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General Insurance Newsletter Friday 15th March 2019

15 Mar 2019

Insurance News

Brunel Insurance Brokers has bought the South West-based Glentworth Insurance Services for an undisclosed sum in a move which adds 25 people to Brunel’s workforce. Glentworth will continue to trade as Glentworth Insurance Services from its existing offices, in order to ensure continuity of service for its clients whilst at the same time allowing access to the wider range of Insurers that the merger with Brunel will bring. Glentworth brings about £10m GWP to the Brunel Group.

The Financial Conduct Authority has confirmed that the Financial Ombudsman Service (FOS) will soon be able to require financial services firms to pay significantly more compensation to consumers and businesses. From 1 April, the current £150,000 limit will increase to £350,000 for complaints about actions by firms on or after that date. For complaints about actions before 1 April 2019 that are referred to the FOS after that date, the limit will rise to £160,000.

In other news...The Financial Conduct Authority has fined The Carphone Warehouse £29.1m for failings that led to the miss-selling of a mobile phone insurance and technical support product. The regulator noted that its investigation had stemmed from whistleblowing reports. The FCA found that The Carphone Warehouse had failed to give its staff the right training to give suitable advice to customers purchasing the product named ’Geek Squad’. 

Adler Insurance Group is set to buy the general insurance assets of Coventry-based chartered Broker Corrigans. The deal, set to go through on 1 June 2019 this year is for an undisclosed sum and subject to regulatory approval. The acquisition is Adler Insurance’s fourth in three years.

Enterprise Insurance’s claims bill has increased to £157.1m. A liquidator’s report revealed that the business, which went into administration in 2016, originally expected claims in the region of £55.7m. It has been detailed that the reduction of the discount rate meant that twelve high value claims shot up in value by a total of £25.9m.

The first Day of Giving in 2018 raised enough funding for a study into a new cure at the Dementia Research Institute. 12 insurance firms have already committed to support the 2019 day. The Insurance Day of Giving will take place on Thursday 7 November 2019.

Global insurance brokerage and risk management firm Willis Towers Watson has announced it is the insurance Broker for Ethiopian Airlines, according to a Reuters report. The announcement was made by a WTW spokeswoman on Monday, just hours after a Boeing Co. 737 Max operated by Ethiopian Airlines plunged to the ground shortly after take-off from Addis Ababa in Ethiopia, killing all 157 people on board.

It looks like last month’s release of a nearly 6,700-word long letter from Voce Capital Management LLC was just the beginning of the tussle between Argo Group International Holdings, Ltd. and its activist shareholder. The US-based investment adviser has now put forward its board nominees, which it described as having “the right mix of domestic and international insurance industry experience, corporate governance credibility, and track records of successful capital allocation oversight to help ‘right the ship’ at Argo.” Also, Voce has unveiled a dedicated website called Argo-SOS for its ‘shareholder value’ campaign against the Bermuda-headquartered underwriter. In a statement, it added: “In the nearly two weeks since our public letter, the company has failed to meaningfully address a single one of the many examples of misuse of corporate assets that we painstakingly researched and chronicled.”

Zurich Insurance Group’s CEO will be eligible for a 13.4 million Swiss franc (around £10.2 million) payout when his shares are unlocked next month. Shares worth about 8.2 million francs, granted to CEO Mario Greco as part of a company incentive program, will vest in April, raising the Executive’s 2018 compensation to $13.3 million (around £10.2 million), according to a Reuters report. Greco has overseen robust growth at Zurich since he joined from Generali in 2016, Reuters reported. Under his watch, Zurich’s share price has risen by nearly 50%. Earlier this year, the Insurer announced a dividend increase after a 24% spike in annual profits.

Lockton has announced the formation of Lockton Global Re, a new global reinsurance business. The new venture will be led by a team including Tim Gardner, current CEO of North America operations for Guy Carpenter; Claude Yoder, current Managing Director and Global Chief Innovation and Product Development Officer for Guy Carpenter and Nick Durant, current President of Marsh Captive Solutions. The new business will be a major build-out of Lockton’s reinsurance capabilities and will incorporate Lockton’s London-based specialty team. Reinsurance is a key pillar of Lockton’s aggressive growth plan, the company said.

Munich Re-owned ERGO Group AG – which is made up of ERGO Deutschland, ERGO International and ERGO Digital Ventures – has sold four ERGO International subsidiaries to the Euroins Insurance Group (EIG) for an undisclosed amount. Subject to regulatory approval, the sale involves ERGO’s life and non-life subsidiaries in Romania and the Czech Republic as well as its non-life company in Belarus. In 2017 they had a combined gross written premium of €72 million.

The Association of British Insurers (ABI) has welcomed its newest and biggest associate member; technology goliath IBM, which “currently works with 99 of the top 100 insurance companies around the world,” according to IBM Global Business Services (UK and Ireland) Vice President for insurance Angela Magee.

The Competition and Markets Authority has set up a committee to examine the implementation of recommendations it made in response to the Citizens Advice super-complaint about the customer loyalty penalty. An update from the CMA noted: “Following the publication of the CMA’s response to the loyalty penalty super-complaint, the CMA has set up a working group to oversee the implementation of recommendations made by the CMA."

Gallagher is pursuing legal action against Ardonagh, accusing it of poaching staff and business. Ardonagh Group CEO David Ross left Gallagher for Towergate and was sued by his former company in 2015 in a suit that was eventually settled. Gallagher contend that the experience “left Mr Ross bitter and intent on revenge by taking employees (and with them clients) to harm Gallagher”. Its argument sets out that, beginning in June 2017, seven employees resigned from Alesco’s energy division, later joining Ardonagh as part of a plan to establish an energy team codenamed Project Duracell. An Ardonagh spokesperson said: “The lawsuit brought by Arthur J Gallagher and Alesco is denied in its entirety. We consider the claims misconceived, and they will be robustly defended at trial." 

Axa Commercial is set to open two new SME trading centres in a move which puts 106 roles at risk of redundancy. The provider is set to develop two SME centres in Bolton and Ipswich and claimed the move will “promote underwriting efficiency and consistency of Broker service to remain competitive in a key area of the market”. The SME trading centres will deal with renewal business and mid-terms adjustments for SME policies, which are currently serviced regionally across 12 branches, providing a more consistent and efficient experience for Brokers.

Aviva has grown in every line of business it has with Brokers, according to Phil Bayles, Managing Director, intermediaries at Aviva UK. Bayles told Insurance Age: “We’re growing in Broker Personal Lines and in SME specifically and in global corporate business as well. Everything we do with Brokers is heading in the same direction.”

April 30 will see the launch of Managing General Agent (MGA) Cybercovered.com in London. Already open for business ahead of its official unveiling, the online MGA caters to small and medium-sized enterprises (SMEs) in the UK who often do not have a dedicated IT department and are increasingly being targeted by cybercriminals.

Susan Pain, the former Medical Money Management (General Insurance Brokers) Limited Director previously made numerous bogus claims including one that involved a non-existent daughter. Now the imprisoned fraudster must pay up or risk further jail time. Susan, who in 2018 was handed down a two-year prison sentence for fraud by false representation, has been hit by a confiscation order under the Proceeds of Crime Act. The confiscation proceedings were instigated by the City of London Police’s Insurance Fraud Enforcement Department (IFED) following the fraud conviction.

H&H Insurance Brokers, which arranges a broad portfolio of insurances for the likes of farmers and agricultural contractors, has tapped what seems to be a ‘triple threat’ hire in the form of Dylan Jones. First off, the new HHIB Account Executive brings first-hand perspective having grown in his family’s dairy farm in South Wales. Jones also holds not only a Certificate in Insurance but also a BSc in Agriculture with Business and has worked at the likes of NWF Agriculture and NFU Mutual.

If Sky News sources are to be believed, it looks like the Kent-headquartered enterprise Saga Plc is exploring the possibility of letting go of its leisure businesses Titan Travel and Destinology. Consultancy firm Duff & Phelps has reportedly been called in to see whether there are likely takers for the non-Saga brands. Titan Travel specialises in escorted tours while Destinology provides luxury holidays. Combined, the two could rack up a sale price of £100 million, according to sources cited by Sky News.

 


Market Movers and Shakers

AXA UK & Ireland has made some management changes to make things simple for the benefit of its customers. Firstly newly appointed Chief Operating Officer Shali Vasudeva – in line with leading the previously announced simplification programme and a transformation office – is now in charge of the IT, customer insight, digital, procurement and property business areas. The realignment will also see the strategy, brand, and communications functions as well as customer proposition and innovation fall under the oversight of the Chief Executive’s office. AXA PPP healthcare finance director Amber Wilkinson has been tapped to manage these areas. Appointed as Chief of Staff to AXA UK & Ireland CEO Claudio Gienal, Wilkinson will be in charge of the AXA brand’s reputation in the UK and Ireland and leading the unit’s ‘Beyond 2020’ strategy effective April 01. Meanwhile Chief Customer and Innovation Officer Darrell Sansom will be assuming a new position involving plans to diversify the Irish business. He will be working with AXA Ireland Chief Executive Phil Bradley.

Chartered Insurance Broker Chris Fitzgerald FCII and Lisa Petherick ACII have joined Insurtech Konsileo. The veteran Brokers, who each bring decades of industry experience, will serve as Client Directors for Liverpool and Warrington, respectively. A Cyber insurance expert, Fitzgerald spent time at the likes of PIB Insurance Brokers, JLT, Astbury Wren, Fish Corporate, as well as his own insurance broking business FRD Risk Solutions. Petherick, meanwhile, was Operations Director and Board Member at Broker Assistance.

Carlisle based, H&H Insurance Brokers, one of the largest, specialist independent insurance Brokers in the UK, have further expanded their team and services by announcing the appointment of Dylan Jones as Account Executive. Covering the southern area of Cumbria, including Kirkby Stephen, Dylan’s role will include assisting existing and prospective customers with professional expertise, identifying new business and introducing and promoting new products and policies.

ArgoGlobal, the Lloyd’s Insurer and Member of Argo Group, has announced the appointment of Alfredo Alonso as Chief Underwriting Officer for Europe, Middle East and Asia. Alonso takes up his London-based role in March 2019; he will report to Matt Harris, Group Head of International Operations.

RSA have announced their Broker Leader Programme Class of 2019, which UK Chief Executive Scott Egan is confident “will go on to do great things in the industry.” Following an intensive six-month training programme, 10 promising participants from RSA’s key broking partners have gained skills such as business planning, strategy development, leader communications and change management. These are Nick Ellis of Alan & Thomas Insurance; Laura Davies, Aston Lark; Allan Wheeldon and Philippa Leake, Towergate; Paul Worton, Jelf; Marsha Matthew, SEIB; Paul Huntley, Erskine Murray; Amy King, Basil Fry; Joe Perry, Sutton Wilson; and Howden’s Emma Tildesley.

The London team of Berkshire Hathaway Specialty Insurance has received further boost with the arrival of two senior hires. Pedro Mairos, who most recently served as UK Deputy Chief Underwriting Officer and UK Branch Marine Cargo Underwriting Head at AXA Corporate Solutions, has been tapped to become BHSI’s Head of Marine for the UK and Ireland. His nearly two decades of experience in Marine insurance includes time spent in Paris, Hong Kong and Dubai.

 

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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