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General Insurance Newsletter Friday 27th July 2018

27 Jul 2018

Insurance News

Zurich has been named as one of the Top Global Employers in Stonewall’s 2018 Index, one of only 13 organisations to make the list. It also becomes the first Insurer to be named in the 7 year history of the Global Top Employers List, reflecting the commitment across the Zurich group to drive progress on LGBT+ issues in recent years.

In other Zurich news, after a report from the Asset Owners Disclosure Project (AODP) revealed that European-based Insurers outpaced American and Canadian companies in their approach to climate-related risks, Zurich spoke to insurance business about how it has developed a successful sustainability approach. The company landed in the top 10 companies evaluated for the AODP report, and has been focused on responsible investment since 2012. Linda Freiner, Global Head of Sustainability for Zurich stated “We made an initial commitment of a US$2 billion investment in green bonds back in 2014 and we actually achieved that last year, so we’ve now doubled our commitment to US$5 billion.”

RSA has launched Autonomy and Motor Insurance — what happens next?, a report looking at the impact of driverless vehicles on the Motor insurance industry, drawing on its experience as the Insurer to the GATEway project (Greenwich Automated Transport Environment), a recent trial of autonomous vehicles in Greenwich, London.

It has long been talked about as a solution to many of the insurance problems that worry Risk Managers and now it’s time may be about to come. Parametrics - a specialised form of reinsurance or insurance used mainly in catastrophe bonds could become more mainstream in the commercial sector and so address some of the limitations of traditional insurance. That is the conclusion of a report from Airmic published in collaboration with Swiss Re Corporate Solutions and Marsh.

Rating agency Standard & Poor Global has reaffirmed IGI’s A- rating with stable outlook. International General Insurance (IGI), the global specialist commercial Insurer and Reinsurer, had its issuer credit and Insurer financial strength ratings reaffirmed by S&P, despite a catastrophe-heavy year in 2017, resulting in additional liability charges.

American International Group Inc has announced it has completed its acquisition of Validus Holdings, Ltd. The transaction, which was first announced on 22nd January 2018, closed following receipt of regulatory approvals and approval of Validus shareholders.

Trident Insurance is moving from Open GI to Applied Systems, Chief Executive Officer Robert Marshall has confirmed, stating the decision was made for financial reasons.

Manchester-headquartered Finch Insurance Brokers has reported a 7% rise in turnover to £3.87 million for the year ended 31 December 2017. Operating profit was also up 2% to £487,135 as pre-tax profit nudged up to effectively the same level.

The Clear Group has attracted new investment as part of a refinancing plan from private equity firm ECI Partners for an undisclosed amount. Clear Chief Executive Officer Howard Lickens confirmed in June that the Broker was looking to raise more funds in order to finance its strategy going forward.

Richard Davies, one of the most recognisable figures in the fight against insurance fraud, has sadly passed away. A key player in the establishment of the Insurance Fraud Bureau in 2005, the Head of Fraud at Axa UK served as Deputy Chairman of the IFB and chaired its technical board.

Moneysupermarket Group announces half-year results - it said it has successfully delivered on its plans and is trading in line with expectations. The UK firm – known for its MoneySuperMarket, MoneySavingExpert and TravelSupermarket brands, posted a 5% increase in profit after tax for the period, to £42.5 million from £40.3 million in 2017.

Global risk modelling and analytics firm RMS has rolled out the latest iterations of its terrorism models. Version 4.2 of the RMS probabilistic terrorism model (PTM) has been released, while the update in RiskLink Version 18 of the RMS Terrorism Scenario Model (TSM) is now available.

After speculation emerged yesterday, APRIL UK has today confirmed that it will be withdrawing from the UK Private Medical insurance (PMI) market with the closure of its insurance plans to new business.

Numerous risks – both old and emerging are threatening the shipping sector, according to an industry report by global insurer Allianz. According to the safety and shipping review 2018 by Allianz Global Corporate and Specialty (AGCS), multiple new risk exposures are threatening ships. The emergence of ultra-large container ships, which exceed the length of four football fields, raise fire containment and salvage issues, while climate change brings new route risks, especially in the Arctic and North Atlantic regions.

Arsenal FC Partner snaps up Blue Insurance for an undisclosed amount. Sydney-headquartered Cover-More Group, which was acquired by Zurich Insurance Group last year, has announced its own swoop of Blue Insurance, which operates in the UK and Ireland.

British holidaymakers will fork out an average of £1,500 on holidays this year but nearly half (49%) risk losing it all by failing to protect their travel plans when they book, new research from Aviva shows. As the summer holiday season begins in earnest, 26 million Brits (49%) will not buy Travel insurance when they book their holiday and do not have annual Travel insurance that renews automatically.

Insurance in the gig economy is a growing market and Insurers must capitalise on the opportunity, says GlobalData. The UK insurance market has seen the emergence of the gig economy as an opportunity not only for employment purposes but also as a new and growing market. With 2.8 million individuals working within the gig economy, those who are quick to scale in the market will undoubtedly reap the benefits, according to GlobalData.

Following the Automated and Electric Vehicles Act 2018 receiving Royal Assent and passing into UK law, AXA’s UK Technical Director David Williams commented: “Today we accelerate into the future as the first ever piece of UK legislation for driverless cars becomes law. AXA, having fed into the Bill from the start, is positive this regulation will ensure autonomous vehicles are on the roads by the Government’s target of 2021."

The FCA has outlined their approach to Brexit i.e. preparations and future vision. Nausicaa Delfas, Executive Director of International at the FCA, presented at Bloomberg/TheCityUK on the 19th July. "It has been a remarkable year in international affairs - dominated by change. So, I would like to take a step back today and offer a few reflections on an area which I know matters to many of you, and where we aim to give you some consistency: the FCA’s preparations for the UK’s withdrawal from the European Union (EU).....  Our focus, as always, is on making financial markets work well, and meeting the FCA’s three statutory objectives: to secure an appropriate degree of protection for consumers, protect and enhance the integrity of the UK financial system and promote effective competition in the interests of consumers."

The County Group, part of Global Risk Partners (GRP), has acquired a majority stake in Guardian Insurance Brokers. The deal, for an undisclosed sum, has received regulatory approval. According to a statement this is the first deal that County, which is headquartered in Crewe, has completed since becoming part of GRP in January 2018.

In a move welcomed by Biba. UK motor Insurers have voted for the Motor Insurance Bureau (MIB) to handle all claims from victims of terror where a vehicle has been used to kill or injure. This means the MIB will deal with all third party motor claims relating to terrorism where a vehicle is used to attack from 1 January 2019. The market will fund the initiative through a levy.

Woodward Markwell
staff have completed a management buyout deal following the retirement of previous owners Andrew Johnson and Beverley Monk. The previous owners of the Ipswich-based Broker were “keen to protect the business” instead of selling to a third party. 

London-headquartered ERS is ramping up over in Swansea. Keen to attract additional staff for its Crucible Park office, the specialist motor Insurer is holding an open day next month. A WalesOnline report said ERS’s continuous expansion in Swansea has seen its workforce in the Welsh city double over the last three years, and that a further 100 posts are expected to be filled in a span of 12 months.

Earlier this year Direct Line rolled out changes aimed at protecting the no-claims discount (NCD) of its comprehensive Car insurance policyholders in particular scenarios… now LV= has followed suit, announcing that its customers’ NCD will be kept intact if the accident was caused by an uninsured driver.     

Ageas has declined to comment on market speculation that Chinese investment company Fosun is interested in buying the business. Bloomberg reported this week that Fosun is considering an offer for all or parts of the Belgian Insurer Ageas as it seeks to expand its international footprint.

Africa is rapidly developing into a hot insurance market – and that fact has certainly not gone unnoticed at Howden Broking Group. The broking arm of Hyperion Insurance Group has today revealed a new strategic partnership in the region – teaming with one of Tanzania’s oldest insurance brokers B.R. Puri & Company Limited, to form a new local entity known as Howden Puri Insurance Brokers Limited.

Aston Lark has revealed its first financial results since it was formed in September 2017 with the merger of Aston Scott and Lark Group. The business noted that its financial results were presented as if it had been in existence since the start of that year and that it had added in a similar comparison for 2016. For the year ended 31 December 2017 revenue was up 6% to £52m with organic growth coming in at just under 2%. It also reported Ebidta growth of 6% detailing that adjusted Ebitda – factoring in if acquisitions in the period had been owned for the full 12 months – would have been £14m. Group CEO Peter Blanc stated “The results reflect a continuing positive performance of the combined group demonstrating progress whilst making significant investment in its people, underlying IT applications and infrastructure”.

Mathew Rutter, Partner - Insurance Advisory at law firm DAC Beachcroft, backs Biba advice that Brokers should not panic. Brokers have until 9 December 2019 to prepare for the incoming Senior Managers and Certification Regime (SM&CR) regulation changes. Matthew stated “It seems like a long time away but there is quite a lot that needs to be done between now and then.”

In other Biba news...the trade body held more than 100 events for members during the year. Accounts filed at Companies House have shown that the British Insurance Brokers’ Association’s (Biba) capital and reserves grew to £3.21m in 2017 from £2.36m the year before.

JLT Group saw its revenues grow 3% during the first half of 2018. The broking group’s total revenues grew to £713.5 million in the six months, with the board declaring an increased interim dividend of 12.7p per share for the period. JLT Group CEO Dominic Burke says the business is focused globally as it plans for a no deal Brexit. Dominic has insisted that the business is not focused on building its UK SME presence following the publication of its results. Asked if JLT wished to build on the UK SME space following Aon’s buy of Henderson and Marsh’s acquisitions of Bluefin and Jelf, Burke said that the Broker already has a profitable business in this area.


Market Movers and Shakers

JLT Specialty (JLT), the specialist insurance Broker and Risk Consultant, has appointed four new members to its European Cyber practice based in London and Stockholm. The senior appointments represent the latest in a series of major hires which significantly expand JLT’s European Cyber practice.

Global brokerage titan Gallagher has furthered its presence in the UK by expanding its national specialist Trade Credit and Surety practice. On the back of strong growth in the area (including a 20% organic revenue rise), the company has appointed two experienced specialists to its Manchester team. Colin Cunningham takes the UK-wide position of National Sales Leader for Trade Credit and Surety and Rachel Smailes arrives as an Account Executive.

Liberty Specialty Markets has expanded its liability team by creating two new senior underwriting roles. Paul Grover becomes LSM’s International Casualty Underwriting Manager while Daniel Munro takes on the role of London Market Casualty Manager, both join from AIG.

Charles Taylor Managing Agency (CTMA) has appointed Colin Grint as Chief Executive Officer. He will also join the board of CTMA. The appointment is subject to regulatory approval and Colin is expected to take up his role later in 2018.
Brit has announced the appointments of Richard Slater and Adam Champion as Underwriting Director and Senior Vice-president, Portfolio Manager and operations, respectively at Sussex Capital.

Hazelton Mountford, the only chartered insurance Broker within 15 miles of Worcester has welcomed two new members of staff following a successful recruitment drive. Jess Price and Sophie Anderson have both joined the 30 strong team, Jess as an Account Executive and Sophie as a Referencing Administrator.

Capsicum Delegated Authority (“Capsicum DA”), the specialist binding authority Broker, has today announced the appointment of industry stalwart David Doe to establish a new Professional Liability specialism.

Hyperion Insurance Group (Hyperion) today announces that Dr. Signe Michel, Senior Associate, Private Equity, Caisse de dépôt et placement du Québec (CDPQ), will join the Board as Non-Executive Director on 26 July 2018. This follows the closure of the transaction announced in 2017 which saw CDPQ join general atlantic as a long-term institutional investor in Hyperion.

Kingsbridge Group (“Kingsbridge”), the UK’s leading provider of specialist insurance services to contractors, freelancers and the recruitment industry, has announced a number of senior promotions within its Kingsbridge Contractor Insurance (“KCI”) division.

Pioneer Underwriters is pleased to announce the appointment of James Sharpington as an Underwriter in the Pioneer CAT team, effective July 2018. He will report to David Carson, Head Underwriter, Pioneer CAT.

Specialist Legal Expenses Insurer Temple Legal Protection is delighted to announce Sean Fayle has joined the business as a Senior Underwriting Manager.

Mark Cliff is leaving his Chief Executive role at Brightside Group to become Non-executive Chairman of the Broker. The business said in a statement that the move is designed to pave way for the appointment of a new CEO. Cliff will continue to run the Bristol-based Broker until a new CEO is hired.

XL Innovate, XL Group’s insurtech-focused venture fund, has announced the promotion of Chris Downer from associate to principal. As part of his new role, Downer will help lead the company’s venture investments into new categories within insurtech, including data and analytics, artificial intelligence and new insurance business models.

Luc Reuter, who has been Chubb’s Surety Head for Europe for six years, is making the switch to Tokio Marine HCC.

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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Transcript of Nausicaa Delfas speech (FCA, Executive Director of International) presented at Bloomberg/TheCityUK on 19th July 2018
Transcript of Nausicaa Delfas speech (FCA, Executive Director of International) presented at Bloomberg/TheCityUK on 19th July 2018
Transcript of Nausicaa Delfas speech (FCA, Executive Director of International) presented at Bloomberg/TheCityUK on 19th July 2018
Transcript of Nausicaa Delfas speech (FCA, Executive Director of International) presented at Bloomberg/TheCityUK on 19th July 2018
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