Energy Review 10-2019
05 November 2019
Much of the news over the past month is still being dominated by the two prominent politicians: President Trump and Prime Minister Johnson. We shall refrain from any further commentary until such time as the US and Brexit picture is a little clearer.
It is hoped that the winner of the Nobel Peace Prize, Ethiopia’s Prime Minister Abiy Ahmed, will be able to develop the natural gas and precious metal resources and, at last, develop the extensive hydro-power potential in his country.
Tensions have flared up on the border between Colombia and Venezuela where Nicolás Maduro is still seeking to retain the presidency. Meanwhile the Venezuelan oil industry, once the pride of Latin America, has never been in as bad a way as it is now.
There have been oil spills, pipeline leaks, refinery explosions and other energy casualties as discussed below.
Irrespective of Brexit, a lot of thought and planning has gone into the latest strategic planning at Lloyd’s. Lloyd’s has unveiled a blueprint for action to facilitate its Future at Lloyd’s project, which aims to “build the most advanced insurance marketplace in the world.”
This first blueprint, called “Blueprint One”, sets out six ideas of improved ways of working, with a focus on digital, data and technology to deliver greater benefits to customers. It will be updated, at least, on an annual basis. Blueprint One has been well-received and now all eyes are on how it will progress in the coming year.
There have been quite a few developments in the markets with AIG and new market entrant, Convex, getting a mention.
We hope our readers find our articles interesting and we look forward to discussing current issues and solutions with you all as the autumn days start to shorten.
Iranian tanker damaged in possible missile attack off Saudi coast
An Iranian tanker was damaged in an attack near the Saudi Arabian coast on the 11th October, the ship’s operator said, the latest incident to raise tensions in the Middle East and heighten concerns over the security of oil infrastructure.
The National Iranian Tanker Company, which owns the oil tanker Sabiti, said the vessel was in the Red Sea, about 60 miles off the Saudi Arabian port of Jeddah, when it was likely hit by missiles which damaged its main tanks. The ship’s crew was unharmed, the company said on its Telegram messaging account.
However, in the afternoon, the damaged Iranian vessel was returning to Iran at a healthy speed of about ten knots, according to marine data.
Brokers said the tanker was laden with approximately one million tons of crude likely destined for Syria, one of Iran’s last remaining customers. An Iranian oil official denied that Syria was the destination but would not say where the vessel was headed.
The alleged missile strike could not be independently verified. It was not immediately clear if the holes in the ship’s hull were caused by missile strikes or mines, given the extent of damage claimed by the Iranians. Mines have been used in recent months to sabotage other tankers in the region.
The incident comes at a time when the Middle East’s energy infrastructure has been at the centre of an increase in tensions in the region.
Worker dies from injuries at BP’s refinery in Whiting, Indiana
A contract worker died from injuries received while working at BP’s 430,000 barrel-per-day (bpd) Whiting, Indiana, refinery on the 2nd October, a company spokesman said.
“BP confirms that a contract worker was injured at the Whiting refinery,” said company spokesman Michael Abendhoff. “BP’s local medical staff provided immediate assistance, but sadly the worker was later pronounced dead.”
BP is in the midst of overhauling a 65,000-bpd gasoline-producing fluidic catalytic cracking unit at the refinery. Work began on the unit in mid-September and was expected to take about a month to complete.
It was unclear if the person who was killed was working on that project.
“Our thoughts go out to his family and co-workers during this difficult time,” Mr Abendhoff said.
BP plans an internal investigation, he said. Workplace fatalities are also investigated by the US Occupational Safety and Health Administration.
Oil from capsized cargo ship found along Georgia coast
Authorities say oil from an overturned cargo ship has reached several parts of Georgia’s shoreline, leaving a sheen in marshes and oiled debris on beaches.
State and federal authorities overseeing the clean-up say crews have been working to clean up the oil at Quarantine Beach in the Brunswick area, among other places.
Authorities said more than 5,500 feet (1,670 metres) of oil-absorbent boom is being used to try and contain pollution from “sporadic discharges” from the South Korean ship Golden Ray.
The vessel was carrying 4,200 vehicles when it capsized in the St Simons Sound on the 8th September.
The ship’s pilot and 23 crew members were all safely rescued, including four men trapped for 36 hours before they could be extracted through a hole drilled into the hull.
Damaged barge removed after spilling 117,000 gallons of oil in Mississippi waterway
Crews have removed a damaged barge, which spilled oil, from the Tennessee-Tombigbee Waterway in northeast Mississippi.
US Coast Guard Lt. David Schneider said the Jamie Whitten Lock remains closed while clean-up continues and the barge’s cargo is removed.
The barge spilled more than 117,000 gallons (443,000 litres) of oil on the 8th September, prompting an extensive clean-up effort.
Crews worked to contain the oil spill inside the lock, although four miles (6.5 kilometres) of the waterway were closed.
Lt. Schneider says the barge would be transported to New Orleans for repair.
The Savage Inland Marine barge was carrying about 321,000 gallons (1.21 million litres) of oil, but nearly two-thirds was safely removed.
The Coast Guard is still investigating.
Eni investigating explosion at Sannazzaro de’ Burgondi refinery
Eni S.p.A. is investigating an explosion which occurred early on the 17th September at its 200,000 b/d Sannazzaro de’ Burgondi refinery near Pavia, in Po Valley.
The explosion, which occurred at 06:30 a.m. local time in one part of a gasification line, did not cause any injuries to personnel but did generate a certain amount of smoke, Eni said.
The incident did not result in a fire, and further assessments are now currently underway to quantify damages.
The refinery continues to operate normally, Eni said.
Brazil pollution incident
Standard Club announced on the 11th October that: “We have been advised that the Brazilian authorities are approaching vessels offshore Brazil in order to identify the origin of crude oil which has affected 132 beaches on the North East coast of Brazil.
“Vessels approached have been required to provide evidence to show they did not cause the pollution.
“Members should contact the Club and/or our correspondent should they be requested by the Brazilian authorities to provide such evidence.”
Latest announcements from Price Forbes
Price Forbes boosts Financial Products team with major new hires
Price Forbes has boosted its Financial Products arm with the appointment of directors’ and officers’ specialist Suresh Ellawala as Executive Director of US financial products, financial fraud specialist Mark Warrilow as Director and Chris Butler as Business Manager.
Based out of London, the team focus will be on developing and growing Price Forbes’ financial products business around the world.
Suresh Ellawala has over 15 years of experience across D&O, warranty and indemnity, tax, financial institutions and errors & omissions. He was most recently a D&O and transactional liability Line Underwriter at Hiscox. Prior to that Suresh was product leader for D&O and public offering of securities insurance at QBE London, and part of the financial lines team at AIG London. Before joining the insurance market, Suresh was a practising lawyer in corporate regulatory and M&A practice at Freshfields Bruckhaus Deringer and Lovells. He holds a BA in law from the University of Oxford.
Mark Warrilow has 40 years insurance experience in both broking and underwriting and joins from Markel where he was most recently chief underwriting officer Singapore. He will be focused on financial fraud for both banking and commercial risks.
Price Forbes takes minority stake in Sino Insurance and Reinsurance Brokers
Price Forbes has purchased a minority stake in Sino Insurance and Reinsurance Brokers.
Based in Hong Kong, Sino is a leading broker involved in the placement of insurance programmes for Chinese multinationals overseas. Its clients include some of the largest Chinese construction companies, where it specialises in Contractors All Risks (CAR) insurance projects.
The deal paves the way for Sino’s clients to access Price Forbes’ broad range of products and sector experts, and also builds on Price Forbes’ strategy to work closely with clients globally to support insurance placement regionally as well as in the London Market.
Price Forbes and Sino have worked together for over five years as members of the Worldwide Broker Network (WBN), a relationship which has enabled Price Forbes to develop strong relationships with Chinese insurers.
Price Forbes launches US Healthcare practice following major hires
Price Forbes has launched a US Healthcare practice headed up by market veterans Paul Voller and David Fairbank.
Based out of London the practice will predominantly focus on the US healthcare sector arranging insurance, captive reinsurance and treaty protection for clients, complimented by placements for cyber protection. Managing Director Paul Voller will lead the practice with David Fairbank as Executive Director.
The move marks a substantial expansion of Price Forbes’ Healthcare practice. Non-US international healthcare will continue to be headed up by Tomer Karni, Executive Director.
Paul Voller has 45 years’ market experience and most recently served as Chairman of Healthcare Risk Partners, part of JLT Group. Prior to that Paul was Head of Division, Healthcare, at Lloyd & Partners. David Fairbank, who has worked with Paul for the last 25 years, also has over 40 years’ market experience and was previously a Senior Partner at Healthcare Risk Partners and Lloyd & Partners.
The full team includes Keeley Baker, Sirkka-Maija Kariluoma-Boom, executive assistant Kerrie McGilly and Geoff Dixon who brings marking leading expertise for cyber related risks within the Healthcare arena.
Lloyd’s reveals blueprint to build ‘most advanced insurance marketplace’
Lloyd’s has unveiled a blueprint for action to facilitate its Future at Lloyd’s project, which aims to “build the most advanced insurance marketplace in the world.”
This first blueprint, called “Blueprint One”, sets out six ideas of improved ways of working, with a focus on digital, data and technology to deliver greater benefits to customers. It will be updated, at least, on an annual basis.
Lloyd’s said Phase I of the blueprint will be delivered during 2020 and will include early quick wins, including the launch of an electronic risk exchange which could, over time, process as much as 40% of Lloyd’s risks.
Munich Re Syndicate will launch Lloyd’s first “Syndicate-in-a-Box” through its Lloyd’s insurer. In addition, Lloyd’s will pilot a solution that automatically triages claims to speed up settlement and introduce simplified onboarding for Lloyd’s coverholders.
Lloyd’s stepped up its ongoing effort to build a more efficient, simpler and less costly marketplace when it published its Future at Lloyd’s prospectus in May. After a ten-week consultation period to gather ideas for market improvements, the blueprint for those changes is being unveiled.
Here are the six integrated solutions Lloyd’s announced it is developing over the next year:
- Complex risk platform
A digital, end-to-end platform that complements face-to-face negotiation to submit, quote, bind, issue, endorse and renew complex risks for insurance and reinsurance business. (Lloyd’s initially will invest in the next generation of the London market’s existing electronic placing platform, PPL, building its capability over time).
- Lloyd’s risk exchange
An exchange for underwriting relatively non-complex, high-volume, low-value risks, which enables policies to be created and bought digitally. This digital exchange connects to existing systems or provides a new user interface, enabling instant search, quote, bind and issue to improve the speed of placement and customer experience.
- Claims solution
A solution designed to transforms the claims process by automating simple claims, using straight-through processing, resolving standard claims handling on behalf of the market and empowering lead underwriters to handle the most complex claims. This solution will create a better customer experience, making it easier to track claims and speed payments.
- Capital solution
A solution which offers alternative capital providers more options to attach risk more flexibly, for the benefit of all market participants, supported by a new capital platform. It is designed to make the market more attractive and accessible to all traditional and new forms of capital (including financial investors), while maintaining strong underwriting discipline.
- Syndicate in a box
The blueprint described this project as a new way “to bring innovative, accretive and profitable business into the market for a set period without the need for a physical presence in Lloyd’s…”
- Services hub
A set of high-quality, value-add services to support the market’s business, including access to Lloyd’s data, insights and analytics, business support functions and product innovation accelerators. All these resources will be accessible via an online portal.
The Future at Lloyd’s project builds on an earlier modernisation project, the London Market Target Operating Model (LM TOM), which includes the London market’s electronic placement platform, PPL. The LM TOM is now being wound down, supplanted by the Lloyd’s Blueprint for the Future at Lloyd’s, although the blueprint is building on PPL’s capabilities.
Lloyd’s also announced that Munich Re will launch the first new “Syndicate-in-a-Box” through its Lloyd’s vehicle Munich Re Syndicate Limited. The new Munich Re Innovation Syndicate will begin underwriting on the 1st January 2020 with no physical presence in Lloyd’s. It will underwrite a range of innovative lines of business such as renewable energy and parametric insurance for weather risks.
“The extensive feedback we have received in progressing the blueprint has confirmed the preeminent place Lloyd’s holds globally in insurance and reinsurance. The plans unveiled today create execution certainty through phased delivery,” said John Neal, Lloyd’s CEO, in a statement to announce Blueprint One.
“The support we have enjoyed to date has been essential to delivering Blueprint One and we are seeking the renewed commitment of all market participants to partner with us to achieve our vision to build the most advanced insurance marketplace in the world.”
Lloyd’s said it is focused on leadership across three key fronts:
- Improving the market’s performance
- Delivering the Future at Lloyd’s strategy
- Tackling unacceptable behaviour in the Lloyd’s market with robust actions to build a diverse and inclusive market in which everyone is respected and valued. (Lloyd’s this month detailed a plan to address the toxic culture of harassment, which women in a survey revealed is prevalent in the market)
For six months, starting on the 1st October, Lloyd’s will begin a planning phase, to develop its blueprint “to ensure we are ready to execute the plan,” said Lloyd’s.
London Market Comments:
London Market Group (LMG)
“This blueprint process has demonstrated tremendous cross-market collaboration in its creation, and we are delighted that the LMG Board will become the London advisory body for the Future at Lloyd’s – representing as it does the widest possible market representation across all stakeholders in the market and across the re/insurance value chain,” said Clare Lebecq at the LMG.
London & International Insurance Brokers’ Association (LIIBA)
“The broking community welcomes the fact that the development of the blueprint for the Future at Lloyd’s has been a positive and discursive process,” said Chris Croft from LIIBA.
“For any market development, the distribution arm is at the front end of the process, getting that part right is critical to whatever Lloyd’s develops, as is ensuring any solutions developed work equally efficiently for non-Lloyd’s carriers given the global nature of our market,” he added.
“LIIBA members have worked assiduously in recent years to shorten the value chain that brings business to London and therefore to reduce cost and complexity significantly. Technology has a role to play in helping us reduce that further but not at the expense of the value that an intermediary brings to the process.
“PPL has built a significant brand and following because it works for all parts of the community. The fact we can develop something so important together has been a valuable lesson. The announcement that PPL will form the basis for the complex risk platform, and will receive investment in improving it further, is great news for the market,” Mr Croft affirmed.
The Lloyd’s Market Association (LMA)
“Lloyd’s ambition to be the most advanced insurance marketplace in the world is achievable, but will be thoroughly dependent on our ability to innovate and evolve our model so that we may continue to offer outstanding underwriting products and services to our customers. It is absolutely right that this is the primary focus of the Future at Lloyd’s, which is why it has the broad support of the LMA and the wider market,” said LMA CEO Sheila Cameron.
“I am reassured that many of the comments and questions posed in our response to Lloyd’s have been addressed or acknowledged in Blueprint One,” she added.
“We look forward to seeing more detailed development of the six integrated solutions which will form the future Lloyd’s ecosystem and help to shape the development of some of the supporting strands such as modern risk syndication.”
AXA XL’s New Energy Risk plans business expansion with strategic hires
New Energy Risk, an affiliate of global re/insurer AXA XL, has announced the appointments of Matt Lucas as Managing Director, Business Development, and Dvorit Mausner as Director of Execution.
Lucas will lead the firm’s expansion into new technology sectors, geographies and products. He started his career at Siemens as an innovator-in-residence.
Mausner will support the streamlining and management of the entire client experience. She brings experience scaling six previous operations across the for-profit, academic and non-profit sectors
New Energy Risk has also promoted Sherry Huang to the role of Chief Actuary, and Brentan Alexander to the role of Chief Commercial Officer, in addition to his existing role of Chief Science Officer.
New Energy Risk is an affiliate company of AXA XL and was formed in order to partner with brokers, project developers, technology developers and operators (clients), and financiers to help underwrite insurance solutions that efficiently address the technology risk, reducing uncertainty associated with new and relatively unproven technologies and processes.
Michigan Pipeline Company to shut down and pay US$509K for trenching safety violations
Under an agreement with federal safety officials, a Grand Rapids, Michigan, pipeline company will close down and pay just over US$509,000 for exposing workers to serious trenching and excavation hazards.
The US Department of Labor’s Occupational Safety and Health Administration (OSHA) said the agreement with Kamphuis Pipeline Company – approved by Judge Patrick Augustine of the Occupational Safety and Health Review Commission in Denver, Colorado – resolves three OSHA inspections conducted at Kamphuis Pipeline worksites in September and October 2017.
Investigators found that the company repeatedly exposed employees to trench cave-in hazards while workers installed water metering pits and lines.
The company also failed to follow other requirements for working safely in trenches and excavations.
The settlement agreement requires Kamphuis Pipeline Company to pay the penalties, voluntarily terminate all operations, and dissolve the company’s corporate status in South Dakota.
Company owner and founder Daniel Kamphuis agreed to surrender his North Dakota contractor licence.
Both he and the company also agreed not to have any ownership or managerial interest in any construction business conducting trenching and excavation activities within the US in the future.
They may engage in such activities in other capacities but must notify OSHA and take appropriate training if they intend to resume such work.
Ocean marine insurers face new risks and challenges in changing segment
Ocean marine insurance is the oldest line of insurance and today represents a small specialty line in the property/casualty insurance industry.
Since those early days, marine products have evolved as risks and exposures have increased in both size and complexity. The recent sailing of the MSC Gulsun, the world’s largest containership at 23,000+ TEU capacity, with cargo values well in excess of US$1 billion, is just one example of the increasing assets which are insured.
Today’s marine industry is facing some tough challenges. On a global basis, reports show that many lines of marine business are unprofitable and have been so for several years, including the larger lines of cargo, hull and yacht.
While some geographic markets as well as insurers within the market have performed better, none have been immune to the challenges facing the industry.
There are several reasons for this situation but a significant one has been an abundance of capacity entering the marine insurance market with relatively low barriers to entry and exit.
This has resulted in the “commoditisation” of this specialty line of business. In the simplest of terms, premiums have not been technically adequate to cover losses and expenses, let alone provide a return for capital providers which meet their expectations.
As a result, the marine insurance industry is now seeing companies exit the marine market.
Those underwriters who remain committed to the market are addressing their portfolios and reviewing rate adequacy, expenses, terms and conditions, deductible levels and capacity/limit deployment.
In the soft market many accounts were underwritten and priced based predominantly on the insured’s past loss experience. Today, underwriters appear to be more focused on the insured’s exposures, and brokers and insureds are seeing greater demands for information.
Natural catastrophe activity has also adversely impacted the marine insurance sector, most notably the yacht and cargo lines. The yacht market has undergone significant increases in premium, deductibles, and a lack of availability of coverage for certain vessels and geographies.
The cargo market insures a significant amount of property/contents in storage under warehouse/storage endorsements and “Stock Thru Put” policies. This has increased in the soft market as cargo insurers offered broader terms, greater nat cat limits, lower deductibles and more competitive prices than were available under a property insurance policy.
However, there have been significant cargo storage losses as a result of the 2017 and 2018 nat cats, as well as a number of well-publicised, costly fire losses in the past 12 months including Macy’s, Jim Beam and Tyson.
This year has also been a very active loss year with major vessel fire casualties including the Sincerity Ace, Yantian Express, APL Vancouver, ER Kobe, Grande America, Grande Europa, KMTC Hong Kong, Diamond Highway and the APL Le Havre.
Tragically, some of these casualties have resulted in loss of life, injury and environmental damage.
Shipments of hazardous materials and dangerous goods are expected to be a factor in most, if not all, of these casualties.
Recently, shipping companies have taken the unprecedented step of announcing significant fines for misdeclaration of dangerous goods.
All of these casualties will result in cargo, hull and protection and indemnity (P&I) claims. In addition, in January 2019 one of the largest and most modern new container ships, the MSC Zoe, lost 345 containers overboard in heavy weather in the North Sea while enroute from Portugal to Bremerhaven.
In the US market, many marine liability and P&I underwriters are dealing with challenges similar to those faced by their non-marine casualty colleagues. These include the increase in claims costs driven by growth in social inflation, medical costs, legal fees and larger judgments and settlements.
All this is increasing adverse prior-year development in results for insurers. Excess marine liability insurers face similar struggles.
Despite these challenges, the marine industry will continue to grow and require re/insurers who can offer quality products and solutions.
There are emerging technologies which may enable new solutions to provide insurance products to meet the industry’s changing needs, but insurers must get the basics right first to be in a position to capitalise on future opportunities.
For certain, the industry will need highly qualified marine insurance professionals to address its needs and offer a sustainable approach to the business which meets the demands of the present and future.
Canopius completes AmTrust at Lloyd’s takeover
Canopius Group has completed its acquisition of AmTrust at Lloyd’s, making the carrier a top-five player at Lloyd’s.
Cyber-attacks named as top business risk in US, Canada and Europe, by WEF survey
Cyber-attacks are named as the leading risk for business executives in the United States, Canada and Europe, according to a survey of business leaders published by the World Economic Forum (WEF).
Globally, three of the top five risks are economic-related, with “fiscal crises” identified as the leading risk to doing business at a global scale, while “unemployment or underemployment” came in third and “energy price shock” ranked fourth.
These risks have strong links to social disruption and contribute to “failure of national governance” ranking fifth and “profound social instability” ranking sixth, said the WEF in a statement accompanying the survey report.
The survey revealed that the Top Ten business risks of highest concern globally are:
- Fiscal crises
- Unemployment or underemployment
- Energy price shock
- Failure of national governance
- Profound social instability
- Data fraud or theft
- Interstate conflict
- Failure of critical infrastructure
- Asset bubble
The survey report, which is titled “Regional Risks for Doing Business 2019”, further breaks down the concerns of business executives into regions.
Cyber-attacks are the second biggest challenge for executives overall, and the most important one for European and North American businesses for the second year in a row (the WEF piloted its first regional risks report in 2018, which was designed to show how global risks are experienced differently by region).
While failure of climate-change adaption was ranked at number 21 globally, it ranked at number eight in North America, said the report.
In the US, the top five risks are:
- Data fraud or theft
- Terrorist attacks
- Critical information infrastructure breakdown
- Failure of critical infrastructure
In Canada, the top five risks are:
- Data fraud or theft
- Extreme weather events
- Energy price shock
- Failure of regional and global governance
In Europe, the top five risks are:
- Asset bubble
- Interstate conflict
- Energy price shock
- Fiscal crises
Other Global Regions
Environmental-related risks are the top concerns in South Asia and in East Asia and the Pacific, with both regions having suffered devastating natural disasters and extreme weather events, said the survey report.
Social challenges rank high in Eurasia, affected by economic slowdown, and Latin America and in the Caribbean, where governments are still aiming to deliver critical social services.
In the Middle East and North Africa “energy price shock” leads the list of concerns due to ongoing price and production volatility, and in sub-Saharan Africa, where youth unemployment is more than 13%, executives are worried by their economies’ inability to create jobs, indicated the report.
John Drzik, President of Global Risk and Digital at a leading global broker, said: “Cyber-security remains the most concerning risk to business leaders in advanced economies, and growing technology dependence for many businesses will only amplify this. Combined with fractious geopolitical developments, and growing economic concerns, executives face a very challenging portfolio of potential threats.
“Business leaders should re-evaluate their underlying view of the global risk environment and make greater efforts to strengthen their corporate agility and resilience.”
“There is a real existential threat to businesses worldwide,” said Eugenie Molyneux, Chief Risk Officer at a leading insurance group. “Executives are concerned that governments have too much debt to be able to afford measures that could help avoid a recession, and see cyber-attacks as the number one risk in 16 economies representing over 40% of the world’s GDP. At the same time, businesses are not even factoring in the impact of climate change over the next decade. These three risks need urgent action.”
Tulsi Naidu, Chief Executive of Zurich UK, said that the survey reveals that cyber-attacks are the most pressing risk for CEOs of the four largest EU economies – Germany, France, Italy and the UK – while data theft is ranked sixth across Europe.
“While organisations are increasingly alert to the impact cyber-attacks can have, many do not yet fully appreciate the dangers, and must step up their efforts to combat the threat. As such, this is an area of insurance we expect to see grow,” she added.
“At a time when global economic growth appears fragile, business leaders are deeply concerned by their governments’ fiscal resilience. Meanwhile, cyber-threats remain a major risk due to their rapid evolution and increasingly disruptive potential,” said Emilio Granados-Franco, Head of Global Risks and Geopolitical Agenda at the World Economic Forum.
“But in examining risk at the regional level, we also see various, interconnected drivers shaping diverse risks landscapes,” Mr Granados-Franco went on to say. “Only by addressing economic risks and societal, technological, and environmental risks in an integrated manner, can stakeholders truly build resiliency.”
The findings of the “Regional Risks for Doing Business 2019” survey report are based on 12,897 responses from executives in 133 economies.
Respondents were asked to select “the five global risks which you believe to be of most concern for doing business in your country within the next ten years”. The latest edition of the survey was carried out from January to April 2019. Business leaders were asked to choose up to five risks from a list of 30, which included terrorist attacks, extreme weather events and state collapse or crisis.
Travelers to transfer European business to Dublin after Brexit
Travelers Insurance Company Limited has received approval to transfer in-force policies and historic liabilities written out of its European branches to its Dublin-based subsidiary, Travelers Insurance Designated Activity Company (DAC).
Lloyd’s to open Miami office to expand its Latin American and Caribbean business
Lloyd’s plans to set up an office in Miami to support business development in the Latin American and Caribbean markets.
“Latin America is a key market for Lloyd’s, with premium close to US$1.5 billion,” said Daniel Revilla, Regional Head, Latin America, and Country Manager, Mexico.
Lloyd’s currently has offices in Brazil, Colombia and Mexico, and there are more than a dozen service companies and coverholders servicing the Latin American and Caribbean markets from Miami, he noted.
In addition to opening the Miami office, Revilla said, Lloyd’s also will be taking additional steps to strengthen its presence in the Latin American and Caribbean markets, including the following:
- Yelhis Hernández will be appointed Mexico Country Manager (subject to regulatory approval). Ms Hernández has been with Lloyd’s for almost two years and has been instrumental in supporting market development across the Latin American region based in Mexico City
- Following Juan Carlos Realphe’s decision to leave Lloyd’s, recruitment for a new Colombia country manager has begun. The role will be expanded to increase market development activity across Spanish-speaking South America
- Valdir Serra will be strengthening the Latin America market development effort. He has been with Lloyd’s for eight years and is currently the Market Development Executive and Analyst for Brazil.
Mr Revilla said he will continue leading the Lloyd’s team across the region from the new office in Miami. “…I am sure these changes will allow us to more effectively support the Lloyd’s market development in the region.”
Charles Taylor agrees £261 million deal to go private
Insurance services firm Charles Taylor has agreed to a “compelling” takeover deal by private equity firm Lovell Minnick Partners, which it hopes will deliver attractive returns to its shareholders.
Property and energy only lines to turn underwriting profit at Lloyd’s
Only two of the eight businesses at Lloyd’s were profitable in the first half of 2019, pushing the corporation to an underwriting loss of £86 million, compared with a profit of £308 million in the first half of 2018.
Marine insurance market ‘chaotic’ as future remains uncertain, says IUMI
The ongoing global uncertainties, including the current trade tensions, will continue to impact all marine lines of business, specifically cargo and offshore energy, predicts the International Union of Marine Insurance (IUMI), which represents 43 marine market insurance and reinsurance associations globally.
Marine underwriting premiums rose by just one percent last year, but future market development remains uncertain as the marine insurance sector faces significant challenges, the IUMI said on the 16th September.
The IUMI presented its analysis of the latest marine insurance market trends, revealing that marine underwriting premiums for 2018 were recorded at US$28.9 billion, which represents only a one percent rise from 2017.
With significant challenges facing the market, the modest increase is not significant enough to herald an upturn in the overall market, the IUMI said.
“Changes to frame conditions are the most likely reason for the modest increase in premiums as opposed to any real market development,” said Vice-Chairman of the IUMI’s Facts & Figures Committee, Astrid Seltmann.
Ms Seltmann said global uncertainties, including trade tensions, will continue to impact all lines of business in marine insurance, but particularly the cargo and offshore energy sectors.
Ms Seltmann also highlighted an increase in the frequency of fires on containerships, especially ones starting in the cargo areas of vessels such as Maersk Honam and Grande America.
“This trend has been observed for some years and the newest statistics show a clear further increase in 2019,” Ms Seltmann said. “These fires pose a threat to the crew and cause severe damage to both vessel and cargo. IUMI is working with a range of industry bodies to improve the prevention of such events as well as fire-fighting capabilities onboard.”
According to the IUMI, the US$28.9 billion in global premiums were split between Europe (46.4%), Asia/Pacific (30.7%), Latin America (10.4%), North America (6.2%) and Other (6.3%).
By line of business, cargo continued to represent the largest share with 57.4% in 2018, followed by hull (24.4%), offshore energy (11.4%) and marine liability (6.7%).
Experts not worried about Saudi-like drone attack knocking out US oil production
The style of attack used against oil plants in Saudi Arabia, which knocked out half of the country’s production on the 14th September, is unlikely to be a risk in the United States, energy and security experts say.
“The US oil industry has a lot of redundancy,” said Amy Myers Jaffe, senior fellow for energy at the Council on Foreign Relations.
US refineries go offline often after accidents or storms, with little impact to the market, Ms Jaffe said. Even production in the country’s biggest oil field, the Permian Basin in Texas and New Mexico, is spread across thousands of wells in a 75,000- square-mile (194,250-square-kilometre) region. The kind of gas-oil separation facility hit in the attacks in Saudi Arabia is done in smaller plants located across US oil fields.
“It’s pretty hard to imagine some group having people here and they’re going to fly a drone over the Houston Ship Channel or over Newark and somehow it’s not going to be noticed,” Ms Jaffe said.
“Could you knock out one company’s crude processing unit and throw them offline? I suppose. You’d have to go down to Midland, Texas, and get away with it.
“I would be more concerned about cyber vulnerability,” Ms Jaffe added.
The United States has more of a geographic buffer than Saudi Arabia and lacks hostile neighbours, said Ben West, Security Analyst with the intelligence firm Stratfor. The most vulnerable infrastructure, pipelines, can be repaired quickly, he said.
“Even if there were an attack, it’s unlikely to knock out half the US oil and gas production,” Mr West said. “I think Iran is much more likely to be able to carry out a cyber-attack successfully than a cruise missile or drone attack, and it’s still an unlikely scenario.”
Security for US energy infrastructure was tightened in the years following the attacks on the 11th September 2001 to include tighter inspection standards and better backgrounding and credentialing of workers, said Henry Willis, a senior policy researcher at the Rand Corporation.
“We do know that once someone figures out a way, others learn,” Mr Willis said. “I imagine if you’re responsible for facilities security and you haven’t done it already, you’re assessing how you account for drone threats.”
People on the Move
Convex engages XL Catlin energy alumnus Hunt as greenfield pressures upstream market
Stephen Catlin and Paul Brand’s underwriting start-up, Convex, employed the services of former XL Catlin energy product line leader, Geoff Hunt, as a consultant for its energy business as the new venture is expected to put pressure on rates in the upstream market at renewals.
Aspen appoints Signorelli international cyber head
Aspen Insurance has promoted Mauro Signorelli to the role of Head of International Cyber, based in London.
AXA XL promotes new head of energy
AXA XL Insurance has promoted Peter Welton to UK Head of Energy. In this role, Welton will look after the development of the UK energy book and will provide and design innovative insurance and flexible solutions for energy clients. As part of the new role, he will lead a team of underwriters in London. In 2005, he joined the non-marine direct and facultative property team at Catlin Underwriting Agencies Ltd. (now AXA XL) and became senior class underwriter for downstream energy and power at the insurer in 2016. Welton succeeds Luis Prato, who was promoted to Chief Underwriting Officer for UK legal entities last month.
Globe Underwriting names new head of marine and transport
UK managing general agent Globe Underwriting has appointed David Dymond as the new Head of Marine and Transport following the retirement of Peter Rogers.
AIG looks to Chubb for energy head
James Langdon, previously at Chubb, will become UK Head of Energy & Construction for general insurance.
Clyde & Co strengthens London marine team with partner hire from Kennedys
Law firm Clyde & Co has appointed Andrew Yarwood as a partner in its London marine cargo group.
Lloyd’s confirms Sansom in CRO role: “People officer” Andrews exits
Lloyd’s has appointed David Sansom as its new Chief Risk Officer (CRO), subject to regulatory approval.
The market also confirmed the departure of Annette Andrews, its Chief People Officer.
Tokio Marine Kiln shakes-up top leadership as CEO and CUO depart
Specialist and corporate insurer Tokio Marine Kiln (TMK) has unveiled a series of leadership changes following the departure of its Chief Executive Officer Charles Franks after 11 years, and Chief Underwriting Officer Paul Culham after 32 years.
Hiscox appoints Joanne Musselle as new Group Chief Underwriter
Global (re)insurer Hiscox has announced the appointment of Joanne Musselle as its new Group Chief Underwriting Officer, following the retirement of Richard Watson.
She will step into the role at the end of 2019 and join the Hiscox Ltd. Board as an Executive Director in February 2020.
Ms Musselle has been with the company for 17 years having joined in 2002 as a technical underwriting manager for professions and specialty commercial lines. Since then she has held several senior roles at the firm and currently serves as Chief Underwriting Officer (CUO) for Hiscox Retail.
In her current role, she is responsible for all retail underwriting across the Hiscox Group, including Hiscox UK, Hiscox Europe, Hiscox USA, Hiscox Special Risks and Hiscox Asia.
In the last two years she has overseen profitable growth in GWP of almost 25% across the retail portfolio and helped the retail businesses to navigate increased volumes of regulatory change.