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General Insurance Newsletter Friday 12th October 2018

11 Oct 2018

Insurance News

Global Risk Partners (GRP) is set to buy Broker Risk Alliance for an undisclosed sum. According to sources a deal is due to go through this month with GRP buying the business which is headquartered in Yorkshire. It is believed that Risk Alliance was originally in talks with Broker Network but, following the breakdown of those discussions, GRP stepped in.

Brightside Group has posted a loss after tax of £9.6m for the year ended 31 December 2017, more than treble the £3.1m deficit of 2016. Revenue for the group declined by 12% to £42.2m from £48m the year before. A breakdown of the revenue stream showed that the broking division achieved £25.4m of revenue, some £15.3m came from the medical reporting unit and there was £1.4 of other ancillary income.

Close Brothers Premium Finance (CBPF) has expanded its relationship with Ardonagh Group by winning the Swinton account. Last week Ardonagh agreed to pay £165m for Swinton stating it would fund the purchase from existing finance and with “cash from monetising certain Swinton assets”. According to an industry source the £60m deal will securitise the existing book and give Close Brothers access to the customers as they come through on renewal.

In other news...Close Brothers Premium Finance will only write recourse policies for Gefion Insurance-backed products from 1 November 2018. In a letter to Brokers, Close Brothers wrote: “Whilst we do not want to limit the choice of Insurers for both our Brokers and customers, Gefion is a relatively new Insurer and we have a fast-growing exposure to them, which we want to limit.” Close Brothers also confirmed the change would affect any insurance through Gefion associated managing general agents.

In further News… Close Brothers to end non-recourse policies for Danish Insurer’s product. Premium Credit is still writing recourse and non-recourse policies to sit with Denmark-based Gefion Insurance’s products but currently has the provider under “active review”, said CEO Tom Woolgrove. Close Brothers Premium Finance was ending non-recourse policies for Gefion and Gefion-backed managing general agents’ (MGA) offerings on 1 November. It will still take on recourse policies but in the event of an agreement cancellation any outstanding debt will be the Broker’s financial responsibility.

Legal Expenses Insurer Das is on track to achieve a 95% combined operating ratio (COR) in the medium term according to CEO Andrew Burke. The publication of the provider’s results showed losses decreasing to £5.2m for the full year 2017 (2016: £13.8m). GWP also fell to £111.5m from £130m but the COR improved to 101.2% compared to 103.0% the previous year.

Dame Inga Beale, Chief Executive at Lloyd’s of London (until successor John Neal takes over the reins on October 15) – says the global insurance and reinsurance market is stepping on the gas when it comes to its Brexit plans. “Lloyd’s – its heart is in London but it writes business from all over the world,” explained Beale in an interview aired during the October 07 episode of The Andrew Marr Show on BBC One. “15% of the business Lloyd’s does comes from the EU markets. Post-Brexit, we won’t have the ability to continue to offer insurance just from London as before, so therefore we’re opening up a subsidiary in Brussels."

Are 'Influencers' the untapped insurance market? It’s set to be worth as much as $10 billion (£7.7 billion) by 2020, but the influencer market is relatively untapped by insurance at the moment – presenting potentially huge growth opportunities in the future. In a world where we all have a smartphone in our pocket, social media is king. But many influencers and public figures, who can be paid thousands – sometimes millions – for a single post, are largely unaware of their exposures.

Speaking of influencers…. American International Group (AIG) is suing Kim Kardashian West’s former Bodyguard for negligence after the reality TV star was robbed of millions of dollars’ worth of jewellery in Paris and the Insurer was left to fit the bill. The insurance giant is seeking $6.1 million (about £4.7 million) from Pascal Duvier and his company Protect Security, according to court documents filed on Wednesday in Delaware.

The damage numbers are in for Hurricane Florence and the results paint a grim picture. The top-end estimate of property damage related to Hurricane Florence came in at around $45 billion, according to Moody’s Analytics. Ryan Sweet and Adam Kamins of Moody’s Analytics compared Florence to 2016’s Hurricane Matthew, noting that this year’s hurricane event brought floodwaters and strong gusts of winds to thousands of single-family homes within a huge disaster zone.

Aviva is launching a new community for Brokers which it says will help address the specific needs of smaller, independent Brokers, it has been announced. The Insurer says it wants to strengthen its support for Brokers with the new proposition, which will include same-day response times, discounted compliance packages and free access to learning and development tools. The move comes after recent research from Aviva found that smaller Brokers often experience inconsistent service from Insurers and a lack of wider support to run their businesses effectively.

Here’s another case of CCTV saving the day. Thanks to the wonders of video surveillance, a pub owner-turned-arsonist had been left with no choice but to plead guilty to fraud by false representation at Chester Crown Court. The footage, collected by the investigation services team at claims management giant Sedgwick, showed Donna Tracey lighting a cigarette behind the bar of a Huntington pub in April 2017 and using it to ignite a paper napkin, which she then dropped into a bin. The subsequent blaze was the basis of Tracey’s fraudulent insurance claim, in which she pointed to a fault on refrigeration equipment as the likely cause of the fire.

AXA has signed on as global insurance partner of English Premier League side Liverpool Football Club on a multi-year deal. According to a statement by the France-headquartered Insurer, becoming a global insurance Partner of the 18-time champions of English football is part of its sponsorship strategy to boost its brand visibility and raise its profile among sports fans around the world.

In other news... AXA UK has partnered with Sky Media and News UK’s Bridge Studio to produce a range of sponsored video, print and audio content. As part of the collaboration, brokered by agency Havas Media, Sky will produce three short five to 10-minute documentaries presented by Sue Perkins, The Sunday Times Magazine will publish four long form features and talk Radio, part of the Wireless Group, will feature AXA on Eamonn Holmes Drivetime Show.

International Loss Adjuster Charles Taylor Adjusting has announced the acquisition of FGR Group, a loss adjusting and claims program management services company. FGR employs about 385 people in both Chile and Peru and has a growing presence across Latin America. FGR’s loss adjusting business operates in the Property and Casualty market, with a focus on Construction, Engineering, Liability and Catastrophe losses. The claims management business provides insurance claim-settlement services to insurance companies in the Chilean market. It handled about 3.1 million claims last year.

Willis Towers Watson has announced its acquisition of Dero Courtage, a risk adviser and insurance Broker with a strong presence in the French region of Normandy. Dero Courtage, headquartered in Le Havre, has been developing its insurance broking expertise for more than 80 years. It will now operate under the brand of Willis Towers Watson’s French business, Gras Savoye Willis Towers Watson France.

Ageas UK is moving to a centralised functional structure working across its three core channels of Broker, partnerships and direct to customer. The Insurer stated that the changes were designed to simplify the business. As of 1 January 2019, the senior team will be made up of certain existing senior management with several new roles also being created.

The HNW Forum is open for registration so sign up now to listen to top speakers and take part in business useful workshops. The popular event takes place at Etc.venues Fenchurch in London on 18 October. This year’s keynote speaker is Simon Foster, Chief Executive Officer of TY Danjuma Family Office.

Coversure Insurance Services Group is to support its franchise holders in making acquisitions, following the firm’s management buyout in May this year. Chief Executive Officer Bob Darling explained that the business is “completely committed” to the franchise model after its Livingbridge-backed MBO. Darling said: “A private equity firm will often talk about a buy-and-build strategy, but it would normally be within its own business."

Red Apple Finance is officially launching on 1 November with a three-year growth target of £75m in premium finance funding. It has been backed by Barclays and the firm has developed its own software which it said can be integrated with all Broker software houses. “It is a market place primed for some new players,” Kevin Paterson, Managing Director of Red Apple Group. “The big boys have had it their own way for too long.”

LV has signed a deal to provide £75m of capacity over six years to managing general agent (MGA) Kinetic Underwriting for specialist Motor products. The Insurer detailed that classic, enthusiast, motor home and specialist vehicles are all within the product range. The policies are already available through software houses and LV stated that Kinetic’s specialism will complement its own offering.

The Central Bank of Ireland has asked UK-based Brokers placing business in the country to confirm their contingency plans for Brexit. In a letter to firms the Central Bank set out its expectations on the step’s businesses should take ahead of the withdrawal date at the end of March 2019, in case there is no transition agreement between the UK and the European Union. Neil Campling, Chief Executive Officer of ICB Group, said Brokers had ten days to provide the Central Bank with the requested information.

Arthur J. Gallagher has announced that it has been recognised by Forbes magazine as a “World’s Best Employer” for 2018. Gallagher added in a company release that it is honoured to be the only insurance brokerage firm that made the list; the brokerage ranked #344. “We are very proud to be recognised by Forbes for what we think has been in our DNA since my grandfather started the business in 1927 - the best environment to attract top talent,” said Gallagher chairman, president and CEO J. Patrick Gallagher, Jr. “The fact that we are the only insurance brokerage company to be recognised makes us even prouder. No matter which geography our employees work from, we want each individual to be themselves, grow with us and drive a positive impact—that’s The Gallagher Way.”

Brokerslink reveals network expansion - The global Broker network of Brokerslink is now bigger in what is described as an increasingly important insurance market. Announcing the expansion, the global broking business said eight affiliates have joined Brokerslink in Africa. These are CCAR in Mauritania; Compendium, South Africa; Consass, Burkina Faso; Generalia Assurances, Cameroon; Générale de Courtage, Guinea Conakry; La Protectrice Assurance, Togo and Benin; Hoggar Assurances, Niger; and WH Assureur-Conseil, Senegal. With the addition of the new affiliates, Brokerslink’s presence has now been extended to 21 countries in Africa. “The expansion of our network in Africa is a significant indicator of our commitment to supporting independent Brokers across the continent,” said Ana Cristina Borges, regional manager for the Middle East and Africa region at Brokerslink.

International insurance services provider Thomas Miller has announced that it has completed its acquisition of the managing general agency and insurance services businesses of Zeller Associates. Based in Hamburg, Germany, Zeller Associates focuses on providing risk and insurance services for shipping, trade and transport. It also provides services to other specialist areas, including the cruise and tourism industry. Thomas Miller provides management services for transport and professional indemnity services, claims and captive management and other services. “The acquisition of these businesses’ specialist expertise across a broad range of marine transport-related insurance services is an excellent and complementary addition to the Thomas Miller Group,” Thomas Miller chairman Hugo Wynn Williams said when the acquisition was announced in September.

New division at McComish Insurance Brokers takes off - McComish Insurance Brokers (MCCIB) is flying into the world of Aviation cover. Announcing the launch of its new division, the Hampshire-based Broker said it will now address the insurance and risk management needs of aircraft. “MCCIB is well known for bespoke solutions and the new division represents significant expansion for us as an independent Broker,” said managing director James McComish. “It has developed in response to requirements for policies which address aviation cover, from commercial business through to private planes and flying schools."

The Soyuz spacecraft was forced to make an emergency landing Thursday. That landing could trigger one of the biggest payouts for Russian Insurer Soglasie in decades if the incident turns out to be an insurance case, according to a Reuters report. The spacecraft malfunctioned Thursday shortly after lifting off on a mission to the International Space Station, according to The Washington Post. The two astronauts on board – an American and a Russian – endured more than six times the force of gravity during the craft’s steep descent, but both ejected safely, the Post reported. The mission was intended to provide relief crew and supplies to the International Space Station. The astronauts currently aboard the ISS will now likely have to wait until early next year to come home. Solgasie said it was investigating the incident to see whether it was liable, Reuters reported.

Actor Verne Troyer’s family may not see any payout from his life insurance policy after a coroner ruled his death a suicide. Troyer, best known for his role as Mini-Me in the Austin Powers films, died in the hospital on April 21, three weeks after being admitted for alcohol intoxication, according to a report by the Mirror. Following an autopsy, the Los Angeles medical examiner’s office said Wednesday that Troyer had died from alcohol poisoning. The actor had three times the legal limit of alcohol in his system when he was admitted to the hospital, according to the Mirror. With the death ruled a suicide, Troyer’s family may have trouble collecting from any life insurance policies, as most policies contain a suicide clause to protect Insurers from people who buy life insurance with the intention of killing themselves. In practical terms, that means most insurance companies can contest the pay-out if the insured commits suicide within two years of taking out the policy. If the insured is discovered to have misrepresented anything on his initial application – lying about drinking habits, for instance – the Insurer can also reject the claim, the Mirror reported.

Stackhouse Poland has bought Legal Indemnity insurance specialist Title & Covenant for an undisclosed sum adding £8m of gross written premium to the group. The Borehamwood-based firm, which also has an office in Bristol, is a subsidiary of Title Investments and has been trading since 2008. It is the third deal of the year for Stackhouse Poland which snapped up Caprica.

Cowens Survival Capability rebrands - Broker joins forces with financial planners Cowens Financial Architects under the name Cowens Group. Independent Broker Cowens Survival Capability and financial planners Cowens Financial Architects have restructured to form Cowens Group. The two companies will come together under the new brand, consolidating their five service offerings; Risk Solutions, Financial Architects, Employee Benefits, Survival Capability and Private Clients. As a result, Paul Chaplin, Managing Director of Mansfield-based Cowens Survival Capability will become the Chief Executive Officer of Cowens Group.

Cyber Decider warns that many popular Cyber policies used by Brokers do not cover common cyber security problems. Research by Cyber insurance comparator Cyber Decider has showed that cyber policies for Brokers fail to cover many of the common threats, it has been revealed. The firm warned that many policies would not cover phishing, malware and other common cyber security issues and that Brokers could be left with costly bills. According to Cyber Decider, because Brokers typically get their Cyber cover from their major Insurer partners, most smaller and regional Brokers are covered by standard policies, which may not be the policy most suitable for their needs.

Allianz has rebranded its engineering business as Allianz Engineering, Construction & Power and launched a suite of products for the renewable technologies sector. The Insurer stated that the rebranded proposition had been positioned as a multi-niche insurance and inspection provider. Allianz’s director of Engineering, Construction & Power Chris Little, commented: “The launch cements Allianz’s investment in creating dedicated multi-niche teams focused on the engineering, construction and power sectors and the creation of expert-led solutions at every interaction with the customer.”

CII responds to consultation on ethnic pay gap - Following the Government’s announcement that it is launching a consultation on whether mandatory reporting will help address disparities between the pay and career prospects of ethnic minorities, Tali Shlomo, People Engagement Director at the Chartered Insurance Institute, has commented: “Positive strides continue to be made as the consultation on ethnicity pay gap is a further example of how diversity and inclusion continues to form a critical strategic enabler for organisations. The challenge many organisations will now face is collating the data before reporting takes place. The Chartered Insurance Institute will look at the consultation to see how we can guide the profession with collating, reporting and the range of initiatives to support this important next phase of reporting.”

 


Market Movers and Shakers

Come October 15 2018 there will be a new man – yes, a male Executive is taking over – at the helm of the world’s specialist insurance market Lloyd’s of London, meaning the reign of its first and only female CEO comes to an end. Dame Inga Beale, who now speaks more openly about her personal life compared to previous years, appeared on The Andrew Marr Show over the weekend and talked about the business, Brexit and inclusion. The outgoing Chief Executive shared what made her become ‘bold and courageous’ when it came to the subject of sexual preference.

UK telematics firm Trak Global Group (TGG) has appointed a Chief Financial Officer and a non-Executive Director as part of its international expansion plans. Ivan Bumstead, who began his career in finance at PriceWaterhouseCoopers in 1995, has come onboard as CFO. He will be in charge of managing the financial stewardship of TGG and working with the management team to plan, measure, manage and improve business performance.

Aviva Plc announces Mark Wilson and the Board have agreed that Mark is stepping down as Chief Executive Officer of the group. Mark will remain with the group until April 2019 and will assist with the planned and orderly transition.

Allianz has welcomed 32 graduates onto its graduate programme. They recently shared an intensive induction week with presentations from CEO, Jon Dye and members of the management board. Enrolled across six schemes (Actuarial, Underwriting, Finance, IT, Claims and Management Trainee) the graduates will gain extensive exposure to the business and wide-ranging career skills.

Building on the recent hire of Ian Curtin, Andrew Clydesdale has joined Miller to further strengthen our construction and energy technical excellence. Andrew will be working with the construction team in London, using his expertise to optimise Miller's offering in this highly technical specialism. Together with Ian and the team, Andrew’s appointment ensures Miller will continue to provide our existing and prospective clients with a truly first-class construction offering. Andrew and Ian have been involved in many of the largest and most complicated construction mega-projects in the last twenty years.

RSA has promoted Lee Mooney to the newly-created role of UK regions Director for its Commercial Risk Solutions (CRS) business. He has stepped up after overseeing the company’s CRS Regions North business. Rob Gibbs, Managing Director, Commercial Risk Solutions, UK & International Region, said: “Lee’s drive, enthusiasm and knowledge of the regional Broker market have been key to the improvements we’re making in CRS and I’m confident that his expertise and insights will be invaluable to driving our business forward in the foreseeable future.”

Brokerslink has a new chairman – and it’s a familiar face. Former CEO Jose Manuel Fonseca has moved into the role as Gregory Allard steps down at the end of his two-year tenure. As its founder, Fonseca has overseen the business’s transformation from a network into a global broking organisation. “When Brokerslink was founded in 2004, the aim was to create a global network supporting local independent Brokers to maximise multinational opportunities for their own clients and become a credible alternative to the large alpha house Brokers,” he said. “With the commitment and dedication of a fantastic team over the years, I have seen this vision become reality."

Stephen Rix, former Chief Actuary at Liberty Specialty Markets, has been tapped by International General Insurance Holdings Limited (IGI) to serve in the same capacity. The key hire most recently held the position of analytics head at Capsicum Re and brings broad experience in (re)insurance to IGI. Rix qualified as a Fellow of the Institute and Faculty of Actuaries in 1989 and is also a Fellow of the Society of Actuaries in Ireland. Based in the London office, the new Chief Actuary said IGI is innovative not only in its range of products but also in its adoption of the latest technology. He described the firm as growing, ambitious and independent.

Andrew Brooks, Chief Executive Officer of Ascot Underwriting Ltd., has been appointed the next Chairman of the Lloyd’s Market Association (LMA) with effect from 1 January 2019.Mr Brooks, who has served on the LMA Board as a member since 2012, will succeed Neil Maidment, who will be retiring as Chairman at the end of the year. Mr Brooks said: “I am honoured to be appointed LMA Chairman and will seek to build on Neil’s successful work in ensuring thatthe LMA effectively represents the interests of Lloyd’s managing agents."

International General Insurance Holdings Limited (IGI) is pleased to announce the appointment of Stephen Rix as Chief Actuary. Stephen has a broad and varied experience of insurance and reinsurance at senior executive level. Most recently, he was Head of Analytics at Capsicum Re and before that he was Chief Actuary at Liberty Speciality Markets. He will be based in IGI’s London office. Waleed Jabsheh, the President of IGI and Executive Director of IGI UK, said: “We are delighted to have Stephen join us at IGI. He is well respected in the market and will help to advance the company’s actuarial potential. He will bring to IGI his expertise in using state-of-the-art technology and data management to develop pricing, reporting, analytical and business planning.

 

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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