Beale mulls ILS solution to protect Lloyd’s market using new UK regs
to be serviced in the same way while new
regulations are agreed.
“We need a grandfathering arrangement
in place whereby there will be continuity for
contracts during and after the transitional
process,” she said.
“There is no way the courts are going to
be able to cope with so much business being
transferred to different subsidiaries so we need
a transitional arrangement in place for as long
as possible. We cannot have a situation where
we cannot pay claims.
“This is very important. There is no benefit
to anyone if something is not agreed on this. All
the regulators concerned understand this but it
is important that a grandfathering arrangement
is put in place.
“We have not completely given up on retaining
full market access but I don’t know how likely that
is. We have obviously taken our future into our
own hands by committing to an office in Brussels
to ensure continuity but a solution does need to
be found so that existing polices and claims can
be dealt with after Brexit is complete.”
Beale said Lloyd’s remains on track to get its
Brussels hub ready to take business in time for
the January 1, 2019 renewals—well ahead of the
likely timing of the UK’s formal departure from
the EU. The formal application for a licence will
be submitted soon and it will start considering
hires and finding an appropriate location for the
office after that, she concluded. n
protections and services they need access to
keep their businesses running,” he said.
Allianz has centralised its reinsurance
management within Allianz Re, which buys
reinsurance cover to manage and reduce
volatility. It also buys capital-driven reinsurance
in order to take out tail exposures. As a result
of the centralisation, Allianz is buying less
(Continued from top of page 1) interested in ILS
deals issued from London. She believes it
represents a very positive move for London at a
time of uncertainty in other areas.
“Once this comes into force, it is really good
news for the London Market—it fills a gap in
our financial services offering that I think the
market will use. We recently hosted a gathering
of the Geneva Association’s chief investment
officers and their reaction was very positive.
“There is capital swilling around and this
gives us and our members access to that capital
to pass off some of our risks. In the context of
some of the other uncertainties the UK is facing,
such as Brexit, this is very good news,” she said.
In terms of Brexit, Beale said Lloyd’s was
using all available channels to try to influence
the negotiations in a positive way. It is
working through representative bodies such as
TheCityUK, the Association of British Insurers
and the LMG to ensure that a consistent
message is being delivered to politicians.
“I think we have the attention of the relevant
people who can influence what we want,” she said.
She does have real concerns about some
aspects of Brexit, however. Her biggest worry—
and the main focus of the market’s lobbying
at this stage—is around ensuring transitional
arrangements are in place to ensure in-force
policies and outstanding claims can continue
Powered by: C ARLO TWedOnesday DSeptemAber 13Y, 2017
Lightyear’s Sullivan backs
‘prize asset’ Ed as CEO
reveals talks with McLaren
Martin Sullivan, the former chief executive
Beale mulls ILS solution
to protect Lloyd’s market
using new UK regulations
INTELLIGENT INSURER’S MONTE CARLO TODAY
IS PUBLISHED BY NEWTON MEDIA LIMITED.
of AIG and now a partner in Lightyear
Registered Address: Kingfisher House,Capital,
has denied rumours that the private
Lloyd’s is exploring the possibility of
equity firm is looking to sell its stake in broker
issuing insurance-linked securities (ILS)
Ed—of which he is also non-executive chairman.
21-using be issued 23 new regulations Elmfield that will allow them from the UK to protect its central
BR1 1LT, United “We will sell Kingdom
Ed one day—we are a private
equity fund. But that will not happen any time
fund, Inga Beale, chief executive of Lloyd’s,
soon,” he told Monte Carlo Today. “Ed is a prize
Email:told Monte Carlo Today.
asset for us and that does mean we get incoming
Beale said that once new regulations
enquiries. But we have agreed a strategy and we
allowing ILS issuance from the UK come into
are fully behind them executing that plan. We are
www.force—expected year—she is newtonmedia.in the fourth quarter of this
completely committed to seeing that through.”
keen to help kick-start a London
A fundamental restructuring of the broker was
ILS market, ideally by helping pave the way for
kick-started when Steve Hearn, chief executive of
some early deals.
Ed, took the reins of the company in November
One tactic to achieve this is by working
2015. He had resigned from Willis, where he had
with the London Market Group’s (LMG) ILS
been deputy CEO, four months earlier.
taskforce led by SCOR executive Malcolm
At that point, the company was saddled with
Newman, which is exploring a possible deal
$400 million of debt and had a complex network
Nicholas designed to cover emerging Lipinski
of operations. The business cleared the debt
While Lloyd’s will encourage its members
by selling Swett & Crawford for $500 million to
to leverage the new ILS framework in the
BB&T. The company also received a $35 million
UK, Beale said that she was also exploring the
capital injection from Lightyear Capital.
YOUR possibility of using CONTACTS it to benefit the market as
“It is early a whole.
yet but we will IN days and MONTE nothing concrete exists
Hearn then set about reorganising and
also explore the possibility of
the company. (Continued on page 4)
“My guess, watching how quickly the capital
Lloyd’s using this form of risk transfer centrally,
Wyn markets can work, is that we will see some rapid
on the behalf of the entire market.
issuance using Jenkins the new facility,” Beale MANAGING said.
“The main focus for now EDITOR
is how members
Bermuda:Re+ILS Roundtable p20
“The LMG is going to look at this and
could benefit individually, but there is a way we
Telephone:get something going around uninsured possibly in emerging markets. It +44 risks,7715
can use it to 770 benefit the entire market.”
Time to shine after the
would be good
Beale said she had received 468
storms have passed
to see something like that launched quickly.
from investors (Continued on top of page 2)
John Walsh PUBLISHER
Telephone: +44 7803 047 986
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No part of this publication may be reproduced,
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The views expressed in Intelligent Insurer’s Monte Carlo
Today are not necessarily those shared by the publisher,
Newton Media Limited. Wishing to reflect the true
nature of the market, the editor has included articles
and opinions from a number of sources, and the views
expressed are those of the individual contributors.
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The publication of advertisements does not represent
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Intelligent Insurer – ISSN 2041-9929
Allianz may seek additional reinsurance protection for cyber
Allianz is pondering whether it should
buy more cyber coverage, Amer Ahmed,
CEO of Allianz Re, which handles the
insurer’s reinsurance buying programme, told
Monte Carlo Today.
The insurer is already buying specific cyber
reinsurance policies in some instances, but
there might be demand for more, he said.
“It starts at the front in terms of what cyber
risk exposures you take on and what clients
want to buy. As this develops and evolves we
will have to look at what reinsurance we need
for that specific risk,” Ahmed said.
Cyber cover is seen as one of the few growth
opportunities in the current soft market. Gross
written premium of the global cyber insurance
market is expected to grow to $8.6 billion by 2020
from $3.4 billion in 2016, according to Munich
“It is an ever-growing exposure which is
beginning to be better understood by everybody
in the chain,” Ahmed said.
Demand for cyber protection is growing on the
back of cyber attacks (Continued on bottom of page 2)
THE FUTURE OF FARMING?
JUST ADD A LOT MORE WATER.
reinsurance while allowing the organisation to
buy it in a more efficient way.
However, future reinsurance purchasing
volumes will depend on what Allianz wants
to optimise and what the market’s appetite
and offerings are, Ahmed explained. Allianz
is pushing digitisation within the group which
might affect the reinsurance purchase in terms
of quantity and speed, he noted.
For the upcoming renewals, Ahmed expects
prices and conditions to remain relatively
stable. However, this will partly depend on the
loss scenarios on the hurricane front, he noted.
“Any place where there has been a major
loss activity or major change in exposure I
would expect a reinsurance cedant then to
talk in more detail in terms of both price and
conditions,” he concluded. n
Allianz may seek additional
reinsurance protection for cyber
(Continued from bottom of page 1) which have affected
several industries and regions in the world recently.
A massive ransomware worm dubbed WannaCry
hit several organisations such as the UK National
Health Service and Spain’s telecoms firm
Telefonica in 2017. In June, many organisations in
Europe and the US were crippled by a ransomware
attack known as Petya.
For Ahmed, who buys reinsurance coverage
for the Allianz group, demand for additional
cyber protection will depend on what the
different Allianz units require.
“There is a lot of discussion about it. It’s
still evolving, but as each of the incidents come
to light it becomes more of a focal point for
any enterprise to consider what risk they face
and how they want to mitigate it and what
2 | MONTE CARLO TODAY | DAY 4: Wednesday September 13 2017
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