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General Insurance Newsletter Friday 21st September 2018

21 Sep 2018

Insurance News

Marsh and McLennan Companies (MMC) has agreed to buy Jardine Lloyd Thompson Group (JLT) for $5.6bn (£4.3bn) in cash. The deal will be funded by MMC’s existing cash and debt financing. The takeover has been approved by the board of Directors for both businesses. MMC confirmed that the acquisition will go through a scheme of arrangement in the UK courts and is expected to close in spring 2019. It will need regulatory and shareholder approval however the holders of some 40.5% of JLT’s equity have already signed up. According to insurance specialists Brokers will be eyeing up the talented staff and key clients at JLT following the takeover. A number of high profile individuals have openly set their sights on both the Broker's staff and clients following the news.

The Financial Conduct Authority (FCA) has warned consumers about fraudsters using a clone of UK Insurance. UK Insurance is the underwriting entity of Direct Line Group which does not sell directly through the brand. According to the regulator, fraudsters from cloned firms try to con the public by mixing in their own false details with the correct ones of an authorised business.

At the UK Broker Awards 2018, Thomas Carroll Group was named Broker of the year, while Lisa Powis, founder of Fresh Insurance was awarded the achievement in broking trophy, being commended for her hard work and many contributions to the broking industry. At an awards ceremony at the Brewery in London Julie Page was also crowned Broker personality of the year, while Thomas Carroll Group were also recognised in one more category.

New figures from the City of London Police’s insurance fraud enforcement department (Ifed) have revealed that 17-24 year olds are most likely to fall victim to ghost Brokers selling fake car insurance. The ‘steer clear of fraud’ campaign was launched in February this year. At that time the police highlighted that from November 2014 to October 2017 action fraud, its national fraud and cyber reporting centre, received more than 850 reports linked to ghost broking. Of these reports, 417 resulted in action being taken against the offenders.

Aviva Plc announces that it has successfully completed the share buyback programme which was notified to the market on 01 May 2018. As a result of the programme, Aviva acquired 119,491,188  shares at an average price of £5.02 per share.

Zurich Insurance Plc proposes to increase its distributable reserves, which will provide greater flexibility for the company to make dividend payments to its shareholders in the future. This increase will be achieved by the cancellation of the company’s entire share premium account using the capital reduction process set out in the Irish Companies Act 2014, which is an Irish High Court process and requires shareholder approval.

Thomas Miller has announced details of its agreement to purchase the Managing General Agency and Insurance Services operations of specialist insurance services group, Zeller Associates. Zeller Associates is an international provider of risk related and insurance services mainly for shipping, trade and transport, but also in other specialist areas such as the cruise and tourism industry.

Independent Lloyd’s Broker AFL Insurance Brokers has announced the acquisition of a majority stake in New Jersey-based Zodiac Insurance Services. Zodiac specialises in professional, entertainment and event insurance. A Lloyd’s managing general agent, it underwrites in excess of $10 million in Casualty lines business. Founded by President David Wash in 2011, Zodiac is licensed in 48 states.

The International Olympic Committee (IOC) and Allianz have announced that the Insurer will join the Worldwide Olympic Partner Program in 2021. Through the sponsorship agreement, Allianz will work with the IOC to provide insurance services to support the Olympics, including the organising committees of the Olympic Games, with the ambition of providing insurance to the national Olympic committees around the world and their Olympic teams and athletes. The sponsorship agreement will run from 2021 through 2028.

Atradius, which provides expert advice in order to facilitate trade while providing protection, has warned of a bumpy road for the British automotive sector. Citing economic uncertainty amid the ongoing talks between the UK and the European Union, the credit Insurer reported a 6% slide in new car registrations in the first half of 2018 as well as a significant decline in investment to a mere £347 million in the period from 2016’s £1.7 billion. Industry-wide, this year is forecast to witness a rise in non-payments and insolvencies. 

E-commerce powerhouse Amazon is entering the Indian insurance market, beginning with life, health and general insurance products. The Seattle-based retail and technology giant has filed with India’s Register of Companies to enter the business of soliciting, procuring and servicing insurance as a corporate agent, according to a report by BloombergQuint

Premium Credit is starting to restore its systems for Brokers after a cyber incident interrupted services. Chief Executive Tom Woolgrove stated “as of this morning we are starting to bring our broker systems back online.....we are doing that in a considered way to make sure there is no risk our Brokers and no potential for harm because of the nature of the cyber incident.”

Gallagher has opened legal action against Ardonagh Group, accusing the broking giant of acting illegally to poach staff and business. The article revealed that Alesco and Arthur J Gallagher Services (UK) have filed court papers against Bishopsgate Insurance Brokers; Price Forbes and Partners; The Ardonagh Group; Nawaf Hasan and Peter Burton. The legal dispute is being heard in the Queen’s Bench Division of the Royal Courts of Justice in London.

RSA has launched a Cyber product for large businesses. The product covers up to £25m in capacity, assistance with cyber risk management and a 24-hour incident response service.

Lloyd’s has revealed reduced profits of £600m for the first six months of 2018 but an improved combined operating ratio of 95.5% (H1 2017: 96.9%). The pre-tax profits were down on the £1.2bn achieved at the start of 2017, a year where it plummeted to a loss of £2bn. The 2018 half-year pre-tax profits were also down on 2016 when it achieved £1.46bn.

Research by the Association of British Insurers (ABI) found motherhood is a key driver for the 60% gap between men and women at board level. The research, commissioned by the ABI and conducted by Public First, took a comprehensive look at the barriers preventing women from getting top jobs in the insurance sector. The paper is entitled "Tackling the gender seniority gap: what works for the insurance and long-term savings industry".


Market Movers and Shakers

Gallagher has continued its strategic investment to build out its specialist UK Trade Credit and Surety Practice across the North with the appointment of Daniel Stewart. Daniel will lead the Manchester-based practice reporting into Tim Fisher, UK Managing Director of Trade Credit and Surety.

Beach and Associates is delighted to announce that Jonathan Tritton will be joining the newly formed London wholesale practice as a Senior Vice President in December 2018. Tritton joins from Marsh where he led the initiative to secure new products and coverage for Marsh and McLennan Agency, Marsh’s middle market retail network, as well as Victor Group, Marsh’s managing general underwriter subsidiary. 

Pioneer Underwriters is pleased to announce the appointment of Mark Kelsey as an Underwriter in the Pioneer Political Violence team. Kelsey has nine years of experience in the specialty Political Violence space and joins from Advent Underwriting, where he was a Terrorism and Political Violence Underwriter. Prior to that, he served in a similar role at Aspen.

Sutton Winson Insurance Brokers and Risk Managers offers a warm welcome to Gareth Roberts who has joined as a Director with responsibility for commercial sales and development and managing the commercial teams in their two offices.

Leading Legal Expenses and assistance provider ARAG has appointed two new Account Managers to its Before-the-Event (BTE) sales team. Paul Harvey takes on responsibility for building ARAG’s strong relationships with Brokers and other insurance intermediaries in the North of England, Scotland and Northern Ireland. Building on ARAG’s presence in the South East of England is Chris Clacy who brings with him more than a decade of experience in the insurance industry including several years working with Brokers to deliver commercial Legal Expenses insurance solutions to their clients.

BGL Group has today announced the appointment of Jonathon Brown as Chief Executive Officer for its UK comparison business, Compare the Market. Jonathon will join BGL on 23 October 2018 from PhotoBox, where he is currently Chief Operating Officer. He has spent the last three years leading the strategic, commercial, marketing and organisational transformation of the Group, working across the brand portfolio of PhotoBox, Moonpig, Hofmann, posterXXL and the recently acquired Dutch cards and gifts business, Greetz. 

Specialist for the insurance industry Auger is expanding its UK network resource with the appointment of 14 more recruits. To meet increasing demands for its services, the growing business has appointed 10 new Engineers and four other head-office staff as part of its UK-wide offer serving the UK insurance industry in drainage and water mains claims.

Zurich today announces the appointment of two Senior Underwriters, Carrie Schuster and Wayne Krause, which strengthens its expertise and capacity in the marine market. Carrie joined Zurich in the UK from Zurich New Zealand in September this year with a wealth of experience she gained in her 25-year career in all Marine lines including Cargo, Commercial Hull, Private Pleasure Craft, Fishing Vessels, Builders’ Risk, Ship Repairers Liability and Hauliers and Freight Forwarders Liability. Carrie also held a Claims Manager position for three years at a NZ Freight Forwarding company. Wayne joins Zurich later in September from Aviva, where he held Head of Marine position and oversaw the UK Regional book for the last three years. He has nearly 30 years’ experience in the marine market and worked in various underwriting and management positions in companies such as Aegis, Norwich Union, Zurich Financial Services, FM Global and Tokio Marine Kiln.


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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