The Weekly Wrap: Resignations, acquisitions and rate increases

A top health insurance regulator resigns, P/C rates rise in February and a major carrier enters the crime insurance market.

Professional Risks


Head health insurance regulator resigns
Embattled health insurance regulator Gary Cohen announced his resignation as director of the Center for Consumer Information and Insurance Oversight” this week, effective at the end of the month.

Cohen, a former insurance executive and regulator, was accused by congressional Republicans of misleading the public on the functionality of before the rollout of the federal and state exchanges.

Cohen’s exit is voluntary, but follows a call from Texas Representative Michael Burgess that US Health Secretary Kathleen Sebelius demand Cohen’s resignation. Burgess suggested Cohen “misled” Congress by testifying that any problems with would be minor.

Medical doctor Mandy Cohen, who manages consumer assistance with the CCIIO, will take over the top role temporarily, CMS Administrator Marilyn Tavenner said.

P/C rates rose 2% in February
Commercial property/casualty insurance rates rose by an average of 2% last month, according to a report from insurance exchange MarketScout. The report reflects a general slowdown of P/C rates, which rose by an average 3% in January.

Commercial auto and business owners policies (BOP) led the rate increases at 4%, while crime, inland marine, fiduciary and surety brought up the rear with a 1% increase each. The transportation sector experienced the largest rate increase at 4%, while energy experienced just a 1% rate increase across all insurance products.

“Today, more so than any time in recent history, the US insurance market has attracted the attention of some very smart people with access to serious capital,” noted Richard Kerr, CEO of MarketScout. “If the money guys connect with insurance pros and decide to proceed with implementing even one-third of the plans under consideration, absent a catastrophic event, we predict the US commercial market will continue to moderate and rates will ultimately start to decrease towards the later part of 2014.”
IronPro enters fidelity, crime insurance space
Ironshore’s professional and management liability unit, IronPro, announced it was entering the fidelity and crime insurance market this week. IronPro will offer product capacity limits of up to $30mn for all lines of business related to employee theft and other crime-related perils.

The new unit will be headed by Kevin Finn, a former Hanover Insurance Group exec, who has more than 30 years’ experience in underwriting management and professional liability, fidelity and craime, ERISA and kidnap insurance for both private and public sector groups.

Finn will report to Thomas Leahy, executive vice president of IronPro.

Arthur J. Gallagher acquires Mass. retail insurance broker
Arthur J. Gallagher & Co. continues to acquire brokers, announcing the acquisition of Woborn, Mass.-based Tudor Risk Services Tuesday.

A retail insurance broker since 2009, Tudor provides property/casualty, risk management services and employee benefits insurance and consulting services. All existing Tudor senior leadership, including William Frain III and Thomas Porell, will continue their roles, now answering to Douglas Brown, head of AJG’s northeastern retail P/C brokerage operations and David Ziegler, head of AJG’s eastern employee benefit consulting and brokerage operations.

"We continue to find new acquisition partners that have a strong level of industry experience and focus on high-quality client service," said J. Patrick Gallagher, Jr., Chairman, President and CEO.  "Tudor's northeastern presence and expertise will be a terrific complement to our property/casualty and employee benefits brokerage operations.  We are pleased to welcome Bill, Tom and their associates to our growing Gallagher family of professionals."

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