Insurance news

Onda, a managing general agency specialising in cyber insurance at Lloyd’s, has announced the appointment of Patrick Cannon, FCII (pictured above) as its chief claims officer.

Cannon brings extensive experience in developing and leading claims functions within the cyber insurance sector, including claims advocacy, claims preparation, and incident management. His career spans significant roles across various organizations.

He has served as the head of cyber claims at Marsh from November 2021 and previously held positions at Tokio Marine Kiln, including head of enterprise risk and casualty claims from July 2020 to October 2021.

Additionally, Cannon was involved in handling a range of cyber-related claims as well as technology errors and omissions, and intellectual property cases at Tokio Marine Kiln and earlier at Brit Insurance.

His appointment aligns with Onda’s focus on bolstering its claims handling capabilities amid growing demands in the cyber insurance market.

“I’m delighted to be joining Onda at this important time for cyber insurance. Our industry has never been better placed to deal with the increasing technological disruption faced by businesses. I look forward to being part of this growing team and this exciting new product,” Cannon said.

Alex Jomaa, Onda’s Chief Underwriting Officer, also expressed his enthusiasm about Cannon’s appointment.

“We are committed to delivering an exceptional claims experience for our customers, so we’re delighted that Patrick is joining the Onda team,” Jomaa said. “Patrick’s deep experience will be invaluable in growing our offer and his expertise further entrenches Onda as the market of choice for cyber insurance.”

Onda’s focus on bolstering its claims proposition comes amid projected growth for the sector; a recent report from OAC revealed that cyber insurance’s global gross premium volume witnessed a yearly increase exceeding 20% from 2019 to 2021, with projections indicating a surge in demand over the coming decade.

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Shares of R&Q Insurance Holdings tumbled 45% after the company said that it would report a significant pretax loss for the year, according to a MarketWatch report.

Shares at 7:45am GMT were at three pence, a drop of 2.49 pence. R&Q shares are down 95% over the past 12 months, MarketWatch reported.

R&Q said Friday that the loss was driven by rising costs and a shortfall in reserves at its legacy insurance business.

The insurer said in a news release that it expects reserves from its legacy insurance business for 2023 to tumble by 23%.

“This primarily relates to tail claim development as well as inflation and abuse claim development across the portfolio,” R&G said.

R&Q said its reserves at year-end 2023 were around $1 billion. However, it said the sale of its Sag Main corporate liabilities joint venture will reduce that to around $670 million.

R&Q said it would sell its 49% interest in the joint venture to Obra Capital Management fr $27 million in cash and $3 million in Randall & Quilter PR preference shares currently held by Obra.

“We are pleased with the strong return on our investment in the joint venture, and this agreement is in line with our objective of realising value from within our legacy insurance business,” said Jeff Hayman, R&Q chairman. “Although we believe that the corporate liabilities market continues to represent an attractive long-term opportunity, developing regulations – including potential changes around capital requirements – have reduced the strategic attractiveness of direct equity participation in joint ventures of this type for R&Q.”

R&Q will use some of the money realised from the sale to repay its revolving credit line, MarketWatch reported.

R&Q announced last year that it was selling program management business Accredited to private equity platform Onyx Partners. The European Commission approved the deal last month. R&Q said the sale would allow it to “undertake a material financial de-leveraging” and “return the capital solvency position back to target levels.”

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The Annual Cargo Theft Report 2023, published by TT Club and BSI SCREEN Intelligence, highlights high inflation as a significant economic factor influencing patterns of cargo crime.

This year’s report notes a particular increase in theft of food and beverages, including alcohol, which now constitutes 24% of global cargo thefts, up from 16% the previous year.

Key findings from the report reveal that most cargo thefts occur during road transport, accounting for 71% of incidents. That said, theft from facilities has decreased from 30% to 23%.

The report also reveals the countries most affected, including Mexico, the USA, South Africa, Germany, and Italy. While electronics accounted for 9% of incidents, the financial impact remains substantial due to the high value of goods.

Regional variations in the methods of cargo theft were also noted, such as the use of fake police stops, known as “blue light crime” in South Africa, and “insider activity” leading to thefts in Asian countries.

Tony Pelli, practice director at BSI, emphasized the broader implications of cargo theft and how it causes companies problems beyond the billions of dollars stolen.

“Cargo theft is a problem that costs companies tens of billions of dollars each year and can cause significant disruption to important supply chains, from pharmaceutical products to semiconductors,” Pelli said. “Having accurate and up-to-date intelligence is the first step in combatting this problem and pinpointing the locations and types of theft that are most likely to harm global supply chains.”

Mike Yarwood, TT’s managing director for loss prevention, explained the company’s approach to these issues.

“In identifying shifting crime patterns in terms of new fraudulent methodologies and a focus on both historic and current geographic risk, we seek to assist operators in tightening their security processes,” he said.

Yarwood also highlighted the report’s utility in offering actionable intelligence and recommendations for mitigating risks, such as increased olive oil thefts in Southern Europe following poor harvests and rising oil values, and various fraud tactics used in Europe and the USA.

“Our combined experience as insurance provider and supply chain intelligence gatherer is invaluable, not just recording the details of crime but also in recommending practical actions and process design suggestions that will strengthen supply chain organizations in their fight against the threat of theft,” he said.

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Demand for mass timber, a sustainable construction alternative, has grown steadily over the past several years. However, a new trend is driving risks for the construction sector: mass timber being used for taller buildings, not just residential structures.

According to one expert, this shift is observed in Europe, Asia, and North America. Michael Bruch (pictured), global head of Risk Advisory Services at Allianz Commercial, noted that the increasing adoption of mass timber for higher-rise construction indicates a broader acceptance of the material beyond traditional low-rise buildings.

“The emergence of mass timber as a sustainable construction alternative represents a significant opportunity for the building sector to reduce its carbon footprint while also satisfying a demand for a more cost-efficient material but as durable as steel and concrete,” said Bruch.

“However, in any industry, deployment of new materials or processes can result in new risk scenarios, potential defects, or unexpected safety consequences, as well as bringing benefits, and mass timber is no different.”

Construction’s shift to mass timber – what are the most significant risks?

Bruch pointed to Allianz Commercial’s recent report on the risks posed by mass timber. According to the report, the construction sector is responsible for almost 40% of global CO2 emissions caused by concrete, steel, and fossil fuel-driven energy consumption.

Shifting to mass timber, a more cost-efficient material as durable as concrete and steel, allows the construction industry to lower its tremendous carbon footprint. Mass timber emits significantly less CO2: around 50% less than concrete and more than 25% less than steel, Allianz Commercial said in its report.

However, the potential risks associated with mass timber construction are significant, particularly regarding fire hazards and natural calamities.

“The good news from our research is that you can manage these risks,” Bruch said.

Fire is potentially the top risk of mass timber construction. Fire stands as the most expensive cause of all construction and engineering insurance losses, accounting for more than a quarter (27%) of the value of 22,000 claims analyzed over a five-year period, according to Allianz.

To mitigate this risk, Bruch emphasized proactive measures such as designing for fire resistance, using flame-retardant materials, and implementing proper construction practices.

He also noted that while natural hazards vary by region, the resilience of mass timber structures shouldn’t be underestimated.

“Natural catastrophe risks like hurricanes and gale-force winds can potentially affect beams, columns and panels. But mass timber is really strong,” said Bruch.

“Mass timber buildings weigh approximately only one-third of comparable concrete structures, and they have the highest strength-to-weight ratio, which enables mass timber to perform very well during seismic activity.

“Natural hazards can differ from region to region, but those risks can be managed well for mass timber buildings.”

Additionally, construction businesses face supply chain and labor exposures as mass timber demand grows. Mass timber must be obtained in sustainable ways, necessitating specialized production facilities.

“This means thorough logistical planning and management of building materials are essential to avoid costly project delays,” said Bruch.

“On top of that, construction firms may face challenges finding experienced workers for mass timber construction projects. But overall, mass timber buildings can be constructed faster than traditional buildings, so that’s a big pro that we’re seeing.”

Insurance implications for the construction industry as mass timber use expands

The global mass timber market is still in its nascency, but it has tremendous growth potential, according to Allianz Commercial.

Despite the risks involved, Bruch is optimistic about the potential of mass timber to meet sustainability goals and lower emissions. At the same, effective risk management practices and industry collaboration are needed to ensure the widespread adoption of sustainable construction materials and technologies.

Brokers and insurers can help construction clients transition to sustainable materials and technologies by providing risk management solutions and investment incentives.

Bruch stressed that each mass timber building is unique and presents specific risks that must be assessed and managed throughout its lifecycle.

“Given this market’s expected future growth, companies should do all they can to develop a greater understanding of their exposures, including fire, water damage, repetitive loss scenarios and even termite infestation, and ensure they have robust loss prevention measures to combat these,” said Bruch.

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Gallagher Re’s annual Florida Market Watch Report for the year ending 2023 highlights the state of the insurance landscape in Florida, focusing on companies with a significant presence in the state’s personal property market.

The report, drawing data from NAIC statutory statements via S&P Global Market Intelligence, outlines various metrics of performance, including premium growth, profitability, surplus, new company formations, and policy take-outs.

In terms of premiums, 2023 saw an overall increase across all subgroups compared to the previous year. The ANTS subgroup, which includes major insurers like Allstate (Castle Key companies), Nationwide, Travelers (First Floridian), and State Farm, experienced 19% growth in direct premium written (DPW), reaching $2 billion.

This surge was largely attributed to State Farm. The Florida Specialists subgroup witnessed a 15% increase in DPW, amounting to $22.7 billion, with American Strategic and Privilege Underwriters driving much of this growth.

Furthermore, Citizens, the state-run insurer, reported a notable 59% increase in DPW to $5.1 billion in 2023, fueled by an uptick in policies in force.

Growth in profitability

On the profitability front, 28 out of the 57 companies monitored reported underwriting gains in 2023, an improvement from 15 companies in 2022. Despite this, the Florida Specialists subgroup faced a net underwriting loss of $398.3 million and an after-tax net loss of $9.5 million.

Conversely, the ANTS subgroup achieved a modest net underwriting gain of $0.6 million and an after-tax net income of $24 million.

Overall, the market’s net underwriting income stood at $68.8 million, with after-tax net income at $760.9 million—largely contributed by Citizens with an after-tax net income of $746.5 million. The combined ratio for the market also improved markedly to 96.7% in 2023 from 133.9% in 2022.

The report also highlighted 15.6% growth in policyholders’ surplus across the market to $12.2 billion in 2023. Notably, Citizens’ surplus rose by 17.4% to $5 billion, and the Florida Specialists’ surplus increased by 16.7% to $6.1 billion, with net additions including capital inflows and surplus notes totaling $865.7 million.

Regarding new market entrants, the Florida Office of Insurance Regulation approved five new companies for 2024, aiming to diversify the state’s property insurance options.

Additionally, the take-out process saw significant activity in 2023, with 646,617 policies approved for removal from Citizens, highlighting efforts to redistribute policies to the private market and reduce the state insurer’s exposure.

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After two decades serving in a variety of senior leadership roles with Munich Re, Jill Beggs’ decision to “boomerang” back to the reinsurance roots she had first laid down with Everest Group, Ltd. was simple.

Beggs (pictured) returned to the company in 2021 as the head of North America reinsurance, invigorated by the vision of the senior leadership team regarding people and culture – which she strongly believes is what sets the company apart. In February of this year, her remit was broadened as she stepped into a new role as EVP of Everest Reinsurance and COO of the reinsurance division, a position that includes managing the profitable growth of the division’s worldwide reinsurance portfolio.  

“I’m super excited to partner with our reinsurance colleagues and leaders across the globe to build on the momentum that we have in the business,” she said. “We have a really strong foundation. We are always pursuing better, but a key differentiator is not necessarily what we do, but how we do it, which I think is so special. We’re incredibly collaborative, and we work across regions and continents seamlessly to act on behalf of our clients. Advancing that culture is a top priority for me.”

What challenges are facing today’s reinsurance market?

Beggs spotlighted the two “pervasive challenges” being faced across the reinsurance industry. The first challenge is one being seen across so many global businesses – how to attract and retain top-quality talent. Having the best talent is always going to be a top priority, she said, because success in reinsurance starts with people.

“This is a relationship business; our clients aren’t just buying our services or a contract, they’re looking for true partnerships and you can really feel that,” she said. “The war for talent is a challenge for all of us, especially in a relatively small industry like ours. Another major challenge, I would say, is some of the enormous risks facing our business.

“If you think about increasing weather-driven catastrophes, global economic and geopolitical volatility, and cyber threats, clients need companies not only with capacity but with a breadth of expertise and solutions, not only to meet the needs of today but to evolve with them. The risk landscape is changing every year, almost every month now so clients are looking for companies that can evolve with them and work with them to provide solutions.”

Looking at natural catastrophes, she noted that the industry has faced over $100 billion in average annual losses every year since 2017 which is more than double the average of the previous five years. 2022 brought Hurricane Ian, the most expensive hurricane in Florida’s history, while 2023 was another $100 billion-plus loss year for the global nat CAT market, highlighting that the trend of these costs rising year-on-year is not slowing down.

The role of the reinsurance market in offsetting these challenges

The challenges facing clients are continual, she said, and it’s the role of the reinsurance market to provide solutions to these challenges. Examining some of the ways she and her team are looking to offset these challenges, she looked first at how it’s working to solve the talent crisis, in recognition of the fact that talent is at the root of what sustains the industry.

“I’m proud to say that our colleagues join Everest to develop and grow their careers,” she said. “And we’re proud that we have also retained our best talent even though the labour market has been in turmoil over the past few years. They stay because we’re part of a vibrant, collaborative culture which I think is really differentiated against other cultures that are out there.… and we also invest in our talent.

“We’re developing and expanding our learning, mentorship and awards programmes, at all levels. We do this to equip the next generation with the diverse skills and experiences which are vital for their growth. Our reinsurance associate programme is for early career talent but we have our mentorship programs all the way up the chain and we have development programmes for our highest potential colleagues at the most senior levels within the organisation. So, that development piece really spans the full breadth of the organisation.”

With regards to navigating the wider risk landscape, Beggs noted the company has been structured to meet clients where they are. It is by being nimble, creative and entrepreneurial that Everest can focus on delivering that service, she said, because its flat and heavily interconnected structure means the firm is able to deliver its expertise in a matter of hours, rather than days or weeks.

“We feel we have the right people in the right places, we have local teams who are deeply connected to their markets, and they’re empowered to make decisions,” she said. “That’s a key differentiator for us. We’re able to pivot and respond to those local conditions without the bureaucracy and complexity which sometimes has a tendency to slow some of our competitors.”

Loss adjusting specialist Charles Taylor has announced the dual appointments of Hugh Thacker as global director of aviation and David Boghurst as global managing director of marine.

In addition to these high-profile hirings, the organization has also designated James Godden as global operations director for aviation and marine, tasked with spearheading strategy and fostering operational coherence between these two pivotal transport divisions. Additionally, Godden will oversee client support initiatives to enhance service excellence throughout the company.

Thacker and Boghurst, both of whom have been pivotal in handling complex claims and engaging with high-profile stakeholders in their respective fields, bring extensive experience to their new positions.

Oliver Hutchings, the global managing director of marine & aviation, is set to depart the company by the end of June for a senior position at a global brokerage, ensuring a smooth transition before his departure.

“I am extremely excited to be appointed as Global Managing Director of Aviation and would like to thank Oliver for his assistance over the last few months. Charles Taylor’s global team of professionals brings a wealth of experience and an in-depth knowledge across all aspects of aviation,” Thacker said.

“I am thrilled and honored to take on the role of Global Managing Director of Marine at Charles Taylor. Collaborating with our exceptional team of skilled experts is a privilege, allowing me to combine my passion for the sea with my professional remit,” Boghurst said.

Richard Yerbury, CEO of Adjusting, also expressed his appreciation for Hutchings’ contributions, over the past 16 years.

“As Oliver embarks on the next chapter of his career after 16 remarkable years with our firm, I want to express my gratitude for his dedication and invaluable significant contributions to our Marine and Aviation businesses. His leadership and commitment have left a very positive impact on our business and our teams. We wish Oliver every success and fulfilment in his future endeavors,” he said.

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Acrisure Re, the reinsurance division of global insurance broker Acrisure, announced on Thursday the passing of Ian Wicks (pictured), its executive vice president. Wicks was 66.

“It is with great sadness that we share the unexpected passing of our dear friend and colleague, Ian Wicks,” the company wrote in its LinkedIn post. It lauded Wicks’ track record in the insurance sector, having served in the industry as a broker for almost 50 years. He was praised for his business acumen and people skills.

“He was a man of the utmost integrity and we are honored to have witnessed his exemplary character in action. He will be remembered for his warm personality and his ability to lighten up any room,” the statement said in conclusion. “Our deepest sympathies go out to Ian’s family and friends, and may his memory be a source of comfort to all who were fortunate enough to have crossed paths with him. Rest in peace, Ian. You will be dearly missed.”

Wicks joined Acrisure Re in 2021, with his appointment to the position of executive vice president, which was described as involving a broad strategic role. He thereafter joined the London-based casualty team. His hiring was described as part of Acrisure Re’s plans to bolster the casualty team as well as expand the company’s footprint in third-party lines.

Prior to joining the reinsurance company, he served at Ed Broking as chair of its non-marine reinsurance unit, specializing in casualty reinsurance. He also previously took on leadership roles at Harman, Wicks & Swayne, Willis Re, and JLT Re.

He started his career in the insurance industry as a reinsurance broker at Fenchurch Reinsurance Brokers Ltd, remaining in the company for almost 10 years.

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The Association for Cooperative Operations Research and Development (ACORD) has announced the release of its updated Global Reinsurance and Large Commercial (GRLC) ePlacing Implementation Guide, version 1.3.

According to a news release, the update extends the ePlacing Standard to facultative reinsurance, and now the standard supports the electronic placement of reinsurance contracts.

The latest iteration of the guide, v1.3, has been described as being aligned with the GRLC Accounting (EBOT) and Claims (ECOT) Standards, which covers both treaty and facultative reinsurance.

ACORD noted in a statement that this harmonization is the result of years of concerted efforts by subject matter experts within the GRLC and Ruschlikon communities, aimed at adapting ePlacing Standards to meet the evolving needs of the global reinsurance ecosystem.

Looking ahead, ACORD plans to further expand the scope of the GRLC ePlacing Implementation Guide throughout 2024. This will include the establishment of standard JSON/API messages among other technological enhancements, aimed at bolstering the efficiency and responsiveness of reinsurance practices worldwide.

The ACORD GRLC ePlacing Implementation Guide version 1.3 is available for download, offering a comprehensive resource for industry professionals seeking to navigate the updated standards. For more information on the ePlacing Standards and other ACORD initiatives, visit www.acord.org/grlc.

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With preparations already underway for the British Insurance Brokers’ Association’s (BIBA) flagship conference, attention is already turning to Manchester Central and those crucial dates in the diary of so many across the market – May 15 and 16. Yet the opportunities for the insurance market to get together and share insights, experiences and hard-won advice are ever-growing – as evidenced by the recently announced 2024 West of England Annual Dinner.

How the idea for the annual dinner first came about

The BIBA-hosted event is the first of its kind noted William Hone (pictured), dinner secretary and committee member at BIBA, development executive at Higos Insurance (a Brown and Brown business) and an Insurance Business ‘2023 Rising Star’. Having previously hosted a very popular summer barbecue and an even more popular race day, the team decided it was time to do something a little bigger.

As a BIBA committee member, he said, he’s entrusted with representing Higos and the wider West of England broking community in discussions around what can be done to support the broking community, whether through events, professional development or general feedback to BIBA about common issues as they arise.

“I saw it as an opportunity to get involved in the broking community more directly and hopefully do some good,” he said. “I’d been attending events for several years, but wanted to get involved myself and I’m really enjoying the experience so far.

“I am honoured to be elected as the Dinner Secretary; my reputation for arranging get togethers precedes me, clearly! In this role I have been responsible for finding and arranging the venue, creating the budget, and locating sponsors. My fellow committee members have been very helpful in these endeavours and we’re all looking forward to a great event.”

What is the long-term goal of BIBA’s West of England committee?

The long-term goal of the committee is to have this become an annual event and a regular occurrence in people’s calendars, he said. Looking across the profession, he highlighted the shared passion those across the market have for the industry they work in, and the pleasure they take from having the opportunity to get together with their friends, colleagues and even competitors.

With that in mind, having the dinner seemed the logical next step in Hone’s events calendar. It has been years since BIBA hosted a dinner in the West of England, and so he was keen to “resurrect” this and bring the region in line with the others which have been arranging these kinds of dinners for many years. It didn’t seem right that the West of England didn’t have such an event, he said, especially considering the large insurance market in Bristol.

Why networking events are so critical to the fabric of the insurance industry

Hone said he believes networking events represent the backbone of so much of the insurance industry. As everyone is so fond of saying, he said, insurance is a people business.

“They’re not wrong,” he added. “Anyone who knows me will attest to the fact that I love a bit of networking and I think it’s things like this that elevate insurance as an industry. So much of it could just be sitting at a desk sending emails to faceless addresses, but I love the fact so many of us put the effort into meeting up and making genuine connections.”

What to expect from the event itself

Looking forward to the night itself, he shared that the events team have arranged for a black-tie dinner in Bristol for October 31. It’s an event that’s aimed at anyone in insurance, he said, whether they are brokers, insurers, solicitors or anyone else in this diverse ecosystem.

“We just want to bring everyone together, get people talking, and most importantly for everyone to have a good time,” he said. “We hope everyone will get something useful out of the evening, be it networking, putting faces to names, or just catching up with old colleagues and friends.”

With the event due to be held at the Bristol Harbour Hotel & Spa, Hone has a clear message for any insurance professional considering getting involved.

“It’ll be a great evening with people from all over the Bristol and South West market,” he said. “If we get the turnout we’re expecting then I can guarantee you’ll meet plenty of interesting people. I’m trying to cultivate a convivial atmosphere around the event. I want people to come along and have a good time first and foremost. If you get that part right, the rest all follows naturally!”