The Journal April - May

thejournal.cii.co.uk April – May 2018

Setting a precedent The changing face of workplace claims

Ice, ice, baby The impact of developing Arctic sea routes

Chinese takeaways An in-depth look at the world’s second largest economy

PROTECTIVE MEASURES Last chance to prepare for THE implementation of the GDPR

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Celebrating five years.

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The 5th Annual London Fintech Week July 6th-13th, 2018 | QEII, London, UK

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A P R I L - M AY 2 0 1 8

C O N T E N TS NEWS

FEATURES

5 President’s letter Inga Beale discusses the recognition of women in insurance

16-18 IWF Live 2018 The groundbreaking Insuring Women’s Future event in March

6 -9 News UK news from the CII

24-25 Arctic shipping The impact on the marine sector as sea routes evolve

10 International news/ letters

26-27 The gig economy The impact of underinsurance and changing trends

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12-13 Regional news News from the local institutes 36-37 Disciplinary matters

32-33 Disruption What does disruption really look like in the insurance sector?

REGULARS

STUDY ROOM

11 Regulatory radar The latest legislation updates from the UK and Europe 14-15 The Interview – Johnny Timpson The protection specialist discusses the future of insurance 20-22 Hot topic – GDPR A comprehensive guide to the imminent new data regulations

44-46 Study room – Workplace claims Recent court rulings are changing the landscape of workplace claims

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40-42 International profile – China Examining the Chinese economy and insurance market

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47 Study room: A-Z A look at the Silk Road economic belt 49 Study room: Q&A The big 10 questions to test your knowledge 50 CII blog Anna Barnes on how to avoid distractions from studying

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40 CONTACT US

The Chartered Insurance Institute 20 Aldermanbury London, EC2V 7HY Tel: (020) 8989 8464 Fax: (020) 8530 3052 Chief executive: Sian Fisher

The Journal is the official magazine of the Chartered Insurance Institute (CII).

Views expressed by contributors or advertisers are not necessarily those of the CII or the editorial team. The CII will accept no responsibility for any loss occasioned to any person acting or refraining from action as a result of the material included in this publication.

The Journal is online at www.cii.co.uk/ journal (members and subscribers only) Should you wish to send your views, please email: michelle.worvell@cii.co.uk

Editor: Michelle Worvell (020) 7417 4763 michelle.worvell@cii.co.uk Deputy editor: Luke Holloway (020) 7417 4778 luke.holloway@cii.co.uk For sales and advertising please contact charles.boutwood@redactive.co.uk ISSN 0957 4883 © 2016 Chartered Insurance Institute.

Average total net circulation more than 82,000

Publisher: Redactive Media Group Level 5, 78 Chamber Street London E1 8BL Tel: (020) 7880 6200 Senior designer: Yvey Bailey Senior picture editor: Claire Echavarry Production: Jane Easterman Printing: GD Web Offset Cover illustration: Kate Hazell

thejournal.cii.co.uk / The Journal / April - May 2018

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Study with substance

Our insurance qualiďŹ cations identify universally as evidence of knowledge and professional competence.

cii.co.uk/qualiďŹ cations CII.May18.004.indd 4

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PRESIDENT'S LETTER INGA BEALE

TIME WAITS FOR NO WOMAN Inga Beale reflects on the slow progress of change in the insurance sector

H

istory is a funny thing.

Someone came to see me in my office the other day to drop in some Lloyd’s memorabilia their father had had in a drawer for years.

Included was a wonderful colour brochure celebrating the silver jubilee of Queen Elizabeth II. Flicking through it, I noticed, amid some resplendent pictures of the young Queen, a section titled: “Britain and the EEC.” I quote: “…on July 31 1961, Harold Macmillan announced that Britain had decided to make a formal application to join the EEC…on January 13 1963 General de Gaulle, President of France, made it clear his opposition to Britain’s entry and shortly negotiations were abruptly broken off at the French request…”.

DEDICATED INDIVIDUALS How times change! But sometimes they do not change fast enough.

Last month was a real highlight of my time as president of the CII, as I got to host the annual President’s Dinner in the Lloyd’s building. One of the points I made in my pre-dinner speech – as we stood there surrounded by Lloyd’s history in the room where thousands of insurance policies are brokered every day – was that it has taken far too long for women to gain a foothold in the Lloyd’s market.

It was in 1972 that Lloyd’s first changed

its constitution to allow women to trade in the market, a move that meant Lillian Archibald could lay claim to being the first female broker at Lloyd’s. As the story goes, on leaving for home after her first day, she remarked acerbically: “Well, the roof is still on!”

However, it was not until 1996 that the first woman – Mel Goddard – was appointed as an active underwriter (the most senior) – in the Lloyd’s market.

It took a further 20 years before Lloyd’s appointed me as its first female CEO. As I said, not fast enough.

But as Martin Luther King once stated: “Human progress is neither automatic nor inevitable... Every step toward the goal of justice requires sacrifice, suffering and struggle; the tireless exertions and passionate concern of dedicated individuals.”

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MAKING CHANGE HAPPEN This brings me to the second point I made in my speech, and that was to praise the hard work of the CII and its members in making change happen. I’ve really enjoyed travelling the country, meeting you all and seeing firsthand the great work you are doing to develop our sector in the way we know we need to.

One of the most pleasurable duties of a CII president is to confer the President’s Award, which recognises this hard work, in particular a member’s significant contribution to the CII as a whole and its local institutes. In other terms, it might be described as a Lifetime Achievement Award.

If you haven’t heard, the winner was Robert Weald, and his dedication to the CII for almost 30 years is an inspiration to us all. Congratulations Robert.

Positive change requires this level of commitment – and change we must if we are to remain relevant as a sector and thrive in the future.

We must learn from history how we can effect change faster, and not let it slow us down. ●

WE MUST CHANGE IF WE ARE TO REMAIN RELEVANT AS A SECTOR AND THRIVE IN THE FUTURE

Dame Inga Beale ACII, President, CII

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NEWS

FROM THE CII TWITTERATI »

@ASlipaczek Delighted to pass FA6 Investment client servicing! After the fantastic news last month of reaching Chartered status I can now confirm I have now also reached Fellowship status. A lot of hard work over the last few years but happy to have done it

@ c s 74 4 A hugely passionate and inspirational talk by @MrJonnyBenjamin this morning @CIIGroup on the importance of talking about #mentalhealth, especially in the workplace #ThisisMe #endthestigma #MHAW18 @LMAppeal

@ e m m ac u sdin Get to be @CIIGroup with @Link_LGBT hearing about LGBT+ inclusive workplaces in the Insurance industry #inclusiveworkplaces

CHARTERED INSURANCE INSTITUTE

CII TO MOVE TO EC3 The CII will move in June to its new office at 21 Lombard Street, 1st Floor, EC3V 9AH – next door to the original site of the Lloyd’s Coffee House, to where the origins of insurance can be traced.

The move is part of the CII’s commitment to modernising itself in line with its Strategic Manifesto. The move to Lombard Street will provide an open-plan, fully up-to-date and technologically-sound base from which to operate.

The Knowledge Services team will continue to provide their services in the new office, including offering access to items stored in offsite

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locations.

The Aldermanbury building is being sold to the City of London, which is keen to protect and promote it. The Great Hall will be shut for refurbishment from 28 September 2018.

A selection of CII heritage articles will move to the new office, including facsimiles of the windows, insignia and the Royal Charter. Selected remaining articles will be placed in safe storage, with the intention of holding an auction in aid of the Insurance Charities.

The CII’s other locations are unaffected.

APPRENTICESHIPS

DISCOVER RISK FACEBOOK LIVE SUCCESS As part of National Apprenticeship Week, the CII’s Discover Risk team hosted a Facebook Live event to discuss young people’s options after leaving school.

Hosted by TV and radio presenter Roman Kemp, the panel included a representative from the National Careers Service, a former apprentice and a HR talent

adviser, who took part in debate and answered live questions from the audience.

The online stream of the event has now reached more than 30,000 views. For more information and to watch the video, visit: facebook.com/DiscoverRiskFB (Read our feature on NAW 2018 on page 19)

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NEWS @W hiteKevi n 32 Two-day course in London for @CIIGroup AF5 exam next week. What a way to start the week!

@allianzuknews We’re proud to have been awarded Chartered Insurer status by @CIIGroup for a second year as this recognises our commitment to excellence & professionalism.

@martinbamford Do check out the latest episodes from @CIIGroup Radio, all recorded at their recent Insuring Women’s Futures Live 2018 event @MoneyhubEnterpr @IngaBeale @rose_stlouis @sharonsutton99 @bamfordmedia #IWF2018

#CIIGroup Twitter

14,783 Followers and counting...

PODCASTS

CII LAUNCHES SEASON TWO OF PODCASTS The CII has announced the launch of season two of CII Podcasts.

Recorded at the Insuring Women’s Futures Live event in March, the new shows feature a selection of speakers and attendees, including Charlotte Matier, director of development, Alzheimer’s Society; Rose St Louis, head of strategic partnerships I’ve been listening to business at Zurich; Dame Inga Beale, CEO of Lloyd’s podcasts for many years now of London; and and have repeatedly searched for Sam Seaton, CEO of insurance-specific content – and Moneyhub Enterprise.

The podcasts have now it’s here! Thank you now received more than MARK NEWBERRY, CII MEMBER 4,000 plays across seasons one and two of CII Podcasts now on Apple at and received hugely positive apple.co/2pKrE7L or for Android feedback from listeners.

You can listen to latest episodes at bit.ly/2Gx4HyC

BIBA 2018

THE CII AT BIBA

At the British Insurance Brokers’ Association (BIBA) conference this year, the CII will be showcasing its Classroom to Boardroom theme, alongside Broker Assess.

Held in Manchester on 16-17 May, ‘Innovate Evolve Thrive’ is the central theme of this year’s BIBA conference. The CII invites delegates to visit stand E50 to have their photo taken in our anti-gravity classroom/boardroom and find out how we can help you with your career development and learning needs, whether you are just starting out or are seeking Chartered status.

CII Broker Assess is focusing on arguably the biggest regulatory challenge that brokers have faced to date, the Insurance Distribution Directive. Come and chat to the team of experts who will be demonstrating the CII’s solution.

To sign up for BIBA 2018, visit: www.biba2018.co.uk

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CHARTERED

COVÉA INSURANCE CHARTERED STATUS RENEWAL Covéa Insurance continues to demonstrate its technical excellence and professionalism, earning CII Chartered Status for the third consecutive year for its Commercial Lines and High Net Worth business. The company is also pleased to announce that all of its

training courses offered to Commercial and HNW brokers and employees through its award-winning Training Academy have been fully CPD accredited by the CII. Since Covéa Insurance first achieved Chartered Status in 2016 it has continued

to raise the bar for professional standards, investing in the training and development of its own employees and supporting brokers with developing skills to provide their customers with the highest quality service and professional advice.

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NEWS

AWARDS

PRESIDENT’S AWARD Robert Weald was given the President’s Award at the recent CII President’s Dinner, held at Lloyd’s of London in March.

The President’s Award recognises a member’s significant contribution to the CII as a whole and its local institutes.

Mr Weald has enjoyed a career with the CII as a volunteer for nearly 30 years, after joining the institute in 1983. He has been a member of the editorial panel, the disciplinary committee, the local institute development committee, the appeals committee, the awards panel and a member of council.

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Mr Weald has been an active supporter of the Insurance Institute of Peterborough since 1992, being named president twice and deputy president also twice.

Presenting the award, CII president, Dame Inga Beale, said: “All who know him and the work he has done both centrally and locally, describe him as competent, insightful, knowledgeable and selfless.

“Quite simply, the institute and local institutes are built around those who give their time for free and go the extra mile for the benefit of everyone else.”

CHARTERED

AWARDS

INSURANCE CORPORATION AWARDED CHARTERED STATUS

MORGAN OWEN MEDAL WINNER

The Insurance Corporation of the Channel Islands Limited (ICCI) has been awarded Chartered Insurers status by the CII. Chartered status is an exclusive accreditation only awarded to firms that meet rigorous criteria relating to professionalism and capability, and positions ICCI as part of an elite group.

Mandy Hunt, Chartered nsurer

and managing director of ICCI, said: “Chartered status is a fantastic achievement for ICCI and provides further training and development opportunities for our pan-island team. It underlines the dedication and professionalism of the highlyskilled and experienced team we have in place supporting our brokers.

RSA, our parent company, has outlined its aims to be ‘best in class’ and this award is recognition that every part of the group is committed to technical competence across our core disciplines of underwriting, claims and pricing.”

The CII has named Sally Blake as the winner of The Morgan Owen medal 2017.

The Morgan Owen medal is one of the most prestigious essay prizes in the insurance profession. The silver gilt medal and prize of £2,000 are awarded for the best essay entered by a Fellow or Associate of the CII. Ms Blake is a business analyst at Zurich and former participant in Zurich’s General Management Graduate Scheme. She is the first female winner of the award.

Current discussions include: CII LinkedIn Group ciigroup@linkedin

43,694 members and counting...

PROXIMATE CAUSE A policyholder had a flooding in his bathroom [...] will you differentiate between the emergency repair and the permanent repair on grounds that emergency repair was intended to reduce the loss? → bit.ly/2vo52PI

PROPERTY INSURANCE In property insurance, what is the difference between: Stock in trade & stock of finished goods. And is there any difference between them in settling the claim? → bit.ly/2qGUwh3

INSURANCE BROKER IS A VENDOR OR INSURANCE COMPANY? I wish to ask if client issued policy through broker does insurance broker in this case is considered as a vendor to the client? → bit.ly/2qGq2wt

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NEWS

CHARTERED

DIVERSITY

CHARTERED BROKER STATUS GIVEN TO BRUNEL

WOMEN INVEST TOO

Brunel Insurance has been awarded Chartered broker status by the CII. Established in 2005 to provide a fullyindependent, professional indemnity insurance broking service to businesses of all sizes, Brunel is one of the UK’s fastestgrowing insurance brokers.

The company acts for more than 6,000 professional clients, employs in excess of

65 staff and has offices in Bristol, Manchester, Perth and in London opposite Lloyd’s, at the heart of the UK insurance industry.

Sian Fisher, CEO of the CII, said: “We are delighted that Brunel Insurance has achieved Chartered broker status. Brunel is one of the UK’s largest independent professional indemnity brokers and we applaud its commitment to professional standards. Customers are increasingly looking at Chartered status as the badge of commitment to standards, professionalism and trust.”

WOMEN IN INSURANCE

PROGRESSING THE ‘WOMEN IN LEADERSHIP’ AGENDA Two years on from the launch of HM Treasury’s Women in Finance charter, signatory Covéa Insurance has announced that it will be one of a number of companies supporting Leeds Beckett University to support its own ‘Women in Leadership’ programme.

The insurer will support a series of events and activities designed to accelerate the interest, ambition and potential of the university’s female students.

Covéa Insurance has developed its own dedicated female development and networking programme and during the past 18 months has hosted inspirational talks, workshops and the opportunity to learn from and share experiences with high-profile female role models. These have included entrepreneur and CEO at Pukka Insure, Sam White; Shadow Minister for Flooding and Coastal Communities, Holly Lynch; and president of the CII, Sian Fisher.

Boring Money is to host an afternoon seminar on 22 May at Schroders’ headquarters from 1:30pm to 5.00pm.

‘Women Invest Too’ has a dual purpose – to tackle how insurance and financial services engage with women customers and employees, and to explore how we can become more inclusive and representative.

The event will feature a host of special guest speakers including Anne Boden, CEO, Starling Bank; Camilla Carson, commercial director, Moola; Natasha Power, head of advertising and brand, Schroders; Georgie Killiik, partner, Silo; Sophie Bialaszewski, head of innovation, Lloyd’s; and Emily Cox, director of public affairs, Virgin Money.

Boring Money will also be sharing new insights into what female investors and non- investors think about the worlds of funds, platforms and robo-advice.

For more information and to book tickets, visit: bit.ly/2GoQotF

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CII ON INSTAGRAM & FACEBOOK You can find them here...

instagram.com/chartered_ insurance_institute facebook.com/ CharteredInsuranceInstitute The Inspire Leading Women programme has been well received by female employees as one of a number of initiatives to influence positive change within the organisation.

Follow us now and keep a lookout for lots of new content from around the CII.

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LETTERS

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

ASIA

LETTER

CII VISITS ACROSS ASIA

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A recent issue of The Journal contained a short report that the Aldermanbury building is to be sold to City of London Corporation.

Since The Journal seems to be the institute’s main method of communicating news to its members throughout the world, I would have expected more details to be disclosed of such a huge decision, involving as it does, something like 80 years of history.

No reasons were given for the decision and members should not have to guess what they are. Also, one assumes that the museum and library will move to the new location but there is no mention of them in the announcement. Also, why not disclose the financial details of the deal to members?

There is also another very important aspect on which information is lacking. The stained-glass windows of the coats of arms of the principal insurers of the 1930’s, which are in the main hall, may or may not be of great financial or artistic merit but I would have thought they of are of huge historical significance and importance for the industry.

Whilst one would not expect the windows to be removed if the building is to continue to be used by City of London, in the event of demolition, I would have hoped that provision could be made for them to be returned to the institute for preservation in some way, for future generations.

Surprisingly, neither the incoming president nor the outgoing, thought this announcement of sufficient importance to mention it in their newsletters.

Top: CII at the Taiwan Insurance Institue Above: CII at the Guangdong University of Finance and Economics

CII’s Asia corporate development team continued their work in spreading CII education and professional standards with a series of recent visits to the Philippines, China and Taiwan.

The trip included introduction and professionalism presentations to registered financial planners in Taguig City; meetings with the Philippines Insurance & Reinsurance Association and Insurance Institute Asia Pacific; and CII networking events at Shanghai and Beijing at Lloyd’s China.

A small CII networking event was also hosted in Taipei; along with a visit to the Taiwan Insurance Institute, as well as meeting the Non-Life Insurance Association of The Republic of China.

Alpha Ho, CII corporate development manager, Asia, said: “It was a great opportunity for the CII to visits to institute, associations, corporates and universities in these countries.

We are very confident from all the valuable meetings and feedback from our valued CII members.

“We look forward to developing potential collaborations in these countries as we continue to promote CII education and professional standards.”

For more information on CII Hong Kong, visit: bit.ly/2ld1KrJ

IN RESPONSE: The CII move to 21 Lombard Street is part of the CII’s commitment to modernising itself in line with its Strategic Manifesto, which requires it to be modern, relevant and diverse and provide its membership, and the wider profession, with relevant learning, insightful leadership and engaged membership.

The new office will have a dedicated conference space for up to 50 people for CII events as well as a welcoming and contemporary area for staff and visiting members called the Knowledge Lounge.

Sian Fisher, CEO of the CII, said: “This is a contemporary, fullyfunctional and modern office space that will allow us to continue to welcome our members and help us overcome some key operational challenges facing our current office in Aldermanbury.

“We have committed to modernise our organisation in order to keep relevant to our ever-developing profession. Our new office is open plan, light and bright, fitted out with modern technology and in the centre of things.”

The City of London are keen to protect and promote the Aldermanbury building and the CII has negotiated alternative venues for events affected when the Hall closes for refurbishment on 28 September and when the Hall reopens.

A selection of CII heritage articles will move to the new office, including facsimiles of the windows, insignia and the Royal Charter where they will be displayed. Expressions of interest have already been registered in the CII’s collection of firemarks and some other heritage items. A selection of articles will be placed in safe storage with the intention of holding an auction in aid of the Insurance Charities. ●

ISTOCK

Alan Carver, FCII.

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

FCA BUSINESS PLAN FOR 2018/19

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The UK Financial Conduct Authority’s (FCA) priorities for the year reflect the high level of resource needed for Brexit, given its impact on regulation and financial services. In addition, the FCA will focus on seven cross-sector priority areas: ● Firms’ culture and governance; ● High-cost credit; ● Tackling financial crime, including fraud, scams and anti-money laundering; ● Data security, resilience and outsourcing ● Innovation, big data, technology and competition; ● The treatment of existing customers; ● Long-term savings, pensions and intergenerational differences. nnual The FCA has also published its second annual ‘Sector Views’, which provide a snapshot off how rming. each sector in the financial system is performing. t: The FCA’s Business Plan can be viewed at: bit.ly/2qmg4jR and ‘Sector Views’ at: bit.ly/2qDk53r

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FCA PAPER ON TRANSFORMING CULTURE IN FINANCIAL SERVICES The paper is comprised of 28 essays by industry leaders and academics concerning the concept of a “good culture”, the role of regulation and regulators, how firms might go beyond incentives for good behaviour and how to change behaviour.

The FCA considers that unhealthy cultures in financial services have been a key cause of major conduct failings. The introduction to the essays states that its regulatory focus is on what it considers to be the four main drivers of culture – firm purpose, leadership, approach to reward and people management, and governance arrangements.

The discussion paper offers actionable insights for financial services practitioners to consider how they can effect change in their organisations, including: ● Using behavioural science to guide incentives and cultural change; ● Looking beyond the role of leadership in effecting change; ● Applying strategic focus to the continuous process for adapting culture; ● Fostering environments of trust to encourage openness and learning.

The discussion paper can be viewed at: bit.ly/2DlqF1X

The FCA has warned that it will take action against general insurance firms who fail to implement transparency rules. The rules require firms to display clearly the insurance premium a customer paid last year alongside their proposed renewal premium, as well as a prominent message encouraging customers to shop around.

The FCA outlined how firms were failing to meet the rules, including: ● Implementing the new rules for all products and customers; ● Corre Correctly stating the previous year’s prem premium; ● Id Identifying all customers who needed rene renewal information due to either syste system error or mistaken interpretation of the rules.

Th FCA expects firms and senior The m management in those firms to take im immediate action to ensure they are comp compliant with the rules. A copy of the press release can be viewed at: bit.ly/2H5iLjZ

WHAT’S ON THE RADAR?

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ISTOCK

INSURANCE FIRMS STILL FAILING TO MEET FCA RENEWAL RULES

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The CII takes a look at what’s new on the policy and public affairs front this month

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FCA DISCUSSION PAPER ON IMPACT ON CONSUMERS The regulator has released a discussion paper on how it intends to assess the impact of its interventions on consumers, firms and a ets Thee paper pape outlines out markets. why the FCA post-im conducts post-impact evaluation; how specific interve interventions to study are chosen; and how it seeks to conduct ev evaluations that are robust, iimpartial and credible.

Fee Feedback from stak stakeholders is requested b by 1 June 2018.

View the paper at: b bit.ly/2H4sTcR

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REGIONAL NEWS

8 M AY

12

MENTAL HEALTH IN THE MODERN WORLD OF WORK → 12:00pm-1:30pm The Insurance Institute of Liverpool www.cii.co.uk/liverpool

15 M AY

STRESS AND DEPRESSION IN THE WORKPLACE → 12:00pm-2:00pm The Insurance Institute of Stoke www.cii.co.uk/stoke

23 M AY

INSURED 2018 → 8:30am-6:00pm The Insurance Institute of Nottingham www.cii.co.uk/nottingham

LEEDS

M I D - K E N T & R OYA L T U N B R I D G E W E L L S

LEEDS LAUNCH LEADERSHIP PROGRAMME

A DISRUPTIVE WORLD

The Insurance Institute of Leeds hosted a seminar in early February to launch its inspirational leadership programme.

The event was well attended, hosting guest speakers including Dame Inga Beale, CEO of Lloyd’s; Rob Northfield, motivational speaker; Sue Woodroofe, principal of The Grammar School of Leeds; and former Leeds United professional footballer Eddie Gray.

Taking place from April 2018, the inspirational leadership programme has been devised by market-leading development coaching business, Quarterdeck, and is aimed at the next generation of leaders looking to develop new or existing leadership qualities.

Delegates will attend a series of six

masterclasses covering topics such as understanding leadership, developing and maintaining a positive mindset, as well as having challenging conversations.

For more information on the Leeds institute, visit: www.cii.co.uk/leeds

CAMBRIDGE

EVERY CLOUD HAS A SILVER LINING… Although the ‘Beast from the East’ caused the Cambridge Institute to cancel its Anglia Market Forum at Newmarket Racecourse, all food from the event was kindly donated to local homeless shelter Jimmy’s of Cambridge.

The lively panel debate draws about 150 members each year and 2018 was no exception. With the help of the venue, copious amounts of sausages, pies, chicken skewers and potato wedges carefully made their way to the shelter in support of the Cambridge homeless community.

Special thanks must go to Martin Hennell of Saffron Insurance, the Cambridge Institute’s programme

secretary, for all his hard work in not only arranging the evening, but also ensuring none of the food went to waste when the Beast from the East arrived. These events are hosted for members by members and it is disappointing to have to cancel such a popular event, so it is pleasing there was a silver lining.

For more information on the Cambridge Institute, visit: www.cii.co.uk/cambridge

The fifth Kent Conference was held in March, playing host to more than 160 people from different sectors of the profession, all focused on the theme of ‘A Disruptive World’.

The three institutes in Kent – comprising Mid Kent; Folkestone, Canterbury and East Kent; and Royal Tunbridge Wells – joined forces once again to host the annual full-day programme of continuing professional development (CPD).

The keynote speakers were Inga Beale, CEO of Lloyd’s and current president of the CII; Nick Hankin, CUO of Aviva; David Williams, technical director of AXA; and Branko Bjelobaba, regulation and compliance consultant, who covered a variety of issues relating to the industry. This was followed by a question and answer session hosted by the conference chairman, Ray Johnson, and other excellent presentations covering cyber, terrorism and Ogden tables.

Mr Johnson commented: “This event enjoys superb feedback each year from the delegates, where 100% said they would return. Due to everyone’s busy lifestyles, the idea is to provide relevant lectures on an easy-in, easy-out basis. As always, the presenters were most informative, and our aim is to always have plenty of takeaways to implement and share with colleagues within the profession. We are now working on our next year’s event, which is due to be held in Maidstone once again, on Thursday 7 March 2019.”

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REGIONAL NEWS

24 M AY

LUTON AND ST ALBANS TECHNOLOGY CONFERENCE → 9:00am-1:00pm The Insurance Institute of Luton and St Albans www.cii.co.uk/luton

19 JUNE

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RESERVING LIABILITY CLAIMS → 12:00pm-2:00pm The Insurance Institute of Ipswich www.cii.co.uk/ipswich

JUNE

DEFINED BENEFIT TRANSFER WORKSHOP → 8:30am-11:00am The Insurance Institute of Sheffield www.cii.co.uk/sheffield

BIRMINGHAM

MOB RULE IN MARCH FOR BIRMINGHAM INSURANCE INSTITUTE Birmingham Insurance Institute (BII) staged a city centre flash mob in March to raise awareness for its chosen annual charity, Birmingham Mind.

The institute prides itself on its annual charity support activity and the flash mob – organised by the BII’s head of charities, Rachel Sudlow – was mobilised on 8 March, the day of the institute’s annual dinner, with upwards of 100 colleagues from the Birmingham insurance and financial services community joining Birmingham Mind to provide a fun focal point with an important message.

At 12.30, the mob formed to coordinate the handing out of information, the raising of banners and placards, and to reveal they were wearing Mind t-shirts. The mob then maintained a symbolic and powerful silence, with stickers across their mouths to emphasise the ‘Don’t Suffer in Silence’ message. A blast on a horn then saw the

Sussex CII @sussex_cii An enjoyable Sussex Seniors afternoon tea and convivial conversation at Cafe Elvira – a chance to catch up with some of our retired members Newcastle CII @NewcastleCII We all need to be conscious of #CyberSecurity

mob move to interact with observers to talk and raise awareness of mental health challenges – the silent issue professionals do not talk about.

The flash mob took place around the pedestrianised area of Church Street outside the offices of JLT, which is the workplace of BII president Nikki Southwick-Gough.

For more information on the Birmingham institute, visit: www.cii.co.uk/birmingham

CII Perth & Dundee @CII_PerthDundee Perth and Dundee are excited to announce the introduction of a Cert to Diploma programme. This programme facilitated studies to a diploma level

13

SHEFFIELD

SHEFFIELD PRESENTS INSURANCE EXPO AND FRESHERS’ WEEK EVENTS AT SHEFFIELD HALLAM UNIVERSITY The Insurance Institute of Sheffield (IIS) joined forces with Sheffield Hallam University (SHU) to host two events designed to introduce students to careers in the insurance profession.

The first event was held during September’s Freshers’ Week for the students on SHU’s Business School courses.

Presentations from Jean Cookson, the institute president; Damion Taylor, senior lecturer in Financial Management at SHU; Geoff Fenwick of Allianz and Sheffield deputy president; and Caspar Bartington, formerly

of the CII, gave great insight into the career options available, while Andrea Rueda of Aviva gave a postgraduate’s view of working for an insurance company.

Following the presentations, the 150 students took the opportunity to network and talk to representatives from about a dozen local employers including insurers, brokers, IFAs and loss adjusters; representatives of the IIS. The second event was held on 24 January 2018 and was aimed at sixth form and college students. There were around

30 students and several teachers attending from various schools and colleges in and around the IIS area, with the aim of the event to show students the variety of careers available in insurance.

SHU wrote a post-event blog called ‘A career in Insurance and Personal Finance – a Risky Game?’ and the university has expressed interest in arranging similar events in the future, following such a successful launch.

For more information on the Sheffield Institute, visit: www.cii.co.uk/sheffield

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19/04/2018 17:21

THE INTERVIEW: JOHNNY TIMPSON

TIMPSON

F

Starting out

Head of operations

Solid foundations

Johnny began his career in insurance through a three-year training programme at Commercial Union before joining Scottish Widows in 1987.

He recruited Dr Marius Barnard, a cardiac surgeon and the inventor of critical illness insurance, to join the Scottish Widows protection team.

Johnny lives on a coastal small holding with dogs, cats, sheep and hens and, in Grand Designs fashion, he and his wife, Anne, built their own home.

rom a very young age, insurance was a career that really appealed to Scottish Widows protection specialist Johnny Timpson. And, while he is the first to admit that he does not conform to the industry stereotype, his experience means he is passionate about ensuring others benefit from insurance, whether as a career or through better access to

the cover it provides.

“I’m one of the few people in this industry who always wanted to work in insurance,” says Mr Timpson. “My father worked in the industry so insurance matters were always being discussed over breakfast and dinner, and I remember going into his office with him when I was five years old.

I found it fascinating.”

ACCESSING INSURANCE 14

His first steps were at Commercial Union where, as part of a three-year training programme, he was able to spend a few months in each department. Life insurance stood out and after working in various technical roles, he was approached

by Scottish Widows in the late 1980s to take up the position of junior sales inspector. “I’ve been involved in so many interesting projects,” he adds. “I’ve worked in direct sales, on partnerships with the likes of Virgin Money and Asda, in bancassurance and with intermediaries. Across all these channels, one of my key objectives is to improve access to insurance.”

This passion meant Mr Timpson was appointed to the role of disability champion for the insurance industry and profession at the Department for Work and Pensions in February. This comes with a remit of improving access to insurance and careers in insurance. “I’m the son of a mother who was disabled, so I was always conscious of the impact that disability can have,” he explains.

As an example, he points to a recent report by charity Scope that found disabled people pay a financial penalty on everyday living costs. On average this works out at £570 a month, with one in five disabled people paying more than £1,000 extra every month.

GREATER INCLUSIVITY Although he is pushing for further change, including the removal of income protection benefit from welfare benefits means-testing, Mr Timpson says the industry is already taking some important steps to ensure insurance does not add to this burden on disabled people. As well as launching protection products designed for individuals with diabetes or a high body mass index, improvements in underwriting have also helped.

“The protection industry has been great at shouting about its claims statistics but it has not done enough to promote the improvements it’s made in underwriting outcomes,” he adds.

“In the past, just about anyone who had a health problem or disability would have been declined but, through better understanding of the risk, acceptance levels across all protection products are now pretty high.”

Advisers also have an important role to play in ensuring that people do not miss out on the opportunity to take out cover.

“There needs to be more collaboration in the market, with advisers referring cases that might be outside their expertise to specialist advisers,” Mr Timpson says. “It’s about building professionalism: a GP has no problem referring a patient to a specialist when additional expertise is needed and we need to replicate this in the financial advice sector.”

He believes the introduction of the Insurance Distribution Directive later this year will give the industry a great opportunity to focus on continuing professional development and to drive through these changes.

EQUAL OPPORTUNITIES While his work in protection means campaigning for people with disabilities and health issues is a key objective, Mr Timpson is actively involved in making insurance fairer for other groups too. This includes his work as an advisory panel member for the Chartered Insurance Institute’s Insuring Women’s Futures programme. “More women than ever are employed in the UK but there is a huge disparity in the numbers that are protected, compared with men,” he explains. “An important part of changing this is to encourage more women to work in the insurance sector, especially in leadership roles.”

As well as initiatives such as supporting women back into work, he would also like to see the industry engage with woman more generally. “We need to change the distribution models to reach more women,” he explains. “Ninety percent of advisers are like me but, as well as encouraging more women into these roles, there’s no reason why we don’t consider how we engage with them through other channels, such as digital.”

Mr Timpson would also like to see diversity and inclusion becoming a key consideration when assessing any insurtech and fintech initiatives. “Any development needs to embrace accessibility,” he adds. “It wouldn’t be healthy to overlook this.”

But, whether ensuring greater access to cover, or creating a more diverse and inclusive industry, Mr Timpson believes the insurance sector should look to one of its key characteristics. “Insurance is an enabler,” he explains. “We’re here to help people protect what matters and achieve their goals.

We need to make sure we offer this opportunity to everyone.” ●

ILLUSTRATION: PADDY MILLS

JOHNNY

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19/04/2018 17:22

THE INTERVIEW: JOHNNY TIMPSON

IT’S ABOUT BUILDING PROFESSIONALISM: A GP HAS NO PROBLEM REFERRING A PATIENT TO A SPECIALIST WHEN ADDITIONAL EXPERTISE IS NEEDED AND WE NEED TO REPLICATE THIS IN THE FINANCIAL ADVICE SECTOR

15

JOHNNY DO GOOD

Scottish Widows’ Johnny Timpson talks to The Journal about his lifelong interest in insurance, and his passion for helping others

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19/04/2018 17:22

INSURING WOMEN’S FUTURES LIVE

16

THE FUTURE IS NOW Luke Holloway reflects on a buzzing Insuring Women’s Futures Live week, held in March

T

he Chartered Insurance Institute’s (CII) Insuring Women’s Futures Live week in March was a huge success.

‘The Big Conversation’ was an action-packed happening of keynote speakers from across the insurance and financial planning profession and beyond, lively panel discussions and interactive workshops, all aimed at improving the way the insurance profession engages with women as consumers.

The event welcomed nearly 300 delegates on the day – well in excess of the anticipated target of 250 – and the CII’s social media was a buzz of activity, with CII tweets alone gaining nearly 1,000 engagements on the day, helping #IWFLive trend on Twitter at number seven. ↘

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INSURING WOMEN’S FUTURES LIVE

CII president Dame Inga Beale

17

‘The Big Conversation’ was an action-packed happening of keynote speakers from across the insurance and financial planning profession and beyond, lively panel discussions and interactive workshops

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INSURING WOMEN’S FUTURES LIVE

Host Angela Lamont and speaker Dr Sue Black

91%

18

GAVE THE IWF LIVE A ‘GOOD TO EXCELLENT’ RATING Host for the day was award-winning broadcaster and presenter, Angela Lamont, and speakers included Dr Sue Black, founder of global community TechMums, who shared insights she has gained from 20 years of campaigning for more recognition and support for women; and Jane Portas, Women’s Risks in Life lead, who outlined key themes arising from the Insuring Women’s Futures (IWF) research into women’s risks in life.

INTERACTIVE INNOVATION Collaborative workshops were held in the afternoon, where delegates generated a huge number of innovative ideas for the IWF Market Task Force to consider in changing attitudes and culture towards women’s risks. These included topics such as flexible working, future talent, senior decisions, trust and transparency, education, and the positive business impact of diversity.

Following the interactive sessions, the event was completed with the live sharing of results and feedback from the day’s voting and discussions, showing what were attendees’ priority concerns and what people felt were

82%

OF IWF LIVE ATTENDEES SAID THEY WERE INSPIRED TO GET INVOLVED WITH MTF INITIATIVES the best ways to make a change and positive impact.

The event also saw the launch of season two of the CII Podcasts series, recorded at IWF Live and featuring a fantastic selection of speakers and attendees. These included Charlotte Matier, director of development, Alzheimer’s Society; Rose St Louis, head of strategic partnerships at Zurich; Dame Inga Beale, CEO of Lloyd’s of London; and Sam Seaton, CEO of Moneyhub Enterprise.

The podcasts have now had more than 4,000 downloads since their launch earlier this year.

WOMEN OF THE WORLD Furthermore, during March the CII supported Women of The World (WoW) once more, holding a ‘think-in’ idea generation session with people from outside the profession, while the CII’s chief executive, Sian Fisher, and

Jane Portas joined panel sessions with the Fawcett Society, sharing thoughts on how we can improve the equality of pensions and debt.

One delegate returned to WoW from last year to share the news that as a direct result of our previous event she had gained a significant degree of financial independence, having convinced her wealthy husband to create a pension in her own name, and opened all their finances to joint control.

Both events and the overall message of IWF gained massive attention across the profession and beyond, and you can keep the conversation going by using the #IWFLive hashtag on social media. Look out for more to come from the IWF Task Force. ●

FIND OUT MORE You can still download the full IWF Securing The Financial Future of The Next Generation report, by visiting: www.insuringwomensfutures.co.uk And to listen to latest episodes of CII Podcasts, visit: bit.ly/2Gx4HyC or search your usual podcast provider.

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20/04/2018 10:06

DISCOVER RISK

N

ational Apprenticeship Week 2018 (#NAW2018) might be over but the CII is still on a high following a productive and inspiring seven days. The week is designed to celebrate the positive impact that apprenticeships have on individuals, businesses and the economy. While perceptions, myths and attitudes towards apprenticeships are changing, there is still more to be done. Attracting new and diverse talent into the market underpins the activities that the CII is doing in the educational sphere, whether it be in schools, colleges or universities.

To mark the week-long celebration, the CII ran a range of different events.

APPRENTICESHIP NETWORKING On Monday, more than 100 people filled the Great Hall for this apprenticeship event, which was organised to provide students with the opportunity to hear and speak to current apprentices and to raise awareness of our profession.

Following a warm welcome by the Sian Fisher, CEO of the CII, George Tsounias – relationship and events executive, education, CII – introduced the session.

The Brokerage talked about the work it continues to do to raise aspirations with its local school networks and how it provides opportunities to young people from diverse backgrounds.

Elena Stevenson, a current apprentice at Markel International, talked about her experience and how, despite the pressure to go to university, an apprenticeship was right for her. Next up was the inspiring ASSET. An insurance apprentice network run by apprentices from across the country, its aim is to bring together apprentices, share best practice and show that being an apprentice can be an interesting, rewarding and exciting career path.

to table, to talk to students. This was an opportunity to gain a better understanding of the profession and learn about the variety of careers available. After the speed networking session, a buffet-style lunch followed with all parties taking part in informal networking.

Feedback quotes: “I found some very interesting candidates suitable for apprenticeships and they have already been in contact to find out more” “I hope many other students may benefit from this in the future”

FACEBOOK LIVE On Wednesday evening, the CII hosted a Facebook Livestream for 16 to 18-year-olds, parents, carers and teachers, where the hot topic was: ‘Apprenticeships or Uni?’ The livestream was hosted by Capital FM’s Roman Kemp, who helped generate debate among our panel which included a representative from the National Careers Service, a former apprentice and a HR talent adviser. The livestream has already reached almost 30,000 views and can be found on our Facebook @DiscoverriskFB.

Prior to National Apprenticeship Week, the CII conducted research which highlighted that 96% of 16 to 18-year-olds feel that their parents were in some way influential when it came to educational and career choices. We also found that parents and carers place the biggest reliance on schools to get their information from (57%), which is why it is so important that parents and carers are fully informed.

If we are to change perception, we cannot just focus on the young but must also look to their influencers.

All this work would not have been possible without the continued support of our members and supporters. Whether you helped at a fair, assisted at a discover event or helped in any way during the week to help raise aspirations, increase awareness of the risk and financial planning professions, thank you!

Without your help, our reach and impact would not be as great.

And remember, choices are good but informed choices are even better! b

19

George Tsounias is relationship and events executive, education at the CII

NAW2018 The Journal looks back at National Apprenticeship Week

SPEED NETWORKING During the event, apprentices and employers moved from table

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HHOOT TT TOOP PI CI C–: GMDOPTRO R

20

HOT TOPIC

On May 25, the General Data Protection Regulation comes into force and is set to impact the insurance industry hugely. We take a look at how to prepare

ILLUSTRATION: KATE HAZELL

IT’S COMING, READY OR NOT thejournal.cii.co.uk / The Journal / April - May 2018

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HHOOT TT TOOP PI CI C–: GMDOPTRO R

he European’ Union’s General Data Protection Regulation (GDPR) comes into effect on 25 May, whether the insurance industry is ready or not.

The scope of the regulation is not only Europe-wide – it also impacts all companies that do business with a European entity.

Despite this, various reports suggest the world is far from ready – with some suggesting that, even within Europe, about 75% of business have yet to prepare.

Is the insurance industry any different and how can companies help themselves?

Lawyers at Clyde & Co warn: “While some companies within the insurance sector have made good progress towards GDPR compliance, we know there are large parts of the industry that have not made adequate plans for compliance.” However, they also believe it is never too late to start a GDPR compliance project.

Mike Steeds, operations director at Prescott Jones, agrees: “The introduction of the GDPR is going to have a significant impact on the insurance industry.

“The biggest effect is going to be on how the industry deals with the processing of sensitive personal data, where there are specific issues. Many insurance products and policies rely on personal data being provided for arranging and underwriting purposes and for when claims arise.”

THE GDPR IN A NUTSHELL, ACCORDING TO PWC • Data breach deadlines: Insurers will have just 72 hours to disclose a personal data breach to the regulators and possibly to the affected individuals.

• Better quality consents required: Insurers will have to meet tougher quality requirements for legal consent, if they want to rely on consent to process personal data.

Customers must give that consent

•

•

•

•

•

•

•

•

freely and on the basis they have been fully informed about the nature of each type of usage. The insurer will have to prove that they have obtained consent of the right quality.

Privacy by design: Insurers will be required to minimise the collection and use of personal data and will be expected to do this automatically as they design new products and services.

New fines and penalties: Regulators will have the power to fine insurers up to €20m or 4% of worldwide annual turnover (whichever is higher) for the most serious breaches.

Processing now at risk: Customers will have the right to object to having data on them used for insurance activities such as risk and pricing modelling, unless the insurer has compelling and legitimate reasons. Customers have the right to object to data processing for direct marketing.

Profiling gets tougher: Insurers will not usually be allowed to make decisions about customers purely on the basis of automated processing, including profiling, unless they have established a legal right to do so, which will generally be contract-based.

New right to be forgotten: Customers will be entitled to ask insurers to delete their personal data where it is no longer required for its original purpose, or where they have withdrawn their consent.

Portability guaranteed: Customers will be entitled to request that their personal data is transferred from one insurer to another as they switch companies.

Insurers will be obliged to facilitate this.

International data transfers: While EU data transfer rules are not fundamentally altered, there will be enhanced regulation of the mechanisms put in place to ensure that personal data is properly protected when abroad.

Data protection officers (DPOs): PwC

considers that DPOs are required as a matter of good governance in all cases.

HOW TO PLAN Insurers must initially assess where GDPR sits within their risk appetite and look at the opportunity it could pose, suggests PwC. They will also need to carry out an assessment of their current state as it relates to the new regulation.

A risk-based approach considers the specific characteristics of an organisation (such as the type of personal data, the nature of the customer interaction, geographic operations) and places those elements alongside the gaps and the risk appetite.

Following the assessment and prioritisation phases, organisations may need to:

FIND OUT WHAT YOU HAVE AND WHERE IT IS

21

The urgent priority for insurers is to identify exactly what data they already have, how and where this information is stored.

Key is understanding what consents and permissions have been obtained. Where those consents are lacking or insufficiently explicit under the GDPR, it may be necessary to contact customers to obtain the right permissions.

At the end of this, insurers should: • Understand what data is held, where it is and who has access; • Have a clear view of any additional risks posed by third-party access to data; • Be sure that data is being used only in ways that customers have consented to.

THE URGENT PRIORITY FOR INSURERS IS TO IDENTIFY EXACTLY WHAT DATA THEY ALREADY HAVE, HOW AND WHERE THIS INFORMATION IS STORED

CONSIDER HOW YOU CURRENTLY USE DATA – AND HOW YOU WOULD LIKE TO USE IT Claims: Insurers are already using data and analytics tools in the battle to reduce fraud and there are further →

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HHOOT TT TOOP PI CI C–: GMDOPTRO R

22

opportunities; might social media provide valuable evidence of fraudulent claims, for example? However, the new regulation on the consent required for data processing may pose a threat to this.

Pricing: Insurers are excited by the potential of telematics to help them price policies on a much more bespoke basis. The new regulation will limit how telematics data can be used without consent – it will certainly become much harder to monetise this information.

Underwriting: Rich data enables insurers to identify smaller and smaller homogenous pools of risk, particularly by bringing in non-traditional insurance data such as customers’ credit histories and health records – and even data from geolocation tools.

The extent to which customers will give their consent for such data under the GDPR is unknown. Valuable health data may be a particularly knotty issue.

Marketing: Marketing is increasingly dependent on highly sophisticated data and analytics tools, capable of delivering personalised messages to customers. It may become a lot harder for insurance marketers post-2018, as the GDPR affords customers the right to object to the use of personal data for direct marketing. And where international insurance groups seek to share information across the company for cross-selling purposes, the new restrictions on data transfers may be problematic.

In each of these functions, and across the business, insurers will need to evaluate whether what they currently do – and what they hope to do in the future – is acceptable under the GDPR. This will determine whether new consents and disclosures are required, or whether certain activities will simply be off-limits.

At the end of this second stage, suggests PwC, insurers should: • Have an organisational view of what data privacy means to the whole business; • Routinely be incorporating data protection and privacy issues into overall business strategy; • Be confident that their systems

work on the ground e.g. files in the corner, storage in cupboards etc.

FOR CONTRACTS

75%

OF BUSINESSES HAVE YET TO PREPARE FOR GDPR ACCORDING TO SOME ESTIMATES

• Consider how you have historically dealt with DPA issues in contracts as reliance on a ‘compliance with all applicable laws’ clause will not be sufficient; • There are now prescribed contractual clauses outlining basis of processing, who is responsible for what, why, for how long etc; • Consider indemnities for breaches and how requests for right of erasure/ correction can be communicated.

DPO and processes are agile enough to facilitate innovation; • Be ready for further change as the regulatory environment evolves.

WHAT IS THE CII DOING? The Chartered Insurance Institute (CII) has to prepare for GDPR in the same way as insurance companies and brokers, so what has it been doing?

Liam Russell, legal director and general counsel at the CII, explains that the CII firstly established a working group to consider and implement the CII’s GDPR compliance strategy.

“The key thing,” he stresses, “is that compliance is not seen as simply an IT task but is an operational matter affecting the whole organisation.”

For the first stage, the working group spent time on completing a data-mapping exercise to establish what data was held, where it is held, by whom, for what purpose, for how long, who else has access and why?

He suggests: • A good way to map your data is to send a questionnaire out to senior execs to get completed by their respective departments; • The second part is to get the completed questionnaires scrutinised by someone with data protection/GDPR knowledge eg business analyst, lawyer to consider if further information is required; • Follow this up with a departmental visit to verify answers on questionnaire and check how things

• The CII has appointed a third-party service provider to do this.

TRAINING • Training is recommended for all staff (high level) on what GDPR is and how this may affect them (slightly tailor to departments). ●

72 hrs

INSURERS WILL HAVE JUST 72 HOURS TO DISCLOSE A PERSONAL DATA BREACH TO THE REGULATORS AND POSSIBLY TO THE AFFECTED INDIVIDUALS KEY ASPECTS ● You will need executive support and

buy-in. It is a good way of ensuring that you get your house in order. ● It is a good time to review your privacy statement; membership/customer declarations and terms and conditions; retention policies. ● Seek to move away from consent – other modes of lawful processing – compliance with contract, legitimate interests. ● The CII has developed compulsory and non-compulsory communications, such as an AGM notice (compulsory) and marketing material (not compulsory).

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20/04/2018 10:07

SOCIAL MOBILITY

THE INVISIBLE

INJUSTICE

As the case for diversity in the workplace gains ever more backing, Alex Dooler examines an often forgotten area – social mobility

T

he scope of insurance stretches from the deepest of jungles to the biggest of cities, from the most treacherous of oceans to the driest of deserts. Insurance is inherently diverse in the projects it underwrites and the clients it serves.

This concept is deep-rooted in our industry’s DNA. The bedrock of modern insurance for example, was built on boats shipping goods abroad. Looking at the present, the globalisation of our economies has further strengthened this diversity in client profile.

DIVERSITY BENEFITS Given this, our companies must reflect the clients we serve. It makes sense that our professionals are as equally diverse as our projects and clients. But diversity in the private sector can also drive social progress. A recent study by Gao and Zhang (2015) shows that a more diverse workforce fosters enhanced creativity and innovation.

Although progress is slow, diversity is visibly improving. Executive boards are changing and there is more female, LGBTQ+ and BAME representation at the top. However, there is a strand of diversity that cannot be seen with the naked eye; one that is complex and difficult to perceive.

That is social mobility. It tinges the way a person communicates, their hobbies and self-confidence. Sadly, these non-meritocratic cultural and social markers of class are proven to cause reduced earnings and opportunity.

In 2015, David Cameron claimed: “Britain has the lowest level of social mobility in the developed world. Here, the salary you earn is more closely linked to what your father got paid than in any other major country.”

Unfortunately, these imbalances continue from early career right through to executive level. Research by Claire Crawford and Anna Vignoles (2014) found that graduates from private schools earn some 7% more annually than their stateschool counterparts, only three and a half years after graduation. This is even when comparing similar graduates in terms of

university choice, subject and grade attained.

These imbalances also persist through to mid-career, as shown by Dr Sam Freidman’s research. He found that after accounting for indices such as education and levels of training, less privileged workers in finance should expect to earn £11,200 a year less than their counterparts.

As Michael Lewis’s book Moneyball illustrates, humans have high levels of unconscious bias when choosing people for their team, which can drastically reduce its performance.

Despite Oakland Athletics being one of the poorest teams in the Major League Baseball, they had incredible success through looking beyond unconscious bias.

SHOCK TO THE SYSTEM Data on social mobility can be both shocking and depressing. But things can change – and they are. AIG for example has partnered with the charity Career Ready, which enables City professionals to mentor students from low-income families. Newly championed apprenticeships across the insurance industry could also act as a pipeline of diversity to the industry.

The big four consultants have a more impressive record in the field of social mobility, which the insurance industry could emulate. KPMG was the first business in the UK to publish detailed workforce data outlining the socioeconomic make-up of the firm. Deloitte has also championed contextual hiring, which emphasises a student’s grades in the context of the school they attended.

An impediment to progress due to social upbringing is often an invisible injustice. It is difficult to see, but statistical analysis exposes it. Given this, it is promising to see the private sector making strides in levelling the playing field. However, we must continue to pull the levers of change. The industry cannot and must not stop now. As a sector, we need to make the smartest selections – both in the risks we underwrite and the people we hire. ●

23

Alex Dooler is a graduate surety underwriter at AIG thejournal.cii.co.uk / The Journal / April - May 2018

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19/04/2018 17:25

MARINE

A

With increasing numbers of commercial ships set to travel via the Arctic in coming years, Tim Evershed examines the insurance implications 24

rctic sea routes have the potential to dramatically cut voyage times between Europe and Asia, with the Northern Sea Route (NSR) reducing the trip from Yokohama to Rotterdam by more than a week compared to using the Suez Canal.

Although at present few commercial ships are transiting through the Arctic, with only 19 using the NSR last year, that number is forecast to increase rapidly.

Steve Harris, senior vice president (SVP) in the marine practice at Marsh, says: “We haven’t seen a huge increase in the volume of Arctic transportation to date but it is going to grow exponentially in the next 10 years [due to] a number of factors, perhaps most importantly of which will be the growth of the Yamal Peninsula as a major source of oil and gas. There is [also] the undeniable truth of global warming; whatever the causes behind it may be, it is going to see a reduction in the winter ice or certainly an extension of the navigable seas in the Arctic.

BREAKING THE ICE thejournal.cii.co.uk / The Journal / April - May 2018

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MARINE

PREPARING VESSELS As well as the reduction in the volume of ice each summer, the introduction of the Polar Code, which came into force at the beginning of 2017, is also expected to help shipowners and insurers prepare vessels for the challenges that the NSR, Northwest Passage and Arctic Bridge present.

Technical issues including weak satellite communications over the North Pole; inadequate search and rescue systems; and environmental risks in protected areas make it a huge challenge for the insurance sector.

Helle Hammer, the International Union of Marine Insurance’s political forum chair, says: “Insurance is there to provide cover, but we need to do this very specifically on a case-by-case basis. It is not like it’s easily accessible but if it is a prudent owner, someone the insurer knows very well and makes them part of the planning for going up there, then you will get cover – but it depends on price.

“Shipowners still need to do the planning, they still need to think about how to get spare parts and typically an insurer will ask about that. The Polar Code helps in the sense of owners being better prepared but there aren’t that many vessels going up there yet.”

Even shipowners that do make all the proper precautions can find themselves facing an engine failure, which is by far the most common claim that will happen in the area. The challenge then will be the remoteness and preparations will be tested as salvage vessels or even spare parts may not be available. Some underwriters will therefore insist that vessels have some sort of pre-arrangement, like a Russian icebreaker that can tow a stricken vessel.

Ice and icing are also factors and the cold temperatures can change very quickly, while the Arctic seabed is not well mapped.

INSURANCE IS THERE TO PROVIDE COVER, BUT WE NEED TO DO THIS VERY SPECIFICALLY ON A CASE-BY-CASE BASIS All these elements make for a particularly dangerous and costly environment when there are incidents, as salvage and oil pollution cleanup operations are extremely expensive and difficult to carry out.

Ms Hammer says: “There won’t be any difference in cover [to] going anywhere else in the world. You will have liability insurance capped up to $1bn. But you need your insurer to say you can go to the area and you need to be prepared.

“One of the challenges for underwriters is that they look at loss statistics to price risks and there are some new risks in this area that we don’t know much about. We don’t really have any big numbers on it and that means that insurers remain very cautious about this area and we need to learn more. This is still unknown territory for us.”

Northwest Passage. Vessels carrying more than 1,000 passengers in Arctic waterways present serious concerns for insurers, as well as an evolving legal and regulatory environment in the region.

Jonathan Moss, partner and head of the transport sector at DWF, says: “Due to the particular composition of the region, the regulatory framework of the Arctic is still significantly complex: the area ties together three continents, accounting for eight different states and sea areas beyond national jurisdictions.

This means that the Arctic has no single governance regime.

“Nevertheless, in the past few years, it has become evident that international law is essential for the development of consistent regulations across the Arctic and the Polar Code is testament to this need. The regulatory framework is therefore striving to achieve greater consistency and focus on common international goals, such as reducing environmental impact.” ●

THE NORTHWEST WAY

SPECIFIC REQUIREMENTS One requirement of the Polar Code is that vessels are crewed by an experienced and properly qualified crew.

Mr Harris asks: “Where is the training going to take place? Who can teach the younger generation?

Because experience is worth its weight in gold in that part of the world.

There’s very few that have that experience.”

Other challenges include the increase in cruise ships using the

25

CURRENT ROUTE NORTHWEST PASSAGE

CURRENT ROUTE NORTHWEST SEAROUTE Source: Hugo Ahlenius, UNEP/GRID-Arendal IMAGE: MARSH IMAGE: ISTOCK

“President [Vladmir] Putin has announced that by 2025 he expects to see the volume using the Northern Sea Route multiply tenfold.”

thejournal.cii.co.uk / The Journal / April - May 2018

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19/04/2018 17:25

UNDERINSURANCE

SERVING THE GIG ECONOMY Insurers must keep pace with changing trends among the population if they are to serve the needs of their clients, as we report

26

T

he rise of Uber, AirBnB and others have created a new look workforce, which is already challenging many of the norms in terms of workers’ rights.

However, it also has implications for insurance companies as this swathe of self-employed workers grows exponentially.

Will these new business owners think of insurance? It seems not yet.

A new survey from Zurich UK reveals just 2% of gig workers have access to financial protection via their gig company – and that includes life insurance, income protection and critical illness insurance – potentially leaving thousands without protection.

As part of Zurich UK’s Restless Worklife report, UK-wide analysis found the vast majority of gig workers would have to rely entirely on their own financial backup should they become unable to work through illness or injury. Looking at employee benefits in the broadest terms, more than half (53%) do not receive any benefits from their gig company.

Considering how people would protect themselves should they lose their regular income for three months or more, almost a third (29%) said they would rely on state benefits, while 16% would feel compelled to sell personal

possessions to make ends meet. The ‘bank of mum and dad’ would be the option for 19%.

Respondents were asked to imagine they could have access to benefits for a 5% deduction in their minimum wage income. The results showed a clear desire for protection: 28% said they would agree to this if they could access sick pay, 14% for income protection, 12% for critical illness and 8% for life insurance. Even on basic pay, hypothetically speaking, people show a clear desire to give up a portion of their income if they are financially protected.

GIG EMPLOYMENT IN NUMBERS ● More than half of gig workers (53%)

do not receive any traditional employee benefits such as a workplace pension, holiday and sick pay from their gig company, relying entirely on their own financial backup; ● Study shows employees lose an average of 30.4 working days each year due to sickness and underperformance in the office as a result of ill health; ● Productivity loss due to physical and mental health issues is costing the UK economy an estimated £77.5bn a year; ● Some 73% of coinhabiting couples do not have a life insurance policy.

thejournal.cii.co.uk / The Journal / April - May 2018

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UNDERINSURANCE

NEW STATUS Earlier this year, a governmentcommissioned review of employment practices led by Matthew Taylor, recommended a new status for gig workers as ‘dependent contractors’, requiring gig companies to treat those who worked for them as employees – allowing them access to the same workplace benefits.

The Work and Pensions Select Committee and the Business Select Committee have also announced that a draft Bill has been drawn up, which would make ‘gig’ companies pay holiday and sick pay.

The changing pattern has an impact beyond the worker themselves, however, something insurers should be factoring into any risk assessments.

Research from the 2017 Britain’s Healthiest Workplace survey (BHW), a study of almost 32,000 workers across all UK industries, has revealed that employees lose, on average, the equivalent of 30.4 days of productive time each year as they take time off sick and underperform in the office as a result of ill health (otherwise known as presenteeism).

This is equivalent to each worker losing six

working weeks of productive time annually.

The combined economic impact of this ill health-related absence and presenteeism is £77.5bn a year for the UK economy. Worryingly, employee work impairment and the associated productivity loss appears to be on a worsening trend, up from 27.5 days and £73bn respectively in 2016.

ASSESSING THE IMPACT Chris Bailey, a partner at Mercer Marsh Benefits, says: “Some employers still doubt the impact of presenteeism, dismiss the data and fail to take action.

“It is not a case of having a presenteeism problem or not. All organisations will see a reduction in how productive their people are when they are experiencing physical or mental health issues.

“The data shows that those

2%

OF GIG WORKERS HAVE ACCESS TO FINANCIAL PROTECTION VIA THEIR GIG COMPANY

organisations who understand this and take steps to maximise their employees’ productive time at work, for example through supporting an active workforce, promoting good nutrition and enabling positive mental health, enjoy a competitive advantage.”

Another major change in lifestyle is the growing trend toward cohabiting families, again with worrying trends for insurers.

A Zurich survey has found: • Some 73% of coinhabiting couples do not have a life insurance policy; • Cohabiting families in London, the west Midlands and the east of England are the least likely to have life insurance; • Whereas those in Wales, the northeast and Scotland are the most likely to have life insurance.

Zurich said that, as cohabiting families do not yet enjoy the same legal rights as married couples, this is leaving thousands of families at risk should the worst happen and their partner dies.

It seems insurers need to start thinking outside the box if they are to serve the needs of the 21st century client. ●

27

REDUCING THE RISK Recommendations from Zurich to reduce the risk of a gig economy long-term savings and protection crisis: ● Expand auto-enrolment to the self-employed.

Employee contributions to be initially set at 4%, increasing to 8% when appropriate to avoid triggering a mass ‘opt out’; ● Commission a government review of employment and working practices for older gig workers, to consider what challenges older workers face but also how we can support employers to take on and retain an ageing gig workforce; ● Introduce financial incentives for gig companies to offer income protection via tax or national insurance to provide income protection within the workplace; ● More financial education from gig companies to increase awareness among workers of existing savings and protection products; ● Greater innovation from the insurance industry to develop more flexible savings and protection products for workers that reflect their working patterns.

thejournal.cii.co.uk / The Journal / April - May 2018

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19/04/2018 17:26

SAY YES To accessible CPD

Most events and publications from Local Institutes count toward your annual CPD commitment.

Local institutes are regional hubs that deliver an extensive range of professional CPD events and networking opportunities to each one of our members based across the UK. In today’s market it is absolutely vital to keep your technical knowledge and capabilities current.

Engaging with your local institute can help you achieve this.

Local institutes give you access to a wealth of local activities helping you keep your technical knowledge up to date which in turn can support your career progression.

Say yes to staying in touch Stay informed on the activities being run by your local institute by saying yes and opting in to local institute communications.

Opt in online www.cii.co.uk/amend Opt in by email customer.service@cii.co.uk Opt in by phone +44 (0)20 8989 8464 Please ensure you have your CII PIN to hand.

To ďŹ nd out more about local institutes visit: www.cii.co.uk/localinstitutes

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18/04/2018 12:05

FRAUD

A

s a society, we are becoming increasingly interconnected, and at an extraordinary pace. We live in a world where we can livestream each other our current locations, order almost anything with next-day delivery with our voices and instruct robotic assistants to turn up the heating in our homes.

Of course, this world of interconnectivity relies on huge amounts of communication and data transfer between each device, network and user.

FIGHTING THE FRAUDSTERS Among the many reports warning of threats to our privacy and personal security, it is rare to see stories highlighting how certain technologies are protecting us from dangers such as fraud, which has a significant impact on all of our pockets, whether we are a direct victim or not.

As research by the Centre for Counter Fraud Studies showed, fraud costs the UK £190bn every single year. While some fear that being so connected can put us at risk, in reality it is now possible to isolate fraudsters quicker than ever and tackle the problem head on.

The UK is aiming to trial fully driverless cars by 2021. While these may seem relatively unrelated to fraud, it is likely that the development of driverless technology will make a huge difference for insurers looking to get a comprehensive and detailed picture of risk.

Further, the sheer amount of people attempting to make fraudulent claims on their car insurance may ultimately be eliminated if driverless cars become the norm. It is hard to lie about the cause of an accident if the driver has not had a significant role to play in its execution.

analysis of the data after an accident is recorded.

In this instance, we were able to determine the fact that the policyholder and two of the claimants actually knew each other, due to the fact that the policyholder’s blackbox data showed they had visited each of the claimants’ homes in the days leading up to the incident. They had lied about the way the collision occurred and further data analysis showed that one of the claimants had a history of being involved in an organised crime network (fraud ring).

£336m

COST OF ‘CRASH FOR CASH’ SCHEMES PER YEAR IN THE UK

TELEMATICS TO THE RESCUE But while we await the rise of autonomous cars, there are still ways to fight the ‘crash for cash’ schemes that cost the UK some £336m a year. Telematics has emerged in the last decade as a fail-safe way to detect and prevent fraud on a mass scale.

At Insure Telematics Solutions, one recent example we dealt with was a ‘crash for cash’ incident that could have cost the insurer we were working with up to £40,000, had it not been for our intervention and insight. When a policyholder takes out a blackbox insurance policy, the insurer is able to refer to their blackbox provider to gain

MAKING A DIFFERENCE In the world of insurance, technology is having a steady impact on fraud.

Insurers are waking up to the different ways in which we can assess and access information. They are now heading up technological developments, rather than shying away from them.

Telematics will be just the tip of the iceberg in terms of how technology will come to fight and eliminate fraud, but for the time being, it is one of the only developments that utilises the potential of the digital age to really make a difference in the war on fraud. ●

29

Adam Gooch is commercial director at Insure Telematics Solutions

ROBOT DEFENDERS While some fear the dangers of ever-increasing interconnectivity, Adam Gooch explains how in the insurance world, technology is helping to to fight fraud

thejournal.cii.co.uk / The Journal / April - May 2018

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19/04/2018 17:27

WELLBEING IN THE WORKPLACE

TURNING

DARKNESS INTO LIGHT

Financial adviser Paul Howarth on using his own experience of depression to provide hope for others

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W

hen pressure in life gets too hard to handle, where do you turn?

After playing football to a professional level, Paul Howarth took a junior advisory role as a financial adviser. For five years, he progressed well but around the age of 30 many contributory factors occurred and Mr Howarth was signed off work due to depression.

His salary was structured so that pay was at the discretion of the directors, who decided his leave would be unpaid. Like many in this situation, he had no choice but to ignore the advice of health professionals and return to work Coming from a football career, succeeding in a high-pressure job role and being male made dealing with his problems that much harder.

Feelings were supressed and in the evenings comfort was found in alcohol.

He admits: “I couldn’t ask for help – it was northern male pride combined with not knowing where to turn – and after a time, I honestly felt like the world would be a better place without me in it.” His story is not uncommon.

TURNING THE CORNER Mr Howarth was fortunate. The Professional Football Association placed him in Tony Adams’ Sporting Chance clinic, where a month of reflection and understanding was prescribed. He found the days long and tough, but day by day inner strength returned and with support he fully recovered.

Today, his life is transformed. He describes how life is now full of unthinkable joy and happiness, free from inner torment.

He has set up PH7 Wealth Management, a thriving practice in Lancashire that not only manages funds and

I COULDN’T ASK FOR HELP – IT WAS NORTHERN MALE PRIDE COMBINED WITH NOT KNOWING WHERE TO TURN – AND AFTER A TIME, I HONESTLY FELT LIKE THE WORLD WOULD BE A BETTER PLACE WITHOUT ME IN IT

provides financial advice but also helps clients achieve their retirement dreams, so that the money is put to full use with good planning.

This success was not enough however. Mr Howarth decided to do further study and is now currently completing his advanced training to be clinically approved to practice transactional analysis psychotherapy.

In a short time, he will proudly have a postgraduate degree.

With this under his belt, he has opened the PH7 Wellbeing Centre.

With departments for psychotherapy and counselling alongside meditation, yoga and holistic treatments, the centre aims to provide a new approach to treating the very real problem of depression. Mr Howarth’s psychotherapy work also integrates well with clients around the age of 55-plus who fear working less hours or who worry they will be without work as a focus.

The PH7 Wellbeing Centre is already starting to thrive since the January opening. It is a private, safe place for anyone who needs to reach out for help, especially those with a professional background who require the privacy to get well.

There are big plans for the PH7 Life Charity and now PH7 Ignite – a programme for health in the workplace and corporate environment. The story is proof that however difficult things may seem, with the right help things can get better, and Mr Howarth can be an inspiration to anyone who feels there is no hope. ●

For more information, visit: ph7wellbeing.co.uk

thejournal.cii.co.uk / The Journal / April - May 2018

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19/04/2018 17:27

GENDER INCLUSION NETWORK

T

he Gender Inclusion Network for Insurance (GIN) is an industry-wide initiative that was created to promote networking, strive for change and challenge norms and stereotypes – all under the umbrella of improving gender inclusion across the industry.

The network was formed in 2015 by a group of likeminded women from across the insurance industry, as demand to promote and achieve real inclusion was rising and it was a chance for the debate about gender inclusion to be heard in the industry.

GIN now has a management committee of 13 individuals from within insurance, who have passion, enthusiasm and confidence to champion gender equality. The committee additionally represents a mix of professions – with some members being part of their employer’s internal gender inclusion networks.

INFLUENTIAL ROLE Sponsored by ten of the largest insurance organisations, the work the team at GIN is now doing is influencing how the industry approaches gender – also giving additional voice to individuals when they ask.

The network has three key objectives: Collaborate across the group of existing in-house gender networks within the industry to share and leverage best practices Instigate and drive positive change in the industry to further advance gender equality

1

2

3

Act as a wider resource and ‘go-to’ place for anyone wanting to network across the insurance industry with others who are keen to promote gender inclusion and equality.

There are two cochairs of the network – Maren Burrowes, of RSA, and Louisa Lombardo from Chubb. Both stepped up to the role in the summer of last year to help build on the network’s foundations and drive a stronger focus on making a real impact.

Ms Burrowes says: “We designed our calendar this year to bring our members an event every month, covering a range of topics that people have asked for.

In the past few months, we have had a deep dive into how we look after our wellbeing to benefit our working life; a workshop on promoting and building our personal brand; and hosted a #PressForProgress panel discussion as part of our International Women’s Day celebration.

Discussing why people get involved, Ms Lombardo says: “More and more people have been taking advantage of our events, which is very rewarding to see. We really respect our members’ time and plan our events around the hot topics that will have the biggest impact. We are here to make a difference – and feedback is strongly showing that we are.

“We’re also placing a real emphasis on offering

development opportunities to our committee. We maximise our meetings to discuss best practice and empower our committee members to practise skills, from presenting to chairing meetings. Our committee is newly formed and our regular membership is growing all the time, which is great to see – but there’s no limit on numbers so we’d absolutely encourage people to join or come along to one of our events to find out more.”

If you would like to get involved, join the network or ask questions, GIN would love to hear from you. Just get in touch via Twitter or LinkedIn – follow them @Gender1nclusion or email info@GenderInclusionNetwork.co.uk ●

WE REALLY RESPECT OUR MEMBERS’ TIME AND PLAN OUR EVENTS AROUND THE HOT TOPICS THAT WILL HAVE THE BIGGEST IMPACT

Samantha Eustace is communications lead for the Gender Inclusion Network

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USE YOUR INCLUSION The Gender Inclusion Network on driving change in the Insurance Industry thejournal.cii.co.uk / The Journal / April - May 2018

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19/04/2018 17:28

DISRUPTION

U

32

ber, Airbnb, Amazon and Google – all household names that simply did not exist a very short time ago.

We have got used to doing business the Amazon way, we no longer hail a passing cab but look to our phones and have got used to travelling the world without the help of a travel agent.

But can such disruption truly come to the insurance market, where the client is paying for a promise and where regulators have introduced a massive number of rules and regulations designed to protect customers and their money?

Late last year came news that should have sent shivers down the spine of insurance strategists the world over: Amazon started recruiting insurance professionals in London to join a new team looking to disrupt the insurance market in the UK, Germany, France, Italy and Spain. GlobalData, a data and analytics company, broke the news, explaining that Amazon provides transparent services such as the ability to track a package, next-day delivery, a clear returns policy and customer reviews on products, providing clear communication to customers throughout the purchasing journey.

Translating this to the insurance market, Patricia Davies, financial services analyst at GlobalData, says: “Amazon has a positive reputation for

putting customers’ needs at the heart of its propositions. This level of trust is something the insurance industry has really struggled with, especially after the likes of the PPI scandal.”

TECHNOLOGICAL ADVANTAGE Worryingly for traditional insurers – and according to GlobalData’s 2017 General Insurance Survey – 18% of consumers would buy their motor or home insurance from Amazon.

Ms Davies explains that the company’s investment in technology has brought households the Echo and Dot, voice-activated speakers that use artificial intelligence to support everyday needs.

Ms Davies adds: “If insurers are not careful, they may be pushed out of having a direct relationship with customers and will be relegated to the role of a price-driven risk carrier at the back end. Either way, this is a sure sign disruption is on the way for the UK insurance market.”

BLOCKCHAIN BUZZ Roll on just a few months and it seems Amazon may not be the only company in the game.

Buzzvault, which claims to be the world’s first asset vault to be built on the blockchain, has secured a longterm strategic partnership with Digital Partners, a Munich Re business unit.

Buzzvault insurance will launch in Q3 2018 as a personalised home

insurance policy available to consumers based on a digital inventory of their home contents. It says this “game-changing new home insurance proposition will address the chronic problem of underinsurance in the home insurance market by leveraging customer data and video survey technology to provide a seamless, frictionless customer journey – from application through to claim”.

The idea is that customers will digitally catalogue and securely store details of their possessions through an app. The customer can then view an accurate, verified record of all their belongings and obtain a valuation of what they own. This information can be updated with receipts and warranties as new items are acquired, ensuring the total value of the contents data remains truly reflective of current market worth.

The company claims that, rather than needing to complete a lengthy and complicated application for insurance, the key data on their home and contents will be prefilled.

Becky Downing, CEO of Buzzvault, says: “We’re on a mission to fix the broken home-insurance market. Home insurance has been dysfunctional for too long, insurers have not known what they are insuring and this leads to a poor, painful experience when it comes to a claim.

E C A P G N I P E E H E K ITH T RS W UPTO R S I D thejournal.cii.co.uk / The Journal / April - May 2018

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DISRUPTION

“We will know exactly what we are insuring, eliminating the risk of underinsurance while promising customers a transparent, speedy claims service should they need to make a claim.”

Disruption is well and truly on its way – is it time for traditional insurers to re-evaluate their approach?

INSURTECH BEHAVIOUR According to the Digital Insurance Agenda, insurtech companies have four things in common: 1: They are always part of their customers’ life Fast changing customer behaviour and new market dynamics make it essential for insurance carriers to increase the contact frequency and provide more added value in these contacts.

2: They continuously build contextual ecosystems Adding value is about solving the real problem. People don’t want a mortgage; they want a nice house to live in. Insurance is usually part of a solution, but rarely the entire solution. Insurers need to become more part of the context, and of the ecosystem of companies and organisations that play a part in that context.

3: They act ‘simply human’ With all sorts of new technologies being applied to digitise processes insurers run the risk of neglecting the feelings side of customer engagement.

People crave organisations that are

human. The solution is to create ‘the best of both worlds’; to leverage technology to empower front liners.

4: They strive for operational excellence Digital transformation to improve operational excellence will continue to be top of the agenda in the years to come. And rightfully so. Yet, at the end of the day, digitalised processes and a lower cost base are table stakes.

Operational excellence is essential, but it also a qualifier, not a winner.

Engagement innovation needs to be built on top. This is where the previous three essential elements kick in. ●

33

Look at any conference programme for the year ahead and you will find the word ‘disruption’ appearing on almost every agenda. But what does disruption look like in the insurance sector?

We explore what’s truly different…

thejournal.cii.co.uk / The Journal / April - May 2018

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19/04/2018 17:29

GENDER DIRECTIVE

THE GENDER DIVIDE:

WIDER THAN EVER? Back in 2012, the industry was battling to cope with the Gender Directive and the need to level premiums for men and women. Now, new research suggests that far from benefiting men, the reverse could be true…

34

FAST FACTS For telematics take-up – male vs female drivers ● Women regard crash notification/collision detection as far more valuable than men ● Men are more comfortable with being monitored for the use of a mobile phone while driving than women ● There is little difference in the sexes with regard to being tracked for their driving style ● Both sexes agree that being rewarded for safer driving is the best aspect of telematics ● Men are more comfortable with the technology tracking them and the vehicle than women ● Men prefer to share their driving score with friends Source: LexisNexis Risk Solutions

thejournal.cii.co.uk / The Journal / April - May 2018

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19/04/2018 17:29

GENDER DIRECTIVE

KEY MOTIVATORS

form of motor insurance.

LexisNexis Risk Solutions found that men are more motivated to take up telematics insurance as a means to link their driving style to a fairer premium, with 44% ranking this first in importance. While this also ranks highest in importance for women (38%), more women than men see the safety benefits of telematics in terms of helping them become safer drivers, crash/collision detection and helping them educate their children to be better drivers (43%).

It seems the gender conversation is far from finished. ●

But this is where gender differences rise once again. Research from LexisNexis Risk Solutions among more than 3,000 motorists has found that, while the key motivators for purchasing telematics insurance are broadly the same for men and women, there are subtle variations in how males and females perceive the benefits, with women being more motivated by safety while men are more concerned with savings.

In the research, it was found that 26.5% more women than men consider the safety benefits of telematics as the best aspect of this

£170

8%

50%

Men are paying on average more than £170 extra for their car insurance than women

The gap has widened nearly 8% since the implementation of the EU Gender Directive

Nearly 50% of the world’s vehicles will be insured with usagebased policies by 2030

35

AVERAGE PREMIUM BY GENDER SINCE IMPLEMENTATION OF EU GENDER DIRECTIVE £1,000 £800 £600 £400 £200

Women

Jul-17

Apr-17

Jan-17

Oct-16

Jul-16

Apr-16

Jan-16

Oct-15

Jul-15

Apr-15

Jan-15

Oct-14

Jul-14

Apr-14

Jan-14

Oct-13

Jul-13

Apr-13

£0 Jan-13

I

The EU Gender Directive arrived back in 2012, to level the playing field for men and women. For insurers, this meant an end to rating by sex.

However, new evidence from comparethemarket.com shows men are still paying significantly more for their car insurance than women.

According to its research, between June and August 2017 the average car insurance policy for a man was nearly 27% higher than that for a woman. In January 2013, the difference was less than 20%.

John Miles, head of motor at comparethemarket.com, says: “This data shows how little difference the EU Gender Directive has had on insurance premiums, with providers still giving big discounts to women.

“This is likely due to a number of factors, such as statistically higher accident rates for men and more men than women driving business and commercial vehicles – which are higher risk. The directive removed the ability of providers to give default discounts to women; however, the statistics and risk models used by insurers mean that the result is largely the same.”

The Directive has, however, helped drive some changes through the motor market.

For example, the use of telematics has become much more widespread, particularly for younger drivers. It enables them to evidence their safe driving habits and so reduce the cost of premiums.

A report from Ptolemus Consulting Group suggests 50% of the world’s vehicles will be insured with usagebased policies by 2030 and the sector will grow to nearly 100 million policies worldwide in the next three years.

Help is much needed, according to the UK’s Association of British Insurers, which warns the average cost of a motor insurance claim has risen to the highest level on record, jumping 9% last year.

Men

LINKING DRIVING STYLE TO A FAIRER PREMIUM Percentage who consider this to be the best aspect of telematics

Women

38%

Men

45% 34%

36%

38%

40%

42%

44%

46%

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19/04/2018 17:30

D I S C I P L I N A RY M AT T E R S

DISCIPLINARY MATTERS BREACH OF EXAMINATION AND/OR ASSESSMENT REGULATIONS

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Ms Laura Howard – Be Wiser Insurance Services Ltd., Andover, Hampshire The assessment candidate admitted to having collaborated with other candidates on the P05 continuous assessment assignment and plagiarised the P05 continuous assessment assignment of another candidate. The CII case examiner invited the respondent to approve and sign a consensual order under rule 9.1 of the CII Disciplinary Procedure Rules 2013. The respondent failed to respond and the case examiner was satisfied to proceed to determine the matter under Disciplinary Procedure rule 7.1(b). The following sanctions were imposed on the respondent: a) be reprimanded (Reg 12.6a); b) take and complete the CII on line ethics course before attempting to book any further CII examinations or assessments, apply for any CII recognition of prior learning or submitting an application to join the CII (Reg 12.6d); c) have a record of this matter be added to the CII’s disciplinary records.

(Reg 12.6f); d) have the P05 examination result and continuous assessment result disallowed (Reg 12.6k); e) be excluded for a period of 18 months from the examinations or assessments held by the Institute with effect from 1 January 2017 (Reg 12.6l); f) be excluded for a period of 18 months from applying for CII recognition of prior learning with effect from 1 January 2017 (Reg 12.6p); and g) no examinations, assessments or qualifications obtained by the respondent during the period of exclusion will be eligible for CII recognition of prior learning with effect from the date of the order (Reg 12.6p).

Ms Holly Ruddick – Be Wiser Insurance Services Ltd., Andover, Hampshire The assessment candidate admitted to having given access to and collaborated with other candidates on the P05 continuous assessment assignment and plagiarised the P05 continuous assessment assignment of another candidate. The CII case examiner invited the respondent to approve and sign a consensual order under rule 9.1 of the CII Disciplinary Procedure Rules 2013.

The respondent failed to respond and the

case examiner was satisfied to proceed to determine the matter under disciplinary procedure rule 7.1(b). The following sanctions were imposed on the respondent: a) be reprimanded (Reg 12.6a); b) take and complete the CII on line ethics course before attempting to book any further CII examinations, enrol on any assessments or apply for any CII recognition of prior learning or CII membership (Reg 12.6d); c) have a record of this matter be added to the CII’s disciplinary records (Reg 12.6f); d) have the P05 continuous assessment result disallowed (Reg 12.6k); e) be excluded for a period of 18 months from the examinations or assessments held by the Institute with effect from 1 January 2017 (Reg 12.6l); f) be excluded for a period of 18 months from applying for CII recognition of prior learning with effect from 1 January 2017 (Reg 12.6p); and g) no examinations, assessments or qualifications obtained by the respondent during the period of exclusion will be eligible for CII recognition of prior learning with effect from the date of the Order (Reg 12.6p).

Ms Lonna Baah – Be Wiser Insurance Services Ltd., Andover, Hampshire The assessment candidate was found to have given access to and collaborated with other candidates on the P05 continuous assessment assignment and plagiarised the P05 continuous assessment assignment of another candidate. The CII case examiner invited the respondent to approve and sign a consensual order under rule 9.1 of the CII Disciplinary Procedure Rules 2013.

The respondent failed to respond and the case examiner was satisfied to proceed to determine the matter under Disciplinary Procedure Rule 7.1(b). The following sanctions were imposed on the respondent: a) be reprimanded (Reg 12.6a); b) Take and complete the CII on line ethics course before attempting to book any further CII examinations or assessments, apply for any CII recognition of prior learning or submitting an application to join the CII (Reg 12.6d); c) have a record of this matter be added to the CII’s disciplinary records.

(Reg 12.6f); d) have the P05 examination result and continuous assessment result

disallowed (Reg 12.6k); e) be excluded for a period of 24 months from the examinations or assessments held by the Institute with effect from 1 January 2017 (Reg 12.6l); f) be excluded for a period of 24 months from applying for CII recognition of prior learning with effect from 1 January 2017 (Reg 12.6p); and g) no examinations, assessments or qualifications obtained by the respondent during the period of exclusion will be eligible for CII recognition of prior learning with effect from the date of the order (Reg 12.6p).

Mr Sheriff Abudu – Accra, Ghana The assessment candidate was found to have plagiarised content from websites for his coursework assignments for Units 530 and 990 in breach of the Coursework Assessment Guidelines. The CII case examiner invited the respondent to approve and sign a Consensual Order under Rule 9.1 of the CII Disciplinary Procedure Rules 2013. Since the respondent did not to do so within a reasonable period of time, the case examiner was satisfied to proceed to determine the matter under Disciplinary Procedure Rule 7.1(b). The following sanctions were imposed on the Respondent: a) be reprimanded (Reg 12.6a); b) take and complete the CII on line ethics course before attempting to apply to book any further CII examinations, enrol on any assessments, apply for any CII recognition of prior learning or apply for membership of the CII (Reg 12.6d); c) have a record of this matter be added to the CII’s disciplinary records. (Reg 12.6f); d) have the 530 and 990 assignment results disallowed (Reg 12.6k); e) be excluded for a period of 18 months from the examinations or assessments held by the Institute with effect from 1 July 2017 (Reg 12.6l); f) be excluded for a period of 18 months from applying for CII recognition of prior learning with effect from 1 July 2017 (Reg 12.6p); and g) no examinations, assessments or qualifications obtained by the respondent during the period of the exclusion will be eligible for CII recognition of prior learning with effect from the date of the order (Reg 12.6p).

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D I S C I P L I N A RY M AT T E R S

The CII w to make c ishes unless the lear that, ca indicates se reported allegation otherwise, against m s and findings implicate embers do not those m employers embers’ in any way Huda Fahad Alharbi, Marsh & NcLennan, Riyadh, Saudi Arabia The coursework assessment candidate was found to have plagiarised a 960 coursework assignment written by another candidate, in breach of the Coursework Assessment Guidelines. The CII case examiner, invited the respondent to approve and sign a consensual order under 9.1 of the CII Disciplinary Procedure Rules 2015, to which the respondent agreed, and which was signed on 20 February 2018. The sanctions issued were that the respondent: a) be reprimanded (DR 12.6a); b) have the 960 coursework assessment assignments 1, 2 and 3 results disallowed (Reg 12.6); c) be excluded from CII examinations and assessments for 21 months (with effect from 8 September 2017) (Reg 12.6l) and would have to take the CII on-line ethics course before taking any CII exams and assessments or applying for recognition of prior learning in future or applying to renew membership of the CII (Reg 12.6d); and d) would not be eligible for CII recognition of prior learning for examinations, assessments or qualifications obtained by the Respondent during the 21 months’ period of exclusion (Reg 12.6p).

Ali Akbar, Nanakwara, Karachi, Pakistan The coursework assessment candidate was found to have plagiarised a M05 coursework assessment assignment written by another candidate, in breach of the Mixed Assessment Candidate Guidelines. The CII case examiner, invited the respondent to approve and sign a consensual order under 9.1 of the CII Disciplinary Procedure Rules 2015, to which the respondent agreed, and which was signed on 20 February 2018. The sanctions issued were that the respondent: a) be reprimanded (DR 12.6a); b) had his assignment result disallowed (Reg 12.6); c) be excluded from CII examinations and assessments for 27 months (with effect from 7 November 2016) (Reg 12.6l) and would have to take the CII on-line ethics course before taking any CII exams and assessments or applying for recognition of prior learning in future or applying to renew membership of the CII (Reg 12.6d); d) would not be eligible

for CII recognition of prior learning for examinations, assessments or qualifications obtained by the respondent during the 27 month period of exclusion (Reg 12.6p).

BREACH OF THE CII CODE OF ETHICS Michael Philip Pearse, of Fulford, York, North Yorkshire The respondent was convicted of fraud by engaging in acts of false accounting, which is a breach of the CII Code of Ethics. The CII case examiner invited the respondent to approve and sign a consensual order under rule 9.1 of the CII Disciplinary Procedure Rules 2015, to which the respondent agreed, and which came into effect on 13 March 2018. The sanctions imposed were that the respondent was (a) reprimanded, (b) required to take the CII on-line ethics course before taking any CII exams or assessments or apply for any CII recognition of prior learning or re-join as a member; and (c) ineligible from membership of the CII/PFS for a period of 2 ½ years.

John Maurice Pye of Waterstone Investment Associates, Advanced Tower, 1st Floor, Ricardo Arias Street, Panama The respondent was found to have breached the CII Code of Ethics through his repeated misuse of CII intellectual property and failure to co-operate with the CII during its investigation. In view of the seriousness of Mr Pye’s conduct, the CII case examiner invited the respondent to approve and sign a consensual order under rule 9.1 of the CII Disciplinary Procedure Rules 2015, to which the respondent agreed, and which came into effect on 9 March 2018.

The sanctions imposed were that the respondent was (a) reprimanded, (b) required to take the CII on-line ethics course before taking any CII exams or assessments or apply for any CII recognition of prior learning; and (c) suspended from membership of the CII/PFS for a period of 2 years.

“To date, the CII has dealt with 5 instances of non-members using CII designations for 2018. As this is an infringement of CII’s trademarks, where people persist in misusing CII designations, legal action will be taken against them”.

TAKE NOTE Where the disciplinary panel or case examiner has decided to publish details of a disciplinary case ascribed (ie where an individual has been named), every care has been taken to identify members correctly.

Please contact the CII if there is any doubt about the identity of a member who may have been the subject of disciplinary proceedings and in relation to whom a report has been published.

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The Journal at your ďŹ ngertips For a variety of insurance related content including c-suite interviews, topical debates and in-depth articles.

thejournal.cii.co.uk CII.May18.038.indd 38

18/04/2018 12:05

LEGAL REVIEW

THE IMPORTANCE OF THOSE LAW EXAMS… Knowing the law is essential if you work in insurance, explains Graham Bartlett

S

tudents grappling with the demands of their insurance law exams might take comfort from some recent comments

by Lord Justice Leggatt in the Court of Appeal.

In Allianz Insurance plc v Tonicstar Limited [2018] EWCA Civ 434, the Court of Appeal overturned the decision of Mr Justice Teare to remove a QC as an arbitrator on the grounds that he did not have the requisite experience of insurance or reinsurance.

Under clause 15.5 of the Joint Excess Loss Committee Clauses, arbitrators had to be persons from the “trade or business of insurance”, and Mr Justice Teare held that a QC with more than 10 years’ experience of acting in insurance and reinsurance disputes did not qualify for appointment.

In the High Court Mr Justice Teare felt bound by an earlier unreported decision of Mr Justice Morison in Company X v Company Y (2000), although he indicated that, uninhibited by that authority, he might have decided the case differently. Lord Justice Leggatt in the Court of Appeal was not so constrained and found that Mr Justice Morison’s interpretation of the clause was indefensible and did not impose any restriction on how the 10 years’ experience was to be acquired.

Interestingly, counsel for the Respondent did not attempt to support Mr Justice Morison’s interpretation but instead argued

that although the QC undoubtedly had considerably more than 10 years’ experience of insurance and reinsurance law, there was no evidence that he had any experience of insurance or reinsurance ‘itself’. He took as an example sports arbitration and

THOSE WHO WORK IN INSURANCE, WHETHER AS BROKERS, UNDERWRITERS OR IN CLAIMS, NEED TO HAVE SOME LEGAL KNOWLEDGE AND UNDERSTANDING

suggested that having experience of sports law would not be enough to demonstrate experience of sports.

Similarly, experience of engineering or telecommunications law was not the same as experience of engineering or telecommunications.

Lord Justice Leggatt rejected this argument and made some pertinent observations about insurance. Insurance and reinsurance differ from sports, engineering and telecommunications in that insurance contracts create legal rights and obligations, whereas the law regulating sports, engineering and telecommunications is clearly distinct from the activities themselves.

Those who work in insurance, whether as brokers, underwriters or in claims, need to have some legal knowledge and understanding. Brokers and underwriters need to understand the duty of an insured to disclose facts that are material to the risk to the insurer and the scope of that duty.

Similarly, claims managers cannot in many cases properly assess whether a claim is payable without having some knowledge of insurance law.

The practical and legal aspects of insurance and reinsurance are intertwined and there is no such thing as insurance or reinsurance ‘itself’ that is separate and distinct from the law of insurance and reinsurance. ●

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Graham Bartlett is a barrister at Trinity Chambers in Newcastle upon Tyne – www.trinitychambers.co.uk

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19/04/2018 17:31

I N T E R N AT I O N A L P R O F I L E – C H I N A

T

he fluid nomenclature of China’s Belt and Road Initiative (BRI) reflects the vagueness that still surrounds the incredibly ambitious international infrastructure programme four years after it was first presented to the world.

Previously known as the ‘One Belt One Road’ initiative, the BRI is a plan to enhance the infrastructure used to facilitate trade between China and its

surrounding regions. The ‘Silk Road Economic Belt’ refers to a physical road that travels from China, through central Asia towards Europe. The ‘21st Century Maritime Silk Road’ refers to the shipping lanes from China to the major ports of southeast Asia, east Africa and western Europe.

The project is expected to reach into markets that cover 65% of the world’s population and a third of global GDP. At the end of 2016, the outstanding credit and equity capital committed to the BRI, according to the Financial Times, was $292bn, with the majority of funding coming from the big four state-owned commercial banks and Chinese development banks.

The strong role of Chinese companies in the financing and construction of the BRI projects, touches on some of the motivations behind the BRI and where its impact is expected to be felt the most. A

paper authored by Dr Yu Jie, head of China foresight at LSE IDEAS – a foreign policy thinktank – puts forward an argument that emphasises the importance of domestic considerations in the establishment of the BRI. From this perspective, the BRI should be seen as a vehicle through which the Chinese government can alleviate regional inequalities by upgrading the infrastructure of the more neglected western Chinese provinces. Furthermore, the improvement to the economic prospects of China’s central and south Asian neighbours arising from the BRI is expected to expand the market for the Chinese industrial sector’s excess capacity and the country’s growing high-tech manufacturing sector.

The tangible benefits of the programme have already benefited non-life insurers in China. Ping An’s

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IMAGE: ISTOCK

In association with

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I N T E R N AT I O N A L P R O F I L E – C H I N A

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CHINA IN YOUR HAND? As the Chinese economy transitions to a consumer spending-driven model, Jay Patel looks at the opportunities arising for insurers locally and globally thejournal.cii.co.uk / The Journal / April - May 2018

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I N T E R N AT I O N A L P R O F I L E – C H I N A

non-life segment reported in 2017 that the BRI made a positive contribution to growth on the supply side of the economy.

Chinese insurers have been encouraged by the Chinese Insurance Regulatory Commission (CIRC) to increase their coverage of risks associated with the BRI. It is also expected that Chinese insurers’ global footprint in the commercial insurance space will expand as the sector insures a greater quantity of foreign risks through the BRI. A report in China Daily in April 2017 stated that the CIRC had also encouraged insurers to “speed up expansion overseas to offer underwriting, claim settlements… and collaborate with local counterparts to form industrial entities in reinsurance and investment”.

IRRESPONSIBLE INVESTMENTS

42

The ability of large insurance operations to generate cash inflows upfront and cash outflows at later dates, was taken advantage of by aggressive executives/investors within the Chinese boardrooms and used to deploy Chinese funds into foreign assets (particularly in the US and Europe), which were thought to offer high returns and protection against an economic slowdown in China.

Concerns around the capital account, which reached a deficit of $417bn in 2016, signalled a turning point in the attitude of the Chinese government and regulators towards the foreign investment activities of Chinese companies. Insurers and their parent companies were among those most targeted by the government, when it aimed to stem these capital outflows and ensure financial institutions investments’ were being managed prudently.

There was also concern about the stability of the insurance system itself, as some insurers were selling highyielding ‘universal’ insurance, which

65%

OF THE WORLD’S POPULATION AND A THIRD OF GLOBAL GDP WILL BE AFFECTED BY CHINA’S BELT AND ROAD INITIATIVE

$292bn THE OUTSTANDING CREDIT AND EQUITY CAPITAL COMMITTED TO THE BRI REPORTED JUST OVER A YEAR AGO

resembled risky savings products rather than more prudent protection products, to grow the size of funds they could invest.

Anbang Insurance Group has been the most notable Chinese insurer in terms of its foreign acquisitions. Most notably, it purchased the Waldorf Astoria hotel in Manhattan for $2bn and tried (and failed), to purchase Starwood Hotels group for $14bn.

The demise of this aggressive business model has been highlighted by the fall from grace of Anbang. In February 2018, the government seized temporary control of Anbang and a month later the former chairman of the company was charged with counts of fraud and embezzlement.

Although there are political factors associated with the treatment Anbang has faced, other conglomerates with insurance arms, such as HNA and Dalian Wanda, have also been subject to censure and sanctions from the CIRC. In October 2017, the CIRC stepped

CHINA’S ECONOMIC GROWTH HAS BEEN FUELLED BY HIGH LEVELS OF SAVINGS AND INVESTMENT DURING THE PAST THREE DECADES

in to prohibit Bohai Life from providing its parent company (HNA) with capital, as it grew concerned over the practice of insurers being used to sell high-return investment products, in order to invest in longterm illiquid assets such as real estate.

RAPID GROWTH China’s economic growth has been fuelled by high levels of savings and investment during the past three decades. This has meant that manufacturing and net exports have fuelled growth in China. However, as the economy matures, this model of growth becomes increasingly unsustainable and there will have to be an eventual rebalancing towards an economy driven more by consumer spending than investment. This transition will have implications for the relative size of the retail and commercial segments of the non-life insurance sector.

When this rebalancing occurs, growth in household incomes is likely to exceed growth in manufacturing and thus improve the relative growth prospects of lines associated with healthy disposable income growth, such as household and motor insurance. The increase in demand for goods, especially through the online channel, is also expected to increase demand for commercial vehicle usage.

These positive macro trends for retail lines are being supplemented by the liberalisation of tariffs in these markets too. Most recently, insurers were given more control over rate setting in the commercial motor sector (following on from reforms to personal motor insurance tariffs in 2015), allowing them to consider more idiosyncratic factors such as their own customer risk profile and operating expenses. In its 2017 annual report, the People’s Insurance Company of China cited the premium rate liberalisation in the commercial motor insurance as a reason for the increase in the percentage of customers with no record of reported claims and a fall in loss ratios. ● Read our A-Z on the Silk Road Economy Belt on page 49

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18/04/2018 12:05

STUDY ROOM – WORKPLACE CLAIMS

STUDY ROOM

WORKPLACE WOES 44

A

IMAGE: ISTOCK

Liz Booth examines recent court rulings on workplace claims and their impact on the sector

series of recent court rulings could well change the landscape for workplace claims, with varying consequences for the insurance market.

Most recently, and most publicly, the UK High Court found a classical musician is entitled to damages after suffering ‘acoustic shock’ while employed in the orchestra at the Royal Opera House.

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STUDY ROOM – WORKPLACE CLAIMS

As Toby Scott, a partner at Clyde & Co, reports: “The judgment represents a landmark decision for this newly recognised species of noise-induced hearing loss in the UK, which could have wide-ranging ramifications for insurers and risk managers at entertainment venues and beyond.

He suggests Goldscheider is now likely to become the precedent that will allow claimant firms to begin banging the drum and actively advancing claims of this nature. Indeed, he said: “Many such firms have already begun marketing these claims in anticipation of the judgment.”

While the case suggested that the concept of acoustic shock is “relatively new”, there have been reports internationally of settlement of employee claims at call centres going as far back as 2001, including in the US and Australia. These individuals, who work with headphones and headsets, are considered particularly at risk from acoustic shock; this was explicitly referred to within the judgment.

There is a real risk of a floodgates argument occurring on the back of the decision, potentially in the most unlikely of places, warns Mr Scott.

“European studies recently found

there can be similar exposures to sudden loud noise in a classroom context, raising occupational and safeguarding issues. Is it unreasonable to suggest that a claim could be brought as a result of someone shouting within an office setting?” he asks.

Employers have previously concentrated on protecting employees from long-term exposure to noise, given the known risk of noise-induced hearing loss. However, they now also have a duty to assess and mitigate risks arising from single exposures that could result in foreseeable injury to employees.

ACTIONABLE PERSONAL INJURY Meanwhile, David Wynn, also a partner at Clyde, warns: “The UK Supreme Court has broadened the scope of actionable personal injury, raising important implications going forward for employers and insurers.”

This follows a case involving platinum salts, and the decision will result in →

45

HEALTH AND SAFETY AT WORK 2017 ● 1.3 million working people suffering from a

work-related illness ● 2,542 mesothelioma deaths due to past asbestos

exposures (2015) ● 137 workers killed at work ● 609,000 injuries occurred at work, according to

the Labour Force Survey ● 70,116 injuries to employees reported under

RIDDOR ● 31.2 million working days lost due to work-related

illness and workplace injury ● £14.9 billion estimated cost of injuries and ill

health from current working conditions (2015/16) Source: Health and Safety Executive (HSE)

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STUDY ROOM – WORKPLACE CLAIMS

46

a renewed emphasis on ensuring that adequate workplace protections are in place for employees who may encounter potential allergens, says Mr Wynn.

“If an employee develops an asymptomatic condition as a result of employer negligence, it is no longer sufficient to simply move the employee to other duties to prevent the asymptomatic condition becoming symptomatic.

“This is a landmark decision in respect of what constitutes an actionable injury”, adds Mr Wynn.

He warns that the judgment may also prompt additional claims for minimal and imperceptible injuries, with the argument likely to be advanced that the physiological change has left a claimant worse off in some measure.

This could be particularly relevant to noise-induced hearing loss claims, where any de minimis yet measurable hearing loss or damage to the cilia in the inner ear could now be argued as precipitating deafness in a claimant, allowing this loss to be claimed for.

It is now clear that should an employer’s negligence result in a physiological change to an employee, then the employee may be entitled to claim compensation for any financial losses resulting, even in the event that the physiological change is asymptomatic.

ACCORDING TO THE HSE Stress, depression or anxiety and musculoskeletal disorders accounted for the majority of days lost due to work-related ill health – 12.5 million and 8.9 million respectively.

On average, each person suffering took about 17 days off work. This varies as follows: ● 9.1 days for injuries ● 19.8 days for ill health cases ● 23.8 days for stress, depression or anxiety ● 17.6 days for musculoskeletal disorders

TYPICAL COVER: Employers’ liability insurance covers: ● Full-time and part-time employees ● Self-employed contractors ● Temporary staff, apprentices and volunteers ● People taking part in work experience or training schemes Optional extras ● Public liability insurance ● Professional indemnity insurance ● Own plant, tools and equipment for tradesmen ● Business equipment for professionals ● Personal accident – covers your income if you or a key partner is injured The average workplace injury payout on behalf of a small business by AXA in 2013 was £14,300.

Employers also risk being fined up to £2,500 for every day that they do not have insurance.

Source: AXA Insurance

NEW LANDSCAPE These cases are by no means unique.

David Williams at DAC Beachcroft points to another two examples where employers and their insurers might be looking at a new landscape.

At the end of last year, the Court of Appeal ruled in Stewart v Lewisham and Greenwich NHS Trust, in a judgement he believes should still be of assistance when considering manual handling cases and also other employers’ liability cases when risk assessments are an issue in postEnterprise and Regulatory Reform Act

44-48_StudyRoom_QandA__Cll The Journal 46

claims presented in negligence.

“If lifting an item or some other activity does not present a real risk of injury, the absence of a risk assessment should not enable a claim to succeed,” he concludes.

Another area where claims have sprung up slightly unexpectedly and caused concern around claim fraud has been among beauticians, spas and leisure centres.

Mr Williams says: “In recent months, we have noted a significant

increase in claims presented in the fitness, leisure and beauty industry, with many claims being presented against pop-up beauty therapy parlours, which presents challenges in obtaining evidence from businesses that have ceased trading.

The scrutiny of treatment records, obtaining of evidence from the treating beauticians and searches of social media often provide evidence through which the claims can be repudiated, however, and the passage of time and closure of the beauty parlours does not necessarily prevent the defence of the claim.

FABRICATED OR EXAGGERATED CLAIMS

Q

“Alongside the spike in public liability claims against beauticians, spas and leisure centres, we have noted a recent increase in the proportion of claims presented by carers,” Mr Williams adds, “which are either fabricated or exaggerated.”

He continues: “Many claims by carers relate to accidents or alleged attacks in the home of service users or rooms of care home residents, accidents which are not witnessed or are witnessed by individuals whose age or medical condition prevents their giving evidence in relation to the claim.

“Claims for manual handling and for slips and trips are frequent, often giving rise to allegations of acceleration injuries, which are based to a significant extent on the history given by the claimant. The nature of these claims leaves them open to exaggeration and the nature of the work enables the presentation of fabricated incidents.”

These few examples provide a snapshot of the range and breadth of claims in the employer liability arena and the increasing challenges for those who provide such insurance. ●

20/04/2018 08:03

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 9

If the insurance market is described as being ‘hard’, it means that?

What description best describes a broker’s duty of care?

A Acting in the best interests of your client b Always putting your firm’s interests above those of the clients’ c Letting the client decide whose interests are best being served d Treating your firm and your clients’ interests equally

Which of these statements best describes a success fee?

A Claims costs are high b Premiums are high c Premiums are low d There are significant barriers to entry

QUESTION 2 What does the money laundering ‘placement’ stage involve?

A Concealing the illegal origins of money by moving it through a series of transactions b Converting dirty cash into another form of asset c Getting laundered money back into the legitimate economy d Providing the launderers with legal income

QUESTION 6 What are the possible consequences of not complying with a warranty?

A All claims may be rejected, even if unconnected with the warranty b Claims can be refused if they are not complied with c Claims will be automatically refused when they are not complied with d The policy may be voided without absolute compliance with specific requirements

QUESTION 3 What name is given to the person who appoints an agent to perform an activity for them?

A The appointer b The commissioner c The manager d The principal

QUESTION 7

QUESTION 4 Which of these activities would be an example of treating customers fairly?

A Achieving high customer satisfaction ratings b Being polite and courteous to all customers C Marketing products to customers with suitable risk profiles D Recommending the same product to all customers

The majority of classic car owners opt for which of these levels of cover?

A Comprehensive b Laid up c Third party d Third party fire and theft

A An additional amount a solicitor can add to their fees in successful claims under conditional fee agreements b An additional premium the ‘after the event’ legal expenses insurer can charge for successful claims c The commission paid to the solicitor for arranging ‘after the event’ legal expenses cover in successful claims d The proportion of damages a successful policyholder must pay to the solicitor

QUESTION 10 What is the principal reason for private car insurance being compulsory in the UK? A To provide an alternative to litigation for victims of road traffic accidents b To ensure the UK motor insurance industry complies with ICOBS Rules c To ensure that funds are available to compensate innocent victims of road traffic accidents d To provide funds for the UK motor insurance industry

47

QUESTION 8 Which of these actions is most likely to increase a person’s risk awareness?

A Tax incentives to buy insurance b Increasing insurance premiums c Reducing insurance premiums d Explaining the consequences of not being insured

YOUR SCORE » 1–3 POOR 4–6 GOOD

7–8 VERY GOOD 9-10 EXCELLENT

ANSWERS 1B.The market is described as ‘hard’ when premiums are high and ‘soft’ when premiums are low.

2B.Placement involves converting dirty (eg. stolen) cash into some other form of asset. 3D. The person who appoints an agent to act on their behalf is called the principal.

4C. Matching product risk to appropriate target markets is an important aspect of treating customers fairly. 5A. Your agency duty of care as a broker means you must act in the best interests of your client. 6A. An underwriter may choose to refuse a claim if

warranties are not complied with, and even if the warranty is unconnected with the circumstances of the loss. 7A. Most classic car owners opt for comprehensive insurance due to the value of their vehicles. 8D. The demand for insurance is in some part linked to

people’s awareness of the risks to which they are exposed. To increase risk awareness, insurance companies tell people about the consequences of not being insured.

9A. Conditional fee agreements (CFA) When a claimant is successful in their claim, the solicitors will add

a ‘success fee’ to their charges. This reflects the risk they take when accepting cases. 10C. The aim of compulsory motor insurance is to make sure every victim of a negligent driver has access to compensation.

Insurance is a ‘deep pocket’ serving this purpose.

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20/04/2018 08:03

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CII.May18.048.indd 48

18/04/2018 12:05

STUDY ROOM

A-Z OF…

THE SILK ROAD ECONOMIC BELT Bertrand Hartemann takes an alphabetised look at China’s monumental new infrastructure and trade project

C

hina has recently completed both the world’s most extensive system of expressways and the planet’s longest high-speed rail network. But with its gross domestic product (GDP) growth slowing down, China must find new buyers for all the steel, cement and construction machinery its economy products. Beijing is therefore looking beyond its borders for opportunities to keep building and exporting. With infrastructure and energy projects earmarked at a cost of $1.3trn, the One Belt, One Road (OBOR) or Belt and Road initiative as it is now known, is unprecedented in size and scope.

China is hard-selling the plan as a way to boost its westward connections. Funded by its staterun banks, the initiative is covering 65 countries across Asia, Africa KNOWING and Europe. It has the potential YOUR A-Z to massively overshadow the US’s A Asia post-war Marshall reconstruction b building plan, involving about 70% of the c China world’s population, 30% of its D domestic GDP and 75% of the global E exporting energy resources. f financial Yet in practice, the concept of g growth ‘going out’ is still very new for a h high-speed lot of Chinese firms, even for large i insurance state-owned enterprises, with j journey k key strong government backing. They l large are exposed along the route to a m multinational large array of cultures, political n non-payment and regulatory systems. Some o operation of the participating countries p political lack financial strength and q quoted political stability. r reinsurance Infrastructure projects can s Swiss Re potentially face a vast spectrum t trained of risks during their operative u unprecedented time – including political v violence violence, monetary restrictions, w war expropriation and operational x eXpropriation risks. Non-payment risk is also y yet significant, since some countries z siZe identified as potential borrowers

already have elevated debt levels.

Insurance schemes play a key role in properly assessing the risk and securing the local assets, commercial interests and also local, trained personnel.

Insurance premium potential from the construction projects already announced could reach $7bn. And Swiss Re analysis has quoted that up to $5.5bn of those could go to Chinese insurers.

Commercial and political risks are covered by SINOSURE (the Chinese state-owned export credit insurance provider).

On the construction and operation side, there are requirements to engage with local insurance market in the host country. But through reinsurance mechanisms, the majority of insurance premiums go back to China.

The belt and road is not going to solve the huge shortfall of infrastructure connectivity around the world. But neither is it a risk pipedream. It is a learning journey that many Chinese companies are going to benefit from. The assistance of multinational insurers with solid experience in megainfrastructure projects will certainly play a key role in bridging China with the developing countries.

For more information, visit: allianz-partners.com/corporate ●

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Bertrand Hartemann is the chief marketing officer at Allianz Partners Greater China

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CII BLOG

ANNA BARNES

STOP ‘LIKING’ AND START LEARNING In this blog, Anna Barnes offers some tips on how to avoid social media and other potential distractions while studying

H 50

i everyone, it’s me again! Time seems to have flown by since my last blog – I hope you all enjoyed it. As mentioned in my last piece, I said I would write about what you need to avoid and stop doing while studying, so I hope the following tips help you.

So, say you are ready to put pen to paper but you need to reply to someone on your phone or someone has tagged you in a post on social media so you need to check it. Then you decide to go on all social media accounts like Instagram, Facebook, Twitter or even do a bit of online shopping. This just takes your focus away from studying.

You need to stop scrolling away and start revising! The best thing to do is to put your phone away in a drawer or even in a place that is walking distance away from you, so you are not tempted to grab it. You may need to use your phone to check the time so use it as an alarm and don’t make any excuses! You could even take the next step by deactivating all social media accounts while you are studying.

YOU NEED TO STOP SCROLLING AWAY AND START REVISING!

My next tip would be to stop rewriting the study book out line by line. Everyone has a different learning style but personally, I do feel this is a waste of time.

I used to do this for a number of years but realised it just doesn’t work for me, as I didn’t seem to be learning anything even though I thought I was. Now, I like to read a paragraph or section, cover it up and then write it down in my own words.

Not only will this help you understand what the author is saying, it will also help with paraphrasing which is an essential skill needed when studying for your DIP or ACII qualification.

There is a big jump from the CII exams to the DIP exams, so I would suggest trying this technique out if you haven’t done so already.

If you need to memorise specific points for the exam, I would suggest writing these points down on sticky notes which you should look at every now and again.

My last tip would be to avoid taking long breaks.

It’s up to you how much time you take for your break but I would suggest taking no longer than a 30-minute break for every hour of revision you do. It is also good to vary the break activities you choose to do and keep in mind that you need to return refreshed and focused. ● Anna Barnes is compliance & technical services assistant at NMU

◊ SOCIAL MEDIA If social media is a distraction, deactivate it for a while

◊ WASTING TIME Stop wasting time rewriting the entire book

◊ BREAKS Avoid taking long breaks

ILLUSTRATION: LUKE WALLER

THREE THINGS TO TAKE AWAY

thejournal.cii.co.uk / The Journal / April - May 2018

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20/04/2018 08:04

&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 -ARINE #LAIMS !DJUSTER

s )NTERNATIONAL "INDING !UTHORITIES "USINESS 0RODUCER

To ÂŁ50,000 + BeneďŹ ts – City of London You will be part of the marine claims team of this long established Lloyd’s Syndicate, handling a broad range of marine claims. Current experience handling Marine claims and using ECF is required; experience handling Yacht claims is advantageous.

Contact: Tim.Southworth@ipsgroup.co.uk - London Ref:CII135378TS

s &INANCIAL ,INES #LAIMS 3PECIALIST To ÂŁ75,000 + Bonus & BeneďŹ ts – City of London Seeking an individual to take on responsibility for Financial and Professional Lines claims for this well established Lloyd’s Syndicate. The ProFin account is International and is expected to grow. Current experience handling Professional indemnity and D&O claims for a London based Insurer or Lloyd’s Syndicate is required. Legal qualiďŹ cations are advantageous.

Contact: Tim.Southworth@ipsgroup.co.uk - London Ref:CII135267TS

s 3ENIOR #OMPLIANCE !NALYST To ÂŁ85,000 + BeneďŹ ts – City of London You will be a key part of the Compliance team in London, working closely with the Compliance ofďŹ cer on Compliance within the UK and Global operations. You can expect signiďŹ cant involvement International Sanctions and Data Protection, plus planning for Brexit.

Current experience working in a Compliance role for a UK based Insurer is required.

Contact: Tim.Southworth@ipsgroup.co.uk - London Ref:CII134954TS

s 0) 5NDERWRITER -ONTH #ONTRACT ÂŁ55,000 – London A Global Insurer requires an experienced Professional Indemnity Underwriter to be responsible for reviewing applications and ďŹ nancial requirements for risks requiring technical underwriting in accordance with company guidelines. You will be required to develop new and existing Broker relationships, assist in the marketing of products and prepare reports for senior management to review.

Contact: Carl.CrossďŹ eld@ipsgroup.co.uk - London Ref:CII135443CC

s )NSURANCE #OORDINATOR -ONTH #ONTRACT £30,000 – London A Global Property organisation has an immediate requirement for an insurance coordinator to join them on an interim basis to support the Insurance team with an ongoing project as well as day to day duties. The project element of the role consists of assisting the team in the transition to a new system, Open GI. So previous experience of the system is a must.

Contact: Carl.CrossďŹ eld@ipsgroup.co.uk - London Ref:CII135508CC

s $ELEGATED 5NDERWRITING !NALYST To ÂŁ45,000 + BeneďŹ ts – City of London As part of a small team this role is to take ownership for conduct coverholder regulatory reviews and the due diligence process for new and existing coverholders. This is across all classes and will involve liaising with underwriting teams, Lloyd’s and coverholders to deliver the end to end process. Working alongside a bordereaux management specialist and coverholder audit co-ordinator and reporting to the Head of DUA. Contact: Alison.Taylor@ipsgroup.co.uk - London Ref:CII135336AT

s #OMPLIANCE !NALYST To ÂŁ47,500 + BeneďŹ ts – City of London Opportunity to work for a small but well established Lloyd’s syndicate alongside the Head of Compliance in a broad and challenging role. A great opportunity to make the role your own and lead key projects within the business across complaints, Lloyd’s minimum standards, sanction checks, conduct risk, ďŹ nancial crime, GDPR, regulatory changes and market wide initiatives. A super company to be a part of with the support and scope to develop a compliance career.

Contact: Alison.Taylor@ipsgroup.co.uk - London Ref:CII135414AT

s "ORDEREAUX $ATA !NALYST To ÂŁ28,000 + BeneďŹ ts – City of London Working for a motivated and inclusive team leader who is developing the underwriting operations function of this dynamic syndicate. The basic Bordereaux entry and downloading is completed by an outsource provider, so this role is more the analysis, evaluation and development of that data for internal underwriting and Lloyd’s Coveholder reporting purposes. Liaising with a broad range of underwriters and the Delegated Underwriting team.

Contact: Alison.Taylor@ipsgroup.co.uk - London Ref:CII135579AT

s -OTOR #LAIMS !DJUSTER ,LOYD S 3YNDICATE up to ÂŁ45,000 + BeneďŹ ts – City of London Motor Claims Adjuster required for a Lloyd’s syndicate to handle portfolio of US trucking business. Managing claims from cradle to grave working closely with underwriters gaining exposure across the book. Looking for Motor claims experience, conďŹ dent in using ECF with ideally London Market experience.

Contact: Clare.Aldrich@ipsgroup.co.uk - London Ref:CII134374CA

s )NSURANCE 3PECIALIST To ÂŁ45,000 + Bonus & BeneďŹ ts – City of London You will be joining the “in houseâ€? team of one of the most high proďŹ le ďŹ nancial services companies. Focusing on the day to day servicing of the existing insurance programmes as well as the related claims and risk control activities. Degree/ACII progression preferred, along with experience of commercial insurances across all classes and jurisdictions.

Contact: James.Dick@ipsgroup.co.uk - London Ref:CII135553JD ,ONDON London@ipsgroup.co.uk Tel: 020 7481 8111 3OUTHAMPTON soton@ipsgroup.co.uk Tel: 023 8048 8799

CII.May18.051.indd 2

"IRMINGHAM birm@ipsgroup.co.uk Tel: 0121 616 6096 "RISTOL bristol@ipsgroup.co.uk Tel: 0117 370 2472

£85,000 - £145,000 + Bonus – City of London This independently owned Lloyd’s Broker has been quietly transforming into a high performing and rapidly expanding business. You will be joining to initiate new business opportunities which complement their existing network of clients and markets. A particular interest in binding authority business from intermediaries based in Northern, Southern and Central European countries has been noted, but we are also interested in Binding Authority broking and business development specialists who have a proven record of success in Western Europe.

Contact: Christopher.Dickman@ipsgroup.co.uk - London Ref:CII132268CD

s ,ONDON -ARKET )NSURER REQUIRE A 1UALIl ED &INANCIAL !CCOUNTANT To ÂŁ60,000 + BeneďŹ ts – City of London Role will focus on group ďŹ nancial reporting, Lloyd’s, HMRC etc. as well as ďŹ nancial reporting for speciďŹ c entities within the group. IFRS, UK GAAP and Solvency exposure.

Contact: Mark.Brady@ipsgroup.co.uk - London Ref:CII135375MB

s )N (OUSE !SSISTANT )NSURANCE -ANAGER ÂŁ50,000 - ÂŁ60,000 + BeneďŹ ts Package – West Midlands One of the UK’s largest companies has a vacancy in their specialist “in houseâ€? team. This is a great opportunity for someone from a Risk Management or broker background to join a prominent “insurance buyerâ€? as well as a group that sets out a comprehensive risk management strategy. Working alongside the Insurance Manager your duties will be to develop the ongoing insurance programme incorporating a strategic review of risk appetite.

Contact: Richard.Coleman@ipsgroup.co.uk - Birmingham Ref:CII135580RJC

s #ORPORATE #LAIMS -ANAGER ÂŁ36,000 - ÂŁ40,000 + BeneďŹ ts Package – Birmingham A leading claims business seeks a Corporate Claims Manager in a role that will combine operational management, Client relationship and technical claims responsibilities. Based out of their Birmingham City Centre ofďŹ ce the claims unit handles a mixture of EL/PL claims on behalf of large corporate organisations. You will ensure the running of a smooth and effective operation, you will be ultimately responsible for the client relationship and this will involve regular external off site visits.

Contact: Richard.Coleman@ipsgroup.co.uk - Birmingham Ref:CII135198RJC

s 0ROFESSIONAL )NDEMNITY #LAIMS !SSOCIATE Up to ÂŁ37,000 + BeneďŹ ts – Birmingham a leading global Insurance Broker seeks a Professional Indemnity claims expert to join their expanding department in Birmingham City Centre. The role will involve regular contact with a wide range of clients including Solicitors, Surveyors, Architects and construction professionals to manage and handle all areas of their Professional Indemnity Claims. You will be the key point of contact for all Professional Indemnity claims and therefore your knowledge and experience will be required to build a conďŹ dence in the company throughout the claims process.

Contact: Richard.Coleman@ipsgroup.co.uk - Birmingham Ref:CII135501RJC

s 3ENIOR #ONSTRUCTION ,OSS !DJUSTERS Up to ÂŁ70,000 + BeneďŹ ts – London A number of opportunities have opened for Senior Loss Adjusters within the constructions markets. Whether you work in liability, CAR or have general construction adjusting experience we want to speak to you. The roles come with excellent beneďŹ ts plus opportunities for international work.

Contact: Daniel.Hayes@ipsgroup.co.uk - Birmingham Ref:CII135572DH

s #OMMERCIAL 0ROPERTY #LAIMS (ANDLER Up to ÂŁ27,000 + BeneďŹ ts – Kent In this role you will have the authority to work on claims from cradle to grave. You will process FNOL, investigate the causes, establish the costs, decide upon liability and have the authority to decide on a fair settlement. My client are looking for conďŹ dent candidates who can question and improve their processes.

Contact: Daniel.Hayes@ipsgroup.co.uk - Birmingham Ref:CII135626DH

s 0ROPERTY AND #ASUALTY 2ISK 3URVEYOR Up to ÂŁ42,000 + BeneďŹ ts – M4 Corridor Specialising within Property and Casualty surveys, your role will be to visit clients on the M4 corridor, from Cardiff over to the M25 to undertake in depth reviews of health and safety management systems, assess potential property and environmental liabilities and complete risk reports.

Contact: Daniel.Hayes@ipsgroup.co.uk - Birmingham Ref:CII134813DH

s &INANCIAL ,INES 3ALES %XECUTIVE ÂŁ60,000 - ÂŁ80,000 + BeneďŹ ts – Birmingham An excellent opportunity for a Financial Lines Sales Executive. You will have a real focus on building the professions new business strategy across the branch looking to bring in retail and new business across the wholesale network with a focus on PI. The ideal candidate will have experience at senior level working within a commercial broking environment.

Knowledge of ďŹ nancial lines including professional indemnity will be highly preferable.

Contact: Mark.Fancourt@ipsgroup.co.uk - Birmingham Ref:CII134194MF

s #OMMERCIAL #LAIMS (ANDLER ÂŁ20,000 – ÂŁ27,000 + BeneďŹ ts – Manchester Commercial claims handlers required for leading insurance Claims Management company in their Manchester ofďŹ ce. You will handle a caseload of commercial property claims efďŹ ciently and proactively. Ideally you will have handling experience of property claims from either an Insurer, Broker or Loss Adjusting company.

Contact: Ashley.Blake@ipsgroup.co.uk - Manchester Ref:CII135524AB

-ANCHESTER manchester@ipsgroup.co.uk Tel: 0161 233 8222

777 )03'2/50 #/ 5+

,EEDS leeds@ipsgroup.co.uk Tel: 0113 202 1577 3INGAPORE singapore@ipsgroup.co.uk Tel: +65 6223 1023

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

18/04/2018 12:05

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