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General Insurance Newsletter Friday 7th June 2019

06 Jun 2019

Insurance News

Global insurance, risk management and consulting services firm, Gallagher, has completed the acquisition of Jardine Lloyd Thompson Group plc’s (JLT) global aerospace retail and wholesale insurance broking operations. The deal was completed on June 01, 2019, giving Gallagher a specialist aerospace presence in in the US, UK, Canada, Australia, New Zealand and 10 other countries in Europe, Latin America and Asia. As part of the deal, the global insurance brokerage has also taken on the assets of Hayward Aviation, a UK insurance Broker that specialises in Aviation for high-net worth individuals and smaller airlines.

In further news...Organisations need to ensure they are adequately protected with Business Interruption cover in case they become target of a malicious attack, or risk losing millions of dollars due to the flow-on effects of a data breach, according to a recent Gallagher Market Overview Report. Gallagher said data security is increasingly interconnected with C-suite liability, with companies not only facing up to $10 million or more in penalties for breaches and publication of the identity of the organisation involved, but also impact on the share prices in case of Business Interruption.

Last September Mr Justice Soole of the Queen’s Bench Division of the High Court found the Motor Insurers’ Bureau (MIB) liable to compensate a claimant who suffered injuries following an incident on private land. Now the England and Wales Court of Appeal has upheld the decision. In the UK, the MIB is a victim’s recourse in cases where the driver at fault is uninsured or untraced. Under the Road Traffic Act 1988, however, compulsory Motor insurance only applies to vehicles on public terrain; unlike the European Union’s Motor Insurance Directive which spans vehicles used in traffic both on public and private roads.

“Today is the first step in our plan to make Aviva simpler, more competitive and more commercial.” Those were the words of Aviva Plc Chief Executive Maurice Tulloch when the British insurance giant confirmed an anticipated shake-up within the firm. It’s been announced that the life and general insurance (GI) businesses of Aviva in its home market will be managed separately, with Angela Darlington named as interim CEO of UK Life while the GI unit will be under the leadership of Chief Executive Colm Holmes.

In further news...The value of fraudulent claims detected by Aviva has fallen by 11% (£10 million) last year, as Aviva detected £80 million worth of suspect or proven fraudulent general insurance claims in 2018. Whiplash reforms are credited with the drop in Motor fraud, but the value of Liability fraud grew by 20%. In 2018, Aviva detected 16,700 fraudulent applications (£29 million), an increase of 20% over 2017’s figures. The scale of insurance fraud is still substantial with £220,000 fraud uncovered by Aviva every day

Meadons Insurance Brokers Limited is now owned by Global Risk Partners (GRP) firm The County Group. For an undisclosed amount, County snapped up the Shropshire-based Broker after years of ‘admiration’. Meadons, whose offerings include a specialist scheme for UK cricket clubs, brings more than six decades of personal and commercial lines experience to the group. Commenting on the acquisition, GRP group Managing Director Mike Bruce noted: “The County Group continues to go from strength to strength, building their portfolio of businesses as our North West hub. I extend a warm welcome to the Meadons team and look forward to the business thriving under new ownership.”

QBE Insurance Group has pledged to source 100% renewable electricity across its global operations by the end of 2025 through RE100. RE100 is a global initiative led by The Climate Group in partnership with the CDP, which brings together some of the world’s most influential companies to accelerate change towards zero-carbon grids, at a global scale. To help achieve 100% renewable electricity by 2025, QBE said it will either seek to source renewable electricity locally in each of its operating divisions, or where this isn’t possible, purchase renewable energy certificates.

In other news...The risk and insurance industry is embracing new data and analytical tools, but the approach is largely sporadic, rarely joined-up and few standards are being developed. Transforming data into information that informs good risk management and interacts with innovative and more accurate insurance products is the challenge. Risk Managers are doing more than ever before to collect and analyse data, but there is a clear skills gap that must be addressed. QBE partnered with Airmic for their 2019 member research to determine understanding, capabilities and use of data and advanced analytics by the risk profession. The corresponding report "Turning data into information" highlights that in order to extract maximum information from data, it is essential that senior figures facilitate new analytical skillsets and leverage third-party partnerships.

Expect a more consistent shift towards firming market conditions, is the message broking giant Aon Plc is sending out to commercial insurance buyers in Europe. In the UK, in particular, Aon has identified three lines of business that are seeing rate increases above 10% amid potentially contracting capacity. Publishing an insurance market heat map, Aon examined the impact of shifting market conditions as well as the implications for insurance buyers in 13 European countries and eight lines of business. According to the heat map seen by Insurance Business, there’s not much trouble in Switzerland plus Scandinavian countries Finland, Norway, Sweden and Denmark where capacity is generally available with rates either down, flat, or firming 5-10% in certain lines. In the UK, these business lines are D&O, PI and Marine Cargo; Germany – Cyber as well as Property & Business Interruption; the Netherlands – D&O, Motor Fleet, PI, and PBI; Belgium – General Liability; France – Motor Fleet; Italy – PBI; Spain – Motor Fleet; and Portugal – PI.

A new report by Allianz Global Corporate & Specialty SE (AGCS) has revealed that large shipping losses are at their lowest level this century – although there are still emerging risks the industry has to address. According to the report, entitled the “Safety & Shipping Review 2019,” there were 46 total losses of vessels that were reported around the shipping world in 2018 – down from 98 losses the year earlier. The losses last year were driven by a significant decline in activity in Southeast Asia, considered the global loss hotspot, as well as quieter hurricane and typhoon losses. Weather-related losses only totalled 10 last year. Despite the decline in losses, the number of reported shipping incidents overall – 2,698 in 2018 – shows little decline; less than 1% year-on-year. Machinery damage was identified as the most common cause of shipping incidents, accounting for more than a third of the incidents. The second most common incident, collision, only had about half of the number of reports of machinery incidents.

In other news...Allianz Insurance has launched Allianz Risk Management, a website to help Brokers and their SME clients manage the threats they are exposed to. The provider explained that the website provides guidance on a wide range of topics, from fire or flood to new challenges such as data management, Cyber threats or managing mental health in the workplace. According to Allianz, the website aims to keep Brokers up-to-date with the changing risk landscape, as many SMEs will look to their Brokers for support and information.

The Airmic 2019 Conference in Harrogate has seen the launch of a new Cyber risks report from Property & Casualty insurance giant Chubb. Created in collaboration with global law firm Clyde & Co, the "Managing Tomorrow’s Cyber Risks and Multinational Insurance" report provides an analysis of the current international Cyber risk landscape – shining a spotlight on what multinational corporations should take into consideration to not only manage but also prevent Cyber incidents.

Risk management is moving from the back office to centre stage, creating opportunities for risk and insurance professionals to reposition themselves as valued strategic business partners, the results of the 2019 Airmic member survey have revealed. The survey results paint a picture of an increasingly ambitious profession in which Airmic members are keen to upskill, gain exposure to their leadership and attain new knowledge relevant for the changing business landscape. It also reveals a changing profession, with a seven-point increase from 2017 in the percentage of members who are responsible for risk management, demonstrating the growing priority businesses are placing on the management of risk. This growth has primarily come from new members joining Airmic. The results revealed that Insurers are providing a wider range of services and in particular are offering more guidance on how to manage intangible risks rather than simply paying out when things go wrong — a development welcomed by Risk Managers.

CNA, one of the largest US Property and Casualty Insurers, has announced the launch of CNA ComPass, a technology platform that allows CNA and its strategic network partners to write and manage local admitted placements around the world in real time. The platform was launched to help the Insurer meet the needs of global businesses. “In today’s globalised business environment, success is increasingly sought outside a company’s own borders,” said Kathleen Ellis, Senior Vice President of International Solutions for CNA. “While domestic insurance policies typically do not have the coverage to help address overseas events, international business coverage that follows a business and employees worldwide is critical. With 226 business partners in 164 countries around the globe, our strategic network allows us to service multinational organisations with complex local policy requirements more efficiently through CNA ComPass.”

PIB Group has put its foot firmly on the acquisition gas, revealing its second acquisition of the year and 20th investment since 2016. The insurance group, the name behind companies such as Citynet Insurance Brokers, Lorica Insurance Brokers and aQmen Underwriting, among others, has acquired the COBRA group of companies, subject to FCA approval. COBRA is described as a “network-centric proposition” for independent insurance intermediaries. It offers a host of services for members, agents and clients including: COBRA London Markets, COBRA Insurance Brokers, COBRA Underwriting Agencies and COBRA Network. The deal is subject to regulatory approval and is PIB’s 20th investment since 2016. It most recently bought Optis Insurances in Ireland in February. Following the Optis purchase, PIB Chief Executive Officer Brendan McManus stated that the business wants to expand into more countries in Europe. PIB is also currently looking to raise £100m - £200m to fund continued growth.

Open GI has joined forces with BNP Paribas Personal Finance to offer premium finance via Brokers for SME customers. Open GI claimed the move, which also includes personal finance, would offer Brokers access to “stronger” premium finance products. According to the software house, the application presents an end-to-end finance solution offering real-time pricing rates and an affordability checker - all geared at simplifying the process of selling premium finance into the personal lines and SME market.

Ansvar is upgrading from SSP’s Insure/90 platform to SSP’s new cloud-based insurance solution, SSP Digital Insurance Platform. SSP Digital Insurance Platform is a browser-based platform, incorporating a suite of market-leading products, for Insurers to manage their clients, policies, billing and claims. The different components within the SSP platform include product development, pricing, policy administration, claims and advanced multi-channel user experience capabilities.

HM Revenue & Customs has launched a call for evidence on the operation of the Insurance Premium Tax (IPT) and changes that may help to ensure it operates “fairly and efficiently”. The review was first announced in the 2019 Spring Statement by Chancellor of the Exchequer Philip Hammond and the consultation will close on 17 July 2019. The call for evidence will look at how the administration and collection of IPT can be modernised as well as the extent to which there are emerging practices leading to unfair tax outcomes and how these might be effectively addressed.

Tasker Insurance Group (TIG) has made it second deal of 2019 with the acquisition of Hobbs Broking which trades as Hobbs Associates. According to Tasker the deal has progressed its strategic growth plans and adds Life Sciences and Technology to its list of specialisms. The deal, for an undisclosed sum, follows its buy of Castle Insurance Consultants, specialist Tour Operator & Travel insurance broker, in March this year. Hobbs Broking, which trades under Hobbs Associates is TIG’s second acquisition of 2019. Robert Organ the Chief Executive said that for now the Hobbs brand will stay as the firm is “working on the integration plans at the moment” but that “ultimately it will be integrated into Tasker insurance”. The acquisition was for an undisclosed sum but Organ said Hobbs will bring £2.5m gross written premium (GWP) to Tasker.

Glasgow-based Broker Blackford has bought the Edinburgh customer book of TL Dallas. Comprising around 100 clients, the new portfolio has a collective premium value of more than £3m. The four Brokers staffing Blackford’s new Edinburgh office are following their clients from TL Dallas, Blackford Founder and Managing Director Tom Aldridge has confirmed (a new team of Brokers has also been hired to manage the acquired portfolio). As well as its regional responsibilities, Blackford expects the Edinburgh team to be instrumental in generating new business across the UK. As part of its growth plans, the firm is planning to hire 18 additional staff in the next three years. 

A guide outlining good practice for Brokers when undertaking an internal audit has been developed by the Society of Insurance Broking (SIB), in association with PKF Littlejohn and the Chartered Insurance Institute (CII). The SIB detailed that it had been produced in response to members’ requests to provide a summary of good practice and it detailed the rules and current stance of the regulator on the topic. The document covers the importance of effective governance in risk management and accountable oversight of internal controls and seeks to explain the ‘three lines of defence model’. It also makes a series of recommendations on areas of improvement.

Lamp Insurance’s liquidation application was accepted by the Supreme Court of Gibraltar on 31 May. The court has appointed an Official Receiver as liquidator of the company. In turn, the Official Receiver has enlisted the services of Grant Thornton Limited’s Gibraltar office to “advise and assist on matters relating to the operation and conduct of the liquidation”. Jimmy Barber, Chief Operating Officer at FSCS, said: “We are still in the process of identifying how many UK customers are affected by the failure of Lamp Insurance. We are working closely with the liquidators to make sure that all eligible policyholders affected by the failure of Lamp are compensated accordingly.”

Geospatial Insight has announced the launch of its new product PropertyView, which derives critical property characteristics from satellite imagery, leveraging advances in artificial intelligence and scalable cloud computing. Providing new insights that improve risk targeting and pricing, PropertyView will empower Insurers and Risk Managers to make better risk-based decisions on individual properties or on a broad portfolio of Property risks.

There has been a 23% increase in garden thefts in 2018 yet 50% of policyholders don’t insure. Half of homeowners do not consider the items in their garden when buying Home insurance according to the AA Insurance Consumer Index. Two thirds (64%) of gardens in Northern Ireland could be underinsured as they did not consider any aspect of their garden contents when buying their Home insurance. More than half of homeowners in London (54%) and the North East (53%) also did not add their garden items to their insurance.

Homeowners have seen a 1.2% drop in average Home insurance premiums in the past year, despite rising subsidence claims, analysis from data analytics expert Consumer Intelligence shows. Across the market, average overall premiums sit at £134. The under-50s have benefitted from the biggest drop this year at 1.7%, bringing average premiums to £139. Premiums for the over-50s have seen a slight drop of 0.6%, with the average landing at £128. However, premium reductions have slowed in the last 3 months, with over-50s prices remaining stagnant and the under 50s reductions slowing to 0.7%.

MORE TH>N & Vetfone say pet owners could harm their pets by giving them human supplements and medicines. More than a third (35%) of dog-owners rely on search engines to diagnose pet problems rather than seeking professional advice, with nearly half (48%) of those pet owners administering treatment based on articles they had read online. According to the findings from the Pet insurance specialists, Pet owners are also making dangerous decisions to change their pet’s body shape to fit with Instagram ideals.

At the end of March, ARAG was proud to join like-minded businesses and other organisations that share a common goal in preserving access to justice in the UK as a founder member of ACSO, the Association of Consumer Support Organisations. Underwriting & Marketing Director David Haynes explains why. While there are numerous industry bodies that have an interest in preserving the rights of everyday people to seek and secure justice through our embattled legal system, they are diverse in both their objectives and their constituencies. From the Legal Action Group to the Law Society, the Motor Accident Solicitors Society (MASS) to various trade unions, there is no shortage of will to stand up for consumer rights in the civil justice system. Important as all of these bodies are, some have questioned whether their number and diversity converts that will into action as effectively as it might.

Boris Johnson was paid £25,540 to speak at the British Insurance Brokers’ Association’s (Biba) Conference, according to the House of Commons’ register of members’ financial interest. According to the document, transport for Johnson and one member of staff was also provided. By comparison, the former Foreign Secretary received £38,250 for a speaking engagement for Citigroup in London on 12 March this year, and £28,900 from KNect365 for a speech on 4 December 2018, also in London.

Clear Insurance Management has revealed a profit before tax of £742,485 for the year to 31 October 2018, a decrease of 67% from last year’s figure. The firm’s documents, posted on Companies House, also showed that the Broker’s operating profit fell by 69% to £698,431 from £2.2m in 2017. However, its turnover rose by 24% compared to the previous year, from £14m in 2017 to £17.3m in 2018.

Almost three-quarters (71%) of Brokers are unaware of technological developments in construction, HSB Engineering Insurance has discovered. The provider stated that the finding is at odds with the importance of the industry to Brokers. Construction policies are offered by 76% of Brokers, and the sector makes up 16% of their portfolios on average. John Nicholls, Construction Product Leader at HSB, said: “It’s clear that in order to provide the most appropriate insurance, Brokers and Insurers must understand how current and emerging developments are shaping construction industry operations.”

Aviva has announced a plan to reduce costs which will lead to around 1,800 role reductions across the company over the next three years. The provider said in a statement that it will “look to ensure that redundancies are kept to a minimum wherever possible, for example through natural turnover”. The Insurer further explained it has engaged with Unite and its employee representative bodies and will continue to consult on specific proposals.

Axa XL Insurance has joined forces with IPRS Health to create a new Employer’s Liability insurance product, Axa XL HealthAssist, for UK organisations. The Insurer detailed that Axa XL HealthAssist offers firms a holistic way to monitor wellbeing through a combination of a traditional Employer’s Liability policy with a wellness, health and injury rehabilitation service. As stated by the firm the rehabilitation service will be provided by IPRS Health and offers covered employees access to physiological and psychological support ranging from after-injury physiotherapy to mental health counselling.

AXA’s Tradesmen & Professionals product is designed for manual and clerical workers. With the functionality to pick and choose cover required to protect over 200 trades, ranging from carpenters and joiners to beauticians, you can tailor cover to your client’s needs.

TT Club, the leading international transport and logistics insurance provider, has announced its financial results for the year ended 31 December 2018, and A.M. Best affirms its A- (Excellent) rating. Chairman of TT Club, Ulrich Kranich, said: “It has been a good year for the Club, although 2018 was another difficult year for the insurance industry. The global Broker Aon has assessed the 2017 and 2018 years as the costliest back to back years for insured losses. Such levels of losses have not had the expected positive impact on pricing. This, coupled with the continued availability of capital, has impacted the pricing of risk, the ability of Insurers to recover their outgoings and balance their books to the required level of profitability.

It is no secret that austerity has had a significant impact on most people’s ability to get justice, whether they have a family, contract, employment, criminal or almost any other sort of legal problem. Drivers are the latest to be hit, with legislation that is intended to target whiplash claims but will actually impact all motorists. The Civil Liability Act very specifically targeted those injured in motor accidents. By mandating low, fixed levels of compensation for even serious soft-tissue injuries and raising the small claims court limit for road traffic accident claims, the legislation has undermined motor legal protection for all policyholders.

Market Movers and Shakers

Tom Stoddard will no longer serve as Chief Financial Officer of Aviva Plc come July. In an announcement, the British insurance giant said Stoddard is stepping down from his post as well as from the board on June 30. He will, however, be placed on garden leave from July 01 until December 31 – during which time he will continue to receive his salary and contractual benefits – and assist in the transition. “While I will miss all the friends I have made here, Aviva has a strong finance team and it is now time for me to clear the way for others to step up, as I consider new opportunities,” stated Stoddard, who will be eligible for a pro-rated bonus in respect of the 2019 financial year to reflect the portion prior to the commencement of his garden leave.

Gemma Nunn has moved to Allianz Holdings Plc subsidiary Home & Legacy. The claims expert – who spent eight years at Allianz UK, most recently as Technical Team Leader for the Property claims validation unit – has been tapped to serve as Operations Manager at the independent High Net Worth insurance specialist. Working with Home & Legacy’s leadership roster, Nunn will be in charge of leading and developing the new and existing business teams. Her appointment comes less than a month since the wholly-owned Allianz subsidiary made key improvements to Household e-trading on Home & Legacy Online.

Reid French has stepped down as Chief Executive Officer of Applied Systems and will now move to an advisory role as a Director on the firm’s board. The software house stated that French will be succeeded by Taylor Rhodes, who it noted joins the firm with leadership experience in technology and tech-enabled services. His former positions include a CEO post at SMS Assist and he has also been Chief Executive of Rackspace. In addition, Rhodes has held leadership roles in enterprise, financial and corporate strategy at Electronic Data Systems Corporation.

Bought By Many, the UK’s fastest growing insurtech, is delighted to reveal Charlotte Halkett has joined the business as its first Chief Commercial Officer. Bought By Many has grown its Pet insurance business more than 100% year on year since the products launched in 2017, while maintaining industry-beating customer satisfaction scores with unique products built around customer needs. Charlotte will be a key leader in pushing Bought By Many to hit its further ambitious growth targets. Charlotte is an insurtech veteran, with an insurance career initially forged as a general insurance actuary before joining the team that launched telematics business insurethebox in 2010 - helping this Motor insurance disruptor from launch to sale, collecting over 3 billion miles of data on the way. Charlotte then moved to Buzzmove to construct and launch its Home insurance product - Buzzvault.

Baroness Zahida Manzoor CBE has been appointed Chair of the Financial Ombudsman Service. The appointment was made by the FCA Board with the approval of HM Treasury. Baroness Manzoor will take up the role on 2 August 2019, succeeding Sir Nicholas Montagu who is stepping down after more than seven years in post.

Markerstudy Retail and Affinity has announced the appointment of Ferg McCall as Head of Business Development. The role will see him align and grow the businesses’ activity with responsibility for its core lines which include Pet, Gadget and Commercial. With over 15 years’ experience in similar positions at Pukka and Van Compare, Ferg will use his wealth of experience to identify and drive new opportunities, whilst nurturing existing relationships.

Rupert Armitage is stepping down from his position as Auto Windscreens’ Managing Director, with Operations Director James MacBeth, being appointed to the role. James’ career with Auto Windscreens spans nearly 30 years. Commencing as a Trainee Technician in 1992 and progressing to Fitting Centre Manager, James took up the position of Regional Manager in 2013, two years after the business was acquired by Markerstudy Group. He was then promoted to Operations Director in 2016.


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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