Volante Lloyd’s Syndicate 1699, managed by Asta Managing Agency Ltd, has announced the launch of a pioneering new insurance product – Shareholder Activist Protection Insurance (SAPI). As climate activists continue to wage war on all things carbon related, the risk for insurers, brokers and many other companies involved in coal, oil, gas or plastics production is increasing. One method of direct action is via shareholder stakes, shareholder meetings, product boycotts etc. These are all likely to become everyday parts of business life in the future and dealing with them costs time and money.
SAPI is the first policy of its kind to provide standalone expense cover for shareholder activist activity and offers A+ rated protection through our Lloyd’s Syndicate 1699 stamp. Developed by Volante Global in collaboration with experts at Marsh, the policy provides insurance for costs incurred by a listed company to defend against a shareholder activist campaign, including fees relating to the appointment of legal, consulting and communications specialists, as well as any additional proxy costs.
SAPI is available to listed companies operating across all market sectors with a market cap between $5m and $10bn. SAPI is launching in the UK first and is available exclusively through Marsh for the UK market. EU roll-out is planned for Q2 2022. Available insurance limits start from $1m to $6m. According to Insightia, Volante’s data partner for the product, shareholder activist campaigns in Europe reached a record level of 200 campaigns in 2019, before cooling-off in 2020 due to Covid-19. Activist investing rose substantially in Europe between 2014 and 2018, with the number of companies publicly targeted almost doubling in that period. The UK remains the most active market for shareholder activists in Europe, representing 37 of 192 European public campaigns in 2020.
Activist campaigns are now bouncing back, with activists also targeting smaller listed companies. Hans Martin Døhlen, the Volante MD, spear-heading the launch, said:
“Many organisations assume that costs for shareholder activism is covered by a D&O policy – but this is rarely the case. SAPI is an industry first designed specifically to address this rapidly evolving corporate threat. By combining innovative insurance cover with mitigation via leading partners, we are encouraging clients to improve their activist defence strategy. In the new world of ‘ESG’ accountability, an insurer must support clients in innovating pro-active insurance solutions to manage emerging risk – SAPI does exactly that”.
Matt Terry, Head of FINPRO National, Marsh Specialty, said: “The costs associated with shareholder activism campaigns is a growing exposure for our clients, especially those in the UK where highprofile and well-funded action is increasingly linked to ESG matters. SAPI is an exciting innovation which provides UK clients with the critical risk mitigation services they need in today’s environment, while protecting their balance sheets and supporting their wider ESG strategies.”
The risk mitigation component of the coverage provides access to legal and consulting companies with expert knowledge in the field of shareholder activism. Working directly with clients, the specialists help companies to develop robust activist strategies to assess their exposure to activist activity, mitigate associated risks and improve response capabilities in the event of an activist campaign.
“Innovation and differentiation are the fundamental pillars of our underwriting strategy and this new initiative launch keeps us neatly aligned to our principles,” said Volante’s Founder and CEO, Talbir Bains. “We are proud to bring both a new product with SAPI and a new office in Berlin from
which Hans Dohlen will launch and manage this unique initiative. Hans brings a very dynamic approach to underwriting and risk assessment with industry data forming a majority component of the underwriting algorithm. This initiative epitomises Volante’s drive to innovate and achieve
differentiated and enhanced outcomes for our capital, our broker network and our Assureds.”