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General Insurance Newsletter - Friday 13th April 2018

13 Apr 2018

Market News

The Financial Conduct Authority (FCA) has published its Business Plan for 2018/19 which includes a promise to focus a high level of resource on the regulatory implications of leaving the European Union. FCA Chief Executive, Andrew Bailey, commented: “The Business Plan is an important way in which we are transparent about our priorities for the year. We recognise that this year we need to dedicate a significant amount of resource to withdrawal from the EU. As a result, setting our priorities this year has involved a particularly rigorous level of scrutiny and challenge to focus on areas where we see the greatest potential for harm”. The Financial Conduct Authority has budgeted for a total annual funding requirement (AFR) of £543.9m for 2018/19. It also predicted a total EU exit cost of £30m to the regulator. The figures were revealed in a consultation paper on fees and levies published alongside its Business Plan. This is an increase of 3.2%, compared to the £526.9m budgeted for 2017/18.

It’s been revealed that Aviva has increased its stake in ITV. It was reported that the insurer’s interest in the television network has increased, from below the notification threshold, to 3%. The report added that Aviva’s shares climbed 0.8% on Thursday, to 487.20 pence per share.

Next Venture Technologies – which provides insurtech services for price comparison websites, intermediaries, and insurers – has installed its data management service software for Quote Detective. Described as a pioneering service, it uses machine learning algorithms in tandem with users’ current systems. In the case of Quote Detective, Next Venture’s offering allows the specialist broker to effectively allocate its sales resources and identify market niches where it might need to modify product pricing and placement.

The relationship between the Insurer and Consumer is changing, meaning that so too is the role of the middle-man – but Brokers will disrupt themselves to stay relevant. According to George Wright, Chief Executive Officer at Smart Communications “We’re now seeing both P&C and Life insurance come out with solutions that go direct to the customer, and certainly I think that Brokers are concerned with that”. However, while the role of the intermediary is potentially under threat from the rise of direct-to-consumer, Wright said that, by nature, Brokers are staying ahead of the curve. 

The retail broking arm of Hyperion Insurance Group is acquiring a majority stake in Istanbul-headquartered ACP to expand Howden’s existing presence in Turkey and become one of the country’s largest insurance brokers. The deal is expected to be completed around mid-April.

The Broker Network has revealed a deal for Weald Insurance Brokers, based in Westerham, Surrey. Established back in 2003, Weald focuses on property-related and commercial risks, as well as Motor Trade, Motor and Fleet insurance for high net worth individuals. It currently employs just over 40 people and has GWP in excess of £14m. The deal takes Broker Network’s total number of regional powerhouse acquisitions to six.

It has been revealed that software house SSP is to increase its prices for Brokers by 5.5%. The increases which took effect this month were confirmed by the tech provider which said increased regulatory changes, especially GDPR, had led to the price increases. Steve Lathrope, Chief Executive Officer, justified the increases and stated that “The insurance industry has seen an unprecedented quantity of regulatory change over a short time frame, with the CMA requirements, as well as the IDD and the GDPR.”

Hayes Parsons Insurance Brokers has been awarded chartered status by the Chartered Insurance Institute (CII). The Bristol-based company said the title is only awarded to firms which “meet rigorous criteria relating to professionalism and capability”. It added that it had also committed to following the CII’s Code of Ethics, saying it would reinforce “the highest standards of professional practice”.

Co-op Insurance has posted an operating loss of £12m for 2017, an improvement on the £18m loss the year before. The provider flagged that without the one-off costs of “transformational spend” it achieved an operating profit of £2.1m. Underlying operating profit was identical to 2016 at £11m. The Insurer, which is chaired by former Axa boss Peter Hubbard, works with a number of key partners in Home and Motor and also teamed up with Miles Smith in 2016 but is predominantly a direct player.

Endeavour Insurance Services has launched a new Cyber Security Coverage programme, Ensconce, claiming it filled a gap in the market to cover manufacturers from the risk of physical damage caused by cyber attacks. According to the Lloyd’s Broker, in a world of increasing manufacturing automation, the Internet of Things (IoT) is putting more hardware – from laptops and mobile phones to production lines and boilers – at risk. It listed that the product provides coverage in standard Cyber areas such as third party liability, first party liability, data breach clean up, and social engineering loss.

Zurich Insurance Group Ltd has announced the launch of a public share buy-back program for cancellation purposes in the amount of up to 1.74m Zurich shares on 11th April 2018.

Allianz has detailed the new driving laws coming into force this April. From April 2018, motorists buying a new diesel car will pay more road tax. It’s expected that this tax increase will raise an extra £125m in 2018-2019. A new law for smart motorways sees a new fixed penalty for drivers who drive in a closed lane. From 4 June, learner drivers can drive on the motorway, however will only be allowed with their instructor and as long as they’re in a vehicle with dual controls. This will pose a new risk for other road users that could affect underwriting considerations in the future. In May, significant changes are coming for MOT tests - test results will be categorised into dangerous, major and minor. These changes could make it more difficult for a vehicle to pass its MOT. If a vehicle receives a dangerous or major fault, it’ll instantly fail. If it receives a minor, it’ll pass, but be noted on the certificate.

Two years’ on from the launch of HM Treasury’s Women in Finance charter, signatory Covéa Insurance is proud to announce that it will be one of a number of companies supporting Leeds Beckett University to support its own “Women in Leadership” programme. The insurer will support a series of events and activities designed to accelerate the interest, ambition and potential of the university’s female students.

The UK has a population of seven million latent entrepreneurs, who have advanced plans for a business but are being held back from launching, according to a national survey of 8,500 people conducted by AXA Business Insurance. These people account for 13% of the population and are drawn from all walks of life and demographics. If these plans were realised they would massively boost the UK’s private sector economy which currently numbers 4.8m businesses. Crucially, the survey only considered people who could articulate a concrete business idea and practical steps already taken to realise it.



Market Movers and Shakers

Markel International has made several promotions within its trade credit, political risk and surety business. Adrian Jones has taken up the role of Head of Strategic Development for Asia and the Middle East in addition to his existing Senior Underwriter role. Leroy Almeida has been appointed as Head of the Middle East operation, which now incorporates Marine and Directors & Officers liability (D&O) product lines. Abhishek Chhajer continues to lead the Trade Credit Operation in the Asia-Pacific region. Simon Moon has been appointed Head of Risk Underwriting; and Carl Titterton, Head of Commercial Underwriting for the trade credit operation. Nicola Marriage becomes Head of Political Risk while Damian Manning remains Head of Surety. Arjan Van de Wall was named Global Development Director, and Philip Amlot was appointed as Head of Trade Credit and Political Risk for the Americas.

Lockton Head of Benefits Mike Tyler will be succeeded by two Senior Vice Presidents. From 1st May, Jon Green and Chris Rofe are jointly assuming leadership responsibilities for Lockton’s UK and International Benefits practice. Tyler, meanwhile, will continue working with the insurance Broker on a consulting basis.

PIB Group has announced the appointments of Tim Brooke and Adrian Colosso as Independent Non-Executive Directors. Tim Brooke will also act as Chairman (subject to regulatory approval) for all Group regulated businesses (except Citynet) and the Group’s Audit, Risk & Compliance Committee.

Erskine Murray has appointed Lynette Houghton as Head of Region to support their growth plans in the North West following the acquisition of Offley Insurance Services Ltd last year.

Direct Group’s Claims Division, with locations in Doncaster, Elland and Preston, Lancashire, has hired three new Account Managers to manage increased growth. Katrina Beagan, Sam Horton and Tracey McManus take up their new roles with immediate effect.

InsurTech startup Wrisk, has announced the appointment of Nimeshh Patel as Chief Operating Officer.

The London Market Group (LMG) has announced the appointment of Andrew Horton, CEO of Beazley as its new Chair with effect from 4 May 2018. He will succeed Nicolas Aubert, Head of Great Britain for Willis Towers Watson who has held the role for two years.

Independent Lloyd’s Broker AFL Insurance Brokers Ltd (AFL) has announced the appointment of Jonathan Bines as Chief Commercial Officer.

Neon has announced the appointment of Jeremy Cooke as Contingency Underwriter.

Legal Protection Group is delighted to announce that Rob Horner has been appointed as ATE Underwriter. 

Gauntlet Group has appointed Nick Etell to the position of Business Development Manager.

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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