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General Insurance Newsletter Friday 19th October 2018

19 Oct 2018

Insurance News

Comprehensive car insurance premiums rose by 1% (£8) in the third quarter of 2018, according to research by Confused in association with Willis Towers Watson. The findings suggested a stabilisation after previously falling at their fastest rate compared to the last time prices dropped in 2014. According to the Car Insurance Price Index the small increase ends the series of significant price cuts across four consecutive quarters, which saw premiums fall to £752 from a price peak of £847 in the second quarter of 2017.

The British Insurance Brokers’ Association (BIBA) has unveiled that the theme for its 2019 conference and exhibition will be "Leading the way". The conference will be returning to Manchester central on 15th and 16th May. The trade body noted that the theme reflected the “state of change we are all operating under”, including Brexit, the pace of technological advancements, changing customer needs and risk as well as evolving regulation and legislation.

The Association of British Insurers (ABI) has added AXA UK Chief Executive Claudio Gienal and Lloyds Banking Group general insurance and protection Director Craig Thornton to its board. Amanda Blanc, ABI chair and CEO of Zurich Europe, Middle East and Africa, commented: “Both Claudio and Craig bring a wealth of experience and insight to the ABI Board. “Their fresh perspective will be invaluable as the industry navigates through a period of unprecedented challenge, change and opportunity.”

In other news...BIBA urges Brokers and customers to write to their local MP to freeze IPT, if I were to ask you which you would rather see increased: tax on tobacco or tax on insurance, my bet would be that you would say tobacco. Insurance provides protection for millions of people whereas tobacco is a significant contributor to many health issues including heart disease and cancer. Yet, the rate of insurance premium tax has increased more rapidly than tobacco duty. Even more surprising, insurance premium tax now raises more money than beer and cider duties, wine duties and spirit duties, when alcohol-related disease also places great strain on our fantastic NHS.

Brokerbility Holdings, the parent company for the Brokerbility Network and Leicester-headquartered Broker BHIB, has reported profit after tax of £1.35m up 4% on 2017. The figures to 31 May 2018 showed that turnover was up by 5% to £11.26m and Ebitda was also 8% ahead at £2.88m. In a filing at Companies House the Directors reported that the period had been its “best ever year” as well as it “most interesting … and possibly the most challenging to date”.

Former Ingenie founder and Chief Executive Richard King is launching a new telematics motor provider, Ticker, partnering with Munich Re Digital Partners (DP). King will launch the business in early 2019, along with former Ingenie boss Mike Ketteringham. In addition, ex-RSA managing director Steve Broughton is on board as Chairman of Ticker. Broughton and King previously worked together at Ingenie.

InsurTech start-up Broker Insights has partnered with Zurich, AXA, Ecclesiastical and QBE. This follows on from its previously announced partnership with Hiscox. Broker Insights launched in January this year. Its data platform combines technology and regional Broker customer data to give insurers insight into the UK commercial Broker market.

Google owner Alphabet, via its vehicle Capital G, has taken a minority ownership stake in Applied Systems, CEO Reid French revealed at Applied Net 2018 in Nashville that the tech company had teamed up with Google ploughing a “nine figure sum” into the business. French insisted that the investment would not see applied sharing customer or Broker data with Google. 

The Ardonagh Group has agreed to sell Direct Group’s claims business to Davies Group for up to £36m dependent upon performance. Ardonagh bought Direct Group, then known as Ryan Direct Group, in April last year. At the time the Doncaster-headquartered business was a provider of insurance distribution and of claims handling services. The possibility of selling the claims business part was first rumoured last month.

The Financial Conduct Authority (FCA) has confirmed plans to widen access to the Financial Ombudsman Service (FOS) for more SMEs. The watchdog consulted on its proposals in January 2018. According to the FCA respondents strongly supported the suggested extension and provided valuable feedback on the tests for what constitutes an SME that is able to use the ombudsman service.

Expert believes tech development will aid job creation and allow time for creativity. Brokers don’t need to fear job losses through automation, a conference heard. Sharon Emek, former Managing Director of New York Broker CBS, told the Applied Net conference in Nashville that AI would not make the roles of staff redundant. “Automation does not mean fewer jobs, it means better jobs,” she said.

Tasker Insurance Group is gearing up to make acquisitions, according to Chief Executive Officer Robert Organ. Organ, who was previously CEO of Bluefin, joined Tasker in August 2017 and noted he has spent the last 13 months bringing the business together and creating a vision for the company.  He said that the firm was now looking to grow organically, but also to expand into new geographies through “selective acquisitions”.

Risk professionals who think in a strategic, commercial way and learn appropriate new knowledge and skills can look forward with confidence to the changes of the new world. That was one of the main conclusions from Airmic's first Academy Day held at the Aviva Digital Garage. The inevitable disruption will mean an enhanced role for risk management. Mark Baylis reports. The first two speakers, techUK CEO Julian David and Fujitsu's Director of strategy David Gentle, left us in no doubt of the pace of change. Julian David pointed out that, while it took Facebook 4.5 years to reach 50 million users, Pokemon Go achieved this level of penetration in just nine days. We are in the middle of a revolution powered by data, he said. "There are things you need to understand and react to…. everything is possible now to do in a digital way." He painted a fundamentally positive picture, with lots of jobs generated by AI to replace those that disappear, but he emphasised the need for people to retrain and refocus to take advantage of the opportunities.

Car insurance prices in the West Midlands have overtaken outer London for the first time on record. The cost of car insurance in the region increased +£8 (+1%) over the past three months to £939, which is more than the price paid in outer London – a notoriously expensive region for car insurance. That’s according to the most comprehensive car insurance price index in the UK based on more than six million quotes a quarter from and powered by Willis Towers Watson. It seems some motorists in the West Midlands are bearing the brunt of sky-high prices more than others. In fact, Birmingham is the most expensive postcode area in the region and the only one paying more than £1,000 on average (£1,049).

Life Insurer Just Group and the International Longevity Centre UK (ILC-UK) have revealed the shortlist for the Innovating for Ageing competition. The project, which was launched in January 2018, aims to identify innovative solutions to common causes of vulnerability among older consumers. Innovating for Ageing seeks to support the development of products and services that will cater to those at risk because of physical disability, illness, dementia, or financial exclusion.

In the face of some rocky waters, the world’s fourth largest P&I club, The Standard Club, has decided to withdraw from underwriting at Lloyd’s beginning from 2019. The club, which began underwriting marine and energy risks with Syndicate 1884 back in 2015, pointed to “current overcapacity and a weak pricing environment” for its decision – noting that Lloyd’s has a “challenging environment for it to develop a profitable underwriting business with sufficient scale.”

Pembroke Managing Agency, the London-based Underwriter, is being placed under strategic review by Liberty Mutual Insurance. The Insurer released a statement outlining its decision but offering no further details “until its completion.”

Property and casualty insurance giant The Travelers Companies has reported third-quarter (Q3) profits of US$709 million (about £541 million), more than doubling the firm’s US$293 million (about £223.5 million) net income from the same period last year. Travelers attributes its Q3 success partly to a US$436 million reduction in catastrophe losses (US$264 million in Q3 2018 compared to US$700 million in the prior year quarter) and an increase in net investment income of $58 million.

Insurance giant Gallagher has announced the acquisition of Portmore Insurance Brokers Limited and Portmore Insurance Brokers (Wiltshire) Limited (“Portmore”). Terms of the deal have not been disclosed. Southampton-based Portmore was established in 2006 as a mid-market focused commercial insurance Broker offering tailored insurance programs for both private and public sector businesses. The firm’s founders and joint Managing Directors, Graham Jacobs and Paul Chapman, have led Portmore through strong organic growth.

The London-headquartered International Accounting Standards Board (IASB) has an important call to answer – that from insurance associations who believe that the International Financial Reporting Standard 17 (IFRS 17) must not be implemented as planned. Uniting to express their concerns, nine trade bodies wrote to IASB chair Hans Hoogervorst in efforts to draw attention to two things. One is the need to delay the implementation by two years from 2021 and the second to improve the reporting standard before rolling it out.

Swiss Re has released its estimates for the third quarter of 2018, pegging its preliminary combined claims burden from recent catastrophes at approximately US$1.1 billion (around £840.5 million), net of retrocession and before tax. The reinsurer broke down the total cost, noting that claims from Typhoon Jebi are expected to be US$500 million, while the claims burden from Hurricane Florence is expected to be US$120 million. Swiss Re also said that the other US$500 million in natural catastrophe losses were mostly thanks to torrential rains/floods and Typhoon Trami in Japan, plus other disasters in North America (i.e. the Carr Wildfire in California and a windstorm in Ontario).

It’s a done deal for CYBG Plc and the financial and insurance firm founded by Sir Richard Branson. It was four months ago that CYBG announced the all-share offer to acquire Virgin Money Holdings (UK) Plc and now things have become official with the completion of the £1.7 billion swoop. Virgin Money’s new owner, which is known for Clydesdale Bank and Yorkshire Bank, said the combined group creates the first true national competitor which will disrupt the status quo in UK banking.

While the UK is busy ironing out differences with the European Union over a Brexit deal, AXA XL is making itself ready – and preparations are moving along, with the major Insurer securing in-principle authorisation for the transfer of its EU unit. Announcing the latest move in its Brexit plan, AXA XL said the Central Bank of Ireland (CBI) has approved, in principle, XL Insurance Company SE’s (XLICSE) move from the UK ahead of next year’s March 29 departure. As a Societas Europaea, XLICSE can also continue as the same legal entity in Ireland.

“Cyber” is no longer just a buzzword, that much we know, but how clear of a picture do we have of the risk, especially for small businesses in the UK? Specialist global Insurer Hiscox went ahead and examined the frequency of cyber attacks and it turns out they take place by the thousand on a daily basis. The number? An estimated 65,000 attempts every day.

Construction PI cover may be increasingly expensive and more difficult to obtain as a result of the Grenfell disaster and historic losses in the construction PI market, with Insurers requiring increased information and imposing stricter policy terms and conditions. That was one of the main conclusions of a meeting of Risk Managers in the construction sector, which is to form the basis of a new Airmic Special Interest Group (SIG). The gathering, which took place at the successful Construction Risk conference managed by Commercial Risk Europe, attracted more than twenty Airmic members from the UK and Europe.


Market Movers and Shakers

Axa XL Insurance has appointed Dan Curran as Chief Underwriting Officer for London market wholesale. He takes over the role from Paul Greensmith, who was recently named UK Chief Executive Officer of Catlin Underwriting Agencies and XL Catlin Insurance Company UK, as well as regional leader for the UK. This follows the acquisition of XL Catlin by AXA, which was completed in September this year.

Premium Credit has hired Andrew Chapman as Chief Financial Officer. Chapman, who joined Premium Credit in 2004, also joins the board of the business. A spokesperson for the premium finance provider said that Chapman had been in the role on an interim basis since its previous CFO Nayan Kisnadwala left the business in May 2018.

Brokers have stated that François-Xavier Boisseau will be “sorely missed” after his planned retirement from Ageas. The move was revealed at the same time that the Insurer announced a significant restructure, which it said was designed to simplify the business. Be Wiser Chairman Mark Bower-Dyke described Boisseau as a “true Underwriter”, who will be sorely missed.

James Hyett has been appointed by AEGIS London as cargo Underwriter. He joins from Sompo International where he was a marine Underwriter. Based in London, Hyett will report to Richard Palengat, AEGIS London’s head of marine and energy. Richard Palengat said: “James brings a diversity of experience across a number of cargo sub-classes to complement our existing portfolio. 

Bollington Insurance appoints Nick Baker as personal lines products and Pricing Director Bollington Insurance are pleased to announce the arrival of Nick Baker to the company as Products and Pricing Director for personal lines business. Nick will assume responsibility for Bollington’s personal lines products comprising van, car, home, buy-to-let, motor trade road risks and single vehicle taxi, including the application of real-time pricing and management of Insurer relationships.

Global broking business, Brokerslink has announced it has appointed José Manuel Fonseca as its new Chairman, replacing Grégory Allard who steps down after his two-year tenure. José Manuel is one of the original founders of Brokerslink and has overseen the successful transformation of the business from global network to international Broker, he is also the CEO of MDS Group and sits on the board of Directors of reinsurance firm Ed.

Bernd Pischetsrieder is stepping down from Munich Re’s supervisory board in 2019 and a familiar face has been named to take over as Chairman. Former Munich Re Chief Executive Nikolaus von Bomhard, who left in 2017 and was succeeded by current CEO Joachim Wenning, is making a comeback next year after being recommended by the nomination committee to be elected to the supervisory board. His predecessor, who is not standing for re-election, remains as chair until the Annual General Meeting.

MyPolicy Group has snapped up industry veteran Roger Ramsden to serve as group Chief Executive. Announcing the appointment, MyPolicy said the role was created to align its discrete telematics, risk pricing and data analytics offerings within a single entity amid rapid growth.

After 22 years at Carole Nash, Nick Baker is moving to Bollington Insurance. Coming on-board as products and Pricing Director for personal lines, the industry veteran brings experience from having handled insurer engagement and a motorcycle and specialist vehicle portfolio. His new remit includes the application of real-time pricing and management of Insurer relationships.

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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Market Movers and Shakers

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