Claims News
Hometrack, a UK-based provider of property data, recently conducted an analysis that raised concerns about the potential overvaluation of properties. This overvaluation is up to £20 billion due to increased flood risk. The study utilises Hometrack’s advanced climate change insights engine to predict the impact of extreme weather conditions on property values. The analysis shows that a high risk of flooding currently exists for 400,000 properties across the UK, but these properties have not yet experienced a flood event. East Anglia emerges as the most affected region, with towns like Grimsby, Skegness, and Salford facing significant challenges. The figures indicate that, based on current flood risk, these high-risk properties could experience a value loss of 7.5%. (Emma Cockings, 22/12/2023, Claims Mag, 'Hometrack urges insurers to consider future flood risk')
In preparation for the winter sports season, Charles Taylor Assistance has implemented a specialised training programme for its staff. The programme is aimed at equipping them to handle the potential surge in winter sports insurance claims. During this annual training event, staff members engage in interactive sessions to simulate injuries, such as bandaging up and using crutches, aiming to enhance their understanding of the challenges faced by customers with winter sports-related injuries. Additionally, employees receive instruction on the intricacies of winter sports insurance coverage. This programme’s primary goal is to ensure that call handlers are well-prepared to navigate both the logistical complexities of customers’ winter sports injuries and the specific details of insurance policies when processing claims. (Emma Cockings, 27/12/2023, Claims Mag, 'Charles Taylor Assistance ready for winter challenges')
The UK’s life insurance sector is due to reduce by an estimated -8.5% in 2023. This is according to a recent analysis by Final Duties, a probate brokerage in the UK. This revelation comes after three years of expansion that saw the sector’s revenues rise in response to the global health crisis. Data scrutinised by Final Duties indicates that the sector reached its peak at £66.3 billion in 2017. This represents an increase from £54.7 billion in 2013. However, the subsequent two years witnessed a downturn. It shrunk to £20 billion in 2019, marking the lowest revenues in the past decade just before the start of the pandemic. (Emma Cockings, 18/12/2023, Claims Mag, 'UK life insurance sector faces 8.5% contraction in 2023')
A recent survey by Smart Money People reveals that 37% of UK consumers are considering switching their motor insurance provider in the next year. The primary motivator behind this trend, cited by 87% of respondents, is the desire to save money. The Association of British Insurers (ABI) reports a 29% increase in the average premium paid for private comprehensive motor insurance in Q3 of 2023. This is compared to the same period in 2022, reaching a record high of £561. This surge in premiums has led to dissatisfaction among consumers. Customer satisfaction for car insurance has dropped by 20% year-on-year, according to Smart Money People’s data. (Emma Cockings, 8/12/2023, Claims Mag, '37% of UK consumers eye motor insurance switch')
Clyde & Co share their 2024 predictions - As more injury claims fall under fixed recoverable costs rules, 2024 will see plaintiff solicitors seeking creative ways of maximising the value of claims. For insurers, one of the primary focuses of 2023 has been managing inflationary factors that have driven up claims costs. While motor claims frequency dipped during the pandemic, volumes are now rising back towards pre-pandemic levels and claims costs have increased materially. While the rate of inflation in the UK seems to have slowed or stabilised, everything is more expensive than it was two years ago – and that will not change. The costs of therapy, nursing, vehicle repairs are all up while the value of peoples’ salaries is down. (Mike Dobson, 21/12/2023, CIR, '2024 Predictions: Claims costs will continue upward trend')
The direct cost of a cyber incident increased by 11% in 2023 to an average of £1.3m, with this cost rising to an average £2.1m for organisations without cyber insurance. This is amongst the findings of research carried out by global corporate intelligence and cyber security consultancy, S-RM. S-RM’s research shows large organisations in particular should consider investing in cyber cover, with 30% of companies with a revenue between £394m and £800m experiencing a ransomware attack in 2023, compared with 40% of larger companies with a revenue between £7.9bn and £20bn. (CIR reporter, 19/12/2023, CIR, 'Uninsured firms incur 69% higher cyber incident costs')
Allianz has successfully sponsored a new cat bond that will provide the group with multi-year risk transfer capacity of E250m to protect itself against European windstorms. This is the first cat bond protecting Allianz’ own account in over a decade. Allianz entered into a three-year reinsurance agreement with Blue Sky Re DAC, a special purpose vehicle incorporated in Ireland. (CIR reporter, 19/12/2023, CIR, 'Allianz sponsors new windstorm risks cat bond')
In further news...Allianz has integrated AI technology into its claims processes in an attempt to combat fraud. The insurer has developed a machine-learning tool called Incognito, designed to identify fraudulent claims, which are then referred to a fraud expert for review and investigation. Since its development, Allianz says the claims identified have saved £1.7m to date with a further £3.4m held in claim reserves pending conclusion of the investigations. James Burge, Head of Counter-Fraud at Allianz Commercial, said: “The development of ‘Incognito’ has ensured that we enhance the market-leading service that we provide to our customers. We have been able to settle claims quicker and identify fraud at the earliest opportunity.” (CIR reporter, 11/12/2023, CIR, 'Allianz utilises AI for tool to support growing fraud claims')
Cyber risk specialist KYND and broker Consilium have announced a strategic partnership to deliver cyber risk assessments for prospective and existing clients. KYND says its offering will help Consilium’s clients to assess their organisational exposure, enabling them to promote cyber readiness, and drive sustainable revenue growth. In a partnership intended to enhance its risk management capabilities as well as convey the growing significance of cyber risk to its clients, Consilium has strengthened its proposition with START Reports, KYND’s instant and non-intrusive vulnerability assessments. As part of the agreement, the specialist broking firm will also harness KYND’s recently launched KYND SIGNALS client reports. (CIR reporter, 15/12/2023, CIR, 'Consilium and KYND announce cyber risk partnership')
The UK is at high risk of ‘catastrophic’ ransomware attacks that could cost the country billions of pounds, according to a parliamentary committee report. The warning comes from the Joint Committee on the National Security Strategy which says the country is not effectively planning to prevent a large-scale cyber attack. The report warns that outdated infrastructure and poor planning and says that swathes of UK critical national infrastructure – much of which is operated by the private sector – remain vulnerable to ransomware, particularly in sectors still relying on legacy IT systems. Senior National Crime Agency officials noted that there is a “soft underbelly” to every organisation that uses a third-party software provider. (CIR reporter, 14/12/2023, CIR, 'UK at high risk of ‘catastrophic’ ransomware attacks – report')
Despite increased investments in third-party cybersecurity risk management over the past two years, 45% of organisations experienced third party-related business interruptions, according to a new survey by Gartner. The survey was conducted in July and August 2023 among 376 senior executives involved in third-party cybersecurity risk management across organisations from different industries, geographies and sizes. Zachary Smith, Senior Principal of Research at Gartner, said: “Third-party cybersecurity risk management is often resource-intensive, overly process-oriented and has little to show for in terms of results. Cybersecurity teams struggle to build resilience against third party-related disruptions and to influence third party-related business decisions.” (CIR reporter, 13/12/2023, CIR, 'Almost half of firms faced third-party interruptions in past two years')
Marsh has collaborated with specialist insurer Beazley to offer construction contractors access to additional professional indemnity cover based on their environmental, social and governance performance. The additional capacity is available globally to clients outside of the US that complete Marsh’s ESG risk rating, subject to their score meeting a set threshold. Launched in March 2022, Marsh’s ESG risk rating is an assessment tool that measures an organisation’s ESG performance, enabling them to identify their sustainability and climate-related risks and opportunities, and gain access to additional insurance market capacity. Measured against more than 10 internationally recognised standards and frameworks, the scheme scores a client’s performance across 19 ESG themes. (CIR reporter, 12/12/2023, CIR, 'Marsh and Beazley offer extra cover for ESG-focused construction firms')
The government is underprepared for extreme weather events, such as severe floods, which have the potential to cause significant disruption, according to a new report by the National Audit Office. The independent public spending watchdog’s report – Government resilience: extreme weather– assesses four extreme weather risks: droughts, surface water flooding, storms, and high temperatures (including heatwaves), to determine how well-prepared the country is for the projected increasing frequency and intensity of such events. (CIR reporter, 7/12/2023, CIR, 'UK government underprepared for extreme weather events – NAO')
The potential insured losses resulting from US wildfires are growing even as their frequency decreases because close to 99m Americans live in the transition zone between unoccupied and developed land, according to the Insurance Information Institute (Triple-I). The zone, defined as the wildland urban interface, is where structures and human activity intermingle with wildland and vegetative fuels. More than 46m homes with an estimated cumulative value of US$1.3tr are situated within the WUI according to 2022 figures from the US Fire Administration. (CIR reporter, 11/12/2023, CIR, 'US wildfire frequency decreases but significant threat remains')
Pressures on water availability need to be carefully managed if the world wants to reach zero emissions and adapt to the impacts of extreme weather events, according to a new report by sustainability charity CDP. The data, being released during the COP28 UN climate summit, offers insight into how companies and investors are viewing the global water crisis and highlights the central role water security plays in supporting, or holding back, the transition to zero-carbon energy technologies.(CIR reporter, 8/12/2023, CIR, 'Green energy transition exposed to water supply risks – report')
Natural catastrophes will once again break several loss records in 2023 as a high number of low-to-medium-severity events will add up to insured losses of more than US$100bn in 2023, according to estimates by Swiss Re Institute, with severe thunderstorms being the main contributor. Losses from severe thunderstorms have steadily increased by 7% annually in the last 30 years. 2023 marks an increase of almost 90% compared to the previous 5-year average (US$32bn), and more than doubles the previous 10-year average of US$27bn. (CIR reporter, 8/12/2023, CIR, 'Severe thunderstorm losses hit record US$60bn in 2023')
Range Rover clients in the UK can now benefit from a new insurance solution through Land Rover Insurance. The new solution is designed for clients who may be facing challenges with increasing insurance premiums, which are affecting the industry. Land Rover Insurance will improve the buying and ownership experience for Range Rover clients. Eligible clients can now obtain a quote online and manage their monthly rolling subscription and policy cover in a flexible way, at any time. (JLR, 19/12/2023, JLR Newsroom, 'New bespoke Insurance for Range Rover clients')
Movers
Sedgwick, a leading global provider of technology-enabled risk, benefits and integrated business solutions, has bolstered its client relationship management team in the UK with the appointment of five Client Directors. Laura Adamson has been promoted to Key Account Client Director following eight years as a Client Delivery Lead. Darren Mabley-Jones brings to Sedgwick 38 years of insurance claims experience, a third of which were spent in B2B client-facing roles. Graeme Mutch has been appointed Client Director for Sedgwick’s home emergency division. He has 19 years of client-facing experience at a business specialising in security solutions for vacant and occupied sites. Angela Thomas has over 30 years of loss adjusting expertise. Her exceptional career history is steeped in liability claims experience, with her most recent insurance role as a Client and Central Services Director. Lindsey Thorpe joins Sedgwick as Corporate Client Director. Her insurance claims experience has been carved out by 19 years as a Commercial Insurance Manager. (Sedgwick, 2/11/2023, Sedgwick, 'Sedgwick expands client relationship team in the UK')
Keoghs is solidifying its presence in Scotland through two appointments in its Glasgow offices. Keoghs Scotland has chosen Laurie Traynor and Zoe Strong as its new Partners. This move takes place against the backdrop of Keoghs’ growth in the past year. Laurie Traynor, with a 22-year long career, brings experience in defending large employer and public liability and motor claims. Zoe Strong, boasts over two decades of experience in industrial disease claims across England and Scotland. Keoghs’ Scottish disease team will be led by Zoe. (Emma Cockings, 21/12/2023, Claims Mag, 'Keoghs expands presence in Scotland with key appointments')
For an informal chat on how IDEX Consulting can support your business needs and professional career goals, please contact Michelle Paish, Business Manager on 07983 055 279 or michelle.paish@idexconsulting.com
All information provided in this Market Digest has been gathered from Claims Mag and CIR.
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