Eamon O’Brien, Managing Director at Nouvus Financial
Eamon talks about new market developments, the new regulatory developments and tells about his new company
Dublin is set for a very interesting year as we move forward with the much talked about EU Reinsurance Regulation about to be transposed into Irish legislation.
As we approach the 20th year of the opening of Dublin’s International Financial Services Centre (the IFSC) which was launched amidst a blaze of publicity in 1987, it seems appropriate to review some of what has happened, but more importantly to look forward to the future.
For myself, I have been in the captive business since 1988. I returned to Ireland in 1991 to set up the then captive manager Alexander Insurance Managers (which was subsequently bought by Aon)… Me, myself and my computer!!!
A new dawn and a new horizon developed in early 2005 allowing a number of senior employees from my former company to come and join me at Novus Financial & Management Solutions Limited. By the time I left Aon, I had developed it into the biggest captive manager in Dublin.
So what is Novus all about?
Our aim is to provide independent world class insurance and reinsurance management, financial services and consulting at a reasonable cost to our national and international client base. Having tired of the big company environment we sought out an opportunity to become more client focussed and family service orientated.
The company was established in late 2005. We have a staff of professionals on site, all of whom have worked together for several years. We have, in addition, been joined by several local and international consultants with wide ranging insurance and reinsurance experience. The company uses the latest technologies and ensure that the highest standards of service are maintained.
In most cases the activities of client companies are regulated by The Financial Regulator with whom senior staff from Novus have a long established relationship.
Growth Sector. Experience is key
Insurance and reinsurance management is very much a growth sector in international financial services and one in which there are now huge opportunities for an independent manager due to significant regulatory and other concerns over large companies dominating the services marketplace as well as well documented governance concerns over companies providing both (insurance) brokerage and captive management on the same programs.
We were dealing with large direct writing captives who wrote major programmes across many EU borders… we were dealing with premium taxes in countries across Europe and the world… These companies were in effect fully fledged insurers, the only restriction being that they only wrote their own business. New application were being prepared regularly, we could generally get a company up and licensed with 4 months of submitting a quality application. The place was ablaze with visitors and the Regulator’s office was inundated with requests for meetings. We weren’t only doing direct writers; reinsurance captives very much featured also and many large European companies set up reinsurers.
As the company’s Managing Director, Eamon O’Brien FCA, has almost 20 years experience in the financial services arena including almost 14 years as the Managing Director of one of the largest insurance and reinsurance management companies in Ireland’s IFSC.
Since returning to Ireland in 1991, Eamon O’Brien has acted as Chairman of An Taoiseach’s (the Irish Prime Minister) IFSC Insurance Group as well as The Dublin International Insurance and Management Association. He has also worked on several government committees including committees establishing the strategy for the future development of international financial services in Ireland.
Staff in Novus have in excess of 100 year insurance and reinsurance experience.
So where did it start and where can it all go?
In the early 1990’s captive development was slow, but when a number of the very big companies, in particular US multi-nationals such as McDonald’s, Motorola, Heinz and Coca-Cola, and European giants like Ericsson and Volvo, set up here, suddenly the pace changed.
By mid-1996 I was the Chairman of DIMA (The Dublin International Insurance and Management Association) and we were working diligently within our group to foster growth in the Dublin market attending many international conferences. Now we bring these people to Dublin to visit us in our city with the running of the bi-annual European Insurance Forum which attracts a large audience of Risk Managers, insurers and service providers to Dublin. Indeed if you are around this year please come and see us. The details are at www.europeaninsuranceforum.com
By the late 1990’s there were lots of things happening in Dublin. We had championed an initiative within DIMA, and with IDA Ireland, to have an independent review completed on the Insurance and Reinsurance sectors. We selected Tillinghast to produce a report which was jointly funded by IDA Ireland and DIMA. The report was presented to the Tanaiste (Deputy Prime Minister), Mary Harney TD, in early 1997 and directly led to the appointment within IDA of the role of International Insurance Representative, a key role in the onward development of Ireland’s Insurance Industry.
This was a quantum leap within the IDA and Ireland’s efforts to market itself on the international stage and from then on the industry took on a new pace of development. David Smith spoke at many international conferences in his new found role and gave a much greater credibility to the local and international marketing efforts of the various fledgling IFSC companies.
At the same time I had been selected by An Taoiseach to chair the IFSC Insurance Group. This Group is effectively the top forum, for both the life and non-life industries, for discussions between the public and private sectors as we all work to develop the IFSC in a well measured fashion. The Public sector are represented on this body by senior officials from the Dept. of An Taoiseach, the Financial Regulator, Department of Finance and periodically the Revenue, whereas industry are represented by representatives of the captive management industry, reinsurance and insurance industries, Life Insurance industry, big 4 accounting firms, and Financial Services Ireland.
So as we slowly move into the new Millennium, the insurance and reinsurance sectors can look forward with optimism to the future.
And what about Dublin as a marketplace. Is it a quality location to do business? Is it properly regulated?
Regarding regulation firstly, the Dublin International Insurance & Management Association (DIMA) has lobbied the Irish Government to accede to European Commission Directorate proposals to introduce mandatory regulatory standards for the reinsurance industry in Ireland as soon as possible. That can only be viewed as a positive in a marketplace that has suffered from some ill informed commentary on its regulatory stance over the past 12 months.
The international re/insurance sector has been an integral part of Dublin’s IFSC for more than almost 20 years and has contributed substantially to the success of Dublin’s international financial services sector. All practitioners in Dublin support the view, through their many dealings with the Financial Regulator over the years, that the regulatory regime is ‘firm but fair’.
It is a distinct advantage to people looking to set up in Dublin that you can readily meet with the Regulator. It would be true to say they have a very conservative approach to the initial levels of capital required for a Dublin captive, which has in a number of cases, it has to be said, lead companies to look elsewhere. While certain practitioners might argue that they are too strict, the Regulatory environment here is, and has been, one of the pillars of Dublin’s success.
Ireland will be the first reinsurance sector in a European member state to be fully regulated specifically under the Reinsurance Directive, which was published in the Official Journal of the European Union on 9 December 2005.
Dublin is also not the cheapest place to do business in 2006 as the Celtic Tiger has lead to increased costs. Initially low costs was one of the marketing tools used. As the domicile has matured the picture has changed somewhat. People come to Dublin now because they know they will find service quality providers in all facets of insurance and reinsurance who can provide the necessary service. Other domiciles in Europe cannot offer the breadth and depth of knowledge in insurance matter available in Dublin. It is that experience that Novus aims brings to the independent captive market.
So what does the future hold for Dublin?
There is no doubt that the level of captive enquiries will increase as we move into 2006. Captives have, and continue to be, a key risk management tool for multinational Risk Managers seeking to minimise the insurance costs while at the same time maximising their insurance cover. Their experience with Dublin to date has been good.
And Novus will be there to service them…
