recap
REINSURANCE MAGAZINE’S WEEKLY
F R I D AY 1 7 A P R I L 2 0 1 5
<Valued Opinion, Vital Content>
www.re360.co
M A R KE T B U LLE TI N
Exor seeks market
entry with Partner Re bid
The proposed merger between
Axis and Partner Re has been
thrown into doubt after a rival all
cash bid by Italian corporation Exor.
Exor, which controls carmaker
Fiat Chrysler Automobiles, and
had a stake in Partner Re at its
launch, has put in an offer for the
entire shareholding of Partner
Re at a price of $130 per share
valuing the company at $6.4
billion and a 16% increase on the
Axis deal which is an all share
transaction.
Exor said their offer would not
need any additional funding outside
of its existing balance sheet and
saying the deal would be completed
by the end of the year.
It has come as a shock to Axis
which had agreed its deal with
Partner Re and its President
‘‘
and CEO said the firm was
still determined to see the deal
complete.
“AXIS Capital is fully
committed to its combination
with PartnerRe Ltd.,” said Albert
Benchimol. “Our transaction
with PartnerRe brings together
two independently strong
companies to create one broadly
diversified global specialty
insurance and Reinsurance
Company whose scale, capital
and enhanced market presence
will form a powerhouse within
the industry.”
Partner Re issued a short
statement. It said: “The Board
will announce its position
regarding the EXOR proposal
following its review, which will be
completed in due course.” >
Our transaction with
PartnerRe brings together
two independently strong
companies to create one
broadly diversified global
specialty insurance and
Reinsurance Company.
ALBERT BENCHIMOL,
AXIS CAPITAL
re360 Opinion: Jon Guy, Editorial Director, reinsurance
ILS figures break Q1 records
Jon Guy, Editorial Director, Reinsurance magazine discusses
the implications for the reinsurance sector following the
announcement of a record breaking set of figures in the ILS
market for the first quarter of 2015. >
Willis seeks
damages
from JLT
injunction to prevent JLT and
David Gordon from recruiting
further Willis staff from its Fine
Art, Jewellery & Specie (FAJS)
team. The Judge found Willis had
shown there was a serious issue
Willis Limited revealed it has
of unlawful activity to be tried. He
commenced proceedings in
did not grant the injunction as he
the High Court in London
considered the damage to Willis
against Jardine Lloyd
already done. The Judge said that
Thompson Group plc, JLT
damages could be pursued at trial.
Specialty Limited and Willis
Willis said ‘‘Willis will always
employee Mr David Gordon for pursue legal redress against
damages for conspiracy and for individuals and companies where
breach of duty and wrongful
we believe unlawful action has
interference in the proposed
compromised the interests of
sale of the FAJS division to
our clients, our employees, the
Miller Insurance Services.
markets we work with and our
Willis applied for an
shareholders.’’ >
IUA slams Scottish Government Asbestos move
The International Underwriting
Association has said the
proposal by the Scottish
Government to recover costs
for treating asbestos diseases
is unequitable, could prove
unlawful and would drive up
the cost of liability insurance.
The plan to retroactively
extend the terms of insurance
policies has been set out in a
consultation paper issued by
Stuart McMillan, a member
of the Scottish Parliament.
The IUA believes such a move
would breach the rights of
insurance companies.
Chris Jones, Director of
Market Services at the IUA,
said: “We fully support the
overall policy objective of ensuring that those suffering from
asbestos-related diseases are
treated quickly and effectively.
If an organisation has acted
negligently or breached a
statutory duty, then any insurance policy will respond in the
normal way and compensation
provided.
For more reinsurance opinion go to www.re360.co >
“However, insurers cannot be
expected to meet costs that
are not within the original
policy terms. This is an abuse
of the contractual process. >
@reinsuranceMag #re360
recap
<Valued Opinion, Vital Content>
FRIDAY 17 APRIL 2015
2
TALKING POINT
Florida brewing up a
storm on reinsurance
re360 Opinion: Caroline Bradley, Guernsey Financial Services Commission
On developing a new solvency network
Caroline Bradley of the Guernsey Financial Services
Commission on the development of a new risk based solvency
network and the benefits of this for insurers. >
Lloyd’s in Shariah facility launch
Weeks after opening its new
operation in Dubai Lloyd’s
has seen the launch of its first
Shariah compliant product.
XL Group and specialist
Shariah compliant managing
general agency Cobalt
Underwriting have created the
equine product which responds
to named perils, mortality,
theft, infertility and permanent
disability, amongst other risks.
Richard Bishop, Chief
Executive Officer, Cobalt
Underwriting said: “We are
delighted to be able to offer the
first Lloyd’s Shariah compliant
Lloyd’s unique structure
means we are ideally
equipped to provide
Shariah compliant
insurance.’’
VINCENT VANDENDAEL,
LLOYD’S
product and provide our
clients with access to secure
Shariah compliant insurance
coverage in what is a very
specialised and exciting
market. It is also another
clear sign of the London
market’s ability to deliver
innovative products that meet
the changing needs of clients
across the world in the way
they want them to be both
structured and delivered.”
Guy Morrison, Chief
Underwriting Officer, Equine
at XL Group said: “Until now,
owners, especially those of
Arabian horses, have not had
the opportunity to insure their
treasured animals in a Shariah
compliant manner. We hope
this coverage will give owners
the reassurance that their
horses are well covered when
participating and supporting
the vibrant equine industry at
events around the world.”
Lloyd’s Director of Global
Markets, Vincent Vandendael
said: “Lloyd’s unique structure
means we are ideally equipped
to provide Shariah compliant
insurance and reinsurance
as we continue to expand
globally.” >
This week saw the Florida Hurricane Catastrophe Fund meet to
recommend that it seeks to buy some $2.2 billion of additional
reinsurance. It is the first time that the fund which is overseen by
the State Board of Administration has recommended accessing the
private market since 1993.
The SBA say that it will allow the cat fund to reach its $17 billion
limit for the year ahead.
However the move has not been welcomed by all.
Opponents say the decision will see the average rate payer in the state
pay an additional $66 each for their insurance coverage and that the way
the reinsurance deal will be structured means it will take a series of major
storms for the reinsurers to need to step up to the plate.
The Florida Property and Casualty Association, also says its
opposes the move believing that the reinsurance will be too costly
despite the pressure on catastrophe rates across the market due to
the impact of the alternative capital which continues to seek entry.
However what is also interesting is that it looks likely that the $2.2
billion will be sourced from the traditional markets and that the ILS
and cat bond sectors will not get a look in.
Jon Guy, Editorial Director,
Reinsurance magazine
E-mail [email protected]
@reinsuranceguy
Reinsurance is still an attractive
sector, if you’re not a reinsurer
The reinsurance industry as a
sector to invest and operate in
remains attractive, that is the
good news that came out of
this weeks news that the EXOR
investment conglomerate was
seeking to acquire PartnerRe by
out-bidding AXIS Capital.
At Artemis we’ve always
expected interest to continue
in the space, as the total return
potential of even a traditional
reinsurance business remains a
very attractive opportunity for
large, diversified capital providers.
EXOR sees reinsurance as
a good diversifier away from
its traditional investments in
industrials, automotive and
football teams. It feels that
PartnerRe can generate an
attractive return as a private
reinsurer, without the need
to achieve the scale that a
deal with AXIS would have
supplied.
This is entirely reasonable. As
an investment group, adding
a reinsurer can be extremely
attractive, allowing EXOR
to emulate the Berkshire
Hathaway’s and Fosun’s of this
world.
However EXOR also insisted
it would not adopt a higher
investment return policy with
the reinsurer. We’d reserve
judgement on that until it has
bought the firm, if the deal
goes ahead. >
For further info contact
Steve Evans at
http://www.artemis.bm
@artemisbm
For more information contact Vipul Bhatti at Tel+44 (0)20 3651 5891 e-mail [email protected]
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valued opinion, vital content
Q1 | 2015
III VALUED OPINION, VALUED CONTENT
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Feeling the
squeeze
M&A activity picks up
pace as big becomes
beautiful for many
‘‘
Clients expect the company
to which they are transferring
their risks to be bigger. We have
seen a change in the Lloyd’s
market for instance where now
the stamp capacity is five times
bigger than 15 years ago,”
Julian James, Allied World
|
III Renewals: Rates down as underwriters seek to keep terms tight
III ILS: 2015 set to be record issuance year as investor appetite grows
III www.Re360.co: A full round up of what’s been happening on
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For more information contact Jonathan Trinder at Tel+44 (0)20 3651 5889 e-mail [email protected]