Elie Hanna, chief distribution officer, UK & Lloyd’s, at AXA XL, joins IBTV to discuss the present trading landscape in the UK, the questions brokers are asking and where the market goes from here.
Just 11% of Gen Z workers report being pleased with the way their office is currently set up, according to a survey done by Unispace, a company that creates experiential spaces. But that workspace is important to these workers: almost eight in 10 (79%) feel they are more active when working in the office, compared with 66% among older workers.
Sixty per cent (60%) of Gen Z workers also say that work-from-home restrictions made them value the office more, compared with 43% among older employees.
“Employers are seemingly failing to utilize the power of the office to attract these individuals,” said Stuart Finnie, head of design at Unispace.
“With Gen Zers now accounting for around a third of the global population, for employers looking to beat the competition, considerations must be made to improve the quality of the environments they provide. Those employers who consider their workplace and generational needs will be able to not only engage and retain their best talent, but also attract new staff in our current candidate-led jobs market,” said Finnie.
Don’t force me back
Being order to return en masse might see a mass migration of workers leaving, according to another survey done in Australia.
According to the report, People at Work 2022: A Global Workforce View, among the surveyed workers in Australia between 18 to 24 years old and 25 to 34 years old, 54% and 65% respectively said they would think about looking for another job if their employers insisted on them returning to the workplace full-time.
“This is compared to 46% of the 45–54 age bracket and 27% of the 55 and over demographic,” said the report.
The survey showed that younger workers have shifted to a flexible working set-up. Perhaps office leaders should shift their focus from the physical work space to something that might make the younger cohort more satisfied with their jobs.
“This generation want, first and foremost, the flexibility [and] they want to have a great and meaningful work experience, so that means a great career progression, where they will learn a lot and then they will grow professionally a lot,” said Maggie Da Prato, HR leader and business partner at Dialectica, an information services company in Montreal that specializes in providing market knowledge to companies.
“They want to see that fast-track career progression. For them, it’s all about the meaning of that experience. If you just have something transactional, and you say, ‘You will you be doing that, and that’s the schedule, and that will be your paycheque,’ most of them won’t want to join,” she said.
This way of engaging workers must begin early on, said Da Prato. “We need to engage them from the very first contact we have with them. When we were talking 20 years ago, [it was] about ‘Let’s offer XYZ to employees’; now, it’s all about the employee experience, so making sure that we engage them from the get-go with a great package from a total compensation standpoint, but as well, learning opportunities, the experience, wellbeing, the flexibility, and of course, a great and vibrant culture.”
Inaugurating the new premises, which will act as CFC’s research and development centre, group CEO Dave Walsh (pictured right) noted that the development emphasises CFC’s commitment not just to innovation but also to supporting its tech talent. In a lot of businesses, he said, it can seem the salespeople in the front office are the ones who get the support, while those in the back office feel less important. But for CFC, collaboration is the name of the game and supporting the full gamut of the talent that it takes to succeed and thrive is critical.
Discussing the launch, Jon Fletcher (pictured left), CTO at CFC, said he was “incredibly excited” to be able to throw open the doors of the new hub office and welcome the MGA’s tech engineers to their new headquarters.
“I had a vision for what it would look like not that long ago and it’s amazing how far it’s come in such a short amount of time,” he said. “But my expectations of what it would be like have been exceeded. The feedback from the team has been great, they’re really enthused and really excited. So, it’s up to us now to maintain that buzz as we continue to grow. And hopefully, this serves as a point of attraction for people to come to us.”
The space has been designed to support the collaborative and hybrid working conditions that give the team the flexibility they desire, and it has the capacity to accommodate the anticipated future growth of the team. The time was right for the new office, he said, not least because CFC’s original headquarters were running out of space. Fletcher highlighted that CFC’s tech team has grown significantly since he joined, from about 30 people to around 100 people – a rate of growth that requires constant levelling up.
“I’m always saying to the team, if we want to be the best tech team in insurance, we have to have the best people, the best technology, the best office and everything around that,” he said. “So I think this is representative of that ambition and of where we want to get to. And technology is a massive part of our value proposition and of how we differentiate ourselves from others. It’s central to the business and runs through everything we do.”
Read more: CFC unveils retooled policies for tech, media companies
What’s quite unique to CFC’s approach to technology is that it is embraced for its value-add potential as opposed to just its cost-saving implications. A lot of other insurance companies use technology to drive down costs rather than as an integral element of their proposition, he said, while CFC utilises it as a differentiator and as a way to help insureds.
At the heart of discussions about the workplace is the balancing act that is keeping a team culture alive in a hybrid-working environment, which Fletcher noted is why CFC heavily leaned into the social aspects of designing the new office. Getting the combination of tech and talent right isn’t always easy to do, he said, but as a challenger brand in the market, the business is looking to change the conversation around what tech talent looks like.
“Our focus is [zeroing in] on the softer skills as opposed to just the hardcore, technical skills,” he said. “I really want people coming in who are ambitious, who are team players, who want to be part of growing an amazing business and who can hold each other and themselves to account. We’re bringing in people with all those kinds of soft skills that you maybe wouldn’t traditionally associate with techies.
“Getting that social cohesion part right and having a workforce where people gel well together and are friends is the most important thing. I think if you’ve got the right attitude, you’re going to learn the skills. To do something differently you need people that think a bit differently – who are entrepreneurial, who are innovative, who are confident in putting their head above the parapet and challenging the accepted way of thinking.”
CFC’s current hybrid working model is an effective one, Fletcher said, because he firmly believes in the power of having people together in the office – at least part of the time. What people want from their working conditions does, of course, vary from person to person – with some happier to work at home and others keen to be part of a team and part of something bigger.
“My natural tendency is to veer towards people that want to be together,” he said. “Because it has been proven that we can work fully remotely. As a business, we proved over two years that it works at a transactional level. What hasn’t been proven are the long-term cultural or team impacts of that [working model].
“I’m convinced that being in person is the best way to communicate and the best way to build a culture – in full acknowledgement that you can do those things at home, it’s just better in person. And that’s back to the idea that if you want to be the best, you’ve got to choose all the best things. And the optimal mode of collaborating is to be in person.”
Effective later this autumn, Lynn O’Leary (pictured) is succeeding Rachel Conran as chief executive of RSA Luxembourg.
“I am pleased to share that Lynn O’Leary will step into the role of CEO overseeing our Europe business,” said T. Michael Miller, chief executive for global specialty lines at Intact Insurance Specialty Solutions. “Lynn is an exemplary leader and, as CEO, RSA Luxembourg, she will ensure that our Europe business continues to grow, we remain focused on our priorities, and deliver on service excellence to our broker partners and customers.”
Intact Insurance Specialty Solutions is the marketing brand for the insurance businesses of Intact Insurance Group USA LLC, which is a subsidiary of Intact Financial Corporation. The latter owns RSA’s Canadian and UK & international (UK&I) operations.
While thanking Conran for her dedicated service and offering best wishes, Miller added: “With Lynn’s leadership, I am confident in the engagement and commitment of the team to grow our existing lines of business, identify potential new segments that align with our expertise and capabilities, and help our customers and brokers access broader expertise, additional products, and improved risk consulting capability.”
Working at Intact for more than a decade now, O’Leary most recently served as global specialty lines chief operations officer. Prior to joining Intact as associate general counsel in 2012, she was senior counsel in the claims and legal departments at Travelers.
O’Leary will report directly to Paul Dilley, global director for Intact’s global specialty lines, while having a dual reporting line to RSA UK&I CEO Ken Norgrove.
“We have set an ambitious growth strategy for global specialty lines at Intact – to grow the business to US$10 billion DPW (direct premiums written) by 2030 at a sustained, sub-90s combined ratio,” noted Miller.
“Europe is a central element of that path and, as such, a key part of our strategy is to capitalise on the opportunities in Europe by leveraging the outstanding specialty lines expertise and existing distribution relationships we have locally.”
Read more: ESG considerations – how are they impacting underwriting?
Touching on her role, Santenac noted that every day brings something different but three key areas of focus govern the services she and her team provide the industry.
“Firstly, I work with the partners who manage our main insurance clients to ensure they have the right resources to service them, and ensure they bring the best EY has to offer to every project or initiative,” she said. “The second is rooted in having a deep understanding of the industry, to enable us to anticipate and meet their needs. We develop solutions to help our clients navigate their strategies – tackling ESG, transformation, the regulatory agenda, and digital.
“Finally, I am passionate about sharing knowledge, developing skills and talent, and creating opportunities. I invest in mentoring and thought leadership that raises awareness of the DE&I agenda and talk about this on panels and at conferences. This is a priority for EY, and we weave this into everything we do.”
EY’s understanding of the broader environment in which insurance operates has enabled Santenac to develop a keen understanding of the factors impacting insurers, and she highlighted that the industry is committed to playing a significant role in the energy transition. This, she said, is reflected in the fact that many insurers are members of the net zero alliances for investors and for insurers. So, the importance of their role and the decisions they make – for example, investment in renewable energies – is heightened.
“[What’s driving this is] the common recognition that we collectively need to react quickly and can no longer ignore what is on our doorstep – failing to act will have a significant impact on society, and the industry,” she said. “Insurers are in a unique position where they can use their expertise to educate the society and help prevent the risk posed by climate change.”
Read more: Howden introduces first-of-its-kind carbon credit insurance product
Santenac noted that by the very nature of insurance, insurers are well placed to support the energy transition, because the main role of the industry is to protect people and prepare society for a better future. The purpose statement of insurance reflects this, she said, and together insurers can create a better world.
“They can truly deliver on their purpose by taking an active role in mitigating the risk because it impacts everyone, everywhere,” she said. “Insurers are well placed, not only because of their expertise, but because they are embedded in every corner of society, covering individuals and businesses.”
There are several ways in which insurers can get involved with the transition. First on the agenda is impact investing, she said, whereby insurers invest with the transition to net zero in mind. Secondly, they can take a more collaborative approach with their clients to help them understand and accelerate their transition. Thirdly, they can be proactive in finding solutions with other sectors, governments, and key players – harnessing the ecosystem. And finally, they can be involved in proposing new products which encourage good behaviours.
The ability and willingness of insurers to engage with the transition are affected by several factors, not least the need for greater collaboration. The industry cannot act in siloes, Santenac said, and insurers cannot act alone.
“There has to be a collective effort to engage other players in this journey – there are many risks – and many opportunities to forge a stronger outcome by working together,” she said. “Furthermore, there is a conflict of interest in short- and long-term decisions, which highlights the contradiction between environmental goals and the immediate needs of society.”
A comprehensive examination of where insurers stand with regard to the energy transition requires recognition of the other external factors that are vying for businesses’ attention in an increasingly unstable global environment. Inflation rates are starting to have a significant impact on the profitability of insurers, she said, and this means the transition and focus on climate change could fall lower down the list of priorities.
“[Meanwhile], the war in Ukraine creates a high risk of an energy shortage, which leads to countries using, for the coming months, more coal energy and fossil fuel because renewable energy cannot solve the immediate shortage,” she said. “This again, highlights the current contradiction between long- and short-term goals.”
However, Santenac has a clear message for insurers whose focus is at risk of slipping from the critical question of the energy transition. She highlighted that there is currently a “significant and valuable” opportunity to demonstrate how important insurers are in society and the impact they can have.
“By coming together to find a solution, instead of waiting for someone to make the first move, everyone progresses,” she said. “If we do not address these issues, the protection gap widens, and this will have serious ramifications for the future. Insurers play a valuable role in people’s lives and proactive, positive action will further their ambition to meet their net zero targets and deliver against their purpose.”
“It’s a double-edged sword,” then Consumer Intelligence insights manager Mike Miskelly told Insurance Business earlier this year. “If it’s done well, it can provide clear choices, or, if it’s done badly, it can just be confusing.”
More than 50% of insurance purchasers using aggregators over the last year saw three or more brands from the same insurer in the top five results, according to data from Consumer Intelligence, which collects data on thousands of quotes generated monthly. This is up from around 20% in 2017, meaning there has been an increase of 30% over the past five years.
The practice, according to Consumer Intelligence, was first developed by two motor market players and has “existed as long as the PCW”.
However, the customer acquisition tactic has since been adopted by a “greater range” of providers and Consumer Intelligence is increasingly seeing it in the home insurance market too.
“It’s far more common in motor than home, but that’s kind of on the change a little bit,” said Miskelly.
Insurance Business understands there have been market murmurings that the Financial Conduct Authority (FCA) may wish to look into the practice down the line, with firms that may be pushing products that are not sufficiently differentiated potentially facing up to tough questions.
It is “highly likely” that the FCA has been monitoring behaviour around brand stacking, according to Miskelly, particularly following General Insurance Pricing Practices and product governance rule changes.
Last October’s product governance changes, though, rather than GIPP as some pockets of the market had feared, are more likely to be responsible for a boom, according to Miskelly.
Read more: Insurance industry stakeholders react to price walking ban
“A lot of what we see was driven not by the pricing rules, but by the product governance rules,” he said.
“As we moved into 2022, January being the ‘Big Bang’ for GIPP rules, we’d already started to see this uplift in brand stacking, and it goes hand in hand with the number of products that the providers have.
“We started seeing more and more tiered product offerings launched, differentiated brand offerings launched, and in some cases, like the resurrection of, say, a legacy brand that was on PCWs but wasn’t very active become more active.”
While Consumer Intelligence’s analysis suggests that initial fears that GIPP changes could lead to an onslaught of dodgy brand stacking tactics may well have been unfounded, there have been at least a couple of instances that could suggest insurers or brokers may have looked to flex the rules to get ahead.
“We’ve only seen one or two cynical cases of that, where it looks like a legacy brand has clearly been resurrected and repositioned as the cheapest brand line PCW ahead of another sort of bunch of brands from the same provider to kind of get around those GIPP rules,” Miskelly said.
“The most obvious one that we saw was very temporary, it was only for a couple of weeks.”
With PCWs keen to remain compliant and offer customers a good experience, Miskelly suggested they could to some extent be “self-regulating” to keep bad behaviour off their websites.
In the past, some stacked brands have effectively offered the same cover but under a different brand name, though this appears less common into 2022.
“[GIPP and product governance rules have] triggered a lot of insurers to look at that and review that situation and say, well, actually, if we’re going to the trouble of having two brands on PCW, you might as well differentiate them,” Miskelly said.
“We’ve seen quite a few of those sister brands, or legacy brands, be repurposed in something that is truly different from the headline brand.”
PCWs may look to ensure that customers are kept informed about the differences – or lack thereof – between products and brands.
Consumer Intelligence believes they could be on the “cusp of change” to make search results “more value oriented than price oriented”.
“If you look at the sheer volume of products on the PCWs now, it would make sense to move in that direction,” Miskelly said.
As for the FCA’s take on brand stacking, a spokesperson said: “We expect firms to comply with our rules to design and distribute products that offer fair value to customers.
“We routinely engage with firms on their approaches to this, and we will take decisive action where we uncover evidence that companies have not acted in the best interests of their customers.”
There’s a consistent inconsistency to the spectre of cyber risk which plays out against an ever-shifting backdrop, leaving SMEs continually reevaluating how they can mitigate the challenges associated with this operational threat. And so it is little surprise that the role of insurance and risk management in providing thought leadership and proactive solutions to those doing business in our increasingly digital-first world has shone in recent years.
Discover more about Travelers’ best-in-class cyber offering today
Providing insight into the current roster of cyber threats impacting the SME market, Chris McMurray (pictured above), cyber lead at Travelers Europe, highlighted how the variable nature of cyber risk can be seen from recent evolutions in the ransomware space. The last few months saw ransomware claims drop off a little, he said, which was considered to be linked to certain threat actors changing focus amid the Russia-Ukraine conflict.
Listen now: Cyber Risk: The threat and key steps to minimising exposure
“I don’t think anybody expected that to hold for long,” he said. “Indeed, as we leave the summer, we’re seeing ransomware activity creeping back up. And that’s still the number one area where we see a lot of activity, and it really is across the board – whether you’re a small SME or a large global client. We’ve been banging that drum for quite a number of years now but I like to think we’re making some headway and getting the message out there – that everybody is impacted by this.”
Cybersecurity is not a once-and-done approach, McMurray said, but rather requires constant reviewing to ensure that elements such as patching and market intelligence are kept up to date. Leaning into some of the insights yielded by this intelligence, he highlighted that threat actors have become more aware of the growth of the cyber insurance market, which is being reflected in the ransoms demanded.
In the past, he said, cyberattacks tended to be more of a volume play where a threat actor would demand relatively small ransoms from SMEs and quickly move on to the next victim.
“They’ve now realised, it seems, that a lot of these smaller businesses have cyber insurance policies in place and they’re getting hold of that information and asking for payments up to the policy limit,” he said. “That’s something that we weren’t seeing even six months ago, so again, it’s just a good example of the threats in this space and how they’re continuing to change.”
On the flip side, noted James Doswell (pictured below), senior cyber risk management consultant at Travelers Europe, it seems that some companies which have obtained cyber insurance and bolstered their cybersecurity, are now mistakenly feeling secure. That complacency is a real concern across the market, he said, and it’s precipitated by a lack of education around cybersecurity.
“In some cases, they are just not aware of [the exposures they face],” he said. “They don’t have the security knowledge and understanding of how some of the attack chains happen, and how the attackers actually get in and compromise networks.
“And some of these networks do have relatively comprehensive security, as we’ve seen from some of the bigger organisations where attackers have still managed to gain a foothold somewhere. Quite often, it’s a question of the weakest link and it could be as simple as a phishing email.”
For Travelers Europe, the key to removing that false sense of security has been the creation of a truly proactive cyber insurance offering that works across the entire lifecycle of the policy. This keeps insureds cognizant of the changing nature of cyber risk, and builds recognition of the idea that having an insurance policy or certain security controls in place doesn’t mean you can relax your approach to cybersecurity.
Travelers is well-regarded for how stringent it is with regards to the implementation and attestation of MFA controls, Doswell said. This is largely due to its insight into the exposures that partial implementation of MFA can bring – particularly in the wake of COVID and the move to remote working. At that time, many businesses missed the fact that an attack can happen from within the network as well, as in the case of phishing attempts. And if an attack vector gains a foothold on an individual’s machine, it can spread internally across a network – causing widespread damage.
Read more: How can businesses protect themselves from cyber breaches?
That’s where elements such as employee training really come into their own, McMurray said, as these exercises are critical to communicating to employees what they should be looking for when it comes to phishing attempts etc. That should be an ongoing process, he said, and Travelers is leading by example on this by creating training modules that require active participation and encourage a proactive stance on cybersecurity.
“From a product perspective, we absolutely continue to review what we put out there,” he said. “And it’s not just the actual product itself but also additional sides to that. First are our pre-breach services, where we’re trying to mitigate the risk to the clients and we have various things in place such as our eRiskHub, and access to Symantec (now HCL). These can try and prepare our clients a bit better, and that’s where we’re trying to reduce something going wrong in the first part.
“But obviously, you can’t eliminate that risk completely. So, the second part is what we do when something does go wrong – our breach response. Again, that’s somewhere where we’re constantly evolving our panel to make sure we have the right vendors, and to make sure those vendors have the capacity to manage an incident should something go wrong.”
Travelers Europe prides itself on working closely with its vendors and its claims department to make sure its offering evolves alongside the cyber risk environment and is fit for purpose, he added.
“In the same way that we would say to our client that their cybersecurity is not a once-and-done approach, that equally applies to us,” he said. “We need to make sure that what we’re offering both pre-loss and breach response following a loss is more than adequate, and is going to be the best solution for the client at that time.”
Combining a best-in-class pre-breach and post-breach proposition is an offering that is resonating well across the market, he said, particularly where it’s bringing previously unconsidered exposures to the attention of clients. McMurray emphasised how bringing on board risk control experts, such as Doswell, has really rounded out Travelers’ full-service cyber insurance offering and how it presents a significant advantage both to his team and the wider market.
“Being able to utilise James’ [insights] in real-time when we might have a question around client security, or when we have a more complex client and we’d like to involve James in that client meeting is all something that just adds to our proposition,” he said. “And that’s just another great example of the evolution, not just of this product but of the services we offer around that.”
To find out more about Travelers’ cyber offering, visit travelers.co.uk/cyber
Chris McMurray is cyber lead at Travelers Europe and James Doswell is senior cyber risk management consultant at Travelers Europe.
The FT highlighted that the case, which is likely to come to a full court hearing next year at the earliest, will be closely followed by other leasing companies expected to lodge similar claims. Vitaliy Seveliev, Russia’s transport minister, has stated that 1,140 planes have been newly registered in the country, as a result of a decree authorising the seizure of foreign-owned aircraft.
A source quoted by The FT as being party to the case indicated that an initial case management conference for the trial would likely take place early in 2023, though it could take a further year before a final judgement is delivered. The group, led by AIG, provides “all-risk” cover for the aircraft in question – insuring against risks excluding war. Meanwhile, the group led by Lloyd’s of London covers war-related risks.
It was reported that AerCap’s court filings show that both the all-risk insurers (referred to as “Section One” insurers) and war-risk insurers (referred to as “Section Three” insurers”) claimed that the aircraft’s seizure did not constitute a loss for insurance purposes. However, AerCap’s filing has said that the all-risk insurers should accept its claim.
“Wrongfully and in breach of the policy, the Section One insurers have not paid the sum or any part of it to the insureds,” the filing read.
The FT revealed that: “The two groups of insurers disagreed in their filings on what should happen if the court held that, contrary to their arguments, the aircraft had in fact been lost. The group led by AIG argued that the decision to retain the aircraft was a political one — which could put it outside the scope of the coverage that they provide.”
“In the circumstances . . . the acts of the lessees . . . were acts done for political purposes,” the AIG-led group defence argued.
Meanwhile, the war-risks insurers insisted that, even if the court decided that the seizure was part of an event covered by their policies, they would be liable only if the aircraft were destroyed.
In addition, the FT revealed that limits on the war-risk insurance mean that if the claim is found to be under that cover, any payout is likely to be limited to $1.2 billion, instead of the $3.48 billion being claimed under the all-risks policy.
The publication highlighted the response of Mark Pring, a partner specialising in insurance issues at the law firm Reed Smith, who said there was likely to be a “wave” of insurance claims over assets stranded in Russia in the coming months.
“The insurance fallout from the ongoing war in Ukraine has only just begun,” he said.
“Cyber threats of all sizes and across varying industries are continually evolving, and are a severe risk for businesses.
In this episode, Travelers’ cyber lead, Chris McMurray, and senior risk management consultant for cyber, James Doswell, explore cyber threats in detail. They share expert tips on security steps clients can take to mitigate cybersecurity risks. In addition, with the legal and regulatory environment potentially daunting for some businesses, they will explore what you need to know and what to do in the event of a cyberattack.
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It’s official – Lloyd’s wholesale broker Tysers is now owned by ASX-listed firm AUB Group Limited. AUB, which consists of insurance brokers and managing general agents in over 500 locations across Australia and New Zealand, has completed its purchase of the London-headquartered brokerage.
“In accordance with the terms of the acquisition and as previously announced, AUB confirms that it has now issued 9,018,974 new shares to Tysers’ former owner, Odyssey Investment Partners,” noted AUB. “The new shares will be escrowed for a 24-month period.”
Meanwhile, dependent on Tysers’ achievement of agreed revenue growth targets, additional deferred consideration may also be payable two years post-completion.
Read more: Tysers to be sold for £500 million
AUB chief executive and managing director Mike Emmett described the finalised deal as strategically aligned and financially compelling. The transaction is expected to deliver material scale and to strengthen AUB’s operational platform.
“Given Tysers’ position as a leading specialist wholesale insurance broker in the largest insurance market in the world, we are excited in the step change Tysers will bring to AUB in terms of capturing further economics in the insurance broking value chain, accelerating scale in AUB agencies, and supporting our clients with international placement needs,” commented the CEO.
“I have known Tysers and its executive team for an extensive period of time, and AUB has been working with Tysers for many years providing our clients access to Lloyd’s market for specialist insurance. I have always been very impressed with the quality of the franchise, the knowledge and expertise of the team, and its deep client relationships.”