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General Insurance Newsletter Friday 14th May 2021

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Brokers have a “massively important part to play” in ensuring that customers receive value from their insurance products, according to Matt Brewis, Director, insurance and conduct specialists at theFinancial Conduct Authority (FCA). Speaking at the 2021 Biba Conference, he explained that the regulator will continue to focus on product value going forward.

In further news...Insurers have paid out over £701m in Covid-19 related Business Interruption claims since the conclusion of the test case, according to a fresh set of data from the Financial Conduct Authority (FCA). The regulator revealed that providers had made initial payments for unsettled claims worth £268.2m and final settlements of £433.1m as of 5 May 2021.

TheFinancial Conduct Authorityhas revealed it spent over £145,000 on recruiting its current Chief Executive Officer, Nikhil Rathi. HM Treasury announced Rathi’s appointment last year and he took up the role on 1 October 2020.

TheFinancial Services Compensation Scheme (FSCS)has updated its levy forecast for 2021/22, with the Broker levy set to be reduced to £12.9m. The total Broker contribution has reduced from £146.8m to £73.8m. This includes the levy for the broking funding class of £12.9m, compared to the forecast of £14.4m, as well as a contribution to the retail pool of £60.9m, which has been reduced down from £132.4m.

TheBritish Insurance Brokers’ Association (Biba)has named Alex Margolin of Sioma Insurance Consultants Young Broker of the Year 2021. The trade body stated that as Young Broker winner, in addition to industry recognition at Biba’s annual conference, Margolin was given a cash award. It added that the two runners-up from a “field of exceptionally high quality” were Colette Crawford of Marsh and Ola Jacob Raji of FloodFlash. Among other awards was Keith Frampton, receiving Biba's Francis Perkins award for his tireless work bringing appropriate insurance cover to members of the armed forces and his commitment to Biba.

In further news...the British Insurance Brokers’ Association (BIBA) has welcomed the FSCS’ revised Broker levies for this year which have been reduced by half since the forecast in January. BIBA has lobbied strongly to have the original unfair forecast reduced, writing formally to the Insurance Minister, John Glen and the CEO of the FCA, Nikhil Rathi highlighting that no other regulatory regime in the world exposes general insurance intermediaries to the failures in other sectors.

TheBritish Insurance Brokers’ Association (Biba)is planning a return to Manchester and a face-to-face conference for 2022. Commenting from the 2021 conference studio, Huw Edwards, BBC broadcaster and Biba conference host, said that the organisation would like to hold the 2022 Biba conference and exhibition at Manchester Central.

Diversity of thought, innovation and progress is created by diversity of talent. This is according to panelists on the British Insurance Brokers’ Association (Biba) diversity, equality and inclusion panel at its 2021 virtual conference. Pauline Miller, Head of Culture at Lloyd’s, said that over the last few years, the dialogue along equality, diversity of inclusion has been growing.

Direct Insurancehas announced a global restructure and rebrand toAventumas it seeks to “become one of the biggest and the best global (re)insurance specialty wholesale businesses in the world”.

Insurers have embarked on a silent Cyber crackdown since a January 2019 Prudential Regulation Authority letter that warned that they must do more to understand and eradicate the risk, which occurs where policies may inadvertently provide cover for Cyber losses. Following this regulatory pressure,Lloyd’smandated that from January 2020 its market participants must ensure that first-party Property damage policies either state that they exclude Cyber losses or declare that they are covered.

TheUK Broker Awardsare now open to enter for Brokers across the UK. The awards are an opportunity to celebrate the success and highlight the hard work and innovation by staff within the sector. A top judging panel has been assembled to assess the high quality submissions and pick the best of the best from range of categories.

The global InsurerBeazley plchas become the latest insurance company to step up to the plate and highlight its trading results for Q1 2021, ended 31 March, 2021. Overall, it was a positive start to the year for the company with gross written premiums (GWP) increasing by 16% to $971 million (around £691.22 million) from Q1 2020’s $840 million. The Insurer also reported that its premium rates on renewal business increased by 16%, ahead of its expectations.

The parent company of the new reinsurer Conduit Re,Conduit Holdings Limited (CHL)has released its trading statement for Q1 2021, ended 31 March 2021. Among the key results issued by the group, it revealed that this quarter saw Conduit Re bind contracts with total expected ultimate premiums written of $199.1 million (around £141.73 million), marginally ahead of the business plan presented in its IPO prospectus. It was noted that Conduit Re also wrote a higher proportion of quota share business than plan, creating a lag in the accounting recognition of gross written and earned premiums.

TheAssociation of British Insurers (ABI)has become a supporting institution of the UN Environment Programme’s Principles for Sustainable Insurance Initiative (PSI), joining other insurance associations worldwide in backing the PSI. A global sustainability framework, the PSI is described as the biggest collaborative initiative between the United Nations and the insurance industry. It aims to strengthen the industry’s contribution as Risk Managers, Insurers, and Investors to building resilient, inclusive, and sustainable communities and economies.

ARAG Holding SEhas remained profitable, albeit at a lower level in 2020 compared to the prior year. Releasing its 2020 key business figures, the ARAG Group said its gross written premium grew 4.8% to €1.85 billion (around £1.55 billion). The growth in premium income was mainly attributed to the strong legal insurance segment, which is the Insurer’s biggest unit.

“The Planning Bill set out in the Queen’s Speech represents a once-in-a-generation opportunity to ensure that houses are built in the right places and of the right quality to meet the challenges of climate change.” That was the joint assertion made byFlood ReChief Executive Andy Bord andTown and Country Planning AssociationCEO Fiona Howie in a letter published by The Times, in which the two made a plea to the British government to take Flood risk into consideration in the planning legislation announced during the Queen’s Speech.

AXA XLhas launched its 8-week UK Broker Academy, to drive professional development and further collaboration within the UK insurance market. Although solely a digital offering while COVID-19 restrictions remain in force, the UK Broker Academy aims to keep interaction high, with cohorts of 30 young Brokers from across the UK on each programme working together virtually and supported by industry experts.

AXA Commercialhas launched its new Broker Learning Zone, which provides practical, on-demand guidance and training, tailored to remote working and learning styles. Resources focus on sales, technical knowledge, health and wellbeing and management and leadership development, with a view to helping Brokers adapt to new ways of working.

Jon Dye, CEO,Allianz Holdings, commented: “The first quarter of 2021 saw a dip of 10.6% in GWP for Allianz Holdings against the backdrop of reduced economic activity and challenging trading conditions in both the commercial and Personal Lines markets. The pandemic and lockdown continue to impact all lines of business in different ways and Allianz Insurance and LV= GI are extremely well positioned to navigate the ongoing uncertainty. We will continue to provide all the support we can to customers, Brokers and colleagues as restrictions are lifted and the country cautiously reopens for business.

DAS UK Group (DAS UK), the UK’s leading specialist legal expenses Insurer, has published its financial results for the year ending 31st December 2020. DAS UK includes a legal expenses insurance company (DAS LEI) and a law firm (DAS Law). 2020 saw DAS UK deliver a strong underlying performance although the results were impacted by the combined effects of Brexit and the Covid-19 global pandemic. GWP of £109m is down on prior year driven by the disposal of the company’s branch in the Republic of Ireland and a Norwegian portfolio put into run-off; both actions taken in response to Brexit.  On an underlying basis, the Before the Event (BTE) portfolio grew by 4% off-setting a contraction in the After the Event (ATE) portfolio driven by lower volumes in the Clinical Negligence sector.

Covéa Insuranceis delighted to announce an exciting new partnership with pay-by-mile Insurtech,By Miles. The partnership between the two firms recognises increasing customer interest in usage-based Motor insurance, which has gained momentum as a result of the pandemic. By Miles saw an over 150% increase in policy sales in March this year, compared with the same time in 2020. Based on the premise that if you drive less, you pay less, the product provides inbuilt flexibility for motorists with low or variable mileage, putting customers back in control of the cost of their insurance as they only ever pay for what they use. There is no need to inform the Insurer of their mileage, or request a refund, the process is completely seamless.

TwoAvivacolleagues have made the EMpower Ethnic Minority Role Model lists. These celebrate the achievements of the ethnic minority business community. Chika Aghadiuno, Group Enterprise Risk Director, came 52nd on the EMpower 100 Ethnic Minority Executives List. Shreeya Paudel, Client Relationship Manager, Aviva Investors, came 39th on the EMpower 100 Future Leaders List. Congratulations to Chika and Shreeya!

In further news...Aviva has put 115 IT staff at risk of redundancy as it seeks to restructure its digital engineering and platforms operation.

YouGov survey conducted on behalf of Getsafe has unveiled that a nearly half of 25–34-year-olds deem contents insurance unnecessary, reportedly leaving £90bn of their uncovered belongings at risk. The research surveyed adults in the UK between the ages of 18 and 65 via an online questionnaire, totaling 2,069 British participants. It details that 50% of people between their 20s and mid-30s don’t have contents insurance despite having belongings worth over £35,000.

Specialist insurance providerCFC Underwritingis expanding its Transaction Liability services with the launch of a new solution designed to support North American companies purchasing a UK or European targeted business. In a statement, CFC said that its new suite of Transaction Liability products aims to fill the gap for Brokers in the transatlantic Mergers and Acquisitions (M&A) space by offering North American buyers the Representations and Warranty (R&W) coverage and processes they are familiar with.

TheManaging General Agents Association (MGAA)and theAssociation of Consumer Support Organisations (ACSO)have partnered to enhance membership services while advocating for consumer rights. “The MGAA works to drive best practice and the highest professional MGA standards, as well as representing members’ interests in negotiations with bodies whose rulings, regulations, or controls may impact members,” said MGAA Chief Executive Mike Keating.

Mergers & Acquisitions

Specialist Risk Grouphas bought Irish MGA,Blackrock Insurance Solutions. Warren Downey, group CEO at SRG said: “We are thrilled to further support our Irish Broker Partners through the acquisition of Blackrock Insurance Solutions. The Blackrock team is a group of genuine specialists who add tremendous value and expertise to the Group’s Underwriting capability.”.

AonandWillis Towers Watson (WTW)have agreed to sell WTW assets, including Willis Re, toGallagheras they take “important step” toward closing their proposed combination. Aon said in a statement that these businesses, which also include a set of WTW corporate risk and broking and health and benefits services, will be divested for a total consideration of $3.57bn (£2.53bn).

Seventeen Grouphas bought Cornwall-basedChristopher Rowe (CRL)for an undisclosed sum. This is the firm’s third deal in under a week and follows its purchases ofRyan Insurance Groupin Ipswich and Ruislip-basedPinner Risk Solutions.

Movers & Shakers

Renovation Underwriting (RUL)has hiredJames Guthrie, formerly of Covéa and Sterling, as Head of Distribution in what is a newly created senior role for the business.

Zurich Insurance Grouphas promotedHayley Robinson, currently UK Chief Underwriting Officer, to the role of Group Chief Underwriting Officer. She will start her new role on June 1 and will be based in Zurich, Switzerland.Rob Kuchinski, Head of Commercial Insurance UK, will take over responsibility for UK underwriting on an ad interim basis until Robinson’s successor has been announced.

In January 2021,Direct Line Insurance Group (DLG)announced that its Chief Financial OfficerTim Harriswould be taking a leave of absence while a member of his family undergoes medical treatment. DLG’s board has regretfully revealed that this medical treatment will likely continue for longer than anticipated and that Harris has decided to retire as an Executive Director and as CFO in order to prioritise his family. As a result, he will not seek re-election at the CFO AGM. The board has therefore resolved to make the following changes to its membership and chairmanship of its board committees.Neil Manser, Chief Strategy Officer, former MD of DLG’s commercial business, NIG, and former Director of Investor Relations, has been acting CFO since January 2021. The board has resolved to appoint him as an Executive Director and CFO, and as a member of the investment committee.

Citynet Insurance Brokershas appointedHarry Millsto lead its newly formed international division. In this role, Mills is in charge of driving the division’s growth through offering P&C re/insurance solutions for challenging or unique risks to Brokers, Insurers and MGAs. Mills will also provide London market access for the PIB Group’s growing network of Brokers throughout Europe.

AXIS Re, the reinsurance business segment of AXIS Capital Holdings Limited has announced appointments within the Reinsurance leadership team, creating a new division for Property Reinsurance and simplifying the overall structure. These enhancements align with the priority that AXIS Re places on delivering strong expertise and an engaging client experience. The appointments include:Ann Haughas President of the Global Property Division,Andy Hottingeras President of the International Division,Jonathan Grayas President of the Specialties Division andJason Bustias President of the North America Division.

AXA XLhas appointedAnish Jadavas Chief Underwriting Officer (CUO), Retail Property & Casualty (P&C), UK & Lloyd’s market, effective in July.

AXA UK & Irelandhas announced the appointment ofChris Husseyas Group Internal Audit Director, subject to regulatory approval. Chris succeeds Carl Antrim, who has moved to AXA XL after four years in the role.

All information provided in this Market Digest has been gathered from multiple General Insurance Media sources and individual company press releases.