Acapella Hires Lloyd's Enforcer as Chief Underwriting Officer
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Acapella Hires Lloyd’s Enforcer
as Chief Underwriting Officer
Fledgling Lloyd’s underwriter Acapella has hired market veteran David Indge as
Chief Underwriting Officer. Indge has over 30 years’ experience in the international
(re)insurance markets, having spent the last 10 years in the Lloyd’s performance
management directorate as Head of Class of Business Underwriting Performance. After
starting life in 2012 as Special Purpose Syndicate (SPS) 6110, which was overseen
by Ironshore’s Lloyd’s managing agency Pembroke, Names-backed Acapella formally
launched Syndicate 2014 on 1 January. Indge’s appointment is the next step in building
out the platform headed by Accident and Health (A&H) veteran and former Hiscox Head
of Specialty David Bruce, alongside Property Treaty specialist Toby Stubbs, previously
of Brit and Aspen. Acapella writes a combination of Property Catastrophe, A&H and
Specialty business and has a stamp of £75m ($125.2m) this year, up from £45m in 2013. There has long been speculation that global
broker Willis could participate in providing capital for the venture in the future. Willis Re CEO John Cavanagh has been advising
the business on its rollout, and the broker is understood to have had discussions last year with Lloyd’s about its future involvement in
Acapella. According to a number of sources, the options discussed included Willis taking a stake in the venture. The NYSE-listed firm
could become the first multinational broker to have a controlling interest in a Lloyd’s (re)insurer since the rules on broker ownership of
syndicates were relaxed in 2009.
Ace Unveils Global Cyber Division
Global insurer Ace has announced the launch of its Global Cyber Risk Practice, which is aimed at tackling increased demand for cyber
risk insurance. The division is also set to address new risks that might be exposed as legislation on privacy and data breaches evolves
in countries around the world. The unit will be led by Philadelphia-based Toby Merrill, who has been appointed the division’s Senior
Vice President. Previously, Merrill was Vice President and National Product Manager for Ace’s network security, privacy and technology
errors and omissions liability products in the US. He will report to both Tim O’Donnell, Executive Vice President of Financial Lines at Ace
Overseas General, and Scott Meyer, Division President of Professional Lines at Ace US. The launch follows the recent publication of
Ace’s Emerging Risks Barometer, which surveyed 650 companies across Europe, the Middle East and Africa. The study showed that risk
managers consider cyber one of the top three emerging risks most likely to have a financial impact on their business over the next two
years. O’Donnell commented: “Our new Global Cyber Risk Practice represents a further commitment to provide seamless coverage for
our multinational customers around the world. Toby’s proven underwriting success, demonstrated industry-leading knowledge regarding
emerging cyber risks, and his track record in building broker and client relationships will be a strong support and complement to Ace’s
dynamic local underwriting teams here in Europe.”
-2-
AIG Europe Loses Financial Lines
Leader
Peter McKenna, American International Group (AIG)’s Head of Financial Lines for Europe, the
Middle East and Africa (EMEA), has reportedly recently left the insurer. While the details relating
to his departure are unknown, the move comes shortly after AIG UK CEO Nicolas Aubert
emphasised that the firm was a “prominent player” in the Financial Lines markets. Speaking in an
interview with The Insurance Insider ahead of McKenna’s departure, Aubert said AIG Europe was
now seeing “significant” growth in classes such as Professional Indemnity. “We have a very large
position in the market,” he said, adding that it generated “some growth prospect potential”. Aubert
said that AIG Europe had a “nice” position in the “best part” of the Financial Lines market. “It’s a
good universe,” he said. Last month AIG UK, which draws upwards of 80% of its premium from
the London market, reported a combined ratio of 84% and an underwriting profit of £181m. At the same time it disclosed that its net written
premiums had risen by 6% to £1.19bn, marking a return to growth after a period of retrenchment. Aubert said that much of the growth
reflected the insurer’s high limits strategy, which has seen it offer capacity of up to $1.5bn for property risks globally since the second half of
2012. The AIG executive said that the improved result reflected more than two years of “remediation” work where it had retreated from UK
solicitors’ Professional Indemnity business and from municipal and local government risks. But Aubert’s central message was that following
a challenging period for the business during the financial crisis, AIG was ready to grow again in London.
Brown to Leave RSA for AJ Gallagher
UK insurer RSA has announced the resignation of Adrian Brown, its long-serving Executive Director and CEO of its UK and Western
Europe business. Brown is set to join AJ Gallagher International as Executive Chairman of Underwriting and Distribution, taking over
from John Hastings-Bass, who will focus on developing international business outside the UK as Chairman of Asia-Pacific. Brown
will continue in his executive role until a replacement is found, RSA said. AJ Gallagher International CEO David Ross said: “Recruiting
Adrian is a huge hire for us. At a time of our own transformational change, the opportunities for expansion and growth within personal
lines broking and underwriting remain substantial. I know that Adrian will prove an inspirational force for our business leaders.” Stephen
Hester, CEO of RSA, commented: “Adrian has served RSA with distinction for 25 years, including since 2008 as CEO of our UK
business. He has many friends here and in the industry and we are grateful for all he has done for RSA.” Brown is the latest senior
manager to leave the organisation following its well-publicised difficulties in 2013. Accounting irregularities at RSA’s Irish business and
heavy autumn windstorm claims late last year caused a capital shortfall, forcing the insurer to issue three profit warnings within six weeks.
RSA’s troubles culminated in the departure of Group CEO Simon Lee, the arrival of former RBS boss Hester as his successor and a
£773m rights issue to shore up the firm’s balance sheet.
AmTrust Bullish on Italian Med-Mal
Hard Market
Major Italian Medical Malpractice writer AmTrust remains bullish about the
profitability of the business in 2014 despite cutting back its top line last year. In
its 2013 report and financial statements, recently filed with Companies House in
the UK, the insurer’s AmTrust Europe Ltd subsidiary said the market for Italian
Medical Malpractice “remained firm” last year. It said premium volumes were
“somewhat reduced” but still comparable to the prior year, with the majority of its
portfolio being renewals. “Strategy continues to be to retain profitable accounts
where data integrity is high. This has the benefit of obtaining a greater degree
of certainty over class performance due to the ability to experience rate,” the company reported. “The executive are confident that with
solid and consistent underwriting, backed up by actuarial rigour and professional claims handling, attractive profitability should continue
to be achieved,” it continued. Overall gross written premium (GWP) at AmTrust Europe was down 3% to £339.5m as pre-tax profits
dropped 12% to £39.8m. The combined ratio improved, however, by 7 percentage points to 71%. The insurer’s Liability book accounted
for $186.1m of its GWP, down from £219.9m in 2012, and generated a net technical profit of £18.9m – up from £11.6m in the prior year.
Miscellaneous and pecuniary loss accounted for the majority of the rest of the company’s book, with GWP of £118.4m in 2013, up from
£101.5m in 2012. The bullish outlook on Italian Medical Malpractice comes after Andy Doré’s Lloyd’s Syndicate 2526 reported that the
Italian content of its Med-Mal book “helped produce yet another double-digit rate increase of 15%” in 2013. AmTrust has significantly
grown its Italian Medical Malpractice book in recent years, from nothing as recently as 2008 to an estimated EUR400m ($540m) of annual
premiums, a significant chunk of which is written on the paper of its European platform.
-3-
Brit Hires Latin America Head
Brit Insurance, the private equity-backed Lloyd’s carrier that floated on the London stock market last month, has appointed former
PartnerRe executive Juan Calvache to head up its new Latin American business. Calvache will be based in Miami and has been tasked
with developing Brit’s Facultative Property operation in the Caribbean and Latin America. He takes up the new role in May after a decade
at PartnerRe, during which he built up the Bermudan reinsurer’s property facultative team. “Juan brings the pedigree and expertise
imperative to a successful Latin American launch,” said Nick Davies, President of Brit Global Specialty USA. “Latin America is a natural
evolution of our international strategy and the prospering Miami market is currently the right place to access it from.” Brit, led by Chief
Executive Mark Cloutier, floated on the London Stock Exchange on 28 March at 240p per share, valuing the group at £960m. The stock
has since drifted lower amid investor worries about softening reinsurance prices. When it announced its intention to go public, Brit said it
had identified “profitable growth opportunities” from extending its distribution network into new territories.
Catlin Leads New Asia Aviation
Consortium
Catlin, operator of the biggest syndicate at Lloyd’s has launched a consortium at the
326-year old market’s Singapore outpost to write Asian General Aviation business.
The group, established on 1 April, is led by Catlin with backing from Lloyd’s peers
Amlin, Talbot, and Argo Global. The consortium offers capacity of $15m for capacity
for Hull risk and a further $15m for Spares. Capacity for Liability risk is set at $150m,
and at $0.5m for Personal Accident risk. It will cover aircraft with up to 50 seats, and
will provide policyholders with dedicated underwriting and claims teams, so they don’t
need to negotiate with multiple insurers. “With the General Aviation Consortium, brokers and cedants can enjoy an enhanced and highly
competitive product offering through a convenient single point of contact, combined with the benefit of Lloyd’s ‘A’ rated security,” said
Bobby Heerasing, Chief Underwriting Officer at Catlin’s Asia Pacific operation. Catlin has committed to provide a line size of 45%, with
Amlin, Talbot, and Argo Global putting down 25%, 20% and 10% respectively.
Ivory Joins Brit from Catlin
Graeme Ivory, International Energy Casualty Class Underwriter at Catlin, is reportedly set to join Brit Insurance. The move is believed to
have been announced internally. Ivory is the son of Casualty market veteran Colin Ivory, who left his role as Senior Casualty Underwriter
at XL and moved to Allied World Syndicate 2232 late last year. The move has not been confirmed.
Endurance-Aspen
Hostilities Break Out over
$3.2bn Bid
Aspen Insurance Holdings has launched a counter-offensive
against its Bermudan peer Endurance after the latter made
public details of its rejected $3.2bn takeover bid in an effort to
force the target’s hands. The Insurance Insider reported on the
conflict when it revealed that Aspen’s board had rejected the
bid and refused to enter discussions about an enhanced offer.
In a relatively reserved statement, Endurance then appealed
for Aspen’s shareholders to urge the (re)insurer’s board to
enter talks with a view to a friendly transaction. But this was followed by a scathing attack from Aspen, which not only followed the
custom of arguing that the bid undervalued the company but also sought to dismantle the entire strategic rationale for the transaction.
Whispers that Goldman Sachs has been quietly canvassing other possible buyers for Aspen leaves open the possibility that the
company will sell, even if John Charman’s Endurance is unable to bring to bear sufficient pressure on the board to secure a deal.
Regardless of its insistence on its “proven track record of performance” and its “clear strategy to increase shareholder value”, Aspen is
now quite clearly in play and will have to fight tooth and nail if it is to guarantee an independent future. (cont overleaf)
-4- (cont.) It remains to be seen if Endurance and advisers Morgan Stanley and Jefferies will make use of the full range of hostile M&A techniques, including a tender offer and seeking to replace the board, in addition to a public relations blitzkrieg. Charman’s bid for Aspen represents the first major hostile bid in the specialty (re)insurance market since Validus wrecked the recommended Allied World-Transatlantic Re tie up in 2011. Endurance offered $47.50 per share for Aspen, which represents a 21% premium to the closing share price on 11 April and 1.16x trailing book value. Up to 40% of the transaction, or close to $1.3bn, would be funded in cash, with the balance in Endurance shares. The cash component would be partially funded by the issuance of $1.05bn of new Endurance shares to a group of investors led by London-headquartered private equity fund CVC Capital. Aspen’s share price surged after the news broke and was up 22.3% in pre-market trading at $48.15 – suggesting that the market thought an enhanced bid from Endurance or a rival bid may be forthcoming. However, the share price slid after its initial spike and was fell still further in the wake of the statement from Aspen, reaching $43.77. “Endurance’s ill-conceived proposal undervalues our company, represents a strategic mismatch, carries significant execution risk, and would result in substantial dis-synergies,” Aspen Chairman Glyn Jones said in a statement. “Furthermore, most of the consideration to Aspen shareholders would be in a stock that would reflect these problems.” He continued: “Endurance has a mixed operating track record, new leadership, an unproven strategy, and no experience with large acquisitions.” A letter from Jones and CEO Chris O’Kane to Charman was reproduced in full. “Your ‘proposal’ is merely the request for a one-way option to start an investigation of our company and later decide if you wish to pursue a transaction. The Aspen Board is vehemently opposed to the hostile attempt of Endurance to address its business problems at the expense of Aspen and its stockholders and to your potential effort to destabilise a key competitor.” The statement and letter launched a broad-based attack on Endurance, which seems to suggest that Aspen and Goldman Sachs have slammed the door in Charman’s face. The statement also attacked Endurance’s underwriting track record and strategy. “A combination would burden Aspen with Endurance’s unproven underwriting teams with no clear strategy; an unprofitable insurance business; and a volatile and challenged crop business.” Aspen explained in a footnote that it described Endurance’s insurance business as unprofitable as it had not made an underwriting profit on an accident-year basis between 2011 and 2013. The letter gave a particularly unforgiving assessment of Endurance’s Crop business. “With respect to business mix, Endurance is over-concentrated in Crop insurance, a business which is troubled, low margin, recently volatile and exposed to major risks,” it said. The letter also castigated Endurance for its stance towards Lloyd’s. “Endurance’s continued well-publicised antipathy for Lloyd’s is inconsistent with Aspen’s business model, as our Lloyd’s syndicate is one of the most dynamic parts of our insurance franchise and a top quartile performer amongst Lloyd’s syndicates,” it said. The Insurance Insider’s recent analysis of Lloyd’s syndicate results showed that in 2013 the syndicate reported a 97.4% combined ratio, against a market average of 86.8%, placing it towards the bottom of the third quartile. Aspen also stressed the execution risk attached to the deal. In addition to uncertainties potentially arising in due diligence, Aspen raised concerns about Endurance’s ability to finance the deal. Aspen also took aim at Endurance’s corporate culture. “Any combination with Endurance’s centralised, top-down management model, as compared to our collaborative, teamwork-oriented culture, would result in extreme personnel disruption and loss of attractive business.” “For the reasons outlined above, we are not interested in pursuing what your letter proposes and do not believe that any purpose would be served by meeting with you or your advisors,” the letter concluded. Endurance said it expected the combined company to generate synergies of more than $100m annually, which would be accretive to return on equity and earnings per share for 2015. Charman said that in order to reflect his “deep conviction” in the deal, he would purchase an additional $25m of Endurance shares. Since being parachuted in as Chairman and CEO in May last year, Charman has restructured Endurance to streamline management, de-risked its cat business and set about building out its specialty (re)insurance capabilities with a raft of high-profile hires on both sides of the Atlantic. In response to the Aspen rebuttal, John Charman told the Insider: “That’s a lot of value to leave on the table. Cut through the rhetoric, and this transaction is all about value and the fact that Aspen shareholders are being denied the opportunity to realise that value. We believe shareholders will see the limitations of the Aspen ‘go it alone’ plan, the value of the alternative we are proposing, and, in so doing, will make their views known to the Aspen board of directors.” Guy Carp Appoints Insurance CEO for Turkey Guy Carpenter has appointed Okan Utkueri as Managing Director and Head of its operations in Turkey. The reinsurance broker said that Utkueri will be based in Istanbul, reporting to Massimo Reina, Guy Carpenter’s CEO of Continental Europe & MENA. He will be responsible for all of the broker’s activities in the region. Utkueri has over 22 years of experience in the Turkish insurance market and prior to joining Guy Carpenter was CEO of Turkish insurer Eureko Sigorta. He has also been a board member of the Turkish Catastrophe Insurance Pool, the Turkish Agricultural Insurance Pool Management Company and the Association of Insurance and Reinsurance Companies. Nick Frankland, CEO of EMEA Operations at Guy Carpenter, said: “Turkey has witnessed a period of strong economic growth in recent years, creating significant opportunities for the reinsurance sector to play an increasingly prominent role.”
-5-
HCC International Appoints
Former Atrium CEO as
Chairman
Specialty insurer HCC has appointed former Atrium CEO Nick Marsh as
Non-Executive Chairman of the board of HCC International Insurance
Company and its Lloyd’s managing agent HCC Underwriting Agency. He
has replaced the outgoing John Bishop, who retired on 1 April. The insurer
also announced that former Hannover Re Managing Director Hans Rohlf
has been appointed as a Non-Executive Director of both companies. Rohlf
previously served as Managing Director of the German reinsurer’s North
American P&C business for 19 years, before retiring last year. Bishop handed over his chairmanship to Marsh at the beginning of April.
HCC said Marsh has spent more than 40 years in the Lloyd’s market. He held a string of senior positions including Active Underwriter for
Syndicate 570, Atrium CEO and Director of Underwriting until retiring last year.
Lancashire Founder Brindle Retires
Richard Brindle, the founder and group CEO of Lancashire Holdings Ltd, is to retire from the London-listed (re)insurer at the end of
this month. He will be succeeded on 30 April by Alex Maloney, who is currently Group Chief Underwriting Officer and Head of the firm’s
UK arm. Paul Gregory, Chief Underwriting Officer at the UK insurer, will become Group Chief Underwriting Officer. Brindle launched
Lancashire in late 2005 in the aftermath of hurricanes Katrina, Rita and Wilma. He has won plaudits for the firm’s consistent underwriting
outperformance and commitment to returning surplus capital to shareholders. Last year, in an apparent strategic volte-face, the firm
became a major Lloyd’s insurer with the £266mn acquisition of Cathedral. “I have piloted the company through its design, creation,
launch, establishment as a major player in its sector, business success, delivery of tremendous results to shareholders, and ability to
operate nimbly and intelligently in markets both hard and soft,” explained Brindle. He added: “Lancashire and Cathedral’s staff represent
a bench-strength of talent that is second to none in this market.” Despite the unusually short notice period, Numis Securities analyst
Nick Johnson was untroubled by the announcement, saying he is confident that the firm’s “unique underwriting culture” will remain
intact. “Under the leadership of Richard Brindle, Lancashire has matured significantly over recent years, which in our view leaves the
business well equipped to continue to prosper and deliver sector-leading returns,” explained Johnson. He continued: “Having had
reduced involvement in the day-to-day running of Lancashire for some time, the outright retirement of Richard Brindle was becoming an
increasing possibility. Although the relatively short notice and lack of ongoing directorship is somewhat unusual, we see this as consistent
with Richard’s unconventional approach and a clean break is potentially a preferable scenario.” Maloney, a former Zurich executive with
experience of both the New York and Bermuda markets, joined Lancashire at its launch and was initially responsible for establishing and
building its Energy business. He later became Chief Underwriting Officer and in July 2012 was appointed Head of Lancashire UK.
Marketform Hits Central Fund
With Fresh Cash Calls
Marketform has handed on more than £10m ($16.7m) of claims to the
Lloyd’s Central Fund in the last six months as the run-off of its Italian
Med-Mal portfolio continues to inflict pain on the market, its accounts
show. The Lloyd’s insurer, now owned by American Financial Group,
called £20m from its capital providers in October 2013 and a further
£20m in February this year after it exhausted its Funds at Lloyd’s. The
fresh recourse to Marketform’s capital providers overshadowed another
improvement in the carrier’s underwriting result, which saw it report a
significant improvement in its combined ratio to 101.3% and a return to profitability overall. American Financial Group and corporate
name Scor will have answered the cash calls as the open 2007 year of account continues to weigh on the company. However, Lloyd’s
will have been required to step in to fund the shares of Hermanus Underwriting Ltd and Ebury Underwriting Ltd, which provided 15%
and 14% respectively of capital for Marketform’s Syndicate 2468 in the relevant year. Hermanus and Ebury are owned by Marketform
founder Holly Bellingham and her husband Simon Turner, with the reinsurance capital provided by XL Group and Everest Re under an
arrangement that is common in the market. Neither Bellingham nor Turner are obliged to recapitalise the business and XL’s and Everest’s
responsibilities are at an end with the vehicle’s assets exhausted. Marketform has now been obliged to call a total of £182m to support
the blighted 2007 year of account, against stamp capacity of just £100m, with an estimated £32m of losses passed to Lloyd’s. These are
thought to be the largest losses to be handed on to the Lloyd’s Central Fund since Alleghany and Goshawk, each of which cost the fund
comfortably in excess of £100m in the mid-2000s.
-6-
Nexus to Launch Accident & Health Lines
Fast-growing London market managing general agency Nexus Underwriting Management has announced plans to launch a number
of new product lines writing Accident, Sickness & Travel cover on a direct and facultative basis. The new lines will provide coverage with
an event aggregate limit of up to £12.5m, the company said. The new A&H team will be headed up Jay Thacker, who has served in the
market for almost 20 years. Nexus is currently best known for its expertise in Financial and Professional Lines and Trade Credit. Nexus
CEO Colin Thompson said: “This is a significant new venture for Nexus and an important step in our drive for product diversity in the
specialty space. We now have the expertise to support brokers in developing this line of business with a wide appetite and broad market
coverage, combined with superior levels of service, and also of note is the fact that we have secured blue-chip capacity support through
Lloyd’s of London. Through Jay’s wealth of experience working for both the Lloyd’s and company markets, we are excited at the prospect
of rolling out a forward-looking suite of products for a wider variety of clients, from SME to large multinational corporations.”
PartnerRe Taps into Middle East
FI with Chedid Re
PartnerRe has teamed up with Chedid Re, a major reinsurance broker in
the Middle East and North Africa (MENA) region, to provide capacity to an
MGA that will underwrite a range of Financial Lines insurance business.
The long-term agreement between PartnerRe Wholesale and Chedid Re
includes Commercial Professional Indemnity (PI), Single Project, Commercial
PI annual cover, Directors’ & Officers’ (D&O) insurance for Commercial and
Financial Institutions and PI for Financial Institutions. The regions covered
include the Middle East, Turkey, Greece and Cyprus. PartnerRe Wholesale is
a new entity that offers financial Lines insurance coverage to small to medium-
sized businesses, including Commercial PI, Commercial D&O and General Liability insurance. It will be underwritten by PartnerRe
Ireland Insurance and operate through a distribution network of brokers, insurers and MGAs. Chedid Re places retrocession treaty
and facultative business to over 270 insurers across the MENA region as well as Europe with offices in Beirut, Dubai, Limassol and
Riyadh. Commenting on the move, Chedid Re Chairman and CEO Farid Chedid said: “We bring to the region the capacity of one of
the largest and most solid reinsurers in the world.”
QBE Aviation Business Up for Sale as Director Quits
QBE has hoisted up the for sale sign at its Lloyd’s Aviation business in perhaps the first sign that the market’s rapid softening is
triggering a withdrawal of capacity. Sources said that Director of Aviation and Named Underwriter of incidental Syndicate 5555, Paul
Leatherbarrow, resigned from 1 April. It is understood that QBE has indicated its intention to exit the Aviation business, and has
appointed Willis Capital Markets to find a buyer for the book. In 2012, QBE’s Lloyd’s operation wrote £75m ($126m) of Aviation business,
with 39% of premium coming from Products, 34% from Manufacturers’ Liability, 34% from Airlines, and 27% from General Aviation. In
its 2013 accounts, QBE Syndicate 2999 – which aggregates the results of all of the incidental syndicates – said: “Aviation Syndicate
5555 also witnessed reductions due to pricing pressures and ongoing remedial action.” The accounts do not give numbers specifically
for Aviation. However, the Marine, Aviation and Transportation segment reported gross written premiums of £126m, down from £130m
in 2012. Underwriting profit was up 33% at £31.6m. QBE’s Reinsurance incidental syndicate number 566, which is headed by Jonathan
Parry, writes Aviation Reinsurance. It is not clear if this will be affected. Market sources are sceptical that QBE will be able to realise any
value by selling the book. “It’s a renewal rights deal at best, so it’s not that clear what you’re getting that you wouldn’t get by hiring the
team,” one underwriter said. “And this market is not the time to get into aviation anyway.” A graphic on the QBE website suggests that
the team contains 24 people – perhaps explaining the perception that it carries too much expense. Other senior staff members include
Aerospace and General Aviation portfolio manager Graham Daldry, Airlines Portfolio Manager Dan Boultwood and Matt Langmead,
who came second in the Gracechurch rankings for aviation underwriters in 2013. The airlines market is extremely soft with risk-adjusted
rate reductions currently averaging 15-20%, although Manufacturers, War and General Aviation are seeing more modest reductions.
Despite concerns that the aviation market will scarcely be able to cover attritional losses and expenses this year, fresh capacity has
been coming into the market and signs of discipline from existing carriers have been scarce. QBE is chiefly a following market, and its
withdrawal will not have the impact of a move from a major player like AIG or Global Aerospace. However, its decision to head for the
exit could be an early indication that the market is starting to lose its appetite for aviation risk.
-7-
QBE Confirms Potential Sale of
US Mid-Market Unit
QBE is mulling a sale of its US middle market business, the Sydney-
headquartered carrier said earlier this week.QBE has launched a strategic
review of the unit as part of a wider effort to turn around its misfiring US
division, the source of reserving and goodwill impairment provisions that
pushed the group to a $254m after-tax loss last year, the company said in
a statement to the Australian Stock Exchange. “We are well advanced
in implementing remediation work which will allow QBE’s North American
business to return to profit,” QBE Chief Executive John Neal said. “As part
of this process, we continue to assess options for various components of the
US business, including the US middle market business.” QBE share closed
3.7% lower on Monday, valuing the business at about A$14.5bn ($13.4bn).
The stock has fallen 9% in the past year. It was reported last week that QBE
was interviewing advisers to handle the potential sale of the US mid-market
business, Winterthur. QBE acquired Winterthur from Axa seven years ago
for $1.2bn. Should the sale go ahead, potential sell-side advisers are thought
likely to include Bank of America Merrill Lynch and Willis Capital Markets.
RSA Promotes Paul Whittaker to Group COO
RSA has promoted Paul Whittaker, its current Head of Emerging Markets, to the new post of Group Chief Operating Officer (COO), the UK
general insurer said. From 1 May Whittaker will oversee the completion of RSA’s strategic disposals, as the insurer continues the process
of cleaning up its balance sheet under new CEO and former Head of RBS Stephen Hester. RSA said Whittaker would also be responsible
for ensuring the company’s different divisions work together efficiently. It said IT, Global Specialty Lines, Underwriting, Claims and Broker
Relationships would all fall under his supervision. Whittaker will become Deputy Chair of the group’s executive committee and a member of
its regional committees, although the other membership of the executive board will remain unchanged, RSA said. The new COO will retain his
current responsibility for overseeing the group’s strategy in emerging markets. Whittaker has been with RSA since 2003, when he joined the firm
as HR Director. He previously spent three years at Axa and a decade at GE Capital where he worked in Asia and Eastern Europe, focusing on
acquisitions and business development.
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