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General Insurance Newsletter Friday 5th July 2019

05 Jul 2019

Insurance News

Cloud-based digital insurance platform, Instanda has revealed an MGA start-up facility, IMGA. The firm stated that the platform offers all of the necessary technical tools to manage and run a new MGA, taking around 10 weeks from initial contact to commencing underwriting. It also indicated that its new offering should enable and manage a variety of services, including product distribution, submission and policy management, renewals and FNOL processing.

The Danish Financial Supervisory Authority (DFSA) has stated that Gefion Insurance’s solvency ratio is 105% as of 31 May, instead of the 130% Gefion posted in its Solvency Report in June. The Danish provider was forced to take action earlier this year, after its solvency ratio dropped to 72%. The Motor Insurer stated that these actions included a cash injection, along with an increased level of reinsurance with an existing reinsurer.

The insurance industry is remaining positive in the face of falling business volumes. The announcement comes from the latest CBI/PwC Financial Services Survey. According to the 79 firms that participated, industry optimism is being driven by M&A activity and opportunities to improve customer service. Brokers are particularly enthused by the growth potential in closer relationships with their customers.

The FCA has warned that fraudsters are using the details of UK General Insurance Limited. An alert from the regulator cautioned that the Leeds-based provider has been cloned. Scammers have been attempting to conduct authorised business under its name. The FCA warned customers that fraudsters may use the firm’s reference number to appear legitimate to customers.

In other news....The Financial Conduct Authority (FCA) has seen a huge rise of 1087% in Cyber incidents reported by financial services firms in 2018, compared to 2017 when there were 69 attacks. This was revealed by RSM UK, upon receiving data following a freedom of information request. Retail banks reported the highest number of incidents (486); wholesale financial markets reported 115; while general insurance and protection reported 49. This was roughly 6% of the total number of reported incidents. The main reasons for the incidents were seen to be third-party failure (21% of reports), hardware/software issues (19%) and change management (18%).

The Financial Services Compensation Scheme (FSCS) has paid compensation to a number of Lamp policyholders who had outstanding property damage claims when the firm collapsed. This is the first set of payments made to clients of Lamp by the FSCS; it has said that it is continuing to work with the liquidator to facilitate the payment of protected claims and issuance of policy refunds. The liquidator has appointed Grant Thornton’s Gibraltar office to manage the liquidation, while in the UK, Quest Consulting has been nominated to administer claims and handle communications surrounding the claims.

The Chartered Insurance Institute (CII) has stated that it has made the application and renewal process for corporate Chartered status easier. This follows the news from May that the CII had redesigned its corporate Chartered position for the insurance and financial planning profession after a consultation with the industry, consumers and public bodies. According to the organisation, there will be a new application form for applying for and renewing corporate Chartered status. The CII explained that the new form will automatically calculate whether a business meets the criteria for staff, unlike with the previous process.

In further news...The Chartered Insurance Institute (CII) has launched a new code of ethics. The ‘Digital ethics companion’ has been designed to support the existing CII code of ethics. It aims to guide insurance professionals through their responsibilities in the digital age. Sian Fisher, Chief Executive Officer of the CII, outlined the need for additional guidance: “A clear and consistent ethical approach becomes ever more important as elements of our service are increasingly delivered digitally.” The CII has also produced an accompanying guide to the new code of ethics, providing examples of how the ‘Digital ethics companion’ can be applied in practical scenarios.

Integro Insurance Brokers has revealed that its corporate and private clients division will be rebranded to Tysers on 1 July. This follows Integro’s purchase of Tysers’ parent company Hawkes Bay in March 2018. The broking business detailed that its wholesale division has rebranded to Tysers immediately after the deal was completed. As a result Tysers will have offices in Manchester, Hitchin and Aylesbury, in addition to its headquarters in London. The business specialises in commercial lines and private clients.

Gallagher has announced the signing of an agreement to purchase a minority interest (29.7%) in Czech based insurance Broker Renomia a.s.

The Association of British Insurers has written to the Independent Inquiry into Child Sexual Abuse (IICSA), saying it believes there is a need to change the law on limitation for child sexual abuse claims. The letter, sent to inquiry chair Professor Alexis Jay and signed by ABI Director General Huw Evans, offers the assistance of the ABI in developing a future framework for the claims

Ignition Select has entered dissolution after two years in administration, with Close Brothers expecting to lose millions in owed payments. Administrators from Begbies Traynor made the decision after failing to realise funds from the Broker’s debtors over the past year. Begbies Traynor has conceded that Close Brothers, Ignition Select’s sole secured creditor, will now suffer a “significant shortfall” from the £2,205,058 they are owed. Close Brothers has received £724,015 from asset realisations since administration proceedings began. The administrators also stated that no dividend will be paid from Ignition Select to preferential creditors or unsecured creditors.

Following multiple acquisitions, Group Managing Director of Global Risk Partners (GRP), Mike Bruce has confirmed that the business has a number of future deals in the pipeline. Bruce said that the firm is approaching a gross written premium of £1bn. The MD said: “Our overall model around our regional acquisition strategy is very much around a hub and spoke model. “So we’ve already invested in a number of decent sized hubs, whether that be County, Higos, Greens, Marshall Wooldridge, ABL over in Ireland.”

An improved wordings repository has been launched by Lloyd’s of London in association with the Lloyd’s Market Association (LMA). Available at www.lloydswordings.com, the online searchable database is a collection of nearly 6,000 model policy wordings and clauses that are regularly used within the London market. The Lloyd’s Wordings Repository (LWR) also leverages advanced technology to enhance the user experience.

In further news...Lloyd’s CEO John Neal believes the market is yet to successfully tackle its ongoing culture problems. Speaking at the MGAA annual conference on Tuesday, Neal simply answered “no” when asked if Lloyd’s had done enough. This admission is “despite all of the effort in representing inclusion the best way possible in the industry,” Neil commented. Following the report by Bloomberg, the market announced a number of measures designed to prevent sexual harassment and foster a more diverse and inclusive culture. The plan included an independent, market-wide culture survey on Lloyd’s behalf. The survey is intended to help Lloyd’s understand the working cultures that exist across the market.

Last week a report by FWD Research pointed to a whopping 94% of insurance Brokers in the UK who are currently placing business electronically. Now, as further testament to the growing appeal of going paperless, the market’s digital risk transfer platform Placing Platform Limited (PPL) has released its latest numbers. According to PPL, 250,000 firm orders have been bound on the platform since it was rolled out three years ago. “Every day, more than 1,000 people log on to the platform to quote, bind and endorse – saving time and paper,” it noted. Pleased with the progress, Lloyd’s Market Association (LMA) Chief Executive Sheila Cameron commented: “It is encouraging to have got this far and we must continue to build on these successes if we are to truly realise the benefits for the market and its clients.”

The Cyber insurance market is becoming increasingly competitive – but now one specialist Insurer believes it has formed a truly comprehensive solution that stands out from the crowd. Markel International has launched Markel Cyber 360 on a stand-alone and add-on basis for businesses in the UK, Europe, Canada, Asia and beyond. It aims to provide “all round protection” with limits up to £10 million per risk. According to Markel one of its key features it that it offers support from a panel of “geographically diverse expert advisers” – so insureds can get assessments of their vulnerabilities to Cyber related incidents and recommendations on how to address them. It also comes with a comprehensive line-up of breach response, forensic investigation, credit monitoring, incident management and more – all supported with a 24/7 helpline.

Marsh has accused fellow Broker Hyperion of a staff-poaching conspiracy after losing 47 employees from its recently acquired JLT Specialty business within a three-week period. A minimum of £10m is being sought through the legal action. Court filings allege Hyperion co-ordinated the resignations between 23 April and 13 May this year, with a view to either taking clients or devaluing parts of the business to leverage a sale. The resignations affected JLT Specialty’s Real Estate division (20 resignations, including 11 out of 17 members of the division’s Executive Committee), Financial Lines division (21 resignations) and Special Risks and Programmes division (six resignations).

Brokers still have a long way to go when it comes to adopting digital technology, according to Applied Systems. The software house revealed in its 2019 Applied Digital Broker Annual Report that only 29% of Brokers in the UK use data analytics tools to gain insights from their own data. Jeff Purdy, Senior Vice President of International Operations at Applied, explained that in a highly competitive market such as the UK, “analytics can absolutely inform the types of business that the Brokers should be targeting”.

ERS has announced that Horsebox insurance will be made available via its online system. The product can be tailored to suit all horsebox owners, from amateur enthusiasts to professional sportspeople. Malcom Cawsey, Product Manager for Agriculture at ERS, commented: “Horsebox size, weight and valuations vary wildly and we pride ourselves on being able to deliver flexible, bespoke underwriting for every customer, whether their horsebox is worth £500 or £350,000.” Brokers will be able to trade the cover using ERS eTrade. The system is accessible 24/7 using any smart device.

Lorica (also present in Birmingham, Bristol, Cornwall, Hemel Hempstead, London, Preston and Wales) will now see its Leeds team operate under the Wilby brand. The two firms both came onboard PIB Group in 2018. A report by The Business Desk said Wilby Director Mike Shaw will be at the helm of the Leeds operation. “This is an exciting time and another important milestone in our journey,” the publication quoted Shaw as saying. “We’re looking forward to working together as one team, while ensuring clients will still receive the same friendly and professional service they’ve come to expect from both brands.”

Claims-management and outsourcing firm Crawford & Company has announced the acquisition of 100% of the shares of Penta Expertise & Consult NV. The acquisition will expand Crawford’s capabilities in Europe’s Benelux region. Penta provides Crawford with enhanced capabilities in delivering loss adjusting, accounting, engineering and loss-mitigation services offered by Crawford Global Technical Services (Crawford GTS) in the region, the company said. Headquartered in Antwerp, Belgium, Penta offers a range of highly specialised loss-adjusting services for complex claims, with a particular focus on the construction and engineering sectors.

Recently in Spain, a man drove his car and parked it in his garage at home. More than 24 hours later, the car caught fire due to an electrical fault, causing €45,000 worth of damage. The man’s Property Insurer pursued his Motor Insurer for recovery costs, resulting in the case of Linea Directa v Segurcaixa being heard in the EU Court of Justice. The court came down in favour of the Property Insurer, finding that the Motor Insurer, Linea Directa, would be required to pay the €45,000 claim. The outcome came about because the court determined that the car was “in use” while it was stationary in a garage, having not been driven for more than 24 hours.

Verlingue, the French owner of UK-based Chartered commercial insurance Broker ICB Group, has widened its footprint further with a new operation in Switzerland. Barely 10 months since acquiring ICB Group, the business protection business snapped up Bern-based insurance Broker MEEX in line with the 2022 strategic plan it introduced in March. With MEEX coming into the fold, Verlingue becomes one of the three main stakeholders in the Swiss market. “In the fullest sense, this acquisition forms part of our 2022 strategic plan, illustrating our global ambitions for Verlingue,” noted Chief Executive Eric Maumy.

Experts have warned that they are struggling to find capacity for start-ups due to the risks involved in covering them. During a panel session at the MGAA Conference earlier this week, a mix of Brokers, Insurers and Managing General Agents (MGA) discussed the hardening of the insurance market. Stuart Wright, Chief Executive Officer of Managing General Agent Omnyy, noted that AIG and Lloyd’s are “leading the charge” in the hardening of the market.

Acturis Group has bought Zycomp Systems in Canada for an undisclosed sum. The software house stated that the deal will give it a “significant presence” in Canada and the Caribbean. According to Acturis, it has also started deploying its platform in the Canadian market. It added that Zycomp’s broker system, Power Broker, has a market share of around 30% in Canada.

Tokio Marine HCC specialist Underwriters have been underwriting TV & Film Errors & Omissions (E&O) insurance for several years and have over 20 years’ experience in the industry. Whether you need cover for a small or large-scale production, it is important that you know what you are buying to ensure it provides you with the right coverage. Film & TV E&O covers the content of TV programmes, movies, webisodes, live events, theatre shows and all things in the media space. TMHCC’s understanding of this industry and bespoke wordings allows them to offer a range of variables.

Zurich celebrated Pride and the 50th anniversary of the Stonewall riots. Zurich first marched in London Pride under their own banner in 2017.Taking part in Pride events is just a small part of what Zurich are doing to make their organisation a more inclusive place to work. Zurich are also taking part in the UK Stonewall Index 2019.

Aviva data suggests ‘accidental damage’ Home insurance claims increase during school holidays. Claims in August 2018 rose by almost a third, compared to June 2018. Smashed TVs, phones down toilets and carpet calamities are amongst the common claims.

Law firm DWF has won a ground-breaking fraud case on behalf of its client, Motor Insurer Markerstudy, where two men have been imprisoned after being found in Contempt of Court for their involvement in a 'crash for cash' scam. It is believed to be the first time that a court has sentenced to prison both a fraudulent 'claimant' and the alleged driver of the 'decoy vehicle' used in the scam. The attempted fraud was foiled by the immediate suspicions of Markerstudy's policyholder, whose actions after the incident not only helped ensure that the insurance company did not have to pay these fraudulent claims, but helped convict both men.

In December 2016, AIG surveyed Cyber security and risk experts to gain a deeper understanding of their views of the likelihood and impact of a systemic Cyber-attack. While the question, Is cyber risk systemic?, is simple in form, they believe that the details are highly nuanced. Can a single attack affect tens, hundreds, or even thousands of institutions at the same time? Is the event size inversely proportional to the likelihood that it will occur? Are certain industries more exposed to systemic risk than others? These questions and more frame the research presented in this paper. The data may be useful for sizing up systemic Cyber risk and preparing for systemic attacks, important topics for all companies living in the Cyber security ecosystem. Moreover, for Cyber Insurers, answers to these questions are essential for proper modeling and management of accumulation risk.

Thailand is considering making Travel insurance compulsory, with tourists obliged to buy a special policy from the airport. In response Nel Mooy, Head of Travel at AXA Insurance has produced some insight: “The compulsory insurance contemplated by Thailand appears to only be covering tourists if they die and not if they are injured. Yet, medical expenses abroad can be very expensive – we recently paid a £164,000 claim for a British tourist involved in a road traffic accident in Thailand. Travellers need cover for medical care. They also need to ensure their insurance includes the activities they’ll engage in, like scuba diving or rafting for instance. We recommend that tourists holidaying in Thailand continue to buy a Travel policy in the UK no matter what. It will cover medical expenses and other costs linked to cancellations, delays, luggage loss and other mishaps. It remains a must.”

 

Market Movers and Shakers

James Hallam has hired Roy Standish as Director of Partnerships, joining the Broker on 22 July. A spokesperson for James Hallam said that this is a newly created role and the Broker explained that Standish will be responsible for the strategic direction of its partnership programme for appointed representatives (AR). The business, which is a subsidiary of Seventeen Group, further stated that it aims to expand and develop new partnership opportunities for the future.

The Financial Conduct Authority (FCA) has appointed Zurich UK Chief Executive Officer Tulsi Naidu as Chair of the FCA Practitioner Panel. Naidu will take over the post from Fidelity International CEO Anne Richards on 1 August this year. A spokesperson for Zurich said that Naidu and Richards are the only two women to have ever held this role.

Allianz Insurance has appointed Tom Leonard as its Regional Manager for London. Joining Allianz in 2007 as a corporate management trainee, Tom has undertaken various underwriting, trading and operational roles over the last 12 years. Working his way up from Motor Account Manager, to Operations Manager, most recently Tom held the position of SME Branch Manager in Maidstone and Lancaster. In his new role, Tom will be responsible for overseeing the London branches and their operation plus shaping the strategy for Allianz’s London market teams.

In further news...Allianz Insurance is strengthening the development of its Claims Handling Centres of Excellence, through the appointment of Mark Cant as Head of Birmingham, Claims. In his new position, Mark will report directly to Jeremy Trott, Head of Claims Operations, working with senior stakeholders to ensure Allianz is developing operational best practice across Birmingham Claims and delivering a high level of customer service. Mark will be responsible for leading the claims centre team; driving a customer centric culture to maximise customer satisfaction.

Allianz Global Corporate & Specialty (AGCS) has appointed Dr. Melanie Gillig as Global Head of Human Resources, effective January 01, 2020. Gillig succeeds Dot Cownie, who will retire from her role as Global HR Head by the end of this year, 2019. Until her retirement, Cownie will work together with Gillig to ensure a smooth handover of her responsibilities.

Barbican Insurance Group has today announced the appointment of Antony Hope as Class Underwriter for Directors’ & Officers’ (D&O) Liability insurance, with immediate effect. Reporting to Gavin Stanley, Head of Financial Lines, Hope will work alongside Sarah McGurk, who is also a Class Underwriter for D&O at Barbican. The Financial Lines team provides a broad range of insurance solutions for financial and commercial institutions and professional firms.

MS Amlin, the leading global (re)insurer, today announces the appointment of Rob Houghton to the role of Chief Operating Officer (COO). Houghton is expected to join the business no later than mid-October 2019 and will form part of the executive team, reporting to Simon Beale, CEO. The role is subject to regulatory approval. Houghton joins MS Amlin from the Post Office where he currently serves as COO, having joined the company as CIO and Change Director in 2016.

Lloyd’s of London announced today that Jennifer Rigby has been appointed Chief Operations Officer (COO). Jennifer has been performing the role on an interim basis since March this year, following the departure of former COO Shirine Khoury-Haq. Her remit as Lloyd’s COO includes business transformation, global operations, data, IT, innovation and corporate real estate. Jennifer joined Lloyd’s in May 2017 as Chief Information Officer (CIO) with responsibilities that included technology transformation, Cyber security and innovation as part of Lloyd’s overall strategy.

Brit Ltd (“Brit”) announces the appointment of Paolo Cuomo to the newly created role of Head of Strategy. In this role Paolo will be based in London and report to Mark Allan, Chief Financial Officer. In his new role as Head of Strategy, Paolo will help develop, manage and implement Brit’s strategic initiatives and Brit’s engagement with and response to, the Future at Lloyd’s initiative, announced in May 2019. He will work to ensure Brit is best positioned to respond and input into Lloyd’s and the London Market Association’s future strategy and vision for the market.

Zurich Insurance Group has confirmed that Amanda Blanc, Chief Executive Officer for Europe, the Middle East and Africa and bank distribution and a member of the group’s executive committee, has resigned. Blanc previously held the UK CEO post at Axa, but left in April 2018 to join Zurich. Zurich said in a statement: “The company thanks Amanda for her leadership since she joined in October 2018 and wishes her every success in her future endeavors.”

In further news...Amanda Blanc is no longer the Chair of the Association of British Insurers (ABI). On the trade body’s website, it shows that the ABI roster of board members – which comprises the likes of Jon Dye (Allianz), Scott Egan (RSA), Claudio Gienal (AXA), Penny James (Direct Line Group) and Bronek Masojada (Hiscox) – does not include Blanc anymore.

It looks like Commercial Express is celebrating its 20th anniversary by ramping up. The Managing General Agent, which recently welcomed Mark Humphreys and Helen Holyoake in their capacity as Senior Technical Underwriter and Head of Risk and Compliance, respectively, has added another name to its roster. Bringing two decades of insurance industry experience to the West Midlands business is Phil Caffery. Described as “a welcome addition” to Commercial Express, the Birmingham native has been tapped to serve as Regional Account Manager for the Midlands and East of England. His credentials include time spent at Towergate and Aviva.

Following the recent appointment of Ed Pickard as Head of UK Professions, Taurai Ushe has joined Miller as Head of Business Development, UK Professions, to further bolster its leading Professions team. The hires of both Ed and Taurai signal Miller’s commitment to the UK professions sector and specifically its intention to expand its insurance offering to top 250 law firms and other larger professional practices.

 

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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