Hartford-based Conning & Co., which specializes in asset management, research, and strategic consulting focused on the insurance industry, has been acquired by a private equity firm for an undisclosed price.
Conning, which has about 220 employees in Hartford and 240 in total, was sold by Swiss Reinsurance Co. Ltd. to New York-based Aquiline Capital Partners LLC, the companies announced Tuesday. There are no current plans for layoffs.
Aquiline, based in New York, invests in financial services enterprises in industries such as property and casualty insurance and reinsurance, banking and specialty finance, securities, asset management, life insurance and reinsurance, and operations and financial technology.
The deal includes Conning’s U.S. and European businesses. In addition to Hartford, Conning has offices in Dublin, London and New York.
Conning, founded in 1912, says it is currently the largest independent insurance asset manager and the third largest insurance general account manager globally. The firm has about $70 billion of general account assets under management and $100 billion of total assets under contract.
Aquiline says its investment will allow Conning to strengthen its business by adding to its services, acquiring talent and pursuing strategic opportunities. Swiss Re will continue to use Conning’s services.
Aquiline’s chief executive is Jeffrey W. Greenberg, who is former CEO of insurance broker Marsh & McLennan Cos. He is the son of Maurice “Hank” Greenberg, a former CEO of American International Group.
“Aquiline brings a wealth of operational expertise in both insurance and investment management, as well as an extensive relationship network,” said Salvatore Correnti, CEO of Conning. “This is the ideal partnership to support our plans to grow the Conning platform by adding to our skills and products to benefit our current and future clients.”
ORLANDO – FirstBest® Systems, Inc., developer of advanced Underwriting Management Systems™ (UMS) that enable property and casualty insurance carriers to profit from better underwriting, announced today at ACORD, that it will offer FirstBest Agent as a standalone solution in addition to FirstBest UMS. The FirstBest Agent solution provides carriers with all Agency-facing capabilities and enables a quicker path to market-driven ROI, as well as easy upgrade to the complete FirstBest Underwriting Management System. (Visit FirstBest at ACORD Booth #133. Request a demo.)
The FirstBest Agent portal provides pre-qualification capabilities, upload, submit-to-bind straight-through processing, real-time process visibility, and much more. In addition, the company also announced new FirstBest Agent features, including the FirstBest App Forms Reader, an automatic form image translator, which transforms an ACORD form PDF or image into XML and allows instant upload directly from the agent’s desktop to the carrier, using nothing more than the ACORD form image. The FirstBest App Forms Reader will greatly speed processing and can even produce online bindable quotes in seconds.
“The FirstBest App Forms Reader feature is a great idea at the right moment. It will make our agents’ jobs easier, saving time and money in today’s fiercely competitive market,” commented Paul Zamora, VP of Underwriting, ICW Group. “This feature will further automate the submission process without imposing changes to the way people work. It allows a single-click upload of image-based ACORD applications, addressing a major inefficiency in the sector. We expect this added service to agents will help further make ICW their carrier of choice for Workers’ Compensation and other lines.”
“In response to carrier requests, we have made the FirstBest Agent available as a standalone product,” said Julian Pelenur, CTO and Founder of FirstBest. “While there is less collaboration within the submission and quote processes without the FirstBest Underwriter, this option will allow carriers to achieve faster ROI by implementing FirstBest Agent standalone, with the option to easily upgrade to the complete UMS with full underwriting and real-time collaboration functionality.”
FirstBest UMS™ enables insurance companies to write more business and write better business. The solution combines FirstBest Agent, a rich agent portal for commercial lines carriers with its next-generation underwriting workstation. FirstBest Agent is a complete point-of-sale portal for both new business and renewals, with rich functionality including dynamic supplemental data, shared documents and attachments, notes, and email notifications. FirstBest Agent also provides complete rules support (market reservation/clearance, pre-qualification, risk appetite, risk eligibility, and agent authority quoting and binding rules) and is designed to be integrated with a carrier’s rating system.
FirstBest Agent also includes a real-time Agent Dashboard for high-level metrics, detailed account activity and greater visibility into the book of business. The feature gives agents and brokers the flexibility to point-and-click to define and obtain metrics that matter the most for each type of user.
Additionally, FirstBest Agent now includes the industry’s first commercial lines ACORD forms reader. The FirstBest App Forms Reader is a new alternative to traditional upload methods, providing many improvements:
— Provider Independence — Does not rely on intermediary networks, eliminating third-party contracts, transaction fees, and process inefficiencies.
— Universal Sourcing — Lets agents either upload or email their ACORD form submissions to FirstBest Agent, which accepts PDF-printed, scanned, faxed, or e-mailed sources.
— No re-keying — The system “Reads” the ACORD form and extracts the application data into ACORD XML, and then begins submission processing.
— Auto Quotes and Referrals — May immediately produce a bindable online quote or refer the submission to an underwriter (based on a carrier’s FirstBest UMS configuration and underwriting policies).
ACORD standards provide a common framework for communication and allow different companies to transact business electronically with agents, brokers and other data partners in the insurance, reinsurance and related financial services industries.
FirstBest® Systems, Inc. delivers advanced Underwriting Management Systems™ (UMS) that enable insurance companies to write more business and write better business. The FirstBest UMS™ combines a next-generation underwriting workstation with a rich agent portal for commercial lines carriers. Insurers can achieve greater speed and business agility, provide real-time collaboration to make it easy for agents to do business with them, promote enhanced underwriting discipline and best practices, scale their book of business profitably, and empower underwriters and agents with greater visibility into the business. FirstBest Agent is now offered as a stand-alone solution and provides carriers with all Agency-facing capabilities to enable a faster path to market-driven ROI, while enabling ease of doing business with agents.
Nine of Britain’s biggest building societies, including Nationwide, have had their credit ratings downgraded in anticipation of further pain to come in the UK housing market.
Marjan Riggi, Moody’s lead analyst for UK mortgage lenders, said that the action had been taken after stress-testing scenarios that incorporated a peak-to-trough decline in house prices of 40 per cent. Some building societies have been downgraded by three notches, making it more expensive for them to raise funding in the wholesale markets.
As well as Nationwide, Moody’s downgraded Chelsea Building Society, West Bromwich, Principality, Newcastle, Skipton, Yorkshire, Norwich & Peterborough and Coventry. Some are considering challenging their ratings with Moody’s.
At the same time, there are signs that the cost of borrowing for homeowners may have bottomed out, with Barclays set to increase the cost of fixed-rate mortgages despite the Bank of England leaving interest rates unchanged this month. Other lenders are expected to follow suit.
Barclays is pulling a 3.99 per cent four-year fixed-rate deal for borrowers with a 40 per cent deposit, from tomorrow. It is also increasing the costs of its three- and five-year fixes by up to 0.4 percentage points.
Woolwich, the mortgage arm of Barclays, blamed the decision on a rise in the cost of longer-term wholesale borrowing, which banks use to fund new mortgage lending.
The bank is the first big lender to increase rates since the cost of borrowing hit a historically low level at the beginning of February. Brokers see this as evidence that mortgage rates have no further to fall.
Melanie Bien, of Savills Private Finance, said: “It was only a matter of time before lenders starting edging up their longer-term fixes. Borrowers who have been trying to time the bottom of the market in terms of mortgage rates may be wise to secure a longer-term fix now.”
Copyright 2009 A.M. Best Company, Inc.All Rights Reserved BestWire
March 30, 2009 Monday 10:02 AM EST
Reality TV Means Real Risks and Sometimes Tricky Coverage
Chris Rogers, director of risk control for broker Aon/Albert G. Ruben Insurance Services, is well-versed in unusual insurance risks.
“What is a stunt? I can’t define it, but I certainly know it when I see it,” Rogers said.
Brokers and underwriters run into unusual risks from time to time, but perhaps none so unusual as those they meet when insuring reality television shows.
Rogers, a loss control expert, meets with film and television producers ahead of time to discuss what risks the production might face. “My responsibility is to help our clients do whatever it is they want to do, no matter how unusual or difficult it might be, but to help them do it safely and legally,” Rogers said.
What if they want to drive a Jeep off a cliff? Sure, Rogers said, just make sure the Jeep has been outfitted as a stunt vehicle, and a trained stunt driver wearing safety equipment is behind the wheel.
And if someone wants to drive a nail into his body?
“The guy was of age, not a minor. So we just made sure there was medical assistance on set the day he did it, and suggested he use a very sharp nail so it goes through quickly,” Rogers said of just such a stunt performed on a show he declines to name.
Paul Jones, managing director of Aon/Albert G. Ruben Insurance Services, said reality shows often have unique risks. “Each one is different,” he said.
For instance, medical professional liability insurance might be necessary for a show that involves medical treatments or procedures.
From relatively standard property and liability insurance, to errors and omissions coverage, all risks can find coverage, and if necessary they are placed in the excess and surplus lines market, Jones said.
“There’s always a way to get it done. It might mean higher deductibles or higher premium, or a coverage amendment or indemnity agreement, but we haven’t come across any shows that we can’t get coverage for,” Jones said.
When a television or movie production involves stunts, a loss control expert is assigned to reduce the risk, Jones said.
“We try not to ask that they change the stunt, but we might recommend changing the safety procedures on a particular stunt,” he said.
That’s where Rogers comes in.
He said although the risks are unusual, it still takes good risk management and risk assessment using the “Three C’s: communication, coordination and cooperation.”
Reality shows, also called unscripted shows, can run the gamut from the relatively simple to underwrite, like those with someone agreeing to allow a camera person to follow them around and film their life, to tricker shows with physical stunts and challenges.
For those shows where a group of people are living together, Rogers said background checks are a must.
“You have to be careful in the selection of contestants and participants. You have to make sure no one has a criminal background of assaults or issues of that nature,” he said.
One of the trickier types of shows to underwrite are the ones in which participants do not know they are being filmed. “Then you have to get them to sign waivers after the show,” he said.
Another concern are talk shows that can include participants fighting, such as the Jerry Springer Show. “Those big guys on the show are former Chicago police officers. They are people who are well-trained in handling confrontational situations, and how to defuse these situations without it escalating,” Rogers said.
As for driving a Jeep off a cliff, Rogers explains it’s not just any Jeep. They alter it by removing the fuel tank and replacing it with a sealed fuel cell, and removing all other fluids from the car. They also install a safety strap so the driver can pull himself down into the Jeep, and a rescue team and medical crew are on stand-by.
Rogers said they spent two days getting ready to shoot that scene, taking all the safety precautions they thought were necessary. “We were just getting ready to roll, when the producer asked if it was 100% safe. Nothing is 100%. You want 100% safe, send everyone home,” Rogers said. “We arrived at an agreed upon reasonable risk acceptance level. We spent hours and hours of preparation in order to achieve that risk level.”
On the days of the shoot, Rogers said there are hours and hours of set-up time for loading equipment, and positioning lighting and cameras. “This can be somewhat boring for those waiting to do the gag, which is then followed by 15 minutes of ‘abject terror’ while we do what we have planned to do.” Rogers said. “Then we go back to being bored again, hopefully.”
(By Meg Green, senior associate editor, BestWeek: Meg.Green@ambest.com)
March 31, 2009
Business Editors / Insurance Writers
NEW YORK – (BUSINESS WIRE) – March 24 2009 – Willis Group Holdings (NYSE: WSH), the global insurance broker, today announced the appointment of Tony Ursano as Chief Executive Officer, Willis Capital Markets and advisory services, effective April 10. The new division develops Willis existing capacity and capital markets will focus on advice to insurance and reinsurance companies and customers on a wider range of capital markets and mergers and acquisitions. M. Ursano will report to Patrick Regan, the Group Chief Operating Officer and Chief Financial Officer and will also oversee the development of the company Willis, the company in M & A division.
Mr. Willis joined Ursano of Banc of America Securities, where he built and managed financial institutions, corporate and investment banking businesses for nine years before being appointed vice president in 2008. He was previously at Merrill Lynch, SG Warburg & Company, and Donaldson, Lufkin & Jenrette, and brings over 22 years of experience in investment banking with a specific focus on the insurance industry. Dr. Ursano was a strategic advisor over the years on more than 50 insurance industry transactions of mergers and acquisitions as well as numerous equity and debt capital for many more raisings profile of large enterprises. More recently, he played an advisory role Willis on $ 2.1 billion acquisition of Hilb Rogal & Hobbs.
“This is an opportune time to expand our capacity of capital markets,” said Joseph J. Plumeri, Chairman and CEO, Willis Group Holdings, “Insurance is just another form of capital, and the unstable economic environment where traditional financial institutions such as banks, are struggling and have little capital, we can bridge the gap by offering high quality, objective advice that includes a range of solutions. ”
“Tony is the ideal person to lead this effort for us,” said Regan. “His years at global and investment banking M & A experience, coupled with the fact that he worked very closely with us during the Willis HRH transaction, will help us to provide value added advice quickly to our insurance partners and customers. ”
M. Ursano lead a team of professionals who work closely with Willis brokers around the world to help customers and carriers of their capital and M & A needs. “I am very pleased to have the opportunity to continue to build the highest quality, capital markets and M & A advisory businesses of Willis, with a focus on independent advice and long-term objectives of relations and world-class customer focus and service, “says Ursano. “Willis has edge analysis and modeling capabilities of the risk and, of course, an excellent risk management expertise. We can do these things to wear with sound strategic advice to help Willis’ global customers manage their capital and meet the opportunities and challenges in the current economic environment. ”
Willis Group Holdings Limited is a leading global insurance broker, developing and delivering professional insurance, reinsurance, risk management, financial and human resources consulting and actuarial services to companies , public entities and institutions around the world. Willis has more than 400 offices in nearly 120 countries, with a team of approximately 20,000 associates serving customers in some 190 countries. Additional information on Willis May be found at www.willis.com.
This is an information service of Thomson Business Intelligence Service © 2006. This content is only for your personal use, subject to the terms and conditions. No redistribution allowed.
ENTERPRISE RISK MANAGEMENT; Pg. 78 Vol. 151 No. 12 ISSN: 0035-8525
WHEN RISK BECOMES A FOUR-LETTER WORD
Moody, Michael J MBA, ARM
The current financial crisis continues to make headline news daily. Even after Congress approved more than a $770 billion rescue plan, trouble has been dominating the headlines. An area that will ultimately come under scrutiny is how well ERM performed during the meltdown. The financial services industry — and more specifically the banking sector — has been a strong supporter of ERM over the past 10 years. For the past several years the Society of Actuaries (SOA) has taken a leadership role in advancing ERM. In July 2007 it added a formal credentialing program, the Chartered Enterprise Risk Analyst, to the Society’s offerings. However, it’s clear that while many in the financial service sector were embarking on ERM programs, sufficient progress had not been made. ERM should become even more embedded in the culture of most corporations. If that is the case, the SOA’s accredited ERM programs will be providing qualified CROs for a number of business sectors. FULL TEXT
Financial crisis exposes need for changes in quantifying risk and better communication among operating units
The current financial crisis continues to make headline news daily. Even after Congress approved more than a $770 billion rescue plan, trouble has been dominating the headlines. This of course is not difficult to do as the stock market of late has turned into a rollercoaster, with swings of 500+ points in a single session.
Despite this distraction, Congress is doing its best to determine the causes of the mess, and many are feeling the pain. Executives of many of the failed financial service sector companies have confirmed that they were aware of internal problems long before they became known to the public. Rating agencies, for their part, had noted that their rating matrixes need a major overhaul. Even ex-Fed Chairman Alan Greenspan expressed surprise at the scope of the current financial mess. Where all of this goes is anyone’s guess at this point.
Risk is risk
An area that will ultimately come under scrutiny is how well ERM performed during the meltdown. The financial services industry-and more specifically the banking sector-has been a strong supporter of ERM over the past 10 years. While the results still are not clear, S. Michael McLaughlin, a fellow and president-elect of the Society of Actuaries, a Chartered Enterprise Risk Analyst (CERA), and principal and global leader for actuarial and insurance solutions at Deloitte Consulting, notes that ERM theory is constantly advancing, but he points out that “we cannot forget ERM is still somewhat new.” He says that ERM models and tools are improving all the time.
“We are certainly getting a much better handle on risk,” McLaughlin says. “What we are finding in ‘normal’ times versus extreme times is that correlations change and risks that appeared independent most of the time are not independent during extreme times.” A perfect example, he says, is the subprime mortgage crisis, which centered on extreme leveraging. “We have found that extreme events are not really independent as originally thought,” he comments. In fact, he notes, “they may exacerbate each other.”
Without question, McLaughlin says, “The ERM frameworks that were in place were not expecting this level of risk.” A number of firms have taken extreme positions, when the theory of ERM said they should not be that far out on a limb. The current crisis has shown that those events believed to be remote were not; rather, they were “unlikely.” This will require a change in the quantification of risk, says McLaughlin.
“We’re getting better at identifying risk,” he asserts, remarking that this is particularly true regarding the aggregation of risk. He notes, “Increasingly we are able to look at the full spectrum of risk and investigate how these risks aggregate, and today we are actually able to quantify the impact of events where there is little or no data.”
The human side of ERM
While noting advancements in the theory of ERM, McLaughlin asserts the need for advancements in the human side as well, since ERM will require acceptance throughout the organization. “It will be very important that coordination of various functions is taking place within the ERM program,” he says. “The flow of information between the CRO and the operating units needs to improve.”
He points out that frequently this important communication is lacking. The coordination of information will become a critical aspect of the CRO’s job and a key component of the human side of the ERM equation.
As a result of recent events in the financial sector, McLaughlin points out that increased regulation will logically follow. The lesson from the current financial crisis is that many firms were just “going too far out on a limb in terms of leverage,” he says. “In hindsight, we now realize that someone needed to be able to pull back on the reins. It has become apparent that we have not fully figured out that part of ERM yet.” McLaughlin also believes that CROs may now gain more veto power as a result of the current situation. While new regulations will be important, he says companies should embrace ERM, not so much for its regulatory aspects “but because it represents good management.”
The SOA leading the way
For the past several years the Society of Actuaries (SOA) has taken a leadership role in advancing ERM. In July 2007 it added a formal credentialing program, the Chartered Enterprise Risk Analyst (CERA), to the Society’s offerings. McLaughlin says that “this is the first new credential since the SOA was formed 58 years ago” and adds that the response has been great.
There are currently 185 CERAs, he says, and about 120 more need to complete just one additional requirement in order to receive the designation. He believes that at the start of 2009 there will be 300 CERAs. The SOA is projecting another 200 to 300 new candidates during calendar year 2009.
The SOA recognizes the need for additional accredited individuals, McLaughlin says. “We are actively moving on that as quickly as we can to increase the supply while maintaining a constant quality,” he comments. “We have actively been working to increase our emphasis on ERM.” The hope is that there will be several thousand accredited individuals within three to four years. But it’s not just the supply side; the SOA is actively talking to employers on the demand side as well. In addition to the obvious demand from financial service sector firms, the SOA is also talking to employers in many other industry sectors, such as energy, retail, and transportation.
The SOA, McLaughlin says, realizes that competing organizations also are training people in ERM. He observes, however, “We know we have the most rigorous training and the most sophisticated mathematical tools, which will provide the best information for improving the quality of decision making.” The SOA, he says, is not trying to have the largest number of qualified credentialed individuals. “It has never been about the numbers,” he says. However, he says, “We do need to have at least sufficient numbers to make the impact we want.”
Each day brings new revelations regarding the current financial woes facing the world. As a result, it may be quite some time before the true picture emerges as to the scope of damages. However, it’s clear that while many in the financial service sector were embarking on ERM programs, sufficient progress had not been made. McLaughlin points out that despite ERM’s progress, many of the ERM programs were not in place when most of the troublesome financial deals were originally entered into. “Additionally, many CROs need to have a stronger voice in the organization’s operations,” he asserts.
McLaughlin suggests that some of the solution will come in the form of increased regulation, “whether we want it or not.” Regulators, he comments, are obviously concerned about firms’ ability to self-regulate, and “to limit aggressive exposures.” Increased use of ERM, he says, “should not just be because government regulations are holding us back; it should be because it’s good management.”
At the end of the day, when all the dust settles, ERM should be viewed in a more positive light. And ERM should become even more embedded in the culture of most corporations. If that is the case, the SOA’s accredited ERM programs will be providing qualified CROs for a number of business sectors. SIDEBAR
“Many firms were just going too far out on a limb in terms of leverage….Someone needed to be able to pull back on the reins. It has become apparent that we have not fully figured out that part of ERM yet.”
-S. Michael McLaughlin
Society of Actuaries
By Michael J. Moody, MBA, ARM
Michael J. Moody, MBA, ARM, is the managing director of Strategic Risk Financing, Inc. (SuRF), an independent consulting firm that was established to advance the practice of enterprise risk management. The primary goal of SuRF is to actively promote the concept of enterprise risk management by providing current, objective information about the concept, the structures being used, and the players involved.
February 16, 2009
Copyright © 2009 LexisNexis, a division of Reed Elsevier Inc. All Rights Reserved.