“We are excited to announce the acquisition of Navigators, which we are confident will achieve key strategic and financial objectives for The Hartford,” said The Hartford’s Chairman and CEO Christopher Swift. “It expands our product offerings and geographic reach, and adds tenured and proven underwriting and industry talent while strengthening our value proposition to agents and customers. We are optimistic about our combined growth opportunities and expect the acquisition to generate attractive returns.”

Navigators, which was founded in 1974, is recognised as a market leader in the global marine, construction and energy industries, as well as in U.S. excess casualty and surplus lines. In addition to an established presence at Lloyd’s, the company also has growing underwriting operations in Europe, Asia and Latin America. The company currently operates three business segments: U.S. Insurance, International Insurance (29 percent) and Global Reinsurance (13 percent). 

The Hartford’s President Doug Elliot added, “This transaction combines two organisations with disciplined underwriting cultures and a shared commitment to innovation, financial performance, and attracting and retaining top talent. Together, we will leverage a more complete product and service offering through a best-in-class distribution network enabled by our combined underwriting, claim capabilities and risk engineering, and enhanced by The Hartford’s strong brand.”

Navigators is headquartered in Stamford, Conn., with 22 locations in the U.S. and eight locations internationally. The company has approximately 820 employees globally who will join The Hartford upon closing. Approximately 600 of its employees are based in the U.S. and 150 are located in the U.K.

“We look forward to bringing Navigators’ specialty lines capabilities to The Hartford,” said Stanley A. Galanski, Navigators President and CEO. “By joining The Hartford and leveraging the strength of its balance sheet and quality of its core commercial insurance products, we will create exciting opportunities to deliver enhanced value to our brokers and policyholders.”

The Hartford has sufficient existing resources to fund the total purchase price of approximately $2.1 billion, but will consider alternative sources of capital prior to the closing. The Hartford does not intend to issue common equity in connection with the acquisition.

The Hartford expects the acquisition to generate an attractive return over time. The impact of the acquisition on The Hartford’s consolidated 2019 and 2020 financial results will depend on a variety of factors, including the timing of the close, finalisation of purchase accounting impacts, such as determination of goodwill and other intangible assets, integration costs, and acquisition-related charges, including transaction costs and changes in Navigators’ loss reserves or other balance sheet items.

The acquisition is expected to result in an immaterial reduction in 2019 net income before considering the impact of acquisition-related charges, which have not yet been finalised. Excluding acquisition-related charges as well as integration costs*, the company expects the acquisition to be immediately accretive to 2019 net income.

For 2020, The Hartford expects the acquisition to be accretive to net income by $30 million to $75 million and to core earnings by $60 million to $95 million. This is comprised of a contribution by Navigators of $80 million to $125 million to net income and $110 million to $145 million to core earnings, offset by a reduction of approximately $50 million in The Hartford’s net investment income, after tax, due to the cash used to fund the acquisition. All of these estimates are preliminary and will be updated based on market conditions, business plans, financial results and other developments between now and closing.

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Ms. Albo, who will join Hamilton from Munich Re on February 1, 2018, succeeds Interim Group CEO David Brown. Mr. Brown has held the executive position while a search was undertaken for a permanent replacement following Brian Duperreault’s departure in May.

“It’s with great pleasure that we make this announcement today,” said Hamilton Chairman William Freda. “Our search for a new CEO has been robust and thorough, and we were delighted with the very high calibre of candidates we considered.

“In the final analysis, all of us involved in the search were impressed by what Pina will bring to Hamilton: an accomplished career with extensive experience and contacts in the global insurance and reinsurance markets, a dynamic commitment to change in our industry, and a deep understanding of what we’re building at Hamilton.

“I know I speak for our Board and senior management in thanking David for taking on the role of Interim Group CEO during this transitional period. We look forward to David being able to focus solely on his responsibilities as a member of the Board of Directors once Pina takes up her new position and to working with her as we continue to pursue Hamilton’s mission of writing the future of risk.”

“I want to thank the members of the executive team and all Hamilton employees for their hard work and dedication during a period of organizational change, and our brokers and clients for their continued strong support,” said Mr. Brown.

“I know that Pina is a great fit for Hamilton, and once I hand the CEO reins over to her, I’ll be keen to continue my work on the Board.”

“It’s an honour to be joining Hamilton,” said Ms. Albo. “I’ve been aware of what the Company has been doing over the last four years and its goal of leveraging data science and analytics to transform underwriting.

“In particular, I’m proud to be given the chance to lead an organization establishing forward-thinking operations in the Bermuda and Lloyd’s markets and through its investment in Attune, the technology platform established by Hamilton in partnership with AIG and Two Sigma.

“Hamilton has strong management, committed shareholders and a dedicated Board of Directors, intent on delivering transformative change for the benefit of all stakeholders. The components of a great company are already in place. I’m keen to join this impressive team.”

Ms. Albo began her career as a lawyer in Toronto, Canada. After practicing in real estate, corporate finance and M&A, she accepted a position at Munich Re as a claims expert. During her 25-year career at the Company, Ms. Albo has held increasingly senior positions which have included Head of Casualty Unit, North America/UK and International D&O/EPL; Head of Casualty Operations at Munich Reinsurance Company of Canada and Temple Insurance Company; Executive Head of Department UK and Ireland; President, National Clients Division, Munich Re America; and President, Reinsurance Division, Munich Reinsurance America. Ms. Albo’s most recent position at Munich Re is Member of the Board of Executive Management where her responsibilities have included P&C business and operations in Europe and Latin America.

Ms. Albo has been a member of many industry boards including the Board of the Insurance Information Institute, the Board of the Reinsurance Association of America and the National Board of the Insurance Industry Charitable Foundation.

She has been recognized for her contributions to the insurance industry and has received numerous awards including the Association of Professional Insurance Women’s “Woman of the Year” (2011). She was designated a “Top Influencer” in Insurance Business America’s List of “Hot 100″ (2014) and placed in Intelligent Insurer’s list of ‘Top 100 Women in Re/insurance” (2014 and 2015).

Ms. Albo holds the Maîtrise en Droit, International and European Community Law, from L’Université d’Aix-Marseille III, Aix-en-Provence, France; Juris Doctor from Osgoode Hall Law School, York University, Toronto, Canada; and a Bachelor of Arts degree in Languages from the University of Winnipeg, Winnipeg, Manitoba, Canada.

About Hamilton Insurance Group
Hamilton Insurance Group is the Bermuda-based holding company for insurance and reinsurance operations that underwrite property and casualty risks in Bermuda, the US and at Lloyd’s. The Company leverages analytics and research to create underwriting and investment value for its clients and shareholders.

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Suparna Goswami Bhattacharya

July 6, 2015: For the past two decades, Japan has been searching to get its economic mojo back. Several governments have done their bit, but nothing seems to have paid the desired dividends.

In the 1940s, the then start-ups like Honda, Nikon, Sony and many others helped Japan rise from the ashes of World War II. These world-class companies gave many Western firms a run for their money and helped Japan catch up with the First World within decades. Though even today it remains the third largest economy after US and China, Japan has been trapped in a cycle of economic stagnation and deflation since the 1990s.

A comparison of the two eras show that the missing link has been the lack of creative spirit. Hence, it is not surprising that Prime Minister Shinzo Abe has put startups as one of the focus points of ‘Abenomics’ policies. What followed was a series of reforms, including deregulation of special economic zones, which is bound to create more opportunities for entrepreneurs. The Prime Minister’s intent to promote startups can be measured by the fact that he recently became the first sitting Japanese leader to visit Silicon Valley.

Hence, things have started looking up a little. “Startup activity in Japan has been on the rise, especially in the past five years. This is in large part due to the changing risk/reward structure of starting/joining a startup. Today, it is much cheaper to start a venture and an entrepreneur can finance it with equity, not debt. Even if the startup fails, the entrepreneur can survive,” says C. Jeffrey Char, President & CEO, J-Seed Ventures, a Tokyo-based venture incubator and Japan market entry specialist.

However, a lot needs to be done. And it starts from changing the attitude towards failure. Abe recently admitted that “in the US and Silicon Valley, risk-takers are respected. This, I believe, is something that is most needed by Japanese businesspeople.”

Terrie Lloyd, serial entrepreneur who is based in Tokyo, echoes Abe’s views. “The startup environment here is underdeveloped mainly because Japanese are risk averse. From a young age,children are taught to be obedient, quiet and submissive. Hence, they grow in an environment where having a safe career is looked up to and given more priority over following your passion and starting your own firm,” says Lloyd.

Beyond the attitude and psychological barriers, there are other roadblocks as well. For instance, there are not enough venture capitalists in place to support startups. “The past six years has seen more and more youngsters getting interested in startups, but there are less number of people out there supporting these startups in the form of VCs, angel investors or mentors,” remarks Kaz Terada, CEO, A2O, a Tokyo-based venture capital fund.

The venture capitalist market in Japan is worth $2 billion whereas the same in the US is $30 billion in size, says Terada adding that Japanese companies still prefer IPOs to mergers and acquisitions. “In Japan, only 10-20% of companies say they want to be targeted for mergers and acquisitions, but in Silicon Valley, it’s 80%,” says Terada adding for Japanese the company is family whereas for young Americans the company is a tool to achieve something bigger.

Also, despite sitting on a pile of cash,large organisations do not utilise it for innovation. Open innovation as a culture has never been encouraged or emphasised upon leading to big companies losing their competitiveness in the international market.

Experts do not seem to be too impressed withthe government’s efforts to improve the startup scenario. “There is a lot of talk, but not much effective action taking place.I feel lack of venture capital is not the main bottleneck to a vibrant startup ecosystem. The Japanese government has a tendency to over-regulate, which makes it difficult for ventures with innovative solutions to gain traction in the market place,” says Char. Hence, an overhaul of the regulatory framework is required to reduce and remove regulations that are no longer appropriate. “Moreover, the government should stop supporting small companies and instead encourage young companies (<5 years=”” since=”” incorporation=”” these=”” are=”” the=”” ones=”” that=”” create=”” employment=”” government=”” should=”” also=”” a=”” preference=”” policy=”” to=”” purchase=”” some=”” nominal=”” amount=”” e=”” g=”” 1-5=”” of=”” goods=”” and=”” services=”” from=”” startups=”” when=”” possible=”” suggests=”” char=”” p=””>

Additionally, the government should also make it easier and cheaper to shut down failed ventures. This will enable human capital, especially those with relevant startup experience to work on more productive ventures.

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