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General Insurance Newsletter Friday 21st December 2018

21 Dec 2018

Insurance News

Allianz Global Corporate & Specialty has published a new report revealing the top corporate insurance claims over the past five years. The report analyses 470,000 claims from over 200 countries over the past five years (July 2013 to July 2018), with an approximate total value of US$66.5 billion. According to the report, the largest financial losses come from claims for fires and/or explosions, aviation incidents, faulty workmanship and/or maintenance incidents, as well as storms. Together, these losses account for over 50% of all claims by total value.

Zurich has taken another step forward in its efforts to simplify its business with a major portfolio transfer. Catalina Holdings Ltd has signed a definitive agreement with Zurich Insurance that will see the majority of Zurich UK’s Employers’ Liability policies for 2006 and earlier underwriting years transferred over to Catalina. According to Neil Freshwater, CEO of Zurich Legacy Solutions, the move is part of a strategy to “manage risk and focus on ongoing operations.”

Hiscox is slated to begin using the INSTANDA platform next year as part of its European growth strategy. The specialist global Insurer has teamed up with the insurtech to add another distribution channel for Hiscox’s commercial and personal lines business, with the initial product expected to start trading on the platform in early 2019. The first market to experience the tie-up is Germany.

Building a workforce that is fit for the future – that is the London Market Group’s vision as it moves further in its ongoing initiative in future-proofing the market. Launching the Future Workforce Think Tank, the LMG said recommendations will be developed in response to the challenges being faced by the workforce amid technological disruption. KPMG will support the work of the think tank. 

In other news...It was barely three months ago when the Delegated Authority: Submission, access and transformation solution (DA SATS) was launched… now the London Market Group is reporting that all managing agents involved in live delegated authority business have signed up. Powered by Tide from Charles Taylor Insuretech, the platform is a core component of the London Market Target Operating Model. Aside from the managing agents, 88 Brokers engaged in the coverholder market have also come onboard the initiative aimed at making London an easier place to do business.

GBGI Limited shareholders have approved the takeover offer by Elm Bidco, L.P. To be implemented by means of a scheme of arrangement under Part VIII of the Companies Law of Guernsey, the deal involves the entire issued and to be issued share capital of GBGI.  court meeting saw the scheme get the green light from the requisite majority, while the succeeding general meeting resulted in the go-ahead for the Executive Director management arrangements as well as the amendments to GBGI’s articles of association.

Global specialty (re)insurer Brit Ltd has partnered exclusively with Schillings critical risk to create a comprehensive kidnap for ransom offering. Schillings critical risk, which is part of international issues and crisis law firm Schillings, is led by Schillings Partner John Chase whose more than two decades of experience centres on kidnap for ransom, extortion, illegal detention, blackmail, hijacking and cyberattacks. Meanwhile Brit’s kidnap for ransom team is headed by Class Underwriter Stephen Quinton, who came onboard in September.

Reich Insurance Group has developed a funeral services scheme which is sold via headstone mason retailers and through wholesale partners. The policy provides cover for damage to headstones and third-party liability and is supported by the SchemeServe platform. According to a statement the platform uses interactive technology to offer cover at the point of sale. Screens have also been installed at stonemasons around the UK, selling the cover as an add-on when headstones are purchased. 

Global Risk Partners spent over £64m in cash across 15 acquisitions in the year ended 31 March 2018. The total cost including deferred/contingent consideration, shares and ‘put and call’ options was £112.6m. Both figures were the biggest annual totals in the firm’s history. Deals in the financial year began on 13 June 2017 with buying 67% of Green Insurance Brokers through a 100% share purchase of Minority Venture Partners.The cost of £17.3m included £6.7m in cash.

In other news... David Margrett, group CEO of Global Risk Partners has said that the consolidator is considering regional hubs in the North East and Midlands as he committed to continuing the firm’s buy and build strategy. “We have got a couple of gaps on the map that we would quite like to fill but we are in no particular hurry,” he commented.

The Financial Conduct Authority has published new rules that will apply to all claims management companies (CMCs) from April 2019. That is when the watchdog will be taking over the responsibility for regulating CMCs including in Scotland where they are currently unregulated. From 1 April 2019 all CMCs serving customers in England, Scotland and Wales will have to be authorised by the FCA and meet minimum standards to operate.

In other news... The Financial Conduct Authority saw its insurance spend go up for the financial year 2018/2019. A Freedom of Information request was revealed that the watchdog shelled out £264,587.26 for its cover for the year. The cost of insurance went up from £258,237.55 in 2017/18.

A Plan has posted a rise in turnover to £93.4m for the year ended 28 February 2018. The 11% jump compared to 2017 came as Ebitda increased by 9% to £32.1m and pre-tax profits were up 8% to £29.9m. According to group CEO Carl Shuker the Broker achieved profitable growth via increased levels of new business, strong retention rates and new branches coming on stream.

Gallagher Bassett has boosted its size and offering in the United Kingdom by acquiring Property Claims Management Services Limited. With origins dating back to 1991, the Tamworth, Staffordshire based PCMS business provides property claims management services to Insurers and Commercial Third-Party Claims Administrators through a dedicated fulfilment team. The service delivery team covers the full range of perils including escape of water, fire, flood, subsidence and structural impact damage, plus validation, repudiation and audit.

Mental health problems affect one in six British workers each year with mental health being the leading cause of sickness absence. It is not surprising that employers are starting to look more closely at the crucial role they play in supporting the well-being of their staff. The CII have now launched a guide for the insurance profession on managing mental health in the workplace, published in partnership with the mental health charity Mind.

Integro is ready and able to strike more deals in the UK market, group CFO Andrew Behrends has revealed. “We plan to continue to be acquisitive where there is an opportunity to add a strategically positioned company,”. A string of more than 12 buys starting in 2012 has helped the firm build a business ranked at over £100m of retail gross written premium in the Top 100 Brokers supplement for 2018.

The Association of British Insurers has accepted that there needs to be a better balance between the insurance deals offered to new customers and the interests of long-standing customers. The admission came as the Competition and Markets Authority (CMA) savaged the industry and called for an end to “loyal customers being ripped off” across five different markets. In October Citizens Advice issued a super-complaint against the Household insurance, cash savings, mortgages, mobile phone contracts and broadband industries slamming the practice of overcharging loyal customers.

Prestige Insurance Holdings has agreed to buy Autoline Insurance for an undisclosed sum. Earlier this year US-based private equity firm Capital Z took a 65% stake in Prestige, the owner of Carrickfergus-headquartered Abbey Insurance. Following on from this Prestige has now, subject to regulatory approval, snapped up all of Newry-headquartered Autoline.

CFC Underwriting has called on businesses to consider Cyber insurance as a way to protect themselves against financial loss as the number of fraudulent wire transfer cases increase. This type of scam is known as social engineering fraud, a term that refers to the tricks used by criminals to cheat their victims into giving out confidential details. According to CFC’s Phishing for funds report social engineering scams take many forms, with the most common being funds transfer or wire transfer fraud, where crooks hack into business emails and either infiltrate the accounts themselves or create new accounts that appear authentic.

Managing general agent (MGA) Nexus Group has bought Hiscox’s global flying (HGF) book for an undisclosed amount. The deal was completed through an asset purchase into Millstream Underwriting a Nexus Group company that specialises in Accident and Health and Travel insurance. According to Nexus, the full ownership of HGF will transfer to Millstream, while Hiscox will continue to provide underwriting capacity for the business. It is Nexus’ fourth acquisition this year.

Direct Line Group is forming a £400m bid for the general insurance (GI) arm of Legal & General, according to Sky News. A spokesperson for Direct Line said that the company cannot comment on market speculation. Similarly, a spokesperson for L&G said the Insurer would not be commenting on the report. The media organisation revealed earlier this month that L&G had appointed Fenchurch Advisory Partners to explore the sale of its general insurance operations.

Paisley-based Boyd & Company has bought fellow Scottish Broker Glenavon Insurance. It is the second deal for the firm since Broker Network paid £11m for the business in May 2011. It snapped up Insureness in Musselburgh near Edinburgh this May. Glenavon Insurance was formed in 2009 in Edinburgh and focuses on commercial and personal lines business within the SME sector.

Covéa Insurance
has partnered with animal welfare charity RSPCA. Described as “so much more than selling insurance,” the tie-up features a unique benefit wherein 15% of the price paid for every policy sold will go directly towards caring for uninsured sick and neglected animals. Short-term, free-of-charge cover will also be provided to anyone who re-homes a cat or dog through the charity. Without an upper age limit, the pet policy offers varying cover levels for all breeds apart from those listed under the Dangerous Dogs Act. Benefits include waiving remaining owed premiums in the event the pet passes away, as well as cover for cremations and burials.

The Global Federation of Insurance Associations (GFIA) has offered its insights on the International Association of Insurance Supervisors’ (IAIS) application paper on the proactive supervision of corporate governance… and let’s just say the comments it submitted painted a not-so-rosy picture. The draft application paper, according to IAIS, sets out good practices related to the organisation and functioning of the Supervisor. The objective is to promote proactive supervision. In response to the public consultation, which ran until December 17 218, GFIA raised its concerns – pointing to what it believes are possibly detrimental mandates as well as unclear provisions.

Market Movers and Shakers

Hiscox UK has a new man at the helm. The UK arm of the specialist global Insurer has announced the appointment of Bob Thaker as its new Chief Executive Officer for the UK. Thaker will take up the position in March 2019, subject to regulatory approval. He’s a familiar face, having worked at Hiscox since 2010. He joined the firm as head of strategy and has since held a string of senior roles, including Group Chief Risk Officer and Head of Claims for Hiscox UK and Europe – a position he held for two years before relocating to Asia in 2014.

Things have become official for Richard Morley, who stepped up as NFU Mutual acting Finance Director earlier this year following Kim Arif’s sad passing in April. The new Finance Director will be in charge of evolving and strengthening his department’s capability and vision. Morley joined the top rural Insurer in 2011 as head of group finance.

Allianz Care, the international health brand of Allianz Partners, has recruited seasoned Executives Paul Halfyear and Kai Großheim. Halfyear, who brings nearly three decades of insurance industry experience to the global team, will lead Allianz Care’s work in Qatar in his capacity as General Manager. He has worked in a variety of roles in the Middle Eastern country as well as in the UK.

Policyfast strengthens its Fleet insurance team by appointing Scott Mills. Online insurance distributor Policyfast, is delighted to announce that leading Fleet insurance specialist Scott Mills has joined the business in the newly created role of Head of Fleet Underwriting. With nearly 30 years’ experience, Scott is an extremely well-known industry figure and his many years of working in the London market will prove invaluable as Policyfast looks to further enhance its impressive Motor Fleet offering. 

Local insurance Broker, Willis Insurance and Risk Management, has welcomed 11 new members of staff at its Belfast headquarters. This follows the company’s recent announcement of its plans to increase headcount by 10% within the next three years as part of an ambitious growth strategy.

Global Risk Partners are delighted to announce that Mike Bruce has been appointed to the newly created role of Group Managing Director. Since Mike’s appointment as CEO Broking in 2015, the business has been on a rapid and accelerating growth curve, with the Broking Division completing 29 acquisitions including major broking hubs such as County Group, Higos, Alan and Thomas, Green Insurance and ABL Group.

Saga Plc, the UK's specialist in products and services for life after 50, is pleased to announce the appointment of Eva Eisenschimmel as Non-Executive Director with effect from 1 January 2019. 

RSA Director of Risk consulting Neil Strickland is taking on the newly created position of Customer Experience Director. Effective immediately, the appointment will see RSA combine marketing, customer management and risk consulting into a single team within the Global Risk Solutions unit. The move comes after the Insurer streamlined its international exposure by refocusing its London Market business and exiting certain portfolios.

AXIS Capital Holdings Limited President and Chief Executive Albert Benchimol will serve as an external member of the Lloyd’s Council starting February 01, 2019. The former PartnerRe Chief Financial Officer chairs the Bermuda Insurers and Reinsurers Association and is a member of the Insurance Development Fund Steering Committee. His experience also includes time spent at Reliance Group Holdings and at the Bank of Montreal.

Marsh has unveiled the appointments of its Marsh-JLT Specialty leaders for the UK and Ireland. This follows the global Broker’s announcement in November that Lucy Clarke would be President of Marsh-JLT Specialty and update on the leaders of its regional, specialty and placement teams. As previously announced Marsh UK & Ireland Specialty leader Paul Moody, will become head of Marsh-JLT Specialty for the UK & Ireland. He will report to Clarke and to Chris Lay, CEO of Marsh UK & Ireland, who will remain in his post.

Global specialty Insurer Neon has announced the promotion of Theo Butt to Chief Executive Officer of Neon Underwriting Limited (NUL), a Lloyd’s managing agency. Butt joined Neon Holdings Limited as Group Underwriting Director in 2018. In his new role, he will continue to report to Martin Reith, who keeps his position as Group Chief Executive and a Director of NUL. NUL has also announced the promotion of Matthew Washington to Managing Director in addition to his role as Group Chief Operating Officer. Both promotions have immediate effect, subject to Lloyd’s and PRA approval.

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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