Insurance People April 2014

insurancepeople issue 42 April 2014

e suranc n I e h “T ith zine w a g a M ality�

Person

Paul Cosh See page 4 Insurance People inside include:

Ian Clark Alan Cleary Nichola Evans Amanda Menahem Len Padilla Duncan Pritchard Michele Quaife Katie Scott

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surance “The In with ne Magazi ity” Personal

in association with

insurancepeople

leader

www.insurancepeople.uk.com

Insurers’ ‘things to do’ list – 2014

P Editor and Publisher

Consultant Editor

Andrew Newman

Brian Susman

lenty of topical Q&A in this month’s IP for insurers to consider:-

When things go right:● Should insurers shout louder when they do well? Claims outsource personnel often represent the public ‘face of insurance’, but do insurers take credit where it’s due?

– see page 4 ● Satisfactory resolution of mass flooding claims inevitably

Commercial Director

Production Director

Jeni Hall

Adrian Susman

Editorial

Andrew Newman FCII, Dip.M andrewnewman@talk21.com 01892 730539 Design & Production

Adrian Susman adrian@insurancepeople.uk.com 07981 993974 Commercial Director

Jeni Hall jeni@insurancepeople.uk.com 07969 510172

prompts a significant increase in fraud. How do we weed out the fraudsters from the genuine claimant?

– see page 4 When things go wrong:● Bringing the industry into disrepute? How to minimise the publicity damage the whole industry suffers when national press reports cite ‘small print’ exclusions. Such as groundwater claims - see page 5 ● “Theft means theft” says the judge. Time to overhaul

‘tired’ policy wordings and past ‘understandings’. Courts will now block insurer attempts to “backtrack on contractual terms in the absence of cogent, objective evidence” – see page 10 Indeed, plenty of issues for insurers to consider.

April 2014

In this issue 2

Late news

3

Market talk

8

The Cloud Will it go the same way as CRM?

10

Overhaul those old policy wordings!

12

14

15

Risk Management Andy Hawkes, Cardinus

Ones that got away Read about “a ferociously confrontational” nocturnal board meeting in 1991

Pensord Magazines & Periodicals Tram Road, Pontllanfraith, Blackwood NP12 2YA

17

insurancepeople

Also find us on:

Reg Brown’s Postcard Emporium A WW1 tank hold-up in Holborn

Printers

PO Box 537 Tonbridge Kent TN12 9WG t 01562 862990 m 07981 993974 e adrian@insurancepeople.uk.com

Alan Cleary The Name Game

16

www.insurancepeople.uk.com

Legal

Interview Amanda Menahem, Hastings Direct

12

Alan Cleary updates the name game

17

Amanda Menahem believes in growing your own talent

18

Customer service Duncan Pritchard, Commercial Express

19

Events Michele Quaife, Makerstudy

ISSN 2043-9202 Insurance People is published monthly by Buttermere Wedge Publishing Limited.

While every attempt has been made to ensure that the information contained within this publication is accurate, the publisher accepts no liability for information published in error, or for views expressed. All rights for Insurance People magazine are reserved. Reproduction in whole or in part without prior permission from the publisher is strictly prohibited.

20

News

30

On the move Who’s going where?

32

18

Duncan Pritchard has the answer when the computer says ‘No!’

19

Michele Quaife is looking forward to BIBA!

On the Road Motorway musings

APRIL 2014 insurancepeople 1

insurancepeople

Late News

in association with

1 in 4 “prepared to New MD at Auto Windscreens A commit fraud” A

quarter of insured motorists think that it is acceptable to mislead insurers to reduce their motor insurance premiums, according to a new study from LexisNexis.

The research found that 40% of UK motor insurance policyholders believe the cost of their cover is too high, and many are taking fraudulent measures to reduce the cost.

The study, which explores consumer attitudes to motor insurance in the UK, uncovers that one in four (25%) think that some omission or adjustment of information is acceptable in order to reduce premiums when applying for motor insurance.

When it comes to deciding who is named as the main driver, 29% of people admit to ‘fronting’ their policy by naming someone other than the person who will drive the car the most. Factors influencing this decision include who has the main income (25%), a better driving record (12%) or who has historically had a lower cost policy (11%).

The research reveals that just over 1 in 10 (13%) think it is acceptable to use someone else’s address when applying for motor insurance, and that 15% think it is acceptable to try to change their number of ‘no claims discount’ years to achieve a better discount.

Second PPI scandal predicted

L

enders involved in the PPI scandal should brace themselves for a further wave of compensation claims, this time from customers who were not offered financial support mechanisms when taking out their loans, says British Money founder, Simon Burgess.

Using online survey firm Usurv, 100 claims management companies were asked to identify the next financial services mis-selling scandal. 79% believe lenders’ failures to discuss or offer PPI or obtain an acceptable disclaimer could expose them to a compensation bill of around £1bn.

He concludes: “It’s interesting the FCA encourages lenders to look carefully at ‘customers’ financial situations’, but not debt prevention measures. Isn’t this part of that ‘financial situation’? And how can it be ‘a personal decision for the consumer to take advice’ if they’re not offered it in the first place? Customers don’t know what’s available. I believe the FCA is failing in its duty to protect consumers.”

2 insurancepeople APRIL 2014

uto Windscreens has announced the appointment of Chris Thornton as its managing director. He has previously held senior positions at Autoglass and Lex Autocentres, and takes over from Nigel Davies, now sales and business development director.

Chris Thornton comments, “Auto Windscreens is a company that is ‘clearly going places’ thanks to the belief of its workforce and the

Chris Thornton

exceptional proposition offered to all our business customers, predominantly in the insurance and fleet sectors.”

Besso settles with FCA

B

esso Limited has confirmed that it has reached a £315,000 settlement with the Financial Conduct Authority following the FCA’s decision to issue it with a final notice and fine having found that systems and procedures put in place to mitigate the potential bribery and corruption risks associated with Besso’s third party relationships were inadequate during the period between 14 January 2005 and 31 August 2011.

The company says, “The FCA has not said that Besso permitted any illicit payment or inducement to any such third party. Further the FCA recognised that Besso made significant efforts to improve its systems and controls framework.

“The FCA acknowledged that Besso is a medium sized broker in the wholesale insurance market whose business does not, overall, pose a high bribery and corruption risk.”

Charles Taylor service provider for new MGA

C

harles Taylor Insurance Services has been appointed by Hunter George & Partners, a new managing general agency, to support its launch and provide ongoing insurance services. Hunter George, which specialises in M&A insurance risks, was set up using Charles Taylor’s end-to-end MGA service.

Hunter George was formed in September 2013 by Ian Theato and Tim Martin.

market talk

in association with:

Andrew Newman

ICAB grab the plaudits I

t’s rather strange how some of the essential components of the “insurance promise” have never actually made it into the official policy wordings.

It’s a legacy thing, isn’t it?

Take “sympathy and understanding” for the buyer at the point of claim. And what about access? Try contacting your insurer if the crisis incident falls outside normal office hours.

That thought surfaced while I was talking with Tim Goodman, business development director at alternative accommodation solution providers Insurance Claims Accommodation Bureau (ICAB) who not only “never close” but take a firm line when it comes to customer service when taking on the outsource task on insurers’ behalf.

“Our commitment is to treat all customers with

respect and understanding, based on acting ethically, and to provide exceptional customer service,” says Tim. “We aim to turn an often traumatic claims situation into a positive service experience. And it’s round the clock. ICAB has never closed in its 15 year history!

“Alternative accommodation can be sourced whenever needed, and both policyholders or instructing principals can speak to a human being, rather than an automated service. ICAB’s out-of-hours team can access all information relating to a claim and proceed with full knowledge of the specific case.”

And while flood claims have kept ICAB very busy in recent weeks, the need for alternative accommodation is an ongoing one since claims never sleep. Short

Tim Goodman

period furniture is historically expensive to hire, and Tim tells me that ICAB seek to solve that problem for insurers with a cost effective solution, with flat-pack furniture sets ready to be delivered round the clock.

“In fact much of the service that ICAB provides to its instructing principals ensures that cost savings are at the forefront of what we do,” says Tim. “Hotels ranging from budget through to 5-star, will always be

negotiated and rentals are sourced always with market value prices in mind.

Reducing costs and life cycle of the claims whilst maintaining excellent customer service is the mantra by which ICAB lives!”

The testimonials that ICAB receive prove that being forced to leave home is consumers’ second worst insurance claim-related nightmare (the first being health-related claims, of course). And reading some of the beyond-the-call-ofduty stories of rescued Christmas’s; speedy evacuation away from rising flood water etc, it’s clear that the ICAB personnel make their mark.

One testimonial sums it up. “I hope we NEVER have to use your service again, but thank you so very much for all your help at this difficult time.”

Flood dilemma 1 – fraud

R

ecent flood incidents have sharpened the focus on yet another industry dilemma – how to fall over backwards with exemplary customer service while simultaneously ferreting out the fraudsters.

Here’s one solution that aims at allowing genuine documentation to be confirmed within a few minutes.

Fraud specialist Absolute Partnership’s commercial director Marc DonFrancesco tells me there’s been a significant increase in the volume of suspicious documents used to substantiate claims during the busy flood period, as some policyholders take advantage of stretched and helpful claims departments.

Absolute’s thirdeye document validation system detects anomalies in supporting documents, with tolerance levels set to suit each insurer user. “Typically we expect around 1 in 20 cases to be found to be defective,” says Marc. “But in Jan/Feb 2014 household rose by 18%.

Commercial property rose 28% across the board, but with the worst lines going up to 102%.

“Although we investigate a lot of organised crime, the recent flood rise has been opportunistic,” adds Marc.

Marc DonFrancesco “From what we’ve seen, insurers have worked impressively to help their customers, and pay claims quickly. However, at such times, some people don’t miss a trick to sneak through an inflated or fabricated bill, proven by a sustained spike in the ratio of property cases detected since the Christmas period, especially in fabricated or altered documentation.”

APRIL 2014 insurancepeople 3

market talk Paul Cosh as busy as ever Deloitte partner joins Arthur J. Gallagher

A hike with Paul Cosh A

visit to obtain an update with the ubiquitous Paul Cosh ‘at home’ is unlike any other.

The majority of the meeting always takes place hiking outdoors, and previous experience dictates stout boots and waterproofs. The addition of a sturdy corporate golf umbrella (A-Plan Insurance on this occasion) with a good point on the end also helps out when sloshing through the mud, and in February there was plenty of that in his part of Kent when the heavens opened.

On this recent occasion I found him as (over) active as ever, and during an invigorating four-hour hike – interspersed, I admit, with two substantial hostelry breaks for sustenance

(see below) - I was able to report on what the former Highway, Budget, Century, Keywest, etc man is doing now.

Invicta Insurance Services - where he is chairman and a major shareholder. “Invicta continues to go from strength-to-strength in the hands of Steve Gamage the MD. Boasts high service levels and achieves great renewal retention rates,” says Paul.

Soter Professional Services - where he is a shareholder and acts as a consultant. “It’s a claims management company which also has a wide range of add-on products, helping brokers provide services and value to their clients. Soter is building on a solid start with Nigel Sayer able to develop

many of his old relationships.”

Columbus Legal Paul helped the company through its FCA authorisation and remains as chairman. “A Scottish legal expenses provider working with employee groups as well as individuals.”

CLV - is the vehicle for other Cosh consultancy work including mentoring and management consultancy.

Paul Cosh

Westerham real ales. I can promise you won’t be disappointed.

Westerham Brewery Pub Co – this is where we go a bit off piste, (or rather off-the-mud during our hike. Leave all muddy boots and wet waterproofs outside in the porch!) But it does raise another essential to get the full value from any Cosh ‘athome’ visit – go by train so you can sample the

So how did it come to this? Five years ago, Cosh and four others bought their first pub – Paul is chairman and a major shareholder. The owners are now involved in three pubs. I’ve visited two so far and can (again) recommend the food and real ale – hence the recommendation to use the train.

experience in the London market specialty and reinsurance sector, as well as in UK personal and commercial lines.

And having previously provided consultancy for Arthur J. Gallagher International on a strategic review of the business and advised on subsequent acquisitions, he joins as a strategic consultant to support the UK and international operations and

the management on the setting and execution of their broking and underwriting strategy.

As Arthur J. Gallagher International CEO David Ross says, “Ian is uniquely qualified to assist us in realising our UK and international ambitions. His decades-long deep industry insight will be invaluable and a fantastic complement to our internal expertise and entrepreneurial vigour.”

Ian Clark retires I

Ian Clark 4 insurancepeople APRIL 2014

t’s not unknown for a consultant to come into a firm on a project, and (presumably) like what they see, and later join the organisation. That’s what Deloitte partner Ian Clark did when he retired in February after 24 years with Deloitte and its predecessor practices.

Ian led Deloitte’s insurance M&A and strategy practice for a decade, and gained his

in association with:

When is flood not flood?

Lastly, Paul Cosh is helping create a national cricket charity - not triggered, he says, by the recent tour to Australia. He helped found a small charity in 1985 which is still active today. With this experience and his love of cricket, Paul wanted to combine the two.

prize winners. He knows some French and English aristocrats, and a good number of peers. He dines with QCs, sculptors, sportsmen, film producers, and has spent (not done) time with murderers. But, he says he “still finds the scoundrels in the general insurance world the most fun”.

It now remains for me to clean my walking boots but before that I just need to transcribe Paul’s own version of his life:-

We know him as the creator of a number of companies in the insurance world including Century and Hero, but 3i told him in 1989 that he was "too soft". He tells me he has hardened, but still prefers fun to commercial brutality. To avoid sounding like David Brent, he aims for “enjoyment with dignity and personal development” in the workplace. This seems to have been successful and his legacy may be deeper than we know.

He’s met a Prime Minister and two Nobel

Unlike the market personalities that take their

See page 6!

So, no evidence of any slow-down, and I’m sure we can expect this selfdescribed marmite man to continue to make news for many years to come. ●

cohorts with them wherever they go, Paul seems to have members of his previous teams in high positions all over the place - InsureDirect, 2Direct, Home & Legacy, BeWiser, Right Choice, ACM/Minster Law, IGo4, Q4, and Budget.

Like others of his kind, Paul Cosh freely admits that while he is very good at starting companies, others are much better at building and running them.*

Why not stop or slow down, I asked? “I am a late starter,” says Paul.

“My career (the noun, not the verb) started properly after two events: the death of my father in 1982 and the birth of my twin girls in 1988. I don’t like gardening, I’m lousy at DIY, I’ve tried fishing without much catching, and I’m pretty poor at shooting. Work is my favourite hobby.”

* easure It’s been my pl work with a to er re during my ca is tive people in th number of crea ul, Pa e lik , m ho w of category, some d an rsonality possess the pe of admit the limits y el fre confidence to d ol sh re th m do their own bore The Editor

Flood dilemma 2 - Groundwater flooding

T

he national press attacked a minority of insurers during recent flooding for alleged small print haggling – arguing that a rising water table is not flood. (See page 29) I took the opportunity to raise this ‘when is flood not flood’ issue during recent contact with Sterling Insurance, and associate director and head of property & liability claims Garry Simmons stated the Sterling stance on groundwater damage:-

“

Our current understanding is that damage caused by rising water tables should be regarded as flood, providing this occurs from a single identifiable incident.

Household: The majority of our wordings do not contain any exclusions relating to groundwater flooding, or changes in the level of the water table. We do have an exclusion of

gradually operating causes, but would not envisage applying this unless the property was suffering long term damp before the flood incident.

Commercial: Our commercial wordings contain Garry Simmons an exclusion ‘… arising solely from a change in the water table level (i.e. the level below which the ground is saturated with water)’. We are not aware of ever having any claims on this wording, and if we did, would carefully consider before applying the rising ground water exclusion.

APRIL 2014 insurancepeople 5

market talk A helping hand for club cricket Hastings “growing their own”

Club Cricket Charity arrives I

nsurance networkers will recall the annual Club Cricket Conference lunches once held at London’s Café Royal as an ideal venue to meet and greet. That was thanks to the table support of firms in the insurance world such as Call Connection (Graeme Kalbraier), Direct Motorline (Neil Hames) and Highway

(Paul Cosh). (Paul also features this month on page 4).

Market consolidation and patrons’ career moves may have led to this event falling off the insurance calendar, but Robbie Book, chairman of The Club Cricket Charity reminds me that the annual Club Cricket Conference lunches still take place at

“

The Club Cricket Charity aims to fill an important gap. While there are various sports-based charities for the young; the disabled; the professionals; and the elite; there’s no charitable organisation which looks after the largest group of cricketers in the UK – the amateurs who play for cricket clubs.

The Charity will raise money from individuals and companies, and its funds will be used to pay grants to suitable applicants in the club cricket community. We already have the backing of the Club Cricket Conference, The Midlands Club Cricket Conference, The League Cricket Conference and the National Cricket Conference. These organisations represent some 6,000 cricket clubs over the country, and are involved in a national initiative for fixture and groundsharing bureaux, inspired by the England and Wales Cricket Board.

On average summer weekends over 80,000 men

Lord's in November and have grown to an unprecedented 600 plus attendees.

Paul Cosh still loves his cricket and has remained involved with the Club Cricket Conference. And he now becomes a trustee of The Club Cricket Charity, aiming to reinforce support for club cricket throughout the country. Paul explains:

The Club Cricket Charity

and women play cricket. These players are mostly members of clubs or teams whose financial status can only be described as precarious. On top of this are the many unknown thousands of others playing for company sides, local communities, the pub, and even their own family teams and leagues.

All these amateur clubs and groups have the problem of financial sustainability, often with little or no resource to fall back on, other than locally-based sponsorships and fund-raising.

The Club Cricket Charity will be managed as a registered charity (Registration Number 1156096) and regulated by the Charity Commission.

Paul Cosh

”

Contact: enquiries@theclubcricketcharity.org

Hastings developing ‘graduate calibre’ talent T here wasn’t room on the interview page with Amanda Menahem, HR director at Hastings Direct (see page 17), so the opportunity arises here for Amanda’s answer to my question about the recruitment of external graduates. Where do they preferably come from?

“We cast our net pretty wide, nationally,” says Amanda.

“But at the same time we have close partnerships with some of the local universities, such as the University of Sussex. Plus, we are just starting to look at universities that

6 insurancepeople APRIL 2014

specialise in certain disciplines that we think will be particularly important for us.

“But equally important is the scope we can offer students choosing not to go to university. One of our aims is to be first choice for students wanting to make a career from within our local community, where we want to raise our profile as an employer, and make those students aware they can come to us and build a career and later get onto one of our internal programmes.”

market talk

Brian Susman

in association with:

Celebs Cricket

17 Years of Cricket played “seriously for fun” Part Two Brian Susman writes:

●

Also at Trent Bridge – finding that Allianz Cornhill had drafted two ex-England cricketers, Derek Randall and Chris Broad, into their team.

Andy Parkinson (DAS) and Alistair McLaren (NFU Mutual) had the privilege of opening the bowling against Randall

●

Hitting Derek Randall for six – if you promise not to tell, I will reveal that he dismissed me next ball

L

ast month these pages conveyed the news that the Celebs cricket team has now, regretfully, pulled up stumps. But that news will not prevent members past and present enjoying themselves at a celebratory dinner held in my neck of the woods at The Mill Hotel, Alveley in Shropshire, to mark 17 years of cricket played “seriously for fun”.

Throughout those years, the team received magnificent hospitality, and many good friendships were established that have stood the test of time. It’s been a wonderful journey.

And now, with the Editor’s collusion, I am permitted to indulge in some personal highlights: ●

Leading a Celebs team out at Trent Bridge and at New Road, Worcester.

●

●

Watching Adrian Susman (Insurance People) and Jim Robinson (SSP) scoring 90 in ten overs, to win against Independent Insurance in the final over in 2000

Andy Wiseman and John Dobson in action for the Celebs against Oval Insurance at Chatsworth in 2008 ●

Inspecting the perfect wicket at the Oval before our match against Brit, in which Geoff Doyle (Sterling) scored 50 (we lost, by the way)

●

Sampling the delights of a Chatsworth House barbecue following another defeat by Oval Insurance, led by the irrepressible Phillip Hodson (we never did find a way to defeat the powerful Oval line-up)

Celebrating our one and only hat-trick – by insurance broker John Davidson, against DAS

The Celebs XI, plus umpire Graham Getgood, against Allianz Cornhill at Worcester in 2004

●

Arriving at Sir Paul Getty's private ground at Wormsley, where we took part in a charity sixa-side tournament – the immaculate outfield would have provided a perfectly acceptable playing surface anywhere else

●

Noting the post-match comment by the very

young RSA umpire after he had given rising star Mark Cliff (before his move to Ageas) out stumped first ball – “It was the correct decision, but perhaps not a wise one”.

I could go on, but must restrain myself. Celebs members, past and present, will get together at the beginning of April for the final celebratory dinner, when there will, no doubt, be a host of “Do you remember when …. ?” stories around the table.

These have been 17 years packed full of happy memories and good company. Little did I realise what I had started when I sat down at that lunch table back in 1996 with Messrs Bright and Hawkes to organise our first match.

But I wouldn't have missed it for the world.

APRIL 2014 insurancepeople 7

cloud technology

Len Padilla VP PRODUCT STRATEGY NTT EUROPE

Will the Cloud go the way of CRM?

And now we have the cloud…

Remember CRM? Customer Relationship Management? It was the buzzword back around 2005. So called CRM systems promised much, and delivered little. Not just for insurance, but across all industry-wide customer communication attempts. The double promise was to be able to hit potential buyers at the right time and with the right product – and to eliminate the wastage of futile, shotgun promotion.

The result was the complete failure to achieve this, especially the latter goal. Under 50s still received invitations for stair lifts and walk-in baths; the BBC Shop still tried to interest everyone in popular trash; and banks continued mailing promotions to sell completely unsuitable products.

And now we have the cloud… will history repeat itself?

Insurance People asked communications solutions provider NTT Europe’s Len Padilla to offer his thoughts on how the cloud and big data analysis could drive a new approach to insurance 8 insurancepeople APRIL 2014

A

s the insurance industry reaps productivity gains from the most recent wave of automation, new technologies are significantly enhancing operational efficiencies, increasing revenue opportunities and improving the customer experience.

A recent PwC report highlighted that 49% of insurers think a competitive advantage will be gleaned for those who can unlock big data, but a strategy to understand how best to adapt is required.

Understanding big data Across the ages insurers have used data in all forms to profile customers and calculate risk.

Today, insurers use analytics to build an accurate profile of their customer base and the increasing availability of customer data is driving the view that insight and personalisation is a key-driver for the industry.

To achieve a personalised approach, insurers need to take data from a wide variety of sources

and apply appropriate analytics to unlock key information. However this information is a moveable feast of timely updates, and it’s this inconsistency - along with data overload, quality, and data protection laws - that provides the real headache for those driving the insurance sector forward.

“is aInformation moveable feast! ” Throughout the wider business community, new computing models are being adopted to embrace big data infrastructure. Forward thinking insurers are slowly adopting this approach.

The cloud provides them with new platforms to manage the rapidly growing sets of data, and supports the compute power to process it all into tangible and insightful information.

Similarly cloud computing has the ability to add great value to how data is stored, with Gartner predicting a third of all content will be in the cloud in just four years.

Without access to cloud computing, detailed analysis of data would only be a dream for most organisations, as the high computing power systems are extremely costly to run. Coupled with big data, the cloud creates powerful value and insight that helps businesses innovate.

This symbiotic approach to big data and the cloud is one recipe that will ensure insurers can build momentum in their space, and stay ahead of their competitors.

The complement of old and new It’s clear from our recent research that insurers have made a shift in outlook, altered relationships with their IT providers, and are ready to make the investment in the cloud, to get ahead of their competitors.

This united approach illustrates how big data and the cloud can succeed where the customer

relationship management (CRM) systems of old failed, by eliminating previous bad service for customers, and enabling organisations to unify their applications so mistakes are not made.

For example, a customer with a quote lapse should not be targeted for new business. Instead they should be approached with their existing records intact, and provided with a quote mechanic that is relevant.

Insurers that can do this stand to benefit from greater agility – being able to launch new applications more quickly than competitors, and reap the benefits of higher productivity.

For now, the proprietary, actionable ideas and insights generated through analytics are the most valuable data of all, and the investment in understanding big data will be critical.

The next level will clearly involve insurers having the confidence to move systems into the cloud, and drive innovation and better ways of understanding their customers.

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APRIL 2014 insurancepeople 9

legal

Nichola Evans PARTNER BROWNE JACOBSON LLP

Katie Scott SOLICITOR BROWNE JACOBSON LLP

“Theft means theft” Courts will not entertain any attempt by insurers to backtrack on contractual terms in the absence of cogent, objective evidence

T

he Commercial Court and recently the Court of Appeal have reviewed the terms of a commercial combined policy, adjudicated on the construction of the policy terms, and looked at whether the insurer can displace those terms, and if so in what circumstances.

In December 2008 an employee working at one of Ted Baker’s warehouses in London, together with two accomplices, were arrested, charged and later convicted of stealing stock from the retailer’s premises between 2004 and 2008. As a result of the theft Ted Baker suffered a significant loss running into seven figures.

Ted Baker was insured by AXA along with two co-insurers, Fusion and Tokio Marine, under a commercial combined insurance policy. Ted Baker sought to bring an insurance claim under the

business interruption section of the policy. AXA declined cover arguing that the terms of its policy did not cover claims for employee theft.

Ted Baker brought proceedings in the Commercial Court against AXA and the co-insurers. Mr Justice Eder heard the case at first instance. The court focused on the section of the policy which read: “the insurance by this Section extends to cover loss... resulting from theft or any attempt thereat but the Insured shall be responsible for the first £1,000...which does not involve entry to or exit from the Premises by forcible and violent means” There was no exclusion in the policy for employee theft although AXA did point out to the court that there was a section in the policy

entitled “Theft by Employees”. Ted Baker had not taken out the Theft

by Employees cover separately.

M

r Justice Eder held that the words in the policy were clear and that “the wording should be given its plain meaning, namely that theft means theft, including theft by employees as this is not otherwise excluded”. He therefore found that on the face of the policy the claim was covered.

AXA advanced arguments at trial in relation to estoppel and requesting rectification of the policy so as to include an exclusion clause for employee theft. They suggested that the parties did not intend for there to be cover for employee theft.

Mr Justice Eder indicated that in order for these arguments to succeed AXA would have to demonstrate that both parties had

Ted Baker v. AXA An AXA spokesman told IP that the appeal was made in the light of evidence acquired after the original ruling, which the insurer felt would have changed the outcome. “Unfortunately, the court disagreed. We are very disappointed that we have not been given the opportunity of a retrial of certain liability issues.

“Documents have recently come to light which ought to have been disclosed by the claimants prior to the first hearing. In our view these supported our case that it was never intended for our policy to provide the cover in question. Had those documents been disclosed at the appropriate stage then it seems likely that the matter would not have proceeded to the first hearing. As it stands we have been refused permission to appeal and have to accept that decision.”

10 insurancepeople APRIL 2014

Policy wording under fire - Ted Baker v. AXA

a shared understanding that employee theft was to be excluded. This involved an outward expression from the parties as to what their understanding of the cover was.

Mr Justice Eder found that there was no such accord between the parties and therefore dismissed AXA’s court arguments.

AXA recently appealed to the Court of Appeal repeating their arguments in relation to estoppel following the disclosure of further broker documentation in the case.

This further documentation, it was alleged, showed the subjective views of the broker placing cover for Ted Baker.

The Court of Appeal said that in looking at the question of estoppel the court needed to look beyond the subjective belief of the

n TV eople o n e e As s urance P in Ins

broker and as to what was actually communicated between the parties.

Therefore one needs to look at “the objective impression reasonably conveyed by the words or conduct ‘crossing the line’”. The court took the view that the new documentation did not assist AXA as it did not provide any fresh evidence that there was any communication between the broker and the insurer that employee theft was not intended to be covered.

What does this mean for insurers?

In this case the court took the view that the terms and conditions set out in the policy were clear and unambiguous. Theft meant theft!

This was not regarded as a case

by the court where different people take a different view as to what was covered by the policy (see by way of contrast the decision of the Supreme Court in Rainy Sky S.A. v Kookmin Bank [2011] UKSC 50).

Insurers therefore need to keep under review the terms and conditions of their policies to ensure that they give the cover intended to be given.

Further, insurers need to be aware that the courts will not entertain any attempt to backtrack on the contractual terms in the absence of cogent, objective evidence that the parties intended to create a very different contract with evidence being required showing a communication between the parties demonstrating that they intended to create a very different document.

Carol Newman artwork

Insurance People’s in-house artist, Carol Newman, is now taking commissions for original, pencil-drawn artwork, mounted 35x45cm Simply send photo of reasonable resolution to: adrian@insurancepeople.uk.com using ‘Artwork’ as the subject for quotation without obligation APRIL 2014 insurancepeople 11

Alan Cleary

Who’s who in the Top Ten?

The Name Game I recently asked eleven well-known insurance people to send me, in absolute confidence, individual lists of people who, in their view, merited obvious inclusion in a “top ten” list for each of seven specified categories.

The people I consulted are themselves listed below, in alphabetical order. Had any of the eleven included their own name in any of the lists they submitted, I would of course have gently removed it. The categories were all related to what is imaginatively described, in some quarters, as general insurance.

Analysis of the lists produced the following outcomes (placings in a similar survey in February 2011 appear in parentheses):

The 10 most influential players in general insurance

The 10 people in general insurance perceived as being the most wealthy

1.

2= 2= 4= 4= 4= 4= 4= 4= 4= 4=

1.

2.

3= 3= 5= 5= 5= 5= 9= 9= 9= 9= 9=

Martin Wheatley (-) Peter Cullum (1) Barry Smith (2) Inga Beale (-) Amanda Blanc (9=) Stephen Catlin (-) Lord Hunt of Wirral (-) Brendan McManus (-) David Ross (-) Otto Thoresen (-) Peter Wood (-)

Amanda Blanc

In all, 47 different names were submitted

Peter Cullum (1) Neil Utley (2) Nick Cooper (-) Kevin Spencer (8=) Henry Engelhardt (-) Chris Giles (5) Keith Morris (-) Peter Wood (3=) Bob Beckett (8=) Stephen Catlin (-) Andy Homer (6=) Stuart Reid (-) Barry Smith (-)

Neil Utley

The 10 most intelligent people in general insurance In all, 50 different names were put forward but only 8 stood out: 1.

2.

3= 3=

Peter Cullum (-) Andrew Torrance (1) Francois-Xavier Boisseau (-) Sian Fisher (-)

12 insurancepeople APRIL 2014

3= 3= 3= 3=

Andy Hawkes (2=) Andy Homer (-) Keith Morris (-) Barry Smith (-)

Peter Cullum

The 10 most talented presenters, lecturers or speakers in general insurance There was a clear winner in this category but the name will remain unpublished 1= Mark Cliff (2=) 1= David Williams (-) 3= Jonathan Clark (-) 3= Andy Homer (-) 3= Gerry Loughney (-) 3= Brendan McManus (2=) 3= Lyndon Willshire (-)

Mark Cliff

Also rated highly were, in alphabetical order, Inga Beale, Amanda Blanc, Greg Gladwell, Chris Hanks

The 10 most likeable people in general insurance 1.

2= 2= 4= 4= 4= 4=

Barry Smith (1=) Chris Hanks (-) Lyndon Willshire (1=) Adrian Brown (-) Lord Hunt of Wirral (-) John O’Roarke (-) Carl Shuker (-)

Other well-known names put forward included, in Barry Smith alphabetical order, Amanda Blanc, Francois-Xavier Boisseau, Mark Cliff, Paul Cosh, Jonathan Davey, Janice Deakin, Phil Hayes, Neill Johnstone, Ian Ritchie and David Williams

The 10 most respected “elder statesmen” in general insurance 1.

2= 2= 2= 5.

6= 6= 6= 9= 9= 9= 9= 9=

Reg Brown (by a considerable margin) (1) Peter Cullum (-) Robert Hiscox (-) Terry Wellard (-) Lord Hunt of Wirral (2) Eric Galbaith (-) Andy Homer (-) Andrew Torrance (-) Chris Hanks (-) John Moore (-) Sandy Scott (-) David Slade (-) Terry Wellard Brian Susman (-)

The 10 most glamorous people in general insurance 1= 1= 3= 3= 3= 3=

Amanda Blanc (-) Mark Cliff (-) Martyn Holman (-) Martin Oliver (-) Stuart Reid (-) Barry Smith (-)

Single mentions were received by a large number of female Martyn Holman nominees but the men received substantially more. Does this tell us anything about our industry and our society?

Frankly, I wasn’t expecting the blokes to score half as well as they did.

Among the women named as glamorous were, in alhabetical order, Barbara Bradshaw, Lindsay Campbell, Jackie Chadwick, Maggie Cowing, Angela Darling, Sally Dunscombe and Candy Holland.

The contributors of the lists Ms Amanda Blanc, CEO, AXA Insurance Commercial Lines & Personal Intermediary Mr Jonathan Davey, Managing Director, Pure Broking and Keychoice, at SSP Mr Richard Hanson-James, Independent consultant Mr Andy Homer, Non-Executive Director of Towergate and OpenGI Mr Malcolm Hyde, Executive Director, The Chartered Institute of Loss Adjusters Mr Andrew Newman, Editor, Insurance People

Mr Ian Ritchie, Managing Director, RWA Group Mr David Shaw, Principal, David Shaw and Co. Mr Barry Smith, Chief Operating Officer, Ageas Group Mr Peter Staddon, Managing Director, Managing General Agents’ Association Mr Nick Starling, Independent consultant.

I am extremely grateful to these busy people for so generously giving their time to respond to my request for their opinions.

AJC APRIL 2014 insurancepeople 13

Follow that tank!

Publicity stunts by life assurance companies are not frequent, and for one to take place in wartime is very unusual. But look what happened in the winter of 1917

T

his month’s postcards from the Reg Brown collection feature an incident in World War One involving one of the newfangled “tanks”.

Not in Flanders or the Middle East, but in Holborn. To be exact, outside the Prudential Assurance building in London on 5 December 1917.

In fact several tanks commenced War Bond tours throughout Great Britain that year. The respective vehicles would visit any business address willing to invest £100,000 or more in War Bonds.

“The Start”

T

his postcard sees one of the tanks setting out on its way to Prudential Assurance in Holborn, gathering a growing band of sightseers along the way – probably the first time the public had ever seen one of these newly invented vehicles in the flesh.

The sender of this card - ‘GAC’ - has helpfully put a cross over his head to prove he was there. “You will observe that I am in the rear, behind the constable.” (Pity he is so far away). “Please inform the children that the ‘Tank’ is where we take all the money we have left, after we have bought our rations of meat,” says the enigmatic greeting.

The writing style seems very dated compared to a modern postcard message. For instance, ‘observe’ would today be ‘see’, and ‘inform’ would be replaced with ‘tell’ – “You will see…” and “Please tell the children…”. It all harks back to a more formal age.

As for taking “all the money we have left, after we have bought our rations of meat,” the only context is that meat rationing was introduced in the month following the date of the postcard, surprisingly late in the war. The aim wasn’t so much in sharing what there was to go round, but more to ensure that everyone actually got their share.

14 insurancepeople APRIL 2014

“The Arrival”

T

his card reveals that the journey to Holborn has attracted “thousands” and the images were captured by the newsreel cameras of the day to be watched in cinemas all over the country.

Another postcard exists – not at present in the Reg Brown collection - entitled “The Purchase”, and depicts the 76 year-old, top-hatted Pru chairman, Sir Thomas Dewy, at Holborn standing on top of the tank for the newsreel cameras presenting a cheque for £628,800 to a representative of the War Savings Committee .This was described as “the dividend that the Prudential directors had decided to invest in war bonds”.

risk management

Andy Hawkes CEO CARDINUS

A Broker’s Guide to risk management – Part Six Creating a Safety Culture

The fu ll down Guide can loade be charg d free of e from www. c

ardin

us.co

“Accidents cost, safety pays,” says Andy Hawkes

S

afety's economic and human virtues are unquestioned, but making safety a workplace reality is no simple task. Even companies passionate about safety struggle to bring real change to operations.

Managers develop procedures and distribute safety equipment, but preventable accidents continue to occur.

The circumstances leading to the success or failure of a safety initiative are as unique as varied companies, but there are shared dynamics across industries.

Safety: luxury or fundamental?

A common source of policy failure is the resilient employee attitude that, ‘getting the job done’ rationalises bending of safety policies. Dual mandates of safety and extreme efficiency can crosscut each other unless management works carefully with production to set goals that are achievable while maintaining a safe work environment. Employees should be shown that accidents have a dramatic impact on a company’s bottom line: accidents cost, safety pays.

Compelling, pertinent training Effective training must communicate the personal consequences of failing to uphold safety practices in a clear and compelling way. Vivid illustrations of injuries sustained when not using safety equipment, and their long-term consequences, motivate employees to use safety equipment out of real self-interest. Training that is interesting, relevant, and explanatory brings about real change in employee behaviour and attitude.

Accountability and follow through Successful human systems require persistent monitoring and clear accountability. Knowing who received training or equipment, and when, is critical information but is only the beginning of an effective monitoring programme. Employees must know that management regularly reviews their performance and consistently reports on progress. If employees sense that management is ambivalent about their performance relative to a policy, compliance will degrade over time.

m

Everyone is responsible for safety Responsibility for safe practices must be equally shared by all levels of management. Companies may have a Safety Officer, Team or other manager that is responsible for investigating accidents and distributing safety information. If other managers do not require the same level of safety compliance as the Safety Officer, other employees may see him/her as a ‘safety nark’.

This management breakdown is a deal-killer to an effective safety eco-system as it compromises the utility of the Safety Officer and weakens safe practices company-wide. Implementation plans should hold each tier of the employee hierarchy responsible for compliance and continued safe operation.

Creating a Programme that works Every employee needs to know how to work safely.

Experienced managers need to be assembled to identify the content and characteristics of an ideal training plan. Safety training has to be engaging, easy to deploy, and encourage interaction between trainer and employee.

Safety is everybody’s job One of the most valuable aspects of safety initiatives is that it truly makes safety a part of everyone’s job—not just the Safety Officer’s. Employees hear about working safely from their direct supervisors up through the field hierarchy, and have a clear responsibility for their own safety. Gone are the days where an employee can say that his supervisor, “never told me.”

Designing for success Evaluating a company’s strengths and weaknesses is essential when introducing a new programme. By identifying weaknesses in the management system, a programme can be designed to result in successful safety improvements, ideally with a management buy-in!

APRIL 2014 insurancepeople 15

“The ones that got away” This month features a merchant banker also engaged in insurance, but whose other commercial interests took him beyond London Assurance and Sun Alliance

Lord Kindersley 1929-2013

T

he 3rd Lord Kindersley was a merchant banker at Lazards, as his father and grandfather had been before him. His particular expertise was in export finance.

His main headline-grabbing exposure came in 1990 when he became chairman of the troubled Brent Walker leisure group built up by the former boxer George Walker.

With debts over £1bn pounds, the banks replaced Walker as chairman with Kindersley, who instigated Walker’s sacking as chief executive in a board meeting described as “ferociously confrontational” on the night of 29 May 1991. Walker is said to have been escorted from the building at 4 o’clock in the morning.

Kindersley called in the SFO to seek evidence for malfeasance, and Walker was later arrested on charges of theft and false accounting. He was eventually cleared.

Despite this falling out, Kindersley retained some sympathy for Walker, particularly for “a certain amount of vindictiveness” in the way the banks had pursued him.

He stepped down as Brent Walker chairman in July 1992. ●

Robert Hugh Molesworth Kindersley, known as Hugo, was born at his parents’ home in London’s Eaton Square and educated at Eton. He saw action as a lieutenant in the Scots Guards in Malaya before going to Oxford. A year at Harvard Business School followed and he then joined Lazards.

He held directorships with London Assurance, Sun Alliance, and many other commercial concerns. He served on numerous overseas trade bodies and was deputy chairman of the Export Credit Guarantee Department.

In the House of Lords he took the Conservative Whip and specialised in health matters.

16 insurancepeople APRIL 2014

The Kindersley dynasty The barony was created in 1941 for stockbroker Robert Kindersley, recruited by Lazard’s in 1905. His son, the second baron, chaired Rolls-Royce and Guardian Royal Exchange as well as Lazard Brothers.

Hugo Kindersley was a director of Lazards from 1960 to 1990 and a vice-chairman from 1980 to 1985. He succeeded as the 3rd Lord Kindersley in 1976. He took the chair of the Commonwealth Development Corporation, and visited projects around the world, sometimes accompanying the Prince of Wales, who was a CDC director.

He was also treasurer of the YMCA, prime warden of the Fishmongers’ Company, and a Deputy Lieutenant in Kent. A tennis player himself, he was a member of the management committee of the All England Club. In later life he liked to ski, and was a keen gardener and watercolour artist.

The heir to the barony is his son Rupert, born in 1955.

interview

Amanda Menahem

talent “fromGrowing within ” Developing ‘high calibre’ talent HR DIRECTOR HASTINGS DIRECT

Apart from the change of name (the one-time ‘personnel department’ is now human resources and has been for some years) the most revolutionary transformation in recruitment and career development has been the demand for multi-tasking skills. For example, the days when ‘people skills’ were considered unnecessary for experienced technicians are long gone. The Editor talks with Hastings Direct’s Amanda Menahem about career development and succession paths Ed: If the days really are over for the highly qualified technician without multi-tasking skills, what demands does that place on your recruitment process?

AM: In the example you give, we would prefer to recruit a good technician who also demonstrates people skills, or the potential to develop these. After all, aside from the customer interface, they also deal with teams of colleagues in the business and contribute to our culture.

The process begins by making sure we recruit staff who possess those people-related skills. There’s an induction programme for everyone who enters the organisation. That training provides a customer service standard and language which equips them across the business. It all links to people skills and giving great service, both to customers and internal colleagues.

Ed: So our hypothetical, skilled technician would go through that training, but what happens beyond that?

AM: This is where the line managers come in. They identify areas where help and assistance may be needed, and then bespoke specific training for each individual. That can be oneto-one with one of our in-house coaches, or the provision of some other external training course, as and when required.

Ed: Given that recruitment activity levels remain highly variable throughout the industry, having made this kind of investment, there must be a desire to ensure recruits want to stay?

AM: Absolutely. That’s one of our biggest, strategic peopleagenda items. It’s helping people to develop a career, and

providing the paths to do so, that makes it all the more likely that they stay with us.

Ed: That’s quite a contrast with those companies in the market making significant redundancy sweeps, isn’t it?

AM: Hastings is a growing company. We have high ambitions for the business and therefore we need people who will come along with us on that journey. In the Bexhill and Hastings area, it’s challenging to recruit people with the skills and capabilities we need, so therefore we are more reliant upon “growing our own”. If our people aren’t going to stay, then that would be a problem for us.

Ed: And presumably that means succession paths to allow people to see where their career might go?

AM: Exactly. Our programmes, such as the graduate scheme, address part of that by making sure we obtain quality talent in the first place. We also have development schemes for people who are already here with us in the business, so that we are continuously developing talent from within.

Ed: How do you define ‘graduate’?

AM: When I talk about our graduate schemes, it’s not just external graduates. What we really mean by that is ‘graduate calibre’ – if the intellect and ability is there, it doesn’t matter whether you have been to university or not.

Our graduate scheme currently seeks to grow leaders for the future geared to general management skills. But we will be widening that scope to fill future capability gaps, such as pricing, underwriting, and actuarial. The market is going to find those skills increasingly important, and harder to find.

Amanda Menahem Amanda started her career in retail. She began on the Harrod’s graduate management training scheme progressing to become a retail manager on the shop floor.

That’s where she developed a passion for recruitment, learning and development, and she moved on to the training and development department at Harrod’s, ending up managing their graduate training scheme.

She then joined the pharmaceutical industry as an HR manager and progressed her career in that field. She was approached by Hastings Direct for the Human Resources Director role five years ago.

APRIL 2014 insurancepeople 17

customer service

“Computer says No!”

“Computer says No!” is a theme that’s recently appeared in IP’s pages – that excruciating excuse that tells you that the “underwriter” has ducked out. But it doesn’t have to be this way, as Duncan Pritchard explains

I

t’s a good bet that any of us wanting to insure a risk slightly away from the norm has received the “Computer says No!” response at one time or another.

But such a negative response would never come from the mouth of an underwriter – a proper underwriter, I mean. It’s normally voiced by an inadequately trained call centre operator, to fob off unwanted enquiries. And why are those risks unwanted? Because the organisation concerned chooses not to employ first-contact staff with the required skills, or place them within a customer-oriented culture.

“Computer says No!” also gives consumers an inevitable bias against computerisation and IT people. But computers can’t say “No!” IT staff do not get involved with risk decision making. The IT task is to make the system as accurate and efficient as

insurancepeople

possible – and that usually includes advisory information such as declinature. What more efficient way of indicating this than a “No Quote” message?

The trouble arrived when this kind of brief advisory messaging somehow got into the script of the call centre operators. But don’t blame them. Nor the IT department.

Or, even the script writers. As is nearly always the case, the root problem lies within the overall company culture, driven of course from the top of the organisation.

Proper underwriting involves taking time over the more complex cases. The answer after this consideration may still be ‘No’ in some cases, but with thorough research and reasoning behind it.

Underwriters today have many available tools to aid them in effective underwriting, such as Google Earth,

Duncan Pritchard MANAGING DIRECTOR COMMERCIAL EXPRESS

environmental flood maps, and statistics. They are able to make an educated and informed decision, which is allowing the traditional underwriting style to return. A good underwriter encourages the broker to pick up the phone and discuss a case when required, rather than just offering the ‘click here’ approach.

But let’s not be too critical.

Making a smooth join between system efficiency and customer ‘care’ is not an easy matter. It cannot be achieved simply by waving a magic wand. It takes time – and investment.

Plus, of course, it should only be attempted where the successful combination of first-rate customer service and slick systems are an organisation’s supreme goal, without compromise.

News

Banking and insurance top for internships

B

anking and insurance companies are the most likely to offer paid internships in London, according to figures from the City of London Corporation as it calls for more sign-ups from businesses to a new round of top internships in the City and 18 insurancepeople APRIL 2014

encourages more involvement from the legal, accountancy and consultancy sectors.

The number of placements offered by the insurance sector through the City Business Traineeship scheme has increased by 1,150% in the last five years, coinciding

with a change in perception amongst young people of opportunities in the insurance industry.

Paid placements within the banking sector through the programme have increased by 74% since 2008. The two are also the most represented in

terms of the number of businesses taking part, with seven banking firms and eight insurance firms last year.

Now students from the City fringe boroughs are being called upon to apply for the next round of summer internships with the scheme – currently in its 20th year.

events

Update that little black book at BIBA!

“There’s only one thing in life worse than being talked about, and that is not being talked about!”

I

t's that time of year again when insurance companies up and down the country are in the midst of BIBA Conference & Exhibition madness, and brokers are getting ready to update that little black book of contacts.

I joined Markerstudy Group in January from the motorsport industry, and found that insurance works at a similar lightning speed, especially at Markerstudy! I’ve seen many events in my career, but am particularly looking forward to BIBA, hailed by many as the biggest and best.

Why? For one, it’s huge – around 5,300 people attended last year, including more than 3,000 brokers.

That’s a great opportunity to do business! Secondly, like most big events, BIBA offers a fantastic platform to launch products, raise profiles, share news, and that all important magic word - network.

So how do insurance companies

insurancepeople

get themselves noticed among 180 exhibitors all vying for your precious time? They demand attention and create a diversion. To stop you in your tracks they want their stand to be brave and bold. First impressions count, and a stand should say something about a business, whether that’s ‘quirky’, ‘efficient’ or ‘friendly’, so the choice of graphics, words, themes and liquid refreshments(!) are carefully considered.

If you’ve been lured to a stand, they’ll try to make you feel you want to stay. Their team is imperative here, they’re who you’ve come to see, but it will help if they’ve made their stand a welcoming base, especially if they’re lucky enough to have a queue.

Successful stands in the past have involved lookalikes, balloon artists, and even The DeLorean from Back to The Future. However, insurers need to remember money is the

EVENTS MANAGER MARKERSTUDY GROUP

object, and budgets need to be spent wisely as well as creatively.

Those players which make use of new technologies, digital marketing, and social media to keep people busy, and do something different from the norm, are often more memorable. After all, you know what they say – there’s only one thing in life worse than being talked about, and that is not being talked about!

BIBA, like all exhibitions, is a blank canvas for us to convey our messages, position staff, and promote our companies. It’s a priceless business opportunity for brokers too. See you there!

News

JLT revenues top £979m

J

Michele Quaife

ardine Lloyd Thompson Group reports that total revenue increased in 2013 by 11% to £979.2m, with organic revenue growth of 8.5%. There were “good performances” from reinsurance, Asia, Latin America and employee benefits.

Dominic Burke, chief executive, comments, “We are pleased to deliver another strong set of results, building on the progress and momentum of previous years, as we continue to execute our clearly defined strategy.

Although the external operating and competitive environment remains challenging, JLT’s distinctive culture, clear strategy and expanding platform give us real confidence in our ability to deliver year-on-year financial progress.’’

Marsh acquires Central Insurance Services

M

arsh has announced the completion of its previously agreed acquisition of Aberdeenbased Central Insurance Services. Iain Henry, formerly the managing director of Central Insurance, now becomes head of Marsh’s operations in Scotland.

The transaction,

originally announced in January, enhances Marsh’s position in Scotland’s major business sectors, including the oil and gas, financial services, construction and agriculture industries.

Central Insurance has offices in Aberdeen, Edinburgh, Glasgow, and Kendal.

APRIL 2014 insurancepeople 19

insurancepeople

News

FCA reviews sales incentives A

ll the major retail banks have either replaced or made substantial changes to financial incentive schemes, which played such a major role in the misselling scandals of recent years, the Financial Conduct Authority says. In its latest review of incentives schemes, the FCA found significant improvements at many firms of all sizes but identified a number of areas common across the industry

where further work was needed.

The review found that around one-in-ten firms with sales teams had higher-risk incentive schemes and appeared not to be managing the risk properly.

The FCA has identified a number of areas on which firms should concentrate to better manage incentive schemes, in particular: ●

checking for spikes or

●

●

●

trends in the sales patterns of individuals to identify areas of increased risk; doing more to monitor poor behaviour in faceto-face sales conversations; managing the risks in discretionary incentive schemes and balanced scorecards, including the risk that discretion could be misused; monitoring non-advised

●

●

sales to ensure staff who are incentivised to sell do not give personal recommendations; improving oversight of incentives used by appointed representatives; and recognising that remuneration that is effectively 100% variable pay based on sales, increases the risk of mis-selling and managing this risk.

ABI invests £1 1.7m in fraud enforcement

Auto Windscreens supports BRDC Rising Stars

T

A

he insurance industry is investing further in the Insurance Fraud Enforcement Department (IFED) by increasing its investment in the City of London Police unit.

The £11.7 million investment over three years, by the ABI, will fund a further expansion in the work of IFED with more detectives joining the 38-strong unit, which is dedicated to tackling insurance fraud in England and Wales.

The funding decision comes midway through IFED’s third year in operation, in which time it has investigated millions of pounds worth of insurance fraud, made 430 arrests and brought to justice 223 insurance fraudsters by securing police cautions and court convictions.

IFED has also obtained court orders to the value of £117,911 against insurance fraudsters under the Proceeds of Crime Act 2002, and also has hundreds of thousands of pounds under restraint pending the outcomes of criminal investigations.

John O’Roarke, managing director, LV= General Insurance, and chair, ABI Financial Crime Committee, says, “The increased investment from ABI members in the IFED reinforces the industry’s zero tolerance approach to insurance fraud, and recognition of the key role IFED has to play in tackling this problem.

“The insurance industry remains fully committed to working collaboratively to combat insurance fraud and protecting its honest customers. Anyone tempted to commit insurance fraud should be left in no doubt that they will be caught and face a very real possibility of serving a custodial sentence.”

20 insurancepeople APRIL 2014

uto Windscreens has become a patron of the British Racing Drivers' Club Rising Star scheme, supporting talented young drivers.

Accompanying this is a new Auto Windscreens Motorsport website, celebrating the company’s 40-year affiliation with racing, promoting the current Rising Stars and giving visitors the chance to win race tickets and prizes through a motorsport fantasy challenge.

Nigel Davies, Auto Windscreens’ managing director, says of the BRDC partnership:

“British motorsport is part of Auto Windscreens’ heritage and it seems fitting that we are now supporting its future through our involvement in the BRDC Rising Star programme.”

He adds, “We have long toyed with the idea of developing an Auto Windscreens Motorsport website but now is an ideal time to help raise awareness of tomorrow’s racing drivers. No doubt the motorsport fantasy challenge will also encourage some friendly online competition among racing fans.”

Profit growth at Kerry London

2

013 results for Kerry London Group show an increase of 25% in their EBITDA from £1.8m in 2012 to over £2.3m in 2013. Turnover grew by over 5% on a group basis with Kerry London Limited seeing 6% growth and Trade Direct Insurance Limited growing by 4%.

Group COO, Imogen Coggan, says, “We are delighted with these results which put us in an even stronger position for the coming year. We have ambitious plans to

extend our commercial specialisms and to build on our continued success in the construction sector.

Our Lloyd’s broker status, awarded late last summer, is opening new doors for us and we have made a promising start with the new markets and products available to us.

Reflecting our success in 2013 and our growth plans for the next 12 months, we are looking to increase our team by 10%, including some high profile hires.”

Gallagher sponsors rugby

A

rthur J. Gallagher has announced a two-year partnership with Richmond rugby club, beginning in July. The company will be the club’s over-arching sponsor, supporting every level of rugby from the 600 Youth and Minis that play each Sunday, right through to the Men’s and Women’s First XV. The deal is expected to bring significant brand awareness, hospitality and business development opportunities.

David Ross, Arthur J. Gallagher International chief executive officer, says, “Richmond encapsulates what community rugby and Arthur J. Gallagher are all about investing in talent across the piece to ensure long-term success for all. Both of us believe in creating inspiring environments where a culture of ambition can flourish and we can’t wait to get started on our partnership.

“Three years ago, Arthur J. Gallagher had a primarily London presence but our strategic acquisitions have radically changed that; 2014 is all about building the brand across the UK and having our logo and name emblazoned on the shirts of Richmond FC will ensure we are soon recognised from one end of the country to the other.”

L t Let

CX Let...

C better!

Itt just keepss getting be etter!

Ho Hot ot on the heels of introduci introducing ing a new panel of branded d insurers, Co ommercial Express now inc cludes £5,000 complimenta ary landlords’ Commercial includes complimentary co ontents cover as standard on o our Residential Landlord ds’ scheme. contents Landlords’

Fo For or more information call 0845 0 094 2077 orr visit www.ceqonline.c www.ceqonline.co.uk o.uk

Coverr in an Instant APRIL 2014 insurancepeople 21

insurancepeople

News

Brokers, insurers, trade bodies in apprenticeships plan

A

on has joined forces with the CII, ABI, BIBA and others from the insurance and risk management industry to set up the first sector-wide apprenticeships programme, in response to the government's Insurance Growth Action Plan and its ambition to double the number of apprenticeships in the sector.

Dominic Christian, CEO of Aon UK, comments, "This programme is the first of its kind for the risk

management and insurance industry in the UK so we're pleased to have played such a key part in it. The UK is the heart of the global insurance industry and at Aon we're committed to empowering young people from all backgrounds with the training needed to ensure this important industry continues to play a pivotal role in the UK economy. We must ensure the sector has the skills and talent to respond positively to the challenges of the future."

Bluefin increases profit 63% in three years

B

luefin reports that in 2013 its EBITDA increased by 10% to £25.0m, while operating profits rose to record a 63% increase over the three years since 2010.

Full-year revenue was in line with the previous year at £100m. The company says that commercial lines, which represents about 90% of its income, has returned to growth, with operating profitgs growing about 15% during 2013. It adds that personal lines broking remains “ … challenging in an extremely com petitive market”.

22 insurancepeople APRIL 2014

Mike Bruce, CEO of Bluefin says, “A number of important developments took place in 2013 which contributed to our solid performance including: key strategic appointments, effective cost management controls and key support functions centralised, marking the completion of our integration.

“With our strong, debtfree financial position and high calibre team, Bluefin is well placed to leverage its strong position further in 2014 through organic growth, further acquisitions and the development of our underwriting capabilities.”

Perkins Slade hold mock liability trial P

erkins Slade held its mock liability trial, in conjunction with Berryman Lace Mawer LLP and No 5 Chambers, at Edgbaston Stadium recently.

The Kettle Dale trial saw a fictitious claimant pursue the defendant for damages due to an injury he sustained whilst helping out at his local cricket club.

The event attracted over 90 delegates including; heads of sports national governing bodies, coaches, instructors and volunteers, covering a range of sports from golf, rambling and swimming to dance, tennis and canoeing.

A judge and barristers from No.5 Chambers ran the trial and made it as realistic as possible, with a touch of humour to keep delegates engaged.

At the end of the trial the judge ruled that Kettle Dale Cricket Club were ‘not liable’ as they had suitable procedures in place and the claimant wasn’t an employee of the club.

James Harvey, partner at Berrymans Lace Mawer, said, “Mock trials are always incredibly successful events, enabling us to highlight important issues in an interactive and compelling way. Our joint trial with Perkins Slade and No. 5 Chambers gave us the perfect opportunity to demonstrate the uncertainties of the litigation process and the detail that is required to defend a case.”

Pictured left to right: Richard Doubleday, Managing director, Sport & Recreation at Perkins Slade, James Harvey, partner at Berrymans Lace Mawer (BLM), Brett Watson, executive director, Tennis Industry Association, Chris Wiggin, partner at BLM.

Aviva publishes customer claims reviews

Carole Nash “biker-friendly” home insurance

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viva says that it is the first insurer to publish car and home claims service reviews from customers on its website, allowing people to see exactly how others rate the insurer on their claims handling before making the decision to insure with them.

The company adds, “Reading customer reviews before making a purchase has become commonplace for everything from TVs to toasters. However, for the insurance industry, customer reviews of insurance products are still in the early stages. Until now, people have been buying insurance without knowing what to expect during the claims process, which is when the policy matters most.

“Researching the most suitable insurance cover and making sure the product is fit for purpose is often a step overlooked by consumers. According to research among 1,000 home and car insurance claimants*, consumers are twice as likely to read customer reviews before buying a car than when purchasing car insurance (73% vs. 37%).”

Heather Smith, marketing director – direct insurance at Aviva, says, “Uniquely, insurance is a product most people buy in the hope of never having to use it but, if they do need to make a claim, a smooth and easy process is important at what is often a stressful time.

“We understand that the claims process is an important part of many customers’ experience with us and that’s why we publish reviews, both good and bad on our website, so that people can make informed decisions.

“The feedback we get from customers helps us to learn and continuously improve our service. Providing customers with a dedicated personal claim manager, for example, so they are kept fully informed throughout the claim is one of those changes.”

Cooper Gay re-brands in Asia

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ooper Gay Swett & Crawford has announced a repositioning and a re-branding of its marine insurance business in Asia.

Effective from 3rd March, Latitude Brokers has launched in Hong Kong as the marine division of Cooper Gay in Asia. The current marine team under the leadership of Tom Fulford-Smith will be strengthened with the recruitment of three senior brokers.

Andrew Brooker and Vanessa Toucas will be joining from FP Marine Risks and Charles D’Alton will be joining from Charles Taylor (Singapore) where he was underwriter for The Standard Club Asia Ltd. Along with Tom FulfordSmith, all three will become directors of Latitude.

In due course, Latitude will become incorporated as a separate entity in its own right and, subject to regulatory approval, will trade as Latitude Brokers Ltd.

arole Nash has launched a new “biker-friendly” home insurance, underwriten by Aviva. It includes specific protection for motorcycles with provision of secure storage for bikes if a policyholder’s home is rendered uninhabitable through a claim.

It has been designed for cross-marketing to Carole Nash’s core motorcycle policyholder base. The broker currently provides insurance for some 300,000 motorcycles equivalent to around 25% of all UK road licensed machines – and has previously used crossmarketing successfully to promote other noncore lines, including private motor, van and travel schemes.

“Home is a natural extension to our portfolio and one which we’ve been able to introduce

with a strong proposition,” comments Carole Nash’s products and marketing director, Nick Baker. “The inclusion of motorcycle storage cover supports our wider brand message and specialist positioning. It will be this, combined with our strength of customer service, which will aid conversion. We’ve worked closely with Aviva to ensure that we not only have a policy which underpins ‘The Care It Deserves’, our core brand value message, but that we hit the ground running in terms of competitiveness.”

Nick Baker

Jelf acquires Riverside Insurance

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elf has announced the acquisition of Riverside Insurance Brokers, which will move from its Tonbridge office to Jelf's premises in Gillingham.

Riverside directors, Richard Lloyd and Daniel Vincent, will remain with the company.

Richard Lloyd

comments, "We see Jelf as offering the best long term home for our clients. We share the same commitment to offering clients the very best service and the extended range of products and services available through Jelf means that we can offer our clients even more."

APRIL 2014 insurancepeople 23

insurancepeople

News

FCA proposes “add-on” shake-up T

he Financial Conduct Authority is proposing a shake-up of the general insurance add-on markets, including banning pre-ticked boxes, forcing firms to publish claims ratios and breaking the point of sale advantage for guaranteed asset protection (GAP) insurance.

Christopher Woolard, director of policy, risk and research at the FCA, said: “There’s a clear case for us to intervene. Competition in this market is not working well and many consumers are simply not getting value for money. Firms must start putting consumers first and stop seeing them as pound signs.

“We believe our proposals will address these issues and prevent consumers paying for poor-value insurance products that they may not need or use.”

The FCA is proposing a number of remedies to address issues in the market, including: ●

imposing a requirement that asks customers who purchase GAP insurance as an add-on to confirm that they want the product in the days following the sale of the primary product

●

banning pre-ticked boxes to ensure consumers actively choose to buy an add-on and are clear when and how they are purchasing a product

●

requiring firms to publish claims ratios to highlight lowvalue products, pressuring providers to deliver better value to their customers

●

improving the way that add-ons are offered through price comparison websites, including how and when they are introduced.

The FCA is asking for comments on its report and proposals by 8 April 2014. * * * * Branko Bjelobaba, managing director of FCA compliance consultancy Branko Ltd, comments: "Customers are being Branko Bjelobaba ripped off, day in, day out by unscrupulous sellers who are simply thinking of immoral profits rather than doing what's good for the customer".

"The FCA are to be applauded and must pursue the big boys first and demand retrospective action where add-ons have been mis-sold or bundled with the main product just for profit. For customers to not even know that they have the add-on is simply scandalous and when it comes to GAP insurance that is simply PPI mark two from a sector that has sold insurance badly since insurance became a profit centre for the motor trade.

“The FCA must punish those that lack integrity and rip clients off and the fines/compensation must be significant enough to deter and compensate and those individuals implicated should be banned for life."

He adds, "It is galling to see that the FSA did very little in this area and allowed such a rip off to be perpetrated but it is good that the FCA have now done this work. Customers must be protected from dodgy and unprofessional sellers, and don't forget insurers too - they profit from underwriting policies that are never claimed on and sometimes people forget that!"

CII gets behind apprenticeships scheme

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he CII is urging employers to help shape and influence the future of apprenticeships and engage with the government’s new employer-led apprenticeship model. This call follows the Prime Minister’s announcement of insurance as one of twelve employer phase two ‘Apprenticeship Trailblazers’.

The Institute is

24 insurancepeople APRIL 2014

encouraging employers to use apprenticeships as a source of future talent and has published a ‘Trailblazers’ guide for employers. The guide provides information on how apprenticeships are evolving, what a Trailblazer is and how to get involved.

Daniel Pedley, public affairs manager, at the CII, says, “The government is

reforming the apprenticeships system in England and this is a unique opportunity for employers to influence the content of future apprenticeships and shape the future talent of the industry. The new standards will be shorter, designed by employers and supported by professional bodies like the CII.

“Trailblazers give employers the opportunity to take on future apprentices whose programme they’ve had a hand in designing. The CII has launched this guide to help employers understand the Trailblazer programme and to help them get involved in developing the new apprenticeship standards”.

Auto Windscreens wants more female technicians

A

uto Windscreens has said it wants to see more female technicians joining the UK vehicle glass repair industry.

Automotive glazing training body, GQA, estimates only a handful of female technicians across the UK. Auto Windscreens is proud to employ two fullytrained women in such roles, but its managing director, Nigel Davies, says he’s keen to see more among the company’s growing workforce.

“Windscreen repairers

have traditionally been men but we want to see more females join the industry and our team,” he says.

“We have mobile repair technician roles available, yet we rarely receive any applications from women; something we are keen to change. We know women can provide the same excellent quality service to our customers as our male employees and we are keen to promote this as a career route which they may not have previously considered.”

Michelle Brown, Auto Windscreens repair technician

BIBA seeks contract law clarification

Ageas renews BIBA conference sponsorship

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IBA has welcomed the Law Commission's latest joint consultation on business insurance contract law and says it will work with them to reduce any potential negative impact on insurance brokers.

In its response to the consultation on the draft clauses of the Insurance Contract Law Bill, BIBA has sought clarification around the broker's role in the duty of fair presentation of the risk.

BIBA is seeking to ensure that no additional responsibilities fall upon the broker in regard to commercial customers’ disclosure requirements that could result in professional indemnity issues. The consultation and BIBA’s response specifically looks at

disclosure and representations, insurers' remedies for fraudulent claims, damages for late payments and good faith.

Steve Foulsham, BIBA’s head of technical services, says, “We have been working closely with the Law Commission throughout the whole process of contract law reform and we are anxious to support the Bill to ensure that it makes its passage through the parliamentary process as quickly as possible.

“We are confident that the clarification that we have sought will be resolved positively. We now await with interest, the next stage which will involve consultation on the clauses dealing with warranties and contracting out”.

geas has announced that it will continue to be a principal sponsor of BIBA's national conference and exhibition for the next three years.

Andy Watson , CEO of Ageas, says, “We value our brokers and remain committed to them which is why we are delighted to be supporting BIBA for another three years.

Andy Watson

“The 2014 ‘Customer, Customer, Customer’themed conference comes at an important time for the industry when we are experiencing unprecedented levels of scrutiny with an emphasis firmly on the customer and what products, processes and pricing are offered to create a fair deal. As an industry we need to be sure that we are doing the right thing for the customer and this event gives us the opportunity to explore this in more detail.

“Ageas has long held a presence at the BIBA conference over the years, which has provided us with fantastic opportunities to meet face to face with brokers.”

APRIL 2014 insurancepeople 25

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Two acquisitions for Bluefin

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luefin has announced the acquisition of Staines Insurance Consultants Ltd and World Wide Sports Insurance.

World Wide Sports Insurance is a Norwich-based specialist sports and commercial insurance broker. The acquisition, which completed in January, will see the majority of the broker’s business integrated into Bluefin Sport – a specialist division of Bluefin. WWSI’s portfolio of general commercial insurance will be handled within Bluefin’s commercial division.

Staines Insurance Consultants is a Middlesex-based firm that offers a range of insurances including motor trade, maritime and commercial property. The acquisition was completed in February and the business will move into Bluefin’s Ashford office, to become part of its commercial division.

Mike Bruce, chief executive officer of Bluefin, says, “Throughout 2014 we will be increasing our acquisition activity and intend to capitalise on the growing momentum by continuing to consider well run, small to medium-sized businesses.”

Left to right: John Ingham, Staines Insurance; Huseini Jaffer, Staines Insurance; Tim Philip, Bluefin; and Dorris Jaffer, Staines Insurance..

Amlin reports profits up 23%

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mlin has reported a pre-tax profit for 2013 of £325.7m, an increase of 23.3% on the previous year's £264.2m.

GWP was £2,467.4m (£2,405.6m), and the combined ratio improved from 89% to 86%.

Charles Philipps, chief executive, comments, “Our 2013 result is a testament to the strength of our talent and reinforces our capability and potential. With a number of businesses improving their performance, and our actions to drive profitability forward, we are well placed to continue to deliver good returns for shareholders.”

26 insurancepeople APRIL 2014

“Embrace digital age”, says Sterling

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t the Sterling Insurance partnership conference, attended by its 65 key partner brokers, the need was emphasised for insurers and brokers to embrace the digital age.

Sterling invited directors, partners and senior managers of its key partner brokers to discuss areas that are of most interest and concern about the insurance industry. The company's claims, commercial and household management team presented discussions structured around the insurance landscape, Sterling’s planned electronic trading platform and future plans for 2014 and beyond.

The conference also included an interactive session to obtain broker feedback on what their specific needs are for the future.

David Sweeney, director of commercial and personal lines, says, “Much of what

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arole Nash has extended its Cherished Cars portfolio with the launch of a multi-car classic policy, responding, says the company, to customer demand., with cover for from two to seven vehicles.

David Sweeney

we do at Sterling is built around communication.

Events like this are crucial, not only to say thank you to our key partner brokers, but also communicate with them and find out where we can do more.

“The full attendance of this event is testament to the value that partner brokers place in the products, service and professionalism delivered by Sterling staff in all business areas. It affords Sterling a fantastic opportunity to enter into dialogue with brokers to maintain development and growth in 2014.”

Reinsurance in “state of flux”

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raditional reinsurers must remain relevant in order to survive challenging market dynamics, but stay mindful about which areas they diversify into, according to Paddy Jago, president of Willis Re. He says that the reinsurance market is in the greatest state of flux that he has ever seen over his 35 year career in reinsurance.

“To be relevant, your number one priority is to have a high degree of expertise. That matters above all else.

Secondly, I think you have to be of a certain size. Lastly, you need to have relationships in place in the reinsurance market. These three things will dictate whether you remain meaningful in the reinsurance business in the future.”

insurancepeople

News

New rules on “crowdfunding” P

eople looking to lend money or invest through crowdfunding will be better protected under new rules confirmed by the Financial Conduct Authority.

By boosting consumer protection, the rules aim to

help ensure that consumers have access to fair, clear information that is not misleading, when using loan-based, or securitiesbased crowdfunding platforms.

Christopher Woolard,

Markel online collectors policy M arkel UK has launched a new art and collectables product to provide a broad range of cover for private individuals, companies and commercial, municipal and not-forprofit organisations with collections and investments in art and artefacts.

The collectors policy is available through Markel UK’s online broker trading platform.

It provides protection against accidental damage, theft, damage in storage or transit and exhibition cover. Markel comments that these types of specialist protection are not typically available under household or workplace general contents policies, which also typically require evidence of forcible entry for a claim to be met, will not cover pilferage and will not provide cover for single, high value assets

which collections may include.

The policy can cover collections with values of up to £10 million and provide quotations for collections with a total value of up to £150,000 without referral to underwriters.

Richard Norman, technical line manager for Markel’s art and collectables business, says, “As interest rates continue to offer negligible returns and equities remain volatile, there has been a developing interest in art and collectables from private collectors as well as corporate collectors and investors “Brokers need to be able to offer their corporate and private clients cost effective cover for their collections and our online broker product gives them the ability to do that without having to become art experts.”

director of policy, risk and research at the FCA, says, “We want to ensure that consumers are appropriately protected – but not prevented from investing.

“We have been careful

to listen to feedback from the market and the rules provide consumer protection, whilst allowing businesses to continue to have access to this innovative method of funding.”

Smartphone app from Drivology C ar insurance provider Drivology has launched its smartphone app, based on telematics technology, which can be downloaded via the company's website, www.drivology.co.uk, App Store and Google Pay Store. It is also available from Confused.com, on an exclusive basis over the next two months.

The Drivology app offers the Autostart feature, which detects when the car is on the move and activates the app to record driver behaviour. This removes the need for policyholders to manually start the app at the outset of every journey.

Another feature of the app is the photo upload facility. Uploading images of driving licences, proof of no claims, car log books (V5), vehicles – including registration plates – and mileage readings, is aimed to help to protect honest drivers from subsidising insurance fraudsters.

Before joining Drivology, potential

policyholders can use the ‘try before you buy’ feature to determine its potential benefits.

The Drivology app was developed by Wunelli, and other partners in the project include SSP, and BDML Connect. Drivology policies are underwritten by AXA. * * * * Ross Barrington, operations director at BDML Connect, comments, “As one of the leading third party administrators in telematics, Drivology launches us into new and evolving approaches in the market. For BDML it’s a big win as it strengthens our telematics capability and will allow us to offer a better service to our existing customers, which number around 50,000, as well as prospectives. The real USP of Drivology in my opinion is how intuitive the app is it’s activated automatically once a vehicle starts a journey, removing reliance on the driver.”

APRIL 2014 insurancepeople 27

insurancepeople

News

New windstorm model from Impact Forecasting

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mpact Forecasting, the catastrophe model development business at Aon Benfield, has launched its European windstorm model, following three years of development.

The company says, “The model offers an alternative view on this peak zone peril and enables insurers to gain a better understanding of the possible losses, including the effects of storm clustering.

“Windstorm is the number one peril in Europe, causing the highest annual insured losses. The potential for windstorm footprints to extend into multiple countries can result in high aggregate losses for insurers with multicountry portfolios and shows the need to model this hazard consistently on a Europe-wide basis. For example, Xynthia, which caused EUR 1.6b in insured losses, impacted eight countries and the model suggests the potential for more extreme events many multiples larger.”

Review of pay-day lender practices

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ayday lenders and other high cost short term lenders will be the subject of an in-depth thematic review into the way they collect debts and manage borrowers in arrears and forbearance, the FCA has announced. The review will be one of the first actions the FCA takes as regulator of consumer credit, which begins on 1 April 2014.

Martin Wheatley, FCA chief executive, said: “Our new rules mean that anybody taking out a payday loan will be treated much better than before. But that’s just part of the story; one in three loans go unpaid or are repaid late so we will be looking specifically at how firms treat customers struggling with repayments.

“These are often the people that struggle to make ends meet day to day, so we would expect them to be treated with sensitivity, yet some of the practices we have seen don’t do this.

“There will be no place in an FCA-regulated consumer credit market for payday lenders that only care about making a fast buck.”

The review will look at how high-cost short lenders treat their customers when they are in difficulty. This will include how they communicate, how they propose to help people regain control of their debt, and how sympathetic they are to each borrower’s individual situation. The FCA will also take a close look at the culture of each firm to see whether the focus is truly on the customer or simply oriented towards profit.

28 insurancepeople APRIL 2014

Add-on remedies a “sensible first step”, says BIBA B

IBA says that the FCA's suggested remedies to its market investigation into add-ons are a “sensible first step”.

The association says it believes that the products within the review offer valuable cover and that the suggested remedies will go some way towards providing a more level playing field for professional insurance brokers and protecting customers.

It adds that the suggested remedy for gap cover will mostly impact secondary sellers such as motor traders who sell these products at point of sale. It will provide customers with a level of protection more akin to the protection that they get when using a broker.

However, BIBA has emphasised that the suggested remedies for price comparison websites will need to be taken forward with close consideration of the FCA’s thematic review into price comparison websites to ensure a consistent approach. * * * * Commenting on the FCA findings, Alexis Roberts, partner in the

Insurance team at law firm Pinsent Masons, says: "Many observers will be relieved that this long awaited report does not herald greater change for on the add-ons market.

Divorcing sales of GAP insurance from the point of sale for the car or car finance is a key change, but there will be relief that the same approach has not been taken for other add-on products.

“There are a number of other interesting features to the report.

The proposed remedies in relation to price comparison websites suggests an on-going FCA concern around whether there is potential for consumer detriment particularly associated with that distribution channel; doubtless the FCA will develop that further when it reports on its thematic review on its separate price comparison sites.

“Also, this report demonstrates the FCA's on-going commitment to using new tools like behavioural economics as a means of analysing financial services markets, as well as wellestablished tools like claims ratios as an indicator of value to consumers."

Aqua comments on groundwater claims question

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qua has drawn attention to a Sunday Times article reporting that many household policies contain an exclusion for groundwater-related flood, which is the source of around 25% of flooding in 2014 according to recent figures from the Environment Agency.

Policies from Admiral, Esure

and Co-op were mentioned in the article.

Aqua comments, “Direct sellers and websites may highlight the low prices available, but this Sunday Times article simply highlights the benefits of seeking expert advice when buying insurance. A broker understands the risk and can recommend a suitable

coverage, and can provide advice and assistance when a claim occurs. It's a shame that it often takes a disaster to highlight the value of the right cover. As the oil fire fighter Red Adair once said, 'If you think a professional is expensive, wait 'til you try an amateur.'

The company continues, “All Aqua

policies cover damage caused by groundwater flood and we make great efforts to make fast and fair settlement of claims when they occur. In our surveys 98% of claimants who responded rated their Aqua claims experience as excellent. The other 2% rated it as good.

See also page 5.

Plum writing non-standard and MNW in Ireland

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pecialist household insurance provider Plum Underwriting has started writing non-standard and mid net worth (MNW) household in the Republic of Ireland. The expansion follows the introduction of its HomeWorks policy to brokers in the country at the end of 2013.

Irish brokers can now obtain terms for Plum’s three core home insurance products. They are Amethyst, the worldwide all risks MNW home insurance for affluent homeowners; Flex, for difficult to place or renew non-

Markerstudy raises funds on “I love claims day”

Staff from Markerstudy Group’s marketing team in Kent get in the mood for ‘I Love Claims Day’ on February 14th

standard home insurance needs; and HomeWorks, which provides integrated cover for those renovating, refurbishing or extending their high net worth homes.

Plum’s managing director, David Whitaker, says, “While the standard home insurance market in the Republic of Ireland is well catered for, brokers are struggling to place their specialist and non-standard risks.

During last year’s HomeWorks roll-out many brokers asked if we could give them access to Flex and Amethyst and we are delighted to have been able to fill this gap so quickly.”

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arkerstudy Group staff all over the country wore varying shades of scarlet, crimson and ruby for ‘I Love Claims Day’ on 14th February, when group employees raised more than £900 for Rainbow Trust Children’s Charity.

‘I Love Claims Day’ is organised by I Love Claims and aims to raise £500,000 for Rainbow Trust Children’s Charity, which provides support to families who have a child with a life threatening or terminal illness. Around 300 group staff from Markerstudy Insurance, Zenith Insurance, Auto Windscreens, TCW Group and Vision Vehicle Solutions got involved, from sites in Essex, Berkshire, Derbyshire, Kent, Milton Keynes, Surrey, Sussex and the West Midlands.

Employees dressed in red, decorated offices, baked cakes and arranged Valentine’s themed competitions and quizzes to raise money.

Lizzie Smith-Foreman, head of group marketing and communications, said: “Our offices, contact centres and fitting centres around the country were positively rosy and we’re delighted to have been involved to raise funds for such a good cause. The event created a real feel-good factor, which certainly put us all in great mood on the most romantic day of the year!”

APRIL 2014 insurancepeople 29

On the move Who’s going where?

Aon

Kelly Macha

Richard Percy

DAS DAS appoints Kelly Macha as broker account manager. She was previously DAS’ corporate account executive and an account technician in corporate sales.

Richard Percy joins as chief actuary. He was previously head of commercial & corporate partnership pricing at Lloyds Banking Group and an actuary for Lloyd’s of London.

AXA AXA Commercial Lines and Personal Intermediary appoints Ian Bromfield as Bristol branch manager.

He was most recently regional manager for the South West at RSA where he worked for 24 years.

Victoria Hallett

PowerPlace PowerPlace appoints Victoria Hallett as regional broker account manager for the North East and West. She was previously a sales and service consultant for Zurich Insurance.

Bond Dickinson Bond Dickinson appoints Paul Hughes as director of its casualty risks team. He joins from DWF where he was partner and is a member of the Forum of Insurance Lawyers’ ADR sector focus team.

LV= LV= Broker appoints Tim Rourke as head of motor pricing. With over ten years’ insurance pricing experience, he was previously head of the personal lines pricing team at Ageas.

30 insurancepeople APRIL 2014

Paul Hughes

Aon Benfield appoints Alejandro J. Galizia as chief executive officer of Aon Benfield Latin America. He joined Aon in 1996 and has worked in several roles, including CEO of Aon Re Argentina, and commercial director, and has also been reinsurance and special business manager at Sul America Group.

Mark Parker joins as head of mining and metals in the global broking centre and will continue as chief commercial officer of the property casualty and crisis management division. He has previously worked at Willis where he was CEO of global markets international and a partners council member.

Marsh Marsh appoints Lorna Manley as a development executive, based in Belfast. She joins from Aon’s political risk team.

Rob Farquharson is appointed as a development executive, based in Birmingham. He previously worked in an underwriting role at Euler Hermes.

Sarah Peppiatt

Arthur J. Gallagher Arthur J. Gallagher appoints Sarah Peppiatt as delegated authorities director. She previously held roles at Mitsui Sumitomo Insurance, Travelers Syndicate and Lloyd’s.

Dick Heath joins as managing director, Singapore. He was previously the firm’s Australia national practice leader – specialty lines and before that was New South Wales manager for AIG.

Cozen O’Connor Cozen O’Connor appoints Mark Meyer as a partner. He joins from Edwards Wildman.

Paul Dowsey is appointed as a partner. He was previously a partner at RPC.

HSB HSB Engineering Insurance appoints Jo Toolan as business development manager.

Joining from Zurich Insurance where she was SME business manager, she was previously new business manager at Towergate Risk Solutions.

Jo Toolan

In association with

VEHICLE SERVICES Collection, storage and sales

Bennetts

Jeff Weston

Bennetts appoints Jeff Weston as associate director for IT and change.

He previously worked in Junction’s IT development team and was head of development for CDS Global.

John Perrin

Paul Lewis

Howden Besso Besso Insurance Group appoints Samantha Hovey as chief financial officer. Joining from Cooper Gay & Company where she was chief financial officer and previously group financial controller, she has also held roles at HSBC Insurance Brokers and Rattner McKenzie.

BMS BMS Group appoints Eddie Gilbert as divisional director of BMS Risk Solutions. He was previously head of Aon London’s mining business, held senior broking positions at Marsh Global and worked at Sedgwick in their international property team.

Cigna

Samantha Hovey

Willis Willis appoints Andy Whitehouse as group director of marketing and communications. He joins from McKinsey & Company where he was most recently interim global communications director and deputy director of communications.

Cigna Insurance Services appoints Susan Stevenson as chief executive officer. She was previously country manager and CEO for Cigna in Hong Kong and global chief marketing officer for the health, life and accident business, and spent 18 years at American Express.

Susan Stevenson

Howden Broking Group appoints John Perrin and Paul Lewis to lead its construction division.

John Perrin was most recently partner of construction and real estate, and associate to the broking partner at JLT and has also worked at C E Heath, Gibbs Hartley Cooper, and Sedgwick Construction Services.

Paul Lewis was previously partner and head of broking, construction and real estate at JLT and has also worked at PWS International.

Allianz Allianz Global Corporate & Specialty appoints Simon Hudson as senior marine liability underwriter. With 30 years’ experience, he was previously senior marine liability underwriter at AIG, marine liability underwriter at Osprey Underwriting, Lexington Insurance and R.J. Kiln and assistant marine liability underwriter at A W Street Syndicate.

Exeter Exeter Family Friendly appoints David Brand as an independent non-executive director. Prior to his retirement in June 2012, he was most recently managing director of the UK division of Hannover Life Re and is currently an independent non-executive director of Chesnara.

Evolution Evolution Underwriting appoints Angie Mugford to lead its sales and marketing division. She was previously business development manager for Compass Broker Services and Chartis Europe, and worked in business development at Evolution Underwriting for five years.

Angie Mugford

APRIL 2014 insurancepeople 31

by Andrew Newman

in association with:

Motorway musings D

riverless cars hit the news recently. That vision of the future has been around for years, but only now has it been coupled with the word ‘telematics’.

There must be many business drivers who have wished at one time or another for a time warp to see them home after a

particularly hard day out on the road. We all love driving on business – we wouldn’t have taken the job otherwise – but there were times when the prospect of a 100 mile or more trip just to get back to your own fireside cried out for the truly ‘automatic’ car.

The vision went like this.

A short drive from your last

call to the nearest motorway; join the toll booth queue on the slip road; communicate your exit point over the intercom; and then drive onto the start grid – and leave the car to do the rest.

From that point on, there were two variations.

Daydream One was to remain in the driving seat for

the whole journey, working, snacking, reading, or simply watching the world go by.

The second option saw the front seats swivelling round for an altogether more luxurious journey, akin to a train ride, but all within your own space. You could even have a nap!

Goodbye Mumbai L

ast year RSA became (allegedly) the last of the big insurers to pull the plug on its overseas consumer-facing call centres. Why it took them so long may be something to do with all the other troubles that have been grabbing their attention of late.

These centres were yet another whirligig on the lemming-trail, where one composite office (as they used to be called) would make a move, and all the others would follow.

It’s difficult now to recall how many of these adventures there were.

Estate agencies come to mind, when practically every agency throughout the country was snapped up by the insurance industry, only to be sold back (when the fad fell out of fashion) to their 32 insurancepeople APRIL 2014

original owners who did very nicely, thank you.

The idea of an overseas service for consumers to be able to contact their insurer was welcomed at first, but that was before things started going wrong. At the time this column took to printing some of these minifarces as sent in by readers – on one occasion there were enough for a complete page-full.

That’s in the past though, but just for posterity’s sake here’s three particular favourites:Caller: Our dishwasher has flooded the kitchen!

Overseas call centre: Goodness gracious! Why did she do that?

Overseas call centre: Please tell me more about this manure in your ear Caller: No, it’s ménière’s disease I suffer from

And one more in the same vein: Overseas call centre: How long were you in hospital with this…Jiminy Cricket?

Caller: No, it was Creutzfelt-Jakob Disease The ‘dittyberth’ trap – the above gems, and others like them, have largely passed into history as far as insurance selling is concerned, although elsewhere the ‘dittyberth’ trap is still around. No matter how much you plead with the operator to speak more slowly, it seems the overseas ear simply cannot break down “date-of-birth” into individual words.

Of course, the overseas call centre operatives are only doing their job – and no doubt the majority do it very well. As do the outbound unsolicited operatives, who switch roles and become the

callers themselves.

Having established that someone has picked up the phone in the UK, they launch into their sales script with no pause in breath to allow any interjection from their victim.

And that’s when it’s the recipient of such a cold call who can become the villain. “Why are British people so rude,” was the gist of the conversation between an unsolicited caller and her colleague, overheard by an uninterested prospective buyer of a solar heating installation when she left the phone off the hook on speaker while she got on with her work. “The concept that the unsolicited call is itself the height of rudeness doesn’t occur to these callers,” declares my informant.

Understanding the things that are important to you and your customers can only be achieved by listening and getting closer to you - our brokers. This means that we can provide even more innovative and flexible insurance solutions designed to help your business grow and increase profitability.

Our executive range of high net worth and commercial products are designed to the highest standards, backed up with excellent service; as evidenced by the many industry awards we have recently won.

Our immediate access to decision makers and our ongoing commitment to exceptional customer service, competitive pricing and fast, fair claims settlement makes Sterling a company that truly makes a difference in the marketplace.

To find out more, contact: Broker Operations Manager, Mark Arends on 0845 2711445 or marends@Sterlinginsurancegroup.com

Sterling Insurance Company Limited and Sterling Life Limited are incorporated and registered in England and Wales under numbers 498605 and 911235 respectively. They are authorised and regulated by the Financial Services Authority and are covered by the Financial Services Compensation Scheme and the Financial Ombudsman Service.

Hello to more products doesn’t mean goodbye to great service.

And that’s a promise.

If we can’t keep a promise, we don’t make it. So when we say we’re delivering even more, we really mean it.

More product choice for your customers. More award-winning service. More award-winning underwriting.

You want more from your insurance provider so that’s what we’re giving you. And that’s a promise.

For information about our products please call your Ageas Account Executive or visit ageas.co.uk Alternatively, visit us at stand D20 at this year’s BIBA Conference and Exhibition, 14-15 May.

Your Partner in Insurance.