Risk Matters - Spring 2014

Welcome to this spring 2014 edition of Risk Matters, your guide to the latest themes and subjects affecting domestic and international insurance markets.

In this issue, we explore emerging topics that position the insurance industry in a variety of roles as both leader and intermediary.

Our guest commentators in this issue are Rod Logan and James King from the Association of British Insurers. In the article, they explain how the sector is delicately placed between a new regulator (FCA) with an expanded remit to promote competition, and the consumer, whose protection is its other primary goal. Within that dynamic, they point out that with no less than five overlapping competition and regulatory enquiries already underway, the FCA is yet to properly map out how it will promote both compliance and competition. Therefore they provide five recommendations for both sides so that they might contribute to a relationship that benefits insurers and consumers alike.

Meanwhile on a more commercial footing, CMS lawyers are regularly instructed on some of the most innovative projects within the market. In this issue of Risk Matters Aaron Fairhurst and Jason Zemmel consider the potential of new types of warranty and indemnity products that are driving M&A activity across the globe. Successful M&A and investment transactions are obvious signs of an economic recovery and Nancy Eller continues this theme with a report on the increasing role played by insurers to bridge the funding gap for infrastructure and energy.

While insurers seek out new opportunities for their funds under management, Melville Rodrigues details the regulatory hurdles facing them as they navigate the alternative investment market. He explains how there will be a ‘double-whammy’ business effect on managers of a fund-of-funds (FoF) that invest in private equity, hedge, real assets and other alternative investment funds, with many managers requiring new authorisations as soon as July 2014.
Returning to the non-life sphere, 2014 has already been a year in which property insurers have endured heavy weather-related losses globally and here in the UK. Simon Kilgour details this country’s development of Flood Re, a pooled system funded by a levy on household policies that aims to provide cover for ‘at risk’ properties. As Simon reveals, the questions still outnumber answers on this particular scheme.

Also changing in 2014 are the employment regulations that govern our approach to recruitment, redundancies and employee protection. Here, Sarah Ozanne explains the ins and outs of these latest developments including the Government’s continued review which aims to peel back some of the ‘gold-plated’ interpretations that have squeezed employers in recent years.
I also review with my colleague Alaina Wadsworth, the recent and topical developments on potential business insurance law reform in the UK.