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General Insurance Newsletter Friday 24th May 2019

24 May 2019

Insurance News

Insurance has for a long time being characterised a ‘pale, male and stale’, but times they-are-a-changing. With Insurers, Brokers and all parts of the insurance supply chain making strides to consign this stereotype to history; and change the perception of a sector which remains so important to the economic outlook of the country. With this in mind, Infopro Digital, the publishers of Insurance Post and Insurance Age have announced that they will hold the first Diversity and Inclusion in Insurance Awards in London in November. Launched at the British Insurance Brokers’ Association conference, the event will celebrate individuals who work in the insurance sector who have done the most to champion D&I awareness and issues within their organisation and wider afield in areas such as LGBT rights; mental health; disability rights; gender and race equality.

Following Mental Health Awareness Week last week and the Heads Together campaign, SJL Insurance have announced that they have recruited a mental health nurse who will visit the firm’s headquarters twice a month. The Broker detailed that the nurse will start their visits to the office in Worcester next month. It continued that the booking process is completely confidential and endeavors to encourage staff to visit the nurse. Alongside this move, SJL have said that the Department Leader, Jen Halli-Annison and her colleague, Kate Hanson will be taking a mental health first aid course which should help them to spot the signs of mental illnesses.

Unrated Insurer, Lamp applied for liquidation at the Supreme Court of Gibraltar. In a statement the Gibraltarian firm said that it made efforts to secure more investment, but its liquidation application will be heard in Court on Friday 31 May. The statement read: “Having recently ceased to enter into new contracts of insurance or renew existing contracts the directors of Lamp Insurance Company and its parent company have been exploring all options available to them to obtain additional finance to enable the Company to meet its obligations under existing contracts and recommence issuing new contracts. “Regrettably, negotiations have failed to secure appropriate funding and the directors of the Company concluded that they had no option other than to submit an Application to the Supreme Court of Gibraltar for the Company to be placed into liquidation."

Aston Lark confirmed that they had received investment of about £320m from Goldman Sachs, replacing former majority shareholder Bowmark Capital that funded the Broker’s management buy-in in 2015. Aston Lark CEO Peter Blanc said: “It’s a huge endorsement of what we’ve created so far, to get an international firm like Goldman Sachs’ interested in investment. Going forward it will enable us to expand our horizons even further”. Blanc hopes that subject to regulatory approval the deal “should be done within a couple of months” and clarified that the deal came about due to his relationship with Goldman Sachs through his board position at Hastings. 

Brokerbility’s first Insurer partner satisfaction survey of 2019 has seen Aviva again come out top. According to the firm the research canvases its members on Insurer practice when handling claims, underwriting, accounts and overall satisfaction. Brokerbility detailed that its seven key Insurer partners, Axa, Allianz, Aviva, AIG, NIG, RSA and Zurich were all examined as part of the survey. Each member had to offer feedback on a range of service criteria using a 1 to 10 rating. To ensure that customer satisfaction was also looked at, Brokerbility used a Net Promoter Score alongside every question.

Ardonagh Group investors MDP and HPS have bought more shares in the business in a move which gives the organisation an enterprise value of £1.9bn ($2.4bn). According to an Ardonagh statement the Ardonagh Group Investment funds managed by MDP and HPS have agreed to acquire shares in the Group for a total consideration of £92m ($117m). The transaction sees £82m ($104m) from MDP and £10m ($13m) from HPS) from certain existing institutional investors and other minority shareholders. Last month Ardonagh published its 2018 results which outlined shrinking losses with Ebitda measures moving into profit. In 2018 the company Ardonagh Group bought Swinton for £165m and also sold its claims and commercial MGA businesses.

The Financial Services Compensation Scheme (FSCS) has revealed that three insurance-related firms have been declared in default between 1 February and 30 April 2019. The three companies are: Hampshire-based Choices Insurance Limited, British Insurance Limited in Essex and Lancashire-headquartered Greg Smith Financial & Insurance Services. Payment protection specialist British Insurance was sold to Towergate in 2008. However, according to the Financial Conduct Authority register British Insurance stopped trading back in 2011. In addition, documents filed on Companies House show that liquidators were appointed in 2015 and the company was finally dissolved in 2016. This was confirmed by a spokesperson for the Ardonagh Group (previously Towergate). When asked why the firm showed up on the list now, a spokesperson for the FSCS said: “FSCS was not able to declare British Insurance Limited in default until an eligible claim was received.” 

In further news...Ardonagh Group is set to close 24 Swinton branches according to its results for Q1 2019. An investor presentation revealed that £6m has been spent on Swinton to close 24 of the remaining branches and accelerate integration - the changes left Swinton with just 20 branches open as of the end of March this year. The document also showed that 30% of a planned £35m FY19 transformation investment had been completed and £5.0m cost savings delivered.

AXIS Capital Holdings Limited (AXIS Capital) has announced that it has launched a refreshed brand, logo and website. The new visual identity is dynamic and forward-looking and reflects the steps AXIS is taking to be a future-ready company. AXIS announced the refreshed brand, logo and website in conjunction with the launch of a new brand awareness advertising campaign. “Our new visual identity builds on our storied history and strengths, but breaks out to reflect AXIS’ bold actions and future,” said Albert Benchimol, AXIS’ Chief Executive Officer and President. “It represents the transformation underway at AXIS and the specific actions we’re taking to unlock our potential.”

New research reveals that in the past 12 months, there has been a spike in consumers and businesses cancelling insurance because they can no longer afford it, resulting in greater numbers of underinsured and a sharp rise in insurance ‘blackspots’. Over the next 12 months, the findings reveal millions more are considering cancelling insurance because of cost and the two main reasons for this are rising premiums and a fall in income. The research commissioned by Premium Credit, the UK’s leading premium finance company, reveals 38% of people have cancelled one or more insurance policies over the past three years because they could no longer afford them and in 56% of these cases, cancellations occurred in the past 12 months.  For SMEs, the corresponding figures are 33% and 50% respectively.

Drones are playing an increasingly important role within insurance and are becoming particularly prevalent in the investigation and resolution of claims. From navigating dangerous accident scenes to more quickly establishing the cause of damage, drones can be integral in reducing the time it takes to reach a resolution for the customer.

SSP
is to partner with Refpoint Insurance Consultants LLC (RPIC) to unlock a further market in the ever-growing Middle East insurance industry for SSP. The objective of the partnership is for RPIC to represent SSP in the MENA region, where we will help Insurers and Corporate Brokers transition to our digital insurance platform. RPIC, led by Ken Maw, has extensive knowledge and experience of the Middle East insurance market and will provide sales and partnership capability for SSP in the area. SSP has worked with Ken and his team for over 20 years, when he owned and ran the Insure Direct group of companies - comprised of leading Brokerages in the UAE - before the business was sold to the JLT group. RPIC has evolved from a team of insurance experts representing over 100 years of consolidated experience in insurance broking and consulting.

AXA UK and Burges Salmon have published their Insurance and Legal 2019 report, stressing the importance of government and industry stakeholders implementing a ‘data-map’ for driverless vehicles. As part of the FLOURISH consortium, whose members include AXA UK, Atkins – a member of the SNC-Lavalin group, University of Bristol and Age UK to name a few, the Insurer and law firm have published 10 data principles – the first of their kind in the Connected and Autonomous Vehicle (CAV) industry. These data principles issue guidelines for the protection of data in the CAV ecosystem and elaborate on current GDPR legislation. The aim is to support and guide government and industry stakeholders as they develop CAV products and services.

It’s hard to believe we’re already at the first anniversary of the European Union’s General Data Protection Regulation (GDPR) – Marsh has published a report examining the key developments over the past year. “Proponents of the new law promised a profound change in data privacy protection,” stated the Brokerage giant in the publication. “The sweeping regulation has not disappointed.” One of the main takeaways is the fact that companies are being held accountable and numbers back this up, with Marsh citing recent figures from the European Data Protection Board.

In other news...the global Property Terrorism insurance market remains strong, according to a new report from Marsh. The Terrorism insurance market has sufficient capacity to respond to today’s predominant Terrorism threats, according to Marsh’s 2019 Terrorism Risk Insurance Report. The report also includes insurance market insights from Marsh’s World Risk Review platform, which provides risk ratings for nine different perils across 197 countries. The predominant Terrorism threat globally remains extremists focused on inflicting mass casualties in public spaces, rather than large-scale Property damage, according to Marsh. The global Property Terrorism insurance market has responded to this threat by expanding coverage over the last few years – most notably the development of coverage for active-assailant events and non-damage Business Interruption, Marsh reported.

“Our customers now need reinsurance products that reflect and react to the changing landscape of risk.” Those were the words of Willis Re Specialty Chief Executive Graeme Moore when InsurTech Concirrus announced that it has entered into a strategic agreement with Willis Re. Aimed at ‘transforming’ specialty reinsurance products, the partnership will tap the vast data available from the Internet of Things. Concirrus is the name behind Quest, an insurance software platform that allows existing and new data to be presented in a way that provides valuable insights to help improve loss ratios.

American International Group (AIG) has revealed that company shareholders narrowly approved a US$21 million (around £16.5 million) pay package for CEO Brian Duperreault during a recent company annual meeting. A securities filing by the company revealed that 55% of shareholders voted to endorse the executive’s compensation. Notably, the share of the vote was lower than at last year’s meeting, which saw 62% of votes cast in favour of the compensation. Reuters reported that since Duperreault took the reins of the company in May 2017, AIG’s stock has declined 14.75%. In terms of AIG Directors, it was AIG compensation committee Chair W. Don Cornwell who ironically received the lowest level of support – but he still received backing from 91% of votes.

Fairfax Financial Holdings Limited (Fairfax), the global insurance holding firm behind specialty (re)Insurer Brit Limited, has announced the sudden death of its Vice President and Chief Financial Officer, David Bonham. The announcement was made by Fairfax Chairman and CEO, Prem Watsa. He said Bonham passed away suddenly over the weekend and at present, the cause of death is unknown.

For Insurers, Brokers and their clients, unavoidable events that lead to claims are massively frustrating – both for the disruption they cause and their financial impact. One of the most significant of these events is natural disasters, which statistics show have been increasing in frequency over recent years. A risk insights report released last week by Zurich, at the United Nations Global Platform for Disaster Risk Reduction, outlined some of the research the company has been undertaking on how businesses can become more resilient to these events. Michael Szoenyi, head of the Zurich Flood Resilience Program, said that the report had a number of interesting findings, including that risk is more universal than previously believed.

Lloyd’s is currently consulting on the ‘future at Lloyd’s’ which is aiming to make the operation of the Lloyd’s market much more efficient and both the Council and the [Franchise] Board felt that now was also a good time to simplify the governance of the market.” Those were the words in the 10-page market bulletin outlining Lloyd’s of London’s proposal to merge the Franchise Board into the Council. The goal? Create a single governing body for the Lloyd’s market and the corporation. “The board has operated well in conjunction with the council over the last 15 years,” noted Lloyd’s. “However, the operation of both bodies does lead to duplication and, on occasion, to questions around which body should undertake specific activities."

Home insurance disruptor Buzzvault is now available beyond the app. The Insurtech’s offering, which features digitised contents data for tailored coverage, can now also be accessed via the web. The expansion comes following the app’s rollout late last year. Prospective policyholders can now go to Buzzvault’s website where they will be asked “a few straightforward questions” on their home and belongings to get a quote. The Insurtech business promises the process will not take more than a minute.

BGL Group, the name behind comparison giant comparethemarket.com, has now entered the world of short-term Motor insurance. Called “Jaunt,” BGL’s new brand will provide car, van and Motor home insurance from a minimum of one hour to as much as 30 days – catering to motorists looking to secure short-term coverage for a borrowed vehicle without impacting the annual Motor policy nor the no-claims discount in the event of a claim.

The panel of Insurers covering British Steel, which went into insolvency following a request for a £30m bailout, has been uncovered. AIG, Aviva, Aspen, MS Amlin, RSA and Scor are on the panel with Liberty, Axa XL and Lloyd’s syndicates as the collapsed firm chases down a rejected £30m claim. Mactavish which is pursuing the claim on behalf of British Steel listed the Insurers on the panel. Zurich has been named as the lead Insurer with Liberty leading a deductible buydown along with various Lloyd’s syndicates. Mactavish CEO, Bruce Hepburn, described that rejected claim as an “ultimate failure for commercial insurance”.

In a talk hosted by the insurance advisory division of DAC Beachcroft, as part of an Managing General Agents’ Association (MGAA) event, a variety of issues were discussed, including Broker fees. An issue being that some Brokers charge customers both admin fees and commissions. This was part of a wider debate about one of the key findings the Financial Conduct Authority (FCA) has made regarding pricing. Matthew Rutter suggested that there is a “danger if only commission levels are looked at” as “Brokers may try and make up the money elsewhere”.

Market Movers and Shakers

QBE, the business insurance specialist has appointed Rob Byerly as Director of Financial Lines, UK. Rob joins from QBE North America where he was Vice President of Directors and Officers Liability for the past five years. In his new role, he will be responsible for all UK Financial Lines portfolios, overseeing teams for Professional Indemnity, Cyber and legal expenses business. He will be based in London and report to Cécile Fresneau, Executive Director of QBE UK.

Paula Homan has been appointed Director of Engineering Services at HSB Insurance. Paula will focus leading the activities of HSB’s Engineering Inspection Services division in the UK and Ireland in line with the strategic direction of HSB. This will include the development and delivery of business strategy and growth, operational leadership of HSB’s engineering field force and effective delivery of all engineering inspection customer services. Paula brings over 25 years of experience in leadership, operational performance and customer service roles to HSB. Paula joined HSB recently from Homeserve PLC where she was Director of Claims, responsible for leading the claims centre having already been Head of Transformation.  Her previous experience also includes 12 years of operational management in the legal sector.

Ed Pickard has joined Miller as part of a concerted effort by its leading Professions team to redefine the insurance market’s approach to large law firms. He will head up the UK Professions retail team, with a focus on expanding Miller’s Professions offering to the top 250 law firms and other larger professional practices. Ed’s role will include further enhancing Miller’s proactive and proven approach with UK professionals, using his considerable industry experience to develop the offering for our clients’ benefit.

Liberty Specialty Markets (LSM), part of Liberty Mutual Insurance, has announced the appointment of Paul Kunzer as head of trade credit multi-buyer and excess of loss (XOL). In his new role, Kunzer will lead the development of LSM’s new trade credit offering for multi-buyer and XOL programs. Kunzer will report to Alex Montoya, president of LSM, Latam, Bermuda and US and Alex Egness, head of financial risk solutions in North America. Kunzer will be based in the company’s Chicago office. Prior to joining LSM, Kunzer served in a number of managerial roles at AIG before taking on the role of Global Head of Multinational and Strategic Accounts for AIG Trade Credit. He began his trade credit career as a Buyer-Underwriter at the Export-Import Bank of the United States in 1999.

Kate Walker has taken on a newly created post at Allianz Partners UK. Previously in charge of strategic marketing and innovation, Walker is now the head of direct business. According to the Allianz unit, the appointment will see it renew its focus on offering insurance and assistance solutions to consumers under the Allianz Assistance brand.

In further news...it was in April that Allianz alumnus Burkhard Keese succeeded John Parry as Chief Financial Officer at Lloyd’s of London. Now it’s been revealed where Parry is taking his “impeccable” financial services and regulatory credentials. Bermuda-based Armour Group Ltd has recruited the former Lloyd’s Executive to serve as group CFO. He is taking on the post next month. “I am pleased to join Armour and excited about the significant opportunities for growth and development of the company,” commented Parry, who was finance director at various managing agents before coming onboard Lloyd’s in 2001."

HDI Global Specialty SE, the specialty lines Insurer, has recruited Martin Jackson as Head of Aviation and Space. Jackson joins the London office on 20 May from Neon, where he was class Underwriter, Marine and Transport. HDI Global Specialty SE launched at the beginning of the year writing global specialty lines, stating it would grow through new teams, portfolios and M&A. It has already announced a number of new appointments as well as acquiring a Bloodstock team. Jackson brings 30 years of Aviation underwriting experience to HDI Global Specialty SE’s London Aviation team. At Neon he oversaw the Marine division’s expansion into Aviation. Prior to Neon he was global head of Aviation at Aspen where he managed the global expansion of their London based Aviation team. He replaces Tim Slade.

LexisNexis® Risk Solutions, a leading global provider of telematics and connected car solutions, has appointed Steve Kerrigan as Senior Vertical Market Manager within the UK Connected Car group. A highly-respected and well-known figure in the insurance sector, Steve Kerrigan brings 12 years of valuable management experience to the growing team at LexisNexis Risk Solutions.

 

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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