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Open GI has expanded its partnership with Plum Underwriting by supporting its new enhanced household cover with Flood Re for UK brokers.

By utilising Open GI’s technology, coupled with data enrichment, Plum will be able to code risks in areas that would have been hard to offer cover. This gives brokers who are working with clients in exposed flood areas the opportunity to offer insurance cover. According to Open GI, it is the first technology company to offer this service to brokers.

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Gallagher’s overall revenues were down slightly at $2,012.0 million this quarter, from $2,105.6 million a year ago. But total revenues for the combined brokerage and risk management segments increased by 15%, including an organic revenue increase of 8.4%.

Brokerage earnings in the third quarter are at $282.5 million, up from $253.6 million a year ago. In the nine months of 2022. In the nine months of 2022, the brokerage segment earned $1.058.5 million versus $845.6 million in the same period last year.

The risk management segment also saw earnings rise, at $26.9 million in Q3 2022 versus $22 million in Q3 2021. For the nine-month period, reported net earnings is at $79.4 million, compared to $64.9 million a year ago.

However, the corporate segment saw a net loss of $52.4 million for Q3, adding up to a net loss of $155.9 million for the nine-month period.

Chairman, president and CEO J. Patrick Gallagher, Jr. said the firm’s outstanding performance has continued during the third quarter. He said in a statement: “Our third quarter renewal premium data shows global premium increases approximate 10.5%, a bit higher than the renewal premium change in the first half of the year. Price increases are mostly consistent with recent quarters across nearly all lines of business.

“Client exposures, including favourable policy endorsements, continue to increase, and new arising claim counts moved higher year over year; these metrics are not reflective of an economic slowdown in our clients’ businesses.”

Commenting on the results, Simon Matson, EMEA CEO said: “Gallagher’s UK business had an extremely good Q3 delivering strong organic growth at 15%. This is a fantastic achievement driven by outstanding results across all our trading division.

“Our Specialty division has had a very strong quarter and is significantly ahead of last year. Our property & casualty, aerospace and construction practices all performed very well and throughout the year have maintained double digit organic growth during each quarter.”

Matson also said Gallagher Re UK is on track to deliver growth with priorities including strategic hires plus development of its existing talent, combined with continued investment in data and analytics.

“Integration of the wider division has been a priority and we now have all London-based colleagues together in one location which will deliver the best service for clients,” Matson added.

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Educating businesses on the cyber risk they face without veering into the arena of scaremongering is a delicate tightrope that all successful cybersecurity firms must walk. But when you read a survey like the one recently conducted by Hornetsecurity which revealed that almost 24% of IT professionals say their organisation has been the victim of a ransomware attack – you realise the conversation needs to shift from “what if?” to “when”.

Find out more: Discover Hornetsecurity’s cybersecurity proposition today

Speaking with Insurance Business, Colin Wright (pictured), VP of EMEA at Hornetsecurity, warned of the need for the right, solution-led conversations around cyber risk to prevent ‘cyber fatigue’. Businesses need to understand the breadth of the risk they’re facing, he said, and the twin myths that need to be busted are – firstly, that it won’t happen to you and secondly, that the threat actors you’re dealing with are anything less than sophisticated and highly organised.

High-profile attacks on multinational conglomerates may dominate the headlines, he said, but a small business being targeted will inevitably be impacted to a greater degree due to the lack of resources at their disposal.

“The average downtime that we see is 22 days. Now imagine being down for 22 days with no access to your data or your network,” he said. “What is the impact of that on your business?… And these guys out there on the dark web are buying millions and millions of email addresses and they’re just taking a shotgun approach, knowing that somebody somewhere is going to click. It’s just a matter of time.

“Training individuals to know what to look out for is so important and we bought a fantastic technology called IT-SEAL that does security phishing training. But if you don’t have anything in place, somebody is going to click, and I term that the ‘Dracula moment’. Because the only way a vampire can come in is if you invite them over the doorstep. And that’s the same with ransomware – it will come in because we as humans are inviting it into our businesses.”

Read more: We’re in dire economic straits, but please don’t skimp on cybersecurity

From his perspective, Wright said, businesses are moving from a human pandemic into a rapidly evolving cyber epidemic – and it’s unsurprising given how reliant we all are on technology and our intangible assets, and how easy it is to get tripped up. A single letter in an email address is all it takes to fool somebody, and users simply don’t have the time to challenge every email.

Reports reveal that about 93% of ransomware threats come in via email, he said, but that’s not where the cybersecurity budget of many businesses is being directed. And because they’re not actively investing in such solutions, what a lot of businesses do not realise is it does not have to be expensive to protect yourself but is non-negotiable in a modern trading environment.

“I heard the other day at an event that 40% of companies, large and small, have no recovery plan from ransomware,” he said. “So, I would challenge everybody to look at that and think ‘what if?’ How will it impact your users, your business, your customers, your staff? Are you going to pay the ransom? Do you have cyber insurance?

“And cyber insurance is great but when you’re hit with ransomware, cyber insurance isn’t going to get your business back. It’s just going to give some money in two months but will you be back online in two months’ time? In fact, we recently ran a webinar that discussed this exact topic with an insurance expert that was very well received – it’s well worth a watch to learn more.”

It is with this conundrum in mind that Hornetsecurity is developing its ‘immutable storage’ solution. Immutable backup is a highly effective way to minimise the impact of a malware attack, he said, by locking up data every time a backup is made in a way that effectively throws away the key to that file. It’s a storage solution that is starting to be picked up by several vendors and Hornetsecurity is focusing on its implications for SMB clients.

Read more: What pressing cyber risks are currently facing UK businesses?

“The big guys can fend for themselves, they’ve got teams of people in place to support them, but why shouldn’t the smaller guys have access to the same level of protection? And it doesn’t have to be expensive,” he said. “Immutable storage really is the last line of defence in the terms of sealing the lock and throwing away the key but in a way so we can recover everything from that backed up file – you just can’t inject anything new in.

“I think the biggest challenge you’ll see to ransomware threat actors moving forward next year will be immutable storage, and they’ll have to find other ways to get into our systems. But I would say to anybody not backing up their environment that they’re not protecting themselves from any form of ransomware. It is the last line of defence – if you look at a Navy ship, they have cruise missiles and all the latest technology but along the sides, even the newest ones still have old-fashioned Gatling guns. And backup is the Gatling gun of protection from ransomware.”

Immutable storage is not just a solution for clients, Wright emphasised but also has significant implications for insurance companies. Insurers don’t want to be paying out high ransom payments, and he believes they should be actively exploring the cost-efficiencies and operational efficiencies afforded by immutable storage – and pushing that out if not mandating it for insureds. It’s a solution that protects everyone, he said, all allow the cyber insurance and cyber security chains.

Constant media reports of cyber incidents incapacitating businesses and organisations of every size and structure also exemplify why everybody should be carrying out regular backups, including on any collaboration platforms such as Microsoft Teams where users tend to share critical information

Wright advised constant testing of these backups, and working with the right providers to find the simple, accessible, affordable solutions that are available to help mitigate cyber risk.

There are lots of companies out there doing great work, he said, and he would happily validate users looking around to find the solutions that work best for them and their businesses. Of course, cost is a major consideration, particularly for SMEs in the current financial environment but he noted that at the core of this discussion is a simple fact – businesses cannot afford not to pay for the right solutions.

“It’s too expensive not to invest in this,” he said. “It’s too expensive to leave that door open. It’s about how much you value your data, your employees, your customers and your customers’ data – and its role in paying your bills and your mortgage. So, it’s finding the right fit for your particular business and we think at Hornetsecurity that we have solutions that fit from the very smallest customer to the very biggest.

“And I wouldn’t ever want anybody to walk away and not have protection without looking at technologies such as ours. I think the idea this has to be expensive is part of the misconception around the whole tagline of cyber. People hear about Microsoft being hit and think ‘oh my God, protecting against that has got to be expensive’. But it isn’t, it’s only expensive if you haven’t looked into what the solution is. And it becomes very expensive if your data disappears…  The impact of doing nothing is the biggest expense you are ever going to subsume.”

Find out more: Discover Hornetsecurity’s cybersecurity proposition today

Colin Wright joined the Hornetsecurity Group in 2016 to head up the EMEA sales team. He has a wealth of experience in technology sales strategy, having worked in the industry for over 20 years. Colin has an impressive track record for having nurtured the growth of a number of cloud and virtualisation-centred companies and has created a number of successful EMEA sales operations. He previously set up and led companies such as Veeam Software, Vizioncore Inc, Scriptlogic and Embotics.

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“They’ve done a cracking job, and for my part, it simply couldn’t have happened without what the team here has done,” he said. “I’m so proud of the way our staff has stepped up to help the transition of the two firms into our existing one, and of the development we’ve already seen.”

It has felt great to be able to share the good news across the wider market, he said, after keeping it under wraps while the processes and practicalities of the transitions were falling into place. The dual swoop is the group’s first foray into the M&A pool – and he emphasised the support the team had received both as an Aviva 110 broker and as part of Bravo Networks.

Read more: Insurance veteran Wayne Bradshaw launches acquisitions company

The deals also open up two new locations to F R Ball Insurance – an independent broker specialising in both commercial and personal lines insurance – with Wessex based in Overton, Hampshire and Lawson D Jones based in Ebbw Vale, Wales.

The opportunities represented by both deals are significant, he said, with the merger with Wessex complementing the next stage of the group’s growth given its dual benefit in terms of both Wessex’s specialist insurance schemes and geographic location. Meanwhile, the Lawson D Jones deal opens up the opportunity for F R Ball to leverage significant growth in commercial lines by investing substantially in the existing premises to create a trading floor for its commercial insurance team.

Touching on how both deals came about, Wadsworth noted that it was in November of 2019 that he first travelled down to Hampshire to meet with Dr John Mitchell then of Wessex Business Services – who has since been appointed MD of Wessex Insurance Brokers. Wessex was well renowned as offering a range of specialist insurance schemes, he said, and Mitchell was looking for a partner who he could work with to take its offering to the next level.

“We built that relationship and now he’s got the infrastructure to enable him to develop that further,” he said. “Back then he was looking at a number of brokers, and the nationals but despite what they had been offering him in terms of a financial package of buying the book out, it was the long-term I was offering him. It was the development of him becoming the MD of this newly created limited company where he could see and trust in what we’re looking to do.”

The deal with Lawson D Jones came about a bit differently, but as with Mitchell, the broker’s owner Jeff Jones was very well-known and well-respected in his locale. Wadsworth noted that he first reached out around 2014 and was delighted to strike up a conversation with Jones but that the discussion didn’t turn to the viable prospect of acquisition until many years later.

Read more: Insurance M&A hits highest growth rate in 10 years – report

When the deal was first discussed, Jones wanted to move to one day a week but since then has moved this up to two days a week – and is actively driving new business within the office. It’s wonderful to see how this move is reinvigorating people with a sense of possibility, Wadsworth said, and great to see the whole Lawson D Jones team so pumped up and motivated.

“The leads that [Jeff’s] bringing in and the way that he’s doing it with Rhidian Williams – one of our newly appointed brokers who’s very big in the market and was the managing director of Quentin L Jones, another strong Welsh insurance broking name – has been incredible,” he explained. “So, Rhidian joined us and I went up [recently] to see him and Malcolm Jeremiah, a sales leader in the business, and it was just so great to sit there, listening to the team talking about the opportunities we’ve got, the opportunities we’ve had and the opportunities we’ve got coming up.”

It may be F R Ball’s first (dual) acquisition, but the broker already has a firmly defined M&A culture, one that recognises why it bought the businesses it did and looks to support them rather than change them.

“And it’s a pleasure to be working with these guys,” he said, “because they’re bringing new things to us as well, and it’s that sharing of experience and that sharing of ideas which makes the difference for the whole of the staff at F R Ball. We’ve gone from 12 staff members, almost two/three years ago to 25 now [with second-round interviews for further roles already taking place].

“And we’ve gone from £4 million to £8 million in gross written premium… And it doesn’t stop there. We’re on track with our growth ambitions because the ambition is to get to good double-digit, high-teens growth within the next three-to-four years through further acquisitions and organic growth.”

The F R Ball team is travelling at pace, and everybody it brings along on that journey understands that from the word go, he said. It’s a culture and a way of doing business that is attracting bright new talent who want to be part of the journey, and the destination just keeps getting better and better. The business is looking to double again in the next three-to-four years and he paid tribute to the staff members instrumental in putting the right management and compliance structures in place to allow that to happen smoothly.  

“A leader of leaders, that’s what I think we’ve got here,” he said. “Because they’re each taking their own initiative and they’re running with it. People are running with [their own instincts]. And if they get it wrong, we put it right and they don’t do it again. But that’s how we all are, because I know I got to where I am by doing exactly that – by understanding that if you don’t try, you don’t get.”

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“While Flood Re is expected to help lower-income households, our results suggest that Flood Re has a weak impact in lower income and more deprived areas but a stronger impact in higher income and less deprived areas,” the Bank of England report said.

“This finding provides a unique insight in examining the effectiveness of Flood Re and the design of future public policies in mitigating climate risk.”

The bank’s research found that households in wealthier areas tended to benefit more in terms of balancing out the negative effect of flood risk on property prices, though all households did benefit overall.

Flood Re “disproportionately” benefits wealthier properties in terms of value appreciation of flood prone properties’ value, the researchers said.

Read more: What UK homeowners need to know about flood insurance

The paper’s findings were, nevertheless, “largely to be expected”, according to Hannah Davidson, Aviva senior home underwriting manager, who renewed the insurer’s calls for more to be done to make sure lower income households do not suffer from an upcoming April rate hike – the first since 2019.

“It will always be the case that in considering the relative value of Flood Re protection of a high-risk property, the value of that protection will be higher where there is greater value at risk,” Davidson said.

“By using a rating mechanism based on council tax band only, it will always appear that those in higher council tax bands, when assumed as a proxy for income, gain more benefit.”

With many lower income households – in 2017/18 42% of adults under 40 in low-income poverty were renting privately versus 26% of non-poor, a proportion that has almost doubled in 20 years, according to data shared in a University of Glasgow paper – renting, this means they are not directly affected by the impact of protection on property value.

“Analysis of our own data suggests a higher proportion of lower council tax banded properties (A-C) are ceded than higher tax bands and this is true regardless of whether the risk is a buildings, contents or a combined policy,” Davidson said.

“The proportion of ceded buildings and combined risks in these bands is significantly higher, suggesting that homeowners in lower council tax bands are benefitting from the Flood Re scheme.”

Prior to taking up her current role, Amanda Blanc, Aviva CEO, authored the 2020 Blanc Review, which recommended that the government should consider “more direct ways” to encourage tenants to take up contents only cover in high-risk flood areas.

This included a call for a review into the impact of Flood Re cover on the affordability of contents insurance for low-income households.

“As highlighted in the Blanc review and in our own Building Future Communities Report last year, we believe more needs to be done at a policy level to encourage take up of contents insurance by tenants and lower income households in high flood risk areas,” Davidson said. 

“This is a multi-faceted issue relating to attitudes towards insurance in general and is not specific to only tenants living in areas of high flood risk.”

Contents only, or renters’, insurance is an “underserved” area that the insurer has recently looked to tackle through its reinsurance partnership with US headquartered insurtech Lemonade, which launched in the UK earlier this month.

Read more: Aviva lifts lid on Lemonade partnership

For Davidson, looking at how Flood Re rate rises in April will affect low-income renters should be a priority.

“The increase in rates next April, for the first time since rates were reduced in January 2019 across all council tax bands will represent an increased cost for households already facing financial challenges in the current cost-of-living crisis,” Davidson said.

“We believe Flood Re could give consideration to the premium charged for contents only risks in the lower council tax bands to ensure Flood Re protection remains accessible to those living in these properties.”

While a greater “bounce effect” may be expected for higher value properties, the report’s focus has left some industry commentators scratching their heads.

“Weak” data, what happens in 2039 when the pooling scheme is intended to end, and the Bank’s understanding of key insurance trends were all key issues in the report flagged by Ethics and Insurance independent ethics adviser Duncan Minty in an October blog post.

Average property premiums in higher risk flood areas have fallen at least 50% since the onset of the scheme, according to Flood Re.

“I would estimate the actual figure to more likely be in the 200% to 500% range,” Minty said.

“That difference matters, for the impact of Flood Re is circa 100 times wider than just those properties with a history of having been flooded.”

Premiums could once again “soar” in 2039, he predicted, dependent on whether flood defences were in place and how well insurers drill down into policyholders’ risk mitigation measures.

“The researchers appear to be working with a mindset that a price that is not fully individualised is a price that is unfair,” Minty said.

“If [the bank] is producing reports that in a particular research niche make sense, but which in the wider landscape of how insurance is changing do not make sense, then I believe it is beholden upon the Bank to take steps to at least recognise, better redress, that imbalance,” he added.

A Flood Re spokesperson said: “Flood Re is a joint initiative between the Government and insurers. Its aim is to make the flood cover part of household insurance policies more affordable.

“Since we were established in 2016, we have reinsured over half a million homes.

“Four out of five households with a previous flood claim saw a price reduction on their home insurance by over 50% and those customers are also able to shop around – 95% of householders with a previous flood claim can now get quotes from 10 or more insurers.”

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Three-quarters (75%) of learners say strong workplace training would have a very high or high impact on their decision to stay with an employer, according to Emergn, a global digital business services firm. And 55% say that learning and development (L&D) programs increase job satisfaction and employee morale.

However, only 23% of learners and 22% of leaders view their organization’s current workplace training as extremely effective, finds the survey of more than 1,200 professionals from the US and UK, conducted in July and August.

“A lot of organizations are used to collecting what we could train our people on… but individuals want to be connected to something, to a mission, to a purpose,” said Steven Angelo-Eadie, head of learning Services, Emergn. “If you don’t know why [the training is] important, then it will feel like it’s a drain on your time and your energy.”

‘Absolute necessity ‘

In Australia, L&D has also grown in prominence for organizations.  Where once upskilling was seen as a ‘nice-to-have’, it’s now an absolute necessity with employees craving personalized, digitized development.

In hybrid and remote work, only the very best tech will do, which is something Arbaz Nadeem, global field and growth marketing manager at Whatfix, understands all too well.

“With the remote and hybrid work culture setting in for most companies, training employees on the complex applications they use every day is becoming a big problem. You can’t bank on physical classroom-led training anymore, hence companies now need to make sure that learning and training are happening in the flow of work and in a way that learners learn in a very personalized manner,” said Nadeem.

And in the great resignation, L&D could be the difference between floundering and thriving. A report from LinkedIn found that 94% of employees would stay with their employer longer if they offered a more comprehensive development program.

Despite this, 49% of workers said they simply don’t have the time to invest in their personal development, an issue that really should be front of mind for Australian employers.

“The pandemic has had a bitter-sweet impact on L&D,” said Nadeem. “L&D is now being valued all over the world and is fast becoming an essential component for companies. With the great resignation taking over, companies are now focusing on, and investing much more in, upskilling and retaining their seasoned employees.”

Key consideration

The evidence is clear, L&D will become part of the DNA of successful organizations and employers.

“It’s an absolute reflection of workers’ understanding that we can no longer give lip service to lifelong learning,” said Richard Wahlquist, president and CEO of the American Staffing Association (ASA) in Alexandria, Va. looking at the results of a recent survey by his organization.

It found that 80% of US workers consider an employer’s professional development and training offerings an important consideration when accepting a new job.

However, just 39% say their current employer is helping them improve their current skills or gain new skills to do their job better, finds the survey of 2,042 US adults.

These days, workers have choices, said Wahlquist.

“Employers are competing, it’s a war for qualified talent. So, when they’re talking to candidates, candidates are much more interested in getting a sense of fit, alignment with values [and] culture, and then investment in addition to pay. One of the key benefits, as our survey indicated, was this investment in ‘me’ and my professional development,” he said.

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Looking back on his tenure to date, Keating highlighted how the association’s recent milestones can be broadly divided into four categories. The first, he said, is the assembling of an exceptional new executive team – a feat that has been recognised in the reception and feedback of members. The second is how the MGAA team has been able to execute the findings of the comprehensive research it carried out in 2021 to determine its members’ requirements and expectations.

“We’ve invested in and spent members’ money in the areas where our members asked us to do so, which is a real achievement,” he said. “And we’ve effectively come to the end of the actions [pinpointed by] that research. Thirdly, it would be remiss of me not to say how pleased I am regarding the growth of the membership across all three tiers. We’re now in total, around 350 members, including MGAs, suppliers and insurer members.

“Our ambition is that we would like all MGAs to want to be members of the association. It’s up to us to approach them but it’s just as important that every MGA wants to be a member of the association. And it’s up to us to make sure that our proposition, our service and everything we do, remains relevant and essentially gives them no opportunity not to want to be part of our association.”

Read more: The capacity challenge – a silver lining for MGAs?

While the association is delighted that it now counts almost 190 MGAs among its members, Keating emphasised that the membership makeup of the MGAA is a tripartite offering. The team will continue to grow its insurer membership, he said, as it’s so critical for MGAs to have the right support from capacity providers – and will also focus on evolving the diversity of its supplier membership which provide such excellent products and services to the market.

The creation of multiple forums in the last two years is another achievement close to Keating’s heart. He highlighted how the introduction of both a technical forum, a claims forum and a personal lines forum had represented standout opportunities to allow all relevant stakeholders across the industry to come together to share knowledge, understand each other’s objectives and earmark opportunities to work together.

These forums showcase the technical expertise, knowledge and professionalism of the sector and offer an opportunity for the community to work more collaboratively going forward. The entire membership across the MGAA has a shared ambition to deliver excellent solutions to customers, he said, but also to deliver positive underwriting earnings to all stakeholders – and these forums provide an excellent conduit for that shared purpose.

As to what’s next on the growth agenda, he noted that the rapid rate of change that has characterised the strategy of the MGAA to date is showing no signs of slowing down.

“Over the next 12 months, we are investing in a significant upgrade on the MGAA website which will give a premium feel for our members,” he said. “It will be far more digital and user-friendly and will give more of a spotlight to our suppliers and their products and services. It needed a significant investment to get it to where the association needs it to be. Because it is our shop window essentially, and I feel it needs to clearly represent what the association, and more importantly, our members represent.

“[…] We will also go out, probably in mid-2023, to our membership again for further research. I think it’s really important that at least every two years, we go out and speak to our membership – especially as it’s growing so much – and ensure that what we’re doing continues to reflect what they actually want us to do, and that we’re investing our members’ money in the right areas for our members. And that’s both for now, but also, critically, for market developments as we go forward.”

Read more: CEO on the key to MGA success in 2022

Keating and his team will also be actively encouraging members to achieve the CII’s Chartered Insurance Underwriting Agent designation, he said, as it’s an achievement that really signposts the professionalism of the market and its players. In addition, the MGAA has a full roster of events, conferences, and learning and development opportunities in its roster.

The association will be introducing ‘Lunch and Learn’ type events around particular subjects of interest to its membership, he said, as it has seen first-hand how smaller, more intimate events are incredibly beneficial to attendees. The MGAA will also be continuing its partnership with I Love Claims and the success of this partnership’s recent conference will see it becoming a permanent fixture in members’ calendars going forward.

“That’s because it’s so important that the MGA community, working alongside I Love Claims, ensures that it keeps a clear focus on ensuring that its claims delivery is the best it can be,” he said. “And on the events front, we’ll continue with our normal events. We had a successful capacity exchange a few weeks ago, and we’ll have our broker ‘Meet the Market’ event, and our conference in July.

“So, we’ve got an increase in events and we’ll continue to use these to reflect what our members require around any educational and informative [opportunities]. And we’ll also look to continue to grow our membership. So, it’s a real blend – we’re doing a lot of strategic things but also a lot of more of the same, providing it remains relevant to what our members require.”

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Allianz-owned LV= General Insurance (LV= GI) is bringing in a broker portfolio pricing director in the form of Nicola George.

Taking effect on November 2, the appointment will see the former intermediary pricing head make the switch from Aviva. At LV= GI, George will be in charge of the insurer’s broker pricing team.

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Munich Re is making a couple of changes to its board of management, including new arrivals.

Dr Thomas Blunck (pictured), who has been with the Munich Re management board since 2005, is succeeding Dr Torsten Jeworrek as chair of the reinsurance committee effective January next year.

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Leading trade credit insurer Allianz Trade has announced that Aylin Somersan Coqui (pictured) will be stepping up as CEO and chairperson of the board of management of Allianz Trade.

Somersan Coqui, who has served as group chief risk officer of Allianz SE since 2020, will take over from Clarisse Kopff, who will be pursuing a new leadership role outside of Allianz as of November 30, 2022. The change is subject to regulatory approval.

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