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General Insurance Newsletter Friday 5th April 2019

05 Apr 2019

Insurance News

Huw Evans, Director General of the Association of British Insurers, has stated that he simply does not accept some of the suggestions about the Cyber insurance market made by insurance governance consultancy, Mactavish. Last week Mactavish Chief Executive Officer Bruce Hepburn called on the ABI, Insurers and Brokers to guarantee that eight common flaws that the firm had found in Cyber insurance policies will never be used as reasons to refuse pay-outs on Cyber insurance claims in an open letter. In a letter to Hepburn, Evans stated that the ABI believed Mactavish has “fundamentally misinterpreted” how Cyber insurance is provided as a product offering.

The Financial Conduct Authority has published final instruments and guidance for firms that will apply in case of a no deal Brexit. This follows its policy statement outlining near-final rules, which was published in February 2019. The regulator explained that most of the rules have been made under powers given to the FCA under the EU (Withdrawal) Act and have been approved by the Treasury.

In other news… The Financial Conduct Authority has begun regulating the claims management industry from 1st April 2019. All claims management companies (CMC) in England, Wales and Scotland will now have to demonstrate that they meet and maintain minimum standards set by the regulator. The FCA added that all CMCs will need to apply to the watchdog for authorisation.

Specialty Managing General Agent Fiducia Underwriting has launched a new Combined Liability Product. The MGA said the product is targeted at a broad scope of trades including: air conditioning Engineers, builders (including working at height), Electrical Engineers, Mechanical Engineers, Metal Fabricators, Plant Hirers, Precision Engineers, Skip Hirers, Ventilation Contractors to Window Cleaners. It is also aimed at the SME market, but the business noted it is willing to look at bigger risks.

Marsh & McLennan Companies has completed the acquisition of Jardine Lloyd Thompson Group (JLT) for $5.6bn (£4.3bn) on the 1st April 2019. According to MMC, the combined company places annual premiums of more than $100bn globally. JLT also brings more than 10,000 staff to MMC, with JLT CEO Dominic Burke joining the business as Vice Chairman and a Member of the Executive Committee. However, the takeover has also put 3,750 jobs in danger.

American International Group, Inc. (NYSE: AIG) has announced that its Board of Directors has nominated three new Director candidates for election at AIG’s 2019 Annual Meeting of Shareholders. The nominees, who will join ten current Directors standing for re-election, are: Peter R. Porrino, former Executive Vice President and Chief Financial Officer of XL Group Ltd, Amy L. Schioldager, former Senior Managing Director and Global Head of Beta Strategies at BlackRock, Inc. and Therese M. Vaughan, former CEO of the National Association of Insurance Commissioners and the Robb B. Kelley Visiting Distinguished Professor and former Dean of the College of Business and Public Administration at Drake University.

QBE Insurance Group published its new Energy Policy, to provide shareholders, customers and the wider community with a clear explanation of the Group’s approach to investing in and underwriting energy projects, now and into the future. Group CEO, Pat Regan, said the Policy makes clear QBE’s support for the objectives of the Paris Agreement and underscores the Group’s commitment to acting on climate change, while supporting its customers in the transition to a lower carbon future. 

Nexus Group has combined its broking activities under one umbrella. Creating Xenia Broking Group Limited for the consolidation, the insurance intermediary said the new London-based entity will be independent from its underwriting operations. The formation was based on Nexus’s view that there is great potential to build independent distribution capability in specialty product areas.

French Property and Casualty (P&C) insurance company La Parisienne Assurances is making sure it is able to carry on with its undertakings in the UK even after the country’s departure from the European Union. “Given its high business stakes and development ambitions in the UK, and in the current context of uncertainty related to the ongoing Brexit process, La Parisienne Assurances has decided not only to register for the Temporary Permissions Regime but to establish a UK third country branch,” said LPA in a release. The Paris-headquartered digital player, which designs P&C white-label traditional and non-traditional insurance solutions in 15 European countries, has underwritten business in the UK since 2010. Mainly in the British Motor market, LPA distributes its products through partnerships with managing general agents.

The Financial Services Compensation Scheme has extended Broker CRL Management’s deadline to find replacement cover for Alpha policies. Unrated Danish provider, Alpha went bankrupt in May last year 2018, prompting a crisis in the UK taxi market. The organisation stated that CRL has now been given a further two weeks to find an alternative Insurer to provide replacement cover for Alpha latent defect and structural damage insurance policyholders whose policies terminated last August 2018.

GRP-owned European Property Underwriting Limited has launched Solutions, a package of covers specially designed to respond to the challenges that Brokers experience when trying to provide cover for unusual property owner liabilities. Solutions is targeted at liabilities involved with irregular construction or unusual occupations and enquiries involving industrial, retail, office, residential or empty properties are all applicable. The package includes core material damage and loss of rent and liability, but equipment breakdown, legal expenses and cyber covers are available for an additional cost.

Specialist Motor Insurer ERS has launched a dedicated claims team for prestige vehicles. The Insurer said the team will be experts on high-end cars and will be based out of its offices in Swansea, working with the firm’s specialist Underwriters. According to ERS, the service will give Brokers access to prestige experts, with a single point of contact for the entire claims process.

Beazley has added two products aimed at UK-based businesses with a turnover of up to £350m to its Broker e-trading platform myBeazley. UK Brokers can now access Cyber policy Beazley Breach Response (BBR) and Management Liability, which includes Directors’ and Officers’ insurance as well as the option to add Crime and Employment Practice Liability cover, via the platform.

The advent of the gig economy has made significant changes to the way people work. Now, people can choose to work during the times they are available, as well as work using their own assets, such as vehicles or computers. With the evolution of work and its associated risks, it’s natural that insurance has adapted to match what it is supposed to cover. However, Sten Saar, CEO of London-based pay-as-you-go insurance provider Zego, thinks that this is not happening fast enough. He believes that insurance for small and medium enterprises (SMEs) in the UK has become “out-of-date, inflexible and overpriced.” And thus, insurance must be made relevant to the needs of workers and entrepreneurs, especially those in the gig economy.

The British Insurance Brokers’ Association – as part of its 54-page Manifesto launched in the Houses of Parliament earlier this year – has called on companies in the insurance broking sector to create a culture of openness about mental well-being. Next month the trade body will also be shining a spotlight on the matter at BIBA 2019 and specialist Insurer Ecclesiastical – which in May will be holding ‘Love your heart, love your head week’ across its offices in the UK – has expressed its support.

A run-off portfolio of linked and traditional business from MetLife Europe D.A.C. has now been transferred to Monument Re’s European subsidiary. The Bermuda-based Re-Insurer said it has completed its swoop for the MetLife Europe portfolio through its Laguna Life D.A.C. unit in Ireland. The portfolio transfer was undertaken in accordance with the approval of the Irish High Court.

LV= General Insurance Claims Director Martin Milliner stated “electric cars have very specific needs" when the provider rolled out its insurance product especially designed for electric vehicles. LVGI, one of the biggest Motor Insurers in the UK, described the new policy as a market-first. Benefits of the bespoke electric Car insurance includes UK-wide recovery for policyholders whose vehicles run out of charge, an electric or hybrid car as a replacement hire, cover for home charging cables, wall boxes and adaptors as well as access to a network of specialist electric car repairers.

Zurich Online,” the freshly launched trading platform will cater to SME (small- and medium-sized enterprises) and speciality market while providing a faster and more flexible digital experience. Built in collaboration with Brokers themselves, the portal will be supported by Zurich’s centres of excellence in Leeds and Cardiff. “We’ve always listened to our Brokers and we’ve constantly sought to modernise, evolve and explore new ways of making Zurich easier to deal with,” noted SME head Paul Tombs.

Crawford & Company has announced the launch of what is described as the industry’s first smart water detection and mitigation product to address escape-of-water claims. The product delivers a rapid response to water-loss claims initiated by wireless sensors that detect water leaks. Insurance carriers and risk Managers have become increasingly concerned about escape of water for several years, Crawford & Company said. Escape of water is one of the largest causes of non-catastrophe losses.

New research from specialist insurance Broker and risk consultant JLT Specialty has revealed that players from Premier League football clubs who played in 2018’s World Cup in Russia have seen a 44% increase in injuries.

ThingCo has rolled out Theo, which the Insurtech describes as “the world’s first connected car service delivered by a professionally fitted video camera enabled device.” Theo leverages AWS (Amazon Web Services) technology and will use a combination of ADAS (advanced driver-assistance systems), intelligent voice, video footage and telematics to provide real-time support to motorists.

Premiership Rugby has confirmed that its partnership with Gallagher will continue in a response to Vince Cable’s letter last week urging the organisation to review its relationship with the Broker. Gallagher confirmed its sponsorship of Premiership Rugby last April 2018. The response came after the leader of the Liberal Democrats, who is also the MP for Twickenham, wrote to Premiership Rubgy Chief Executive Mark McCafferty last week, referring to racist comments made by Gallagher’s UK CEO Simon Matson.

Q Underwriting, the MGA offering put together by PIB at the start of the year, has launched a property proposition for the Broker market. Q Property has trialled the offering with a few select Brokers since the beginning of 2019. PIB stated that it offers a technical, personal approach to underwriting commercial combined, non-standard or complex commercial Property risks, business interruption and packages.

Ageas has recruited a new regionally focused commercial lines underwriting team with the aim of building stronger relationships with Brokers. The provider noted that the move was part of its strategy to grow in commercial lines and that the team will have a “flexible and bespoke approach to deal-making”. According to Ageas the team will provide Brokers with easier access to Underwriters across the regions.

Arch Insurance (UK), part of Arch Insurance International, has purchased Axiom Underwriting. Axiom had a GWP of £20m in 2018 and will now join the Arch UK regional division, specialising in commercial Property, Casualty, Motor, Professional Liability, Personal Accident and Travel. The transaction means that twenty Axiom employees will move to Arch.

In other news… While much of the Brexit outcome continues to hang in the balance, Arch is wasting no time in making sure its services to European clients will not be disrupted. Arch Insurance (EU) D.A.C has been authorised by the Central Bank of Ireland (CBI) to expand the classes of business it writes in the European Union or European Economic Area (EEA). Formerly known as Arch Mortgage Insurance D.A.C, the company now underwrites not just mortgage insurance but also – as of March 29 2019 – Property and Casualty (P&C), Motor and other business lines.

Saga’s retail broking operation saw profit before tax drop 19.1% for the full 12 months to January 2019. Saga has also announced an expected reduction in profits for the current financial year, a reduction in the dividend and a write-down to its insurance business – reflecting long-term challenges in the market. In its preliminary results underlying profit before tax for retail broking was £105.8m (2018: £130.7m). Former Broker Network Chief Gary Duggan was appointed to lead the retail broking division in January 2018.





Market Movers and Shakers

Allianz Insurance has appointed Nick Rossiter to the position of Motor Damage Strategy Manager, following the retirement of Stuart Munro. Nick has been with Allianz for ten years and has worked in a variety of underwriting and operational leadership roles. Previously regional operations Manager for the South East region, Nick has spent the last year as operational lead for the project and delivery phases of Allianz‘s commercial lines business transfer, a key component of the joint venture with LV=.

Litigation and Dispute Resolution Lawyer Liam O’Connell, is making the switch from Norton Rose Fulbright – where he was Head of the EMEA (Europe, the Middle East and Africa) insurance claims team – to DAC Beachcroft. The latter said O’Connell is “set to join the firm shortly” after being appointed to lead its global insurance practice in London. DAC Beachcroft described the key recruit as among the most respected Practitioners in the London insurance market.

Advent Insurance Management (Advent), the InsurTech-led Lloyd’s and London market service provider, has appointed Jack Smith to the newly created role of Head of Operations, effective immediately. Smith brings over 35 years of insurance-market experience to Advent and will be based in its Chelmsford offices. Prior to Advent he worked for Tasker Insurance Group, where he held various roles since 2002, most recently as Head of Operations.

Price Forbes has appointed Emma Hewett as leader of its Sharing Economy practice. Based in London, Price Forbes’ Sharing Economy practice was one of the first established broking teams to specialise in designing insurance programmes for emerging and fast growing companies using technology to disrupt traditional marketplaces, such as self-driving cars, augmented reality platforms, on-demand delivery drivers and peer-to-peer sharing platforms.

Nick Rossiter is now the Motor Damage Strategy Manager at Allianz Insurance Plc. The former Regional Operations Manager for the South East region has been with the insurance company for a decade and has played an important role in the joint venture with LV=, serving as operational lead for the project and delivery phases of Allianz’s commercial lines business transfer.

The London Market Group has found a new interim sponsor for its Target Operating Model (LM TOM). John Neal, CEO of Lloyd’s of London, is to take the role on the back of the departure of Shirine Khoury-Haq, the COO of Lloyd’s and its sponsor since the workstream’s inception back in 2015.

Pauline McNulty, Liberty Specialty Markets’ Executive Programme Director, has been named as one of the members of InsideOut’s inaugural 2019 LeaderBoard – an initiative designed to help break the stigma of mental ill-health in the workplace. Unveiled at a launch event at Liberty Specialty Markets’ (LSM) London office last week, the LeaderBoard consists of a number of senior leaders prepared to talk publicly about their own experience of mental ill-health.

April 1st 2019 was Kristina Maffit’s first day as Vice President of Property Reinsurance at Brit Global Specialty Bermuda. The appointment will see Maffit not only manage BGSB’s Property Reinsurance underwriting team in Bermuda but also support the broader development of Brit’s global Property Reinsurance offering. That means she will be in close coordination with the underwriting and exposure management units in Bermuda, the US and London.

Admiral Group Plc has announced the departure of its Non-Executive Chair from the board of Jardine Lloyd Thompson Group Plc (JLT). Annette Court, who became a JLT Non-Executive Director in August 2012, stepped down on the 2nd April. The move comes a day after Marsh & McLennan Companies (MMC) completed its swoop for the British Brokerage. At JLT, the former RBS Insurance Chief Executive served as a member of the audit and risk, remuneration and nominations committees. In 2017 Court was appointed as Senior Independent Director.


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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