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CHL, the parent company of Conduit Re, has provided a trading update for the January 1, 2024 renewal season, highlighting an increase in business with estimated ultimate premiums written rising by 38% year-on-year.

The company reported that estimated ultimate premiums written for the January renewals amounted to $582.4 million, a surge from the $421.2 million recorded in the same period in 2023. This growth is attributed to strong renewal business with key partners and the addition of high-quality new business.

Conduit Re also observed an increased focus on property and specialty segments, leading to a higher weighting in these areas. Despite this shift, the company maintained a selective approach to casualty lines to ensure stable combined ratio expectations year-over-year. A 3% risk-adjusted rate change, net of inflation, was also reported, indicating a further hardening of the portfolio rate.

The company also announced that it secured its outwards retrocession program, with no significant changes in net Probable Maximum Losses (PMLs) on January 1. In terms of underwriting activities, the breakdown of estimated ultimate premiums written by class of business was as follows:

• Property: $311.0 million (54% of the total, up 58% year-on-year)
• Casualty: $101.4 million (17% of the total, down 10% year-on-year)
• Specialty: $170.0 million (29% of the total, up 52% year-on-year)
• Total: $582.4 million (100% of the total, up 38% year-on-year)

The renewal business January 1 showed an overall risk-adjusted rate change, net of inflation, of 3%. The property segment experienced a 5% rate change, the casualty segment saw a -2% change, and the specialty segment had a 2% change.

Gregory Roberts, chief underwriting officer at Conduit Re, noted the 2024 renewals season was marked by high renewing business levels and positive rates in the property and specialty books.

“We continue to see high submission levels of attractive business and, being selective around lines, rates and structure, we continue to grow the portfolio significantly without sacrificing quality. We saw more attractive risk versus reward in the property and specialty segments and therefore we focused growth in these classes over casualty,” Roberts said.

Conduit Re is set to announce its 2023 year-end financial results on February 21, 2024.

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Chaucer Insurance Company DAC and Chaucer Syndicates have filed a motion in the United States Bankruptcy Court for the District of Delaware, connected to the Chapter 11 bankruptcy proceedings of Vesttoo and its affiliates.

This legal action revolves around Chaucer’s request for permission to submit a late objection to certain claims against Vesttoo Bay XXIV Limited Partnership (“Bay XXIV Debtor”), which are argued to be unenforceable for voting purposes on the bankruptcy plan.

Chaucer has sought to recoup $257 million from Vesttoo.

In filed documents, Chaucer pointed out that it had an exclusive relationship with the Bay XXIV Debtor and alleged that other claims filed against it often lacked a direct relationship or justification for being enforceable.

Aon, Markel, and Clear Blue are among businesses that have sought to claim against the Bay XXIV Debtor, according to filings.

Chaucer argues some claims against Vesttoo Bay XXIV are unrelated and unenforceable

Chaucer’s argument centered on the disallowance of what it said were unrelated claims against the Bay XXIV Debtor, emphasizing the importance of maintaining the integrity of the voting process for the chapter 11 plan.

The motion set out what Chaucer alleged was the unique and segregated nature of the Bay XXIV Debtor’s business and assets, with the insurance company arguing against the inclusion of claims that could be deemed to have direct linkage or were unenforceable.

The request made by Chaucer included several reliefs, such as the authorization to file its objection late, additional time for claimants to file motions if necessary, and procedural accommodations to ensure a fair and equitable resolution of claims in relation to the bankruptcy case of the Bay XXIV Debtor.

Claims against Vesttoo Bay XXIV debtor

Claims against the Vesttoo Bay XXIV debtor, according to the motion filing, include:

• Chaucer filed Claims No. 50821 and 50823 against the Bay XXIV Debtor. These claims relate to damages and liabilities arising from reinsurance transactions, reinsurance contracts, and premium payments
• JPL filed Claim No. 49 against the Bay XXIV Debtor. The stated amount was $3,174,724,832.00, covering advances and reinsurance amounts across all segregated cells.
• Numerous Aon Claims were filed against the Bay XXIV Debtor.
• Proventus filed Claim No. 20159 against the Bay XXIV Debtor. The stated amount was $655,055,007.41, representing Proventus’s aggregate claim against the Debtors collectively.
• Porch Group Inc. and Porch.com, Inc. filed Claim Nos. 50730 and 50794 against the Bay XXIV Debtor. The stated amount was $400,000,000.00 collectively.
• Markel filed Claim No. 20092 against the Bay XXIV Debtor. The stated amount was $146,986,118.42.
• United Automobile filed Claim No. 20240 against the Bay XXIV Debtor. The stated amount was $29,544,211.00.
• Clear Blue Specialty Insurance Company, Clear Blue Insurance Company, Rock Ridge Insurance Company, and Highlander Specialty Insurance Company filed undetermined claims (Claim Nos. 50514, 50563, 50667, and 50746) against the Bay XXIV Debtor.
• Confidential claimants filed undetermined claims (Claim Nos. 20249, 20278, 20282, and 50855) against the Bay XXIV Debtor.

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The global insurance group Howden has acquired Laurie Ross, a Scotland-based personal and commercial lines broker.

Laurie Ross, established in 1973, operates from seven branches in and around Glasgow, focusing on providing insurance services for cars, homes, taxis, vans, and businesses in key business areas.

The acquisition aligns with Howden’s goal of advancing its high street reach and supporting the growth of Howden UK & Ireland in Scotland.

Changes following acquisition

The acquisition will enable Howden’s high street branches to see a significant boost, reaching a total of 117, with an extensive network spanning over 200 centres across the UK.

Kelly Ogley, CEO of Howden consumer and local commercial, welcomed Laurie Ross managing director June Lynch and her team to the Howden team.

“Laurie Ross is a fantastic business and, culturally, it’s a perfect fit as we’re both committed to providing a local advised service that delights our clients, as well as working with and supporting our local communities,” Ogley said.

Lynch commented: “I am delighted that Laurie Ross is now part of Howden providing us with an even greater opportunity to enhance our capabilities and reach. Joining a well-known UK branch network, with values that mirror our own excellent reputation for unwavering commitment to client satisfaction, it’s exactly the sort of partnership we were looking for.”

Zurich-based organization PERILS has released its latest assessment of industry losses stemming from the floods and storms induced by low-pressure systems Babet (Viktor) and Aline (Wolfgang) across the British Isles and northwestern Europe from October 18 to 22, 2023.

According to a Press release, the updated estimate now stands at €683 million, a notable increase from the initial evaluation of EUR 509 million announced on December 4, 2023, approximately six weeks after the end of the weather events. The primary impact was felt in the United Kingdom, predominantly attributed to flood-related incidents.

PERILS gathered information from affected insurance markets including Ireland, the United Kingdom, Germany, Denmark, and Norway. The majority of losses, totaling £467 million, occurred in the UK and were primarily associated with flooding.

Flooding resulting in industry losses

The extended period of severe weather, caused by the interaction of low-pressure systems Babet and Aline, led to incessant rain and high winds in the region. A stationary weather pattern resulted from a high-pressure system over Scandinavia blocking the low-pressure systems, causing prolonged heavy rains and high winds. This situation overwhelmed river and drainage capacities in Ireland, Scotland, northern England, and Wales, resulting in flash and river flooding.

While flood losses dominated the insurance industry impact in the UK and Ireland, wind damage played a lesser role. By contrast, Germany, Denmark, and Norway experienced wind damage as the primary contributor to insurance losses. Notably, storm surge damages along the Baltic coast in Germany and Denmark were significant. However, these losses are not extensively covered in Germany, and Denmark relies on the government scheme “Naturskaderådet” rather than private insurance for such events.

An updated market loss estimate for the Babet-Aline Floods and Storms is anticipated on April 22, 2024, marking six months after the conclusion of the weather events.

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Marine insurer West P&I Club has announced the launch of its new product, West Piracy Protection, designed to assist shipowners in navigating the increased risks of piracy in areas such as the Gulf of Aden and the Gulf of Guinea.

The product specifically targets situations where vessels enter designated war and piracy “breach” areas, which are known for heightened piracy risks. West Piracy Protection aims to fill gaps in traditional war policy coverage, which may not fully address the nuances of piracy incidents in these regions, including cases where ships are held for short periods.

Key features of West Piracy Protection include indemnities for ransoms and related expenses, such as loss during ransom transit, fees for response consultants, legal experts, and costs associated with reputational risk.

The policy also provides support for employees directly affected by piracy incidents. It offers additional coverage options, including loss of hire for a maximum of 14 days post-vessel release, addressing the aftermath of a seizure.

This insurance product is a collaborative effort between West P&I Club and the Hamilton Global Specialty underwriting platform, underwritten by Syndicate 4000 at Lloyd’s. It also integrates expertise from Crisis24, known for its crisis response capabilities, and the global law firm HFW, which specialises in piracy response.

West Piracy Protection is available as an addition to the West War policy or as a standalone product. It is also accessible to non-West clients. The launch of this product complements West’s existing portfolio, which includes West Hull (H&M) and West War, both introduced in 2023.

Richard Turner, head of product development at West, highlighted the unique aspects of the product, noting its relevance to the changing patterns of piracy incidents.

“Our new product will stand out from the market, not just for the extended coverage but also the embedded expertise we can offer with Crisis24 and HFW. Through this new offering, we look forward to providing West Members and other shipowners with the support to manage the ever-present threat of piracy,” Turner said.

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Enhanced scrutiny of financial institutions in the wake of the Silicon Valley Bank (SVB) and Credit Suisse failures could lead to unnecessary regulatory pressure being piled on insurers with consequences for policyholders and industry, the Global Federation of Insurance Associations (GFIA) has warned.

Insurers are wary of a repeat of regulatory actions seen following the 2008 financial crisis, when there was a tendency for the insurance sector to find itself encompassed within banking regulations, one example being efforts to tackle systemic risk under cumbersome G-SII designations.

In the aftermath of the 2008 crash, the Financial Stability Board (FSB) designated several large insurers as G-SIIs, marking them out as globally systemically important. It later rowed back on this in 2019, when the IAIS’ Holistic Framework came into play, recognizing that most insurers do not typically present a systemic risk.

Insurers fear being caught up in banking and NBFI regulation following SVB and Credit Suisse failures

Insurers are now uneasy around the potential for a repeat as regulators once again zoom in on banks following last year’s SVB and Credit Suisse collapses.

Regulators and policymakers have also become increasingly concerned around the growing role of non-bank financial institutions (NBFIs), with parts of the cohort sometimes referred to as ‘shadow banks’. NBFIs have been seen to include a broad swathe of business and initiatives including crypto-currencies, investment and money market funds, private equity (PE) funds, venture capitalists, and micro-loan organizations.

Insurers fear that they may be bundled into actions to tackle regulation and transparency around NBFIs that are less highly regulated, have more limited public reporting requirements and are “highly interlinked” with other areas of the economy and financial systems.

The GFIA, which represents the interests of (re)insurers from 70 countries, has urged policymakers not to include insurance in any broad brush NBFI changes in the wake of the SVB and Credit Suisse failures, and the organization remains “cautious” on the potential for future “additional and unnecessary” regulations, Angus Scorgie, chair of the GFIA’s systemic risk working group, told Insurance Business.

IMF report sees elevated vulnerabilities in corporate and non-bank financial sectors of major economies #economy #GFSR https://t.co/62naWZ1fEY pic.twitter.com/UBXgZhnJXB

— IMF (@IMFNews) October 16, 2019

National and global groups zoom in on banks and non-banks post-SVB and Credit Suisse crises

National and global organizations – including the European Insurance and Occupational Pension Authority (EIOPA), the International Insurance Association of Insurance Associations (IAIS), the Organization for Economic Co-operation and Development (OECD), and the Financial Stability Board (FSB) – have focused in on the interrelation of banks and non-banks in the wake of the SVB and Credit Suisse collapses.

NBFIs have played an increasingly critical role since the 2008 financial crisis and accounted for nearly 50% of global financial assets as of April 2023, according to International Monetary Fund (IMF) figures. With growth has come increased vulnerabilities and enhanced interconnected risk.

Archegos Capital – the banking and Credit Suisse impact

Failings at Credit Suisse, which has since been bought out by UBS, have in part been linked to NBFI business Archegos Capital’s 2021 $20 billion securities fire sale that sent stock prices spiralling downwards.

Credit Suisse took a $5.5 billion loss following the private hedge fund’s default, according to a 2021 Credit Suisse special committee report, even as it grappled with fallout from the failure of Greensill Capital. Morgan Stanley and Goldman Sachs, which also had Archegos Capital exposure, also saw their stock prices tumble.

Given its private status, Archegos Capital was not subject to US Securities and Exchange Committee (SEC) oversight or disclosures.

GFIA calls for “unique” approach to insurance regulation

The GFIA has contended that insurance functions differently to NBFIs such as Archegos Capital as well as banks, and regulators must acknowledge the “unique” way in which it operates and is already regulated, including on solvency and transparency, to avoid any impending action being detrimental not just to insurance companies, but to customers.

“Failing to recognize the important ways in which the insurance sector is unique and applying inappropriate and unnecessary regulation, threatens to undermine the effective functioning of the sector that then impact policyholders who then pay higher costs and offered fewer products,” Scorgie said. “Incorrect regulation not only increases compliance costs and burdens, but also undermines good risk management practices, whilst reducing risk taking and investment capacity.”

Insurers that do engage in banking-like activities may trigger “valid” systemic risk concerns, the GFIA did caveat; however, it pointed to fully funded insurance liabilities, meaning insurers do not rely on borrowed money to pay claims, as setting much of the sector well apart from banks that rely on highly liquid liabilities to provide loans, which it said creates an “inherent mismatch”.

“Policymakers should not apply banking regulations to insurers and they should not include insurers in their concerns about other financial sectors,” Scorgie said. “For regulatory and supervisory purposes, insurers should be recognized as a separate and distinct category, and policymakers should refer to insurers, banks and other financial sectors separately when discussing the financial services landscape.”

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The proposed £500 million (approximately $631 million) acquisition of Premier League club Everton FC is facing uncertainty amid regulatory scrutiny involving the potential buyers’ corporate entities, with both the Bermuda Monetary Authority (BMA) and Utah insurance regulators raising concerns about the viability of the deal.

The club’s prospective owners, 777 Partners, are dealing with regulatory issues. According to Josimar, a major funding source for 777 Partners is its Class E Bermuda life reinsurer, 777 Re. This reinsurer, focused on life insurance and annuity business, is now under the administrative control of the Bermuda Monetary Authority (BMA).

As per a report from The Royal Gazette, these developments have cast significant doubt on 777 Partners’ ability to complete the Everton takeover. The BMA’s action reportedly restricts access to approximately £2.4 billion in funds necessary for the acquisition.

Moreover, 777 Partners is facing additional legal challenges and high-interest borrowing rates, as reported by Josimar. The group’s American insurance subsidiary, Haymarket, is also under scrutiny from the Utah Insurance Department.

Everton FC has encountered additional challenges, facing new disciplinary actions from the Premier League while appealing earlier sanctions. The club breached the Premier League’s profit and sustainability rules for the previous year and has reportedly violated these rules again this season, leading to potential further penalties.

The club is in the process of moving from Goodison Park to a new stadium at Bramley-Moore Dock, scheduled to open for the 2025-26 season. However, the cost of this project has escalated from £500 million to an estimated £760 million.

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Bermuda is remembering Audrey Ann DeSilva, a re/insurance professional and a trailblazing figure in its political spheres.

DeSilva passed away on January 1, 2024, at the age of 84, an obituary from The Royal Gazette confirms. DeSilva, recognized as the first president of the Business and Professional Women’s Association of Bermuda and a notable member of the United Bermuda Party, was born on October 5, 1939.

DeSilva’s career was marked by significant contributions to women’s advocacy and business leadership. In 1976, she partnered with cricket legend Alma “Champ” Hunt as the United Bermuda Party’s candidates in Devonshire North, despite the constituency being a stronghold of the Progressive Labour Party. Although the campaign was challenging, DeSilva and Hunt showed commendable effort.

Professionally, DeSilva was an accountant and had been at the helm of the Business and Professional Women’s Association of Bermuda since its inception in 1975. Lauren Hart-Bell, the archivist for BPW Bermuda, commended DeSilva for her tenacity, professionalism, and leadership, acknowledging her as a pioneer for the organization.

DeSilva was also involved in the International Women’s Year in 1975, appointed by the premier to investigate the status of women in Bermuda, which led to the founding of BPW Bermuda. Her efforts were part of a global movement to empower women in business and professional realms.

Reflecting on a reinsurance career

In addition to her advocacy work, DeSilva had a diverse career trajectory, starting with secretarial training and progressing through various roles, including at the Bank of Butterfield and several positions in the burgeoning insurance and reinsurance industry in Bermuda.

Her roles also encompassed positions in the re/insurance industry, including Bellefonte International Insurance, Transcon Insurance, and American International Reinsurance, among others.

She remained actively involved with BPW Bermuda until 1977, organizing talks and seminars on various topics and creating profiles of significant Bermudian women. DeSilva also maintained her political involvement with the United Bermuda Party into the 1980s and served on several governmental boards.

In the mid-1980s, DeSilva, along with her second husband, Leonard, ventured into the beauty industry, expanding Shapers Hair and Beauty Salon. She retired in 2007, leaving behind a legacy of dedication and service in both the professional and political arenas.

DeSilva is survived by her children Michael Benevides, Tammy, Geri, and stepson Leonard DeSilva II, marking the end of a life dedicated to advocacy, business leadership, and public service.

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Chaucer has announced the appointment of Richard Milner as its new group chief executive officer, pending local regulatory approval.

In this new role, Milner will oversee the strategic development and management of the company, which includes Syndicate 1084, specialty nuclear Syndicate 1176, and Chaucer’s insurance company based in Dublin.

As per his LinkedIn, Milner brings a wealth of experience from his previous executive roles at Aspen and Axis Re, where he honed his global re/insurance underwriting expertise.

“I am delighted to be appointed group CEO of Chaucer,” Milner said. “Chaucer’s reputation, which is built on the experience and expertise of its talented people, innovation, and a disciplined approach to risk management, makes it a natural next step for me. I am excited about the opportunities ahead and the chance to be part of something special.”

“I am delighted Richard has accepted the role and I look forward to working with him,” said group chairman Paul Jardine. “Over the course of his career Richard has distinguished himself as an exceptional leader, earning the respect of his peers and across the industry. I am confident that we will all benefit from his tremendous leadership skills, strong underwriting background, and deep understanding of international markets as we continue our development as a leading global underwriting group.”

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Swiss Re’s projections for 2024-2028 suggest that total insurance premiums in India will increase by 7.1% in real terms annually, significantly outpacing the global average of 2.4%, as well as the averages for emerging (5.1%) and advanced (1.7%) markets and positioning the country as the fastest-growing insurance sector among G20 countries.

India’s economy stood out in 2023 despite its challenges, with an estimated growth rate of 6.7%, surpassing that of other major economies. The country’s growth trajectory is primarily fueled by private consumption and fixed investment.

Despite these positive trends, the country faces potential economic risks. These include the impact of interest rate hikes, the possible effects of El Nino, rainfall deficits, and geopolitical tensions, particularly in the Middle East, which could affect oil prices.

In the realm of insurance, India shows a promising outlook. Boosted by economic growth, an expanding middle class, innovative approaches, and regulatory support, the insurance market in India is expected to witness substantial growth. In 2023, insurance premium growth in India slowed slightly compared to the previous year. This moderation reflects ongoing adjustments in the post-COVID-19 era.

Life insurance premium growth is estimated to have decreased to 4.1% from 5.9% in 2022. This slowdown is attributed to diminishing pandemic-related risk awareness and recent changes in tax norms affecting high-value policies. However, robust growth is expected in the life insurance segment for 2024-2028, with a forecast 6.7% increase in premiums. This growth will be supported by the middle class’s rising demand for term life coverage and the country’s young demographic, coupled with the increasing adoption of insurtech within the industry.

Non-life insurance premium growth also saw a slight decline from 9.0% in 2022 to an estimated 7.7% in 2023. Factors such as high interest rates and rising retail and medical inflation presented challenges to growth in this sector.

Nevertheless, non-life premiums are expected to grow at an annual average of 8.3% during 2024-2028, driven by factors including economic expansion, improvements in distribution channels, governmental support, and a favorable regulatory environment.

The Indian government and insurance regulator have implemented several initiatives to foster growth in the insurance industry. Notably, the mission “Insurance for all by 2047”, launched in November 2022, aims to ensure that every citizen and enterprise in India has adequate insurance coverage.

Additionally, efforts are underway to attract foreign investment into the market. These reforms, coupled with India’s robust economic growth, are anticipated to further propel the development and expansion of the insurance sector.

India’s rapidly growing economy and insurance market, however, also increases its exposure to natural catastrophes. The country is prone to various natural disasters, including earthquakes, floods, tropical cyclones, droughts, and wildfires.

Despite this high exposure, insurance protection against natural catastrophe risks remains low. Swiss Re’s resilience analysis reveals that a staggering 93% of these exposures are uninsured. The economic losses from natural disasters in India have been escalating, largely driven by economic growth and rapid urbanization. Major Indian cities, which are densely populated and have high asset values, face heightened vulnerability to multiple natural hazards.

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