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Read more: Charles Taylor swoops for new chief commercial officer

Based in the firm’s London head office, Fouquet joined Charles Taylor in 2014 having gained experience in handling liability claims within a law firm. At Charles Taylor, she developed an expertise in cyber claims and since 2019 has held the role of the firm’s global head of cyber. 

Meanwhile, La Stella has been with Charles Taylor for over 10 years and has experience in a range of specialty lines claims, and products liability/recall claims, and insurance/reinsurance audit. During his career with Charles Taylor, he has been based in Miami, London, and Rome where he opened Charles Taylor Adjusting’s first Italian office. He recently relocated to Barcelona to open and lead the latest location in the firm’s geographical expansion.   

In a statement, the firm said that its specialty lines practice “offers a unique proposition to the market bringing together financial institutions and commercial crime, professional indemnity, directors and officers, cyber, trade credit and political risks, specie and fine art, and contingency and entertainment specialisms.

“With the launch of specialty lines, we bring together selected class-leading products under the overall direction and leadership of Laetitia Fouquet and Nicholas La Stella,” said Andy Rice, managing director, property, casualty, technical, and special risks at Charles Taylor. “Laetitia and Nicholas are recognised leaders in their respective fields and are well placed to take the business forward and promote the availability of these services to our clients across the globe.”

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Arch Insurance International (Arch) has appointed Silvia Martinez (pictured) as its new general counsel, effective immediately.

With 10 years of legal experience in private practice and in-house roles, Martinez has extensive corporate governance knowledge and expertise overseeing complex corporate and capital market transactions.

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Another parallel between insurance and tractors, he said, is that tractors are remarkably slow and nobody wants to be stuck behind one while out on the road. So, while the importance of tractors is well understood, it doesn’t mean people want their journeys delayed by them. This is much the same with fraud detection. MGAs, brokers, insurers and ultimately consumers, rightly expect robust fraud detection without the claims journey being unnecessarily delayed.

“Like a slow road journey, a slow or cumbersome claims journey is a real turnoff,” he said, “and it’s a barrier to [firms] doing business. But, of course, [the claims journey] is incredibly important and it’s a regulatory requirement. Therefore, none of us should forget about it or ignore it in the pursuit of a great customer experience. It’s certainly not something we should forget about in terms of profitability, or ultimately the endgame of keeping insurance premiums competitive for all of our benefits.”

Read more: Sedgwick boosts claims fraud savings

So, how can firms tackle the problem of catching the vast majority of the bad guys, without end customers being stuck behind that proverbial tractor of a delayed journey? During the MGAA webinar, Carman touched on a variety of conversational touchpoints – including the role that counterfraud technology can play in the financial success of a firm. The insurance industry often thinks about fraud as a claims problem, he said, but enriching underwriting data and investing time in a fraud strategy actually directly translates into underwriting profitability.

Digging deeper into what a strong fraud strategy looks like and why it is so important, Carman highlighted the tougher market conditions currently being faced across the broader insurance piece. The most effective way of navigating a hard market is by demonstrating strong and effective controls, he said, and through partnering with a TPA that takes responsibility for driving that fraud performance. That TPA must place equal importance on people, data and processes – it’s a three-legged stool and if you remove one of those metrics from good fraud detection then it falls over.

“Some TPAs talk a good game about fraud but when you scratch beneath the surface, in terms of what actually exists in terms of counterfraud controls, they may have a counterfraud team or access to a fraud specialist to refer fraud back to the carrier for handling. But they’re at the end of the process,” he said. “And sometimes we as an industry [can be] a bit guilty of this – we think about fraud as the fraud investigators.

“Actually, it’s two steps behind that. It’s about the handlers, it’s about the adjusters and good identification. And that’s the role that a TPA plays. And when we examine TPAs closely, most are still using traditional key fraud indicators and handler training on fraud awareness as a primary means of identifying fraud. And in 2021, there’s got to be a better way of doing things.”

At the foundation of strong fraud performance is meaningful action, ownership and accountability, Carman said – when Sedgwick engages with clients, what comes through loud and clear is a simple message: “we don’t want a fraud tractor, don’t slow down the process and don’t involve our customers in the process.” He noted that he agrees wholeheartedly with this but emphasised the role technology plays in achieving that demand.

Read more: Sedgwick UK COO on talent acquisition in the claims sector

In 2020, Sedgwick set about challenging its own thinking around detection performance and whether its detection strategy represented more a “fraud tractor or a fraud Ferrari”. The firm had already recognised its strong counterfraud function, Carman said, which is great but it is at the end of the process so the real question was rather how strong it was at detecting fraud in its TPA or commercial home or motor operations.

“I think we recognised that we could be better at identifying fraud risk for our clients and we saw an opportunity to take our performance from good to great in the identification piece,” he said. “Technology plays a pivotal role in countering organised and opportunistic fraudsters. In simple terms, the very best technology can compute vast quantities of data and spot the anomalies in a way that humans can’t.”

An individual claims handler who is dealing with maybe 10 cases a day is not going to be able to spot the connections or anomalies between the case they’re dealing with and another they handled 18 months ago from a different policyholder, with a different address on a different claim. It’s simply not possible as humans to trawl through the 1,000s of bits of information we receive every day, he said, and derive meaningful insights from that. So, that is where technology steps in.

“So the claims handler can spot that from a behavioural point of view, there’s an issue here,” Carman said. “But that Big Data perspective and technology [that has] the ability to compute vast quantities of structured and unstructured data, to apply rules, machine learning principles and fraud detection algorithms are crucial weapons in 2021 for detection. Without that, you’re sort of scrambling around in the dark for the bits that you can’t see, and will never get to.”

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The partnership between Z Zurich Foundation and UNICEF aims to benefit 400,000 adolescents and 150,000 caregivers in seven countries by equipping them with information, skills, and strategies on caring for their and others’ mental well-being.

The Z Zurich Foundation will also support a global communication campaign that aims to reach 30 million people and promote positive conversations and connections that increase awareness, knowledge, and action around mental well-being.

Commenting on the partnership, Z Zurich Foundation chair Gary Shaughnessy said: “Today, we are launching a global movement that envisions a world where every young person is supported to achieve positive mental well-being. This is an increasing and vital challenge. Working together, we can turn the tide and help many young people realize their potential. Join us.”

Zurich claims that promoting mental well-being among young people and caregivers is crucial to reducing the rising burden of mental disorders.

However, despite growing awareness about the negative effects and financial costs of mental health conditions on lives and communities, the insurer explained that wide investment gaps persist, particularly for mental health promotion and prevention programs.

As a result, the partnership seeks to build a coalition of public and private sector leaders who are willing to take action to promote the positive mental well-being of young people, including scaling up the programs piloted through the partnership, and supporting global and local advocacy on the importance of investing in mental health promotion and prevention for adolescents.

Charlotte Petri Gornitzka, the deputy executive director for partnerships at UNICEF, said: “Positive mental health helps us to think, learn, and build our lives. But for too many young people, psychosocial distress is disrupting their daily lives, negatively impacting their health, and preventing them from thriving.

“The COVID-19 pandemic has only added to the pressures on young people and their families, putting the mental health of a whole generation at risk. With this partnership, we are kick-starting an urgent response to a crisis that the world cannot afford to leave overlooked and underfunded.”

The global campaign supported by the partnership will launch in early October 2021, in the run-up to World Mental Health Day. The programs supported by the partnership will start in Vietnam, Mexico, Indonesia, Nepal, Colombia, Ecuador, and the Maldives.

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Is your organisation practicing corporate social responsibility that aims to improve its host communities, the economy, or the environment?

In its 5-Star Corporate Social Responsibility showcase, Insurance Business aims to celebrate the insurance companies that have developed effective and comprehensive CSR programs.

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How MGAs fit into the distribution channel

Wholesale brokers act as an intermediary between a retail broker and an insurer, and work with insurers to attain specialised coverage for clients while having no contact with the insured. An MGA is one type of wholesale broker, and operates on the insurer’s behalf while also working closely with clients to attend to their needs. The other type of wholesaler is a surplus lines broker who works with a retail agent and an insurer to obtain coverage for the insured. What makes MGAs unique is their binding authority from the insurer.

An MGA will deliver and service a insurer’s product to both insurance agencies and clients. MGAs can work with several insurers to formulate a specific mix of products to deliver to agents/brokers or directly to insureds.

How MGAs benefit insurers and agents

Working with MGAs is beneficial to insurers because they possess expertise that insurers may not have in their head or regional offices, and which can be costly to develop in-house, according to IRMI. Working with an MGA, companies can pass time-consuming and complicated tasks to an outside entity that already has the knowledge to address them.

MGAs tend to deal in lines of coverage such as professional liability, employee benefits or surplus lines where specialised expertise is needed to underwrite policies, though they can be active in any line of insurance, and work with all types of insurers. If an insurer wants to explore a specialty line of business, but does not want to take on the risks or uncertainty of doing so, they can turn to an MGA to offer up that expertise, and give the MGA the authority to underwrite and issue specialty policies because they are already familiar with the risks. 

MGAs can also write business in geographically isolated areas where insurers do not want to open an office. A small town or rural region might not warrant the opening of a branch for an insurer, but working with an MGA in that area provides the company with access to new customers without spending money on staff or rent.

Similar to insurers, agents can get expertise about a particular product or more competitive pricing by working with an MGA. They can likewise gain entry to markets and insurers that could be difficult to access on their own, and because of the often-smaller size of the MGA business, there are fewer barriers to communication for a broker. MGAs also bring technology to the table, such as online platforms that integrate with wholesale channels or products that speed up the quoting process, that help independent agents provide better services to their clients. Agents can realise higher commissions by working with an MGA that has a diverse network of insurers, allowing agents to review the commission structure and have the option to sell insurers’ products that offer the best rates.

MGAs around the world

Many MGA models were created during the 1990s and 2000s, though the role of the wholesale broker, a category that MGAs fall into, dates back to the 19th century. Associations that represent MGAs in specific regions today include:

• Managing General Agents’ Association (MGAA) in the UK, which was formed in 2011
• American Association of Managing General Agents (AAMGA), which was established in 1926 and has since merged with the National Association of Professional Surplus Lines Offices (NAPSLO) to form the Wholesale & Specialty Insurance Association (WSIA)
• Canadian Managing General Agents (CAMGA), a relatively new association formed in 2017
• Underwriting Agencies Council, based in Australia and formed in 1998

In Australia and New Zealand, MGAs are referred to as underwriting agencies, though they have the same functions as managing general agencies. According to the UAC, its 116 members account for more than AU$6 billion of premiums spent by Australian businesses and consumers annually.

In the UK, the term ‘MGA’ has been adopted by the market to refer to what was once known as a ‘coverholder.’ Today, more than 300 MGAs underwrite over 10% of the UK’s £47 billion general insurance market premiums, according to the MGAA.

Worldwide, MGAs fall into one of the fastest-growing segments of the insurance industry. Global investment firm Conning reported that MGA and program market growth continues to outpace the growth of the property and casualty market, with direct premium growth of 7% higher than the previous year compared to the 5% seen in P/C market growth. The analysis also showed that 21 of the top 25 P/C insurers have relationships with MGAs.

The role of the MGA today

With technology bridging the gap between insurers and clients today, some insurers are moving away from relying on MGAs, which has thrown the identity and future of the MGA into question.

“By virtue, MGUs and MGAs, program administrators, are the middlemen,” said Rekha Schipper, president of Tangram Insurance Services. “How can we make sure we stay ahead, make sure that we take advantage, and make sure that we continue to be relevant and meaningful to a broker, to a insurer, to a tech investor, to say, this entity still belongs in the middle of all of this?”

However, an MGA is a natural outlet for technology solutions to plug into because of its established distribution channels. These agencies can also react to market changes quicker than typical insurance companies because they are smaller businesses that are acting on behalf of larger insurers.

“We can bring programs to the market faster. We can get out to more brokers because they can get on our platform. We can reduce our expenses as an MGU because now we’re automating a lot of things,” explained Schipper, adding that there’s “an unprecedented opportunity” for partnerships between technology vendors and MGUs.

During hard market periods, MGAs can be used by insurers to decrease costs and increase profitability. The MGA model is also flexible. Following the 2008 financial crisis, Ironshore, a Liberty Mutual company, established its managing general underwriting agency as its commercial clients were facing heightened risk since the viability of some insurance insurers that offered high coverage limits across many lines of business for major companies was uncertain. Brokers were meanwhile also under pressure to find alternative coverage solutions. The Ironshore MGU model involved underwriting as well as claims management, the latter of which made it unique from a traditional MGA, which can have limited authority on claims management and payment.

(Updated September 21, 2021)

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Several insurance firms are part of a coalition of over 80 UK businesses that signed an open letter calling on Prime Minister Boris Johnson to show “strong domestic leadership” in acting on climate change.

The letter, coordinated by the Business Group Alliance for Net Zero (BGA), was released just over 40 days before the UN Climate Change Conference (COP26) in Glasgow. In the letter, the businesses voiced their support for climate action and stressed the need for the British government to formulate a coherent, integrated and Treasury-supported plan to achieve net zero carbon emissions.

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Apollo Syndicate Management has appointed Paul Sandi to head it new casualty treaty team within Syndicate 1969, subject to Lloyd’s approval.

Sandi, who has nearly 20 years of industry experience, joined Apollo from Canopius, where he was head of casualty treaty. He oversaw the creation of a new US casualty treaty portfolio for Canopius.  Prior to that, Sandi was a casualty reinsurance underwriter at Liberty Syndicates, where he was part of a team that wrote the largest North American casualty reinsurance book at Lloyd’s. Sandi began his insurance career at Price Forbes.

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Lloyd’s of London has today unveiled its 2021 Culture Dashboard and announced its ambition that a third of all new hires across the market and corporation should come from ethnic minority backgrounds. The insurance marketplace said this should be targeted at all levels of the organisation, including among the leadership tier, and noted that the current level of representation of ethnic minorities stands at 8% in the marketplace and 22% in the corporation.

Lloyd’s highlighted, however, that though improving this representation at all levels is a priority, it requires the right data to measure its progress. Therefore, to further improve its data set, it will be mandating the collection of ethnicity data in 2021.

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Read more: Swiss Re sees increasing demand for insurance protection

A significant part of the support that required by these communities is around the area of financial services, whether that’s insurance products or digital payment platforms. Looking at the current picture of financial inclusion, he noted that in Africa, for instance, only 3% of the continent is insured, while there are 1.7 billion unbanked people in the world.

“When it comes to micro-insurance,” he said, “we’re really trying to focus on rural areas and provide a safety net for the people we work with across the wider space. There’s a lot of different work going on around micro insurance, not just in Africa but also in Asia and Latin America as well. But there’s a lot of room for growth and some really interesting start-ups that can hopefully make a big difference in the world by increasing access to insurance.”

Farren highlighted how in a rural area the cost of a funeral can be ruinously expensive for a family, which can lead to them having to sell one of their key assets. Losing that income-generating asset will affect their future income and livelihood, which is an example of the safety net that a micro-insurance product can offer. On the health insurance side, if the main breadwinner of a family can’t go to work that burden must be shared by the family. ‘Hospital cash’, which is probably the most popular micro-insurance product, effectively pays out a specific sum per day, usually if the policyholder goes to the hospital for more than two days.

“Then if you look at the agricultural space, which is probably the most interesting in micro-insurance, we’re looking at crop, livestock and weather index products,” he said. “And the United Nations Food and Agriculture Organization revealed that farmers with less than two hectares of land produce around a third of the world’s food but they live in the areas most affected by climate change, and they have the least protection against those risks. So, you can see why it’s really important to have that safety net in place.”

Up until now, it has generally not been economical for insurers to provide such coverage to these regional businesses, Farren said, but that is rapidly changing given the role of blockchain and parametric insurance products.

The main barrier to micro-insurance uptake is the lack of education and trust around these services, he said, as many individuals or businesses may never have had a relationship with a financial institution before. Rural Inclusion does not offer insurance products itself but rather seeks to improve financial literacy and to work with providers to encourage them to develop human-centred products that are acceptable and appropriate to the micro-insurance marketplace.

Read more: Parametric insurance can help close global protection gap – Clyde & Co

“This is definitely an untapped market for insurance companies,” he said, “as technology and micro-financing are already very popular in certain parts of the world and I think insurance is the next port of call. Even if you look at insurtech funding, away from micro-insurance, you can see that there’s a massive increase, and there’s been some strong funding for insurtech in Africa. That seems to be a really big trend at the moment and they’re starting to get a lot of traction, so there’s no doubt in my mind that those insurtechs that focus on inclusive and micro-insurance will follow that trend.”

Rural Inclusion has only just launched and will shortly commence its pilot project in Uganda in a bid to understand the key issues faced by rural communities but already Farren and the non-profit’s co-founder Joseph Lukwago have been pleased by the positive reaction they have had from the insurance market. It’s great to see the community interest the initiative has generated, he said, and he is looking forward to forming strong partnerships within the market going forward.

“We’ve had some great uptake because the issue for a lot of insurers looking to get into this market is that it’s very different from what they’re used to dealing with,” he said. “They need to understand the real risks and challenges so they can design products that will work and that will sell at the end of the day. So having a partner on the ground that is working in the communities, and working with NGOs across the piece, and across countries such as Uganda, is very interesting for them.”

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