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General Insurance Newsletter Friday 18th February 2022

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Insurance News

It’s a big day for AXA UK&I which has announced its acquisition of the renewal rights to Ageas UK’s commercial business, for the initial consideration of £47.5 million. In a Press release, AXA highlighted that the deal further solidifies its growth strategy and commitment to its commercial business customers and broker partnerships, particularly in the SME and schemes market segments. Per the terms of the transaction, around 100 Ageas UK employees will move to AXA Commercial to provide ongoing support and service delivery. The deal will see renewals transfer to AXA Commercial from June 2022.

The insurance industry is struggling as the pandemic and other factors continue to squeeze profits, according to a new report by management consulting firm McKinsey & Company. Half of all insurers globally are not earning their cost of capital, according to the report. The COVID-19 pandemic is a major driver of industry woes, McKinsey & Company said. “The global pandemic is resurgent with yet another wave of rising case numbers and pressure on healthcare systems. Its effects on business are no less significant,” the report said. “Over the past two years, COVID-19 has accelerated some trends that look certain to reshape the way insurance is underwritten, distributed, and managed.”

An investor in the major insurance companies Chubb, The Hartford, and Travelers Companies has called for the insurers to drop underwriting new fossil fuel projects, but all three are pushing back. Environmental investment advisor Green Century Capital Management filed resolutions which called for the three insurers and their respective board of directors to “adopt and disclose new policies to help ensure that its underwriting practices do not support new fossil fuel supplies, in alignment with the International Energy Agency (IEA)’s Net Zero Emissions by 2050 Scenario.” However, Chubb, The Hartford, and Travelers Companies have each filed no-action requests with the SEC.

Gloucester City Council is still reeling from the cyber incident that hit it last December – i.e., IT systems have yet to be restored – and now the council is facing questions over its cyber insurance, or possibly lack thereof. “It is ridiculous that the Conservative administration at the city council won’t disclose whether or not it had insurance to cover the cost of recovery from the cyberattack,” Gloucester News Centre and Gloucestershire Live reports quoted Councillor Jeremy Hilton as asserting. “Saying ‘yes’ or ‘no’ would not disclose anything confidential that would hamper the recovery from hacking of the council’s IT systems.

“Outstanding” is how American International Group (AIG) chairman and CEO Peter Zaffino described the global insurer’s fourth quarter (Q4) and full year (FY) 2021 financial results.  The insurance giant reported FY21 adjusted after-tax income (AATI) of US$4.4 billion, or US$5.12 per diluted common share, compared to US$2.2 billion in 2020. FY21 net income attributable to AIG common shareholders was US$9.4 billion, compared to a net loss of US$6 billion in the prior year.

There were 418 completed mergers and acquisitions in the insurance sector globally last year, up from 407 in 2020, according to global law firm Clyde & Co’s Insurance Growth Report. M&A activity was driven by a particularly strong second half, which saw 221 deals completed, up from 197 in the first half. Deal activity in Europe rose 21% year over year, with 74 transactions in the second half, up from 51 in the first half.

Despite the risks, fewer and fewer companies are investing in cybersecurity training. Only 40% plan to offer this type of training this year, found a survey by IT company NOVIPRO. This is down from 42% in 2020 and 51% in 2019. While cyber-crime is rampant these days, nearly four in 10 say they don’t receive any cybersecurity training at work, according to a separate survey. However, 56% of organizations that were targeted by malware have paid the amounts requested by cybercriminals, finds the NOVIPRO survey of 491 respondents in October 2021.

MS&AD Insurance Group Holdings– the name behind the likes of MS Amlin and insurethebox– has released its financial statements for the nine months ended December 31, 2021. According to the Japan-headquartered group, its net income attributable to owners of the parent for April 01 to December 31 last year amounted to ¥204.6 billion (around £1.3 billion). In the same span in 2020, the corresponding figure stood at ¥150.1 billion.

The Edinburgh-headquartered insurance broker Bruce Stevenson has today reported revenue and GWP increases of 7%, with trading income up £600,000 to £8.7 million and GWP standing strong at £44 million. Commenting on the results, Bruce Stevenson CEO Edward Bruce (pictured) said: “We are pleased to report strong organic growth, in what was a challenging year with difficult trading conditions for the business and the industry overall.”

Vitesse PSP has raised US$26 million (£19.16 million) in a Series B funding round led by Prime Ventures. The proceeds will be used to drive further digitisation of the insurance market, the UK-based financial technology firm said.

The Clear Group has today announced that Ashwin Mistry OBE (pictured) will step down as executive chairman of Brokerbility and Brokerbility Holdings Limited. The change is effective March 1st 2022 when Mistry will take up a new role as non-executive director on the operational board of the Clear Group.

It’s the turn of Sydney-headquartered insurer QBE Insurance Group to reveal how it fared in the past year, and today’s financial results point to a major turnaround. For the year ended December 31, 2021, QBE posted a net profit after tax of US$750 million – a huge leap from the US$1.52 billion net loss after tax suffered in the same 12-month span in 2020. Underwriting profit stood at US$1.14 billion, also a recovery from the prior year’s US$869 million underwriting loss. Gross written premium in 2021 saw a 22% increase to US$18.46 billion.

Munich-headquartered insurer Allianz has released its financial results for the final three and full 12 months of 2021, and the numbers are somewhat of a mixed bag. Of the fourth quarter operating profit, €1.6 billion came from the property & casualty segment while life/health insurance contributed €1.3 billion. The latter represents an 11.6% decline from the same period in 2020; that for P&C, a 76.1% surge. For the full year, P&C operating profit jumped 30.6% to €5.7 billion; life/health, 14.9% to €5 billion.  

Kingsbridge opens Birmingham office amid tripling business by 2024 target. MD Gary Williamson has appointed Berkeley's Mark Hayward as branch director and revealed Kingsbridge's plan of action for the rest of the year. Kingsbridge is on track to grow the business by 40% this year, according to managing director Gary Williamson. The broker has just set up a new office Birmingham, which opened today, and Williamson revealed that Mark Hayward has taken on the role of branch director. Hayward has joined from Berkeley Insurance Group, where he worked as a director.

The latest data from the Financial Conduct Authority has revealed that insurers’ final payments to settle Covid-19 business interruption claims has broken through the £1bn barrier to £1.007bn. The updated figures showed that as of 7 February the total had grown from £968m in January. This came as the number of claims agreed and paid in full rose by 1,149 month-on-month to 30,176.

Open GI delivered £26.7m of Ebitda in the year to 31 May 2021, marginally down on the £27.3m achieved the year before. Revenue at the technology specialists also nudged down from £42.6m in 2020 to £41.7m. The figures in a filing at Companies House showed a greater decline in profit after tax, which dropped by 35% year on year to £12m.

The Financial Services Compensation Scheme has declared Perry Prowse (Insurance Consultants)as a failed firm. The Exeter-based broker had its permissions removed by the Financial Conduct Authority in September 2019. The business entered into liquidation in January 2020. The FSCS updated on 8 February that it was a failed firm and that while the company no longer existed consumers may be able to make a claim against it.

Mergers & Acquisitions

Partners& has further enhanced its employee wellbeing and benefits business with an acquisition and a strategic partnership. The company has acquired corporate benefits broker Direct Healthline Ltd in Royal Wootton Bassett. As part of the deal, the entire Direct Healthline team will join Partners& and will report to Partners& managing partner for wellbeing, engagement, and benefits Marcia Reid.

Clear Group is on track for growth, aiming to reach £300m GWP by the end of 2022 and acquire more businesses, according to CEO Mike Edgeley. Following the acquisition of Kent Insurance Brokers last month, Edgeley, who took over the CEO role last year, commented that the broker had ambitions to seal more deals over the coming months.

Movers & Shakers

Specialist insurer Beazley has announced two senior leadership appointments in its global cyber services team. Russ Cohen has been appointed head of US cyber services, while Bala Larson has been named head of client experience. Cohen will oversee risk management and incident response functions in the US, while Larson will ensure that the company delivers the best possible services to its cyber clients.

The specialist global insurer Hiscox has today announced that, subject to regulatory approval, Jon Dye will take on the role of leading Hiscox UK as CEO, effective September 2022. In a Press release, Hiscox said that in his new position, Dye will be responsible for heading up Hiscox’s flagship retail business in the UK. It noted that this is a business with a track record of profitable growth, driven by long-standing broker relationships, a strong brand and investment in digital distribution and algorithmic underwriting.

Two members of the Berkshire Hathaway Specialty Insurance (BHSI)team in the UK have moved up. Promoted to the roles of casualty head and technical casualty head, respectively, are Caroline Alder-Smurthwaite and James Emson. The latter came onboard BHSI in 2018 as senior casualty underwriter before taking on the position of casualty manager for technical casualty. Alder-Smurthwaite, meanwhile, became part of the BHSI family in 2021. Prior to joining as general casualty head, she served as London corporate casualty and international casualty manager at Chubb.

Marsh has named Nick Faull as head of climate and sustainability risk, effective April 1. Based in London, Faull will report to Amy Barnes, Marsh’s head of climate and sustainability strategy.

It’s a full-circle moment for Elliot Miller to be based in a Glasgow office once more. Miller, who recently took on the role of regional managing director for Scotland, Northern Ireland, and the North East of England for Gallagher, started his career at 16 on a government-run Youth Training Scheme with the South of Scotland Electricity Board (SSEB). From there he took his first foray into insurance with a job at General Accident and he hasn’t looked back since.

Specialty insurer Brit has announced the appointment of Tim Hodgkins as cyber underwriting consultant. Hodgkins reports to Ben Maidment, head of global cyber, privacy and technology.

Greg Roberts will be joining the executive committee at Conduit Holdings next month in his new capacity as group chief underwriting officer. Currently the CUO post is held by group chief executive Trevor Carvey, whose sole focus will be leading the Bermuda-based business.

Optio Group has promoted Mark Kelsey to the role of UK head of political violence and terrorism (PVT). As head of PVT in the UK, Kelsey will report to Optio PVT global head Chris Kirby – who relocated last September to establish Optio’s PVT underwriting capabilities in the US, a release said. Kelsey first joined Optio as a senior underwriter in 2020.

MS Amlin Underwriting has expanded its risk function, led by chief risk officer Vishal Desai, with four senior appointments. John Winder has been hired as senior manager of the insurance risk pillar. Victoria Harding will soon take on the role of head of enterprise risk management (ERM).Wendy Kriz has joined as senior manager of the function’s validation and risk intelligence pillar. Maurice Rose has joined as senior manager of the ERM pillar. 

After a successful 2021 financial year, global specialty insurer Brit Limited (Brit)has started the next phase of growth of its ILS investment platform, Sussex Capital, by welcoming Cornell Fox and Masa Kitade to the team.

Legal expenses insurance provider ARAG has appointed Emma Wilson as after-the-event (ATE) account manager for western England. Wilson will be responsible for developing new relationships with solicitors and nurturing existing ones in the North West, West Midlands, and Bristol, ARAG said. She will report to ARAG UK sales manager Mike Knight.

Managing general agent (MGA)Rokstone has appointed Jo Lambe as digital product development manager. As digital product development manager, Lambe will be responsible for the digital transformation of the company’s existing products, as well as for leading the development of new native digital products.

AXA XL has appointed Matthew Wells as senior underwriter, marine – UK & Lloyd’s. In this role, Wells is responsible for developing and managing underwriting strategies for both renewing and new business within AXA XL’s UK marine book of business.

Tokio Marine HCC International has bolstered its professional risks division in the UK with the relocation to two larger premises in Cardiff and Birmingham, as well as a number of new hires and promotions.
Adam Bradford takes on the role of underwriting manager - professional risks Midlands and South, to lead and build the Birmingham team. Russell Rees has been promoted to underwriting manager to assist with management of the Bristol team. Adam Sullivan and Jamie Richardson have recently taken up roles as development underwriters in Birmingham. In Manchester, Ian Bush has been hired as development underwriter, bringing 20 years of PI experience across a wide variety of professions. Sue McCurdy has been promoted to development underwriter and Hayley Livesey has joined as underwriting assistant, also bringing 20 years of administration and organisational expertise. Additionally, Jenny Campbell has joined as underwriter – liability.