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General Insurance Newsletter - Friday 8th June 2018

08 Jun 2018

Insurance News

Speciality Insurer Beazley plans to split its Speciality lines division into Speciality (Casualty) and TMB (Cyber / Management Liability), according to Jefferies Analysts, who welcomed the move given the differing growth profiles and profitability.  

Insurance and professional services provider Ambant, which was acquired by Davies Group late last year, is itself on the hunt for more acquisitions, it has revealed. Following Davies’s swoop for the business in September, Ambant kept its branding and became part of a new insurance services division within Davies – which itself was part of a £90m deal in January 2017, in which private equity firm HGGC took a majority stake in the group.

Higos Insurance Services has announced the expansion of its strategic partnership with Allianz Insurance. Effective immediately, the latter will be providing not only increased support but also enhanced propositions for Higos’s SME and mid-market commercial clients. The two parties’ collaboration, which was expanded following a tender exercise, involves what was described as a profitable portfolio set for further growth by Higos Managing Director, Neil Thornton.

It has been revealed that three Global Risk Partners (GRP) Brokers have developed strategic partnership with Zurich. Sagar Insurances, based in Lancashire, Norther Ireland-based Abbey Bond Lovis (ABL) and McGrady, which was bought by ABL in May 2016, have entered into the fresh arrangement. The move follows Aviva pulling all of its agency with GRP Brokers. The partnership will see Aviva policies transfer to Zurich upon renewal. According to GRP the deal is similar to the partnership agreed recently with Allianz by Higos.

A year after the 3rd June terrorist attack on London Bridge and Borough Market, BIBA Executive Director Graeme Trudgill expressed the need to reform Terrorism cover for Business Interruption insurance, recognising the shortfalls when it comes to protection against the changing face of terrorism. With the shift from massive property damage to ‘lone wolf’ attacks and use of vehicles as weapons, Insurers have a lot of catching up to do. 

Ryan Specialty Group (RSG) has completed the purchase of Lodestar Marine Limited in London, UK. This transaction was previously announced by the company on February 13, 2018. As part of the transaction, Lodestar’s operations will become part of RSG Underwriting Managers. Lodestar Executives Charles Dymoke and John Hearn will also join RSG as joint Managing Directors of the company and will continue to lead the unit going forward. Lodestar is a major insurance provider in the fixed P&I market and is one of the few to offer liability limits of up to $1bn. The company offers owners’, charterers’ and operators’ P&I, as well as additional coverage for vessels up to 40,000 gross tonnage worldwide, led by RSA Insurance Group PLC in the primary (up to $500m).

Legal & General Group is to sell its 26% stake in IndiaFirst Life Insurance to private equity firm Warburg Pincus. The deal is part of L&G’s strategy to focus on the UK and US markets. The agreement in principle will see Warburg Pincus pay £79m ($105m €90m) for the stake in the joint venture. On disposal, the consolidated Legal & General Group accounts will show a pre-tax profit of approximately £45m and the disposal will also result in a marginal improvement in the Solvency II coverage ratio. Founded in 2009, IndiaFirst Life is a joint venture between Bank of Baroda (44% stake), Andhra Bank (30% stake) and Legal & General (26% stake).

MGAs could be eligible for chartered status in the future if plans by the Managing General Agents Association (MGAA) are successful. The association has been working alongside the Chartered Insurance Institute (CII) to develop a chartered status scheme for its members, according to Chairman Charles Manchester in a recent report.

A survey by NTT DATA UK found that 69% of Insurers see data as the biggest challenge to their ability to make customers’ online experience better. Among the top concerns are data privacy, security and a lack of data experts. Other issues include managing real-time interaction data and integration of data across products and channels.

As many as 36% of drivers surveyed by the RAC said they had lost out financially following an accident. The majority of these (21%) stated they had to pay their insurance policy excess while 8% said they had to fork out for travel expenses such as a hire car. 4% claimed to have suffered loss of earnings and 3% had to cover the cost of making a personal injury compensation claim. The average amount paid out by motorists RAC surveyed to cover policy excesses in non-fault insurance claims is £215 – with 41% stating they had to pay between £150 and £349. Those who had incurred travel expenses after their collisions on average had to pay £588. Those who had to fund their own personal injury compensation claims, paid over an average of £2,036, but the highest uninsured losses figure recorded was for loss of earnings at £3,091.

HPS and MDP, the owners of Ardonagh Group, are to buy two insurance firms according to competition approval documents from the European Commission. The Commission approved deals for the private equity firms to buy Broker Capita Specialist Insurance Solutions (CSIS) and managing general agent Professional Fee Protection (PFP) which also offers risk management services. Both deals were for an undisclosed sum.

THB has developed a Cyber product targeted at the UK SME sector. The CyberAid+ policy is available to Brokers on a wholesale basis and is exclusively distributed online. According to THB, CyberAid+ covers automatic cyber-crime and also offers additional benefits such as education and risk management tools designed to protect a business in the event of a breach.

AFL Insurance Brokers Ltd has a new service for insurance or reinsurance buyers and broking teams. Announcing the launch of its specialist business Agile Risk Advisory (ARA), AFL said the wholly owned subsidiary will focus on providing evidence-based risk advice and new insurance-linked securities (ILS) opportunities. Heading ARA is AFL’s newly appointed Director of Specialty James Poole. 

The Schinnerer Group has revealed that it will take on a new name that plays on its roots – Victor. The group’s businesses, including Victor O. Schinnerer & Company in the US, ENCON in Canada, Bluefin Underwriting in the UK, Mees & Zoonen in the Netherlands and Italy and Schinnerer’s operation in Bermuda, will all adopt the new name – while acquisitions Dovetail Insurance and ICAT will also be part of the global business.

Research carried out by the University of Nottingham, in partnership with insurance law firm Browne Jacobson, has revealed that insurance policies are too complex to comprehend. In fact, only 13% get it. In addition, it turns out policies require a minimum of A-level education in order to be meaningfully understood. For instance, barriers such as the extensive use of uncommon or low-frequency words and phrases hinder comprehension. Other culprits include complex sentence and paragraph structures. The same study used drafting methodologies in order to significantly improve policy readability, reducing the ‘reading age’ for the most complex document from postgraduate level to 12 or 13 years old. This improved the percentage from the previous 13% to a whopping 89%.

Flaxman Partners Ltd. has a new home at 106 Leadenhall Street. According to Chair, Roger Flaxman, who believes the transfer will prove efficient for the group. Specialising in commercial and business insurance advice, Flaxmans provides insurance claims advocacy, litigation support, management of distressed business risk, as well as special insurance coverage design.

Allianz Group is taking the bancassurance route to tap the Central and Eastern Europe (CEE) region. Under a long-term cooperation agreement between Allianz and UniCredit, the global bank has partnered exclusively with the major Insurer to provide customers in Bulgaria, Croatia, the Czech Republic, Hungary, Romania, Slovenia, and Slovakia access to life and non-life insurance. With insurance penetration rates in the CEE region not measuring up to those in Western Europe, Allianz will leverage UniCredit’s strong banking franchise to boost expansion in growing markets. The latter, with its extensive branch network and digital platforms, will make Allianz’s insurance solutions and know-how easily available to bank customers.

MarkerStudy has formed a 'powerhouse' Managing General Agent, under the name of MarkerStudyInsurance Services Limited (MISL), with Zenith Insurance Management UK Limited, and Zenith Marque Insurance Services Limited. The three entities, which act as service companies for Markerstudy Group, will be consolidated in order to streamline operations. The company said the move will benefit more than a thousand Broker partners and over 1.5 million policyholders, while no changes to key personnel are expected as part of merging the units. MISL will deliver a range of expertise – including underwriting, operational, and claims services.

MS Amlin’s Brexit plans are now pushing through, after the global (re)insurer received approval to re-domicile Amlin Insurance SE (AISE) to Belgium. AISE, the trading entity for the UK and Europe, was granted a licence by the National Bank of Belgium (NBB) for insurance and reinsurance activities from its Brussels office and associated branches in the European Economic Area (EEA). With the regulatory approval, MS Amlin said it will now start the process of re-domiciling its entity operations in order to be fully operational from the new base come January 2019.

NIG has updated its etraded Property Owners product following Broker feedback. The provider detailed that it had removed ‘average’ from the policy wording and increased un-occupancy cover from 30 to 90 days. In addition, it has added theft and malicious damage by a tenant as standard for up to £10,000 per claim. As well as these changes NIG highlighted further enhancements and extensions in what it called “a comprehensive product refresh”.

Bristol-based Hayes Parsons Insurance Brokers has bought specialist underwriting agency Admiral Marine in Salisbury, for an undisclosed sum. Admiral, founded in 1991, specialises in insuring sailing yacht and motor boat vessels on a worldwide basis and has £1.4m of gross written premium. All staff along with the brand and office will be kept and managing director Robert Holbrook will continue to lead the team.

Caerphilly-based Broker Constructaquote, part of Moorhouse Group, has made its chatbot service available on its Facebook page. The bot, which was launched on its website in September last year, uses AI to replicate real-life conversations and simulate interaction with another person. The business claimed the bot is the “first ever chatbot for UK business insurance”. The chatbot allows customers to request quotations and can respond to specific product queries and general questions about the Broker and the services it offers.

Numerous sources have tipped up Ardonagh and Markerstudy as leading insurance contenders in the race to buy Swinton. One market source insisted that Ardonagh was “definitely in the mix”. The source confirmed that the group had previously considered making a swoop for Manchester-headquartered Swinton and was still open to making a move. However, a separate source flagged Markerstudy’s track record. According to the expert close to the business Markerstudy “looked closely at Swinton for a long time many years ago”. When Markerstudy’s insurance companies were bought by Qatar Re at the start of this year the Group Underwriting Director Gary Humphreys was reported to have said that the firm was keen to start buying Brokers and saw “lots of opportunities in the market”. The company has vast experience of retail and any deal for Swinton would mean access to transferring the renewal books into its underwriting arm.

Aviva has pledged to reduce the use of plastic internationally, in a bid to help tackle the growing issue of plastic waste. In the UK, where the company is the country’s largest Insurer, Aviva has already committed to: removing all disposable cups from vending machines, water coolers and cafés in its UK offices by the end of 2018 and eliminating single-use plastic at UK sites, including cafes and events, by the middle of 2019.

GDPR raises the possibility of a potential increase in insurance claims for data breaches, a new report from the International Underwriting Association has stated. Insurers should, therefore, carefully consider whether policy limits and sub-limits currently in place are appropriate for the reality of new exposures. Research undertaken by the IUA’s Liability Underwriters’ Group has highlighted several factors that may drive up both the volume and cost of claims against general liability policies. These include changes to the right to compensation for data breaches, lower thresholds for notifying such breaches and higher defence costs. The introduction of group litigation into data protection law, enabling consumer bodies to represent multiple individuals in mass claims, may also have an impact.

Amazon has discussed how it could enter Home insurance market according to reports. A report stated that that the retailer had plotted how it could come into Home insurance as a part of the work it already does on robotics and connected devices. The same report suggested that smart devices could be used to alert homeowners to threats before they happen and therefore lead to lower premiums.

XL Catlin has launched Auto Terror Protect for companies with fleets of vehicles which could be used as a weapon in a terrorist attack. The product has been designed for fleet operators, vehicle rental companies, haulage and logistics companies. The Insurer explained that it will work as a contingent umbrella cover for any existing Motor and Third-party Liability policies. The provider listed that the new offering, which will be underwritten in London and available via Brokers for UK businesses, has up to $25m [£18.6m] of capacity for any one risk.

A former Aviva employee has been sentenced to 22 months in jail at a hearing at Perth Sheriff Court in Scotland. It was reported that Aaron Williams, 29, of Hospital Street, Perth, admitted taking £90,000 from the Insurer between 1 November 2012 and 6 May 2015 to fund his gambling habit. It detailed that Williams, working in Pitheavlis, had given fake refunds to customers and put the money into nine bank accounts. However, he was caught out when a colleague became suspicious about one of the payments and Aviva launched an investigation.


Market Movers and Shakers

It has been announced that Amanda Blanc, the incoming CEO of ZURICH, Europe, Middle East & Africa, will become the next Chair of the ABI. She is the first woman to Chair the trade association since it began life as the British Insurance Association more than 100 years ago.

José Manuel González has been revealed as the new CEO of Hyperion's Howden Broking Group.

XL Catlin has appointed two Executives to leadership roles within its global excess casualty division. Donnacha Smyth was named President of Global Excess Casualty insurance, while Carla Greaves has been tapped to serve as Chief Underwriting Officer of the division.

Allianz Insurance has announced the appointment of Rob Corner to the role of Strategic Account Manager.

Ascent Underwriting has announced the appointment of Rob Harden as Chief Financial Officer, subject to regulatory approval.

Courierinsurance.co.uk, the specialist Courier insurance Brokers, have announced that Alex Stuart has joined their Board as a Non-Executive Director with the appointment commencing on the 1st June 2018.

Jonathan Daniels has joined UK General Insurance, the Leeds based MGA, as Head of Sales and Distribution.

Sparta are delighted to announce the appointment of Andrew Doidge, the former Head of Insurer Development at Markerstudy Retail. 

Jardine Lloyd Thompson Group plc (JLT) has appointed Derek Walsh as Group General Counsel. 

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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