Insurance news

“At Swiss Re, we’ve always said that we want to be progressive,” said Pasricha. “We are a 158-year-old company. We’re the bellwether, the backstop (whatever you want to call it) of the industry, but we’re also responsible for innovation. As a reinsurer, we take a large part of the risk in the industry. Therefore, we need to be part of the solution and we need to drive and enable innovation.”

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Swiss Re launched its P&C solutions unit in 2017, with the aim of helping clients to make better underwriting and pricing decisions by using data analytics tools and other technology solutions.

The P&C Solutions unit helps insurers to increase their efficiency, steer their portfolios, and grow into new markets and segments. Its core areas of focus include: P&C analytics, property & specialty, cyber, liability, parametric, automotive & mobility, SwiftRe (online risk placement/management), and innovation.

“The tone at Swiss Re is really set by the top from our group CEO Christian Mumenthaler and all of our executive leadership,” said Pasricha. “They have the vision [which is clear through] Swiss Re P&C Solutions, to say: ‘These are the kinds of things that the industry struggles with, and this is why we want to provide these solutions to the industry.’ I think the ethos of innovation has to be driven from the top.”

One challenge that the insurance industry sometimes struggles to surpass is its inherent conservatism. The industry has to maintain a healthy balance sheet in order to meet its main purpose, but there’s always a possibility that supporting innovation and underwriting emerging risks could cause some financial turbulence.  

“The balance is always: How do you take those baby steps? How do you make progress in the industry, try and test new technology, but still make sure that you’re solid in terms of your underwriting?” Pasricha commented. “That’s the kind of balance that we always strived for at Swiss Re – making sure that the technology we deploy works. We test it and work with our partners to make sure all the kinks are ironed out, and that’s when we launch. It is a big culture and mindset issue, but we’re also very actively being clear that we will strive for that balance.” 

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It’s all about sustainability, Pasricha added. There are some innovators in the insurance industry – in fact, all industries – who deliver innovation hype, but cannot sustain their activity to deliver innovation success.  

“If you can’t sustainably produce good underwriting results, it doesn’t work and you’re not helping the industry,” said Pasricha. “If you’re in the business of creating flash in the market – creating brand, hype, and customer pull – and then trying to get sold and create lots of money for private equity, OK, that does work. But if you’re going to be sustainable, you need to make sure you’re solid on underwriting, and that takes a lot more work.”  

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MS Amlin Underwriting Limited (MS AUL) has appointed Julie Hopes to its board as an independent non-executive director.

Hopes will also assume the role of chair of the risk and solvency committee later this year, a statement from the company said. She will take over from Gilles Bonvarlet, who is retiring from the MS AUL Board after over eight years as director.

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Aon has been appointed to provide its new investment service for captive insurers to the Noble Insurance Company DAC, the Ireland-based captive insurer of food and beverage giant Kraft Heinz. Aon works with Goldman Sachs to deliver the service, which aims to make it simpler for captive insurers to identify and access appropriate, high-quality and yield-enhancing investments.

Noble provides insurance coverage to the Kraft Heinz Company. Coverage is provided to Kraft Heinz member firms that are domiciled in the European Union, Aon said. Noble is a wholly-owned subsidiary of HJ Heinz Ireland Holdings, which is in turn owned by Kraft Heinz.

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Man-made disasters accounted for an estimated US$2 billion in insured losses in the first half. That’s lower than average, likely reflecting COVID-19 restrictions, Swiss Re Institute said.

“The effects of climate change are manifesting in warmer temperatures, rising sea levels, more erratic rainfall patterns and greater weather extremes,” said Martin Bertogg, head of cat perils at Swiss Re. “Taken together with rapid urban development and accumulation of wealth in disaster-prone areas, secondary perils, such as winter storms, hail, floods or wildfires, lead to even higher catastrophe losses.

“The experience so far in 2021 underscores the growing risks of these perils, exposing ever-larger communities to extreme climate events. For example, winter storm Uri reached the loss magnitude that peak perils like hurricanes can wreak. The insurance industry needs to upscale its risk assessment capabilities for these lesser monitored perils to maintain and expand its contribution to financial resilience.”

The report estimated global economic losses from disasters at US$77 billion for the first half. That’s below the 10-year average of US$108 billion. However, the economic loss figure is expected to rise as more losses are accounted for over the next few months. The first half of the year is also not usually representative of the full-year figures, as the third quarter is historically the most prone to natural catastrophe losses.

Of the total estimated economic losses in the first half, US$74 billion were caused by natural catastrophes, while man-made catastrophes accounted for US$3 billion. Nearly 4,500 people were killed or went missing in disaster events in the first half, Swiss Re Institute reported.

Natural catastrophe losses were pushed up by extreme weather events. In February, winter storm Uri – a period of extreme cold combined with heavy snowfall and ice accumulation in the US – triggered estimated insured losses of US$15 billion, the highest ever recorded in the US for this peril. Winter storm Uri accounted for about 38% of all estimated insured losses from natural catastrophes in the first half.

In June, Europe was hit by severe weather including thunderstorms, hail and tornadoes, causing estimated insured losses of US$4.5 billion.

At the end of June, extreme heat broke temperature records in western Canada and the northwestern US, with temperatures reaching more than 115 degrees. The heat, coupled with severe drought conditions, sparked wildfires that moved south to California.

“Climate change is one of the biggest risks facing society and the global economy,” said Jérôme Jean Haegeli, group chief economist at Swiss Re. “The recent analysis from the UN’s Intergovernmental Panel on Climate Change confirms expectations of more extreme weather in the future and urgency to act to limit global warming. Working with the public sector, the reinsurance industry plays a key role in helping to strengthen communities’ resilience by steering development away from high-risk areas, making adaptation investments, maintaining insurability of assets and narrowing protection gaps.”

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The Financial Conduct Authority (FCA) said it has received a total of 2,754 allegations of misconduct for the year ended March 31.

According to the FCA’s Annual Report and Accounts 2020/21, the complaints were filed by 1,046 whistleblowers regarding fraud, money laundering and compliance violations. A total of 184 individuals and firms are under investigation for carrying out unauthorised business. The FCA issued a total of £189.8 million in financial penalties, alongside a number of prosecutions for alleged insider dealing, investment fraud or money laundering.

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Gallagher has enlisted seasoned legal and aviation expert Nick Hughes (pictured above) as consultant for its global aerospace practice.

According to the international brokerage, Hughes will support client-facing teams by providing legal input to complex insurance coverage, claims and contractual issues. He will also help grow Gallagher’s aerospace client base.

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Swiss Re Corporate Solutions has appointed Marilyn Blattner-Hoyle (pictured) as global head trade finance in its global credit and surety unit.

In this leadership role, Blattner-Hoyle will be responsible for the origination and underwriting activities across the trade finance portfolio, focusing on the development of growth opportunities, implementation of Swiss Re’s business strategy and the digitisation of its offering.

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The students will be able to take additional CII units at roughly a third of the amount charged to insurance and financial advice professionals. Students who are taking up CII qualification will become CII members for the duration of their studies.

This, the CII said, will give students access to local institute networking events, mentoring schemes and career support.

“Our Scottish corporate customers want fresh talent, which is why we work with local universities to help students in the region gain the skills, knowledge and behaviours they require to access a career in the insurance profession,” said Sian Fisher, CEO of the Chartered Insurance Institute. “We are delighted to work with one of our longstanding partners in the region, Glasgow Caledonian University (Glasgow), to innovate and develop their offering to attract more fresh talent to the profession.”

GCU is the latest among several British universities that have partnered with the CII to provide students with a pathway into the insurance industry.

Other universities include the University of East Anglia, Coventry University, Blackburn College, Manchester Metropolitan and the University of Gloucestershire.

“As a council member of the Insurance and Actuarial Society of Glasgow, I recognise this is a great opportunity for our students to gain a qualification from the CII, alongside their GCU degree, that will help them access a rewarding career helping improve consumer’s financial resilience and wellbeing, which aligns with GCU’s ‘Common Good’ mission,” said Dr Patrick Ring, reader in financial services in GCU’s department of accounting and risk.

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Ed, a global insurance and reinsurance broker, has integrated its e-trading platform with Ki’s algorithmic underwriting.

Ki is a fully digital and algorithmically-driven Lloyd’s of London syndicate offering instant capacity, accessible at any time.

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Holmes who recently started up his own business, Holmes Compliance Consultancy alongside his wife, after 20 years of doing compliance, risk and governance training for several big insurers and brokers worldwide, has a passion for the regulatory sphere. To date, he has earned over 20 qualifications in the space and now he is looking to utilise these to the benefit of smaller firms who may not be able to afford a compliance officer, or for larger firms who are looking for a fresh set of eyes.

“Having read every single FCA and PRA rule, I can do gap analysis very quickly,” he said. “Most firms don’t read all the rules, but rather a slice of them which is relevant to what they’re looking to target… so it’s a good thing to have somebody come in with this holistic approach. Some firms haven’t got a compliance officer, some firms haven’t got a compliance team – that doesn’t mean they’re not serious about compliance, just that they may not have the resources.”

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Holmes Compliance Consultancy has been founded on the premise of providing affordable, bespoke solutions across the broad spectrum of the insurance marketplace and offers a full swathe of regulatory compliance services. Barry and Charlotte Holmes set up the firm as they both relish being challenged, he said, and when COVID hit they wanted to strike out and do something different, having hit every other professional milestone they had set for themselves.

“My wife’s an underwriter, with a lot of experience underwriting so our proposition is that I’ve got the practical and compliance knowledge, and actually she just passed her first compliance qualification, very recently. And she’s also got the underwriting (know-how), so when we hold audits for Lloyd’s coverholders, she can do the underwriting audits as well.”

2021 has been a watershed year for Holmes – in addition to getting married and starting this new venture, he and his wife have moved to Italy to look after an olive grove. Going forward, he said, the ambition is to onboard clients of a range of sizes who need a compliance service, and to work with them to cultivate their success. For its first year, the firm is looking to make a name for itself in changing the narrative of the insurance market about how much of a burden regulation needs to be.

Lately, Holmes said, he’s even been speaking to some appointed representatives who are looking to take the leap of direct authorisation and want to know what it means to achieve that. There’s a lot of misconceptions around what that means, he said, and regarding how expensive it is, but the truth is that it isn’t that expensive, though it does come with more compliance burdens. A lot of compliance services firms are quoting significant figures to help professionals over that barrier which he believes is unfair as, once you understand the forms that need to be filled out, the process is actually very simple.

“Essentially, all you’ve got to do is justify to the FCA that you are competent in your role, and you’ve got the right documents and procedures in place,” he said. “And the FCA has changed the way they process these applications. If on day one, you have submitted everything correctly, and you’re not a complicated business, then you’ll get approved. But then on day one, you know you’ve got everything you need in place because they wouldn’t have approved you without it. And then all you’ve got to do is set up review dates to monitor your procedures and training, etc.”

The focus for year one of Holmes Compliance Consultancy is therefore just to help as many clients as possible and the future is already looking bright, with prospects in the market making themselves known. The beauty of the operational model of the business is that the firm has the flexibility to help a range of people and businesses explore their challenges, solve these challenges and then go about their day-to-day business. Being his own boss is slightly unnerving, Holmes admitted, as it’s very new to him, but he feels buoyed by the range of qualifications that he holds and empowered to help insurance businesses to help themselves.

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