The Intelligent Quarterly from the publishers of The Insurance Insider

Summer 2018

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Regulatory overhaul
A pair of Indian insurance experts have called for the country's watchdog to "step up to the plate" and transform the national insurance market.
The paper authored by H Ansari, former member of the Insurance Regulatory and Development Authority of India (Irdai), and Arun Agarwal, a former Lloyd's representative, proposes that Irdai shifts from a principles-based regulatory regime to a risk-based approach, and that India abandons its dual licensing regime between Mumbai and Gujarat.
In addition, the paper suggested harmonising the country's regulatory bodies in Mumbai, rather than having them spread between the capital, Gujarat and Hyderabad, as they are now.
The authors also called for the regulator to move away from tick-box enforcement to an agenda more focused on outcomes, and for Irdai to abandon the protectionist measures that give GIC Re first refusal on reinsurance business.


Reinsurance market reopens
Argentina's Superintendent of Insurance, Juan Pazo, has detailed plans to reopen his country's market to foreign-owned admitted reinsurers.
Speaking in June at an insurance event in London organised by the Argentine government, he hailed the reform as part of President Mauricio Macri's wider economic plan to "reinsert" Argentina into the global economy.
Pazo said that from 1 July of this year 50 percent of reinsurance could be placed with foreign-owned admitted carriers, which would rise to 60 percent at 1 July 2018 and 75 percent the following year.
Facultative and catastrophe covers with sums insured exceeding $35mn will be 100 percent liberalised.
The superintendent described the decision by the preceding administration of Cristina Kirchner to fence off and effectively nationalise the reinsurance market as part of a package of exchange controls as "really weird". He described the 26 home-grown reinsurers that sprang up in their wake as merely "brokers" that did not retain sufficient risk.


Hiscox backs Lloyd's Brussels
Hiscox CEO Bronek Masojada confirmed that his company intends to use Lloyd's Brussels for its European big-ticket business.
Speaking to sister publication The Insurance Insider following the firm's half-year results, Masojada said Hiscox would set aside EUR50mn ($59mn) to capitalise its Luxembourg hub, which will support its existing Hiscox Europe retail unit.
The carrier's European big-ticket business will then be written via Lloyd's Brussels, which the Corporation aims to have up and running by 2018.
This quarter also saw MS Amlin choose Brussels for its post-Brexit EU hub, following in the footsteps of QBE and Lloyd's.
Amlin Insurance Societas Europaea SE CEO Kim Hvirgel said: "This is a strategic move that ensures our European brokers and clients experience no disruption from the UK's exit from the EU."

New Zealand

Regulator blocks Suncorp Tower bid
The New Zealand Commerce Commission has blocked Suncorp's agreed takeover of the country's third-biggest insurer, Tower.
The antitrust regulator said the NZ$236.1mn ($175.4mn) acquisition by Suncorp subsidiary Vero of 100 percent of Tower risked damaging competition in the personal insurance market.
Commerce Commission chairman Mark Berry said: "Without the competition that Tower provides, there is a real risk that consumers would end up paying higher prices for insurance cover while receiving lower quality, such as reduced insurance coverage."
Suncorp said it was "disappointed" with the Commerce Commission's decision. CEO Paul Smeaton argued the proposed takeover would not substantially lessen competition in the New Zealand market.
Tower said it is awaiting the regulator's reasoning and will work with Suncorp's Vero unit to "assess the implications" for the planned takeover. Suncorp's Vero initially offered NZ$1.30 per share for 100 percent of Tower in February this year.

This article was published as part of issue Autumn 2017

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