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General Insurance Newsletter - Friday 9th February 2018

09 Feb 2018

Market News

Lloyd’s has today put forward plans to mandate for the use of electronic placement, with CEO Inga Beale describing higher levels of adoption as “vital” for the industry. The London Market has made “great strides” towards modernisation but the take-up of electronic placement is not happening fast enough, the Chief Executive said in a statement. “Unless the market moves together it will not reap the benefits and reduce administration costs. Electronic placement will support face to face negotiation, further increase efficiency in the market, reduce back-office costs and, most importantly, improve customer service,” she commented.

Covéa Insurance which has Gold accreditation from Investors In People, has welcomed 16 new apprentices across a variety of roles since the implementation of the apprenticeship levy scheme. As for existing staff, Covéa Insurance said 24 are undergoing a new leadership training course this quarter. With 10 offices in the UK, the Insurer employs around 1,500 people.

SSP’s insurance distribution business is on a roll. Last month Keychoice partnered with Plum Underwriting for non-standard risks coverage; now Keychoice Brokers get exclusive access to LV='s new specialist vehicle product. Called “Highway KC Specialist Vehicle,” the mutual’s specialist insurance provides cover for the likes of classic cars, motorhomes, ex-military vehicles, and modified cars. SSP said the addition of LV=‘s niche insurance scheme to Keychoice’s product range means a new lucrative market for members.

In further news, Brokers have confirmed that they have been experiencing outages and “intermittent issues” with the SSP Pure platform for the past four weeks. Ian Mantel, Director at Manor Insurance Services, explained that he had been unable to access the system for three hours last Friday, adding: “Luckily my staff had managed not to be kicked out, but the system was so slow it was taking them more than twice as long to do anything than it normally would.” Mantel argued that the software house was not addressing the issues it has had previously, stating: “They’re looking to the future and how SSP is going to be doing this and this but ignoring the main problem that the system is not stable.” SSP confirmed a major power outage in August 2016, which left 306 Brokers unable to work. In addition, Brokers experienced further outages a year ago when SSP’s Pure application caused disruption to service users.

Barbican Insurance Group has unveiled a new underwriting operation based in Hamilton, Bermuda. Managed by Nik Lucking as Head of Direct and Facultative, Barbican Bermuda will write exclusively on behalf of Barbican Syndicate 1955. All business written will be US-domiciled, including nationwide, regional, and single state/location accounts. The new unit in the British overseas territory will focus on the US property market, as well as on both Fortune 1000 corporations and middle-market organisations. The Bermudian company will underwrite a Direct and Facultative portfolio of business on an excess and surplus lines basis.

InsurTech start-up Homelyfe has launched a Home and Contents insurance offering. The business, which is an AR of Vibe MGA, stated that it uses modern technology to allow consumers to find and buy insurance in under four minutes. The app-based provider launched in October last year when it released cover to protect home buyers from gazumping. Founded by serial entrepreneurs Peter Goodman and Andrew Craven, Homelyfe stated that its technology was built “to disrupt the archaic systems consumers previously had to navigate when purchasing insurance”. The firm added that its data-led approach means customers can get insurance quotes and buy a policy in under four minutes, while answering fewer and simpler questions. Homelyfe further raised £2.4m in a super seed investment round, led by Talis Capital and Peterson Ventures, in October last year.

The FCA has updated the market on its approach to potential delays to the Insurance Distribution Directive. In December the European Commission proposed a delay to the application date for IDD from 23 February to 1 October 2018. The proposal is still under consideration by the European Parliament and European Council. The suggested move was welcomed by David Sparkes, Head of Compliance and Training at the BIBA as good news for Brokers.

Lloyds Bank has announced that 930 jobs are going to be cut across the business in a move that will affect its insurance division. Thomson Reuters reported on 5th February that the job losses will also affect its commercial bank, chief information office, risk, community banking and wealth units. The report noted that in addition to the redundancies 465 new jobs will be developed meaning a net staff reduction of 465.

InsurTech start-up Zoe has launched with the aim to become an artificial intelligence (AI) driven insurance Broker. The start-up stated that it has raised £400,000 in seed round funding, led by industry angel investors and start-up incubation studio System-Two. According to the business Zoe will help consumers manage all their insurance needs through an AI driven personal insurance assistant and mobile app. The business was founded by former Aviva Product Manager Damian Cristian and Entrepreneur Mark Bjornsgaard. According to the business the new funding will be used for product development, refining the business model and expanding the team.

Beazley has posted a dip in pre-tax profit to $168.0m (£121.2m) for the year ended 31 December 2017 (2016: $293.2m). The Lloyd’s Insurer’s Chief Executive Officer Andrew Horton stated that this was due to natural catastrophe losses of $175m. Its combined operating ratio further deteriorated to 99% (2016: 89%). However, the provider’s gross written premiums increased by 7% to $2.34bn in 2017, compared to $2.19bn in the preceding year.

Insurers including Allianz are expressing interest in buying XL Group. According to reports, interest from Insurers is preliminary and may not lead to a deal, but it has been reported that other sources have said that Allianz was looking to grow its Property & Casualty business in the US and that XL was a potential target. XL Group has a reported value of almost $10bn.

Zurich has reported a £151m business operating loss for 2017 for UK general insurance. The Insurer flagged that if the Ogden rate had not changed – it moved from 2.5% to minus 0.75% last March – it would have made a profit. In 2016 the provider had achieved a profit of £147m. Gross written premium of £2.37bn was the same as reported a year ago. However, the combined operating ratio (COR) soared to 110.9% from 97.1% in the previous 12 months. Again the Insurer flagged that excluding the impact of the new discount rate the COR would have been 102.3%.

Pool Re, the UK’s Terrorism reinsurance pool, has announced the publication of the Terrorism Frequency Report, a quarterly view of the contemporary threat, produced by the Scheme’s Terrorism Risk and Analysis Centre (TRAC). This resource will provide Pool Re Members and stakeholders with a record of recent terrorist attacks, detailing their severity and frequency, as well as analysis and views from the TRAC team and former members of the security services. Key topics and trends discussed in the first report include: the rising threat from the ‘Virtual Caliphate’, online radicalisation, cyber-attacks, and the implications for UK security and business; the potential for closer collaboration between Al Qaeda and Daesh and how a merger could alter the UK’s threat landscape and whether the use of improvised explosive devices in the Manchester and Parsons Green attacks could herald a step change in the frequency and method of terrorist attacks.

Global Risk Partners Group (GRP) has acquired a majority stake in Camberford Law PLC, the Bromley-based specialist MGA. The terms of the acquisition, which has received regulatory approval, are undisclosed. David Ottewill will be leaving the business and Simon Carter will assume his role as Managing Director. Paul Cooper (Director) will remain for a short period to assist in the transition to GRP. The ongoing management team will have an equity stake in the business.

Mathew Undenge at Erskine Murray has acquired his FCII accreditation, making him a Fellow of the Chartered Insurance Institute (CII). He is amongst a select few nationally to have attained CII’s highest qualification and the only qualifier in his local institute – the Insurance Institute of Leicester. FCII is a highly prestigious endorsement and notoriously difficult to achieve. To become FCII you must adhere to a rigorous set of criteria, relating to professionalism and capability, in order to meet the standards of the programme. Hence, only the very best are awarded the title.

One Call Insurance is pleased to announce the launch of its new Car insurance sub-brand, One Quick Quote. Unveiled as an innovative and time-saving online tool that enables consumers to go ‘From click to quote in just 60 seconds’, One Quick Quote aims to eliminate the time and hassle usually associated with having to fill out complex three to five-page forms in order to obtain a car insurance quote. Developed in-house, One Quick Quote connects consumers to a panel of Insurers and subsequently returns the best price based on a combination of consumer entered data and information sourced from external partners. If a consumer is happy with their quote they can fully transact online. The launch of One Quick Quote comes off the back of a record-breaking year which has seen One Call Insurance record an almost 20% year-on-year growth in GWP (Gross Written Premium). Furthermore, as of January 2018 it has reached the 500,000 live customer milestone.



Market Movers and Shakers

BIBA has appointed Julie Page, CEO of Aon Risk Solutions as its Deputy Chair. She has been on BIBA’s board for nearly four years and replaces Tim Ryan from Ryan Insurance Group who has been Deputy Chair since 2015 and remains as a BIBA board member. Page was previously chair of BIBA’s international and wholesale Brokers’ advisory board. Ian Cooper, Partner at Lockton, takes over the role and joins the main board.

Broker Network, the UK’s leading network for independent insurance Brokers, is gearing up for further growth with the appointment of Tony Monnington as its new Commercial Director.

HDI Global SE - UK (HDI) has unveiled plans to launch a new Accident & Health Department within their UK operation. Building upon their group-wide expansion in the class, Kieran Morrin has been employed as its Director.

Leading global advisory, broking and solutions company, Willis Towers Watson (NASDAQ: WLTW), has announced the appointment of Tim Rees as Client Engagement and Strategy Leader for the UK Cyber Risk Solutions business.  

Covéa Insurance is pleased to announce that it has appointed Aaron Jeffries to the newly created role of Apprenticeship Levy Lead. Aaron will be responsible for maximising the value of the apprentice levy to develop tangible and exciting routes to qualifications that attract and recruit diverse talent and support the organic growth of talent within Covéa Insurance.

Three new appointments to the Lloyd’s Franchise Board were confirmed by Chairman Bruce Carnegie-Brown. Mike Bracken, Nigel Hinshelwood and Fiona Luck will come onto the Board as Non-Executive Directors for three year periods commencing 1st March 2018.

Gallagher has announced new leadership for two of its specialist broking areas within the UK Small Business & Personal Lines division, following the promotion of James Collins and hire of Elaine Lennox

Protection and Health insurance specialist, APRIL UK, has appointed Lisa Aggett as Broker Development Manager as it continues to strengthen its Broker development team.  Lisa will focus on Broker relationships in the South West region. 

Lockton, the world’s largest privately owned insurance Broker, is bolstering its professional services expertise with the appointment of James Page to the Professions Team. 

Lawrence Gill has returned to KBIS as Business Development Director as well as managing the Liability department, after having left the firm for four years to work in the London Insurance 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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