All Posts in "Month: January 2021"

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Patoma Admin by — January 28, 2021 in Others 0

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Patoma Admin by — January 23, 2021 in Others 0

Allianz France is making two new management appointments.

Pascal Thébé, 59, has been promoted head of CEO office. A graduate of the Ecole Centrale de Paris, the Institut d’Etudes Politiques de Paris (Sciences Po) and the Institute of French Actuaries, P. Thébé began his career in 1986 with the AXA Group where, in 23 years of activity, he held several management positions.

In 2009, he joined Allianz France as a member of the executive committee in charge of the technical and products department and Deputy Chief Executive Officer of Allianz IARD and Allianz Vie. In 2018, he became head of the data, customer and communication unit.

Julien Martinez has been appointed head of the CSR (Corporate Social Responsibility), strategy, data, customer and communication unit.

Aged 38, J. Martinez is a graduate of the Ecole Normale Supérieure (ULM), Sciences Po Paris and the Ecole Supérieure des Sciences Economiques et Commerciales (ESSEC). He joined the German group’s French subsidiary in 2016 as manager of innovation and M&A strategy.

Patoma Admin by — January 19, 2021 in Insurance 0

The January 2021 reinsurance renewals have seen widespread price increases that often went beyond claims inflation, according to Fitch Ratings. It said the reinsurance market continued to harden, driven by pandemic-related claims, high natural catastrophe losses and pressure on liability lines of business. However, Fitch said the increases were capped by abundant capital in the market.

“Both traditional and alternative reinsurance capital were largely unchanged during 2020, despite heavy losses caused by the coronavirus pandemic and by natural catastrophes. Capital injections of over $20bn and a recovery in financial markets helped to maintain the reinsurance capacity at the levels of early 2020, proving the resilience of the market,” said Fitch.

The ratings agency said it believes that real price improvements will reach 2%-4% in 2021, leading to better technical results for reinsurers, assuming a normalised natural catastrophe claims level. Natural catastrophes caused approximately $76bn of insured losses last year, while manmade losses accounted for $7bn of claims in 2020. Total large losses were 25% above the long-term average.

Fitch Ratings said the sector outlook on the non-life London market is improving for 2021. “This reflects our expectations of continued improvements in pricing conditions, which would support the underlying underwriting performance of the market. However, despite the positive pricing dynamic, there are a number of challenges, including the uncertainty over the ultimate costs of coronavirus pandemic-related claims, the pandemic’s recessionary impact on the sector, and ultra-low investment yields.”

Fitch said rate increases accelerated further in the third quarter of 2020, with a number of insurers reporting double-digit rate increases across underwriting portfolios. “We believe the uncertainty over the pandemic-related claims costs, the ultra-low interest rate environment and improved underwriting discipline in the London market will support rate rises in 2021. Several London market insurers have also raised additional equity capital in H1 2020 to take advantage of the hardening market.”

Patoma Admin by — January 18, 2021 in Insurance 0

By admin

The hardening reinsurance market could mean higher prices for corporate insurance buyers into 2021 and signal a period of restricted coverage and reduced underwriting flexibility. The hardening reinsurance market is likely to exert more influence on the primary commercial P&C and specialty markets than has been the case in previous years, according to Clarissa Franks, managing director and risk management placement leader at Marsh UK.

“Reinsurance is vital to insurers’ ability to operate and is a key operational expense. As insurers seek to improve profitability, it may not be feasible for insurers to absorb additional reinsurance costs, which may result in price increases for buyers,” she told Commercial Risk Europe.

Changes in the direct and facultative reinsurance market during the past 18 months have affected the ability of some insurers to offer the same level of cover they once could, according Ms Franks. Now the treaty market, the mainstay of reinsurance protection for most large insurers, is also showing signs of change, she explained.

Many specialty property insurers had come to overly rely on facultative reinsurance, which is traditionally used by primary carriers to address specific risks or regions such as high concentrations of catastrophe risks, or very large corporate insurance programmes, according to Ms Franks.

However, following a run of catastrophe losses in 2017 and 2018, as well as efforts by Lloyd’s to root out underperforming business, the facultative market has contracted, forcing some insurers to suddenly adjust line size and capacity, she explained.

Perhaps more significantly, treaty renewals in the second half of 2020 point to further changes in the reinsurance market, with price increases and coverage restrictions in some “topical areas”, said Ms Franks. “The ramifications for P&C and specialty treaty renewals so far this year has been for coverage and exclusions for communicable diseases,” she said.

“The theme coming through is that there may be a level of inflexibility from insurers due to reinsurance conditions,” said Ms Franks. “If you are a corporate buyer, you will be used to getting bespoke cover. Now, some cover – like communicable diseases or silent cyber – may not be available, no matter how confident the underwriter is, because there is no longer reinsurance protection available,” she said.

Treaty reinsurers are mandating exclusions for communicable diseases in some lines, as well as for silent cyber and civil unrest in property coverages, Ms Franks continued.

“Now, insurers have little choice as reinsurers are mandating exclusions. This is true for silent cyber, where reinsurers seek to identify and minimise cyber cover in non-cyber P&C insurance,” she said.

Reinsurance capacity remains adequate for most lines, however, it is “tightening” for certain loss-affected areas, such as financial, retro and US auto, according to Ross Howard, global executive chairman of Lockton Re. Risks that have experienced major losses are “truly hard”, he told CRE.

For example, reinsurance capacity for directors and officers insurance is “seriously tightening” as a number of players have withdrawn from the market, making it harder to place programmes. Reinsurers are also growing more cautious of cyber exposures, in part due to a rise in ransomware claims and concern for systemic risks, exacerbated by the pandemic, according to Mr Howard.

Specialty lines with poor loss records are under increased scrutiny and subject to price increases, according to Gianfranco Lot, head of globals, reinsurance at Swiss Re. Marine, energy and aviation, as well as specialist property areas like engineering and mining are undergoing a “correction”, while trade credit insurance is in sharp focus given the impact of the pandemic on the global economy, he said.

Like other reinsurers, Swiss Re is taking a tougher stance on casualty reinsurance at renewals, in part a reflection of social inflation and low interest rates, according to Mr Lot. “The US liability market is hard. Capacity in the reinsurance market has reduced and reinsurers are demanding improved conditions. Prices have been pushed up in the past 18 months and we expect they will do for some while longer,” he said.

Faced with higher reinsurance costs, insurers have a number of options. These include passing on the additional costs, absorbing increases or restructuring their reinsurance programmes and primary insurance offerings. “Increased reinsurance pricing will, at the very least, help sustain pricing on the primary side,” said Michael Van Slooten, head of business intelligence at Aon Reinsurance Solutions.

“Reinsurance buyers will have to pay more for their cover, but I would argue that they are receiving enough at the front end to cope. There does need to be a catchup as reinsurers’ earnings are well below expectations,” he added.

Changes in the reinsurance market are driven by the need to address poor results, according to Mr Van Slooten. Reinsurers’ earnings have fallen due to a combination of factors, including catastrophe losses, social inflation, low interest rates and the effects of almost a decade of market softening, which eroded premium rates by as much as one third in some lines, he said.

“The reinsurance sector remains well capitalised despite a run of losses, which has helped keep a lid on rates. But we are at a point where tolerance of poor earnings has gone and management teams are under pressure to increase earnings. Increasing today’s pricing is really the only lever left to reinsurers,” he added.

Unlike past hard market cycles, current hardening is not a consequence of falling capacity, explained Mr Van Slooten. In fact, reinsurance market capital has proved resilient despite the pandemic, and some new capital has flowed into the market. According to Aon, global reinsurer capital was broadly flat during the nine months to 30 September 2020.

Despite recent catastrophe events and a global pandemic, reinsurers remain well capitalised, agreed Carlos Wong-Fupuy, senior director of global reinsurance ratings at AM Best. He expects the hard market to continue throughout next year.

“In order to compensate for previous losses, we would expect the hardening market to last through 2021. This assumes a continued period of historically low investment returns, a required return on capital aligned with a more uncertain underwriting and economic environment, and improved market discipline, with no material influx of naive capacity,” he added.

In response to hardening rates, there have been a number of capital-raising initiatives and startup (re)insurance companies formed. For example, in December, Inigo and Vantage were launched with $800m and $1bn of capital respectively, while Conduit Re floated in London with a $1.1bn capitalisation.

“While not insignificant individually, currently they do not represent a material addition to the $470bn that we estimate as combined capital for the whole market. Combined with the existing third-party capital capacity – which may marginally decline this year, we still anticipate in total a slight reduction compared to the previous year,” said Mr Wong-Fupuy.

“Given the current global pandemic and economic situation in general, we believe most new entrants may face a challenging environment dominated by a flight to quality that favours more established, highly rated competitors,” he said.

Reinsurance market conditions will contribute to higher prices in most commercial lines in 2021, but there are a number of other trends contributing to continued upward trajectory of prices in the insurance market, said Jennifer Marshall, director at AM Best. “It’s difficult to separate the specific effect of the hardening reinsurance market from those other trends but, clearly, the reinsurance market is contributing to the dynamic,” she said.

“We expect that insurers will carefully re-evaluate their reinsurance needs, and it’s likely that there will be some increased retentions and reductions in excess layers, particularly for more opportunistic buys made when reinsurance market conditions were softer. This may drive some change in primary market capacity, as insurers reduce availability of increased limits and excess coverage. Changes in insurance policies, particularly bespoke programmes for large commercial insureds, may be needed if reinsurers implement and maintain stricter policies about what underlying exposures they will cover,” she added.

Patoma Admin by — January 18, 2021 in Insurance 0

Allianz has set interim targets to reduce greenhouse gas emissions in its investment portfolio, to help achieve its ultimate goal of climate neutrality by 2050.

The insurer said it wants emissions from equities and corporate bonds held in its customer funds portfolio to fall 25% by 2025, from 2019 levels.

The insurer said all equities and corporate bonds will be reviewed for compatibility with the Paris 1.5ºC climate agreement. Companies that also follow the agreement will “increasingly be held” in its portfolio, it explained.

In addition, the firm’s real estate investments will also be measured against the Paris climate agreement’s target.

Allianz will also reduce climate gases from its own operations by 30% in the next five years, compared to 2019, and only use green electricity in business operations by 2023.

“With change, we start with ourselves – to then support others to move towards carbon neutrality. We are convinced that integrating climate and sustainability aspects will have an impact on our investment strategy,” said Dr Günther Thallinger, member of the Allianz board of management responsible for investment management and ESG. “This allows us to mitigate climate-related risks and take advantage of opportunities offered by future-oriented business models,” he added.

Oliver Bäte, chairman of the board of Allianz, said: “The past year has clearly shown: markets and countries must learn to deal with new risks such as pandemics, climate change and social unrest. It is the most important task of the coming decade, to shape a sustainable economy and society.”

Allianz also announced Line Hestvik will lead the firm’s global sustainability work in the new role of chief sustainability officer. She will report directly into the board of management and roll out Allianz’s sustainability strategy across all markets.

Patoma Admin by — January 14, 2021 in Insurance 0

By Favour Nnabugwu

Three Ghanaian insurance companies have decided to merge into a new entity called Star Assurance Group Limited (SAGL).

The companies are Société Tunisienne d’Assurances et de Réassurances (STAR)  Assurance Company Limited, StarLife Assurance Company Limited and Star Microinsurance Company Limited

Established in September 2020, SAGL intends to play a significant role in the local market.

The written premiums net of cancellations and refunds amounted to 374.76 million TND ($133.767 million) compared to 357.39 million TND ($118.739 million) in 2018, that is an increase of 4.9 percent. With 216.202 million TND ($77.171 million), motor insurance alone accounted for 57.69 percent of the premiums.

The paid losses, all classes of business together, rose by 9.9 percent at 289.872 million TND ($103.467 million) in 2019 against 263.693 million TND ($87.609 million) one year earlier, The number of reported losses (for all classes) fell from 884 686 in 2018 down to 816 527 twelve months later.

For their part, the financial products grew by 26 percent amounting to 77.719 million TND ($27.741 million) versus 61.56 million TND ($20.453 million) 2018.

The privately owned company was incorporated in August 1984 and licensed to carry out corporate and retail insurance business in Ghana. It commenced operations in April 1995.

Star Assurance started business as a composite insurance company and had to hive off its life operations by setting up a subsidiary company, StarLife Assurance even before a new law was enacted in 2006 to separate its life insurance business from the non-life business. 

As a result of these structural changes, a new business strategy was implemented. Star Assurance improved its financial status, upgraded its operational infrastructure, improved the skills of its over 150 professionals among others. The business simultaneously further extended its national presence and invested in technology and product distribution to enhance its operations and deepen penetration of insurance products and services to the Ghanaian market.

Star Assurance currently has seventeen (17) branches in seven (7) regional capitals of the country. The insurer also has over 150 agency offices located across the country. As part of their plans to increase penetration of insurance products and services in the market, as well as take insurance closer to the insuring public, Star Assurance is planning to open more branches before the end of the year

Star Assurance is poised to establish itself as a clear market leader in the small and medium-sized enterprises market as it sees Ghana’s large SME sector as a key driver of growth in the industry. The insurer also plans to consolidate its position in the industry through continuous investments in IT infrastructure and human capital.

Patoma Admin by — January 13, 2021 in Insurance 0

The Chartered Insurance Institute of Nigeria (CIIN) has threatened to withdraw professional certificates from practitioners with abberations

The President of the Institute, Sir. Muftau Oyegunle, during the CIIN’s 2020 graduation and fellowship awards ceremony in Lagos, pointed out that the certificates can be withdrawn from the holders if the Institute has good reasons to do so.

He stated  that reason for such withdrawal of certificates could emanate from acts unexpected of a holder of the Institute’s professional qualification and unethical behavior. This policy remains in force. I sincerely hope that there will not be an occasion where the Institute is required to do so, he said.

According to him, “All certificates issued by the Institute remain the Institute’s property, stressing that, “As we have been appointed the power to give, we have equally been empowered with the mandate to retrieve or revoke.”

Practitioners must at all times maintain decorum among insurance professionals is the principal way to improve corporate governance and ultimately improve the public image of the insurance business, he said.

The CIIN president said that by attaining the institute’s professional qualification, the inductees have become custodians of the ethics and codes of practice of the noble profession and that the institute has a code of ethics for insurance practitioners in Nigeria, which purpose is to set forth the values, principles and standards that will guide the conduct of all insurance practitioners.

Patoma Admin by — January 12, 2021 in Insurance 0