Daily Willis Review | 24 May 2018

Daily Willis Review | 24 May 2018
  • Willis Towers Watson releases Q1 InsurTech briefing
  • U.S. commercial P&C to see modest underwriting profit: Fitch Ratings
  • Lloyd’s granted regulatory approval for Brussels subsidiary
  • Neon appoints new Group Underwriting Director
Willis Towers Watson releases Q1 InsurTech briefing
Willis Towers Watson has released its quarterly InsurTech Briefing, in collaboration with CB Insights, which found there were a total of 66 InsurTech investment deals in Q1 2018 marking a new high.

It found that as transaction sizes continued to increase and the line between InsurTech funding by incumbent insurers and reinsurers and traditional venture capital was blurred by newer ‘hybrid’ investment funds.

InsurTech investment volume of $724 million in Q1 was 16% greater than the $624 million recorded in Q4, 2017, and up 155% from Q1 2017.

The briefing found that insurance sector incumbents prefer minority investments in start-ups developing technology which will ease their own commercial pressure points, including distribution costs, claims handling, and underwriting excellence.

In contrast, traditional VC investors tend to focus on InsurTechs which address customer pressure points such as price, ease of access, and underserved markets through innovation.

Rafal Walkiewicz, Chief Executive Officer, Willis Towers Watson Securities, said: “For InsurTech start-ups, the funding scene is more complex, and finding the right investment partner has become more difficult.

“Hybrid models will continue to evolve, and maybe the ultimate answer for InsurTech entrepreneurs looking to balance industry expertise and the traditional VC value-creation mentality.”

Paddy Jago, Global Chairman of Willis Re, said: “The incumbent market has actually been relatively receptive to taking a serious look at the digital innovation that is going on around us, and those driving it.

“Most of us know that to remain relevant, we need to embrace change. I have always believed that we cannot view change and not change ourselves.”

U.S. commercial P&C to see modest underwriting profit: Fitch Ratings
According to a report by Fitch Ratings, U.S. commercial property and casualty (P&C) insurers should anticipate improved performance in 2018 following a turbulent 2017, Reinsurance News has reported.

In 2017, the U.S. P&C commercial lines experienced a weaker underwriting performance, reporting a combined ratio of 104% compared to 99% the year before.

The ratings agency anticipates these results will improve in 2018 after a return toward historical norms for catastrophe losses and pricing improvements.

Should these historical norms return, Fitch Ratings believes that underwriting results are likely to revert towards a modest profit in 2018.

James Auden, Managing Director, said: “Commercial auto insurance remains a chronic problem for underwriters despite numerous rounds of rate increases and underwriting actions.

“Loss severity trends, rising litigation costs, shortages of experienced drivers and continued reserve weakness may limit the potential for underwriting improvement in the near term.”

Lloyd’s granted regulatory approval for Brussels subsidiary
Lloyd’s of London has been granted regulatory approval from the National Bank of Belgium for Lloyd’s Insurance Company, which will be known as Lloyd’s Brussels.

The license provides Lloyd’s Brussels with the ability to write non-life risks from Europe, ensuring that Lloyd’s customers can continue to access the market’s specialist underwriting, the release said.

Vincent Vandendael has been appointed Chief Executive Officer of Lloyd’s Brussels, in addition to his current role as Lloyd’s Chief Commercial Officer.

Inga Beale, Lloyd’s Chief Executive Officer, said: “Since the UK referendum on European Union membership Lloyd’s has been working hard to ensure that whatever the outcome of the Brexit negotiations our partners across the European Economic Area will continue to enjoy access to Lloyd’s unique offering.”

Neon appoints new Group Underwriting Director
Neon has announced the appointment of Theo Butt to the newly-created role of Group Underwriting Director.

Mr. Butt joins Neon from Ascot Underwriting, where he most recently served as Head of Non-Marine within their executive underwriting team.

He will begin his new role in September 2018 and reports directly to Martin Reith, Group Chief Executive.

Mr. Reith said: “I am delighted to welcome Theo to Neon. I know him well having worked with him for a number of years and he has developed an exceptional reputation in the market.”

Mr. Butt said: “I am thrilled to be joining Neon. The business is well positioned for further growth across a number of initiatives.”