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General Insurance Newsletter Friday 16th May 2019

17 May 2019

Insurance News

Lloyd’s has commissioned the Banking Standards Board (BSB) to conduct an independent, market-wide culture survey on its behalf. The specialist insurance market noted that the annual survey is intended to help Lloyd’s understand the working cultures that exist across the market, including standards and behaviour and to inform further action. This follows the publication of a Bloomberg Businessweek report which revealed a “deep-seated culture of sexual harassment” at the organisation and highlighted an atmosphere of “near-persistent harassment”, both verbal and physical endured by women who work there. Lloyd’s stated that the confidential survey will run until 31 May 2019, after which the outcome and a resulting action plan will be reported back to the market. The survey is part of a five-point plan, which was revealed in March this year. The aim is to create a more inclusive culture and ensure the market can attract motivate and retain talent.

Broker First2Protect Insurance Services has moved to Applied Systems from SSP. Applied noted that the Broker, which is part of residential Property provider LSL Property Services, is one of the “early adopters” of its Applied Epic platform in the UK. First2Protect was formed over 20 years ago and works with clients associated with other companies within the LSL Group, including homeowners, landlords and tenants and also customers of third parties.

Hiscox, the specialist global Insurer, has launched an enhanced version of its Security Incident Response (SIR) product, to provide additional protection for ‘business integrity risks’ including corruption and fraud. The product is available to the Broker market. According to the Insurer, the new SIR policy also includes cover for expenses incurred by a business when dealing with an insured event.

Higos, one of Global Risk Partners’ (GRP) hub Brokers, has bought Plymouth-based The Insurance Group (TIG) for an undisclosed sum. This is Higos’ fifth acquisition since becoming part of GRP in 2017 and the Broker noted that TIG would expand its reach in the South West. Residential and Commercial Property specialist TIG was established more than 40 years ago and is led by Laurie de Mel, who will move across to Higos along with his 18 staff.

A Bishop in Leeds has been jailed after he used the details of two people in his local community and imitated them on the phone to Insurers, to make fraudulent claims for fabricated car crashes. On Friday 10th May 2019 at Leeds Crown Court, Charles Motondo, of Leeds, pleaded guilty to three counts of fraud by false representation and one count of money laundering. He was subsequently sentenced to 10 months in jail. 

Zurich has announced that it paid 99% of customer claims in the UK during 2018 with payments to customers worth over £1.6 billion. The majority of Motor and Home claims were paid (99% and 95%). Where a small percentage of Home claims weren’t paid out, customers had claimed for wear and tear which is not covered by their policy. Likewise, claims for accidental damage were not accepted for customers who didn’t have the specific cover in place

The Notre Dame fire is a tragic reminder that historic buildings require specialist fire prevention measures. Prof. James Lygate of IFIC Forensics has explored some of the lessons learned. Glasgow has seen two fires at its world-renowned school of art and numerous cities around the world have suffered heritage fires such as the Bank building in Belfast and the National Museum of Brazil. Whilst the frequency of such fires is relatively low the consequence is high and there is an apparent correlation between the occurrence of heritage fires and renovation or repair i.e. the risk is highest when the state of the building is being altered. One element of an effective plan is the monitoring of persons in the building by use of CCTV. Some fires are the result of electrical anomalies which can be reduced by regular examination and testing of the installations. The use of thermal imaging (thermography), is recommended as it permits the identification of poor connections, resistive heating and overloaded circuits. Lack of compartmentation and separation can contribute to rapid and uncontrolled fire spread. It is difficult to divide up historic buildings into compartments but interestingly Notre Dame's roof structure could have been compartmented.

Flood Re has announced that Managing General Agents (MGAs) will be able to send cede policies directly to the scheme on behalf of their Insurer. The move marks a change from a previously complicated process that saw MGAs having to collate and send ceding data through an Insurer in order to apply for a Flood Re policy. Andy Bord, the Chief Executive of Flood Re, outlined that with MGAs largely operating in niche and Broker markets the new facility that allows MGAs to contact Flood Re directly should help increase the availability of the products.

The Managing General Agents’ Association (MGAA), whose membership underwrites about £6.1 billion in GWP, has published the results of its first deep dive into the trade body’s members. Based on data obtained from the 122 MGAs (out of a total of 136 members) that completed the comprehensive survey, it was found that the membership writes in excess of 100 lines of business – the main ones being Professional Indemnity, public Liability, Employers’ Liability and commercial and residential Property Owners. The poll also revealed the crucial role played by Brokers in how MGAA members distribute their products - over 84% working with this distribution channel. In terms of capacity providers, 60 Lloyd’s syndicates support the MGAs, which represents more than 40% of the total capacity providers. However, the overriding capacity is being provided by the general insurance market. In addition, 89 members (65% of the total) have Lloyd’s coverholder status.

In other news... Acturis Group has partnered with the Managing General Agents’ Association to provide MGAA members with technology and distribution solutions. The software house stated that members will have access to both the Acturis SaaS platform and the ICE Insurance Suite. According to Acturis MGAA members will also have the opportunity to expand their distribution strategy through Acturis’ 20,000 users.

In further news...Fenchurch Law, a complex insurance dispute specialist, is now offering all Brokers using the Acturis software trading platform access to its package of specialist advice and cost cover for commercial and personal lines insurers who have a claims dispute with an Insurer. According to Fenchurch, the package provides policyholders with access to unlimited legal advice about their rights and obligations under their insurance policy and cover for the cost of pursuing a claim against the Insurer supported by After the Event insurance and disbursement funding.

The insurance industry has certainly made a lot of noise about diversity in recent years, but how successful has the sector been in reducing its gender pay gap? The Chartered Insurance Institute has released figures based on gender pay gap data from 199 insurance and personal finance sector companies in April 2018 and comparing it to a report from 197 of the same types of business in April 2019. It then analysed the data, from Insurers, Intermediaries, Loss Adjusters, Financial Advisers and other related organisations, to outline trends. In the process it discovered that there has been a slight improvement overall – with the gender pay gap reduced from 24% to 23.2% over the last year.

This week is Mental Health Awareness Week and it’s been revealed that an event called “My Mental Health” at this year’s Dive In festival will feature Frank Bruno MBE. Sponsored by AWAC and supported by AIG and iDAWN (the insurance Disability, Ability and Well-being Network), the event will see the former heavyweight champion talk about his struggles with mental health.

Aston Lark is close to signing a deal to receive funding from investment bank Goldman Sachs. The deal is said to be worth around £320m. In January Aston Lark stated it had appointed bankers Macquarie and Livingstone to seek additional investment in order to develop its acquisition pipeline. Earlier this month, group CEO Peter Blanc confirmed reports that the broker was “closing in” on fresh private equity investment

Aspen has announced that it has ended its agency agreement with Managing General Agent Aspen Risk Management. The business said that it expects Aspen Risk Management to be placed in runoff as a result. Asked how many people would be affected by the move, a spokesperson for Aspen said: “We do not comment on staff matters.”

Castel Specialty, a division of MGA Castel Underwriting Agencies has launched an online trading platform for Brokers with complicated and unusual small commercial risks. The firm said that the proposition, entitled Square Pegs, will provide Brokers with access to a broad range of commercial coverage with capacity from an A-rated Insurer. According to Castel the solution includes schemes for businesses with complex trade activities, those working in “high risk” locations, with non-standard or unusual product types and those who have experienced financial difficulties such as liquidation or bankruptcy in the past.

Dunedin, the UK mid-market private equity house has backed the management buyout of Acquis Insurance Management an independent insurance Broker and administrator that provides specialist solutions to the finance and leasing industry. According to Dunedin, the deal (which is subject to regulatory approval) enables the current management team, led by CEO Nick Leader, to drive the business’ international growth.

Allianz UK’s Q1 2019 results saw nearly a 10% rise in commercial lines gross written premium (GWP) to £319.5m. However, the provider’s commercial lines combined operating ratio (COR) deteriorated to 96.7% from the 95.1% posted for the same time period last year. The firm’s overall results saw a fall in GWP to £493.5m from £542.7m in Q1 last year. Its operating profit rose however to £51.2m (Q1 2018: £39.8m) and it’s COR was 94.8%, compared to 95.2% in the first quarter of 2018.

Cavere Intermediary is set to launch an upgraded Home insurance policy, underwritten by Ageas Insurance. The provider stated that the product will be available to Brokers from June this year, adding that the policy had been designed to provide comprehensive insurance with higher cover levels and claim limits. It detailed that the new offering had been redefined to be simple to read and understand.

Marsh has released its Global Insurance Market Index for the first quarter of 2019. Key findings include: Average commercial insurance prices increased 3% in Q1 2019, the largest increase since the survey began in 2012, Q1 2019 represents the sixth consecutive quarter of average commercial insurance pricing increases, composite pricing in Q1 increased in all global regions for the second consecutive quarter, driven by rate change in Property and Directors and Officers (D&O) coverages. Regionally, Pacific had the largest price increases in the index (>10%), a trend that has continued for eight quarters. The UK and Continental Europe both reported average price increases of 2% or higher. Globally, pricing for Property risks increased by almost 5% on average, slightly above the rates recorded in the previous four quarters. Casualty prices declined nearly 1% on average, continuing a trend started in 2013. The average pricing in Financial and Professional Lines increased by almost 6%. All global regions experienced a rise, primarily driven by increases in D&O insurance.

Leading Legal Expenses and Emergency Assistance provider ARAG has already relaunched its flagship Motor policy to accommodate the changes being introduced next year through the Civil Liability Act. The latest version of its Motoring Legal Solutions product also now includes cover for the defence of motor prosecutions and vehicle cloning, as well as access to more, free and customisable, motor-related legal documents.

Later this month will see another milestone achieved for AXA UK in the world of driverless cars. Their second project, as part of the Flourish consortium, will be coming to an end and gives them the opportunity to reflect on just how far they have come as well as looking to what the future may hold for this rapidly advancing technology. From an insurance perspective, AXA has led the way in this area in the UK. Back in 2014 the business realised just how revolutionary these vehicles could be – both to the way we do business but also, more importantly, to society more broadly. That’s why they joined five, government-backed projects.

The Chinese Insurer Ping An has kept its place in the latest Brand Finance Insurance 100, thanks to its 93% surge in brand value to US$50.5 billion. Launched in association with Insurance Business, the 2019 edition of the annual report features not only the listing of the top 100 insurance brands but as well as sections on brand value by country, performance by sector, and Brand Finance’s brand valuation methodology.

According to a recent PollRight survey conducted on behalf of the premium finance firm Premium Credit, only 14% of Brokers expect to grow their general insurance business over the next three years. This is a stark contrast to Cyber, from which 72% of brokers anticipate growth. Commercial insurance came in second, with 58% of respondents saying they believe growth will come from this space. More than a quarter (26%) placed their bets on health insurance and critical illness. Meanwhile 46% of Brokers expect their clients to make greater use of premium finance over the next three years.

Risk management support and health and safety training are among the most desirable options Insurers and Managing General Agents can offer Brokers in the mid-market segment. That was among the key findings of a recent Post survey that asked intermediaries to rank the most important tools/offerings when it comes to managing mid-corporate risks.

Biba News

The British Insurance Brokers’ Association has named Ian Crowder as the winner of its 2019 Francis Perkins Award. Francis Perkins, the first Chairman of BIBA, instigated the award to give recognition to members of the association who give their time and energy to promote the causes of the insurance broking sector. The judges chose Ian because of his commitment, courtesy, collaboration and indeed kindness which has been extemporary. He has been an enthusiastic advocate.

BIBA teams up with ITN Productions Industry News – not to present an insurance reality show, but rather to offer up a news and current affairs style programme that explores the essential role Brokers play in protecting consumers and businesses. Presented by Natasha Kaplinsky, it examines the fact that while the UK has arguably one of the best insurance industries in the world, almost half of SMEs aren’t buying sufficient insurance cover and, as such, could face major losses. In addition, the programme delves into the effects of InsurTech and innovation on the sector, as well as the progress being made in diversity and inclusion and the ongoing difficulties of placing certain risks.

BIBA announced it is launching a partnership with the InsurTech firm Insurercore to deliver two exciting new initiatives to Brokers via a searchable networking platform. The original aspect of the platform allows Brokers to find markets to write their risks and source Underwriters with the necessary capacity – bringing the concept of paper-based risk appetite guides into the 21st century. The new functionality allows Brokers to search for technological solutions to day-to-day issues they face in their businesses – bridging the gap between the incumbent Broker and InsurTech communities. In his 2018 BIBA conference speech, CEO Steve White announced that BIBA would be working to deliver a ‘dating agency-type’ solution to enable this. One year on and with the help of the cross-industry Innovation Group run by BIBA, Insurercore has developed the means for Brokers to be able to search for solutions offered by InsurTech providers. Insurercore CEO Pete Clarke commented "We are ecstatic at the response we had to launching our partnership with BIBA. With 42 companies signing up during the two days and countless business cards to follow up on, we are counting this as a fantastic success."

Trakm8 has unveiled a turnkey telematics insurance solution, which it said will allow Brokers and Insurers to launch a telematics product with no up-front costs. The business, which specialises in telematics, vehicle cameras, optimisation and fleet management solutions, officially launched the solution Driveably at BIBA. 

Magenta Insurance, which is part of inet3 Group, has announced its Waterlock system is now available to Brokers through schemes provided by BIBA. The technology, developed with Cambridge-based Green Energy Options (GEO), can be offered to clients by brokers via the recently launched Escape of Water (EOW) and Residential Distressed Risk schemes. According to Biba, customers will benefit from a premium discount given especially for homes that have already suffered from escape of water.

Steve White, CEO of the British Insurance Brokers’ Association, used his conference address on Wednesday morning to highlight the need for Brokers to attract young talent as the industry becomes more technologically sophisticated. Opening Biba’s annual conference, White said: “It is no longer sufficient to seek the same old skills we have sought for a generation. “Our lives have become increasingly digitalised. Our customers expect our services to follow that trend."

Nearly six out of ten Brokers (56%) describe stress levels in the industry as high, according to research by Premium Credit. According to the survey 56% of Brokers also expect stress levels to rise over the next three years. At a discussion at the Biba annual conference, panellists urged Brokers to talk about mental health. Former cricket player Freddie Flintoff said: “Bosses have a responsibility to create an environment where people can talk about how they’re feeling. There needs to be trust.” Television presenter, Katie Piper, added that if people feel that there is a support system in place for them at work they are more likely to come forward and talk about their mental health. “You have to make it clear to people that punishment won’t be served for admitting weakness,” Piper added.

Boris Johnson announced his intention to run for leadership of the Conservative Party during his BIBA keynote on the final day of the conference in Manchester. Johnson was quizzed by BBC journalist Huw Edwards during the Q&A portion of the session, after avoiding the topic previously. “Of course I’m going to go for it, but there is no vacancy at present,” Johnson said. Johnson’s keynote focused on Brexit and his arguments as to why it is important to push forward with it.

The British Insurance Brokers’ Association and Pool Re have collaborated with a host of government departments and industry experts to launch a new comprehensive guide on Terrorism insurance to boost take up. Less than 3% of SMEs buy any Terrorism cover and the new publication aims to help Brokers assist clients in making an informed decision about the insurance protection they need. The guide includes information about Pool Re and other insurance providers, as well as the different types of Terrorism insurance available to businesses.

This year to mark the 25th anniversary of the prestigious British Insurance Awards, there were two special awards to celebrate the Insurers and Brokers that have had the most success during its history in terms of nominees and wins. The BIA organiser Insurance Post unveiled the final six firms in the ‘Best of the Best’ Insurer and ‘Best of the Best’ Broker categories on its stand where each of the nominees were rewarded with a chocolate egg [to celebrate being part of the dazzling dozen] to mark the achievement. The actual winners will be decided by public vote among attendees of the 25th BIA at the Royal Albert Hall on 10 July.

As Biba 2019 drew to a close, BBC Broadcaster and Biba Conference host, Huw Edwards revealed that next year’s conference will be held in Manchester Central. The planned dates for the exhibition are Wednesday 13 and Thursday 14 May. Biba’s Chief Executive, Steve White, commented on the announcement: “BIBA2019 has proved to be another fantastic example of the insurance sector coming together. I would like to thank all exhibitors, sponsors and delegates who really make it a success. “I am looking forward to welcoming everyone back to Manchester next year for even more networking, learning and business opportunities.”

BIBA Movers

BIBA has made a series of big announcements, firstly a new Chair – former Insurance Minister and current board member, Jonathan Evans. Made on stage by outgoing Chair Lord Hunt of Wirral, whose tenure ends in December, the declaration sees the previous chair of the All-Party Parliamentary Group on Insurance take up the position from January, 2020. “We are delighted that Jonathan has agreed to take the position of Chair,” said Steve White, BIBA CEO. “He has already served on our board for one year as a Non-Executive Director and his experience, credentials and insights will certainly help BIBA to continue to lead the way. “He takes up the reins from David (Hunt) who I am sorry to see stand down. He has helped steer BIBA very successfully over the last six years through some times of enormous change.”

The British Insurance Brokers’ Association has made a new Non-Executive Director appointment to its main board. Caroline Barr is a highly experienced, respected former Civil Servant who has a commercial background in Financial Services. She is a member of the Financial Services Consumer Panel and has represented the panel with Government at senior level. Steve White BIBA CEO said: “Caroline has had broad experience, either in or cutting across our sector and will bring a fresh viewpoint to our table. I am looking forward to working with her, learning from her involvement in policy making, Government and lobbying to shape BIBA’s future strategy.” Caroline Barr added: “I am really looking forward to being part of BIBA and working with Steve and the rest of the team. The landscape for insurance broking is changing fast, making this an interesting time to be involved in such an influential organisation as BIBA.”

Market Movers and Shakers

CPD Underwriting Solutions Limited is delighted to announce the appointment of Jim Wylie as Distribution Director. Jim’s previous experience includes many years at a variety of Insurers, developing accounts with a wide range of intermediaries from high street offices to national organisations. His understanding of the differing needs of these intermediaries will ensure that CPD Underwriting will be well placed to help meet the needs of them and their customers. Chris Dixon Chief Executive of CPD Underwriting Solutions Ltd comments, “This is still very much an industry based on relationships and the appointment of Jim will ensure that CPD Underwriting can build those relationships in the market”.

PremFina hires Alan Atkins as Director of Client Origination. Atkins brings decades of experience to PremFina having worked for the likes of Premium Credit Limited for nearly 10 years, serving as the Head of Retail to both the Broker Business and National & Key Accounts departments. Most recently, Atkins was the Director of Strategic Partnerships as Omni Capital Retail Finance Ltd and prior to that he served as the Managing Director at Bexhill UK Limited.

Gareth Hughes has joined leisure vehicle specialist insurance Broker – Comfort Insurance – as Director of Trading to help boost market share in emerging Leisure insurance sectors due to anticipated growth in the UK outdoor holiday market, some of which is driven by Brexit uncertainty. Ben Cue, Comfort’s Operations Director said of Gareth’s appointment ‘We’re absolutely delighted to have someone with Gareth’s experience on board to support our ambitious growth plan over the next 5 years and to add further market and leadership experience to our knowledgeable family team. We see this and other key hires as critical in meeting future demand for specialist Leisure Vehicle insurance. Gareth is an experienced leader having managed teams of traders at both Aviva and AXA and having held a variety of business development and leadership roles with Insurers. He has worked with insurance Brokers throughout his career, his last role being Branch Manager for London and Maidstone branches at AXA insurance.

Trade Credit Insurer Atradius has appointed a new Business Development Manager for its Northern Hub. Chris Williamson joins the Atradius North team as the new SME Business Development Manager, responsible for policy underwriting and developing relationships with the local Broker network. He will work alongside colleagues Sally Nolan, Sarah Seddon and Chelcee Witkowski in the business development team, Senior Account Manager Nicola Hinchliff and Account Managers James Armitage and Lisa McMillan.

Allianz Insurance has appointed Simon Parrish to the position of SME & Corporate Partner Underwriting Manager. Simon joined Allianz on the Underwriting Graduate programme in 2008 and has previously held a number of portfolio management, business change and actuarial roles within our technical division. Most recently he has held the role of commercial Motor Portfolio Manager and he joins the SME and Corporate partner team following the successful launch of Allianz’s e-traded Mini Fleet, Taxi & Truck products in this area. In his new role Simon will have responsibility for setting the technical direction for the account, leading the Underwriting SME and Corporate Partner teams and driving actions to successfully deliver profitable growth.

Covéa Insurance is pleased to announce the appointment of James Gearey to the role of Corporate Development & Strategy Director. His appointment will be subject to regulatory approval. James brings with him extensive experience gained in a variety of Financial Services organisations. He was Director of Partnerships at Aviva UK between 2006 and 2008, before joining Siemens Financial Services, where he was CEO of their UK & Nordics business until 2017.  More recently, James was Managing Director of Commercial Risk Solutions at RSA. James Reader, CEO of Covéa insurance commented: “I am delighted to welcome James to our Executive team. We have ambitious plans for our business and he brings a wealth of experience and skills to help ensure that we achieve those ambitions. As well as playing a leading role in driving our strategy, James will have a particular focus on the development of new partnerships, to enable us to deliver our exceptional levels of service to even more customers.” 

Further to the announcement on 26 February 2019 that Charlotte Jones has been appointed as Chief Financial Officer of RSA Insurance Group plc, they are pleased to announce that Charlotte will commence this role on 31 July 2019. Charlotte's appointment is subject to regulatory approval. This notification is made in accordance with LR 9.6.12.

ERS introduces new Regional Development Manager Chris Johnson. ERS are always looking at ways they can get closer to their Brokers and better serve their needs – wherever they’re based in the UK. Over the past 12 months ERS has made a number of senior regional hires to consolidate their position and continue to grow their footprint outside of London. "I’ll be managing our North West broker relationships and making sure they’re mutually beneficial. Our internal mantra is ‘to ensure Brokers think of us first when placing a specialist risk’. Visibility is the key to this because, to me, visibility breeds relationships, which breeds opportunity, which breeds business."

QBE has announced that Catherine Brown has joined as Non-Executive Director for the UK. Catherine has joined the Boards of QBE’s Lloyd’s Managing Agent, (QBE Underwriting Limited), and its company market carrier, QBE UK Limited. Ms Brown currently holds various other positions including Non-Executive Board Member at the Cabinet Office, Non-Executive Director of FNZ (UK) Limited, Chair and Non-Executive Director of Additive Flow and Non-Executive Director of Metro Bank. She is also a trustee of various charities, including Cancer Research UK and Blue Cross.

Victor Insurance Holdings, the world’s largest Managing General Underwriter, has announced the appointment of Anthony Stevens as president of Victor International. In his new role, Stevens will be responsible for advancing Victor’s insurance specialty outside of North America. Stevens succeeds Paul Drake, who has announced plans to retire in September. Drake will continue to lead Victor in the UK until a successor is appointed, the company said. Stevens is based in London and will report to Christopher Schaper, CEO of Victor Insurance Holdings.

Bishopsgate Insurance Brokers has a new man in charge in the form of Jonathan Turnbull. The former RFIB boss, who is a qualified chartered accountant with more than 25 years of experience in the insurance broking sector, has been appointed as Chief Executive subject to regulatory approval. He replaces Neil Pearce, who led Bishopsgate from 2017.

 

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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