Latest news from the insurance market
The latest news from the insurance market provides interesting insight. Alongside information on the challenges being faced as a result of the current pandemic, there are also positive glimpses into the future. Certainly there is still much to celebrate for the insurance industry.
Given where we are, it probably makes sense to look first at the challenges being thrown at the market by COVID-19
Central issues from COVID-19
- Government support: A Government Press Release in June titled Trade Credit Insurance backed by £10 billion guarantee announced that Government is to provide guarantees of up to £10 billion to Trade Credit Insurance schemes for business-to-business transactions.
- Business Interruption (BI) Test case: News of preparation for the BI test case continued to proliferate in June. A peek into Insurers’ defences outlines some of the defence arguments planned, on an insurer by insurer basis. In further news, Action Groups get go-ahead to intervene in FCA BI test case. The latest update underlines the complication of the case with extra BI September trial dates muted.
- Underwriting of new Life Assurance applicants: Individuals employed as doctors and other healthcare workers are concerned that their profession may affect future life assurance applications, with the matter being referred to the Association of British Insurers (ABI). The ABI has responded to these British Medical Association Concerns. A joint statement advised that there should be no detriment to healthcare workers and that no-one should be discouraged from having tests done.
- Inevitable casualties: Given the huge global challenges arising from the COVID-19 pandemic, the insurance market has been proactive and remarkably resilient. However, there have been some sad news stories. Amongst them was news of the closing of the Buzzvault Managing Agency business. Another casualty also hit the headlines, with Now Healthcare Group reported as closing.
Investment in insurance
Now to the positive stuff. Here are the optimistic stories that caught our eye:
New market opportunities
The insurance market is constantly evolving. There have been numerous examples of innovation and expansion. This month was the turn of the independent broking firm Howdens. Howden Group expands overseas with a licence operate in Belgium.
A couple of months ago, we shared our thoughts on The future of insurance. We made the point that the the insurance market must be ready for all eventualities. That includes spotting new profitable opportunities.
The PIB group have attracted much media attention with their aggressive growth through acquisition. As a result, the Organisation now plans to simplify the Group structure. A recent announcement confirmed PIB Group Ltd is uniting 12 brands to trade as PIB Insurance Brokers. However, this brand consolidation has not stopped PIB growth plans. They confirmed their ambitions for international expansion with the announcement that they have acquired Munich based Marx Re-insurance brokers.
Mergers and acquisitions
If anything highlights a positive future, it is the news from the insurance market of plenty of activity in the M & A space. Here is a flavour:
- Full circle for UK General: J C Flowers bought the MGA UK General in 2017. The latest news is that UK General returns to Primary Group. Looking to the future, Tim Smyth, the newly appointed CEO, stated “Our investors have ambitions plans for the business…”
- And a similar journey for Bravo Group. Towergate sold Bravo Group, the holding company of Ethos Broking, Compass and Broker Network in 2016. Now the Towergate reincarnation Ardonagh buys Broker Network owner – Bravo Group. Experts say that this deal, together with the purchase of the Irish business Arachas shows just how far Ardonagh has come. However, we are still in challenging times, so despite praise for the recent acquisitions, the Ratings agency Fitch downgrades Ardonagh from a B to a B- with a stable outlook.
- And could things be changing at LV=?: Amidst active speculation, LV= responded to sale of life and pensions rumour. It seems nothing is off the table.
- Police Mutual: Following a unanimous members vote, Royal London is to take over the Police Mutual.
- GCube: After the initial announcement of intent in March, Tokio Marine HCC seals acquisition of GCube.
- Insurtech buys Insurer. In an interesting twist to the norm, US Insurtech Hippo is set to acquire Spinnaker Insurance. Could this be a future trend?
- Premier Choice: After 25 years as a successful independent, GPR acquires Premier Choice. This marks the first acquisition for Global Risk Partners (GRP) in the health insurance space.
Innovating for the future
- Lloyds of London: Many column inches have been dedicated to the determination of Lloyds to update their working methods to meet the needs of the 21st In the latest move, Lloyd’s of London Charges ahead with electronic placement progress. Jennifer Rigby, Lloyd’s Chief Operating Officer, is confident this is a huge step forward. In her view, “This is an exciting new development that will enhance and simplify the flow of electronic placement data across the market…”
- Changing risks: The Climate Financial Risk Forum (CFRF) was established in March 2019 to advance the Financial Industry response to the risks from climate change. While recognising the huge challenge from the current pandemic, the forum recognises that minimising future climate change risks requires action now. As a consequence, the CFRF have published a guide to help the financial industry address climate-related financial risks.
Another month of constant activity in the insurance market, with evidence of positive plans for the future. Which provides me with a bright note to end on.
Content has been prepared exclusively for Total Systems plc, a specialist provider of insurance systems developed for the digital insurance age.