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General Insurance Newsletter Friday 11th January 2019

11 Jan 2019

Insurance News

Arthur J. Gallagher has agreed to buy 100% of Stackhouse Poland Group for an undisclosed sum. Jeremy Cary, Stackhouse Poland Executive Chairman, will leave the business when the deal goes through. The transaction is expected to close in the first quarter of 2019 and is subject to regulatory approval.

Stackhouse Poland meanwhile has bought specialist Medical Indemnity broking firm Foley Healthcare which trades as Bespoke Medical Indemnity (BMI). The purchase followed on from five buys in 2018 when Stackhouse Poland snapped up: Property Insurance Initiatives; Symmetry Private Insurance, Title and Covenant Brokers, Honour Point and Caprica Healthcare.

MoneySuperMarket co-founder and former Managing Director Richard Mason is reportedly offering a monetary incentive in his search for the real father of his ex-wife’s three children – all born in the ‘90s – whom he thought were his own until he found out in 2016 that he had been infertile all along. Mason, now in his mid-50s, was diagnosed at the time with the genetic condition cystic fibrosis. The discovery led to a legal tussle with his previous spouse, who in November 2018 agreed to pay £250,000.

Kingsbridge Group, which is backed by private equity firm Dunedin, has bought InsurTech insurance provider Dinghy for an undisclosed sum. Dinghy offers on-demand Professional Indemnity (PI) cover for Freelancers. According to a statement from Kingsbridge, Dinghy’s technology platform enables customers to flex their insurance coverage up and down with a simple swipe to reflect their needs - for example when they are between projects or on holiday, enabling them to save money but remain fully covered even when they are not working.

Inflexion Private Equity has bought a minority stake in Motor specialist Granite Underwriting via its investment fund Partnership Capital Fund. The business will continue to be run by the existing management team led by founding shareholders Alan Keating and Martin Gowing. Keating, Managing Director and Co-founder of Granite commented: “I am delighted to have found a Partner with relevant industry expertise, as well as a strong understanding of how digital enhancement can help improve our business.

Coversure Insurance Services achieved 11% growth in turnover for the year ended 31 March 2018. The uplift took the franchise’s turnover to £6.04m from £5.43m the previous year. While operating profit was flat at £1.5m, profit after tax also increased by 11% to £1.17m (2017: £1.05m).

In other news... Coversure Insurance Services has opened a new franchised office in Castle Donington. The new branch started trading at the end of December 2018 and brought the business’ total number of offices to 93. This followed the openings of new offices in Falkirk in January and Cannock in April 2018.

The Financial Ombudsman Service (FOS) has opened a consultation on increasing its income for 2019/20 to £296.2m. This represents a 27.5% rise on the £232.3m income budget for the current financial year. The FOS noted that it was forecasting a 13% increase in new complaints next year to 460,000.

Hiscox and Lloyd’s of London have both denied that their cyber security was breached following reports that a hacker, named as The Dark Overlord, had tried to sell documentation online involving the providers which related to the September 11 attacks. According to a report by the Financial Times the hacker’s posted information stating they had access to emails and non-disclosure agreements relating to 9/11 that were sent and received by Lloyd’s, Hiscox and law firm Husch Blackwell (formerly Blackwell Sanders Peper Martin).

Product innovation business CPP Group UK has teamed up with cyber security specialists DeCyber to launch a suite of online security products aimed at sports clubs and leisure businesses. The partnership will see the company offer a collection of products to help sports and leisure organisations to detect and manage risks arising from potential cyber-attacks. CPP Group stated that the solutions are provided in conjunction with Cyber insurance cover through Lloyd’s of London.

Broker Direct has launched a suite of full cycle EDI products: BDCarCare, a standard and non-standard Motor insurance product, BDVanCare a Commercial Vehicle product and BDHomeCare a Buildings and Contents Household product. The range has been developed in partnership with CPD Underwriting Solutions and underwritten by Accredited Insurance (Europe), part of Randall & Quilter Investment Holdings.

Aston Lark
is not currently up for sale, according to group CEO Peter Blanc. An article on Daily Mail’s This is Money between Christmas and New Year suggested that backers Bowmark Capital would be working on a sale in 2019. Blanc admitted that at some point there will be a need for a change in private equity owners, perhaps even within 12 months, but noted that there was a long list of “ifs and buts” and stressed: “We haven’t pressed the button on it yet.”

The Ardonagh Group confirmed on 31 December 2018 that it had completed the buyout of Swinton. The takeover was first announced in September 2018 after months of speculation had put Ardonagh at the front of the queue when Swinton was known to be for sale. At the time of the deal Ardonagh said it would pay for the Personal Lines specialist via finance and cash from monetising certain assets.

China Reinsurance announced the completion of its takeover of Chaucer Holdings from The Hanover Insurance Group on 31 December 2018. The deal, for $950m (£726m), was previously revealed in September last year after news of Chaucer being for sale first came out in March 2019. The latest step saw the 100% equity acquisition of Hanover Insurance International Holdings, go through.

Country and Commercial Insurance Brokers, part of Global Risk Partners (GRP), has bought Preston-based Key Insurance Group. It is the first deal for the agricultural specialist since it was snapped up by GRP at the start of 2018. Key Insurance will move into Country and Commercial Insurance Brokers’ offices bringing a book weighted mainly towards commercial lines. Director Clive Turner will remain with the business post completion while fellow Director Jeff Grundy will retire.

The Association of British Insurers (ABI) has calculated that the UK insurance industry paid out £55bn to customers in 2017. The trade body’s latest key facts document set out the role the UK’s insurance and long-term savings sector played in supporting consumers and companies in their financial time of need.

Car insurance price cuts are slowing down but drivers are still benefiting from falls of 8.5% in the past year, new analysis from insurance data analytics expert Consumer Intelligence shows. Its data shows average car insurance bills dropped to £757 with black box technology – so-called telematics – which rewards customers who drive more safely by making a major contribution to keeping costs under control.

Haul in One (HIO), which reports an “unprecedented increase in popularity” over the past 12-month period, is gearing up for continued acceleration in 2019. The Direct Commercial Ltd (DCL) specialist book and bonus facility for commercial vehicles allows Brokers with a DCL agency to quote and bind new business for between one and 10 commercial vehicles. This year the portal will be expanded to enable the online processing of mid-term adjustments and renewals.

UK closed life book consolidator ReAssure – which not only has a new Chief Executive coming on board in March but also recently secured further investment from a minority shareholder - has further news. Its parent Swiss Re has reportedly been approached by Rothesay Life, which Sky News sources said is serious about a possible takeover worth £3.5 billion. Selling ReAssure would mean a no-go for the initial public offering (IPO) being explored by Swiss Re for its closed book business.

DAC Beachcroft has welcomed the New Year with its very first office in France. Announcing the expansion, the insurance law firm said the Paris-based team will be led by partners Vladimir Rostan d’Ancezune and Christophe Wucher-North. Both made the switch from Parisian firm HMN & Partners.

QBE’s Underwriters in the UK now have access to risk scores for Property and Real Estate by artificial intelligence firm Cytora as part of efforts to enhance underwriting decisions across the Insurer’s commercial portfolio. The rollout comes following a successful pilot project. What the Cytora Risk Engine does is generate a comprehensive risk profile and score for each business and commercial property by combining the digital footprint of enterprises with internal data from insurance providers. Goals include reducing loss ratios and improving conversion by arming Underwriters with greater visibility into risk factors.

It’s been a year since Extratropical Cyclone Burglind, also known as Eleanor in the UK, hit the British Isles and the European continent. Now PERILS, which provides industry-wide catastrophe insurance data, has released its final insured loss estimate. Based on loss figures collected from affected insurers, the independent Zurich-based organisation pegged the insured property market loss from the January 02-03, 2018 event at €756 million. The countries impacted the most were France, Germany and Switzerland.  

The Senior Managers and Certification Regime (SM&CR) change, that came in on 9 December 2019 has topped the list of a straw poll of compliance specialists on the biggest regulatory issue for Brokers this year. It was the only topic flagged by every expert when asked for their top three. The Financial Conduct Authority (FCA) has previously described SM&CR as delivering “clear standards” for the conduct that it will expect from all financial services staff and that these standards were central to its “priority of promoting healthy cultures in firms”. Brokers will be expected to decide which staff will be certificated and map out roles and responsibilities each of which could come with consequences.

Jelf and personal lines specialist A-Plan have entered a strategic relationship which sees the majority of Jelf’s personal lines business move to the community provider. The business transfer, which does not include Jelf’s Private Client business, took place on 1 October 2018 but Phil Barton, Jelf CEO and Carl Shuker, A-Plan CEO are only discussing the move now. The project, which Barton and Shuker described as a “long term distribution agreement” has seen a number of Jelf staff and branches move over to A-Plan.

Marsh & McLennan Companies, (MMC) has announced the pricing for six different bonds to fund the takeover of Jardine Lloyd Thompson (JLT). The global Broker agreed in September to pay $5.6bn [£4.3bn] for JLT in a deal expected to complete this Spring. The negotiations behind the buy lasted just 11 days.

Aston Lark Group CEO Peter Blanc has confirmed that the Broker has employed Macquarie and Livingstone to help generate more private equity investment in the business. Blanc commented: “We’re not in a hurry. Work probably won’t start until the end of Q1 this year.”

CFC has refreshed its Cyber offering to cover Business Interruption and a variety of cybercrime activities. According to the provider the product will protect organisations with business interruption cover that is triggered by IT system failure as well as malicious cyber events. CFC noted that the updated policy also provides full supply chain Business Interruption cover, extending to events that impact the insured’s systems, the systems of their technology suppliers as well as those of non-technology suppliers where named.

Alto Insurance Group, the holding company for Cobra’s network, London Markets, underwriting and insurance Brokers businesses, has delivered a 7.1% increase in Ebitda to £1.56m for 2018. The firm reported that positive movement was also seen in operating profit – which increased by 32% to £780,234 – and profit after tax which rose 26% to £433,027. A filing at Companies House revealed that revenue was basically flat at £14.4m (2017: £14.3m).

Felling-based commercial insurance Broker Talbot Jones Risk Solutions has been awarded corporate chartered status by the Chartered Insurance Institute (CII). The family-run firm, which specialises in insurance for charities, social enterprises and professions, noted that it is the third Brokerage in the North East to become chartered. The Broker detailed that this reflected its “sustained commitment to continued professional development, high ethical standards and excellent customer focus”.

High Net Worth specialist Home and Legacy has added its Motor proposition to Home and Legacy Online. The business noted that adding the product to its e-trading platform would give Brokers access to a more dynamic question set, existing customer records and an improved layout.

Swiss Re Corporate Solutions expands its Innovative Risk Solutions offering by launching FLOW, the parametric water-level insurance. The new index-based product is designed to protect companies in Europe from the financial impact of high or low river water levels, such as lost revenue due to business interruption or increased costs due risk mitigation measures.

Three men who plotted to set fire to a loss-making supermarket in order to make a fraudulent insurance claim have been found guilty of multiple murder. Shopkeeper Aram Kurd conspired with associates Arkan Ali and Hawkar Hassan to set fire to the Zabka Supermarket in Leicester’s Hinckley Road, using 60 litres of petrol mixed with other flammable liquids they had sprayed all over the basement. They hoped to claim up to £300,000 on an over-inflated insurance policy. In the explosion and fire which followed, five people died, four of whom were in the flat above the supermarket on the evening of Sunday 25th February 2018 when the building exploded.

 


Market Movers and Shakers


John Hylands is resigning as Chairman and Director of the board of Ecclesiastical Insurance Office Plc. Effective March 19 2019, the departure will see Non-Executive Director (NED) David Henderson step up as Hylands’s successor. Henderson, former Chief Executive and Chair of Kleinwort Benson has been NED at Ecclesiastical since 2016.

Willis Towers Watson has appointed Colin Forrest as regional leader for Europe, Middle East and Africa (EMEA) for the company’s insurance consulting and technology business. Forrest succeeds Frank Schepers, who will assume a new role managing large client engagements.

Charles Taylor Adjusting (CTA) has promoted Andy Rice to Managing Director, Property, Casualty, Technical and Special risks for the UK, Europe and Singapore. He succeeds Andrew Jackson, who had held the post for 17 years. Jackson will concentrate on CTA’s Financial Lines claims, business development and loss adjusting training. Under Jackson’s tenure, the company was able to grow its market share in several specialist sectors including financial institutions, construction and engineering and high net worth claims.

Liberty Mutual Re, part of Liberty Mutual Insurance Group, has appointed Uwe Haug as Head of Underwriting Strategy and Business Development for its global financial risk’s reinsurance business. Joining from Hannover Re, Uwe takes up his new role on 1 March 2019. He will be based in Cologne, Germany and will lead the financial risks reinsurance business jointly with Susan Barber.

Tasker Insurance Group Limited (‘TIG’) is pleased to announce the appointment of Jonathan Webber as Chief Financial Officer for the Group. Jonathan brings many years of experience, most recently as Finance Director at Jelf, part of the Marsh UK Group.

Zurich announces the appointment of Graham Wood to the newly created role of Head of Regional Business Development for Accident & Health (A&H). He was recruited from Chubb where he was A&H Business Development Manager for the North & Scotland regions. Graham joined Zurich on the 2nd January 2019 and having previously worked at L&G, Cigna/Ace Insurance and Independent Insurance he will bring a wealth of A&H experience to Zurich and the new leadership role.

Ecclesiastical Insurance Office has appointed David Henderson as its new Chairman with effect from 19 March 2019. David has been a Non-Executive Director at the specialist financial services company since April 2016. He succeeds John Hylands, who is stepping down from the Board after 11 years. 


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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