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General Insurance Newsletter - Friday 9th March 2018

09 Mar 2018

Market News

Zurich Insurance has been named one of 2018’s Top Companies for Executive Women by the National Association for Female Executives (NAFE). The distinction is awarded to American companies where women have considerable clout to make decisions and influence their company. This is Zurich’s third straight year being recognized by NAFE.

Insurance technology start-up Urban Jungle, which recently completed a £1m round of seed investment, has rolled out a new product for home renters. The tenant’s liability insurance is not a new proposition in itself but the insurtech aims to be “the online alternative” – instead of renters having to source more expensive cover from letting agents. The London-based disruptor offers the product at a lower price, as part of its “mission to build an insurance provider that customers love.”

esure has revealed better-than-expected results that include a 35.6% rise in full-year pre-tax profit, sparked by demand for its motor insurance products. The company saw Gross Written Premiums spike by 25.2% over the year, standing at £820.2m – well above analysts’ previous predictions, according to Reuters, which had estimated £813m. Focusing on the motor section, GWP increased by 30.3% to £734.3m for 2017. The company highlighted that motor premiums increased during the first half of last year due to new rules surrounding personal injury claims – but that when further changes to the Ogden rate were proposed, the rise in premiums reversed.

Arbitration and litigation finance provider Burford Capital Limited is setting up its own insurance firm in Guernsey. Experienced in providing adverse costs cover – as it had a middle market insurance business built on an agency relationship with Munich Re – the investment management company is now on track to launch its wholly-owned insurer amid significant demand, particularly in larger cases. Announcing the move, Burford Capital cited limited capacity in the insurance market for litigation claims with adverse costs in the area of £20m. It is this hole that the litigation funder wishes to address, and it is well on its way after receiving outline approval for the Guernsey-incorporated provider. Full regulatory approval for Burford Worldwide Insurance is expected to follow shortly. 

In July 2017, FICO introduced an industry-first when it included fourth party risks in its FICO® Enterprise Security Score. Now the Silicon Valley analytics firm has unveiled another pioneering enhancement to the cybersecurity rating – incorporating risk assessment and modelling capabilities for Insurers. With the new insurance dashboard, underwriters will be able to calculate risk metrics and simulate risk scenarios, as well as insert their historical data. The added features also allow the review of risks at a policy, portfolio, and book-of-business level, plus the modelling of both primary insured risk and risk from primary insureds’ fourth party relationships.

Legal & General (L&G) Group posted its 2017 financial results, revealing a mixed bag for its insurance businesses. General Insurance saw gross premiums increase 13% to £369m, up from £326m in 2016, which the insurer said was “despite the pressures of a competitive market and maintaining [its] pricing discipline.” However, combined operating ratio rose to 93% in 2017, compared to 89% the previous year, and operating profit fell from £52m to £37m year-on-year. L&G’s General Insurance direct business delivered gross premiums of £139m in 2017, representing 15% growth on 2016, and now accounts for 38% of gross premiums. The Insurer said it is now ranked second for household new business via price comparison websites, which in total accounts for over half of UK direct household gross premiums.

The UK insurance sector is “underplaying its opportunity to be the hub for InsurTech”, according to Wrisk Co-Founder Niall Barton. At an All Party Parliamentary Group on Insurance and Financial Services meeting in London on 6 March, the former Oxygen group CEO stated that Brexit was an underlying issue for InsurTech. Experts at the meeting agreed that attracting talent to the UK InsurTech sector was important. Owen Morris, Managing Director at Aviva Quantum, highlighted that bringing together insurance knowledge with start-ups in Aviva’s digital garages had been successful. Barton also urged incumbent Insurers and Brokers to collaborate with InsurTech start-ups, adding that partnerships are a “win-win for the industry”. However, he added that in his experience “trying to get incumbents to engage with something different has been challenging”. Barton concluded that changing customer expectations combined with the advances of challenger banks meant “insurance is the last area to make big progress” in technology. BIBA has also urged Brokers to work with InsurTech firms, after it conducted a survey where almost 40% of brokers said that the broking sector has not embraced technology-based innovation well.

In a recent article, Zurich has looked at Artifical Intelligence trends to look out for in 2018. According to the article within the professional services sector, AI could alter the way people expect to access information and advice, as it paves for virtual assistants to play a greater role in filtering and responding to queries and freeing up professionals’ time as well as make sense of vast quanities of data to help provide valuable insight. Whilst for the Construction sector, AI could help with improving site safety or aiding claims denfensibility. For SMEs, AI could help to turn customer data into revenue-generating in sight, whereas for the Health and Social Care sector it could help with detecting and preventing illnesses, through wearable smart technology and chatbots. However, there are many risks associated with AI, for example the monitoring the quality of information it provides, liability for bad advice given by a chatbot, if an AI system misplaces or manipulates data and losing the personal touch.

Azur, a Managing Digital Agent specialising in the UK’s high net worth market, has announced the launch of a new insurance product designed specifically for car collectors. Collector Car, underwritten by AIG, provides enhanced cover for owners of both classic and modern collectibles kept for a hobby or investment.The Channel Syndicate and Canopius will join Liberty Specialty Markets in forming a consortium to provide capacity for Toredo, an online platform for single situation trade credit insurance.The London Market Credit Consortium (LMCC), will provide up to $75m of capacity per risk with a maximum two-year period. The capacity will initially support short-term trade finance business and can be accessed by any Lloyd’s accredited Broker signed up to the Toredo platform. 

New research has shown that, in relation to its population figures, Durham has the highest number of fines and convictions for people driving without car insurance in England. After sending out Freedom of Information requests to police forces throughout the country, the insurance comparison website, Cuuver, discovered that there have been over 118,000 recorded incidents of uninsured drivers on roads across England over the past four years. Despite a population of just 48,069 people, Durham saw a total of 1,087 recorded incidents of people driving without car insurance between 2013 and 2016. This averages out at 0.57% of the population. In contrast, Manchester's population of 2.7m only had 1,810 recorded incidents in the same time period. This makes Manchester the lowest city in England for uninsured drivers, with just 0.02% of residents being fined or prosecuted. The police region with the highest number of reported incidents was Greater London. Between 2013 and 2016, a total of 70,354 incidents of driving without insurance were recorded. However, this only works out at 0.21% of the population. Greater London Police also told Cuuver that the highest recorded speed in their region was 155mph in a 50mph zone.

Sutton Winson has been accredited the ‘Investors in People’ gold standard. Commenting on their proud achievement, David Thomson, Managing Director said: “After being accredited with the insurance industry’s gold standard of ‘Chartered Insurance Broker’ in December 2017, we are immensely proud to now be accredited with another one of the most important accolades in business. The assessment was in-depth, independent, and demonstrated that the critical attributes of Trust; Transparency; Empowerment; Sustainable Success; Living the companies Values; Ability to Adapt and Rewarding high performance were truly embedded in our culture. I have not just the management team to thank, but each and every individual who makes our company successful and a great place to work.”

Aviva has revealed a Combined Operating Ratio (COR) in the UK of 93.9% in its financial results for 2017. This is compared to the 106.3% posted in 2016, when the provider stated it had been impacted by the Ogden rate change, which added 12.4% to the figure. The Insurer’s UK general insurance operating profit grew by 4% to £408m (2016: £392m), which it said was due to “improved underwriting”. The provider achieved total Net Written Premiums (NWP) in the UK of £4.08bn (2016: £3.93bn) and stated that the increase had been driven by growth in its “chosen channels and products including digital motor and commercial non-motor”.


Market Movers and Shakers 

GRP has appointed Clive Nathan as CEO of the group’s MGA division, joining in April. He will succeed Stephen Ross who remains as Group Chief Operating Officer and moves to work on mergers and acquisitions.

Dominic Clayden is taking over as Chief Executive Officer of the Motor Insurers’ Bureau (MIB) on 14 May 2018. He succeeds Ashton West and will also join the organisation’s board as Executive Director.

AmTrust Law, the legal expenses insurance division of AmTrust International, has appointed Ian Coleman and Bob Knock to the roles of Senior ATE Underwriters, effective immediately.

AmTrust has announced the appointments of William Waddell-Dudley and Jahangez Chaudhery as joint Heads of Accident & Health and Fraser Waters as an Accident & Health Underwriter for AmTrust at Lloyd’s as it continues to build on its strong Accident & Health Lloyd’s offering.

Tasker Insurance Group confirms the appointment of Samuel McCarthy as Motor Executive within Tasker Insurance Brokers.

Canopius AG (Canopius) has announced that Mike Duffy has assumed the position of Chief Executive of Canopius Managing Agents, the group’s principal regulated entity.

Gallagher has continued its investment in building an expertise-led UK-wide Public Sector and Education practice with the appointment of sector specialist Steve Lewins, as Client Director for Wales and West.

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

Meet our specialist General Insurance team here.

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