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General Insurance Newsletter Friday 24th January 2020

24 Jan 2020

The British Insurance Brokers’ Association (Biba) have launched their 2020 manifesto, titled ‘Access’. The manifesto, split across nine chapters, particularly focuses on improving access to insurance, navigating Brexit, reforming regulation and integrating advances in Motor. Steve White, CEO at Biba, commented: “A Broker’s fundamental role is assisting customers with access to appropriate and suitable insurance yet Brokers themselves also need access to insurance capacity for those more challenging risks.". Biba also announced a number of green initiatives in the manifesto. The trade body has issued five commitments and one call for action to support ethical and sustainable trading.

The Competition & Markets Authority (CMA) has called on regulators to put in place sufficiently strong remedies to tackle dual pricing. The government body has published an update outlining the progress made since Citizens Advice lodged its super-complaint about the loyalty penalty in September 2018. It stated that while it has seen some positive activity, the work in the five identified markets, which include home insurance, is “far from complete”.

By Miles has announced that it has received an ‘open banking’ licence from the Financial Conduct Authority (FCA). The licence allows the InsurTech to view to a wider range of financial data from consenting customers. By Miles said the move would assist vulnerable customers who may have otherwise not been able to take out a policy, as well as enabling more flexible payment methods for existing customers.

Car insurance premiums rose by £32 (4%) during Q4 2019, the Willis Towers Watson and Confused.com Car Insurance Price Index has revealed. The average premium recorded in Q4 2019 was £815, up from £783 the previous quarter. The figure is an annual change of £41 (5%) on the £774 average recorded in Q4 2018.

Hyperion has posted a 17% increase in revenue for the year ended 30 September 2019, taking it up to £725m. This follows a 16% uplift in revenue last year. The business also reported a 16% rise in adjusted consolidated Ebitda to £211m for 2019 and flagged that it had achieved total organic growth of 11% for the year.

Brokers have reiterated the call to be put in a separate Financial Services Compensation Scheme (FSCS) pot after the indicative levy for intermediaries nearly doubled for 2020/21. Last week, FSCS stated that the indicative levy for Brokers for the next financial year was £23m, up from £12m in 2019/20. The reason for the increase was a spike in claims relating to the mis-selling of PPI ahead of the complaints deadline in August 2019.

For the first time ever, Cyber incidents (39% of responses) ranks as the most important business risk globally in the ninth Allianz Risk Barometer 2020, relegating perennial top peril Business Interruption (BI) (37% of responses) to second place. Awareness of the Cyber threat has grown rapidly in recent years, driven by companies’ increasing reliance on data and IT systems and a number of high-profile incidents. Seven years ago, it ranked only 15th with just 6% of responses.

Ecclesiastical has launched guidance to assist Brokers in talking to clients about Cyber risks. The Insurer said that the increasing use of digital technology has exposed clients to new risks and that Cyber attacks were increasing in frequency. Research conducted by Ecclesiastical found that 54% of Brokers would welcome more support from Insurers regarding their Cyber products.

In further news...Ecclesiastical has partnered with motivational speaker Chris Moon to produce four videos focused on wellbeing. The specialist Insurer has produced the guidance in response to its 2019 Broker Wellbeing Survey, which found that two-thirds of Brokers had experienced some kind of mental health issue linked to work in the past 12 months. The survey of 200 Brokers found that stress continues to be the most commonly experienced mental health issue at work, affecting three in five Brokers. This was followed by anxiety (37%) and feeling overwhelmed (34%).

SSP have signed up to become a member of the Managing General Agents’ Association (MGAA). Formed in 2011 as a not-for-profit organisation, the MGAA and its board of Directors and specialist committees focus 100% on shaping the future of delegated underwriting in the UK. Managing General Agents (MGAs) are an important, established and fast-growing sector of the UK insurance industry. Over 300 MGAs currently underwrite over 10% of the UK’s £47 billion general insurance market premiums. MGAs deserve specific representation to lobby on their behalf, communicate their considerable benefits and drive best practice and the association is there to fulfil this role.

In other news...SSP-owned Keychoice has partnered with NIG to offer a fully integrated commercial vehicle policy through SSP’s back-office systems. According to the software house, NIG’s commercial vehicle policy is designed for single vehicle contracts on a named driver basis for vehicles up to 3.5 tonnes, and offers comprehensive and third party fire and theft cover options.

Applied Systems have announced that Wentworth Alexander has selected Applied Epic as its software house provider. The Broker was previously with SSP. According to Applied, Wentworth Alexander will use the open platform to integrate a customer self-service portal and mobile apps for staff and customers to create a digital experience.

Beazley has partnered with HewardMills to offer data breach prevention services. International Cyber policyholders at Beazley will now have access to Cyber risk management services and data protection officer services.

Specialist Cyber provider CFC has bought London-based InsurTech ThreatInformer for an undisclosed sum. According to CFC, ThreatInformer’s data enrichment technology helps Insurers better understand their customers’ exposures by compiling information about their risk profile from a variety of external sources.

Global Risk Partners and Searchlight Capital Partners are in late-stage talks about a potential deal. This follows reports from December that the Penta-backed consolidator was in discussions with Searchlight and Apax Partners with Evercore leading the process.

Zurich-owned Navigators and General (N&G) has bought NMU’s commercial Marine Trade combined book for an undisclosed sum. The Brighton-based Insurer noted that the transaction brings a target risk appetite book of business to N&G and accelerates its growth in the Marine insurance sector.

A lawsuit between Marsh & McLennan-owned JLT Specialty and Hyperion has been settled for an undisclosed sum according to a statement from the two companies. The statement read: “JLT and Hyperion have reached a confidential settlement of the lawsuit initiated by JLT in relation to those employees from JLT who have left to join Hyperion.".

Cyber specialist Bewica has launched a Cyber security portal with tools and training to help SMEs asses the risks they face. The Managing General Agent (MGA) stated that the portal is available as a free risk management tool for its Brokers and added that it can be white labelled with the Broker’s brand.

Arc Legal Assistance has extended its legal defence cover for landlords in response to the Homes (Fitness for Human Habitation) Act. The provider said its legal defence cover would now defend landlords against civil or criminal prosecution, which includes matters brought under this legislation. Legal defence cover makes up part of the Arc Legal’s landlord legal expenses offering.

For the fourth quarter of 2019, Travelers Companies said that its earnings increased – despite a progressively challenging tort environment. The company’s profit for Q4 2019 was US$873 million (US$3.35 per share), an increase from US$621 million (US$2.32 per share) for Q4 2018. Travelers total revenue, including investment income, rose to US$8.06 billion from US$7.8 billion. The Insurer’s net premiums written also increased 5.7% to US$7.08 billion.

Insured losses from major natural catastrophes in 2019 totalled around US$53.0 billion, or 18% lower than the annual average since 2011, according to a report by Willis Re. This continues a relative period of calm compared to 2017, when the total loss reached a peak of US$143 billion, according to the Summary of Natural Catastrophe Events 2019 published by the reinsurance arm of the global insurance brokerage and consultancy. The total losses in 2019 were caused by a series of smaller and medium-sized events, due to the absence of very large natural catastrophe losses.

Aberdeen’s only locally established independent insurance broker, H&R Insurance Services (H&R Insurance) have announced its acquisition of APL Insurance Services, the insurance division of Aberdeen Property Leasing Ltd. The acquisition, which concluded at the end of 2019, will include the transfer of all APL Insurance Services’ clients to H&R Insurance and has been described by Shona Robertson, Partner at H&R Insurance, as a strategic fit for the company. The news rounds off a successful year for H&R Insurance which, despite difficult trading conditions in the North-East, posted 20% growth in 2019.

Cyber analytics company CyberCube is calling for the international insurance industry to take a greater role in shaping the cybersecurity landscape. The company recently published a report, entitled “Scoping a Cyber Catastrophe: Understanding the Societal Impact of the Fourth Industrial Revolution and The Role of Insurance,” exploring society’s increasing exposure to digital risks and what measures the insurance industry can take in order to address the issue. According to the report, $1.25 trillion was spent on digital transformation by organisations around the world in 2019. That figure is projected to rise to $1.97 trillion by 2022.

North P&I Club has announced that it has chosen Concirrus as a digital Partner. Concirrus’s digital platform, Quest Marine P&I, will contribute to North’s loss-prevention and risk-assessment capabilities, the company said.

Co-op Insurance and IBM met again as the Technology and Construction Court (TCC) case CIS General Insurance Limited v IBM United Kingdom Ltd goes into full swing. TCC is part of the High Court of Justice. The £130 million breach of contract lawsuit that was filed by the Insurer in late 2017 started trial this week, with the camp of Co-op Insurance citing the tech giant’s alleged wilful failure to make good on their 2015 IT deal. IBM, on the other hand, pointed a finger at non-payment.

“A significant milestone for the successful delivery of the new service to support the whiplash reforms set by the Ministry of Justice (MoJ),” is how Motor Insurers’ Bureau (MIB) Chief Executive Dominic Clayden described the latest development in the efforts to transform the personal injury claim process. Claimant representative and compensator organisations can now register for Official Injury Claim, the new service aimed at delivering the government policy in relation to road traffic accident-related personal injury claims under £5,000.

The world of insurance is changing as new ways of doing business are making their mark on the industry. One only has to look at Lloyd’s of London’s dramatic overhaul plan – the goal of which is to become “the most advanced marketplace in the world” with the help of tech-enabled initiatives such as an electronic risk exchange – to recognise the shifts that are currently taking place. Accordingly, investment in the insurance technology space is continuing to grow, hovering at US$140 million in 2011 and by 2018, skyrocketing to US$4.9 billion. 

Within the broking sector there has long remained a question over whether or not this sector in particular, and the insurance industry in general, have a problem with talent acquisition – especially when this question extends to young people. For Clare Wakeford, Bravo Group’s Group HR Director, a key challenge within the broking sector is the difficulty in attracting talent to certain office locations outside of key cities, when large cities are in close proximity. Another issue, she said, is that many of the specialised roles required within the broking sector also require niche experience which can be difficult to find.

Aviva has confirmed that Sir Adrian Montague is set to retire as Chairman of the Insurer in 2020 once a successor has been appointed. He has been Chairman of the business since April 2015, having first joined as a Non-Executive Director in January 2013.

Aon has appointed Helene Madell as Chief Broking Officer for commercial risk solutions, health solutions and affinity in the UK.

Vizion has announced the creation of two new divisions, Vizion Health and Vizion Fine Art. The divisions will be led by Matthew Howells and Peter Bownes-Johnson respectively. Howells joins as Founding Partner of Vizion Health and will be responsible for client relationships and developing partnerships with Vizion’s Introducer network. Bownes-Johnson joins as Founding Partner of Vizion Fine Art.

Gallagher has named Peter Matthews as Managing Director of its North division. The position encompasses the Midlands and North of England, as well as Scotland. Matthews will be responsible for 20 offices, 600 employees and around £500m in GWP.

Pool Re, Britain’s leading Terrorism reinsurer, today announced the appointment of Chris Medhurst-Cocksworth as Head of Risk Management within Pool Re Solutions.  Medhurst-Cocksworth will lead the risk management services offered by the recently created division, focusing on developing Terrorism-related risk management tools and expert services.

Insurance veteran Tony Allen has returned to the market with a new Motor Managing General Agent, Insenture Underwriting. The business, which began trading a year ago, is an appointed representative (AR) of Zenith Insurance, part of Markerstudy Group.

Motor claims management specialist MSL has hired Alan Brown as Head of Claims Operations. Brown began his new role at the Cheadle-based company in early January and reports to Managing Director Glen Eastwood.

The London Market Group (LMG) has announced the appointment of Matthew Moore, CEO of Liberty Specialty Markets, as its new Chair with effect from 1 May 2020. He will succeed Andrew Horton, CEO of Beazley, who has held the role for two years.

Ewen Brown has joined Compass London Markets team as Sales Director. He has 27 years of experience in the broking industry.

The Lloyd’s Market Association (LMA) has announced the appointment of Jane Hayes as Underwriting Director, effective 3 February.

Principal Insurance has recruited Ian Phillips to take on the newly created role of Fraud Manager.

Lockton, the world’s largest privately held independent insurance Broker, has appointed Amanda Harton as Chief Executive Officer and Director of its Irish business, Lockton Insurance Brokers (Ireland) Limited (LIBI).

Allianz Global Corporate & Specialty SE (AGCS) has appointed Henning Haagen to the role of Chief Underwriting Officer of specialty and a member of the company’s board of management, subject to regulatory approval.

Lloyd’s of London has a new board member in the person of Angela Crawford-Ingle, who will not only chair the audit committee but also serve as Lloyd’s Whistleblowers’ Champion.

 

 

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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