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General Insurance Newsletter Friday 3rd May 2019

02 May 2019

Insurance News

Danish provider Gefion Insurance A/S has been ordered to re-publish its 2017 annual report and half year report for 2018 with supplementary and corrective information. The Danish Financial Supervisory Authority (DFSA) made the order earlier this month and stated that the restated accounts should refrain from recognising a minor deferred tax asset. A statement on Gefion’s website showed that the provider, which is unrated, “does not agree with the decision”.

A survey by Which? has revealed the best and worst Insurers for handling claims in the Home and Motor Insurance sectors. The consumer organisation surveyed 2,111 Car Insurance customer and 1,456 Home Insurance customers who had made a claim in the past two years, asking about the claim and how satisfied they were with their insurer and the overall experience. The AA was rated worst in the Car Insurance space, with customers complaining about lack of communication on the progress of claims. Meanwhile Axa was the second worst, followed by Hastings Direct and Allianz.

The average cost of Motor insurance has dropped to its lowest level since 2017, slipping to £466 for Q1 2019 according to the Association of British Insurers (ABI) latest Motor Insurance Premium Tracker. The ABI claimed the survey is the only assessment to look at the price consumers actually pay for their cover instead of quotes.

The British Insurance Brokers’ Association (Biba) has launched an intellectual Property Insurance scheme with Specialist Underwriting agent Opus Underwriting. According to Biba, the scheme offers competitively priced intellectual Property Insurance to companies with products, brands and know-how to protect from competitor predators and infringers. The cover is also designed to help businesses defend themselves should they inadvertently infringe on others’ styles and copyright.

Allianz is in advanced talks to buy Legal & General’s general Insurance business. The business, which provides Personal Lines, Home and Pet Insurance, was put up for sale by L&G in December last year, with a reported price tag of £300m. According to the report, Allianz has emerged as the frontrunner to buy the business after beating off competition from other Insurers, including Direct Line Group.

In other news, Allianz has put 97 people under the threat of redundancy as it looks to close its Woking and Luton branches. The Insurer said that changes to local market dynamics and the need to evolve in a competitive environment are the key drivers behind the decision. Allianz detailed that employees in both offices have been briefed and the business will now enter a 45 day collective consultation process to discuss the proposals. It is anticipated that 49 employees in Woking and 48 employees in Luton will be put at risk of redundancy. The 97 redundancies proposed by Allianz as it looks to close its Woking and Luton branches will be Commercial roles. Simon McGinn, Allianz General Manager, Commercial & Personal, confirmed that the job cuts would hit Commercial staff only.

A fraudster has been jailed after he lied about being ill or injured to make several fraudulent Travel Claims for the same family holiday, amounting to a total of £19,225. On Friday 6th April 2019, Richard Agyemang, 36, of Islington, was sentenced at Inner London Crown Court to 16 months in jail. A few weeks earlier (Friday 5th April 2019), he’d been found guilty of four counts of fraud by false representation after a five-day trial at the same court.

Axa UK will be launching a new operating model for Claims in June to focus on customer service. After an in-depth review, the insurer has decided to remove non-core activity from operational areas, allowing them to concentrate on claims handling efficiency. The aim is to improve claims experience and customer satisfaction. The new model builds on the changes announced in March, when two operational business areas were created (Motor & Travel Claims; and Property & Casualty Claims) alongside four Centres of Excellence (Claims Technical Services; Claims Operations; Claims Risk, Fraud & Complaints; and Claims Transformation).

In other news, Axa UK has put 125 Claims staff at risk of redundancy as it seeks to “remove non-core activity from operational areas”. The Insurer claimed this approach would help the business to concentrate on Claims Handling efficiency. Axa stated that the redundancies would come across six Claims sites and anticipated a smaller net reduction of about 40 jobs once the consultation is concluded.

Azur Underwriting Limited, the Managing Digital Agent, has selected ARAG to provide both legal protection and home emergency assistance for its new Smart Home Household product which is aimed at ‘emerging wealth’ clients and has been designed to help brokers compete with direct providers. The Smart Home product is a comprehensive Home Insurance offering that the Azur broking community can access through the Azur Hub, a self-service platform built to automate quotation and policy issue, while significantly improving the user experience.

Arkwright Insurance, an award-winning insurance broker with more than a decade of experience of delivering truly personal, customer-focused Insurance services, has joined forces with one of the UK’s leading Insurance comparison platforms, Quotezone.co.uk, to bring its Home Insurance offering to an even wider group of tenants and homeowners. Founded in 2006 and headquartered in Bolton, Greater Manchester, Arkwright Insurance’s track record of outstanding performance and exceptionally high levels of customer service helped the firm win a prestigious Broker of the Year award from the British Insurance Brokers' Association (BIBA).

Lloyd’s have unveiled a fresh strategy with a number of initiatives designed to transform the market. According to Lloyd’s the proposals are focused on delivering higher quality Risk Protection for the market’s customers. They also offer ways to simplify access to the global Insurance market, together with lowering costs of doing business at Lloyd’s. The publication of this strategy marks the next phase of wide-ranging consultation and blueprint development involving Lloyd’s unique ecosystem of market participants, customers and other stakeholders.

The world’s oldest Insurance market is set to publish its blueprint for its future next month and brokers are set to be at the centre of those plans. New Lloyd’s CEO John Neal has said the market has created its prospectus for a “braver new world” which will provide the options for the new shape of the 300-year old insurance institution. Already there is talk of a new system which will allow syndicates to bring new products and business into the market quicker and more efficiently. It has also raised questions around providing greater access to the market.

In other news, as the world increasingly embraces automation, it forces Underwriters to adapt to a new risk environment. However, Insurers themselves are leveraging the capabilities of Artificial Intelligence (AI) to remain competitive, improve processes and increase efficiency, according to two new reports from Lloyd’s. The report identified four risk areas for AI: trust and transparency, ethics, security and safety. As AI becomes more complex, Cyber breach impacts are more likely to become larger. Meanwhile, ambiguity and legal uncertainty is contributing to unanswered questions around who is ultimately liable when something does go wrong. However, AI also provides business opportunities for Insurers, as any company offering algorithm-based systems to data-rich companies might seek to insure against the risk of the algorithms returning incorrect decisions.

NFU Mutual, the only UK-headquartered company on the latest roster of Gallup’s Great Workplace Awardees, is again being recognised… this time for how it handles Home and Car Insurance Claims. According to the exclusive research, NFU Mutual emerged as the best for both Home and Car Insurance Claims for the second consecutive year. It is followed by LV=, Churchill, Direct Line and M&S Bank for home; and by RSA, LV=, Direct Line and Co-op for Motor.

Major reinsurer SCOR has announced its first quarter financial results, with Chairman and Chief Executive Denis Kessler pointing to a “strong start” to the year even with the reduction in the firm’s group net income. While the Paris-headquartered enterprise posted a net income of €131 million (around £112.9 million) for the first three months of 2019, the figure actually represents a 21.1% decline from last year’s €166 million (around £143.17 million). Without the revisions for Japanese typhoons, the latest net income would have been €169 million. Gross written premium, meanwhile, went up 5.7% from €3.77 billion in 2018 to €3.99 billion this time around. Annualised return on equity (ROE) stood at 9%, which is lower compared to last year’s 11.2%. Shareholders’ equity for the period rose 1.7% though, to €6.28 billion.

The Brit Cyber Attack Plus (BCAP) offering is now stronger than ever. Launched more than half a decade ago, the pioneering product is now packed with new features, including increased limits. The proposition is the combination of first and third-party Cyber coverage and protection against physical damage and Business Interruption brought about by Cyberattacks.

London-headquartered Aon Plc has released its financial results for the first quarter of 2019 – revealing positive changes in terms of revenue, operating income and net income attributable to shareholders. The global professional services firm enjoyed US$3.1 billion (around £2.39 billion) in revenue for the first three months of the year, with the total amount signifying a 2% rise from the figure posted in the same period in 2018.

Marsh & McLennan Companies (MMC), the name behind Marsh, has reported its financial results for the first quarter of 2019, noting an improvement in its performance for the period. According to MMC president and CEO Dan Glaser, the company “delivered strong growth in underlying revenue and profitability” in Q1 2019, with double-digit adjusted earnings growth and adjusted margin extension in MMC’s Risk & Insurance and consulting businesses. MMC’s underlying revenue growth was 4%, while adjusted operating income increased 11% during the quarter. The adjusted margin rose 210 basis points to 26.2%, a release revealed.

In other news, it has been just over one month since Marsh & McLennan Companies, the name behind Brokerage giant Marsh, completed its $5.6 billion acquisition of Jardine Lloyd Thompson Group plc (JLT). April 01, 2019 will be remembered as the day that two Brokerage juggernauts became one. It’s the equivalent of celebrity super couple Brad Pitt and Angelina Jolie finally becoming Brangelina in 2005 … just without the pop culture portmanteau. The mega merger was first announced in September 2018 – and as huge corporate combinations go, the transition has been reasonably smooth so far, according to Martin South, president US and Canada, Marsh, and Pat Donnelly, Marsh JLT specialty leader, US and Canada.

Private equity group Apollo Global Management has emerged victorious in the arbitration case involving two of its former employees who are now part of Insurance venture Caldera Holdings. Imran Siddiqui, one of the two people who formed the new company, was described by the arbitration ruling as a former “very important partner” at Apollo who, by 2016, was working on what ultimately became Caldera ahead of his resignation in early 2017. Caldera came to life in July of that year.

Arch Insurance (UK), part of Arch Insurance International, is set to expand into the Cyber Insurance market with a product designed specifically for SMEs and their Brokers. According to Arch the product, Cyber Searchlight, focuses on delivering the assistance SMEs need immediately following a Cyber event. In the event of a Cyber Claim, app-based notifications and online help will be available, allowing businesses to continue with a minimum of disruption, supported by a wide panel of service providers.

Insurance Age has officially launched its largest and brightest Broker Expo event. Taking place at the Ricoh Arena in Coventry on 7 November, the day is predicted to see more than 1,000 Brokers attend and Brokers can register now to secure their place. The event, which is free for brokers to attend, offers access to 130+ exhibitors from across the insurance spectrum.

The Financial Services Compensation Scheme (FSCS) has announced its levy for 2019/20. FSCS will levy firms £532m this year, £16m more than it forecast in its Plan and Budget 2019/20 in January. Picking out figures for General Insurance distribution, the figure is actually lower than forecast at £12m, down from the £13m predicted in the Plan and Budget.

Insurer, MS Amlin has unveiled a new Digital Trading solution to add to its service for its agricultural Motor Insurance Brokers and clients. The firm said that the platform will offer full-cycle functionality and a quick quote option that can provide quotes in less than a minute. It stated that its Countrywise Insurance product and Claims solutions have been designed with the rural community in mind, offering cover for rural businesses and private clients, it includes cover for Cars, Commercial Vehicles, Horseboxes, Harvesters etc.

QBE has introduced live chat to its e-trade platform, FastFlow, in a move to help Brokers respond to clients faster. The provider stated that live chat will initially be trialled on five products – Minibus, Mini Fleet, Business Combined and Cybercrime – with the intention of adding it to other products soon. According to QBE, it has already launched live chat on various Broker platforms last year and in the last 12 months the SME team has handled 7,900 chats.

Green Insurance Group, Global Risk Partners’ (GRP) South East hub, has bought Eastbourne-based Reid Briggs Insurance Brokers and Clifton Morley Associates, based in Welling, Kent. GRP took a majority stake in Bexhill-based Greens in June 2017 and the broker has since bought specialist Marine Broker Collidge & Partners. According to GRP, Reid Briggs was established over 50 years ago and offers both Personal and Commercial Insurance, primarily in the East Sussex area.

Abbey Legal Before The Event Services (BTE) has become Markel Legal Expenses Insurance. The BTE insurance provider was acquired by SME-focused insurer Markel for £116.5m in 2014 and its legal policy has been underwritten by Markel since then. Markel says the rebrand adheres to its campaign to offer a range of specialist services under one banner.

Cavendish Munro has bought Eastbourne-based Professional Insurance Agents (PIA) for an undisclosed sum. Cavendish Munro was itself purchased by Global Risk Partners (GRP) in 2016. It is the first acquisition for the business since joining the GRP stable.

The Chartered Insurance Institute (CII) has redesigned its Corporate Chartered proposition for the Insurance and Financial Planning profession after a consultation with the industry, consumers and public bodies. The organisation said that the priority of this update is a shared commitment to professional expertise from the CII and firms with Chartered status. According to the CII, the Chartered Ethos now focuses on a joint pledge to encourage knowledge, focus on clients and serve society.

AIG Europe Limited (AEL), the European entity of American International Group, Inc. that restructured on December 1, 2018, reported a pretax profit of £59.5 million for the twelve months to November 30, 2018, up from a loss of £431.5 million the previous year. Net Premium Written fell to £3,787.0 million (2017: £3,919.7 million) reflecting a decision to focus on core areas of growth. Financial Lines saw a 7% increase in Net Premiums Written, offset by a decline in Property, where premiums fell by 17%. The loss ratio improved to 73.1% (2017: 82.5%) driven by a careful focus on risk selection and targeted reinsurance cover. The underwriting result improved to a loss of £131.3 million (2017: loss of £569.9 million). Operating expenses were significantly lower at £1,392.7 million (2017: £1,527.3 million). Positive Underwriting performance and strategic risk selection combined with lower catastrophic losses led to an improved combined ratio of 103.4% (2017: 114.6%).

Insurance brokers can now have more informed Risk discussions with their education clients with the launch of a new risk-profiling report from Ecclesiastical Insurance. Developed in collaboration with the education sector, the Risk Tracker Report draws on Ecclesiastical’s over 55 years of experience insuring education establishments and the expertise of its In-House Risk Management team.

Covéa Insurance is pleased to announce it is extending its partnership with John Lewis Finance. It has been appointed on an exclusive basis to provide the retail brand’s customers with competitive 5-star Defaqto-rated Motor Insurance, backed by its award-winning Claims service, independently accredited by the Institute of Customer Service.

Erskine Murray – which earlier this year was awarded Chartered status by the Chartered Insurance Institute – has completed another purchase following its swoop for Offley Insurance and Asciak Holdaway Merritt. It features Independent Insurance Broker Houghton Insurance Bureau, which is led by Chartered Insurance practitioner Duncan Smith.

Former Aon group president Steve McGill has made ties with a world-class team of Insurance Executives to launch McGill & Partners, a major new Specialty Risk Solutions business. The team has partnered with global private equity firm Warburg Pincus to launch McGill & Partners, which is geared towards strategic Risk placement for Corporate clients with complex Insurance requirements. It will be headquartered in London, UK, and will have a centre of excellence in New York.

The Royal London Mutual Insurance Society Limited, the UK’s largest mutual Life Insurance and Pensions company, is selling one of its subsidiaries to the tune of £4.8 million. Upon completion, most likely within the month, the all-cash deal will see XPS Pensions Group Plc become the new owner of RL Corporate Pension Services Limited (RLCPS). As part of the transaction, 46 RLCPS employees will transfer to the XPS office in Edinburgh. RLCPS provides Actuarial, Consulting, and Administration services to 150 defined benefit Pension schemes which cover 8,000 scheme members.

Commercial property Insurer FM Global is looking to expand its Boiler and Machinery Engineering team. This year FM Global intends to recruit more than 60 seasoned Engineers particularly for Boiler and Machinery-related risks – bringing the number of its Engineers dedicated exclusively to major equipment such as boilers, turbines, generators, transformers, chemical vessels, compressors, and pulp-and-paper processing machines to over 250. The growing unit will focus on risk improvement priorities such as serving new industries; adding new risk assessment metrics; and broadening the industrial control systems service.

Tesla is planning to launch an Insurance program through State National Insurance Company, a subsidiary of Markel Corporation, according to Seeking Alpha. This follows news from last week that Tesla Chief Executive Elon Musk had told analysts that the company is set to unveil a “compelling” Car Insurance product, which could be launched later in May.

New for 2019, BiB Underwriting has just launched their specialist Motor Breakdown Cover which is provided by AA and DAS.  Their product includes a comprehensive range of cover as standard, whilst allowing the client to pick and choose which vehicles require protection.

Market Movers and Shakers

Willis Towers Watson has announced that Christophe Meurier will assume the role as Global Head of Financial Solutions, with effect from 1st July 2019, succeeding Paul Davidson in that capacity. Paul will continue as the Chairman of Financial Solutions. Christophe joins Willis Towers Watson's after 25 years with BNP PARIBAS where he held senior roles as the Head of Insurance Solutions within Corporate and Institutional Banking as well as Chief Executive Officer of the BNP PARIBAS Political and Credit Risk Insurance Company, GreenStars. He holds an MBA in Financial Studies from the University of Nottingham and a degree in Business Management specialised in Finance from the Paris Business School EDC.

In other news, Willis Towers Watson has announced that Tammy Richardson will take on the role of UK and Ireland Leader for Life and P&C in the company’s Insurance Consulting and Technology business. Richardson most recently served as Leader of the UK P&C team within the same business.

MS Amlin, the leading global (re)insurer, has announced the appointment of Iain Pearce to the role of Chief Financial Officer. Iain will join the business on the 3rd June 2019, forming part of the Executive Team and reporting to Simon Beale, CEO. The role is subject to regulatory approval. The appointment follows a series of strategic senior hires made by the business over the past 12 months to further strengthen MS Amlin’s Leadership Team. Iain joins from Old Mutual plc, the FTSE100 Financial Services Group, where he held a number of Senior Finance positions over a 15-year tenure. Most recently, Iain held the position of Finance Director, reporting to Old Mutual plc’s Chief Executive. Having trained with KPMG for the first 10 years of his career, Iain has led a number of large transformation projects and strategic initiatives and brings a wealth of experience to MS Amlin.

Jonathon Gray, who came onboard Allianz Insurance in 2010 through the company’s Underwriting Graduate Scheme, has been tapped to serve as Motor Manager in Manchester. Formerly the branch Motor Manager for Woking where he managed a team of 10 Underwriters, Gray will now be in charge of all of Allianz’s Motor Underwriting activity in Manchester which the firm described as a key region. There he will be focused on sustaining profitable growth while having responsibility for the team’s training and technical development.

Liberty Specialty Markets (LSM) has given its Specialty Binders team in London a boost. Effective immediately, Kerry Hall and Richard Wheeler are promoted to Property Underwriting Manager and Senior Business and Strategic Development Underwriter, respectively. The two previously served as Senior Underwriters in LSM’s Property Binders unit. Hall, who has been with the Specialty and Commercial Insurer for a decade, will be in charge of managing the Property Binders team as well as developing its portfolio. Meanwhile Wheeler, who came onboard in 2008 and will now take on a newly created role, has responsibility for the development of Coverholder business.

Stephen Catlin, the name behind Catlin Group which was sold to XL Group in a $4.1 billion deal back in 2015, has now returned to Insurance circles launching Convex Group alongside Paul Brand, another former Catlin executive. The company has been launched on the back of receiving $1.8 billion of initial committed capital and will draw down $1.6 billion to commence its business – with access to further capital as it expands. It has already picked up an A- (Excellent) rating from AM Best and has regulatory approval in London and Bermuda.

EC3 Brokers announces the appointment of James Murphy to the newly-created role of head of broking. Murphy joined on 1 May from Integro and will be responsible for expanding EC3 Broking’s Marketing activities and developing new partnerships.

SchemeServe, a leading provider of technology solutions for Insurers and Intermediaries, has announced the appointments of an additional UX Developer and a Scheme Tailor. Andrew Swan has been appointed Scheme Tailor. A web Developer with nearly 10 years’ experience in the Insurance industry working for companies including Equity and IGO4 Partners, Andrew uniquely combines Insurance knowledge with excellent Developer skills. He joins latterly from Colchester Borough Council.

Rightpath Insurance SolutionsHelen Prendergast and Jane Hastings have recently been promoted to General Manager and Claims Manager, respectively.
Specialist Insurance Broker Shepherd Compello has announced the launch of a new Entertainment Team led by Nic Miles and David Bishop. Their primary focus will be Entertainment Risks associated with Live Touring, Sports, Theatrical Productions and all other staged events.
CLS Risk Solutions, a leading MGA for Legal Indemnity and Transactional Property Risk Solutions, has announced the appointment of Tom O’Connor as CEO of the CLS group, including CLS Risk Solutions (CLS RS).

RSA has hired Kay Martin as its new UK Personal Lines Managing Director, joining the provider from Ardonagh. Martin will replace David Coughlan, who is leaving the Insurer along with Chief Operating Officer Darren McKenzie and Chief Financial Officer for UK & International (UK&I) Matt Hotson. According to RSA, Martin will be responsible for the development of its Personal Insurance business, which specialises in Home, Motor and Pet Insurance distributed through direct brand More Than and Personal Broker and Affinity Partnerships.

There’s a new entertainment team at Shepherd Compello. Announcing the unit’s launch, the specialist Insurance Broker said the team will be led by Nic Miles and David Bishop, whose combined 70-year experience was described as unmatched. Risks associated with live touring, sports, theatrical productions, and other staged events will be the team’s primary focus.

 

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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Market Movers and Shakers

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