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General Insurance Newsletter Friday 11th September 2020

11 Sep 2020

The Chartered Institute for Securities & Investment and Chartered Insurance Institute have both reviewed their property footprints following the pandemic in 2020 and taken a decision for the CII to sub-let part of the CISI’s existing office space at the prime location of 20 Fenchurch Street (known as the ‘walkie talkie’) from early 2021.

The Motor Insurers’ Bureau (MIB) has entered consultation with employees as part of its latest phase of transformation, which could see it reduce its staff numbers by 10%. It detailed that the proposals, which are expected to be complete by the end of October, are part of ongoing work to reshape MIB into a “progressive and innovative” organisation.

Compliance experts have highlighted the importance for Brokers to make sure they have the right procedures in place after the Financial Conduct Authority (FCA) identified a number of “significant risks of potential harm” in the sector. The regulator called on Brokers to address their strategies and improve their governance in a letter to firms written by Head of Retail GI, Roma Pearson.

Allianz’s Liphook office is set for closure and all staff could move to the Insurer’s Guildford headquarters which is a 35 minute train journey away. The Insurer confirmed that it had announced the intention to close the base, subject to consultation, where its Engineering, Construction and Power business is based.

Stoneways Marine has launched a new yacht and motorboat insurance policy. The Provider, which specialises in Yacht and Marine trade, was established in July 2020. It stated that the new offering includes a plain language all risks wording and numerous additional benefits, with cover now available to owners of yachts, motorboats and all types of pleasure crafts in the UK.

Fidelity Payment has joined the British Insurance Brokers’ Association (Biba) as an associate member. The Broker trade body stated that Fidelity Payment has been committed to making card payments easier, faster, safer and cheaper since its launch in 2004. According to Biba, the Fidelity Global network will enable Brokers and their customers to collect Visa, Mastercard and Amex payments through familiar insurance Broker management systems like Acturis, Open GI, Applied, Schemeserve and Transactor.

The organisers behind an Insurance Museum Initiative (IM IN) have announced the inaugural IM IN fundraising campaign. The fundraising target is for a minimum of £3m per year, to enable the delivery of the IM, sustain operations, fulfil activities and to achieve the IM’s long-term objectives for a permanent world-class and free-to-enter visitor venue in the City of London.

Carrot Insurance has urged MPs to remove insurance premium tax (IPT) for young drivers using telematics-based insurance policies. The Broker explained it had submitted evidence to the House of Commons Transport Committee, which is holding an inquiry into young drivers and how to reduce accident frequency in this age group.

Legal expenses provider Arag has relaunched its Family Legal Solutions product to include a ‘dark web’ monitoring and ID theft restoration service. The Insurer stated that each of the covers, which include disputes with domestic employees, school admission and planning application appeals and crisis communications assistance, can be selected individually to create a policy to meet the needs of a particular scheme.

Liability exposures for companies around the world are increasing, according to a new report from Allianz Global Corporate & Specialty (AGCS). Rising litigation, collective redress and large court verdicts, frequent recalls in the automotive and food sectors, civil unrest, environmental concerns and other factors will likely impact businesses and Insurers, according to the report, which highlighted five trends for the sector.

Total capital dedicated to the global Reinsurance industry was $587 billion as of June 30, reflecting a 3% decline since year-end 2019, according to Willis Re’s latest Reinsurance Market Report. The half-year figure masks a tumble of nearly 30% up to late March following the impact of the COVID-19 pandemic on investment markets. That deficit was largely restored in subsequent months, Willis Re said.

Chubb has announced the launch of Chubb Studio, a global platform that aims to simplify and streamline the distribution of the company’s insurance products through its partners’ digital channels. Chubb Studio allows Chubb’s partners in retail, e-commerce, banking, fintech, airline, telecommunications and other industries to add digital insurance options to their own product and service offerings.

The departing Chief Executive Officer of insurance giant QBE is set to lose around AU$10 million (around $7.2 million), after a complaint by a female employee triggered his shock exit last week. The Insurer revealed the financial arrangements of former CEO Pat Regan in a statement to the Australian Securities Exchange (ASX) on Wednesday, which includes “payment of AU$310,000, in lieu of a reduced notice period, plus his statutory leave entitlements.”

After announcing that Capsicum Re will shortly rebrand under the Gallagher banner, now another firm is set to adopt the name of the brokerage giant. That firm is insurance provider Insure4Retirement, a household specialist founded in 2004 that was acquired by Gallagher back in 2012. The company, which offers Home, Motor and Travel insurance, will expand to offering its products to all ages rather than just the over 50s once the rebrand is complete.

Anna Sweeney, Executive Director of the insurance supervision division at the Bank of England, delivered a speech at Moody’s Insurance Summit webinar on ‘The resilience of Insurers in a changing climate’. During the event, Sweeney noted that insurance companies will play a critical role through their support of climate-related risks and their provision of critical long-term finance, which supports economic growth.

Willis Towers Watson has announced a partnership with the University of Oxford to conduct research on the cost of equity arising from severe Cyber breaches. The Willis Research Network will partner with the university to research three key areas of cybersecurity risk

According to a report by Co-Op Insurance, 80% of young motorists have experienced another vehicle driving too close to them, 72% have been subject to a driver overtaking them when it wasn’t safe to do so, while 43% have been on the receiving end of rude hand gestures. Other common, negative experiences include 27% being shouted at by another driver and 21% feeling pressured to pull out at a junction when it wasn’t safe. The Insurer is now hoping to provide a solution to the issue with the launch of T-plate – a concept backed by road safety charity Brake and RED driving school. Similar to an “L” or “P” plate it indicates to other road users that a blackbox is fitted in the car – so the driver will be driving safely, to the speed limit and within line of the law, something that every driver should be doing anyway. When asked, 60% of the Insurer’s young drivers said the T-plate would help them feel less pressured.

Though it is known for snapping up legacy books, Randall & Quilter has now signed a new deal that will see it reinsure Casualty reserves. It has reached an agreement with Renaissance Re Syndicate Management Limited for the reserves of Lloyd’s Syndicate 1458, in relation to the 2009-2017 years of account. The reinsurance will be provided as a loss portfolio transfer, attaching at 70% of held reserves, with an additional limit designed for adverse development cover.

BIBA, which has long dedicated itself to helping customer access insurance through Brokers, has played a vital role in providing advice and support to the sector during this critical time and in driving new conversations regarding accessibility to insurance services. Executive Director of BIBA, Graeme Trudgill, noted that the work the association does raising the profile of Brokers throughout Britain and showcasing the work they do in supporting their clients is more important than ever during the crisis. At the moment, the reputation of the insurance sector is being challenged, he said and there’s a lot of work to be done to rebuild its’ image in the eyes of the general public. Where Brokers and Insurers and customers can find a win-win scenario is through the issue of access. Being granted access to insurance solutions benefits the customer enormously and heightens the reputation of the Insurer, while also emphasising the role of the broking community in facilitating access to those who believe they cannot obtain a specific cover due to a disability or medical condition.

According to a new report, Thomas Cook is poised to be reincarnated as an online Travel Agent as early as this month. The timing, however, relies on the receipt of required regulatory approvals, among other things.

The fight against insurance fraud is often an “after the event” issue, with Insurers and Lawyers battling it out with possible fraudsters in court. However, what if we could get to the fraudsters as soon as a claim is made? That is what global insurance law firm Kennedys is hoping will be achieved after it reached the culmination of a two-year collaboration with the University of Manchester. Together they have implemented a next generation fraud prevention software that supports insurance claims handling through data analytics, machine learning, intelligent modelling methodologies and semantic technologies.

For many insurance companies the approaching date of implementation of the new IFRS 17 accounting standard is a matter of ever-growing concern and Mark Spencer, Accounting Advisory Leader at the accountancy and advisory business, BDO, spoke on how insurance companies can prepare themselves for this change. Spencer noted that the fundamental aim of IFRS 17 is to standardise global insurance accounting and that this is a natural progression of accounting, as the insurance industry has had IFRS 4 for a number of years, which has operated as a placeholder for this updated standard. Mark, who leads the financial services accounting advisory team at BDO, specialises in advising financial institutions on a broad range of accounting change programmes and has seen a definite uptick in questions from Insurers surrounding this subject.

MAPFRE has revealed that its management teams based in three of its principal global markets have undergone a “renewal". The company’s international, Spain, Brazil and North America management teams each have new appointments. “The renewal of the management team allows us to capitalize on the extraordinary internal talent we have at our disposal within the company,” said MAPFRE Chairman and CEO Antonio Huertas. “All the appointed Executives bring great experience and deep knowledge of our group with them to their new positions.”.

Saga has confirmed its intention to raise £150m in equity capital, including a £100m investment from its former owner and CEO, Sir Roger De Haan. The provider confirmed that De Haan’s investment would be made in line with Saga’s announcement on 1 September. The update came as Saga revealed its financial results for the first half of 2020, reporting a pre-tax loss of £55.5m, a 205.5% fall from the pre-tax profit it achieved in H1 2019.

The Motor Insurers’ Bureau (MIB) has entered consultation with employees as part of its latest phase of transformation, which could see it reduce its staff numbers by 10%. It detailed that the proposals, which are expected to be complete by the end of October, are part of ongoing work to reshape MIB into a “progressive and innovative” organisation. In 2018, the industry invested £30m in MIB to create a modern, fit-for-purpose organisation.

The industry will find out the legal position on its actions around Covid-19 Business Interruption claims next week, the Financial Conduct Authority has revealed. A bulletin from the watchdog, which brought the complaint on behalf of policyholders this summer, showed that the court will hand down its decision on 15 September.

Insurance giant Zurich is giving its 4,500-strong UK workforce more flexibility to decide where they can work. According to the Insurer, this new policy is based on four “personas”: the office-based employee, the contractual homeworker, the “on the road” employee, and the “fully flexible” employee. Since Zurich operates from six major sites across the UK, employees can choose which persona best fits “the day they have ahead of them” and work at any of these sites, or just work from home.

Admiral Group Plc’s Llansamlet premises were closed earlier this week after the site had to be deep-cleaned following an employee’s COVID-19 diagnosis.

It’s fair to say that the coronavirus pandemic has had a massive impact on the reinsurance industry – but just how bad will things get? According to Reinsurance giant Swiss Re, it appears that prices are only going to increase. The firm has pointed to further market hardening, but outlined a positive outlook for renewals. It expects price increases across all segments to continue, pushed on by low interest rates, growing risks and large claims.

Theatres and live music venues throughout Britain have said that, due to the COVID-19 pandemic, they can no longer obtain commercial insurance and will only be able to reopen if the government provides a financial backstop. Only a small number of theatres and concert halls have opened to socially distanced audiences and many are noting that access to insurance is a barrier to their reopening.

“It is only a matter of time before prospective claimants begin to give serious consideration to negligence claims against their insurance brokers, either in addition to or as an alternative to any claims they may have against their Insurers.” That was the warning, in effect, issued by Stewarts Law LLP to insurance Brokers in relation to what is said to be a potential ‘second wave’ of Business Interruption insurance litigation. In a joint contributed piece published by Lexology, Stewarts Partner Clive Zietman and Senior Associate Alex Lerner examined the possibility of brokers being held accountable for their clients’ coverage woes.

The COVID-19 pandemic may have taken its toll on most businesses, but one is standing up strong. Warrington-based Advantage Home Construction Insurance (AHCI) has enjoyed two record months for sales. The structural warranty specialist is now looking at its next phase of growth – adding eight new members of staff and revealing plans to open two new offices. Those offices will be based in Horsham and Birmingham.

If you needed proof of the pelting that the insurance industry has taken at the hands of the coronavirus, then look no further than Lloyd’s of London. It is predicting payouts of up to £5 billion after reporting a £400 million loss in the first half of the year, compared to a £2.3 billion profit in the same period in 2019.

Home & Legacy Worldwide Multi-trip Travel Insurance has been updated to include cover for epidemic and pandemic diseases, such as Covid-19. Their new cover enhancements are designed to reflect the world we live in now and to help your customers travel with that extra peace of mind. Cover is now included for cancellation or curtailment of a trip due to epidemic or pandemic diseases including Covid-19.

London Work Travel Convene Coalition to support broader efforts to move businesses and society forward during recovery phase of COVID-19 pandemic. Coalition will support the government’s efforts to get society and the economy reopened in line with public health guidelines. Aon announced the formation of a coalition of leading London-based businesses that will develop key recommendations and guidelines on how companies can work, travel and convene in future, as society moves towards the recovery phase of the COVID-19 pandemic.

The industry will find out the legal position on its actions around Covid-19 Business Interruption claims next week, the Financial Conduct Authority has revealed. A bulletin from the watchdog, which brought the complaint on behalf of policyholders this summer, showed that the court will hand down its decision on 15 September. The case was heard in court in July with the regulator acting against Arch, Argenta, Ecclesiastical, Hiscox, MS Amlin, QBE, RSA and Zurich. However, at least 16 Insurers were named as using at least one of the wordings examined by the case.

Lloyd’s has stated that it expects to pay out up to £5bn in claims related to Covid-19 on a gross basis. The market has also published its 2020 half year results, detailing that its Covid-19 claims after reinsurance recoveries totalled £2.4bn in the first six months of the year.

The COVID-19 pandemic lawsuit arena just got a new entrant with connections to Hollywood A-lister Ben Affleck. Hoosegow Productions – the production company behind the film Hypnotic, starring Ben Affleck – has launched a suit against Chubb following pandemic-related delays. The complaint argues that Chubb did not extend the full policy when filming was delayed because of the pandemic and, as a result, Hoosegow Productions is suing Chubb for breach of contract and fraud, along with other claims. It is also asking a California federal judge for a declaration that the production company is entitled to have the policy’s expiration date extended “in accord with Chubb National’s custom and practice and Chubb National’s express and implied representations.”.

Group HR Director of Personal Group, Rebekah Tapping, believes that the way companies have treated their staff during the pandemic will be remembered and have a long-term impact. She noted that in her experience at Personal Group, the fact that so many of the business’s employees have stayed with the firm is linked to the commitment shown to looking after the person as a whole - this includes their physical, mental and social wellbeing.

Etihad Airways, the Abu Dhabi-based airline which services the UK among other regions, has announced that it will provide COVID-19 insurance to its passengers.

The recovery from COVID-19 represents a long and winding road – but it’s not one that needs to be travelled alone, according to the Society of Insurance Broking (SIB). In outlining its third-year plans during the month in which it celebrates its second birthday, the society has pointed out that it has already produced guidance on new customer vulnerabilities emerging from the pandemic and ways to recognise the rapidly expanding number of scams and fraud linked to the coronavirus. Now and over the next 12 months, it is looking to focus on offering guidance to assist members in managing the most difficult conversations around the pandemic and to emphasise the value that professional advice can bring.

After the Bermuda-based Reinsurer Watford Holdings was advised by one of its investors to sell itself back in May, the firm has now received a US$500-million offer from a consortium led by Arch Capital Group. The acquisition bid comes at the one-year mark of Watford Holdings going public, during which time its shares have lost around a third of their value, leading to questions around whether the Reinsurer could garner enough investment returns to cover all of its expenses as it paid out on insurance policies.

Trade credit and surety brokerage Xenia Broking Group is set to become a separate business from its parent Nexus Group. In a release, the specialty Managing General Agent said the move is part of its “previously trailed strategy” to establish Xenia as a standalone operation. To facilitate the demerger, Nexus has made a couple of management team changes.

Talbot Underwriting Ltd, which is part of American International Group (AIG), will be welcoming 2021 with new Chief Executive and board member Chris Rash.

The first fully digital and algorithmically-driven Lloyd’s of London syndicate, Ki, now has a CEO. Brit Ltd (Brit), which launched Ki in collaboration with Google Cloud, has appointed Mark Allan as its Chief Executive Officer. Allan who has led the development of the syndicate over the last 18 months alongside Brit CEO Matthew Wilson, will now take on the leadership role to build the business and realise Ki’s ambitious strategy.

With COVID-19 likely to lead to a “major period of transformation and consolidation”, according to Partner Rupert Rickard, his firm – Stephens Rickard Ltd – has made a change of its own by swooping on a new Director. The international specialist reinsurance Executive search firm has brought in David Cooper as Director with immediate effect. Cooper holds experience across the life and non-life markets and will be based in the London office.

With specialist boutique Broker McGill and Partners enjoying significant growth, it has decided to bolster its treaty reinsurance team even further. Over the last six months alone, the firm has added 22 specialists to an already 12-strong team – it’s a strategy that it believes is helping it meet growing demand. Now, Angus Milgate, previously Aon’s Reinsurance division Head in the UK and Ireland, with more than 33 years of experience under his belt, is heading to the company this month to complement the team led by Paul Summers, who joined as Head of Global Facultative Reinsurance back in April.

There is a new Partner in the specialty division of brokerage giant Gallagher. Tom Ellis has made the switch to the firm from Tysers and will now cover both hostile environment coverage and sports accident and health programmes, including majoring in motorsports.

The movement at the top of Zurich Insurance Group continues with a couple of notable moves. Firstly, Sierra Signorelli, takes the role of Group Chief Underwriting Officer (CUO), reporting to CEO of commercial insurance James Shea. Meanwhile, Group Claims, led by Ian Thompson, is set to move to commercial insurance.

There is a new face for Broker Partners to reach out to at insurance holding company Qlaims, the name behind MGA Qlaims Insurance and tech-focused QlaimsTech. Taking the role of Chief Commercial Officer is Liz Latter, who will be responsible for the company’s business partnerships.

Hamilton Insurance Group’s reinsurance and insurance platform in Bermuda will soon be led by newly appointed Hamilton Re Chief Executive Megan Thomas, whose anticipated start date will be in October pending requisite immigration and regulatory approvals.

Two of the businesses of Marsh & McLennan, Guy Carpenter and Marsh, announced the appointment of Dean Klisura as President of Guy Carpenter, effective October 01, 2020. Klisura, who will report to Peter Hearn, CEO of Guy Carpenter, joins the business following a 27-year career at Marsh which has seen him take on a range of senior roles, including most recently as President of Global Placement and Advisory.

 

 

 

 

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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