News review | September 24 2018

Top-three broker Marsh & McLennan Companies it to acquire Jardine Lloyd Thompson Group plc. Total cash consideration equates to $5.6 billion. "The acquisition of Jardine Lloyd Thompson creates a compelling value proposition for our clients, our colleagues and our shareholders. The complementary fit between our companies creates a platform to deliver exceptional service to clients and opportunities for our colleagues," said Dan Glaser, president and CEO of MMC.
Marsh & McLennan

Tokio Marine Kiln (TMK) and UPC Insurance have together launched a new Florida-based property and casualty insurance holding company, which has received an “A-“ financial strength rating from AM Best. Journey Insurance Company is 66.7% owned by UPC and 33.3% by RJ Kiln, the Lloyd's subsidiary of TMK. Its initial focus will be on offering homeowners and commercial residential property insurance in Florida, Texas and South Carolina.
United Insurance Holdings Corp

Markel Catco has bought back 1 million of recently issued class C shares in its London-listed Reinsurance Opportunities Fund at a price of $0.98 per share, reducing the volume of outstanding C shares by 0.2 percent. The company issued 546.4 million C shares at the end of 2017, raising over $540m of new capital for the listed vehicle after last year’s extensive losses.
Trading Risk

Lloyd’s has reported a modest increase in premiums to £19.3 billion, driven by improvements in pricing and growth in some profitable lines, for the first half of 2018. However pre-tax profits were impacted by a reduced investment return of £0.2 billion (June 2017: £1 billion). Outgoing CEO Inga Beale, said: “These results and return to profit demonstrate the strength of the Lloyd’s market following one of the costliest years for natural catastrophes in the past decade."
Lloyd's of London

The United Nations World Food Programme (WFP) has signed its first climate risk insurance policy with the Africa Union’s African Risk Capacity (ARC). The policy is called ARC Replica, a new type of cover offered by ARC which has been providing extreme weather insurance since 2014. The initiative is being funded by the German Government and the first countries to benefit from WFP’s are Mauritania, followed shortly by Mali. Pay-outs can be triggered if certain indices measuring climatic variables including low rainfall or reduced vegetation are confirmed by satellite data.
UN World Food Programme

The logic of investing in reinsurance as an asset class still holds, regardless of whether global warming is impacting natural catastrophe losses, according to Larry Swedroe, director of research for The BAM Alliance. "You should assume this information is already embedded in the pricing of such risks. Thus, if the market is pricing for greater-than-historical losses, losses to investors in reinsurance products will only occur if the losses are even greater than already expected," he wrote in an article.
ETF.com

Catastrophe risk modelling firm AIR Worldwide estimates that industry insured losses resulting from Hurricane Florence’s winds and storm surge will range from $1.7 billion to $4.6 billion. These estimates do not include the impact of the ongoing flooding from Hurricane Florence’s unprecedented precipitation.
AIR Worldwide

Posted: Monday, September 24th, 2018