said Richard Matsui, CEO, kWh Analytics.

CCRIF reaches US$100 million milestone with Irma loss triggers

The Caribbean Catastrophe Risk Insurance Facility (CCRIF), the World Bank sponsored risk which that provides cat cover to its Caribbean members based on parametric triggers, has now paid over US$100 million following Hurricane Irma.

The facility – which is celebrating its tenth anniversary this year – has made seven separate payments to the governments of different islands totalling US$31.2 million following the hurricane.

The largest Irma related individual payment was US$14.9 million to the Turks & Caicos Islands followed by US$6.8 million to Antigua & Barbuda and US$6.7 million to Anguilla.

In contrast to traditional insurance products based on an indemnity of loss, parametric triggers occur regardless of loss when an agreed trigger occurs. According to the CCRIF, the payments were made as a result of excess rainfall and also the severity and passage of Hurricane Irma.

With two months of the hurricane season to go, 2017 is already destined to be the largest loss year for the facility exceeding the US$31.1 million paid last year.

Haiti – one of the world’s poorest countries – was the largest recipient in 2016, receiving payments of US$23.3 million following Tropical Cyclone Matthew.

CCRIF, which is a not for profit organisation, was formed in the aftermath of the devastation caused by Hurricane Ivan in 2004 and began incepting risks in 2007. Each member pays an annual premium directly related to the amount of risk it transfers to CCRIF and can purchase coverage up to a limit of approximately US$100 million for three different hazards: cyclones, earthquakes and excess rainfall.

Developed with the support of the World Bank, the CCRIF received a grant from Japanese government, together with contributions from various countries including Canada, UK, France and the EU.

Crucial to the CCRIF scheme is that members receive payment within 14 days of the trigger event occurring, thereby providing immediate funds to assist with disaster recovery.

CCRIF CEO Isaac Anthony said on the 20^th September): “The injection of short-term liquidity that CCRIF provides when a policy is triggered is not intended to cover all the losses on the ground following a disaster, but is designed to allow governments to reduce their budget volatility and to provide much needed capital for emergency relief such as clearing of debris and other clean-up activities, restoring critical infrastructure, and most importantly providing humanitarian assistance to the affected population.”