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Lloyd’s sets ethnic minority ambition

Lloyd’s sets ethnic minority ambition

Lloyd’s of London has today unveiled its 2021 Culture Dashboard and announced its ambition that a third of all new hires across the market and corporation should come from ethnic minority backgrounds. The insurance marketplace said this should be targeted at all levels of the organisation, including among the leadership tier, and noted that the current level of representation of ethnic minorities stands at 8% in the marketplace and 22% in the corporation.

Lloyd’s highlighted, however, that though improving this representation at all levels is a priority, it requires the right data to measure its progress. Therefore, to further improve its data set, it will be mandating the collection of ethnicity data in 2021.

“Over the past 12 months we have already seen progress in this area,” Lloyd’s said, “with the ethnicity disclosure rate increasing by 11 percentage points to 60%, and 74% of firms now able to provide ethnicity data compared to 43% in 2020. We must be strong in our resolve to address this issue in a meaningful way.”

In addition to ethnicity, other key areas of focus for the Culture Dashboard, which is the second of its kind following last year’s inaugural report, include culture and gender. Lloyd’s stated it has been “reassured” to see a large increase in the proportion of risk committees (up 24%) and boards (up 31%) which cite culture as a standing agenda item and that it will continue to ensure culture remains a priority on the leadership agenda.

With regards to gender, Lloyd’s said it is pleased to have maintained progress on achieving gender balance across the market but recognises there is a long way to go yet. There has been a particular increase at the board and executive level, but Lloyd’s noted the need to increase the level of representation among direct reports of executive committees.

“From a corporation perspective,” Lloyd’s said, “we have reached gender parity at an overall leadership level. Across the market, our 35% aspiration has already been met by 28% of firms, but we must work to increase this across the board.”

Main components of its Culture Dashboard

  1. Data and targets – Lloyd’s has set its ambition that a third of new hires should come from ethnic minority backgrounds. It has also invested in its data capability to analyse trends for attraction, recruitment, progression and performance to further its understanding of how it can improve its functions. It will also publish its ethnicity pay gap annually.
  2. Talent and attraction – Lloyd’s will look to enhance its inclusive hiring practices across all roles and increase the diversity of available interviewers for interview panels. It will work with external recruiters and build more external partnerships to increase ethnically diverse shortlists for experienced hires. For early careers, it will work with the London Market Group to raise the profile of opportunities in the insurance industry.
  3. Talent management – Lloyd’s will identify participants for its leadership development programme for ethnic minority colleagues within the corporation and market, Accelerate. It will also establish sponsorship and mentoring opportunities for ethnically diverse employees.
  4. External promotion, advocacy & engagement – Lloyd’s has recruited an archivist to increase its understanding of Lloyd’s historical artefacts and will embed its commitment to ethnic diversity in its narratives about Lloyd’s. On an ongoing basis, the marketplace will share stories that illustrate and celebrate ethnic diversity within the corporation and the market.


Why micro-insurance is an untapped market for insurers

Read more: Swiss Re sees increasing demand for insurance protection

A significant part of the support that required by these communities is around the area of financial services, whether that’s insurance products or digital payment platforms. Looking at the current picture of financial inclusion, he noted that in Africa, for instance, only 3% of the continent is insured, while there are 1.7 billion unbanked people in the world.

“When it comes to micro-insurance,” he said, “we’re really trying to focus on rural areas and provide a safety net for the people we work with across the wider space. There’s a lot of different work going on around micro insurance, not just in Africa but also in Asia and Latin America as well. But there’s a lot of room for growth and some really interesting start-ups that can hopefully make a big difference in the world by increasing access to insurance.”

Farren highlighted how in a rural area the cost of a funeral can be ruinously expensive for a family, which can lead to them having to sell one of their key assets. Losing that income-generating asset will affect their future income and livelihood, which is an example of the safety net that a micro-insurance product can offer. On the health insurance side, if the main breadwinner of a family can’t go to work that burden must be shared by the family. ‘Hospital cash’, which is probably the most popular micro-insurance product, effectively pays out a specific sum per day, usually if the policyholder goes to the hospital for more than two days.

“Then if you look at the agricultural space, which is probably the most interesting in micro-insurance, we’re looking at crop, livestock and weather index products,” he said. “And the United Nations Food and Agriculture Organization revealed that farmers with less than two hectares of land produce around a third of the world’s food but they live in the areas most affected by climate change, and they have the least protection against those risks. So, you can see why it’s really important to have that safety net in place.”

Up until now, it has generally not been economical for insurers to provide such coverage to these regional businesses, Farren said, but that is rapidly changing given the role of blockchain and parametric insurance products.

The main barrier to micro-insurance uptake is the lack of education and trust around these services, he said, as many individuals or businesses may never have had a relationship with a financial institution before. Rural Inclusion does not offer insurance products itself but rather seeks to improve financial literacy and to work with providers to encourage them to develop human-centred products that are acceptable and appropriate to the micro-insurance marketplace.

Read more: Parametric insurance can help close global protection gap – Clyde & Co

“This is definitely an untapped market for insurance companies,” he said, “as technology and micro-financing are already very popular in certain parts of the world and I think insurance is the next port of call. Even if you look at insurtech funding, away from micro-insurance, you can see that there’s a massive increase, and there’s been some strong funding for insurtech in Africa. That seems to be a really big trend at the moment and they’re starting to get a lot of traction, so there’s no doubt in my mind that those insurtechs that focus on inclusive and micro-insurance will follow that trend.”

Rural Inclusion has only just launched and will shortly commence its pilot project in Uganda in a bid to understand the key issues faced by rural communities but already Farren and the non-profit’s co-founder Joseph Lukwago have been pleased by the positive reaction they have had from the insurance market. It’s great to see the community interest the initiative has generated, he said, and he is looking forward to forming strong partnerships within the market going forward.

“We’ve had some great uptake because the issue for a lot of insurers looking to get into this market is that it’s very different from what they’re used to dealing with,” he said. “They need to understand the real risks and challenges so they can design products that will work and that will sell at the end of the day. So having a partner on the ground that is working in the communities, and working with NGOs across the piece, and across countries such as Uganda, is very interesting for them.”


Allianz GCS appoints regional energy and construction head

Allianz GCS appoints regional energy and construction head

Allianz Global Corporate & Specialty (AGCS) has appointed Anthony Vassallo (pictured above) as regional head of energy and construction of its London and Nordics regional unit. He succeeded Tracey Hunt, who has left the company.

In this role, Vassallo leads the insurer’s energy and construction business in the UK, Ireland and Nordic countries. He reports to Alfredo Alonso, managing director, regional unit London and Nordics, with an additional reporting line to AGCS’ global head of energy and construction. Vassallo continues to be based in London.

“Anthony is well known and respected in our markets, and under his leadership, our energy and construction team’s expertise and knowledge is perfectly placed to respond to the fast-growing exposures of modern businesses,” Alonso said. “His range of specialty experience and knowledge supports our focus on underwriting discipline, technical excellence and portfolio management. This appointment demonstrates Allianz’s commitment to nurturing and developing our employees, highlights the strength of our internal talent and means we continue to be expertly positioned to support our clients’ and brokers’ needs in these vitally important areas of risk. I very much look forward to continuing working together with Anthony in his new role.”

Vassallo joined Allianz in 2003 and has worked in specialty lines across the London, European, Asian and South American markets on both underwriting and distribution sides of the business. He was most recently regional lead – onshore energy for RUL and Nordics. He previously led AGCS’ marine and energy team in South America, based in Rio de Janeiro.


Home insurance premiums dip slightly in past year

“The home market is already a very competitive space, which keeps premium increases largely at bay,” said Harriet Devonald, product manager at Consumer Intelligence.

Younger homeowners continue to pay slightly more for home cover than their elders, but the gap is shrinking. A homeowner under age 50 pays an average of £151 for an annual buildings and contents policy, while over-50s pay £134.

Across regions, London has the most expensive average home insurance premium at £202. Only two other areas – South East (£154) and Yorkshire and the Humber (£150) – have premiums higher than the national average of £144.

The North East (£113) remains the region with the cheapest premiums, followed by the East Midlands (£124) and the South West (£130). Premiums fell across all regions, with the largest drops in Yorkshire and the Humber (-7.9%).

Older properties remained more expensive to insure than newer ones, due to the higher cost of claims made by their owners. Older properties’ roofing, plumbing, and wiring are more likely to develop faults, and replacement materials may be expensive to source.

Homes built in the 19th century/Victorian era were the most expensive, typically costing £169 a year to insure. On the other hand, properties built since the turn of the century were the cheapest at £133.

Reductions were seen across all property age segments, and Consumer Intelligence observed the largest decrease in premiums for properties built between 1940 and 1955 (-7.4%) and between 1910 and 1925 (-7.0%).


The Insurance Octopus appoints long-time executive to top role

The Insurance Octopus appoints long-time executive to top role

Commercial insurance brokerage The Insurance Octopus has appointed Helen Bush (pictured above) as director.

Bush was the firm’s head of finance and support services for 11 years before taking on the most senior role at the company. According to The Insurance Octopus, Bush has had an influence over all aspects of the business, having worked at multiple departments.

Before joining the company, Bush was a media executive at Mediavest.

“I’m really honoured to be leading The Insurance Octopus. I’ve been with the company for more than a decade and in that time we’ve never stood still,” Bush said. “I always had a drive to improve areas of the business, creating solutions and implementing strategies to make things simpler and faster for our customers and colleagues. To deliver that approach across the whole business now is exciting, and being able to take our people on that journey with me, and then seeing the results, is very rewarding.”

“My core focus as director is to take us on to that next level,” she said. “We’re implementing new technology to make things even faster and smoother for our customers. We’re also growing our presence in the cyber market, which is an increasingly important market for small businesses.”

Founded in 2008, The Insurance Octopus now has 90 employees and posted GWP of £19 million in the financial year ended April. In 2016, the business was acquired by Verastar Group.

“Helen is an outstanding leader, and the work she has done to grow The Insurance Octopus is phenomenal,” said Lee Hull, CEO of Verastar. “Helen already has exciting plans in place to strengthen and shape The Insurance Octopus for the future. She is well placed to take leadership and reach into new markets within the insurance industry.”


Lloyd’s Market Association names six new board members


The Lloyd’s Market Association (LMA) has appointed six new board members.

The new board members are Hugh Brennan, CEO of RenaissanceRe Syndicate Management; Dominick Hoare, group CUO of Munich Re Syndicate; Kate Markham, CEO of London market at Hiscox; Chris Smelt, executive director of Managing Agency Partners; Rachel Turk, head of corporate development at Beazley, and Sarah Willmont, joint active underwriter at Canopius.

According to LMA, each of the appointees brings deep expertise across various disciplines, providing support to the market in areas such as digital trading, underwriting leadership, strategy, corporate development, data analysis and syndicate management.

The appointments also bring the number of female LMA board members to seven, almost double the previous number. In May, LMA stated its goal to have a more diverse board, with at least 30% of its board members being women or coming from an ethnic minority by the end of 2023.

“It gives me great pleasure to welcome our highly-regarded and exceptionally capable new members, who bring a wealth of expertise that will be invaluable to the LMA and the wider market,” said LMA chief executive Sheila Cameron. “We are also delighted that, with these appointments, the LMA is closing in on its diversity target, with more than a quarter of our board now made up of women. Today’s announcement marks a further important step toward achieving a diverse board, in support of broader efforts to attain greater diversity at a market level, and we remain determined to reach our target by the end of 2023.”


Guy Carpenter: (Re)insurance sector stays resilient through challenging market

Lara Mowery, the global head of distribution at Guy Carpenter, led the panel. She was joined by: Sebastian Cook, managing director and head of London Europe; Christopher Ross, managing director of treaty broking; Shiv Kumar, president of GC securities; Dr Jessica Turner, managing director for catastrophe advisory; and Erica Davis, managing director and global co-head of cyber.

In the briefing, Mowery claimed that reinsurers’ risk appetites and product offerings continue to evolve in response to emerging market realities. Meanwhile, differentiation remains valuable.

 “Some drivers of uncertainty are dissipating. Primary rates are stabilizing, and ample traditional, as well as alternative capital, is bolstering the sector,” she continued. “The market will continue to monitor how COVID-19 claims are resolved and how the losses of 2021 develop while also turning attention to evolving risks including cyber and climate change.”

Cook stated that the US Property Catastrophe Rate-on-Line (ROL) Index increased by 6% for renewals from January through July, around half of the increase experienced over the same period in 2020. Meanwhile, in Asia, the increase was approximately 5%.

Overall, ROL levels were impacted by several factors, including some upward shifts in retentions, particularly on loss-impacted programmes, additional limits purchased on the top end of programmes, and increased pricing.

Ross explained that multiple counterbalancing factors are impacting the marketplace, with capacity reductions, retention increases, coverage restrictions, and focus on client risk-management strategies affecting levels of rate increases.

“Engagement between all parties has been remarkable during this unprecedented period. Heading into year-end renewals, we expect this positive momentum to continue and lead to an orderly renewal period with ample capacity to support cedents’ reinsurance strategies,” Ross said.

Meanwhile, Kumar highlighted the ongoing robustness of the capital markets and the growth of catastrophe bonds over the past 12 months.

Aside from the factors mentioned above, 2021 is becoming the “year of ESG” as climate change and other environmental risks remain a key concern for CEOs worldwide regarding likelihood and their impact, according to Dr Turner. As a result, Guy Carpenter and Marsh McLennan are working with clients to help them address the broad range of ESG challenges they face.

“We are able to advise on the expectations of investors, rating agencies, and regulators with regard to ESG, identifying what good looks like and helping companies develop strategies to manage the transition toward their own net-zero targets,” Dr Turner said.

Meanwhile, Davis pointed to the growing and evolving impact of cyber risk as a further driver for change in the (re)insurance sector.

“Across the industry, loss-development assumptions for cyber risk are again being revisited in 2021 to reflect the effect of the current claims activity,” she said.

“For attritional impact, a higher propensity of cyber incidents, particularly ransomware attacks, is likely to hinder a near-term reversal of claims-cost trends. Responding to a continued uptick in both frequency and severity, this was the year for cyber underwriters to take action.”


Want your business to survive COVID? Here’s how…

An example of this was recently demonstrated by the legal protection and assistance provider ARAG which extended its accreditation under ISO standards, by adding 22301:2019 to its certifications. Providing insight into what this means, Simon Barrett (pictured), chief financial officer at ARAG noted that many organisations are familiar with the ISO 9000 series of quality management systems which provide global standards that are met by more than a million certified businesses around the world.

Read more: ARAG achieves ISO certification

However, he added, there are hundreds of different ISO certifications that cover everything from food safety to energy management. In the case of ISO 22301, this certification is all about preparing a business for the worst.

“It’s rarely possible to predict what form a disaster will take, when it might happen or how long its effects might last,” he said. “The global pandemic has been the perfect example. What businesses can do is make sure they have the business continuity systems in place that will make the company more resilient and adaptable, allowing them to minimise the impact of often unforeseeable disruption. ISO 22301 specifies the requirements of such systems to ensure they are robust and up to the task, whenever it might arise and whatever form it may take.”

Examining how ARAG’s decision to undergo this ISO certification first came about, Barrett highlighted that the provider achieved the ISO 27001:2013 certification, the standard for information security, in 2015 and already had robust business continuity management systems in place. While the decision to pursue ISO 22301 certification was not entirely motivated by the pandemic, he said, its experiences in 2020 certainly provided the impetus to do it now.

“The massive organisational shift that ARAG, like all businesses, had to make in 2020 was remarkably smooth, but it underlined the importance of our business continuity management systems,” he said. “Partly because the systems worked so well under such testing circumstances, we had both the time and the experiences to reflect on the process. Rather than pat ourselves on the back for being prepared, we looked at how we could document what we had learned and where we could improve. ISO certification provides the perfect mechanism for doing that.”

ARAG initiated the company-wide project in February of 2021, he said, and achieved ISO 22301:2019 certification in June.

Read more: ARAG announces Which? partnership

Barrett highlighted the importance of firms documenting their learning and experiences when it comes to the subject of resilience and adaptability. Whatever systems or processes might already be in place, he said, there is always room for improvement. It’s impossible to predict every possible scenario when preparing a business for such events, but failing to learn from experiences and adapt plans to increase resilience could be the difference between survival and organisational failure.

“It’s vital to have a solid and tested framework, in which experiences can be documented, improvements planned and changes implemented,” he continued. “The cost of failing to do so could literally be the end of the business.”

The question of whether or not the COVID pandemic has increased the importance of this has been one raised across several industries. Offering his perspective, Barrett stated he does not believe that the pandemic has actually made business continuity planning any more important but rather that it has accelerated how important it really is. Many businesses that may not have been well-prepared will have survived the past 18 months, he said, but they will have incurred much higher costs or lost more business than they might have otherwise.

“The business world has already been transformed but the COVID crisis is far from over and who knows what other events or challenges may emerge,” he said. “Businesses that have robust, up-to-date plans are the most likely to survive, but also the most likely to thrive on the other side of a crisis.”


CII unveils new Society of Underwriting Professionals chair

Hunt started her insurance career as an account handler with Willis in 1990, before taking on a claims manager role at Lambert Fenchurch. She then joined RSA in 1998 as senior development underwriter, progressing through liability and property roles before becoming regional manager. Before taking on her current role at RSA in 2018, she served as MD of the Insurance Corporation of the Channel Islands (part of RSA Group).

Hunt replaces David Williams, MD of underwriting & technical services at AXA, in her new role as chair.

Commenting on her appointment, Hunt said she was delighted to take up the opportunity and grateful for the support of her advisory board colleagues. She said that since joining the board in 2019, she had seen SOUP create strong foundations for its members through the provision of regular guidance and insight throughout the COVID-19 crisis.

“I’ll now be focused upon building on that success by developing strategic approaches to some of the biggest issues that we face in our sector such as skills, technology and trust,” she said. “For someone entering the profession now, data analytical skills and understanding new technology are crucial to success. We also need to help customers understand the value of what we are offering and give them the confidence and trust that the insurance industry will support them when the time comes.”

Hunt emphasised the CII’s purpose – to build public trust – and said this must remain at the heart of what the institute does to ensure that customers are well served. Underwriting is a challenging and rewarding career, she said, and SOUP’s members must be provided with all the tools required to navigate the business environment and realise available opportunities.  
Sian Fisher, chief executive of the CII, added that the CII’s insurance societies are sector-specific professional communities that provide members with relevant and insightful learning.

“I have no doubt Mandy’s experience and leadership will continue to drive forward SOUP’s growing engagement with the underwriting sector,” she said. “My thanks to David, who has been an excellent chair to the advisory board. I look forward to working with Mandy and the other board members in the years ahead.”


QBE Europe names first chief customer officer

QBE Europe names first chief customer officer

QBE European Operations has appointed Andy Besant (pictured above) to the newly created role of chief customer officer.

In this role, Besant will be responsible for QBE European Operations’ sales strategy, distribution, client proposition, the management and development of major trading partnerships, major client relationships, and other priority customer segments. He will report to Cécile Fresneau, managing director, insurance.

Besant is currently managing director for travel experiences at Collinson Group, and he will join QBE before the year ends. Earlier in his career, he held senior sales and distribution leadership roles at HiFX and American Express.

“Our overall business and customer strategy is at the heart of this role as we continue to deliver value to our customers in a responsible, accountable way to ensure long-term sustainable relationships,” Fresneau said. “Andy will bring further customer experience in terms of his mindset, insight, and delivery. I look forward to welcoming him to my team towards the end of this year.”

QBE European Operations is the European arm of Australia-headquartered QBE Insurance Group. It offers property, casualty and motor insurance, as well as specialist financial lines, marine and energy products to business clients of all sizes.


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