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General Insurance Newsletter - Friday 26th January 2018

26 Jan 2018

Market News

The Chartered Insurance Institute (CII) has called on Insurers, Brokers and Financial Planners to work together to improve the financial resilience of women. The CII’s Insuring Women’s Futures project (IWF) has developed research which found women face a number of pressures which impact negatively on their financial health. These include but are not limited to the gender pay gap, an apprenticeship gap where men earn 21% more than females, and disproportionate caring responsibilities.

XL Catlin market research has identified significant potential for Credit insurance growth. The Insurer said that credit insurance continues to grow in relevance as policyholders look to protect themselves against economic and political uncertainty. Traditionally, credit insurance has been used by organisations to protect their balance sheets against the threat of a default on their trade receivables. While this is still the predominant case, it is increasingly used as a proxy for a financial guarantee to enable policyholders to gain access to bank lending and optimise their working capital needs. Furthermore, by ensuring adequate corporate risk management, credit insurance has become an essential ingredient for proper corporate governance, required by investors, banks and rating agencies alike.

According to reports, Admiral is charging higher premiums to drivers with a Hotmail address than it would to those with a Gmail account. Its enquiries revealed that two identical drivers received quotes of £467.04 for having a Hotmail account and £435.68 with a Gmail account on Gocompare.com – that’s more than £31 difference. Similar searches were carried out on multiple comparison websites – including the likes of moneysupermarket.com and confused.com – and there was a consistent difference between the Hotmail user and the Gmail user, albeit the differences were much smaller – at around £6. The insurer reportedly admitted to taking into account the email domain of a driver, with the publication quoting it as saying “certain domain names are associated with more accidents than others.”

AIG is to acquire Validus for $5.56bn in cash. The acquisition is significant step forward in AIG’s strategy for profitable growth and brings a diverse and complementary set of attractive franchises across specialized products and regions. It will also significantly enhances AIG’s General Insurance capabilities, adding a leading reinsurance underwriter, a highly regarded operation at Lloyd’s, an enhanced offering in the U.S. domestic market, and an insurance-linked securities asset manager.

Regulatory developments dominate priorities identified for the London company insurance market in 2018 by the International Underwriting Association. Whilst preparations for Brexit will continue to attract a great deal of attention, the year will also see firms adapting to several other major changes to the supervisory environment. The IUA’s annual business plan also highlights 2018 as a pivotal year to prove that initiatives to modernise London’s business processing can deliver promised savings and efficiencies.

Thomas Miller, the international provider of market leading insurance services, announces the acquisition of international marine consultancy, Brookes Bell, for an undisclosed consideration. Brookes Bell is a leading marine technical and surveying consultancy with offices in Liverpool, London, Glasgow, Shanghai, Hong Kong and Singapore. It has served the marine and energy industries since 1903, providing specialist services in areas including emergency response, casualty investigation, salvage and wreck removal operations, scientific cargo expertise, forensic engineering and expert witness services.  

Nevada Investment Holdings has announced its purchase of the remaining 19.9% of the Broker Network business from The Ardonagh Group. Nevada will acquire the 19.9% stake in exchange for cash consideration of up to £30m, subject to meeting certain business performance measures.

The Burley Group has bought Benfleet-based Grace Corporate Insurance Services for an undisclosed sum. Grace Corporate had been acting as an appointed representative of The Burley Group for the past four years and focused on SME to mid corporate business. The owner, Tony Crowley, has become a regional director of The Burley Group and his colleague also remains with the business. The deal takes the group’s gross written premium closer to its current target of £20m.

Aston Scott and Lark are to roll out a rebrand in the summer as Aston Lark. The two Brokers began the merger process in June last year when private equity group Bowmark Capital – the backer of Peter Blanc’s buyout of Aston Scott in May 2015 – formed a new company to buy up the entire share capital of both Brokers. In September the company revealed a new management structure with Peter Blanc, formerly chief executive officer of Aston Scott, taking on the role of group CEO and Stephen Lark, previously Managing Director of Lark, taking on the role of Executive Chairman, with direct responsibility for the employee benefits division, HR and marketing.

The latest Confused.com Car Insurance Price Index in association with Willis Towers Watson has revealed that the average comprehensive premium for UK motorists finished 2017 at £827, almost 8% up over the 12 months. However, the findings also revealed that prices actually fell by an average of 1.3% in the final three months of the year. It was the second quarterly fall in a row. According to the researchers it was the largest quarterly reduction in premiums seen in more than three years.

A former employee of Arthur J Gallagher who was convicted of stealing £500,000 from the Broker has been sentenced to 34 months in prison. A Gallagher spokesperson confirmed that James Cunnington, who was found guilty in November last year, had been jailed earlier this month.

The British Insurance Brokers’ Association (BIBA) has called on the government to find ways to prevent regulation from hindering Broker productivity. The call comes within the trade body’s manifesto for 2018 and asks the government to support the following aims: A period of stability in the rate of regulatory change; a global competition objective for the FCA and focus on proportionate supervision for its low-risk sector.

In further news, there were 975,000 telematics policies live in the UK in 2017 according to annual research by the BIBA. The trade body explained that its survey included information from “the leading telematics brands” in the UK. The figures show an increase of nearly 30% on the 2016 total.

Pen Underwriting has confirmed that 12 people are at risk of losing their jobs at its Chelmsford office. A spokesperson explained that the staff were currently taking part in a consultation regarding the job losses. The affected employees are part of the specific schemes department and Pen has proposed to relocate its scheme business to other branches.

CoverBuilder has launched a new host insurance product for people who let out rooms or properties via home-sharing platforms such as Airbnb, Wimdu and Spareroom. The specialist Broker stated that Home Hosting Insurance is designed to work in conjunction with a standard home insurance policy and covers the policyholder’s property and possessions against risks including damage, theft and vandalism by guests. It added that the product, which the Broker claimed was one of the first of its kind, can be used for any home-sharing platform and with no limits on the number of guest lettings.

The latest AA British Insurance Premium Index has revealed that the average Shoparound quote for a combined buildings and contents policy rose by 1.8% for the fourth quarter of 2017 to £161.80 and, over the year, by 5%. The AA’s Shoparound index is an average of the five cheapest quotes for each ‘customer’ in a fixed nationwide basket of risks which it said were representative of the insurance-buying public. It uses a mix of price comparison sites, direct and Broker quotes. For home buildings insurance increased by 2.4% to £117.11 in the three months and by 5.7% over the 12 months. However, the typical Shoparound quote for an annual home contents policy fell very slightly in the final quarter by 1.1% to £60.40. This still meant an annual rise with quotes 2.1% higher than at the end of 2017.

Insurtech, Bought By Many has unveiled a new European travel insurance product aimed at providing travellers with serious health conditions better access to coverage. Called “urgent medical travel insurance,” the insurtech’s offering promises the following: no medical questionnaire, quotes in seconds and “condition-agnostic” pricing. In lieu of the questionnaire, prospective policyholders are only asked to confirm that their physician is happy for them to travel. Bought By Many believes its new travel insurance product will mean “instant quotes at a fairer price” for people with serious medical conditions.

In just a couple of decades, the mobile phone has seen meteoric growth – and drones are likely to be next, according to a senior AIG exec. The European Commission expects the drone sector in the region to directly employ more than 100,000 people within 20 years and estimates that it will have an economic impact exceeding €10bn (£8.7bn) per year. Within the insurance industry, the potential for drone usage is vast. In the claims space, drones are already being used, where they can quickly and accurately inspect even the most inaccessible of sites. One Cognizant report suggests that drone usage will make claims adjusters’ workflow 40-50% more efficient in the future. According to Nick Barber, head of property and special risk for AIG’s European business, drones are set to become a vital part of the insurance industry’s arsenal in the coming years.

Hastings Direct has formed a partnership with BAE Systems with a contract that sees the latter deploy its fraud detection solution, known as NetReveal, to help the Insurer detect and prevent policy fraud. In a release announcing the partnership it was outlined that the contract will allow Hastings to use extensive data resources to identify fraudsters, and it will also have access to fraud risk scores during the claims process that are designed to flag suspicious claims.

Das is to educate customers and Brokers about legal expenses insurance via the Amazon Echo device. The business said its customers and the general public will be able to ask Alexa, Amazon’s virtual personal assistant, a variety of questions about legal expenses insurance. Das, which claimed it was the world’s first legal expenses Insurer to do this, added that people could also ask questions about a range of common legal issues including disputes with neighbours, employment tribunals and redundancy. It detailed that the Das Alexa skill will provide a question and answer structure that will be updated based on popular legal themes and emerging trends.

Trade credit insurers are expected to pay an estimated £31m in total to help firms in the supply chain recover from the collapse of Carillion, according to the Association of British Insurers (ABI). Trade credit insurance covers businesses against the risks of not being paid for goods or services that they sell following an insolvency, protracted default or political upheaval. According to the ABI trade credit insurers paid out £210m to firms in 2016 due to non-payment. Carillion, which employs around 43,000 people in the UK, Canada and Middle East, and uses around 30,000 suppliers went bust last week.

Travelers has reported that net written premium grew by 5% in 2017 to $26.2bn [£18.6bn]. Profit for the 12 months dropped by 32% to $2.1bn. Likewise the combined operating ratio (COR) deteriorated from 92% in 2016 to 97.9% last year.

Kelliher Group is to open its wholesale capabilities to Brokers across the UK. Group CEO Imogen Coggan explained that Kelliher Group already works with Brokers in the South East and London but wishes to build on this as it seeks to double its retail broking GWP by 2020. Kelliher currently has relationships with around 550 Brokers.

AXA has made a host of investments in rising insurtech start-ups – and now the incubator it funds has poured cash into another up and coming firm. Kamet Ventures, funded by AXA, is sending £4m in seed funding to London-based smart data independent insurance adviser Anorak Technologies Limited. The money will reportedly be used to develop its platform while also expanding its operations and business reach.

Lloyd’s has revised its website’s navigation structure after conducting user testing with more than 250 stakeholders worldwide. The project to review Lloyds.com’s navigation and structure from a user perspective was initiated in summer 2017. Changes, which are now live, include the following: General content and market-specific information are separated via two-tier navigation; ‘popular’ policyholder information and events information have been moved to the top navigation; Market directories are now accessible directly from the main navigation for increased visibility; accessible from the main navigation is the new “tools and systems” section and unnecessary duplication has been removed to reduce the number of clicks needed to reach pages.

 


 

Market Movers and Shakers

QBE Europe veteran Chris Drew has made the switch to new managing general agent (MGA) platform Volante Global Limited. Drew, who joined QBE in 2004, has been appointed as Volante’s Chief Actuarial Officer and will be in charge of the one-month-old firm’s actuarial, analytical, and management information (MI) functions. Volante has also appointed Paul Rich as Head of Operations and joins Volante Executive Committee

Chubb has announced two new appointments within its Midlands and the South region. Michael Avent has been appointed as Regional Manager for the Midlands and the South, while Louise Joyce has been appointed as Branch Manager for Birmingham.

Principal Insurance has appointed Paul Hughes to the newly created boardroom role of Sales and Operations Director.

Lockton, the world’s largest privately owned insurance Broker, is further enhancing its professional services expertise with the appointment of Gail Cookto the Professions Team.

MS Amlin plc has announced that its Group General Counsel, Bob Robinson, will be leaving the company later this year after eleven years in the role.

RSA has enhanced its north-west presence with several key appointments at its Manchester trading site in recent months. Moira Spencerhas taken up the position of Manchester Regional Manager. Former north-west Business Development Manager (BDM) Andy Bartley has been promoted to Sales Manager, heading up the account management team covering the north-west and north-east markets. He has appointed Jonathan Hurst to the position of Account Manager covering key partners across the northwest. Meanwhile, Andy Collins has been appointed block of flats Senior Underwriter covering the UK and Nicki Porter has become underwriting lead.

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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