Global growth in Aberdeen’s oil and gas industry has led to local investment for international insurance firm ACE Group.
The business, with a global footprint and its own operations across 53 countries, has opened an office in the Granite City.
It was an obvious move, said new office manager Jim Rutherford.
“In the last few years, Aberdeen and oil and gas have by far and away been the most buoyant part of the corporate transactions market place,” he said.
“ACE is a good fit for business up here because of the work we do internationally. So many businesses here are growing globally, including relatively young firms opening offices in places like Brazil on the back of global exploration.
“However, many of these countries have local laws which oblige companies to insure those businesses and properties in that country.
“This means insurance needs can get pretty complex and when you look at the market, there are few who can underwrite in the oil and gas sector and work internationally. We can do both and where it overlaps it is a really good fit.”
ACE Group, which was founded in 1985, has had a key base in Scotland, in Glasgow, since 1982, through Cigna, which it bought in 1999.
It now has some 200 underwriting and claims staff in its Broomielaw offices, supporting the firm’s Scottish and UK business.
From London, the firm provides property, third party liability, control of well and business interruption cover for national oil companies and independent operators.
However, Aberdeen will be where the company’s strengths internationally and in the oil and gas sector come into their own, said regional manager Andy Macfarlane.
This was because ACE’s move comes at a time when firms, from small to medium enterprises to large oilfield services companies, are facing increasingly diverse risk profiles as they look to trade in countries from Brazil and south-east Asia to the Middle East.
But it’s not just overseas where the complexities of doing business are growing, said Rutherford, whose career has seen him carry out underwriting and brokering, focusing on transactions, including with private equity investors in the oil and gas sector.
Employers’ liability insurance, particularly with increasingly complex contractual structures, as well as cyber crime and terrorism are growing areas requiring insurance coverage in the sector.
“We are seeing ever more difficult and complex contracts,” he said. “Up until now a lot of contractors and product suppliers work under the Logic contract regime, which offers reciprocal indemnity.
“But we are seeing an increasing amount of more one-sided contracts, especially coming out of America. Contractors are being asked to assume more risk.
“We are having to examine customers’ contracts very closely when underwriting.”
In order to help work in this area, with clients and brokers, the firm is from early next year looking to give access to a lawyer to review contracts at discounted rates.
ACE has also introduced a new global terrorism and political violence product, ACE Shield, which aims to help those firms working in politically unstable areas with staff and property insurance.
Whereas cover often tends to be specific to certain countries and there are frequently gaps between terrorism, political violence and property policies, the new product helps clients to achieve seamless cover between their standard exposures and the specific risks to property and business continuity arising from the full range of terrorism and political violence events around the world.
In Glasgow, ACE has also been growing, increasing its underwriting strengths and personnel, especially in the area of employer liability protection, liability of directors and officers, property and business interruption and accident and health insurances.
Globally, ACE is one of the world’s largest insurers, with a market capitalisation of about $25billion and a global network enabling it to serve customers in around 170 countries and territories worldwide.
In oil and gas, it deals with businesses ranging from the largest exploration and production companies to one-man outfits.
In Aberdeen, the focus is mostly oilfield services, but services extend to other sectors including retail and manufacturing.
Policies range from accident and business travel, including overseas medical expenses, to cybercrime.
Macfarlane said: “We have alignments with the main business sectors in the north-east and our presence in Aberdeen will help us better serve the needs of our brokers and ultimately our clients.”