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General Insurance Newsletter Friday 14th December 2018

14 Dec 2018

Insurance News

The insurance sector and lawyers have welcomed the beginning of a review process into how the discount rate, also known as the Ogden rate, is determined. The Lord Chancellor and Secretary of State for Justice, David Gauke, issued a call for evidence from experts about how the rate is set kicking off a process which is expected to complete in the second quarter of 2019. A final decision is due 140 days from the Civil Liability Bill, which includes detail on the discount rate, gaining assent. The Bill, is due to be passed into law before Christmas which means that there should be an announcement in April/May time next year.

Brightside Group is looking to boost its 150,000+ policy count across car, van and SME to 300,000+ within three to five years, according to CEO Brendan McCafferty. “It is perfectly doable,” he told explaining that the target was to grow gross written premium from £100m to around £250m in the same time frame, excluding managing general agent (MGA) business. McCafferty listed the ingredients for a successful Broker as scale, a niche place in the market and having a digital agenda.

Zurich-owned Oak Underwriting has updated its Household product to include more Cyber cover as standard. The Insurer explained that Cybercrime and Cyber Legal Defence Protection had been added to the existing Cyber Assistance cover. The policy now protects against losses from fraud, telephone hacking and ransom resulting from a cyber-attack.

Gallagher has completed its fourth deal of 2018 by buying Pavey Group for an undisclosed sum. According to a statement Graham Brown, Pavey Group Managing Director, will remain with the business and the Broker. Additionally, its team of 83 staff will continue to operate from its locations in Torquay, Exeter, Holsworthy and Highbridge. Pavey Group, which will become part of Gallagher’s retail division, specialises in commercial businesses, care facilities, charities, construction, manufacturing, agricultural and leisure sectors. The Pavey Group name will also remain. Gallagher’s CEO UK of retail, Michael Rea said: “Pavey will be kept for the foreseeable future. It has resonance in the West Country, but we will attach it to Gallagher.” Rea said the deal fitted well with Gallagher in terms of business lines and culture.

Fusion’s sports, leisure and entertainment (SLE) team has moved across to Geo Specialty, part of Geo Underwriting, for the launch of a new unit. The changeover came just over a month after the Ardonagh Group agreed to sell its Commercial Managing General Agent (MGA) businesses – including Fusion – to Arch UK Holdings for up to £31m. A spokesperson for Ardonagh confirmed that the SLE team were identified and ring-fenced from the deal with Arch.

British Insurance-linked Securities (ILS) Fund Manager Securis Investment Partners LLP, which in October pointed to profit woes, is about to say goodbye to its excess and surplus (E&S) Property insurance partner StarStone. Come next year, the two will no longer collaborate on E&S Property risks.

Leeds-headquartered Gauntlet, which is celebrating its 25th anniversary in 2019, has established a southern office – tapping former Wrightsure Associate Director Mark Monk as the Appointed Representative (AR) principal accelerates its Bus and Coach insurance offering. Monk, whose 30 years of industry experience includes handling a client portfolio comprising a book of business worth £1.3 million, will head the Gauntlet Hallmark office in Orsett and serve as an AR of the commercial insurance Broker. The office is the first southern hub for Gauntlet and it is hoped that in time more staff will join Monk with two additional staff expected to come on board before the end of next year.

VIBE Syndicate Management (VIBE) – which is now transitioning to being organised into VIBE Insurance and VIBE Reinsurance – has stopped underwriting new Direct and Facultative (D&F) open-market Property insurance, substantially reducing underwriting for the 2019 year of account. The Lloyd’s managing agent, however, will continue to underwrite its delegated Property portfolio under the management of Mark Herget. Property D&F head Ed Pomeroy left the company last month.

It’s all systems go for CNA Hardy’s Brexit plan. CNA Insurance Company Limited (CICL), which will continue to be based in London, has received approval from the High Court of England & Wales to transfer its European business to CNA Insurance Company (Europe) S.A. (CICE) ahead of the UK’s departure from the European Union. The new Luxembourg-headquartered subsidiary will have seven branches across the continent.

Promoting a proactive security culture within the vehicle rental industry and individual firms – that is what the UK’s Department for Transport (DfT) is striving towards, as it rolls out the Rental Vehicle Security Scheme (RVSS) to mitigate the risk of vehicles being used in terrorist attacks. Applicable to vehicle rental companies which engage in short-term (not more than three months and typically calibrated on an hourly, daily, or weekly basis) vehicle rental transactions to consumers, RVSS will be monitored by the Rental Vehicle Industry Security Advisory Group.

Arthur J. Gallagher & Co. has acquired several assets from independent insurance and reinsurance Broker Boston Marks Group (BMG). Specifically, Gallagher has snapped up Boston Marks Insurance NZ in New Zealand, BMG Aviation in Australia and the book of business of Boston Marks Insurance Brokers in the UK. Terms of the transaction were not disclosed.

It’s a done deal for Helios Underwriting Plc and Advantage DCP Limited. The Lloyd’s of London market participant has completed its latest acquisition, after securing Lloyd’s approval for the change of control. Advantage, the snapped-up firm, is a limited liability member of the insurance market.

Mark Tucker, the Non-Executive Group Chairman of London-headquartered HSBC, is about to take on a similar role at an Insurer. The seasoned Executive, who was group Chief Executive of Prudential Plc from 2005 to 2009 and of AIA Group Limited from 2010 to 2017, has been named as independent Non-Executive Chair and Director at Insurer Discovery. Tucker is succeeding Monty Hilkowitz, who is retiring at the end of February 2019.

Liberty Specialty Markets (LSM), part of Liberty Mutual Insurance Group, has announced plans to integrate its Ironshore Bermuda businesses and brands into a single business, branded as Liberty Specialty Markets Bermuda. The new business will be headed up by Steve Horton, who currently serves as the Chief Executive of Iron-Starr Excess Agency. Horton will become President of Liberty Specialty Markets Bermuda (subject to approval by the Bermuda Department of Immigration) and will report to Mark Wheeler, President of International Markets.

Specialty Insurer Beazley has announced that it estimates that it will take a US$40 million hit (around £31 million), net of reinsurance, from the California wildfires, according to a Reuters report. The massive fires burned 240 square miles last month, forcing the evacuation of more than 50,000 people, according to The Independent. The fires destroyed thousands of homes and killed dozens of people.

In other news... Specialist Insurer Beazley has launched a cyber and breach response portal that provides exclusive access to risk management information and risk mitigation tools for Beazley Breach Response (BBR) policyholders in the UK, France, Spain and Italy. Beazley’s international breach response team has developed a set of training materials, incident response planning and risk assessment tools, designed to help organisations prepare for a cyber incident or data breach. The materials are available in English, French, Spanish and Italian and can be sold via Brokers.

Almost 80% (78%) of insurance customers agreed that preventing providers charging a higher price for renewals than new business was a “good idea”, according to a survey by Consumer Intelligence. Fifty percent of respondents branded the practice of dual pricing as “exploitative”. The research followed the launch of the Financial Conduct Authority’s investigation into pricing in the Home and Motor market.

Real Estate specialist Broker Property Insurance Initiatives (Pii) has been purchased by Stackhouse Poland for an undisclosed sum. It is the latest in a string of deals this year for Stackhouse Poland which also recently purchased Honour Point, Caprica Healthcare, Symmetry Private Insurance and Title & Covenant Brokers. In the summer group CEO Tim Johnson promised that more buys were on the horizon for the Broker which also entered into a deal process with Lucas Fettes in 2016 and E Coleman & Son and Quantum Underwriting Solutions in 2017.

Now in its second year, AIG’s European Environmental Impairment Liability (EIL) claims intelligence report reflects some important environmental loss themes, with implications for companies of all sizes and from all industry sectors. A rise in fire-related environmental damage claims and losses relating to improper construction and demolition (C&D) waste management practices are amongst the trends reflected in this year’s claims statistics.

Premium Credit, the UK and Ireland’s number one premium finance provider, has received Continuing Professional Development (CPD) accreditation for its Capability Team recognising the success of its sales training for insurance Brokers. The sales training, provided free of charge, is a modular course, focusing on key sales skills such as building rapport, establishing customer needs and closing the sale, all brought to life through relevant premium finance examples. This helps improve the compliant, consistent and efficient offering of finance to Brokers’ customers choosing to pay their insurance premiums in instalments.

In February it was reported that Buzzvault was to be rolled out in the third quarter. After moving its consumer launch a couple of times, the Home insurance disruptor has now officially opened its doors.

Adelaïde, the family holding group behind ICB and Finch Insurance Brokers, is targeting €500m (£450m) in revenue by 2022 more than doubling its present €200m base. The group currently includes Verlingue – which bought Finch in 2007 and ICB this August – French Broker Génération and InsurTech firm Coverlife, has 1,800 employees across Europe covering €2bn in premiums for 2,000 companies. It committed to a programme of acquisitions in Europe, listing the UK, Germany, Switzerland and Italy as priorities for its international expansion to hit the growth target.

Turnover and profits rise at Circle Insurance Services as the Broker sees progress across the board. “Hard work,” was behind the 10% rise in turnover and 23% jump in post-tax profit according to group Chairman Tony Norcott. The company saw turnover hit £7.13m with profit coming in at £131,003 for the year ended 30 April 2018.

Managing General Agent (MGA) Fiducia no longer has capacity from Hiscox for its Marine Cargo proposition. According to the MGA’s CEO, Gerry Sheehy, Hiscox used to lead on its Cargo offering with Travelers and Axis also providing capacity. However, when Fiducia sought to renew the arrangement on the same terms Hiscox came back with a reduced offer.

Sky News has revealed that Legal & General has appointed Fenchurch Advisory Partners to explore the sale of its general insurance operations. A spokesperson for the Insurer said that the company would not be commenting on the report. According to the article the price tag on the disposal could be north of £300m.

Market Movers and Shakers

High-profile industry figure Paul Ragan, who appeared twice on Channel 4’s Secret Millionaire, has landed a huge role at The Plan Group. “Ragan has been consulting with Plan’s board since the turn of the year and has helped to formulate a detailed acquisition strategy,” said the firm, which wants to become a top 50 Broker in the UK. “As the prospecting phase generated several ongoing opportunities, the board moved quickly to secure his services on a continuing basis.”

Jo Kendall has made the switch from Willis Re, where she led the London specialty catastrophe modelling team, to global reinsurance, wholesale and specialty Broker Ed. Appointed as Head of Catastrophe and Exposure Management, Kendall brings 15 years of industry experience which includes time spent at Aon. She will report to group Chief Actuary Jonathan Tilman. 

RSA Group Plc announces the appointment of Mark Marshall as Managing Director of RSA’s subsidiary, Insurance Corporation of the Channel Islands (ICCI), subject to regulatory approval. Mark joins from RSA Group where he has spent the last two years leading RSA’s strategic response to Brexit. Prior to this Mark was the Finance Director for RSA’s European Business having held leadership roles since 2010. 

Hyperion Insurance Group has announced that Richard Houghton will join the business as Interim Group Chief Financial Officer, effective 10 December 2018.  Houghton will undertake a full handover from Oliver Corbett, before Corbett leaves the Group later this month. 

Swiss Re Corporate Solutions appoints Philippe Aerni as Global Head Casualty, Financial and Professional Lines, effective 1 January 2019. In this expanded role, Mr. Aerni will be responsible for products and global markets for these two lines of business. Based in Zurich, he will assume the Global Casualty role from Daniel Vetter, who has been appointed Head E&S North America. Philippe will oversee a team of business leaders, Underwriters and roduct Managers around the world.

It’s all change at Royal London. After the Insurer announced a new chair, it has now revealed that its group CEO Phil Loney is to depart at the end of 2019. In a statement the company outlined that Loney would be moving on to concentrate on “long-standing charitable interests” – particularly focused on supporting people with learning difficulties and the international development sector.

In other news... Standard Life Aberdeen (SLA) Senior Independent Director Kevin Parry OBE has been officially announced this morning as the new Chairman of Royal London as of January 01, 2019, pending regulatory approval. The life and pensions business announced Rupert Pennant-Rea’s successor with the present Chairman having held the role since 2013.    

Broker Network members are “very surprised” at the departure of Andy Fairchild and praised him for transforming the business and taking it back to its roots with a focus on helping Brokers. The Brokers were responding to the news that the Chief Executive Officer (CEO) had left the business with immediate effect after four and a half years at the helm.

Allianz Care, the international health brand of Allianz Partners, has recruited Seasoned Executives Paul Halfyear and Kai Großheim. Halfyear, who brings nearly three decades of insurance industry experience to the global team, will lead Allianz Care’s work in Qatar in his capacity as General Manager. He has worked in a variety of roles in the Middle Eastern country as well as in the UK.

Just over two years ago Marshall Wooldridge was snapped up by Global Risk Partners (GRP)… now the Chartered insurance Broker enters another chapter with the arrival of a new Managing Director as James Hall moves up to the role of CEO.

Lockton has announced the appointment of Byron Clymer as its Chief Information Officer. In his new role, Clymer will oversee strategic information-technology initiatives for the company. He will report to Said Taiym, Lockton’s Chief Digital Officer.

AXIS Insurance, the insurance business segment of AXIS Capital Holdings, has announced the hiring of Andrew Maher as Senior Cyber Underwriter. Maher will be based in London and will report to Dan Trueman, Global Head of Cyber and Technology at AXIS.

RFIB Group Limited has appointed a Managing Director for its restructured specialty business. Kevin Stratton – who most recently served as Global Head of Accident, Life and Health at Willis Re – will take on the MD role on January 01 2019. He brings three decades of industry experience to the Lloyd’s insurance and reinsurance Broker. 

Willis Towers Watson (WTW) has appointed two executives to fill roles in the company’s regional P&C arms. The global advisory, broking and solutions company has named Tom Rowley senior vice-president of North American Property and Matt Harvey as Senior Vice-President of International Property.

All information provided in this Market Digest has been gathered from multiple General Insurance Media sources and individual company press releases.

Meet our specialist General Insurance team here.

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