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Groupama Insurance credit rating upgraded

Following the completion of Ageas UK’s acquisition of Groupama Insurance Company in November, Standard & Poor’s has raised Groupama Insurance’s financial strength rating to BBB with a “stable outlook”.

The ratings agency took a number of factors into consideration in making its decision including the company’s good competitive position, established and diversified broker base, strong niche focus, improved operating performance, appropriate level of reserving and reinsurance cover, and its capitalisation.

Commenting on the announcement, Ageas UK chief executive officer, Barry Smith, says: “This is good news for brokers and customers as it creates additional stability and certainty for them to continue to trade with Groupama Insurances.

“They now have independent confirmation that they are dealing with a financially strong and well capitalised business geared towards meeting their needs.”


ICO fines “compensation” text generators £440k

The owners of a company that has been plaguing the public with unsolicited text messages and then selling on respondents’ details to claims management firms has been fined £440,000 by the Information Commissioner’s Office (ICO).

An example of their work includes: “You have still not claimed the compensation you are due for the accident you had. To claim then pls reply CLAIM. To opt out text STOP”

Tetrus Telecoms, which is jointly owned by Christopher Niebel and Gary McNeish, has been sending huge volumes of unsolicited text messages from offices in Stockport and Birmingham, without the consent of the recipient and without identifying the sender – both of which are requirements under Privacy and Electronic Communications regulations.

The company was set up in December 2009 and is believed to have been operational since then.

According to the ICO, the two men made hundreds of thousands of pounds profit during the course of three years.

Information Commissioner, Christopher Graham, says: “Our message to the public is that if you don’t know who sent you a text message then do not respond, otherwise your details may be used to generate profits for these unscrupulous individuals.

“Together we can put an end to this unlawful industry that continues to plague our daily lives.”


BGL Group announces new executive chairman and CEO

The BGL Group today announced that Peter Winslow is to become Executive Chairman of the BGL Group, and Matthew Donaldson will take the role of Chief Executive Officer. The changes will be effective as of July 1.

Peter Winslow has been Chief Executive of the Group since 1995, and has led the Group through an ongoing period of significant growth. He oversaw the company’s transition from underwriting to become an intermediary back in 1997, and led BGL’s expansion into new areas from claims management and insurance partnerships, to aggregation and international markets.

Matthew Donaldson joined the Group in 1999 following the acquisition of a high street broker chain. He led the development and execution of the Group’s e-commerce entry strategy, resulting in the exponential growth of the existing intermediary businesses and the creation of He became Group Director in 2005 and Group Chief Operating Officer in 2010.

Peter Winslow said: “I have been in this post for just over 18 years, and have presided over and enjoyed being part of massive change in our Group from its days as a direct motor insurer to the business you see today. It has been challenging and it’s also been a lot of fun, and I look back and think how fortunate I was to join the Group.

“The time is now right for me to take a more strategic role and become less involved in the day-to-day running of the Group. Matthew has demonstrated exceptional leadership ability as COO. I have total confidence in his drive, commercialism, intellect and passion for the business. He will make a first class CEO.”


AXA UK successful in company name challenge

The Company Names Tribunal has found in favour of AXA UK and ordered an unconnected company, Axa International Asset Management Limited, to change its name.

Axa International Asset Management has been registered since May 2012 and did not file a defence in the matter.

The firm has one month to change its name and has been ordered to pay AXA UK’s costs of £700.


New broker Paul Baker buys park home specialist

Newly-formed broker Paul Baker Insurance Services has bought specialist park home insurance broker RK Shipman for an undisclosed sum.

Paul Baker Insurance Services was launched by managing director Paul Baker in December 2015 as a park and leisure home broker.

Its acquisition of RK Shipman will allow it to create a larger, dedicated park home team with offices in Cheltenham and Exeter.

RK Shipman’s management team, led by managing director Peter Ellis, will stay with the company, and it will rebrand under its new parent’s name.

Baker said: “I am delighted to be working with Peter and his experienced park home insurance team, who share our values of supporting the park home community and offering superb service to park home residents.

“Together we provide insurance for nearly 4,000 park home residents and have exciting growth plans to develop the business further.”

Ellis added: “I have known Paul for many years. He has an excellent reputation in the park home industry and I wanted to make sure that we joined a company who would continue to look after our park home customers.

“I know with Paul they are in safe hands and will continue to benefit from excellent insurance cover and service.”

Source: Moody’s

Zurich heading for fourth quarter net loss – Moody’s

Zurich heading for fourth quarter net loss – Moody’s

Ratings agency says loss will hit group’s key financial ratios

Zurich is heading for a fourth quarter net loss that will negatively affect the group’s earnings coverage and its capital and financial leverage, according to ratings agency Moody’s.

The Swiss-based insurer last week issued a profits warning that its fourth quarter general insurance business will show an operating loss of about $100m, hit by the winter storm losses.

It said the fourth quarter will also see some $475m restructuring costs and a $230m goodwill write off.

That fourth quarter GI loss follows a third quarter operating loss of $183m hit by the Tianjin explosions in China.

Zurich GI operating profit

But Moody’s said that, even adjusting for these losses, the GI result has been deteriorating for several quarters.

Moody’s said it expects the fourth quarter loss to result in a group net profit of about $2bn for the full year 2015, pushing down earnings coverage to about six times in 2015 from 9.4 in 2014.

Moody’s said that Zurich’s current acquisition plans could increase the group’s leverage which, with no improvement in profitability, "would negatively pressure the group’s credit and ratings".

Source: Moody’s

Zurich risks downgrade with RSA acquisition – Fitch

Zurich Group’s insurer financial strength (IFS) rating of AA-/Stable will be put under pressure if it issues debt to help buy RSA, according to Fitch Ratings.

Zurich has said that it has about $3bn available for M&A, while RSA’s market capitalisation is valued at £5.1bn ($8bn), Fitch added.

Zurich has also indicated that it has an appetite to issue more hybrid debt.

As a result Fitch said it expected if Zurich proceeded, it would fund the acquisition with a combination of existing resources and new debt.

An increase in Zurich’s Fitch-calculated financial leverage (adjusted debt-to-total capital ratio) to above 30% is the strongest trigger for a negative rating action.

According to the ratings agency, Zurich’s financial leverage was 23.2% at the end of 2014 and the 30% level would potentially be breached if Zurich raised $5bn or more of additional debt to help finance the acquisition.

Fitch said: “A decline in Zurich capital strength under Fitch’s Prism factor-based capital model – which is likely if the acquisition goes ahead – could also lead to a downgrade.

“While Zurich’s capital position might benefit from the added diversification of RSA’s business, it could be significantly weakened, in Fitch’s assessment, by goodwill associated with the purchase.

“Finally, deterioration in Zurich’s profitability following an acquisition could also lead to a downgrade, although Zurich has emphasised that any investment must yield at least a 10% return on equity.”

However Fitch said RSA would give Zurich access to markets it did not yet have a presence in and strengthen its position in the UK and Latin America.

RSA is much smaller than Zurich, with annual premium income of around $1bn compared to the German insurer’s annual revenue of $74bn.

Gaining a parent would also be positive for RSA’s rating and help address the outstanding issues weighing on its credit profile.

Fitch said RSA’s main operating entities have an IFS rating of A/Negative.


Zurich suffers claims from Chinese industrial explosions

Chinese fires are latest large losses to hit Zurich group. Zurich is assessing potential losses from companies in the northeast city of Tianjin, according to reports.

The city suffered two huge explosions. The fires started in the port area on Wednesday night.

The claims came from companies including those related to the property and cargo sectors, Zurich General Insurance Co (China) Ltd said in an email response to Reuters.

Zurich has suffered a number of large claim losses this year, including two in the UK.

Large claims, including arson attacks at council buildings in Oxfordshire in January, and the fire at the National Trust’s Clandon Park in the spring, pushed the UK division’s half-year combined operating ratio up by 6.7 percentage points to 98.9% (H1 2014: 92.2%).

Insurers uncovered 212,000 dishonest motor applications in 2014

Common lies exposed include forgetting to disclose previous claims or unspent convictions when asked, giving false address or post code for a lower risk area, and parents insuring in their name a vehicle being mainly driven by their son or daughter.

Last year more than 1,500 reports to the Insurance Fraud Bureau’s (IFB) cheatline related to motor insurance application fraud – nearly a quarter of the total calls received.

The ABI has also warned against ghostbroking scams – advising policyholders to avoid policies sold on social media networking sites, pubs, clubs and newsagents.

The IFB is currently dealing with 26 cases of ghost broking fraud.

ABI fraud and financial crime manager Mark Allen said: “Insurers recognise that innocent mistakes and oversights happen. But anyone lying to get cheaper motor insurance, or tempted by cheap insurance offers without first checking that they are genuine, risks driving illegally.

“Industry initiatives, such as the Insurance Fraud Register, My Licence that allows insurers to check for any motoring offences, and the work of the IFB and the Insurance Fraud Enforcement Department (IFED) in tackling ghost brokers are helping to reduce the scope for insurance application fraud.”



Towergate appoints Wood as CEO of Paymentshield

Former Ecclesiastical UK managing director Steve Wood returns to the insurance industry to join Towergate’s executive team.
Towergate Insurance has appointed Steve Wood as chief executive officer of Paymentshield.

The appointment marks Wood’s return to the insurance market after having previously left his post as UK managing director of Ecclesiastical Insurance Group in 2013.

Towergate confirmed he would join its executive team on 16 March and that acting chief executive officer James Watson would revert to his role as sales director.

Wood has over 30 years’ experience in the insurance industry and in addition to his eight years at Ecclesiastical he has worked at RSA and Royal Insurance.

Scott Egan, interim CEO at Towergate said: "This appointment is further evidence of the pace at which we are moving forward at Towergate.

"We are continuing to attract talent to the business, which adds to our experienced and capable team."

Wood added: "It is an exciting time to be joining Towergate, and I am delighted to be taking on the Paymentshield role.
"Paymentshield is a great business with lots of potential, and I really look forward to working with the team there to drive the company forward."