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General Insurance Newsletter Friday 20th March 2020

20 Mar 2020

 Pen Underwriting has secured £25m in capacity from Markel to support its equestrian business. The signing of the three-year agreement follows an initial partnership between the two firms on Equine insurance in 2017. Pen Underwriting said the deal would “further consolidate Pen’s presence in the equestrian market”.

LV General Insurance has reported a 39% fall in underwriting profit to £60m in 2019, down from £99m in 2018. In addition, the provider’s operating profit dropped by 13% to £93m, compared to £107m in the preceding year and its combined operating ratio deteriorated to 94.9% (2018: 92.0%). However, LV’s gross written premiums grew by 12% to £1.57bn in 2019, up from £1.40bn in 2018.

Jelf Insurance Brokers has filed a claim in the High Court, in the latest Broker court case relating to client and staff poaching. The Marsh & McLennan-owned business, now rebranded as Marsh Commercial, is bringing the case against David Roberts & Partners (Insurance Brokers) and David Roberts & Partners (York) as well as three former Jelf employees – Jason Lauchlan, Mark Elvin and Kathryn Hill. In the Particulars of Claim dated 6 February 2020, Jelf stated that the defendants had participated in a “concerted, unlawful attack” on Jelf’s business, causing loss and damage.

Ecclesiastical Insurance Office plc, has announced its full year 2019 results. Mark Hews, Group Chief Executive Officer of Ecclesiastical, said: “2019 was another successful year for Ecclesiastical as we continued to focus on delivering sustainable and profitable growth for the long-term. I’m pleased to report an increase in pre-tax profits of £73.3m (2018: £15.4m) driven by strong investment returns. Underwriting results were again strong across the group at £20.0m (2018: £29.4m) and reflected anticipated lower reserve releases compared to prior year.".

AXA XL announced the launch of a new insurance solution designed to cover the risks associated with autonomous vehicles. The offering will help companies developing or using the technology to better manage and transfer those new and evolving risks. The policy provides a core coverage of third-party liability, damage to property insured and vehicle theft. Additional coverage can be added to meet each client’s needs:

International General Insurance Holdings Limited (“IGI”) and Tiberius Acquisition Corporation (“Tiberius”) are pleased to announce the consummation of the previously announced business combination between them pursuant to a business combination agreement dated October 10, 2019. The business combination was approved by Tiberius stockholders at a Special Meeting of Stockholders and previously approved by former IGI shareholders, who exchanged 100% of the outstanding shares of the former IGI for common shares of IGI Holdings, plus an aggregate of $80 million.

Risk professionals that can combine digital literacy with a creative mindset and strong influencing skills will be best positioned to succeed in a rapidly changing workforce, according to new research from Airmic, based on an analysis of workplace trends among its membership. The report, Future of the Profession, exposes the impact technology is having on risk management, both in terms of how businesses manage their risks and also the skills required of future risk professionals. The survey, conducted in conjunction with Willis Towers Watson, revealed that most risk professionals (86%) are using technology to work faster and smarter. However, the report argues that as technology increasingly takes over more routine, manual tasks, risk professionals need to upskill and constantly reinvent themselves, or risk being made redundant by technology.

Life and Pensions business Royal London bounced back in 2019, reporting a £436 million pre-tax profit for the year after suffering a £111 million loss previously. “Royal London had a successful 2019 despite last year’s political and economic uncertainty,” stated Group Chief Executive Barry O’Dwyer. “Our investment performance has been outstanding with 98% of active funds outperforming their three-year benchmark.".

A further five-year deal has been sealed between long-time partners Admiral and consultancy CGI. According to CGI, which has been an Admiral ally for over two and a half decades, the new services contract features the Insurer’s ongoing use of its enterprise rating solution for Vehicle and Household insurance Ratabase.

Cybersecurity in the marine industry lags despite wave of attacks. While the maritime space might not have been traditionally thought of as a prime target for cyber criminals, times are changing and companies have to evolve or risk becoming victims themselves. During the summer of 2017, global shipping company A.P. Moller-Maersk became the victim of a cyberattack caused by the NotPetya malware, which also affected many other organisations around the world. The fallout was significant, with the company reporting a profit loss of US$1.5 billion for the third quarter of 2017, which it partly attributed to the cost of the major cyberattack. Other business costs followed, with Maersk having to reinstall and replace thousands of hardware that were impacted by the ransomware. At that time, the company projected that the cyberattack would cause losses of up to US$300 million due to “serious Business Interruption.” Then in November 2019, Marine services provider James Fisher and Sons (JFS) told investors that hackers had managed to breach its computer systems. The incident caused shares in the company to fall by 5.7%. As the industry evolves and new ships and marine systems are introduced, cybersecurity should be a top priority. 

In other Cyber news, when it comes to insuring Cyber risks, what is categorised as Cyber and what the insurance market covers and faces in terms of risk and opportunities, is changing at lightning speed, making collaboration increasingly important. Dr Rachel Anne Carter, Director of Cyber at the Geneva Association (GA), a global think tank that seeks to fill strategic research gaps across the insurance and reinsurance sectors and on global risks and trends, recently discussed the role of collaboration in Cyber insurance. Insurers not only need to collaborate with each other, she outlined, but also with other sectors that understand the security and IT sides of Cyber risk, or who have access to intelligence that helps promote ‘Cyber hygiene,’ or behaviours that make customers safer.

The parent firm of Hannover Re and HDI has broken its record, with the group net income of Talanx Group amounting to €923 million (around £839 million) in 2019. From 2018’s €703 million (around £640 million), Talanx’s full-year result rose 31.3% while its operating profit jumped 19.6%. Gross written premium was also higher, at €39.5 billion (around £35.9 billion).

AEGIS London, which has asked most of its staff to work from home until further notice amid the coronavirus pandemic, is the bearer of good news. According to the Lloyd’s managing agency, its managed syndicate posted a 7% rise in profit to £31.1 million despite recording £5 million in foreign exchange losses. Gross written premium, meanwhile grew 18% to £653.2 million.

 

Coronavirus-related News

These last few weeks have been momentous for the insurance sector and indeed for the world in general and the CII President’s Dinner and Public Trust Awards, held at Guildhall last Thursday (12th), showcased the commitments being made across this sector to keep the home fires burning. Throughout the evening, the role of the insurance sector in providing support and guidance to the most vulnerable in society was highlighted in the context of the recent coronavirus pandemic. Speaking at the event, journalist and presenter, Kate Silverton said: “Many people will turn to you in the coming weeks and months. Honour what needs to be honoured and support those who need you at this crucial time.”.

Lloyd’s has stated that its underwriting room in London will be closed from 19 March. On Friday 13 March, the market completed a stress test where it closed its underwriting room for 24 hours. At the time, it stated that it was ramping up its business continuity preparations in case contingency measures due to Covid-19 escalate. “Following our successful resilience test on 13 March, we are confident that our emergency trading protocols will enable the market to continue trading during the closure and we will review this decision on a weekly basis.” Lloyd’s highlighted that it remains open for business and is “ready to support our customers globally”.

The Lloyd’s Market Association (LMA) has published, on behalf of its members, policy language developed to ensure customers’ coverage continues beyond a specified renewal date if the Lloyd’s market is inaccessible and the Emergency Trading Protocol fails. The clause is intended to ensure that (re)insureds will not be left without cover if the developing Covid-19 situation makes normal renewal discussions untenable.

The Financial Conduct Authority (FCA) has set out its expectations for general insurance firms during the coronavirus pandemic. The regulator noted that many consumers are currently in a vulnerable position because of the virus and urged Insurers to be aware of the circumstances and show flexibility in their treatment of them. The FCA stated: “We are likely to see customers’ behaviours change because of the pandemic. For example, this could mean that customers may need to work from home or commute by car. We would not expect to see their ability to claim impacted by circumstances over which they have little control.".

Insurers will payout to firms for Business Interruption (BI) if they have pandemic cover and have been compelled to close due to government guidelines. Where the insurance would have kicked in if the government mandated closures it will now become active in response to the current guidelines Insurers have faced criticism, as has the government, after the Prime Minister Boris Johnson only recommended, instead of ordering, businesses close to help people avoid social contact amid the spread of the coronavirus. However, the vast majority of companies won’t have bought cover that protects them in the event of business interruption caused by the coronavirus, according to experts. The Association of British Insurers (ABI) said: “Irrespective of whether or not the Government order closure of a business, the vast majority of firms won’t have purchased cover that will enable them to claim on their insurance to compensate for their business being closed by the Coronavirus.”.

Mactavish has urged the government to consider introducing coronavirus emergency measures to support Insurers in order to ensure they can still offer affordable cover for struggling businesses. The insurance consultancy welcomed the government’s announcement that it would roll-out a series of measures to help protect the economy as Covid-19 continues to spread.

Integritas, the commercial finance Broker which specialises in the insurance sector, has announced that it is waiving its upfront fees in support of any Broker that needs their help in raising working capital funding from 18th March until 15th April. Integritas stated it is already receiving enquiries from Brokers who are being directly affected by the Covid-19 crisis. According to Integritas, this can be because their client base includes industries which are shutting down or firms that offer both general insurance and investment advice where investment income has dropped as fund values have fallen.

Software houses have shared their approaches to the ongoing Covid-19 outbreak. The four firms have all introduced remote working to some extent, but some Open GI offices remained open. ActurisOpen GISSP and CDL were all confident that clients should not expect interruptions in services and flagged additional measures they had taken to ensure business continuity.

The Chartered Insurance Institute (CII) has put in place plans to assist members and staff during the coronavirus outbreak. Following the UK government’s announcement that now is the time for everyone to stop non-essential contact and unnecessary travel, the organisation announced it is postponing April written examination sittings that were due to take place on 20, 21 and 22 April until October. The only exception to this postponement to sittings is RO6 (Financial planning practice) and AF7 (Pension transfers), which it is planning to hold sittings for in July.

"We recognise that there is continued concern about the possible impact of Coronavirus on BIBA 2020 and we are continually monitoring the situation and the advice provided by Government. We are committed to balancing the desire to hold another great event and the concerns about the health and safety of attendees. We would like to express our gratitude for the ongoing support of our delegates, exhibitors and sponsors and for your continued patience at this difficult time. We will keep you updated if our position changes." Authored by BIBA.

Covéa Insurance have warned, Cyber criminals are targeting employees’ workplace and home user email accounts during the COVID-19 outbreak. If an email feels suspicious then it probably is. Some emails being circulated claim they have a Coronavirus threat map website and when you click on the link it steals personal information. Be extra vigilant and take the following precautions: Checking the sender’s email address - is anything amiss? Hover over it and see if the return address is the same? Check the greeting - is it impersonal? Most emails will greet you by name. Generic greetings like ‘All, Hi there or Dear user’ are often an indicator of a phishing email. Check the spelling and grammar - phishing emails often contain spelling mistakes along with dodgy grammar. Check the links - hover your mouse over any button or link in an email to see the true destination. If it’s an email from a major retailer, but the URL that pops up doesn’t look like you’d expect it to, do not click it!

The mounting threat of COVID-19 has placed the healthcare system of many nations under a huge amount of pressure and Cyber criminals could be exploiting this to spread viruses - but instead of biological ones, these are computer viruses. According to a study by US-based Cyber insurance start-up Corvus, Cyber criminals are increasingly turning to the health sector for targets. In January 2020, four healthcare entities reported attacks – the most in any quarter since 2017. Corvus predicted a rapid increase of 12 for the full quarter. In 2019, healthcare entities were targeted for a ransomware attack more than 24 times and it seems that the frequency is only going to continue increasing. Phishing is the most common method used in order to gain entry into healthcare entities’ systems, accounting for 91% of cases, according to the study.

The Managing General Agents’ Association (MGAA) has followed in the footsteps of the Lloyd’s Market Association – which closed its office from March 17 – as it is now also in full work-from-home mode. “In light of the current guidance issued by the government in regards to COVID-19, the MGAA has decided that all members of staff are to work from home until March 31 initially,” announced the trade body on LinkedIn.

 

EC3 Brokers announces the establishment of its international Financial and Professional Lines division with the appointment of David Purdy as Divisional Director, effective immediately. Purdy will report to James Murphy, Head of Broking at EC3 Brokers.

Sharing economy insurance specialist, Pikl, has appointed former Bluefin and Gallagher Boss Stuart Reid as Chairman.

Lloyd Hanks has joined the advisory board of SchemeServe. The cloud-based software provider said Hanks “will be using his extensive network and years of industry experience to advise the board and to be an ambassador for SchemeServe”. Hanks, who runs consulting business LAH Consulting, is also a director at Apricot Insurance and Flagship Recruitment.

Liberty Mutual Re (LM Re), part of Liberty Mutual Insurance Group, has appointed Dan Carroll to the role of Senior Underwriter (Aviation Treaty Reinsurance).

The Coventry team of Gallagher has relocated to a new regional office in the city as the 20-strong unit looks to expand this year. Specialising in areas such as life sciences and technology, the team serves a range of local, national and global clients and has been present in Coventry for more than three decades. Gallagher said the new premises in Prologis Park will enable the team’s future growth, with recruitment plans set for 2020.  Taking the helm at the growing branch is newly appointed Managing Director Debbie Moss, who has been with Gallagher since 2016 and was most recently in charge of the Coventry office’s service unit. Moss succeeds Kathryn Moon, who earlier this month was appointed as Sales Director for the North.

Arthur J. Gallagher & Co. has announced the appointment of Christopher C. Miskel to its board of Directors. Miskel is President and CEO of Versiti.

Aspen Insurance Holdings Limited has appointed an incoming Group Chief Financial Officer on the same day it reported suffering a net loss after tax of US$241.7 million (around £197 million) in 2019. Succeeding Scott Kirk as Group CFO come May is Kevin Chidwick, the Chief Financial Officer of Admiral Group Plc from September 2005 to August 2014.

British Pet insurance provider Bought By Many has tapped a major industry name to serve as its Chair. Taking on the chairmanship is Jim Sutcliffe, the former Group Chief Executive of Old Mutual and ex-CEO of Prudential UK who was recently Chair at Sun Life Financial. The seasoned Executive brings more than three decades of insurance and asset management industry experience to Bought By Many.

Everest Re has announced that Don Mango has been promoted to Chief Risk Officer and Chief Actuary, effective March 30.

Catastrophe risk modelling company RMS has decided to strengthen its executive committee by appointing Michael Steel as its new Global Head of Business Development.

Jamie Whitcombe-Jones, who for the last five months served as cybersecurity Programme Manager at Allianz Insurance Plc, has now taken on the Chief Information Security Officer post.

 

 

 

 

 

All infrmation provided in this Market Digest has been gathered from multiple General Insurance Media sources and individual company press releases.

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