The Intelligent Quarterly from the publishers of The Insurance Insider

Summer 2018

Search archive


A touch of class

A fire at a state-owned Abu Dhabi oil refinery in January now looks set to cost (re)insurers well over $1bn, biting into an excess layer with a large AIG line.
Sources told sister publication The Insurance Insider that physical damage resulting from the inferno at the Ruwais facility constituted the largest portion of the loss, at about $800mn.
However, disruption to a neighbouring plastic plant has also inflicted hundreds of millions of dollars of contingent business interruption losses.

UK retail giant Tesco has come to the London cyber market to secure a £400mn ($520mn) tower that has Beazley as the primary lead insurer.
The cyber placement is said to be one of the largest to have been written in London, and required almost all London markets to put down lines in order to meet the requested limit.
Beazley is understood to have written the £50mn primary layer via its capacity arrangement with Munich Re. The primary layer sits above a £10mn deductible, with AIG then leading the excess.
The rest of the tower is filled by the London market and taps the usual prominent cyber players such as Novae, Brit and Liberty.

Aviation underwriters and their representatives have agreed on new policy wording to limit the impact of Brexit on multi-year insurance coverage.
The Aviation Insurance Clauses Group published the model EU continuation clause after a four-month consultation.
The clause stipulates that a (re)insurer can transfer the policy to another member of the same group under the same terms should it be unable to continue to provide cover after Brexit.
The transfer must be completed at least 45 days before the exiting carrier's right to provide coverage ends, and must be notified to the (re)insured via the broker within 10 days of the transfer.

US commercial
Rates in the US commercial P&C market showed signs of starting to flatten in July, although carriers stopped short of saying the market had finally found a bottom.
On an earnings call following Chubb's second quarter results, chairman and CEO Evan Greenberg said insurance rates had been either flat or the rate of decline had slowed in recent quarters, with rate increases seen in US commercial auto and US excess and surplus casualty. US directors' and officers' insurance also renewed flat.
However, reinsurance rates continued to fall on the whole, albeit at a slower rate than in previous years. XL Catlin said it experienced average rate decreases of 1 percent in reinsurance, and as much as 3 percent in global catastrophe business.
And quota share reinsurers are still absorbing the pressures faced in primary markets, according to Axis CEO Albert Benchimol, which led the carrier to reduce its participation or exit some treaties entirely.


Iowa start-up Crop Pro Insurance Services has passed two milestones by raising $8mn in venture financing and obtaining federal approval to offer US-backed agricultural cover.
The company is operating as an MGA and is based in Johnston near Des Moines.
It plans to offer multi-peril crop and hail cover in collaboration with both the US Department of Agriculture's Federal Crop Insurance Corporation and GuideOne Mutual Insurance in 13 upper Midwest states from next spring.
Co-founder and president Joe Young previously led AmTrust Agriculture Insurance Services as CEO and has held senior roles at The Climate Corporation and at John Deere's insurance arm.

A majority of insurers on the $500mn limit primary layer of SBM Offshore's construction all risks policy have settled with the Dutch-based offshore energy specialist for $247mn after a long-running legal battle.
In a stock exchange announcement in July, SBM said carriers providing 73.6 percent of the insurance on the Zurich-led layer had agreed to a cash payment.
However, it added that legal action against the remaining insurers, including those on two excess layers, remained ongoing pending a trial scheduled to begin in October next year.
The claim relates to the Yme North Sea mobile offshore production unit, which was dismantled after structural deficiencies were discovered in the platform's base in 2012.

This article was published as part of issue Autumn 2017

Euromoney Trading Limited - 3rd Floor, 41 Eastcheap, London, EC3M 1DT, United Kingdom. The content of this website is copyright of Euromoney Trading Limited 2018. All rights reserved Euromoney Trading Limited actively monitors usage of our website and products and reserves the right to terminate accounts if abuse occurs.