Insurer working with Risk Management Partners to transfer risks to other underwriters

Chartis

Chartis has been offloading its UK public sector business to other insurers due to “challenging” and unsustainable underwriting conditions, particularly in liability lines.

The insurer said on Monday it was working with A J Gallagher’s subsidiary Risk Management Partners (RMP) to transfer its risks to alternative underwriters, and its involvement will be limited to providing run-off administrative and claims handling services.

Insurance Times understands that the transfer could potentially involve staff moving from Chartis to the other insurers involved.

The same day, Gallagher announced that RMP had signed a major deal with QBE Europe under which QBE will underwrite RMP’s public sector business from 1 July.

Challenging conditions

A Chartis spokesman said: “Underwriting conditions for public sector risks have remained challenging over several years, especially in the liability lines where we have seen a combination of increasingly adverse claims and prolonged soft market conditions.

“We decided that, unless we could secure adequate and sustainable terms, we would have to withdraw from underwriting UK public sector risks for the time being.”

The spokesman continued: “We realise our withdrawal is potentially disruptive for clients and have worked with Risk Management Partners and A J Gallagher to support their discussions to find new underwriting capacity and manage the transfer.”

The QBE deal, meanwhile, comprises all the major classes of business with significant premium volume and market share for a range of public sector clients, from district councils to large urban metropolitan boroughs, and includes social housing, ambulance, fire and police exposures.

Property and liability

It will primarily cover property and liability business, while other classes include motor, officials’ indemnity, directors’ and officers’, environmental impact liability,
erection all risks, personal accident and fine art.

RMP chairman Kaz Janowicz said: “A new partner will allow us to continue to build and grow our core support to brokers and clients within the public sector.”

Janowicz added: “We are most grateful for the valuable relationship we have forged with Chartis over the last seven years. We will continue to work closely with
them to arrange appropriate and compliant transfer of business to our new partners.”

Talking Points …

● Which insurers are driving down rates in liability to near unsustainable levels?

● Can QBE make money out of a line of business that Chartis has exited because of adverse claims and soft rates?