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General Insurance Newsletter Friday 9th August 2019

09 Aug 2019

Insurance News

Last month major reinsurer Munich Re issued a €1 billion (around £921 million) approximation for its second quarter consolidated result. Now the German group has released the official numbers, and the forecast is nearly spot-on.
Munich Re’s profit in the three months ended June 30 reached €993 million (around £915 million), a leap from the €728 million (around £671 million) it recorded in the same period last year. Of the 2019 total amount, €858 million (around £790 million) came from the reinsurance field of business while the remaining €135 million (around £124 million) was contributed by the ERGO operations.

The second quarter of 2019 nearly broke records – not the good kind – in terms of non-life insurance-linked securities (ILS) capacity issuance. According to the latest ILS Market Update from Willis Re Securities, the reinsurance division of Willis Towers Watson, the three-month period saw the issuance of just under US$1.7 billion (around £1.4 billion) of non-life ILS capacity across 11 different catastrophe bonds.

Legal & General’s first-half operating profit increased 11% to £1 billion, up from 2018’s £909 million, with the outlook for the rest of the year likewise getting two thumbs up. The British insurance group saw earnings per share grow in line with their profits, as the numbers climbed 13% to 14.7p from 13p in 2018. Meanwhile, group debt rose by £11 million to £108 million on total borrowings of £4.1 billion, which reflects a difference of £200 million from the first half of 2018.

A huge insurance payout is apparently not enough for the owners of the Royal Clarence Hotel in Exeter, who have expressed their “heartbreak” as they revealed plans to sell the site. In a BBC report, the owners of the 18th Century property which was struck with a massive fire in 2016 outlined their decision as “the only way to make the rebuild happen quickly and viably.” Now it has been revealed that their decision has been reached despite an insurance payout in excess of £22.3 million.

With a clear growth strategy in mind, global insurance broker Gallagher has made a further investment in its specialist UK public sector and education capabilities – a market it describes as “rapidly evolving.” The company is aiming to diversify its services and has made a host of internal promotions – with Peter Mason, already the firm’s Executive Director of Public Sector and Education, to now lead the development of a significant strategic initiative to develop a range of risk financing solutions for clients. The hope is to engender a more collaborative approach and bring greater efficiencies to the table.

In other news, it looks like Gallagher and the Dive In Community Cup aren’t fixing what isn’t broken, as the two reunite for the 2019 edition of the annual five-a-side tournament. Sponsoring the football cup since it came to life and now for the third successive year, Gallagher will be joined by co-host East End Phoenix Football Club. The event will take place on September 20, kicking off the fifth instalment of the international festival for inclusion and diversity in insurance Dive In.

Sedgwick has announced that it has acquired Nordic Loss Adjusting AB (NLA) and related entities in order to strengthen its presence in the Nordic nations. NLA provides claims handling, loss adjusting and third-party administration services. Its clients are Insurers and captives in local Nordic and international markets, according to Sedgwick. NLA handles Property, Liability, Motor, Bodily Injury and Medical-expense claims for consumer and commercial products. It has offices in Gothenburg, Stockholm and Oslo.

InsurTech Broker Brolly has launched Brolly Contents in partnership with Hiscox. The product is aimed at people wanting to insure up to £40,000 worth of belongings and who rent or own a property. The Broker explained that Brolly Contents includes flexible monthly subscriptions that reduce in price every month with loyalty.

Ageas UK has revealed a 70% rise in net profit to £45.4m for the first six months of 2019 (H1 2018: £26.8m). The provider also posted an improved combined operating ratio (COR) of 96.9%, compared to 99.0% in H1 last year. Ageas UK Chief Executive Officer Andy Watson said the rise in profit was a result of a one-off benefit following the change to the discount rate from -0.75% to -0.25%.

C-Quence has launched a standalone Directors and Officers Liability policy aimed at mid-market private and public limited companies. The product is also available on the company’s underwriting platform C-Q Elements. Additionally, the digital managing general agent announced its intention to launch a “comprehensive” Property and Casualty proposition later in the year.

Genasys Technologies has launched a tool designed to help Brokers rapidly deploy their products to their customers through affinity and scheme partners. According to the software house the tool enables Brokers to easily embed an online sales and policy fulfilment capability into any third party website.

LV GI has announced results for the first six months of the year and, excluding transfers of commercial lines to Allianz, GWP at the Insurer has grown 12% from £696m in H1 2018 to £775m in H1 2019. Operating profit for the personal lines business grew 55% from £23m to £35m over the same period. Meanwhile, operating expenses fell 2% from £162m to £160m. Chief Executive Officer Steve Treloar hailed “a really excellent first half of the year” for the business.

Open GI has unveiled Digital Elements, an enhanced portfolio of real-time, digital B2C solutions developed for the Broker market. According to the software house, the product is an addition to Open GI’s existing digital range and offers the market access to a collection of responsive business to consumers (B2C) platforms “packed with the latest technology”.

Ecclesiastical and the Health and Safety Laboratory (HSL) have developed a series of detailed guidance to help Brokers discuss slips and trips with clients who have responsibility for a heritage property. According to Ecclesiastical claims data 2017-2019, slips and trips account for more than a third of injury claims. The HSL tell us they are the most common cause of injury and although minor in many cases, sometimes they can be severe and even disabling. Managing slips and trips is therefore a big responsibility for organisations both to protect employees and members of the public.

InsurTech start-up Digital Fineprint (DFP) has launched a new real-time business tracking software with the aim to tackle underinsurance in SMEs. According to DFP, the product, called Renew, aims to simplify the tracking of changes happening to SMEs, including offices, directors and turnover, in order to help Brokers and Insurers provide better advice as firms’ insurance needs change.

AmTrust International has purchased Legal Insurance Management Group (LIM) for an undisclosed sum. LIM was previously privately owned and the deal will see the business work with AmTrust subsidiary Arc Legal Assistance. Managing Director of LIM, Barry Smith, commented: “I am delighted that LIM will be joining the AmTrust group and working alongside Arc Legal. They share our commitment to developing products and services, and we look forward to building on our previous 19 years of successful trading.”

A man has been jailed after he abused his position as an insurance Claims Handler to steal £390,478 from his employer by diverting customer payments into his own account. James Beaver, 40, of Redbridge, was sentenced at Central Criminal Court to two years in jail. A few weeks earlier (Monday 8 July 2019), he pleaded guilty at City of London Magistrates’ Court to one count of fraud by abuse of position, one count of fraud by false representation and one count of money laundering.

Willis Towers Watson has launched a disruption action plan specifically to deal with drone technology. “Drone disruption at airports: A risk mitigation and insurance response” outlines the threat to airports by drones which are increasingly being used with malicious intent to cause disruption at airports with an increase from 35 reported incidents between 2013-2015 to nearly 290 from 2016-2018 in the UK alone.

In other new, Willis Towers Watson has released an updated version of its Radar pricing software. In response to increasing regulatory pressure – particularly in the UK – to demonstrate transparency in pricing, Radar 4.5 provides a range of metrics that give companies insights on pricing fairness.

Argo Group's net income drops in Q2, from last year’s second quarter net income of US$41.8 million (around £34.4 million) to US$28.8 million (around £23.7 million) this time around. According to the specialty Insurer, the 2019 result included approximately US$7.5 million (around £6.2 million) of expenses associated with proxy solicitation and related activities. Argo was recently embroiled in what was, at the time, shaping up to be a heated proxy battle against activist investor Voce Capital Management LLC.

Despite its Ogden woes, Motor Insurer, ERS was able to post a £3.1m profit for H1 2019. Half-year results paint a mixed picture for the specialist Motor Insurer, but gross written premium grew 9% from £167m in H1 2018 to £182m in H1 2019, allowing them to post a profit.

The Financial Conduct Authority (FCA) has warned of two unauthorised insurance Brokers operating via Instagram – Cheap Insurance Broker and B1 Insurance. The regulator flagged that both firms were targeting people in the UK and carrying on regulated activities which require authorisation. According to the FCA, B1 Insurance is operating via a mobile phone number and an Instagram page, which at the time of writing is still active.

Ethos Broking has bought its ninth regional broking powerhouse, Bennett Christmas Group, for an undisclosed sum. Ethos is part of Bravo Group which also owns Broker Network and Compass. The group recently agreed on an £80m loan facility with Deutsche Bank taking its acquisition facilities up to just under £200m. Broker Network member Bennett Christmas was founded in West Sussex in 1967 and is led by Mark Bennett, Roger Christmas, Tom Stripp, Anna Prestwich and Viv Cooper.

 

Market Movers and Shakers

Global law firm Clyde & Co has welcomed Ron Bartsch of UNSW to its global drones strategy group. Bartsch, a renowned aviation law academic with a long career working with Insurers and other stakeholders on aviation and drones policy, will assist the Clyde & Co’s global drones strategy group in providing expert policy, standards, and regulatory advice as it relates to drones and other autonomous vehicles.

Guidewire Software, a software provider for the Property-Casualty industry, has announced the appointment of Mike Rosenbaum as CEO and a member of the board of directors. Rosenbaum was formerly Executive Vice President of Product at Salesforce.

Dame Jayne-Anne Gadhia, the former Virgin Money Chief Executive who was appointed as the Women in Finance Champion of the British government in November 2016, is coming onboard customer relationship management (CRM) giant Salesforce to serve as UK and Ireland (UKI) CEO. Made a Dame in the 2019 New Year Honours list, Gadhia was the major name tapped by the government four years ago to lead a review into the representation of women in senior managerial roles in financial services. The review’s recommendations in 2016 paved the way for the HM Treasury’s launch of the Women in Finance Charter.

Gallagher has further invested in its specialist UK-wide public sector and education capabilities to best meet client need in a rapidly evolving market. Peter Mason, while remaining Executive Director, Public Sector & Education, will now lead a major new strategic initiative to devise and develop a range of risk financing solutions that best match the risk appetite of clients with options from conventional and emerging insurance markets to complement the traditional programme structure many clients value. Joining the PS&E leadership team is Mark Sangster — promoted to Executive Director, Public Sector & Education (North), reflecting his success as Client Director, based in Manchester. In addition to these management changes, Guy Stonier has joined the PS&E team as a Client Director having previously been Deputy Head of Office in Gallagher’s Sheffield branch

Allianz Insurance has appointed Alastair Warren-Upham to the role of London Markets Manager. In his new position, Alastair will oversee the distribution strategy for Allianz’s London branches.

In other news, Commercial Motor Portfolio Underwriter Heidi Shepherd is moving up to the position of Portfolio Manager at Allianz Insurance Plc. Shepherd, who came onboard the UK operations of Allianz in 2014 via the commercial insurance graduate scheme, will now be in charge of the profitable growth of the Insurer’s digital Motor products. These span complete Mini Fleet, Taxi, and Truck offerings.

BGL Group, a leading digital distributor of insurance and household financial services, which owns brands including comparethemarket.com, LesFurets.com and Beagle Street, has announced the appointment of Lisa Steele as Customer Services Director for its Customer Services function.

Compass, part of the Bravo Group, is delighted to announce the appointment of David Wolfe as Consultant for both Compass Networks and Compass London Markets. David will help drive new business and develop further relationships with UK SME Brokers.

Ken Norgrove, Chief Executive of RSA Ireland, has been appointed as Chief Executive Officer of Codan/Trygg-Hansa, RSA Group’s Scandinavian business. Ken will replace Patrick Bergander, who leaves RSA after seven years, and five years as CEO of Codan/Trygg-Hansa.

Marsh has announced the appointment of Michael Tarling as Senior Advisor in the Aviation practice of Marsh JLT Specialty. In the newly created role, Tarling will deliver senior client engagement and risk advisory services to aviation clients. Tarling will report to Garrett Hanrahan, US Aviation Practice Leader for Marsh JLT Specialty.

The UK insurance arm of Barbican Insurance Group has recruited a Professional Indemnity (PI) expert in the form of Paula McManus. Appointed as PI Head for Barbican Protect’s operations in London, McManus will be in charge of strengthening the company’s PI proposition in the UK commercial SME and mid-sized corporate market.

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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