Insurance Jottings

Markel creates standalone marine/energy divisions as profit rises

Specialist insurer Markel International has created two new standalone divisions for marine and energy, and appointed Chris Fenn and Julian Samuel as managing directors of the businesses.

Markel claims to have seen impressive growth of its marine and energy division under the leadership of executive director Paul Jenks, with GWP (gross written premium) of around US$400 million.

Markel’s London wholesale businesses will now be formed of three divisions, marine, energy and specialist and financial lines, the latter led by James Hastings.

Renewed hope for ‘palatable and affordable’ insurance with new cyber risk pool

Singapore is to set up the world’s first commercial cyber risk pool.

Singapore is setting up the world’s first commercial cyber risk pool as part of efforts to develop the region’s capacity to deal with threats from cyber-attacks, Finance Minister Heng Swee Keat announced at the 15th Singapore International Reinsurance Conference earlier this week.

“The pool will commit up to US$1 billion in capacity, and bring together both traditional insurance and insurance-linked securities markets to provide bespoke cyber coverage,” he said.

Mr Heng also noted: “To date, twenty insurance firms have indicated their interest to participate in this pool, which would allow corporates in ASEAN and Asia to be protected against cyber-related losses.”

Commenting on the news, Singapore-based Star Hub leader of enterprise risk management and insurance, Nigel Tay said: ”From my conversations with risk managers, justifying the high costs of procuring cyber insurance was a key challenge. Surprisingly, many that I have spoken to have not procured some form of cyber coverage. This is despite all the attention cyber is receiving.

”The formation of the said commercial cyber risk pool shows an added political dimension but the key would be sourcing cyber insurance coverages that are palatable and affordable.”

Mr Tay said he is hopeful the new risk pool could give the insurers the added confidence to write cyber risks for more clients at potentially better rates. ”Hopefully this will translate into a deeper knowledge base and better appreciation of a new state of things.

”This move seems to be beneficial for the insurers and corporate risk managers. A key point to note is that cyber insurance coverages are only one part of an overarching strategy to address cyber risk and exposures and should not lead to a false sense of security,” he added.

OMERS sells stake in Lloyd’s insurer Brit

Canadian pension fund OMERS has reduced its holding in the Lloyd’s insurer Brit to 12 percent after receiving US$264.6 million for a separate 11.2 percent holding.

LIIBA outlines key Brexit challenge

The chief executive of the London and International Insurance Brokers Association (LIIBA) has told insurance brokers that the key challenge facing them post-Brexit remains the uncertainty around the proposed models for brokers to maintain access to London for European risks.

Speaking today at a joint LIIBA-Lloyd’s Brexit seminar, Christopher Croft, chief executive of LIIBA, said that while yet unconfirmed media reports of a UK-EU financial services deal were positive, the lack of clarity around the Insurance Distribution Directive (IDD) meant that, to date, no European Union regulator had confirmed a belief that a wholesale broking model would be acceptable.

Mr Croft said: “Most regulators are expecting EIOPA to provide clarity for brokers but our understanding is that EIOPA does not intend to so. This is because the scope of IDD is a matter for the European Commission. However, the Commission is unlikely to do anything that could be seen to be prejudicing the negotiations.”

In order to put the matter before the Commission, Croft asked brokers to keep the London market and its representative bodies appraised of their plans and to continue working closely with the Corporation of Lloyd’s.

Commenting on media reports of a UK-EU financial services deal, Mr Croft said: “These as yet unconfirmed reports that an agreement on market access has been reached are a positive sign – and mirror messages we are getting from both sides of the negotiation.

“But if, as reported, the deal is based on regulatory equivalence we await the detail of how this will cater for insurance intermediation where no such concept exists. We are however hopeful as this challenge was acknowledged by government when John Glen responded on behalf of the Prime Minister to LIIBA’s letter on the subject.”

On a related note, Mr Croft said he had learned that the German Insurance Buyers’ Association had raised with the German government the need to access London post-Brexit.

Mr Croft added: “Our message to politicians remains twofold: we need a political solution to contract certainty and we need EU clients to retain access to London post-Brexit. It’s a message we believe is now resonating in some important areas.”

(Article dated the 1^st November 2018)