NORTH AMER­ICA

RISKSA Magazine - - International News -

Wil­lis Re Launches $400M Rein­sur­ance Fa­cil­ity The rein­sur­ance di­vi­sion of Wil­lis Group Hold­ings plc, Wil­lis Re, have launched their syn­di­cated rein­sur­ance fa­cil­ity in May that pro­vides the broad­est avail­able pro­tec­tion for in­sur­ers against the cat­a­strophic and sys­temic loss ac­cu­mu­la­tions that arise from li­a­bil­ity port­fo­lios. The fa­cil­ity, called PRIMO, is de­signed to re­spond across all casualty and pro­fes­sional lines, and it was ini­tially sup­ported by 20 of the lead­ing global rein­sur­ers. This new in­ter­na­tional fa­cil­ity is an in­dus­try-first for casualty cover in that it pro­vides over USD 400 mil­lion in rein­sur­ance ca­pac­ity glob­ally (based on prea­greed con­tract word­ing). “PRIMO builds on over 25 years of con­tin­u­ous re­search and devel­op­ment since its pre­cur­sor was de­vel­oped in the late 1980s. Wil­lis Re can now of­fer our di­verse and global clients a tried and tested rein­sur­ance so­lu­tion pro­tect­ing against events that im­pact mul­ti­ple ac­ci­dent years, cre­ate quar­ter-on-quar­ter earn­ings pres­sure and rep­re­sent a sig­nif­i­cant un­known in terms of quan­tum from the time the event is dis­cov­ered un­til it be­comes a paid loss,” said John Ca­vanagh, global CEO of Wil­lis Re. An­drew New­man, head of global casualty at Wil­lis Re, re­ported that, com­pared to first-party risks from nat­u­ral and man-made ‘per­ils’, third-party casualty risks have up to this point been con­sid­er­ably un­der­served by prop­erty catas­tro­phe rein­sur­ance mar­kets. “While con­ven­tional clash rein­sur­ance prod­ucts can re­spond well to cer­tain threat sce­nar­ios such as industrial ac­ci­dents or earth­quake threat to work­ers com­pen­sa­tion, they are not de­signed to and do not of­fer broad sys­temic pro­tec­tion. Now, for the first time, mean­ing­ful cat­a­strophic rein­sur­ance pro­tec­tion is avail­able, and af­ford­able, for writ­ers of casualty busi­ness, in­clud­ing all fi­nan­cial and in­jury-based lines,” said New­man. New global in­sur­ance rules face scru­tiny from Repub­li­cans The Fi­nan­cial Sta­bil­ity Board (FSB), com­posed of reg­u­la­tors and cen­tral bankers and set up by the Group of 20 lead­ing economies in 2009 to for­tify the global fi­nan­cial sys­tem, faced crit­i­cism from the Repub­li­cans at a hear­ing in May. Head­ing up the attack is Richard Shelby, chair­man of the Se­nate bank­ing com­mit­tee, who ex­pressed a range of con­cerns about the FSB’s in­flu­ence at the hear­ing. “An in­ter­na­tional reg­u­la­tory regime should not dic­tate how US reg­u­la­tors su­per­vise Amer­i­can or US-based com­pa­nies,” he said. AIG, Pru­den­tial Fi­nan­cial, and MetLife have been deemed so crit­i­cally im­por­tant to the fi­nan­cial sys­tem that the FSB de­cided the three US in­sur­ers must be sub­ject to tighter global reg­u­la­tion and po­ten­tially higher cap­i­tal re­quire­ments. Shelby, whose sen­ti­ments are ap­par­ently in line with a long­stand­ing (Repub­li­can) scep­ti­cism to­ward in­ter­na­tional fo­rums, be­moaned the de­ci­sions made by the FSB, based in Basel, Switzer­land, sug­gest­ing it has been adopted ‘with what ap­pears to be lit­tle in­de­pen­dent eval­u­a­tion’ by the Fi­nan­cial Sta­bil­ity Over­sight Coun­cil (the US’s um­brella group of reg­u­la­tors) de­spite them be­ing of the same opin­ion call­ing the three in­sur­ers ‘sys­tem­at­i­cally im­por­tant’. Shelby, who ac­cused the FSB of be­ing an ‘un­ac­count­able in­ter­na­tional body,’ said the FSB should not dic­tate how US reg­u­la­tors su­per­vise Amer­i­can or US-based com­pa­nies. The FSB re­lies on the soft diplo­macy of its mem­bers to en­sure pro­pos­als are im­ple­mented by each coun­try and they have no power to en­force rec­om­men­da­tions.

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