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General Insurance Newsletter - Friday 10th November 2017

10 Nov 2017

Market News

The Financial Conduct Authority (FCA) has warned that principal firms aren’t undertaking sufficient due diligence on their appointed representatives, highlighting that there is a risk that customers suffer financial harm as a result. The regulator issued an alert last week stating it had found that some principals are not monitoring the type, volume and source of business being submitted by its ARs.

In further news, the Financial Conduct Authority (FCA) is launching a study into the wholesale insurance broking market this week, according to reports. The regulator first announced it would conduct a market study into the wholesale insurance market in its Business Plan for 2017/18, which was published in April this year. It stated at the time that the aim was to “ensure that the wholesale insurance market is working well and fosters innovation and competition in the interests of a diverse range of customers”.

Markerstudy has put up to 50 jobs at risk in its third-party claims call centre in Chesterfield. Gary Humphreys, Group Underwriting Director at Markerstudy, stated that the move was a result of a restructure due to falling claims numbers. He confirmed that it would not have an impact on brokers and highlighted that 27 people had been offered other jobs within the Chesterfield office.

Preservation Capital Partners has bought a “substantial stake” in managing general agent (MGA) Ascent Underwriting. The deal makes the private equity firm the majority shareholder. Ascent confirmed that the existing management team will also keep a “significant shareholding” and continue to manage the business. The cyber and specialty lines MGA detailed that the new backers will provide capital to support its growth plans. It listed that this will focus on the development of new business lines and complementary products via buying emerging risk/specialist MGAs and will come through selective team hires.

Acturis has bought ICE insurance software business from Hubio Technologies for an undisclosed sum. The ICE insurance business, covering both personal and commercial lines, has been transferred to a new company named ICE InsureTech which will operate as an integrated unit within the Acturis Group. The unit consists of a range of insurance solutions including ICE Claims, ICE Policy, ICE Billing, ICE Analytics, ICE Rating and ICE Digital.

Bollington Group has merged with Manchester-headquartered Wilsons Insurance Brokers after securing investment funds from private equity firm Inflexion. The company stated that the new structure, Bollington Wilson Group, will generate gross written premiums “in excess of £120m”. Bollington operates in areas including corporate risks, fleet and risk management as well as specialist niche sectors such as Motor Trade, Courier and Care & Charity.

Industry experts believe that the market for employment practices liability insurance (EPLI) will grow by 50% over the next two years. Last year, US companies, for example, spent about US$2.2bn on insurance policies covering the legal fallout from sexual harassment, racial discrimination and unfair-dismissal accusations. Research firm MarketStance projected that the EPLI market is expected to grow to US$2.7bn by 2019. EPLI plans have become popular over the past decade, and, as more high-profile scandals make headlines, more companies are considering purchasing the policies.

In the UK SME Insurance: Competitor Dynamics 2017 report by GlobalData it was revealed the battle for supremacy in the SME (small- and medium-sized enterprises) insurance market in the UK has apparently become tighter. The report also found that: 13.9% of SMEs hold a commercial insurance policy with AXA with Aviva close behind at 11.3%; Direct Line and Allianz post strength in commercial motor; Hiscox and Zurich are popular for liability products; Allianz, Aviva and AXA are the providers Brokers place the most SME business with.

In uncertain times, confidence among UK businesses has taken a knock – and Insurers need to adapt their approach in response, according to commercial Insurer CNA Hardy. A report released last month by the Insurer found that the current turbulent political climate, combined with emerging risks, are taking their toll on the confidence of British businesses. Just 28% of the business leaders surveyed said they were confident they could grow and prosper in the coming months, compared to 71% in the previous report.

Directors and Officers (D&O) claims have increased four-fold in the past 10 years, yet less than half of SMEs in the UK have D&O cover – making the product a key sell for brokers, according to insurer Zurich. In the course of business, Directors and Officers can be held personally liable via civil, criminal or regulatory proceedings should they fall short of their obligations, and personal assets – such as cash, property and pensions – could all be at risk. In recent years, there has been a trend towards individual accountability, with regulators turning their gaze towards company individuals; however, many at SME-level remain unaware of the extent of their liabilities.

Minority Venture Partners is talking to a number of Brokers as it looks to support its existing investments with bolt on deals. The CEO, James McCaffrey stated: “We will continue to focus on investing in high quality businesses and also help support our existing businesses with bolt- on acquisitions. “We’re in early talks with a number of Brokers and expect these to progress well.” He continued: “Regional Brokers that are predominantly commercial are ideally suited to MVP but our model is flexible.”

Higos Insurance Services has bought Mellerup’s (General Insurances) for an undisclosed sum. Mellerup’s specialises in shooting and field sports insurance and is based in Dursley, Gloucestershire. The broker was founded by Arthur Mellerup in 1974, and also specialises in farm and estate insurance.

Covéa Insurance has added cyber cover as standard for its High Net Worth customers. The Insurer detailed that the Executive Plus product now offers automatic home cyber cover up to £100,000. It listed that the cyber addition will provide cover for connected home devices, losses associated with cyber-crime and identity theft, cyber liability and cyber bullying all supported by a panel of experts from forensic accountants to cyber adjusters.

Northern Ireland Broker Willis Insurance and Risk Management (Willis IRM) has bought Kennett Insurance Brokers based in Hessle, East Yorkshire and McCausland, Light and Rankin based in Belfast. The two deals will increase the size of Willis IRM to £32m of gross written premium and over 100 staff.

Paul Muir has launched All Broker Services (ABS), a company that provides add-on products to the broker community. Muir explained that the products would cover a wide range of add-ons for both commercial and personal lines insurance. This includes: Family legal expenses; commercial legal expenses; vehicle breakdown; key protection; guaranteed hire vehicle; excess protection; landlords legal expenses and tools in transit.

Market movers and shakers

Lockton has appointed Gareth Davies as Property Senior Vice President for British overseas territory Bermuda.

Probitas 1492 continues with its growth plans, with the appointment of Marcus Bale, as Head of Strategy and Development for Retail.

Erskine Murray has appointed  Stewart Liddell as their new ‘Head of Business Development’ to meet the demands of the company’s ambitious acquisition and expansion plans.

Vizion Insurance Brokers Limited, the firm set up to attract talented, entrepreneurial, insurance professionals looking to run their own broking business has announced the addition of Russell Boneham as a Partner. Vizion is also strengthening its commercial lines back office with the appointment of Gemma Godwin.

Chubb has announced the appointment of Barry Beard as Head of Global Services and Complex Multinational UK&I.

Legal Protection Group has announced that Oli Foster has been appointed as Senior BTE Underwriter and will be operating from their head office in Bristol.

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

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