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General Insurance Newsletter Friday 3rd April 2020

03 Apr 2020

Trilogy Managing General Agents has been sold by R&Q MGA to ReSolution Underwriting Holdings for an undisclosed sum. Trilogy stated that the deal would not result in any changes to its business and noted that it will continue to be led by managing director Chris Blackwell. The MGA, which specialises in Material Damage, Liability, Commercial Combined, Contractors and Terrorism insurance, added that it will also be retaining the same Lloyd’s and company market carrier support. It further promised that brokers will see “the same business appetite and responsive service” as before.

The AA has published a trading update ahead of its full-year results. Unaudited figures show that the group’s revenue increased 2% from £979m for the year ended January 2019 to £995m for the year ended January 2020. Over the same period, profit before tax more than doubled, jumping from £53m to £107m. Turning to its insurance business, the AA stated that it had experienced 19% growth in Motor policies and 2% growth in Home policies. The number of Motor policies rose from 731,000 to 869,000, and the number home policies ticked upwards from 830,000 to 844,000.

Chubb is currently investigating allegations that its systems were breached by ransomware. TechCrunch first reported claims by ransomware group Maze that they had stolen data from the insurer. The publication had been tipped off by an analyst at security firm Emsisoft. No data has yet been released by the group apart from the email addresses of three executives, which are publicly available online. Chubb was unable to confirm which regions of its operations were affected by the possible breach.

Xenia Broking Group, the independent broking arm of insurance intermediary holding company Nexus Group, has completed its acquisition of Howden UK Group Limited’s Trade Credit business. The deal sees Howden UK Trade Credit head Stuart Grice come onboard Xenia, which will integrate the acquired operations with its regulated entity Credit Risk Solutions. Commenting on the completion of the transaction, financial details of which were not disclosed, Xenia Chief Executive Tim Coles stated: “The acquisition of Howden’s Trade Credit business has added a highly complementary client portfolio and client service team to Xenia."

Aon Plc – which will become the world’s biggest brokerage when its swoop for Willis Towers Watson is finalised – has completed the move of the jurisdiction of incorporation for its parent firm to Ireland. The transfer saw each issued and outstanding Class A ordinary share of the England-incorporated public limited company exchanged for one Class A ordinary share of the new Irish-domiciled entity. The latter retains the Aon Plc name. Class A ordinary shares of the new parent firm began trading on the New York Stock Exchange on April 01, under the same “AON” symbol under which the UK shares were previously traded. “Aon will maintain the firm’s operating company headquarters at the Leadenhall Building in London,” stated the company last October, “and the firm’s commitment to the UK and the important London insurance market remains unchanged and unrivalled.”

PIB Group has acquired a book of business from Cheshire-based independent financial adviser Avidus Scott Lang (ASL) as part of a reciprocal arrangement made when the insurance intermediary group bought the employee benefits division of Sanlam Wealth Planning UK earlier this year. The ASL deal, which does not involve any employee transfers, relates to commercial clients for group life assurance and group income protection.

The Supreme Court overturned previous rulings that Barclays Bank was vicariously liable for sexual assaults the late Dr Gordon Bates, an independent contractor, may have perpetrated against patients while carrying out medical examinations on behalf of the bank.

Saga has shared unaudited financial results as part of a trading update. Revenue at the group fell 5.2% to £797.3m for the twelve months ended January 2020 (restated 2019: £841.5m). Saga reported underlying profit before tax as £109.9m for the year (restated 2019: £180.1m). However, losses after tax nearly doubled from £162.2m to £312.8m over the same period. Both years were heavily affected by impairments of goodwill in excess of £300m. No dividends are expected to be paid for the financial year due to the “uncertain implications of Covid-19”. The group expects to publish audited figures on 9 April, in line with the Financial Conduct Authority’s moratorium on full financial results.


Coronavirus-related News

The Chartered Insurance Institute (CII) has published a guide for members explaining the types of financial support available to businesses following the coronavirus outbreak. The guide includes explanations of accessing the different support schemes, advice on applying for support, and breakdowns of the eligibility criteria. Guidance for businesses seeking support via deferring VAT and income tax payments, employers paying sick pay to employees, firms planning to access the Coronavirus Job Retention Scheme and larger firms seeking the Covic-19 Corporate Financing Facility is offered. There is also an explanation of the new Self-Employed Income Support Scheme (SEISS).

Insurtech UK has signed an open letter to the Chancellor calling on the government to provide relief measures for start-ups in relation to the Covid-19 pandemic. The insurtech body joins fellow signees Coadec, Innovate Finance, TechUK, UK Tech Cluster, Tech Nation and Tech London Advocates. Insurtech UK stated it believed the letter “forms a positive start for discussion with the government”.

The Association of British Insurers (ABI) has issued a reply to a letter from the Treasury Select Committee, which questioned the trade body’s response to the coronavirus outbreak. A spokesperson for the ABI stated that the body is addressing the questions raised in the letter and will be responding to the committee. The spokesperson said: “The insurance industry recognises this is a very difficult and worrying time, and Insurers are doing all it can to help and support customers. “This includes Travel Insurers expected to make record payouts of £275m to people who have had their travel plans ruined by coronavirus, industry commitments to ensure fair and prompt service standards to customers, including waiving the requirement to inform your Insurer if using your car for volunteering and ensuring drivers are not penalised following suspension of vehicle MOT testing.”

Oliver Wyman’s insurance team has warned that insurers will need to “carefully consider” how they handle business interruption claims in relation to Covid-19. The management consulting firm admitted that there is wide expectation that claims in this area may be limited as most businesses are not covered for pandemic risks and many policies require infectious conditions to be named. However, it added: “There is increasing pressure in many countries from governments, regulators, industry bodies, and consumer groups for claims related to business continuity to be covered under exceptional conditions."

The Secretary of State for Business, Energy and Industrial Strategy, John Glen, has confirmed that the majority of organisations won’t have purchased the right cover to claim for business interruption amid the coronavirus outbreak. MP Caroline Lucas asked the following question in the House of Commons: “To ask the Secretary of State for Business, Energy and Industrial Strategy, if he will make it his policy to require insurance companies to define Covid-19 as a notifiable disease for the purposes of claims made by businesses affected by the Government’s order to close; and if he will make a statement.”

Brokers have criticised Insurers for not being helpful when it comes to looking after clients in light of the coronavirus outbreak. Natalie Goodson, Director at Peterborough-based Broker Robert J Goodson, commented that the Insurers she had been in touch with had not shown any flexibility or intention to work with policyholders to help them through the crisis. She commented: “I don’t think they’re seeing the bigger picture here – this is a national and a world problem and Insurers need to be working with their customers wherever they can to try and facilitate them staying in business. “If they can’t afford to keep going the nsurers have no premium either.”

Insurance brokers are being unfairly maligned by MPs and the press over business interruption payouts. British Insurance Brokers’ Association  (Biba) Executive Director, Graeme Trudgill, commented: “The industry is getting hammered by MPs and the press over business interruption.” Biba said that that the Chancellor of the Exchequer, Rishi Sunak’s, announcement (18 March) that BI cover would pay out following the government’s recommendation (as oppose to an order) for businesses to close did cause some confusion among businesses. Sunak was not confirming all BI payouts would kick in, he was explaining that businesses with the correct pandemic cover would see their policies activate. The industry as a whole has been criticised for its response to BI.

Graeme Trudgill, responded by addressing the big question around business interruption and Covid-19. "Coronavirus has led to some of the most challenging times for our members and their clients. The BIBA team has been dealing with hundreds of enquiries ranging from BI cover to engineering inspection, to unoccupied properties and payment holidays." He also commented on the future of pandemic coverage moving forward "Insurance is a mutual pool of funds that pay for the losses of the few, from the premiums of the many.... Pandemics, by their unpredictable, unforeseeable nature.... do not follow the ‘losses of the few’ principle. That is why they are not easily covered in a standard insurance market business interruption policy....  Maybe innovation will be part of the answer with solutions such as parametric insurance or perhaps we need a move, as we have seen over the years, to something akin to the world-leading pooling models that have developed in the UK. Should ‘Pandemic’ be considered a fundamental risk, mostly outside of the insurance market? Should shared industry/ government models be considered? Alternatively can the market pick this up?"

Research from data insight specialist Consumer Intelligence has revealed that people are more likely to have heard from fast food companies and their gym than their insurance company during the ongoing coronavirus crisis. Banks were almost twice as likely than Insurers to have pro-actively got in touch with their customers. The sector that comes out on top for communication, despite facing huge challenges with supply chains and delivery services, is supermarkets. 84% of the 1,013 respondents who are responsible for buying groceries say they have heard from their supermarket in recent times.

Lloyd’s has reassessed the focus of its Future at Lloyd’s strategy for Q2 2020 as it deals with the “unprecedented challenge” of Covid-19, according to CEO John Neal. Speaking on a call with the media, Neal said: “It would be inappropriate to be spending high sums of money in the face of economic challenges and in a time where the market is operationally under strain. “We’ve narrowed our focus into the areas that will make the most difference in 2020 and 2021.”

In these unprecedented times we all need to do our bit, and many Insurers have been stepping up to the plate. The latest to do so is Markerstudy, which is looking to aid the nation’s true heroes – its batch of NHS volunteers. The company has announced a partnership with Vision Vehicle Solutions, the credit hire and intervention hire company which is part of the Markerstudy group – it will see Vision provide replacement vehicles to Markerstudy policyholders to fill the shortage of courtesy cars available since the outbreak of COVID-19.


Manchester-based commercial broker RBIG Corporate Risk Services has appointed Warren Dickson as its Non-executive Chair, stating that it is gearing up for growth. Dickson is former Chief Executive Officer of Chase Templeton, the private equity backed private health insurance specialist since acquired by The Ardonagh Group. Prior to that he worked as Managing Director of Fish Insurance, a specialist disability Broker which he joined after leaving Carole Nash Insurance Consultants where he was sales & marketing director. RBIG stated that in his new role Dickson will draw on his broad experience to advise RBIG’s board on its growth and marketing strategies.

Russell Scanlan has strengthened its Nottingham team with the appointment of a new Private Client Account Handler. The firm, which is based in Wellington Circus, has hired Darren Swinson as part of its continuing growth plans. The Broker noted that Swinson has almost 30 years’ experience working in the private client insurance sector, having previously worked at JRT Insurance in Nottingham. 

Jamie Chambers has joined Towergate Insurance Brokers’s Cardiff office as an Account Executive. The broker noted that Chambers has worked in the insurance industry for 23 years. He joins Towergate from Marsh Commercial, formerly known as Jelf Insurance Brokers, where he spent 8 years.

DNA Insurance, based in Romford, has appointed Ben Rose as Sales Director and David Hambridge as Commercial Director. MD Danny Imray commented: “Both these guys have been truly loyal soldiers to DNA, they been with us through the good and the bad times and are really great people, I am so pleased for them that after all the hard work, dedication and loyalty that have shown that it’s now been rewarded with the ultimate of promotions."  

Jensten Group is delighted to announce the appointment of Kevan Aubrey as Sales and Distribution Director for Jensten Wholesale which currently comprises Policyfast and City Underwriters. He was previously part of the commercial executive team at LV and more recently Blocksure UK Insurance Managing Director and joined Policyfast and City Underwriters in March 2020. Aubrey brings with him over 30 years in the insurance industry, working with UK Brokers, where he held senior sales, distribution and marketing roles within companies including LV, RBS, NIG and Aviva group of companies.

esure founder Sir Peter Wood has stepped down as Chairman and from the company board with immediate effect. esure stated that Wood’s decision follows the completion of the company’s £1.2bn takeover by Bain Capital in 2018. Wood founded Esure back in 1999. Following his departure, he will retain a shareholding in the firm. Following the search for a successor the Board is delighted to announce that Andy Haste will take over as esure’s Chairman.  Andy currently serves as the Senior Independent Deputy Chairman of Lloyds of London where he chairs its Remuneration Committee, Investment Committee, Technology and Transformation Committee, and Capacity Transfer Panel. He is also a member of Lloyd's Nominations and Governance Committee.


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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