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General Insurance Newsletter - Friday 18th May 2018

18 May 2018

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A new cyber insurance guide has been launched by BIBA in collaboration with CFC. The idea is that it can help Brokers understand the risks involved in the sector and the insurance solutions that can help mitigate these risks. The idea behind the guide is to cut through the jargon and offer some simplicity to what has long been seen as an overly complex product.

The CEO of the British Insurance Brokers’ Association, Steve White, has called on Brokers to speed up innovation in his keynote address at the BIBA conference in Manchester. In his speech, White challenged the insurance sector to look for ways to stay ahead and evolve systems and processes in order to thrive. He pointed to the Hackathon taking place at the event and said BIBA had taken a number of steps to promote awareness of InsurTech and identify areas that require development. White said: “We were very determined to demystify innovation for the benefit of our members and a hackathon is a fantastic way to show how accessible InsurTech and innovation can be.”

BIBA is working on a ‘dating agency’ which it claimed will help insurance Brokers to find InsurTech partners. The news came in CEO Steve White’s opening speech at the conference. For members, it will be available on the Biba website. BIBA detailed that the offering will seek to put Brokers in touch with InsurTech firms who are looking to partner with insurance Brokers in a number of different areas. It is being developed in partnership with the Insurer Covéa with assistance from Broker Direct.

Andrew Bailey, CEO of the Financial Conduct Authority (FCA), said the body was carrying out its own study on whether vulnerable customers were charged higher for remaining with the same Insurer than those who shopped around at renewal. Bailey, speaking at the BIBA conference in Manchester this week, praised the work of BIBA and the Association of British Insurers in drawing up guidelines for fairer pricing practices.

Market News

XL Catlin’s insurance operations have launched an insurance solution for the design, development, testing, and implementation of autonomous technology. Created by XL Catlin’s team of experts, the solution will offer coverage for all sectors of industry, a release said. Available globally, the solution can be customised for an individual client’s specific needs using XL Catlin’s global suite of insurance coverages, which include Liability, Errors and Omissions andwhere appropriate, Cyber and Business Interruption insurance.

In further news, XL Catlin has also launched Leisure Protect – an insurance package aimed at the mid to large visitor attraction sector and designed to provide assistance against a range of security threats and in the event of catastrophic injury. XL Catlin detailed that the comprehensive insurance package for the attractions sector would initially be available in the UK and Ireland. The proposition comes with location limits of up to $25m (£18.45m) for bodily injury, Property Damage and Business Interruption resulting from a range of catastrophic events including security-related threats, from workplace violence to terrorism.

Recognising the distinctive needs of the third sector, Millstream Underwriting has introduced an insurance package specifically designed for the likes of NGOs and global charitable institutions. Called “Caritas,” the unique proposition combines several lines of business underwritten by the Nexus Group unit. Covers include Kidnap & Ransom, Personal Accident, as well as crisis management for cases of negative publicity or media coverage.       

Allianz reported that its net income attributable to shareholders for the first quarter of 2018 posted a 6.8% rise to €1.9bn, mainly thanks to three factors. It cited lower restructuring charges and effective tax rate, as well as a higher non-operating investment result. Compared to the first quarter of 2017, total revenues were up 0.7% to €36.5bn. Allianz said internal revenue growth, which adjusts for currency and consolidation effects, was 4.9% with all business segments contributing positively. For Property and Casualty insurance, for instance, gross premiums written for this year’s first quarter increased by 1.1% to €17.9bn. The underwriting result improved as well, even with higher claims from natural catastrophes. Solvency II capitalisation ratio stood at 225%.

REG (UK) Ltd – whose online due diligence and regulatory compliance service is being used by over 3,000 insurers and intermediaries in the UK – has gone global. Expanding the coverage of its offering, REG announced that its counterparty risk management technology will now include 99 insurance markets worldwide. That means major international insurance markets such as the US, Japan, China, and Europe will be part of the network for checks and monitoring. 

Almost half of UK millennials say there is no benefit to investing in smart-home technology for increased security, new research from tech firm Auger has found. Despite the range of devices available today – from smart cameras and motion detectors to leak prevention systems – many remain unconvinced and say they are not seeing a benefit in their Home insurance premium price. Just 15% of 2,000 people questioned said they would invest in the technology and wanted to do everything they could to make their homes safer, despite the lack of incentives from the insurance industry. More than four million Brits have invested in smart devices for their homes, creating a market currently valued at £30m, according to Auger – but there is more work to be done in convincing the future generation of consumers.

Aspen has revealed it is seeking approval for a new subsidiary in Ireland. The company has submitted an application with the Central Bank of Ireland for a new subsidiary in Dublin under the name Aspen Insurance Ireland DAC – or Aspen Ireland for short. The idea is that it will allow the firm to continue to service partners and clients across the EEA with the company also planning to use Lloyd’s Belgium subsidiary through Aspen Managing Agency Limited. According to a release outlining the plans, Aspen Ireland will write insurance business in areas including Credit and Political Risk, Commercial Property, Casualty, Accident and Health.

Brierly Hill-based Cedar Underwriting is now up and running to cater to insurance agents looking for capacity for their delegated authority schemes. Headed by Business Director Jordan Gregg, the new Managing General Underwriter specialises in general commercial insurance and promises to be proactive and flexible. The West Midlands MGU, which focuses on small- and medium-sized enterprises (SMEs), said it has specialist capacity providers in both Liability and Material Damage.

Clydesdale Bank has reported its financial results for the six months to the end of March, with the numbers showing a stark contrast if you compare them to those from the same period last year. This year’s £76m loss (£95 million before tax) was a nosedive from 2017’s £30m statutory profit attributable to equity holders. The first-half loss was mainly attributed to legacy conduct costs of £220 million – from £19 million previously – in the period.  

Manchester Underwriting Management (MUM) has opened up its Cyber insurance to the full Broker market following a soft launch last year. The managing general agent had previously been working with a handful of Brokers but is looking to push ahead in 2018 with an education and preventative measures package for SME clients. The policy comes with limits from £100,000 to £5m, premiums start at £150 and excesses at £1,000. MUM stated that it can deal with one-man bands through to firms with turnover of up to £200m but was focusing on the SME sector.

Lexicon Property has bought Oasis Property Insurance Services in a deal that adds over £10m in gross written premium to the managing general agent (MGA). The deal, for an undisclosed sum, sees the Oasis team led by Nigel Attwood remain in their offices in Worthing and focus on more non-standard risks within the Property Owners sector. The deal is part of the plans for Lexicon to become a “leading MGA for mid-market Property Owners insurance”.

CBL Corporation, the parent company of Ireland-based CBL Insurance Europe and CBL Insurance in New Zealand, should go into liquidation according to voluntary administrator KordaMentha. The administrators stated in a creditor report that no restructuring proposals had been put forward yet and advised that it would be in the “best interests” of creditors to place the business into liquidation. The recommendation was made ahead of a ‘watershed’ meeting that will see creditors vote on the future of the company. The meeting is set to take place on 18 May.

The Intellectual Property Office (IPO) has ruled that Marshmallow, an InsurTech start-up, can continue using the name despite global Broker Marsh attempting to stop it. According to reports, in January this year that Marsh was looking to block the new insurance provider from using the moniker which it argued could be confused with its own in what the start-up branded a David v Goliath battle. The ruling stated that Marsh, which could be a surname or marshy area of land, was conceptually different to a marshmallow which is a “soft, sweet food”.

Coversure Insurance Services Group is set to make acquisitions following its management buyout, CEO Bob Darling has confirmed. The MBO was backed by private equity firm Livingbridge and included the Broker franchise, online wholesaler Policyfast, specialist Underwriters CUL and software house Datamatters.

One Call Insurance has formed a partnership with US-based tech provider Roost to offer “home telematics” products to its customers. The Broker said the deal will see it “disrupt the Home insurance market” with the introduction of Roost’s home telematics offering across its Home insurance product lines. One Call detailed that it will offer Roost smart water leak and freeze detectors as well as Roost smart 9V batteries with new Home insurance policies bought direct and via its aggregator partners. The Broker claimed it was the first time these features would be made available via price comparison websites. The devices will also be linked to Roost’s One Call branded mobile app.

Allianz will start absorbing LV’s commercial business at the end of the third quarter, the Insurer has confirmed. The takeover of LV’s general insurance business received regulatory approval at the end of last year. The process for switching personal lines business in the opposite direction has already begun. The first tranche via Acturis for Car, Home and Van started on 1 May for quotes and 1 June for inceptions.

Gallagher is monitoring the situation around Iran-related trading following on from President Trump’s announcement that the US will re-impose sanctions on the country. In its most recent Form 10-Q filing to the US Securities and Exchange Commission for the three months ended 31 March 2018 Gallagher reported that its UK business and Bergvall Marine in Norway had acted as insurance Broker and advisor to clients for activities related to Iran’s oil, gas and petroleum industries. It listed such activities as including the supply and transport of oil and gas to and from Iran, docking and loading oil shipments and operating service vessels to oil platforms.

ERS is launching its first digital eTrade platform for specialist products, which it said will allow Brokers to quote and buy its most niche offerings online in under a minute. The Motor insurer stated that the new platform will give Brokers access to policies that are not available elsewhere online or on a software house. ERS detailed that the new service will replace its existing offline rate calculators and bring some of its most specialist products online.

Griffiths & Armour has gone live with Acturis for its general insurance broking operation switching from SSP. The software specialists detailed that the transfer for the Liverpool-headquartered Broker included a full data migration of clients, policies, claims and documents as well as a bespoke scheme build including.

Jackson Lee Underwriting has launched a new business Travel product underwritten by Lloyd’s syndicate DTW1991. The Managing General Agent (MGA) said the product benefits from Lloyd’s A rating and can be arranged as a standalone policy. It added that the product was created for business travellers and included an easy to understand wording.

Endsleigh Insurance Services has gone live on SSP Broking in a five-year contract. The software house stated it was supporting the student specialist Broker in its growth strategy. The process at the firm, which was bought by A-Plan from Zurich at the start of 2018, began in autumn last year and the first phase has now been completed.

International General Insurance (IGI) has launched Inherent Defects Insurance (IDI), a policy designed to reduce the risk for buildings owners.

UK’s first online reverse auction marketplace for financial services, honcho, which recently secured £830,000 of investment, is undergoing a new stage of growth and has received formal authorisation from the Financial Conduct Authority (FCA). Due to launch in Autumn 2018, honcho will disrupt the commonly used - but costly - Price Comparison Websites (PCWs), by firstly allowing Car Insurers to bid for business from consumers, before eventually expanding into other personal finance products.

Announcing the creation of an integrated global operating committee, the Aon said it is ‘retiring’ its remaining business unit brands – signalling the end of Aon Risk Solutions and Aon Benfield. Last year saw the retirement of Aon Hewitt. Aon has appointed the Eric Andersen and Michael O'Connor, Chief Executives of Aon Benfield and Aon Risk Solutions, respectively, as the company’s co-presidents, with the two continuing to report to Aon CEO Greg Case and jointly heading the operating committee. 

Market Movers and Shakers

Bupa has named its incoming Non-executive Chairman, a year after Lord Leitch expressed his intention to step down at the end of 2018. Taking up the role come January 01 2019, is Bupa Non-executive Director Roger Davis, who has been with the board for almost three years.

XL Catlin has announced the appointment of Brent Hoffman as Global Head of Claims, effective immediately.

Damian Baxter, who has more than 12 years of insurance sales and software experience, has moved from Open GI to be in charge of new business development at Insurtech HUGHUB.

Global Risk Partners’ (GRP) Plum Underwriting has announced the expansion of its Broker scheme portfolio, snapping up Heidi Saxty from Midas Underwriting for the newly created role of Schemes Underwriting Head.

JLT Specialty (JLT) has appointed Hamish Roberts to lead its power specialty business based in London, and coordinate with JLT’s power specialists around the globe. JLT has also appointed leading Professional Indemnity specialist, Marco D’Ovidio, to its UK Professions team.  

Castel Underwriting Agencies Limited (Castel), the club-style MGA formation platform, has appointed Bob Cowdell as its first independent Non-Executive Director (NED).

Prestige Underwriting Services Ltd have announced the promotion of Tim Baxter to Head of Broker Development.

LV= Broker has strengthened its personal lines business with three new senior appointments. The Insurer has appointed Jonathan Santer, Clive Upton and Paul Miles as Head of Home Underwriting, Head of Personal Lines Underwriting - Standard Motor, and Head of Personal Lines Underwriting - Van, Motorcycle and Specialist respectively.

Hyperion Insurance Group has announced that Mark Stephen will join its Board as a Non-Executive Director and Chair of its Audit Committee. 

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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