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General Insurance Newsletter Friday 26th July 2019

26 Jul 2019

Insurance News

‘British Trump’ Boris Johnson will take over from outgoing UK Prime Minister Theresa May and the insurance industry has been quick to sound off in terms of its expectations particularly in relation to the sector. Reacting to the victory, Association of British Insurers (ABI) Director General Huw Evans stated: “Boris Johnson inherits a huge set of challenges and we should all hope that he will be able to overcome the current impasse and implement Brexit in an orderly fashion, with a transition period in place. The crucial longer-term test is whether our future economic relationship with the European Union avoids the UK’s world-leading insurance and long-term savings sector becoming a rule-taker.”

Cyber insurance is a complex matter, with concepts such as affirmative coverage and the many ways Cyber risk can overlap with other threats like Terrorism. Now the specialist reinsurance Broker Capsicum Re has published a whitepaper to examine the sophisticated peril in the context of warfare. Titled Cry Cyber and let slip the dogs of War: Exploring the issues of attribution in the context of War and Cyber, the nine-page document aims to provide the wider (re)insurance market a better understanding of the challenge presented by the attribution of Cyber losses. It features insights from the likes of Swiss Re and Hiscox Re as well as model clauses for discussion.

Liverpool’s Mason Owen Financial Services (MOFS) has bought Wirral-based brokerage Business Insurance Services. Lifting the lid on the swoop, Managing Director Andrew Gibbons stated: “This acquisition continues an exciting year of change for the business and the expansion will only improve the service that we can provide to our clients and we also believe that it will create further opportunities to develop our business into the future.”

Specialist global Insurer Hiscox has introduced a new security product in response to what it sees as a growing threat. Called “Malicious Vessel Seizure,” the single-peril policy is designed for ships taken by a foreign government and will cover loss of hire costs as well as provide services from consultancy Control Risks. These include government liaison as part of the offered crisis management support. “In recent months, we’ve seen growing political tension between the US and Iran which has recently culminated in the seizure of a British flagged tanker in the Strait of Hormuz,” noted Stuart Bisson, head of Guernsey and Europe for Hiscox Special Risks.

Travelers has missed Wall Street estimates for second-quarter profit, thanks to weather-related losses that led to an 18% decrease in underwriting gain, according to reports from Reuters. Gusty winds and hailstorms during the quarter destroyed homeowners’ roofs and policyholders’ cars, which in turn led to a wave of claims that were difficult for Insurers like Travelers to handle. Reuters reported that claims rose 5.7% to US$4.82 billion, leading to a drop in underwriting gain to US$74 million in the quarter. Meanwhile, catastrophe losses (net of reinsurance) also dropped 25% to US$367 million. However, that result was an improvement compared to last year’s figure of US$488 million.

Beazley has seen a deterioration in its combined operating ratio to 100% in the six months to 30 June 2019, from 95% in H1 2018. Chief Executive Officer Andrew Horton explained that this was due to a multitude of claims, including disaster claims. However, the Insurer also saw a 189% increase in its profit before tax to $166.4m (£133.6m) from its previous $57.5m.

Specialty Managing General Agent Nexus Group has found an ally in REG (UK) Ltd. The latter, which provides counterparty due diligence and agency management via its regtech solution (the REG Network), will help Nexus streamline its processes globally. The MGA will use the REG Network to establish new agencies, administer existing Broker relationships and facilitate regulatory oversight and governance. “REG is proving to be an invaluable business partner, simplifying and helping create efficiencies in our processes and controls,” noted Nexus Chief Operating Officer Tim Coles. “We look forward to working with them further as we grow our UK and international presence and implement solutions that allow us to better service our businesses.”

It was only in May when specialist Managing General Agent Ensurance UK launched its Terrorism and sabotage proposition and already the Lloyd’s coverholder is expanding to two other markets. The MGA, a wholly-owned subsidiary of Milsons Point-based Ensurance Ltd, has announced the rollout of the offering to Australia and the US. The move comes following their success so far in Britain. “The response we’ve received from Brokers since launching our Directors & Officers Terrorism and sabotage offering to the UK Property market has been considerable” noted Ensurance UK Chief Executive Tim James.

Inga Beale needs no introduction. A titan of the insurance industry, she is easily the most inspiring woman you will meet if you ever get the chance. She was the first female CEO of Lloyd’s of London, who made huge changes to the organisation by modernising and digitising the organisation, not without controversy for doing so. Unlike many other women at the top of the insurance industry, Beale says that her career wasn’t a rapid rise to the top. In fact, for a decade and a half she did much the same thing—worked as a trainee Underwriter and then an Underwriter. After 14 years she got her first promotion and that was what kicked off her career progression – not your typical story of a CEO. She worked in the US for a while before heading back to Europe and then took on the top job at Lloyd’s. It was this position, as both the first female and openly LGBT CEO—Beale is bisexual—that made waves. Lloyd’s had been such a male dominated institution for so long and this was a big change to put Beale in charge.

Political uncertainty is again at an all-time high. This may be why new research from Aviva shows that insurance Brokers are increasingly worried about the economic climate impacting the way they do business. The company’s Broker Barometer Report is completed every six months, taking stock of how Brokers across the UK feel about the industry and about their own businesses. And the May 2019 survey, the results of which have just been released, highlights that the number of Brokers who feel the economy is having a positive impact on their business has halved in the last 12 months. In May 2018, 20% of Brokers said it was having a positive impact while in the latest survey only 9.8% responded that they felt that way. Phil Bayles, Aviva’s Managing Director of intermediaries, said that the economy was a major issue for Brokers, but that although Brexit was contributing to economic instability, there were other factors at play.

Tonbridge-based Oakley College, which came to life last September to cater to 18- to 25-year-olds with learning difficulties, now has its own mascot to represent its students’ uniqueness and diversity. Frankie the bear was designed by the students themselves, with the help of Insurer AXA. The months-long product design project saw the students work as a team in making not only decisions but also compromises, using and developing skills that will eventually benefit them both at and outside of work. Along with Custom Toys UK, AXA led project sessions to also offer students a glimpse of the types of jobs available to them.

In other news...Axa XL has confirmed that it will stop working with LeisureInsure in Ireland from 1 August 2019. Insurance Age understands that Oxford-based LeisureInsure is a coverholder of Axa XL’s and that the Insurer has been providing the business with capacity for leisure insurance. The Irish Independent reported last week that LeisureInsure will now not quote for new business and from the end of the month will cease all renewals.

In further news...A court case between XL Catlin and wholesale Broker Orbit Underwriting has been settled in the High Court of Justice. XL Catlin’s claim in the Property and Business Courts was filed against Orbit, Director Stuart Lowe and former Director Lee Stevens and related to the misuse of funds. Axa XL declined to comment on the particulars of the case.

The insurance team of Ince has a new home. An announcement said the law firm is relocating its insurance practice from Aldgate Tower to the Lloyd’s building – allowing the unit to serve the sector right at the heart of the London insurance market while providing space for its continued growth both in terms of numbers and practice specialists. “2019 has been one of Ince’s strongest years to date,” noted Ince Managing Partner and Gordon Dadds Group Plc Chief Executive Adrian Biles.

Acturis has announced that it has replaced Open GI as the software house for three Brokers. The technology provider is now partnering with Howard Insurance Services, JRT Insurance Brokers and R McGee Insurance Broker to provide their core software systems. Jeff McCracken, Sales and Marketing Director at Acturis, said: “We are truly delighted Howard, JRT and R McGee have joined the Acturis community."

InsurTech service provider Epoq Legal is rolling out a new product for SMEs which can be sold by Brokers as a standalone or add-on. According to Epoq, the proposition helps SMEs become more aware of their legal rights and obligations and enhances both the prospects of successfully defending and pursuing legal claims. Currently working with major Insurers such as Das, Arc Legal, Arag Insurance and Alp (Allianz) on their legal expenses insurance (LEI) cover, Epoq is now offering the same service to commercial lines Insurers and Brokers with a more widely accessible Business Risk Protection (BRP) product.

The Personal Finance Society (PFS) Chief Executive Officer, Keith Richards, has highlighted that there is no ‘one size fits all approach’ when it comes to treating vulnerable customers fairly. The Financial Conduct Authority launched a consultation on proposed guidance for firms on the fair treatment of vulnerable customers. Richards commented: “There is no single approach to take for vulnerable customers as vulnerability comes in many forms."

Ecclesiastical has launched a series of modules to help Brokers advise clients operating in heritage properties. The modules cover the risks unique to heritage properties and how clients can best protect themselves and their people. The guidance follows research commissioned by Ecclesiastical and undertaken by the Health and Safety Laboratory, part of the Health and Safety Executive (HSE).

Neos has announced total UK sales of 75,000 for its indoor security SmartCam product. The Home insurance provider claims the SmartCam offers the features of high-quality competitors at a lower price point. The SmartCam features live HD streaming, night vision and 8x digital zoom. Motion and sound detection is also linked to in-app alerts for customers.

Global Risk Partners (GRP) has bought Broker 3XD for an undisclosed sum. Based in Ribble Valley in Lancashire, 3XD provides specialist insurance products through a range of distribution channels including Independent Financial Advisers. GRP explained that the firm’s 19 staff will stay with the business, along with Chief Executive Officer, David Fulluck and Chief Operating Officer, Graham Kelsall.

The Financial Conduct Authority (FCA) has said that it plans to lengthen the duration of  temporary transitional power until the 31 December 2020. This change is made to echo the extension of Article 50 and other than this extension the regulator’s plan is staying the same. It was granted temporary transitional power at the beginning of the year to help to reduce disruption for firms and other regulated organisations if the UK leaves the EU without a deal.

Australia-based PSC Insurance Group has entered an agreement to buy Lloyd’s Broker Paragon for a base amount of £42m. PSC will acquire 100% of Paragon’s share capital in the deal. The final amount paid will be dependent on Paragon’s Ebitda in 2019 and 2020. The acquisition is conditional on approval from the Financial Conduct Authority.

The Society of Insurance Broking (SIB) at the Chartered Insurance Institute has created a guide for Brokers best practice on construction and the best coverage for their clients following the Grenfell Tower fire disaster. According to the body, the guide aims to enable Brokers to identify, understand, and accurately present construction projects and property insurances to Insurers. To do so, the body suggested that Brokers need to have the ability to explicitly explain the nature of the different features and dangers involved in the scale of the project or property they are looking to cover, including the physical dangers for example, fire protection.

Profits at Kelliher Insurance Group fell in 2018 despite an increase in turnover. Turnover at the company grew 4.6%, rising from £14.68m in 2017 to £15.36m in 2018. However, administrative expenses swelled, rising approximately 10% from £13.45m in 2017 to £14.46m in 2018.

Insurance is a promise of help when things go wrong. Without trust, this promise is meaningless and insurance markets cannot function. This is the insight that led to the creation of the CII, and the instruction in its charter to 'secure and justify the confidence of the public'. That is why the CII created its Trust Index in 2018. Through an exhaustive process of interviews, video diaries and other qualitative techniques, the researchers found that trust in insurance is made up of nine key ideas about ‘what good looks like’ – both in terms of competent service and ethical standards. The research then measured trust in insurance against each of these building blocks of trust, through a survey of 1000 consumers and 1000 small businesses.

 

Market Movers and Shakers

AXA XL outlines the promotion of Simon Hearn to the role of Chief Underwriting Officer for London market wholesale. Leading the division’s P&C London wholesale business starting next month, Hearn will be in charge of developing core underwriting strategies and product profitability.

In other news....Paul-Henri Rastoul, who has been with AXA Group since 1992, has a new post to take on. Appointed as Chief Underwriting Officer of XL Insurance Company SE (XLICSE), Rastoul will be in charge of developing core underwriting strategies and optimising product offering and profitability for the AXA XL unit. As part of his appointment, the new CUO is also joining AXA XL’s international Property & Casualty (P&C) leadership team. Rastoul’s previous positions include President Director of PT Asuransi AXA Indonesia; Chief Technical Officer and Executive Committee Member, AXA Spain; Group Head of Commercial Lines and Reinsurance Regional Director, AXA Global P&C; Chief Underwriter and Chief Claims Officer, AXA France; and Senior Vice President & Chief Underwriter, AXA Asia Regional.

The board of Marsh & McLennan elected Tamara Ingram, Global Chairman of New York City-based creative, data and technology agency, Wunderman Thompson, as Director. Ingram’s appointment brings the number of the company’s Directors to 13. Ingram previously worked with media conglomerate WPP, where she held a range of roles including global CEO of J. Walter Thompson, group CEO of Grey UK and team leader for Procter & Gamble. Earlier in her career, Ingram was CEO of McCann Worldgroup and CEO of Saatchi & Saatchi’s London office. “I am delighted to welcome Tamara to the board,” said H. Edward Hanway, independent Chairman of the company’s board of Directors. “Tamara’s expertise in data-driven marketing and operational skills in leading a client-focused, global business make her a tremendous addition to our board. We look forward to working closely with her.”

Liberty Specialty Markets (LSM) now has a Chief Cyber Officer in the form of Jon Rigby. Effective immediately, the appointment sees Rigby bring his extensive Cyber experience to the newly created role in London. Prior to coming on board, the LSM Chief Cyber Officer co-led the cybersecurity team at consulting firm AlixPartners. Rigby’s credentials also include 33 years in the Royal Air Force where he served in Cyber, intelligence, IT and engineering roles.

Brit has created a new executive role and appointed a fintech veteran to fill it. The specialty Insurer has brought in James Birch to take on the position of Head of Innovation. Birch will begin his work on July 22, 2019, reporting directly to Brit CEO Matthew Wilson. The new hire will be responsible for managing the innovation process at Brit, while helping to identify business opportunities and technologies that can further support the Group’s strategy.

Professional services firm Lockton has expanded its Cyber and Technology practice with the appointment of a former Willis Towers Watson Cyber risk leader. Anthony Dagostino, former Global Head of Cyber Risk consulting and insurance at Willis Towers Watson, joins Lockton as Executive Vice President of its global Cyber and Technology practice. He will bring together the team’s expertise to develop a Cyber and Technology platform that leverages analytics to deliver tailored solutions for clients that target their real, underlying Cyber risk.

Former Ardonagh Deputy CEO Janice Deakin has stepped back at the consolidator and vowed that she needs a ‘break’ from big deals having worked on the acquisition of Swinton, but added the idea of acting as a Non-Executive Director at another firm presently has little appeal. Deakin joined Ardonagh in 2015 alongside former Gallagher UK colleagues David Ross and Adrian Brown as the retail broking head. She took the title deputy CEO two years later when Rob Worrell joined the business and then played an instrumental role in the integration of Swinton. “I have never been big on job titles, so I was never a massive fan of being announced as deputy CEO to be honest,” Deakin, who now acts as an adviser and consultant to Ardonagh.

Andy Tedstone is to take charge as CEO at Cobra Network. The former Director of Broking and Placement at PIB takes up the role with immediate effect and replaces Steve Burrows who has agreed to remain with the business in a consultancy capacity. Tedstone revealed his plans for the organisation which he hopes will double in size by 2021. He commented: “At the moment we have about 104 members with an average GWP of between £3-£5m.” Last month the news was announced that PIB was to buy Cobra in a move that would take its GWP up to £900m. Since then PIB has pledged to keep the Cobra brand. PIB has also announced that Tim Chadwick will be joining Chief Risk Officer for PIB Group (subject to FCA approval), with effect from 30 September. Tim joins from JLT as Group Head of Enterprise Risk Management and has also held senior roles with Willis, AON and RSA throughout his career which spans over 25 years. He will report to CEO Brendan McManus and join the Executive Management team to assume responsibility for the group’s Conduct and Risk framework.

Tokio Marine HCC has announced the appointments of Media specialist Underwriters Stuart Wolstenholme and Lucy Smith as it continues to expand its international Media, Film & TV capabilities within its Professional Risks division. The new hires reaffirm Tokio Marine HCC’s commitment to further enhancing its market leading products and expertise in this target sector, following the appointment of Ros Breese as Media, Film & TV Underwriting Manager in 2018.

Iprism, the technology-driven specialist wholesale underwriting agency, has announced the promotion of Kris Meadows to lead its nationwide network of Broker Development Managers. He retains his role as BDM – North. Prior to joining iprism in 2017 he held similar roles at Qdos Underwriting, AXA and Barclays.

Stephen joins Confused.com to deliver ‘clarity’ product strategy, in line with the brand’s promise to guide customers from confusion towards making better buying decisions. Stephen has previously worked at Commuter Club, Dollar Financial and Wonga. Louise O’Shea, CEO of Confused.com says, “Stephen will be leading the team at Confused.com to make our vision of bringing greater clarity to customers a reality.”

CFC announced the appointment of Roger Francis as Cyber Claims Director. Francis will lead CFC’s Cyber claims and incident response organization, as well as oversee CFC’s Cyber risk management services. Francis joins CFC with 15 years’ experience in information security, helping businesses protect their organizational assets from Cyber threats, developing global security governance programs and responding to headline Cyber breaches.

Aviva plc has appointed Patrick Flynn as an Independent Non-Executive Director of the Company with effect from 16th July 2019. He will also join the Board Audit, Risk and Nomination Committees.

RSA has appointed Martin Rueegg as the new Chief Executive of the Middle East and UAE. Rueegg joins from AXA where he was General Insurance Managing Director for Hong Kong. He replaces Lloyd East who moves to RSA’s Canadian operation Johnson as Vice President of Strategic Operations and Chief Operating Officer. East joined RSA in May 2009 as Group Director of Marketing Effectiveness before taking up the role of CEO of RSA’s Oman business Al Ahlia in 2011. He became CEO for the Middle East and Oman in 2014. Prior to joining RSA, East held senior roles at Principle Insurance Holdings and the AA.

Allianz Insurance has announced that Claire Buck has been promoted to the position of Head of Commercial Lines pricing replacing Tom Saliba who left the provider earlier this year. In her new role, Buck will be responsible for leading the development of pricing capability for Allianz’s Commercial business. The role will also encompass looking at changing technologies and exploiting these tools to open up new data opportunities for underwriting.

 

 

 

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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