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General Insurance Newsletter - Friday 2nd February 2018

02 Feb 2018

Market News

The BIBA has announced the speakers for the Innovate Evolve Thrive conference, which is taking place in Manchester on May 16 and 17. Confirmed as keynote speakers on the first day of the conference are Lloyd’s of London Chief Executive and Chartered Insurance Institute (CII) president Inga Beale and Financial Conduct Authority (FCA) CEO Andrew Bailey. Day two will feature lastminute.com co-founder Baroness Martha Lane Fox CBE and Canadian astronaut Chris Hadfield. The seminars will cover subjects including rated and non-rated insurers; the challenges of mitigating risks from Brexit; customers from the perspective of the FCA, the Financial Services Compensation Scheme (FSCS), and the Financial Ombudsman Service; as well as risks such as cyber and fire.

The government has confirmed that Insurers will come under the scope of the Senior Managers and Certification Regime (SMCR) from 10 December 2018. According to the government, SMCR will give “consumers peace of mind that those at the top of the big Insurers will be held personally responsible for any wrongdoing”. The Financial Conduct Authority (FCA) stated in July last year that it was proposing to extend the scope of SMCR to more firms. At that time the British Insurance Brokers’ Association urged Brokers not to panic as compliant firms will not see many difficult changes. In December the FCA detailed in a further consultation that it expected the rules to apply to “solo-regulated firms”, which includes Brokers, “in mid-to-late 2019” and that the Treasury would set the start date.

In further news, FCA has revealed that it will fine an insurance intermediary £684,000 and its Chief Executive £468,600, following what it called a “failure to arrange adequate protection” and “inadvertent spending” of client money. One Call Insurance Services Limited, also known as One Call, will also be restricted from charging renewal fees to its customers for 121 days – a move which the FCA said is expected to cost the firm approximately £4.6m. CEO and majority shareholder of the firm, John Lawrence Radford, will also be prohibited from having any responsibility for client money and/or Insurer money in relation to regulated activity in financial services, the FCA revealed.

According to RSM UK, The number of cyber-attacks against financial services companies reported to the Financial Conduct Authority (FCA) has risen by more than 80% in the last year. A total of 69 material cyber incidents were declared to the FCA in 2017, an increase from 38 in 2016 and 24 in 2015.  These figures were revealed by the FCA’s Head of Technology, Resilience and Cyber Robin Jones in a speech at the PIMFA Financial Crime Conference on 25 January 2018. Regulated financial services companies have to report material cyber incidents to the FCA if they: lead to a significant loss of data, or the availability or control of IT systems; affect a large number of customers, or result in unauthorised access to, or malicious software present on, the company’s information and communications systems.

Allianz is planning to close its Manchester claims office at the end of September and consolidate the bodily injury claims at Milton Keynes for commercial lines and Bristol for personal lines. The transfers will start from March 2018. The proposed changes put 80 people at risk of redundancy. However, the Insurer detailed that around 20 new roles will be created at Milton Keynes to look after the increased work at that site. The cuts are separate to the earlier announcement that 400 people could be made redundant due to the Allianz and LV merger of which 140 could come from Allianz.

According to the quarterly CBI/PwC Financial Services Survey, Broker optimism experienced a sharp drop in the last quarter of 2017. A net 22% of Brokers said they were pessimistic about the overall business situation in their sector. In the same period of 2016 the balance was in favour of optimism by 40%. The current pessimism is also in contrast to the summer 2017 when overall Brokers were upbeat but continues the trend for falling optimism which was first seen in September 2017. Insurer optimism was more stable with a net 22% saying they were less positive about business prospects compared to 20% the previous year.

Global Risk Partners (GRP) has bought a majority stake in Lancashire-based agricultural Broker Country & Commercial Insurance Brokers (CCIB) for an undisclosed sum. According to GRP, the deal also includes taking over CCIB’s oversight of the Federation of Agricultural Brokers (FAB), a UK-wide network of agricultural Brokers. GRP’s most recent deals include the County Group and Alan & Thomas Insurance Group.

Amid growing criticism of the cost and slow pace of litigating Personal Injury claims through English and Welsh civil courts, global law firm Clyde & Co has announced it is piloting the use of online arbitration system PIcArbs. The two-year pilot, which began in December, will be used to arbitrate large loss Personal Injury claims from a major UK composite Insurer and 12 leading claimant firms. PIcArbs is an online system that facilitates binding arbitration using a panel of leading Barristers to act as Arbitrators.

Following an investigation by the City of London Police’s Insurance Fraud Enforcement Department (IFED) along with the Greater Manchester Police (GMP) and 1st Central, a criminal gang has been sentenced for conspiracy to defraud Motor Insurer 1st Central out of over £95,000 and money laundering offences. The gang claimed refunds on several Car insurance policies. The policies were bought with stolen card information and later refunded to genuine cards. Eleven members of the gang were sentenced in December 2017, while the remaining two were sentenced on 30 January. Nine members were sentenced for conspiracy to commit fraud and four were sentenced for money laundering.

Thistle Underwriting has launched two new products - High Risk and Construction. The MGA detailed that High Risk offered Liability insurance specifically designed for relevant contractors with a turnover of up to £5m. The second new product, the Construction scheme, has been designed for larger contractors and construction risks with a turnover of £5m to £15m.

The Federation of Small Businesses (FSB) has launched its own insurance service for members, moving away from Towergate which had managed the affinity for 20 years. The FCA-regulated Broker start-up, Ruskin Square will trade as ‘FSB Insurance Service’. The FSB stated that the business had been developed in response to an increasingly competitive insurance landscape and because it wanted to “provide its members with advice, as well as good value, quality products”. Ruskin Square is led by David Perry who was formerly at Towergate and left in 2015.

The UK’s first smart home insurance provider, Neos,  has been selected as one of 37 companies to join Tech City’s Upscale programme, which aims to help the UK’s leading scaleups grow into the tech giants of tomorrow. Upscale is a six-month programme of workshops, mentoring sessions and peer-to-peer learning that unlocks the key to scaling successfully. It is open to companies that can demonstrate a high level of month on month growth. Mentors include Senior Execs from Lastminute.com, Balderton Capital, Atomico, Kindred Capital, One Fine Stay, Blippar, Graze and Pact.

InsurTech business Broker Insights has launched and is using Broker customer data with the aim to transform commercial insurance distribution. According to the start-up its data platform combines technology and regional Broker customer data to give insurers insight into the UK commercial Broker market, bridging the customer information gap between Insurers and Brokers. The business was founded by former Aviva Broker Distribution Director Fraser Edmond, who is CEO, former Aviva UK Head of Broker sales Iain Crole who is Executive Vice President and Chief Operating Officer Sandy Cairnie.

London based InsurTech firm, Urban Jungle has announced a partnership programme and API designed to “help renters and sharers access their products more easily.” The programme allows companies to offer Urban Jungle’s insurance products and leverages technology to ensure they remain compliant without the need for being directly FCA-regulated. The API allows partners to serve insurance quotes within their own apps creating a “low friction customer experience.” The concept has already gone live through CreditLadder.

UK-headquartered start-up Inzura has raised $1m (around £705,000) in its first major funding round. The digital insurance platform will use the funds to accelerate new technology developments, as well as enhance delivery and support capacity worldwide. Inzura is beefing up its team not only in the UK but also in Singapore and Thailand to offer in-timezone operations and support.  As for the technology aspect, developments include machine learning and artificial intelligence aimed at delivering insight into customer behaviour and insurance needs; dynamic pricing in order for insurance products to adapt quickly to real-time data; and on-demand features to allow new business models. In addition, the insurtech will streamline customer acquisition and retention by integrating Blockchain.

Aston Scott Group has revealed a rise in turnover to £21.23m for the year ended 30 June 2017, compared to £19.41m in the preceding year. In addition, the Broker’s pre-tax profit rose to £1.90m in 2017 (2016: £1.33m) and its operating profit was £1.89m compared to £1.32m in the prior period. Overall profit for the financial year increased to £1.60m (2016: £1.16m).

Fresh Insurance posted a leap in turnover for the year ended 31 July 2017 to £16.9m up from £13.9m in 2016. Operating profit also went up to £2.9m (2016: £2.1m) even though administrative expenses went up significantly from £11.8m to £14m. Profit before tax was £2.9m (2016: £2.1m).

Leeds-headquartered Romero Group has posted group commission and fee income of £11.34m for the year ended 30 April 2017. This is compared to the £10.25m reported in the preceding year. The company provided a breakdown of the results with Romero Insurance Brokers delivering an income of £7.8m for 2017 (2016: £7.1m) and Club Insure £3.5m (2016: £3.1m). Group adjusted EBITDA was £2.72m, up 14 percent from the £2.38m achieved in the previous 12 months.

 


 

Market Movers and Shakers

RSA’s UK & International business has appointed Tony Buckle and Rob Gibbs as Managing Directors of Global Risk Solutions (GRS) and Commercial Risk Solutions (CRS), respectively.

QuestGates has appointed two new Loss Adjusters – Malcolm Davis and Suzanne Parker – to bolster resources in the north and south of England. In addition, the business has recruited experienced liability Claims Handler, Joanna Araff, to strengthen the central support function based at its Birmingham head office.

Aspen Insurance CEO Stephen Postlewhite has left the role with immediate effect. According to the Aspen, David Cohen, President and Chief Underwriting Officer of Aspen Insurance, will lead the day-to-day management of the insurance business.

Allianz has appointed Simon Hanley to the position of Chelmsford Branch Manager, effective from 19th February. Simon will be responsible for Broker relationships and leading the team of 26 employees.

Tokio Marine HCC has announced the appointment of Ros Breese as Underwriting Manager, Media and Film to their London Professional Risks division. 

Tokio Marine Kiln (TMK), the leading provider of specialist and corporate insurance, has appointed Alex Jomaa as Cyber Underwriter. 

National Friendly has strengthened its Broker team with the appointment of Isabelle Garnier to the newly created role of Broker Sales Support Administrator. 

Ed, the global reinsurance, wholesale and speciality Broker, has announced the appointment of Henry Warner as Cyber Broker/Producer.

Specialist Insurer Hiscox has appointed Gareth Bateman as Development Director – Security Incident Response (SIR) within its Special Risks division, with a brief to lead the development and operation of Hiscox’s SIR product which launched a year ago.

The Insurance Industry Charitable Foundation UK (IICF UK), the nonprofit organisation that unites the insurance industry in helping local communities through grants, volunteer service and leadership, has announced the appointment of six new members to the Board of Directors, bringing the total number of members to twenty. The three new companies who are represented on the Board are: Julian Steedman, Chairman, Brandex Group of Companies; David Melvin, Head of Corporate Transformation Strategy, MS Amlin and Andrew Kendrick, Senior Vice President, Chubb. The three new representatives from founding board member companies who also joined the Board are: Stephen Bryans, Partner, KPMG LLP;  Chris Moseley, Managing Director, Insurer Solutions, Applied Systems UK and Suzanne Scatliffe, Director, Corporate Social Responsibility, XL Catlin.

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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