31 January 2017
During the past several years there have been major geopolitical issues such as the struggle against ISIS in the Middle East, changing relations between Russia and Turkey, tensions in the South China Sea, and the fall in the price of oil to name some of the more prominent developments hitting the headlines. However, none of these were real surprises.
2017 will be an exciting year for at least two reasons; both of which began in 2016 but have yet to gather any real momentum: the Brexit referendum in the UK and the election of Donald Trump to the US presidency. And things could warm up in Britain even more as the prime minister is confronted with a new Northern Ireland headache and the reawakening of trade unionism. Mrs May is going to need all the help she can get if she can oversee some of the most serious issues confronting the economic and political health of the country. One has to wonder: where is the next surprise going to come from?
The world cannot wait for Mr Trump to start putting words into action. He is surrounding himself with some big hitters but they will all turn out to be “yes-men”. He needs that to overcome the opposition from Republicans on Capitol Hill. Questions like will he really pull out of the nuclear deal with Iran, will he ditch the rapprochement with Cuba? In his last few months as President, Mr Obama did not do much to enamour himself with the energy industry in North America; will Mr Trump reverse some of these decisions? Will Mr Trump proceed to send the US Navy into waters where China is saying that it is the only one who gives permission for this? We all know what China wants down there: oil and gas.
Perhaps the USA and the UK are waiting until the elections in key European Union countries have identified who will be their new allies for the next four or five years. It may not be priority number one for the new Dutch prime minister, but the decreasing revenues from Europe’s largest producer of gas needs attention. The demand for Russian gas in Germany needs to be addressed. Will the Italian government try and nationalise the country’s most successful energy company ever?
2017 will be yet another year when the credibility of the Organisation of Petroleum Producing Countries comes under scrutiny. Purely because of its size this cartel has not been taken apart. While most Middle Eastern countries need a high price of a barrel of oil because they do not have any other substantial sources of income, the demand for oil is under threat. Cynically reducing the abundant supply of oil when there is a high demand (admittedly on the wane) only underlines the sort of ethics we do not really need in the world economy. A new record for gas exports from Norway was set in 2016. China plans to invest US$361 billion in renewable energy generation by 2020. The investment reflects Beijing’s focus on cutting the use of fossil fuels and combating pollution – mind you, the country still wants no-one else to touch oil and gas in the South China Sea. When one looks at the vast resources of gas about to be tapped, one wonders when OGEC, the gas equivalent of OPEC, will come into being – with the resultant tinkering with supplies to keep the price up.
At the time of writing, little is known about UK demands of the EU, let alone what changes will eventually occur with EU freedoms of movement, goods and services as a result of Brexit. Any deal between the EU and the UK could lead to changes in the EU rules for the remaining 27 member states and how they interact. Will Lloyd’s set up in Ireland? Will the loss of Passporting Rights be as disastrous as some predict?
This time next year, many interesting questions will have been answered. 2017 looks like being a year involving great change, and those who adapt best should come out well.
We look forward to continuing our dynamic relationships with our clients wherever you are and wish you all a happy and satisfying 2017.
Fire breaks out on Deepsea Atlantic rig off Norway
A fire broke out on the Deepsea Atlantic drilling rig working for Statoil at the Johan Sverdrup field, off Norway.
According to reports, the fire broke out on the 4th January in the rig’s drill tower. After it was extinguished, it broke out again. The situation was brought under control an hour later.
A spokesperson for Statoil told the Norwegian news website that the rig was not drilling production wells at the time of the incident.
Statoil is the operator of the Johan Sverdrup field, in the North Sea, around 140 kilometres west of Stavanger. The field is under development and production is planned to start in 2019.
The Norwegian company was given a green light to drill an appraisal well at the Johan Sverdrup field with the Deepsea Atlantic rig in November 2016.
The Deepsea Atlantic is a semi-submersible drilling rig of the MODU GVA 7500 type, operated by Odfjell Drilling. The rig was completed in 2009, registered in Norway, and is classified by DNV GL.
Kidnaps up, deaths and injuries down, in quieter year for piracy
The International Chamber of Commerce (ICC) and International Maritime Bureau (IMB) have published their annual piracy report for 2016.
In 2016 there were 191 incidents of piracy and armed robbery against ships, down from 246 reported incidents in 2015. There were 150 incidences of vessels being boarded, seven hijackings, 22 attempted attacks and 12 vessels fired upon. There was in increase in the number of times shots were fired, with guns featuring in 48 reports in 2016, up from 33 in 2015.
The reported use of knives fell from 97 to 44, which is a distinct fall from the average over the previous four years.
For the first time since before 2012, no crew were killed or are missing. Of the 236 “acts of violence” only 13 consisted of actual assault or injury.
Last year 151 hostages were taken, and 62 people were kidnapped for ransom in 15 separate incidents. That is a 200 percent increase over 2015.
Looking at the trend for the locations of actual and attempted attacks in south-east Asia, Indonesia performed remarkably well in 2016, with the number of incidents falling from 108 in 2015 to 49 and triple-digit incidents in 2014 and 2013. By contrast, the Philippines saw 11 attacks in 2015 and ten in 2016, compared with only three in 2012 and the same number in 2013.
In East Asia (China, South China Sea, Vietnam) the total numbers have remained relatively constant over the past five years, although Vietnam has seen a decline and China has seen an increase.
In South America the trend appears to be on the increase – 27 events last year, compared with seven the year before and four in 2014. There were 11 incidents in Peru (zero the previous two years). Ten incidents were reported at Callao port in Peru alone.
In Africa the story is now all about Nigeria – the 36 incidents there outnumbered 26 incidents everywhere else. Nigeria also saw a significant increase from the 14 incidents in 2015, although 2012 had seen 27 attacks, and 2013 had seen 31.
Somalia (49 incidents in 2012) has become a piracy non-event, with only one incident in the past two years. The Red Sea (also Somali pirates) had 13 incidents in 2012, but none in the past two years. Togo too has also reduced the number of incidents – 15 in 2012, seven in 2013, two in 2014 and only one in the past two years.
Ships are more likely to be at anchor when they are attacked rather than steaming. Of the 157 actual attacks, 104 took place when the vessel was anchored, 23 when it was berthed and 30 when it was steaming. Of the anchored attacks, Indonesia saw the most incidents (37), while the attacks on the open sea were most prevalent off the Nigerian coast (14 out of 30).
It should be pointed out that 15 of the 22 failed attacks on the open sea were also off the Nigerian coast, so the country does a relatively better job of foiling such attacks.
The number of attacks on container vessels fell dramatically last year, down to ten from 30 the year before. Bulk carrier attacks declined from 86 to 52, but the five-year trend as a percentage of total attacks is on the rise. There were 56 attacks on chemical/product tankers (down six year on year), 13 on crude oil tankers (down seven year on year) and ten on LPG tankers (up six year on year.
Firefighters battle massive blaze at Haifa oil refinery
A massive gasoline tank at a Haifa refinery caught fire on the 25th December, sending bright orange flames and thick black smoke billowing into the air above the large bay city and threatening other installations at a massive industrial complex.
Police briefly closed main arteries near the Haifa industrial zone as dozens of firefighting teams attempted to keep the flames under the control.
“It is a very serious incident. Our main aim at the moment is to stop the fire spreading to other tanks that contain dangerous material,” Haifa fire services spokesman Yoram Levy told the Ynet news site.
Mr Levy said the tank held 1,000 cubic litres of gasoline and more than 40 firefighting teams were sent to try and contain the blaze.
It was not immediately clear how the fire started. Officials said a larger disaster was avoided as the tank, with a capacity of 10,000 cubic litres, was relatively empty.
As thick black smoked filled the air above the city, many residents reported breathing difficulties, though rescue officials did not say anyone needed treatment.
The Haifa bay area, hemmed in by the Carmel Mountains, is home to some of the heaviest industry in the country, and residents there have long feared an incident that could endanger the northern port city.
There have also been complaints of health issues and severe pollution.
Recently, Haifa City Hall had tried to temporarily shut down the Carmel Olefins refinery after a series of mishaps in which dangerous pollutants were accidentally released into the air.
Two Venezuelan oil workers die in fire – PDVSA
Two workers died and one was injured in a fire at an electricity generation plant in Venezuela’s western state of Zulia, state oil company PDVSA said on the 20th December.
The fire at the Lamargos-Lago complex next to Lake Maracaibo was completely extinguished after flaring on the night of Monday 19th December, PDVSA said in a statement.
The workers were carrying out maintenance. It was unclear what sparked the blaze.
“PDVSA created an investigation committee to investigate the causes of the accident,” the statement said. “PDVSA laments this incident and expresses solidarity with relatives and colleagues of these workers.”
Five injured in Kansas rig blast
Federal officials are investigating a Kansas rig explosion that left five workers injured.
It was not immediately clear who the operator at the drilling site was, but the people who were injured worked for Wichita-based contractor Murfin Drilling.
All of the workers were hospitalised, and two who were critically injured were flown out.
The accident occurred on the 12th December, reportedly during a drill stem test.
Wallace County Fire Chief Jay Sharp told the Associated Press that crews were adding pipe on a rig when gas “migrated up” and got onto the deck floor of a warming hut, which held running heaters.
Sharp said something sparked and caused the explosion.
Murfin has been cited seven times by the Occupational Safety and Health Administration (OSHA) since 2006, according to an AP report. This includes a 2008 fatality at a Kansas job site in which a worker was killed when struck by material.
Oil and gas conflicts throughout Africa in 2016
Several oil and gas-related fights and clashes broke out across the African continent in 2016.
North Africa saw a significant portion of conflicts, with Libya and Algeria in particular experiencing a number of attacks.
At the start of the year, Islamic State (IS) militants clashed with a force guarding Libya’s Es Sider oil port, with fighting taking place near the major export terminal, according to witnesses and troops. The attacks continued the next day, resulting in several deaths and fires among a number of oil storage tanks. The country’s Ras Lanuf terminal was also caught up in the carnage at the time, suffering from its own blazes and fatal fights.
IS is also suspected to have staged an attack on a water plant near the Sarir oil field in eastern Libya in March. An attempted assault on the 2nd April on an oil field in the country led to the death of two guards and it was later revealed that staff from three oilfields in eastern Libya had been evacuated because of fears of further attacks.
Militant clashes like these helped stem the production of oil in the country to well below pre-2011 levels. Libya’s oil output has fallen as much as 80 percent since 2011, according to Ruth Lux, a senior consultant within JLT’s credit, political & security risk division consulting team.
Shedding some light on IS’ tactics and its assault on Libyan oil and gas facilities, Ms Lux claims that these attacks were designed to ensure that the country remains a failed state and consequently vulnerable to further exploitation. This goes against the group’s approach in Syria and Iraq, according to Ms Lux, which revolved more around isolating and controlling energy facilities in order to generate revenue.
Tensions in the Libyan oil and gas industry were still high towards the back end of the year, with Western countries, including the United States, France and Britain, outlining in a joint statement that they were concerned by rising friction around the Zueitina oil terminal. Libya’s state oil company called on rival armed factions to avoid damaging the terminal in Zueitina, following reports of possible clashes at the eastern port.
Further straining the Libyan oil and gas industry, forces loyal to east Libyan commander Khalifa Haftar seized at least two key oil ports on the 11th September from a rival force loyal to the UN-backed government, risking a new conflict over the OPEC nation’s resources.
Meanwhile in Algeria, Al Qaeda’s North Africa branch attacked the In Salah gas plant, operated by Statoil ASA and BP P.L.C., with rocket-propelled grenades in March. The attack was said to have caused no casualties or damage, although the European oil and gas firms withdrew staff from the area as a precaution.
Following the assaults, Statoil and BP said that they remained committed to Algeria despite the ongoing threats to their facilities. The attack on In Salah followed a terrorist attack on the country’s In Amenas gas plant back in January 2013, which was unprecedented in the industry in terms of force and scale. Forty workers died during the crisis, which included a hostage situation after Islamist militants attempted to take over the facility.
Attacks in West Africa
West Africa was another area on the continent which saw more than its fair share of attacks during 2016.
In February, the Niger Delta Avengers (NDA) blew up a Royal Dutch Shell plc underwater pipeline, which forced the company to shut down its 250,000 barrel-per-day Forcados export terminal for weeks.
At the end of May, the NDA attacked the Escravos terminal in Nigeria, using explosives to damage the asset’s tank farm main electricity feed pipeline, which resulted in Chevron’s onshore activities in the Niger Delta being shut down. A few days later the Avengers blew up Chevron’s RMP 23 and RMP 24 wells.
These attacks were part of a series of assaults on oil and gas companies operating in the Niger Delta, which included the following incidents:
- An attack on Chevron’s Okan Valve platform offshore facility in the Western Niger Delta
- An explosion at a Chevron oil well at the Marakaba pipeline in Warri
- An explosion at a gas pipeline in Ogbembiri, Bayelsa state, belonging to Italy’s Eni. The attack impacted approximately 1,000 barrels of oil equivalent per day, according to an Eni spokesperson
- A crude oil pipeline in Bayelsa, operated by Eni subsidiary Nigerian Agip Oil Company, being damaged with dynamite
Assaults like this are still occurring in the region, with the latest comprising an attack on the Nembe Creek Trunk Line pipeline carried out on the 15th November.
The attacks on Nigeria’s energy infrastructure are sending shockwaves throughout the area as the disruption in supply poses a significant threat to the economy. During 2016, Nigeria’s oil production fell by almost 40 percent to 1.4 million barrels per day as a result of assaults on oil and gas installations in the Niger Delta, the country’s oil minister said.
These assaults were also having an effect on power supply in Benin, Togo and Ghana, which rely on Nigerian gas supplied through the West African Gas Pipeline, Verisk Maplecroft Senior Africa Analyst Malte Liewerscheidt commented.
Moving south-west to Angola, separatist rebels said on the 7th September that they killed 12 soldiers in the country, as part of a flare-up of violence in a region which produces half the state’s oil.
Lloyd’s 2017 subscription cut by 10%
John Nelson and Inga Beale, the Chairman and Chief Executive of Lloyd’s, have confirmed its 2017 subscription will be cut by 10 percent.
In a letter outlining their reasoning they stressed that the market will look to ensure it remains efficient for companies using it. “In these tough times we are continuing to review our costs and ensure we are set up to deliver our service to you in the most effective and efficient way possible. To this end, we are making changes to our organisational structure with effect from the 1st January 2017 as part of the Corporation Operating Model programme. Further changes will be announced in due course. We are reducing 2017 market subscriptions by ten percent.”
They continued by stressing that despite difficulties in 2016, the strength of Lloyd’s financial position has continued to improve, with ratings at an all-time high.
The letter read, “The Lloyd’s brand and reputation worldwide remains best in class for insurance. We are determined to protect these attributes and will be working hard next year to ensure that wherever we are operating, we do so in a way that is responsible, sustainable and in keeping with our preeminent position in the industry.”
Lloyd’s concerned for 2017 after insurance loss
Underwriters at Lloyd’s lost money in 2016, driving the 90-`+plus syndicates in the insurance market to be more selective in the risks they take on and forcing Lloyd’s to cut its subscription rates.
To tackle the downturn in premium rates, insurers would need to review their business plans for 2017 and exert the same “underwriting discipline” they had in 2016, Lloyd’s said on the 13th December in its annual end-of-year email.
Lloyd’s was also continuing to expand its global presence, Ms Beale and Mr Nelson said in the letter, with a reinsurance branch in India expected to get going in 2017 and discussions for a reinsurance license in Malaysia “at an advanced stage”.
As part of its preparations for Brexit, Lloyd’s was continuing to make the case to the British government for retaining current trading rights with the European Union, but was also finalising work on alternative trading options.
“This is designed to ensure the Lloyd’s market will be able to continue to trade with the EU – albeit with a different structure,” they said.
It is likely to set up a subsidiary in one EU jurisdiction to “passport” its services, industry sources say, although Lloyd’s could also open local branches across the bloc.
Berkshire Hathaway enters Canadian marine market
Berkshire Hathaway Specialty Insurance Company (BHSI) has said it is launching an inland and ocean marine insurance products unit in Canada and has named Gordon Rider as Senior Marine Underwriter.
Mr Rider, who is based in Toronto, comes to Boston-based BHSI from Chubb Insurance Company of Canada, where he was most recently Senior Marine Underwriter.
Barbican establishes UK marine division with new hire
The UK insurance arm of Barbican Insurance Group has set up a new marine division with the appointment of Sarah Joiner as a marine underwriter.
Based in London, Ms Joiner will report to Stuart Kilpatrick, Managing Director of Barbican Protect.
She has most recently served as Director and Underwriter at Argosy Underwriting Agency.
Five reinsurers secure approval to begin writing business in India
Five global reinsurers have secured a final licence from the Insurance Regulatory and Development Authority of India (IRDAI) to commence business operations in India.
IRDAI has granted R3 authorisation to give Hannover Re, Reinsurance Group of America (RGA), SCOR Global, Munich Re and Swiss Re direct access to the country’s growing insurance market.
Soft pricing and low profitability biggest challenges for re/insurers in 2017
A soft market squeezing profitability in the insurance and reinsurance market is the biggest concern for executives, according to a recent survey.
The re/insurance sector already faced comparatively low rates in 2016, but this has been at least partially offset by a benign large claims environment. But this could potentially be different in 2017, eroding profitability of the sector, which is already under pressure thanks to the low interest rate environment that is weighing on investment yields.
“Rates on the retail side have gone from soft to mush, deductibles have dropped and sub-limits are given away for market share in retail commercial property policies so that must result in primary carrier rate inadequacy at some point in future,” said Andrew Kiernan from Lighthouse Assurance.
James McAloon at Canopius Syndicate believes that soft prices will be the biggest challenge in 2017 as a consequence of “excessive capacity” in the sector.
In the search for higher yields in a historically low interest rate environment, investors have piled into re/insurance, increasing capacity particularly in property/casualty, contributing to a soft market.
The biggest challenges for re/insurers in 2017 will be “soft prices, low profitability, rising claims, new competitors and securing the right talent,” believes Praveen Gupta from Raheja QBE General Insurance.
A large number of respondents also believe that decreasing demand and lack of growth opportunities will present a challenge for the re/insurance sector in 2017. Particularly large reinsurers such as Swiss Re have been saying that they will shed business if rates continue dropping and do not reflect the potential risk of the business.
Swiss Re believes that non-life re/insurance premium will be “modest” in 2017, according to its “Global insurance review 2016 and outlook 2017/18”. Global primary non-life premium growth is forecast to be slightly weaker at 2.2 percent in 2017, compared with 2.4 percent in 2016. While premium growth in emerging markets is expected higher than that at 5.7 percent in 2017, the pricing environment in non-life will remain challenging.
Premium growth is expected to be “substantially higher” for primary life insurers than for non-life insurers, according to Swiss Re, driven by robust growth of savings products in emerging markets, particularly Asia. Global premiums are forecast to grow by 4.8 percent in 2017.
Massive 2013 oil spill in North Dakota still not cleaned up
Three years and three months later, a massive oil spill in North Dakota still is not fully cleaned up. The company responsible has not even set a date for completion.
Scientists who helped calculate oil spilled from a broken BP well into the Gulf of Mexico are questioning the methodology used to estimate the amount of crude that recently leaked from a ruptured pipeline into a wheat field in north-western North Dakota.
Tesoro Corporation said it came up with its more than 20,000-barrel spill estimate using ground analysis. But oil spill experts say a more accurate assessment would likely come from calculating how much crude went into the pipeline versus what was supposed to come out at its terminus.
Although crews have been working around the clock to deal with the Tesoro pipeline break, which happened in a wheat field in September 2013, less than a third of the 840,000 gallons which spilled has been recovered – or ever will be, North Dakota Health Department environmental scientist Bill Suess has said.
While the nearest home was a half-mile away and the state said no water sources were contaminated and no wildlife hurt, one of the largest onshore oil spills recorded in the US serves for some as a cautionary example, especially given a recent pipeline break about 150 miles south and ongoing debates over the four-state Dakota Access pipeline.
The break occurred on 6-inch steel pipelines – a part of a large network of pipelines which crisscross western North Dakota’s oil patch. By comparison, the Dakota Access pipeline is made of 30-inch steel and will carry nearly 20 million gallons daily.
The Tesoro spill was not far from where oil was first discovered in North Dakota in 1951.The Texas-based company and federal regulators have said a lightning strike may have caused the 2013 rupture in the pipeline, which runs from Tioga to a rail facility outside of Columbus, near the Canadian border.
North Dakota regulators initially thought just 750 barrels of oil were involved in the spill, but later updated the amount exponentially. They also expanded the affected acreage from about seven – the size of seven football fields – to about 13 acres, Mr Suess said. The clean-up has cost Tesoro more than US$49 million to date and is expected to top US$60 million, according to recent filings to the state.
Tesoro spokeswoman Destin Singleton said she could not immediately confirm the numbers, and noted the clean-up completion date remains unknown. The pipeline was monitored remotely, but the company has said the spill was not detected.
Crews have had to dig as deep as 50 feet to remove hundreds of thousands of tons of oil-tainted soil, Mr Suess said. The company has now switched to special equipment which cooks hydrocarbons from crude-soaked soil in a process called thermal desorption before putting it back in place.
Myanmar to open its doors to foreign insurers
Myanmar’s Finance Ministry’s Financial Regulation Department has said that the government plans to allow international insurers into the local market in 2017, as part of a liberalisation roadmap, the Myanmar Times reports.
“There is a requirement to open up the market because we need technical expertise and knowledge,” said U Soe Win Thant, General Manager of Myanmar-based general insurer Global World Insurance Company Ltd.
“We welcome foreign insurers, but allowing 100 percent foreign-owned insurers is very dangerous,” said Mr Win Thant, adding that this would risk “locking out” local firms from the market.
Skuld Marine Agency to launch; Skuld Hull restructured
Following Skuld’s acquisition of Gerling Norway/SMA (Scandinavian Marine Agency), from the beginning of 2017 Gerling Norway/SMA will be renamed Skuld Marine Agency (SMA).
Skuld will offer hull & machinery insurance through two H&M platforms, either separately or in a combination. Meanwhile Skuld Hull in Oslo will be reorganised.
Skuld 1897 Syndicate at Lloyd’s will continue offering H&M products through the Lloyd’s platform in the same manner as before, while SMA will offer H&M products from Oslo based on Skuld’s corporate security and led by the previous head of Gerling Norway/SMA, Tron Nummedal.
Skuld said that the main objective for Tron Nummedal will be to renew his existing portfolio in favour of Skuld. For Skuld, the priority remains to ensure that SMA brokers and policyholders “enjoy the same excellent service and competence that our existing partners and clients rely on”.
Lloyd’s to create EU unit in 2017
Lloyd’s is set to create a subsidiary elsewhere in the EU in 2017 as a response to uncertainty created by the EU referendum.
The result of negotiations to leave the EU could make it more difficult for UK businesses to access markets in the EU. Market participants fear that the UK may lose its passporting rights to do business in the EU without having to create a subsidiary.
In 2015, the EEA (European Economic Area) accounted for £2.93 billion, or 11 percent, of Lloyd’s gross written premium.
Lloyd’s has said that four percent of its £26.6 billion global gross written premium is likely to be affected by the UK’s withdrawal from the EU’s single market.
In order to secure access to the EU market, many re/insurers are looking at creating a subsidiary elsewhere in the EU and transfer business to the new unit.
“Following the referendum we committed to looking at the options that would allow the Lloyd’s market to continue trading seamlessly with the EU. This included establishing a subsidiary model amongst others,” a Lloyd’s spokesperson said.
“We will continue to develop our plans on creating a subsidiary and will provide a detailed update to the market on the progress we have made early next year.”
Potential locations for such a subsidiary are Dublin, Frankfurt and Paris, all of which have been lobbying to attract business from the UK after the Brexit vote. The move is set to cost Lloyd’s tens of millions.
The Financial Times had reported first that Lloyd’s is set to choose a destination from a short list of five cities and is likely to put a proposal to its members by February 2017. Lloyd’s could not confirm which cities are included in the list.
After a subsidiary has been created, syndicates will decide on how much business they will want to transfer to the new location and seek regulatory approval for the move.
Another London insurer eyes Dublin as Brexit looms
Neon Underwriting Ltd. may set up a Dublin business to sell insurance policies throughout the European Union if Britain loses access to the single market, Chief Executive of the specialist Lloyd’s insurer said on the 15th December.
Lloyd’s is working on plans to move some business to the European Union, aiming to be ready for the shift as soon as Britain starts divorce proceedings from the bloc.
“We are looking at our own plans as well should the Lloyd’s contingency plans not work out or should we feel that our plans may be better suited for us,” Neon CEO Martin Reith told reporters. “That would include potentially a Dublin platform with passporting rights across Europe, to give us access to the business that we need.”
Neon, which earns about 20 percent of its premiums from Europe, is a member of Great American Insurance Group, whose members are subsidiaries of American Financial Group, Inc.
American Financial Group already has a Dublin base, Mr. Reith said.
Axis Capital to move London office next to Lloyd’s as it grows UK operations
Axis Capital Holdings is set to relocate its London office to a new skyscraper called The Scalpel in 2018, adjacent to Lloyd’s of London at 52 Lime Street.
Axis has rented two levels in the 36-storey tower with an area of 31,500 square feet. The Bermuda-based re/insurer, which provides specialty lines insurance and treaty reinsurance globally, will be among the first tenants in the tower.
“By moving to The Scalpel, we will provide our employees and clients with the benefits of maintaining an office in a world-class facility which is within steps of Lloyd’s of London,” said Mark Gregory, Chief Executive Officer of Axis’ international division.
“This move speaks to the continued growth of Axis Capital’s UK operations and our deep commitment to the London market.”
Probitas Syndicate backer Istmo Re downgraded after regulatory intervention
Istmo Compañía de Reaseguros (Istmo Re), the Panama reinsurer which backs Probitas Syndicate 1492 at Lloyd’s, has been downgraded from ‘B’ to ‘E’ by A.M. Best following the intervention of its regulator in Panama.
The rating ‘E’ means a company is under regulatory supervision and reflects a regulatory intervention at the company on the 12th December by the Superintendent of Insurance and Reinsurance of Panama (SSRP).
The action was taken for several reasons including Istmo Re failing to cover the minimum regulatory requirements for paid capital, presenting an inferior ratio of net premium to net surplus to that required by regulation and relying on insufficient assets to integrally satisfy its liabilities.
SSRP’s notice of intervention and findings came after its review of the company’s unaudited third quarter financial statements, and an on-site regulatory inspection at Istmo Re’s offices.
Istmo Re had provided the regulators with an action plan dated the 5th September, under which it would sell its assets and reduce its outstanding debt over a three-month period.
However, as of the 1st December, no actions had been implemented and the regulator intervened.
A.M. Best said it will closely monitor the ratings of Istmo Re and its subsidiaries, which include Liffey Reinsurance Company Designated Activity Company (Liffey Re), based in Ireland, and Aseguradora del Istmo, based in Panama.
The chief executive of Probitas Syndicate 1492 at Lloyd’s has said the syndicate may move to find a buyer for the capacity and shareholding in Probitas provided by Istmo Compañía de Reaseguros (Istmo Re), the Panama reinsurer now under regulatory supervision in its home market.
QBE’s Pryce appointed to Lloyd’s Franchise Board, succeeding Furlonge
Lloyd’s has announced that Richard Pryce, CEO for QBE European Operations, has been appointed by the Council of Lloyd’s as a non-executive director of the Franchise Board, the body which is responsible for the day-to-day running of the Lloyd’s market.
Mr Pryce will serve as a market connected non-executive director, and is replacing Nicholas Furlonge, who has retired from his role on the board after nine years of service.
Mr Pryce will serve an initial term of three years.
Markel hires head of cargo from XL Catlin
Specialist insurer Markel International has appointed Ryan Godfrey as Senior Underwriter and head of the cargo team within its marine, energy and property division.
Mr Godfrey joins Senior Underwriter Richard Burnett, under Marine Managing Director Chris Fenn.
Mr Godfrey joins Markel from XL Catlin where he has been Cargo Class Underwriter for the last eight years.
He will be responsible for broadening Markel’s broker relationships.
Steadman named head of cargo at Novae
Helen Steadman has been recruited from the Mitsui Sumitomo Syndicate to be Head of Cargo at specialist Lloyd’s insurer Novae.
At Mitsui Ms Steadman was Class Underwriter for cargo. She had previously worked on the broking side with Marsh and Willis.
ArgoGlobal poaches Endurance head for marine team
Lloyd’s insurer ArgoGlobal has appointed Michael Thompson as Hull Class Underwriter. He will report to Head of Marine Steve O’Gorman.