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General Insurance Newsletter Friday 15th May 2020

15 May 2020

Global Speciality Insurer and Reinsurer Brit Limited (Brit) has announced its plans to collaborate with Google Cloud to launch Ki – the first fully digital and algorithmically driven Lloyd’s of London syndicate. Ki will operate as a standalone business and aims to redefine the commercial insurance market as a “follow-only” syndicate and will be launched in 2021. Ki’s algorithm will evaluate Lloyd’s policies and automatically quote for business through a digital platform that brokers can access directly. It aims to significantly reduce the amount of time and effort that it takes for Brokers to place their follow capacity. Ki will follow several ‘nominated’ lead syndicates across the Lloyd’s market, including Brit, and will offer Brokers a line on every risk in the selected classes led by these markets.

Specialist insurance Provider CFC has announced the release of a new product for licensing-agreement Liability. The new product expands on CFC’s suite of insurance products for media and intellectual property. The global licensing industry is worth an estimated $280 billion, and is rapidly expanding as brand owners increasingly monetise intellectual-property assets – including logos, trademarks, graphics and animations – through third parties.

American International Group UK Limited (AIG UK) – which started writing business in December 2018 after AIG Europe Limited was split into AIG UK and AIG Europe SA ahead of Brexit – has now published its first set of full-year financial results. For the year ended November 30, 2019, the London-based operation posted a pre-tax profit of £186.4 million. Its underwriting result amounted to £44.9 million, while its combined ratio stood at 96.4%.

AXIS Capital Holdings Limited has announced that its Board of Directors has declared a quarterly dividend of $0.41 per common share payable on July 15, 2020, to shareholders of record at the close of business on June 29, 2020. In addition, the Board declared a dividend of $34.375 per Series E 5.50% Preferred Share (equivalent to $0.34375 per depositary share) payable on July 15, 2020, to shareholders of record at the close of business on June 29, 2020.

“We will miss his passion, his prudence, and his clear thinking.” Those were the words of Group Chief Executive Mario Greco, when Zurich Insurance Group announced “with great sadness” the passing of Honorary Chairman Fritz Gerber, whose career at the Insurer spanned nearly four decades. Gerber, who was born in March 1929, passed away on May 10. The company veteran came onboard Zurich in 1958 and served as CEO from 1974 to 1991 as well as chair between 1977 and 1995. He had been Honorary Chairman ever since.

PartnerRe, which reported a net loss attributable to common shareholders of US$433 million (around £353.1 million) for the first quarter of 2020, will no longer be acquired by Covéa. In a brief statement, the French mutual insurance group said: “In light of the current unprecedented conditions and significant uncertainties threatening the global economic outlook, Covéa has indicated to Exor that the context does not allow the contemplated acquisition of PartnerRe to be carried out on the terms initially envisaged.”

With the Travel Medical scheme offered by AllClear proving popular with British Insurance Brokers’ Association (BIBA) members, it has now been renewed. Originally launched in 2011, the scheme provides specialist cover for customers who typically struggle to get Travel insurance because of age or pre-existing medical conditions.

Ageas UK has fallen into the red in the first quarter of 2020, not because of the coronavirus pandemic but due to storms Ciara and Dennis. The two weather events translated to an impact of £23.5 million across the general Insurer’s Home, Motor, and Commercial lines of business. As a result, Ageas UK suffered a £2.7 million net loss in the first three months of the year. In the same period in 2019, the firm enjoyed a net income of £12.4 million. Without weather in the picture, the Ageas Group subsidiary would have posted a combined operating ratio (COR) of 98.7% instead of the actual COR of 107.1%. Broken down into segments, Household’s COR in the quarter was 112.3%; Motor, 103.5%; and Travel & Other, 114.5%.

When it comes to planning for the future, many of us put our finances on the backburner, focusing on what we need and want now – potentially leaving ourselves short at a time of life when income does not flow so freely. With that in mind, the Chartered Insurance Institute (CII) has decided to look at how people can build better financial resilience in later life in the next stage of its Insuring Futures initiative. It is calling on anyone working within the insurance sector, or the personal finance profession, who can help identify the actions that should be taken to build and maintain independence. This can include the kind of conversations needed with friends and family, how we design products and communications for older people, how professionals can structure conversations with clients that are relevant to their aims, and how they can offer advice to the whole family rather than simply an individual.

Unfriend Coal – a global network of NGOs and social movements appealing for insurance companies to divest out of the fossil fuel business – has called out major insurance companies Lloyd’s, Zurich, and Munich Re for providing hundreds of millions in Liability insurance coverage to the Trans Mountain pipeline project. The environmental group’s statement comes after the pipeline project’s certificate of insurance was filed with the Canada Energy Regulator on April 24, 2020. The certificate outlined the providers of $508 million of Liability insurance cover for the 12 months to August 31, 2020 – it also revealed that the biggest Insurers of the project are the aforementioned three companies.

BIBA members are reminded that the limits for the Professional Liability insurance that they are required to hold will be increasing from 12 June 2020. Article 10(7) of the Insurance Distribution Directive requires the European Insurance and Occupational Pensions Authority (EIOPA) to review the base amounts for Professional Indemnity insurance and financial capacity of insurance and reinsurance intermediaries every five years to take into account the changes to the European index of consumer prices as published by Eurostat.  This increased by 4.03% over the period 1 January 2013 through to 31 December 2017, which means that the base amount in euro is required to be adjusted upwards by the percentage change in that index.

The Department of Computer Science at Oxford University and AXIS Insurance, a business segment of AXIS Capital Holdings Limited has announced the publication of a white paper titled “Calculating residual cyber-risk” which explores alternative methods of quantifying cyber-Risk. With the publication of this study, Oxford and AXIS invest in the advancement of cyber-risk modelling across cyberthreats to better anticipate, prepare and improve overall Cyber resilience.

AXA extends its Covid-19 unoccupancy definition to 90 days. Temporary business closures have increased the number of buildings which are unoccupied. These are normally at much higher risk of damage/loss than when occupied, from water damage, arson, theft etc. The standard AXA policies would define a building as unoccupied if empty, or not being fully utilised for business purposes, for a period in excess of 30 days

Aviva has announced the launch of its online scam reporting service, reinforcing its long-standing commitment to keeping customers and their money secure at a time when financial scams are on the rise. The launch of the online reporting tool will allow people to actively report suspected fraudulent activity in order to receive personal guidance on what action to take. Aviva has launched its new service at a time when consumers appear to be experiencing a dramatic increase in attempted scams, particularly those which use coronavirus as the hook to entice potential victims. Action Fraud, the UK’s national reporting centre for fraud and cybercrime, reported a 400% increase in coronavirus-related fraud reports from February to March*.


Coronavirus-related News

The Covid Claims Group has sent an open letter to the Association of British Insurers stating that the “UK insurance industry is failing small and medium businesses at their moment of need” by denying Covid-19 Business Interruption claims.

Airmic, the UK association for risk and insurance professionals, has urged the insurance market to adopt a more responsible and business sensitive position on the Covid-19 pandemic or risk long-term damage to trust and reputation and loss of customers. In a statement, the association said: “With many corporates facing an existential threat from global governments’ lockdown measures and a deep recession likely to follow, we expect Brokers and Insurers to demonstrate fairness and flexibility with regards to claims and renewals.

The British Dental Association (BDA) has appointed law firm Brown Rudnick LLP to look at its members’ insurance policies after the “vast majority” of dentists’ Business Interruption claims were rejected. The BDA stated that is was directly taking urgent action to help members that had been “blindsided by a lack of effective insurance response”. It explained that it is now working with grassroots BDA members who have organised on social media to gather relevant evidence on the full range of policies in the sector.

Lloyd’s, one of the world’s leading Reinsurance markets, has announced it will pay out up to US$4.3 billion (around £2.48 billion) to its global customers as a result of the coronavirus (COVID-19) outbreak. In what are set to be historic losses for the global insurance industry following the far-reaching impacts of the pandemic, the market has likened the payout to catastrophes including 9/11, hurricanes Harvey, Irma and Maria.

Two leading insurance figures are calling on the industry to unite behind a new open collective. James York, Deputy Chair of Insurtech UK, and Liz Foster, Non-Executive Director at the Society of Insurance Broking, have pledged to create Totus Re, which they describe as helping the “insurance sector and government better plan coverage for any catastrophic pan-economic event.”

The Economic Secretary to the Treasury, John Glen, has announced that businesses which are struggling to pay Trade Credit insurance due to the coronavirus pandemic will receive support from the government. In a statement from HM Treasury, it was outlined that Trade Credit insurance, which ensures continuation of business by providing cover against defaults on payments, currently provides cover to hundreds of thousands of business-to-business transactions. Due to the financial impact of the coronavirus, many businesses are facing the risk of unaffordable premiums or having their credit insurance withdrawn. HM Treasury will therefore temporarily guarantee business-to-business transactions, currently supported by Trade Credit insurance, ensuring that the majority of insurance coverage will be maintained across the market.

Netherlands-based Insurer Aegon has revealed its Q1 2020 results and the impact that the coronavirus (COVID-19) has had so far. It reported a pre-tax income of €366 million (around £320 million) for the quarter reflecting adverse mortality, as well as the impact of lower interest rates in the United States, and limited COVID-19 related non-life claims in the Netherlands.

Coronavirus continues to hamper insurers’ Q1 results, with Allianz being the latest to report an impact on its bottom line as a result of the outbreak. The global Insurer posted a 28.9% fall in net profit to 1.4 billion euros (around £1.23 billion) in the first quarter compared to the same period last year when it reported a net profit of 2.0 billion euros. Allianz also withdrew its 2020 operating profit outlook of 12 billion euros due to uncertainties around COVID-19. However, the company did report internal revenue growth of 3.7%, and attributed this boost mainly to its Life and Health business.

In further news...Jon Dye, CEO, Allianz Holdings, commented: “This is the first quarterly update of the enlarged Allianz Holdings Group, incorporating Allianz Insurance, LV General Insurance and the general insurance business acquired from Legal & General.” Dye also referenced how Covid-19 has affected the business. He continued: “We opened a new chapter for our business and it would be no exaggeration to say that this coincided with the start of an unprecedented period for the market and the country, as we live through the largest insured event in history."

Global average commercial insurance prices spiked 14% in the first quarter, according to a new report by Marsh. The increase – the largest since Marsh’s Global Insurance Market Index was launched in 2012 - comes despite the minimal impact of the COVID-19 pandemic on pricing in the quarter. Average price increases were driven largely by increases in Property insurance and Financial and Professional Lines, according to Marsh.

While the coronavirus (COVID-19) lockdown has undoubtedly presented a host of challenges, it has also offered opportunities for many professionals to brush up on their skills and competencies, and to return to their workplaces with renewed vigour. Mark Creighton, the CEO of the professional academy Avado, noted that this time of great uncertainty actually presents an opportunity for people to empower themselves with new skills and confidence.


There have been a couple of key changes at the claims team in London, for Liberty Specialty Markets (LSM). Gavin Coley has been promoted to London Head of Specialty Claims, reporting into Mike Gillett, Chief Claims Officer. Coley’s promotion is reward for a strong first year at the firm that has seen him responsible for managing the Energy, Property and Construction claims team. Meanwhile, coming onboard is Kevin Miller, who becomes Energy, Property and Construction Technical Claims Lead, reporting into Coley. He makes the switch from AIG, where he was a major loss Claims Adjuster, and offers more than 30 years’ experience of the London market.

A significant name has joined the ranks of Ethos Broking member Finch Group. Paul Goodman has become Managing Director of the firm, which has eight offices across the UK, having most recently served as Regional Sales Director for JLT Specialty Ltd. In that role he was responsible for devising broking strategies and delivering sales, and also held national responsibility for the manufacturing sector proposition. Now, the veteran of both Bluefin and Oval, is looking forward to this new challenge.

Qlaims Ltd, the holding company for QlaimsTech and Qlaims Insurance, has snapped up industry stalwart Simon Cooter to serve as Non-Executive Chairman. Cooter’s more than three decades of UK general insurance market experience includes 19 years at RSA as well as time spent as Commercial Lines and High Net Worth Director at Covéa Insurance and as Director, Market Management & Regional Operations at Brit Insurance.

Not-for-profit insurance Intermediary Civil Service Insurance Society (CSIS) has snapped up Markerstudy Group alumnus Wendy Hilder to serve as Chief Executive. The former Head of Underwriting Operations and Capacity Management is taking over from Kevin Holliday, who has been CSIS CEO since the end of 2005. Hilder, a Chartered Insurer, brings broad-ranging skills in underwriting and management to the table and is expected to assume the role on June 08.

Having developed a new business model over the last few years that combines traditional London market underwriting and digital distribution, AEGIS London is ready to take the next steps in its development with two key appointments. The company has, subject to regulatory approval, swooped for Katie Wade, who will join the firm as Chief Financial Officer this month. Meanwhile, Rhic Webb will move into the role of General Counsel and Company Secretary – a new position. Both are set to report to Managing Director David Croom-Johnson, who said the recent top quartile Lloyd’s performance had opened eyes up to new possibilities.

There have been a host of changes at London’s EC3 Brokers, with the launch of a Specialty division and the arrival of several new faces. The company has appointed Jonathan Lane as Head of its division, alongside Dominic Toogood and Gary Moore – all three joined the firm at the turn of the month and will report to Head of Broking James Murphy.

Specialty broker Ed is looking for an energy boost with its latest hire. The company has appointed Brett Hatton, from Marsh JLT Specialty, as Divisional Director for Downstream Energy. Hatton, who will be based in London and report to the team’s leader Jon Parker, is set to complete his switch in September.

Haven Financial Solutions, the name behind a host of brands including Haven Life Insurance and Haven Health Insurance, has swooped for an industry veteran as it looks to expand its insurance department. Incoming is Rachel Isles, who offers 20 years of experience. She joins the firm as a Family and Business Protection Specialist having worked as a Protection Specialist at a Mortgage firm and spending several years with Barclays previously.

Arch Insurance International has promoted Simon Williams from Senior Vice President of Strategy & Distribution to the newly created position of Chief Strategy & Distribution Officer, with immediate effect.  As the Chief Strategy & Distribution Officer, Williams will be responsible for constructing and implementing strategies to boost business growth, including partnerships with brokers, improvement of the company’s market profile and relevance, and expansion of the company’s global platforms. He will also take part in the development of Arch’s strategic objectives across the business, including distribution, business development, marketing and communications, and underwriting.

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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