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General Insurance Newsletter Friday 18th October 2019

18 Oct 2019

Insurance News

Prudential Plc has received resounding approval from shareholders for the demerger of its UK and European savings and investments business. At the British insurance giant’s general meeting in London, 99.43% of the votes cast by shareholders were in favour of the proposed split with M&G Plc. The demerger from the parent firm will result in two separately listed companies, with M&G shares to be admitted to trading on the main market for listed securities of the London Stock Exchange. On completion of the split, shareholders will hold interests in both Prudential and M&G.

The rising benefits cost and the challenge of appealing to a diverse staff are among the troubles faced by UK employers, according to the 2019 Benefits Strategy and Benchmarking Survey released by global broking and risk management giant Gallagher. Conducted among 243 organisations across the UK, the poll found that 71% of businesses struggle with the increasing costs of benefits while 67% find it hard to appeal to a workforce with varying preferences. It was also found that a mere 22% of companies offer some form of flexible benefits, amid implementation challenges including negotiating with providers and choosing a delivery method.

Ethos Broking has been providing plenty of firepower to its partner firms in recent times – as indicated by Saffron Insurance’s recent hat-trick of deals – and now another major acquisition has been sealed. Weald Insurance have revealed its first deal since becoming an Ethos Broking Partner last year, snapping up Sussex-based regional Broker Cronin Underwood. The move will see Cronin, currently based in Eastbourne, transfer to Weald’s office in Kent with immediate effect. The local Broker, established in 2005, has become highly respected in the field of commercial lines with strong ommercial Combined and Property Owners’ books of business – something that Weald MD Chris Gibbs is keen to build on.

The recently concluded International Forum of Terrorism Risk (Re)Insurance Pools (IFTRIP) conference in Brussels has been described as the largest gathering of international Terrorism reinsurance pools, Insurers, reinsurers, security specialists, academics and thought leaders in the industry. One of the key areas delved into is the link between capital markets and reinsurance risk, with investors finding Terrorism cover a useful but complex diversifier for insurance-linked securities funds. Twelve Capital cat bond strategy lead Florian Steiger, who spoke at the conference, pointed to the possibility of Haulage Terrorism cover reaching up to 4% of investment portfolios amid the shift away from pure natural catastrophe risks.

Commercial P&C Insurer FM Global has opened a $16 million new testing facility to push the boundaries of electrical hazard testing. Following two years of construction, the new Electrical Hazards and Gas Detection Laboratory – located in FM Global’s research campus in West Glocester, RI – is finally open. The new facility is designed specifically to test industrial grade electrical and gas detection equipment with greater precision, allowing those products to be certified as explosion-proof, flameproof and/or suitable for use in hazardous locations.

B.P. Marsh & Partners Plc has released its interim results for the six months ended July 31 and Chairman Brian Marsh is optimistic about what’s left of the financial year. The specialist investor in financial services intermediary businesses reported a profit after tax of £5.6 million; higher net asset value (NAV) of £130 million; and a 4% rise in the equity value of the portfolio in the period. In addition, B.P. Marsh has a £3 million loan facility available to use for investment. It was noted that Nexus Underwriting Management Limited secured an additional £16 million in new loan facilities and also completed the acquisitions of a specialist Trade Credit Broker and a London-based Financial and Professional Lines managing general agency.

Price Forbes has announced the launch of a US Healthcare practice. The practice will be headed by industry veterans Paul Voller and David Fairbank. Voller will lead the practice, while Fairbanks will serve as Executive Director. The practice, based in London, will focus primarily on the US healthcare sector, arranging insurance, captive reinsurance and treaty protection for clients, complemented by placements for Cyber protection. The launch marks a substantial expansion of Price Forbes’ Healthcare practice, the company said. Non-US international Healthcare will continue to be led by Tomer Karni, Executive Director.

The American dream is defined as “the ideal by which equality of opportunity is available… allowing the highest aspirations and goals to be achieved”. Now one UK-based firm is looking to earn its stripes and reach for those US stars – but not by launching with “equality of opportunity” but instead by offering what it believes is a series of distinct market advantages to potential Insurer partners. That firm is Davies Group, a claims solution company which describes itself as “reimagining operations and digital solutions.”. In mid-September, the firm expanded further into the US with a swoop for Ohio-based Frontier Adjusters establishing the independent adjusting arm of the company alongside its existing US businesses which include its captive management offering Quest, as well as its insurance audit and inspection businesses.

The perpetrator of the March 2017 gas blast in New Ferry, which injured more than 80 people and caused damage to over 60 properties, has been brought to justice. Pascal Blasio, the Owner and sole Director of furniture shop “Homes in Style,” was convicted on October 14 at Liverpool Crown Court on two counts – causing an explosion likely to endanger life and making a fraudulent insurance claim with NFU Mutual. A release by Merseyside Police said the case has been adjourned until October 23 as pre-sentence reports are prepared.

ServiceMark Accreditation with Distinction, the highest possible recognition from the Institute of Customer Service, has been awarded to Covéa Insurance’s commercial and High Net Worth claims teams. “Benchmarking our service means that we can understand both our strengths and what we need to focus on to ensure customers are always at the heart of what we do and that our service continues to evolve and improve,” said Director of Claims Customer Operations Stephen Walker.

Global broking and risk management giant Gallagher has widened its operations in Sweden with the purchase of Helsingborg-headquartered insurance Broker Proinova. The acquisition, financial details of which were not disclosed, will allow Gallagher to strategically extend its geographic presence into the country’s southern region while at the same time adding new areas of expertise to expand its capabilities in Scandinavia. Proinova offers complementary specialisms to Gallagher’s existing Swedish operations.

BIBA has unveiled the theme for the 2020 conference at Manchester Central (May 13-14) - A Year to Pioneer. This is meant to inspire the sector as the UK embarks on what is likely to be a new era with its changing relationship with Europe, new technologies, new markets and new sentiments that are forcing businesses to think differently.

Q Underwriting Services Ltd – the PIB Group division that came to life in January to unite specialist underwriting brands TFP Schemes, Thistle Underwriting Services, and aQmen Underwriting Services – has created a Managing General Underwriter (MGU) to be led by Matthew Schofield. Appointed as MGU Managing Director, Schofield makes the shift from UK General Insurance Group where he served as Chief Commercial Officer. The key arrival’s credentials also include his three-decade career at Zurich.

Authentic Jobs, a US-based jobs board used by companies including the New York Times and accounting firm EY made 221,130 CVs publicly accessible. Sonic Jobs, a UK retail and restaurant jobs app used by the Marriott and InterContinental hotel chains, exposed 29,202 CVs. The total numbers may be higher as the service used to detect the leaks only refreshes irregularly. Both firms exposed the CVs through their cloud storage service, which stores data in servers connected to the internet. The firms made the settings on their "buckets" - cloud storage folders provided by Amazon Web Services (AWS), the biggest cloud service in the world - public. This meant that when someone applied for a job their CV was available for anyone who knew the location of the bucket to see and download. Student Akilah Elder, who used Sonic Jobs to find part-time work, had her CV exposed. "I am worried about the fact that my address is out there and my phone number," she said. In a statement, Sonic Jobs said it was immediately reviewing how the storage system had been left public.

Castel Specialty has entered the Construction and Engineering market with a new offering. The firm said it is looking to focus on small to medium scale projects and annual business in the areas of general buildings, power generation, oil and gas, manufacturing and heavy industries. The new proposition will be headed up by Colin Rose, who joined Castel as Head of Construction and Engineering in April 2019 after 15 years at Beazley.

Professionalism is the most important factor for customers when they choose their Broker, according to a survey conducted by Global Risk Partners (GRP). Around 5,000 respondents said lowest price, then ease and convenience of placing insurance, followed professionalism in the rankings. The data showed: 33% of responded ranked professionalism as most important, 28% ranked lowest price as most important, 19% said ease and convenience were the highest priority, 14% wanted to deal with a local Broker and 9% suggested quality of policy wording was most important.

The Financial Conduct Authority (FCA) has published a statement warning the public that Broker Insurance Services has been cloned. According to the regulator, fraudsters have set up a website; phone number; email address and physical address claiming to be Broker Insurance Services. The actual firm is based in Twickenham, Middlesex while the fake clone has stated that it is based in a business centre in North West London.

Finch Group has purchased Martinez & Partners for an undisclosed sum. Companies House was notified that Finch Group had taken a controlling interest in the Broker on 4 October. According to the document, as part of the deal, Henry Travis, Jonathan Evans, and Graham Duerden stepped down as Directors at Martinez & Partners, with Evans also giving up significant control in the company.

MS Amlin has confirmed its exit from the Aviation insurance market. From 14th October, the Insurer will no longer write Aviation insurance renewals or new business. The decision excludes the Aviation Hull War portfolio, which will continue to be underwritten by MS Amlin’s war team. Simon Beale, Chief Executive Officer at MS Amlin, said: “The run-off of the Aviation insurance book will allow us to focus our attention on our new underwriting strategy and build on the progress we have made in restoring profitability.”. 

CLS Risk Solutions has launched Public Procurement Indemnity insurance to the Broker market. The policy protects developers against losses arising from a successful challenge to the awarding of a public contract. CLS claims the policy is unique to the market.

Allianz Chief Underwriting Officer Neil Clutterbuck has made the following comments on the building safety standards legislation referred to in the Queen’s Speech. “It is reassuring to see that Dame Hackett’s review is being taken forward and that this important topic remains on the Government’s agenda. Modernising and reinforcing standards to ensure that the safety of all buildings is improved is crucial. That said, how the recommendations will be implemented and the extent to which they address some of the fundamental challenges pertaining to modern methods of construction remain to be seen.”

Furthermore...AXA Insurance Director of Mid Market and Customer Risk Management Douglas Barnett has commented on the building safety standards legislation mentioned in the Queen’s Speech. "AXA welcomes the Government's focus on building safety standards in the Queen's Speech as it could bring significant and needed safety improvements. For too long there has been inconsistency in this area and we hope that this legislation will be made a priority so people can feel safe in their homes. As the Government works on the details of this new law, we hope Ministers will consider the proposals we’ve submitted in the recent consultation on building safety regulations. Fire risk assessors should hold appropriate third-party certification. Future safety regulations should apply to residential buildings of 18 metres or more (and not just from 30 metres), as well as any building housing vulnerable people. Communication with residents should be free of jargon. And implementation of safety measures should be enforced across the entire life span of buildings."

A man has been jailed after he attempted to make a series of fraudulent claims on policies he’d been able to secure by lying to Insurers about his poor insurance history. He also diverted approximately £18,000 into his own account when he worked at a claims management company and attempted to divert nearly £17,000 more. On Thursday 10th October 2019, at Leeds Crown Court, Mohammed Aumran, 42, of Leeds, was sentenced to three years and one-month imprisonment. A month earlier (Monday 9th September 2019), at the same court, he pleaded guilty to six counts of fraud by false representation and one count of fraud by abuse of position.

Acturis, the leading Software-as-a-Service provider to the insurance industry, is expanding the e-trade capabilities of its award-winning platform with the launch of its first Cyber add-on product by HSB Engineering Insurance. The launch sees HSB Engineering Insurance, part of Munich Re, become the first Insurer to go live with the Cyber add-on solution on the Acturis platform. Following the successful launch of the HSB suite of Construction insurance products on Acturis last March, the specialist Engineering and Construction Insurer worked with Acturis to build a Cyber product that will strengthen the Insurer’s e-trade offering.

Expectations are that when the Civil Liability Act comes into force next year, the behaviour of fraudulent injury claims will shift and evolve. Unfortunately, history shows that fraudsters are quick to adapt and will almost certainly find new and imaginative ways to carry out insurance fraud. However, the industry continues to make significant progress in combatting fraud. Advances in data analytics and information sharing are informing Insurers fraud strategies, helping second guess fraudsters and anticipate the likely impact of legislative changes like the Civil Liability Act.

International General Insurance Holdings Ltd. (“IGI” or the “company”) and Tiberius Acquisition Corp. (NASDAQ: TIBR) (“Tiberius”), a publicly traded special purpose acquisition company, announced that they and certain related parties, have entered into a definitive business combination agreement which will result in the public listing of IGI. Under the terms of the agreement, IGI and Tiberius will combine under a new holding company to be domiciled in Bermuda, International General Insurance Holdings Limited, Bermuda (“IGI Holdings”) and IGI Holdings is expected to be listed on the Nasdaq Capital Market under the symbol “IGIC”.

GreenKite an independent consultancy firm dedicated to providing advice and support and solutions for the Insurance and Financial Services industry, has launched. Managing and growing a business means pains and they rarely stay neatly in one area of the organisational chart. GreenKite gives businesses the power to simplify the complexity wherever it falls. By engaging GreenKite as a Partner and Advisor, ambitious firms – from startups and scale-ups to established firms – are able to continue running operations in a complex, fast-moving environment, with the option of ‘turning on’ GreenKite’s support when they need it.

A loyalty platform designed for Brokers has been developed by Stubben Edge Group. Stubben Edge Loyalty will enable Brokers to offer their customers rewards from a wide range of retailers including Hotels.com, Pasta Evangelist, The Carwash Company and Vision Express. Stubben Edge reported that the platform can be white-labelled and has been created to help brokers increase retention and engagement rates by adding new touchpoints throughout the policy lifecycle.

Flock Cover has announced that it will exclusively supply Skyports with drone insurance. Skyports is a drone delivery firm based in London which aims to develop a global drone delivery network. The deal includes scaled premiums based on test flying, flight durations, and multi-flight discounts.

Ashwin Mistry, Chairman of BHIB, has expressed concern that Cyber insurance could become an “un-selling scandal” if the insurance industry does not step up its game. Speaking to journalists at the Applied Net conference, Mistry detailed: “I believe Cyber could become the next PPI [payment protection insurance], not in terms of a mis-selling scandal but a non-selling scandal.".

Complaints data from the Financial Conduct Authority has highlighted the most complained about firms in the GI space. Aviva was the most complained about Insurer in H1 2019. The provider received a total of 142,581 complaints from customers about insurance during the period, resolving 30.7% within three days and a further 60.9% within eight weeks.

Underinsurance is one of the biggest challenges within our industry. Aviva know that for 85%* of people, it’s their number one concern. Whether it’s clients not following expert advice or businesses not understanding how their risk might change over the period of insurance – leading to potential underinsurance or gaps in cover. Aviva could help analyse client’s business, identify the potential gaps in cover and provide a solution to help ensure their level of cover will keep them protected. Introducing Commercial Intelligence Tool (CIT) - CIT uses trusted third-party intelligence and internal data to provide insight into client’s needs and helps to identify potential gaps in cover.

A former government lawyer and Home Office border guard who used multiple identities in order to play the victim of a motor accident and then legally represent the other driver was yesterday sentenced to eight months in prison for contempt of court. Muhammad Bilal, 36, of Hayes, Middlesex, claimed financial compensation for whiplash-type injuries sustained when he was apparently involved in an accident with Adnan Shah in Hayes in 2014. Shah’s insurance company refused to pay the claim as they believed the accident was staged.

The Chartered Insurance Institute has launched the Society of Underwriting Professionals, with David Williams, Managing Director of underwriting at AXA Insurance UK currently acting as the chair of the new professional body. The Society of Underwriting Professionals will provide technical advice and support to underwriting professionals as well as relevant and accessible support for their professional development. Good Practice Guides tackling subsidence issues for underwriters, the Senior Managers & Certification Regime and Vulnerable Customers are available on the society’s website.

The QBE Business Insurance supercomputer is predicting that this weekend’s Rugby World Cup quarter final between England and Australia will be a tense affair with virtually nothing between the teams. A 22-22 draw after 80 minutes is predicted by the supercomputer based on a complex formula developed by QBE actuaries whose day job is to predict the impact of catastrophes such as earthquakes and floods on businesses. Before the World Cup began, the QBE Rugby Predictor gave Australia a 69% chance of making it to the semi-finals and England 56%, which would suggest that if the match goes into extra time, it will be Australia who triumph.

The prospect of a no-deal Brexit has never been higher and the impact on many firms could be significant. To help Brokers understand where they may have exposures to a no-deal Brexit and to help with steps that may need to be taken to mitigate those where possible, BIBA are launching a series of Brexit Roadshows in four areas of the UK. BIBA will be bringing Brexit experts from KPMG who we are working with on a comprehensive Member Brexit toolkit.

AXIS Capital Holdings Limited has announced a new policy addressing thermal coal and oil sands-related underwriting and investments. The policy is a component of a broader corporate citizenship program led by AXIS General Counsel Conrad Brooks, and overseen by AXIS President and CEO Albert Benchimol and the Corporate Governance and Nominating Committee of the AXIS Board of Directors. The program focuses on four key areas: environment, diversity & inclusion, philanthropy and advocacy.

Market Movers and Shakers

AXA XL, the Property & Casualty and Specialty risk division of AXA Group, has promoted Senior Class Underwriter Peter Welton to UK Head of Energy. The Marsh alumnus, who came onboard AXA XL predecessor company Catlin Underwriting Agencies Ltd in 2005, will be in charge of developing the UK Energy book as well as designing innovative insurance solutions for Energy clients.

RKH Specialty, as part of its ongoing Aviation expansion, is boosting the company’s specialist Aviation team in London with the arrival of Jason Humphreys and Alex Robinson early next year. The two will be making the switch from Marsh, with Humphreys coming onboard in February and Robinson in March after discharging their obligations under their current contracts.

Globe Underwriting, which in August brought in engineering underwriting Head Peter Rossell, has recruited Dan Watson as Senior Engineering Underwriter. Joining the UK Managing General Agent’s new engineering unit effective immediately, Watson brings more than 15 years of industry experience – over a decade of which was spent in Engineering underwriting.

AXA Investment Managers (AXA IM) Chief Executive Andrea Rossi, who has been at the helm since 2013, has decided to leave the CEO post. Effective December 01, AXA Group Deputy CEO and Group Chief Financial Officer Gérald Harlin will become Executive Chairman of AXA IM. On the same date Rossi will take on the role of Strategic Advisor to Harlin, whose Executive Chairman appointment represents what the group called “the next phase of AXA IM’s strategy” and will also mean the postponement of his previously announced retirement.

Global broking business Brokerslink has announced that it has appointed Ariel Couto as Americas Regional Manager. In his new role, Couto will work with Brokerslink’s American representatives to strengthen the company’s presence in the region. He will also be responsible for identifying opportunities for cross-border collaboration and business development between Brokerslink’s independent Brokers in North and South America and facilitating communication with the company’s wider global network.

Allianz Insurance has announced three new appointments across its SME and corporate partner team. Taking up the position of SME Branch Manager, Hayley Colraine will be responsible for the Lancaster small business branch, working closely with Allianz branches and managing relationships with Brokers and partners. Marie Doherty has been appointed to Partnership Manager for corporate partner. Marie has worked at Allianz for 12 years and moves to the position from her previous role as Key Account Manager. She will take the lead on Allianz’s corporate partner arrangements. In addition, with the effect from 1 November, Chris Long will join the SME and corporate partner team as Partnership Manager. Prior to this, Chris undertook the role of Executive Assistant to the Broker Markets Directors. In his new role, Chris will drive Allianz’s profitable growth ambitions across corporate partner and SME.

In further news...Allianz Insurance has appointed Hollie O’Neill to Claims Operations Manager in Birmingham. In her new position, Hollie will lead the Motor Trade Claims team at Allianz’s Birmingham Centre of Excellence. She will be responsible for ensuring operational best practice across motor trade claims, driving technical excellence and delivering a high level of customer service.

Centor Insurance & Risk Management Ltd is delighted to announce the appointment of former Aspen Risk Management Founder and Director, Geoff Crisp as Chairman of the Board, subject to FCA approval. Geoff brings with him over 40 years of experience within the industry, in both underwriting and broking and we are thrilled to be able to welcome him into the Centor Family.

First Central Group has announced three new appointments to its leadership team as it positions itself for commercial growth. Ben Tomasetti has joined as Chief Commercial Officer. He will shape the Insurer’s digital and retail pricing programmes, as well as focusing on broader areas of strategic change. Elsewhere, Gareth Howell has joined as Chief Underwriting Officer and will lead the technical functions of First Central to help maintain its market-leading capabilities. Gareth started his career in pricing and underwriting at Zurich, where he worked for 11 years, before moving to AXA in 2012. Meanwhile, Paul Priestley has been appointed as Counter Fraud Director and brings extensive knowledge and experience of the fraud market from Hastings Direct.

 

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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