insurancepeople issue 51 March 2015
Sandy Dunn See page 6 Insurance People inside include: Reg Brown
Malcolm Forbes-Wilson
David Haynes
Elizabeth Holt
Peter Rudd-Clarke
Crescens George Fiona Macrae
Georgina Squire
e suranc n I e h “T ith zine w a g a M ality� Person
surance “The In with ne Magazi ity” Personal
in association with
insurancepeople
leader
leader
www.insurancepeople.uk.com
Claims wriggling v. industry reputation? n encouraging number of insurance players are turning around consumers’ long-held perceptions about smallprint claims wriggling. But the national press has other ideas – and loves to dig out the occasional worm to keep the shock/horror theme rolling.
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Editor and Publisher
Consultant Editor
Andrew Newman
Brian Susman
One of motor claims’ ghosts of the past was stirred recently – the use of ‘undisclosed modification of vehicle’ to repudiate a claim.
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
Thanks to the Ombudsman (or curses, depending on your point of view) insurers’ last word on the extremes to which ‘woolly’ clauses can be interpreted is no longer sacrosanct. Certainly a souped-up engine, and expensive alloys alters the risk, but Go-faster stripes? ‘Kiss-me-quick’ stickers? A non factory-fitted sun roof? Tin cans attached to a “Just Married” car? The extremes become ever more ridiculous the further you go – but some motor providers have been there!
March 2015
In this issue 2
Late news
3
Market talk
6
Interview Sandy Dunn, Markerstudy
8
Peter Rudd-Clarke, RPC
9
memoir continues
Commercial Director
10
11
Printers
The new Insurance Act Georgina Squire, Roslyn King
Pensord Magazines & Periodicals Tram Road, Pontllanfraith, Blackwood NP12 2YA
12
insurancepeople
Professional qualifications Crescens George, Wiser Academy
5
David Haynes warns of paternal leave changes ahead
10
Reg Brown sorts out some Royal London items
13
Also find us on:
Consistent communications Elizabeth Holt
ISSN 2043-9202
14
News
26
On the move
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.
Reg Brown The Postcard Emporium
www.insurancepeople.uk.com
PO Box 537 Tonbridge Kent TN12 9WG t 01562 862990 m 07981 993974 e adrian@insurancepeople.uk.com
Who said insurance is boring? The late Malcolm Forbes-Wilson
A harsh repudiated claim may help the individual’s loss ratio – but at what price to industry reputation?
Jeni Hall jeni@insurancepeople.uk.com 07969 510172
Product Liability
Who’s going where?
28
11
Georgina Squire comments on the new Insurance bill
12
Crescens George asks “Where are all the qualified people?”
On the Road 150 Up!
MARCH 2015 insurancepeople 1
insurancepeople
Late News
in association with
FCA fines Aviva Investors £17.6m he FCA has fined Aviva Investors Global Services £17,607,000 for systems and controls failings that meant it “ … failed to manage conflicts of interest fairly”. The Authority adds that these weaknesses led to compensation of £132m being paid to ensure that none of the funds Aviva Investors managed was adversely impacted. Georgina Philippou, acting director of enforcement and market oversight at the FCA, says, “Ensuring that conflicts of interest are properly managed is central to the relationship of trust that must exist between asset managers and their customers. It is also a fundamental regulatory requirement. “This case serves as an important reminder to firms of
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the importance of managing conflicts of interest effectively by implementing a robust control environment with effective systems to manage the risks. Not doing so risks customers’ interests being overlooked in favour of commercial or personal interests.” Aviva Investors' actions since the report of its failings were said by FCA to be “exceptional”, thus qualifying for a substantial reduction in penalty The company agreed to settle at an early stage and therefore qualified for a 30% (Stage 1) discount under the FCA's executive settlement procedure. Were it not for this discount, the FCA would have imposed a financial penalty of £25,152,900 on Aviva Investors.
LV= brings fraudster to justice Portsmouth-based fraudster who tried to claim compensation after he received a cold call from an accident management company saying money was ‘waiting for him’, has been brought to justice by LV=. Michael Figg, a 32-yearold carpenter, was driving in Portsmouth in September 2012 when another motorist
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drove into his van. The other driver immediately admitted blame and notified her insurer, LV=, the same day. A claims handler from LV= telephoned Mr Figg to arrange for his van to be repaired and during this recorded call, he confirmed that he had not been injured in the accident. Mr Figg claims he
received a cold call from a solicitor in early 2014 asking whether he had ever been injured or involved in an accident and he said he had. He was then told that ‘there was money waiting to be awarded to him’ and so Mr Figg agreed to begin a claim for compensation in the region of £1,000. District Judge Ackroyd dismissed Mr Figg’s claim,
saying that it was only a minor collision and that he would be surprised to find any injury whatsoever. He then went on to say that Figg had clearly seen this as an opportunity to get some compensation. His claim was found to be fundamentally dishonest and he has been ordered to pay over £5,000 in legal costs to LV=.
FCA challenges “Computer says 'no'” mentality
PolicyPlan and 1 Answer Network partnership
esearch published by the FCA shows that some vulnerable consumers seeking help from financial providers are meeting a “computer says 'no'” approach, putting them at risk of further detriment. FCA chief executive, Martin Wheatley, comments,“We all know somebody in a vulnerable situation and we can expect the number of people who find themselves in those
olicyPlan and 1 Answer Network have announced a mutual collaboration allowing 1 Answer Network members to access PolicyPlan’s suite of niche insurance products, such as personal, commercial and motor trade. 1 Answer Network members will also gain access to PolicyPlan’s platform eQuinox, enabling them to quote, bind cover and issue documents. Managing director of 1 Answer Network, Norrie Erwin comments, “In a market where brokers need innovation and creativity around products and client solutions PolicyPlan is an ideal choice of business partner. I was very impressed by their ability to bespoke solutions for our growing client base combined with a real partnership approach”.
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2 insurancepeople MARCH 2015
circumstances to grow over the coming years. We all need to start thinking about what the solutions to these challenges will be. “Whether it is accessing funds or securing a repayment holiday, we will work collaboratively with firms to identify what inclusive policies could look like and how best we can create the right outcomes for those consumers. It’s a challenge for regulators and firms alike.”
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market talk
Andrew Newman
in association with:
Are we a profession or an industry? s insurance a profession or an industry? That nub has been exercised more than once before in these pages. And it arises again this month on page 12 in the article by Crescens George, director of learning & organisational development at Wiser Academy.
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Crescens believes we are an ‘industry’ as the result of the march of commoditisation, but he wants us to steer towards being a profession,
particularly within the broking fraternity. The Hampshire-based Wiser Academy opened its doors in 2012 and since then has not only trained many staff of parent company Be Wiser Insurance, but has since extended its services to over 25 brokers, coaching their staff to professional qualification with the Certificate in Insurance (Cert CII) award. I asked Crescens to explain the thinking behind
this move. “Wiser Academy was born from the ideology to lead change in helping create qualified professionals within insurance. We also understand that many brokers do not have the resources to drive an inhouse training facility and often need third party training providers.
uniquely qualified to understand the challenges facing brokers, and thus is well placed to cater for their needs. All courses have been tested in a broking environment with proven results – there’s a 96% pass rate in the flagship course (Cert CII) of which we are very proud.
“The Academy’s roots trace back to our parent company, which is predominantly an insurance broker, so it is
“This year the plan is to reach out to more brokers to help to achieve their goals of training and development.”
Success for BGL marketing graduates A
s can be seen in the accompanying photo, six marketers recently completed an 18-month marketing graduate programme at BGL at the group’s Peterborough head office and become permanent members of staff.
eCommerce executive at Beagle Street reports that the graduate scheme was, “fast paced, active, and a great platform for all of us to learn and develop. It has given us the structure to
make the most of our future careers within the group.”
Sarah Smith adds that the scheme has proved the perfect platform to kick start a career. “We have worked
across different forms of marketing disciplines, and it has given us the opportunity to develop an understanding of where we want to go with our careers.”
Katarina Djuric, Alice Duggan, Maarten Jumelet, Daniel Moore, Sarah Smith and Danielle Taylor undertook three different work placements within the BGL Group working for the comparethemarket.com, Beagle Street, hoyhoy.nl, and LesFurets.com brands, which of course included the famous/infamous (depending on your viewpoint) meerkat involvement. Graduate Daniel Moore, who is now senior
Danielle Taylor, Maarten Jumelet, Katarina Djuric, Daniel Moore, Sarah Smith and Alice Duggan MARCH 2015 insurancepeople 3
market talk Arag warn of paternity leave changes
Paternity leave changes ahead he one-time red-faced apoplexy displayed by some old-school CEOs when first confronted with the concept of paternity leave may have disappeared, but there’s still room for unease with the arrival of new legislation. Every time new rules appear, employers cannot help but wince and knuckle down to an understanding as to interpretation.
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David Haynes, head of underwriting and marketing at Arag UK believes there’s another tough year ahead for employers as this complex new legislation kicks in. “The major stumbling block is likely to be shared parental leave, and other new parenting rights which were created by the Children and Families Act 2014 and come into effect for births from 5 April 2015,” says David.
David Haynes
“The legislation will allow either parent to take responsibility for their child's care by co-ordinating up to 50 weeks' shared leavetaking between employers if necessary. Mothers must still take two weeks compulsory maternity leave after the birth and fathers are still entitled to two weeks' paternity leave. “After that, leave can be shared in single or multiple blocks, but employers will be able to refuse discontinuous
leave patterns subject to entering into a two-week discussion period. All leave must be taken during the first year of the child's life. And there will be 20 additional 'keep-in-touch' days to be shared between the parents.
“In addition, extra peace of mind can be provided without the requirement for claims to satisfy the ‘reasonable prospects of success’ test following a health check of the policyholder's employment practices and procedures.”
“Fortunately our policyholders can get advice about the new rules directly from qualified legal advisors. All Arag commercial legal protection policies include online and telephone assistance backed up by legal defence if an employment dispute arises. We know that experienced professionals sometimes wilt under the pressure of accurately interpreting new rules, but we are here to help.
Another development at Arag is the Family Prosecution Defence policy to protect individuals accused of criminal offences. David Haynes says this new policy guarantees the right and freedom to defence in court. “The cost of obtaining justice can be extremely high, even for those who are completely innocent, raising the need to re-mortgage, or sell the family car to fund a proper defence.”
For more details of this new policy see page 19
Children and Families Act 2014 (in effect from 5 April 2015) l
Shared parental leave (SPL) allows an eligible mother or primary adopter to share up to 50 weeks of leave and 37 weeks of statutory shared parental pay (SSPP) with their co-parent.
l
There are a number of eligibility tests that need to be satisfied.
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Employees can return to work during SPL for up to 20 SPLIT (Shared Parental Leave in Touch) days.
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Existing terms and conditions continue to apply save in respect of remuneration.
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Employees are entitled to return to work to the same role or a similar role, depending on the amount of leave taken.
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Employees are protected from detriment and dismissal in connection with exercising their rights to take SPL.
4 insurancepeople MARCH 2015
A travel solution for pre-existing conditions The Insurance Bill is here!
in association with:
Insurancewith (a bedside manner) overnment pressure on GPs to swamp the ‘oldie’ generation of tomorrow with preventative medicine is not without its side-effects. And that’s not just talking about the pills themselves. For instance, mass distribution of statins has its critics, but there’s another stumbling block lurking ahead for the 5060 generation when it comes to buying travel insurance. Suddenly they find they are having to tick the box – and whoosh!
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The sales scripts of many of the traditional travel cover providers are simply not designed to cope with this or other phenomenon. Take the position that insurance broker Fiona Macrae found when she was diagnosed with breast cancer in 2005 and needed to buy travel cover
for a holiday after eight cycles of successful chemotherapy. “Travel insurers simply didn’t want to know,” says Fiona. “Their premiums superseded the cost of the holiday, and frankly the industry’s ‘bedside manner’ was sadly lacking, with distressing, personal and intrusive questions presented very insensitively.” That prompted her to use her 20-years’ broking experience to do something to create access for affordable holiday insurance for preexisting medical conditions. And Insurancewith was born see www.insurancewith.com “The main aim was to create a travel insurance provider that listens and understands. And that
does mean understanding even those conditions that are rare or slightly more complex. You are not going to get volumes of people asking for quotes, so why should they pay extra just because their condition is unusual, and other providers don’t go to the bother of understanding the condition and rating it correctly? “We work with the Genetic Alliance UK, who are often contacted by parents whose child is the only person in the UK with a particular condition. By using our award-winning 121 screening we are able to rate the condition and offer cover. Such holidays are important, not just for the child with the condition, but for the other siblings in the family too.
Fiona Macrae
“Our approach helps us keep our online screening relevant, and up-to-date. By talking directly to customers we are able to amend our online screening, add extra questions so more people can be rated correctly without the need to call us, or when they do call us, we are able to quote them quickly and efficiently.” Sounds like a first-class case of ‘treating customers fairly’ to me.
Goodbye… Marine Insurance Act 1906! T he good ol’ Marine Insurance Act 1906 has served the industry well for more than a century. It greatly influenced all the non-marine classes that came later. It was used as a template for the very first motor insurance policy – the author apparently treating the vehicle as a ship roving about on land.
The venerable Act is well remembered - if not in detail, but very much in name – by all former CII students
tackling the first step towards chartered status, being ingrained in the mind as one of the ‘Elements of Insurance’ along with Rylands v. Fletcher, and Carlill v. The Carbolic Smokeball Company.
thought that a policyholder was in fact a customer? The fact that it took a century for that fact to receive legal acknowledgement is probably why the 1906 Act lasted so long.
In her article this month on page 11 Georgina Squire, partner at solicitors Rosling King recounts today’s legal climate that the new Insurance Bill seeks to address.
It’s amazing that the Act has stood the test of time… but inevitably it’s now creaking and showing its age. Naturally it was biased towards insurers – but then what would you expect in 1906? Who would have ever MARCH 2015 insurancepeople 5
In association with:
We now w pro The great majority of the luminaries in today’s insurance world will tell you tha at insurance was NEVER on their radar when seeking out that first door of opportunity towards their t subsequent insurance career path. But once on board, they not only survived the ordeal, but thrived on the adrenalin ne buzz created by the opportunities thrown at them, and the kind of people they found themselves working w with. e bliss. For better or worse. Result: A marriage for life. Wedded In association with Markerstudy Group, Insurance People presents the first in a series s of articles featuring some of the insurance people happy to have pledged their troth to this industry.
Sandy Dun nn Group Markets Development Director, M Markerstudy Group
“ There and back b again� would be a good title for the ‘Sandy Dunn n Storr yy’ with his recent rre-association with d in 1998 he co-founded BDML - the company c
AN: Sandy, let me dare to ask how you will ‘cope’ with the ‘irreverent’ ‘ style of Markerstudy in yo our new role? es, that question prresupposes SD: Ye that everybody who might might read this article would assume that I was beyond a bit of irreverence myself. But I’ve worked in the industry long enough to believe that most people understand my values, and my straightforward approach to business. But I make absolutely no apology for the fact that I’ve ‘been’ where Markerstudy is today. It’s ambitious. It wants to move ahead. It’s not bound by the long history that many of our bigger insurance groups have in the UK. And I think that’s a value - it’s not a hindrance to the business. In a nutshell - I’m as irreverent as anyone else! 6 insurancepeople MARCH 2015
AN: What are you u going to bring to the group p? SD: I think the job ttitle is quite important - Group Markets De evelopment Director. One, to work with the executive team and help advise ho ow the Group and its various markets will develop in the future. Secondly, to o do so by getting into, and understa anding the business that they have alre eady got. There are ways in n which I could in connecting the e above aims to make a bigger en nd-product than we already have. AN: What sort of changes c might happen?
SD: I think it’s fair to say the organisation may need to strengthen management, to make areas of m e not overstretched. It sure we are d some streamlining and might need e. But my role is not an restructure ntated one. It’s very much action orien a strategic rrole, advisory, and looking at markets. anisations get bigger we AN: As orga at ‘corporate treacle’ and all know tha um up the works. How will egos can gu hat? you avoid th SD: I think the lack of legacy in d systems helps a lot. The attitudes and team have the t energy and enthusiasm ortant. They could easily be That’s impo doing other things, but they feel that it’s o get the message across. important to
onounce you u... And as for egos slowing things down, the reason this doesn’t happen is because those guys are prepared to laugh at themselves. If you are not afraid to laugh at yourself it’s much easier to get the message across to other people – do your best, nobody is going to criticise you for it. Yo ou don’t want people making mistakes on a regular basis, but you’re not going g g to be criticised in Markerstudy y for innovation, ideas, or putting yourself forward. We encourage and reward individuals within the business to be super stars. We acknowledge their endeavours on a pretty regular basis. The rewards mechanism is quite important – and it’s more than just receiving a salary. AN: How did your current employment with Markerstudy come about? SD: II’ve ve enjoyed a business relationship with Kevin Spencer (Markerstudy Group CEO) for many, many years. We spoke last year when he was looking to expand the business into further retail operations, and I introduced him to a company called Supercover which Markerstudy subsequently bought in August 2014. Ke evin understood my role at Supercover, but asked me to consider extending that to work with the Markerstudy executive team to help with the next development phase. Which I was delighted to do. AN: What are your reasons behind that enthusiasm? SD: Because I respect what they have done. They’ve made a real mark on the industry. I’d say they were ‘unconventional’. They’re very contemporary, very modern in their approach, which goes against the grain compared to many of the bigger UK insurance corporations today. I’ve always adopted the philosophy that no matter how big a company
is, you’ve got to ha ave good people. Yo ou’ve got to have e a clear vision and you’ve got to comm municate that to your audience, both intternal and external. And continually re einforce that. in my short From what I have seen s dy, the Executive time at Markerstud
team has a very clear vision of where they want the business to go. It’s a co ompany of consummate communica ators – propelled by Ke evin Spen ncer who knows what is happening at every level; he likes to share his kn nowledge, and to enthuse about whatt they are doing.
AN: During yourr 43 years in insurance you’ve seen, and been through many changes, but wh hat would you pick out as the most fa ar-reaching challenge? SD: Over the la ast 10 to 15 years of my working liffe I’ve seen lots of I absolutely belie eve in a regulatory environment thatt encourages companies to comply with their t obligations to customers. I beliieve in good customer service, treating er and the service. But g them fairly in all aspects in the offe at the present tim me, business development is being shackled by business prevention proc cedures. of the regulatorr. And I’m concerned about the disp proportionate amount of money that’s be eing expended on regulation. It’s a cost that iss no longer sustainable. Take a for insstance the most highly competitive mo otor insurance and household insurrance market in the world – never mind m ers have invested huge just in Europe. In the UK insure amounts of mon and procedures ney. Brokers have done the same. Systems S have been incre usiness development. emented which actually prevent bu AN:
SD: Ye to do a good job. egulatory and compliance people seek es. The re s That‘s ey ey’re re employed to do do, and they do the t best they possibly That s what the can actually drive a wedge bettween long-developed can. But these roles r broker and their insurer etween companies, whether it be a b relationships be
The same goess for procurement. Contracts have tto be renewed on a ociated with that process. regular basis and there’s an incredible rigour asso And the credenttials of the individuals involved in those roles don’t always perience to take into account the hisstory, and the longevity possess the exp understandings built up nships. Nor do they appreciate the u of those relation over the years via v personal relationships which are of great value to both organisations and the customer. As you can see, I have some concerns about all thiis ght be leading us us. My hope is that over o and where it mig ars that will change – because it can’t the next few yea n this continue. But I am a an optimist! I wouldn’t still be in business after 43 4 years if I wasn’t!
MARCH 2015 insurancepeople 7
product liability
Peter Rudd-Clarke Senior Associate at law firm RPC
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Consumers hack into devices, and alter the software
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Is wearable technology being hacked off ? Even IP’s youngest readers can recall a time before “wearable technology” was ever heard of. The dramatic speed-up in gadget technology may have once been led entirely by the manufacturers, but now it seems consumers are no longer prepared to wait for the next phase of progress, and are hacking into today’s gadgets to adapt them to their own spec, with liability consequences for both the manufacturers and their insurers he consumer healthcare industry rides a profitable wave of demand. A technology savvy public demands ever more sophisticated products – such as the Apple Watch. But as people snap up the latest gadgets, such as home-diagnosis kits or fitness monitors as fast as they can be produced, there is a flip side.
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Manufacturers are finding it increasingly difficult to predict the uses to which their devices will be put. The ability of consumers to hack into, and alter the software embedded in devices, is a particular problem. Take continuous glucose monitors. These devices are designed to transmit a diabetic's blood sugar levels to an insulin pump. The two devices ‘talk’ to each other, allowing insulin or food intake to respond accordingly. However, some parents of diabetic children have hacked into the device's coding to pick up the data on their smart-phones. Whilst this is a benign and arguably laudable example of knowledgeable consumers changing a sophisticated device’s usage, manufacturers should note that their products may be similarly vulnerable. If the patients are not waiting, then manufacturers cannot afford to either.
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Sophisticated consumers
don’t like one-size-fits-all
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Increasingly, sophisticated consumers are not happy with 'one size fits all' offerings. If healthcare products programming is vulnerable to rewriting by users, it’s inevitable that some will manipulate them to improve their lives. Consumers might well take important decisions based on data they have collected, acting like doctors. This could become a problem as manufacturers lose control over how a medical device is used. Injuries could result. Not only may amateurs not fully appreciate the risks created by their actions, but they may also place the blame on manufacturers if something goes wrong. 8 insurancepeople MARCH 2015
Manufacturers’ and their insurers’ defence that injury was caused by unreasonable use may hold, but if such use was predictable, courts could find them negligent for not making their devices more resistant to misuse. Once a device is changed from its original specification, it falls outside the scope of its design, which may have been approved by regulators. n the short term, if a manufacturer of healthcare equipment is sued because a device malfunctions, it may be impossible to determine the cause of the injury with certainty. Was it a flaw in the device? A flaw that only existed once the equipment was hacked? Or was it some underlying user health problem that was not detected?
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In the long term, the manufacturer loses the ability to collate data, and fix flaws in the systems, and regulators are no longer able to track trends. Manufacturers in the life sciences sector may be tempted to take a stance, but if they resist the zeitgeist of increased choice, they could alienate consumers and lose business. Manufacturers could consider going to greater lengths to act on customers’ demands. Research and development departments that task employees with lurking on internet forums will note what consumers are demanding. Programming can then be rewritten and tested for its safety. Manufacturers and suppliers should provide clearly written disclaimers that make consumers aware that they will not be liable if their devices are hacked. Society as a whole generally benefits from third parties taking others' ideas and developing them, but producers need to be on their guard. When products are put to unexpected uses, the most predictable outcome is an increased risk of legal action. Consumers are enjoying the era of affordable healthcare products, but it will be the manufacturers who fail to take steps to minimise the risks that could end up hacked off, along with their insurers.
Who says insurance is boring?
Part Seven
The late Malcolm Forbes-Wilson penned his remarkable insurance biography just before he passed away after a long illness in April 2014. This month Malcolm invents credit card purchase protection n the late 1980s my employer Crawley Warren started placing on behalf of New York intermediary, Thompson & Co. They had contacts into American Express, at that time known as a hotel and travel card. Initially enquiries were for personal accident insurance, and I was not involved in placing coverage.
feeding porridge into a video recorder, over 30 identical claims were submitted during the first week!
It all changed when American Express decided to expand their card operation into the retail area to boost usage. I became aware of this, and purchase protection insurance was born.
Even since the coffee house days, Lloyd's risks have been placed in some unconventional venues. One underwriter I recall in the 1960s was infamous for writing tenement blocks in the Bronx - with disastrous results.
With 20 million card members, the product covered all items purchased against ‘All Risks’ for a period of 90 days, at no cost to the card member. It became an instant success.
The underwriter in question held court each afternoon in Shorts Wine Bar in Billiter Street with a large glass or two of vintage port – presumably to enhance his underwriting skills. Not surprisingly, it didn’t.
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In fact, when the American Express marketing department created a TV advertisement showing a toddler
Since then Visa followed suit with a similar enhancement for their cardholders, and this type of coverage has spread world-wide. l
Malcolm Forbes-Wilson was prepared to accept, and the broker used it as the quotation that was then taken round the market to seek support from other underwriters to the proposed terms. Since that time the Committee of Lloyd’s has encouraged underwriters to only accept risks in the Lloyd’s building. Malcolm Forbes-Wilson (1946-2014) written in January 2014
He would lead a contract by rating the risk and indicating the share he
To be continued Next time: Malcolm copes with the infamous 1980s Lloyd's LMX spiral scandal.
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MARCH 2015 insurancepeople 9
A spate of Royal London cards this month from the Reg Brown collection…
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o clues from the first two as to location, other than the obvious probability that these are somewhere in the London suburbs. The sartorial factor suggests circa pre-1910.
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his third card is more helpful, thanks to having actually been posted with a message. We can see that it was sent from Willesden, in north-west London on 23 December 1927, although it’s always possible that the photo was taken long before that. But the connection between the picture and the message are unknown.
r anks you fo “Mother th ld like ou w d an er [your] lett arrive t by rail to turkey sen or y da es n about Wed ristmas. before Ch Thursday H”. all, Eileen Love from
If it wasn’t for the unhelpful ‘H’ after Eileen, we could assume that the sender is a sibling of the addressee, Miss A Dowdeswell who resides at Wick Court, on the banks of the river Severn in Glos. An edifice of that name still stands, and the substantial house and outbuildings to be seen on Google suggest that this was a proper court, hall, or grange at that time. So what is a Miss A Dowdeswell doing at this address? And getting hold of a turkey for her mother at Christmas time? Can we assume that Miss A is a domestic servant at the Court? And does his lordship know that one of his turkeys is going into the pot in Willesden? It would appear that all is above board. If not, then Eileen H has certainly blown the gaff in sending such a postcard. A similar set-up appeared to be the case in an earlier item in this series from the Reg Brown collection when another card from a domestic, working in a country house near Windsor, was dropped a line from her family in London. On that occasion it was possible to discover that the house in question was later occupied by the comedian Billy Connolly in the 1980s. 10 insurancepeople MARCH 2015
Insurance Act 2015
Georgina Squire PARTNER ROSLING KING LLP
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A new, fairer system
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Dragging insurance law into the 21st Century It’s arguable that words like ‘utmost good faith’, ex gratia, and ‘my word is my bond’ have lost their shine in the recent era. Georgina Squire believes the new ‘Insurance Bill’ will radically modernise insurance law in superseding existing legislation first enacted in 1906! he insurance regime based on the Marine Insurance Act 1906 was good in its time. But it’s now outdated and lags behind the rest of the EU. After many years of lobbying, we now have the Insurance Bill, which received Royal Assent in February 2015 and is expected to come into force next year.
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Finally, the UK is coming into line with the rest of the EU in abolishing the old draconian avoidance regime in favour of a new fairer system. Buyers expect insurance policies to pay out when a claim is made. Regrettably - and more so in recent years - insurers have looked for grounds on which to walk away from a claim. Under the new law, opportunities for insurers to avoid paying claims or terminate cover - have diminished significantly. But it is a default regime where commercial insuring parties can opt out. Buyers should therefore beware the opt-out wordings, or discussions in policy negotiation meetings. Whilst there is an 18-month transition period before the new law comes into full force, some are already drafting clauses to allow the law to apply to insurance policies immediately.
Key changes include introduction of a “duty of fair presentation” of risk, in place of the existing duty to disclose all material facts. And also proportionate remedies for unintentional breach of this requirement, so that the policy may survive, with any claims settlement adjusted accordingly. This is a significant adjustment to current disclosure rules, under which insurers are entitled to avoid liability altogether in the event of failure to disclose a material fact, regardless of whether the nondisclosure was deliberate, or had any bearing on the loss claimed under the policy. Insurers will remain entitled to avoid the policy, and retain the premium in the event of intentional or reckless non-disclosure. In relation to any other type of non-disclosure, the policy may be avoided only if the relevant information would have caused the insurer to decline the risk completely, and even then the insurer does not recover the premium. If cover would have been agreed on different policy terms, the insurer will be entitled to treat the contract as if it was on such terms, and if a higher premium would have been charged, the claim amount may be reduced proportionately.
Further significant changes relate to insurance warranties. Breach of warranty by the insured will in future merely suspend - and no longer discharge - the insurer’s liability under the policy. So a subsequent claim will be valid notwithstanding a previous breach of warranty that has since been remedied by the insured. Insurers will also be prevented from relying on non-compliance with a warranty as grounds for avoiding liability for a claim for loss of an entirely different kind than that envisaged by the warranty. “Basis of contract” clauses are abolished under the Insurance Bill i.e. provisions which seek to turn all the insured’s representations in relation to the risk into warranties. The potentially draconian consequences of such clauses have been criticised, and it will not be possible to contract out of this prohibition. Overall, the Bill is a positive step in addressing some of the harsh provisions currently contained in UK insurance law which adversely affect policyholders. It is hoped it will create a more balanced approach to solving problems arising out of insurance contracts. Only time will tell as to whether this happens in practice. MARCH 2015 insurancepeople 11
professional qualifications
Crescens How many people working George “ insurance today are in DIRECTOR OF LEARNING & ORGANISATIONAL DEVELOPMENT WISER ACADEMY
professionally qualified?
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The quest to make insurance a profession Is insurance a profession or an industry? That’s a question often raised, but the fact is that, unlike ‘real’ professions more readily perceived as such by the world at large, the possession of qualifications has never been a statutory requirement for individuals in insurance. Crescens George provides some answers as to how insurance brokers in particular can address this problem t the core of the claim to be a ‘professional’ is the idea that the practitioner has the skills, knowledge, behaviour and insight to deal with complex situations in their area of expertise. It’s this aspiration that defines the scope of professional development for any practitioner.
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The need for professional development is even more critical when it comes to people working in a knowledge-based sector, such as insurance. Yet then, how many of the three hundred thousand people working in the insurance sector are professionally qualified? It’s certain the numbers are shamefully low! The retail boom experienced in the early part of this century not only took off in the high streets. It whetted the appetite of the insurance and the banking sector too. Hence the insurance industry's transition from a professional entity to a retail one! Add the emergence of computer systems to the mix, and there you have all the ingredients to develop a mind-set that expertise is something that can be created by merely following processes and steps from a manual. In the race for market share and highest GWP, I think we ignored the 12 insurancepeople MARCH 2015
social dimension of our industry i.e. the need for professional development. Customers trust professionals! They know that professionals will adhere to standards of quality and ethical behaviour, to exercise independence and discretion in addressing clients’ issues. But has this changed with customer experiences of call centre staff who are merely reading call scripts?
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Internet price comparison sites may suggest a lessened need for professionals, as their specialised information is now open to all. But if the customer still suffers the same difficulty in making decisions, if the application of the knowledge in concrete contexts is still complex and uncertain, the need for professionals will persist. To this effect we must rejuvenate our efforts in educating our people and thereby raising the credibility of our industry. The ideology to lead
change in this direction to help create qualified professionals for the industry has to be self-driven and encouraged from within. Some insurance companies have a long track record in providing this encouragement to qualify, but that’s not entirely the case for insurance brokers. Many brokers do not have the resources to drive an in-house training facility, and often look at third party training providers. They often compromise by choosing a training provider who is not from the insurance industry, and also purchase unnecessarily expensive training courses. Not only that, but insurance brokers ideally need training that is predominantly geared to their own experience and the business environment in which they operate. The ideal training method for brokers is for ‘brokers to train brokers’. Or to be more precise, to employ training expertise with courses and tuition catering for their specific needs written specifically for the broking fraternity, and that have been tested in a broking environment with proven results.
There’s more from Crescens George – see page 3
marketing
Any publicity is good publicity… isn't it?
Elizabeth Holt looks at the importance of alignment and consistency when delivering corporate communications t’s easy to believe that any publicity is good publicity. But a more measured and consistent approach is more important.
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Ease of access to more media channels not only offers more opportunities to tell the story, it also invites contact – and that’s a twoway street. While most contact is good for business, once information is in the public domain it’s open to scrutiny. And comment is often used by the press for many years. So it's important to get it right first time. Corporate communications need to be better aligned across all channels - corporate website, social media, and PR campaigns. The key here is consistency of message. Whether for in-house or external PR it's sometimes
Elizabeth Holt
Examples which create negative publicity 1. A press release about due diligence and efficiency, yet the corporate website contains outof-date content and conflicting messages 2. Management statements claiming good customer service levels while complaints record data suggests the opposite worthwhile to go back to basics to re-engage with the essence of what the company is all about - to gather views on specific areas of expertise; pinpoint what you excel at; and establish a set of company principles that wins employees' buy-in. To gather all valuable information that can provide the basic building blocks for a corporate message that is both
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consistent, and sets the right tone for future communications across all media channels.
And be honest! Honesty is important. Any corporate message needs to be trusted, not only by those receiving it - clients included - but also by those delivering the message. It's true to say that if there’s a genuine belief in the action, then that passion and sincerity will shine through. Corporate comms are no different. Time taken to harmonise and align corporate communication across all channels not only minimises the risk of attracting unwanted publicity, it sends out a clear signal on your values as a company.
No.1 in the handling and disposing of motor vehicles The handling and disposing of motor vehicle salvage is a constant drain on financial and administrative resources. HBC reduce this by providing an unrivalled service. We are prompt, efficient and fully in accordance with current industry guidelines and environmental legislation. We also require only minimum administration to collect and dispose of your vehicle salvage. With continued investment and systems development we are able to set the standards that others struggle to achieve. We are the safest hands in salvage. HBC Vehicle Services, HBC House, Charfleets Road, Canvey Island, Essex SS8 0PQ
www.hbc.co.uk 01268 696444 Fax: 01268 510087 Email: info@hbc.co.uk BRITISH VEHICLE SALVAGE FEDERATION
MARCH 2015 insurancepeople 13
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RDT hub drives increase in Markerstudy quotes arkerstudy, the first insurer to implement the RDT hub, went live with it in 2013. Since then the company has seen a steady growth in volume and a 3.5 per cent reduction in loss ratio on an already profitable book of business. The hub currently processes more than 12 million quotes a day for Markerstudy, predicted to rise to 20 million a day by next year. The hub aims to centralise, accelerate and
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streamline the distribution of quotes, while its use of data enrichment at point of quote enables the insurer to know more about its customers. The
HBC increases motorcycle services BC Vehicle Services has announced an increase in its fleet of motorcycle transporter vehicles for the collection and delivery of motorcycles throughout the UK. Steve Hankins, managing director, says, "HBC has grown rapidly over the years, now operating in 10 UK sites with a fleet of 58 specially constructed vehicle transporters. "With our increase in motorcycle services, two of those are dedicated to the professional transportation of motorcycles, each holding six motorcycles, with an additional six vehicles able to carry up to two vehicles or a mix of motorcycles and cars. We strive to fully understand our customers and our vehicles are custom made to efficiently meet the needs of all collections and deliveries.”
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result for Markerstudy is a 60 per cent cut in application fraud. Markerstudy says it implemented the hub because it was looking for a controllable platform that would improve sales, and it no longer wanted to be reliant on intermediary and broker channels to distribute rates. Group underwriting director, Gary Humphreys, says, “We wanted a platform on which we could implement weekly updates and make
changes immediately, rather than face long delays that undermine our competitive strength. The hub has achieved this admirably, giving us greater agility and speed to market, and much better market intelligence. We expect to be processing more than 20 million quotes a day by 2016, with the hub returning prices in a fraction of a second using real-time enrichment. That’s a very big step forward.”
IUA and LMA prepare for new legal framework lans are being made by the International Underwriting Association and Lloyd’s Market Association to prepare their members for fundamental changes being made to insurance contract law in the UK. The Insurance Bill has been passed unanimously in the House of Commons and is expected to become law shortly after receiving Royal Assent. It replaces significant parts of the Marine Insurance Act 1906, which has formed the market’s legal framework for over a hundred years. The reforms will impact firms’ day to day operations in
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business insurance, consumer policy wordings and the consequences of fraud. The IUA and LMA are working with a number of leading law firms and counsel to prepare guidance which will highlight changes in the law and where these will have a bearing on the placing of insurance and reinsurance contracts, on contract wordings and in relation to claims. The planned guidance will also include a detailed review of the new legislation and it is envisaged that a series of seminars will be run for LMA and IUA members following its publication.
QBE Tradesman on PowerPlace
Consolidation “likely to continue”
BE has launched its Tradesman product on PowerPlace and has committed to adding another product later in the year. Dave Greaves, head of UK SME at QBE, says, “As a business insurance specialist, QBE has ambitious growth plans for the SME market. Widening our e-trade capabilities out to multiple distribution channels forms an important part of our strategy and we are therefore delighted to be joining forces with PowerPlace, who share our goal of maximising and expanding the opportunities that e-trade offers.” Nick Giddings,
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PowerPlace CEO, comments, “Adding this new offering from global insurer QBE bolsters our Tradesman panel even further. We are committed to offering our broker partners maximum choice and quality covers and look forward to working with QBE to roll-out further products during 2015.”
VC/Apollo's exit from Brit “ … encapsulates the trend that increasing buyer demand is facilitating PE exits”, says P.K. Paran, partner and head of insurance at DLA Piper for EMEA. Adding that consolidation is likely to continue, he says, “At the smaller end of the market, regulatory/capital requirements are driving some transactions but I think this is less of a driver for the larger deals which appear to be more driven by commercial and strategic reasons. There is still some regulatory uncertainty for the largest players with the possibility of evolving global regulation and capital standards and this may act as a drag on big ticket M&A activity. “However, industry sources indicate that, whilst transformational deals may be unlikely due to the shifting global regulatory landscape, there is now more certainty around Solvency II and a greater appetite to do deals, as large insurers can't hold fire forever when organic growth is slow due to falling premiums in some traditional product lines and markets, combined with low yield and low interest rates on the investment side."
Technology set to revolutionise household P roperty claims handling and risk management in the UK is on the threshold of a technological revolution similar to that being experienced in the motor market, according to a new report: ‘Future Now,’ published by The Innovation Group. The report, which includes contributions from across the household insurance sector, notes that the ‘Internet of Things (IoT),’ the creation of home eco-systems and a new focus on risk mitigation has provided a new lens for insurers in their drive to further reduce their combined operating ratios. Paul Irvin, managing director of
Innovation Property UK, who commissioned the report, said: “The iconic image of high volume, low value property claims management, traditionally tagged in the outsourcing arena as loss adjusting handled by someone out on the road with access to meagre technology and little connectivity to
embrace a multi-participant event, is rapidly becoming history. “In a technology context, property claim handling has lagged motor claims, primarily because houses are immovable. Investigation and repairing them requires a more diverse and bigger fulfilment and supplier network. When making an insurance claim, today’s tech-savvy customers expect the same level of technology-led digital service that they experience in motor claims and outside the industry.” Painting a future picture of the specific changes customers can expect to see, Mr Irvin said: “Technology will
rapidly increase its role in simplifying the claims process and will provide complete connectivity and transparency to all parties involved, providing real time information and valuable updates. “Homeowners will no longer have to project manage their own claims and interact with various parties themselves – policyholder self-service, appointment booking, providing information via image or video and hasslefree participation in the claim lifecycle will be the minimum expectations from insurers and their customers - in essence a joined up automated event that simplifies process, reduces lifecycle and improves the customer journey.”
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Pen acquires Evolution en Underwriting has announced the acquisition of Evolution Underwriting Group, the Kent-based managing general agent and insurance services group specialising in UK SME business, for an undisclosed sum. Established in 2004 and based in Maidstone, Evolution has established a product range extending across commercial combined, property owners, vacant property, professional indemnity, tradesmen, directors & officers liability and excess of loss. Mark Armitage, managing director of Pen Underwriting, says, “Evolution is a great business with a proven track record of growth. Its portfolio of SMEfocused business and strong relationships with independent provincial brokers offer an excellent strategic fit with our existing commercial mid-market offering and broker partners. “Not only is Evolution a like-minded service-driven supporter of giving brokers access to experienced underwriters — which underpins Pen’s determination to make ourselves easy to do business with — but its highly efficient online trading platform helps drive out the frictional cost of trading complex SME risks, broadening the spectrum of commercial business we can transact.” Paul Upton, group CEO of Evolution, adds, “Pen shares our core beliefs — putting risk management at the heart of the commercial insurance proposition, to proactively assist clients in mitigating risk, while offering access to empowered underwriters — but also brings all the benefits inherent in being part of a large national business, backed by the resources of a global insurance services group.”
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Brightside signs partnership with CDL rightside Group has signed a strategic partnership with CDL, which will see it migrate its inhouse ‘eSystem’ platform to CDL's Strata solution over the next 12 months. Brightside Group CIO, James Fairhurst, says, "The capability of our IT systems and technology is fundamental to our success and we're confident that this new strategic partnership
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with CDL will deliver a scalable platform to support our ambitious growth plans and will also significantly improve the customer experience." Brightside customers will be able to access Strata’s online self-service portal, allowing them to make midterm policy adjustments and accept renewals online, as well as securely store policy documents electronically.
Premium Credit welcomes Towergate re-financing ndrew Doman, chief executive of Premium Credit, believes the refinancing of Towergate sends an important message about the long term stability and resilience of the UK insurance sector. “The fundamental fact is that Towergate has a very strong underlying customer franchise and has a significant and positive role to play in the sector”, says Andrew Doman. “Undoubtedly the
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proposed refinancing that has been secured gives the broker group important stability for its employees and its clients – and will build client confidence in the wider insurance industry. Premium Credit looks forward to continuing to support the business, with whom it has worked for more than a decade, with premium funding solutions that help Towergate’s clients spread the cost of their insurances.
Three-year Fresh deal with Open GI resh Insurance, has announced a new three-year partnership with Open GI. Established in 2002, Fresh Insurance offers a range of insurance products including; car insurance, home insurance and motor trade insurance, through the following brands; Fresh Insurance, Ladybird Insurance, Autosaint, First Insurance and Insure OK. The new 70-user agreement, which will run until 2017, will see Open GI provide a range of technology solutions, allowing Fresh Insurance to “ … enhance their online customer self-service capabilities”. Fresh Insurance chief executive officer, Lisa Powis says, “The technology and expertise that Open GI provides is a key business enabler for Fresh Insurance. We’ve been able to tailor the Open GI system to fit our own business requirements which will further improve our overall service.”
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Aspen reports 11% return on equity A
spen Insurance Holdings has reported net income after tax of $67.2 million, or $0.90 diluted net income per share, for the fourth quarter of 2014. Chris O’Kane, chief executive officer, comments, “In 2014 Aspen achieved book value per share growth of 10.3% and a strong operating return
on equity of 11.5%. Our performance - achieved despite a dynamic and competitive reinsurance market that has required constant strategic vigilance - reflects our deep client relationships and access to more attractively priced business in reinsurance, as well as the continued successful build out of our U.S. Insurance teams and
the innovative insurance solutions we offer our clients around the world.” Gross written premiums increased by 9.7% to $2,902.7 million for the year ended December 31, 2014 compared with 2013. Gross written premiums increased by 3.4% in reinsurance and 14.4% in insurance compared with 2013.
The combined ratio of 91.7% (90.5% excluding bid defence costs) for 2014 compared with 92.6% for 2013. Net favourable development on prior year loss reserves of $104.1 million, or 4.3 combined ratio points, for 2014 compared with $107.7 million, or 5.0 combined ratio points, for 2013.
Markel operating revenues top $5 billion for 2014
Revenue growth of 3% in 2014 at Aon
arkel Corporation reported book value per common share outstanding of $543.96 at December 31, 2014, up 14% from $477.16 at December 31, 2013. Over the five-year period ended December 31, 2014, compound annual growth in book value per common share outstanding was 14%. Comprehensive income to shareholders was $935.9 million for the year ended December 31, 2014 compared with $459.5 million in 2013. The combined ratio was 95% in 2014 compared with 97% in 2013. Diluted net income per share was $22.27 for the year ended December 31,2014 compared with $22.48 in 2013. Alan I. Kirshner, chairman and chief executive officer, comments, "We had a remarkable finish to the 2014 year with outstanding results from both our underwriting and investing operations. We doubled our comprehensive income in 2014, which drove
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growth in book value per share of 14% for the year. Operating revenues surpassed $5 billion for 2014. We achieved these results while maintaining a strong balance sheet and our disciplined underwriting approach.” Reporting on “ … encouraging levels of organic growth” from UK retail operations, William Stovin, president of Markel International, says, “On the retail side, we acquired Abbey Legal Protection, the legal and professional fees insurance and consultancy business. Abbey has had a good first year and, looking forward, will work increasingly closely with our UK businesses in developing a selection of insurance products and advisory services that reflect and serve the needs of our commercial customers, which will be distributed through a range of mechanisms.”
or the year 2014, Aon reports total revenue of $12.0 billion, with organic revenue growth of 3%. The operating margin increased to 16.3% and, adjusted for certain items, to 19.5%. “We delivered twentythree percent earnings growth in the fourth quarter driven by organic revenue growth and strong operating margin improvement in both segments, a lower effective tax rate and effective capital
management," said Greg Case, president and chief executive officer. "Results reflect a strong finish to 2014, having made significant investments in client serving capabilities while returning a record amount of capital to shareholders. Looking forward, we have positioned the firm for increased operating leverage, strong free cash flow generation and significant shareholder value creation in 2015."
LV= Broker strengthens personal lines pricing V= Broker has bolstered its personal lines pricing team with the creation of a new motor pricing manager role and the recruitment of three additional analysts, as part of its ongoing strategy to boost its broker pricing capability. Andrew Davies has been promoted into the new manager role and will be responsible for pricing across the bike, van and specialist motor product lines. He joined LV= in 2011 after graduating from Cambridge and worked in LV=’s direct business, where he progressed to principal analyst within its motor pricing team. He will report to LV= Broker’s head of pricing, Tim Rourke.
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Willis net income up 11.8% in fourth quarter illis Group fourth quarter of 2014 highlights include:reported net income up 11.8%, with underlying up 16.9%; reported commissions and fees up 3.1% (underlying up 7.2%); reported expenses up 5.8% (underlying up 7.1%); and organic commissions and fees up 3.6%, with organic expenses up 2.7%. Dominic Casserley, Willis Group chief executive officer, comments, “We finished 2014 with strong top-line growth driven by both another quarter of midsingle digit organic growth
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in commissions and fees and the impact of our recent acquisitions. We continued to make good progress on managing our organic cost growth and implementing our Operational Improvement Program. “We achieved all this despite some ongoing challenging markets, demonstrating the strength of Willis’ diversified business model and our intense focus on executing our strategy. Importantly, we delivered growth in key underlying earnings metrics, including EPS, EBITDA and operating margin.”
Ageas reports profit of £94.7m for 2014 geas UK has reported a full-year net profit of £94.7 million for 2014, compared with £85.2m in 2013, with the combined ratio at 99.8% (97.8%). Total income was £2,097.6m (£2,116.8m), with total non-life GWP £1,822.0m (£1,848.0m). Total inflows from retail business were down 7.0% at £164.7m, “ … due to continued competitive environment”. Chief executive Andy Watson comments, “In a year where the industry faced a number of challenges, I’m pleased to report that we’ve ended 2014 in good shape. We’ve made strong progress on the integration of our two insurance businesses, giving brokers a greater product choice in both personal and commercial lines. We continue to implement our growth and simplification strategy in our retail business. “The additional focus and investment in partnerships has delivered the renewal and launch of significant deals in 2014, demonstrating that wellrespected brands trust Ageas to look after their clients. I’m immensely proud of the continued recognition we receive from the industry and our customers and look forward to building on this in 2015.”
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Record attendance at Sterling roadshows terling Insurance reports record attendances for its broker roadshows this year, the event having visited Glasgow, Leeds, Manchester, Birmingham and Bristol, before finishing in London.
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Among the topics being presented by the senior team at the roadshows have been the forthcoming launch of a number of new initiatives including a new e-trade proposition and innovations in Sterling's high net worth offering, all due to launch later this year. Parallel sessions on claims and partnerships have also offered brokers the opportunity to discuss their challenges and ask questions of the Sterling senior management team. David Sweeney, director of household and commercial, says, “Our longer-term strategy is to strengthen our relationships with brokers in the different regions of the UK and we have invested in both offices and people to make that happen. We are really pleased with the high turnout of brokers to the events this year. It has given us a great opportunity to meet and listen to brokers and gather their feedback on our latest innovations.”
Tokio Marine Kiln reports “good results”
Cigna appointed by Chaucer for PA
okio Marine Kiln reports that syndicates 510, 557 and 308 each delivered profits for the 2012 year of account, with 510 and 557 forecasting profits for 2013 and 2014 years of account. Charles Franks, group chief executive officer, said: “I am delighted to report that Tokio Marine Kiln has continued to deliver good returns despite the challenging trading environment, supported by our strong product portfolio, an empowered approach to underwriting and our focus on delivering excellent customer service.” He continued: “Despite
igna Insurance Services has been appointed by Chaucer Direct to provide its motor insurance customers with PA cover and claims handling. Chaucer will continue to be responsible for sales and marketing. Personal accident cover will be offered to customers alongside Chaucer Direct’s standard motor insurance. It covers all named drivers up to a maximum sum insured of £100,000 and the benefit is payable to the driver of the vehicle at the time of the incident. Andy Glynne, commercial director of Cigna Insurance Services, says, “We are really excited about the prospect of working together with Chaucer Direct to enhance their motor insurance customer proposition. We’re hugely ambitious about the enormous potential for our health and accident products, and securing a partnership with a brand of Chaucer Direct’s reputation underlines the quality of what we offer to customers of our affinity partners.”
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softening market conditions and increased competition, our underwriters have maintained their focus on professional underwriting, which has contributed to these positive results. “In an environment in which scale has become increasingly important, our decision to integrate with Tokio Marine Europe and rebrand as Tokio Marine Kiln strengthens our business proposition and aligns us with the security of a globally recognised brand, which will help to ensure that we remain well positioned for the challenges and opportunities ahead.”
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ARAG offers criminal prosecution defence cover egal expenses provider ARAG is offering a Family Prosecution Defence policy to protect individuals accused of criminal offences. The new policy guarantees the right and freedom to have a defence in court. David Haynes, head of underwriting & marketing says, “The cost of obtaining justice can be extremely high, even for those who are completely innocent. Family Prosecution Defence provides first class lawyers, protecting innocent family members of someone who is accused of committing a crime against serious financial consequences–
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such as the need to remortgage or sell the family car to fund a proper defence”. The new policy extends to areas such as allegations of dishonesty, violence, uninsured driving and alcohol or drug-related offences. All family members, including those studying for further education away from home, are covered. David Haynes comments, “The burden of proof in a criminal trial lies with the prosecutor who is required beyond all reasonable doubt to prove that the accused is guilty of the charge. We’re here to ensure a quality defence is available so there is no
miscarriage of justice.” Family Prosecution Defence will typically be available to boost family legal protection policies for high net worth individuals or for company directors and partners as an extension to commercial products, but the new policy is also suited to affinity groups. The new policy covers the majority of criminal acts but Class A and Class J offences or repeat offences are excluded. Most importantly, assistance can be sought before an arrest or notice of prosecution is received. In addition to criminal matters, cover is available to provide representation
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for individuals facing a regulatory investigation or disciplinary action by a professional body. Confidential telephone counselling and legal advice is also provided as well as access to an online consumer legal service website, for legal advice and documentation. MARCH 2015 insurancepeople 19
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Royal Assent for Insurance Act he Insurance Act 2015 has received Royal Assent and will come into force in August 2016. The key changes introduced by the new Act alter the duties of insureds and insurers on presentation of a risk; the effect of certain terms such as warranties and other terms descriptive of the risk; as well as clarifying the remedies for fraud. In the event that an insured fails to make a fair presentation, the remedies are no longer "one size fits all" but instead proportionate, dependent on what the insurer would have done had the presentation been a fair one. DAC Beachcroft partner Nick Young comments, "After nine years of work and a whirlwind of activity in the last few months, I am delighted to see this Act succeed. Whilst there may now be a temptation to relax, 18 months is not a long time for insurers to make the necessary changes to their policies and procedures. "They will need to carry out their impact assessment; consider whether to contract out of some of the provisions; review existing policy wordings, underwriting guides and policy documentation; and train claims handlers and underwriters to ensure that their practices are fully compliant. There is a lot to do." Commenting on the key issues for commercial policyholders, he adds, “Businesses seeking insurance need to understand the rules against which they will be measured in presenting the risk. They need to be clear about who, both within and outside their organisation, needs to be consulted in order to gather information for a fair presentation to insurers."
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* * * * A bulletin from Browne Jacobson comments, “The Act has been welcomed across the industry as providing clarity and increasing fairness between insurers and their policyholders.
“While the Act is a triumph for efficient government decision making (it spent just over six months in parliament), we do not expect the transition to the new regime to be smooth. “For instance we expect that: l
brokers and insureds will find it difficult to anticipate what insurers, and the courts, will consider constitutes a 'reasonable search' for material information falling within the duty of fair presentation
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there will be confusion over who falls within the 'senior management' definition of the bill - senior management being those people within an organisation who are deemed ought to know material circumstances falling within the duty
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disputes are sure to arise over how the new proportionate remedies will apply to nonfraudulent/reckless breaches of the duty of fair presentation - particularly given that it will be for insurers to hypothesise about what would have happened had a disclosure been made, and
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the application of terms relevant to particular types of risk will be tested, in particular when insureds attempt to convince an insurer that a breach of any such term could not have increased the risk of loss.
“Simply on the basis of the above examples, the adjustment period over the next 18 months may well be the calm before the storm. Accordingly, all those within the industry should look to use that calm to prepare and stress test their processes in anticipation of the reforms taking effect.”
Hill Dickinson helps obtain fraud judgement ill Dickinson Counter Fraud Group and Europcar have successfully disrupted the activities of claims management company director, Mark Richardson of ‘Richardsons’, for his involvement in staged motor accidents; despite not being party to the original court case. All claims related to the case, totalling over £150,000, were dismissed.
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The court case centred on a staged collision between a family’s vehicle and a car hired by them from Europcar. Seven members of the family subsequently submitted personal injury claims through Richardsons. The involvement of a hire car along with inconsistencies in witness statements, incorrect details entered on the claims notification forms, the high number of passengers and
the involvement of Mr Richardson, all combined to raise Hill Dickinson’s suspicions. Investigating the claim, the firm interrogated cross sector data in its Netfoil claims database and identified links between the lead claimant and Mr Richardson, who had submitted claims together for three previous traffic accidents. David Croot, senior
associate at Hill Dickinson says, “This victory for Europcar sends a clear message to fraudulent claimants, professional enablers and solicitors that deception and fraud will be detected and rigorously pursued. Justice has been achieved and this case further demonstrates the clear benefits derived from data sharing and industry collaboration.”
Rate reductions for consumers and SMEs IBA reports that the combined cost of home and motor insurance fell last year by 4.3%. Home insurance alone reduced by 4.1% and motor by 4.4% in 2014 compared with 2013. These reductions were driven by premiums reducing fastest during the first half of last year. The combined cost of both home and motor insurance fell 5.5% from Q1 2013 to Q1 2014 and 4.9% from Q2 2013 to Q2 2014. The figures compare the actual premiums paid from the BIBA and Acturis Insurance Price Index, launched last year, which covers nearly £5 billion of premium per annum. It shows that the premiums paid in its consumer insurance ‘shopping basket,’ which includes a home and motor policy, have seen a downward trend each quarter last
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year, compared with the same period in 2013. Small and medium sized enterprises are also benefiting from reducing premiums. The SME basket of the index, which includes the cost of a commercial vehicle and a commercial package policy, has shown a reduction of around 2% in 2014 compared with 2013. This is largely driven by the reduction in commercial vehicle premiums which saw reductions in Q4 2014 of 6.3% compared with Q4 in 2013. Steve White, BIBA’s chief executive, comments, “We are now a year on since we launched the index. The data has proven invaluable when speaking to the government and other external stakeholders about the industry and the role that insurance brokers play within it.”
Consultation on capital markets welcomed ommenting on the publication of the capital markets union consultation document, Olav Jones, deputy director general of Insurance Europe, said: “Insurance Europe welcomes the consultation on the capital markets union. The consultation covers several key areas of importance for insurers, a
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primary example being the prudential treatment of longterm investments. As Europe’s largest institutional long-term investors, insurers are particularly hopeful that progress can be made to reduce barriers and disincentives to making longterm investments that are so important to ensuring growth and stability in Europe.”
BGL team in Laos trip group of ten employees from the BGL Group is on a “life-changing” trip to Laos. The team will see first-hand the work that has been funded by the group and undertaken by Plan International to construct gravity-flow water systems to provide clean water to six rural villages, improving the lives of over 3,400 people. As part of its corporate social responsibility strategy, BGL has donated more than £105,000 to support Plan’s WASH (Water, Sanitation and Hygiene) project. More than 200 employees from the group applied for the chance to travel to Laos in South East Asia. The selected team is visiting communities in the Oudomxay Province that have benefited from the new water system, travel down the Mekong River, and spend time in the country’s capital, Vientiane and UNESCO World Heritage site Luang Prabang. Adam Heuman, head of major partnerships at Plan UK, commented: “The commitment of BGL and its employees to make a difference to children and their communities around the world is inspiring. Their support will enable Plan to help more children move from a life of poverty to a future with opportunity. During their visit to their water and sanitation project, BGL staff will experience first-hand the challenges for communities in rural Laos and understand the lifesaving impact of clean water.”
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MARCH 2015 insurancepeople 21
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News
Over-regulation seen as top threat to growth early 60% of insurance company CEOs believe there are more business opportunities than there were three years ago; however, 61% see more threats. The results of PwC’s 18th Annual Global CEO Survey, which includes responses from 80 CEOs in the insurance sector across 37 countries, reflect the heightened environment of change within insurance compared with other industries. More than in any other industry, over-regulation is seen as a
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key disruptor with 91% of insurance CEOs considering it to be a threat to their growth prospects. Jonathan Howe, PwC’s UK insurance leader, says, “The fact people are living longer and have more wealth to protect presents insurers with an opportunity. However, with Solvency II now less than a year from going live and other regional and local changes coming up over the horizon, the challenge for the UK industry is how to minimise the upheaval
Charles Taylor ahead of expectations roup revenues and adjusted earnings at Charles Taylor are expected to be ahead of management's previous expectations, due primarily to the company's Adjusting Services performing better than expected in December 2014. It is expected that Management Services will deliver a “strong performance” and Insurance
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Support Services will make a “meaningful contribution” to the 2014 results. The company says that the global claims environment, however, remained benign throughout 2014; hence Adjusting Services' operating profit is still expected to be down year on year. The Owned Insurance Companies business is expected to perform satisfactorily for the year.
Consolidation “thick and fast” ith M&A set to increase in the insurance sector. Stuart Reid, executive chairman of Bluefin, comments: “If you look back over the last ten or twenty years of insurance companies in the UK, the number has remained relatively stable. Whilst there is consolidation, the number has tended to remain similar in the past. Consolidation is now coming thick and fast however, not just amongst insurers, but also in the insurance broking market. “The reasons are: surplus cash to buy businesses, insurance is generally a very cash-generative business, and acquisitions are a good way to grow as growth in the market is very difficult.”
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and build the FCA’s conduct risk agenda requirements into a reliable and cost-efficient business.” 90% of insurance CEOs say they recognise how digital technology can help them sharpen data analytics, strengthen operational efficiency (88%) and enhance customer experience (81%), but 70% - more than for all but one other industry - see the speed of technological change as a threat to their growth prospects.
Nearly half of CEOs operating in insurance say they plan to enter into a new joint venture or strategic alliance over the course of the next 12 months. The need for the insurance industry to engage with new customers means twothirds of CEOs see these tie-ups as an opportunity to do this. More than 30% see alliances as an opportunity to strengthen innovation and gain access to new and emerging technologies.
Allianz Commercial beefs up regional presence llianz Commercial is strengthening its regional presence with the appointment of three new regional underwriting managers in the North, North West and the South East. Michelle Madden, Katie Griffiths and Joanne Stephens, who have all been promoted, will have full responsibility of their respective regions for property, casualty, motor and motor trade accounts. In addition, they will take charge of developing technical
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Andrew Broughton
expertise of the regional teams and ensuring that the region contributes towards Allianz Commercial’s profit and growth ambitions. Michelle Madden ACII, who has been with Allianz since 2000, will take over in the North West from Katie Griffiths, who has also been with Allianz since 2000 and is taking up the regional underwriting manager position in the North. Joanne Stephens joined Allianz in 2013, having previously been with AIG. Andrew Broughton, director of broker markets, Allianz Commercial, commented: “These appointments continue our push to broaden our regional footprint and strengthen ties with our broker partners. I have no doubt that they will help support our profit and growth ambition.”
SSP strengthens insurer team
AA welcomes “spy truck” initiative
SP has announced two appointments in its insurer division – Paul Bryson as head of delivery, and Paul White as product manager for SSP Pure Insurance.. The company says that the move complements its commitment to development of its core insurer products “ … to meet strong market demand”. It also draws attention to its almost £5 million of investment in SSP Pure Insurance since 2011. Reporting directly to Stephen Lathrope, managing director of SSP’s Insurer Division, Paul Bryson will take over the leadership and management of the SSP Select Insurance and Pure
A Insurance believes that a police ‘spy from the cab’ campaign using unmarked heavy goods vehicles to target drivers making calls or texting from handheld phones could lead not just to fines but big increases in car insurance premiums for offenders. The company adds that “some insurers could even decline to renew cover for those who are caught”. The high viewpoint from a lorry cab allows officers to gather evidence using a video camera. They then radio to a supporting officer on a motorcycle or in a car to pull the errant driver over. Pointing out that insurance companies take mobile phone offences extremely
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Paul Bryson
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Paul White
Insurance products. He will also be responsible for overseeing resources across SSP’s development and services operations. He brings 35 years of financial services software experience to the role, gained in both small UK software houses and major global corporations. Paul White is appointed as product manager for SSP Pure Insurance. He has 27 years’ experience in the general insurance industry, working for a number of insurers, including Ageas, Aviva, Guardian and Sun Alliance, prior to joining SSP seven years ago as a business consultant.
seriously, Janet Connor, managing director of AA Insurance, says that she welcomes this initiative because of its potential to save lives. “Drivers using a handheld mobile phone are at four times greater risk of having a crash. And although a CU80 offence for using a handheld mobile phone commands only the same fixed penalty as an SP30 speeding offence (three points and a £100 fine), it could add another £100 to your annual premium as well. “While drivers may mistakenly exceed a speed limit, no-one uses a handheld phone by mistake. It’s a deliberate act that diverts attention from driving, significantly heightening the risk of a crash.”
Insurance Europe conference booked for May nsurance Europe has announced that registration is now open for its 7th International Insurance Conference on May 27 in Luxembourg. Under the title of “The globalisation of the insurance industry”, speakers will include: Luxembourg's Minister of Finance, Pierre Gramegna; Governor Dirk Kempthorne, chair of the Global Federation of Insurance Associations; Inga Beale, CEO, Lloyd’s of London; Henri de Castries, CEO, Axa; and the chairman of the IAIS, Felix Hufeld.
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MARCH 2015 insurancepeople 23
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News
New UK CEO for Gallagher rthur J. Gallagher has announced that Grahame ‘Chily’ Chilton has been named CEO of the company’s UK-based international brokerage division. He will be responsible for leading Gallagher’s international brokerage operations and will also become a member of the senior leadership team of parent company Arthur J. Gallagher & Co. Best known for founding and developing the Benfield Group, he has been working in partnership with Arthur J. Gallagher leading the company’s reinsurance intermediary joint-venture, Capsicum Re. Chairman, president and CEO, J. Patrick Gallagher Jr. said: “Chily has an outstanding reputation and proven track record as a
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Grahame Chilton
successful industry leader who understands how to balance the entrepreneurial culture that our business is built on, with the successful running of a large scale organisation. We are delighted that he has agreed to lead the team as they continue to drive future growth while remaining firmly committed to delivering quality service to Gallagher customers.”
XA UK has appointed Bruno Charlin as chief investment officer. He was previously COO of group investment and group head of asset & liability management at AXA Group, a role he had held since 2010. Mr Charlin has been an AXA employee since 2003, holding senior roles in AXA France as head of the asset and liability management function and as chief finance officer at AXA Assicurazioni in Milan. He has nearly 30 years' experience of the financial services industry primarily focused on risk functions and investment. As CIO, he will have responsibility for overseeing AXA UK’s investments, including setting overall investment policy and directing all portfolio management, research, trading and investment strategy and supervising the management of the AXA UK pension fund. He is also in charge of treasury and corporate finance activities. He replaces Eric Lhomond who was recently appointed as global head of alternative credit and external managers group for AXA Investment Managers. 24 insurancepeople MARCH 2015
escribing themselves as “acquisition hungry”, Chase Templeton reports that a “climate of uncertainty” has seen a surge in the number of brokers and intermediaries approaching them to enquire about selling their businesses. The private medical insurance specialist believes that mooted tax changes and tight polling between the two major parties in the run-up to the general election outcome are behind the increase. “Whereas in the past we would be the ones making the running, since Christmas it is more would-be sellers that have been calling us up,” comments Warren Dickson, the company’s chief executive officer. “We took five calls alone in the first few days in the office after the festive break.” “People seem unsettled because there is a climate of uncertainty out there. The polls are swinging back and forth, the frequency and heat of the hyperbolic policy announcements is intensifying and speculation about what the next government may do to the tax regime increasing.” He cites in particular discussion in the financial press that entrepreneurs' relief on capital gains tax may be in political sights. The relief allows those selling all or part of their businesses to pay just 10 percent on capital gains of up to £10m against the standard rates of 18 and 28%. “The reported cost of this relief to the Exchequer has been growing, with, in the last financial year a hit of £2.9bn recorded. When you’re looking to cut the deficit it’s an undeniably tempting target,” says Warren Dickson.
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AXA appoints new CIO
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Surge in sale approaches reported
Premier appoints Silverfinch for Solvency II advice remier Asset Management has appointed Silverfinch to handle an expected sharp rise in look-through data requests from its insurance clients moving to comply with new Solvency II regulations. Access to look-through data on their investments is vital for insurers to comply with the new rules, says Premier, adding that Silverfinch is a secure fund data utility that allows asset managers to respond to
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their insurance company investors, who will be compelled to provide regulators with detailed information on invested assets from 1 January 2016, the date Solvency II takes effect. Premier Asset Management has £3.4bn assets under management (as at 31 January 2015). The company’s investments are distributed primarily via financial advisers. Mark Friend, chief operating officer at Premier
Asset Management, says, “Solvency II creates two major issues for asset managers. The first is the glut of look-through data requests we expect to receive from our insurance clients, beginning later this year. Having investigated all the available options for handling this, Silverfinch struck us as the most simple and elegant solution. “The second point is that Solvency II is going to change the way in which insurers choose their asset
managers. An asset manager’s willingness and ability to provide accurate and timely look-through data will become a key factor in their decisionmaking process. Those asset managers who fail to grasp this particular nettle are going to make themselves unattractive to insurers. By bringing in Silverfinch, we’re signalling to the insurance market that Premier is able to cope with all their post-Solvency II needs.”
MSIG launches bloodstock account
TEn strengthens management team
SIG at Lloyd's announces that it has entered the bloodstock insurance market and made two appointments of specialist underwriters, enabling the syndicate to claim that it now “ … offers a comprehensive insurance product for high-value horses through specialist insurance brokers and agencies across the world”. Coverage is for all risks of mortality and theft, with
listair Body has been appointed as a board director by TEn Insurance, joining from NIG, where he was regional development director. He joins TEn Insurance with 11 years’ experience of commercial insurance. In his two years at NIG he most recently managed the business development function in the South of England, with responsibility for a £200m GWP portfolio. Prior to that, he spent three years at Arista, most latterly as branch manager in St Albans with full P&L responsibility and four years at Alliance where he was a key account developer. TEn Insurance MD Malcolm Lee comments, “Now that we have secured the future ownership and independence of TEn for the benefit of our staff and broker members, our
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additional covers including infertility, prospective foal insurance, life-saving surgery, colic surgery, and transit insurance. Rebecca Attridge, who leads the account, has joined MSIG from QBE, where she hold the position of senior bloodstock underwriter from 2005. Phil Needham was bloodstock portfolio manager at QBE for 11 years and has been in the insurance industry since 1972.
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Alistair Body
thoughts have turned to succession planning. “Whilst our current board members are all extremely active and committed to their roles, there will come a time when we, like all businesses, will need to consider changes to the management team. By strengthening our management team now with young but experienced new talent, we will ensure that the TEn board is well placed to meet the challenges of the present and the future.” MARCH 2015 insurancepeople 25
On the move Who’s going where? PowerPlace
Kirsty Field
Commercial Express Underwriting agency Commercial Express appoints Kirsty Field as an in-house claims coordinator. Her 15 years’ experience includes six years at Zurich, and before that at Liberty Insurance, and smaller loss adjusting firms and claims management companies.
PowerPlace promotes Johannah Lyon as business development manager for the South West region, having joined PowerPlace in 2011 and previously worked in marketing and education. Alex Fisher becomes business development manager for the South East, joining after five years at Allianz where she was a development underwriter, also involved in wellbeing, innovation, D&O, and professional indemnity.
Alistair Hardie 26 insurancepeople MARCH 2015
Compass Compass Broker Services appoint Darren Grodent as senior motor fleet broker within its London markets division. With 17 years’ experience he joins from Holman where he spent eight years
Ageas
CEGA CEGA Group appoint Alistair Hardie as new group chief executive. Most recently he was CEO Europe for Cigna's individual health, life and accident business, having previously been part of the management team of FirstAssist Insurance Services when it was acquired by Cigna in 2011.
Darren Grodent
as a motor fleet account handler. Prior to that he spent six years at Carroll London Markets, also as a fleet account handler, having joined in 2003 from Tradex where he began his insurance career in 1998. Patrick Bartlett joins as motor fleet renewals executive from Amlin UK where he was a crossclass underwriting technician. Prior to that, he worked at Newline Insurance for four years as a motor fleet underwriting assistant, having joined from QBE Europe in 2009.
Gareth Robb
Ageas appoint Gareth Robb as a London-based broker account executive. He joins from Hughes Insurance where he spent 18 years, including senior business development roles based in Belfast. Ros Byrne
Acturis RPC Rory O'Brien joins City law firm RPC as a partner. He was formerly global head of risk consulting and software at Towers Watson, and managing partner and head of insurance management consultancy at EMB Consulting. His 30 years’ insurance experience includes being group chief executive at Guardian
Rory O'Brien
Holdings in the Caribbean, and joint head of insurance consulting at Deloitte.
Acturis appoints Ros Byrne as an account manager covering the north of UK. She joins from Broker Network where she was customer services system support manager. In the south Matt Felvus is promoted to an account manager from an internal customer support role at Acturis where he has worked for three years.
Brightside
MA Group
Brightside Group appoints James Fairhurst as chief information officer (CIO). He joins from Hastings Insurance Services where he was CIO for six years and was part of the senior leadership team involved in the management buyout in 2009.
Ian Guest, former claims supplier manager at Allianz, joins property claims specialists MA Group to head a new launch in complex and high value property claims. He joined Allianz in 2009.
Mark Walters
Arthur J Gallagher Arthur J. Gallagher appoint Mark Walters as executive director to lead its aviation division. With over 25 years’ experience, he joins from Tysers where he had been managing director of aviation since 2009. Prior to that, he spent over 18 years at Marsh.
Elizabeth Fullerton-Rome
Liberty Liberty Specialty Markets appoint Elizabeth Fullerton-Rome to the newly-created role of chief risk officer. A graduate of St Hilda’s College, Oxford, she began her career as a chartered accountant at Neville Russell and later at KPMG. Her 21 years’ experience was most recently at Axis Insurance.
National Windscreens Pete Marsden joined National Windscreens in 2010 as commercial director and now becomes managing director. Previously he held MD roles at Bloor Homes (2008-2010) and Taylor Wimpey (19882008).
Plum
Nicky Whatman
Ian Guest
Plum Underwriting appoints Nicky Whatman as a senior underwriter in the London high net worth team. He joins from Direct Line where he held roles including HNW senior client adviser and HNW underwriter.
Direct Insurance London Market Direct Insurance London Market, the specialist Lloyds Brokers and operators of niche schemes, including Recycling, Asbestos and Haulage Insurance, appoint Ian Payne to the newly created position of sales & marketing director. Ian is a marketing and business development professional who has spent 13 years in the financial services sector, previously as head of business development at Employee Benefits company, Secondsight. Ian will report to Group CEO, David Bearman.
Barnett Waddingham Independent actuaries and consultants Barnett Waddingham appoint David Hughes as an associate within its insurance consulting team. He joins from Marsh where he was head of analytics. Jody Glennie also joins as an associate from PWC’s actuarial and insurance management solutions team.
Cunningham Lindsey Cunningham Lindsey appoint Jane Lewis as inTrust director responsible for the development of motor and domestic loss adjusting work, as well as the global TPA hub in the UK. She joined in 1999 and as head of Glasgow claims centre has managed operational household claims, motor and TPA for eight years. She began
her career with General Accident in 1979, moving on to Prudential Assurance and then Marsh Insurance Brokers.
Jane Lewis
MARCH 2015 insurancepeople 27
in association with:
by Andrew Newman
Episode 150! any thanks for readers’ congratulations last month on IP’s 50th edition, as the team enters its fifth year – how the time flies by!
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To be honest, there was no countdown at this end. It was only during the final proofing of issue number 50 last month that the penny dropped. So before putting the balloons and bunting away for another five years, it occurred that the longevity of this column goes back even further, the first episode making its debut in December 2000 – and countback tells me this March 2015 instalment of On the Road is the 150th episode. The column has enjoyed the company of guest contributors over those 14 years, and the occasional venture on the rails; off the rails; up in the air; down under; all at sea etc – although there’s never yet been occasion to use ‘round the bend’. But there’s plenty of time for that one.
Report
I must speak to you about. I It was those pens and that logo age they’re doing to your don’t think you realise the dam n. corporate reputatio is divided into five divisions Take the logo. Your organisation version of what should own its – and each division produces sion is currently mixing three be a corporate logo. One divi ut! outp different versions in its lies to the pens. There’s simply The same lack of control app nsistent logos, fonts and inco too many variations, with produces their own pens, with get bud a with one Any colours. h. I’ve come across 15 lots batc each een no continuity betw s – even the chairman’s wife purchased over the past two year g! osin cho own her of one has devised goes for business card also that There’s no consistency. And ings across the head r lette rent diffe five design, and the o the others. outd to g tryin company. Each division is
Consistency… please In her article this month on page 13 Elizabeth Holt raises the importance of eliminating conflicting messages in marketing exercises. A lack of consistency here can often say a lot about the failings of a company, and hamper any intended good in the overall message. Reminds me of one classic case example when the importance of focused marketing messages wasn’t fully understood, at least by one mid-sized insurer provider, now no longer with us. The company decided it was time to take some marketing culture on board. They’d already taken the in-house plunge distributing corporate pens, and were very proud of their brand logo, a fact which they impressed strongly on the marketing guru they hired to report.
Those insurance qualifications In another article this month on page 12 Crescens George cites the “shamefully low” number of professionally qualified people working in the insurance sector. Today there’s more people joining the business after further education, but yesteryear it was more common to forgo university in favour of getting a job. CII exam qualifications were voluntary, so staff influx fell into two factions – those who ‘sat’, and those who wanted to give all that up. 28 insurancepeople MARCH 2015
M.G. Marketing Guru
Summary “The subliminal messa ge being conveyed to your customers by this inc onsistent and haphaza rd approach is that you are a pro vider with an ‘inconsis tent and haphazard approach ’, certainly as far as corporate gifts and brand image go . With the inevitable perception that the same happens in everything else you do.” That particular company later pulled out of the market, still not understanding what all the fuss was about. “A pen is a pen,” quotes the former MD, even to this day. It wasn’t a fractious demarcation, nor was it one that was visible – except of course on Wednesdays when the dayrelease people skived off, to some barracking from those left holding the fort. But the former gave as good as they got with the response, “Enjoy your evening in the pub tonight, while we’re stuck in night school.” A quirky legacy of that demarcation emerged years later. Despite no academic qualifications, many of the ‘in the pub’ brigade went on to great things. But they still lacked the enthusiasm to encourage their people to become qualified.
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