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General Insurance Newsletter Friday 16th August 2019

16 Aug 2019

Insurance News

The biggest insurance company in the UK has confirmed that it will split itself up by the end of 2019. In the midst of reporting a jump in first-half operating profit, Prudential has stated that it expects to complete its demerger by year’s end. This move will see the UK business, M&GPrudential, go its separate way from the rest of the group, creating a new FTSE 100 company with a market capitalisation of around £7 billion.

Brendan McManus, PIB Chief Executive Officer, has revealed that PIB’s current deal with private equity backer The Carlyle Group is due to finish around 2021 and the Broker is already seeking fresh longer-term investment. However, he pledged not to sell PIB, which has been backed by Carlyle since it began, to a strategic Broker.

Tokio Marine Kiln (TMK) has closed its office in Birmingham. The move follows the firm’s decision to place its UK arm, Tokio Marine Kiln Insurance (TMKI), into run-off in order to focus on its Lloyd’s business. The provider said in June that TMKI would stop accepting new business as of 1 July 2019.

A consultation looking at major changes to the way the Financial Ombudsman Service (FOS) is funded closed for responses this week. The FOS proposals include rebalancing the proportion of the income it gets from levies compared with case fees, changing the number of free cases per firm and maintaining reserves of a minimum of six months’ operating income.

Ecclesiastical has launched The Social Club, a training programme for Brokers developed by social media experts. The move is in response to research conducted by the provider revealing that two-thirds of Brokers do not use social media for business purposes. According to the survey, while half of Brokers said they are using social media platforms such as LinkedIn (40%), Facebook (30%) and Twitter (24%) to connect with customers, only a third of Brokers are reaching out via social channels individually.

In other news, Ecclesiastical has launched a free Cyber Scenario Planner to help Brokers sell Cyber cover in the education sector, following research conducted by Ecclesiastical that revealed 54% of Brokers wanted more support from Insurers to sell Cyber products. Faith Kitchen, education niche director at Ecclesiastical, commented: “As a specialist insurer with in-depth knowledge of our customer base, it is important that we work with Brokers to ensure that we provide solutions that meet the needs of the sector.

The Association of Consumer Support Organisations (ACSO) has called on the government to match the Financial Conduct Authority (FCA) in its approach to all types of vulnerable road user (VRU). The regulator recently pledged tough action as it launched a consultation on proposed guidance for firms on the fair treatment of vulnerable customers.

Uinsure, which white-labels Insurer products and works with UK Brokers, has added LV Broker to its list of providers. To access the products Brokers register for Uinsure, which describes itself as an Insurer with a panel, and offers a variety of general insurance products. According to Uinsure, LV’s addition to the panel means it can now provide quotes for six bedroom properties and provide up to £5,000 cover for specified bikes.

The British Insurance Brokers’ Association (Biba) and the Association of British Insurers (ABI) attended a Brexit preparedness meeting at 10 Downing Street last week. Steve White, Chief Executive of Biba, and Huw Evans, Director General of the ABI, represented their organisations at the meeting hosted by Michael Gove MP. They brought together 18 industry bodies from various sectors to discuss the new government’s approach to Brexit and its effects on business.

In other news...The British Insurance Brokers’ Association (Biba) has published its financial statements for 2018. According to documents filed with Companies House, the organisation’s profit and loss reserves have increased from £3.21m in 2017 to £3.89m in 2018.

GoCompare analysis of UK Car insurance policies has revealed that since 2012 admin fees have become more commonplace, with charges increasing by twice the rate of inflation. The key findings are: cancellation fees have risen by 49% since 2012, charges for mid-term policy alterations have increased by 38% and set-up fees, i.e. the cost of arranging the policy are up 82%. On top of the rising cost of their annual premium, motorists are being charged significantly more by their Insurer for administrative tasks.  Most policies now include an adjustment fee - payable when an amendment is made to a policy - and a cancellation charge.

New research has revealed that the rate at which UK businesses and households are stockpiling goods in preparation for Brexit has fallen, as it has adversely affected cash flows and household incomes. The findings, which are from Premium Credit, the UK’s leading premium finance company, reveal that 48% of people in work claim their employers stockpiled goods before the March 31st deadline for the UK to leave the EU, but since then half of these businesses have started to run down their stockpiled goods, and only 25% said they had maintained their stockpile levels.

In response to members’ requests, The Society of Claims Professionals (SOCP) have released a good practice guide for the management of customer disputes. The guide, produced in collaboration with Flaxmans Insurance Agency, whilst not exhaustive, has identified seven points which define good practice for disputes handling. More can be seen here. https://www.socp.org.uk/media/10122341/disputed-claims-good-practice-guide-for-claims.pdf

Five months into its charity partnership, Allianz has already raised £150,000 for the leading mental health charity, Mind. Since the partnership began in March, employees have taken on a range of fundraising activities including white water rafting in Southampton, the Isle of Wight Challenge, Tough Mudder, and ‘Crafternoons’ across various offices. Employees have also donated 403 bags of clothing to the Mind shops as part of the Big Spring Clean, while a group are due to take part in cycling from London to Amsterdam in September.

It’s been a tough time for Whaley Bridge. The good news is, there’s insurance and there’s government support. Over the weekend the government announced that businesses impacted by the Whaley Bridge evacuation will receive emergency funding to cover uninsurable costs. The Department for Business, Energy & Industrial Strategy has committed to match regional support of £100,000 delivered through the local Business Recovery Fund.

Specialist Motor Insurer ERS has raised more than £6,000 for partner charities London’s Air Ambulance and Wales Air Ambulance. The fundraising came by way of charity trek challenge “TrekFest The Beacons,” which took place last month and featured the Brecon Beacons. The ERS contingent was made up of 25 employees who took on the 50km endurance course to burn a combined total of 175,000 calories.

McGill & Partners – the new speciality risk solutions firm which came to life earlier this year via the partnership between private equity firm Warburg Pincus and the camp of insurance broking veteran Steve McGill – is snapping up certain specialty business from Marsh in London. It’s been announced that a renewal rights agreement with Marsh Limited and JLT Specialty Limited has been entered into by London-headquartered McGill & Partners. The business to be acquired principally emanates from third-party wholesale or independent Brokers who compete with Marsh in the area of retail.

RSA has launched a risk assessment platform for commercial insurance customers and Brokers. The new online tool, designed to help businesses manage their risks, was developed in partnership with digital risk management software provider Risk Solved.

QBE Group has announced the financial results for its half-year ending June 30, 2019, recording a cash profit after tax of US$520 million – up by 35% on the previous half-year period. Its gross written premium (GWP) rose by 1% to US$7,637 million, and statutory net profit was up 29% to US$463 million. QBE shares have lifted by 2.5% to $12.38 off the back of the strong results, and the business has continued its strategy of minimising costs and offloading overseas businesses in order to simplify its structure.

Admiral group Chief Executive David Stevens has conceded to the ‘dullness’ of their latest numbers. In the six months ended June 30, Admiral Group Plc posted a 4% increase in both its group statutory profit before tax and group’s share of pre-tax profit. The latter, which excludes the impact of non-controlling interests, grew to £220.2 million from £211.7 million previously. The statutory figure stood at £218.2 million. Group turnover rose 6% from £1.66 billion in the first half of 2018 to £1.76 billion this time around. Operating profit, meanwhile, reached £224.4 million – an improvement from last year’s £216.3 million. 

Autoline Insurance has revealed that it suffered a cyber breach in an email to customers. Sent on 12th August, the email revealed that malware contacted customers and business partners with phishing spam: “We are aware that on Monday 5th and Friday 9th August, a small number of our customers and business partners received a spam email from Autoline Insurance. This contained an image designed to resemble a PDF attachment, with an embedded link to a website."

High Net Worth Broker Home & Legacy has launched an online Household claims portal following Broker feedback. According to the provider, which is part of Allianz, the service allows customers and brokers to report claims online 24/7. The proposition also offers customers and Brokers the ability to track the status of a claim online. Brokers will also receive automatic email notifications as soon as a claim is reported.

The Financial Services Compensation Scheme (FSCS) has declared insurance Broker Westbury Capital Partners in default. The business was trading as The Insurance Business and Westcap and specialised in Home and Contents, Motor and Travel insurance as well as High Net Worth Home and specialist jewellery insurance. According to a document filed on Companies House, the Broker appointed a voluntary liquidator, Daniel Jeeves from Kirks, in February this year.

According to new research from Marsh, the 20 English Premier League clubs had a total of 764 football injuries during the 2018-19 season – the most in the last eight years. A likely consequence of the 2018 FIFA World Cup, player fatigue, and shortening summer recovery times, the busiest physio table belonged to Manchester United, with 63 injuries, while Wolves experienced the lowest number of injuries (11) last season. The Football Injury Index 2019, which is produced by Marsh JLT Specialty, asserts that the cost of injuries to Premier League clubs reached a record £221 million in 2018-19, a 3% rise on the 2017-18 season.

A driver’s claim and three phantom claims have been struck out by a court, following an investigation by Allianz and DAC Beachcroft, which found that the driver had supported fraudulent claims. Following a motor accident in May 2016, Allianz received four personal injury claims from the third party driver, a passenger and two children. Allianz’s insured had accepted liability for hitting a vehicle but already confirmed that the male driver was alone in the car.

 

Market Movers and Shakers

Globe Underwriting, the UK based managing general agent, has appointed Peter Rossell as Head of Engineering Underwriting. As part of its strategy to broaden its offering to clients, Globe is building up an Engineering portfolio that will focus on Construction and Operational Power business. Rossell brings 40 years of Engineering underwriting experience, a deep knowledge of the sector and a strong network of contacts, having previously held roles at Axa Re, GE Frankona, Beazley, ANV and most recently Pioneer.

Gallagher has confirmed that Chief Information Officer Steve O’Donnell has left the business. A spokesperson for Gallagher said: “I can confirm that Steve O’Donnell has left the business and we wish him well for the future.” The spokesperson explained that the business will announce O’Donnell’s successor in the next few weeks but declined to comment further.

HDI Global Insurance Company has announced the appointment of Patricia Ryan as Senior Vice President, General Counsel and Corporate Secretary. Ryan succeeds David Neumeister, who has decided to return to private practice after more than a decade with HDI.

Claims-management and outsourcing provider Crawford & Company has announced the appointment of Leonardo Semenovitch as country manager to oversee claims operations in Brazil.

There’s been a couple of changes up top at insurtech Wrisk. First off, Co-Founder and Chief Executive Niall Barton has become Executive Chairman effective from July. Replacing him as CEO is Wrisk early-stage adviser and investor Nimeshh Patel, who came onboard in January 2018 as Chief Operating Officer.

Lockton has appointed William Barber to drive International Healthcare strategy, which forms part of its Professional and Financial Services offering. Barber will help to drive collaboration across the London teams and Lockton’s international network to further foster a seamless and integrated approach. This will enable the firm to bring the best of the global marketplace to its healthcare clients.

Allianz Insurance has appointed Shelley Hughes to the newly created position of Digital Claims Propositions Manager. Shelley will lead the development of a multi-channel, data driven claims proposition which will enhance Allianz’s customer journey. She will be responsible for bringing digital innovations and techniques to the business in order to meet the changing expectations of the customer of the future.

 

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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