Run-off practitioners from around the world will converge on London in the middle of March, gathering for the Association of Run-off Companies' annual commutations congress.
Leslie-Ann Giovnilli previews the event.
Last year was not as busy for new run-offs as 2001 had proved, but it still had one of the biggest surprises - the announcement that Gerling Global Re was to go into run-off. This served to reinforce the view of the Association of Run-off Companies (ARC) that every active company has the potential to become an ARC member, a view which means we focus on practical advice and support for all companies, active or otherwise, in the re/insurance market.
Ideally, we would like to see more live operations attending our seminars and commutation events. It is only by reaching an understanding of the run-off process and by having a forward-looking management plan to consider such things as commutations and solvent schemes before they are no longer an option but one of a limited choice, that we can help prevent repeating the past.
It serves us all to work together - brokers, creditors, shareholders, reinsurers (live and inactive) - to achieve a high level of cooperation that will increase the levels of dividends for insolvent estates and move run-offs towards closure in a much more sensible timeframe. A shortened finality plan allows all parties the best deal working with the residual funds. This can be achieved with a combined effort and ARC would like to provide the environment to allow this. Surely the best solution is to free brokers and adjusters from legend systems and practices, and get this market knowledge working on new and better processes, which by a joint market effort can be achieved in both the electronic systems and negotiation areas?
As part of the process of achieving finality and explaining the ways and means of run-off, ARC has arranged its fourth annual London Discontinued Business Seminar and Commutation Congress, to be held at Merchant Taylor's Hall in the City of London, close to airports and hotel/restaurant facilities. The event will take place over two days - March 18 and March 19 - and it is hoped it will encourage delegates to travel from outside London, taking advantage of the event to have other meetings in the area. Certainly, London-based companies believe the event is worth attending, even though they have offices nearby, as 400 people converge on the one location to talk business.
The first day, Tuesday 18 March, opens at noon for delegates, and the seminar starts at 1pm. The seminar, called Snakes and Ladders or Opportunities and Obstacles to Finality, has a strong group of speakers including Paul Taylor of the Financial Services Authority, Paul Evans of PricewaterhouseCoopers and Karin Barkholt of Munich Re. Each speaker brings their own experiences to give a practical guide to areas of the finality process. All are governed by our very capable chair for the event Philip Grant, the association treasurer and previously CEO of Chester Street, himself with a wealth of experience to bring to this difficult area of reinsurance practice. The day will be rounded off with a cocktail reception.
The second day kicks off at 8.30am, when the congress sponsors and 37 booth holders will start a tough day of negotiation. Last year we received many compliments on the commutation day, including advice of several deals that were finalised. This was a very satisfactory result, but we also see the event as `one link in a chain of events' running throughout the year and allowing delegates to fix meetings at set intervals to follow up previous meetings and processes. For some, March is too close to the year-end and they are not ready with their final figures until later in the year. ARC works closely with the Cavell Rendez-Vous team which has its own commutation event during June in Norwich, and also prefers to let people know of the Cambridge Symposium run in Philadelphia. The quarterly spacing of these events, with a break for year-end, allows maximum planning time but also a date for the next phase of negotiations.
The event brings for us a wider information base and potential to spread our message. Also, the lack of competition means a large range of providers are available to members and other delegates. Some run-off entities have business placed with more than one service provider and the event allows them to work with both simultaneously, a situation not possible in the normal course of the working day. The commutation day has no speakers, nor other presentations, apart from individual companies running specific system samples from their booths. The day tends to be a very private one for the delegates, but everyone is welcome to the cocktail event at Lloyd's in the evening.
The focus of this event is to meet and talk with others in the market. You may go for one thing and come away with something entirely different! I have heard it said that everybody is just three introductions away from everyone else, so maybe you will meet the link at the Congress which joins you to the person you need for the decision you have been waiting for.
By Leslie-Ann Giovnilli
Leslie-Ann Giovnilli is secretary of the Association of Run-off Companies