Wednesday, 30 November 2011
Network Assurex to offer more support to medium-sized brokers
There is good news for German risk and insurance managers as medium-sized commercial brokers in the country who have problems finding suitable employees to continue their company’s legacy once key staff have retired can reckon on more financial support from brokers’ network Assurex.
Stefan Nill, who was recently named global chairman of commercial insurance brokers’ network Assurex, is seeking to extend the activity of the network’s perpetuation pool in order to help members to stay independent and allow their business to continue when leading staff retire.
So far, the pool operates only on behalf of brokers in the US. However, it will soon offer its services to clients in Europe as well, Mr Nill said.
“There are a lot of brokers who have to sell their business to larger competitors because they have no suitable successor who could continue the business when the managing director retires,” Mr Nill told Commercial Risk Europe. “By extending the perpetuation funds to the European countries, we want to try to keep our partners as independent network members, which is also in the interest of corporate insurance buyers as well as of insurance companies.”
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The pool, named Assurex Development Corporation (ADC), is an affiliate of Assurex, and is currently funded by regional US banks and insurers like CNA, Chartis and Chubb.
Using capital committed by the insurers and the banks, ADC provides assistance and low-interest loans to partners. In addition, the pool provides assistance in acquisition projects.
“Currently it can spend $85m a year, but we have plans to extend this amount,” Mr Nill said. He wants to find new insurance partners in the European market who also want to provide capital. Mr Nill believes it is attractive for German insurers to participate, as a competitive broker market brings them not just stability but often more profitable business.
“At the moment, an accounting firm is checking whether the legal conditions are compliant with the laws of Germany and other European countries,” Mr Nill said. “After that we plan to approach large insurers, probably in the first quarter of 2012.”
Another of Stefan Nill’s plans for 2012 is the business expansion of Leue & Nill’s newly founded reinsurance broker Safe Brokers Ltd. The broker specialises in Greek and Cypriot risks.
“Our Greek broker partners often ask us for help when they realise that regional insurers lack adequate capacity for larger corporate risks,” said Mr Nill. “We want to be an alternative for those who cannot afford the expensive cover from the London market.”
As a reinsurance broker Safe Brokers buys cover from Germany, Singapore, the UK and Switzerland—especially for corporate clients who do not find adequate cover for their plants and factories. Currently, seven specialists are employed in the region.
The new broker concentrates on industries such as construction, steel and metals, oil and gas and tourism. Despite the Greek debt crisis Mr Nill is not afraid that the economic circumstances could have negative effects on new business.
“There are the same corporate risks in Greece as in the rest of Europe,” he said. “European reinsurers are checking them and after that are not more reluctant to cover them than elsewhere.”
Although the broker is only a few weeks old it has already won several clients. “Currently we have a premium volume of €3m, our plan is to work profitably in three years time,” Mr Nill said. He also has other plans. “I do not exclude other foreign activities during the coming years.”
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