Credit claims keep on rising

10

INSIGHTwww.insuranceday.com|Wednesday 9May 2012

Global insurancemarket sees sustainedM&A activity

Last year saw a surge inmergers and acquisitions(M&A) in the global insur-ance industry, with the

deal flow reaching its highest levelfortwoyears.Afteradecliningtrendthrough 2009 and 2010, there was asharpuptickinactivityinthefirstsixmonths of last year, followed by asustained level of transaction activ-ityinthesecondofhalfoftheyear.

According to data supplied byThomson Reuters, there were 546dealsoverall in2011comparedwith521 in 2010. This was despite contin-uingbroadereconomicuncertainty,especially around the ongoing debtcrisis in theeurozoneand thedown-gradeoftheUSbyStandard&Poor’s.

So, what has changed? Certainly,rising financial asset values havegiven boards greater confidenceandbalance-sheetflexibility.Therehas also been more readily availa-ble finance, including leverageddeals, which are attracting privateequity firms, although some areconcluding deals with co-equityinvestors. The final element is buy-ers and sellers are more closelyalignedonpriceexpectations.

There is also strong evidencethat – almost irrespective of thegeography in which they are oper-ating – there is a growing under-standing insurers need to buildscale to strengthen their balancesheets and sustain their margins.

Investors’appetitehasimprovedastheyseekopportunities fordealsaroundtheworld

AndrewHolderness and Gary Thorpe,global corporate insurance team partnersClyde & Co

Graph 1: Volume of merger and acquisition deals globally, 2009 to 2011

300

290

280

270

260

250

240

230

2201H 2009 2H 2009 1H 2010 2H 2010 1H 2011 2H 2011

Source: Thomson Reuters

The US dominated the M&A pic-ture, accounting for almost halfthe deals done. This is backed upby figures released in a recentrenewal report by reinsurancebroker Guy Carpenter, whichreveal M&A deals in the USand Bermudian non-life sectorpicked up last year in terms oftotal dollar value to $12.8bn from$7.3bn in 2010.

In the US, the much-predictedhardening of insurance pricesseems to be getting under way,climbing at the fastest rate innearly four years, with the marketexpecting this trend to continue as

insurers impose greater under-writing discipline to compensatefor weaker investment returns. Amonthly review of medium-sizedand large-cap US client data byMarsh early in 2011 has shown a5.3% average uplift in commercialproperty insurance rates in Janu-ary from a year ago. If the markethardening is sustained, valuationlevels for insurers should increaseand this, combined with a pro-longed period of reserve releasescoming to an end, could act as acatalyst for more M&A trans-actions. There is also pressurebuilding on some private equityinvestors to realise earlier invest-ments in insurance operations.

US

Graph 3: US and Bermudian non-life M&A deals

2010 2011

5.3%Average uplift in commercial propertyinsurance rates, Jan 2011 versus 2010

$7.3bn

$12.8bn

There is still keen interest in the Lloyd’smarket, with almost all the small-cap quoted vehicles seeing some inter-est – with a number of possible suitorsbeing mooted. In recent weeks we haveseen a number of high-profile trans-actions. US insurer CNA Financial hasagreed a £143m ($230.7m) deal to buyBermuda-based insurer Hardy Under-writing,whileprivatelyownedspecialtyinsurer Canopius will buy Omega Insur-ance for £163.6m. These deals underlinethe enduring strength of the Lloyd’smarket and its attraction to both estab-lishedinsurersandexternalinvestors.

As companies look to build scale of

operations in the market and diversifytheir portfolio of business, the attrac-tion of having a Lloyd’s platform isclear. However, with ongoing excesscapital and a soft market, the Lloyd’sfranchise board is setting tough crite-ria for new entrants and start-ups havebeen hard to achieve. This means thoseaspiring to underwrite at Lloyd’s areleft with acquisition as the most likelyroute in.

However, the number of acquisitiontargets at Lloyd’s is reducing – there arenow only five listed Lloyd’s managingagencies remaining – so other inter-ested parties are starting to look atalternatives such as strategic invest-mentsasanentrypointintothemarket.

Lloyd’s

Slightly more than one-third ofdeals in the second half of last yearwere in Europe and levels of M&Alook likely to remain high for anumber of reasons. Activity isundoubtedly being driven by theimminent arrival of Solvency II.This has increased focus on capitalrequirements and reviews byinsurers and reinsurers of theirbooks of business – both live anin run-off.

Any capital adjustments willact as a catalyst for a range ofcorporate activity; from re-organisationsandcapitalraisingtosales and purchases. Buyerswill hope to increase returns byapplying more effective capital-managementtechniquestocompa-nies that may have been operatingrelatively inefficient structures,while sellers will be looking tooffload businesses where thecapital requirements do not justifythe returns.

Europe Activity is undoubtedlybeing driven by theimminent arrival ofSolvency II. This hasincreased focus oncapital requirementsand reviews by insurers and reinsurersof their books ofbusiness – both live and in run-off

While activity in the emergingmarkets was at a lower level in thelast six months of 2011 comparedwith the first half of the year, thereremains a strong consolidationtrend as the markets reach newlevels of maturity. Markets atearlier stages of developmenttended to see numerous start-upsin the insurance sector, not all ofwhichwillhavethecriticalmasstosurvive going forward. In thesemarkets, therefore, a wave ofmerger activity is predicted to cre-ate fewer, stronger businesses.

In Latin America, for example,we are seeing a new generation ofinsurers with regional and globalambitions. Companies confront-ing growth challenges, generatedby pricing pressures and regula-tory reform, are likely to focuson their core strengths, divestingcertain assets or markets that donot fit those strengths whileadopting more aggressive M&Astrategies as they seek access tonew markets.

Last year saw the arrival of aLatin American insurer on to alarger stage with Colombia’sGrupo de Inversiones Sur-americana’s acquisition of ING

ous year, representing 23% of allglobal M&A activity in the period.Although the pace of activityslowed in the second half, theAsia-Pacific region posted a year-

on-year increase of closeto 50%, with China

leading the way.China will

remain a top pri-ority for insur-ers, both insideand outside the

region, looking forgrowth opportuni-

ties – either enteringthe market for the first

time, increasing their existingmarket share or improving theirprofitability.

Emergingmarkets

Group’s Latin American insuranceunit for $3.9bn. At the same time,players from established marketsare looking for opportunities in theregion with Spain’s ZS InsuranceAmerica SL acquiringSantander Seguros SAof Brazil for $1.6 bn.

Unlike theAmericas andEurope, Asia-Pacific was rela-tively unscathedby the impact ofthe global reces-sion, so it was perhapsunsurprising to see asharp upturn in insurance M&A inthe first half of 2011, with moredeals than the whole of the previ-

Whether they are domestic orinternational players, right acrosstheglobewearehearingourclientssay the same thing: regulators and

Conclusioncustomers are looking for strengthand stability in the risk transferbusiness. This is sustaining theappetite for all types of trans-

actions – from fully fledged merg-ers and acquisitions to moretactically driven deals to sell offportfolios or renewal rights.n

Graph 2: Volume of merger and acquisition deals by region in 2011

300

250

200

150

100

50

0Mena AfricaAsia-PacificEuropeAmericas

Source: Thomson Reuters

$3.9bnPrice Grupo deInversionesSuramericanapaid for ING’sLatAm unit

Map: Asia-Pacific region M&A activity in 2011

23%Asia-Pacificshare of total2011M&Aactivity

50%Asia-Pacificyear-on-yeargrowth inM&A

Insight

Technology Focus

9www.insuranceday.com| Wednesday 9 May 2012

Qatar non-life market

T here is a total of 21 directinsurance companiesand branches of foreigninsurers licensed in the

Qatar non-life insurance market.These include five national compa-nies and four branches of foreigncompanies licensed by the QatariMinistry of Business and Trade(MBT) under Insurance DecreeNo 1 of 1966; 11 companies andbranches of foreign companieslicensed by the Qatar FinancialCentre (QFC); and one captiveinsurance and reinsurance com-pany licensed by the MBT.

There were five national compa-nies in the market in 2011 licensedby the MBT. These were QatarInsurance Company (QIC), QatarGeneral Insurance and Reinsur-ance Company (QGIRCO), AlKhaleej Takaful Insurance andReinsurance Company, DohaInsurance Company and QatarIslamic Insurance Company (QIIC).

National companies licensed bythe MBT must be publicly quotedand fully owned by Qatari share-holders. The most significantpart of the insurance market – thegovernment-owned energy sector– is reserved for them. These risksare put out to competitive tender,normally every three years.

Energy businessThe Qatar non-life market notrelated to energy business is stillcomparatively small. The energyand petrochemical market makesup an estimated 50% of the wholemarket. It is this dominance ofenergy business that largelyaccounts for Qatar’s relatively ele-vated position in world marketrankings compared with countrieswith similar populations in theGulf Co-operation Council (GCC)states such as Bahrain and Kuwait.

The MBT has not publishedstatistics for several years and theQFC does not publish statisticsregarding the activities of its mem-bers. The Qatar Statistical Author-ity publishes some figures relatedtobanks, insurancecompaniesandother business activities (covering37 firms) but these are not split by

tinuing fierce local and interna-tional competition leading toreductions in premium rates in theprincipal classes of business. Inany event, such trends are in linewith other energy-dominatedinsurance markets in the region.

There is internal market activityin Qatar in respect of locallyplaced facultative reinsurance,especially as between the nationalcompanies (including facultativecessions by the latter to the localcaptive, Al Koot, owned by QatarPetroleum). It is not knownwhether the GSDP data takesaccount of such activity, whichcould result in double counting ofpremium from the same originalgross premium source.

Compared with other GCC states,the motor account (third-partyliability and casco) constituted arelatively small proportion of totalnon-life business (close to 20.6% in2008), but it is the area where manyof the foreign companies have con-centratedtheirefforts,sincetodatethey have been denied participa-tion in government-owned risks.

Thisremainsthecase inpractice,although whether it will do so forthe future is now a matter of someconjecture, given the dynamic andliberal economic policies beingpursued in the country in therecent years, one of the manifesta-tions of which has been the emer-gence of the QFCA. Since the latterpermits authorised retail andwholesale carriers and brokers tooperate within the local market, aswell as in overseas markets, somechanges to the established statusquo would appear to be a possibil-ity in the future.

In the meantime, however,according to anecdotal evidencethenationalcompaniescontinuetohave a monopoly of governmentbusiness and therefore of most ofthe largest accounts. Brokers alsoappear to have made only verylimited inroads into the histori-cally established direct placementof large risks, even though somelarge brokers such as Marsh andAon have entered the retail marketin recent years.

ComparedtootherGCCcountries, themotoraccountinQatarconstitutearelativelysmallproportionoftotalnon-lifebusiness,but it is theareawheremanyoftheforeigncompanies inthemarkethaveconcentratedtheirefforts

Table 1: Total insurance market premium income in Qatar in 2007

Category Life Non-lifePersonalaccident

and health

Totalmarket

Premium (Riyal m) 34.9 3,106.7 n/a 3,141.6

Premium ($m) 9.6 853.5 n/a 863.1

% of total market 1.1 98.9 n/a 100.0

Source:AxcoGlobalStatisticsNote:TheMinistryofBusinessandTradehasnotpublishedstatisticsforseveralyearsandQFCdoesnotpublishstatisticsregardingtheactivitiesof itsmembers.

Table 2: Annual growth rates of non-life premium income in localcurrency in Qatar compared with nominal GDP growth and inflationrates over the last five to 2008

2004 2005 2006 2007 2008Premium growth (%) 31.8 33.3 140.5 (6.0) (21.7)Nominal GDP growth (%) 34.8 35.6 40.6 33.5 37.1Inflation rate (%) 6.8 8.8 11.8 13.8 15.1

Source:AxcoGlobalStatistics

Table 3: Approximate market share (%) by line of business and bydistribution channel Qatar in 2010

Line of business Agents Brokers Direct salesNon-motor 2 8 90Motor 20 10 70

Source:AxcoGlobalStatisticsestimatesbasedonmarketopinion

Graph 1: Non-life premium splitin Qatar in 2008

�

�+�+�+�+AMotor

Miscellaneous

Marine,aviationandtransport

Property

Source:AxcoGlobalStatisticsbasedondatafrominsuranceindustryassociationsandregulatorybodies

activity and therefore do not giveprecise indications regarding theinsurance industry in isolation.Axco has, however, obtained somemarket statistical data for theperiod 2003 to 2008, sourced fromthe General Secretariat for Devel-opment Planning (GSDP) data.

There is another source of datarelated to the non-life market pro-vided by Swiss Re. The data in thissource is not split by class of busi-ness, however, and is therefore ofsomewhat limitedvalue.SwissRe’sdata does not completely accordwith that from the GSDP.

Reduction in premium volumeBoth sets of figures appear to indi-cate reductions in total marketnon-lifepremiumvolumeinrecentyears.Anecdotalevidencefromthemarket suggests in 2008 and 2009such reductions in volume werecaused primarily by the effects ofthe global economic crisis and con-

Graph 2: Top five insurers inQatar ranked by premiumincome in 2007 ($m)

QatarInsuranceCompany

QatarGeneral

0 100 200 300 400 500

AlKahleej

Doha

QIIC

Source:AxcoGlobalStatisticsbasedondatafrominsuranceindustryassociationsandregulatorybodies

SupervisionTo rationalise the supervision andcontrol of the financial industry,including insurance, in 2007 thegovernment appointed an interimboard to oversee the establishmentof an integrated financial supervi-sory body, to be called the FinancialRegulatoryAuthority(FRA),dealingwithbanking,insurance,assetman-agement, securities and all otherfinancial services. The plan was toco-ordinate by the end of 2008 theactivities of Bank of Qatar’s depart-ment of banking supervision andcustomer service unit, the QatarFinancial Markets Authority andthe QFC Regulatory Authority, but ithas been delayed for unknown rea-sons and at the time of preparationof this report it was uncertain whenitwillbecomeoperational.

Company changesAl Khaleej became a fully takafulcompany effective from January 1,2010, changing its name from AlKhaleej Insurance and ReinsuranceCompany to Al Khaleej TakafulInsurance and Reinsurance Com-pany.Establishedin1978,AlKhaleejwas the fourth-largest company inthe market in 2009, with gross pre-mium income of Riyal281.9m($77.4m). In 2010, it recorded grosscontributions of Riyal286.5m, ofwhich Riyal267.4m was non-lifebusiness(93%oftotalcontributions)andRiyal19.1mwastakafullifebusi-ness(7%oftotalcontributions).

Each national company has anumber of tied accounts derivedfrom its shareholders.

The figures in respect of AlKhaleej, Doha and QIIC includelife business since because thesecompanies operate in this class ofbusiness according to Islamicprinciples, they are permitted bythe MBT to write such business.Nevertheless, the other nationalcompanieswriteannualgroupper-sonal accident business coveringdeath by any cause as a non-lifeclass of business and this approachfrequently substitutes for grouplife business as such in the market.

It is curious the two largest com-panies – QIC and QCIRCO – sufferedthe largest reductions in gross pre-miumincomein2009and2010. It isthought this may have been par-tially the result of pressure onmajor energy risk premium ratesand the effects of the global eco-nomic crisis on the local economy.

Distribution channelsIt is difficult to arrive at accuratedistribution mix estimates becauseof the potential impact of the entryin the local market for the first time

of large international brokers. His-torically, brokers have never beena feature of the market and themajor firms have long been accus-tomed to writing most of theirmajor accounts on a direct basis.Anecdotal evidence clearly sug-gests this situation still pertains.

Competition is, however, un-questionably accelerating in a softmarketandthiswillinevitablybeginto give the brokers opportunities tobreak into the major risk retail mar-ketovertimealthoughevidencesug-gests the monopoly of the nationalcompanies over government busi-nessisunlikelytoendsoon.

The presence of internationalbrokers in the reinsurance place-ment of all major energy risks andsome major property risks hasalready advanced awareness ofrisk management in the marketand thus the degree of sophistica-tion with which the largest are han-dled and placed.

Bancassuranceisdefinitelygrow-ing and there is now direct involve-ment by banks in the market. Arecentexampleis theestablishmentof its own insurer by Doha Bank,launched in January 2008 with alicence from the QFC to write allclassesofgeneralbranchinsurance.

Direct handlingThe leading families in Qatar havea range of business interestsincluding insurance and it is usualfor theseaccounts tobeplacedwiththe in-house insurer on a more orless “tied” basis.

Otherwise, insurers use a directsales force operating from com-pany head offices in Doha. Thesesales agents are either remuner-atedbyamixtureofsalaryandcom-mission or salary and bonuses.Some of these may operate from abranch office but as Qatar is not alargecountry, therearenotmanyofthem. The branch offices whichexist are mainly used for servicingmotor insurance; some insurershave sales offices in the Traffic

Departmentsomotoristscanobtaincover on the spot when applyingfororrenewingvehicleregistration.

There are no telesales in Qatarandthissaleschannelisnotthoughttohavemuchofafutureaspersonalcontact is preferred. There iscomparatively little advertising ofinsurance products, although somenational companies sponsor sport-ingeventsforpublicitypurposes.

BancassuranceAll of the major national insurancecompaniesworkcloselywithbanksin respect of distribution. Forexample, Qatar Islamic Insuranceworks closely with Qatar Interna-tional Islamic Bank and providesmarine cargo coverage for exportsandimports financedbythebank.

Bancassurance has not histori-cally been a major distributioninsurance channel in Qataralthough when a bank is lendingmoney for car purchase it will usu-ally insist on insurance being takenout with one of the national compa-nies. Banks do not receive commis-sion on directed business but theinsurers debit them with premi-ums and the bank also charges anadditional fee to the client account.The Central Bank does not appearto impose specific controls as tohow banks deal with insurancesales and client debiting and BaselIII is not yet of relevance.

Other bank/insurer relation-ships involve the granting of auto-matic personal accident/naturaldeath cover to those taking out apersonal loan by way of credit lifemaster policies.

With the emergence of the QFC,providing as it does significantmarketing opportunities for a widerange of financial institutions andintermediaries, it is expected banc-assurance techniques will be morewidely deployed in the future.There certainly appears to beincreasing interest in bancassur-ance and even direct involvementby banks in the insurance market.

Apart from bank connections,insurers also have alliances withmain car dealerships. These canissue cover notes for compulsorymotor third-party liability insur-ance and can access directly insurerdatabasestoenterinsurancedetails.

Affinityschemesperseappeartobe rare, but the QIIC provides agroup personal accident schemecovering members of the WelfareAssociation of Indian BusinessAdministrators Qatar (Waibaq).

AgenciesInsurance agents are regulatedunder art 20 of Insurance DecreeNo 1 of 1966. There is no independ-ent agency system, although thereisnoprohibitionagainst it.Tobeanagent, the individual must be atleast 21 years of age and a Qatarinational. They must be of goodrepute and not an unrehabilitatedbankrupt.Thesameappliestopart-ners or directors of agency firms.

More than 400 Qatari and for-eign individuals have receivedauthorisation to operate within theQFC. The professions of these indi-viduals are not mentioned, but afew may act as insurance agents.

The foreign insurers are all spon-soredbylocalmerchantfamiliesthatwill support the company with theirown business and any introductionstheycanmake.

Insurance brokersRelevant to brokers, the InsuranceMediation Business Rules 2011were published in June 2011 by theQatar Financial Centre RegulatoryAuthority (QFRCA) and came intoeffect on July 1, 2011. The rulescover principally:l Definitions of insurance inter-

mediary/insurance mediation/captive insurance managers/client money;

l Prudential requirements relat-ing to financial resources/system controls for capital andasset requirements/minimumcapital and asset requirements/professional indemnity insur-ance/filing and deadlines forthe filing of prudential require-ment returns;

l Regulations relating to clientmoney, opening client moneybank accounts, client moneyexceptions, treatment of clientmoney and related fiduciaryduties and the segregation ofclient money;

l Performing calculations andreconciliations/treatment ofmaterial discrepancies;

l Client money distribution rules;l Collateral;l Client mandates/systems and

controlsrelatedtoclientmandate;l Record keeping/giving informa-

tion/safeguarding documentsand assets; and

l Transitional provisions.Historically, no licences have beenissued to insurance brokers andthey are not contemplated underthe 1966 insurance legislation.

The QFC now allows for authori-sation of brokers to operate in thelocal market, however, andrecently the MBT granted a licencetoQatarInternationalBroker,eventhough brokers are not contem-plated within Insurance Decree No1 of 1966, so brokers licensed by theMBT do not appear to be subject toany specific regulations.

Qatar International Broker, withinitial capital of Riyal600,000, islicensed to provide insurancebroking and risk-managementservices to the corporate sector inQatar. According to media reports,the broking firm was establishedfollowing demand for local special-ist insurance broking services bycompanies involved in complexand technical projects within bothprivate and government sectors.

It is headed by David Ezzard,chairmanofCarrollandPartners,aLloyd’s insurance broker. Thisdevelopment appears to haveraised some eyebrows in the localmarket, especially in respect ofbrokers that have had to subjectthemselves to the strict compliancecriteria of the QFC to obtain anoperating licence. The new entityhas an outsourcing contract withCarroll and Partners to support alltechnical and claims operations.

Therearestringentlicensingandcompliance requirements for bro-kers established in the QFC. Theserequirements are all consolidatedwith other financial intermediaryregulations and they are lengthyandcomplex.Therearenorequire-ments in QFC rules, however, forbrokers to have professionalindemnity insurance.n

This article is based on materialsupplied by Axco InsuranceInformation Services(www.axcoinfo.com). Axco is aleading insurance market researchorganisation and web publisherthat provides market reports andstatistics on more than 160countries. The field research teamsdeliver regular updates on allaspects of non-life (property/casualty) and life and benefitsmarkets including regulation andcompliance, market conditions,hazards, reinsurance, marketbackgrounds and businessdirectories.

Graph 3: Development of the life and non-life market for the period2004 to 2008 ($bn)

n Life n Non-life

1.0

0.8

0.6

0.4

0.2

0

Source:AxcoGlobalStatisticsbasedondatafrominsuranceindustryassociationsandregulatorybodies

2004 2005 2006 2007 2008

Insurance Day Atlas

Industry seessustained M&Aactivity p10-11

External forcesdrive Londonmarket change p4

Qatar’s non-lifesector under themicroscope p8-9

Reinsurance rates

• Munich Re hailsprice hike for natcat risks

• But structuralprice problemremains forUS casualty,reinsurancegiant says p2-3

Risk Foresight

Risingcivilunrestrisks in Angolaand Botswana p5

p6-7

MARKETNEWS,DATAANDINSIGHTALLDAY,EVERYDAY WEDNESDAY9MAY2012

ISSUE3,600

SouthernEuropeisregionofgreatestconcerntoinsurers

6 www.insuranceday.com|Wednesday 9May 2012 7www.insuranceday.com| Wednesday 9 May 2012

WORLD LOSS INTELLIGENCE/POLITICAL & TRADE

UK: Two new surveys have indicated renewed confidence among UK companies despite the double-dip recession.The latest Business Confidence Monitor from ICAEW/Grant Thornton has shown a strong improvement in confi-

dence, with quarter-on-quarter growth of 0.6% forecast for the second quarter of 2012.Businesses expect capital investment to grow by just 1.4% over the next 12 months., the survey showed. Compa-

nies reported exports are 4.1% higher than a year ago, up from 3.3% last quarter and the strongest growth since thethird quarter of 2011.

Scott Barnes, chief executive of Grant Thornton, said: “Any improvement in the key performance indicators inthe Business Confidence Monitor is positive.

“Turnoverandprofitsareall increasing,butnowhereneartherateseenpre-recession,andbusinessesarebegin-ning to realise this environment may be the norm for some time. However, we are working with dynamic compa-nies that are delivering high growth in both domestic and global markets, so businesses must continue to look foropportunities.”

A separate survey from the Confederation of British Industry showed a net 22% of small and medium-sizedenterprises who are manufacturers said they were more optimistic in the three months to April.

Credit insurer Atradius has warned the UK will struggle to keep its economy growing and withstand the deterio-rating outlook for mainland Europe.

But growth is expected to remain positive – if modest – in 2012 and increase further in 2013.IN TOMORROW’S WORLD LOSS INTELLIGENCE:

LIABILITY & SETTLEMENTS

LATIN AMERICA: Rating agency Moody’s has said there is little risk of recent expropriation in Latin America extending tocountries in the region with robust institutional frameworks and respect for the rule of law.

The rating agency was commenting following recent nationalisations in Bolivia, Argentina and Belize.Moody’s said Venezuela has shown the greatest willingness to nationalise companies and further expropriation is likely.Incontrast,Moody’ssaidall themajorinvestment-graderatednationsintheregionsuchasChile,Mexico,Brazil,Peru,and

Colombia have stronger institutions.

Eurozone crisis: Contraction continues following temporary rebound in January

Trade credit: Southern Europe is region of highestconcern for credit insurersEUROPE: Claims trends in the credit insurance sector have continued to deteri-orate since the beginning of the year, with Southern Europe the region of high-est concern., writes Scott Vincent .

According to Robert Nijhout, executive director at the International CreditInsurance & Surety Association (ICISA), the first quarter saw an increase inclaims, particularly in frequency.

“The number of companies with a deteriorating outlook is also on the rise.SouthernEuroperemainstheregionofhighestconcern,”hetold InsuranceDay.Nijhout said the rise in claims was visible across all sectors.

“Sectors of particular concern are the construction sector – for example steel– retail and automotive,” he said.

However,LatinAmericacontinuestobuckthetrendwithincreasingdemandfor cover and a good claims performance.

“Our global outlook remains mixed with a positive outlook for Asia and LatinAmerica. For Europe, we do not foresee an early improvement and we expectthe present trend will continue during the next six months,” he said.

The mood concurs with credit insurer Atradius, which has predicted anincrease in insolvencies across many European economies during 2012.

Countries highlighted by Atradius as having a high and deteriorating insol-vency risk in 2012 include Belgium, Spain, France, Greece, Italy, Portugal andthe UK. Credit insurers have attributed the concerning global trade conditionsto a lack of adequate financing by banks as well as the consequences of sover-eign debt in the EU, US and Japan.

In a recent newsletter to ICISA members, Nijhout said there was particularconcernamonghisassociation’smembershipabouttheabilityorwillingnessofbanks to continue to finance trade.

“Market conditions for trade credit insurance in 2012 are generally consid-ered to be soft, although it is unclear if they will stay that way. If the envisionedriskenvironmentworsens, this isexpectedtoleadtopriceadjustmentsthatbet-ter reflect the underwritten risk,” he said.

Nijhout said demand for trade credit cover is rising in the Bric countries (Bra-zil, Russia, India and China), in eastern Europe and, more generally, in Asia andLatin America.

The sector’s other main association, the Berne Union, reported a 17% growthin the volume of export credits and foreign direct investment insured by mem-bers during 2011. The Berne Union said credit and investment insurers havepaid $15bn to exporters and investors since the beginning of the global finan-cial crisis in 2008.

Business confidence: UK companies upbeat as they adjust to new norm

4.1%Reported rise inexports fromcompaniessurveyed

Eurozone crisis: Increase in insolvencies expected acrossmuchof Europe

EUROPE: Credit conditions in the eurozone remain tight, Atradius has reported, with anincrease in insolvencies expected across much of the continent.

The tightening credit conditions are the result of persistently high risk aversion and high debtlevels in both the public and private sectors.

“In light of continued uncertainty about future write-downs, weak capital positions and sov-ereign-related risks, the most recent evidence suggests the credit channel is not yet functioningeffectively,” Atradius reported in its latest global economic outlook report.

Given the uncertainty about future economic developments, the tightening of loan supply isexpected to continue across Europe.

“This is especially troublesome for small and medium-sized businesses, often reliant on bankfinancing. New investment will be hampered, as will the refinancing of existing loans,” it added.

War risk: Tensions escalate between two Sudans

SUDAN: Tensions have risen between thetwo Sudans after South Sudan invaded theHeglig oil field north of the country’s bor-der, reports Euler Hermes.

Although Sudan has recaptured the area,tensions remain high on issues such as allo-cationofoilrevenues–mostof theoildepos-its are in south but pipelines go throughSudan.

Euler Hermes reports a build up in mili-taryactivityandaction.Evenifoutrightwaris avoided, the credit insurer says economicdamage can be expected as oil productionhas all but ceased.

“Do not expect a quick resolution to theconflict, which may yet spill over into othercountries,” the credit insurer warned.

Expropriation risk: Recent nationalisations in Latin America do not indicate trend

22%Of SMEs who

were manufacturerswere moreoptimistic

EUROPE: Eurozone economic activity saw a further declinein April, Euler Hermes has reported, with manufacturing atits lowest level in close to three years.

Deterioration in manufacturing was evident across theeurozone’s five largest economies – Germany, France, Spain,Italy and the Netherlands.

European bank credit growth to the private sector has alsoground to a halt, with credit to business in the three months toMarch falling 3% on the previous three months.

Unemployment in the zone increased 160,000 in March to arecord high of 17.36 million, equivalent to a eurozone unem-ployment rate of 10.9%.

“Expect theeurozonetoremainaleadingdragontheglobaleconomy,” Euler Hermes said.

Eurozone crisis: Political uncertaintyfollows Greek parliamentary electionGREECE: Political instability and the prospect of demonstra-tions will continue in Greece this week, according to IHS GlobalInsight analyst Blanka Kolenikova.

“Amid continuous economic and fiscal hardship and monthsof austerity, electors will punish the two main pro-bailoutparties – the Panhellenic Socialist Movement and New Demo-cracy – both of which have dominated the Greek political scenefor decades,” Kolenikova said.

“As many as ten parties are likely to enter parliament, whichwill make government-creation extremely difficult and raiseconcerns about political vac-uum and instability.

“The aftermath ofthe election mightalso be accompa-nied by mass pro-tests staged by thefar left, especiallyif their surge insupport does notwin them a place inthe ruling coalition,”Kolenikova said.

10Different politicalparties could berepresented in theGreek parliament

Hegligoil field

Low Average High

Graph Insolvency risk in 2012

Deterioriating

Stable

Improving

CanadaFinland

GermanySweden

JapanNewZealandNorway

AustriaNetherlandsSwitzerland

Australia

Belgium,Spain,France,Greece,Italy,Portugal,

UK

IrelandLuxembourg

DenmarkUS

Source:Atradius

Chan

ge

Level

10.9%....Unemploymentrate across theeurozone

17.3 m...Unemployedin the eurozone,equivalent to...

160,000Increase in numberof unemployed inMarch, a total of...

2

NEWSwww.insuranceday.com|Wednesday 9May 2012

Marketnews,dataandinsightallday,everydayInsuranceDay istheworld’sonlydailynewspaperfortheinternationalinsuranceandreinsuranceandriskindustries.ItsprimaryfocusisontheLondonmarketandwhataffectsit,concentratingonthekeyareasofcatastrophe,propertyandmarine,aviationandtransportation.It isavailableinprint,PDF,mobileandonlineversionsandisreadbymorethan10,000peopleinmorethan70countriesworldwide.

Firstpublishedin1995,InsuranceDayhasbecomethefavouritepublicationfortheLondonmarket,whichreliesonitsmixofnews,analysisanddatatokeepintouchwiththisfast-movingandvitallyimportantsector.Itsexperiencedandhighlyskilledinsurancewritersarewellknownandrespectedinthemarketandtheirinsightisbothcompellingandvaluable.

InsuranceDayalsoproducesanumberofmust-attendannualeventstocomplementitsdailyoutput.TheLondonandBermudasummitsareexclusivenetworkingconferencesforseniorexecutives;meanwhile, theLondonMarketAwardsrecogniseandcelebratetheverybestintheindustry.ThenewInsuranceTechnologyCongressprovidesauniquefocusonhowITishelpingtotransformtheLondonmarket.

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InsuranceDay,119FarringdonRoad,LondonEC1R3DA

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InsuranceDay isaneditoriallyindependentnewspaperandopinionsexpressedarenotnecessarilythoseofInformaUKLtd.InformaUKLtddoesnotguaranteetheaccuracyoftheinformationcontainedinInsuranceDay,nordoesitacceptresponsibilityforerrorsoromissionsortheirconsequences.

ISSN1461-5541.RegisteredasanewspaperatthePostOffice.PublishedinLondonbyInformaUKLtd,MortimerHouse,37/41MortimerStreet,London,W1T3JH

PrintedbyNewsfaxInternational,Unit16,BowIndustrialPark,CarpentersRoad,LondonE152DZ

© Informa UK Ltd 2012.

Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,ortransmittedinanyformorbyanymeanselectronic,mechanical,photographic,recordedorotherwisewithoutthewrittenpermissionofthepublisherofInsuranceDay.

Munich Re sawmajor price hikesat April 1 renewals

T he world’s largest reinsurer,Munich Re, saw major priceincreases at the April renewalin natural catastrophe busi-

ness,butwalkedawayfromonelargeavi-ation contract and US casualty businessbecause terms were not attractive, boardmember and head of reinsurance,Torsten Jeworrek, said.

“We saw an economic rise in prices by5%,” he said. That was the figure whenchanges in cover were taken intoaccount. “At the same time, we con-sciously reduced our premium volumeby 3%.”

In US casualty, there was a “structuralprice problem”, Jeworrek said. “Priceshave moved sideways, but should havegone up, as interest rates dived further.”

In casualty, interest rates played a bigrole in the calculation. “If we cannot off-set lower interest rates through higherprices, our profitability suffers.” ThusMunich Re had given up business.

The same was true for one substantialaviation contract, which Munich Re didnot reveal.

The company also gave up some earth-quakebusinessinJapan.“Thereasonwasthe higher likelihood of earthquakes fol-lowing last year’s events,” he said.

Jeworrek said primary rates in earth-

quake cover in Japan had risen 30%.“This is good, but 10% to 15% of that iseaten up by a higher likelihood of quakeactivity,” he added.

This was also true for the Tokyo region.The “big bang”, a major quake hittingJapan’s capital, would cost Munich Reclose to €2.5bn ($3.24bn).

Chief financial officer, Jörg Schneider,said Munich Re earned €782m in the firstquarter, compared with a loss of €948m

Infrassure posts profit despite claimsdeterioration and wildfire lossSpecialist energy and infrastructure car-rier Infrassure has posted net profit for2012’s first quarter, despite a deteriora-tion in 2011 claims costs and a morerecent Chilean wildfire loss, writes Chris-topher Munro.

Net profit for the first three months oftheyearstoodatSFr6.57m($7.03m),com-pared with a SFr11.82m net loss recordedfor the prior-year period. That resultreflected the carrier’s exposure to theJapanese earthquake and tsunami,which at the time saw Infrassure book aprovisional loss of SFr16.9m on itsbalance sheet.

For the first quarter of this year, Infra-ssure confirmed it has reserved an initialsum of SFr11.8m for the wildfire in Chile.

Net claims incurred were SFr39.34min 2012’s first quarter, compared withSFr46.6m of claims during the openingthree months of last year. This still-high

level of claims saw Infrassure’s first-quarter combined ratio total 107%.While an improvement on the 120%posted for the first three months of 2011,the figure still highlights the volatility ofthe energy and power insurance classes.

Total financial income hit SFr9.9m, upfrom the SFr2.8m loss recorded in 2011’sfirst quarter. Infrassure said this result“has mainly been driven by the positiveimpact in the unrealised investmentincome and an improvement in the for-eign exchange impacts”.

Infrassure chief underwriting officer,HansZimmermann,saidtheSwitzerland-domiciled carrier continues with itsrobust approach to underwriting, addinghe has welcomed the rate increases thathave been imposed in response to losses.

“We look forward to profitable devel-opment and margin improvementsthroughout the rest of 2012,” he added.

Herbert Fromme, CologneGerman correspondent

in the first quarter of 2011. For the fullyear, the company is confident it willreach€2.5bn.Premiumincomewillcometocloseto€50bn,ofwhichbetween€26bnand €27bn will come from reinsurance,the rest from primary insurance andhealthcare. The strong increase in rein-surance was due mainly to more one-offcontracts in life reinsurance.

The company’s investment portfolio of€212bn saw a present yield of 3.6%, down

SFr6.57mInfrassure’s

Q1 2012 profit

107%Infrassure’sQ1 2012

combined ratio

Hiscox expects US reinsuranceconditions to keep improvingHiscox has provided an indicator it expectsfurther improvements in reinsurance mar-ket conditions by holding back some UScapacity at the start of the year for forthcom-ing renewals, writes Scott Vincent.

The Bermudian firm’s interim statementshowed a slight reduction of premiumincome0.9%to£180.7m($291.6m)foritsLon-don market operations in the first quarter,due to some US reinsurance clients purchas-ing less cover as well as some reinsurancecapacity being held back. Hiscox Bermuda’sgross written premiums were down 15.7% to$117.2m, due to the non-renewal of a pro ratatreaty on a large US account.

However, Hiscox said its Bermuda pre-mium income was now growing year on year,following the April 1 renewal season.

Hiscox said rates for Japanese earthquake

catastropheexcess-of-losshavedoubledsincetheMarch2011earthquakeandtsunami.

“At the April renewals, our reinsurancebusiness more than doubled its budgeted pre-mium income in this area,” Hiscox stated.

Elsewhere, Hiscox saw growth in its US, UKand European businesses.

Hiscox USA grew premium incomeby 21.6% to $47.8m, with growth driven bymanagement liability, construction and ter-rorism lines.

Gross written premiums rose 3.4% to£89.1m at Hiscox UK, with the company plan-ning a TV advertising campaign in the comingmonths to help further build the brand.

Hiscox Europe grew 7.9% to produce grosswritten premiums of €69.4m ($90.1m) for thequarter, driven by its specialty commercial,technology and media lines.

Argo returns to black on backof low catastrophe lossesArgo generated net profit of $19.6mduring the first quarter of 2012, comparedwith a net loss of $94.1m during the open-ing three months of last year, writesScott Vincent.

The performance improvement wasdriven by the benign first quarter of 2012 –pre-taxcatastrophelosseswere$4mforthequarter, compared with $113.1m for thefirst quarter of 2011.

The Bermudian firm gener-ated a combined ratio of103.4% for the period,compared with 144.9%during the first threemonths of 2011.

Argo’s chief executive,MarkWatson,saidmarketconditions were improving“to varying degrees” acrossthe company’s platforms.Argo’s international specialty seg-

ment helped drive the improvement, gen-erating an operating profit of of $5.8mcompared with a loss of $52.8m during thefirst quarter of 2011.

Syndicate 1200 also swung from a loss of$47.3m during the first quarter of last yearto a profit of $1.7m during the first threemonths of 2012.

In Argo’s excess and surplus lines seg-ment, operating profit rose from

$13m to $18.9m.Watson said the com-

pany’s new ventures,most notably in Brazil,had got off to a strongstart.

Argo had previouslyannounced a target of

$30m to $50m of writtenpremium through its

new Brazilian operationin 2012.

HBH ‘gratifyingly close’ tohitting five-year planHawkes Bay Holdings’ (HBH), the parent com-pany which oversaw the management buyoutof Tysers and Aquila Underwriting, is “gratify-ingly close” to hitting the targets set out in thefive year plan it established in 2007, writesChristopher Munro.

Overall revenues for HBH reached £37.6m($60.6m) in 2011, up 6% compared with thepreviousyear, leavingtheholdingfirmforTys-ers and Aquila with earnings before interest,taxes, depreciation and amortisation of £7.6m,an increase of 41% over 2010. Pre-tax profit hit£5.18m, up from £2.67m for 2010.

“[We are] gratifyingly close to the targets setin the company’s five-year strategic plan at thetime of the Tysers management buy-out in2007,” HBH chairman, Christopher Spratt,said. HBH is owned entirely by its employeesand the decision has been taken to not pay adividend for the last year, instead putting the£2.73m of profit into its reserves.

The results have been bolstered by a solidperformance, Tysers’ chief executive, ChrisElliott, said. “We have further refined our

strategy and have identified specific areas ofthe business to strengthen.

“In addition, we will be adding some com-plementary business lines that will enhanceour offering to clients and we expect to seethe benefits emerge over the next 12 to 18months,” he said.

AsforAquila,Elliottsaidtheunitcontinuesto develop and “remains a strategicallyimportant business for HBH”.

Four Lloyd’s coverholders operate underthe Aquila umbrella – Hong Kong-basedSART Underwriting, the London-situatedVectura Underwriting and Principia Under-writing and Cove Program Underwriters.SART focuses on marine, marine-related andengineering risks based in the Asia-Pacificregion, while Vectura is a marine cargoinsurer and reinsurer.

Principia offers a range of specialist liabil-ity, business interruption, brand protectionand crisis management to the creative media,informationtechnologyandcorporateindus-tries.CovedealswithUSconstructionrisks.

Berkshire profit doubles with anet profit of $3.25bnBerkshire Hathaway closed the first quarterwith a net profit of $3.25bn, more thandouble the year-earlier profit of $1.51bn, writesPeterBirks.

Berkshire’s insurance operations sawfewer catastrophe losses and swung to under-writing income of $85m from a year-earlierloss of $1.28bn and its finance business postedderivative gains of $1bn, more than triplingthe prior-year $271m. The group’s operatingincome jumped to $2.67bn from $1.59bn,which, in addition to the underwriting result,included $791m in investment income frominsurance units, down 17%, and income of$2bnfromnon-insurancebusinesses,up28%.

The improved underwriting resultreflected total earned premiums of $8.07bn,an increase of 7.8%; claims costs of $4.77bn,down 21%; and outlays for life, annuity andhealth benefits of $1.09bn, up 7.6%. Berk-shire’s insurance units posted no significantcat losses during the 2012 period.

Berkshire Hathaway Re’s underwritingloss dropped to $191m, from $1.34bn inQ1 2011, on earned premiums of $2.07bn,up 6.5%. Berkshire’s General Re reinsuranceunit, which also posted some of the year-earlier cat losses, swung to underwritingincome of $81m from a loss of $326m, asearned premiums rose 2.4% to $1.47bn.

bondsor€2.6bn–upfrom€2.2bnattheendofDecember2011.

Munich Re has no plans to go for higherrisks in investments, Schneider said.

“The environment is difficult, with theEuropean economy apart from Germanyslowing down considerably,” he said.“This is not the time for an aggressive posi-tioning in investments.” However, it wasso strongly capitalised it could reactquickly if chances presented themselves.

on the 3.9% of the first quarter of 2011 –both figures annualised.

“We feel the pinch of lower interestrates,” Schneider said. Munich Re has€183bn in fixed-income papers and halfofthatingovernmentbonds,withsmallerproblemcountriesinEuropeplayingonlyaminorrole.

The company has invested heavily inGermany, the US, Canada and the UK, andalso in Italy, with 3% of all government

$19.6mArgo net profitfor the firstquarter of

2012

3

NEWSwww.insuranceday.com| Wednesday 9 May 2012

Marketnews,dataandinsightallday,everydayInsuranceDay istheworld’sonlydailynewspaperfortheinternationalinsuranceandreinsuranceandriskindustries.ItsprimaryfocusisontheLondonmarketandwhataffectsit,concentratingonthekeyareasofcatastrophe,propertyandmarine,aviationandtransportation.It isavailableinprint,PDF,mobileandonlineversionsandisreadbymorethan10,000peopleinmorethan70countriesworldwide.

Firstpublishedin1995,InsuranceDayhasbecomethefavouritepublicationfortheLondonmarket,whichreliesonitsmixofnews,analysisanddatatokeepintouchwiththisfast-movingandvitallyimportantsector.Itsexperiencedandhighlyskilledinsurancewritersarewellknownandrespectedinthemarketandtheirinsightisbothcompellingandvaluable.

InsuranceDayalsoproducesanumberofmust-attendannualeventstocomplementitsdailyoutput.TheLondonandBermudasummitsareexclusivenetworkingconferencesforseniorexecutives;meanwhile, theLondonMarketAwardsrecogniseandcelebratetheverybestintheindustry.ThenewInsuranceTechnologyCongressprovidesauniquefocusonhowITishelpingtotransformtheLondonmarket.

FormoredetailonInsuranceDayandhowtosubscribeorattenditsevents,gotoinfo.insuranceday.com

InsuranceDay,119FarringdonRoad,LondonEC1R3DA

Editor:RichardBanks+44(0)2070174155richard.banks@informa.com

Deputyeditor:ScottVincent+44(0)2070174131scott.vincent@informa.com

Seniorreporter:ChristopherMunro+44(0)2070175796christopher.munro@informa.com

Globalmarketseditor:GrahamVillage+44(0)2070174020graham.village@informa.com

Globalmarketseditor:RasaadJamie+44(0)2070174103rasaad.jamie@informa.com

Managingeditor:GregDobie+44(0)2070174145greg.dobie@informa.com

Commercialdirector:AndréaPratt+44(0)2070174708Salesdirector:GraemeCathie+44(0)2070174070Senioraccountmanager:SarahDean+44(0)2070174122Senioraccountmanager:SirachYeboah+44(0)2070177670Senioraccountmanager:AndrewStone+44(0)2070174027Marketingdirector:GrantAttwell+44(0)2070174132Keyaccountsmanager:VerityBlair+44(0)2070174998Subscriptions:LisaGambino+44(0)2033773873Headofproduction:MariaStewart+44(0)2070175819Advertisingproductionassistant:EmmaWix+44(0)2070175196Productioneditor:TobyHuntington+44(0)2070175705Subeditor:JessicaHills+44(0)2070175161Subeditor:AliMasud+44(0)2070175161Productionexecutive:ClaireBanks+44(0)2070175821Eventsmanager:NataliaKay+44(0)2070175173

Editorialfax:+44(0)2070174554Display/classifiedadvertisingfax:+44(0)2070174554Subscriptionsfax:+44(0)2070174097

Allstaffemail: firstname.lastname@informa.com

InsuranceDay isaneditoriallyindependentnewspaperandopinionsexpressedarenotnecessarilythoseofInformaUKLtd.InformaUKLtddoesnotguaranteetheaccuracyoftheinformationcontainedinInsuranceDay,nordoesitacceptresponsibilityforerrorsoromissionsortheirconsequences.

ISSN1461-5541.RegisteredasanewspaperatthePostOffice.PublishedinLondonbyInformaUKLtd,MortimerHouse,37/41MortimerStreet,London,W1T3JH

PrintedbyNewsfaxInternational,Unit16,BowIndustrialPark,CarpentersRoad,LondonE152DZ

© Informa UK Ltd 2012.

Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,ortransmittedinanyformorbyanymeanselectronic,mechanical,photographic,recordedorotherwisewithoutthewrittenpermissionofthepublisherofInsuranceDay.

Munich Re sawmajor price hikesat April 1 renewals

T he world’s largest reinsurer,Munich Re, saw major priceincreases at the April renewalin natural catastrophe busi-

ness,butwalkedawayfromonelargeavi-ation contract and US casualty businessbecause terms were not attractive, boardmember and head of reinsurance,Torsten Jeworrek, said.

“We saw an economic rise in prices by5%,” he said. That was the figure whenchanges in cover were taken intoaccount. “At the same time, we con-sciously reduced our premium volumeby 3%.”

In US casualty, there was a “structuralprice problem”, Jeworrek said. “Priceshave moved sideways, but should havegone up, as interest rates dived further.”

In casualty, interest rates played a bigrole in the calculation. “If we cannot off-set lower interest rates through higherprices, our profitability suffers.” ThusMunich Re had given up business.

The same was true for one substantialaviation contract, which Munich Re didnot reveal.

The company also gave up some earth-quakebusinessinJapan.“Thereasonwasthe higher likelihood of earthquakes fol-lowing last year’s events,” he said.

Jeworrek said primary rates in earth-

quake cover in Japan had risen 30%.“This is good, but 10% to 15% of that iseaten up by a higher likelihood of quakeactivity,” he added.

This was also true for the Tokyo region.The “big bang”, a major quake hittingJapan’s capital, would cost Munich Reclose to €2.5bn ($3.24bn).

Chief financial officer, Jörg Schneider,said Munich Re earned €782m in the firstquarter, compared with a loss of €948m

Infrassure posts profit despite claimsdeterioration and wildfire lossSpecialist energy and infrastructure car-rier Infrassure has posted net profit for2012’s first quarter, despite a deteriora-tion in 2011 claims costs and a morerecent Chilean wildfire loss, writes Chris-topher Munro.

Net profit for the first three months oftheyearstoodatSFr6.57m($7.03m),com-pared with a SFr11.82m net loss recordedfor the prior-year period. That resultreflected the carrier’s exposure to theJapanese earthquake and tsunami,which at the time saw Infrassure book aprovisional loss of SFr16.9m on itsbalance sheet.

For the first quarter of this year, Infra-ssure confirmed it has reserved an initialsum of SFr11.8m for the wildfire in Chile.

Net claims incurred were SFr39.34min 2012’s first quarter, compared withSFr46.6m of claims during the openingthree months of last year. This still-high

level of claims saw Infrassure’s first-quarter combined ratio total 107%.While an improvement on the 120%posted for the first three months of 2011,the figure still highlights the volatility ofthe energy and power insurance classes.

Total financial income hit SFr9.9m, upfrom the SFr2.8m loss recorded in 2011’sfirst quarter. Infrassure said this result“has mainly been driven by the positiveimpact in the unrealised investmentincome and an improvement in the for-eign exchange impacts”.

Infrassure chief underwriting officer,HansZimmermann,saidtheSwitzerland-domiciled carrier continues with itsrobust approach to underwriting, addinghe has welcomed the rate increases thathave been imposed in response to losses.

“We look forward to profitable devel-opment and margin improvementsthroughout the rest of 2012,” he added.

Herbert Fromme, CologneGerman correspondent

in the first quarter of 2011. For the fullyear, the company is confident it willreach€2.5bn.Premiumincomewillcometocloseto€50bn,ofwhichbetween€26bnand €27bn will come from reinsurance,the rest from primary insurance andhealthcare. The strong increase in rein-surance was due mainly to more one-offcontracts in life reinsurance.

The company’s investment portfolio of€212bn saw a present yield of 3.6%, down

SFr6.57mInfrassure’s

Q1 2012 profit

107%Infrassure’sQ1 2012

combined ratio

Hiscox expects US reinsuranceconditions to keep improvingHiscox has provided an indicator it expectsfurther improvements in reinsurance mar-ket conditions by holding back some UScapacity at the start of the year for forthcom-ing renewals, writes Scott Vincent.

The Bermudian firm’s interim statementshowed a slight reduction of premiumincome0.9%to£180.7m($291.6m)foritsLon-don market operations in the first quarter,due to some US reinsurance clients purchas-ing less cover as well as some reinsurancecapacity being held back. Hiscox Bermuda’sgross written premiums were down 15.7% to$117.2m, due to the non-renewal of a pro ratatreaty on a large US account.

However, Hiscox said its Bermuda pre-mium income was now growing year on year,following the April 1 renewal season.

Hiscox said rates for Japanese earthquake

catastropheexcess-of-losshavedoubledsincetheMarch2011earthquakeandtsunami.

“At the April renewals, our reinsurancebusiness more than doubled its budgeted pre-mium income in this area,” Hiscox stated.

Elsewhere, Hiscox saw growth in its US, UKand European businesses.

Hiscox USA grew premium incomeby 21.6% to $47.8m, with growth driven bymanagement liability, construction and ter-rorism lines.

Gross written premiums rose 3.4% to£89.1m at Hiscox UK, with the company plan-ning a TV advertising campaign in the comingmonths to help further build the brand.

Hiscox Europe grew 7.9% to produce grosswritten premiums of €69.4m ($90.1m) for thequarter, driven by its specialty commercial,technology and media lines.

Argo returns to black on backof low catastrophe lossesArgo generated net profit of $19.6mduring the first quarter of 2012, comparedwith a net loss of $94.1m during the open-ing three months of last year, writesScott Vincent.

The performance improvement wasdriven by the benign first quarter of 2012 –pre-taxcatastrophelosseswere$4mforthequarter, compared with $113.1m for thefirst quarter of 2011.

The Bermudian firm gener-ated a combined ratio of103.4% for the period,compared with 144.9%during the first threemonths of 2011.

Argo’s chief executive,MarkWatson,saidmarketconditions were improving“to varying degrees” acrossthe company’s platforms.Argo’s international specialty seg-

ment helped drive the improvement, gen-erating an operating profit of of $5.8mcompared with a loss of $52.8m during thefirst quarter of 2011.

Syndicate 1200 also swung from a loss of$47.3m during the first quarter of last yearto a profit of $1.7m during the first threemonths of 2012.

In Argo’s excess and surplus lines seg-ment, operating profit rose from

$13m to $18.9m.Watson said the com-

pany’s new ventures,most notably in Brazil,had got off to a strongstart.

Argo had previouslyannounced a target of

$30m to $50m of writtenpremium through its

new Brazilian operationin 2012.

HBH ‘gratifyingly close’ tohitting five-year planHawkes Bay Holdings’ (HBH), the parent com-pany which oversaw the management buyoutof Tysers and Aquila Underwriting, is “gratify-ingly close” to hitting the targets set out in thefive year plan it established in 2007, writesChristopher Munro.

Overall revenues for HBH reached £37.6m($60.6m) in 2011, up 6% compared with thepreviousyear, leavingtheholdingfirmforTys-ers and Aquila with earnings before interest,taxes, depreciation and amortisation of £7.6m,an increase of 41% over 2010. Pre-tax profit hit£5.18m, up from £2.67m for 2010.

“[We are] gratifyingly close to the targets setin the company’s five-year strategic plan at thetime of the Tysers management buy-out in2007,” HBH chairman, Christopher Spratt,said. HBH is owned entirely by its employeesand the decision has been taken to not pay adividend for the last year, instead putting the£2.73m of profit into its reserves.

The results have been bolstered by a solidperformance, Tysers’ chief executive, ChrisElliott, said. “We have further refined our

strategy and have identified specific areas ofthe business to strengthen.

“In addition, we will be adding some com-plementary business lines that will enhanceour offering to clients and we expect to seethe benefits emerge over the next 12 to 18months,” he said.

AsforAquila,Elliottsaidtheunitcontinuesto develop and “remains a strategicallyimportant business for HBH”.

Four Lloyd’s coverholders operate underthe Aquila umbrella – Hong Kong-basedSART Underwriting, the London-situatedVectura Underwriting and Principia Under-writing and Cove Program Underwriters.SART focuses on marine, marine-related andengineering risks based in the Asia-Pacificregion, while Vectura is a marine cargoinsurer and reinsurer.

Principia offers a range of specialist liabil-ity, business interruption, brand protectionand crisis management to the creative media,informationtechnologyandcorporateindus-tries.CovedealswithUSconstructionrisks.

Berkshire profit doubles with anet profit of $3.25bnBerkshire Hathaway closed the first quarterwith a net profit of $3.25bn, more thandouble the year-earlier profit of $1.51bn, writesPeterBirks.

Berkshire’s insurance operations sawfewer catastrophe losses and swung to under-writing income of $85m from a year-earlierloss of $1.28bn and its finance business postedderivative gains of $1bn, more than triplingthe prior-year $271m. The group’s operatingincome jumped to $2.67bn from $1.59bn,which, in addition to the underwriting result,included $791m in investment income frominsurance units, down 17%, and income of$2bnfromnon-insurancebusinesses,up28%.

The improved underwriting resultreflected total earned premiums of $8.07bn,an increase of 7.8%; claims costs of $4.77bn,down 21%; and outlays for life, annuity andhealth benefits of $1.09bn, up 7.6%. Berk-shire’s insurance units posted no significantcat losses during the 2012 period.

Berkshire Hathaway Re’s underwritingloss dropped to $191m, from $1.34bn inQ1 2011, on earned premiums of $2.07bn,up 6.5%. Berkshire’s General Re reinsuranceunit, which also posted some of the year-earlier cat losses, swung to underwritingincome of $81m from a loss of $326m, asearned premiums rose 2.4% to $1.47bn.

bondsor€2.6bn–upfrom€2.2bnattheendofDecember2011.

Munich Re has no plans to go for higherrisks in investments, Schneider said.

“The environment is difficult, with theEuropean economy apart from Germanyslowing down considerably,” he said.“This is not the time for an aggressive posi-tioning in investments.” However, it wasso strongly capitalised it could reactquickly if chances presented themselves.

on the 3.9% of the first quarter of 2011 –both figures annualised.

“We feel the pinch of lower interestrates,” Schneider said. Munich Re has€183bn in fixed-income papers and halfofthatingovernmentbonds,withsmallerproblemcountriesinEuropeplayingonlyaminorrole.

The company has invested heavily inGermany, the US, Canada and the UK, andalso in Italy, with 3% of all government

$19.6mArgo net profitfor the firstquarter of

2012

4

TECHNOLOGYFOCUSwww.insuranceday.com|Wednesday 9May 2012

T hereisnodoubtwelive inchallenging times. Insur-ers and reinsurers facechange at every level of

their business, from new risks,such as cyber risks, to unprece-dented and catastrophic weatherpatterns, which have led torecord claims.

Virtually no aspect of insuranceis unaffected by these global andfar-reaching changes.

You could argue the drivers ofchange–economic,social,political,technological and environmentalfactors – are ever-present. How-ever, the difficulties being createdby each is at an all-time high.

For the London market,responding and adapting to thesechanges requires double the effortfor insurers outside this market.

Responding to external pres-sures, largely by adapting internalprocesses, is commonplace forinsurers.IntheLondonmarket, thechallenge is two-fold.

First, businesses have to adapttheir internal processes to meetthesechallenges.Second,theyneedto ensure these processes alignwith the centralised infrastructureandservicesoftheLloyd’sandcom-panymarketbureaux.

These are not within the controlofanyoneinsurerbutoftherespec-tive markets as a whole.

Therefore, change needs to meetthe needs of the whole market, nota single insurer. This means eachinsurer’s and reinsurer’s Londonmarket component is operation-ally unique.

Of the five macro-drivers ofchange, which is having the mostimpact? C-level executives are con-cerned by the economic outlook;some are more worried aboutthe financial precariousness of theeurozone, while for others, therecord level of catastrophe claimsdominates their horizon.

Suffice to say, each issue is leav-ing its own particular mark. So, letus look at the impact of each.

The economic outlookTheeconomyaffects insurers,rein-surers and buyers alike.

Typically, recessions or slowgrowth will see an increase in thelevels of fraudulent claims. Marketresearch reveals a perverse justifi-cation from some consumersinsurance fraud is justified; it isjust payback for years of paying

premiums. Usually, it correspondswith a reduction in insurance pur-chases, as individuals and busi-nesses accept more risk, to reducespend. These two factors alone cre-ate many challenges. The result is areduction in the levels of income;while claims increase, specificallyindividual claims, increasing mon-ies paid out, especially where dubi-ous claims are missed.

The social landscapeInteraction between insurers andconsumers has changed enor-mously over the past 10 to 15 years.The internet and mobile communi-cations have created a require-ment for instant gratification,particularly as younger peopleconduct most of their interactionsvia mobile devices.

Whether it is to book a restau-rant or find an address, the expec-tation is of a response in seconds,not minutes.

These changes affect our sociallives, as well as our working lives.Insurers are responding in anumber of ways, from the creationof mobile applications, to beingable to produce a quote within“60 seconds”.

We also carry these expectationsto our place of work; demanding touse the same tools to do our jobs aswe use to run our social lives.

The political spectrumRegulationis,byfar,havingthemostfar-reaching affect on the industry.Political intervention has come inseveralguisesinrecentyears.

Personal lines insurance has feltthe effect most forcefully, withchanges to the Compensation Actand the introduction of the Minis-try of Justice portal.

Althoughthesetypesofinterven-tion can have a large impact on asingle line or even a type of busi-ness, their impact is relativelysmall when compared to the EU-wide regulation being introducedby Solvency II.

Insurers and reinsurers arespending millions preparing for thisregulation and it affects every aspectofoperations,frombothacapitalandenterpriseriskperspective.

The technology waveArguably, technology is the biggestchange agent to affect the industryin the past five years. Not only is itinfluencing all the other drivers tosome extent, it is also often provid-ing the solutions and exacerbatingthe problems.

Companies and individuals aresubstantially increasing their useof technology to run affairs.

In doing this, businesses are vul-nerable to a new type of risk: cyber-risk. It is a growth market, con-stantly lookingfornewandflexibleproducts, especially as the risks oftechnology usage and data storage,via different methods, are not yetfully understood.

This presents fresh challenges toinsurers and reinsurers, as doesevolving customers’ needs, partic-ularly in relation to new products,such as software to protect dataand processes in cloud computing.

It is a good example of technol-ogy as the problem and solution,with the solution being complex,flexibleratingenginesallowingthesector to create and rate new andemerging products within hours.

Environmental considerationsIf technology is having the biggestimpact, it is arguably environmen-tal considerations that have thepotential to be the most costly.

Regardless of what is causingenvironmental change, clearly theworld’s weather patterns arechanging; 2010 and 2011 both setnew records for the level of catas-trophe claims. While most of theindustry is adequately capitalised,losses of this magnitude cannot besustained indefinitely, without sig-nificant increases in premium.

This affects every sphere of thesector and every market. Here too,technology is helping, by improv-ingthesector’sability topredict theweather and to support develop-ment of products to provide morespecific cover to individuals andbusinesses most affected.

So far, I have only scratched thesurface on each of the macro-drivers of change and the impacteach is having on the industry. Ithink it shows the world for cus-tomers and insurers is changing ata pace and on a scale unforeseen.

The question remains, how cantheindustryrise totheseenormouschallenges? While it cannot stopthis change, there are many thingsit can do to respond, a theme I willexplore in my next article.n

Michael Cook,associate partner,consulting practiceCSC (EMEA)

External pressures driveLondonmarket changeInthesecondofthreearticles,MichaelCookexplorestheexternalpressuresthathaveledtochangeintheLondonmarketandtheimpactof these

The internet and mobilecommunications havecreated a requirementfor instant gratification,particularly as youngerpeople conduct most oftheir interactions viamobile devices. Whether it is to book arestaurant or find anaddress, the expectationis of a response inseconds, not minutes

5

RISKFORESIGHTwww.insuranceday.com | Wednesday 9 May 2012

Rising civil unrest risks inAngola and BotswanaAs Angola enters its pre-electoralphase, civil unrest is very likely torise. The political opposition islikely to capitalise on populardiscontent, especially among theeconomically marginalised youthin Luanda and in provincial capi-tals, to mobilise against the govern-ment. Commercial assets will notbe the primary targets, but violentoutbreaks are likely in instanceswhere the security forces use vio-lence to contain demonstrations.

The ruling MPLA party andAngola’s president, José EduardodosSantos,havebeeninpowersince1979. However, socio-economicgrievancesaregrowing. Inaddition,a new electoral law adopted inSeptember 2011, which should haveled to the establishment of an in-dependent electoral commission,has fallen short of the expectationsoftheopposition.OppositionpartiesUnita (MPLA’s wartime opponent)and PRS have already threatened toboycotttheelections.

Demonstrations dispersedDemonstrations in Luanda,Lubango, Benguela and Huambohave been dispersed non-violently,but the use of violence againstdemonstrators would be a triggerfor large-scale popular unrest,mainly in Luanda, and violenceagainst security forces and govern-ment property.

While the leadership of the armyand the police remain loyal to thegovernment for fear of losing theirbusiness ventures, our sourcesindicate discontentment is increas-ing among the rank and file. Wetherefore expect an increase ofnon-violent protests until after theelections, which will becomeincreasingly disruptive if the gov-ernment postpones the elections orresorts to electoral fraud, as wasalleged in the 2008 election.

Also, ahead of the elections,wage-related strikes are increas-ingly likely. Strikes formerlyoccurred mostly in the oil sector(the workers union at Chevron/CabindaGulf threatened a strikeover the “Angolanisation” of theworkforce last July) but havespread to other sectors, such as

health, transport, education anddiamond mining. There are alsolikely to be frequent non-violentprotests calling for better pay andworking conditions in urban cen-tres, especially Luanda, the princi-pal commercial city.

‘Indigenisation’ policyTo reduce unrest, the governmenthas focused its labour policy on“indigenisation”, a process bywhich expatriate workers arereplaced with native Angolanemployees. Compulsory targetsand requirements present opera-tional hurdles for all companies:the inadequate local education sys-tem has created a shortage ofskilled local workers, requiringforeign investors to rely on largebudgets for overseas study andtraining to meet quotas.

Furthermore, the poaching of,and high wage demands from,trained Angolans take place regu-larly. Despite this, labour relationsdo not present a significant directobstacle to business operations,particularly in the oil sector.n

Since 2011, labour unions in Bot-swana have stepped up theirdemands for higher pay andimproved working conditions, aswellasbecomingincreasinglycrit-ical of the ruling BDP party of pres-ident Ian Khama. A public sectorstrike last year resulted in a harshgovernment response and theamendment of the Trade DisputesAct. The government reclassifiedadditional sectors as essentialservice providers that are prohib-ited from striking, including dia-mondindustryworkers.

In response, the Botswana Fed-eration of Public Sector Unions,which represents more than 90%of the government workforce, haspledged its support for a mootedopposition coalition at the 2014general elections. Further strikeaction is very likely to recur in themining, public, construction andenergy sectors over the next year.Diamond mining firms are likelyto be at highest risk of fallingrevenues owing to business dis-

for the BDP at the polls, Khama islikely to ensure a smooth andpeaceful transition of power,given Botswana’s long-timedemocratic traditions.

Meanwhile, frustration withillegal immigrants is expected tomount, specifically those fromneighbouring Zimbabwe who areblamed for an increase in crime inGaborone and Francistown. Com-munal protests against Zimba-bweans will therefore be a riskover the next year, although sig-nificant property damage isunlikely. The government is tak-ing steps to mitigate the risk. Forexample, in a report to parliamentthe regional immigration officerfor Francistown reported theimmigration service had deportedan average of 1,600 Zimbabweansevery month in 2011.

San evictionsAnother source of protest relatesto the long-standing disputeregarding evictions from the tra-ditional lands of the San people toallow mining operations to be

AngolaBotswana

ruption. Manufacturing, energy,retail and construction will also beat growing risk.

Riot police deployedAs the 2014 elections approach,authorities are likely to deployriot police on opposition protests,as well as striking workers andcivil society demonstrations.Risks will be highest in the capi-tal, Gaborone, as well as otherurban centres, thus raising risksof collateral damage to commer-cial and government assets, aswell as to individuals caught up inany violent confrontations. Cru-cially, however, in case of a defeat

conducted. While the dispute hasmostly been handled throughmediation, future displacement ofthe San in favour of diamondmining on their ancestral landon the Central Kalahari GameReserve has the potential of turn-ing into a violent confrontationagainst the government and min-ing investors.n

Exclusive Analysis is a specialistintelligence company that forecastscommercially relevant political andviolent risks worldwide. Foradditional information, please visitour website www.exclusive-analysis.com

1,600Number of Zimbabweans Botswana’simmigration service deported amonthin 2011, according to the Francistownregional immigration officer

SupportersofdosSantosatapre-electionrally inLuanda

Mike Cohen/Bloomberg News

33Number of yearsAngola’s MPLAparty has beenin government

6 www.insuranceday.com|Wednesday 9May 2012

WORLD LOSS INTELLIGENCE/POLITICAL & TRADE

UK: Two new surveys have indicated renewed confidence among UK companies despite the double-dip recession.The latest Business Confidence Monitor from ICAEW/Grant Thornton has shown a strong improvement in confi-

dence, with quarter-on-quarter growth of 0.6% forecast for the second quarter of 2012.Businesses expect capital investment to grow by just 1.4% over the next 12 months, the survey showed. Compa-

nies’reportedexportsare4.1%higherthanayearago,upfrom3.3%lastquarterandthestrongestgrowthsincethethird quarter of 2011.

Scott Barnes, chief executive of Grant Thornton, said: “Any improvement in the key performance indicators inthe Business Confidence Monitor is positive.

“Turnover and profits are all increasing, but nowhere near the rate seen pre-recession, and businesses arebeginning to realise this environment may be the norm for some time. However, we are working with dynamiccompanies that are delivering high growth in both domestic and global markets, so businesses must continue tolook for opportunities.”

A separate survey from the Confederation of British Industry showed a net 22% of small and medium-sizedenterprises that are manufacturers said they were more optimistic in the three months to April.

Credit insurer Atradius has warned the UK will struggle to keep its economy growing and withstand the deterio-rating outlook for mainland Europe.

But growth is expected to remain positive – if modest – in 2012 and increase further in 2013.

LATIN AMERICA: Rating agency Moody’s has said there is little risk of recent expropriation in Latin America extending tocountries in the region with robust institutional frameworks and respect for the rule of law.

The rating agency was commenting following recent nationalisations in Bolivia, Argentina and Belize.Moody’s said Venezuela has shown the greatest willingness to nationalise companies and further expropriation is likely.Incontrast,Moody’ssaid all themajor investment-graderated nations intheregionsuch asChile,Mexico,Brazil,Peru and

Colombia have stronger institutions.

Eurozone crisis: Contraction continues following temporary rebound in January

Trade credit: Southern Europe is region of highestconcern for credit insurers

EUROPE: Claims trends in the credit insurance sector have continued to deteri-orate since the beginning of the year, with Southern Europe the region of high-est concern., writes Scott Vincent .

According to Robert Nijhout, executive director at the International CreditInsurance & Surety Association (ICISA), the first quarter saw an increase inclaims, particularly in frequency.

“The number of companies with a deteriorating outlook is also on the rise.SouthernEuroperemainstheregionofhighestconcern,”hetold InsuranceDay.Nijhout said the rise in claims was visible across all sectors.

“Sectorsofparticularconcernaretheconstructionsector –forexample,steel– retail and automotive,” he said.

However,LatinAmericacontinuestobuckthetrendwithincreasingdemandfor cover and a good claims performance.

“Our global outlook remains mixed with a positive outlook for Asia and LatinAmerica. For Europe, we do not foresee an early improvement and we expectthe present trend will continue during the next six months,” he said.

The mood concurs with credit insurer Atradius, which has predicted anincrease in insolvencies across many European economies during 2012.

Countries highlighted by Atradius as having a high and deteriorating insol-vency risk in 2012 include Belgium, Spain, France, Greece, Italy, Portugal andthe UK. Credit insurers have attributed the concerning global trade conditionsto a lack of adequate financing by banks, as well as the consequences of sover-eign debt in the EU, US and Japan.

In a recent newsletter to ICISA members, Nijhout said there was particularconcernamonghisassociation’smembershipabouttheabilityorwillingnessofbanks to continue to finance trade.

“Market conditions for trade credit insurance in 2012 are generally consid-ered to be soft, although it is unclear if they will stay that way. If the envisionedriskenvironmentworsens, this isexpectedtoleadtopriceadjustmentsthatbet-ter reflect the underwritten risk,” he said.

Nijhout said demand for trade credit cover is rising in the Bric countries (Bra-zil, Russia, India and China), in eastern Europe and, more generally, in Asia andLatin America.

The sector’s other main association, the Berne Union, reported a 17% growthin the volume of export credits and foreign direct investment insured by mem-bers during 2011. The Berne Union said credit and investment insurers havepaid $15bn to exporters and investors since the beginning of the global finan-cial crisis in 2008.

Business confidence: UK companies upbeat as they adjust to new norm

4.1%Reported rise inexports fromcompaniessurveyedExpropriation risk: Recent nationalisations in Latin America do not indicate trend

22%Of SMEs who

were manufacturerswere moreoptimistic

EUROPE: Eurozone economic activity saw a further declinein April, Euler Hermes has reported, with manufacturing atits lowest level in close to three years.

Deterioration in manufacturing was evident across theeurozone’s five largest economies – Germany, France, Spain,Italy and the Netherlands.

European bank credit growth to the private sector has alsoground to a halt, with credit to business in the three months toMarch falling 3% on the previous three months.

Unemployment in the zone increased 160,000 in March to arecord high of 17.36 million, equivalent to a eurozone un-employment rate of 10.9%.

“Expect theeurozonetoremainaleadingdragontheglobaleconomy,” Euler Hermes said.

160,000Increase in numberof unemployed inMarch, a total of...

7www.insuranceday.com| Wednesday 9 May 2012

WORLD LOSS INTELLIGENCE/POLITICAL & TRADE

UK: Two new surveys have indicated renewed confidence among UK companies despite the double-dip recession.The latest Business Confidence Monitor from ICAEW/Grant Thornton has shown a strong improvement in confi-

dence, with quarter-on-quarter growth of 0.6% forecast for the second quarter of 2012.Businesses expect capital investment to grow by just 1.4% over the next 12 months, the survey showed. Compa-

nies’reportedexportsare4.1%higherthanayearago,upfrom3.3%lastquarterandthestrongestgrowthsincethethird quarter of 2011.

Scott Barnes, chief executive of Grant Thornton, said: “Any improvement in the key performance indicators inthe Business Confidence Monitor is positive.

“Turnover and profits are all increasing, but nowhere near the rate seen pre-recession, and businesses arebeginning to realise this environment may be the norm for some time. However, we are working with dynamiccompanies that are delivering high growth in both domestic and global markets, so businesses must continue tolook for opportunities.”

A separate survey from the Confederation of British Industry showed a net 22% of small and medium-sizedenterprises that are manufacturers said they were more optimistic in the three months to April.

Credit insurer Atradius has warned the UK will struggle to keep its economy growing and withstand the deterio-rating outlook for mainland Europe.

But growth is expected to remain positive – if modest – in 2012 and increase further in 2013.IN TOMORROW’S WORLD LOSS INTELLIGENCE:

LIABILITY & SETTLEMENTS

Eurozone crisis: Contraction continues following temporary rebound in January

Business confidence: UK companies upbeat as they adjust to new norm

Eurozone crisis: Increase in insolvencies expected acrossmuchof Europe

EUROPE: Credit conditions in the eurozone remain tight, Atradius has reported, with anincrease in insolvencies expected across much of the continent.

The tightening credit conditions are the result of persistently high risk aversion and high debtlevels in both the public and private sectors.

“In light of continued uncertainty about future writedowns, weak capital positions andsovereign-related risks, the most recent evidence suggests the credit channel is not yet function-ing effectively,” Atradius reported in its latest global economic outlook report.

Given the uncertainty about future economic developments, the tightening of loan supply isexpected to continue across Europe.

“This is especially troublesome for small and medium-sized businesses, often reliant on bankfinancing. New investment will be hampered, as will the refinancing of existing loans,” it added.

War risk: Tensions escalate between two Sudans

SUDAN: Tensions have risen between thetwo Sudans after South Sudan invaded theHeglig oil field north of the country’s bor-der, reports Euler Hermes.

Although Sudan has recaptured the area,tensions remain high on issues such asallocation of oil revenues – most of the oildeposits are in south but pipelines gothrough Sudan.

Euler Hermes reports a build up in mili-taryactivityandaction.Evenifoutrightwaris avoided, the credit insurer says economicdamage can be expected as oil productionhas all but ceased.

“Do not expect a quick resolution to theconflict, which may yet spill over into othercountries,” the credit insurer warned.

Eurozone crisis: Political uncertaintyfollows Greek parliamentary election

GREECE: Political instability and the prospect of demonstra-tions will continue in Greece this week, according to IHS GlobalInsight analyst Blanka Kolenikova.

“Amid continuous economic and fiscal hardship and monthsof austerity, electors will punish the two main pro-bailoutparties – the Panhellenic Socialist Movement and New Demo-cracy – both of which have dominated the Greek political scenefor decades,” Kolenikova said.

“As many as 10 parties are likely to enter parliament, whichwill make government creationextremely difficult andraise concerns aboutpolitical vacuum andinstability. Theaftermath of theelection mightalso be accompa-nied by mass pro-tests staged by thefar left, especially iftheir surge in supportdoes not win them aplace in the ruling coalition.”

10Different politicalparties could berepresented in theGreek parliament

Hegligoil field

Low Average High

Graph Insolvency risk in 2012

Deterioriating

Stable

Improving

CanadaFinland

GermanySweden

JapanNew Zealand

Norway

AustriaNetherlandsSwitzerland

Australia

Belgium, Spain,France, Greece,Italy, Portugal,

UK

IrelandLuxembourg

DenmarkUS

Source: Atradius

Ch

ang

e

Level

10.9%....Unemploymentrate across theeurozone

17.3 m...Unemployedin the eurozone,equivalent to...

8

INSURANCEDAYATLASwww.insuranceday.com|Wednesday 9May 2012

SupervisionTo rationalise the supervision andcontrol of the financial industry,including insurance, in 2007 thegovernment appointed an interimboard to oversee the establishmentof an integrated financial supervi-sory body, to be called the FinancialRegulatoryAuthority(FRA),dealingwithbanking,insurance,assetman-agement, securities and all otherfinancial services. The plan was toco-ordinate by the end of 2008 theactivities of Bank of Qatar’s depart-ment of banking supervision andcustomer service unit, the QatarFinancial Markets Authority andthe QFC Regulatory Authority, but ithas been delayed for unknown rea-sons and at the time of preparationof this report it was uncertain whenitwillbecomeoperational.

Company changesAl Khaleej became a fully takafulcompany effective from January 1,2010, changing its name from AlKhaleej Insurance and ReinsuranceCompany to Al Khaleej TakafulInsurance and Reinsurance Com-pany.Establishedin1978,AlKhaleejwas the fourth-largest company inthe market in 2009, with gross pre-mium income of Riyal281.9m($77.4m). In 2010, it recorded grosscontributions of Riyal286.5m, ofwhich Riyal267.4m was non-lifebusiness(93%oftotalcontributions)andRiyal19.1mwastakafullifebusi-ness(7%oftotalcontributions).

Each national company has anumber of tied accounts derivedfrom its shareholders.

The figures in respect of AlKhaleej, Doha and QIIC includelife business since because thesecompanies operate in this class ofbusiness according to Islamicprinciples, they are permitted bythe MBT to write such business.Nevertheless, the other nationalcompanieswriteannualgroupper-sonal accident business coveringdeath by any cause as a non-lifeclass of business and this approachfrequently substitutes for grouplife business as such in the market.

It is curious the two largest com-panies – QIC and QCIRCO – sufferedthe largest reductions in gross pre-miumincomein2009and2010. It isthought this may have been par-tially the result of pressure onmajor energy risk premium ratesand the effects of the global eco-nomic crisis on the local economy.

Distribution channelsIt is difficult to arrive at accuratedistribution mix estimates becauseof the potential impact of the entryin the local market for the first time

of large international brokers. His-torically, brokers have never beena feature of the market and themajor firms have long been accus-tomed to writing most of theirmajor accounts on a direct basis.Anecdotal evidence clearly sug-gests this situation still pertains.

Competition is, however, un-questionably accelerating in a softmarketandthiswillinevitablybeginto give the brokers opportunities tobreak into the major risk retail mar-ketovertimealthoughevidencesug-gests the monopoly of the nationalcompanies over government busi-nessisunlikelytoendsoon.

The presence of internationalbrokers in the reinsurance place-ment of all major energy risks andsome major property risks hasalready advanced awareness ofrisk management in the marketand thus the degree of sophistica-tion with which the largest are han-dled and placed.

Bancassuranceisdefinitelygrow-ing and there is now direct involve-ment by banks in the market. Arecentexampleis theestablishmentof its own insurer by Doha Bank,launched in January 2008 with alicence from the QFC to write allclassesofgeneralbranchinsurance.

Direct handlingThe leading families in Qatar havea range of business interestsincluding insurance and it is usualfor theseaccounts tobeplacedwiththe in-house insurer on a more orless “tied” basis.

Otherwise, insurers use a directsales force operating from com-pany head offices in Doha. Thesesales agents are either remuner-atedbyamixtureofsalaryandcom-mission or salary and bonuses.Some of these may operate from abranch office but as Qatar is not alargecountry, therearenotmanyofthem. The branch offices whichexist are mainly used for servicingmotor insurance; some insurershave sales offices in the Traffic

Departmentsomotoristscanobtaincover on the spot when applyingfororrenewingvehicleregistration.

There are no telesales in Qatarandthissaleschannelisnotthoughttohavemuchofafutureaspersonalcontact is preferred. There iscomparatively little advertising ofinsurance products, although somenational companies sponsor sport-ingeventsforpublicitypurposes.

BancassuranceAll of the major national insurancecompaniesworkcloselywithbanksin respect of distribution. Forexample, Qatar Islamic Insuranceworks closely with Qatar Interna-tional Islamic Bank and providesmarine cargo coverage for exportsandimports financedbythebank.

Bancassurance has not histori-cally been a major distributioninsurance channel in Qataralthough when a bank is lendingmoney for car purchase it will usu-ally insist on insurance being takenout with one of the national compa-nies. Banks do not receive commis-sion on directed business but theinsurers debit them with premi-ums and the bank also charges anadditional fee to the client account.The Central Bank does not appearto impose specific controls as tohow banks deal with insurancesales and client debiting and BaselIII is not yet of relevance.

Other bank/insurer relation-ships involve the granting of auto-matic personal accident/naturaldeath cover to those taking out apersonal loan by way of credit lifemaster policies.

With the emergence of the QFC,providing as it does significantmarketing opportunities for a widerange of financial institutions andintermediaries, it is expected banc-assurance techniques will be morewidely deployed in the future.There certainly appears to beincreasing interest in bancassur-ance and even direct involvementby banks in the insurance market.

Apart from bank connections,insurers also have alliances withmain car dealerships. These canissue cover notes for compulsorymotor third-party liability insur-ance and can access directly insurerdatabasestoenterinsurancedetails.

Affinityschemesperseappeartobe rare, but the QIIC provides agroup personal accident schemecovering members of the WelfareAssociation of Indian BusinessAdministrators Qatar (Waibaq).

AgenciesInsurance agents are regulatedunder art 20 of Insurance DecreeNo 1 of 1966. There is no independ-ent agency system, although thereisnoprohibitionagainst it.Tobeanagent, the individual must be atleast 21 years of age and a Qatarinational. They must be of goodrepute and not an unrehabilitatedbankrupt.Thesameappliestopart-ners or directors of agency firms.

More than 400 Qatari and for-eign individuals have receivedauthorisation to operate within theQFC. The professions of these indi-viduals are not mentioned, but afew may act as insurance agents.

The foreign insurers are all spon-soredbylocalmerchantfamiliesthatwill support the company with theirown business and any introductionstheycanmake.

Insurance brokersRelevant to brokers, the InsuranceMediation Business Rules 2011were published in June 2011 by theQatar Financial Centre RegulatoryAuthority (QFRCA) and came intoeffect on July 1, 2011. The rulescover principally:l Definitions of insurance inter-

mediary/insurance mediation/captive insurance managers/client money;

l Prudential requirements relat-ing to financial resources/system controls for capital andasset requirements/minimumcapital and asset requirements/professional indemnity insur-ance/filing and deadlines forthe filing of prudential require-ment returns;

l Regulations relating to clientmoney, opening client moneybank accounts, client moneyexceptions, treatment of clientmoney and related fiduciaryduties and the segregation ofclient money;

l Performing calculations andreconciliations/treatment ofmaterial discrepancies;

l Client money distribution rules;l Collateral;l Client mandates/systems and

controlsrelatedtoclientmandate;l Record keeping/giving informa-

tion/safeguarding documentsand assets; and

l Transitional provisions.Historically, no licences have beenissued to insurance brokers andthey are not contemplated underthe 1966 insurance legislation.

The QFC now allows for authori-sation of brokers to operate in thelocal market, however, andrecently the MBT granted a licencetoQatarInternationalBroker,eventhough brokers are not contem-plated within Insurance Decree No1 of 1966, so brokers licensed by theMBT do not appear to be subject toany specific regulations.

Qatar International Broker, withinitial capital of Riyal600,000, islicensed to provide insurancebroking and risk-managementservices to the corporate sector inQatar. According to media reports,the broking firm was establishedfollowing demand for local special-ist insurance broking services bycompanies involved in complexand technical projects within bothprivate and government sectors.

It is headed by David Ezzard,chairmanofCarrollandPartners,aLloyd’s insurance broker. Thisdevelopment appears to haveraised some eyebrows in the localmarket, especially in respect ofbrokers that have had to subjectthemselves to the strict compliancecriteria of the QFC to obtain anoperating licence. The new entityhas an outsourcing contract withCarroll and Partners to support alltechnical and claims operations.

Therearestringentlicensingandcompliance requirements for bro-kers established in the QFC. Theserequirements are all consolidatedwith other financial intermediaryregulations and they are lengthyandcomplex.Therearenorequire-ments in QFC rules, however, forbrokers to have professionalindemnity insurance.n

This article is based on materialsupplied by Axco InsuranceInformation Services(www.axcoinfo.com). Axco is aleading insurance market researchorganisation and web publisherthat provides market reports andstatistics on more than 160countries. The field research teamsdeliver regular updates on allaspects of non-life (property/casualty) and life and benefitsmarkets including regulation andcompliance, market conditions,hazards, reinsurance, marketbackgrounds and businessdirectories.

Graph 3: Development of the life and non-life market for the period2004 to 2008 ($bn)

n Life n Non-life

1.0

0.8

0.6

0.4

0.2

0

Source: Axco Global Statistics based on data from insurance industry associationsand regulatory bodies

2004 2005 2006 2007 2008

Qatar non-life market

T here is a total of 21 directinsurance companiesand branches of foreigninsurers licensed in the

Qatar non-life insurance market.These include five national compa-nies and four branches of foreigncompanies licensed by the QatariMinistry of Business and Trade(MBT) under Insurance DecreeNo 1 of 1966; 11 companies andbranches of foreign companieslicensed by the Qatar FinancialCentre (QFC); and one captiveinsurance and reinsurance com-pany licensed by the MBT.

There were five national compa-nies in the market in 2011 licensedby the MBT. These were QatarInsurance Company (QIC), QatarGeneral Insurance and Reinsur-ance Company (QGIRCO), AlKhaleej Takaful Insurance andReinsurance Company, DohaInsurance Company and QatarIslamic Insurance Company (QIIC).

National companies licensed bythe MBT must be publicly quotedand fully owned by Qatari share-holders. The most significantpart of the insurance market – thegovernment-owned energy sector– is reserved for them. These risksare put out to competitive tender,normally every three years.

Energy businessThe Qatar non-life market notrelated to energy business is stillcomparatively small. The energyand petrochemical market makesup an estimated 50% of the wholemarket. It is this dominance ofenergy business that largelyaccounts for Qatar’s relatively ele-vated position in world marketrankings compared with countrieswith similar populations in theGulf Co-operation Council (GCC)states such as Bahrain and Kuwait.

The MBT has not publishedstatistics for several years and theQFC does not publish statisticsregarding the activities of its mem-bers. The Qatar Statistical Author-ity publishes some figures relatedtobanks, insurancecompaniesandother business activities (covering37 firms) but these are not split by

tinuing fierce local and interna-tional competition leading toreductions in premium rates in theprincipal classes of business. Inany event, such trends are in linewith other energy-dominatedinsurance markets in the region.

There is internal market activityin Qatar in respect of locallyplaced facultative reinsurance,especially as between the nationalcompanies (including facultativecessions by the latter to the localcaptive, Al Koot, owned by QatarPetroleum). It is not knownwhether the GSDP data takesaccount of such activity, whichcould result in double counting ofpremium from the same originalgross premium source.

Compared with other GCC states,the motor account (third-partyliability and casco) constituted arelatively small proportion of totalnon-life business (close to 20.6% in2008), but it is the area where manyof the foreign companies have con-centratedtheirefforts,sincetodatethey have been denied participa-tion in government-owned risks.

Thisremainsthecase inpractice,although whether it will do so forthe future is now a matter of someconjecture, given the dynamic andliberal economic policies beingpursued in the country in therecent years, one of the manifesta-tions of which has been the emer-gence of the QFC Authority. Sincethe latter permits authorised retailand wholesale carriers and bro-kers to operate within the localmarket, as well as in overseas mar-kets, some changes to the estab-lished status quo would appear tobe a possibility in the future.

In the meantime, however,according to anecdotal evidencethenationalcompaniescontinuetohave a monopoly of governmentbusiness and therefore of most ofthe largest accounts. Brokers alsoappear to have made only verylimited inroads into the histori-cally established direct placementof large risks, even though somelarge brokers such as Marsh andAon have entered the retail marketin recent years.

ComparedtootherGCCcountries, themotoraccountinQatarconstitutesarelativelysmallproportionoftotalnon-lifebusiness,but it is theareawheremanyoftheforeigncompanies inthemarkethaveconcentratedtheirefforts

Table 1: Total insurance market premium income in Qatar in 2007

Category Life Non-lifePersonalaccident

and health

Totalmarket

Premium (Riyal m) 34.9 3,106.7 n/a 3,141.6

Premium ($m) 9.6 853.5 n/a 863.1

% of total market 1.1 98.9 n/a 100.0

Source: Axco Global StatisticsNote: The Ministry of Business and Trade has not published statistics for severalyears and QFC does not publish statistics regarding the activities of its members.

Table 2: Annual growth rates of non-life premium income in localcurrency in Qatar compared with nominal GDP growth and inflationrates over the last five to 2008

2004 2005 2006 2007 2008Premium growth (%) 31.8 33.3 140.5 (6.0) (21.7)Nominal GDP growth (%) 34.8 35.6 40.6 33.5 37.1Inflation rate (%) 6.8 8.8 11.8 13.8 15.1

Source: Axco Global Statistics

Table 3: Approximate market share (%) by line of business and bydistribution channel Qatar in 2010

Line of business Agents Brokers Direct salesNon-motor 2 8 90Motor 20 10 70

Source: Axco Global Statistics estimates based on market opinion

Graph 1: Non-life premium splitin Qatar in 2008

�

�+�+�+�+AMotor

Miscellaneous

Marine, aviation and transport

Property

Source: Axco Global Statistics based ondata from insurance industryassociations and regulatory bodies

activity and therefore do not giveprecise indications regarding theinsurance industry in isolation.Axco has, however, obtained somemarket statistical data for theperiod 2003 to 2008, sourced fromthe General Secretariat for Devel-opment Planning (GSDP) data.

There is another source of datarelated to the non-life market pro-vided by Swiss Re. The data in thissource is not split by class of busi-ness, however, and is therefore ofsomewhat limitedvalue.SwissRe’sdata does not completely accordwith that from the GSDP.

Reduction in premium volumeBoth sets of figures appear to indi-cate reductions in total marketnon-lifepremiumvolumeinrecentyears.Anecdotalevidencefromthemarket suggests in 2008 and 2009such reductions in volume werecaused primarily by the effects ofthe global economic crisis and con-

Graph 2: Top five insurers inQatar ranked by premiumincome in 2007 ($m)

Qatar Insurance Company

Qatar General

0 100 200 300 400 500

Al Khaleej

Doha

QIIC

Source: Axco Global Statistics based ondata from insurance industryassociations and regulatory bodies

9www.insuranceday.com| Wednesday 9 May 2012

SupervisionTo rationalise the supervision andcontrol of the financial industry,including insurance, in 2007 thegovernment appointed an interimboard to oversee the establishmentof an integrated financial supervi-sory body, to be called the FinancialRegulatoryAuthority(FRA),dealingwithbanking,insurance,assetman-agement, securities and all otherfinancial services. The plan was toco-ordinate by the end of 2008 theactivities of Bank of Qatar’s depart-ment of banking supervision andcustomer service unit, the QatarFinancial Markets Authority andthe QFC Regulatory Authority, but ithas been delayed for unknown rea-sons and at the time of preparationof this report it was uncertain whenitwillbecomeoperational.

Company changesAl Khaleej became a fully takafulcompany effective from January 1,2010, changing its name from AlKhaleej Insurance and ReinsuranceCompany to Al Khaleej TakafulInsurance and Reinsurance Com-pany.Establishedin1978,AlKhaleejwas the fourth-largest company inthe market in 2009, with gross pre-mium income of Riyal281.9m($77.4m). In 2010, it recorded grosscontributions of Riyal286.5m, ofwhich Riyal267.4m was non-lifebusiness(93%oftotalcontributions)andRiyal19.1mwastakafullifebusi-ness(7%oftotalcontributions).

Each national company has anumber of tied accounts derivedfrom its shareholders.

The figures in respect of AlKhaleej, Doha and QIIC includelife business since because thesecompanies operate in this class ofbusiness according to Islamicprinciples, they are permitted bythe MBT to write such business.Nevertheless, the other nationalcompanieswriteannualgroupper-sonal accident business coveringdeath by any cause as a non-lifeclass of business and this approachfrequently substitutes for grouplife business as such in the market.

It is curious the two largest com-panies – QIC and QCIRCO – sufferedthe largest reductions in gross pre-miumincomein2009and2010. It isthought this may have been par-tially the result of pressure onmajor energy risk premium ratesand the effects of the global eco-nomic crisis on the local economy.

Distribution channelsIt is difficult to arrive at accuratedistribution mix estimates becauseof the potential impact of the entryin the local market for the first time

of large international brokers. His-torically, brokers have never beena feature of the market and themajor firms have long been accus-tomed to writing most of theirmajor accounts on a direct basis.Anecdotal evidence clearly sug-gests this situation still pertains.

Competition is, however, un-questionably accelerating in a softmarketandthiswillinevitablybeginto give the brokers opportunities tobreak into the major risk retail mar-ketovertimealthoughevidencesug-gests the monopoly of the nationalcompanies over government busi-nessisunlikelytoendsoon.

The presence of internationalbrokers in the reinsurance place-ment of all major energy risks andsome major property risks hasalready advanced awareness ofrisk management in the marketand thus the degree of sophistica-tion with which the largest are han-dled and placed.

Bancassuranceisdefinitelygrow-ing and there is now direct involve-ment by banks in the market. Arecentexampleis theestablishmentof its own insurer by Doha Bank,launched in January 2008 with alicence from the QFC to write allclassesofgeneralbranchinsurance.

Direct handlingThe leading families in Qatar havea range of business interestsincluding insurance and it is usualfor theseaccounts tobeplacedwiththe in-house insurer on a more orless “tied” basis.

Otherwise, insurers use a directsales force operating from com-pany head offices in Doha. Thesesales agents are either remuner-atedbyamixtureofsalaryandcom-mission or salary and bonuses.Some of these may operate from abranch office but as Qatar is not alargecountry, therearenotmanyofthem. The branch offices whichexist are mainly used for servicingmotor insurance; some insurershave sales offices in the Traffic

Departmentsomotoristscanobtaincover on the spot when applyingfororrenewingvehicleregistration.

There are no telesales in Qatarandthissaleschannelisnotthoughttohavemuchofafutureaspersonalcontact is preferred. There iscomparatively little advertising ofinsurance products, although somenational companies sponsor sport-ingeventsforpublicitypurposes.

BancassuranceAll of the major national insurancecompaniesworkcloselywithbanksin respect of distribution. Forexample, Qatar Islamic Insuranceworks closely with Qatar Interna-tional Islamic Bank and providesmarine cargo coverage for exportsandimports financedbythebank.

Bancassurance has not histori-cally been a major distributioninsurance channel in Qataralthough when a bank is lendingmoney for car purchase it will usu-ally insist on insurance being takenout with one of the national compa-nies. Banks do not receive commis-sion on directed business but theinsurers debit them with premi-ums and the bank also charges anadditional fee to the client account.The Central Bank does not appearto impose specific controls as tohow banks deal with insurancesales and client debiting and BaselIII is not yet of relevance.

Other bank/insurer relation-ships involve the granting of auto-matic personal accident/naturaldeath cover to those taking out apersonal loan by way of credit lifemaster policies.

With the emergence of the QFC,providing as it does significantmarketing opportunities for a widerange of financial institutions andintermediaries, it is expected banc-assurance techniques will be morewidely deployed in the future.There certainly appears to beincreasing interest in bancassur-ance and even direct involvementby banks in the insurance market.

Apart from bank connections,insurers also have alliances withmain car dealerships. These canissue cover notes for compulsorymotor third-party liability insur-ance and can access directly insurerdatabasestoenterinsurancedetails.

Affinityschemesperseappeartobe rare, but the QIIC provides agroup personal accident schemecovering members of the WelfareAssociation of Indian BusinessAdministrators Qatar (Waibaq).

AgenciesInsurance agents are regulatedunder art 20 of Insurance DecreeNo 1 of 1966. There is no independ-ent agency system, although thereisnoprohibitionagainst it.Tobeanagent, the individual must be atleast 21 years of age and a Qatarinational. They must be of goodrepute and not an unrehabilitatedbankrupt.Thesameappliestopart-ners or directors of agency firms.

More than 400 Qatari and for-eign individuals have receivedauthorisation to operate within theQFC. The professions of these indi-viduals are not mentioned, but afew may act as insurance agents.

The foreign insurers are all spon-soredbylocalmerchantfamiliesthatwill support the company with theirown business and any introductionstheycanmake.

Insurance brokersRelevant to brokers, the InsuranceMediation Business Rules 2011were published in June 2011 by theQatar Financial Centre RegulatoryAuthority (QFRCA) and came intoeffect on July 1, 2011. The rulescover principally:l Definitions of insurance inter-

mediary/insurance mediation/captive insurance managers/client money;

l Prudential requirements relat-ing to financial resources/system controls for capital andasset requirements/minimumcapital and asset requirements/professional indemnity insur-ance/filing and deadlines forthe filing of prudential require-ment returns;

l Regulations relating to clientmoney, opening client moneybank accounts, client moneyexceptions, treatment of clientmoney and related fiduciaryduties and the segregation ofclient money;

l Performing calculations andreconciliations/treatment ofmaterial discrepancies;

l Client money distribution rules;l Collateral;l Client mandates/systems and

controlsrelatedtoclientmandate;l Record keeping/giving informa-

tion/safeguarding documentsand assets; and

l Transitional provisions.Historically, no licences have beenissued to insurance brokers andthey are not contemplated underthe 1966 insurance legislation.

The QFC now allows for authori-sation of brokers to operate in thelocal market, however, andrecently the MBT granted a licencetoQatarInternationalBroker,eventhough brokers are not contem-plated within Insurance Decree No1 of 1966, so brokers licensed by theMBT do not appear to be subject toany specific regulations.

Qatar International Broker, withinitial capital of Riyal600,000, islicensed to provide insurancebroking and risk-managementservices to the corporate sector inQatar. According to media reports,the broking firm was establishedfollowing demand for local special-ist insurance broking services bycompanies involved in complexand technical projects within bothprivate and government sectors.

It is headed by David Ezzard,chairmanofCarrollandPartners,aLloyd’s insurance broker. Thisdevelopment appears to haveraised some eyebrows in the localmarket, especially in respect ofbrokers that have had to subjectthemselves to the strict compliancecriteria of the QFC to obtain anoperating licence. The new entityhas an outsourcing contract withCarroll and Partners to support alltechnical and claims operations.

Therearestringentlicensingandcompliance requirements for bro-kers established in the QFC. Theserequirements are all consolidatedwith other financial intermediaryregulations and they are lengthyandcomplex.Therearenorequire-ments in QFC rules, however, forbrokers to have professionalindemnity insurance.n

This article is based on materialsupplied by Axco InsuranceInformation Services(www.axcoinfo.com). Axco is aleading insurance market researchorganisation and web publisherthat provides market reports andstatistics on more than 160countries. The field research teamsdeliver regular updates on allaspects of non-life (property/casualty) and life and benefitsmarkets including regulation andcompliance, market conditions,hazards, reinsurance, marketbackgrounds and businessdirectories.

Graph 3: Development of the life and non-life market for the period2004 to 2008 ($bn)

n Life n Non-life

1.0

0.8

0.6

0.4

0.2

0

Source: Axco Global Statistics based on data from insurance industry associationsand regulatory bodies

2004 2005 2006 2007 2008

Qatar non-life market

T here is a total of 21 directinsurance companiesand branches of foreigninsurers licensed in the

Qatar non-life insurance market.These include five national compa-nies and four branches of foreigncompanies licensed by the QatariMinistry of Business and Trade(MBT) under Insurance DecreeNo 1 of 1966; 11 companies andbranches of foreign companieslicensed by the Qatar FinancialCentre (QFC); and one captiveinsurance and reinsurance com-pany licensed by the MBT.

There were five national compa-nies in the market in 2011 licensedby the MBT. These were QatarInsurance Company (QIC), QatarGeneral Insurance and Reinsur-ance Company (QGIRCO), AlKhaleej Takaful Insurance andReinsurance Company, DohaInsurance Company and QatarIslamic Insurance Company (QIIC).

National companies licensed bythe MBT must be publicly quotedand fully owned by Qatari share-holders. The most significantpart of the insurance market – thegovernment-owned energy sector– is reserved for them. These risksare put out to competitive tender,normally every three years.

Energy businessThe Qatar non-life market notrelated to energy business is stillcomparatively small. The energyand petrochemical market makesup an estimated 50% of the wholemarket. It is this dominance ofenergy business that largelyaccounts for Qatar’s relatively ele-vated position in world marketrankings compared with countrieswith similar populations in theGulf Co-operation Council (GCC)states such as Bahrain and Kuwait.

The MBT has not publishedstatistics for several years and theQFC does not publish statisticsregarding the activities of its mem-bers. The Qatar Statistical Author-ity publishes some figures relatedtobanks, insurancecompaniesandother business activities (covering37 firms) but these are not split by

tinuing fierce local and interna-tional competition leading toreductions in premium rates in theprincipal classes of business. Inany event, such trends are in linewith other energy-dominatedinsurance markets in the region.

There is internal market activityin Qatar in respect of locallyplaced facultative reinsurance,especially as between the nationalcompanies (including facultativecessions by the latter to the localcaptive, Al Koot, owned by QatarPetroleum). It is not knownwhether the GSDP data takesaccount of such activity, whichcould result in double counting ofpremium from the same originalgross premium source.

Compared with other GCC states,the motor account (third-partyliability and casco) constituted arelatively small proportion of totalnon-life business (close to 20.6% in2008), but it is the area where manyof the foreign companies have con-centratedtheirefforts,sincetodatethey have been denied participa-tion in government-owned risks.

Thisremainsthecase inpractice,although whether it will do so forthe future is now a matter of someconjecture, given the dynamic andliberal economic policies beingpursued in the country in therecent years, one of the manifesta-tions of which has been the emer-gence of the QFC Authority. Sincethe latter permits authorised retailand wholesale carriers and bro-kers to operate within the localmarket, as well as in overseas mar-kets, some changes to the estab-lished status quo would appear tobe a possibility in the future.

In the meantime, however,according to anecdotal evidencethenationalcompaniescontinuetohave a monopoly of governmentbusiness and therefore of most ofthe largest accounts. Brokers alsoappear to have made only verylimited inroads into the histori-cally established direct placementof large risks, even though somelarge brokers such as Marsh andAon have entered the retail marketin recent years.

ComparedtootherGCCcountries, themotoraccountinQatarconstitutesarelativelysmallproportionoftotalnon-lifebusiness,but it is theareawheremanyoftheforeigncompanies inthemarkethaveconcentratedtheirefforts

Table 1: Total insurance market premium income in Qatar in 2007

Category Life Non-lifePersonalaccident

and health

Totalmarket

Premium (Riyal m) 34.9 3,106.7 n/a 3,141.6

Premium ($m) 9.6 853.5 n/a 863.1

% of total market 1.1 98.9 n/a 100.0

Source: Axco Global StatisticsNote: The Ministry of Business and Trade has not published statistics for severalyears and QFC does not publish statistics regarding the activities of its members.

Table 2: Annual growth rates of non-life premium income in localcurrency in Qatar compared with nominal GDP growth and inflationrates over the last five to 2008

2004 2005 2006 2007 2008Premium growth (%) 31.8 33.3 140.5 (6.0) (21.7)Nominal GDP growth (%) 34.8 35.6 40.6 33.5 37.1Inflation rate (%) 6.8 8.8 11.8 13.8 15.1

Source: Axco Global Statistics

Table 3: Approximate market share (%) by line of business and bydistribution channel Qatar in 2010

Line of business Agents Brokers Direct salesNon-motor 2 8 90Motor 20 10 70

Source: Axco Global Statistics estimates based on market opinion

Graph 1: Non-life premium splitin Qatar in 2008

�

�+�+�+�+AMotor

Miscellaneous

Marine, aviation and transport

Property

Source: Axco Global Statistics based ondata from insurance industryassociations and regulatory bodies

activity and therefore do not giveprecise indications regarding theinsurance industry in isolation.Axco has, however, obtained somemarket statistical data for theperiod 2003 to 2008, sourced fromthe General Secretariat for Devel-opment Planning (GSDP) data.

There is another source of datarelated to the non-life market pro-vided by Swiss Re. The data in thissource is not split by class of busi-ness, however, and is therefore ofsomewhat limitedvalue.SwissRe’sdata does not completely accordwith that from the GSDP.

Reduction in premium volumeBoth sets of figures appear to indi-cate reductions in total marketnon-lifepremiumvolumeinrecentyears.Anecdotalevidencefromthemarket suggests in 2008 and 2009such reductions in volume werecaused primarily by the effects ofthe global economic crisis and con-

Graph 2: Top five insurers inQatar ranked by premiumincome in 2007 ($m)

Qatar Insurance Company

Qatar General

0 100 200 300 400 500

Al Khaleej

Doha

QIIC

Source: Axco Global Statistics based ondata from insurance industryassociations and regulatory bodies

10

INSIGHTwww.insuranceday.com|Wednesday 9May 2012

Slightly more than one-third ofdeals in the second half of last yearwere in Europe and levels of M&Alook likely to remain high for anumber of reasons. Activity isundoubtedly being driven by theimminent arrival of Solvency II.This has increased focus on capitalrequirements and reviews byinsurers and reinsurers of theirbooks of business – both live andin run-off.

Any capital adjustments willact as a catalyst for a range ofcorporate activity; from re-organisationsandcapitalraisingtosales and purchases. Buyerswill hope to increase returns byapplying more effective capital-managementtechniquestocompa-nies that may have been operatingrelatively inefficient structures,while sellers will be looking tooffload businesses where thecapital requirements do not justifythe returns.

Europe Activity is undoubtedlybeing driven by theimminent arrival ofSolvency II. This hasincreased focus oncapital requirementsand reviews by insurers and reinsurersof their books ofbusiness – both live and in run-off

While activity in the emergingmarkets was at a lower level in thelast six months of 2011 comparedwith the first half of the year, thereremains a strong consolidationtrend as the markets reach newlevels of maturity. Markets atearlier stages of developmenttended to see numerous start-upsin the insurance sector, not all ofwhichwillhavethecriticalmasstosurvive going forward. In thesemarkets, therefore, a wave ofmerger activity is predicted to cre-ate fewer, stronger businesses.

In Latin America, for example,we are seeing a new generation ofinsurers with regional and globalambitions. Companies confront-ing growth challenges, generatedby pricing pressures and regula-tory reform, are likely to focuson their core strengths, divestingcertain assets or markets that donot fit those strengths whileadopting more aggressive M&Astrategies as they seek access tonew markets.

Last year saw the arrival of aLatin American insurer on to alarger stage with Colombia’sGrupo de Inversiones Sur-americana’s acquisition of ING

ous year, representing 23% of allglobal M&A activity in the period.Although the pace of activityslowed in the second half, theAsia-Pacific region posted a year-

on-year increase of closeto 50%, with China

leading the way.China will

remain a top pri-ority for insur-ers, both insideand outside the

region, looking forgrowth opportuni-

ties – either enteringthe market for the first

time, increasing their existingmarket share or improving theirprofitability.

Emergingmarkets

Group’s Latin American insuranceunit for $3.9bn. At the same time,players from established marketsare looking for opportunities in theregion with Spain’s ZS InsuranceAmerica SL acquiringSantander Seguros SAof Brazil for $1.6 bn.

Unlike theAmericas andEurope, Asia-Pacific was rela-tively unscathedby the impact ofthe global reces-sion, so it was perhapsunsurprising to see asharp upturn in insurance M&A inthe first half of 2011, with moredeals than the whole of the previ-

Whether they are domestic orinternational players, right acrosstheglobewearehearingourclientssay the same thing: regulators and

Conclusioncustomers are looking for strengthand stability in the risk transferbusiness. This is sustaining theappetite for all types of trans-

actions – from fully fledged merg-ers and acquisitions to moretactically driven deals to sell offportfolios or renewal rights.n

Graph 2: Volume of merger and acquisition deals by region in 2011

300

250

200

150

100

50

0Mena AfricaAsia-PacificEuropeAmericas

Source: Thomson Reuters

$3.9bnPrice Grupo deInversionesSuramericanapaid for ING’sLatAm unit

Map: Asia-Pacific region M&A activity in 2011

23%Asia-Pacificshare of total2011M&Aactivity

50%Asia-Pacificyear-on-yeargrowth inM&A

Global insurancemarket sees sustainedM&A activity

Last year saw a surge inmergers and acquisitions(M&A) in the global insur-ance industry, with the

deal flow reaching its highest levelfortwoyears.Afteradecliningtrendthrough 2009 and 2010, there was asharpuptickinactivityinthefirstsixmonths of last year, followed by asustained level of transaction activ-ityinthesecondofhalfoftheyear.

According to data supplied byThomson Reuters, there were 546dealsoverall in2011comparedwith521 in 2010. This was despite contin-uingbroadereconomicuncertainty,especially around the ongoing debtcrisis in theeurozoneand thedown-gradeoftheUSbyStandard&Poor’s.

So, what has changed? Certainly,rising financial asset values havegiven boards greater confidenceandbalance-sheetflexibility.Therehas also been more readily availa-ble finance, including leverageddeals, which are attracting privateequity firms, although some areconcluding deals with co-equityinvestors. The final element is buy-ers and sellers are more closelyalignedonpriceexpectations.

There is also strong evidencethat – almost irrespective of thegeography in which they are oper-ating – there is a growing under-standing insurers need to buildscale to strengthen their balancesheets and sustain their margins.

Investors’appetitehasimprovedastheyseekopportunities fordealsaroundtheworld

AndrewHolderness and Gary Thorpe,global corporate insurance team partnersClyde & Co

Graph 1: Volume of merger and acquisition deals globally, 2009 to 2011

300

290

280

270

260

250

240

230

2201H 2009 2H 2009 1H 2010 2H 2010 1H 2011 2H 2011

Source: Thomson Reuters

The US dominated the M&A pic-ture, accounting for almost halfthe deals done. This is backed upby figures released in a recentrenewal report by reinsurancebroker Guy Carpenter, whichreveal M&A deals in the USand Bermudian non-life sectorpicked up last year in terms oftotal dollar value to $12.8bn from$7.3bn in 2010.

In the US, the much-predictedhardening of insurance pricesseems to be getting under way,climbing at the fastest rate innearly four years, with the marketexpecting this trend to continue as

insurers impose greater under-writing discipline to compensatefor weaker investment returns. Amonthly review of medium-sizedand large-cap US client data byMarsh early in 2011 has shown a5.3% average uplift in commercialproperty insurance rates in Janu-ary from a year ago. If the markethardening is sustained, valuationlevels for insurers should increaseand this, combined with a pro-longed period of reserve releasescoming to an end, could act as acatalyst for more M&A trans-actions. There is also pressurebuilding on some private equityinvestors to realise earlier invest-ments in insurance operations.

US

Graph 3: US and Bermudian non-life M&A deals

2010 2011

5.3%Average uplift in commercial propertyinsurance rates, Jan 2011 versus 2010

$7.3bn

$12.8bn

There is still keen interest in the Lloyd’smarket, with almost all the small-cap quoted vehicles seeing some inter-est – with a number of possible suitorsbeing mooted. In recent weeks we haveseen a number of high-profile trans-actions. US insurer CNA Financial hasagreed a £143m ($230.7m) deal to buyBermuda-based insurer Hardy Under-writing,whileprivatelyownedspecialtyinsurer Canopius will buy Omega Insur-ance for £163.6m. These deals underlinethe enduring strength of the Lloyd’smarket and its attraction to both estab-lishedinsurersandexternalinvestors.

As companies look to build scale of

operations in the market and diversifytheir portfolio of business, the attrac-tion of having a Lloyd’s platform isclear. However, with ongoing excesscapital and a soft market, the Lloyd’sfranchise board is setting tough crite-ria for new entrants and start-ups havebeen hard to achieve. This means thoseaspiring to underwrite at Lloyd’s areleft with acquisition as the most likelyroute in.

However, the number of acquisitiontargets at Lloyd’s is reducing – there arenow only five listed Lloyd’s managingagencies remaining – so other inter-ested parties are starting to look atalternatives such as strategic invest-mentsasanentrypointintothemarket.

Lloyd’s

11

INSIGHTwww.insuranceday.com| Wednesday 9 May 2012

Slightly more than one-third ofdeals in the second half of last yearwere in Europe and levels of M&Alook likely to remain high for anumber of reasons. Activity isundoubtedly being driven by theimminent arrival of Solvency II.This has increased focus on capitalrequirements and reviews byinsurers and reinsurers of theirbooks of business – both live andin run-off.

Any capital adjustments willact as a catalyst for a range ofcorporate activity; from re-organisationsandcapitalraisingtosales and purchases. Buyerswill hope to increase returns byapplying more effective capital-managementtechniquestocompa-nies that may have been operatingrelatively inefficient structures,while sellers will be looking tooffload businesses where thecapital requirements do not justifythe returns.

Europe Activity is undoubtedlybeing driven by theimminent arrival ofSolvency II. This hasincreased focus oncapital requirementsand reviews by insurers and reinsurersof their books ofbusiness – both live and in run-off

While activity in the emergingmarkets was at a lower level in thelast six months of 2011 comparedwith the first half of the year, thereremains a strong consolidationtrend as the markets reach newlevels of maturity. Markets atearlier stages of developmenttended to see numerous start-upsin the insurance sector, not all ofwhichwillhavethecriticalmasstosurvive going forward. In thesemarkets, therefore, a wave ofmerger activity is predicted to cre-ate fewer, stronger businesses.

In Latin America, for example,we are seeing a new generation ofinsurers with regional and globalambitions. Companies confront-ing growth challenges, generatedby pricing pressures and regula-tory reform, are likely to focuson their core strengths, divestingcertain assets or markets that donot fit those strengths whileadopting more aggressive M&Astrategies as they seek access tonew markets.

Last year saw the arrival of aLatin American insurer on to alarger stage with Colombia’sGrupo de Inversiones Sur-americana’s acquisition of ING

ous year, representing 23% of allglobal M&A activity in the period.Although the pace of activityslowed in the second half, theAsia-Pacific region posted a year-

on-year increase of closeto 50%, with China

leading the way.China will

remain a top pri-ority for insur-ers, both insideand outside the

region, looking forgrowth opportuni-

ties – either enteringthe market for the first

time, increasing their existingmarket share or improving theirprofitability.

Emergingmarkets

Group’s Latin American insuranceunit for $3.9bn. At the same time,players from established marketsare looking for opportunities in theregion with Spain’s ZS InsuranceAmerica SL acquiringSantander Seguros SAof Brazil for $1.6 bn.

Unlike theAmericas andEurope, Asia-Pacific was rela-tively unscathedby the impact ofthe global reces-sion, so it was perhapsunsurprising to see asharp upturn in insurance M&A inthe first half of 2011, with moredeals than the whole of the previ-

Whether they are domestic orinternational players, right acrosstheglobewearehearingourclientssay the same thing: regulators and

Conclusioncustomers are looking for strengthand stability in the risk transferbusiness. This is sustaining theappetite for all types of trans-

actions – from fully fledged merg-ers and acquisitions to moretactically driven deals to sell offportfolios or renewal rights.n

Graph 2: Volume of merger and acquisition deals by region in 2011

300

250

200

150

100

50

0Mena AfricaAsia-PacificEuropeAmericas

Source: Thomson Reuters

$3.9bnPrice Grupo deInversionesSuramericanapaid for ING’sLatAm unit

Map: Asia-Pacific region M&A activity in 2011

23%Asia-Pacificshare of total2011M&Aactivity

50%Asia-Pacificyear-on-yeargrowth inM&A

Global insurancemarket sees sustainedM&A activity

Last year saw a surge inmergers and acquisitions(M&A) in the global insur-ance industry, with the

deal flow reaching its highest levelfortwoyears.Afteradecliningtrendthrough 2009 and 2010, there was asharpuptickinactivityinthefirstsixmonths of last year, followed by asustained level of transaction activ-ityinthesecondofhalfoftheyear.

According to data supplied byThomson Reuters, there were 546dealsoverall in2011comparedwith521 in 2010. This was despite contin-uingbroadereconomicuncertainty,especially around the ongoing debtcrisis in theeurozoneand thedown-gradeoftheUSbyStandard&Poor’s.

So, what has changed? Certainly,rising financial asset values havegiven boards greater confidenceandbalance-sheetflexibility.Therehas also been more readily availa-ble finance, including leverageddeals, which are attracting privateequity firms, although some areconcluding deals with co-equityinvestors. The final element is buy-ers and sellers are more closelyalignedonpriceexpectations.

There is also strong evidencethat – almost irrespective of thegeography in which they are oper-ating – there is a growing under-standing insurers need to buildscale to strengthen their balancesheets and sustain their margins.

Investors’appetitehasimprovedastheyseekopportunities fordealsaroundtheworld

AndrewHolderness and Gary Thorpe,global corporate insurance team partnersClyde & Co

Graph 1: Volume of merger and acquisition deals globally, 2009 to 2011

300

290

280

270

260

250

240

230

2201H 2009 2H 2009 1H 2010 2H 2010 1H 2011 2H 2011

Source: Thomson Reuters

The US dominated the M&A pic-ture, accounting for almost halfthe deals done. This is backed upby figures released in a recentrenewal report by reinsurancebroker Guy Carpenter, whichreveal M&A deals in the USand Bermudian non-life sectorpicked up last year in terms oftotal dollar value to $12.8bn from$7.3bn in 2010.

In the US, the much-predictedhardening of insurance pricesseems to be getting under way,climbing at the fastest rate innearly four years, with the marketexpecting this trend to continue as

insurers impose greater under-writing discipline to compensatefor weaker investment returns. Amonthly review of medium-sizedand large-cap US client data byMarsh early in 2011 has shown a5.3% average uplift in commercialproperty insurance rates in Janu-ary from a year ago. If the markethardening is sustained, valuationlevels for insurers should increaseand this, combined with a pro-longed period of reserve releasescoming to an end, could act as acatalyst for more M&A trans-actions. There is also pressurebuilding on some private equityinvestors to realise earlier invest-ments in insurance operations.

US

Graph 3: US and Bermudian non-life M&A deals

2010 2011

5.3%Average uplift in commercial propertyinsurance rates, Jan 2011 versus 2010

$7.3bn

$12.8bn

There is still keen interest in the Lloyd’smarket, with almost all the small-cap quoted vehicles seeing some inter-est – with a number of possible suitorsbeing mooted. In recent weeks we haveseen a number of high-profile trans-actions. US insurer CNA Financial hasagreed a £143m ($230.7m) deal to buyBermuda-based insurer Hardy Under-writing,whileprivatelyownedspecialtyinsurer Canopius will buy Omega Insur-ance for £163.6m. These deals underlinethe enduring strength of the Lloyd’smarket and its attraction to both estab-lishedinsurersandexternalinvestors.

As companies look to build scale of

operations in the market and diversifytheir portfolio of business, the attrac-tion of having a Lloyd’s platform isclear. However, with ongoing excesscapital and a soft market, the Lloyd’sfranchise board is setting tough crite-ria for new entrants and start-ups havebeen hard to achieve. This means thoseaspiring to underwrite at Lloyd’s areleft with acquisition as the most likelyroute in.

However, the number of acquisitiontargets at Lloyd’s is reducing – there arenow only five listed Lloyd’s managingagencies remaining – so other inter-ested parties are starting to look atalternatives such as strategic invest-mentsasanentrypointintothemarket.

Lloyd’s

Insurance/Reinsurance Initiative ofthe Year Award open for entries

T he reinsurance sector’strack record in produc-ing initiatives to improveefficiency, tackle a spe-

cific problem and generallyimprove the experience of thecustomer is long and impressive.

Innovation has often been thehallmark of the reinsurance sectorand it is especially apparent attimes of economic strain. There-fore, this year, the Worldwide Re-insurance Awards judging panel,which comprises industry chiefexecutives and senior manage-ment, is expecting particularlystrong contenders in this category,which are likely to come fromdiverse backgrounds.

Last year’s winner, Verisk Analyt-ics, was recognised for its catastro-phe index, which providesindustry-wideinsuredpropertylossestimates by county and lines ofbusiness, with the judging panelconcluding it was flexible enough toadapt to individual companies’ par-ticular risk protection needs androbustenoughtoprovideagoodesti-mate of actual damage across perils,countiesandlinesofbusiness.

However,previouswinnersinthiscategory have also been recognisedfor developing new products, use ofcapital markets, capital-raising initi-ativesandindustrylobbying.

John Winter, chief executive ofthe sponsor of this year’s award,Ruxley Ventures, says: “From regu-lation to natural catastrophes,reinsurers have formed an essen-tial component in the insuranceindustry. They have an impressivetrack record of innovation toaccommodate both expected andunexpected market change. Inrecent times this has been moreimportant than ever.

“The insurance community isproud of those whose technicalexcellence and entrepreneurialspirit has helped to improve ourindustry’s image and efficiency.Ruxley is delighted to support thisrecognitionofindustryexcellence.”

With competition expected to befierce, interested parties or nomi-nators should allow themselvessufficient time to create a compel-ling awards entry. It could make allthe difference to your company’ssuccess in a category in whichemerging triumphant will trulymark you out as a leading industryinnovator among your peers, notforgetting your competitors.

This year’s award entry deadlineis Friday May 18. Fortunately enter-ing the Worldwide ReinsuranceAwardshasneverbeeneasier.

Using the criteria for the Re/Insurance Initiative of the Year,explain in 500 words or fewer whyyour company should win a World-wide Reinsurance Award.

Then complete the online entryform and submit your entry atwww.reinsuranceawards.com.

Supplementary information willbe accepted if it supports pointsmade in the entry.

The 19th Worldwide Reinsur-ance Awards ceremony will onceagain be held at the prestigious TheDorchester hotel in London, on adate that is already marked inmost insurance and reinsuranceindustry practitioners’ calendars– September 5, the Wednesdaybefore the start of the Monte CarloRendez-Vous.

For sponsorship opportunitiesand table sales contact +44 (0)207017 4027. For further informationon the Re/Insurance Initiative ofthe Year category or any otherawards-related matters contact+44 (0)20 7017 5173.n

EntriesarenowbeingsoughtfortheRe/InsuranceInitiativeof theYearcategory,whichwillrecognisetheproject thathasgeneratedthemostpromisingchangetoasignificantareaofbusinessat thisyear’sWorldwideReinsuranceAwards

Greg DobieManaging editor

Criteria for the award

This year’s winner will shine by:l Showing innovation through a particular transaction, deal or

partnership;l Education or development of a new market or product area; andl Examples could include developing a new product, use of capital

markets, a capital-raising initiative or industry lobbying

Roll of honour2011 Verisk Analytics2010 Guy Carpenter &

Company Cascat2009 Solvency II2008 The Caribbean Catastrophe

Risk Insurance Facility2007 The National Indemnity

Reinsurance Agreement,Equitas

Ruxley Ventures was establishedin December 2001 and specialisesin acquiring and running off US asbestos, pollution and health hazard(APH) claims. Ruxley’s expertise and business model allows the transferof APH portfolios from both active insurers and run-off entities.

Since 2001, Ruxley has completed transactions with some of Europe’sbiggest insurance names. Ruxley Ventures owns two authorised non-lifeinsurance companies: Aviation & General Insurance Company and CityGeneral Insurance Company.

www.ruxleyventures.com

About the sponsor

“The insurance community is proud of thosewhose technical excellence and entrepreneurialspirit has helped to improve our industry’s imageand efficiency”

John WinterRuxley VenturesVeriskAnalyticspicksupthe

Initiativeof theYearAwardatthe2011event