UK government appoints head of new unit expected to review state-backed insurance entities | New


London banker Siobhan Duffy heads up the Contingent Liability Central Capability (CLCC), a newly formed unit that will advise HMT on opportunities to increase revenue through its multiple guarantees while identifying options to reduce the UK government’s contingent liabilities. charged.

The appointment comes as the government continues its review of the Pool Re counterterrorism safety net, which some fear may end with a recommendation to end the current unlimited guarantee in exchange for a lower fixed cap. Such a move would be unwelcome among the UK’s insurer members of the mutual, unless Pool Re’s management and board are able to agree on a new structure with HMT that overcomes these concerns.

Last year, the UK insurance industry’s recommendation that the government provide unlimited coverage for a new pandemic reinsurer, Pandemic Re, received mixed reviews from government officials, suggesting that HMT is reluctant to take on more. contingent liabilities on behalf of insurers and certainly anything that is uncapped.

Pool Re is believed to be second after student loans as the largest contingent liability on the UK government’s balance sheet, but there are a number of other insurance entities – including Flood Re and the Nuclear Terrorism Pool – which also benefit from a taxpayer guarantee.

UK insurance schemes with government contingent guarantees

Prior to joining HMT, Duffy spent over 25 years working in debt capital markets and advising European companies on debt issuance.

Over the course of her career, she has held a number of management positions, including that of Global Head of Private Placement at NatWest Markets and Royal Bank of Scotland. Previously, she was responsible for private debt at ABN Amro.

Most recently, she created a debt distribution platform for London Bridge Capital, an independent corporate finance company.

The CLCC is part of the UK Government Investments unit of HM Treasury, which oversees corporate governance and corporate finance.

The concept of a new central unit was first identified by the review of HMT’s balance sheet in 2017 and presented in the report of the government as insurer of last resort published in March 2020.

The 2020 report recommends that the government seek “appropriate compensation” for the insurance and guarantees provided by HMT.

Ian Lazarus, an experienced insurance and financial services recruiter specializing in senior executives, led the search for the Director of the PBC.

The insurer comment

Pool Re was presented as an example of how public-private partnerships can work to manage systemic risk – which is probably why the UK industry under Stephen Catlin’s leadership used the model as a proposal for new platform to ensure the risk of pandemic.

All the more ironic as the British government seems to want to limit the guarantee which has succeeded in keeping the taxpayer away from the loss and for which HMT receives a nice consideration for doing so …

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