Insurance Jottings

Brexit Makes It Harder for Fintech, Financial Services Firms to Recruit Top Talent: Report

Leaving the European Union is making it harder for fintech firms in Britain to recruit top talent, a report said on the 19th March, threatening to slam the brakes on a £7 billion (US$9 billion)growth sector just as EU states step up competition.

 

The Fuelling Fintech report from TheCityUK, which promotes Britain as a financial centre, and recruitment firm Odgers Berndtson, said fintech and other financial services firms must work harder to secure the skills they need.

 

Fintech employs 60,000 people and investment grew by 154 percent in 2017.

 

The report offers ways to generate more “home grown” tech talent as immigration faces curbs after Brexit.

 

“Since the Brexit vote in June 2016, there has been a significant decrease of graduates coming to the UK from France and Germany in particular,” said Miles Celic, chief executive of TheCityUK.

 

Up to a fifth of the skills needed in recent years has come from EU countries, and UK hirers are now seeing a net migration of tech graduates back to the bloc.

 

Companies struggle to fill roles in coding, cloud computing, machine learning, software development, cyber, artificial intelligence and blockchain, the report said.

 

“There is a risk that those talented migrants with the skills needed by the UK will leave before these skills can be replaced by home-grown talent,” Mr Celic said.

 

The report recommends copying pharmaceuticals and manufacturing by forging long-term partnerships with academia to create a pipeline of skilled people – and also looking beyond graduates.

 

Better data gathering on the skills needed and better retraining of existing employees are also needed, the report said.

 

Britain has emerged as a leading fintech hub in Europe in recent years but now faces increased competition from EU cities such as Berlin, Paris and Luxembourg who can offer access to the bloc’s vast single market.

 

Britain’s future access to the EU market could remain unclear for some time to come.

 

“The current shortage of tech talent is a strategic issue for the UK’s financial and related professional services industry, yet little has been done to quantify our current and future skills need,” said Nathan Bostock, chief executive of Santander UK bank and chair of TheCityUK’s working group on trade and investment.

 

(Article dated the 19th March)

 

Hamilton acquires Lloyd’s Pembroke Managing Agency, Ironshore Europe from Liberty Mutual

Bermuda-based Hamilton Insurance Group has signed a definitive agreement with Liberty Mutual Group to acquire the Pembroke Managing Agency platform at Lloyd’s and Ironshore Europe DAC (IEDAC).

 

Bermuda bodies including ABIR, BDA and BIMA seek removal from EU tax blacklist

Industry groups on Bermuda including the Association of Bermuda Insurers & Reinsurers (ABIR)have pledged their support to efforts by the Bermuda government to get the country removed from the European Union’s so-called blacklist list of “non-cooperative” jurisdictions as quickly as possible.

In what clearly came as a shock to Bermuda, on the 12th March the EU included Bermuda on a blacklist of 15 countries it said fail to meet good tax governance standards.

Bermuda was moved from the so-called grey-list to the blacklist for having failed to follow up on commitments previously made but not taken.

The Bermuda Premier David Burt responded by admitting being blacklisted was a “setback” but he added that he is also confident Bermuda will soon be removed from the blacklist.

 

John Huff, President & CEO of the ABIR said that while there would be no immediate or tangible impact on re/insurers on Bermuda it was important the status was changed as soon as possible and the EU recognises the importance of Bermuda’s re/insurers to the EU.

“We have every hope today’s EU determination will prove temporary. While ABIR understands there is no immediate tangible impact to Bermuda or its markets, we are appreciative of the Bermuda government’s commitment to remedy the designation as soon as possible. There is bipartisan and industry consensus in Bermuda to meet international standards,” Mr Huff said.

“The Bermuda re/insurance market is a valuable partner in the EU and has paid over US$72 billion to EU policyholders and cedants over the past 20 years. ABIR is confident policymakers will act in the best interests of consumers to ensure continued level-playing-field access to our market’s claims-paying capital and risk-management expertise.”

 

In a show of unity on the island, a number of other groups and representative bodies also came out in support of the country’s regulatory regime and said they would work to change the EU status.

“Bermuda is a world-respected platform for business that has always adhered to the gold standard,” said Roland Andy Burrows, CEO of the Bermuda Business Development Agency (BDA).

 

“We stand firmly behind that reputation, and we commend our government’s consultative approach with the EU to date. Our industry stakeholders are committed to working with the government and regulators to ensure Bermuda is recognised as fully compliant. We look forward to a positive result as soon as possible.”

Sylvia Oliveira, Director, Bermuda International Long Term Insurers & Reinsurers (BILTIR), added: “The government of Bermuda assures us it is working at the highest levels to rectify the unfortunate placement of Bermuda on the EU’s list of non-cooperative jurisdictions. As a staunch member of Bermuda’s global business market, BILTIR stands firmly behind the island’s top-tier reputation. Our collective view is that Bermuda is a leader in tax transparency and compliance and continues to be a great place to do business.”

Kathleen Bibbings, President, Bermuda Insurance Management Association (BIMA), said: “Bermuda’s captive insurance sector, like other industry partners throughout our market, has a long, proven track record of cooperation and transparency, and as a jurisdiction, we’ll work with the EU to meet requirements. We remain confident that Bermuda’s full compliance will be confirmed shortly.”

Patrick Tannock, chair, Association of Bermuda International Companies (ABIC), added:
“ABIC has been supportive throughout this process and is committed to continuing to work collaboratively with other industry groups to support the Bermuda government in its efforts to meet EU requirements.”

Craig Bridgewater, chair, Alternative Investment Management Association (AIMA) network in Bermuda, said: “As the advocate for Bermuda’s asset management sector, the AIMA network in Bermuda fully affirms this jurisdiction’s efforts to consistently meet the highest global standards on tax cooperation and transparency. We support the Bermuda government’s determination to have that long-standing reputation recognised and to achieve a positive EU designation for Bermuda.”

Keith Robinson, Chair, Society of Trust and Estate Practitioners (STEP) Bermuda, added: “The Bermuda trust industry is well-regulated and Bermuda rightly regarded as a leading trust domicile. Our industry will continue to support the efforts of the government of Bermuda to see Bermuda removed from the list of ‘non-cooperative’ jurisdictions at the first opportunity.”

In the past year, the EU Commission assessed 92 countries on their tax transparency, good governance, real economic activity, and whether the country had a zero corporate tax rate.

The EU welcomed action taken by 60 countries to address and resolve the concerns raised adding that “over 100 harmful regimes were eliminated”, while the list was cited as having a positive influence on internationally agreed tax governance standards.

However, EU finance ministers said they were forced to blacklist 15 countries based on the Commission’s findings. These included American Samoa, Guam, Samoa, Trinidad and Tobago, and US Virgin Islands, which made no commitments to change since the first blacklist was published in 2017. Barbados, United Arab Emirates and Marshall Islands have also been added to the list for failing to follow up on pledges to change.

Aruba, Belize, Bermuda, Fiji, Oman, Vanuatu and Dominica were moved from the ‘grey list’ to the blacklist for not abiding by commitments they had made.

Changes to EU legislation mean EU funds cannot be channelled or transited through entities in countries on the blacklist.

 

Luxembourg Attracts 50 Firms for Their Post-Brexit EU Headquarters

Luxembourg said it is “very pleased” that about 50 asset managers, insurers, and other financial firms have looked to the Grand Duchy as a foothold in the European Union once the UK leaves the bloc.

 

“We are very pleased with what has happened in terms of asset managers, insurance companies, fin-tech companies,” Luxembourg Finance Minister Pierre Gramegna said in an interview with Maria Tadeo on Bloomberg Television in Brussels. “Quite a few have chosen Luxembourg.”

 

The list of insurers, funds and banks which are selecting Luxembourg as a post-Brexit site for operations includes insurance giant American International Group Inc, private-equity firm Blackstone, RSA Insurance Group Plc, US insurer FM Global, Lloyd’s insurer Hiscox Plc and asset manager M&G Investments. JPMorgan Chase & Company plans to move some London-based bankers to Luxembourg.

 

“It’s about 50 companies who have decided for Luxembourg,” Mr Gramegna said.

 

He said the EU had “gone the extra mile” in helping UK Prime Minister Theresa May to make the divorce agreement more palatable to the British Parliament ahead of the key vote on the 12th March.

 

China Re launches renewable energy consortium at Lloyd’s, co-led by Canopius and Travelers

China Re, China’s biggest reinsurer, has launched a renewable energy consortium at Lloyd’s, focused on project specific reinsurance for the construction and operation of offshore wind farms in mainland China.

 

China Re’s Syndicate 2088 manages and co-leads the consortium along with Canopius Syndicate 4444 and Travelers Syndicate 5000. It is also supported by Chaucer Syndicate 1084, a member of the China Re Group, Axis Syndicate 1686 and GCube Underwriting.

 

The consortium covers construction all risks (CAR), erection all risks (EAR) and third-party liability (TPL) and can provide capacity of up to US$225 million per risk.

 

Janet Helson, CEO of China Re Underwriting Agency 2088, said: “We are tremendously proud to be launching this consortium. It’s the first of its kind, enabling international involvement in the Chinese renewable energy market and a great example of the collaboration that exists between the London and Chinese markets.”

 

Oliver Litterick, renewable energy underwriter at China Re Syndicate 2088, added: “China is investing heavily in renewable energy so there is a compelling opportunity for Lloyd’s to be involved. This consortium will be able to access China Re’s domestic client base of offshore wind specialists to bring this new and diverse premium to the London market.”

 

According to the company, the offshore sector in China has benefited in recent years from a commitment by President Xi Jinping to provide US$360 billion to renewable power development by 2020.

 

This is intended to improve health and reduce CO2 emissions which, according to the International Renewable Energy Agency, will provide savings of more than US$55 billion a year to the Chinese economy.