Managing Agent Name: Jubilee Managing Agency Limited
Subject: Disclosures Auction Season 2013
Syndicate(s) Affected: 779
This statement has been prepared by Jubilee Managing Agency Limited (“Jubilee”) for the purpose of disclosing to existing and prospective underwriting members of Syndicate 779 (“Syndicate”) the other information which may be of relevance to such members in considering their participation for the 2014 underwriting year of account (“YOA”).
Members are also referred to the Business Plan 2014 narrative, other SBF documents, and the Syndicate’s latest financial statements and quarterly returns, all of which have been provided to members (or their representatives as appropriate), and which include information on various changes affecting Jubilee and/or the Syndicate which have taken place since the end of 2012.
Change in managing agency ownership & transition of managing agency operations
On September 16, 2013, Jubilee’s parent company entered into an agreement with ANV Holdings BV to combine their Lloyd’s managing agency operations, whereby ANV Syndicate Management Limited (“ASML”) will acquire all shares in Jubilee upon completion of the transaction. As part of the purchase price, RSG will obtain 20% of the shares in ANV Syndicate Management Limited. Other commercial details of the transaction will not be disclosed. The Syndicate remains under the management of Jubilee until completion takes place. At that point it is intended that management of the Syndicate will transfer to ASML. The Syndicate’s 2014 business plan is unaffected by the proposed transaction and remains unchanged from the version submitted to Lloyd’s on September 12, 2013.
It is anticipated that senior management of Jubilee and ANV Syndicate Management Limited will be consolidated after completion and that the team working for the syndicate will not materially change. The transaction does not include the service companies Jubilee Service Solutions Limited, Lutine Assurance Services Limited and Jubilee Europe BV. These will remain as subsidiaries of Jubilee Group Holdings Limited.
Completion of the transaction is expected in the fourth quarter of 2013 following confirmation of customary closing conditions and regulatory approvals.
Jubilee’s Board consists of Max Taylor (Non-Executive Chairman), Malcolm McCaig (Non-Executive Director), Mike Ramsey (Non-Executive Director), Frank Phillips (Chief Executive Officer, appointed 10 July 2013), Chris Biles (Active Underwriter, Syndicate 5820), Ben Gilman (Chief Risk Officer), Eamon Brown (Chief Underwriting Officer, interim, appointed 20 August 2013), Janice Hamilton (Finance Director) and Carin Verhagen (General Counsel). Johnny Rowell, former CEO, stepped down on 10 July 2013.
In due course after completion of the transaction with ANV, the Boards of Jubilee and ASML will be consolidated.
Open 2010 YOA
The Syndicate’s 2010 YOA did not close within the usual Lloyd’s reinsurance to close (RITC) cycle and remains open. However, Jubilee is confident that the Syndicate’s 2010 YOA will be in a position to be closed simultaneously with the RITC of the 2011 YOA in February 2014.
Agreement with certain capital providers in respect of 2010 and 2011 YOAs
Under an agreement with certain capital providers to the 2010 and 2011 YOAs, moneys held in respect of the 2010 and 2011 YOAs may not be co-mingled with moneys held in respect of subsequent years. Jubilee is confident that the 2010 and 2011 YOAs will close. However, in case of any unanticipated circumstance preventing the RITC, this may increase strain on working capital and potentially necessitate a cash call on members participating on those subsequent years, including the 2014 YOA.
Relationship with reinsurance group
In the interests of transparency, Jubilee wishes to advise members that separate subsidiaries of a single reinsurance group act respectively as a capital provider to Syndicate 5820 and as a provider of significant reinsurance protection to syndicate 779. Jubilee wishes to emphasise that these arrangements were entered into and continue to be managed independently of each other, and involve separate entities and a distinct group of individual employees within the corporation in question. As such, neither element of the relationship is conditional on or influenced by the other.
Prospective aligned capital participation
Jubilee’s ultimate shareholder also participates on the Syndicate’s 2012 and 2013 YOAs through Jubilee Corporate Member LLP. It is anticipated that Jubilee Corporate Member LLP will maintain its participation for the 2014 YOA at the same premium limit as for the 2013 YOA.
The Syndicate currently purchases substantial reinsurance protection for a specific programme. The renewal of this reinsurance cover for the 2014 YOA is subject to approval by Lloyd’s. In the event that Lloyd’s does not approve the reinsurance, it is possible that the Syndicate would decide no longer to write the programme in question, which would reduce SBF gross net premium income by £2.0 million and SBF net underwriting profit by £0.3 million, though Jubilee would endeavour to make alternative use of this capacity through participation on other business.
Related parties transactions
Under the 100% ownership of Ryan Specialty Group, LLC (“RSG”), Jubilee is currently subject to a variation to its regulatory permission under which gross net premiums produced to a Jubilee Syndicate by other RSG entities in a given YOA may not exceed 20% of that Syndicate’s stamp capacity in that YOA. Business produced from four RSG companies is currently excluded from the calculation of related parties business under the 20% rule. RSG and Jubilee are voluntarily making changes to corporate structure and their interpretation of the related parties’ restriction which will have the effect of removing these exemptions from all these companies except Lutine Assurance Services Limited. It is a matter of strategic importance, particularly given its ownership that Jubilee should be free of conflicts of interest in both fact and appearance, and these changes to structure and internal rules are designed to help formally ensure this.
Members are also advised that Jubilee currently has outsourcing and third-party administration agreements in place with other RSG companies. Such contracts are transacted on a case-by-case and arm’s-length basis.
There are no related party transactions with ANV Syndicate Management. It is not clear how this restriction will continue to operate following the sale of JMAL to ASML, if at all.
Date issued: 20 September 2013
Agency contact name: Andrew Hall
Agency contact no: + 44 (0)20 7220 8669
For auction office use only: D2013014
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