Post magazine - 12 November 2015

This week Zurich's decision to implement a cost-cutting exercise, including slashing up to 440 jobs in its UK general insurance business, has been welcomed by brokers, who believe that removing a layer of management will produce tighter relationships with regional branches.

The Association of British Insurers and the British Insurance Brokers' Association have launched their joint code of conduct on how to deal with vulnerable customers when they renew their motor or household insurance. The voluntary code could reinforce consumer trust in the sector and the industry has broadly welcomed the initiative, although some are questioning its profitability.

Steve Treloar was confirmed this week as John O'Roarke's successor at LV. Subject to regulatory approval, the former Aviva personal lines managing director will take over as LV general insurance MD in the second quarter of 2016. Market commentators say his experience of both the direct and broker channels will help him fill O'Roarke's "big shoes".

Despite the crash of a Russian airliner in Egypt, insurance experts don't expect aviation to rise, as capacity remains abundant in that market. The impact on the travel insurance market would also appear to be minimal, with extension of coverage the most likely outcome.

Meanwhile, the Solvency II countdown is entering its final stages. On 1 January, a new Europe-wide regulatory regime officially kicks off, aiming to strengthen capital requirements for insurers. Industry observers are warning some insurers will struggle to be ready. A big hurdle for them will be to integrate long-term reporting needs into ‘business-as-usual' approaches.

In the C-suite, Rob Townend from Aviva calls on the government to crack down on marketing and claims management companies that steal accident data and acquire victims' details. He also calls for a consultation on how insurers compensate minor injuries, suggesting a change to rehabilitation instead of cash for whiplash claims. "The easy money that attracts organised gangs to stage and induce accidents would disappear, as would data theft, fraud, spurious claims and nuisance calls."

For the interview, Post met Duncan Rutter, the incoming president of the Forum of Insurance Lawyers. The DAC Beachcroft partner, who crossed the claimant-defendant divide early on in his legal career, says tackling fraud is one of his priorities. "One of the worrying aspects is that there has been a rise in liability claims" for trips and slips and noise-induced hearing loss.

The fourth instalment of our State of the Insurer Nation survey looks at the digitisation of the industry. CEOs from various insurance companies discuss the use of data in underwriting and the disruption new market entrants might cause. Cyber is on top of their list of emerging risks.

The second part of our In-Series focuses on how insurers underwrite windstorms. Two-thirds of them say they actually analyse that hazard at postcode level.

And our travel feature on winter sports details how insurers can make sure their clients understand what they are covered - or not covered - for before they hit the slopes. One-third of people believe - wrongly - that a standard travel policy includes winter sport activities.

In this issue, you will also find a listing of the top insurance companies in the Asia-Pacific region by gross written premium. To accompany it, Post held a roundtable on the state of the market in Hong Kong, in association with QBE. Broker participants said the economic slowdown in mainland China would not have a negative impact on the Special Administrative Region. They noted the Hong Kong market could improve its business offer, technology tools and recruitment strategy.

Finally, in this week's Legal Column, Alastair Gillepsie, partner at Hill Dickinson, observes that UK courts seem to have become reluctant to extend the doctrine of vicarious liability. That was illustrated by a recent High Court case, involving the Stoke City football club.

You may download Post's latest issue as a PDF. Enjoy the read!