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General Insurance Newsletter Friday 25th September 2020

25 Sep 2020

Axa XL is accelerating the scaling of its new Digital Risk Engineer proposition – a connected solution designed to enable companies to monitor the “health” of their buildings and assets – having recently completed the successful pilot phase. Available globally, Digital Risk Engineer uses Internet of Things (IoT) devices installed in the clients’ buildings to capture information from connected systems such as energy, water (including sprinklers), heating, ventilation and air conditioning (HVAC).

Insurtech FloodFlash has launched a new iteration of its parametric commercial flood insurance designed to support risks and portfolios where the flood premium is between £20,000 and £1m annually.

Brokers have welcomed the Financial Conduct Authority’s (FCA) proposals to ban dual pricing practices in the home and Motor insurance sectors. The regulator published its final report of its market study into pricing in the general insurance sector, which was launched in 2018 in response to a super-complaint to the Competition and Markets Authority issued by charity Citizens Advice.

Brokers need to pay close attention to the rules proposed by the Financial Conduct Authority (FCA) to tackle dual pricing, according to Sheldon Mills, interim Executive Director of strategy and competition at the watchdog. In a virtual press conference, Mills said: “All parts of this industry will have to take cognisance of this report because the impact of the ban on price walking will filter through all aspects of the industry in terms of how prices are set and renewed.".

The British Insurance Brokers’ Association (Biba) has launched a new member drone scheme with specialist Broker Flock. The Broker trade body said the scheme offers easy to access and flexible cover for commercial drones such as unmanned aerial vehicles (UAV) and electric vertical take-off and landing (eVTOL) aircraft.

Travel insurance provider, Tifgroup, has reached an undisclosed out-of-court settlement with The Times newspaper over a series of three articles it published in November 2018. The newspaper published an apology and agreed to pay damages and costs to Tifgroup as part of an out of court settlement of the case.

A fifth of countries worldwide are at risk from ecosystem collapse due to a decline in biodiversity, according to a new Swiss Re report. Countries around the world are reliant on services that are based on their natural ecosystems, according to the reinsurer. Biodiversity and ecosystem services (BES) include necessities like food provision, water security and air quality that are vital to the stability of communities and economies. According to the firm, 55% of global GDP – equal to US$41.7 trillion – is dependent on high-functioning BES.

In further news...in June 2020, Swiss Re announced that its life capital business unit would be disbanded when ReAssure is sold to Phoenix Group – the reinsurer has revealed further changes to the legal entity structure of the group. According to a press release, the next Swiss Re division that’s on the restructuring warpath is the corporate solutions business unit.

The world’s largest group of shipping Insurers will not cover vessels involved in the Nord Stream 2 and TurkStream gas pipeline projects due to the threat of US sanctions. Associations belonging to the International Group of P&I Clubs said that they would not cover “any activity involved or related to” the Russian-led pipeline projects.

Marsh & McLennan Companies (MMC) has declared a quarterly dividend for the group’s stockholders of record on October 09. Payable on November 13, the cash dividend stands at US$0.465 per share on outstanding common stock. In the same period in 2019, the quarterly dividend was US$0.455.

Events like the wonderful Dive In Festival, taking place right now, are all well and good – but, ultimately, is the insurance industry actually putting its well-meaning words into action? The Chartered Insurance Institute (CII) has attempted to shine a spotlight on the profession’s progress in terms of attracting and retaining diverse talent by surveying 46 HR practitioners across July and August. Encouragingly, it discovered that 79% monitor gender in terms of talent attraction, but only 19% set targets based on gender. Those that set targets claimed to be meeting their goals.

The Solicitor’s PI market in the UK has taken some heavy hits in recent years with several Insurers and Underwriters withdrawing from the sector. However, now one MGA is hoping to bring some much-needed capacity to the area. MGA Inperio has secured a three-year agreement with programme Underwriter Accredited Insurance (Europe) Ltd (AIEL) to grow their Solicitor Professional Indemnity portfolio and to also launch a new product aimed at Independent Financial Advisers (IFAs).

In getting ready for Brexit, Belgium has emerged as the preferred location for an EU entity so that London Brokers are able to continue to support their European clients in 2021 and beyond. In a survey undertaken by LIIBA, nearly a quarter of broking houses have chosen Belgium. Ireland and France were the next most popular locations accounting for 16% each.

Insurance Brokers could soon be heading for the skies thanks to the launch of a new online portal revolving around drone insurance. Coverdrone has introduced the portal that enables agents across the UK and European Union to quote and bind its policies, including those for commercial and recreational drone insurance either on an annual or short-term basis.

Major UK Insurer, LV= General Insurance has formed a partnership to boost electric vehicle customers. The company will be rolling out what it describes as a ‘market leading’ service in partnership with AFF, the national roadside electric vehicle charging assistance company. It will see AFF provide 10 recharge vans on roads across England and Wales – including in emergency refuge areas and on the hard shoulders of motorways.

Arc Legal Assistance hopes Irish eyes will be smiling after securing a new multi-product deal in Eire. The company has reached an agreement with Prestige Underwriting to provide family, Motor and Landlord legal expenses insurance, as well as Motor accident cover, to policyholders of the Irish MGA.

 

Beazley is estimating a Covid-19 impact on claims of $340m (£265.6m) following further analysis of the impact of the virus. In April, as it reported a pre-tax loss, it estimated a hit of $170m across its first party business (contingency, Accident and Health, Marine, Property and reinsurance).

Although Insurers have been slowly distancing themselves from hedge fund investments in recent years, experts have projected that the COVID-19 pandemic will accelerate this withdrawal. The Insurers that continue to invest in hedge funds have banked on the hope that the funds would lead to returns – a much-needed financial shot in the arm for insurance companies currently facing numerous claims and/or lawsuits related to COVID-19 business losses. But conditions are looking grim for hedge funds; according to data from Hedge Fund Research (HFR), the industry lost an average of 3.5% in annual returns in the first six months of 2020. 

UK-based employees of London-headquartered insurance group Aviva have been asked to take heed, following the recent government statement on the pandemic. The company representative reportedly stated: “In line with government advice, we have advised our people to work from home if possible. Most colleagues at Aviva are able to carry on working remotely, but for those who are not, our offices remain open and COVID-secure.”.

The vast majority of risk professionals believe the overall level of cyberattacks will spike as a result of COVID-19, according to a new study by Willis Re, the reinsurance division of Willis Towers Watson. Willis Re’s 2020 Cyber Risk Outlook survey found that 86% of respondents believed the frequency of cyberattacks will increase, while 54% believe that the severity will increase. The respondents, a selection of the risk management, claims, underwriting, legal, broking and analytics sectors in 56 countries, believe that the cause of losses will be divided almost evenly between data breach, ransomware and Business Interruption, Willis Re said.

Over one third (38.4%) of small and medium-sized enterprises (SMEs) in the UK are interested in purchasing insurance that protects them from the losses incurred from pandemics. There is clearly a potential market for such policies but further research indicates that the premiums SMEs are willing to pay vary considerably, says GlobalData.

More organisations are turning to the use of captives for insurance protection and financial flexibility in response to an increasing difficult risk and insurance landscape, according to Marsh. In its 2020 Captive Landscape Report, Marsh reports that tightening global insurance market conditions throughout 2019 led to higher captive utilisation with steep premium volume growth in several coverage lines. For example, supply chain, Business Interruption and contingent Business Interruption premiums written by Marsh-managed captives rose 283% on average in 2019.

Hospitality Broker NDML and the Night Time Industries Association (NTIA) have called on Hiscox to pay out Business Interruption claims “without further delay”. In an open letter addressed to Hiscox Managing Director Ross Dingwall, the Broker and the trade body urged Hiscox to begin to make interim payments for 50% of each claim, with a further 25% to be paid on 1 December “for those (hopefully few) claims which have not yet settled by that date”.

Lloyd’s of London Chief Executive John Neal said that he expects a recent UK judgement, which ordered some insurers to compensate businesses for losses due to the COVID-19 pandemic, to be appealed. The High Court recently ruled that some of the world’s biggest Insurers should not have rejected tens of thousands of claims from small businesses that suffered after the government-imposed restrictions to slow the spread of the virus.

 

Centerbridge and Platinum Equity have pulled out of discussions "by mutual agreement" as AA continues to explore options including an equity raise. TowerBrook Capital Partners and Warburg Pincus International have formed a consortium in order to make a potential offer for AA.

The sale of A-Plan to Howden is believed to be valued at up to £700m. The acquisition of A-Plan by Howden will create one of the largest UK Brokers with a GWP of up to £4bn. David Howden described the deal as “sustainable” and “long-term” and suggested that it would ensure another Broker would “not become a casualty of private equity”.

RIMS and India-based J.B. Boda Insurance and Reinsurance Brokers have initiated a partnership that seeks to develop and deliver risk management content, market research and education for international risk professionals.

 

Aston Lark has appointed Warren Dickson as UK Retail Managing Director, subject to regulatory approval.

Convex, the insurance company set up by Stephen Catlin, has appointed Theo Butt as CEO of its UK division replacing Co-Founder Paul Brand.

Aviva’s UK commercial lines and global corporate & specialty Managing Director Patrick Tiernan will now Chair the International Underwriting Association of London (IUA). Accepting the role at the IUA’s September 23 annual general meeting, the newly elected Chairman succeeds SCOR’s Malcolm Newman.

A familiar face within AXA XL is stepping up to a new role at the turn of the month. Jonathan Salter, currently Deputy CEO of AXA XL Risk Consulting, will move into the position of Head of Risk Consulting on October 01, allowing him to drive its proposition globally while working closely with the claims and underwriting teams.

We may be in the midst of a pandemic, but broking giant Willis Towers Watson has not eased up on the expansion of its Aviation team. Over the course of the last 18 months, it has added 45 to its team around the globe, with appointments such as: a new Managing Director in Great Britain, John Wadhams, who was previously Chief Underwriting Officer at Chubb for 15 years. A new US General Aviation Practice Leader in Lauren Escher, who spent time earlier in her career with XL and AIG. A new Regional Director for Aerospace in Asia, in the form of David Boyle – he had previously spent time with AIG Singapore, Marsh and Aon. A new Head of Airline Broking in Great Britain, Ed Louth, previously of Antares. An Executive Director for Global Aerospace, Neil Black, who made the switch from Aon. Marsh-alumni Paul Baker, who is now Executive Director of Global Aerospace.

Tasker Insurance Group have secured the services of Jack Rivett from JLT/Marsh, Jack has joined forces with recently appointed Richard Ellis in the London Market Broking Team.

 

 

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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