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Argo Group reveals Q3 2021 results

Operating income in the quarter, meanwhile, stood at US$31.7 million. The corresponding figure a year ago was an operating loss worth US$10 million.

In the nine months ended September 30, Argo enjoyed US$114.1 million in net income attributable to common shareholders. Last year, the insurer was hit with a net loss attributable to common shareholders of US$55.2 million.

Also, operating income in the first nine months reached US$103.4 million – an improvement, as well, from the US$1.1 million operating loss incurred previously.

“Argo continues to pursue profitable growth, improve underwriting margins, reduce volatility, and maintain disciplined expense management,” said chief executive Kevin J. Rehnberg, whose team announced a revamped management structure in August. “The successful implementation of our strategy is evidenced in our financial performance.

“As we continue to optimise our business mix, the underlying strength of our core lines of business is more clear. We are particularly pleased that our efforts to reduce property catastrophe exposure have led to a significant improvement in our results, against the backdrop of the elevated catastrophe losses the insurance industry experienced this quarter.”       

Argo’s total catastrophe losses in Q3 were US$27.3 million, a significant decrease from last year’s US$71.2 million.

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Marco continues buying spree with Capita double-deal

Subject to regulatory approval, the transaction will bring Marco’s headcount to more than 300 insurance specialists, over 250 of which are from CCIS in London and Cheltenham. CCIS provides outsourced business processes in areas such as underwriting support, claims management, and client finance.

CMA, meanwhile, has been described as one of only two independent turnkey providers at Lloyd’s, catering to both live and run-off syndicates. Its expertise spans business planning support, underwriting, actuarial and reserving, and regulatory compliance.

It was noted that the 2020 profit before tax for the businesses stood at £5 million.

“This is the seventh exit we have announced in the past 12 months,” said Capita chief executive Jon Lewis, whose camp is targeting £700 million of non-core disposals proceeds by June of next year. “I am really pleased with this progress.

“Today (November 02) is another step towards a more focussed and sustainable business for the long term. Further progress on disposals will be announced as and when appropriate.”

Marco, meanwhile, considers its latest swoop transformational.

“I am delighted to announce the acquisitions of CCIS and CMA,” commented Marco CEO Simon Minshall. “These two long-established businesses have tremendous growth potential in their core markets, and Marco Capital will provide financial and other support to achieve this potential.

“While these businesses will operate on a standalone basis independently of Marco’s core legacy business, they will substantially increase Marco’s operational capabilities as Marco will become a client of both companies – starting with CMA which has been appointed as managing agent for Marco’s new syndicate to be established at Lloyd’s and later contracting with CCIS for technical support services.”

Headquartered in Malta, Marco provides reinsurance and finality solutions to (re)insurance carriers. It is supported by €500 million initial committed equity capital.

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Generali edges towards takeover of Italian rival

Generali edges towards takeover of Italian rival

International insurer Assicurazioni Generali has announced that it has launched a voluntary tender offer on all the shares of Italian insurer Società Cattolica di Assicurazione SPA.

As a result of the shares tendered to thae offer, Generali will hold a stake exceeding 66.67% of the share capital of the issuer with voting rights.

The offer will be promoted exclusively in Italy and will be addressed on equal terms to all Cattolica shareholders, Generali said.

The offer will not be made in the US, Canada, Japan, Australia or any other jurisdictions where making the offer would not be allowed without approval of the relevant authorities, Generali said.

Generali has been seeking to take over Cattolica, according to a Bloomberg report. The global insurer edged closer to its goal last month when Warren Buffett’s Berkshire Hathaway agreed to sell its 7% stake in Cattolica to Generali.

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Lycetts celebrates 60 year anniversary

“Sixty years in business is a remarkable achievement and is testament to the dedicated work of our staff and long-standing relationships that have been fostered and nurtured for more than half a century,” said Lycetts chief executive Charles Foster.

Foster added that while the company is proud of the way it has adapted to the times, Lycetts is “equally proud” of its heritage.

“Maintaining high standards of personal service, creating innovative products, and employing staff who can readily empathise with clients sits at the core of our business and these fundamental values have ensured Lycetts’ sustained success and close client relationships through several generations.”

To mark its 60th anniversary, Lycetts will be giving away a pair of diamond earrings in a special free prize draw. The winner of this contest will be announced in November. The broker has also commissioned a short film, and will be launching a new charity of the month initiative.

For the charity of the month initiative, Lycetts will support charity causes nominated by its staff. Charities that have been nominated include the Percy Hedley Foundation, CHUMS, Racing Welfare, The Woodhorn Charitable Trust, RSABI, Coats for Kids, The Country Food Trust and Learning for Life.

“Giving back is at the heart of Lycetts’ culture and ethos and we are committed to supporting the charitable causes that are important to both our staff and our clients,” said Foster, who added that all of Lycetts’ available profits go to the Allchurches Trust Limited, which invests the money back into the community.

The Allchurches Trust Limited has invested more than £50 million to projects across the UK over the past five years, the chief executive highlighted.

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Arch, Everest Re publish Q3 2021 numbers

Arch, Everest Re publish Q3 2021 numbers

Bermuda-headquartered insurers Arch Capital Group and Everest Re Group have announced their third quarter results – one of them reporting a loss while the other sees a dip in earnings.

First off, Arch’s net income available to common shareholders fell from US$408.6 million in Q3 last year to US$388.8 million this time around. Available after-tax operating income (or excluding the results of Watford Holdings), meanwhile, grew from 2020’s US$120.3 million to US$294.7 million in the quarter ended September 30.      

In terms of operating segments, both the insurance and reinsurance operations suffered underwriting losses. The group’s consolidated (including the mortgage segment) underwriting income, however, amounted to US$173.7 million.

As for Everest, the group was hit with a net loss worth US$73.5 million. In the same quarter in 2020, Everest enjoyed a net income of US$243.1 million. Additionally, it previously posted a net operating income of US$97 million; in Q3 2021, the corresponding figure was a net operating loss of US$52.6 million.

Inclusive of catastrophe losses from Hurricane Ida and European floods during the quarter, Everest’s underwriting loss stood at US$323.4 million. Catastrophe losses for the group’s reinsurance segment totalled US$555 million net of recoveries and reinstatement premiums; insurance segment, US$80 million.  

“Despite the high frequency and severity of the natural catastrophe activity in the quarter,” said Everest president and chief executive Juan C. Andrade, “we also benefited from the de-risking of the CAT portfolio and we remain on track to achieve our total shareholder return objective.

“We continue to consistently demonstrate our ability to relentlessly execute against our plans regardless of the external environment.”

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AXIS Capital posts Q3 results

AXIS Capital posts Q3 results

AXIS Capital Holdings has announced its financial results for the third quarter. The company reported net income available to common shareholders of $47 million (approx. £34.12 million), or $0.56 per diluted common share. That’s compared to a net loss of $73 million, or $0.87 per diluted common share, for the third quarter of 2020.

Net income available to common shareholders for the nine months ended Sept. 30 was $391 million, or $4.59 per diluted common share, compared to a net loss of $146 million, or $1.73 per diluted common share, for the same period last year.

Operating income for Q3 was $1 million, or $0.01 per diluted common share, compared to an operating loss of $65 million, or $0.77 per diluted common share, for the third quarter of 2020. Operating income for the nine months ended Sept. 30 was $254 million, or $2.98 per diluted common share, compared to an operating loss of $158 million ($1.88 per diluted common share) for the same period last year.

Adjusted for dividends declared, the book value per diluted common share increased by $0.22, or 0.4%, compared to June 30. It has increased by $1.79, or 3.3%, over the last 12 months.

Albert Benchimol, president and CEO of AXIS Capital, said the industry has been impacted by severe weather events this year.

“In the face of these challenges, we continued to deliver, accelerating momentum in our progress, highlighted by eight consecutive quarters of year-over-year improvement in our combined ratio ex-cat and weather,” Benchimol said. “Notably, AXIS generated net operating income for the quarter, and our lower market share of the events demonstrates the progress that we’ve made in reducing our net exposure to catastrophes. Our results were underscored by strong top-line growth, disciplined underwriting, and solid investment income.”

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Fidelis opens new London trading floor

Fidelis opens new London trading floor

The ‘Forum’, Fidelis Insurance Holdings Limited’s (Fidelis) new state-of-the-art trading floor, is now open at 37-39 Lime Street in London.

“The opening of our new trading floor highlights our absolute commitment to providing the face-to-face service and decision-making that our brokers and clients demand and deserve,” said Richard Coulson, the group’s insurance chief executive and Fidelis Underwriting Limited chief underwriting officer.

“This unique facility is another important step for our company at this transformational time, and I look forward to watching this space become a primary market trading hub and facilitator of countless successful transactions going forwards.”

The new trading floor will be used by Fidelis and its managing general agent platform Pine Walk Capital. The latter manages the likes of Kersey, Navium, Oakside, Perigon, and Radius. Brokers will be able to meet with all the abovementioned MGAs, as well as with Fidelis underwriters, actuaries, and wordings and claims specialists across 57 lines of business.

Commenting on the move, Pine Walk Capital CEO Rinku Patel stated: “The Pine Walk Group are delighted to take our next step in our growth as we enter our fifth year. It’s been a big year so far for Pine Walk, since Navium joined, and we’re looking forward to welcoming our clients and the continued broker support.”

The Forum is operational with immediate effect.         

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Autumn Budget 2021: Insurance industry reacts

In a statement, the British Insurance Brokers’ Association (BIBA) said it welcomed “the fact that [the chancellor] is leaving the rate of the IPT untouched.”

“This is some comfort to insurance customers already facing premium increases for a variety of external reasons,” the association said. “However, tax remains a significant proportion of the cost of being responsible and we hope future spending reviews will recognise the road safety benefits of greater use of telematics-based policies by removing premium tax on these to increase their uptake.”

BIBA added that removing or reducing IPT on cyber insurance policies would help “improve uptake and broaden resilience,” given that only 6% of UK businesses have a specific cyber insurance policy in place, citing the government’s latest cyber security breaches survey.

The Association of Medical Insurers and Intermediaries (AMII) also expressed relief that Sunak did not raise the IPT rate but pledged that the group would continue to lobby for lower-rated healthcare products.

“We will continue to lobby hard that healthcare costs should be zero-rated for IPT purposes in line with other protection and general products, as they make an equally valuable contribution to the health of the nation and the UK economy,” said Dave Middleton, executive chairman of AMII.

Read more: What did Budget 2020 bring for the insurance industry?

Here is a summary of some of the key points in Sunak’s speech and what key insurance industry players are saying:

Taxation and universal credit

Sunak announced that the universal credit taper rate would be slashed from 63% to 55% no later than December 01, allowing claimants to keep more of the payment. The government would also increase work allowances in universal credit for low-income households by £500 a year.

Group Risk Development (GRiD), the industry body for the group risk sector, welcomed this development, saying this meant “not only that ‘work pays’ but also that group income protection pays for those whose employers provide a continued income in the event that they’re unable to work for a prolonged period through illness, injury, or disability.”

Housing

The government has earmarked £24 billion for housing, including £11.5 billion for up to 180,000 affordable homes, with brownfield sites targeted for development. A 4% levy will also be placed on property developers with profits over £25 million to help create a £5 billion fund to remove unsafe cladding.

“We welcome the government’s multi-year housing settlement, including its commitment to building new homes by regenerating brownfield sites across the UK,” said Claudio Gienal, chief executive officer of AXA UK and Ireland. “As we enter a new and exciting phase of building, which will include more focus on sustainability and greater use of modern methods of construction, it is imperative that the planning system and building regulations are redesigned to place safety and resilience of UK housing front and centre.”

Gienal added that failure to do so “risks repeating the mistakes of the post-war era.”

“[These include] building homes and infrastructure unfit for future generations, which must be pulled down or adapted decades later,” he said. “[Regulations] should include putting in place a legal duty for all developers to consider the insurability of buildings at all stages of the planning process.”

Read more: Threat of shouldering cladding costs haunts residents after Grenfell

Public services recovery

The government plans to spend more than £8 billion for a major catch-up programme that will help the National Health Service (NHS) provide elective care that was delayed due to the pandemic. This will be supported by a £5.9 billion capital investment, allowing the NHS to tackle the backlog of non-emergency procedures and modernise digital technology.

Middleton said he was delighted to see the chancellor “injecting much-needed resources into tackling record-breaking NHS waiting lists” but admitted more could have been done to incentivise the NHS and private healthcare sector.

“The measures he has announced are unlikely to solve the unprecedented issues facing the health service and, while subsidised private health insurance would, without doubt, reduce the burden on the NHS, it is a real shame that there seems to be no appetite within government to consider this,” he said.

Flood maintenance

To reduce the likelihood and impact of flooding, the government has reaffirmed doubling

of investments in the Flood and Coastal Erosion Risk Management (FCERM) programme. The £5.2 billion investment is meant to better protect 336,000 properties across England from flooding. The government will also invest an additional £27 million to support flooding incident and emergency response activities and an additional £22 million each year for the maintenance of flood defences.

“We were delighted to see that government is committed to an additional £22 million each year for the maintenance of flood defences,” BIBA said. “We were also pleased to see that government is commissioning a new National Infrastructure Commission study, on the effective management of surface water flooding in England which will also consider the role of a range of interventions, including both traditional built infrastructure and nature-based solutions. We hope to work closely with government to help introduce more general and property specific resilience measures.”

Read more: Flood Re submits plan to reshape the flood insurance market

Skills

The government plans to raise government spending on skills and training by 42%, or around £3.8 billion. Sunak also confirmed the future launch of a UK-wide numeracy programme that will help 500,000 adults improve their numeracy skills.

“We welcome the government’s commitment to skills provisions and education funding as part of levelling-up opportunities across the country,” Genial said. “However, the government must go further and faster in identifying and solving the specific skills shortages the UK faces.

“Achieving the government’s objectives on key policy areas such as net-zero, housing, and the future of transport relies on rapidly developing a versatile workforce with the right skills. The government should create and implement comprehensive skills strategies in each of these areas to ensure there is the expert capacity necessary to deliver real progress in the years ahead.”

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CII reports shrinking gender and ethnicity pay gaps

The CII said its mean gender pay gap is now 14.81%, compared to 16.25% in 2020, while the mean gender pay pension gap is now 7.35%, compared to 17.37% in 2020. Its mean ethnicity gap is 25.43% in 2021, which is also the first year this figure was reported externally.

According to the CII, in the past four years, it re-evaluated roles to address any historic anomalies towards part-time workers, expanded the number of roles suitable for part-time and/or job sharing, adopted “anytime, anywhere” working, trained managers to recognise and overcome unconscious biases and committed to the Insuring Women’s Futures Financial Flexible Working and Inclusive Customer Financial Lives pledges.

Both employer and employee contributions were used in computing the gender pension gaps. More male (35%) than female (33%) employees make personal contributions to their pensions, but the proportion of females making a personal contribution has increased by 5% since 2020.

“The CII is committed to being diverse and inclusive, plus reducing the gender pay, pension gap and ethnicity pay gap,” said Sian Fisher, CII chief executive. “It is vital we continue to improve our understanding of the nature of the pay gaps and master the tools that can help us take the necessary steps to tackle the pay, pension, wealth and opportunity gaps that exist between the genders and different ethnic groups. I am proud of the steps we continue to take to tackle gender and ethnicity pay issues and particularly the improvements made. We continue to work on reducing the gender pay, pension and ethnicity pay gap and recognise the challenge of making further improvements next year.”

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Saga boss unveils rebrand, says perceptions must change

Sutherland said that the company must change in how it perceives older generations, preferring to label them as “experienced,” rather than just “old.”

He also noted the importance of tapping into this age group, especially the retirees who have saved the most as the pandemic shut down the economy.

Read more: Saga Group reveals new CEO

Sutherland also addressed the pandemic’s impact to the company, which has left its cruise ships unable to operate but needing to be continually serviced.

“These ships are like aircraft – they’re not meant to stop,” he told The Independent. “They’re meant to pose for the day and move on. So, we had to keep them functioning, including things like getting barnacles taken off the boat.”

Read more: Saga to suspend cruise operation amid coronavirus fears

Since restrictions have eased, however, the news outlet reported that cruise ships’ bookings have recovered, with 70% of those whose travels were cancelled due to the coronavirus outbreak retaining their bookings.

But Sutherland said there were concerns from customers that the cruise industry is still weak.

“I think there’s a perception issue potentially from non-cruisers, but from cruise guests there’s no problem, so there’s a real polarisation,” he told The Independent, adding that those who are booking are taking longer and more exotic trips and spending more money.

Sutherland also said that staycations, which gained popularity during the pandemic, would be unlikely to sustain demand as people are keen on leaving the country.

“I don’t see that the staycation is going to be a major thing,” he said. “The feedback from our customers is that they can’t wait to get away.”

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