The Preliminary 2017 Top 100 Reports have been posted for Members and Subscribers. Non-Members may purchase these reports by completing a Statistical Report Order Form. Click here for a complete list, description, and release schedule of statistical reports. http://www.surety.org/news/77681/Preliminary-2017-Top-100-Reports-posted.htm
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MADISON, Wis. & JACKSONVILLE, Fla.–(BUSINESS WIRE)–May 4, 2018–Madison, Wisconsin-based American Family Insurance group and Florida-based The Main Street America Group will pursue a merger, the companies announced today. Approved by the companies’ boards of directors, the merger will improve diversity of risk, promote growth through geographic expansion and provide agents and policyholders broader product offerings. Both American Family Insurance and Main Street America are financially strong mutual holding companies, and the merger does not involve capital outlay by either. Both also have national distribution capabilities, but each with a regional emphasis. The merger, expected to close by year-end, will require approval by mutual policyholder-members of both companies and state insurance regulators. “This merger will give policyholders – particularly small business owners – more insurance products to choose from and more ways to buy them,” said Jack Salzwedel, chairman and CEO of the American Family Insurance group. “Given our focus on policyholders and agents, that’s a win.” “Both companies are able to immediately take advantage of our unique marketplace positions, as well as the ability to bring new value to each of our agency distribution systems,” said Tom Van Berkel, Main Street America’s chairman, president and CEO. “Our ability to sell new products through our independent agent-customers will help us and our agents profitably grow, while simultaneously bringing American Family enterprise products to a different policyholder base.” Policyholder equity combined The combined equity of the merged entities is expected to be more than $9 billion. Upon completion of the merger, Main Street America will operate as a stand-alone brand within American Family Insurance group, similar to The General and Homesite, acquired in 2012 and 2013, respectively. Main Street America will retain its affiliation and strong support of Trusted Choice ®, the global branding program of the Independent Insurance Agents & Brokers of America. In 2017, the American Family group’s written premium was $8.8 billion. The company sells American Family-brand products, including auto, homeowners, life, business and farm/ranch insurance, primarily through exclusive agents in 19 states. American Family affiliates, The General, Homesite and AssureStart, also provide options nationally for consumers who want to buy and manage insurance over the internet or by phone. Main Street America wrote more than $1 billion in premium last year. The company sells commercial and personal insurance as well as surety bonds, all through independent agents. Main Street America has an “A” (Excellent) rating with a stable outlook for financial strength from A.M. Best, the same as American Family. American Family became a mutual holding company in 2017, making mergers like this possible. The American Family Insurance group ended 2017 with approximately 11,300 full-time equivalent employees and Main Street America has approximately 900. At this time, no major employee or operational changes are expected as a result of the merger. Read More … https://www.apnews.com/3f219bf6e4c34c1d91dd5f20e27ab2f9
American Family Insurance and The Main Street America Group pursue merger Read More »
ACE American Insurance Co., rather than the state workers’ compensation trust fund, is required to pay benefits to an injured worker pursuant to a reinsurance policy that covered a self-insurer’s surety bond, a Massachusetts appeals court has held. In a May 2 opinion, the Massachusetts Court of Appeals affirmed that G. L. c. 152, § 25A(2)(c), of the Workers’ Compensation Act requires ACE as a reinsurer to pay benefits in the event of exhaustion of a self-insurer’s surety bond. Read More … https://harrismartin.com/article/23444/reinsurer-must-assume-payments-of-workers-compensation-benefits-mass-court-says/
Reinsurer Must Assume Payments of Workers’ Compensation Benefits, Mass. Court Says Read More »
Commercial surety in the US is a recipe for success if you understand the intricacies and complexities of the market. The product is booming as an alternative in lieu of traditional letters of credit (LOC) and there’s ripe fruit for the picking. “The US commercial surety market is experiencing growth that’s faster than the overall insurance market and faster than North American GDP growth. That’s largely due to increased use of the product as an attractive alternative to letters of credit (LOC) and more obliges accepting bonds in lieu of LOCs,” said David Hewitt, US Surety Practice Leader, Marsh. “In the past few years, there has been lots of concern around interest rates. Many of our clients were looking for alternatives to putting up an LOC,” Hewitt added. “This led to more discussions and education around the product, which has helped it grow in popularity.” Results in the US commercial surety market have been positive for about 10 years, with an average 20% loss ratio or lower, which has enticed new entrants into the niche market. Pricing has been consistently dropping for at least three years, and the overall market continues to expand despite declining rates. The US remains an attractive market for global players to enter. Globalization is an increasing trend within US-based surety portfolios. As more firms enter the US and sign contractual documentation, the need for the surety product continues to expand. “We’re also seeing a lot of increased demand for commercial surety bonds for deals between US companies. Large corporates are using the product more and more, and if they have a good experience with it, the uptake increases,” Hewitt told Insurance Business at RIMS 2018. “I think the product is a really good alternative for any company that uses LOCs today, to help manage some of their risk “The universe where LOCs are used is huge and the different types of obligations parties are required to meet are almost too many too count. Many who previously looked to manage their risk through an LOC are finding that surety bonds provide a really good alternative in lieu, which often comes at a cost advantage, leaving borrowing space available for other financial necessities.” https://www.insurancebusinessmag.com/us/news/breaking-news/commercial-surety-bonds-attractive-alternative-to-locs-99478.aspx
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Recently, the President of the APESEG (Peruvian Association of Insurance Companies), Eduardo Moron, expressed his concern regarding the harmful impact that Emergency Decree N ° 003-2017 would have on the insurance market for bond letters and surety bonds that guaranteed the obligations of various members of the so-called construction club (Odebrecht and those associated) before the State. The potential amount that would be the subject of such a demand is estimated at approximately S / 3,800 million, of which 97% would be taken on by foreign reinsurance companies, since national insurers only retained 3% The aforementioned Decree was issued to guarantee payment to the State of civil liabilities generated by acts of corruption linked mainly to the Odebrecht mega corruption case. However, this disrupted the payment chain to suppliers and with it brought state works to a standstill, thus resulting in the State being able to execute the bonds or guarantees at any time. The Project for Law 2408, which will replace the Emergency Decree, remains in discussion and limits the extension of the application of the regulation. However, it is not clear if this new law will eliminate the risk of the aforementioned execution of the surety bonds, as there is still concern over whether it is possible to safeguard the onslaught of a massive claim on these insurances, on the basis of force majeure (or acts by the principal), given that the poor legislative technique employed by the State is one of the main causes of this situation. This article is written by Pedro Richter at Torres Carpio Portocarrero & Richter Abogados in partnership with DAC Beachcroft LLP. https://www.lexology.com/library/detail.aspx?g=dc0ade3c-35c5-43e6-8be6-17f75913dc91
There are very few insurance carriers willing to “roll up their sleeves” and “dive head first” into a complex surety deal. The surety marketplace can have fierce competition and small profit margins. Insurer Chubb has an integrated global surety division under the leadership of Stephen Haney. Chubb’s surety team brings a “can do spirit” to the marketplace, and works hard to help enable a deal, explained Craig Gortner, Senior Vice President of Commercial Surety at Chubb. Chubb’s team of experienced professionals were recently involved in the execution of a complex surety bond for Altán Redes – a consortium backed by US-based Morgan Stanley Infrastructure Fund and the International Finance Corporation – which went on to win an international bidding process and contract to set up a nationwide shared wholesale 4G LTE telecommunications network in Mexico. Once completed, the open access wholesale wireless network is set to cover 92.2% of Mexico and 112 million people in less than seven years, using 4G LTE technology. Putting a surety bond in place for the project was no easy task. It required Chubb to draw on several different departments throughout its organization, within and outside of Mexico, all working towards a shared objective of finding the best possible surety solution for the project. From the outset of its involvement, Chubb worked closely with teams assigned by Altán Redes. Achieving a successful surety outcome required clear communication and cooperation between teams in various areas including commercial, underwriting, operations, legal, finance, accounting, and global accounts. “Chubb’s multinational identity and platform, as well as its financial strength and stability, helped accomplish this objective,” according to Gortner. “When it comes to a complex deal for a US-based investor who wants to get involved in a project outside the US, teaming up with the right surety company and broker is very important,” Gortner told Insurance Business. “Many carriers approach surety underwriting by simply looking at the four corners of a document. They want a deal that’s already done and dusted. “At Chubb, we’re willing to sit down, roll up our sleeves and dive head first into the details of a transaction to figure out whether or not a surety bond is feasible. Our willingness to get involved sets us apart from our competition. Our clients respect and appreciate that Chubb is willing and able to invest the time and resources to help them make their deals happen.” https://www.insurancebusinessmag.com/us/chubb/chubb-our-willingness-to-roll-up-our-sleeves-sets-us-apart-98332.aspx
Chubb: Our willingness to roll up our sleeves sets us apart Read More »
Some insurers have left the marijuana insurance market after a warning memo sent by Attorney General Jeff Sessions earlier this year, but others are staying and even planning to increase their involvement in the sector, say observers. Insurers who have left the business include Glen Allen, Virginia-based Markel Corp. and Munich Reinsurance Co. unit Hartford Steam Boiler & Inspection Co., observers say. Mr. Sessions referred in his Jan. 2 memo to a memo issued in 2013 by then-Deputy Attorney General James M. Cole, which said law enforcement should focus on certain priorities with respect to marijuana, including preventing its distribution to minors. Mr. Sessions said, “previous nationwide guidance specific to marijuana enforcement is unnecessary and is rescinded, effective immediately.” “There’s been a mixed reaction,” said Ian A. Stewart, a partner with Wilson Elser Moskowitz Edelman & Dicker L.L.P. in Los Angeles. “On the insurance side, we saw a couple of carriers leave the space,” but “there are other carriers thinking about getting in, in 2018, who have taken a pause to see how things play out,” while others already in the business see this as an opportunity, he said. Justin Lehtonen, assistant vice president at Los Angeles-based wholesaler Worldwide Facilities Inc., said “probably one of the most severely handicapped areas at the moment” is coverage for equipment breakdown. A spokeswoman for Hamilton, Bermuda-based XL Group Ltd., which does business as XL Catlin, said it has not withdrawn from this market. “We review submissions on a risk-by-risk basis,” she said. Hartford Steam and Markel did not respond to queries on reports they had withdrawn from this market. “There have been markets that have pulled out, and some are just kind of tightening up,” said Ronnie Cabral, cannabis group practice leader at San Francisco-based wholesaler Crouse & Associates Insurance Co. The Cole memo’s withdrawal created “a little bit of a skittish marketplace that’s unsure about what they’re getting into,” said Rafael Haciski, a producer with Philadelphia-based broker The Graham Co. However, Stephen Pate, a member of law firm Cozen O’Connor P.C. in Houston, said despite the Cole memo’s withdrawal, “to date I haven’t seen anything that indicates to me they’ve done anything to try to enforce the federal marijuana laws.” Mr. Pate said insurers “right now are in a wait-and-see status, to see whether, in fact, the Trump administration is really, really going to do anything about this.” Seth A. Goldberg, a partner with Duane Morris L.L.P. in Philadelphia, said the memo has caused most industry participants to “pause and consider their involvement. But that said, the space has continued to grow and flourish,” and “the opportunity for insurers to profit from the space also remains.” Read More … http://www.businessinsurance.com/article/20180417/NEWS06/912320625/Marijuana-insurers-in-holding-pattern-after-Sessions-warning-memo
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A bill that would allow companies to road-test self-driving vehicles in New Hampshire may be facing some speed bumps. House Bill 314 cleared the House on a voice vote earlier this year. Its prime sponsor, Rep. Steven Smith, R-Charlestown, said the measure is the result of three years of work by around 20 stakeholders here. But he said there’s been some last-minute, “aggressive” lobbying by the autonomous vehicle industry to try to weaken the language in his bill. It’s frustrating, said Smith, who chairs the House Transportation Committee. “All of a sudden, they’re peppering us with model legislation at the end of a three-year period in the last two weeks,” he said. “It’s not the way we do business with our partners.” Smith said lobbyists want to change the bill to allow not just testing but deployment of driverless cars. He’s not budging. “I am not going to write a deployment package for a car that doesn’t exist,” he said. “I hope that they test here, but ultimately, my first job is public safety and a responsible test framework.” The legislation would allow someone to apply to the Department of Safety for an “autonomous vehicle testing license.” The company would have to provide the dates and locations where testing would occur – and put up a $10 million insurance or surety bond. It would also have to share some safety data with the state. Test vehicles would have to be accompanied by escort vehicles, and the license could be revoked for violating the rules of the road. Matthew Mincieli is Northeast regional executive director for TechNet, which represents about 70 technology and “innovation” companies. Mincieli said New Hampshire is “very appealing” for road-testing driverless cars because of its varied terrain and road conditions. But he said some of the requirements in House Bill 314 are too onerous. For one thing, he said, the $10 million bond is higher than anywhere else. And he said other states don’t require companies to notify them where the testing will occur. “We prefer the state not have the option of saying yes or no to certain locations,” he said. And the requirement of an escort vehicle is “a major impediment to testing,” Mincieli said. “That to us seems an overly complicated requirement.” The escort vehicle provision is “not negotiable,” Smith said. “You need eyes on (it) while it’s being tested.” Mincieli also objected to the provision that the state could pull the testing license for a violation of road rules. “That’s pretty broad,” he said. “The punishment doesn’t fit the crime.” Smith said he cobbled together portions of legislation that has worked in other states to create a law he thinks will be good for New Hampshire. He purposely did not include any definitions, since the industry is changing so fast, he said. Smith worked for eight years as a test engineer for a tech company. “And the things that they’re asking for, none of their test engineers would ask for,” he said. His bill would require that any vehicle tested here be first tested under controlled conditions that simulate “real world conditions.” “That’s responsible, and it builds confidence,” Smith said. “If a company isn’t willing to do that and they come to us and say, ‘We drove it around our parking lot,’ no, you’re not going on a New Hampshire road.” The debate here comes after some self-driving vehicles have been involved in fatal crashes in other states. Last month, after one of Uber’s self-driving test vehicles struck and killed a pedestrian in Tempe, Ariz., the company voluntarily suspended all of its testing programs around the country. Mincieli said the program New Hampshire lawmakers are proposing is far stricter than those of other states. “What they’ll do is end up causing testing and deployment to roll out more slowly,” he said. “It will cause a few speed bumps unique to New Hampshire.” The Legislature has to pass something, Smith said, noting the federal Department of Transportation has issued guidance that states can’t outright ban driverless vehicles. But the DOT leaves it up to states to regulate their own roads. Meanwhile, he said, “The industry’s made it clear that they don’t believe that anything in our statutes prevents them from doing it here tomorrow. “If we do nothing, they can just come here and it’s their playground,” he said. Sen. Regina Birdsell, R-Hampstead, who chairs the Senate Transportation Committee, said she’s spoken with some representatives of carmakers about their concerns. Birdsell said lawmakers have no intention of banning driverless vehicles. But, she said, “I want to make sure we do this right.” She said she initially was skeptical about driverless cars but has changed her mind. “I understand that autonomous vehicles are coming, and I honestly think it’s a really excellent alternative for our disabled and our elderly populations,” she said. Indeed, Jeff Dickinson, Granite State Independent Living’s advocacy director, told the Senate Transportation Committee last month that autonomous vehicles would be “transformative” for the elderly and disabled, especially in rural areas of the state with no public transportation. Read More… http://www.unionleader.com/Self-driving-cars-face-a-NH-reality
Self-driving cars face a NH reality Read More »
The three leading global credit insurers Atradius, Coface and Euler Hermes currently benefit from a supportive economic environment that is limiting corporate insolvencies, according to Moody’s https://www.intelligentinsurer.com/news/credit-insurers-buoyed-by-economic-environment-15083
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IAT Insurance Group has agreed to acquire IFIC Surety Group which includes International Fidelity Insurance Company and its subsidiary Allegheny Casualty Company. Through the deal IAT will enter the surety market. IFIC Surety Group is said to be the eighth largest surety writer in the US with over $150 million in gross written premium. IAT intends to maintain the IFIC brand and provide additional capacity and support its continued growth IAT has $1.3 billion in annual gross written premium and $1.2 billion of GAAP equity and acquired the renewal rights to a $40 million book of business from State Auto subsidiary Rockhill recently. “IFIC is a well-respected company with a long history in the surety sector and we are pleased to welcome it into the IAT family,” said IAT CEO Bill Cunningham. “Its leading position in the market and broad distribution network, make IFIC a natural fit for IAT’s strategic objectives. We value the quality of the IFIC team and their strong underwriting discipline, and we are pleased that chairman Fred Mitterhoff has agreed to stay on board for the next two years.” Fred Mitterhoff, IFIC chairman, added: “Like IAT, IFIC has always been a family-owned company and, when it came time to sell, we wanted to ensure that our values were maintained, including our commitment to employees, providing strong benefits, and fostering a supportive work environment. IAT is the perfect choice because they want to keep our talented team in place and invest in making the company even better.” https://www.intelligentinsurer.com/news/iat-insurance-enters-surety-market-with-ific-acquisition-15008
IAT Insurance enters surety market with IFIC acquisition Read More »
