Aon Risk Solutions Aon Broking. London Market Review Property & Casualty

Transcription

1 Aon Risk Solutions Aon Broking London Market Review 2013

2 Contents.

3 Introduction 1 U.S. Property 3 Trends Capacity Post Tropical Cyclone Sandy International Property 7 Trends Capacity Mining and Metal Industries U.S. Casualty 13 Public and Products Liability Market Trends Capacity Industry insights International Casualty 15 Public and Products Liability Market Trends Capacity Industry insights Product Recall and Contamination 17 Hospital Professional Liability 19 Appendices 21 IUA London Companies Lloyd s Syndicates Contributors 25

4 Introduction. London Market Gross Written Premium Lloyds IUA Companies Property billion billion Liability billion billion Total billion billion

5 Introduction The London Property and Casualty (P&C) insurance and reinsurance markets reported above average underwriting results for 2012, notwithstanding Superstorm Sandy landing a late blow to some market s combined loss ratios. The London market continues to attract new investors and capital and we estimate it wrote in excess of 17 billion of P&C premium in We categorise the London Market for the purposes of this report as Lloyds of London (Lloyds) and the company market represented by the International Underwriting Association (IUA). The P&C market sector is the largest in the London market and this report is aimed at describing some of the key trends seen in 2012 and how these and other factors are shaping the market in We have focused on six market sectors: 1. U.S. Property 2. International Property 3. U.S. Casualty 4. International Casualty 5. Product Recall and Contamination 6. Hospital Professional Liability. For each of these sectors we have included supporting statistics and additional anecdotal context from a selection of industries and territories that have new developments or where the London market enjoys a significant market share and/or plays an important role in setting lead terms. This does not cover UK retail risks. The majority of the data and facts used in this report have been drawn from Aon s GRIP database, which provides clients with accurate information on insurance trends and benchmarking available in the industry. In recent years the London Market has benefited from improved catastrophe event analysis capabilities. This together with enhanced market cycle planning has helped to create a more robust blend of innovation, underwriting risk management and financial strength. A combination increasingly valued by customers in a complex financial world. One of the major trends in the market from 2012 which we expect to continue in 2013 is the markets strategy to diversify their risk exposures, either by balancing U.S. exposures with more International risks, or writing a broader portfolio of classes that offer more consistent and less volatile underwriting results. We anticipate there will be increased competition for the best risks during 2013 in each of the six sectors we cover in this report. This will be driven by profitability and market share factors as always, but we also expect a reduction in premium available in some areas due to the largest Facultative reinsurance buyers retaining more risk. There will continue to be challenges for the market in the year ahead; natural catastrophe losses, variable financial markets, regulation challenges, and regional market competition for business and talent. Notwithstanding these challenges we see the London P&C market starting 2013 in a positive mood, looking to do more business and underwrite risk for the benefit of insurance buyers World wide as it has been doing for over 300 years. Luigi Sturani Head of Property, Casualty and Crisis Management Mark Parker Chief Commercial Officer, Property, Casualty and Crisis Management 1

6 U.S. Property Market. Average U.S. Property Risk Rate Changes Claims free Loss active Quarter % to +10% +5% to +15% Quarter % to + 5% +5% to +15% Quarter % to + 0% +0% to +10% Post Sandy 0% to +10% +10% to +100% Quarter % to + 10% +10% to +50%

7 The rating environment during the first quarter of 2012 was broadly flat for U.S. property risks written in London, with rates increases of up to 10% on risks with natural catastrophe exposures. U.S. Property During the second and third quarters of 2012 the percentage of risks seeing rate increases reduced and the overall market trend flattened with some small reductions on risks with significant risk improvements or less natural catastrophe exposed. Following Superstorm Sandy the rating trend returned to the position at the beginning of With rates increases on risks with East Coast flood and storm surge exposure, and a general firming of rates for risks with exposure to other U.S. natural catastrophe exposures. The London market had a relatively reduced exposure to U.S. North East Coast Flood in 2012 as a result of pricing competition during that stage of the market cycle for the large property risks in the region. Consequently many London markets avoided the level of losses that may have been expected. Overall market capacity was largely unchanged in 2012, and will be similar in The London and European markets accessed via London provide approximately 35% of the California Earthquake and critical Windstorm capacity on the largest risks. However for creative niche situations such as Aon s Flood Secure facility, which provides reinstatement aggregate for impacted Insureds, London writes 100% of this product. U.S. Large Risk Sector Capacity Peril California Earthquake Total Capacity Per Risk USD 600 million London Market Capacity Per Risk USD 225 million Windstorm USD 1 billion USD 350 million 1. Storm surge to be clearly defined within Flood or Wind 2. Specific North East U.S. Wind and Zone A and flood deductibles are being applied 3. Application of appropriate Contingent Time Element sub-limits or specific information required. Supporting a general trend the London market requires comprehensive data to model natural catastrophe exposures. The better the quality of data the better the policy limits, rates and deductibles that are usually available. Whilst London is rightly seen as a natural catastrophe specialist market for U.S. risks, the actual breadth of broking and underwriting expertise covers many industries that require specialist industry knowledge. Listed below are Industries that the London and European market offers significant capacity, and broking/underwriting expertise to U.S. companies. Agriculture Railroads Auto Manufacture Real Estate Casinos Retail Forest Products Speciality Chemicals Hotels Steel & Aluminium Pharmaceutical Telecoms & Technology Additionally a wide range of facilities and structured portfolio solutions make the London market an option for nearly every size of risk in the U.S Outlook We expect increased competition for risks that are well managed and where the risk profile is pro-actively leveraged. This may lead to rate reductions being secured by these companies as the year develops. As a result of Post Tropical Cyclone Sandy certain tightening of policy terms and conditions are being discussed as follows: 3

8 Top 10 Global Insured Loss Events Date(s) Event Location Deaths Structures/ Claims Economic Loss (USD) Insured Loss (USD) Oct HU Sandy U.S., Caribbean, Bahamas 254 1,800, billion billion 1,2 Jan. 1-Dec. 31 Drought/ Heatwave United States 123 Unknown billion billion 1,2 Apr Severe Weather United States 1 355, billion 2.40 billion Mar. 2-3 Severe Weather United States , billion 2.40 billion June 28-July 2 Severe Weather United States , billion 2.00 billion May Severe Weather United States 0 200, billion 1.60 billion Aug HU Isaac United States 5 180, billion 1.40 billion May 20 & 29 Earthquake Italy 25 10, billion 1.30 billion June Severe Weather United States 0 135, billion 1.05 billion June 6-7 Severe Weather United States 0 120, billion 1.00 billion Source: Aon Benfield 1 Subject to change as loss estimates are further developed 2 Includes losses sustained by private insurers and government-sponcored programs Global Economic Losses by Peril Nine of the top ten insured loss events occurred in the United States during 2012, six related to severe weather, two were tropical cyclones and one was a drought. Hurricane Sandy, which made landfall in New Jersey as a post-tropical cyclone, was the costliest insured event of the year, though the prolonged drought in the U.S. also prompted a significant level of claims and crop insurance payments by the U.S. Department of Agriculture s Risk Management Agency program. Both events combined accounted for nearly two-thirds of all global insured losses in Outside of the United States, the highest insured losses came from twin Italy earthquakes that occurred within days of each other in May. Additional notable insured loss events outside of the U.S. in 2012 were separate instances of flooding in the United Kingdom and a large hail storm in Calgary, Canada Avg 4 Tropical Cyclone Source: Aon Benfield Severe Weather Flooding Earthquake Winter Weather Wildfire EU Windstorm Other

9 Post Tropical Cyclone Sandy Mid-Point Market Loss Estimates Company Loss midpoint (USD mio) Company Loss midpoint (USD mio) Company Loss midpoint (USD mio) U.S. Property AIG 2,000 Partner Re 225 Lancashire 44.5 Allstate 1,117 Everest Re 287 Argo 47.9 Travelers 1,024 Assurant W R Berkley 45 Swiss Re 900 Arch Kemper Corporation 45 Chubb 882 Catlin 225 Flagstone Re 39.1 Zurich 758 The Hanover 200 HCC 32.5 Munich Re 1040 Aspen 175 Mercury General 28 Allianz 590 Tokio Marine 450 Platinum 30.2 Alleghany 412 Allied World Ace 502 Endurance 160 QBE 335 Hiscox 144 Maiden Holdings American Financial Group Cincinnati Financial The Hartford 350 Renaissance Re 127 Novae 27.5 XL Tower Group Navigators 20.4 USAA 334 Alterra 115 Validus Progressive Corporation United Fire Group RLI 13.2 Hannover Re Markel Meadowbrook 7 Axis 331 Montpelier Re 94 New Jersey Manufacturers 300 Beazley 90 Kingstone Companies 0.75 Amlin Selective 40 Total 1, Source: Insurance Insider 5

10 International Property Market. Theoretical International Property Market Capacity Global USD 4.1 billion USD 4.4 billion London USD 1.7 billion USD 1.8 billion 6

11 The International sector of the London property market provides insurance and reinsurance protection for companies located in over 200 different countries. Consequently high level market trends should also be set against specific local factors if applicable. Following the record year for natural catastrophe losses in 2011, 2012 started with markets seeking and securing modest rates increases on the majority of renewals. Those renewals with significant natural catastrophe exposures or loss active, saw the greatest firming of terms. As the year progressed increased competition for market share re-emerged, for situations where the market believed rates were attractive on a technical basis. This translated into flat rate renewals at 1 July 2012, with some small rate reductions becoming more common in the weeks up to the day Superstorm Sandy occurred in November, which then placed a floor under international property rates. Business flow from these countries in 2013 will continue to be above average again in 2013 but we are already seeing local and regional markets increasing retentions and competing for business leading to a softening of terms. The following Chart provides a summary of average rate movements in 2012 and early 2013, it should be noted higher and lower numbers will have occurred during the year but these provide the average as a record of directional trend and Q Rate Movement Claims Free Loss Active International Property Apart from a short period after Superstorm Sandy, international rates have not moved north and in fact for some territories, actually started to see modest rate reductions being achieved again towards the end of the year. This we believe demonstrates the reduced correlation between U.S. catastrophe events and international property insurance rates. Regionalisation of markets seems to be slowly changing how the global and London market responds to natural catastrophe scenarios Outlook The countries that experienced natural catastrophes in 2011, including Japan, New Zealand and Thailand, saw increased business flow in to the London market. The number of deals and premium written increased by between 30% and 100% depending on country, loss experience and industry. Some London markets were particularly keen to write New Zealand and Thailand risks as they provided a diversification play from other natural catastrophe countries in their portfolio. Europe (ex UK) -5% to +5% +5% to +20% Middle East -5% to 0% +5% to +25% Russia/CIS -10% to 0% +5% to +15% Japan + 5% to +10% +20% to +25% Taiwan -5% to +5% +20% to +30% Australia -5% to +0% +5% to +20% New Zealand +5% to +10% +15% to +100% Brazil -5% to -10% + 5% to 15% Chile -5% to -10% +5% to +20% Columbia -0% to -5% +15 % to+25% Mexico -5% to -10% +10% to +20% South Africa -10% to 0% +5% to +20% 7

12 In Asia, 2013 could bring increased competition for business from nearly every country including Japan and Taiwan where earthquake activity would normally ensure a more conservative and cautious underwriting stance is taken. However with a quiet natural catastrophe first quarter increased competition will return, repeating the 2012 trend. In Latin America, two countries that have had recent large natural catastrophe losses, Chile from the 2010 earthquake and Columbia from the 2011 floods presently have rates significantly above the historical average and we expect to see lower rates for business from both territories. There are industry cold spots within these trends where poor loss experience is a counter balance to any general downwards movement in rates. Organisations that meet the markets in person armed with good quality underwriting information will always secure the best terms, however this fact is now carrying greater weight as many underwriters have risk engineers review underwriting information to assess risk quality more carefully than historically the case before providing terms. The Aon Global Broking Model is based on matching the most suitable insurance and reinsurance market to the customer notwithstanding where either party is located. Modern technology means terms can be provided as quickly from the London market as from local markets and we see a major opportunity for greater use to be made of the London markets for International risks, providing more choice and alternatives for buyers. For Europe the good underwriting results of 2012 are expected to start to lead to areas of increased competition was notable for the level of underwriting discipline shown by the markets, where by companies with poor loss records or poor risk management standards, faced both rate and deductibles increases. 8

13 International Property 9

14 Mining Industry London is recognised as the leading market for mining risks globally, with the London brokers also accessing the major European reinsurers. The London market provides lead terms for most of the global mining companies and includes a number of specialist mining markets that also offer risk engineering and loss prevention services. Global market capacity remained stable in 2012, although the exact amount available is heavily dependent on local and regional factors. The large multi-territory companies were able to purchase limits between USD billion which is close to the maximum capacity available in the market. Terms and conditions particularly on the large risks can vary significantly between markets. Coverage for underground risks for example may have different sublimits depending on each market s available capacity. In addition exclusions and basis of valuation can be different. This has lead to a situation where the highly capitalised Captive Insurers are plugging the gaps on placement by providing Difference In Conditions and Difference in Limits coverage. Average rate changes for mining risks are not always the most important underwriting measure, withoften greater focus on policy coverage and self- insured retentions. However, as an average, rates probably increased slightly overall in 2012 but the range of change varied widely. Some rate reductions were achieved for risks demonstrating significant risk improvements, and those with poor loss experience faced a sharp firming of terms Outlook 2013 is likely to deliver rate changes that will continue to vary depending on risk profile, where capacity is in short supply rates will hold up, for those risks with good risk profiles and loss records, there may be some softening of terms. Mining remains one of the most complex and dynamic risk sectors and large industry losses can change sentiment quickly. Our view of the Mining market is that the restrictive terms provided by the markets will probably continue to reduce the level of claims in 2013 and the market is likely to have another profitable year unless there are a series of natural catastrophe losses. Consequently buyers could see improvement in terms if they have a good risk management story and strong market profile which is leveraged professionally. Another developing trend in the market is a consequence of the search for new natural resources taking mining companies in to more geographically and politically difficult territories. This has presented fresh underwriting challenges, which the London market has risen to meet with significant capacity available for nearly every country and type of mining operation that has come to the market. Global Mining Market Capacity USD 1.5 billion 1.6 billion A number of large losses from 2008 were settled in 2012 at much lower numbers than originally estimated. In addition mining loss estimates for 2012 are approximately 50% of the global property market premium. 10

15 Metals Industry The market for metals risks is similar to the mining industry in that the London market broking and underwriting expertise means the largest steel and aluminium risks are underwritten and placements structured here, although significant regional capacity is often also used. Following the increase in commodity prices many of these companies purchase policy limits between USD 1 to 1.5 billion, which can stretch market capacity, particularly if the risk includes natural catastrophe exposures or has seen loss activity. The London market leads or provides significant capacity on these programmes and is also provides risk control and risk engineering services that are paramount for the technical underwriting required where the risk exposures are complex and a single risk can have multiple maximum loss scenarios for the same plant that exceed USD 1 billion. The chart below tracks the evolution of average metals industry property rates over the past 10 years, the majority of these companies are in the steel and aluminium sectors. For 2012 rates were broadly flat, however within this trend there were some areas of increased competition, for example the good loss record of the Asian and Russian/CIS steel industry resulted in rate reductions for many of the companies located in these territories. On the other hand the overall poor loss record of the Middle East aluminium industry and the European and Latin American steel industry during the past 5 years means rates on average have increased for companies in these territories during this period Outlook During the first months of 2013 the market as a whole has showed discipline on rating for the Metals industry, where the markets most affected by losses have reduced the capacity they are prepared to offer and/or sought improved terms. Many buyers have undertaken Risk Bearing Analysis and Business Interruption Loss scenario studies to establish the correct self-insured retention (SIR) levels and also understand their precise maximum loss scenerios, so as to purchase the optimum policy limit. Whilst these studies are relatively inexpensive they often save significant sums in helping to define a company s SIR and total cost of risk understanding. We anticipate that if the market begins to soften in 2013, due to low natural catastrophe and risk losses in the metals sector, competition will return for the companies with the best market risk profiles and good loss records. International Property Average property rate evolution: Metals Industry 25% 20% 15% 10% 5% 0% -5% Q1 08A Q1 09A Q1 10A Q1 11A Q1 12A -10% -15% -20% -25% Metals Industry Source: Aon analytics All sectors combined 11

16 U.S. Casualty Market. London Market Capacity Excess Layer Capacity 2012 USD 1 billion Excess Layer Capacity 2013 USD 1.05 billion

17 The London market for U.S. Public and Products Liability (Casualty) risks has recovered completely from the Pollution and Asbestos losses faced in the second half of the 20th century. The market, includes the European insurers and reinsurers that accessed by the London brokers can offer over USD 1 billion of market capacity per risk. The majority of this is on an excess of loss basis although there are a number of primary lead markets located in London. At Aon the London casualty team for U.S. risks operates as an arm of the Aon U.S. Casualty Practice, ensuring clients have access to the best markets via the most efficient distribution channel. The major issue for the London market in 2012 continued to be potential losses arising from the Deepwater Horizon catastrophe. Multiple claims to the market mean establishing exact exposure and therefore reserving is complex. Claims from wildfire losses, where one wildfire has seen claims in excess of USD 900M, are a major focus, together with the more usual concerns from pipeline, mining and auto industry losses. The range of rate changes seen in 2012 depended very much on the industry class. In respect of non loss active industries, average rate increases were between 0% to + 5%. However for the Power, Oil and Gas and Mining clients, rate increases of over 10% on clean renewals and even higher increases have been witnessed and on occasions reduced capacity were experienced for those with claims active risks and Q Rate Movement Rate Movement Claims Free +0% to +5% Loss Active +10% to +50% In our view the current market plays to the strengths of the London and European underwriters. Their global perspectives often translate in to trying to find a solution other markets would pass over, or developing new products or policy wordings that find a way of matching client needs Outlook U.S. Casualty rates were driven by major market losses in 2011 and 2012 and if high levels of loss actively continues in 2013, we expect rates to hold firm. However if the loss trend improves there is sufficient surplus capacity in the market that companies which clearly differentiate their risk and have good loss records, could see improved terms becoming available. U.S. Casualty 13

18 International Casualty Market. Average Rate Change Technical Market Capacity % to +5% 2011 USD 1.9 billion 2012 USD 2.0 billion

19 The International Public and Products Liability (Casualty) markets is one of the London markets most successful specialist sectors, providing lead primary and excess layer terms for almost all industries including construction risks. The rate trend in 2012 for International markets was generally flat with small increases of up to 5% seen for risks with offshore energy exposures. Technical market capacity increased marginally from USD 1.9 billion to USD 2 billion but in practice price and coverage issues limit usable cover to between USD 1.2 billion to USD 1.6 billion. Four new London market entrants and increased capacity from existing markets ensured that competition for what the markets perceive as the best risks continued. This balanced off-market pressure to increase rates to cover increased costs and low investment returns. Certain industries such as mining, oil and gas set capacity challenges due to some of the complex nature of their operations. The traditional territories for the London market are Australia, Canada and Europe. However we are seeing increased opportunities from Latin America, Middle East and parts of Asia, where London has been very competitive and provided significant capacity with wide policy coverage Outlook The quality of the underwriter and client relationship is important on casualty business and consequently most buyers do not move lead markets frequently. However for risks with clean loss records and thereby a more portable risk profile, we expect some rate reductions to be available for the best risks if actively remarketed and the placements restructured. We also expect to see markets compete more for new risks to market, for example those risks that come out of construction projects and or from some of the emerging markets. Industry insights There are numerous areas of liability risk that receive special underwriting attention. These are mostly areas where there can be multiple claimants. The following are a selection from 2012 and are areas we expect the market to continue to focus on in 2013: Bush Fires Flood Damage Pipelines Fracking Tailing Dams We have intentionally not named these as specific industry exposures, because in our experience claimants focus on multiple targets, often those with the deepest pockets as the subjects for claims for damages. Specialist Casualty Industry Sectors Railways and Transportation Construction Risks Automotive Industry Food and Drink Hotels and Leisure Telecoms and Hi Tech Defence Equipment Power Life Sciences Local Authorities and Municipalities Heavy Industry Chemicals Mining Oil and Gas/Energy International Casualty 15

20 Product Recall and Contamination. London Market Capacity 16 Food and Drink Automotive Components Pharmaceutical Contamination Restaurant Contamination Water Contamination Consumer Finished Good Products (varies by specific product) USD 300 million USD 100 million USD 100 million USD 100 million USD 25 million USD 100 million

21 The London market is the centre of excellence for this class of business and there are a number of specialist product recall and contamination markets. The London market capacity is provided by 20 markets which delivered average rate reductions in 2012 and early 2013 of 10%. Contaminated Products Insurance This market provides coverage for consumable product manufacturers for the following four key perils 1. Accidental contamination 2. Malicious tampering of products 3. Product Extortion 4. Government Recall Product Recall Insurance This is a market sector where not only the financial damage but brand and reputational damage is an important factor and industries that produce products in the Food and Drink, Tobacco, Pharmaceutical, Water Utilities, Automotive and Finished Consumer Goods industries are often the main buyers of policy coverage. Policy coverage for third party recall covers costs incurred by retailers and other third parties associated with the recall on behalf of the policyholder and in some cases can also be extended to cover compensatory damages and defence costs Outlook The outlook for 2013 is for increased competition due to several new market entrants in 2012 and one new entrant in 2013 wishing to take market share. We expect to see rate reductions of up to 10% continue with higher reductions being available in special circumstances. The London market is looking to grow their pharmaceutical and U.S. automotive recall business and have developed special products to try to attract and retain business. This market provides coverage for: Non food product manufacturers to cover manufacturing or design errors; malicious product tampering and product extortion, Or Automotive component part manufacturers to cover the removal of faulty parts already delivered to customers but not yet installed into the vehicle; and recall of the finished product (vehicle) due to a faulty part having already been incorporated. This is a market sector where not only the financial damage but brand and reputational damage is an important factor and industries that produce products in the Food and Drink, Tobacco, Pharmaceutical, Water Utilities, Automotive and Finished Consumer Goods industries are often the main buyers of policy coverage. Policy coverage for first party recall covers costs associated with recall, destruction, replacement and redistribution; increased cost of working and loss of gross profit associated with the recall; rehabilitation of the brand name; consultancy services both preincident and post-incident. Aon in partnership with a leading Lloyds syndicate created the first master recall facility in the market that offers bespoke wordings for food and beverage contamination, consumers good product recall, restaurant contamination, automotive component recall and water contamination insurance. In 2012 Aon created a new dedicated facility for the pharmaceutical industry, which is placed with a panel of Lloyds syndicates. As we go to press the potential of claims from the meat supply chain in the UK and Europe has arisen with horsemeat being found in many beef products requiring significant recalls. An industry enquiry is underway and it is at present too early to establish the full extent of the claims, but it does highlight the potential for losses involving a whole sector supply chain in the food industry. Product Recall 17

22 Hospital Professional Liability. Rate Change % to -15 % London Market Capacity 2012 USD 200 million 2013 USD 230 million 18

23 The London market has long been a significant player in the Hospital Professional Liability (HPL) market, with the market traditionally been split between those markets that write exclusively U.S. business and those who write solely non-u.s. risks. Due to significant rate and retention hikes experienced in the first half of the last decade buyers turned to risk improvement to save money and differentiate their risks, with nearly all health providers embarking on patient safety initiatives. The result of these changes was not only great news for the patients but good news for buyers and the insurance markets because there was a significant reduction in claims activity. As a consequence of this positive trend a number of new markets have over the past five years entered the HPL market to compete against the established players. This has resulted in increased completion with average rate reductions of between 5% to 15% seen in 2012 depending on loss profile. The London and European market can provide capacity of up to USD 200 million per risk. There has been a reduction in the number of U.S. health providers due to consolidation in the industry which has added another element to the competitive market environment Outlook The outlook for 2013 is for this softening market trend to continue. The 1 January 2013 renewal season saw an abundance of capacity with existing markets protecting market share and new markets trying to gain a position. Within the HPL market there are a number of clinical areas that require extra attention and Aon and a select number of Lloyds Syndicates have developed exclusive products in many of these disciplines. For example fertility clinics have a unique set of risk features that Aon has crafted a broad policy form to provide coverage for, supported by a specialist claims handling capability. Another example of where the London market has developed added value services is for Mental Health Hospitals, where legal services via a specialist helpline are included. Providing advice on scenerios from unlawful detention to patient rehabilitation. In addition to the pressure on rates, there has also been a softening of policy terms and conditions, including improved batch clauses and the availability of long term agreements at attractive terms. The trend is self-insured retentions is slightly more complex as they can range from USD 5,000 to USD 15 million depending on the organisation but generally reductions can be achieved if traded off against premium reductions that may be available. 19 Hospital Liability

24 20 Appendices.

25 Appendix I IUA London Member Markets Ace European Group Limited AIG Europe Limited Allianz Global Corporate Specialty AG Arch Insurance Company (Europe) Ltd Aspen Insurance UK Limited Assicurazioni Generali S.p.A (UK Branch) AXA Corporate Solutions SA Aviva Insurance Limited Axis Specialty Europe plc Catlin Insurance Company (UK) Ltd SCOR UK Company Limited Sirius International Insurance Corporation (publ) Swiss Re Europe S.A., UK Branch Swiss Re International SE, UK Branch Tokio Marine Europe Insurance Limited (TMEI) Tokio Millennium Re (UK) Limited Torus Insurance (UK) Ltd Transatlantic Re W R Berkley Insurance Europe Ltd XL Re Ltd Zurich Ireland Limited Chubb Insurance Company of Europe SE CNA Insurance Company Limited Endurance Worldwide Insurance Limited Everest Reinsurance (Bermuda) Ltd Faraday Reinsurance Company Limited Federal Insurance Company Global Aerospace Underwriting Managers (GAUM) Great Lakes Reinsurance (UK) Plc Groupama Transport Hannover Re Houston Casualty Company London International Insurance Company of Hannover Limited Lancashire Insurance Company (UK) Limited Liberty Mutual Insurance Europe Limited Markel International Insurance Company Limited Munich Reinsurance Company New India Assurance Company Limited QBE Insurance (Europe) Ltd Royal & Sun Alliance Insurance plc 21

26 Appendix II Lloyd s Syndicates Syndicate Managing Agent 0033 Hiscox Syndicates Limited 0044 Sagicor at Lloyd's Limited 0102 R&Q Managing Agency Limited 0218 Equity Syndicate Management Limited 0260 Canopius Managing Agents Limited 0308 RJ Kiln & Co. Limited 0318 Beaufort Underwriting Agency Limited 0382 Hardy (Underwriting Agencies) Limited 0386 QBE Underwriting Limited 0435 Faraday Underwriting Limited 0457 Munich Re Underwriting Limited 0510 RJ Kiln & Co. Limited 0557 RJ Kiln & Co. Limited 0570 Atrium Underwriters Limited 0609 Atrium Underwriters Limited 0623 Beazley Furlonge Limited 0727 S.A. Meacock & Company Limited 0779 Jubilee Managing Agency Limited 0780 Advent Underwriting Limited 0807 RJ Kiln & Co. Limited 0958 Omega Underwriting Agents Limited 1084 Chaucer Syndicates Limited 1110 Argenta Syndicate Management Limited 1176 Chaucer Syndicates Limited 1183 Talbot Underwriting Ltd 1200 Argo Managing Agency Limited 1206 Sagicor at Lloyd's Limited 1209 XL London Market Ltd 1218 Newline Underwriting Management Limited 1221 Navigators Underwriting Agency Limited 1225 AEGIS Managing Agency Limited 1274 Antares Managing Agency Limited 1301 Chaucer Syndicates Limited 1318 Beaufort Underwriting Agency Limited 1400 Alterra at Lloyd's Limited 1414 Ascot Underwriting Limited 1458 Renaissance Re Syndicate Management Limited 1861 Flagstone Syndicate Management Limited 1880 RJ Kiln & Co. Limited 1882 Chubb Managing Agent Ltd 1897 R&Q Managing Agency Limited 1910 Whittington Capital Management Limited 1919 Starr Managing Agents Limited 1945 Whittington Capital Management Limited 1955 Barbican Managing Agency Limited 1965 Argenta Syndicate Management Limited 1967 Whittington Capital Management Limited 1969 Flagstone Syndicate Management Limited 2001 Amlin Underwriting Limited 2003 Catlin Underwriting Agencies Limited Data Source: Lloyd s Datawarehouse Active Syndicates for

27 Syndicate Managing Agent 2007 Novae Syndicates Limited 2008 Shelbourne Syndicate Services Limited 2010 Cathedral Underwriting Limited 2012 Arch Underwriting at Lloyd's Ltd 2015 Whittington Capital Management Limited 2121 Argenta Syndicate Management Limited 2232 Capita Managing Agency Limited 2243 Starr Managing Agents Limited 2255 Capita Managing Agency Limited 2318 Beaufort Underwriting Agency Limited 2468 Marketform Managing Agency Limited 2488 ACE Underwriting Agencies Limited 2525 Whittington Capital Management Limited 2526 Whittington Capital Management Limited 2623 Beazley Furlonge Limited 2791 Managing Agency Partners Limited 2987 Brit Syndicates Limited 2999 QBE Underwriting Limited 3000 Markel Syndicate Management Limited 3622 Beazley Furlonge Limited 3623 Beazley Furlonge Limited 3624 Hiscox Syndicates Limited 4000 Pembroke Managing Agency Limited 4020 Ark Syndicate Management Limited 4141 HCC Underwriting Agency Ltd 4242 Chaucer Syndicates Limited 4444 Canopius Managing Agents Limited 4472 Liberty Syndicate Management Limited 4711 Aspen Managing Agency Limited 5000 Travelers Syndicate Management Limited 5151 Montpelier Underwriting Agencies Limited 5678 RITC Syndicate Management Limited 5820 Jubilee Managing Agency Limited 6103 Managing Agency Partners Limited 6104 Hiscox Syndicates Limited 6105 Ark Syndicate Management Limited 6106 Amlin Underwriting Limited 6107 Beazley Furlonge Limited Total No. of Active Syndicates for 2011 = Catlin Underwriting Agencies Limited 3010 Cathedral Underwriting Limited 3210 Mitsui Sumitomo Insurance Underwriting at Lloyd's Limited 3334 Sportscover Underwriting Limited 3500 Riverstone Managing Agency Ltd 23

28 24 Contributors.

29 U.S. Property Simon Methven +44 (0) Paul Foreman +44 (0) International Property Massimiliano Roveda +44 (0) Julian Catmull +44 (0) Jorge Artunduaga +44 (0) U.S. Casualty Simon Good +44 (0) Product Recall Kary Yates +44 (0) Hospital Professional Risks Alex Lloyd Baker +44 (0) Mining Eddie Gilbert +44 (0) Metals Mark Parker +44 (0) Craig Dowell +44 (0) Please contact your local Aon office or any of the above for further copies of this report. International Casualty Richard Payne +44 (0)

30 The Global Broking Centre in London is strategically placed in one of the most dynamic insurance markets in the world. Working seamlessly with Aon colleagues in 120 countries, the Global Broking Centre delivers clients direct access to the breadth of Aon s global capabilities and the London and International insurance markets from almost any location. From broking and placement experience to claims advocacy and client service, we believe we offer the very best in the insurance world. Lambros Lambrou Chief Broking Officer, EMEA Chief Executive Officer, Global Broking Centre, London 26

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32 Aon Risk Solutions 8 Devonshire Square London EC2M 4PL United Kingdom +44 (0) aon.co.uk This document has been produced using a minimum of 50% recycled material from a sustainable forest. FP: 7952 Registered office 8 Devonshire Square, London EC2M 4PL Aon plc, All rights reserved. No part of this report may be reproduced, stored in a retrieval system, or transmitted in any way or by any means, including photocopying or recording, without the written permission of the copyright holder, application for which should be addressed to the copyright holder.