Insurance news

There are major concerns among brokers about the lack of capacity in the non-standard insurance market, according to Prestige Underwriting’s market survey.

Conducted by Context Skythorn for the managing general agent in May, the poll found that 85% of personal lines brokers believe that there are not enough insurers providing capacity for non-standard business, even as the market is expected to grow.

More broadly, 79% of brokers across the whole market find it difficult to secure coverage for clients with specific non-standard risks.

Key issues also include service quality and risk appetite. Nearly half (48%) of brokers reported that capacity providers are too slow in responding to new business queries. Moreover, 91% of brokers working with non-standard risks share the view that all insurance providers should adopt a wider risk appetite.

Insurer support is another area of dissatisfaction among brokers. Over half (57%) of the respondents feel they are not adequately supported by insurers to effectively serve customers with non-standard insurance needs.

Meanwhile, there is notable recognition of the importance of rated capacity. Approximately 34% of brokers see rated capacity as business-critical, while 49% consider it important.

Tim Baxter (pictured), head of broker development & partnerships at Prestige Underwriting, stated: “The results of our survey underscore a pressing need for improvement in the non-standard insurance market.

“While brokers regard Prestige Underwriting positively, it’s clear that the broader market must address significant concerns around service provision and capacity.

“At Prestige, we are committed to consistently enhancing our services, and we hope to see a collective effort from all providers to better support brokers and their clients as the non-standard market continues to expand and evolve.”

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Northeast-based property and casualty (P&C) insurance holding firm Kingstone Companies has announced the finalization of its catastrophe reinsurance program for the period from July 1, 2024, to June 30, 2025.

Jennifer Gravelle (pictured above, left), chief financial officer at Kingstone, highlighted the placement and how it compared to the previous treaty period.

“Kingstone has finalized its 2024/2025 catastrophe reinsurance placement. The company purchased $275 million of total catastrophe limit and reduced its first event retention to $5 million. The total cost is approximately 14% of projected direct premiums earned, a significant reduction from 19% for the previous treaty period,” Gravelle said.

In a news release, Gravelle highlighted that last year, the company tightened underwriting and curtailed new business writings to better manage catastrophe exposure and reduce probable maximum loss (PML). Although reinsurance pricing increased, it was not as significant as projected.

As a result, Kingstone was able to lower its 2024/2025 reinsurance treaty cost by about $6 million, improving projected full-year earnings by approximately $0.21 per share and providing better protection with a lower first event retention. These savings will be reflected in the third and fourth quarter results of 2024.

Meryl Golden (pictured above, right), chief executive officer of Kingstone, thanked the reinsurance support from the firm’s more than 25 partners.

“In 2024, with expectations of the reinsurance market softening and confidence in our rates, we re-adjusted our underwriting guidelines to accept more new business. This has resulted in more than 20% premium growth in our core New York State business, which continues to accelerate, while we were also able to significantly reduce the cost of this year’s reinsurance placement,” Golden said.

Kingstone is a Northeast regional P&C insurance holding company with its principal operating subsidiary, Kingstone Insurance Company (KICO). KICO, a New York domiciled carrier, writes business through retail and wholesale agents and brokers.

KICO actively writes personal lines and commercial auto insurance in New York, and in 2023, was the 15th largest writer of homeowners insurance in New York. KICO is also licensed in New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine.

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Ariel Re, a global reinsurance firm with offices in Bermuda, London, and Hong Kong, has introduced a new group of summer interns at its Bermuda location.

The four Bermudian students will gain insights into the operations of a reinsurance company and expand their industry knowledge.

The students include Gaby Furr from Queen’s University, studying political science and economics; Heston Kessell from the University of Guelph, studying economics; Moriah Wheddon, an accounting student at Bermuda College; and Matthew Brookes from the University of Kent, studying finance and investment.

In its fourth year, the internship program offers exposure to various roles within the reinsurance sector, including underwriting, claims, catastrophe modeling, and actuarial science.

The interns will work in different departments, engage in multiple projects, and attend daily meetings.

“We look forward to the fourth cohort of internship students joining us at Ariel Re this year, and to another year of developing reinsurance talent,” Ariel Re head of human resource Lindsay Hyland said.

Hyland added that the new group of interns underscores Ariel Re’s commitment to fostering career and knowledge growth in reinsurance, expressing hope that some may pursue permanent roles within the company.

Ariel Re provides a range of insurance and reinsurance solutions through its offices in Bermuda, London, and Hong Kong, serving a diverse client base. Operating through Syndicate 1910 at Lloyd’s of London, Ariel Re also offers access to Lloyd’s Europe.

Back in April, Ariel Re and Hiscox Re & ILS have announced the formation of CyberShock, a cyber catastrophe consortium.

CyberShock is also designed to ensure better certainty of coverage for significant cyber incidents, including service and hardware supply chain events, cyber propagation events, software supply chain disruptions, and catalytic cyber events.

“Against a backdrop of both a lack of clarity around cyber event definitions and meaningful capacity in the cyber reinsurance marketplace, we believe the CyberShock consortium can act as a positive catalyst for the market,” Hiscox Re & ILS chief underwriting officer Matthew Wilken said.

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KPMG is letting people go in the UK after recently announcing the British unit’s merger with KPMG Switzerland.

On May 24, KPMG UK and KPMG Switzerland confirmed their planned combination, noting that the resulting entity will be the second biggest KPMG operations within the group’s global network.

UK chief executive and senior partner Jon Holt described the move as a “historic moment” for the two KPMG partnerships.

“We will be stronger as one combined firm and together we will have the scale to significantly enhance our ability to deliver great outcomes for our clients both internationally and within our domestic markets,” Holt commented less than a month ago.

“Merging brings huge benefits for our clients, our people, and our partnership and means we can now grow faster, be more profitable and invest together to create new services in a sustainable way.”

Now, according to Financial Times sources, UK colleagues were notified on Thursday about a retrenchment set to impact around 200 employees in back-office and client-facing positions.

The plan, according to the report, is to reduce duplication by combining certain functions. KPMG UK, which is manned by over 17,000 people, already said goodbye to more than 200 staff at the end of 2023.

According to an FT source, the consultation process on the proposed redundancies would be finalised by the beginning of October.

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^{Image credit: Photo released by Sian Hammond’s family via Cambridgeshire Constabulary}

Cambridge Crown Court has been told that the man accused of killing his wife in Histon had paid her life insurance less than a week before she was found dead last October 30.

According to Christopher Paxton KC of the prosecution side, 47-year-old mortgage broker Robert Hammond made Sian Hammond’s (pictured) Legal & General policy up to date by paying in late October 2023.

No more than five days later, Robert made a 999 call to say Sian was not breathing – the 46-year-old was pronounced dead in their Cambridgeshire home.

Citing the findings of a post-mortem examination, the prosecutor told the court that Sian had been strangled. It was also established that she suffered other injuries, while Robert claimed he had found the mother of his two teenage children face down on the bed.

It was highlighted that at the time of Sian’s death, Robert was under extreme financial pressure due to what Paxton called “a surging mountain of debt” worth around £300,000. His wife’s life insurance policy would have paid out £450,000.

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Global insurance intermediary group Howden has chosen Paul Hipson (pictured) to take on the newly established role of London broking head for the corporate & commercial division within Howden UK & Ireland.

As head, Hipson will oversee the London broking team, which primarily assists Howden UK&I in placing property, casualty, and motor business into the market.

The new role is integral to the company’s strategic growth initiatives, and Hipson will focus on expanding broking operations nationally, fostering relationships with insurer partners, and enhancing support for colleagues to better serve clients.

The London broking remit adds to Hipson’s current duties leading the London corporate existing business team, reflected in his updated title of head of London corporate and broking.

Hipson, whose credentials span nearly 21 years with Howden (including Aston Lark and its predecessor firms), will report to chief placement officer for corporate & commercial Paul Hasib. Prior to his widened function, Hipson led the London corporate existing business team through significant development.

“I’m really excited about this new role and passionate about broking, so I’m looking forward to working more closely with our insurer partners and colleagues to help grow and enhance our broking proposition, focussed always on delivering the best service and solutions for our clients,” he commented.

“There is a talented group of individuals within the existing broking and placement teams who do a fantastic job, and we’ll be building on these strong foundations as we continue this exciting growth journey.”

Meanwhile Hasib remarked: “Paul has a proven track record of achieving great client and management results. This role is perfect for moving those outcomes to the next level.”

Headquartered in the UK, Howden operates in 55 countries and employs 17,000 people. The global business handles £30 billion of premium on behalf of clients.

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Following the UK’s announcement of around 50 new sanctions against Vladimir Putin’s “war machine” last week, Russian insurer Ingosstrakh Insurance Company is looking at the pathways it can take, including possible legal action, to contest its inclusion.

When the sanctions were unveiled, the UK government noted: “New targets include ships in Putin’s shadow fleet, institutions at the heart of Russia’s financial system, and suppliers supporting Russia’s military production. 

“These new sanctions, announced while the Prime Minister attends the G7 Leaders Summit in Italy, will bear down on Russia’s ability to fund and equip its war machine and show the UK’s steadfast support for Ukraine.”

Among those sanctioned are suppliers of munitions, machine tools, microelectronics, logistics, or other supplies; entities connected to Russia’s financial system; and groups that operate in or support the Russian liquefied natural gas and civil nuclear sectors.

Ingosstrakh, whose offerings include marine insurance, is the only insurer on the new list. A Bloomberg report highlighted: “Sanctions against Ingosstrakh are notable because it is a major provider of coverage for the commercial fleet moving Russian oil, largely displacing insurers based in the UK and Europe.”

Now Ingosstrakh is said to be working on getting the sanctions lifted.

In an emailed statement to Reuters, the insurer said: “The reasons pertaining to the OFSI (Office of Financial Sanctions Implementation) sanctions upon Ingosstrakh remain unclear to us since Ingosstrakh operates in strict compliance with all applicable legislation and follows all due compliance procedures.

To date, under its Russia sanctions regime, the UK has sanctioned more than 2,000 individuals and entities. Based on 2021 figures, over £20 billion of UK-Russia bilateral trade is now under full or partial sanction.

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Munich Re has released its Climate Risk Preparedness Survey 2023/24, underscoring significant concerns about climate change and its impact on weather-related disasters.

The survey, conducted globally, reveals varying levels of preparedness and perception regarding climate risks among companies, the public, and authorities.

The year 2023 marked the hottest year on record, with extreme temperatures contributing to severe weather events. In both the US and Europe, losses from thunderstorms reached unprecedented levels. Against this backdrop, Munich Re sought to gauge whether different sectors feel prepared for these escalating climate risks.

The survey indicates high levels of concern about climate change, though there is a noticeable gap between concern and willingness to invest in preventive measures. Respondents affected by past weather disasters expressed heightened concern and a greater readiness to invest in loss prevention.

Munich Re notes that these findings highlight areas where additional investment in preventive measures and integration of insurance mechanisms into comprehensive risk management strategies may be needed.

How prepared are businesses to tackle climate risks?

A significant majority (80%) of respondents expressed concern or great concern about the impact of climate change. Conversely, about 20% reported being either not particularly worried or had not considered it.

Regional differences are notable. In emerging economies such as South Africa, Brazil, and India, concern about climate risks is higher compared to developed economies like Japan, Germany, and China. This discrepancy may be due to the higher preparedness and financial resilience of stronger economies.

European countries, generally less exposed to extreme natural disasters, exhibit lower levels of concern. However, 2023 saw record damage from severe thunderstorms in both the US and Europe, often accompanied by tornadoes and hail.

In Japan, despite the country’s vulnerability to natural disasters, strict building regulations and a focus on earthquake risks may contribute to lower expressed concerns about climate change. Japanese respondents tend to prioritize earthquake prevention and risk awareness over weather-related disasters.

Respondents’ concerns about the negative impact of climate change on their companies mirrored their overall concerns. Senior managers (C-level) exhibited more serious worries compared to lower-level employees.

Additionally, concern about climate change’s impact on companies has increased over the past decade, particularly among managerial roles and respondents in emerging countries.

The survey’s findings indicate that pure property damage is not the primary concern for any group or region. Instead, business interruption and loss of revenue are seen as the most serious risks. For top managers, supply chain interruptions also emerge as a significant risk, leading to revenue loss and business disruption.

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Global reinsurer Swiss Re has indicated that the insurance industry has significantly underestimated the impact of recent natural disasters in Europe and has raised concerns about some regions becoming uninsurable.

Gianfranco Lot, the group’s chief underwriting officer for property and casualty reinsurance, noted that models were substantially off in predicting the damage from events like the Turkey earthquake, the floods in Germany, and the hailstorms in Italy.

“Whether it’s the Turkey quake… or the floods in Germany or the hailstorms in Italy, models were off by factors as opposed to 10 or 20%,” Lot said to the Financial Times.

In 2023, global insured losses from natural catastrophes surpassed $100 billion for the fourth consecutive year, with $6.2 billion attributed to the Turkey earthquake.

Lot emphasized Swiss Re’s significant investment in improving its natural catastrophe models by incorporating more data. This effort aims to enhance the accuracy of predictions regarding the impact of such events.

Swiss Re identified the underestimation of extreme weather event costs as an industry-wide issue, stemming from inadequate data on current exposure and risk values. The increasing frequency and intensity of extreme weather events, driven by global warming, have escalated costs for the insurance and reinsurance sectors.

Homeowners worldwide are facing higher insurance premiums or struggling to obtain coverage, prompting discussions on the extent of government intervention needed to mitigate climate change costs for consumers. Lot stated that government intervention is necessary and beneficial in high-risk areas that have become uninsurable.

In the United States, the debate over disaster repair costs has been particularly contentious. Some home insurers have withdrawn from high-risk areas, such as parts of California. US home insurers often require local regulatory approval for pricing changes, leading to industry accusations that they cannot keep up with rising claims costs.

A senior executive from the American Property Casualty Insurance Association, Robert Gordon, also noted that government interference has led some US insurers to limit coverage in states frequently affected by natural disasters. Gordon asserted that efforts to prevent steep increases in home insurance costs have critically injured parts of the insurance market.

“That’s where you’re seeing in the US, the markets where you’re having a real availability crisis, it’s because the government is trying to suppress those [premiums],” Gordon said.

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