Laurence

It’s now the turn of specialist legal expenses insurer DAS UK Group to share how it performed last year.

The group, which is the name behind legal expenses insurance company DAS LEI and law firm DAS Law, saw a statutory loss worth £0.6 million in the year ending December 31, 2020. Gross written premium (GWP), meanwhile, stood at £109 million.

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Neil Manser, chief strategy officer, former MD of DLG’s commercial business, NIG, and former director of investor relations, has been acting CFO since January 2021. The board has resolved to appoint him as an executive director and CFO, and as a member of the investment committee, with effect from the conclusion of the AGM today.

Withdrawal of AGM resolution

As DLG’s AGM Notice has already been issued, DLG confirms that the resolution to re-elect Tim Harris as an executive director of the Company (resolution number 6) is now withdrawn. This withdrawal does not otherwise impact the validity of the Notice of Meeting, the proxy form or any proxy votes already submitted on other proposed resolutions. The numbering of all other proposed resolutions at the AGM will remain unchanged.

Board Committee chairmanship

The following changes will also take effect from the conclusion of the AGM today.

Mark Gregory, independent non-executive director, will become chair of the board risk committee, succeeding Jane Hanson, who will be stepping down from the board, as announced on 21 December 2020. Gregory will give up his chairmanship of both the remuneration committee and the investment committee but will remain a member of both committees.

Meanwhile, Richard Ward, senior independent director, will become chair of the remuneration committee while Fiona McBain, independent non-executive director, will become chair of the investment committee.

Commenting on the changes, Danuta Gray, chair, said: “On behalf of the DLG board and all our colleagues, I would like to thank Tim Harris for the exceptional contribution he has made as CFO since 2019 and to wish him and his family the very best. The board warmly welcomes Neil Manser as our new CFO. Not only has Neil proven himself to be extremely capable while acting as CFO during Tim’s leave of absence but he has also held a number of senior roles across the business, giving him a deep understanding of capital markets, strategy and the culture of the group.”

Neil Manser, CFO-designate, noted that having held a number of leadership positions within DLG, he has seen first-hand the quality of DLG’s business model and the dedication of its talented people.

He said: “I am proud and excited to be taking over from Tim as CFO at a time when we are grasping the opportunities made possible by our significant investment in capability.”

This announcement is made in compliance with the Company’s obligations under Listing Rule 9.6.11.

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The acquired operations include certain Willis Re treaty and facultative reinsurance brokerage operations, as well as some UK specialty, European and North American brokerage operations. Combined, these operations generated US$1.3 billion of estimated pro forma revenue and US$357 million of estimated pro forma EBITDAC, in each case for the year ended December 31, 2020. 

“This acquisition will accelerate our long-term strategy by significantly expanding our global value proposition in reinsurance, broadening our retail brokerage footprint and strengthening key niches and specialty brokerage offerings,” said J. Patrick Gallagher, Jr., Chairman, President and CEO.

“The powerful combination of expertise, geographic reach and scale that this acquisition presents will greatly enhance our offerings to clients and prospects, while also providing significant value for our colleagues, carrier partners and shareholders.  Most importantly, I look forward to welcoming more than 6,000 new colleagues to our growing Gallagher family of professionals.”

Gallagher has listed several expected benefits of the acquisition, including:

• Expanded global value proposition within reinsurance brokerage
• Broadened global footprint in retail property, casualty and health & benefits brokerage
• Increased depth in key niches and specialty operations such as energy, construction, cyber, space, and aerospace products
• A comprehensive suite of analytics capabilities including catastrophe modelling, dynamic financial analysis, rating agency analysis and capital modelling
• Stronger relationships with major insurance carriers and new relationships with middle market and large account retail clients
• Added platforms for future tuck-in acquisitions

The brokerage giant said it expects to finance the US$3.57 billion transaction using a combination of long-term debt, short-term borrowings, free cash and common equity. Integration of the new operations is expected to take around three years with total non-recurring integration costs estimated to be approximately US$350 million. 

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Fortunately for the MD of Burns & Wilcox UK, Stuart Kilpatrick (pictured), navigating new opportunities during a time of crisis is nothing new. He highlighted how his first foray into insurance broking after years in underwriting occurred just after 9/11, an experience that offered significant insight into how to deal with uncertainty. This has proven to be worth its weight in gold as the ink was barely dry on the deal to join the Kaufman group when remote working came into play.

Now over a year later, the MGA is ramping up its ambitions, with Kilpatrick driving a strategic growth plan that will oversee Burns & Wilcox UK building significant scale. There is no fixation on exactly what that growth has to look like, he said, but the aim is to grow the business four or five times, over the next three to five years.

“That’s going to be done in a few different ways,” he said. “We’re looking to attract new talent to come into the business, we’re potentially looking at new classes of business, and at teams and subsets of what we’ve got. And then potentially, also mergers and acquisitions. These will be dependent upon the type of opportunity that arises, but [Kaufman Group] has got lofty ambitions for us and is absolutely willing and able to invest in what we’re trying to do here in the UK.”

With the first virtual BIBA conference literally just around the corner, Kilpatrick and his team are looking forward to the opportunity to catch up with friends and peers, both old and new. Broker partnerships are at the very heart of the Burns & Wilcox proposition, he said, and working with brokers through the COVID-19 crisis has given him a keen insight into the key ways that COVID is impacting the insurance profession.

Read more: How will 2021 change the insurance industry?

While its impact on claims goes without saying, he said, other aspects such as how significantly the pandemic has compounded the hardening of the market remain to be seen. The market was already getting tougher but now the question is whether that hardening will last longer due to the impact of COVID. It’s a factor that is being widely debated at the moment because the overall impact on reinsurance has not yet become clear.

“Also, our industry was under the spotlight for quite a lot of last year, and quite a lot of that was in a negative way,” he said. “So, I think we’ve got to learn some of the lessons from that. That’s not to say that cover is [automatically] there and that insurance is a blank cheque to be written on but rather it’s about making sure that clients understand what they’re buying and that we understand what we’re selling. In the event that something like this happens again… we’ve all got to be in a better position.”

COVID-19 created an opportunity for the insurance profession to rethink how it does things, Kilpatrick said, and the Burns & Wilcox team are seizing that opportunity. When the pandemic struck and businesses closed down, the value of being able to offer cover on a monthly or quarterly basis, or to strip cover back to the bare necessities became clear. Showcasing that adaptability got him reconsidering whether certain elements of the insurance proposition are only done the way they are because they’ve always been done that way.

“I think we need to adapt,” he said, “and hopefully, one of the legacies of the COVID issue is going to be that we are prepared to do that and don’t just go back to doing what we’ve done.”

Read more: Burns & Wilcox UK names underwriting director

Certainly, Kilpatrick has no intention of wasting the lessons of the COVID experience and, looking to the future, he is preparing the business to enter its next phase of growth, and inviting brokers along for the ride. For instance, Burns & Wilcox UK will be looking into areas such as real estate that it didn’t traditionally operate in, he said, as well as building on its already significant penetration into the hospitality and leisure markets.

“My message to brokers is that we’re really keen to grow and to look at new opportunities. Just because you’ve never thought of us in that way before doesn’t mean you shouldn’t think of us in that way now,” he said. “Our [growth trajectory] is different to when we were at Barbican Protect, where we were more focused just on organic growth, now as Burns & Wilcox, we want to scale the business. And that doesn’t mean that we’ll do everything, but we’re happy to sit and have a conversation about opportunities, wherever or whatever they may be.”

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Talanx Group, the parent company of insurance brands HDI and Hannover Re, is “off to a good start” in 2021.

That was how the German business described its performance when Talanx released the group’s financial results for the first quarter of the year. Here’s how Talanx fared in the period:

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The test is not a pass/fail exercise but has a mainly microprudential approach, allowing EIOPA to make recommendations to the industry and enables supervisors to ask insurance undertakings to take remedial actions, where required, to improve their resilience. Participants are requested to estimate their position under two assumptions:

1. Fixed balance sheet;
2. Constrained balance sheet.

The 2021 exercise targets European (re)insurance groups and its selection process is mainly based on size, EU wide market coverage, business lines conducted (life and non-life business) and the number of represented jurisdictions.

EIOPA has consulted relevant stakeholders and participants during the preparation stage of the stress test package. Technical discussions with stakeholders occurred between mid-January to end-March. From mid-April to mid-May EIOPA carried out consultations with participants in the form of Q&As to provide clarifications and improve the stress test package. 

Participants can submit requests for clarification on the Stress Test exercise to their National Supervisors by May 10, 2021.

The test is now, from the launch of the exercise today to the deadline for results submission (August 10, 2021) in the calculation phase, where participants are requested to calculate the results and indicators according to the prescribed scenarios.

The next phase is the validation phase from mid-August to end-October where quality assurance of the results is split into local quality assurance and central quality assurance. During the validation period, participants might be requested to provide clarifications or resubmit part of the results.

The final stage is results analysis and the drafting of the report which will occur in November and December.

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Read more: BIBA reveals line-up for 2021 conference

“This time of year, with the BIBA conference around the corner, it is always especially busy for us and gives [the team] the opportunity to speak on a number of different topics. So, it’s an exciting time for us because, as a brand, we view the broker market with a lot of importance,” he said. “And I think the fact BIBA’s happening is [fantastic] because last year there was lots of disappointment. Our industry really looks forward to this event because it’s a reminder that we are a people business, and we’ve needed to be even more of a people business during COVID.”

There’s a lot that Ward likes about working with brokers, including their pragmatism, their friendliness and the human side that they bring to the insurance ecosystem. It goes back to that trust piece and the strength of the relationships formed between insurers and brokers, he said, and he believes that it is that personal touch that exemplifies and preserves the role of the broker in insurance.

Long may that continue, he said, because the market needs choice – choice of distribution and choice of relationship. From working closely with the broker market, the team at AXA Partners has seen first-hand the key challenge impacting brokers at this time, including the issue of changing customer behaviour. Many brokers have had to rapidly adapt from a face-to-face presence to remote working, and so the team has been monitoring the ongoing situation to see how its digital support offering can be accelerated and where relationships can be restructured in line with consumer requirements.

Read more: AXA Partners UK & Ireland unveils comms deal

“Our relationship is based on the idea that when a broker comes to us and says, ‘this is what I’m thinking, here’s a proposal for you that’s creative and makes financial sense’ then we actually listen,” he said. “It’s not the kind of relationship where we just take a contract out of a drawer and say, ‘does this work?’ because it’s about knowing the person, knowing the organisation and knowing what they’re trying to achieve. We’re asking, ‘can we do it?’ not ‘how can we not do it?’”

BIBA’s theme of resilience is particularly timely this year, Ward said, as resilience is a real challenge facing brokers at this time. Running a business isn’t easy at the simplest of times and he knows from his own market relationships that brokers are at the sharp end of the upheaval in the market and of changing customer behaviours and requirements. The good news, however, is that brokers generally seem keener than ever to seize new innovation opportunities and to reach out to their insurer partners for support in implementing them.

“I really feel for brokers,” he said, “but I do have a pretty big degree of optimism that, looking forward, the uncertainty created in the market has refocused customers’ minds. And we’ve seen this in terms of our service scores – if you give good service when customers are in a time of need, they really do appreciate it. So working in conjunction with brokers to provide the right service at the right time, is really what we’re about.”

The insurance industry only needs to look to other financial services sectors to know that they must continue to innovate and to analyse the requirements of customers in order to offer them the appropriate service levels. AXA Partners is working on this with a number of its partners, but while the sector has come a long way, it’s still got a long way to go to overcome its legacy concerns and to move to a more digitally agile mindset.

“But overall, this is about the future,” Ward said. “Let’s not look back, because [COVID has] been tough for all of us. Let’s look forward, let’s listen to what our customers want from us. Together, let’s create and have as successful a future as we’ve had a past. And this is a people business so let’s talk.”

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“Over the last year we have evolved into the insurtech space,” he said, “using our team of experienced in-house developers to develop cutting-edge systems. This came about because we saw that COVID-19 is a once-in-a-lifetime opportunity to improve how we do things, to build brand new systems, and to come out the other side of this pandemic as a reinvented organisation. The fact that travel went from pre-COVID levels to virtually nothing almost overnight was a chance for us to do things that would otherwise have been very difficult to achieve.”

Discussing the launch of the AXA SunWorld Corporate Travel offering on DOA’s new broker-dedicated travel insurance hub, Oliver highlighted the enhanced COVID covers and industry-first features it includes as standard. DOA’s SunWorld Travel brand, which is one of the largest travel providers to the UK broker market, has been in partnership with AXA since 2008, he said, a relationship that has thrived due to their shared understanding that travel insurance is about reassurance more than it is about price.

The timing of this hub update has been ideal, he noted, as across the world people are cautiously considering travel arrangements, be that corporate or leisure travel. Naturally, soon-to-be travellers will be nervous about making trips abroad once more and will be carefully considering the type of cover they will require.

“And we’ve really concentrated very heavily on this because we’re conscious that a lot of travel firms will be advertising COVID cover but we feel it’s important that if we’re going to offer it, it needs to be backed up with coverage. That’s not just about saying ‘oh, we’ll cover you if you fall ill abroad due to COVID’ and sometimes that is what these firms are offering when, in actual fact, there are so many other elements to the impact of COVID on travel.”

Beyond just covering customers who fall ill abroad with COVID or other pandemic illnesses, the right coverage will protect customers who fall ill with COVID at home or have to self-isolate and can’t travel, or who are denied boarding at an airport due to detected symptoms, or who have to cancel the trip due to being made redundant. These are just a few of the coverages offered as standard by DOA, Oliver said, as it has measured the full, far-reaching impacts and implications of the COVID crisis.

Peace of mind is what consumers need, he said, and what they will be looking for brokers to provide. And as DOA’s insurance offering goes far beyond just the travel industry, the team has seen first hand how that consumer requirement is the same across the whole profession. Looking at the business interruption insurance question mark that swept the sector, the way that many insurers have handled the crisis has not done the wider industry any favours.

Read more: What will the travel insurance market look like post-lockdown?

“I think this is where we can step back and think about the need to make sure we are forward-thinking, rather than being reactive all the time,” he said. “That’s the mindset we’ve gone with on this. Because everyone you speak with, whether it’s friends, or family, or colleagues, is saying the same thing – that as soon as they can book to go away safely they’ll do so.

“As soon as these restrictions have lifted, it’s going to be the number one biggest thing because many have lost out on memories, on life experiences and on seeing family abroad over the last year. I think there are so many factors there that mean there will be an eruption in travel at some point and we need to be prepared for that.”

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Global health insurance provider William Russell has published what are described as “eye-watering” expatriate healthcare claims for the 2019-2020 period.

According to the mandated underwriter, the highest sums paid for medical treatment overseas were for cancer treatments. It was noted that in the abovementioned timeframe, 25 expatriate claims for cancer treatments exceeded US$100,000. Meanwhile, huge amounts were also seen in the area of maternity care. Other treatment types with racked up bills included dental and diabetes.

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It was a massive disappointment at the time but also a real relief, she said, as she could tell herself she had been prepared to do the talk, to face her fears around speaking on camera, without having to actually go ahead with it. When the organisers announced they were going to do the event virtually, Talbot Jones knew she had the chance to withdraw gracefully but she’s delighted that she didn’t, especially considering the resonance her talk has had with viewers.

“It’s been a really exciting opportunity,” she said, “because I think that so often, insurance and risk management is seen as something quite grey and boring. Risk management is seen as the thing that stifles opportunity, so it’s just been great to be able to stand up and spread the message that actually, insurance and risk management is really exciting. It’s a great career, it’s a great industry and it really supports resilience, or antifragility.”

The profession has found an active cheerleader in Talbot-Jones, who joined the sector several years ago after a decade in teaching. She has become a relentless pursuer of fearlessness, she said, having spent about decade of her life not doing things because she was convinced she couldn’t. This hasn’t been restricted to the significant growth and evolution of the brokerage Talbot Jones either – it also comes across in the professional qualifications she pursues and the activities outside work she enjoys. For years, she said, she would stand on the side of the Great North Run and shout herself hoarse encouraging the runners, wishing that she was the kind of person who could do what they did. And then one day, it clicked, she could technically do as well as at least some of those runners, and so she started her own strategy of running, which saw her build up the stamina to eventually run a half-marathon.

“That’s the challenge, when you think ‘I could never do that’ and then you ask yourself ‘well, would I like to?’ And when the answer is ‘yes’, then you can find a way to do it,” she said. “As the saying goes, whether you believe you can or whether you believe you can’t, you’re right. When you’ve decided you’d like to do something, it’s then you make it happen. You work hard, and you achieve it.”

Choosing the topic of her TEDx talk was relatively easy, Talbot-Jones said, as when the the brokerage was being launched and she was new, both to insurance and business, she spoke to a marketing expert at an event who advised her that the easiest way to sell insurance is through fear. As soon as she heard that, she knew that wasn’t the kind of business she wanted to grow and it wasn’t how she wanted to represent the insurance industry.

“That was very early on,” she said, “and it was quite an important moment for me and really clarified what I wanted to do, and what I wanted our business to do. We don’t want to sell insurance through fear, we want to support organisations to better understand and manage their risks so that they can do impactful and exciting things. That’s at the back of our mind but it’s also at the front of our mind as we go through our business. What we do is help people plan, assess risk and put things in place so they can move forward with confidence – and it’s so exciting to know I’m part of that.”

Read more: Brokers discuss the merits of embracing social media

Doing the TEDx talk itself was a fascinating experience, Talbot Jones said, and the process behind the scenes was incredibly intricate, with the organisers putting in a huge amount of work. She was initially looking forward to the opportunity of developing her public speaking skills in front of an audience, so the virtual nature of the event which meant it was just her standing in front of a camera was incredibly unnerving.

“But I’m really proud that I was able to live out what I say in the talk and what I shared about actually working out what the obstacle is, and [establishing] whether it is a valid fear or whether it’s something that I actually recognise isn’t important,” she said. “I did it. I stood up in front of the cameras, and it was hugely daunting and it was really difficult. But I’m hugely proud of myself that I did it and really pleased it’s being appreciated and valued.”

What better testament could you have to such an experience than saying you would be delighted to repeat it? Talbot-Jones noted she would absolutely be keen to take the opportunity of partaking in such a conference again, and of having the chance to do so in front of a live audience when COVID restrictions are lifted. In fact, without giving away any spoilers, she already has her next topic chosen and is waiting for the right opportunities to continue discussing her insights and experience with a wider audience who have shown they are listening.

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