Understanding the Reinsurance Industry

In a nutshell reinsurance is best thought of as “insurance for insurance companies,” a way for a primary insurer to protect against unforeseen or extraordinary losses. It serves to limit liability on specific risks, to increase individual insurers’ capacity and to share liability when losses overwhelm the primary insurer’s resources. It also helps insurers stabilize their business in the face of the wide swings in profit and loss margins inherent in the insurance business.

However the industry is much more complex than one statement, professionals working within the industry are tending to specialise in one area and lose touch with the trends and challenges faced by this global business as a whole. Whether you are new to the industry or need to get back in touch with the dynamics of the industry as a whole, then this course is for you.

Why you should attend

The experienced seminar leaders will help to demystify aspects of the industry that participants might be new to, unfamiliar with or have lost touch with. Topics to be covered include:

• Regulation and solvency
• The role of Lloyds
• Where the underwriter and broker fit into the reinsurance process
• How the risk assessment process works
• The role of the FSA and other regulators
• Basics of the reinsurance contract
• Reinsurance claims from a purely claims perspective together with a litigation perspective
• Key elements of claims reserving
• What happens when a reinsurance company is in run-off?
• Dealing with reinsurance disputes

Who should attend?

• Reinsurance company employees
• Reinsurance broker company employees
• Insurance company professionals
• Lawyers in private practice
• Regulators
• Together with anyone who has recently joined the reinsurance industry

PART I: THE BUILDING BLOCKS
What is reinsurance? Its purposes and functions

• Introduction of basic concepts
• Concepts of sharing/mitigating/laying-off/risk
• Purpose of reinsurance
• Types and structure of reinsurance
• Methods and types (proportional and x/l, treaty and facultative)
• How proportional and x/l work
• Their different uses and purposes
• Markets
• Regulation and solvency
• The role of the Cedant company

Facultative reinsurance

• Concept – ‘individual risks’
• Types
• Premium calculation
• ‘as original’

PART II: THE REINSURANCE MARKET
The reinsurance international market

• London (the role of London as an insurance centre)
• Bermuda
• Continental Europe/“professional reinsurers”
• USA
• Far East and elsewhere
• Their different basic philosophies

The reinsurance markets and the role of Lloyds

• Market structure
• The role of London as an insurance centre
• Council of Lloyds
• Lloyds members
• Integrated Lloyds vehicles

Underwriting and the role of the underwriters

• What is an underwriter?
• Main tasks and challenges of the underwriter
• Underwriting guidelines
• The risk assessment process
• The role of other specialists

Reinsurance brokerage and the role of the broker

• What is a broker?
• Market practice and agency rules
• Regulation
• The duties of reinsurance brokers
• Delegation of function

PART III: LEGAL AND REGULATORY FRAMEWORK
The law of reinsurance – Introduction

• How the contract is formed
• Effect of London Marine Insurance Act 1906
• Courts approach to interpreting reinsurance contracts

The regulation of reinsurance

• The FSA and its role
• Contract Certainty
• Solvency II/Capital requirements
• ‘Dual’ regulation of Lloyd’s
• The new regulatory structure

Reinsurance agreements

• Key drafting concepts (construction, interpretation, implied terms)
• Nature of the reinsurance contract
• Incorporation of clauses
• Key clauses (follow, ultimate net loss, warranties and conditions)
• Law and jurisdiction clauses
• Other key clauses

PART IV: PRACTICAL APPLICATIONS
Reinsurance claims management

• Claim management
• Litigation management from a claim perspective

Elements of claims reserving

• Why reserve?
• Case reserves
• Using information from reinsureds
• What is IBNR (long and short tail needs)

Run-off and commutations

• What is run off?
• Different legal run-off vehicles
• Managing a run-off company
• Actuarial issues
• What are Schemes of Arrangement?
• Commutations explained

Dealing with reinsurance disputes

• Using arbitration (ARIAS UK & USA; Bermuda Form)
• Importance of jurisdiction clauses
• Mediation and other forms of ADR
• Arbitrating in London, Bermuda and the US
• Different rules which apply

Phillippa Rowe is Senior Partner of independent reinsurance consultants Phillippa Ross & Co. Phillippa has ovethirty years experience of insurance and reinsurance claims in Lloyd’s, the London Market and internationally. She began her reinsurance career with fifteen years with the Kiln Group at Lloyd’s. She currently acts as arbitrator, mediator, expert witness and technical consultant in a wide range of claims, wordings and market practice matters and writes, lectures and provides training courses on similar subjects.

David Abbott is a partner in the commercial risk & reinsurance team of Barlow Lyde & Gilbert LLP. David specializes in insurance and reinsurance dispute resolution both in the UK courts and in domestic and international arbitrations. He has acted in a wide variety of disputes relating to both traditional and alternative risks. David’s work also includes a wide range of advisory and transactional work. He is also a member of the firm’s War, Political and Trade Risks Group and has acted in a number of political and trade risk matters. A co-author of Reinsurance Practice and the Law, David has written numerous articles for insurance and reinsurance publications including Insurance Day, The Review, Asia Insurance Review and the Middle East Insurance Review. He is also recommended in the Legal 500, 2009 and Chambers & Partners, 2010.

Michael G. Cook is Associate Partner, CSC Financial Services, Europe Middle East & Africa. He has over 22 years of experience in the London Market. He has specialised in long-tail claims liabilities, estimation and analysis, audits and inspections and reinsurance recoveries. Michael has worked across North America, the UK and Europe serving many of the industries’ largest companies such as Lloyd’s of London, Equitas, QBE, Transatlantic and Royal & Sun Alliance.

Richard Cook joined Xchanging Claims Services Limited as Chief Adjuster and Head of Reinsurance in April 2006 having held a series of senior claims positions at Lloyd’s Managing Agencies and London Market Companies over the past 26 years. In his current role, he is responsible for over 36,500 open claims files with reserves in excess of £2.6bn encompassing all marine and non-marine reinsurance claims at XCS. He trained as a lawyer and has acted as an expert witness on aspects of reinsurance in courts both in London and the USA and serves on a number of Market Committees, including the Lloyd’s Reinsurance Claims Group and the Lloyd’s Chilean Earthquake Steering Group.

Charlie Cowan is a Claims Performance Manager with Lloyds. In addition to working more than fifteen years as a American insurance coverage attorney, Charlie served as in-house counsel to Lloyds’ run-off provider, Equitas Management Services Limited, and as Vice President of Legacy Claims for Great American Insurance Company in Ohio. Kevin Moon is a Claims Performance Manager for Lloyd’s. He is an associate member of the Chartered Insurance Institute (ACII). He joined the Claims Performance Management Directorate at Lloyd’s in 2007. Prior to joining Lloyd’s, he had worked at three Lloyd’s broking houses and most recently acted as Senior Reinsurance Claims Adjuster handling North American casualty claims for Equitas Limited. Kevin is responsible for a portfolio of Lloyd’s Managing Agents ensuring that each agency meets the required standards of claims management established to protect and maintain Lloyd’s global reputation.

Melanie Rouvray-Kampe works in claims and reinsurance within the Group Legal Services Department at the head office of the Hannover Re Group in Hannover, Germany. The section is responsible for the legal support of the operational business such as drafting of wordings, clauses and reinsurance agreements and all types of litigation, arbitration and mediation as well as the handling of special claims. She gives legal support to the UK, Canadian and Australian treaty and facultative departments as well as the Structured Reinsurance Division.

Fred Shearer is a Broker at Bell & Clements Limited. Bell & Clements Limited (“BCL”) is a Lloyd’s Broker and is authorised and regulated by the Financial Services Authority. It offers insurance and reinsurance intermediaries throughout the world access to Lloyd’s of London and to London, European and Bermudian companies.

David Vaughan is COO of Tawa where he is responsible for developing its business via acquisitions, extracting value from CX RE and its other run-offs and directing and overseeing Tawa’s service provision to the insurance market. David was a partner in the Insurance Business Restructuring Services Division of PwC prior to joining Tawa in May 2001 and has specialised in the insurance and reinsurance industry since 1987 with extensive experience in advising underwriters, brokers, underwriting pools and life companies. David focuses on advising run-offs on exit routes, run-off strategy, financial restructuring, effectiveness reviews, support on reinsurance disputes and insolvency advice.

Susannah Wakefield is a partner specialising in the London office of Taylor Wessing in insurance and reinsurance litigation and arbitration. She brings to Taylor Wessing her unique background and experience in (re)insurance dispute work, having practiced for many years in New York and Bermuda as well as in London. Susie has advised Bermuda, U.S., and London Market insurers and reinsurers in litigation in federal and state courts in New York, in the Supreme Court of Bermuda, in the High Court and in arbitration. She has represented clients in complex, multi-million dollar disputes, including cases with substantive international and multi-jurisdictional aspects.

Peter Wedge is Legal Counsel at Infrassure (an energy and infrastructure insurer). Prior to this, he worked for SCOR, most recently in New York, as Global Head of Inspections and Claim Solutions, acting as a Director of General Security Insurance Company Limited. Previously, he was Head of Claims at Alea Europe and Legal & Claims Counsel at Swiss Re. He has 24 years experience in the insurance and reinsurance industry.

Reinsurance Contract Wordings and Disputes

Advanced Reinsurance Contract Wordings

• Aspen Re
• Bell & Clements
• Builders' Credit Reinsurance Company SA
• Canopius Services Ltd
• Clyde & Co LLP
• CSC Financial Services
• Execution Noble Ltd
• Financial Insurance Company Ltd
• Freshfields Bruckhaus Deringer
• Garant Versicherungs AG
• Guy Carpenter & Company GmbH
• Hiscox Insurance Co Ltd
• Horten
• Lloyd's
• Lloyd's of London
• Novae Group plc
• Polskie Towarzystwo Reasekuracji SA
• PRO Insurance Solutions
• PRO Insurance Solutions Ltd
• RFIB Group Ltd
• Shell Finance Switzerland
• Sidley Austin LLP, Solicitors
• Towers Watson (Re) Insurance Brokers Ltd