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General Insurance Newsletter Friday 7th September 2018

07 Sep 2018

Insurance News

InsurTech start-up Worry+Peace has opened up its smart directory offering, Marketplace 2, to Brokers as Founder James York declared “guerilla war on cost-of-acquisition and all its distortions”. The start-up claimed the directory is the first of its kind for the insurance industry and will offer self-service tools for Brokers’ insurance distribution. York stated that the aim is to connect Brokers with consumers. Brokers can upload their products to the platform and in turn consumers can search for policies on the database, which includes around 750 product varieties. The start-up noted that all results will be randomised. York added: “If someone wants to be number one for every search they may enter an auction where they all bid against each other every seven days. Whoever wins gets the spot for seven days. That’s how we’ll be lead-generating.”

RSA has opened its new office in Luxembourg as part of its preparations for the UK’s exit from the European Union. The Insurer stated that the new office will be led by Richard Turner, who previously oversaw RSA’s EU business from the UK and has relocated to Luxembourg to take up the Director post. The office will provide a platform for RSA in Europe post-Brexit and the Insurer noted it would minimise disruption to its business with EU-based customers while ensuring it continues to serve UK customers’ needs in Europe. RSA has previously said the office will act as headquarters for its existing European Union branches in Belgium, France, Germany, Spain and the Netherlands.

Underwriters at Lloyd’s of London have been given permission to insure legal cannabis-related activity that takes place in Canada. According to a report by the Financial Times the marketplace sent a note to Underwriters explaining that the legalisation of cannabis-related activity in the country could give rise to “new opportunities for Insurers considering writing related risks”. The report stated that Lloyd’s took legal advice to ensure that offering insurance to cannabis producers, distributors and sellers in Canada would not break laws outlined in the UK Proceeds of Crime Act. Canada is set to legalise recreation use of the drug in October this year. 

In further news, Lloyd’s of London new innovation sandbox, Lloyd’s Lab, has picked ten InsurTech start-ups to join its first cohort. At an event in London on 3 September, 20 teams pitched their ideas to the Economic Secretary to the Treasury, John Glen MP and Lloyd’s Chief Executive Officer Inga Beale. The aim of the programme is for start-ups to develop products, platforms and processes that will help transform Lloyd’s to a technology-driven market. The corporation noted that the 20 start-ups presented ideas ranging from live-streaming drones for fast risk and disaster assessment, to harnessing the Internet of Things for live cargo tracking, to on-demand insurance for the gig economy.

Also within the organisation; Lloyd’s of London recently announced it is carrying out a strategic review of all aspects of its business, following a £2 billion loss in 2017. Executives are seeking to ensure the world’s oldest insurance market remains cost-competitive - and they’re willing to ditch bad business lines if necessary. In June, Fitch Ratings assigned the market an IFS rating of ‘AA-‘ with a negative outlook due to Lloyd’s underwriting profits being pressurised by worsening attritional losses, lower risk-adjusted premium rates and high expense ratios. Lloyd’s high exposure to worldwide natural and man-made catastrophes only increased the pressure on the market’s underwriting profits, according to Fitch. The insurance giant recently announced it will require syndicates to place at least 30% of risks electronically by the end of 2018 in an effort to reduce expenses in its operating model. It is also reviewing poor performing lines of business to ensure utmost efficiency in the market. 

Things have become official between Phoenix Group Holdings and Standard Life Aberdeen Plc (SLA), with the UK-headquartered firms announcing the completion of the mega insurance deal involving the latter’s Standard Life Assurance. Described by Phoenix Chief Executive Clive Bannister as “strategically and financially compelling,” the transaction supports the company’s vision to be the leading life consolidator in Europe. SLA chair Sir Gerry Grimstone, on the other hand, called it “momentous” while sending his “very best wishes for the future” to both employees and customers who will be moving to the new owner. “I am delighted that we have completed the acquisition of Standard Life Assurance and I would like to extend a warm welcome to our new colleagues joining Phoenix,” commented Bannister. “This deal will result in Phoenix becoming Europe’s largest consolidator of heritage life funds and the ongoing strategic partnership with Standard Life Aberdeen Plc will provide additional growth opportunities.”

AXA adds Conroy Downer to Insurance Fraud Register. Champion boxer Conroy Downer now owes AXA £13,046 in legal costs. In another case of social media posts outing fraudulent claimants, the Northampton County Court found Downer to have been fundamentally dishonest in his car accident claim submitted to the Insurer following a low-speed collision in Luton in June 2016. The boxing champ, who had complained of neck and back injuries, had a different story to tell as far as his Facebook photos were concerned. A probe by AXA and law firm DAC Beachcroft showed that not only did Downer post images of his workouts online but also failed to visit his doctor despite the supposed injuries. Moreover, the damage to the claimant’s Mitsubishi Warrior did not support his injury assertion. “We are delighted that the judge made a finding of fundamental dishonesty against this driver who obviously thought Insurers were an easy target,” commented DAC Beachcroft counter fraud head Catherine Burt. “The outcome demonstrates the significant consequences of pursuing a fraudulent claim.”

Bluefin Underwriting has rebranded as Victor Insurance, following the global unification and rebrand of the Schinnerer Group earlier this year. The managing general agent (MGA) is part of Marsh & McLennan’s underwriting arm after the broking firm bought Bluefin from Axa in November 2016. Prior to the deal Marsh had underwriting businesses in other parts of the world, but not in the UK. Paul Drake, President of Victor International and Victor Insurance in the UK, said the business was looking to work with more Brokers as it planned to double its UK gross premium income by 2021. It currently handles $100m [£78m] of business. “We’ll do that by expanding our footprint, expanding our Broker capability and introducing new products and specialisms,” he has said. Victor specialises in agriculture, third sector, financial lines, small and medium enterprises and transportation risks.

Ardonagh, Direct Group and Davies Group have all declined to comment on the news of sales talks, it has been reported. According to the report Ardonagh is in advanced discussions about selling the claims side of Direct Group to Davies Group. Ardonagh bought Direct Group, then known as Ryan Direct Group, in April last year. At the time of the deal the Doncaster-headquartered business was a provider of insurance distribution and of claims handling services. A spokesperson for Ardonagh said the company declined to comment on “market rumour and speculation”. Davies Group’s core services include claims, insurance services, complaints handling as well as compliance and regulatory support employing 1,250 people across the UK, Ireland and Bermuda.

Sabre Insurance Group investors BC Partners and founder Angus Ball have sold shares in the company worth £116.4m. The vendors sold a total of 44,757,377 ordinary shares at a price of 260 pence per share. This represented around 17.9% of Sabre’s share capital. Following the sale private equity firm BC Partners, Sabre’s former majority owners, will no longer have any shares in the Insurer, while Ball will own 1.8% of the company’s share capital.

Trireme Insurance Group, the international subsidiary of U.S. Risk Insurance Group, has bought MGB Insurance Brokers from Manchester Underwriting Management (MUM) for an undisclosed sum. MUM bought the Lloyd’s Broker in November 2013, when it was known as Senior Wright Indemnity and rebranded the Professional Indemnity experts the following month. MGB, which has been trading various guises since 2001, also lists D&O, Financial Institutions, Management Liability, Cyber Liability and Medical Malpractice among its specialisms. Nick Bender, joint Managing Director of MGB, said: “Glenn Gostling and I are delighted to join the U.S. Risk family of companies. “We believe their entrepreneurial culture matches up very well with ours and we are excited to be able to both supplement our offering to current Brokers and clients and to expand our client base through the U.S. Risk network of agents.” Manchester Underwriting Management (MUM) Chief Executive Charles Manchester has said it was “a good time to move on” after selling MGB Insurance Brokers to U.S. Risk Insurance Group. “It will be good for MGB, it will be good for us and it will be good for U.S. Risk, because they’re buying a good company”.

The Chartered Insurance Institute has confirmed that it will be moving on Monday 17th September into its new offices that are located at: 21 Lombard Street, London, EC3V 9AH. Its customer service and support teams are unaffected and staff telephone numbers will remain the same. The new office has a dedicated conference space for up to 50 people for events, as well as a welcoming area for visiting members called the Knowledge Lounge. The lounge will have a touch-down work space and members will have access to key resources including periodicals, reference books and specialist databases.

International General Insurance Holdings Limited (IGI) is proud to play an important role in the fourth annual Dive In Festival for diversity and inclusion in the insurance industry and host it in Jordan for the first time. The Dive In Festival, which is taking place in 27 countries and more than 55 cities around the world between September 25th - 27th, was created to encourage inclusive culture in insurance organisations under the theme #time4inclusion. This year marks the start of a two-year campaign, Awareness into Action, to harness the energy of previous years to encourage action across the sector. IGI will host Jordan’s first Dive In festival at the Grand Hyatt in Amman on 26th September, under the name ‘Glassed In Dive In’. The festival will include a discussion, which will be led by the renowned Mayyada Abu-Jaber, one of Jordan’s foremost advocates for women empowerment, on increasing the value of women in the workplace. Mayyada founded and headed Jordan Education for Employment and JoWomenomics and is Managing Director of the World of Letters. She is an ECHIDNA Global Scholar at the Brookings Institute.

The top global Reinsurers have been ranked and there is a new number one - Munich Re is back at the top, besting Swiss Re in the latest ranking based on reinsurance gross written premium (GWP). The German reinsurance giant – which has been ranked number one by A.M. Best year in and year out from 2010, except in 2017 – has snatched the prime position from its Zurich-headquartered peer. Publishing its 2018 top 50 ranking of global reInsurers, A.M. Best said the two behemoths comprise approximately 30% of the list’s GWP total. Rounding out the top five are Berkshire Hathaway, a leap from the fifth spot, Hannover Re and SCOR. “The nearly $10 billion reinsurance agreement between Berkshire Hathaway’s National Indemnity Co. and American International Group Inc. primarily drove Berkshire Hathaway’s jump in the ranking,” noted the global rating agency and information provider with a unique focus on the insurance industry. “Although the agreement between the two companies was finalised in January 2016, it was not accounted for until first-quarter 2017,” it explained. “Despite dropping in the ranking, Hannover Rück SE and SCOR SE experienced year-over-year double-digit gross premiums written growth.” Meanwhile QBE Insurance Group and W.R. Berkley Corporation fell by 14 and seven places, respectively, in what A.M. Best described as “the most notable downward movements” in the 2018 ranking.

Elsewhere in the business, it looks like Munich Re is serious about its digital strategy as it snaps up a US$300 million tech firm. Announcing its swoop for software company relayr, which is valued at US$300 million, Munich Re said it is taking a key step in creating business models in the industrial Internet of Things (IoT). Through its subsidiary Hartford Steam Boiler (HSB), the 100% acquisition will see the development of solutions that offer not only technology but also risk management, data analysis and financial instruments. A rapidly growing IoT firm, relayr provides enterprise middleware and IoT solutions for the digital transformation of industries. It employs around 200 people based in offices in seven cities in the US, UK, Germany and Poland. “The Internet of Things is already changing our world and has the potential to disrupt the traditional insurance and reinsurance industry through new business models, services and competitors,” commented Munich Re management board member Torsten Jeworrek. “This acquisition is a clear example of our strategy: we are combining our own knowledge of risk, data analysis skills and financial strength with relayr’s technological expertise.”

The UK’s Civil Liability Bill is making its way towards becoming a law, passing its second reading in the House of Commons, but not without scrutiny beyond Parliament walls. Perhaps the biggest critic of the proposed reforms is Access to Justice (A2J), whose spokesperson Andrew Twambley believes the latest debate “has made clear that the government has got its priorities wrong.” In A2J’s view, insurance firms are unfairly favoured in the whole endeavour to change personal injury claims in the UK. “It (the government) has been hoodwinked by Insurers and is not standing up for the rights of injured people,” commented Twambley, who called the reforms punitive. “Some reform is necessary, but the government’s current proposals tip the balance too far in favour of insurance companies. It’s not too late for ministers to make changes to their proposals to deliver a balanced package that safeguards the rights of injured people.”

Brightside partners with insurTech firm ahead of MGA launch. Brightside has partnered with RDT, creators of some of the UK’s most widely used insurance software and leaders in the field of insurTech, to bring its new MGA, Kitsune, to market on receipt of regulatory approval. Kitsune, which is part of Brightside Group, will operate on RDT’s Atlas platform, giving the MGA huge flexibility, rapid access to new markets, low cost of entry and complete control over its products.  Atlas will equip Kitsune to outperform the competition and demonstrates Brightside’s commitment to innovation and investment in market leading technology.  The end-to-end component-based platform, which can be deployed in the cloud or hosted in-house, will enable the MGA to make real time changes and continually enhance its proposition to take swift advantage of business opportunities. Leading edge data management and reporting capabilities will inform business decision making, while the orchestration of data from multiple external sources will advance underwriting capabilities and fraud prevention. Kitsune will be using RDT’s cloud-based managed service, which is highly scalable to accommodate future growth. “RDT put together a compelling proposition to develop our rating hub, policy administration system and data warehouse, which provides Kitsune with a fully integrated platform capable of supporting our business in an agile and flexible way,” noted Kitsune Managing Director Trevor Bowers. “We have already started working with the RDT team to build the capability we require to succeed. The announcement of our partnership with RDT is a key milestone for Kitsune and our work on the new MGA is progressing well as we build towards our launch later this year.”

Full-service global reinsurance Broker Capsicum Re sure has partnered with catastrophe modelling firm AIR Worldwide to take on 'Silent' Cyber risk. Verisk business AIR Worldwide continually collects data for its cyber risk models and teaming up with Capsicum Re promises the benefit of unique insights to identify and evaluate silent cyber exposures. The joint effort is aimed at enhancing the cover sector’s modelling of such perils. In addition, the Brokerage has adopted AIR Worldwide’s cyber risk modelling and analytics platform called ARC, which includes a wide range of cyber scenarios and models. “Given the rapidly evolving nature of cyber risk, it’s likely that insurance policy wordings will be challenged to keep up and some forms of silent cyber exposures could always exist,” noted Ian Newman, Global Head of Cyber at Capsicum Re. “Our goal is to better advise Insurers and Reinsurers about the nature of cyber risk and help the industry develop innovative risk-transfer solutions that truly reflect the underlying risk exposure. We’re excited to work with AIR to improve our industry’s ability to understand and manage silent cyber risks.”

New online insurance provider Dinghy has found an ally in ARAG. Teaming up to roll out “Freelancer Assist,” the two providers will combine their offerings to afford freelance professionals legal services and protection. Freelancer Assist – which consists of ARAG’s online legal resources, advice and insurance – will be part of all Dinghy packages. Currently the insurtech start-up offers Professional Indemnity, Public and Cyber Liability products, as well as cover for business equipment to independent workers. “Our customers tend to be comfortable with technology, so ARAG’s digital legal tools, which allow them to self-serve but fall back on expert help if they need it, are a perfect fit,” noted Dinghy co-founder Rob Hartley. “Legal Expenses insurance inevitably tends to focus on the risk of employment disputes, but that sort of cover is irrelevant to freelancers. ARAG has been great in putting together a package that really suits our specific customers at a price that reflects the cover but offers huge value to them.”

Compare the Market targets SMEs as it partners with Simply Business. The Broker stated that it expected to grow its customer base substantially and reach more small businesses and sole traders through the deal. According to Simply Business, it currently covers more than 1,000 classes of business particularly aimed at small businesses and landlords. Following the takeover Simply Business expanded into the US and promoted David Summers to the newly created role of UK Chief Executive Officer. In its latest set of financial results for the full year 2017 the company revealed a pre-tax loss of £470,000, which it said was due to costs from the acquisition by Travelers.

Broker Network Partners has added Yorkshire-based Lockyers to its growing portfolio. The commercial lines focused business controls over £5m of gross written premium employing 17 people. The firm, established in 1981, was already a Broker Network member and will continue to work out of Wakefield with the management staying with the company. Broker Network confirmed that Lockyers, its first takeover in Yorkshire, will remain as an independent business ready to make acquisitions rather than becoming a satellite of any of the other seven. Lockyers CEO, Jon Newall commented: “I see this move to join BN Partners as the next exciting step in our development. Whilst our commitment to providing personal service will not change we will be looking for areas that we can progress to support our growing client base.”

DAS UK Group has been shortlisted as a finalist at the Insurance Times Awards in the ‘Customer Champion of the Year – Insurer’ category. Judged by an independent panel of experts from across the sector, the Insurance Times Awards are the largest and most prestigious accolades of their kind, recognising and celebrating excellence and innovation across the breadth of UK insurance.


Market Movers and Shakers

Lloyd’s Chief Commercial Officer is moving to Everest Insurance in early 2019. Vincent Vandendael is leaving the corporation after almost six years. He will be moving to Everest Insurance to take up the post of Chief Executive Officer of International Insurance in early 2019. Vandendael joined Lloyd’s in December 2012. As CCO he is responsible for all business development and heads up Lloyd’s global network. According to the corporation, Vandendael has been a champion for innovation in the Lloyd’s market and also worked on establishing Lloyd’s Brussels subsidiary in response to Brexit.

Swiss Re announces departure of UK and Ireland CEO. The search is on for a new man at the helm of Swiss Re’s UK and Ireland (UKI) operations. In an announcement, the insurance giant said UKI Chief Executive Frank O’Neill has decided to leave in order to pursue an opportunity elsewhere. The company veteran’s exit takes effect on September 04. O’Neill, who came onboard Swiss Re in 1998, has served as CEO for UKI since 2016 – returning to London at the time after taking on senior roles in Zurich, Singapore, New York and Cape Town from 2002. He was with Liberty Group in Johannesburg prior to joining the Reinsurer. “I would like to thank Frank for his tremendous commitment and contribution to Swiss Re over the last 20 years,” commented Russell Higginbotham, CEO Reinsurance EMEA (Europe, the Middle East and Africa) at Swiss Re. “We wish him every success in his future endeavours.”

Daljitt Barn has been named as the first Global Head of Cyber risk at Tokio Marine Holdings. In an announcement recently, the international insurance group said Barn was assuming the newly-created role this week. The London-based executive makes the switch from Munich Re, where he was instrumental in setting up the cyber team within corporate underwriting and most recently served as Head of Cyber Innovation and Consulting Services. In his new post, Barn will be in charge of the continued development of Tokio Marine Group’s cyber strategy. The experience he brings to the table includes building and managing the cyber risk team in the insurance and investment management sectors in his capacity as Cybersecurity Director at PwC UK.

Allianz has named Bart Schlatmann, the former Chief Transformation Officer of Russia’s Sberbank, as the new CEO of its European direct business. Schlatmann begins his new role on September 01 and will report directly to Ivan de la Sota, board member and Chief Business Transformation Officer of Allianz SE. “His [Schlatmann’s] proven track record in helping businesses transform into digital players with a clear focus on simplicity and agility for the benefit of customers makes him the perfect fit for this role,” said de la Sota. At Sberbank, Schlatmann was responsible for the digital overhaul of client services. Before that, he worked at the ING Group for 22 years, spending his last 10 years there as COO of ING Netherlands.

ERS appoints James Neild as Regional Trading Underwriter for Prestige. In a continuous strengthening of its specialist Motor propositions ERS is pleased to announce the appointment of James Neild as Regional Prestige Trading Underwriter for the North. James has over 20 years’ experience in High Net Worth, High Value Motor insurance from senior roles held at Hiscox, Zurich Private Clients and most recently, Oak Underwriting where James was Lead Underwriter. Based in Manchester, James will provide ERS’ Brokers with local underwriting capability and insights, helping Brokers provide an improved service to their Prestige and High Net Worth customers. He will report to Head of Bespoke Underwriting, Tom Donachie.

Allianz Insurance has appointed Gabriele Tischler to the role of Director, Market Management and Brand. Gabriele has worked for Allianz since 1998 and has a wealth of experience in a number of marketing management roles at Allianz SE in Munich and Allianz Seguros in Brazil. Gabriele will report to Allianz’s General Manager, Commercial and Personal, Simon McGinn.

Announcing the doubling of its team size ahead of rollout, buzzvault said new members include Chief Technology Officer John Sotiropoulos, Head of Pricing Paul Vinten, Chief Marketing Officer Chris Sherlock and Head of Content Alex Cherry. Sotiropoulos is a blockchain, Internet of Things (IoT) and cybersecurity expert who brings to the table a proven track record with successful start-ups and award-winning products. Currently he is completing a distance-learning Master of Science in cybersecurity accredited by the Government Communications Headquarters (GCHQ). Meanwhile Vinten, who has worked with new ventures, has nearly 10 years of experience in personal lines pricing. Digital marketing expert Sherlock, meanwhile, has an in-depth understanding of emerging technologies and their commercial applications, backed by his more than 25 years of know-how. Cherry, who will look to engage with potential buzzvault customers across all channels, previously worked in insurance publishing and events. His appointment as Content Head will allow him to not only talk about insurtech but actually be part of it.

Tasker Insurance Group (TIG) has appointed Graeme Lalley as Chief Operating Officer moving across from GRP. Lalley had been Chief Information Officer at Global Risk Partners (GRP) since October 2017 with responsibilities including IT, operations, data and post-acquisition integration of businesses. During his time at the consolidator it bought 10 Brokers and a managing general agent. Before GRP he was IT and Operations Director at Bluefin working with Tasker’s current Chief Executive Officer Rob Organ who joined the business last year. Organ commented: “The key focus areas for Graeme will be to develop a clearly defined product and distribution strategy, ensuring Tasker achieves strong organic growth whilst also creating a well-run, efficient and integrated business through our next phase of M&A activity and growth.”

The Financial Conduct Authority (FCA) has appointed Sheldon Mills as its new Director of Competition. Mills is currently Senior Director, Mergers and State Aid at the Competition and Markets Authority and will take up the post in November. The departure of Mary Starks, Director of Competition and Chief Economist at the watchdog was confirmed earlier this year. He will be responsible for delivering market studies such as the ongoing one on the wholesale insurance Broker market and will be responsible for the regulator’s activities to enforce prohibitions on anti-competitive behaviour within the financial services industry. Mills commented: “Financial markets face major change and complexity, so the FCA’s competition work is essential. I am looking forward to leading a programme of work which delivers real and lasting change for people and communities across the UK.”


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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