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General Insurance Newsletter Friday 7th December 2018

07 Dec 2018

Insurance News

The FCA has published a consumer warning in relation to Larksway Investments Limited, trading as Larksway. FCA official statement: Larksway Investments Limited (Larksway) was referred to the FCA's Enforcement and Market Oversight Division on 5th April 2016 because it had failed to comply, despite repeated requests by the FCA and the Financial Ombudsman Service to do so, with a Final Decision made on 17th December 2014 against Larksway in favour of a customer, relating to the sale of a Home insurance policy. On 27th September 2017, the FCA stopped Larksway from providing insurance brokerage services to customers, then on 27th November 2018, they permanently cancelled Larksway’s FCA authorisation. On 7th December 2017, a winding up order was made against Larksway - the firm is in liquidation.

In other news...The Financial Conduct Authority (FCA) now regulates more than 58,000 firms, according to its latest authorisation document. The total includes 1,500 businesses such as Insurers and banks that are dual-regulated with the Prudential Regulation Authority (PRA). The latest document revealed that in 2017/18 the watchdog judged more than 4,400 authorisation applications from firms.

AmTrust’s UK Liability exit could be the “tip of the iceberg” in terms of providers losing their appetite for some business lines, Brokers have warned. Insurers are also expected to hike UK liability premiums by 10%-15% following the move.

A total of 31 InsurTech start-ups have come together to launch Insurtech UK, a body aiming to be “the voice of the UK’s InsurTech community”. The creation of the group follows discussions in the summer and its inaugural meeting took place on 28 November. According to the organisation its aim is to support the growing InsurTech sector, with the intention to develop into a formal association in 2019 with an initial five-year mandate.

One Broker has reported a 27% leap in turnover for the year ended 31 May 2018, according to a filing at Companies House. The rise to £6.39m was enhanced by the purchase of Gibbs Denley Insurance Services on 9 June 2017, however Managing Director Robin Plaster said that the company also achieved organic growth in the year. It also bought John Albion, which specialises in insurance for barn conversions and thatched or period timber framed homes, during the year.

Private equity house Pollen Street Capital, majority owner of Miles Smith Insurance Group, has bought The Underwriting Exchange and sister company London Ireland Market Exchange. Pollen Street snapped up a majority stake in Miles Smith last December in a takeover that saw MS Amlin exit the business. Lloyd’s Broker The Underwriting Exchange and Dublin-based managing general agent LIME – known together as TUE Companies – work across Irish and UK corporate and SME risks including Motor Fleet.

Global Insurer Chubb has launched a new Terrorism related product aimed at multinational companies and large middle market businesses. Available via Brokers, the new offering, Terrorism Risk Evaluation Services, combines the Insurer’s expertise in Terrorism and Political Violence underwriting, risk engineering, global security, catastrophe modelling and digital capability. According to the provider, the tool was created following feedback from corporate clients who sought to evaluate and improve their understanding of terrorism and political violence-related risk exposures for their operation centres globally.

Ceta intends to launch its Infinity portal for Brokers in mid-January 2019. The new service will start by delivering quote and bind online capability in non-standard property with more lines to be added over time. The service has already gone live with Ceta’s 2,000 IFA base and is in soft-launch testing with selected general insurance Brokers ahead of the full roll-out next year.

The November 2018 Cyber Risk and Insurance Report by insurance governance expert Mactavish has shone a spotlight on common cyber cover limitations and now a Financial Times report is pointing to a rise in disputes between policyholders and providers. The newspaper cited a particular case involving Everest National Insurance Company and the National Bank of Blacksburg, wherein the Insurer offered to pay US$50,000 and not the US$2.4 million being claimed by the bank after the latter incurred losses from cyberattacks. The dispute will be heard in court in 2019. 

Allianz UK’s Chris Little said “there are reports of more organised professional criminals making a good living out of stealing plant items.” According to the numbers released by the Insurer’s Engineering, Construction and Power unit, where Little serves as Director, Allianz dealt with 665 plant theft claims in 2017 – up from 619 the previous year and also higher than 2013’s count of 428. The projected figure for this year is 732 claims.

It was just a few weeks ago that Government reinsurer Pool Re declared that the last 12 months had seen it introduce “two of the most significant enhancements” to its cover since it was established. “New cover for physical damage caused by an act of cyber terrorism, combined with incoming legislation to allow the pool to cover non-damage business interruption (NDBI), together represent a new global standard of terrorism cover,” said its Chief Executive Julian Enoizi at the time. Many insurance Brokers may be delighted at the steps forward – but what they may not realise is that there is a bigger picture for Terrorism insurance in the UK if they are willing to look at alternatives.

Hiscox, the first Insurer to tap natural language processing technology provider Eigen Technologies to automate internal processes, has offered assurances that it is not out to replace its workforce with automation. Speaking at a computing event on artificial intelligence and machine learning, Hiscox Chief Information Officer Ian Penny said it’s about human assistance, which means making staff more productive and enabling them to make better decisions.

Announcing the overseas expansion, AFL Insurance Brokers Ltd said its Argentina-based unit came to life after the independent Lloyd’s Broker acquired an equity stake in the former Cooper Gay Argentina LLC business. The latter was owned by Special Division Reinsurance Brokers, one of South America’s biggest reinsurance broking firms. The Buenos Aires enterprise, which has an additional office in Miami in the US, has been renamed as AFL Sud America effective immediately. Led by Chief Executive Guillermo Pastore, AFL Sud America will be looking at launching operations in Brazil and Colombia. 

Broker Network-owned Finch Group has bought Southampton-based Specialist Insurance Agency (SIA) for an undisclosed amount. This is Finch’s seventh purchase since it became Broker Network’s first “regional powerhouse” in October 2016. SIA specialises in insurance for commercial Holiday Home, Landlord, Home and Home Non-Standard and the 24-year-old firm currently manages £4m of client premium. Finch Group, the first Broker Network Partner, now boasts of £38 million in gross written premium. Finch Group’s acquisitions includes Opus Risk Solutions Ltd, Miller & Co Insurance Brokers Ltd and Taylor Beaumont. Headquartered in Reading, the regional powerhouse has seen its GWP grow from £20 million.

The long hot summer of 2018 resulted in a sharp increase in subsidence insurance claims totaling £64m in only three months, according to the Association of British Insurers (ABI). More than 10,000 UK households made claims in July, August and September, which is the highest level of subsidence claims since the record-breaking heatwaves of 2006 and 2003. Comparing it to the previous quarter, the ABI said the number of claims increased from 2,500 to 10,000 and rose in value from £14m to £64m.

The Lloyd’s Lab has launched a new global search for the next cohort of InsurTech innovators. The first ten week programme aimed at helping entrepreneurs and start-ups to deliver innovative solutions to some of the key challenges faced by the London market, went live in October. This original programme is due to end on 12 December 2018. 

The British Insurance Brokers’ Association (Biba) has renewed its holiday Travel scheme with DTW1991 extending the relationship that began in 2015 for a further three years. The trade body highlighted that Holiday Travel+ has been enhanced to include “All Risks” cancellation cover, insurance for a missed departure for any leg of the client’s journey and, subject to medical screening, cover for pre-existing mental health medical conditions. Biba noted that members will also benefit from the continuation of the direct relationship with DTW1991’s underwriting team for referrals, advice and onsite training.

PIB Group has combined PIB Insurance Brokers and Lorica Insurance Brokers in a move that sees Stefan Puttnam become Managing Director for both units. He will report to Nigel Salisbury, CEO of PIB Group’s specialty division which also includes Cooke & Mason, DE Ford, Channel Insurance, Wilby, Franklands and PIB Risk Management. Puttnam was previously joint CEO of Lorica along with Carlo Marelli when the Broker was bought by PIB this March.

AXA
is supporting vehicle repair charity AutoRaise in its efforts to attract more young staff to the sector. AutoRaise aims to help the vehicle repair industry address its skills shortage by helping companies obtain government funding and provide a sustainable industry for the future. The charity also hosts events where young people can get hands-on experience of repairing, as well as showcasing repairer job opportunities on its online portal.

In other news...AXA release the third in a series of whitepapers to help Brokers and MGAs launch and manage schemes and delegated authorities. This final installment looks at what steps can be taken to future-proof schemes and delegated authorities (DA) and what sectors Brokers can look to for future growth. It is imperative that Brokers not only protect and grow existing schemes but also identify and develop new opportunities in tandem. The whitepaper outlines steps that should be taken to ensure that a scheme or DA remains fit for purpose, proposes ways to open doors to further schemes facilities and suggests growth sectors that may be ripe for the enterprising schemes Broker.

GI is delighted to announce that its founder and CEO Wasef Jabsheh won the title of Jordan’s EY Entrepreneur of the Year! The award recognises the contribution of people who inspire others with their vision, leadership and achievement. In addition to winning this award, Mr. Jabsheh will be joining entrepreneurs from all over the world in a prestigious ceremony in Monaco in June 2019 as a nominee for the ‘EY World Entrepreneur of the Year’.

It’s a confident statement from Swiss insurance giant Zurich – the firm is very much on track to hit its 2019 financial targets. Speaking ahead of its investor day, the group said it will achieve net savings of US$1.1 billion (around £886 million) by the end of 2018 – placing it firmly in line to reach its end of 2019 goal of savings of US$1.5 billion. “Zurich Insurance Group is fully delivering on its 2017-2019 financial targets, having restored management discipline and efficiency,” it said. In a Reuters report, group Chief Executive Officer Mario Greco outlined that the company was “very different” to the one that set out its goals back in 2016. Greco has helped to oversee an overhaul at the firm making promises to be more efficient.

Royal & Sun Alliance Insurance (RSAI) is the latest major insurance firm to be granted approval for a Brexit move for its European business. The High Court has sanctioned a Part VII transfer facilitating the transfer of RSAI’s European insurance business to RSA Luxembourg – the move becomes effective from January 1st next year (2019). As a result of the transfer, the Luxembourg subsidiary will become the Insurer for risks throughout RSA’s European branch network – while insurance policies written out of the UK as part of the Global Risk Solutions or Commercial Risk Solutions businesses will also transfer across to RSA Luxembourg where they are related to EEA risks.

Pre-tax loss of £20m for Global Risk Partners (GRP). However Mike Bruce points to 4% organic growth and suggests the business is on track to buy “double digit” businesses, including MGAs, in 2019. GRP achieved organic growth of 4% for the year ending March 2018. This is according to a statement posted ahead of its results being published on Companies House. Mike Bruce, CEO broking, spoke about the statement and noted that GWP went up 27% to £700m. The business also completed 12 acquisitions in the year. Peter Cullum, Chairman, stated: “GRP has maintained its strong growth trajectory in 2017-18 through the delivery of our disciplined and proven buy, build and integrate strategy, with our operating entities delivering a run rate EBITDA of £35.3m, a 73% increase on 2016-17. Our business model is underpinned by our focus on growth, the provision of our growing portfolio of enhanced, specialist products to our clients and the mutually beneficial relationships with our Insurer Partners. This delivers a clear, demonstrable and differentiated proposition to the vendors and clients of the businesses we acquire.”

The rise of the #Metoo movement and the abolition of employment tribunal fees could combine to produce a sharp increase in sexual harassment claims in the wake of this year’s round of Christmas parties. The number of employment tribunal claims has climbed sharply since the fees introduced in 2013 were ruled unlawful last year, while the #Metoo movement, which started to gain momentum in the wake of high-profile allegations in the United States late in 2017, is credited with contributing to improved reporting of sexual offences in several countries.

Now in its second year, AIG’s European Environmental Impairment Liability (EIL) claims intelligence report reflects some important environmental loss themes, with implications for companies of all sizes and from all industry sectors. A rise in fire-related environmental damage claims and losses relating to improper construction and demolition (C&D) waste management practices are amongst the trends reflected in this year’s claims statistics.

In other News...American International Group (AIG) is the latest Insurer to report feeling the heat from the California wildfires. The insurance giant has announced catastrophe losses of US$750 million (£588 million) to US$800 million (£627 million) between September and November of 2018. Despite the difficult start to the fourth quarter (Q4), AIG’s Chief Executive Officer Brian Duperreault told his audience at the Goldman Sachs US Financial Services Conference in New York that the company’s general insurance unit is on track to enter 2019 “at a slight underwriting profit.” According to Thompson Reuters, Duperreault expects the general insurance unit’s 2019 net earned premium to be similar to 2018 levels.

NIG are thrilled to be the first Insurer to launch an apprenticeship programme for Brokers. They have selected 10 Broker candidates for a two-year level 4 apprenticeship scheme, called First Forward. NIG first told their First Brokers (NIG’s top 50 independent Brokers) about First Forward in September, following the Government announcement to allow transfers of levy to third parties. The programme covers CII DIP qualifications, skills-based training, mentoring and greater industry exposure. NIG worked with leading industry training company, Wiser Academy, to design the two-year apprenticeship programme and co-hosted a launch event at the Houses of Parliament in London. The event welcomed the ten inaugural First Forward apprentices and their brokerage sponsors.

One of Singapore’s most exciting insurance start-ups has received an investment boost – from a famous source. Billionaire investor Michael Spencer is pumping US$52 million into Singapore Life, a start-up that offers online insurance solutions. The deal gives Spencer’s investment group, IPGL, a controlling 63.2% stake in the company – up by 33.8%. Spencer is a City veteran connected with financial services firm NEX Group, which was sold to CME Group for £3.9 billion earlier this year.

Hiscox is to enter FTSE 100 on Christmas Eve. Global index provider FTSE Russell has confirmed that two firms, including Hiscox, are joining the FTSE 100 Index effective December 24. The insurance company and Spirax-Sarco Engineering are replacing Just Eat and Royal Mail, who are both heading to the FTSE 250. The announcement comes following the indexes’ December 2018 quarterly review and also a month after the Bermuda-headquartered group reported higher gross written premium (GWP) overall and across its retail, London Market and reinsurance segments. 

Lloyd’s issues further Brexit update. Following last month’s official opening of its Brussels subsidiary, insurance market Lloyd’s of London has announced that the new unit will be able to write Proportional Treaty reinsurance starting the third month of next year. This follows an October update which confirmed the Belgian entity’s ability to write Facultative reinsurance and non-proportional Excess of Loss Treaty reinsurance beginning 2019.

Chubb: ‘Size matters’ when insuring major accounts. As global connectivity continues to improve and evolve, the world seems to be getting smaller and smaller. Political situations overseas suddenly become backyard issues and natural catastrophes in faraway continents blow the winds of change thousands of miles away. No one feels the changing temperament of society more than large domestic and multinational companies. Global traders have to navigate nuances in geography, culture, politics, regulation, finance, civil security – the list goes on – and they have to battle complex risk landscapes around the world. Developing and implementing risk management solutions for major accounts is “fascinating,” according to John Alfieri, Executive Vice President of Chubb North America major accounts, which serves large multinational accounts. Each individual major account is unique and is impacted by what’s going on in the world around them, so “there’s never a dull moment,” he added.

Duck Creek 'very proud' of independent recognition from Gartner. Insurance technology provider Duck Creek Technologies, the parent firm of Duck Creek Technologies Europe (DCTE), has been recognised in Gartner’s Magic Quadrant for Non-life Insurance Platforms, Europe report for 2018. Historically a North American enterprise, the Boston-headquartered company has accelerated its European expansion with last year’s launch of an office in London. This year it was identified as among the vendors that have experienced implementations in Europe, based on Gartner’s analysis of providers’ completeness of vision and ability to execute.


Market Movers and Shakers

Appointed Representative (AR) network Momentum Broker Solutions has tapped former Gauntlet Group AR Business Development Manager John Michael to boost its team for the benefit of Partners. Bringing experience from the likes of Marsh and Direct Line, Michael will serve as Business Development Manager as part of the team assisting AR Partners amid continuous progress. “Delighted” to come onboard, the key hire described the network as having achieved impressive growth.

Andy Smith has been appointed as Chief Risk Officer at Premium Credit as part of a structure review of the company’s legal, risk and compliance functions. He will report directly to Chief Executive Tom Woolgrove and be a member of the Executive team. Andy previously spent 20 years working at KPMG. During this time he qualified as a chartered accountant and fulfilled roles in audit advisory, taxation, corporate recovery and special technical and regulatory services departments. In the latter part of his time at KPMG, he was Risk Management Partner for the firm’s UK Financial Advisory Practice.

Coversure Insurance Services are delighted to announce the appointment of a new Head of Insurer Placement, Jamie Evans. Jamie, Broker Manager, will join Coversure in December after working 14 years at Zurich General Insurance in a number of senior sales and distribution roles. Jamie will work together with Coversure’s Head of Products Chris Jarratt to continue to improve the product offering and develop Insurer relationships. Jamie’s time at Zurich has given him an in-depth knowledge of the SME Broker base and his understanding of the Broker market is second-to-none. A valuable addition to the Coversure team, Jamie will play a pivotal role in helping the business achieve its ambitious growth and development targets.

ArgoGlobal, the Lloyd’s Insurer and member of Argo Group, announced the appointment of Paul Lucas as Chief Actuary, International. Lucas takes up his role immediately and will report to Bob Katzman, Chief Actuary, Argo Group.

Larsen Howie, the specialist provider of insurance and IR35 advice to contractors, freelancers and Consultants, are delighted to announce the appointment of Andy Vessey as Head of Tax, with effect from 28th January 2019. Andy is widely recognised as one of the UK’s foremost IR35 experts, having personally defended more than 500 IR35 cases, the overwhelming majority of which he has won. Most recently, for example Andy successfully represented Jensal Software Ltd at the First-tier Tax Tribunal in their highly publicised IR35 appeal.

Emma Watson – (not the English actress of Harry Potter fame!) – has been appointed as Class Underwriter for Property Treaty at Barbican Insurance Group. Making the switch from CNA Hardy, where Watson was Senior Underwriter for Property Treaty, the highly technical Underwriter brings more than a decade of experience in the Property Treaty arena. She will report to underwriting Manager for Property Treaty Tom Gwynn.

Allianz Insurance has appointed Adrian Brewster to the role of Property and Casualty Manager for Maidstone. Adrian joins Allianz after working for Towergate, where he worked for the underwriting arm of the business for two years. Prior to this, Adrian spent 13 years at Ecclesiastical, taking on various underwriting roles in Eastbourne and London.

QBE has added three Underwriters to its Trade Credit team as it seeks to take advantage of growth opportunities for its portfolio Brexit uncertainty, mounting costs and increased competition are exposing British businesses to greater levels of trading risk which by turn is increasing demand for Trade Credit cover. James Robertson has joined as New Business Commercial Underwriter and will be responsible for developing new opportunities in London and the South-East. John Lott has joined as a Risk Underwriter, bringing extensive experience from previous Trade Credit roles in the industry. James and John will be based in London. Harry Bennion has joined the Birmingham office as a New Business Underwriter and will be responsible for looking after Midlands-based Brokers and generating new business in the region.

Global broking firm Brokerslink has announced the resignation of Jacqueline Legrand from her position as Chief  Executive Officer (CEO), effective December 06, 2018. After six years in Europe driving the successful transformation of Brokerslink from an association to a for-profit company, Legrand will return to New York to reunite with her family and take on a new professional opportunity.

There has been a shake-up at UK insurance Broker Brightside as the firm goes on the hunt for a new COO. The Bristol-based firm has announced the departure of David Sweeney, Managing Director, Insurance, who is to leave the business by mutual consent. Russell Bence, Managing Director of volume lines, will take on his responsibilities. The move is part of a structural shake-up being spearheaded by new Brightside CEO Brendan McCafferty. “David’s leadership of our Southampton and Torquay operations has been outstanding and I want to thank him for his contribution to the business since he joined us in 2016,” he said. “On behalf of the board, I wish David every future success.”

PremFina Ltd has tapped seasoned executive Nick Elliman – the third addition to the premium finance firm’s senior management team this year – for the role of Client Engagement Director.  Bringing decades of experience from the likes of Coversure Insurance Services Ltd, where he most recently served as franchise recruitment and acquisitions head, Elliman will lead PremFina’s newly merged sales and marketing teams. The goal is to boost the company’s clientele by further engaging, securing and retaining insurance Brokers, managing general agents and Insurers.

 

 

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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