Challenge Group

I T ’ S K I N D O F F U N T O D O T H E I M P O S S I B L E

Message from CEOChallenge Group is proud to have achieved its primary objective of becoming a respected and well known broker in the market with a reputation for reliability by creating and delivering bespoke risk transfer and risk mitigation solutions for our clients.

We have established firm relationships with significant clients and major rein-surers and continue to expand in this area of our endeavours. We have also success-fully initiated our offshore services operation with new clients. We have established ourselves as a professional participant in the arena of crop insurance and reinsurance and anticipate strong growth in this sector of our business.

We offer our services through our fully staffed offices in Moscow, St. Petersburg, Labuan, Kuala Lumpur, Osaka, Nicosia, Caracas and London. We further enhance our broking activity by providing consultancy, management and underwriting services for offshore companies and captives aimed at assisting our clients in all areas related to their insurance and reinsurance business requirements.

We set ourselves what may appear to be very basic objectives but they are ones which we believe differentiate Challenge Group in the market, they are:

n To thoroughly know our clients and our markets and through that knowledge understand and respond to their collective needs.

n To deliver the best possible service to our clients and the market.n To deliver new, innovative and practical solutions to our clients and new

business opportunities to our markets.n Manage claims in the most expeditious manner.The success of the Group has only been made possible by the dedication and

commitment of all the Challenge team, an asset which is well recognized by our many clients and friends.

I am proud of the evolution and achievements of Challenge Group since its foundation and in particular the great team spirit which is reflected in our motto “It’s kind of fun to do the impossible”!!!

Charles J. CattCEO

2 C H A L L E N G E G R O U P | I T ’ S K I N D O F F U N T O D O T H E I M P O S S I B L E

Challenge Group Inc is the holding company and the main entity of the Group. It was incorporated in 2007 hav-ing its physical office at: Level 6F, Main Office Tower Financial Park Labuan Complex, Jalan Merdeka, 87000 W.P. Labuan, Malaysia.Challenge Group Inc holds a license to conduct broker activity approved by the Ministry of Finance of Malaysia and specializes in reinsurance broker services, risk management, actuarial analyses and international consultancy.

Challenge Group Underwriters & Man‑agers Inc is a 100% owned subsidiary of Challenge Group Inc.The Company holds Underwriting Man-agement and Master Rent-a-Captive licenses and specializes in reinsurance companies’ management, Captive and Rent-a-Captive management.

Challenge Group Insurance Consul‑tants and Brokers Ltd, founded in Moscow, Russia, is a 100% owned subsidiary of Challenge Group Inc. The Company holds a license to conduct broker activity approved by the Minis-try of Finance of Russia and is focused on providing insurance/reinsurance broker services and consultancy sup-port for the Russian insurance market.

Reinsurance Recoveries Ltd is an inte-gral part of the group. The Company is registered and based in the UK and specializes in worldwide claim recover-ies related to disputes with reinsurers.

About Challenge Group

Challenge GroupUnderwriters & Managers Inc

(Malaysia)

Challenge Group Inc.(Malaysia)

Challenge Group – InsuranceConsultants and Brokers Ltd

(Russia)

Reinsurance Recoveries Ltd (England)

The brand name Challenge Group consolidates four companies providing its clients with comprehensive and complex range of professional support in the field of reinsurance broking, reinsurance companies’ and captive management, actuarial analyses and interna-tional consultancy.

3C H A L L E N G E G R O U P | I T ’ S K I N D O F F U N T O D O T H E I M P O S S I B L E

Charles J. CattCEO of Challenge Group Inc.Charles J. Catt has more than 45 years experience in the London and International insurance and reinsurance industry.

He was the managing director of the three UK companies of the NAC Re Corporation until its merger with XL Capital in 1999 and since then has been heavily involved in consultancy activities. Charles is a member of many insurance and reinsurance-related institutions such as the Property & Casualty Technical Committee of the International Underwriting Association of London, the International and Research Studies Committees of the Insurance Institute of London, British Insur-ance Law Association, Chairman of the Reinsurance training and Education Council and sits on various market committees. Charles is focused on general consultancy, arbitration, mediation, expert witness, training and recruitment requirements in the reinsurance and insurance sectors. Charles is a founding member of Challenge Group and now devotes most of his activities towards directing its positive expansion and development.

Irina ShevyakovaDirector of Challenge Group IncIrina has Diplomas of Higher Education of an economist and a linguist. She is a native Russian speaker speaking

Belorussian, English and Polish fluently, with a fundamental knowledge of German and Spanish.Irina’s career began in the banking sector; however, she has found her true vocation in the reinsurance industry

with which she has already been closely and continuously connected for more than 5 years.Irina is in charge of broker business in Challenge Group Inc. in Malaysia and directly responsible for all facultative

cessions of marine, aviation, property, construction-erection and cargo risks, using both Russian and foreign capacities. At the same time, Irina’s activity is also focused on development of mutual relations with the markets in Southeast Asia and the promotion of the Russian capacity in the region.

Ahmed Farouk AripenDirector and Principal Officer of Challenge Group Underwriters & Managers (L) IncFarouk is a Chartered Accountant from the Malaysian Institute of Accountants, Certified Practicing Accountant

from CPA Australia, holds a B.A in Accountancy degree from University of South Australia and a Certificate in International Risk Management from the Institute of Risk Management, UK. Born in Kota Kinabalu, Malaysia. In 1994 he started his career with international audit firms with Coopers & Lybrand and then Ernst & Young for a total of 4 years and later as a the Finance & Accounts Manager of a construction company in Kota Kinabalu, Malaysia in 1998. Farouk joined Etiqa Off-shore Insurance (formerly MNI Offshore Insurance) in Labuan in 2002 as an insurance and underwriting manager where he gained experience of the international reinsurance industry, risk management and corporate governance. Farouk held many positions in Etiqa; his last appointment was the Principal Officer of the company. In Challenge Group, Farouk is responsible for Challenge Group’s Underwriting Management services for Labuan reinsurance and captive companies, corporate finance and administration and is also involved in business development for the Group.

Senior Management

George LavrishchevGeneral Director of Challenge Group – Insurance Consultants and Brokers Ltd.George is a highly qualified expert in reinsurance and finance with profound knowledge of Russian insurance/re-

insurance market. He started his career in 2001 when he became CEO in Far East Forest Insurance Company, Vladivostok branch and a Lecturer at the Far East State University in the Department of Insurance. George became professionally in-volved in international insurance/reinsurance practice after he gained his second degree in the University of Auckland (New Zealand) in 2005. Apart from his broker activity in the Russian market George is also involved into Captive/Rent-a-Captive programs including development of reinsurance programs and international consultancy.

Elena BredikhinaDeputy General Director of Challenge Group – Insurance Consultants and Brokers Ltd.Elena is a qualified lawyer with an excellent knowledge of international law and a 10-year operational experience

mostly in the field of reinsurance.Elena is in charge of treaty reinsurance and responsible for placement and support of obligatory programs. She

also has special responsibility for all business of certain key clients.A profound knowledge of Russian and international law combined with all-round reinsurance experience allows

Elena to get the best conditions for our clients both in terms of wording and placement of obligatory programs.Utilising her legal knowledge and experience, Elena also supervises all activity connected with legal aspects of our

business, including loss settlement, disputes with participation of parties of different jurisdictions, domestic and international arbitration processes, drafting (re)insurance contracts and other documents. She also leads on our activities in assisting clients with difficult reinsurance recoveries.

Anton LavrishchevHead of agricultural risks of Challenge Group – Insurance Consultants and Brokers Ltd.Anton has PHD in Agricultural Science, has a profound knowledge and more than 15-year operational experience in

the field of nature and analysis of agricultural risks in the Russian Federation.In Challenge Group he is in charge of our agricultural risks business and is responsible for the analysis of agricultural

risks, development of underwriting procedures, maintaining statistical bases, computer modeling, and outsourcing support.Anton successfully combines practical activities in the Company with scientific research at the Agrology Department

of the St.-Petersburg State Agrarian University, where he is an assistant professor and has written a set of publications in academic periodicals of the Academy of Sciences of the Russian Federation and abroad.

Anton’s academic interests allow Challenge Group to combine successfully the practical and scientific methods of analyzing agricultural risks and to continuously progress in this sector of our business activities.


Reinsurance BrokingThe provision of consulting services for the development of international business, actuarial analysis and alternative risk management give Challenge Group significant advantages and huge opportunities for the complex analysis and development of reinsurance solutions.

Challenge Group apply the unique experience and extensive knowledge of its team, as well as stable relations with the insurance and reinsurance markets, to provide competitive terms and conditions for your reinsurance needs and shall always aim to obtain qualitative and effective coverage in line with its Client’s requirements.

Depending on the nature and complexity of the risk, Challenge Group is able to place business in continental European, Lloyds of London and the London com-pany market, North American and Bermudan markets and also South-East Asia, India, Middle East and Africa.

We believe that one of our significant advantages is that we can offer our clients access to the alternative markets of Eastern Europe and Russia. Access to these markets is especially relevant at the moment whilst we are in a continuing period of soft markets which allows us to achieve the most favorable rates and optimal conditions for reinsurance.

Having a significant presence in the region Challenge Group with its team of Russian experts, has a number of advantages when placing international risks in Russia. The most important is the deep understanding and knowledge of the Russian market, its capacity and potential, local legislation, as well as the ability to assist with the negotiation of rates, terms and conditions with reinsurers, full documentary support specific for the country, intermediation in premium and indemnity payments, etc. Challenge Group enjoys the confidence of the local market to such an extent that it manages a number of automatic binders and in particular a marine binder with the capacity of 2,5 million US dollars, granted by one of the significant Russian market Reinsurers who have delegated their underwriting authority to the Group.

Challenge Group considers the provision of an intelligently constructed reliable and fairly priced reinsurance product as the key and most important broker service we can offer. We are eager to introduce our clients to all the opportunities and innovations of the international reinsurance market and to provide them with an individual approach even for the most non-standard and challenging of projects.

6 C H A L L E N G E G R O U P | I T ’ S K I N D O F F U N T O D O T H E I M P O S S I B L E

Russian securityThe challenging economic situation pushes many international companies to look at alternative markets that can provide good reinsurance security at a realistic and competitive pricing. That is exactly what we believe the Russian market offers as an attractive alternative and we actively promote the Russian market on this basis!

Russia is today one of the fastest growing and developing insurance markets in the world and is the largest in Central and Eastern Europe. This factor linked with the ongoing integration of Russia into the world financial market, general economic growth, government support and improved regulatory regime has led many international insurance companies more actively to consider Russian reinsurance capacity alongside other traditional markets.

The aggregate chartered capital of the top 30 Russian Companies reached more than 800 million US dollars and the total volume of premiums collected by the top 30 for the year 2010 is about 12,5 billion US dollars.

Traditionally some activities dominate the Russian economy and as a result in-depth expertise in the insurance/reinsurance of Power and Energy, CAR, Metallurgy, Marine, Aviation and Space risks is very well developed in the Russian insurance/reinsurance market. The major companies provide insurance/reinsurance services for all of these classes of insurance; however there are also many companies who focus on a particular class of business and they are accepted professionals in the area of their specialization in Russia and are also recognized internationally.

Despite the lack of high international financial ratings (the highest rating of the local insurer is BBB-S&P) the companies’ pro-file and other economic parameters such as the assets, the amount of insurance reserves, the volume of income and net worth, etc.

demonstrate that there are very reliable and responsible companies in the market. A significant factor is that many companies have very reliable reinsurance treaties for their different lines of business, which are placed with reputable, highly-rated and financially stable international reinsurers. Treaties placed for marine hull, cargo and aviation normally cover both domestic Russian business and international risks. This allows the Russian companies to offer tangible capacity for international Cedants and the Cedants can enjoy more competitive solutions with reliable security.

Russian reinsurers target providing effective and competitive services and to give more confidence to the international Clients some markets register and operate in South East Asia through Labuan, where Challenge Group manage the companies and are their underwriting manager.


Reinsurance RecoveriesIt is a very important part of the broker activity to support the Client with a prompt claim settlement as any difficulty in recovering may adversely affect the insurance company’s cash flow, balance sheet and operations alike. Such a situation involving foreign reinsurers and co-brokers may be aggravated due to their being governed by other business principles and laws, which can result in many difficulties and barriers for an insurer seeking to recover under the reinsurance agreement.

Challenge Group possesses extensive experience and a highly skilled team to successfully negotiate settlement of recovery-related disputes with reinsurers.

Our approach is based not only on the legal evaluation of loss details, contract terms and conditions, and validity of a refusal to pay, but also on the extensive and long term hands-on experience possessed by our experts who have been closely involved in arbitration pro-ceedings related to such cases in the European and Asian markets, they also have wide spread experience in dealing with Russian reinsurers.

In our work, we try to avoid direct confrontations, the experience and reputation of our team encourage debtors to more ready consider settling a dispute at an early stage following our involvement. Nonetheless, due to the intricacy of cases and great volume of reinsurance recoveries the settlement of a dispute may go beyond the pre-judicial proceedings. In this situation, our experts who are not only intimately familiar with the international reinsurance law, but also know how to apply new regulations and case law, and will be there to protect your rights at any stage of legal proceedings.

When Challenge Group is not supporting the Client with a recovery as the broker we will be happy to offer recovery services indi-vidually with respect to the following:

n Receivables under treaty/facultative reinsurance agreements. n Reinsurers’ receivables. n Receivables under Alternative Risk Transfer

(ART) programs. n Receivables available for set-off.n Uncollectible written-off receivables.

Reinsurance is a complex matter, and we real-ize that each recovery case is unique and depends on many circumstances and details which might affect the outcome.


Agricultural ProgramThe agricultural program is one of the key areas in which Challenge Group positions it-self as a company having a deep knowledge and the capabilities for handling risks in this very specialised business segment.

In addition to our team of highly knowledgeable specialists, including those having degrees in agricultural science, Challenge Group has a comprehensive statistical database, which covers most Russian regions in terms of crop yield, hazardous natural phenomena, temperature, precipitation, soil humidity, soil properties, etc. We also use widely computer models based on the above statistics as our auxiliary tool for deter-mination of the expected yield per crop in a region.

Having strong links with leading agricultural institutes, Challenge Group has permanent access to laboratories enabling it to analyze soils for humus content, avail-ability of main nutrients, soil texture, etc., which significantly contributes to analysis and placement of complicated risks, especially when limited details are provided by a client.

All the above strengths help us not only to place agricultural facultative/obliga-tory programs in a quality manner, but also to provide our clients with information and technical support at the various risk handling stages.

In certain instances, we can visit the insured site and perform its full pre-underwriting analysis, as well as to conduct our expert inspection of crops, nature of damage to crops and investigate circumstances of an event occurred upon any insured loss occurrence.


Underwriting Management ServicesChallenge Group has positioned itself as a specialist underwriting manager in Labuan, Malaysia where we provide services to manage and represent insur-ance and reinsurance companies including captive insurers registered in Labuan.

Our experience and in-depth knowledge and understanding of the inter-national insurance and reinsurance industry ensure that we are fully equipped to act as a professional manager in Labuan by facilitating the requirements of our Client in the areas of:

n License application — The preparation of license applications to the authorities, furnished with appropriate business plans is all part of our service to ensure that an entity is set up in the shortest time possible.

n General administration and management services — Our team is comprised of professionals in the areas of underwriting, reinsurance, captive management, risk management, accountancy, law and actu-arial practice and it is our mission that by partnering with our Clients we will grow together confronting and answering the challenges of the business. These services comprises:

n Accounting (including technical accounting); n Treasury and cash flow management;n Statutory and regulatory compliance;n Administration and human resource;n Record keeping.

n Underwriting support — Our underwriting experts have good experience in the review of insurance/reinsurance policies and ensure that they are in accord with the regulatory requirements. Additionally our understanding of reinsurance business and practice in different markets allow us to advise on the technicalities of the reinsurance aspects, legislation, common market practices etc. This would include assistance in the documentation of slip wordings, notes, claims and the proper operation of all reinsurance procedures.

n Claims management — We can review the claims policies and advise improvement on claims management as may be appropriate n Actuarial, risk analysis and profiling — Through these skill sets we are able to provide an enhanced assessment of client’s risk

which may in addition be linked to the clients Enterprise Risk Management requirements.


n Corporate Governance matters — If appropriate we are equipped to review the Labuan organizational structure and advice on the corporate governance matters to facilitate compliance. This can entail drafting the general operating procedures for internal controls, accounting and treasury polices, anti money laundering policies, risk management framework, etc.

n Dispute resolution — Should any assistance with Arbitration or Mediation be required, we have the resources to provide the necessary assistance and guidance.

Our aim is to be an effective, productive and proactive Underwriter Man-ager and to provide our clients with more efficient and effective but also more economical solutions not just in Labuan or Asia but wherever we are represented.

Challenge Group is active in Asia, Russia, Eastern Europe, Middle East and South America. We are well versed in the various regions’ demand and appetite for reinsurance and are therefore constantly seeking business opportunities for our clients. We have strong links with local insurers and intermediaries and work to facilitate their reinsurance capacity requirements. We will be happy to offer our Clients selected business from those areas in which they have a specific interest.

Concurrently our package of management services includes assistance with marketing requirements such as arranging for meetings with key players, providing and supporting logistics requirements, enabling discussions on the Client’s behalf particularly as regards technical matters involving claims and underwriting and also extending to organizing small conferences or functions etc.

Our local knowledge, presence, good working relationship with the au-thorities and relevant service providers will ensure that our proposals are simple to implement and very convenient for our clients.

With these abilities, we are convinced that there will be many and greater opportunities to support and to work together, to grow and to strengthen our Client’s business development strategy.


Captive ProgramThe number of companies seeking alternative forms of risk management and tools for their implementa-tion has increased in recent years. We believe that one of the most flexible and effective options in this respect still remains in using a “Captive”.

In a nut-shell a Captive is a closely held insurance company whose insurance business is primarily supplied by and controlled by its owners, and in which the original insureds are the beneficiaries. The use of Captives is widely accepted around the world. More than 50% of the largest companies of the Fortune 500 have at least one captive.

A key feature of Challenge Group is that we specialize in the development of Captive programs taking into account the specifics of legislation and practical experience of the local market. Using a Cap-tive approach gives a unique opportunity to create an effective and marketable business structure.

Our services are not limited to Captive formation and licensing because we believe that the success of any Captive depends on profes-sional on-going management. A key element of our service is to fully support our clients after the Captive is created and therefore we can also develop tailored reinsurance strategies and risk management programs alongside carrying out the functions of being captive’s: underwriters, actuaries, tax and investment advisers etc.

As well as captive formation and management you will also gain access to our “fronting arrangements” with both insurance companies and with highly rated international reinsurance companies. If you need

“fronting” services our partners will insure/reinsure your risks first and then cede them to your captive.


With our team you can always count on a professionally created and effectively functioning captive which will easily integrate into your business structure.

Rent-a-CaptiveThe operation of our Rent-a-Captive program is similar in nature to the operation of a Captive Insur-ance Company, but instead of having to become in-volved in the complicated process of incorporation and licensing of your own Captive and therefore significant cost and capital requirements, you will have instant access to an currently operating, pro-fessionally managed company.

Challenge Group owns a special structure “Master Captive” which allows us to create captive companies (Subsidiary Rent-a-Captive/Cell) within a short period of time. The cells carry on their activity with separate licenses, assets and bank accounts but at the same time using the working capital and administrative resource of the Master Captive.

Another important element is that all companies (cells) created in this structure, are legally separated from each other which means that there is no pooling of risks between them and each cell is protected from another cell’s loss experience.

Our Master Captive, Challenge Group Underwriters & Managers (L) Inc, is operated in Malaysia which allows our clients to work with one of the most quickly developing economies of the South-East Asia region, with convenient access to such world financial centers as Hong Kong, Singapore and Jakarta. Moreover Malaysia has concluded double tax treaties with more than 70 countries giving unique opportunities for investment projects.

A Rent-a-Captive Program is an effective risk financing vehicle and provides all the advantages of a Captive. At the same time it will allow clients to:

n to reduce the term of licensing to two weeks;n to make maximal use of our long-term experience and professional support in all aspects of captive management;n to benefit from Malaysian advantages for successful investment activity;n to liquidate captive/cell quickly and easily if there is no further need for the facility;n to avoid subscription of the authorized capital.


Office in Russia:Address: Sadovnicheskaya st.57, bld.1, office #6. Moscow, Russia, 115035Tel.: + 7 495 663 91 41Fax: + 7 495 951 32 90 Director: George Lavrishchev Mob.: + 7 909 168 42 71e‑mail:[email protected]: glv-international

Management Office in Labuan:Address: Level 6F, Main Office Tower Financial Park Labuan Complex, Jalan Merdeka, 87000 W. P. Labuan, MalaysiaTel.: + 60 87 583815Fax: + 60 87 583814 Director: Ahmed Farouk AripenMob.: + 60 19 8121817e‑mail:[email protected] Skype: faroukaripen

Office in Kuala LumpurAddress: Level 36, Menara Citibank,165 Jalan Ampang, 50450 Kuala Lumpur, Malaysia Tel: + 603 2169 6221 Fax: + 603 2169 6227 Director: Irina Shevyakova Mob.: + 60 19 8422075 e‑mail:[email protected] Skype: delanta2323

Office in UK:Address: 2 Crowhurst Oast, Bells Farm Road, East Peckham, Tonbridge, Kent, TN12 5NA, UKTel.: + 44 1622 872654Fax: + 44 1622 872654 Director: Charles James Catt Mob.: +44 7880 813017e‑mail:[email protected]: challengegi

www.challenge‑gi.com

Documents

Challenge Group