Insurance news

New York-based alternative asset manager Third Point has announced the launch of Malibu Life Reinsurance SPC (Malibu Life Re), a new life and annuity reinsurer established in the Cayman Islands.

Malibu Life Re will concentrate on asset-intensive reinsurance solutions and has already secured an agreement with a prominent US annuity provider. This arrangement involves reinsuring $3 billion worth of annuity products through a quota share flow agreement.

Third Point will support Malibu Life Re with investment management and strategic services, leveraging its experience in excess spread sourcing across various credit asset classes and portfolio management.

The strategic services will encompass corporate development, risk management, and asset liability management, with a focus on developing tailor-made, liability-driven investment programs.

Daniel S Loeb (pictured above), founder and CEO of Third Point, expressed optimism about the new reinsurance venture.

“We are excited to form Malibu Life Re to provide attractive capital solutions in the life and annuity space in partnership with leading insurers,” Loeb said. “We expect that the nimble, multi-asset class investment strategy we have designed over almost thirty years can be leveraged to deliver favorable long-term risk adjusted returns for Malibu Life Re’s clients and partners.”

Supporting the launch, Lazard served as the financial advisor, and Oliver Wyman provided actuarial support. Legal advisory was handled by Debevoise & Plimpton LLP and Conyers Dill & Pearman LLP, with Artex Risk Solutions acting as the insurance manager.

Malibu Life Re operates as an independent, Class B(iii) reinsurer, owned by Third Point and its affiliates. It aims to establish reinsurance relationships with leading life and annuity providers, capitalizing on Third Point’s expertise in investment and risk management.

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Reinsurance Group of America (RGA) has announced its financial results for the first quarter of 2024, reporting a net income of $210 million, or $3.16 per diluted share.

This is a decrease from $252 million, or $3.72 per diluted share, recorded in the same period last year. However, the company’s adjusted operating income rose to $401 million, or $6.02 per diluted share, up from $349 million, or $5.16 per diluted share, in the previous year.

Net foreign currency fluctuations positively impacted net income to RGA shareholders by $0.07 per diluted share and adjusted operating income by $0.01 per diluted share compared to the prior year.

During the quarter, RGA’s consolidated net premiums reached $5.4 billion, marking a 58.8% increase from the first quarter of 2023, despite a $12 million adverse net foreign currency effect.

When excluding this currency impact, consolidated net premiums saw a 59.2% rise. This quarter’s performance included a notable $1.9 billion from a single premium pension risk transfer transaction in the US financial solutions business.

Investment income, excluding spread-based businesses, grew by 7.0% primarily due to new business. The average investment yield remained steady at 4.70%, closely matching the 4.71% from the previous year’s first quarter. This stability was due to higher new money rates balancing out a decrease in variable investment income.

The effective tax rate for the quarter stood at 22.0% on pre-tax income, which was slightly below the anticipated range of 23% to 24%, mainly attributed to tax benefits in foreign jurisdictions. Similarly, the tax rate on pre-tax adjusted operating income was 22.4%, also below the expected range.

Tony Cheng, president and CEO of RGA, remarked on the quarter’s performance, highlighting the group‘s “excellent results” which heralded a great start to the year.

“Our traditional business performed very well and the financial solutions business also had a good quarter. On our in-force transactions, we had a record quarter of $737 million deployed, and we continued to see strong momentum in organic new business activity. Our balance sheet remains strong, and we ended the quarter with excess capital of approximately $0.6 billion. Based on favorable business conditions and RGA’s global leadership position, we are optimistic about the future and expect to continue to deliver attractive financial results over time,” Cheng said.

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Talent attraction remains among the most pressing challenges in the insurance industry today.

Organizations are proactively seeking to fill roles left by an increasing number of retiring skilled workers. But does the claims sector have a “structural disadvantage” in the game?

Rohit Verma (pictured), CEO of Crawford & Company, thinks so.

“If you went to a school and asked 10 to 20 people where insurance lies as a career choice, it often doesn’t make the top five, sometimes not even the top 10,” he told Insurance Business.

“There’s a spectrum of jobs in the insurance industry, from brokers to claims adjusters, but a smaller pool of candidates interested in claims roles.”

This disproportionate spread of interest is compounded by the episodic nature of claims and an aging workforce, according to Verma.

“Because of the episodic nature of claims, you can have two hurricanes one season and then multiple seasons with less activity. This fluctuation makes it challenging to match supply and demand,” said Verma.

“Individuals may hesitate to enter the space due to concerns about sustained work opportunities and a lack of full understanding of the industry.”

Will artificial intelligence (AI) replace claims adjusters?

Verma dismissed concerns about artificial intelligence (AI) replacing human roles in insurance. Despite the rise of AI, the industry still faces a significant need for qualified adjusters, according to the CEO, with estimates suggesting demand for 50,000 adjusters in the US alone in the next year.

Verma emphasized the need for a balanced approach, acknowledging the role of technology in enhancing processes while underscoring the continued importance of human judgment and intervention.

“AI has its place, but to expect that it’ll just eliminate jobs and people will be replaced by robots, I think that is a bit too far-fetched at this point,” he said.

The Crawford CEO highlighted the critical role that claims handling plays in the insurance process, saying carriers face potential reputational risks if claims are not managed promptly and effectively.

“A policy is just a promise that if a claim arises, we’ll be there for them,” Verma said. “If we lack the people to deliver this product, we fail to fulfill our promise.

“When a claim occurs, it’s often one of the worst days for individuals or businesses, adding moral devastation to physical damage if help is delayed due to a shortage of human resources.”

Verma also touched on strategies for improving the speed and efficiency of claims handling, emphasizing the importance of intelligent triage and inspection processes. He underscored the need for a human touch in these processes to ensure claims are handled efficiently and effectively, particularly during catastrophes.

He outlined a three-step approach: “Ingest, intelligently triage, and inspect.”

This method, he explained, ensures that claims are processed quickly and accurately, minimizing delays for policyholders.

Addressing the negative industry narrative

Apart from structural hurdles to attracting and retaining talent, Verma noted there’s still work to do dismantling of the negative perception of the insurance industry.

He said the industry should aim to bring awareness of career opportunities to high schools, progressing through associate degree programs and into college programs.

“First, insurance is the engine of the economy. Every job is represented in the insurance business, so we have mathematicians, statisticians, engineers, architects, nurses, doctors, and lawyers. I don’t know of any other industry with that wide a representation of professionals,” Verma said.

“Second, the industry is generally much more resilient to economic downturns. Insurance remains a stable and reliable career path despite economic shifts, making it an attractive option for those seeking long-term security.”

Looking to the future, Verma emphasized the importance of tapping into talent globally to address capacity issues during crises. He highlighted Crawford’s approach to viewing the organization as one unified global workforce, deploying resources based on expertise rather than geographical boundaries.

“We view our organization as one single global workforce that we deploy based on their capability and expertise,” Verma said, emphasizing the importance of a cohesive approach in meeting clients’ needs worldwide.

Do you agree with Verma’s views on the talent challenges in the insurance industry? Please share your thoughts in the comments.

Healthcare organisations across the globe are increasingly at risk from cyberattacks, according to a recent report by data security researcher Rubrik Zero Labs.

The report, “The State of Data Security: Measuring Your Data’s Risk,” provides a comprehensive overview of the cybersecurity landscape, emphasising the risks posed by growing digital infrastructure and cloud adoption. It outlines challenges in safeguarding sensitive data and presents strategies to address the evolving nature of cyber threats.

The study, conducted by Wakefield Research, surveyed 1,625 IT and security decision-makers from companies with 500 or more employees. Respondents included CIOs, CISOs, and VPs/directors of IT and security from 10 countries. The survey supplemented Rubrik telemetry from over 6,000 clients, spanning 22 industries and 68 countries, covering 42 exabytes of secured storage and 38 billion sensitive records from January to December 2023.

Commenting on the findings, Rubrik Zero Labs head Steven Stone (pictured) said: “The more we talk about cyber threats like ransomware, and its impact on industries like healthcare, the more we can collaborate to minimise the risk calculus and ultimately beat cyber attackers trying to impede our businesses.”

Sensitive data in the healthcare industry

The report noted that healthcare organisations manage 22% more data than the global average. Their data estates expanded by 27% in the past year, and sensitive records grew by 63%, well above the global average of 13%.

A typical healthcare organisation holds 42 million sensitive records, which is 50% more than the global average.

Ransomware attacks’ impacts on healthcare organisations

According to the report, ransomware attacks affect nearly five times more sensitive data in healthcare organisations than the global average.

Each successful ransomware event impacts 20% of a healthcare organisation’s sensitive data, compared to 6% for other industries.

Cloud adoption in the healthcare industry and security blind spots

The report found that cloud storage increased to 13% of organisations’ data in 2023, up from 9% in the previous year. Meanwhile, on-premises storage declined from 77% to 70%.

With cloud integration, hybrid environments faced significant cyberattacks, impacting SaaS data (67%), cloud storage (66%), and on-premises storage (51%).

Cyberattacks’ impact on IT and security teams

Focusing on the impacts of cyberattacks on IT and security teams in healthcare organisations, the report revealed that 94% of IT and security leaders experienced a significant cyberattack, averaging 30 attacks annually, with a third including ransomware.

Among healthcare organisations that faced a ransomware attack, 93% reported paying a ransom, with 58% motivated by threats to leak stolen data.

Focusing on the impacts of cyberattacks, 96% of IT and security leaders reported emotional or psychological effects from such incidents, including 38% worrying about job security. Additionally, 44% of organisations reported leadership changes following cyberattacks, up from 36% in Rubrik Zero Labs’ previous report.

Global law firm Kennedys has announced its latest partner promotions, adding 17 new partners to its international roster.

This move brings the firm’s total number of partners to 349. The appointments will take effect on May 1.

New partners at Kennedys

The newly promoted partners include nine women and eight men. The promotions span various regions across the firm’s global network: Asia Pacific (APAC), EMEA, North America, and the UK.

Asia Pacific

• Bertha Ng (Hong Kong)
• Nathan Buck (Sydney)
• Con Kakakios (Sydney)

EMEA

• Reem Bangina (Dubai)
• Mehdi Seadon (Dubai)
• Rishi Sengupta (Dubai)

North America

• Ryan McInerney (Basking Ridge)
• Nate French (Chicago)
• Colin Willmott (Chicago)
• Hilary Simon (New York)
• Shain Wasser (San Francisco)

The UK

• Lauren Gosnell (Manchester)
• Elisa Peachey (London)
• Laura Madders (London)
• Philip Kusiak (London)
• Rebecca Maby (London)
• Vicki Teasdale (London)

See LinkedIn post here.

Talent development at Kennedys

Kennedys senior partner Nick Thomas said the firm is committed to talent development and progression.

“The success of the firm is down to the exceptional talent of our people. We are committed to developing our people and rewarding their contribution to our success. We pride ourselves on having clear routes to success and work hard to invest in our people, and so it is incredibly rewarding to be able to welcome this year’s cohort into the partnership,” he said. “Each and every one of them has worked hard to reach this milestone in their career, bringing depth and breadth of knowledge to their colleagues and clients. I look forward to watching their careers progress further.”

Chief people officer Alan Demirkaya highlighted the importance of a nurturing culture: “We place a real emphasis on investing in and nurturing our talent, as our people are our business. By providing clear career progression, a supportive culture, and an inclusive working environment where they can thrive. We want to watch their careers grow with us as we become the destination for talent in the legal market.”

QBE Insurance Group Limited (QBE) has appointed Nicola Schroder as its new group head of sustainability.

Schroder’s new role includes overseeing sustainability governance, implementing related strategies, tackling human rights and modern slavery initiatives, and steering social impact via the QBE Foundation.

Who is Nicola Schroder?

Schroder (pictured) brings two decades of experience in various sectors, including insurance, engineering, property, and banking. During her tenure at QBE, she has advanced its sustainability agenda, most recently as head of environment and transition, where she developed a net-zero operations roadmap.

Schroder holds a bachelor of science and a master’s degree in environment, governance, policy, and communication from the University of Melbourne.

She also chairs the Insurance Council of Australia’s (ICA) Net Zero Working Group, serves on the UNEPFI Principles for Sustainable Insurance board, and is part of QBE’s AUSPAC Foundation Committee and the ICA’s Climate and Resilience Committee.

Nicola Schroder’s contributions to QBE

Viv Bower, QBE’s group executive for corporate affairs and sustainability, noted Schroder’s significant contributions over the past five years, particularly her leadership in driving the company’s sustainability strategy.

“Nicola has been instrumental in driving our sustainability initiatives over the last 5 years. Her deep expertise and leadership will be invaluable as we continue to integrate sustainability across the enterprise,” Bower said. “Together with our dedicated team, Nicola will play a key role in advancing our sustainability agenda.”

QBE is now recruiting to fill Schroder’s previous position.

At its recent annual general meeting, Munich Re approved a dividend of $15 per share for the 2023 financial year, up from $11.60 in 2022, resulting in a total dividend payout of approximately $2.0 billion.

Additionally, Roland Busch, Julia Jäkel, Victoria Ossadnik, and Jens Weidmann were elected to the reinsurer’s supervisory board.

During his address to the shareholders, Joachim Wenning, chair of Munich Re’s board of management, reflected positively on the company’s performance.

“2023 is the latest pinnacle in a winning streak of good years,” Wenning said. He also credited the success to the “Ambition 2025” strategy, which has consistently led Munich Re to exceed its annual profit targets since its inception.

Wenning reported a net result of $4.6 billion for the past financial year and projected a result of $5.0 billion for 2024. He expressed optimism about the continuing favorable conditions for property-casualty reinsurers and the outcomes of recent contract renewals, which he described as positive in terms of profitability and portfolio quality.

“What’s more, we don’t anticipate this trend to weaken during this year’s remaining renewal rounds,” he said.

However, Wenning shifted to express concerns regarding the economic challenges in Europe, particularly in Germany. He highlighted issues such as demographic shifts, fewer working hours compared to other countries, high energy costs, excessive bureaucracy, complex authorization processes, and high corporate taxes as factors impairing Germany’s economic strength.

To address these challenges, Wenning advocated for a “comprehensive turnaround program” that includes bold decision-making, budget reprioritization, and potentially expanded government borrowing to stimulate investment and work incentives.

He concluded by suggesting the need for an ambitious long-term plan, referred to as Agenda 2030, 2035, or 2040, to rejuvenate Germany’s economic landscape.

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Russia’s state-owned reinsurer has facilitated financial support for three Russian insurance firms to gain Indian regulatory approval to provide marine insurance to tankers, according to sources from a Reuters report.

This development comes as Moscow aims to bolster trade with India amidst the backdrop of Western sanctions due to its actions in Ukraine.

The sanctions imposed by the US and its allies have significantly restricted Russia’s access to the global services network, including insurers and brokers. As a result, Russian companies Sogaz Insurance, Alfastrakhovanie, and VSK Insurance have now joined Ingosstrakh in being authorized by India to offer marine insurance, as indicated by an announcement on the Indian shipping regulator’s website.

The approval of the three insurers by India followed after the Russian National Reinsurance Company (RNRC), backed by the Russian government, provided financial guarantees. This is the first instance of RNRC’s involvement in enabling these Russian insurers to be recognized in India, Reuters said.

Significantly, the RNRC has faced sanctions from the UK and European Union in 2023, which could complicate its international engagements.

The Directorate General of Shipping in India did not provide a response to inquiries about this matter.

In contrast, an Ingosstrakh spokesperson released a statement regarding the supposed backing.

“Ingosstrakh is not expanding its maritime insurance activities to India. Our relationship with India in the marine insurance industry has spanned over 57 years, dating back to 1967 when we opened our office in Mumbai,” the spokesperson said.

The newly approved Russian insurers, which specialize in protection and indemnity (P&I) insurance, do not belong to the Europe-based International Group (IG) of P&I clubs, which covers about 90% of the global ocean-going shipping tonnage.

“A due procedure has been followed (by the Indian shipping regulator) for including these new entities in the list of non-IG companies that can provide insurance,” a source said to Reuters.

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Allianz Partners, a major global insurance and assistance provider, has disclosed its financial outcomes for the year 2023, setting new records for revenue and operational profit.

Performance of Allianz Partners’ health segment

In the health business segment, revenues surged by 23.4% to reach 2.959 billion euros. This growth was propelled by organic expansion, increased engagement in the small and mid-size enterprise (SME) sector, and forging new alliances with local insurance entities.

A significant role in this growth was played by the enhancement of the digital health services through the Lumi health ecosystem, which served over a million users in the past year.

Performance of Allianz Partners’ travel insurance segment

The travel insurance division reported an 8.0% increase in revenues, totalling 3.297 billion euros. The resurgence of travel activities in the Asia-Pacific region, particularly following the lifting of travel restrictions in Australia and New Zealand, contributed to this rise.

See LinkedIn post here.

Additionally, sustained advancements in North America and Europe helped bolster the segment’s performance. The recent introduction of the allyz mobile app marked a significant stride in the company’s digital outreach.

Performance of Allianz Partners’ mobility and assistance segment

The mobility & assistance segment showed a revenue increase of 11.2%, amounting to 2.902 billion euros. This was led by the robust performance of the roadside assistance and home businesses across Europe and Latin America.

Despite stability in the mobile device and digital risk (MDDR) business, remarkable growth was noted in markets such as India, Spain, and France.

Allianz Partners businesses’ growth in 2023

CEO Tomas Kunzmann reflected on the year’s achievements, noting significant strides in all key business areas, including travel, health, assistance, and mobility services.

“2023 was another record year for Allianz Partners in terms of total revenues and profits, following the record results in 2022. The travel business continues to thrive, our healthcare business saw tremendous growth and there was excellent momentum in our assistance and mobility business globally. As a result, our continued growth is built on solid foundations as we invest in the digitalisation of our services while ensuring the human touch and the highest levels of customer satisfaction,” he said.

Allianz Partners’ performance forecast

Looking forward, Kunzmann remains optimistic about the company’s trajectory, attributing its strong position to the dedication of over 22,000 global employees. He emphasised the strategic goals set for 2030, aiming to double the company’s revenues through continuous innovation and a focus on digital enhancements.

“Thanks to the commitment of our team of more than 22,000 employees around the world, I am very positive about the outlook for the coming years and that we are on track to achieve our goal of doubling revenues by 2030,” he said.