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Banks and other financial institutions are both consolidating their captive insurance companies and launching new captives in a range of domiciles, according to regulators and industry observers in this week’s BestWeek U.S./Canada.
As the banking industry has engaged in a wave of mergers and acquisitions — Bank of America/Merrill Lynch, PNC/National City, Wells Fargo/Wachovia, to name a few — banks and related financial entities have been consolidating their captives. In better economic times, financial institutions often did not worry about winding down potentially superfluous captives, but in this climate they are striving to be more efficient, Nancy Gray, regional director for the Americas for Aon Insurance Managers told BestWeek.
This week’s BestWeek Europe reported that on Jan. 27, bondholders of London-based insurer Pearl Group will decide whether to accept an offer by Pearl that would sharply reduce the value of their holdings. The vote, effectively brought on by the impact of the credit crunch on Pearl, could affect Pearl’s plan to seek a premium listing this year on the London Stock Exchange. Pearl’s focus is on acquiring closed life insurance runoff operations in the United Kingdom.
Also, in BestWeek U.S./Canada, insurers need to do a better job of attracting new talent by emphasizing how resilient the insurance industry has been, according to LoriAnn Lowery-Biggers, who was recently hired for the newly created role of president of field operations for Navigators Management Co. Inc. Investment banks, auditing firms and consulting firms have “been a big draw for some of the best and the brightest talent out in the marketplace because we as an industry haven’t told our best story…if you look over the last 12 to 18 months [you’ll see] how incredibly resilient we’ve been in a time of economic crisis,” Lowery-Biggers said.
BestWeek is published by A.M. Best Co. for insurance professionals. To subscribe, visit http://www.ambest.com/sales/BestWeek.
Founded in 1899, A.M. Best Co. is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.