Global Insurance Trends 04.06.2019

Douglas Shillito

This week, Allianz UK finally announced it is to acquire 100% of the general insurance business of Legal & General Group for £242m. The transaction is subject to regulatory approvals.

It is also to buy out the remaining 51% stake in LV General Insurance Group for up to £578m. The transactions, which are expected to be completed by the end of 2019, and the portfolios merged, will position Allianz as the number 2 general insurer in the UK with a 2018 combined gross written premium income of £4,029m and a market share of 9%, and establish it as a top 4 insurer in the UK personal home segment.

The highly competitive UK general insurance sector will also be watching for further details from Aviva next week on the proposed split between its P&C and life business in the UK. Aviva detected £80m in UK insurance claims fraud last year, down £10m on 2017, with whiplash reforms credited with the drop in motor fraud, but the value of liability fraud grew by 20%. Meanwhile, the Association of British Insurers (ABI) reported that the number of motor theft claims paid by insurers in the first quarter of this year were at their highest for any quarter since 2012, with a payment made to a car crime victim every 8 minutes. The cost of these claims rose by over 20% on the same period last year. The figures reflect rising vehicle crime, with Home Office figures recording a 50% rise in vehicle thefts over the last five years. The increase is in part being driven by keyless car crime, with hi-tech criminals being able to bypass keyless technology in as little as 20 seconds.

S&P Global Ratings published a report headed "Solvency II Gives European Insurers Room To Issue More Hybrid Debt, But Not Without Risk To The Ratings". Mutual/cooperative insurance CEOs have emerged as the top leaders in the German insurance market according to analysis undertaken by Versicherungswirtschaft, reported mutual trade association AMICE. Assessing criteria such as leadership style, innovation and external perception, the research placed leaders of the mutual/cooperative insurance sector firmly in the first, second and third places in a “performance check”.

Aegon Growth Capital Fund purchased 25% of the shares in InsurTech service provider RISK, and Geospatial Insight launched its new product PropertyView, which derives critical property characteristics from satellite imagery. Marsh reported that the number of captive insurance companies writing third-party business is growing at double-digit pace as the digital era expands delivery solutions. The North Atlantic hurricane season officially got underway yesterday and RMS reviewed possible scenarios. Airbus Aerial and Swiss Re Corporate Solutions announced a collaboration that will help companies efficiently identify flood risks and more accurately predict weather-related flood damage.

Swiss Re Capital Markets successfully closed a $100m Series 2019-1 Principal At-Risk Variable Rate Notes transaction - the first catastrophe bond issued under Rule 144A that utilizes the new insurance-linked security (ILS) regulatory regime in Singapore. IGI became a member and network partner of GBN Worldwide.

Full articles on the above topics may be found on the Insurance Newslink and Financial Newslink global trends database services at www.onlystrategic.com