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General Insurance Newsletter Friday 3rd August 2018

03 Aug 2018

Insurance News

Toredo, the web-based platform launched earlier this year for the transaction of specialised Trade Credit insurance, has underwritten its first risk. According to the London Credit Consortium – a partnership of Liberty Specialty Markets, Canopius and The Channel Syndicate – Toredo was utilised for its first risk in June 2018 and now has a developing pipeline of transactions. The London Credit Consortium provides capacity to the platform.

Autoglass BodyRepair, the mobile body-shop repair specialist, has announced a new three-year contract with Covéa Insurance.

Chubb’s UK and Ireland claims team has been awarded chartered Insurer status by the Chartered Insurance Institute (CII). The Insurer’s underwriting teams for Accident & Health and for Property & Casualty in the UK and Ireland already have chartered status. According to Chubb, achieving chartered status allows all members of the claims team to access the CII’s technical, market and regulatory research.

Average comprehensive Car insurance premiums fell by 2.7% in the second quarter of 2018 according to the latest AA British Insurance Premium ‘Shoparound’ Index. The benchmark calculated that the average now stands at £648.10 down 10.8% from the all-time high of £726.93 at the end of the second quarter last year. The research looks at an average of the five cheapest quotes across price comparison sites, direct and Broker quotes for typical customers in a fixed nationwide basket of risks.

Some Insurers are reviewing if they will use the British Insurance Brokers’ Association’s (BIBA) new standardised terms of business agreement (Toba) which was launched last week. At the time of the launch BIBA said that widespread use of the template would deliver a “massive reduction in workload on all sides”. However, none of the providers contacted gave a firm commitment to using the document or offered a timeline for when this could happen.

Hiscox UK and Europe has reported gross written premiums (GWP) of $610 million [£464.8 million] for the first half of 2018, a 19% rise on the $510.5 million achieved at the start of 2017. The division delivered $65.5 million of pre-tax profit in keeping with the same period the year before, however the Insurer flagged that without the effect of currency movements, it achieved a 15% increase to $68.9 million. Likewise the combined operating ratio worsened to 87.5% when including the impact of foreign exchange or improved to 86.8% when the effect was stripped out.

In other news...Robert Childs, Non-executive Chairman of Hiscox has confirmed the business is poised to reach one million retail customers in 2018 with half coming through the Brokers and half through the direct channel. In particular, they are predicting a Cyber and Security policies expansion in 2018. 

Jelf’s results for the full year (2017) have revealed the cost of its Clark Thomson acquisition as £23.3 million cash. Jelf, which was itself bought by Marsh in 2015, purchased the Perth-based business in order to gain a better slice of the insurance business in Scotland.

Specialist MGA Arnott Marine has launched a Cargo and Stock Throughput product aimed at the UK wine industry. According to the provider the cover has been designed to help small and medium sized independent insurance Brokers win and retain business in the sector.

Direct Line Group has rolled out enhanced staff benefits including a lifestyle leave of up to 12 months in order to pursue activities such as travelling and volunteering. Announcing the launch of new policies for its workforce, Direct Line Group said they were developed to provide staff with support and flexibility. The lifestyle break, for instance, may be used for re-training or extending maternity leave.

Jardine Lloyd Thompson Group (JLT) saw its revenues grow 3% during the first half of 2018, the firm has revealed in its interim results. The broking group’s total revenues grew to £713.5 million in the six months ending June 30, with the board declaring an increased interim dividend of 12.7p per share for the period. Reported profit before tax decreased by 9% to £89.4 million, which JLT said reflected the “exceptional costs” of its global transformation programme.

Sciemus reveals new name and CEO. Announcing major changes including a rebrand, the Lloyd’s MGA said it will now be known as Occam Underwriting. The new name was taken from the principle called “occam’s razor,” whose premise is that the most straightforward solution is the best one when it comes to solving problems.   

NFL star is to collect loss-of-value payout from Lloyd’s of London. Philadelphia Eagles offensive lineman Chance Warmack has become the first NFL player in history to collect on a loss-of-value insurance policy. An ESPN report states Warmack, aged 26, took out an insurance policy with Lloyd’s of London that would allow him to cash in if his second contract with the NFL was less than US$20 million (about £15.3 million).

In other news...after a tough year that saw Lloyd’s of London experience a £2 billion loss followed by recent news that CEO Inga Beale is stepping down, the company is now reviewing its operations, according to a report from Reuters.

FM Global, the global Commercial and Property Insurer, has announced a new addition to its Board of Directors. David Walton, President and CEO of Caterpillar Financial Services, the financial products arm of American Fortune 100 corporation Caterpillar, has joined FM Global’s 12-member board, bringing a broad background in international operations and finance to the board, said Thomas Lawson, Chairman and CEO.

Arthur J. Gallagher (AJG) has revealed a 59% leap in its overall net earnings for the quarter ended June 2018. Registered net earnings for the broking arm hit US$128 million, compared to US$82.4 million for the corresponding period last year.

What used to be an exclusive Allianz staff event is now open to walkers and runners worldwide. Taking place between July 26 and October 24, the 2018 Allianz World Run not only encourages recreational physical activity, but will also raise funds for the SOS children’s villages. Participants signing up on may run for one of the following regional teams: Africa, Asia-Pacific, Europe, North America and South America.

Insurance Broker IFM announces relocation. With its sights set on significant growth, Sheffield-based insurance Broker IFM is on the move. The company is switching its 30-strong team across to a new office at Parkway Works on Kettlebridge Road today – this after more than 30 years at its previous location in Broomhill.

PartnerRe sees huge slide in net income. With unrealised investment losses on fixed income securities of $312 million, PartnerRe Ltd has taken a massive hit to its net income available to common shareholders for the first half of 2018.

British Gas; part of Centrica and Homelyfe, the insurTech startup and recent winner in the 2018 Top 100 Start-ups Index, are the latest insurance providers to select Premium Credit as their premium finance supplier. The strategic partnerships allow customers to quickly and efficiently acquire insurance cover with the option to pay in installments, all at the point of sale, through the use of ground breaking technology and digital integration.

Lycetts Insurance Brokers has been awarded chartered status by the Chartered Insurance Institute (CII). The Newcastle-headquartered firm which has 15 offices in the UK said it achieved the accolade having “demonstrated the highest standards of professionalism, capability and ethical practice”. According to the firm there are fewer than 200 Brokers nationwide with the chartered title.

Manchester-headquartered Principal Insurance has reported a 63% rise in turnover to £6.12 million for the year ended 31 October 2017. The Motorcycle, Van and specialist Car Broker stated that it had achieved strong organic growth across all its main lines of business. According to the firm, gross written premium for the year rose by 50% to over £15 million.

The Financial Conduct Authority (FCA) will have spent around £4 million by the end of this financial year to ensure it is compliant with the General Data Protection Regulation (GDPR). A Freedom of Information (FOI) request showed that as of 1 May 2018 the regulator had already spent £1,842,401.40 getting ready for the new rules that came into force on 25 May.

In further FCA news, they have declared new rules will come into force around customers seeking premium finance from 1 November 2018. As of the start date providers will need to make a reasonable assessment of a customer’s ability to repay affordably, which goes above and beyond a credit check. Both Premium Credit and Close Brothers Premium Finance (CBPF) claimed that they were ready for the changes.

Global Risk Partners (GRP) has bought a majority shareholding in DCJ Group Insurance and Risk Management (DCJ), for an undisclosed sum. DCJ is based in Chesterfield, Derbyshire and the deal has received regulatory approval. This follows GRP-owned County Group’s purchase of Guardian Insurance Brokers.

Sabre Insurance has reported increases in underwriting profit and profit after tax for the first six months of 2018. The Motor specialist revealed that underwriting profit increased 13% to £32.2 million as profit after tax also rose, by 12%, to £25.8 million. The provider’s combined operating ratio for the period also improved to 68.6% from 71.7% in the same period of 2017. Sabre’s priority is a combined operating ratio (COR) of at most 75% not gross written premium growth (GWP), according to Chief Executive Geoff Carter. Carter was speaking as the provider unveiled its first set of results since becoming a listed company.

Aston Lark has bought Maidstone-Broker Michael James Insurance and Property Services for an undisclosed sum. The Broker, which specialises in the Care sector and Real Estate, will see Partners Ian Andrew and Michael Allbutt remain with the business for a period of time to ensure a smooth transition. Staff for the Broker, which has around £2.5 million in GWP, will move into Aston Lark’s Maidstone office in the coming months.

Insurance and reinsurance firm DARAG has entered into an equity commitment agreement with Aleph Capital and Crestview Partners, providing equity funding of up to €260 million to support growth plans for the business.

All is well over at London-based Seventeen Group. Announcing its financial results for the year ended December 31, 2017, the privately owned insurance business has its subsidiaries to thank i.e. James Hallam Limited, Touchstone Underwriting and 4Sight Risk Management. Overall, the group saw its revenue rise by £3.8 million in 2017, with approximately £500,000 coming from acquisitions and the rest attributed to organic growth across the three firms. Up from £12.6 million in 2016, Seventeen Group reported £16.4 million in revenue for the period. Earnings before interest, taxes and amortisation (EBITA) grew to £2.32 million in 2017, from £1.59 million the previous year.

Clyde & Co has released its Insurance Growth Report mid-year update and it shows only one region failed to outnumber its previous mergers and acquisitions figure. In the first half of 2018, Europe managed to complete 59 insurance M&A deals – a drop from the 65 recorded in the second half of 2017. Globally, there were 186 deals completed in the latest six-month period, in what appears to be a sustained climb.      

Office 365 email accounts are increasingly being attacked by cyber criminals according to new data released by specialist Insurer Beazley. It highlighted that emails accounted for 23% of incidents reported to its breach response services team during the second quarter of the year and that organisations using Office 365 were hit the hardest.

GRP-backed Lloyd’s Brokers Lonmar Global Risks and Ropner Insurance Services have confirmed that the two businesses have merged. They will maintain the Ropner brand for Marine business and use the Lonmar brand for Non-marine business. The combined business now operates from the same location in Mark Lane, London, where 120 staff members will work.

NIG, the Broker-only commercial Insurer arm of Direct Line Group, has seen its share of policies fall in the first half of 2018. It posted policy numbers of 245,000, down on the 248,000 reported for the first six months of 2017. The decline came as Direct Line for Business (DL4B) increased its policy count by 7.3% to 485,000 (H1 2017: 452,000).

Co-op Group has appointed Fenchurch Advisory Partners in a bid to sell its general insurance division, Co-op Insurance, for around £300 million, according to a report from Sky News. That article stated that the Co-op has already approached prospective buyers, however, no concrete decision has been made about whether the group will definitely sell the insurance business.

The Chartered Insurance Institute (CII) has opened the application process for its next round of the New Generation Group. The organisation said it was “seeking rising stars from across the profession” to join the 2018/2019 class of its talent programme. It has committed to taking on 40 professionals from broking, claims, underwriting and the London Market.

Brokers using SSP can now access Pukka’s new Commercial Vehicle offering. SSP noted in a statement that the Gibraltar Managing General Agent, which launched in 2016, had designed the policy for commercial vehicles based in the UK (excluding Northern Ireland) and that it offered comprehensive cover for vans up to £50,000.

ICB Group will be joining the Verlingue group on 1 August 2018. The move triples Verlingue’s size in the UK market and takes the wider group up to £130 million of premium with 170 employees and five locations.

Axa UK and Ireland has seen its revenue go up to £2.5 billion for the first half of 2018, from £2.4 billion in the same period in 2017. Interim results showed that underlying earnings also increased to £145 million (H1 2017: £113 million). The combined operating ratio improved to 97.2% from 98.4%. According to Axa the growth was partly driven by its commercial division which saw revenues rise to £730 million from £690 million the previous year. Bertand Poupart-Lafarge, CFO and interim CEO of Axa UK and Ireland has stated that much of the growth for Axa UK and Ireland was driven by its commercial division, mainly through Broker distribution and schemes.

Robertson Low, a Lloyd’s Broker which operates in London and Dublin, has partnered with software house Open GI in order to grow its presence in the wholesale and retail markets. Previously the business used its own bespoke technology system.

American International Group (AIG) and The Carlyle Group (Carlyle) have entered into a strategic asset management relationship with DSA Re, through which they plan to position DSA Re as a standalone platform to provide solutions for insurance liabilities around the world. AIG established DSA Re in February 2018 as a Bermuda-based, composite Re-insurer of its legacy insurance portfolio, consolidating its non-core insurance lines under a specialised team with expertise in run-off. The firm currently reinsures US$36 billion of AIG’s legacy life and annuity and general insurance liabilities. It has a diversified risk portfolio, strong claims operation and efficient administration capabilities, which AIG hopes to scale with Carlyle’s backing.

Allianz Legal Protection’s (ALP) list of law firm Partners has just become longer. Announcing its newest after-the-event (ATE) insurance deal, ALP said it will provide the product as part of a link-up with specialist medical negligence law firm Enable Law. The latter joins the likes of EAD Solicitors, Tozers Solicitors, Lime Clinical Negligence Solicitorsand Forster Dean Solicitors.

Largely thanks to adverse weather, RSA saw declines in both its group operating profit and underwriting profit for the first half of 2018. From £222 million in the same period last year, underwriting profit fell 23% to £171 million. Group operating profit of £304 million, meanwhile, represents a 15% slide from 2017’s £360 million.





Market Movers and Shakers

Airmic announces changes to its Board. With Lynda Lucas stepping up to chair Airmic, Tracey Skinner has taken the vacant position of Second Deputy Chair alongside Tim Murray. Paul Goulding, having completed his year in office, remains on the board. Former Airmic Chair Helen Hayden has retired by rotation after nine years in post. 

Tokio Marine HCC has announced that Susan Rivera has been appointed its next Chief Executive Officer effective September 1, 2018. She replaces Christopher J.B. Williams, the Company’s current Chief Executive Officer, as he transitions into a new role as Managing Executive Officer and Co-Head of International Business for Tokio Marine Holdings.

In other news...Tokio Marine HCC has announced the appointment of Luc Reuter as Head of Surety for Continental Europe as it further expands its international Surety capabilities within Continental Europe and beyond.

Leading Legal Expenses and Assistance provider ARAG has appointed Chris Morter to the important role of BTE Underwriting Manager. He is a Chartered Insurer and President of the Insurance Institute of Bristol.

The CEO of Ageas UK, Andy Watson has been appointed as the new Chair of the ABI’s General Insurance Council (GIC). The GIC sets the ABI’s strategic direction on issues of interest to the general insurance market. Andy will also join the ABI Board.

RKH Specialty has announced the appointment of Deborah Duss as a Divisional Director in its Marine, Energy and Construction practice. Deborah joins the company from Swiss Re, where she was Senior Underwriter in the Renewables Product Hub, a multi-line role that required an understanding of all aspects of risk at every stage of construction, operation or decommissioning. 

Renovation Insurance Brokers, the specialist MGA which provides insurance and consultancy services for high value residential and commercial renovation and building projects today announce the appointed Stuart Rickett. Stuart 46, joins the existing underwriting team based in London and was formerly the lead unoccupied Property Underwriter at Camberford Law. 

THB, the specialist insurance and reinsurance Broker, today announces enhancements to its UK regional sales team with the appointment of two new Business Development Managers - Chris Fozard and James Harris - effective immediately.

Markerstudy has given the newly created Chief Operating Officer (COO) role to Dan Fiehn who was formerly Head of IT at the provider.

Patrick Jordan, who started his insurance career in 1991 at Steamship Mutual P&I Club, is now Divisional Director for Marine at Ed.

Coverys Managing Agency CEO Robin McCoy announced the appointment of its Chief Information Officer and Chief Technology Officer. Effective immediately Robert Scott-Stewart assumes the role of CIO while CTO Peter Chambers comes on board in October. 

Specialist Insurer Markel International has bolstered its Liability team, tapping Simon Engelen to serve as Senior Marine and Energy Liability Underwriter.

Rick Welch, CEO of Occam (previously Sciemus) has resigned. The former AEGIS executive, who came to Sciemus in 2015, will be pursuing other activities after nearly three decades in insurance. Lance Gibbins, who has been Chairman and acting Co-CEO, will become Occam Underwriting’s Chair and Chief Executive. 

Announcing the expansion of its Casualty team, the UK insurance arm of Barbican Insurance Group has snapped up Manchester-based Keith Irwin from Beazley. The 22-year insurance veteran is tasked with developing Barbican Protect’s specialty Casualty portfolio focusing on the rail and automotive sectors. Meanwhile, in London, Deanne Rogers is also appointed as Development Underwriter. With over a decade of insurance experience, Rogers joins from Clegg Gifford and will be in charge of underwriting and developing the firm’s standalone Casualty product. 

Italian insurance giant Generali, which will have a new organisational structure in September, has named the replacement for its departing group Chief Financial Officer. Generali said group CFO Luigi Lubelli is leaving in order to pursue “other professional challenges.” Replacing him is Generali France CFO Cristiano Borean, who will become a member of the group management committee next month.



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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