Monday 29 April 2024 - Company news

The 2000’s (Part I) – Embracing the New Millennium

As billions of people around the world watched the ball drop on the 31st  of December in 1999 few could have predicted what a transformational decade the 2000s would turn out to be. The iPod would revolutionise the way we listen to music, smartphones would forever change the way we communicate, and social media giants like Facebook and Twitter – still in their infancy – would allow us to keep in touch with friends and family on the other side of the world. It was also a decade fraught with geopolitical events from which we are still reeling today.

This is the next leg on our journey about how we grew and evolved in an ever-changing world.

 

HCC spots opportunities across the pond

While TV series like Big Brother and Pop Idol pioneered a new genre - Reality TV, our London branch was formed, paving the way for the creation of HCC International in 2000. This move underscored our increasingly global mindset as we attracted more multinational clients. By 2001, our gross written premium had exceeded $1 billion for the first time and the employee count neared 1,000. 

As the decade progressed, we expanded our UK presence in both the Lloyd’s and Company insurance markets. In 2002, we acquired Dickson Manchester, launching our professional risk offering. The following year, we took a minority stake in Illium Underwriting Agency, which managed Syndicate 4040 – giving us Lloyd’s underwriting capabilities for the first time. 

9/11 changes our lives forever

The tragic events of 9/11 led to the deaths of nearly 3,000 people with thousands more injured and deeply impacted societies across the globe. 

The terrorist attacks also resulted in the largest insurance claim ever from a single event, estimated at $40 billion in 2001 (around $70 billion in today’s value). The reinsurance industry was heavily impacted as insurers sought to recover their losses, leading to sharp increases in reinsurance rates.

Following the attacks, insurers also began to exclude acts of terrorism from standard commercial policies. The Terrorism Risk Insurance Act (TRIA) was enacted in the US in 2002 to provide a federal backstop for insurance claims related to certified acts of terrorism. In aviation, the insurance market was one of the hardest hit, with rates increasing dramatically. Coverage terms were tightened and the capacity for aviation risks was reduced. 

The horrific attacks also highlighted the need for international collaboration to better understand and underwrite terrorism risk. As a result, insurers began to develop cross-border insurance programs to provide coverage for multinational companies with exposures in multiple countries. This required collaboration between insurers in different jurisdictions to ensure compliance with local regulations and to provide a cohesive insurance solution.

Acquisitions ramp up

In the aftermath of 9/11, the insurance market needed to offer stability and reassurance to its stakeholders. It is against this backdrop that we expanded our domestic and international footprint into new business lines.

In the US, we continued to grow thanks to the acquisition of RA&MCO Insurance Services, expanding the firm’s Errors and Omissions offering to architects and engineers. Soon after, we were able to provide a surety line of business in the US through the acquisitions of American Contractors Indemnity Company and United States Surety Company.

In addition, we launched HCC Guaranty, giving us the capacity to underwrite customized insurance and reinsurance products to facilitate asset financing, capital management and financial investment transactions. Not content with only growing in the US, we started our International Trade Credit practice, helping to meet the specialist needs of financial institutions. Both these product launches would prove crucial for the financial services industry later that decade. 

However, to learn more about our activity in the latter half of this new millenium, readers will have to wait for the next instalment of our series. You can find more about our 50th Anniversary celebrations here or read our previous blog post here.