Wednesday 05 June 2024 - Company news

The 2000s (Part II) Thriving in times of uncertainty

The latter half of the 2000’s left an indelible mark on the financial, cultural, sporting, and social landscape. Usain Bolt broke the world 100 meters record while Michael Phelps made history at the Beijing Olympics, with an extraordinary eight gold medals. Adele and Rihanna burst onto the world stage with their debut albums and rock band R.E.M split after more than three decades together. Facebook, and YouTube were beginning their everyday use in our lives giving way to the eventual introduction of Twitter, Pinterest, and LinkedIn later on during this decade.  However, despite these seminal technological, sporting and cultural events, the late 2000s would be defined by the financial crisis, with its impact and legacy shaping the world economy, politics and society for years to come. 

This is the second part of the 2000’s leg of our series narrating Tokio Marine HCC’s story. Read on to find out more about our journey in the second half of the decade.

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Growing our international footprint

In 2005, we strengthened our position in the international insurance markets through strategic acquisitions. In the surety and credit business we acquired UK-based DeMontfort Insurance Company Plc. We also acquired the remaining shares in Ilium Insurance Group, the owner of a Lloyd’s managing agency that managed Syndicate 4040, which specialised in UK third party and employers’ liability. The acquisition increased HCC’s London market presence and provided a Lloyd’s platform with licenses which facilitated the expansion of our international operations. However, as the HCC footprint expanded, storm clouds were gathering across the financial services industry.

Navigating the worst financial crisis in history

The global financial crisis of 2008 was the most severe economic crisis since the Great Depression, with the collapse of the US subprime mortgage market sending shock waves across the world. Within the space of 12 months, Lehman Brothers, the fourth largest investment bank in the United States, collapsed and vast financial institutions on both sides of the Atlantic needed to be bailed out by governments to prevent them from following suit. Trillions of dollars were needed to keep the global banking system afloat. 

In the US, millions of homes went into foreclosure, unemployment reached double figures and, in an effort to kickstart the economy, the Federal Reserve slashed interest rates to zero, for the first time in history. Added to this was the EU debt crisis in 2009 and the Icelandic financial crisis in 2010. As a direct result of these related financial crises, global trade nearly collapsed, declining by 15% between 2008 and 2009.Unemployment around the world rose by 3% percent between 2007 and 2010. The ramifications of these crises would be felt for years if not decades to come.

HCC pushes forward in the Lloyd’s market 

We weathered the storm but adjusted our sails and continued to execute our “growth through acquisition” strategy.  In 2008, we pursued our Lloyd’s expansion and acquired Multinational Underwriters, an international travel & health insurance provider, which we would later rebrand as WorldTrips Travel Insurance. 

Coinciding with this acquisition, we launched Lloyd’s syndicate 4141, with an initial capacity of $24 million.  A year later, we merged Syndicate 4040 and Syndicate 4141, creating an HCC vehicle capable of underwriting property, marine hull, shipping and Directors and Officers (D&O). Syndicate 4141 significantly increased our capacity at Lloyd’s to over $130 million by 2010. 

The 2000s were a period of geopolitical realignment and sector-wide transformation, challenging many people’s perceptions of stability and expectations of risk. Despite this upheaval, HCC went from strength to strength, consolidating our US position while expanding into overseas markets and seeking new growth opportunities.

Watch out for our next instalment which will follow our progress into the 2010’s. To learn more about Tokio Marine HCC and follow the rest of our story, check out the “Company News” section on our website: https://www.tmhcc.com/en-us/news-articles/company-news