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General Insurance Newsletter Friday 26th March 2021

26 Mar 2021

Insurance News

Insurtech startup So-Sure has expanded its portfolio of products with the launch of contents insurance. So-sure, an MGA with full delegated authority, started out offering mobile phone but has now expanded into the home contents market.

On March 22, Aston Lark launched a portal for their British Insurance Brokers’ Association (Biba)-approved insurance scheme, Renovation Plan, allowing Brokers to instantly get quotes and buy renovation insurance.

A number of Insurtechs have been named in the Oxbow Partners Impact 25 report which highlights the organisations with the greatest opportunity of helping the insurance sector to adapt. Key names on the list include Wrisk which was founded by former Oxygen Group CEO, Niall Barton.

Das UK Group is set to take part in this year’s Ride Across Britain to raise money in aid of the Alzheimer’s Society and Insurance United Against Dementia (IUAD). The legal expenses specialist stated that a ten person Das UK team, consisting of five employees and five business partners, is aiming to raise more than £25,000 by cycling 980 miles from Land’s End to John O’Groats over nine gruelling days between 4 and 12 September 2021.

Vista Insurance Brokers has set up a new broking arm with offices in Manchester, Birmingham and London, to provide better support to SMEs within the local community. The new subsidiary, Vista North West (VNWL), will operate nationally, but its primary objective will lie in the North West, where it aims to support local businesses and add a personal touch to its customer service.

The Financial Conduct Authority has given firms extra time to implement rules aimed at cracking down on dual pricing. Although the rules are yet to be finalised, with a policy statement due at the end of May, the FCA has indicated the timetable it now expects firms to work to the following timescales after a market consultation.

Sedgwick’s European recall index report has been developed over the past decade to provide analysis and perspective on the trends shaping safety regulations across industries and, earlier this month, its brand protection team released its latest offering. Discussing the report with Insurance Business, Chris Harvey, Senior Vice President, client services, Sedgwick, noted that product-related risk is one of the biggest challenges that businesses face today.

A whopping 77% of Motor insurance companies in the UK “admit to having put profit above customers for too long” and accept that the balance must be redressed to achieve future success, new research by software-as-a-service insurance platform. Conducted by Insight Avenue in January and February on behalf of By Bits, the survey also found that increasing levels of customer satisfaction has now become a critical priority for 75% of car Insurers.

The Ardonagh Group has released its financial results for the 12 months ended December 31, 2020 – a year that saw the insurance brokerage refinance its balance sheet to snap up the likes of Bravo Group. Ardonagh’s loss for the period rose by £132.3 million, mainly due to one-off costs worth £81.6 million relating to the company’s July 2020 issuance of new borrowings, increased financing costs, and a higher tax charge for the year. The group used the new borrowings to repay existing ones and to fund acquisitions.

The soured relationship between Covéa Group and SCOR is not looking any better with the passing of time, with another major development likely to widen the rift between the two. In a release, French mutual insurance group Covéa said it has filed “on behalf of SCOR” a complaint against the latter’s Chief Executive for alleged market manipulation and corporate assets misuse. Filed with the Parquet National Financier, the complaint against Denis Kessler spans actions taken between September 2018 and January 2019 involving a share buyback and so-called advisory expenses.

A statement from The Financial Conduct Authority (FCA) - "On 3 August 2020, following complaints from policyholders and other stakeholders about Insurers making deductions from Business Interruption (BI) insurance claim pay-outs for some types of Government support given to policyholders, we issued this statement: Where Insurers have accepted liability, they should continue to handle and assess non-damage BI claims promptly and fairly, and to treat their customers fairly in accordance with Principle 6.".

Aviva is the latest Insurer to commit to Insuring Women’s Futures pledges and take action to improve female financial resilience. The insurance giant signed up to both pledges launched as part of the Insuring Women’s Futures manifesto.

Life, Pensions and investments business LV= has become the latest to announce its financial results for the year ended December 31, 2020, a busy year for the business which saw its sale to Bain Capital Credit. 2020 also witnessed the business increase its market share for the first time since 2016 while its operating profit rose to £40 million, up from a loss of £16 million in 2019. Its profit before tax from continuing operations rose to £37 million in 2020 from £15 million in the previous year.

COVID News

The insurance industry was “two weeks away” from solving the problem around pandemic-related Business Interruption (BI) claims when the FCA court case put a stop to its efforts, according to Ardonagh CEO David Ross. In a conference call with the media on 25 March, Ross stated that Rob Worrell, CEO of Ardonagh Advisory, had set up a working group last year which included Brokers such as Hyperion, Willis Towers Watson, Aon, Gallagher and Marsh to attempt to solve the issue around how BI policies should respond to Covid-19.

Insurers have paid a total of £472m in interim and final Covid-19 related Business Interruption (BI) claims following the test case, according to data published by the Financial Conduct Authority (FCA). The regulator detailed that this includes £192.1m in interim payments made for unsettled claims as well as £279.8m in payments made for claims where final settlements have been agreed and concluded.

Covid-19 has changed what consumers consider most important when purchasing an insurance policy. The latest Chartered Insurance Institute survey of 1,000 consumers of home, Motor and travel insurance shows a clear split in opinion between what consumers who have been heavily affected by coronavirus are looking for from an insurance company and the policies they purchase and those who have not been financially hard hit by the pandemic. Those identified by the poll as most negatively affected financially by coronavirus now tend to value clarity around claims processes and being able to choose suppliers during a claim ahead of being rewarded with cheaper premiums for their loyalty.

M&A News

The Ardonagh Group published its full results for 2020, which showed how much it spent on M&A during the 12 month period. The annual report showed its cash outlay during the year was £217.5m. When share capital and other factors are taken into account, the total purchase consideration was £213.5m. Deals and cash paid listed in the report are Rural Insurance bought for £23.5m; Arachas Owner Nevada Topco for £123.3m; Bravo Group (also known as Nevada 4 Midco) for £39.8m; Thames Underwriting for £9.7m; Lloyd Latchford for £12.5m; and other business combinations for £8.8m.

In further news...Ardonagh Chief Executive Officer David Ross has stated that he was “really surprised and disappointed” when the Competition and Markets’ Authority (CMA) opposed the firm’s deal to buy motorcycle Broker Bennetts. It was revealed in February 2020 that Ardonagh was set to buy Bennetts from Saga for £26m. But in September the business was forced to u-turn and confirmed it had decided to divest the broker to address concerns raised by the CMA.

PIB has bought specialist Financial Lines Managing General Agent Acquinex Group for an undisclosed sum. Acquinex specialises in M&A insurance products for small to mid-market deals across Europe.

The Hartford has announced that its board of Directors, after consultation with its financial and legal Advisors, has unanimously rejected Chubb Limited’s March 11, 2021, unsolicited proposal to acquire The Hartford. The Hartford board determined that entering into discussions regarding a strategic transaction would not be in the best interests of the company and its shareholders.

Aviva plc has reached a significant milestone in the execution of strategy, with the agreement to sell its entire shareholding in Aviva Poland to Allianz for a cash consideration of €2.5 billion, valuing the acquired business at €2.7 billion. Aviva will now focus on its strongest businesses in the UK, Ireland and Canada where it has leading market positions and strong growth potential. The divestment of Aviva Poland is the eighth transaction Aviva has announced in the past eight months, and this successfully concludes the planned refocus of the Group’s portfolio.

The 13-strong retail roster of AFL Insurance Brokers is moving to Towergate Insurance Brokers as part of the latter’s swoop for AFL’s corporate retail book of business, it’s been revealed. Without disclosing financial terms of the acquisition, Towergate announced that the unit will make the switch when the transaction is finalised. The snapped up book is said to be worth £8 million in gross written premium.  

Movers & Shakers

Chris Giles has stepped aside as Chairman as PIB. Brendan McManus, PIB CEO, commented: “Chris was fundamental to the creation of PIB and remained a Non-Executive Director until the recent refinancing of the business when he stepped down. He remains an Investor in the business and I have always appreciated his friendship and support.”.

AXA announces changes in its senior leadership team to implement its new strategic plan, Driving Progress 2023, presented in December last year. AXA’s Corporate Center will move to a simpler and more focused organization, in line with the operating model launched in 2017, and led by two Deputy CEOs, Frédéric de Courtois and George Stansfield. In addition: Etienne Bouas-Laurent, will become CEO of AXA Belgium and Alban de Mailly Nesle, will become Group Chief Financial Officer while continuing to lead Group Investments, effective July 1st. 

Blink Parametric Chief Executive Paul Prendergast and Chief Technology Officer Peter Bermingham are leaving the Cork-based Insurtech that they co-founded in 2016. The start-up said the duo have decided it is the right time to look at new opportunities, given the platform’s success. The business came under the CPP Group umbrella four years ago, and the Leeds-headquartered parent intends to bring the Irish unit under central management.    

HDI Global SE – UK (HDI) has appointed Steve Foreman as its Director of Marine Cargo Underwriting, effective 1st April 2021.

Allianz Insurance has appointed Leanne McGarrity as the new Head of Milton Keynes claims handling centre. She replaces Lesley Proctor, who has retired from the business.

The UK unit of HDI Global SE has set up a new Marine Cargo business line to be led by Underwriting Director Steve Foreman. HDI UK’s Director of Marine Cargo underwriting will come onboard on April 01, bringing nearly three decades of experience from RSA where he worked until 2020 and most recently managed the Insurer’s European Cargo portfolio.

RSA has announced further senior appointments to its future structure following the completion of Intact Financial Corporation’s proposed takeover. Mark Hodges, former CEO of Aviva UK and British Gas, will take up the position of Chair. Current Group Chief Financial Officer Charlotte Jones will stay with the business as CFO of RSA UK&I for an initial period of up to 12 months post deal completion. Announcements follow confirmation that Scott Egan will continue as Chief Executive of UK&I business. 

Miller has hired James Power to serve as its new Exposure Analytics Lead. The brokerage welcomed the specialist as part of its efforts to strengthen its exposure analytics and deal structuring offering for reinsurance clients. 

Davies has appointed Allison Carr as the new Chief Executive Officer and Gary Fitzpatrick as Chief Commercial Officer of its legal solutions business, Keoghs.

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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