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General Insurance Newsletter Friday 18th January 2019

18 Jan 2019

Insurance News

Software house Acturis is getting ready for the departure of minority private equity backer Summit Partners. “We are considering options to replace Summit but there is nothing immediate in the window,” said co-founder and co-CEO Theo Duchen. Summit invested in Acturis in June 2010 and Duchen pointed out that an eight and a half year holding period was a “very long” one for private equity.

Aviva has refreshed its mid-market product suite to reach a greater proportion of the market and provide a wider toolkit for Brokers to offer their customers. Key changes include tech investment, investment in Partner networks such as Risk Managers and customer-level underwriting with a focus on expertise and capacity. According to the provider mid-market comprises a variety of businesses with turnover from £5m to £100m.

Insurance Broking has once again bucked the trend of increasing pessimism across UK financial services businesses. According to the latest financial services survey from PwC/CBI a net 5% more Brokers were positive than negative about the overall business situation in the sector. However, the figure for the final quarter of 2018 marked only a small increase in the feel good factor from the 3% recorded in the previous survey.

Hyperion has delivered a 16% uplift in revenue for the year ended 30th September 2018 to £620m. The business did not reveal profit and loss figures but did report an 19% increase in Ebitda to £181m. The breakdown of the revenue numbers showed that the company had achieved organic growth across the board.

Motor Managing General Agent Kitsune has officially begun trading following its launch by Brightside. According to the Broker capacity comes from Accredited Insurance Europe (AIEL) A-rated paper, via Randall & Quilter Investment Holdings and Partners include CDL, ADT, Willis Towers Watson (WTW) and WNS assistance. Private Car and Commercial Vehicle products will be rolled out to additional Brokers on the CDL platform during Q1 2019, with Commercial Vehicle going onto Open GI before the summer. 

MRIB Group has bought Winnersh-based schemes specialist Independents for an undisclosed sum. Independents was founded in 1999 and specialises in the UK health and fitness sectors. According to MRIB, the firm is the market leader for the gym and trampoline and inflatable parks industries.

Specialist Insurer NMU is set to reorganise in order to digitise the business. The provider said it will reshape the company from a branch driven business into one led by specialist lines. The company stated the new structure would better support its growth ambitions and utilise current resources.

Insurance fraud cases reaching UK courts totaled £17m across 19 cases last year, KPMG has calculated. According to the accountants, there were 24 cases with a combined value of £11.9m in the years 2014 – 2017. The figures were released as part of KPMG’s Fraud Barometer, which records cases of alleged fraud with a value of more than £100,000.

The Financial Conduct Authority has sent out a warning about unauthorised Broker GLC Car Insurance, which is targeting customers in the UK. GLC Car Insurance operates through an Instagram account and the FCA noted that it believed the company is “carrying on regulated activities which require authorisation”. The firm describes itself as specialised insurance Brokers and the Instagram page is still active and has nearly 3,500 followers.

On Friday 11th January 2019 the Department for Transport released the latest MOT results. This is the first update since the Government published the 2015/16 MOT results more than a year ago. Data scientists at By Miles, the company behind the UK’s first real-time pay-per-mile Car insurance policy, have analysed the 23 million MOT tests. According to James Blackham, Co-founder of By Miles, “The latest data clearly shows that motorists continue to drive less and less each year." Motorists drove an average of 7,134 miles in 2017, down from 7,250 miles in 2016, and 7,334 miles the year before that. “Sadly, this hasn’t been reflected in the cost of car insurance, in fact for many people it’s quite the opposite" James continues. Another trend found was that if you want to pass your MOT, get tested on a Sunday (and not a Monday)!

Zurich has bolstered its anti-fraud efforts in the UK with the help of existing Partner BAE Systems. Announcing a major extension to their eight-year partnership, Zurich UK said it has deployed the technology-led defence firm’s Property and Casualty fraud tool across multiple business areas including commercial lines. Called NetReveal, the platform is designed to boost fraud detection and, in turn, reduce illegitimate payouts. Also targeted at accelerating investigations and optimising the claims process, the solution uses predictive modelling as well as network analytics and provides “a more holistic view” of fraudulent activity. 

Data Protection Authorities are likely to ramp up the number of GDPR audits this year, according to Ventiv Technology's Chief Information Security Officer, Scott Wilson. Businesses must "get their house in order" if they want to avoid a hefty fine and reputational damage, he warned. "Companies shouldn't fear these audits, but they should plan for it," he explained. The Data Protection Authorities (DPAs) will have full investigative powers and are not required to give notice. "The audits we've seen so far have not been window dressing exercises. They don't just sit in a conference room, they get inside the business; they may ask for access to your systems, your data and all your documents."

Broker Network-owned Saffron Insurance has bought independent Broker Farmer Insurance Brokers for an undisclosed sum. Romford-based commercial Broker Farmer, also a Broker Network member, was established in 1999 by Derek Farmer and specialises in Fleet, Property Owners and Liability. The business manages £2m of gross written premium and has ten members of staff. Managing Director David Beswick said that Saffron wants to develop Romford as a local hub in addition to what it has already got in Hartford, Haverhill and Royston. In addition to those four locations the Broker, which was bought by Broker Network in 2018 and since then has purchased Bedfordshire-based Grove Insurance Services and Continuum Insurance Brokers in Hertford, is planning to set up hubs in two further undisclosed places.

Acturis has announced that it has broken through the 20,000 user barrier after a number of “significant Broker wins from competitors”. The software specialists listed that in the last 12 months Manchester-headquartered UK Global, Liverpool-based Mason Owen, Bruce Stevenson in Scotland and independent Broker Willis Insurance and risk management had all gone fully live on its platform with a mix of commercial and personal lines business for each.

Motor provider Accident Exchange has rebranded as AX and restructured the business to create operating divisions – AX Automotive and AX Innovation. The organisation detailed that AX Automotive will focus on the growth of its credit hire business, broadening its market reach and continuing its focus on customer satisfaction, high quality service and frictionless process management for all its Partners.

Nick Cruz, former Non-Executive Chairman of collapsed provider Enterprise Insurance, has launched libel proceedings against the Gibraltar Financial Services Commission (GFSC). The claim was filed at the Supreme Court of Gibraltar on 30 November 2018 and mainly relates to a press release published by the GFSC on 26 October 2016. Gibraltar-based Insurer Enterprise was ordered to stop writing new business on 25 July 2016 and called in administrators in September the same year.

The British Insurance Brokers’ Association has unveiled its 2019 manifesto titled Risks and Opportunities. The document was launched on the 15th January in the Houses of Parliament to an audience of ministers, MPs, Lords, senior government officials, insurance professionals and the media. As in previous years it has been collated on the basis of members’ feedback and contains 30 calls to action and 26 commitments.

Certain Underwriters at Lloyd’s of London, insurance agencies and Lloyd’s syndicates have been taken to court. A federal class action lawsuit has been filed with the United States District Court for the District of Hawaii over what were described as “virtually worthless” policies. The case centres on surplus lines insurance and points to an alleged scheme designed to drive Hawaiian homeowners away from state-established coverage.

Following UK Prime Minister Theresa May’s proposed withdrawal agreement with the European Union being rejected, the Association of British Insurers is calling for immediate action. “We need a way forward urgently that avoids no-deal,” commented ABI director general Huw Evans following the historic vote. “This is uncharted territory and we face a period of unprecedented uncertainty. It is critical that the Government, Parliament, and the EU work together to avoid an outcome that would be bad for our economies and bad for our customers.”

Marsh has been at the vanguard of driving better client service in London through electronic trading on PPL. This was how London and International Insurance Brokers’ Association Chief Executive Christopher Croft described the broking giant following Marsh’s announcement that it had placed over 10,000 risks in 2018 through Placing Platform Limited (PPL). To date, Marsh has now bound more than 15,000 risks on the electronic insurance placement platform.    

Liberty Mutual has been recognised by Forbes magazine as one of the country’s best employers for diversity. This is the second consecutive year the Insurer has received the honor. Forbes selected the honorees based on the results of an independent survey of more than 50,000 US employees working for companies employing at least 1,000 people in their US operations.

The County Group has bought Swinford Insurance Consultants, located in Kinver, for an undisclosed sum. County was acquired by consolidator Global Risk Partners (GRP) in January last year. Following the GRP deal County continued buying Brokers. It struck the first deal of the year in July with its buy of Guardian and at the time stated that it was the “first of many under the GRP banner”.

PIB’s Q Underwriting has officially launched in a move that unites the Broker’s Managing General Agent (MGA) businesses. At the start of this month aQmen Underwriting Services, TFP Schemes and Thistle Underwriting Services became part of the same unit. According to PIB they now share a common Terms of Business Agreement (Toba) and the proposition enables Brokers to access over 30 niche commercial lines products across the three MGA brands.

The employees of Allianz Insurance have selected Mind, the leading mental health charity and their sister charity SAMH (Scottish Association for Mental Health), as their new Charity Partner. The partnership, starting on 1st February 2019, will initially last three years and will see local fundraising activities take place at Allianz offices across the UK to support the charity’s work.

Motor insurance providers urgently need to create greater clarity and trust around the use of accident and claims data in pricing Motor insurance policies. After conducting a study of 1500 UK motorists regarding claims reporting, LexisNexis Risk Solutions found that – 58% of responding motorists said they would not inform their Motor insurance provider about a minor accident if repairs cost less than their policy excess, with 60% of those surveyed thinking this would lead directly to a policy price increase. In addition, consumers are now less willing than they were three years ago for their full claims history to be used for pricing.


Market Movers and Shakers

Specialist independent Lloyd’s Broker and delegated authority expert SSL Endeavour Limited announces that experienced Professional Indemnity (PI) Broker Mike Newson has joined the company as Senior PI Broker to focus on developing and growing international business. Mike joins SSL Endeavour from Vantage Professional Risks where he was an Account Executive.

HDI Global SE has announced the appointment of Claire McDonald as Managing Director of its UK and Ireland operations. She will assume the role on 18th March 2019. Claire will join from Allianz Global and Corporate Specialty SE where she was Global Head of Operations. She has worked for over 31 years within the Allianz group of companies in a number of senior operational and underwriting roles.

Barbican Insurance Group has announced three senior promotions at Barbican Syndicate 1955. David Slade has been named Deputy Active Underwriter for the Syndicate, while Ondine Bourrut Lacouture has been promoted to the new role of Head of Insurance and Simon Saunders to the new role of Head of Reinsurance. All roles are with immediate effect.

AIG’s board of Directors has elected a new member to join its ranks – Thomas “Tom” Firouz Motamed. Motamed is the former Chairman and CEO of CNA Financial Corporation, he retired from the company in 2016.

Hastings Group Holdings Plc is about to have a new Group Chief Financial Officer. Announcing the retirement of Richard Hoskins, the tech-driven insurance provider said MS Amlin group CFO John Worth is taking over the role “within the next few months.” The latter brings experience from the likes of The Co-operative Bank, Hiscox, Aspen Insurance Holdings, Barclays, PwC and Prudential Plc.

Carillion high profile collapse last year has been described as the “largest ever trading liquidation in the UK.” However the Wolverhampton-headquartered company, formed following a demerger from Tarmac, was once considered a huge success as the second largest construction company in the UK. Willis Towers Watson has not forgotten that success and is announcing a swoop for one of the liquidated company’s top talents. Andy Kirby has joined the major projects team within UK Construction in the corporate risk and broking segment of the firm. Kirby was at Carillion for more than 30 years holding a number of insurance advisory and broking roles across its in-house insurance team and ultimately becoming its Group Insurance Risk Manager back in 2014. In his new position, Kirby, who will be based in London, will work with the UK Construction practice and be responsible for a portfolio of major clients with accountability for the development and growth of the business.

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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