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LIIBA launches new campaign to promote diversity awareness

LIIBA launches new campaign to promote diversity awareness

The London & International Insurance Brokers’ Association (LIIBA) has launched the [email protected] campaign to increase awareness of diversity and inclusion (D&I) initiatives in the London insurance market.

The campaign involves several initiatives that target younger people and those from less-advantaged backgrounds by providing them with access to the London insurance market and the professional roles it offers, LIIBA said.

The area of LIIBA’s website dedicated to the campaign will provide information regarding LIIBA’s initiatives, such as new programme from The Prince’s Trust called Get into Insurance aimed at 18- to 30-year-olds, a STEM learning insurance industry insights week for 14- to 17-year-olds and LIIBA’s upReach Springboard programme aimed at supporting 40 university undergraduates from disadvantaged backgrounds over a three-year programme.

LIIBA will also support more than 30 first- and second-year university students through work experience placements this summer, and further initiatives will be added to the hub over time.

According to LIIBA, this is the first time all its D&I initiatives have been put together under a single banner and overseen by LIIBA’s diversity and inclusion panel. All the individual initiatives feature support from one or more of LIIBA’s member broker firms.

“Creating a more inclusive culture in the London insurance market is one of our strategic objectives,” said Jacqueline Girow, LIIBA’s D&I head. “Our members and the LIIBA team have been working hard for some years to help everyone to gain access to the market and the opportunities it offers. But we felt the time had come to take a more co-ordinated and action-based approach. [email protected] is a banner beneath which a broad range of D&I activities can take place. It allows us to co-ordinate initiatives across our membership and get the most from each activity. It’s also a visible manifestation of brokers’ commitment to bring about tangible change, regardless of a firm’s size.”

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QBE UK’s new executive director on his plans for the year

Wallace noted that he’s at a stage in his career where he is settled and comfortable with who he is, which makes a real difference to the strength and longevity of the relationships he has built across the market. Now when he speaks to brokers and carriers across the UK, he said, a lot of them are at the point where they’re running their businesses and it’s wonderful to be able to chat with them openly and on the same level.

“Because you’ve just got that level of understanding when you’ve been in the industry for a long time and you’ve built up a level of trust and respect with so many people,” he said. “Insurance is a family, so that trust aspect that you build up over a period of time is really important. Because then you can deal with things, and you can make difficult decisions much easier because you’re working with people with whom you’ve got a common understanding. And you can really see that camaraderie coming through.”

Having the opportunity to serve QBE’s UK business is a great position to be in, Wallace said, as while he joined QBE Europe to help lead its growth strategy, now he’s coming into a region where QBE already commands a strong and established brand. Between its deep technical specialisms, its great expertise, its strong London market identity and its solid regional footprint – QBE UK is in great shape, and he’s looking forward to continuing to build that out.

Read more: How can brokers deal with rising costs in the construction insurance market?

“We’ve got areas where gaps do exist in the armoury,” he said. “For example, we’ve made a significant push on construction in recent times. We’re very strong in the large corporate sector and we’ve just launched Contractors Combined to target the middle market… launching Commercial Combined a couple of years ago and then aligning that with Contractors Combined just serves that need to target the middle market sector as well.

“We’ve also got a good regional footprint but I think we can get a much stronger identity and visibility in the market, and that’s some of the feedback I’ve got from our broker contacts. That QBE is a special brand, and we’ve got some strong specialisms across different areas but the market wants to see more of us, the market wants to see more visibility. One of my aims is really to try and engage with the brokers, engage with the customers, and try and make QBE much more visible in terms of who we are and what we’re looking to achieve.”

The message across BIBA and across the wider market is one of growth, Wallace said. Everybody is pushing for growth and in his new leadership role, his remit is to come in and set the pace for that growth within the business. That only happens by trying to create greater cohesion and greater alignment across the business, so that when the proposition goes to market, its approach is much more joined-up and provides greater scope and clarity as to where it wants to go next.

It’s an interesting time to be in the market, he said, as customers are looking for greater communication and engagement from their insurers following the COVID crisis. The role of the broker in bridging that demand versus supply opportunity is crucial, and Wallace is actively engaging with multiple broker partners on that subject.

“We’re a broker dominated market,” he said. “And the important thing is to recognise that the broker’s job is to try and represent the needs of the customer, while our job is to produce a solution for the customer. And the best way to try and find that solution – which ideally optimises addressing and preventing risk, or finding new opportunities and solutions for the customer – is to work together.

“I saw it in Europe, but coming back into the UK I see what’s more prevalent [here] is a willingness and desire to work together. That’s not just at an executive level, sitting in a room and having a chat, it’s all the way through the different structures of both the broker and the customer, and the broker and the insurer.”

What he and his team are seeing at the moment is a strong desire to come up with new and innovative solutions that are more agile and adaptable to their clients’ needs. Because what the client is looking for, he said, is greater clarity, greater consistency and greater certainty. And he believes that both brokers and insurers now have a fantastic opportunity to put aside individual ways of working and start to come together.

Read more: QBE’s Chris Wallace on IUAD’s campaign is more critical than ever

With so much opportunity in the market, Wallace has a lot of plans in place for what the future of QBE’s UK insurance division will look like, but top of the agenda for the year ahead is “listening and engaging”. His year one is 2023, he said, so a lot of his meetings are about getting ready for that period and he’s relishing the opportunity to get to know the ins and outs of the business.

Over the course of about 150 one-to-ones, he’s had the chance to catch up with many of QBE’s broker partners. What’s critically important to him, he said, is to have absolute clarity on these relationships, and a very clear vision and ambition for where these can go as the insurer prepares for 2023.

“That’s about understanding where we choose to play, where we choose to produce targeted solutions for different segments, customers and products,” he said. “So, it’s very much about understanding our current state and then also setting out our vision for growth in terms of what we want to achieve. And that is really to target a much stronger focus in select industry segments, to develop our industry specialisms and to develop greater visibility across the UK regional footprint.

“I would say those are the main areas of focus on my end. If I can get to the end of the year, where people know who I am coming back into the UK and also know my team and our key people across the different UK branches, I think that will put us in a really good position for growth.”

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IGI publishes first quarter 2022 results

Metric

Q1 2022

Q1 2021

Gross written premium (GWP)

US$128.1 million

US$100.6 million

Net underwriting result

US$41.3 million

US$27.6 million

Profit for the period

US$19.4 million

US$10.2 million

Core operating income

US$23.9 million

US$14.6 million

According to IGI, the improved underwriting result is largely attributed to the growth in net premiums earned and to lower net claims and claim adjustment expenses. The rise in GWP, meanwhile, was mainly due to new business across all segments and rate increases on existing policies.

“IGI had a strong start to 2022 as our growth and cycle management strategy resulted in an excellent set of financial results across all key financial measures,” declared Jabsheh. “Most notably, we recorded a 50% increase in net underwriting results, a 90% increase in profit for the quarter, and a 64% increase in core operating income in the first quarter of 2022 compared to the first quarter of 2021, resulting in 8.8 points of improvement in our core operating return on average equity to 24.1%.

“We grew our gross premiums by 27% during the first quarter of 2022 as we continued to take advantage of a robust rating environment and capitalise on market opportunities in all areas of our business, while continuing to strengthen our existing portfolio. Our combined ratio for the first quarter of 2022 was 72.2%, an exceptional result and well below our long-term average of around 90%.”

Meanwhile the CEO noted that IGI has minimal direct exposure to Russia and Ukraine, and that the company does not expect any material losses from the ongoing conflict.

“Nevertheless,” he said, “it is events such as this that continue to remind us of the complexity and uncertainty of the world around us, and the impact they have on our global economies. Elevated inflationary pressures and rising interest rates in the first quarter of 2022 were evident in the mark-to-market impacts in our investment results.

“Overall, our performance in the first quarter of 2022 demonstrates the effectiveness of our underwriting strategy and provides another positive data point in the track record of high-quality results that IGI has achieved over many years. We expect that our markets and the rating environment will remain favourable for the foreseeable future, resulting in profitable growth in 2022.”

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Marsh McLennan selects board of directors

Marsh McLennan selects board of directors

Marsh McLennan stockholders re-elected the entire slate of 2022 director nominees at their annual meeting Wednesday. The directors will serve a one-year term on the company’s board, expiring at next year’s annual meeting.

The directors elected at Wednesday’s meeting are:

  • Anthony K. Anderson
  • Hafize Gaye Erkan
  • Oscar Fanjul
  • Daniel S. Glaser
  • H. Edward Hanway
  • Deborah C. Hopkins
  • Tamara Ingram
  • Jane H. Lute
  • Steven A. Mills
  • Bruce P. Nolop
  • Morton O. Schapiro
  • Lloyd M. Yates
  • R. David Yost

Marc D. Oken, who has been a director since 2006, is retiring from the board and did not seek re-election.

“On behalf of Marsh McLennan, I want to thank Marc for his many contributions to the company over the last 16 years,” said Glaser, who also serves as president and CEO of the company. “His financial expertise and wise counsel had a significant impact on Marsh McLennan’s trajectory. We thank him for his service.”

Stockholders also ratified the selection of Deloitte & Touche as Marsh McLennan’s independent registered public accounting firm for 2022. They also approved, by a nonbinding vote, the compensation of the company’s named executives.

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How do you achieve a successful acquisition in insurance?

Read more: Markerstudy’s Gary Humphreys discusses group’s BGLI deal

Markerstudy has had significant practice in completing acquisitions and, for Humphreys, the key to that success comes down to two elements – people and systems. In a certain sense, he said, the systems part is easy because you’re essentially just dealing with data. The people piece, however, is the one that is critical to get right because you need to make sure you’re creating the right culture and atmosphere across the wider group.

“You want people to buy into the Markerstudy culture,” he said, “but you don’t want to lose any of the good bits of the acquisition you’ve made. It’s about getting that balance right and keeping people motivated, and, in a lot of cases, it’s about reassuring people. The uncertainty of a takeover is always the same and people do worry about the future.

“So, quickly getting round and reassuring people that the future looks good and the acquisition was made for all the right reasons and is not going to be a negative thing, is [critical]. And it’s exciting when meeting lots of different people in the businesses you acquire, you get lots of opportunities to listen to different ideas. And people’s views from outside of your own business on how they view Markerstudy are good to take on board as well.”

Looking at the hallmarks of a successful acquisition, he highlighted the need for careful consideration prior to any negotiations. Markerstudy doesn’t believe in what the City would call “hostile takeovers” and isn’t looking for businesses with teams that are not aligned with the direction an acquisition might take them in. It’s very difficult to change a negative culture, he said, and so the group spends a lot of time with the key stakeholders of any deal before it is struck to make sure that alignment is there.

“I think we’ve got a good reputation for being fair with people’s businesses when we buy them, whether they want to stay with the business or whether they want to exit,” he said. “We stick to our word, we’re not the business that re-negotiates a deal six months down the line. We agree what we’re happy with upfront and we stick to it. And I think that’s important, both for the businesses that are selling and for the people in those businesses, because they hear what’s going on and they buy into that message of continuity.”

This emphasis on people is why Markerstudy is drawn to acquiring businesses with a great team in place, and Humphreys noted it was one of the main attractions of the group’s recent BGLI deal. It’s always the same when you do a large acquisition, he said, in that the acquired business will have several items in their work stack that they haven’t worked on yet but which represent exciting opportunities. And, in order to make the most of those opportunities, you need to have the right talent in place to take those initiatives forward.

As with so much else in life, success begets success in the M&A space and having a good reputation among advisors in the market self-generates new opportunities. Advisors value a strong relationship where they can rely on smooth execution, as it makes their job easier if they can put forward an offer that they know the acquiring company can deliver on. Markerstudy’s purchase of the underwriting business of Co-op was probably the hardest integration the group has done to date, given the number of legacy systems involved, he said. But delivering that within the timescale the group did sent a clear message to the wider market – that its integration team really knows its stuff.

“[In terms of M&A], we’re not restricted to any particular segment,” Humphreys said. “With the Clegg Gifford acquisition, we’re pushing the Lloyd’s broker angle in the commercial SME market. So, if we see acquisition opportunities that fit with any of our portfolios, then we’re willing to look. And obviously, the bigger the scale, the better now, because each acquisition tends to be bigger than the last one. Not that there are that many bigger than BGLI out there.”

M&A is one strand of Markerstudy’s strategic direction for the rest of 2022 going into 2023, and another current area of focus is on the group’s expansion into the home insurance market. Markerstudy is already very dominant in the motor insurance space, he said, and is now looking to further broaden its offering. Its Co-op acquisition gave it a small window into the home insurance space, which was then expanded through the BGLI deal, and now the group is looking to maximise the opportunity there for growth.

“So, the opportunities now coming from the combined group are just really exciting,” he said. “It’s all about where we can take this to. Every time we do a large deal, as we did with Co-op, you think ‘oh that’s great’ and you take the time to stop and breathe and bed that down. But then you do another one and another one, and you feel that constant excitement of ‘chasing the rainbow’. That’s what we’re really excited about this year. And working through all the new opportunities with our [acquisitions] and our new people is really good fun.”

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How satisfied are Brits with their insurers?

The study, which surveyed 2,000 consumers and 403 insurance purchase decision makers at UK businesses, said that the pandemic has positively reinforced buyers’ perceptions of insurance, with nearly half of consumers (41%) and businesses (42%) reporting that the pandemic has made them appreciate the importance of insurance policies much more. The study also said that the respondents form part of a largely engaged and satisfied customer base, in an industry with already solid foundations.

“The headline insights about satisfaction levels post pandemic are encouraging,” said Nigel Teasdale, commercial director of insurance at DWF. “The insurance industry will no doubt greatly welcome the fact that buyers’ perceptions of their services appear to have not been adversely impacted by the pandemic.”

However, both groups said that improvements can still be made to the insurance buying process. Sixty-six per cent (66%) of consumers and 70% of businesses said that choosing or buying an insurance policy is always a difficult process. Both groups agreed that there is a need for clearer policy documents, with policies written in plain English with greater clarity around product information, especially more transparent explanations of any caveats or exclusions.

Both consumers (61%) and businesses (78%) want greater personalisation and customisation of policies. However, both businesses and consumers lack knowledge of, and confidence in, these matters, with more than 70% of both groups of buyers wanting to know more about the benefits of personalisation and customisation.

Consumers have concerns about data security in relation to personalisation. Nearly half (49%) of consumers believe that personalisation means they will lose control over their data. Meanwhile, 45% do not feel comfortable about insurers having access to or using their personal data to inform products. This highlights a need for more information around data protection and the benefits of personalisation, the report said.

The study found that younger consumers have higher expectations of their insurers, with those aged 18 to 24 more likely to have felt let down by their insurer (32%) compared to any other age group (average of 16%). This dissatisfaction stems from a perceived lack of empathy and support from insurers, the study said.

While their expectations may be higher, younger consumers are also willing to pay more. Around a quarter of 18- to 24-year-olds are more likely to consider paying higher premiums for all insurance types, compared to 10% of those aged 55+.

“There are some parts of the research that insurers will hopefully find of interest for their product lines and development, specifically around businesses and consumers wanting a more nuanced, tailored and responsive service from their insurers,” said Claire Bowler, global head of the insurance sector at DWF. “Younger customers in particular seem willing to pay for more innovative, personalised and customised products which gives insurers the perfect opportunity to refine their offering, develop new solutions and forge enhanced relationships with their customers.”

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Allianz investment arm pleads guilty to securities fraud

Allianz investment arm pleads guilty to securities fraud

Allianz SE has confirmed that its indirect subsidiary, Allianz Global Investors US LLC (AGI US), will plead guilty to criminal securities fraud and pay $5.8 billion after misrepresenting the risk posed by a group of its hedge funds that were rocked by pandemic market conditions.

In a statement, Allianz SE said AGI US had entered settlements with the US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC or commission) regarding the Structured Alpha Funds issue after the commission established that it violated relevant US securities laws. A Bloomberg report revealed that the total payout, including a $1 billion fine to the SEC, is covered by provisions the company has already taken.

Manhattan US attorney Damian Williams confirmed through Bloomberg that Gregoire Tournant, former chief investment officer and co-lead portfolio manager of the Structured Alpha Funds, was taken into custody on Tuesday and charged separately for his role in the alleged scheme to defraud investors. Specifically, prosecutors said Tournant and two portfolio managers overstated the level of independent oversight AGI US was providing, misrepresented hedging and other risk mitigation strategies, and altered documents to hide the riskiness of the funds.

“As a result of this scheme to defraud, investors’ funds were exposed to higher risk than promised, and investors were deprived of information about the true risks to which their investments were exposed,” according to Tournant’s indictment, as reported by Bloomberg.

Meanwhile, Allianz claimed that the DOJ’s statement of facts showed that AGI US’s criminal conduct regarding Structured Alpha Funds was limited to a handful of individuals in its Structured Products Group, no longer employed by the company. Moreover, the DOJ’s investigation did not find any knowledge of, or participation in the misconduct at Allianz SE or any Allianz Group entity.

Allianz expects the guilty plea to disqualify AGI US from advising US-registered mutual funds and certain types of pension fund after a temporary relief period. It also expects the SEC to issue waivers to ensure that AGI US’s resolution with the DOJ does not impact PIMCO and Allianz Life’s business.

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Lockton scores highest year-on-year revenue growth in company history

Lockton scores highest year-on-year revenue growth in company history

Global insurance broker Lockton posted record-breaking revenue of US$2.69 billion (approx. £2.2 billion) in the 2022 fiscal year ending April 30, representing 27% growth from the previous year, most of which was considered organic.

US-headquartered Lockton is a privately-owned brokerage with approximately 9,000 associates doing business in over 125 countries. Over the past 12 months, the firm tipped the talent trend, adding over 1,200 people across all lines of business. It also achieved successful geographic market expansion, with new offices in the US, Europe, Scandinavia, New Zealand, and Latin America.

Lockton chairman Ron Lockton said the insurance broker’s record-breaking revenue was driven by its “amazing people who are passionate about serving clients.”

“All credit belongs directly to them. I’m proud that our private ownership allows us to pursue a long-term strategy where our decision-making focuses on our clients, our people, and our communities,” Lockton continued.

Meanwhile, Lockton CEO Peter Clune said the broker’s organic growth strategy required a “different skillset where you’re attracting people and clients one handshake at a time.”

“We are posting significant organic growth numbers in a brokerage industry where growth is typically driven by mega mergers, large acquisitions, and private equity roll-ups,” he said.

Lockton continues to build innovative capabilities to meet client needs, including investing in transaction, liability, cyber, surety, and marine.

“We’ve experienced seismic momentum over the last 36 months, and after 56 years, we’re just getting started,” Clune said.

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Chartered Insurance Institute reveals financials

Chartered Insurance Institute reveals financials

The Chartered Insurance Institute (CII) has bounced back from the challenges of 2020, reporting a consolidated surplus of £3.3 million for 2021 (FY21) compared to a £4 million operating deficit in the previous year (FY20).

It also reported a £2.2 million increase in revenue from qualifications and educational activities in FY21 compared to revenue in the previous year as insurance and personal finance professionals moved to develop their knowledge and skills. Another financial milestone during the same period was the CII’s buy-out of the defined benefit pension scheme, with an initial buy-in of £6.6 million as the first step of the process completed within the period.

CII interim CEO Jonathan Clark commented: “We are pleased to see income building while we carefully manage costs in what continues to be a challenging environment – 125 years since the CII was formed by the coming together of local institutes, we are proud to continue to deliver learning and networking that enables today’s insurance and personal finance professionals to develop their skills, knowledge, and expertise.”

Meanwhile, CII chair Helen Phillips thanked the professional body’s members, students, corporate customers, volunteers, trustees, and staff for helping it recover from the challenges in 2020.

“Revenue has been achieved, thanks to the continued commitment of insurance and personal finance professionals to learning and their support and engagement with membership events,” Phillips continued. “The progress achieved helps provide a sound base for the development of the CII’s next five-year strategy, which will focus on continuing to rebuild post pandemic.”

The release of the CII’s FY21 financial statement follows the appointment of Alan Vallance as its new chief executive to lead the professional body’s five-year plan.

The CII will publish its annual report and share it with the volunteers leading local institutions, personal finance regional committees, and membership societies at the Ambassadors in Action conference in Birmingham on May 17.

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Insurance body’s AGM delves into mental health

Insurance body's AGM delves into mental health

Nearly 100 people attended this week’s annual general meeting of the Association of Medical Insurers and Intermediaries (AMII) in Warwickshire – hearing from speakers including former BBC and Sky news correspondent Mike McCarthy, whose son took his own life more than a year ago during lockdown.

In McCarthy’s keynote speech, which was delivered in the middle of mental health awareness week, the journalist shared his personal lessons in loss and hope. McCarthy has been campaigning for better mental health provision in the UK since his son’s passing.

“We have had hugely positive feedback from what was a thought-provoking, and at times very emotional event,” said executive chair David Middleton (pictured) of the May 11 gathering at the British Motor Museum.

“Mike McCarthy’s talk was incredibly powerful. Most of the audience were in tears and he got a standing ovation. The lessons we can all learn about Mike’s tragic loss were particularly resonant during mental health awareness week.”

AMII, which has more than 120 intermediary and insurer members, highlighted that suicide is the biggest cause of death for men under 35 in the country.

Meanwhile, the other speakers were Bupa Global medical director Robin Clark, Myogenes chief executive Clare Brenner, and Branko Ltd director Branko Bjelobaba.

The latter spoke about the new consumer duty rules, as well as the issue of multi-occupancy buildings insurance; Brenner tackled tailored patient diagnostics and treatments; and Clark discussed innovations in cancer screening, diagnostics, and prognosis.

“We heard some fascinating insights into the potential future of healthcare diagnosis and delivery, home testing, and the power of our genes to fuel the development of truly personalised healthcare,” noted Middleton.

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