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Swiss Re shareholders agree to all proposals at 2022 AGM

Swiss Re shareholders agree to all proposals at 2022 AGM

Swiss Re’s shareholders approved all proposals put forward by the board of directors at Wednesday’s annual general meeting (AGM), the company has announced. This included the distribution of an ordinary dividend of CHF5.90 per share (about £4.81), the re-election of Sergio P. Ermotti as chairman of the board, and the re-election of all other proposed board members.

“When I took office a year ago, I emphasised that Swiss Re needed to strengthen its resilience to meet the expectations of investors, clients and employees,” Ermotti said. “Over the last year, this has been our top priority, focusing on high-quality portfolio and margins in our reinsurance business, the successful turnaround of Corporate Solutions, and the continued growth at iptiQ. We have achieved important interim goals on our way to sustainably strengthen Swiss Re’s long-term earning power, and I am convinced that we can improve our performance even further in the future.”

Shareholders approved the proposal to pay the dividend of CHF5.90 per share with a majority of 99.1% of the votes cast. The dividend is at the same level as the previous year’s distribution and reflects Swiss Re’s strong capital position and capital management priorities, the company said. The dividends will be paid out of voluntary profit reserves and will be distributed beginning April 21. From April 19, Swiss Re shares will be traded ex-dividend.

In addition to reelecting Ermotti and other proposed board members, shareholders elected Deanna Ong as a new member of the Compensation Committee. At the constitutional meeting of the board of directors, Renato Fassbind was re-appointed as vice chairman and lead independent director.

Due to Swiss Re’s new 12-year tenure limit, Raymond K.F. Ch’ien stepped down as a board member.

Shareholders also approved the maximum aggregate amount of compensation for board members for the one-year term until the completion of the 2023 AGM with 86.4% of the votes cast. Also approved was the aggregate amount of variable short-term compensation for members of the group executive committee for the 2021 financial year. Shareholders also approved the aggregate amount of fixed compensation and variable long-term compensation for members of the committee for the 2023 financial year.

Further board proposals approved at the AGM included:

  • Swiss re’s annual report (including the management report) and annual and consolidated financial statements for the 2021 financial year
  • The discharge of all members of the board of directors for the last financial year
  • The introduction of a 12-year tenure limit for all current and new board members

Swiss Re’s board also committed to increasing female representation at the board level to at least 30% by the 2023 AGM.

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Athora sees profits down in financial results

Athora disposed of non-core assets in the Netherlands and Ireland, allowing Athora Ireland to focus on its growing reinsurance business and Athora Netherlands on its leadership in the pensions market.

Over the year, the group also achieved an A- Fitch insurer financial strength rating with a positive outlook, reflecting its strong solvency capital and increased operating scale. The financial strength ratings of its subsidiaries (Athora Ireland, Athora Life Re and SRLEV N.V.) similarly improved.

Assets under administration, however, decreased from €82 billion in FY2020 to €79 billion due to rising interest rates corresponding to a reduction in related insurance provisions. Group IFRS profit before tax dropped to €428 million from FY2020’s €709 million, which Athora attributed to the non-recurrence of the one-off gain on acquisition of Athora Netherlands (EUR213m) in 2020.

An asset rotation strategy Athora executed in the Netherlands, Belgium, and Germany in 2021 helped it achieve returns above target, or an operating capital generation of €272 million from €53 million in 2020.

“We ended the year with most business units achieving strong increases in solvency capital and a robust group solvency capital position. In addition, our leverage ratio is at our medium-term target, and we have achieved credit rating upgrades to A-. Athora is extremely well-positioned for the next stage of our journey,” group chief executive officer Michele Bareggi said.

“Looking ahead, we will continue to focus on implementing the key elements of our business model, building on the strong results that we have achieved to date. We want to realise our full potential as a leading European insurer, which means maturing our operations and controls and driving forward our sustainability initiatives to ensure we increase value to all our stakeholders.”

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Clear Group names new chief operating officer

“Phil is a tremendous appointment for the Clear Group as we continue to deliver on the next phase of our development,” said Mike Edgeley, chief executive officer of the Clear Group. “He brings a broad range of experience across distribution, pricing, operations, underwriting and product development, which will undoubtedly add real value to our exciting growth plans.”

Prior to joining the Clear Group, Williams (pictured above) undertook several roles at Simply Business, one of which was as the managing director for the global MGA. He was instrumental in setting up and supporting growth in the UK and North America. It was during this period when the company grew from 170 to 1,200 employees and earned the Sunday Times “Best company to work for” recognition in 2015 and 2016.

Outside his main line of work, Williams is also a non-executive director of the Society of Underwriting Professionals.

“I am delighted to be joining the Clear Group at such an important stage of its journey,” Williams said. “Mike and the team have put in place an exciting strategy for the coming years, and I look forward to playing my part in delivering significant growth and continuous improvement for our business.”

The appointment is still subject to regulatory approval.

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Study breaks down electric cars against their petrol equivalents

All 13 electric cars analysed were cheaper than their petrol or diesel equivalent models if bought upfront, saving drivers £3,862 over the average ownership period of seven years. Seven of the 13 were cheaper across a four-year lease term, while four were cheaper on a three-year PCP agreement.

The savings on electric cars were driven by lower average annual running costs – £1,054 cheaper on average annually than a petrol or diesel car – although their average purchase price was still higher than equivalent petrol or diesel cars. Of the electric vehicles analysed – ranging from entry-level ones such as the Volkswagen e-UP (£22,585) to high-end cars such as the Tesla Model 3 (£42,990) – the average cost of an EV was almost £7,000 more than the average petrol or diesel car.

Thanks to the lower running costs, drivers who bought any of the 13 EVs analysed would recoup some of their initial outlay over seven years, with 10 of the 13 cars saving over £2,000.

The biggest annual saving came from charging the vehicle instead of paying for petrol or diesel. EV drivers paid just £467.40 to charge their car each year, based on driving 8,000 miles. Petrol and diesel drivers paid £1,199.40 for the same mileage – a difference of £732. 

The other significant saving for EV drivers came from not having to pay tax on the vehicle, which for petrol and drivers came up to £193.68 annually.

For drivers unable to buy the car outright, leasing was found to be better than taking out a PCP contract. Except for the VW ID3, every electric car looked at was significantly cheaper to lease over a four-year period than via PCP on a three-year contract.

While only a handful of the EVs had cheaper annual lease costs than their petrol or diesel equivalents, the cheaper running costs allowed seven of the 13 to provide savings over a four-year lease. Only four of the 13 cars recouped money over a three-year PCP, with the MG5 Long Range Excite recouping the most at £2,270.

In addition to substantially cheaper running costs, average annual maintenance for an EV, including a service and replacement tyres and brakes, saved drivers £200. LV= found this was mainly because EVs have very few moving components, making them less likely to break down as they age and cheaper to maintain.

“Despite the upfront sticker price of an electric car being higher than the equivalent petrol or diesel car, it pays to look at all the costs involved,” said Gill Nowell, head of EV at LV= General Insurance. “Even with escalating fuel and energy costs, if people can afford to make the switch to an electric car, either new or second-hand, then charging up with energy at home rather than filling up at a petrol station is far cheaper – and better for the environment and our local air quality.”

LV= has also debunked the assumption that EVs are more expensive to insure. The Electric Car Cost Index showed that premiums were on average cheaper for the EVs analysed, with some cars (Vauxhall Corsa-e) cheaper to insure by up to 33% than their petrol or diesel equivalents.

In April 2019, LV= General Insurance launched the UK’s first car insurance product developed solely for electric cars. The product meets the specific needs of electric car owners, including cover for home charging cables and access to a network of specialist electric car repairers across the country.

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Bruce Stevenson to open fifth office in Scotland

Commenting on the expansion, Bruce Stevenson CEO Edward Bruce said: “Our new office allows us to increase our presence in a dynamic part of the country, with a representation from a number of industry sectors, which align well with our overall offering.”

Bruce Stevenson’s further expansion in Scotland follows its solid financial performance in 2021, with a 7% increase in revenue and gross written premium (GWP), particularly with trading income up £600,000 to £8.7 million and GWP at £44 million. It aims to reach double-digit revenue growth in 2022.

Aside from launching a new office, the firm has made a few senior appointments, naming Graeme Christie as its new commercial director and Ian H Smith as its new education sector director.

Graeme Christie has over 25 years of experience in the commercial broking market, holding various roles with independent and global insurance brokers. He joined the firm from Marsh Commercial, where he was a regional development director for Scotland North.

Commenting on his appointment, Christie said: “Bruce Stevenson has some of the most highly qualified and sector-specific experience in the market, which gives us a really strong base from which to further expand the business and the team. Having spent most of my career in the Perth and Dundee area while operating across Scotland and the UK, I’m excited about the new office opening in Perth.” 

Smith brings over 35 years of experience in the insurance market and is a leading adviser to independent schools in Scotland, having built strong working relationships at bursarial level across the sector. He joined the firm from Marsh, where he served as vice president, responsible for managing the insurance and risk management requirements of education establishments at Marsh’s education practice.

He commented: “With Bruce Stevenson providing a local service to schools across Scotland, and backed by the strength and capabilities of Aston Lark, I am greatly looking forward to contributing to ongoing growth in this sector.”

Bruce added: “Bringing Graeme and Ian on board improves our offering to clients. They are both at the head of their fields, and we look forward to their contributions to the business.” 

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Arch Insurance continues hiring spree

Arch Insurance continues hiring spree

Arch Insurance International has appointed Richard Smith its new senior warranty & specialty affinity underwriter, effective immediately.

Smith boasts a wealth of insurance experience spanning the Lloyd’s and company markets. Most recently, he was a director at Newpoint Insurance Brokers, having joined the company in 2007. He also served as a senior risk and pricing analyst at Advent Solutions Management and began his insurance career at Domestic and General.

In his new role at Arch Insurance International, Smith will be based in London, supporting the growth of the company’s warranty & specialty affinity portfolio alongside a team recognised as a market leader in providing insurance and reinsurance solutions across a broad range of warranty, creditor, and added value ancillary products. Smith will report to Sean Fearon, head of warranty & specialty affinity.

“Richard brings over 20 years of warranty and affinity experience both within broking and underwriting,” Fearon said. “He has a deep understanding of risk and pricing analysis and extensive experience in working on international insurance and reinsurance programmes. His solution-led approach and technical expertise make him a perfect fit for our team.”

Smith’s appointment follows Arch Insurance International’s appointment spree in March, all effective immediately:

  • Janet Brook, Tilly Milnes, and Sheena Hooda joined Arch Insurance International’s claims team as senior claims handlers;
  • Linda Daly took up the role of senior underwriter for executive assurance; and
  • Ceded reinsurance senior vice president Krista Bonneau was promoted to chief reinsurance and exposure officer.

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NFP continues Ireland expansion with ReSure swoop

The deal will see ReSure’s directors – Aidan Brady, Ross Barron, and Garry Fitzroy – and employees continue in their roles and remain fully engaged in the business’s growth, working with NFP.

“I cannot let this moment pass without acknowledging the overwhelming support we have enjoyed from our loyal clients and our excitement in continuing our strong partnership for years to come,” Brady said, adding that he sees great value in integrating ReSure’s insurance solutions and services with NFP’s corporate benefits and wealth management clients.

“Our ambition at ReSure is to continue our incredible growth journey to scale the business and support our clients as they expand into new markets and sectors,” he continued. “In NFP, we have found a likeminded partner with shared values that will help us accelerate and achieve this plan and help create further opportunities for our talented team to continue to thrive and prosper.” 

The ReSure swoop is NFP’s third acquisition in Ireland within the past two years, having acquired brokers HMP Insurance and Pension Advisors and Aiken Insurance Limited.

Matt Pawley, managing director in Europe at NFP, said he is confident that the Irish-owned broker will enable NFP to elevate its business further in Ireland and across Europe as it grows organically and through additional strategic acquisitions.

“We are delighted to welcome the ReSure team to the NFP family. They are a great fit in terms of people, expertise, and attention to customer service and relationships,” Pawley continued.

John Paul Allcock, UK and Ireland managing director at NFP, added: “NFP always looks for quality over quantity, and the market feedback about ReSure’s business, culture, and management team was exemplary. We have acquired a terrific business with great clients and extremely talented brokers and client managers. Most importantly, we are confident they will fit into the culture of NFP, which encourages independence, entrepreneurial spirit, ethics, and a focus on doing the right thing for employees and clients.”

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Worldwide Broker Network selects new director for board

Worldwide Broker Network selects new director for board

The Worldwide Broker Network (WBN) has announced the appointment of Benjamin Verlingue to its board of directors. Verlingue was appointed during WBN’s annual conference in San Francisco.

Verlingue holds a master’s degree in insurance and risk management from the Université de Paris-Dauphine. He began his career in consulting at Deloitte before shifting to brokerage in the United States. He is currently head of international subsidiaries at family group Verlingue and deputy CEO of sales and business development for Adelaide Group.

“We are so pleased to welcome Benjamin to the WBN board,” said Olga Collins, CEO of WBN. “Benjamin’s leadership background, coupled with his experience in advising global clients, makes him an ideal fit for this role. At WBN, we are committed to providing our members with the best service possible, and I have no doubt Benjamin will be essential in continuing this vision.”

“I am thrilled to be joining the WBN board of directors, and proud to be taking on such a crucial role at a key time in the network’s growth in an ever-changing market,” Verlingue said. “WBN underwent significant transformation in 2021, and it’s a fascinating time to be part of the journey. I can’t wait to get to work in helping the network stay ahead of the game, tackling upcoming challenges and developing business between its member brokers.”

Founded in 1989, WBN is the world’s largest independent broker network, including more than 20,000 professionals from 100 broker members in more than 100 countries.

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HM Treasury publishes response to insurer insolvency consultation

“With the exception of proposal IV, which will only apply to life insurers, these proposals will apply to all insurers with a Part 4A permission to effect or carry out contracts of insurance as principal. However, the association of underwriters known as Lloyd’s of London would not be in scope. This is because separate legislation provides for the specific restructuring and winding-up procedures available to Lloyd’s of London.”

The proposals are expanding and clarifying the court’s existing power under the Financial Services and Markets Act 2000 to order a reduction of the value of an insurer’s contracts; the creation of a new position of a ‘write-down manager’; the introduction of a moratorium on certain contractual termination rights in both service contracts and financial contracts held with insurers; for life insurance policies, the introduction of a stay or suspension on policyholder surrender rights; and a change to the operation of the Financial Services Compensation Scheme (FSCS) in the event of a write-down to ensure protected policyholders are not financially worse off.

In its consultation, the government asked 24 questions. Responses were submitted by the Association of British Insurers, University of Aberdeen’s Centre for Commercial Law, City of London Law Society Insolvency Law Committee, Freshfields Bruckhaus Deringer LLP, International Underwriting Association of London, Interpath Advisory, Mazars LLP, PricewaterhouseCoopers LLP, and Teneo Restructuring.

Part of HM Treasury’s response reads: “The government agrees with respondents that the role and qualifications of a write-down manager will need to be set out in suitable detail, and anticipates that this will be set through a combination of legislation and PRA (Prudential Regulation Authority) policy.

“The government agrees with respondents that having a write-down manager in place to monitor a write-down, and provide oversight to the court, is important. As such, the government will ensure that a write-down is not able to proceed without a write-down manager in post. The government expects that the private sector will normally be able to provide a suitable write-down manager candidate without delay.”

“However,” continued HM Treasury, “to remove the risk that a lack of suitable candidates prevents the use of a write-down, the government is also proposing that the PRA be able to propose a member of its staff as a write-down manager of last resort. A PRA staff member would still need to be appointed by the court in the same way as a private sector appointee, with the same appropriateness tests applied, and the PRA’s existing statutory immunity would be extended to expressly apply to such a person.”

Meanwhile the government does not expect FSCS funding costs to increase as a result of the proposals.

“While new FSCS ‘top-up payments’ will be introduced in a write-down scenario, it is important to note that FSCS compensation would also be triggered in the event of insurer insolvency, the likely counterfactual absent a write-down,” it was highlighted in the 35-page document published on Thursday.

“The government does not expect the cost to the FSCS of providing ‘top-up payments’ to generally be higher than the cost of paying compensation in insolvency, particularly given that the FSCS will be able to make recoveries if the insurer’s financial position later recovers sufficiently to allow for a (full or partial) reversal of the write-down.”

HM Treasury added: “Moreover, by reducing value destruction and the extent of losses for policyholders, a write-down may in fact reduce the level of funds which the FSCS is required to provide. Importantly, the same individual compensation limits will apply following a write-down as would apply in insolvency, meaning that policyholders will not receive more from the FSCS than they would currently if their insurer were to fail.”

The government, which will continue to consult with the relevant bodies, intends to legislate for the proposals when Parliamentary time allows.

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Reaction to FCA’s new three-year strategy to improve outcomes

Fairweather highlighted how the FCA is “rightly” looking to reduce consumer harm while setting higher standards and promoting competition, as well as – in a first for the watchdog – putting published metrics against its targets.

“We are now focussing on results rather than being driven by processes,” reads part of FCA chief executive Nikhil Rathi’s message within the strategy document. “Our strategy sets out, for the first time, the outcomes we expect all firms to deliver across our markets.

“We will also be tougher on our own performance, collectively and individually. For the first time, we are publishing measures that cover a multi-year period and against which we can be held accountable to support delivery of these outcomes.”

Rathi also said: “Prioritisation is inevitable, not least due to our broad and growing remit, but our decisions will be data-based. And an outcomes-based approach guards against inconsistent regulation.”

To help realise its strategy, the regulator is recruiting 80 people.

Commenting, Fairweather stated: “We welcome the fact that the FCA sees informed and empowered consumers as an important defence against bad conduct. Over time, consideration needs to be given as to how this aim is measured. Data from firms, collated under the consumer duty, could really drive this ambition.

“We would also want to see a wider ambition that consumers improve their financial resilience.  Preventing harm, such as from investment in inappropriate high-risk products, is the first step here.”

“But over the coming three years,” she added, “using the consumer duty as a driver, we believe that firms can and should do more to improve the outcomes for consumers, ensuring that they are building their resilience over time.”

According to Rathi, the new strategy will provide a foundation for the FCA to continuously improve while enabling itself to respond swiftly not only to changes in the financial services sector but also to economic and geopolitical developments.

Offering his take on the matter, Sicsic Advisory managing director Michael Sicsic asserted: “Nikhil Rathi was brought in to fix the performance of the FCA. The strategy, business plan, and outcome metrics published [on April 07] support the drive towards the performance culture he wants to build and a way of measuring its success.”

Indeed, the new FCA strategy builds on activities that were introduced in July 2021 when the CEO committed the watchdog to become more innovative, assertive, and adaptive.

Sicsic, who runs a specialist financial services risk and regulation consultancy, went on to note: “There are a number of key headlines for all financial services firms. Firstly, the FCA will raise the bar for authorisation of new firms and individuals. It is ultimately easier to thoroughly check for bad apples before they enter the cart than to sift through thousands. It will also move faster to remove authorisation from any bad actors it identifies.

“For established and reputable firms, the new consumer duty principle is confirmed as its flagship policy. This raises the standards it expects firms to adhere to above ‘treating customers fairly’ and with a rigorous amount of reporting and internal measurement to support its implementation. Third, the use of data runs deep.”

Sicsic stressed that organisations will have to build up their capabilities to measure consumer outcomes and adequately deal with complaints before they reach the regulator.

Meanwhile he commented further: “The business plan and strategy are also noteworthy for what they don’t say. There is scant mention of ‘supervision’ for example, with language shifting towards detecting harm and fixing it. This could trail the disbandment of its dedicated supervision team in its yet to be published new target operating model.”

Rathi did say that the FCA is changing its operating model to focus more on “the problem in front of us” instead of simply addressing types of firms or sectors.

“This is an exciting time for the FCA,” declared the chief executive, who took the helm in 2020. “Two hundred (200) new colleagues have joined us since the start of the year, with dozens more joining every month, as we change the way we operate, on behalf of the consumers we serve. We are committed to holding ourselves to the highest standards in doing so.”

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