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Global natural disasters have caused more than $117 billion in economic losses for the first half of 2024, a report published by global professional services firm Aon found.

Aon’s “Global Catastrophe Recap: First Half 2024” report noted that the total was notably lower than the $226 billion in economic losses recorded in the first half of 2023. It was also lower than the 21st century first half average, which was $137 billion.

The report, which was published by Aon’s Impact Forecasting team, also found that the recorded global insured losses for the first half of the year were at least $58 billion. This was higher than the 21st century first half average of $39 billion but was lower than what was recorded in the last three years, which exceeded $60 billion by the end of June.

The report further found that the total number of fatalities caused by natural catastrophe events was estimated to be more than 6,000, which was the lowest recorded number since 2020. The insurance protection gap was also estimated to have lowered to 50%, which was caused by the elevated insurance payouts for US severe convective storm (SCS) damage.

“It is great to see a lowering of the global protection gap, which is a result of the high levels of insurance coverage for the SCS events observed in the first half of 2024,” said Michal Lörinc, head of catastrophe insight at Aon.

“However, the re/insurance industry needs to continue its efforts to increase levels of insurance in emerging markets, through provision of not just capital and capacity, but also advanced data and analytics, which help to qualify and quantify the risk, and ultimately shape better decisions.”

The report further found that natural disasters in the US accounted for almost 80% of the global insured losses in the first half of 2024 as it reached nearly $46 billion. There were 30 economic loss events in the first half of the year that cost more than $1 billion. About 22 of them occurred in the US, two in South America, four in Asia, and two in EMEA.

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Global reinsurer PartnerRe has entered into a strategic partnership with Banyan Risk, a specialty managing general agent, to write excess casualty insurance, subject to approval by the Bermuda Monetary Authority.

Under the collaboration, PartnerRe will provide capacity and shareholder support for the launch of a new subsidiary called Banyan Excess Liability Ltd. (BELL). It will be based in Bermuda and sit under the Banyan Risk Ltd operation with a sole focus on excess casualty insurance.

BELL will be led by Alan Rodrigues, who was appointed CEO. He will be responsible for providing client solutions to the excess casualty market, which currently faces a challenging environment.

Rodrigues will build out a local team in Bermuda, reporting to the BELL board of directors.

Rodrigues brings to the role nearly 40 years’ experience in excess casualty, with oversight of billions in gross written premium.

Prior to joining BELL, he served as executive underwriting officer for casualty, leading Markel Specialty’s broad casualty business, including the Bermuda market.

Previously, he spent 13 years at AXIS Capital in London, Bermuda, and the United States. He also has a 16-year experience with General Star Management, a general reinsurance company.

Rodrigues began his career at Safeco Insurance in 1985 as a casualty underwriter.

His new responsibility, BELL, marks an expansion into a new Banyan product line, following the 2021 launch of Banyan Risk Services Ltd. In Canada.

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It’s a volatile time for the UK cyber insurance market, which saw double-digit rate drops continue in the first quarter of 2024, marking the second consecutive quarter the market experienced rate reductions to that extent.

However, there’s a contradiction at the heart of the increasingly ‘buyer-friendly’ nature of the market amid the reality that cyber threats remain significant and insureds are continuing to experience large ransomware and privacy losses.

Offering his insight into what’s happening, Gareth Bateman (pictured), cyber growth leader at Marsh in the UK, highlighted that these softening market conditions started gaining traction in the tail-end of 2023. “The trend has continued into this year with rate reductions, opportunities for buyers to reduce their retention, with most buying increased limits because they’re keeping the spend the same with rates coming down and so are reinvesting in increasing the size of their programme. It is a bit of paradox because, in the threat environment, we’re not seeing any letup at all.”

What’s underpinning the current environment?

Two key considerations are driving the current market environment – an abundance of capacity and intense competition among insurers, and the strengthening cyber risk management of UK companies. On the latter, Bateman noted that over the last couple of years, understanding of what controls are needed to defend against ransomware attacks, and what constitutes good cyber hygiene and maturity has proliferated throughout insureds, creating a better risk pool.

“Candidly, the biggest driver at the moment is competition between insurers,” he said. “Most of them are perceiving a rate environment that’s adequate for the risk so they want to write more business. Almost all of the 50 or so insurers in the UK market are hungry at the same time and they’ve got broad appetite. Programmes are over-subscribed, and the pricing environment is something which insureds are focusing on, which is driving competition in terms of rate.”

Creating a sustainable cyber insurance ecosystem

While it’s easy to dismiss competition as being healthy for a marketplace, Bateman emphasised the need for current market conditions to start levelling out if the cyber insurance sector is to be sustainable in the long term. From working closely with clients and having insight into their buying habits, he said, it’s clear that they want predictability and sustainable rates. What’s worrying him and his team is that some of the renewals which have registered double-digit percentage savings might not be available next year.

Rapid spikes, in either direction, of premium are not a sign of a stable or a sustainable market – and it is sustainability that clients are looking for, and which the insurance market should be looking to deliver. With regards to the long-term sustainability of the market, Bateman noted that while he doesn’t expect to see an erosion of the sector’s capital base, it undermines the credibility of the market to have significant volatility year after year.

That’s particularly true for a product which is a discretionary spend, he said, and it’s accentuated by the fact that a lot of businesses are still trying to understand cyber risk in the context of their own organisation. Even if they operationally understand what technology or data will knock out their operations if it’s compromised or encrypted, the next challenge is trying to quantify that knowledge in terms of its impact in dollar terms. That’s where having the right expertise and the right tools is critical because it enables clients to visualise their risk environment and loss profiles in a meaningful way. 

“Generally, there is a recognition across businesses that they need to get to this stage in order to understand what risk management strategy is the most appropriate,” he said. “Because until you quantify it, it’s very hard to make decisions and to prioritise.”

Opportunity in the cyber insurance market

The level of cyber awareness and hygiene differs substantially depending on what segment of the market you’re assessing. In heavily regulated or consumer-facing sectors, whether that’s pharmaceuticals or financial institutions, there’s a high penetration of cyber insurance because ever since the rollout of GDPR, they’ve understood the need to protect against data breaches. However, when you look at the smaller, mid-market segment, penetration rates remain perilously low.

For Bateman and his team, that’s where the real opportunity resides for the cyber insurance market – and brokers in particular – to shine. They have spotted real room to grow in that segment, and to build and develop a new customer base, rather than just looking to sell more coverage to existing customers.

It’s a very difficult conversation, he admitted, because these organisations are often going through a budgeting cycle that might take nine months. With the rate environment being what it is, it will probably be completely different at the end of that cycle, making it very difficult for the risk manager to have the right conversations with the CFO, and the CFO can’t have the right conversations with the board. But these conversations do need to be had regardless because cyber is a mission-critical risk.

Taking Marsh’s statistics as a bellwether for the wider market, it’s interesting to see how the book is growing.

“In some regions like Latin America and some parts of Asia, we are seeing increased flow of business, where there’s obviously adoption going on,” he said. “But even in the UK market, the opportunity is still significant in terms of new buyers. I think the recognition of cyber risks is growing.

“So, there’s a market of buyers who recognise the risk, and there’s a market ready to offer it which is hungry for the premium. It comes back to that credibility point – about communicating the breadth of the product, creating greater transparency and trust, and creating greater stability in the pricing environment.”

In his last Press briefing as CEO of Flood Re, Andy Bord (pictured) had a clear message for the insurance industry – to be bold, creative and committed when it comes to the “world-first initiative” that is Build Back Better.

During a discussion on Flood Re’s Annual Report – which saw the number of policies ceded to the Scheme increase 9% to 288,567 – Bord underscored that Build Back Better is a personal cause for him and one he is very proud to see so widely supported by the market. “Over 70% of insurers are now offering Build Back Better but we need to see that number change,” he said. “We need to see it get to 100% so it just becomes normalised.

“My call to insurers is to embrace that and for those that don’t yet offer Build Back Better to do so as soon as possible and join the rest of the pack. But Build Back Better only matters if, as well as being eligible for it, when the rubber hits the road and an actual claim is experienced, the customer has a conversation with their insurer about being built back better.”

Build Back Better in action

Storm Babet was the first real test of this in action, Bord said, with an average of 30% of the resulting claims ceded to Flood Re utilising an element of the initiative. Offering a personal perspective, he said it’s very difficult to see why virtually all of these claims – which were ceded to Flood Re as a result of being high-risk – didn’t contain an element of being built back better.

“We want to see, in subsequent events, that 30% being far closer to 100%,” he said. “That’s certainly my ask on insurers. It has been great how Build Back Better has been embraced but there’s more to do to make sure 100% of insurers are offering it and that when their customers get hit by the trauma that is flooding, this conversation takes place at the right time.”

The requirement is there for the insurance industry, in conjunction with the government, to act quickly and decisively when it comes to embracing the full potential of the Build Back Better initiative. This potential was on full display at the RHS Chelsea Flower Show 2024, where Flood Re unveiled the prize-winning Flood Resilient Garden. It was a proud moment for the team, Bord said, and one that gave it the opportunity to speak with a whole different group of customers about the importance of flood risk adaption.

How to advance industry adoption of Build Back Better?

As to what’s holding elements of the industry back from embracing the initiative and how other insurers might be brought along on the journey, Bord emphasised that it’s still a relatively new offering.

“The fact that 70% of insurers are offering it and, when we have had claims, 30% of them have had Build Back Better attached is a positive,” he said. “My observation is that it’s not enough, yet… I’m taking the slightly more holistic view that why wouldn’t the vast majority [of insurers] be eligible for having conversations with their customers that make them more resilient into the future?

“We’re talking to insurers at the moment, and surveying across the insurance space based on a very specific set of questions around the claims incurred – by Babet in particular – about the Build Back Better experience, what went well and what was more challenging. That’s how we can actually seek to influence best practice, from a positive place of knowledge rather than speculation.”

Bord highlighted that Flood Re is aware that the right thing to do is to maximise the number of homes that are better protected if they are at risk of flooding. If they’ve been ceded to the scheme, de facto, they are at risk of flooding, he said, and so it’s hard to understand why they wouldn’t take advantage of the initiative. The hope is that this research will quickly yield intelligible insurance that the team can use to encourage insurers to act on that information.

Mandating Build Back Better?

Interestingly, he said, data around Build Back Better and its effectiveness is something that the new government has already asked Flood Re for further information on, so the future is looking positive. As to whether Build Back Better might eventually be mandated both at the point of repair and as part of the planning framework, Bord expressed his hope that Build Back Better becomes normalised rather than mandated.

“I’m also optimistic, because of what I know that insurers can do, that it doesn’t have to be mandated to get that outcome,” he said. “I think it’s the opportunity for insurers to step forward on both counts – for those insurers that don’t currently offer it to accelerate their development so that they can offer it…

“And then when flooding does take place, to really be challenging themselves as to make sure their repair network and supply chain is aligned around the premise that Build Back Better is likely to be required, rather than being seen as the exception that then needs to be bolted on.”

This article was provided by Tony Buss, CEO of ARAG UK

Our recent surprise general election inevitably kicked a swathe of legislation off the parliamentary agenda and into the long grass. How much of it the new government will dig out and seek to pass remains to be seen but, whatever priorities they may have, the in-tray awaiting incoming Justice Secretary Shabana Mahmood, was also overflowing.

The Terrorism (Protection of Premises) Bill, otherwise known as Martyn’s Law, is perhaps the highest profile piece of legislation that the government didn’t manage to rush through in the ‘wash-up’ period, before the last parliament was dissolved. Before the election, Kier Starmer restated Rishi Sunak’s promise to introduce the legislation “at the earliest opportunity”.

The Football Governance Bill, which will create an independent football regulator, also seemed to have broad cross-party backing, but failed to make the cut. As did the Tobacco and Vapes Bill, for which the new government had similarly shown support, in opposition.

Add to these the much-anticipated Renters (Reform) and Criminal Justice Bills, not to mention the planned sale of the state’s remaining stake in NatWest Bank, and there’s plenty to consider, quite aside from whatever legislation the new government wants to introduce.

But legislation is only one side of the justice equation. The widespread and almost catastrophic failures in the administration of justice make a mockery of any attempts to create new law. What is the point of laws if you cannot effectively apply and enforce them.

Considering the seriousness of the situation, there was surprisingly little discussion of our failing justice system in the run-up to the election, though all of the major party’s manifestos addressed the issues to some extent.

Inevitably, the focus of those comments and commitments was the chronic and widespread dysfunction in our criminal courts, where backlogs and delays are ruining and even risking lives, and voters’ imaginations are always more easily captured.

But the problems in civil justice are just as extensive and the consequences, while perhaps not as serious or easily explained as criminal court delays, are significant.

Billions of pounds are tied up in money claims, for which backlogs were mounting before the pandemic and have only continued to increase. The cumulative drag this creates on the economy is almost impossible to quantify but delays undeniably cause major headaches for businesses.

Employment tribunals understandably fall some way down the pecking order, but the financial drag on businesses of all sizes waiting more than a year to resolve disputes with current or former employees is significant too.

The justice system has also been impacted by underinvestment in other areas, such as the NHS. The Birth Trauma Report, published in May, very briefly brought the unconscionable state of maternity services to national attention.

Maternity scandals at specific trusts, such as Shrewsbury and Telford, East Kent, Cwm Taf and Morecambe Bay have hit the headlines from time to time, but the Birth Trauma Report has highlighted what many already suspected.

These trusts may each have had their own particular problems, but the causes seem to be endemic across the country. Time and again, reports have detailed shortages of both equipment and staff, inadequate funding for training, cultures of bullying, secrecy and denial.

Quite aside from the terrible human cost and the huge financial burden this puts on the NHS and other services, these failings push thousands of long and often highly complex cases into a justice system which really doesn’t need the extra work.

The national purse strings will obviously be tight for some time, and the challenges facing the courts and the NHS are unlikely to be solved overnight. But both offer a tempting mix of quick dividends and huge, longer-term benefits.

It’s inevitable that newly elected legislators will want to legislate, but justice will be better served if we can have more courts open, or at least hear more cases in the ones that are available.

A glance down any high street in the UK serves as a reminder of the critical role small-to-medium enterprises (SMEs) play in creating varied and sustainable communities.

However, all too often, it’s easy to think of risk in the context of large corporates – whether it’s around cyber, business interruption, climate change or economic uncertainty. The reality, however, is that SMEs account for 61% of UK employment, according to UK Parliament statistics released in May this year, and the onus is on the insurance industry not just to cover the risks facing these businesses today, but also to evaluate how they are evolving amid broader financial, technological and geopolitical considerations.

This is where the role of the insurance broker comes into its own as they look to support their customers by ensuring they’re obtaining coverage terms that match their evolving risk profiles. But between inflationary and cost-of-living pressures, the need to find the right terms and conditions at the right price is more pressing than ever – and SME brokers are on the frontline of navigating that balancing act.

The digitalisation challenge facing brokers

Among the top challenges impacting brokers today, digitalisation and the advancement of new digital technologies are a core consideration. Faced with the requirement to adapt to and utilise these technologies so they can meet customer expectations, stay ahead of emerging digital risks and adjust to the changing regulatory environment, brokers require more support than ever in order to remain competitive and support their SME clients.

From her perspective as SME portfolio director at Aviva, Rebecca Gambrell (pictured) is seeing that brokers are increasingly looking to expand their digitalisation strategies. She noted that it’s incumbent on insurers to engage with these brokers and to set up the right support channels to help them understand which risks they can place digitally.

As with operational change, the speed at which brokers are embracing this digitalisation journey varies from one to another. For some, this is a monumental step-change in the way they do business – while for others, it’s just the next step in a wider digital transformation strategy. “With smaller brokers, they’re actually more engaged because it makes everything more efficient for them.

“Sometimes it’s harder when you’ve got a larger broker but, again, it’s about having the right conversations with them and helping them along that journey…  [As an insurer], the answer is to make ongoing investments into your digital products and to keep them up to date. And that’s where broker engagement is key because that’s how you understand where they’re having difficulties and help to take those away.”

Underinsurance and its impact on SMEs

Another pressing challenge facing the insurance broking sector is the growing spectre of underinsurance as the cost-of-living crisis is further compounded by concerns around data quality and maintaining effective communications with clients. Aviva’s recent Broker Barometer survey revealed three in four (73%) brokers worry about clients being underinsured, with inflationary pressures cited as a primary cause.

With millions at risk of underinsurance, offsetting this risk is clearly going to require a new tool in brokers’ toolkits – with data-driven insights fast-emerging as the most likely solution.  For Aviva, this saw the introduction of a new quotation tool, leveraging Named Entity Recognition and GenAI to analyse brokers’ commercial SME presentations.

Having the right partnerships across the insurance ecosystem is also instrumental to ensuring that brokers are equipped with the right tools, products and solutions to support their insureds, and for Gambrell and her team, keeping these partnerships healthy, transparent and evolving is key. “We recognise that at the end of the day, it’s brokers who are there to advise the customer and support them in their insurance needs,” she said. “So, we need to do everything we can to make that easier.”

The Bermuda Monetary Authority (BMA) confirmed the registration of two insurers in June, taking the yearly total to 26 insurers.

In the same month, the BMA also registered six intermediaries, including two in June.

The BMA registered Lincoln Pinehurst Reinsurance Company (Bermuda) Ltd in Class E last month, the Royal Gazette reported.

Also in June, the financial services regulator registered Acrisure Bermuda Ltd as a broker, Scenery Re Ltd in the Restricted SPI category, and Mt Logan Capital Management Ldt as an insurance manager.

According to the report, the BMA’s Insurance Assessment and Licensing Committee reviewed four insurance applications last month, consisting of three new applications and one carried forward.

All of the applications were approved.

The BMA noted that the registration and licensing of approved insurance entities is issued after the IALC application process. They may then be confirmed in future periods.

The reinsurance company, Lincoln Pinehurst, is a subsidiary of American life and annuity insurer, Lincoln National.

Meanwhile, broker Acrisure Bermuda is a full-service reinsurance intermediary and capital management advisor providing tailored risk transfer solutions for its clients.

Scenery Re is a special purpose insurer, while Mt Logan Capital Management is an insurance manager.

The recent registrations bring the total number of insurance entities registered in 2024 to 32, of which 26 are insurers and six are intermediaries.

In 2023, the BMA registered a total of 67 insurers.

On July 9, Zoë Foundry, a venture studio located in Redwood City, Calif., secured a $5 million investment. This infusion of capital, spearheaded by Principal Financial Group and Reinsurance Group of America, Incorporated (RGA), is set to accelerate Zoë Foundry’s mission to transform the employee benefits sector, the firm said.

As the first venture studio entirely focused on the employee benefits ecosystem, Zoë Foundry employs a structured, data-driven approach to develop and launch startups within the insurtech field. Since its inception, the studio has been backed by experienced founders and advisors, marking a period of robust growth and successful company launches between 2012 and 2022.

This new partnership with Principal and RGA will enable Zoë Foundry to expand its operations and further invest in its emerging portfolio companies, the firm said. The studio plans to launch three startups each year, concentrating on sectors like software-as-a-service (SaaS), business-to-business (B2B), and artificial intelligence (AI) technologies.

 Zoë cited two examples from its existing portfolio, SlainTech and Bentection, that the firm said illustrate its capacity for impact. SlainTech is dedicated to automating small group health portfolios, whereas Bentection has developed tools aimed at enhancing executive benefits sales. Both ventures have established their market viability through impressive growth in customer base and revenue generation,  Zoë said.

Kara Hoogensen, the senior vice president of workplace benefits at Principal, lauded the initiative, aligning it closely with Principal’s strategic goals to broaden access to cutting-edge solutions. Similarly, Dean Abbott, senior vice president at RGA, emphasized the collaboration’s promise to further propel advancements in the insurtech sphere.

The leadership team at Zoë Foundry, comprising CEO Garrett Viggers, COO/CIO Jason T. Andrew, and CTO Jonathan Mulieri, brings together over two decades of expertise in the employee benefits industry.

Do you have insights or opinions on this development in the employee benefits sector? Share your thoughts below.

The evolution of Brokerslink is testament to the idea that you can’t have a strong building on weak foundations. Two decades into its growth story, the business has grown in every direction, now serving 133 countries and commanding some $70 billion in premium, but it has never lost sight of the purpose at its core – to create a truly international business and a “human” broking community.

Discussing the firm’s growth trajectory in celebration of its 20-year anniversary, the group’s CEO and president José Manuel Fonseca (pictured) shared how it was another two-decade anniversary that sparked the firm’s creation.

At the time a relatively small player in the Portuguese broking market, MDS had recognised the opportunity to bring together businesses to prevent international clients from going to “the usual suspects” of the large corporates. Its 20-year anniversary provided the perfect opportunity to bring together colleagues and partners from across the market – among them brokers from France, Spain, Portugal, London and Brazil.

Working with his marketing team, Fonseca designed a draft logo, branding scheme and brochure, and invited the brokers for a lunch, where he discussed the potential power of such a partnership. “We started to talk about it all, and they asked me what the next steps would look like,” he said. “So, I opened up my suitcase and brought out the brochure, the branding, the logo – and Brokerslink was born that day. This was in June 2004, and, at the time, we didn’t really have a vision of what Brokerslink could become but we had a lot of ambition.

“Our first meetings were very much just us meeting in rooms. But then we started to seduce other brokers from different countries. We started with Europe, and brought in some from Switzerland and the UK. At the time it was not so easy to convince other brokers to join us because there were already some other networks in the market, but these were very US-driven.”

Key milestones on the Brokerslink journey

The group was growing steadily when it hit the accelerant that was partnering with the PanAsian Alliance which closely shared its model and ethos, Fonseca said, and then, a year later, with a LATAM-based regional network. The partnership between the three networks soon saw members sharing business, clients, insights and best practices albeit in a largely unstructured way.

The next step in its evolution saw the group merge and rebrand its three networks in 2008, before adding a US broker in order to fulfil its ambition of being a “truly global network”.

The second phase meant becoming more structured and formalised, a move which saw Fonseca become chairman and CEO. Still, he was conscious of industry perception. “From the beginning, it was very important for the DNA of Brokerslink not to be seen as being led by a Portuguese broker just because it was started in Portugal,” he said. “We are very different to our competitors in the US or the UK because we don’t have a centre and that works very well for us, because it means our members don’t see us as a threat or someone looking to control and lead them.

“In 2015/16, we decided to transform Brokerslink from a formal, legal association of partners into an equity-based company. We incorporated in 2016, becoming a Swiss company and inviting our members to invest and buy shares in Brokerslink, which was a very important moment. It really distinguished us from our peers because we’re now a company owned by 55 shareholders from all the continents.”

What’s next for Brokerslink?

From day one, the objective was to make Brokerslink more than just a network of insurance brokers, Fonseca said, and to create a healthy microsystem of collaboration.

With well over 45,000 colleagues across 133 countries and a strong presence in every continent, he believes that ambition has been fulfilled but the journey doesn’t stop there. “We’ve built the infrastructure, we’ve built the brand,” he said. “But our target is permanent – we’re always looking to improve the network all the time, to make it the best it can be which sometimes takes some fine-tuning to control the quality of the network and its service. We’re also looking to expand into any markets where we are not, and to invest in our teams and capacities to add more and more value to our members.

“[…] We’ll go on investing in our marketplace with new products, new facilities and new solutions for our members. We’re going to go on building a very human community which our members love to be part of and have a strong sense of belonging and exclusivity. Building out our ecosystem is a never-ending story as we look to continue to find new solutions to help our members go on building for the future.”