THE MOTOR | COMMERCIAL | HOME | SPECIALITY INSURANCE 2021 SETTING EXPERT THE ROADMAP
Brokers Ireland mission is to promote, support and protect Insurance and Financial Brokers so that our members are best positioned to offer expert and professional advice and services to their clients.
2021 Strategic Brokers Ireland will continuously identify core objectives throughout 2021 which embody the real challenges facing Irish Brokers to ensure that members Priorities at a Glance interests are consistently represented.
FINANCIAL SERVICES GENERAL INSURANCE COMPLIANCE PRIORITIES PRIORITIES PRIORITIES insurancebroker.ie • Challenging over-regulation Financial Brokers Insurance Brokers • CP116 issues/CPC review • Pensions – simplification proposals, • Agency Agreements • CBI expectations - assessing auto-enrolment & IORP II • Differential Pricing financial soundness of insurers • Financial Broker –promoting Brokers • Development of Insurance • Brexit Implications • Market Evolution for Financial Brokers Broker brand • Developing members • Broker technology & software compliance services IS LIVE 2020 Highlights ‘A Year Like No Other’ The new InsuranceBroker.ie website will help to professionally promote Insurance Brokers and consistently Implementation New Affinity of the Consumer Launch of new Insurance Financial E-Guide raise consumer awareness of their value proposition. Contracts Act Broker website for members NEW CONSUMER SITE | FRESH, MODERN SITE DESIGN | SIMPLE, Over Getting Brokers INTUITIVE NAVIGATION | EASY TO USE BROKER DASHBOARD Interactions with Implementation Members CBOI on the of CP 116 CPD & RESOURCE CENTRE | MOBILE & DEVICE RESPONSIVE authorisation process requirements 50 Brexit hours Ready WHAT DO BROKERS GAIN? 120 published Lobbying media articles & news stories
Covid-19 Members Support New members IMPROVE POSITIVELY VIBRANTLY PROJECT THE ACCESS MARKETING WIN NEW • Essential services status gained for Brokers compliance CONSUMER ENDORSE THE PROMOTE DYNAMISM & MATERIALS CLIENTS • Guidance Support: returning to offices; PROFILE FOR IMAGE OF BROKERS & PROFESSIONALISM FOR CUSTOMER restrictions; remote working chat support facility INSURANCE INSURANCE YOUR VALUE ESSENTIAL TO CAMPAIGNS & • Webinars – HR; soft skills training BROKERS BROKERS AS A PROPOSITION RETAINING COMMUNICATION GROUP CUSTOMERS How We Support Brokers
Business Support Compliance Representation PR & Lobbying Promoting & Guidance & Regulation Professional Standards [email protected] INFLUENCING CHANGE FOSTERING PROFESSIONALISM www.brokersireland.ie DELIVERING VALUE TO BROKERS www.insurancebroker.ie
C20.7926_Insurance_Broker_Website_Launch_A4Advert_v4.indd 1 23/11/2020 12:21 THE MOTOR | COMMERCIAL | HOME | SPECIALITY INSURANCE EXPERT
insurancebroker.ie IS LIVE The new InsuranceBroker.ie website will help to professionally promote Insurance Brokers and consistently raise consumer awareness of their value proposition.
NEW CONSUMER SITE | FRESH, MODERN SITE DESIGN | SIMPLE, INTUITIVE NAVIGATION | EASY TO USE BROKER DASHBOARD & RESOURCE CENTRE | MOBILE & DEVICE RESPONSIVE WHAT DO BROKERS GAIN?
IMPROVE POSITIVELY VIBRANTLY PROJECT THE ACCESS MARKETING WIN NEW CONSUMER ENDORSE THE PROMOTE DYNAMISM & MATERIALS CLIENTS PROFILE FOR IMAGE OF BROKERS & PROFESSIONALISM FOR CUSTOMER INSURANCE INSURANCE YOUR VALUE ESSENTIAL TO CAMPAIGNS & BROKERS BROKERS AS A PROPOSITION RETAINING COMMUNICATION GROUP CUSTOMERS
[email protected] www.insurancebroker.ie
C20.7926_Insurance_Broker_Website_Launch_A4Advert_v4.indd 1 23/11/2020 12:21 PROTECTION | PENSIONS | INVESTMENTS Now it’s easier to make time for your clients.
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1368761 - Pensions Campaign Theme 2021 Irish Broker Ad - VER02.indd 1 21/01/2021 09:24 BROKER MAGAZINE IRISH contents The Official Journal of the Irish Brokers Association
Editorial Column...... 2 Collaboration: The key to navigating a hard market...... 31 by James Bohan Cover Story...... 4 Interactive Brokers Group establishes in Ireland...... 32 Inside Track...... 8 with Diarmuid Kelly CCPC Public Liability Market Study...... 34 by Cathie Shannon Sustainable Finance Disclosure Regulation ...... 10 by Elizabeth Smith Wright Generation Rent: protection opportunity ...... 36 by Barry McCutcheon Lawyer to Underwriter ...A refreshing perspective...... 12 Aviva funds deliver strong fund performance in 2020..... 39 Investing responsibly for Today and Tomorrow...... 14 by John Deehan by Michael Hayes Continuing measures to help Allianz customers Broker software firms must respond...... 17 during COVID-19 restrictions ...... 41 by Philip O’Reilly Quality cover for luxury electric cars ...... 42 Zurich Investment Outlook 2021 - Crest of the wave? ... 18 by Helen Furlong by Ian Slattery A take on Artificial Intelligence and the claims role...... 44 Tech Bites...... 21 by Mark Quinn by Tony Gilhawley PowerTalks...... 46 by Jim Power What’s the retirement age in Ireland? ...... 22 by George Nolan Persuasion and Influencing …the greatest skill?...... 49 by Dermot McConkey A standout year for Aviva’s Merrion Multi-Asset Fund range...... 25 2021 - A Year of Living Dangerously...... 50 by Stephen Rice by Graham O’Neill
2020 - A year like no other...... 28 Oireachtas Digest...... 52 by Niall Black by Frank Lahiffe
in this issue 10 21 34 42
Quality Cover for Luxury Tech Bites Electric Cars
Sustainable Finance CCPC Public Liability Disclosure Regulation Market Study column At Zurich we believe
BROKER MAGAZINE IRISH small actions can have
editorialThe Official Journal of the Irish Brokers Association Irish Broker is the monthly journal of Brokers great impact. Ireland. The magazine is circulated free of charge, among all Brokers Ireland members, Insurance Pensions simplification to the Companies, The Financial Regulator, The Central Bank, various Government Departments and a detriment of consumers select list of persons involved directly or indirectly with the Irish Insurance Industry. Other companies he ideas of pensions reform and simplification have been bandied about for the or personnel who wish to receive the magazine last decade, seeing countless reports produced and ignored by governments may do so on an annual subscription basis of T €100. Cheques should be made payable to: “Irish which are all too familiar with the irony of the complications of simplification. Broker” and addressed to: 136 Baldoyle Industrial The latest of these reports was the Report of the Interdepartmental Pensions Estate, Dublin 13. Reform and Taxation Group, published in November 2020. While some sectors That’s why we’re Irish Broker reserves the right exclusively to edit of the industry were quick to welcome this new report, Brokers Ireland remain encouraging your clients all copy. Views expressed by contributors or unconvinced that the proposals will lead to better consumer outcomes. correspondents are not necessarily those of to take a small action for Brokers Ireland, the Editors, the Board Members First, to hold up PRSAs as the remedy for pensions reform is somewhat their future and talk to you of Brokers Ireland or Irish Broker Magazine Limited questionable. The product has never worked for its intended purpose and as the and neither Brokers Ireland, the Editors, the report acknowledges, will need a lot of reform to get it to where it needs to be. That today about starting or Board Members of Brokers Ireland or Irish Broker being said, replacing RACs, PRBs and ARFs with a new and improved nonstandard Magazine Limited accepts any responsibility topping up their pension. for them. Deadlines: The magazine is published PRSA could work. After all if it walks like a duck and quacks like a duck! during the second week of every month. All items Apart from the obvious push to the PRSA, our main concern lies in the proposals of an editorial nature must be to hand at least 15 With a Zurich pension, days prior to publication date. Advertising copy is around the ARF. Brokers know all too well the reasons that the ARF is such a popular required 10 days prior to publication. product with consumers; ongoing individual advice, included in the charges; wide your clients can investment choices; personalised product for individual’s risk appetite. To try to Editorial Board: Cathie Shannon benefit from Zurich’s Diarmuid Kelly create a second generation PRSA, to replace the existing fit for purpose ARF, seems Donal Milmo-Penny like a needless, complicated task that will not serve consumers. If the intention is, award-winning active Jarlath Jordan as it seems to be, to allow the existing first generation PRSA products to continue investment management*, Paul Carty into retirement, or to switch to the new second generation PRSA product, this will Paul Gibson introduce more complexity into the market, not less. competitive products and Administration and Accounts: Linda Coldrick Then there is the big elephant in the room: Where will advice sit within lifetime great online access. Advertising Sales: Paul Gibson PRSA’s and in scheme drawdowns? The limited charging structure under a PRSA does not allow for extensive advice required for ones pension. Upon retirement Graphic Design: Mandy Lawless Speak to your Zurich for example, a client’s tax-free cash may figure prominently in funding a retiree’s Circulation: Linda Coldrick early years, whilst he or she barely accesses the ARF; so when accessing pension Broker Consultant today Printing: Judita Press products there is a need for advice and a product that supports a necessary charging Directors: Paul Gibson (Managing) or visit Zurichbroker.ie Linda Coldrick model. Limiting choice, competition and access to advice will have a negative impact on consumer outcomes.
BROKER MAGAZINE IRISH Consumer research carried out in 2016 showed that those that have used a Financial Broker are more than twice (71%) as likely to have a pension compared to people The Official Journal of the Irish Brokers Association that have not used a Financial Broker (33%). Those people are also likely to is published by Irish Broker Magazine Limited, have more in their pension pot, with the average being €132,650 compared with Holyrood House, 136 Baldoyle Industrial Estate, €111,190 for those who do not consult an adviser. Dublin 13. Tel 01-8395060 Fax 01-8395062 Brokers have constantly been overlooked in important policy decisions that affect Editorial and Advertising both them and their clients. The recent Pensions Authority report on master trusts [email protected] highlights yet another ill-judged, self-serving policy, by way of a move towards Warning: The value of your investment may go down as well as up. Accounts and Subscriptions master trusts that will not benefit consumers. Likewise, ignoring the critical role of [email protected] advice in the pensions market is an ill conceived approach ; there is a considerable Warning: Past performance is not a reliable guide to future performance. Graphic Design body of international research showing that advised consumers consistently end up Warning: If you invest in this product you may lose some or all of the money you invest. [email protected] better-off. To ignore this is to cloak a particular agenda in a thin, pro-consumer veil www.irishbroker.ie whilst ignoring hard data and facts.
* Source: Awarded Investment Excellence, Brokers Ireland Excellence Awards 2014, 2015, 2016, 2017, 2018 and 2019. Zurich Life Assurance plc is regulated by the Central Bank of Ireland.
5643_Great_Impact_Irish broker Ad PA 5643 0121.indd 1 06/01/2021 16:55 At Zurich we believe small actions can have great impact.
That’s why we’re encouraging your clients to take a small action for their future and talk to you today about starting or topping up their pension. With a Zurich pension, your clients can benefit from Zurich’s award-winning active investment management*, competitive products and great online access. Speak to your Zurich Broker Consultant today or visit Zurichbroker.ie
Warning: The value of your investment may go down as well as up. Warning: Past performance is not a reliable guide to future performance. Warning: If you invest in this product you may lose some or all of the money you invest.
* Source: Awarded Investment Excellence, Brokers Ireland Excellence Awards 2014, 2015, 2016, 2017, 2018 and 2019. Zurich Life Assurance plc is regulated by the Central Bank of Ireland.
5643_Great_Impact_Irish broker Ad PA 5643 0121.indd 1 06/01/2021 16:55 After 26 years at AIG, Declan O’Rourke recently took up the reins as CEO of Aviva’s General Insurance business Here he talks candidly to Irish Broker about making the move, Covid-19, brokers, consolidation, dual and differential pricing, legal fees and the cost of claims and other issues facing the industry.
eclan, you have worked for a long time in the industry, tell me about your career to date, your Dmove to and first four months at Aviva? Prior to joining Aviva, I spent 26 years at AIG where I led the Irish GI business for eight years. I am very proud of what we achieved at AIG in terms of both the scale of the business and the brand, but it was time for a new challenge. Aviva is a company I’ve admired for many years. It has the longest insurance legacy in the market, stretching back to 1780. Many brokers in the Irish market have great loyalty to Aviva and speak fondly of the company and its predecessor, the Hibernian, which was an enigma in the market for many years. One of the things that surprised me about Aviva is the number of Irish people in senior roles throughout the organisation, including Colm Holmes, CEO of Aviva UKGI. Colm also sits on the Irish general insurance board and gives great support to the Irish business. Ireland was also recently designated as one of Aviva’s key three core markets for investment by Aviva’s Group CEO, Amanda Blanc. It is fantastic to have this level of support from Aviva Group. Finally, the opportunity for our general insurance business is immense. In Aviva, we have great products, claims service, an unrivalled broker network and strong broker relationships. We have a fantastic opportunity to offer new products through our broker partners and broaden our appetite into segments currently underserved by Aviva. We can also improve our digital proposition in the SME sector and improve our pricing sophistication to give our brokers an edge in the market. How was 2020 for general insurers? Globally, 2020 was tough for insurers, with low investment returns, a global pandemic, a recession, higher reinsurance providing unoccupied premises extensions, allowing other costs, higher than average CAT losses (even before uses for premises and returning premiums where fleets are Covid-19), and possibly the largest ever underwriting loss for laid up during lockdowns. Our Risk Management team has a single event, Covid-19. Locally, the environment was also also developed useful documents on loss prevention covering tough. In addition to the operational issues and additional a variety of essential Covid-19 risk management topics from regulatory reporting due to Covid-19, industry providers had cyber security at home to managing people and operations to deal with new legislation such as the Consumer Insurance following a shutdown. Aviva continues to support frontline Contracts Act, preliminary findings on price signalling from the workers by providing increased covers such as free unspecified Competition and Consumer Protection Commission, various all risks, priority home emergency assist and private motor regulatory reviews including Dual/Differentiated Pricing and breakdown as well as priority claims service for HSE frontline sustained negative media coverage of the general insurance staff. Aviva facilitated the lighting of the Aviva Stadium in HSE industry. colours numerous times in 2020 and developed social media Despite all the negatives, 2020 was a year where the industry campaigns like ‘Unite by Standing Apart’ to support the HSE. stood up and provided a range of reliefs to its customers who in many cases were struggling for survival. At Aviva, When you say the industry was criticised by the media, we introduced a wide range of reliefs which we have now do you feel it was warranted? extended until February 2021 at least. These reliefs include I thought much of the criticism and commentary was reducing premiums to reflect the reduction in exposure misinformed and misleading. For example, one article I read measures, providing extended premium instalment options, just after Christmas accused the entire general insurance
“In relation to your question on the importance of the broker channel to Aviva, the broker channel is our most important channel by a long way. All our commercial business and most of our personal insurance business is intermediated. We have significant plans for further growth through our brokers with a clear investment strategy in technology, product and people.”
4 | February 2021 “Despite all the negatives, 2020 was a year where the industry stood up and provided a range of reliefs to its customers who in many cases were struggling for survival. At Aviva, we introduced a wide range of reliefs which we have now extended until February 2021 at least.” industry of not paying claims. Covered claims have always Can we have your views on this issue? How important is been paid by the industry. If anything, in my experience, the broker channel to Aviva? insurance companies often pay claims that are not black or Differential pricing between channels of business has white. Where there is a dispute between consumers and an always been a topical issue and likely always will. At Aviva, insurance company on a claim, consumers have a wide range it is not an issue for commercial business as we only quote of appeal processes, including the company’s own complaints through the broker channel. On motor and home, we have process and independent options like the Ombudsman, a multi-channel business which allows customers access mediation or the courts. The strict rules and principles of the Aviva however they choose. There are price differences by Consumer Protection Code must be followed throughout the channel, driven by many factors, including claims, costs of process and covered claims will be paid. servicing, commissions, software charges, data richness, etc. I believe the criticism in the media of the industry over the cost Our ambition is to win in all channels where we participate. and availability of insurance is also unfair. It is not the fault I know why brokers are concerned, but I believe there is a of insurers that in some sectors the claims and legal costs place for multiple channels without significant conflict. I was are so high that the premium has become unaffordable and speaking with a broker in the midlands recently who said his businesses have had to close as a result. This is not a problem private motor book was growing steadily as customers liked to the industry can resolve itself as legal fees and compensation renew with just one call and liked the service. award levels are decided by the legal profession. In relation to your question on the importance of the broker Do you believe the Government’s action plan to reduce channel to Aviva, the broker channel is our most important insurance costs will work? channel by a long way. All our commercial business and most We will know very soon. The Judicial Council’s Personal of our personal insurance business is intermediated. We have Injury Guidelines Committee is expected to shortly adopt significant plans for further growth through our brokers with a and publish personal injury guidelines to replace the Book of clear investment strategy in technology, product and people. Quantum. This is the culmination of years of good work in the Covid-19 aside, the past year has seen consolidation in Department of Finance by officials and successive Ministers. the broker market. Is this due to over-regulation in your If the Judicial Council agrees to reduce minor awards to view? European levels (e.g. minor/moderate whiplash to €1k-€3k), There is an acceleration in the consolidation of brokers in the the plan will have worked. Irish market. I think there are several factors at play, including Other proposals like strengthening the Injuries Board, investment funds driving consolidation, brokers scaling strengthening waivers/notices under the Occupiers’ Liability through acquisition, retirements, higher than historical sales Act 1995, prosecuting fraudsters and dealing with perjury will multiples and Brexit planning. No doubt the increased focus also help in addressing fraudulent and exaggerated claims, on regulation and the associated costs does play some part but the needle mover is the personal injuries guidelines. in the overall consolidation picture. Some insurers have offered a token refund on motor Earlier you mentioned Aviva will expand into new insurance premiums due to Covid-19. Is this something products, what areas did you mean? Aviva will consider? The principal new class we have entered We did not think it was right to bring staff into the office during is Financial Lines, which we launched in a pandemic to process rebates or post token refund vouchers January. We are very lucky that Simon to customers, especially back in May when we were only Quinn, Aviva UK’s Head of Professional guessing the impact of restrictions. Our pricing strategy is Indemnity, agreed to move home to long term and influenced by many factors, including reduced lead the Financial Lines team. Simon frequency. also previously led the Professional You mentioned dual pricing, what is your view on dual/ Indemnity team at AIG in Ireland before differentiated pricing legislation? leaving to gain more experience in the Dual pricing is not unique to insurance, most industries offer UK. He will be joined by Derek Smoker, who has decades of Financial Lines introduction discounts to attract customers. I believe shopping Simon Quinn around is healthy in a functioning insurance market. I have a experience in Ireland and will lead our neighbour who shops around every year for his and his wife’s Directors & Officers book. Michael insurance and gets great deals. Another neighbour rarely Murphy, an industry veteran of Liability shops around and ends up paying more. In a competitive and Financial Lines claims, will manage our Financial Lines market like this, I believe the effect of measures to end dual claims. pricing will be redistributive and there will be winners and You also mentioned underserved segments, what losers as a result. With the elimination of new customer specific segments are you looking at? discounts, the neighbour who doesn’t bother shopping around Aviva’s heartland business is broker SME, but competition will be a winner and the neighbour who shops around will has intensified from online insurers and MGA’s in this space. be a loser. Ironically, in my view, the ending of dual pricing We must up our game significantly in the digital and etrading would penalise vulnerable lower income customers who shop space and we plan to. Steve McGerr joins us as Head of Sales around looking for value. in March from Hiscox in York where he ran their commercial Differential pricing between the broker channel and the digital business. Steve previously managed the Hiscox Direct channel has made headlines recently. The issue is offices in several locations, including Dublin. Declan Cooney ambiguous and compromises brokers and their clients. also recently joined as etrading manager and is responsible l continued overleaf February 2021 | 5 “For the market to work and for the existing insurers to quote areas like playcentres, insurers must have a reasonable chance of making a profit. In my view, this will only happen if we see significant reductions in the cost of both personal injury claims and legal fees.” Supporting Brokers and their clients in the Retirement Journey for rolling out our commercial digital broker proposition. Once number of serious accidents remained stubbornly high. The Steve and Declan get settled, our brokers will start to see courts system has understandably slowed so we will not know digital product launches later this year. the true outcome for some time. In other lines of business, we We have also been underweight for several years in the have already incurred claims costing tens of millions during Supporting Brokers and their clients commercial mid to large corporate segment. This is a segment Covid-19 for travel insurance, construction and covered RETIREMENT INCOME FUNDS that Aviva and its predecessor Hibernian performed very well business interruption claims. Covid-19 may or may not end in the Retirement Journey in previously. Some of this business is currently written by up causing the largest global insurance underwriting losses When we launched our Retirement Income Funds at the beginning of last year it was because we identified that Aviva Global Corporate & Specialty in the UK. Brian Mahon of any one event in history, but it will cost a significant amount there is a defined difference between requirements for funds in the pre-retirement and post retirement space and his commercial underwriting team and will lead to much higher reinsurance costs. with different requirements and challenges accordingly. have improved our capabilities in this Consolidation in the insurance market reduces choice. area and have been rewarded with some What are your thoughts on this issue? significant wins in the last two quarters. There are four Irish Life REPS ranging from lower-risk, where more of the portfolio is invested in cash and bonds, to higher-risk where There is no shortage of insurance companies in Ireland. Most Working with the sales team, Brian and of the major global insurers are here and there are more than more is invested in shares. This means that if you are a low-risk, medium-risk or high-risk investor there is an Irish Life REP that may suit his team are actively seeking to build a 100 active companies. However, the number of insurers does you. strong pipeline and win in this key area of not really matter if you can’t get either a quote or an affordable growth for Aviva. quote for a playcentre from any insurer. For the market to work The funds are designed to provide peace of mind for investors in retirement. Based on an investor’s attitude to risk, they will have a Finally, our broker motor portfolio has and for the existing insurers to quote areas like playcentres, specific risk rating between rating 1 (Safety First) and risk rating 7 (Very Adventurous). Each of our Irish Life REPS is designed for a declined in the last year as we took insurers must have a reasonable chance of making a profit. In specific Irish Life (IL) risk rating. a conservative view on the impact of Brian Mahon my view, this will only happen if we see significant reductions Covid-19 and the market’s response. in the cost of both personal injury claims and legal fees. We will be stabilising this portfolio in 2021 and working with IRISH LIFE FUND RISK SCALE brokers and partners to move forward using improved pricing You moved company recently from AIG to Aviva, what sophistication. advice would you give to a young person thinking of moving companies? Has Covid-19 had a major impact on your business and IL1 IL2 IL3 IL4 IL5 IL6 IL7 what Business Continuity plans have you put in place Moving to Aviva has given me a new lease of life and I love to protect your workers and maintain your service to being outside my comfort zone. I feel I am making a difference brokers and clients? and driving things on. That said, I admire and respect people • Focus on who work in a company for decades, they know everyone and So far, we have been lucky and the impact on our customer 10.5% 14% 13% 8% Defensive are often the most interesting and knowledgeable people. 15% service has been minimal. Almost all our 800 employees have 9% Income yielding Before moving, ask yourself if an internal move could be better. 9% 30% been working from home since last April. The current wave 8% 10% 10% assets of the pandemic has impacted more on our employees than The important thing is you continue learning and developing. 8% REP2 REP3 REP4 50% REP5 • Engineered previous waves and we have several employees self-isolating Be careful not to move too often or you will get a reputation for to mitigate currently. being a ‘drifter’ who comes and goes. 5% Sequence of We are also very aware of the personal challenges encountered What are your hopes for 2021? 27% 41% 75% Returns risk by our employees. Many must educate and look after children I’m hoping everyone gets vaccinated quickly. I’m hoping our 57.5% at home or look after sick relatives during work hours. As a brokers, customers and employees have a ‘roaring’ second half • Offers Flexibility result, we put supports in place to help them work while of the year. I’m hoping to get to meet our brokers and partners recognising managing their home life. As we are all aware the personal cost in person. I hope to finally meet all our teams in Dublin, Cork design for choice of Covid-19 for many families has been high. A very popular and Galway, the Executive team and Board. With a bit of luck, Shares Cash Bonds Property Alternatives ex-employee of Aviva who worked as a security guard at One I hope to get to a match in Aviva Stadium or in Thurles or even Park Place sadly died from Covid-19 in January and we extend an underage match in Kildare. Finally, I hope to see Aviva Source: Irish Life 2020 our sympathies to his family. grow from strength to strength, as we continue to support our From a business perspective, the impact of Covid-19 on brokers and partners, continue to pay hundreds of millions of claims has been significant. The frequency of our private claims, continue to underwrite complex risks and continue to If you are interested in any of our REPS funds and want some further motor claims has reduced materially since April 2020, but the take care of our customers when they need us most. information, please don’t hesitate to contact your account manager who will be happy to help you. “We have a fantastic opportunity to offer new products through our broker partners and broaden our appetite into segments currently underserved by Aviva. We can also improve our digital proposition in the SME sector and improve For more details go to https://wwwbline.ie/myretirement-pathfinder our pricing sophistication to give our brokers an edge in the market.” 6 | February 2021 Irish Life Assurance plc is regulated by the Central Bank of Ireland. Irish Life Financial Services Ltd. is regulated by the Central Bank of Ireland. Supporting Brokers and their clients in the Retirement Journey
RETIREMENT INCOME FUNDS Supporting Brokers and their clients When we launched our Retirement Income Funds at the beginning of last year it was because we identified that in the Retirement Journey there is a defined difference between requirements for funds in the pre-retirement and post retirement space with different requirements and challenges accordingly.
There are four Irish Life REPS ranging from lower-risk, where more of the portfolio is invested in cash and bonds, to higher-risk where more is invested in shares. This means that if you are a low-risk, medium-risk or high-risk investor there is an Irish Life REP that may suit you. The funds are designed to provide peace of mind for investors in retirement. Based on an investor’s attitude to risk, they will have a specific risk rating between rating 1 (Safety First) and risk rating 7 (Very Adventurous). Each of our Irish Life REPS is designed for a specific Irish Life (IL) risk rating.
IRISH LIFE FUND RISK SCALE
IL1 IL2 IL3 IL4 IL5 IL6 IL7
• Focus on 10.5% 8% 15% 14% 13% Defensive 9% Income yielding 9% 30% 8% 10% 10% assets 8% REP2 REP3 REP4 50% REP5 • Engineered to mitigate 5% 27% Sequence of 41% 75% Returns risk 57.5% • Offers Flexibility recognising design for choice Shares Cash Bonds Property Alternatives
Source: Irish Life 2020
If you are interested in any of our REPS funds and want some further information, please don’t hesitate to contact your account manager who will be happy to help you.
For more details go to https://wwwbline.ie/myretirement-pathfinder
Irish Life Assurance plc is regulated by the Central Bank of Ireland. Irish Life Financial Services Ltd. is regulated by the Central Bank of Ireland. Inside with Diarmuid Kelly, CEO, Brokers Ireland TRACK FINANCIAL BROKER – RESTART 2021
ust as 2020 proved to be one of the most eventful years in living history, J2021 is emerging as the year to move forward and restart with a renewed sense of optimism and positivity. Undoubtedly 2021 will hold many challenges for Brokers and society, but with a more optimistic outlook in mind, the Financial Broker brand is looking forward to new progression which will ensure that the longevity and relevance of Financial Broker is kept current and re-energised with Irish consumers. The 2021 Financial Broker Conference which has been aptly titled ‘Restart 2021’, is taking place as a virtual event on 18th February and promises to be a highly informative and interactive experience for benefits of using a Financial Broker. analysis report. This will assist the Broker participants. It includes a series Brokers can customise the Financial industry in the promotion of ‘advice’ and of well-respected key-note speakers who Broker branding on their stationary, help with lobbying on areas such as Auto will discuss industry relevant themes and websites and in local advertisements. Enrolment, where the current proposals address economic challenges currently Financial Broker has also re-branded our do not allow for the inclusion of advice. facing Financial Brokers. In striving to series of animated videos which can also Some consumer research will also continuously improve Financial Brokers’ be personalised for use across brokerage be included in the mix in helping us to value and offering to consumers, the websites and social media channels. garner a better understanding of public conference will focus on a range of perception to the brand and evaluating The 2021 Financial Broker media topics, insights and advancements which future insights and market trends. campaign is already underway and are geared to help and equip Financial includes regular transmission of Financial Supporting Financial Broker’s new brand Brokers through 2021 and beyond. Broker adverts across RTE 1, 2FM and identity will require robust messaging In keeping with our mission to ensure that Lyric FM as well as an ongoing digital which sets a new tone and direction over Financial Broker is kept revitalised, the SEO presence to help ensure that the the coming years. To assist with this relaunch of the Financial Broker website brand is kept ‘switched on’ in the public process, in 2021 we conducted focus in September 2020 marked the start of domain. As many audiences have group research (one-on-one interviews a new era for the brand in endorsing resorted to alternative platforms during and workshops) with Financial Brokers to its value proposition and appeal with the pandemic, we are experimenting determine how our industry is perceived. consumers. The newly designed site with digital audio this quarter in the This incorporated preliminary research, offers efficient functionality along with form of podcasts on Spotify and digital engaging with key individuals to analyse new user innovative features, a fresh and radio in a bid to captivate new listener the current brand proposition and testing responsive design and an easy to access groups. Given the year that 2020 was, new concepts and ideas. Broker dashboard and resource centre. we have been encouraged that the 2020 As a result of these sessions, there Part of the website revamp included a Financial Broker campaign reported was a very strong appetite to create an rebrand of all existing Broker resource an encouraging 32% increase in leads aspirational brand and build an image to materials including technical and to the Financial Brokers website and make Financial Broker more appealing consumer guides; POS & leaflets; videos; an 84% increase in website visits. All to new and younger audiences. This blogs/articles and other marketing advertising through online and radio has led to a re- positioning of Financial materials. marketing campaigns directs consumers Broker as a ‘Client Centric’ brand which to the website, where they are assigned places the customer at the centre of This library of resources is there to assist a Broker by the product type and location everything we do. Around this, we are Financial Brokers and includes practical the consumer selects. currently developing key brand drivers to guidance through guides like, developing represent who we are. a customer value proposition; developing BRAND RENEWAL business strategy and marketing your It is also intended this year to conduct These brand values will be at the heart business and can be used to assist new industry research into Financial of a renewed Financial Broker, creating Brokers in explaining to customers the Broker through commissioning a market the guiding principles that will shape its
8 | February 2021 “2021 promises to be a fresh restart for Financial Broker which will re-calibrate our offering through new, innovate brand alignment. We will redefine Financial Broker in a cohesive manner and strengthen consumers perception of the value which Financial Brokers deliver to the marketplace.”
culture and transform the relationships we visual language across an array of design confidence and clarity in how we convey build with our customers in a meaningful collateral, which will demonstrate new this. Ultimately, it will provide us with the way. We are currently developing unique key messages and values whilst driving tools to bring our brand to life and guide us in presenting a unified, professional consumer offering. The new strategy was recently presented to the Financial Broker committee and was well received, creating a lot of excitement and we look forward to delivering the first draft of these proposals to Financial Brokers over the coming months. 2021 promises to be a fresh restart for Financial Broker which will re-calibrate our offering through new, innovate brand alignment. We will redefine Financial Broker in a cohesive manner and strengthen consumers perception of the value which Financial Brokers deliver to the marketplace. Through an improved brand proposition and a strong Broker- client relationship built on integrity, trust, and personalised service we will help consumers make smart financial decisions to achieve their long-term lifestyle and financial goals.
Diarmuid Kelly, CEO, Brokers Ireland Brokers Ireland Affinity Schemes – Helping to Drive Greater Efficiencies
rokers Ireland has negotiated a comprehensive package of BAffinity Schemes and discounts for the benefit of our members through providing savings across key business services such as: l Compliance Services l Health & Wellbeing l Professional Indemnity Schemes l Telecommunications l IT Support & Services l Recruitment l Print & Stationery l Utilities These schemes are compiled in a convenient E-BOOKLET to provide members with an instant reference to affinity concessions and help drive greater efficiencies and value across our members businesses. Brokers Ireland will continue developing and strengthening this service for members by continuously adding new incentives and savings across our affinity programme. To view Brokers Ireland Affinity Scheme Booklet, go to brokersireland.ie/members area/affinity schemes or contact David Holton, Broker Relationship Manager, Brokers Ireland: [email protected] for further information.
February 2021 | 9 Sustainable Finance Disclosure Regulation
The Sustainable Finance Disclosure Regulation (the “SFDR”) will come into effect on the 10th of March 2021. The SFDR was introduced by the European Commission alongside (the “Taxonomy Regulation”) and (the “Low Carbon and Positive Impacts Benchmarks Regulation”) as part of a package of legislative measures arising from the European Commission’s Action Plan on Sustainable Finance.
he SFDR sets out harmonised rules on transparency and documents in order to disclose the manner in which aims to include environmental, social and governance sustainability risks are integrated into their investment or T(ESG) “sustainability” considerations and risks in the insurance advice and the results of the assessment of the likely decision-making process of investors and asset managers impacts of sustainability risks on the financial product. in a consistent manner across the EU financial services Review of disclosures sector. A sustainable investment product is where a product Financial advisers must ensure that any information published is sold as promoting environmental or social characteristics. in relation to sustainability risks and remuneration policies It is envisaged that greater transparency and sustainability- is kept up to date and publish amendments clearly on their related information will enable investors to compare financial websites. products and to make informed investment decisions about ESG products. National Discretion The scope of the SFDR is broad, covering a wide range of Article 17 (1) of the SDFR exempts insurance intermediaries, financial products and financial market participants. It which provide advice on IBIPs, and investment firms, which provide investment advice, provided that they employ fewer applies to “financial market participants” (FMPs) across all than three people. Article 17 (2) provides Member States with sectors – fund managers, pension providers, insurance-based a discretion to apply the Regulation to these entities. Although investment product providers, MiFID investment firms and such advisers may not be required to provide information in credit institutions. The Regulations also applies to “financial accordance with the SFDR, they would be required to consider advisers”, including an insurance intermediary which and factor in sustainability risks in their advisory processes. provides insurance advice with regard to Investment Based Insurance Products (IBIPs). The Department of Finance held a consultation on this discretion with the closing date for submissions the 29th of The SFDR introduces additional disclosure obligations for January. In the Brokers Ireland submission, we advocated manufacturers of financial products and financial advisers for the exercise of this exemption on the basis that the cost toward end-investors. The Regulations will require impacted of implementing these requirements will fall disproportionately ALLIANZ firms to integrate sustainability into their investment processes harder on small firms who are already having to come to and to consider the adverse impacts of their investments on terms with significant changing regulatory and legislative sustainability factors. requirements over the past 2 years. It was noted that if this Financial market participants (“FMPs”) and financial advisers exemption is applied, although such advisers are not required have similar but different obligations under the SFDR. The key to provide information in accordance with the SFDR, they will elements relating to financial advisers are set out below: still be required to consider and factor in sustainability risks Websites in their advisory processes. This means that there will be no AND SMEs advisory gap between consumers dealing with a firm of 3 or Financial Advisers will be required to publish information about less employees rather than a larger firm. Brokers Ireland will At Allianz we provide a wide range of insurance solutions for small to medium size their policies on the integration of sustainability risks in their inform members of the outcome of this consultation process investment advice or insurance advice and whether, taking businesses (SMEs) operating in a variety of industries. We can provide flexible insurance as soon as it is published and provide further guidance for account of their activities and financial products, they consider solutions that are tailored to the specific needs of your customer and their business. members in relation to the requirements. in their investment advice or insurance advice the principal adverse impacts on sustainability factors; or the reasons why Brokers Ireland has also liaised with Product Providers in Throughout 2021 and beyond we want to work in partnership with you to protect the they do not consider such adverse impacts (and whether they relation to the regulations. They have advised that they are businesses of our mutual customers. intend to do so at a future date). They will also be required currently working on updating relevant documentation such as to outline how remuneration policies are consistent with the Product brochures/Fund fact sheets and will be updating their websites with relevant disclosures. Some Product Providers integration of sustainability risks. have indicated that they will be running webinars on the subject Pre-contractual disclosures towards the end of February – Brokers Ireland will update Financial Advisors will be required to update pre-contractual members when details for these webinars are available. For more information visit allianzbroker.com or email us at [email protected] “The SFDR introduces additional disclosure obligations for manufacturers of financial products and financial advisers toward end-investors. The Regulations will require impacted firms to integrate sustainability into their investment processes and to consider the adverse impacts of their investments on sustainability factors.” To access the allianzbroker.com website you need to have a registered username & password linked to your agency number. If you don’t have one, please contact your Customer Relationship Executive and they will be happy to provide one for you. By Elizabeth Smith Wright, Head of Compliance, Brokers Ireland Allianz p.l.c. is regulated by the Central Bank of Ireland. 10 | February 2021
Allianz_SMEs_210x297_Ad-v3.indd 1 20/01/2021 17:27 ALLIANZ AND SMEs At Allianz we provide a wide range of insurance solutions for small to medium size businesses (SMEs) operating in a variety of industries. We can provide flexible insurance solutions that are tailored to the specific needs of your customer and their business.
Throughout 2021 and beyond we want to work in partnership with you to protect the businesses of our mutual customers.
For more information visit allianzbroker.com or email us at [email protected]
To access the allianzbroker.com website you need to have a registered username & password linked to your agency number. If you don’t have one, please contact your Customer Relationship Executive and they will be happy to provide one for you. Allianz p.l.c. is regulated by the Central Bank of Ireland.
Allianz_SMEs_210x297_Ad-v3.indd 1 20/01/2021 17:27 Lawyer to Underwriter ...A refreshing perspective Paul McGennis is an experienced Irish Solicitor, who after a 30-year legal career made the transfer in January 2019 to become a Title Indemnity Underwriter – with DUAL Asset, part of the DUAL Group, the world’s largest international underwriting agency.
Outside of his underwriting career, Paul loves to identify the title defects, the solutions to the problems can play weekly 7-a-side football with other ‘mature’ often be best handled and negotiated between brokers and underwriters. DUAL Asset believe that brokers are key to the players. As a lifelong Man City fan, Paul got to meet development of the TI Insurance market by bringing tailored TI his hero Francis Lee a few years ago, when after a Insurance solutions to their trusted clients, including individual City/United derby game he actually got a lift from purchasers/sellers, property developers, banks and lenders. Francis back to Manchester airport! “Some of Irish So, what insurance policy solutions are available? Broker’s more mature readers might remember If it’s a title issue, then DUAL Asset likely have a product, the Frannie Lee - a short, stocky centre forward with list is endless. DUAL Asset are here to assist in unravelling the a powerful shot - later a successful horse trainer quirkier, unusual and niche risks in addition to the more vanilla risks. - and a really down to earth, decent guy.” McGennis explains that DUAL Asset provide policies in Why the switch? perpetuity with one of the largest capacities in the asset Title Indemnity Insurance (TI Insurance) may not sound like market from ‘A’ rated Insurers, which cater for not only large the most exciting area, but for McGennis it presented the commercial acquisitions, but also re-financing and individual opportunity to design tailored solutions to a broad range of residential house transactions. DUAL Asset have the ability title deficiencies, ranging from missing title deeds, right of to tailor the solutions for policyholders whether it be a lender, way concerns, possessory title, all the way through to, rights purchaser, lessee or other holding a legal interest in the to light, windfarms, portfolios and the capacity to transfer relevant asset. company shares. An example of the types of policies that DUAL Asset can What often presents itself to the underwriter are title issues provide cover for are: that have been batted across the net by lawyers for extended l Missing deeds periods, which are preventing deals from being made and l Lease defects transactions completing. l Restrictive covenants l Adverse possession TI Insurance has given Paul a new refreshing perspective l Absence of easements/services where he is now viewed as the source of solutions, which can l Third party rights including pre-emption rights facilitate the resolution of sometimes quite intractable problems l Breach/absence of planning permission allowing corporate and property deals to go ahead. l Title wrapper policies (All risks) l Rights to light How can Title Indemnity Insurance assist? l Title to shares McGennis explains that he often attempts to describe TI l Renewable projects Insurance by equating it to a ‘permanent car wash’ for the title l Loan portfolios defects on a property, development or asset as, insurance is l Commercial and residential portfolios there to add protection. Whether the client has concerns about third party enforcement or there is limited due diligence due to How can a broker obtain a policy for their client? time constraints, TI Insurance can help. McGennis confirms that it is a very straightforward, speedy TI Insurance is a relatively immature market in Ireland, process. Just send the enquiry by e-mail to DUAL Asset and but McGennis believes that there’s great potential for its include the following information: development here just like the other European and UK l Property address jurisdictions where TI Insurance is now one of the first ports of l Transaction summary call to help ensure a swift, hassle-free transaction. McGennis l Purchase price/development value says that through 2020, even in the midst of the Covid-19 l Risk of concern and why pandemic, he has seen a marked increase in demand. McGennis actively encourages you to reach out in order to “TI Insurance is relatively new here, with low awareness and discuss how they can assist you. DUAL Asset are more than market penetration so far, but it’s really growing at a fast pace.” happy to work with you to tailor the best insurance solution possible for your clients. The potential is really what attracted Paul to make the transition over to the insurance profession. Paul McGennis, Title & Legal Indemnity Manager for DUAL Asset in Ireland. For more information about DUAL Asset Can brokers also obtain policies for their clients? Insurance products, you can contact Paul by phone on Despite the misconception, insurance brokers, just like 016971169/086 243 8279 or email: pmcgennis@dualgroup. lawyers, can obtain TI Insurance. Although lawyers usually com 12 | February 2021
Investing responsibly for Today and Tomorrow
Michael Hayes, Investment Development Manager, Irish Life Investment Managers
020 will be forever remembered across the world for the exposure to carbon risk, as set out by the Paris agreement. We terrible and tragic impact of Covid-19. For global markets also target companies that can demonstrate good corporate 2and investment managers the initial savage market selloff behaviour both internally and externally, with employees, in early in the year was followed by a bigger market recovery. communities and with suppliers and shareholders. Incredibly, most major markets finished the year with strong In 2020 ILIM enhanced its ESG capabilities by appointing gains after we had seen one of the quickest and sharpest our first Head of Responsible Investment, Kathy Ryan. We recessions on record. In this period ESG (Environmental, Social also created dedicated ESG themed analyst roles and have & Governance) investment strategies faced perhaps their first embedded an ESG framework across all of our investment major test and passed it well with many ESG strategies out- functions. In addition we delivered an ESG course to every performing traditional indices. member of our staff underpinning ESG principles across all Irish Life Investment Managers (ILIM) is an investment areas of our business. manager for Irish Life Assurance plc. At ILIM we believe in ILIM also recognises its responsibility as an industry leader building a more sustainable future for us all and that we have to help brokers prepare for the challenges and opportunities a responsibility to create long term sustainable returns for our that the future will present and were delighted in 2020 clients. Incorporating environmental, social and governance to deliver Ireland’s first Responsible Investment Adviser (ESG) factors can have a positive impact on the performance course, designed for Financial Brokers and delivered by of our clients’ investments and that the management of ESG the Responsible Investment Institute and accredited by the risks and exploitation of ESG opportunities can add value to Institute of Banking and the LIA. We were supported in this a portfolio. Our first commitment to responsible investing was initiative by Sustainable Finance Skillnet which is funded by over 10 years ago, when in 2010 ILIM were one of the first Irish the Department of Further and Higher Education, Research, signatories to the UN supported Principles for Responsible Innovation and Science. Investing (UNPRI). Alongside the changes in regulation for the asset management Across the Irish Life group we have incorporated sustainability industry, recognising the growing importance and relevance as a core pillar of our future business strategy and brand of ESG factors across all industries, regulatory change is also proposition and we now have €22 billion in responsibly coming for the brokerage and advisory industry. managed assets under management. (Source Irish Life 2020). ILIM is also seeing changing client demands whereby Investing our clients’ money in a responsible way helps make responsible investment is starting to become more of a that a reality and is more likely to create and preserve long-term standard that clients are now looking for and asking Financial investment growth. ILIM focuses on opportunities where ESG Brokers how they are incorporated into their pensions and risks are managed better so we can grow investments and do investments. This is a trend that is likely to intensify over the good at the same time. As climate change poses a significant coming decades as large amounts of wealth passes to the risk to all assets, we are actively reducing our investment next generation.
“Across the Irish Life group we have incorporated sustainability as a core pillar of our future business strategy and brand proposition and we now have €22 billion in responsibly managed assets under management.”
14 | February 2021 ”In 2020 ILIM enhanced its ESG capabilities by appointing our first Head of Responsible Investment, Kathy Ryan. We also created dedicated ESG themed analyst roles and have embedded an ESG framework across all of our investment functions. In addition we delivered an ESG course to every member of our staff underpinning ESG principles across all areas of our business.”
We feel that all of this presents both a risk and an opportunity Our clients trust us with their investments and to deliver on for Financial Brokers. The Responsible Investment Advisor our core promise to them – to deliver better futures, that is our course focused on the best ways to help meet the needs of priority and we believe we can do this and at the same time clients looking for ESG solutions. factor in the responsible impact of our investment decisions. The course was broken up into a number of modules, each As a community we all have a responsibility to align our containing a number of sections encompassing the whole area investment behaviour with an approach that benefits all of of Responsible Investing. The course looked at the changing society. Perhaps, 2020 more than any other year brings home backdrop, the importance of sustainability, the evolution of just how connected as well as how vulnerable we all are to responsible investment and the various steps of incorporating responsible investment into a practice. This included the global trends while also illustrating how powerful the collective practical application of an ESG framework. impact of global action on investing responsibly can be.. Warning: If you invest in this fund you may lose some or all of The Responsible Investment Adviser course was designed to the money you invest. help Financial Brokers develop a fundamental understanding Warning: The value of your investment may go down as well of responsible investing, to better meet the demands of a new as up. generation of investors, move ahead of changing regulation Warning: This fund may be affected by changes in currency and changing customer demands, differentiate from their exchange rates. competitors, develop their brand as a leader in responsible Irish Life Assurance plc is regulated by the Central Bank of Ireland investment and foster stronger relationships with their existing Irish Life Investment Managers Limited is regulated by the Central Bank of clients and attract new clients. Ireland
New Irish economic forecasts from DAVY
e have revised up our GDP forecast to 4.8% in Fresh COVID-19 restrictions will delay recovery W2021 (3.8% previously) and 5.5% in 2022 due We expect activity will bounce back sharply in H2 2021, but to buoyant exports and multinational sector output. in calendar year growth terms this pushes the recovery into In contrast, fresh COVID-19 restrictions will depress 2022. Hence, we expect an incomplete recovery this year in activity in H1 2021, delaying the recovery. We expect consumer spending (5.2%) and employment (5.9%), with the unemployment rate declining to 12% by end-2021. In contrast, consumer spending (5.2%) and employment (5.9%) we expect Ireland’s government deficit will fall to €18bn (4.6% to see a partial rebound, with the government balance of GDP), still outperforming peers, with the debt/GDP ratio at narrowing to €18bn, 4.6% of GDP, in 2021. House 61%. The housing market has been exceptionally resilient; we prices will rise by 3% this year with mortgage lending expect house prices to rise 3% in 2021 and mortgage lending rebounding to €9.5bn. of €9.5bn.
Revising up Irish GDP forecasts on resilient exports Pace of vaccine rollout key risk to our forecasts We have revised up our GDP growth forecast to 4.8% in Ireland’s economy demonstrated that activity and spending can bounce back once restrictions are lifted, especially with 2021 and 5.5% in 2022. This reflects exceptional export savings elevated. Our forecasts could be too conservative, performance, driven by the pharmaceutical and information assuming output in hard hit sectors (construction, retail, and communications technology sectors. We expect the hospitality) remains below pre-COVID-19 levels by end- multinational sector grew by 20% in 2020 and will expand by 2022. One risk here is that financial stress and company 6% in 2021. However, fresh COVID-19 business and travel liquidations delay any rebound, although the initial signs from restrictions will disrupt domestic spending in H1 2021. Our loan performance have been encouraging. Crucially, our view forecast is for a slower recovery in indigenous sector output, that a ‘no-deal’ Brexit would be avoided by the EU and UK contracting by 10% in 2020 and expanding by 2.7% and 8.3% has been borne out; in time, this may encourage investment in 2021 and 2022. among SMEs after over a decade of balance sheet repair. February 2021 | 15 2021 1 Product Range 1 Platform For all new individual business
As we start 2021 we are pleased to let you know, following a number of new launches, our product integration with Friends First is fully complete. We are now offering one single suite of products based around investment and pricing choice, flexibility and transparency to you and your clients.
We are confident this will simplify all of your dealings with Aviva and help us to continue to improve our service to you our valued broker partners.
For full details see www.avivabroker.ie or talk to your Account Manager.
You’re safe in the hands of Aviva
Aviva Life & Pensions Ireland Designated Activity Company, a private company limited by shares. Registered in Ireland No. 165970. Registered office at One Park Place, Hatch Street, Dublin 2, D02 E651. Aviva Life & Pensions Ireland Designated Activity Company, trading as Aviva Life & Pensions Ireland and Friends First, is regulated by the Central Bank of Ireland. Tel (01) 898 7950.
February '20 IBA - 1 Product Range 1 Platform A4.indd 1 22/01/2021 09:15 PROPERTY24-7
“Broker software firms must respond to the need for remote working and direct customer access, with modern cloud-based systems”
Philip O’Reilly, Chairman, Money Advice CRM and Property CRM t Money Advice we have been developing a software CRM l Shortage of properties for sale in the market. Aplatform that manages the business of financial and mortgage l The very onerous requirements for customers in the mortgage brokers for more than 25 years. I believe it is fair to say that brokers application process. found more uses for our software in 2020 than ever before. 25 years ago, I attended a meeting in the Green Isle Hotel, with The impact of Covid-19 on the workplace is already well documented; all lenders, where they all agreed to accept online applications. the question is, what long term changes will it bring? Remote working Little has happened since in the lender online space (only Haven from sunshine locations? Mortgages currently provide brokers with end-to-end online As more broker customers, work from home their requirements for mortgage application capability using Money Advice services). online financial, property and mortgage services are also increasing. At Money Advice CRM we can provide lenders and mortgage A full online mortgage quotation and application is fast becoming a networks with the software they need to accept mortgage applications basic requirement as is an online life quotation and proposal. and supporting documentation online. In the process we can also In our new world of consuming remote and online services provide the software to receive in applications, for printing at their significant IT changes are becoming mandatory for our sector. We lending centers or populating their own systems. now need more capable IT platforms and a requirement to deploy We provide tools such as Open Banking and DocuSign to allow additional technology tools in our standard platforms to enable AML Mortgage 24-7 deal with some of the technical requirements. verification, remote signatures, remote banking information and other requirements as they emerge in the new working world – “Remo-IT”. The requirements issue might be addressed through dialogue, technology and interaction between lenders, Central Bank and MONEY ADVICE CRM www.moneyadvice.ie Brokers Ireland. For example, could uniform requirements, standards and forms be agreed? In 2020 we re-built our financial and mortgage broker cloud-based software CRM platform, Money Advice CRM. Perhaps mortgage lenders would consider enabling client mortgage With new Money Advice CRM ready for imminent release, the data to be downloaded to appointed broker systems as the life cloud-based software CRM platform will provide brokers with companies do? the latest management, needs analysis, protection quotations, PROPERTY CRM www.propertycrm.ie mortgage quotations and affordability calculators, data downloads, July 2020 saw Ireland’s leading Property CRM solution enter compliance, data protection, commissions and sales capabilities on the marketplace. Property CRM has been a huge success since the newest technology platform. its launch, as it is a robust, online, sales and letting management Money Advice CRM will also facilitate mortgage brokers providing solution for estate and letting agents. It is ideal for remote working online mortgage services, life protection quotes and life company and is available on all smart devices including mobile phones. policy data downloads. Property CRM is specifically designed for the Irish market, with a Also new to market in 2021 is Financial 24-7 which will be a customer major element of that being compliance management throughout service providing life quotes and online application facilities. the entire sales/letting process. Compliance management is a key Our aim is to be a leader in the movement to convert life companies to component of the system. the new way of doing business by providing more broker supporting, Property CRM is cutting-edge, cloud-based technology, with full CRM online services and enhanced data downloads as proposed some with particular emphasis on appointment management, document time ago by Brokers Ireland. management, client accounting, brochure build, DocuSign and Open Banking. Property CRM has automated processes for uploading MORTGAGE 24-7 www.mortgage24-7.ie properties to daft.ie, myhome.ie, property pal, and property 24-7. Thankfully, the mortgage market has become active again albeit with a lot of challenges and new opportunities. Some of the challenges PROPERTY 24-7 www.property24-7.ie can be addressed while others are beyond reach of the industry. To further enhance Property CRM we are launching www. I predict that the percentage of applications coming from brokers will Property24-7.ie the new Irish property portal in March 2021. in time be 50% of the market. This will be a nationwide property search portal enabling clients to For customers, online broker mortgage shopping is now a reality. manage their property search preferences, viewings, offers, etc. With the launch of www.mortgage24-7.ie, an online mortgage It will also advise clients as new properties of interest come to the application solution for brokers enabling customers to complete market. end-to-end online mortgage applications. www.mortgage24-7. ie gives customers the opportunity to research and transact their Planning the future mortgage online. Applications made are automatically populated in Technology costs. Given the size of our market there are financial Money Advice CRM giving the broker complete control to manage limitations to the amount of Irish market-specific software that can the process online. be delivered, and this will be an inhibiting factor going forward. All There are challenges from a broker’s point of view in delivering such players in the market need to address this issue and find a solution. a service. These include: This will particularly impact smaller firms and will be vital to the l A requirement for more lender support for brokers in their work, survival of these important players in the industry. particularly in the online space. Email: [email protected] February 2021 | 17 Zurich Investment Outlook 2021 Crest of the wave?
Ian Slattery, Investment Consultant, Zurich s we wave goodbye to 2020 it is an opportune time to Discretionary (+26%) massively outperforming sectors such take stock of investment markets in a year that has been as Real Estate (-12%) and Energy (-36%). Atruly remarkable in every sense. 2020 began ominously, The Federal Reserve cut short-term interest rates in March by with geopolitical tensions between the US and Iran at an all- 1.5% to the 0% - 0.25% range and has recently announced time high, and simultaneously, a watching world gripped by a change in its inflation targeting which is likely to keep rates images of devastating bushfires in Australia. What was to unchanged for the foreseeable future. follow cemented this year’s reputation in modern history and Eurozone bonds performed well throughout the period, is near impossible to summarise in just a paragraph. In the US particularly as the COVID-19 pandemic unfolded. alone we had a presidential impeachment, a raging pandemic, Commodities and currencies endured a rollercoaster ride as the largest protests in history, a disputed presidential election, gold and a number of ‘safe haven’ currencies saw significant and a global stock market up nearly 7% for the year after a price appreciation at the height of the crisis. The price of oil historic collapse in the spring. With that in mind, it is worth collapsed in the early months of the year. reviewing the year just gone, and also look to the year ahead Equities Outlook to help better understand how global events may not have had the impact on your client’s savings and investments that they Global equities have seen huge sector dispersion throughout expected. 2020. Growth stocks with the ability to capitalise on the ‘work- from-home’, ‘play-from-home’, ‘deliver-to-home’ narratives performed best at the expense of more cyclical, and some traditional parts of the market. In relation to stock, rotation dispersions can persist for long periods, however the reversal of trends can be swift and with large impacts. Therefore, a flexible approach is required. Some mean reversion is likely to happen and as the vaccine starts to win over the virus some ‘catch up’ for more cyclical names could occur. Our geographical preferences are a function of both our views on localised growth prospects, valuations, and the sectoral makeup of the stock market. We favour Eurozone and Asia Pacific and have also increased allocations to Japan in recent months. At a sector level, we are attempting to capitalise on long term structural trends within sectors such as Technology and Consumer Discretionary. We remain cognisant of the key risks to equity markets, volatility will be evident throughout the year, and our geographical and sector weightings are subject to change in the short-term as 2020 – An Unforgettable Year market conditions dictate. Geographically, in 2020, markets have been led by the Fixed Income Outlook influential US stock market, which is the largest in the world. Global interest rates are expected to remain close to record Sector divergence has been a key theme in markets this lows into 2021, as the fragile recovery continues after the year with the likes of Technology (+32%) and Consumer shock of the COVID-19 induced recession. The Federal “For your pensions, savings and investment clients, sticking to long-term goals, continuing contributions, and having an investment manager that can outperform are investment principles that will stand the test of time. “
18 | February 2021 Reserve announced in August that it would allow inflation to In Conclusion run ‘moderately’ above its 2% goal. 2020 was a volatile year – but not a negative one for investors. The scope of monetary policy intervention in both Europe and Despite the rollercoaster ride in 2020, there are no guarantees the US remains unprecedented, with the Federal Reserve that 2021 will be benign for markets. Already we are seeing likely to continue in its leading role. Monetary policy globally increased COVID-19 case numbers, issues with vaccine remains accommodative given the perceived fragile nature of rollouts, and enduring political strife over the US election. the global economy. However, for your pensions, savings and investment clients, sticking to long-term goals, continuing contributions, and Although price action was positive in 2020, as investors sought having an investment manager that can outperform are safe havens, we maintain that the risk / reward backdrop is investment principles that will stand the test of time. now skewed towards a cautious outlook for bond markets. The Zurich Investment Outlook is produced twice yearly by Within such a low interest rate environment, real yields remain the team at Zurich Investments, based in Dublin, Ireland. The negative across much of the sovereign bond universe. Zurich full publication, available on our website, provides an in-depth Investments continue to be underweight eurozone sovereign insight into our current thinking and positioning and expands on debt across our multi-asset funds and the duration of the bonds the reasons behind our economic views. For more information is below average. Throughout 2020 we have rotated some of talk to your Zurich Broker Consultant or visit zurichbroker.ie. our short-term sovereign bond portfolio into corporate debt. Zurich Life Assurance plc is regulated by the Central Bank of Ireland.
New Appointment at Ecclesiastical
cclesiastical Insurance are pleased to announce the appointment of Róisín EBurns to the position of Technical Claims Specialist. Róisín is a qualified solicitor who holds several post graduate qualifications in Technology, Media and Entertainment law as well as a LLM in Criminal Law. She has worked with Pepper Asset Servicing as a Legal Counsel, and previously with Allianz Insurance. She completed her legal training with Carmody & Co. Solicitors. Her wide range of knowledge and experience will add to an already well established claims team where she will deal with cross class complex cases. Michael Fleming, Head of Claims – Ecclesiastical Ireland said “ We are delighted to welcome Róisín to the firm, where her additional skillset will add to our range of claims solutions.”
Róisín Burns, Technical Claims Specialist, Ecclesiastical
February 2021 | 19 The Future is Bright.
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Proposal to replace ARF with PRSA A Government interdepartmental group recently published a Report setting out pension reform proposals. One of their key recommendations was the future abolition of the individual ARF contract Tony Gilhawley, FSAI
The key proposals However this feature would be optional for DC schemes. My own view is that few employers/schemes will offer in-scheme The key ARF proposals in the Report were: drawdown for a few reasons: l From a future date (not yet determined) the current vested l It involves giving advice to retirement members, which PRSA end date of 75 would be removed and a new ‘whole most scheme trustees and employers will not want to take of life’ PRSA would replace the ARF. on. l Group DC schemes would be able to offer in scheme l Some employers may fear moral pressure in the future to drawdown, i.e. at retirement a member would take his or top up the funds of long retired former employees. her 25% lump sum and leave the balance in the scheme taking regular withdrawals in retirement as if it were an I therefore do not see in-scheme drawdown as a major feature ARF. of the future market. l Group ARF structures would be developed, i.e. offering ARF drawdown within a group structure. Group ARF structures The Report also proposed the concept of group ARF structures, The whole of life PRSA e.g. a master trust scheme covering only retired members with ‘ARF’ funds, i.e. decumulation only schemes. Perhaps the most controversial proposal is that a new whole of life PRSA would replace the ARF for new retirees from a certain The rationale put forward for this proposal is that consumers date in the future. in a group ARF structure would benefit from lower charges due to economies of scale, independent trustee support and Three suggested reasons in the Report for this change include: oversight, and better default investment options, than if they l The PRSA should be the only individual pension product in were in an individual ARF product or PRSA. the marketplace, replacing RACs, PRBs and ARFs. But who would set up and run such group ARF structures? l A view that ARFs are currently largely unregulated but It’s unlikely employers will and so therefore the most likely PRSAs are highly regulated and hence PRSAs offer more providers may be current QFMs offering group ARFs for protection to consumers. affinity groups, e.g. trade unions, professions, ex employees l By accumulating and withdrawing from the same product, of specific large employers, etc. there is no need to liquidate funds at retirement and However there is a significant risk that without safeguards, therefore no need to derisk investment in the run up to group ARF structures could become monopolies in certain taking benefits. areas and only appear to offer lower charges by providing The view that ARFs are unregulated is questionable given that very limited remote advice, if at all, and significantly limiting the sale of life company ARF policies is subject to the full rigours investment choice. of the Insurance Distribution Regulations and the Consumer The type of consumer safeguards which may be needed as Protection Code. Only the provision of advice by retail part of a group ARF structure include: intermediaries on MIFID firm ARFs is currently unregulated but l this can be easily remedied by adding a MIFID firm ARF to the Right of a consumer at retirement to not join a group ARF Investment Intermediaries Act list of investment instruments as structure but use an individual ARF or PRSA product currently applies to MIFID firm PRSAs. instead; l The current PRSA product design and structure would have No referring by the group ARF of members to a ‘tied’ advisor to be substantially changed to offer consumers the same connected with any of the existing service providers; investment options and option to pay for financial advice which l Right of a member to leave at any time, without penalty, to ARFs currently offer. move to an individual ARF or PRSA; and l Right of a member to seek independent financial advice on In scheme drawdown his or her group ARF fund and have the cost of such advice The Group proposed that DC schemes could optionally offer charged to his or her fund. retiring members the right to keep the balance of their fund in the scheme, after taking their lump sum, and draw on their Conclusion fund throughout life as if it were an ARF. The ARF market may undergo significant change in the future The Report suggested that such a feature would offer scheme but in my view there will always be a need for an individual ARF members lower charges by staying in the same scheme and type product with wide investment options and the benefit of not having to liquidate funds to move to an individual ARF. independent financial advice. That will not change.
February 2021 | 21 “What’s the retirement age in Ireland?”
f a client asked that question 20 years ago, most advisors Sounds straightforward, but, of course, there are exceptions: would have said 65. After all, 65 was the qualifying age for l Both can be accessed at any point due to ill health Ithe contributory State Pension and the ‘standard’ Normal l Certain occupations allow access to benefits from Retirement Age (NRA) for the Defined Benefit and Defined both products after age 50 – for example, professional Contribution pensions of public sector workers and most sportspeople private sector workers. l PRSAs can be accessed by employees from age 50, but Now, however, it depends on how you are asked the question only if they are leaving employment, whereas Personal and the type of pension(s) your client has. Do they mean: Pensions cannot. 1. The State Pension age? There are no issues if your client chooses 65 as their retirement 2. The earliest age you can access your pension? age at the outset then changes their mind and decides to 3. The latest age by which you have to access your pension? access their benefits earlier (after 60) or later (before 75). “Do you mean the State Pension age?” However, if a client does not access their benefits before their th The qualifying age for the State Pension is 66 and was supposed 75 birthday, the policy is automatically vested. They will have to rise to 67 on 1 January, 2021 but the Government made the no further access to the funds, other than on death where the decision not to go ahead with the increase. This change was funds pass to the estate and will be treated as an Approved COVID-19-related, but the rise in qualifying age was also a hot Retirement Fund (ARF) for tax purposes. topic in all party manifestos during the last election. Revenue has granted a concession on this requirement to 31 Will the Government decide to stop at 67? If this is just a March 2021 to take into account people who are restricting temporary pause, will it have a knock on effect on the current their social interaction due to COVID-19. agreement to increase the qualifying age to 68 in 2028? Occupational Pensions (OPS) and Personal Retirement The newly formed Commission for Pensions is reviewing the Bonds (PRB) qualifying age, along with eligibility rules and sustainability. It Unlike Personal Pensions and PRSAs, OPS must have a NRA is due to submit recommendations to the Minister for Social of between 60 and 70. Where a transfer is made from an OPS Protection by 30 June 2021. Hopefully the picture will become to a PRB, the NRA of the OPS must be used. clearer after that. Again, there are some exceptions: “Do you mean the earliest/latest age you can access your l Benefits can be accessed due to ill health, at any point pension?” l Benefits can be accessed from age 50, on leaving In order to answer this question, we need to know which type employment. of pension(s) a client has. 20% directors accessing benefits before their NRA must also Personal Pensions and Personal Retirement Savings dispose of their shareholding in the company they are leaving. Accounts (PRSAs) This doesn’t apply to PRSAs. There’s no “NRA”, however, clients do have to make a decision It’s a common misconception that the requirement to leave in relation to their chosen retirement age. The current retirement employment only applies between 50 and 60, but this is not age “range” for these products is between 60 and 75. the case. For example, if the NRA of the OPS is 65 and your
”The newly formed Commission for Pensions is reviewing the qualifying age, along with eligibility rules and sustainability. It is due to submit recommendations to the Minister for Social Protection by 30 June 2021. Hopefully the picture will become clearer after that.”
22 | February 2021 “The Interdepartmental Pensions Reform & Taxation Group report published in November 2020 included a number of radical changes.”
By George Nolan, Head of Retirement & Technical Insights, New Ireland
client wants to access benefits at 62, they would only be able For OPS, PRBs and for employees with PRSAs, it would mean to do so where they are leaving employment. funds could no longer be accessed from 50. These clients Unlike Personal Pensions and PRSAs, there’s no compulsory would have to wait until age 55 instead. It could also result in a point at which benefits in an OPS or PRB must be accessed compulsory requirement to access benefits in OPS at age 75. so as to avoid any negative client impact. So while the NRA The report has taken this into consideration and proposed a can only be set up to age 70, it is possible for a client to defer lead-in period before the proposed changes take effect. This taking benefits up to any age. It’s also possible, subject to would allow those intending to retire early to plan accordingly. Revenue limits, to continue contributions to an OPS after age Finally, under the proposed Auto Enrolment system, the NRA 70. is to be linked to the qualifying age for State Pension (whatever Impact of proposed standardisation that might be). If that happens, Automatic Enrolment would not be aligned to any changes to other supplementary pensions. The Interdepartmental Pensions Reform & Taxation Group Something that those behind the report will need to consider report published in November 2020 included a number of before making their final decisions. radical changes. Among them was the proposal to standardise Information correct as at 14.01.2021 and subject to change without notice. The the age range at which someone can access a private pension content of this article is for information purposes only. While great care has to between 55 and 75. been taken in its preparation, this article is of a general nature and should not be relied on in relation to a specific issue without first taking appropriate financial, For Personal Pensions and PRSAs, the change is, in the main, insurance, investment or other professional advice. positive as it would allow clients access funds earlier than they New Ireland Assurance Company plc is regulated by the Central Bank of Ireland. can today. A member of Bank of Ireland Group.
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February 2021 | 23 Knowledge Worth Sharing Over 74%* of you said you found it easier to complete your CPD in 2020. To support you again in 2021, we are hosting weekly webinars, with our CPD Series commencing on 11th February with a Financial Services and Pensions Ombudsman Update. To find out more or You Asked, We Listened book your place, visit More than 90%* of you rated our webinar content as Very Good or Excellent last year, so we’ve incorporated your feedback into this year’s series. Along iii.ie/CPD or login to with Ethics, regulation and data protection we will focus on new topics - your Member Area Takaful, Dental, Environmental and Noise Pollution to name a few.
We can’t wait to virtually see you there.
Your Future, Insured. *Statistics taken from The Insurance Institute Webinar Attendee Survey 2020 A standout year for Aviva’s Merrion Multi-Asset Fund range
“Aviva’s Merrion Multi-Asset Funds topped their peer group in 2020. I caught up with Pearse McManus CEO at Merrion Investment Managers to ask him the drivers of this strong performance.” Stephen Rice, Pension and Investment Proposition Lead, Aviva Life & Pensions
Pearse how did the funds perform in 2020 and what were The drivers of our strong performance over the course of the year the key drivers of these returns? therefore were numerous – asset allocation, equity selection, The key reasons for the outstanding performance of our three defensive asset selection, and the changes to all of the above multi asset funds were varied and included asset allocation, over the course of what has been a very volatile year. sector and stock selection. What’s your outlook for the market in 2021 and how are you Their active management style / investment process has enabled positioning your fund in light of your outlook? us to exploit the opportunities presented by the Covid 19 crisis. As we enter 2021, we continue to highlight what we have been We have done this historically, as is evident from our very strong positioned for since March and continue to be positioned for. As long-term track record - and what we’ve done this year is to central banks guarded against a financial crisis and subsequent extend that long-term track record. deflationary-bust they have accelerated a technology-led, The key drivers of our returns were numerous, driven by our reflationary boom. Interest rates will remain at or near zero 3-pillar investment process, which has delivered very strong for a long time to come, and governments will be reluctant to returns for investors over many years. curtail fiscal spending. The collapse in the global economy, the huge fiscal boost and extremely loose monetary policy meant we moved from late-cycle to early-cycle in a matter of weeks. The pandemic, which forced a move to online, has accelerated trends that were already in place in technology. The evidence is overwhelmingly abundant: the dollar is breaking down against every major and emerging currency; copper is at an eight- year-high; iron ore has exploded higher; Korean and Japanese How did your three pillar process guide you in 2020? technology stocks are accelerating to new highs; the most At the beginning of this year our process was telling us that we recent stimulus package agreed in the US ($900bln) has been were in a low-growth, late cycle, high risk world, one which was described by President-elect Biden as only a “down payment” characterised by excessive risk taking among investors, which on what’s to come; there aren’t enough trucks in the US to fulfil had led to a reach for yield and over-exposure to illiquid assets. UPS and Fedex’s customer demand for e commerce; there aren’t This is typical of what you see in the late stages of an economic enough semi-conductor parts for Marvell to fulfil its demand for cycle, and it meant that we had positioned the funds at the lower 5G data centres; Ryanair expect to fly 170 million passengers in end of their allocation ranges for growth assets. 2023; Irish mortgage approvals are at a 10-year high; Lloyds in But more than that, within growth assets the focus was on the UK has reintroduced 90% mortgages for first time buyers; exposure to sustainable, structural growth and defensive the Federal Reserve is permitting bank buybacks again; the equities. CEO of Carnival highlighted that they have two years’ worth of And within defensive assets, we held overweight positions in US demand from customers with less than 1 year’s usual capacity; Treasuries, German Bonds and Gold, and little or no exposure to S&P companies, which started 2020 with $1.5 trillion of cash on corporate bonds their balance sheets ended the year with $2 trillion; the ISM Index In addition to the above our alternative exposure had a lot of is 5 months into what is usually a 35 month expansionary cycle equity market protection. (according to the CEO of ISM). The economic collapse saw a rapid response from authorities Warning: Past performance is not a reliable guide to future around the world, and we effectively went from late cycle to performance. early cycle in the space of a few weeks. This meant that we had Warning: The value of your investment may go down as well as the opportunity to get more exposure to sustainable structural up. growth, but at a better price, to add some industrial cyclicals Warning: If you invest in this fund you may lose some or all of the and consumer cyclicals, to reduce exposure to the very safe money you invest. assets such as US treasuries, German bonds and Gold in favour Warning: This fund may be affected by changes in currency of periphery debt and a basket of corporate bonds. exchange rates. In other words, we moved to the upper end of our asset 1. Source: Longboat Analytics performance quoted to 01 January 2021. The allocation ranges, but with a very different mix than before. returns quoted include the reinvestment of net income and are net of trading costs, but before deduction of annual management charges and other insurance contract These decisions meant the funds captured the majority of the charges and as such do not represent the returns on insurance contracts linked gains in April and May as markets recovered strongly. This was to these funds. Details of all charges for a particular product are available on a significant contributor to the outstanding returns of our three request. The information in this document does not constitute investment advice. It does not take into account the investment objectives, financial position or needs multi asset funds in 2020. of any particular investor. Peer group is vs other Multi-Asset in the same ESMA The market response to reopening and fiscal and monetary risk category. stimulus was rapid, and over the summer we reduced exposure Aviva Life & Pensions Ireland Designated Activity Company, a private company as Covid cases began to rise again, but we used the sell-off in limited by shares. Registered in Ireland No. 165970. Registered office at One Park Place, Hatch Street, Dublin 2, D02 E651. Aviva Life & Pensions Ireland Designated September to bring the funds back towards the upper end of Activity Company, trading as Aviva Life & Pensions Ireland and Friends First, is their asset allocation ranges, where we have been since. regulated by the Central Bank of Ireland. Tel (01) 898 7950. February 2021 | 25 Aviva Broker s Community Organisation Winners s
Community Fund Boden Park CREGGS R.F.C. Galway Swimming Club 2020 Winners Residents Association
On Friday 15th January Aviva held its awards There were three winners of the community ceremony for the Aviva Broker Community Fund, organisation donation of €10,000. These included PHOTO HERE where 30 donations from a pot of €100,000 Creggs Rugby Club nominated by Aengus Oates were given away to charities and community Financial Services, Galway Swimming Club organisations across the country, as nominated nominated by Nevin Life & Pensions Ltd, and by brokers. Boden Park Residents Association nominated by Chartered Financial Solutions. Two runners-up A small community with a thriving Mark Gibbs, Chairperson Galway Swimming Club makes Entrance sign to Boden Park estate. local rugby club in Creggs RFC presentation to Tim Hinsey, CEO USA Swimming, following Williams Syndrome Ireland nominated by received €5,000, Westival nominated by his participation in the GSC Longest Day Swim, June 2019. Willis Tower Watson took the top charity Hastings Insurance Brokers and The Hills Cricket donation of €20,000. The four runners-up of Club nominated by Squaremile Financial Consultants. €5,000 each in the charity category were CARMHA nominated by SYS Wealth & Financial Planners, An additional 20 donations of €1,000 was pulled from Irish Guide Dogs nominated by Provest Private a draw on the day. Clients, Delta Centre nominated by Hooper Dolan Nominated by: Insurance Ltd, and Blood Bikes Leinster nominated For full details, visit Nominated by: Nominated by: by Pembroke Insurance. www.avivabroker.ie/broker-community-fund f inancial brokers for pensions, investments & protection
s Charity Winner s s Charity Runners-up s
s Community Organisation s Commenting Brian O’Neill, Head of Communications, Williams Syndrome Ireland Nominated by: Runners-up Brand & Sponsorship at Aviva Ireland said:
“As a leading socially responsible insurer, Aviva is Nominated by: delighted to support the communities in which we operate, where our people work and where our Nominated by: customers live. Through the Aviva Broker Community Fund, we are able to support the causes that are close to the hearts of our brokers. I would like to congratulate Nominated by: all of our shortlisted charities/community organisations today and wish them continued success in the great Attendees of a Williams Syndrome summer camp. work that they are undertaking in their communities”. Nominated by:
deltacentre
You’re safe in the hands of Aviva. Nominated by: | Retirement | Investments | Insurance |
Nominated by: Aviva Insurance Ireland Designated Activity Company, trading as Aviva, is regulated by the Central Bank of Ireland. Aviva Life & Pensions Ireland Designated Activity Company, trading as Aviva Life & Pensions Ireland and Friends First, is regulated by the Central Bank of Ireland. Aviva Broker s Community Organisation Winners s
Community Fund Boden Park CREGGS R.F.C. Galway Swimming Club 2020 Winners Residents Association
On Friday 15th January Aviva held its awards There were three winners of the community ceremony for the Aviva Broker Community Fund, organisation donation of €10,000. These included PHOTO HERE where 30 donations from a pot of €100,000 Creggs Rugby Club nominated by Aengus Oates were given away to charities and community Financial Services, Galway Swimming Club organisations across the country, as nominated nominated by Nevin Life & Pensions Ltd, and by brokers. Boden Park Residents Association nominated by Chartered Financial Solutions. Two runners-up A small community with a thriving Mark Gibbs, Chairperson Galway Swimming Club makes Entrance sign to Boden Park estate. local rugby club in Creggs RFC presentation to Tim Hinsey, CEO USA Swimming, following Williams Syndrome Ireland nominated by received €5,000, Westival nominated by his participation in the GSC Longest Day Swim, June 2019. Willis Tower Watson took the top charity Hastings Insurance Brokers and The Hills Cricket donation of €20,000. The four runners-up of Club nominated by Squaremile Financial Consultants. €5,000 each in the charity category were CARMHA nominated by SYS Wealth & Financial Planners, An additional 20 donations of €1,000 was pulled from Irish Guide Dogs nominated by Provest Private a draw on the day. Clients, Delta Centre nominated by Hooper Dolan Nominated by: Insurance Ltd, and Blood Bikes Leinster nominated For full details, visit Nominated by: Nominated by: by Pembroke Insurance. www.avivabroker.ie/broker-community-fund f inancial brokers for pensions, investments & protection s Charity Winner s s Charity Runners-up s
s Community Organisation s Commenting Brian O’Neill, Head of Communications, Williams Syndrome Ireland Nominated by: Runners-up Brand & Sponsorship at Aviva Ireland said:
“As a leading socially responsible insurer, Aviva is Nominated by: delighted to support the communities in which we operate, where our people work and where our Nominated by: customers live. Through the Aviva Broker Community Fund, we are able to support the causes that are close to the hearts of our brokers. I would like to congratulate Nominated by: all of our shortlisted charities/community organisations today and wish them continued success in the great Attendees of a Williams Syndrome summer camp. work that they are undertaking in their communities”. Nominated by:
deltacentre
You’re safe in the hands of Aviva. Nominated by: | Retirement | Investments | Insurance |
Nominated by: Aviva Insurance Ireland Designated Activity Company, trading as Aviva, is regulated by the Central Bank of Ireland. Aviva Life & Pensions Ireland Designated Activity Company, trading as Aviva Life & Pensions Ireland and Friends First, is regulated by the Central Bank of Ireland. 2020 A year like no other
Many of us might be keen to draw a line under 2020 and look forward to rosier times. It would be remiss, however, not to take a moment to reflect on what has been an extraordinary period and consider the lessons we take into 2021 – and beyond.
inancial advisers faced an almighty challenge in 2020. In fixed income while the sell-off wasn’t as severe, there were The fastest bear market in history was followed by the losses none-the-less. But all sectors that suffered losses have Ffastest ever bull market, taking investors on an almighty recovered and broadly speaking generated some decent rollercoaster ride. Meanwhile, policymakers around the world returns. implemented aggressive monetary stimulus to prop up local So how did these market returns translate into Standard economies through the pandemic. Life’s fund performance? Throughout the volatility, advisers were unable to meet their clients in person. However, we saw many advisers adapt their Of the 42* funds that were available for investment at the start approach and maintain their existing client relationships and of the year, 31 funds returned positive gains. learning new ways of nurturing fresh ones. *Excluding India Equity Fund which closed in October 2020 That’s not to say it hasn’t been a learning curve for all of us While 2019 was the year for the UK Smaller Companies Fund, – working remotely without face-to-face interactions with where it generated a return of 54%, 2020 was the year of the colleagues and clients has been challenging. Our Business Global Smaller Companies Fund and it was our top performing Managers were quick to adopt video call technology to continue fund in 2020. The fund generated over 26% (gross), significantly engaging with advisers and we adapted our usual CPD events outperforming both global large-cap equities and its own and workshops to deliver a higher number of webinars with the benchmark. The European Smaller Companies Fund also aim of keeping you informed. As we gradually emerge from had a standout year. When you consider European large-cap the pandemic, the increased adoption of technology is likely equities generated a negative return over the year, a positive to continue as investors become accustomed to the ease of return of 16% is fantastic in anyone’s eyes. The UK fund was digital communications. broadly flat. However, it also outperformed its large cap peers 2020 has also been a tumultuous experience for investors by quite a margin. The robust, long-term returns of our Smaller Companies range really are a testament to Aberdeen Standard When you consider that the market sell-off in February/March Investments’ investment process that underpins the funds. of last year led to losses ranging from 28-40%, it really has been an astonishing recovery from the lows. It also goes to Moving on to equities, all-in-all it was another successful year. show that investors, who held on to their investments by Japan, Asia Pacific and China all generated healthy double- maintaining discipline, taking a long-term view and seeking digit returns. The UK equity fund generated returns broadly financial advice likely ended up in positive territory for the year. in line with the FTSE 100 over the year, and was the poorest It’s probably no surprise to anyone that the NASDAQ was the performing fund in our range for 2020. Interestingly, it really standout performer up over 36% for the year, the defensive does appear that 2020 was the year for ESG themed funds. characteristics of mega-cap tech really came to the fore in While our European Equity Fund outperformed its benchmark, 2020. The S&P (8.0%) generated similar returns to emerging our European Ethical Equity fund outperformed the traditional markets (8.5%), while global equities were also positive to the European Equity fund, and indeed European equity markets tune of just over 6%. While European equities clawed back by some margin. Our Global Equity Impact fund outperformed the majority of losses throughout the year, and despite a huge its benchmark by over 10%, and for the second year running bounce in November and December, they still finished in outperformed global equities. negative territory for the year down -2.8%. UK stocks really Looking at our index trackers, which are managed by were the unloved equities of 2020, finishing the year with Vanguard, each one is doing exactly what they are supposed double-digit losses (-16.3%) despite a Brexit deal being to and that’s to track their relevant index. Not outperform or finalised. underperform it, but to generate a return in line with the index. 28 | February 2021 “At a difficult time for our industry, we have weathered the storm and come out stronger, thanks in no small part to the ongoing support we continue to receive from our adviser partners. Despite the challenges faced last year, we think the long-term future of advice is in a good place and there are exciting times ahead for advisers.” Niall Black, Investment Specialist, Standard Life
The respective tracking errors for the funds show just how Rewarding long-term investors and risk takers successful Vanguard is in the passive investing space. Ten years ago the world was emerging from the financial crisis, In terms of MyFolio, these funds behaved exactly as we would but long-term investors who remained invested in diversified expect. They are designed to generate the best possible return portfolios can look back with satisfaction. For example, the ten in line with the level of risk taken. They do not jump in and out year annualised returns of the Standard Life Cautious Managed of markets during periods of volatility, nor do they have bias Fund was 6.5% pa and Standard Life Managed Fund 9.3% pa to any particular sector of the equity market. While the funds’ both demonstrating that patience is a virtue when it comes to exposure to European and UK equities held back performance long-term investing. Time is much more important than timing. during 2020, the losses suffered have been broadly recouped, Finally, it’s great to see those investors that took the most particularly during the final quarter of the year. MyFolio Active risk, were most rewarded. A €100,000 investment in the UK outperformed MyFolio Market over the year. Smaller Companies fund in January 2011 would be worth over Moving on to multi-asset, GARS was really the stand out €313,000**. And a similar investment in the European Smaller performer here. 2020 has accelerated some trends and created Companies fund would be worth over €336,000**. new ones. Investment strategies need to adapt to the new After an eventful year, to put it mildly, we want to thank all the environment. Generating returns in this environment requires advisers that have engaged with us in 2020. a more flexible and focused approach, and awareness of At a difficult time for our industry, we have weathered the storm environmental, social and governance (ESG) risks, particularly and come out stronger, thanks in no small part to the ongoing social change. The process and team changes made to support we continue to receive from our adviser partners. GARS over last two years make it well-placed to capitalise on these trends and has really translated into some very strong Despite the challenges faced last year, we think the long-term performance numbers. future of advice is in a good place and there are exciting times ahead for advisers. Commercial real estate was a sector that really suffered during **Source: FE fundinfo, 2020, net of annual management charge, gross of taxes the year and this is reflected in the performance of our real and adviser charges. The actual return achieved by policies may be lower estate funds. because of these charges and taxes.
February 2021 | 29 How can we help? WINNING WITH AIG
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hard market calls for an alignment of interests and have become more challenging for insurance buyers, not least closer collaboration between insurers, service providers because their premiums are increasing and at the same time Aand clients. A hard insurance market has traditionally they are forced to retain more of the risk within their captives or been a bellwether for captive growth. Previous hard markets on their own balance sheets. have seen existing captive owners make more use of their An added dimension is the changing risk landscape. As risk retention vehicles while also driving the formation of new organisations grapple with emerging and intangible risks, such captive solutions. This hard market is likely to be no different. as cyber, reputation, supply chain and non-damage business The challenge for insurance buyers and captive owners is how interruption, the need for new and innovative risk transfer to best manage increased deductibles/greater risk retentions, solutions has grown. Within AIG, we are seeing an increase in while also softening the blow of increased re/insurance interest in alternative risk solutions as commercial insurance premiums. has become more expensive and capacity harder to find. A perfect storm Less capacity for cross-class placements There is presently much talk of a ‘perfect storm’ in the There is no one-fits-all solution. Different clients will have commercial insurance market. After a prolonged soft market, different needs and the onus is on all parties, including captive prices have been rising over the past two years. This is a managers, fronting insurers, brokers and risk and insurance result of increased losses, reduction in capacity (particularly managers to sit down and talk through the available solutions. in distressed classes), market performance reviews, adverse This can include a number of creative and innovative options, loss reserve development and lastly, uncertainty surrounding such as alternative risk solutions and joint, scalable captive the global pandemic and its impact on claims. solutions, such as a multi-captive ‘mutual’ approach. According to Marsh , global commercial insurance premiums Single captive stop loss covers are becoming more increased by 19% in the second quarter of 2020, with challenging to place as there is a limited market for multiline significant price hikes in US public D&O (up 59% on average), products. While they are beneficial programme placements UK D&O (up 100%) driving rates up by 37% globally across from a captive perspective, it is not always possible to enter financial and professional lines. Geographically, composite into long-term agreements on cross-class aggregates when pricing increased in all geographic regions for the seventh the market is hardening. Hence a more traditional approach consecutive quarter, led by the UK (30.5%) and the Pacific may be required, with separate towers for different classes of (31%). business. Meanwhile, the long-lasting low interest rate environment The value to clients of a traditional approach to self insurance has meant that insurance companies have, for a long time, is that they can widen their universe of potential re/insurance been unable to prop up a disappointing underwriting result carriers, without necessarily paying a great deal more in with investment returns. This is exerting yet more pressure on premium. There is also the option to invite more reinsurers to the underwriters to charge more and increase deductibles - the table if each line of business has its own stop loss policy. This point at which insurance attaches - a situation which is unlikely way the whole market can be involved and insurance buyers to change as we enter another global economic downturn. can be sure they are getting a more competitive placement. In addition to pricing, insurance companies are incorporating Insurers can also benefit from clearer insight into their maximum tighter terms and conditions. The upshot is that conditions losses when taking a line by line approach to insurance. For l continued overleaf “There is no one-fits-all solution. Different clients will have different needs and the onus is on all parties, including captive managers, fronting insurers, brokers and risk and insurance managers to sit down and talk through the available solutions.” February 2021 | 31 We want to continue “Previous hard markets have seen existing captive owners make more use of their A great choice to make your job in risk retention vehicles while also driving the formation of new captive solutions. This hard market is likely to be no different. The challenge for insurance buyers recommending protection and captive owners is how to best manage increased deductibles/greater risk for you and products even easier. retentions, while also softening the blow of increased re/insurance premiums.” So, we’ve extended our James Bohan, Head of Multinational and Global Fronting, AIG Ireland your clients Broker Supportive Offer clients concerned about the impact of higher deductibles placements and what is clear from the many discussions and how this may cause greater volatility on their balance around this topic today is that the solutions implemented today to 31 March 2021! sheets, brokers, insurers and captive managers are working will continue to play a large part in our clients’ long-term risk together to offer innovative solutions. Loss portfolio transfer, for management strategy. instance, can spread the cost of severe claims year over, say, For insurers and service providers, this hard market provides Term Assurance three to five years, offering capital relief and smoothing out the an opportunity to differentiate and engage meaningfully • Six months cashback for your impact of a loss. with our clients towards managing global risks. It is about clients with extra commission In this challenging environment there has never been a greater ensuring there is an alignment of interests and that we are need for collaboration to develop solutions for insurance ultimately arriving at the best solution for all parties. All for you, or buyers and captive owners. The hardening trends are parties collaborating towards the same goal builds trust, understanding and inevitably value. unlikely to reverse anytime soon. Even when capacity returns • Price discount of 12.5% off and premium rates decrease, alternative risk solutions can For more information, please feel free to contact me the price-match premium, or continue to offer value and complement traditional insurance directly @ [email protected] or 01 208 4958. • A mix of discount & commission.
Interactive Brokers Group establishes entity in Ireland Mortgage Protection • Extra commission, or • Price discount of 15% off the price-match premium, or • A mixture of both.
Plus One Month’s Free Cover - even on rated cases! Full terms and conditions apply. For more information contact your Broker Consultant or visit royallondon.ie/brokers
nteractive Brokers Group, a leading global brokerage firm, The IDA Ireland, a government agency that promotes Ireland The Term Assurance options, has announced the authorisation by the Central Bank of for the opportunities it presents to international companies, except for the cashback offer, IIreland for Interactive Brokers Ireland Limited. has provided invaluable assistance to Interactive Brokers in are also available on Pension establishing its Irish office. The company expects to expand its staffing substantially over Term Assurance. the next year to accommodate the ongoing strong growth of Founded over 43 years ago, the company has grown to Interactive Brokers’ European business. become one of the preeminent securities firms in the world with over $8.9 billion in equity capital, $25 billion market “We are expanding to Ireland partly due to Brexit and partly capital, and $284 billion in client equity. due to our plan of establishing subsidiaries around the world to support our rapid global growth,” said Interactive Brokers Interactive Brokers differentiates itself from more traditional chairman Thomas Peterffy. “Client accounts have grown by brokerage strategies by pursuing an uncompromising more than 52% in a year.” focus on technology as a way to bring professional quality investment tools to both demanding professional traders and Earlier this year, Interactive Brokers opened an office in the average retail investor. Clients residing anywhere in the Singapore, and just recently in Hungary. The firm now has world can invest in multiple assets classes (in stocks, options, 11 entities around the globe in the US, Ireland, Australia, futures, currencies, bonds, and funds) on 135 markets in 33 Canada, Hong Kong, Hungary, India, Japan, Luxembourg, countries from a single Integrated Investment Account. The Royal London Insurance DAC is regulated by the Central Singapore, and the UK. With a staff of 2,000 worldwide, company is also well-known for its advanced technology, Bank of Ireland. Royal London Insurance DAC is registered Interactive Brokers serves over one million client accounts in in Ireland, number 630146, at 47-49 St Stephen’s Green, superior pricing, industry-low margin rates, and tight forex Dublin 2. Royal London Insurance DAC is a wholly owned more than 220 countries and territories. conversion pricing. subsidiary of The Royal London Mutual Insurance Society Limited which is registered in England, number 99064, at 32 | February 2021 55 Gracechurch Street, London, EC3V 0RL.
01/2021 1897.1
M13269__RL__IBM-Magazine__Jan-2021__ Broker-Advert__AW.indd 1 22/01/2021 12:50 We want to continue A great choice to make your job in recommending protection for you and products even easier. So, we’ve extended our your clients Broker Supportive Offer to 31 March 2021!
Term Assurance • Six months cashback for your clients with extra commission for you, or • Price discount of 12.5% off the price-match premium, or • A mix of discount & commission.
Mortgage Protection • Extra commission, or • Price discount of 15% off the price-match premium, or • A mixture of both.
Plus One Month’s Free Cover - even on rated cases! Full terms and conditions apply. For more information contact your Broker Consultant or visit royallondon.ie/brokers The Term Assurance options, except for the cashback offer, are also available on Pension Term Assurance.
Royal London Insurance DAC is regulated by the Central Bank of Ireland. Royal London Insurance DAC is registered in Ireland, number 630146, at 47-49 St Stephen’s Green, Dublin 2. Royal London Insurance DAC is a wholly owned subsidiary of The Royal London Mutual Insurance Society Limited which is registered in England, number 99064, at 55 Gracechurch Street, London, EC3V 0RL.
01/2021 1897.1
M13269__RL__IBM-Magazine__Jan-2021__ Broker-Advert__AW.indd 1 22/01/2021 12:50 CCPC Public Liability Market Study
The December 2020 Report clearly shows the value and essential services provided by Insurance Brokers in the public liability market. In this article, Cathie Shannon, Director, General Insurance at Brokers Ireland, considers the CCPC’s Report from the point of view of Insurance Brokers, with the market research carried out being of particular interest to intermediaries.
nsurance Brokers will recall that in August 2019, it was intermediaries in this market being very clear. Moreover, the announced that Minister Heather Humphreys had asked the three recommendations made by the CCPC do not suggest ICCPC to look into the public liability market, due to concerns that the public liability market is being rendered dysfunctional about rising costs and denial or lack of coverage for Irish due to the actions of market participants including Insurance businesses. On 23 December 2020, the CCPC published its Brokers, although it is negatively impacted by factors including Public Liability Market Study. This Report had been keenly lack of data and the personal injuries claims environment, both awaited by Brokers Ireland, as the public liability market is key of which may make the Irish market less attractive to capacity for our members, with the activities of intermediaries being providers. essential to the smooth functioning of the whole commercial While price is prioritised over other considerations in respect insurances market. For this reason, Brokers Ireland had of their public liability policy, 66% of organisations have not engaged constructively with the CCPC and when a public switched Insurance Broker to obtain a better priced plan in consultation was opened in summer 2020, we made a the past ten years. The level of engagement by buyers in the Submission using the input of groups of members. The Report market is relatively low. 25% of respondents did not know what is certainly worth reading in its entirety, for its overview of the their organisation paid in an annual public liability premium. Irish market. The research carried out by the CCPC may be While 82% of respondents felt they understood their insurance of particular interest to Insurance Brokers when considering either very well or fairly well, they did not always comprehend business strategy, what sectors to consider targeting and key distinctions in relation to insurers and Insurance Brokers or where value may be added for existing clients. Brokers Ireland how their Broker is paid or who their insurer was. has identified a number of potential lobbying points to take forward. The importance of Insurance Brokers in the market is highlighted in the market research, with 72% of surveyed organisations The recommendations made by the CCPC are in three areas: acquiring public liability insurance through an Insurance data availability, supports for buyers and PIAB. Of these, the Broker, compared to just 24% who went directly to their second recommendation is of interest for Insurance Brokers insurer. Organisations in retail were most likely to go through in that it is recommended amongst other things that the State an Insurance Broker (76%) and those in manufacturing had should assist public liability buyers to become more engaged the highest proportion insuring directly (35%). The high degree in the market, providing information to organisations on active of Insurance Broker usage by buyers should, in principle, public liability insurance providers and assisting organisations support market entry (by capacity providers) as entrants do in profiling their risk and identifying options to reduce it, not have to build their own distribution channels and can avail including the full suite of potential supply options in the market. of an Insurance Broker to distribute their products. It should be The CCPC has noted that the exact nature of the support here noted that the percentage of organisations using the services would need to be carefully considered so as not to encroach of intermediaries such as Insurance Brokers is likely to be on the commercial activities of Insurance Brokers. higher than 72%. A small percentage of respondents in the The substance of this Market Study is very positive from the CCPC market research appear not to have fully understood the point of view of Insurance Brokers, with the importance of distinction between Insurance Broker and insurer and when 34 | February 2021 “Insurance Brokers are a key intermediary in the public liability insurance market where they assist the majority of buyers in sourcing insurance. In principle, their activities in obtaining the best value for their customers should result in price competition”
Cathie Shannon, Director, General Insurance at Brokers Ireland asked for the identity of their insurer provided that of their liability insurance market, which is a concern, as engaged Insurance Broker instead. buyers underpin switching behaviour, which is a key driver of competition. Insurance Brokers are either paid flat fees for their services or through commission, as a percentage of the premium While switching is a feature of the market, where a quarter of secured. For surveyed organisations that used an Insurance respondents switched in the last five years, the levels seem to Broker, 36% paid a flat fee; 28% paid a percentage of premium be relatively low given the premium increases in the market. based commission; and 33% did not know the structure of their Despite the issues being experienced by organisations, they payments. are not always fully engaged in this market, and are often very reliant on a single Insurance Broker. While 82% of respondents Insurance Brokers are a key intermediary in the public liability felt they understood their insurance either very well or fairly insurance market where they assist the majority of buyers in well, they did not always comprehend some key distinctions sourcing insurance. In principle, their activities in obtaining in relation to insurers and Insurance Brokers, who their insurer the best value for their customers should result in price was, or how their broker is paid. While price is prioritised over competition, which can also have the effect of exacerbating a other considerations for their public liability policy, 66% of soft market. Conversely, Insurance Brokers can also dampen organisations have not switched Insurance Broker to obtain a hard markets by facilitating the entry of transient capacity and better priced plan in the past ten years. a return to price competition. The market research suggests that organisations would The market research found that 30% of the organisations that benefit from being more informed about issues relevant to use an Insurance Broker have switched Insurance Broker in liability insurance so that they are better equipped to engage the last ten years, 12% in the last three years, and a further more effectively with an Insurance Broker or insurer. This 18% more than three years and less than ten years ago. The could include having a general understanding how the public most commonly cited reason for switching Insurance Broker liability market works in relation to costs, risk and claims, was that another Insurance Broker found a better priced which organisations operate in it, how they can accurately insurance policy for the buyer. The market research suggests profile their risk and what type of cover is the best fit for their that the average premium increase for organisations that circumstances. This knowledge is particularly important for switched Insurance Broker were slightly lower than those that MSMEs (Micro and SME) as sourcing public liability insurance didn’t switch. for an organisation can often become the responsibility of the owner, general manager or accountant by default. The Organisations that use an Insurance Broker have higher CCPC welcomes that buyer engagement will be considered switching rates than the organisations that insure directly. This by the recently established SME Growth Taskforce, where shows that Insurance Brokers provide value to customers by a number of actions to assist businesses that need public reducing search and switching costs due to their knowledge liability insurance could be considered. The exact nature of the of the market. The market research findings suggest that support for business must be carefully considered so as not to Insurance Brokers, in their capacity as a key intermediary in encroach on the commercial activities of Insurance Brokers. the market, seem to support the process of switching insurers Indeed, it seems to Brokers Ireland that by educating whilst for buyers, which can mitigate the price increases. There advising Insurance Brokers can clearly add value for new and seems to be a lack of engagement by buyers in the public existing clients.
February 2021 | 35 Generation Rent: protection opportunity
ccording to the last Census in 2016*, the number of may need to alter their homes for greater accessibility. households in Ireland which were rented privately was Barry commented, “Specified Serious Illness cover helps A326,493. This accounted for almost 30% of all of occupied protect people financially when they suffer a serious illness. Market leading dwellings. Mortgage holders and renters alike can benefit from this cover. The Protection Opportunity Royal London’s unique Multi-Claim Protection Cover is another potential solution, that is more affordable than Specified Serious title insurance Barry McCutcheon, Protection Proposition Illness cover, and impact based. “For Lead at Royal London commented, “We consistently encourage people to get advice for their many, renting is no longer viewed as a solutions to individual circumstances from a Financial Broker, to make sure steppingstone to purchasing a property they get the right policy to suit their needs. One of our most and instead as a permanent living situation. recent press releases has been on this topic, calling attention facilitate your Renters are not just young homeowners in to the fact that long-term renters are financially exposed without waiting. protection.” “Given that home ownership is harder than transactions ever**, and renting is becoming the new Affordability norm for large sections of society, including Barry concluded, “Often, people are deterred from considering families, there is a significant opportunity for Financial Brokers to taking out protection policies when it’s not compulsory due to meet the needs of this growing section of society. perceived cost and affordability concerns. They may think ‘how “The need for protection is a conversation most customers will can I afford to pay for another expense on top of my current first have when they purchase a home, recognising a significant outgoings?’ but we think they might be surprised to learn how change in their financial commitments and complying with little it can cost per month to have protection in place, and the mortgage lender requirements. However, the protection needs peace of mind it can bring. That’s obviously where the role of a of renters are often not as well served as those of home buyers.” Financial Broker can provide such important value. “The cost of Income Protection, as you know, varies depending Income Protection Solution on the amount of cover needed, the chosen deferred period and The average monthly rent in Ireland at the end of July last year policy, plus their occupation, age, health and lifestyle factors. was €1,412 and in Dublin it was €2,030. The year on year change However, taking an example of someone who is 34 next birthday, Why DUAL Asset? What we cover + was +1.2% nationally and +0.2% in Dublin . €32.25 a month could provide an annual benefit of €15,642 (a Barry continued, “Where homeowners see the need for weekly benefit of €300)^.” We provide a range of cover against legal protection to cover their mortgage in the event of death or ill Our experienced team brings a wealth of industry, To illustrate the affordability of Life Cover, Royal London health, renters may not have considered protection to cover their legal and local knowledge. Here are just three title or ownership challenges, including, but outlined a variety of scenarios in the following table: rent. As a result, they may be leaving themselves vulnerable if reasons why our clients value our services: not limited to; they became ill or injured and were unable to work. The impact can be significant for anyone, in either situation. But, those with landlords may not have the same options available as mortgage The security of knowing that we have one Commercial and Title to shares holders to reduce monthly payments for a temporary period. of the largest capacities in the asset residential specific “They may need to move to more affordable accommodation, underwriting market with ‘A’ rated insurers title risks Right to light which may be especially difficult for a family due to the need e.g. Missing deeds, to change childcare, schools and potentially move further away adverse possession, from family support networks. Coupled with this is the limited We are part of the DUAL Group, the world’s third party challenges Renewable projects availability of suitable accommodation for families compared to largest international underwriting agency individuals or couples. “Income Protection could help in this situation. It is designed to All risks/title wrapper Probate pay out a monthly benefit if your client is unable to work due Our underwriting flexibility and bespoke to incapacity caused by illness or injury, resulting in a loss of policy wordings to suit client needs earnings, while covered by the policy. This monthly benefit Loan portfolios Aviation could be used to help towards covering living expenses such as rent, utilities, medical bills, childcare, and any other monthly outgoings.” Unique to Royal London’s Income Protection policies, for additional flexibility, your clients can choose two Deferred Contact our specialist underwriters today to find out how DUAL Asset can assist in your deals. Periods within one policy. So, for example, you could choose For more details, contact your Royal London Broker to provide a certain amount of Income Protection benefit after Consultant or visit royallondon.ie/brokers. a four-week Deferred Period to cover your clients rent and an *CSO Census of Population 2016 - Profile 1 Housing in Ireland – Tenure & Rent additional benefit amount after a longer Deferred Period to cover https://www.cso.ie/en/releasesandpublications/ep/p-cp1hii/cp1hii/tr/ the other ongoing household expenses. This may be useful ** 65% believe it is “harder than ever” to secure your first home: Paul McGennis Sarah Gateaud-Manase in order to best match employer sick pay schemes or to help https://www.royallondon.ie/press-releases/2019-press-releases/ April2019/65pecentBelieveHarderThanEverToSecureYourFirstHome/ reduce the overall cost of cover. Title and Legal Indemnity Underwriter EU + https://www.thejournal.ie/daft-rental-house-price-report-july-2020-5181194- Life Cover Solution Aug2020/ Manager Ireland Barry commented, “Whereas Mortgage Protection is generally ^ Based on an Occupational Class 1, a deferred period of 13 weeks and a compulsory when buying a home, there is no comparison for retirement age of 60. [email protected] [email protected] people renting. This could leave families renting their homes Table notes: Level Life Cover only. 1% levy included in premiums shown. Source: 086 243 8279 086 821 0404 facing a greater risk of vulnerability should the worst happen.” BestAdvice.ie as at 02/12/2020. Sum Assured is 12 months x 10 years x Average Rent. Age refers to age next birthday. For illustration purposes the sum assured Serious Illness cover calculation does not include indexation and assumes that rents remain static for 10 years. Royal London’s minimum premium is €15.15 a month. In some of the A serious illness can affect people in different ways, with varying above instances, a higher sum assured may be possible for the €15.15 monthly degrees of severity. For instance, after an illness some people premium shown. www.dualasset.com 36 | February 2021 Helping you do more
DUAL Underwriting Ireland DAC trading as DUAL Asset is regulated by the Central Bank of Ireland. Registered in Ireland No.633531. Registered office: 11, Fitzwilliam St. Upper, Dublin 2 D02 YV66. Market leading title insurance solutions to facilitate your transactions
Why DUAL Asset? What we cover
Our experienced team brings a wealth of industry, We provide a range of cover against legal legal and local knowledge. Here are just three title or ownership challenges, including, but reasons why our clients value our services: not limited to;
The security of knowing that we have one Commercial and Title to shares of the largest capacities in the asset residential specific underwriting market with ‘A’ rated insurers title risks Right to light e.g. Missing deeds, adverse possession, We are part of the DUAL Group, the world’s third party challenges Renewable projects largest international underwriting agency All risks/title wrapper Probate Our underwriting flexibility and bespoke policy wordings to suit client needs Loan portfolios Aviation
Contact our specialist underwriters today to find out how DUAL Asset can assist in your deals.
Paul McGennis Sarah Gateaud-Manase Title and Legal Indemnity Underwriter EU Manager Ireland [email protected] [email protected] 086 243 8279 086 821 0404
Helping you do more www.dualasset.com
DUAL Underwriting Ireland DAC trading as DUAL Asset is regulated by the Central Bank of Ireland. Registered in Ireland No.633531. Registered office: 11, Fitzwilliam St. Upper, Dublin 2 D02 YV66. Our Star Performers 20201 22.3% Merrion 16.8% Multi-Asset 70 Merrion Multi-Asset 50 14.7% Stewardship 4.2% MAF Cautious 2.8% High Yield
1.Source: Longboat Analytics. All performance quoted as at 01 January 2021. The returns quoted include the reinvestment of net income and are net of trading costs, but before deduction of annual management charges. Returns quoted do not include other insurance contract charges and as such do not represent the returns on insurance contracts linked to these funds. Details of all charges for a particular product are available on request. The information in this document does not constitute investment advice. It does not take into account the investment objectives, financial position or needs of any particular investor.
Warning: If you invest in this product you may lose some or all of the money you invest. Warning: Past performance is not a reliable guide to future performance. Warning: The value of your investment may go down as well as up. Warning: These funds may be affected by changes in currency exchange rates.
Aviva Life & Pensions Ireland Designated Activity Company, a private company limited by shares. Registered in Ireland No. 165970. Registered office at One Park Place, Hatch Street, Dublin 2, D02 E651. Aviva Life & Pensions Ireland Designated Activity Company, trading as Aviva Life & Pensions Ireland and Friends First, is regulated by the Central Bank of Ireland. Tel (01) 898 7950 www.aviva.ie
Star Performers Feb 2021 A4 IBA ad[2].indd 1 26/01/2021 10:04 “The benefits of active management were clear in 2020. Across the spectrum of asset classes our Managed for You, Managed with You and Managed by You investment ranges, Aviva funds performed strongly. I asked the managers of some of the funds who were in the top quartile of their peer group what drove this strong performance over the past year.” By John Deehan, Investment Sales Manager at Aviva Life & Pensions
Aviva funds deliver strong fund performance in 2020
Our Managed for You Funds
MAFs Cautious – 2020 gross performance 4.2% What worked very well for the Fund this year was the active No. 1 Fund in Multi-Asset Funds targeting the ESMA 3 management of the fixed income investments, the Fund risk range benefitted from its active position in US Treasuries in the first Given the challenges that were faced in 2020 MAF Cautious half as yields continued to tighten as a result of the onset of the performed very well relative to its peers and provided a pandemic. Another positive contributor to performance during resilient return to investors despite the volatility caused by the year was a tactical allocation to Italian bonds which was the Covid pandemic and the resulting economic impact. built up during the summer months, this trade was based on Looking back at the drivers of return in 2020, it’s clearly been continued positive sentiment around a possible EU stimulus a year of two halves – the first half of the year where the package and further political stability within Italy. Fund acted to protect policyholders by reducing the equity The Funds allocation to uncorrelated assets which importantly content of the fund due to the unprecedented uncertainty of provide a low correlation to traditional asset classes also the pandemic and then in the second half of the year where proved to be a positive driver of returns in 2020 as allocations the Fund captured much of the upside of rising equity markets to the Aviva AIMS strategies, convertible bonds, gold and by increasing its weight to global equities. REITS all added to performance during the year.
Our Managed with You Funds
Merrion Multi-Asset 50 Fund – 2020 gross performance market crash - investing in equities (moving from underweight 16.8%. No. 1 Fund in Multi-Asset Funds in the ESMA 4 risk to overweight), changing the equity mix in the portfolios range (from defensive to cyclical whilst also adding further to high Merrion Multi-Asset 70 Fund – 2020 gross performance quality equities and structural growth stories) and investing 22.3%. No. 1 Fund in Multi-Asset Funds in the ESMA 5 risk in corporate credit and periphery bonds. Technology and range e-commerce names have been the main beneficiary of the COVID-19 crises. With large parts of the world in lockdown, The Funds strongly outperformed in 2020 with the Merrion Multi-Asset 50 Fund returning 16.8% (gross) and the Merrion companies with remote work solutions and digital payment Multi-Asset 70 Fund delivering 22.2% (gross). The Merrion offerings such as Microsoft, PayPal, Visa, Mastercard and Multi-Asset 30 Fund, the lowest risk fund in the range, also Amazon have performed very strongly and exposure to delivered a gross return of 12.8% in 2020. these themes have contributed significantly to the fund’s 2020 was a unique year, we effectively went through an outperformance. entire cycle (market if not economic) in the space of 6-8 Within defensive assets, the fund held overweight positions weeks – a process that ordinarily would take many months. in US Treasuries, German Bonds and Gold, with little or no The application of and the output from our active investment exposure to corporate bonds going into the downturn in Q1. process navigated us very successfully through this turbulent Following the market collapse, which pushed yields on safe period and delivered for investors. We entered the crisis at assets lower and saw credit and periphery bond spreads the lower end of the range in growth assets which meant widening, the fund reduced exposure to these safer assets we were able to exploit the opportunities presented by the in favour of periphery debt and a basket of corporate bonds. l continued overleaf February 2021 | 39 Given that the midpoint for defensive assets in this fund the to reducing the absolute level of plastics used across their fact that these assets outperformed was vital to the funds product portfolio (the first major global consumer goods overall return in 2020 company to do so) and our engagement with Microsoft on Within alternatives, we entered the downturn with a lot of gender pay gap reporting reflect this. equity market protection, which enabled us to exploit the In the final quarter of 2020, the Fund rotated towards companies opportunities presented by the market collapse. that should benefit from a resumption in economic activity, increasing its exposure to financials such as Axa (one of the High Yield Equity Fund – 2020 gross performance 2.8%. leading global insurers) as well as focusing on companies with No. 3 Fund in Global Equity Income Sector strong structural growth drivers such as Schneider Electric (a The High Yield Equity Fund provided resilient performance beneficiary from the need for further investments in energy to investors despite the market volatility experienced in 2020 efficiency) with attractive dividend prospects. and continues to outperform its peers over most time periods. Stewardship Fund – 2020 gross performance 14.7% The Fund’s focus on cash generative businesses with strong No.2 Fund in Global Ethical Equity Sector, the benchmark balance sheets helped weather what proved to be a tricky (MSCI World) index returned 6.3% year for income investors, whilst at the same time ensuring it was still able to deliver a strong income for investors despite The fund outperformed it benchmark in 2020. Sector allocation the challenges faced in the market. was a big positive – in particular, an overweight to Information Technology and zero exposure to Energy. This was partly By sourcing income across a broad range of sectors the Fund offset by a zero weight in Communication Services. Stock has built a portfolio that has not only delivered strong income selection drove the bulk of the fund’s outperformance in 2020. growth historically but also proved very resilient in 2020. The US online payments company, PayPal Holdings, benefited Fund avoided companies in sectors which were impacted by from an acceleration in the shift to online and digital payments dividend cuts in 2020, such as energy and banks and has been in response to the lockdowns. Taiwan Semiconductor more focused on sectors where we see compelling structural Manufacturing Co continued to see market share gains as growth such as technology and industrials- companies it benefits from some challenges Intel Corp, is facing. US such as Taiwan Semiconductor (which manufactures high medical products company, Thermo Fisher, was another performance chips that are used in smartphones as well as positive contributor on the back of strong results and benefits data centres) and Nextera Energy (the largest renewables from providing COVID-19 testing equipment. Detracting was developer in the US). Over 95% of the companies held within a US LED lighting manufacturer, Acuity Brands, where profits the Fund either increased or maintained their dividend in have been adversely impacted by US construction spending 2020 compared to 2019, highlighting the focus on dividend slowing down. An unexpected profit miss coupled with sustainability. an equity raise to fund future acquisitions saw US medical The fund also embeds ESG considerations across its technology business, Becton Dickinson, underperform. In investment decision making, actively engaging with terms of geographic allocation, being underweight North companies that are owned in the portfolio to drive meaningful America detracted but this was partially offset by a relative positive change. Examples such as Unilever committing avoidance of Asia Pacific.
Our Managed by You Funds
Greenman Open (“GMO”) Fund 2. Stable asset valuations - COVID-19 has hastened the l 4.75% of NAV Distributed in 2020*, average increase in emergence of food retail as a distinct and coveted asset NAV 0.65%** class. 2020 saw increased demand for food retail assets l MSCI Europe Real Estate Index (USD) returned -6.81% particularly in safe haven locations like Germany. This GMO’s strategy is to generate long-term consistent investor investor appetite helped ensure that asset valuations have income from properties let to Germany’s leading retailers of remained stable which in turn contributed to the stability of food and other essential items. During a challenging year for GMO’s NAV. commercial real estate and REITs, this focus helped ensure With those two fundamentals in a healthy position, 2020 saw GMO’s consistency in 2020, the primary drivers of which were: strong investor demand with new subscriptions in the GMO 1. Consistently high rent collection – Despite disruption to Fund averaging €2.4m per week. many categories of retail in 2020, GMO collected 96% of Redemption requests for the year averaged only 0.55% of rent due for the full year. In April, when all non-essential NAV which means that the Greenman Open Fund maintained retail was closed for the full month, 86% of rents were still its growth trajectory in 2020 and is well positioned to take collected. advantage of a strong acquisition pipeline in 2021. This relatively high rate of rental collection ensured that *Q1 – Q4 2020 1% of NAV + 2019 Final Distribution of 0.75% of NAV. GMO was able to meet its target quarterly distributions of **Latest available NAV is Q3 2020. The Q4 2020 NAV will be confirmed in Q2 1% for the full year. 2021.
Learn more To learn more about our funds proposition visit www.avivabroker.ie/funds or www.avivabroker.ie\starperformers 1.Source: Longboat Analytics 18 January 2021. All performance quoted as at 31 Dec 2019. The returns quoted include the reinvestment of net income and are net of trading costs, but before deduction of annual management charges and other insurance contract charges and as such do not represent the returns on insurance contracts linked to these funds. Details of all charges for a particular product are available on request. The information in this document does not constitute investment advice. It does not take into account the investment objectives, financial position or needs of any particular investor.
Warning: If you invest in this product you may lose some or all of the money you invest. Warning: Past performance is not a reliable guide to future performance. Warning: The value of your investment may go down as well as up. Warning: These funds may be affected by changes in currency exchange rates. Aviva Life & Pensions Ireland Designated Activity Company, a private company limited by shares. Registered in Ireland No. 165970. Registered office at One Park Place, Hatch Street, Dublin 2, D02 E651. Aviva Life & Pensions Ireland Designated Activity Company, trading as Aviva Life & Pensions Ireland and Friends First, is regulated by the Central Bank of Ireland. Tel (01) 898 7950.
40 | February 2021 Continuing measures to help Allianz customers during COVID-19 restrictions
s we started 2021, the news of another level 5 lockdown essential workers breakdown assistance will automatically be and the very high numbers of COVID-19 cases were not included if they need it until 19 March 2021 even if they don’t Asomething that anyone had hoped for. But it is a more already have this benefit included on their policy. hopeful time with the end of the pandemic in sight as the early 3. Free courtesy car: We will provide a courtesy car for stages of vaccination start to rollout. Soon, we can look forward healthcare workers for as long as it takes to repair their car, if to a return to some normality. they’re involved in an accident up until 19 March 2021. While it is hard to predict the coming year, Allianz continues to put some measures in place to help our customers as much as Measures to help our business customers possible during these uncertain and challenging times. 1. Alternative use cover: We continue to support the These measures are designed to help our personal and business repurposing of facilities, to enable their use for testing and customers, as well as essential workers & volunteers who are caring for those in need of medical attention. society’s heroes during this pandemic 2. Business property cover – closures: We will maintain existing cover on business premises throughout this enforced Measures to help our personal customers Level 5 closure period. Appropriate supervision and security 1. Supporting financially stressed customers: For our of the property is required throughout. customers who are vulnerable, or in financial distress as a 3. Cafés, restaurants and pubs: In response to the consequence of COVID-19, we will continue to do our best to Government’s Level 5 announcement that all restaurants and support them fairly and flexibly. cafes must close unless they can offer a takeaway option, 2. Temporary additional drivers at no extra charge: Allianz we are extending our cover to allow this. For the duration customers can add temporary additional drivers for up to of the Level 5 COVID-19 closure period all restaurant and 60 days (previously 30) at no additional charge once we are café policies will now include cover for takeaway services notified before 19 March 2021. at no additional cost. This cover is provided on the basis 3. Temporary vehicle cover extended: Allianz customers can that all reasonable precautions are taken and that the HSE avail of a temporary vehicle substitution past the 30-day limit guidelines regarding COVID-19 are adhered to. previously imposed, once we are notified before 19 March 4. Retail (essential and non-essential): We are extending 2021. cover to include delivery for the duration of the Level 5 4. Continued cover while waiting for NCT appointments: COVID-19 closure period. This extended cover is provided The NCT and CVRT centres along with the National Driver on the basis that all reasonable precautions are taken, the Licence Services are experiencing large delays. We HSE guidelines regarding COVID-19 are adhered to and the understand customers may have to wait longer than usual for appropriate motor insurance cover is in place. appointments. We would like to reassure our customers that 5. CVRT: We understand customers may have to wait longer cover will continue to be provided in the event they are not than usual for appointments. We would like to reassure our able to attain their licence or NCT during this time. customers that cover will continue to be provided in the event 5. Remote workers support: For our customers who have you are not able to attain your CVRT during this time. commenced working from home or remotely, enhanced and During 2020, we put in a set of similar measures to help our increased home office equipment cover is provided under all customers, be they in business or have their car or home insured of our household policies. with us. Allianz in Ireland has been here for over 100 years, and we have seen Ireland weather major economic and societal Measures to help volunteers and essential changes before. We have also seen Ireland not only manage, workers including teachers and childcare but thrive in challenging times. It will take courage, but Allianz is professionals here to help when needed. 1. Cover extension for voluntary work: Car insurance use We hope these measures will help you and we would like to is extended beyond normal personal use for our customers reassure you that we are here to assist.We would encourage helping within their community for voluntary purposes; e.g. you to contact members of our underwriting, customer or claims to transport medicines or groceries to those in need, or to teams for any support you might need. take those that may be ill or vulnerable to hospital or testing Allianz p.l.c. is regulated by the Central Bank of Ireland. Registered in Ireland, No. 143108. Standard acceptance criteria, terms & conditions apply. Calls may be facilities until 19 March 2021. recorded or monitored for regulatory, training and quality purposes. Allianz Ireland, 2. Automatic breakdown cover for essential workers: For Allianz House, Elm Park, Merrion Road, Dublin 4, D04 Y6Y6. February 2021 | 41 Quality cover for luxury electric cars ‘Electric vehicle’ used to mean ‘milk float’. Today, the phrase is more likely to bring to mind luxury, innovation, and expense.
With even the most prestigious car manufacturers going green and the government offering incentives for purchasing an electric vehicle (EV), it’s likely your clients are seriously considering making the switch if they haven’t already. So how do you make sure their insurance is as high spec as their motor? Helen Furlong, Business Development Executive, DUAL
The Green revolution In this respect, EVs are no different from their fossil fuel In November, Bentley announced that all their vehicles will cousins: expensive cars tend to result in expensive claims, be fully electric by 2030. They are just the latest luxury motor and they need robust insurance to cover them. The smallest brand to ditch the combustion engine. Porsche, Jaguar, Audi, claims we have paid out for damaged EVs are in the hundreds and Mercedes Benz already have electric cars on the road, of euros, for chipped windows and cracked windscreens. But while Alfa Romeo, Jeep, and even Maserati are developing the numbers become significantly larger when accidents or their green vehicles as you read. collisions happen. For example, one of our brokers’ clients was hit from behind while stationary: their Tesla was shunted into These vehicles are environmentally-friendly, (mostly) beautiful, a wall, and the resulting damage cost over €25,000 to repair. and suitably luxurious. They also come with a luxury price tag. Nevertheless, registrations of EVs in Ireland have been leaping Cheap premium = cheap policy year-on-year since 2016, and we expect to see an influx of Naturally, clients will always want the best value insurance new EVs to be insured this year. This is thanks, in part, to the possible. This doesn’t mean that they should be happy with ever-increasing variety on the market. It is also thanks to the the cheapest – or that the cheapest is what you should offer government incentivising consumers to choose green. them. Cheap premiums might look good on paper, but when your client’s Tesla has been shunted into a wall, they may not Financial incentives cover the bill. The government has set a target of having close to 1,000,000 DUAL, on the other hand, offers comprehensive cover for electric vehicles on our roads by 2030. That’s equivalent to luxury electric vehicles. If your client has paid out tens of one-third of the cars currently registered in Ireland. In addition, thousands for a vehicle they love, they want to keep it in top they aim to end the sale of purely fossil fuel-powered cars by condition – and they want to know it is fully protected should an that same year. As a result, they need us to choose electric accident occur. DUAL can help. vehicles over petrol and diesel alternatives - and they are willing to pay us for it. We are specialist insurers with deep experience covering electric vehicles and luxury cars. Our cover includes Agreed Currently, they are offering grants of up to €5,000 towards Value reinstatement as standard for every vehicle we insure, the cost of an EV, and a further €600 to help pay the cost of and a like-for-like courtesy car should your client need it. Get installing a home charger system. They have also introduced in touch to find out more. tax breaks, with Benefits in Kind (BIK) exemptions available to people who drive a company EV for private use. Specifically, Helen Furlong is Business Development Executive at if the car costs up to €50,000, the employee incurs no BIK DUAL, the world’s largest international MGA. DUAL Private charge. Client specialises, amongst other areas, in High Net Worth Expensive car, expensive claims personal insurance in Ireland and are backed by AXA XL, a division of AXA, one of the world’s largest insurance As a result of these incentives, more and more of our brokers’ groups. t: 01 6640001 / e:[email protected] clients are buying electric vehicles. Many of these clients are businesses, HNW individuals, or business owners who have DUAL Underwriting Ireland DAC (trading as DUAL Private Client) is regulated by the Central Bank of Ireland. Registered No. 633531. Registered office: 11, purchased an EV for their company car. And as the number of Fitzwilliam St. Upr., Dublin 2 DO2 YV66. Directors: Barry O’Dwyer (Managing), vehicles goes up, so has the number of claims we’ve received. Ralph Snedden (British), Richard Clapham (British). 42 | February 2021 THE FINANCIAL EXPERTS
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C20.7847 Financial Broker Evolving the brand advert_v3.indd 1 24/09/2020 12:14 A take on Artificial Intelligence and the claims role
s Christmas 2020 recedes into a dim and somewhat purchase airline tickets with five or six clicks on our telephones. distant memory, some of you may still be looking at the There is no human contact in this process and, further still, it is Abox-fresh Amazon Echo or Google Home units that were now possible to ‘check in’ on-line before the flight and to walk given as gifts. There is a debate as to whether these devices through the automated passport/border control machines. In are a ‘spy’ in the home, gathering up information and data for fact, you may not need to interact with anyone at the airline or sale or exploitation by monolithic corporations. airport until you bounce up against the security checks…who will still make you feel like a terrorist for having a full bottle of In all honesty, I am not qualified to say, but the respective water in your carry-on luggage. ‘human’ personas for these units – Alexa and Siri – can be a reassuring presence and useful resource. They can even, at Consumers now expect to fulfil their every whim through times, be funny: try asking Alexa what she wants to be when accessing the connected supercomputer in their pocket. she grows up or a good one which gets straight to the point is There is evidence which suggests that they tend towards a always, “Alexa, are we in The Matrix?”. negative perception of a service when they are prevented from interacting with it seamlessly on-line – it is as if we are being Virtual assistant Artificial Intelligence (AI) technology is conditioned to never want to talk to someone face to face. developing at a tremendous pace. AI for Insurance is COVID19 restrictions have complicated this paradigm even something that each of us will need to come to terms with over further, pushing people away from one another and insisting the course of this decade. It will bring changes and innovation on faceless, impersonal service. to distribution, underwriting, fraud detection, and claims handling. For many of these functions, automation derived We are, of course, in the service business – and we should from AI-based cognitive models will be the ‘default setting’ be conscious of this trend towards lowering (or changing) with minimal manual inputs and, consequently, reduced consumers’ expectations as to what good service looks or administration costs. feels like. Before abandoning ‘manual inputs’, you might recall the What does the approaching AI horizon mean for Policyholder apocryphal story of the yuppie who, when parking his car in Representation/Loss Assessing and, more generally, claims Dublin, was asked by a vagabond whether he wanted him handling as a function – either at Broker Offices or Insurers? to mind his car for a quid. The driver pointed to a ferocious- If we agree that we should never run away from technology looking Rottweiler sitting on the back seat of his Porsche and or put our heads in the sand when the winds of change are said: “I don’t need anyone to mind my car, I’ve got him.” The blowing, then we should also agree that there will always be vagrant stared at the dog and nodded his head, chuckling, a need (and room) for the ‘personal touch’ in our processes. “That’s all well and good mister, but tell me, can your dog put Coming from a claims discipline, I am proud to say that the soft out a fire?” skills employed by Brokers, Assessors, Adjusters, and Claim Nevertheless, we should expect that Policyholders will Handlers cannot be taught. They are gleaned experientially, become less and less used to dealing with actual, real-life, or, for some, they might be instinctive behaviours. Empathy, genuine people. As their behaviours are modified, this will, in the ability to understand the feelings of another, is critical to time, result in a ‘new normal’ or ‘expected normal’. It is not those of us in a claims facing role. It helps us to give effect to unreasonable to contemplate a future where there are fewer the provisions set out in the Consumer Protection Code and customer-facing insurance roles and where those that remain ensures a meaningful connection between us and the stricken in transition to process facilitation and product education. policyholder. For those of you who are old enough, just think back to the For householders and businesses, an insurance claim time before the internet when we were compelled to buy airline might prove to be an event of enormous trauma and stress tickets from a travel agent. Within a relatively short period – and sometimes exaggeratingly so when compared with of time, we have been conditioned to expect to be able to the apparent subjective severity of the loss event. The 44 | February 2021 “The soft skills employed by Brokers, Assessors, Adjusters, and Claim Handlers cannot be taught. Empathy, the ability to understand the feelings of another, is critical to those of us in a claims facing role. It helps us to give effect to the provisions set out in the Consumer Protection Code and ensures a meaningful connection between us and the stricken policyholder.”
Mark Quinn, Senior Manager, Owens McCarthy
Policyholder’s expectation is that they will be indemnified and, Before the decade is out, we will all have come to terms with, or everything else being equal, returned to the position they were perhaps embrace, Artificial Intelligence (machines mimicking in before the loss. This might be true of the physical property; cognitive functions as displayed by humans), Machine however, we should never lose sight of the human element. Learning (learning-from and making data-driven predictions Policyholders often cannot forget the loss and their experience based on data and learned experiences) and Deep Learning of insurance will not simply be represented by the receipt of a (connection of artificial software-based calculators that cheque or EFT. approximate the function of brain neurons). We do not need to be afraid of these developments. However, we suggest that As Policyholder Advocates, we have worked through countless the Insurance Industry must never abandon or seek to replace examples, attending at the smouldering rubble of a home that those points in a process where nothing less than the human was once full of family life and happy memories. A mother, touch will suffice. a father, and their children will be in a state of shock. Their worldly possessions, from their cherished wedding album to Finally, and to illustrate this point, I can share a story recently the kids toys and schoolbooks, are lost. The family dog may told to me by a good friend, about Alexa and the way she have perished. They have no clothes apart from those that inserted herself in his home. When putting his eight-year-old are on their backs. They are homeless. Faced with such utter son to bed one evening, the child said: “Daddy, Alexa can destruction, it is practically impossible – as a policyholder – to read me a bed-time story – you don’t have to.” There, in one know where to begin. There is – and possibly never will be – an innocent sentence from a child, was a warning as to how AI process or intervention that can be successfully employed Artificial Intelligence is becoming normalised for everyone. He in these instances. Instead, the policyholders can be fortified was taken aback and stuttered to respond, “Well… yeah… but and supported by the right words and actions delivered at the she can’t give you a hug and a kiss, can she?” right time by the best people. Mark Quinn is a senior manager with Owens McCarthy Claims It is in times of upheaval, trauma and upset, that an empathetic, Specialists and runs their Mid- West Division, based in their Limerick skilled, and knowledgeable insurance professional can make Office. Mark specialises in Property losses, both commercial and a difference. This ‘difference’ will be felt by the consumer, domestic. He holds a Professional Diploma in Insurance (CIP) and it will colour their experience of the product, the Broker, and has over 25 years’ experience in the Property Industry, with and the Insurer alike. The opposite is also true of course. A a particular interest in Construction and Project Management and devastated policyholder who brushes up against an indifferent has successfully managed many of the major property losses in his Insurer when they have a claim, will never believe that their area over the last six years.Owens McCarthy were proud to support Mark as President of the Insurance Institute of Limerick in 2019/20. outcome was a favourable one – regardless of the size of the cheque. www.owensmccarthy.com
AIG Appointment AIG is delighted to announce that Daryl Bridgeman has been appointed Team Leader for Management Liability and Financial Institutions, Ireland. Daryl has over 12 years experience working in the insurance industry, particularly within Financial Lines. Prior to joining AIG, Daryl spent 9 years with Chubb where he held various positions within Financial Lines, most recently as Senior Underwriter, Cyber UK&I. Daryl’s core areas of expertise include Directors and Officers, Professional Indemnity and Crime across both Commercial and Financial Institutions. Daryl holds a Bachelor of Business Studies (BBS) Degree from University of Limerick and a Postgraduate Certificate in International Banking and Finance from Dublin Business School.
February 2021 | 45 PowerTalks 2021: A new dawn?
THE YEAR THAT WAS FOR THE GLOBAL ECONOMY Korea and Taiwan had more experience of dealing with such a 2020 will be remembered as a truly extraordinary year for the health crisis, and to date have coped better. global economy and society. At the beginning of the year, there THE PROSPECTS FOR 2021 was a widely-held sense of optimism that 2020 would be a better As we move into 2021, there are grounds for greater optimism, year, following a challenging 2019. This sense of optimism was once we get through what will be a difficult first quarter as serious based on a belief that a ‘hard Brexit’ would be avoided at the restrictions have been put in place to deal with the latest surge in end of January; and that ahead of the US presidential election in virus infection rates. November, President Trump would seek to soften his approach to Notwithstanding the basis for optimism, the level of uncertainty China, and lessen the possibility of a very damaging all-out trade about the future is still very high. There is no doubt that the war between the US and China. outlook for the global economy will be primarily dictated by the By the middle of February, both of those prognostications were path of the virus, and the likelihood of a successful global rollout looking valid. A ‘hard Brexit’ was avoided, as the UK left the EU on of safe and effective vaccines. The new strains of the virus that 31st January and then entered into an 11-month transition period. was highlighted in the days leading up to Christmas is obviously a Furthermore, the US and China adopted a more conciliatory source of concern. approach to each other and we witnessed some drawback from the trade dispute that had caused so much fear, uncertainty and The speed at which the various vaccines are being developed disruption in 2019. and approved is very impressive. The hope is that the new strain, or indeed any subsequent mutations, will be susceptible to the However, any positive impact from those developments was various vaccines that are being delivered. The early indications quickly swept away as the novel coronavirus, COVID-19, first took are positive in that regard. hold in China and then spread with rapid ferocity across the world. From the moment that COVID-19 was declared a global pandemic If the virus is gradually brought under control in the first half of in early March, most countries around the world were subjected 2021, the world economy is likely to experience a significant to varying levels of lockdown and restriction, and this arguably rebound in business investment, global trade, consumer spending, created the most severe economic and humanitarian crisis since and international travel. In other words, the economic activity that the second world war. Unfortunately, as we enter 2021, this crisis has been artificially put-on hold since the early part of 2020, could is ongoing. rebound very quickly. There is undoubtedly a high level of pent- The economic performance of different countries in 2020 was up or dormant demand in the global economy – it just needs an heavily driven by the path of the virus; the structure of the economy, excuse