With a soothsayer ability to make Mystic Meg blush, Angerstein predicted last week that there may be one empty seat at the prestigious EY World Entrepreneur of the Year awards in Monte Carlo in June 2018.
At the event, the representatives from 60+ counties attend to see who will be crowned the global winner. From New Zealand, the entrepreneur of the year is the Managing Director of insurer CBL Group, Peter Harris (pic).
But even when he accepted the accolade last October, Harris was aware that his group was being scrutinised heavily by regulators in both North and Southern hemispheres for its apparent under-reserving in its largest class of business, French long-tail construction defections insurance, aka dommages-ouvrage (DO)
As re-Insurance.com revealed last week, CBL’s insurance businesses in both Ireland and New Zealand have ceased trading and court-appointed liquidators have stepped in. The share price is suspended and investors have no prospect of getting their investment back. Over 500 employees face the prospect of losing their jobs. Over the weekend the contagion spread to Alpha, the Danish insurer, who was put into solvent run-off partly because of its under-reserving on the same French construction business.
CBL partnered with Alpha in writing DO business on a 50/50 quota share basis (see chart). It was thought to be its second largest independent producer after Elite, the Gibraltar MGA that was itself put into run-off last year following regulatory action over DO business.
Bowing to the inevitable, Harris confirmed last week that he was withdrawing his attendance at the World Entrepreneur of the Year event. As a shoddy French builder might say when confronted by an aggrieved homeowner, “quelle surprise”!