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The Week in 90 Seconds: D&O SPAC fears; Climate pricing and competition

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If you only read a handful of stories this week, make it the selection below.

D&O and the SPAC boom: Litigation fears abound

Our deep dive into the special purpose acquisition company (SPAC) boom in the US revealed mounting fears in the D&O market as losses begin to pick up.

In this analysis, we looked at the steady stream of claims being brought against SPAC IPOs as the plaintiff bar encourages clients to litigate against the blank-cheque companies and their eventual merged entities.

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All of this means further potential volatility for the D&O market, which is only just beginning to recover from 2020’s turmoil thanks to new capacity easing the strain.

For a complete lowdown, click here.

Climate change pricing, competition and ratings agencies – the big question

Climate change has been hitting the headlines this week, with the UN’s COP26 conference at the end of the month drawing near.

Heavy cat activity in both the US and Europe this year has intensified discourse around climate change and its impact on the affordability of cover within the insurance sector.

As renewals season gets underway, a number of reinsurers have telegraphed to the market the need to increase rates to cope with the additional cat load that climate change brings.

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But one of the key questions within the market is how the need to properly price for climate risk can be undermined by intense competition.

In this analysis, we look at how pricing in climate change can present a competitive disadvantage, at least in the short term, for (re)insurers – and how ratings agencies might be able to help.

Click here for the full detail.

CFC’s record deal: The bull and bear cases after the historic coup

In an exclusive this week, we revealed that London market darling CFC had signed a deal with private equity houses EQT and Vitruvian for a minority stake which will mean the MGA being valued at north of £2.5bn ($3.5bn).

The valuation is equivalent to a multiple north of 40x Ebitda, around three times as high as insurance industry benchmarks, reflecting the perception of some bidders that CFC’s tech capabilities make it as much a technology play as an insurance one.

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In an interview with this publication, CFC group CEO David Walsh said the business will not need to pursue inorganic growth through M&A using its newly acquired firepower, instead focusing on the “enormous runway” of organic growth ahead of it.

But while the deal is certainly a coup for the business and demonstrates that CFC is in a league of its own among MGAs, there are still risks to the growth potential of its business model.

In this analysis, we set out the bull and bear cases for CFC’s continued success, looking in particular at the challenges of growing without its own capital.

Click here for the full detail.

Execs on the move

Aon UK’s global broking centre CEO Richard Dudley is to take on the new role of global head of climate strategy.

Head of international financial lines at The Hartford David Robinson has resigned.

Former Willis Towers Watson emerging markets fac leader Julian Samengo-Turner is to take up a role at AJ Gallagher.

Willis Towers Watson’s regional leader for Middle East and Africa downstream natural resources William Peilow has resigned.

And finally...

A selection of other popular stories from this week.

Willis wins airline clients from Marsh amid intense competition in aviation

Marsh McLennan hires 5,000 staff and sees no soft market in near term: Glaser

IQUW to acquire Agora and combine property teams

Hamilton to drop property treaty from Syndicate 4000

Shedding light on the ‘organised chaos’ in cyber

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