Managing Risk

"We put in place a strategy of wresting the initiative from Hippo, getting one step ahead and forcing Hippo into a corner, instead of letting them dictate the agenda. This was particularly key because Hippo started out with the advantage of having all the Markel policyholder data."
ALEX DENSLOW 
Partner Insurance CMS London

In a highly complex and time-sensitive matter, a cross-border CMS team advised insurance client Markel on proceedings against Hippo Versicherungsvermittlung GmbH (Hippo), a German coverholder active in equine insurance. Hippo owed Markel policy premium arrears and refused to release policyholder information to Markel.

Markel’s objectives were to protect its policyholders while preventing further breaches of contract by Hippo and to recover the missing funds. This was an urgent, fast-moving matter, with our teams reacting to deadlines and goalposts that were constantly moving.

CMS teams in London and Bristol, including colleagues John Enoch and Kimberley Hedtke, undertook initial investigations. During a meeting with its director, it became clear that Hippo did not intend to pay the sums due to Markel. Markel’s contract with Hippo was governed by English law. Therefore, we obtained mandatory and proprietary injunctions in the English court for Hippo to pay both past and future premiums into a dedicated Markel account, as well as to provide information required by Markel. This process was highly complex, requiring us to jump through numerous hoops and adhere precisely to strict deadlines at short notice. Additionally, the cross-border element raised issues around jurisdiction, service and enforcement.

CMS London partner Alex Denslow said, “We put in place a strategy of wresting the initiative from Hippo, getting one step ahead and forcing Hippo into a corner, instead of letting them dictate the agenda. This was particularly key because Hippo started out with the advantage of having all the Markel policyholder data.”

At this point, our offices in Cologne (colleagues Olga Kobelev, Rolf Leithaus, Frank Püttgen, Christian Lange and Patrick Müller-Sartori) and Vienna (colleagues Thomas Böhm, Andreas Göller and Peter Machherndl) became involved. They provided advice on enforcement in Germany and Austria and assisted with the service of freezing orders on banks used by Hippo. Effective enforcement of the orders was difficult due to the UK opt-out from the EU Asset Preservation Order and formal enforcement therefore had to come through the foreign service section of the English court.

Faced with the injunctions obtained for Markel, Hippo entered into insolvency proceedings. We advised on German insolvency law and protected Markel’s interests in the liquidation. Hippo’s director had, however, previously set up a new company with a similar name and was contacting policyholders to solicit premium payments to the new business. In light of the actions of Hippo’s director, our Cologne team also advised on German criminal law and assisted Markel in filing complaints to the prosecuting authorities in Germany, as well as to insurance regulators. Our Cologne office continues to liaise closely with both the liquidator and prosecuting authorities  to ensure maximum possible recovery of assets for Markel.

We advised across the UK, Germany and Austria on GDPR data protection legislation  as it affected new arrangements for ensuring ongoing cover and claims handling for Markel policyholders.

Other insurers were also affected by this matter in the London market and in Germany. We were in contact with both the BaFin German financial regulator and Lloyd’s of London branch office in Germany to warn them of the situation, which led to another German insurer terminating its binding authority with Hippo.