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General Insurance Newsletter - Friday 20th April

19 Apr 2018

Market News

As part of the London Market’s modernisation programme, Lloyd’s put forward plans in February to mandate for the use of electronic placement (PPL), with CEO Inga Beale describing higher levels of adoption as “vital” for the industry. In the months since, numerous players have taken up electronic trading. Having recently adopted the system, JLT Speciality told the London Market Group last month that both Brokers and carriers “have a duty to engage with modernisation in its totality to safeguard the future of the London Market, especially in light of Brexit.” The push towards greater use of PPL is an important step in the market’s modernisation plans, but there is still a way to go, according to Toby Esser, chairman of AFL Insurance Brokers and ex-CEO of Cooper Gay.

Cunningham Lindsey has been officially acquired by Sedgwick. The risk solutions and claims management specialist will now take on the Sedgwick brand name, as a combined operation that includes Sedgwick, Vericlaim and Cunningham Lindsey together. According to a release announcing the deal, Sedgwick will pick up close to 6,000 Cunningham Lindsey colleagues from across 65 countries.

Cyber criminals are launching more online attacks on UK businesses than ever before, a report from the National Cyber Security Centre (NCSC) revealed last week – adding that firms face a ‘growing threat’ from ransomware, data breaches and weaknesses in the supply chain. The report, written in collaboration with the National Crime Agency (NCA), warned that basic cyber security strength “is no longer enough” and said most attacks will be defeated by organisations which prioritise cybersecurity and work closely with government and law enforcement.

HWI International Group, a London-based independent Broker, has launched NuVu Underwriting Hong Kong Ltd, a Managing General Agent (MGA) in Hong Kong which will begin operations on 1st July. The new firm will initially focus on Property, Marine, Specie, Fine Art, Personal Accident, and Terrorism lines of business in Asia, and will be headed by Jeremy Austen as principal officer and CEO.

Coversure’s physical presence throughout the country has been bolstered further with the opening of its office in Cannock. Located on Wolverhampton Road, the brand-new office will cater to locals – offering “friendly, independent advice” and what the UK Broker calls “outstanding” levels of service.

Ecclesiastical has collaborated with the Building Cost Information Service (BCIS) to launch the Ecclesiastical Heritage Index (EHI). It is said to be the first buildings index designed to track the costs associated with the reconstruction and repair of traditional properties – such as those built before 1920 through traditional methods – in the UK.

Zurich said more than 99% of all general insurance claims last year were paid – contrary to the notion that claims do not prosper. In fact, the amount involved 120 payments of over £1m.

Complaints about payment protection insurance (PPI) in the second half of 2017 soared to the highest level seen for more than four years, according to figures from the Financial Conduct Authority (FCA). Complaints about PPI hit 1.55m in the six months, up 40% on the first half of the year. The FCA’s analysis is based on the data supplied to it by regulated firms. The PPI increase meant that there was an overall 13% rise in complaints about financial services products to 3.76m. This was a 427,032 increase on the first half of the year.

InsurTech start-up, Homelyfe has partnered with ARAG to provide Home Emergency and Legal Expenses insurance. Via the Homelyfe app and within the quotation process, consumers will be afforded the option to purchase add-ons for their Home policy. The start-up, which promises users of its app Home insurance in less than four minutes, described ARAG as having been very accommodating. 

DUAL International, the underwriting division of international insurance group Hyperion Insurance, has launched a Canadian arm. The DUAL Canada team will “specialise in creating simple insurance solutions for small and mid-sized Canadian markets,” a release said. It will be led by both Michael Shore and Dave Alexander. Shore and Alexander’s combined expertise in specialty lines insurance covers a broad range of liability products, such as Professional Liability, Management Liability, Cyber, Information Technology, Crime, Legal Expenses, General Liability and Property.   

Fitch Ratings says it expects Motor insurance providers to slash premiums – albeit with caution – as reforms get rolled out. “As we said in 2016 when the government first announced its proposals to limit whiplash compensation, a fall in claim costs should lead to lower premiums, given the competitive nature of UK Motor insurance,” noted the credit rating agency. “Likewise, the government’s September 2017 proposal to revise the Ogden discount rate, which would lead to lower lump-sum payments to cover long-term care costs and lost earnings, should also lead to lower premiums.” Citing the 7% quarter-on-quarter drop in the average premium quoted on Confused.com in the first three months of 2018, Fitch Ratings is also on the lookout for insurance sales data from the Association of British Insurers, which it believes would confirm the reduction in prices.

Data from AIG’sInsuring Travellers in the Digital Age” report states that the average customer looks at 28 different websites over 53 days before setting their plans in stone, and they now have access to live pricing and can bundle their car rental, hotel, and flight all in one booking.

Haven Insurance Company Limited have been left disappointed after the Supreme Court decided in favour of Gavin Edmondson Solicitors Limited in the case involving the claims of individuals who engaged the services of the solicitors firm but ended up settling with the Insurer directly. The Supreme Court unanimously dismissed Haven’s appeal.    

InsurTech start-up insurance Broker Konsileo has set its sights on recruiting both individuals and teams as it looks to scale up having secured raised £2.7m in Series A Funding from technology investor Committed Capital. The technology-driven commercial intermediary, is seeking Brokers, whether on their own or part of teams, that might have become disillusioned with their employer, promising its systems can save up to 60% of the time spent they currently spend on administration whilst also giving them a greater share of the revenue from the business they generate.

PwC has teamed up with international start-up rating agency Early Metrics to create a programme for fast-growing InsurTech start-ups. The PwC Scale InsurTech Programme launched on 16 April and aims to bring together InsurTech firms with the ambition to scale their businesses, create commercial opportunities and promote best practice. According to Early Metrics, the programme is open to ten InsurTech start-ups that are revenue generating and approaching Series A financing or beyond. As part of the programme, the firms will have the opportunity to pitch the applications of their technology to PwC clients and partners and gain feedback on their business development initiatives.

Lycetts has reported a 3% increase in turnover for 2017 to £20.57m. The Broker said the growth reflected a strong performance in a competitive market. However, operating profit and profit after tax both dropped. Operating profit declined from £1.92m in 2016 to £977,000 with post-tax profit coming in at £593,000 (2016: £1.33m).

InsurTech start-up Brolly has launched Gadget and Motor insurance in its smartphone app. In addition, the Broker said its switching feature, which analyses what a customer is buying and searches for a better option based on information shared about their lifestyle, is live for gadget insurance. CEO and co-founder Phoebe Hugh confirmed that this will be rolled out on other product lines, including Motor, Home and Travel in the coming months. The start-up Broker claimed that Brolly’s is the first insurance app where it’s possible to switch and purchase insurance directly in-app.

The AA has confirmed that previous executive chairman Bob Mackenzie has filed a claim form against it in the High Court seeking a permanent injunction to keep his shares and up to £225m in damages. Mackenzie was removed from his role with immediate effect on 1 August 2017 with the company citing “gross misconduct”.

Brokers using the SSP Pureplatform have said they are experiencing new troubles with the system, just two weeks after the most recent reported issues. According to Brokers, the problems started on Friday 13 April and some of them are still experiencing difficulties earlier this week.

Gresham Underwriting, the MGA arm of Tasker Insurance Group, is getting £20m of capacity-backing from Axa as part of a three year deal. Axa detailed that it will provide support on existing Gresham’s product lines and introduce new Axa-backed products via the MGA’s Instant Quotes Broker platform.

SEIB is in “conversations” with potential acquisition targets, according to the Broker’s Commercial Director Suzy Middleton. Middleton revealed that it had held discussions in 2017 without any deals coming to fruition and was still on the lookout for opportunities. Middleton added that the Broker is targeting firms where it can add value to the current offering.

The trial of former Das CEO Paul Asplin continued this week at Southwark Crown Court. Asplin and the other defendants are standing trial for a number of charges relating to conspiracy and fraud. The prosecution made arguments alleging how Asplin and his fellow accused hid their involvement in two companies, Med Report and CW Law. It also detailed that the defendants benefited while those two firms engaged in contracts with Das while Asplin was CEO.

Ensurance UK has launched a Combined Construction Liability product, backed by Faraday Syndicate 435 at Lloyd’s. The niche Construction and Engineering MGA and Lloyd’s coverholder launched into the UK from Australia last year with a focus on Construction business. The new Liability product extends its portfolio, which also includes Contractors all Risk, Contractors Plant and Equipment, Homebuild, Contractors’ Legal Expenses and Engineering Inspection and insurance products.The firm detailed that the Combined Liability policy has £10m limits for Employer’s Liability and for Public/Products Liability. The Combined Liability offering also caters for environmental impairment.

Ardonagh Group has posted a total income of £535.7m for the year ended 31 December 2017, an 11.3% rise compared to £481.3m in 2016. The business stated that 3.5% of its income growth was achieved organically. In addition, its adjusted Ebitda increased by 30.8% to £114.3m in 2017 (2016: £87.4m). Dividing the numbers up, Ardonagh’s distribution segment posted an income of £351.1m in 2017 (2016: £309.3m) and an Ebitda of £87.2m (2016: £62.0m).

As Aviva continues to review its product range, they have taken the decision to withdraw a number of additional covers sold alongside their Home and Motor insurance. From 1 June 2018 ceratain additional covers will no longer be available on new business or renewals on Aviva’s Your House, Home Plus, Private Car and Premier Bike products.

New standards for vehicles that can switch between autonomous and human driving will be vital in deciding who is liable for an accident during the ‘handover’ period, the latest VENTURER report from Insurer AXA and law firm Burges Salmon has revealed. The Government's Automated and Electric Vehicles Bill will eventually create a list of vehicles that will be considered 'automated', with liability to third parties falling on Insurers. However, there will be many vehicles coming to market in the future which will allow the driver to 'handover' control to the vehicle and vice versa. This could create a grey area for liability, especially if an accident happens during the ‘handover’ between driver and vehicle. The report, the second in a series of three looking at insurance and legal aspects linked to the VENTURER trials, recommends that government and industry take account of the issues encountered by drivers during the handover phase. It calls for new standards that reflect the real-world capability of drivers and avoid stifling the development of automated vehicles by unfairly penalising motorists. Manufacturers will need to design in safety and develop handover processes that reflect the reality of drivers’ capabilities.

 


 

Market Movers and Shakers

Marsh UK & Ireland CEO Mark Weil is leaving the company and will be succeeded by Chris Lay.

Top rural Insurer NFU Mutual has expanded its Board of Directors with a double addition with the appointment of Jon Bailie and Ali Capper.

Independent insurance Broker Lockton has named Said Taiym as its Executive Vice President and Chief Digital Officer. 

Liberty Specialty Markets’ has appointed Richard Deguettes as the General Manager for their operations in France.

American International Group has announced that Anthony Vidovich will join the company as its Chief Claims Officer for General Insurance starting May 14.

Managing Director Andrew Graham has announced that it’s all systems go for the new Lloyd’s coverholder, Brockwell Capital, with his and Alec Goodair’s arrival completing the team in London. The Senior Underwriters join co-founders Lee Amerigo and Lana Soroka.

Sunderland Marine Chief Executive Tom Rutter, who joined the Insurer in 1979, is retiring at the end of June.

Brokerage giant Marsh has promoted a Senior Executive from within the firm to serve as UK Financial and Professional practice (FINPRO) leader. Paul Denny, who has been with Marsh since 1989, has made the rounds – serving in senior positions in London, Boston, Chicago, and New York. He most recently held the roles of Northeast US FINPRO leader and US Errors & Omissions leader.

AXIS Re, a subsidiary of AXIS Capital Holdings, has announced the appointment of Megan Thomas as its Chief Underwriting Officer.

Following the appointment of Senior Underwriter Ulrike Janvier, Liberty Specialty Markets’ will now begin underwriting Fine Art & Specie in Germany from its Cologne office.

New MGA Mercia Underwriting has announced it is strengthening it’s Birmingham team with the appointment of Matthew Bartlett as a Senior Underwriter.

Leading personal lines and telematics Broker iGO4 has cemented its ambition to capitalise on digital and data strategies by appointing Google Play’s Mark Bennettto its senior team. 

C&C Insurance Brokers Ltd has announced the opening of their new office based in South Wales and they also welcome a new addition to the business. Karen James previously of Arthur J Gallaher brings with her 15 years’ experience in insurance broking and is a welcomed addition to the C&C business.

Principal Insurance has appointed Jamie McGivern as its first Finance Director in a move which completes a major restructuring of the fast-growing specialist insurance group’s senior executive team.

Following the merger between Lark Group and Aston Scott, the senior management team has recently been strengthened with the addition of Paul Hasib who joins the combined Aston Lark business as Head of Group Placement.

Legal & General has announced the appointment of Mark Jones to the role of Product Director, UK Protection for its nsurance division.

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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