General Insurance Newsletter Friday 10th March 2023

Insurance News

Aviva’s UK combined operating ratio worsened to 96.1% in 2022, from 94.6% the year before, with operating profit down 3% to £309m. The provider grew gross written premiums by 8% to £5.32bn, which was driven by double-digit growth in commercial lines and its retail channel attracting more customers. UK commercial lines GWP was up 12% to £2.93bn due to a combination of strong retention, new business growth and a hard-rating environment. Within commercial, SME grew 13% supported by mid-market and digital-traded business.(Sophie Locke-Cooper, 9/3/2023, Insurance Age, 'Aviva UK operating profit slips in 2022 as COR ticks up')

With rates continuing to rise, Adam Winslow, CEO of Aviva UK & Ireland general insurance has stressed that it can do more when helping brokers through the challenging market. As previously reported, insurers have been burdened with extra claims costs in 2022 due to weather-related events. The most notable was Direct Line’s shock profit warning as it was hit with £90m worth of claims whilst Allianz’s drop in operating profit was not helped by its own £32m winter bill and Ageas estimated the December freeze cost it €23m in the UK. (Sophie Locke-Cooper, 9/3/2023, Insurance Age, 'Aviva's Winslow insists ‘we can do more’ to return broker service to pre-2019 levels')

Recent figures from Acturis show that commercial insurers are continuing to increase the cost of cover across a range of core sectors. The latest Acturis Commercial Broking Index shows that there were consistent premium increases throughout the year, with rises each quarter of at least 4%, compared to the equivalent quarters in 2021. This is for Commercial Combined, Liability, Packages, Property Owners and Tradespeople. (Rachel Gordon, 9/3/2023, Insurance Age, 'Rocketing commercial premiums piles pressure on SMEs')

Lloyd’s has labelled its underwriting performance in 2022 as good as any in recent memory with “more than expected” improvement. The combined operating ratio fell 1.6 percentage points to 91.9% for the year. The marketplace flagged that this was despite major claims of 12.7%, including losses arising from the conflict in Russia and Ukraine, and from hurricane Ian in Florida. The expense ratio also dropped to 34.4% from 35.5% in 2021. Gross written premium rose year-on-year by over 19% to £46bn. (Emmanuel Kenning, 8/3/2023, Insurance Age, 'Lloyd’s hails underwriting performance as COR drops to 91.9% in 2022')

Brokers are being urged to ensure they are up to date with changes in motor policy wordings, as the trend is escalating for insurers to use green parts. Green (or recycled) parts are replacements for a vehicle that has come from another motor. In the past, insurers would use new parts that had come from the manufacturer. However, the issues with claims inflation is forcing ensuring to use more green parts. Supply chain blockages means it can take weeks – or even months – before a vehicle receives a fresh part from the manufacturers.(Saxon East, 8/3/2023, Insurance Age, 'Brokers urged to check motor policy wordings amid boom in green parts')

Group CEO of Hiscox, Aki Hussain, has forecast further UK commercial growth, and a return to expansion in Personal Lines at the insurer in 2023. The provider’s full year results showed an 8.5% increase in UK commercial business in 2022, but a drop in personal lines having already fallen 4.9% in 2021. (Emmanuel Kenning, 8/3/2023, Insurance Age, 'Hiscox “on the front foot” with brokers, says CEO Aki Hussain')

Gallagher has won the contract to provide clients of mortgage and insurance advisory specialist Knight Frank Finance with insurance products. The contract will see Gallagher offering insurance products, including Property, Contents, Jewellery and Watches, Wine and Fine Art cover. According to Knight Frank’s website, it previously offered Home and Contents insurance through Uinsure and [Howden-owned] R K Harrison. (Sophie Locke-Cooper, 8/3/2023, Insurance Age, 'Gallagher wins Knight Frank Finance account from Howden and Uinsure')

Hiscox has reported $778m (£657.8m) of gross written premium in the UK for 2022, as the wider group delivered its best underwriting performance since 2015. Stripping out changes in the exchange rate UK GWP was up 2.8% on a constant currency basis. However, the impact of rate movements with the pound falling against the dollar meant year-on-year the total was down 6.4% from $831.1m in 2021. (Emmanuel Kenning, 8/3/2023, Insurance Age, 'Hiscox posts UK commercial growth for 2022')

Legal & General Group Plc has had a profitable 2022. According to its earnings report, the financial services group enjoyed a 12% increase in both operating profit and profit after tax. Of the £825 million operating profit for Retail, £173 million came from UK insurance; £168 million, US insurance; and £484 million, retail retirement.(Terry Gangcuangco, 9/3/2023, Insurance Business UK, 'Legal & General Group reports higher profits')

Insurance group Beazley Plc has had to revise the 2022 total pay amounts for chief executive Adrian Cox and group Finance Director Sally Lake following a computation error. Instead of £245,127 in long-term incentives (LTI) for the year, Beazley said the correct LTI sum for Cox should be £106,663 – bringing total remuneration to £1.51 million instead of £1.64 million. For Lake, the right total is £1.16 million and not £1.26 million. (Terry Gangcuangco, 9/3/2023, Insurance Business UK, 'Oops – Beazley corrects total pay figures for top brass')

FloodFlash, the insurance technology company that uses smart sensors to offer parametric flood insurance, announced a new capacity agreement with Munich Re Syndicate. This announcement extends an existing carrier partnership that began with support of FloodFlash’s UK book of business in 2020. It comes in a period where natural catastrophe (re)insurance capacity is particularly distressed, nowhere more so than in the US. Munich Re estimate losses from the Atlantic storm season to be more around $110 billion including $65 billion of insured losses, with Hurricane Ian as the main contributor. (FloodFlash, 6/3/2023, youTalk Insurance, 'FloodFlash extend partnership with Munich Re')

Hannover Re, which is said to be the world’s third largest reinsurer, has published its earnings report for 2022. Of the group GWP, €24.2 billion came from Property & Casualty (P&C) reinsurance while Life & Health (L&H) reinsurance contributed €9 billion. In terms of operating profit, the split stood at €1.4 billion and €737 million, respectively, for P&C and L&H reinsurance. (Terry Gangcuangco, 10/3/2023, Insurance Business UK, 'Hannover Re releases full-year financials')

With the Oscars fast approaching, the entertainment industry is seeing revenue and audiences returning post-pandemic. However, the movie and live events sector has yet to fully recover from the COVID-19 crisis and is having to evolve in a new environment shaped by economic, sustainability and technology trends, according to a new report from Allianz Global Corporate and Specialty (AGCS). AGCS, a major player in the global entertainment insurance market, insured five of the 10 films nominated in the Oscars’ Best Picture category for 2023. (Ryan Smith, 10/3/2023, Insurance Business UK, 'AGCS highlights risks in the entertainment industry')

Mergers & Acquisitions

Treasurer of Open GI User Group, Mark Sollis, has said that the potential sale of the software house by its majority shareholder is not a cause for concern. Montagu is targeting a sale of Open GI in the second quarter of 2023. Sources said that the private equity house has been working with advisers on a strategic review of the business.(Sophie Locke-Cooper, 9/3/2023, Insurance Age, 'Open GI sale not a cause for concern, say users')

Movers

Nirvana Risk Partners, a division of Castel Underwriting Agencies, has completed a management buyout from the club-style managing general agent formation platform. Nirvana focuses on technology, film and television, and media liability lines. It was created in 2017 and is led by Rob Jones and Glenn Crickmar. Jones, Partner and Lead Underwriter, has more than 25 years’ insurance industry experience, joining Nirvana from Axis, having previously worked at Hiscox and Aon. Crickmar also joined from Axis in 2017 as Media, Technology and Cyber Underwriter. (Emmanuel Kenning, 9/3/2023, Insurance Age, 'Nirvana completes MBO from Castel')

Paul Moors has joined motor broking insurtech GoShorty in his first major role outside of the Arthur J Gallagher-owned Bollington business. Moors was CEO of Manchester-based broker Bollington, which sold to Gallagher in 2021. He remains at Gallagher, but has been given the approval to join firms that do not compete with the Chicago-based broking giant. The move will see Moors team up once again with Go Shorty’s Commercial Director Phil Evans. Evans was previously a Managing Director at Bollington. (Saxon East, 8/3/2023, Insurance Age, 'Paul Moors teams up again with ex-Bollington chief at insurtech')

Aspen Insurance Holdings has announced the appointment of David Altmaier to its board as a Non-Executive Director, subject to regulatory approval. Altmaier served as the Commissioner of Insurance for the state of Florida from April 2016 to December 2022. He started at Florida’s Office of Insurance Regulation in 2008 and served in a number of roles before becoming Commissioner, including Director of Property and Casualty Financial Oversight and Deputy Commissioner of Property and Casualty insurance.(Ryan Smith, 9/3/2023, Insurance Business UK, 'Aspen appoints new director')

Hiscox has revealed Chair Robert Childs’ intention to retire this year. “After 37 years at Hiscox and 50 in the industry, I am very happy that I will be passing the baton when the business is in such a good place – excellent leadership, strongly capitalised, with favourable market conditions and huge opportunities ahead,” stated Childs, who was commended for his “invaluable” contribution during his tenure.(Terry Gangcuangco, 9/3/2023, Insurance Business UK, 'Hiscox announces financials and chair's pending retirement')

Liberty Specialty Markets has promoted Rachael Lukehurst to new role of Head of Private Equity. Prior to this role, Lukehurst was Head of Revenue Transformation for LSM, a Senior Underwriter and has been at the company since 2007. She joined as Assistant Underwriter and rotated through various lines of business on the graduate training scheme. She began her insurance career in 2006 working for Reynolds Porter Chamberlain as an Assistant Loss Adjustor. (Liberty Specialty Markets, 7/3/2023, youTalk Insurance, 'Liberty Specialty Markets promotes Rachael Lukehurst to new role of Head of Private Equity')

Gallagher has appointed Paul Watson as Risk Engineering Partner to lead the strategic development and expansion of its risk engineering services. Paul joins from Willis Towers Watson where he was Associate Director of Risk Engineering and brings with him over 22 years’ experience working in insurance and the power and utilities sectors. Prior to joining Gallagher he supported global clients across industries including Conventional Power, Onshore and Offshore Renewables, Construction and Property. (Gallagher, 6/3/2023, youTalk Insurance, 'Gallagher makes senior hire to expand its risk engineering capabilities')

Inver Re – the reinsurance arm of the Ardonagh Group - has made another key hire, appointing Alun Thomas in the new role of Global Head of Property Reinsurance. Alun will be responsible for the development of a new property reinsurance proposition – with a base in Bermuda. Having been on the island for 15 years, most lately as Head of Property at MS Amlin, Alun is a well-known figure in the market and brings with him 26 years of experience from both broker and underwriting perspectives. (Ardonagh Group, 6/3/2023, youTalk Insurance, 'Reinsurance arm of Ardonagh Inver Re appoints Alun Thomas as Global Head of Property')

Michele Grosso, Co-Founder and Chief Executive of insurtech Democrance, has joined the board of Directors at Luxembourg-based non-profit association Microinsurance Network (MiN). Grosso’s credentials include time spent at the likes of MetLife, AXA, BNP Paribas, PwC, and Candesic.(Terry Gangcuangco, 10/3/2023, Insurance Business UK, 'Democrance chief joins Microinsurance Network board')

London-based specialist professional services and technology firm Davies has announced the appointment of David Leedham as group Chief Transformation Officer, as it looks for further international growth, innovation, and digital transformation. Leedham joined Davies in 2018, following the acquisition of Ember Group, where he had been CEO. Since then, he has played a key role in growing Davies’s consulting business, which offers customer experience, transformation, analytics, and training solutions to global clients.(Mika Pangilinan, 10/3/2023, Insurance Business UK, 'Davies appoints group chief transformation officer to drive global growth')