June 4, 2019

Big investments and change for insurance

Alongside regulation, big money investments and constant change for the insurance market are the recurring themes of our reported news this month:

Regulation Round Up

  • Digital Regulatory Reporting: The Financial Conduct Authority (FCA) is currently in Phase ll of the pilot they are running on Digital Regulatory Reporting. To help them understand the cost implications, they have issued a short on-line survey  and are inviting as many firms as possible to respond.
  • FCA Innovate: The FCA Innovate initiative was started in October 2014 and is dedicated to encouraging innovation deemed to be beneficial to customers. Since launch, the FCA have provided support to nearly 700 firms and have recently published an evaluation report, The impact and effectiveness of Innovate.

Technologies – investment and growth

Insurtech

blockchain

  • B3i grows investor base: The SBI Group has become the 17th investor in the blockchain insurance initiative, B3i. A statement on the group website states “The establishment of this new shareholder relationship reflects the ongoing support by the market for B3i and reinforces its strategy to build a platform and protocol to address critical insurance market needs.”

Drones

  • FAA estimate 2.85 million drones flying by 2022: And 15% will be used for commercial purposes. A recent article from Insurance Business claims Drones will bring sky-high efficiency to the insurance market.

Insurance market stories

Insurance News

  • Lamp Insurance Company: Unrated Insurer Lamp was recently forced into insolvency, affecting an estimated 13,500 customers. The Gibraltar based insurer sold cover for landlords, holiday homes, healthcare, buildings and legal expenses, among other areas. Lamp was forced into insolvency when it ran out of money and failed to bring in extra funding. The Financial Services Compensation Scheme (FSCS) will work with the appointed Liquidator to protect eligible UK customers. In other related news The FSCS is due to pay out £6.9 million to taxi drivers affected by the Alpha collapse.
  • Insurance start up Pikl attracts new funding: Direct Line founder Sir Peter Wood leads £2.5 million investment in Pikl.
  • Aspen Insurance Holdings reviews strategy: After a review of their insurance strategy, Aspen is to place their UK MGA in run-off, amongst other strategic changes.
  • Insurance for ‘generation rent’: A digital insurance start-up, Urban Jungle, raised £2.5 million in a seed funding round. The company aims to be faster and cheaper for customers by clever use of technology.
  • The top 100 Insurance brands: The latest Brand Finance Insurance 100 place Chinese Insurer Ping An as the most valuable insurance brand. They come out ahead of Allianz and China Life.
  • Updated industry qualifications. The Chartered Insurance Institute (CII) is to update the Corporate Chartered proposition for the Insurance and Financial Planning sector. Their aim is to support “a modern profession and the public”. Five priorities for this initiative are reported in the news section of the CII website, including relevance to changing business models.

Changing Risks

  • An evolving litigation landscape for the life insurance market: An interesting article from the US, Insurtech and beyond, looks at the potential drawbacks as well as the benefits of the move towards accelerated underwriting.

Claims

  • Motor theft claims rise sharply. A recent article on the BBC website quoted figures released by the Association of British Insurers (ABI) which show that the claims for the period January – March 2019 were the highest for any quarter since 2012.
  • QBE transform their claims process: Quoted in their Press Release, QBE Chief Claims Officer Jon Fox said “Our Property Decisioning Tool has enabled us to challenge the traditional claims model by automating non-complex claims, improving and speeding up the recovery process…”

Mergers and Acquisitions

  • MS Amlin acquire stake in specialist reinsurance MGA: MS Amlin purchased a strategic stake in Envelope Risk. In an article in the Insurance Journal, Envelope Risk is described as “a global specialist reinsurance managing general agent (MGA), which combines insurance expertise with artificial intelligence-driven cyber risk modelling”
  • Certura Group acquisition: The Certura Group acquires Surely. The insurtech, Surely, provides a cloud-based, multi-lingual and multi-currency Software-as-a-Service (SaaS) product. It allows a user to obtain a quote for an insurance product, buy the product and manage the product online.
  • Another acquisition for Higos: Since becoming part of GRP in 2017, Higos has completed five acquisitions. The latest moveHigos acquires Plymouth broker, The Insurance Group is quoted as the ‘most significant transaction Higos has undertaken’
  • Lloyds invests in one of the participants of the first cohort of the Lloyds Lab: The US based start-up Layr has attracted investment from Lloyds. Layr is a cloud based commercial insurance platform for the small business market. The company has developed a “proprietary price and appetite prediction engine. This allows a business to match requirements with the “right policies from the right carrier at the right price…”
  • LV concludes sale of GI business to Allianz: The FT Adviser headline reads “Industry turns back on General Insurance”. LV are following the same path taken by L & G, with reports in the article that Aviva are also considering their options.