- Hiscox London Market

Transcription

Hiscox Global Insight
Issue 9
June 2016
Iran comes in from the cold
The lifting of UN sanctions could
be the start of Iran’s economic
re-emergence and opportunities
for the London Market, provided
the banks play ball.
As a country richly endowed with natural
oil and gas, and with a population of
more than 77 million – half of whom
are under 35 – it’s no surprise that
Iran’s re-emergence on the world
economic stage, following the removal
of UN sanctions, is causing ripples of
excitement for western businesses.
“Iran is a huge economy with a clear
understanding of insurance and risk,”
says Richard Halstead, Hiscox London
Market’s Underwriter for War, Terrorism
and Political Violence. But while sanctions
may have been lifted, the London
Market still finds itself hamstrung by the
unwillingness of international banks to
process Iranian business.
Iran – open for business?
Editor’s comments:
Claire Simpson
London must attract new people with
new skills if it is to remain as the premier
international insurance market.
Competition from other international
markets, as well as local insurers,
means we have to take every opportunity
to widen and improve the diversity of
the people who work in London if we
are to be relevant and attractive to
our global client base.
It’s an area where, as price and product
become increasingly commoditised,
we can steal a competitive advantage.
Omar Zeineldine, one of our terrorism
underwriters, calls the ability to speak
a client’s language and understand
their culture and customs as having
an ‘emotional connection’ with them,
which could mean the difference
between winning a piece of business
or losing out to a local market.
If you look at some of the big international
16040 06/16
opportunities– such as the re-emergence
of Iran on the world economic stage,
which is the topic of our lead article –
then I’d say we can’t afford to wait to
reflect that diversity here in London.
Of course, changing the business model
is also an important element of London
adapting to a new climate, and Jade
Gradwell’s drive to grow our terrorism
e-trading book is an example of how
we can break out from the physical
constraints of Box underwriting.
We also need to adapt to new market
forces so that London continues to
attract new business, which is exactly
what our Alternative Distribution team
is trying to do.
I hope you enjoy this latest edition of
Hiscox Global Insight, which includes the
usual mix of news, features and stories,
including Bobby Read’s look at the darker
side of the wine collecting bug, as well as
Neil Bolton’s mixed fortunes in trying to
live the good life on his own smallholding.
Iran is a huge economy
with a clear understanding
of insurance and risk.
Emerging from the shadows
Earlier this year, Iran’s economic and
political isolation ended when UN
sanctions on it were removed. First
imposed in 2006 by the United Nations
Security Council in a bid to check the
country’s nuclear ambitions and finally
lifted in 2016 (although US primary
sanctions remain in place), the end of
the UN sanctions programme could
be a huge opportunity for the London
Market. “The opening up of Iran has
come at a very interesting time for the
marine and energy business. If oil was
trading at US$100 plus a barrel, there
might be less excitement. But given the
market conditions, Iran represents a rare
opportunity to make a real difference
to grow the premium base.” Says
Charles Rawlins, Marine and Energy Line
underwriter for Hiscox London Market.
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Issue 8 June 2016
“Ten years have passed,
which means we’re lacking
an up-to-date technical
oversight of these risks.”
Given the potential, Lloyd’s is in a great
position to exploit Iran’s possibilities. “As
a centre of global capacity and expertise
for marine and energy risks, London is an
obvious destination for Iranian risks,” says
Rawlins. “We’ve already seen slips being
passed around the market canvassing
opinion.” Which is not to say that there
wouldn’t be underwriting challenges to
overcome, he cautions. “Ten years have
passed, which means we’re lacking
an up-to-date technical oversight of
these risks. For energy installations that
pre-dated sanctions, we don’t know
how well they’ve been maintained in the
intervening period, while for new oil fields
developed since sanctions kicked in, we
can’t be sure of the operational quality.
And we don’t know what the losses have
been like.”
Economic growth takes off
Aviation could be another area of growth,
with Air France already running regular
flights to Tehran and British Airways to
follow in July. “The introduction of new
routes and airlines flying to Iran will
really speed up the economic growth in
the country,” says David Slevin, Head
of Aerospace and Specialty at Hiscox
London Market. Boeing and Airbus have
also signed understandings to supply
Iran’s ageing fleet of aircraft, although, as
Slevin says, it will take a while for that to
be replaced as the worldwide backlog for
aircraft is huge.
Terrorism and political violence is another
obvious coverage for Iranian risks, adds
Hiscox’s Halstead. “The risk level there
is comfortable for us, we can definitely
underwrite business; although political
violence might be a challenge because
the Iranian authorities will downplay
the risk.”
The banking block
Despite the optimism, it is still very hard
for insurers to do business with Iran given
that no major UK bank will currently deal
with Iranian business. In an interview
at the Royal United Services Institute
in March, Mohammad Nahavandian,
the Chief of Staff to President Hassan
Rouhani, said: “Big banks are still worried
about primary sanctions from the United
States... [even though] non-US banks
should not be limited in any kind of
banking transactions with Iranian banks.”
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The problem with banking centres on
the remaining US primary sanctions,
which still preclude US firms from
doing business with Iran, explains Mark
Welbourn, a Partner international law firm
Kennedys. “If an insurer [of any nonUS nationality] was seeking to make a
payment to Iran in US dollars, it would
clear through a US depository institution
at some stage and therefore, even if for
no other reason, be in breach of the US
sanctions regime.”
One answer is to trade in another
currency such as euros, although banks
are still cautious says Welbourn. “Even
where payments are made in euros –
with certain exceptions allowed by EU
legislation – there is a [perceived] risk in
doing so and banks just don’t want to
take that risk. There are ways of working
around it: you can be compliant and
still pay a claim in Iran, but it’s just more
difficult and there is lots of risk from
stepping in the wrong direction. Banks
and lots of US-parented insurers are
still avoiding anything that touches Iran.”
“Banks and lots of USparented insurers are still
avoiding anything that touches
Iran.”
Sanctions ‘snap-back’
Aside from banking, there are concerns
that sanctions could be re-imposed
on Iran should it renege on any of its
commitments under the nuclear accord.
But this shouldn’t be an issue, Rawlins
feels. “The ‘snap-back’ clause in the
deal wouldn’t be particularly onerous
to London insurers given there is no
real capital outlay in establishing a
physical presence in Iran. There could
be problems around having to reserve
for losses, in that the market wouldn’t
be able to pay until sanctions were again
lifted, but the threat of sanctions returning
shouldn’t be a bar to London getting
involved.”
Ultimately, London’s insurance sector
depends on resolving the banking issue
before it can make real inroads into Iran.
“Until the banks come to some sort of
agreement to handle euros generated
from Iranian business, nothing will
happen,” says Rawlins. But change will
come, adds Welbourn. “There is more
understanding and knowledge of the new
sanctions regime and how it is possible
to comply with it. The banks will hopefully
gain comfort in knowing that they can
work through the sanctions regime. It is a
big market and there will be demand from
customers to do business there and there
will be demand for banks to facilitate that.”
Leadership is needed
To speed the process, strong leadership
is needed from both the UK government
and within the London Market itself,
argues Halstead, or otherwise Iran
is more likely to be a longer term
opportunity measured in “years rather
than months.” This view is echoed by
Iran’s Mohammad Nahavandian, who
implies that if the UK takes too long it
could find itself at the back of the
queue: “Those who act quick[ly] get
the best results.”
Page 2
Issue 8 June 2016
Cyber crime:
“a monumental problem”
Bob Anderson led the FBI cyber crime
team investigating Edward Snowden.
Now with Navigant Consulting, he
explains why the fight against cyber
crime requires companies to admit
they’ve been hacked.
How has cyber crime changed?
The complexity and sophistication of
attacks increases almost daily. The
bad guys are constantly refining their
methods and can launch attacks very
quickly, which puts us behind the eight
ball because we have rules and laws
which define how we can react and how
we think. It’s a monumental problem and
it’s not going to get any better. I’m not
a glass-half-full kind of person when it
comes to this issue.
I’m not a glass-half-full kind
of person when it comes
to this issue.
In the past, it was only very skilled
hackers who carried out attacks.
Now, hacking kits can easily be bought
on the dark web, or you simply hire
someone to carry out the attack for
you. So the number of attacks has
increased exponentially.
What is the biggest threat today?
It differs depending on the industry.
Ransomware attacks on hospitals and
other healthcare providers are rampant
in the US, causing huge business
interruption which results in losses
running into millions of dollars. They’re
an almost daily occurrence, and I
can’t believe that won’t spread across
the Atlantic.
This year, I predict we’ll see more attacks
on law firms. They hold a lot of very
sensitive data on their systems, and that’s
exactly what criminals want, either to sell,
to ransom or to use for extortion. Most
law firms represent victims – they aren’t
used to being victims themselves. But
they really need to consider how they
protect their data.
Rogue nations’ ability to launch attacks,
either on private enterprises or other
states, is a huge concern. Companies
must now consider who may target
them. Defending a low-grade criminal
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attack is a very different investment
from defending an attack by a nation
state. I’ve seen many private enterprises
whose information security systems
are pretty good against attacks by
ordinary cyber criminals or hacktivists
– but that might not be who’s attacking
them. So, companies need to evaluate
their potential attackers and build an
information security system based on
that assessment.
This year, I predict we’ll see
more attacks on law firms.
How can companies identify their
potential attackers and defend
themselves appropriately?
They need to constantly evaluate
their information and cyber security
programmes to make sure their security
systems are the most modern and robust
available. The day you need to really
worry if you’re a CEO is when your head
of information security tells you: “Don’t
worry about this, we’ve got this covered,
we’re good.” The bad guys are constantly
evaluating their methods of attack, so you
need to do the same for your defence.
The risks vary according to industry,
so in terms of nation states, the biggest
threat to the healthcare sector comes
from China, while in the energy sector
it’s Russia, particularly for fracking.
It’s not about how much you spend
on cyber security. A lot of the major
breaches I was involved with at the
FBI involved companies that had spent
a lot on security, but their defences had
been focused in the wrong direction
because they hadn’t considered what
their most sensitive data was and how
to protect it.
How do the biggest cyber attacks
you dealt with at the FBI highlight
the changing threat?
The Office of Personnel Management
breach involved the theft of personal
data of around 23 million government
employees, past and present, including
members of the law enforcement
and intelligence agencies. The US
government said the attack came
from China, and, although the Chinese
government insisted it was not state
sponsored, none of that stolen data has
since turned up on the dark web for
sale, unlike after other, similar attacks.
That would suggest that the attack
was carried out for specific intelligencegathering purposes, rather than
for money.
Another major attack I dealt with was that
on Sony. It was conducted by another
nation state, this time North Korea, but
it wasn’t intended to steal anything – it
was intended to destroy the company
[for releasing the movie The Interview].
That took place very quickly [after threats
of retribution were made if the company
didn’t pull the movie] and brought the
company to its knees within minutes.
Many companies still don’t admit that
they’ve been hacked. How much of a
problem is this?
I agree with you and the fact that no
one is talking about it is to everyone’s
detriment. It’s something I discussed
with my counterparts in the UK
intelligence community while I was at
the FBI. I would liken the situation in
the UK now to that in the US five years
ago. An important way of combating
this [reluctance to report breaches] is by
educating people about the intelligencegathering benefits of reporting attacks.
A lot of companies think that they’re the
only ones this is happening to, but in
reality it’s happening to companies all
around. By educating and talking about
this you help each other. But it requires
a cultural shift.
Work also needs to be done to
coordinate and correlate the data that
is already out there. There are a lot of
private-sector data security consultancies
that collate this information, as well as
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Issue 8 June 2016
national intelligence agencies. If everyone
can share information on the attacks that
they’ve witnessed then that would help
enable organisations to better prepare
themselves for evolving attacks.
Using the US example, this process
starts with education then evolves
into alliances between private-sector
companies and government agencies,
which then grow into formal intelligencesharing partnerships between companies
and the law-enforcement community.
Now, the FBI and intelligence agencies
will join forces with private security
consultancies in responding to a major
breach, sharing information right up to
top-secret level. That would never have
happened two or three years ago. But
it’s taken that evolution to bring all those
partners to the table. Everyone wants
the same thing: to protect the company
and to prevent sensitive data from
leaving the country.
We also built the National Cyber
Investigative Joint Taskforce to coordinate
cyber threat investigations. It comprises
the FBI along with all of the nationwide
intelligence organisations, as well as the
“five eyes” alliance members: the US, UK,
Australia, New Zealand and CanadThat
helped us enormously, because we had
intelligence from all of these different
sources as well as from our own agency.
I think it would be useful for the UK to
build a similar body.
Do law-enforcement agencies have
the resources to cope with the rising
tide of cyber attacks?
The reality is that you always have finite
resources and you set your priorities
according to your available resources.
You could argue that you would never
have enough resources: you could put
an extra 1,000 or 10,000 people to work
on tackling cyber crime and they’d still
be overwhelmed by the workload. That’s
why we need to educate enterprises
about understanding what their most
important data is and how to keep that
safe, because that will mitigate the risk
of cyber attacks.
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Also, I think a set of international
cyber principles needs to be drawn
up, endorsed by the United Nations
to which other countries have to sign
up. There are too many countries today
which do not view cyber attacks as
being crimes.
What impact has Edward Snowden
had on the fight against cyber crime?
Huge. I was in charge of the FBI
investigation, so I know every tiny detail
of the case. But what should have
set off alarm bells everywhere is if the
National Security Agency, probably one
of the most sophisticated technical
organisations in the world, could have
an insider steal as much information as
he did without anyone knowing about it,
then it could happen to any organisation.
I try to constantly impress on
companies the need to ask
themselves: “Am I out in front
of the person who’s trying to
steal my data?”
I think everyone needs to think of more
proactive remedies, rather than trying
to pick up the pieces after a disaster
occurs. More companies are starting
to think about it, but not too many are
doing it right now. I try to constantly
impress on companies the need to ask
themselves: “Am I out in front of the
person who’s trying to steal my data?”
Has the move for greater encryption
following his revelations made it
harder for intelligence agencies?
Yes, it’s made for a tougher environment.
But, as I said earlier, that’s why it’s
so important to create a partnership
between national intelligence agencies
and private enterprises. Otherwise, you’ll
always be behind the curve. It never
will end well if the first time I, as a law
enforcement agency, speak to you, a
private company, is when there’s a crisis.
I’m going to be pushy because I need
to get information quickly because I’m
worried about something going wrong,
while you’re going to be very suspicious
of me.
Do you think Snowden did anything
positive?
No, I helped to indict him on espionage
charges within 16 hours. He’s currently
still wanted for being a spy and one day,
I would like to have the chance to speak
to him, because I think the way he did
what he did hurt the US immeasurably.
There was a process in place he could
have followed to express his concerns,
but he chose to not follow that at all.
What do you think the future holds?
I think it will be increasingly hard to stop
cyber criminals, so it’s important for
us to try to be ahead of this problem.
Organisations need to evaluate every
aspect of their data security policies.
Page 4
Issue 8 June 2016
Working the niches
From insuring Danish
dog owners to wind turbine operators,
our Alternative Distribution team
is on the hunt for new risks.
With the London Market under increasing
pressure from rivals, its insurers are
looking to develop new products and
ways of doing business to stay one step
ahead of the competition. “The insurance
business has become more competitive
than ever – we need to be more creative
and entrepreneurial, rather than waiting
for business to drop into our lap,” says
Adam Holberry, Head of Alternative
Distribution at Hiscox London Market.
We need to be more creative
and entrepreneurial, rather
than waiting for business to
drop into our lap.
Hiscox’s Alternative Distribution team
is looking to do business outside the
traditional model. “We’re adapting to
change: brokers are looking to be more
efficient, as are we, and we’re responding
to their needs – as well as finding
new solutions for their clients,”
explains Holberry.
Alternative Distribution, which accounts
for over 20 percent of Hiscox London
Market’s income, has three functions:
managing Hiscox’s relationship with
underwriting agency White Oak;
developing new niche products that fall
outside the remit of existing underwriting
teams; and overseeing the Group’s
involvement in underwriting facilities.
Although facilities have generated
much discussion in the London Market,
Holberry sees them as a logical result of
better technology and the soft market.
“Brokers are trying to increase efficiencies
by reducing costs – as are insurers –
and one way of doing that is through
facilities,” he says.
“The brokers now have the data and the
IT ability to enable them to understand
their business better than ever before.
That enables them to package large
numbers of risks together, while providing
a lot of information about their past
performance. We have been clear about
where and when we will look at facilities:
where we can retain underwriting control,
where there is good data and we can see
sufficient profit margin, and where it can
give us access to a diverse portfolio of
business we haven’t previously written.”
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Find the gap
Much of Holberry’s team’s time is taken up
sifting through proposals for new product
ideas. Holberry sums up what his team does:
“We support outside experts, where we can
see real logic and a compelling business case
in what they’re offering. We’ll support them
with capacity as well as our
own expertise.”
His team includes a dedicated pricing actuary
and project manager, whose background is in
catastrophe modeling, as well as being able to
call on the services of policy-wordings experts,
who are experienced in developing products
from scratch.
We support outside experts,
where we can see real logic
and a compelling business case.
“We can price a product, as well as work
out its claims structure, write the policy
wording and provide the paper on which it is
underwritten, if necessary. We have the ability
to do any line or any product, and we can do
multiple lines, which is quite rare.”
The Alternative Distribution team has already
developed products as diverse as liability
policies for Danish dog owners, motor
insurance for expats on foreign assignments,
injury cover for football clubs and extended
warranties for renewable-energy wind turbines.
Holberry has several new deals in the pipeline,
but he’s always looking out for others.
“We rely on specialists, be they brokers or an
underwriting agency bringing us these ideas,
because they are much closer to the clients.
What I tell brokers is if your clients have a
particular need then come and speak to us.
So, if a broker tells me: ‘I wish we could do
this…’ my response is: ‘Well, let’s try.’”
Buying the new model
It’s only since he began his new role that
Holberry says he’s fully appreciated how many
potential opportunities there are to pursue.
“It’s been a revelation to me – there’s a real
need for what we’re offering. I recently visited
Rio and chatted to some brokers there about
what problems their clients have that aren’t
being fulfilled by the insurance market. By the
time my plane home had landed, one broker
had already emailed me a proposal.”
It’s been a revelation to me –
there’s a real need for what
we’re offering.
All this is a long way from the traditional way
of doing business in London that has existed
for centuries. “I used to sit at the Box all day,
but what I like so much about what I’m doing
now is that we’re offering something unique
with each of the products we’re supporting.”
But each of these deals may take months to
come to fruition. “I’ve learnt that these deals
don’t offer the same instant gratification, if you
like, of putting down a line on a risk. I’ve gone
from being an underwriter to something more
like a project manager, seeing it through from
start to finish. That’s a new skill I’m still in the
process of learning,” says Holberry.
From small acorns
Hiscox’s relationship with White Oak could be seen as the blueprint for its alternative distribution
model. John Shepherd, the agency’s founder, approached Hiscox in 2009 to ask if it would
be willing to provide capacity to write two niche products: auto physical damage cover and
extended warranties. Since then, the relationship has grown, with White Oak providing over
a quarter of Hiscox London Market’s income in 2015, while Hiscox increased its stake in the
agency last year.
Guillaume Bonnisent, White Oak’s Underwriting Director, used to do Holberry’s job, so worked
closely with the agency’s senior management before he joined. “The relationship with Hiscox is
very strong: it owns 30% of White Oak and Richard Watson, Hiscox’s Group Chief Underwriting
Officer, is a non-executive director on our board. Hiscox provides all of our auto physical damage
capacity, and the majority of our extended warranty capacity as well, with the rest being provided
by Inter Hannover,” says Bonnisent.
The relationship is set to grow further, as White Oak looks to expand. Along with a move to new
offices and a rebranding exercise due in the next couple of months “it could be an exciting year
for us,” says Bonnisent.
We’d like to possibly do more deals like White Oak,” says Holberry. “We’ve never written those
lines of business before, so it provides us with the distribution, expertise – and premium income
– at minimal cost.”
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Issue 8 June 2016
Open all hours: Hiscox drives terrorism trading online
Jade Gradwell explains why Hiscox’s online terrorism initiative has improved accessibility and creates more
time to meet brokers.
When the lights went out recently on the Lloyd’s
trading floor – with power lost to the ground floor
underwriting Boxes – Jade Gradwell who, as
Terrorism Underwriter for Hiscox London Market,
has built up it’s online initiative, probably thought
little of it given the volume of business her team now
transacts remotely. The ability to accept risks via an
online platform developed by Hiscox or simply via
email is gradually removing the need to queue up
at the Box, says Gradwell. “When I was originally
employed just to do e-trading, we generated
something like 5% of our overall income online.
Now it’s up to 20% and we have four people
dedicated to e-trading.”
Box hours of 11-4.30pm are hardly
conducive to a modern way of working
and not always convenient for the
customer.
More flexibility
Given the mandate to grow the terrorism book
electronically, Gradwell argues that London’s
gradual switch to e-trading is long overdue: “If you
look at what other industries are doing, Box hours
of 11-4.30pm are hardly conducive to a modern
way of working and are not always convenient
for the customer, whether broker or the insured.
Our e-trading means we don’t have to be focused
around normal office hours, which means we have
far more flexibility in how we work as a team. If you
have a young family, for example, you can be home
in time to pick up the children from school and still
handle that Latin American enquiry, by logging on
later in the evening.”
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“I think e-trading has certainly reduced my stress
levels and made me feel more in control. We can
now also ‘scratch’ (sign off) a risk electronically,
which means we don’t even have to be in our
own office. I think this is life changing in terms of
how we work individually and as a team,” she adds.
E-trading means more face-to-face
While Gradwell preaches the benefits of e-trading
she doesn’t think it’s the death knell for personal
interaction – quite the reverse, in fact. “Critically,
e-trading means I can actually spend more time
meeting our brokers, getting to know them and
understanding how we can best respond to their
needs, as well as develop products which their
clients want. I wouldn’t want that to change,
but we can now be more accessible and deal with
our brokers in whatever way suits them most.”
I think e-trading has certainly reduced
my stress levels and made me feel
more in control.
Jade Gradwell
After completing her A-levels in 2007, Jade knew
nothing about the insurance world but stumbled
across Hiscox while searching online for companies
to find work experience. She initially joined Hiscox as
a Box Assistant for Personal Accident, Contingency
and Bloodstock. After two years in the role she
moved over to the Terrorism Operations Team and
in 2012 moved across to the Terrorism Underwriting
Team. Jade now manages the team’s e-trading
activities.
Page 6
Issue 8 June 2016
60 seconds with…Richard Golder
Hiscox’s Marine Cargo Line Underwriter describes how a dinner party conversation got him into
insurance and why he’d pick Jamie Vardy in Euro 2016.
As a child, what job did you dream of doing when
you grew up?
Not insurance. My real dream would have been to do
something related to sport – I loved playing football,
cricket, tennis and golf during my school years. But
a perk of this job is access to some great sports: at
this year’s RIMS conference, I was able to get to play
a round of golf with a broker at San Diego’s world
famous Torrey Pines course.
How did you get into insurance?
I left education after A Levels and, living in Billericay
with a stockbroker father, the City was the obvious
destination. I got a job with the Bank of America but,
after there was a reshuffle at the bank, I decided that
I wanted to try something else. Serendipitously, while
at a dinner party my mother overheard someone
saying they needed a ‘young lad’ for their business in
Lloyd’s. I applied and was taken on as an underwriting
assistant on the cargo and specie account for CH Ford
syndicate 710.
Lloyd’s fascinated me from the start. It wasn’t like
banking: there was much more face-to-face activity
and less picking up the phone. All these different
companies in one place with no signage telling you
who was who...
How would you describe your job to a stranger
at a dinner party?
Usually I’d say marine insurance and when they say
boats, I’ll say no, the cargo in the boats. If they’re
interested they might ask what’s in the cargo.
What do you like best and least about your job?
Best: the variety. I’m always learning with no two risks
the same. No one knows it all, but experience is very
valuable in this class.
16040 06/16
Least: the variety. There’s no easy day in cargo
underwriting and the job can be very intense. There
is also a bewildering level of rules and regulations.
What’s the oddest risk you’ve seen?
We were once asked to insure a piece of equipment
that gets hauled up mountainsides and delivers a
sonic boom to trigger ‘controlled avalanches’.
If you weren’t underwriting marine cargo,
what other risks appeal to you as an underwriter?
Event cancellation looks interesting and ties in
nicely with my sporting interests.
Would you rather score the winning goal in this
year’s Euro 2016 football championships, or outrun
Usain Bolt in this summer’s 2016 Rio Olympics?
It would have to be the Euros. I prefer to do something
as a team. But, if I can’t be there, I’d prefer Hodgson
to play Vardy up front rather than Wayne Rooney.
What’s your favourite book?
Well, he’s not so fashionable any more but I did like
Jeffrey Archer’s Kane and Abel. I love a good rags
to riches story.
The most recent film you saw?
On the plane back from RIMS I saw “The Big Short”,
a great film about how some saw the property crash
coming and took full advantage at the banks’ expense.
Tell us something about yourself that most
people don’t know?
I ran a marathon around Loch Ness in 2015.
My time was quicker than the time I did for the
London marathon in 2005. I’m looking forward
to getting even faster in another ten years.
Page 7
Issue 8 June 2016
Outside the Box: Neil Bolton
Hiscox London Market’s Head of Casualty on living the good life in the countryside, coping with vanishing
hens and suicidal sheep.
Nearing the end of a three-year stint working for Hiscox in
the US, my family and I started to think about living a semiself-sufficient lifestyle. We’d lived around the Thames Ditton
area before going to the US, but I fancied the idea of growing
vegetables and keeping some livestock. I also think it’s important
my kids have an idea of where their food comes from.
So, following our return to the UK, the hunt was on for
somewhere we could set up a smallholding. After a two-year
search, we found a place in the South Downs National Park. It’s
a long commute into the City for me (1h 45m), but the location is
worth it.
I’ve learnt to shear the sheep with mixed
results - they didn’t look too smart - and been
introduced to the importance of keeping a
sheep’s backside clean.
Poultry returns
Our first attempt to keep livestock didn’t quite match the rural
idyll. I bought a dozen Orpington chickens, but unfortunately
they all began to die one by one until there were only two left,
without a single egg laid. Apparently they had contracted a rare
avian disease. Undaunted, we tried again with six hens from a
more standard breed, but this time a fox paid a visit and did for
most of them too.
Fortunately, we’ve had more success with our sheep. This year,
we’ve bought nine Hampshire Down Sheep with the intention
of rearing organically sourced lamb for family and friends. I’ve
learnt to shear the sheep with mixed results - they didn’t look
too smart - and been introduced to the importance of keeping
a sheep’s backside clean (known as dagging, or clipping off
the dried dung) for fear of ‘fly strike’. Sheep also seem to have
a suicidal gene. One of them launched itself into the air and
rammed its head into a corrugated iron hut whilst I was cutting
its hooves, splitting its face wide open. My wife is a doctor and
our first thought was for her to suture the wound, but
we didn’t have any sutures in the house. A vet was
called and 20 minutes later the sheep was stitched
up. All well we thought – until the sheep dropped
dead in the field two weeks later.
I like the variety and I get to pootle
about on my own John Deere Tractor not much wrong with that!
Bringing home the bacon
We’ve also expanded with two pigs, predictably
named Pinky and Perky. They’re Oxford Sandy
and Blacks which are quite sociable animals:
they will follow you around, but they can give a
nasty little nip if they get too excited.
Having a smallholding involves periods of intense
activity, but on a day-to-day basis, the animals can
be fed and watered using automatic food hoppers
and water troughs. But you can’t just leave them to
their own devices – I check on them every evening
when I get home. It’s something that is completely
different from my day job: I like the variety and I get
to pootle about on my own John Deere Tractor not much wrong with that!
Grow your own
Next up is our vegetable garden. Our very own Paul
Lawrence is something of an expert on growing his own veggies,
so I’ve been taking advice and am looking forward to a good
crop this year. But I’ve become well read on smallholding issues
and rarely miss an episode of Country File or Gardeners’ World
on TV. And who knows? If I’m feeling lucky, I might even try and
keep some more chickens in future.
16040 06/16
Page 8
Issue 8 June 2016
Word on the grapevine The perils of being a wine-collecting addict
Koch’s bottles, and the one bought by
Malcolm Forbes, were traced back to one
man – a flamboyant German collector
calling himself Hardy Rodenstock. He
said he had bought the dusty old bottles
inscribed with the letters “Th.J” from
someone who had found them in a
bricked-up cellar in a Paris building. But
he refused to give the seller’s name or
where he had found them.
Collecting can be very addictive,
says Bobby Read. Passionate wine
collectors need to beware of where
they get their fixes.
Collecting is more addictive than crack
cocaine. Charles Saatchi described
himself as “an artoholic” and the top wine
collectors are no different. The problem is
that when you’re truly passionate about
something, your frailties can be exploited.
If you’re desperate to fall in love you can
be easily seduced, and that can make
even the most hard-nosed billionaire a
willing victim of hucksters, as two wine
frauds have proved.
The first involved a tantalizing tale of the
discovery of long-lost bottles of Bordeaux
once owned by Thomas Jefferson – the
vinous equivalent of Indiana Jones finding
the Ark of the Covenant.
Charles Saatchi described
himself as “an artoholic”
and the top wine collectors
are no different.
The Declaration of Independence’s
author fell head over heels in love with
French wine while serving as his country’s
Minister to France in the 1780s, and in
his first term as the US’s third President
spent lavishly on wines from the finest
vineyards: Chateaux Lafitte, d’Yquem,
Mouton and Margaux. When, in the
late 1980s, bottles purportedly from his
personal collection from his days in Paris
went up for auction, it caused a scramble
among the world’s richest collectors.
In 1985, publisher Malcolm Forbes
bought a 1787 bottle of “Jefferson” Lafitte
at Christie’s for £105,000 – the most
expensive bottle ever bought at auction.
Bill Koch, the billionaire energy baron,
spent around $500,000 a few years later
buying four more bottles of Jefferson’s
wine – only to discover in 2005 that they
were almost certainly fakes.
16040 06/16
Outraged at being conned, Koch
embarked on a personal crusade to
root out those he believes are crooked
operators in the fine wine market.
He has spent millions of dollars suing
auction houses, dealers and individuals
like Rodenstock.
Bogus Burgundy
Another he sued is Rudy Kurniawan,
who was at the centre of what has been
described as the biggest-ever wine fraud.
In auctions in 2005-6, Kurniawan sold
a jaw-dropping $35 million worth of fine
wines – some to Koch. But when doubts
were raised (by Koch), FBI agents raided
his Los Angeles home where they found
a counterfeiting factory full of empty
bottles and thousands of fake labels
for the most prestigious Burgundy and
Bordeaux vineyards. In 2014, Kurniawan
was sentenced to 10 years in jail and
ordered to repay over $28 million to
his victims.
In both the stories of Rodenstock and
Kurniawan the collars and cuffs don’t
match. They rose from obscurity with no
obvious sources of wealth and sketchy
pasts, but claimed to own some of the
world’s rarest and most sought-after
wines and in unprecedented quantities.
So how were they so successful?
The visceral and addictive need to own
the best makes collectors, known for
being ruthless and calculating in their
chosen professions, suspend their
disbelief. They are willing to put on hold
their otherwise acute powers of realism
and logic to enjoy the thought that they
have bought an undiscovered bottle
owned by one of the Founding Fathers,
for example.
The businessman, yachtsman behind
the US’s 1992 America’s Cup victory,
and serious collector (he also owns an
array of Wild West memorabilia, including
Custer’s and Jessie James’s guns) also
loves a good legal scrap: he sued and
won $12 million from another New York
wine merchant he claimed had sold him
expensive duds.
The frequent frauds occur
because collectors’ hearts rule
their minds. Wise words about
patchy provenance or dubious
quantities are rarely heeded.
Koch hired two experts to authenticate
his collection: out of a sample of 3000
pre-1961 vintages they found well over
100 that were either suspicious
or obviously fake.
The problem is that the boom in wine
collecting around the world in the past
30 years has fuelled a corresponding
explosion in wine faking. It is thought that
only five magnums of the sensational
1947 Lafleur were produced – but since
the late 1980s at least 19 have been sold
at auction.
The frequent frauds occur because
collectors’ hearts rule their minds. Wise
words about patchy provenance or
dubious quantities are rarely heeded.
The sad truth is that if something seems
too good to be true, it probably is.
A couple of interesting footnotes: last
December, US authorities crushed over
500 bottles of Kurniawan’s fake wine.
But over 5,000 bottles from his personal
collection – authenticated as being
genuine – were also auctioned, along
with his Lamborghini and two other cars.
Also, Koch is selling around 20,000
(genuine) bottles from his collection,
expected to fetch as much as $15 million.
Koch explained his decision to sell,
saying he said he couldn’t possibly hope
to consume everything in his vast cellar,
so wanted others to “enjoy the glorious
moments that come with these wines.”
Koch is unique in admitting his wine
collecting mistakes and then pursuing
those who have wronged him to the
ends of the earth.
Page 9
Issue 8 June 2016
Meet the claims team
Tony Rai
Head of London Market Claims
020 7448 6104
[email protected]
at the weekend for sport or drama.
Who would play you in a
film about your life?
A young Al Pacino (one of
my favourite actors)!
Lying on a beach or trekking up a
mountain for this summer’s holiday?
I enjoy both but prefer to be active on
holiday so will be doing both this summer.
Why choose insurance as a career?
As with many people I fell into insurance
as a career. I started life as a solicitor but
focussed heavily on (re)insurance litigation
and was involved insignificant cases on
behalf of Lloyd’s Syndicates. I was lucky in
that a number of those cases went to trial
in the Commercial Court/Court of Appeal.
Even as a solicitor I was focussed on (re)
insurance and acted extensively on behalf
of the London Market. At the same time I
spent time on secondment with a number
of managing agents including Hiscox.
During my time on secondment at Hiscox
an opportunity arose to join as a Head
of Claims and change careers. It was a
fantastic opportunity that I grasped with both
hands and have not looked back since!
How would you describe
your job to a relative?
A.I would describe my job as managing a
leading claims team in the London Market
who handle specialist commercial claims.
The best example of that I use is Kidnap
and Ransom claims as it usually catches
people’s attention after they have switched
off when I say I work in insurance!
Your favourite and worst work task?
My favourite work task has been the same
throughout my career, resolving complex
claims. I don’t really have a worst work task
but having to deal with entities that do not
have a similar customer focussed approach
to claims handling can be a challenge.
What do you see as the London
Market’s biggest claims challenge?
I feel the greatest challenge is the impact
of increased regulation in the insurance
industry and ensuring we remain compliant
with the changing regulatory landscape.
How do you like to relax outside work?
A.I enjoy running and completed the
London Marathon this year. A lot of my
free time is taken up by my three children
and I tend to be ferrying them about
16040 06/16
I’m not really a beach person as I get
bored too quickly and so it’s trekking for me.
Gavin Williams
Energy Claims Manager
020 7448 6016
[email protected]
Peter Parsons
Claims Manager, Property
020 7448 6759
[email protected]
I joined a broking house after leaving
school, I thought it was a money brokers
but it was actually an insurance broker.
It took me two weeks to realise but by
then I was hooked. After 20 years in the
business I haven’t regretted my mistake.
Insurance provides great opportunities for
personal and career development. It can
be both challenging and rewarding but
never stagnant and seldom dull. Although,
having said this, I didn’t exactly choose
insurance myself, it was more a case of
insurance choosing me – but I’m glad it did!
Interesting, challenging and enjoyable.
I have met with different people from
many different countries and walks of
life. I have travelled extensively and faced
some seriously challenging situations.
My favourite task is meeting with our
overseas representatives. I do not enjoy
preparing for the quarterly reports.
Lloyd’s systems (ECF) and broker staffing
in the event of a major catastrophe
impacting Hiscox customers.
I enjoy playing the guitar, reading,
writing and visiting new places.
That’s not for me to say – but having
asked others – it’s a race between Kevin
Spacey, Terry Thomas and Idris Elba.
If you suffer a fire at home or crash your
car I am the nice man from the insurance
company that assesses your claim and
writes a you a cheque – except that I do this
for marine vessels, oil rigs and pipelines.
Favourite: travelling globally and
negotiating a multi-million dollar deal
to the mutual satisfaction of the client
and Hiscox. Worst: administration.
The electronic trading of claims has reduced
the face to face contact we have with our
brokers. We must ensure that we maintain
close contact and build relations, which
is a key claims project within Hiscox.
Cycling and running.
You might struggle to sell the script – my wife
thinks that I look like Ewan McGregor (ignore
his performances in Star Wars if you can).
It’s the beach for me.
Page 10
Issue 8 June 2016
Chris Hughes
Technical Claims Manager
020 7448 6578
[email protected]
Litigation management, with a
lot of negotiating and plenty of
relationship development
Favourite: Dealing with a complex,
multi-faceted claim – being a strong
lead on the slip and making difficult
decisions to ensure the best outcome
Worst: Reviewing bordereaux
For the same reason as most
others – insurance chose me!
Differentiating our claims offering from
our competitors. We need to look at how
and where can we add value beyond the
traditional back office claims handling.
Handling professional negligence
claims against American hospitals.
A glass of wine and time with my family
I enjoy settlement negotiations. The worst
task is paying attorney’s fee bills.
My team suggested Joanna
Lumley or Mrs Doubtfire. Neither
of which is all that flattering.
Maintaining face to face contact in the
age of electronic claims handling.
Spending time with my family, running
and playing five-a-side football (badly).
Chuck Norris
I would say Richard Gere but one of my
colleagues suggested Ray Winstone!
I would prefer the adventure holiday, but
my wife prefers the relaxing beach holiday,
although this year we are going on our first
cruise . I’m a little apprehensive as I see all
the problems that occur on cruise ships!
James Pilgrim Morris
Head of Professional Indemnity Claims
020 7448 6414
[email protected]
Dean Allen
Marine Claims Manager
020 7448 6131
[email protected]
Choose you say? Not met many people who
did that – but what a great career to fall into
Working with great people to sort out
myriad fascinating claims from around
the whole world – and thereby being
at the heart of a great business
Jessica White
Casualty Claims Manager
020 7448 6211
[email protected]
16040 06/16
Doing Triathlons .
Lying on a beach. Although with two
small children, trekking up a mountain
would probably be more relaxing
Lying on a beach
A recruitment agent directed me to
insurance, and I never looked back!
My concern is that there is little faceto-face interaction these days , I fear
that young people coming into the
claims market will miss out on an
important part of the claim process.
My first job offer was an office junior
in a small Insurance Brokers. The
rest is history as they say!
Favourite: no one thing – I love that
every hour of every day is different.
Worst: going to yet another meeting
I deal with marine claims not motor or
household, so I can’t help you with
your own Insurance problems.
Keeping all our brilliant people and building
out our winning proposition as the business
goes into more and more new product
lines (and expenses are squeezed!)
Your favourite and worst work task My favourite task is when successfully
negotiating a disputed part of a
claim. The worst is dealing with all the
regulatory and compliance issues.
I don’t. I race my bicycle – much more fun
Page 11
Issue 8 June 2016
Right, they are going to make
a film about me!
Beach – everyone needs a
rest once in a while
Lying on a beach – any day!
Sophie Read
Reinsurance Claims Manager
020 7448 6214
[email protected]
Roger Bowes
Aviation Underwriter
020 7448 6438
[email protected]
My first six months as a trainee solicitor
was spent in the reinsurance department
– it was difficult to resist the appeal!
I fell into insurance. I always wanted to be
stock broker but ended up at an agency
which dealt with the insurance industry and
ended up starting as an insurance broker.
It involves anything and everything to do with
insuring the aviation industry from airlines to
airports, air traffic control, helicopters, small
planes, big planes, product manufacturers,
banks who own planes, caterers, refuellers,
repair and maintenance organisations!
Favourite task is the resolution of complex
claims and litigation and the worst would
be dealing with useless systems such as
ECF. Give me an old school file anyday!
A really interesting role, requiring a
mix of technical and personal skills.
The Hiscox Wine Hamper normally
gets a special mention too.
My favourite task is reviewing and settling
a claim for which we have been provided
with timely updates and all pertinent
information. Unsurprisingly it follows that
my least favourite task is reviewing a late
notified claim with minimal information.
The consolidation of broking houses
and resulting pressure on broker service.
With good friends and family.
The ability to control service providers
and costs is a massive challenge.
Hmm, someone short and blonde.
My kids take up most of my time.
Give me a good restaurant and
a top meal and I can relax.
Neither – a stroll through some vineyards
and watching the Tour de France!
Jim Carey
16040 06/16
Page 12
Issue 9 June 2016
Calling all young compliance
officers
Knowing your brokers
A new compliance networking group –
the Young Compliance Officers’ Group
(YCOG) – has launched. The brainchild
of Hiscox’s James Gibson, a Compliance
Analyst within Hiscox’s Group Compliance
team, the intention is for YCOG to become
an active professional and networking
support group for anyone under 35 years’
old who works in compliance within the
UK insurance industry.
In 2014 Hiscox London Market ran its first
major broker survey to understand more
about what brokers thought of its service;
where the business performed well and
where it needed to improve. The response
threw up many positives in areas such as
service, responsiveness, availability and
communications, while indicating there
was work to be done in others including
risk appetite and consistency.
Commenting on the launch of YCOG, James
Gibson says: “Compliance lacks the same
sort of camaraderie that exists in the broking,
underwriting and claims worlds. So, with
the backing of Jason Jones, Hiscox’s Group
Audit and Compliance Director, I decided to
form YCOG with the intention of establishing
a regular networking opportunity for younger
compliance practitioners to connect with
their peers, share best practice and discuss
regulatory developments.
Two years on, Hiscox intends to repeat
the process to understand how brokers
feel about the business and whether it
has addressed some of their concerns.
Underlining the importance of understanding
and acting on customer feedback, Paul
Lawrence, Chief Underwriting Officer for
Hiscox London Market, says: “Brokers are
our principal source of business so it’s key
that we understand what they like and don’t
like about us, as well as how they want
to trade with us as we shape our future
strategy.
Since launch, YCOG has already attracted
100 members from 60 firms across London
as well as an active social media presence.
“I’ve been delighted by the response I’ve had
since launching the group and I’ve already
had huge support from the Lloyd’s Market
Association. Ultimately the intention is to
make this a nation-wide initiative but initially
it will focus on the London Market,” adds
Gibson.
Quarterly get together
The intention is for YCOG to meet every
quarter and keep in touch via social media.
The group will also get involved in mentoring
schemes for more junior compliance
professionals, as well as helping to promote
the London Market’s diversity initiative.
For more details, email james.
[email protected] or follow
YCOG’s progress on Twitter
@ComplianceU35s.
“The last broker survey we ran had some
very positive feedback, but I was also
surprised – and a little disappointed – to see
that we were marked down on some aspects
such as lacking clarity and consistency in our
risk appetite. Since then we have worked
hard with our teams to more closely define
our appetite and hopefully brokers are now
seeing more consistency.
“This follow up survey will help us better
understand how effectively we have
addressed this issue and others. We do not
want, or can afford, to operate in a bubble
and these surveys are an invaluable way
of understanding how we can better help
brokers and their clients. I’d like to thank in
advance those brokers who take the time to
help us complete the survey.”
Hiscox launches new
US flood cover – FloodPlus
In response to the deregulation of the US
flood insurance market, Hiscox London
Market has launched a new flood product
for US homeowners – FloodPlus. Working
with wholesale brokers in the US to
distribute the new product, FloodPlus
meets a shortfall in flood cover for many
homeowners by offering higher limits
and a wider scope of cover than policies
provided by the existing US government
backed National Flood Insurance Program
(NFIP).
With current NFIP limits of only US$100,000
for contents and US$250,000 for buildings,
US homeowners have had limited choice for
flood cover. Hiscox’s FloodPlus, which will be
available through wholesale brokers in the
US, not only offers higher limits of cover but
also a simpler definition of what constitutes a
flood, as well as broader cover for personal
property plus alternative accommodation
while the property is being repaired. Available
for wholesale brokers to market to their retail
broker clients, US broker Johnson & Johnson
has already begun to offer FloodPlus to its
agency partners.
Commenting on the new product, Jonathan
Powell, Personal Lines Underwriter for
Hiscox London Market, said: “As we’ve
seen recently with huge floods in Houston,
Texas, flood continues to cause devastation
to homeowners throughout the US. Once
again consumers are finding their flood
cover woefully short of what they actually
need with insufficient limits, no option for
alternative accommodation, and a narrow
definition of what constitutes a flood.
Following deregulation of the market, we’ve
been able to put together a product that
brings the best of the London Market to the
benefit of US homeowners who want more
comprehensive flood coverage through a
simple flood definition, higher limits and
broader coverage.”
Peter Burrous, Chief Marketing Officer with
insurance broker Johnson & Johnson,
added: “We are very pleased to offer
FloodPlus to our partner Agents and we
believe that it is a product that can make
a real difference to homeowners in the US
looking for flood coverage that responds to
the real scale of the flood risk to their homes
and personal property.”
“The London insurance market has built
its reputation on the ability to innovate.
FloodPlus is the latest demonstration of our
ability to do just that and respond to genuine
customer needs,” concluded Powell.
16040 06/16
Page 13
Issue 8 June 2016
Infographic
16040 06/16
Page 14
Issue 8 June 2016
Infographic
16040 06/16
Page 15

- Hiscox London Market

Transcription

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