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General Insurance Newsletter Friday 24th April 2020

24 Apr 2020

Kingsbridge and Fresh-owner, Vantage aims for £500m premium. CEO Jacquie Boast has restructured the business with Fresh CEO Mike Wall exiting and 75 staff leaving the business as she seeks to position Vantage for growth. Since Jacquie Boast joined Vantage in July last year there have been a number of significant changes at the broker business which is owned by US firm NSM. Boast originally came in as Transformation & Change Director and admits: “You don’t take on a role like that without wanting to make changes.” She quickly moved to the CEO position following the retirement of John Collyear who left at the start of 2020 and did not retain a stake in the organisation.

Comprehensive Car insurance premiums fell by 1% (£6) in the first quarter of 2020, according to the latest Confused.com Car Insurance Price Index, in association with Willis Towers Watson. The average premium in Q1 2020 was £809, down from £815 in the previous quarter. However, average premiums had previously been on the increase and rose by £47 over the past year. According to the data, driver in Central and North Wales saw the greatest quarterly drop in process, with premiums falling on average by 3% to £637.

La Playa customers have received a warning and an apology from CEO Mark Boon following a phishing attack. In an email designed to alert customers to the breach, Boone detailed that one employee’s email had been compromised and included a link to a bogus fax message. According to the email the link is not dangerous but, if clients enter details into the mock site, they could find themselves at risk. According to La Playa, its systems picked up the scam within 20 minutes of the fake email going out to clients. And, as far as the broker is aware, no clients shared data via the phishing email.

Axa XL has announced a proposed restructure of the operating model of its insurance business following a strategic review, along with a new leadership team. The proposed changes include the creation of a single global insurance underwriting function and the formation of three geographical business units across the Americas, Eurasia and the UK & Lloyd’s market. Axa XL was created in 2018 after Axa bought XL Catlin in a deal worth $15.3bn (£11.1bn).

Support NMU in the 2.6 Challenge to raise money for Mind. The 2.6 Challenge is a nation-wide virtual event launching this Sunday, 26 April 2020. This should have been the date of the London Marathon, but like many other fundraising events it has been postponed to later in the year . In response, charities are encouraging people to take part in The 2.6 Challenge on that date instead!

AXIS Capital Holdings Limited has announced that it expects to release financial results for the first quarter ended March 31, 2020, on Monday, May 4, 2020, after the close of the financial markets. Albert Benchimol, President and Chief Executive Officer, and Peter Vogt, Chief Financial Officer, will host an investor teleconference, including a question and answer period, on Tuesday, May 5, 2020, at 9:30 a.m. EDT to discuss the first quarter results as well as related matters.

Talanx Group and its insurance brand Hannover Re are not suspending dividend payments even as they simultaneously withdraw their respective profit outlooks for 2020.  “From today’s standpoint, the existing net income target of between ‘more than €900 million’ and €950 million is subject to too many uncertainties to be maintained,” stated Talanx, which is also the name behind HDI.

Insurance law firm DAC Beachcroft has set its sights on expansion across Scotland – and that means offering a new unit for England and Wales claims. North of the border, it has made a series of additions to the Glasgow office on the back of picking up a five partner-led team from BLM back in November last year. Among the latest additions are partner Keith Mathews and associate Ed Radford, both of whom are rejoining the firm from BLM.

“The government has considered representations from key stakeholder groups and agrees that now is not the time to press ahead with significant transformational change to the personal injury sector.” Those were the words of Lord Chancellor and Secretary of State for Justice Robert Buckland yesterday in his written statement to Parliament which was also made in the House of Lords. Providing an update on the implementation of the whiplash reform programme, the MP said it’s been decided to further delay to April next year.

Cyber analytics provider CyberCube has released an updated version of Portfolio Manager, a Cyber risk platform for Insurers, Reinsurance Brokers and Reinsurers. Portfolio Manager allows Insurers to stress test reinsurance portfolios against a spectrum of cyber-related scenarios, including data breaches, cloud outages, global ransomware attacks and financial fraud. The tool, first launched in 2018, was the world’s first fully probabilistic cyber catastrophe model. CyberCube said that it has worked with leading market participants over the last two years to develop the latest edition of the cyber catastrophe model.

Sompo International Holdings is saying goodbye to insurance marketplace Lloyd’s of London. Starting January 2021, the specialty Provider of Property & Casualty insurance and reinsurance will no longer write business from Endurance at Lloyd’s or Syndicate 5151. Sompo International said all renewals and new business will be written from Endurance Worldwide Insurance Limited, as the Bermuda-based Insurer consolidates its London presence into one company market platform.

 

 

Coronavirus-related News

Hiscox has confirmed that it expects to pay net claims of $150m in the six months from March 2020 as a result of Covid-19. It further detailed that, if the lockdown restrictions on travel and mass gatherings go beyond six months it expects to add $25m to the total taking it to $175m. The Provider is under attack from a consortium of companies, the Hiscox Action Group, over its insistence that their BI policies do not cover the current pandemic. It reiterated that its commercial policies for SMEs do not provide Business Interruption in the UK under the current circumstances.

In other news... The Night Time Industries Association (NTIA) has been advised that members with Hiscox policies have a good case against the Insurer where Business Interruption cover has been refused amid the coronavirus pandemic. The organisation has hired Philip Kolvin QC to advise on its members’ rights under their insurance policies. Michael Kill, CEO of the NTIA, commented: “Night Time Economy businesses are being denied legitimate insurance claims, many claims are being disputed by Insurers based on contrived arguments to avoid sharing the financial burden during the Covid-19 crisis.

In further news... Hiscox Action Group has appointed City law firm Mishcon de Reya as its Lead Counsel in its legal dispute against Hiscox. The Group, which now includes over 200 members, was formed after a number of SMEs claimed the provider was wrongly denying BI claims relating to Covid-19. It added that it is also in “advanced talks” with a litigation funder to underwrite its entire legal costs. Mark Killick, of Media Zoo and a steering group member, commented: “Hiscox thought they could get away without paying but that is not going to happen. We have appointed top legal counsel, we will be fully funded and we are going to force Hiscox to do the right thing and honour its obligations.”

Also in the news...“We have a strong business and we have strategies in place to get us through this crisis and out the other side, so we look forward to being back as and when the time is right.” Those were the words of restaurant chain Brasserie Bar Co when it was previously announced that all of its sites would be closed until further notice amid the coronavirus pandemic. “Strategies” included having Business Interruption Insurance, but it’s been revealed that Brasserie Bar Co’s claim had been rejected by Hiscox, which last week insisted that its core policy wordings do not provide cover for business interruption as a result of the general measures taken by the UK government in response to the crisis.

Acknowledging there remains material uncertainty due to the unprecedented events that are currently unfolding, Hiscox has conducted further analysis of its potential exposure to the COVID-19 pandemic and provides an update. Hiscox is actively settling claims for event cancellation and abandonment, media and entertainment and other segments including Travel. On the basis that disruption caused by restrictions on travel and mass gatherings continues for a six-month period from March 2020, Hiscox expects to pay net claims totalling up to $150 million. In the event that restrictions on travel and mass gatherings are extended beyond six months, Hiscox expects that these claims could increase by an additional $25 million.

Insurance lawyers have warned that Brokers will face an increase in litigation from unhappy clients as a result of the coronavirus crisis. However, the legal experts argued that it is unlikely that these cases will be successful if they do end up going to court. “I do not believe it is going to be easy to make a claim against a Broker for failing to arrange insurance for this ‘pandemic episode’, because Pandemic Insurance, as such, has never been available,” commented Roger Flaxman, Executive Chairman at Flaxmans. He added “There might be a lot of attempts to sue Brokers but I’m not convinced they would be altogether successful or quick to resolve. I am also perturbed to hear that some PI policies may not cover these claims.”

In other news... Flaxmans has issued a Covid-19 Business Interruption Recovery Initiative which has been sent to insurance industry bodies and the Government providing a solution to the thousands of businesses affected by the pandemic. The paper makes a case for a joint initiative between (primarily) the UK Government and the British insurance industry to deliver and manage a co-insured Business Interruption recovery scheme for the mutual benefits of; 1. The UK’s business entities (as defined) 2. UK Government and Parliament for and on behalf of the interests of the subjects of the United Kingdom 3. The UK insurance industry and the Underwriters at risk.

An MP has tabled an early day motion (EDM) calling on the government to press Insurers to use cancelled dividend payments to shareholders to pay all Covid-19 related claims. In the EDM he also expressed concern that the Financial Conduct Authority (FCA) has advised Insurers it sees no reason to intervene in cases where Business Interruption claims resulting from the coronavirus are not covered. Edwards is the Plaid Cymru MP for Carmarthen East and Dinefwr.

Lloyd’s confirmed it is pulling together data on Insurer Business Interruption provision following a request from the Prudential Regulation Authority (PRA). According to a piece on Reuters, Lloyd’s is in discussions with the government and other stakeholders about a possible Pandemic Re government backstop and is also pulling together details of Insurer Business Interruption policies. The report stated that the marketplace had asked Insurers to provide information for the regulator by 24 April in a ‘Dear CEO’ letter.

Admiral is to return £110m to its Car and Van Insurance customers in recognition of the fact that its customers are staying at home and driving less during the UK wide Covid-19 lockdown. The Provider announced that a £25 refund will be automatically given to all customers for each car and van covered with Admiral as at April 20 2020, a total of 4.4m vehicles. It is believed that Admiral is the first UK Provider to take this step following similar moves in the USA which last week had returned up to $800m to customers.

A steering group made up of UK insurance industry leaders has been formed with the aim to ensure that the industry can better respond to future pandemics. It will also work with Pool Re and alongside the industry to support customers in the current coronavirus crisis. The insurance sector has widely been criticised over its response to Business Interruption insurance following the coronavirus outbreak. The group, which had its first meeting on Friday 17 April, is chaired by Stephen Catlin, Chairman and CEO of Convex. Other members include: Maurice Tulloch (CEO, Aviva), Stephen Hester (CEO, RSA), Julian Enoizi (CEO, Pool Re), Nick Frankland (UK CEO Reinsurance Solutions, Aon), James Nash (CEO, International, Guy Carpenter) and James Kent (CEO, Willis Re).

Insurtech Broker Lenny has announced it is closing its operations following the coronavirus outbreak. In a statement on the Broker’s website, Chief Executive Officer Karin Nielsen, said: “It’s with a real heavy heart I need to let you know that Lenny is now closed forever. Like most start-ups we need cash to help us get off the ground, pay our team and keep the lights on. “Unfortunately, our backers are no longer in a position to provide us with the funding we need and with the Coronavirus outbreak so fresh we were forced to take the painful decision to close our doors before we really had a chance to take off.”

Hyperion X, the data analytics and digital delivery business of Hyperion Insurance Group, has launched an upgrade to its digital platforms in response to a spike in client demand. Hyperion X said that it has experienced record demand as the market reacts to the COVID-19 pandemic, including significant demand for its recently launched digital trading platform, Tepfin X. Accredited by Lloyd’s, Tepfin X – the successor to the Tepfin platform launched in 2004 – allows banks and their brokers to obtain quotes from across the structured credit insurance market, so they can transact more complex risks.

“A prolonged period of economic uncertainty means that businesses continue to face a challenging trading environment, so it is not surprising that there is greater focus on the benefits of Trade Credit insurance.” Those were the words of Association of British Insurers (ABI) policy adviser Graham Walsh in January when the trade body released Trade Credit insurance figures. Just imagine how much more crucial it is to have Trade Credit insurance now, given the coronavirus crisis.

A new partnership has been born – and it’s one that offers a neat incentive in the Professional Indemnity Insurance (PII) space. Brunel Professions Ltd is teaming up with training and support service provider Mercia Group to offer a preferential deal to its clients within the UK accountancy profession. In a release announcing the deal it was outlined that Brunel typically secures savings for clients on renewal premiums, with those firms that boast strong training and compliance procedures enjoying bigger discounts as they typically have a better understanding of risk management. As such, Brunel Director Jonathan Filer explained, Mercia will be able to offer this deal to clients using its services.

As a key insurance partner to the life sciences industry, HDI Global SE (HDI), plays a significant role in providing underwriting capacity to pharmaceutical and medical organisations across the globe. The outbreak of COVID-19 has only amplified responsibility to ensure clients have the cover they need to develop the equipment, drugs and vaccines the world desperately requires to successfully combat the spread and impact of the virus. client Smith+Nephew have answered the call from the UK Government to assist in the production of OxVent ventilators for use in treating patients suffering from coronavirus. Whilst this activity falls outside of Smith+Nephew’s usual manufacturing capabilities, as the company’s primary Product Liability Insurer, HDI have agreed to extend their existing cover to include this vital new product line at no extra cost and with no amendment to their original terms.

Global reinsurance and insurance Provider Everest Re Group, which will be releasing its first quarter results on May 06, has disclosed its coronavirus-related loss estimate for the period. Operating through subsidiaries in the US, Europe, Singapore, Canada, Bermuda, and other territories, the group expects to report a combined ratio below 100% for the consolidated reinsurance and insurance operations in the first quarter of 2020. “Included in the above combined ratio is an incurred but not reported (IBNR) provision for an estimate of US$150 million (around £121.5 million) in pre-tax net first party losses for expected claims related to the pandemic,” noted Everest. “The majority of the losses are expected to come from our reinsurance segment.

The Automobile Association (AA) in the UK has announced that it will extend its free breakdown service for National Health Service (NHS) workers following the government’s announcement that it will extend the lockdown for a further three weeks. The AA UK has been providing free breakdown services since April 02 for NHS workers whose vehicles break down on their way to or from work amid the COVID-19 pandemic.

Travelers has reported a 25% drop in quarterly profit. The company also warned that potential claims for compensation coverage for furloughed and laid-off employees would impact its results for the year, according to a Reuters report. With the coronavirus pandemic weighing on the economy, millions of Americans are now jobless. Travelers said it might see “elevated claims frequency and severity” for its workers’ compensation line of business as states expand workers’ comp coverage. Commercial Insurers are facing broad pressure to cover claims from businesses impacted by COVID-19-related shutdowns.

With the marine industry facing extreme challenges brought on by the COVID-19 pandemic, Allianz Care has announced a new partnership that it hopes can ease access to medical services for crews working abroad. It is teaming up with Tritan Software to offer a full range of services through the SeaCare Health Platform, a software solution for medical management. Through the platform, vessel operators can use a range of tools to manage health operations – ranging from telemedicine consultations through to governmental compliance reporting, illness tracking and communicable disease management.

Amid the coronavirus pandemic, clients’ requirements are changing – and Brokers are already showing their adaptability. According to iSurveyRisk, it has seen a rapid increase in virtual Property risk assessments from Insurance Brokers since the outbreak – reporting a 25% leap in its home market of Australia, as well as in the UK.

No-one saw it coming, but the coronavirus crisis has pushed Jewel Bidco Limited – also known as LMP Bidco, a firm formed on behalf of funds advised by Lovell Minnick Partners LLC and its affiliates – to deviate from the statements of intent it made when the company snapped up Charles Taylor, which provides professional services to clients in the global insurance market. “The stated intentions included that, following completion of the acquisition, Jewel had no intention to make any material change to the conditions of employment of Charles Taylor employees and confirmed that, following completion of the acquisition, the existing contractual and statutory rights and terms and conditions of employment, including pension obligations, of the management and employees of Charles Taylor and its subsidiaries would be fully safeguarded in accordance with applicable law,” noted Jewel.

Specialist Insurer Beazley has appointed Bethany Greenwood as Global Head of Cyber & Executive Risk (CyEx) from July 2020. She will join Beazley’s Executive Committee at the same time. Greenwood joined Beazley last September to lead the London market and US-based Executive Risk team, focusing on a wide range of products including US Directors & Officers (D&O) and Employment Practices Liability. In a career spanning more than 20 years, she has worked extensively across Management Liability Lines, including D&O, Errors & Omissions and Cyber programmes. She will succeed Mike Donovan who has decided to retire from Beazley after 15 years with the company. However, Mike will remain with Beazley for longer to ensure a smooth handover.

Axa XL has confirmed that four senior leaders, including CEO UK legal entities Paul Greensmith, have left the provider following its reshuffle. Greensmith had been CEO of the UK business since September 2018. Axa XL General Counsel, Sean McGovern, has taken on the role of Interim CEO, UK & Lloyd’s, while the provider searches for a permanent replacement. Reportedly, Greensmith is heading to AIG.

Euler Hermes UK and Ireland has appointed Özlem Özüner as Director of Market Management, Commercial Underwriting and Distribution (MMCD) with effect from 6 April 2020. Özüner is responsible for fostering Euler Hermes’ UK and Ireland client and Broker relations, business development and marketing. She has joined the board of management and reports to CEO Milo Bogaerts. Before joining the UK and Ireland team Özüner was CEO of Euler Hermes Turkey, which she joined in 2011 and where she was instrumental in delivering significant growth in the face of challenging global economic conditions. She has more than 20 years’ experience in financial services, previously holding leading roles in banking and finance, including two years in corporate banking at HSBC in London. She succeeds Mike de Bresser, who was appointed CEO of Euler Hermes Netherlands earlier this year.

The Financial Services Compensation Scheme (FSCS) has restructured parts of its organisation. As a result, Alex Kuczynski, who has worked in a number of roles across the scheme over the last 20 years, is leaving the organisation. Kuczynski was FSCS’s longest-serving senior executive and most recently held the role of Chief Corporate Affairs Officer. The move also includes merging the organisation’s communications and marketing teams, comprising public relations, stakeholder relations & public affairs, regulatory policy, international liaison & research, and marketing. Lila Pleban, formerly Head of Digital & Marketing, has been appointed Interim Chief Communications and Marketing Officer as of 1 April 2020.

ERS has appointed their experienced Prestige team member, Sam Prever, as a dedicated regional Prestige Underwriter for the South of England.

CNA Hardy is pleased to announce the appointment of Peter Elliott as Marketing & Communications Director. Peter joins as Head of the Marketing & Communications function for CNA Hardy, reporting to Andy Clements, Head of Distribution and Marketing Europe. He will be responsible for leading the marketing team, and implementing brand and marketing strategies that support CNA Hardy’s specialist business.

Melanie Markwick-Day has joined Chubb in London to serve as Upstream Energy Senior Underwriting Officer for the Insurer’s Overseas General Energy division. The Ascot and Neon alumnus will be in charge of setting, implementing, and delivering underwriting strategy for global upstream Energy. Markwick-Day’s remit spans oversight of the five regional hubs – Europe, Asia-Pacific, Japan, Latin America, and Eurasia & Africa – within Chubb overseas general as well as identifying strategic opportunities alongside the team in North America.

UK Managing General Agent Markerstudy Insurance Services Limited (MISL) has given its senior management team a boost with the addition of Operational Performance Head Ann Pelaez and Head of Finance Steve Smith. Reporting to Group Chief Operating Officer Dan Fiehn, Pelaez will be in charge of a root and branch review at MISL, incorporating latest technology and training methods to ensure business processes are streamlined and efficient as well as improving the customer journey. Smith, meanwhile, will be under the leadership of Group Finance Director Keith Barber. “Steve joined Markerstudy nearly five years ago, as part of the Chaucer acquisition,” noted Barber. “In that time his ‘can do’ attitude has cemented him as a pivotal member of the team and this promotion is thoroughly deserved.

Paul Jardine, a renowned insurance business leader with experience at Lloyd’s and across the London market, has now been picked up by international specialty Reinsurance group Chaucer, where he will take on the role of Non-Executive Chairman. He slots into the role previously held by Chris Stooke who will retire later this year. His appointment remains subject to regulatory approval. The veteran of the likes of AXA XL and Equitas, who was also a partner at Coopers & Lybrand, has been welcomed by John Fowle, the firm’s CEO.

AFL Insurance Brokers, an independent Lloyd’s broker, has appointed Pilar Villanueva as Head of its Latin American Desk. She will be based in London. Villanueva began her career in 1997 and has worked in markets throughout Latin America and globally, with specialties in Property and Casualty. She was most recently an Account Executive at Price Forbes & Partners and has also served as a Divisional Director at Willis.

Swiss Re Corporate Solutions has announced the appointment of Matthias Grass as Chief Financial Officer. In his new role, Grass will oversee a team of about 200 finance professionals in offices around the world. Grass will assume the role on July 01, subject to regulatory approval and will be based in Zurich, relocating from Bratislava. Since joining Swiss Re in 2013, Grass has served as Chief Financial Officer of Group Operations and Chief Financial Officer for Swiss Re’s service companies. Prior to joining Swiss Re, Grass held various positions of increasing seniority and McKinsey & Company.

It was just last year that global loss adjustor McLarens restructured its UK leadership team to put major loss and technical adjusting at the centre of its operations – and now it is introducing a new member of its UK & Ireland executive board as it looks to strengthen further in the area. Neil Baldwin has come on board as Executive Director, with 33 years of experience behind him. He was the Head of the UK retail team, client relationship management, at Sedgwick UK before making the switch, but actually began his insurance career back in 1986 as a multi lines Claims Handler. He went on to spend 14 years at Capita McLarens from 1990, specialising in technical loss adjusting and assuming the role of UK Major Loss Team Manager, while later holding a position at Vericlaim.

When one door closes, another one opens – and as Phil Sloan retires from the position of Director of Underwriting at Coverys Managing Agency Limited, his departure has given an opportunity to Robert Forster. Forster steps into the role with more than three decades of experience backing up his promotion. Before joining the Lloyd’s Managing Agent of Syndicates 1975, 1991 and 3330, he held the position of Chief Underwriting Officer and Active Underwriter of Novae Syndicate 2007. It was noted in a release that under Forster’s leadership, Novae was able to transform from a long-tail Casualty focus to a short-tail underwriting strategy with consistent profitability.

Charles Taylor has announced that David Marock is stepping down as Group CEO. Marock, who has been Group CEO for almost nine years, said that his decision to step down was very difficult and that he is grateful for having had the privilege to lead the organisation. He has offered to provide support during the transition period and the board is initiating a search to find a permanent Group CEO, led by Edward Creasy who has just been appointed Executive Chairman for the Group. Creasy will remain Executive Chairman until the search for a permanent Group CEO is completed.

Probitas 1492 names Head of PI and Financial Institutions and it's a step up for Probitas 1492 veteran, Paul Nolan. Described as a “strategic internal promotion,” Nolan will move into the role of Head of Professional Indemnity and Financial Institutions with immediate effect. He is set to work closely with Ernesto Medina on strategic and portfolio management, with the latter to also retain responsibility for the underwriting of the Financial Institutions account while reporting into and collaborating with Nolan.

Loss adjustor MatthewsDaniel names new CEO. With Kevin Jarman moving on after 30 years in the top job, Chief Operating Officer David Cox will now step into the role of CEO. Officially taking the position earlier this month, he will report to president of Bureau Veritas Marine & Offshore, Matthieu de Tugny who noted he has been “well prepared” for the role.

Global aerospace reinsurance Broker Piiq Risk Partners will soon welcome a new Senior Partner. Joining the firm next year will be Neil Maynard, who will be based in London and report to president Marcel Chad. The firm has swooped for a figure with extensive experience – Maynard has spent more than a quarter of a century with Willis Towers Watson, recently holding the role of Managing Director and working predominantly with its North American business.

AXIS Capital has named a new leader for its reinsurance legal entity domiciled in Ireland, known as AXIS Re SE. Subject to regulatory approval, Mark McCormick will become CEO of the arm and will be responsible for its Zurich branch. He is also set to take his place among the board of directors for AXIS Specialty Europe as a non-executive director.

In further news...AXIS Insurance, a business segment of AXIS Capital Holdings Limited has announced the appointment of Max Perkins in the newly created role of Head of Strategy and Innovation for the Company’s Global Cyber and Technology unit, effective immediately. Mr. Perkins is based in the United States and reports to Dan Trueman, Global Head of Cyber and Technology for AXIS Insurance.

 

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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