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Laurence

Top 15 insurers revealed as European premium volumes tumble

Allianz came on top in the non-life segment, with 57,772 million euros of premiums last year. It was followed by AXA with 52,444 million euros, Zurich with 31,153 million euros, Talanx with 27,179 million euros, and Generali with 22,147 million euros.

The rest of the top 15 European insurance companies with sky-high premiums in the non-life segment last year were:

  • MAPFRE with 16,110 million euros;
  • Ergo with 14,018 million euros;
  • Covéa with 12,670 million euros;
  • Aviva with 12,071 million euros;
  • R+V with 9,608 million euros;
  • Groupama with 9,598 million euros;
  • RSA with 8,195 million euros;
  • Unipol with 8,107 million euros;
  • Sampo with 6,242 million euros; and
  • Mutua Madrileña with 5,468 million euros.

The report indicated that the life segment took a hit from the COVID-19 pandemic and the low-interest rate environment. As a result, the 15 largest European insurance groups in this segment – headed by Generali, AXA, and Prudential – recorded a decline of -11.0% in premium revenue.

Despite the business impact of the pandemic that led to a 19.8% drop in net result (which fell to 27.86 billion euros), MAPFRE Economics found the sector’s resilience in terms of solvency noteworthy – with 10 of the 15 groups mentioned above having recorded significant improvements in this area by the end of 2020.

European insurers’ main response to the pandemic focused on ensuring the health and safety of their employees while striving for business continuity and meeting their contractual obligations to provide their clients with adequate customer service and advice.

“Lockdowns and social distancing measures have challenged insurers’ business continuity policies, accelerating the digitisation processes already underway and leading to a transformation that now seems unstoppable,” said MAPFRE Economics in the report.

“And let’s not forget the exceptional measures implemented, the mobilisation of resources to dynamise the economy through direct donations to society, and measures to help the policyholders, especially small- and medium-sized enterprises and self-employed workers. These measures have, in many cases, been supplemented by other support initiatives.”

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Aon releases financials on back of deal collapse

However, it did see its operating margin decrease by 50 basis points to 23.3%, largely due to the negative impact of 470 basis points from the repatterning of expenses outlined in the first quarter.

In terms of the terminated Willis Towers Watson deal, it outlined that transaction costs would have been and will be incurred by the company through the third quarter of this year. It also announced that Aon and Alight executed an amended agreement to divest the Aon Retiree Health Exchange, and that the previously announced agreement to sell Aon’s US retirement business had been terminated.

Looking at its individual businesses, its Commercial Risk Solutions unit was up 20% year-on-year to $1,349 million; its Reinsurance Solutions business was up 12% to $500 million; while Retirement Solutions was also up 12% at $440 million. Health Solutions, meanwhile, saw a 19% rise to $307 million.

“In the second quarter, our team delivered 11% organic revenue growth, our strongest growth in over a decade, that translated into 17% growth in earnings per share, and contributed to 13% free cash flow growth for the first half,” said Greg Case, chief executive officer. “These results demonstrate the incredible resilience of our colleagues and the power of Aon United. We are moving forward at an accelerated pace, with a proven leadership team and an enduring strategy. Our ability to innovate on behalf of clients remains unrivalled and continues to translate into significant progress against key financial metrics and shareholder value creation.”

There were no comments issued from Case with regards to the WTW deal as part of the financial results release.

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Investment in insurtech reaches all-time high

Investment in insurtech reaches all-time high

Global investment in the insurance technology sector totalled US$7.4 billion in the first half of 2021, setting an all-time high and exceeding full-year investment in 2020 and in all previous years, according to a report by Willis Towers Watson (WTW).

The second quarter saw 162 deals yield more than $4.88 billion in investment, a 210% increase over the same period last year and 89% from the previous quarter, according to WTW’s Quarterly InsurTech Briefing. This was largely driven by 15 mega-rounds of $100 million or more, representing $3.3 billion combined. Most of these funds were raised by later-stage players seeking expansion.

While Series B and C rounds were the major contributors to the quarterly total, the number of early-stage deals also increased. It increased by over 9% from the previous quarter, and 200% from pandemic-stricken Q2 2020. As a percentage of overall deals, early stage activity was mostly steady, at 57%.

Distribution-focused insurtechs made up the majority (55%) of start-up deals and 10 out of the 15 mega-rounds. Property & casualty insurtechs also dominated the deals for the second quarter with 73%.

Investors came from 35 countries globally, including several new entrants from Botswana, Mali, Romania, Saudi Arabia and Turkey.

“As technology changes our lives, society will demand an insurance community that reflects and supports our changing, digitally empowered behaviours,” said Dr Andrew Johnston, global head of insurtech at Willis Re.

“Consumers and businesses increasingly expect insurance to be delivered when and how they want it, and risk carriers that fail to respond will fall away over time. To embrace technology is a minimum survival condition. Those that use it to redefine service in the insurance world will thrive. That means a positive future for insurtechs that bring a truly differentiated business approach to our industry. Some of them will create untold long-term opportunities for themselves and the insurance sector.”

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MGAA announces major expansion

“The Irish MGA market has been challenging in recent years due to a lack of underwriting capacity in the wake of personal injury claims inflation, broker consolidation and a restrictive regulatory environment under the Central Bank of Ireland in the wake of the 2008 financial crash,” said Keating.

“We believe that opening up our membership to MGAs in the ROI will help the MGA sector in its drive for improved standards and regulatory recognition, while helping to facilitate and encourage collaboration and new capacity into the country. The move will also enable MGAs, insurers and suppliers based in the ROI – and our UK-wide membership – to benefit from networking, events, educational forums, webinars, and regulatory support.”

The move has been backed by Brokers Ireland, with director Cathie Shannon stating that the MGAA’s efforts to improve standards “can only support our own members’ initiatives.”

Meanwhile, Moyagh Murdock, CEO of Insurance Ireland, believes the association can play a “key role” in bringing capacity to the market.

“The timing could not be better as it coincides with the recent changes to the personal injury claims landscape in Ireland,” said Murdock.

“The introduction of the new injury awards guidelines on April 24 this year is playing its part in making Ireland a more attractive place for insurance providers and although it is still early days, we look forward to the new guidelines being applied consistently across the board. We believe that the continued implementation of the Government’s Action Plan for Insurance Reform will result in a more stable sector and will reduce market volatility and bring more certainty for customers and insurers alike. We look forward to working with the MGAA and their team in the future.”

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PartnerRe reveals first half bounce back

PartnerRe reveals first half bounce back

PartnerRe Ltd has announced its results for the first half and second quarter of 2021, bannered by a return to profitability after being struck by losses last year.

According to a statement by PartnerRe, the company’s net income was US$314 million for the second quarter, compared to income of US$229 million for the same period of 2020. For the first half of 2021, net income was US$248 million, compared to a loss of US$204 million for the same period last year.

The company reported operating income of US$151 million for the second quarter and US$192 million for the half year, which provided an operating income return on equity of 8.8% and 5.6%, respectively.

Net premiums written increased by 29% to US$1.794 billion for the quarter, with growth in lines of business that experienced strong rate increases, compared to the prior year premiums which were impacted by the COVID-19 economic downturn.

PartnerRe registered a non-life underwriting result of US$150 million or 32.7 points of improvement on the combined ratio of 88.6% year-over-year. Life and health underwriting profit, including allocated net investment income was US$23 million for the second quarter.

“We delivered strong results in the second quarter with an annualized operating ROE of 8.8%, and I am pleased to see the positive impacts of our portfolio actions begin to show through our financial result,” said PartnerRe president and CEO Jacques Bonneau.

“Our non-life combined ratio of 88.6% includes improvements in the current accident year loss ratio from business mix changes and overall favourable pricing conditions across most lines of business, as well as improvements in prior years’ reserve development as older underwriting years run off.

“Our life and health segment also significantly improved its underwriting profit compared to the prior year. Third party capital currently stands at US$1.1 billion of assets under management and provided us the ability to increase underwriting capacity and line sizes. These underwriting results, combined with good investment performance, helped produce solid profitability for the second quarter of 2021.” 

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“MGAs are treated somewhere in between incompetents and criminals”

The model of Accelerant allows it to simultaneously focus on its MGA partners and the risk bearers on the back end, backed by extensive partnerships with reinsurers as well as other risk capital forms. Since it launched in 2018, the group has gone from strength to strength, and recently expanded into the UK through its acquisition of Kinnell Holdings. The reason for this ongoing success, Radke believes, is simple – MGAs are generally treated “unbelievably badly” by their capacity providers and have seized on the opportunity to be supported and valued.

Examining how MGAs are currently being let down, Radke noted that, especially in the small commercial space, these firms are under consistent pressure because it’s almost impossible that one or another line of business is underperforming at any given point. Thus, MGAs continually find themselves under pressure from one underwriter or another and are constantly fighting the “product versus customer” conundrum.

“The second thing is every MGA is inconsequential to every capacity provider because of the way that the market [works], where you’ll have five or six syndicates on a binder,” he said. “So the easiest thing in the world to do is just nonrenewal [when there’s a problem] – there’s no sense in working to fix the relationship as it’s not big enough. So you have this incredibly brittle relationship, where the MGAs are treated somewhere in between incompetents and criminals by their capacity providers.”

Even look at the Lloyd’s set-up, Radke said, where MGAs have to audit their accounting and underwriting twice a year. It’s hard to imagine any other situation where, twice a year, a third party comes into your business on the premise that you are breaking your contracts.

Accelerant is changing that conversation by applying simple common sense to the relationship. He highlighted that this means embracing the fact that supportive relationships are the key to long-term success and prosperity. Accelerant wants its MGA partner relationships to be big, to be long-standing and to be founded on the premise that neither party can afford for the other to fail.

Read more: Pro MGA Solutions CEO discusses the evolution of the MGA sector

“We are in this for the long term,” he said. “And the way we manage that is multi-faceted. Firstly, we say ‘we want to write all your business, 100%’. Of course, there are some occasions where we don’t do that because there’s a mitigating reason, but our philosophy is, we want the diversification of their entire book, because history has shown that’s more profitable than trying to pick particular lines or particular products.

“Secondly, we say ‘as long as your behaviour is appropriate, your loss ratio is appropriate and you are completely transparent with your exposure data, we are happy to give you a five-year commitment of capacity. And that’s usually the point where the MGA stops listening to our other benefits and just start smiling.”

It makes such a difference for the senior people in the firm to get to spend their time on the business as opposed to in London, trying to get their binders renewed, he said. The time sink of that renewal is incredible, so to have the chance just to focus on brokers, producers and customers means the world to these professionals.

“It comes down to a few solid values that our parents could have taught us if we had listened,” Radke said. “That is to treat people like adults, to give them accountability, and trust, and then have the technology and [data analytical tools] in place to follow up and make sure that they’re living up to that trust.

“And then on the other end, just play with a fair deck of cards, where you’re not withholding information. If you share openly with partners and treat partners like partners, so they can participate in the entire probability distribution, then you’ve created a revolutionary business completely fueled by technology and data and underpinned by incredibly strong relationships. And that’s only by following the lessons that we were probably all taught when we were eight years old.”

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Lloyd’s makes history with its new deputy chair

Lloyd’s makes history with its new deputy chair

Lloyd’s has announced the appointment of Vicky Carter as deputy chair of Lloyd’s Council, effective Sept. 1. Carter will be the first woman in the company’s 335-year history to hold the post.

Carter has been an elected member of Lloyd’s Council since 2019 and has worked for the Lloyd’s market for 40 years. She began her career in medicine before moving to reinsurance broking in 1980. Carter joined Guy Carpenter in 2010 as vice-chair of international operations and, in 2018, she became chair of Global Capital Solutions International. She also holds positions on the company’s board and executive committee.

Carter is chair of the Lloyd’s Charities trust and Lloyd’s Community Programme and a trustee of the Sick Children’s Trust.

“I’m delighted that Vicky has agreed to become deputy chair of Lloyd’s,” said Bruce Carnegie-Brown, chairman of Lloyd’s. “This appointment recognizes her extraordinary professional contribution to the Lloyd’s market and global reinsurance industry over many decades. Her leadership will be vital as we progress our work in building the world’s most advanced insurance marketplace.”

“I’m thrilled and proud to become Lloyd’s first female deputy chair,” Carter said. “I am a huge advocate of the market’s global reach and its ability to respond to the changing risk needs of customers, and look forward to continuing to contribute to the leadership of Lloyd’s in this new role.”

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FM Global switches up executive leadership team

Kevin S. Ingram (pictured directly above), executive vice president and chief financial officer, a 31-year company veteran, has been promoted to senior executive vice president and chief financial officer. He will continue to oversee the company’s financial and risk management operations. He started at FM Global in 1990 as an associate controller, and has since held positions including treasurer, finance director and senior vice president of finance. Ingram will report to Roberts effective Aug. 1.

The following appointments will take effect Sept. 1:

Deanna Fidler (pictured directly above), senior vice president and chief human resources officer, will become executive vice president and chief administrative officer. She will be based in FM Global’s corporate offices in Johnston, R.I., and will oversee human resources, diversity and inclusion, strategy and business enablement, and the FM Global Academy. Fidler joined FM Global in 2018. Previously, she served as chief human resource officer for T. Row Price. She has also held leadership roles at Aetna. Fidler will report to Robert.

Randall E. Hodge (pictured directly above), senior vice president and chief underwriting officer, will be promoted to executive vice president, staff insurance operations. Hodge, a 31-year company veteran, will be based in FM Global’s Johnston corporate offices and oversee underwriting and reinsurance, engineering and research, FM Approvals, claims, client service and marketing, and data analytics. Hodge joined FM Global in 1990 and has served in several roles, including field engineer, account manager, and Atlanta operations manager. He will report to Roberts.

George J. Plesce (pictured directly above), senior vice president and chief client experience and sales officer has been named executive vice president, US, Latin America and sales, with oversight of regional insurance and engineering operations and global business development. Plesce, a 30-year company veteran, will be based in the Johnston corporate offices. He joined the company in 1991 as a senior account representative. In his new role, he will report to Ahnell.

James R. Galloway will continue as executive vice president, overseeing FM Global’s international operations and AFM, a division that provides commercial property insurance for the middle market. He will also assume responsibility for the company’s Canada and specialty industries division. Galloway will report to Ahnell.

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Beazley reports financial results turnaround

Beazley reports financial results turnaround

Specialist insurance group Beazley Plc has bounced back – posting a US$167.3 million (around £121.6 million) pre-tax profit for the first half of 2021. The corresponding figure in the period ended June 30, 2020, was a loss before tax of US$13.8 million.

Gross written premium, meanwhile, grew 22% to US$2.04 billion; net earned premiums, 14% to US$1.39 billion. Earnings per share stood at 18.9 pence, or 24 cents. Additionally, Beazley reported a combined ratio of 94% for the six-month span.

Commenting on the numbers, chief executive Adrian Cox noted: “Beazley’s gross premiums written increased by 22% to $2,035.3 million with all divisions achieving rate rises in the first six months of 2021. Reserve releases across all divisions supported a half year combined ratio of 94%, and the investment return achieved was also strong at 1.2% year to date.”

In the first half, Beazley’s total reserve releases were US$95.7 million. In the same period last year, the amount was US$58.6 million. The insurer’s investments, meanwhile, returned US$83.6 million.

“I am excited about the growth opportunities ahead,” said the new CEO. “Our capital base remains strong and we are well placed to support an ambitious growth plan at similar levels to 2021. The board remains committed to a dividend payment and will consider this at year end after taking into account the 2021 results as a whole.”

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Covéa Insurance CEO steps down, replacement named

Furness, who has held the role of chief operating office at Covéa Insurance since December 2019, was formerly claims director of the company and its predecessor Provident Insurance. Discussing his appointment, he paid tribute to Reader and highlighted that the firm was “extremely grateful” to him for the legacy he leaves within Covéa.

“I’ve worked with him for 18 years and he has been a brilliant leader of the business and, from both a professional and personal perspective, I will miss him greatly and wish him all the very best for the future,” he said. “Taking over from James is an absolute honour.”

Furness noted that he had been with Covéa for many years and that it is a company he loves and believes in. The business has an “agreed and progressive” strategy in place, he said, backed up by great people and he intends to continue to propel this forward, together with the rest of Covéa’s team.

Commenting on his decision to step down, Reader said that after nine years as CEO, he decided that now is the right time to hand over the role. It had been a privilege to lead such a great business, he said, and he is very proud of all the team has achieved together.

“Covéa Insurance has an exciting future ahead of it,” he said, “and I’m delighted to be handing the baton on to Adrian, who I’ve no doubt will be a more than worthy successor.”

Meanwhile, Covéa Insurance’s chairman Dominique Salvy added: “While the board of directors and our shareholder regret James’s personal decision to leave, we respect his choice. We are grateful for his leadership of the company throughout his tenure, which has delivered a solid strategic positioning for the business and has helped navigate the unprecedented challenges brought about by the pandemic.”

Salvy said he believes that, going forward, no-one is better positioned than Furness to continue to guide the business and build on its strengths and that the board wishes him every success. 

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