General Insurance Newsletter - Friday 17th December 2021

Insurance News

The Financial Ombudman Service (FOS) has proposed to increase its compulsory jurisdiction levy to £106m for 2022/23, a £10m increase on the previous year. In total it has called for a budget of £293.8m which is up from £250m in 2021/22. A consultation document revealed that the plans were being put in place after the service received 90,000 more than expected complaints in 2021/22 and experienced delays in resolving these due to the volume.

Insurers have paid out a total of £1.2bn in Covid-19 related Business Interruption claims, according to the latest set of figures from the Financial Conduct Authority (FCA). The data showed that providers had made initial payments worth £308.4m and final settlements of £916.7m as of 6 December 2021.

The British Insurance Brokers’ Association (Biba) has revealed that the theme of its 2022 conference will be ‘Our Insurance Community’. The conference is scheduled to be held in person next year, marking its 44th edition in May 2022. According to the trade body, the theme brings together key elements of the sector such as the personal nature of insurance and its unity towards the good of its employees and customers.

Specialist Risk Group (SRG) has announced the launch of MX Underwriting which is formed from GB Underwriting, CLS Risk Solutions, Lime Insurance and Irish business Blackrock Insurance Solutions. Lime was formerly the Underwriting Exchange as was bought by SRG backers, Pollen Street Capital in 2018. SRG acquired the other three businesses this year. The operation will be led by Lee Anderson, SRG Deputy CEO, and James Gerry, MX Chairman.

Applied Systems has revealed the results of its annual Applied Digital Broker Survey, which measured Brokers’ digital technology adoption and progression towards a digital environment. In total, 1,819 independent Brokers from across the UK, Ireland, U.S., and Canada participated in the survey, which was conducted in Q1 2021. The report indicates that the number of Brokers creating and following digital strategies are increasing, along with the adoption of customer service technologies and cloud.

The court spat between Kingfisher Insurance and the sellers of Fresh Insurance has been settled. The terms are undisclosed. Kingfisher, which bought Fresh in 2018, launched a campaign against the Fresh warrantors in 2020 accusing them of breaching warranties, misuse of the Motor Insurance Bureau’s (MIB) MyLicence platform, data breaches and misconduct. Fresh denied the accusations and hit back accusing Kingfisher of dismissing key Directors in “bad faith” as part of a plan to avoid paying earnout obligations following the deal and inducing an employee to provide evidence to support its misconduct claims. Kingfisher, formerly known as Vantage, denied those claims.

Prestige Insurance Holdings is on track to launch a new digitally led broking brand in the new year. The fresh brand, also known as Stroll, will bring new technical, product management, customer support and marketing jobs available in Belfast, Newry, Londonderry, as well as remote working opportunities. The move will see the group invest over £3million and create 60 new jobs to expand its digital capabilities.

Allianz has added Allianz Legal Services to its Complete Directors & Officers (D&O) product. The Insurer says that the product is available for policies incepting or renewing on or after 4 December 2021. Designed specifically for businesses with a turnover of up to £200m, the Complete D&O product offers Personal Liability cover for company Directors, Officers and Managers. The provider added that the product would also protect the clients from claims that may arise from the decisions and actions taken within the scope of their regular duties.

In further news...Allianz UK’s now 11-month-old Broker Apprenticeship Scheme is proving to be a successful programme, as evidenced by the “resoundingly positive” feedback from participants. “The one-to-one coaching sessions are interactive and thought-provoking, as well as helping to guide me through,” commented Daines Kapp Insurance Brokers’ George Worby, who is one of the 22 brokers currently being nurtured by the Allianz Broker Apprenticeship Programme. “They have made me think about my position in my company and how I can contribute, from simple day-to-day activities to comprehensive processes."

Christmas is well on its way but where other businesses are winding down in anticipation of the new year, the team at MCE Insurance are all-hands-on-deck. Julian Edwards, CEO of the UK Broker MCE Insurance Ltd (and of Gibraltar-based under-administration Underwriter MCE Insurance Company Ltd - now known as Green Realisations 123 Ltd) noted that even in best of circumstances, navigating changing a portfolio of MCE’s size from one capacity provider to another would have the business at complete capacity. So doing this coupled with supporting the run-off of MCE-GibCo and while dealing with ongoing disputes with the Gibraltar Financial Services Commission (GFSC) has made for a very difficult time indeed. Edwards has publicly voiced his disagreements with both the Gibraltar regulator and the joint Administrators Kroll but his latest conversation is not a debate on wrongdoings but rather a request for consideration.

Aviva has increased the value of its ordinary share buyback programme from £750 million to a maximum aggregate consideration of £1 billion, with a maximum of 392 million shares. The programme has also been extended until March 31. “We are increasing our share buyback to £1 billion as part of our commitment to return at least £4 billion to ordinary shareholders,” said Amanda Blanc, Group CEO of Aviva. “We will update further on our capital return and dividend plans at our full year results in March 2022.”

The Chartered Insurance Institute (CII) is reinstating its historic funding model for local institutes next year. The historic model will see the CII equitably share its available funds – about £1.5 million, as confirmed by the organisation during its last annual general meeting – as payment for the local institutes. The payment distribution will be based on the annual assessment completed by each local institute’s members over the summer.

Payment integration provider Imburse has announced a new global partnership with Mastercard, to automate and enhance payments for the insurance sector. The collaboration aims to transform the payment experience for insurance organizations and their customers by offering digital premium collection and claims payment solutions. According to a recent survey, automation can reduce the cost of an insurance claim journey by as much as 30 percent.

MetLife UK has seen a 250% increase in Long-COVID claims in Q3, according to internal data findings. The rise in claims comes as an estimated 1.2 million people in the UK have reported suffering with Long-COVID in the past four weeks. This is up from 1.1 million in October – a jump of nearly 10%. MetLife’s own claims data reveals that Long-COVID accounts for 10% of new Group Income Protection claims in the last three months – up 250% from the previous quarter.

Environmental, social and governance (ESG) practices have become more than a buzzword, with businesses across all market sectors including the insurance sector, making efforts to adopt and integrate ESG practices into their day-to-day operations, says GlobalData. A recent GlobalData insurance industry poll revealed that most respondents (21.6%) believed that managing the long-term risks of climate change is the main driver for the adoption and integration of ESG practices in the insurance sector.

The Chartered Insurance Institute has confirmed it will reinstate its historic funding model for Local Institute funding for 2022. This model seeks to share the available funds – £1.5m as signed off at the CII’s 2021 AGM – equitably, as a payment based on the annual assessment completed by each Local Institute’s members over the summer months.

A Northern Ireland group of insurance businesses is investing over £3million and creating 60 new jobs to expand its digital capabilities. Prestige Insurance Holdings is set to launch a new digitally-led broking brand next year with new technical, product management, customer support and marketing roles available in Belfast, Newry and Derry~Londonderry, as well as remote working opportunities.

Mergers & Acquisitions

Zurich Insurance Group has agreed to acquire Estonia-based Artificial Intelligence (AI) start-up AlphaChat. Founded in 2017, Estonia-based AlphaChat provides conversational AI technology for customer service automation. In a statement, Zurich said that the acquisition would “further enhance” its digital capabilities and help it create “a consistent and efficient approach to developing intelligent virtual assistants across businesses, for both internal and external purposes.”

Trade Credit Broker Xenia Broking Group is aiming to triple in size over the next four years, according to Chief Executive Officer Tim Coles. Coles said that the business, which currently has a GWP of £70m, was looking to grow both organically and via acquisitions. The Nexus-owned Broker has made a series of deals over the last few years and most recently bought Northampton-based Peter Hill Credit & Financial Risks.

The Ardonagh Group has announced a significant new equity investment into the group led by existing long-term shareholders Madison Dearborn Partners (MDP) and HPS Investment Partners (HPS), alongside new Co-Investors through accounts managed by MDP and HPS. The business stated that the new Co-Investors included a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA), and “several other large global institutions”. It details that under the terms of the transaction, funds affiliated with MDP will increase their shareholding in the Group and HPS will reinvest in the company. Additionally, co-investors will acquire more than $1bn (£754m) equity through accounts managed by MDP and HPS as part of the transaction, which values Ardonagh at $7.5bn.

PIB Group Ltd has expanded its European footprint again and taken its first step into the Dutch markets. PIB, which is backed by Private Equity firms, Apax Funds and The Carlyle Group, has acquired Light (pending regulatory approval), an independent insurance Broker based in the Netherlands and boasts a 35-year trading history. The move creates further opportunities for PIB to acquire other Brokers in the territory, reflecting the Group’s ambition to build a leading pan-European commercial insurance brokerage.

Movers & Shakers

A “very excited” Chris Strong is now part of the Willis Towers Watson (WTW) roster in London in his new capacity as Head of WTW’s Environmental Practice. Strong made the switch from Allianz Global Corporate & Specialty. His credentials also include years spent at AIG, Chubb and QBE.

Global reinsurer Swiss Re has announced the reorganisation of its group operations which will see Group Chief Operating Officer Anette Bronder leave the company. Swiss Re has also announced the appointment of Pravina Ladva as Group Chief Digital & Technology Officer and as a member of the Group Executive Committee, effective January 01, 2022.

Allianz Global Corporate & Specialty SE’s (AGCS) Global Head of Financial Lines Shanil Williams is joining the AGCS board of management in the New Year when he takes over from Tony Buckle as Chief Underwriting Officer Corporate (CUOC). A New Zealand national, Williams came onboard AGCS in 2016 as NZ Country Manager. He relocated to Munich in 2018 to assume the position of Global Head of Commercial for Financial Lines, before moving to his current post the following year. At AIG, where Williams previously spent 14 years, he held increasingly senior Financial Lines regional leadership roles in Auckland, Johannesburg, Paris and London.

Aon plc has announced that it has appointed Angela James as Chief Broking Officer for Commercial Risk in the UK. James brings 15 years of insurance experience to Aon with extensive knowledge of direct and facultative risk transfer solutions throughout the global marketplace.

Marsh has announced the appointment of Ryan Bond as Head of Climate and Sustainability Insurance Innovation, effective 1 January 2022. Mr. Bond joined the business in 2007; most recently was Chief Executive, UK and Ireland, of Bowring Marsh, Marsh’s international placement business. Before joining Marsh, he was a Division Director at Willis Towers Watson for six years. Mr. Bond is a board member of the British Insurance Brokers’ Association (BIBA) and also serves on BIBA’s International & Wholesale Advisory Board.

In further news...Marsh has announced the appointment of Catherine Read as Chief Operating Officer (COO), UK & Ireland, effective January 4, 2022. Ms. Read will join the UK & Ireland Executive Committee and the board of Marsh Ltd. Ms. Read brings nearly 20 years’ experience in COO and senior audit roles in the financial services industry to Marsh. She will join Marsh from Royal London Asset Management (RLAM) where she is Executive Director and COO, responsible for all aspects of operations and data. Prior to RLAM, she held senior positions at Royal London Group and PricewaterhouseCoopers (PwC). She also spent several years in her early career at Barclays Capital and qualified as an accountant at PwC.

Allianz Holdings has appointed José Morago to the position of Risk Director for its Personal Lines business, with immediate effect. José has over 25 years’ experience in the market and joins Allianz following roles as Group Risk Director at Aviva and Deputy Chief Risk Officer at the Financial Conduct Authority. José was also the Chief Risk Officer at Ageas UK. His early career was spent in the US and Spain in the insurance and banking sectors, including senior risk roles at McKinsey, Moody’s and Banco Santander.

American International Group has announced that Constance Hunter will join the company as Executive Vice President, Global Head of Strategy & ESG in early 2022. Ms. Hunter joins AIG from KPMG, where she has served as Chief Economist since 2013 and as a member of the Growth and Strategy leadership team since 2020. Prior to that, she served as Deputy Chief Investment Officer at AXA Investment Managers, where she helped lead the management of over $500 billion in fixed income assets.

A “very excited” Joe Hanly is joining insurance intermediary Specialist Risk Group (SRG) as Group Chief Financial Officer. Based in London, the PwC and Integrity Software alumnus will join the board at SRG. Meanwhile it’s unclear where Hanly’s predecessor, Charlie Love, is headed.

Markel Corporation subsidiary Markel International has announced the appointment of Paul Western as a Senior Underwriter for Hull and War. Prior to his appointment, Western spent 27 years at MS Amlin, where he was the Head of Hull and War. He currently sits on both the joint Hull committee and the joint War committee at Lloyd’s.