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Global Insurance Trends 07.11.2017

insurance-trends
Posted November 7, 2017

Douglas Shillito

This week, the International Association of Insurance Supervisors (IAIS) held its annual conference in Kuala Lumpur. It announced a unified path to convergence of group capital standards in furtherance of its ultimate goal of a single Insurance Capital Standard, and also agreed a five-year agreement to enhance the actuarial skills of supervisory authorities. The new Annual Report of the Global Federation of Insurance Associations (GFIA) was published, and an Insurance Europe online consumer resource highlighted how the insurance industry contributes to meet consumers’ expectations and needs. The Prudential Regulatory Authority (PRA) published its final approach and expectations in relation to the authorisation and supervision of Insurance Special Purpose Vehicles (ISPVs), bringing UK ILS issuance closer. Research by the Lloyd’s Market Association (LMA) revealed that Lloyd’s insurers spend about £20m annually on capital-model governance and validation, but many approach the process as an exercise to satisfy regulators, rather than a value-adding proposition. Standard & Poor’s published the first edition of its quarterly EMEA Insurance Monitor, and also reviewed the Irish P&C sector.

The Third Quarterly InsurTech Briefing from Willis Towers Watson examined how technology has the potential to disrupt national insurance markets and alter the global balance of power between (re)insurers in developed markets and those in emerging economies. Meanwhile, a Quayle Munro Insights white paper highlighted that rapid growth in the global insurance software, data & analytics sector is set to drive increased M&A activity as insurers embrace innovative data analytics and processing systems, and consolidation among providers accelerates. DXC Technology signed a new five-year agreement with the LMA and IUA which could save the London Market £100m over the next five years. JLT joined Placing Platform Ltd, Wrisk InsurTech start-up raised £500,000 through a crowdfunding launch, and Sapiens announced that the StoneRiver Stream Billing solution had been chosen by Illinois-based RLI.

Third quarter and nine months financials flowed. They included AIG (third quarter net loss of $1.7bn), Allstate (improved third quarter), Argo (combined ratio at 126.5 for third quarter), AXA (growth continued in its preferred segments), Berkshire Hathaway ($1,439m third quarter insurance underwriting loss), CNA Financial (net and operating income improved), Everest Re (net loss of $639.4m in third quarter – CEO confident looking forward), Fairfax Financial ($929.5m pre-tax losses through major catastrophes in third quarter), Lancashire Holdings (loss after tax of $134.2m for third quarter and $65.7m for nine months), Liberty Mutual ($664m net loss for third quarter), RenaissanceRe (net loss of $504.8m in third quarter), RSA (continued progress despite hurricane cost provision of £50m), Swiss Re (nine month net loss of $468m – Group CEO says still able to absorb losses), The Hanover (maintained $11.1m net income in catastrophe quarter), Validus ($250.4m net loss in third quarter), and Aon (reduced net income for third quarter – revenue increased 6%).

Full articles on the above topics may be found on the Insurance Newslink and Financial Newslink global trends database services at www.onlystrategic.com

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