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General Insurance Newsletter - Friday 3rd November 2017

03 Nov 2017

Market News

Insurance Premium Tax (IPT) raises up to £4.8bn a year for the government according to a report from the Social Market Foundation (SMF). The study, The Impact of Insurance Premium Tax on UK households, found that IPT, which has been increased a number of times in recent months, now costs the equivalent of £179 for each UK household. Around £89 is directly paid by households with the remainder coming from increased costs to businesses feeding through to consumers. The Association of British Insurers (ABI), which commissioned the report, responded to the results describing the tax as unfair and called for a halt to the increases.

The Financial Conduct Authority (FCA) has published its latest consultation into the Financial Services Compensation Scheme (FSCS) fees paid for by financial services firms. The watchdog has made a number of proposals following the initial consultation process. As part of this the regulator discussed options for moving some life businesses into the general insurance fee class.

The Bank of England believes 75,000 roles in financial services could be lost following the UK’s exit from the European Union. According to reports, the Bank is using the figure as a “reasonable scenario” which would be particularly relevant if the UK exits the Union without a deal in place. It was noted that many jobs could move to the continent. It is unclear how many of the roles would relate to insurance.

With less than a year left before the European Union introduces General Data Protection Regulation (GDPR), Minister of State for Digital Matt Hancock has revealed that Insurers are seeking access to details of data breaches reported to authorities, in order to “accurately price cyber risk.”

The traditional two touchpoint insurance model is poised for major change amid an increasingly connected world, according to an analyst at business school INSEAD. In a recent article published on the school’s website, INSEAD Entrepreneur-in-residence Sangeet Choudray said Insurers and clients in the current model only interact twice – at the time of sale and at the time of claim. However, Insurers have started shifting into a different direction as they seek to fill the data gap between the two touchpoints.

Axa has set up a training programme for young Brokers aimed at helping them to prepare for the future of the insurance industry. The programme is set to feature two three day seminars in Paris on 2 to 4 April and 12 to 14 November 2018 and, according to the provider, forms part of the wider Axa strategy of developing industry talent and making the company more resilient for the future.

The SME insurance market witnessed a sharp decline in 2016 following four years of growth, a recent study by Research and Markets has revealed. SMEs spent 22.7% less on insurance. Gross written premiums fell 9% from 2015 to £6.4bn with the report suggesting slower economic growth and uncertainty over Brexit may have stoked the decline as SMEs spent less on insurance, fewer businesses opened, and liquidations increased. The market particularly suffered from a drop in the number of companies with five to nine employees.

Hiscox is teaming up with Symantec to launch a software and insurance solution meant to protect small businesses. Described as a complete cyber offer, it packages insurance along with software and 24/7 technical support to meet the needs of small businesses. It includes: security software, 24hr IT support and financial reimbursement from the costs of a data breach.

The Head of the Philippines’ insurance regulator has said Prudential Guarantee and Assurance (PGA) will file a complaint against Marsh UK “very soon” over alleged illegal operations in the country. Earlier this year, the regulator revealed it had received a letter from PGA’s Counsel requesting a probe over accusations that Marsh unlawfully solicited a client in the Philippines. It was reported in Manila Times, that PGA Lawyer Jose Bernas accused David Jacob, Head of Marsh Singapore, of presenting a reinsurance package to a Philippine firm on behalf of Marsh UK, which would assume all insurance risks through a “fronting Insurer.”

The primary insurance arm of reinsurance giant Munich Re is looking to offload two key life insurance books, according to reports. It was reported that Ergo wants to sell the life insurance books of Victoria Leben and Ergo Leben, with the paper quoting two sources “familiar with the matter.” It was also reported elsewhere, that a decision will be made on indicative offers – and then the company will decide whether their six million insurance policies will be sold or not.

Aon has bought Leeds-headquartered Henderson Insurance Broking Group for an undisclosed amount in a deal expected to complete in December. The arrangement brings 16 offices and over 400 employees into Aon along with over £300m of gross written premium. As well as general insurance, Henderson also has offerings across health and benefits and trade credit insurance.

Global Risk Partners (GRP) has taken a majority stake in Alan & Thomas Insurance Group for an undisclosed sum. Poole-headquartered Alan & Thomas specialises in commercial and HNW insurance and according to a statement from GRP writes £30m of GWP annually. Divisions of the Broker include Property Owners, Motor Trade, Agriculture and Estates, Aviation, tTansportation, Construction, Marine Trades, High Value Personal Lines, Churches, Charities and Private Medical and Employee Benefits.  All the current management team will stay with the business. Mike Bruce, CEO Broking at GRP, has confirmed that the business is looking to make bolt-on acquisitions following its deal. According to reports, Bruce said “We want to invest in the business and help it grow by a further extension of our hub and spoke model. We’ve identified some bolt-on acquisitions that we are looking to make.”

Minority Venture Partners (MVP) has invested in Borehamwood-based Heath Crawford & Foster. MVP, which is backed by Peter Cullum, confirmed that it will support the business whilst the management team continue to run the company. The Broker offers both commercial and personal lines listing specialisms as including Investment Property insurance, Fleet, Household and High Net Worth cover.

Jeremiah Grossman, Chief of Security Strategy at end point security software developer SentinelOne has said that while Cyber insurance is essential, the current market is one whole mess as there are no benchmarks for the policies, and both buyers and sellers are doing it all wrong. He stated “Every policy that you’ll read – and I’ve read probably a hundred of them now -- is different” and suggested “what I think the Insurers will do is start hiring security sales representatives and teach them enough insurance to sell to the CISO in that channel".

Insurance Broker Towergate/Dawson Whyte has reportedly moved to new headquarters in Belfast after amalgamating two other offices in the Northern Ireland capital.

Proposals by Lord Justice Jackson to extend fixed recoverable costs (FRC) in civil litigation claims are likely to take until 2019 to go through, according to Terry Renouf, a Consultant at law firm BLM. One of the potential issues that the industry could see as a result of the plans, which constitute a “significant change to the process of assessing costs,” is a spike in claims, according to the lawyer.

Fidelis Insurance has revealed the launch of its first MGA. Known as Radius, it will focus on niche Speciality Treaty Excess of Loss business including Cyber, Nuclear and PA Retro. The MGA, which begins writing business from 1st November, two months earlier than originally planned, will be headed up by Rob Ashton who makes the switch from Hiscox Re where he was Head of Specialty.

Former Transactor Global Solutions founder and Chief Executive, Ray Vincent, has confirmed his focus will now be on restructuring specialist insurance technology provider i-Wonder. Vincent left his CEO role at Transactor on 2 August this year, following the acquisition of the software house by Open GI. As part of the i-Wonder restructure, Vincent stated he would be setting up a new company focusing on voice technology. In addition, the holding company will change its name to i-Wonder Solutions Group Holdings.

Touchstone Underwriting has partnered with BNP Paribas Personal Finance to offer Brokers an insurance premium funding solution. According to the managing general agent which is part of the Seventeen Group, the new offering will be flexible and cost-effective. It is due to be launched at the Broker Expo in Coventry on 9 November.

Leading specialist loss adjuster QuestGates has announced that it continues to be recognised for its exceptional customer service by leading customer experience agency, Investor in Customers (IIC). The new IIC Gold Award, which replaces the previous 3-star accolade, is awarded to organisations that demonstrate excellence in four key areas: understanding clients, meeting their needs, delighting them and creating loyalty. 

Market movers and shakers 

Liberty Specialty Markets (LSM) has swooped for Jennie Beard who will take on the new role of Senior Underwriter – War and Terrorism.

RSA has announced that Jeroen den Tex has joined the firm as Commercial Director, Europe 

CNA Hardy has appointed Stuart Middleton as their new Head of Small Businesses as it embarks on an “ambitious plan” to transform the way it works with such firms.

Barbican Protect Ltd, the UK insurance arm of Barbican Insurance Group, has announced the promotion of David Burridge to Property and Package Underwriting Manager.

The Health Insurance Group has appointed David Prosser as Head of Proposition Development.

CNA Hardy, a leading specialist commercial insurance provider for clients within the Lloyd’s and company markets, is pleased to announce the appointment of Stuart Middleton as Head of Small Business. 

Liberty Specialty Markets (LSM), part of Liberty Mutual Insurance, has appointed Jennie Beard to the new role of Senior Underwriter – War and

Data and technology-driven insurance specialist, Hood Group has announced that Moyo Akala has joined the team as Data Scientist.

Open GI is pleased to announce that Martyn Holman is joining its leadership team as a Non-Executive Director from 1st November 2017.

ERS, the largest specialist Motor insurance syndicate in Lloyd’s of London is pleased to announce that Declan O’Mahony has joined the business as Head of Large Loss Claims.

Jackson Lee Underwriting has appointed two new senior Business Development Managers to its team. Damian Frampton joins as Business Development Manager for the South and Danny Buxton as Business Development Manager for the Midlands.

AXA Insurance has named Terri Driscoll-Cooper and Darren Tanner as the new Branches Managers of Ipswich and Reading respectively.

Ripe, the insurtech specialist behind some of the UK’s most successful niche insurance brands, has expanded its team once more with the appointment of Chris Watters as Digital Manager and Lee Clark as Business Analyst. 

All information provided in this Market Digest has been gathered from multiple Insurance Media sources and individual company press releases.

Meet our specialists General Insurance team here.

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