The state of the product recall market – a London perspective

The state of the product recall market – a London perspective

The product recall market is in a state of flux and for brokers, insurers and clients alike, there is uncertainty about the future. Rob Marshall, head of our Product Recall team, sums up the current  state of the product recall market, examining the causes and consequences of market fluctuations. 

The product recall market in brief

The rise of domestic markets in the US entering the class appears to have plateaued, with soft rates, widening coverage and severity of claims all taking their toll. The wider casualty space is suffering with widespread reports of Insurer losses, putting pressure on Recall underwriters to increase rates in line with their casualty counterparts. We are seeing a number of non-renewals from US Insurers, causing headaches for agents to find suitable alternatives for distressed clients. One consequence is the inflation of self-insured retentions by insurers in many areas, more akin to the catastrophic class of insurance it was intended to be.

What is causing this volatility?

US food companies still account for the majority of buyers in the recall market, although rates are going up in this sector more than in any other segment. FDA pressure, rapid improvements in testing procedures and brand damage in the media have caused an increase in both frequency and severity in claims activity.

How are insurers responding to these challenges?

The most successful recall insurers appear to be those who have diversified their portfolios from solely writing US food clients, in order to balance their books. We are now seeing London underwriters actively seeking out alternative industries including automotive, aviation, cosmetics, medical devices, and the technology sector to name a few.

Line sizes are shrinking, with many insurers preferring the quota-share model, the benefits being one seamless policy and a single point of contact for claims handling. This can result in the need for extra markets on a renewal or layer(s), making a spread of relationships with different Insurers crucial at this time in the market cycle. This coincides with buyers becoming more educated and comfortable with the various recall product(s) and opting for higher limits for true balance sheet protection.

Insurers are also looking to diversify their geographical spread of risk. Clients worldwide are becoming more aware of the recall products and their huge benefits in the event of a crisis and more countries are now exploring these insurance solutions. RKH have had recent success placing business from Europe, Australasia, South America and the UK, with further interest coming from Africa, South East Asia and Scandinavia to name a few. The majority of buyers are still from North America, however this is changing just like the market is.

 Positive outlook for the London market

London is seeing new capacity enter for the first time in a few years. HDI Global Specialty began writing recall in September with recall veteran David Palmer at the helm, and the market has already seen the impact of a new hungry entrant with a huge balance sheet attempting to obtain market share – their minimum sales threshold of USD 100m+ underlines the space in which they are looking to compete. Another new entrant in November is Perigon, an MGA backed by Bermudan insurer Fidellis, and led by the experienced Ian Bailey who joins from Hiscox. This will again present opportunities for new and existing buyers to explore options previously unavailable to them.

What will the next 12 months look like?

The US casualty market looks like it is in for a tough period over the next 12 months and beyond, with premiums going up. The London marketplace is primed and ready to assist those clients who are unhappy with their renewal pricing, or who are looking for a fresh solution to their product recall needs.

 

For further details, please get in touch with the Product Recall team.

Hyperion announces merger of RKH Specialty and Howden

Hyperion Insurance Group 2017 Full Year Results 1

Combined company will deliver seamless access to the Group’s talent for clients and will bring together Howden’s international retail network and RKH’s best-in-class specialty and reinsurance expertise

Hyperion Insurance Group, the largest international insurance group with employee ownership at its heart, today announced that its retail and specialist broking businesses, Howden and RKH will combine under one management team, effective 1 October 2019 led by José Manuel González as CEO. José Manuel will move to London to lead the combined broking group.

In the UK, and effective 1 October 2019, Andy Bragoli, in addition to his role as CEO of RKH, will lead a newly formed UK Broking Executive Committee, which will sit above both RKH and Howden UK. Chris Evans, in addition to his role as CEO Howden UK, will be his deputy. Barnaby Rugge-Price, CEO of Hyperion X, will chair the committee, supported by Paul Redgate as deputy. Elliot Richardson will continue to lead Reinsurance.

Paul Redgate will also work with Mark Wood, following the completion of Mark’s contractual obligations to Marsh/JLT, to lead the Broking Group’s Global Practices. The development of these Practices will drive the delivery of specialty expertise through the Group’s international offices and network.

Mark Wood and Chris Evans will both join Hyperion’s Group Executive Committee. Over a period of 12 months, RKH will transition to the Howden Specialty and Reinsurance brands.

At the same time and reflecting the increased breadth and depth of the Group and the combined management bench strength, the following regional broking heads will be in place effective 1 October 2019:

  • Andy Bragoli will lead the UK;
  • Goh Chye Huat will continue to lead our Asian operations;
  • Louise Cable-Alexander will lead Northern Europe;
  • Sonia Caamaño and Pablo Bores will lead Latin America;
  • Danny Sever will lead our Mediterranean operations; and
  • Atinc Yilmaz will continue to lead our operations in Turkey, Middle East and Africa.

David Howden, CEO, Hyperion Insurance Group commented: “In 25 years we have built a Group of global scale with employee ownership at its heart. Hyperion has more than doubled in size since RKH became a part of the Group. We have over 5,000 employees, operating out of more than 200 offices in 36 territories, managing circa $7bn GWP on behalf of clients. We have also launched our Howden One network which, when combined with our broking offices, now means over 15,000 people service clients in over 90 territories and manage around $23bn of premium.

The combined broking group will be the leading independent, international specialty business. This offers a unique proposition to our US broker partners. We are the only broker with an international retail network and the necessary expertise to service our US broker partners’ clients, not competing with them in their own territory.

As we celebrate 25 years of independence, I believe the future belongs to those companies who put their clients and employees first. This merger provides the best possible international platform for our people to deliver results for our clients. Our business has always been about growing talent, and José Manuel perfectly embodies that entrepreneurial spirit and diverse nature of our talent.”

José Manuel González, CEO, Howden Broking Group added: “Combining our two businesses will create a global, cohesive and efficient platform. It will present, with clarity and simplicity, a real alternative and independent solution for clients, insurers and talent. It will deliver on our combined bench strength, providing the best team to our clients. I am truly honoured and excited to be able to lead a group of such talented people.”

Andy Bragoli, CEO, RKH Specialty said: “We are always looking to advance our client proposition; our clients expect us to stay ahead in competitive environments. This is simply the next step for us. Our commitment to all our clients, first and foremost, is to provide them with both specialist expertise and global servicing capabilities through our own Howden network. Our commitment not to be a US retail broker remains unchanged and, in this, we are truly unique.”

Record-breaking RKH Specialty broker smashes Atlantic rowing challenge

Record-breaking RKH Specialty broker smashes Atlantic rowing challenge

 

Alex Simpson, (fittingly!) a broker in our marine team, and his friend Jamie Gordon have rowed across the Atlantic in a record-breaking time of 37 days, 17 hours and 42 minutes and raising over £170,000 for Hyperion’s Million for a Million charity initiative.

Not only do they now hold the record of fastest two-man Atlantic crossing but Alex also gains the crown of being the youngest person to row across three oceans at 27 years old.

Alex and Jamie began their epic journey in Gran Canaria, covering 4,800km to reach their final destination in Barbados. With an ocean so vast and without a support boat, Alex and Jamie faced many logistical challenges from maintaining their boat to balancing their increased nutritional needs with minimising the amount of weight carried to planning a route avoiding major shipping lanes.

If that wasn’t enough, the pair had to endure extreme mental and physical exhaustion, rowing for 24 hours a day on a two hours on/ two hours off basis, tackling 12 foot waves, relentless head winds and surviving white-knuckle encounters with commercial ships.

On arrival in Barbados, Alex said: “Jamie and I never hesitated in our
determination and self-belief that together we would break this challenging record.”

Dominic Collins, Chairman, Hyperion added: “I am delighted that Alex and Jamie have landed safely and succeeded in spite of difficult weather conditions in breaking the record. The physical and mental strength demonstrated by Alex and Jamie during this challenge has been truly inspirational and we should be justly proud of them for their outstanding achievement.

We look forward to welcoming Alex back to London and hope he’s enjoying a well-deserved break in sunny Barbados!

You can read more about Alex and Jamie’s journey here.

 

 

 

 


Stronger Marine Cargo, Hull and Liabilities leadership in APAC

Stronger Marine Cargo, Hull and Liabilities leadership in APAC 1

 RKH Specialty today announced the appointment of Julian Franzman as Head of Marine Cargo, Hull and Liabilities for Asia Pacific. He will be based in Singapore, once his contractual obligations have been discharged.

Julian has over 30 years’ marine insurance and reinsurance experience and since 1997, has worked across the Asia-Pacific region. Franzman joins RKH Specialty from JLT RE Asia Pacific, where he was Managing Director of Marine and Aviation.

Our business in the region is currently focused around our property, power, energy, construction and financial risks’ expertise in Singapore. Julian’s appointment will bring together RKH Specialty in Singapore and RKH’s specialist Hong Kong-based marine broker FP Marine to grow the marine operation in Asia Pacific.

Commenting on the appointment, Stuart Beatty, CEO of RKH Specialty Asia Pacific, said: “We are looking forward to welcoming Julian. The skills, knowledge and experience he brings with him adds to our existing expertise and will accelerate our plans to develop our offering, and not only in Asia Pacific. As our business around the world is organised around product lines, rather than geographical areas, we always access our colleagues’ expertise and markets around the world to ensure we deliver our clients the best that global markets have to offer. The cross-border collaboration it encourages creates innovation in terms of product and service delivery.”

RKH CEO and Chairman to lead Hyperion Group’s newest business, Hyperion X

RKH CEO and Chairman to lead Hyperion Group’s newest business, Hyperion X

In January 2019, RKH CEO Barnaby Rugge-Price and RKH Chairman Elliot Richardson will lead Hyperion X, Hyperion Group’s newest business which will focus on data analytics and digital platform delivery.

Andy Bragoli will take over as CEO, with Rugge-Price taking on the role of Chairman for RKH and  Richardson continuing to lead RKH’s reinsurance business.  Bragoli is currently Deputy CEO of RKH and has led RKH’s property and casualty business since its acquisition by Hyperion in 2015. He has been with the group since 1997.

David Howden commented, “I am delighted that both Hyperion X and RKH will be in such safe, experienced hands. Hyperion X is a clear demonstration of our continued commitment to delivering the best solutions for our clients in the most cost-effective way. As a Group, we have always embraced change. For us to continue as independent leaders in the markets in which we operate, investment in technology and data is critical. By combining our expertise in international insurance markets with improved business insights from data, we aim to enhance the products and services that we offer to our clients, to reduce the unacceptably high cost of doing business and to open up new markets.”

Barnaby Rugge-Price commented: “There has been growing pressure on the cost of delivery across our industry which represents a great threat to us all but, at the same time, a great opportunity for those who can grasp it. I hope that Elliot’s and my experience across the market spectrum will combine with our growing in-house analytics and technology capabilities to deliver a series of products and market platforms that address the needs of clients and markets. I believe the evolution of our industry’s proposition is the most important challenge we face, so when David Howden asked me to lead Hyperion X, I eagerly accepted it as an opportunity to devote my time and energy to a critically important project.”

 

Product lines, not border lines

Product lines, not border lines

Risks don’t respect international boundaries and because of this, we have built our offering around product lines rather than regions, giving us the power to create bespoke solutions that put global risks into local context.

RKH Specialty’s global network is your passport to the world’s insurance markets. Working closely with our London headquarters, each office is home to expert brokers who can help you get the get best cover from the most suitable market, wherever that may be.

Working with our regional experts means no longer having to choose between in-country knowledge and cross-border coverage.

Find out more

New Hire to Reinforce RKH’s Renewables Growth

New Hire to Reinforce RKH's Renewables Growth 1

RKH Specialty today announced the appointment of Deborah Duss as a Divisional Director in its Marine, Energy and Construction practice.

Deborah joins the company from Swiss Re, where she was senior underwriter in the Renewables Product Hub, a multi-line role that required an understanding of all aspects of risk at every stage of construction, operation or decommissioning. Deborah has over 15 years’ experience at Swiss Re focusing primarily on independent power producers and utilities clients worldwide.

The new role in RKH’s Power and Renewables team allows Deborah to use her deep sector knowledge and experience to develop new opportunities, products and services whilst strengthening and supporting RKH’s fast-growing Renewables practice.

Paul Redgate, the Managing Director of Marine, Energy & Construction commented on the appointment: “Renewables is one of RKH’s fastest growing areas, as the adoption of large amounts of variable renewable energy poses challenges to the management and operation of energy systems. We already provide solutions to clients at every stage of the process and in every aspect of operation and Deborah’s experience and perspective will add a new dimension to our offering, as we look to develop new products and services.”

Welcome to Stuart Beatty

Welcome to Stuart Beatty

Stuart has over 30 years’ experience in the re/insurance industry, and has spent 10 years working in Singapore for Aon Benfield and, most recently, JLT, where he was also Asia-Pacific CEO before joining RKH.

RKH Specialty’s business in Asia-Pacific mostly involves covering property, power, energy, construction, and financial risks from our Singapore office and our Hong Kong-based marine specialist brokerage, FP Marine.

“Local and regional markets continue to mature across the globe and clients are increasingly choosing to buy in those markets,” said Barnaby Rugge-Price, Chief Executive Officer of RKH Specialty. “We intend to provide clients with the widest and clearest picture of global markets, helping them to identify their best underwriting partners, wherever they may be. With Stuart’s skills and experience we aim to build on the success of RKH and FP Marine in the region. His expertise will help us capitalise on opportunities throughout the Asia-Pacific region, focusing our initial efforts on working with colleagues to deliver products and services that are most in demand.”

Stuart commented, “Over the last five years, the region has seen a significant increase in specialty lines capacity, authority and talent and this provides an excellent platform on which to build market-leading capabilities for RKH Specialty. My role will be to help demonstrate and deliver our expertise across a full range of specialties to a wider client base.”

Hyperion Insurance Group 2017 Full Year Results

Hyperion Insurance Group

FINANCIAL HIGHLIGHTS

Financial performance reflects continued positive momentum driven by significant ongoing investment in people, operations and technology, and despite challenging market conditions.

On a bank reported basis:

  • Revenue grew from £444m in 2016 to £535m in 2017, an increase of 20%.
  • EBITDA, the Group’s preferred measure of profitability, increased by 24% from £123m to £152m in 2017.
  • The EBITDA margin was 28% in 2017 (28% in 2016).
  • Organic revenue growth was 8% (2016: 8%), which the Board regards as a strong result in a highly competitive operating environment.

OPERATIONAL HIGHLIGHTS

In 2017 Hyperion launched Howden One, its international retail broking network, enabling the Group to provide global solutions for its retail clients. This network brings together Howden’s own offices and those of trusted, like-minded partner brokers, and spans 75 territories with over 5,000 insurance professionals who operate under one set of standards.

RKH built out its international infrastructure to deliver specialty expertise and product knowledge from the world’s key insurance markets and provide world-class solutions to its international clients. As part of this reorganisation, marine broking specialist, FP Marine, and wholesale broker, Howden Miami, have transferred into RKH Specialty.

DUAL’s regional management board, formed at the beginning of the financial year, has brought the management of each regional business closer to their carriers, brokers and clients. Increased investment in DUAL’s operational resilience and scalability has also created a strong platform for future growth.

Strategic expansion

Hyperion continues to seek strategic partnerships, to make acquisitions, and to launch operations where likeminded businesses and people bring specialist expertise to the Group, deliver geographic reach in key territories, and make a positive difference to clients.

In addition to increasing its shareholding in a number of partly-owned subsidiaries, the Group made a series of focused acquisitions and launched new operations strengthening its product and distribution capabilities both geographically and in terms of specialist market positions.

  • In July 2017 the Group expanded its Iberoamerican operations with the acquisition of automotive, ports and logistics specialist Bergé y Asociados Correduría de Seguros in Spain, bringing niche expertise across Howden’s Spanish and Portuguese speaking markets.
  • In July 2017 the Group expanded its retail broking operations in Asia with the acquisition of Singapore-headquartered Sterling Knight, strengthening existing specie capabilities and combining employee benefits businesses to create a strong proposition in the region.
  • In August 2017 the Group expanded its retail broking operations in the United Arab Emirates with the launch of Howden Abu Dhabi.

In addition to the acquisitions that took place during the 2017 financial year, in November 2017 Hyperion acquired a majority stake in Omani broker New Generation Insurance Services LLC and, in December 2017, Howden signed an agreement to acquire a majority interest in top five Mexican broker, Grupo Ordás.

David Howden, Chief Executive Officer, commented: “2017 was another milestone year for us as we passed the £500m revenue mark and launched our international retail broking network, Howden One. The impressive results delivered by each of our businesses contributed to the Group once again achieving market-leading organic growth and a strong profit margin, both critical factors in our long-term success.

Our employee-ownership model continues to attract and retain talented individuals, and to sustain the entrepreneurial culture, that make our group unique. Following the completion of our fourth employee share offer, more than 20% of employees now own shares in Hyperion and its subsidiaries.

The value of our business was reinforced by our ability to attract another leading investment partner in Caisse de dépôt et placement du Québec (CDPQ). CDPQ’s investment, and additional funds from our debt refinancing, will provide us with significant additional capital to fund future growth.

In an ever-changing market, we recognise that we must be at the forefront of innovation using data and technology to enable the efficient and effective distribution of the right products to our clients at the right price. Our investment in technology-led initiatives will be a key focus in the coming year.”

Dominic Collins, Chairman, said: “The combined efforts of all of our businesses have resulted in another year of strong financial performance. I extend my sincere thanks to each of the 3,800 employees involved in this achievement.

We enter 2018 with a new high-quality, long-term investor in CDPQ to join us, alongside General Atlantic, on our next phase of growth.”

New signing

New signing

Manchester City FC and New York City FC today announced Hyperion as its latest official regional partner.

Hyperion becomes an Official Regional Partner of Manchester City in the United Kingdom and the United Arab Emirates as well as an Official Regional Partner of Major League Soccer team New York City.

Damian Willoughby, senior vice-president for partnerships at City Football Group, said:

“Having been a client of Hyperion’s for a number of years we have been very impressed by their unique approach to delivering first-class service to their clients and we look forward to working with them throughout our partnership.

“City Football Group and Hyperion both have unique growth and success stories that have been built on a spirit of striving for excellence, an unwavering focus on the needs of our supporters and clients, and a commitment to creating a globally connected, but locally relevant, group structure.”

Hyperion CEO, David Howden commented:

“We are delighted to be an official partner of Manchester City and New York City FC. The sports and entertainment market is an important, and growing, focus for us across the Group. To be appointed as a partner by a globally recognised sports brand is a fantastic endorsement of our expertise; I am excited to work with the two clubs to explore the great opportunities this partnership will deliver.”