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General Insurance Newsletter Friday 22nd March 2019

22 Mar 2019

Insurance News

Arthur J Gallagher has revealed the purchase price of Stackhouse Poland as $350m (£264.5m) in a US filing. The document showed that on 22 December 2018, it signed a definitive agreement to acquire 100% of the equity of Stackhouse Poland Group for a cash consideration. The transaction is subject to regulatory approval and is expected to close in the first quarter of 2019.

A tool designed to automate and speed up delegated authority claims has been launched by tech provider SchemeServe. The feature is already being tested by some MGAs, Broker Bennett Christmas and Nationwide. According to the provider the claims tool enables the exchange of claims information in real time throughout the delegated claims lifecycle, from logging claims and providing a portal for customers to upload supporting images directly, to rules based standard data provision and automatic claims settlement. 

The Chancellor of the Exchequer Philip Hammond has announced an operational review looking into the Insurance Premium Tax (IPT). According to the Spring Statement, the government is set to publish a call for evidence on where improvements can be made to ensure that the IPT operates fairly and efficiently.

Henshalls Insurance Brokers has bought Stafford-based Bayliss & Cooke for an undisclosed sum. The Newport-headquartered firm stated that the deal will see it become one of the region’s largest independent Brokers. In addition, Henshalls, which also has an office in Shrewsbury, noted that the acquisition will give it the opportunity to extend its reach into a whole new area.

The Watford branch of James Hallam Insurance Brokers is delighted to announce that its nominated charity, the Watford Workshop has been awarded a fantastic grant of £25,000 by the Aviva Community Fund. Phil Bayles, Managing Director Aviva Intermediaries and Will Greenwood OBE presenting Linda McIntyre CEO, Watford Workshop and Paul Trainor Divisional Director of James Hallam with their £25,000 grant.

The 45-day consultation on the closure of Ageas’ operations in Port Solent and Stoke-on-Trent has ended with the Insurer anticipating up to 430 redundancies. The job cuts will be phased through to 2020 and at this stage, the company is hoping that some staff will still find roles within the organisation. When the closures first came to light in January it was feared that up to 587 jobs could be at risk.

Neos Chief Executive Officer Matt Poll has stated that the InsurTech start-up is working with Aviva on a potential Broker solution for the Home insurance market. Aviva took a majority stake in the connected home provider in November 2018, after previously leading a £5m investment round in the start-up. Poll commented that the timings for the broker proposition were still to be confirmed, but he was hopeful that the start-up would be able to begin testing it with a few select Brokers later this year.

Marsh & McLennan Companies is to raise €1.1bn (£942m) through issuing senior notes, an update on the London Stock Exchange revealed. The note stated: “Marsh & McLennan Companies, Inc. announced today that it has priced €550m aggregate principal amount of its 1.349% Senior Notes due 2026 and €550m aggregate principal amount of its 1.979% Senior Notes due 2030.”

Last month Jardine Lloyd Thompson Group reported being hit by £77.2 million in transaction costs related to its sale to Marsh & McLennan Companies (MMC). Now MMC has announced a new senior notes offering, the net proceeds of which will part-fund the £4.3 billion takeover deal. It’s been revealed that a portion of the earnings will go towards clearing JLT’s debts.

A woman jailed last year for making 31 fraudulent medical claims, including one where she stated that her daughter had sustained serious injuries in the terror attack at M.E.N Arena in Manchester, has now been ordered pay back £139,000. On Tuesday 18th September 2018, Susan Pain, 51, of Kirkby, Liverpool, was sentenced at Liverpool Crown Court to two years in prison for fraud by false representation. 

Generali Group has announced their 2018 annual results and once again the company has had a good year. The group reported a €2.31 billion (£1.9 billion) net profit increase, up 9.4% from 2017 and €4.9 billion (£4.1 billion) operating result, at a 4% increase. In a statement accompanying the annual report Philippe Donnet, CEO of Generali Group, said the results meant Generali had met all their targets for the year.

Insurers in the UK are generally well-prepared for Brexit, according to a new report by ratings agency AM Best. The terms of the United Kingdom’s withdrawal from the European Union are still uncertain following the defeat in Parliament of the deal agreed upon by the EU and UK Prime Minister Theresa May. If the EU grants an extension, Brexit will be delayed beyond March 29. The Parliament also voted to reject a “no deal” Brexit under any circumstances. The insurance industry is frustrated that a deal has not been reached, but Insurers are generally well-prepared regardless of when or under what terms the UK leaves the EU, AM Best said.

Markel Corporation has released a 14-page “longer than usual” annual letter to shareholders wherein the firm’s Co-Chief Executive Officers drew particular attention to its insurance-linked securities (ILS) strategy while revealing a £96.4 million net loss. In the letter Thomas S. Gayner and Richard R. Whitt, III wrote “We’d like to take some extra time and space to describe our strategic initiative in the insurance-linked securities market, and to answer some specific questions many of you have raised in recent months about that initiative”. They went on to say “2018 was a good, but not great, year.... We grew the business both organically and by acquisition. We increased the capabilities of the Markel Corporation in every aspect of our business. As a marker of this growth we set a new record in revenues.” They told shareholders: “While we are reporting lower bottom line profitability due to downdrafts in investment markets and ongoing high levels of insured catastrophes, we believe that the economic value of Markel stands at a new record level as well."

LV= has decided to team up with the University of Bristol, a top UK university which houses the Jean Golding Institute (JGI) for Data Science and Data Intensive Research. As part of efforts to advance data science capabilities, LVGI and the university will work together on research and development projects aimed at better understanding the possibilities presented by machine learning and artificial intelligence particularly in the context of insurance. A team of data scientists and data engineers will be put together, to be based within the university’s School of Engineering and Computing.

Mactavish has challenged Insurers and Brokers to guarantee that eight common flaws it has identified in policies will never be used as reasons to refuse pay-outs on Cyber insurance claims. In recent months there has been a debate in the market about the quality of Cyber cover following a Mactavish report which described Cyber cover as “flawed”. Market experts and providers responded stating they were “perplexed” by the findings which were described as “scaremongering”.

CFC Underwriting has launched a Liability product suite aimed at SMEs and contractors. According to the provider the products address the core risks associated with pollution events, including clean-up costs, environmental and natural resource damage, third-party liability and emergency costs. CFC explained that the policies are sold via Brokers in a number of territories, with a particular focus on the UK and Canada.

Financial services consultancy Altus has been working with TISA to develop a self-assessment tool which allows organisations to benchmark their Vulnerable Customer (VC) approach against the wider industry. The tool has been split into the four categories identified by the FCA, Policy, Systems, Products and Implementation and should reflect best practice across multiple domains including general insurance.

Beazley has streamlined its UK Cyber policies, Infosec, aimed at larger organisations and BBR for SMEs. Infosec has now been updated to include access to the Beazley Breach Response unit, Beazley’s in-house breach response team. The team helps to protect the relevant policy-holders against cyber-attacks. Originally its services were offered exclusively to BBR policy-holders.

The Society of Insurance Broking has detailed its progress since it was launched by the Chartered Insurance Institute last year as a replacement to its Broking Faculty. The organisation has held several meetings with the market and is also taking part in a panel session at the British Insurance Brokers’ Association (Biba) conference in May. In addition, Liz Foster, Managing Director of the society, explained that it has published two good practice guides for its members which cover the dark web and smart water.

The EY Brexit Tracker has found that 23 financial services firms – eight of which are Insurers – have announced transfer of assets to EU countries due to Brexit. The Tracker estimated that this amounts to £1trn worth of business. Not all firms have publicly declared the value of the assets being transferred, but EY stated that the Brexit Tracker has followed public announcements worth around £1trn, up from £800bn last quarter.

The fifth annual Dive In Festival for diversity and inclusion in insurance will take place on 24 to 26 September 2019. The festival is an initiative of Inclusion@Lloyd’s and aims to highlight the business case for diverse and inclusive workplaces and provide ideas and inspiration on how to bring about change.The 2019 festival will see events taking place in more than 30 countries with the focus on driving attendees from awareness into action.

The Financial Services Compensation Scheme has recovered just under £300m over the past five years from failed financial services firms. According to the regulatory body these sums reduced FSCS levies on the industry. However, in 2019 Brokers actually saw FSCS rise with a predicted increase of £16m, prompting a warning from the British Insurance Brokers Association.

British insurance giant Legal & General has completed a £230 million pensioner buy-in transaction with Howden Group. The pensions risk transfer (PRT) deal features the nearly 2,000 pensioner and deferred members of the Howden Group Pension Plan. According to the announcement, around two-thirds of that number are current pensioners. Howden Group, a global engineering business that provides air and gas handling solutions, was established in Scotland in 1854.

Earlier in March 2019, news of a potential mega merger between insurance brokerage giants Aon Plc and Willis Towers Watson (WTW) hit the global headlines with a bang. Rumours of Aon’s potential bid were shared by Bloomberg, with the reports valuing WTW at $24 billion, which would have made this the industry’s largest merger on record. The 24hrs of industry fervour has now calmed down, but speculation remains as to what a merger between two of the three largest insurance brokerages in the world might mean for the wider industry. Jonathan Froelich, partner, KPMG Advisory, commented: “A mega deal between two of the three largest brokerages in the world has the potential to impact a variety of constituents in the insurance marketplace. For carriers, brokers are the intermediary force that act as the go-between with the policyholder. As you get more premium controlled by fewer intermediaries, I think this increases the potential to drive up prices for carriers. The second potential impact of such a merger would be in the broader commercial marketplace. The bread and butter business of a lot of the mega insurance Brokers is in larger commercial risks for global businesses. If you take one of those Brokers out of the marketplace by merging it with another, you’re potentially offering less choice to the large global corporations that really need partners with expertise and presence in the world markets”.   

Cyber criminals are increasingly targeting small businesses, according to a new report from Chubb. The report examines the emergence of new types of ransomware that are increasingly targeting businesses, including small and medium-sized enterprises (SMEs). Ransomware attacks use malicious software to block businesses’ access to their network until a ransom is paid.

It’s the turn of Lloyd’s of London to reveal its gender pay gap numbers for 2018 as the enterprise affirms its commitment to celebrate diversity. Within the Corporation of Lloyd’s, a mean gender pay gap of 19.9% – from 27.7% previously – was recorded for the relevant period. The statistic pertains to Lloyd’s employees in the UK and does not relate to the workforce of Lloyd’s market firms.

NatWest is set to launch a virtual account platform in partnership with Nordic software company Tieto in efforts to provide SME and corporate clients a new customer monies and virtual account management utility. The bank said the platform is supposed to aid regulated professions such as insurance firms. It noted that it will help insurance professionals to separate their clients’ monies to comply with industry best practices and regulatory requirements.

Insurer MORE TH>N has launched MORE TH>N REW>RDS, a new cashback scheme to help loyal customers offset the cost of renewing their insurance. The scheme gives Home, Pet and Car insurance customers unlimited cashback on purchases at hundreds of high street and household brands, which is stored in an online wallet. The growing list of retailers available currently includes Tesco, Morrisons, Just Eat and many more.

Broker Network and Compass are not being brought together according to CEO Des O’Connor. O’Connor, who leads networks owner Bravo Group explained that the organisation has rebranded its acquiring vehicle Broker Network Partners as Ethos in order to make it more palatable for Compass members to be bought.

 


 

Market Movers and Shakers

Jason O’Sullivan, who was an Account Executive at Crawford & Company for five years before making the switch to Gallagher Bassett in 2013, has returned to the Atlanta-headquartered claims management giant. With more than 14 years of experience, the London-based expert has been tapped to serve as UK Director of Sales at Crawford’s Third-Party Administrator (TPA) Broadspire. He most recently held the role of Business Development Manager, whose remit was focused on developing TPA/claims solutions for clients.

Russell Wilson has been appointed to the new position of Head of Group Contact Centres for Markerstudy Group of Companies. Taking up the role with immediate effect, Russell is an example of home-grown talent, having joined the group in 2009 as a Team Leader for Chaucer Direct. Russell was promoted to Operations Manager in 2014 and to Head of Direct in August 2018. During this time he has embraced the acquisition of Chaucer Direct by Markerstudy and the development of the new brand Geoffrey Insurance. Russell has been instrumental in Geoffrey Insurance becoming a market leader in customer service, with his team winning numerous awards and also achieving a Defaqto 5 star rating for both Car and Commercial vehicle insurance.

GRP has recruited a new digital marketing team to develop the Group’s web presence and drive organic growth via digital channels. The team will be led by James Hart who has been appointed as Group Head of Marketing. James is an experienced digital marketer, previously Sales and Marketing Director of broker AIM Risk Services and before that Business Development Director of Towergate Underwriting. 

Berkeley Insurance Group announced that it has appointed John Pennick, Divisional Director and Mark Hayward, Client Services Director to its Board of Directors. The Leicester based company are one of the UK’s largest privately-owned Chartered Insurance Brokers headquartered at Colton Square. The investment in its board is to support the ambitious growth plans of the company.

William Browne has joined Ecclesiastical as a Development Underwriter for schemes business. William joins the Insurer from Broker Network, where he was a Business Development Manager. Prior to this, he worked at Advance Insurance Agencies Limited and spent six years at Ageas as a Broker Account Executive and Underwriter.

Moorhouse Group Ltd, which consists of online brokerages constructaquote.com, Black & White and Xbroker.com, has hired Depesh Nathwani as Sales & Operations Director and a Member of the Board, the company has announced. Depesh joins the Caerphilly-based insurance brokerage from his previous post in London as Business Development Director and Head of Digital Services at MBA Group.

Last month saw the appointment of Jean-Paul Conoscente as Chief Executive of SCOR Global P&C… now further personnel changes within the global Property and Casualty operations have been announced. Michel Blanc, who currently serves as CEO of the Asia-Pacific region (APAC) at SCOR Global P&C, is moving up to his new role as CEO of Reinsurance come April 01 2019. The company veteran started his career at the major re-insurer in 1992 and has been based in Tokyo, Paris, New York and Singapore.

Willis Towers Watson has appointed David Ripton as its Head of Broking, Global Marine in its Corporate Risk and Broking unit. David joins from Marsh where he held the position of CEO for Marine UK since 2014. David brings over 30 years of Marine insurance experience in the global London marketplace.

Ecclesiastical Insurance Office Plc has made a couple of major appointments, including for its board of directors. First off, the specialist Insurer has snapped up William Browne from Broker Network where he served as Business Development Manager. At Ecclesiastical – which has been operating in the schemes market for over three decades – Browne will augment the dedicated unit in his capacity as Development Underwriter. Meanwhile, effective immediately, Angus Winther and Francois Boisseau are joining Ecclesiastical’s board as Non-Executive Directors.

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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