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General Insurance Newsletter Friday 14th August 2020

14 Aug 2020

Specialty MGA Fiducia has developed a Nuclear, Biological, Chemical and Radiological (NBCR) terrorism product. The Leeds-based MGA has partnered with Lloyd’s syndicates to offer the new standalone policy, which will sit alongside its current terrorism product. The MGA said that terrorism experts had flagged the potential for an increase in NBCR terrorist attacks. 

Ageas has recorded a drop in its post-tax result of £22.6m and a slip in GWP from £609.5 to £603.8m for the first half of 2020. The COR deteriorated slightly to 97.8% (H1 2019: 96.6%). Excluding weather impacts the COR was 93.9% (2019: 96.6%). The provider said that COR improved over the second quarter as a result of reduced motor claims volumes but, while still sub 100%, has increased year on year as due to the Q1 2020 weather events.
In other news...SSP is pleased to announce the signing of a second insurer to the market-leading solution, SSP Intuition. Powered by Amazon Web Services (AWS), SSP Intuition is SSP’s centralised risk selection and rating data lake, providing access to more than one billion quotes and quote responses. Through it, Ageas will be able to access invaluable insight delivered by the solution, giving the company the ability to make even better-informed pricing decisions tailored to each risk.

If you think the saga surrounding Quindell – now Watchstone Group Plc – came to an end when a settlement agreement was reached with Slater and Gordon UK (S&G) last year, then you are mistaken. The two camps may have settled over the sale of Quindell’s professional services division (PSD) half a decade ago to S&G, but that didn’t stop Watchstone from going after accounting giant PwC through a new High Court claim. As reported in 2019, PwC is accused of leaking confidential information that purportedly impacted the PSD transaction.

It’s the turn of Berkshire Hathaway Specialty Insurance (BHSI) parent firm Berkshire Hathaway Inc. to reveal its interim financial results – and it’s a half-full/half-empty scenario, depending on what period you’re looking at. In the second quarter of 2020, the multinational conglomerate enjoyed US$26.30 billion (around £20.1 billion) in net earnings attributable to Berkshire shareholders – a major rebound from Q1’s US$49.75 billion attributable net loss. The amount also signifies a significant improvement from the earnings (US$14.07 billion) made in last year’s second quarter.

The Chartered Insurance Institute (CII) has teamed up with the Islamic Insurance Association of London on the launch of a new MBA in Islamic Finance. A two-year, part-time graduate degree, it will focus on commerce and management and the hope is that it will help insurance professionals with their career progression at organisations that follow Islamic principles. Applicants will need at least two years of relevant work experience and a UK honours degree, or equivalent.

Zurich UK has revealed a major new partnership, securing a deal with usage-based insurance specialist By Miles. The deal, which will run for five years, sees Zurich underwrite policies for the pay-by-mile firm, which targets drivers that are on the road travelling less than 7,000 miles over a year. Rather than paying a traditional annual premium, they get comprehensive cover with a low fixed amount upfront and then make payments monthly based on their actual mileage.

Football for Change UK, a new initiative aimed at aiding young people from disadvantaged communities, has been rolled out by Atlanta Group chief executive Ian Donaldson with the backing of Liverpool FC star Trent Alexander-Arnold, retired footballer Jamie Carragher, and Everton FC’s Anthony Gordon. Sponsored by Swinton Insurance, the collaborative undertaking unites business leaders and Premier League stars in offering support to talented young people who face economic and social barriers to fulfilling their potential, as well as providing grants to organisations helping school leavers in deprived areas of the north west.

Office email services have been used to impersonate and scam nearly 6,600 organisations so far this year, according to a study by email security firm Barracuda Networks. Barracuda found that 6,170 malicious accounts that have used Gmail, AOL and other services have been responsible for more than 100,000 business email compromise (BEC) attacks, which have impacted nearly 6,600 organisations. Since April 01, these malicious accounts have been responsible for 45% of all BEC attacks detected.

It’s been a record-breaking year for brokerage Lycetts Holding Ltd. The company has seen record revenues and a significant rise in profits – results it attributes to its investments across its operations, infrastructure and with the talent in the business.

The County Group, part of Global Risk Partners (GRP), has bought 100% of the share capital of CJN Insurance Services for an undisclosed sum. CJN is based in Tenbury Wells, Worcestershire, and was established over 60 years ago. It offers both personal and commercial lines insurance. The Broker has a team of seven and all, including directors Peter and Stephen Short, will move across to County following completion completion of the deal, remaining in the Tenbury Wells office. 
In other news...When it completed a swoop for CJN Insurance Services earlier this week, County Group noted that it had more deals in due diligence. We didn’t have to wait long to find out about one of those moves. The Global Risk Partners firm has today announced its 100% acquisition of Britannia Consultants Services Limited, the Northwich, Cheshire-based provider of commercial lines insurance.

The Competition and Markets Authority (CMA) has published an initial enforcement order as part of its investigation into Ardonagh Group’s deal to buy specialist motorcycle Broker Bennetts. Ardonagh confirmed it had completed the deal, which was first flagged in February, on 7 August after it received the necessary approvals from the Financial Conduct Authority. The order from the CMA requires Ardonagh to keep Bennetts separate from the rest of the business until the investigation is completed, ensuring that the competitive structure of the market is maintained.

Aston Lark, the Chartered insurance broker backed by Goldman Sachs, has announced the acquisition of Incepta Risk Management. Aston Lark detailed that Incepta is an established Lloyd’s Broker with a direct and wholesale proposition.  The Broker said that it has an appetite for UK commercial business developed through successful underwriting binders as well as effective open market broking. Incepta has nine staff based in Fenchurch Street, London.

Two will soon become one, as two major names in the Reinsurance world are set to combine their operations. A definitive agreement has been reached between Sirius International Insurance Group, a multi-line Insurer and Reinsurer, and Specialty Reinsurer Third Point Reinsurance Ltd, to combine in a stock and cash transaction. The combined firm will subsequently be renamed as SiriusPoint Ltd, with approximately US$3.3 billion of tangible capital. The deal will be financed by Third Point Re “through a combination of cash-on-hand; Third Point Re equity issued to Sirius Group shareholders; Third Point Re equity issued to Daniel S. Loeb, CEO and chief investment officer of Third Point LLC, and currently Third Point Re’s largest individual shareholder, pursuant to an agreement to purchase approximately US$50 million worth of SiriusPoint shares at closing; and if necessary, other debt or equity financing.”

Results season continues with the first-half numbers from M&G Plc, whose spin-off from Prudential Plc was completed last October, and boss John Foley has expressed confidence in the company’s resilience amid the extraordinary circumstances. For the six months ended June 30, the UK and European savings and investments business reported posting a £665 million profit before tax from continuing operations. In the same period last year, the corresponding figure stood at £1.4 billion.

A new capacity partnership has been struck between Kent-based MGA Gresham Underwriting and Covéa Insurance. The deal will see the Insurer provide capacity for both salons and retail shops under its packaged policy wording for an initial three-year period.

With a bump of £118,500, the NFU Mutual Charitable Trust has now taken its 2020 donations to an eye-catching £857,000. The rural Insurer has added further support for 11 charities in an effort to support a host of initiatives, ranging from providing support helplines to relieving rural poverty. 

It’s the turn of QBE Insurance Group to reveal its interim financial results – and in line with the forecast announced in July, the Sydney-headquartered global insurer plunged into the red for the first six months. In its half year report released this morning, QBE said it posted a net loss after tax of US$712 million (around £546 million) in H1. In the same period last year, the company enjoyed a net profit after tax of US$463 million.

Insurance claims for damages to ships, goods and the port of Beirut following a warehouse explosion there last week are likely to total less than US$250 million, according to an estimate from reinsurance Broker Guy Carpenter. Total insured losses, including property damage, from the August 4 event – in which more than 2,000 tons of ammonium nitrate exploded – could reach around US$3 billion, Reuters reported. The explosion killed at least at least 163 people and injured more than 6,000.

Global insured catastrophe losses totaled US$31 billion in the first half of 2020, driven mainly by secondary perils, according to a new report from the Swiss Re Institute. The institute estimated that global economic losses from natural catastrophes and man-made disasters totaled US$75 billion in the first half of the year – up from US$57 billion during H1 2019, but well below the 10-year average for first-half economic losses of US$112 billion. Of the H1 2020 economic losses, about 40% (US$31 billion) were covered by insurance. In the previous 10 years, first-half insured claims averaged US$36 billion annually, according to Swiss Re institute.

Lloyd’s of London Broker Costero Brokers Ltd., investors of which include US firm Heffernan Insurance Brokers, has acquired Prospect Insurance Brokers for an undisclosed sum. “It is fantastic to see Costero Brokers expanding with the purchase/merger of Prospect, to be part of the new initiatives going forward, and to be working collaboratively to create innovative solutions for clients in what is an ever-changing and challenging insurance market,” said Costero Brokers Executive Vice President Nick Murrell, who will be running the firm alongside Prospect Insurance Brokers Executive Vice President Jamie Webb.

Employees across Lycetts have had the opportunity to do their bit for charity, thanks to an employee grants scheme. The insurance Broker gave each employee the chance to nominate a charity of their choice and receive a £125 donation via MyGiving. Led by parent firm Ecclesiastical Insurance, it ultimately generated £25,000 for 140 fundraising organisations with 200 employees participating.

Extratropical cyclone Sabine – also known as Ciara or Elsa – caused €1,611 million in industry event losses, according to independent Zurich-based catastrophe insurance data provider PERILS. Extratropical cyclone Sabine impacted the British Isles, as well as Western and Central Europe, from February 09-11.

On the back of a 3% drop in its H1 2020 adjusted operating profit, global Insurer Prudential has revealed that it plans to spin off its US business Jackson to focus on Asia and Africa. According to the group, the full separation of Jackson will kick off with a minority IPO scheduled for the first half of 2021, followed by “full divestment” over time. Prudential’s operations in the US have cast a shadow over the company’s results for the first half of the year, with adjusted operating profit in the region coming in 19% lower because of market-related effects on the level of Deferred Acquisition Costs (DAC) amortisation, noted a press release. The spin-off will allow Prudential to put more of its efforts into Asia and Africa, which it calls its “high growth businesses.”

Mutual life insurance and pensions giant Royal London has found itself in the red for the first half of 2020. From a pre-tax profit of £397 million in the first six months of 2019, Royal London plummeted this year to a loss before tax of £181 million. The H1 hit was attributed to lower investment returns in the period, as well as higher liability valuations due to a reduction in discount rates used in valuing long-term business provisions.

Global average commercial insurance prices rose by 19% in the second quarter of 2020, according to a new report by Marsh. The increase, the largest since Marsh’s Global Insurance Market Index was released in 2012, follows average year-over-year increases of 14% in Q1 and 11% in the fourth quarter of 2019. Average price increases were driven primarily by increases in property insurance rates and financial and professional lines, Marsh reported. 

Direct Line Group has reported an improved combined operating ratio of 90.3% for the first half of 2020 (H1 2019: 92.5%). The provider, which owns NIG, stated that this was due to reduced claims frequency following the Covid-19 lockdown alongside the change in the Ogden rate to -0.25% in the first half of last year. However, the COR for the commercial division, which includes NIG and Direct Line for Business, deteriorated to 94.9% (H1 2019: 93.8%).

As it looks to improve its underwriting efficiency, CLS Risk Solutions has formed a partnership with HARNESS, which offers a PDFx solution. The idea is that the user interface can help unlock data from complex PDF documents and then put them into formats that allow for better analysis. According to the firms, the algorithms used allow for faster extraction of data and this can offer sizeable cost savings.

 

 

Coronavirus-related News

As the COVID-19 pandemic amplifies the acceleration of digital business models, Lloyd’s has expressed concern that intangible assets might become a major blind spot for businesses not factoring them into their risk models. Lloyd’s latest report, released in collaboration with KPMG, urges businesses to focus on the new risk landscape that has developed amid the pandemic and reminds the industry to protect intangible assets.

The COVID-19 pandemic has struck again, with another insurance giant left reeling from its impact. Zurich Insurance Group has released its interim 2020 results showing business operating profit of US$1.7 billion (around £1.29 billion) – a 40% drop from last year’s H1 result of US$2.8 billion (around £2.14 billion). A large chunk of this can be attributed to the impact of the coronavirus, which was attributed for US$686 million (around £524.4 million) of the fall.

These are certainly unusual times, but that hasn’t stopped the insurance industry adapting and finding solutions to its COVID-19 pandemic-caused problems. The latest among them is Allianz Insurance, which is now in the 12th year of its summer internship programme usually run across its branches in the UK. This time around, with social distancing rules taken into consideration, the insurer is doing things a little differently – and going virtual instead.

The Financial Conduct Authority (FCA) has extended measures to help protect customers under financial strain due to the pandemic until 31 October. The regulator published its new rules and guidance, which apply to insurance and premium finance firms, on 11 August. The measures were first implemented on 18 May and the regulator said on 24 July that it was seeking comments on proposals to extend this guidance.

The Association of British Insurers (ABI) has examined the impact of the coronavirus crisis in terms of death claims in the period March 01 to May 31, which is said to be the height of the pandemic. During the three-month span, according to data released by the ABI, about 7,000 life insurance claims were received by insurers who collectively paid £90 million to support the families of those who tragically passed away due to COVID-19.

With lockdown restrictions lifting, and businesses returning to a ‘new normal’, a specialist Insurer has created a roadmap to help them stay on track. Ecclesiastical has introduced a planning framework that includes tools designed to help businesses identify the risks and opportunities they face since the lifting of the COVID-19 lockdown. Some of the examples include checklists for cashflow issues, whether a lack of technology has hampered service delivery and how to keep stakeholders well informed.

 

Premium Credit has appointed Glen Murphy as Strategic Account Manager responsible for Affinity Partners. Murphy has a wealth of experience having worked in the insurance industry and exclusively for Aviva over the last 24 years, holding a number of senior roles. His main areas of focus have been Sales and Relationship Management. His most recent role at Aviva was Head of Strategic Partnerships in which he managed some of the largest distributors in the marketplace for both GI and Life products.

Marsh JLT Specialty will soon have a new UK placement leader. Making the switch in Q4 is Winsee Cheung, who will report to UK CEO Paul Moody. Currently the UK placement leader for the financial and professional practice, Cheung has enjoyed a 20-year career which includes joining Marsh back in 2006.

Having racked up nearly 18 years at The North of England P&I Association Limited, Helen Yiacoumis is ready to set sail on a new voyage. She will shortly join Skuld Piraeus as its Head of Freight, Demurrage and Defence – a challenge she is keen to capitalise on.

Cybersecurity service provider Lodestone Security, a subsidiary of Beazley, has announced the appointment of Frank Luzsicza as CEO. Luzsicza has more than two decades of experience in cybersecurity, technology and risk management. Prior to joining Lodestone, he served as Executive Vice President and member of the group executive council at TÜV Rheinland Group, where he was responsible for the firm’s global cybersecurity and digital services business. He has also served in various leadership positions at IBM Security.

Having established what is described as the UK’s “most LGBT+ friendly insurer”, it’s no surprise that Steve Wardlaw is going one step further outside his day job. The Chairman and Co-Founder of Emerald Life has been appointed to the advisory board at Terrence Higgins Trust, a HIV and sexual health charity.

Sedgwick, a global Provider of outsourced claims administration and risk management services to corporations, insurance companies and public entities, has announced a series of executive promotions, including the appointment of Mike Arbour as the company’s new CEO. Arbour, who most recently served as group president of global operations for Sedgwick, becomes the third ever chief executive in Sedgwick’s history. He takes the reins from Dave North who has led the company’s growth from US$50 million to over US$3.5 billion as Chairman, President and CEO for more than 25 years. Moving forward, North will continue to be active with the firm, retaining his position as Executive Chairman.

Arjun Ramdas is making the switch from Microsoft, where he served as the tech giant’s Practice Leader for consulting services in the UK, to join London-headquartered Charles Taylor on September 02 in his capacity as Chief Executive of Charles Taylor InsureTech.   

Pen Underwriting is continuing to bolster its claims ranks. With Billy Hinken taking the role of Head of Claims Operations, as announced in April, Alex Tinsley has now been brought into a new technical management role as Head of Technical Claims.

CNA Hardy has appointed Chris Gamber as its newest Medical Malpractice Underwriter, as part of the company’s specialist healthcare insurance team. Gamber – who will be based in London, England – will be responsible for building profitable growth across CNA Hardy’s healthcare business, on both the company’s and the Lloyd’s platform. He will accomplish this alongside Class Manager Louise Bett, the company said in a release.

As Citynet Insurance Brokers looks to expand its Motor Fleet operation, the wholesale Broker has brought in a familiar face. The company has turned to Simon Fitter, who will now take on the role of Account Executive. Fitter, who has been in the industry since 1985, was originally an Underwriter with Paladin Motor Policies, before later holding senior positions with the likes of Markel, Newline and Brit. Most recently, he was Head of Motor for Direct Insurance London Markets, a position he had held since 2013.

There is a new member of the board at Tokio Marine Kiln Syndicates. The company has welcome Valerie Gordon-Walker as an Independent Non-Executive Director. Gordon-Walker, who has held Managing Director, Executive Committee Member and Group Head of People roles across a range of industries, said she is looking forward to her latest challenge.

S & G Risk Solutions has hired Jaimie Quill as Group Broking Director, effective from 10 August. Brett Sainty, owner of S & G, explained that the role is a shareholding directorship. Quill most recently worked at Miles Smith where he was a Senior Broker. He has also previously held the role of Senior Broker at Direct Insurance London Market.

Cobra London Markets latest acquisition is Tom Shipston, who joins as a Head of Property & Casualty. He previously worked at RK Harrison where he learned the basics of broking and after four years he went on to found his own brokerage, a wholesale operation which was acquired by a larger Broker.

Allianz Holdings appoints Julie Harrison to the role of chief HR officer Reporting to Jon Dye, Allianz Holdings CEO, Harrison will lead the HR function across Allianz Insurance and LV General Insurance.

American International Group (AIG) has tapped David McElroy to lead the general insurance executive leadership team at AIG. McElroy, who currently serves as President and Chief Executive of the North American operations of the company’s general insurance business, is taking on the roles of general insurance CEO and AIG Executive Vice President with immediate effect.

There is a new Senior Broker at New Dawn Risk. The insurance intermediary has brought in Charlie Mills to take his place in the Management Liability and Financial Institutions team.

 

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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