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Claims Newsletter Tuesday 1st September 2022

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Claims News

Markel International is upgrading the exposure management and claims response processes of its international Wholesale business through a partnership with McKenzie Intelligence Services (MIS). Markel has been using MIS’s AI-powered Global Events Observer (GEO) platform for its Lloyd’s syndicate business since 2017. The Insurer has now chosen MIS to provide rapid event response for its international Wholesale business, which will boost its exposure management and claims response through post-disaster, high-resolution aerial imagery and other data sources from specialist partners.

Urban Jungle is broadening its range of products with a move into car insurance. The Insurtech now offers contents and car insurance, with the new product billed as providing “competitive value” to customers, as well as affordable cover for additional people in the home, including housemates, partners, childminders or carers.

The UK insurance industry is increasingly a target for digital fraud attempts, according to a new Trans Union study. Digital fraud attempts increased 32% from Q2 2021 and Q2 2022, with financial services and insurance seeing the biggest jumps. The data, analytics and software company revealed the figures in its quarterly fraud analysis.

The average price paid by motorists for their Motor insurance in the second quarter of this year rose slightly on the previous quarter to £419, according to the Association of British Insurers (ABI). Its latest Motor Insurance Premium Tracker shows that the average premium paid in Q2 2022 for private Motor insurance at £419 rose by £5 (1.3%) on the previous quarter, although this was still £11 lower than the same quarter in 2021.

A man from Yorkshire has been jailed after attempting to defraud three insurance companies by making bogus claims for medical treatment worth around £24,000. The man submitted more than 100 claims in nine different names between December 2018 and September 2019. An unusual pattern of claims was identified by an Insurer, which led them to refer the case to the City of London Police’s Insurance Fraud Enforcement Department (IFED).

Allianz Commercial successfully prevented £36.8 million worth of insurance fraud in the first six months of 2022, with marked increases in the Property and Casualty sectors. The fraud investigators at the business insurance provider are on track to beat their record from 2021, when they busted £65.8 million worth of scams over the course of a full year.

UK-based Insurtech Previsico is rolling out its live flood forecasting alert service in the US, in partnership with Nexus Alpha USA. The Insurtech started its US expansion in New York, after the city recorded numerous flood-related losses in recent years. To date, Previsico’s services have been live in the city for a couple of months.

DARAG Group has announced the conclusion of a new agreement with an undisclosed captive insurance company. The transaction structure was a novation of its 03-06 and 15/16 policy years with primarily workers’ compensation reserves, allowing the counterparty full legal finality with DARAG facing the original fronting Insurer. The transaction value as at the reference date was approximately US$30m.

Ocorian has reported a significant increase in the number of captives it supports with its Bermuda offices. The firm's insurance specialists now support over 137 Bermuda-registered captive insurance companies, as well as 93 commercial and special purpose Insurers. Growth in the captives market in general is being fuelled by a hard insurance market and rising premiums.

The four largest European reinsurers – Munich Re, Swiss Re, Hannover Re and SCOR – reported a 47% decline in combined net profits for the first half of 2022. The reinsurers reported combined net profits of €1.9bn in the first six months of 2022, down from €3.6bn a year earlier.

The first insurance placement for the new Marine Cargo and War facility launched earlier this month by Marsh and Ascot has been secured. The facility provides up to US$50m in all risks Marine Cargo and War coverage. Now open to Lloyd’s of London registered Brokers in support of ongoing humanitarian efforts, the facility provides cover for Ukrainian grain and other vital food supplies being shipped through safe corridors established by the newly signed Black Sea Treaty between Russia and Ukraine.

Axa Climate has reached an agreement with RMA to use the modelling firm’s HWind analytics tool as a principal trigger metric for its relevant US parametric insurance policies. HWind produces real-time data sets for tropical cyclone events, allowing speedy evaluation of hurricane trigger/payout conditions, which enables parametric policyholders to gain rapid access to capital following impactful events. RMS HWind solutions offer comprehensive coverage over the Western North Atlantic, Eastern Pacific and Central Pacific basins.

Axa has selected Cognizant to operate, streamline and digitally enable part of the Insurer’s legacy IT environment in its UK and Ireland businesses, with the goal of creating a more data-rich, secure and sustainable environment. Cognizant will provide integrated IT services spanning service desk support and maintenance, end-user computing, application development and maintenance, cloud operations and IT infrastructure management.

Sapphire Re has selected Eurobase’s Synergy2 platform to support its end-to-end captive operations. The Synergy2 platform is a release-based solution helping captives achieve sustainable, strategic growth.

Tryg A/S, the largest non-life insurance company in Scandinavia, is joining the RSA’s Global Network as a Strategic Network Partner. The RSA Global Network provides multinational customers with local expertise and service through a combination of owned operations and network partners, operating in more than 180 territories globally.

As the hospitality sector gradually recovers from the impact of lockdowns and wider pandemic-related losses, businesses in the sector are urged to closely evaluate building reinstatement values to avoid being inadvertently underinsured. The risk is further exacerbated with rising inflation, according to Lockton.

Marsh has launched a re/insurance facility that provides dedicated capacity for new and existing green and blue hydrogen energy projects. Developed with Liberty Specialty Markets and AIG, the facility provides up to US$300m of cover per risk for the construction and start up phases of hydrogen projects.

The Financial Conduct Authority has fined Citigroup Global Markets £12,553,800 for failing to properly implement the Market Abuse Regulation trade surveillance requirements relating to the detection of market abuse. By failing to properly implement the proper requirements, the division was found to have insufficiently monitored its trading activities for certain types of insider dealing and market manipulation.

Ransomware attacks have increased by 24% in Q2 of 2022 according to the latest threat report by digital security specialist Avast. The research found that after months of decline, global ransomware attacks increased significantly in Q2 2022, up 24% from the previous quarter, with the highest quarter-on-quarter increases in ransomware risk ratio occurring in Argentina (56%), UK (55%), Brazil (50%), France (42%), and India (37%).

The UK Construction sector is set to face increased insolvency, exacerbating price rises while rivalling inflation as a threat to successful project delivery, according to consultants Turner & Townsend. The firm’s latest market intelligence report alerts clients to increased Construction sector insolvencies which have risen by 72.1% year-on-year to Q2 2022. It warns that businesses should focus on a pragmatic approach to project and programme delivery to help tackle both inflationary and insolvency threats.

Integrated risk management platform RiskSmart has launched in the UK following an investment of over £1m from NPIF Maven Equity Finance and other institutional investors. Founded by Ryan Swann and Michael Aldred, who bring extensive experience in risk management and FinTech services, the startup aims utilise data and AI technology to simplify risk for small to medium businesses that it says have been underserved by complex and expensive platforms, frameworks, and manual processes in the industry.

Insurer FM Global has announced that it will allocate approximately US$300m to clients in the form of a ‘resilience credit’ intended to help them to invest in climate resilience solutions. The firm says that the credit has the potential to help policyholders reduce total loss expectancies related to wind, flood and wildfire exposure by more than US$120bn which, in turn, can magnify their positive impact on customers, colleagues and communities.

Europe saw the highest growth in Insurtech investment in 2021, with three mega-deals (Wefox, Bought by Many and Alan) with a combined value of US$1.2bn. This is among the findings of NTT Data’s 2022 Insurtech Global Outlook Report, which shows the US still ahead of the rest of the pack in terms of volume of investment accumulated in 2021. This included five mega deals: Collective Health, Extend, BitSight, Next Insurance and Ethos, the collective value of which was US$1.2bn.

Mergers & Acquisitions

Gallagher has acquired AnotherDay, a specialist crisis and risk management consultancy that helps organisations to pre-empt and prepare for complex threats, react to crises and investigate criminality through the use of intelligence and technology. Founded in 2016 and based in the UK, AnotherDay employs around 20 risk, investigations and crisis response specialists and has supported clients across 90 countries globally.

M&A activity in the global insurance industry reached the highest growth rate for 10 years in the first half of 2022, according to Clyde & Co’s Insurance Growth Report mid-year update. The figures show 242 completed deals worldwide, up from 221 in the second half of 2021 and 197 at the same point last year.

Compre has acquired the Hospital Liability portfolio of German Insurer Basler Sachversicherungs-AG, of the Baloise Group. The portfolio transfer mainly consists of underwriting years 2004 to 2018 and as such has been in run-off for several years. The transaction, which is expected to close by year end 2022, includes the Hospital Liability portfolio of Basler with technical liabilities of around EUR200m.

Digital insurance platform provider, EIS, has announced the acquisition of Metromile’s Enterprise Business Solutions, Lemonade’s SaaS-based claims automation and fraud detection solution. The EBS platform offers an “end-to-end touchless claims experience. EIS says Insurers licensing the technology have improved their combined ratio by as much as 10%.

Tokio Marine Kiln has completed the sale of Tokio Marine Highland’s US Construction division to Intact Insurance Group USA. Led by Rick Girden and Kaileigh Bowe, Highland employs approximately 40 people and is headquartered in Naperville, Illinois, all of whom have transferred to Intact.

Quotech has raised £1m from a syndicate of angel investors, including Convex Group. Proceeds from the funding round will be used to increase staff levels and provide additional resources to support the creation of custom-built technology platforms for Underwriters and distributors in the Global Commercial and Wholesale insurance sector. As part of the investment, Convex has acquired a strategic 7.7% share in Quotech, whose clients include major risk carriers, Brokers, and MGAs active in the London and international re/insurance markets.

Movers & Shakers

Fenchurch Law has expanded its insurance disputes team in Leeds with the appointment of Catrin Wyn Williams and Chloe Vine. Wyn Williams has joined the firm as an Associate Solicitor, bringing with her experience of representing Insurers in a variety of areas including Property Damage and Professional Indemnity. Catrin was previously a solicitor at BLM, and experience of working in-house at Hiscox. Vine has joined as a Trainee Solicitor from a national insurance Broker, where she was the Group Claims Technical Manager. Chloe has experience handling all aspects of insurance claims, including taking the lead in relation to coverage disputes.

Two interns and a graduate have joined Allianz Commercial’s claims data and insight team. They have joined the claims data internship and graduate schemes, launched in 2019 and 2020 respectively, as the insurance industry faces a battle for talent. Claire Dulson and Sam Mayhew, the two claims data interns recruited externally, have embarked on a nine-week programme. They are learning to use software such as SAS Enterprise Guide, SAS Web Report Studio and MicroStrategy, while experts from the claims data and insight team teach them about data and its value in the claims journey.

In further news...Allianz Commercial has promoted Margaret Scott to Director of Claims Strategy and Customer Experience and Lee Watts to Director of Technical Claims. Both will continue leading their current teams and report to Chief Claims Officer Graham Gibson.

Sedgwick has named Ady Hall to the role of Client Director to strengthen its public sector offering in the UK. He joins a public sector team that boasts a combination of local expertise and a wealth of experience of managing hundreds and thousands of large and diverse complex losses each year.

Financial & Legal and MSL Non-Executive Director Anthony Hughes has been appointed to the roles of Chairman and Chief Executive at the Credit Hire Organisation (CHO), the trade body for the UK credit hire industry. Hughes replaces Peter Gomes, who has retired, and started work at the CHO on 1 August. Lucy Woods, the current Chairman, will step back after completing her two years as Chair, though she will still remain on the trade body’s strategic board.

Covéa Insurance has appointed Fleur Lewis to the role of Head of Application Fraud. Lewis has more than 20 years of experience in fraud and crime prevention within the insurance and financial services sectors, designing and implementing anti-fraud and financial crime frameworks across multiple products and delivery channels.

Hudgells has promoted two experienced Solicitors with track records of providing “exceptional legal support” to people who suffer catastrophic injuries to the roles of joint Managers of serious injury. Senior Litigator Samuel McFadyen has an established industry reputation of ensuring extensive rehabilitation packages for clients, securing early interim payments and eventual six and seven-figure damages settlements. Jessica Gower has more than 15 years of experience within the Personal Injury and Litigation field and specialises in cases relating to brain injury, spinal injury and those where people suffer multiple traumatic injuries.

The FCA has appointed Ruairi O’Connell, OBE, as the new Director of International. He will be responsible for helping to shape the FCA’s international strategy as well as overseeing the organisation’s international engagement including matters arising from the UK withdrawal from the EU. O’Connell joins from the Home Office where he is Director, International. O’Connell has extensive experience in both the Home Office and the Foreign Office, including as British Ambassador to Kosovo.

Former Sungard Resilience Lead, Chris Butler, has joined Databarracks as a Managing Consultant. A well known face in the resilience field, Mr Butler is a former Army officer, having held a number of leadership positions within military aviation. He has also worked within the UK high hazard energy sector, supporting leadership teams in the UK nuclear sector, and was most recently the lead Principal Consultant for resilience and security at Sungard Availability Services.

Claims Consortium Group has appointed Wayne Calderbank to the role of Director of Data. Calderbank’s recruitment, following a 25-year+ career in insurance and loss adjusting, is part of the claims services provider strategy to enhance its service offerings and provide valuable insights and analysis to Insurer, MGA, Broker and third-party administrator clients.

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