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General Insurance Newsletter - Friday 8th December 2017

08 Dec 2017

Market News

Global Risk Partners (GRP) has bought specialist Bloodstock and Equine Broker Anglo-Hibernian Bloodstock Insurance Services for an undisclosed sum. The deal sees GRP acquire 100% of the Newmarket-based business. Mike Bruce, GRP's CEO Broking, advised that Anglo-Hibernian will complement the specialist bloodstock division in GRP-owned Lonmar Global Risks. This latest acquisition is GRP's 12th in ten months.

ERS has outlined what Insurance Distribution Directive (IDD) and General Data Protection Regulation (GDPR) means for Brokers. Insurance Distribution Directive replaces the Insurance Mediation Directive (IMD). The IDD aims to harmonise the rules around the selling of insurance and increase transparency for customers. This directive from the EU will introduce a set of technical standards that Brokers and Insurers will need to observe and comply with from the implementation date of  23rd February 2018. Meanwhile, GDPR creates new legal obligations around data collection and distribution in order to better protect the rights of individuals and their data. It will replace the current Data Protection Act (DPA), which comes into effect on 25th May 2018.

Cyber hacking schemes such as phishing and social engineering have been around for some time and people are getting better at avoiding suspicious emails. Additional attack points are on the rise, including ransomware and cyber extortion. Then there is “malvertising” on perceived safe websites as well as potential infiltration of the IoT devices in your home. AIG has detailed the following steps you can take maximize your family’s protection: assess your vulnerability at home; take a smart approach to social media and make the most of your insurance choices.

Allied World Head of UK Commercial Darren Rowe outlines 'Simple Solutions for Risk Managers'. In his article he said risks that used to only be on the radar of large companies are now impacting organisations of every size, across every sector, but the key to surviving in this increasingly complex world could lie in a simple approach - buying a portfolio solution. Allied World’s Commercial Division spent time speaking to Risk Managers and other buyers, and found that what they wanted was simplicity – one application for a range of covers and a single point of contact for underwriting and claims to enable a swift and accurate response to any queries that might arise.

NIG has provided retailers with some top tips on how to prepare for the Christmas period. They have advised retailers to: plan their staffing requirements, take a multi-channel approach - more customers are increasingly buying online using smartphones and tablets; stock up on the bestselling products, devise a Christmas marketing plan and create a personalised shopping experience. 

As terrorists move away from causing property damage, businesses are increasingly exposed to uninsured Business Interuption (BI) losses because Terrorism policies typically require physical damage as a trigger for BI cover. Many businesses are discovering to their cost that most Insurers don’t cover such losses unless there is at least some physical damage. Those in the retail, hospitality and entertainment sectors are particularly vulnerable to BI losses caused by the denial of access and subsequent loss of attraction that can follow events aimed solely at inflicting casualties, often in and around entertainment venues and tourist attractions. So, as well as damage to own and third-party property, NMU has added Non-Damage BI cover to its Terriorism wording, which also covers to the use of vehicles, hand-held weapons and explosives devices aimed at causing death and injury.

Zurich has annouced that it paid out 99% of claims in the UK during the first half of 2017 with payments worth £958m. Over 99% of all general insurance claims were paid, with 54 claims of more than £1m being made. Typically, the proportion of consumer home claims paid out is slightly lower at 95% - but this is improved on the level from 2016 and is well above the industry average.

ARAG plc has issued the following statement from Head of Claims, Chris Millward, following publication today of the Court of Appeal judgment in the cases of McMenemy v Peterborough & Stamford Hospitals NHS Foundation Trust and Reynolds v Nottingham University Hospitals Foundation Trust. ARAG welcomes today’s judgment in the McMenemy and Reynolds cases, as it brings a little further clarity to the continuing debate over how ordinary people can fund litigation, in the absence of legal aid.

Pool Re, the terrorism reinsurance pool, has announced that, from April 2018, it will extend its cover to include Material Damage and direct Business Interruption caused by acts of terrorism using a cyber trigger. The cover, which will exclude intangible assets, will be offered as standard to all policyholders which purchase Terrorism insurance from Pool Re Members. As the use of technology becomes not just ubiquitous among individuals but relied upon by businesses, public services, and critical infrastructure, the world is becoming increasingly dependent on it. And as digital skills increase, particularly among younger generations who are growing up with technology, so too does the vulnerability of those systems to attack. Following Pool Re's announcement that it will extend its cover to include damage caused by terrorists using remote digital interference, or cyber terrorism, former Director of GCHQ, Robert Hannigan said that “We have a new generation whose baseline of skills is much higher”. The West has so far had a tendency to underestimate the pace of change, because it takes a “very rational” assessment approach, but the innovative tactics of modern terrorists should not be dismissed, according to Hannigan.“One thing we do know about terrorists is that they are not static, and I think the last few years have illustrated that in spades,” he commented. “It would be very surprising if an organisation who understood the power of the internet to radicalise, to deliver propaganda, to organise attacks, didn’t also get the possibility for a destructive cyberattack.” According to Hannigan though, there is a consensus that terrorists are still “a long way” from having the capability to deliver a serious destructive attack. 

Institutional investor Caisse de dépôt et placement du Québec (CDPQ) has agreed to acquire a significant minority stake in Hyperion Insurance Group. The international insurance group Hyperion is composed of broking divisions Howden and RKH, as well as underwriting division DUAL. The group operates across Europe, Asia, the Middle East, Latin America, the US, Australia, and New Zealand, with over 3,800 employees in 37 countries. A release revealed that CDPQ will invest over US$400 million to provide the Group with new growth equity and liquidity to existing shareholders. The investment also allows CDPQ to join Hyperion as a “long-term growth partner” alongside General Atlantic (GA). Hyperion management and employees will remain the largest shareholder group, following the investment.

Marsh has announced that it will take full control of its Norwich-based client and processing services office, following the conclusion of its core 10 year partnership, with Capita Plc. Capita will continue to provide support to the Marsh's UK operations through its offshore facility in India. The 550 Capita employees based in the Norwich office will join the Brokers' exisiting colleagues in the city. 

The FCA has fined Bluefin £4,023,800 for having inadequate systems and controls and failing to provide information to its customers about Bluefin's independence in a way that was clear, fair and not misleading. Between March 2011 and December 2014, Bluefin held itself out to be 'truly independent' in the advice it provided and the Insurers it recommended to customers. However, Bluefin failed to implement adequate systems and controls to manage the conflict that arose from Bluefin’s ownership.  Bluefin’s independence was compromised by its culture which promoted business strategies, including a policy which focused on increasing the business placed with its parent company, over treating customers fairly. Bluefin Brokers did not disclose this policy, so customers risked being misled into believing they were dealing with a Broker who would conduct an unbiased search of the market.

An unnamed insurance company is suing “James Bond” actor Pierce Brosnan for damage to his neighbour’s house. The damage occurred when a fire ignited in the garage of Brosnan’s Malibu home in 2015 and spread to his neighbour’s property. The fire was reportedly caused by electrical problems, exacerbated by rags in Brosnan’s garage. Brosnan, his wife, and their two sons were home when the blaze began, but all escaped unharmed, according to reports. The fire caused about US$1 million in damage to Brosnan’s property, and an unspecified amount of damage to the home of his neighbour, Alexander Haagen. Haagen was paid for the damage by his insurance company, however the Insurer is now reportedly suing Brosnan to recoup its costs. 

Hiscox has created a virtual business unit (vBU) that will provide a dedicated cyber resource and it will be responsible for ensuring a consistent Group-wide approach to areas such as product development, service offering, branding and marketing and pricing. Gareth Wharton has been appointed as Cyber CEO and will lead the cyber vBU as well as being in charge of of developing the cyber service proposition and delivery. The vBU will draw tohgether the expertise of 70 cyber staff across the business.

Last month former Claims Manager at Arthur J Gallagher, James Cunnington, pleaded guilty to one charge of fraud for stealing £500,000 from the Broker. Cunnington is due to be sentenced in January next year. 

The FCA have revealed the firms that were successful in their application to begin testing the third cohort of its sandbox innovation scheme. The firms include: Etherisc, Sherpa Management Services and Wrisk. The regulator says that the sandbox allows firms to test innovative products, services or business models in a live market environment, with the appropriate protections in place.

Sedgwick Claims Management Services, the owner of Vericlaim, has bought Loss Adjuster Cunningham Lindsey for an undisclosed amount. Sedgwick, which has its headquarters in Memphis, Tennessee, stressed that the two firms were complementary. According to reports, a spokesperson for Cunningham Lindsey that it would be business as usual for Brokers in the UK.

Market movers and shakers

Zurich is evolving its distribution strategy and simplifying its distribution team, which will be now be drawn around two main types of Broker: UK national and local Brokers, and global brokers. Graham Boffey joins Zurich in the newly created role of Head of UK Distribution. The national and regional general insurance Broker relationships will fall under a team led by Roy Standish and Caroline Pritchard will lead a dedicated team focusing on global Brokers with representation across the country. This team will form part of Zurich’s commercial insurance business to ensure consistency around the world, but will be responsible for representing Zurich’s full UK proposition in the UK for these Brokers.

Marsh has announced the appointment of Mark Costin as its new Head of UK Aviation Practice; he will take up the role with immediate effect. 

Aviva has announced that Michael Yabantu will be joining the organisation in February as Head of Trading for the North.

Aon has appointed Martyn Denney as Managing Director of its UK affinity business. Denney started the post in October, but had been in a Consulting role with Aon since June 2017.

XL Catlin has appointed Yera Patel to the position of Global Practice Leader for International Financial Lines Claims.

Probitas 1492 has announced the appointment of Lindsay McQuillian as General Counsel.

ingenie, the young driver telematics Insurer leading behavioural change, has announced the appointment of Selim Cavanagh at Chief Executive Officer. 

APRIL UK, the protection and health insurance specialist, have announced that it has made two senior appointments. Jon Legge joins as Sales Director and David Pooles as Head of Intermediaries.

THB, the specialist re/insurance Broker, has announced the appointment of Declan Durkan as Commercial and Placement Director for is combined Fleet and commercial operation in the UK.

Pool Re and Cranfield University has announced the appointment of Professor Andrew Silke as the Professor of Terrorism Risk Management and Resilience at Cranfield University. This is a new position which will be co-funded by Pool Re and Cranfield University for an initial five-year period.

Ardonagh Group has announced that Janice Deakin has been promoted to Deputy CEO of Ardonagh Group, effective immediately.

All information provided in this Market Digest has been gathered from multiple Insurance Media sources and individual company press releases.


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