Situation
During the 1980s and 1990s, SVB (originally Spreckley, Villers, Burnhope) enjoyed a solid reputation as a pre-eminent Lloyd’s of London underwriting insurance company. Beginning in the early 2000s, however, SVB found itself facing some daunting challenges.

Having expanded its casualty reinsurance business significantly in the United States, the firm recognized that the liabilities it had assumed, especially in the areas of professional liability, were much greater than anticipated. The total was estimated conservatively at $600 million.

Solution
To stem its mounting losses, SVB reorganized itself, changed its strategy, and refocused its priorities. As part of that effort the firm embarked on a commutation project to reduce its liabilities on a discontinued runoff book of business.

Because the book of business was in the United States, SVB sought a U.S. outsourcing partner to administer the commutation. According to SVB executives, the firm chose Cambridge based on the credibility and professionalism of our staff, our experience in managing commutations, and our network of connections in the U.S.

Results
While the commutation project is ongoing, wins have already been registered. SVB executives say they have confidence that Cambridge has the situation firmly in control. In addition to assisting in the commutation efforts, SVB has also chosen Cambridge to provide other services including:

• Handling direct claims for reinsured business,
• Consulting on U.S. cedant contacts and relationships, and
• Auditing and reviewing of cedant books to mitigate reinsurance claims

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