Insurance news

A Telegraph report on recent comments made by Aviva CEO Amanda Blanc on diversity hiring has sparked outraged calls for a boycott of the insurer. While some commentators aren’t wrong that it’s reductive to focus on race and gender without considering other career barriers like class (something the insurance industry needs to work on), the Aviva rage is largely unfounded.

‘White male recruits must get final sign-off from me, says Aviva boss,’ the Telegraph’s original Thursday headline, topping a paywalled article, declared.

The splash has hit social media, Twitter in particular, with a vengeance and led to calls to boycott Aviva for its CEO’s “woke” actions.

GB News presenter Martin Daubney teased a segment by saying: “As a female boss of Aviva says she has to approve all senior male recruits all in the name of diversity, I look at whether white people are facing racism.”

“Clue, yes,” Daubney added.

“White male recruits must get final sign off from me, says Aviva boss”

If you’re male and white, it’s time cancel that @AvivaUK policy.https://t.co/zsQLjg0auv

— Ramon Agusta (@ramonagusta) December 14, 2023

Taken at face value, Blanc’s (pictured below) Treasury Committee inquiry comments as framed by the headline, which has since been amended, would pose a big point of concern. Discrimination, be that on the basis of race, gender or any other protected characteristic, is absolutely unacceptable.

Dig a little deeper, however, and Blanc was not saying that all white male recruits at the 22,000 strong insurance company are vetted. Rather, as the Telegraph points out lower down in its article – where many non-subscribers will be unable to see this – Blanc was responding to questioning specifically on senior employees.

What did Aviva CEO Amanda Blanc say to spark boycott calls?

Blanc’s actual words were that there was “no non-diverse hire at Aviva without it being signed off by me and the chief people officer”.

“Not because I don’t trust my team but [because] I want to make sure that the process followed for that recruitment has been diverse, has been properly done and is not just a phone call to a mate saying, ‘would you like a job? Pop up and we’ll fix it up for you’,” the Aviva boss said.

What the Aviva CEO did not say was that white male candidates were being rejected from roles (57% of senior hires at the insurer last year were male, according to an Aviva media statement) – rather, that the recruitment process was being vetted. Nor did she qualify what exactly a “non-diverse” hire might be, or specifically say that she was checking hiring processes around a specific group of people.

Insurance – building diversity in a people business

If you’ve never worked in or around insurance, you might not know that it badges itself as a proud people industry. This is fantastic if you’ve got an in, but not everybody has a pass to what has traditionally been seen as an Old Boys’ Club.

Historically, it hasn’t been easy to climb the ladder in insurance and financial services as a perceived outsider, whether that’s because of your gender, your race, or another protected characteristic like a disability or even class.

Senior leadership stats reflect this.

Meanwhile, just 78 of Aviva’s senior leaders are ethnically diverse, versus 670 who are white.

The figures hardly scream that Aviva is anti-white or anti-male.

What Blanc appears to be saying (if clumsily) here is that the organisation is looking to clamp down on ‘jobs for mates’ and make sure that historically discriminated against people get the same opportunities as others. This is not about refusing white men, a diverse group of people within itself, a place at the table unless they do not deserve it.

There is far more to diversity and discrimination than gender or race, and this is something that insurance companies do need to get to grips with.

Nevertheless, Blanc and her top team are not wrong to scrutinise hiring processes.

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When Patrick Brice (pictured) joined CFC eight years ago after almost two decades serving with RSA, the business comprised a team of circa 110 people occupying just one floor of an office. Today the specialty underwriting giant employs nearly 900 people across multiple offices and is recognised as the biggest independent MGA in the world.

Speaking with Insurance Business following CFC’s UK Broker Summit, distribution director Brice noted that while the firm has seen significant changes, its fundamental DNA – a resolute focus on broker distribution and an ambition to grow the market as well as CFC’s market share – remains unchanged. 

Why CFC has no interest in going direct

“I can’t think of a single reason why we would ever go direct; I just can’t ever see us doing it,” he said. “Commercial insurance is a broker-led business. It has to be, given the complexity you’re dealing with, given the wide range of different products and the wide range of different requirements that commercial clients need. And bear in mind, commercial clients include everything from micro-businesses all the way to large corporates. So, brokers are absolutely central to that.

“If you’re working in commercial insurance, you need to understand the broker market. And I’ve always loved that aspect of insurance. It’s one of the things I hammer home when I’m talking to new joiners at CFC – that insurance is fundamentally a people business. And we at CFC talk a lot about the technology that we use and the tools we use to streamline the insurance process but the one thing we’ve been really consistent on is that brokers remain fundamental to the success of our proposition.”

What makes working with commercial insurance brokers so special?

Having seen the insurance market through multiple iterations over the last 30 years, Brice noted that what has held his interest so long is the opportunity to work with brokers and understand how their businesses operate. From the personalities involved, to seeing the strategies they put into operation to getting a first-hand look at the way in which they advocate for and support their clients, he’s continually impressed by the level of innovation displayed by brokers as they pivot to meet the ever-changing demands of insureds.

“Over the years it has become clear to me that pure selling in commercial insurance is actually really difficult,” he said. “What you need to do is build partnerships with your brokers, and to understand what kind of clients they’re working with and how your propositions match the solutions they’re trying to provide for their clients.

“For me, it all comes back to people and relationships, and understanding that brokers have a tough job to do. They’ve got clients that, nine times out of 10, don’t understand insurance and certainly don’t want to buy insurance. It’s a grudge purchase for anyone who isn’t one of those sophisticated buyers that use it purely for risk transfer.”

Making brokers’ lives easier – assessing CFC’s ambition

Making brokers’ lives easier is the name of the game for CFC, he said, and integral to that is recognising the pressures brokers face with the client on one side of the equation and the insurance market on the other. The key to navigating that is tailoring a proposition to match their requirements, and that’s the bread and butter of what Brice’s team do at CFC – crafting solutions that make the business accessible and its products efficient and tailor-made to what the broker needs.

Brice highlighted that, from a reputational perspective, the insurance industry had a rough ride during the COVID crisis, and he knows from his time serving on a BIBA advisory board that brokers are still navigating the challenge of ensuring the reputation of the industry is as powerful and positive as possible. But that’s where the role of the broker really comes in, he said, as it’s through the provision of professional, high-quality, impartial advice and guidance, that clients can learn or relearn to trust the insurance proposition.

“That’s their job,” he said. “Their job is to be professional, impartial advisors who understand their clients’ requirements and can then turn to the market and find a market for those products. Our job is to design the products, to manufacture the products and to find the right distribution partners for them. It’s also our role to educate our broker partners to the point where they feel really confident in talking about the value of those products.”

That education piece has been a responsibility CFC has taken very seriously since its earliest days, he said, and he doesn’t ever see that focus slowing down. The simpler and more accessible you make a product, the less work the broker has to do in converting that into something comprehensible from a client’s perspective.

‘What’s next? What can we do better?’

However, he noted that no matter how positive the feedback from brokers to CFC’s proposition and emphasis on creating a more sustainable specialty insurance marketplace, the business is determined not to rest on its laurels. The team knows never to take its market relationships for granted, he said, and works off the conviction that it can always be better and always do more for its brokers.

“The moment we get complacent about the fact our brokers are giving us fantastic feedback, or that we’re growing at 20-something per cent year-on-year, that’s the moment that delivery slips,” he said. “That’s when you start losing your grip on the things that made you a successful business in the first place. We’re owners of this business, so we’re all invested in its success, and we care about it deeply. And that means constantly asking ‘what’s next? What can we do better?’”

Hopefully, this continues to translate into a differentiated service proposition and a differentiated way of interacting with brokers, Brice said, because, no matter what, the broker sits at the centre of CFC’s offering.

“Their role in providing impartial, professional advice to a client that doesn’t understand insurance by coming to experts that understand that particular channel of insurance is a really powerful combination,” he said. “So, we’ve just got no business dealing directly with clients. It’s not for us. That’s where the brokers add their real value and long may it continue.”

Dickson & Co Insurance Group announced that it will be acquiring Kerr Group Insurance. The deal will form one of the largest independent insurance policy providers in the UK and Ireland.

“We are excited to welcome Kerr Insurance and its dedicated team to the Dickson & Co family,” said Ashley Dickson, managing director at Dickson & Co.

“We are thrilled to join forces with Dickson & Co and become a part of this prestigious group,” said Roland Kerr, managing director of Kerr Group Insurance.

“Our two businesses share many similarities, both family-owned and run community-based independent brokers: both well-known across Northern Ireland and down South. We offer a combined 125 years of experience in the insurance industry, and I can’t wait to see what we can achieve together,” he said.

What did the acquisition entail?

With the acquisition of Kerr Insurance, the broker’s workforce will be increased by 50%. The two community-based brokers will be employing more than 150 staff members and will serve customers across a combined network of 17 trading sites in Northern Ireland as well as two branches in the Republic of Ireland. It will be put under the Dickson & Wilson Insurance brand.

“While both Dickson & Co and Kerr Insurance will retain their independence, preserving their distinct brand identities, we look forward to expanding our shared product portfolio across the Group in order to offer our customers even more choice at the most competitive rates,” said Dickson.

“This acquisition affirms Dickson & Co as a leading force in both the UK and Ireland insurance marketplaces and we have further expansion plans pipelined for 2024, including the opening of a new Client Liaison Suite and Corporate Centre of Excellence based in the Centre of Belfast,” she said.

The firm’s expansion will be supported by its new recruitment drive, which aims to nurture talent in order to meet the growing demand for skilled professionals that were part of the company’s personal and commercial lines sales teams.

The multimillion-pound investment also included the development of a new training academy which will be a facility used to induct and train employees as the firm’s workforce continues to grow.

The deal was the latest in the series of acquisitions and expansions that were made by Dickson & Co as part of the £7 million investment made by the Dickson family to double the size of its operations in the UK and Ireland.

This marked Dickson & Co’s fourth acquisition in the last two years as well as its 13th overall acquisition.

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The balance of power in favour of intangible assets over tangible assets has undergone a momentous shift in recent decades, with the majority of the value of today’s businesses tied up in the intangible – increasing from 32% in 1985 to 90% in 2020 for the S&P 500. And with millions of intellectual property (IP) rights now in existence, businesses of every size and sector are facing a minefield of third-party IP risks.

It’s against this backdrop that Pen Underwriting has rolled out its IP insurance offering in the UK, with the backing of capacity provider Tokio Marine Kiln and plans in place for an international roll-out. Discussing how the product came about, Erik Alsegard (pictured), head of IP at Pen, highlighted how the heightened risks associated with intangible assets and “staggering” number of IP rights which exist in the modern digital economy is creating a real need for insurance support.

Navigating a tumultuous intellectual property landscape

“In the present landscape, it’s virtually impossible for anyone to guarantee that they’re not infringing on something,” he said. “So there is a risk for most companies out there in terms of IP. The brokers we’ve spoken to support our view that there is a real opportunity for growth in this space. Clients also want additional choices. If anything, we probably need more entrants into the IP insurance market to really generate additional competition.”

Although it can cater for businesses of all sizes and most industry sectors, Pen’s new offering has been created with small-to-medium-sized (SME) clients front of mind, he said, not least because these businesses can be disproportionately affected by a claim. The potential costs and time involved with IP disputes can have a significant, if not existential, impact on their operations.  As such, the offering needs to be highly adaptable to client needs which is why the team has created a modular proposition with a range of different coverages available.

Sharing some examples of what this might look like in practice, he noted the challenge facing a small company at the receiving end of a lawsuit or claim of IP infringement. It’s not just the potentially catastrophic legal costs they could face that’s the concern, he said, but also the impact of such a claim on their reputation and their customer and supplier relationships.

“Alternatively, if that same business finds that someone is infringing on their own IP rights – let’s say a competitor who’s effectively copying what they’re doing – then they need to be able to take action because otherwise, what was the point in developing those IP rights in the first place? The costs involved in both these types of scenarios can be quite scary for [SMEs].

“In both scenarios, you’ve also got stakeholders that will be paying close attention to the outcomes. You’re not just looking at your own balance sheet, you’re looking at your investors and customers, plus the potential impact on your employees. So, there’s a lot at stake for companies and people when it comes to IP risk.”

Why intellectual property insurance is so critical for SMEs

This is why IP insurance is so important for small businesses, he said, because it is designed to cover the legal costs and potential damages resulting from IP disputes, not only when it comes to defending claims but also enforcing an insured’s rights. He highlighted some of the ways Pen’s new offering can be tailored to specific IP risks or exposures, with coverage available for infringement liability, contract breach allegations, contractual obligations to indemnify for IP claims, challenges to the insured’s IP rights, and enforcement of the insured’s IP rights against infringers.

Having a modular or ‘adaptable’ coverage allows the policy to cover a multitude of risks, depending on the client’s requirements, he said, which is key for a new IP insurance offering. Combine that with Pen’s no-nonsense approach, quick decision-making, simple proposal forms and ease of trade and he believes you have a real differentiator.

What has changed in the intellectual property insurance landscape?

Assessing what’s changed in the market since he first began specialising in this area nearly 20 years ago, Alsegard noted that he has seen IP insurance only getting “more interesting and more relevant over time” and that the market has come a long way in terms of how it is educating brokers and the delivery of IP insurance protection at pace.

“What we have developed meets the client’s needs for our target audience – which is SMEs, particularly in the UK initially. And I firmly believe that offering choice for brokers in the space is really important,” he said. “Another thing to bear in mind is the need to ‘mind the gap’. Some IP coverages exist in other insurance policies, one example being Pen’s Tech PI policy, and these can be sufficient for some businesses. For others, they may not be.

“The risk could be very significant, for example in relation to patents, which are typically excluded from other policies. Or maybe, a client has a contractual obligation relating to all IP but the existing insurance policy only covers certain parts of IP. So, a key message for clients and brokers is to ‘Mind the Gap’. It’s imperative to understand any gaps in the existing insurance coverages. So, between the existing products that Pen already offers and the addition of this on a tailored basis to effectively cover those gaps, I think we’re offering something very meaningful to the market.”

Based on a survey of 2,000 global business leaders conducted by Opinion Matters, a new report from specialist insurer Beazley highlights a growing focus on internal organisational risks among CEOs and executives, showing a significant increase in the concern over employer risk. In 2021, 11% of executives identified this as their top risk, but the figure has risen to 22% in the current survey.

In its latest “Risk & Resilience” report titled “Spotlight On Business Risks 2023,” Beazley sheds light on changing perceptions around various business and executive risks. The report indicates a shift in the risk landscape for business leaders, encompassing aspects from employee risks to reputation management and environmental, social, and governance (ESG) regulation.

Notably, over one-third (35%) of global executives are now considering insurance options that encompass risk and crisis management due to mounting business challenges.

The rise in workplace issues, partly attributed to the #MeToo movement and an increase in staff reporting, has also led to a surge in allegations and heightened concern among executives. Additionally, a deterioration in staff mental health post-pandemic has intensified the need for workplace support initiatives. A concerning 27% of executives feel ill-equipped to handle contemporary employer risks.

The report also delves into the connection between employer and reputational risks. Companies face increased public scrutiny over staff treatment, leading to potential reputational backlash. The so-called “culture wars” and pressures for organisations to address societal issues add to reputational challenges. Business leaders predict managing reputations will become increasingly difficult, with 17% currently ranking this as their top risk, projected to increase to 19% in 2024.

Furthermore, the report examines the complexities of evolving ESG regulation worldwide, especially challenging for multinational companies in varied legal environments. Executives in the US and Canada show greater concern over compliance with ESG-related legislation than their counterparts in the UK and Singapore.

While many businesses are proactively addressing environmental responsibilities, 22% of global business leaders now rank ESG as their primary business risk, up from 19% in 2022. However, 26% of global executives feel unprepared to manage and respond to ESG-related risks effectively.

“Global business leaders are dealing with a challenging array of new and persistent risks that threaten their business models. It might seem counter-intuitive that executives are increasingly looking inward at their workforce and workplace to meet today’s challenges. However, the last few years have shown us the importance of executive decision-making that drives positive change in the workforce and supports colleagues,” Beazley Group head of specialty risks Bethany Greenwood said.

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RSA Insurance has announced the introduction of its Equal Parental Leave Policy, a significant addition to its family-friendly initiatives.

The policy will offer an equalised and extended period of leave for all parents, irrespective of gender.

This initiative, effective from Jan. 1, is part of RSA’s comprehensive diversity, equity, and inclusion (DE&I) strategy. It aims to support all employees, challenge traditional gender roles, and encourage parents to participate actively in early childcare.

Under the new policy, every parent with a minimum of six months of service will be entitled to up to 52 weeks of parental leave, with 26 weeks fully paid. This applies to parents with children born or adopted after the specified date.

Additionally, RSA has formed a partnership with From Babies with Love, a social enterprise focused on supporting orphaned and abandoned children through its non-profit parental leave gift service. As part of this collaboration, RSA provides new parents with a “baby box” from From Babies with Love, containing organic and ethically sourced baby clothing, aiding them in the initial weeks of parenthood. This initiative has already assisted more than 26,562 children globally.

RSA DE&I head Gemma Jackson said that this new commitment will further support the families at the insurance group. She stressed that gender should never be a barrier to spending time with newborn children.

“It’s also the latest step in our ambition to be leading in our sector on diversity, equity, and inclusion by 2026. Equal parental leave is known to be a key enabler in improving gender equality in the workplace and contributes to driving down the gender pay gap, which remains a target for improvement across the industry. And so, we hope that this new policy will help to increase opportunities for colleagues and improve equity across the organisation,” Jackson said.

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Allianz Partners has officially announced the appointment of Anna Kofoed as the new CEO of travel and member of the board of management.

In her new role, Kofoed succeeds Damien Ladous, who has been managing the travel line of business since 2021 and the group finance function as CFO since early 2023. Ladous will now concentrate solely on his responsibilities as group CFO and continue his involvement on the board of management.

According to her LinkedIn, Kofoed joins the company following her tenure at Amadeus, a global travel technology firm known for its B2B and B2B2C travel services. In her most recent position at Amadeus, she served as executive vice president for EMEA travel sellers.

Her career at Amadeus included various global leadership positions encompassing marketing, sales, strategy, and business planning. She is an alumnus of Copenhagen Business School in Denmark, holding an International MBA, and a recent graduate of Harvard’s Advanced Management Program.

“Anna has extensive experience in the travel industry, and combined with her technological expertise, she will be invaluable in helping Allianz Partners achieve its growth ambitions, develop its travel ecosystem platform, and become the digital travel companion that it aims to be,”said Tomas Kunzmann, Allianz Partners CEO. “Anna can build on Damien’s excellent leadership of the travel business during a period of unprecedented changes and strong business performance. I’m delighted Damien will now be able to focus on leading Allianz Partners’ Group finance function as group CFO.”

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The Talanx Group has reported a substantial increase in its group net income for the first nine months of 2023, reaching €1.279 billion. This robust financial performance has led the company to revise its full-year earnings forecast upwards, now anticipating over €1.5 billion.

Looking further ahead, Talanx expects its group net income to surpass €1.7 billion in 2024, exceeding its previous medium-term target of around €1.6 billion in 2025. This marks a significant achievement for the group, achieving and surpassing its target a year earlier than planned. Talanx intends to unveil new targets for 2025 in March 2024 alongside its 2023 financial statements.

During the period up to Sept. 30, Talanx’s insurance revenue increased by 8% year-on-year to €32.3 billion, with a double-digit rise of 11% when adjusted for currency effects. The group’s operating profit saw a 23% increase to €2.8 billion, and its net income grew by 38% to €1.3 billion. This growth was evident across all divisions, with primary insurance in particular enhancing its contribution to group net income from 43% to 47%. The return on equity stood at 18.4%, well above the strategic target of over 10%.

Key to this performance was the strong insurance service result, driven by inflation-related price hikes and large loss payments staying within budget. In 2023, the group adopted new IFRS 17 and IFRS 9 accounting standards, ensuring comparability with prior-year figures.

The insurance service result for the first nine months of 2023 rose by 44% to €2.6 billion, with Primary Insurance experiencing a 66% increase, attributed to inflation, interest rate effects, and large loss payments. Large loss payments reduced to €1.6 billion from €1.9 billion the previous year, with the pro rata large loss budget of €1.7 billion not fully utilised. Notably, the group faced a significant loss from the February 2023 earthquake in Turkey and Syria, amounting to €329 million.

The net insurance financial and investment result before currency effects was €1.0 billion, a decrease from €1.2 billion. However, the higher insurance service result compensated for this, resulting in a substantial rise in both operating profit and group net income. Operating profit surged by 23% to €2.8 billion, and Group net income increased by 38% to €1.3 billion. The Solvency 2 ratio as at Sept. 30 was a robust 222%.

In the third quarter, insurance revenue grew by 7% to €11.4 billion. The insurance service result improved significantly to €950 million, and operating profit increased to €802 million. Group net income for the quarter saw a substantial rise to €452 million, and the combined ratio improved to 93.3%.

“The Talanx Group can look back at an extremely successful nine months: we shall exceed our ambitious financial targets for 2023 and have lifted our earnings forecast to significantly more than €1.5 billion. Primary Insurance made a major contribution to this, generating strong operating profit and above-average growth. This demonstrates our continued resilience, even in a challenging market environment, and shows that our focused strategy is paying off sustainably,” Talanx AG board of management chairman Torsten Leue said.

“Based on our strong results in the financial year to date, we are expecting to reach our medium-term target, which was originally for 2025, a year earlier than planned. Furthermore, we shall exceed it with our new target for Group net income of €1.7 billion,” Leue said.

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