insurancepeople issue 40 February 2014
Andy Hawkes Page 12 Insurance People inside include:
Martin Almond David Beardsworth Reg Brown Andrew Carrick Alan Cleary Robert Hawkes Mike Palmer Nigel Phillips
We believe in working together to build strong relationships. We’d like to work with you to offer your clients the best insurance cover there is for their needs. As specialists in insurance for the not-for-proﬁt sector we can offer ﬂexible niche cover that’s right for them. Our unique knowledge and great personal service means that we can work efﬁciently as well as effectively for your clients. And of course, we’ll always go the extra mile for you too.
www.ansvar.co.uk Tel: 0845 60 20 999 or 01323 737541 email@example.com Business division of: Ecclesiastical Insurance Ofﬁce plc. Registered Ofﬁce: Beaufort House, Brunswick Road, Gloucester GL1 1JZ. Registered No. 24869 England. All content © Ecclesiastical Insurance Ofﬁce plc 2014. Member of: Association of British Insurers, Financial Ombudsman Service. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
in association with
Computer says ‘No!’ Whatever happened to flood underwriting?
Editor and Publisher
Neighbouring properties sitting on a contour ‘island’ in a flood plain were temporarily surrounded by water at Christmas. Self-help improvements proved their worth. Neighbours 1&2 were safe since no ingress has ever occurred thanks to the topographical contours. Neighbour 3’s once flood-prone property, now with a floodwall, required only an all-night vigil with bucket and broom to keep the water at bay.
Andrew Newman FCII, Dip.M firstname.lastname@example.org 01892 730539 Design & Production
Adrian Susman email@example.com 07981 993974 Commercial Director
Neighbour 4’s sandbag wall, stockpiled for just this eventuality, ensured no ingress. Willing helpers retained for all-night vigil enjoyed hot mince pies and mulled wine. Neighbour 5 suffered serious ingress in 1992, and built a wall and bund, installed pumps, and changed his lifestyle to live upstairs in case the waters ever got in again. They didn’t! Each neighbour reported this vital risk information to their respective insurers – one of whom has already responded positively. Would it be too confrontational to name and shame any of the other “underwriters” who negate their role with a “Computer says ‘No!” response?
Jeni Hall firstname.lastname@example.org 07969 510172
In this issue 2
A day in the life On the road with Martin Almond
Risk management Andy Hawkes offers his Top Ten tips
Cleaning up the investigation industry David Beardsworth
Alan Cleary Winners & Losers 2014
Pensord Magazines & Periodicals Tram Road, Pontllanfraith, Blackwood NP12 2YA
Reg Brown’s Postcard Emporium A card from Cranbourne Court
insurancepeople PO Box 537 Tonbridge Kent TN12 9WG t 01562 862990 m 07981 993974 e email@example.com
Telematics Nigel Phillips with the latest update
IP spends a day out with Martin Almond
David Beardsworth wants investigation to tidy its act
Ones that got away
Also find us on:
Tom Clancy was an insurance broker! ISSN 2043-9202
Insurance People is published monthly by Buttermere Wedge Publishing Limited. While every attempt has been made to ensure that the information contained within this publication is accurate, the publisher accepts no liability for information published in error, or for views expressed. All rights for Insurance People magazine are reserved. Reproduction in whole or in part without prior permission from the publisher is strictly prohibited.
On the move Who’s going where?
Alan Cleary’s Winners & Losers 2000-2014
Nigel Phillips considers the future for telematics
On the Road Whose deal is it?
FEBRUARY 2014 insurancepeople 1
Lorega Solutions appoints CEO and COO
in association with
Aviva fraud team join Hill Dickinson
ill Dickinson Counter Fraud Group [HDCFG] has hired the five strong Aviva fraud team following the closure of their Manchester office in December 2013. The team, with a combined 32 years’ experience in complex fraud investigation, will be based at HDCFG’s Manchester office.
orega has promoted Angus Tucker to chief executive officer and Martin Almond to chief operations officer of Lorega Solutions, its chartered loss adjusting business. The company comments, “Their new roles reflect an increased level of activity delivered on behalf of policyholders as a result of LRI business growth and the handling of a larger number of after the event claims.” Angus Tucker joined Lorega Solutions in 2010 as chief operations officer, having previously been a claims director at Grant Thornton and before that at Deloitte. He is a past president of the CILA. Martin Almond joined Lorega Solutions in 2012 from Claim Experts. Prior to that, he was a director of McLarens Toplis, where he was responsible for operations in the Thames Valley and south coast region.
Launch for Columbus Legal
laims expert Alan Reid launches Columbus Legal to provide a number of legal expenses products. "Columbus Legal aims to help consumers and businesses cope with the recent legal changes that will affect the pound in their pockets," he says. A Glaswegian, his career began in 1992 at Direct Line, where he trained in Manchester, Birmingham and Croydon before arriving in Glasgow as claims handler. Between 1996-2000 he worked at Gilbert Anderson Solicitors, moving on to
2 insurancepeople FEBRUARY 2014
Joining HDCFG are, left to right, Jaspal Singh, Anthony Fairhurst, James Martin, Pete Oakes, Christopher Smith and Matthew Geary
Rick Slater leaves CDL
fter 29 years with software house CDL, with much of that time spent as general manager, Rick Slater is taking a redundancy package to leave to go into consulting in conjunction with several other people that he knows in the industry. Rick says, “It’s an amicable departure, and I’m looking forward to considering my options for the future.”
LV= Broker partners with Reach Financial Services
become a legal executive at Lloyd Green Solicitors, before being head-hunted as claims director by Gildeas Solicitors.
V= Broker’s ABC and Highway motor insurance products are now available on the Reach Financial Services panel. The deal will make the product available to thousands of new customers and is estimated to be worth £1 million, says LV. Reach Financial Services is part of Totemic Ltd, a company which was set up to advise those in financial difficulty on how to restructure their outgoings. Michael Lawrence, personal lines director at LV=, says that the company is committed to “ … making it easy for brokers to do business with us and providing products that suit a wide range of risks”.
in association with:
“The Gatekeeper” at Citadel C
aught up with Mike Palmer just before Christmas at a hostelry near Leadenhall Market. Since we last met three years ago he’s scaled Kilimanjaro for charity, and his work continues to take him all over the place in the worldwide reinsurance market. Mike is currently a director of Citadel Risk Services UK and marketing director for the CRS Group, responsible for new
business production, both live and legacy. He’s been involved within the reinsurance industry since 1982, with roles at Willis, Aon, and Minet. Later he was with Axiom (now CTC), Helix UK (now Axa LM), and Randall & Quilter. Whilst his prior ten years have been involved with consultancy (in particular legacy) Mike is now spending large
Citadel Risk Group 1978 - Citadel Group established as a joint venture between The Hongkong and Shanghai Banking Corporation (now HSBC Bank) and Sir Arthur Weller. The active underwriting vehicle at that time was Citadel Insurance incorporated in Hong Kong. 1984 - Citadel Reinsurance set up in Bermuda to take advantage of a more stable political and administrative climate. 1990 - Citadel Bermuda now the primary insurance and reinsurance vehicle for the Group, with Citadel Hong Kong liquidated. 2005 - Citadel Risk Management (CRMI) incorporated as a wholly-owned subsidiary of Citadel Bermuda, specialising in accounting and reconciliations, audits and inspections, run-off management, commutations, and premium and receivables collections. 2007 - Citadel International Reinsurance Co (CIRCL) established in Bermuda as a segregated accounts company wholly owned by Citadel, offering captive managers and insurance companies the facility to set up a reinsurance cell within Bermuda's market. 2009 - CRMI purchase share capital of reinsurance intermediary in run-off Gallagher Risk Services from Arthur J Gallagher and rename it Citadel Risk Services. 2011 - Citadel Reinsurance Co assigned an A-rating by A.M.Best. Citadel Risk also establish a UK service entity, Citadel Risk Services UK
amounts of time being the “gatekeeper” – his word for Citadel Risks’ live reinsurance carrier Citadel Reinsurance Company Limited Bermuda. Risks currently being underwritten include terrorism, casualty, workers comp, auto and bonds. The focus is on the smaller to mid sized niche risks. “It’s been an amazing three years,” says Mike. “I’ve learned so much. The
transition from legacy to reviewing live placements is so huge and every day is different.”
Covéa promotes from within D
ouble congratulations to Hannah Dixon for her promotion at Covéa Insurance to the newly created role of commercial claims account manager, and her recognition as Young Achiever of the Year 2013 by Reading CII last year. She has been with Covéa for six years. While as MMA (and Norman Insurance before that!) the Reading-based insurer concentrated on personal lines, commercial business has now become a significant investment for Covéa. And it’s good to see that Covéa has joined with those companies who have already introduced a customer-related approach to the claims process. Hannah’s role will focus on developing the insurer’s claims proposition to meet the bespoke needs of its
key commercial broker partners. Hannah adds, “I understand the importance of service to our brokers and their customers, and I will be wholly focused on aligning our capabilities to meet their needs. I’ll be working closely with our broker distribution team to ensure that we fully understand and can respond to the service needs of our broker partners and their customers. This will play a pivotal part in supporting our profitable growth ambitions.”
Hannah Dixon FEBRUARY 2014 insurancepeople 3
market talk The man from ‘Baseel-don’ The Editor strays into Fawlty Towers
Ian Irving entertains I
nsurance is certainly a people business. Insurance people fraternise they may be competitors, but that’s never stopped them enjoying each other’s company. There’s no ring fencing as there is in some other industries. The same association applies to acquaintances and friends in other sectors, such as automotive and service supply. In fact, some relationships become so close that it’s easy to accept such individuals as “one of us” and to sometimes forget that they work in a different profession with a different agenda. Certain paths cross regularly, and I’d like to nominate the ubiquitous Ian Irving as a personality in that category. Many readers will already know how Ian earns his living, but for those who may not yet have enjoyed that pleasure, let me tell you what happened when I first met Ian in 2004. It was at a broker seminar organised by Highway Insurance at a hotel on the Herts/Essex border that possessed a main saloon with a gallery around the top where the rooms were – just like a saloon in a Western film. As I left my room to join the throng below in the main saloon, the door on the far gallery exactly opposite opened, and Ian emerged. We were both togged up, so it was obvious we were both attending the same event. We acknow4 insurancepeople FEBRUARY 2014
ledged each other across the abyss with a slight smile and a nod, and calmly turned and strolled down our respective sides of the gallery, subconsciously matching our pace in our parallel progress so that we would collide simultaneously at the point where the galleries joined at the grand staircase. “Who the hell is that? Haven’t seen him before” was the thought running through our respective minds, hidden behind our protective demeanours. It must have been the Western influence mentioned above that determined me to be first on the draw with the handshake. “Hi, I’m Andrew and I work for…”. But Ian outgunned me with, “Hi, I’m Ian, and I’m your entertainer for tonight”. Ian Irving is a performer who started out 30 years ago as one of the first black comedians on the afterdinner and auctioneering circuit, and has developed his humour as fresh, original, and contemporary. And he has the ability to tailor his performance to suit any audience or occasion – in other words the knack of quickly becoming “one of us”. Basildon*, Essex born, Ian was first seen on TV’s New Faces, followed by Surprise Surprise, which led to a nationwide theatre tour. His appearances at insurance events and parties surely qualifies him as an honorary member of the
“insurance people” fraternity. It wasn’t long after the Highway event in 2004 that our paths crossed again, and on one occasion it happened at different events on consecutive nights, and on the second night I was privileged to be sitting next to Ian at dinner in Woodstock where Royal & Sun Alliance were attempting to recover from merger trauma with a big broker and press gathering. And more recently, luck would have it (or perhaps it was thanks to the machinations of Cardinus’s Andy Hawkes) my wife and
I found ourselves sitting next to Ian at November’s Cardinus User Group dinner at Ettington Chase Hotel near Stratford-upon-Avon. * Basildon – pronounced ‘Baseel-don’ according to Ian
Ian can be contacted at Stand & Deliver 07711 656 978
Basil Fawlty lives O
n the way homewards from pre-Christmas festivities repaired myself (as Pepys would say) to the Charing Cross Hotel for a relief break. It was while threading the hotel’s first floor corridor, twixt the double-doored dining and meeting rooms, that I was confronted by a sorry looking white-liveried waiter, coming towards me with a bandy gait, arms waving, and highly reminiscent of Manuel, the Spanish waiter from Fawlty Towers. The suspicion that I had walked into a sit-com spoof event was strengthened when I caught a glimpse behind another door of a Sybil hairpiece and the unmistakable twin-set suit, which distracted me just long enough to allow a rather scary, yet uncannily accurate Basil Fawlty lookalike to sweep past me with a smarmy smile and flash of teeth, rubbing his palms, elbows akimbo, a nod, and a patronisingly hearty “Good eveninggg…”. I’m pleased to report I managed to return an equally enthusiastic greeting, bang on cue.
in association with:
Christchurch earthquake legacy – get the wordings right! New GI business division at Coast
Out of the ashes T
he aftermath of the earthquake disaster that befell Christchurch, New Zealand on that fateful 22 February 2011 is the city’s Red Zone – an area now rendered forever impotent because of the unstable nature of the land. Damaged buildings cannot be rebuilt, while undamaged properties remain uninhabitable for safety reasons. Against such a backdrop of tragedy, disputes relating to the insurance aspects of the
catastrophe may sound petty and inappropriate, but nevertheless have to be faced. This topic was aired in December as part of the Lloyd’s Market Association’s LMA Academy series of lectures. Professor Rob Merkin, insurance law expert from University of Exeter, and a consultant to New Zealand solicitors DLA Phillips Fox, told an audience of over 130 in Lloyd’s Old Library how Christchurch has become the most
Knox Church, Christchuch
important common law forum for wordings-related disputes. Most of these cases, he explained, stemmed from disputes arising from wordings and their interpretation, and whether replacements should be on an old-for-old or new-forold basis. “New Zealand is now ‘a masterclass’ in wordings,” says Prof Merkin. “These quakes teach us that insurers have to get their wordings right. We can’t just assume that old wordings remain fit for purpose. Nor can we just
turn a blind eye to the possible implications of wordings. New Zealand began as a masterclass for the property market in how to stress test a building, but it’s turned into a masterclass in how to stress test a policy wording.”
test “for Stress a policy wording ” Benjamin Baker, head of the LMA Academy sums up. “The New Zealand earthquakes have presented the market with some unprecedented challenges for drafting insurance policies. They have also thrown the spotlight on how we train and develop our own wordings specialists here in London.”
Robert Hawkes returns to Coast Q uite by chance, this edition of Market talk happened to coincide with the appointment of Robert Hawkes who is going to oversee the new household & general insurance division created by specialist caravan, motorhome and park home insurer Coast. This editorial point is made to offset any charge of nepotism since the Hawkes name is highly visible in this
issue of IP thanks to Robert’s father, Andy. In fact, it’s a return for Robert to Coast because he began his insurance career with the Sussex-based insurer (then trading as Park Home Insurance) in 2009 as a policy administrator. He moved to John Holman and Sons to work in liability and property account handling, moving on to scheme and binder management for both
complex risk and personal lines. He joined newly formed MGA Aro Underwriting in 2011 as assistant underwriter. “So I’m now back where it all started at Coast Insurance heading up this new department to build a specialist household and general business portfolio ranging from standard to non-standard home and high net worth,” says Robert.
“Coast are a well respected firm and I believe we will establish ourselves quickly in a very competitive market.” FEBRUARY 2014 insurancepeople 5
market talk Another ‘win’ for Markerstudy CDL take the hub route in telematics
CDL drive Markerstudy’s ‘nightmare’greeting telematics onwards A
s last year’s Christmas cards go into the recycling process (that last word sounds a lot less brutal than recycling ‘bin’, doesn’t it?) personal thanks go to the individuals and firms who sent cards to the editorial office in December. They adorned the place until Twelfth Night, as is traditional. Thanks also for the digital cards and greetings, which are becoming traditional, but alas can’t be stuck on the wall – well, not without stocking up on the printing ink. Hard copy Yuletide greeting cards will no doubt resist the digital tide because they present a tangible means of business and personal communication. In fact, the task of sending out hundreds of cards and seeking to make an impact is no mean feat, and many organisations treat them as
6 insurancepeople FEBRUARY 2014
a crucial part of their marketing activity. A good example, and a clear winner all the way, is the 2013 communication from Markerstudy Group, reproduced here. It’s not even a card – it’s an advent calendar complete with chocolate. The considerable number of Markerstudy people who volunteered for ghoulish caricatures are conveniently named behind the windows – although quite how you would recognise them in real life is another matter. The organisation and effort behind that artistic feat reminds of the time when I wore a marketing manager hat, and the ridiculous obstacles in getting a number of people together voluntarily to have the photos taken. Somehow I can’t see the good people at Markerstudy having to be press-ganged in that way.
fter a hesitant start, the application of vehicle telematics for insurance purposes is now getting into its stride. I asked Nigel Phillips, commercial director at software house CDL for his viewpoint on the latest market progress in this field, and his article appears on page 19. CDL itself is well-placed to comment since it already provides telematics solutions for brands such as AA DriveSafe, Coverbox, Hastings Direct SmartMiles, Ingenie, and Sheilas’ Wheels Broker Model Driver. Given the range of telematics service provision across the market, with all kinds of solutions now on offer, I asked Nigel about the hub route that CDL has taken. “We realised early on that the most efficient way for us to support our customers was to create a ‘telematics hub’ to give them control in terms of the kind of telematics product they choose to deploy. “The CDL hub allows us to work with any provider. It receives data for score factors, together with the facility to receive and process real-time events. The processing of this vast volume of data is carried out by CDL Strata, our ‘industrial strength’ software solution for high volume insurance retail operations. “So we are selecting partners that bring a combination of quality, innovation and added value. For example, our recent
partnership with O2 (the commercial brand of Telefonica UK) presents an exciting opportunity for insurance retailers. Telefonica will be working to drive product engagement with motor insurance providers, offering supplementary services, such as journey planning and breakdown assistance, to their telematics products. By adding fun, and helpful features to their policies, Telefonica can make purchasing insurance a more rewarding experience for consumers. “Another exciting area is smartphone-based solutions. By working with specialists in this field, CDL gives insurance retailers easy access to smartphone telematics apps that can be white labelled to retailer brands and configured to reflect insurer-specific rating rules. “Managing the cost of claims is also a significant attraction of telematics and so having a specialist partner (Insure Telematics) in this field working with us is important,” concludes Nigel. It’s well-known that the pioneering telematics attempts failed simply because of the (then) inability of insurers to avoid being overwhelmed by the sheer volume of data. It looks like that nut has finally been cracked with fully automated processing and deployment, making everything faster, cheaper, and simpler.
in association with:
All you need to know about cargo cover Record qualifications at Gab Robins
Making cargo cover watertight T
he well-aged Marine Insurance Act 1906 stirs the memory for all former CII students (even those whose careers later took them into non-marine) simply because it was a cornerstone of the ‘elements of insurance’. Over the 100 years plus a bit, the principles enshrined in the Act have been adapted to changing times, and I spoke with author K.S.Vishwanath about his highly readable 2010 book, Insuring Cargoes – a practical guide to the law and practice (ISBN 978 1 905331 95 6) published by Witherby Publishing. I asked how he went about tackling such a comprehensive subject. “In the book I attempted to track modern trends and comment on how practitioners .S.Vishwanath (known as Vish) lives in Bangalore, India and began his career in 1981 in hull & cargo underwriting and claims at government-owned insurer National Insurance Company. It was here that he began to develop his abiding interest in the subject. In 1994 he was seconded to Singapore, but moved to Hong Kong the following year and joined Groupama, working in the challenging environment of the Far East. In 2000 he returned to India, and joined Royal Sundaram (part of R&SA) and it was here that he was credited with introducing a wide variety of international wordings to the Indian market, and he subsequently became Vice President of the company. His work has taken him to over 20 countries, and it was in 2009 that he embarked on his book project
transact business in actual practice”, says ‘Vish’. “I also tried to capture practice in markets other than the UK and the US.” And the book has received some rave reviews:“Anyone professionally involved in marine cargo insurance should read this book” “Find the answer to most - if not all - your cargo enquiries” “Thoroughly researched and readable” “The best book on marine insurance I have read to date” This is also a book that the lay insurance reader can easily dip into. It looks well on the bookshelf, but since my own shelves are already chock-full, with the publisher’s permission, I can retain access to the review copy thanks to the hospitality of the CII Library, who have kindly accepted custody of the tome. bringing together all the strands of his wide experience. He became a freelance consultant in 2010, kicking off with the management of a complex insurance programme for international mining group Vedanta up to March 2013. He currently K.S.Vishwanath conducts training programmes for senior practitioners of marine insurance. K.S.Vishwanath’s blog can be found at http://marineinsurancebook.blogspot.in
39 Steps at Gab Robins J
o Spreckley, learning & development manager at GAB Robins confirms that a record 39 employees secured Chartered Institute of Loss Adjusters (CILA) qualifications in 2013,
including three at the highest level. “It’s essential that our staff undertake industry focused training and qualifications to develop their claims handling skills, market knowledge and management
techniques throughout their career,” she says. “A further 62 staff are currently working towards their CILA qualifications, including eight aiming for chartered status later this year.”
FEBRUARY 2014 insurancepeople 7
market talk Shock-horror! CII opens its door to journos
Psst! Wanna CII membership?
ow and again this column receives a communication across the desk from "Disgusted of Bridgnorth". That’s the virtual desk of course, since the IP Editor and Consultant Editor do not normally cohabit the same office.
offered access to: Within my free membership, I am policy updates; an and rs pape nical market reports, tech stry events and other day from online library; a programme of indu An email came out of the blue the on research on ified mati qual infor a ties; was I h networking opportuni the CII, a professional body of whic I'll be able to Also ns. for ned icatio retai publ I ber ion gnat mem desi and rts; ACII repo Associate and whose ber service” mem ” yle Brian lifest r t lates “Dea n access Perks, “ … our some 40 years until retirement. It bega technology, e Appl like s thing : on said unts h, grap disco get to and its introductory para and at over 6,000 cinema tickets; high street stores; the of hip bers mem free like you “Would ts. uran resta ) or the Chartered Insurance Institute (CII Bloomin' cheek! d's worl the ), (PFS ety Soci nce ance journalism Fina Personal I chose to break new ground in insur e, ranc insu the for es in 1958. I back ness busi leading professional bodi very that when I first entered ns?” essio prof ices serv l y for CII ncia appl to fina risk and was the first insurance journalist ever n years of seve of part best took then ing in the membership, and I I was told that, as a journalist work ion. ificat qual ets (fair enough – evening study to complete my ACII e insurance or financial services mark my membership with some reluctanc hed quis still relin am I I ago, s year ten e although retired som cial finan ce redu le). when I was considering means to Consultant Editor of Insurance Peop hed that too, mitments on retirement – the CII botc com bership for 12 n of my retur the than less no for me g “… we'd like to give you free mem askin ss to a another story). months, providing you with acce Associateship certificate (but that's ”. ities facil even if only for and Now to be offered free membership, comprehensive range of services CII! n, agai k Thin f. belie nd a year, is really beyo re's no catches, The message went on to say, “The fully faith s Your waiving the annual no tie-ins and no hidden fees – we're Brian Susman (former ACII) .” FREE n mea does y reall free so fee of £70,
David Ross explains: Hmm… that’s a tricky one. For me, that is. After all, the CII is my Alma Mater too. (Brian and I claim to be the only trade press journos around that possess a CII qualification. We don’t normally bang on about that, well… not often. But this opportunity seems too good to miss!). I went through similar trauma over fees and the question of who actually owns the CII certificate when I ‘retired’, but the good Dr Scott and his colleagues oiled the well-worn mechanism of the CII process to bring it more in line with 21st Century thought, so it may just have been a matter of unfortunate timing that put Brian through the hoop. So, donning my investigative journalist’s hat, I deployed my own CII membership card to infiltrate Fort Aldermanbury and enjoyed a coffee with CII director of communications David Ross, who kindly provided the background as to how the free offer to journalists came about. The CII is not in fact offering journalists the full, complete membership package, only access to certain parts of it. The aim is to try to provide journalists with factual information about the insurance industry to enhance their reportage. 8 insurancepeople FEBRUARY 2014
The idea is to help a pre-selected small number of financial journalists gain access to the type of information they would find useful in their everyday work. Just a few months back Insurance People revealed the misunderstanding that took place when certain tabloid journalists were confused about the role of the Motor Insurers Bureau in connection with illegal claims investigation activities. It’s that kind of knowledge that we want to stimulate. Our discussions with editors and publishers would suggest a more knowledgeable media can only help the profession, both in terms of holding it to account, and in ensuring that any coverage is accurate and well informed. We offer a number of concessions on membership for people like Brian and details can be found at:
in association with:
Ageas launch individual home rating Markerstudy ‘wages war’ against fraud on HMS Belfast
Goodbye ‘cliff top’ syndrome?
geas UK are to be congratulated on achieving the ‘impossible dream’ – the one-time household market aim to be able to underwrite home cover at individual house level (see News page 25). This capability has been a holy grail that’s been a long time coming. I remember discussing the so called ‘cliff top’ syndrome with CEO Barry Smith a few years back at The Don restaurant in London when Ageas was then known as Fortis. What is ‘cliff top syndrome’? The apocryphal example is where two homes sit next door on the map, one at the top of the cliff and the other at the bottom, where traditional underwriting cannot distinguish
between the two. This month’s leader article on page 1 highlights the fact that most examples of this are not so extreme, and are therefore much harder to underwrite in an accurate fashion. There were many market attempts to address this inability to underwrite such properties correctly and thus steal a competitive advantage. But the early pioneers were simply computerised versions of the traditional blanket flood plain maps. Later systems got down to postcode levels, but fell down simply because they were not able to distinguish individual properties, only needing a few ‘cliff top’ addresses to be fed in to demolish any claim about individual rating.
Just after the turn of the century, one of our larger insurers launched a flood rating system that quickly failed the cliff top test. Several managerial changes took place during the decade, and another version appeared with much publicity… but with exactly the same failings.
So there you have it. As you can see, I entirely ducked out on the thorny one about who owns the certificate. As Brian says, that’s another story for another day. But here’s a thought. Why doesn’t the CII create an amnesty for retired members who were treated in this way? Why not return their certificates? They must be stored somewhere in Woodford. The CII wouldn’t have just shredded them? Or would they? Editor
All-aboard with Markerstudy
ictured l-r are Nick Benham, business development manager, Insurance Fraud Bureau; James Pinder, partner and national head of fraud at DWF LLP; and Markerstudy’s group underwriting manager Wendy Hilder; commercial manager, Nick Rayward; and group head of claims Steve Cross. The occasion was Markerstudy’s first ever workshop dedicated to the fight against fraud held on HMS Belfast in December, when the preserved warship on the Thames played host to 40 or so broker partners. The speakers were Allan Peak, Craig Lawrence, Chris Staples and Carina Leader, representing claims, underwriting and product development from Markerstudy. James Pinder and Kieran Walshe from DWF LLP brought a legal perspective to proceedings and guests also heard from Nick Benham from the IFB and Detective Chief Inspector David Wood from the Insurance Fraud Department (IFED). Markerstudy Group underwriting director Gary Humphreys signalled that future workshops would take
place. “We all know that insurance fraud is a problem that’s not just going to go away - it’s something that needs to be fought on all fronts. At Markerstudy we’ve invested heavily in systems, technology, and staff over the past 12 months to make sure we’re as watertight [Ouch! – Ed] as possible and can identify fraudulent activity quickly, and at its source. “We’re keen that our broker partners benefit from our hard work and the way we move swiftly to introduce new systems and measures. Events like our workshops are vital in promoting how the continued and determined collaboration between legal firms, insurers, brokers and organisations like IFED and the IFB is key if we are to win the war against fraud.”
Gary Humphreys FEBRUARY 2014 insurancepeople 9
in association with:
Centenary for Hull CII
Hull Heroes of WW1
he series of Edwardian postcards from the Reg Brown collection (see this month’s on page 18) continue to attract readers’ interest, particularly now that the 1914 centenary has arrived. That year was of course when the Edwardian era came to its abrupt end and the world changed forever, for better or worse. One call I received was from Hull CII secretary Andrew Carrick who tells me that this year marks the hundredth for the Insurance Institute of Hull, having been founded in the Royal Station Hotel in November 1913. “We are fortunate in having the complete set of council minutes from 1913 to the present day, and it was in the course of studying these that I became aware of five members who were killed on active service during the First World War. In addition, the 1916 minutes record the death in France of the son of 10 insurancepeople FEBRUARY 2014
our first president William Collinson.” Biographical details were not as easy to find, so Andrew began a research project to find out more about these six individuals. “It’s been a fascinating and moving experience,” he says. “I was able to obtain photographs of five of them, plus army service records and other information sufficient to bring together in book form, and which I hope will be of interest both to our current members, but also to the wider community. “With the help of the CII Library, I was able to read some of the 1913 and 1914 exam papers that our members would have sat, and indeed one of the men’s families had preserved some exam pass certificates, signed by the national President of the day, J Morgan Owen. “A trip to the archives of Leeds University gave me access to the personal records of a lieutenant who was in the same brigade as one of our men, and gave insight into what happened to him in May 1918. Aviva were also very helpful with information from their archives, and I made contact with relatives of some of the men in Australia and Canada. “Two of the five local
members were born in Hull, the others came here with their jobs to further a career in insurance, at a time when the professional class in Hull was on the up. One of the men had fought in the Boer War at the turn of the century. Our first president, and his son, although both born in London, had family in Hull, so Mr Collinson’s move here as branch manager for Royal Insurance may have been his personal choice. One man was in France and Flanders for three years, others only a few days or weeks. “I make the point in the book that we do not have any winners of the Victoria
Cross amongst our men, no generals or colonels, but just ordinary men, who shared our profession and were prepared to do something extraordinary in our eyes, and to make the ultimate sacrifice. I felt it was important to remember them, and also their comrades who returned to their careers at the end of the war, particularly as we approach another centenary - that of the outbreak of hostilities.” All profits from the sale of Until we see the day break published by the Insurance Institute of Hull go to the Insurance Charities and a local children’s support group.
Copies of the book are available at £10 per copy from:- Andrew Carrick MA ACII, Secretary. The Insurance Institute of Hull, c/o Jelf Insurance Partnership, Priory Park East, Hull HU4 7DY Cheques are welcome, payable to The Insurance Institute of Hull
Andrew Carrick After University (Birmingham) Andrew’s insurance career commenced in commercial broking with Rixon Matthews Appleyard in 1985, and he later worked for a number of regional independents, mainly as account handler, but including a short stint as an executive and as a claims handler. He later moved into systems management looking after broking software and compliance and other duties. He joined The Insurance Partnership ten years ago, which is now part of the Jelf Group following the acquisition in July 2013.
A day in the life… …of a policyholder’s claim expert Insurance People spends a day with Martin Almond, chief operations officer of Lorega Solutions IP’s reporter Karl Brown takes a second day out on the road
aving found that Chartered Loss Adjusters can act exclusively for the policyholder to represent their interests when it comes to a claim, I decided to find out more. I was to spend a day with Martin Almond, a director of Lorega Solutions who was helping a London West End restaurant with their business interruption claim, following a major fire. As well as being a Chartered Loss Adjuster, Martin is an expert in helping businesses recover from a major loss. “Business interruption is often a substantial part of the claim, and getting this resolved quickly can make the difference between the survival of the business or not.” I was about to find out how he does this. On the way to meet the owner of the restaurant Martin was able to tell me about the fire and damage it caused. A fire in an extractor duct had quickly spread and the kitchen had been completely destroyed. There was also substantial damage to the restaurant and the lower ground floor bar. There was no doubt that the longer the restaurant was closed,
the higher the loss was going to be, and the greater the damage to the ongoing reputation and trade. The normal tender and reinstatement process was estimated by the insurance company adjuster to be approximately three months. Martin was quickly able to establish the weekly gross margin, and therefore the size of the loss. With approval from the insurance company he was able to find and appoint specialist contractors who were able to complete the strip-out and commence repair work within two weeks. As Martin explained: “The cost of appointing a contractor who could start earlier and deliver ahead of schedule was going to save the value of the overall claim – a no brainer for both the business and the insurance company.” From the outbreak of the fire on the 30 July, the restaurant was reopened on the 28 September. Although there was an increased cost of works of £60K, this paled into insignificance with the savings on the BI element of the claim. When we met the owner of the restaurant, he told me that having an expert on his side at a time of crisis was something he felt he could not have done without. “Immediately after the fire, I was facing the
Martin Almond Chief Operations Officer Lorega Solutions
prospect of losing my business. Martin stepped in and immediately took control of the situation, leaving me to plan ahead for the reopening.”
An expert at your side at a time of crisis
Showing me around, it was hard to imagine the extent of the damage and the hard work which had been involved in restoring the business to its previous level – both in terms of the building but also in terms of the high level of bookings. As his client told me, “From the start, Martin’s experience proved invaluable. He knew the right questions to ask and was able to establish a professional dialogue with the insurance company and their representative, to get the claim moving quickly.” Of course, whilst we were there, we were also treated to a splendid lunch – considering that Lorega’s Loss Recovery Insurance policy, which covered the cost of Martin’s time probably cost less than the lunch, I think that represented pretty good value! Karl Brown FEBRUARY 2014 insurancepeople 11
Andy Hawkes CEO CARDINUS
â€˜Enterprise-wide risk management' - as practised by leading companies
Top 10 tips for 2014 Investment in risk management capabilities for most businesses has a high pay-off, hence the need to re-evaluate risks on an ongoing basis. Andy Hawkes presents his Top Ten tips for managing enterprise-wide risks in businesses 1. Identify and assess risks Risk is everywhere. Success in business often comes down to recognising and managing possible risks associated with potential opportunities and returns. The types of risks faced in most businesses are quite varied and far ranging. Risks typically include both financial and physical categories. Types of risk usually include apparent hazards, such as health, safety and welfare risks associated with operations, as well as financial risks from exposures to market price volatility, counter party credit defaults, contractual, regulatory and legal liabilities. Some risks are intuitively obvious; unfortunately, many are not. Risk categories should include: Market, Credit, Legal, Regulatory, Political, Operational, Strategic, Reputational, Event, Country and Model Risks. So first identify possible risks throughout the business.
3. Risks are interrelated Interactions and correlations of risks are a key element of which to be aware in identifying, quantifying and mitigating risks. For example, exposure to credit risks may also affect market price risks, whereas operational risks such as ergonomics may create stress and morale risks. Recognition that risks interact between business activities is one of the bases for the 'enterprise-wide risk management' approach now widely practised by leading companies.
4. Continually assess your risks Things change, and so do risks. Market conditions and volatility levels change, financial strength of counter parties change, physical environments change, geopolitical situations change, and on-and-on. And, these changes can be rather sudden, or they can be creeping and hidden. Exposures to risks that result from business activities may also change. Effective risk management requires that one re-evaluate risks on an ongoing basis so management of the risk register is a vital tool to assist the business.
2. Understand the numbers and create a risk register Systematic processes such as creating a risk register to identify and rank risks by order of magnitude can be a key first step, but effective risk management strategies typically depend on quantification of risks, often through simple probabilistic modelling techniques. Said another way, one must 'measure it to manage it.' Measurement and valuation can be one of the most difficult efforts in risk management and finance, but these are crucial for cost effective risk management and informed decision-making. Spend the time and money to get the tools and expertise to best quantify the company's key risks. 12 insurancepeople FEBRUARY 2014
Figure 1: Classic risk register model
5. Commit adequate resources
8. Assess the Risk/Reward Ratio
Effective risk management also requires considerable expertise and resources, from basic risk control, compliance and governance activities, through to advanced quantitative risk analysis for more complex businesses. The costs for these resources are usually not cheap, but as has been proven repeatedly by highprofile business failures, the cost of losses due to risk management weaknesses or lapses can be catastrophically high. Investment in risk management capabilities for most businesses has a high payoff. Due to the potentially extreme cost of mistakes, risk managers should be especially well trained.
Risk management does not equate to risk aversion. However, decisions driven by risk/reward assessments usually have a higher probability of successful outcomes. A consideration in such risk-based business decision-making should also be the capacity of the firm to sustain risks. Yet again the risk register is a tool that can help when looking at the return on investment of loss control strategies.
Investment in risk “management capabilities has a high pay-off ” 6. Review the cost of risk mitigation activities Transferring risks through insurance or even hedge transactions or other activities is often an effective and advisable risk management technique, but risk mitigation strategy may largely depend on the transfer costs. Risk mitigation strategies also depend on the capacity of the firm to sustain risks and possible losses. It’s useful too for boards to determine their risk appetite before embarking on a risk mitigation action.
Risk management does not equate to risk aversion
9. Monitor for major shifts in risk levels A key value of quantitative risk measures is to highlight significant changes in risk levels. Although opinions may differ on the optimal methodology for some valuation metrics, significant changes or trends in risk metrics, such as “Value-at-Risk” measures, can provide a key signal to management. Best practices designs of management reporting 'dashboards' provide this risk monitoring capability, also showing segment reporting and consolidation to reflect correlations such as offsets in price risks between markets.
10. Create a “risk aware” culture 7. Control and reduce exposure to losses Risks arise from exposure. A commonly accepted definition of risk is 'exposure to uncertainty' (at least for that uncertainty for which one is concerned about the outcome). Reduce the exposure and you likely reduce the risk. The selected approach and structure of business activities can have a significant effect on the exposure & risk levels generated. Commercial agreements and transaction structures may result in transference or acceptance of risks with a counter party. Risk awareness in business processes and commercial activities can lead to opportunities to reduce current and future exposures. Foreign currency for international purchases or sales is an example of exposure effect.
Educate the organisation in practical aspects of risk management, and that especially includes the most senior business executives and the corporate board of directors. Risk management responsibilities should be clear. Whether it is intuitive actions based on experience and expertise in risk management or whether it is a result of institutionalised risk policies and procedures, effective risk management is typically a key factor in successful businesses. Training and building awareness can lead to a risk management culture that will drive business success.
Effective risk management “is typically a key factor in successful businesses ” FEBRUARY 2014 insurancepeople 13
David Beardsworth MANAGING DIRECTOR ABSOLUTE PARTNERSHIP
Insurance focused investigation The article by Cath Williams, business development manager at RG Investigations UK in the previous IP about cleaning up the private investigation industry attracted some attention. The broker viewpoint was (naturally) of the “We’ve been there, done that” variety. There’s no doubt that when it comes to cleaning the stables, statutory regulation did sort the wheat from the chaff in intermediary insurance. The same process may be about to sweep the investigation sector and Cath Williams was very positive about the benefits a clean-up will bring, not only for consumers, but for the insurance industry itself. The Editor recently took the opportunity to discuss this topic with David Beardsworth, and the following article is the result
et’s be clear. There’s simply no place for unprofessional behaviour in the insurance industry, and the adverse publicity of unacceptable practices by some private investigators - coupled with the Government’s licensing proposals - make it high time that all investigators are regulated. While I don’t believe the proposed plans go far enough, it’s a start. But the insurance industry could begin taking more care when choosing the people it uses to carry out investigation work on its behalf. The criticism of certain 14 insurancepeople FEBRUARY 2014
investigators in the national press has been deserved. Surveillance has to be intelligence-led and proportionate. So, 24/7 filming of a household, simply to find out if somebody is actually going out to work, would be disproportionate. And indiscriminate filming of say, a family, would be entirely unreasonable. Static cameras may appeal to clients and suppliers wishing to cut corners, or save money, but they have significant limitations and drawbacks. So Absolute only advocates the use of manned surveillance.
It’s also important to distinguish between simple pretext calls and dishonestly obtaining information. For example, a call to a residence to see if the subject still resides there is reasonable. But dishonestly obtaining personal details from a bank, police, utility, phone company or NHS is illegal and completely unacceptable. This so called ‘blagging’ requires a degree of organisation that goes beyond ad hoc usage, especially given the resources it would take to develop experience and techniques, or corrupt inside contacts.
Keeping an eye on the private eyes
Companies that undertake this type of practice would tend to do so for matrimonial, corporate, or political use and typically operatives will not know who the ultimate client is. Thereâ€™s no need and no place for this type of practice in insurance, and quality investigators simply would not take a job without being familiar with the people for whom they are working. This highlights the pitfalls of hiring investigation firms who are not solely insurance-focused. There would be a temptation in 'allrounders' to try and cut corners by using the resources that exist within the group. An insurance specialist would have neither the means nor the inclination to adopt unacceptable practice and thereby risk their client's reputation. All investigators should
David Beardsworth David left his police career in 1989, seeing service in Essex Police and Metropolitan Police forces before transferring to Scotland Yard. He established a specialist insurance investigations firm, Vincent Sherman Associates, with a focus on insurance expertise and the changing face of insurance fraud. He co-founded Absolute Partnership in 2004. David is also a consultant for Interpol & Security Services. work to the principles of Regulation of Investigative Powers Act 2000 (RIPA) and the Human Rights Act. Although these are aimed at public bodies rather than private companies, courts are public bodies so evidential standards would need to comply for any case that reaches litigation. Responsible firms should also be expected to already be adhering to the Governmentâ€™s proposed
requirements, and more. I believe every employee should provide proof of residency, undergo DBS (formerly CRB) checks, and receive training on good practice, compliance and data security. In the case of insurancefocused enquiry, staff should also undertake CII studies. Not all firms might be willing to go this far, but why not? And why wait to be told to do it? It surely makes sound sense.
No.1 in the handling and disposing of motor vehicles The handling and disposing of motor vehicle salvage is a constant drain on financial and administrative resources. HBC reduce this by providing an unrivalled service. We are prompt, efficient and fully in accordance with current industry guidelines and environmental legislation. We also require only minimum administration to collect and dispose of your vehicle salvage. With continued investment and systems development we are able to set the standards that others struggle to achieve. We are the safest hands in salvage. HBC Vehicle Services, HBC House, Charfleets Road, Canvey Island, Essex SS8 0PQ
www.hbc.co.uk 01268 696444 Fax: 01268 510087 Email: firstname.lastname@example.org BRITISH VEHICLE SALVAGE FEDERATION
FEBRUARY 2014 insurancepeople 15
Some Winners and Losers of the Millennium so far CHAMPION EXPONENTS OF THE “HIT OR MISS” PHILOSOPHY OF INEXPLICABLE LEADERSHIP SELECTION: Aviva; RSA; RBS; the Co-operative Bank. Is there no end to their ineptitude? THE “IF YOU DIDN’T LAUGH, YOU’D CRY” AWARD: Shifty politicians questioning the integrity of our wooden-headed police officers TRADEMARK RICTUS GRINS OTMSF: Gordon Brown; Michael McIntyre; Jimmy Carr (occasionally) SOME OF THE MOST HAPLESS INSURANCE EXECUTIVES OTMSF: Bob Mendelsohn; Andrew Moss; Igal Mayer; Simon Lee; Richard Harvey MOST OBVIOUS WINNERS OTMSF: Peter Wood; Peter Cullum; Robert Hiscox; Andy Haste; Henry Engelhardt; Brendan McManus
r OTMSF stands fo So Far’ ‘Of The Millennium WORST INSURANCE CONFERENCE LOCATIONS OTMSF: Hilton Brighton Metropole Hotel; Excel Centre, Docklands; Ascot Racecourse PISS-POOREST “SERVICE” OTMSF: In alphabetical order:BT (useless, useless, useless); Lloyds Banking Group (£28m fine in 2013); npower (159,000 complaints in the 12 months to September 2013); RBS (serial cockup and computer meltdown merchants); Royal Junk Mail (the longest suicide note in history); Ryanair (no frills, no manners, no class); Santander (los plonqueros); TalkTalk (what a shower!). I’d rather pass a kidney stone than try to resolve a problem with these “organisations” 16 insurancepeople FEBRUARY 2014
MOST EFFECTIVE CII PRESIDENTS OTMSF: Andy Homer (2002-3); Lord Hunt of Wirral (2007-8); Barry Smith (2009-10); Amanda Blanc (2012-13) THE SISYPHUS “NOW HE’S UP, NOW HE’S DOWN, NOW HE’S UP” AWARDS: Sir Hector Sants; Tidjane Thiam THE BIGGEST-EVER DISGRACEFUL MIS-SELLING RIP-OFF OF BRITISH CONSUMERS: PPI. Lest we forget SOME OF THE MOST IRRITATING PEOPLE OTMSF: Sir Bruce Forsyth (a nightmare!); John Bercow; Davina McCall; Jonathan Ross; Bob Crow; Botoxed celebrity idiots; Russell Brand and his sister, Jo; car rental outfits; travel insurers; the Fundamentally Supine Authority (now defunct, the three lead quangocrats having walked away with over £800,000 in payoffs. Public service, eh?); John Bishop; Tracey Emin; Ed Balls; Antony Worrall Thompson; Piers Morgan; Ant and Dec; Nick Clegg; Cherie Blair; George Galloway; Pippa Middleton A RANDOM SELECTION OF THE MOST SERIOUS FAT-CATS OTMSF: Uncle Joe Plumeri; Andrew Moss; Mark Wilson; Tidjane Thiam. “ROGERING THE PAYROLL” AWARD: Having been in our industry for 55 years, I could mention at least a dozen well-qualified contenders. Not all male, by any means. Between 2001 and 2014, two really stand out. Answers on a postcard MOST ORANGE PEOPLE OTMSF: David Dickinson; Simon Cowell; Lionel Blair; Cheryl Cole; Terry Wellard; Dale Winton; everybody on “Strictly...” MOST NOTABLE ROCK STAR CEOs OTMSF: Andy Homer; Barry Smith; John O’Roarke; Chris Hill MY MOST ADMIRED ROLE MODELS: Jack Redfern (dec. 2002); Bob Sloan (dec. 2007); Bill Brewood (dec. 2009); Allan Bridgewater (dec. 2010), the best of the very best
H ea lt h Wa rn in g
tire and ains irony and sa le who This article cont op pe by be avoided should therefore s rather y take themselve bl va ei nc co might too seriously
BEST CELEBRITY “LOOK-ALIKES” OTMSF: Reg Brown - Theo Paphitis; Amanda Blanc - Scarlett Johansson; Ian Ritchie - Michael O’Leary; Steve White - Benny Hill; Otto Thoresen - Arnold Schwarzenegger; Lyndon Willshire - Barack Obama; Sandy Scott - Paul Daniels; Barry Smith - Willie Walsh; Brendan McManus - Alex Salmond; Jonathan Clark - Alan Bennett; Nigel Dyer - Jack Nicholson. Why do you never see David Shaw and James Corden in the same room at the same time? TV AD CAMPAIGNS OTMSF WITH THE GREATEST NATURAL APPEAL TO THE BRAIN-DEAD ON THE NATION’S SOFAS:1. The truly execrable “I’m ‘More Than’ Freeman”. I sincerely hope that the desperate chump responsible for this arch-fatuity had the grace to leap, screaming, off a tall building 2. The former Norwich Union Direct’s “My car loves you. My wallet loves you” (2003). More like Richard Harvey’s wallet loves you 3. Anything from confused.com MY BIGGEST DISAPPOINTMENTS OTMSF: Swinton; Homeserve; the Bolshevik Broadcasting Corporation; the apparent failure of the ABI to communicate effectively with anybody; the toxic sales culture operated in parts of the financial sector, particularly our shockingly cynical banks; the coming home to roost of decades of our hubristic lecturing of countries like Italy and Turkey over their endemic corruption; the appalling behaviour of most of the tabloids; the rapid growth of the toot-snorting classes; our “snouts-in-the-trough” expenses-stealing parliamentarians; the insidious proliferation of “reality” TV for the mentally-impaired; the destruction of my infantile 20th century belief that the police told the truth and that the City was a byword for integrity THE MOST INTERESTING DEVELOPMENT OTMSF: Sidse Babett Knudsen BEST USER OF CLICHÉ IN A TRADE PRESS INTERVIEW: The maestro Duncan Boyle (2004-5), closely followed by the brilliant Peter Staddon MOST STUPID COMPARISON OTMSF: “Remuneration committees .... too lazy to do their jobs properly. As a result, we have a culture of grabwhat-you-can among senior executives that’s every
bit as damaging to social coherence as the vilified consumers of welfare who gobble up £220 billion of national income each year” (Daily Mail) SOME 21st CENTURY TWADDLE: “(Insurance) is the greatest industry in the world, the DNA of capitalism” (Joe Plumeri); “.... the industry (needs) to attract weapons-grade talent” (Eric the Galbraith) SPECIAL AWARD (OF THE MILLENNIUM) FOR ORGANIC MATTER PRODUCED VIA THE DIGESTIVE TRACT OF A MALE BOVINE: “How far (can we) rely on traditional policy levers to ensure that either the aggregate amount of credit created or its sectoral allocation is socially optimal?” (Translation into non-gibberish – “How can we make banks lend to the right people?”) (2011) (One of those awfully “nice” blokes who used to be in charge of the FSA, the sleepwalkers of the century) MOST PRIMITIVE LIFE-FORMS OTMSF: Silent callers; plankton; clampers; the feral beasts of the Fourth Estate; house-builders; estate agents; pimps; parasitic personal injury lawyers and claims management firms; bankers; tadpoles; gurning TV cooks MOST GORMLESS BUFFOONS OTMSF: Twitterati who frolic without shame or self-awareness in a silent playground for sad losers, most of whom are sexually repressed as a direct result of having bad breath or being insured via a dodgy price comparison website
MY BIGGEST MISTAKES OTMSF 1. I wrongly predicted that a certain significantly overpaid chief executive would be defenestrated by a mob of angry shareholders 2. I mistakenly supposed that more of the leaders of our industry would do more to change its bad practices, rather than just take the money and waffle 3. I erroneously assumed that everybody working in insurance had a sense of humour.
FEBRUARY 2014 insurancepeople 17
Men from the Pru 1906 T
his postcard from the Reg Brown collection depicts the men from the Pru “Penge Section” in 1906 about to go out on the road, complete with their brollies and gloves. The company car was unknown at that time, but the photo doesn’t reveal whether they have any bicycle clips handy. Like several of the postcards in the Reg Brown collection, this one appears at first sight to have been commandeered to convey a domestic message. But perhaps not? It’s certainly not written by anyone in the photo. The topsy-turvy layout and the spaghetti writing, with no punctuation, would undoubtedly disqualify any job at the Pru. Even the stamp is awry! The message itself is rather twee to our modern-day eye, and untangled with some added punctuation for clarity, it reads:-
Dear Annie, John has asked me to forward this to you. I wonder if you'll like it, dear? They should adorn albums, should they not, Annie? One is in mine already. I like it and think it very good for so many on such a small card. Well dear, we should like to know how you are getting on, if you are keeping well. With best love from your loving brother and sister John and Gertie X X… (14 kisses in all!)
General Sir Thomas Willshire (1789-1862), who fought at the Battle of Salamanca and all over the Empire also lived there at one time.
So it seems probable that John is one of the fellows in the photo, and it’s Gertie doing the writing to her sister, having been asked by brother John to send the photo. And this is the intriguing part – sister Annie resides at Cranbourne Court, an upstairs/downstairs Edwardian mansion in the well-to-do neighbourhood of Windsor Forest, now known as Winkfield. So what is Miss Annie Ratcliff doing living there? It’s a good guess she is a maid, a housekeeper, or another live-in domestic servant. And what of Cranbourne Court itself? This is where the 18th century house itself takes over. When known as Hill House (a well-remembered insurance broking name from the past!) the resident was Admiral Sir Charles Rowley (1770-1845) famous for many naval exploits in the era of sail. 18 insurancepeople FEBRUARY 2014
Getting closer to postcard recipient Annie Ratcliff’s time at the Court, the American millionaire Oscar Lewisohn bought the property in 1907, having just married the famous musical comedy actress Edna May (1878-1948). So, one wonders if this change of ownership one year after the sending of the postcard signalled the end of Annie’s role at Cranbourne?
Cranbourne Court In more recent decades, various celebrities ensconced themselves in Cranbourne Court. Bob Hope and Bing Crosby rented the property in 1961 while filming The Road to Hong Kong. Rod Stewart lived there around 1972-76 with Dee Harrington and briefly with Britt Ekland. And when comedian Billy Connolly moved in, he allegedly upset the local residents by temporarily changing the name to Gruntfuttock Hall!
Nigel Phillips COMMERCIAL DIRECTOR CDL
Telematics marches on
The Future of Telematics Consumer awareness of telematics-based insurance continues to climb, and IP asks Nigel Phillips whether this technology is really now about to take off. What steps have software house CDL taken towards this goal? How seriously is the marketplace taking telematics? And how is the technology meeting the challenge so that retailers can capitalise on this demand in 2014?
ow seriously is the marketplace taking telematics? From our perspective, we see all the major personal lines retailers taking a hard look at it. But the questions are changing. At first, the conversation was very much around, “Will the technology really take off? Should we bother with it?” Now, the question is, “What kind of telematics product should we launch?” A number of factors have influenced this, including regulation and interest at government level in the driver safety benefits. Plus the fact that the early players have started to raise awareness, and the costs are coming down. So, what does that mean from a technology perspective?
The telematics hub Initially, some of the watching and waiting related to whether a common standard would be set for telematics policies. But so far, we’ve seen the opposite happening. The number of choices around data collection, and how to use it, is increasing. And there’s a range of telematics service providers out there offering different kinds of solutions. That’s why we realised the most efficient way for us to support our customers was to create a telematics hub that gives them control in terms of the kind of telematics product they choose to deploy. Ease of use is the key here –
such a hub can integrate with any telematics service provider, giving the ability to form selective relationships with competitive advantages for retailers.
Hub benefits for insurance retailers Choice is the biggest benefit. A single integration to a telematics hub provides access to a range of fully automated end-to-end telematics products. This makes it quicker and easier to deploy new telematics solutions, whether they're based on black box devices, on-board diagnostics (OBD2) or smartphone apps. There’s a growing number of telematics service providers looking to enter the UK market, so part of the challenge for retailers is finding those that offer the all-important competitive edge. The ideal hub allows the flexibility to work with any of the providers, and offers the ability to work with select partners that bring a combination of quality, innovation and added value. The telematics hub can receive data for any number of behavioural driving score factors, such as cornering, braking, acceleration, speed, vehicle location and time of day. It also has the facility to receive and process real-time events such as extreme driving alerts and first notification of loss (FNOL). This is the point at which an
“industrial strength” software solution is essential, capable of handling high volume insurance retail operations, with user specific rules determining the action to be taken, and carrying those actions out with speed and efficiency. Such actions include automatically recalculating customers’ premiums, processing additional payment requests or refunds, and initiating workflow within a contact centre.
Smartphone-based solutions Smartphone-based solutions are another exciting potential area for development. Retailers gain easy access to smartphone telematics apps that can be white labelled to their individual brands and configured to reflect insurer-specific rating rules. Apps also offer insurers a way to display information directly to their customers, making it easier to deliver rewards in terms of driver discounts or alerts in the event of dangerous driving. Managing the cost of claims is also a significant attraction towards telematics, and again, this is where specialist partners in this field come into their own. The upshot is that every step of the process of deploying and administering telematics data is fully automated, making it faster, cheaper and simpler for retailers to launch a telematics product to market. FEBRUARY 2014 insurancepeople 19
Ageas and Vauxhall partner for van cover A
geas and Vauxhall have extended their five-year partnership to include van insurance as well as private motor. Vauxhall will be offering a free five-day ‘Free to Go’ policy for vans purchased directly from Vauxhall dealers, as well as the option to purchase a full
annual insurance policy. A team within Stoke based Ageas Insurance Solutions services the Vauxhall Insurance business, managing all customer sales and service administration. Andy Watson, CEO of Ageas UK says, “We are delighted to have expanded
Lord Hunt voted BIBA chairman T he BIBA board has voted Lord David Hunt of Wirral, its first independent nonexecutive director, as its new chairman. He is the first person from outside of a broking organisation to become chairman. He is a member of the All Party Parliamentary Group on Insurance and Financial Services, and is a former president of the CII. Brendan McManus, BIBA’s deputy chairman and chief executive officer of UK Retail at Arthur J Gallagher, says, “This is a bold move for BIBA and demonstrates how serious we are about promoting and protecting the interests of our members and their customers. The strategic review has led to some significant changes at BIBA and this appointment is one of them. Lord Hunt’s
20 insurancepeople FEBRUARY 2014
wealth of experience, external and political knowledge will strengthen our strategic decisions.” * * * * BIBA has appointed new area managers. Sue Dimmock a former BIBA regional executive, will cover the central area of the UK, and Nicola Maguire, formerly of Towergate and AXA, will cover the southern area. Chris Knott, BIBA’s commercial manager, will cover the northern area of BIBA’s membership. The association says, “The area managers will have a responsibility to increase member engagement, with a specific remit to grow membership and schemes revenue, which is important to help keep BIBA’s membership fees to a minimum.”
our successful partnership with Vauxhall to include van insurance. We pride ourselves on partnering with some of the UK’s strongest brands and this latest development demonstrates our desire to widen our product proposition and strengthen our relationship with such a major partner.”
Thatcham appoints Hadstrong
hatcham Research has appointed transport PR and public affairs specialists Hadstrong to handle its “ambitious strategy” from January this year. Thatcham underlines its “commitment to reducing the impact and cost of claims”, which, it says, is influencing the design of vehicles. Chief executive Peter Shaw says, “We have led the way worldwide in developing many of the initiatives behind the UK’s rapid reduction in road deaths and serious injuries. Our research has shown how we will soon be able to mitigate the impact of crashes in the UK or avoid them all together. To ensure this important message reaches the right ears in Government, in politics, in the media, within professional bodies and with the public we have appointed Hadstrong, the proven specialist in this field. Hadstrong proved it had the vision, experience and has the knowledge and breadth of contacts needed to make our ambitious strategy become reality.”
Goldman Sachs completes equity investment in Hastings
astings Insurance Group has announced that, following regulatory approvals, it has completed the transaction announced on October 8 with Goldman Sachs Merchant Banking Division acquiring 50% of the voting share capital of the group. Gary Hoffman, chief
executive of Hastings Insurance Group, says, “We are delighted to welcome Goldman Sachs Merchant Banking Division as a new shareholder and look forward to working to deliver our clear strategic plan and to continue providing refreshingly straightforward insurance.”
in association with
Launch of BIBA manifesto 2014
t a reception in Parliament, BIBA has launched its 2014 manifesto, “Delivering for customers”. to an audience of Ministers, MPs, Lords, senior government officials, brokers and media. The key issues in the 2014 manifesto include: delivering access to suitable insurance protection; delivering a competitive regulatory system; claims – improving public understanding and enhancing the customer experience of the claims process; supporting SMEs; creating a level playing field for distribution; and tracking and measuring insurance premiums.
Bupa and Blue Cross Blue Shield in partnership
upa has announced a strategic global partnership with the Blue Cross Blue Shield system (BCBS), to create the largest global healthcare provider network, including 11,500 hospitals and 750,000 medical professionals in 190 countries. BCBS is the largest US-based health insurance group, comprising a federation of 37 Blue Cross Blue Shield companies, which combine to form the largest provider network in the US (over 96 per cent of US hospitals). The partnership will combine BCBS’s US network, their existing international network (accessed through their IPMI product, GeoBlue), and Bupa’s non-US international hospital network. Bupa and BCBS will also develop new international health insurance products, which will be available to customers and employers worldwide for coverage in 2015. The announcement follows Bupa’s purchase of a 49 per cent stake in Highway to Health, Inc (HTH) in December 2013. A HTH subsidiary sells and administers GeoBlue, the BCBS international health insurance product. A group of BCBS companies own the remaining 51 per cent of HTH.
Willis acquires high net worth adviser
illis Group Holdings has confirmed that it is to acquire Charles Monat Ltd, a life insurance adviser to high net worth clients. Charles Monat Ltd has placed over US$13 billion in coverage since it was founded in 1971 and currently has 61 employees and consultants based in Hong Kong, Singapore, Switzerland and the US. It has a strong presence in Asia and more recently has focused on growing its global business. Adam Garrard, CEO, Willis Asia, says, “Life insurance solutions for high net worth individuals is an established sector in Asia. The combination of the Charles Monat group’s expertise and reputation in this sector, coupled with our global footprint and international experience, will allow us to significantly accelerate our plans to expand our Global Wealth Solutions capabilities to other regions around the world.”
Ashgrove acquires A.J. Hird
tephen Duffy, managing director of Ashgrove Insurance, has confirmed the acquisition of A.J.Hird Insurance Consultants (turnover £5 million), based in Addingham, West Yorkshire. This is Ashgrove’s fourth acquisition. He comments, “I am delighted to acquire an excellent business which will
complement our existing model and also allow us to expand on the other side of the Pennines. The GWP is circa £1m including a niche book of business which we are keen to grow organically as well as looking at further acquisitions”. The offices will be retained and all existing staff will remain with the business.
Pictured: Chris Cundell MD (left) of AJ Hird and Stephen Duffy FEBRUARY 2014 insurancepeople 21
22 months jail for fraudulent claims A
West Midlands woman who invented spurious stories, including that she had lost a pregnancy, suffered from terminal cancer and was a victim of violent crime, to make thousands of pounds from bogus claims has been jailed for 22 months. Emma Fisher manipulated insurers, banks and a housing association into acting on 22 fraudulent claims. Between August 2008 and July 2012, the 27-
year-old received 11 payouts totalling £8,500, and was even moved into a specially adapted home to help her cope with a non-existent disability. She took out a majority of the policies online, using aliases to disguise her true identity. Following referrals to the Insurance Fraud Enforcement Department (IFED) from two insurers, Direct Line and RSA, she was arrested at her home in Slater Street, Willenhall, in July 2012 and subsequently pleaded
guilty to 22 counts of fraud by false representation. She also asked the court to take into consideration, when
sentencing, 43 additional counts of fraud relating to insurance matters that she had not been paid out on.
Upswing in insurance fines predicted
ollowing reports that insurance fines imposed by the FCA have increased by 160% to £44.6 million over the last year, Jim Muir, director of AutoRek, comments: “I can only see a
further upswing in insurance fines. Over the next year, there is likely to be some hefty, businesssurvival-threatening penalties as the regulators take a much tougher stance against any failings
Back to school at CDL
Pictured: Nigel Davies, head of professional services at CDL, playing a number game with pupils from Cheadle Heath Primary School 22 insurancepeople FEBRUARY 2014
to keep adequate financial records or loss of client money. “It is current weaknesses surrounding financial controls and the protection of client assets that means the regulators will be
determined to bring the level of rigour exhibited into line with leading financial services market practice, not just the best practice currently demonstrated in the insurance community.”
development administrator at CDL, helped organise the project and is one of the volunteers. She comments, “Being a reading partner has been a brilliant experience. It’s really rewarding to see just how much progress each child has made since the scheme began, and I find myself really looking forward to each session. CDL is always on the look-out for new ways to make a positive difference within the local community and it’s great to see so many colleagues get involved.”
olunteers at CDL have been giving up their lunch breaks to help provide a group of students at the local Cheadle Heath Primary School with additional numeracy and literacy support. Since November, staff have been volunteering as “reading and number partners” and taking part in weekly sessions that involve playing fun arithmetic games and supporting their partners on an individual basis with a book of choice. Claire Shanley, learning and organisation
in association with
New members for FCA Regulatory Decisions Committee T he FCA board has appointed three new members of its Regulatory Decisions Committee, which is responsible for taking decisions on whether to refuse or grant contested applications into the regulated community, and issuing warning and decision notices for certain enforcement cases on behalf of the FCA. Dame Elizabeth Neville was a police officer for 30 years and was chief constable of Wiltshire Police. Since her retirement in 2004, Dame Elizabeth has held a
number of public positions, including: independent complaints assessor for the Department for Transport; non-executive director at the Serious Fraud Office; and a member of the Police Appeals Tribunal. Currently, she is a lay member of the Independent Appeals Body for Phonepay-Plus; a member of the Determinations Panel for The Pensions Regulator; and an independent adjudicator at Companies House. She is also a non-executive member of board of The Insolvency Service.
Pauline Wallace, a former senior partner at PwC, was, for the last four years, head of public policy and regulatory affairs advising the board on public policy issues. She is a qualified chartered accountant and has held senior positions in both the UK and Hong Kong. In 2002 she set up the global financial instruments team at PwC and retained responsibility for it until she took on the role as head of regulatory affairs. Peter Craddock, up to December 2013, was group
operations director at Perspective Financial Group Limited, a £23m turnover national finance advisory group. He now operates as an independent consultant via his own business, is also a director of The Association of Professional Financial Advisers (APFA), an associate of the Chartered Insurance Institute and a Chartered director. He was formerly director of financial services at Skipton Building Society and previously held a number of senior roles at Commercial Union.
BIBA launches price index
new general insurance price index from BIBA and Acturis has been launched to track the cost of insurance premiums. It includes three ‘shopping baskets’ to represent insurance buyers. A consumer basket including a motor and home policy; a small and medium enterprises (SME) basket made up of a package policy and a commercial vehicle; and a larger commercial basket made up of a commercial combined, fleet and combined liability policies. The BIBA-Acturis Insurance Price Index shows that average premiums for an SME insurance ‘shopping basket’ have increased by 11.5% since 2010. The consumer ‘shopping basket’ has a 2% reduction in average premiums compared to 2012. The third basket within the index shows that average premiums for the larger commercial ‘shopping basket’ have been mostly flat since 2010 with a slight increase of around 1% over the three year period. Steve White, BIBA’s chief executive, who launched the index in the Houses of Parliament, says, “This new index will help us to identify trends and movements from more than £4 billion of insurance premium. This is an exciting milestone, as it will allow us to regularly track the cost of insurance and will provide a wider insight into the economic health of the country, the cost of living, and our sector’s role in that.”
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Decrease of 12.5% in 2013 car premiums
he latest Confused.com “Car Insurance Pricing Index, in association with Towers Watson” indicates that the average cost of a new comprehensive car
insurance policy fell by 12.5% in 2013 to £644. TPFT cover fell by 7.5%. Overall market prices continued to fall in the fourth quarter, but at a much lower
rate than in previous quarters, reflecting repeated calls from within the industry for greater underwriting discipline after two solid years of price cuts. Across the UK, the average cost of a new comprehensive policy fell by 1.1% between October and December 2013. Stephen Jones, UK general insurance pricing leader at Towers Watson, comments, “There is growing evidence of a turning-point in the pricing cycle, with the rate of price reductions reduced considerably relative to
earlier quarters, and some segments seeing modest premium increases. “This suggests that the underwriting discipline called for following previous rate reductions is returning to the market, with insurers becoming more selective in their pricing strategies and with gender-neutral pricing bedded-down 12 months after its introduction. Rate increases biased towards traditionally low-risk customer groups suggest that the recent LASPO reforms are delivering the expected structural pricing changes.”
New HBC site in Lancashire
BC Vehicle Services has opened a further strategic site in Lancashire. This is the third site HBC have opened within three months following the opening of their two
Scottish based sites in Aberdeen and Glasgow. Steve Hankins, managing director, comments: "Due to logistic costs of transporting vehicles, it made
economical business sense to invest in new sites and we have partnered with Hills Salvage and Recyling Ltd at Ormskirk to cover our North West business. All three sites will
work to greatly reduce the time our vehicles are on the road, which will not only deliver financial savings, but reduce emissions, something we are committed to at HBC.”
Admiral three-year deal with Auto Windscreens
Technician Steve Abrahams, Auto Windscreens 24 insurancepeople FEBRUARY 2014
dmiral has singed a three-and-a-half year “preferred supplier” deal with Auto Windscreens, who will now handle 50% of Admiral's motoring customers' glass repair and replacement needs, increasing previous work volumes by an estimated 45,000 and creating an anticipated 60 new jobs at Auto Windscreens. Mike King, head of claims service at Admiral, says, “Auto Windscreens exceed the standards we demand on behalf of our customers and we are delighted to reaffirm our partnership with them as a preferred glass supplier for the foreseeable future. The company has shown a commitment to putting customers’ needs at the heart of operations and this is backed by a seamless solution and a skilled workforce.”
in association with
Ageas rating at individual household level
Acturis acquires Nordic Insurance Software
cturis Group has acquired Nordic Insurance Software, a provider of insurance software in the travel and assistance, expatriate and health insurance markets, with clients in over 30 countries. Acturis, founded in 2000, reports that its administration, underwriting and trading platform is used by more than 10,500 users across 400 sites, processing over £4 billion GWP annually. NIS was founded in 1996 and has headquarters in Copenhagen. It reports a compound revenue growth rate of around 59% per annum over the last three years. David McDonald, co-CEO of Acturis, comments, “We have been actively engaged in expanding our footprint beyond the UK for some time and we believe that the combination of Acturis and NIS will provide us with new and exciting international growth opportunities. Almost all of NIS revenues are generated outside the UK and this acquisition puts the enlarged Acturis Group in a position where a significant portion of the group's revenue is derived outside of the UK. Given our international expansion plans, we expect this to grow over time.”
geas has adopted a new underwriting system that rates on an individual household level. Currently available on Applied (formerly Insurecom), it will roll out to other software houses over the next few months. The company says that this has “ … opened its underwriting footprint to quote for approximately 270,000 additional properties in the UK”. The “full address rating” system is available across the Ageas House Guard Extra and Prestige products. Craig Allen, head of home underwriting at Ageas, comments: “The launch of our full address rating system offers brokers improved access to our products with premiums truly reflective of the customer’s risk. This is an immensely powerful message, particularly in flood prone areas where the risk can alter dramatically within the same postcode. It is also gratifying to know that our footprint has broadened with this underwriting capability, giving brokers more of the market to target whilst enabling them to compete with direct players. “This development reflects our ongoing commitment to invest in the right tools and technologies to provide fairer pricing to policyholders, cut fraud and support the needs of brokers operating in this fiercely competitive market.”
Fitch says RSA Irish issue is “contained”
itch Ratings says that it views positively the findings of the external review of Royal & Sun Alliance Plc’s (RSA) Irish business by PwC, which confirm that financial and claims irregularities identified in late 2013 were isolated to Ireland. In addition, it says, assurance testing carried out by the current auditor, KPMG, reinforces the agency’s view that underwriting controls and management of operations at the wider group level remain solid. Confirmation that additional reserving requirements related to the Irish business remain unchanged at GBP200m is also viewed favourably.
FEBRUARY 2014 insurancepeople 25
Environmental impairment liability product from Argo A
rgo International has launched a new environmental impairment liability product. It will include contractors pollution liability and pollution legal liability and has been developed, says Argo, “ … to address the increasing environmental liability requirements that legal developments in the UK and Europe have placed on businesses”. Cover will include: clean-up of pollution caused by the activities of the insured; clean-up of pollution caused by the mobilisation or exacerbation of in-situ contamination; third party bodily injury and property damage; transportation; and loss of profit / rent.
James Cassidy, underwriter, general liability, says, “Our new EIL product has been developed in response to the increasing need our clients face for coverage to protect against environmental liabilities. Developments such as the EU Environmental Liability Directive highlight the growing emphasis placed at a national and pan-European level, for businesses to insure against new risks arising from environmental and pollution damage. “Our new product, which complements our current suite of general liability products, will provide further security for our clients and ensure that they are covered against both traditional and new liabilities.”
$2.25bn loss from December Review of RBS treatment of business customers storms in Europe
n Impact Forecasting report from Aon Benfield shows that Europe was impacted by a series of windstorms during December, including Windstorm Xaver, which moved through the north of the continent killing at least 15 people and producing insured losses of around EUR800 million (USD1.1 billion). Windstorm Dirk, which affected western and northern Europe, resulted in total insured losses of EUR360 million (USD500 million), and the combined economic loss from Xaver
26 insurancepeople FEBRUARY 2014
and Dirk is forecast to be at least USD2.25 billion. Adam Podlaha, head of Impact Forecasting, said: “The clustered pattern of windstorms seen across western and northern Europe in December has emphasized the importance of being able to capture this phenomenon in catastrophe models. Impact Forecasting’s new European windstorm model replicates such clustering patterns by using a realistic sequence of storms originating directly from highly advanced global climate models.”
he FCA has appointed Promontory Financial Group and Mazars to conduct an independent skilled persons report under section 166 of the Financial Services and Markets Act (FSMA) 2000. The report will examine Royal Bank of Scotland’s treatment of business customers in financial difficulty and consider allegations of poor practice
set out in the report by Dr Lawrence Tomlinson and referenced in Sir Andrew Large’s report. The FCA expects to publish the outcomes from the review in Q3 2014. Whilst commercial lending is not a regulated activity under FSMA, if the findings reveal issues which come within the FCA’s remit, the FCA says it will consider further regulatory measures.
Equity completes sale of EBDL
quity Insurance Group has announced completion of the sale of Equity Broking Direct Ltd (EBDL) to NMG Holdings, part of the NMG Group, a global financial services company. It marks the completion of Equity’s strategy to exit insurance distribution, following the disposal last year of its stake in Arista. Equity chief executive, Ian Parker, says, “2013 was a busy year restructuring Equity. 2014 is all about implementing our ‘motor only, broker only’ strategy, and bringing that to life. Our complete focus is on making our core specialist motor underwriting business profitable. It will be a very exciting year as we continue to re-build Equity as the key market for brokers looking to place motor risks.”
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New Cooper Gay wholesale division in Australia
Record number of reports to IFB
einsurance intermediary Cooper Gay (Australia) has launched a new wholesale division for the Australian insurance market, to act as “ … a key intermediary between the independent insurance agents and top insurance carriers”. Cooper Gay’s wholesale division will be run by Jonathan Hyde, who joined the company in July 2013 as head of production. In his new role as head of wholesale, he will be responsible for developing the company’s wholesale business and broker relationships.
Allianz loses Affinion contract
ffinion International, a global provider of customer loyalty and engagement products, has announced the signing of a new partnership with AmTrust Europe to underwrite Affinion International’s UK insurance products. The partnership, due to run until 2020, replaces Affinion’s previous contract with Allianz. Affinion says that the new partnership will allow them greater control of the administration of claims for all products, including the addition of mobile phone insurance claims handling The company's senior vice president, Northern Europe, Giles Desforges, says, "AmTrust are the perfect partner for Affinion International. We believe we share the same business values and we are confident we will form a strong alliance within the UK’s affinity market space.” He continues, “The mobile phone is the gateway to the consumers’ world so it is particularly important that the care people receive when things go wrong with their mobile is second to none.”
ublic reports of insurance fraud to the Insurance Fraud Bureau topped 6000 in 2013, a 32% increase on the previous high. In total there were 6060 reports made to either the IFB’s Cheatline or Crimestoppers at an average of one report every 90 minutes. The IFB’s Cheatline, which is powered by Crimestoppers, is a service that allows members of the public to anonymously report insurance fraud either by calling the Freephone number or submitting an electronic report. Ben Fletcher, director of the IFB says, “It is fantastic to see such an increase in fraud reports and it shows that the public shares our contempt for insurance fraud. Far from being a victimless crime, insurance fraud hits honest policyholders in the pocket and, in some cases, puts innocent road users in harm’s way. The Cheatline is a free anonymous service that helps us identify fraudsters and bring them to justice. Seeing the public make use of it is extremely gratifying.”
Negative impact of FSCS fees on brokers
IBA reports that FSCS fees are having a negative impact on insurance brokers, with 53% of members stating in research that they have either delayed or cut investment and 40% reporting a reduction in expansion as a result. Members have seen a fiftyfold increase in FSCS fees in recent years, primarily due, says BIBA, to “ … mis-sold payment protection insurance policies from secondary intermediaries”. Chief executive Steve White says, “Members continue to report the unfairness of the FSCS fees
particularly in light of the fact that defaults by insurance brokers are relatively uncommon and have not given rise to huge claims on the resources of the compensation scheme, unlike other sectors. This research is particularly alarming and demonstrates how restricting these fees are for members, 85% of whom have less than 10 staff.” “We will work with the Financial Conduct Authority on the review of its funding to find a more equitable system and we want to see a fairer separate sub-class within the FSCS for pure insurance brokers.” FEBRUARY 2014 insurancepeople 27
“The ones that got away” Every individual’s insurance career has the inevitable ups and downs, and there can’t be many insurance people who have not occasionally daydreamed about getting away from the corporate turmoil. One escape method is to turn a pastime interest or hobby into a viable alternative career. For instance, the number of potential novelists out there is quite high, and here’s an example where an insurance broker with a passion for naval history not only succeeded in getting his first novel published, but went on to become a world-ranking bestselling millionaire author
Tom Clancy T
he author Tom Clancy, who passed away in October last year, was an insurance broker with the dream to write a novel. But it was more than a dream – he actually set about doing it. In 1973 he joined the O F Bowen Agency, a small insurance broking firm based in Owings, Maryland, USA. It was founded by his first wife's grandfather, and he took over the agency in 1980. In his spare time he wrote novels, and it was here in 1982 he began to create a piece of work which he called The Hunt For Red October. It was released in 1984 and his publisher was the Naval Institute Press from whom he received $5,000. The rest is history, as they say, and Clancy was established as a master storyteller blending exceptional realism and authenticity with intricate plots and high suspense. * * * * Thomas Leo Clancy was born at Franklin Square Hospital in Baltimore, Maryland, in 1947 and grew up in the Northwood neighbourhood. He was the second of 28 insurancepeople FEBRUARY 2014
three children to Thomas Clancy, a postman, and Catherine Clancy who worked in a store's credit department. His mother worked primarily to send him through college, and he graduated in 1969 from Loyola College (now Loyola University) in Baltimore with a degree in English literature. His insurance career began immediately after graduation when he joined an insurance firm in Baltimore, and then one in Hartford, Connecticut before leaving to join the family firm. Seventeen of his books topped the New York Times bestseller chart, and he also became one of the first writers to recreate himself as a brand-name in the video and war-game market under his company name Red Storm.
Thomas Leo Clancy 1947-2013
On the move Who’s going where?
In association with
VEHICLE SERVICES Collection, storage and sales
UK General UK General appoints Stella Jones as director of travel. She was previously head of sales for travel at Collinson Insurance Group. Steve Boreham is appointed as schemes underwriter. He joins from Templeton Insurance where he was underwriting manager and previously worked at HSBC Insurance Brokers as head of operations. Christian Burton is appointed as business development manager for the South East. He has previously worked at Towergate and MGA.
OIM Underwriting appoints Nicola Bassett as claims director. With 30 years’ experience, she joins from Faraday where she was claims manager and has also worked at Scor as claims manager, at QBE as a claims clerk, at Leslie & Godwin as a construction & special risks claims broker and technician and started as a management graduate at Aviva (then London & Edinburgh).
HSB HSB Engineering Insurance appoints David Slack as senior loss control engineer. He joins from Allianz Engineering where he was a senior engineering risk surveyor and previously worked at British Engine, spent three years at RSA, and 9 years at Ashdown Environmental, USAA and ECIC. Dorcas Atkinson joins as head of human resources. She was previously HR director at Pegler Yorkshire and has also held HR management roles at Barclays Bank, Burberry and Sheffield Hallam University.
Canopius Canopius appoints Andrew Pooley as head of international liability. He joins from Dual Corporate Risks, was previously class underwriter at Brit Insurance and has also worked at The Underwriter Insurance, Independent Insurance, Aegon Insurance and Prudential.
Marketform appoints Antonio Bellanca as head of Europe and emerging markets, professional indemnity. He joins from Novae Group at Lloyd’s.
Markel Kelli Alexander
Open GI Open GI appoints Kelli Alexander as new business sales consultant. She joins from QBE and has been underwriting team leader and account manager.
ICAT ICAT appoints Megan McConnell as active underwriter for Syndicate 4242 at Lloyd’s. Previously their underwriting vice president, she joined ICAT in 2005 as product manager.
Markel International appoints Charles Bragg as senior underwriter for ports and terminals. With over 40 years’ experience, he was previously ports and terminals portfolio manager at QBE’s O’Farrell Syndicate 1036 at Lloyd’s.
Chase Templeton appoints David Williams as head of group risk. Previously senior group risk consultant at Aon, he has also worked as a pensions consultant at Bacon & Woodrow.
Covéa Covéa Insurance appoints David Mann as national broker development manager. He joins from Aviva where he most recently worked with key accounts. FEBRUARY 2014 insurancepeople 29
On the move Who’s going where? Arthur J Gallagher Arthur J. Gallagher appoints Martin Atkinson as sales director for UK Retail. He was most recently sales director at Henderson Insurance Brokers and has also worked at Willis. Paul Fairhurst joins as head of office–Manchester, UK Retail division from Marsh where he was regional managing director for the North’ He has also
worked at Willis as branch director. Pamela Fowler joins as regional sales director from RSA where she worked for over 20 years.
Dale Underwriting Partners appoints Ian Bridge as head of property insurance. He joins from Faraday where he worked for ten years, most recently as head of property insurance and has also been a property underwriter at Markel.
Gallagher Heath appoints Anthony Needham as sales director in its public sector & education practice. He joins from Aon where he was client manager and was previously regional public sector leader at Marsh.
BGL Group appoints Claire Whieldon as senior reward & benefits manager. She previously worked at Napp Pharmaceuticals, PwC and qualified at Ernst & Young as a chartered tax adviser.
Willis Willis Global Captive Management appoints Paul Owens as chief executive officer. At Willis since 1990, he was most recently chief operating officer at Willis Ltd and Global Businesses and previously worked at British & Commonwealth Holdings, Goldman Sachs and trained as a chartered accountant with Arthur Young.
LV= LV= appoints Steve Chatwin as broker training manager. With 20 years’ experience, he joins from RBS and previously worked at Bank of America Merrill Lynch and at Reuters as learning manager (UK/Europe) for sales and service. LV= Broker appoints Tony Venus as head of broker services. He was previously LV= Broker’s head of operational development & control, held various roles at NIG / RBS Insurance including head of branch support and customer delivery manager, and has also worked at Sterling Insurance and Legal & General.
30 insurancepeople FEBRUARY 2014
Liberty Mutual Insurance appoints John Meehan as branch manager of its Leeds office. He was previously UK development manager at Zurich where he worked for 26 years.
Argenta Argenta appoints Matthew Howlett as accident and health underwriter at Syndicate 2121. He joins from Alterra Syndicate 1400 where he was deputy underwriter, accident and health insurance and has also worked at Presidio Reinsurance.
A G Doré
A G Doré & Others Syndicate 2526 appoints Dominic Frost as active underwriter. With 20 years’ professional indemnity experience, he was previously deputy active underwriter.
AXA ART Sylvie Gleises is appointed as managing director of France, Benelux and the Middle East. She was most recently executive assistant to AXA Group’s chairman and CEO and secretary of their board of directors.
In association with
VEHICLE SERVICES Collection, storage and sales
QuestGates appoints Tony Burnett as project manager. With nearly 30 years’ experience, he joins from Ecologia Environmental and has also worked at Crawfords and Corsair Environmental.
Willis Willis appoints Simon Ashby as CEO of Global Solutions International. He joins from Bowring Marsh Bermuda where he was managing director – FINPRO, has previously worked at Gulf Insurance as managing director and chief underwriting officer, and held senior roles at Johnson & Higgins, Holmes Johnson Lessiter Financial Group and Stewart Wrightson. Sarah Turvill joins as a non-executive director to the Willis Limited Board. She retired as chairman of Willis International at the end of 2013 and has held various roles in the company since joining in 1978, including chief executive of Continental Europe.
Aon Benfield appoints Keith Moore as chief business development officer of their US business. With 30 years’ insurance experience, he was previously an executive managing director within their US treaty team, a member of their US leadership team and an underwriter at General Re.
Equinox Global appoints Genevieve Ahinful as senior underwriter. She joins from AJG UK where she was an associate director of credit and political risks, and has also worked at Rattner Mackenzie as a broker and held roles at Aon Ltd and Euler Hermes.
DUAL DUAL appoints Nick Grazier as business development director, Europe. He was previously group head of marketing & business development at Jubilee Managing Agency, head of private clients at Chartis Insurance and head of marketing & distribution at AXA Art Insurance.
Dr Thomas Jannakos
DAS appoints Dr Thomas Jannakos as chief finance officer and board director. He joins from Munich Re where he was head of department corporate performance management and previously worked at Karlsruher Leben.
Plum Underwriting appoints Stuart Bromley as development underwriting manager. He was most recently Plum’s underwriting team manager and nonstandard property and mid net worth underwriter, and previously worked at NIG.
The Council of Lloyd’s appoints Inga Beale as chief executive. She was most recently group chief executive of Canopius and has also been global chief underwriting officer at Zurich Insurance, group CEO of Converium, with roles at GE Insurance Solutions and underwriter at Prudential.
Assurant Solutions Assurant Solutions appoints Andy Morris as chief marketing officer of its European businesses. He was previously business development director at Lifestyle Services Group (LSG) and spent six years at GE Commercial Finance. FEBRUARY 2014 insurancepeople 31
by Andrew Newman
in association with:
card school reunion of four former ‘on the road’ men took place in January 2014 in a hostelry not far from Leeds. They had all worked for different firms, and originally formed their bond (D’oh! horrible pun, see later) when promotion-related house moves involved lengthy stays in a hotel at company expense. There was a life branch manager from one of the Scottish offices living in the hotel while awaiting a house move; a roving hands-on software house computer trouble shooter; a general business developer who used the hotel regularly for his travels to the North; and an assistant bank manager, likewise trapped in the hotel until he could move home following a promotion. They all went on to higher things, but the card school remained intact. Bridge was the game they were hooked on, and perhaps surprisingly they never played for money. Jeremy (the banker) explains:“Unlike poker where the game doesn’t work without chips on the table, we found the emotions, embarrassments and thrills reward enough, and that was due to the mixture of personalities in the school. “We kept the same partnerships – the rivalry was that intense. Our IT man (very cautious) partnered the GB inspector (who often had to take the initiative) while my partner, the life rep was (and still is) very jovial, with a wonderful laugh, a good card player, who puts up with my wild bidding and more sombre approach. I admit I’m a
Bond ♦ Queen, 8,7,6, 5,4,3,2 ♣ Ace, queen,10,8,4
♠ Ace, king, queen, knave ♥ Ace, king, queen, knave ♦ Ace, king ♣ King, knave, 9
♠ 6,5,4,3,2 ♥ 10,9,8,7,2 ♦ Knave,10,9
M ♠ 10,9,8,7 ♥ 6,5,4,3 ♣ 7,6,5,3,2 32 insurancepeople FEBRUARY 2014
shade formal, and that’s probably why I was chosen as the butt for what happened one night in the hotel while I popped out of the room.” The former GB inspector takes up the story:Shortly after our card school was established, I brought along my father’s first edition of Ian Fleming’s Bond novel Moonraker. I revealed the bridge game, reproduced here, when Bond drubbed the villain, Sir Hugo Drax, with a grand slam in clubs when Drax held a stone bonker hand of his own. The diagram shows that with Bond dealing the cards he had surreptitiously substituted, he can open the bidding with a Grand Slam in clubs with an apparently innocuous hand. Drax’s chagrin is that he cannot overbid because of the missing Ace of clubs. So he doubles the bet, looking forward to destroying Bond’s reckless shut-out contract with his battery of Aces and Kings, but becomes more thoughtful when Bond redoubles. Whatever card Drax’s partner leads, Bond is in. Trumping and leading clubs from ‘M’s dummy on the table, he can finesse all the Drax trumps leaving his own string of diamonds to clean up. But of course the villain is not immediately certain that’s going to happen, so plenty of tension and heart-thumping going on. Jeremy arrived late that evening at the hotel, and so didn’t see the book. And that’s probably why we found ourselves choosing him to play the Drax part on some future occasion. He was the best player amongst us, and a little on the pompous side, so proved the ideal choice. Came the day, the substitute cards were dealt, but unlike the Moonraker game, there was no hostility. We wanted Jeremy to enjoy it too! So we had to change it so he could at least have the pleasure of bidding his hand.
Jeremy: “And so I did. I’d never had such strong hand before. Even when the slam bid came in, I was still confident I could score at least four undertricks to grind their egos into the dust.
And yes, we played cards at our recent reunion, and the Bond first edition was brought along for old time’s sake.”
Understanding the things that are important to you and your customers can only be achieved by listening and getting closer to you - our brokers. This means that we can provide even more innovative and flexible insurance solutions designed to help your business grow and increase profitability. Our executive range of high net worth and commercial products are designed to the highest standards, backed up with excellent service; as evidenced by the many industry awards we have recently won. Our immediate access to decision makers and our ongoing commitment to exceptional customer service, competitive pricing and fast, fair claims settlement makes Sterling a company that truly makes a difference in the marketplace.
To find out more, contact: Broker Operations Manager, Mark Arends on 0845 2711445 or marends@Sterlinginsurancegroup.com
Sterling Insurance Company Limited and Sterling Life Limited are incorporated and registered in England and Wales under numbers 498605 and 911235 respectively. They are authorised and regulated by the Financial Services Authority and are covered by the Financial Services Compensation Scheme and the Financial Ombudsman Service.
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