April 4, 2020

Covid-19 and the Insurance Market – Special Edition

What a difference a month makes. The World has been thrown an unprecedented challenge and at every level we will all be judged on how we respond. I would like to dedicate this special edition to the positive and proactive response of the Insurance Market. Regulators, insurers and distributors have had huge decisions to make both operationally and commercially with very little thinking or planning time. That they have all responded so quickly is a huge credit to all involved.

I have picked some of the key decisions and actions that unfolded throughout March.

Leadership

Financial Conduct Authority (FCA)

  • Communication: Recognising the importance of ‘keeping in touch’, the FCA are frequently updating their dedicated coronavirus page.They are also increasing the frequency of their email updates.
  • Prioritised activity: The Regulator has postponed ‘non critical activity’. For example, all required responses to Consultation Papers have been delayed. A full list of changes can be viewed on their website. They have also scaled back their program of business interaction, concentrating solely on critical activities.
  • Advice provided for the market: The FCA produced their advice and an overview of their expectations from the General Insurance industry remarkably quickly. A summary is provided on their website Insurance and Coronavirus: Our expectation of firms

Lloyds of London

  • Guidance for MGAs: Lloyd’s recognises the essential part that Managing General Agents play in the insurance market. To this end they released Guidance for MGAs to help support firms through the multiple decisions that they currently face.

Insurance market response

Extraordinary support from the market

The insurance market as a whole has risen to the challenge of #inittogether. I have used just a few examples here, but there will be  multitude more. In our latest blog, Insurance Market Response to Covid-10, we highlighted some extraordinary actions from Veygo, Equipsme, Qlaims, Flock and Zego. Another example comes from Carrot, the young driver insurance provider. They will reward young drivers for staying at home. Aviva are an Insurer leading by example. Not only are they are making a significant donation to the Red Cross , they are also supporting their customers by adding flexibility to their products and their staff by financially supporting those who are able to volunteer for the NHS. Their actions are summarised in the message from their CEO, Maurice Tulloch. My final example is from the insurtech Wefox who have added their technology expertise to the fight to end the pandemic. The article outlining the European effort to ready smartphone tech acknowledges that the approach would be outside strict data monitoring rules. Desperate times may call for different thinking?

Trade Press work overtime to keep us up to date

Trustworthy news is our lifeline at the moment. In response, the dedication of the insurance press has been remarkable. They must be consistently burning the mid-night oil to keep us all informed of the ever changing insurance landscape. All the links in this article are testament to the tireless work of journalists. Slipcase is another great example, with their frequently updated page dedicated to  content relevant to (re)insurance professionals with an interest in Covid-19 (Coronavirus). Thank you from us all at Total Systems.

Business as Usual

The resilience of the insurance market comes to the fore against the unprecedented background of this pandemic. Despite the huge global challenges, there have still been plenty of examples of the market carrying on and planning for life after Covid-19. Here are the most reported news stories of the last month:

Continued Investment in the insurance sector

Loadsure, a London-based international Managing General Agent (MGA), has secured investment to enter the US market. Loadsure is a digital end-to-end, cloud-based insurance solution which uses predictive analytics and integrates with digital transportation management platforms. In a similar vein, Aventus in a £2.6 million funding raise. Aventus are a Londoin based insurtech who have developed an insurance operating system designed for speed and flexibility.

Mergers and Acquisitions

Good to see M&A activity marching on. The giant transaction of the month was the Mega-Merger between Aon and Wilis Tower Watson. The combined force of these two giants will make them the largest global insurance broker, knocking Marsh off the top spot. Other transactions include Resolution Underwriting who continue the expansion of their Group, this time with the purchase of Trilogy Managing General Agents Ltd from Randall & Quilter Investment Holdings Ltd. A-plan are another company on the acquisition trail. In their latest move, A-plan buys Cotters Insurance Brokers. Ardonagh are another group in action as Ardonagh buys Rural Insurance Group. My final examples are the sale of UK based Kingsbridge Group, the specialist provider of insurance to skilled contractors and freelancers and the agreement by Tokio Marine to buy the MGA G-Cube.. More details in Contractors insurance firm sold to US company. and Tokio Marine; Agreement to acquire G-Cube.

The insurance market has shown resilience, innovation, hard work and in a lot of cases,  compassion  So, all I can say in conclusion is, what a month – and now we get to do it all again!

Content has been prepared exclusively for Total Systems plc, a specialist provider of insurance systems developed for the digital insurance age.