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Ontario RIMS meets with Commercial Union executives.

Ontario RIMS Meets With Commercial Union Executives

The Ontario Chapter of RIMS recently held a liaison meeting with executives of Commercial Union Assurance Company of Canada. The following are some highlights of the meeting.

Ray Gamble outlined two products that are being developed by Commercial Union. One is engine breakdown insurance for aircraft owners and operators other than large commercial airlines, and the other is a specialized electronic equipment policy for broadcasting, telecommunications, medical and other facilities. Mr. Gamble also stressed the insurer's prominence in boiler and machinery insurance in Canada.

Peter Keast outlined his expectations for the one-year-old Special Risks Unit he heads. While the establishment of this unit does not in itself change the direction of Commercial Union's underwriting or capacity, it should afford better access and service to insureds with medium- to large-sized risks. Mr. Keast added that he would consider fronting for captives on a case-by-case basis, but he does not actively pursue such business as a source of income.

Ken Harris explained that Commercial Union's policy is to underwrite on a country-by-country basis since the parent group is represented in most areas. For example, the company can handle Canadian accounts with small U.S. exposures from Canada, but when the U.S. exposures become material, the company normally splits the program with its U.S. affiliates. Mr. Harris explained that this policy evolved from Commercial Union's historical trading company philosophy, through which it continues to be sensitive to individual country's national concerns. Although this is an admirable goal, it creates some logistical and coordination challenges for insureds with worldwide operations. The parent company, Commercial Union Assurance Company PLC in London, has an international account coordination committee, but working relationships among operations in various countries have not yet been well established.

Mr. Harris also said his group's ratings will be impacted by its latest approach to capital management. Historically, Commercial Union of Canada has retained a high level of solvency. In the future, sufficient funds to satisfy authorities will be retained in Canada, but the U.K. parent will act as capital banker to the international operations to facilitate better group returns on capital. This should result in a stronger and more effective group on an international basis.

Geoff Walter explained that Commercial Union never got on the claims-made policy wording wagon and even continues to offer a small line of sudden and accidental pollution coverages on an occurrence basis. The insurer prefers to write accounts in which it can take a dominant position at the low end, but it will consider participating in excess layers. Although Commercial Union of Canada is a multiline company, it leaves the underwriting of marine and aviation insurance to its parent.
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Title Annotation:Commercial Union Assurance Company of Canada
Publication:Risk Management
Date:Mar 1, 1989
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