Issue 58
May 2016
In this Issue
  • Changes at Lloyd's concurrent with Brexit vote
  • Analysts question increased expenses from mergers and new LOBs
  • Absence of investment income exposes claim and expense costs
  • Insuring emerging markets the old fashioned way with improved analytics
  • Roger's concern about the "Internet of Things"
  • Quick Bytes: Berkshire annual meeting, new Gen Re CEO, "reinsurers with beards", Ft. McMurray fire, Tom Bolt's former role, US NFIP and epidemic of farmer suicides in India as drought worsens

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Dear Colleague, 
One of the central tenets of insurance is that it helps those who buy it to better manage risk. As we look at the world today there seems to be increased risk in every direction.

This month we saw rising indications of uncertainty in Britain and the US.  Uncertainty extends to One Lime Street as well as John Nelson, Tom Bolt and Sean McGovern have either left Lloyd's or announced plans to do so.  

Over the past months we've reported on insurer mergers and new lines of business as insurers try to expand their books. Those changes come with a price and there were several instances this month of Q1 earnings calls that saw analysts questioning increased expenses.

As investment returns are low and premium prices are declining more eyes are turning to emerging markets as a solution for growth. Improved data analytics will help underwrite those new risks and we took a look at likely distribution models to access that new business.

The Berkshire Hathaway annual meeting in Omaha attracted over 1 million viewers who tuned in to watch Warren Buffett and Charlie Munger answer questions for nearly seven hours.
Our regular Roger Crombie column is here too. Roger has made disturbing discoveries regarding the "Internet of Things" that have caused us to take a closer look at our household appliances.  We may start treating them as enemies now!
As always if you have any questions or comments about CATEX Reports, or want more information about CATEX or its products, please feel free to contact me.
Thank you very much.
Stephanie A. Fucetola
Senior Vice President/CATEX

Uncertainty in a time of increasing global connectedness

We always read about "certainty and continuity" as required ingredients of a trusted insurance, reinsurance or broker partner.  These watchwords have been applied by defenders of traditional reinsurers when talking about new forms of alternative capital protection.  The classic argument to cedents is something along the lines of "we've been paying claims for decades, you've dealt with us for decades and do you really want to take additional risk by reinsuring with an "unproven" entity?"

Fair questions, to be sure, but if the answers to them always led the responder back to the tried and true there would have been no innovation or no change and the alternative capital model would be just a dream. Change, as we have seen, is inevitable and it's happening at an increasingly faster rate. 

"Certainty and continuity" are important on the regulatory side too. A long time ago, in 1981, then US Commerce Secretary Malcolm Baldrige said that if there is one thing that could be expected from the new Reagan Administration it would be "consistency of response --we are pro-business."  It was 6 months after Ronald Reagan's inauguration and the business community was looking to find its bearings with the new Administration after four years of the Carter Administration.

We've never forgotten Baldridge's words. Regardless of your personal political views if you are operating a business you need to have certainty about what regulators expect. We can't help but think that we've rarely seen the potential "uncertainty" level as high as it is right now.

The impending UK referendum to leave the EU, the US November elections and the recent changes of leadership at Lloyd's would each on its own give rise to uncertainty. Collectively, with all three occurring simultaneously, the risk of uncertainty rises significantly.

Let's start with Lloyd's first. In just a few months we've seen the departure of the Lloyd's Performance Management Director, Tom Bolt; the announced pending departure of Lloyd's Chairman John Nelson and the news that Chief Risk Officer and General Counsel Sean McGovern will leave Lloyd's in July.  The so-called "quartet" of managers who have operated Lloyd's over the past few years will be reduced to one --Inga Beale the current CEO.

We have no doubt that the three roles will be filled by capable people--just as we have no doubt that Lloyd's will continue to carry on successfully in the future.  But you know what they say about the (re)insurance business --it's a relationship business --and new relationships will need to be developed with new people.  In a "normal" time it would just be marked down to coincidence that three of the top Lloyd's executives left at roughly the same time.

These aren't normal times though.  McGovern will leave in July only a few short weeks after the UK Brexit vote.  McGovern was in many ways the point person for the corporation's (seemingly endless) negotiations with Europe on Solvency II and bears the credit, as much as anyone, for the acceptance of the Lloyd's financial solvency scheme by Brussels.  If Britain does vote to leave the EU someone at Lloyd's will need to start visiting Brussels or worse, the capitals of 27 other member states to negotiate bi-lateral agreements with each government.

We hope for the sake of McGovern's replacement that the UK referendum is a vote to remain in the EU. If not Sean's Sisyphean, yet ultimately successful, struggle with S2 will seem like a mere warm-up to the task of maintaining Lloyd's role on the continent.

Perhaps more aware of this than anyone is Lloyd's Chairman Nelson who of late has become increasingly strident in his attacks on advocates of a Brexit.  Nelson has confirmed that he intends to leave Lloyd's in the first quarter of 2017 some 6+ months after the Brexit referendum.  If the June 23rd vote successfully forces an exit from the EU it's hard to conceive of Nelson doing anything in his remaining time at Lloyd's other than attempting to reestablish stability.  Presumably, this is not the role he wants to play in his twilight months after five years at the helm.

Our sense of Nelson from afar has been that he is a perfect gentleman but that he's not afraid to express his opinion. That outspokenness has served Lloyd's well over the past five years and 1 Lime Street has had no stronger advocate.  Thus we didn't take particular note when he said on April 28th to those in the "Leave" campaign that it was "a complete fantasy that it should be possible for the UK to negotiate bilateral agreements with other countries to replace the deals that we have."

Two weeks later, and a day before Sean McGovern's departure was announced, he seemed to become even more forceful when an article in the Insurance Insider quoted him as labelling politicians campaigning for the UK to leave the European Union as "irresponsible".  

He took it a step further by adding that it was unrealistic to expect the UK to be able to put itself in the same position as the countries already under an EU bilateral agreement when negotiating trade deals. "Many of these assertions are being made by those who have little up-to-date working knowledge of trade relationships and agreements - something which our team at Lloyd's are involved in globally, every day of the week," he said. Nelson added that no regulatory "nirvana" would be achieved by exiting the EU, as there would be no less regulation.

Less than 24 hours later it was announced that McGovern, who would arguably be the Lloyd's executive doing much of the heavy lifting negotiating those "non-nirvana" relationships, was leaving for a position at XL Catlin.

Nelson, Lloyd's and just about every other risk industry figure in London have been emphatic over the past months about the potential chaos which could be caused by a British exit from the EU.  Continental executives, mindful of being seen as intruding into a purely British debate, have largely remained on the sidelines although Scor's Denis Kessler has said that a UK exit would be a "disaster" for both Europe and Britain. 

One senses if leaders of other carriers in Europe were willing to speak out publicly that they would endorse Kessler's position too.  

As if uncertainty about not only a change at the top at Lloyd's, but what the effects of a Brexit would be, were not enough to keep insurance executives awake at night, we also have the US election in less than six months

We know of course that in the US insurance is largely regulated by the states and not the federal government. However the recent success of Donald Trump, which seems to be built upon an American retreat from global affairs, has business people worried.  

How is it possible, one wonders, that a country with the world's largest economy, with global interconnectivity underpinning its every move, has expressed support for someone advocating an isolationist stance and reducing connections with the rest of the world?  Is this an era of sailing ships? Virtually every transaction completed on a daily basis somehow involves a non-American supplier. Possibly this fact is not yet understood by the public although most in business are well aware of it. In fact, it's exactly this kind of globalized supply chain that has provided the economic benefits Americans enjoy.

We can't foresee what the effects of an American economic retrenchment may be but we did note that the insured losses from the 7.8 earthquake that struck Ecuador are thought to be as high as $850 million.  However, the effects on the international insurance market will be minimal as 2015 Ecuadorean law forced insurance companies in Ecuador to lower their level of reinsurance with foreign reinsurers from 50% to 5%. The idea was to help jump start the Ecuadorean reinsurance market.

We're not sure whether Ecuadorean President Rafael Correa or Donald Trump would enjoy being compared with each other. We did note in the last newsletter that the insured loss from a severe San Francisco earthquake could be nearly $700 billion. Imagine if US reinsurers alone were required to absorb 95% of that total?

Uncertainty indeed.

Analysts now grumble as the cost of mergers come in

We noticed unusual comments from analysts about expenses at reinsurers.  We noticed it first when stock analysts gave XL Catlin CEO Mike McGavick and Everest CEO Dominic Addesso pushback about higher expense costs during Q1 analyst calls.

In the case of XL Catlin the increased expenses were discussed in the context of ongoing costs associated with the acquisition of Catlin.  Analysts complained about the insurer's annualized RoE of 3.5% as evidenced by first quarter results.  McGavick noted the terrible pricing environment but maintained that he believed XL Catlin could achieve a RoE of at least 10% in the foreseeable future.  

One analyst then postulated that the XL Catlin combined ratio, since the Catlin acquisition, was 93%, but if a "normalized CAT claim basis" was factored in then the combined ratio would increase to about 95%.

It's hard to figure this but it may make sense. The analyst said that to obtain the promised synergy from the Catlin acquisition, after compensating for the abnormally low CAT losses, XL Catlin would need a combined ratio of near 90% to reach a double digit RoE.

McGavick noted that the insurer had closed down non-performing operations and that the firm was "well on track" to achieve its targeted expense reductions.

We understand that when two big insurers merge there will be a certain level of redundancies as well as new revenue opportunities.  When we initially read the article we wrote it off as analyst complaints. An outlier. After all, when all was said and done, the criticism seemed to be that if you backed out the underwriting result (by adding a "normal" load of CAT claims) then the expenses were too high.  What is an insurer other than an underwriting operation--why would you back out its results?

Then we saw it again when Everest Re's Addesso was questioned by analysts about a 1.2% increase in Everest's underwriting expenses.  Everest has been rapidly building out its insurance business in a rush to move down the food chain to get close to the original premium. The question was asked if the increased expense was related to building out that business.

Addesso did attribute the increased expense as coming from the gap between earned premium and investments made in the insurance segment.  That wasn't enough for the analysts who wanted to know if more expense increases were coming as Everest continued to build out its insurance operation.  All sorts of questions came next, including asking whether the new insurance hires at the bolstered operation had brought business with them to Everest.

Addesso noted that while he could give few details about any business underwriters had brought with them but in any event those results would likely not reflect in immediate premium jumps because of the depressed rate environment.  Translation being that Everest would look each risk over before determining whether it could insure it. He said that he expected that the expense increase would normalize as time went on and the integrations ran their course.

It wasn't over, unfortunately, as the next question point blank asked why should anyone expect an improvement in the expense ratio over time as the new hires had been brought on permanently?  Addesso responded that the increased expense ratio was expected and that Everest would begin to see the premium earned "take hold".

Then we saw this article in Artemis, "Realistic reinsurance RoE's down to 3.4%, expenses up: Willis Re". Willis notes that RoE's for reinsurers continue to diminish.  Why? We know two of the big reasons --continued pressure on rates and decreased investment income --but Willis identifies increased expense levels as becoming particularly costly.  Willis noted that in the set of reinsurers it tracks expense ratios since 2007 have increased by 4% with 2015 alone counting for a full 25% of that increase.

Clearly, after reading what both McGavick and Addesso endured in their analyst calls, the Willis information suddenly was even more important.

Certainly no company is voluntarily increasing its expenses in a time of interest rate famine and premium decreases? It's precisely what some companies are doing and (or but, depending on you look at it) they are doing it for the right reasons.

Willis' John Cavanagh said "Given the current climate, the broadening of reinsurer business models is providing a successful strategy for many and increasing relevance to clients, despite the impact on expense ratios."  Per Cavanagh, the increased costs associated with mergers, acquisitions, development of new insurance operations --all the things being urged upon reinsurers by analysts (among others), are what is driving up the expense ratios.  How could a reinsurer fail to sustain an expense increase if it's just added another company or a new group of underwriters? It would seem to be an inevitable consequence and a result that would be understood by the same analysts who applauded the expansionary business moves in the first place.

We wondered about the biggest deal of all, the acquisition of Chubb by Ace for $29.5 billion. Admittedly the merger was only finalized earlier this year but in its Q1 call the new company said that expenses associated with the merger could be as high as $750 million by 2018, compared with the original estimate of $650 million. However its CEO Evan Greenberg was treated comparatively gently during his own Q1 analyst call.

Greenberg was asked about the progress of the integration and noted that although it had impacted Q1 results he could see those effects beginning to recede.  He said that the integration process might have affected new business opportunities in January and February but that momentum has been building in March and April.

The obvious fact is that you don't get something for nothing.  Observers can't clamor for insurers and reinsurers to become bigger, develop more resources, better diversify their businesses and expand their client services only to criticize them when they incur expenses doing precisely that.  In fact there's another level to this game that clearly, McGavick, Addesso and Greenberg are well aware of and that's to avoid the temptation to counter those increased expenses (and criticism) with increased underwriting during this time of perilously low premium prices.  

We've usually surmised that the import of underwriting discipline is most dramatic on insurers that don't merge as the fear is that they might lower underwriting standards simply to generate premium as they struggle to compete against suddenly larger rivals.  This may be a valid concern but it's just as valid a concern for companies that are incurring increased expenses as they work as quickly as possible to integrate companies or implement new business units.  An increase in expenses can be much more easily justified if it's accompanied with a dramatic increase in premium revenue.

Greenberg alluded to this temptation when asked during his own analyst call why he didn't see the pullbacks of several large competing insurers from the North American commercial market as a big opportunity for Chubb.  Greenberg said that it was important to maintain underwriting discipline. He said "It's a double-edged sword and you have got to be careful. On one hand when there's a wounded animal loose, be careful. Stay out of the way and don't try to corner it. On the other hand Chubb represents a very attractive market, an alternative for large accounts seeking a deep balance sheet."  He said market prices were frequently below levels he would consider reasonable but that a demand for stability had drawn customers towards Chubb.

The "wounded animals" presumably are insurers who are compromising underwriting standards to take in premium.  Greenberg isn't going to get in the way of these carriers charging lower than needed premiums but Chubb certainly isn't going to join them in doing it. Clearly too, McGavick and Addesso are not planning on joining any "wounded animals" in matching low premiums even if an increased GWP flow would help offset expenses that have increased from new business lines and mergers.  

That underwriting discipline isn't only for underwriters. It extends to the CEOs being willing to endure rocky analyst calls without responding "You want us to write business at a substandard rate to jump up revenue to offset the increased costs that we warned you were coming as the result of the merger or new business lines?"

Presumably they are too polite to say such a thing although Greenberg's "wounded animal" example certainly got the point across quite effectively.  They're not going to do it and hats off to them.  Better to take a few lumps from grumpy analysts because costs of a multi-billion dollar integration aren't decreasing as quickly as projected than to open the underwriting barn doors wide.  

We read articles about why any company would ever want to be a reinsurer in this climate. We can understand that question but have long wondered why anyone would want to run a reinsurer in this climate.  It seems to be a pretty thankless task, doesn't it?  

The lack of investment income may expose some reinsurers

At the Insurance InsiderScope event in New York on May 10 Axis CEO Albert Benchimol talked about the struggle of insurance and reinsurance for relevancy and the view held by some people that the industry needs to be replaced.  He said that the sector "appears to be becoming less relevant to the global economy."

He said that the value proposition of insurance is viewed as wanting, "Notwithstanding the fact that we return to our clients about 60% of their premiums in claims payments, we still struggle with profitability given the high cost structure of our industry".

That quote shouldn't have been a surprise to any listener.  Certainly a claim ratio of 60% isn't a news bulletin but somehow the way Benchimol presented it conjured up an image of a consumer purchase resulting in an automatic rebate of 60 percent.

We then remembered that only two weeks earlier we'd heard Lloyd's Tom Bolt at his farewell reception observe that an "industry that incurs expenses equal to 40% of its gross to simply deliver its product has a formula that isn't sustainable". 

If 40% of the premium is eaten up in expenses and 60% of the premium is used to pay claims you can see why the lack of meaningful investment income is causing such trauma. The resulting pressure on reducing that 60% claim figure means even more selective underwriting. But when that expense number creeps upward, especially in this environment, it takes strong leadership to not overreact and stay the course.

As A.M Best noted this month, not all reinsurers will survive this cycle

Insuring the emerging markets

Two trends captured our attention this month.  The first had to do with emerging markets. There seemed to be more than the usual number of articles about the importance of emerging markets to the future of the insurance and reinsurance industry. Swiss Re in fact indicated that it expects about half of its revenue growth in the next ten years to come from emerging markets.

The second trend that we spotted was that data analytics has indeed broken into the commercial insurance market in a big way. How big?  

Try this for an answer from Simon Morgan at Hiscox who said "Models have levelled that playing field. It is harder for an underwriter to differentiate himself from people with no experience." Morgan said that now, with the advent of sophisticated data analytics, everyone involved in the transaction from customers to brokers "also know how to price the business. Pricing is almost see-through."

Think of this in the context of revamping the way insurance is currently funded. Morgan said that the "technology and tools have allowed brokers and fund managers to package up pools of insurance and make it look like any other financial product. It takes away the air of mystery from taking an insurance bet."

If you combine the import of emerging markets with the improvement in analytics one can suspect that certain far-seeing people are recognizing the enormous upside represented by emerging markets and preparing to couple that opportunity with improved data analytics to "level the playing field."  We would find it surprising if current ILS providers, who have moved all the way down the food chain to actually be close to providing their own paper to insure commercial and consumer risks in mature markets, are not preparing to do the same in less advanced markets.

If Morgan is correct, and the current state of data analytics has indeed levelled the playing field, there is no reason why any capital provider which has particular expertise in a peril (wind, for example) wouldn't be looking closely at emerging markets

We wondered about how insuring the emerging markets would work in practice. At the NY InsiderScope conference Amwins' Steve DeCarlo offered a convincing case about why wholesale brokers like Amwins will never be disintermediated.  Before discussing the nitty gritty of the operations of a wholesale broker DeCarlo repeatedly emphasized that "capital decides distribution."  

He noted that the capital backing underwriting at an insurer, syndicate or reinsurer does not want to deal with tens of thousands --or let's face it with emerging markets added to the mix-- hundred of thousands of clients.  Such a dialogue would be unmanageable. The capital provider is interested in dealing with a smaller group of brokers who are known to them.  

Conversely, the capital provider is well aware that it cannot get to the thousands of retail brokers which originate the business and certainly can't get to the actual insured itself even if it wanted to. The wholesale broker's role is to bring the business from the retail brokers to the brokers bringing it to the capital providers. In DeCarlo's view, capital providers won't allow the insured to circumvent the process and start dealing directly with the insurer. Capital has chosen this distribution model and the wholesale broker's job is to put that capital to work by bringing deals to the underwriters.

We considered this when pondering the near infinite list of potential new clients coming (hopefully) from emerging markets in the near future. We also kept in mind that the price transparency offered by data analytics might well allow capital of any type to obtain underwriting-like pricing for the emerging risks. 

Based on DeCarlo's reasoning if capital has chosen to distribute its product via the insurer to broker to wholesaler to retail broker to insured model in mature markets, the likelihood that capital would adopt a different model, in a less mature, less familiar market is virtually non-existent.

We then went back and took a closer look at what we saw Nephila is doing this month with State National and saw that the two have deepened their ties. State National continues to write business in the US generated by retail brokers, wholesalers and program managers which is then backed by either fully collateralized Nephila guarantees or placed into another Nephila vehicle including its syndicate at Lloyd's.  

The process reflects a decision made by "capital", in this case Nephila, to control its distribution by putting its capital to work by backing the State National policies that have provided the coverage sought by retail brokers, wholesalers and program managers. Nephila has made a conscious choice to act as an involved capital provider and has determined that it's willing to pay fees for procurement of business and for servicing the business --instead of setting up its own distribution network and claim centers.

Clearly, Nephila's appetite in terms of risk it is willing to back is communicated very clearly to State National so that no unwanted risk is fronted on State National paper.

The Nephila model is probably the most advanced evolution of ILS involvement in commercial insurance and, we note, it's deployed in the US which is an advanced market. It's hard to believe, despite the quality of improved data analytics that any capital provider would suddenly decide to strike off on its own in a less developed market and set up its own distribution networks and service centers.   

What this means is that Swiss Re, Munich Re and Lloyd's, which have each identified emerging markets as huge sources of future growth for them, will quite likely have other capital providers in the hunt with them. It probably also means that capital providers will continue to be looking at brokers and wholesalers to provide them with business originating from those emerging markets. 
Privacy and what it no longer means
Who are all those kitchen appliances reporting to?

Roger Crombie

Alan Greenspan, the man who brought us zero interest rates, said: "We really can't forecast all that well, and yet we pretend that we can ... but we really can't." Someone else famously said that economists had successfully forecast 12 of the past seven recessions.

With these caveats in place, I nevertheless have some forecasts to offer.

A report entitled "How Big Data & Wearable Technology Is Transforming The Insurance Industry", written by Anand Srinivasan, was issued early in May. It said: "Nearly 22% of health insurance carriers are developing wearable devices to track consumers' physical activity or vital signs, allowing them to offer lower rates to those who maintain a 'healthy lifestyle'."

Who decides what's healthy? There's the rub.

Data collection devices will become the insurance industry standard within two years, seems to be the prospect. A number of related developments have also been reported, such as:

* Auto insurers have devices that may be installed in cars to report to the insurer on every detail of driving activity. Put one of these babies in your car and your insurance premium will become much cheaper. Refuse, and you will be denied coverage.

* Wearable technology allows employers to monitor their employees' behaviour. Pop outside for a smoke, and the tech will report your absence. Smart chairs (urgh) are being developed that report on how much time you sit on them.

If you think having your rear end monitored is an intrusion on your privacy, you're right, but no one cares. We seem to be reaching a point - forecast alert - where electronic devices will watch people 24 hours a day and rat them out to employers, insurers and, presumably spouses and anyone else who gives a hoot.

The use of technology will reduce insurance premiums. But at what price? Given the mad rush to adopt, without much enquiry into potential consequences, anything even remotely electronic or Internet-related, issues such as data security and consumer privacy have been pushed to the sidelines.

A word here on privacy: it's over. Very little that you do even now escapes someone's notice. Cameras on every street corner, and inside and outside buildings, report activity to the authorities. Wearable tech adds a new, more personalised layer of intrusion.

Google, Facebook, and a thousand Government agencies track your behaviour online, on foot and in vehicles all the livelong day. Unless you spend your time on the Dark Net (whatever that may be), details of just about everything you do or say is recorded by someone, somewhere.

Arguments about privacy and one's right to it have been swept aside. You may have the right to ask Google to delete unflattering references, but try it and see just how difficult it is. Plus, Google will only wipe current data. Sites that track the history of the Internet are unaffected.

Is it wrong for Microsoft, Google and the others to keep track of every website you visit, every appointment you make, every breath you take? Defenders of the approach say that if you've done nothing wrong, you have nothing to hide. Believe it or not, there was a time when that argument was not persuasive. Now, of course, things have progressed so far that it's moot. Smile: you're on Candid Camera.

Apple, famously, refused to allow US Government types to decode the pages owned by terrorists, arguing some specious nonsense about copyright and privacy. Apple seemed to be saying that it was OK for them to have the information, because they can be trusted, whereas the US Government could not. That's upside-down and self-defeating thinking.

The Feds cracked the code, however, and that was the end of that discussion.

In light of all this, it might be best to behave at all times as if you knew someone was watching. Your e-mails are an open book. To be out on the street is to be observed in a dozen different ways. The camera in your computer can be hacked. (I installed a cardboard cover on my computer camera after reading that writers at The New Yorker routinely do the same.)

The one place where your thoughts remain private is inside your head. For how long that remains the case, we shall see.

Footnote: Apropos of nothing, the US Social Security Administration reports that naming babies Donald or Hillary is as unpopular as it's ever been. Donald has dropped to 441st, the lowest level since 1900. Hillary didn't crack the top 1,000.

In the UK, one name has not been given to a single baby born in the past 10 years. That name is Roger.

Roger Crombie is an American Society of Business Publication Editors national award winner. An English chartered accountant who lives in Eastbourne, on England's South Coast, he writes and broadcasts news and opinion in the US, UK, Bermuda and the Caribbean, in print and online. His main beat is insurance and financial services, with 30-year sidelines in music and humour. All views expressed in Roger's columns are exclusively his own. Contact Roger at

Copyright CATEX Reports
May 25, 2016
Quick Bytes

The"live streaming" of the Berkshire Hathaway annual meeting on Saturday, April 30th was well worth the 6 or 7 hours spent watching it. Apparently we weren't alone as about 1.1 million "unique" viewers checked in to watch during the meeting... At that meeting Warren Buffett referred to so-called hedge fund reinsurers as "beards" behind which people are actually engaging in money management. He said "You can set up a reinsurance operation with very few people by taking large chunks of what brokers may offer. It's not the greatest reinsurance in the world"...We note that Ajit Jain has named Kara Raiguel to succeed Tad Montross as CEO of Gen Re. Jain referred to Raiguel as his "secret weapon"...Back to those hedge fund carriers, which are also called "total return" carriers. Hamilton's Brian Duperreault noted that insurers are starting to take a more holistic approach to their investment strategy and that a more "intelligent look at investments is a natural evolution of what we do"...Reinsurers continue to watch the ground-up claim figures from insurers in Alberta, Canada as loss numbers from the Ft. McMurray wildfire come in. S&P said that reinsurance is likely to take at least 50% of the insured losses...Lloyd's chairman John Nelson called on the US government to end its involvement in providing residential flood insurance saying that the program had become unsustainable and encouraged irresponsible homebuilding...The company that owns the Aliso Canyon gas storage facility said that expected costs from the 118 day methane gas leak have increased to $665 million. The company says it expects insurance to cover up to $1 billion...Supposedly Tom Bolt's former role at Lloyd's, Director of Performance Management, is being restructured with some of the job's duties to pass to CEO Inga Beale...Lancashire CEO Alex Maloney said he would "bet his house" on subsidiary Cathedral Capital's top line holding up after reports of client defections following the resignations of underwriters John Hamblin, Mark Wilson and Simon King...The terrible drought in India continues with both rising human and insurance cost. Insurance claims against the national crop insurance scheme for Maharashtra state alone are $613 million. Meanwhile over 1,500 Indian farmers have committed suicide because of crop failures and mounting debts...
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