ClaimsTech disruption a big hit

ClaimsTech 2021, ILC’s most disruptive event to date, proved a major success, with leading insurer representatives declaring it “great and very different” and “innovative and enjoyable.”

The occasion challenged the norm of events featuring a free flowing – Top Gear style – open plan floor with presentations and demonstrations in the latest in insurtech from some of the industry’s leading innovators.

Amongst the demonstrations were Unicorn business Tractable showing how AI technology can be applied to automate and streamline the claims process within motor insurance, and Digilog which explained how its voice recognition software is undergoing continuous development in the fight against fraud.

In addition, between demonstrations, ILC commercial officer, Nic Sproul offered further insight by interviewing leading figures from insurers who provided fascinating insights into the deployment of technology and how it was supporting stratagies.

Ian Hughes of Consumer Intelligence also provided a view from a consumer perspective throughout the course of the event.

ILC’s head of ClaimsTech, Stuart Ballantyne said, “ClaimsTech proved to be everything we had hoped for: disruptive, innovative and like nothing the industry had seen before. With the mix of live demonstrations, interviews, expert opinion and general networking opportunity, it provided some fascinating insights into what the future of claims technology might look like.”

ClaimsTech 2021 was supported by headline sponsors: SightCall; event partners: Google Cloud and Mastercard; gold sponsors: CoreLogic, Digilog UK, Entegral, IMS (Insurance & Mobility Solutions), Tractable and Verisk; as well as silver sponsors: asTech, Carpe Data, eviid, GT Motive, Service Certainty and Synergy.

Highlights of the event will be released in the coming weeks.

Plans are now underway for ClaimsTech 2022, which takes place Thursday 22 September 2022.

Breakfast news round up 25 August

Motor Claims

Verisk adopts Thatcham Research code

Verisk is incorporating Thatcham Research’s Variant Code to enhance it motor insurance solutions.

The Variant Code provides updated information on features included within models, including Advanced Driver Assistance Systems (ADAS), expensive headlights, and keyless and connectivity systems.

Dan Payne, Chief Digital Officer at Thatcham Research said: “This is about accurate risk assessment at a uniquely granular level. Variant Code offers a competitive advantage, empowering Verisk’s insurer customers to make more informed and intelligent decisions, and price according to the features present on a particular model variant. This is fundamental as vehicles evolve and technologies that were once the preserve of high-end models are increasingly made available at entry level.”

Copart goes live with two new sales sites

Copart UK has launched two new websites to help customers sell their cars instantly.

Customer-facing sites CashForCars.co.uk and Cash-For-Cars.ie have gone live to provide a free, online quote within 60 seconds, a free nationwide collection service, and fast payment upon receipt of the vehicle.

Any vehicle in any condition will be accepted, while customers also have the option of dropping off their vehicles to dedicated areas based at Copart UK’s 15 nationwide Operation Centres, and in Ireland at Copart’s Head Office or one of its sub-lot.

GT Motive announces new supply partner

Claims estimating and management solutions provider GT Motive has appointed Quantum Technical as sole supplier in the UK.

The announcement comes after months of development and research.

David Punter, founder and CEO of Quantum Technical, said, “It is great to support a forward-thinking company who address the market from a user perspective, and have demonstrated their flexibility with customers and partners, to offer a real alternative to the market.”

LV=BR introduces EV roadside assistance

LV=Britannia Rescue (LV= BR) has launched a new comprehensive electric car service to customers who break down in London.

Introduced in partnership with LAR Traffic Services, the service will see a fully qualified technician with the tools and diagnostic equipment necessary for repairing electric cars at the roadside attend to customers.

The service will be carried out in an electric van equipped with an electric car recharge unit, providing a fully end-to-end electric breakdown service.

Insurers respond to CCPC investigation

Six leading insurance companies have agreed to reform their internal competition law compliance programmes after an investigation by the Competition and Consumer Protection Commission (CCPC) in Ireland.

The investigation focused on anti-competitive practices in the provision of motor insurance, and although AIG Europe, Allianz, AXA Insurance, Aviva Insurance Ireland, FBD Insurance and AA Ireland all deny any breaches, each has made legal commitments to provide mechanisms for internal monitoring and whistleblowing, independent oversight and regular competition law training.

A seventh company, Brokers Ireland, has not agreed to the terms.

ADAS uncertainty putting drivers at risk

Faulty ADAS systems could be putting millions of drivers and other road users at risk.

Research from Autoglass found that 80% of drivers think ADAS systems that have been incorrectly repaired or recalibrated will warn them of the fault. However, ADAS technologies currently do not have the capability to alert the driver if they are not correctly aligned.

ADAS sensors need to be recalibrated correctly after most repairs, includes a windscreen replacement, but less than half (48%) of UK drivers realise this is the case.

Used car prices continue upward trajectory

Used car prices on the Auto Trader platform rose for the 66th week in a row this month.

It reported a 15% year-on-year rise in the week starting 9 August, with consumer demand and disruption in the supply of new vehicles contributing to the continues price increases.

It also found that used cars sell in 26 days on average, which is 10% quicker than when the forecourts opened after lockdown in April.

Meanwhile, its own research found that 46% of new car buyers would not be prepared to wait for more than a month for a new purchase while 74% would consider a used car instead if the time-lag on a new vehicle was too long.

Home claims

Flood losses to exceed €5bn

Catastrophic modelling company RMS has estimated the insured losses from the floods in Western and Central Europe in the middle of July at between €5bn and €6.5bn.

The US-based company reconstructed a flood hazard footprint that covers the worst affected areas to calculate these losses, finding that Germany is the dominant contributor of loss with about 70% of the total loss, followed by Belgium with about 25% of the loss.

The loss estimate includes insured property and business interruption loss to residential, commercial, industrial, automobile, and infrastructure lines.

Guidewire acquires risk insight specialist

Software specialist Guidewire has acquired HazardHub, a provider of API-driven property risk insights to the property and casualty insurance industry.

HazardHub collects and analyses data to provide a comprehensive catalogue of risks, while its API provides risk scores and supports the underlying information for any US property.

Mike Rosenbaum, CEO, Guideware Software, said, “Underwriters, agents, and claims adjusters will power smarter decisions with risk insights embedded directly into core workflows. Embedding HazardHub’s comprehensive property risk data service into Guidewire’s industry-leading platform will drive tremendous value for our customers and the P&C insurance industry.”

Claims tech

London insurers create new digital roles

AEGIS London has named its first chief technology officer as it accelerates its digital transformation.

Mark Degenaar has been appointed to support the development of the business’s digital and technology strategy. He joins from Insurance Business Applications, and has held a range of senior technology roles within the insurance sector and other markets.

Meanwhile, Ki, the fully digital and algorithmically-driven Lloyd’s syndicate launched by Brit and Google Cloud, has also created a new chief technology officer position, appointing Richard Hodgson to lead its technology strategy and execution.

Tysers launches Tconnect

London-based insurance broker Tysers has launched Tconnect – a cross-functional, cloud-based platform designed to consolidate processes and automate the end-to-end lifecycle of a policy.

The launch represents a notable milestone in the company’s digital transformation and modernisation of its existing IT infrastructure, which is intended to improve operational efficiencies and streamline claims workflows.

Steve Jolley, CIO, said, “Tconnect is the realisation of a year-long programme of process development and a major step forward in connecting systems, clients and markets to digital trading platforms. Using API technology to eliminate re-keying, RPA technology to automate processes and being fully cloud based, Tconnect is available anytime, anywhere, on any device.”

DXC introduces new insurance platform

UK-based tech company DXC Technology has partnered with next-generation global specialty insurer Mosaic Insurance to launch an insurance technology platform that it claims increases the speed at which specialty insurance is sold, underwritten and serviced.

The new platform automates interactions throughout the risk life cycle with: machine-learning algorithms and natural-language processing that enhance underwriting in Mosaic’s highly technical product lines; blockchain infrastructure that provides transparent and instantaneous sharing of data across the platform among brokers, syndicated capital partners, reinsurers and regulators; and data transparency, open interfaces, robotics and AI that cut costs and streamline processes.

New tech altering risk profiles

Technology is changing the way companies measure and manage risk, according to a new report published by Willis Tower Watson.

It found that Covid-19 has accelerated the shift towards digitalisation, and the companies which do well going forward will be those who ‘develop resilient workplace cultures, careful risk management and detailed business continuity plans.’

A key part of this will managing a hybrid workforce, with remote working introducing new risks to both the individual and the company.

Market news

Goldman Sachs expands European footprint

Goldman Sachs will buy Dutch insurer NN Group’s asset management arm for around €1.7bn.

The acquisition is the largest by the Wall Street firm since David Solomon became chief executive in 2018 and is part of a longer-term strategy to make the bank’s revenue stream less reliant on earnings from trading and advising on deals.

Goldman Sachs has said that all NNIP’s 900 employees will join the company as part of the deal, while the Netherlands will now become a significant location in its European business.

Courts green-light landmark class action case

A London court has approved a £10bn-plus class action against Mastercard that could entitle 46 million British adults £300 pounds each.

Former chief ombudsman of the Financial Ombudsman Service, Walter Merricks, claimed Mastercard charged unlawful fees to retailers and businesses processing transactions. Now the Competition Appeal Tribunal has certified the case as a collective action, which could see Mastercard ordered to pay compensation to more than 46 million shoppers.

Merricks said, “Mastercard has thrown everything at trying to prevent this claim going forward, but today its efforts have failed. The tribunal’s ruling heralds the start of an era of consumer-focused class actions which will help to hold big business to account in areas that really matter.”

BI claims top 21,000

The Financial Conduct Authority (FCA) has revealed that business interruption claims are approaching £1bn, but 15,400 companies are still waiting for payouts.

FCA figures show that insurance companies have paid out more than £968m in BI claims – £636.7m in final settlements and £331.2m in initial payments.

However, the final figure is expected to rise substantially with 38% of the 41,666 policyholders who have been told they are entitled to insurance payouts still waiting to receive any money.

New starts

LV= General Insurance has appointed Matt Crabtree as Head of Financial Crime Strategy. He will be responsible for overseeing the company’s Intelligence Team, Special Investigations, and Linked and Organised Crime areas.

Meanwhile, SimCorp has announced that Christian Kromann will succeed Klaus Holse as Chief Executive Officer from 2 September, and Wills Towers Watson has selected Carl Hess as the company’s new President and next Chief Executive Officer.

Elsewhere, Catherine Cooper has been named director of business development, Asia, for global provider of tech-enabled risk, benefits and business solutions, Sedgewick, global reinsurance placement platform Supercede has hired Aydin Betez to lead the development of its cloud-based digital ecosystem, and Partners& has appointed Ross Dingwall as Managing Partner (Scotland), charged with expanding the company’s footprint in the North of England and Scotland.

Service Certainty Motor Experts diversify into Home Claims

The sudden drop in claim volumes, at its peak <90% drop of pre-lockdown levels accelerated a strategic ambition to diversify the business into Property claims. This decision has proved hugely successful, with claims from this sector now representing twenty percent of the overall business.

The traditional method of assessing Property claims came to an instant halt. Insurers required the need to remotely validate claims, quickly.  Service Certainty immediately launched a Home Claims triage proposition, proving critical during the first lockdown, creating a rapid increase in work, a five-fold growth in customer self-service product volumes.

As restrictions were eased Insurers sought a field-based solution to compliment their new home-working operating model.  Service Certainty diversified its crowd-sourced networks of professional’s photographers (Pro’s) who went the extra mile during the pandemic, adapting to both COVID-19 guidelines and capturing home claims damage from the ground, supported by the launch of a new Drone Pro’s service, capturing media from the sky.

These competitive, professional services have continued to grow month-on-month based on the quality and speed of their work, creating an invaluable ability for clients to remotely inspect property claims.

This remote inspection model was previously not explored with any great interest by Insurers, with the pandemic creating the need to adopt a new operating model which could deliver for customers and optimise their in-house expertise.  Now an established part of their client’s proposition and generating an overall thirty-fold increase in work volumes, from a standing start in March 2020.

One of their Specialist Property Claims Clients stated.

As Covid-19 restrictions eased the Service Certainty Pros have helped us validate many claims, often arriving within hours of notification. The Pros have provided the detailed photographs and video surveys enabling us to review and diagnose the cause of damage and initial validity of claims, whilst minimising physical customer contact and strictly adhering to all current government guidelines.”

GT Motive and Service Certainty imageproof develop integration to simplify processes for bodyshops

GT Motive & Service Certainty have integrated whereby Bodyshop’s will be able to seamlessly transfer photos captured by Service Certainty imageproof (self-service web-app or network of professionals) instantly into the GT Estimate.

Whilst COVID-19 (coronavirus) outbreak has increasingly impacted on all our lives and work, it has also created opportunity to forge new relationships and integrations.

GT Motive continue to offer a free estimating solution and now Service Certainty imageproof users in the UK can benefit due to this new integration.

Both businesses are committed to working innovatively to continue to support the UK Bodyshop Industry with technology that is easy to use, cost effective, accurate and efficient. Cloud based software supporting the current remote working conditions.

The integration will be provided free of charge as a benefit of customers of both companies and follows the aim to ease the life of the Bodyshop’s through integrations and collaboration.

“By joining forces, we can provide an integrated solution that can streamline the process from damage notification to estimating, reducing the overall claim cycle with direct impact for insurers in their customer satisfaction. By integrating with Service Certainty, we can bring further efficiency and simplicity to our customers through working with the market leader in image capture solutions. “ – David Vella – Business Development Director

“We pride ourselves as being the market leading independent media capture solution, we are always open to new integrations of mutual value and we are thrilled to be supporting this initiative from GT Motive, supporting the UK Bodyshop Sector through such a difficult time.” Graham Clarke – MD , Service Certainty

NBRA calls for support from motor insurers

The National Body Repairers Association has published an open letter to work providers calling for increased COVID-19 terms.

Executive Summary

In response to the concerns expressed by many repairers about the losses they are experiencing when supporting customers under Covid-19 conditions, the NBRA has considered the adequacy of the existing concessions made by some work providers to the contract terms. As a result, we are proposing a set of temporary changes to which we will be recommending repairers in order to allow them to retain a small operating margin throughout this period, accepting the losses already incurred.

Current Situation

Since 23rd March when Covid-19 social distancing measures were increased, motorists have used their cars less, accidents have decreased and repairers have found it increasingly difficult to stay open due to low volumes, supply chain interruptions, and employee safety.

Up to 74% of repairers have since either temporarily closed their doors or are operating a skeleton service, doing little more than accepting instructions.  The remainder of repairers who decided to attempt to trade through the covid-19 lock-down are arguably providing an essential service to both work providers who need assistance for their customers and also to those “key workers” needing their vehicles fixed in order to serve the public on lock-down.

However, it is clear that in most cases for these repairers still trading, standard “contracted terms” are wholly insufficient to allow them to break-even, let alone make a profit.  This should come as no surprise, as the model for repairers for many years has been high volume / low margin, which doesn’t work with less than half the normal volume of repair.

The industry has operated on sub 5% operating profits for the past 25 years and therefore it is no surprise that very weak balance sheets is the norm.

If a repairer is running below 60% capacity, they are likely to be losing money as their marginal profits are not enough to cover fixed costs (even with staff furloughed and the government paying 80% of their wages).  Some repairers had been able to break even due to work in progress and accidents that happened before the lockdown was announced on the evening of 23rd March, but with the lock-down measures extended to at least 7 May, much of this work has dried up.

Repairers are left with work volumes reflecting an accident frequency that has reduced by between 70 and 90% and even then, many policyholders are struggling to release their vehicle for repair or are worried about paying the excess.

Work Provider COVID-19 support to Repairers

Work providers have offered a range of COVID-19 support solutions to assist repairers with this situation and also to protect their policyholders from infection.  These range from Covid-19 cleaning charges (for customer car and courtesy car) of between £0 and £80, labour rate increases of between £0 and £7.50 per hour.

Some have recognised that the wholesale terms available on parts to repairers have reduced and have accordingly reduced the parts discount they require – this has been the most beneficial concession.  This COVID-19 support, ranges from a benefit to the repairer of between £10 and £166 per job with Allianz providing the greatest support followed by Direct Line Group in our opinion. The average is £90 per job.

Adequacy of COVID-19 support to repairers

The NBRA has worked with repairers to understand the true cost of providing an essential service during Covid-19.  This of course will vary from repairer to repairer based on a number of factors: –

  • Proportion of work they have compared to fully efficient
  • Cost of overheads
  • Whether they own premises or not
  • The ability to partially offset or reduce overheads
  • The ability to furlough staff
  • The contracts and concessions received (as mentioned above)

But if we use an example of a typical (real) repairer with 15 Technicians, running at 30% of normal volumes, who has offset his business rates overhead and furloughed a proportion of staff, He is likely to be running at a monthly loss of £16k or £326 per job (£12k or £245 per job with typical Covid-19 support concessions)

At 20% efficiency (i.e. a repairer operating with 80% less work than usual) this moves to a loss of £22k and £687 per repair (£20k or £606 per job with typical Covid-19 concessions)

Clearly these levels of loss are unsustainable especially as the lockdown extends to at least 8 May and lots of uncertainty.

How could we address this?

If we accept that repairers are providing an essential service to policyholders through this period, we also must accept that they should not be required to operate at a loss.

Contracted rates together with existing work provider concessions are falling way short of what is required for a repairer to break-even let alone make a typical margin of c. 5%.  We believe that the few who are trading should be free at this stage to charge the rates necessary for them to make an operating profit.  It should be in effect an “open market” with businesses setting their own rates and work providers negotiating terms with their network on an individual basis.  Though, we realise this would be disruptive and generate a lot of unnecessary work and meetings at a difficult time.

A simpler approach would be for the NBRA to publish a set of additional temporary charges applicable to repairs at this time that genuinely would account for their lost margin and create a fair temporary mechanism of “exceptional charges” during the Covid-19 period and perhaps beyond.  An element of this would be a labour uplift accepting that labour cannot be as efficient during Covid-19 due to distancing, but we accept this is a sensitive and emotive subject, hence it being only a proportion of the mechanism.

Alternative approaches could be:- a) A temporary change to GTA Rates b) A single “one off” Covid-19 charge of c.£400 or c) Direct cash injection (similar to Progressive in US)

Covid-19 Charges

NBRA has engaged with a number of repairers throughout this period to understand and calculate how their businesses have been affected.  The attached table (Recommended Guide to Covid-19 Charges) provides a summary output of the differing charges that will be required to allow trading repairers to operate on a solvent basis.  NBRA would encourage repairers to use these.

Existing Underwriter Concessions

NBRA would be encouraging repairers to either stick with existing underwriter concessions or replace them with the temporary Covid-19 charges in (Schedule 1) below.

The Underwriter’s Challenge

NBRA understand that work providers are in no way to blame for Covid-19.  We also understand that most will have incurred costs from getting employees set up as home workers and more diversified work providers will continue to sustain significant losses in other underwriting classes such as Travel and Business Interruption in addition to Property from recent floods.

NBRA also understand that underwriters will be cautious about spending extra on Motor Claims as there will inevitably be those who take benefits from the Covid-19 situation and transform claims savings into price reductions to gain future market share.  On top of all this there is a small risk of government intervention diverting savings directly back to consumers.

Notwithstanding the above, Motor underwriters are expected to make a conservative £1 billion in claims savings unexpectedly through Covid-19 whilst the Repair Industry is looking at considerable losses and closures.

NBRA has realised that it is almost impossible for underwriters to step forward and offer the necessary terms repairers require at the moment without fear of the above risks and losing competitive advantage, even as we suspect, many wish to do more for their supply chain partners.

The Repairer Dilemma

Whilst many will complain, many repairers will concede that they have a good working relationship with underwriters now and that improves each year.  Many repairers and repairer groups are highly dependent on the relationships and do not wish to individually create problems or damage genuinely good relationships.  However, no business wishes to or should attempt to operate at a loss.  Doing so over a prolonged period or remaining closed will be very damaging to an industry that was recognising under-supply, underfunding and skills shortages pre-Covid-19.

Example Repairer Model – (A real bodyshop’s numbers)

Recommended Guide to Temporary Covid-19 Charges (Schedule 1)

Charge Value of charge to add Rationale
Reduce Invoiced  Parts Discount by 10% Currently repairers are not enjoying the discounts that they would normally pass on to underwriters.  This is due to having to use suppliers that they don’t have agreed terms with and in many cases having to pay up front as they have no credit in place.  This has a value of approx. £75
Audatex uplift £36 At 25% of normal volume, due to software charges being based on past volume, Audatex cost per assessment has increased by £36
Disinfect cleaning of courtesy car £20 Courtesy car out £10, courtesy car back again £10 (inc. materials)
Disinfect cleaning of customer car £20 Customer car in £10, customer car return £10 (inc. materials)
Collection and delivery £60 “Drive-ins” have reduced by 25 percentage points, plus C&D in many instances has to be done by truck due to two drivers being unable to be in the same car at once
Parts collection (where applicable) £100 On ¾ of jobs.  Based on cost of (man + van + insurance + fuel) on 2 cases per day.  (Or courier charge + 10% if possible)
Labour inefficiency Cocid-19 uplift £4 / hr Where staff are on site, they need to social distance and clean vehicles as they hand over to other operatives, clean shared tooling. This has a value of approx.. £68 on an average job
Mobility £8 / day up to max 10 days Whilst there are fewer jobs, lease car costs cannot be escaped.  This is based on £8 a day x an average K2K of 10 days (slowed due to Covid-19 challenges inc. parts). This has a value of up to £80
Overhead Contribution £100 Based on 25% of volume this is the remaining gap in contribution to cover overhead costs not covered by the above individual changes

What jobs would this apply to?

Applies to any job instructed post 21st March 2020, but not yet invoiced up until end May. At which point this will be reviewed.

Sliding Scale

NBRA propose that these temporary charges are scaled back proportionately (to be shared separately) in stages as work volumes increase based on data provided by Audatex on the percentage of claims processed vs. prior year. 

How will Work Providers react?

These charges have been considered not for “profiteering” from the current situation, but simply as a guide to help repairers know what to charge in order to trade at a modest net margin.

NBRA believes that it will be difficult for underwriters and Engineers to argue with these charges which are reasonable and fair.

NBRA understands that some charges will be accepted, some will be rejected.  Where accepted NBRA will be applauding the work provider and where rejected the NBRA will be challenging the work provider for an alternative.

We do not believe that any repairer should worry or be penalised in the future for asking what is essentially the minimum that any trading business should ask for.

Timetable

Date Phase Detail
21 April Work Provider Engagement Share with work providers asking for commentary / feedback
22 April Media Communication Communicate what we aim to publish
23 April Amendments Make any amendments based on feedback
24 April Publish Charges Make charges available to repairers and recommend that they are added to repair jobs

GT Motive and DAC holdings enter a new stage of collaboration in the UK

Madrid 3rd April 2020

After 4 years of working as an exclusive distributor and having successfully introduced the GT Estimate brand into the UK market, DAC holdings have agreed to redefine the relationship between themselves and GT Motive.

DAC Holdings will become Jarvis Business Solutions Ltd. and also a GT Motive integration partner which allows them to use GT Estimate as a fully integrated product within its Jarvis workflow platform.

GT Motive UK Ltd. will take back the direct distribution of all GT Motive products and solutions under the direction of David Vella.

Both companies are committed to bringing choice and innovation via alternative solutions to the UK market.

The Workshop Professional of the Future – Fleet interest in fixed cost motor insurance

Fleet interest in fixed cost motor insurance is on the increase because newer vehicle technologies are raising premiums.

That’s according to leasing company Arval, which cites a report from the Association of British Insurers that shows repair costs in the first quarter of 2019 were the highest on record. 

This is attributed to features on new vehicles that are costly to repair, such as advanced driver assistance systems and sophisticated headlight designs. 

Arval UK head of insurance Ian Pearson said: “There is little question that the advanced equipment being fitted as standard to even mainstream vehicles is having an impact on repair costs which, in turn, is starting to have an effect on premiums.

“While we are in favour of the fitting of most of these devices, which are generally designed to promote safety, they do make the repair process more expensive in terms of both parts and the time taken to fit them.”

According to Pearson, the situation is having an impact even on fleets that employ advanced and successful risk management strategies, and therefore have low accident rates.

He said: “There are fleets that work very hard at controlling their risk and have improved safety and reduced their premiums as a result but even they can have little influence over repair costs. 

“Of course, those fleets that already have a poor claims record are being even more adversely affected.” 

Pearson claims that these factors have led to an increase in demand for fixed price insurance products such as Arval’s own Total Care, and that these could form a blueprint for a new fleet approach to insured vehicles.

He said: “Certainly, we are seeing interest from fleets growing in Arval Total Care. It does mean a shift from the normal fleet insurance mindset but there are a whole range of advantages to securing cover in this way. 

“It is our belief that it represents something of an innovation and that other companies in the sector may soon start to offer something similar.”

Source: Business Car
 

UK commercial insurance market enters more disciplined phase

The commercial European insurance market is at the cusp of a more consistent shift towards firming market conditions that will have a strong impact on buyers, a new report by Aon has claimed.

The report, Navigating a Changing Insurance Market, released today (June 4) by Aon, has found that this shift is being driven by insurers’ responses to high-levels of manmade and catastrophe losses, increased operational costs and evolving buyer demands and risk exposures.

In 2017 and 2018 alone, global natural catastrophe losses reached record levels of $247 billion. This unprecedented rise in catastrophe claims has been coupled with increased uncertainty surrounding future losses, as buyers place greater importance on evolving exposures such as reputational risk, intellectual property, cyber and non-damage business interruption, where there is limited historical data and fewer mature risk models.

For commercial insurance buyers, in certain areas of the market, this shift in market conditions is likely to mean increases in rates, capacity constraints, tightening terms and conditions and a more critical attitude from insurers towards risk selection and risk management practices.

The extent to which buyers are experiencing these effects varies from country to country across Europe and by line of insurance. The report has found that there are more challenges where buyers are not providing enough underwriting information or allowing sufficient time for their renewal process.

Conversely, if a business has a good loss record, supporting data, proactive risk management programmes and a thought-through strategy, there are still deals to be done in the market. In the UK, the commercial insurance market is entering a more disciplined phase, and the report finds that buyers will need to focus on providing sufficient risk information and allowing enough time for the renewals process.

Directors & officers, marine cargo, and professional liability are the business lines most impacted by the changing market, while food and waste are challenging sectors for property and business interruption, with a focus on risk management quality.

The 2017 Grenfell Tower fire has triggered challenges for professional liability, leading to rate rises in design, construction and other similar professions.

Aon’s Hugo Wegbrans, chief broking officer EMEA, said: “Commercial insurance market conditions have been very favourable for buyers in the past decade, underpinned by a prolonged soft market period.

“This, along with continuing loss activity, has led to a consistent change in insurers’ attitudes with a renewed focus on profitability. How we respond to the changing market as an industry is critical.

“The market is firming, and buyers need to rethink their approach, ensuring there is an increased exchange of information between parties throughout the year to avoid surprises at the time of renewal.”

Airmic, Aon, Commercial European Insurance Market, Navigating a Changing Insurance Market, Report, Catastrophe, Insurance, Reinsurance, Risk, UK

Source: Intelligent Insurer

Almost half of home owners in the UK fail to insure outside possessions in their gardens

Nearly half of home owners in The UK do not consider garden contents when buying home insurance, new research suggests.

Three quarters of people value garden items at less than £5,000 and those in Northern Ireland are most likely to not include their garden possessions, according to the study by AA Insurance.

It points out official data published by the Office for National Statistics shows that there were 595,000 thefts from gardens in 2018, up 23% from 2017 and it says that just because possessions are outside, it does not mean they should not be insured.

Overall 48% of home owners do not consider the items in their garden when buying home insurance and 64% of gardens in Northern Ireland could be underinsured as they did not consider any aspect of their garden contents when buying their home insurance.

More than half of home owners in London, some 54%, and 53% in the North East of England also did not add their garden items to their insurance.

Three quarters of the 15,500 strong AA-Populus Panel who have both home insurance and a garden believed that their shrubs, pots, garden tools, chairs, tables and garden toys would cost no more than £5,000 to replace.

More expensive gardens could be found in Eastern England, the South West and Wales where more than one in 10 believed their garden contents costs between £5,000 and £10,000.

Separate AA research shows that 36% of households plan to spend more than £150 on garden tools and 9% spending £900 on a hot tub this summer.

‘As a nation we love our gardens, and we spend a lot of our hard earned cash improving them each year. Garden theft has seen such a sharp increase last year so it’s good to protect yourself,’ said Janet Connor, managing director for AA Insurance services.

‘A few minutes spent in the garden will give a good idea of how much you’d need to spend should the worst happen. When faced with filling out an insurance application, the term contents can be misinterpreted to just the things within the home. Even though it’s outside, you should still insure it,’ she added

Source:  Property Wire