ABI and Biba at odds over ring-fencing insurance taxes for flood defences

By Jen Frost | News | 14 November 2019

Insurance trade bodies have found themselves at loggerheads over whether part of insurance premium tax should be ring-fenced for flood defences.

On Tuesday British Insurance Brokers’ Association executive director, Graeme Trudgill urged the government to commit to spending money collected from the controversial tax on flood defences.

Biba’s call comes as the north of England is battling flooding, with PWC suggesting insured losses could hit £120m, or potentially rise further if rainfall continues.

Trudgill said: “In 2016, the rate of IPT included on every home insurance policy increased from 9.5% to 10%, and the government said that this increase would be ring-fenced to pay for flood defence and resilience measures.

 “With a whole host of spending commitments made by each of the major parties already in this election campaign, it is vital that this earmarked pot of money is not absorbed into general government revenues and spent in other areas.

 “The devastating effects of flooding upon both individuals and communities are clear, and our members help them recover and rebuild when the worst happens. Brokers tell us how important the protection afforded by flood defences is to their customers and to the wider economy.

 “Defences save the UK around £1.1bn each year in flood prevention and aside from the considerable human importance defences offer, they represent excellent value for money.”

IPT raise risk

However the Association of British Insurers has raised concerns that by connecting IPT and flood defences, the government could feel it has free rein to continue increasing the tax.

An ABI spokesperson told Post: “We believe that linking IPT and flood defence investment could give government further future justification for raising IPT. We continue to stress the need for a programme of sustained investment in building new and maintaining existing flood defences, targeted to areas of known flood risk, that reflects the increasing threat of flooding in UK.”

IPT, which the ABI has labelled a “stealth tax”, is currently at 12%.

In 2018 to 2019 alone, IPT raised £6.19bn, according to data from HM Revenue and Customs, which was more than the taxes on wine, spirits or betting and gambling.

In October the ABI called for a cut in IPT in the budget, which had been expected on 6 November but was later cancelled.

Huw Evans, ABI director general, said at the time: “IPT has doubled to 12% since 2015, and responsible people deserve a break. This tax hits people on lowest incomes the hardest, as it applies to products most people need, or are required to have, such as home and motor insurance.

“Our rate of IPT is the seventh highest in Europe and hits our international competitiveness at a time when the UK needs to be making itself more globally attractive.”

Rising Star: Katie Williamson, Horwich Farrelly

By Katie Williamson, trainee solicitor, Horwich Farrelly | Opinion | 14 November 2019

While working at a personal injury law firm, Kate Williamson became interested in what cases were like from the insurer's side and is now on her way to qualifying as a solicitor at Horwich Farrelly.

CV

2016 to present

Trainee solicitor, Horwich Farrelly

2014 to 2017

Training course, Association of Cost Lawyers

2013 to 2016

Cost Lawyer, Winn Solicitors

2009 to 2013

Law degree, Northumbria University

How did you get into insurance?

I started out working for a claimant personal injury firm and I became interested in the insurance side of things by trying to look at cases from a defendant or insurer point of view. That led me to apply for a role within the costs department at Horwich Farrelly.

What has been the biggest challenge in your career to date?

Studying to qualify as a cost lawyer and working full-time was challenging. I had to ensure that I managed my time well in order to be able to balance working with studying.

What would your advice be to other newcomers to the industry?

Anything is possible if you work hard and put your mind to it. Don’t be afraid to share ideas. Also, there’s no such thing as a stupid question.

Do you have a mentor and what have they taught you?

I don’t have a formal mentor but I have a couple of people I consider to be my mentors: Anna Poynton, a partner at Horwich Farrelly, and Nicola Critchley, who heads the costs team. They have given me so many great opportunities to develop my career and have encouraged me to push myself out of my comfort zone.

Where do you hope to be in 10 years?

I hope to have qualified as a solicitor and to have continued to develop my career at Horwich Farrelly.

What achievements are you most proud of?

Securing a training contract: it’s been a long time coming, but I’ve got there in the end.

 

“Katie has quickly established herself as a technical expert in costs and has become an indispensable member of the team. She’s one to watch.”

Nicola Critchley, partner and head of costs, Horwich Farrelly

Industry responds to 'jaw-dropping' behaviour at FCA headquarters

By Harry Curtis, Pamela Kokoszka | News | 13 November 2019

The insurance industry has reported mixed responses to reports of “shameful” behaviour by staff at the London offices of the Financial Conduct Authority.

In a letter to staff published on the regulator’s internal website and since published in excerpts by the Evening Standard, chief operating officer Georgina Philippou called out the behaviour of a “minority of colleagues.”

Alleged misdemeanours included “leaving cutlery and crockery in the kitchen areas, overflowing bins, stealing plants and charging cables from desks, catering and security teams being subject to verbal abuse, colleagues defecating on the floor in toilet cubicles on a particular floor, urinating on the floor in the men’s toilets and leaving alcohol bottles in sanitary bins.”

Philippou wrote: “I did think long and hard about whether to disclose all these behaviours because they are so distasteful and shameful but keeping quiet has not got us far in terms of changing behaviours. This kind of behaviour is unacceptable and will not be tolerated here.”

Responding to the revelations, one broker said: “It’s ridiculous. It’s unbelievable. Where is their governance regime? It is a bit worrying when we have an international regulator suffering from ‘toiletgate’.”

The broker hastened to add: “Every one time I have been in the FCA it has been very clean and organised.”

However, Robert Marshall, chairman of Trident Insurance said the regulator should focus on addressing other issues and that bad behaviour is to be expected within organisations.

Marshall said: “There’s always going to be bad behaviour. I’m not defending them, but it just depends how bad it really was. It always seems to make something out of nothing, the FCA.

“It’s got a lot more things they should be addressing than reported bad behaviour. What is bad to you may be perfectly OK to me, and vice versa.”

Marshall was critical of the decision to write the letter, adding: “It’s trying to show that it’s addressing an issue, but it doesn’t say how many problems have been registered, it doesn’t say if it’s continuous.

“If it said: there have been 550 verbal attacks or things like that, it shows there a bit oversensitive if nothing else.

“That is what happens in an office sometimes. Everybody exaggerates the damage that they’re being done as if it’s politically correct to say you offended my human rights and that kind of sh*t. It’s just an issue that happens. You cannot stop bad language in an office.

“I don’t think the FCA has done itself any credit by saying what it’s said. But then it never does.”

“Jaw dropping”

Branko Bjelobaba, a compliance consultant, called the revelations “jaw dropping” and said: “Those that lead the financial services industry should uphold good manners.”

He continued: “The FCA pays very decent money to its staff and they’ve got a purpose-built building just for them so how all that can happen is really odd.”

“If it’s expecting people in financial services to stand up and be honourable and accountable, then that should start at the FCA.”

Bjelobaba highlighted the disposal of alcohol bottles in sanitary bins at the regulator’s offices: “Drinking during the day and putting the bottle in a sanitary bin suggests that there is a problem that the FCA should be looking at. Even if it can’t identify the individual, it needs to put out something that says, ‘we’re happy to talk to you.’”

Mike Cranny, another compliance consultant, voiced sympathy for the regulator over the leak.

“I feel very sorry that the reputation has been damaged by it,” he said.

“The move from Canary Wharf, which is quite a posh area, to the current place, which is nowhere near as posh – they could well had staff problems as a result of it.

“High turnover”

“They always had a relatively high turnover, because if you work at the FCA you can easily get another job anywhere.

“I feel sorry for Andrew Bailey because, as previous bosses of the FCA go, he’s a caring person. They’ve had some great people with big egos in the past but he’s been the driver behind the work on vulnerable customers and the way people in debt are treated. He’s been a positive force.

He added that, as a result of the revelations, the industry’s confidence in the regulator could be shaken but that “it will be forgotten anyway”.

“Larger organisations from time to time have problems, staff problems, and I feel sorry for them because it doesn’t come off very well on them.”

“Georgina Philippou says she thought long and hard about whether to write the letter but keeping quiet failed to prompt any change in distasteful and shameful nature of colleagues behaviour.

“They have to set a very high standard because the senior managers regime, which is coming out on the 9 December, imposes a fairly high regime on insurance brokers and other regulated firms.

“For a very long time FCA has been going on about culture being important. While it’s not a regulated firm itself, it tries to apply the regulation to itself as it applies to others.

“It’s really sad because the FCA has improved enormously over the years. They are more helpful on the phone, more polite and they return phone calls and all sorts of things, whereas 10 years ago, they were difficult to deal with. Arrogant and so on.”

An FCA spokesperson said: “There has been a small number of incidents of bad behaviour towards our colleagues and building.

“We have a duty as an employer to highlight this sort of poor behaviour and our senior management are very clear it is simply unacceptable.

“We value all of our staff and it is only right that we call out poor behaviour when we see it. Judging from the feedback we have received on the article, our staff agree.”

North of England floods could cost industry £80m to £120m: PWC

By Jen Frost | News | 13 November 2019

Flooding in the north of England could cost insurers between £80m and £120m, PWC has estimated, though this could rise.

More than 500 properties have so far been flooded, with more at risk as further rain is forecast.

1200 households have been evacuated.

Mohammad Khan, general insurance leader at PWC, said: “This is clearly a very difficult time for those who have been impacted by the floods. However, the UK insurance industry is better prepared for the floods that have occurred and is responding as quickly as possible to ensure that affected policyholders are having their needs met.

“Due to the number of significant floods that have unfortunately occurred since the flood in 2007, the industry is much better prepared in helping affected policyholders quickly in dealing with this extreme weather.

“Although it is still early to estimate the full losses from these floods, the losses to date could see the insurance industry paying out between £80m and £120m in claims for both people’s homes and affected businesses. This estimate could rise over the coming days depending on how much further rain falls over the rest of the week.”

Thanks to Flood Re and competitiveness within the home insurance market, household policyholders should expect modest price increases, PWC cautioned, but some who shop around may be able to match their current premium.

Khan added: “Currently the household insurance market is very competitive with many insurers trying to grow their share of the sector. These firms are often writing premiums for new policyholders at a loss to bring in new business despite household insurance claims costs rising in recent years. Given the competitiveness of the sector, non-flood affected customers who shop around may be able to match last year’s premiums.”

The North of England has been battling floods since last week, following heavy rainfall.

Loss adjusters have been attending affected areas, while insurers have been working to assist policyholders and local communities.

Gallagher boss Simon Matson apologises for 'insensitive comments'

By Emmanuel Kenning | News | 13 November 2019

Simon Matson, UK CEO of Gallagher, pictured, has said sorry for the “insensitive comments” he made which came to light in the staff and business poaching court case the firm lost to Ardonagh this October.

At the end of the case Ardonagh chairman John Tiner hit out at the “abusive and racist language used by the claimants” which the case had revealed.

Gallagher had sought £9m from Ardonagh in a legal battle that centred on the departure of four energy insurance brokers who left Alesco for Ardonagh-owned companies in 2017.

All bar one of the claims were dismissed by High Court judge Mr Justice Freedman who also awarded legal costs to the defendants leaving Gallagher to foot the bill to the tune of £3.1m.

During the case it was revealed that Matson had called Nawaf Hasan, formerly an Alesco team member, a “complicated fat arab” during a Whatsapp exchange with the then Alesco chief operating officer, Gary Lashmar following Hasan’s resignation.

At the time, Matson was CEO of Alesco.

Lashmar responded: “And a very greedy one” with Matson responding he would like to “lose all of him [Hasan] but the money”.

When Matson took the stand to give evidence he was challenged over the use of the word “c*nt” by his senior team to describe outgoing employees.

In his testimony he also denied understanding a reference to “awaiting 72 virgins”, made by Gallagher international commercial director Vyvienne Wade in an email exchange.

Wade was responding to an email in which Matson said they “definitely have places reserved in heaven”, which he confirmed referred to efforts to retain Hasan.

In today’s statement Matson said: “I am very sorry for the insensitive comments that were made by me and other individuals, which absolutely do not reflect the culture within our organisation.”

He argued there was a strong and positive culture at Gallagher highlighting “exceptionally high scores our colleagues gave for important cultural indicators such as trust, respect, pride, diversity and advocacy” in the firm’s annual engagement survey.

He noted these scores had all increased in the last 12 months.

Sue Langley, non-executive chairman of Gallagher’s UK Holdings Board, disclosed that it had undertaken a “fundamental review” with input from external experts when the matter first came to light six months ago.

“At Gallagher we adopt the highest standards to promote an inclusive culture, and this will remain a priority for the board,” Langley stated.

“We are committed to working in partnership with the market to cultivate a positive, diverse and inclusive insurance industry and we will be appointing a new head of CSR to work with our existing team to build momentum still further, internally and within the wider insurance market.”

Following the much publicised case, the Telegraph had reported that Hasan had demanded an apology: “Imagine how it felt to read grossly-offensive racist and Islamophobic slurs from former colleagues? I cannot see how they can justify their behaviour. They said they regret the language when they were exposed but they need to show real contrition. They should apologise to me, for a start.” 

Pen Underwriting promotes Michelle Bree to COO

By Emmanuel Kenning | News | 13 November 2019

Pen Underwriting has promoted Michelle Bree from director of operations to chief operating officer, effective 1 December.

Bree will also be joining the board, subject to regulatory approval.

She joined Pen from Accenture as a programme manager at the start of 2015.

According to the firm she spent three years leading its integration and operational change bringing together 12 MGAs into one business.

Bree was promoted to her current role in July 2018 becoming part of the executive leadership team.

She took on most of the responsibilities of Pen’s departing COO Matt Unsworth who left the business for a new role at Aon. The COO role has been vacant since then.

Jonathan Turner, CEO of Pen Underwriting, said: “Michelle’s strategic vision, track record in translating operational objectives into actionable plans and ability to lead teams to deliver complex and large-scale projects is second to none.

“I’m confident Michelle will make an excellent COO as well as being a valuable addition to the board.”

Interview: Trak Global CEO and co-founder Nick Corrie

By Jonathan Swift | Interview | 13 November 2019

A decade into its journey, Trak Global is finally ready to break the US on the back of an acquisition and £40m plus private equity raise. CEO and co-founder Nick Corrie tells Jonathan Swift about why he prefers to get on and do things quietly than spout 'power point telematics at events, and a bounty of patents mean it is well tooled for a trans-Atlantic assault.

It might not have made the headlines garnered by rival trans-Atlantic telematics businesses True Motion and especially Cambridge Mobile Telematics, but Trak Global, in the words of its CEO and co-founder, is now at the “starting line” in terms of having a crack at the US.

This might sound strange given the business is ten years old, but Nick Corrie comments that until recently it did not have the resources to try and break America, despite quietly establishing itself as “probably the biggest usage based insurance technology provider in the UK”.

But with the acquisition of distressed Canadian telematics business IMS and more recent investment from UK private equity firm Three Hills Capital Partners, Trak Global is very much ready for the second chapter of its growth.

Wind back to its origins and Corrie reflects on how his time working in claims, for credit hire company Swift Rent-A-Car, a business that was acquired by Helphire in 2005, set him on the telematics path.

“So we were chasing ambulances with vigour. And in 2007 I just stopped and thought if an insurance company knew about the claim before the ambulance chaser they would be able to save claim costs. So the journey for Trak started with that premise,” he continues.

Getting the bottle to do a start-up

“Eventually I got the bottle to do it in 2009, because it does take  a lot of bottle to give up a well-paid job and convince the family to put your savings into a start-up.”

The original plan was to design a technology platform that would allow insurers to know - in near real time – when a claim had happened. But that proved to be quite difficult, especially as Corrie puts it “for a poorly capitalised, non-invested start-up to go round the major insurers and tell them ‘what you want to do is this’”.

He continues: “And now looking back I wonder, ‘why did I ever believe we would be able to sell our goods to large global insurers?’ So by 2010 we pivoted in two ways.

“One, we started selling the core technology platform to what we now call future mobility and mobility providers, but back then were known as car hire companies; and that created a capital base to support us.

“And the other pivot was triggered by the fact that every time we went to have a conversation with a claims department we were frustrated that they did not seem to understand how the technology could be deployed. So we started [young driver telematics broker] Carrot. We basically used the money we made from selling connectivity to the world of mobility to fund it.

Corrie on which telematics model will win out

Nick Corrie breaks down the telematics market into one which is characterised by five different types of sensor models.

The first is the hard-wired professionally fitted boxes which he believes “underpin the UK market” and are aimed at those customers paying £1000 premium a year.

The second involves on-board diagnostic sensors that are sent by post and the customer plugs it in, which saves on the professional fitting cost.

In terms of mobile connectivity Corrie identifies two models here, one he calls ‘pure app’ whereby the phone becomes the sensor; and the second he labels “a half way house,” whereby you stick a dongle on the windscreen that links to the mobile device.

The final model involves getting data directly from the manufacturer, which he notes has “not got level of fidelity [to allow us] to do scoring”.

He adds: “We have deliberately taken a pragmatic view that we don’t know which one going to win [so we do all five]. We are pretty sure professionally fitted boxes aren’t going to win because it can’t; it has an economic disadvantage.

“We are pretty sure embedded technology with motor manufacturers isn’t going to win. But [alternatively] it is perfectly possible those could win because if you look at motor manufacturers, Tom Tom and the aftermarket sat nav providers should not exist. But they do because motor manufacturers have a tendency to over value their own tech solutions.”

In terms of Trak Global Corrie claims the business has half a million connections, the most nascent of which is motor manufacturers which is tiny.

However if you put apps and dongles together he estimates its business is split a third each between the other sensors models.

The birth of Carrot

“Things came full circle, and by 2013 people were looking at Carrot and going ‘so that is how you do telematics’ and asking if they could copy it; so we won some tenders and got some volume through that.”

The combination of the mobility solution – especially with a growing list of blue chip clients - and Carrot, meant that Trak Global began to get the credibility it desired from insurers leading to significant wins with the likes of RSA’s Smart Wheel offering and Zurich.

Which brings us to the end of chapter one, where Corrie confidently asserts Trak Global has a pre-eminent position in its home usage-based-insurance market, and the management are admiringly gazing over the Atlantic pondering: what next?

“We had been looking to break the US, but had always bottled out because each time we thought about it, we reckoned this is going to costs millions and we were under capitalised to do it,” Corrie continues.

“But we were generating cash and had a bit of scale, and at the point we really needed to do something to break the US, we saw IMS were in a bit of trouble. So supported by HSBC, which allowed us to borrow some money, we bought it out of receivership on an asset based deal.”

Corrie explains IMS was burning £3m to £4m of cash at the time it took over, was massively cash flow negative and was in a “real mess”, but adds “the basic core of the business was really good and solid”.

CV

2009 to present

CEO and co-founder, Trak Global

2005 to 2008

Director, Helphire

1996 to 2005

Board member, Swift Rent-a-Car

1991 to 1996

Flight Lieutenant, RAF 

The folly of a private chef

Among the expensive pitfalls Corrie points to at IMS was the fact it had five lawyers on the payroll, as well as a private chef.

“When we first went to meet before this all happened it had a private chef who cooked us lunch. But when the management came to meet us I rather pointedly got Tesco sandwiches just to let them know, ‘you can’t have a private chef in a business of your size’,” Corrie quips.

One of the major attractions for acquiring IMS was the number of patents it owned, 130, especially as this had been one of the expected barriers to Trak’s US aspirations.

“One of the things we thought about before we went to the US organically was patents. I was conscious about the fact it was a much more litigious environment and I was concerned about being a not so well capitalised player with lots of lawyers looking at us. It made sense to look at the patent landscape and I came away thinking IMS owned most of the relevant ones and whatever we planned to do would be heavily in breach of them,” Corrie reminisces.

“It made me pause, look at the IMS website and decide whether they are the kind of people who might sue me. And because it was a Canadian business, trading mostly in the US, I could not get any financials. It was really hard to work out if it was bigger or smaller than us if it ever did decide to sue us.”

The series of events that led to Trak’s acquisition of IMS – as with many deals – happened through a series of chance events that saw Corrie go from an extreme low to a new high in the matter of days; starting with an unsuccessful major tender that had proved very labour intensive.

Hobbies 

  • Riding bikes
  • Open water swimming  
  • Flying and generally being a plane spotter 

Five words to describe himself:

  • Passionate
  • Loyal
  • Fair
  • Tenacious 
  • Competitive 

A bad week gets worse … then better

“We lost it to IMS, but did not know it at the time,” Corrie comments. “We had this slightly miserable strategy day [in June 2018] were I said ‘we can’t go to US because of patents; and we just spent a fortune on a contract we worked six months trying to win, and lost’.

“We were feeling a bit miserable about our prospects and I went home and I had received an email from someone at IMS and I thought ‘I’m about to get sued too. This about to make a bad week get worse’.

“But what it was in fact was a message asking ‘do you fancy buying IMS?’ And I didn’t open it until later that night, but in it it said it had just won this contract [we’d bid for].

“So I got on the phone to the adviser and he came in on Monday morning and by September [three months later] it had gone pop. But we had got ourselves exclusively into the data room at that time so we were ahead of the process - and this is a $30m business that suddenly ran out of cash - and I am on the phone to HSBC asking for a sum of money, and in three weeks.”

Corrie reflects that there were quite a lot of people interested in IMS, helped by the patents it owned, including big insurers. Once inside he found what he describes as the “corporate hubris file” of previous offers and that the last one it had turned down was for several hundred million Canadian dollars, yet Trak got it for a tiny fraction of that.

In relation to the prospect of losing good staff through the sales process, Corrie comments: “We were in quickly enough – and I was virtually living in Toronto - which meant we could eyeball the decent staff and let them know there was equity, bonuses and a good life beyond this. We did a lot of town halls, talked to people and got them some new offices.

“We obviously lost some. There were some good people who I fought to keep and we couldn’t. But we kept most of those we wanted and some of those we lost we could not afford anyway.”

Private equity move

Having acquired IMS Trak Global moved onto securing the necessary funds for it to realise its full potential, and it soon found it was an attractive proposition for investors.

Not least helped by the procession of major deals that rivals had struck including Wunelli [bought by Lexis Nexis in 2014], Ingenie [bought by Qunidell in 2014 ], The Floow [invested in by Fosun and Direct Line in 2017] and Insure the Box [bought by Aioi Nissay Dowa Insurance Europe in 2018].

“We competed the purchase of IMS on 14 December 2018 and had toyed with the idea of doing a concurrent private equity process, but came to the conclusion we had too much turnaround stuff to do that it would kill us and we had enough capital to run and sustain the business,” Corrie continues.

“We were not worried about running out of cash, we were worried about the investment level we needed to bring the two businesses together, to really grow in the US and so on 7 January [2019] we started the private equity process. And we exchanged on the 30 June and went public on the 26 July.”

Commenting on the success of Trak Global and other telematics firms in finding investment, Corrie says: “One of the key reasons Three Hills invested [over £40m] in us is because large pools of capital are finding it harder and harder to find good homes where they get two to three times return that hasn’t got an edge in terms of a carbon footprint or another downside.

“Things like social media are now considered bad places to invest because of the harm it does; online gambling, pay day lending - there are lots of places you can make a ton of money but there is increased scrutiny.

“The PE guys are being asked more social and governance questions about where their money has ended up and so we were considered a massive tick in that outcome box because if we do a good job people crash less - and their insurance is cheaper.”

Under the radar

Reflecting on its standing today Corrie comments that if Post did a poll of readers to name top ten most successful telematics service providers that operate globally, it would not figure in the top 10.

However, he estimates that it stands third in the US, behind True Motion and CMT, and is the biggest in Germany through IMS’ relationship with Allianz.

CMT has certainly set the bar in terms of TSPs given its $500m investment from the Softbank Vision Fund, a number that Corrie is still trying to come to terms with. He estimates CMT’s EBIT is substantial driven out of its relationship with US insurance giant State Farm and that it must be given scale of Softbank’s investment.

“But wiser people than me have said the level of investment in CMT is more akin to it becoming a carrier than a TSP, because of its potential scale,” Corrie adds.

“It has one product, it never changes it. It is one size fits all, and so it does that one thing well at scale. If you read its internal press stuff at the time [of the investment] it has this pithy story of a billion cars being insured in the world of which only about 50 million have got tech. So the latent market is potentially 950 million vehicles which is why it might have won over the big picture thinkers. But [the figures] are hard to get [my head] around and when I go to the US they are all just as perplexed as me.”

In terms of other geographies outside the Americas that might interest the newly minted Trak Global, Corrie adds mainland Europe, especially Italy as the biggest overall market, is interesting because it has a free trade agreement now it owns the Canadian business IMS. Since car insurance has been mandated in Mexico that could be another territory it considers.

However, while he adds there are some “interesting things” in terms of telematics developments in the Far East, Trak Global plans to keep its capital focused on Europe and the Americas for the time being.

Telematics evagelists

Which brings the final and biggest question: when and if could telematics become a mainstream insurance product?

In response Corrie refers to one of his biggest bug bears, the telematics evangelists who turn up with regular occurrence at insurance events predicting the impending sensor revolution.

“I call this power point telematics,” he explains. “Where someone gets up at a conference and explains how it all works, but it is all bullshit. I prefer to build real telematics in the real world, which really benefits customers and has sustainability. I spend most of my time worrying about building a sustainable business. I don’t want to build something that is flash in a pan.”

He continues: “A lot of people have stood up at conferences and said ‘telematics is coming’ and in this self-serving consultancy and conference world they draw these pictures of how big it is going to be. But these things don’t take three years, they take ten. Most insurers believe over the next ten years they will have some sort of data sensor involved the pricing of their insurance.”

In terms of how it prefers to operate, Corrie concludes: “We’re not throwing around stuff on social media. I am bothered about hubris and I don’t want to be on every conference podium shouting about what we are doing. We just want to quietly get on with it.

“I wanted to be capitalised to have a crack at the US, and we have now got ourselves to first place on the starting line so we can now compete with True Motion and CMT. We’re in a world where we have the scale and reach to do that. And it is ten years of hard work but it is entry into a game, and that is all it is.”

Blog: Flood-damaged cars - are insurers missing a trick?

By Jane Pocock | Blog Post | 13 November 2019

Earlier this year parts of the UK were under water and serious flood warnings are becoming more commonplace, writes Jane Pocock, managing director, Copart UK.

It is understandable that homes and commercial property are at the top of the list when it comes to reinstatement, from both the policyholder and insurer point of view. The priority is getting people back into their homes, and businesses back to work, as quickly as possible to limit stress, disruption and financial loss.

But when it comes to vehicles, the opportunity to restore and maximise value is often overlooked by insurers that don’t realise how many can be repaired, restored and sold delivering maximum value. 

Contamination is probably at the top of the list of reasons why so many vehicles are given a Cat B rating (written off) following flooding – if a desktop engineer can’t see a floodline they’ll naturally err on the side of caution.

But there are now decontamination processes so sophisticated that flood-damaged vehicles can be cleaned to food hygiene rating standards and provided with the appropriate certificates to validate that.

This means they can be restored and sold, maximising returns for insurers and minimising waste. Routing vehicles through this process can deliver an increase in salvage sale returns of thousands of pounds.

In order to limit damage and maximise the potential for restoration and sale, the quicker a vehicle is recovered from a flood the better – so having a specialist team ready to respond immediately to flooding incidents is essential. 

With flooding incidents on the increase due to climate change and the growth in building in flood zones, there is little doubt that there will be a future increase in the numbers of flood damaged vehicles. 

So, if these types of cars continue to be written off unnecessarily, the potential loss in salvage value can only grow unless there’s more focus on the skills and processes now available to restore vehicles and release their full value.

This means engaging with a flood response strategy and developing partnerships between insurers and salvage firms that encompass robust planning and preparation, so that everyone is ready for immediate or “rising tide” events, and resources and communications are fully co-ordinated.

There needs to be a surge management team that is always on standby to immediately assess the impact of an incident and executes a plan to recover vehicles as quickly as possible, and a dedicated response unit that can that can be sent to the affected location and used as a “pop up” office.

You need to have a team of centrally co-ordinated roamer recovery drivers who can be immediately deployed to the affected areas where they’re needed most, and to be able to call on the services of a reliable sub-hauler network who can support collection operations during periods of exceptional demand and to handle unusual vehicles.

And you also need access to expert vehicle contamination processes to ensure that flood-damaged vehicles are restored to their optimum state.

With all that in place, there can be speedy restoration and better value recovery.

Flooding can’t be prevented, but with the right planning and processes in place, the fallout and waste arising from flooding events can be better managed to the benefit of insurers and their customers.

Who is the best insurance employer in the UK market?

By Insurance Post staff | News | 13 November 2019
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Does your employer go above and beyond to look after its staff? Are the perks you receive out of this world?

Why not take part in Post’s Best Insurance Employer research and find out once and for all if they are the best?

As part of Post’s award-winning research programme, in 2020 we are launching our Best Insurance Employer ranking. We are seeking the views of staff in broking and insurer firms to find out which organisations really go the extra mile for their people.

We are asking what employees rate when it comes to choosing their employer and what value staff see in perks and benefits. We’ll also find out what training and development the sector offers, how staff feel about senior management and if they would recommend their employer to a friend.

If you think your employer is the best in the UK, then fill in our survey and look out for the full ranking in 2020.

ABI backs Gibraltar government's pitch to British businesses

By Harry Curtis | News | 12 November 2019

The Association of British Insurers remains “fully supportive” of the Gibraltarian insurance market and “the choice that it gives UK customers,” ABI director general Huw Evans has said.

Evans, pictured, made the comments at an event held by the Gibraltarian government last Thursday at the Gherkin in London.

Also speaking at the event, Albert Isola, Gibraltarian Minister for Financial Services and Gaming, emphasised the strength of regulation in the overseas territory, which has seen the failure of several firms in recent years.

He said: “We are not a mass market. We are a market of small, quality, manageable businesses that have to meet the standards that are set.

“They are higher standards than many others, and perhaps you’re very familiar with them, because we have very similar standards to those here in the United Kingdom.

“We are compliant, like the UK, with every single directive in the area of the exchange of information and transparency.

“If we look at all the different baskets that are relevant in terms of the jurisdictional beauty pageant, we score well. We aspire to excellence in what we do in each of the areas.”

In May of this year, Gibraltar-based unrated insurer Lamp Insurance went into liquidation, following in the wake of fellow Gibraltarian firms, Horizon which was declared in default last December, and Enterprise which collapsed in 2016.

In July Gibraltar-based Elite, which stopped writing new business in 2017 after it hit on a £9.7m solvency capital requirement shortfall the previous year, shot for a solvent scheme in a bid to avoid liquidation.

In late September, Joe Perdoni, prudential head at the Gibraltar Financial Services Commission, said the regulator was taking action around run-off costs in order to reduce the risk of reputation risk to the jurisdiction.

Pitching Gibraltar as a jurisdiction in which to set up businesses, Isola highlighted similarities between its legal system and the UK, as well as recent tax agreements with the UK and Spain and an act of parliament passed earlier this year in the territory that consolidated over 90 financial services.

He also emphasised certainty over access to UK customers after Brexit, citing assurances that the territory now had “guaranteed access into the UK market post-Brexit whatever happens.”

Evans was supportive of Isola’s pitch, and said it was right “to ensure that firms based in Gibraltar are regulated to the same high standards by the GFSC as our UK based members expect by the PRA.”

“Both governments understand this is not just a question of fairness, but one of credibility,” he went on.

“Solvency II has had an important impact and the continued success of Gibraltar as a financial services centre depends on the reputation of its regulatory standards.

“We know firms that decide to set up their businesses and do business on the Rock, do so not because of any lapse in capital requirements – quite the opposite – but because of the regulator’s approachability and its ability to embrace innovation.

“With Gibraltar having established itself as a hub for insurance, committing to create a supportive environment for firms to grow, we all know that it would undermine the significant investment in time and resources that’s been made if there were any suggestion that firms in the Gibraltar market are not subject to the same level of regulatory scrutiny, particularly given the role of the UK compensation scheme.”

Blockchain

One innovation that Gibraltar has been proactive in welcoming is blockchain. A legal framework around distributed ledger technology passed into law in January 2018.

Isola said: “We were the first jurisdiction to do it and successfully so. I say successfully so because we haven’t had hundreds of firms come to Gibraltar: that’s not how we operate.

“We like to have a small number of firms, but good quality and chunky businesses, and we have 13 DLT firms with a further 10 in the approval stage, which will give us a nice core number of top quality blockchain firms, many of them in the area of financial services.”

EU relationship

Evans also used the occasion to set out the ABI’s position on the UK’s future economic relationship with the EU.

“While we as a sector are as well prepared as possible, we have to keep reminding ourselves that any withdrawal agreement is just the first stage in a longer process,” he said.

Evans continued: “It is the agreement on the future economic relationship that we will have to live with decades to come.

“Here we continue to face what in our view is a wholly unacceptable risk that we end up being long term rule-takers of the bloc we have just left.

“As regulators in the UK absorb responsibilities that previously sat with Eiopa, in our view, those regulators must be able to shape a regime that works for our market.

“We cannot be in a position where over the long term we are obliged to adopt rules designed by our competitors with no ability to influence how those rules work.”

Isola said that the Gibraltarian government had held discussions with the Treasury “as to what the future could hold in terms of the application of solvency and what the UK government may be seeking to do.”

“Softening is not the right word, but certainly improving the environment for insurers in the United Kingdom, and in the future, and we will be with them and following them in that respect,” he said.