In This Issue
· Florida Insurance Commissioner comments on Solvency II.
· CNA is back in the reinsurance sector with its acquisition of Hardy Underwriting.
· Syndicate wall charts available for download.
· Lloyd’s extends Coverholder outreach.
New CATEX Bordereau System brochure
Links for Additional Information
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NAIC’s McCarty comments on Solvency II
The outgoing annual president of the National Association of Insurance Commissioners is Florida Insurance Commissioner Kevin McCarty. Mr. McCarty has been the Florida Insurance Commissioner for nine years and if you know anything about Florida’s insurance market you know that the person charged with overseeing it has to be versed in everything from sinkholes to hurricanes combined with extra large doses of CAT pricing, CAT bonds, rehabilitations, “last resort” insurers, coverage availability and consumer angst. McCarty’s job description is not to be envied by anyone but the fact that he’s in his tenth year of doing it speaks volumes about his capabilities.
So when Commissioner McCarty says that he thinks Solvency II is “kind of silly” people tend to take note of it. The reason McCarty is speaking out seems to be due to warnings from some insurers that the US needs to have a regulatory scheme equivalent to Solvency II. Since S2 would require global insurers to comply with both US and European regulations simultaneously some insurers have warned that if the US fails to obtain S2 equivalency they would rather withdraw from the US market than incur the expense of complying with different regulatory regimes.
The last time we checked the US was a pretty big market for global insurers so one wonders exactly what those warnings might mean. Pull out? Really? Commissioner McCarty seemed to wonder as well when he said “No disrespect to the EU but I think it’s kind of interesting, at best, that they would want to make a comparison to a system (S2) that isn’t in place yet. It’s a theoretical system…measured up against a system that’s been tried and tested for decades.”
McCarty added “It’s kind of silly to even consider that an equivalence process”. He noted that US regulators were happy to work with their EU colleagues to develop mutual understanding but he was quoted in the Financial Times as saying that at a recent EU-US regulator meeting “when the EU regulators started saying ‘under Solvency II your system would’…, I just said: ‘I’d like to remind my esteemed colleagues from Europe that we have no intention of going through a checklist of what you want to do’.”
CNA Returns to Reinsurance in London
CNA is back in reinsurance. The seventh largest commercial insurer in the US finalized the purchase of Hardy Underwriting Bermuda. Hardy underwrites aviation, marine and a broad range of non-marine risks on both a reinsurance and direct basis through its Syndicate 382 at Lloyd’s. CNA paid $227 million for Hardy and in a call with analysts CNA’s CEO Thomas Motamed indicated Hardy will maintain its brand name and that he hopes the underwriters and management remain on board.
Motamed indicated that since 79% of CNA’s business is casualty the short tail business that is Hardy’s specialty will be a good fit. CNA had a reinsurance arm in the 1990s but sold it in 2002. The Hardy acquisition marks the Chicago-based company’s return to the market.
Speaking of Syndicates….
There are over 75 syndicates at Lloyd's. Each syndicate has its own legacy, reputation, specialty and a story that’s peculiar to them. The Lloyd's Analysis Team has produced a map that is a graphical representation of all “currently active, open and run-off syndicates and their corresponding managing agents”. Click here to learn more about the map and to access it.
Our friends at Intelligent Insurer, working with Standard & Poors, also produce an annual Lloyd’s Syndicate chart that may have a bit less detail but could be slightly easier to read. You can access the PDF version of that map here.
As you may know from previous newsletters Lloyd's has launched a major initiative to reach out to participants in the Delegated Authority arena especially Coverholders. Lloyds has a suite of informational products for Coverholders that are available through this website.
You can sign up for e-mail delivery of the Lloyd's Coverholder Newsletter at this site too.
New CATEX Bordereau Brochure
CATEX has revamped its descriptive brochure for its Bordereau/Program Management & Reporting System to include greater detail about the capabilities of this unique SaaS service. You can download the new brochure here.
The brochure includes much greater detail on the real-time reporting capability of the system. If you are interested in learning more please contact us.
Insurance Insider is reporting that the insurance industry must do more to meet the risk management needs of its clients in order to avoid a "lost decade" of stagnating premium income, according to Mike Kerner, CEO of Zurich Financial Services' North American global corporate segment…..Insurance Day featured a profile of Frank Fortunato, CATEX CEO, that may be of interest. We knew Fortunato played the piano but thus far we’ve been smart enough to decline offers for lunchtime recitals….This one was too hard to resist. It seems that orangutans at the Miami Zoo are being trained to use iPads too. No word on whether they are Tweeting or not yet….
(A Quick “Byte”!)
A “Quick Byte”