Insurance news

FSB Insurance Service has announced it has secured the top prize of £20,000 through the 2023 Aviva Broker UK Community Fund for their chosen charity, which they named to be Birmingham-based SPLIT UK.

In a news release, the insurance service lauded the support SPLIT UK provided to families who incurred unexpected costs at the time their child is in need of intestinal or liver transplants. “It’s a lifeline for the families facing a journey no one should travel alone,” the release said.

Helping families during challenging times

In the UK, one in 1,000 children develop liver disease. Technology nowadays could save the lives of these children, including through advanced diagnosis, drug therapies, molecular genetics, and transplantation. However, there are only three transplant centers in the UK, and some of the children with the disease had to travel long distances for treatment, resulting in more expenses than anticipated.

This is the point where SPLIT UK steps in, supporting the families during these challenging times. They offer financial support and crisis grants through the SPLIT Family Fund; provide vital information on organ donation, liver/intestinal disease, and transplantation; assist in the research and education into the causes of liver/intestinal disease and transplantation, and treatments.

FSB Insurance’s senior executive, Anne Butler, is one of those who witnessed the support that SPLIT UK provides.

“My seven-year-old granddaughter Tilly was diagnosed with stage 4 liver cancer just before COVID struck,” Butler said. “After rounds of chemotherapy to shrink the cancer, the only real cure was a multi-organ transplant. SPLIT was amazing and supported Tilly and the family all the way along what was a very bumpy road. Tilly is now fit and well, and thanks are also due to hospital staff, the transplant teams, and the selfless generosity of the donor family, for which we will be eternally grateful.”

“Thank you, FSB Insurance Service; here at SPLIT UK, we are so grateful for your efforts, and your donations will help many families in the future,” said Sally Jerome, trustee and advanced nurse practitioner at SPLIT UK.

The funding was presented during the final of the Aviva ceremony in London. Of 40 brokers who applied, only five secured the top tier of funding. The secured funding is in addition to the £4,742 that FSB Insurance Service has already raised in the year so far through other activities, including a Snowdon climb.

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In its latest global report, Allianz Trade anticipates that business insolvencies in the UK will hover around 30% above pre-pandemic levels by 2025, with notable peaks expected in 2024 (29,850 cases i.e. +5%) and 2025 (28,400 cases i.e. -5%).

The rise is primarily attributed to the hospitality, trade, and manufacturing sectors, contributing to an estimated increase of 16% in 2023, equivalent to 3,900 additional cases. Despite all sectors having largely surpassed 2019 levels, the resilience of domestic firms has been strained by successive shocks and challenges, including Brexit-related issues, the COVID-19 pandemic, earlier monetary tightening, and persistent inflation.

The insurer’s latest Global Insolvency Report revealed updated forecasts for 2023 and 2024, with key insights outlining minor rebound in 2022 (+1%) and a surge by +6% in 2023 and +10% in 2024.

The acceleration in insolvencies is driven by a recession in corporate revenues, amplified by reduced pricing power and weakened global demand. The revenue recession, registering a decline of 1.9% year-on-year as of Q2 2023, is pervasive across all regions for the first time since mid-2020. Coupled with high costs, this trend is squeezing profitability and rapidly deteriorating liquidity positions, unlikely to improve before 2025.

Sectors most vulnerable to insolvencies

Sectors most vulnerable to insolvency include hospitality, transportation, and wholesale/retail, with construction and other sectors catching up swiftly. The higher-for-longer interest rates are reducing demand in sectors such as real estate and durable goods and will start pressuring solvency in highly indebted sectors like utilities and telecom, in addition to real estate, on both sides of the Atlantic.

The report projected that by the end of 2023, a majority of advanced economies will have normalised business insolvencies, with 55% of countries likely to witness substantial double-digit increases. Major economies like the US, France, the Netherlands, Japan, and South Korea are projected to experience significant increases. Globally, three out of five countries are expected to reach pre-pandemic business insolvency levels by the end of 2024, including significant markets such as the US and Germany.

Furthermore, in a scenario of slowing global economic growth, payment terms are expected to lengthen, exacerbating insolvency rates in the coming quarters. Global Days Sales Outstanding already exceed 60 days for 47% of firms, making timely payments increasingly challenging and adding pressure on financial stability. Closing the resulting financing gap could pose a significant challenge, especially with bank loans drying up for small and medium-sized enterprises (SMEs).

“Companies still have a sizeable amount of excess cash, €3.4 trillion in the Eurozone and US$2.5 trillion in the U.S. But these cash buffers remain highly concentrated in the hands of large firms and in specific sectors such as tech and consumer discretionary. And in general, most companies are unable to increase their cash positions through operations in the context of lower-for-longer economic growth. All in all, we expect two accelerations in global business insolvencies, with +6% in 2023 and +10% in 2024, after +1% in 2022,” Allianz Trade CEO Aylin Somersan Coqui said.

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Ki has announced a collaboration with Travelers and Aspen, with both carriers providing additional follow capacity through the syndicate’s digital platform.

This development marks a milestone for Ki as it allows the firm to be the first algorithmic underwriter in the market to offer augmented capacity from multiple syndicates. The increased capacity will be accessible across Ki’s open market business classes, spanning property, casualty, and specialty divisions.

Ki said its brokers and clients will continue to experience the efficiency of its digital platform, including swift responses to quote requests. The platform will also streamline the process of follow capacity offers from partners, complementing the existing Ki 1618 line.

Forming multi-year partnerships with Travelers and Aspen, alongside their ambitious growth plans for Syndicate 1618, Ki is set to substantially boost the follow capacity available from the first of January next year, pending approval from Lloyd’s.

“We are delighted to be launching these ground-breaking partnerships to accelerate the adoption of digital follow in the Lloyd’s market. As a result, Ki will significantly expand the follow capacity available through algorithmic underwriting, marking a major step towards a fully digital follow market. We are pleased to partner with Travelers and Aspen, two leading companies in our sector, who share our vision of a more efficient follow market and we look forward to working closely with them as long-term partners,” Ki CEO Mark Allan said.

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Liberty Specialty Markets (LSM) has announced the appointment of Marilyne Furlan (pictured above) as the head of casualty for Europe, effective in December.

Taking over from Katja Bobrowski, who is set to retire in February 2024, Furlan will collaborate with her predecessor to ensure a smooth transition for LSM’s clients and brokers in the region. Her primary responsibilities encompass steering sustainable growth across casualty lines in Europe. Additionally, she will provide oversight and leadership concerning LSM’s casualty underwriting strategy and product offerings.

Furlan joins LSM from RSA, where she held various key roles in casualty management. Her most recent position at RSA was as the head of liability lines for Europe.

In her new role, Furlan will be reporting to Pierre-Edouard Fraigneau, chief underwriting officer of LSM, Europe. She is expected to play an active part within the European underwriting management team and Liberty’s casualty global product board, with her base located in Paris.

“We thank Katja for her instrumental support in building and leading our European casualty book and wish her the best in her retirement,” Fraigneau said. “Marilyne’s two decades of industry experience will be vital in supporting our strategic growth in the region as we continue to deliver our global casualty ambitions across LSM. She has a track record of high performance in casualty management roles, and it’s great to have her on board.”

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Momentum Broker Solutions has marked 2023 with an unprecedented surge in the hiring of apprentices. The trend began in January when four new team members joined the broking team, with one individual broadening their expertise in the business systems department.

The network, based in Leicestershire, has made substantial investments in employee training and development. This week alone, it welcomed an additional three apprentices to its ranks.

A previous study by Forbes uncovered that eight out of 10 millennials possess limited knowledge about career prospects within the insurance sector. Momentum has touted its apprenticeship as an initiative that serves to raise awareness about insurance as a career path and provides individuals with the necessary qualifications and skills to excel.

Momentum also stated that it highly prioritises the apprenticeship program, recognising that it not only helps individuals embark on their career paths but also introduces fresh perspectives and innovative thinking through the young talent they bring on board.

Howard Pepper, managing director, emphasises the significance of nurturing talent from within the organisation.

“We are privileged to be able to support the next generation of insurance professionals through our apprenticeship programme. They add great value to our business and there are invaluable opportunities for those willing to learn. The future of our sector is in good hands,” Pepper said.

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In 2017, Equifax Inc, the parent company of Equifax Ltd, experienced a massive breach, during which hackers infiltrated the latter’s servers based in the US, where UK consumer data was outsourced for processing. Approximately 13.8 million UK consumers had their personal data compromised due to the breach.

The compromised UK consumer data included names, dates of birth, phone numbers, Equifax membership login details, partially exposed credit card information, and residential addresses.

Breach was entirely avoidable, FCA stated

The breach and unauthorised data access were entirely avoidable, the FCA noted. The watchdog stated that Equifax failed to consider its association with the parent company as outsourcing, thereby neglecting to exercise adequate oversight over the management and protection of the data being sent. Equifax Inc’s data security systems had known vulnerabilities, and the firm did not take appropriate measures to safeguard UK customer data, it was suggested.

Equifax was unaware of the breach’s impact on UK consumer data until six weeks after Equifax Inc’s discovery of the hack. The company was informed about the incident only five minutes before the American parent company’s public announcement, hindering Equifax’s ability to manage the complaints and delays in contacting affected UK customers.

Following the cybersecurity breach, Equifax also provided inaccurate information to the public regarding the number of affected consumers, and it mishandled complaints by not maintaining quality assurance checks for complaints related to the incident, the regulator found.

The FCA reiterated that regulated financial entities are obligated to establish effective cybersecurity measures to protect the personal data they hold. This includes keeping systems and software updated and fully patched to prevent unauthorised access. Firms remain responsible for data even when outsourced.

In the event of a data breach, an FCA-authorised firm must promptly notify affected individuals in a fair, clear, and accurate manner and implement appropriate procedures for handling complaints.

FCA joint executive director of enforcement and market oversight Therese Chambers said that as financial firms hold customer data that attracts criminal elements, it is important that they keep it safe at all costs. In this regard, the FCA found that Equifax failed.

“They compounded this failure by the ways they mishandled their response to the data breach. Regulated firms are on the hook, regardless of whether they outsource or not. The risk of identity theft never stops. Cyber criminals are sophisticated and innovative; it is imperative that firms maintain the highest standards in data protection,” Chambers said.

Update

In a statement provided to Insurance Business on the agreement reached with the FCA Patricio Remon, president for Europe at Equifax, said:

“Equifax has cooperated with the FCA fully throughout this long running investigation and has been recognised by the FCA for that cooperation, our transformation programme and the voluntary consumer redress exercise we implemented after the incident. Since the cyberattack against our company six years ago, we have invested over $1.5 billion in a security and technology transformation. Few companies have invested more time and resources than Equifax to ensure that consumers’ information is protected.

“We have built one of the world’s most advanced and effective cybersecurity programs. Our maturity level has exceeded all major industry benchmarks, and our posture – the ability to protect our networks, information, and systems from threats – has ranked in the top 1% of technology companies and top 3% of financial services companies analysed, for three consecutive years.”

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Sun Life has been in business in the traditional life insurance industry for over 150 years, and cultural shifts accelerated by the COVID-19 pandemic impact have made digital mission critical for the insurance company.

Sun Life clients now expect to have “fully digital journeys” with the life insurer, which also focuses on wealth and health solutions, and this is a global phenomenon, Sun Life president and CEO Kevin Strain (pictured) told Insurance Business.

“Our businesses are fully digitally oriented, and we’ve been stressing culturally that we have to think and act more like a digital company,” Strain said. “We have to be more agile, we have to push decision making closer to the client, and it’s a significant shift in how we think about doing business.”

Strain’s emphasis on this transformation is backed up by the life insurer’s 2022 annual report, in which ‘digital’ or ‘digitally’ are mentioned 60 times. Among celebrated milestones, more than 65,000 financial roadmaps were created for Canadians using the Sun Life One Plan digital tool last year, while in Asia 83% of applications were made digitally, representative of a 12% surge.

“In my mind, the life insurer of the future is a digital business that meets clients’ needs how they need to be met, and how they want them to be met,” Strain said.

Digital drive pivotal to Sun Life’s triple-pronged health, wealth, and insurance lifetime aims

Strain sees this digital drive as playing a pivotal role as the business builds out its capabilities to meet its vision of “helping clients achieve lifetime security and to live healthier lives”, with a greater focus on health and wellness than in the past and on delivering plans that encompass evolving life, health, and wealth needs.

“It’s about creating digital ways of interacting with clients that cover life, health and wealth – and that dive much deeper into wellness will certainly change how we look,” Strain said.

To deliver on this and for the group to continue “demonstrating an impact”, it can no longer be seen as the support function of the past, according to Strain, and Sun Life, which made CA$4.3 billion in insurance sales and had CA$1.33 trillion of assets under management last year, has looked to a fresh mindset.

Agility has become a priority for the more than a century-and-a-half old insurance company, and units have worked more closely with digital teams to share feedback and ideas.

Hybrid “here to stay”, says Sun Life president and CEO Kevin Strain

This digitally focused approach has extended to how Sun Life is looking at its workforce.

Strain, on the other hand, predicted that “hybrid is here to stay”, with some caveats. Sun Life is currently committed to hybrid work, with most businesses not having mandated days and the group having effectively taken a business-by-business and role-by-role approach, according to Strain. For example, its “highly collaborative” asset management business has asked people to come in more frequently, whereas those working on solo projects have been coming in less often.

“One of the things we do believe is that when people come into the office, they should be coming in for collaboration, they should be coming in for teamwork, or sessions that need that sort of innovation,” Strain said. “We want to make the office a magnet for people; we want them to come because they get closer to the culture, and they see the value of those relationships.”

Cultural norms and differences are also at play, with workers in some regions having been more inclined to return to pre-pandemic norms.

“If you went to Asia, you’d find that most people are coming back into the office now,” Strain, who served as president of Sun Life Asia from 2012 to 2017 based in Hong Kong, said. “And that’s been their choice, right? They’ve wanted to come back for lots of different reasons that tie into the culture.”

Sun Life CEO believes advisors are here for the long haul and will benefit from technology

The way the life insurance agents and advisors have interacted with clients has also changed, and Strain further predicted that hybrid expectations where it comes to doing business are here to stay.

Digital savviness has become a key requirement for advisors and agents, while advancements and a surge in interest in generative AI, buoyed by the meteoric rise of ChatGPT into the sphere of public interest, has even seen suggestions that they could find themselves competing with the technology.

A recent survey of 1,000 American consumers by life insurance agency Getsure found that despite 68% of respondents expecting insurance agents to be replaced by AI within 20 years, even more (70%) would not feel comfortable dealing with an AI agent – just 9% said they would feel very comfortable doing so.

“Computers can’t have empathy,” Strain said. “Generative AI is not going to have empathy and the role of the advisor, which is to understand their clients and to empathise with their clients, is so important.”

Clients may be expecting solutions for the computerised age, but advisors and agents will continue to play a key role for the long-term and customers want to continue having that long term “digital journey” with them, in Strain’s view.

“The role of the advisor is even more important today than it’s ever been, because of the complexity and the sophistication of bringing together life insurance, health insurance and wealth products, and the fact that that’s being done over a lifetime,” Strain said.

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QBE Europe has named Erik Keller as the head of liability, effective from Jan. 1, 2024. With an extensive background spanning 30 years in commercial insurance, Keller has predominantly been involved in multinational business affairs.

Having served as the regional underwriting manager for QBE Germany since 2017, Keller brings with him a wealth of experience in liability portfolio management. Prior to joining QBE in 2011, he served as liability portfolio manager at Chubb, RSA, and construction insurance specialist VHV. This experience, as detailed on his LinkedIn, also significantly contributed to his proficiency in casualty underwriting and portfolio development.

At QBE Germany, Keller’s focus primarily gravitated towards large corporate and global business clientele. He actively participated in various European projects, including pivotal roles in QBE’s casualty rulebook, multinational offering, and the development of corporate and specialty practices.

In his new role on a European scale, Keller aims to align QBE’s liability strategy across European countries, focusing on harmonising processes and streamlining operations to enhance efficiency.

Keller will report to Naintara Agarwal, director of underwriting and portfolio management for Europe.

“I am absolutely thrilled to have Erik join the team. He has shown not only how he can support cooperation across European offices but also a dedication to building strong relations with brokers and clients. This, I believe, is the right approach to develop our capability and our market position in Europe,” Agarwal said.

“Developing our local underwriting teams and our casualty product offering is crucial to the long-term success of liability at QBE,” Keller said.

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DUAL has announced the appointment of David Harries as group director of underwriting, effective from January 2024. In this new role, Harries will closely collaborate with Alan Telford, DUAL Group CUO.

Before joining DUAL, Harries was associated with Berkshire Hathaway Specialty Insurance, where he held the position of executive underwriter. With a career spanning over 30 years, he held various roles at QBE, including head of financial lines and active underwriter at Syndicate 386. Harries has also managed teams of underwriters in both Lloyd’s and Company Markets.

Richard Clapham, CEO of DUAL Group, also expressed the company’s appreciation for Telford’s significant contributions to the business and noted his planned departure in the summer of 2024. Telford’s intent to travel the world was disrupted by the global pandemic, making his continued presence within the leadership team since 2020 especially valuable. The handover to Harries in January 2024 is anticipated in this key role.

“We’re delighted to welcome David, whose experience makes him a fantastic addition to our Group. DUAL’s regional business model enables our local underwriting teams to respond in an agile way to an ever-evolving market. David will work collaboratively with each of our four regions, ensuring we have a global overview of underwriting trends and will help maximise cross-region partnerships with our carrier partners,” Clapham said.

“David’s proven track record in delivering growth, combined with a deep knowledge of the insurance sector gives him a great perspective on how we can best expand our product range to meet the needs of our brokers and their clients,” Clapham said.

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Insurance provider handl Group has formally agreed to acquire the entire share capital of auto locksmith firm We’ve Got The Key (WGTK), with the ambition of doubling the company’s size within 18 months. The move also comes after the appointment of Peter Crellen as the managing director.

Chris Chatterton, chief commercial officer for handl, emphasised the new management’s significant investment in “people plus technology,” aligning with handl’s core theme. With this, WGTK aims to achieve a 4-5% market share in the auto locksmith sector, with an additional goal of doubling callouts from 50,000 to 100,000 annually and expanding their services to assist motor insurers with key-related claims.

WGTK caters to insurers, breakdown and recovery services, fleet and rental sectors, and consumers in need of urgent assistance for lost car keys. The company also serves trade customers with significant fleets and plans to expand its reach to car dealerships, self-insured fleets, and secure more insurance contracts.

Headquartered in Norwich, WGTK will align its operations with Coplus, handl’s specialist ancillary insurer and claims handling business, also based in the city.

The specific financial details of the acquisition remain undisclosed, and the completion of the deal is anticipated later in the autumn.

“The auto locksmith market is hugely disaggregated, with literally thousands of sole traders, and a few small panels, but we believe WGTK has the potential to become a national brand for resolving auto lockouts in the same way that Home Serve did for home emergency cover,” Chatterton said.

“It’s a deal with massive potential, and we’re very excited by this opportunity. Investing in the management team is one of the first things we do when we make an acquisition, so we’re delighted to welcome Peter on board,” he said.

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