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General Insurance Newsletter Friday 1st May 2020

01 May 2020

Commercial Property MGA, EPUL has joined forces with event-based flood insurance Provider, FloodFlash, to provide a dedicated rapid pay out and recovery solution for property investors. EPUL detailed that FloodFlash addresses the costs, time and uncertainty associated with traditional flood insurance. It enables property investors to access specific cover for flooding where it is not available or cost prohibitive. Brokers will be provided with a FloodFlash quote alongside renewal and new business quotes for EPUL’s Solutions and Omnibus specialist Property Investor policies where flood cover is excluded or where an enhanced excess has been imposed.

The UK Broker Awards is accepting submissions for 2020 and, at present, it is still hoped the event can take place on 11 September at The Brewery in London. A top judging panel has also been assembled and will be looking at the entries either in person on remotely shortly after the submission deadline of 26 May. This year they have also included a fresh, one off category, to highlight how Brokers have responded to the coronavirus pandemic and they have also developed a diversity and inclusion prize.

The Financial Conduct Authority (FCA) has said its PPI campaign “significantly increased awareness” of the claim deadline among consumers. According to the watchdog, the initiative, designed to make the public aware of the PPI claimant deadline on 29 August 2019 and explain how to check for PPI, reached 32m people. The campaign also led to 6.2m people visiting the FCA’s dedicated PPI website and 110,000 calls to the FCA’s dedicated PPI helpline.

Worry+Peace, the reviews-led insurance marketplace set to connect the sector, and leading UK Broker Be Wiser, are delighted to announce a marquee partnership - the first of its kind for the InsurTech. The deal means that Be Wiser will embed Worry+Peace reviews as a core part of their customer feedback mix. This reviews-led approach by the insurTech uses a custom-built method feedback platform to give providers like Be Wiser deeper insight into their customers' views and experiences of dealing with their business.

AXIS Capital Holdings Limited has announced an estimated net claims provision of $300 million, pre-tax, for the first quarter related to catastrophe and other weather-related events. This amount includes an estimated net claims provision of $235 million, pre-tax, for the COVID-19 pandemic. The company's estimated net claims provision for COVID-19 is largely attributable to Property related coverages, but also includes Event Cancellation and Accident & Health coverages, and considers a global shelter in place order that remains in effect until July 31, 2020. Other-weather related events of $65 million, pre-tax, includes regional weather events in the United States, U.K. floods and Australia wildfires.

Global Reinsurers saw robust capital growth in 2019, although underlying returns remained low, according to the latest Reinsurance Market Report from Willis Re. Total capital dedicated to the global reinsurance sector was US$605 billion at the end of 2019, reflecting year-over-year growth of 15%. The growth was driven primarily by 2019’s strong investment market performance, and was achieved despite a 3% contraction in alternative capital, Willis Re reported.

In October of 2019, reports indicated that the German insurance giant Allianz was seen as the favourite to invest in the bancassurance business of Spanish lender BBVA, and today Reuters has reported that Allianz has struck a deal to invest in this business. According to the newswire, two sources close to the matter have revealed that Allianz has agreed the deal with BBVA, and that an announcement could come soon. The sources indicated that the two institutions will cooperate on Property and Casualty insurance but not on Life insurance, and that the deal will be worth significantly less than the originally touted €1 billion.

Pioneer Underwriters and K2 Insurance Services have announced that they have signed terms for a transaction that will transfer Pioneer’s ongoing underwriting portfolio, along with underwriting and support staff, to K2. The transaction is expected to close by the end of the second quarter, subject to regulatory approval. The transferred business includes underwriting units specialising in Property Catastrophe, Reinsurance, Financial Institutions, International Property Facultative and Marine Specialty. The units will continue to be based in London. Together they will underwrite about £150 million in gross written premium this year.

Stefan Lippe, who was Group Chief Executive at Swiss Re until 2012 before he moved to AXA to serve as a Director, has passed away. “Our heartfelt condolences and thoughts go out to his family at this difficult time,” said Swiss Re in a statement. “Stefan Lippe was appointed group CEO of Swiss Re in spring 2009. This was a particularly challenging time for the company.

Digital MGA C-Quence has revealed that Zurich Insurance will provide further capacity for its Management Liability and stand-alone D&O products. Jacqueline McNamee, founder and CEO of C-Quence, stated that the move will allow the MGA to broaden its Financial Lines proposition. She added: “We are extremely pleased that Zurich has agreed to provide additional capacity for our Financial Lines products.

Somerset Bridge Owner Arron Banks and Director Elizabeth Bilney have settled a complaint against the Electoral Commission. The dispute relates to loans totalling £8m provided to Better for the Country and Leave.EU from Banks’ Isle of Man-based company Rock Holdings. A joint statement read: “The Electoral Commission, its Chief Executive Mr Robert Posner, Mr Arron Banks and Ms Elizabeth Bilney wish to announce that they have agreed amicable terms of settlement of a complaint raised by Mr Banks and Ms Bilney over the Electoral Commission’s announcement on 1 November 2018 of its referral of Mr Banks and Ms Bilney to the National Crime Agency for further investigation over possible electoral offences in connection with the UK’s 2016 EU membership referendum.”

Pet insurance specialist Animal Friends Insurance has announced a new partnership with Aviva, following a twelve-month tender process. Animal Friends Insurance, whose head office is based in Amesbury, was selected by one of the UK’s leading Insurers, Aviva, to provide and manage Pet insurance policies for new customers. Aviva customers visiting Aviva’s website or app to buy Pet insurance will now be introduced to Animal Friends Insurance.

Randall & Quilter Investment Holdings has announced US$100 million of new equity investment by way of:
1. An US$80 million subscription by Bricknell Insurance Holdings, an investment vehicle controlled by 777 Partners, for a new series of preferred stock issued by R&Q subsidiary Randall & Quilter PS Holdings, which are exchangeable (subject to certain terms and conditions) for ordinary shares in the capital of the company.
2. A US$20 million subscription by funds managed by Hudson Structured Capital Management for 11,902,318 new ordinary shares.
Proceeds of the investment will be used to invest in the growth of R&Q’s program management and legacy businesses, the company said.

The Financial Services Compensation Scheme (FSCS) declared 12 failed regulated firms in default during March 2020. The list included Ipswich-based A.J. Cook Insurance Brokers. According to Companies House the Broker was dissolved in 2017. FSCS noted that a declaration of default means a firm is unable to pay claims for compensation made against it.

Lancashire Holdings Ltd (Lancashire) is the latest to announce its trading statement for the three months ended March 31, 2020. In a strong start to the year, the group revealed that its gross premiums written increased by 11.8% year on year to $242.8 million (around £194.9 million) and across Lancashire’s four principal segments, Property, Energy and Aviation gross premiums written increased while in Marine a decrease was reported. The increase in Property was largely accredited to new business with rate and exposure increases also contributing to the growth. The jump was somewhat offset by a reduced level of reinstatement premium compared to the first three months of 2019, and some business which was not renewed.

 

 

Coronavirus-related News

In an open letter to Aon employees (27th April 2020) Greg Case, Aon CEO requested that staff support the firms decision to implement “temporary compensation reductions”, essentially a paycut for 70% of the workforce.

Lloyd’s Chief John Neal has suggested that the coronavirus pandemic is likely to be the most expensive event in history for the insurance industry, including widescale disasters such as Hurricane Katrina and the 9/11 terror attacks. Neal said that the pandemic was the largest insurance challenge ever faced by the industry and that losses of tens of billions, if not hundreds of billions, will be discussed over time.

Claims pay-outs related to Covid-19 are expected to reach over £1.2bn, according to initial estimates from the Association of British Insurers (ABI). The trade body detailed that this covers payments on Business Interruption, Travel Insurance, Wedding policies and cancelled school trips. The estimate forms part of the ABI’s response to the Treasury Select Committee, which it said sets out how Insurers continue to support their customers throughout the coronavirus crisis.

HM Treasury confirmed to Biba that small and medium-sized Brokers are eligible for their scheme. Small and medium sized brokers can borrow between £2,000 and £50,000 from the government’s bounce back loan scheme. The Executive Director of the British Insurance Brokers’ Association, Graeme Trudgill, stated that the Treasury had confirmed that SME Brokers would be accepted on to the scheme. The loans can be obtained through accredited lenders and the government guarantees 100% of the loan.

Insurers, law firms and suppliers have agreed a statement of intent designed to maintain the Personal Injury claims process through the Covid-19 crisis. The statement was put together by the Association of Consumer Support Organisations (ACSO) in partnership with the Association of British Insurers (ABI). Recommendations include undertaking many non-MedCo medical examinations by remote video examination, and ACSO stated that it has also been done that for many claims rehabilitation, including physiotherapy and psychotherapy, can be done remotely.

Hiscox Action Group – which is in dispute with Insurer Hiscox over refused Covid-19 related BI claims – is being supported by Harbour Litigation Funding to take its case to court. The consortium of 200+ companies appointed law firm Mishcon de Reya last week to fight its corner. The legal firm is now working with Harbour Litigation Funding to look into the claims of the Group.

Insurers and Brokers have shared a lukewarm response to the automatic rebate of £25 per customer – collectively £110m - by Provider Admiral announced last week. One senior industry Broker questioned the motives of the group. “It is an interesting move. To my mind they do not have a huge reputation for customer altruism. It makes me wonder why they are doing it.” He added: “It looks like they are trying to get good news stories.” The Broker, who declined to be named continued: “£25 is not really much to a young driver with a high premium. It should be proportionate to the cost of the premium.” Motor disrupters have been pressurising traditional providers to give back premium to customers while vehicles are used less during lockdown.

Insurance claims are among the most likely to succeed in UK courts, according to data analysed by law firm Herbert Smith Freehills. The firm warned that the industry will be under scrutiny for the way it responds to the current pandemic. A number of action groups have threatened to take providers including Hiscox, QBE, RSA and Ecclesiastical to court for refusing to pay coronavirus-related claims.

Ecclesiastical has teamed up with social media experts Factor 3 to develop a guide for Brokers on how to manage Twitter, LinkedIn and other social content during the coronavirus pandemic. ‘Staying Social during Covid-19’, is a ‘do’s and don’ts’ guide to help Brokers navigate social media throughout the outbreak. According to the Insurer it has been developed to help Brokers keep connected with their customers during the Covid-19 crisis and is part of its Social Club programme.

Mel Stride MP, chair of the Treasury Committee, has urged Insurers to be clear and fair with coronavirus claimants. The committee wrote to the Association of British Insurers (ABI) on 25 March, questioning the insurance sector’s response to the coronavirus crisis. In response, ABI director general Huw Evans, stated that Insurers are expected to pay out claims related to Covid-19 totalling £1.2bn, including £900m in Business Interruption claims.

The Financial Conduct Authority (FCA) is seeking to understand the impact of the Coronavirus on small Brokers by asking them to participate in an online questionnaire which it plans to launch shortly. The FCA will be sending out a pilot email and letter signed by Matt Brewis, its Director of General Insurance and Conduct Specialists, to a sample of 300 small Brokers inviting them to take part in the short survey.  Members will be able to complete the survey by clicking on a link in the letter should they receive one. The survey requests information about operating costs, estimated revenues, and whether or not staff have been made redundant or furloughed during the period and any expected savings. It relates to retail, SME and large commercial.

The recent volatility in oil prices caused by the coronavirus pandemic has been a matter of great concern within the global Marine sector, with Bloomberg recently revealing that China’s oil demand has dropped by approximately three million barrels a day. This has raised issues within the Marine insurance market, where the long-term impact of the pandemic will be determined by how long the resulting global lockdown remains in place, according to Sedgwick’s Head of Marine, Ton Schox.

The coronavirus pandemic has brought about plenty of change – and for Insurers it has presented an opportunity to do the right thing and support their customer base. Now, General & Medical Healthcare has taken its own steps by re-evaluating the benefits it offers. The move has seen several services made standard across all seven of its healthcare policies – including unlimited access to the 24hr Talk to a Doctor service, 24/7 health and wellbeing support, and a special premium reduction offer. The latter applies to customers requiring care for COVID-19 during the next few months.

Mishcon de Reya has been appointed to advise the newly formed Hospitality Insurance Group Action (HIGA) which has been set up to hold Insurers to account over their response to UK Business Interruption policies amid the coronavirus pandemic. The group named Axa, China Taiping, RSA, Touchstone and Zurich as Providers that would see insurance wordings reviewed but also stated that any other provider apart from Hiscox could find themselves under the legal microscope. Hiscox claims are already under review by the Hiscox Action Group (HAG) and policyholders with that particular Insurer were advised to contact HAG. Mishcon de Reya also represents HAG firms. Hiscox has insisted its BI exposure in the UK is limited.

Hiscox has confirmed it is looking at raising equity to deal with the coronavirus crisis, in a statement published on the London Stock Exchange on 29 April. The Provider stated: “No decision has been made on whether to proceed with a capital raise or with regards to the timing or size of any such capital raise.” According to Hiscox, the board believes the Insurer has “sufficient capital” to meet expected liabilities arising as a result of the pandemic.

Law firm Fieldfisher is putting together a class action against QBE after the Provider denied coronavirus-related Business Interruption claims from a number of policyholders. Simon Sloane, Partner at Fieldfisher, commented that the action is likely to proceed and that there are potentially over 40 policyholders with large limits interested. “They [QBE] have issued policies with an extension providing cover for notifiable disease or contagion within a 25 mile radius of the building, which covers interruption to the business for that,” he explained.

Markel Corporation has released its first quarter financial results, and the group isn’t the bearer of good news. In the first three months of 2020, Markel posted a comprehensive loss to shareholders of US$1.4 billion (around £1.1 billion) – a tumble from the comprehensive income of US$732.2 million (around £587.5 million) in the same period last year. According to the company, a contributing factor to the result is the significant volatility in the equity markets arising from economic uncertainty associated with the coronavirus crisis. In fact, the group reported net investment losses of US$1.7 billion due to the change in fair value of Markel’s equity portfolio. In addition, Markel was hit by a US$325 million underwriting loss attributed to the COVID-19 outbreak.

Liberty Mutual Chair and Chief Executive David Long has provided an update as to where the insurance group stands amid the coronavirus crisis. “While the pandemic is still evolving, from a financial perspective we expect the impact of COVID-19 on our insurance operations to be similar to those we have experienced for a moderately-sized catastrophe loss,” noted Long, who also thanked frontliners while extending the insurer’s deepest sympathies to those most impacted by the outbreak. He said the areas of business most exposed to insurance losses related to the pandemic and resulting economic downturn include Trade Credit, General Liability, Workers’ Compensation, and Event Cancellation coverage.

The impact of the coronavirus is there for all to see in the latest set of results released by Reinsurance giant, Swiss Re. The company has reported a group net loss of US$225 million (around £180 million), reflecting the impact of COVID-19 as well as a pre-tax charge of US$476 million (around £381.4 million) for its Property and Casualty business. Overall, its Property and Casualty Reinsurance business reported a net income of US$61 million, a rise from US$13 million in the same period last year, despite the impact of the virus, while its life and health reinsurance business came in at US$229 million. Its Corporate Solutions business, meanwhile, reported a net loss of US$167 million, though the company insisted its turnaround is on track – its reserving for COVID-19 claims came in at US$223 million.

Simon Mabb, MD of NDML Insurance, has written an open letter to Chancellor of the Exchequer, Rishi Sunak, calling on him to release Pool Re funds to help businesses such as hotels and restaurants hit by coronavirus. NDML is working with the Night Time Industries Association (NTIA) to support its members. Mabb wrote: “NTIA and NDML are calling on the government to break the deadlock between Insurers and the industry.

International non-governmental organisations supporting the Unfriend Coal campaign have urged Insurers to champion a green recovery from the COVID-19 outbreak. In a letter to insurance industry associations, 25 NGOs from 11 countries said that the industry was fully aware of the risks of global pandemics years ago, but did not do enough to ensure governments prepared effectively. The NGOs warned the industry not to make the same mistake now that they recognise the climate emergency.

It’s the turn of Miami Beach salon Atma Beauty to take Lloyd’s of London underwriters to court, with the all-risk insurance policyholder serving as the lead plaintiff in a federal class action lawsuit against certain Lloyd’s syndicates as well as HDI Global Specialty SE and AXIS Specialty Europe SE.

Property and Casualty insurance giant Chubb has been sued by a prominent Los Angeles non-profit for denying Business Interruption coverage amid the COVID-19 pandemic. The Simon Wiesenthal Centre, which advocates for human rights and fights anti-Semitism, is the latest in a long string of businesses to battle the insurance industry over pandemic coverage.

Ahead of the May 07 release of Argo Group International Holdings, Ltd.’s first quarter numbers, the specialist Insurer has outlined the likely adverse impact of the coronavirus crisis to its financial results in the period. “Argo expects to report pre-tax net catastrophe losses of US$29 million (around £23.3 million), including approximately US$26 million (around £20.9 million) related to the COVID-19 pandemic, primarily resulting from contingency and property exposures in the company’s international operations and property exposures in its US operations,” noted the Bermuda-headquartered Underwriter. “Property losses relate to sub-limited affirmative Business Interruption coverage, primarily in certain international markets, as well as expected costs associated with potential litigation.”

AXA XL Risk Consulting has launched a new risk assessment service, Remote Risk Dialogue, to continue evaluating loss prevention across business lines amid COVID-19 restrictions. Using data captured from telephone calls, web tools and existing reports, Remote Risk Dialogue enables AXA XL’s risk engineers to perform remote analysis not seen in traditional loss prevention programmes and provide Risk Managers, Underwriters and Brokers with an up-to-date view of a client’s risks.

MAPFRE unveils €54m support for customers and suppliers affected by Covid-19. MAPFRE’s allocation is part of a wide set of actions being taken to protect people, the economy, and jobs, and to help society overcome this crisis. 30 million euros of insurance premiums to be returned to self-employed customers and SMEs. MAPFRE is also allocating up to 24 million euros to billing advances for its suppliers. Fundación MAPFRE is also donating 35 million euros - 5 million euros for COVID-19 research, 20 million euros for medical support in 27 countries and 10 million euro to protect Spanish employment.

 

Global Claims Management firm Crawford & Company has two new leaders at the top. The company announced that the current global COO Rohit Verma will take on the Chief Executive Officer role, while Joseph Blanco, currently the company’s General Counsel, will become President, both effective May 15. Verma and Blanco will take over from Harsha V. Agadi, who has served as Crawford’s CEO and President for the past five years. He will transition to the Board as a Director where he has served since 2010.

Premium Credit’s Key Account Manager Christopher Emmanuel has been elected as President of the Northampton Chartered Insurance Institute (CII) for the forthcoming year. Following roles at the Institute including Communications Officer and Deputy President, he takes up the new position during extraordinary and challenging times.

The times are changing at the Chartered Insurance Institute. The body has today announced the appointment of Dr Helen Phillips as its first independent chair. The move marks the separation of the role from the position of CII president – the hope is that the separation will allow the president to focus on their ambassadorial role and follows on from the unprecedented decision to extend Nick Turner’s tenure in the role. The decision to create an independent chair was voted on at the institute’s annual general meeting last year.

As previously reported, Jonathan Zaffino has resigned from Everest Re Group where he served as President and Chief Executive of the company’s insurance division. Now we know where Zaffino is headed once the insurance leader is done with his garden leave. It’s been announced that Zaffino is making the switch to Ascot Group, having been appointed as Group President of the Bermuda-domiciled specialty insurance and reinsurance enterprise. He will come onboard after completing his contractual obligations with Everest in the middle of June.

Professional services firm Davies Group has called on a major name to join its FCA regulatory boards. Incoming is Michele Turmore, taking the role of Independent Non-Executive Director (INED). Turmore, who has held c-suite roles at the likes of Lloyds TSB, Harrods Bank Ltd and is currently in an INED position at Shawbrook Bank, will now help the firm with its independent launch and hosting of its incubation platform for new and established MGAs and Brokers.

Gary Hoffman is stepping down as Non-Executive Chair of Hastings Group Holdings Plc on May 21. In light of the resignation, Hastings has tapped senior independent Director Tom Colraine to serve as Non-Executive Chair from the afore mentioned date while the search for Hoffman’s long-term successor is conducted. Taking over as Senior Independent Director is independent Non-Executive Director Teresa Robson-Capps.

April 28 marked Rebecca Bunyan’s first day as Chief Information & Change Officer at Lloyd’s of London. The centuries-old insurance marketplace has brought in Bunyan, who most recently served as Chief Information Officer at Aldermore Bank, as part of the "Future at Lloyd’s" initiative. Bunyan’s credentials include her time as Group Operating Officer at Underwriting and Broking system Websure. The key hire was also with specialist Insurer Hiscox for over six years, more than two of which were spent in Bunyan’s capacity as head of IT for Europe and Guernsey.

W/R/B Underwriting has made a triple addition to its Property team – swooping for Sarah Reeve, Dan Black and Olly Durell.  Reeve joins the firm as a Senior Underwriter, having built up more than 13 years’ experience across Global Property underwriting – most recently in Singapore. She was previously with AXA XL, but has also enjoyed stints at the likes of RSA and Aspen Re. Also joining as a Senior Underwriter, Dan Black had spent more than a decade with MS Amlin within its global direct and Facultative Property team. Meanwhile, Olly Durell joins the firm as a Senior Property Underwriter next month. Currently he is a Global Property Underwriter at Hiscox, where he has been since 2013.

Chubb has appointed Guney Celik as the insurance giant’s new Regional Head of Marine for Eurasia and Africa, assuming responsibility for the expansion of its presence across the region while working with both its business development and underwriting teams.

Two key names are working their way up the corporate ladder at Arch Insurance International’s Syndicate 2012. Firstly, James Croome will take on the role of Active Underwriter – leading all activities related to Syndicate 2012, including strategic planning and liaising with Lloyd’s. He boasts more than 15 years of experience in the market, and is described by the firm as an “astute underwriter”. Before his promotion, he was Vice President of Fine Art and Specie, a role he is set to maintain, having joined the firm back in 2014 on the back of a lengthy tenure with QBE. Meanwhile, Marie Biggas, who will work with Croome on the syndicate’s strategic goals and market standing, has been named Deputy Active Underwriter. She entered the industry back in 2008 and holds the role of Vice President, Terrorism and Political Violence – she will maintain this position while taking on her new responsibilities. Her past experience includes time spent at the likes of Amlin, ACE Group and Chaucer Syndicates.

Specialist insurance Provider CFC has announced the appointment of Shannon Groeber to the newly created role of Executive Vice President. Groeber will be based in New York and will be responsible for leading CFC’s Cyber strategy for its admitted Cyber proposition. Prior to joining CFC, she served as Cyber Innovation Leader at Marsh JLT Specialty. She also spent five years as JLT Specialty’s Cyber and E&O Practice Leader.

As part of its commitment to the fast-growing global renewable energy sector, Marsh, the world’s leading insurance Broker and risk advisor, today announced key leadership appointments within Marsh JLT Specialty’s Renewable Energy team. Oliver Holme has joined Marsh in the newly created role of UK and US Offshore Wind Leader, reporting to Hamish Roberts, Power Leader and Amy Barnes, Energy & Power Leader, US and Canada.  Martin Beck has been appointed to the newly created role of Asia Offshore Wind & Renewable Energy Leader, reporting to Glenn Preece, Power & Utility Leader, Asia. Based in Singapore, Mr. Beck was formerly an Offshore Wind Senior Client Advisor for Marsh GmbH in Hamburg, Germany.

Beazley has expanded its Mergers & Acquisitions (M&A) team with five underwriting appointments, in a bid to provide better service in key markets and explore new opportunities. In London, Lorraine Lloyd-Thomas and Cameron McCoy have joined the firm. Lloyd-Thomas joined from Marsh, where she spent 14 years, most recently as a Managing Director in Marsh’s UK Private Equity and M&A practice. She is a non-practising Solicitor and, according to Beazley, was one of the first to join the M&A insurance market from the legal profession in 2002. McCoy, meanwhile, is an experienced Underwriter who will be responsible for the underwriting of UK and international M&A risks. In the US, Melanie Walker has joined Beazley in Atlanta to increase capacity for US domestic risks. She was most recently an associate with Morris, Manning & Martin, LLP where she focused on M&A. In addition, Tim Allen, Beazley’s Global Head of M&A, has moved from London to Denver as the team looks to build its offering across the US mid-market. Kirsten Windle-Wehrle, meanwhile, has joined the company in Munich, where she underwrites M&A transaction Liability business on a global basis.

 

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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