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General Insurance Newsletter Friday 30th August 2019

30 Aug 2019

Insurance News

Aston Lark has announced that it has completed its acquisition of Buckland Harvester. The purchase of the Manchester-based Broker for an undisclosed sum will bring £4m in gross written premium and 15 staff members to Aston Lark. All staff will remain with the company, including Managing Director David Hudson and Director Ian Hollas. Peter Blanc, Group Chief Executive at Aston Lark, commented: “This is our first acquisition in the Manchester area and we see this as a key area in our expansion plans for Aston Lark. We have further acquisitions in the pipeline and are keen to speak with other like minded Brokers in the area.”

Honcho has launched its ‘reverse auction’ app after more than three years in development. The app allows Insurers and Brokers to bid to provide consumers with car insurance, encouraging them to offer the most competitive premium in order to win business. Providers whose products are covered by Honcho at launch include Axa, Ageas, Aviva, ERS, LV, Covéa, Markerstudy and Sabre.

A survey by GoCompare Car Insurance has found that 4.1 million motorists are overpaying for their car cover by £982m a year by allowing their Insurer to automatically renew their policy. The GoCompare Car Insurance’s Auto-Renewal Study discovered that at their last renewal, 44% of drivers let their insurance automatically renew, 13% did so without shopping around. This means each individual policyholder is missing out on up to £239.69 in potential savings.

The Financial Conduct Authority (FCA) has said that claims management companies (CMCs) must do more to make sure that their advertising does not mislead potential customers. It took over regulation of CMCs on 1 April of this year and detailed that it has reviewed over 200 CMC adverts in a variety of media and discovered that there is far-reaching poor-practice in CMCs.

Scotland-based GS Group is set to acquire I & D Insurance Services for an undisclosed sum. The Courier reported that MD of GS Group, George Stubbs, commented that the business was a good fit. He told The Courier: “As the second largest independent operator in Scotland, over the years we have tended to grow organically. This may be an exception to the rule but we see it as a good fit.”

Ardonagh revealed the closure of all remaining Swinton retail branches in a presentation to investors. Swinton retail had a total of 59 branches when it was bought by Ardonagh for £165m in September 2018, down from 86 at the beginning of the year. Following the purchase, this number then fell to 44 by Q1 2019, 20 by Q2 2019 and the last 11 branches were closed in July 2019. Ian Donaldson, CEO at Atlanta Group, was keen to emphasise that branch closures were part of a strategy originally put in place by former Swinton CEO Gilles Normand, who left the business the month following the deal.

In further news....To make money, you’ve got to spend money and that’s what The Ardonagh Group has been doing over the past few years. After Autonet, Chase Templeton, Direct Group, Price Forbes and Towergate came together to form the Group in 2017 – with Healthy Pets, Carole Nash, Mastercover and most recently Swinton joining the company later on – the firm is now ready to look forward. During a media call to address results for the first half of 2019, Ardonagh’s CEO David Ross called this “a seismic moment in time” for the company. “Six weeks and three years ago, we set off on a 12-quarter plan – or three years in layman’s terms – which was effectively a plan that was going to cost an awful lot of money to renovate what we described as the worst house on the best street, which was Towergate,” he said, adding that shortly after he took on the CEO role, an investment banker referred to Towergate as an “unfixable business.”

New data released by the Association of British Insurers (ABI) indicates that the average value of detected insurance fraud is in excess of £12,000. The number of detected fraudulent applications has increased by 5%. At a time when the nature of organised fraud is changing, the Insurance Fraud Bureau (IFB) is increasing its focus on growth areas such as Liability and application fraud.

1.4 million SMEs were hit by a major attack or security incident (“crisis”) last year, costing a combined £8.8 billion, according to research by Gallagher. A quarter (24%) of SMEs in the UK were affected by a crisis incident in 2018 – a 5% increase on the previous year. Cyber and IT security revealed as the “soft underbelly” of SMEs – data breaches, cyber-attacks, malware and ransomware attacks were the most prevalent form of crisis event, accounting for 15% of all incidents in 2018.

A landmark Court of Appeal judgment that has provided much-needed clarity about how holiday pay should be calculated for certain types of worker, was brought using a group Legal Expenses insurance policy. The original employment tribunal claim was first raised by music teacher Lesley Brazel in 2015, for unlawful deduction from her wages and was supported by the Incorporated Society of Musicians (ISM). As a member of the ISM, Mrs Brazel enjoys the benefits of ARAG’s Group Legal Solutions policy, which insures members against the cost of making an employment claim, among other legal actions. The judgment may have a wider impact on the gig-economy and “zero-hours” contracts generally, but is principally concerned with workers, like Mrs Brazel, who are permanently employed but have no contractually specified fixed hours of work and who are not required to work every week of the holiday year, such as term-time workers within educational settings.

In further news...ARAG plc has developed a unique product with speciality insurance Broker Morrison Insurance Solutions to offer legal advice and protection to Special Guardians. The product has been created for the independent, not-for-profit organisation FosterTalk, which provides support for foster parents. It will be distributed as a benefit for FosterTalk members who are Special Guardians. Special Guardians have a specific legal status and are appointed by the Family Court to look after a young person on a long-term basis and take on parental responsibility for them.

This year has seen a significant increase in incidents related to shipment of dangerous goods, including a number of high-profile ship fires. This has rightly given greater attention and urgency to efforts by the lines and initiatives such as the CINS Organisation to improve safety in the maritime supply chain. TT Club, together with UK P&I Club, has sponsored the development by Exis Technologies of the Hazcheck Restrictions Portal. At the outset, this was an initiative with several major container shipping lines to help simplify the management of the partner line dangerous goods booking processes. This internet portal allows participating lines to enter (or upload) and maintain the operator, ship and port restrictions for their operations. Each line or port controls its own data and authorises password-controlled access for partner lines or shippers who can then ensure dangerous goods compliance throughout the intended journey.

International General Insurance Holdings Limited (IGI) has released its financial results for the first half of 2019, bannered by a 12.2% rise in gross written premiums (GWP). IGI reported a net profit of US$13.75 million (around £11.19 million) for the first six months of 2019, compared to US$11.02 million (around £8.97 million) last year and a 12.2% rise in gross written premiums from US$165.87 million (around £135 million) in June 2018 to US$186.12 million (around £151.5 million) in June 2019. Additionally, IGI recorded an overall underwriting profit of US$25.88 million (around £21 million) for the six months ending June 30, 2019, which reflected a 9% increase from the 2018 result of US$23.75 million (around £19.3 million).

Argo Surety, a member of Argo Group, has announced a new and increased Treasury listing capacity. The company can now consider single bonds up to US$100 million. Argo Surety has also expanded its appetite to support eligible customers for an aggregate surety bond of up to US$300 million, the company said.

Copart UK, an auto salvage agent that works with Insurers such as AXA, has announced the expansion of its fleet with an investment in 79 new DAF and Volvo-based specialist multi-car transporters. These new seven and eight car transporters are currently being converted to Copart standards by specialist transporter builders Belle Trailers, with the first units going into production this winter to further support Copart’s busier seasonal period.

Ahead of his meeting with US President Donald Trump at the G7 summit in France, Prime Minister Boris Johnson said that any potential trade deal requires “our American friends to compromise” – including lowering restrictions for UK companies selling insurance in the US. Last month, President Trump said that the US was negotiating an “ambitious” free trade agreement with the UK government and that he planned to speak with Prime Minister Johnson about the deal at the G7 summit. “We’re working already on a trade agreement,” Trump told reporters in July. “And I think it’ll be a very substantial trade agreement, you know [what] we can do with the UK, we can do three to four times [over] - we were actually impeded by their relationship with the European Union.”

In the event of a “no-deal” Brexit, vehicles registered in the Republic of Ireland will only need a valid insurance disc to enter Northern Ireland and the rest of the UK. Following discussions between Ireland’s Motor Insurers’ Bureau of Ireland (MIBI) and the UK Department of Transport, the two authorities confirmed that valid Irish insurance discs will serve as proof of insurance for Irish vehicles driving in the UK. However, Green Cards will still be needed for UK registered vehicles visiting European Union countries, including the Republic of Ireland, in case of a “no-deal” Brexit.

Global insurance law firm Clyde & Co has announced a partnership with Assess Threat, a start-up that developed the Terrorism Risk Assessor (Tera) product. Tera uses a combination of real-time and historical data to assess the exposure of any asset or location to Terrorism and produces a detailed report of its findings, Clyde & Co said. “This collaboration represents a significant venture into lawtech for the firm,” said Michael Tooma, Clyde & Co Australia Managing Partner.

Coversure Insurance Services has agreed to a long-term partnership with Close Brothers Premium Finance (CBPF). Under the partnership agreement, CGPF will be the exclusive premium finance backer of Coversure’s personal and commercial lines. Coversure’s network includes 1,700 Brokers across more than 2,000 offices and services more than 2.4 million businesses and customers.

Cyber criminals have their sights set on bigger and bigger targets, hitting the European Central Bank (ECB) twice in the past five years and now launching a relentless attack on the City of London Corporation. According to findings released under Freedom of Information (FOI) legislation, the municipal governing body of the City of London was hit with nearly three million attacks in just the first three months of 2019. This war of attrition has put 10,000 residents of the City of London in the line of fire, as well as 10 million annual tourists and 400,000 daily commuters entering the city.

Insurtech Bought By Many is going against an industry practice which it believes is creating a barrier for policyholders. Announcing what it called its ‘latest innovation’, Bought By Many said it is removing the usual two-week waiting period for pet owners who wish to switch Insurers. The insurtech is of the view that such a window is not necessary when a customer replaces their provider with no break in the coverage.

Anyone doing business via the Lloyd’s of London insurance platform will have witnessed several market departures of late in line with the so-called ‘decile 10’ crackdown. Now there’s been another Casualty. According to The Law Society Gazette, broking giant Aon has reached out to customers of its managing general agent Maven to bring them the bad news. As shown by a screengrab posted by the publication, part of Aon’s letter goes: “We currently act as your intermediary for Professional Indemnity Insurance and unfortunately it is with regret that we must advise you that we will not be able to obtain a renewal quotation on your behalf this year."

M&G Prudential, which will be renamed M&G Plc when it is officially split from parent Prudential Plc, is reportedly letting people go in Stirling. According to The Herald and Daily Business, the proposed job cuts will impact 84 workers from M&G Prudential’s wealth solutions operations in the Scottish city. The UK and European savings and investments business is also present in Edinburgh.

Tesla has launched Tesla Insurance in California, a product which it said was designed to supply Tesla owners with lower rates. The car manufacturer’s Chief Executive, Elon Musk, first revealed that Tesla was developing a Car insurance product during a call with analysts in April. According to a statement on Tesla’s website, the new product includes “comprehensive coverage and claims management” to support customers.

Insurer RSA has priced senior notes to the value of £350m according to a filing on the London Stock Exchange. The senior notes, which will mature in 2024, have been issued at a price of 99.753% and will bear an interest rate of 1.625%. An RSA spokesperson commented: “We are bringing to market a senior bond issue of benchmark size. Proceeds will be used for general corporate purposes and to increase flexibility in capital flows across the Group and are not intended for a specific transaction.”

Gauntlet Enterprise’s appointed representative (AR) network will be “twice as big” within two years, according to Gauntlet Group Managing Director Roger Gaunt. The announcement follows Gauntlet’s signing of its first ARs in Wales last week and the creation of a southern hub for an AR in Essex in December 2018.

Global Risk Partners and its private equity backer is believed to be exploring options for partial sale and reinvestment. The Peter Cullum-founded broking group has been backed by Penta Capital Investment since 2013. Penta Capital has invested in GRP twice as long as its two previous general insurance assets which were specialist Professional Indemnity MGA PI Direct/Martello (invested in August 2004, divested in November 2006 at 2.5 times cost of investment) and Esure (invested in February 2010, divested in March 2013 generating a realised money multiple of 3.3 times investment).

Andover-headquartered Broker, Be Wiser has become a member of the British Insurance Brokers Association (Biba). According to Biba its membership features about 2,000 regulated firms which have in their employ as a collective over 100,000 staff. Be Wiser has previously been a Biba member, joining the trade body in 2014. A spokesperson for Biba confirmed that the broker cancelled its membership in 2016.

Specialist provider, CFC has added to its Product Recall package to include recall costs resulting from intellectual property infringement. The Managing General Agent claimed this type of cover has become increasingly important as a result of society’s current consumer driven brand awareness. Cover for animal by-product contamination where animal DNA is found in vegan or vegetarian products is now part of the suite. It now also features cover for government plant suspension.

Fujitsu is the latest tech giant to announce its intention to disrupt the insurance sector. The hiring of insurance veteran Manan Sagar as the company’s Chief Technology Officer (CTO) in January 2019 signalled Fujitsu’s commitment to the cause. By offering technologies like image recognition, tracking, and wearables to the market, Fujitsu is set on establishing tech providers as the ‘fourth player’ in insurance – joining the established distribution model of Insurer, Broker and client.

Brightside Insurance Services Ltd [‘BISL’] EBITDA climbed by over £3.15m to £4.81m (2017: £1.67m), with GWP up to £106m, according to 2018 accounts to be submitted to Companies House. Income (not including IQED) was up 4% in 2018. Overall, Brightside Group EBITDA showed a slight increase to £5.6m (2018: £5.1m), although overall group revenue fell £17% as a result of the 2017 restructure of IQED, the Group’s medical reporting business. Group loss before tax was flat at £10.3m (2017: £10.2m).  

NMU’s Maidstone branch has moved into their new home at Kings Hill Avenue, Kings Hill, West Malling, Maidstone, ME19 4AQ. The office contact number of 01622 710181 remains unaltered, as do individual underwriters contact details.

International General Insurance Holdings Limited have reported earnings for the first half of 2019. IGI reported a net profit of $13.75 million for the first six months of 2019, compared to $11.02 million last year, and a 12.2% rise in gross written premiums from $165.87 million in June 2018 to $186.12 million in June 2019. The Group recorded an overall underwriting profit of $25.88 million for the six months ending 30 June 2019, which reflected a 9% increase from the 2018 result of $23.75 million. IGI reported growth in most major lines of business, with Casualty, Engineering, Ports & Terminals and Financial Lines contributing the most in dollar growth.

 

Market Movers and Shakers

HDI Global SE has announced the appointment of Stephanie Ogden as Director of Distribution for its UK and Ireland operations, effective September 02. In her new role, Ogden will be responsible for distribution strategy, Broker and client relationship management and marketing across the business and will be a member of HDI Global SE’s UK and Ireland executive committee.

Argo Surety has announced the hiring of Bobby Bang as Director of Strategic Operations, Steve Parnas as Vice President of Contract, Eastern Region and Christine Marchetti as Assistant Vice President for Commercial, Northeastern region.

Insurance software provider SchemeServe has announced the appointment of Alex Astengo as Sales Director. Astengo is a Chartered Accountant with over 15 years of sales and business development experience implementing cloud technologies to digitise and transform businesses.  Prior to joining SchemeServe, he was Business Development Manager with Lightyear.cloud, a SaaS accounting invoice automation firm. Astengo also founded Accounting Back Office, a cloud based accounting and advisory business using the Xero cloud accounting platform to provide accounting and advisory services to SMEs.

NFU Mutual is welcoming a new Non-Executive Director (NED) next month. Joining the rural Insurer’s main board is David Roper, who brings nearly three decades of experience from PwC. More than half of Roper’s time there was spent in his capacity as financial services partner.

Paula Williams has been appointed Group Managing Director of County Group’s commercial division. She will join County in September 2019, and will report to Alastair Christopherson, Group MD.

Liberty Specialty Markets (LSM), part of Liberty Mutual Insurance Group, has announced the appointment of Antoine Brodu as Head of Financial Lines, France with immediate effect. He joins LSM from AIG France, where he spent 13 years, most recently as Client Director, Major Accounts.

 

 

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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