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General Insurance Newsletter Friday 12th April 2019

12 Apr 2019

Insurance News

Aston Lark has bought Jobson James Insurance Brokers and its specialist Employee Benefits practice Jobson James Consulting for an undisclosed sum. Established in 2010, chartered Broker Jobson James has four offices in Birmingham, Dudley, Leominster and Kidderminster. Jobson James Director Martin James will remain with the business along with all of the 43 staff.

Esure has posted a pre-tax loss of £15.4m in 2018, down from a pre-tax profit of £98.6m in 2017. In addition, its combined operating ratio (COR) deteriorated to 111.8% (2017: 96.7%). However, the business reported an increase in gross written premiums (GWP) to £862.2m from £820.2m in the preceding year.

Ceta Insurance has bought beach hut Insurer, Love Your Hut for an undisclosed sum. Niche Insurance provider, Love Your Hut was originally owned by Precision Underwriting (UK). Tim Smyth CEO of Precision commented: “Love Your Hut is a great business and we are pleased that CETA are the acquirer."

On Tuesday (2 April 2019) a Financial Conduct Authority update revealed that it believes a multi-lateral strategy could be the best way to promote good practice when it comes to signposting people to the right travel cover for them if they have pre-existing medical conditions. The British Insurance Brokers’ Association (Biba) Executive Director, Graeme Trudgill has been very vocal about the importance of signposting in regards to vulnerable customers.

In other news... The Financial Conduct Authority has slammed general insurance firms for failing to consider the value of products and services provided to customers. The regulator highlighted manufacturing, sales and distribution approaches that it said can lead to customers purchasing inappropriate products, paying excessive prices or receiving poor services. In a report published (10 April 2019) the regulator set out key findings from its thematic work on the GI distribution chain, its expectations of firms and next steps.

To celebrate World Health Day and increase awareness of MS Amlin’s strategy to support the health and wellbeing of its staff, the company will be hosting clinical psychologist Dr Bill Mitchell at its offices on 16th April 2019. MS Amlin encourages its employees to bring their ‘best self to work’. 

The Chartered Insurance Institute have announced an overhaul to their annual awards which celebrate talent at its local institutes and standards of excellence among its global membership. The new categories include: Emerging Professional of the Year, Chartered Firm/Member of the Year, Initiative of the Year, Unsung Hero of the Year and The Allan Bridgewater Award for Excellence.

Taking into account all acquisitions and disposals, Ardonagh generated Pro Forma income of £665m and Pro Forma adjusted EBITDA of £187m. Operating Cash Conversion of 80%, free cash flow break even in second half of year and available liquidity of £216m. Delivery of £18m cost savings and margin improvement of +150 bps versus prior year. Swinton, which was bought by Ardonagh Group in a £165m deal last year, helped these results. According to the investor report it made an income of £146.3m with adjusted Ebitda of £32.4m (total pro forma Ebitda was £146.1m). 2018 is the first full year figures for the group but the numbers suggested that in 2017 Swinton could have achieved an income of £173.7m with a lower Ebitda of £20.8m.

The Australian Securities and Investments Commission has inked two memoranda of understanding with the UK Financial Conduct Authority (FCA) on trade repositories and alternative investment funds (AIFs) to ensure there is continuity once the UK leaves the European Union. The deals will ensure arrangements are in place for cross-border cooperation between the two regulators, as well the continuity of existing equivalence decisions to provide certainty to businesses post-Brexit.

It looks like Munich Re’s ERGO Group AG is not done offloading parts of its business. The Insurance group – which consists of ERGO Deutschland, ERGO International, ERGO Digital Ventures and ERGO Technology and Services Management – is selling the entire life, non-life and composite insurance portfolios of three entities of ERGO International in Hungary and Slovakia to Generali. Subject to certain regulatory and anti-trust approvals, the transaction will see Generali snap up entities with a combined premium income of €20.6 million in 2017. The purchase price, as per the agreement between the two camps, will not be disclosed.

Personal lines Insurer Esure technically has not had a Chief Executive since January 19, 2018 and Chairman Sir Peter Wood has issued an update on where the Surrey-headquartered firm he founded now stands as far as its recruitment for the top post is concerned. “The search for a new Chief  Executive Officer was well underway in 2018, however, that process was subsequently paused during the Bain Capital acquisition,” stated Wood. “The search has resumed and is well advanced and the board intends to confirm a permanent appointment in 2019.”

Co-op’s results, revealed this week were largely impressive – it saw its total revenue up 14% to £10.2 billion with profit before tax up 27% at £93 million. This allowed it to return a whopping £79 million to members and their communities. It was revealed earlier this year that the firm would be offloading its underwriting business CIS General Insurance Limited to Markerstudy for £185 million. In its statement, the company outlined that it is “clear in terms of strategic direction and the best means of creating increased value for our members and their communities.” It outlined that the £185 million sale will “allow us to focus on our strategy of providing a broader range of insurance products for members, via our distribution business.”

Lloyd’s of London has been under the spotlight in recent days and is reportedly set to officially unveil a new code of conduct this week. Described as “modernised,” the revised rulebook will specifically deny entry to the Lloyd’s premises to people under the influence of alcohol or illegal drugs. The Sunday Telegraph’s source also noted that bad behaviour would lead to the confiscation of passes.

The Financial Services Compensation Scheme has revealed that it has worked with a number of Brokers to transfer around 165,000 Qudos Motor and Pet insurance policies to new providers. The regulatory body detailed that, since the collapse of the Denmark-based insurance company in December 2018, FSCS has been working to secure alternative insurance cover for these Motor, guaranteed asset protection (GAP) and Pet insurance policyholders.

Home insurance companies make all of their profits from the loyalty penalty, according to research from Citizens Advice. The charity, which submitted a super-complaint slamming the practice of overcharging loyal customers to the Competitions and Markets Authority in September 2018, said it had found that Home Insurers make over £1bn a year from loyal consumers holding policies for six years or more. The research also revealed that loyal customers are paying an annual average premium of £325 for their sixth year of insurance, which is almost double that of new customers.

CFC Underwriting
has announced that it is now offering its specialist Digital Health product, which has previously been limited to American Brokers, in the UK. The policy offers affirmative cover for bodily injury that has emerged as a result of advice given by companies and health professionals and/or bodily injury that has emerged due to technology failures and cyber events. Its pre-existing Cyber and privacy cover is also included as standard with additional cover for Technology E&O, breach of contract, self-monitoring healthcare devices and cover for failure to perform.

Cyber MGA start-up Bewica targets Brokers with portal launch and API offering. It follows the launch of the InsurTech’s Cyber product in September 2018 underwritten by AmTrust at Lloyd’s which includes 24/7 breach response supported by an expert panel of legal, cyber security and specialists. UK-domiciled SMEs are covered on a global-basis and up to 90% of business sectors are eligible for the cover. To complement the cover Bewica’s new partner platform has three options Including a Broker portal, a white label offering and API integration for third party platforms.

Brokers had mixed reactions to the news that Anthony Gruppo is replacing Phil Barton as CEO of Jelf. Gruppo, who is coming over to the UK from Marsh & McLennan Agency (MMA) in the United States, will take on the role in May. Market experts were unsurprised at Barton’s exit in late March, with former Jelf boss Alex Alway, who is now chairman of Broker Network and Compass, stating that it was “inevitable” that Marsh would want someone from within the Marsh business to run Jelf.

Already the third biggest Insurer in Europe, Italian giant Generali has set its sights on further growth by revealing plans to pour one billion euros (around £862 million) in the first funding of a new asset Manager. Originally reported by Italian financial publication Il Sole 24 Ore, it was outlined that the Insurer would take a majority stake in ThreeSixty Investments. Its move will be accompanied by a team of professionals that is led by Giordano Lombardo, the former CEO of Pioneer Investments. A Reuters report outlined that the Italian superpower has been on the lookout for growth opportunities across Asia, Europe and the USA. It is said to have set aside around four billion euros for acquisitions and growth – it is thought to be targeting asset Managers and various other high margin businesses as it looks to boost its earnings.

Insurance software provider Applied Systems has announced that it has acquired TechCanary, an insurance CRM system built on the Salesforce platform. The acquisition expands Applied’s sales and marketing services and will drive greater sales and marketing automation for insurers, agencies and MGAs.

Casualty insurance has been a difficult line of business in many markets around the world for some time. The profit margins are generally quite thin, driven by long-tail challenges and inflated claims in areas like transportation, pharmaceutical product liability and catastrophic property (to name just a few). Despite this challenging backdrop, Swiss Re’s Global Head of Casualty Reinsurance, Jason Richards, remains optimistic. The global economy is growing and insurance premiums around the world are growing in tandem, he said. Swiss Re projects a 5% increase in insurance premiums over the next few years, which will stem from both Property and Casualty lines. 

British Crown dependency Guernsey has its eyes set on developing its managing general agents sector and the Managing General Agents’ Association (MGAA) has offered its impressions. MGAA Managing Director Peter Staddon and founder David Coupe paid a visit to the island to meet with the MGA steering group formed from the Guernsey International Insurance Association. According to the MGAA, both Staddon and Coupe were impressed by Guernsey’s insurance infrastructure.

Insurance claims for subsidence have risen sharply following the hot, dry summer of 2018, according to the latest data from the Association of British Insurers. Claims for subsidence relating to domestic properties rose by around 300% in volume and 350% in value, the highest quarterly rise since records began. Commercial claims rose by more than 200%. While the value of many claims for subsidence is modest, those involving underpinning are often well in excess of £100,000.

 


 

Market Movers and Shakers

American International Group Inc. has announced that Kathleen Zortman will join the company as President and Chief Executive Officer of Private Client Group, General Insurance. Ms. Zortman will report to Peter Zaffino, Chief Executive Officer of AIG General Insurance and Global Chief Operating Officer, AIG and serve as a Member of the General Insurance Executive Leadership Team. Ms. Zortman will join AIG in the coming months following a transition period.

Edwards Insurance Brokers are pleased to announce that Richard Lane has joined them as Development Director. His experience dates back to the 1970’s when he joined Royal Insurance. He has subsequently worked for Zurich, LV= and latterly Ecclesiastical where he was Managing Director at Ansvar until his retirement in March 2019. Richard’s role will build upon his broad experience in the Faith, Not for Profit and Community Sectors. He is looking forward to being part of the dedicated and enthusiastic team at Edwards Insurance Brokers. Edwards are building their presence in the Faith, Charity and Community Sectors and it is a fantastic opportunity be involved as part of their ambitious growth plans.

Allianz Engineering, Construction and Power has named Jon Hesketh as its new Regional Underwriting Manager for Manchester. Jon joins the business after working at QBE for the last nine years, where he ran the Manchester and North West Liability account. This comprised of construction and related trades, which attracted Jon to the position of Regional Underwriting Manager for Allianz Engineering, Construction and Power.

In other news... Allianz has added Karen Boothroyd and Jonathan Oldfield to the senior management team of its Engineering, Construction & Power unit. Boothroyd, who has overall responsibility for the distribution, underwriting and operations for the enlarged Northern region in her capacity as regional Manager – North, will now also be in charge of overseeing Scotland, Ireland, the Midlands and South West. She has been with Allianz since 2004 and joined Engineering, Construction and Power last year.

Gallagher has announced John Thompson as Chief Executive Officer of the UK’s specialty London market and wholesale businesses, having held the position on an interim basis since September 2018. John joined the business in 2014 as Managing Partner for construction. Since then, the division has quadrupled in size and in 2017 his role expanded to include responsibility for the 60-strong energy division.

StarStone Group has made further changes up top, barely six months since group Chief Executive John Hendrickson was tapped to take the helm at the global specialty Insurer. First of all, president Chris Rash will become Deputy Group CEO as well as Chief Executive of StarStone International. The RSA veteran and former MS Amlin group Chief Financial Officer came onboard StarStone in August 2018 as Executive Chairman before taking on the newly created position of President October 2018.

Sara Mitchell, Head of the Middle Market division for the UK and Ireland at Chubb, has been tapped to take on a bigger role. Effective April 30 2019, Mitchell’s appointment as division president for the UK and Ireland retail business will see her replace David Robinson, who is taking a sabbatical at the end of the month. Based in London, the former Allianz and RSA Executive joined Chubb in 2011 and will be in charge of the Property and Casualty, Accident and Health and Consumer Lines operations in the UK and Ireland.

PremFina has added Martyn Holman to its advisory board. Holman, who left the group commercial director role at Markerstudy in 2017, is also Chairman of The National Salvage Association. He is also a Non-Executive Director of software company Open GI as well as telematics firm Smart Driver Insurance.

Covéa Insurance has named Carolyn Callan as its new commercial lines and HNW Director, succeeding Simon Cooter. She will take on the role on 1 May 2019 and also join the Executive committee of the Insurer. Last year Cooter announced his intention to leave the business in 2019 due to a desire to change the pace of his working life.

Now that Chubb has merged the underwriting team of its Financial Institutions business in the UK and Ireland with that of its London Market wholesale and specialty arm Chubb Global Markets (CGM), the Insurer has created a position for the head of the combined units. Jonathan Kennett, the Financial Institutions Manager who came onboard in 2017, is moving up to be in charge of the leadership, strategy and performance of Chubb’s Financial Institutions business in the UK and Ireland and CGM. His expanded remit is effective immediately.

 

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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