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General Insurance Newsletter - Friday 25th May 2018

25 May 2018

Insurance News

BIBA has confirmed that the 2019 conference will be held in Manchester on 15 and 16 May. It will mark the sixth year in a row that the city has hosted the event and has become its natural and popular home. 

The Chartered Insurance Institute (CII) has launched an apprenticeships programme designed to offer standardised training and also help firms access funding. The professional body detailed that the insurance sector is facing the challenge of attracting and retaining talent in an increasingly competitive environment. It explained that the Aspire Apprenticeship Programmes provide purpose-built and training for businesses to develop and grow highly capable apprentices.

The Financial Services Compensation Scheme Ltd (FSCS), the UK's statutory compensation scheme for customers of authorised financial services firms, wants to hear from those who served as intermediaries for the Copenhagen-based insurance provider whose policies were cancelled immediately after it fell into bankruptcy earlier this month. FSCS pays compensation to eligible claimants when a company is found to be “in default,” meaning it does not have sufficient assets to meet claims.

It has been revealed that Allianz is poised to pick up £250m of commercial gross written premium business as policies migrate from LV. As part of the preparation, Allianz has set up 168 new agencies with Brokers. According to General Manager, Simon McGinn, the company is confident of retaining at least 80% of LV’s commercial business but accepts there will be some natural churn which he highlighted would happen on any book. Further preparation has included widening Allianz’s underwriting appetite. McGinn listed that the provider had looked across the property and casualty book and highlighted product examples including taxi, truck, packages and schemes as being part of the mix. He noted that there was only a “very small proportion” of LV’s commercial book for which it now did not have an appetite.

Mercia Underwriting has teamed up with Arag and integrated the provider’s Commercial and Landlord Legal Expenses products into its Commercial and Property Owners binders. The newly formed managing general agent (MGA) headquartered in Birmingham detailed that commercial cover is based on Arag’s Essential Business Legal policy, while the property owners product allows brokers to offer cover to landlords with mixed portfolios of commercial, residential and holiday property, under a single facility.

Pukka Insure is set to move into the Home Insurance market towards the end of the year. Sam White, Founder of the motor specialist Managing General Agent (MGA), said that she was looking to diversify the business and expand into more business lines. In addition, she stated that the Van MGA would be launching its previously announced Private Car product in the next few months.

A Managing General Underwriter, Cedar Underwriting, has opened its doors to the insurance market. The West Midlands-based provider stated that it would specialise in general commercial insurance with a focus on SME business with specialist capacity providers in both Liability and Material Damage. Cedar detailed that it would look to work with Brokers looking for capacity for their delegated authority schemes.

InsurTech start-up Broker Insights has teamed up with Hiscox in an initial 12-month deal. Broker Insights launched in January this year and its data platform will go live at the start of June. The platform combines technology and regional Broker customer data to give insurers insight into the UK commercial Broker market. Hiscox is the first insurer to sign up to its panel, but Broker Insights CEO Fraser Edmond said the company was in advanced discussions with four other insurers and he expected to conclude further deals in the coming weeks.

Telematics provider Smartdriverclub Insurance has stated it is using data analytics to identify trends in proposer details that are common to ghost brokered policies in order to filter out suspect insurance applications. The business said this was in response to a 14% rise in ghost brokered policies over the past year. It detailed that where the firm identifies a possible attempt by a ghost Broker to secure cover, the ‘customer’ is driven to the phone line to complete the quote and payment transaction, where security checks will reveal the identity of the policyholder is fake.

Vantage Holdings has bought personal lines Broker Fresh Insurance for an undisclosed sum. Fresh CEO Lisa Powis, who founded the business, has now left the organisation. This is the second acquisition made by Vantage Holdings since it was bought in December 2016 by US broker NSM Insurance Group. Vantage bought broker Maybury James in October 2017. According to a statement from Vantage the deal forms an integral part of NSM’s strategy to expand in the UK insurance market. At the time of the NSM deal Vantage stated that it had a “war chest” to spend on UK deals. 

There will now be three insurance companies within the Hansard Group.  In addition to the existing Hansard International Limited and Hansard Europe dac – based in the Isle of Man and Ireland, respectively – a new insurer has been established in The Bahamas. With an external insurance licence from the Insurance Commission of The Bahamas, Hansard Worldwide Limited (HWL) is expected to commence trading in the latter part of the year to provide portable investment-linked insurance products.

In less than 12 months the Castel Underwriting Agencies Limited division has launched the likes of Castel Construction and Castel Transact – now Castel Political Risk joins the mix to underwrite contract frustration and political risk coverages under the leadership of underwriter Tom White.

The case of former England cricketer James Taylor, who was forced to retire in 2016 while in his 20s, is paving the way for outdated insurance policies to get a rethink. “When it came to the crunch, the combined value of the PCA (Professional Cricketers’ Association) and the ECB’s (England & Wales Cricket Board) insurance policies bore no relation to the modern game: it added up to little or no more than my previous year’s earnings,” said Taylor in his book Cut Short. According to reports, an ECB spokesperson as confirming that the board is looking at updating the policies, with the issue among the topics being discussed in ongoing talks with the PCA over contracts.

Ark Insurance Group’s Tradesman product, which covers 95% of trades, will now be made available to Brokers of SSP. The former, in turn, will have access to high-quality brokers as part of the partnership.  Enhancing its Tradesman panel, SSP has teamed up with Ark to allow its Brokers to write a broader range of Building and Allied Trade risks – including the likes of roofing and those in hazardous locations, as well as for individuals with adverse financial histories. The collaboration also involves other products such as Commercial Vehicle and Landlords.

Zurich Insurance Group’s public share buyback programme, which was launched last month, has now been completed. The buyback programme saw a total of 1.74 million shares repurchased for over CHF548 million, with the average purchase price at around CHF315. In its announcement this week, the insurance giant said: “The board of directors intends to propose to the Annual General Meeting 2019 that Zurich’s ordinary share capital be reduced via the cancellation of the shares repurchased under the share buyback programme.” Meanwhile the completion, which took place on May 18, means Zurich has concluded the anti-dilution measures it announced earlier this year.

Too many boards still fail to understand the true nature of risk and its potential to make businesses more profitable as well as robust, according to Airmic CEO John Ludlow.  In a recent report, he says that the subject remains a turn-off for board members and questions the way some risk managers sell their role. However, he praises the efforts of many risk managers - especially younger ones - who are adding wider business skills to their already formidable technical knowledge to enable them to fill the most senior strategic risk positions. The same report highlighted Airmic's efforts to promote a debate on the role of the Chief Risk Officer (CRO), which will be the subject of a paper to be released at June's annual conference. Deputy CEO and technical director Julia Graham echoed the messages from John Ludlow and told the publication that risk management was not just about risk prevention but "releasing opportunity and giving organisations the confidence to take more risk."

Law firm Clyde & Co has obtained what is believed to be the single highest award of exemplary damages made in a motor fraud case in the UK. Acting on behalf of motor insurer Admiral, Clyde & Co’s team obtained £70,000 damages against a Barnet-based accident management company MS Globenet trading as ACE and its director Mohammed Samavat.The previously reported highest award for exemplary damages of this type was £50,000 which was obtained in 2016, also by Clyde & Co. MS Globenet was involved in 20 cases related to a major fraud ring, operating primarily in North London during 2012–2014, comprising 367 third parties and 136 policies. After the vast majority of these fraudulent claims – worth up to £2.5m – were defeated, the decision was taken by Admiral and Clyde & Co to bring a claim for tort of deceit against the accident management company.

Marsh has released its Global Insurance Market Index for the first quarter of 2018. Following four-and-a-half years of price decreases, global commercial insurance prices rose, on average, for the second consecutive quarter. This was largely driven by property insurance pricing, which continued to be affected by 2017 catastrophe losses and increases in Financial and Professional lines. Overall, the market remained stable with first quarter prices increasing on average by nearly 1%. Globally, property insurance pricing increased nearly 3% on average. Financial and Professional lines pricing increased approximately 2% on average in the quarter, driven by increases in the UK, Latin America and Australia. Casualty pricing declined by nearly 2% on average. Most regions showed either a moderate increase in pricing in the first quarter, or a lessening of the pace of decrease. The one exception was Asia, which had a greater decrease compared to the previous quarter.

Aviva remains the dominant insurer for Brokers’ perceptions of “best in class,” especially in the digital categories, according to GlobalData, a leading data and analytics company. Brokers, from a range of business sizes within the commercial insurance space, provided Aviva with excellent reviews – naming the insurer as the best, from business experience, across nine out of ten categories in GlobalData’s 2018 Commerical Broker Survey. The survey included questions asking brokers to assess insurers on service, digital capability, and product range.

Vehicle technology has come a long way in the last decade, with devices such as autonomous emergency braking (AEB), dash cams and pedestrian airbags helping transform the UK’s roads. An Allianz white paper explores these new technologies and their potential impact on the insurance industry. This white paper details: Safety improvements Vehicle security; Claims benefits; Tomorrow's vehicles and tomorrow's risk.

Ardonagh Group has reported a £14.1m loss for the first quarter of 2018 according to its report to investors. However this was still an improvement on the £21.3m losses in Q1 2017. Ebitda grew to £23.1m in the three months from £787,000 in the same period last year. Total reported income went up to £127.8m (Q1:2017: £77.9m) with Ardonagh stating that this was driven by acquisitions over the past three quarters and continued progress within its Towergate transformation plan. The business continued to spend on the transformation plan which it said was 85% complete and expected to finish ahead of plan. Some £2.2m was spent on ongoing finance transformation, £700,000 on redundancy costs and £500,00 on integration. Additionally £600,000 was paid for the roll out of the Acturis system across the business. The numbers follow on from Ardonagh’s first set of full year results which showed increasing income but losses of £261m.

The Chartered Insurance Institute’s (CII) underwriting faculty has analysed the projections it made about 2022 in an update of its Underwriter of the Future report. The first edition was published in 2012. The latest report, published in association with management consultants Oliver Wyman, looked at a range of factors including changing distribution in SME insurance, changing customer demands and pressure on supply. According to the organisation, at the larger end of SME, person-to-person relationships still predominate, but the economics of the traditional branch-based model continue to deteriorate. It also found that customers are demanding more price transparency, faster turnaround times and lower cost – forcing insurers to significantly re-engineer their service proposition and operating model; and that ongoing abundance of capital continues to put the traditional industry under major cost and competitive pressure.

Ataraxia Broking has invested an undisclosed sum into Lancashire-based Whitefield Insurance Services to facilitate a management restructure. According to Ataraxia, the business was jointly owned by Steven Foster and Stephen Hopwood, and they were looking for options to allow Foster’s exit from the business, both as a Director and Shareholder. According to the investor a full sale to a buyer was not the solution Foster or Hopwood were looking for.

Lloyd’s has received licence approval from the National Bank of Belgium for its new Brussels subsidiary, Lloyd’s Insurance Company, and has named Vincent Vandendael as its new CEO. The licence means Lloyd’s Brussels will be able to write non-life risks from the European Economic Area (EEA) after the UK leaves the European Union in 2019, ensuring that Lloyd’s customers can continue to access the market’s specialist underwriting.



Market Movers and Shakers

Insurtech start-up Equipsme has made its first new hire since the business went live in March, appointing Jemma Boyce as Broker Development Manager to service the MGA's growing panel of distributors.

Former RSA Group Chief Information Officer, Darren Price, has joined Genasys Technologies as a Strategic Advisor to its newly launched UK operation.

AEGIS London has appointed Jonathan Humm as its new Class Underwriter for Marine Hull. He joins from Hiscox where he was Deputy Hull Underwriter.

Neon is delighted to announce that Theo Butt will be joining on 14th September this year in the newly created role of Group Underwriting Director for Neon Holdings Limited. 

Beazley, the specialist insurer, has appointed Sam Franks as UK Regional Business Development Manager.

Laurence Townley, Director of Financial Risk and Joint-Chief Actuary at Direct Line Group, has been appointed as the new Chair of the ABI’s Prudential Regulation Committee, taking over from outgoing Chair David Innes, Group Capital and Financial Risk Director at RSA.

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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