Douglas Shillito
This week, Lloyd’s announced an aggregated market loss of £2bn for 2017-the first loss for six years. Interestingly, at the same time, Lloyd’s said that the whole London Market had agreed to mandate the use of PPL electronic placement, with a sliding incentive scale by quarter-the new PPL Ltd chair is Bronek Masojada, chief executive of Hiscox. The high cost of doing business in the London Market is a key competitive factor, and also has an significant impact on the combined ratio, particularly in a heavy claims year.
The Brexit transitional period was agreed by the EU and there was a statement about financial services inserted at the last minute-the future access is likely to revolve around some form of equivalence. The British Insurance Brokers’ Association (BIBA)reached an agreement with the Worldwide Broker Network (WBN) to ease Brexit concerns for UK brokers with EU clients. The Financial Conduct Authority (FCA) published its Approach to Supervision and also its Approach to Enforcement and signed an Enhanced Cooperation Agreement on FinTech innovation with the Australian Securities and Investments Commission (ASIC). The Association of British Insurers (ABI) and leading UK insurers welcomed a Bill to reform the law relating to whiplash claims and the way in which the personal injury Ogden Discount Rate is set. Insurance Europe developed a template that could help companies meet the obligation under the General Data Protection Regulation, and also published updated country fact sheets for Argentina, Brazil, India, Indonesia, and Turkey, highlighting a number of protectionist measures. The Chartered Insurance Institute is to move to modern offices in Lombard St, London which will be nearer the “the centre of things”. The Institutes in the US and the International Insurance Society (IIS) announced a strategic affiliation.
InsurTech investment in Europe surged last year according to wide-ranging Accenture research, whilst a report – The Rise of Artificial Intelligence: Future Outlook and Emerging Risks, by Allianz Global Corporate & Specialty (AGCS) outlined both the benefits and emerging risk concerns around the growing implementation of AI in society and industry, including in the insurance sector. Guidewire’s Underwriting Management solution was deployed by Mitsui Sumitomo Marine Management (U.S.A.) for commercial lines, and Gradient AI, a Milliman predictive analytics platform, now aids management of workers’ compensation risk. SSP Keychoice extended its long-term relationship with the RAC for a further five years.
Aviva backed down on a preference shares cancellation plan and hopes the decision “goes some way to restoring trust”. Pool Re welcomed the UK Government action to close the terrorism insurance gap. 2017 results included Atradius (a strong result), IGI (profit dip but growth in GWP), Vienna Insurance Group (reaped benefit of expansion into CEE countries), China Life (growth and profit increase) and Ping An (net profit up 43%). There were senior appointments at LIIBA, Liberty Specialty Markets(LSM), Paraline, PartnerRe, Thomas Miller, TMK, and Zurich.
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