The Intelligent Quarterly from the publishers of The Insurance Insider

Summer 2018

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A touch of class

Underwriters in the airline market are reported to have secured 3 to 5 percent increases in lead premiums in the key fourth quarter renewals, after 15 years of downward pricing pressure.

London market sources canvassed by sister publication The Insurance Insider said in the aggregate the increase broadly tracked exposure growth in the market, with renewals roughly flat for leaders on a risk-adjusted basis.

However, composite premiums rose more strongly, with exposure-adjusted rates up by single digits as following markets closed the gap with leaders after a disciplined showing.

The tone from some underwriters remained downbeat, with rates well below technical levels, but other sources were hopeful that Q4 renewals could presage a turn in the market.

Pool Re CEO Julian Enoizi said the UK terrorism reinsurer had sealed a "clear gap" in its cyber terrorism coverage as it outlined plans to provide cyber physical damage reinsurance.

The coverage extension, which takes effect on 1 April 2018, will protect against property damage and direct business interruption caused by terrorist hacks.

At the Pool Re launch event in London, Enoizi said the new coverage will be part of standard property policies purchased from Pool Re members.

Pool Re chief underwriting officer Steve Coates added that the retrocession market had agreed to include the coverage next year, on condition it did not extend to contingent business interruption caused by cyber terrorism.

21st Century Fox has agreed to settle a shareholder derivative lawsuit arising from the sexual harassment scandal that enveloped the Fox News network last year.

Representatives from 21st Century Fox confirmed that the $90mn settlement would be funded by the company's directors' and officers' insurers.

The settlement provides that the individual defendants and the estate of the late chairman and CEO of Fox News Roger Ailes, who was ousted from Fox amid a sexual harassment scandal, will "cause their insurers to make a payment" of $90mn to the company.

Professional indemnity
Brit is withdrawing from the international professional indemnity (PI) market, according to sister publication The Insurance Insider.

It is understood that members of the carrier's UK and international PI team in London are in consultation with Brit over their roles.

The team is led by class underwriter Daniel Mitchell, who is supported by underwriters Patrick Ruffell, James Russell and Alannah Paul.

Jonathan Mudd, divisional director for professional lines, has ultimate oversight of the PI division, which includes North America, although Brit's North American PI business is unaffected by the decision.

Brit declined to comment.

Product recall
Global confectionery giant Mars is claiming for $50mn-$60mn on its product recall policy after it recalled thousands of chocolate products over fears of potential salmonella contamination.

It is understood that Allianz Global Corporate & Specialty (AGCS) leads the London-placed policy with a $25mn layer in excess of a $25mn retention.

It is further understood that Talbot leads the following excess layer on the Aon-brokered placement, with XL Catlin also on the stack.

In June, Mars issued a precautionary recall of Galaxy Milk bars and counters, Minstrels and Maltesers chocolates with best-before dates of 6 May 2018 and 13 May 2018 for sale in the UK and Ireland.

Crisis management
Liberty has confirmed it is withdrawing its crisis management offering in both the US and the UK "following a strategic review".

The crisis management product includes contaminated products insurance, product recall and kidnap and ransom.

In a circular to brokers, Liberty International Underwriters (LIU) said the decision was part of the ongoing integration of Ironshore and Liberty.

It is understood that the 11-strong LIU US team - which includes Jane McCarthy and transferred Liberty Specialty Markets (LSM) senior underwriter Julie Ross - and a team of four at LSM in London are all in consultation with Liberty over their future roles at the company.

This article was published as part of issue Winter 2017

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