Insurance news

The biggest event on the MGA calendar is just around the corner – make sure you are in attendance for the Managing General Agents’ Association (MGAA) Conference 2022 – a lively event packed with speeches, panel discussions, and breakout sessions.

The MGAA authoritatively represents MGAs in negotiations with government and regulatory bodies whose rulings impact its members, and assists insurance carriers supporting MGAs to maintain the stability, security, and reputation of binding authority arrangements. It also runs events where brokers, insurers, suppliers, and MGAs find new ways to collaborate.

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The Aventum Group has appointed James Baird to a senior leadership position within its international reinsurance broker unit, Consilium.

In his new role, Baird will help manage the strategic direction and growth of Consilium globally, a release said. Aventum also noted that he will be responsible for bringing Consilium to new territories and product lines, while building on the existing brand and client base.

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Professional indemnity coverage is on the rise throughout the UK. Safeguarding one’s professional reputation is critical for numerous reasons, and, in recent years, workers have been choosing to invest in professional indemnity coverage to protect themselves.

Now, Insurance Business is examining how the professional indemnity landscape is taking shape – and your insights can be a part of this important industry analysis.

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Chief executive Crescens George said that the insurance industry is facing its biggest recruitment crisis in many years, leading him to establish Rise Up Insurance. This initiative will highlight the opportunities for young talent in the insurance sector, especially broking.

“The boot camps will be organised and operated by Wiser Academy staff and be held in London, Birmingham and Manchester, as well as Scotland and Northern Ireland,” George said. “We’ll teach students the basics of insurance but also good practice and workplace behaviours and then help polish up their interview skills and prepare their CVs. We will then go out to our contacts in the industry with a class of enthusiastic, young people ready for interview, with the basic skill set, and enthusiastic about working in insurance.”

George expects at least 200 of the boot camp attendees to enter the insurance industry, but he still has hopes that all 500 will make it.

In the initial phase of the initiative, Wiser Academy wrote to 3,000 secondary schools, and is also looking for speaking slots at assemblies and other school careers fairs to talk directly to 17- to 18-year-old students and explain what the insurance industry can offer.

The initiative follows a report from Aviva, published in April, which found that 99% of local brokers have a vacancy. 59% of those have vacancies which have been open for more than four months. The situation is similar for regional and national brokers, with the national brokers and almost all regional brokers having long-standing unfilled vacancies.

“We have to encourage young people into the industry if we are going to thrive and prosper in the future,” George said. “We can’t expect talent to come knocking on our doors of their own accord, especially given the competition from other industry sectors. We need to be much more aggressive in our recruitment strategy. Those of us working in the industry understand that insurance is a fantastic career choice, but we need to be much smarter in the way we recruit.”

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David Longley has joined Arch Insurance International’s (Arch) professional lines team as the new professional indemnity (PI) head, effective immediately.

Longley has more than 25 years of PI-focused underwriting experience in Lloyd’s and the company market. Before joining Arch, he had been with AXA XL since 2011, most recently as the deputy UK PI manager. He also held PI underwriting roles at ACE Group and Liberty Mutual.

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The Brunel Group has expanded its footprint in the southwest with the opening of its Newton Abbot office (pictured above).

Located at the Kingdom Business Centre on Brunel Road, the office will allow Brunel to continue building on its strong national presence, while maintaining a local, personal service, the company said. Formerly based in Bovey Tracey, Brunel said its relocation in the southwest aligns with its business plans, allowing it to service existing clients in the area while expanding its team and client base.

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According to the City of London Police, Ghedia also exploited his role at a well-known investment bank to convince friends, family and acquaintances to invest in financial products that did not exist. Instead, he siphoned £625,000 from the victims into his personal account.

On Friday, the Southwark Crown Court sentenced Ghedia to a total of six years and nine months in jail. He was sentenced to two years and three months for insurance fraud and four years and six months for investment fraud.

Ghedia will be subjected to confiscation proceedings, with the ART working to recover the illicitly acquired funds.

The police said that, throughout the course of his career, Ghedia signed up for several pension plans that allowed him to withdraw funds should he be given less than 12 months to live. In March 2017, Ghedia also took out a life insurance policy with critical illness cover, which could be claimed on in the same way should he be diagnosed with a terminal illness. The value of this policy was £1.2 million.

In October 2020, Ghedia notified the pension provider that he had been diagnosed with pancreatic cancer and had no more than 12 months to live. The company received a document supposedly from a doctor at a private clinic in London, confirming the diagnosis and adding that the cancer had spread aggressively.

Three months later, Ghedia contacted the insurer to make a claim on his life insurance policy. The insurer attempted to contact Ghedia but was unable for over a month. Ghedia said he had been admitted to hospital, making him unreachable.

Suspicions were first raised by the medical reports Ghedia presented. He had stated over the phone that he was diagnosed in June 2020, but the reports dated his diagnosis to July 2019. The insurance company contacted the doctor listed on the report, who confirmed the diagnosis and provided further documents showing that Ghedia was receiving weekly treatment for cancer.

As these documents indicated that the illness was genuine, the insurance company paid the sum of £1,201,096.97 into Ghedia’s account in May 2021.

That same month, national fraud and cyber crime reporting centre Action Fraud received a report from mortgage provider Spring Finance. Ghedia had also informed Spring Finance of his diagnosis and stopped paying his mortgage, but a fraud investigator suspected the documents were fake after contacting several listed care providers, which confirmed that the doctors named were not consultants for them.

IFED, after being tipped off by Action Fraud, launched its investigation in June 2021. It contacted the main doctor named on Ghedia’s medical reports. The doctor confirmed that he had never treated anyone with the name Rajesh Ghedia, nor had anyone with this name been a patient at his clinic.

The doctor also said that email addresses and signatures on documents provided by Ghedia were fake.

IFED officers executed a warrant at Ghedia’s home, where they discovered a wealth of evidence pointing to further fraudulent claims and leading to his arrest.

“It is both disturbing and despicable that Ghedia exploited systems which are set up to help those who are terminally ill – not to line the pockets of greedy fraudsters,” said IFED detective constable Daniel Weller. “Ghedia shows no sign of having a moral compass. Hopefully some time behind bars will give him the opportunity to find one.”

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Read more: Consumer Intelligence forms partnership with Insurance DataLab

At the heart of the report’s methodology was a simple question, Scott said: “what does good look like?”. The research rated brokers across three key structures – profitability, growth and productivity. Seven firms picked up a Broking Gold Award for 2022, while Miller Insurance Services came out top for the second year in a row.

“Looking at the report I think what stood out for me across the top performers was the sustainability and consistency they had in their results,” Scott said. “A few of the companies lower down saw big jumps up the ranking from the year before, others dipped a bit. But among the top players who received our gold awards, there was a real consistency across really all of them where they’ve been steady in the rankings.”

What sets the top ranking brokers apart from their peers, he said, is that they made small, incremental improvements on a consistent basis. Their success wasn’t down to giant shifts in their revenue, or EBITDA margins, or changes to staffing costs. For Scott, the key takeaway from the results of this research is the need for brokers to embrace a steady and sustainable approach to growth if they want to attain long-term success.

The advice not to be too ambitious might seem counter-intuitive for a broking firm, he said, but the metrics revealed by Insurance DataLab’s research corroborate the success of a slow and steady approach to winning a race. Therefore, those looking to boost their performance should be exploring the small steps that make up a monumental journey.

“The other thing that stuck out for me was that we had some companies further down the ranking who did really well on revenue growth or operating profit growth, or their profitability had been really stand-out in one year,” he said. “But for the top performers, it was that productivity element… that was quite high on all of our gold award winners. The fact they had high efficiencies and a high productivity level is what enabled them to make those small gains each year and stand out at the top.”

Read more: Entries now open for 5-Star Brokerages

The innate value of benchmarking is that it allows a business to discover new ways of achieving the best possible performance. Exploring the top insights generated by the latest Insurance DataLab broking report, Scott highlighted that while broking is and will continue to be a people business, technology is becoming increasingly important to the way that business is carried out.

“But the key here is the need to apply technology in the right way, and not just for the sake of applying technology,” he said. “The way I see technology working is you can bring it in to automate certain processes, and to speed up and reduce the cost of certain operational things – whether that’s at the quote stage or when handling claims. But the key there is that it can free up your staff to really add value to a transaction.

“I think that’s particularly important given the latest regulatory changes around fair value. You need to be showing that you’re adding value at each stage, and technology allows you to take away the boring mundane tasks and allows your staff to do the interesting stuff. That, as an aside, will actually give them greater job satisfaction and help improve staff retention and make the hiring process easier. But crucially, it will also allow you to add value to your clients, which is the key to growing sustainably.”

Don’t just see technology as something that allows you to automate, he advised, but rather something that allows you to automate in a way that adds value to your staff, your clients and the broader value chain.

Looking to the opportunities available in that tech sphere, Scott emphasised the role of embedded insurance and its potential to become increasingly important for brokers. This has traditionally been seen as more of an insurer play, he said, but given the entrepreneurial spirit shown by brokers in the UKGI space, he’s confident of their ability to get involved and create new opportunities for themselves, their clients and their insurer partners.

“I would advise brokers to really look outside the box,” he said. “Insurance is a massive market, but it’s also complementary to a lot of other markets as well. We’ve seen people coming into the insurance space from outside so I believe there could be great opportunities for insurance to diversify its revenue streams and add another string to its bow.”

Insurance businesses need to balance being proactive and reactive to the new opportunities that abound across the insurance sector, Scott said. It comes back to the advice not to be too ambitious but rather measured and motivated, and willing to understand the value in trying out new innovations without investing too heavily.

“Look at these opportunities,” he said. “There’s no harm in dipping your toe into the water and seeing if something will work for your business. If it doesn’t then you can just come out again very quickly if you haven’t invested hundreds of thousands and made a big move into something you’re not sure about. Explore each opportunity, take a small step and grow it slowly. If it’s not right for you then just withdraw before you invest too much time, money and effort…. Failure is not a bad thing if you learn from it and if you haven’t jumped in too heavily to begin with.”

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Sima Ruparelia is joining PartnerRe in London to serve as chief actuarial and risk officer from June 27.

A fellow of the Institute and Faculty of Actuaries and an EY alumnus, Ruparelia was previously chief actuary and portfolio manager for UK, Europe, global specialty, and Talbot at AIG. Credentials of the incoming PartnerRe executive leadership team member also include time spent at Equitas and Pinnacle Insurance, as well as Catlin and later XL Catlin.

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Finance and insurance took a huge hit due to the pandemic, with an average of 71.95 deaths for every 100 business births in the industry. This was 50% higher than the pre-COVID period, when there were roughly 48.01 business deaths for every 100 births.

This was surpassed only by the information and communication industry. Pre-pandemic, for every 100 businesses born in the industry, 91.51 businesses died. Due to COIVUD-19, this number increased by 89%, with 173.24 business deaths for 100 new ones.

On the flip side, the wholesale industry prospered. Pre-pandemic, for every 100 wholesale businesses born, 101.5 businesses died. This figure decreased by 20% post-pandemic, where in the last eight business quarters, only 81.44 businesses died for every 100 wholesale businesses born. 

Retail businesses also fared relatively well. Pre-pandemic, there were on average 79.75 business deaths for every 100 business births. Post-pandemic, business deaths decreased by 12%, with roughly 69.94 businesses dying for every 100 births since the second quarter of 2020.

For the pre-pandemic national average, 86.58 businesses died for every 100 that were born. Post-pandemic, this number increased by 16%, with roughly 100.67 businesses dying for every 100 new businesses.

“This data shows how much more difficult it has become to survive as a business since the pandemic,” said Ritchie Mehta, CEO of School of Marketing. “In the two years before the impact of COVID-19, on average, more businesses were created than closed each quarter. But now the numbers of company births and deaths are basically equal. As entrepreneurs look to protect themselves against a harsher business environment, the value of skilled employees has never been higher. Therefore, SMEs can take advantage of initiatives such as the Apprenticeship Levy scheme to bring in new staff or train current ones in digital and data-led programmes, with the vast majority of the training cost covered by the levy.”

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