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10 September 2010 The Brewery, London ENTER ONLINE NOW AT: www.ukbrokerawards.com

Recognise your excellence and stand out from the crowd at the UK Broker Awards – the only broker-focused insurance industry awards in the UK showcasing the “best of British”. Now in their 17th successful year, they recognise excellence and innovation in the UK broking sector, from small local brokers to strong regional and national players.

Seventeen categories present opportunities to highlight your successes, whether in marketing, technology or as intermediary of the year. Two new categories – Business Owner of the Year and Network Member of the Year – ensure that the UK Broker Awards continue to reward the entire broking community. BENEFITS OF ENTERING

Simply being shortlisted gives you the opportunity to showcase your achievements and winning or being highly commended will be a major boost to your staff and image, providing an excellent promotional device and marketing opportunity on a regional and national level. If you have something to be proud of, you really should be entering the UK Broker Awards 2010. WHO CAN ENTER?

The awards are open to Financial Services Authority (FSA) registered insurance brokers, intermediaries and appointed representatives only.

IA_FalseFronCover_Rach.indd 4 28/4/10 13:46:13 www.broking.co.uk May 2010

Serving the broker community for over 30 years SMEs call for post- election stability

National Insurance by 1%, with By Louise Meeson the Conservatives planning to raise the threshold when the he three major parties increase kicks in to £35,000 Twere accused of treating and the Liberal Democrats the small business sector as a intending to reverse the policy. “political football” ahead of But, Mr Orford said that the general election. overall the parties’ policies Phil Orford, chief executive were not that different. of the Forum of Private Busi- “We would like to think ness (FPB), said that regardless we could get this tax on jobs of the colour of the new Gov- removed completely but we ernment, it had to create an understand that with the defi- LABOUR CONSERVATIVE LIBERAL DEMOCRATS environment of “certainty and cit any Government will have stability” in order for busi- to raise revenues,” he added. l Increase National Insur- l Only apply the NI l Reverse the 1% nesses to grow. In the Federation of Small ance (NI) contributions increase to those earn- increase in NI after “Many small businesses Businesses (FSB) 2010 mani- by 1% except for those ing more than £35,000 identifying match- have faced extremely tough festo, John Walker, FSB policy individuals earning and exempt new busi- ing spending cuts or conditions during the credit chairman, said the Govern- under £20,000 nesses from paying NI alternative sources of crunch,” he said. ment would be forced to make l Establish a UK finance on the first 10 employ- revenue “Just when we were getting “complex and tortuous deci- for growth fund of ees it hires during its l Simplify the Corporate a bit of positive news about the sions” in order to lead the £4bn for small to first year of operation Tax system by removing economy coming through, the country to recovery. medium-sized enter- for two years avoidance schemes and campaigning started. The gen- “A sustained recovery will prises (SMEs) in need of l Use government guar- reform business rates eral election could not have require more finance than the finance antees to create more l Establish local enter- come at a worse time.” banks are currently able or l Create a new small diverse sources of prise funds to provide Mr Orford continued: “It’s willing to give; it will require a business credit adju- affordable finance for capital to start-up busi- wrong that such a key part of sympathetic tax regime, a sta- dicator with statutory SMEs nesses and establish the economy is being used as a ble and predictable business powers ensuring that l Cut the main rate of a network of regional political football.” environment, and targeted SMEs are not turned Corporation Tax from Stock Exchanges to In the small business sector, measures to bring on innova- down unfairly when 28p to 25p and the provide finance for all of the major parties focused tion and entrepreneurship,” applying to banks for small companies' rate established smaller on Labour’s plans to increase he added. finance from 22p to 20p businesses

Tony Cornell discusses the options QuinnUKbanreversed opentobrokersastheyattemptto achievegrowthinatoughmarket uinn Insurance has been ing model and a strengthening Qgiven permission to re- of its pricing structure. Pro- Agenda p22 enter the UK market despite an visional insurance accounts earlier decision by the Irish regu- for only 10% of Quinn’s UK lator preventing it from writing business. This month’s discussion takes new business in the country. In a statement, Quinn said: place in Glasgow and explores The Financial Regulator “While this is a limited re-entry theimpactofe-trading modified its previous stance to it is an important development allow the Irish insurer to write as the UK market has been a Power hour p28 motor insurance cover for pro- core part of the business for Biba 2010 visional drivers. The regulator the past five years. said it had taken the decision “The company’s business This month’s Reportage Martin Friel explains why public after analysing the information model of efficient operations, gearsupforBiba’s trust in the insurance industry provided by Grant Thornton, pro-active claims approach hasgoneupinsmoke Quinn’s administrators, which and a targeted approach to annual conference and detailed improvements made selective customer segments explores how attendees Volcano fallout p48 ▲ in the company’s underwrit- Story continues on p3 can gain value Menu Have a

Welcometothe happy Markel Broker Lounge hour with Cappuccino Markel.

Latte Or even just 10 minutes. If you want to spend some quality insurance time at Espresso BIBA 2010, pull up a stool at stand E2, unwind and let our specialists inform and Bollinger entertain you. Not only will you discover why we’re a leading name in niche markets, you can expect a warm welcome, a glass of bubbly PLUS BIBA SPECIALS and perhaps even an Absolutely Fabulous encounter with a familiar face. PROFESSIONAL INDEMNITY Autograph hunters welcome. SOCIAL WELFARE For insurance with a smile, join the party at the Markel stand. Cheers!

UK Offices Offices Operating divisions London market brokers: Birmingham London Marine and energy www.markelintl.com Bristol Stockholm Non-marine property Cambridge Equine and livestock Madrid UK regional brokers: Edinburgh Professional liability Singapore www.markelukbroker.com Leeds Markel UK Manchester Montreal Specialty Reigate Toronto Trade credit News

Insurance Age Editor Martin Friel Irish regulator softens to allow 020 7316 9732 [email protected] News editor Louise Meeson 020 7316 9867 the writing of provisional motor [email protected] Reporter Liz McMahon as part of the plan to restart more busi- 020 7316 9115 By Martin Friel ness in the UK, the administrators were [email protected] preparing to increase rates by up to 20% Group editor-in-chief Anthony Gould Continued from front page on certain lines. 020 7316 9374 [email protected] offers the opportunity of sustainable Despite the positive moves to shore Production editor Ruth Ganthony profitability.” up the business, there was gloomy 020 7316 9717 The Financial Regulator also opened news on the staff front with the admin- [email protected] the door to a future loosening of restric- istrators admitting that Quinn’s UK Sales manager James Murray tions. It said it had requested further business could not continue in its cur- 020 7316 9296 [email protected] information from the administrators rent form and, at the time of going to Sales executive Chris Finnegan in relation to their proposed business Quinn’s offices in Salford press, plans for the restructuring of the 020 7316 9632 plans for the UK market and would business were underway. [email protected] consider allowing Quinn to once again But workers’ spokeswoman, Mona Commercial director Phil Davison 020 7316 9215 write other lines of business. operations in the UK would be met. Bermingham, warned that time was [email protected] “Once further detailed information is According to reports in the Irish running out to save jobs. Head of key accounts Sajeeda Merali provided, the Financial Regulator will press, the Irish government insisted “There are 1,500 people employed 020 7316 9765 examine the directions on the Quinn that the Department of Finance would to facilitate the UK and Northern Ire- [email protected] UK business with a view to reopening make “appropriate funding available to land market,” she said. Group production manager Lorna Graham 020 7316 9707 of certain profitable business lines on a assist the administrators in bringing the “Only 10% of our market has been Digital production manager Rebecca Yegliss phased basis, in consultation with the company back to a sound commercial reopened there. You can do the math- 020 7316 9228 FSA,” it said in a statement. and financial footing”. ematics yourself.” [email protected] The good news for Quinn came It gave additional commitments that Meanwhile both RSA and Axa have Art director Nicky Brown as the Irish government assured the Quinn Insurance would no longer use been named among a host of compa- 0207 7316 9507 [email protected] Financial Services Authority (FSA) that certain lines as ‘loss leaders’ to attract nies rumoured to be preparing to make Head of marketing Ro Osborne any funding needs arising from Quinn’s business. There were also reports that a move for Quinn Insurance. 020 7316 9185 [email protected] Head of events Simone Broadhurst 020 7316 9055 Miles Smith case highlights non-disclosure danger [email protected] Audience development manager Sarah Smith rokers have been warned of the concluded that, even if the brokers had matters that are likely to be requested 020 7968 4648 Bperils of non-disclosure following a done all they should have done, the use by the underwriter for material facts.” [email protected] recent court case involving commercial of the plasma guns would probably not Mr Chainey said brokers now had Publisher Alex Broad 020 7316 9382 high-risk broker Miles Smith. have been disclosed to insurers. increased responsibility whereas histori- [email protected] Waste electrical recycler Environcom While Paul Chainey, chief executive cally the onus had been on the insurer. Group publishing director Derek Peck failed in its £6m compensation claim at Miles Smith, said he was “delighted” “In the past, the broker would make Managing director Graham Harman against the broker, following a fire with the result, which Environcom a ‘fair presentation’ and ours was more For subscription queries and enquiries or back issues, involving high-temperature plasma could appeal, he also said he had than fair but the law is now being inter- please contact: Insurance Age Subscriptions Department, Tel: 0845 155 1846 Email: [email protected] guns, which destroyed its £2.1m recy- decided to change some of its proce- preted as the onus of disclosure lying Annual subscription: UK £99, Europe £125, ROW £150 cling site in Grantham. dures in light of the case. with the broker. Material fact-related For reprints & e-prints enquiries, contact Alex Hall,The Reprint & Licensing Centre. 4 Ingate Place, London, Although Mr Justice David Steel did He warned: “Many brokers don’t advice and claims experience needs to SW8 3NS.Tel: 020 7501 1085 Email: [email protected] not rule in the claimant’s favour, he realise what their duties are now. I be brought to the client’s attention Insurance Age is published monthly by Incisive Financial still found Miles Smith’s attempts to suspect the judgment may become case time and time again in a fairly intru- Publishing Limited, 32-34 Broadwick Street, London explain Envirocom’s obligations “seri- law. It quite readily identifies an onerous sive manner and this is definitely not W1A 2HG, UK. Tel: 020 7484 9700 Fax: 020 7316 9313 Printer: Headley Brothers, Ashford, Kent ously inadequate”. responsibility on the part of the broker what we have seen going on in other All rights reserved: no part of this publication may be reproduced, stored in a retrieval system, or transmitted in Environcom lost the case as the judge to interrogate the client concerning brokerages.” any form or by any means, electrical, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher. © Incisive Media Investments Limited ISSN 0142-6265 Powell Insurance MD makes speedy departure Member of the Audit Bureau of Circulations Average net circulation for the period 1 July 2008 to 30 June 2009: 15,880 he managing director of Liver- to press and Oval would not divulge The broker had a strong focus on Tpool-based Powell Insurance Bro- details of his future plans. mid-corporate and corporate clients kers, Eliot Powell, has left the com- However, Jeff Herman, group MD with specialisms including construc- pany, a mere 18 months after selling of Oval, confirmed: “Eliot Powell has tion, poultry, and food and beverage. up to Oval. left Oval. He is passing on the business At the time, Mr Powell commented: Oval acquired Powell Insurance Bro- to the existing management.” “We are very pleased with the decision kers in October 2008, with Mr Powell When Oval bought Powell Insur- to join Oval and see the two companies staying on to head up the office. ance Brokers, the company, which as having very closely aligned values. Insurance Age understands that Mr has been established for more than 25 This will enable us to deliver the same Powell has joined a rival brokerage years, had a team of 40 people with high level of service to our clients, and in the area, however this could not turnover of £3.4m and gross written give us the strength and resources of a be confirmed at the time of going premium of £16m. larger company.” www.broking.co.uk May 2010 Insurance Age 3 News

NEWS IN BRIEF Volcanic dust crisis likely to Dubai-based insurance broker Brokerage World Solutions (BWS), the have little impact on insurance parent company of Insure Direct, and Oxygen have joined forces to launch expected to be low: it is not a major Lossestotheairlineindustrywere a new London market intermediary. By Martin Friel line of business for medium and large estimated to be £100m a day Brokerage World Solutions UK (BWS insurers and therefore the industry as UK) will be jointly owned and managed he insurance industry’s exposure to a whole; volcanic eruption is not a spe- by both companies and will operate as Tthe eruption of the Eyjafjallajökull cific insured event covered in policies; appointed representative of Oxygen volcano in Iceland will be limited de- and even if a policy did respond, limits Insurance Brokers, a London-based spite the widespread disruption caused are usually fixed and relatively small. boutique broker focusing on specific to the aviation industry. The reaction of insurers to the event specialist areas. BWS UK will handle the Although the ash cloud closed much has been mixed. Some issued a blanket international placements for parts of of Europe’s airspace, Dominic Simpson, refusal to accept claims on the basis Insure Direct’s insurance programmes VP-senior credit officer at Moody’s, that the volcanic ash cloud was not an and will work with Oxygen to generate said that the extent to which the insur- insured peril. Those that were willing new business in the UK market. ance industry would cover losses from to pay out were doing so under delay the disruption was expected to be He added that the industry’s protec- to travel compensation. Others indi- The top five stories on Insurance limited because business interruption tion from the worst of the volcanic cated that they would respond where Age’s website, www.broking.co.uk for clauses would not be triggered. fallout extended to other commer- airlines wouldn’t and still others said 1–27 April were: “From an aviation perspective, busi- cial lines insurance such as air freight they would look at claims on a case-by- 1. ‘Quinn staff cancel rally’ ness interruption insurance claims are shipments, which relied on the same case basis. www.broking.co.uk/1601415 only valid for airlines and airports if material damage specifications and However, the impact on the airline 2. ‘Quinn welcomes regulator’s decision’ there has been physical damage to their claims for damage caused by corrosion industry is expected to be significant. At www.broking.co.uk/1602308 property. This has not been the case or dust deposits were not expected to the height of the crisis, they were esti- 3. ‘Aviva issues volcano insurance advice since the rapid closure of so many air- come through as the concentration of mated to be losing £100m a day with to customers’ ports prevented any aircraft losses that ash in the cloud was too low. concerns that weaker airlines would not www.broking.co.uk/1601657 might have occurred,” he said. Even claims in travel insurance were be able to take the financial hit. 4. ‘Irish regulator investigates Quinn’ www.broking.co.uk/1598931 5. ‘Quinn still banned from UK trading, dossier handed to Irish regulator’ Das CEO assures UK exit rumours are ‘nonsense’ www.broking.co.uk/1600400 he chief executive of legal expens- have already started to develop the therefore when schemes go wrong, Tes insurer Das has slammed indus- infrastructure through our launch of a they don’t suffer the loss. Their drivers What do you think the consequences try speculation that it may be looking stand-alone product in Canada. are different to ours and in the long of a hung parliament would be for to pull out of the UK as “absolute “It is about changing the mindset term, they are not sustainable.” the UK general insurance market? nonsense”. in the UK, particularly with brokers, Mr Asplin claimed that there were Paul Asplin said the UK business was but from our experience in other other insurers in the UK legal expenses It would be terrible central to the company’s plans and that countries, brokers still dominate the market whose positions were far more for the economy there could be acquisition opportuni- market.” vulnerable. and regulatory ties in the near future. He continued: “Advocates of add- He also pointed out that Das had future of insurance 48% As reported in Insurance Age (Febru- ons tend to be smaller legal expenses made no secret of its intention to be ary 2010, p11), Mr Asplin questioned insurers that are fighting for survival the first to buy a solicitor’s firm to offer It would have a whether the UK model had “run its rather than focusing on what is most in-house solutions and, as part of its positive impact 9% course” and could be replaced by the beneficial for the sector. Most of these wider solution, would be concentrating continental stand-alone model. firms are not actually underwriters and on how it handled claims. It would make no Mr Asplin said: “We have a com- difference 43% mitment to marketing an effective For the latest legal expenses news stand-alone product and while we www.broking.co.uk/tag/legal-expenses Congratulations to Naomi Watts at appreciate this is a massive task, we Stynes Knight, the winner of our April competition to secure two tickets to the Insurance Raceday, which took place BirchappointedtoHeathLambertdirectorrole on 20 April at Kempton Park. Thank you to everybody who entered and the eath Lambert has boosted its re- both RBS Insurance and Tesco Per- property investors, manufacturing and answer to the question: ‘What role in Htail division by appointing former sonal Finance. financial institutions. Government did Gordon Brown hold Equity Direct managing director, David His appointment comes hot on the Heath Lambert chief executive, before becoming Prime Minister?’ was, Birch, as sales director to oversee the de- heels of the capture of Judy Baker from Adrian Colosso, said: “Our major of course, the Chancellor of the Excheq- velopment of personal lines afﬁnity re- Bluefin where she was MD of major victories during 2009 mean we punch uer. To win this month’s competition lationships with major global companies accounts, corporate. She took up the well above our weight in the corporate and a PURE One Mini digital radio, all and high-street brands. position of head of London (Corpo- sector.” you have to do is answer this simple Mr Birch, who will join the com- rate) at Heath Lambert. Market rumours persist that the question: Where is this year’s Biba con- pany in July, has more than 15 years’ Ms Baker’s career spans more than broker is set to appoint a further affin- ference being held? experience in developing affinity part- 20 years within the corporate com- ity sector expert but Heath Lambert www.broking.co.uk/competition nerships, having held senior roles at munity in sectors such as retail, leisure, would not comment further.

4 Insurance Age May 2010 www.broking.co.uk Tohelpdriveyourbusiness,wedrivebusinesstoyou Webelievebrokersarebestplacedtoprovidebusinesseswiththeadvicetheyneedwhenbuying business insurance. Afterourbusinessinsuranceadvertisingcampaignlastyear,manybrokerssaidtheyhadseenan increase in enquiries, often via our broker look-up facility on Aviva.co.uk/yourbusiness anditwas reallygreattohearthatthey’dbeenabletoturnthoseleadsintonewbusiness. This year we are pleased to announce, we’ll be building on that success – advertising on regional radio, inregionalandsector-targetedtradepress,andonline,fromAprilthroughtoJune.Sogetreadytogreet somenewclients…andwatchoutforfurtherupdatesoverthenextfewweeks.

Issued for use by insurance intermediaries only. This information has not been approved for use with customers. Aviva Insurance UK Limited. Registered in England No. 99122. Registered Ofﬁce: 8 Surrey Street Norwich NR1 3NG. Authorised and regulated by the Financial Services Authority. News

NEWS IN BRIEF RSA set on becoming top three Aviva has announced it will continue its advertising campaign advising busi- player despite industry doubt nesses to seek advice through a broker when buying their insurance. The radio Mr Norgrove said that RSA’s “wealth ads will again feature actor and come- By Liz McMahon of distribution channels across imarket, dian Paul Whitehouse, and are to air on software houses and our own extranet commercial stations throughout May. SA has vowed to get its small to should appeal to brokers”. Mr Whitehouse will once more adopt Rmedium-sized enterprise (SME) He added that it was “one of the few, the role of Damien the hairdresser. Brian offering right as the market expressed if not only insurer” to offer cover for Spinks, head of corporate marketing at scepticism that it could deliver on its business combined, mini fleet and com- Aviva, said: “We were blown away by ambition to become a top three player mercial vehicle on a fully-integrated the great feedback, following our first in the sector. IT system. He said this was currently ever broker specific TV ad campaign.” The insurer has announced its inten- being tested and would be available to tion to grow its SME commercial brokers from June. Fortis Insurance UK and Tesco Bank book by 400% over the next five years “As we move forward, I want to try have unveiled the structure of their and as part of a phased roll-out, which to adopt a personal lines model for general insurance partnership. The will result in a new product release how we apply rates and pricing and this new insurance company, which will be every six days up until September, will should be possible at the lower end of named Tesco Underwriting, subject to launch nine new products across seven the commercial market in the next two approval from the Financial Services software platforms. KenNorgrove:“SMEhadlostitsway” years,” Mr Norgrove added. Authority and registration, will provide However, one market source said: The market source said: “It is a technical underwriting and claims man- “We have heard similar aims from RSA SME business “had lost its way a little”. noble ambition but I am just very agement for Tesco Bank’s 1.5 million in the past but it hasn’t had the under- “The enterprise offering we launched sceptical over whether it can really be motor and home insurance customers writing flexibility or presence to deliver in 1999 was not developed in the way achieved. RSA will need to price care- and will start managing new customers them. Is that going to be repeated now it might have been and there wasn’t fully if it wants to play ball. Growing and renewals by the end of the year. or is this a serious play?” that investment made in taking it on. a presence in the current SME market, Ken Norgrove, admitted that prior RSA now wants to get back in that especially in terms of generating new QBE has announced the appointment to taking on the role of RSA’s SME SME space and support regional bro- business, is going to be an extremely of Terry Ibbotson as global head of business director 18 months ago, the kers,” he added. difficult challenge.” distribution. Mr Ibbotson will report to the QBE group chief executive, Frank O’Halloran. Mr O’Halloran commented: Allianzcommittedtogrowmotorbookwithbrokers “QBE has identified a number of opportunities across the globe that require a llianz Commercial has signalled our service and assists in containing specialised focus. By establishing this Aits intent to work closely with re- third-party claim costs for the benefit new position, we will have greater abil- gional brokers to grow its motor trade of our customers. ity to convert the opportunities for the book by 11%. “This development, allied with benefit of shareholders.” The insurer’s regional development our 30 years of experience in this sector teams plan to generate organic growth and the range of value-added services Willis Group Holdings has launched a by working with the existing local we offer, leaves us confident that we public awareness campaign about what broker base, which accounts for 60% can secure the growth that we are it described as the “conflict of interest of Allianz’ business. looking for from our local and regional inherent in contingent commissions”. However, the insurer insisted it broker base,” he said. Willis chairman and chief executive, was always open to new business The motor trade team provides a single Anticipating the impact the MoJ Joe Plumeri, debuted the campaign and would consider new distribution point of notification to improve service reforms will have on the claims process Clients Before Contingents at a confer- channels such as the recently launched and the relationship between insurers ence in Boston, where he urged risk delegated authority arrangement now “With the Ministry of Justice (MoJ) and brokers, Mr Ashwood said prompt managers to use their wallets to send managed by its Southampton office. reforms coming into force, we are notification from brokers was now even a signal against the controversial pay- Mark Ashwood, motor trade man- well positioned. Our bespoke motor more essential as insurers must respond ments. Willis initiated the campaign ager at Allianz Commercial, said that, trade team provides a single point of to liability within 15 working days of after recent agreements with regulators despite the testing circumstances, notification, which aims to improve receiving a claims notification form. paved the way for big global brokers to he remained confident that Allianz’ resume taking contingent commissions, proposition and service delivery For the latest commercial lines news a practice that Willis said was used to would help it to reach its “ambitious” www.broking.co.uk/category/commercial generate extra end-of-year profits. growth targets. QUOTE BUY AMEND RENEW ONLINE Visit www.LVbroker.co.uk

6 Insurance Age May 2010 www.broking.co.uk RSA HIGH and MID NET WORTH PRODUCTS AVAILABLE TO ALL BROKERS...

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NEWS IN BRIEF CashplanssettooutdoPMI The Insurance Partnership (TIP) has appointed Bob Blackburn as associa- following broker sales boom tion director of its office in Monks Cross, York. Mr Blackburn is joined by Nick Sav- the roll out of its new product, Bupa age, who was recently recruited as a key By Liz McMahon Select, last year. commercial account handler, and fur- Mr Lenihan admitted that the flexible, ther jobs were expected to be created he cash plan market could over- modular product was a move away from in the city over the coming months. Mr Ttake private medical insurance Bupa’s more traditional PMI and added Blackburn said he was attracted to the (PMI) in the corporate sector after that it also had plans to move further company “not just because of the types providers reported signiﬁcant growth into the corporate cash plan market. of clients we retain, but also the core in intermediated sales. “We are already a large player in this values” and that he was delighted to be Cash plan specialist Westfield Health arena and we plan to see growth in the working with TIP. said its broker sales rose by 43% last year next two years. PMI generally tends to while National Friendly saw an increase cover management and a key sector for PowerPlace has recruited five new of 200% during the same period. us to penetrate in the corporate cash business consultants and one broker Chief executive at Westfield Health, Richard Sear: “Plenty more potential” plan market is what you could label as development manager. PowerPlace sales Jill Davies, said: “We are now see- blue collar workers,” he added. director, Wayne Tonge, said: “PowerPlace ing decision makers considering the increased year on year but that there Jack Briggs, head of intermediary offers brokers a new way of doing busi- benefits of health cash plans over was still plenty of potential for future sales at Simply Health, said while the ness. For the decision makers within a PMI or looking at how the two can growth in the sector. insurer had also seen an increase in firm, it’s easy to see the benefits in terms work together to deliver better value However, although the number of broker sales for the corporate cash of speed, efficiency, enhanced access to and more relevant healthcare for their Bupa’s corporate customers fell by 5% plan market, it was not fair to compare markets and products. But we recognise employees. in 2009, Damian Lenihan, head of cli- cash plans with traditional PMI as “the that for those at the coalface, using Pow- “The result is that rather than being ent management, said the PMI giant shrinkage of PMI was down to business erPlace will mean embracing change, considered a lower cost option, cash had seen a large increase in corporate failure more than because cash plans which isn’t always easy. Our develop- plans are now being recognised as a customers in early 2010, mainly due to have taken away customers”. ment team’s role is to work in a hands on progressive business tool in their own way with a broker’s whole team to help right.” For the latest news in PMI them increase the efficiencies and profit- Richard Sear, CEO of National www.broking.co.uk/tag/pmi ability in their business.” Friendly, said intermediary sales had Distinctively Different

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8 Insurance Age May 2010 www.broking.co.uk News

Opinions differ regarding true NEWS IN BRIEF CBG Insurance Brokers has been meaning of acquisition activity appointed by the Daresbury-based Suave UAV to offer a risk protection as loss adjusters, and that there was programme to cover its specialist aerial By Louise Meeson a lot of interest from overseas com- photography equipment. Suave UAV panies looking to start up or acquire Enterprises uses unmanned low flying ndustry experts have voiced conﬂict- Lloyd’s underwriting businesses. Mr helicopters equipped with cameras to Iing opinions over whether a recent Clark added that Solvency II would take aerial photography for a range of rise in insurance market acquisitions sig- also impact activity as small mono-line clients. James Adler, account execu- nalled a return to the frenzied purchas- insurers, that were unwilling to meet tive for CBG’s science and technology ing of the past or was merely a “blip”. the new capital requirements, would initiative, said: “Suave UAV Enterprises Ian Clark, insurance partner at look to off-load business. has many unusual risk elements such Deloitte, said that following a lack of “After very low levels of acquisition as working outdoors and height.” acquisitions over the past 18 months, activity we will begin to see a flood of he expected a rise in activity as the Kieran Marsh: Describes rise as a “blip” assets coming to market,” he added. Figures from the Office for National “backlog” started to come to market. But, Mr Marsh urged caution in Statistics (ONS) have shown the gross However, Kieran Marsh, chief execu- Insurance Brokers and Capita acquir- claiming this represented a new surge domestic product of the UK grew by tive of Marsh Corporate Consulting, ing Sureterm Direct. in acquisition activity. 0.2% in the first quarter of 2010. The described recent activity as a “blip” as Mr Clark said he expected to see an “What I have seen in 2010 is brokers figure was lower than the 0.4% rise in the country’s economy was “still in a increase in activity in the broking mar- becoming a little bit distressed because Q4 2009 although it may be revised. very stressed state”. ket, with major consolidators such as they have put all of their eggs in one The ONS said the increase in output The comments follow a recent Giles and Oval becoming increasingly basket. However, when they try to go was mainly due to increases in business surge in purchases including Junction acquisitive. to the market to sell, some are looking services, finance and manufacturing. buying Bradford & Bingley’s motor He said he also expected to see quite for multiples that are too high in this Output of the service industries grew and home insurance business, Catlin a few transactions involving companies climate and the deals are not even get- by 0.2% and in the production indus- Group snapping up the professional in the insurance supply chain, such ting to due diligence stage.” tries by 0.7%. Charles Davis, senior indemnity and directors’ and officers’ economist at the Centre for Econom- liability book of Angel Underwriting, For the latest consolidation news ics and Business Research, said he Henderson Insurance buying Denney expected growth to accelerate in Q2 as www.broking.co.uk/tag/acquisitions O’Hara, CCV purchasing Paul Scully the “weaker pound drives exports”.

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Brokers given heads up on NEWS IN BRIEF Technology company Open GI has cottage trade rising potential announced that its aggregator quotes have risen to two million a day. Accord- Groupama confirmed that all cottage ing to the software house, the increase Dogs, cats and house sitters are prov- By Liz McMahon trade enquiries so far have been for in quote volumes was another sign that ing to be popular micro businesses tradesman liability and Ms Andrews insurance providers were embracing rokers have been urged to take full thought this was in response to the lia- the aggregator distribution channel. Badvantage of the recession-fuelled bility-only cover the insurer launched Open GI’s product, eAggregator, was growth of sole traders as demand for last year. launched in 2007 and provides access cover for ‘cottage trades’ increases. Ryan Insurance Group set up a to 15 comparison sites, including Mon- Tim Larke, associate partner at Ryan division called Enterprise Insurance eysupermarket.com, Go Compare and Insurance Group, said the brokerage Services in 2008 to cater for the Confused.com, with product lines cov- had seen a 20% growth in revenue increase in sole trader business. ering motor, home, commercial vehicle from sole trader business in 2009 and Tim Ryan, the firm’s managing direc- and bike risks. that he expected to see the same again tor, said the move was “proving to be a this year. great success story as many of our com- The tide has changed in the global Broker-only insurer Groupama said petitors avoid this class of customer”. fight against corruption, as regula- it had seen a smiliar trend and had “Big businesses were once small tory agencies take a more aggressive been asked to cover a growing number are opting to come out of institutions businesses so there is often a progres- approach, according to a new report of cottage trades, which involved pro- and set up on their own. sion from our enterprise division into from global risk consulting company viding cover for a variety of risks it had “Our online system can’t cater for our commercial division,” he added. Kroll. “Regulators have started regulat- little or no experience of. that array of business as numbers are Mr Larke did point out, however, ing again, and the recently passed According to Groupama, the most increasing all the time. This is where that the increase was not solely due to UK bribery legislation should serve popular micro businesses it had been the broker comes into play as they the rising number of start-ups. as a wake-up call to businesses with asked to cover included dog, cat or will need to handle the policy and talk “It may have more to do with the interests in the UK. The enforcement house sitters, garden designers, fitness directly to our underwriters.” opportunity to cross-sell,” he added. landscape is changing,”said Tommy instructors and tutors. Helsby, chairman of Kroll Eurasia. “It Head of commercial distribution For the latest commercial lines news will now be far easier for senior man- at Groupama, Allison Andrews, said: agement to be prosecuted for corrupt www.broking.co.uk/category/commercial “The theme seems to be that people practices and for companies as well as individuals to be held liable.” Axa makes host of appointments to boost SME Henderson Insurance Brokers has announced the appointment of Gor- xa Insurance has made a number worked at Hiscox, has been appointed with companies with a turnover up don Brain as group broking director, Aof specialist appointments as part to the new role of head of management to £500m – filling a “historical gap” based at the company’s head office in of a £200m business development liability while Dominic Guest, who between its SME heartland and the Leeds. Mr Brain joined Henderson from drive to grow its small to medium- joins from Beazley, has become head of global risks picked up by sister com- Bluefin’s Harrogate office, spending 24 sized enterprise (SME) and mid-cor- professional indemnity insurance. pany Axa Corporate Solutions. years with Smart and Cook before the porate business. Axa has stated its intention to refresh Mike Phillips, head of specialist company was absorbed by Axa in 2007 In order to strengthen its SME offer- its entire SME product portfolio in the markets, will spearhead the drive into to become part of Bluefin. Mr Brain ing, the insurer has created a new next two years – starting with a new the mid-corporate sector and is cur- said: “I’ve known managing director Joe financial lines unit that will develop a auto-rated property owners’ product rently recruiting a team of underwriters Henderson for a long time and he had suite of management liability and pro- in August. with expertise in the larger property, always said his door was open to me if fessional indemnity products over the It also plans to broaden its under- casualty and motor risks, eventually I was interested in moving. When I did course of the coming year. writing footprint to encompass the building a team of around 40 people get in touch, there was an opportunity Callum Taylor, who previously more complex risks typically associated across the UK. arising so the timing worked out nicely.”

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Extended penalty regulations to lead to harsher fines Taxoverpaymentasaresultofmis- calculation could lead to a fine

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“careless” mistakes, up to 70% for By Louise Meeson “deliberate but not concealed” irregu- larities and up to 100% for “deliberate rokers have been warned they face and concealed” discrepancies. Bheftier ﬁnes from the taxman fol- Mr Kelly said that these measures lowing the introduction of a new pen- could also apply to those asking for alty regime. tax rebates. For example, in a recent At the start of April, HM Revenue case, a man who overpaid his taxes and Customs (HMRC) extended pen- and was owed a £1,000 rebate was alty regulations, which were initially fined £1,400 by HMRC for making a introduced for VAT and Income Tax a mistake in his sums. year ago, to all forms of tax including “The new rules now mean that Insurance Premium Tax (IPT). HMRC can go back a full four years George Kelly, head of tax investiga- to recover arrears of tax; the only good tions at law firm Halliwells, explained news here is that businesses can at least that, in addition, new powers of entry recover overpaid tax like VAT and and inspection had been extended to IPT,” Mr Kelly added. all forms of tax, allowing HMRC to He continued: “A big fear is that inspect business premises, demand the prospect of receiving such a hefty copy documents as well as information fine following a calculation mistake in from third parties. self-assessment may actually stop many He said: “Changes to tax regimes are businesses and individuals from disclos- usually viewed with some nervousness ing under-declarations they may have by the business community. After all, made. This is not what the new system changes can usually be translated as was designed for and there is clearly increases. When the changes are linked tension between collecting underpaid to penalties for under-declarations or tax and imposing unreasonable penal- over-claims, then perhaps the business ties when things go wrong.” community is right to be nervous. A spokesman for HMRC said it was The taxman is in a position to become important that people paid the right increasingly harsh towards both busi- amount of tax and reclaimed only the nesses and individuals.” amount of tax they were entitled to. HMRC can fine taxpayers up to “Any penalty can be appealed to an 30% of the potential lost revenue for independent tribunal,” he added.

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NEWS IN BRIEF LV motor book inspires similar Brightside Group has announced record profits after tax of £4.7m (2008 restated: £2.6m) for 2009. The Bristol- growth throughout business based broking group also reported complete overhaul – it is now one of a 35% increase in revenue to £44.7m By Martin Friel the most sophisticated in the business,” (2008: £33.2m). The broker saw an over- he added. all increase in policy sales to 197,000, V Broker managing director, Phil “Also, Liverpool Victoria used to up 30% on 2008, with van insurance LBunker, has set a target of £100m outsource its claims but we have taken up by 18% to 105,000 and online home gross written premium (GWP) for the that in-house, which gives us much insurance policy sales increasing by insurer’s small business book by the more control.” 127% to 25,000. Paul Chase-Gardener, end of the year as it announced a dra- Mr Bunker claimed that growth in the chief executive of Brightside, said: matic turnaround in its ﬁnancial per- general insurance part of the business “These financial results act as a sound formance. could continue for some time as there foundation to expand our existing divi- LV Broker currently controls £70m were still untapped areas to exploit. sions and to pursue new product areas.” GWP in the small to medium-sized “Growth in general insurance is not enterprise (SME) market but Mr Bun- expected to continue at quite the same Cooper Gay has reported a 29% ker believes the rapid growth seen in rate but 2010 will be another strong increase in revenue to £100.5m in 2009, the insurer’s motor book can be repli- year due to the upturn in motor rates. compared with £77.9m the previous cated in other lines. Phil Bunker: “Big ambitions in SME” It is easy to grow when you start from year. EBITDA profit rose to £19.9m (2008: LV’s general insurance business a small base. £18.4m), an increase of 8%. Cooper Gay turned a profit of £7m in 2009 com- joined LV we were asked to change the “But we still have some lines of group chief executive, Toby Esser, said: pared with a loss of £30.1m the previous shape of the business which did not business that are comparatively small. “We saw a substantial increase in top year and premium income increased to have very sophisticated underwriting,” Although we are a top five player in line revenue and reached the £100m just over £811m of which the broker he said. motor and we have a large household milestone, and despite heavy invest- channel contributed £399m. “To a large extent, we have spent a book, we have no household through ment impacting on margins, EBITDA Mr Bunker attributed the remarka- lot of time improving the underwriting brokers. We have big ambitions in SME expanded to approximately £20m. ble turnaround to a complete overhaul and to that end we recruited quite a and I am forecasting to control £100m We expect to take advantage of these of LV’s underwriting and the decision few people from the Direct Line pric- by the end of the year. It is part of our investments to continue with our strate- to take the claims function in-house. ing team and also individuals from long-term strategy but we won’t do gic growth plans in 2010.” “When we [the management team] NIG. The underwriting has had a anything silly to achieve it,” he said.

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14 Insurance Age May 2010 www.broking.co.uk News

Motor premiums predicted to NEWS IN BRIEF The price of car insurance rose by rise full throttle through 2010 4.3% in the first quarter of 2010, according to research by Confused. AVERAGE MOTOR PREMIUMS com and EMB. The Confused EMB Car By Louise Meeson Insurance Price Index revealed that Average premium April 2010 January 2010 % change although this was a drop from the lthough car insurance premiums Market average 6.4% increase seen in Q4 of 2009, it have stalled in the ﬁrst quarter of was still substantially more than the A Comprehensive £968.26 £1,000.14 -3.2% 2010 they are expected to rise steeply first quarter of 2009 (2.6%) taking the during the rest of the year, according TPFT £1,196.24 £1,252.25 -4.5% annual increase seen since last March to research. Comparison site up to 14.3%. Confused said the aver- The latest AA British Insurance age quoted premium has risen to £524 Premium Index, which tracks the Comprehensive £695.95 £665.08 +4.6% at the end of March 2010. movement of car and home insur- TPFT £820.68 £751.58 +9.2% ance premiums every quarter, saw the Heath Lambert’s specialist project average quoted premium for a com- DatafromtheAABritishInsurancePremiumIndex risks team has been appointed as prehensive car insurance policy fall by the insurance adviser for Transport 3.2%, while the average quoted pre- insurers hold their premiums during of the three lowest quotes for each Scotland’s Borders Railway Project. mium for third-party fire and theft Q1, when there is greatest competition customer in the basket of risks, showed The £235-£295m project has been (TPFT) fell by 4.5%. for business. It’s when most cars are sold modest rises over Q1 – with compre- designed to deliver a fast and efficient However, on comparison sites the and when most policies are renewed. hensive premiums increasing by 0.6% public transport link, from the existing average quoted premium for Q1 of “Last year, for the first time, premi- and TPFT by 4.5% – suggesting that Newcraighall station in Edinburgh for 2010 for comprehensive cover rose by ums rose during Q1 and I expected the the cheapest premiums on the market 49km through Midlothian to Tweed- 4.6% and TPFT rose by 9.2%. same to happen this year. However, continued to increase at a faster rate. bank in the Scottish Borders, creating Simon Douglas, director of AA Insur- while many insurers have shown mod- Mr Douglas said that after Q1, pre- seven new stations. Heath Lambert ance, said that while the “sudden stall” est increases, the quarterly fall can be miums would resume their upward will be responsible for advising on in the upward premium trend was a mainly attributed to a drop in some trend and that he expected premiums insurance matters including the devel- surprise, a respite of this sort wasn’t expensive broker rates bringing them over the next two quarters to show opment of the insurance strategy for uncommon during the first quarter. more in line with the market average.” significant rises taking increases into the construction and operation of the He said: “Most years we have seen The shoparound index, an average double digits by the end of the year. scheme and supporting Transport Scotland during the competitive dia- Horses and four courses at the Insurance Race Day logue procurement process. Torus UK has announced its entry he third annual Insurance Race Day ance Company, Arag Legal Services, into the financial lines market in Tat Kempton Park on 20 April gave Aspray, Groupama Insurances and London through a newly formed the insurance industry ample opportu- SSP. The unseasonably bright weather underwriting agency Torus Execu- nity to catch up with old friends and col- encouraged attendees to bask in the tive Risks (TER). TER, which is a joint leagues and make new business contacts. sun and barter with the frontline book- venture with Nexus Underwriting, will All sectors of the industry joined ies, resulting in some big wins. be led by Nexus chief executive, Colin Insurance Age, along with sister pub- Mid afternoon, the party ventured Thompson. TER will underwrite on lications Professional Broking, Post and inside for an afternoon cheese course behalf of Torus Insurance (UK) and will Reinsurance, for a day of networking A three-course lunch, sponsored by and, from there, enjoyed the final cou- provide policy limits up to £10m per and entertainment. ISO, was then served in the panoramic ple of races before heading home with risk in product lines including direc- Guests were greeted with a cham- restaurant, which provided a superb their winnings. tors’ and officers’ liability, professional pagne reception where both race and view of the races. The programme The Insurance Race Day raffle also indemnity and employment practices business tips were subtlety shared. included races sponsored by IGI Insur- raised £1,040 for The Children’s Trust. liability.

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NEWS IN BRIEF SoaringFSAfinesunderlinetough Marsh has completed its previously agreed acquisition of HSBC Insurance newstanceonnon-compliance Brokers (HIB), a wholly owned subsidiary of HSBC Bank, in the UK and other last year, 36 (86%) were settled at a key markets in Asia and the Middle By Louise Meeson discount, with all eight of the £1m plus East. On 18 December 2009, Marsh fines being reduced. announced it would acquire the busi- he Financial Services Authority Mr Francis added: “Even with the ness. Concurrent with this transaction, T(FSA) runs the risk of appearing ar- FSA setting bigger fines, financial serv- Marsh has also entered into an agree- bitrary as it delivers on its promise to get ices firms often still prefer to agree to ment as a preferred strategic partner tough, according to law ﬁrm Reynolds a discounted fine because the cost of to HSBC. During a transitional phase, Porter Chamberlain (RPC). defending an aggressive investigation scheduled to last through 2010, HIB The regulator dished out £33.1m in can be very high and there is still the will operate under the name Marsh fines between April 2009 and March risk of facing an undiscounted fine at the Brokers in the UK and other parts of 2010. RPC said eight £1m-plus fines end of the investigation if they lose.” the world. worth £27.5m were issued, up 32% Under its new penalties policy, fines from £20.8m the previous year, while will be based on up to 20% of a firm’s Following an investigation by the average fine increased by 59% to Margaret Cole: “Powerful message” revenue from the product or business Merseyside police, 25 defendants in £788,571 from £497,455. area linked to the breach and up to 40% a £1.5m ‘crash for cash’ scam have As reported in Insurance Age (April He continued: “Regulated businesses of an individual’s salary and benefits received sentences ranging from 2010, p8), the news followed the facing bigger and bigger fines deserve from their job relating to the breach. imprisonment to community orders. watchdog’s announcement that its more transparency and predictability Speaking at the time the policy was The ringleader, Darren Duvall, was new income-related penalties policy, about how those fines are being set. announced, Margaret Cole, FSA direc- sentenced at Liverpool Crown Court which was implemented on 6 March, The FSA should clarify how its fines are tor of enforcement and financial crime, to three years’ imprisonment. The could result in a three-fold increase in structured or it runs the risk of being said the watchdog imposed record fines defendants had been charged with enforcement fines. seen as issuing arbitrary punishments in 2009 and that this new approach conspiracy to defraud Allianz Insurance Steven Francis, partner in RPC’s based on political pressure.” further amplified the “deterrent effect out of £1.5m by staging fictitious traf- financial services team, said: “The FSA Financial services firms and individu- of our penalties”, sending a powerful fic accidents during 2005. Allianz said has delivered on its promise to get als that cooperate with the FSA are message to firms, which made it clear this ‘crash for cash’ case was the largest tough in response to the credit crunch entitled to a discount of up to 30%. that non-compliant behaviour would brought by a single insurance company. – and it is getting tougher still.” RPC said that of the 42 fines issued not be tolerated.

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16 Insurance Age May 2010 www.broking.co.uk Schemes news

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Underwriting vehicle covers NEWS IN BRIEF Supercover Insurance has created againstmodernsecurityperils a white-labelled policy to cover what it claimed could be the most theft- infrastructure,” Mr Newton added. targeted technology product of 2010 By Louise Meeson “This is why Principia products – the Apple iPad. Carmi Korine, direc- include network risk coverage that is tor at Supercover Insurance, said: n underwriting vehicle has been scalable to the buyers’ needs, cover for “We’ve created a policy for resellers Alaunched to cater for a ‘new gen- business interruption, increased costs of that can be included in new or exist- eration’ of data security exposures that working, data restoration, data privacy, ing policies, sold as an incremental are not currently recognised by many cyber extortion and crisis management revenue product or as an as an add-on insurers. following an unplanned IT infrastruc- to motor or home policies providing Principia Underwriting, which is part ture event.” substantial ongoing revenue streams.” of the Aquila Underwriting group of Mr Newton founded the underwriting businesses, offers a range of special- company together with Shaun Cooper, Commercial insurance underwriting ist liability, business interruption and who previously worked with Mr New- agency APC has announced a pack- crisis management policies to cover the ton at Pembroke Syndicate 4000. age of enhancements to its residential risks businesses face when dealing with Mr Newton continued: “Organi- let and commercial let products. This media content, intellectual property sations are increasingly outsourcing includes new legal expenses and rent and IT security. Chris Newton: “Many businesses do not applications and services to focus on guarantee wording, upgraded mali- Core products focus on the media, fit the definition of media company” their core business, especially with the cious damage and vandalism, rent technology, cyber, e-business and pro- growth in the emerging virtual cloud and alternative accommodation cover. fessional services sectors, while other He said that Principia’s products market. The exposure to liabilities of Commission levels for new business non-sector specific offerings include covered websites, blogs and other traditional media outlets is not dimin- and renewals have also increased. APC’s programmes for network risk and brand cyber-related activities, which was vital ishing, with many businesses grappling underwriting director, Ian Russell, said it intellectual property. as more businesses utilised social media with the issues caused by succeeding planned to “encourage brokers to take Chris Newton, managing director of networks and electronic retailing. generations exploiting the ‘always-on’ a second look at this important market”. Principia Underwriting, said: “Typi- “While most media businesses rightly social networks and the blogsphere cally, these are businesses engaged in focus on mitigating their exposure to community. London & European has announced broadcasting, publishing, advertising liabilities stemming from their business “All this creates vulnerability to secu- the launch of Deposit Cover a deposit and film or television programme pro- operations, only a small proportion do rity breaches, possibly damaging brand guarantee insurance policy. Deposit duction. However, many businesses the same for protecting their income values and reducing shareholder value Cover has been designed to allow a engage in activities that expose them and data from unauthorised activity – but also drives the need for specialist purchaser to delay payment of deposit to media liability perils in one form or or unplanned interruptions in their IT insurance products.” until completion and the guarantee another but do not readily fit the stand- provides protection if the sale falls ard definition of a media company. For the latest schemes news through. If a purchaser fails to com- This is why Principia offers a flexible plete, the policy will pay the vendor www.broking.co.uk/tag/schemes approach to cover.” the face value of the deposit.

Ace UK has launched an Equity to provide ‘Honda Happiness’ motor cover environmental policy for small to medium-sized companies and multina- onda UK has appointed Equity the Honda Approved Repair Network, collaborations with brands including tional operations. Ace Environmental HDirect Broking (EDB) to ad- while the schemes will be administered Santander, Alliance & Leicester and Protect has been developed to pro- minister its car and motorcycle insur- at EDB’s customer contact centre in HSBC. Existing motor and bike manu- vide a broad standard wording and ance schemes. Colchester. facturer affinities include Renault, Kia flexibility of coverage for multiple EDB, which is part of Equity Insur- Neil Utley, Equity chief executive, and Triumph. markets including UK corporate risk, ance Group, will provide fully branded said: “Honda is the UK’s largest bike Honda UK’s retention products multinational operations and major risk ‘Honda Happiness’ car and bike insur- brand, with a number of acclaimed and manager, Don Worthy, added: “Our casualty business. It can be provided on ance services. class-leading machines in its range. It new insurance service is one of the a stand-alone and endorsement basis. Both schemes feature complimentary has taken a significant percentage of the most comprehensive on the market and All risks will be underwritten individu- seven-day cover for buyers of both new new car registration market and boasts backed by the largest motorcycle insurer ally by the environmental risk team. and used motorcycles and cars. annual retail sales exceeding 100,000 of in the UK, Equity Red Star. The overall Wayne Harrington, UK and Ireland In addition to quote and buy web- new and used vehicles. We see Honda as package represents real value and ben- manager for Ace Environmental Risk, sites for both products, an accident the perfect fit for our affinity business.” efit to our customers, which is the most said the demand for specialist environ- repair service is administered through The Honda UK deal follows EDB’s important thing to Honda.” mental risk products was growing.

www.broking.co.uk May 2010 Insurance Age 17 Risk management/claims

NEWS IN BRIEF LMRC-driven limitation of Trade credit insurers paid out a record £320m in 2009, compared with £164m liability guidance published the previous year, according to figures from the Association of British Insurers are doing it incorrectly then it’s not (ABI). Nick Starling, the ABI’s director By Louise Meeson going to be enforceable, it could be in of general insurance and health, said: breach of contract regulation terms or “While trade credit insurers paid out a he British Insurance Brokers’ As- the FSA conduct of business rules,” Mr record amount in claims during 2009, Tsociation (Biba) has published new Trudgill added. Q4 marked a significant improvement guidance for brokers to highlight the The guidance is the first major piece with the number of new claims received, potential pitfalls associated with limita- of work to emerge from Biba’s LMRC, down 23% on the previous quarter.” tion of liability clauses. which is chaired by Ken Davidson. However, he added that the outlook for Facts about limitation of liability, Mr Davidson said: “This is a very 2010 remained “highly uncertain”. which was driven by Biba’s London complicated subject, fraught with Market Region Committee (LMRC), potential pitfalls, with legal and regula- Thieves have become bolder in their aims to clarify the issues surrounding tory restrictions.” efforts to steal private cars, increas- the subject. Amanda Blanc, Towergate deputy ingly turning to burglary to steal car The publication outlines the regu- group chief executive, added: “It’s keys before driving off, according to AA latory and legal position as well as Graeme Trudgill: Providing clarity about time there was clarity on this Insurance. Referring to recently revealed providing information on what a limi- subject. This is really about brokers crime statistics for 2008/09, the com- tation of liability clause or agreement clarity regarding limitation of liability putting their own risk management pany said there had been a 19% upsurge may contain. when advising clients. It needs to be advice into practice while still provid- in vehicles stolen following domestic Graeme Trudgill, technical and cor- done fairly.” ing their clients with a good level of burglaries, despite a 14% fall in car thefts porate affairs executive at Biba, said: He explained that clauses may protection.” overall. Simon Douglas, director of AA “Many professions such as accountants, become unenforceable if certain Finan- As part of the Biba professional Insurance, said: “Our own insurance solicitors, surveyors and architects are cial Services Authority (FSA) regulatory indemnity initiative, there are three claims statistics show a similar trend doing this already but there are a lot of requirements were not met and pointed Biba-accredited brokers that can help with an average value of cars taken rules and regulatory requirements that out that brokers needed to explain to members with issues raised in this using stolen keys of just over £10,000 brokers need to be aware of. clients the details of any arrangement document – Lockton Companies Inter- – which underlines the increasing deter- “The aim of the publication is to and refrain from using blanket clauses. national, Towergate Partnership and mination, patience and ingenuity of help members understand and provide “There are very strict rules and if you Howden Insurance Brokers. thieves targeting upmarket cars.”

Marsh has urged companies based in England to review their health and Fraud crackdown calls for travel claims transparency safety procedures following the intro- nsurance experts have called for an while this was often talked about, it due to the volume of claims compared duction of the Fire Safety (Employees’ Iindustry-wide solution for sharing never progressed further. with their respective value. Capabilities) (England) Regulations travel claims information in a bid to “The ultimate goal is for us to be able She said while the Cue pilot was a 2010, which came into force on 6 April. ﬁght fraud. to fight fraudsters effectively and pre- “first good step”, there needed to be The new regulations require employers Travel claims data is currently being vent as much fraud as we can. Surely it an industry-wide sign-up in order for to take into account employees’ capa- piloted on the Claims and Underwrit- is logical that all insurers – regardless of there to be any benefit, calling for bilities regarding fire-related health ing Exchange (Cue), a central database what sector they are in – should openly involvement of the Insurance Fraud and safety when entrusting fire-related of motor, home and personal injury/ share information,” she added. Bureau (IFB) to steer progress. tasks to them. Kevin Molloy, UK leader industrial illness incidents. There has Asia Nasir, a spokeswoman for Esure In response, Richard Davies, IFB of health and safety in Marsh’s risk con- also been discussion over whether it travel insurance, said that although board member, said: “It is completely sulting practice, said as the regulations should be included, alongside motor potential costs had slowed progress, realistic that travel insurance could applied to both present and future and household, on Insurance Hunter, there was an appetite to share travel be added to the Hunter database. hires, all employers should review their a central anti-fraud system designed to data as the industry was just as vulner- The travel insurance industry needs to current fire-related health and safety combat activities such as identity theft able to fraud as other sectors. ensure all the smaller systems are tied appointments. and money laundering. In agreement, head of financial crime up together and the IFB has a role in However, Julie Smith, managing at LV, Ursula Coulibaly, said the rea- making sure the necessary conversa- Groupama Insurances has appointed director of Insure and Go, said that son why data had not been shared was tions take place.” risk management survey provider, Risk Stop, to provide commercial policyholders with an end-to-end risk management solution. Malcolm Smith, Aviva website spreads the benefits of group risk commercial lines director at Groupama viva UK Health has launched a of employers did not know what the Steve Bridger, head of group risk, said: Insurances, said: “For the past seven Awebsite to educate brokers on the term ‘group risk benefit’ meant, while “We believe that education is key with years, Risk Stop has provided the risk beneﬁts of selling group risk cover. almost two thirds of those questioned regards to group risk – there is a wealth requirement follow-up process for The content includes video clips of (63%) did not have any group risk prod- of opportunity out there and we want Groupama once a survey has been experts discussing topics related to ucts within their benefits package. to give our intermediaries the tools to completed. Their appointment to also group risk such as early intervention, The marketing campaign, called Let’s enable them to take full advantage.” undertake the risk management sur- claims management and rehabilitation. Talk Group Risk, has been designed to The campaign will be supported veys will provide a seamless service Research conducted by Group Risk help bridge this gap and emphasise the through offline marketing and sales sup- – resulting in a faster process.” Development (GRiD) showed that 41% available opportunities. port literature has also been updated.

18 Insurance Age May 2010 www.broking.co.uk “TheﬁrebeganinaBristol warehouse and spread to HighStreetsacrossBritain’’

A major ﬁre doesn’t just damage property, it can destroy supply agreements, consumer goodwill and share value. That’s why FM Global takes a different approach. We are engineers as well as underwriters. So we can work with clients to understand and manage the critical risks intheirsupplychains,andhelptopreventaloss.Andiftheworstdoeshappen,theycanrely on us for prompt settlement. In short, we don’t just protect buildings, we protect business. For more information visit www.fmglobal.co.uk, or speak to an FM Global representative.

Secure the value you create

NEWS IN BRIEF Industry risks financial penalties One Group has announced the expansion of its business into the medi- for breaching data protection cally-impaired sector. Iain Sykes has been appointed as managing director sioner to issue fines of up to £500,000 of the new subsidiary company, which By Liz McMahon for data protection breaches. will launch Goodtogoinsurance.com Simon Godfrey, director of security in June 2010. He reports to One Group rokers and insurers are exposing solutions at independent software com- chief executive, Paul Byrne. Goodto- Bthemselves to regulatory ﬁnes for pany CA, which commissioned the study, goinsurance will specialise in travel not organising their data storage prop- said: “It is possible to put technology in insurance for medically-impaired travel- erly, a new study has claimed. place to control how employees use lers with no age limits. Mr Sykes has Industry analyst Quocirca found that data. The recent high-profile cases have worked as a travel insurance specialist only half of financial services organisa- led to increased customer awareness. since 1972 at managerial and board tions, with a large section of those “Companies have a responsibility level with various companies. questioned being brokers and insurers, to control information and should be had a system in place that was able enforcing a clear policy that allows Moneyexpert.com is the latest to identify and classify different types Simon Godfrey: “Companies have a employees to share information in a comparison site to join Open GI’s e- of data – meaning they could not tell responsibility to control information” safe and regulated way.” aggregator panel, bringing the total whether an outgoing email contained CA has been working closely with number to 15. E-aggregator aims to sensitive information. He added that the Financial Services insurer LV to streamline its protection enable brokers to link their websites to Furthermore, it showed that just 25% Authority intended to increase fines for processes and controls. aggregators in order to increase their had deployed any form of data loss data protection failures in 2010 and that The report was based on interviews chances of appearing at the top of the prevention software. the Information Commissioner’s role in with 270 European enterprises. A list and win additional online business. Senior analyst at Quocirca, Bob this area had recently been increased. quarter of respondents were from the Mark Woodhead, insurance channel Tarzey, said the findings were puzzling It is now possible for the Commis- financial services sector. manager for Moneyexpert, said: “Open given that the majority of respondents GI’s e-aggregator solution is a perfect said they expected regulation regarding For the latest e-commerce news fit for our price comparison model. The data privacy to increase over the next www.broking.co.uk/category/technology technology they provide will enable five years. more brokers to increase their online presence and win more business.” Chesterfield website targets high-risk policyholders IGI Insurance has launched its new online broker portal, Iris. Iris is an loyd’s intermediary Chesterﬁeld In- the policy would cover losses incurred gerous occupations have real difficulty online service that has been designed Lsurance Brokers has announced the indirectly from war and terrorism along obtaining any type of insurance cover. to allow brokers to instantly quote, launch of a new website designed to pro- with a range of personal accident and life “Generally, brokers will assist on large incept cover, facilitate message vide cover for those operating in high- benefits including death, disablement, group schemes but on an account with transfer agents and produce policy risk territories or with high-risk jobs. income replacement, medical expenses a small premium it can cost a broker documentation in minutes. It also pro- While the website, which is expected as well as kidnap and ransom cover. more to handle in administration than vides brokers with access to a selection to launch in mid May and will cater The offering also includes access to a the brokerage that is generated.” of IGI’s niche products including cara- for sectors such as oil and gas work- 24-hour emergency response provider, Chesterfield said that brokers could van, residential let property and gap ers, and security professionals, will be on hand to deal with medical assistance access the website in order to individu- insurance. Keith Wardell, managing available worldwide, Chesterfield said emergencies, as well as a travel provider ally apply for cover online, select the director of IGI Insurance, said: “We’re it expected it to be used predominately that can assist with bookings. coverage and sum insured and then delighted that Iris has now launched. by people working in Iraq, Afghanistan The spokesman said: “Individual con- print the policy. He said they also have We are already receiving some very and Sudan. tractors and personnel that are operating the option to pay by credit card in positive and encouraging feedback A spokesman for Chesterfield said in the world’s hotspots or have dan- monthly or annual payments. from the brokers that have used it.” Rival Insurance has announced its Internet rules UK personal lines distribution market intention to venture into the intermediary market with an online self-drive hire he internet is fast becoming the Steve Lathrope, of the insurance gator sector was growing market share, fleet offering. Rival said its management T“only” way to purchase personal industry practice at Accenture, said the he warned high levels of competition software programme could pre-qualify lines insurance in the UK as online impact of these trends had been exacer- among the major aggregators meant the driver and the rental vehicle in real customers become less loyal and more bated by the “phenomenal” rise of the their profits were static or declining. time, minimising risk to the rental com- price sensitive, according to a recent aggregator channel. “Accenture expects to see a more fun- pany and insurer, which could result in consumer survey. “Providers will need to develop damental shift in their business models the possibility of reduced premiums. Global management consultants distinctive capabilities to survive and in the next two to three years. Aggrega- The insurer said it developed the risk Accenture found that the UK led the prosper. Insurers with strong price opti- tors are investing now to adapt their management software in order to pro- rest of Europe in the extent and pace misation and customer segmentation models, and insurers need to be doing vide a comprehensive rental company of online insurance with 81% of online capabilities are able to benefit from the same to stay ahead,” he added. package for self-drive hire organisations motor insurance customers planning aggregator growth, by acquiring their The study was conducted between including rental agreements, export to shop around at renewal and only target customers while maintaining December 2009 and January 2010 accounts procedures, calendar book- 17% planning to renew with their cur- control of their loss and expense ratios. and questioned more than 1,000 UK ings, charts and fleet utilisation. rent provider. Although Mr Lathorpe said the aggre- consumers.

20 Insurance Age May 2010 www.broking.co.uk E-commerce

Concern for rural brokers as NEWS IN BRIEF The aggregator market will either Broadband Tax plans ditched dissolve or consolidate within three years resulting in consumers having facilitating tools such as video confer- the choice of only a “handful”,accord- By Liz McMahon encing and social networking. ing to Beachcroft. The law firm’s report The Country Land and Business Asso- Learning to live with the Aggregator, said ural broker business could suffer ciation (CLA) said its main concern was the sector sales growth would slow Rafter the Government scrapped that leaving next generation access in and then plateau, with the estimated Broadband Tax plans designed to en- the hands of market forces, as proposed ceiling of 60% of motor insurance sales able high-speed internet to be rolled by the Conservative party, would exac- being reached within the next two out across the country. erbate the rural-urban divide. years. It said the market was ripe for The 50p-a-month tax, which would Charles Trotman, CLA head of rural consolidation, as the need to gener- have been applied to all households business development, said: “The Gov- ate large revenue streams to fund big with a landline telephone, formed a ernment is seeking to encourage the advertising budgets combined with the major part of Labour’s strategy to public to use online services. However, pressures of slowing sales growth. ensure everyone could access super-fast Therollingoutofbroadbandcableto at some stage in the future this ‘carrot’ broadband by 2012. However, it was rural areas could prove very expensive will turn into a ‘stick’.” Whitespace Software has launched dropped from the Finance Bill shortly Lyddington, a village in Rutland, felt a new web-based claims management before Parliament was dissolved. large proportion of these were based so strongly that it collectively raised package aimed specifically at bro- Mark Seemann, product strategy and in rural areas, they would be excluded £37,000 to ensure 40mbps broadband kers. Claimsuite for Brokers has been development director at Outsourcery, from the business benefits of having access for all its inhabitants. designed to offer customised logo and said: “It is simply not good enough to super-fast broadband. Chief technology officer at Edge IPK, branding. Andrew Sedcole, managing push the burden back on to businesses. “This would have serious implica- Dharmesh Mistry, said this approach director of Whitespace, said: “Brokers In effect, it causes a rural-urban digital tions not just for the recovery but was not necessarily the most cost-effec- want to offer a level of service to their divide, which is strange for a Govern- also the future of Britain in a global tive solution. clients that makes them stand out. Cer- ment preaching equality.” economy,” he warned. “As always in technology, there is tainly, offering a white-labelled claims He said that small to medium-sized Broadband enables businesses to more than one way to skin a cat – the management software solution is a enterprises (SMEs) were “the engine download documents more quickly, question is how much is broadband route that many brokers are exploring.” of the British economy” and that as a transfer large volumes of data as well as worth and how long will people wait?” Marsh has launched Marsh Asset SOUNDBYTES Manager, a personal insurance and asset management system available What is Beazley Access? the system is very easy to use, particu- l Quotes given in any currency on a complimentary basis to its private Beazley Access is an online quote and larly the clear directions, and the way l Cover in any country where Lloyd’s insurance brokerage clients. The secure bind system for brokers, providing the view screen opens and collapses is licensed and the documentation web-based system has been designed event cancellation and liability insur- depending on exposures. can be accepted in English to enable individuals to file and store ance. The web-based platform enables l Terrorism and non-appearance all their insurance documentation and brokers to obtain a single quote for How will this benefit a broker’s product enhancements asset information, including photo- multiple events worldwide, for a range business? l The ability to track the status of an graphs and receipts. In developing the of sporting, charity and trade show Beazley Access provides brokers with enquiry at the click of a mouse offering, Marsh employed the same events, without the need for direct a convenient system that enables technology used by UK auction houses contact with an underwriter. them to arrange cancellation and Beazley Access is supported by Beaz- to manage their assets. liability cover for their clients’ events ley’s contingency team in London, so How much does it cost? that previously might have been cost if an enquiry falls outside the scope it The Institute of Insurance Brokers It is free for all registered users. prohibitive, making this cover more will be automatically referred to the (IIB) has enhanced areas of its website, widely accessible. team, which will contact the broker. such as ‘Find a broker’while also intro- How many brokers are using it at ducing new facilities like ‘Viewpoint’, present? The system provides: Are there any future developments which will feature industry opinions. The system has been tested by half a l Specially tailored wordings planned? Commenting on the new site, IIB’s chief dozen brokers and will be rolled out l A back-office payment system that Not at present, but additional prod- executive, Barbara Bradshaw, said: to their regional offices over the next enables brokers to split commis- ucts and product enhancements “It’s more important than ever for our six to 12 months. sion payments could be added in the future. members to have access to the right l Debit notes, policy wording and information, and quickly. This can now Have you had any feedback? policy documentation, which can Christian Phillips is contingency under- be achieved faster and users will find The main comments have been that be branded by the broker writer at Beazley Group navigation simple and more focused.

www.broking.co.uk May 2010 Insurance Age 21 Agenda

Going for growth inatoughmarket

here is little doubt that brokers have got oped. It is difficult for this type of acquisition dom lose more revenue than they save in staff Tit tough. The anticipated hardening of to fail and brokers with long-term aspirations costs. So poaching in the retail market has to the market is a long time coming despite bold should always be on the look out for potential done very selectively and is not the panacea words by insurers, the economy is only recover- purchases. When the consolidators were on often promoted. It works if the old broker ing hesitantly with the important construction their empire building sprees, prices became agrees to sell business under threat to the new sector still in the doldrums and insurers are too high for the average broker to compete broker without fighting to retain it. This is reluctant to increase commission as they try to with but this has now changed. Independent often the best solution. It is also a good strat- reduce their overall distribution costs. Competi- brokers can afford the prices and finance is egy if the person provides a much needed skill tion among brokers is fierce as businesses are available through the broker’s bank, insurers or to develop or consolidate a market segment. more willing to obtain competitive quotes and specialist providers such as Macquarie bank. The third option is to go for organic brokers are more aggressive in marketing. growth through increased marketing and It is estimated that market premium income Local links sales. For most brokers that are process led for commercial insurance dropped by more Purchases of brokers that are located more and have relied on recommendations for than 5% in 2009 with little prospect of any remotely from the acquirer need to be care- growth, this strategy nearly always fails. It is a increase this year. The personal lines sector is fully considered. Most are very high risk and really tough battleground, with a lot of dirty more optimistic with rates hardening, but for often fail to realise their potential. It is difficult fighting and tactics for which most brokers most brokers this is only a small part of their to make savings, the risks of client and staff are ill-equipped and do not have the culture business. This scenario puts further pressure defections are greater and management time is or determination to win. Most dabble in mar- on brokers’ finances where some 85% of costs often out of proportion to returns. Everyone’s keting and sales for a while so they can tick are fixed, leaving them struggling to maintain remote purchase is likely to be someone’s bolt- the box but quickly revert back to type when profit levels in this climate. on and prospective buyers should be wary of rewards are less than fruitful. The money Brokers have four options: companies that are prepared to sell to remote spent has been wasted. To improve new busi- l sell their business at what might be seen as buyers rather than local ones that can afford to ness from say 5% of existing to 10%, seems the bottom of the market; pay more. The latter often knows more about a small step but in reality requires a massive l match costs to falling income – mean- the business than a remote buyer. consistent commitment in time, money and ing salary freezes, staff cuts and a financial The current vogue in growth gain is to hire resources. Very few brokers have the skill or overhaul; people or teams from other companies on will to do this. Going for organic growth can l increase income through charges, supplier the expectation that they can bring enough give the impression to staff that the business is reviews and joining networks; business with them to more than cover their tackling problems but, like all cosmetics, only l grow the business organically or through costs. The hunting ground tends to be dis- lasts for a limited period and is expensive. acquisition. enchanted staff of consolidators. The logic of For brokers that wish to continue prosper- The easiest and often best way to grow a this approach on paper seems attractive but ing in the current tough market, bolt-on local business is by acquisition. Most brokers have the reality is that if growth over costs is the acquisitions are the best tactic. Recruitment good processing skills and are strong at build- sole criteria, the strategy in most cases fails. of people and teams should be treated with ing relationships. The majority of businesses Consolidators fight like hell to prevent ex-staff caution, promises realistically scrutinised and are happy to stay with their existing brokers from poaching clients by enforcing rigorous business acquired should be considered a bonus and are prepared to give an acquiring broker a non-solicitation agreements and this often rather than essential. Brokers should realisti- chance before looking elsewhere. Acquisitions means a year of funding until businesses can cally examine their own skills and commitment are therefore usually very successful for inde- be approached. Client-professed loyalty to the before embarking on any lead generation or pendent brokers making the occasional well recruited member often evaporates and the marketing initiative. Unfortunately, for many, thought through purchase. The ideal buy is a anticipated volume of business seldom moves. the best strategy in the current market is to small bolt-on of another local broker. Business Most businesses recognise their own vulner- drastically cut costs as quickly as possible or take can be consolidated easily, staff and facili- ability to staff defection and are reluctant to the hit of reduced profits. n ties costs reduced, income increased through condone this trend in others. Loyalty to the higher commission and often cross-selling broker rather than the person is usually higher Email Tony Cornell of Cornell Consulting at opportunities are available. Normally, some than claimed at the interview. Brokers that [email protected] latent gems are discovered that can be devel- have lost a supposed key member of staff sel-

22 Insurance Age May 2010 www.broking.co.uk Opinion

Sponsored by:

REASONS WHY BIBA THINKS YOU SHOULD BE THERE

There are many reasons why the Biba conference and exhibition has become an unmissable event in the broking calendar. Here are just a few: ● It’s the biggest insurance event in the UK. It attracts the senior management from all sides of the industry – brokers, underwriters and myriad associated sectors that work closely with them ● The exhibition is the largest gathering of service providers under one roof. Brokers looking for new products, new business sectors or alternative suppliers can meet like-minded companies ready to do business in the broking market ● Staff from all Biba members are welcome at the conference and exhibition completely free. The value of this amounts to £1,100 per person ● Non-member brokers and intermediaries can attend the exhibition completely free. The value of this is equal to £800 per person ● The programme has been structured to help those brokers that can only visit for one day. Each conference day has two keynotes, one insurance specific and one general interest, and a choice of three highly topical and informative seminar sessions ● For the first time, Biba is introducing a fringe programme, which is open to both conference and exhibition visitors and provides even greater choice of structured seminar subjects Paneldebate,fromleft:SandyScott, Dockland’s Excel Centre is hosting this Nick Starling, Walter Merricks, Alec year’s conference and exhibition Finch and Jeremy Heales

First Recovery Lindenhouse Software FirstAssist Legal Protection Lockton Fitch Ratings Lorega Fortis UK LV Freeth Cartwright Markel RSA GAB Robins UK Markerstudy Group Rushton International Gallagher Environmental Marketform RWA Group Government of Gibraltar MSL Legal Expenses Insurance RWS Group Groupama Insurances Nacora Insurance Brokers SSAIB Guernsey NIG SSP Harris Balcombe Group Northern Marine Underwriters Standard & Poor’s HCC International Insurance Novae Group Stephensons Solicitors/Morisons Solicitors Heritage Insurance Management Online Insurance Jobs Sterling Insurance Group Hiscox Insurance Open GI Stride Home & Legacy Paladin Underwriting Agency Supercover Insurance Howden Insurance Brokers Palladium Insurance Marketing Services Swinton Group HSB Engineering Insurance Pancentric Tasker & Partners IGI Insurance Company Peninsula Business Services Temporary Cover Ignition NBS Pinsure – Pi4U Thatcham Imperial Consultants Post Magazine THB Infoterra Premium Credit The Co-operative Legal Services Insurance Age Professional Broking The Insurance Charities Insurance Times Professional Insurance Agents The Insurance Network Isle of Man Finance Provident Insurance The MPLC J.R. Clare Underwriting Agencies Provisional Marmalade This Insurance Jacksons Claims Group Proximo Thomas Miller Advisory Services Jubilee Managing Agency Pythagoras Communications Tokio Marine Europe Insurance K Drewe Insurance Brokers QBE Towergate Partnership Keelan Westall inc BIBAlet Qdos Broker & Underwriting Services Transactor Global Solutions Kindertons Accident Management Qliktech UK Travelers Insurance Lawshield UK RKH Wholesale Solutions ULR

Legal & General RL Davison & Co Vertafore 38▲ LFC Shield Rok Insurance Services Willis Networks www.broking.co.uk May 2010 Insurance Age 37 Biba conference guide

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SEMINAR PROGRAMME FOR DAY ONE SEMINAR PROGRAMME FOR DAY TWO

Wednesday 19 May, 16.10 – 17.00 Thursday 20 May, 10.30 – 11.20

Stream one Stream one Claims wars – the motor session Strength under pressure Patrick Smith, chairman of Swinton and Biba, Phil Bird, director of claims at Groupama Insurances and Chris Hunter, QGM David Sandhu, chief executive of Ai Claims Solutions Things look like they are going to liven up con- Fingers crossed that this will be a rather fraught affair with an insurer, a broker and a claims management siderably on Thursday with a session hosted by company talking about claims. They will discuss the Jackson report, new rules from the Ministry of Justice a man who apparently had “the world’s most and insurers’ withdrawal from the Association of British Insurers’ general terms of agreement. If tempers dangerous job, in the world’s most dangerous are going to fray at any of the discussions, this is the one. place”. As the British Army’s most experienced counter-terrorist bomb disposal specialist in Iraq, Stream two Mr Hunter risked his life on a daily basis and it Getting British businesses online appears the point of this talk is to inspire you all Practical help for brokers to come out of the recession fighting… or some- Emma Thorn, special projects manager at Enterprise UK thing like that. If nothing else, it should be great to sit back and listen to the tales of daring do. This session offers practical guidance for brokers currently without a web presence, something that is increasingly crucial to any business. Ms Thorn will outline how brokers can take advantage of a new joint Stream two venture between Google, Enterprise, the Department for Business Innovation and Skills and e-skills to Facebook? Twitter? Linkedin? Are social networks help businesses get online. a complete waste of time? Or the next big thing in broker marketing? Stream three James Prebble and Bryan Bosak, digital strategists Real business issues – real business solutions at Pancentric Digital Jonathan Clark, technical director and Harry Roberts, director of technical risk and compliance at Cunning- ham Lindsey This is the session for new fangled ‘applications’ such as social media. For those of you who are not Although this may sound like a bit of a dry one, it is definitely worth a look as the topic under discussion aware of such things then take a wander down. is actually pretty important. The speakers will look at real life examples of disaster recovery from a claims You might be baffled by what is discussed but if perspective and examine three aspects of business recovery: business interruption, buildings and the role you manage to keep up then you might be able to of the new claims professional. If delivered in the right way, this could be fascinating and contain vital drag your company into the modern age. Getting information to pass on to your clients. on board may just give you that edge you’ve been looking for and this session promises to provide examples of successful use of social media and will debate whether it really is suited to the broking sector.

Stream three Professionalism in broking – we’re only as strong as our weakest link Chartered Insurance Institute (CII) panel debate: Anthony Gould, editor-in-chief at Incisive Media, Chris Hanks, general manager at Allianz Com- merical, Julian James, chief executive of Lockton International, Stuart Reid, CEO of Bluefin and David Slade, chairman of Perkins Slade

Professionalism. Everyone bangs on about being a professional but this discussion will analyse the level of professionalism existing within the broking community, how to raise that and whether qualifica- tions actually allow a business to demonstrate better value for the customer. Expect to hear plenty from the CII about how you need to make sure everyone in the company does their exams but they’ve got a point – every other profession has high stand- For the latest conference news ards of entry. Why not broking? Eric Galbraith www.broking.co.uk/tag/biba-2010

38 Insurance Age May 2010 www.broking.co.uk Come and talk to us at the BIBA Conference on 19–20 May. Now including You will find us on Stand K2. Financial Failure Protection as standard The new and improved face of travel insurance...

Your customers can enjoy excellent cover, with many enhanced benefits including: • Single and annual multi-trip cover with £10 million medical cover • Independent travel for all insureds, including children • No terrorism exclusion • A family policy can cover dependent children under the age of 18 years (or under 24 years if in full-time education) • Many hazardous activities (eg scuba diving) are covered as standard • Single excess applies per family, per incident • Infants aged under 4 years are covered for free on any adult policy • Adults can be covered up to the age of 85 on a single trip policy, 75 on an annual multi-trip policy • Up to 45 days any one trip, with unlimited trips on an annual multi-trip policy (31 days for persons aged 71 years to 75 years) • Option to upgrade from 45 days to 60 days on an annual multi-trip policy for persons aged under 71 years • Up to the maximum age for winter sports • Pre-existing medical conditions may be covered, subject to medical screening • Cover for the insolvency of the airline and other end supplier not forming part of a package holiday

Exclusive to BIBA members, our BIBA Protect Travel Insurance Scheme provides you with a web-based solution enabling you to sell travel insurance through your own branded website, and enables you to upgrade policies mid-term and renew online. Our scheme is also well suited to supporting affinity schemes and employee groups. As part of the Tokio Marine Group, we are rated AA by Standard and Poor’s, have over US$31 billion of annual premium income (sum of net premiums written and life insurance premiums) and assets in excess of US$167 billion. Our offices throughout the UK will ensure that you receive the support you need. To obtain your choice of distribution, either pad scheme or on-line purchase, e-mail [email protected].

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Underwritten by Tokio Marine Europe Insurance Limited (except Legal Expenses, which is underwritten by DAS Legal Expenses Insurance Company Limited and Financial Failure Insurance, which is provided by International Passenger Protection Limited) Member of the Association of British Insurers Authorised and regulated by the Financial Services Authority Firm Reference Number 202574 Registered Office: 150 Leadenhall Street, London EC3V 4TE Registered Number: 989421 England Figures correct as at 31 March 2009 Find out what 25,000 of your peers are looking at*

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2007: Jessica Portsmouth

essica Portsmouth was the winner of an Jall-female shortlist in 2007 when she was broker sales manager for Lloyd and Whyte. According to her then branch manager, the then 29 year old deserved the award because she was “a highly motivated insurance individual who, given the current market conditions, continued to focus on the provision of a quality local personal lines service, which consistently outper- formed all industry statistics”. This attitude has not faltered since. During the year she won, Jessica joined Towergate Risk Solu- tions as sales and marketing manager. Three years on, she is now deputy managing director of five offices across the South West. Beyond managing her significant responsibilities in-house, she has recently been integral in forging a relationship with children’s sports charity the Lord’s Travellers. In a bid to give other would-be Young 2006: Roshan Brokers a helping hand, she has also been working on a national apprenticeship programme with Tow- Choolhun ergate Business School. 2008: Kate Reilly Jessica says that the award had a “huge” impact on oshan Choolhun was 26 when he was named her career and urges companies to put their young ominated by her mentor and managing direc- Ras Biba’s number one Young Broker in 2006. talent forward. She says she plans to stay with Tow- Ntor, Kate Reilly was the top Young Broker of He had worked for Chesterfield Insurance Brokers ergate as her career progresses due to the variety and 2008. The then 27-year-old branch manager joined for six years and consequently already had a sizable pace it offers, alongside its “work hard, have fun and Higos as a trainee when she was 19. It was her grasp of its niche area of accident and health cover do good ethic”. energy and “hugely positive attitude to work” that for extremely high risks. Roshan feels that it was wowed the judges then and these qualities have been his understanding of client need in an arena where put to good use in the relatively short time since. broker advice is so crucial that set him apart from Kate is now a regional manager for Somerset and the other entrants. currently runs three branches. She made the decision Joining Chesterfield at the age of 20 after just to move away from the forefront to focus on train- two years’ experience at a Lloyd’s syndicate, ing and developing other young brokers. While she Roshan is now an assistant director. He says he says she misses the direct contact with clients, she has progressed naturally through the ranks and is finds supporting new brokers to excel in their exams now driven by the desire for Chesterfield to be extremely rewarding. the number one firm in its area of expertise. On winning the award, she said: “I don’t think Winning the award has impacted significantly I realised how much of an impact it had on me at upon Roshan’s career: “It was brilliant press the time. In hindsight, it was rewarding to be nomi- coverage. Due to winning, I was on the front nated by my peers. It is such a recognised award of the Lloyd’s website and after that every time Jessica Portsmouth and, even now, when I meet with insurers they men- collects her award I approached a client, they took me much from Lord Sheikh tion it and that feels pretty good indeed.” more seriously. It broke down a lot of barriers and opened as many doors,” he adds.

Derek Thornton, former chairman of Biba, presenting the 2009: Neil Grimshaw awardtoNeilGrimshaw iba was not the only body to deem Neil Grimshaw worthy of praise in 2009. It seems Bnot only bad things happen in threes: in a mere eight months Neil won a hat-trick of young broker accolades, including Insurance Age’s own award. Neil started his own brokerage, Ravenhall Risk Solutions, in 2006 when he was just 25. By the time he won the award, Neil had seven staff on the books and the business started to make a profit a little after a year from inception. Ravenhall now has a gross written premium of £5m, solid arrangements with several major insurers and an impressive variety of bespoke schemes. On his success, Neil says: “We are doing very well and we have been cautious. It is all about doing the job properly and just being honest with customers.” When asked how the award has impacted his career, Neil says: “We have gone from being a new start-up to being an award-winning one. People may have questioned us at the start but now those questions have stopped.” ■

42 Insurance Age May 2010 www.broking.co.uk CoverIndustry Feature professionalism

Sponsored by:

Niches are an advantage that build trust with customers and transcend geographical barriers to acquisition Where to now? and enhancing retention levels. Insurer assistance That’s probably enough of telling you how to run The rapidly changing world is looking at this option. You can be sure that providers your business so what about insurers’? What can presenting fresh challenges for will appear quickly to meet a growing demand. they do to help brokers? Clearly the bottom line for The final challenge is the external political envi- all of us is, well, the bottom line. The closer the rela- brokers. Keith Hector discusses ronment. The potential change in Government tionship between insurers, brokers and customers, provides even more uncertainty in a very dynamic the better the bottom line will be for the industry. howtheymustembrace and evolving backdrop. Will the next Government It needs to be more than just day-to-day trading. developments in order to prosper change the regulatory regime and demands? Will the Insurers need to consistently provide highly skilled impact on businesses have a positive effect on stabil- relationship managers with an understanding of each andexploreswhatinsurerscando ity and growth? broker’s business strategy and the ability to design to enhance service their offer and response around that. We must The way forward understand that no one size fits all. Broker firms If client retention and acquisition are the ends, the have remarkably different profiles and need quite his month, many of us will attend the British means are varied. Communication is the key. Brokers different types of service and support. It’s all about TInsurance Brokers’ Association (Biba) annual are generally very good at customer retention but, insurers developing a bespoke service and finding conference. It’s always a great forum for brokers as we know, past performance isn’t a guide to the ways of adding value for their brokers and helping to discuss the burning issues of the day – and for future. Assuming you are working hard on your cus- them grow. As always, communication is crucial and insurers and intermediaries to get together and talk tomer service, make sure your clients understand the is something we can all improve. Whatever changes business. Principally, how each of us can win more cost and value of the independent advice and support and challenges the market presents, it’s good to talk. of it by combining efforts to better serve existing you provide. Ensure they are aware of what might Also on the relationship theme, there’s the front- customers and win new clients. happen to rates, and be close enough to line staff that brokers deal with. Insurers This year’s conference slogan ‘Professionalism in a your clients to be in the position need to ensure they have experienced, changing world’ is particularly apt. We’ve seen huge to give the best advice when savvy traders in all local markets, shifts in recent years – in the economy, regulation prices do rise. Trust directly in front of broking and the risks we need to understand and insure. counts for a lot if teams. These development Technology – in all its forms and applications – is clients consider underwriters need to be rapidly transforming the face of our industry. Main- shopping well trained, techni- taining a professional outlook is the only way to around. cally competent and embrace the outcome of these developments and Keeping empowered to make turn the threats into opportunities. up to speed speedy decisions for Of course, these changes apply across all businesses with tech- the customer. and sectors but the challenges they represent for bro- nology and Finally, and this kers and the action they will therefore need to take to improv- is so fundamen- stay ahead of the game is more important. In addi- ing IT is tal it seems a bit tion, the role of insurance companies in all this is also essential. obvious, it’s all vitally important. It may be about deliver- that other ing on the basics Broker challenges brokers can – claims service, The first is economic. Price has been a key nego- offer customers response and sup- tiation point since insurance began but, in recent a more competi- port, underwriting years, price competition has dramatically intensified. tive price simply strategy, footprint and Claims levels have, however, remained constant and through efficiencies deployment, market- with claims costs increasing, premiums will have to in their business. Bury- ing support, and pain-free rise. The challenge we face as an industry is that ing your head in the sand accounts settlement. Wherever many commercial customers will still be fighting is an option – but not one our two businesses touch, insurers their way out of recession and looking at options to that will be sustainable in the long have to deliver on their promises, to allow keep costs down. term. Even if your book is safe today, it is likely to brokers to successfully get on with their business. Clearly, this creates even greater pressure on be under increased pressure in a few years’ time and This is by no means an exhaustive list of the price. Many customers are reviewing their options. if you haven’t invested in some of the many tech- challenges and solutions that the commercial insur- They may look to reduce or change cover to nological and efficiency advances available, you will ance industry faces. It is key that we find solutions contain cost. Some may look to increase cover to soon be under threat. together through greater communication. The stabilise one element of the increased risk their The other strategy to focus on is marketing. I don’t upcoming Biba conference and its focus on main- business faces in a very tough economic climate. mean in the narrow sense of your advertising and taining professionalism in a changing world will be a They may look at changing their broker even promotion, but the overall plan of what you sell and great opportunity for us all to enhance our relation- though they are happy with their existing relation- who you sell to. There are added-value services you ships and dialogue. n ship, advice, support and service. could offer – risk management, or health and safety, The second challenge is how to embrace new for example, among many cross-selling opportunities. Keith Hector is distribution director at Axa technology and develop suitable solutions for our cus- But also consider what you are good at. You may Commercial tomers. While it hasn’t happened to any great extent not think you’re a specialist or in a niche market but, yet in commercial lines, in the small to medium-sized quite possibly, you are. Look at your book, re-evalu- For the latest conference news enterprise (SME) market, clients familiar with price ate your experience and see if you can exploit this www.broking.co.uk/tag/biba-2010 comparison aggregators in personal finance may start through special product or service focus or branding. www.broking.co.uk May 2010 Insurance Age 43 Inspiring “A wise man will make more opportunities than he finds” Francis Bacon

Inspiring

PB Management Event 2010 | 6 October | Marriott Grosvenor Square | London

Insurance broking is evolving rapidly, creating The PB Management Event provides a central a constant stream of new challenges for forum in which to debate these challenges and broker managers. work together to define solutions.

Don’t get left behind. Register today at pb-managementevent.co.uk

For more information about commercial opportunities at this event, please contact: Oli Henry on 020 7316 9071 or email [email protected]

Sponsored by This event has been accredited by the CII and can be included as part of your CII CPD requirement should you consider it relevant to your professional development needs Solicitors’ PI Quinn: the warning signs

Edward Murray traces Quinn Insurance’s somewhat chequered history it could not comment on current events over and above what it has already said publicly. andaskswhyregulatorsallowedittoremainanapprovedinsurerforso Should the situation unravel and leave Quinn longbeforefinallyforcingitintoadministrationlastmonth unable to meet its liabilities, there will surely be questions raised over the collaboration of these three bodies and their effectiveness in ensuring the quality of the insurance in place. However, the Irish gov- ould Bob Dylan possibly have been writing up almost 3,000 firms in the solicitors’ PI market. ernment has assured the FSA that it will cover any Cabout insurance when he penned: “You’ll not “Why would anyone use an unrated carrier?” he funding shortfall. see nothing like the mighty Quinn”? Probably not, asks. “Only certain smaller brokers used Quinn for Certainly, Mr Nimmo would like to see the FSA but as the saga around Quinn Insurance unfolds this business – certainly no broker of any stature was playing a more active role and has concerns that up there are going to be a host of other questions that placing any business with them.” to 30% of solicitors in the market were placed with are blatantly more serious and demand more in- He suggests that brokers that did place with one carrier. depth answers. Quinn should have been looking more closely at the He comments: “There is a huge public interest At the time of going to press last month, Quinn insurer and asking harder questions of it. element here. Should this carrier fail – and we do Insurance remained in permanent administration “Anyone who understands the potential volatility not know if it will or it won’t, but it is in adminis- but The Irish Financial Regulator had given a partial of these classes and long-term liability insurance and tration – then the consumer is potentially exposed green light for the insurer to return to underwriting who has been around for longer than 10 minutes to losses because the negligence insurance of some provisional motor insurance in the UK. knows that this stuff is highly dangerous, very vola- local solicitor will not respond to their claims. This is Apart from this concession, the regulator has tile and potentially very expensive,” he argues. a big public interest story.” been fairly tight-lipped over its specific concerns Mr Nimmo is not alone in his criticism of the However, for the brokers that placed business with Quinn. It has previously had wranglings with situation and other brokers have gone on record to with Quinn, there were sound reasons for doing so the company and back in 2008, following breaches express their incredulity at the developments. as Richard Brown, director of Prime Professions, in solvency rules, it doled out a record fine of A spokesman for Heath Lambert says: “Heath which has around 1,600 sole practitioner solicitors E3.25m to Quinn Insurance and a further fine of Lambert was not authorised to place business with with Quinn, explains: “The main issue that sole E200,000 to its founder Sean Quinn. Quinn due to its lack of a credible security rating. It practitioners face, which other solicitors don’t, is In the same year, Quinn Insurance pulled its credit was no surprise that in a challenging economic cli- the question of run-off where they have to keep a rating with Moody’s, raising eyebrows and forcing mate many were attracted by price alone, but it was policy in force for six years once they cease trading. many organisations to leave Quinn Insurance out of obvious the rise in claims – particularly in personal Because they are a sole practitioner there is not an their considerations. injury – and the continual soft market would eventu- ongoing business to cover them and so they need Shortly after, the Royal Institute of Chartered ally destabilise an insurer like Quinn.” run-off. What Quinn did was to offer a run-off situ- Surveyors dropped Quinn Insurance from its panel ation where the pricing for run-off reduced over a of approved professional indemnity (PI) carriers and Regulatory intervention period of time and eventually came down to nil if the majority of mainstream brokers have refused to So why, when there was this much scepticism they remained with Quinn and they were claims free. offer the carrier to their clients. around Quinn Insurance’s ability to deliver for That was the main single issue that made Quinn Neil Nimmo, executive chairman of Lockton Risk its clients, did the Solicitors Regulation Authority attractive to sole practitioners.” Solutions, was open in his surprise at the way in (SRA) maintain it as an approved insurer, the Finan- Commenting on the absence of Quinn’s rating, he which Quinn Insur- cial Services Authority (FSA) not step in to inspect added: “Every quote that went out from Quinn via ance had proceedings or the entire broker market not pull ourselves had a comprehensive covering letter that swept back from dealings with the company? dealt with the whole issues of Quinn’s security, their In the first instance, the SRA says that it did not rating and why they did not have a rating. have any concerns about Quinn and that it con- “We felt our role as broker was to make it clear to tinued to meet the criteria required to be an the client that here was a product that they could buy approved insurer. and they were entitled to buy for all of the right rea- It commented: “The SRA does not regu- sons, but here is the other side of the coin and it was late, vet or approve insurers. In order to a decision for the solicitor to make for themselves.” be eligible to be a qualifying insurer, an For its own part, Quinn remains adamant that it insurer must be an ‘authorised insurer’ as is capable of meeting its liabilities and after being defined by section 87(1A) of the Solicitors placed into permanent administration, Quinn Insur- Act 1974. ‘Authorised insurers’ are regu- ance chairman, Jim Quigley, said it was in the best lated by the FSA.” interests of the company, employees and policyhold- So what of the FSA’s duty to look into ers to work closely with the regulator to get the proceedings? It simply states that the Irish situation resolved as quickly as possible. Financial Regulator was the lead regula- As the Quinn Insurance story unfolds, the rights tor and, as such, the FSA had no duty to and wrongs of the actions of associated parties will inspect or raise questions over the financial become increasingly clear. Hopefully none will be solidity of the company. found wanting, although the prognosis is not great. n The Irish Financial Regulator, as proved by the fines it handed out in For the latest news on Quinn 2008, has had a close eye on Quinn www.broking.co.uk/tag/quinn for a number of years now, although www.broking.co.uk May 2010 Insurance Age 45 The event where brokers do business

Now in its sixth year, Broker Expo returns to the Ricoh Arena – home of Coventry City Football Club. Now in a bigger hall, with over 100 exhibitors, an improved Business Zone, the ever popular Chill-out Zone, expert-led workshops and unparalleled networking opportunities, this is the insurance industry event you cannot afford to miss. Attracting over 500 brokers in 2009, this is the event where brokers do business. Registration opens soon at www.brokerexpo.co.uk

This year 80% of the exhibition space is already booked. For information on booking a stand please contact James or Chris:

James Murray Chris Finnegan T: 020 7316 9296 T: 020 7316 9632 E: [email protected] E: chris.ﬁ[email protected]

Hosted by Organised by The event where brokers do business

Confirmed exhibitors include:

Now in its sixth year, Broker Expo returns to the Ricoh Arena – home ABBEY LEGAL PROTECTION Underwriting barbon of Coventry City Football Club. Now in a bigger hall, with over 100 insurance group exhibitors, an improved Business Zone, the ever popular Chill-out Zone, expert-led workshops and unparalleled networking opportunities, this is the insurance industry event you cannot afford to miss. Attracting over 500 brokers in 2009, this is the event where brokers do business. Registration opens soon at www.brokerexpo.co.uk

This year 80% of the exhibition space is already booked. For information on booking a stand please contact James or Chris:

James Murray Chris Finnegan T: 020 7316 9296 T: 020 7316 9632 E: [email protected] E: [email protected]

Hosted by Organised by www.brokerexpo.co.ukwww.brokerexpo.co.uk

ExpoDPS.indd 3 28/4/10 16:16:30 Volcano fallout A reputation StrandedinToulouseinthethick ofthetravelchaos,Martin Friel explains why it is public trust in turned to theinsuranceindustry,aswellas theEyjafjallajokullvolcano,that hasgoneupinsmoke ashes

ho would have thought that a volcanic erup- But the balance sheet of airlines is not what is of tion provides the opportunity for brokers to shine Wtion would provide the inspiration for a immediate concern. The majority of them have suf- a little as many of the policies sold through them feature in the UK insurance trade press? But here we ficient banking facilities to see them through this – including the Tokio Marine-underwritten policy are. Not content with losing the savings of a number incident. What should be of greatest concern to provided by the British Insurance Brokers’ Associa- of UK councils through the less-than-prudent lend- readers is how everyday travellers have been treated. tion – are providing cover for passengers who have ing practices of its banks, Iceland has embarked on a Brokers are, to a significant extent, reliant upon faced cancelled flights and huge additional costs. potentially more damaging escapade. the behaviour of insurers for their client’s percep- He does offer one warning though – the As you are all no doubt fully aware, tons of vol- tion of them. If the insurer doesn’t handle a claim Ombudsman’s reaction: “With a market that is split canic detritus spewed into the atmosphere from the in a reasonable manner, it is the broker that will get more or less down the middle, it is quite likely that Eyjafjallajokull volcano in Iceland creating an ash it in the neck from the client in the first instance. the Ombudsman will take quite a firm stance on cloud that paralysed European air traffic. The incon- Therefore, it is important to the public image of the this – indeed, I believe it is looking to fast track venience to millions of travellers is one thing but the broking community that insurers respond in a rea- complaints.” estimated cost is quite another. sonable manner to claims. At the time of going to press, David Frost, direc- So how disappointing it was to see so many An issue of duty tor general of the British Chambers of Commerce, insurers hide behind the sandbags of their contract Insurers that are not offering blanket coverage said the cost of the flight disruptions to the UK clauses when the travel claims started pouring in. have indicated that they will look at cases on merit economy was likely to have been more and will “consider delayed departure benefit” as a than £100m a day. Airlines have obvi- “goodwill gesture”. And therein lies the problem ously been the worst hit with some It is likely the Ombudsman will with the public perception of insurer behaviour. estimates putting their collective losses at take quite a firm stance on this Where insurers see it as going out of their way, more than £1bn. the public see it as penny pinching and bristle at the Since airlines experienced some very – indeed, I believe it is looking to suggestion that the industry is doing them a favour. painful losses last year, many are looking Isn’t travel insurance supposed to pay out when to their governments to bail them out. fast track complaints flights are cancelled, you get sick or your belongings But following the bank bailouts, is there are stolen? Surely if ever there was a time for insur- anything left? Peter Hayman ers to pay up, this is it. The other option if governments aren’t People may not have been covered by the details forthcoming is, obviously, insurance. In most cases, Insurers are quick to complain that they don’t get of their policy but the industry was presented with there will be no cover as airlines’ business interrup- credit when they respond to catastrophes and set- a golden opportunity to forsake a chunk of their tion cover is only triggered when material damage tle valid claims promptly, yet when a truly global collective balance sheet for one year in return for has occurred and, in this case, that has not hap- incident is splashed across newspapers, websites and invaluable public goodwill for years to come. If pened. The ash cloud has prevented airlines from television screens for a solid week, many play up to insurers were seen to be bailing people out, whether operating but has caused no direct damage. So it the stereotype. they were technically covered or not, it would have looks like insurers are home free on that score. Or as travel insurance broker Peter Hayman, of been a huge PR coup. PJ Hayman, puts it rather more compellingly: “As a As it is, many insurers have chosen to resort to Taking advantage travel insurance broker of many years standing I do type and, unfortunately, the decision by those that Indeed, Munich Re issued a statement making it find the situation both frustrating and annoying. If have decided to pay out may be overshadowed by clear the volcano would have little impact. Some- ever there was an opportunity for the travel insur- the wider attitude. what cynically however, it did suggest that it would ance industry to show a united front in the face of For many, the fallout of the volcano is not dust, now consider selling volcano cover. Ah, the insur- exceptional circumstances, this was it. ash and particles of glass, but that the true spirit ance industry – always alert to opportunities to make “Unfortunately, we have a situation where some and priorities of insurers have been exposed for the capital out of other people’s fear. insurers, particularly the larger companies, are world to see. This will be grasped by those left with This attitude simply exacerbates a perception of adopting the view that there is no cover for this the cost of their cancelled flights and holidays as the insurance industry that sees it as ever-ready to event (except on a few more obscure wordings or the final proof that insurance – despite what all the take the public’s money but seldom willing to part schemes). But a number of others, such as For- marketing says – is more concerned with protecting with it in the form of claims settlements. It matters tis and Equity, have adopted a more pragmatic the all-important profit. In years to come this may not whether this perception is accurate or not; what approach and are accepting claims as a ‘weather’ be seen as a golden opportunity missed and, not just matters is that the insurance industry has lived up to event.” that, a situation that did irreparable damage to the its fat cat, heartless public image once again. Mr Hayman does, however, think that the situa- industry’s image. n

48 Insurance Age May 2010 www.broking.co.uk Commercial e-trading

insurers, many brokers are faced with unacceptable delays and the costly chasing of information. Changing habitual practices in handling business can be difficult. Staff skills need to change and processes that are familiar but obsolete must be replaced. Every step in the new business and renewal process needs to be recognised, including time spent hunting for paper files and printing off copies. Brokers should look at how to optimise their technology. Client risk registers can automatically update if pro- grammed to do so, which begs the question: how much re-keying is actually self-inflicted? Often, an expensive system is only used to store information rather than eliminate a manual process. Some changes are more straightforward to implement than others. All account handlers will need access to the internet and office systems and an administrator to oversee all insurer passwords should be established. In addition, an audit process of who uses insurers’ web-trading platforms should be agreed to ensure this matches the broker’s preferred placement strategy. A bigger advance is finding the optimum way to transfer the premium, cover, terms and conditions Anne Hudson from the web and thereby avoiding re-keying onto outlines the benefits of the risk register. This is where making use of the broker’s own software system comes in. It is pos- commercial insurance sible to scan information in to reduce re-keying time e-trading and urges and some of this can be automated even where the insurer’s system is not compatible with the broker’s. brokerstoembraceweb Freeing up staff time will enable brokers to focus on self-service or risk being what they do best: sales and advice. The benefits of web trading are not just opera- leftontheshelf tional. New markets and opportunities arise when brokers successfully increase their brand reach to the virtual world. A well designed and interactive website can enable intermediaries to attract new business as prospects gain further information on the broker services out of hours and use quotation sys- Helping yourself tems to ascertain premiums. Broker websites can be extended to enable clients to self-serve so they get their policies via the broker’s site from insurers. ong gone are the days when web self-service with appropriate partners to provide commercial Another development is in relation to claims. Ljust involved insurers providing online simple broking expertise. Many brokers prefer their commercial clients to package products to brokers. Commercial lines e- There are also examples of traditional brokers that go directly to the insurer when an incident occurs. trading has moved on and the next development have restructured their business to grasp the oppor- Placing claims information on the broker’s website in distribution is to reach clients via web trading. tunities of web trading. Achieving this means looking makes it available to clients out of hours. Few cli- Adopting this type of approach could be hugely at how to allow customers to ‘self-serve’ broker offer- ents keep sufficient track of which insurers make up beneficial to brokers yet many are not doing so. All ings, examining the operational efficiencies of the web their full risk register but placing this online gives too often, brokers say their clients come to them and looking at how best to utilise insurer systems. them easy access. In addition, links to insurer’s claim for advice and therefore refuse to use web self-serv- forms and their claim helplines can be made. ice but how many more clients would they get if Streamlining Brokers often have a suite of value-added services. they could access products and purchase online? There are a number of questions to consider. How In fact, this can often be a key differentiator. Pro- The insurance industry spends a lot of time try- many insurer suppliers does the individual broker moting these services online with email links to key ing to segment the market but, in reality, web use and can these be streamlined? A first step could people demonstrates a willingness to assist. Emails customers are all types of people. A generation of be to utilise insurers’ web self-service systems for sent by potential clients via the website need to be managers is emerging that regards web trading as less complex business. A review of insurers’ prod- dealt with at least within 24 hours as this will form routine. An insurance broker without a website ucts and services is required, as well as looking at their first impression of the broker. would seem old-fashioned and clients expect that which offer streamlined systems combined with Brokers should embrace web trading and promote some service will be web enabled. good telephone support. advised self-service to their clients. In addition to That is not to say all brokers are lagging behind Rationalising the panel of insurers and the opera- improving operational efficiency, it will enable them in this regard. ‘New breed’ brokers, such as Moor- tional processes makes it easier for account handlers to grow their business without having to increase house, and aggregators have aligned their entire to gain in-depth knowledge of a reduced number staff numbers. Those that refuse to embrace web business to web self-service for clients and without of products, which can translate to more confi- trading risk losing clients to others that do. n legacy systems to shackle them they are rapidly dent handling of client queries. Web self-service growing. Their skill is in attracting great volumes also ensures control of data entry, reduced errors Anne Hudson is business development manager at to their web platforms, and they are teaming up and documentation. With traditional paper-based Markel www.broking.co.uk May 2010 Insurance Age 49 BROKER, INSURER AND EARLY BIRD DISCOUNTS AVAILABLE Contact Oliver Nevill at [email protected] or call 020 7316 9405

The British Insurance Summit 2010 22nd & 23rd September Grange City Hotel, London

Strategic thinking in a changing world

Post, the must-read weekly magazine for the UK general insurance Agenda highlights industry, already produces the sector’s largest and most prestigious awards scheme. This brand new senior level summit includes: • An in-depth roundtable session on regulation and Solvency II Now, the brand behind the British Insurance Awards is delighted to so you can check progress and find out how to further embed its announce the launch of a flagship conference catering for the entire structure and principles UK general insurance industry. Comprising a two-day programme of Access to the most senior industry figures who will cover the latest on essential strategic content and a networking dinner, the British Insurance • the economy, the new UK political scene and implications for insurers Summit 2010 will bring together insurers, brokers and service providers to hear from industry leading speakers and debate the issues affecting • Over 25 case studies and interactive discussions to balance our industry as we emerge from the economic downturn. interactive knowledge sharing with best practice learning • A chance to network in a professional but informal environment Speakers include:

Lex Baugh Amanda Blanc Adrian Brown Stephen Lewis president and CEO, deputy chief executive, UK CEO, CEO UK general insurance, Chartis Europe Towergate Partnership RSA Zurich

Bronek Masojada, Professor Douglas John Neal Sandy Scott chief executive, McWilliams chief underwriting officer, CEO, Hiscox chief executive, QBE European Operations Chartered Insurance Centre for Economic and Institute Business Research

Headline sponsors: Associate sponsor: For more information and to book your place, contact Oliver Nevill on 020 7316 9405 or email [email protected]

A limited number of commercial opportunities are available at this exciting event. To find out more about how you could get involved, contactRob Richardson on 020 7316 9800 or [email protected] This event has been accredited by the CII and can be included as part of your CII CPD requirement should you consider it relevant to your professional development needs. www.britishinsurancesummit.com Product review

Broker ratings Theproductsreviewedonthispagebybrokersareratedfromonetofive,basedonthepolicy’skeybenefits H Poor HH Average HHH Good HHHH Very good HHHHH Excellent

PRODUCT OF THE MONTH EssentialPLandELminusthepackage Product Key benefits individuals, clubs and associations Optima Liability Optima Liability provides cost-effec- where there may be minimal physical tive PL and EL insurance that small assets and liability cover is required in Underwriter to medium-sized enterprises (SMEs) isolation. Groupama Insurances require to operate, without them hav- If you have struggled to place these ing to buy property insurance or a non-tradesmen type risks in the past, Commission paid package product. or have ended up placing them via Standard commission 17.50% for pub- an underwriting agency, the Optima lic liability (PL) and 10% employers’ l Targeted at manufacturers, policy could be the solution. liability (EL) but variable with pre- distributors, retailers, offices, pro- As well as an indemnity to principal, mium adjustment fessionals, property owners, clubs the policy contains all the normal and associations extensions such as liability arising from Coverage l Ideal for SMEs with minimal assets damage to leased or rented premises, l PL and products’ liability up to or where property and liability cov- contingent motor liability and liability £5m limit of indemnity ers are split under the Defective Premises Act. The l EL £10m limit of indemnity l Quick quote available to brokers via third-party property damage excess is a team of experienced underwriters claims admitted under the policy par for the course at £250. The mini- Minimum premium l Provides costs and expenses l PL and EL insurance can be bought mum premium is low at £150. £150 at standard commission in defending health and safety from £150 The standard commission rates are prosecutions 17.5% for PL and 10% for EL. Most Excess l Indemnity to principal Comment brokers may have preferred a flat com- £250 property damage excess l Liability arising from damage to Tony Gibbs, sales director at Macbeth mission rate across the board as split leased, hired or rental premises Insurance Brokers, comments: “Bro- commissions can make system account Contact l Liability under the Defective kers will find the Optima Liability entry more complicated. Commercial Underwriting Centre, Premises Act 1972 policy a useful addition to their range Quotations are obtained via email Manchester l Contingent motor liability for of products as it caters for those sim- and the proposal is statement of fact. Tel: 08708 500 123 employees’ business use of their cars ple, but sometimes difficult to place, Email: [email protected] l Legal defence costs in defending liability risks. It is aimed at companies, Overall rating: HHHH TypicalcommerciallegalcoverblendedwithEPL Product Excess l Accountant's costs for representa- priced within a commercial combined Arag Absolute Business Legal £1,000 each tion of HM Revenue & Customs policy or where the EPL side of the l Pursuit of property damage, nui- risk can be provided as an extension Underwriter Contact sance or trespass claims to a directors’ and officers’ policy with Brit Insurance Andy Talbot, sales manager l Optional cover for contractual dis- the other sections remaining on an Tel: 0117 917 1685 putes and debt recovery optional legal expenses wording. Arag Commission paid Email: [email protected] l 24/7 legal advice, employee coun- seems to aim at the higher end of the 17.5%, variable upon request selling and tax advice helplines market, targeting businesses with 25 Key benefits l Online law directory with more or more employees with a minimum Coverage l Limit of indemnity £250,000 for than 100 downloadable documents premium of £1,000. The HR tel- Arag Absolute Business combines the legal representation costs, compen- l Premiums are based on company ephone healthcheck may interest some benefits of typical commercial legal sation awards at tribunal, damages payroll and brokers can use Arag’s but the other ‘frills’ on offer seem to insurance with employment practices or out of court settlements online quote system be nothing new. As a legal expenses liability (EPL) cover for employment l No prospect of success clause l No bordereaux. cynic, too often clients seem to get disputes – without the usual policy- l HR healthcheck stung by falling foul of the exceptions, wide excess that absorbs the majority l Cover for defence of business Comment conditions and warranties. Only the of claims. prosecutions, representation for Gary Proctor, divisional director at test of time will show whether or not professional disciplinary and regu- Oval, comments: “It is interesting that this product is best of breed. Minimum premium latory hearings, statutory licence a new entrant has entered the market £250 plus Insurance Premium Tax appeals and Data Protection Act when this cover is more competitively Overall rating: HHH www.broking.co.uk May 2010 Insurance Age 51 Market moves

A monthly look at who is moving where…

BROKERS Credit, where he was branch direc- Oxygen Insurance Brokers has hired director of personal lines operations tor of the Manchester office. Jeremy Steve Johnson as head of affinity, in a seven-year career with the broker. JBI International Insurance Brokers has Hughes, head of trade credit and Victoria Wiltshire as senior client exec- He left Aon to take up a position with taken on Iain Chalmers as business bonds at RKHFR, commented: “David’s utive and Simon Rowlands as major American Express in Brighton and more development executive. He will be appointment is yet another positive account director. All three will be based recently was head of operations at Hel- supporting four specialist team lead- step in the regeneration of the busi- in the Leeds office. Steve joins from phire. Prior to joining Allianz, Mr Coton ers and will develop scheme business ness, further cementing the company’s Howden, where he was divisional direc- carried out a nine-month operations through the existing agency network. desire to be regarded as the market tor. With more than 20 years’ experience interim management assignment at AIG JBI managing director, John Brown, leaders in terms of quality, service and in the UK corporate sector, Victoria, who (now Chartis Insurance) in Croydon. said: “Iain has extensive contacts within innovation.” joins from Marsh, will develop corpo- the insurance broking fraternity and rate business throughout the UK. Simon Sterling Insurance we intend to utilise this network to Alec Finch & Company has appointed joins Oxygen in June, on completion of Company has expand our travel, landlord schemes, Clive Oliver to head up its opera- his contractual obligations to Bartletts, appointed Kevin international medical, military kit and tions in Halifax. Mr Oliver joined Alec where he was a director. Donoghue to a pet scheme business while develop- Finch in 2000 where he subsequently newly created ing other niche markets.”Iain said he became client servicing manager to INSURERS position of head of was impressed with the extent of JBI’s the Manchester operations. Managing commercial under- scheme business and the technology it director, Paula Williams, said “We have Specialist insurer HSB Engineering Insur- writing. Kevin will offered its agents. had a presence in Halifax for 15 years ance has appointed two development Kevin Donoghue be responsible for and we are committed to developing executives to help expand its presence developing and Marsh has our business in west Yorkshire. I am in the Midlands. Gail Voyle joins HSB managing the underwriting strategy appointed Steve delighted that Clive has accepted this with more than 10 years’business devel- and providing strategic leadership to Adams and John position and look forward to working opment experience gained from insurers the underwriting teams and will report Bellingan,who with him to both grow the business such as Axa and RSA. According to the directly to David Sweeney, director of both previously and maintain the high standard of insurer, with her experience of under- general insurance. Kevin joins Sterling worked for Wil- service to our clients.” writing and claims, Ms Voyle brings a from Axa Insurance where he spent lis in Maidstone, range of skills that complement those the past nine years. At Axa, he was area to drive its new Gibbs Hartley Cooper, the recently of the existing team. Phil Smith joins underwriting manager for London and Steve Adams and business develop- created specialist London broker, has HSB from Bureau Veritas with particular the South East. John Bellingan ment strategy and taken on Garry Taylor as its property expertise in engineering inspection and client servicing practice leader. Mr Taylor, whose previ- compliance management. He has more Commercial lines underwriting special- in the South East. In his previous role, ous position was head of property, than 20 years of experience in business ist Arista Insurance has hired Gavin Steve, who has worked in the insurance energy and construction at Lockton, development and of working with a Benson as senior underwriter and will industry for more than 30 years, was said: “Being invited to lead Gibbs Hart- broad range of brokers to develop rela- be based at Arista’s Birmingham office. an account director for Willis and was ley Cooper’s property team is a superb tionships and key accounts. Previously he worked for NIG as the responsible for client servicing and new opportunity. The Gibbs Hartley Cooper key account manager responsible for business development. John, who has name is synonymous with the provi- Groupama Insur- national relationships with the Broker- worked in the industry for more than 13 sion of expert, independent insurance ances has hired bility Group. As well as underwriting years, was previously commercial busi- broking advice and I am excited by, Ian Pritchard new and existing Arista business in the ness developer for Willis, which centred and share the ambitions, the senior as development Midlands, Gavin will focus particularly on developing relationships with clients team have for the business.” underwriter. His on growth and development in the in the South East. remit is to develop East Midlands. Broker Network all aspects of Michael Bungert, Aon Benfield chief has hired Paul private motor Commercial insurance underwriting executive of the Americas, and CEO Roberts as its Ian Pritchard business through agency APC has taken on Chris Page of International, Dominic Christian, new customer Groupama’s bro- as senior underwriter. The ex-NIG senior have been named as co-CEOs of Aon services director, kers with a specific focus on developing underwriter has more than 11 years’ Benfield. Mr Bungert, who is based in network division. the company’s specialist motorcycle experience of supporting brokers plac- Chicago, joined Aon Re as an executive Mr Roberts will account. Bringing nearly 12 years’under- ing property, casualty and commercial vice president in 1989. He previously be responsible writing experience to his new role, Ian combined business. Prior to joining NIG, worked for Thomas A Greene, where Paul Roberts for ensuring joins from Capita Insurance Distribution Chris was a development underwriter he was the head of the Chicago office Broker Network where he was responsible for insurer for RSA. At APC, he will work with the and a member of the board of direc- and Countrywide members receive an relations management. Prior to this, he existing underwriting team to further tors. Before joining Aon, Mr Christian, enhanced and more consistent level was deputy underwriter at KGM Motor reduce quotation turnaround times and who is based in London, was a group of service as part of their membership. Policies and has also been an under- build closer working relationships with board director of Benfield Group, CEO He will also help to develop Broker writer at Equity Red Star. key brokers. of the international division, and CEO Network’s own broker proposition of Benfield. including the new network trad- Allianz has hired Gary Coton as its new If you have any new appointments ing room. Under the trading room household operations manager respon- for the market moves page, please RK Harrison Financial Risks (RKHFR) arrangement, participating insurers sible for handling all UK household email them to Liz McMahon at: has hired David Walmsley as regional will service network members by hav- claims. Gary was previously household [email protected]. premier client director. David joined ing their underwriters based at Broker operations manager at Aon, where he All images must be print quality after nearly 20 years at Aon Trade Network offices. was eventually appointed as associate JPEGs and 300dpi

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www.broking.co.uk May 2010 Insurance Age 59 News review

News review: April Polly C Capita Insurance Services panies with turnovers above written premium of £7.5m and [email protected] set its sights on becoming the £100m, small businesses and a brokerage of £1.4m, said it largest niche motor broker not-for-profit organisations. would launch in Edgmond, in the UK, according to the Its professional indemnity (PI) near Newport, in August and managing director of its most offering includes construc- appointed Neil Atkinson as recent acquisition Sureterm tion, financial services and director and appointed repre- Direct. The move followed information technology. Catlin sentative for the region. JPM Capita’s acquisition of personal acquired Angel’s PI and D&O announced it intended to cre- THE HOTTEST INSURANCE GOSSIP lines motor broker Hero from book, excluding a small section ate a new franchise every three LV in March 2009. The Hunting- of business previously under- months as part of its plans to don-based classic car and written by WR Berkley, which grow its brokerage to £13m t’s been a while since the ghost of Michael Bright has haunted motor home insurer will merge will be discontinued. within 10 years. Under the Ithe insurance industry but he recently popped up in the most with Lancaster Insurance Serv- model, franchises will operate unexpected of places. One of Polly’s eagle-eyed contacts spotted ices, the business bought by Lloyd’s insurer Amlin backed under the JPM branding and a reference to him in Coronation Street of all places. Now the Capita in March 2008, situated a new underwriting agency gain equity in the wider busi- contact protested a little too much that he was watching said soap 10 miles away in St Ives, Cam- which has been set up by ness, with commission being under duress but he appears to have been paying close enough bridgeshire. Sureterm’s Andy the former chief executive split between JPM and the fran- attention to notice an employers’ liability certificate on the wall Wood will remain as MD of the of HCC International, Charles chisee on an agreed basis. of Audrey Roberts’ hair salon. Not only did Polly’s contact no- merged business, and said job Manchester. The insurer took tice the policy was nine years out of date, he spotted that it was losses and changes to senior a 25% stake in Manchester Giles Insurance Brokers signed by one Michael Bright. Having worked for the convicted management were “highly Underwriting Management, acquired Cooper Gay’s UK fraudster for more than 20 years, he swears he would recognise unlikely” as a result of the deal. which will begin by writing wholesale broking division, that signature anywhere. Mr Wood added that the buy professional indemnity. Mr FSJ Broking. FSJ, which oper- signalled Capita’s intent to rival Manchester was the majority ates as an independent entity Adrian Flux and Aon-owned stakeholder and Michael Cant, within the London market, Footman James. previously a director at Saturn covers a variety of niche prod- Professional Risks, was the ucts — including property, The Towergate Partnership third investor. Mr Cant worked casualty, medical and phar- instructed an international at RSA, after the merger of maceutical, bloodstock and corporate law firm to help it Saturn Professional Risks and livestock — and also handles oversee a financial restructuring PI Direct, until 2008. Also join- claims. The deal was Giles’ first of the business including the ing the MGA are a team of six acquisition in the Lloyd’s of formation of two “public-limited regional professional indem- London market. Giles recently company”operations. This year, nity specialists from RSA, who entered another new area, Shearman & Sterling already previously worked for Mr Cant, corporate & financial risks, by advised Cadbury on its takeover and Richard Webb, who joined taking on the Brightstar risk by Kraft, oversaw a number of from HCC International where solutions team, also in Lon- major bond and debt offerings he was head of marketing and don, in March. and was involved in African broker development. verywhere Polly looks these days she is confronted with Barrick Gold’s listing in March. Allianz welcomed the Court Einsurance advertising, be it Iggy Pop, a rather overweight However, a Towergate insider Trevor Brittain stepped down of Appeal’s judgment in the opera singer (ditch the carbs Gio) or Aleksandr Orlov, the now insisted that the legal appoint- as managing director of Royal Darren Bent credit-hire case as infamous meerkat. Thankfully she no longer has to endure ment and the ‘PLC’moves were Bank of Scotland’s premium a “resounding victory”for the Michael Winner telling everyone to calm down – which was a not linked with the business finance business Finsure ahead insurance industry over credit- bit of a joke as it only took the sight of his smug mug to raise her bringing forward any plans of its closure. RBS outlined hire operators (CHOs). In his blood pressure. With Aviva relaunching its campaign with Paul to list, currently anticipated plans to place Finsure into run- judgment in Bent v Highways Whitehouse, the market appears to be inundated with characters to take place in 2012. Instead, off last November and finally and Utilities Construction & great and small. This observation was the catalyst for an amus- the source hinted it was more stopped writing business this Another, which was released at ing conversation Polly had with a rather lovely chap from LV likely to do with the consolida- month. In the absence of an the end of March, Lord Justice on who should front the insurer’s next campaign. As the cham- tion of its wide-spanning body MD, Ben Thornton, head of Jacob questioned whether pagne flowed, the suggestions became more ‘inspired’ and, by of operations, something the personal lines at sister com- credit hire should only be avail- the end, Polly had all but developed a pitch for home insurance business has said it was likely to pany NIG, took on the added able to claimants who cannot involving Nick Cotton. Wonderfully inappropriate but it would do to create more value as and responsibility of Finsure for the afford spot hire rates and urged certainly be a talking point. when it seeks to sell or float. duration of its year-long run- CHOs to take a wider approach off until its closure next March. to ‘like for like’hire. The Sun- Catlin signalled its intent The closure left only two major derland striker, a policyholder hose former Fusion lads, Kevin Pallett and Geoff Crisp, to increase its regional small providers — Close Premium with Allianz, was in a road traffic Thave been the focus of some whispers in the market. The to medium-sized enterprise Finance and Premium Credit. accident in February where his general consensus is that the two are talented, young and hun- footprint following the acqui- Mercedes CLS Coupe was dam- gry enough to look to re-enter the market but what the insur- sition of Colchester-based Midlands-based broker aged. Following the collision, ance fishwives can’t decide upon is what capacity they will return managing general agent Angel Johnston Park McAndrew (JPM) Mr Bent was referred to credit- in and who, if anyone, will be backing them. Apparently the Underwriting. Angel offers a established its first franchise hire firm Accident Exchange clever money is on Aspen supporting them in a new underwrit- variety of directors’ & officers’ offering in Shropshire. The and hired an Aston Martin DB9 ing venture. To anyone out there with any more information (D&O) policies, including com- intermediary, that has a gross for94days. – you know where to find Polly.

60 Insurance Age May 2010 www.broking.co.uk LATEST UPDATES

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PAST WINNERS

Alphatec – Timebox, Aon Global Risk Consulting, BGL – ibuyeco, Caravan Guard, Centor Insurance and Risk Management, CETA, Davis Corporate Risks, HSBC Insurance Brokers, InsureandGo, K Drewe Insurance Brokers, Marsh, MCE, Pi-Property, RK Harrison Insurance Brokers, Willis… will it be you this year?

FOR FURTHER INFORMATION PLEASE CONTACT:

Entry enquiries: Kathleen Harding | T: 020 7484 9711 | E: [email protected] Sponsorship enquiries: James Murray | T: 020 7316 9296 | E: [email protected] Sponsorship enquiries: Chris Finnegan | T: 020 7316 9632 | E: chris.ﬁ[email protected] Table booking enquiries: Oliver Nevill | T: 020 7316 9405 | E: [email protected]

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IA_FalseFronCover_Rach.indd 5 28/4/10 13:46:15 CATEGORY SUMMARY

The E-business Award

The Technology Award

Claims Service of the Year

Marketing Campaign of the Year

Customer Service Provider of the Year

Risk Management Service of the Year

Investment in People Award

Network Member of the Year – New for 2010!

Private Clients Intermediary of the Year

Personal Lines Intermediary of the Year

Commercial Lines Intermediary of the Year

Schemes Intermediary of the Year

Intermediary of the Year

Young Broker of the Year

Broker Manager of the Year

Business Owner of the Year – New for 2010!

Achievement Award

For more information and to submit your entry, visit www.ukbrokerawards.com Entry deadline: 18 June 2010