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24 November 2017

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Armour wins exclusivity for QBE US commercial auto book

Catrin Shi and Adam McNestrie 14 November 2017

QBE is in exclusive discussions with Armour on a $500mn US legacy book that holds predominantly commercial auto exposures, The Insurance Insider understands.

Sources also told this publication that QBE is looking to bring a $500mn legacy portfolio of US assumed reinsurance and workers\' compensation exposures to market in a process being run by TigerRisk.

Indicative bids for the reinsurance and workers\' compensation book have been submitted, but it is further understood the auction has been postponed until 2018, as the timeline to dispose of the book was deemed too tight.

This publication first revealed in September that the Australian carrier was looking for a home for the US commercial auto book , which also holds some other liability exposures.

JLT Re was appointed to secure a loss portfolio transfer that would effectively shift the liabilities to a legacy carrier.

Run-off players said to have been interested in the book include Catalina, Enstar and Sirius.

QBE has been one of the more active live carriers in managing its back books.

In January Enstar completed a deal to take on another legacy portfolio from QBE, as first reported by this publication.

That transaction, also arranged by JLT Re, involved a US multi-line P&C book with gross reserves of $919mn.

The Sydney-headquartered insurer has worked with Armour on two legacy deals related to old UK employers\' liability (EL) business and Italian and Spanish medical malpractice liabilities.

In 2014, Armour took the "unlimited" layer of a $390mn comprehensive reinsurance deal purchased by QBE to remove the reserving risks for its legacy med-mal books.

Then in July last year, QBE agreed another transaction with the run-off carrier to hand on its legacy UK EL book, which holds significant hearing loss exposures.

In addition, QBE tapped the legacy market in 2015 to dispose of its share of Ridgwell Fox, an insurance pool containing the liabilities of nine carriers in run-off.

TigerRisk and QBE declined to comment, Armour did not respond to a request for comment.

This article was published as part of issue November 2017/2

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