Insurance news

Read more: New MGA incubator platform rolled out for insurance entrepreneurs

“We’ve got $650 million of gross written premium currently under management based on their forecasted projections for 2022,” he said. “We’ve got 29 classes of business, representing a good blend of insurance, reinsurance, insurtechs, traditional quality underwriting MGAs and a few consumer propositions. So, we’ve got a nice blend in terms of our client matrix, which has been quite healthy.

“And what’s underpinning a lot of that is the continued rollout of our multi-territorial strategy [in line] with our desire to have a number of strategically placed MGA incubation models scattered around the globe. So, that’s Europe, the UK, the US and we’re just about to launch in Asia with a partner and our first MGA, and we’re also looking at LATAM as well. That’s in addition to spreading out a bit more in Europe – with a move into Southern Europe as well.”

Working across so many different classes of business and locations has given Maleary a keen insight into the challenges pressing on the MGA market and he noted that top of the agenda for MGAs remains the question of securing risk capital. Finding the right risk capital partner is the biggest challenge across all classes and territories right now, he said – and several factors go into determining the right partnership, including an aligned approach and vision, and a longer-term approach to success.

Read more: Pro MGA Solutions CEO on the future of MGAs

Meanwhile, while the regulatory framework has become slightly tougher, for businesses that are structured accordingly it’s a case of following the process. This is where Pro MGA Solutions’ offering really comes into its own, he said, as the team has spent significant time ensuring its oversight frameworks are robust and meet, if not exceed, regulatory requirements in every territory in which they operate.

“As to how the high inflation environment is impacting MGA development and scaling, a lot of that is happening around the investment side and the working capital element of it more than anything else,” he said. “[It’s] around the control of costs and ensuring that costs are not spiralling out of control in terms of whether that’s general salaries or general servicing fees, or costs for IT and technology.

“I think a lot of it hasn’t really hit home yet. And I think we’ll probably find as we come through the remainder of 22 into 23, what we’ve all been experiencing around inflation will start to bite and there’ll be more focus around cost management and more focus on embracing things that will help to streamline that.”

It will be interesting to see what happens on the investment side of things, Maleary said, as the current lay of the investment landscape depicts a positive outlook for MGAs. He is seeing this environment as extremely robust in terms of entities looking to invest in MGAs in multiple ways – whether that’s angel investors, private equity, venture capital, or institutional investors.

“There still seems to be some significant options out there,” he said. “But as we go through the remainder of this year and into next, we’ll just have to wait with bated breath to see how that’s impacted because of what’s going on in the world around inflation.”

As it stands, Maleary said, the appetite of risk capital partners to embrace the MGA route to market is a real opportunity. He has seen a “significant increase” in the opportunities available for MGAs to partner with risk capital partners which are really thinking about their own growth strategies and who understand that the MGA proposition is a key part of that.

Read more: Pro MGA Solutions CEO discusses the evolution of the MGA sector

“Despite what you might call hard markets in some areas,” he said, “I’m still seeing strategic relationships being built with a number of MGAs during that hard cycle, which I think is good and robust and a healthy thing for a risk capital partner to do. I’m seeing that with more partnerships wanting to be created, not just between the MGA and the insurer, but also the reinsurer.

“I’ve seen quite a lot of coming together and like-mindedness around creating a proposition that is streamlined, perhaps light-touch, cost-effective but able to deliver good, quality profitability and ultimately a good, quality service and proposition to the customer. And the MGAs that have entrepreneurial flair, that are a bit more innovative and that are happy to partner accordingly… I think, they’ve got significant opportunities to create long-term relationships.”

Pro MGA Solutions prides itself on taking a partnership-first approach to growth, and Maleary noted that to him a great partnership is about being aligned, transparent and trusting. With his deep-rooted history and experience in the MGA market, he is able to guide firms along every step of their strategic journey, he said, and offer real guidance on what they should be looking for as they shape their medium-to-long term vision.

Critical to his team’s approach, he said, is finding the right MGAs to partner with and while Pro MGA Solutions is designed in such a way as to be everything to everyone, the company has a careful selection process. That’s of paramount importance as it keeps that partnership-first approach front-of-mind throughout the entirety of the relationship – and it’s a model that has worked very successfully to date.

“We’ve had a busy 2022 already but we’ve a few more things to do in the remainder of the year,” he said. “We’ve got a bit more strategic growth to do, a bit more positioning as we go into 23. We’ll probably have a few more clients come on board, I anticipate we’ll end up securing 15 clients in total for the whole of 22, which is a similar number to 21. So, we have a very healthy pipeline reflecting that this is a very healthy market when it comes to the world of the managing general agent.”

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Read more: Revealed – which insurance market is poised for considerable growth?

With 11% of all households having already welcomed a new pet, while 10% more plan to do so, the shifting makeup of the market is clear – as is the opportunity for insurers to step up and support pet owners with new products and services. A recent report by Global Market Insights revealed that the value of the pet insurance market is expected to reach US$14.9 billion (approx. £12.31 billion) by 2030, growing at a compound annual growth rate of 7.1% between 2022 and 2023.

It’s with these market conditions in mind that the UK insurance giant Admiral announced it is expanding its insurance offering with the launch of Admiral Pet. Admiral Pet is the group’s fourth insurance product to be underwritten by the insurer – alongside motor, home and travel insurance. Where before customers could buy pet insurance through the brand via a third party, now all pet policies will be 100% Admiral, with pricing, underwriting, and customer service handled in-house.

Speaking with Insurance Business UK, Pritpal Powar (pictured), Admiral’s head of pet, touched on how the offering came about and how it fits in with the current lay of the pet insurance land in the UK.

“There has been significant growth in the last two years due to a boom in pet ownership linked to COVID, and people spending more time at home,” he said. “It will be interesting to see how this develops as we move to more hybrid ways of working and a full return to work across some industries.

“The market itself has some potential to grow still, with an estimated 50% of dogs and cats uninsured. Providers who can offer a good balance with a range of valuable products, affordable premiums and effortless service, will be able to benefit from this potential growth.”

There’s little doubt that the big increase in pet ownership during COVID has fuelled growth in the pet insurance market, Powar said, but there other factors that have contributed to the evolution of this space. The evolution of technology has seen virtual vet services now become commonplace and the sector is seeing growing interest in other tech, including wearables to help customers be even better at taking care of their pets.

Read more: Admiral Group appoints new group chief risk and compliance officer

As head of pet, he said, he’s responsible for building and leading the team – his main responsibility is to ensure the business meets the needs of customers, allowing it to scale and grow. Exploring how Admiral Pet first came about, he highlighted that the insurer had been trading pet insurance through a white label partnership for some time and built a modest base of customers with limited focus.

“But it was evident to really grow the business we needed to do things differently,” he said. “This involved bringing in some pet expertise from the market in a range of key roles and recruiting talent from across Admiral to supplement this. The idea for the business was to take the things that Admiral does really well and apply them to pet insurance, combining this with key customer expectations on product and service to deliver a compelling proposition to the market.”

Admiral Pet differentiates itself from Admiral’s previous pet insurance offering in a variety of ways, Powar noted. It provides simpler products that offer more to customers as well as more competitive and targeted pricing, new and innovative customer journeys, and the inclusion of new value-added services such as 24/7 video vet consultations as standard.

As to the next steps of the rollout of the offering, Admiral Pet has its path forward clearly set out, he said: “The next phase of our plan is to build and grow the business, taking the feedback from our customers and market to continuously improve our products, services and pricing.”

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It’s not the first such demand for a rebrand to a pre-existing concept or concern that has made headlines in recent weeks. The World Health Organisation (WHO) recently invited the wider public to submit new name ideas for the Monkeypox Virus in an online portal in a bid to find a name “not stigmatising.”

When done right, the power of a name change or branding overhaul is something to be admired. A rebrand can signify so many things – a new beginning, a fresh perspective, an updated offering or a shift in strategic priorities. Sometimes a rebrand makes logistical sense for a business – after all, an insurance broker with some commutation of Willis or Gallagher or Howden in its name is unlikely to compete with the titans that share its designation when it comes to online search engines.

In other cases, a rebrand is more about communicating an internal change within a business in order to reduce confusion and align branding with a new strategic purpose. Following an acquisition, a firm may seize the opportunity to present a new face to the market and herald the changes its new ownership will bring to customers and partners alike.

In insurance, a willingness to update policy terminology and product wordings often represents a welcome change to insurance brokers who otherwise have to wade through multiple iterations of the same offering. An aligned and accessible approach to wording has long been championed by associations including BIBA and the CII, as well as regulators including the FCA and PRA.

Revamped and more comprehensible wordings are of substantial benefit to brokers and insureds alike, but the more effective use of language can also have significant implications for the internal workings of insurance businesses. For example, Zurich Insurance found it was able to increase the number of women applying to senior management roles by 45% in three months by using more inclusive language in its offering. This “nudge campaign” resulted in a 25% increase in female applicants across the company.

But as seen from the above example, a name change or wording update can be effective and efficient at switching things up when, and really only when, it’s not really about the name change at all but rather about communicating an underpinning cultural or strategic shift.

A name change should not be seen as an excuse to sweep your concerns about something under the rug and dress it up with the sticking plaster that is a new identity. From my perspective, there’s little point in rebranding ESG or Monkeypox or even an insurance business if it amounts to little more than a hollow magic trick attempting to convince the viewer that change has been achieved.

If attitudes to ESG are not what they should be, it’s time to refocus on where ESG measures need to be improved, and where further education and insight are required to communicate its worth to the naysayers. The problem with Monkeypox is not its, admittedly ridiculous-sounding, name but rather the attitudes of those allowing it to be associated with intolerant discourse.

Because language, with all its implications, is one of the most powerful forces in the world, not for its own sake but rather because it drives and is itself moulded by change. For insurance firms looking to tap into that, change needs to be driven from the inside out, with language reflecting real evolution, not offering a shiny distraction from where it ought to be.

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Read more: Markel International reveals new head of trade credit

Looking at the roots of Markel International’s community work, Upton revealed that it makes up one of its five commitment pillars, which represent the values outlined in the ‘Markel Style’.

“The Markel Style embodies the culture of Markel, and community is a fundamental part of this culture,” he said. “Markel has always had this ‘Style’ in its DNA. In fact, our organisation’s existence can be traced back to a community need. Jitney Buses – which was a popular method of transport in Norfolk, VA, in the 1930s – were fast becoming uninsurable, due to fires. Recognising the importance of them to the community, Sam Markel set up his mutual insurance business to ensure that they could still operate effectively.”

Before Markel was ready to “go public” in the 1980s, he said, Alan Kirshner, with the support of Stanley Markel, authored the Markel Style – a statement of values that communicated to investors and the public the principles that have guided the company since its inception in 1917. According to Kirshner, the Markel Style “honours what Sam and his four sons brought to the table… treat people fairly, provide upward potential and the opportunity to grow, keep a sense of humour, value teamwork,” while nurturing the organisation’s colleagues, customers, and communities.

“In recent times, Markel International continues to live up to those values by providing high levels of support to the communities in which it serves,” Upton said. “Last year, our organisation entered a three-year partnership deal to sponsor the Goodwood festival’s Magnolia Cup – an all-female race which was conceived to overcome boundaries within sport and more specifically horseracing, to create an inclusive community in support of women, their ability and wellbeing.

“It’s no secret that the insurance industry has experienced similar challenges, and so it made perfect sense for us to partner with Goodwood when this fantastic opportunity presented itself to us.”

Now in its second year of sponsorship, he said, the Markel Magnolia Cup has been a great platform to promote Markel as a great place to work and attract new talent by accessing audiences that it might not reach otherwise. As the company continues raising awareness of its ambitions through this sponsorship, the hope is that it can create more opportunities for women not just within Markel, but also across the wider insurance industry.

Read more: Markel boosts renewable energy team

Examining the work that Markel International does to support its community, Upton stated that for the team, community is all about how it can interact with its work colleagues, business partners, service providers and the wider world.

“Coming to work and enjoying our jobs should just be one part of life at Markel International,” he said. “And so, it’s important that as a business we’re doing as much as we can to provide everyone with opportunities to have a wider and positive impact on the people we work with and the communities that we serve.

“We want to be a platform that allows people to be something more than just their role at Markel International. That’s why we set up the Community Network, which has allowed colleagues to get involved in a range of initiatives, focusing on four core areas – charity, people, sustainability, and sports and social.”

Looking at the impact each of these initiatives has seen over time, Upton noted that each core area within the Community Network has organised a number of different initiatives and campaigns to embody Markel’s community vision.

The Charity group, for example, he said, wanted to ensure that Markel International supported a charity endorsed by its employees. Children and youth came out on top as a theme of choice, and after researching several charities, the company decided to partner with one aimed at improving the health, welfare, and education of children, and giving them the future they deserve.

“Earlier this year, we launched our first fundraising campaign to support their work arising from the Russia-Ukraine war,” he said, “and raised over £75,000 (and counting) through employee donations and our corporate charity match programme.

“Since the network’s inception, it has improved Markel’s charitable benefits by allowing each of our employees to take up to three volunteer days per year. In addition, the network has improved what we call: ‘Markel Match’, meaning that Markel International will now treble any donation, or amount raised, up to a cap of £3,000 (for Markel’s donation) per employee.”

People are the building blocks of a company, Upton said. And that’s not just those who work for Markel International, but also the communities of which it is part. The company’s People group is the cornerstone of the Community Network with regards to engaging with colleagues globally. He added that the group has recently launched a fantastic campaign called: ‘Where in the World are We?’.

“As part of this campaign, each month, a different Markel office puts together a short video showcasing the local culture; highlighting what the office does and how the team winds down,” he said. “So far, we have heard from Singapore and Munich, and the campaign has already started to drive healthy competition as to who can provide the best content.”

Meanwhile, the Sustainability sub-group has run two ‘Big Clean Up’ campaigns to help the company give back to the environment, Upton said. Both of these coincided with World Ocean Day, and Markel International pledged to donate money to Seven Clean Seas for every bag of rubbish collected.

“During 2021, we encouraged employees to go out and collect litter in their local areas, whether it was at a park, riverbank, or beach,” he said. “In 2022, we ran employee-led groups in London, Essex, Brighton, and Leeds to clean up their local areas, and then provided some time for each group to socialise afterwards. Across both these campaigns, we donated a total of £25,000 to Seven Clean Seas (£15,000 in 2021 and £10,000 for 2022).”

Sports and social activities are a key part of many companies, Upton said. And while these types of events have been tricky to put on in recent years, Markel International’s Sports and Social sub-group has run a number of initiatives, including the ‘Can’t Stop, Won’t Stop’ charity race, where people could walk, run, or cycle as part of a team. The business covered over 39,650km in April last year in addition to running run poker and curry nights, park and golf days, as well as an ongoing five-a-side football league in London and Manchester. 

Upton highlighted that the time is right for this change to take place on a wider basis. The office environment is changing and has been for some time, he said. More employees are pushing for a better work-life balance and a deeper desire to be part of something good. Businesses that pride themselves on trying to improve the world around them are often seen as more attractive companies to work for. Some insurance firms have become wise to this and have set up groups akin to the Community Network at Markel.

“These employee resource groups provide a platform for change at a grassroots level, which is often more impactful as there’s usually much more buy-in from the entire company in question,” he said. “Whether this constitutes a need will be up to the management at these businesses, but there is certainly a ground up desire within the insurance market.”

For smaller businesses looking to get involved with community support efforts, knowing where to begin is half the battle and Upton shared some advice on how to get started.

“Community involvement isn’t dependent on the size of business,” he said. “At Markel International, these initiatives are all employee groups, and, therefore, just by providing people within a company, who are passionate about the community, a platform to get involved in is often all you need to do. From there, the group can decide which way they want to contribute and what works for their company.

“Smaller businesses may not have the finances to make large donations, but there are usually incentives for philanthropic endeavours, so even the smallest company should be able to find a way to give back to their local communities.”

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Commercial property insurer has announced the election of Thomas J. Quinlan III to its board of directors. Quinlan is the president and CEO of Donnelly & Sons Company, a global provider of marketing, packaging, print and supply chain solutions.

“Tom brings significant experience leading and growing major business-to-business companies like those that many of our clients operate,” said Thomas A. Lawson, board chairman at FM Global. “He deeply understands the value of choosing resilience to maximise long-term organisational value. He will be a tremendous asset for our company and client-owners.”

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“We and other investors have seen the performance of the business deteriorate under the leadership of William Spiegel,” Phoenix said in the open letter to shareholders released last Friday.

Read next: Phoenix urges R&Q Insurance executive chairman to step down

Now, Vidal Capital has released a statement to declare its support for Spiegel’s leadership, insisting that a sudden change in management would shift the insurance group’s focus away from proper business execution.

“Vida Capital Management supports the current executive chairman, William Spiegel, the management team and the board of R&Q in their efforts to maximise shareholder value,” the statement read.

“We believe a dramatic change to the strategy or to the executive leadership at this time would be counterproductive and would create a major distraction for the company. This is especially true after the successful recent capital raise, which allows the company to focus on execution of its strategy without the fundraising and merger distractions of the last year. We look forward to seeing the results that the team can deliver going forward.”

Vida Capital holds around 9.07% of shares in R&Q.

Read more: Brickell PC Insurance backs Phoenix’s call to axe R&Q CEO

In the requisition notice, Phoenix said it was “forced” to make the issue known to the public because the concerned shareholders “received no real engagement” from the board of R&Q.

The Phoenix board also claimed the majority of the shareholders hold the same view regarding the matter, and R&Q’s largest shareholder Brickell PC Insurance was the first to come forward in agreement with its own open letter on Tuesday.

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Read next: Phoenix urges R&Q Insurance executive chairman to step down

Phoenix also claimed to be unanimous with the decision and believed the majority of shareholders held the same view regarding the matter – and it seems Brickell is the first to come forward in accord with its own open letter to shareholders.

“We have seen that Phoenix has written an open letter calling for a general meeting to be held at which a resolution will be proposed for William Spiegel to stand down and we intend to vote in support of this proposal,” Brickell’s open letter read.

“We continue to be very supportive of the company and believe in the underlying business and its long-term potential. However, we are very concerned about the recent significant deterioration of the business. As a result, we have lost confidence in the ability of R&Q to deliver on its potential under its current leadership.”

Brickell’s open letter had very similar contents to that of Phoenix’s, outlining the generous backing given to R&Q but pointed to failing to resolve these concerns in a private and productive discussion.

“Our support for R&Q is demonstrated by the fact that, notwithstanding recent events, we contributed in excess of $25 million of equity funding as part of the recent fundraise, the completion of which was announced on July 11, 2022,” the open letter read.

Read more: Sale of R&Q falls through

Earlier this year, Brickell was also set to acquire R&Q in a deal that valued R&Q’s share capital at £482 million, but the former failed to secure the required shareholder votes to approve the transaction, on top of Brickell’s allegations that R&Q had been in breach of certain obligations.

Some have suggsted the failure and controversy around the deal was what led to Phoenix’s requisition notice.

Regardless of the challenges that R&Q is facing, Brickell said it remains committed to its investment in the holdings company as a long-term investor. Brickell is currently R&Q’s largest shareholder at 23.2%, with 9.9% in voting rights.

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Phoenix Group is looking to snag its next takeover deal as more “break-ups” are rumoured to take place in the insurance sector.

Andy Briggs, chief executive officer of Phoenix, told This is Money that the UK market has around £480 billion of closed-book assets – insurance policies that are no longer for sale but are still being paid for their premiums – that are “split around a number of different players.”

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In an open letter to shareholders, Phoenix Asset Management Partners expressed serious concerns over R&Q Insurance Holdings Ltd’s deemed downfall, calling for a special general meeting to vote on the removal of the incumbent executive chairman and the reappointment of his predecessor.

“Phoenix represents 46 million ordinary shares in the company and have been continual investors in the company since its IPO in 2007,” the open letter read. “We and other investors have seen the performance of the business deteriorate under the leadership of William Spiegel.”

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CFC’s cyber development leader Lindsey Nelson (pictured) joined team leader, cyber threat analysis, Tom Bennett to address several pressing cyber topics, including the role that threat intelligence plays in levelling the cyber playing field. In the context of the current corrective market conditions, she said, the role of proactive solutions in creating a healthy, affordable market has come into its own.

Overall, as an industry, the cyber market has done a good job of maintaining the integrity of the product – particularly at the smaller end – and it’s in large part due to the development and uptake of proactive measures instead of a reliance on reactive solutions. Cybercrime isn’t going to go away, Nelson said, and, in the last 12 months, while CFC has seen the frequency of ransomware decline, it still accounts for 80% of the cost by severity of claims.  

“As you can imagine, we are particularly invested in the idea of reducing the frequency of cyberattacks for businesses in the UK and around the world,” she said. “And our aim is to shift the question you should ask cyber insurers from ‘how many claims have you handled?’ to ‘how many claims have you prevented?’ I think that’s the key criteria to determining experience.

“I asked Tom how many policyholders our cyber threat analysis team have notified since their inception and he mentioned they potentially prevented over 12,000 attacks through notifying customers. So, benchmark that against the 3,000 claims that were handled reactively in the last 12 months. And I think that’s an incredibly powerful statistic [for brokers] to share to show the true value of cyber insurance today and what the product has evolved to become.”

Nelson noted that the evolution of cyber into a proactive product had been interesting to watch, and one that had its early roots in the development of cyber ratings. And conceptually, she said, cyber ratings had noble goals as historically it was very difficult for organisations to assess their own level of cyber maturity.

The early 2000s saw the emergence of these ratings services that could run a scan to provide that assessment, which understandably became very popular as they took a highly technical area and simplified it into a score out of 100, or a rating from ‘A’ to ‘D’. The problem, Nelson said, was when the narrative shift around cyber ratings moved from them being a tool to help identify vulnerabilities to a perceived authority on how secure you are as an organisation and how likely you are to have a claim.

Read more: CFC’s Lindsey Nelson on the first steps to take in the event of a suspected cyberattack

“Lots of security professionals really struggle with cyber ratings, because they can be misleading,” she said. “And it’s because the quality of cyber ratings is completely contingent on data used to produce them and that data is often limited… So the potential for misleading a business owner into a false sense of security or the reverse where reports generate a false positive with an incorrect high score is a dangerous one for that client.”

At its core, she said, the technology that underpins most risk reports is a form of a vulnerability scan, which can be used to help policyholders spot issues but, after 20 years of security report cards, the industry needs to recognise that relying on them can be “dangerous and not particularly useful”. In CFC’s view, there’s a new battleground for cyber which is going to determine who wins and loses in the fight against cybercrime – threat intelligence.

“And in the very simplest of terms, threat intelligence is essentially information companies receive about cyberattacks that are being planned and about companies who are being targeted,” Nelson said. “That information is then used to plan, prepare and prevent cyberattacks from happening to those targeted organisations. I think a lot of people do confuse vulnerability scanning with threat intelligence – they are two totally different things and lead to totally different outcomes for clients.”

CFC’s cyber threat analysis team collect this data on a daily basis, using a combination of government and private sector insight, as well as the firm’s own proprietary threat intelligence sources, to identify policyholders who are on the target lists of hacking groups around the world. The team gets to the client before the threat actors can, she said, stopping them from becoming the victims of catastrophic ransomware attacks.

“[Threat analysis] allows us to identify who their next victims are going to be and our data sources for threat intelligence are richer, more specific and more predictive than ever before with a lot of collaboration with government agencies,” she said. “Unlike risk scores, which are not very predictive of cyber claims, threat intelligence is incredibly predictive of cyber claims.

“If a client has already been compromised, or they’re on a threat actor’s list, then they’ll almost certainly be attacked and extorted at some stage. Our ability to flag that before it happens is the most powerful tool that has been developed to date in the fight against cybercrime. And it’s also completely dynamic in that we’re hunting for signs of threats to our policyholders 24 hours a day, seven days a week.”

By their nature cyber threats are truly dynamic, Nelson said, with the solution that protects against one form of attack potentially ineffective against another. The core principle of threat intelligence, however, never changes – there’s always a threat actor and there’s always a victim. A good threat intelligence service should be able to provide immediate security information tailored to the client’s network which priorities vulnerabilities, predicts threats and enables security teams to rapidly take action.

“And more advanced services like the ones that CFC are using can also integrate vulnerability alerting with real-world threat intelligence covering geopolitical and business intelligence,” she said. “So we can get better at gaining insight into who the victims are going to be and we can prevent attacks irrespective of how it happens. And that’s going to be the most valuable service that any cyber policyholder can ever subscribe to.”

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