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General Insurance Newsletter Friday 1st March 2019

28 Feb 2019

Insurance News

Broker, Complete Cover Group is believed to be exploring sale options. It is thought that boutique financial services investment bank and Broker dealer Keefe, Bruyette & Woods (KBW) and ‘big four’ accountancy firm Deloitte are helping with the process. Several sources suggested that the business is on the market.

Legal proceedings between PIB Group and its former employee David Wagstaff were settled last week. The consolidator initially began formal court proceedings against Wagstaff, previously a Director of PIB-owned Cooke & Mason, in November 2018 for alleged breach of his duties whilst on gardening leave. However, the case was settled before it went to court.

Ipswich-based Call Connection’s joint Administrators have stated that they intend to apply to court to extend the firm’s administration period for another year. The Broker lead generator went into liquidation in July 2017 and the administration period had previously been extended to 13 July 2019. Joint Administrators Martha Thompson and Colin Haig of accountancy firm BDO said in a document filed on Companies House that they intend to apply for another extension, likely of one year, before the current period expires.

The German legislator has adopted preliminary provisions to authorise the regulator to temporarily extend passporting rights of UK financial institutions including Insurers in the event of a no-deal Brexit. These measures allow the extension of passporting rights post-Brexit for up to 21 months. Henning Schaloske, Partner at Clyde & Co in Dusseldorf, said: “This is a welcome move by the German legislator to remove some of the uncertainty for both Insurers and policyholders in the event of a no-deal Brexit, which is increasingly being seen as a very real possibility.

Two former Chief Executives of Markel CATCo Investment Management Ltd are suing the insurance-linked securities fund manager and its parent firm for wrongful termination. In January 2019 it was reported that the abrupt exit of Markel CATCo CEO Anthony Belisle and Bermuda Chief Executive Alissa Fredricks following what Markel Corporation described as company violations relating to an undisclosed personal relationship between the two. Now Belisle and Fredricks have hit back, claiming in lawsuits filed separately at the US District Courts for New Hampshire and Massachusetts, respectively, that Markel’s policies were recently revised – without notification – essentially to justify their sacking.

QBE has published its 2018 full year results with the insurance giant announcing a US$390 million (around £298.3 million) net profit after tax – a significant improvement on the US$1.249 billion (around £955.4 million) loss it recorded in 2017. Its cash profit after tax rebounded to US$715 million (around £546.9 million) compared to a loss of US$262 million (around £200.4 million) in the prior year. The firm’s GWP was up 3% to US$13.66 billion (around £10.449 billion) but net investment yield was down 2.2% to US$547 million (around £418.4 million) due to “significant market volatility during the final quarter of 2018.”

In other news... Business insurance specialist QBE has added it Business Combined insurance product to Open GI’s Powerplace SME and Mobius platforms. Open GI detailed that the product is the first Commercial Combined offering available to its commercial Brokers and confirmed plans to add further products during 2019.

PartnerRe has published its results for the fourth quarter of 2018, reporting a net loss attributable to common shareholder of US$32 million (around £24.5 million). The company explained in its report that the figure was driven by losses related to Hurricane Michael and the California wildfires. The catastrophe events led to a hit worth US$282 million (around £216.1 million). By comparison, PartnerRe saw a net income of US$72 million (around £55.1 million) for the fourth quarter of 2017.

Thomas Miller-managed UK P&I Club is off to a good start. Announcing its renewal results for 2019, the shipping protection and indemnity mutual Insurer said it saw a net increase of 5.4 million gross tons of mutual business. This translates to mutual tonnage at the start of the new policy year at 144.3 million gross tons. In addition, a further 3.3 million gross tons have been committed to the club as part of renewal negotiations. Chartered tonnage, meanwhile, stands at around 100 million gross tons.

Ascent Underwriting has added physical damage cover to its CyberPro product, with additional backing from Munich Re. The managing general agent (MGA) noted that the product, which is part of its professional and non-tangible risks portfolio, now covers physical and property damage plus debris removal following an insured event.

Stabilis, a managing general agent focused on the private car market, has been launched by Broker Sure Thing! The MGA has partnered with Accredited (Europe) to provide capacity which is an A- rated European subsidiary of Randall and Quilter Investment Holdings (R&Q) as well as partnering with a panel of reinsurers and excess of loss providers. It has also collaborated with Davies Group who will handle an end to end claims solution.

Software house SSP has signed up to integrate InsurTech start-up Honcho’s reverse auction marketplace platform into its systems. According to SSP, connecting the two will give over 700 of its Partner Insurers and Broker customers access to Honcho’s platform. Honcho has previously stated it will disrupt the car insurance sector, particularly price comparison websites, by allowing car Insurers to bid for business from customers.

Staysure has developed an online tool aimed at helping disabled people find winter sports resorts that cater to their conditions. It has been designed to support and overcome the common misconception that people with conditions like Down’s Syndrome, visual impairment, amputations and paraplegia can’t do winter activities like skiing and snowboarding.

Jardine Lloyd Thompson has revealed a drop in pre-tax profit to £88.1m for 2018, compared to £177.1m in 2017. According to its preliminary results statement, published on the London Stock Exchange, this reflected £145.4m of exceptional items consisting primarily of costs related to the acquisition by Marsh & McLennan Companies (MMC), regulatory costs and restructuring charges. Costs related to the takeover by MMC reached £77.2m, mainly made up of staff costs.

Coversure Insurance Services Group has rebranded to the Jensten Group. Jensten Group comprises of online wholesaler Policyfast, specialist insurance Underwriters City Underwriters and franchise operation Coversure. It noted that the Jensten Group brand would allow each of the businesses to “further build their own identity”.

The Association of British Insurers has issued its harshest caution on Brexit and warned that any future arrangement with the EU that required the UK to comply with rules it had no say over could be “weaponised”. Huw Evans, Director general of the ABI, stated at its annual dinner that a no-deal Brexit “would be an unforgivable act of economic and social self-harm that the UK would live to regret”.

Four people have been sentenced for their part in a scam which saw 100 pieces of data a week stolen from AXA Insurance between July and December in 2015. The City of London Police’s Insurance Fraud Enforcement Department (IFED), which worked closely with AXA during the investigation, discovered that between 15 July 2015 and 30 December 2015, employee Shane Jerman stole customer data and passed it onto ex-employee Stuart McGill, who in turn sold it onto Jack Greenwood and Andrew Franks for their claims management company (CMC).

Hiscox has reported increased GWP of $3.8bn (£2.9bn) for the full year 2018 compared to $3.3bn in 2017. Profit before tax also improved dramatically, rising from $40m to $137.4m while COR went from 98.8% to 94.9%. In the UK GWP shot up 11.5% to $799.5m (2017: $717.1m).

The ARAG Group continues to move ahead with the internationalisation of its legal insurance business and is now about to launch operations in the Republic of Ireland. To that end, the family-owned enterprise based in Düsseldorf has agreed to acquire the Irish business operations of DAS Legal Expenses Insurance Company Limited in the Republic of Ireland which is part of the ERGO Group. ARAG and the DAS UK Group reached agreement on the business transfer and retention of the present staff in February 2019.

Direct Commercial Ltd, 2018 CIR Insurer of the year is now shortlisted in 3 categories for 2019 awards. After the fantastic win in the 2018 CIR Commercial Insurance awards DCL have now been confirmed as shortlisted for 3 awards at the 2019 event to be held on 7th March in London. This year, in addition to being up once again as Insurer of the Year, the business is also being considered for the ‘Insurer Claims Team of the Year’ and ‘Initiative of the year’, again for the claims team who continue to work on delivering excellent customer service.

Sixty-three InsurTech deals with a total value of $1.59 billion were announced world-wide in Q4, 2018, up 24% and 155% respectively over Q4, 2017. The total, including all-stage investments in property/casualty and life & health ventures, is the second-highest ever behind the exceptional second quarter of 2015, according to the new Quarterly InsurTech Briefing from Willis Towers Watson.

RSA UK has posted an underwriting loss of £106m in 2018, along with a combined operating ratio of 104% (2017: 104.3%). This follows its shock warning last year that it had suffered a loss of £70m in the third quarter of 2018. In addition, net written premiums decreased slightly for the UK business to £2.59bn in 2018 from £2.69bn in the preceding year, which the provider noted was due to exiting parts of its portfolio in its London Market international business.

The Financial Conduct Authority has urged all general insurance organisations to make the necessary changes to protect customers from the negative impacts of leaving the EU. It has published updated guidance for general insurance firms in finalising their preparations to assist with as smooth a transition as possible when the UK leaves the EU. A key focus for the sector is minimising the disruption for European Economic Area (EEA) based customers and risks, in a no-deal Brexit. There may also be implications for travel and motor insurance (e.g. the need to obtain a Green Card when driving in the EEA).


Market Movers and Shakers

Keith Curling, formerly Managing Director at Carmichaels – a Davies company – has joined QuestGates. Keith joined Carmichaels as a Partner in 1993 and was then Managing Director for a number of years before the business was acquired by Davies in 2015. He continued to lead the Carmichaels team following the acquisition.

CFC, a specialist insurance provider and pioneer in emerging risk, today announced the appointment of Jonathan Fletcher as Chief Technology Officer. Fletcher, formerly Group CTO at Hiscox, will oversee CFC’s technology and infrastructure strategy and lead the company’s fast-growing development and application support teams.

Aon has confirmed that Joe Henderson has decided to leave the firm effective immediately. Aon bought Leeds-headquartered Henderson Insurance Brokers in October 2017, after the possibility of the deal. According to Aon, Henderson left the business after a “successful year of integrating” the Broker with Aon.

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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