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General Insurance Newsletter Friday 31st August 2018

31 Aug 2018

Insurance News

Conference call transcripts reveal Insurers' interest in Blockchain. Thomas Mason, a Research Analyst at S&P Global Market Intelligence, has examined global insurance firms’ call transcripts to gauge their keenness when it comes to Blockchain technology. The most transcripts discussing Blockchain technology were on conference calls from Europe, whereas for Insurers in the Middle East and Africa, not a single transcript mentioned blockchain technology.

EDAM Group sheds light on credit hire business. With accident management in the UK potentially about to shapeshift amid personal injury (PI) claims reforms, several players involved in the process – aside from motorists and insurance providers – are likely to be impacted. These include PI Lawyers, claims management companies and credit hire firms. However EDAM Group, which is a credit hire-led business with a small PI capability, is confident of its growth trajectory. The Manchester-based company has grown from a fleet of five vehicles to over 2,000 in less than two decades, with further expansion in the offing.      

Insurance Entrepreneur and Brexiteer Arron Banks has been formally blocked from joining Britain’s ruling Conservative Party. The former UK Independence party donor and close friend of UKIP MEP Nigel Farage applied for membership in an attempt to encourage hard-line Eurosceptic sentiments in the Tory party.

Huntingdon-based insurance Broker Coversure has announced a new HR strategy, as it pursues further growth. The move comes after the firm completed a private equity-backed management buyout earlier this year. The firm’s new HR strategy will provide new and existing franchise owners with greater access to HR & employment law knowledge and advice. It said its internal “HR Mentor” service averaged 300-500 visits a month in 2017, before peaking at 600 at the start of 2018 when key advice was shared regarding the outlook for the year ahead. These figures are expected to rise by a further 50% over the next 12 months.

A number of private equity firms are reportedly interested in acquiring insurance comparison website GoCompare. According to Bloomberg, its sources said potential acquirers include New York-based private equity firm KKR. But GoCompare and its board have decided to remain independent after talks with advisers and some potential bidders, the news organisation added.

A study by consumer group Which? claims Home insurance customers who have been with their Insurer for more than a year paid on average £75 more than new customers for combined policies. The data comes from a survey of 5,592 owners of buildings and contents (combined) policies. New customers said they were being charged a median premium of £195, while those who had been with the Insurer for one to two years paid an average of £220. If they were loyal for four to six years, the average was £300. Among the 1,674 respondents owning contents-only policies, new customers paid around £100. The figure rose to £120 after a year, while those who had their policy for four to six years paid £144.

Aspen Insurance has reached an agreement for a sale to Apollo Global, according to reports. The announcement closes a five-month sale process for Aspen, currently valued at nearly US$2.6 billion. The Insurer went up for sale in March after it posted a US$266 million loss. It was revealed by Bloomberg News that Apollo would pay $42.75 a share for the Bermuda-based Insurer – that’s a premium of 6.6% compared to closing share price. It is expected that the deal will be complete in the first half of 2019.

Global conglomerate Berkshire Hathaway has reportedly bought a stake in Paytm - India’s largest payment services provider. Sources told Indian financial newspaper Mint that the Warren Buffett-led conglomerate had been in talks since early February 2018 over a $360 million investment, which would value One97 Communications at around $10 billion to $12 billion. A Berkshire Hathaway spokesperson confirmed to Mint that “the investment was made and that it was not a transaction in which Mr. Buffett was involved.”

Several large UK Insurers have reportedly claimed they have contingency plans in place should Brexit happen without a deal between the UK and the EU. The Financial Times contacted 20 large Insurers and most said they would still be able to pay claims regardless of the outcome of talks. For example, Admiral, AIG, Hiscox and RSA told the paper they will pay through a Part VII transfer – in which policies with EU clients are moved to a new or existing subsidiary elsewhere in the EU. This can take as long as 18 months and fees can cost up to £1 million for the largest transfers.

Momentum Broker Solutions has reported profit after-tax of £273,289 for the 15 months to 31 December 2017. In the year ended 30 September 2016 the Appointed Representative network achieved post-tax profit of £227,219. In a filing at companies house the company explained that it had extended its accounting period by three months so that the financial year end would be better aligned with its Trading Partners.

A man has been sentenced to 26 months in prison for defrauding a combined £129,000 from three insurance firms that he worked for and lying to their clients about fictitious medical treatment costs that they were liable to pay. Iain Wishlade, 52, of Wetherel Road, Burton-on-Trent, was sentenced at Stafford Crown Court. The sentencing follows an investigation by City of London Police’s Insurance Fraud Enforcement Department (IFED).

The Association of British Insurers (ABI) has warned that cold-callers are passing themselves off as the trade body to scam people into making fake claims. The organisation stated it had been contacted by members of the public who have been getting cold calls from a firm claiming to be the ABI, or employed by it. It explained that its attempts to contact the firm have failed, adding that the ABI would never contact individuals about a personal injury claim or endorse a claims management company.

Allianz Partners has announced the launch of three new innovation centres focusing on travel, health and assistance. The centres are designed to “conceptualise, test and implement innovative processes, products and business models” by bringing in experience from digital players, start-ups and industry business partners. The move follows the launch of Allianz’s pioneering Automotive Innovation Centre in 2014.

Women pay less for car insurance than men – and it’s likely because they are statistically safer drivers, according to a new report by price comparison site Confused.com. According to the website, men paid an average of £793 per year compared to £701 for women – a difference of about 13%.

JM Glendinning Insurance Brokers has been chosen as the Yorkshire-based Broker distribution partner of SME health services provider Equipsme. Equipsme was launched in March 2017 and provides health benefits to businesses with two to 249 employees. Cover options range from £7 to £37 per employee per month and employees can choose to upgrade their own level of cover or add family members through their mobile devices. According Nick Houghton, group managing director of JM Glendinning, there is a thriving business community in Yorkshire and the firm believes the Equipsme product can appeal to a diverse range of SMEs there.

Lloyd’s of London has entered the cryptocurrency market, albeit with a minimum of fanfare from the organisation itself. Kingdom Trust, a Kentucky-based organisation, is the recipient of its milestone policy. Originally launched in 2010, Kingdom Trust is an independent qualified custodian regulated by the South Dakota Division of Banking. It currently provides custody services for over 30 different assets, including Bitcoin, Bitcoin Cash, Bitcoin Gold, Ethereum, Ethereum Classic, Litecoin, Ripple and its recent additions of ZCash and Stellar Lumens. More are planned in the near future. 

Batman has finally been foiled – not by a supervillain, but by mounting insurance costs. Ben Affleck, who stars as the Dark Knight in Warner Bros/DC’s recent series of superhero films, entered rehab for alcohol addiction for the third time last week. But by doing so, he may have inadvertently increased the price to insure him to exorbitant levels, experts say. “More than likely [Warner Bros.] will replace him because the insurance costs are going to go through the roof,” according to a Completion Bond Attorney . Affleck was set to reprise his role as the brooding Bruce Wayne in the upcoming “The Batman” movie. “He would be bondable, but the deductible would be really high, probably the budget of the film,” the representative added.

It’s been a little over three months since the EU’s General Data Protection Regulation (GDPR) came into effect, but complaints about potential data breaches have already more than doubled from a year before, according to a new report. Figures from law firm EMW show that there were 6,281 complaints to the Information Commissioner’s Office (ICO) from the start of GDPR (May 25th 2018) to July 03, marking a 160% surge from 2,417 complaints during the same period in 2017. In particular, the firm said more individuals are making complaints – with some doing so repeatedly. They are considered most likely to make complaints when their personal or financial information is allegedly put at risk.

Malicious malware, such as NotPetya and nation-state hacking have cast a dark shadow over the Cyber insurance landscape and while the threats are real, that’s just the top of the pyramid of what’s driving cyber claims. CFC Underwriting’s Chief Innovation Officer Graeme Newman can count on one hand the number of claims that the insurance company has seen tied to high-profile nation-state attacks. He stated “The vast majority of cyber incidents are carried out by organised criminal gangs......That’s where a strong cyber insurance policy comes into play, covering a policyholder on an all-risks basis. It insures the asset, not the way that it’s compromised".

Amazon’s infrastructure and capabilities mean it is well positioned to offer a claims management role when it comes to insurance, according to consultancy firm Altus who stated it would be a good fit for the retail giant. Altus reported: “There are differing views out there as to which aspects of the insurance value chain Amazon would target, but a theme of the company has been its ability to adapt and exploit opportunities to improve operational efficiency and claims management falls squarely into this category.” Recent months have seen a lot of speculation about how Amazon could move into the insurance sector.

Hazelton Mountford is currently working to identify potential buys and seeking Brokers with around £3 millions GWP. Worcester Broker Hazelton Mountford is positioning itself for acquisitions as it seeks to consolidate its position in the local area. Director Gordon Hazelton said that the business is currently working with an Insurer to identify acquisition targets in the region.

 


Market Movers and Shakers

Insurance has plenty of ground to make up in its diversity push – but encouragingly there are a handful of women smashing through that glass ceiling and reaching the very top of the industry. Now you can add a new name to the list that includes Inga Beale, Amanda Blanc and Tulsi Naidu after the Lloyd’s Market Association announced a new CEO. The woman taking the helm will be Sheila Cameron, currently head of international operations at Navigators Underwriting Limited. She will step into the role as David Gittings moves on at the end of the year following 12 years in the hotseat.

Chris Gagg replaces current CFO at AFL Insurance Brokers, Keely Dalfen who will remain as an Advisor to the business. AFL have hired former Towergate Insurance Group Head of Treasury Chris Gagg as Chief Financial Officer (CFO) and a member of its Board of Directors from 1 September 2018. The independent Lloyd’s Broker stated that Gagg has 17 years of experience in insurance and financial services.

The One Broker Group are delighted to announce appointing Hugh Parnell as a Non-Executive Director. Hugh, known for working in early stage, funding and business development in the start-up arena and for ‘making things happen’ in the Tech Industry, will bring his entrepreneurial mind-set and experience to us.

Declan Durkan has been promoted to MD of THB Risk Solutions as the group seeks to renew focus on UK retail Brokers. THB has refreshed its wholesale broking operation, THB UK Risk Solutions, which works with UK retail Brokers. As part of this Declan Durkan has been promoted to Managing Director for the division as it looks to “deliver to UK Brokers the broadest range of insurances that THB has ever offered”. Durkan, who was previously Commercial and Placement Director, commented: “I’m delighted to be leading a strong and experienced team – boosted recently by the appointment of two more Business Development Managers – to assist our retail broking Partners in developing new revenue opportunities and supporting them with the placement of both common and complex risks.” 

Canopius announces the appointment of Sean Redden as Underwriting Counsel for its Specialty division, with a specific focus on Credit and Political Risk. This is a new London based role, which reports to Bernie de Haldevang, Head of Specialty.

AXIS Insurance has announced the appointment of James “Jay” Hamilton to the newly created role of Global Head of Accident and Health Insurance. In his new role, Hamilton will lead AXIS Insurance’s Accident and Health business in both the US and international markets. He will be based in Chicago and will report to CEO Peter Wilson.

 

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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