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General Insurance Newsletter Friday 13th December 2019

13 Dec 2019

Victor Insurance Holdings (Victor) describes itself as the world’s largest MGU with locations in the US, Canada, UK, Netherlands, Italy, Germany and Australia. Now it has announced approval from Lloyd’s to establish Victor Syndicate 2288 which will commence underwriting effective on January 01, 2020. This syndicate will have a stamp capacity of £57 million, supporting a business plan of US$100 million.

Cyber insurance is a rapidly developing sector of the insurance industry and the issue of educating both Brokers and clients on exactly what Cyber insurance policies entail has never been more essential. Senior Claims Underwriter at Hiscox, Tony Kriesel, spoke to a publication at the 2019 NetDiligence Cyber Risk Summit in London to discuss information and misinformation in the Cyber insurance sector. In 2014, Since its inception, the Cyber offering has developed to become well-reputed within the Lloyd’s market and Kriesel outlined the importance of a strong team in creating this positioning. “Unlike some other lines of business,” Kriesel said, “in Cyber it’s really important to have an integrated team. That’s not just strong underwriting and wordings teams but also claims providing input and helping to market and sell the claims offering to clients and Brokers.”.

Insurtech firm Wrisk has extended its partnership with BMW Group Financial Services (BMW Group) to provide all new Minis sold in the UK with three months free Car insurance. The offer builds on the already close relationship between Wrisk and BMW Group, which began last year when the insurtech was named BMW Group’s Car insurance partner.

Specialist Insurer Ecclesiastical has partnered with English Heritage and tech firm Shepherd to pilot new technology to monitor and manage building services at an 18th century heritage site. The three firms are piloting sensors to monitor Kenwood House, the former home of William Murray, 1st Earl of Mansfield, located on the edge of Hampstead Heath in London.

Willis Towers Watson has announced the launch of ResQ Financial Reporter, a software product designed to help Property-Casualty Insurers implement IFRS 17. ResQ Financial Reporter provides an efficient framework to generate financial statements and supporting disclosure requirements for the IFRS 17 standard, the company said.

The price tag of Lloyd’s of London’s ambitious plan to become “the most advanced marketplace in the world” has been revealed. Lloyd’s CEO John Neal’s “Blueprint One” plan will cost £300 million and will be funded by debt. The plan was unveiled in September after several years of declining performance and complaints about the high cost of doing business in the 330-year old insurance marketplace. Under Neal’s plan, Lloyd’s will cut costs by streamlining processes and launching initiatives such as an electronic risk exchange.

In further news...Lloyd’s unveiled its guide to trans and non-binary inclusion at a launch event (10 December). The guide aims to improve the understanding of trans and non-binary people in the insurance industry, as well as provide steps for individuals and companies to boost their diversity and inclusion efforts in the space.

Staff at Lloyd’s have been warned to behave over the Christmas period by CEO John Neal. Financial News reported that he had emailed the workforce to remind them how to behave during this “challenging time of year”. The insurance market has been attempting to clean up its act in recent months following a series of allegations about inappropriate behaviour.

There has, perhaps, never been a better time to take stock of the evolving role of the Broker in the insurance sector and Head of Broker Relations and Marketing at Beazley, Lou Ann Layton, has provided some insights into this complex area. Being hired for her expertise in Broker relations, Layton has been given the authority to implement the changes she sees fit at Beazley and she has enjoyed the quick consensus about her ideas and how quickly they are enacted. The key changes she has made and the key value Layton brings to her role, she outlined, are about looking at what Beazley does through a different lens and then implementing the changes necessary to give both Brokers and the ultimate Insurers a better experience. “Improving the value we deliver not just to our external stakeholders but to our internal stakeholders as well, has been a focus,” she said. When it comes to Broker relationships, Layton stated that her role has been to provide an overview of what concerns a Broker, what helps a Broker and what makes a Broker more successful with Beazley.

Continuing its recent spate of acquisitions, PIB Group Limited (PIB) has announced its acquisition of Cooper Solutions Ltd. The news follows the recent announcement of PIB’s acquisition of CMR Solutions Ltd and Sue Smith Ltd. Cooper Solutions provides a portfolio of online solutions for the retail automotive industry. These solutions include a ‘market-leading’ daily rate insurance product that is provided through PIB-owned Cooke & Mason.

Following the recent appointment of Plexus Law Senior Partner, Anthony Baker, to the role of President of the Forum of Insurance Lawyers (FOIL). FOIL now has 33 separate sector focus teams representing the diverse spread of work covered by insurance law. Baker outlined the work FOIL does in lobbying, in meeting with the MOJ, the MIB, the ABI and in holding roundtables with other professionals. For those not embroiled in FOIL on a regular basis, he said, it is hard to imagine the amount of work and effort that goes into lobbying for the sector. Going forward, the Civil Liability Bill 2018 which has been a major consideration for FOIL over the last year and specifically the Whiplash Reforms section of this legislation, is likely to continue to dominate discourse.

An international body of financial regulators has warned that the increasing activity of Big Tech firms in the financial sector may pose risks to global financial stability. The Financial Stability Board (FSB) said in a recent report that competition from tech firms such as Google, Facebook and China’s Alibaba might “reduce the resilience of financial institutions, either by affecting their profitability or by reducing the stability of their funding.”.

The Financial Services Compensation Scheme (FSCS) has revealed that £276m in compensation has been paid out to customers of collapsed firms Alpha, Enterprise and Gable. New figures from the organisation place the price tag of each firm’s failure at £54m, £165m and £57m respectively. Alex Kuczynski, Chief Corporate Affairs Officer at the FSCS, disclosed the data at a briefing for members of the Managing General Agents’ Association.

Penalties handed out to 16 firms by the Financial Conduct Authority (FCA) brought in £227.3m during 2018-19. Figures released by the regulator showed the extent of its interventions in the market. The FCA launched 484 preliminary market abuse investigations over the period, with 91 enforcement investigations then taking place.

Consumers expect to see action on dual pricing if Insurers want to keep their business, according to the latest Chartered Insurance Institute (CII) trust index. The poll showed that the biggest opportunity for Insurers to improve their performance for consumers is in relation to customer loyalty. This was ranked as more important than price. The index surveyed 1,000 people about their experience of Motor, Buildings and Travel insurance and 1,000 small and medium-sized businesses about Motor, Buildings and Employers Liability policies in October 2019.

Aviva is moving its UK personal lines headquarters into its Hoxton offices, which previously housed its Digital Garage. A spokesperson for Aviva told said: “A small number of PL partner and Broker team members already based in London will move to Hoxton and join our Aviva Direct, Quote Me Happy and GA [general accident] teams who are already based there.” The spokesperson highlighted that the move does not affect the provider’s regional offices.

In further news....It’s never been more important for businesses to step up and start making real change. As part of Aviva's commitment to help tackle climate change, they have launched a new London Market Renewable Energy product. This is an integrated package of insurance designed specifically to support large companies with a global remit in the complex market of renewable energy, including onshore windfarms, solar power and battery storage.

Yutree Insurance has announced that it has been awarded Chartered status by the Chartered Insurance Institute (CII). The firm said the award represented the “gold standard” for insurance Brokers and that it was recognition of Yutree’s technical competence and qualifications. Kevin Hancock, Managing Director at Yutree, commented: “The Directors are delighted that we are now Chartered Insurance Brokers, publicly committed to a customer-first approach and values that align with a professional code of ethics.". 

AXIS Capital Holdings Limited ("AXIS Capital") (NYSE:AXS) has announced that its Board of Directors has declared a quarterly dividend of $0.41 per common share, which represents an increase of 2.5%. The common dividend will be payable on January 15, 2020, to shareholders of record at the close of business on December 31, 2019. In addition, the Board declared a dividend of $34.375 per Series E 5.50% Preferred Share (equivalent to $0.34375 per depositary share). The Series E Preferred Share dividend is payable on January 15, 2020, to shareholders of record at the close of business on December 31, 2019.

The London and International Brokers’ Association (LIIBA) is to launch a new committee in 2020, the Broker Placing Committee (BPC). The BPC will replace LIIBA’s Broker Placing and Electronic Development Committee (BPED) and its PPL Broker Panel, which will be wound up at the end of 2019. An event to mark the contribution made by BPED and the PPL Broker Panel to Lloyd’s Brokers was held at LIIBA’s office on Wednesday 11th December. The new committee will be chaired by Stuart Blyth, Chief Business Officer for Marsh JLT Specialty FINPRO division.

Independent insurance brokerage, Hugh J Boswell, has become the tenth regional broking powerhouse to form part of the Ethos Broking group. The Ethos Broking group now comprises 10 regional centres and 13 satellites. Hugh J Boswell Limited is a chartered commercial and personal lines insurance Broker based in Norfolk, and currently manages £22 million GWP.

Keith Richards, Chief Executive of the PFS and Managing Director of engagement for the CII, detailed how outreach activities had limited impact and reach in the past due to their emphasis on raising the profile of the insurance and personal finance professions. So, the idea of developing a fully-fledged pro-bono initiative aimed not just at highlighting career opportunities but also delivering financial education workshops across the UK came about.

In further news...The Personal Finance Society (PFS) has announced that its e-mentoring programme has attracted more than 1,000 mentors and mentees since its launch in the summer. The programme, called “Connect,” allows PFS members to use a digital platform to develop mentorship connections with other professionals at any point of their career and from anywhere across the globe.

Specialty risk Insurer AXA XL is partnering with Slice Labs and Microsoft in a new initiative aimed at helping protect users of Microsoft’s digital tools. Through the partnership, eligible users of Microsoft 365 Business, Office 365 Business Premium and Office 365 Business can purchase online (through Slice’s on-demand, cloud-based insurance platform) a comprehensive, end-to-end Cyber insurance policy from AXA XL at discounted prices.

German insurtech firm wefox Group has raised an additional US$110 million in Series B funding, bringing the total amount it has raised this year to US$235 million. The capital raise was led by OMERS Ventures, with participation from Merian Chrysalis, Samsung Catalyst Fund, Mundi Ventures and existing investors.

Stuart Edmonston, Loss Prevention Director at UK P&I Club, recently weighed in on several issues that the Marine industry is facing next year – including new upcoming regulations from the International Marine Organisation (IMO) and global shipping’s embrace of automation. “From a loss prevention perspective, the most obvious discussion point for 2020 is the impending roll-out of new IMO fuel and emissions regulations, which will bring unique challenges in terms of compliance, enforcement and managing the new type of fuel on board,” he said.

Disgraced film producer Harvey Weinstein has agreed to a tentative US$25 million settlement with his alleged sexual misconduct victims – and the board of his bankrupt film studio expects insurance companies to pick up the tab. The agreement comes over two years after the allegations – ranging from sexual harassment to rape – were first reported. Since then, more than 70 actresses and former employees of his studio, the Weinstein Company, have accused the producer of misconduct.

The German government will step in to refund customers of the local subsidiary of collapsed travel company Thomas Cook after the value of claims passed the limit of its insurance cover, according to a report from the country’s national broadcaster. Zurich Insurance has capped Thomas Cook’s liability at €110 million – however, the estimated total value of claims has already reached €287.4 million and is expected to climb higher. Zurich told Reuters that it would only refund 17.5% of customers’ claims.

Lorega has added dedicated services and Homeowners cover to its Cyber recovery insurance portfolio. In a statement, the Insurer said that the new additions will “help homeowners recover from cyber threats and attacks, email fraud, Cyber theft, and identity theft.”.

Global Risk Partners (GRP) has discussed a possible majority stake deal with three private equity providers according to reports. GRP was in talks with Searchlight and Apax Partners with Evercore leading the process. Cinven is believed to have withdrawn from talks. The consolidator was exploring sale and reinvestment options. It is believed current investors may be seeking to dilute their stake but not exit completely.

The Danish Financial Supervisory Authority (DFSA) has ordered Gefion Insurance to have liquid assets of at least €5m by the end of December 2019. A note from the regulator stated that “it considers the company has serious liquidity problems”.

The Central Bank of Ireland has ordered CBL Insurance Europe (CBLIE) to cease making claims payments with immediate effect. This follows an update from CBLIE’s Administrator on 6 December which the Central Bank said indicated a deteriorating financial position. The Insurer was ordered to stop writing business immediately on 20 February 2018.

Gibraltar-based Elite Insurance Company has been placed in administration and is no longer paying claims, according to the Financial Services Compensation Scheme (FSCS). The legal expenses specialist closed to new business with immediate effect on 5 July 2017 and has since been in run-off. The FSCS stated that it is stepping in to protect the majority of policies that Elite sold in the UK to individuals and small businesses.

Saffron Insurance has bought Cambridgeshire-based Broker and Broker Network member, Stuart & Co for an undisclosed sum. The move is Saffron’s sixth acquisition since Ethos Broking took a majority stake in the business in 2018 and its fourth this year.

The official launch of ARAG Legal Protection Limited has been announced, a company that they are sure will advance the benefits of Legal Expenses insurance throughout Ireland. Following the acquisition announced earlier this year, they have now received regulatory approval to launch ARAG in Ireland. The faces haven’t changed and they staying in Harcourt Street in Dublin.

 

Gallagher has announced that Aviation market specialist Neil Drowley has joined its global aerospace practice as Head of Policy Wordings. Drowley will be based in London, where he will lead Gallagher’s specialist wordings team and manage all phases of contract administration and wordings review.

AmTrust International has announced two key appointments to its claims team in London. The firm has promoted Tom Maloney to the role of Head of Claims for AmTrust International Specialty and Chief Claims Officer for AmTrust Europe. Meanwhile, Michael Walsh has been appointed Delegated Claims Manager under Maloney.

Open GI has announced that Chief Sales Officer David Kelly has decided to leave the tech provider. Kelly joined the business from Lloyds Banking Group in 2006. He previously held the role of Distribution Director at Open GI but was promoted to Chief Sales Officer in 2017.

Specialist Engineering and Construction Insurer HSB Engineering Insurance (HSB) has appointed Terry Dyson as Director of Business Development and Distribution, with immediate effect. Terry will be leading HSB’s business development team with a focus on further strengthening HSB’s distribution strategies and relationships with Brokers, MGAs and Insurer partners.

Dame Inga Beale, former CEO of Lloyd’s of London, has joined the management board of insurance law firm Clyde & Co. The firm has appointed Beale and former Grant Thornton US CEO Stephen Chipman as independent board members (the equivalent of Non-Executive Directors). This is the first time such a position has been created at the firm. Beale and Chipman will join the board January 01.

Saga, which specialises in products and services for people aged 50 and over, has announced the appointment of Euan Sutherland as Group Chief Executive Officer with effect from 6 January 2020. As previously reported, current boss Lance Batchelor is retiring and will continue as a Statutory Director until he leaves the business on 31 January 2020.

Allianz Insurance has appointed David Richards to the role of Director of IT. Reporting to Chief Operating Officer Stephanie Smith, David will be responsible for the delivery of all IT services.

AXIS Capital Holdings Limited (“AXIS”) has announced that Anne Melissa Dowling has been appointed to the Company’s Board of Directors, effective January 1, 2020. Ms. Dowling will serve as a member of the Company’s Audit, Corporate Governance and Nominating, and Finance Committees.

RSA’s UK & International Chief Claims Officer, Karl Helgesen, has been appointed as the new Chair of the Insurance Fraud Bureau (IFB). Helgesen replaces Aviva’s Rob Townend with immediate effect and will work alongside the IFB Board to support the delivery of the Bureau’s future strategy and provide strategic oversight of the Insurance Fraud Enforcement Department (IFED) and the Insurance Fraud Register (IFR).

James Wilson has been appointed as Premium Credit’s Chief Risk Officer with responsibility for leading the company’s legal, risk and compliance functions. He is a member of the Executive Team and reports directly to Chief Executive Tara Waite.

 
 

 

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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