Italian insurer Amissima Assicurazioni has approached the legacy market over the disposal of an Italian medical malpractice (med-mal) run-off book, The Insurance Insider understands.
The run-off book is thought to hold around EUR90mn ($104mn) in reserves.
The portfolio is likely to be marketed widely. Interested parties may include legacy heavyweights such as Enstar, Catalina and Armour as well as European-focused players such as Compre and Darag.
Amissima declined to comment.
Amissima offers both life and non-life products spanning personal and commercial lines. It is 100 percent-owned by global investment manager Apollo.
Apollo is well versed in the workings of the legacy market, having recently increased its stake in Catalina to 90 percent and committed a further $700mn in equity to the carrier.
Some will interpret Amissima’s move to rid itself of old liabilities as a positive sign that the run-off market is opening up in mainland Europe, where carriers have been slow to bring books to market in comparison to the UK and the US.
Sources told this publication that there is a tide of legacy Italian med-mal liabilities locked up in the market, and while run-off carriers see the potential opportunity there, many are currently assessing how much appetite they have for this particular exposure. One source suggested they had seen Italian med-mal run-off books running loss ratios of as much as 300 percent.
It was toxic Italian med-mal liabilities that brought Lloyd’s carrier Marketform, now known as Neon, to its knees around four years ago.
Syndicate 2468 in 2016 struck a reinsurance-to-close deal with Enstar’s Shelbourne Syndicate 2008 for the 2007 open year. The final net reserve number for the book was around £100mn.
By this time, the Italian med-mal book on the 2007 open year had pushed the year of account to a cumulative loss of £201mn.
Other Italian med-mal legacy disposals include Brit’s sale of a $65.5mn book to Riverstone in 2015. Brit wrote a portfolio of Italian med-mal between 2007 and 2010 in partnership with agency Faro.
In 2014, QBE purchased a comprehensive reinsurance deal for $390mn to remove the reserving risk from its Italian and Spanish med-mal books.
It was later revealed that Armour took the “unlimited” layer of the deal, in excess of a primary reinsurance layer. At the time it was thought Armour may have partnered with another capital provider to finance what would be a major deal given the size of the business.
Other continental European med-mal deals include Zurich’s disposal of a EUR400mn book to Catalina last year.
Zurich is also trailing a book of Spanish legacy med-mal business that has liabilities of just under EUR200mn. However, no move has yet been made to sell this portfolio.