AGCS will also cease underwriting of long tail risks in Australia as James Stack is named new chief following departure of current CEO Willem Van Wyk.
Allianz Global Corporate & Specialty Pacific (AGCS) will cease underwriting of long tail risks in Australia and close its operations in New Zealand with effect from 1st September 2019, following a strategic review of the business.
The decision relates to the financial Lines and liability divisions of AGCS Australia and AGCS New Zealand. Other lines of business in AGCS New Zealand, namely engineering, property, energy, entertainment and alternative risk transfer will instead be written out of the AGCS Australia operations.
The insurer blamed “extensive claims activity in recent years” for the decision to pull out of long tail business in Australia.
“The rise in legal funders and the ultra-challenging legal environment which drives extraordinary claims levels in our sectors have made it untenable for AGCS to continue offering Long Tail business in the Pacific. As large corporate risks are very much exposed to the alarming increase of class action suits and litigation funders, it was no longer sustainable for AGCS to continue offering coverage for Long Tail risks,” said Sinéad Browne, AGCS board member and chief regions and markets officer.
AGCS says it is ”working closely with affected employees to support them through this change and to evaluate all options for redeployment.” AGCS will also work with its customers and brokers to manage the transition of business to alternative insurers. All other Allianz entities and AGCS lines of business in Australia remain unaffected.
James Stack has been appointed as CEO of Allianz Global Corporate & Specialty (AGCS) Pacific, which is an embedded team within Allianz Australia, after four years as Head of Market Management AGCS Pacific. Stack replaces Willem Van Wyk who “is leaving the group to pursue other opportunities,” according to the insurer.
In addition, Joanna Mercer, previously Head of Compliance & Product Development will assume the role of Head of Claims AGCS Pacific with effect from October 1st 2019.
AGCS’ Long Tail business in Australia registered EUR 42 Mn in gross written premiums (GWP) in 2018 and accounted for 0.5% of AGCS’ global revenue of EUR 8.2 Bn in 2018. This portfolio has been subject to extensive claims activity in recent years. AGCS does not have a large presence in New Zealand, with the branch consisting of a team of four and writing EUR 9 Mn of GWP last year.