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(Re)insurance execs shrink holdings while stocks underperform

The top executives of various (re)insurers have sold down or surrendered their holdings in their companies in recent months, as market volatility has piled pressure onto their stock prices.

Research by The Insurance Insider's Data Room showed that in Bermuda CEOs, financial directors and COOs disposed of approximately $10.8mn worth of shares between 1 March and 10 June, while the total value of shares bought across the cohort was $7.7mn.

However, this $7.7mn stock purchase happened under a single transaction at Endurance, where CEO John Charman exercised an option and bought 160,000 shares at $48.2 per share.

The executive directly held 971,225 shares in the company as of 3 June, or 1.5 percent of Endurance's total number of shares. This was alongside approximately 2.4 million shares held indirectly, equivalent to 3.5 percent of the total number.

Charman's indirect ownership also increased during the same period, with 290,000 shares purchased at a total value of $19.8mn at the beginning of June in two separate transactions.

However, Endurance's CEO was most active in February 2016 in terms of increasing his indirect holdings in the company, buying 510,463 shares for an aggregate amount of $31.1mn.

The carrier's share price generally trended upwards, closing on Friday (10 June) at $67.63 per share, 5.3 percent up from the closing price three months before. This was the largest stock growth among our Bermudian cohort during the analysed period.

The rest of the transactions among the Bermudians were predominantly share surrenders, which insiders can use to pay back taxes to the company or cover the cost of an option exercise.

The largest such transaction happened at XL Catlin, where CEO Mike McGavick carried out a non-open market acquisition and exercised an option for 136,065 shares at $0, while surrendering 62,757 shares for a total of $2.2mn on 1 March.

On the same day, the (re)insurer's CFO Peter Porrino executed a similar deal and exercised 39,186 shares and surrendered 14,942 shares with an aggregated value of $517,591.

Meanwhile, at Axis both the COO and CFO carried out share surrenders in the past three months.

Albert Benchimol, the company's CEO, surrendered 5,755 shares with a total value of $313,648 on 20 May, shrinking his total direct ownership to 304,865 shares in the reinsurer.

A couple of months earlier, CFO Joseph Henry also surrendered some of his shares to the company, giving back $112,367 through 2,048 shares.

The largest number of share surrenders took place at RenaissanceRe, with the CEO and the COO having returned a total of $1.6mn to the company since 1 March.

CEO Kevin O'Donnell surrendered 8,211 shares in total worth $943,298, while COO Jeffrey Kelly carried out two transactions in which he gave back 5,595 shares worth $642,564.

Furthermore, on 9 June O'Donnell sold 10,000 shares, which lowered his holding in the company to 82,728 shares or 0.65 percent of RenRe's total number of shares.

Arch clearance

Stock disposals were also a popular active investment strategy among top executives at Arch.

The company's CEO Dinos Iordanou sold 40,000 Arch shares for $71.58 on 24 May, a sell-off worth $2.9mn - the largest dollar amount among the group analysed by this publication.

Following the transaction the CEO directly held 293,030 of the reinsurer's shares, or 0.24 percent of total shares outstanding, as well as 571,752 shares indirectly.

Around the same time president and COO Marc Grandisson offloaded 30,000 of his shares for $2.1mn, leaving 573,952 shares under his direct ownership, or twice as many as Iordanou.

Soon after, Arch CFO Mark Lyons joined the club and raised $720,293 through the sale of 10,000 shares carried out on two different transactions at the beginning of June 2016, the company disclosed.

Zyskind holds 8% of AmTrust

AmTrust's CEO Barry Zyskind had the most significant shareholding among the top chief executives in this publication's analysis, with 8.05 percent of the carrier's total number of shares in trading.

As of the last transaction performed by the executive on 18 March, Zyskind owned approximately 14 million AmTrust shares, while the reinsurer's stock volume was 173.9 million shares.

In the disclosed transaction, Zyskind performed a non-open market disposal at $0 per share of 150,000 shares.

Prior to that on 5 March, the CEO exercised an option to acquire 125,000 shares at nil value and surrendered 66,438 shares for a total value of $1.7mn.

According to company disclosures, the second highest major direct holder in AmTrust was George Karfunkel, the brother of the carrier's late founder Michael Karfunkel. He had 9.7 million shares as of 30 December 2015, or 5.6 percent of the company's total trading volume.

AmTrust's CFO Ronald Pipoly also disposed of a total of 12,000 shares for $310,460 during the period analysed.

In addition, Pipoly received 24,642 shares through an exercised option and surrendered 12,291 shares worth a total of $316,247, leaving him with 583,313 shares in the company.

COO Michael Saxon also chose to exercise 25,170 AmTrust shares for $0.0, while returning $323,040 through 12,555 shares in the same transaction. This left him with 605,434 shares in the company.

Lancashire performs defensive buying following Cathedral exit

The top two executives at London-listen carrier Lancashire, CEO Alex Maloney and CFO Elaine Whelan, directly bought a total of 101,998 million shares worth £564,755 in the past three months

This series of transactions was performed in the context of Lancashire's stock price being under pressure as the market reacted to the news of multiple resignations.

In December 2015, The Insurance Insider revealed that Peter Scales and John Lynch, respectively CEO and CFO of its Lloyd's insurer Cathedral, were leaving the group.

Late in February 2016, Cathedral's active underwriter John Hamblin resigned, followed by treaty head Mark Wilson, direct and facultative property head Simon King and US regional property treaty underwriter Nicholas Destro.

As a result, Lancashire's share price began the following month with a 6.7 percent fall, closing at 553.5p on 1 March from 590.5p the day before.

On the same day, Lancashire's CEO Alex Maloney bought 44,553 shares at 560p per share, adding them under his direct ownership.

In addition, CFO Elaine Whelan purchased 29,500 shares for 561p each, increasing her direct holding to 314,069 shares.

Furthermore, non-executive director Peter Clarke carried out a similar transaction and bought 14,000 shares in Lancashire at 551p - his first holding in the company.

Two days later (3 March) Whelan's spouse Kilian Whelan bought 8,990 shares for 555p each. On that day, shares opened at 551.5p and reached a peak of 557.5p.

A couple of months later, on 5 May, Maloney purchased 18,955 shares for 526.5p each to take his interest to a total of 345,516 shares owned directly and an additional 100,000 shares owned by connected people.

The stock price is yet to fully recover since the initial shock, peaking at 585.5p on 24 May but then dropping again to 528.5p at last Friday's close (10 June).

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