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General Insurance Newsletter Friday 31st May 2019

30 May 2019

Insurance News

Primary-Group owned Rural & Commercial Holdings (RCH Group) has acquired Precision Partnership (PPL), a specialist MGA incubator and insurance provider, for an undisclosed sum. Tim Smyth, CEO of RCH Group, commented on the move: “The complementary skills and products of Precision will help Rural Insurance, One Commercial and Binnacle insurance services expand their product offerings to their loyal Broker base, continuing the growth these businesses are experiencing.” A statement also explained that One Commercial Specialty, previously known as Precision Underwriting UK, is now an appointed representative of One Commercial. With offices based in Harrogate and London, One Commercial Specialty offers Brokers access to Professional Indemnity and Directors & Officers insurance.

Aviva’s new Chief Executive, Maurice Tulloch, is to split the firm’s UK business into two parts after indicating that he wanted to “bring greater energy, pace and commercial thinking to Aviva”, according to reports. In news revealed by the Financial Times (FT), Aviva’s UK business could be divided into life and non-life business as part of a restructure reversing its 2017 decision to merge its two main businesses. The FT detailed that Maurice Tulloch who became the Insurer’s Chief Executive Officer in March, will update Aviva’s investors on his plan for the firm.

In other news...The Aviva Future Leader Programme started in 2018 with 20 Brokers committed to developing their skills to get them boardroom-ready. With industry support from mentors such as Ian Donaldson (Autonet) and Paul Chainey (Miles Smith) the programme quickly caught the attention of other Brokers wanting to join and fast track their development. In January 2019 a new wave of Brokers joined the two-year course. Aviva are committed to supporting industry talent and offer training to independent Brokers. Since last year they have been working with the CII to gain industry recognition for the programme. 

The Insurance Age Insurance Cares campaign and Insurance United Against Dementia (IUAD) have joined forces again to develop three pledges the insurance industry can sign up to in order to help the most vulnerable customers. Three key actions include: sign up to the Insurance Day of Giving, commit to making your people Dementia Friends and become a more dementia friendly business through Dementia Friends. IUAD/the Alzheimer’s Society and the CII have teamed up to produce specific guidance for businesses to better support people affected by dementia. Commit to reading the guide and letting the IUAD know how it is being used and the changes that are being made. The Insurance Day of Giving, developed by PIB’s Group Broking and Placement Director and InsureTrek18 participant, Andy Tedstone, takes place on 7 November and last year saw the insurance sector come together to raise further funds for dementia research using a variety of methods including bake sales.

Insurtech UK, the body set up to represent the InsurTech sector has announced a number of new members meaning that 50+ organisations are now part of the alliance. The body listed new members as including Aviva, Broker Direct and the Chartered Insurance Institute (CII). Niall Barton, Co-Founder of start-up Wrisk and Chair of Insurtech UK commented: “We are delighted to introduce our new partners and associate members to our ecosystem. It has been really encouraging to see so many businesses out there who share our ambition to radically improve the insurance experience for consumers and to permanently change the reputation of the insurance industry."

A-Plan has purchased the business books of Exeter-based Westward Counties Insurance Services and Glastonbury-located Acer Risk Services for an undisclosed sum. Carl Shuker, CEO of A-Plan, confirmed that both deals went through earlier this year, with the business books moving to local A-Plan offices. Three of the Westward staff joined A-Plan. Acer had no staff and, after selling the book, the principal now works for A-Plan four days a week. Shuker stated that the business now has a network of 94 branches nationwide, although he denied any particular focus on the South est as it seeks to buy further businesses throughout 2019.

William Dewsall-owned Hogarth Underwriting is to go into voluntary liquidation according to documents filed on Companies House and will now be subject to a creditors’ voluntary liquidation. Companies House was notified of the decision of 21 May. The move comes nearly a year after administrators from Begbies Traynor were appointed to the company on 24 May 2018. The administrators warned in this report that payments to unsecured creditors will be “significantly less than the 100p in the £ stated in the initial proposals”.

CFC have announced the launch of new Cyber platform. The provider claimed that the platform will allow Brokers to instantly access CFC’s Cyber insurance products. These products cover cybercrime, privacy liability and breach notification. At the beginning of the year, CFC added Business Interruption to its range of Cyber products. Graeme Newman, Chief Innovation Officer at CFC, said: “CFC’s new platform truly revolutionises the process, greatly increasing efficiency for all parties”.

The latest available figures from the Association of British Insurers show that the total cost of dishonest insurance claims detected in 2017 was £1.3bn. This poses a major challenge for the industry and ultimately leads to steeper premiums for honest customers. The techniques used to perpetrate fraud are constantly changing, requiring the industry to continually evolve its approach to detection and deterrence. Zurich’s recent investment in NetReveal software is a major step forward in the fight against insurance fraud and is set to bring big benefits for Brokers and customers. The NetReveal software platform uses complex algorithms and data analytics to uncover individuals trying to hide their identity and avoid traditional detection techniques, flagging activity for further investigation by claims investigators and analysts. Not only does the NetReveal system identify links between entities and flag suspicious claims patterns, it uses probability algorithms to predict the likelihood that a claim is fraudulent – enabling claims analysts to prioritise investigation and helping to remove false positives identified by the system.

In further news...With motor theft payouts in the UK up more than 20% in the first quarter of 2019 and keyless technology cited as among the drivers of car crime, AXA Insurance is calling on automakers to step up. “The cost of car theft claims is rising but that trend can and must be reversed,” said customer Claims Director John Dacey in a statement following the release of payout figures from the Association of British Insurers (ABI). “Car buyers and owners are increasingly aware of the risks associated with keyless technology and they often take the right steps to protect their vehicle. We welcome those individual actions. But motor manufacturers must now up their game and ensure their vehicles are less exposed to hacking.”

Dr Tom Philp, Manager, Science in the Science and Natural Perils function at AXA XL Insurance & Reinsurance has discussed bridging the gap between science and insurance this week. "Our role is to accumulate and assess relevant scientific data and research, in order to help Underwriters define how much, and which science should be used in assessing, pricing and underwriting risk. The languages of science and insurance are distinct and often highly technical. Fortunately, being in-house means we are able to play an important role in bridging the gap between these two worlds, so that we can progress ideas and thought leadership through to practical implementation."

International General Insurance Holdings Limited (IGI), the international specialist commercial Insurer and reinsurer, has become a member and network partner of GBN Worldwide, the global insurance network of Insurers, reinsurers, independent Brokers and specialty suppliers. The GBN Worldwide network will allow IGI to place business in over 140 countries and transact international business anytime, anywhere and in every language. GBN will also provide access to markets across the world’s disparate regulatory regimes and adhere to compliance and service standards. The partnership will support and enhance IGI’s clear and focused vision of growth in new and existing markets.

New research from Premium Credit, the UK’s leading premium finance company, shows that two out of three Broker firms plan to increase training for staff this year even though they are already exceeding the minimum required by regulators. Its study among insurance professionals found 65% expect a rise in training this year with 26% expecting the amount of training to increase significantly. 58% expect a rise in Continued Professional Development (CPD) training specifically for premium finance over the next two years. The expected increase comes even though firms are already investing heavily in training – average budgets for training increased by around 29% last year partly in response to the Financial Conduct Authority making CPD training a regulatory requirement in 2018 for all insurance professionals with a minimum requirement of 15 hours a year.

Brexit has been responsible for yet another negative report, this time a survey by business insurance expert CNA Hardy. The Insurer’s most recent global risk confidence report has found that confidence levels of UK businesses were at only 36%, the lowest in the world. By contrast, Asia-Pacific had the highest levels of confidence, at 65% over the survey period which was from May 2018 to May 2019. Dave Brosnan, CEO of CNA Hardy, explained that while there were global trends, business confidence was one area where local variations did occur. “In an increasingly complex, tech-led, interconnected global economy, business leaders are being tested like never before,” said Dave Brosnan, CEO of CNA Hardy. “The result is that confidence has dipped, investment in business fundamentals is down across the board, and reputation risk has emerged as the new threat that stalks the corridors of power.” There is a clear divide between the East and West in terms of business confidence, according to CNA Hardy’s 2019 Global Risk & Confidence Survey. Optimism has fallen among executives leading European, UK and North American businesses, while it continues to rise in the Asia-Pacific region. The drop in business confidence in Western economies was driven by a sharp fall in Europe, from 70% to 50%, according to the study. Asia-Pacific is the only region to see a rise in business confidence in the last six months, up 23% to 65%.
Children’s charity James Hopkins Trust has been declared the winner of a £10,000 grant from Lansdown Insurance Brokers, which this month held its inaugural Lansdown Giving charity luncheon in Cheltenham. Nine finalists, meanwhile, received a combined £5,000.

New research from Cover Genius has found that claims payment delays are the biggest culprit when it comes to insurance customer dissatisfaction. In fact, 35% of policyholders point to the time it takes to receive compensation as “the worst thing” about making an insurance claim. More interestingly, the study showed that 36% find chasing payments stressful but trudge on while 10% feel so stressed that they give up. So how long of a wait are we talking about? According to the insurtech, customers wait an average of 10 and a half weeks to get compensated following an insurance claim.

While anyone getting behind the wheel is required to have insurance, the reality is there will always be those who choose to be on the wrong side of the law. However offenders, according to data from the Driver and Vehicle Licensing Agency (DVLA), aren’t as many as they used to be. Releasing the numbers from a freedom of information request to the DVLA, RAC Insurance said there were 79,713 motorists who were caught by a Police Officer using a vehicle uninsured against third party risks last year. In 2017, the figure stood at a whopping 118,698. RAC Insurance also shared details from previous years, noting that 2012 saw 108,616 offences; 2013 – 108,486; 2014 – 102,417; 2015 – 92,804; and 2016 – 113,502.

London-headquartered HSBC Holdings Plc, whose profit after tax in the first quarter grew 31% to US$4.9 billion, is keen to grow even bigger. Earlier this month the British group reported strong growth in Asia where revenue climbed 7% in the first three months of 2019. Now, according to Reuters, HSBC is looking at boosting not only its retail wealth management workforce in the region but also its insurance distribution and product offerings. In particular, the banking and financial services holding company wants higher numbers in Singapore, Hong Kong, and mainland China.

New kid on the block Pikl, which was brought to life in 2016 by a small team of experienced insurance professionals, has gained the backing of industry bigwig Sir Peter Wood. The Esure and Direct Line founder led Pikl’s £2.5 million seed/pre-Series A funding round. Pikl is the trading name of Norwich-based sharing economy insurance specialist Inlet Insurance Services Limited, which is led by Chief Executive Louise Birritteri.

Broker Network, which has Mind among the third sector organisations it is supporting this year, has raised money for the mental health charity through the Pedal for the Medal event. The fundraising initiative involved spin bikes, Broker Network’s head office reception in Knaresborough, and about 440 miles.

Brokerage giant Marsh has revealed some surprising findings in its 2019 Terrorism Risk Insurance Report, which looks globally at threats in the past and today. “Ebbs and flows in Terrorism are common, but the evolving and ever-present nature of this risk requires people and organisations to be continuously on guard,” the report stated. Some of these ebbs and flows show that the number of attacks worldwide has fallen to a low not seen since 2011, but this does not mean that industries can rest on their laurels.

LexisNexis Risk Solutions has identified that 1.3m policies were cancelled in the past year, after analysing data from its Motor Policy History platform. This is 32% of all new policies written, and the business said the cancellations data represents over 90% of the personal lines Motor insurance market. LexisNexis explained that Brokers can use the platform to improve their Motor quotation process and help them identify the policyholders that have had a cancellation in the past. According to the company, these customers present a higher risk of future cancellation, higher claims cost and potential fraud. A spokesperson for LexisNexis said that this can potentially save a Broker with around 100,000 policies in its book between £125,000 and £375,000 a year.

Uber has partnered with digital Managing General Agent Inshur to offer insurance services to its drivers. The service is fully digital and the Inshur app provides a one-stop-shop for Uber’s drivers. Drivers can log in using their Uber ID, scan their licences, select a policy and pay for it – all within the app. David Daiches, co-founder at Inshur, said: “We have built a data-driven technology platform, secured insurance capacity with a trusted global Insurer and are scaling our business in New York and the UK.”

The Financial Services Compensation Scheme (FSCS) has revealed it is in the process of paying out a total of £6.9m to Alpha customers following the unrated Danish Insurer’s collapse. The payments are being issued to 9,000 commercial taxi policyholders who were insured by Alpha via UK Brokers through its Managing General Agent, Capital Underwriting Agency. The FSCS has previously transferred 177,000 GAP policies formerly with Alpha, after working with the Danish Guarantee Fund and Premia Solutions to secure alternative cover. Alpha was declared bankrupt in May 2018 and policies expired on 11 August 2018.

Allianz UK is to acquire 100% of Legal & General Insurance Limited, the general insurance business of Legal & General Group Plc for £242 million. The transaction is subject to regulatory approvals. Allianz UK to buy out the remaining 51 percent stake in LV General Insurance Group (LV GIG) for up to £578 million from Liverpool Victoria Friendly Society (LVFS). The transactions, which are expected to be completed by end of 2019, will: position Allianz as the *number 2 general Insurer in the UK with a 2018 combined gross written premium income of £4,029 million and a market share of 9 percent, establish Allianz as a top 4 insurer in the UK personal home segment and mean 12 million general insurance customers are now part of Allianz in the UK.

Keychoice, the insurance distribution business owned by SSP Limited, has partnered with Howden, one of the UK’s leading independent insurance Brokers, to be the preferred provider of Professional Indemnity Insurance (PII) for Keychoice members. As well as access to an exclusive, tailor-made PII policy, Keychoice members will also automatically get access to a number of extra services to help run their businesses. Howden has one of the largest and most specialised Professional Indemnity teams. Its reputation has been established over many years of supporting an extensive range of clients from sole practitioners to some of the UK’s largest firms. 

NMU gives its run down of a very successful BIBA Conference 2019 and highlights the launch of their new CyberSafe product. "Our biggest highlight from this year’s conference was the ability to launch our new CyberSafe product at such an important event. We’ve developed this product with Brokers and their clients in mind, so to be able to launch and discuss this new offering with brokers at the event was an invaluable opportunity. Matt Drinkwater, our Cyber & Financial Lines Underwriting Manager, was on our stand for the full two days, introducing the features of CyberSafe."

Senior figures from across the insurance industry gathered recently to support Hand Of, a charity designed to benefit disadvantaged schoolchildren across the UK. Alongside a presentation from the charity’s CEOs, the event also featured Headteachers of some of their partner schools, guests from the Parliamentary Archives, and some beautiful music from some of Hand Of’s artists.


Market Movers and Shakers

Robert Kuchinski has been named Zurich’s Head of Commercial Insurance for the UK. He joined the company in 2017 as Global Head of Property and Energy and prior to working there he was Head of International Property at Allied World and has also worked in several roles at AIG’s Property and Energy business. Kuchinski brings over 30 years of experience to his new position which became available as a result of Vinicio Cellerini’s internal move to become Global Head of Customer and Distribution Management, Commercial Insurance.

Lockton’s Birmingham team has hired Jane Baron as Head of Office. Jane has worked in the industry for over 25 years. Previously, she worked in client management at Marsh and Willis Towers Watson. The appointment marks the next step in Lockton’s strategy of growing its local and national customer base. Lockton noted it is particularly focused on growth in its key sectors, including food and beverage, retail, transportation and real estate.

ERS introduces High Risk Product Manager Dave Burnet, "It’s been a few months since I was appointed as Product Manager for the high risk team, so I’ve had a good opportunity to get my feet under the table. I’m responsible for managing the financial performance of ERS’s high risk proposition and setting out our appetite for the year ahead."

To support its continued success, seven new Associate Directors have been appointed by Alan Boswell Group. Four of the seven will continue to work within the general insurance side of the business - Nigel Brown, James Monkhouse, Zoe Kerswill and Mark Davenport. Sally Key and Tony Robinson have progressed within financial services, while Lee Boswell has a remit across the group.

One of the biggest names of the past in the UK insurance industry has landed a top job outside the industry. Mike Rogers, previously the CEO of LV= (known at the time as Liverpool Victoria), has been named Chairman of the world’s largest credit check company Experian having previously held the role of Independent Non-Executive Director. He moves into the position previously occupied by Don Robert who announced his intention to depart last year. Also a Non-Executive Director of the Royal Bank of Scotland Group, Rogers is well-known in insurance circles having spent 10 years at the helm of Liverpool Victoria on the back of 20 years at Barclays. He joined the Insurer back in 2006, departing at the end of 2016 and at the time said he was moving on because he felt the timing was right.

AXIS Capital Holdings has announced the appointment of Kelly Isikoff as Chief Information Security Officer (CISO). In her new role, Isikoff will oversee the company’s information security strategy and partner with its business segments and global Cyber and Technology unit to provide advice to its clients and business partners. She will be based in New York and report to Keith Schlosser, AXIS Capital global Chief Information Officer.



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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