Lloyd's syndicates set up shop closer to U.S. brokers Hiscox Group follows Beazley in establishing office in U.S. to write smaller premium business By Phil Zinkewicz
This year, the London-based Hiscox Group will become the second Lloyd’s of London syndicate to open an office in the United States. Hiscox is a specialty lines insurer that writes what its chief underwriting officer, Robert Childs, describes as a “particular range of personal and commercial risks,” including fine arts and jewelry, classic cars, bloodstock and kidnap/ransom, as well as other specialty lines products. Childs says that Hiscox USA, based in New York, will continue to write the same kinds of exposures in the United States. (Hiscox’s participation in the fine arts market is described in a story here.) “Roughly 50% of the Hiscox Group’s business is in the United States anyway,” said Childs in an interview with Rough Notes. “This move into New York brings us closer to that business. Before this, we were writing U.S. business with wholesale brokers in the U.S. who had to go first through a London broker. That method of distribution accommodated large accounts, but with smaller premium business, it makes more sense to have an office in the U.S. We are still happy with our relationships with London brokers. We just wanted to get closer to our U.S. clients.” Ed Donnelly is president of Hiscox USA. He reports to Childs and is based in Armonk, New York. He is also in charge of launching and rolling out Hiscox’s specialty products for businesses outside the Fortune 1000 that are placed through U.S.-based local and regional brokers. “Ed has more than 21 years of underwriting experience from roles at AIG and Professional Indemnity Agency (PIA), owned by Houston Casualty,” said Childs. “Most recently, as senior vice president with PIA, he started and grew a highly successful book of nontraditional professional indemnity business. This included recruiting and managing a team of underwriters and support personnel over a period of 16 years. A board trustee with the College of Mount Saint Vincent’s in New York City, Ed has a B.S. degree from the Georgia Institute of Technology.” David Chavez joins Hiscox as U.S. technology underwriter. He will work with the Global Markets TMT team to develop their relationships with brokers and clients in the United States. Chavez joins Hiscox USA from PeoplesoftInc, where he was assistant general counsel. Early last year, Rough Notes reported that Beazley Furlonge Syndicate at Lloyd’s of London was the first of that market’s syndicates to open offices in the United States. (May ’05 issue, page 62). Before setting up that office, Beazley was writing some $628 million in premiums in the United States, mostly large-scale business written through Lloyd’s brokers. At its U.S. office, which was established in March 2005, Beazley’s focus has been specialty lines insurance for middle market and upper end small market businesses, using U.S. independent agents and brokers as its distribution system. Nicholas Bozzo, formerly of AXIS U.S., where he was senior vice president, underwriting, heads up Beazley’s U.S. operation. In November 2004, Beazley announced that it was acquiring Omaha Property & Casualty Insurance Company, a 50-state U.S. admitted insurer, in anticipation of the new operation’s (Beazley USA) writings in the United States. “Beazley wanted to pursue the middle market and upper end of the smaller market in the United States but recognized that going through Lloyd’s brokers was not practical,” said Bozzo. “Many Lloyd’s brokers have a significant amount of larger risks and they do a great job for Beazley, but to approach the middle market, Beazley decided that it would be necessary to get closer to the customer and to allow the customer easier access to Beazley specialty lines products. That’s when they decided to open an operation in the U.S.”
Both Childs of Hiscox USA and Bozzo of Beazley USA said that eliminating the time difference between London and the United States was an additional factor in opening offices here. After a little less than a year of operation, Bozzo said, Beazley’s business in the United States is progressing as he had hoped it would. “We have received an excellent response from the U.S. brokerage community,” he said. “The results in our middle market business have been very positive. We have developed major changes to the wording in our architects and engineers product. Our U.S. office is truly the culmination of our global strategy.” Rough Notes asked both Bozzo and Childs whether their moves into the United States might worry leaders in the London market. Both men emphasized that their operations in the United States will not in any way have a negative impact on their relationships with the Lloyd’s market or with London brokers. Childs added: “If you see people who are part of a marketplace taking alternative actions, Lloyd’s will take notice. But I want to make it clear that our operations in the United States are intended to be in addition to, not instead of, our operations in Lloyd’s.” When asked to comment on the situation, Thor Valdmanis, a spokesman for Lloyd’s America, said: “Lloyd’s works hard to promote the market and brand in the United States. However, if some syndicates feel they need to set up shop here to take advantage of opportunities, that is certainly their prerogative.” * |
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