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General Insurance Newsletter Friday 10th January 2020

10 Jan 2020

Allianz has completed its planned £1.07 billion acquisition of the UK general insurance arm of Dorset-based Liverpool Victoria Friendly Society (LV=). LV= had already sold a 49% stake of its insurance business to Allianz for £500 million in 2017. The two firms then ran the business as a joint venture for two years before announcing Allianz’s plans to acquire 100% of the business in May 2019.

Global Risk Partners (GRP) has announced an “impressive growth trajectory” in 2019, reporting income growth of 25% to £139 million on the back of 18 acquisitions. The firm also reported earnings before interest, tax, depreciation and amortization (EBITDA) of £50.0 million during the year – a 43% increase over 2018 figures. Mike Bruce, Group Managing Director of GRP, said the “outstanding results have been fuelled by a combination of organic and acquisitive growth, plus benefits accruing from GRP’s major focus on integration.” GRP spent £68.21m across 10 acquisitions in the year ended 31 March 2019, financial results published on Companies House have revealed. The group spent £29.80m acquiring Trimulgherry Group, owned by GRP Chairman Peter Cullum, in February 2019. The second most expensive deal was £11.30m for a majority stake in DCJ Group in July 2018.

Sustainability has proven to be a keyword in the insurance sector in 2019 and it seems there is no change on the horizon as 2020 approaches. QBE’s Group Executive, corporate affairs and sustainability, Viv Bower has spoken about the need for sustainable operations and the value of embracing a sustainable approach in insurance. Discussing the role of Insurers when it comes to sustainability, Bower outlined the essential societal responsibility they carry and, as Insurers, she said, “we have an acute understanding of risks and an opportunity to influence action to mitigate them.”.

More and more Insurers are embracing new technologies to offer improved services to their customers. London-based insurtech, Wrisk, which helps brands create and operate customised insurance products which can quickly be launched at scale, recently announced that RAC had become a strategic investor and is trialling a mileage-based Car insurance product with the company.

Ireland’s foreign minister urged Irish citizens to secure comprehensive Travel insurance before leaving the country, after the Department of Foreign Affairs and Trade (DFA) revealed over 1,700 citizens requested consular assistance abroad in 2019. According to Coveney, the figures highlighted the importance of comprehensive Travel insurance.

The start of the new year saw the end of Equitable Life after a deal to buy the remaining business of the 250-year-old Insurer was completed on New Year’s Eve. The firm, once the world’s oldest mutual Insurer, came close to collapse in 2000 after it was unable to make insurance and pension pay-outs to nearly a million policyholders. While the firm stopped accepting new customers in 2000, a rump business continued to service older policies until they ended.

While whiplash reform measures are scheduled to take effect in April, a group of lawyers have said that the introduction of a key element of the reforms should be delayed. The reform measures, approved by Parliament in 2018, aim to reduce pay-outs for exaggerated and fraudulent claims from so-called “whiplash” injuries – minor soft-tissue injuries from motor accidents. At the heart of the reforms is an online claims system that allows policyholders to file claims quickly.

Prices for reinsurance contract renewals have not significantly increased despite rising costs from a broad range of natural disasters over the last few years, according to a report. The report, which cited data from reinsurance Broker Willis Re, revealed that the increasing occurrence of devastating storms and wildfires, as well as courts awarding more “generous” pay-outs for a range of claims from medical malpractice to auto accidents, have not led to substantial increases during the January 01 renewal season.

It has come to that time again when consideration turns both to the year that has passed and to the 12 months stretching ahead. Looking over the last year, Global Pricing and Underwriting Leader at Willis Towers Watson, Dave Ovenden, noted an unusual rate of market adoption. The market is very dynamic when it comes to pricing, he outlined - it moves quickly depending on external market factors and the ambitions of individual players. In 2019, he said, several Latin American markets moved almost overnight from being relatively sleepy to quite dynamic.

Last year saw the country’s biggest Insurer, Prudential Plc, spin-off M&G, its UK and European savings and investments business – and experts are predicting that the demerger trend may continue this year. The last few years have seen significant instances of Insurers offloading businesses to allow them to focus on core operations. Some of the more noteworthy examples include Esure’s 2016 demerger from price comparison site GoCompare and Standard Life selling its insurance business to Phoenix Group in 2018.

A recreational drone pilot has been fined US$20,000 after he lost control of his drone while flying it illegally near McCarran International Airport in Las Vegas. In June of 2018, pilot Rueben Burciaga lost control of his DJI Phantom 3 drone while operating it in Class B airspace – a no-go zone surrounding the nation’s busiest airports. The drone then drifted more than two miles towards the international airport before landing next to an active runway. The Federal Aviation Administration (FAA) slapped Burciaga with a hefty US$20,000 fine in November 2019 for committing “a litany of serious violations” and flying his drone “carelessly and recklessly”.

Hiscox London Market is entering the new decade with a step into the future, by partnering with insurtech Concirrus to move towards analytics-based underwriting. Under the multi-year deal announced by Concirrus, Hiscox will utilise behaviour-based data analytics platform Quest Marine Hull – enabling the insurance company not only to analyse existing portfolios in greater detail but also assess vessels within a prospective account and calculate an expected loss based on factors like port risk and time at sea.

Brunel Group’s Brunel Insurance Brokers Ltd has expanded into Scotland. The move will see the commercial arm join its Professional Indemnity sister firm Brunel Professions in the group’s office in Scottish city Perth. The expansion signifies the parent company’s first step towards offering a complete commercial insurance package from the said site.

The Chartered Insurance Institute (CII) does not seem entirely sold on the data reform plans put forward recently by the Financial Conduct Authority (FCA) and the Bank of England (BoE). “It is vital that the regulator has the right data to inform rules but data alone isn’t enough to prevent future consumer detriment,” asserted CII’s Managing Director of engagement Keith Richards following announcements outlining proposals for data reforms across the UK financial sector.

Hyperion X, the data and technology division of Hyperion Insurance Group (Hyperion), has just celebrated its first anniversary. Launched as Hyperion’s fourth business on January 01, 2019, the unit is focused on developing key areas of data, analytics and digital platform delivery. It sits alongside the global insurance giant’s existing broking businesses, Howden Broking Group, RKH Specialty and MGA DUAL.

The holidays may be over but Ecclesiastical is still spreading Christmas cheer, announcing the beneficiaries of its ‘12 days of giving’ campaign.  According to the specialist Insurer, which is owned by registered charity Allchurches Trust, the campaign saw more than 800 Brokers participate and over 5,000 charitable causes in the UK receive votes. Out of those nominated, 120 charities were randomly selected as winners. Each winning charity gets £1,000, with the full list of recipients available on Ecclesiastical’s website.

Finch Group has revealed its tenth acquisition in the last three years with a move for Broker Network member Shene (Insurance) Ltd. The latter, based near Richmond, was established back in 1959 and boasts a mixed portfolio of commercial and personal lines with over £2 million GWP. It has four members of staff and is run by Philip and Deborah Alexander – all of the staff are set to remain with the business, while its existing premises will also be retained.

London-headquartered broking giant Aon has wrapped up its acquisition of SME insurance platform CoverWallet. First announced in November 2019, the swoop will allow Aon not only to expand its position in the fast-growing commercial insurance market for smaller businesses but also leverage CoverWallet’s technology and data & analytics capabilities.

BHIB has launched a new insurance Broker, Create Insurance, which provides flexible insurance for freelancers in the creative industries. The new Broker is led by BHIB Partnerships Director Ajay Mistry and the general insurance policies are underwritten by Hiscox.

St Neots-based Lifesure, which specialises in the personal lines leisure and caravan space, has set up a commercial-focused Broker. Barnes Commercial Insurance Broker has been developed as a separate entity with its own Financial Conduct Authority registration number.

Danish provider Gefion has met its requirement to have liquid assets of at least €5m (£4.2m) by the end of December 2019. A communication sent to Gefion distributors showed that the provider has complied with the order following further investment from its shareholders.

Software house SSP and provider Policyfast have announced a partnership to provide Brokers with access to food and hospitality insurances. Policyfast’s products will now be available through SSP’s commercial e-trading platform.

The Financial Conduct Authority (FCA) has refreshed its data strategy to respond to how firms are using data and also develop its own efficiency. The strategy, first developed in 2013, outlines the organisation’s focus on the use of advanced analytics and automation techniques to deepen its understanding of how markets function. The FCA also hopes to efficiently predict, monitor and respond to firm and market issues.

In other news...The Financial Conduct Authority (FCA) has warned Managers at insurance firms that they may fail to pass the Senior Managers and Certification Regime (SM&CR) if they do not address non-financial misconduct.

Integro Entertainment & Sport has been rebranded to Tysers as of January 2020. This follows Integro Insurance Brokers’ deal to buy Lloyd’s Broker Tysers’ parent company Hawkes Bay in March 2018.

In further news...Tysers has completed its acquisition of Lloyd’s Broker RFIB. The deal covered the purchase of Risk Transfer Group, the principal parent company of RFIB. Tysers stated that integration plans are already underway and that it aims to combine operations with RFIB within the year.

Specialist Cyber provider, CFC, had revealed its Cyber excess product which it said has been designed to give small and medium sized businesses access to up to £10m of excess Cyber capacity. The product is offered globally and built for organisations with up to £1bn in revenue. The revenue limit has been set fairly high to account for company growth over time.

Bollington Insurance has purchased North-West based insurance Broker Ashgrove Insurance Services. Ashgrove was founded in 1981 and is based in Ashton-under-Lyne outside of Manchester. It specialises in insurance for SMEs throughout the region. The Broker has 15 staff and just over £3m of gross written premium (GWP) and according to Bollington all staff will remain with the business.

Lockyers Insurance has bought Newcastle-based Broker and Broker Network member, Bernard Saxon General Insurance Services (BSIS). This is Lockyers’ first acquisition since becoming an Ethos Broking partner in September 2018.

Optio Group has bought London-based Newbridge Risk Partners from Castel Underwriting Agencies for an undisclosed sum. Newbridge launched on Castel’s MGA formation platform in 2015 and specialises in writing Political Violence and Terrorism cover in emerging markets.

According to experts at CyberCube, the Cyber analytics firm focused on the global insurance industry, businesses need to prepare for ransomware attacks so widespread they could stifle economic growth in the short term.

According the Allianz's whitepaper, following a relatively benign few years, the Professional Indemnity (PI) market is now undergoing a tough period, particularly for construction-related business. Challenging circumstances within a changing market have seen a number of Insurers reduce their capacity or withdraw altogether, including several Lloyd’s syndicates. With no sign of the market stabilising anytime soon, Insurers and Brokers are searching for ways to weather the storm whilst still providing clients with the cover they need.

ARMA, the Association of Residential Managing Agents, has announced a new insurance partnership with Insurety Limited, effective from 9th January 2020. Through this exciting partnership, Insurety is offering a unique range of insurance products specially designed for ARMA Members.

 

Jelf Clark Thomson alumnus James Packer, who brings 11 years of insurance industry experience, has been appointed to lead the new Brunel Insurance Brokers operations.

Pedro Carvalho, who brings significant experience in senior management roles within the insurance industry, has been recruited as Chief Executive of Generali Group’s insurance entities in Portugal. The appointment means Carvalho will be taking the helm at Generali Vida, Generali Seguros and Seguradoras Unidas. He will report to the insurance giant’s CEO International, Jaime Anchústegui.

Specialty Lines Managing General Agent Ensurance has welcomed 2020 with something new – its first office beyond London. Aimed at developing the market under the leadership of Regional Development Manager Ian Fox who came onboard last year, the MGA’s Spinningfields-based site in Manchester comes to life with the arrival of Senior Construction Underwriter Clark Gardiner and Construction Underwriter Nick Lappin.

Global Loss Adjuster McLarens has snapped up a trio of Construction & Engineering (C&E) hires from Advanta. Among them is former Construction and Surveying Director Mark Simmons, who will be overseeing McLarens’ C&E portfolio across 21 offices in the UK and Ireland. Based in London, Simmons brings more than three decades of experience and succeeds Peter Scott who has been appointed to the new role of C&E technical lead. Also joining McLarens in London are dedicated C&E specialists Blue Newton and Sean Gregory. The latter has over 20 years of loss adjusting experience to his name, while Newton was a Geotechnical Consulting Engineer before he moved into adjusting within the C&E sector.

Amanda Blanc has joined the board of London-based RightIndem as Non-Executive Chair. Blanc’s role within the digital claims provider will be to help the company deliver its ambition of fundamentally changing the way customers experience insurance at the point of claim.

HW International (HWI) has announced the addition of Martin Kelsh as Board Director and Head of the International Non-Marine team of the London operation H.W.Wood Limited.

Coverys has announced the formal launch of Coverys European Holdings Limited (CEH), an agency platform and network that will invest in and collaborate with managing general agencies in continental Europe and the UK, specialising in the Professional lines Sector. CEH will be led by a management team headed by Steven Spano as Chief Executive Officer and Doug Robare as Chief Underwriting Officer and supported by the resources available within Coverys UK.

New Dawn Risk has appointed Nicky Stokes as Head of Management Liability and Financial Institutions. Stokes joins New Dawn from Liberty Specialty Markets in Dubai where she was AVP, Professional Indemnity, with additional responsibility for the D&O, Bankers Blanket Bond and Cyber portfolio for local and international clients throughout the Middle East and Africa.

Esure announced the appointment of Peter Bole as Chief Financial Officer, subject to regulatory approval. Bole will succeed interim Chief Financial Officer Steve Long in the role in Q1 2020 following a brief transition period.

Specialist Travel insurance provider AllClear has named Cameron Jack as Group CFO.

Vantage Holdings CEO and Founder, John Collyear, has left the business. It is understood that he has not retained any financial interest in the organisation nor will he remain in an advisory capacity.

Aston Lark has announced the creation of two executive board positions in Ireland. Robert Kennedy will join as CEO Ireland and Mark Nolan will join as CFO Ireland in March 2020, subject to regulatory approval.

Allianz Holdings has completed its deals to buy the remaining 51% of LV General Insurance Group and 100% of the general insurance division of Legal & General (L&G). As a result, Mike Crane, current Managing Director of LV GIG Broker, has been appointed as Chief Executive Officer of L&G GI.

 

 

 

 

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

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