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Claims Newsletter Thursday 5th January 2023

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Claims News

The average cost of the most competitive Motor insurance deals has increased 17.4% in the past year, according to Consumer Intelligence. The latest Motor insurance price index from Consumer Intelligence shows that price rises in car insurance are outstripping inflation for the economy as a whole at 10.7%, with average premiums now costing £877. (Mark Dugdale, 23/12/2022, Claims Mag, 'Consumer Intelligence: Motor insurance premiums rise 17.4% in the past year')

​There have been thousands of accidents and breakdowns across the UK's roads as snow and ice wreaked havoc recently. According to leading rural insurer NFU Mutual, the 12th of December was the busiest day of the year for Motor insurance claims. The Westcountry has been one of the worst hit areas, with severe amounts of ice and snow making life hard for residents. Monday morning saw twice the usual volume of accident or breakdown notifications to the insurer. (Toby Codd, 13/12/2022, Gloucestershire Live, 'Freezing weather leads to 'busiest day' of year for car insurance claims')

​A man who tried to fraudulently claim £600,000 in life insurance payments after the death of his brother from Covid-19 has been jailed. Daniel Banete, of Lillington Road, Coventry, took out four different life insurance policies in his brother's name, after he died in Romania in 2020. The scam came to light after Aviva, one of the insurers Banete had taken out a policy with, arranged for a Romanian member of staff to speak to the hospital Banete's brother died at and they confirmed the correct date of death, police added.(BBC News Reporter, 7/12/2022, BBC News, 'Coventry man jailed for brother's Covid death fraud claims')

In an interview with the Financial Times, Zurich CEO, Mario Greco, has warned that Cyber attacks will become “uninsurable” as the disruption from hacks burgeon. “What will become uninsurable is going to be Cyber,” Greco said, “What if someone takes control of vital parts of our infrastructure, the consequences of that? There must be a perception that this is not just data . . . this is about civilisation. These people can severely disrupt our lives.” (Kane Wells, 28/12/2022, Reinsurance News, 'Cyber attacks set to become “uninsurable” suggests Zurich’s Greco')

BGL Insurance and Covéa have launched a new Motor insurance brand to “shake up” the market. Called nutshell, product features include uninsured driver protection, free Motor legal cover and zero administration fees. It’s a comprehensive, digital-first insurance product designed to “challenge the status quo, while significantly extending the customer reach of both businesses”. (Mark Dugdale, 5/12/2022, Claims Mag 'BGL Insurance and Covéa launch new ‘nutshell’ car insurance brand')

Allianz Commercial is revamping its approach to independent brokers in a bid to boost its support of them. Among the changes being implemented is a new model designed to provide a consistent but tailored approach to its relationships with independent brokers. The insurer will segment brokers into three groups—broker, prime and strategic partner—with each receiving a unique package of support focused on areas such as speed of underwriting, quality of service, and competitive pricing. (Mark Dugdale, 1/12/2022, Claims Mag 'Allianz Commercial to boost support for independent brokers')

Property and Casualty (P&C) insurance has encountered several obstacles on the road to the industry’s digital transformation, a recent study by J.D. Power found. According to the 2022 U.S. Claims Digital Experience Study, overall satisfaction with the digital claims process has declined for a second consecutive year as insurers struggle to manage longer cycle times via digital channels. (Kassandra Jimenez-Sanchez, 14/12/2022, Reinsurance News, 'P&C industry hits speedbumps on road to digitalisation: J.D. Power')

Threats from phishing and malicious emails increased by 60% between July and October of this year, according to analysis from Cyber protection firm, Acronis. It expects the average cost of a data breach to reach US$5 million by next year. The firm’s research team also saw social engineering attacks jump in the last four months, accounting for 3% of all attacks. Leaked or stolen credentials, which allow attackers to easily execute acyber attacks and ransomware campaigns, were the cause of almost half of all reported breaches in the first half of 2022. (CIR Reporter, 21/12/2022, CIR, 'AJG to acquire Buck')

Safe Security has launched a Cyber security MGA that uses API-based Cyber risk telemetry to underwrite cover. The company says that with SafeInside Insurance, underwriters take less than 20 minutes to assess an organisation. All insureds also receive access to the SAFE CRQM platform, which simultaneously accumulates signals using APIs from existing Cyber security products, external threat intelligence, and business context to provide visibility into possible areas of Cyber exposure, as well as the financial risk associated with those exposures. (CIR Reporter, 19/12/2022, CIR, 'Safe Security launches cyber security MGA')

New analysis shows that a flood as extensive as 2015’s Storm Desmond, Eva or Frank would result in insurance losses of up to £1.6bn in today’s terms according to PwC. Despite protection from schemes such as Flood Re, restrictions – which apply to commercial properties, homes built from 1 January 2009, and blocks of more than three residential flats – would mean that these groups may still be at risk of adverse weather conditions. (CIR Reporter, 13/12/2022, CIR, 'Severe winter flood could cost UK over £1bn in insurance losses – PwC')

The British Insurance Brokers’ Association and specialist Cyber insurer CFC have published a new guide to help insurance intermediaries and small businesses understand Cyber risks and the protection and support given by Cyber insurance. The guide aims to help brokers and businesses learn about the threat landscape that actively targets small business and also how ‘Cyber insurance as a service’ makes it straightforward to protect a business from criminal attacks. (CIR Reporter, 12/12/2022, CIR, 'New guide to help small firms protect against cyber threats')

Two in five (40%) commercial properties in the UK are currently underinsured, according to research by risk management and insurance broker Gallagher. In research amongst Business Owners and Commercial Property Claims Managers, Gallagher found that the shortfall of underinsured properties was an average of 43% against the rebuild value covered by their insurance – and where there is a gap, businesses are likely to be liable to pay the difference. (CIR Reporter, 09/12/2022, CIR, 'Over 40% of commercial properties currently underinsured – report')

TheCBI has urged the government to extend the energy bill relief scheme for significant energy users beyond the end of March 2023 and provide additional cashflow support for vulnerable businesses, especially SMEs. It says that the scheme – in operation since September – has been crucial in shielding business from rising wholesale gas and electricity costs after Russia’s invasion of Ukraine. The measure has protected firms from major financial losses, potentially saving many from collapse. (CIR Reporter, 08/12/2022, CIR, 'CBI calls for extended energy support for vulnerable businesses')

The winter storm that brought frigid arctic air south to the Gulf of Mexico will cause $5.4 billion in insured losses in 42 states, Karen Clark & Co. projected earlier this month. The storm, known as Winter Storm Elliott, brought sub-freezing temperatures across the Southeast and high winds that caused power outages that left tens of thousands of homes and businesses without electricity. Historic blizzard conditions lasted more than 36 hours in Buffalo, New York, KCC said. (Claims Journal Reporter, 29/12/2022, Claims Journal, 'KCC: Bomb Cyclone Caused $5.4B in Insured Losses')

The Financial Conduct Authority (FCA) has seen evidence that some consumers who have had their cars written off after an accident are being offered by their insurance providers a price lower than the vehicle’s fair market value. In some cases, claims staff are only increasing that offer to the fair market price when a consumer complains.  Offering a price lower than fair market value is not allowed under FCA rules. The FCA is acting against those firms that it has found breaking its rules.  (FCA, 2/12/2022, FCA, 'Insurance providers warned not to undervalue cars or other insured items when settling claims')

Mergers & Acquisitons

Arthur J Gallagher & Co has agreed to acquire the partnership interests of BCHR Holdings, LP, dba Buck, a provider of retirement, HR and employee benefits consulting and administration services with over 2,300 employees, including more than 220 actuaries. Under the agreement, Gallagher will acquire the partnership interests of BCHR Holdings, LP and its subsidiaries, for a gross consideration of US$660m, or approximately US$585m net of agreed seller funded expenses and net working capital. Gallagher expects to fund the transaction via free cash flow and short-term borrowings. The transaction is estimated to be approximately 2% accretive to adjusted diluted earnings per share over the trailing twelve month period ended 30th September 2022. (CIR Reporter, 20/12/2022, CIR, 'Average cost of data breach expected to surpass US$5m per incident in 2023')

Kroll has announced the acquisition of Appraisal and Valuation Consultants Ltd, an independent firm that specialises in the valuation of oil, gas, petrochemical, chemical, power, mining, metals processing and offshore facilities for insurance and other purposes. Antony Attwell, CEO and co-founder of AVC, will become a Managing Director and lead the new team. (CIR Reporter, 7/12/2022, CIR, 'Kroll acquires AVC')

Charles Taylor has acquired TPA and risk specialist, Matrix. Founded in 2000, Matrix is now one of the largest TPAs in Ohio. “This expansion further solidifies our strategy to deliver comprehensive, best-in-class claims solutions across the US,” said Christopher Schaffer, CEO of Charles Taylor Global TPA. “The Matrix team not only brings us local expertise and enhanced claims capabilities, but also a culture of professionalism and a reputation for remarkable customer service that is at the core of Charles Taylor’s values.”(CIR Reporter, 2/12/2022, CIR, 'Charles Taylor acquires Matrix')

Movers & Shakers

Allianz Commercial has promoted Kuldip Kang to the position of Claims Proposition Manager, where she will focus on delivering excellent broker and customer service. Kang has spent nine years at Allianz and contributed to a number of transformation programmes and strategic initiatives.(Mark Dugdale, 7/12/2022, Claims Mag, 'Allianz promotes data and change projects expert to claims proposition manager')

Fenchurch Law has expanded its team in London with three new appointments to its coverage disputes team. Michael Robin has joined the law firm as a Partner. He has more than 25 years of experience in handling complex claims across the international insurance market. Dru Corfield has joined the firm as an Associate Solicitor from Elborne Mitchell, where he was a Trainee Solicitor. Grace Williams has also joined as an Associate Solicitor, from New Zealand law firm Robertsons, where she specialised in insurance litigation. (Mark Dugdale, 20/12/2022, Claims Mag, 'Fenchurch Law bolsters insurance disputes team in London')

Jane Kielty, Chief Commercial Officer at Aon, will become Deputy Chair of the British Insurance Brokers’ Association (BIBA) on 1 January 2023. Kielty has been on the board since becoming Chair of BIBA’s Insurance Brokers’ Standards Committee in 2020 and takes over from Laura Hancock, Director of Yutree, who has been a BIBA board member since 2017 and its Deputy Chair since 2019.(Mark Dugdale, 8/12/2022, Claims Mag, 'New deputy chair at BIBA')

Toby Vallance, Partner at law firm DAC Beachcroft, has been elected as President of London FOIL and will lead the organisation through the next year. Vallance succeeds Gavin Coull from law Birketts as President of the Forum of Insurance Lawyers (FOIL) division, which focuses on the challenges facing the global insurance and reinsurance markets operating in the UK’s capital. (Mark Dugdale, 16/12/2022, Claims Mag, 'London FOIL elects Toby Vallance as president')

Zurich has named Frank Streidl as its next Head of Commercial Insurance in the UK. Streidl, who is currently UK Head of Energy, Marine and Construction, will take up the role on 1 January 2023 and replaces the retiring Rob Kuchinski. A Zurich employee since 2010, Streidl has held a number of senior roles, including Head of Energy for Europe, the Middle East and Africa, and Global Head of Upstream Energy. The insurer called his appointment “another great example of internal talent progression”.(Mark Dugdale, 6/12/2022, Claims Mag, 'Zurich appoints new head of commercial insurance')

Allianz Global Corporate & Specialty has established a dedicated in-house team to lead its ESG activities. Zurich’s Global Head of Sustainability, Gabrielle Durisch, will be joining AGCS in April 2023 as its new Global Head of ESG and Sustainability Solutions. Ralf Heintges was appointed Global Head of ESG and Sustainability Governance in September 2022 and oversees the decarbonisation of AGCS’s own insurance portfolio over the coming decades. As CUO, specialty, Dr Renate Strasser assumes responsibility for all underwriting related ESG activities at AGCS. And as Head of ESG operations since July 2022, Katja Oristanio will ensures that AGCS will effectively contribute to the ambitious Allianz Group targets for net zero operations by 2030 in its own business. (Deborah Ritchie, 19/12/2022, CIR, 'AGCS establishes dedicated ESG leadership team')

All information provided in this Market Digest has been gathered from Claims Mag, Gloucestershire Live, CIR, Reinsurance News and FCA.