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General Insurance Newsletter Friday 21st February 2020

21 Feb 2020

Just over a month after the completion of the sale of Ashgrove Insurance Services to Bollington Insurance, the Bollington Wilson Group have announced that it has completed the purchase of Harrogate-based insurance Broker Prophet Trade Credit Limited (Prophet). Prophet, which has been trading since 2001, specialises in trade credit insurance, debt recovery and credit information. The deal adds six staff and over £4 million GWP to the stable of companies now under Bollington Wilson ownership. Bollington Insurance have also bought Broker CLA (Risk Solutions) for an undisclosed sum. The purchase adds 19 staff, two offices and more than £9m in GWP to Bollington. It also pushes Bollington Insurance to more than £180m in GWP across the group.

More news from Bollington - It was back in October 2017 that Bollington announced it has secured an £80 million capacity deal with Danish-Insurer Gefion for the launch of Anjuna Underwriting. At the time, hopes were high for the five-year deal to provide products for the motor trade and taxi fleets. Fast forward less than two and a half years and things have taken an altogether different twist. With Gefion subject to a host of negative headlines in recent times, Bollington has confirmed that it is suspending trading with the Insurer until further notice.

QBE announced its full 2019 financial results, with the Insurer reporting a huge net profit spike. It announced a FY19 statutory net profit after tax of US$550 million, up 41% from US$390 million in 2018. Further rises were also recorded across the board, in what proved to be a comparatively successful year for the Insurer. Adjusted net cash profit after tax was US$733 million, up 6% from US$692 million in 2018, while adjusted cash profit return on equity was 8.9%, up by 0.9% from the previous year. Other increases were seen in premium rate momentum and group-wide renewal rate, with the latter rising to a 6.3% average compared to 5.0% in the previous year.

The volume of mergers and acquisitions in the insurance space rose 10% in 2019, according to insurance law firm Clyde & Co. A study by the firm found that 419 deals were completed worldwide last year, up from 382 in 2018. Merger activity was driven by an unusually strong first half, led by a spike in deals in Europe that had previously been on hold due to Brexit preparations. M&A activity dropped during the last six months of 2019, but activity remained strong compared to recent years.

Crawford & Company has unveiled growth plans for its Crawford Legal Services (CLS) unit in the UK. CLS, which has a workforce of more than 40 people operating in Liverpool and Manchester, is opening new offices in Leeds and creating a sizeable presence in Birmingham. 

The question of talent acquisition and retention within the insurance sector has long been an area of discussion and debate, and there can be no doubt that the requirements that employees have from their employers have developed significantly in recent years. For Markerstudy, these changing requirements are not a surprise as the business has highlighted employee recognition and support as a key strategic development aim for several years. Most recently the business was awarded ‘Investors in People Gold Status’ for the third time in a row and Tanya Gerrard-White, Director of HR and talent development at Markerstudy, detailed how proud the organisation was to be recognised by its employees. This was less about receiving an award, she said, and more about giving the team the opportunity to speak anonymously about their experiences.

Ageas UK’s 2019 results were impacted by claims inflation and unexpected large losses in its motor business, according to Chief Executive Officer Andy Watson. The provider reported a 21% fall in net profit to £60.3m along with a deteriorated combined operating ratio of 98.7% in 2019.

The administrator handling lead-generation provider Call Connection has predicted that £246,000 will be paid out to its creditors. According to an update on Companies House, unsecured creditors are owed £2.8m. Lloyds Bank, which is named as a secured creditor, is owed an additional £1.8m.

The Financial Conduct Authority (FCA) has reiterated concerns surrounding Brexit, non-financial misconduct, and data usage in its annual assessment of the general insurance sector. The FCA also highlighted dual pricing in personal lines, which cost consumers £1.2bn in 2018, as a major cause of financial harm across all markets its regulates. Christopher Woolard, Executive Director of Strategy and Competition at the FCA and Interim Chief Executive, commented on the report: “We are committed to reducing harm in the markets we regulate. Our analysis of markets ensures that we do this effectively, helping us to decide where to focus our attention.".

PIB Group has bought Croydon-based BK Insurance Brokers for an undisclosed sum. This is the 26th business that PIB has invested in since its launch in 2015. According to PIB, BK Insurance Brokers was established in 1981 with trading history as far back as 1970 and provides insurance solutions to the Property, corporate, private clients and SME sectors.

Brokerbility Holdings has reported a rise in turnover to £12.10m for the year ended 31 May 2019 (2018: £11.26m). The business, which is the parent company of the Brokerbility network and Leicester-headquartered Broker BHIB, also posted a profit after tax of £1.33m compared to £1.35m in 2018. The figures showed a 7.5% increase in gross revenue to £12.1m, but also a 5.2% fall in Ebitda to £2.73m. Brokerbility’s financial results for 2019 were impacted by consolidation, investment in IT, Brexit uncertainty and compliance changes, according to Executive Chairman Ashwin Mistry.

InsurTech firm Uinsure has added online quote and buy non-standard home insurance to its proposition. The business now offers products across home insurance, non-standard and buy to let, as well as home emergency, legal protection and rent guarantee options.

Ardonagh has signed on the dotted line to purchase motorbike Broker Bennetts Motorcycling Services from Saga. The business confirmed that Atlanta Investment Holdings C, a subsidiary of Ardonagh, has exchanged contracts in relation to the purchase of the Broker. According to a statement Bennetts will join Autonet, Carole Nash and Swinton as part of Atlanta, Ardonagh’s Retail platform which is headed up by Ian Donaldson. Saga is set to sell Bennetts to Ardonagh Group for an enterprise value of £26m, according to a statement on the London Stock Exchange. Atlanta Investment Holdings C, a subsidiary of Ardonagh, had signed on to buy the motorcycle insurance specialist. Bennetts will join Autonet, Carole Nash and Swinton as part of Ardonagh’s Retail platform, Atlanta, which is led by Ian Donaldson.

Allianz Legal Protection (ALP) has announced an exciting new partnership with insurance distribution and claims services provider, Coplus. As part of the arrangement, ALP will be the Underwriter for a range of Motor, family, Landlord and commercial legal expenses products lines. Coplus has over 30 years' of experience in the legal expenses market and works with Brokers and Insurers to protect in excess of 2.5 million policyholders.

As you will now be aware, the UK formally left the EU on 31 January 2020; however, the Government has agreed to a transition period with the EU that will last until the end of 2020.  During this time, all EU law, rules and regulations will continue to apply in the UK between the UK and the EU. This means that customers will not require Green Cards when driving to the EU, the EEA, Switzerland, Serbia or Andorra at this time. What happens after the 31 December 2020 has yet to be agreed. Whilst there is nothing for you or your customers to do in the short-term, as the UK’s longer-term relationship with the EU is less clear, we’ll continue to monitor political developments and will keep you informed of any updates and actions you may need to take over the course of the year.

In excess of 650,000 – that’s how many potholes UK road users are likely to have to contend with by 2030 if the government does not pour in the promised annual amount of £500 million to address the problem. Currently the figure already stands at 560,836 potholes across the country. The 10-year approximation was revealed by Zurich UK, which tapped economics consultancy Cebr to examine multiple factors that contribute to the number such as traffic levels, weather conditions, government funding and historical volumes of potholes.

With Sonia Blizzard of internet service provider Beaming calling 2019 the worst year on record for cyber attacks against UK firms, Broker Credent Commercial Insurance has called on businesses to be extra vigilant. According to Beaming, companies in the UK had to deal with an average of 66 attacks per hour in the past year. Managing Director Blizzard pointed to how most business leaders incorrectly assume that their broadband router and antivirus systems will be enough of a protection.

The hard Property insurance market is weighing on insureds across the world, with Marsh reporting that average pricing for commercial Property risks increased 30% in Q4 of 2019. Within this space, the middle market commercial real estate space – which includes the office and industrial retail sector as opposed to multifamily and habitational real estate – is especially challenged.

Insurance disputes firm Fenchurch Law has been tapped by Nottingham-based insurance Broker Russell Scanlan to provide legal counsel in the event that valid claims by policyholders are turned down by Insurers. “There will always be a small percentage of cases where despite our best efforts; a legal course of action may be required,” noted Russell Scanlan Managing Director Bryan Banbury.

Acturis has launched Qomplx Underwriting’s new WonderCover product on its e-trade platform. The software provider described WonderCover as a parametric multi-peril Cyber product aimed at SMEs. WonderCover offers combined cover for Cyber breach, IT interruption and Terrorism, and is available to Brokers as a standalone policy or add-on for other lines.

The QBE Rugby Predictor, which applies techniques actuaries use to predict the impact of catastrophes such as earthquakes and floods, simulates the tournament 10,000 times producing outcomes from 150,000 games. The experts have concluded that England will push aside Ireland with a 27-18 victory at Twickenham, while Wales will defeat the on form France 19-14 at the Principality Stadium, leaving only a few points separating the four teams in the battle for first place going into the final two weeks of the tournament.

AXIS Capital Holdings Limited ("AXIS Capital") (NYSE:AXS) has announced that its Board of Directors has declared a quarterly dividend of $0.41 per common share payable on April 15, 2020, to shareholders of record at the close of business on March 31, 2020. In addition, the Board declared a dividend of $34.375 per Series E 5.50% Preferred Share (equivalent to $0.34375 per depositary share) payable on April 15, 2020, to shareholders of record at the close of business on March 31, 2020.

ACORD, the global standards-setting body for the insurance industry has announced the formation and inaugural meeting of the ACORD London Advisory Board. The ACORD London Advisory Board, which will meet in London on a quarterly basis, has been established to align London Market initiatives with the global ACORD Data Standards, to increase adoption and leverage of ACORD assets and to strengthen the impact and relevance of ACORD to its members’ interests. It is comprised of senior representatives from the major London Market associations and the Broker and carrier community.


UnderwriteMe, a supplier of underwriting rules engines in Europe and Asia-Pacific, has announced that its CEO, Martin Werth, will step down. According to a statement by the company, Werth, who founded UnderwriteMe in 2012 with Pacific Life Re, will finish his duties as CEO at the end of March. He will continue as a Non-Executive Director at the firm and remain closely involved with the business, the statement added.

Tali Shlomo, People Engagement Director at the Chartered Insurance Institute (CII), has left to pursue new opportunities at the end of January. The body confirmed that the role is currently being undertaken by an interim HR Director whilst a permanent replacement is being sought.

The Managing General Agents’ Association (MGAA) has confirmed that Managing Director Peter Staddon will retire at the end of June 2020. The MGAA stated that the process of finding a replacement was already underway.

Jo Whyman has joined Ecclesiastical Insurance as its Risk Management Director taking over from Mark Matthews who retired last year. Jo has more than 30 years’ experience in the financial services and risk management sectors and joins Ecclesiastical from Zurich, where he worked for more than 25 years in various roles. His most recent role was as risk engineering Property and energy practice leader where he supported a culture of innovation through the use of digital solutions.

A Non-Executive Director at M&G Plc will be stepping down amid “significantly increased demands” on her time due to another role. It’s been announced that Caroline Silver is leaving the M&G board during the company’s annual general meeting in May. Silver was recently appointed as Executive Chairman of consumer goods group PZ Cussons.

A formal search process for a new Chief Executive has been initiated at Moneysupermarket Group Plc. In a regulatory filing, the price comparison giant said current CEO Mark Lewis has told the board about his intention to step down from the post. It’s been revealed that the former eBay UK Managing Director wants to steer his career in a new direction.

Melanie Mooney has joined the global insurance practice of Clyde & Co as a Partner. Aimed at boosting the law firm’s offering to clients in credit hire defence, Mooney’s appointment sees her come onboard the defendant Motor team in Manchester.

Catastrophic injury claims specialist Kate Oldroyd is now part of the claims solutions group at DAC Beachcroft and is the second Partner to be recruited to the unit so far this year.

As the flurry of Insurers announcing their financial results for the full year 2019 continues, headlines are generally stolen by whether or not profits have surged or slumped. However, in the case of AXA Group, the insurance giant managed to steal its own thunder with the announcement of a new CEO for one of its most high-profile units. Scott Gunter, previously a Senior Vice President at Chubb Group and President of its North America commercial insurance division, has been named the new CEO of AXA XL. He will step into the role held by Greg Hendrick, who the Insurer noted had decided to “pursue opportunities outside the group.”.

Crawford & Company have brought in former Plexus Law partner Sarah Cartwright, based in Leeds, to serve as Head of Insurable Risks.

International General Insurance Holdings Limited (IGI), the international specialist commercial Insurer and reinsurer, have announced the appointment of Marc Sullivan as Class Underwriter, Downstream Energy, based in IGI’s London office. Marc has many years of industry experience and joins from Barbican Insurance Group, where he worked as Class Underwriter for Downstream Energy. 

NMU are pleased to announce the appointment of Matt Shaw as Development Underwriter. Matt has been in the industry for 16 years, performing a variety of roles in both Underwriting and Leadership at RSA Insurance in Manchester. 

Gallagher have announced six senior appointments in its global aerospace team, as the firm continues to invest in talent and expand its capabilities. Appointments to Gallagher’s aerospace team in New York include Matt Donohue and Thomas Klaus, both as Senior Vice Presidents. New additions to Gallagher’s aerospace team in London, joining at Partner level, are Account Executives Graham Herbert and Paul Wrenn. Andrew Gardener, will be joining the business as Account Manager and Peter Jury will be joining as Operations and Control Manager, following the completion of contractual notice periods.

 

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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