week commencing 07/06/20:

As politicians scent change in the air and Boris Johnson wrestles with how he’s going to shrink that 2m safe distance to 1m, the insurance industry is already preparing its next move…

Insurance market hits on a capital idea

This week, one story dominated the insurance and risk media: insurers and reinsurers raising capital to expand their underwriting to take advantage of the hard market created by Covid-19. Here’s a flavour of what the press covered:

  • Lloyd’s syndicate Ark is seeking to raise $750–$1bn to form a reinsurance company based in Bermuda that will focus on specialty reinsurance. External-link. [The Insurer]
  • Former Hiscox CUO Richard Watson is working alongside ex-colleagues to launch a Lloyd’s and Bermuda-based (re)insurance start-up. He is seeking up to $1bn in private equity. External-link. [Insurance Insider]
  • Specialty insurance and reinsurance underwriter Lancashire is also keen to take advantage of market conditions. The company said it was looking to raise up to $365m by issuing new equity. External-link. [Reinsurance News]
  • Ed Noonan, former CEO of Validus, and EnStar have bought a majority stake in StarStone US and will recapitalise it with an injection of $610m. External-link. [Artemis]
  • Having previously supported canny underwriters looking to set up their own MGAs, Beat Capital is preparing to begin fundraising to support its own underwriting via syndicate 4242. External-link. [Insurance Insider]
  • Bermuda-based (re)insurer Fidelis announced it had secured $500m in equity capital through its existing investor relationships. This brings its total capital-raising in the last six months to $800m giving it over $2bn underwriting capacity. External-link. [Insurance Business UK]
  • Martin Reith, Ascot founder and former boss of Neon, is talking to financial group Macquarie about possible routes back into the insurance market. External-link. [Insurance Insider]
  • Finally, Lemonade, the poster child of the insurtech generation, has filed to hold an IPO in New York. Share volumes and price range are yet to be announced. External-link. [Financial Times]

Olympic body seeks compensation

The organising body behind the Olympic Games has begun talks with insurers about compensation for the postponement of this year’s Tokyo games due to Covid-19. Experts says it’s unclear whether the IOC’s policy covers the one-year postponement. External-link. [Business Insurance]

US property rates predicted to fall

Despite hardening insurance premiums, Swiss Re’s sigma research team has predicted that rates for US Property and Casualty will still fall 2% during this year. Covid-19 “has turned the industry outlook upside down”, Swiss Re said. External-link. [The Insurer]

Electronic trading growth for AEGIS London

Lloyd’s managing agent AEGIS London announced it had experienced its best-ever month for digital trading in May 2020. Growth in the use of its Opal system during lockdown was one of the factors. External-link. [Insurance Day]

Lloyd’s launches new API

And while we’re on the subject of electronic trading, Lloyd’s of London has launched a new API (application programming interface) to help brokers and underwriters trade electronically in the market. External-link. [Reinsurance News]

And this week’s oddest headline is…

“A unicorn vomiting a rainbow.” Thanks to Inside P&C for this imaginative take on the Lemonade IPO story. External-link. [Inside  P&C]

External-link. External links are being provided as a convenience to relevant content; they do not constitute an endorsement or an approval by Luther Pendragon of any of the services or opinions of external content. Luther Pendragon is not responsible for the accuracy, legality or content of these external sites. Please also note that some external content may require a subscription to view.