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General Insurance Newsletter Friday 16th October 2020

16 Oct 2020

Global program management and legacy acquisitions specialist firm Randall & Quilter (R&Q) has reported a “strong operating performance” for the first half of 2020. In its latest financial results release, the firm revealed a 30% increase in pre-tax operating profit to £10.4 million for the six months ended June 30, 2020, driven by “strong growth across both business lines.” By comparison, the firm reported a pre-tax operating profit of £8.0 million for the first half of 2019.

Two-thirds of insurance professionals believe that the Financial Conduct Authority (FCA)’s Business Interruption case has reduced trust in the industry, according to the latest survey by the Chartered Insurance Institute (CII).

The Financial Conduct Authority (FCA) and the Financial Services Compensation Scheme (FSCS) have confirmed that UK company East West Insurance Company has been placed in administration.

INSTANDA has launched the first insurance product targeted at the African market on its platform, alongside its newly onboarded client, Standard Bank South Africa. The UK-headquartered firm worked closely with Standard Bank Insurance to launch a new commercial Cyber insurance product, it said in a statement.

Specialist Insurer CFC has announced the launch of a new solution to address Intellectual Property (IP) infringement risks facing buyers undertaking a merger or acquisition (M&A). The new solution, which leverages the expertise of CFC’s existing IP insurance product, as well as its mid-market M&A insurance products, offers more holistic protection for IP than many existing transaction Liability insurance products. 

Bermuda-headquartered peers Arch Capital Group and AXIS Capital Holdings have revealed their respective catastrophe loss estimates for the third quarter of the year. “The company has established a range of pre-tax catastrophe losses of US$190 million to US$210 million in the 2020 third quarter across its Property Casualty insurance and reinsurance segments, net of reinsurance recoveries and reinstatement premiums,” noted Arch.

According to the latest CBI/PwC Financial Services Survey, confidence among general Insurers is bouncing back after sharp dips in previous quarters. Their optimism about business prospects has seen the biggest rise among any financial services segment in the survey.

The fourth and final part of Bravo Group’s whitepaper series has now been released. The latest edition, which features contributions from across the business, examines how Brokers, third-party providers and Insurers have used technology to adapt to the COVID-19 landscape. In particular, it looks at resilience, how technology has accelerated and checks in with Acturis to see how it overcame its own challenges.

Hardening insurance markets are bucking the global recession trend, according to a new report from the Swiss Re Institute. “Even before the COVID-19 crisis, low interest rates were severely undermining the profitability of the insurance industry,” wrote report author Jerome Haegeli, Group Chief Economist at Swiss Re Institute. “Further rate cuts to help shore up the economic recovery are only going to exacerbate the challenges. And it’s clear that without significant price increases the insurance industry will not be able to meet the growing need for insurance protection in a commercially viable way.".

Swiss Re and Daimler Insurance Services have formed a 50/50 joint venture, known as Movinx. Located in Berlin, the firm has been set up as an insurance intermediary and service provider and has already received competition clearances.

A new Broker is ready to bring “energy” to the renewables, power, infrastructure and transport sectors. NARDAC Insurance Services has launched with the aim of “upending a market of general products and services” with a specialist proposition. Jatin Sharma, one of the firm’s Co-Founding Partners, believes the market is long overdue for innovation and creativity

Lockton, the world’s largest independent insurance Broker, has adopted CyberCube’s Broking Manager, a Cyber risk analytics platform for insurance intermediaries. Lockton has more than 60,000 clients across the globe, and is the world’s eighth-largest Broker.

Fitch Ratings has announced its decision to withdraw the ratings of Aegon N.V. and its related entities for commercial reasons. The entities are Aegon Funding Company LLC, Scottish Equitable, Transamerica Life Insurance Company, Transamerica Financial Life Insurance Company, Transamerica Premier Life Insurance Company and Aegon Bank N.V. and all debt securities issued by these entities.

Specialist Insurer Ecclesiastical has confirmed 10 charities that will each receive a share of £500,000 as part of its Movement for Good awards. Each charity selected will benefit from a grant of £50,000, meaning that a total of 500 charities have now received donations helping the Insurer to a total of £1 million in contributions this summer.

Aon Plc has good news for its shareholders. In a release, the firm said an increase to the annual cash dividend paid quarterly on Aon’s outstanding Class A ordinary shares has been authorised by the company’s board. “Consistent with the increase in the dividend,” noted Aon, “the board of Directors has declared a quarterly cash dividend of US$0.46 per share on outstanding Class A ordinary shares, reflecting a 5% increase from US$0.44 per share.”.

The global asset management arm of insurance giant Aviva Plc has set a target of £10 billion in investments into infrastructure and real estate projects in the UK over the next three years.

Lloyd’s of London has so far donated £12 million to 197 charities worldwide, in response to the global spread of the coronavirus. £5 million was donated to the Association of British Insurers COVID-19 Support Fund. £3 million was donated to 114 charities nominated by Lloyd’s Corporation colleagues and £1 million each made its way to the Lloyd’s Market Charity Awards and projects. 

In further news...Lloyd’s of London has revealed it will be conducting a review into the way insurance products are designed and sold and has called for simpler products in response to the COVID-19 pandemic. In a press release, the insurance market noted that the pandemic has set irreversible societal change in motion around the world and, as a result, new insurance solutions are required, as is greater protection for customers’ needs.

The Hospitality Insurance Group Action (HIGA) has issued a fresh call for more members in advance of Insurers filing their appeals in the ongoing Business Interruption test case. The policyholder group stated that it has expanded its membership to include and represent businesses that have either the Marsh Resilience policy wording, which was adopted by numerous Insurers, or the QBE1 25 mile disease clause policy wording.

The COVID-19 pandemic has so far been an earnings event for the “Big Four” European reinsurers – Swiss Re, Munich Re, Hanover Re and SCOR – rather than a capital event. While their first-half results varied depending on their exposure to coronavirus claims, the “Big Four” generally maintained strong capital adequacy, keeping their solvency ratios above 200%.

Commercial insurance specialist Ernest R. Shaw Limited (ER Shaw) is now owned by international insurance brokerage NFP Corp. Without disclosing financial details of the already completed transaction, NFP said acquiring the Birmingham business is part of its ongoing European expansion. 

International insurance Broker Howden has announced that it has reached an agreement to acquire a majority stake in ADRISA, a prominent Mexican retail insurance Broker.

Last month a consortium led by Arch Capital Group offered to snap up Watford Holdings. Arch has now announced having entered into a agreement to acquire all of Watford’s common shares in an all-cash deal valued at approximately US$622 million (around £477.5 million). “Under the terms of the agreement, Watford shareholders will receive US$31.10 in cash for each Watford common share they hold,” detailed Arch, which currently owns approximately 13% of Watford’s outstanding shares.

Ageas and Tesco Personal Finance Plc (Tesco Bank) have announced that Tesco Bank will buy Ageas’s 50.1% stake in joint UK joint venture Tesco Underwriting Ltd (Tesco Underwriting). This non-life joint venture provides motor and household insurance to the UK market and was first established in 2009 and later extended for seven years at the end of 2014.

AXA UK and Ireland has revealed that Tara Foley will be joining the business as CEO of AXA UK Retail Insurance, starting from November 02, 2020, subject to regulatory approval. She will also join the UK & Ireland Management Committee and will report to Claudio Gienal, UK & Ireland CEO.

Aspen Insurance UK have announced the arrival of a new Head. Tony Rai is set to take the role in early 2021, having been head of London Market Claims at Hiscox since 2009. Previously, he was responsible for management and leadership of claims across three business units – Hiscox Re, Hiscox London Market Insurance and Hiscox Special Risks.

Henry Seymour & Co Insurance Brokers now benefits from having two Managing Directors. Company stalwart Darragh Timlin, will be teaming up with current MD Dean Laming, in his new capacity as joint Managing Director.

Global Risk Partners (GRP) have announced the appointment of David Cunningham as GRP’s first-ever investment Director. Leading a team of three investment Executives, Cunningham will be in charge of developing M&A leads within retail broking and Managing General Agents.

Willis Towers Watson has appointed Tony Rooke as Director of climate transition risk in its Climate and Resilience Hub. Rooke has more than 22 years of global experience in climate change, sustainability, advisory and program delivery. In his new role, he will drive Willis Towers Watson’s client guidance on climate transition risk disclosure, management, and opportunities.

Marsh’s Aviation team is hitting new heights after bringing in a new Managing Director within its UK Aviation practice. Mark Walters, who will report to UK Chairman and CEO of Aviation at Marsh JLT Specialty, Andy Smith. Walters is set to provide insurance and risk advisory services to aerospace clients after returning to the firm after a stint with Gallagher.

As Berkshire Hathaway Specialty Insurance (BHSI) continues to expand its European team, it has brought in a new Head of Third Party Lines in Ireland. Taking the role is Louise Kidd who arrives at the firm with nearly two decades of industry experience under her belt.

There is a new CEO at AEC Group, the MGA snapped up by Coverys European Holdings earlier this year. Elisabetta Ibba will move into the role with immediate effect, succeeding Doug Robare who is set to stay on the board and continue in his role of Chief Underwriting Officer of Coverys.

Airmic has announced that its Chief Executive, John Ludlow, will be stepping down after a tenure of almost four years. Ludlow will remain in his post until his successor is appointed in early 2021.

Generali
has announced that Alan Moore has been appointed as UK Branch General Manager, directly reporting to Manlio Lostuzzi, Global Corporate & Commercial CEO.

Liberty Specialty Markets has brought in Valérie Baucher to take the position of Underwriting Manager for affinity and programme business across the continent. She will report to Pierre-Edouard Fraigneau, the Chief Underwriting Officer for Europe, as well as Head of Client and Distribution Kerry McKay.

After more than three decades with QBE International, Chief Underwriting Officer Colin O’Farrell will be retiring from the firm, after 34 years, at the end of 2020.

 

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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