They saw the opportunity to give a little bit extra to their clients (and of course make a bit more money on the side) by offering their own experts to medium to small clients for all their Solvency II based needs.
However, it seems there may have been a little bit of a miscommunication somewhere along the line. Whilst we're in silly season and everyone has gone to the beach for some pre-Monte Carlo sun, Reinsurance Towers has been busy talking to those same medium to small reinsurance buyers about their current concerns and whilst Solvency II ranks near the top of their lists, very few are looking for help from their reinsurers.
It would seem that these same large reinsurers may have ruffled a few feathers and set off a pride epidemic amongst buyers who are now saying Solvency II is something they would like to cope with on their own thank you very much.
"Yes, Solvency II is a big issue but we don't necessarily want to talk to our reinsurers on this as its something we want to be responsible for ourselves," said one buyer.
From the same buyers there was also many whines that reinsurers treat their clients like commodities. "We want them to value us rather than view us as a commodity," said one buyer. "We want them to spend time with us and take notice of what we do differently," added another.
So, maybe it's time for those large reinsurers to stop pumping the money in and start spending resources on getting to know their clients at bit better...
Reinsurance Towers are off to Cornwall to get in some serious beach time now so enjoy the rest of your week!
]]>So what is the attraction? Solvency II? The tax regime?
We at Reinsurance Towers think that's just not fun enough so here are our top reasons that we think the reinsurers just aren't telling you about:
1) The Alps. Good to look at but more importantly, just the place to unwind with some skiing after a hard January renewals season
2) Hornussen. A cross between baseball and golf. It's a bit like trying to catch golf balls flying through the air at 300kph
3) The schnapps. Nom nom nom
4) The cool mountain air. With the UK and eastern States in the middle of a sweltering heat wave these past few weeks it sounds good to us
5) Martina Hingis and Roger Federer - not too hard on the eye and apparently pretty good at tennis too
6) Alpine horns and yodeling, much more fun than you'd think - yodelayeeeooo
For those of us without a yacht or summer residence to escape to there has still been plenty to entertain us with the ongoing Deepwater Horizon saga - the lawyers are salivating already.
The reinsurance forums on LinkedIn have lit up with a great number of comments as the industry debates what the overall effect of the disaster will be with an overall consensus that we may well see a shift in the way that captive insurers and reinsurers operate as fully risk retained captives may become very unfashionable - particularly in the energy world.
There's also the consensus that the legal battles will run on for years, especially the class actions, so the real winner - as per usual - will be the lawyers.
On a lighter note blog-re has been nominated as a Top 50 Insurance Law Blog through the LexisNexis Law Community. If you are a legal eagle and enjoy our blog please give us a vote here http://bit.ly/beDC27
Have a good week
But with the transition and creation of the new prudential authority what will really change for the UK (re)insurance sector?
To be honest, we at Reinsurance Towers aren't exactly sure yet and I'm not entirely sure that the Tories or the Bank of England have a clue at the moment. But, from what we can see so far, we at Reinsurance Towers currently predict one of the following:
1. Taxes will rise, as will your regulatory bills to pay for it all. Some more insurers and execs will follow Brit's example and jump ship for less tax heavy domiciles.
2. The Prudential Regulatory Authority (PRA), will start off with a lot of purpose interfering in issues both large and small but will soon become more than a little jaded as, let's face it, that it's actually pretty hard to get anything done and will end up doing what everyone seems to expect at present and just concentrate on the banks.
3. The Financial Policy will produce enough hot air for their building to achieve near lift off but not actually get anything done.
4. The new Consumer Protection and Markets Authority will throw its weight around from day one throwing around fines and other punishments at random in an attempt to show that it is making a difference. When that doesn't work for Joe Public they will decide to completely rewrite the conduct of business rules and insurers will end up caught up in having to budget for redesigning products and systems (again)
5. Due to there being so many regulators around fighting for their existence, the PRA will all forget about Solvency II until some kindly (re)insurance exec throws their toy out of the pram in a large enough fashion to remind the regulator that insurers deserve a little attention
6. The only people who will really benefit from the change are sign makers and of course, consultants
7. Repeat after us - "we are not a bank" - that's a phrase you are going to be using a lot people
But of course, it's not like us to be pessimistic at all...
Other than the shameless self-promotion our industry excells in [here is a message for a certain broker - you entered your email address for the prize draw after having voted for yourself in the third person so we of course we can see that...nice try!] we have seen voting for a wide range of individuals and groups with a surprising number of surprising names amongst the nominees.
For those of you who haven't nominated anyone yet there is still time. Just click on, or copy and paste, the link below:
http://www.surveymonkey.com/s/DZ5QRGL
Have a good week
The social media landscape has changed a lot in the (re)insurance industry since I first put my toe in the water two years ago. Several companies have blogs, and there are independent bloggers (like me) popping up all over the place. There are LinkedIn groups with thousands of members, and slapping a "#reinsurance" hashtag on a tweet will get you in front of a pretty big audience. It sounds like the industry has figured out social media ... and this is the same industry that made me recite my answer to the "What's a blog?" question endlessly in 2008 and 2009.
So, what's missing?
We're generally doing social media in silos. There are some small pockets of dialogue emerging, but social media has generally been a push. This can work if the content is unique, but using Twitter or a blog as yet another channel for a press release does nothing but create extra work for you.
Social media has been occurring in silos in the reinsurance business. The early efforts - and yes, we're still early in the game - have been almost solipsistic. We've generally blogged, tweeted and shared as though the recipient's irrelevant. We haven't been talking to each other enough. If this continues, the victor will be determined by brute force of content volume and promotion, which only creates noise.
Fortunately, there's plenty you can do to help. Here are five ways you can help move the reinsurance industry take social media out of the silos:
1. Retweet, share on Facebook or comment on a blog post every day. Take some form of action that enhances an existing piece of social media content and puts it in front of more people.
2. Try something new every once in a while. Set up an RSS reader, subscribe to a blog or pitch guest post. Get out of your comfort zone.
3. Ask a question. Join a LinkedIn group and start a discussion to learn more about an industry (or social media) situation that's been on your mind.
4. Talk. Recommend a blog, Facebook fan page or LinkedIn group to a colleague or client. If you spread the word, everyone wins.
5. Get started. Help your company launch its own social media presence. Support an initiative to move into this space.
Tom Johansmeyer blogs about social media and the (re)insurance industry at http://reinsuranceblogger.blogspot.com. Before that, he was a key player in launching one of the first corporate blogs in the industry. Recreationally, Tom blogs about cigars on his new blog, http://cigarreader.com and covers travel for Gadling.com and the art market for Luxist.com. He's located in New York, as you can probably tell from his writing style.
]]>On the surface, surely a hung parliament is a good thing - doesn't that mean that a broader spectrum of voters will have their views represented in a coalition government?
Sadly nothing is ever quite so simple as it seems, with the reality being closer to a nightmare. With so much uncertainty surrounding the results and a whole host of unanswered questions no-one seems to know what will happen next with the potential that Westminster could become paralysed as a result.
As it stands the UK is about to enter a confusing period of political, social and cultural uncertainty.
A hung parliament is the worst possible result for the City with the consequences of the election remaining unclear for the near future. David Cameron may be throwing his weight around as the Conservatives are now the largest party but he has failed to win that all important majority and Gordon Brown has dug himself in with talks of a potential coalition deal with the Liberal Democrats.
And do I really need to say anything about Reinsurance Towers' opinions of George Osborne and how well he would perform as Chancellor? I'll leave that to your imagination...
The timing for the financial sector hasn't really helped matters with global markets taking a battering overnight as the Dow Jones suffered its biggest ever intraday point drop - 998.5 points - as a suspected trading glitch and fears of a new credit crunch in Europe threw markets into disarray.
The pound also slumped this morning on the news of the hung parliament outcome indicating what many feared would result from the uncertainty. If no agreement is reached between the parties we could even see a second early election.
With hundreds of voters having been turned away from polling stations, due to long queues and a shortage of voting slips, there's the risk that we will see some legal challenges turning the election into frankly a bit of a joke but best not to get me started on the need for the reform of the UK political system.
So what next for the UK and its financial sector? With so many questions still left to answer, who knows?
]]>When I found the new Willis blog, http://www.clientsbeforecontingents.com/, on LinkedIn last week, I rushed over to take a look. Maybe it's because I'm a social media nerd ... or it's the fact that I can't shake my interest in how insurance and reinsurance brokers are marketing themselves. Either way, I clicked over immediately to see what was going on. I'm still trying to decide how I feel about it.
In all honesty, I noticed the flaws immediately, but I'll get to that in a bit. I'd rather focus on the positive for now. I was excited to see another company in our industry take the blogging plunge. There are far too few corporate blogger in the re/insurance space, though more than when I got started (thankfully). Most tend to be from smaller firms, and while I'm thrilled to see them engaged (I'm now one of the little guys, in fact), there's a clear need for the big guys to launch blogs and use them consistently. With the launch of Willis' http://www.clientsbeforecontingents.com/, I saw the industry take a step in the right direction.
Back in February, I wrote on my blog that I figured Willis would be next (in some form), especially given the property-catastrophe price index it announced. I guess I was right, but I never expected the company's foray into social media to come in the form of a single-issue blog. Contingent commissions may be a hot issue right now, but it has a limited life. So, Willis is sacrificing a certain amount of longevity. I'd have rather seen the company launch a Willis blog and build in contingent commissions as a category or tag and highlight it on the home page. Coming up with regular, insightful content on a single issue is going to turn into a pain fast, making the blog more labor than investment.
There's a hidden problem, too. The greatest value I've seen in running a corporate blog for a major firm is the diversity of content available. The variety makes it easier to link back to previous stories as a way to cut through all the other stuff - it adds value to the experience. A single-issue blog leaves little opportunity for linking back, because all the posts deal with the same topic. This means that traffic will be lower (in pageviews, if not unique visitors), translating to less brand visibility and reinforcement per visitor.
It's easy to be critical, and by delving into the details, I risk obscuring the most important lesson from Clients Before Commissions - and it's a positive one. Someone at Willis decided that the way to push its message on contingent commissions was through a corporate blog. This is a giant leap forward for our industry. Willis could have used a press release, pitch letters and interviews or a white paper. Instead, it went with social media. Two years ago, when I was taking my first steps into reinsurance blogging, it's unlikely that anyone would have come up with the idea of using a blog to tackle this issue, let alone actually get it off the ground. Last week, we saw it in action.
I hope that the next step for Willis is to grow its social media footprint, as I hope the rest of the re/insurance industry will do. Even companies in direct competition should encourage the overall evolution of blogging, LinkedIn communication and even voracious tweeting. The maturity of social media will benefit all of us, and it's the content, ultimately, that will decide the winners - not merely the boldness to bet on the untested.
Tom Johansmeyer blogs about social media and the (re)insurance industry at http://reinsuranceblogger.blogspot.com. Before that, he was a key player in launching one of the first corporate blogs in the industry. Tom also blogs about travel for Gadling [http://www.gadling.com/bloggers/tom-johansmeyer] and cigars and the art market for Luxist [http://www.luxist.com/bloggers/tom-johansmeyer]. He's located in New York, as you can probably tell from his writing style.
]]>If volcanic ash didn't disrupt the steady increase of the Dow Jones Industrial Average (DJIA), the 'train' well and truly halted after the SEC accused arch-nemesis Goldman Sachs of fraud today.
At the time of writing, the DJIA was in nosebleed form, off over 100 points and descending rapidly (note- airline stocks weren't doing so well either!), and S&P was off nearly 1.5%. Not nice reading if you're an investor.
According to the SEC, Goldman created a subprime fund called Abacus, which was bet against by the bank itself as well as major hedge fund Paulson (no connection to former Treasury Secretary and former GS CEO Hank Paulson, we might add) to fail. The investment bank would make money if it fell in value.
And being sub-prime, that's exactly what happened.
Reading the SEC accusation, it's pretty hard not to get angry about this sort of thing.
If you're an insurer, it's pretty hard not to worry, either.
If Goldman takes this to court, the power of the SEC will probably win the case. Despite screaming from investors and the mainstream media Goldman won't want this to happen - they'll probably settle, and have to give back investors all of their original investment. And they may well have to hand back their winnings, too. If you think punitive damages were bad for the Greenberg family when Elliot Spitzer got to them, this is going to be worse.
What are the ramifications for the insurance industry?
According to one US underwriter, this might cause a wave of worry in the insurance industry. Think House of Cards, except worse. You can forseeably see every company with a subprime book to get asked questions by the SEC- and investors. When one group of investors manages to successfully sue, then suddenly you've got a D&O and E&O tidal wave.
We'll have more discussions on the legal ramifications next week for you. Keep reading...
]]>On Monday the UK Government told the country that on May 6, it was going to be having a General Election.
For some of the country, it's about asking who they actually want to guide this country through the recession/recovery, for others, it's about who they are going to choose out of the three evils standing before them, wanting their vote.
As usual, Reinsurance Towers took the approach of speaking to an underwriter about the oncoming election.
"Do you really want to put the Labour Government back in? Not only did they unilaterally fail to eliminate boom and bust, but they sold our gold at the wrong price. Why should we trust them again? And then there's the waste. 40% of this country's GDP is made up of civil servants, which means eliminating waste should be easy. Just fire anyone with the name "coordinator...The unfortunate fact about that is that it'll be like cockroaches. One dies, 400 more appear. Gordon Brown talks about green shoots of recovery, but everyone knows that the manure on top - and coming out of the politicians' mouths- stinks to high heaven. And one other thing - as someone who earns well over six figures, I just can't wait to be taxed 50%. Oh, and my house is expensive too. Thanks, Gordon!"
How about voting Conservative, we ask, to the cheer of an assembled few listening in on this dynamic rampage from 'Joe I don't Know'.
"Love David Cameron. Knew some chaps who went to Eton with him. He loved talking about change in his opening speech, but guess who the other person who talked about change was but doesn't seem to be getting a lot done. Barack Obama! Seriously though, he's still going to charge us well-earning chaps 50%, and does he really think that cutting the National Insurance Bill is going to help me? And how are they going to start making moves to scythe through the bureaucracy. The other thing that winds me up about him is that we City types meet these type of people every day - they are called our senior managers. They are the type of people who make speeches in December about "a great year" and a month later he's giving out severance cheques. Wouldn't trust him as far as I could kick him. And that George Osbourne chap. Chancellor? Really?"
Then how about the Liberal Democrats? "Waste of Vote!" chants the audience, which is getting bigger by the second.
"I like Nick Clegg, I really do. Although his surname makes him sound like someone Fagin would hire in Oliver Twist, he's a rather straight-talking chap. I really appreciated his originality when saying how unfair it was that a rich banker pays less tax than his cleaner. I've never heard it before. But people laugh and say: "Do nothing, think nothing, vote Liberal," and maybe that's a little harsh. They don't have a prayer of winning, but I like the Vince Cable chap. Can't he become Chancellor whoever gets in?? He might actually do some good. Unfortunately, though, you get the feeling that under the Lib Dems, the income tax would go from 50% to 60% in two twists of a lamb's tail, and we'd all be on the first flight to Zurich (a far nicer place than Zurich, I might add!)".
At that, the crowd disperses. We at Reinsurance Towers are none the wiser about who our friend will vote for. Then again, most of the UK aren't any the wiser about they should vote for, either.
We at Reinsurance Towers would like to get your opinions about the political issues on the table. If you could spare a couple of minutes to answer a couple of questions (anonymously of course) please follow the link below
http://www.surveymonkey.com/s/KPQCLP8
(Now time for a little disclaimer to keep the boss happy - these quotes do not represent the views of Reinsurance Magazine or Incisive Media)
Willis were first out of the gate this month, brining out their report on April renewals before April had even begun and the report was certainly a gloomy read.
According to the report, reinsurers will be picking up most of the tab for the $16bn catastrophes that have hit the world in Q1 - and their results will make for a nervous read - and according to the broker as soon as the reinsurers begin to recover they will be hit by a more-active-than-usual hurricane season.
Added to this Willis Re adds exposure to sovereign debt, less plentiful reserve releases and inadequate pricing to reinsurers' woes.
However, we all know that Willis have been having a hard 18 months with rumors of more redundancies in the air in their UK GI divisions so could all the negativity be a reflection of their current perspective on the insurance world?
Will some reinsurers begin to crumble under pressure as all the negativity in the report could lead some to believe? We at Reinsurance Towers think not but we will certainly be putting Q1 results under a lot of scrutiny this year
]]>We at Reinsurance Towers are - as usual - feeling particularly happy with ourselves.
While some of us were busy sunning themselves at the World Insurance Forum and our fabulous new Reinsurance Club social in Bermuda, yours truly decided to brave Orlando, Florida, and the theme parks.
After jumping on more than enough rollercoasters that can be possibly right for one human being (our stomach is only just coming back from being untwisted), Reinsurance Towers has decided on its very own theme park idea, which will be set in the surroundings of Lloyd's of London. Other worlds will be built in New York, Asia and Bermuda, but the builders are currently on strike.
Here are just some of our ideas....
Name This! (Sponsored by Lloyd's of London):
This rollercoaster leads you up into the world of profit, and then suddenly you're in the 'Unlimited Liability' chasm, where you're plunged into worthlessness and poverty before getting spat out into the gutter, where a friendly lawyer will be waiting.
The Losses (Sponsored by God):
Sit in your house as it is shaken by earthquakes, pushed over by hurricanes, whirled by tornadoes, and then half-drowned by floods/
Money, Money, Money (Sponsored by Joe Taxpayer):
Learn how to make other people pay for your mistakes - over and over again.Also can be seen in another attraction - "Wall Street" - which has been going strong until late 2008.
Broking Idol (Sponsored by our friends at WHAM)
Based on the American Idol experience at Disney, but with us, it's more exciting. Representatives from three major broking houses battle it out for the last client on the face of the earth. Watch as they humiliate themselves for nothing. WARNING: This attraction might prove to be a little too-close-to-home for anyone involved in aviation insurance.
Food: The Whine Lodge
You'll sit around for four hours getting filled up with rubbish food for unbelievably high prices, listening to other people at the park jaw-aching behind each other's back. You'll feel like you've never left EC3.
Please Note: We are slightly worried about the staff of the London world, because they say that they can't wait to be a part of the staff, and then they go and work for the competition. And then come back. Repeatedly.
Anyway, we've got to run. It's cocktail hour on Collins Avenue, and we're thirsty.
Make sure you follow the Reinsurance team on Twitter at Reinsurance_Mag for all the latest news and gossip at the international insurance conference.
To follow the updates from the team go to www.twitter.com/Reinsurance_Mag
]]>As per usual, the radio silence on blog-re over the last couple of weeks mean we have been busy planning something. Not only will we be launching our Club but I will also be out there filming interviews with some of our most loved insurance and reinsurance figures, keep an eye out on our main website for those towards the end of the month.
We have also secured a couple of extra panelists for the Club event including John Daum, the interview subject of our December 2009 issue of Reinsurance, and the ever entertaining Don Kramer.
We still have a few free places left for the half-day event (Wednesday 17th 9am-1pm) so drop me an email to katherine.blackler@incisivemedia.com if it sounds like your cup of tea and you are not yet registered as if you just turn up on the day we will have to charge you a small registration fee.
Enjoy the rest of your week
The half-day event at the Hamilton Princess will be opened by Bermuda's Deputy Premier Paula Cox and will feature three discussions: the first on the New York Stock Exchange and what it will mean to Bermuda and London markets; a look at the Class of 2005 five years on; and panel on the age-old debate on Bermuda vs London and whether the rivalry is still there.
The event takes place on the morning of March 17, the day after the influential World Insurance Forum finishes.
The Bermuda Reinsurance Club event will be chaired by yours truly and Mairi Mallon of Rein4ce.
The panellists include: Barbara Merry, chief executive of Hardy Underwriting, AM Best's Senior Vice President of ratings Matt Mosher, Charles Dupplin, Chief Executive Officer of Hiscox Bermuda, Bradley Kading, president and executive director of the Association of Bermuda Insurers and Reinsurers (ABIR) and Neil McConachie President, and Chief Financial Officer of Lancashire Holdings Ltd.
More information and details on how to attend are available here
Special discounts on the delegate fee are also available for members of the PWC Bermuda Reinsurance Club.
Have a good week