Claims Newsletter Wednesday 1st November 2023

Claims News

NFU Mutual predicts that October and November will see a 34% rise in theft than the average for the rest of the year. This comes after analysis of insurance data for the past two years. Dark nights and clocks going back create opportunities for thieves to target homes and cars. Home and motor insurer NFU Mutual urges people not to neglect security during this time. Theft of and from cars sees a greater rise during this month, though there was also an increase in the average number of home theft claims. (Emma Cockings, 30/10/2023, Claims Mag, 'NFU Mutual predicts spike in theft as nights get darker')

At the 2023 Harbour Litigation Funding Annual Lecture, a robust defence of the new fixed recoverable costs regime took place from the Deputy Head of Civil Justice. The new system allows fixed recoverable costs for cases worth up to £100,000. He simultaneously acknowledged that it is not as simple as he would like. Sir Colin Birss, a Lord Justice of Appeal, looked at issues coming out of the Civil Justice Council costs review he chaired earlier this year. He stated; “We know that claims are not being brought or defendants are throwing in the towel because the cost risk is too high. That is part of what the fixed recoverable costs are trying to address". (Emma Cockings, 30/10/2023, Claims Mag, 'Deputy head of civil justice defends new fixed recoverable costs system')

The Criminal Injuries Compensation Authority (CICA) will potentially under-compensate victims of crime unless they go to appeal, analysis shows. Victims risk losing tens and thousands of pounds if they do not appeal initial decisions. The Association of Personal Injury Lawyers (APIL) analysed data and found that significant differences exist between the initial offers made by CICA and the final offers made when victims appeal. An average of £7,848 was the initial offer for each claim in the 379 cases that reached appeal in 2022/23. But at appeal, the CICA’s offer in these cases increased to £47,339 – six times more per person, the data shows. (Emma Cockings, 27/10/2023, Claims Mag, 'Analysis from APIL detects issues within CICA scheme')

Kennedys have released a report named “Claims inflation in non-injury insurance losses: a global review” in October 2023. The report states that cost inflation, the impact of the pandemic and the Russia/Ukraine war on supply chains and frustrations with governments and corporations are driving excess claims inflation. The report looks at the nine countries that Kennedys has in their global netowork to illustrate how claims inflation is a global issue. Kennedys lawyers hope to spark a discussion across the insurance market to encourage greater collaboration. Social inflation, increasing the volume and cost of claims attributed to social trends, causes many of these issues. These include: the cost-of-living crisis, climate change activism, the #MeToo movement and gender inequality. (Emma Cockings, 26/10/2023, Claims Mag, 'Kennedys releases report addressing global claims inflation')

The latest Gracechurch-BIBA survey has shown that insurance service has improved, but there is still room for progress. The results of the Gracechurch-BIBA UK insurers monitor shows that the average Net Promoter Score (NPS) is up by nine points since January. It is up 16 points since mid-2022, showing gradual improvement. Despite this improvement, the overall NPS is still at minus four, indicating room for further improvement. (Emma Cockings, 26/10/2023, Claims Mag, 'Gracechurch-BIBA survey reveals improvements in insurance service')

nShift, a parcel and delivery management software provider, and Cover Genius, an insurtech for embedded protection, have introduced nShift Insurance, which can provide shipping insurance for nearly one billion shipments from European merchants. 57% of online shoppers expect a full refund if their package arrives damaged. With over half of consumers receiving damaged goods each year, online retailers risk significant revenue loss to replace and reship those items if accidents happen during the delivery process. This embedded protection solution allows nShift’s online retailers to replace items that are lost, stolen, or damaged in delivery. This will help them deliver better service to their customers, build loyalty and encourage repeat purchasing. (Emma Cockings, 24/10/2023, Claims Mag, 'nShift and Cover Genius partner on shipping insurance initiative')

Hastings Direct has teamed up with ARAG, a leading legal expenses insurance and assistance provider, to offer vehicle hire insurance to its extensive motor client base. This move aims to enhance the overall customer experience and drive digital growth for both companies. This new policy provides customers with a like-for-like replacement vehicle in the event of a total loss of their insured car or van due to fire, theft, vandalism, or an accident for which they were at fault. This comprehensive solution aligns with Hastings Direct’s commitment to ensuring that their motor insurance customers are not left without transportation during challenging times. (Emma Cockings, 20/10/2023, Claims Mag, 'Hastings Direct partners with ARAG for vehicle hire insurance')

Charles Taylor Assistance, a subsidiary of the Charles Taylor Group, is celebrating half a century of support to the insurance sector. Originating in 1973 as CEGA, a family enterprise, it has evolved into a global leader in medical and security assistance, travel risk management, and claims solutions. Since its acquisition by Charles Taylor in 2016, the company has established a presence in more than 100 locations worldwide. Jody Baker, Chief Executive of Charles Taylor Assistance, attributes the company’s enduring success to its adaptability and innovative spirit in responding to the changing needs of clients and their customers. (Emma Cockings, 20/10/2023, Claims Mag, 'Charles Taylor Assistance celebrates half a century supporting the insurance industry')

Academy Insurance Services has unveiled new branding and a fresh logo as it gears up for a growth strategy following an MBI/MBO deal in July, with significant investment from private equity investor Blixt Group. This strategic move is focused on the customer’s experience, underlining the company’s determination to fuse people, technology, and data. Founded in 1995, Academy Insurance Services now serves 60,000 customers across the UK through 11 offices. In 2023, Blixt Group invested in the company, providing resources for technological and HR enhancements. (Emma Cockings, 9/10/2023, Claims Mag, 'Private equity investor Blixt boosts Academy Insurance’s growth plans')

Risks relating to artificial intelligence and data feature in the top 10 of areas for concern for both UK experts and the general public for the first time, according to a new report. The research by AXA reveals that the UK public are more worried about the impact of AI than their European counterparts, who do not rank it as one of their top 10 concerns. UK experts and the public also ranked cyber risks in their top three, alongside those surveyed in America, Asia Pacific and the Middle East. (CIR, 31/10/2023, 'AI and data rise on list of top risk concerns – report')

KYND has added a new internal security feature to its KYND ON cyber risk monitoring product, to provide an internal in addition to an external perspective of an organisation’s security posture. The new feature aims to enhance the ability to identify any areas of risk or exposure and prioritise mitigation efforts to strengthen cyber resilience. By completing questions about security processes and policies within the KYND ON dashboard, internal vulnerability insights are now incorporated into organisations’ overall risk assessments alongside prioritised, clear recommendations to remediate issues. As well as being available for KYND ON customers, these exposure insights can also be utilised by portfolio managers, enabling them to easily identify high-risk organisations within their portfolio, allocate resources effectively, and have all of this information accessible in one place within the ON platform. (CIR, 30/10/2023, 'KYND adds internal security capability to bolster cyber risk monitoring')

Early detection is becoming more important than ever in the battle against ransomware and extortion claims as cyber threats continue to evolve, according to a new report by Allianz Commercial. It warns that hackers are increasingly targeting IT and physical supply chains, launching mass cyber-attacks, and finding new ways to extort money from companies of all sizes. Most ransomware attacks now involve the theft of personal or sensitive commercial data for the purpose of extortion, increasing the cost and complexity of incidents, as well as bringing greater potential for reputational damage. (CIR, 27/10/2023, 'Detection tools increasingly important as cyber claims surge – Allianz')

Cyberattacks are now the leading cause of IT downtime for the first time according to research by Databarracks. Its latest data health check report, which surveyed 500 UK IT decision makers, nearly a quarter of responses said that cyberattacks were the biggest reason for downtime, and for the second year running were also the leading cause of data loss. This year’s survey focused on themes of ransomware, cyber, backup, disaster Recovery, and business continuity. James Watts, Managing Director at Databarracks, said: “It’s no surprise that cyber is now the top cause of downtime for businesses. Organisations are struggling to keep up with a rapidly evolving threat". (CIR, 25/10/2023, 'Cyberattacks now biggest cause of downtime and data loss – report')

Ransomware attacks continue at a record-breaking pace with Q3 2023 global ransomware attack frequency up 11% over Q2 and 95% year-over-year, according to figures from cyber underwriter Corvus Insurance. In its report for the previous quarter, Corvus noted a significant resurgence in global ransomware attacks, which has continued through the third quarter. Now, with two months remaining in the year, the number of ransomware victims in 2023 has already surpassed what was observed for 2021 and 2022. Corvus says that if the trajectory continues, 2023 will be the first year with more than 4,000 ransomware victims posted on leak sites (2,670 in 2022). (CIR, 25/10/2023, 'Ransomware attacks rise by more than 95% – report')

Global insured losses from natural disaster events reached US$88bn by the end of Q3 2023 – 17% higher than the 21st century annual average, driven by notable Q3 events such as US and Italian severe convective storms and the Maui wildfire, according to figures from Aon. In its Q3 global catastrophe recap, Aon revealed that tear-to-date economic losses totalled US$295bn, compared to a 21st century annual average of US$310bn. The aggregated death toll from 2023 natural catastrophe events had breached 75,000 during the same period, making 2023 the deadliest year since 2010. (CIR, 23/10/2023, 'Record US$50bn storm losses push up 2023 nat cat figures – Aon')

Zurich UK is offering commercial customers with a sub £1bn revenue free access to its newly launched Cyber Complete service. The service, which equates to over 20 hours of free consultation, has been developed and tested over the past six months in collaboration with Zurich Resilience Solutions, a specialist team developed to help customers build resilience. (CIR, 20/10/2023, 'Zurich offers over 20 hours of free cyber consultancy')

Howden has announced the creation of Howden Climate Parametrics, a global practice that brings together re/insurance, climate and data expertise to focus parametric risk transfer solutions on meeting the escalating demand for sector-wide climate de-risking capabilities. A team of 30 specialists from across Howden and the group’s underwriting business will bring together their expertise, partnerships, data, analytics and modelling resources to drive technical innovations across resilience and decarbonisation, combining the power of the reinsurance and capital markets to create parametric products that build resilience to multiple hazards. (CIR, 18/10/2023, 'Howden launches global Climate Parametrics practice')

Lloyd’s has unveiled its second systemic risk scenario, modelling the ramifications of a major cyber attack, the potential global economic losses of which, it says, could reach US$3.5trn. Produced by Lloyd’s Futureset in partnership with the Cambridge Centre for Risk Studies, the scenario is the second in a series of nine designed to help risk owners better understand their exposure to critical threats. Amongst the other scenarios modelled in the suite are geopolitical conflict, human pandemic and economic stagnation. (CIR, 18/10/2023, 'Lloyd’s tool depicts systemic risk scenario born out of major cyber attack')

Almost a third of employees have made mistakes that could impact the cyber security of their workplace, research from QBE has found. According to the survey, these ranged from falling victim to a phishing scam (5%), accidentally clicking a link that resulted in malware being added to a work device (7%), losing or having a work device stolen (6% and 7%) to sharing passwords with colleagues (13%). With the nature of cyber attacks constantly evolving, businesses should make sure they are regularly reviewing cyber plans to keep up. Phishing is one example where techniques by criminals are becoming increasingly sophisticated. Some 13% of employees surveyed said they would not feel confident in recognising a phishing scam. (CIR, 16/10/2023, 'Employees leaving businesses open to cyber attack – QBE research')

The Government of Ukraine has launched a data platform allowing insurers, investors and governments to analyse war risks in the country. Designed with support from Marsh McLennan, the data platform aggregates data from the police, military, security services, rescue services, transport services and government institutions, to deliver detailed maps of war-related incidents in Ukraine (defined as individual events relating to Russian hostilities such as missile, drone or shelling attacks) since the Russian invasion in February 2022. This includes granular insight into the frequency and type of attacks by location over time, as well as information on the types of assets targeted, and damage levels sustained. (CIR, 13/10/2023, 'Marsh supports Ukraine recovery with risk mapping tool')

Aon has digitised and automated its reinsurance claims process using the Appian platform. Aon Reinsurance Solutions’ five-year long operational transformation programme encompassed adjustments to the daily roles and responsibilities for staff worldwide, as well as the introduction of new business processes and corresponding changes to critical business applications. “We were facing a complex business problem and wanted to change our operating model by centralising more transaction processes. However, traditional development methods lacked the capacity and time required for this transformation,” said Bob Olson, Chief Information Officer, Reinsurance Solutions, Aon. “Appian not only enabled fast and efficient low-code development, but has helped us to reimagine our processes entirely through automation". (CIR, 10/10/2023, 'Aon completes digitisation of reinsurance claims process')

AXA Commercial has used an artificial intelligence tool to establish if any buildings owned or occupied by customers may be impacted by the ongoing RAAC issue in the UK. The insurer deployed AI to review more than 70,000 multi-page documents in one week – a job, it said, would otherwise have taken 12 months to complete manually. Initial checks are understood to have identified 65 potential cases. After a detailed desktop review of the reports, four were confirmed. Underwriters are now working with the impacted customers to discuss next steps. (Deborah Ritchie, 2/10/2023, CIR, 'AXA deploys AI to help accelerate RAAC response')

Movers

Brawdia is an insurance-focused building and project consultancy, they have continued their regional growth with the opening of two new UK offices. The opening of their Edinburgh office marks their first office in Scotland. Birmingham is their second new addition. Brawdia now has five locations across the UK. The office openings follow the appointment of four senior team members: Iain Pepler has joined as a Director to head up Brawdia’s new Edinburgh office. Iain is a Chartered Building Surveyor with over 20 years’ experience. Leanne Field has joined as an Associate in Brawdia’s new Birmingham office. She is a Chartered Building Surveyor with over six years’ experience. Martin McGowan has joined the Manchester office as an Associate Director. He has 13 years’ experience across a range of project and professional building surveying instructions. He is a Chartered Building Surveyor with expertise across dilapidations, project monitoring, contract administration, defect analysis and reinstatement cost assessments. Richard Busby, based in the Northeast, is a Chartered Building Engineer with a varied career comprising 10 years practical experience as a bricklayer/stonemason, and 25 years professional experience in the industry working for Cunningham Lindsey (now Sedgwick) and Balfour Beatty Management. (Emma Cockings, 27/10/2023, Claims Mag, 'Brawdia announces two new UK offices')

Marsh has announced the launch of a new Marsh Specialty global cyber practice, appointing Tom Reagan as Global Specialty Head of Cyber. Currently Cyber Practice Leader for US and Canada at Marsh Specialty, Reagan will lead the new practice, which will be set up to integrate all of the firm’s cyber global capabilities across insurance, risk intelligence, incident management, and cybersecurity. (CIR, 25/10/2023, 'Marsh names Reagan as head of new cyber practice')

DUAL Europe has confirmed its expansion with the launch of a new marine team. Based in Rotterdam, where DUAL Benelux was established in April 2023, Aram Stoop and Pim de Pooter will lead DUAL Europe’s marine hub, which will initially offer ocean and inland hull, builders risks, cargo and land equipment cover. Aram Stoop joins as Head of Marine, and has more than 20 years of experience in the insurance industry, as a Marine Surveyor and as Head of Loss Prevention Engineering. He was also a market-leading Underwriter in marine builders risks insurance for more than 10 years. Pim de Pooter, who joins as Lead Underwriter, Marine Hull, has more than 13 years of experience in the insurance industry as a Hull Underwriter across several products and was most recently a Lead Class Underwriter for a market-leading portfolio of ocean and inland hull. (CIR, 4/10/2023, 'DUAL Europe launches marine division')

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