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General Insurance Newsletter Friday 25th October 2019

25 Oct 2019

Insurance News

CPP Group UK has launched a new Cyber insurance product on the Acturis insurance administration and trading platform. According to CPP, the product is designed to cater for the requirements of smaller SME businesses. The policy is offered by CPP Secure (CPP’s managing general agent business) and is underwritten at Lloyd’s.

There is just over two weeks to go until the second Insurance Day of Giving. More than 50 firms have committed to take part in this industry-wide event in aid of the Insurance United Against Dementia (IUAD) campaign. On Thursday 7 November, firms across the UK will be taking part in fundraising activities to support vital dementia research. Last year’s event raised £70,000 in one day and this year, with increased support, the IUAD campaign is aiming to pass the £100,000 threshold.

Auditor RMS has cast doubt on Markerstudy Insurance Services’ (MISL) ability to continue to trade as a going concern in its results for the year ending 31 December 2018. The auditor disclosed that the group had net assets of £6.6m at the end of the year which included debtor balances of £310.9m and that MISL “will rely on the ongoing support of the parent company to continue to trade and meet its liabilities as they fall due”.

Tedaisy Insurance Group and Intrinsia Insurance Group have merged under the umbrella of Tedaisy Insurance Group (Tedaisy), in a strategic all-share deal which the organisation said will accelerate growth. The terms of the deal were not disclosed.

Packaging Cyber cover with Household insurance is the best route to growing the personal lines market, GlobalData has claimed. The analyst firm published its 2018 UK Insurance Consumer Survey, highlighting the slower progress of Cyber insurance in personal lines in comparison to commercial lines. Daniel Pearce, General Insurance Senior Analyst at GlobalData commented: “An increase in the number of connected devices will create an opportunity for Insurers to incorporate the technology into Home insurance as a way to prevent claims from occurring".

Firms such Direct Line, RSA and Saga are set to be disproportionately affected by the Financial Conduct Authority (FCA) pricing review, analyst firm Peel Hunt has stated. In an industry report, analysts explained that Brokers and Insurers concentrating on Home insurance will be those hardest hit by any moves by the regulator to reduce the ‘dual pricing’ gap between new and existing policies. This is due to the margin of dual pricing being largest in Home insurance policies. The Competition and Markets Authority (CMA)’s investigation into the “most favoured nation” clauses included in Compare the Market’s Home insurance contracts has had its consideration period extended. The original end date for the consideration process was October 2019, this has been pushed back to December 2019.

The International Underwriting Association (IUA) has started a London Market committee, The Construction Working Group, to address issues around the use of cladding and fire protection following the Grenfell fire. It is for Underwriters who offer Professional Indemnity cover to the Construction sector.

Jackson Lee Underwriting has launched a fleet guaranteed asset protection (GAP) policy including a built-in temporary replacement vehicle solution. The firm explained that the product was created in response to Broker demand. It further detailed that the policy protects clients from a financial shortfall following a total loss and provides clients with a temporary replacement car or van up to 3.5t GVW for up to 42 days following a total loss. The temporary replacement vehicle also has comprehensive Motor insurance.

Owner of Go Compare, GoCo Group has completed the refinancing of its bank facilities with a group of existing and new banks. The new facilities will consist of a four year revolving credit facility of £105m and four year term loan of £15m making the total amount of refinancing £120m. Both the credit facility and loan can be extended for a further year. According to the group, the refinancing offers additional flexibility.

Semi-professional footballer Richard (Richie) Allen, aged 37, has scored a spectacular own goal after a court ruled he made a dishonest claim for whiplash following a car accident. Horwich Farrelly, the leading specialist insurance law firm, working on behalf of Tansar, a Managing General Agent who provide a range of specialist UK insurance products underwritten by Gefion Insurance, proved the claim made by the former Salford City FC player was fundamentally dishonest. As a result, Allen was ordered to pay costs of over £6,000.

Upcoming regulatory developments in the US and Canada are set to accelerate the growth of the legal cannabis industry, with sales already projected to grow as much as ten-fold to reach USD 40 billion a year in the US by 2025 and around USD 5 billion in Canada within five years, presenting significant opportunities to Insurers at Lloyd’s. Speaking at Clyde & Co’s annual Financial Institutions, Directors and Officers Conference in London last week, Prachi Shah, a Senior Counsel at the global law firm in Montreal said: “The cannabis market in Canada is set to increase significantly with this second wave of legalisation. Smoking a joint might not appeal to large parts of the population, but they may not be averse to trying cannabis candies, chocolate or beer and other products which incorporate cannabis”.

Swiss Re Corporate Solutions has announced a strategic agreement to develop a dedicated international insurance programme management platform for the global broking business Brokerslink's Broker network. The new business platform, designed by Swiss Re Corporate Solutions for Brokerslink’s growing international portfolio, will enable Broker partners and affiliates to manage and deliver structured and compliant international and cross-border programmes from a single online platform. The move will see Swiss Re Corporate Solutions become one of Brokerslink’s strategic business partners. 

Allianz has become the number one insurance company in the Interbrand Best Global Brands 2019 Rankings, with the Allianz brand value increasing from $10.8bn in 2018 to $12.1bn. Serge Raffard, Group Strategy, Marketing, Distribution Officer, Allianz SE: “We are proud to become the number one insurance brand – a sign of our strategy and transformation in action. The headline of our strategy is Simplicity Wins. Our increased brand value reflects a more relevant, consistent, global brand, transforming to fewer, intuitive products and services and rebalancing the business to high demand and profitability areas”. 

In further news...Allianz wins for the second year in a row at the Insurance Times Tech & Innovation Awards 2019. Having previously won in 2018, Allianz digital trading platform, QuoteSME, won ‘Best Insurer Extranet’ again as voted for by Broker partners. These awards, held 26th September, recognise technology that is carrying the insurance industry forward.

E-cigarettes have been on our watchlist of emerging risks for the past several years. A recent outbreak of severe pulmonary disease in the U.S., coupled with reports of deaths suspected to be linked to vaping, have given the issue an even greater focus from regulators and policymakers. In March this year, the EU Scientific Committee on Health, Environmental & Emerging Risks announced it would assess the risks associated with chemicals in e-cigarettes. The Q1 2019 Emerging Risks Update underscored the importance of this issue. E-cigarettes could pose product liability concerns - because of potential unknown health risks associated with their use as well as possible injuries from battery fires, among other things.

The world’s top 10 reinsurance companies accounted for just over two-thirds of gross written premium in the global non-life reinsurance market in 2018, according to global credit rating agency AM Best. Munich Reinsurance Company narrowly beat Swiss Re Ltd. to the top spot for gross premium written in 2018. AM Best Director, Raymond Thomson, described the close rivalry between the two European firms as “a horse race for the top spot” in which their standing “could flip-flop at any time”. The remaining top 10 reinsurers have remained fairly static in recent years, with similar names making the list year-over-year. Together, the top 10 reinsurers accounted for 67% of gross written premium in the global reinsurance market in 2018. Munich Re and Swiss Re asserted their dominance by covering 30% of the global reinsurance marketplace between them.

The Travelers Companies, Inc. has suffered a decline in profit. Today, the insurance giant reported third-quarter earnings of $396 million, or $1.50 a share, down from $709 million, or $2.62 a share, the prior year quarter. The Insurer has attributed this decline to the “increasingly challenging tort environment” which has driven an increase in claims payments for lawsuits and jury awards. Unfavourable reserves development has also resulted in a 4.9 point increase in Travelers’ combined ratio, which reached 101.5% in the quarter, up from 96.6% in Q3 of 2018.

“The most basic of all human needs is the need to understand and be understood. The best way to understand people is to listen to them”. Whether you’re a Broker, Insurer or Underwriter this famous quotation from Dr Ralph Nichols is sure to be applicable to your business as no insurance firm can hope to thrive without putting their clients’ needs first. Listening, in turn, means refusing to rest on your laurels by constantly evolving and adapting to changing needs. That is exactly what Geoff Stilwell, MD and CEO of Beech Underwriting, is attempting to do with his latest product launch. Despite being one of the most highly regarded providers of Terrorism insurance in the UK, Stilwell has seen a need to make changes to keep up with demand. Stilwell is updating the firm’s Terrorism product for property and businesses – the Beech offering will now include within its standard levels of cover: brand rehabilitation, loss of attraction, pollution clean-up, utilities, denial of access, loss of attraction, verified threat and, now for an additional premium – nuclear, chemical, biological, and also cyber.

Earlier this month the Financial Conduct Authority (FCA) described the competition in the British Home and Motor insurance markets as “not working well for all consumers,” particularly when it comes to pricing. Now Peel Hunt analyst Andreas van Embden has weighed in and points to the insurance companies likely to benefit as well as those forecast to be affected more by a shift in pricing behaviour. In the 38-page note sent to Insurance Business, it was highlighted that providers who utilise price comparison websites (PCWs) are not going to feel as much of an impact compared to those who take either the direct or Broker route. Van Embden also cited the characteristics of those firms who stand to reap gains. 

Specialist Insurer Beazley has announced the launch of a suite of Cyber risk management services for international Cyber policyholders. The resources are designed to help mitigate the risk of a Cyber breach, and include pre-breach and risk management services selected and managed by Beazley’s in-house Beazley Breach Response (BBR) Services team.

NotPetya. It crippled the largest transportation and logistics company in the world. It paralysed corporations. It was deemed ‘hostile’ and ‘warlike’ by global leaders. It was one single piece of code that jolted the world awake to the scary realities of Cyber risk. More than two-years after NotPetya malware began spreading independently around the world, encrypting files beyond repair and causing chaos in its wake, the attack remains the costliest Cyber incident in history. This isn’t because particularly high ransom was demanded to decrypt infected systems. Rather, NotPetya was coded in such a way that, even if users did pay up, their data could never be recovered. 

Insurance fraudster Pascal Blasio – the man responsible for the 2017 gas explosion that injured over 80 people in New Ferry – has been sentenced to 20 years in jail. “I hope that today (October 23) means the people of New Ferry can now start to draw a line under that night and start to rebuild their lives knowing that Blasio will spend a considerable amount of time paying for his greedy and selfish actions in prison,” stated Assistant Chief Constable Natalie Perischine of Merseyside Police.

Norsk Hydro, the aluminium and renewable energy firm that suffered an extensive cyberattack in March, has been compensated. In its third quarter results release, the Oslo-headquartered group outlined not only the operational and financial repercussions of the breach but also how much in compensation it has received so far. Earlier this year Norsk Hydro described its AIG-led Cyber insurance policy as solid.

American International Group (AIG) has announced a proposal to launch a new Lloyd’s syndicate serving the specialist USW High-Net-Worth Market. The syndicate will start writing business January 01 and is projected to write up to US$1 billion in gross written premiums. Syndicate 2019 will be managed by Talbot Underwriting Limited, a managing agency acquired by Lloyd’s last year. The syndicate has undergone the normal scrutiny Lloyd’s applies to potential new entrants to the market, and has benefited from some of the framework improvements being piloted as part of the Future at Lloyd’s Blueprint One, according to AIG. Those improvements include a streamlined initial application-to-approval process of around four months.

Market Movers and Shakers

Michael Sicsic has been hired by Insurtech startup Spixii as an Adviser to its Directors. Sicsic will support the startup with strategic advice and help onboard new clients on its core solutions for sales and claims.

Paul Beck has joined Billericay-based Direct Insurance Corporate Risks (DICR) as Managing Director. He was previously Director at Amicus Insurance Solutions from February 2016 to October 2019.

Angela Page, formerly Halifax Branch Director at Towergate, has been appointed to the Managing Director position at Burnley-based Sagar Insurances. Page will be responsible for running the business while Chief Executive John Meadows will focus exclusively on the retention of large clients, the acquisition pipeline and supporting new business.

Markel International has announced the appointment of Simon Wilson as Managing Executive of global strategy for insurance operations for Markel Corporation. Henrick Bjornstad will assume the role of Managing Director of Markel International’s national markets division. Wilson, currently Managing Director of national markets, will assume his new role January 01. In addition, the company has announced that John Enright, Strategy and Development Executive, will be appointed Head of Strategy for Markel International, assuming responsibility for the company’s London-based strategy team.

The reinsurance pillar of Fidelis Underwriting Limited (FUL) is about to get stronger. Bringing more than 13 years of experience, Matthew Bellamy is coming onboard FUL’s London underwriting team on November 01. “I am excited to join Fidelis and to continue to build on Fidelis’s success by further expanding its Property Treaty reinsurance book in London, complementing Fidelis’s portfolio across the group,” stated Bellamy, who most recently served as Property Treaty Head and Deputy Active Underwriter at Lloyd’s Acapella Syndicate.

 

 

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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