1. MARKET NEWS, DATA AND INSIGHT ALL DAY, EVERY DAY
ISSUE 4,365
FRIDAY 5 JUNE 2015
Staying
out of the
terror pool
While Pool Re and the fast-
expanding private standalone
terrorism market continue to
work alongside each other, the
competition between the two
has increased significantly
over the past year
p2 p3
p4-5
Blow to Exor as KBW favours
PartnerRe/Axis merger
June renewals show price declines
moderating – Guy Carpenter
www.insurancedayawards.com
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NEWS
www.insuranceday.com | Friday 5 June 20152
Blow to Exor as KBW
favours PartnerRe/
Axis merger
Analysts predict slim majority in favour of amalgamation
I
nvestment firm Exor was dealt a
blow to its efforts to buy Partner­
Re after investment bank Keefe,
Bruyette Woods (KBW) urged
the Bermudian reinsurer’s sharehold­
ers to vote in favour of a merger with
Axis Capital.
Analysts at the investment bank said
they now expect Axis Capital to come
out victorious in the battle with Exor
over the Bermudian reinsurer, although
they said the vote is likely to be close.
“On balance we think PartnerRe
shareholders should and will ultimately
support the merger,” KBW said.
“We think [PartnerRe’s] preferred
shareholders (who represent about
41.7% of the vote) will prefer the [Axis/
PartnerRe] combination.”
KBW said the Axis all-share merger
offer represents only a modest (4.3%)
discount to Exor’s $137.50 all-cash bid.
Including the proposed $11.50 special
dividend, the Axis deal implies a value
of $131.53 a share for PartnerRe.
Over the past week PartnerRe and
Axis executives have begun a charm
offensive to try to win over PartnerRe’s
shareholders ahead of their vote on the
deal next month. Exor has also ramped
up efforts to persuade shareholders of
the merits of its bid and the “inferior”
nature of the Axis combination.
But KBW said the medium- and long-
term considerations of a merger with
Axis offer more of an upside, includ­
ing better valuation of the combined
company, greater earnings potential
and capital management benefits in
the form of a $750m shareholder re­
turn, cost savings and attractiveness
for third-party capital.
In addition, PartnerRe shareholders
bear up to $315m in costs if the Exor
deal fails to close, with no compensa­
tion for a lost transaction opportunity.
Last month KBW analyst Meyer
Shields told Insurance Day it could
be looking more difficult to convince
shareholders of the Axis proposal’s
merits due to an increasing shareholder
interest from Exor and the shorter-term
benefits of Exor versus the longer-term
benefits of Axis.
“Most investors don’t have that time­
frame and it is important to note one
of the most interesting aspects of Ex­
or’s revised offer is it has been buying
PartnerRe shares. Incidentally, this has
been at a lower price than it offered, so
there is a little bit of cost savings in that
as well,” Shields said.
But after reviewing PartnerRe/Axis’s
latest presentation on the benefits of
the merger, KBW is predicting a slim
majority for the amalgamation.
“As far as we can tell, the only stra­
tegic advantages of the Exor offer to
preferred shareholders are the the­
oretical benefit of remaining a pure-
play reinsurer and therefore avoid­
ing competing with cedants, and the
planned retention of capital compared
to [Axis’s] more aggressive capital re­
turn plans,” KBW said.
In recent weeks two of PartnerRe’s
major shareholders – New York-based
Sandell Asset Management and Frank­
lin Mutual Advisers – have come out in
support of Exor’s bid.
Yesterday, Exor said it had begun le­
gal action against PartnerRe to obtain
full details of its shareholder list.
PartnerRe shareholders will vote on
the merger with Axis on July 24.
Alexis Burris
Reporter
“We think
[PartnerRe’s]
preferred
shareholders (who
represent about
41.7% of the vote)
will prefer the
[Axis/PartnerRe]
combination”
Keefe, Bruyette Woods
Exor proposal
• Binding all-cash $137.50 (valuing
PartnerRe at $6.8bn)
• Retention of management
• No change to status for existing
terms, rights, listing and
registration requirements
• PartnerRe remains pure-play
reinsurer
• Would expect to close by end of 2015
• $315m cost to shareholders if
PartnerRe enters deal with Exor
and it fails to close
• $15bn net asset parent company
Axis Capital proposal
• Share-based offer (implies a
value of $131.53 per share with
dividend included)
• $13bn combined shareholder equity
• $200m cost savings (expected
first 18 months)
• Return $750m to combined
company shareholders immediately
after closing
• More than $2.2bn of dividends and
buybacks expected through to the
2017 year-end
• Regulatory approvals received
• Larger, more diversified re/insurer
• Reshuffling of board/possible
redundancies as companies
combine. New board consists of
two currently at PartnerRe and
nine from Axis Capital
• Annual fee income of $60m by 2017
• $280m break fee if PartnerRe goes
with Exor
Exor v Axis: how
the deals compare

3. NEWS
www.insuranceday.com | Friday 5 June 2015 3
June renewals show price
declines moderating –
Guy Carpenter
Sophie Roberts
Deputy editor
T
he two-year fall in US
property catastrophe
rates moderated at the
June 1 renewal season,
Guy Carpenter has reported.
Risk-adjusted rates were down
by amounts “averaging in the
high single digits”, the reinsur-
ance broker said yesterday.
This follows two years of price
falls averaging 15% to 20% on US
property cat placements.
Guy Carpenter is the first bro-
ker to report publicly the results
of the June 1 renewals.
The figures chime with early
predictions from senior reinsur-
ance brokers, reported by Insur-
ance Day ahead of the renewal,
who estimated the Florida-heavy
risk-adjusted property catastro-
phe reinsurance rates-on-line
would fall between 5% and 10%.
Guy Carpenter said reinsurers
had shown some resistance to the
continued downward pressure on
rates in the June 1 renewals.
“Many reinsurers held the line
against more extreme declines
even though capacity was still
plentiful and low loss experience
continued,” Lara Mowery, global
head of property specialty at Guy
Carpenter, said.
Specifically, Mowery highlight-
ed some firming in the industry
loss warranties (ILW) market,
with demand increasing.
Guy Carpenter said the moder-
ation in rate declines was caused
by a combination of factors, in-
cluding pricing pressure created
by past seasons of price declines
and a significant amount of new
limit placed.
Followingtwoyearsofdecreased
pricing, along with a “healthier
insurance environment”, Florida
contributed to the increase in the
demand for reinsurance, accord-
ing to Guy Carpenter.
Notably, a significant number
of risks transferring out of the
Florida Citizens Property Insur-
ance Corporation (CPIC) into
the private sector in the past 18
months contributed to increased
demand for coverage.
Additionally, June 1, 2015
marked the first renewal season
in several years at which the
Florida Hurricane Catastrophe
Fund (FHCF) had no outstanding
post-event bonds, according to
Guy Carpenter, allowing compa-
nies to reduce their FHCF cover-
age and explore private market
alternatives. This was also the
first time in history the FHCF pur-
chased reinsurance.
Slowing rates declines will
be see as a sign the property ca-
tastrophe reinsurance market is
approaching the bottom of the
pricing cycle.
JLT Re’s global head of analytics,
David Flandro, said: “If we’re look-
ing at a figure of around negative
10, that’s less than what was the
case this time last year and would
signal a slight pushback and some
pricing power among the catastro-
phe reinsurance market.”
Retrocessional pricing contin-
ued to soften during the first half
of 2015, with plentiful capacity
from both “funds” and rated car-
riers remaining the defining fea-
ture of the market.
Guy Carpenter said the contin-
ued decline in pricing and the in-
creased availability of innovative
products and new levels of cov-
er has meant that many buyers
sought additional purchases at
June 1.
Increased purchasing activity
in certain sectors has led to some
recent firming in this space, the
broker added.
“While mid-year has not been a
core date for retrocession renew-
als, there has been a significant
amount of activity in this mar-
ketplace as buyers sought to off-
set their catastrophe exposures,”
Mowrey said.
Another senior reinsurance
broker told Insurance Day retro
was one of the “less disciplined
pricing areas at the moment”,
adding: “You’re seeing some of
the big players write in areas
where they weren’t previously
writing. Also, more specialty retro
is being placed in Lloyd’s as some
of those players want to widen
their books.”
Guy Carpenter added catastro-
phe bond pricing continued to
remain stable over recent weeks.
It said recent deal pricing and
investor feedback “suggested fur-
ther catastrophe bond pricing re-
ductions in the near term would
be unlikely”.
The reinsurance broker said
data suggested the cat bond mar-
ket has now reached a “stabilisa-
tion point”.
Insurers want more ships in Arctic
One of the biggest concerns for
insurers looking at cover for ves-
sels operating in the Arctic is its
remoteness, writes Craig Eason,
Lloyd’s List.
While there is the risk of ice
damage to any vessel in cold con-
ditions, there is the continued
concern there remains an all-year-
round risk if anything happens to
a vessel, there is little or no imme-
diate search and rescue or salvage.
Manypartsoftheshippingindus-
try have welcomed what the now-
approved Polar Code achieves,
but there is a belief it may lead
to inappropriate vessels entering
Arctic waters and for those ves-
sels to have inexperienced crews.
Participants at a Nor-Shipping
seminar on Arctic risk heard from
protection and indemnity club
Gard’s chief executive, Rolf Thore
Roppestad, who said from an in-
surance point of view, a busy Arc-
tic will be a better one. There will
be better response capabilities in
an emergency and the risks can
be better mitigated, he said.
However, Roppestad added he
remains concerned about sub-
standard tonnage being given in-
surance cover to enter the Arctic.
The issue was also raised by
shipowner Felix Tschudi, who
said regardless of whether ship-
ping levels increase in the Arctic,
he thinks transits of the Northern
Sea Route (NSR) should be with
mandatory icebreaker escorts.
Last year, there were few non-
Russian-flagged transits of the
northern sea route, as the market
conditions were not sufficiently
robust for charterers to take the
risk. According to the Northern
Sea Route Information Office,
only six of the 31 ships that went
through the NSR had other flags.
One owner with NSR experience
is Sweden’s Stena Bulk. It sent Ste-
na Polaris with a cargo of naptha
to South Korea in 2013.Stena’s in-
surance manager, Örjan Karlsson,
said the voyage went as well as
to be expected, with the fuel sav-
ings of a shorter voyage realised,
US May
storm losses
approach $3bn
Economic losses from severe
thunderstorm and flooding in
the US in May are expected to ap-
proach $3bn, Aon Benfield said,
writes Alexis Burris.
The wettest May on record for
Texas and Oklahoma brought
severe and flash flooding to the
states. According to Aon Benfield
Impact Forecasting, overall in-
sured losses will easily exceed
$1bn despite low flood insurance
penetration in parts of Oklahoma
and Texas.
More than 5,000 homes suf-
fered flood inundation in Texas
alone, including in the metro
regions of Houston, Austin and
Dallas. Hundreds of additional
homes sustained flood damage
in the Oklahoma metro areas of
Tulsa and Oklahoma City.
Other parts of the Plains, Mid-
west and Rockies regions also
sustained severe storm damage
throughout the month.
Insured losses from severe
weather in the US this year had al-
ready reached $3.1bn by mid-May.
US severe thunderstorms have his-
torically generated insured losses
of around $11.8bn a year.
China also saw stretches of
severe weather during May. At
least 25,400 homes sustained
damages while a further 1,200
homes were destroyed. The gov-
ernment’s official Ministry of
Civil Affairs (MCA) listed econom-
ic losses from the nine affected
provinces at Yuan2.9bn ($461m).
Flooding caused widespread
damage in Queensland and New
South Wales Australia during
May, with the Insurance Coun-
cil of Australia reporting insur-
ers had received at least 27,825
claims with payouts totalling
A$360 ($280m).
Meanwhile, a major magnitude
7.3 aftershock struck Nepal on
May 12, with losses from tremors
in April and May expected to reach
$10bn. More than 775,000 homes
were damaged or destroyed.
but time was lost through having
to wait for four days for the ice-
breaker escort to arrive.
While Russia has committed it-
self to building three new nuclear-
powered icebreakers in the
coming three to four years, the
expectation is some of its existing
fleet of ageing vessels are likely to
be scrapped.
Icebreaker and salvage capaci-
ty in the Arctic is seen as a grow-
ing concern within the insurance
industry. Karlsson said one of the
insurance requirements for the
Stena Polaris voyage was to have
at least one nuclear-powered ice-
breaker escort and any salvage if
needed would be free of charge.
Motorists stranded by high
water in Dallas, Texas
© 2015 Rex C Curry, File/AP

4. INSIGHT
www.insuranceday.com | Friday 5 June 20154 www.insuranceday.com | Friday 5 June 2015 5
Staying out of the
terror pool
While Pool Re and the fast-expanding private
standalone terrorism market continue to work
alongside each other, the competition between the
two has increased significantly over the past year
Rasaad Jamie
Global markets editor
W
hen the govern­
ment-supported
terrorism reinsur­
ance mutual Pool
Re was set up by the UK insurance
industry in 1993, it only provided
cover for property and business
interruption losses as a result of a
fire or explosion caused by an act
of terrorism, as that was where
the gap in the commercial mar­
ket was because the reinsurance
industry had stopped providing
cover for those two perils. A great
deal has changed in the terrorism
insurance market since then and
while Pool Re has broadened (and
is constantly reviewing) the scope
of its cover, the fundamental rea­
son for its existence, according
to the company’s chief executive,
Julian Enoizi, remains to make
available underwriting capacity
for terrorism-related exposures
the commercial market is unable
to or cannot adequately provide
cover for.
In this regard, Pool Re has an im­
portant role to play in the market
because of its ability to offer high
limits for properties in high-risk
areas such as central London, ac­
cording to Catherine Thomas, di­
rector, analytics at rating agency
AM Best. “In particular, it covers
losses resulting from nuclear, bio­
logical, chemical and radiological
[NBCR] attacks, which could be
very high, are extremely difficult
to estimate and are usually exclud­
ed from private policies,” she says.
Indeed, the potential of a NBCR
terrorist attack constitutes the
main argument on the part of the
commercial insurance industry
for the continuation of govern­
ment support of the market, as
was made clear last year when
the industry lobbied for the re­
authorisation of the Terrorism
Risk Insurance Act (Tria), the leg­
islation that created the federal
backstop for insurers offering
commercial terrorism cover in
the US. For example, according to
the latest catastrophe models for
NBCR terrorism event scenarios,
the losses from a large nuclear
attack in Manhattan would come
to more than $900bn – an amount
that exceeds the total of amount of
capital in the US insurance market
(estimated at around $700bn). To
date, Catlin is by all accounts the
only player in the UK standalone
terrorism market to provide cov­
er for NBCR exposures.
Clear division
But while the private or stand­
alone terrorism market and com­
panies that are members of the
Pool Re scheme do work alongside
each other, there is also a very
clear division. Companies that
are members of Pool Re cannot
also write terrorism for their own
account in the UK. Steve Coates,
chief underwriting officer at Pool
Re, says there is no formal rela­
tionship between Pool Re and the
private terrorism market. “Pool
Re underpins the terrorism cov­
er offered by its members, which
combined form the majority of
the UK commercial property mar­
ket and can only offer cover sup­
ported by Pool Re. The standalone
market consists of companies or
underwriters that choose not to
be members of Pool Re and wish
to offer standalone terrorism cov­
er on their own account, and thus
cannot access the guarantee pro­
vided by Pool Re. So the two mar­
kets are completely independent
and are effectively in competition
against each other.”
So, for example, while Allianz
and most of its subsidiaries in the
UK, including Allianz Global Cor­
porate Specialty (AGCS), are all
members of Pool Re, in May this
year, AGCS made the decision to
enter the private, standalone ter­
rorism market for the first time
when it hired two underwriters
from Catlin.
However, Christof Bentele,
head of global crisis management
at AGCS, says the company will
not write terrorism business in
the UK as well as in other terri­
tories that have mandatory pool
schemes of which Allianz com­
panies are members. “But we
will, however, consider lines of
business which do not fall within
these mandatory arrangements
in these countries,” he says. AGCS
will offer standalone cover (ie,
terrorism cover not tied to an ex­
isting commercial property poli­
cy) against terrorism attacks and
political unrest in the companies’
overseas markets.
National pool exclusions
Global risks are excluded from
national pool solutions such as
Pool Re in the UK, Extremus in
Germany or Gareat in France.
AGCS, Bentele says, will write
single-risk policies or multiple lo­
cations policies within one juris­
diction and the company is also
prepared to write EU-wide pro­
grammes on a freedom-of-service
basis. But what are the key issues
and considerations involved in
issuing a terrorism policy that
covers multiple jurisdictions, as
opposed to a policy which is valid
in only one jurisdiction?
Despite the obvious challenges
(local language, local insurance
law, local supervisory law, licens­
ing, taxation and so on), according
to Bentele, the biggest challenge
by far is to construct the policy
wordings in such a way that under
no circumstances are there cover­
age gaps in terms of cross-border
interdependency losses. “But as
the vast majority of international
terrorism business is written on
the same London market stan­
dard wordings (LMA3030/T3/T4),
almost all countries without man­
datory terrorism insurance state
schemes accept these wordings as
good local standard,” he says.
Pool Re and most govern­
ment-supported pools will also
not issue terrorism cover unless
there is a commercial property
policy already in place. And, in
the case of Pool Re, if the policy­
holder decides to extend their
policy to include terrorism cover,
they must cover all the property
they insure. Pool Re will not in­
sure only part of their property
portfolio for terrorism.
Similarly, Pool Re does not cov­
er terrorism-related marine, avi­
ation, transport or cyber risks,
largely because, in the words of
Coates, it has not been asked to
do so by the insurance industry,
which suggests there is not a gap
in the market, although it is not
at all clear what level of capacity
or scope of cover are available for
these perils from commercial in­
surers and reinsurers.
However, the two markets are
mainly in competition with each
other. According to James Hannan,
terrorism and political violence
underwriter at Lloyd’s insurer
Antares, if a client solely requires
property damage/business inter­
ruption terrorism insurance, both
markets can offer the appropriate
cover. “However, the wider cover­
ages the private market can offer
in the UK mean for a comprehen­
sive programme, which takes into
account issues such as denial of ac­
cess, power and utilities and loss of
attraction that occur as a result of
a terrorist event and which could
impact a client’s revenues with­
out damage to property, insureds
tend to look to the private market,
which can offer them a more be­
spoke product,” he said.
The competition between the
two markets is intensifying. Ju­
lian Kirkby, senior account ex­
ecutive in the political violence
– non-marine and energy divi­
sion of London market-based
United Insurance Brokers (UIB),
says many Lloyd’s syndicates that
are members of Pool Re would
rather not be in it because of the
various strictures imposed by the
scheme. “We have seen a number
of participants leave the pool. The
standalone terrorism market for
syndicates outside Pool Re is rel­
atively small but it is growing and
it can offer a real and competitive
solution compared to the Pool Re
offering. For example, in the open
market, clients are able to choose
which properties in their portfolio
they wish to insure and/or opt for
a first-loss policy limit as opposed
to a full-value policy,” he says.
The majority of UIB’s terrorism
portfolio is reinsurance cover for
clientsbasedintheMiddleEastand
north African region, plus Turkey,
Asia, India, Pakistan and sub-
Saharan Africa. “The only local
pool we generally encounter other
than Pool Re is the Indian Market
Terrorism Risk Insurance Pool,
where there is no direct govern­
ment involvement,” Kirkby says.
Thomas says the private terror­
ism market can be attractive to
insureds as it usually takes a more
flexible approach to underwriting
and typically offers more competi­
tive rates. “Historically it has been
able to offer discounts for clients
taking risk management measures
and offer more differentiated
rates.” However, she says recent
modernisation measures should
see Pool Re adopt a more risk-dif­
ferentiated approach and increase
the level of competition it presents
to the standalone market. These
modernisation measures include
Pool Re’s decision to purchase ret­
rocessional capacity in the private
market, the rerating of the four
Pool Re established terrorism risks
zones in the UK and the fact Pool
Re is also now making it easier for
small to medium-sized enterprises
to obtain terrorism cover by offer­
ing simpler products on more fa­
vourable terms.
But there is no doubt the pri­
vate standalone terrorism mar­
ket has significantly expanded its
scope in recent years on the basis
of the increased demand for cover
by clients. For example, Hannan
says four years ago Antares fo­
cused on terrorism and sabotage
property damage and business
interruption. “Whereas now we
have broadened our offering to
include wider political violence
perils, strikes, riots, civil commo­
tion, political violence, war and
civil war and also we are able to
offer non-damage business inter­
ruption, event cancellation and
terrorism liability.”
Indeed, the reason AGCS decided
to enter the standalone terrorism
market was because existing AGCS
clients were seeking more effective
solutions for their overseas politi­
cal violence/ terrorism exposures.
This development, Bentele says,
coincided with a longstanding de­
sire within AGCS to increase its un­
derwriting capacity for terrorism
and political violence to provide
clients and potential clients with a
more complete suite of coverage in
this area. “It is only this year that
we have reached a position where
we now have solid underwriting
and management resources avail­
able to be able to offer a sufficient­
ly rigorous product.”
The issue of government certi­
fication of an act as a terrorism
act is an important one for the
private market and represent an
area where it has a substantial
competitive advantage over gov­
ernment supported schemes. For
example, for Pool Re to pay out on
a claim, the UK government must
certify an event causing property
damage to be an act of terrorism,
as defined within the terms of the
Reinsurance (Acts of Terrorism)
Act 1993 or there needs to be a
ruling by an independent tribunal
as constituted under the retroces­
sion agreement.
For example, the terrorism cov­
er provided by Antares does not
depend on a government certifi­
cation, which, Hannan says, could
slow or even prevent a valid claim
from being paid. “Our cover is trig­
gered when we deem an event,
by our definition, to be an act of
terrorism, which means ‘an act or
series of acts, including the use of
force or violence, of any person or
group(s) of persons, whether act­
ing alone or on behalf of or in con­
nection with any organisation(s),
committed for political, religious
or ideological purposes including
the intention to influence any gov­
ernment and/or to put the public
in fear for such purposes’,” he says.
Kirkby adds the terrorism risks
placed by UIB follow the standard
market definitions for sabotage
and terrorism policies. He says in
the private standalone terrorism
market there is no legal consen­
sus regarding the definition of
the term “terrorism” and various
government agencies have differ­
ent definitions. “It is not always
necessary for an act to be certified
as terrorism by a government or
government agency. Indeed, some
countries will not define an inci­
dent as being a terrorist act as it
does not want to admit it has a
problem of this ilk. However, in
countries such as Puerto Rico and
Russia, the local government has
to designate the incident as being
an act of terrorism for the local
policy to respond.”
National security developments
But to what extent have national
security and other related devel­
opments in the UK increased or de­
creased the opportunities for the
private standalone terrorism mar­
ket? For example, what has been
the impact on the market of the
decision last year by the UK gov­
ernment to cut the security service
budget by half, despite warnings
of an increased terrorism threat,
or by the advent of the UK count­
er-terrorism bill, which stopped
insurers paying ransoms to terror­
ists, increased the demand for ter­
rorism cover in the UK?
Hannan says the purchase of
terrorism insurance is often linked
to the level of perceived threat
insureds face; in recent years,
the increase in terrorism and ter­
rorism-related news items in the
media has typically lead to an in­
crease in demand for coverage.
“Globally, the trend has been that
as soon as something occurs in a
country, in the subsequent week
to a month, depending on the se­
verity of the incident, you imme­
diately see an uptick in demand
in that territory. However, I have
not witnesses a direct correlation
between the cuts in the security
services’ budget and enquiries for
terrorism coverage in the UK.”
According to Kirkby, reports
from his company’s UK commer­
cialpropertydesksuggestsUIBhas
not seen any significant growth in
the number of UK clients looking
to buy terrorism insurance, as the
majority of commercial policy­
holders are already protected. He
says the growing trend for terror­
ist attacks is more towards “lone
wolf” fanatics or those working
in small close-knit cells. “There
is a lower expectation for major
attacks on UK properties, such as
the IRA bombing campaign of the
1990s, so the anticipated physical
damage losses are not having any
impact on rating,” he says.
Thomas does not believe insur­
ers have been affected by the ad­
vent of the UK counter-terrorism
bill. She says kidnap and ransom
(KR) insurers were already pro­
hibited by the UN from paying
or reimbursing ransoms to pro­
scribed terrorist organisations
and therefore policies typically
already excluded such payments.
“Indeed, some insurers welcomed
the clarity provided by the bill.
Neither should it be detrimental
to the business model of KR in­
surers. While insurers generally
provide cover for reimbursement
of ransom payments under KR
policies, only a small proportion
of policies are in regions where
terrorist activity is occurring.
Cover for KR is predominately
in countries where there is a large
gap between rich and poor, or
where there is political instability.
In the past few years, the more es­
tablished KR participants have
increasingly focused on risk man­
agement to prevent kidnaps from
occurring in the first instance.”
Undiminished demand
Hannan says the demand for ter­
rorism and political violence cov­
er is unlikely to diminish in the
short to medium term and the pri­
vate standalone terrorism market
will continue to develop to reflect
the risk. “Events can flare with
minimal warning and we need
to be able to continue to quickly
evolve our products to meet the
needs of our clients. In the UK,
the potential return of significant
numbers of jihadi fighters from
Iraq and Syria and how the secu­
rity services will cope with this
is a potential issue we will watch
closely to ensure our products
continue to mirror the threats
which our clients face.”
However, the overall consen­
sus is there continues to be too
much capacity in the standalone
terrorism market, which has led
to rates being soft. Kirkby pretty
much speaks for the market when
he says: “People talk of the mar­
ket needing to harden and we do
see some territories apparently at
rock-bottom rating, with many re­
insurers walking away from risks
due to the pricing on offer, but with
a growing amount of participants
offering extra capacity and low loss
ratios this is difficult to foresee.” n
“The standalone terrorism
market for syndicates
outside Pool Re is relatively
small but it is growing and
it can offer a real and
competitive solution
compared to the
Pool Re offering”
Julian Kirby
United Insurance Brokers
Graph 1: Terror attacks by business sector, 2007 to 2014
250
200
150
100
50
0
2007
2008
2009
2010
2011
2012
2013
2014
Source: TerrorismTracker/Aon Terrorism Political Violence Risk Map 2015
The aftermath of the
2005 Tavistock Square,
London bus bomb
© 2015 Sang Tan/AP
Graph 2: Terror attacks by country, 2007 to 2014
++++7+4+4+3+2+2+2+An Other Iraq n
n Pakistan Afghanistan n
n India Thailand n
n Russia Somalia n
n Nigeria Yemen n
n Colombia
Source: TerrorismTracker/Aon Terrorism Political
Violence Risk Map 2015
“The standalone
market has
been able
to offer
discounts
for clients
taking risk
management
measures”
Catherine Thomas
AM Best
– Transport (local) – Retail – Extractives (oil)
– Construction – Extractives (gas) – Financial – Media
– Telecoms – Electricity – Aviation – Tourism

5. DRESS DOWN FRIDAY
www.insuranceday.com | Friday 5 June 20156 www.insuranceday.com | Friday 5 June 2015 7
Richard
Clark
Head of business
development,
Xuber
Power behind the throneCommunity
Who are you and what do
you do?
I’m Richard Clark and my current
role is head of business develop-
ment at Xuber including commer-
cial and customer development
– ie, I am involved in almost ev-
erything customer-related and
how our products align to custom-
er and market needs.
How did you end up in your
current role?
I began my career in reinsurance
in the London market. I switched
to technology early on and then
joined a software provider. I’ve
worked in London and mainland
Europe so have gained a glob-
al perspective. My present role
evolved from originally run-
ning our underwriting product
business and then during my 18
years in Xuber I have supported
a number of our company lead-
ers, many of whom were new to
this industry.
What is your most memorable
time in the industry?
The defining period that stands
out was between 2000 and 2005,
when I took our then flagship
product, Genius, from being a
relatively successful commercial
insurance solution for small to
medium-sized organisations to
becoming the system of choice for
international global programme
underwriters such as XL, Ace, Al-
lianz Global Corporate Specialty
and Axa Corporate Solutions.
What’s the worst job you have
ever had?
Honestly I don’t think I’ve had
one. There are always bad and
good elements to all jobs, but
I’ve had no out-and-out bad one.
I don’t like doing same thing for
any length of time, so variety
is key.
What is the best deal you have
done?
There have been many, but I’d
single out the first full Xuber for
Insurers sale – to Axa Corporate
Solutions. This was due to the ben-
efit it has brought to the customer
in evolving its Genius system and
also its representing a coming of
age for our new product.
Who has had the biggest
influence on your career?
My first boss when I worked in
retail during university holidays.
He taught me about dealing with
customers in B2C world – it was
a baptism of fire and proved to
be invaluable.
Liberty forges life-
saving partnership
WeAreTheCity to celebrate women in insurance
Liberty Specialty Markets (LSM)
has joined forces with WaterAid,
the leading international charity
specialising in providing access to
clean water and sanitation, writes
Alexis Burris.
LSM will be donating a signif-
icant sum to the charity over the
next three years. Its donations
will be focused on an initiative in a
single country. The country will be
chosen by staff, who will also aim
to raise additional money through
a range of fundraising activities.
“We’ve been hugely impressed
with WaterAid’s energy and com-
mitment to tackling these funda-
mental challenges and are genu-
inely excited to be joining them in
this mission,” said LSM’s president,
Nick Metcalf.
“At Liberty Specialty Markets we
are committed to helping people to
prosper, and we believe that this
ambition is a perfect match for Wa-
terAid’s life-saving work.” n
C
harity event Live@Lloyd’s
has attracted more than
£100,000 in corporate do-
nations so far.
The event will include a cham-
pagne reception and concert in the
underwriting room at the Lloyd’s
building on October 8. It aims to
deliver more than £200,000 to four
London-based children’s charities
including Great Ormond Street
Hospital, Chance to Shine, Richard
House and HemiHelp.
The concert, entitled Stage and
Screen, will include well-known
music from opera, the West End
WeAreTheCity, the leading web-
site for professional women in the
UK, has launched its new awards
programme – the WATC Top 50
Rising Stars Awards for 2015,
writes Alexis Burris.
The awards are the first to focus
on the UK’s female talent pipeline
below management level and will
celebrate 50 women who rep-
resent the leaders of tomorrow
across multiple industries, includ-
ing insurance.
“The focus on increasing the
number of women on boards in
the UK over the past few years
has been incredibly successful.
We now need to focus on helping
to highlight women who will be
future managers and directors
within our organisations,” Vanes-
sa Vallely, founder and chief exec-
utive of WeAreTheCity, said.
Nominations are now open,
with five women to be chosen as
rising stars in insurance. n
If you could change one thing
about the industry what would
it be?
I wish that the London market
would wake up realising the true
potential for technology rather
than just using it to refine and im-
prove their old manual processes.
If you did not work in the
industry what job would you
like to do?
Barrister or author.
What is the biggest challenge
facing the industry?
Keeping London competitive. De-
veloping innovative alternative
mechanisms for risk transfer. The
threats we face are from growth in
non-traditional markets (eg, Asia-
Pacific). A big part of the answer is,
not surprisingly, technology.
How do you let your hair down?
Not much hair any more but I
enjoy dabbling in lots of things:
swimming, golf, scuba diving,
travel, reading, local history...
If you could be anywhere in the
world right now where would
you be?
For me it’s more about people
than places, but in place terms I’d
say discovering somewhere I’ve
never been.
What life lesson would you pass
onto others?
I’d give four pieces of advice for
working life: 1. Play the long
game; 2. Keep things in perspec-
tive; 3. Choose your battles care-
fully; and 4. Take responsibility to
manage your own career.
Where do you want to be in 10
years’ time?
I’ll officially have retired by then
but I doubt I’ll be able to give up
completely so I would like to con-
tinue to play some sort of an advi-
sory role in the industry. n
What is your favourite...
Sport? Rugby as a spectator,
swimming for fitness.
Car? Range Rover Evoque (I’ve
just got a new one!)
Meal? I like almost everything:
Bistro food (Paris) or Indian
(Goan in Cyrus Todiwala’s Café
Spice Namasté) or fresh fish
(near the sea).
Favourite book? Kim by
Rudyard Kipling, despite it
being a bit out of favour at the
moment, or, as an inspiring
business book, Lee Iacocca’s
autobiography.
Holiday destination? I love
Spain – the people, the culture
and the language – but for
somewhere new I’d love to
discover South America.
Music? That’s a blank for me.
There are songs and music
that are memorable for an
association they have, but there
is no artist or genre.
Film? The King’s Speech
(overcoming adversity).
and film – featuring themes from
James Bond and Star Wars along-
side Mozart’s Marriage of Figaro
Overture and Bizet’s Carmen.
The Northern Lights Sympho-
ny Orchestra will perform, along
with world-class soloists Saman-
tha Link (pictured) and Anthony
Stuart Lloyd.
“I am very much looking for-
ward to performing such
beautiful songs from
the musicals and
movies with a
60-piece or-
chestra. Be-
ing a mum
to two chil-
dren, I hugely
support these
amazing charities
who do so much for
sick and disadvantaged children,”
Link said.
Among those donating are
Lloyd’s managing agents, in-
surance companies, brokers,
coverholders, other connected
financial corporations and
Lloyd’s Charities Trust, the
grant-making charity of the
Lloyd’s insurance market.
Richard Mander, a
member of the or-
ganising committee,
added: “Passing
£100,000 is obvi-
ously a very ex-
citing moment for
Live@Lloyd’s, and
it demonstrates the
generosity of those
who work in the London
insurance market.” n
Alexis Burris
Reporter
© Teddy Leung/Shutterstock.com
Partnership: LSM president,
Nick Metcalf, with WaterAid’s
chief executive, Barbara Frost
Live@Lloyd’s hits £100,000
“I wish that the
London market
would wake up
realising the
true potential for
technology rather
than just using
it to refine and
improve their old
manual processes”
© Migel/Shutterstock.com

6. www.insuranceday.com | Friday 5 June 20158
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