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General Insurance Newsletter Monday 13th May 2019

13 May 2019

Insurance News

International General Insurance Holdings (IGI) is set to expand into Intellectual Property with a new product. The policy will provide wide protection for patents, trademarks, copyright, design rights and contractual liabilities involving Intellectual Property and cover legal costs and damages for Intellectual Property infringement and enforcement actions. The firm detailed that the new product will be introduced to work alongside its existing Legal Expenses offering that covers both before-the-event (BTE) and after-the-event (ATE) Legal Expenses insurance. It will be launched on 15 May at the Biba conference in Manchester.

Aston Lark Group Chief Executive Officer Peter Blanc has confirmed that the business is close to agreeing a deal with a new private equity backer. Insurance Insider reported that the bidders are Abry, Centerbridge and Goldman Sachs. Blanc stated in January this year that Aston Lark was looking for a change in private equity owners and a week later he confirmed that the Broker had employed Macquarie and Livingstone to help generate more investment.

The Association of Consumer Support Organisations (ACSO) has urged MPs on the House of Commons Justice Select Committee to lobby the Ministry of Justice (MoJ) to give more details about the development of the small claims portal. The trade body, which was formed in March this year with the aim to “de-toxify the compensation culture”, explained that the portal is due to be launched in April 2020. The small claims portal is being funded by Insurers and overseen by the MoJ, with ministers believing it will bring down costs and make it easier for people with minor injuries to make a claim without needing legal help.

AXA is becoming Liverpool Football Club’s (LFC) official training kit partner for season 2019-2020. This partnership is cemented in AXA’s new brand promise: Know You Can. Thomas Buberl CEO of AXA commented: “We’re excited by this new important step in our partnership with Liverpool that started in 2018. To have the AXA logo feature on the Liverpool training kit is a great symbol of our strong ambition to strengthen the AXA brand awareness globally. By building on our similar values and vision with Liverpool, we will also be able to better spread our new promise to our customers on self-belief with the tagline: Know You Can.”

A woman has been sentenced after she lied about her personal car being stolen to make a fraudulent insurance claim. She was a serving Metropolitan police officer at the time of her offence. On Friday 26th April 2019, Maisie Edmonds, 25, of Staines-Upon-Thames, Surrey, pleaded guilty at Hendon Magistrates Court. She was sentenced to a 10 week curfew from 9pm-6am and ordered to pay a £400 fine, as well as £80 in court costs. The City of London Police’s Insurance Fraud Enforcement Department (IFED), which led on the investigation, established that Edmonds reported her BMW as stolen to the Met’s Ealing Broadway police station in May 2017. She claimed it had been stolen while she was on duty. A day later, she contacted her Insurer and stated that when the car was stolen, she was in possession of the two key fobs which belonged to the car.

In 2018, Aviva added their core personal lines products on to their award-winning digital trading platform, Fast Trade. The move was part of their continued commitment to support independent and regional Brokers by providing a simple, convenient, straightforward and alternative way to trade personal lines with Aviva. Since launch, over 1,300 brokers have accessed the platform to provide personal lines cover to more than 2,000 customers. Brokers benefit from accessing Aviva’s best possible prices on Fast Trade thanks to savings made in transaction fees and print costs being passed back on to the customer. They can also access Aviva’s expert Underwriters through Live Chat and instantly download or share documents across Aviva’s commercial and personal lines digital offering, all in one place.

In further news.... Aviva has pledged to donate to SocialBox.Biz’s “Laptops for the Homeless” initiative to help disadvantaged people gain access to digital services. A community interest venture in London, SocialBox.Biz provides old computers to those in accommodation services, young people in the care system, as well as the likes of refugees. It works with accommodation and charitable organisations to ensure that laptop handovers occur within facilities that have suitable services like an internet connection. “Digital access is such an integral part of modern society,” noted SocialBox.Biz founder Peter Paduh. “It’s almost impossible to apply for a job or connect with a loved one without technology today, so SocialBox. Biz is working to do something about it."

Conceptual artist Kevin Abosch created a digital work, Forever Rose, which he sold to a collective of ten investors for cryptocurrency valued at $1 million. Every buyer received one tenth of the virtual rose as a token on a blockchain. The token is theirs to keep, sell, or give as a gift. Kevin Abosch is one of a number of conceptual artists who are exploring the potential of blockchain in the art world. He previously created a physical and virtual work, IAMA Coin, which involved him having some of his blood imprinted as a blockchain address, effectively turning his blood into a crypto-currency. For buyers and sellers of art, a secure blockchain registry can give greater transparency and an immutable record of the provenance and ownership history of a work of art. However, the blockchain is only as robust as the data that is entered into it. This means that for blockchain to truly gain traction in the art world, the records need to be expanded and for more dealers, auction houses and art data providers to become involved. The potential for an immutable trail of a work’s provenance provides a massive opportunity to get greater clarity during the claims process if a work is stolen or damaged.

It is with great sadness the Directors of H.W.Wood Ltd advise that Hugh W. Wood, Chairman and Founder of HW International, passed away peacefully on April 26th, 2019. Hugh Wood founded the HW International Group and grew the insurance brokerage business to having offices in 10 countries. He was also an accomplished and world-renowned Philatelist. The business and stamps were his passion. Those who worked or interacted with him will know what a brilliant mind and strong character he was.

The parties in the ongoing legal dispute between Gallagher and Ardonagh returned to the Royal Courts of Justice yesterday, as the court heard closing statements from two of the defendants. The hearing revolves around an alleged conspiracy to poach employees from Gallagher-owned Alesco carried out by Bishopsgate, which is part of the Ardonagh group. The case centres around four employees who left Alesco in 2017, namely Nawaf Hasan, Peter Burton, Gerard Maginn and James Brewins. Hasan and Burton are named individually as defendants in the case.

Bristol-based Hayes Parsons Insurance Brokers has teamed up with Genasys Technologies on a digital transformation programme. South African software house Genasys launched in the UK in March last year and Hayes Parsons stated that it will now migrate its schemes products onto the firm’s Ski platform.

RSA UK has developed its Global Risk Solutions division to focus on five key areas. The provider said it would highlight Rail, Chemical, Food and Beverage, Real Estate and Renewables – cover areas where RSA already has strong expertise and a broad risk appetite. The practice’s leads will be responsible for proposition development and marketing, managing key customer and associated Broker relationships and for overall profitability and growth of the practice.

In other news.... The first quarter results continues with the trading update from RSA Insurance Group Plc. With Solvency II coverage ratio of 164% on March 31, the group reported tangible shareholders’ equity and tangible net asset value per share of £2.9 billion and 279 pence, respectively. In terms of profitability, RSA cited higher operating profit at constant currency without revealing the actual figure for the first three months of the year. As for underwriting profit, it stated: “Group weather costs were 3.2% of net earned premiums. This was 1.9 points lower than Q1 2018 and in line with the five-year average. Weather costs were significantly higher than prior year in Canada but lower in the UK & International (UK&I) division.” RSA added that, thanks to better results in the UK, its large loss ratio improved to 8.5% from 9.7% in the first quarter of 2018. Attritional loss ratio, meanwhile, was only slightly better compared to that of the previous year.

Insurance comparison technology specialist i-Wonder has launched two products for Gap and Warranty insurance. The provider detailed that the websites will allow customers to compare quotes and buy insurance online. It also stated that i-Wonder has obtained the backing of one of the UK’s top four insurance comparison websites for launch and is working with a number of leading providers of Gap and Warranty insurance.

According to a recent AON Political Risk and Terrorism report, 80% of all terrorism incidents in 2017 targeted businesses. That’s a worrying statistic for both business owners and governments, but one that Geoff Stilwell, CEO and Managing Director of Beech Underwriting, believes isn’t as relevant in the United Kingdom. Stilwell says this because of a simple differentiator that the UK has that many European countries do not: surveillance culture. On average, we are caught on camera around 70 times per day; by one of the 1.85 million CCTV cameras around the UK, 500,000 which are in London alone, and which the government spends approximately £2.2 billion on each year.

Global reinsurance giant Munich Re has taken a near 25% hit to its net profit in the first quarter (Q1) of 2019, bringing in €633 million (about £545 million), down from €827 million (about £712 million) in the same period last year.  The firm has attributed the drop to “higher basic losses and greater expenditure for claims from previous years,” battering its bottom line. It had to pay out €267 million for losses from Typhoon Jebi, which struck Japan in September last year, causing 11 deaths. This was the largest expenditure for major losses in the quarter, which amounted to €479 million, up from €62 million the year prior.

Smaller Central and Eastern European insurance companies that are facing difficulties are possible acquisition targets for Italian giant Generali. As outlined in the multinational Insurer’s previously announced growth acceleration plan, one key focus is Europe where Generali is the third largest among its peers. Now group Chief Executive Philippe Donnet has pointed to small- and medium-sized firms contending with regulatory woes and business diversification challenges as potential prospects in Generali’s bid to reinforce its regional presence.

It’s now officially a done deal between DARAG Group Limited and DONAU Versicherung AG, whose Italian non-life portfolio has been transferred to the legacy acquirer. The transfer was completed after being given the consent of the Italian insurance regulator, Istituto per la Vigilanza sulle Assicurazioni, following the green light for the acquisition from the Austrian financial authority, Finanzmarktaufsicht. As part of the swoop, DONAU’s Italian employees and intermediaries have now come onboard DARAG Group’s Italian entity DARAG Italia S.p.A. In addition, the transaction is treated as a going concern transfer from DONAU into DARAG Italia.

The Bermuda-headquartered specialist Insurer Hiscox Ltd said its gross written premium (GWP) reached US$1.2 billion in the three months ended March 31. In nominal terms, the figure represents a 0.6% increase; at constant currency, 3.3%. Broken down into units, both Hiscox Retail and Hiscox London Market registered higher GWP figures – at US$593.3 million and US$228.6 million, respectively – for the period. Hiscox Re & ILS, on the other hand, posted a 5.6% nominal decline to US$342.8 million. Under the retail operations, the biggest growth in GWP came from Hiscox Asia, which saw a 37.8% jump to US$8.8 million.

American International Group (AIG) has released its financial results for the first quarter of 2019 and it looks like the global Insurer’s major turnaround in general insurance was not enough to sustain the same level of overall net income from last year. For the three months ended March 31, the group reported a lower net income of US$654 million compared to the US$938 million enjoyed by AIG in the same period in 2018. This was despite the massive result from the general insurance operations, which posted an underwriting income of US$179 million in 2019 after suffering last year’s US$251 million underwriting loss.

Deepfakes are fake videos or audio recordings that are made to look and sound authentic with the aid of artificial intelligence (AI) technology. Deepfake technology is readily available and is rapidly improving. Pretty much anyone can create a deepfake to promote their chosen agenda, making it a dangerous tool if used maliciously. To this point, deepfakes have been most prevalent in the realm of amateur hobbyists.  Deepfake technology can be used to misinform the public about an event or manipulate shareholders in a corporate context. If a cyber criminal used deepfake technology to manipulate a corporate earnings video, which was posted publicly on YouTube, and that spoof video then led to a stock crash for the company – how would the Cyber insurance market respond? John Farley, Managing Director, Cyber Practice Group Leader at Gallagher commented “A situation like that might not be covered because many Cyber insurance policies require certain triggers before coverage kicks in... A policy might require a network penetration or a cyberattack before it provides coverage, but in this case, all that’s happened is a manipulation of an existing video that’s already out in the public. It’s not like the client was attacked, so the Cyber insurance policy might not cover that harm or that damage.” When it comes to deepfake videos, it’s almost impossible to take complete preventative action. What companies can do is learn about the risk and try to mitigate any damage as quickly as possible. Farley explained: “When it does happen, people need to recognise it immediately and take that video offline as quickly as possible. I’m looking at ways to get ready for this threat and I’ve been building relationships with vendors who focus on that mitigation space. As this threat evolves, it’s crucial for all good Cyber insurance Brokers to think about new ways clients can be covered for the risk.”

 

Market Movers and Shakers

Brightside Group has confirmed that Mark Cliff has left his Non-Executive Director role at the Broker. He was Chief Executive Officer of Brightside until he stepped down in July 2018 and in August the CEO role was taken over by former Axa boss Brendan McCafferty. Cliff had been with Brightside since May 2015, originally as Executive Chairman before moving to become CEO in September of that year.

Well-known insurance figure Lloyd Hanks has re-joined the board of Apricot Insurance Services as Non-Executive Director. Commenting on the move, Hanks said: “It’s great to be working with the team again in Belfast. Whilst day to day business is taken care of by Stephen McCann, Operations Manager and his team, I will be working with the Insurer panel on relationships and strategic opportunities, building sustainable profitable business.”

Liberty Specialty Markets (LSM), part of Liberty Mutual Insurance Group, has appointed Gavin Coley to the role of Claims Manager - Energy, Property and Construction (EPC). Based in the business’s London office, Gavin takes up his role with immediate effect. He is responsible for managing the Energy, Property and Construction claims team, reporting to James Side, LSM Head of Specialty Claims. Mike Gillett, Liberty Specialty Markets, Chief Claims Officer, said: “I am delighted that Gavin has joined the LSM claims team to manage our Energy, Property and Construction portfolio. I believe that Gavin’s experience and capability, aligned to the outstanding team he inherits, will continue to develop our EPC claims proposition in a manner that fully supports our ambition in that area.”

CLS Risk Solutions, a leading MGA for Legal Indemnity and Transactional Property Risk Solutions, has announced the appointments of a new Business Development Director and Business Development Manager. Amanda Armitage has been appointed Business Development Director. She joins from the Broker Light & Legal Indemnity Solutions, where she was an Associate Director and before that, she was a Business Development Manager for the UK and Europe at Stewart Title. She has 17 years of sales and Business Development experience, specialising in the complex Legal Indemnities market for the past 10 years. Michael Grimwood, Cert CII, has been appointed Business Development Manager. He joins from Zurich where he had various roles across business development and underwriting.

There’s a new man at the helm at Hannover Re. Ulrich Wallin stepped down as Chief Executive of the major reinsurer at the end of this week's annual general meeting (8th May). This saw Swiss Re alumnus Jean-Jacques Henchoz assume the CEO post. Meanwhile a new supervisory board chairman, Torsten Leue, has been elected, replacing Herbert Haas who will continue to serve as a supervisory board member along with the existing line-up and new member Michael Ollmann. The latter succeeds Immo Querner who has left the supervisory board.

Talbot Group has recruited former Marsh Vice Chairman David Batchelor to serve as Non-Executive Chair. The Lloyd’s of London insurance and reinsurance specialist, which last year became part of American International Group (AIG) through the purchase of Validus Holdings, is saying goodbye to Founder and Chairman Rupert Atkin who is stepping down after 28 years at Talbot. Meanwhile Batchelor, who also served as President of Marsh’s international division, spent 17 years at the Broking heavyweight before retiring earlier this year. His appointment at the AIG subsidiary is effective following regulatory and Lloyd’s approval.

Commercial Property insurance expert Richard Montminy, whose experience spans over three decades and both underwriting and broking, is joining specialist insurer Beazley. Effective May 20, Montminy will come onboard the company’s executive committee in his capacity as Global Head of the Property division. Reporting to Chief Underwriting Officer Adrian Cox, he will be in charge of developing Beazley’s global Property strategy and will lead Property teams based across the US, the UK including at Lloyd’s of London and Singapore. Montminy, who previously spent 17 years at Marsh USA, is making the switch from Zurich North America where he was Head of Property for US Commercial Insurance.

EC3 Brokers has snapped up James Murphy from Integro to serve in a newly created role. Appointed as the first-ever Head of Broking at the commercial lines Lloyd’s broker, Murphy will be in charge of expanding marketing activities and developing new partnerships. He came onboard on May 01. The new broking head brings nearly three decades of London market experience, which began at Nelson Hurst & Marsh in 1990. His expertise includes servicing wholesale broker portfolios and placing business for UK and international clients.

Legal & General has announced that Darren Prior has been promoted to Head of Broker in its General Insurance (GI) division. In his new role Prior will be responsible for setting distribution strategies, developing and delivering new product offerings while managing sales teams and accounts across multiple sectors: Broker, Corporate, Affinity and Bank and Building Society. Prior joined L&G in 2016 when he became an Insurance Account Manager and oversaw important Broker/partner relationships involved in the Broker channel.

“Set for demerger” is how Prudential Plc describes the board composition of its UK and European savings and investments business M&GPrudential, which has appointed an additional Non-Executive Director (NED) tasked with chairing the audit committee. With the arrival of PricewaterhouseCoopers veteran Clare Thompson, M&GPrudential’s roster of board members is now finalised in time for the firm’s imminent split with its parent company. In March three NEDs joined the line-up.

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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