thejournal.cii.co.uk June – July 2018
A MATTER OF TRUST A new survey from the CII gauges the public’s faith in the insurance sector
Underwriter 2.0 A changing role in the age of disruption
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Evans knows
Hot property
BIBA’s new man, Jonathan Evans, on his goals for the profession
What does climate change really mean for insurance?
27/06/2018 13:50
The Journal at your ďŹ ngertips For a variety of insurance related content including c-suite interviews, topical debates and in-depth articles.
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J U N E - J U LY 2 0 1 8
C O N T E N TS NEWS
FEATURES
5 President’s letter Inga Beale reflects on her year as CII president
20-22 Underwriter of the future The future of the sector in the age of disruption
6 -9 News UK news from the CII
28-30 Climate change – property risk Exploring the true impact on the insurance industry
11 International news
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12-13 Regional news News from the local institutes 39 Disciplinary matters
REGULARS
32-33 Hackathon A closer look at the innovation initiative from BIBA 2018 36-37 Broking We examine possible outcomes of the latest FCA review
14-15 The Interview – Jonathan Evans We discuss his new senior role at BIBA
STUDY ROOM
16-19 Hot topic – Public Trust Index The new CII report gauges how trust can be measured across the profession 23 Regulatory radar The latest legislation updates from the UK and Europe
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40-42 International profile – Netherlands Examining the Dutch economy and insurance market
44-46 Study room: Bloodstock A look at the big business of horse racing insurance
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47 Study room: Q&A The big 10 questions to test your knowledge 48 Study room: A-Z We explain monitored regtech 50 CII blog Anna Barnes on useful learning techniques
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40 CONTACT US
The Chartered Insurance Institute 20 Aldermanbury London, EC2V 7HY Tel: (020) 8989 8464 Fax: (020) 8530 3052 Chief executive: Sian Fisher
The Journal is the official magazine of the Chartered Insurance Institute (CII). Views expressed by contributors or advertisers are not necessarily those of the CII or the editorial team. The CII will accept no responsibility for any loss occasioned to any person acting or refraining from action as a result of the material included in this publication. The Journal is online at www.cii.co.uk/ journal (members and subscribers only) Should you wish to send your views, please email: michelle.worvell@cii.co.uk
Editor: Michelle Worvell (020) 7417 4763 michelle.worvell@cii.co.uk Deputy editor: Luke Holloway (020) 7417 4778 luke.holloway@cii.co.uk For sales and advertising please contact ben.nelmes@redactive.co.uk ISSN 0957 4883 © 2016 Chartered Insurance Institute. Average total net circulation more than 82,000
Publisher: Redactive Media Group Level 5, 78 Chamber Street London E1 8BL Tel: (020) 7880 6200 Senior designer: Yvey Bailey Senior picture editor: Claire Echavarry Production: Jane Easterman Printing: GD Web Offset Cover illustration: Catherine Pape
Recycle your magazine’s plastic wrap – check your local LDPE facilities to find out how
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SAY YES To accessible CPD
Most events and publications from Local Institutes count toward your annual CPD commitment. Local institutes are regional hubs that deliver an extensive range of professional CPD events and networking opportunities to each one of our members based across the UK. In today’s market it is absolutely vital to keep your technical knowledge and capabilities current. Engaging with your local institute can help you achieve this. Local institutes give you access to a wealth of local activities helping you keep your technical knowledge up to date which in turn can support your career progression.
Say yes to staying in touch Stay informed on the activities being run by your local institute by saying yes and opting in to local institute communications. Opt in online www.cii.co.uk/amend Opt in by email customer.service@cii.co.uk Opt in by phone +44 (0)20 8989 8464 Please ensure you have your CII PIN to hand. To ďŹ nd out more about local institutes visit: www.cii.co.uk/localinstitutes
CII Local Institutes
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Say yes
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PRESIDENT'S LETTER INGA BEALE
LEADING BY DOING In her last president’s letter, Inga Beale reflects on a year of action that has seen great progress on diversity and creating a strong link with the Lloyd’s market
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ow quickly a year flies by. When I agreed to be president of the CII, I had no idea how rewarding the role would be – and looking back I am very glad I decided to take on the position. During the past 12 months as president, I have travelled the country – everywhere from Birmingham and Leeds to Kent and Cardiff – visiting the various CII institutes and seeing first-hand the tremendous work you are carrying out to promote insurance as the important sector we all know it is. I have been incredibly impressed by all the hard work the CII carries out – often unpaid, often unheralded – and meeting all of you has given me great comfort that the future of our profession is in safe hands.
A YEAR OF ACTION One of the maxims I try to live by as a leader is to “lead by doing”. We are all guilty at times of spending too much time talking about what we are going to do,
less time on actually doing it. That’s why, throughout my tenure as Lloyd’s CEO, I have worked hard at promoting action on diversity and new talent throughout our market. This is the right time – and perhaps our last chance – to push forward on these intertwined agendas. Given the pressures on the insurance sector at the moment, we can ill afford to miss out on recruiting our future workforce by not casting the net widely enough. With the CII also working on promoting diversity and new talent, I feel like the past year has certainly been one of action. When I took over the presidency, one of my objectives was to forge closer ties between the Lloyd’s market and the CII and I am proud we have achieved that. It feels like we are now closer together and have renewed a partnership that is a strong force for good in our sector.
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SOLID FOUNDATION Our joint challenge going forward is to build on this success and leave behind a solid foundation on which the next generation of insurance professionals and leaders can build, to ensure our sector remains relevant in an increasingly fast-changing business, risk and regulatory landscape. Personally, I hope that when I eventually look back on my insurance career I will be able to say I contributed to leaving our sector in a better place than when I first entered it all those years ago. So, as I end this, my last president’s letter, I’d like to say a big thank you to all of you for your enthusiasm, encouragement and hospitality during the past year. I’ve met some inspiring people, made some great memories and had a lot of fun. It’s a time I will never forget. I wish you all the best in your future endeavours. ●
I HAVE BEEN INCREDIBLY IMPRESSED BY ALL THE HARD WORK THE CII CARRIES OUT – OFTEN UNPAID, OFTEN UNHERALDED – AND MEETING ALL OF YOU HAS GIVEN ME GREAT COMFORT THAT THE FUTURE OF OUR PROFESSION IS IN SAFE HANDS
Dame Inga Beale ACII, President, CII
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NEWS
FROM THE CII TWITTERATI »
@InsCorpCI Thanks to @CIIGroup for sharing the news in the CII Journal! We were delighted to be awarded Chartered Insurers status earlier this year. Find out what it means... goo.gl/wN4tcR
@ S an d raK M c D o Time for @IIMPresident #Styleinthecity Party in the Paddock #fashionshow @TheMidlandQ happening thanks to the lovely sponsors @Weightmans McLarens @kempsterbowers supporting @SmartWorksGM #manchester
@ j oh n nyt i m pso n1 Colleagues inspired by the CII IWF programme to consider politics & public life, as a member of the @fawcettsociety & @5050Parliament I’m only to pleased to share this invite. #HeForShe
UNDERWRITING
CII RELEASES UNDERWRITER OF THE FUTURE REPORT
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The CII’s Underwriting Faculty, along with Oliver Wyman, has published its latest Underwriter of the Future report. Released six years after the first report was published, the study reviews how the projections from 2012 actually played out now we have passed the halfway point of the journey to 2022 – what has played out as expected, what is new and what this means for the insurance executives and underwriters of today. The report is a barometer of what has happened in underwriting and what the future may look like. The key findings from the report include: ● The changing distribution in SME insurance – progress towards direct and online distribution for micro and small risks; ● Changing customer demands – customers will demand more price transparency,
faster turnaround times and lower cost, forcing insurers to significantly re-engineer their service proposition and operating model; ● Pressure on the supply – ongoing abundance of capital continuing to put the traditional industry under major cost and competitive pressure. Matthew Connell, director of policy and public affairs at the CII, said: “This excellent piece of research shows the different strategies open to insurers and how this can affect demand for skills. It is a useful guide for people planning their training and development and provides invaluable market context for professionals shaping their careers. As a profession, we need to be looking at the changes affecting our sector to continue being relevant to the needs of
our consumers and clients.” Read the full Underwriter of the Future article on page 20.
CHARTERED
KAYLEIGH LEATHERDALE NAMED WINNER OF THE YOUNG BROKER OF THE YEAR AWARD The British Insurance Brokers’ Association (BIBA) has named Kayleigh Leatherdale, from Aon, as its national Young Broker of the Year for 2018. Katie Freemantle, of Ruskin Squar,e and Jessica Wonnacott, of Isca Barum Insurance Brokers, were named as national finalists for the award, which recognises the performance of younger brokers and encourages commitment to the future professionalism of insurance broking. Since joining the sector in 2014, Ms Leatherdale has seen her career develop as well as becoming an essential part of the team at Aon.
Ms Leatherdale with Steve Jenkins of the CII and Graeme Trudgill of BIBA
The award was presented at the BIBA Conference 2018 by Inga Beale DBE, CEO of Lloyd’s and president of the Chartered Insurance Institute. BIBA chairman Lord Hunt of Wirral said: “Kayleigh is a truly impressive candidate and a deserving winner of the young broker award. She has stood out above others for her drive and ambition, she has demonstrated exceptional service to her clients and she has built strong relationships with both her clients and colleagues. It is highly likely that with this potential, Kayleigh has a very successful future ahead.”
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NEWS @ bristo l pa t Another @CIIGroup exam passed today. The biggest challenge was answering 50 questions in 60 minutes. Now I have more free time to watch England win the World Cup!
@Jo Wa l ke r L D N Great to have Jane Portas from @PwC join our Gender Agenda Network to speak with us about insuring women’s futures and securing the financial future of the next generation. Some eye opening stats and a thought provoking presentation. #MomentsThatMatter @CIIGroup
@ i an t s i m on s Great to see @rosaltmann backing @HearstUK #financiallyfabulous campaign. “Women need to demand to be spoken to in their language”. “Make pensions and saving sexy!”
#CIIGroup Twitter
15,106 Followers and counting...
BIBA 2018
CII AT BIBA 2018 The British Insurance Brokers’ Association (BIBA) exhibition – held recently in Manchester – is where thousands of delegates from the sector come to create new working relationships and extend their knowledge of what is happening across the profession. The CII enjoyed a hugely successful conference, focusing on: the insurance broking community, educating and informing brokers about the role of the CII; the value and benefits of apprenticeships, including the launch of our new Aspire
programme; and offering guidance on the Insurance Distribution Directive – a new regulation coming into force from October 2018. This all revolved around the CII’s ‘Classroom to Boardroom’ theme and the stand included an anti-gravity room where more than 500 visitors came and had their photo taken during the two-day event. The CII also hosted its annual pre-BIBA drinks reception at the Principal Hotel, where CEO Sian Fisher and CII president Dame Inga Beale welcomed guests and delegates for an evening of networking, food and themed cocktails. Read our report on the BIBA ‘Hackathon’ on page 32.
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TA L E N T
APPLICATIONS OPEN FOR NEW GENERATION PROGRAMME 2018/2019 The CII is calling for future leaders in claims, underwriting, broking and the London market to apply to take part in the 2018/2019 New Generation Programme. Ten rising stars from each of these areas will be selected to benefit from increased exposure to market issues and the opportunity to make their mark on their chosen profession. Applications for the 2018/2019 New Generation programme are open until 10 August 2018. Designed to complement existing company talent programmes, the year-long programme will provide group members with a range of learning opportunities, including: ● An interactive session with key personnel from the Financial Conduct Authority; ● Talks from members of parliament and
and complete a project or initiative that it believes could make a difference to the insurance profession. Each group will also have to present their project to the board at the beginning and end of the project. Typically taking about six months to complete and involving collaboration among group members across the country, these projects are both challenging Last year’s award winning New Gen Group and rewarding. In addition to this, the programme includes several informal lobbying organisations in the insurance networking opportunities. sector, and a tour of the Houses of To discuss any aspect of the programme Parliament; in more detail please contact the CII ● Training on subjects such as leadership via newgeneration@cii.co.uk or and handling the media. 020 7417 4438. Each group will also be asked to identify
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NEWS
PUBLIC TRUST INDEX
CII REPORT FINDINGS ON BUILDING CONSUMER TRUST
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The insurance-buying public is fed up with new customers getting cheaper premiums at renewal but is still confident their claims will be settled quickly, according to a new report from the CII. The CII has launched its new Public Trust in Insurance Barometer, which has been designed to measure consumer confidence in insurance. The Barometer reveals where people are confident in the insurance profession and areas for improvement, and is based on detailed research among
consumers, SMEs, insurers, regulators and public bodies. The report finds that consumers are most frustrated by new customers being offered cheaper premiums than existing customers, but that those who have claimed on their insurance have been pleased with their insurer’s performance. When it comes to buying insurance, consumers believe the most important area is to have a good relationship with the insurer (62%), that their loyalty is rewarded (58%) and that they have sufficient protection in the product (57%). Yet, research among those buying insurance shows insurers perform poorly in terms of loyalty, with only 37% of consumers believing insurers are loyal and 38% feeling they have a relationship with them. The research revealed that price is relatively unimportant to consumers when buying insurance, however the fact that a new customer can get a cheaper price than an existing customer is a key concern and is destroying trust in insurance. Read our article on the CII Public Trust report on page 16.
Current discussions include: CII LinkedIn Group ciigroup@linkedin
43,854
GAMBLING ACT 2005 Can anyone please clarify the impact of the Gambling Act 2005 on the timing of insurable interest in GI (non-marine, non-life) insurance. → bit.ly/2lzEwLJ
LOCAL INSTITUTES
SOUTH OF ENGLAND GOLF COMPETITION The annual competition between the golf societies of Guildford, Reading, Southampton and Sussex and a team representing the former Institute of Portsmouth, took place recently. The event was hosted by Portsmouth, who successfully defended the Hicks Bowl – first played for in 1932 between Reading and Southampton – during the afternoon. Runners-up were Southampton, who also successfully defended the South of England Cup during the morning competition. A raffle raised £225 for The Insurance Charities. Next year’s event will be hosted by the Sussex Institute.
CLAIMS MADE GENERAL LIABILITY POLICIES Policy from 2010 an incident happens and is notified in 2010. In 2017, the claim is settled and paid, but which policy does the claim get paid against and pre-2017, how would an underwriter rate this risk? → bit.ly/2tAsOUs
CERT CII I’m looking to begin my Cert CII Qualification through the CII. Can anyone advise me if the Cert CII Qualification is also recognised as a qualification in Ireland and which subjects that make up the Cert CII Qualification. → bit.ly/2tDFUR6
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NEWS
LEARNING
CII FUTURE OF BROKING WEBINARS The CII has produced a series of four 20-minute webinars based on the report, The Future of Commercial Insurance Broking, presented by Konselio and PKF Littlejohn. Each uses material from the report and the research behind it, to explore how the commercial insurance broking market and the role of the individual brokers within it has changed during the past 10 years – and how it could evolve to 2028. The challenges of the current landscape are outlined, along with potential solutions and likely outcomes as insurance moves into the digital world. The worth of brokers in the
value chain is discussed along with potential methods for brokers to futureproof their career and improve the quality of client relationships. By watching these webinars, members will be able to demonstrate an understanding of the drivers of change to the client/broker relationship so that brokers can make changes to their own approach to clients; the current technology landscape for brokers and how brokers can make informed technology decisions; and how the broker business model will change as a result of greater commoditisation and specialism. To access the webinars, visit: bit.ly/2tt9zfz
HONOURS
BARBARA SCHÖNHOFER AWARDED MBE Barbara Schönhofer, founder of Insurance Supper Club (ISC) and supporter of the CII Insuring Women’s Futures (IWF) campaign, has been awarded an MBE in the Queen’s 2018 Birthday Honours List, in recognition for her services to women in business. Throughout her career, Ms Schönhofer has sought to develop women to take on senior leadership roles, particularly in the insurance sector. She founded the ISC, a business
network for women in insurance, and led the Women in Risk pillar of the CII’s IWF programme, as well as helping to establish the Independent Women in Insurance Network. Sian Fisher, CEO of the CII, said: “Barbara has mentored an entire generation of leaders across the insurance sector. Through her encouragement and experience, she has led firms to look beyond the traditional backgrounds for those who take senior roles, helping to make our sector more diverse. While we still have a long way to go, Barbara will always be considered one of the true pioneers of greater diversity and inclusion in insurance.”
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THE CII HAS NOW LAUNCHED ITS OFFICIAL INSTAGRAM AND FACEBOOK SITES! You can find them here...
facebook.com/CharteredInsuranceInstitute instagram.com/chartered_insurance_institute Follow us now and keep a lookout for lots of new content from around the CII.
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KNOWLEDGE SERVICES
OLD, NEW, BORROWABLE, AND BLUE
In this month’s column, we explain why there’s something for every member in our eBook and print collections
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This month, we would like to share some updates on our growing collection of eBooks and books available to members, as well as the library book sale.
NEW BOOKS AND EBOOKS The following titles have recently been added to the specialist collection of eBooks available to members only to read online or download: the ever-popular Accounting for Non-Accountants; Future work; Risk management, strategic thinking and leadership; Summary, the key concepts in Robert S. Kaplan’s The balanced scorecard; and Winning client trust: the Retail Distribution Review and the UK financial services industry’s battle for its clients’ hearts and minds. Newly published titles added to our print collection include Booth and Schwarz: residence, domicile and UK taxation (20th edition); Claims handling law and practice: a practitioner’s guide; the newly updated edition of Management by David Boddy; The lexicon of reinsurance terminology; Tolley’s yellow tax handbook 20189; and Words of wisdom from women to watch: career reflections from leaders in the commercial insurance industry. Copies of book chapters from these and the many other resources in our print collections are available by email to all Chartered Insurance
Institute (CII) and Personal Finance Society (PFS) members. In addition, members located within Europe may wish to take advantage of our lending service. Access our entire collection of books, eBooks, full-text and print journals, reports, and other resources instantly via Discovery, the online entry and search point available to members only at: www.cii.co.uk/knowledge To request a copy of a chapter, journal article, or an in-person or postal book loan, please email knowledge@cii.co.uk
LIBRARY BOOK SALE The library book sale has met with such huge success that it has been extended. Hundreds of books have gone to members throughout the UK, as well as to Europe, Pakistan and beyond. Many more titles have been added to the sale in the past few weeks but do not delay; we are not expecting these to hang around for long! All proceeds from the sale will be used to purchase eBooks to add to the online collection, which is accessible to all CII/PFS members everywhere via Discovery at www.cii.co.uk/ knowledge The updated sale list and details of how to purchase books and postage are available on our website at: bit.ly/2Ip5AWZ
ISTOCK
Knowledge Services curates technical, professional, market and other specialist information on the members website, as well as the CII’s e-library and print collections – resources to support and inform CII members working in the industry and those undertaking professional qualifications. To contact Knowledge Services, please email knowledge@cii.co.uk or visit www.cii.co.uk/knowledge for more information.
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I N T E R N AT I O N A L N E W S
EAST ASIAN
SINGAPORE
INSURANCE CONGRESS 2018
YOUNG INSURANCE LEADERS EVENT
In May, the Chartered Insurance Institute Hong Kong (CIIHK) participated in the 29th East Asian Insurance Congress 2018 in Manila, with the theme of ‘Managing
Disruptions, Driving Change’, sharing the event alongside the Insurance Institute of Asia and the Pacific (IIAP), and Asia Pacific College. The East Asian Insurance Congress (EAIC) was founded in 1962, with the purpose of further developing international collaboration in the field of insurance of any sort. The conferences are held every two years in participating cities of the EAIC. The event was a great opportunity to meet business partners from across the region and further talks with IIAP as well as enhance the CIIHK’s collaboration with IIAP, promoting professionalism across the insurance industry in Philippines through Chartered Insurance Institute membership and qualifications.
NIGERIA
CIIHK HOST NIGERIAN EXECUTIVES AT EVENT The Chartered Insurance Institute Hong Kong (CIIHK) hosted 24 executives from Nigeria, organised by The Chartered Insurance Institute of Nigeria (CIIN), in May. The CIIHK gave a presentation to the delegates, including an overview of the Chartered Insurance Institute in Hong Kong, and invited guest speaker, FCII trainer David Herratt, to give a presentation on ‘Insurance Penetration and Hong Kong Experiences’. The CIIN also gave a presentation on the Nigerian insurance profession, sharing insights and knowledge about the challenges and successes of the current market. This was followed by an award ceremony presented by the CIIN
The Singapore College of Insurance (SCI) held a Young Insurance Leaders event in May, where CII regional corporate development director, Helen Roberts, gave a talk on ‘New Talent – A critical ingredient for the future success of the insurance industry’. The SCI is a not-for-profit professional training and education body. As part of its international outlook, the SCI has formed productive partnerships with a number of recognised and respected overseas bodies, including the CII, and as a professional body, the SCI is also dedicated to building public trust for the insurance. The event also highlighted the recent CII Insuring Women’s Futures report, Moments that Matter. Speakers on the day included Perry Tan, head of technical training, SCI; Cassandra Lee, underwriting manager, financial lines, Berkley Insurance Asia; Alex Chan, broking director, Ikatan, Asia Pacific Reinsurance Brokers Pte; Tan Siew Choo, senior underwriter, construction, XL Catlin; and Dr Patrick Tan, adjunct faculty, Singapore Management University.
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and an opportunity for delegates to network.
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REGIONAL NEWS
14 AUGUST
ARTIFICIAL INTELLIGENCE & MACHINE LEARNING → 1:00 pm – 2:00 pm The Insurance Institute of Leeds www.cii.co.uk/leeds
15 AUGUST
NEGOTIATION SKILLS → 12:00pm-2:00pm The Insurance Institute of Newcastle Upon Tyne www.cii.co.uk/newcastle
15 AUGUST
INSURANCE DISTRIBUTION DIRECTIVE → Time TBC The Insurance Institute of Cardiff www.cii.co.uk/cardiff
YOUNG MEMBERS WEST MIDLANDS
LONDON SUPPORTS HOMELESS CHARITY
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The London Young Members Committee hosted its annual quiz in April at the Steam Bar & Restaurant. Some 22 teams joined quizmaster Jon Hancock, performance management director at Lloyd’s, for this sold-out event, to raise much-needed funds for homeless charity The 999 Club and compete for the title of ‘IIL YMC Charity Quiz Winner 2018’. More than £3,600 was raised on the evening for the homeless charity, nominated by committee member Sara Baker from Marsh. The 999 Club provides a warm and welcoming environment to
anyone that is homeless and helps equip them with the ability and confidence to learn new skills, find work and reconnect with family and friends. Congratulations to the
winning team, ‘Risky Quizness’, comprising: James Bardsley, Kennedys; Emily Dyson, Mayer Brown; Ben Sanders, Mayer Brown; Logan Perry, Munich Re; Alys Jones, Mayer Brown; and Simon Wilson, Lloyd’s. Full details of future London Young Members Committee events can be found at: www.iilondon.co.uk If you would like to find out further information or get involved in the activities of the London Young Members Committee, please contact: Gemma Warren: gemma.warren@cii.co.uk or 020 7397 3912
REGIONAL
DIVERSITY – REGIONAL DIVE IN EVENTS Dive In is helping insurance get fit for the future, highlighting the business case for diverse and inclusive workplaces and providing practical ideas and inspiration for how to bring about positive change. The CII will be hosting several Dive In events in conjunction with local institutes across the UK, including Birmingham, Manchester and Glasgow.
● Birmingham – 11 July 2018
– with guest speaker Anne Dickins ● Manchester – 26 September 2018 – with guest speaker Keegan Hirst ● Glasgow – 27 September 2018 – with guest speaker Megan Giglia The events will give members an overview of some of the positive work being rolled out by the CII and the local institute
network. Booking for all events will have opened at the start of June – check out individual websites for more information.
INSURANCE INSTITUTES AWARDS 2018
After a successful 2017 awards evening, the 2018 West Midlands Insurance Institutes Awards is returning to its popular awards luncheon format for 2018. The long-running regional celebration will take place on the afternoon of Friday 28 September 2018 at MPW in The Cube, Birmingham. Applications are invited now for the ceremony, which recognises professionalism, reputation, innovation and ethical practice. The awards categories provide opportunity for all disciplines across the profession in the west Midlands to celebrate their achievements. The awards up for grabs are: ● Broker of the Year ● Financial Planner of the year ● Insurer/Underwriter of the Year ● Community Award ● Training initiative of the Year ● Claims Initiative / Service Provider of the Year ● Local Achievement Award → For more details on how to enter and sponsorship opportunities, please visit: cii.co.uk/birmingham
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REGIONAL NEWS
17 AUGUST
R04 REVISION DAY → 9:30am – 4:00pm The insurance Institute of Manchester www.cii.co.uk/manchester
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SEPTEMBER
CII EXAMINATION TECHNIQUES → 9:30am – 12:30pm The Insurance Institute of Bristol www.cii.co.uk/bristol
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SEPTEMBER
PENSION INCOME OPTIONS → 9:00am – 4:45pm The North Downs Insurance Institute www.cii.co.uk/northdowns
NOTTINGHAM
InsurED 2018 Nottingham Insurance Institute’s flagship education conference, InsurED, welcomed upwards of 130 delegates on 23 May. The established one-day conference featured speakers and presentations from a range of disciplines – from technical and general, to soft skills – with workshops available for delegates to choose from throughout the day, and providing an impressive 20 continuous professional development (CPD) sessions in one place in one day. CII CEO, Sian Fisher, was the keynote speaker this year, updating the packed exhibition hall on the latest developments in the CII’s Strategic Manifesto. Nottingham Insurance Institute president Juliet Williams said: “It was really pleasing to welcome so many delegates once again and to see their enthusiasm for the sessions we had arranged. We were also delighted that Sian was able to support the event.
CIIEdinburgh @CIIEdinburgh Have you entered your team for our Annual Quiz night yet? Still plenty time to do so! details can be found on our website
“Sessions such as ‘Impact and outcomes of the Grenfell fire tragedy’ and ‘Terrorism and political violence insurance’ were popular, as were the more staple sessions on business interruption, global investment and IDD. The sessions on stress in the workplace were very interesting and educational. “I would also like to thank all the sponsors and exhibitors whose support made the event possible.” → For images from InsurEd 2018 please visit: www.cii.co.uk/nottingham
MID-KENT
ACADEMY ENDS ON A HIGH The Mid-Kent Institute launched its Young Professionals Academy last year, to provide a series of continuous professional development sessions aimed exclusively at newer entrants into the market. More than 25 members signed up to the programme, which focused predominantly on soft skills covering: concise time management, influencing skills, emotional intelligence, LinkedIn, client retention and a CEO
Reading Institute @CIIReading At Covea Learning at Work event this morning, bringing the CII/local institute perspective on support learning, CPD options and study
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Newcastle CII @NewcastleCII Five-a-Side Football Competition – Monday 9 July 2018. For more information and to register your team, check out our website
IRELAND
BELFAST V DUBLIN MATCH pathway to success with Peter Blanc, CEO of Aston Scott. The programme ended on a high with a presentation by Sian Fisher, CII CEO, followed by a tour of the CII head office, Lloyd’s of London and, of course, the all-important wine bar! → Keep an eye on cii.co.uk/ midkent for details of the 2018 Young Professionals Academy.
The annual Belfast v Dublin rugby match took place on Friday 9 March at Wanderers RFC in Dublin, with Belfast/Dublin combined winning 35 – 15. This is the oldest fixture outside of the main international between Ireland and Scotland, with
this year’s game being the 86th in the game’s history.
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T H E I N T E RV I E W: J O N AT H A N E VA N S
EVANS
Education
Political career
Interests
Mr Evans attended the College of Law (Guildford and London) and is a solicitor of Supreme Court.
He spent 10 years as an MEP for Wales, before returning to the House of Commons as MP for Cardiff North for five years.
Mr Evans has a passion for rugby union, but also loves classical music and was even vice-chairman of the All-Party Parliamentary Group on Classical Music.
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ith the insurance market facing considerable change during the next few years, Jonathan Evans’ background in insurance, law and politics makes him the ideal person to take on the role of non-executive director at the British Insurance Brokers’ Association (BIBA). Steering the sector through upheaval is nothing new to Mr Evans. After 18 years as a solicitor, he was elected as an MP in the 1992 general election. Once there, circumstances meant he did not have to wait long before he took up the position of Corporate Affairs Minister at the Department of Trade and Industry. “The lobbying scandal surrounding my predecessor Neil Hamilton meant the government was keen to find a minister with a background in law and no questions to answer,” he explains. “I’d only been an MP for two and a half years.” In this role he dealt with the restructuring of Lloyd’s of London, signing off the Reconstruction and Renewal Plan that transferred past liabilities to run-off reinsurance company Equitas in 1996. Once again, circumstances meant that Mr Evans found himself taking on more responsibility than would normally be expected. “I started working on this alongside the Secretary of State for Trade and Industry, Michael Heseltine, but he was replaced by Ian Lang in 1995,” he recalls. “As a Lloyd’s name, he was excluded from this work so I found myself having to report to the Prime Minister on a fortnightly basis.” When he lost his seat in 1997, he built on this experience, taking up the role of director of insurance at Eversheds but also being elected to the European Parliament, becoming group chairman of life insurance consolidator Pearl and serving on the boards of insurance companies.
CHURCHILLIAN GOALS Now at BIBA, there is a range of matters he is particularly keen to promote, with access to insurance high on his agenda. “Insurance is a very positive thing so ease of access is important,” he says. “Churchill said he’d like to write the word insure on the door of every cottage and we do need to continue with this sentiment.” As examples of where access issues have been addressed, he points to Flood Re and also the proposed extension
of Pool Re to cover non-damage business interruption. “New risks are always coming along and we need to make sure appropriate insurance is available and that people are signposted to it,” he explains. “BIBA’s Find a Broker service is well regarded by MPs but we do need to regularly remind them of it.” Mr Evans is also keen to promote skills and standards across the insurance sector, having seen the huge value this brings to individuals, insurers and the public. “I spent a decade on the board of NFU Mutual and the company strongly believed that a significant proportion of employees should hold CII qualifications,” he explains. “The industry’s reputation can only be enhanced by pushing forward with this – problems generally stem from failings in standards.”
EDUCATION FOCUS As well as safeguarding the public, Mr Evans is a firm believer in the fact that investing in continuing education leads to greater job satisfaction and encourages young professionals into the sector. The benefit of attracting new insurance talent is something he first experienced when he was re-elected to the House of Commons between 2010 and 2015 and was responsible for hosting the annual reception of the CII’s New Generation programme in parliament. “It was hugely fulfilling and really refreshing to see their approach,” he says. “There are huge opportunities for innovation in the insurance industry and, once these young people have developed their skills, this is where it will come from.”
REGULATION REASSURANCE His background working on insurance regulation also means he has strong, but reassuring, views on this. “You have to go back to first principles,” he says. “Regulation is there to protect someone, be it a consumer or an investor. If it’s regulation for regulation’s sake, then it serves no purpose at all.” Given this, he’s an advocate for risk-based regulation, with the level of compliance appropriate to the potential risk a company presents. “The potential risk from a small company can be negligible but they often face exactly the same regulation as a larger company,” he adds, pointing to the Senior Managers and Certification Regime as an example. “We do need to protect consumers but this has to be done with an appropriate level of regulation.” As the insurance sector prepares itself for a potential period of upheaval as the UK leaves the EU, having Mr Evans’ experience to hand will help to ensure a fair outcome for those in the insurance sector. ●
PHOTOGRAPHY: SIMON RIDGEWAY UMP
JONATHAN
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REGULATION IS THERE TO PROTECT SOMEONE, BE IT A CONSUMER OR AN INVESTOR. IF IT’S REGULATION FOR REGULATION’S SAKE, THEN IT SERVES NO PURPOSE AT ALL
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EVANS ABOVE After a career in law and politics, Jonathan Evans has taken a senior role at BIBA. Here, he talks about his goals for the insurance sector…
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H O T T OHP OI CT : TPOUPBI LC I C– TMROUTSOTR I N D E X
ILLUSTRATION: CATHERINE PAPE
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H O T T OHP OI CT : TPOUPBI LC I C– TMROUTSOTR I N D E X
HOT TOPIC
IT’S TIME WE MEASURED
‘TRUST’ The new Public Trust Index from the CII examines how trust in insurance can be measured for the benefit of members and the wider public
S
ince 1912 the CII’s Royal Charter has obliged us as the major professional body for insurance to build public trust. Fast forward over a century and the publication of the Strategic manifesto - the ‘Road to 2021’, has renewed the CII’s commitment to supporting members to rise to the challenges and seize the opportunities of the future based on building trust. We have gone about fulfilling this promise by undertaking research to answer what is actually meant when we, as a professional body, refer to ‘trust’ in insurance, and how exactly this trust can be measured for the benefit of CII members and the wider public, both now and in the future.
THE RESEARCH We firstly commissioned academic Katherine Hawley from the University
of St Andrews to reach a practical working definition of trust, and to clarify what we mean by the simple words often used interchangeably to describe this relationship. Professor Hawley describes trust as the product of two ingredients: competence and ‘basic good will’. In our context, the more technically competent or qualified an insurance professional is, the greater the expectation that that individual will behave in an ethical manner. Competence can otherwise be a double-edged sword, as without a moral underpinning it can be used to the detriment rather than for the benefit of the customer. This is where the boundary between services provided by a professional and other services lies, as with the former something happens because the person who’s responsible for making it happen has a moral commitment to doing so. Professionals have to bring an element of good will and ethical behaviour to the table to achieve a level of trust. But what is the meaning of ‘trust’ to consumers, and does this differ from what
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it means to the insurance profession? Is it a word that consumers would necessarily use to articulate the sorts of relationships they have or want to have with the organisations they deal with? To explore the world of the consumer, we conducted 40 telephone interviews - 20 customers with who have travel, buildings &contents, motor and/or employers liability insurance, in additon to 20 small businesses. As part of the interviews, the participants were asked to film short videos of themselves to reveal what matters to them in their daily lives. Through finding out about their life story, we were able to contextualise what it is that makes insurance products relevant and important, and what really matters to them in the process of buying or claiming. These same participants were then asked to reflect on their insurance experiences in order to consider what the profession could do differently to better support their lives.
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H O T T OHP OI CT : TPOUPBI LC I C– TMROUTSOTR I N D E X
‘BUILDING BLOCKS’ TO BUILD TRUST 9 key themes or ‘building blocks of trust’ emerged from the language the consumers themselves used in the video blogs - 6 relating to buying and holding insurance, and three associated with claims.
main findings further at a high-level roundtable with senior practitioners across the CII membership. The insights we gained are fascinating. The ‘Overall themes for consumers’ graph highlights how at present, ‘Loyalty’ and ‘Relationship - my insurer cares about me during the policy term’ stand out as the themes where the
BUILDING BLOCKS OF TRUSTS – BUYING & HOLDING Confidence – Certainty that my insurer will look after me
OVERALL THEMES FOR CONSUMERS Loyalty is the key opportunity, with customers feeling that they are forced to switch providers every year or face being ripped off
Price – Getting the best value for my situation
10
8
Protection – Looking after what matters most to me
18
Ease
7
Performance
Relationship – My insurer cares about me during the policy term
Over Served
9
Loyalty – My loyalty is recognised
Ease – It’s easy for me to get the protection I need
performance of the profession is poorest. Our analysis is consistent with the renewed attention that has been dedicated to the treatment of existing customers in the FCA Business Plan for 2018-19, and how from the perspective of the regulator, competition in a market - if working well - should not
BUILDING BLOCKS OF TRUST – CLAIMS
Respect (claims) Control (claims)
6
Speed (claims) Confidence
Maintain
5
Protection
Price
4 Relationship
3
Loyalty
Improve
2 1
Speed – Getting me back on my feet quickly
Urgent Action
0 0
1
2
3
4
Respect – Treat me as a fellow human being and not as a potential fraudster
6
7
8
9
10
Importance
Control – I have a meaningful say how my claim is settled
TOP FIVE OPPORTUNITES FOR CONSUMERS Overall the biggest opportunities show that customers want to stay with the same insurer, but don't believe that heir insurer recognises or values their loyalty 10 9
Over Served
8
The policy is explained clearly
7 6
Performance
These themes and opportunity statements were then tested in an online pilot consumer survey of 500 consumers and 500 small businesses, which was then followed by a wider survey of 2000 general insurance customers and 1000 small businesses from a nationally representative sample. This allowed us to capture the relative level of importance that customers attached to each theme and opportunity statement against their perception of insurer performance, and reach an ‘opportunity score’ for each. In order to achieve a balance of perspectives we also sought the views of senior insurance executives across the market as well as from the regulator through 10 in-depth ‘reality check’ interviews, and discussed some of the
5
5
Maintain I understand any discounts or no claim bonus
4
Discount for staying with the same company
3 2
Improve Provider matches a cheaper price
1
Premium doesn't increase because I'm not a new customer
Urgent Action
0 0
1
2
3
4
5
6
7
8
9
10
Importance
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H O T T OHP OI CT : TPOUPBI LC I C– TMROUTSOTR I N D E X
overly disadvantage existing customers over new ones. Despite the influence of consumer groups and wider regulatory pressures encouraging the use of price comparison websites to keep insurance companies ‘on their toes’, our research demonstrates that price in fact is not as important to consumers as one might assume, and an over-fixation on price (rather than value) has gone some way to erode the insurer-consumer relationship. Consumers want to stay with the same insurer, but don’t believe their insurer does enough to recognise or value their loyalty. On the contrary, many feel as though their loyalty is being punished or exploited. So according to our research it is the effectiveness with which the profession tackles the broken system of dual pricing - the policy of charging excessive differences between new customer premium pricess and that at renewal for long standing nding customers - where the biggest gest opportunity to build trust in insurance urance lies at present. It is up to insurers to o recognise and reciprocate their customer’s tomer’s loyalty for relationships to feel genuine. nuine.
CLAIMS – A SUCCESS STORY There are also areas of importance tance to the customer where insurerss are performing well which deserve rve recognition. The profession rises to o the different challenges posed by what to the customer is the ‘moment of truth’, ’, to pay out on a claim when conditions of a policy have been met. The conundrum inherent in the very nature of insurance is that it is those who have been through the claims process that have a more favourable opinion of their insurer - yet the majority of the public do not have personal experience of reaching this stage where insurers are able to evidence their competence. Insurance products are rarely ‘used’ in the way that retail banking is used for example, so it must be remembered that the main interaction consumers have with insurance providers is one-way: paying for a mostly invisible benefit. Opinions are instead often informed by damaging experiences at renewal, which is where the insurance
‘experience’ is currently weakest in the eyes of consumer. This significant group within society - the consumers of insurance products that haven’t claimed on a policy -offer another clear opportunity to build trust.
CREATIVITY PAYS OFF The theme of ‘Relationship’ is considered an area where insurance providers do not match customer expectations, and yet according to our analysis there is no desire on the part of the customer to become best friends with their insurer, so achieving the level of brand identification that other retail sectors might enjoy is unlikely.
IT IS UP TO INSURERS TO RECOGNISE AND RECIPROCATE THEIR CUSTOMERS’ LOYALTY FOR RELATIONSHIPS TO FEEL GENUINE
This in part explains why consumers do not consider ‘Relationship’ to be as important when compared with other themes, but ‘Confidence’ or a certainty that they are covered for what they really seek and know extras will be beneficial to their needs – or in other words, to have the peace of mind that they are paying for a service provided by professionals, is indeed critical.
Consumers desire information from their insurer that provides them with an additional sense of safety and security - which doesn’t have a price - on top of the policy they have bought, as well as guidance on how to avoid losing what is considered irreplaceable. This is where creativity on the part of the provider can really pay off in building trust, and why product innovations such as the use of telematics in providing instant feedback to improve driver behaviour and therefore lower premiums are becoming increasingly popular, and help combat the perception that insurers are only acting in self-interest.
NO ‘ONE OFF’ The CII’s Public Trust Index is not going to be a one-off project that disappears after generating a few headlines. As we have committed to conducting this research on an annual basis, its real value will emerge when we are able to demonstrate how the response of the profession to the key opportunities to build trust has improved customer sentiment, and im how these opportunities shift year on year. We will be talking to members year over the th next few months about how they mig might be able to use the insights we have co collected to align themselves much more closely around customers by focusing ef efforts and investment on improving th the experience in the areas where iit matters to them. This is a nuanced conversation with the public nu too, involving an acknowledgement of where the profession is performing well, as in the case of the ease with which an insurance products can now be transacted. But at present there is clearly a necessity for insurers to review this structural focus on price, rather than value, that has resulted in the unintended consequence of punishing customer loyalty. This voluntary action would be more powerful than any new directive from a regulatory body, but firms will not be able to do this on their own. Trust can only be built together through galvanising a united profession, and as the sector’s major professional body in the public interest the CII is ideally placed to lead this initiative. ●
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THE UNDERWRITER OF THE FUTURE
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edia buzz about change and disruption in insurance usually focuses on insurtech and personal lines, with commercial lines insurance perceived as more traditional and staid. However, important transformation is underway across the commercial insurance world. From the small and microbusiness world, up to the large corporate and wholesale level, change is being fuelled by digital automation, new forms of competition and new forms of risk.
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CYBERBACKED WRITER As the CII publishes a new report on the subject, Arthur White looks at the underwriter of the future in an age of disruption thejournal.cii.co.uk / The Journal / June - July 2018
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THE UNDERWRITER OF THE FUTURE
STATE OF PLAY IN 2018
Disruption is already high on the agenda in most boardrooms, with all sectors starting to feel the implications of factors such as increased automation, continuing cost and pricing trends, and the rise of data-driven analysis. The capabilities, tools and the skills necessary to build winning business models will change and, although the role of the underwriter will not vanish, it will evolve radically. Simply put, insurers cannot afford to stand still. In 2012, the CII partnered with global management consultancy Oliver Wyman to publish a report: The Underwriter of the Future: Secrets to Commercial Success. This study painted a picture of what the UK’s commercial insurance market might look like in 2022. This year, 2018, passes the halfway milestone of that first study, so our recently published report The Underwriter of the Future: Understanding Rapid Transformation on the Road to 2027, takes stock of the current market. It looks at which predictions played out as expected and where there have been new developments, asking what this means for the insurance executives and underwriters of today. It also takes a cross-country view, looking at trends in the UK and comparing and contrasting these with market experiences in Germany and the US.
In the UK, the SME market has been developing largely as forecasted. There has been notable progress towards direct and online distribution for micro and small risks. At the larger end of SME, person-to-person relationships still predominate but the economics of the traditional branch-based, manually-underwritten model continue to deteriorate. Insurers are using significantly more automated placement and model-based pricing, and broker and insurer platforms (with full end-to-end automated processing of placement) are gaining share. All these trends will go further during the next 10 years. Customers will demand more price transparency, faster turnaround times and lower costs – forcing insurers to significantly re-engineer their service proposition and operating model. Outside the UK, similar trends are also beginning to play out in Germany and the US, meaning insurers in these markets will soon also be facing similar tough choices. In the large corporate and wholesale markets worldwide, customer needs have evolved less rapidly than was predicted in 2012. Some corporates are retaining more risks, although fewer than expected. Markets for ‘new economy’ risks, such as supply chain and cyber, have not reached their full
potential yet. However, their longerterm impact will be significant, as ‘Industry 4.0’ changes the risks companies face and how they manage them. Instead, the real pressure in large corporate and wholesale has been on the supply side, with the ongoing abundance of capital continuing to put the traditional industry under major cost and competitive pressure. The traditional broker-insurerreinsurer value chain is fragmenting, with innovative insurers showing willingness to separate capital provision from risk selection and underwriting. Likewise, some non-insurer players – such as brokers, MGAs and reinsurers – have been starting to bypass traditional primary insurers to create their own new hybrid models. Traditional insurers have been caught between the pincers of cheap capital and distributor encroachment – catalysing some major consolidation moves, alongside attempts to digitise the traditionally artisanal, decentralised approach to selecting and pricing risk.
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TECHNOLOGY IMPLICATIONS These changes in the commercial insurance sector will continue to add business and operating-model complexity. Technology in particular
EXHIBIT 1: SUMMARY: OUR PREDICTIONS FOR THE “FUTURE OF THE UNDERWRITER” IN SME WHAT WE PREDICTED LAST TIME FOR 2022
WHAT’S HAPPENED FIVE YEARS IN?
● Up to 80% of micro business
● More customer acceptance of
in direct-to-consumer channels (incl. online brokers) ● Offline brokers still prevalent in larger SME, but up to 60%–70% electronically traded and bound ● Insurers responding by – Launching direct platforms – Launching initiatives to support brokers – Becoming “an e-commerce organisation that happens to sell insurance”
online, but outside micro risk many still want some guidance – Larger SME business still via broker but “slow and steady” automation – Small number of dominant broker platforms ● Significantly more automation and STP ● Early stages of data enrichment and analytics
OUTLOOK TO 2027 ● Even more direct, online and phone offers – 90% of micro – 40%–50% in other SME ● More automation in both front & back office – 80%–90% of SME straightthrough (a few exceptions) – Still expanding into larger/more complex risks ● Hard choices for today’s insurers and brokers – Full online/phone front end? – Maintain/reduce branches? – Replace/upgrade systems?
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THE UNDERWRITER OF THE FUTURE
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will create a barrage of issues as products, customers and channel experiences evolve. Established players need to be willing to tackle the major costs and disruption required to create new platforms and propositions. At the same time, they must also undertake the unenviable task of moving away from legacy systems and distribution assets. The industry will also need to work out how to embrace the productivity and effectiveness unleashed by technology and analytics advancements. The role of the underwriter will need to be significantly enhanced by technology. This could be termed the ‘bionic’ model, combining the best of man and machine. In short, we see the future as an inseparable blend of digital technology and human capabilities. In SME, efficiency, automation and e-trading will be a prerequisite. Fortunately, it will become much simpler to acquire these capabilities through microservice-enabled software-as-a-service solutions and API-based services. These already exist today in banking and such solutions are currently being introduced in retail insurance by players like IBA or Guidewire. However, it is not enough to simply acquire capabilities. Many insurers have so far taken an incremental approach to implementing digital via a series of point solutions. This raises the very real danger that they will end up with a ‘spaghetti architecture’, which will be the next decade’s legacy IT problem. Firms therefore also need to design their new bionic architecture today. This will require agile experimentation and a very different capability from digitisation and automation. Much more in-house agile coding will also become essential.
In the large corporate world, there will be some similar moves. Some changes will be required and will not necessarily be easy, such as moving away from labour-intensive manual data collection, cleansing and analysis to ‘one-click portfolio transparency’.
be a heady mixture of statisticians, engineers and technology developers. Individual underwriters will need to adapt their skills and outlook to this radically changing world. Some may choose to see this as a threat – and it is true that some traditional underwriting roles will disappear, or at least shrink in numbers. But there will be also significant opportunities for those willing to be entrepreneurial, to learn new skills and to embrace change. ●
REMAINING COMPETITIVE In short, CEOs of established insurers and brokers face many harsh choices during the next few years. Worst case, if they do not find new ways to compete, they risk being burdened with declining volumes and high trapped costs – and with their competitive advantage slowly but steadily eroded. There are also major implications for individual underwriters and for underwriting leaders. We see far less traditional, casebased underwriting in regional offices for SMEs – but more automated, portfoliounderwritten business that may open up opportunities for those willing and able to fit into teams combining sophisticated analytical, data engineering, technological and entrepreneurial skills. In the large corporate world, there will still be demand for those able to understand, select and price complex risks – but with much more technological and analytical sophistication. There will also be significant pressure to reduce the cost and complexity of today’s fragmented and artisanal process flows. Underwriting leadership will need to work out how to source the capabilities needed, whether and how to upskill existing staff; and how to make their departments an attractive place for new kinds of talent. They will need to help underwriters be more creative and openminded in their ways of assessing, pricing and limiting risk for clients. By 2027, the best underwriting teams will
BY 2027, THE BEST UNDERWRITING TEAMS WILL BE A HEADY MIXTURE OF STATISTICIANS, ENGINEERS AND TECHNOLOGY DEVELOPERS
Arthur White is partner at Oliver Wyman
EXHIBIT2: OUR PREDICTIONS FOR THE “FUTURE OF THE UNDERWRITER” IN LARGER CORPORATE & SPECIALTY WHAT WE PREDICTED LAST TIME FOR 2022 ● More sophisticated client risk management strategies ● More technology-driven risk and pricing tools ● New holistic risk management service providers ● Client-centric coverage model, structuring solutions on whole client needs ● Building a talent pipeline of quality staff able to drive continual innovation
WHAT’S HAPPENED FIVE YEARS IN?
● ● ● ●
● New tech with complex impact on needs (eg cyber, “industry 4.0”) ● Only most sophisticated clients retaining more risk Capital as a commodity, ongoing weak pricing Cost pressure and consolidation Broker innovation Reconfiguration of the value chain (MGA, TPA, …)
OUTLOOK TO 2027 ● Proposition and platform innovation ● “Smart automation”/new operating models – cheaper, more flexible, smarter ● Modularisation/fragmentation – separating capital provision from underwriting ● Only participating where you know you have an advantage ● Hard choices for incumbents
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R E G U L ATO RY R A D A R
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FCA CONSULTS ON REGULATION OF CMCS
As the recently passed Financial Guidance and Claims Act 2018 will transfer responsibility for claims management regulation to the UK Financial Conduct Authority (FCA) on 1 April 2019, the FCA has now published a consultation paper containing draft rules for the regulation of claims management companies (CMCs). The FCA proposes to create the Claims Management: Conduct of Business Sourcebook (CMCOB), containing rules that apply specifically to CMCs. These aim to hold CMCs as trusted providers of high quality, good value services that help customers pursue legitimate claims for redress and benefit the public interest. The proposals include requiring CMCs to: ● Provide a potential customer with a short summary document containing important terms before any contract is agreed; ● Highlight any free alternatives to using the CMC; ● Record and keep all calls with customers for at least 12 months; ld itt on o trust. t ust. ● Segregate client money and hold The deadline for comments is 3 August 2018. For more information visit: bit.ly/2taaDpo
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FCA FEEDBACK STATEMENT ON CONSUMER ACCESS TO INSURANCE URANCE
The Prudential Regulation Authority (PRA) has released a ‘Dear CEO’ letter for the attention of insurance firms, observing that there are signs that some of the longerterm prudential risks associated with a soft market are now feeding through into firms’ report results. The PRA is of the view that boards may now benefit from reassessing whether their business models remain sustainable and whether controls over underwriting and reserving in specialist lines are adequate. Firms that continue to exhibit some of the weaknesses outlined in the letter are more likely to find themselves under increasing supervisory s crutiny. The PRA invites summaries of responses on the issues raised from firms by 27 July 2018. To view a copy of the letter see: bit.ly/2lmPIex
WHAT’S ON THE RADAR?
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Following an earlier call for input to decide how best to address concerns about people with pre-existing medical conditions obtaining affordable travel insurance, the FCA has published a feedback statement setting out how it will work with key industry stakeholders to create a new service which will redirect such customers to specialist providers. Themes emerging from the responses include: ● a lack of quality information on alternative options available to consumers after they had received a high quote or had been refused cover; ● a general lack of understanding among consumers around insurance terms; and ● the lack of transparency around pricing and the risk factors which drive quotes. The responses will be used to influence the FCA’s wider work on insurance pricing practices announced in the business plan for 2018/19. The statement can be viewed at: bit.ly/2tJ5rYY
PRA RELEA RELEASES A S E S ‘‘DEAR D E A R CCEO’ E O ’ LLETTER E T T E R OONN M MARKET ARKET CONDITIONS FACING SPECIALIST GENERAL INSURERS
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The CII takes a look at what’s new on the policy and public affairs front this month
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BIBA/ABI ISSUE GUIDING PRINCIPLES ON DUEL PRICING The British Insurance Broker’s Association (BIBA) and the Association of British Insurers (ABI) have teamed-up to issue a joint Guiding Principles and Action Points for General Insurance Pricing document, which seeks a commitment from firms to avoid excessive differences between new and p renewal premiums. This is intended to a apply to personal lines products with contract terms of 10 m months or longer, eexcept pet and private h health insurance. For more information vis visit: bit.ly/2jGcAVx
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CHARTERED
CHARTING A COURSE FOR
SUCCESS 24
We talk to two major composite insurers about their journeys to becoming Chartered and the value it has delivered
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hartered is all about standards and being able to evidence those standards to the outside world. Here, we talk to two major composite insurers, one with four years’ of being Chartered behind them and one with more recent experience of the process, to gain insight into the process of becoming Chartered and the value it has delivered.
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CHARTERED
Aviva achieved Chartered status in May 2014. Chris Hill, head of commercial underwriting strategy quality and change, outlines the reasons why the company took that step and the benefits it has brought:
AN ESSENTIAL ELEMENT IS THE CII PROFESSIONAL QUALIFICATION, WHICH IS AN INDUSTRYRECOGNISED ASSESSMENT OF AN INDIVIDUAL’S ALL-ROUND KNOWLEDGE AND UNDERSTANDING OF INSURANCE ISSUES
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e already had a long and established relationship with the CII but we wanted to go further and make it clear to all our staff, brokers and customers how strongly we felt as a company about the value we attach to this status. A key part of our thinking was the need to demonstrate our commitment to promoting professionalism within the industry. We wanted to make it clear to our employees, brokers and customers that we want to drive improved standards of knowledge and learning, so we could offer the best advice possible to our customers. An essential element is the CII professional qualification, which is an industry-recognised assessment of an individual’s all-round knowledge and understanding of insurance issues. As a result of obtaining Chartered status, we have seen the interest from our employees in taking the professional qualifications rise considerably. We are encouraging employees at all levels, whether they are a new starter or someone with greater length of service, to look at the benefits from achieving a professional qualification. We have introduced a number of support mechanisms to help them in their studies, including time off for revision, and in conjunction with the CII learning and development team we run internal exam study sessions to help them prepare for the compulsory modules. Chartered status isn’t just about qualifications – it is also about being an active part of your local institute and supporting local events and activities. We have a number of
employees across our key locations in Perth, London and Norwich actively getting involved. This is great to see as it helps the individual to broaden their network with like-minded people from other organisations and to represent Aviva in their local market. Two of our employees took up local CII president roles in 2017-2018 – Robert Heaton in Cambridge and Paul Roskilly in Norwich – and we were delighted to support them in undertaking their responsibilities. We know from speaking to both of them how much they enjoyed the role and how it has indirectly benefited them in their day jobs. From a business perspective, we know that our brokers also value Chartered status and a number of them are also following this path. We are confident that this is an added advantage when they recommend Aviva products and services to their clients. From a customer perspective, we feel there is still more work to be done – within Aviva we have put the customer at the heart of everything we do and being Chartered is part of that focus; it places our promise and service at the centre of our offering. We continue to work with likeminded professionals within our industry to help customers recognise its worth and appreciate the benefits of working with brokers and insurers who meet the professional level it represents. It has been a great journey for us in the last four years and a lot of work has been undertaken, but as always there is still plenty more to go for… we are really supportive of the CII Strategic Manifesto, and building customers’ trust and confidence is something we should all be striving to achieve. There is more work to do in this space and we will continue to work with and support the CII in this area.
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IMAGE: ISTOCK
DEMONSTRATING COMMITMENT TO PROFESSIONALISM
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CHARTERED
HOW GOING CHARTERED BOOSTED A STAFF DEVELOPMENT PROGRAMME Steve Lewis, UK CEO at RSA, explains his firm’s motivation in taking the Chartered route and the benefits he sees:
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t RSA, we recognise that investing in our core capabilities is fundamental to our success. As a business that strives to be ‘best in class’, we want to create expertise that our peers aspire to; putting technical competence at the heart of what we do, in underwriting, pricing and claims. This means that, as well focusing on delivering great customer outcomes, we also need to make sure our people receive the development support and training they need to maintain strong technical knowledge and to remain engaged and dynamic. Part of increasing our people’s access to learning resources was to set our sights on achieving Chartered Insurer status. We wanted to allow our people access to the resources that the CII offers, supporting existing staff in their professional development and showcasing RSA as an employer committed to investing in our people. Our journey had several stages as we looked to secure Chartered status for four areas of our business: Commercial Risk Solutions (CRS); Global Risk Solutions (GRS); the UK chief underwriting office (UK CUO); and our UK claims function, including both commercial and personal lines. The process involved a huge commitment across the business divisions, meeting a range of criteria set out by the CII – including the qualifications of our senior teams;
our commitment to training and professional qualifications; and employee membership of the CII. In demonstrating our firm commitment to an overall standard of excellence and professionalism, we honed our technical skills and capabilities – ultimately improving our service for customers and our people. We were delighted that CRS, GRS and the UK CUO achieved Chartered status in May 2017 – less than a month after we set out to do so. In February 2018, our claims function, which employs more than 1,000 people across the UK, also achieved accreditation, providing access to the training and development resources and other opportunities to our people. We believe that funding CII membership for our people is a constructive way to drive both the business and personal goals within our organisation as we drive forward with our bestin-class business objectives. We are incredibly proud to be one of the largest Chartered firms in the UK market and to be able to offer staff access to training
and development resources available through the new accreditation. This fantastic achievement demonstrated to customers and our own people the value that our business places in integrity, technical competence, business capability and customer service. It’s also a marker to those looking to do business with RSA that we prioritise strong ethics, professionalism and trust. Chartered status is an achievement that has already resonated well in conversations with brokers and customers, and something that provides a strong foundation for a wider focus within RSA on honing technical skills and capability across the organisation.”●
TIMELINE ● APRIL 2017 – RSA announces intention to achieve Chartered status ● MAY 2017 – RSA’s Commercial Risk Solutions business; Global Risk Solutions
team and the UK Chief Underwriting Office achieve Chartered status ● JANUARY 2018 – UK claims team achieves 90% employee membership of the CII ● FEBRUARY 2018 – UK claims team achieves Chartered status
thejournal.cii.co.uk / The Journal / June - July 2018
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Fast-track your study
Advanced Diploma holders are granted fast-track entry to a range of Bachelors and Masters degrees.
cii.co.uk/degreecourses CII.July18.027.indd 27
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C L I M A T EH CO HT ATNOGPEI C: P–R M O POETROTRY R I S K S
For many climate change remains a nebulous concept of what if’s and could be’s. However, for the insurance industry there are some very real ramifications, as we explore…
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WHAT DOES CLIMATE CHANGE ACTUALLY MEAN?
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limate change is one of those Marmite concepts. For years the experts have argued over whether or not it is happening, with politicians wading in every now and again. For most individuals, it is not so much a case of whether or not they believe it is happening but more a case of not worrying about something that will happen in 50 or 100 years – after all, will they be alive then? However, the insurance industry is much more focused and is beginning to consider some of the practical implications of what comes next, and how it might affect their business models.
thejournal.cii.co.uk / The Journal / June - July 2018
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C L I M A T EH OC TH ATNO GP EI C: P–R MO PO ET RO TRY R I S K S
THE 10 CITIES WITH THE HIGHEST GDP@RISK TOGETHER FACE $126.8BN IN POTENTIAL LOSSES TO ECONOMIC OUTPUT EACH YEAR. THIS IS ALMOST A QUARTER OF GLOBAL GDP@RISK AND MORE THAN THE AMOUNT OF GDP@RISK IN AFRICA, THE MIDDLE EAST AND LATIN AMERICA COMBINED. 29 The Lloyd’s City Risk Index, in collaboration with the Cambridge Centre for Risk Studies at the University of Cambridge Judge Business School, measures the impact of 22 threats on 279 cities’ projected economic output, including those associated with climate change, such as drought, flood, extreme cold and hot weather. The 2018 index, published this June, reveals that 279 cities across the world – the key engines of global economic growth with a combined gross domestic product (GDP) of $35.4trn – risk losing on average $546.5bn in economic output annually (termed ‘GDP@Risk’) from all 22 threats. Climate-related risks together account for $123.0bn of GDP@ Risk and this sum is expected to grow as extreme weather events become increasingly frequent and severe. The costliest climate events are windstorms, which account for $66.3bn of GDP@Risk and flood that puts a further $42.9bn of economic output at risk.
INVESTING IN RESILIENCE Lloyd’s chairman Bruce CarnegieBrown says: “No city will ever be completely risk-free. The index shows that investing in resilience – from physical flood defences to digital firewalls and enhanced cybersecurity, combined with insurance – will help significantly reduce the impact of extreme events on cities, improve economic stability and enhance prosperity.” Professor Daniel Ralph, academic director of the Cambridge Centre for Risk Studies, at the University of Cambridge Judge Business School, points to “the worldwide rise in geopolitical risk, driven in large part by the threat of interstate conflict and civil unrest”, adding: “We are likely to see this trend continue on a global level.” This is also a risk that the experts fear will rise as climate changes impact society. Closer to home, one of the debates that raged this winter in the UK was whether the so-called ‘Beast from the
East’ could be a sign of things to come. If so, that could herald bad news for property insurers. The Association of British Insurers reports that in the first quarter of 2018: • In total, £1.25bn was paid by insurers under domestic and commercial property insurance policies – the highest quarterly figure for two years • Insurance payouts to homeowners and businesses for storm, flood and burst pipe damage jumped to £361m, a massive 290% rise on the £93m paid in the previous quarter; some 86,000 claims were handled, compared to 29,000 in the previous quarter • £194m was paid to help homeowners cope with the misery of burst pipes; this was the highest amount ever paid in a single quarter and compared to only £4m paid out in Q4 2017 • On commercial insurance, weather damage and escape of water claims also rose, up to £188m, compared to £107m the previous quarter. →
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C L I M A T EH CO HT ATNOGPEI C: P–R M O POETROTRY R I S K S
MASSIVE RISK
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Speaking in London earlier this year, professor Sir Brian Hoskins CBE FRS, founding director and now chair of the Grantham Institute for Climate Change at Imperial College London, and professor of Meteorology at the University of Reading, highlighted the massive risk facing the planet as global warming speeds up, with the real risk of sea levels rising 1.5 metres by the end of the century. He said of the recent cold winter in the UK that scientists were watching and working hard to establish whether such extreme cold pockets are likely to be an ongoing issue. “As the planet warms up, there will be an increased capacity to hold water. If the temperatures rise 6˚C, the atmosphere can hold 50% more water,” he said. The implications of that could be extremely severe. As Professor Hoskins explained, it is not just a matter of sea levels rising but the impact on weather patterns and the chances of more extreme weather. He warned that political tensions, as well as societal tensions, are only likely to increase as parts of the world become uninhabitable. “A lot of urban conurbations are located on coastal plains,” he said, “while a 5˚C increase in temperatures might make some tropical areas unliveable too. The stresses are rising.” Speaking at the same event, Norton Rose Fulbright director Maria Philippides pointed out, for example, that in South Africa local insurers are particularly concerned about political risks around climate change. She cited the drought in Cape Town. “You have to ask what the impact would be if buildings were to be abandoned. In environments where you have poor service delivery, you will often have civil commotions and that can lead to property damage,” she said. William Miller, an associate at US law firm Pillsbury Winthrop Shaw Pittman, pointed to “volcanoes, hurricanes, and polar vortexes”, explaining: “From the eruption of the Kilauea volcano in Hawaii, to huge winter storms, massive
£1.2bn
WAS PAID IN THE FIRST QUARTER OF 2018 BY UK INSURERS UNDER DOMESTIC AND COMMERCIAL PROPERTY INSURANCE POLICIES – THE HIGHEST QUARTERLY FIGURE FOR TWO YEARS
mudslides and the unfortunately reliable hurricane season, it seems like natural disasters have been near constant in the past year.” He suggested: “When a natural disaster strikes, having appropriate levels of property damage, business interruption and contingent business interruption insurance can be three keys to stability.” Looking at property policies, he said these typically cover fire damage up to policy limits, but often include lower sub-limits, higher deductibles and other conditions on coverage for damage caused by flooding, windstorms or mudslides – or may exclude them altogether. ●
RISKS TO OUR SECTOR The Sustainable Insurance Forum (SIF) and the International Association of Insurance Supervisors have developed a draft issues paper on Climate Change Risks to the Insurance Sector. They say climate change will have significant yet highly differentiated impacts on human and environmental systems around the world, including an increasing frequency and severity of natural catastrophes. Responses to climate change – such as new policies, market shifts, technological innovation and social change – will also have major impacts, including on the structure and function of the global economy. These and other developments have prompted insurance supervisors to begin examining the relevance of climate change for insurance supervision, both individually and collaboratively through the SIF. The objectives of this issues paper are to raise awareness for insurers and supervisors of the challenges presented by climate change, including current and contemplated supervisory approaches for addressing these risks. The paper provides an overview of how climate change is currently affecting and may affect the insurance sector now and in the future, provides examples of current material risks and impacts across underwriting and investment activities, and describes how these risks and impacts may be of relevance for the supervision and regulation of the sector.
WARNINGS FROM THE PAST Back in 2007, the Institute and Faculty of Actuaries offered the following warnings about potential impacts on property insurers: ● The frequency and intensity of tropical cyclones is expected to increase in line with rising sea-surface temperatures. In particular, Atlantic hurricanes are likely to be most impacted by climate change, with a number of studies already showing an observable increase in frequency in the past 30 years. ● Flood events from a variety of causes will change in frequency, with intense rain events likely to be far more frequent in Europe (even as overall summer precipitation decreases), snow-melt late winter floods becoming less frequent and with major storm surges seeing an increase both from an increased frequency of severe winter storms and a rise in sea levels. ● Some parts of Europe are likely to suffer from increased droughts, leading to increased subsidence claims. ● Climate change is adversely impacting the frequency of wildfires, hailstorms and lightning strikes.
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LEGAL REVIEW
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he refusal of the courts to allow the law to be used to benefit parties engaged in serious unlawful activity was illustrated recently in a High Court appeal against a decision to strike out a claim. Under the Civil Procedure Rules, a claim can be struck out if it has no reasonable grounds for being brought. In Dalvinder Gujra v (1) Balbir Roath (2) Shakti Roath [2018] EWHC 854 (QB), the claimant’s case was that the defendants had agreed to pay him £500 to set fire to two of their motorcars and had further agreed that if he was arrested that they would ensure that charges would not be pursued. In accordance with this agreement, the claimant set fire to the cars but the police were called and arrested him. The defendants did not tell the police that the claimant had acted with their permission and he was charged with arson. He stood trial and was acquitted. The claimant then brought a claim against the defendants in negligence. He alleged that the defendants’ failure to tell the police about the agreement was a breach of their duty of care to him, which exposed him to prosecution. He claimed damages for the time spent on remand and on bail leading up to his trial. The defendants applied to have the claim struck out. They denied that there was any such agreement but argued that if there had been, it must have been for the purpose of assisting them in making a fraudulent insurance claim. Such an agreement would have been unenforceable as a contract because a contract is illegal and void if the object, whether directly or indirectly, is the commission of a crime. The negligence claim had no reasonable grounds for being brought because it was founded on the claimant’s illegality and so the principle that no cause of action arises from an illegal or flagrantly immoral act (known as ex turpi causa) applied. On his own case, therefore, the claimant’s actions in setting fire to the cars were patently illegal and it would be “an affront to public conscience and to the integrity of the legal system for the law to afford the claimant a remedy”.
Master Davison agreed and struck the claim out. The claimant’s appeal was dismissed. He advanced a number of arguments, most of which were specific to the particular and peculiar circumstances of the claim. One argument, however, concerned the use of ex turpi causa illegality as a defence. The fact that a claimant was engaged in an illegal activity that brought about his injury does not automatically mean his claim for damages for personal injury must be dismissed and the test for establishing illegality – as set out in the case of Patel v Mirza [2016] UKSC 52 – is in three parts: (1) Has there been illegal conduct? (2) Having regard to the nature
and circumstance of the illegal conduct, is it in the public interest to deny the relief claimed? (3) Is denial of the relief a proportionate response to the illegality? Justice Spencer considered that a serious attempted fraud on an insurance company could not be said to be a minor transgression. The public interest was served by deterring or defeating dishonest insurance claims, by denying the claimant a remedy. The loss of the damages claimed for time spent on remand and on bail was in no way disproportionate to the unlawfulness of the claimant’s conduct in involving himself in such a serious attempt at fraud. ●
ILLEGALITY
AS A DEFENCE
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Graham Bartlett examines the particulars of a recent case that has implications for claims handling
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I N S U RT E C H – B I BA H A C K AT H O N
Luke Holloway reports on the innovative ‘Hackathon’ initiative held recently at this year’s BIBA Conference
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his year, BIBA 2018 hosted a brand-new innovation challenge named the Hackathon, aimed at helping to demystify the rapidlygrowing world of insurtech and at solving real problems faced by today’s insurance brokers. The six-hour initiative was held live at the conference and involved specially selected teams of tech-savvy thinkers from cutting edge startups and innovative insurers. The teams were given problems to address and went about finding solutions using data, research, facts and figures, after which they were asked to present their findings to a panel of judges, where the winning idea would be shared with the audience of thousands. Andy Thornley, head of corporate affairs at BIBA, was instrumental in organising the Hackathon and explained that the challenges set all had a common theme; helping to improve the brokers’ bottom line. This ranged from developing an enhanced customer understanding, to removing inefficiencies in the day-to-day
businesses. “Our aim for the Hackathon was twofold,” said Mr Thornley. “We wanted to engage an incumbent insurance broking market to understand how new tools and technologies could make a real difference to their customers and their businesses.
“Secondly, we also wanted to demonstrate to the insurtech community that there is a huge market, one that places 93% of commercial premiums, that they can collaborate with. Being the largest insurance broking conference in the world, we had the ideal platform to be able to do this.”
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CUSTOMER UNDERSTANDING The triumphant team was led by Renaud Million, CEO and co-founder of insurtech company Spixii, and included members from Brokerbility, Konsileo and BHIB, as well as Emma Pegg, Mr Million’s colleague and head of content at Spixii. “Our challenge was based around a better understanding of customers and providing brokers with a dataenriched, single view of the customer – which of course seemed a very broad proposition,” said Mr Million. “So at first it was not about finding a solution but defining the problem.” As most members of the team had only met briefly over a WhatsApp group before the event, part of the process was getting to know one another and gauge where the group’s strengths lay, as well as building working relationships and team spirit. “It was important to get to know each other and to hear the voice of everyone,” said Mr Million. “We named ourselves Spotlight, as we thought we would have to shine a light on the right spot in the data! It became a running joke among the team throughout the day and we tried not to take ourselves too seriously, having fun while working hard and following a plan.” Spotlight set out to interview as many different brokers as possible, gathering their perception of what this proposition meant to them and to understand their customer experiences. From there, they began to craft what this ‘single view’ of what the proposition could be. “With the implementation of GDPR coming into effect, we found that was on a lot of brokers’ minds,” Ms Pegg told us. “One interesting point was: if companies kept all their data in one single place, would it be more secure or more at risk? “Lack of real-time data was another big issue, along with the overall public perception of insurance in general. Time and time again, however, brokers spoke about the importance of making
FRESH THINKING
BROKERS STARTED TO SEE THROUGH THE WAFFLE AND CONFUSING LEXICON AND STARTED SEEING THE KEY BUSINESS BENEFITS THAT TECHNOLOGY CAN BRING
everything insurers do ultimately about the customer,” said Ms Pegg. The team’s main findings included several main areas, one of which was how often insurers contact clients. “Touchpoints between brokers and customers are quite infrequent – price, policy, renewal, claim,” explained Mr Million, “so we tried to find advances in the data that could trigger direction towards being more frequent – and that is what our Spotlight platform aimed to do. “We were able to highlight other sources of data, using experts and leveraging these sources onsite to package it all into a solution, augmenting the skills and the scope of the brokers and creating a product to provide more value to their customers,” he added.
Mr Thornley said it was encouraging to see the Hackathon teams approach their challenges with such positivity and fresh thinking. “A few years ago, the word we used most when referring to insurtech was ‘disruption’,” said Mr Thornley. “Fast-forward two years, and the key word we’re using now is ‘collaboration’. While the threat of disintermediation is still present, the risk of this can be offset by partnering with firms already in this space. “As well as demonstrating both innovation and collaboration in action, the key success at the conference for me was seeing a bunch of grassroots conversations happening, as brokers started to see through the waffle and confusing lexicon and started seeing the key business benefits that technology can bring,” he said. “Our Cross-industry Innovation Working Group has been doing magnificent work in helping to increase adoption of insurtech across the industry and the Hackathon was a key deliverable in the work we’ve done so far,” said Mr Thornley. “I’ve been extremely proud to lead BIBA’s work in this area and we’re genuinely beginning to see a change in attitudes and adoption. And long may that continue”. ●
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TA L E N T
ASPIRING TO BE THE BEST Following the recent launch of the CII’s Aspire Apprenticeship Programmes for employers, George Tsounias and Mike Russell take a closer look at what’s on offer…
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pprenticeships offer much more than the qualifications to work within the profession. Networking, personal development and improving those all-important soft skills, which appear to be lacking among new entrants into the profession, are all vital for career progression and reaching full potential. With the recent launch of the CII’s Aspire Apprenticeship Programmes, we take a look at how the programme can benefit businesses and hear from a former apprentice. A key theme that drives CII activities in the education sphere, whether it be in schools, colleges or universities, is the need to attract more diverse talent and raise the profile of the insurance and financial planning sector as an attractive profession to work in. Employers indicated they need quality-assured apprenticeship training programmes that are accessible, convenient and offer a simple solution to access available funding for businesses of all sizes. Aspire Apprenticeships standardised training programmes are easy to access, convenient to use and help businesses access available funding. With training providers carefully selected by the CII, Aspire Apprenticeship Programmes provide apprentices with the knowledge, skills and behaviours to add real value to your business.
THE SMART WAY TO MAKE APPRENTICESHIPS WORK FOR YOUR BUSINESS • Your business (no matter how small) gets easy access to nationwide insurance and financial planning apprenticeship training programmes, through simple online registration. • You get complete reassurance from knowing that only those training providers with proven expertise of delivering the best training for the apprenticeship standards they offer, are selected by the CII to be part of the Aspire Apprenticeship Programmes. • Rolling training programmes (three in-takes each year) make it simple and convenient for you to get your apprentices up and running quickly on their relevant apprenticeship standard. To learn more about Aspire Apprenticeship Programmes, and how they can help support your apprentice, register your interest at: www.cii.co.uk/apprenticeships George Tsounias relationship manager - education at the CII and Mike Russell product marketing executive
thejournal.cii.co.uk / The Journal / June - July 2018
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TA L E N T
APPRENTICESHIPS A SMART WAY TO GET AHEAD? The Journal talks to one successful apprentice about her journey to qualification
L
et’s face it, university is not for everyone and it is important that the next generation of professionals make informed decisions when it comes to their next steps after leaving school. With the increasing number of apprenticeships becoming available across most professions, we caught up with Georgia Hollis, of Clear Insurance Management, who completed her apprenticeship in general insurance with the Brokerbility Academy, to hear about her journey. What made you choose an apprenticeship? I always thought that the apprenticeship route was a good idea. I had spoken to my careers adviser at sixth form, who filled me in what an apprenticeship could offer me. I knew that I wanted to go down the apprenticeship route as university was not for me and I wanted to be able to earn a wage while working towards a qualification. What are the benefits of an apprenticeship? The main benefit of apprenticeships is that you can gain a recognised professional qualification along with earning a wage. I have learnt so much by working in an office environment and dealing with customers daily – something I would not have benefited from if I had gone to university.
What skills, knowledge and experience has your apprenticeship given you? Along with my Cert CII and Level 3 in general insurance, I have also been able to gain many skills from the entry-level courses that the Brokerbility Academy provided within my apprenticeship. What do you do in a typical working day? Since completing my apprenticeship in 2016, I have joined the property owner’s team at Clear. My day-to-day duties include: preparing and issuing quotes using our delegated authority with Aviva, Allianz and Covea; processing my own book of renewals and midterm amendments; issuing reports for the team, using the Open-GI system to create letters and debits; answering clients queries on the telephone. What do you enjoy most about your job? I really enjoy being on the property delegated authority team – I get to step into the shoes of the underwriter and quote for all colleagues at Clear (London branch and our regional branches). I feel this helps me get a fuller, rounder and better understanding when I am broking too, as I can see how different factors will affect a risk. What career progression have you had so far? I started at Clear as an apprentice and then when I joined the property team I was a trainee account handler. Last year I was promoted to property account handler, which made me very proud. I am also now helping to train a new
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Georgia Hollis
apprentice who has joined our team. In the future, I am hoping to carry on further in the property team and build my book of clients. How has the apprenticeship helped your company? I was part of the first apprentice cohort to join Clear via the Brokerbility Academy. Since then, four other apprentices have joined so I feel that this apprenticeship programme has made a positive contribution to Clear. Apprentices bring something unique to a company with fresh ideas. I also feel that apprentices at Clear have increased motivation and teamworking, because of the engaging training sessions and learning materials that come from both Clear and the Brokerbility Academy. Too often, apprenticeships have been overlooked in favour of going to university. It is now the time to start changing the status quo and bringing apprenticeships to the forefront of postschool further education options. ●
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BROKING
T
FOSTERING INNOVATION
his autumn will see the Financial Conduct Authority (FCA) issue its interim report on the London market’s wholesale
ISTOCK
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insurance brokers. The regulator’s 2018 business plan reiterated the importance it places on its review into the sector. The regulator says its review into wholesale insurance brokers, which are responsible for placing the majority of the £68bn in premiums underwritten in London every year, will concentrate on three main areas – pricing levels, conflicts of interest and broker facilities – amid concerns that it fails to deliver value for money and is skewed towards larger players. It could result in a wide range of outcomes, from a boost to the market’s competitiveness in the international arena to a full-blown investigation conducted by the Competition and Markets Authority (CMA).
When it announced the review late last year, the FCA said it wanted to ensure the sector was “working well and fosters innovation and competition in the interests of its diverse range of clients”. “Given the size of the wholesale insurance sector and the type of large-scale risks it covers, the way it functions can have a wide-ranging impact on the broader economy. If businesses cannot get appropriate cover or pay more for services than they should, it can impact on their ability to operate and grow,” says Christopher Woolard, FCA executive director of strategy and competition. The FCA acknowledges that the size of the wholesale insurance sector and the nature of the risks covered mean that “the way it functions can have a wide-ranging impact on the broader economy.” The regulator also notes that it has been a decade since the sector was last reviewed, during which time there have been numerous developments. According to the FCA, these developments include the evolution and growth of the volume of business being placed into alternative facilities.
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BROKING
The market study could lead to the sector being given a clean bill of health. However, if the FCA were to conclude ultimately that the wholesale insurance broker market is not working well, it has a wide range of options at its disposal Other changes the FCA has noted are an increase in broker remuneration despite declining premium rates and the rise in broker offerings in terms of additional, non-placement services – such as advisory, data and analysis services. The FCA says it is taking a broad approach as to what constitutes wholesale insurance for these purposes. It is looking “to include risk business from overseas and the UK, placed by brokers with Lloyd's syndicates and insurance companies operating in the London insurance market.” Risks include: • Large, complex or speciality risks, which usually require an element of bespoke pricing and coverage; • Portfolios of retail, SME and smaller corporate business placed in blocks on the London insurance market (such as surplus lines business from the US); • Reinsurance – both treaty and facultative.
BROAD SCOPE “This is an important study for the FCA in reviewing how the wholesale insurance market works for all participants. The scope is broad and interestingly includes reinsurance, giving the FCA the opportunity to understand the interplay between insurers and brokers across the whole of the market, rather than assessing each in isolation,” says David Miller, a regulatory insurance partner at KPMG UK. Mr Miller adds: “The FCA will be speaking to a wide group of stakeholders, including insurers and end clients, to get a fuller picture of the impact of some specific services and practices which have developed in recent years, including broker facilities. It will also be an opportunity for brokers to demonstrate the value they bring to the market and to clients.” The market study could lead to the sector being given a clean bill of health. However, if the FCA were to conclude ultimately that the wholesale insurance broker market is not working well, it has a wide range of options at its disposal. These include changes to the rules regulating brokers, publishing general guidance or imposing firmspecific remedies. In addition, if the FCA were to uncover anti-competitive behaviour
as part of its investigation into how the market is working generally, it could then liaise with the CMA about commencing competition investigations into individual firms.
AREAS OF CONCERN David Harrison, a partner in the London office of law firm Mayer Brown, says: “It is noteworthy that the FCA has referred to some specific areas of potential concern, in particular the possibility of tacit coordination and indirect information-sharing between brokers. This suggests that the FCA might have specific types of conduct in mind. It will be looking closely at business practices to see if they are in line with competition law.” Mr Harrison continues: “There is a risk that certain practices that may have been the norm in the industry for a long time will now be called into question. In particular, forms of information exchange or coordination that have not have attracted attention in the past might now be deemed unlawful. Any broker in the sector should be considering the compatibility of its practices in light of the competition rules. He concludes: “It is ultimately best for the health of a sector if there is a competitive marketplace.”●
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REVIEW FROM THE TOP As the FCA prepares to commence its review into wholesale brokers, The Journal examines the possible outcomes thejournal.cii.co.uk / The Journal / June - July 2018
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D I S C I P L I N A RY M AT T E R S
The CII w to make c ishes unless the lear that, ca indicates se reported allegation otherwise, against m s and findings implicate embers do not those m employers embers’ in any way
DISCIPLINARY MATTERS BREACH OF EXAMINATION AND/OR ASSESSMENT REGULATIONS Matthew Curzon, of Curzon Wealth Management, 4 Commercial Street, Ogmore Vale, Bridgend, Mid Glamorgan The assessment candidate allowed his assignment to be accesses by another candidate, in breach of the Coursework Assessment Guidelines and Instructions. The CII case examiner invited the respondent to approve and sign a Consensual Order under 9.1 of the CII Disciplinary Procedure Rules 2015, to which the respondent agreed, and which came into effect on 6 April 2018. The sanctions issued were that the respondent: a) be reprimanded; and b) be required to take and complete the CII on line Ethics course before booking any CII examinations, enrol on any CII assessments or apply for any CII recognition of prior learning.
“To date, the CII has dealt with five instances of non-members using CII designations for 2018. As this is an infringement of CII’s trademarks, where people persist in misusing CII designations, legal action will be taken against them”.
TAKE NOTE Where the disciplinary panel or case examiner has decided to publish details of a disciplinary case ascribed (ie where an individual has been named), every care has been taken to identify members correctly. Please contact the CII if there is any doubt about the identity of a member who may have been the subject of disciplinary proceedings and in relation to whom a report has been published.
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Nurturing your talent We work with employers to develop bespoke cost-effective training solutions, driven by your business needs. cii.co.uk/training
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I N T E R N AT I O N A L P R O F I L E – T H E N E T H E R L A N D S
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IMAGE: GETTY
In association with
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I N T E R N AT I O N A L P R O F I L E – T H E N E T H E R L A N D S
E
nough has been said about how insurance market conditions, especially in developed markets, have been affected by low interest rates, pricing pressures and operational constraints. However, not many governments and financial supervisory authorities have delivered a clear assessment of the forces that are shaping resilience in their local markets.
The Netherlands, a country that boasts having a plan for every square meter of its land, is one of few countries that have delivered a sober and pragmatic approach for the future of its insurance market, as a fundamental tool for stability. In December 2016, the Dutch Central Bank (DNB), released a systemic analysis of the impact that a series of key developments will have on the insurance market in the mid-term. The report, titled Vision for the Future of the Dutch Insurance Sector, sharply dissects the impacts that the adoption of innovative technologies, changes in societal dynamics, economic trends, evolution of regulatory
framework and shifting consumer behaviour will have on insurance. The DNB argues that insurers need to decide about some foundational changes required to guarantee financial solidity and stability for the sector – cost-cutting initiatives, cross-border expansion, investment plans for innovation or integration plans are a few crucial options discussed – and that insurers unable to adapt should explore consolidating, partnering or completely running-off operations that will not help maintain or grow profitability. The fundamental choice for Dutch carriers is how to digitalise their core operations in an environment increasingly led by experience-driven consumers demanding transparency
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DIGITALISING FOR SURVIVAL Bruno Davila examines how the Dutch market is focusing on the adoption of new technologies to overcome its challenges
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I N T E R N AT I O N A L P R O F I L E – T H E N E T H E R L A N D S
and freedom of choice, in a shifting economic environment where the ‘sharing economy’, increased trend of self-employment and individualisation are shaping risk profiles for good. The fundamental choice is how to grow in transformation and with limited room for error. Unsurprisingly, evolution is picking winners and losers.
£54bn
NON LIFE MARKET WORTH £54BN IN 2016
STABILITY FIRST
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Slightly more than 18 months have passed from the delivery of this sobering assessment by the DNB, and the market has reacted diligently to ensure resilience in the face of the challenges. The DNB has both enforced its vision and supported capital providers’ continuity and, despite ongoing contraction of both non-life and life sectors, most credit risk rating agencies provide stable outlooks for the market – citing efforts made by local insurers to improve capitalisation and focus on profitability. The nonlife market has contracted from €56.8bn in 2011 to €54bn in 2016, with pure P&C – excluding PA&H – seeing -4.9% reductions per year in this period. The life market, meanwhile, has contracted from €21.9bn in 2011 to €16.6bn in 2016. Generally, profitability has seen some worsening, but it is expected that some hardening of rates will help stabilise the underperforming trends in some lines. The market as a whole is expected to do better, underpinned by the country’s economic growth and burgeoning customer base – for example, investment in residential, commercial buildings and infrastructure is expected to grow at 4.3% per year up until 2020, compounded by the largest house price increase in 15 years with house prices 16.4% higher than the dip in June 2013.
to sustainable profit margins. Some have sought capital injection or run-off operations into specialised partners and some other have chosen the route of consolidation. The Dutch market has seen strong consolidation during the past 10 years, leaving the top five life insurers with a combined market share of about 75% and the top five non-life insurers with about 60% of the market in terms of gross written premiums. These consolidation efforts have been encouraged by a challenging environment pushing carriers to scale back operations and foster synergies with significant focus on cost reduction, redefinition of business models and adoption of new technology.
THE NETHERLANDS IS ONE OF FEW COUNTRIES THAT HAVE DELIVERED A SOBER AND PRAGMATIC APPROACH FOR THE FUTURE OF ITS INSURANCE MARKET
STRONG CONSOLIDATION Dominant Dutch insurance groups have executed significant projects to identify, control and address their roadblocks
DIGITALISATION OF THE INDUSTRY The increased availability of innovative technologies applied ti insurance, like tracking or monitoring devices in Marine, to provide one example, is transforming the possibilities of active risk management in the insurance sector. A fully digitised insurance entity can link premiums to policyholders’ activity, improving the ability to generate underwriting profits from increased margins. During the past couple of years, the Dutch market has seen an accelerated pace of innovative technology presented to the insurance market,
made available for incumbents’ operations to explore ways to access new markets, work more efficiently and, ultimately, improve profitability. Various key carriers in the market are actively seeking to interact with solution providers and finding ways to work together in the adoption of new technologies, investment on promising platforms and jointly developing a broader range of products to improve risk selection, customer engagement and pricing models. Insurers are harnessing increasingly applicable and affordable technology to enhance consumer offerings, which offers substantial growth opportunities for the sector. Innovation by incumbents, as happens in other developed and mature markets, is limited by the individual challenges of legacy systems, organisational structures and capacity to invest in developing infrastructure that will enable an ever more dataintensive industry. The Dutch insurance sector faces a daunting list of challenges as it seeks growth through transformation. These challenges primarily stem from market dynamics and the operational and regulatory landscape (including pressure from supervisory authorities). But businesses pioneering technologies and demonstrating their potential in risk management and loss prevention, are expected to successfully seize the opportunities. Main investments in the Internet of Things are concentrated in areas such as equipment management, fleet management and smart buildings. Commercial insurance providers cannot afford to adopt a wait-and-see approach; they are looking to be proactive and ensure that their products and services for the commercial setting keep pace with connected industries and the economy. This is vital if the sector is to remain relevant in the future. With an active insurtech environment, we see insurers being receptive to cooperation and open to strategic partnerships with technology companies and data providers, to build comprehensive value propositions for customers. ●
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Study with substance
Our insurance qualiďŹ cations identify universally as evidence of knowledge and professional competence.
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26/06/2018 16:28
STUDY ROOM – BLOODSTOCK
Horse racing may be known for its glistening green courses, dazzling horses and plenty of glitz and glamour, but it is also extremely big business that requires insurance. Here we take a look at how this type of insurance works
B
ritish horse racing is the country’s second most popular sport, attended by more than 5.6 million people last year and generating annual economic expenditure of £3.45bn while supporting direct, indirect and associated employment for 85,000 people, according to the British Horseracing Association.
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STUDY ROOM
IMAGE: ISTOCK
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It does not stop after the horse has finished on the track either – the stud fee for famed stallion Frankel soared to £175,000 a time last year. So it is no wonder that owners, trainers and stud farms alike need insurance to protect their assets. Fundamentally, there are two types of insurance: insurance for the horses themselves (bloodstock); and then there is insurance for the horse trainers and studs (liability cover). But it can be broken down still further when looking at the owners, says associate director at bloodstock insurer Lycetts, Anna Goodley. She explains: “There are two types of clients – those who keep a racehorse for fun, including those who may own a tiny share of a horse, up to those who have several horses but maintain ownership as a hobby or interest but not as a business. “Then there are those who have a commercial interest in
owning horses. They see the animal as a commercial asset and are racing the horse to see it gain in value, both on the course and after racing when it might go to stud.” Ms Goodley adds that this second group of owners will have insurance out of necessity to protect their balance sheets. In the UK, horse racing is split between flat and jump racing. While most people would associate the need for insurance with jump racing, where accidents are more likely, in fact the insurance industry reports that most bloodstock insurance relates to flat racing, where the prize money is much higher during the horses’ racing life and where stud fees post-racing can be lucrative. Bloodstock insurance is effectively a mortality cover, only paying out if the horse dies or requires lifesaving vet treatment. A trend that Ms Goodley has noticed is for owners and trainers to spend large sums on MRI scans, CT scans and scopes to identify health problems. Not all of these treatments will be insured under the bloodstock policy. →
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Q
STUDY ROOM – BLOODSTOCK
HUMANE TREATMENT One of the questions often asked after an accident on the racecourse in which a horse has to be put down, is whether that decision is being driven by insurance. Would the owner save the horse if there was a different style of cover available? However, there are very strict rules, set down by the British Equine Veterinary Association (BEVA) and enforced by vets countrywide. Insurers are led by the BEVA rules and the association has just released a video stressing the high standards of care for horses across the UK. Insurers point to the treatment of St Nicholas Abbey as an example of the lengths that owners will go to in saving their animals.
AT STUD – A CASE IN POINT 46
Horses may be huge track stars but that is no guarantee of success when it comes to breeding. David Ashby of insurer MS Amlin points to one famous example: Legendary US racehorse Cigar won 16 consecutive races. He also won the affection of the American public and his owners almost $10m in prize money. Americans took him to their hearts as his recordbreaking run of victories progressed – he even got a police escort down Manhattan’s Seventh Avenue to Madison Square Garden, for his retirement party. His proud owners must also have been looking forward to reaping the rewards of his second career as a stallion; to hopefully sire yet more champions. Sadly, it turned out he was infertile and eventually was retired to live out his days on a farm.
Insurance can help – infertility cover is available for a horse in its first year at stud, paying out under a series of strict conditions, if the horse fails to deliver. Another example closer to home is that of George Washington, whose owners had hoped to make plenty of money from him at stud. It turned out he was infertile and he actually returned to the racecourse, where he had greater success.
LIABILITY COVER Trainers and stud owners also need the support of insurance, in terms of liability cover. Effectively, there are three types of cover needed: ● Employers’ liability – this protects the employer in instances where employees may take action against them for a loss of earnings or personal injuries. ● Public liability – if a member of the public was injured. Typically, this might include a member of the public being injured by a horse kicking out at the racecourse. ● Care, custody and control – this cover protects the insureds if an owner was to sue the trainer or stud farm for the capital value of a horse injured or killed while in their care.
Employers’ liability has the greatest number of claims annually. In a bid to reduce the number of claims, Lycetts, for example, recently launched an annual award for the best racehorse training yard. The award celebrates the yard that has developed a strong team ethos, above and beyond usual standards. It awarded two categories in its inaugural year and attracted 39 entries. ●
WHAT IS BLOODSTOCK INSURANCE? Bloodstock is a term referring to racehorse insurance. Bloodstock insurance protects against the horse’s value and the loss of the horse. Purchasers of bloodstock insurance are effectively buying a life insurance policy for the animals to safeguard the investment made by the animal’s owner or owners. All-risks mortality insurance covers the value of the horse if it dies as a result of accident, disease or illness. Bloodstock insurance may cover consequential financial loss and/or third-party liability. Cover can be extended to include fertility insurance for stallions, and wind insurance should a yearling be bought and found to have bad wind. Vet fees are available but limited mainly to major surgical, and no loss of use is provided.
WHAT IS EQUINE INSURANCE? Equine insurance is specifically for sport horses and horses kept as pets. This insurance is commonly used by horse owners and protects a range of activities, from leisure riding and low-level competition, to breeding, dressage, showjumping and three-day eventing. Equine insurance policies typically provide protection against mortality, vet’s fees and public liability.
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Q&A STUDY ROOM
This set of questions, courtesy of online CII training package Insurance Assess, will test your knowledge of topics. The answers are at the bottom...
QUESTION 1
QUESTION 4
QUESTION 8
What is a first party cyber risk exposure? A An exposure that causes a legal liability loss to the business b A contractual risk exposure c An exposure that causes a direct loss to the business d A claim made against a director
Which type of insurance cover is compulsory for independent insurance intermediaries that are authorised by the Financial Conduct Authority (FCA)?
Which of these statements best describes the term contribution?
A Products liability b Public liability C Professional indemnity D Fidelity guarantee
QUESTION 2 QUESTION 5
Which of these is the main objective of compulsory motor insurance? A To provide additional funds for accident research b To ensure that the innocent victims of road traffic accidents will receive compensation c To ensure that every individual is properly insured against their potential liabilities to others d To ease the state’s financial burden
Which of these classes of insurance is compulsory by statute? A Employers’ liability b Permanent health c Theft d Fire
QUESTION 9
QUESTION 6
QUESTION 3 Which of these statements explains what is meant by the term ‘personal data’ under the Data Protection Act 1998? A Information relating to a living individual who can be identified from that information b Information about a person’s ethnic origin, religious beliefs, health or sexual life c Any information which could be embarrassing to an individual if it were released d Any information about a person which is freely available from public record
A When there is some value in the damaged item and a financial amount is recovered from its sale b When someone else is to blame for the loss and it is possible to pursue them for monies paid c When two policies are in force for different policyholder but the same risk d When two polices are in force which cover the same policyholder and the same risk
In which of these ways does the Data Protection Act 1998 extend the principles established in the Data Protection Act 1984? A It applies to insurance company data b It gives individuals recourse to law in the event of unauthorised disclosure of information c It applies to corporate as well as personal data d It applies to all forms of data, not just computer data
QUESTION 7
What are the two main features of a financial risk control process? A Retention of risk or transfer to someone else b Eliminate the risk or reduce its level c Self insure or cease to carry on that type of business d Driver training and analysis of accidents
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QUESTION 10 Which of these describes the scope of a business continuity plan? A An individual division only b The whole organisation c The production area of a plant only d The IT department only
Which of these actions do the Money Laundering Regulations require firms to do when approached by a new client? A Visit their business or home address b Complete a credit check with an authorised credit agency c Notify their money laundering reporting officer d Verify their identity and address
YOUR SCORE » 1–3 POOR 4–6 GOOD
7–8 VERY GOOD 9-10 EXCELLENT
ANSWERS 1C. These are risks that cause a business to suffer direct losses; costs it will pay itself. 2B.The main objective of compulsory insurance is to provide a means by which people injured through the fault of others can receive compensation. 3A. Personal data means data
consisting of information relating to a living individual who can be identified from that information. 4C. Professional indemnity insurance covers losses, injury or damage, suffered as a result of wrong or misleading professional actions or advice.
5A. The Employers’ Liability Act 1969 made it compulsory for all employers to insure against legal liability to pay damages to an employee injured at work. 6D. The 1998 Act extended its provisions to regulate all forms of data transfer, including manual and
paper records in addition to computer data. 7D. The Regulations require the firm to take all practical measures to check the identity of new clients. 8A. Contribution involves another policy being in force for the same policyholder and covering the same
risk. 9A. There are two aspects retention of the risk, by excess, reduced cover or self insurance and transfer of the risk, typically by arranging insurance. 10B. A business continuity plan must consider the effects on the whole organisation.
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STUDY ROOM
A-Z OF…
IMPLEMENTING BEST PRACTICE With financial services subject to ever-increasing layers of regulation, Andrew Frost explains how properly implemented and monitored regtech can help
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he insurance industry has been subject to a wide range of global regulatory changes since the crash of 2008, creating extra work – at excessive costs – for compliance teams worldwide. In a bid to reduce risk, regulators have increased demands to satisfy their reporting frameworks. Only last year, the UK’s Anti-Money Laundering (AML) regime was amended to implement the Fourth Money Laundering Directive (MLD4). These new regulations require firms to: • Have a complete AML/Know Your Customer (KYC) programme implemented; • Have adequate resources in place to monitor and enforce compliance with the relevant requirements; • Put in place adequate controls and oversight over the AML programme; KNOWING • Respond to any changes YOUR A-Z quickly and produce A anti money laundering comprehensive reports; b budget • Comply with latest data c communication security rules; D data security • Provide full audit trails. E expert However, we are seeing an f frameworks increase in firms failing to g global adequately meet all obligations. h high level A pattern is emerging, including i in-house issues with decision-making, j jurisdiction k KYC out-of-date technology l ledger and an increasingly global m monitoring landscape. Firms often overlook n negatively regional offices and the people o oversight implementing policies on a p pattern daily basis, preferring to draft q quickly policies in-house at high level. r regulators This can lead to good and strong s solutions policies in the headquartered t technology jurisdiction, but ones that are u updates impossible to implement and v via that miss certain jurisdictional w work regulatory nuances. x eXtract Tackling issues around y your technology can be solved by the z zones introduction of shared ledger facilities, though setting these
up and managing the necessary infrastructure can take time and be disruptive.
TECH TO THE RESCUE? Automating processes can ensure that financial institutions comply with regulations on a global scale. While regulatory technology, known as regtech, is offering some solutions, to maximise the potential within an organisation will still depend on the skilled use of that technology. A lack of communication across zones leads to a host of problems – processes are duplicated and multiple requests are made to the same entity via different routes, negatively impacting clients. Populating a database is all well and good, but how the algorithms are then used to extract data, check and update it, analyse and communicate it efficiently requires expert knowhow. A trusted service provider can not only set up the shared ledger facility but also ensure that all regions communicate with one and other by sharing the same analysed information.
CROWN JEWEL Regtech can improve efficiency, cost and speed, while helping to streamline and simplify processes; but the crown jewel will be the ongoing monitoring. Software can simultaneously monitor the client after onboarding and the global regulatory landscape. Software can identify updates in regulations and sanction lists, but it will take a skilled person to highlight and analyse these. New and innovative technology will continue to flood the market. What will be important is how firms decide to use it. To realise its full potential, financial institutions would be wise to ensure that they also employ people with the correct manual skills and expertise. They can combine the technology implementation with the manual analysis. This will set an organisation apart and give it the best possible tools to ensure full compliance, on budget and on a global scale. ● Andrew Frost is executive director at Lawson Conner
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The Journal at your ďŹ ngertips For a variety of insurance related content including c-suite interviews, topical debates and in-depth articles.
thejournal.cii.co.uk CII.July18.049.indd 49
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CII BLOG
ANNA BARNES
THE LEARNING ISSUE In this issue’s blog, Anna Barnes explains why it’s important to discover what type of learner you are…
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n my last blog, I touched on the need to memorise specific points to aid you in your exam. I personally think this deserves a little more attention and should be discussed in plenty more detail. You may be lucky enough to have photographic memory but if you are anything like me, you can’t even remember what you did last week never mind memorising an entire book! I would suggest that you first and foremost establish what type of learner you are. You may be a visual, linguistic or an auditory learner – or even a combination of all three. There are plenty of tests you can take online, which will help you find out what type of learner you are.
TIME WELL SPENT As mentioned in my last blog, I used to think repetition was key. I used to write out the same sentence over and over again, but that was such a waste of time! However, now I have discovered that I’m an auditory learner, recalling works for me. When I'm learning specific principles or rules, I usually repeat each point out loud a number of times, without looking at the book. It may sound ridiculous but for me, saying things out loud has been a revelation! Once learnt, I will then record myself. I listen to the recordings every now and again, especially before I go to bed as I seem to remember more at night than in the
morning. But you can listen to your recordings whenever you want. A few months down the line you could be on chapter 10 and it's difficult to remember what you've learnt on chapter one. So try this technique out and see if it works for you.
IF YOU WANT TO LEARN, TEACH! Another effective method is to teach the information to someone else. This could be to a colleague, family member or a friend. If you explain the information to someone else, you not only have a better understanding of the information, but it also gives you more confidence when answering the question.
AWARDS SEASON To end, I thought it would be useful to mention – as not everyone is aware – that there are a number of CII- and local institute-sponsored awards, both local and national, which are well worth an extra effort. These are formally recorded by your employer and the institute, so for the ambitious among you, it really gets you noticed. I wasn’t aware of such awards, but I recently received the McNeil and Wallace Award, Liverpool Underwriters Association prize for the greatest merit in my M90 Cargo and Goods in Transit exam, which just shows hard work really does pay off. ● Anna Barnes is compliance & technical services assistant at NMU
◊ LEARN, BABY, LEARN Online tests can help you see what methods are most effective for you
◊ THE BIG PLAYBACK Record yourself then listen later, before bed is ideal
◊ TEACH FOR THE STARS Explaining answers to someone else can really help you get information clear in your mind
ILLUSTRATION: LUKE WALLER
THREE THINGS TO TAKE AWAY
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&OR DETAILS ON THE POSITIONS BELOW AND OTHERS IN 'ENERAL &INANCIAL 3ERVICES )NSURANCE ACCROSS THE 5+ ,ONDON AND )NTERNATIONALLY PLEASE VISIT
WWW IPSGROUP CO UK s !CCOUNT (ANDLER
s 2EINSURANCE #LAIMS 4ECHNICIAN
To ÂŁ45,000 + Bonus &BeneďŹ ts – London An opportunity to join an “in houseâ€? team of a major corporate and take on responsibility for the insurance program as well as wider risk management tasks. An example of the some of the duties are; maintaining good relationships with a panel of insurers, building close relationships with customers, especially with updates on material facts., gaining a good knowledge of all insurance products and their relevance to clients and preparing broker presentations. Previous experience of handling UK insurance programs (placement and Claims) is needed. Contact: James.Dick@ipsgroup.co.uk - London Ref:CII135882JD
s 53 #YBER 5NDERWRITER ÂŁ80,000 - ÂŁ120,000 + BeneďŹ ts – City of London Working for a high proďŹ le team you will be based at the box underwriting new and renewal complex business, getting involved in business planning, travelling around the globe to attend conferences and visit clients. This role will give you fantastic exposure as you will; underwrite lead primary layers, involvement in innovative product development and much more. Contact: Dana.Hill@ipsgroup.co.uk - London Ref:CII136174DH
s $ELEGATED !UDIT !NALYST To ÂŁ55,000 + BeneďŹ ts – City of London Opportunity to be part of a dedicated Delegated Audit team, managing your own case load of coverholder audit reports. Analysing and interpreting recommendations and advising specialist underwriting teams and coverholders on action points, leading and tracking any implementations and presenting to senior management regarding the account. Lots of opportunity to take ownership and forge productive partnerships with Lloyd’s, auditors and coverholders. Happy to cross train the right individual from a DU or Binder analytics background. Contact: Alison.Taylor@ipsgroup.co.uk - London Ref:CII136081AT
s 3ENIOR #OMPLIANCE !NALYST &INANCIAL #RIME To ÂŁ50,000 +BeneďŹ ts – City of London Exciting opportunity working for an inclusive and highly personable Compliance Manager taking ownership for the management and delivery of the syndicate’s Financial Crime framework within this high quality global insurance organisation whilst also supporting on a wide range of compliance advisory and monitoring tasks. With both strategic and operational duties, this role requires strong stakeholder management skills and someone who likes to take ownership and bring fresh ideas. Contact: Alison.Taylor@ipsgroup.co.uk - London Ref:CII136020AT
s 3ENIOR #LAIMS /Fl CER MONTH CONTRACT ÂŁ425 per day – London A Global Reinsurer has an immediate requirement for an experienced Reinsurance Claims Adjuster to handle Treaty Motor claims. Previous experience is a must, ideally with international exposure and you should ideally be immediately available. Contact: Carl.CrossďŹ eld@ipsgroup.co.uk - London Ref:CII135908CC
s 3PECIALTY #LAIMS -ANAGER To ÂŁ85,000 + Bonus & BeneďŹ ts – City of London An opportunity for a Senior Claims Adjuster to step up to a Claims Manager role and lead the Claims function in London for this Global Insurer. You will be responsible for Claims on a Lead portfolio of Specialty business, including Political Risks, Marine and Energy. Current experience working for a London based Insurer or Syndicate handling Specialty claims is required. Contact: Tim.Southworth@ipsgroup.co.uk - London Ref:CII136131TS
s &IN0RO #LAIMS To ÂŁ45,000 + BeneďŹ ts – City of London In this role you will proactively manage a portfolio of Financial Institutions, Professional Indemnity and D&O Claims, as part of a high calibre Claims team for this major Global Insurer and Lloyd’s Syndicate. Experience working for a UK based Insurer or Lloyd’s Syndicate handling Financial Institutions, Professional Indemnity or D&O Claims is required. Contact: Tim.Southworth@ipsgroup.co.uk - London Ref:CII136073TS
s 7 ) 4ECHNICAL )NSURANCE 3PECIALIST To ÂŁ70,000 + Generous Bonus – City of London You are currently working in a Mergers & Acquisitions insurance team or a legal team and are a specialist in Warranty & Indemnities. Employed by an expanding Lloyd’s Broker, you will work with the Technical Director and focus on evaluating differences between various insurers’ offerings to provide coverage. This is predominantly an ofďŹ ce based role, and will not require business production skills Contact: Chris.Dickman@ipsgroup.co.uk - London Ref:CII135967CD
s &INANCIAL !CCOUNTANT ÂŁ45,000 - ÂŁ55,000 + BeneďŹ ts – City of London Long standing Lloyd’s Syndicate require a Financial Accountant within their City of London Head ofďŹ ce. This role will integrate within the group corporate ďŹ nance function, reporting to the group ďŹ nancial controller. Maintain the corporate member ledgers and their related audit ďŹ les and management accounts. Process and reconcile investment transactions for the corporate member, analysing the different bases used for UK and US GAAP reporting purposes. Contact: Mark.Brady@ipsgroup.co.uk - London Ref:CII136185MB
s 3ENIOR 2EINSURANCE !CCOUNTANT ÂŁ50,000 - ÂŁ60,000 + BeneďŹ ts – City of London Global Insurer seeks a Senior Reinsurance Technical Accountant Reporting directly to senior management, The successful candidate must have current inwards reinsurance experience, gained within a technical accounting role, you must also possess a working knowledge of Great Plains Dynamics as well as underwriting systems (SICS, Genius, IRIS etc.) Contact: Mark.Brady@ipsgroup.co.uk - London Ref:CII135375MB ,ONDON London@ipsgroup.co.uk Tel: 020 7481 8111 3OUTHAMPTON soton@ipsgroup.co.uk Tel: 023 8048 8799
CII.July18.051.indd 51
"IRMINGHAM birm@ipsgroup.co.uk Tel: 0121 616 6096 "RISTOL bristol@ipsgroup.co.uk Tel: 0117 370 2472
£40,000 - £50,000 + Package – City of London A Global Insurer looking for an experienced London Market Claims Technician to handle reinsurance Motor, Property and Casualty claims. The client is looking for experienced claims technicians who have previously handled motor/property/casualty claims on a facultative basis, familiar with market practices with strong technical skills. Contact: Clare.Aldrich@ipsgroup.co.uk - London Ref:CII136198CA
s #LAIMS !DJUSTER £30,000 - £40,000 + Package – City of London Global Insurer are looking for a Claims Adjuster to take responsibility for claims within a varied Property, Casualty and Specialty portfolio from cradle to grave. Handling your own caseload of claims you’ll be meeting with clients, preparing reports and liaising with external parties whilst using ECF2 and CLASS. Contact: Clare.Aldrich@ipsgroup.co.uk - London Ref:CII136111CA
s 3ENIOR (.7 ,OSS !DJUSTER Up to ÂŁ50,000 + BeneďŹ ts – South East A fantastic opportunity to step into a senior position for this professional organisation. You will handle a wide variety of HNW cases within the London and Home Counties. You will offer an efďŹ cient and professional service that ensures that your clients come back to you every time. For more information apply now! Contact: Daniel.Hayes@ipsgroup.co.uk - Birmingham Ref:CII136093DH
s #OMMERCIAL !CCOUNT (ANDLER Up to ÂŁ30,000 + BeneďŹ ts – Hampshire If you are looking for a role that is in a supportive working environment and gives you variety of responsibilities, true accountability then this will be of interest to you. A Director for a well-respected broker is searching for an experienced candidate to run his commercial book as he expands the business. Contact: Daniel.Hayes@ipsgroup.co.uk - Birmingham Ref:CII135930DH
s 0ROPERTY #LAIMS (ANDLER ÂŁ20,000 – 24,000 + BeneďŹ ts – ShefďŹ eld Property claims handlers required for leading insurance Claims Management company in their ShefďŹ eld ofďŹ ce. You will handle a caseload of property claims efďŹ ciently and proactively. Ideally you will have handling experience of property claims from either an Insurer, Broker or Loss Adjusting company. Contact: Ashley.Blake@ipsgroup.co.uk - Manchester Ref:CII136031AB
s (OUSEHOLD 5NDERWRITER 3TANDARD .ON 3TANDARD (.7 ÂŁ35,000 + BeneďŹ ts – Manchester City Centre Due to expansion this specialist insurance provider are looking for a Household Underwriter to join their newly established ofďŹ ce in Manchester City Centre. Looking for candidates with minimum 3-4 years household (standard, non-standard & HNW) underwriting experience. Must be self-motivated and excellent time management and organisational skills. Contact: Ashley.Blake@ipsgroup.co.uk - Manchester Ref:CII136187AB
s 3PECIALIST 2ISKS !CCOUNT (ANDLER ÂŁ20,000 - ÂŁ27,000 + BeneďŹ ts Package – Birmingham An exciting opportunity with a top 10 global broker in Birmingham. You will deal with a range of specialist risks including Marine, Fine Art & Specie, Drone, Aerospace and Yacht. Working closely with their London ofďŹ ce you’ll initially handle renewals and will also have regular visits to London. To apply you will have gained experience in a similar role within commercial broking. Contact: Mark.Fancourt@ipsgroup.co.uk - Birmingham Ref:CII134355MF
s 4RADE #REDIT 0RACTICE ,EADER ÂŁ45000 - ÂŁ65000 + Car Allowance, Leading BeneďŹ ts – Birmingham Looking after a book of clients whilst leading a team of Birmingham based Executives and Advisors you will have a have a solid, stable background with at least 8-10 years’ commercial insurance experience. Trade Credit experience is preferred however my client will also consider those with strong Financial Lines experience. Leadership / Managerial experience is key. Contact: Mark.Fancourt@ipsgroup.co.uk - Birmingham Ref:CII136166MF
s )N (OUSE !SSISTANT )NSURANCE -ANAGER ÂŁ50,000 - ÂŁ60,000 + BeneďŹ ts Package – West Midlands One of the UK’s largest companies has a vacancy in their specialist “in houseâ€? team. This is a great opportunity for someone from a Risk Management or broker background to join a prominent “insurance buyerâ€? as well as a group that sets out a comprehensive risk management strategy. Working alongside the Insurance Manager your duties will be to develop the ongoing insurance programme incorporating a strategic review of risk appetite. Contact: Richard.Coleman@ipsgroup.co.uk - Birmingham Ref:CII135580RJC
s 0ROFESSIONAL )NDEMNITY #LAIMS !SSOCIATE Up to ÂŁ37,000 + BeneďŹ ts – Birmingham a leading global Insurance Broker seeks a Professional Indemnity claims expert to join their expanding department in Birmingham City Centre. The role will involve regular contact with a wide range of clients including Solicitors, Surveyors, Architects and construction professionals to manage and handle all areas of their Professional Indemnity Claims. You will be the key point of contact for all Professional Indemnity claims and therefore your knowledge and experience will be required to build a conďŹ dence in the company throughout the claims process. Contact: Richard.Coleman@ipsgroup.co.uk - Birmingham Ref:CII135501RJC
-ANCHESTER manchester@ipsgroup.co.uk Tel: 0161 233 8222
777 )03'2/50 #/ 5+
,EEDS leeds@ipsgroup.co.uk Tel: 0113 202 1577 3INGAPORE singapore@ipsgroup.co.uk Tel: +65 6223 1023
(ONG +ONG asia@ipsgroup.co.uk Tel: +852 3469 5339 3HANGHAI shanghai@ipsgroup.co.uk Tel: +86 21 2206 2882
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The complete solution that ensures your organisation is IDD compliant
The Insurance Distribution Directive (IDD) requires insurance distributors to ensure their employees have the appropriate knowledge levels to undertake their role. In addition all relevant staff will need to complete a minimum of 15 hours of Continuing Professional Development (CPD) per year. From October 2018, if you are distributing insurance products, or in any way involved in their distribution, you must be IDD compliant.
Find out how Assess can help your organisation become IDD compliant. assess.sales@cii.co.uk +44 (0)20 7417 4422 brokerassess.cii.co.uk
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