Insurance news

Berkshire Hathaway Specialty Insurance (BHSI) has appointed Thomas Pache (pictured above) to lead its newly launched professional indemnity (PI) and cyber insurance lines in the DACH region. The company also named Kim Schumacher as senior property underwriter.

Both will be based in BHSI’s newly opened office in Hamburg, part of the company’s strategy to enhance its presence and proximity to broker partners and customers in the region.

Andreas Krause, head of DACH at BHSI, commented on the company’s expansion, stating that BHSI is increasing its expertise and product offerings in the region.

“The strength of our brand, our balance sheet, and our people, along with our ‘claims is our product’ philosophy, is an excellent match for the local marketplace,” Krause said.

Pache, who brings more than 30 years of experience in the insurance industry, will focus on providing comprehensive PI and cyber insurance solutions, particularly for customers in the information technology and software sectors.

Schumacher, with nearly 20 years of industry experience, will focus on expanding BHSI’s property business in Germany, specifically targeting the Mittelstand segment.

BHSI provides property, casualty, and executive and professional lines insurance solutions across Germany and the DACH region.

Just last month, the specialist insurer also expanded its European footprint with the opening of a new office in Milan and the appointment of Leonardo Castrichino as country manager for Italy.

The Milan office serves as a hub for BHSI’s operations in Italy, where the company is offering a range of property, casualty, and executive and professional lines products, including global multinational program capabilities.

Castrichino leads the company’s efforts in Italy, bringing nearly 30 years of experience in the European insurance market. Prior to joining BHSI, he held numerous leadership roles in the industry, most recently serving as chief operating officer for the Europe, Middle East, and Africa (EMEA) region at another global insurer.

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The significant disparity between economic and insured losses resulting from Hurricane Helene could fuel interest in mitigation efforts and community-based disaster insurance programs, such as the one currently being tested in New York City by Swiss Re, insurtech Raincoat, and other partners, according to Josh Darr, Guy Carpenter’s global head of peril advisory.

Estimates for insured losses from Helene, a Category 4 hurricane, are in the single-digit billions, with Karen Clark & Co. reporting $6.4 billion in privately insured losses across nine states.

According to AM Best, this figure contrasts with economic losses, which are estimated in the triple digits. The insured losses cover wind, storm surge, and inland flooding damages.

Karen Clark & Co. noted that much of the damage occurred far from the storm’s landfall, with significant wind damage reported in Georgia, more storm surge damage in Tampa, and the most severe inland flooding in North Carolina.

Darr pointed out that some financial impacts of the storm are still unfolding, including the cost of claims adjustments, even if no payouts are made. He also noted the potential for business losses with broader economic consequences.

One example is the temporary closure of quartz mines in North Carolina’s Blue Ridge Mountains, which are critical to the semiconductor and solar industries. Global materials supplier Sibelco has suspended operations due to flooding, power outages, and infrastructure damage caused by Helene.

Drawing a comparison to the severe flooding in Thailand in 2011, Darr highlighted how supply chain disruptions in one sector can have global ripple effects. According to ICEYE, a satellite mapping firm, more than 100,000 buildings from Florida to West Virginia were impacted by Helene, with at least 10,000 structures inundated by five feet or more of water across several states.

Most of the damage from Helene was caused by storm surge along Florida’s west coast, even though the storm remained far out in the Gulf before making landfall on Sept. 26 with winds of 140 mph in the Big Bend region. Inland flooding also affected several southeastern states.

Darr suggested that the large number of properties affected by the storm could drive up the cost of investigating claims, even those that are closed without payment.

“From an insurer standpoint if there is clearly a flood loss there are still adjustment expenses to go out and analyze that loss… 100,000 buildings impacted across a region can become an appreciable expense to the insurers,” he said.

As of Oct. 1, insurers had received 65,716 claims related to Helene, according to the Florida Office of Insurance Regulation. This number surpasses the approximately 25,000 claims from Hurricane Idalia, which struck as a Category 3 storm last year, and the nearly 22,000 claims from Category 1 Hurricane Debby earlier this year.

Darr also highlighted the growing gap between insured and uninsured losses for flood and rain-related disasters in the U.S., emphasizing that this could encourage the expansion of insurance solutions. FEMA reports that 99% of U.S. counties have experienced a flood since 1996, yet only 4% of homeowners carry flood insurance. Despite this low uptake, payouts from the National Flood Insurance Program increased more than 660% between 2000 and 2020, rising from $9.4 billion to $62.2 billion, which FEMA attributed to climate change and rising sea levels.

Darr pointed to coastal flooding during Helene, particularly in Florida, as an example of the impact of rising seas.

He also noted that the largest discrepancies between economic and insured losses in recent history – such as in Hurricanes Katrina, Sandy, and Harvey – have all involved water damage.

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Mahindra Insurance Brokers Ltd. (MIBL), a subsidiary of Mahindra Finance, has announced the launch of its reinsurance division in Dubai.

The new office will be based in the Dubai International Financial Centre (DIFC), a key financial hub in the region, and will serve the Middle Eastern and North African (MENA) markets.

The expansion is part of MIBL’s strategy to explore new opportunities in the region, grow its client base, and boost its business operations. The Dubai division will employ a team with expertise in the international reinsurance market, offering services aimed at ensuring operational efficiency and reliability for clients.

Salman Jaffery, chief business development officer of the DIFC Authority, commented on the development, noting that the firm will be joining more than 125 insurance-related entities in the DIFC.

“Our enabling world-class laws and regulations are on par with other global insurance and reinsurance hubs and will provide MIBL with the perfect platform to grow their business from Dubai,” Jaffery said.

Vedanarayanan Seshadri (pictured above), managing director and principal officer of MIBL, emphasized the importance of the new division for the company’s operations in the MENA region.

“Our presence in Dubai will bolster the specific needs of clients looking for local presence and expertise, backed by global experience while adapting to market changes,” Seshandri said.

MIBL provides services to a wide range of stakeholders, including clients, insurers, and reinsurers across the world.

The company highlighted that DIFC has emerged as a major hub for the global insurance and reinsurance industry. A range of entities, including global insurers, reinsurers, brokers, and risk management firms, have chosen the region as a strategic location to expand their presence in the region.

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Aon has announced the appointment of Alejandro Padilla Mariscal (pictured above) as the new managing director of Consulting and Science Reinsurance Solutions for Latin America.

In this role, Padilla will oversee the catastrophe modeling firm ERN Evaluación de Riesgos Naturales, which Aon acquired two years ago. He will also lead Aon’s consulting practice in the region, which has played a key role in delivering natural risk management solutions.

Aon noted that Padilla’s appointment comes at a time when climate change and emerging risks are reshaping the insurance landscape. The brokerage said that his background in reinsurance brokerage and business development will be integral to advancing modeling solutions for secondary risks and parametric structures across Latin America.

Padilla brings extensive industry experience, having held various senior positions in reinsurance and risk management. Prior to joining Aon, he was Head of Reinsurance at GNP Seguros, where he led operations from December 2022 to October 2024.

He has also served as CEO for marine and non-marine reinsurance at Som.us México and held leadership roles at Cooper Gay & Co. Ltd and Swiss Re. Throughout his career, Padilla has developed expertise in risk consulting, data analysis, and executive leadership.

Aon’s last major appointment for its reinsurance business came in July, when it announced the hiring of Marguerita Silitonga as president director of Reinsurance Solutions in Indonesia.

Silitonga, based in Jakarta, reports to Musa Adlan, executive director and head of Reinsurance Solutions in Southeast Asia. In this role, she is responsible for developing and executing strategy, driving growth, and managing all operations for Aon’s Reinsurance Solutions in Indonesia.

Last month, the global firm also released its “Ultimate Guide to the Reinsurance Renewal – September 2024” report, highlighting the contrast between the strong financial results of the reinsurance industry and the challenges faced by insurers amid rising losses and more complex risks.

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Explosive growth in renewable energy industries such as offshore wind and hydropower are driving significant demand for climate-related insurance solutions.

Data from Bain & Company shows premium revenue growth for commercial climate insurance solutions is set to more than double from around €25 billion (US$27.6 billion) in 2022 to €60 billion by 2030. 

Solutions related to renewable energy, biodiversity, environmental liability, carbon offset, new infrastructure, mobility, and advisory services will all grow significantly, according to the global consulting firm.

Some of these technologies are already familiar territory for many insurers. At the same time, newer technologies are emerging, promising growth opportunities but also substantial risks.

Three categories of climate-related insurance markets

Speaking to Insurance Business, Dr. Christian Graf, who leads the sustainability & responsibility financial services practice across EMEA for Bain & Company, noted three main categories of climate-related markets.

First, renewables like photovoltaic, offshore wind, and hydropower. These are already a well-established market for insurance companies and are currently the largest in climate solutions. “Despite its maturity, we expect it to grow significantly—about 6-10% annually,” said Graf.

Second, nascent technologies particularly around carbon capture, utilisation, and storage (CCUS), are developing rapidly. “These technologies aren’t yet at scale, so the market is still small. However, by 2030, we expect this market to grow by more than 50% annually and become significant in five to six years,” said Graf.

Finally, Bain & Company noted increasing demand for advisory services related to physical risks and climate solutions. Graf noted: “While not directly tied to gross premiums, this is another segment that will drive growth going forward.”

How are carriers approaching climate insurance?

Renewables are proving to be a crucial focus for insurers seeking to meet climate goals and align their portfolios with cleaner energy sources. However, insurers face a tricky balancing act: they must decide when and how to enter these markets without exposing themselves to unknown risks.

Insurers are taking varied approaches to these nascent technologies. According to Graf, there are broadly three types of players in this space.

The first group is taking a cautious approach, sticking to well-understood risks. “They purposely take the strategic decision as of today to focus on the risks that they know,” Graf said.

These companies are also willing to wait a few more years to see how technologies like CCUS evolve before they commit to insuring their risks.

On the other hand, the second group of insurers is more aggressive, seeing an advantage in being early movers. These companies want to familiarise themselves with emerging risks and technologies while competitors wait on the sidelines.

“They try to be the first movers to learn and gather a lot of data,” said Graf. Their rationale is that by entering the market early, they can gain a critical edge, acquiring knowledge and data that will help them scale more easily in the future.

However, early entry comes with downsides. Insurers venturing into these new areas must be careful not to let optimism about growth cloud their judgement. To price their policies effectively, insurers also need a deep understanding of the underlying exposures.

“It also involves investments on the side of the insurers,” Graf noted. “You have to understand the technology behind carbon capture. How will it scale over time?”

For the cautious players, balancing profitability in a rapidly evolving sector like climate insurance will prove challenging. In established markets, competition is already fierce. For insurers, this heightened competition can squeeze profit margins, making it harder to maintain strong financial performance.

What does growth in the climate insurance space mean for brokers?

Beyond underwriting and risk management, advisory services are also emerging as a significant area of growth.

Advisory services aren’t just a growth opportunity for insurers themselves—brokers are also well-positioned to tap into this market. Graf noted that both insurers and brokers are trying to capture a slice of the advisory pie, with many insurers making heavy investments to scale their offerings.

“A lot of players are trying to break into this advisory space, and I see insurance companies investing heavily in scaling these services across the industry, from carriers to brokers and MGAs,” said Graf.

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Nearly three in four employees in Amazon are planning to quit as they express strong dissatisfaction over the company’s mandate to work five days a week starting next year.

In a survey among 2,585 Amazon professionals in the United States, anonymous job review site Blind discovered that 73% of employees are considering looking for a new job because of the mandate.

Another 80% said they know someone who is already looking for another job because of the new policy, while 32% said they know someone who has quit because of it.

^{Source: Blind}

Amazon CEO Andy Jassy announced earlier this month that they are expecting employees to be back in the workplace five days a week starting January 2025 as they “believe that the advantages of being together in the office are significant.”

Jassy, in his announcement earlier this month, said they observed that in-office work makes it easier for teammates to learn, model, practice, and strengthen their culture.

It also makes collaborating, brainstorming, and inventing simpler and more effective, as well as makes teaching and learning more seamless, according to the CEO.

Dissatisfaction in Amazon’s workforce

But employees aren’t too pleased with the company’s order. An internal survey circulated by employees on Slack revealed that employees are “strongly dissatisfied” with the in-office mandate.

One verified Amazon professional said on Blind that their “morale for this job is gone, [I’m going to] totally check out till PIP (Performance Improvement Plan).”

^{Source: Blind}

Who will likely leave Amazon?

Pavel Shynkarenko, founder of HR platform Mellow, predicts that higher-level employees who enjoy the perks from remote work would likely resign.

“It’s likely that high-level managers and highly skilled employees will be the ones to leave, especially those over 40 with families who benefit most from remote work,” Shynkarenko said in a statement to HRD.

Younger employees, such as Gen Zs, on the other hand, might stay put despite wanting to leave as jobs are currently hard to find, he added.

“We won’t know the full impact until mid-2025 when these changes are fully implemented,” Shynkarenko said.

UserTesting, a provider of experience research, has released a global survey examining consumer preferences for insurance advice and the potential role of artificial intelligence (AI) in the insurance industry.

The survey – conducted by Talker Research – surveyed 4,000 adults across Australia, the US, and the UK.

According to the survey, 56% of respondents would rather endure everyday inconveniences – such as sitting in traffic (10%), moving back in with parents (19%), or attending a disliked concert (24%) – than navigate insurance enrolment, illustrating widespread frustration with current processes.

Insurance complexity and technology adaptation

The survey highlighted the ongoing challenges consumers face with insurance, particularly around enrolment and provider selection.

While many respondents feel confident in their understanding of their coverage, the complexity of choosing the right insurance provider and navigating the insurance landscape remains a significant pain point.

Comparing hassles

Survey participants across Australia, the US, and the UK showed a clear preference for dealing with unrelated frustrations over managing insurance complexities:

• 13% of US respondents said they would rather sit in traffic, compared to 9% of UK and Australian respondents.
• 14% of US participants would listen to one song on repeat for an extended period, while 12% of those in the UK and Australia would do the same.
• 22% of US respondents would choose to live with their parents again, compared to 18% in the UK and Australia.

Coverage confidence versus provider confusion

While many consumers expressed confidence in their coverage, choosing a provider remained a challenge: 65% of US respondents, 68% in the UK, and 60% in Australia said they were confident in understanding their insurance coverage.

However, selecting the best provider continues to present difficulties for a significant portion of respondents.

Knowledge gaps

The survey also identified areas where consumers feel most and least informed about their insurance options:

• In the US, respondents expressed the most confidence in health insurance (78%) and auto insurance (75%).
• In the UK, the highest confidence was in home insurance (75%) and auto insurance (68%).
• Australians showed the most confidence in auto (72%) and health insurance (69%).

Conversely, Americans reported the lowest levels of confidence in home (61%) and pet insurance (49%). UK respondents were least confident in pet (53%) and dental (44%) insurance, while Australians felt least knowledgeable about dental (42%) and pet (41%) insurance.

Ongoing issues

Despite their confidence in coverage, many consumers still struggle with aspects of the insurance process:

• 27% of US respondents, 28% in the UK, and 32% in Australia reported challenges in understanding the details of their coverage.
• Unanticipated premium increases were cited as a concern by 24% of US respondents, 23% in the UK, and 27% in Australia.
• Complicated claims processes were an issue for 20% of US respondents and 23% of respondents in both the UK and Australia.

AI as an emerging tool for insurance

Although human advisors remain the preferred choice for most consumers, AI is increasingly seen as a tool that can help simplify insurance decisions.

The survey revealed that 36% of respondents in the US and UK, and 25% in Australia, believe AI can assist in understanding complex insurance information.

Looking ahead, 45% of Australians, 39% of UK respondents, and 33% of US respondents think AI could play a useful role in comparing insurance plans.

Bee Nookala, principal marketing manager for insurance solutions at UserTesting, commented that consumers are asking for more transparent and straightforward insurance processes.

“While human advisors remain critical, AI offers insurers a way to help customers navigate complex policies more efficiently, provided human support is always an option when needed,” she said.

Virgin Money has expanded its insurance offerings by launching new home and landlord insurance products in collaboration with insurtech firm Uinsure. Virgin Money stopped offering its home insurance products in August 2021 as part of a broader strategic review aimed at simplifying its product offerings and focusing on core areas of business such as mortgages, savings, and current accounts.

Founded in 2007 and based in Manchester, Uinsure has developed what it calls a “frictionless” platform that allows customers to obtain insurance quickly and easily. Its UinsureCX product tracks mortgage progress and triggers relevant communications throughout the mortgage cycle, ensuring customers receive the right insurance offerings at the most appropriate times.

The partnership plans to introduce a streamlined quote process that allows customers to obtain a five-star Defaqto-rated insurance quote in as little as 30 seconds. It also ensures that new business and renewal quotes automatically reflect the lowest price available from Uinsure’s panel of underwriters.

The bank said the new insurance products are designed to meet the needs of both homeowners and landlords, and are backed by Uinsure’s customer service, reflected in its ‘Excellent’ Trustpilot rating.

Virgin Money’s home insurance product offers £1 million in building cover and £75,000 in contents cover as standard. The product also features automatic re-broking at renewal, ensuring customers receive competitive pricing year after year. The fee structure is transparent, with no charges for policy cancellations or mid-term adjustments.

The new insurance is available online, and customers without internet access can take out a policy by phone. For renewals, Virgin Money also offers multiple communication options, including online, email, post, and telephone.

See LinkedIn post here.

“Virgin Money’s home insurance product offers a market-leading quote journey in as little as 30 seconds, competitive pricing through a panel of insurers, automatic re-broking at renewal, and a transparent fee structure with no hidden fees,” said Graeme Sands, head of personal banking at Virgin Money. “In collaboration with Uinsure, who will administer our home insurance product, we provide customers with simplicity, quality, and transparency.”

Martin Schulthiess, group managing director at Uinsure, added that their technology enables the customers to “enjoy an insurance journey that’s free of the complexities they might previously have struggled with.”

“The Virgin brand is one of the most recognised globally, with a long history of pushing boundaries and innovating for the benefit of its customers,” Schulthiess said. “That way of thinking very much mirrors our own way of working and we’re extremely excited to commence our partnership with Virgin Money.”

Uinsure, led by CEO Simon Taylor, has seen substantial growth backed by LDC, a Llloyds Banking Group private equity firm. LDC’s investment in 2024 is part of a broader strategy to help Uinsure expand its market share, enter new markets, and grow its partnerships with intermediaries, building societies, and banks.

The International Federation of Red Cross and Red Crescent Societies (IFRC) has announced a historic milestone in humanitarian finance: for the first time, the Disaster Response Emergency Fund (DREF) has triggered an insurance payout due to rising demands for disaster relief surpassing its established deductible threshold.

The IFRC-DREF is a funding mechanism designed to provide immediate assistance to National Red Cross and Red Crescent Societies during disasters, particularly for smaller emergencies that might not receive global attention. According to a news release, the fund often faced challenges with depleting resources before the end of the year, prompting the IFRC to pursue an innovative solution. The IFRC secured an indemnity insurance policy with global broker Aon and its reinsurers.

Since early 2023, the DREF has been insured on an indemnity basis for an annual premium of CHF 3 million (approximately $3.4 million). The insurance policy allows for a potential payout of up to CHF 15 million ($16.8 million) when demands on the DREF related to natural hazard disasters exceed a deductible threshold of CHF 33 million in a calendar year. Once this threshold is surpassed, the commercial insurance will cover further demands on the fund.

Threshold reached for the first time

In 2023, the deductible threshold was not met, and the policy did not pay out. However, 2024 marked a turning point as the combined allocations responding to various natural hazards, particularly the recent Super Typhoon Yagi in Asia, pushed the DREF spend over the CHF 33 million mark. By the end of September, nearly 100 separate allocations had been made through the DREF, underscoring the escalating need for humanitarian aid.

Nena Stoiljkovic, the IFRC’s undersecretary general for global relations and humanitarian diplomacy, announced the payout at an event coinciding with the United Nations General Assembly in New York.

“The triggering of the IFRC-DREF insurance policy is a significant moment,” Stoiljkovic said. “For the first time ever, a single, worldwide commercial indemnity insurance policy will pay the emergency humanitarian costs of disasters.”

Stoiljkovic emphasised the sobering scale of needs resulting from the disasters of 2024, adding, “The fact the insurance is helping with the burden is good news and proof that there are innovative finance solutions that we hope to grow in coming years.”

Looking forward, the IFRC plans to expand its DREF insurance coverage beyond natural disasters to include responses to epidemics and anticipatory actions. The organisation aims to encourage grant donors to recognise the added value of contributing to the DREF fund, especially in particularly calamitous years where their humanitarian contributions could potentially be amplified through this innovative financing model.

As climate change continues to escalate the frequency and intensity of natural disasters worldwide, such measures will be critical in ensuring timely and effective humanitarian assistance.

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The Asia-Pacific (APAC) region has seen significant digital transformation in recent years, particularly accelerated by the COVID-19 pandemic. This shift has heightened cyber risks across the region, fueling a growing demand for cyber insurance solutions, according to insights from Gallagher Re.

The cyber insurance market in APAC has been expanding at a rate of nearly 50% per year, now accounting for 7% of the global market as of January 1, 2024. However, there remains considerable room for growth.

For comparison, cyber insurance premiums in the U.S. represented 0.0353% of GDP in 2022, while the average across APAC was only 0.0025%, making it at least 14 times lower. Gallagher Re highlights that while countries like Thailand, Malaysia, Vietnam, Indonesia, and the Philippines are emerging players in this space, larger markets such as China and India also have significant potential for further penetration.

A key factor driving the future expansion of cyber insurance in APAC is regulatory pressure. Countries like Singapore and China are enforcing stricter data protection laws, and compliance often requires companies to have adequate cyber insurance coverage.

Gallagher Re notes that this regulatory push could lead to increased market penetration, particularly among small and medium enterprises (SMEs), which represent a largely untapped market in the region.

Despite the growth opportunities, challenges remain. The lack of standardization in policy wording and coverage, coupled with the fast-evolving nature of cyber threats, makes underwriting and risk assessment difficult for insurers. Gallagher Re points out that the relative lack of historical claims data in this new field adds to the complexity.

Reinsurance solutions, according to Gallagher Re, can help insurers address these issues by mitigating the financial impact of large-scale cyber incidents, allowing them to underwrite larger risks and provide more comprehensive coverage.

In the medium term, Gallagher Re expects market penetration rates to rise, particularly in the retail and SME sectors. To support this growth, insurers are likely to enhance the cyber risk management services they offer to clients, helping businesses and individuals better manage their cyber exposure. This, in turn, could reduce the frequency and severity of claims.

The advancement of data science and analytics, including artificial intelligence, is another development expected to impact the sector. Gallagher Re suggests that these technologies will improve insurers’ ability to assess risks, set more accurate pricing, and manage claims more efficiently.

As APAC governments continue to strengthen their cybersecurity regulations, the demand for cyber insurance is expected to rise further. Insurers will need to stay responsive to regulatory changes and adjust their products to meet the evolving requirements across the region.

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