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General Insurance Newsletter Friday 7th February 2020

07 Feb 2020

Last July, FloodFlash Co-Founders Dr Ian Bartholomew and Adam Rimmer said just how important Brokers are to their business. Now they illustrate that further by partnering with global insurance Broker Gallagher. The tie-up will allow Gallagher to offer the insurtech’s rapid-payout proposition, which features a defined trigger point, or threshold, and a pre-agreed settlement figure. Unlike traditional coverage, the parametric flood insurance policy is not based on an assessment of the cost of damages.

In further news...Gallagher has reported a 15% rise in revenue to $4.90bn (£3.74bn) in its brokerage segment for the full year 2019. The division also revealed a 25% increase in profit for the year, up from $573.2m in 2018 to $717.3m. The business further reported an adjusted Ebitdac of $1.38bn, up 18% from the $1.16bn reported in 2018.

A mere 18% of UK companies have a standalone Cyber insurance policy in place, according to research by major broker Gallagher. According to the poll which involved 1,000 businesses, the vast majority of respondents do not have specialist coverage despite 39% of senior decision-makers citing cyberattacks as among their biggest concerns. The culprit for the underinsurance? The assumption that a standard policy is enough, when in fact it is unlikely to offer Cyber protection.

Will the Brexit transition period be enough to buy the UK time as it carves out its future relationship with the European Union? If you ask trade credit Insurer Atradius, 11 months isn’t enough. “The current trading arrangements remain in place until December 31, 2020,” noted Atradius in its statement on Brexit. “However, this short timeline makes it more likely that only a limited future deal is plausible, which could potentially spell a painful adjustment in 2021.".

FM Global has received an A+ (Superior) financial strength rating affirmation from AM Best. The rating agency also gave FM Global a “stable” outlook. The rating also applies to the companies affiliates, including FM Insurance Europe S.A., FM Insurance Company Limited, Appalachian Insurance Company and Affiliated FM Insurance Company (AFM). The rating “reflects FM Global’s balance sheet strength, which AM Best categorises as strongest, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management,” AM Best said.

Emergency legislation is to be introduced following an attack in Streatham. Secretary of State for Justice Robert Buckland QC noted: “After the London Bridge attack, the Prime Minister, the Home Secretary and I immediately promised a major shake-up of our response to Terrorism. And two weeks ago, the Home Secretary and I announced clear measures, a tough new approach and a new commitment to crack down on offenders and keep people safe.”.

It’s National Apprenticeship Week and major Insurers AXA and Aviva have offered a peek into their respective programmes in the UK. AXA has released its apprenticeship figures for 2019, which show that two-thirds of those who took part were existing staff. Of the various courses, the most sought after involved underwriting, team lead skills and customer service. According to AXA, it has invested around £2.3 million on 226 apprenticeships over the past two years.

As multiple countries grapple with the coronavirus infection, individuals and organisations are scrutinising their insurance policies to see if they are covering the losses caused by the epidemic. On the ground, several Insurers have also launched efforts to support the fight against the infection. A report said that while experts agree that many insurance policies may pay out, quite a few policies also have deliberate exclusions for epidemics and pandemics. The experts added that it is too early to say how much the virus outbreak will cost the insurance industry.

Qatar Insurance Company (QIC) Group, which has made headlines in the UK for its links to Markerstudy, reported a net profit of US$184 million for the financial year 2019, with gross written premiums of US$3.528 billion. The company’s net profit increased by 1.1% from US$182 million in 2018. Meanwhile, GWP was up 1.88% from US$3.46 billion the previous year.

At the last NetDiligence Cyber conference held in London, Head of Cyber and Technology Underwriting Performance at AXIS Capital, James Creasy, contributed to a discussion regarding Cyber warfare and exclusions. Following up on this event, Creasy gave his perspective on the significance of major Cyber events on increasing awareness of Cyber risk and the importance of educating Brokers and clients in this area. Creasy, who got his start in the insurance industry as an Underwriter for W R Berkley, has seen first-hand the rapid growth within the Cyber insurance industry in the last five years. When he joined Novae Group in 2015, Creasy said, he was part of a team of three. When AXIS bought Novae in 2017, the team became much larger and has continued growing substantially since then.

A lack of automation and old-fashioned business practices have not only cost the Lloyd’s market money but have also impacted the reputation and perception of the industry, according to Srinivas Rao, Senior Vice President and Global Head of Technology Services at Sutherland. Having worked in digital transformation and IT services for over two decades, across a number of industries, a lot of Rao’s recent work within the insurance sector has centred on the application of Robotic Process Automation to improve operational efficiencies and drive profit, as well as implementing emerging technologies to improve customer experience.

Simon Parrish, SME & Corporate Partner Underwriting Manager at Allianz Insurance, detailed how this team recently had the opportunity to review its operations which led to the creation of two new roles within its SME business, filled by Anneke Graham as SME Portfolio Manager and Mark Josephs as SME Insight Manager. Speaking on these appointments, Parrish highlighted his belief that good ideas propagate through a business by moving people from team to team. While it is also valuable to bring in external hires due to the fresh perspective that they offer, he said, the retention of talent is key.

The world’s largest publicly traded property and casualty insurance company has introduced “Non-Damage Terrorism Solutions,” an insurance proposition designed to bridge gaps in traditional terrorism business interruption policies. Chubb’s new offering is a single policy that protects against non-damage business interruption while also providing employee and customer care assistance as well as event cancellation coverage. In addition, the latter includes an extension for war.

Ignite Systems has launched a chatbot service for its Broker clients. The chatbot automates a range of administration tasks, including changes to policy details and direct debit payments. As well as generating quotes and changing account passwords, the chatbot can cancel policies without requiring human intervention.

Marsh & McLennan is carrying $6.8bn (£5.2bn) in debt relating to its purchase of JLT, full-year financial results for 2019 have revealed. The firm issued $6.1bn in notes to fund the acquisition across January and March 2019, as well as covering “related fees and expenses” and “certain JLT indebtedness”. Interest on the debt has since totalled $0.7bn.

Aon has reported a 2% revenue rise to $11.03bn in 2019, up from $10.77bn in 2018. The global Broker also posted an overall profit of $1.53bn for 2019, a 35% rise on the $1.13bn achieved last year. There were no figures available for the Broker’s performance in the UK.

Having legal expenses insurance has become ever more important for motorists in recent years and is about to become much more so with the implementation of the Civil Liability Act, which was passed into law at the end of 2018. ARAG policyholders are already protected against the risks and demands of the new regime. We updated our Motor policies last year, almost as soon as the measures became law, knowing that some policyholders insured in 2019 would need to make claims under the new system.

Total new worldwide funding commitments to the InsurTech sector in 2019 were US$6.37 billion, 33.9% of the historical total, following a record-breaking $1.99 billion of investment in 75 projects during Q4 2019, according to the new Quarterly InsurTech Briefing from Willis Towers Watson. During the year, eight “unicorn making” rounds of investment took place, creating five new 'unicorns' (privately held start-ups valued at over $1 billion), of only 10 InsurTechs globally that have reached this threshold. 2019 also saw a 90% jump in investment rounds that exceeded $40 million.

Financial results for the insurance industry keep on coming, with Willis Towers Watson (WTW) being the latest to report for Q4 and the full year – and its numbers are nothing to scoff at. In fact, the global broking and advisory company’s results were up across the board. Highlights include total revenue increasing by 13% to US$2.69 billion (around £2.07 billion) for Q4 and by 6% to US$9.04 billion (around £6.97 billion) for the year, as well as the firm seeing 5% organic revenue growth across all businesses and 6% growth overall.

Willis Towers Watson (WTW) has launched a new report that takes a critical look at the renewable energy market, noting that the industry is facing “several new realities” at the beginning of the decade. The global brokerage giant’s “Renewable Energy Market Review for 2020” identified five new realities that the renewable energy market has to contend with. 

International General Insurance Holdings Ltd (IGI) has announced that it has received regulatory approval from the Bermuda Monetary Authority in connection with its previously announced business combination with Tiberius Acquisition Corp. This approval, received on 28th January 2020, is one of necessary steps towards successfully completing the transaction with Tiberius. IGI is awaiting approval from additional regulatory agencies including the Prudential Regulation Authority (UK) and the Dubai Financial Services Authority.

When discussion turns to equalising the playing field of opportunities within the broking sector, the development of Brokers beyond the London market is an essential consideration. For Bethan Perris, Client Manager at Vista Insurance Brokers, this has been an area of focus throughout her career to date and, in a recent interview, she discussed the importance of professional development training opportunities for Brokers in regional markets. Looking at the Manchester broking sector, Perris said, she believes that while the London market might think it overwhelms the regions, this is not entirely accurate. The Manchester market, she said, is actually quite self-sufficient, particularly when the incredibly strong insurance community within this area is taken into account.

It’s fair to say that 2019 was, generally, a successful one for Beazley Group – the specialist Insurer reporting a surge in profits and premiums. In its results announcement, the company reported profit before tax of US$267.7 million (around £206 million) – a leap from last year’s US$76.4 million (around £58.7 million). Its gross written premiums (GWP) also climbed by 15% from US$2,615.3 million to an eye-catching US$3,003.9 million.

Starting November 05 this year, companies that offer retail travel insurance will have to signpost certain consumers with pre-existing medical conditions (PEMCs) to a directory of specialist providers. The new requirement is part of the changes, made by the Financial Conduct Authority (FCA), aimed at helping those with more serious PEMCs better navigate the travel insurance market.

Insurance company Staveley Head Limited is now looking to sell what’s left of the business as it goes into administration and lets go of a majority of its workforce. “Staveley Head Limited was engaged in a three-year contract with its main Insurer, which was prematurely terminated in November 2019 as a result of the Insurer’s financial issues,” explained joint Administrator Steven Muncaster of Duff & Phelps in a statement.

 

Seasoned Executive Kevin White has joined AFL Insurance Brokers Ltd to lead the company’s Professional Indemnity division in his capacity as Director.

Applied Systems Europe have announced that it has appointed Andy Fairchild as its new CEO. He is set to lead the European business as it looks to expand its digital Broker technologies across the market.

Fidelis Insurance has announced that founder member Daniel Burrows has been promoted to the role of Group Managing Director for the Fidelis Group and Ian Burford has been appointed CEO for Fidelis Underwriting Ltd.

Aon has announced the appointment of Emma Carpenter as its Global Super Yacht Leader. Carpenter will join the company in March and will drive the development of the company’s super yacht insurance broking business globally. She will be based in London. Other senior appointments to its EMEA M&A practice in the past quarter include, Adrian Lamasz has been appointed to the role of Head of Regional M&A and mid-market UK, leading mid-market private equity and corporate M&A across the UK regional market. Benoit Geurts has been appointed Managing Director, EMEA, Aon Intellectual Property Solutions. Geurts will lead M&A interactions for Intellectual Property Solutions across the EMEA region and will also be responsible for Northern Europe/Nordics.

Global Risk Partners (GRP) officially has a new majority owner. It has been revealed that Searchlight Capital Partners, the global private investment firm, will acquire a majority stake in GRP with Founders Peter Cullum CBE and David Margrett, as well as founding Investor Penta Capital, retaining minority stakes. The move will also see Mike Bruce, Group Managing Director, step into the role of Group Chief Executive. Margrett will become a Non-Executive Chairman, with Cullum retaining a role on the board as a Non-Executive Director.

It has been announced by AmWINS Group Inc. that Matthew Crane will succeed Frank Murphy as CEO of THB Group (“THB”) and President of the international division of AmWINS. This will come into effect once Crane’s existing contractual terms are met later this year.

CNA Hardy has appointed Lewis Hepper as Life Science Underwriter. Hepper will be responsible for building relationships with Brokers and driving a profitable book of life science business across both the Lloyd’s and company platforms. Nick Bellamy has been appointed as Risk Control Director. In this newly created role, Bellamy will be responsible for Cyber and technology risk control across all CNA Hardy regions.

Markel International has appointed Carl Titterton as Divisional Managing Director of trade credit, political risk and surety, effective 1 February 2020.

Legal Protection Group (LPG) has announced the appointment of Darren Weekes to the newly created role of Partnership Development Manager. Neil McDermott also joins in the new role of City Underwriter.

John Neill has been appointed as a Senior Manager of Castle Insurance Services based in County Durham. He is to work closely with the existing team to deliver a challenging growth strategy and to identify potential acquisition opportunities.

Steven Beard has stepped down as CEO of Broker RFIB, parent company Integro Insurance Brokers has announced.

MyPolicy Group, the fast-growing InsurTech focused on precision risk pricing and telematics, have announced the appointment of Alan Whalley as Chairman.

To better manage its Cyber risk portfolio, AXA XL has created the role of Global Chief Underwriting Officer for Cyber, appointing Elizabeth Benet to the position.

 

 

 

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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