Insurance news

Virgin Money has expanded its insurance offerings by launching new home and landlord insurance products in collaboration with insurtech firm Uinsure. Virgin Money stopped offering its home insurance products in August 2021 as part of a broader strategic review aimed at simplifying its product offerings and focusing on core areas of business such as mortgages, savings, and current accounts.

Founded in 2007 and based in Manchester, Uinsure has developed what it calls a “frictionless” platform that allows customers to obtain insurance quickly and easily. Its UinsureCX product tracks mortgage progress and triggers relevant communications throughout the mortgage cycle, ensuring customers receive the right insurance offerings at the most appropriate times.

The partnership plans to introduce a streamlined quote process that allows customers to obtain a five-star Defaqto-rated insurance quote in as little as 30 seconds. It also ensures that new business and renewal quotes automatically reflect the lowest price available from Uinsure’s panel of underwriters.

The bank said the new insurance products are designed to meet the needs of both homeowners and landlords, and are backed by Uinsure’s customer service, reflected in its ‘Excellent’ Trustpilot rating.

Virgin Money’s home insurance product offers £1 million in building cover and £75,000 in contents cover as standard. The product also features automatic re-broking at renewal, ensuring customers receive competitive pricing year after year. The fee structure is transparent, with no charges for policy cancellations or mid-term adjustments.

The new insurance is available online, and customers without internet access can take out a policy by phone. For renewals, Virgin Money also offers multiple communication options, including online, email, post, and telephone.

See LinkedIn post here.

“Virgin Money’s home insurance product offers a market-leading quote journey in as little as 30 seconds, competitive pricing through a panel of insurers, automatic re-broking at renewal, and a transparent fee structure with no hidden fees,” said Graeme Sands, head of personal banking at Virgin Money. “In collaboration with Uinsure, who will administer our home insurance product, we provide customers with simplicity, quality, and transparency.”

Martin Schulthiess, group managing director at Uinsure, added that their technology enables the customers to “enjoy an insurance journey that’s free of the complexities they might previously have struggled with.”

“The Virgin brand is one of the most recognised globally, with a long history of pushing boundaries and innovating for the benefit of its customers,” Schulthiess said. “That way of thinking very much mirrors our own way of working and we’re extremely excited to commence our partnership with Virgin Money.”

Uinsure, led by CEO Simon Taylor, has seen substantial growth backed by LDC, a Llloyds Banking Group private equity firm. LDC’s investment in 2024 is part of a broader strategy to help Uinsure expand its market share, enter new markets, and grow its partnerships with intermediaries, building societies, and banks.

The International Federation of Red Cross and Red Crescent Societies (IFRC) has announced a historic milestone in humanitarian finance: for the first time, the Disaster Response Emergency Fund (DREF) has triggered an insurance payout due to rising demands for disaster relief surpassing its established deductible threshold.

The IFRC-DREF is a funding mechanism designed to provide immediate assistance to National Red Cross and Red Crescent Societies during disasters, particularly for smaller emergencies that might not receive global attention. According to a news release, the fund often faced challenges with depleting resources before the end of the year, prompting the IFRC to pursue an innovative solution. The IFRC secured an indemnity insurance policy with global broker Aon and its reinsurers.

Since early 2023, the DREF has been insured on an indemnity basis for an annual premium of CHF 3 million (approximately $3.4 million). The insurance policy allows for a potential payout of up to CHF 15 million ($16.8 million) when demands on the DREF related to natural hazard disasters exceed a deductible threshold of CHF 33 million in a calendar year. Once this threshold is surpassed, the commercial insurance will cover further demands on the fund.

Threshold reached for the first time

In 2023, the deductible threshold was not met, and the policy did not pay out. However, 2024 marked a turning point as the combined allocations responding to various natural hazards, particularly the recent Super Typhoon Yagi in Asia, pushed the DREF spend over the CHF 33 million mark. By the end of September, nearly 100 separate allocations had been made through the DREF, underscoring the escalating need for humanitarian aid.

Nena Stoiljkovic, the IFRC’s undersecretary general for global relations and humanitarian diplomacy, announced the payout at an event coinciding with the United Nations General Assembly in New York.

“The triggering of the IFRC-DREF insurance policy is a significant moment,” Stoiljkovic said. “For the first time ever, a single, worldwide commercial indemnity insurance policy will pay the emergency humanitarian costs of disasters.”

Stoiljkovic emphasised the sobering scale of needs resulting from the disasters of 2024, adding, “The fact the insurance is helping with the burden is good news and proof that there are innovative finance solutions that we hope to grow in coming years.”

Looking forward, the IFRC plans to expand its DREF insurance coverage beyond natural disasters to include responses to epidemics and anticipatory actions. The organisation aims to encourage grant donors to recognise the added value of contributing to the DREF fund, especially in particularly calamitous years where their humanitarian contributions could potentially be amplified through this innovative financing model.

As climate change continues to escalate the frequency and intensity of natural disasters worldwide, such measures will be critical in ensuring timely and effective humanitarian assistance.

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The Asia-Pacific (APAC) region has seen significant digital transformation in recent years, particularly accelerated by the COVID-19 pandemic. This shift has heightened cyber risks across the region, fueling a growing demand for cyber insurance solutions, according to insights from Gallagher Re.

The cyber insurance market in APAC has been expanding at a rate of nearly 50% per year, now accounting for 7% of the global market as of January 1, 2024. However, there remains considerable room for growth.

For comparison, cyber insurance premiums in the U.S. represented 0.0353% of GDP in 2022, while the average across APAC was only 0.0025%, making it at least 14 times lower. Gallagher Re highlights that while countries like Thailand, Malaysia, Vietnam, Indonesia, and the Philippines are emerging players in this space, larger markets such as China and India also have significant potential for further penetration.

A key factor driving the future expansion of cyber insurance in APAC is regulatory pressure. Countries like Singapore and China are enforcing stricter data protection laws, and compliance often requires companies to have adequate cyber insurance coverage.

Gallagher Re notes that this regulatory push could lead to increased market penetration, particularly among small and medium enterprises (SMEs), which represent a largely untapped market in the region.

Despite the growth opportunities, challenges remain. The lack of standardization in policy wording and coverage, coupled with the fast-evolving nature of cyber threats, makes underwriting and risk assessment difficult for insurers. Gallagher Re points out that the relative lack of historical claims data in this new field adds to the complexity.

Reinsurance solutions, according to Gallagher Re, can help insurers address these issues by mitigating the financial impact of large-scale cyber incidents, allowing them to underwrite larger risks and provide more comprehensive coverage.

In the medium term, Gallagher Re expects market penetration rates to rise, particularly in the retail and SME sectors. To support this growth, insurers are likely to enhance the cyber risk management services they offer to clients, helping businesses and individuals better manage their cyber exposure. This, in turn, could reduce the frequency and severity of claims.

The advancement of data science and analytics, including artificial intelligence, is another development expected to impact the sector. Gallagher Re suggests that these technologies will improve insurers’ ability to assess risks, set more accurate pricing, and manage claims more efficiently.

As APAC governments continue to strengthen their cybersecurity regulations, the demand for cyber insurance is expected to rise further. Insurers will need to stay responsive to regulatory changes and adjust their products to meet the evolving requirements across the region.

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The Bermuda International Long Term Insurers and Reinsurers (BILTIR) kicked off its 12th annual Bermuda International Life and Annuity Conference today, drawing 450 global professionals from the (re)insurance industry.

BILTIR, a trade association with more than 70 (re)insurance companies and service providers, hosted the event, which focuses exclusively on the long-term insurance and reinsurance industry in Bermuda.

This year’s conference features prominent speakers, including Doris Kearns Goodwin, the presidential historian and Pulitzer Prize-winning author, who delivered the keynote address.

Other notable speakers include Petra Hielkema, chairperson of the European Insurance and Occupational Pensions Authority (EIOPA); Andy Mais, president of the National Association of Insurance Commissioners (NAIC); and Craig Swan, CEO of the Bermuda Monetary Authority (BMA), among other industry leaders.

Discussions throughout the day focus on global regulatory frameworks and the growth opportunities within the long-term insurance sector. Sessions cover topics such as the role of strong regulations, capital management, and expertise in the industry.

Panelists are expected to address why Japanese life insurers are increasingly seeking reinsurance opportunities in Bermuda, as well as how insurers are working to bridge the protection gap and optimize their asset and liability strategies.

In addition to the formal speaking sessions, the event provides networking opportunities for attendees, allowing industry peers to continue discussions sparked by the presentations.

Suzanne Williams-Charles (pictured above), CEO of BILTIR, highlighted Bermuda’s role in driving these discussions, stating that the island is a prime location to explore key industry trends.

“There’s a clear appetite for the industry to come together and create conversations around the future of the industry – in fact, we sold out this year’s event faster than ever before,” she said.

BILTIR represents the long-term insurers and reinsurers in Bermuda, advocating for the interests of its members. The organization’s membership includes over 70 businesses in the life insurance, annuity, and reinsurance sectors, as well as service providers, positioning Bermuda as a key player in the evolving global long-term insurance industry.

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ReInsurance Business has unveiled its 2024 list of Elite Women in Reinsurance, which highlights prominent female leaders in the reinsurance industry across Asia-Pacific, North America, and the UK.

Selection process for 2024 Elite Women in Reinsurance list

The selection process involved open nominations, where industry professionals were asked to recommend female leaders who had made significant contributions to the reinsurance sector over the past year.

Nominations were assessed based on the nominees’ professional achievements and their overall impact on the industry. ReInsurance Business then reviewed all submissions and finalised the list to recognise 50 individuals.

Tanya Dasgupta recognised as an Elite Woman

One of this year’s honourees is Tanya Dasgupta, the head of the Affinity Solutions Division at Lockton Pacific.

With over two decades of experience in the financial services sector across Australia and New Zealand, Dasgupta is noted for her leadership in developing and distributing digital products to a wide range of clients, including individual consumers, partners, and member-based organisations.

Since joining Lockton in February 2023, Dasgupta has spearheaded the introduction of Lockton Pulse, a digital platform targeting small and medium-sized enterprises (SMEs). The initiative provides clients with innovative product solutions and practical insights, all integrated into a single digital platform.

In addition to her industry contributions, Dasgupta volunteers at the Addi Road Community Centre, an organisation that addresses food insecurity and supports human rights and sustainable community development.

Employers are being warned to beef up the security of their recruitment processes to avoid becoming victims of fake employee hiring schemes.

The call came after KnowBe4 experienced and mitigated early this year an infiltration attempt by a fake IT worker from North Korea into the organisation.

Stu Sjouwerman, CEO of KnowBe4, advised employers to educate all employees involved in the hiring process to prevent similar instances in their organisations.

“[Organisations should] consider various mitigation tactics such as updating the organisation’s hiring process to include asking the candidate to submit fingerprints for identity verification purposes, threat model the organisation’s hiring process, and more,” he said in a statement.

White paper on hiring scheme released

KnowBe4 has also released a white paper providing advice on how organisations can protect themselves from the hiring scam.

The white paper contains information on what the North Korean fake industry is like, signs to look out for, as well as the ways organisations can update their hiring process to prevent recruiting fake employees.

“Fake remote employees and contractors are now something everyone needs to worry about. Every organization should be updating its hiring policies, processes, and education to reflect this new reality.”

There are common signs of this fake employee hiring scheme both during and after the hiring process, Sjouwerman said.

“We were inspired to share our experience with this unfortunate situation to bring awareness to how pervasive this situation is and to use it as a warning to help protect other organisations from falling victim.”

Sjouwerman shared that the individual showed a “high level of sophistication in creating a believable cover identity” and was able to exploit the weaknesses of their hiring and background check processes.

The fake employee’s laptop was later shut down within 25 minutes of the first security alert, with KnowBe4 saying no illegal access was gained and no data was lost or compromised.

In a recent reinsurance outlook briefing, specialists from Moody’s Ratings examined how primary insurers have had to retain more exposure to small-to-mid-sized cat events as reinsurers have withdrawn capacity or significantly increased prices.

A lot of these risk events relate to severe convective storms, noted Brandan Holmes, VP-senior credit officer at Moody’s Ratings. This has prompted primary insurers to make decisions whether to retain the risk and pay more for reinsurance, retain the risk and get comfortable managing it, or withdraw from the risk in certain higher-risk areas. Moody’s research indicates that insurers are retaining more risks, which has contributed to the difference in profitability performance between reinsurers and primaries in the past few years.

Offering his perspective, Joss Matthewman (pictured), senior director of climate change product management & strategy at Moody’s Ratings, looked to severe convection storms as an example. With regard to that peril, he highlighted that the impact of climate change remains very uncertain. “To really understand the impact of climate change, we have to think about what drives severe convective storm activity,” he said. “So, we have convective available potential energy, or CAPE, that’s a measure of the amount of energy which is available for convection. That’s really important for storm generation.

“You then have the vertical wind shear, so that’s the change in the size, wind speed or direction of the horizontal winds as you move up in the atmosphere. And then you have convective inhibition, that’s the resistance of the atmosphere to getting convection going. It’s the energy required to lift an air parcel to a level such that it can just keep on rising.”

When CAPE and vertical wind shear increase, you get a corresponding increase in the severity and frequency of these severe convective storm events. But conversely, Matthewman said, when you get more inhibition, you’re going to suppress severe convective storm activity. “So, the question really is, ‘how are these climate drivers going to be impacted by climate change?’”

What impact has climate change had to date?

Looking at the climate change impacts which have occurred to date, he noted that trends have been observed in only a small minority of regions, and even a small subset of geographies within those regions. European severe convection storm research has found that there are significant trends in combined CAPE and wind shear around the Mediterranean, but particularly in the Po Valley. That’s especially problematic, he said, as it’s an area of existing high risk for severe convective storms.

“We are seeing trends in that geography, but not really across the domain as a whole for severe convective storms,” he said. “But as for what the future could hold, projecting out the impact of climate change on those parameters which drive these severe convective storms is really challenging. Severe convective storms are driven by these micro scale processes. And the climate models which are used to produce these future climate projections really have resolutions which are on the 10s or hundreds of kilometers, so those micro scale processes can’t really be resolved at that resolution.

“And so, there’s going to be a degree of approximation which has to be made in how these events are captured in these models, and that’s going to come with higher uncertainty.”

Understanding competing effects in the context of severe convective storms

Matthewman highlighted that should there be an increase in both the convective inhibition and the CAPE, that could lead to a situation where there are fewer events overall, due to the increasing inhibition. However, the events which are seen could be more severe because of the increase in CAPE. “So, you can get that competing effect, and that’s going to impact different contracts in the insurance and reinsurance industry in different ways.

“But overall, I would say severe convective storm does remain one of the more challenging extreme weather perils when it comes to understanding both the impact climate change may have already had, but also the impact we might see in the future.”

Berkshire Hathaway Specialty Insurance (BHSI) has expanded its European footprint with the opening of a new office in Milan and the appointment of Leonardo Castrichino (pictured above) as country manager for Italy.

The move is part of the company’s broader strategy to grow its presence across key European markets, which earlier this year included its formal entry into the Spanish surety market with the appointment of Jesús Barbero as head of surety.

The Milan office will serve as a hub for BHSI’s operations in Italy, where the company is offering a range of property, casualty, and executive & professional lines products, including global multinational program capabilities.

Leonardo Castrichino will lead the company’s efforts in Italy, bringing nearly 30 years of experience in the European insurance market. Prior to joining BHSI, he held numerous leadership roles in the industry, most recently serving as chief operating officer for the Europe, Middle East, and Africa (EMEA) region at another global insurer.

Alessandro Cerase, head of Europe at BHSI, noted that since the company began expanding into Europe in 2016, its focus has been on long-term, sustainable growth.

“We are pleased to now expand into Italy with Leo leading our business, building a team with exceptional talent, and bringing the BHSI brand, balance sheet, and service to the marketplace,” Cerase said.

In addition to Castrichino’s appointment, BHSI has also named several key leaders to its Milan team:

• Marco Vantellino will serve as head of executive & professional lines, joining BHSI with 20 years of experience in the field. He was previously head of financial lines for the Mediterranean region at another global insurer.
• Thomas Tasso has been appointed head of property – energy and construction. With nearly two decades of underwriting experience in property and engineered risks across Europe, he was most recently head of property for the Mediterranean region at a different global insurer.
• Nicoló Mussi will lead commercial and financial institutions for executive & professional lines. With over 10 years of experience, Mussi’s focus will be on building BHSI’s directors & officers liability and financial institutions business in Italy. He was previously senior underwriter & financial institutions practice leader at another insurer.
• Chiara Baldissara, who joined BHSI in 2017 as an underwriting technician in London, has been named operations manager and will relocate to Milan for her new role.

BHSI said that its expansion into Italy and Spain underscores its commitment to growing its presence in key European markets, supported by experienced leadership and a strong focus on providing comprehensive insurance solutions tailored to local market needs.

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In recent insights, Hannover Re said that it expects stable prices and conditions for property and casualty reinsurance treaty renewals on Jan. 1, 2025. The reinsurer forecasts a balance between supply and demand across most markets.

In 2024, treaty renewals saw improvements in pricing and conditions in some areas, while others remained stable compared to the previous year. Hannover Re used the favorable market environment to grow its portfolio with existing clients and secure new business.

While some primary insurance markets have seen modest price reductions following significant increases in prior years, Hannover Re noted that it continues to emphasize non-proportional reinsurance covers.

“We want to grow with our clients and continue to offer the best possible coverage and capacity. To do this, rate levels must remain adequate. Insured losses are still trending higher, and with the challenges facing the industry, reliable reinsurance protection is indispensable,” said Jean-Jacques Henchoz (pictured above), chief executive officer of Hannover Re.

As of June 2024, Hannover Re reported a capital adequacy ratio under Solvency II of 276%. Rating agencies have affirmed its financial strength, with Standard & Poor’s rating the reinsurer AA- and AM Best assigning an A+ rating, both with stable outlooks.

Hannover Re also said that it continues to focus on emerging risks in collaboration with its business partners, developing both traditional and innovative solutions. One example is the launch of the world’s first catastrophe bond designed to cover cloud outages, brought to market in April 2024.

The reinsurer is responding to the growing threat of cyber risks, which have increased as digital transformation advances.

“While cyber risks remain a significant area of concern, climate change is one of the most pressing challenges of our time. Recent floods and heatwaves have underscored the increase in extreme weather events, which is a strain on the economy and continues to test insurers,” said Sven Althoff, a member of Hannover Re’s Executive Board.

Market outlook for 2025

Hannover Re expects continued stability in pricing and conditions across European markets, despite some regions experiencing fewer extreme weather events in 2024 compared to the previous year.

In Germany, car insurance remains unprofitable, and further rate adjustments are likely. Meanwhile, the UK and Ireland saw rate increases, particularly in motor insurance, though some liability lines stabilized.

In North America, property business continues to benefit from increased premiums, driven by strong demand and frequent mid-sized losses. Social inflation, litigation costs, and rising damages in liability lines remain concerns for reinsurers. Hannover Re expects ongoing adjustments in prices and conditions for liability segments due to these factors.

Latin American markets, previously insulated from natural disasters, were hit hard in 2023 by Hurricane Otis in Mexico and floods in Brazil. This led to increased demand for reinsurance, driving up rates. In the Asia-Pacific region, Hannover Re’s relationships with clients in China and India remain strong, while higher retentions are anticipated in response to reinsurance cost increases in Japan, Korea, and Southeast Asia.

Australia and New Zealand experienced a relatively quiet 2024, though rising insured values and inflation continue to drive demand for catastrophe coverage.

What about specialty and casualty?

The market for catastrophe business saw increased demand in 2024, with stable prices at an attractive level. While the 2024 Atlantic hurricane season started early with Hurricane Beryl, losses remained relatively low.

However, Hannover Re expects the overall season to surpass the 30-year average in terms of activity. In response to these risks, the company continues to see strong demand for reinsurance capacity, particularly in North America.

In aviation reinsurance, after several years of price improvements, conditions have stabilized. Rates for space covers have hardened significantly due to large losses in 2023 and 2024. Hannover Re has scaled back its involvement in this segment and will continue to evaluate pricing and conditions before committing further.

In marine and offshore energy reinsurance, geopolitical tensions, including the war in Ukraine, continue to drive up risks. Despite moderate expenditures from these events, Hannover Re expects stable pricing for marine risks.

Hannover Re’s focus on structured reinsurance remains strong, with the premium volume in this segment reaching €6 billion. The company said that it also continues to lead in the insurance-linked securities (ILS) market, transferring €3.4 billion of catastrophe bonds to the capital markets in the first half of 2024. Demand for structured reinsurance remains robust, offering growth opportunities while helping clients mitigate earnings volatility.

Hannover Re anticipates stable demand for facultative reinsurance, particularly in property and casualty business, with growth expected in the renewables sector.

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OpenAI introduced a significant update to its ChatGPT platform on Sept. 12 with the release of the o1 model, codenamed Strawberry. This latest development is now integrated into the ChatGPT service and presents enhanced reasoning capabilities, which could have substantial implications for industries such as insurance.

According to insights from Reinsurance Group of America (RGA), one of the most notable improvements in the o1 engine is its performance in specialized areas like PhD-level physics, the LSAT, and advanced mathematics.

This upgrade also aims to address a critical issue in large language models (LLMs) — the occurrence of hallucinations, where the AI generates information that may not be accurate or based on real data.

The concept of reasoning, as OpenAI uses it, refers to the system’s ability to think through complex questions by breaking them down into smaller, more manageable queries. While OpenAI does not claim the system has reached human-level intelligence, the o1 model marks a significant advancement in how AI platforms process information.

RGA notes that reasoning, in this context, aligns with the definition provided by Merriam-Webster, which involves comprehending and inferring in a rational and orderly way.

The codename Strawberry refers to a reasoning problem often used to illustrate the difference between simple answers and thoughtful processing. The problem asks where a strawberry would be if placed in a cup, turned upside down, and then microwaved.

Many AI systems would incorrectly state the strawberry is still in the cup inside the microwave, failing to consider that it likely fell out. The o1 model’s reasoning capability allows it to work through these types of problems more effectively.

Potential use in re/insurance

For the insurance sector, RGA highlights the relevance of this type of reasoning in underwriting and risk assessment. Insurers are often tasked with evaluating complex, multi-step scenarios. For example, an underwriter might face a case where a 32-year-old woman, recently diagnosed with hypertension and anxiety, has not yet received medication for either condition.

To assess her life insurance risk, the underwriter would need to consider a variety of factors, including medical history, lifestyle, and occupational details, all of which could influence mortality risk.

The o1 engine, when asked to reason through this type of scenario, broke the process down into several steps. First, it identified key factors like age, medical history, and lifestyle. It then assessed these elements, noting the absence of medication details, which would be critical to evaluate the risk fully.

From there, the AI gathered pertinent data, including family medical history and risk factors like hypertension control and cardiovascular risk, before providing an evaluation of the overall risk.

RGA points out that one of the primary changes introduced by the o1 model is that it now generates additional questions to address gaps in information. This is particularly relevant to insurance, as it helps reduce the likelihood of hallucinations by prompting the AI to verify its initial responses.

AI impact on re/insurance

As OpenAI continues to advance its technology with updates like o1 and the forthcoming GPT-5, the insurance industry may experience transformative changes. RGA notes that the improved reasoning and query-generation capabilities could enhance the accuracy of risk assessments, reduce errors, and streamline complex decision-making processes in areas like underwriting, claims handling, and customer service.

The o1 engine’s ability to think through multi-step problems—similar to the reasoning process used by human professionals—may provide insurers with a more reliable tool for assessing risks and making data-driven decisions.

This development highlights the potential of AI to continue evolving in ways that could significantly impact the insurance landscape moving forward.

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