The Journal April - May 2019

thejournal.cii.co.uk April – May 2019

Green machine How insurance can help business transition to sustainability

In search of certainty The role of political risk cover in countering rising geo-economic tensions

RISE OF THE ROAD BOTS Autonomous vehicles are yet to hit the highways but AI is already in the driving seat

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A P R I L - M AY 2 0 1 9

C O N T E N TS 28-29 Hurricanes How technology has evolved to improve insight into the risk and cost of natural disasters

NEWS 5 President’s letter Jonathan Clark writes about proposed changes to the CII’s bye-laws and Corporate Chartered status

32-33 Cryptocurrency The rising need for insurance coverage as digital assets move into the mainstream

6 -9 News UK news from the CIII

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10 -11 International news CII activity around the globe 12-13 Regional news News from the local institutes

34-35 Modernising the CII We explain proposed changes to CII bye-laws and how members can vote

19 Regulatory radar The latest legislation updates from the UK and Europe

38-41 Insuring Women’s Futures We meet the experienced executives leading the IWF workstreams

FEATURES

STUDY ROOM

14-15 The Interview – Claudio Gienal We talk talent, AI and the future of insurance with the Axa UK and Ireland’s CEO

44 A-Z The use of drones in the world of risk management

16-18 Political risk A global look at how political risk cover can help 20-23 Hot Topic – Future of motoring Examining the changes happening right now on the road to autonomous vehicles

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46-47 Study room: Water technology A look at how leak-detection devices could lower claimsrelated costs 48 Q&A The big ten questions to test your knowledge

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24-25 Environment The role of insurance as more firms go green

50 CII blog Blogger Alex Dooler on the importance of perseverance and turning failure into success

CONTACT US

The Chartered Insurance Institute The Chartered Insurance Institute 21 Lombard Street, 21 Lombard Street, London, EC3V 9AH London, Tel: (020) 8989 8464 EC3V 9AH 8530 3052 Fax: (020) Tel: (020) 8989 8464 Sian Fisher Chief(020) executive: Fax: 8530 3052

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) www.thejournal.cii.co.uk Should you wish to send your views, please email: ??????????@cii.co.uk Cover Image: Vasava

Sian Fisher Editor:executive: Luke Holloway (020) 7417 4778 Chief luke.holloway@cii.co.uk Editor: Holloway DeputyLuke editor: Do you7417 have one??

(020) 4778 lukesminion@cii.co.uk luke.holloway@cii.co.uk Contributing editor: Liz Booth For sales and advertising Art editor: Yvey Bailey please contact andy.penny@redactive.co.uk Picture editors: Claire Echavarry, ISSN 0957 4883 Charlie Hedges © 2016 Chartered Insurance Institute.

Production: Jane Easterman Average total net circulation more Printing: GD Web Offset than 82,000 Recycle your magazine’s plastic wrap – check

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Publisher: Redactive Media Group Level 5, 78 Chamber Street London E1 8BL Tel:8BL (020) 7880 6200 E1 Tel: (020) 7880 6200 Art Editor: Yvey 'Weavy Woo' Bailey Picture Claire Echavarry, For saleseditors: and advertising please contact Charlie Hedges andy.penny@redactive.co.uk Production: ISSN 0957 4883Jane Easterman Printing: GD Web Off set © 2016 Chartered Insurance Institute.

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Local Institutes link you to a community of professionals for support, guidance, development, and advancement.

The CII’s network of 56 local Institutes help make careers more rewarding.

cii.co.uk/ďŹ vebigwords Local institutes are a constant source of support, inspiration and new possibilities

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PRESIDENT'S LETTER J O N AT H A N C L A R K

ALL CHANGE CII president Jonathan Clark highlights proposed changes to the CII’s bye-laws and Corporate Chartered status, alongside New Gen and recent charity work

CHARTERED CONSULTATION

we have now published the report directly to existing holders of Corporate Chartered status and through our member engagement channels. The report, which responds to the consultation process, sets out the direction that we plan to take for Corporate Chartered status in the coming years. We are seeking to reposition the proposition for the future. In this way, we are responding both to the consultation but also aligning more closely with the CII’s overarching purpose. Perhaps at the heart of the process is ensuring that Corporate Chartered continues to be clear as a shared public declaration of professional standards. Put simply, the Chartered ethos involves three core elements: nurturing knowledge, client-centricity and serving society.

Turning to another exciting initiative, the CII New Generation programme takes 40 CII members representing broking, claims, underwriting and the London market, and tasks them with challenging and improving current practices within their sector, making a positive impact on the insurance profession as a whole. The 2016 Claims New Generation group took on the task of looking at the subject of riot claims handling. While riots are not commonplace in the UK, they provide unique claims challenges, which the group recognised. They have now completed their riot claims handling best practices guide, which was recently published and is a really excellent document.

What I was pleased to see was a core objective that read like this – “to help riot victims, whether they are individuals or businesses, to get back on their feet following a traumatic setback”. And for me, that is a key reminder of what we are all here to do as financial services professionals, which is to help deliver financial protection to individuals and businesses alike, to permit ordinary daily activity to continue, often in extraordinary circumstances. ●

On a different note, we have been in consultation since August 2018 in relation to Corporate Chartered status and

Jonathan Clark, president, CII

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n the last few weeks, together with Nick Turner and Sian Fisher, I have taken part in three webinars to outline to local institutes, Corporate Chartered members and all individual members, a series of proposed bye-law changes that will come before the AGM. The purpose of these changes is to better position the CII to meet the challenges of the coming years.

If you have not had a chance to pick up on this activity, we have put a video of the latest webinar online for you.

In the offline world, I write this as I prepare to head out to a local institute dinner in Ipswich. I am delighted to see that this evening we will have a fundraiser not just for the Insurance Charities, but also for Suffolk Mind. Suffolk Mind provides a full range of counselling services and support mechanisms for all aspects of mental health. It is just one of the many good causes that our profession supports with fundraising; this is an activity we should never lose sight of, as we support those who need the help provided by these vital charities as well as the Insurance Charities.

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THE CHARTERED ETHOS INVOLVES THREE CORE ELEMENTS: NURTURING KNOWLEDGE, CLIENTCENTRICITY AND SERVING SOCIETY

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NEWS

FROM THE CII TWITTERATI »

@A l l i a n zN i geri a Back to school! #AllianzNigeria employees get admitted into the prestigious Allianz Underwriting Academy accredited by the CII #Insurance #Underwriting #NotToOldToGoBackToSchool #Allianz

@Tom S tore r _ I n s Sunny #London-bound for the Chartered Insurance Institute President’s Dinner at the @orncgreenwich. Great honour to attend representing the #CIINewGen. @CIIGroup #OldRoyalNavalCollege

@ I I L _ Lon d on Congratulations to the winning team from @matdanglobal on becoming the 2019 #YMCQuiz champions at last week’s YMC Charity Quiz @SteamWineBar - a HUGE THANK YOU to all attendees for helping raise an impressive £3602 for @starlight_uk

NEW GEN GROUP

CII NEW GEN GROUP RIOT CLAIMS GUIDE PUBLISHED

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The CII New Generation Claims Group has launched a landmark guide for the compensation of claims in the event of a riot.

The Riot Claims Handling Best Practice Guide was created in conjunction with the Home Office and sets out core procedures and technical guidance for handling compensation claims against local policing bodies for riot damage. The Association of British Insurers, the Chartered Institute of Loss Adjusters and the police also had significant input into the guide.

Large-scale riots are rare events in Britain but can be devastating when they occur. As well as shocking

R Claims Handling Riot Best Practice Guide CII New Generation Claims Group

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the country, the 2011 riots resulted in roughly £200m in claims paid out by insurers.

The new guide has been published to make the application of the Riot Compensation Act 2016 as clear as possible for those handling claims. Prior to the 2011 riots, the law had last been updated in 1886.

The New Generation Claims Group came together as part of the CII’s development programme, with claims professionals from across the sector participating.

To view the guide, visit: bit.ly/2KrxLuH

APPOINTMENTS R E G U L AT I O N

FCA WARNING FOR INSURERS The Financial Conduct Authority (FCA) is warning general insurance (GI) firms about manufacturing, sales and distribution approaches that can lead to customers purchasing inappropriate products, paying excessive prices or receiving poor service.

The FCA is warning the industry that it will not hesitate to intervene with both firms and their senior managers where it sees a failure to have appropriate regard to the value their ultimate customers receive.

The FCA expects all firms to review the findings and the expectations set out in the report and accompanying proposed guidance to identify any issues applicable to them, then to act immediately to address these.

The FCA has also written to the CEOs of all authorised GI firms to share these findings and its expectations.

NEW PROFESSIONAL STANDARDS COMMITTEE DIRECTORS ANNOUNCED The CII has appointed three new directors to its Professional Standards Committee, forming part of the trade body’s wider governance structure. The committee was formed to oversee and support professional competence and ethical behaviour across the CII’s membership.

Kate Wellington, head of legal operations at Which?, Mark Butterworth, managing director at Condie Risk Consultancy and Fairer Finance founder, James Daley, join the committee, which forms part of the CII’s wider governance structure, providing independent guidance on accountability, transparency and consumer representation.

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NEWS

@matrixc a pi ta l Great news today from the @CIIGroup @pfsconf confirming our Corporate Chartered financial planner status for the 11th consecutive year

@IICheltGlos Many congratulations to Sue Maizonnier FCII Chartered Insurer for her Lifetime Achiever award at the IICG Dinner on Friday night. Fully deserved

@PolicyBee Here’s our Lisa collecting her Chartered Insurance Institute Prize Committee Award 2019 last Friday. A huge achievement and very well deserved. Congrats Lisa, we’re dead proud

#CIIGroup Twitter

16,480 Followers and counting...

INSURING WOMEN’S FUTURES

THE MARCH OF THE AMBASSADORS In March, the CII held its very first Insuring Women’s Futures (IWF) Ambassadors event, which more than 120 people attended.

The event included the IWF steering committee, market taskforce and workstream chairs, giving delegates a chance to ask questions and discuss further ways to contribute to the programme.

Founder of the Women of the World Foundation, Jude Kelly, chaired a debate featuring many of the key people involved in the programme, discussing how women can be empowered to take control of their long-term financial resilience using the

insights that have emerged from the key CII IWF reports to date.

To see highlights, including interviews with a selection of ambassadors as well as key people involved in the event, visit: insuringwomensfutures.co.uk/events Read our article on the IWF workstreams on page 38 of The Journal

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H E A LT H

ISTOCK

NEW RESEARCH EXPLORES IMPACT OF HEALTH DATA The CII and SAMI Consulting are launching a new research project to explore how the digitalisation of medical records can improve access to protection.

As more medical records are digitalised and health data is collected on apps and wearable tech and voluntarily offered to health service providers, there is a wealth of underwriting data available to insurers. This new research project will explore how this can be used for the benefit of the customer to provide greater access to insurance and protection products.

In particular, customers with pre-existing conditions may benefit from faster application and claims processes, as it becomes easier for insurers to establish the facts, without having to wait for medical records. Currently, the

claims process can vary from days to weeks and this can be largely due to establishing medical information.

The CII and SAMI Consulting are consulting with a wide range of stakeholders across the medical profession, insurance sector and consumer groups to collect evidence for a report, which will be published later in the year. The report will lay the foundation for secure, ethical sharing of digital data to benefit consumers.

The project is also being supported by a working group of experts from AIG, iPipeline, Legal and General, Munich Re, Norton Rose Fulbright, Royal London, The Exeter and Zurich Life UK.

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NEWS

EVENTS

CII ANNOUNCES BUSINESSRELEVANT CONFERENCES The CII has announced that the second round of business-relevant Professional Focus conferences for its membership will take place this spring.

Professional Focus is the CII’s centralised continuing professional development (CPD) proposition for the general insurance sector and will deliver business-focused content to the CII’s professional insurance membership – both face to face and via digital platforms.

At the seven conferences, which will take place in various locations across the

UK, subject-matter specialists will discuss a diverse range of key trends and topics for the sector, including terrorism, cyber and blockchain.

These free events, which complement and support the local insurance institutes, enable the CII to deliver a range of relevant and diverse CPD opportunities for its members.

The first spring conference will be held in London (2 May), with further events taking place in Bristol (7 May), Liverpool (21 May),

Southampton (30 May), Belfast (3 June), Glasgow (12 June) and Birmingham (19 June).

For more information and to register, visit: bit.ly/2VBI1BJ

LETTER

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PLANNING PERMISSION PROBLEM

TA L E N T

CAREERS FAIR SUCCESS The Insurance Institute of Bournemouth has always tried to interact with local educational facilities and as part of this, a number of the council members have recently attended events within local Dorset schools to promote the insurance profession and wider financial services sector.

The events were a huge success with an excellent

turnout and the interest of young attendees was sparked by drone displays, smartphone and 3D technology. The institute is planning more events throughout 2019 while working to improve the format to deliver engaging and interesting information and promotional literature.

To find out more, visit: www.cii.co.uk/bournemouth

In a recent issue of The Journal there appeared an interesting article, entitled “The Rise of the Flood”, examining the problems faced by the insurance industry.

However, one of the biggest problems is not mentioned, namely the planning permissions given by local authorities for building new housing on flood plains and other highflood-risk areas.

In Cranleigh, Surrey, all of our flood plains are being built on, despite warnings from the local people. This includes 54 dwellings on the lowest flood plain and one that was completely flooded as recently as December 2013.

After 56 years in insurance, I believe it is my moral and professional obligation to let insurers know what is going on in council chambers, in the race to meet housing number targets.

I believe readers of The Journal will be shocked, with wrongful decisions being made that will have long-term consequences for both insurers and the poor people who buy these highflood-risk houses.

Regards, Richard Bryant FCII

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NEWS

CHARTERED

CII RELAUNCHES CORPORATE CHARTERED PROPOSITION The CII is relaunching its Corporate Chartered proposition for the insurance and financial planning profession. The proposition has been re-designed following extensive consultation with the profession, consumers and public bodies, to support the modern profession and its customers.

The refreshed Corporate Chartered proposition is built around a joint public commitment to professional standards from both the CII and Chartered firms. The Chartered ethos combines the shared commitments to nurturing knowledge, client centricity and serving society.

To bring this to life, the CII is focusing on five priorities:

4. EFFECTIVE OVERSIGHT The CII is changing the oversight arrangements to reduce unnecessary bureaucracy and to increase focus on public trust.

The CII is not a regulator but must nevertheless exert effective oversight to maintain and strengthen the credibility of Corporate Chartered status to the benefit of participating firms and wider society. The renewal process will be the primary tool used by the CII to check information and verify compliance and the CII will produce a range of good practice guides to support firms through the process.

5. SOCIAL IMPACT 1. ENHANCING THE VALUE

A focus on diversity and inclusion underpins the continuing The CII will promote Chartered relevance of the profession, but the CII recognises that practices status to the public via an will vary by firm size, type, location and many advertising campaign and other factors. The CII will expand its criteria around The refreshed Corporate Chartered ‘core values and business practices’ to encompass provide a toolkit to firms to help them to promote diversity and inclusion (D&I). This will be principles proposition is built around a joint Chartered status to their not rules based, so that it can be applied public commitment to professional based, customers, staff and wider according to the situations of different firms. standards from both the CII and stakeholders. It will also develop induction materials Sian Fisher, CEO of the CII, said: “Those working Chartered firms to on-board new professionals in the insurance and financial planning profession within the framework of the Chartered ethos together play a vital role in supporting consumers, businesses and wider with ethical learning and assessment materials. society as a whole, not only at the point of claim but throughout their lifetimes. It is my ambition that Chartered status achieves 2. RELEVANCE TO CHANGING BUSINESS MODELS parity of esteem with other chartered professions and this The CII is making the criteria more reflective of the broad range refreshed proposition will help us get there. of modern business models across the profession, so that all “We have carried out an extensive consultation with the employer types can be included. For example, updating the sector, consumers and public bodies on Corporate Chartered definition of a ‘division’ and ‘appropriate management team’. status to understand how we can make it more relevant to The CII is also launching a new Chartered title to reflect a modern profession in a modern world. As a result, we are the growth of the managing general agent (MGA) sector. investing in building awareness of what being Chartered means, At present, MGAs cannot meet the criteria to be a Chartered so that consumers will understand what they are selecting when insurer or a Chartered broker, yet many are keen to support they choose Chartered and professionals will understand the the ethos of Chartered. The CII plans to launch a new title Chartered ethos. of ‘Chartered Insurance Underwriting Agent’, subject to “We are living and working in a constantly changing world member vote. and the role of the insurance and financial planning profession is increasingly important to help safeguard the lives and 3. APPLICATIONS AND RENEWALS livelihoods of our society. We are very excited to launch the new The CII is simplifying the application process, starting with Corporate Chartered proposition and work with the profession the documentation; reducing the number of documents to be as we move into this next phase.” completed, and ensuring guidance and staff are available to For more details about the Corporate Chartered proposition support firms through the process. The CII will also move both and the consultation responses, please visit: the application and renewal process from paper to email, www.cii.co.uk/membership/join-us/chartered/corporateand plans over time to digitise the whole application and chartered/ renewal process.

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I N T E R N AT I O N A L N E W S

I N T E R N AT I O N A L

CII PARTNERS WITH SAUDI ARABIA’S FINANCIAL REGULATORS

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The CII has entered into a memorandum of understanding with the Saudi Arabian Monetary Authority and its Institute of Finance. This important international partnership reflects the value to Saudi Arabia of raising standards among its own insurance and financial planning professions, as well as the importance it is placing on attracting new talent to a market that is set to grow during the next few years.

This development represents a significant milestone as Saudi Arabia’s regulatory governing bodies adopt the CII qualification framework as their own, to be rolled out across the region in its entirety.

Forming part of the country’s own Vision 2030, wherein Saudi Arabia has committed to becoming a global model of excellence, the entire CII qualification syllabus from Award through to Advanced Diploma and Fellowship status, is being incorporated in the professional development academy.

During the past few months, the CII has entered into several international collaborations that form part of the

Keith Richards of the CII signs agreement with Saudi Arabia Monetary Authority

strategic manifesto of the professional body, which was launched in 2016 to grow its membership. Currently, the CII works internationally with regulators, educational bodies and trade associations in Asia-Pacific, India and the Middle East.

ASIA

CII ATTENDS INSURANCE INNOVATOR INDONESIA EVENT

Alpha Ho (centre right) speaks on panel debate

The CII took part in Insurance Innovators: Indonesia 2019 earlier this year. The conference was part of the Financial Services Indonesia event, which saw more than 450 senior representatives from Indonesia’s retail banking, general insurance and life insurance industries come together for two days of stimulating discussion and networking.

Alpha Ho, corporate development manager – Asia, CII, took part in a panel

discussion titled, ‘A strategic overview: the role of insurers in the platformdriven age’, debating how insurers can best prepare for platform integration in the next five years; the threat of disintermediation; and what future skills will be needed to prepare the workforce for future transformation.

Mr Ho emphasised that it will be to insurers’ benefits to enhance their employees’ technical competence through professional learning.

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I N T E R N AT I O N A L N E W S

HONG KONG

CII APPOINTS NEW REGIONAL DIRECTOR The CII has boosted its international team with the appointment of Kenny Siu as regional director of Hong Kong and Asia-Pacific.

Mr Siu has more than 30 years’ experience in both the general insurance and financial planning professions, and will be leading the CII-HK team to deliver broad engagement and growth of CII membership in both the domestic and international markets throughout the region, as well as strengthening established relationships in this part of the world.

Keith Richards, CII director of engagement, said: “We are really pleased to have Kenny joining us at such a strategically important time, when positive growth potential across the region is being aligned to the raising of professional standards.

“He brings with him a wealth of experience and insights into the general insurance and financial planning professions, and will be a true asset to the CII during our global expansion.

“With an ever-increasing need for highly qualified financial services experts across the whole of the Asia-Pacific region, Kenny will play a crucial role in ensuring that our members receive access to the training and qualifications that they need, while delivering the professional standards message of the CII to potential members and organisations.”

Mr Siu, commented: “I am delighted to be joining an organisation for which I have personally held respected for over two decades, and equally look forward to supporting a profession that I am passionate about and have always been proud to serve in. The power of insurance and financial planning plays a profound role in society and I look forward to playing a part in the further evolution of the profession.”

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HONG KONG

CII-HK SUPPORTED UNIVERSITY MENTORSHIP PROGRAMME

NEW AMBASSADOR NIGEL TAYLOR

The Chartered Insurance Institute Hong Kong (CII-HK) supported the Hang Seng University of Hong Kong’s mentorship programme in February.

The event provides opportunities for students to meet with insurance industry practitioners and to gain valuable insights from guests sharing work experience and case studies. The students are also able to discover how professional bodies’ continuing learning can further help them to advance in their careers.

Nigel Taylor has joined the CII as a goodwill ambassador for the Hong Kong region. He will assist the CII international team in promoting learnings and professional standards to support the building public trust in insurance.

Mr Taylor obtained an Honours Degree in law from the London School of Economics in 1999 and was called to the Bar by the Inner Temple in 2001.

He began his insurance career in 2002 as an in-house legal adviser to trade credit insurer and achieved the ACII qualification in 2008.

HONG KONG Join the Chartered Insurance Institute Hong Kong (CIIHK) group on LinkedIn now!

Visit www.linkedin.com/groups/4337279

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REGIONAL NEWS

7 M AY

PROFESSIONAL FOCUS CONFERENCE → 8:30 am – 16:10 pm Bristol www.ciiprofessionalfocus.co.uk

21 M AY

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PROFESSIONAL FOCUS CONFERENCE → 8:30 am – 16:10 pm Liverpool www.ciiprofessionalfocus.co.uk

M AY

PROFESSIONAL FOCUS CONFERENCE → 8:30 am – 16:10 pm Southampton www.ciiprofessionalfocus.co.uk

LIVERPOOL

PERFORMING BRILLIANTLY IN BUSINESS Have you got gravitas? Can you command a room? Have you got presence? Just some of the questions posed by Lisa Akkenson, from RADA Business, at the Insurance Institute of Liverpool Masterclass earlier this year.

With more than 20 years’ experience of working within the public and private sector in the UK and internationally, Ms Akkenson entertained, educated and encouraged students from the Institute to be the very best they could be.

Previously, the Royal Academy of Dramatic Art (RADA) had a reputation

for being elitist, but 25 years ago Rada Business was established as a social enterprise and, since then,has ensured that talent from every walk of life is recognised and celebrated.

Ms Akkenson has worked for more than 20 years with executives and at grassroots level. Her aim is to train and develop participants to have a voice and be the very best person they can be, using RADA Business methods.

With Ms Akkenson’s performing background, it was no surprise that her

training was extremely interactive. As an NLP Master Practitioner, she was able to understand her audience as she put her students through their paces.

Delegates left the event knowing how to walk and talk with gravitas and confidence.

For more information on the Liverpool Institute, visit: www.cii.co.uk/liverpool

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SUCCESSFUL MENTAL HEALTH EVENT

The Insurance and Actuarial Society of Glasgow’s programme of events continued with a successful lunchtime event on mental health attended by more than 200 members.

Mental health is now seen as an essential item on the agenda for any workplace, with benefits of a successful programme including talent retention, less long-term absence and higher rates of productivity.

The seminar was hosted by Petra Velzeboer, mental health consultant, psychotherapist, executive coach, podcast host and training provider.

Raised in a cult, Ms Velzeboer’s story is one of courage in the face of adversity.

She believes if we use empathy and generate human connection at work, we can create mentally healthy workplaces and enhance productivity.

One delegate commented: “I attended the event today to have a better understanding of how I should help other people in the workplace. I didn’t know what to expect as I have never attended an event like that before. I left feeling secure within myself, emotional at connecting with my feelings and the feelings of other people, as well as feeling like somewhere within my brain something had ‘clicked’.” → For more information, visit: www.cii.co.uk/glasgow

INSTITUTE EMBRACES ITS FS MEMBERS

The Luton & Hertfordshire Insurance Institute ran a joint PFS event with Milton Keynes Insurance Institute in March.

Lee Warren, of Invisible Advantage, a professional magician and mindreader delivered a workshop titled ‘Sales without Selling’ providing valuable solutions and giving delegates advice on how to stop chasing clients as clients are eager to make the initial approach. → For more information, visit: www.cii.co.uk/luton

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REGIONAL NEWS

3 JUNE

PROFESSIONAL FOCUS CONFERENCE → 8:30 am – 16:10 pm Belfast www.ciiprofessionalfocus.co.uk

12 JUNE

PROFESSIONAL FOCUS CONFERENCE → 8:30 am – 16:10 pm Glasgow www.ciiprofessionalfocus.co.uk

19 JUNE

PROFESSIONAL FOCUS CONFERENCE → 8:30 am – 16:10 pm Birmingham www.ciiprofessionalfocus.co.uk

CAMBRIDGE

ANGLIA MARKET FORUM The Anglia Market Forum, organised by the Insurance Institute of Cambridge, took place at the end of March and welcomed members from across the region.

Six leading lights from the insurance profession discussed a number of topical issues affecting the profession, both in the UK and internationally.

The comprehensive panel debate was chaired by David Williams, managing director underwriting and technical services at AXA Insurance, and included: Steven Cross, head of claims at Markerstudy; Laura High, director at Yutree Insurance; Sarah Darling, managing director at Coversure; Nick Watson, director of distribution and trading at AXA Insurance; and Melissa Collett, professional standards director at the CII.

One attendee commented, “Very good topical discussions that were very relevant to all brokers and insurers in the room. Great mixture of people on your panel.” → For more information on local events, visit: www.cii.co.uk/local

C H E LT E N H A M & G L O U C E S T E R

RECORD DONATIONS FOR CHOSEN CHARITIES The Insurance Institute of Cheltenham and Gloucester’s NewGen team have enjoyed a busy year, giving their time and working hard for their two chosen charities and are pleased to see their efforts result in record donations.

Part one of the team’s focus was an appeal to assist Cheltenham Animal Shelter with its ongoing search for blankets, sheets, towels and food. The NewGen’s awareness raising and collecting surpassed previous achievements, resulting in a special visit by both two- and four-legged friends from the shelter to show their thanks.

In January, attentions turned to Gloucester Foodbank, with a determination by the team to beat their previous best of 99kg in donations. The NewGen team were pleased to be able to confirm recently that 114kg of food donations were handed over in 2019, setting another new target for future support.

The Insurance Institute of Cheltenham and Gloucester’s 2018/2019 deputy president, Simon McGill, said: “We would like to express our thanks to all members and companies that continue to help and support the institute, particularly Ecclesiastical, Ageas, Brunsdon, PIB, Pro and A-Plan.”

Glasgow Institute @IASGCII are proud to announce a new prestige Experienced Professional Award, giving us the opportunity as a local institute to recognise our experienced members with +10 years’ experience Sussex CII @sussex_cii A very rewarding and enjoyable introduction to Deaf Awareness and British Sign Language from Kathleen Grehan for @sussex_cii

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CII Edinburgh @CII_Edinburgh And the results are in.... we’ve now issued the invitations to our awards ceremony that will be held on 11 June at Burness Paull’s office on Lothian Road, to celebrate all your wonderful achievements

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CLAUDIO

GIENAL

HOW WE TRAIN AND DEVELOP PEOPLE IS KEY. AT AXA, WE CURRENTLY HAVE MORE THAN 100 APPRENTICES AND MORE THAN 70 OF THEM STUDY THROUGH CII ACCREDITATION

Habitat for learning Claudio has a master’s degree in environmental/ environmental health engineering from ETH Zurich university in Switzerland.

Building business He is a board member for Axa Konzern in Germany and Switzerland-based insurance start-up JAROWA and a council member of the British Swiss Chamber of Commerce.

Strategic move Claudio joined Axa in July 2017 as chief strategy development officer, European markets and served as member of the European Management Committee.

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THE INTERVIEW: CLAUDIO GIENAL

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laudio Gienal’s ascent across the professional landscape has seen him traverse an array of lofty peaks and challenging terrains. A trained environmental engineer from Switzerland, Mr Gienal began as management consultant at Accenture before moving into software engineering, specialising in railways.

Returning to consultancy, he joined McKinsey & Company, spending time at banks and financial institutions and even consulted on the production lines at Nestlé, perfecting the manufacturing process of the Kit Kat. But after 10 years at Zurich before joining Axa in 2017, and now appointed CEO of Axa UK and Ireland, Mr Gienal’s true calling is insurance. “I am still driven by the difference we can make to people’s lives and businesses, how we protect what matters to people and help them when they need us most,” he says. “When I had to choose between banks and insurance, the decision was easy for me. I see the value insurance offers to individuals, SMEs and large corporates, and there is such a great reason for us to be here.”

Axa Commercial Lines was one of the very first insurers to be awarded Chartered status by the CII. Demonstrating commitment to professionalism and the highest standards of ethical behaviour are still very much at the heart of Mr Gienal’s message.

“We spend a lot of time at Axa making sure that insurance is recognised as a profession and reinforcing what our purpose is in the wider society,” he says. “Our commitment here is clear and we want to give our team the right tools to be good at what they do. CII courses are a big step towards that, as well as getting them outside their environment here and out into the world of insurance.”

Getting the right skills in the right place is vital, according to Mr Gienal, and giving young people a variety of routes into the profession is increasingly important as insurers look to the future.

“How we train and develop people is key. At Axa, we currently have more than 100 apprentices and more than 70 of them study through CII accreditation.

“We are very mobile in the way we look at education and how people move through their careers, which I think is brilliant.

Intellect is only one piece that is required and we aim to give people the chance to develop in their own way with the skills

they have, so I am very supportive of apprenticeships,” he says.

“Many things are changing in insurance but what remains true is that you need people with good judgement. Key skills that I want people to have are that they believe in themselves, what they do and that they are thinking for themselves, because they all make a difference. We have 10,000 employees supporting our customers every day and I want them to be empowered, have the knowledge to make decisions and be sure that they have the tools to do so.”

STAYING ON TRACK Axa’s ‘Ambition 2020’ strategic plan is already well underway and aims to continue on its growth track in a challenging economic environment.

Mr Gienal tells us: “We have five priorities this year, primarily focused on ensuring the foundations are there to build on when the new strategy is launched next year.

“We are looking to simplify process and structures to ensure we focus on value add for our customers and meaningful work for our people.

“Another priority is technical excellence,” he says. “We have our underwriters, our claims team and our actuaries, who are all very proud of what they do and rightly so, but real technical excellence only comes when they all work together.

It is about making sure that these people with very different skills and views come together, have the right discussions and work as one.

“So ensuring we have the right foundations in place is very important, as well as looking beyond 2020 and what that holds,” he adds.

The future looks bright for Axa and Mr Gienal’s spirit and positivity will be vital in guiding the business into the next decade.

“My hope is that we as a profession are better able to articulate to people what we do and why it is meaningful,” he says. “We do something that is very beneficial to society and to individuals but for some reason it is difficult to get people to understand what we are trying to achieve.

“I hope we continue to keep up the highest standards and we continue to take our responsibility seriously. Working together will allow us to give the best service to customers, to drive transparency and to give the right outcome when they need us,” says Mr Gienal, “and if we can do all that it will go a very long way.” ●

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THE VIEW FROM THE SUMMIT Axa UK and Ireland’s Swiss CEO Claudio Gienal talks to Luke Holloway about his commitment to raising the profile of the insurance profession thejournal.cii.co.uk thejournal.cii.co.uk/ /Th Th e eJournal Journal/ /April April--May May2019 2019

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POLITICAL RISK

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ising geopolitical and geo-economic tensions are creating uncertainty on the global stage. Faced with this additional risk, businesses are having to rethink the way they operate.

For Rachael Anstock, UK head, credit and political risks at Zurich Insurance, this uncertainty stems from a move away from the globalisation trends that have been in place since the 1960s.

“Protectionism is rising around the world,” she explains. “This affects trade flows but also the way people are used to doing business. We’ve lost certainty of the way we should behave.”

INFORMATION OVERLOAD Also helping to fuel the current tension is a change in the way that information is delivered. Views can be broadcast instantly on social media and, as some of US President Donald Trump’s tweets have illustrated, without the moderation that political relationships have enjoyed in the past.

Ed Nicholson, senior partner, credit, political and security risks at JLT Specialty, says the speed of information transfer serves to magnify tensions.

“The resultant uncertainties are fanned by uneven economic growth, which in turn feed the same issues in an unforgiving vicious cycle,” he explains.

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GLOBAL TRENDS

EUROPEAN UNCERTAINTY Closer to home, there is plenty of uncertainty on the European stage too.

Brexit epitomises this, with politicians and businesses still unsure as to when, how and even whether the UK will leave the EU. While it may dominate the UK media, it is not the only thing shaping Europeans’ political risk.

The EU parliamentary elections in May, plus the search for a successor for Germany’s Chancellor, Angela Merkel, also have the potential to cause significant disruption.

Spain’s political landscape is also highlighted as a cause for concern in Marsh’s report, due to a 4.2% drop in its short-term political risk index score. This stems from ongoing political instability, with the current government unlikely to last the full term and unrest continuing in Catalonia.

RISING POLITICAL RISK As a result of all of this upheaval, Europe was one of the regions where respondents to the Willis Towers Watson survey felt political risk was rising, with 70% saying this, just behind the Middle East with 73%.

However, the sentiment is tempered, with just 11% concerned that the risk is rising dramatically in Europe, compared to 27% and 25% for Russia and North America respectively.

Spain’s fortunes are also typical of another global trend, the rise in populism. This has been seen in the US, with President Trump; Brazil with the election of Jair Bolsonaro; and also in India with its Prime Minister, Narendra Modi.

It is also a trend that has taken hold in Europe. “Recent elections in Italy, Spain and Hungary have all seen this shift,” says Ms Anstock. “It’s a further example of the shaking of all the assumptions that have underpinned everything for the last 30 years or so.”

GETTY

The effect of these trends can be seen in Marsh’s Political Risk Map 2019. It identifies the ongoing trade dispute between global giants, the US and China, as the leading cause of uncertainty for global trade, with

further escalation of this in 2019, hitting export-heavy economies such as Germany hard.

Russia also remains a hotspot on Marsh’s map. Tensions with the West are likely to continue, especially while it supports the Syrian regime and eastern Ukrainian rebels.

The risks associated with trading with Russia are also highlighted in the Annual Political Risk Survey Report

by Willis Towers Watson and Oxford Analytica. This reveals that Russia was the country where political risk losses were most frequently reported, with Vietnam in second place.

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POLITICAL RISK

MANAGING RISK With political risk rising, businesses need to be mindful of how it might affect their operations. Many are already seeing an increase in losses, with Willis Towers Watson’s report pointing out the fact that 55% of global organisations with revenues of more than $1bn experienced at least one political risk loss exceeding $100m in 2018. “It’s a challenging time to be operating in any cross-border trade,” says Ms Anstock. “Businesses need to be sure they have reliable information to enable them to understand the risks involved.”

While risk insight is essential,

political risk insurance can serve as the ultimate backstop, says Mr Nicholson.

This can protect a business’s balance sheet against what can often be a catastrophic risk, but a bespoke policy is a must. “A mining or oil company’s concerns will be very different to those of a power generator, a telecom network operator or commodity trading company,” he says.

“Political risk affects people in very different ways.”

And, with growing uncertainty pushing up risk around the world, understanding how it could affect operations and putting appropriate safeguards in place is prudent.

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SHIFTING SANDS With protectionism and populism on the increase globally, Sam Barrett examines the ways in which businesses can be affected – and how political risk cover can help

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POLITICAL RISK

POLITICAL RISK 55% of companies with $1bn+ revenues have suffered a political risk loss exceeding $100m (Annual Political Risk Survey Report, Willis Towers Watson)

60% of companies say political risk has increased since 2017 (Willis Towers Watson) 43% of political risk losses suffered exceeded $100m (Willis Towers Watson) 68% have scaled down operations in a country as a result of rising political risk concerns (Willis Towers Watson) Global growth to decelerate from 2.9% in 2018, to 2.8% in 2019 and 2.6% in 2020 (Economist Intelligence Unit)

The Journal is asking readers to let us know what they think about political risks and to what extent the profession itself is affected by political change.

Maybe you could consider the following questions... ● Are insurers and the insurance industry being proactive

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enough about addressing political risk or should more be done? ● Is rising political risk affecting your business? ● Do you feel social media has a positive or negative affect on the political situation around the world? ● Do you feel social media has an effect on insurance and financial professions?

If you wish to get in touch, please email our editorial team at luke.holloway@cii.co.uk We’re happy to receive named responses or keep your answers anonymous if requested.

Thank you to all our readers who got in touch after our last issue about dual pricing and customer loyalty. We received a great reaction and a selection of the responses are available online at: thejournal.cii.co.uk ●

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17/04/2019 09:55

R E G U L ATO RY R A D A R

FCA PUBLISHES GI DISTRIBUTION CHAIN REPORT

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THE FCA DIRECTORY

The FCA has published the long-awaited final The UK Financial Conduct Authority (FCA) has identified rules on the proposed new Financial Services “significant potential for harm and poor outcomes” for Directory. Following the FCA’s consultation during customers, arising from the product development and the summer/autumn of 2018, the emphatic pproaches in distribution approaches industry view is that a directory of those working some sectors of the within financial services would be a positive move ance general insurance towards increased accountability and consumer (GI) market, protection. The FCA has been at pains to highlight following the that the FS Directory will promote transparency publication by requiring firms to disclose a relatively of a thematic granular level of detail on their staff (including review. membership of relevant accredited bodies such The as the CII), and by ensuring that the directory is Insurance rolled out using user-friendly, online functionality.

Distribution The Policy Statement can be accessed at: Directive bit.ly/2HchN533 enshrines the ct principle to act ly “honestly, fairly nally” and professionally” The CII takes a look at what’s in accordance with the best interests of the customer, h policy and public new on the while the Senior Manager and affairs front this month Certification Regime is designed to ensure that senior managers are accountable for the actions of their firms.

The CII has been clear in its response that rather than focusing on the ‘potential’ for harm and the FCA’s promise of further action where necessary, FCA CONFIRMS INCREASE IN FINANCIAL the value that the regulator is placing on the ‘spirit’ OMBUDSMAN SERVICE AWARD LIMIT of good outcomes for consumers rather than rigid The Financial Ombudsman Service (FOS) is now compliance should serve as welcome news for the able to require financial services firms to pay vast majority of firms that deliver such outcomes for significantly more compensation to consumers and consumers every day. businesses. The current £150,000 limit will increase The CII’s response: to £350,000 for complaints about actions by firms Delivering good outcomes is often a tough challenge on or after 1 April 2019; and for complaints about – research for the CII Public Trust Index shows that there actions before 1 April that have been referred to the are nine different factors that need to be satisfied to FOS after that date, the limit will rise to £160,000. gain public trust (see bit.ly/2JdVo5y).

The new award limit comes into force at the We will be working to give the support that same time as the extension of the service to larger professionals need to deliver on all these nine factors – SMEs These are firms with SMEs. by providing high-quality insights into consumer fewe than 50 employees, fewer attitudes like the Public Trust Index, good practicee with an annual turnover of guidance on new risks and regulation, and, mostt less tthan £6.5m and with an importantly, building communities of likeminded annu balance sheet total of annual professionals who can share good practice with each nd the less tthan £5m. An additional other, such as the Society of Insurance Brokers and 210,0 SMEs will now be 210,000 Society of Claims Professionals.

JtA eligib eligible to complain to the FOS. Read the FCA’s thematic report at: bit.ly/2VLTJtA Rea Read the full statement at: and the ‘Dear CEO letter: FCA expectations of GI firms’ bit.ly bit.ly/2Tzg4gG at: bit.ly/2KFyxo3

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WHAT’S ON THE RADAR?

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HOT TOPIC – FUTURE OF MOTORING

HOT TOPIC

RISE OF THE ROAD BOTS 20

Much has been said and written about the future of autonomous vehicles but there are plenty of changes already afoot that are set to change the future of driving thejournal.cii.co.uk / The Journal / April - May 2019

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HOT TOPIC – FUTURE OF MOTORING

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ften, people discuss autonomous vehicles as if one day we will be driving our own cars and the very next day the machines will have control.

But of course, it is not that straightforward and developments mean that we have varying stages of autonomous vehicles on the road at the same time and also that we have different ways of powering vehicles – again, it means any number of types of vehicles on the roads at one time.

This is set to provide plenty of challenges for drivers – and their insurers.

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ILLUSTRATION :VASAVA

ELECTRIC AVENUE Take electric cars. Powered by batteries, these vehicles launch at incredible speed when fully charged – but cut to a maximum of 50km/h as the battery drops to 30% capacity.

Imagine the scene as vehicles hurtle down the motorway and the car in front suddenly slows without warning for other vehicles or even for its driver.

This is becoming a real risk for European motorists. By the end of 2018, industry analysts EV-Volumes were reporting that plug-in vehicle sales in Europe reached 408,000 units in 2018, 33% higher than in 2017. There are now more than one million electric cars across Europe.

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HOT TOPIC – FUTURE OF MOTORING

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With the European Environment Agency (EEA) recently concluding that electric cars are “clearly preferable to petrol or diesel cars”, it is no surprise the market is growing.

Andreas Unterstaller, the EEA’s transport and environment expert, says: “The EU as a whole has been channelling billions of euros into relevant research for the last decade and is pushing for a rapid expansion of the charging infrastructure. It is also investing heavily and promoting alternative fuel infrastructure, which includes electric-vehicle chargers, especially on the main European transit corridors.

“Finally, the EU is making common rules and standards for electric vehicles and the charging infrastructure, so you can move about freely in Europe.”

Elsewhere, Munich Re has just announced insurance for battery performance, albeit aimed at large projects in the energy sector. Peter Röder, member of the board of management at Munich Re, says: “The ability to insure battery performance is a key piece of the puzzle in decarbonising our energy sector. For the first time, battery manufacturers can insure against the risk of their products not delivering as promised.”

For insurers, the development of insurance products around this emerging technology is key. There has been a spate of fires involving battery-powered vehicles and there are questions around the weight of the batteries, should a vehicle be involved in an accident.

Insurers and insureds also have questions about the experience of drivers, repair shops and even cargo handlers of these batteries, which all carry highly flammable lithium.

Liability insurers, marine cargo insurers and even property insurers are being urged to check policies to ensure they fully understand the risks to which they are exposed, including: • Would a property insurer expect a claim from an electric-bicycle fire in an underground car park that not only damaged many other vehicles but also the vehicle itself? Probably not, but that has already happened.

• Would a marine cargo insurer expect to foot the bill for a cargo fire that spreads through the entire vessel?

Again, a very real threat.

• And would the liability insurer expect to be picking the tab for third-party claims after such an event?

However, despite these challenges, the market for electric vehicles is growing and insurers are being asked for workable solutions.

FINALLY, THE EU IS MAKING COMMON RULES AND STANDARDS FOR ELECTRIC VEHICLES AND THE CHARGING INFRASTRUCTURE, SO YOU CAN MOVE ABOUT FREELY IN EUROPE

McKinsey says that for robotaxis, the first at-scale commercial operations could be available as early as 2020-2022, while platooning – groups of trucks closely following one another – could arrive any moment, offering more efficient fuel consumption due to aerodynamics.

In fact, there are trials involving, for example, lorries carrying heavy cargos along a tightly defined track. One such experiment in Singapore has allowed the cargo-site owner to add massively to the loads carried from one end of the port to another.

McKinsey suggests that the gradual introduction of the technology will mean increasing ‘clever’ cars. “In the near term, advanced driver-assistance systems (ADAS) technology will be important as the market prepares for full autonomy and seeks to increase profits from AV-critical technology capabilities. The market for ADAS could double by 2021, reaching $35bn in reve revenue,” states the management consu consulting firm.

MYTHBUSTING – SAFER DRIVING MYT

COMPUTER DRIVING But what of autonomous vehicles?

Experts continue to say it will be another decade before autonomous vehicles are commonly out on the road.

The questions seem to be not about the technology but around the societal issues of vehicles choosing between another vehicle and a pedestrian if an accident looms, and also around the thorny issue of liability.

Insurance lies at the heart of this conversation, it seems.

According to McKinsey there are two key use cases to watch: robo-taxis (selfdriving, e-hailing) and autonomous commercial trucking. While a phased evolution of robo-taxi technology and autonomous commercial driving will bring near-term disruption, widespread adoption is not expected until 2030.

How However, H Ho the Transport Research Laboratory Lab La L ab (TRL), a global centre for iinnovation nn and transport systems, has yet to be convinced that ha autonomous vehicles will deliver au aall the expected results.

It says public perception surrounding the impact of automated vehicles from a road accident perspective needs to be reviewed. Viewpoints including that road fatalities will reduce to zero in an autonomous world are not only false, they need to be analysed and answered with fact-based, real-world information and research.

Rob Wallis, CEO for TRL, says: “The three current barriers to automated vehicles becoming a reality are the insurance industry, the regulatory environment and public perception.

“People want to know these technologies are safe, [and] if they will decrease accidents and provide societal benefits surrounding road capacity and congestion.

“Automated vehicles will make roads safer and as a result, there will be a reduction in deaths and serious injuries,

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HOT TOPIC – FUTURE OF MOTORING

but it will take time and it won’t ever be perfect. There will never be zero deaths on roads in any future that vehicles and pedestrians share the same space – that’s the real societal challenge people have to get their heads around.”

TRL concludes that some challenges the UK will face are: • Insurance providers are not set up for a connected future; • Infrastructure is not sustainable for an exponential increase of vehicles on our road networks; • Developers and authorities need to address the lack of regulations for driverless vehicles; • The UK must consider shared mobility, smart cities, connected and autonomous vehicle regulation, and ultra-low emission vehicles.

So, it is no surprise that the UK government is looking at this.

THE LAW People using driverless cars should still not take their eyes off the road, if they could be expected to take over the vehicle at short notice in an emergency, the International Underwriting Association (IUA) states. Unless a vehicle is highly automated, users should be banned from performing other tasks and legally required to monitor their journey.

The Association gives its views in a response to a consultation exercise on the future of automated vehicles, undertaken by the Law Commission.

Chris Jones, IUA director of legal and market services, says: “It is essential that an effective framework is established governing their operation. Insurers have a vital role to play in this process.

“For liability to be established and claims rapidly settled, vehicle data must be recorded and made available.

This will include, for example, the status of the automated system,

whether engaged or disengaged, the speed of the vehicle and any camera footage from the time of the accident.

It is imperative that innocent victims should not be penalised due to insufficient data being available about the role of automated technology in relation to an accident.”

33% RISE IN PLUG-IN VEHICLE SALES IN EUROPE IN 2018, TOTALING 408,000 Mr Jones adds: “As information expands and usage grows, we are likely to see potential vulnerabilities highlighted and new risk areas emerge. We anticipate that the technology will be capable of selfreporting system errors, defects and other issues affecting road worthiness.

“Comprehensive data recording and collection will go a long way to ensuring risks are adequately covered and any legislation remains relevant,” he concludes.

AUTOMATED VEHICLES WILL MAKE ROADS SAFER AND AS A RESULT, THERE WILL BE A REDUCTION IN DEATHS THE ROAD AHEAD AND SERIOUS INJURIES, lawyers BUT IT WILL TAKE TIME AND However, at Kennedys say the IT WON’T EVER BE PERFECT government needs to

do much more to bring stakeholders together to successfully implement autonomous vehicles in the UK, stating: “We very strongly believe that the government needs to work centrally to further facilitate meetings and communication between various stakeholders, and in particular between insurers and manufacturers.”

Kennedys also says that the role of the “user-in-charge” – the person operating the controls of the automated vehicle when not in autonomous mode – must be made clear now and cannot wait until the technology further develops.

“The key issue here is being very clear as to when and at what point a human user-in-charge becomes liable from both a criminal and civil

perspective for the operation of the [autonomous vehicle]. This will be heavily dependent on evidence as to how and when the autonomous systems took control, whether they should have taken control, and how and when the user tried to take back control,” state the Kennedys lawyers.

The firm is urging caution when assigning criminal liability to a user-incharge for failing to take steps to avert the risk of serious injury: “Assessing whether the user-in-charge could have taken steps to avert a serious injury/accident would be highly factsensitive. We believe the onus on the user in those circumstances would be far lower compared with the driver of a manual vehicle.”

Kennedys says legislation should be amended to place the onus on manufacturers to ensure, by design, that autonomous vehicles cannot start their journey until safety-critical software updates are uploaded or it is confirmed that such software is already up to date – in much the same way that many vehicles will not allow the driver to set off if their seat belt has not been put in place.

It also says that manufacturers will need to ensure that consumers have a clear understanding of what the autonomous vehicles and their automated features can and cannot do.

In addition to mandatory training when users first purchase a new autonomous vehicle, it also calls for training and skill checks to be introduced to the core driving test for users in charge.

Whatever the outcome of the Law Commission consultation, it is clear that the future of driving is set to change – and that much of that change is already underway.

The questions for insurers are clear: can the sector provide the workable and affordable policies that the motor industry is looking for? And are insurers prepared to develop policies for the motor manufacturers that move the liability of an accident from the individual to the corporate?

Time will tell, but in the meantime we are all racing towards a future in which the computer controls the vehicle, rather than the driver. ●

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ENVIRONMENT

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panish and French cities have joined a growing number of communities to ban diesel and even petrol vehicles in a bid to limit pollution.

The cities, including Paris, Barcelona and Madrid, have not only limited vehicles travelling into the heart of the city but also developed rolling systems to protect much wider areas. Vehicles need special licences to continue driving and, in the case of Madrid, these licences are not available for foreign-owned cars.

In the UK, the pollution conversation stepped up a gear when the attorney general quashed the inquest into the death of Ella KissiDebrah at the age of nine, after new evidence linked her death to air pollution spikes from traffic near her home in south London.

Ella lived 25 metres from the heavily polluted South Circular Road in Lewisham. An expert had linked her death to the dangerously high levels of pollution from diesel traffic that breached legal limits.

Jocelyn Cockburn, a partner at the law firm Hodge Jones & Allen, who represents the girl’s mother, Rosamund Kissi-Debrah, says: “An inquest will provide a better understanding of why she died and whether her death was avoidable. It will force the government and other bodies to account for their actions and, in many regards, their inaction on air pollution over this period.”

Meanwhile, a recent Guardian newspaper investigation revealed children at more than 2,000 schools and nurseries across England and Wales are being exposed to illegal levels of damaging air pollution from m diesel vehicles.

Last year, it also emerged that children were absorbing a disproportionate amount of dangerous pollution on their way

to and from school; and while in the classroom. One school was found to have levels several times above the World Health Organisation guidelines for the most damaging particulates, inside several of its classrooms.

GOVERNMENT RESPONSE In response, the UK government published its Clean Air Strategy in January, which “shows how we will tackle all sources of air pollution, making our air healthier to breathe, protecting nature and boosting the economy”.

In its report, the government admits transport is a significant source of air pollution emissions.

“The immediate air-quality challenge is to reduce emissions of nitrogen oxides in the areas where concentrations of these harmful gases currently exceed legal limits,” it says.

The government has already committed more than £3.5bn to tackle poor air quality through cleaner road transport and is working closely with local bodies. Alongside this, the government is committed to cutting air pollution from all forms of transport.

It states: “We published Road to Zero, which sets our plans to end the sale of new conventional petrol and diesel cars and vans by 2040. We will position the UK as the best place in the world to develop, manufacture and use zero-exhaust-emissions vehicles and, during the transition, we will ensure that the cleanest conventional vehicles are driven on our roads.”

DIRTY DIRT DI RTT Y WORK WO RK Top three industries for notified environmental impairment liability events are:

Transport, comms, electric, gas and sanitary

Manufacturing

Construction Source: AIG

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ENVIRONMENT

The strategy extends to all forms of transport, including the aviation and maritime sectors, while the government has plans for new legislation to compel manufacturers to recall vehicles and non-road mobile machinery for any failures in their emission-control system; and to take effective action against tampering with vehicle emissioncontrol systems.

INSURING THE RISK Broker Marsh makes the point: “Environmental risks are rising up the boardroom agenda, with environmental losses having the potential to adversely affect a company’s reputation more than ever before.”

It also warns: “Environmental risks related to the protection of water resources, impacts to human health, and the maintenance of biodiversity and the quality of the environment, may result from the activities of industry.

THERE IS A LACK OF AWARENESS FROM COMPANIES ON BOTH THE TYPE AND POTENTIAL SCALE OF ENVIRONMENTAL LIABILITIES THEY FACE ACE “For multinational companies, complying with the wide range of environmental regulations, including liability for causing damage to the environment under the European Union Environmental Liability Directive, and others, means environmental exposures threaten the achievement of successful business outcomes.”

A recent report from AIG notes that environmental impairment liability claims in the past 12 months, “once again demonstrate that insureds’ environmental exposures are far from static”. AIG adds that there is growing public awareness of environmental issues and increasing regulatory

pressure across Europe to carry out inspections and make the polluter pay.

It warns that now, more than ever, companies needed to reassess their approach to environmental risk management and stress-test their coverage to ensure it would respond as expected in the event of a loss.

“Insureds think it will never happen to them but quite clearly – as reflected by the claims statistics for the past 12 months – it can and does,” says Wilson Hull, environmental major loss adjuster, AIG. “No matter how good your risk management practices are, ultimately you may have an environmental incident that you need to deal with,” he adds.

Lastly, the Association of British Insurers states: “Recent UK and EU legislation has significantly increased the potential costs of remediating damage caused.

Environmental issues need to be dealt with rapidly to protect the reputation of your business.” ●

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KEEPING IT CLEAN GETTY

With climate change at the forefront of so many news stories, companies are being forced to behave in a greener and more ethical way than ever before. But what of the insurance element?

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WHOLESALE MARKET

CLEAN BILL OF HEALTH

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IIt’s t official – the UK’s wholesale broker market has the all-clear from the Financial Conduct Authority and is free to operate as normal

he UK’s wholesale broker market has breathed a huge sigh of relief after the Financial Conduct Authority (FCA) gave the sector a clean bill of health.

In a first, the FCA has closed its market study without further action beyond the usual monitoring.

London Market Association CEO Sheila Cameron said: “We are actively pursuing technological advancements such as PPL, which should increase market efficiency and allow us to continue to provide complex and comprehensive insurance solutions, together with world-leading claims handling, at the most competitive rates for our policyholders.”

Steve White, chief executive at the British Insurance Brokers’ Association, added: “The fact that the FCA closed this assessment at an unprecedented early stage is a welcome step and validates our view that the wholesale

insurance market is a highly competitive place.

“It is also welcome that the FCA intends to deal with any follow-up matters on a business-as-usual supervisoryled basis.”

ONES TO WATCH

FIGURE 1 Brokers’ revenues in 2016 broken down by the location of the risk insured Australasia 3%

Unspecified 6% Europe 40%

Asia 6% Middle East and Africa 7% South America 6%

North America 32% Source: FCA analysis of broker data request

While the sector as a whole got a clean bill of health, the FCA did have some concerns and will continue monitoring: ● Firms’ management of conflicts of interest ● The information firms disclose to clients ● Contractual agreements between brokers and insurers that, in a small number of cases, have the potential to limit competition.

Christopher Woolard, FCA executive director of strategy and competition, said: “This was a significant and indepth analysis of a sizeable and complex market to determine whether clients were at risk of harm.

“Encouragingly, we found no evidence that they were, but we found some areas with scope for improvement and we will work with the industry to ensure these are addressed.”

ROLE OF INSUREDS As part of the process the FCA conducted a survey of insureds, which found: ● On the whole, the London insurance market (LIM) works efficiently, providing global access ● The LIM is used to access its niche capacity, expertise and knowledge that is rarely available elsewhere ● The choice of wholesale broker is generally well informed and is tested

from time to time; insureds generally have high levels of satisfaction with service, both pre-sale (quote, underwriting) and post-sale (claims, admin, documentation) ● Insureds are aware of charges and feel commissions/fees are largely transparent (for brokers perhaps more than for some corporates) ● Almost all feel they get very good value for money ● Additional services are available and often included for added value, although insureds feel that wholesale brokers are not especially proactive or innovative ● There is every opportunity to switch wholesale broker if needed, with emotion (relationship/trust) the main barrier rather than physical barriers (admin, etc) ● The LIM is built on individuals’ expertise, knowledge and understanding of risk, leading to robust and lasting personal relationships; it remains a relationship business.

The research also identified some potential issues, including: ● Three respondents mentioned the use of restrictive practices between brokers and underwriters, including ‘blocking’ arrangements in which underwriters working with a broker on a specific risk refuse to quote on that risk for another broker ● Four respondents said broker charges are not fully transparent in some instances. Their concerns relate to reinsurance placements and levels of commission for certain classes of insurance ● In some instances, it was claimed there is too much compliance and lack of consistency when implementing increased regulations. ●

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17/04/2019 10:10

ADVERTORIAL

LEAVE NOTHING TO CHANCE

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etting it right is a fine balance for anyone in a service orientated industry and we’re extremely aware of that here at British Engineering Services. We are proud that our industry-leading service has never been better – we do what we say we’re going to do and our customers value that. They trust us to keep them safe, that’s our priority and it will never change. Maintaining our commitments whilst continuing to grow presents an ongoing challenge and we’ve worked hard to achieve this since forming as an independent business. It hasn’t all been easy, but with an ongoing focus on capacity and in turn, recruitment and training we ensure we have the right people in the right place at the right time.

In its simplest and most explicit form, industrial safety can be a matter of life or death. We don’t get to choose the outcome when something goes wrong, but here at British Engineering Services we can help to reduce the chances of that happening. It’s not just about getting the job done and moving on. It’s about providing the highest quality inspections, and we’re both happy and well equipped to do this via a number of different routes.

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Who we work with is everything to us and supporting our broker partners is always at the top of our agenda. In a world where speed and efficiency count for so much, making our services available on leading eTrading platform Acturis, makes perfect sense.

Working with Acturis brings with it a whole host of benefits including fully integrated documents, accounting and reporting – eliminating the need to re-key and ensuring data integrity.

It means we’ve already done a lot of the leg work behind the scenes to make it as simple as possible for brokers to get exactly what they need, quickly and efficiently. And there’s no other product like ours on Acturis – we’re the only engineering inspections services available and it will stay that way for the next 12 months.

Of course, this solution doesn’t work for every business and some require a different approach when it comes to their engineering inspections. Where large, complex plant lists exist over multiple locations, working in partnership with our customers to make sure everyone gets home safe is imperative. Using mobile reporting technology, our highly skilled engineer surveyors can submit their reports accordingly before they’ve even left site, without any fuss or delay.

Regardless of the solution, our innovative technology and longrange planning process gives our

customers visibility of their scheduled inspections. This not only means that we can schedule our examinations around their specific requirements, but it helps ensure our excellent service levels in even the busiest of periods.

We’ll be at BIBA 2019 and will be delighted to talk about our range of market leading solutions, helping our broker partners provide the very best and most efficient service and proposition to their customers. ● Gareth Hilton is Chief Commercial Officer at British Engineering Services

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WHO WE WORK WITH IS EVERYTHING TO US AND SUPPORTING OUR BROKER PARTNERS IS ALWAYS AT THE TOP OF OUR AGENDA

17/04/2019 10:11

H U R R I C A N E A N A LY S I S

VIEW FROM ABOVE Since Hurricane Ike, technology has evolved to help insurers improve their insight into the risk and costs associated with natural disasters and respond quicker and more eďŹƒciently

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H U R R I C A N E A N A LY S I S

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n September 2008, Hurricane Ike ripped through portions of the Greater Antilles and the southeast of the US and caused extensive storm surge flooding, wind damage and rainfall flooding across all of Harris County, Texas, and surrounding counties. Ike is still known as one of the deadliest and most expensive storms in US history, costing an estimated $34.8bn.

Texas was the hardest hit.

Hurricane Ike racked up nearly $12bn of windstorm and flood insurance claims in the state, after pummelling Galveston on 13 September 2008.

The storm proved to be the costliest weather catastrophe in Texas history by a large margin.

Since Hurricane Ike, there have been significant developments in technology and geospatial analysis to help the insurance and reinsurance industries better prepare for and respond to natural disasters.

Intelligence obtained from images acquired by satellites and drones, often derived using machine learning algorithms, is increasingly becoming a vital part of disaster response. Such advancements in data collection and analysis allow insurers to better monitor locations in near-real-time with drones, capture satellite and aerial imagery, synthesise visual intelligence to rapidly assess potential losses and, potentially, to settle claims within hours.

DATA, DATA EVERYWHERE From the moment a hurricane starts developing, the monitoring of different news and weather outlets begins, gathering any existing data that gives information of property locations and land surface height, and also any pre-existing imagery that can portray the situation before the storm hits.

Traditionally, in the aftermath of a storm insurers use experienced loss adjusters, which is inevitably time-consuming. Ten years ago, there was very little satellite data available and it was typically expensive. Fast

to ten years ago, when there were probably about ten to 12 useful earthobservation satellites and it could take weeks to get a good image – particularly if the weather was cloudy.

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SATELLITES CURRENTLY IN ORBIT GENERATING USABLE DATA AND IMAGES forward to today and the availability of commercial imaging satellites has evolved from being incredibly scarce to being totally commoditised – and therefore very affordable.

The reliability and availability of data has also significantly improved.

For example, to predict any potential storm surge from a hurricane, Geospatial Insight will take readily available terrain height data and weave that into a surge model to rapidly predict likely flood depth.

High-resolution satellite imagery can be collected to get a holistic view of the affected areas and the properties in them. When there is interest from insurers and reinsurers in large towns and cities or, in particular, high-value properties, aircraft or drones may also be flown to capture imagery in the immediate aftermath of the storm event, gathering immediate data for damage and severity analysis.

This ability to source highresolution data today has led to greater accuracy. Now, with more than 350 satellites in orbit generating usable data, detailed images can be rapidly obtained of every property in an affected area. Compare this

THE ROLE OF AI With speed of response being critical, the increasing ability to use artificial intelligence (AI) to derive meaningful intelligence from imagery is vital.

Thanks to the evolution of this technology, and of cloud computing, sophisticated analysis of hurricanerelated damage, including severity analysis at a property-by-property level, can now be rapidly generated and delivered quickly and securely via an online portal. As a result, damage assessment can be shared with customers straight away Despite insurers’ efforts to better understand the consequences of natural disasters, property losses continue to torment the industry.

However, in the last decade since Hurricane Ike, the convergence of computing power, machine learning, AI and satellite imagery has become a compelling mix that has become appealing to insurers looking for better data collection in the aftermath of a storm.

Already, the cost to access the data is starting to reduce and is now much cheaper than when Ike, Wilma and Rita occurred – and the quality of the information is higher.

The leap from estimating damages to accurate analysis can carry big bottom-line implications for the insurance industry. As more satellites become available and AI techniques improve, insurers will increasingly reap the benefits that advanced technology can bring to the field of pre- and post-disaster assessment. ●

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THE LEAP FROM ESTIMATING DAMAGES TO ACCURATE ANALYSIS CAN CARRY BIG BOTTOMLINE IMPLICATIONS FOR THE INSURANCE INDUSTRY

Dave Fox is CEO of Geospatial Insight www.geospatial-insight.com

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17/04/2019 10:12

LOCAL INSTITUTES

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always better than having to say you don’t know but you’ll gladly find out,” continues Mr Wakefield. “Being able to explain things well to people makes the job more enjoyable and makes me more confident too.”

The Leeds Institue events keep the information flowing, as the Marsh man explains: “It’s a great benefit as it’s provided for you; all you have to do is attend the events, be willing to learn, and take on board what you hear.”

KNOWLEDGE IS POWER

Similarly, creating a rapport with clients demands more than doing the job – it requires a wider appreciation of the business context, which can be enhanced by what you know, but equally by the people you meet. There again, the local institute can help.

“I recently attended the Emerging Insurance Professionals Group launch,” explains Mr Wakefield. “It brings together a lot of people in similar roles, as well as those in different parts of the profession.” But crucially, it’s not in a specific work context. “As a relative newcomer to the city, being part of the Leeds Institute is enabling me to build my professional network, while benefitting from all the training, education and learning opportunities on offer.”

More knowledge comes from such interactions and appreciation of other parts of the business. So for people like Mr Wakefield, expanding your knowledge beyond the job role has unexpected benefits.

It helps you deliver a better service by contextualising information for clients and more fully explaining the circumstances surrounding insurance decisions. And that in turn increases the general sense of fulfilment and the feeling that your career is creating wider benefits.

he best performers know their subject, but they are also curious about everything else.

Drawing knowledge from unlikely places fuels ideas, leading to a richer service and stronger client relationships.

“I started my career in insurance in London, but my wife and I decided to move due to commuting times and costs, as well as the expensive house prices in the southeast,” says Daniel Wakefield of Marsh insurance brokers. “We both agreed on Leeds; the city has a thriving insurance hub yet is really close to so many areas of outstanding natural beauty.”

Mr Wakefield is studying for the CII Diploma, supported by the Leeds Institute. He is one of 12 on the programme.

“Formal study is key to progression,” he believes. “It builds up your knowledge in a structured way, while keeping you motivated to improve, which increases your confidence as you develop your on-the-job skills.”

But Mr Wakefield rates range of knowledge as highly as depth: “You also learn a lot about peripheral aspects through modules about finance and the legal background to insurance, which can really help you.”

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But how do you acquire the magpie-like quality that enables you to pick up gems and store them away for future use? Well, it’s all available to any member pitching up at local institute events.

And Leeds is very active. “There’s always plenty going on; the monthly lunchtime lectures are particularly interesting,” continues Mr Wakefield. “I find it’s always worth going, even if the subject may not appear relevant to me at first glance.

“I often come away having learnt something that will be useful,” he maintains. “These sessions work in a similar way to the course content – the more you learn, the more you can use that knowledge in business.”

So direct relevance does not always matter – there is often something in it that you can draw on later.

“If a client asks you a question about some topical aspect of insurance, you’ve got the information to hand, and that’s

SOFT SKILLS

For more information, visit: www.cii.co.uk/fivebigwords ●

A THIRST FOR KNOWLEDGE One local institute attendee explains how the knowledge available creates confidence and satisfaction in doing more for clients thejournal.cii.co.uk / The Journal / April - May 2019

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17/04/2019 10:13

New CPD

Reducing Risk: Why Insurer $SSURYHG 3DQHOV RÈ´ HU (QKDQFHG Property Protection Kingspan Insulated Panels is running a series of 20 minute lunchtime CPD webinars for property insurance and professional indemnity experts, aimed at providing an understanding of how the use of Kingspan insurer-approved panels mitigates WKH ULVN RI È· UH VSUHDG DQG KDV WKH VDPH LPSDFW RQ maximum foreseeable loss and premiums as non-combustible solutions.

The session with cover: – Common Misconceptions: Understanding the GLȴ HUHQFH EHWZHHQ $OXPLQLXP &RPSRVLWH Panels and insulated sandwich panels, and why not all insulation is the same; – Insurance Industry Requirements: The importance of insurer-driven and insurerUHFRJQLVHG ODUJH VFDOH ȷ UH WHVWV DQG – Real Fire Case Studies: IndependentlyLQYHVWLJDWHG UHDO ȷ UH FDVH VWXGLHV SURYLQJ WKH VXSHULRU ȷ UH SHUIRUPDQFH RI .LQJVSDQ insurer-approved PIR core insulated panels This learning can be included as part of your CII CPD requirement should you consider it relevant to your professional needs.

Numbers will be limited so act now to secure your place on one of the free-to-attend webinars. For registration GHWDLOV RU WR È· QG RXW KRZ WR ERRN D IDFH WR IDFH session at your premises, visit: NLQJVSDQSDQHOV FR XN È· UH HGXFDWLRQ

CII.04.2019.031.indd 31

15/04/2019 13:53

CRYPTOCURRENCY

COINING IT IN? As Bitcoin and other cryptocurrencies move into the mainstream, the need for insurance coverage increases, as Tim Evershed explains…

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$10m WORTH OF ASSETS CAN BE KEPT IN A CRYPTOCURRENCY ‘HOT WALLET’ USED FOR DAILY TRADING thejournal.cii.co.uk / The Journal / April - May 2019

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CRYPTOCURRENCY

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ryptocurrencies, including Bitcoin and a range of other digital assets, continue to enter the mainstream of finance, with increasing numbers of companies and countries now accepting them as valid forms of currency.

Nevertheless, new and fastevolving technologies create new risks for investors, traders and exchanges.

Developers and operators are prone to human error, while valuable assets will always present tempting targets to criminals.

In 2014, Japan’s Mt. Gox exchange lost more than $400m of Bitcoin, most likely stolen by a rogue trader, causing the exchange to file for bankruptcy. And the multimilliondollar loss suffered recently by investors at Canadian cryptocurrency exchange QuadrigaCX once again highlighted the risks of holding digital assets.

So, it is unsurprising that the insurance market is receiving an increasing number of requests for cryptocurrency-related cover.

Policies presently available include coverage for private key theft and other hacking and cyber-type risks.

Insurers are also offering directors’ and officers’ (D&O), while fidelitytype risks for businesses such as cryptocurrency exchanges are being explored, as well as Initial Coin Offering (ICO)-related risks.

insurance and its balance sheet and assets,” says Sarah Downey, US D&O product leader at Marsh.

“It could also protect the assets of that company’s customers. As the blockchain industry has grown, there has been more of a recognition that insurance is involved in every industry and can really help increase the brand behind an industry.”

Ms Downey continues: “When a company has the appropriate insurance coverage in place, banks and outside investors tend to see it as a better investment, thus it can get capital to do the things it needs to innovate and grow. And if there is a loss, it has the safety net to stay afloat and continue to grow where others may lag behind.

“More insurers are getting involved in offering coverage in this space, although many remain hesitant.”

Great American Insurance Company offered the first Bitcoin insurance coverage to businesses in 2014.

The Great American policy covers employee dishonesty, money and securities forgery, as well as computer fraud, with additional coverages available as endorsements.

Now, a handful of major global insurers – including XL Catlin, AIG, Chubb, and Mitsui Sumitomo Insurance – are offering protection against cryptocurrency risks.

There also specialist insurers, such as Bitcoin Financial Group, as well as Coinbase and Elliptic Enterprise, that sell policies that insure bitcoin storage. In general, these policies will protect a company from theft as well as losses resulting from errors in the technology used to provide whatever service the company offers.

Insurers offering coverage in the London market include XL Catlin, Neon’s Tarian brand and a number of Lloyd’s syndicates. There also some managing general agents, some

WHEN A COMPANY HAS THE APPROPRIATE INSURANCE COVERAGE IN PLACE, BANKS AND OUTSIDE INVESTORS TEND TO SEE IT AS A BETTER INVESTMENT, THUS IT CAN GET CAPITAL TO DO THE THINGS IT NEEDS TO INNOVATE AND GROW

ALAMY

INCREASED DEMAND “As the blockchain and digital asset industry continues to mature, we have seen an increase in demand for insurance coverage in general.

Insurance coverage serves a number of purposes, including protecting the company that purchases the

with Lloyd’s capacity, like Nexus Underwriting, operating in the sector.

RUNNING HOT AND COLD As there is a difference between stealing physical dollars from a bank and stealing Bitcoin, the crime market has evolved to cover both cold storage and hot storage. The former is where assets are held within an Air Gap computer with up to six different encryption keys. A hot wallet, meanwhile, is used in a daily trading basis and has up to $10m of assets in it, but because it is connected to the internet it can be hacked.

“The crime market has evolved to look at those different types of risks and you can get coverage for this on the cyber side as well,” says Rachel Turk, leader of Beazley’s D&O practice in London. “Typically at the moment, it is the traditional insurance products because from a D&O perspective they are still companies; their business model may be different but the process of underwriting is the same.”

She continues: “It is a complicated space but part of the reason for that is because it is so jargon-heavy.

So, it seem more complicated than it is. If you can explain it in words of one syllable, then investors will understand it and regulators will understand it. That makes it a better risk.

“Within [that], there are people that are evangelical about cryptocurrency, who say it is the way of the future and it is here to stay. Then there are an awful lot of naysayers who point to the volatility of Bitcoin and say it is not sustainable. You don’t need to be evangelical or a naysayer, because it is a company offering a product like any other company offering a product. You can buy into that idea or not.”

For the time being, it certainly looks as if cryptocurrencies are here to stay.

As the use of cryptocurrencies becomes more widespread, more companies will use digital assets and, as a consequence, organisations across many industries could find themselves exposed to these risks and will look to the insurance markets for protection. ●

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17/04/2019 10:15

MODERNISING THE CII

CHANGING OUR BYE-LAWS As the CII prepares to make significant changes to its Bye-laws, we explain what’s being proposed and how you can vote

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he CII is proposing changes to its Bye-laws, which form part of its constitution, as part of the proposals referred to at the Annual General Meeting on 26 June. As Members of the CII, you are entitled to vote and we would encourage you do so.

More detailed information about the changes is available on our dedicated web page – www.cii.co.uk/aboutus/governance/modernising-the-cii – and you can email any questions through to us via bye-lawchanges@cii.co.uk

CHANGES TO THE BOARD The CII’s Strategic Manifesto reinforced its commitment to become a modern, relevant and diverse organisation. An essential part of this journey is ensuring that governance structures are modern and transparent.

The UK Corporate Governance Code 2018 advises that: “A successful company is led by an effective and entrepreneurial Board, whose role is to promote the long-term sustainable success of the company, generating value to stakeholders* and contributing to wider society... the Board and its Committees should have a combination of skills, experience and knowledge.”

Following a review of current governance, the CII is proposing the following improvements to its Board structure: 1) The appointment of an Independent Chair of the Board.

Having an Independent Chair rather than the President acting as Chair will enable the President to focus on their ambassadorial role. The Chair will be appointed for a maximum of six years.

This will ensure greater consistency and will allow the CII CEO, Company Secretary and Executive Management Team to be able to work with the Chair on a long-term basis so that the Board can drive strategy, ensure compliance with relevant regulations and governance practice, and progress the CII’s public trust agenda effectively.

The Immediate Past President will no longer sit on the Board but will transfer to the Past Presidents alumni group, which meets with the Executive Management Team.

CII and from outside of the profession) and the Chairs of the PSC and ELC will continue to be lay.

3) The Board will have four Engagement Member roles – These roles will be open to any CII Member who has current experience of member engagement (such as LI Council Members, Members of PFS regions, Members of the International Advisory Groups, etc) and mechanisms will be developed to ensure that the Member roles can engage with all Members (ie attendance at a bi-annual webinar). *Denotes where “shareholder” referred to in the Corporate Governance Code has been replaced with “stakeholder” to reflect the CII not having shareholders.

2) The Chairs of the four Board Committees will be full Board Members – Audit and Risk Committee (ARC), Education and Learning Committee (ELC), Nominations and Remuneration Committee (NRC) and Professional Standards Committee (PSC). The current Board composition requires two Board Members to be lay (meaning not Members of the

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MODERNISING THE CII

INTRODUCTION OF NEW CHARTERED TITLE – CHARTERED INSURANCE UNDERWRITING AGENT We have obtained outline approval from the Privy Council, which is responsible for approving new Chartered titles, to introduce the Chartered Insurance Underwriting Agent title – and we now want to give our Members the opportunity to vote for the new title at the AGM. There is a significant community within our Membership who do not align to the Chartered titles that are currently available to Institute Members. To prevent confusion for consumers, we are looking to introduce the Chartered Insurance Underwriting Agent title for the Managing General Agents among our Membership.

MODERNISING GENERAL MEETINGS (INCLUDING THE AGM) To modernise our General Meetings, we are introducing the ability for people to receive the notice and attend/vote at General Meetings electronically. This is to ensure that all our members can participate, wherever they are based in the world.

The CII also plans to make minor updates to the following areas of its Bye-laws which relate to general meetings: • Introducing a more inclusive quorum; • Introducing a filter for Member motions; • Requisitioning Special General Meetings (SGM).

Full details of this can be found online at: www.cii.co.uk/about-us/ governance/modernising-the-cii

OTHER CHANGES The CII would also like to make lesssignificant updates to the following areas of its Bye-laws: • Vice-Presidents to be qualified CII Members; • Rationalising Affiliated and Associated Institutes; • Rationalising requirements for Fellowship and Associateship.

Full details of this can be found online at: www.cii.co.uk/about-us/ governance/modernising-the-cii

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HOW DO I VOTE? Hard-copy voting form – If you receive a hard copy of The Journal or PFP, then voting papers will have been provided in your magazine. Everyone else will have papers sent to them. You can complete these forms and post them back to the address provided.

Electronic voting – All Members with an up-to-date email address registered with the CII will be able to vote electronically. Instructions for how to follow this process will be provided in an email about voting which will be sent. Any vote cast electronically will override any hard-copy vote.

Voting at the AGM – Our AGM will be held at 11.30am at The Principal York, Station Road, York, YO24 1AA, United Kingdom. All Members are invited to attend and vote. Any vote cast in person will override any previous vote.

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C O R P O R AT E C H A RT E R E D

PROTECTING CORPORATE CHARTERED STATUS 36

Melissa Collett explains why Corporate Chartered status from the CII is more important than ever in the digital age

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n our digital age, consumers are becoming more knowledgeable about the goods and services they buy, and as a result are expecting higher standards from companies across all industries. Consumers look for indicators to help them identify companies who strive for better consumer outcomes. This is why Corporate Chartered status is becoming more important than ever.

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C O R P O R AT E C H A RT E R E D

GOVERNANCE Corporate Chartered status demonstrates that a firm has made a commitment to a published code of ethics, to provide knowledgeable advice backed up by qualifications and continuing professional development (CPD), and to seek good customer outcomes. As part of the CII’s recent consultation, a number of consultees said how important it was to ensure that Corporate Chartered firms continue to meet these requirements.

That is why the Corporate Chartered status is governed by a contract which requires compliance with a set of Corporate Chartered status rules (the ‘rules’). These aim to protect the reputation of the CII, the Corporate Chartered status mark (which includes the logo containing the title itself), and the profession as a whole.

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CONTRACTUAL RELATIONSHIP It is important to understand that the CII is not a regulator, and as such cannot impose regulatory style sanctions on firms that are in breach of the rules. This means that the CII cannot impose fines, remove permissions or act on matters that are regulatory in nature, nor is it a substitute for the courts, for example in relation to potential claims of negligence. Any matters that fall within these categories should be pursued with the competent authority, such as the regulator, or where appropriate, the Financial Ombudsman Service or the courts, who have the jurisdiction to consider such matters.

Instead of a regulatory relationship, the CII has a contractual relationship with Corporate Chartered firms. Firms that currently hold Corporate Chartered status are required to comply with the rules at all times during their annual membership period, and failure to comply with the rules, could lead to the withdrawal of Corporate Chartered status. If this happens, it is important that any determination made by the CII is followed within any specified time-frames, to prevent the misuse of the Corporate Chartered status. The above sanction can be considered as a ‘worst case scenario’, for example when a Corporate Chartered firm breaches a fundamental principle of the CII’s Code of Ethics or fails to inform the CII of a regulatory sanction.

However, despite the CII having the discretion to impose sanctions for breach of the rules, we want to be able to work collaboratively with Corporate Chartered firms to adopt more of a ‘prevention is better than cure’ approach to breaches of the rules, especially if that ‘cure’ results in the removal of a firm’s Corporate Chartered status.

The CII encourages Corporate Chartered firms to be open and transparent with the CII if a firm believes they are in breach (or may potentially be in breach) of

the rules. By engaging with the CII at the earliest stage possible, we can work together to provide guidance and support to ensure that a potential breach can be remedied and prevented from re-occurring. This can avoid issues of non-disclosure of a potential breach from arising, which can sometimes make cases more difficult both for the firm and the CII. The CII’s motto of ‘Standards, Professionalism, Trust’ remains at the heart of the work the CII does.

If the standards and professionalism of the CII’s members and Corporate Chartered firms are clear, then we are collectively one step closer to securing public trust in the profession. However, the CII cannot maintain these standards without the cooperation of Corporate Chartered firms. The Corporate Chartered mark is a sign of a valuable commitment, and the CII, with help from Corporate Chartered firms, will always seek to protect the value of the Corporate Chartered brand.

For more information on Corporate Chartered status, including complete editions of the current rules and guidance, please visit www.cii.co.uk/membership/ join-us/chartered/corporatechartered/ ●

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Melissa Collett is professional standards director at the CII

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17/04/2019 10:50

INSURING WOMEN’S FUTURES

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nsuring Women’s Futures is part of a wider Insuring Futures programme led by the CII in collaboration with a wide variety of leading insurance professionals, businesses, policy and third sector organisations, together with experts on issues relating to women’s risks. It was established as part of the CII’s remit to improve public trust in insurance and personal finance and to ensure the profession remains relevant in serving the whole of society.

This article includes an update on the programme and how it is progressing the manifesto for change.

BACKGROUND AND PROGRAMME PURPOSE The aims of the programme are two-fold: to help address women’s significant lack of financial resilience with a view to supporting women and men across society to help improve women’s, and all of our, financial security; and to enable the insurance and financial planning profession

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to develop its relationship with female consumers.

The programme is evidence-led through research authored by Jane Portas, one of the Insuring Women’s co-founders and Women’s Risks in Life lead, also a partner at PwC. Securing the Financial Future of The Next Generation identifies 12 key financial risks facing women through the life course (called Perils and Pitfalls) and 6 Moments that Matter where interventions may be made by women and men in society, financial services firms, employers, regulators and policymakers. Solving Women’s pension deficit to improve retirement outcomes for all is a deeper dive into the root cause of women’s pension deficit. Both reports together with our Female Financial Wellbeing Guide can be downloaded at: www.insuringwomensfutures.co.uk. This widely publicised and acknowledged research forms the backbone to Insuring Women’s Futures’ public manifesto for change sponsored and delivered by our Market Task Force and supported by individuals and firms across the profession.

LOOKING TO THE FUTURE

We get a recap on the work being done to combat the risks facing women and meet the new workstreams aiming to make an impact thejournal.cii.co.uk / The Journal / April - May 2019

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17/04/2019 14:40

INSURING WOMEN’S FUTURES

12 PERILS AND PITFALLS IN WOMEN'S LIVES The images featured highlight the 12 key risks facing women in the UK leading to poor financial outcomes. There are many socio-economic factors that lead to these Perils and Pitfalls and the 6 Moments that Matter, featured on the following page, aim to support women and girls to pre-empt these risks.

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A

s the Insuring Women’s Futures Manifesto gathers momentum, the experienced executives leading its workstreams explain how they are approaching their respective tasks.

Here, we speak to our workstream chairs to find out more about the challenges they have been set and hear them explain how they have been approaching the task.

The workstreams have been in operation for about six months. In the first phase of their work, they have been mobilising their teams, gathering raw evidence, and engaging with a large number of stakeholders, organisations and experts.

WOMEN’S RISKS IN LIFE: COMMUNICATIONS VIA KEY PARTNERS Work with strategic partners to communicate insights from the two reports: Securing the Financial Future of the Next Generation and Solving women’s pension deficit to improve retirement outcomes for all.

JONATHAN HOLLOW Head of financial capability, strategy and Innovation, Money and Pensions Service If men are part of the problem, they are certainly needed to be part of the solution. Our workstream is following the honourable motto: ‘Simplify, then exaggerate.’ We’re trying to work out the most essential messages from the wealth of data that the programme has generated to date, and find the influencers who will benefit from hearing them most.

PENSIONS POLICY GAMECHANGERS To develop proposals to improve women’s pension provision throughout the life course, and open dialogue with government, employers and wider society to help bring about change.

YVONNE BRAUN Director of policy, long-term savings and protection, Association of British Insurers Our workstream brings together a terrific group of people from across the long-term savings sector, policy and research experts, lawyers and consumer advocates. We are gathering evidence from politicians and campaigners to ensure our hypotheses and ultimate proposals are well evidenced and take account of the existing work in this field.

We need to tackle this as a society and the programme is a great opportunity to make a real difference. →

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17/04/2019 10:27

INSURING WOMEN’S FUTURES

6 MOMENTS THAT MATTER

WOMEN’S PENSIONS EMPOWERMENT To educate, engage and empower women to significantly increase the contributions they are able and choose to make to their pension through their lives.

The Moments reflect that all of our lives are different and that many of us will experience these Perils and Pitfalls at different stages across the life course.

The Moments are equally relevant to men and boys as well as women and girls.

JACKIE LEIPER

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Distribution director, Scottish Widows I was delighted to get involved as I was leading the women and finance activity at Scottish Widows, where our research on women and pensions in particular had grabbed my attention, and I was alarmed at the extent of the pensions gap between the genders.1 My workstream has narrowed our areas of interest down to three key areas of motherhood, divorce, and the role of employers. The group has many ideas around more targeted information and education to women at key life stages.

1. Growing up, studying & requalifying

2. Entering & re-entering the workplace

3. Relationships: making & breaking up

4. Motherhood & becoming a carer

5. Later life, planning & entering retirement

6. Ill-health, infirmity & dying

YOUNG FEMALES’ FINANCIAL AWARENESS Positively shift societal support for women in building their financial resilience and independence.

CHERYL AGIUS CEO general insurance, Legal & General We need to give women much more confidence in taking ownership of their financial affairs so they can discuss it more openly with friends and in relationships.

My workstream looks at specific Moments in the younger generation’s life that may be critical, and how we can engage them more in some of the decisions they make both for their current lifestyle and their future security.2

FEMALE FINANCIAL INCLUSION STANDARDS To develop and promote standards in the insurance and financial planning profession that will improve the financial inclusion, engagement and resilience of female customers.

DAVID HERTZELL Consultant The statistics in the two key research reports: Securing the Financial Future of the Next Generation and Solving Women's pension deficit to improve retirement outcomes for all reports show both an unacceptable protection and pension gap for women and a missed opportunity for the market.

A draft professional standard is being prepared, joining up the FCA’s consumer outcomes approach with principles that can be applied across all business functions, including marketing, sales and distribution, customer service, claims, complaints and compliance. These principles will then be embedded within the profession through CII learning material with case studies based on representative consumer personas.

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17/04/2019 10:28

INSURING WOMEN’S FUTURES

MARKET-WIDE ‘MOMENTS THAT MATTER ’ To lead changes in market practices that support greater financial resilience for women by enhancing customers’ awareness and understanding of how our solutions and services respond in their Moments that Matter.

JOANNE MUSSELLE Chief underwriting officer - retail, Hiscox The research was my motivator; it is both compelling and shocking. While I had seen some similar statistics before, what was really surprising to me was the compound impact over a lifetime and how early choices influence the gap.

Our workstream has fantastic representation from across the industry and I am grateful that so many have committed their time. We have created sub-teams, working with the benefit of additional expertise in the fields of life, health and general insurance. We are working to analyse and create sector recommendations for each of the Moments that Matter.

FLEXIBLE WORKING To address the impact of parenthood and caring on the financial security of women working in the insurance and financial-planning profession.

EMILY COX Director of public affairs, Virgin Money The shocking results of the indepth Insuring Women's Futures research3 revealed that key Moments that Matter negatively affect the financial vulnerability of women. In 2019, we must take action because fairness and equality for everyone will undoubtedly improve behaviours, culture, productivity and financial resilience for men and women.

Together, the insurance profession is a significant employer in the UK. Our aim is to achieve a culture change that improves the lives of everyone working in the sector, both now and in the future.

‘INSURING WOMEN’S FUTURES’ MANIFESTO

There are 5 pillars to the public manifesto which seeks to address the key Perils and Pitfalls relating to improving financial awareness, enabling better pensions outcomes for women addressing relationship and caring impacts, and as part of this enhancing part time and flexible workplace practices for all. Our manifesto also focuses on how the profession can enhance its approach in Moments that Matter through the way we serve consumers.

We currently have 800 ambassadors but we are always looking for more to help us spread the word, reach new audiences, provide input on areas of expertise, sponsor events and media profile to help realise change, embed the Moments that Matter into business practices, and simply to keep up to date and engage in our programme and work generally. Please take a moment to visit insuringwomensfutures.co.uk where you can find a wealth of material including a short video and downloadable documents. In the top right-hand corner, follow the link ‘Become an Ambassador’ for more information about the role and to join the programme. ●

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Notes 1. Only 37% of females aged 18-24 years feel very confident managing their money compared with 48% of males. Female apprentices earn 21% less than male apprentices due to the sectors they choose to work in; only 17% of those studying degrees representing the higher paid jobs of the future are women.

2. 4/5ths of millennial women do not discuss pensions with their partners, and notwithstanding married women’s pensions are 1/5th of married men’s, 75% of divorcing couples do not discuss pensions sharing. On top of this, over 1/3rd of people don’t realise that cohabitees do not enjoy the same legal rights as married couples – the median pension for separated women in zero. 50% of people falling below the auto enrolment threshold are part time of which 80% are women.

3. 61% of mothers return to work part time, earning 30% less per hour than full time women causing the gender pay gap to double from 9% (full time only) to 18%. With women earning 80% less than men over their lifetime this has significant implications for their life long financial resilience.

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17/04/2019 10:28

TA L E N T

42

A new programme supported by the CII aims to increase the diversity of those looking to get into insurance

I

n recent years, the insurance industry has worked hard to increase its appeal to students, raising awareness of the variety of professional careers on offer. Pioneering initiatives such as Discover Risk and London Insurance Life have been successful in increasing diversity in applications for entry-level positions.

Our next challenge is to level out the playing field for applicants and provide support through the recruitment process to those who do not benefit from pre-existing industry connections.

Into Insurance is an employability programme designed to do just that.

The programme provides assistance to individuals without the advantage

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of an industry network, looking to enter the insurance industry.

Delegates who meet specific eligibility criteria will be invited to attend a three-day training programme hosted at the CII offices.

The programme will give them skills to help them navigate the recruitment process, as well as key industry knowledge and understanding what is often expected by employers recruiting at the entry level.

Following the training programme, all delegates will receive one-to-one coaching and will be paired with a buddy working within the industry.

The programme, which will be delivered three times during the course of 2019, is fully funded by corporate sponsors committed to

increasing diversity within the industry. We would like to thank the Worshipful Company of Insurers Charitable Trust, Liberty Specialty Markets, Lockton Companies and Tindall Riley, which have already signed up to support the programme.

Into Insurance has been established

by Samantha Ridgewell ACII and Anna Wright FCIPD. Using their extensive knowledge and experience of developing young professionals in the industry, Samantha and Anna will empower delegates with the tools and confidence to launch successful careers in insurance.

If you would like to find out more or are interested in being a corporate sponsor or buddy, please email: info@intoinsurance.co.uk ●

17/04/2019 10:29

N AT I O N A L A P P R E N T I C E S H I P W E E K 2 0 1 9

REACHING OUT The CII was heavily involved in the recent National Apprenticeship Week as George Tsounias reveals…

T

his year’s theme for the 12th annual National Apprenticeship Week – ‘Blaze a Trail’ – aimed to highlight the benefits of apprenticeships to employers, individuals, local communities and the economy.

This year, more than ever, we saw a positive change of attitude in the way apprenticeships are viewed by the wider public.

For too long, students have been encouraged to apply to university without the consideration of other, more suitable, alternatives. The message that university is not the only route to a successful career is really starting to get through and it is a change that is ultimately driven by key decisionmakers in a young person’s life; the parents or guardians and the schools.

To mark the week-long celebration, events took place up and down the country.

NATIONAL APPRENTICESHIP SHOW – SANDOWN PARK On 5 and 6 April, the CII exhibited at the National Apprenticeship Show for London and the southeast at Sandown Park. With more than 100 exhibitors, this apprenticeship event was organised to provide schools, individuals and the wider community with the opportunity to hear and speak to current apprentices and to understand the wealth of opportunities available in the apprenticeship world.

With an estimated 15,000 attendees across the two days, we spoke with attendees about opportunities in the world of risk and personal finance at entry level. It was nice to see students approaching stands with an open mind and leaving perceptions at the

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REACH ACROSS DISCOVER RISK SOCIAL MEDIA DURING NAW2019

door to find out more about different professions.

With the help of the CII’s relationship executive Rhian Morris, along with current Lloyd’s apprentices Kieron Price, Isabel Pratt and Nathan McArthur, there was certainly a buzz around the CII stand. During the course of the two days, we spoke with about 500 people. Attendees really valued listening to current apprentices and how, despite being encouraged to go to university, they had blazed their own trail.

My personal highlight was speaking with the large number of students that approached us independently to find out more about opportunities in risk and personal finance.

ALL FOR ONE… All this would not have been possible without your continued support.

Whether you helped at a fair, assisted at a discover event or helped in any way during the week to help raise aspirations and increase awareness, thank you! Without your help, commitment and enthusiasm, our reach and impact would not be as great.

If you took part in an event and want us to share your story in a future edition, please contact me: george.tsounias@cii.co.uk ● George Tsounias is relationship manager – education

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17/04/2019 10:30

STUDY ROOM

A-Z OF…

DRONE SURVEYING Mark Matthews takes an alphabetised look at the use of drones in the world of risk management.

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mall, unmanned aerial vehicles, more commonly We are also able to calculate reinstatement or restoration values known as drones, are widely available for with more certainty. commercial use. While drone technology has CLAIMS ROLE been around for a number of years, its application However, the benefits extend beyond risk management. The for the insurance sector is still being explored.

3D BIM is a valuable tool to claims departments in the event As a specialist insurer of heritage and listed of a major loss. The images and data captured from our risk properties, Ecclesiastical might not be the first name that assessments provide excellent detail to support the restoration comes to mind when you think of drones. However, historic and reinstatement of architectural features. and ornate structures present unique access and This is particularly important when maintenance challenges. you are dealing with properties Drone technology is enabling us to survey properties like that are part of the history of never before. Using the technology to view inaccessible our country. parts of the buildings we insure allows us to There are also benefits to our zoom in on specific features and identify customers. A church in Halifax issues that would not be seen using traditional KNOWING has been able to use the imagery surveying techniques.

YOUR A-Z to strengthen its application for Photogrammetry captured by the drones A aerial funding to support essential repairs creates detailed inspection imagery and 3D b benefits to the building. While a survey at Worcester building information models (BIM). These c Civil Aviation Authority Cathedral removed the requirement for the high-quality images provide surveyors with D detailed installation of expensive scaffolding to assess insights and incredibly accurate measurement E expertise the condition of the tower. data in a level of detail that we have not been f flights While the technology is widely available, able to capture before. Combined with more g Gatwick flights are subject to Air Navigation Orders and than 130 years’ experience of working with h heritage must be conducted responsibly. Recent events these buildings, it becomes a powerful tool for i insights at Gatwick have shown the impact that a rogue supporting customers with more tailored loss j jurisdiction drone can cause. The Civil Aviation Authority has prevention guidance. k knowledge jurisdiction on UK airspace and its permission is Condition surveys carried out so far have l loss prevention required prior to any commercial drone flight. revealed damaged and loose slates, tiles and m measurement It is also important to check the competency of stonework, blocked and defective gutters, n navigation your pilot; they must be certified by a National significant areas of missing pointing and flat o ornate Qualified Entity. roof ponding. All of which could result in p photogrammetry q quality The information captured using this technology water ingress, potentially causing further r risk management complements our in-house risk management damage to the structure and its contents. s surveys operation. It has far-reaching benefits for the The technology has been deployed across t technology insurance sector. However, capturing the data a variety of locations including churches, u unique using drones is only useful if you have the schools and heritage properties, improving v values knowledge and expertise to understand what you our ability to assess the immediate and w Worcester Cathedral are looking at. ● longer-term risks for x eXplored our customers. y years Mark Matthews risk management director at z zoom Ecclesiastical

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17/04/2019 10:31

A WIDER PERSPECTIVE

As firms now look at their ethnicity gap pay, Tali Shlomo highlights one initiative that is enabling people of all backgrounds to achieve their full potential

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ecently proposed requirements for companies to report on ethnicity pay gaps have started discussions on the broader subject of equality in business. The government has stated that it is consulting on the need for businesses to report on the ethnicity pay gap and how this would work in practice.

Since 2017, the CII made the decision to report our gender pay gap, even though we fell beneath the government’s minimum size for reporting. This was because we felt it both an opportunity for us to learn what more we can do to ensure we have policies and practices in place that are equitable and fair for our colleagues; and because it is the right thing to demonstrate leadership to the wider profession.

The government is now proposing mandatory reporting of companies’ ethnicity pay gap in addition to their gender pay gap. We believe it remains the right thing to lead in this; understanding and publishing our own data in advance of the requirement so we can help other employers with lessons learned and, as with gender, learn how we can use our data to ensure we have policies and practices in place that are equitable and fair for our colleagues.

IMPACTFUL INITIATIVE As the CII and the wider profession continue their diversity and inclusion journey, there are many examples of initiatives that support us in achieving a profession that is inclusive, enabling people to achieve their full potential.

The Afro-Caribbean Insurance Association (ACIA) was founded

by Junior Garba, ACII, and Godwin Sosi, Cert CII, in 2018 – two Lloyd’s underwriting professionals uniting behind their ambition to highlight and improve on the underrepresentation of black professionals in the insurance profession. The ACIA was formed to boost black and ethnic representation and empower Afro-Caribbeans in the insurance profession, by way of increasing cultural competence in the London market and making the insurance profession a more attractive destination for young black professionals.

The ACIA’s work is split out into four key segments: ● Research and study ● Internships and work experience ● Networking and events ● Scholarship programme.

The ACIA implements an expansive network across its members, AfroCaribbean insurance professionals, diversity thought leaders, corporate sponsors, relationships with overseas insurance associations

and relationships with educational institutions. The ACIA believes that the key to having an impact on the profession lies in attracting, retaining and developing talent.

As part of the ACIA’s objective of attracting more Afro-Caribbean talent into the London insurance market, it is creating access to opportunities for young professionals through internships/work experience, mentorship and scholarships. The ACIA will therefore be launching a scholarship programme in 2019 (Year 1) in partnership with CASS Business School, which will see one to two students selected by the ACIA to be fully funded for study on the MSc Insurance and Risk Management course at CASS Business School.

All scholars will be assigned a mentor from the ACIA to keep track of their progress and to also advise them on postgraduate careers in insurance.

Scholars will be referred via the ACIA for graduate scheme opportunities in the London insurance market and will also be given application help.

For more information on the ACIA, please visit www.acia.co and also follow the Afro-Caribbean Insurance Association on Twitter and Instagram @ACIALDN ●

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Tali Shlomo is people engagement director at the CII

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17/04/2019 10:32

ST U DY R O O M : WAT E R T E C H N O LO GY

STUDY ROOM

TIME TO GET SMART ON WATER DAMAGE 46

Are leak detection devices the answer to reversing claims-related costs?

ISTOCK

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ast year, the Association of British Insurers (ABI) said the UK saw the worst period of burst pipes on record, with £2.5m being paid out every day to customers with escape of water (EOW) claims. Water damage from ooding caused by burst pipes or mould due to excess humidity is the single largest risk to homes in the UK. One method that could combat the rise of claims-related costs is the use of leak-detection technology in domestic properties. By detecting a leak before it turns into a major incident, homeowners can minimise or prevent damage and therefore reduce the size of any eventual claim.

But what is leak-detection technology and how does it work?

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17/04/2019 10:33

ST U DY R O O M : WAT E R T E C H N O LO GY

DETECTION AND DIAGNOSIS Leak-detection technology is an innovative way to identify or flag potential issues before they turn into indoor flooding. With various devices and systems appearing on the market, technology is addressing the issue by using different methods of detection, diagnosis and actioning.

One such example is the upcoming Waterlock system from Green Energy Options (geo), which is being taken to market in partnership with Magenta Insurance. This smarthome-system device works through sensors placed around the home that can detect standing water or an increase in humidity. Connected to a mobile application (both iOS and Android), users can monitor and control the actions of their system by activating a valve that can turn their water supply on or off remotely. Users can receive notifications about any unusual activity detected by the sensors and system status reports, allowing them to optimise both detection and control capabilities within the home.

The system can connect to up to six sensors placed around the home with an 868MHz long-range wireless connection that enables the system to work in large homes, properties with outbuildings or other environments where wi-fi does not perform well. With voice control in development, this system should be as easy to use as any other smarthome device on a mobile phone.

DATA POWER The system also has the ability to supply data directly to insurance partners or property management companies (subject to end-user permission). This enables the introduction of innovative bundles of connected home technology with insurance

policies or managed services. With the increase of big data analytics being used to improve the claims handling process, leak-detection devices can not only limit potential damage but provide intelligent information in the event of a claim.

Magenta Insurance are at this year's BIBA conference in the UK, demonstrating Waterlock. They aim to provide a unique example of where the installation of a leakdetection device will financially benefit consumers.

Aquapea is another revolutionary leak repair system for water-supply pipes, made by Qinov8 in partnership with Auger. This repair system is suitable for all common waterpipe materials in homes and commercial buildings.

According to its producers, Aquapea works as follows: “The system uses an advanced polymer material the size of a pea, which is introduced into the water supply pipe at an external meter chamber and, with the internal stop tap turned off, the polymer is drawn to the location of the leak. The flow of water carries the Aquapea along the inside of the pipe, bonding to the pipe at the position of the leak and curing within 20 minutes. Differentsized peas can be used depending on the size of the leak. This can be calculated by the water loss per minute and monitoring the water pressure.”

By stopping leaks in this way, further water loss is reduced and subsequent repairs can take place by completing an excavation. This solution can offer an average 25% saving for insurers on an external water pipe claim and up to 80% on internal leaks, due to reducing disruption normally caused by major repair works.

With further leak-detection devices continuing to appear on the market, researchers and inventors are exploring the full potential that technology can bring alongside insurance. By identifying new ways to detect and action a leak, preventing major water loss and recusing claims-related costs is becoming a credible possibility. If results are consistent, this could also establish the installation of such devices to be considered when calculating property and contents insurance. ● James Moorhouse is content manager at the CII

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17/04/2019 10:33

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 5

QUESTION 8

By which of these names are the special perils of lightning, explosion, aircraft and earthquake often referred to?

Which of these reasons explains why personal money claims are among the most common areas of fraud in travel insurance?

A Because they are typically high frequency losses b Due to the difficulty in proving or disproving a loss c Holidaymakers always take insufficient measures to protect their money d International travel has led to an increase in traveller muggings

When is money usually most at risk of being stolen from a business?

A When it is stored overnight at the insured premises b When it is handled by employees at the insured premises c When it is carried to or from the premises d When it is at the home of an authorised employee

A Social perils b Wet perils c Pure perils d Catastrophe perils

QUESTION 2 Which of these is more likely to be considered a factor in rating property damage storm risk?

A The proximity of water such as rivers b The security of the premises c The standard of construction of buildings d Whether the business is seasonable

QUESTION 3 When considering the cancellation section of a wedding insurance policy, what cover is provided in respect of cancellation as a result of the weather?

A Cancellation due to excessive wind and rain b Cancellation due to inability to take the photographs due to strong winds c Cancellation due to it not being possible to have the photographs taken outside d Cancellation due to the inability to reach the wedding or reception venue

QUESTION 4 Which of these is the usual basis of contribution under a travel insurance policy?

A Independent liability b Dual liability C Co-insurance D Sum insured method

QUESTION 9

In the context of business travel insurance, which of these statements best fits the definition of an insured person?

A The insured person defines who has taken out the policy b The insured person defines who is covered by the policy c The insured person names who pays the premium d The insured person names who will benefit if a claim is submitted

Which of these does the fidelity policy protect in the event of insured losses?

A Directors of the insured business who may receive claims against them from disaffected parties for their failure to properly enforce the system of check b Shareholders who may see the value of their investment fall due to adverse publicity surrounding a loss c The accused employee who will require coverage for legal representation costs d The insured firm who suffers financial loss due to the criminal activity of their employees

QUESTION 7

QUESTION 10

Which of these statements describes vicarious liability?

A It is the responsibility of one person for the torts committed by another b It means that there is no need for the claimant to prove that the defendant owed them a duty of care c It is a liability relating to criminal rather than civil law d It means that liability for the torts committed is shared between all parties involved

By which of these other names is fidelity guarantee cover sometimes known?

A Financial crime insurance b Integrity coverage c Pecuniary loss cover d Suretyship

QUESTION 6

YOUR SCORE » 1–3 POOR 4–6 GOOD

7–8 VERY GOOD 9-10 EXCELLENT

ANSWERS 1D. Catastrophe perils are called such due to their ability to completely destroy the insured property.

2C. Storm damage rating will be dependent on factors such as location and the standard of construction of the buildings.

3D. The inability to reach the wedding or reception venue due to adverse weather.

4A. Contribution amounts are calculated under a travel insurance policy on an independent liability basis.

5B. The difficulty in proving or disproving a loss.

6B. The insured person defines who is covered by the policy, such as group members or employees.

7A. Vicarious liability is 'the responsibility of one person for the torts committed by another'.

8C. When money is being moved from one location to another, eg being paid into a bank.

9D. The policy indemnifies the insured firm for their financial losses arising out of the theft of assets of their staff.

10D. Fidelity guarantee business dates back to the nineteenth century, when it was referred to as ‘suretyship’.

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17/04/2019 10:35

&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 ,OSS %XPERT 4ECHNICAL !DJUSTER %NGINEER

s 3ENIOR #LAIMS !DJUSTER -OTOR #ATASTROPHIC )NJURY

Competitive Salary/Package dependant on level of experience – Germany Exciting opportunity for Civil Engineers to join a leading team of Insurance Loss Experts investigating large, complex claims through its global network. Working from home/ aligned to regional ofďŹ ce, you will work alongside some of the best loss managers in the world. Particular interest are engineers with experience in Machinery, Construction, Structural, Electrical, or Economics. Fluent German essential.

Contact: Eshani.Reddy@ipsgroup.co.uk - London Ref:CII138682ER

s ,EAD 5NDERWRITER 352%49 ÂŁ Competitive Package - dependant on experience – Bristol, England Our client, A rated insurance group, want to establish a new UK orientated Surety and Bond product line. Focused on commercial surety bonds you will need to have demonstrable underwriting expertise and proďŹ table track record. This is an exciting opportunity for an experienced underwriter to develop a specialist portfolio within a technically driven environment.

Contact: Colum.Lovett@ipsgroup.co.uk - London Ref:CII138890CL

s #OMPLIANCE 2ELATIONSHIP /Fl CER ,LOYD S !-, &OCUS To ÂŁ50,000 + BeneďŹ ts – City of London Unique role reporting to the Head of Compliance & Risk as part of a small compliance team focusing on the advisory elements of Anti Money Laundering, Financial Crime, Data Protection, Due Diligence review of business partners and Financial Risk. Strong knowledge of FCA and Lloyd’s regulations is required as well as experience of conducting thematic reviews and evaluating and improving internal policies and procedures.

Contact: Alison.Taylor@ipsgroup.co.uk - London Ref:CII138785AT

s !SSISTANT #OMPLIANCE -ANAGER ,LOYD S 3YNDICATE To ÂŁ67,500 + BeneďŹ ts – City of London Progressive opportunity for a talented Compliance professional within the Lloyd’s market who is seeking an opportunity to develop towards Compliance Management. Reporting to an experienced and inclusive Head of Compliance who genuinely seeks someone they can develop further and to whom they can relinquish tasks, projects and responsibilities. As a small dynamic and entrepreneurial business, partnering with stakeholders, understanding the business strategy and broad compliance experience is key.

Contact: Alison.Taylor@ipsgroup.co.uk - London Ref:CII138691AT

s &INANCIAL #ONTROLLER )NSURANCE "ROKER ÂŁ60,000 - ÂŁ80,000 + BeneďŹ ts – City of London Reporting directly to the board, managing a team of 3. Your remit will include the preparation of timely, accurate Monthly Management and other Financial Information for presentation to the Board. responsibility for the ďŹ nancial control and transaction processing within the Group. You may also be required to work closely with various other members of the senior management team on ad hoc projects.

Contact: Mark.Brady@ipsgroup.co.uk - London Ref:CII138621MB

s 2EINSURANCE !CCOUNTS 4ECHNICIAN £25,000 depending on experience – City of London Leading global Re-insurer require a reinsurance accounting technician, excellent opportunity for a graduate/second jobber wishing to commence a career within the reinsurance industry. Working within a small team with responsibility for a portfolio of cedant accounts, you will ensure accounts are booked and paid in a timely manner with associated analysis and tasks as descried below.

Contact: Mark.Brady@ipsgroup.co.uk - London Ref:CII138644MB

s )NTERNATIONAL !CCOUNT (ANDLER To ÂŁ36,000 + BeneďŹ ts – City of London A Lloyd’s broker is in the market for a non-marine international account handler who will be working on a variety of classes. Our client operates a at structure, so you will ďŹ nd yourself engaging with senior internal stakeholders on a daily basis. We are seeking an individual with Lloyd’s broker experience who is conscientious, organised and diligent with their work.

Contact: Jake. Henley@ipsgroup.co.uk - London Ref:CII138853JH To £60,000 + High Commission – City of London A senior appointment within this expanding independent insurance broker for an ambitious UK Commercial Sales and Business Development Executive. You will be responsible for identifying prospective clients, working with the team on new business proposals and winning new clients. A generous commission scheme supplements your basic salary.

Contact: Christopher.Dickman@ipsgroup.co.uk - London Ref:CII137610CD

s &, #LAIMS "ROKER Up to ÂŁ45,000 + BeneďŹ ts – Chelmsford A Lloyd’s Broker is seeking an experienced Financial line claims specialist to manage a portfolio of Financial lines claims from cradle to grave. You will manage the strategy for the successful settlement of a portfolio of Financial Lines claims, liaising closely with Clients and Insurers, advising on coverage issues.

Contact: Bow. Fanso@ipsgroup.co.uk - London Ref:CII138721BF ÂŁ40,000 -ÂŁ50,000+ BeneďŹ ts – Croydon A well-known insurer is seeking someone to handle a caseload of Claimant EL/PL claims and unusual Road TrafďŹ c Accidents such as Pedestrian or Cyclist claims; Represent the conduct of client matters in providing legal advice and assistance in a professional matter procedures.

Contact: Bow. Fanso@ipsgroup.co.uk - London Ref:CII138679BF

CII.04.2019.049.indd 49

cÂŁ100,000 + Bonus + Package – City of London You will manage the Compliance team of this high proďŹ le Lloyd’s Syndicate and Global Insurer, leading the function to ensure compliance with PRA, FCA and Lloyd’s regulations, providing strategic direction and delivering a proactive and solution driven Compliance culture.

Experience working in a senior Compliance role for a UK based Insurance ďŹ rm is required.

Contact: Tim.Southworth@ipsgroup.co.uk - London Ref:CII138656TS

s #OMPLIANCE !SSURANCE !DVISOR To ÂŁ55,000 + Car Allowance & BeneďŹ ts – Hampshire A chance to join an “in-houseâ€? compliance team of a major international company. A key role in assisting in the design and implementation of the group’s compliance and assurance culture across the business as well as measuring and reporting on its effectiveness, thereby reducing risk and evidencing assurance of compliance in the global enterprise. You will have direct experience and knowledge of compliance assurance in a business as well as demonstrating a specific understanding of compliance processes/practices. Preferably degree educated with a relevant professional qualification – ICSA, IRM, ACII, ACCA, CIMA etc.

Contact: James.Dick@ipsgroup.co.uk - London Ref:CII138299JD

s !SSISTANT 5NDERWRITER 0) To ÂŁ42,000 + BeneďŹ ts – City of London We have a superb Assistant PI Underwriting role with a syndicate where you will work on a established account with two senior underwriters who are looking to train and develop the successful candidate. This is a global account (including US business) where you will be writing a broad mix of traditional professions (accountants, architects, engineers, surveyors and lawyers) on both a primary and Excess basis.

Contact: Dana.Hill@ipsgroup.co.uk - London Ref:CII138813DH

s $ATA 0ROTECTION AND 0RIVACY !NALYST Up to ÂŁ50,000 + BeneďŹ ts – Birmingham A highly regarded Insurance Business seeks to hire a Data Protection and Privacy Analyst to join their global services team in their Birmingham City Centre ofďŹ ce. In this newly created role you will report directly to the Group Data Protection OfďŹ cer providing support to the Data Protection team. The role will focus around global privacy programme and will be responsible for supporting the Global Privacy OfďŹ ce in the development, implementation, and monitoring of the global privacy compliance program.

Contact: Richard.Coleman@ipsgroup.co.uk - Birmingham Ref:CII138725RC

s "UILDING 3URVEYING 1UALITY !UDIT -ANAGER ÂŁ45,000 +Car + BeneďŹ ts – Home Based A highly regarded Insurance Company is looking to hire an experienced Buildings Surveyor to join them in a quality audit capacity as a Surveying Quality Audit Manager.

As a Surveying Quality Audit Manager you will be responsible for the service and quality requirements of the repairs contractor network. You will provide ďŹ le and site audits using your many years building surveying experience to asses work carried out and ensure standards are kept whilst managing business SLA’s.

Contact: Richard.Coleman@ipsgroup.co.uk - Birmingham Ref:CII138742RC

s 3PECIALIST 2ISKS !CCOUNT (ANDLER ÂŁ22,000 - ÂŁ27,000 + BeneďŹ ts – Birmingham Exciting opportunity with a global broker in Birmingham. Dealing with a range of specialist London Market risks including Marine, Energy, Power and Aerospace. Working closely with their London ofďŹ ce you’ll initially handle renewals and will have regular visits to London.

Contact: Mark.Fancourt@ipsgroup.co.uk - Birmingham Ref:CII134355MF ÂŁ25,000 – ÂŁ35,000 + BeneďŹ ts Package – Birmingham City Centre Based in the heart of Birmingham, an excellent opportunity has arisen with an expanding insurance broker. You will deal with a range of risks including D&O, Property, Construction, Liability and Cyber handling MTA’s, renewals and new business. To apply you will have gained experience in a similar role either within commercial broking, underwriting or personal lines and have excellent knowledge of each of these products.

Contact: Mark.Fancourt@ipsgroup.co.uk - Birmingham Ref:CII137076MF

s 2EAL %STATE #LIENT %XECUTIVE

ÂŁ25,000 - ÂŁ35,000 + BeneďŹ ts – Birmingham Fantastic opportunity for a career hungry Account Handler to join an expanding insurance broker based in Birmingham as a Real Estate & Construction Client Executive. You will attend events, conferences and dinners using a soft sell approach being the “go toâ€? for Real Estate Insurance.

Contact: Mark.Fancourt@ipsgroup.co.uk - Birmingham Ref:CII138357MF

s "UILDING 3URVEYOR

s 3ENIOR %L 0, #LAIMS (ANDLER

"IRMINGHAM birm@ipsgroup.co.uk Tel: 0121 616 6096

s 3ENIOR #OMPLIANCE -ANAGER

s #OMMERCIAL !CCOUNT (ANDLER

s #OMMERCIAL .EW "USINESS 0RODUCER

,ONDON London@ipsgroup.co.uk Tel: 020 7481 8111 -ANCHESTER manchester@ipsgroup.co.uk Tel: 0161 233 8222

cÂŁ75,000 + Bonus + BeneďŹ t – City of London Exciting time to join this Global Insurance Group to work on the expanding Motor Casualty portfolio. The book is predominantly UK Motor Bodily Injury, with substantial Insurance and Reinsurance portfolios. Experience handling high level Motor Bodily Injury claims is required, either on an insurance or reinsurance basis.

Contact: Tim.Southworth@ipsgroup.co.uk - London Ref:CII138722TS

Up to ÂŁ45,000 + BeneďŹ ts – Home Based (South West of UK) An excellent opportunity has arisen for an experienced and qualiďŹ ed Building Surveyor who has detailed knowledge of building construction and subsidence claims to join one of the leading claims management ďŹ rms in the Southwest of England where you will work from home.

Contact: Blayne.Kelly@ipsgroup.co.uk - Birmingham Ref:CII138786BK

777 )03'2/50 #/ 5+

,EEDS leeds@ipsgroup.co.uk Tel: 0113 202 1577

(ONG +ONG asia@ipsgroup.co.uk Tel: +852 3469 5339 3HANGHAI shanghai@ipsgroup.co.uk Tel: +86 21 2206 2882

15/04/2019 13:57

CII BLOG

ALEX DOOLER

WHY I FRAMED FAILURE In this issue’s blog, Alex Dooler explains how he was inspired to persevere by a failed interview and a cotton fish…

M 50

y father handed me a gift. It was packaged in an unassuming brown parcel, scrawled with Chinese writing and import stamps. As I tore away the heavy-duty tape and plastic wrapping, I uncovered a small and colorful object. It wasn’t the latest iPhone or the next big thing, but a fish – a cotton replica of the Koi fish. In Chinese and Japanese culture, it is known as a symbol for perseverance in adversity.

That is because they are known to swim across currents and upstream.

Just like that fish, our life will map the changing currents. From the tenderness of youth right through to the ripeness of retirement, everyone will face the inevitable highs and lows of their career. Through it all though, it is one’s attitude and reaction to failure that will mould success.

Failure was an essential part of my story.

As a wide-eyed student, I set my sights on an internship at one of the world’s largest insurance brokers. During the span of six months, I passed through each interview and soon found myself at the last hurdle – the final interview. Just 16 other candidates stood between me and one of those four final positions. To fail now would be like getting to the World Cup Finals, only to lose on penalties.

And I did that just that. Sat in a university lecture, my phone pinged with a soulcrushing email. “Thank you for taking the time

to interview with us. It is with regret…” was the pretext that sealed my fate.

LESSONS LEARNED But it was during that lecture that I learnt one of my most important lessons at university. It wasn’t from the teacher, but rather instead from that email. Robert the Bruce, King of Scotland in 1314, told his men: “If at first you don’t succeed try, try and try again.” And that’s what I did.

I phoned the person who conducted one of my many interviews at the firm. I pleaded, despaired and even offered to work for free – I just needed my first break. Rejection became a rite of passage at university. But it was at this point that things began to change. She agreed and I got my internship. Through this, I was buoyed by a message of perseverance and of relentless courage to keep going.

As a mentor to young people now, I ground my advice in this. Enjoy the process of failure. It helps to re-define, re-inspire and re-direct your ambitions. For me, it was the barometer of my will to succeed – to continue to pursue even in the face of rejection. It allowed me to question my approach and how I could do things differently. As motivation might begin to dwindle with your CII exams, or if another rejection litters your inbox, remember to appreciate the value of failure. Just like the Koi fish – don’t allow the changing currents to stifle your ambition. ●

FAILURE WAS AN ESSENTIAL PART OF MY STORY

Alex Dooler is graduate surety underwriter at AIG

◊ SWIM UPSTREAM In Chinese and Japanese culture, the Koi fish is a symbol for perseverance in adversity

◊ KEEP GOING Use failure as the barometer of your will to succeed

◊ NEVER GIVE UP “If at first you don’t succeed try, try and try again.”

ILLUSTRATION: LUKE WALLER

THREE THINGS TO TAKE AWAY

thejournal.cii.co.uk / The Journal / April - May 2019

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LEGAL REVIEW

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Manage your subscriptions today at cii.co.uk/preferences thejournal.cii.co.uk / The Journal / October - November 2018

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