By Archie Whitehead, Tech, Media and Cyber Broker at New Dawn Risk
Network scanning has become a powerful tool for assessing a cyber risk, as it can offer a comprehensive report of a company’s IT environment and highlight key vulnerabilities at the press of a button. Though these scans are highly useful for gathering information, some cyber markets are starting to use them as gospel when evaluating the risk of potential clients. Cyber carriers should be wary of basing their full rationale off network scans, as this method simply cannot account for all the potential exposures a cyber carrier may be vulnerable to while on-risk.
For example, one major blind spot for network scans is that they do not pick up on a company’s Operational Technology (OT) environment. While this may not be of concern for certain industries, OT does account for a significant portion of cyber exposure in many industries (for example, manufacturing). When OT exposures are not accounted for, the accompanying risk will not be priced accordingly. While this may seem like a great result for the policyholder, who receives comprehensive cover at a cheaper cost, the insurer is putting both themselves and the insured in a precarious situation should a claim arise.
Additionally, network scanning does not take into account a policyholder’s governance – whether that be around culture, the use of employee security training, phishing simulations, or any other tools that can be used to boost prospective clients’ cyber hygiene beyond the realm of IT systems. Once again, subsequent pricing will not accurately reflect the risk at hand when these factors are overlooked.
As prior experience has shown, when loss ratios increase for these carriers, there becomes a need to determine what is going wrong and what needs to be changed. The dependency on scans as an underwriting process poses a hard question: have we learned anything from the last market cycle? Will the same occur again, with insurance companies unexpectedly non-renewing accounts, or unjustly increasing premiums even though the insured has not done anything to warrant such an increase?
If the cyber claims environment deteriorates once more in frequency and/or severity, there is concern that these carriers that have gained a large market share by warranting cheap rates through their scan reports will leave a huge gap in the market, potentially leaving clients stuck without a solution. By extension, this can cause anxiety around having to move policies to alternative carriers and essentially leave both insureds and brokers out to dry. Brokers may be held liable and will have to explain to clients that their cyber policy was placed with a carrier that did not account for all potential exposures.
Ultimately, network scans themselves are not the concern, but the use of such as a substitute for traditional risk assessment could become a major issue. These reports should be used in addition to the other underwriting tools within a cyber insurer’s arsenal; the danger comes in thinking they can replace human rationale and insight. Those in the cyber market should brace themselves for when this scanning bubble may eventually burst…
6 March 2023
Several dynamic changes in today’s insurance environment have made risks unpredictable, rendering them difficult to model and tricky to determine accurate return periods. These changes have led to certain lapses in coverage, creating a growing need for innovative solutions. In response, parametric insurance has emerged as an effective risk-mitigating solution that offers certainty and protection for these gaps.
Our latest white paper, Parametric insurance: The scope of solutions for agriculture and natural catastrophe risks, walks through the trends, triggers and unique solutions associated with this non-traditional insurance product.
Download the white paper here.
Aditya Singh, Head of Treaty at New Dawn Risk, commented: “Many global providers prefer parametric insurance, as it does not require them to understand the complexities of the inherent risks vis-à-vis the assets they invest in. This whitepaper discusses the fundamental ability of parametric insurance to cover products ranging from complex agricultural risks to property damage arising out of large natural catastrophe events.
Max Carter, CEO of New Dawn Risk, added: “Ultimately, parametric insurance can provide an affordable solution for large-scale insurance of catastrophic risks in exposed areas, and we expect this to become more widely adopted over the next several years.”
Notes to Editors
Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims.
I am a broker in the Professional Risks team. The team specialises in the placement of insurance for a variety of services, but I focus mainly on the Architects & Engineers space.
There is an insurance policy designed for comedians called Death by Laughter Insurance. My own premium costs me £500K ;)
I joined New Dawn Risk just after graduating from the University of Bristol with a degree in Spanish and Italian.
I spend my weekends running a small business on the side, selling vintage clothing online – which I started in my second year of university.
Outside of work, I enjoy playing all kinds of sports, particularly football and golf. During lockdown, I tried to learn how to play the piano – this has been a slow process, and my skill level falls somewhere between Twinkle Twinkle Little Star, and The Scientist by Coldplay…
By Aditya Singh, Senior Treaty Broker, New Dawn Risk Group
Agriculture is still the most important sector in many developing economies and is directly affected by climatic shocks, which have the potential to threaten global food security and stability, cripple livelihoods, disrupt value chains, and even undermine macroeconomic stability.
Climate change and the increased prevalence of extreme weather events are causing increasing damage to crops and agricultural land. A study from Stanford researchers found that higher temperatures attributed to climate change caused payouts from the nation’s biggest farm support program to increase by a staggering $27 billion between 1991 and 2017. Costs are likely to rise even further with the growing intensity and frequency of heat waves and other natural catastrophes.
Last year, analysts at KBW warned that crop losses will likely weigh on insurers’ overall underwriting profits for 2021, despite being overshadowed by more high-profile catastrophe losses such as Hurricane Ida and the European floods.
However, there is a way forward that can benefit both farmers and insurers.
The rise of parametrics
The use of parametric structures will be familiar to participants in the insurance-linked securities market, as the mechanisms that trigger catastrophe bonds to make reinsurance pay-outs to carriers when losses from a natural catastrophe (nat cat) event exceed insured limits.
The use of parametric triggers is also finding favour in the insurance market as well, with a growing number of applications for parametric insurance promising to fill the gaps that traditional indemnity products have failed to address.
The need for risk financing solutions in countries with low insurance penetration has long been recognised as a critical area of focus for the industry, particularly for funding recovery efforts following a catastrophe.
To date, efforts have focused on government-backed risk pooling schemes, such as the Caribbean Catastrophe Risk Insurance Facility, which pays out to selected governments in the region following major nat cat loss events such as hurricanes and earthquakes.
However, there is also a growing case for the deployment of parametric insurance coverage in underdeveloped countries to facilitate payments to individual policyholders following loss events. With climate change driving incidents across a range of perils – flood, drought, wildfires, etc – farmers, small business owners, and householders around the world increasingly need workable insurance solutions that pay out quickly following a claim.
The technology now exists to enable real-time reporting of a number of perils, using accurate, reliable and often freely-available data. As such, it has been possible to place parametric insurance coverage across a wide spectrum of risk types, including earthquake, hurricane, drought and flooding.
The parametric triggers for this coverage can be structured using a variety of measurable factors, such as shake density for quake, wind speed for hurricane, water depth and rainfall for flood, and factors such as rainfall (or the lack of) and crop health for certain agricultural risks.
The case for parametric insurance
While regulations vary between countries on how quickly insurers should respond to insurance claims, anecdotal evidence suggests many claims take more than 30 days to be settled. This naturally leads to policyholders becoming frustrated with the process, and speed of claims acknowledgement and settlement is therefore a key factor for insureds when looking to buy any type of insurance.
In the case of traditional indemnity insurance, claims are handled by assessing damages after the fact, which means disputes can arise between the policyholder and carrier over the scope of coverage. In addition, the carrier, in many cases, may end up paying out less than the policyholder was expecting, leading to further disputes, or more than they had reserved for, pushing up the carrier’s loss ratio.
By using predetermined metrics that have been mutually agreed by insurer and insureds, carriers can leverage loss data to immediately verify claims against parametric coverage, quickly adjust them and then pay out a pre-agreed amount without the need for any disputes or further processing.
Speedier capital deployment following a loss event helps individuals and communities recover from natural disasters faster. And the predetermined triggers also give a specific pay-out guarantee, ensuring carriers don’t pay out more than necessary, while giving policyholders a settlement that is in line with their expectations.
The scope of parametric solutions
Parametric solutions also allow for the coverage of risks that have traditionally been excluded from traditional claims processes, but which have a measurable objective parameter – such as demand surge during reconstruction, food spoilage and crop yields.
One real-world example of where parametric insurance could introduce greater efficiency into the claims process, and ultimately deliver solutions in previously under-served markets, is in the Indian agricultural sector – specifically, insuring against fluctuations in crop yields.
India has had a government-sponsored agricultural insurance programme for over thirty-five years, giving pay-outs to small farmers whose crops have failed. The programme has been criticised in the past for both the timeliness of payments and the inefficiency of its administration.
The introduction of a range of new technologies, including a mobile portal for reporting loss data, the use of satellite and drone imaging technologies for remote sensing of crop damage, and analytics based on data from a variety of weather indices, are being used to drive claims automation and, ultimately, make the scheme more profitable and therefore attractive to re/insurers.
With weather-related catastrophes continuing to take a heavy toll on communities across the globe, the use of clearly-defined triggers for insurance coverage can help to deliver more precise, streamlined insurance pay-outs, enabling communities to start rebuilding sooner, and empowering carriers to offer more comprehensive coverage.
This is changing the game for insurance carriers around the world – and is transforming the way they interact with previously under-served markets.
By Elizabeth Grima, Senior Executive Manager of New Dawn Risk Europe
The dust from Brexit is at last beginning to settle, and it is now possible to see how this will impact the European insurance market in the long term. At first, following the leave vote, predictions were boldly made that little would change as a result of the UK’s withdrawal from the EU. But in fact this has not entirely been the case, as many London-based insurers have had to significantly reconsider their European business models at the point of Brexit, including whether to continue doing business in some countries at all.
Therefore, jurisdiction and country of domicile has become more and more of a recognised issue for service providers around the world. As a result, a number of intermediaries, whether managing general agents (MGAs) or intermediary facilities, have set up office in the EU to preserve or to grow their business in Europe. The choice of legal jurisdiction for these offices has varied in reason but generally is linked to a calculation based on proximity, relationship, regulatory constraints, fiscal and speed-to-market incentives.
Though this is a natural development, there is an undertow here that is not positive for London’s reputation as a hub. Much has been made of the growth of the MGA model over the last couple of years, and it is generally agreed that this is an area of the market where creativity and new ideas flourish with the innovation of pricing and customer service being particularly successful. It is much to the detriment of the London Market if we begin to see MGAs being established in Europe at the expense of London.
Though the London Market will always be a hub for insurance business, the recent regulatory changes have created a slow but inevitable shift away from the traditional market with more opportunities for innovation taking place in the MGA and delegated authority space. Watch out for this trend bringing increased critical mass to European markets, to the disappointment of London in 2022 and beyond.
By Max Carter, CEO of New Dawn Risk
If there is one thing that parties on all sides can agree, it is that COVID has stretched and challenged every aspect of our healthcare systems. This is the case not just in the crowded emergency and COVID wards, but also in related fields, such as physiotherapy and rehabilitation, where the requirement for face-to-face interaction has been altered beyond belief by a year of remote treatment.
GP surgeries now only treat 60% of their patients face to face and are working through never-before seen challenges in administering new vaccines, catching up on routine appointments and persuading the fearful back into treatment.
Meanwhile in hospitals, consultants are struggling with huge disruptions to their operating lists, from the last-minute withdrawals of patients due to COVID, a shortage of back-office staff to make and manage patient records and appointments and the continued physical barriers to treatment from operating through layers of PPE.
As an insurance broker specialising in medical malpractice cover, I look ahead and see something different – a flood of claims coming towards us. The ability of consultants, physios, midwives, nurses and doctors to deliver consistent and excellent care has been challenged in so many ways. Though the intentions and effort have been heroic, the results have inevitably included delayed procedures and deaths from diseases that might not previously have been fatal.
History tells us that angry grieving families litigate, and this is what I expect to see happen in 2022. While the health service struggles to catch up, failures not of its making will catch it up, leading to a crisis in claims, a rise in premiums, and quite possibly some challenging restrictions in medical malpractice cover.
In 2020 and 2021, health service professionals were national heroes. They remain heroic, but the results of their efforts may bring them real additional challenges in the year ahead.
I’m a broker on the Technology, Media and Cyber Team. We find insurance solutions for a wide variety of risks spanning across a plethora of territories from the US to Africa. The classes of business we work with are always evolving so we need to be on our toes!
In the filming of “A Space Odyssey (2001)”, Stanley Kubrick sought a policy in case a real-life alien invasion came before the movie was released. Lloyd’s of London declined.
I joined New Dawn Risk a month after graduating from the University of Birmingham with a Bachelor of Science in Economics.
I originally wanted to go into the underwriting side of insurance but luckily found New Dawn and I haven’t looked back since.
I am a big sport enthusiast; my main playing discipline is the traditional English game of cricket. I’m also an avid supporter of my childhood football club, Yeovil Town FC. Outside of sport, I love cooking up a storm in the kitchen.
7 October 2021
The London insurance market’s focus has turned towards the developing economies as it looks for growth opportunities around the world, where increasing prosperity means there is more risk in need of protection. In Latin America, the terrible economic performances of some countries (Argentina, Venezuela) has been balanced by steady growth in others, such as Brazil, Mexico and Chile.
But the pandemic has had a devastating impact on Latin American economies, particularly Brazil’s. The resulting recession has undoubtedly affected insurance buying across the region and while there looks to be a recovery on the horizon — although it is likely to vary significantly from country to country — 2021 may well be a year of building back, rather than growth.
The pandemic has had a devastating impact on Latin American economies, particularly Brazil’s.
So, as the economic picture improves, what’s the forecast for insurance in the region?
Global insurance prices have risen this year, with rates in the London market hardening in a way not been seen for over 20 years. Latin American buyers are being impacted by this, and, as a result, local insurers and brokers have set up consortia to pool their resources to cover large and complex risks, which in turn reduces their need to buy cover from markets such as Miami or London.
Although some Latin American governments do not allow foreign insurers to participate directly in the market, international, Lloyd’s and London Market brokers will always be needed to provide essential capacity. For now, the London Market still holds enough cards to attract buyers while, also presenting challenges for Latin American brokers.
In a survey we recently carried out in the region, one respondent commented that the London Market sometimes lacked “knowledge of local conditions” and “interaction could be difficult.” There is a general belief that London has been less responsive since Covid, which has had a negative impact on buyer sentiment. But so far there’s been no substantial shift in business towards local insurers or Miami. It is to London’s advantage that wordings and policy conditions available locally remain unfavourable, while Miami has suffered many of the same service issues as London, despite being in a better time zone to do business with Latin America.
The London Market still holds enough cards to attract buyers while, also presenting challenges for Latin American brokers.
This is the year when London must focus on correcting some of its service gaps — particularly its slow responses to requests — to ensure that international insurers remain the preferred option. If the local market’s expertise and capacity were to build, and if it received support from the right reinsurers, then the London Market could well find its position is threatened. But if it sorts out its service problems, business will continue to flow to London because the local market can’t offer the same expertise on complex risks.
In financial lines, the level of increases should not come as a complete shock to most buyers, as rates have been rising 5-10% year-on-year for some time, with some sub-classes increasing at a higher rate depending on perceived risk. Some classes are under more pressure than others, but the preference of some Latin American buyers for combined policies means these price increases are sometime averaged out.
There are lines where London’s capacity and expertise remain essential. Directors & Officers insurance (D&O) cover, required in the region’s more sophisticated economies , is one, and here the pandemic has had a big impact on pricing. The problems in D&O have been building for some time, and one insurer commented that the coronavirus was the final straw . This, of course, means that prices will not simply soften again once the Covid crisis has passed.
Other factors are at play, and these are unlikely to unwind in the short term. London has led in terms of a hardening market, but many others are now catching up. It is not just rates that are affected, but a drastic reduction in deployed capacity, increased retentions and reduced commissions – all making the renewal process that much more challenging. Globally, insureds are seeing their premiums increased by multiples, making it difficult to retain the levels of coverage previously purchased.
Cyber is the other market most affected by rising rates, where for renewals increases are reaching 30% and more. Latin American brokers are seeing an increasing focus on international cyber solutions as the threats increase. Companies in the region often do not have the controls required to defend themselves against cyber-attacks, and, as a result, some insurers are not willing to underwrite them.
We hope that 2021 will be the year when London binds larger volumes of Latin American business.
The absence of cyber capacity in Miami also means that London must provide almost all of Latin America’s growing international cyber needs, and this is driving renewal-only decisions among some underwriters. First time buyers from Latin America must brace themselves for a lack of options and potentially some limiting conditions on policies. Ransomware is reportedly experiencing the highest spike in claims, which is contributing to rising premiums and coverage restrictions, and, as a result, policies are now commonly sub-limited or co-insured.
Amidst the high levels of unrest and corruption plaguing almost every Latin American country, new local players have stepped up to offer additional capacity where the London Market won’t. But London remains a stronghold and we hope that 2021 will be the year when London binds larger volumes of Latin American business, delivering improved service and much-needed capacity to the region’s brokers.
5 October 2021
New Dawn Risk Group is delighted to announce the launch of its new European subsidiary, New Dawn Risk (Europe), headquartered in Malta. Like its parent company, New Dawn Risk (Europe) focuses on financial and professional lines. The new business will not only directly serve the growing financial and technology services industries in Malta but will also have the capacity to deliver solutions for New Dawn Risk’s global clients who have European operations with complex financial lines requirements.
The new European operation will be led by Elizabeth Grima and Tom Malcolm, respectively appointed as Senior Executive Officer and Managing Director, assisted by Joseph Rizzo who has been in the insurance sector for more than 30 years.
Max Carter, CEO of New Dawn Risk Group said: “The market for professional and financial lines is facing challenges on several fronts, as pricing continues to harden, and the complexity of placing risks increases. Our group has seen significant demand for our services internationally, and as a result we are delighted to be able to bring our offering to market in Europe; both in service of our larger global clients and to support the in-market requirements of Malta’s own financial services industry.”
Elizabeth Grima, Senior Executive Officer, New Dawn Risk (Europe), commented: “Our offering in Malta will be exclusively wholesale, working with local brokers to provide them and their clients with additional (and much needed) capacity to service larger and more complex financial lines risks. New Dawn Risk Group is one of the largest independent specialist brokers servicing professional and financial lines business around the world, and it is great to have access to that team on the ground in Malta.”
Notes to Editors Established in 2008, New Dawn Risk is a specialist insurance broker providing dynamic advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims.
02 September 2021
New Dawn Risk Group Limited, the international specialty insurance broker, announced today the appointment of Angus Simpson as a non-executive director.
Max Carter, CEO of New Dawn Risk, said: “We are delighted to welcome Angus Simpson to our board. He brings with him a rare depth of board-level experience in the independent London market broking sector, and we have no doubt that he will provide valuable insights and support to our management team. New Dawn Risk is strongly positioned to become an increasingly influential participant in the specialty liability market, and Angus will be a major asset in helping us to achieve this.”
Commenting on his appointment, Angus Simpson, said: “I am hugely excited to be joining the Board of New Dawn Risk at what is, unquestionably, a time of immense opportunity for specialty, privately held, independent brokers in the London market. New Dawn Risk is committed to broadening the range of products and services that it can offer to its clients and is now very well positioned to grow its business over the next few years.”
Angus has a wealth of experience with a career spanning 35 years in the insurance industry. He has set up two businesses, an insurance broker and a Managing General Agency underwriting specialist personal lines business. Earlier in his career, he was a director of a Lloyd’s Broker and ran the Central Broking team at Aon Risk Solutions. Angus has also served as a non-executive director for Kite Warren and Wilson Limited, a Lloyd’s insurance and reinsurance broker.
Notes to Editors
Established in 2008, New Dawn Risk is a specialist insurance broker providing dynamic advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims.
In 2021 New Dawn Risk Group set up New Dawn Risk (Europe) Limited as a specialist insurance intermediary responsible for servicing European and Maltese brokers. We focus on placing complex liability and other speciality insurance and reinsurance risks with insurers in all major markets including Lloyd’s of London. Please follow the embedded hyperlinks above for more information.
We are currently looking for a permanent full-time Junior Account Executive to join our rapidly growing business. This role reports directly to the Senior Executive Manager.
Key activities and responsibilities:
Desirable skills and qualifications for an Account Executive:
Key attributes and experience:
The successful candidate will most likely have a degree and will have some business experience. Whilst previous insurance experience would be of help, particular with a Professional Indemnity focus, this may be substituted by experience in other areas of insurance where the candidate is able to demonstrate that they have the requisite aptitude to learn quickly and understand key financial as well as business mechanics.
The candidate should be able to demonstrate real examples of independent thought and action and should exhibit an aptitude to understand complex instructions and willingness to ask for guidance where necessary.
We would not rule out a bright, astute and ambitious graduate with some experience who has a mature mindset, an appetite to learn the ropes to start a career in insurance broking.
This position represents an exciting opportunity for a bright individual to take a position of responsibility early in their career, to learn a great deal about the business of insurance very quickly, and to become a key member of a fast-growing team with a real opportunity to take an accelerated career path.
Personal qualities:
Compensation package:
The compensation package for this role will include a competitive salary and private health insurance.
I am a Management Liability and Financial Institutions Broker at New Dawn Risk. My team specialises in the placement and negotiation of Directors’ & Officers’ Liability and Financial Institutions Insurance, primarily from the Middle East and the US.
There is a type of insurance called Spooksafe Insurance which provides coverage in the event that you are attacked by a spirit, werewolf or vampire. One woman with this insurance died after she was allegedly thrown over the banister of her home by a poltergeist. The insurer concluded this was a valid claim and paid out $100,000.
I joined New Dawn Risk just after graduating from Bristol University with a BSc Geography degree.
I have co-hosted two New Dawn Risk virtual internships with my colleague Amelia Acreman. Both were aimed at educating school and university students about insurance basics and helping them to access the industry.
Over lockdown, I took up guitar and spent the vast majority of this period learning the opening to “Do I Wanna Know” by Arctic Monkeys. Expecting a band to snap me up in the coming weeks.
New Dawn Risk has today launched its latest white paper on insurance for the US legal cannabis, CBD and hemp markets. The 2021 report is called “Opportunity knocks at last in the US cannabis insurance market”.
Download the white paper here.
Since the publication of the previous report in 2020, US sales of medical and recreational cannabis have grown exponentially, reaching $17.5 billion in 2020, a 46 percent increase from 2019. In addition, the legislative landscape in the USA has been transformed by the arrival of the pro-cannabis Biden presidency, supported by a Democratic majority in both Houses.
A new CLAIM (Clarifying Law Around Insurance of Marijuana) Act has been introduced to the Senate, alongside the parallel SAFE Banking Act, and both are expected to pass into law by the end of 2021. This will at last permit insurers to work with the cannabis industry legally; and will also reduce some of the insurance risks that previously dogged the industry. For example, D&O cover will become a legally available option, and marijuana businesses will be able to regularise their banking and cash operations.
The updated white paper examines the key drivers of growth whilst exposing both the potential premiums and the size of the insurance gap for the cannabis industry in the US. Headlines include:
Max Carter, CEO of New Dawn Risk, commented: “The legal and regulatory environment of the cannabis industry has transformed over the past year.
“The changing attitude towards the cannabis industry, and new State and Federal legislation present an exciting opportunity for insurers to work with growers and sellers. With legalisation of banking and insurance, the door seems likely to open to what could be a $1bn premium market.
“On the consumer side, cannabis was deemed an “essential business” during the Covid-19 pandemic, and the growth of the sector seems inexorable. New Dawn Risk is committed to working with carriers and clients to share knowledge and insights to help identify and deliver cover for this untapped market.”
Notes to Editors
Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims. 95% of our business emanates from outside the United Kingdom.
The article below, by Nicky Stokes, Head of Management Liability and Financial Institutions at New Dawn Risk, was originally published in Middle East Insurance Review in May 2021.
There are signs that significant changes are afoot in the litigation environment in the Middle East - and this could have an impact on the directors and officers insurance market.
The market for directors and officers (D&O) insurance in the Middle East is in something of a state of flux. Historically, regional demand for the product has been relatively limited due in part to the proliferation of large, affluent, family-owned private companies in the area who have simply not seen the need for this type of risk transfer solution. With demand for D&O insurance low, pricing of the product has been relatively cheap, and it has been viewed as something that is a nice-to-have rather than a necessity.
Furthermore, the litigation environment - a potential key driver for claims to be brought against directors and officers - has been comparatively benign in the Middle East. However, there are signs that significant changes are afoot.
Regulatory developments
Up until recently, there had been a patchwork of litigation regulation across this region. But as Middle East states look to align with global standards and reporting requirements, the regulatory burden is increasing. In Saudi Arabia there is a massive drive to regulate the financial services industry as part of the government's National Transformation Plan 2020 and Saudi Vision 2030, designed to reduce the kingdom's dependence on oil, diversify its economy, and develop public service sectors. One key development - among a string of reforms under Vision 2030 - was the introduction of a Bankruptcy Law in 2018, to further encourage the participation of foreign and domestic investors by structuring the business legal framework and putting new regulations around businesses operating in the kingdom. This is having a direct effect on directors and officers as it makes it much easier to identify where obligations have not been met. Where duties are codified into law, it is much more straightforward to bring a claim.
In October 2020, the UAE government made various changes to its Bankruptcy Law to similar effect. In another development in December 2017, one which marked a first for the region, the Capital Market Authority in Saudi Arabia introduced a new class action regime for claims by shareholders of listed companies in the country. Last year, the first lawsuit filed under the regime was brought against the former board of directors of Al-Mojil Group, its senior management and its auditor for alleged violations committed during the subscription in the company's shares as part of its 2008 IPO. We should expect more to follow.
Claims drivers
In fact, the last few years have seen an increase in regulatory investigations across the region, which has changed the claims landscape for the directors and officers of Middle Eastern companies. Criminal or regulatory actions increasingly relate to allegations of financial irregularities or accounting misstatements. There has also been an increase in investigations into alleged fraud, money laundering and embezzlement by directors and officers.
Indeed, the wide range of D&O claims drivers that is apparent the world over is increasingly present in the Middle East. These include investor claims of mismanagement against executives of companies in distress to those that stem from criminal or regulatory action against the directors and officers. We have also seen claims stemming from third parties such as private equity investors alleging financial irregularities prior to their investment. And civil claims have arisen against board management individuals for alleged financial wrongdoing where the company has been unable to repay debt to a lender.
An international market
Meanwhile, recent events have underlined the global nature of the insurance market. A combination of increasing litigation and regulatory risks, more notifications, and profit pressures following years of premium reductions are prompting underwriters to carefully manage the capital they deploy for D&O risks. TI1is has diminished insurer competition fo1· buyers and resulted in higher rates and less favourable coverage terms for most buyers.
Rates for D&O insurance have been hardening significantly in the UK, and latterly in the US, for some time. But prices in the Middle East have followed suit. Increases at renewals are now starting at a minimum of 20% and can rise into triple-digits. Because the D&O market comprises a large number of international insurers, price changes in the region are being driven from a top-down perspective. Those international insurers that have been hit hard in terms of losses, in the UK and US for example, are looking to remediate their books elsewhere.
As insurers' appetite for D&O has diminished, this has led to a reduction in capacity. For example, an insurer that used to underwrite around $60m of Middle East D&O may now do no more than $10m. Last year we saw placements of $10m on the primary layer and $1Sm on the excess for D&O insurance. This year, placements dropped to around just $2m on the primary and $Sm on the excess.
These factors have led to some difficult conversations and pushback from buyers at renewals this year. For example, an insured who bought $75m worth of cover last year might have got a third of that for the same price. This has always been a price-sensitive market and, as a result, people are buying less cover than they have done in the past. We are starting to see a number of businesses that are clearly underinsured for the exposures that their directors and officers are facing, a trend which may store up trouble for the future.
Interesting times ahead
Looking ahead, the risks facing directors and officers in the Middle East are broadly in line with those that their counterparts are exposed to elsewhere in the world. Cyber is high on the agenda and there are a number of recent cyber events in Saudi Arabia that have hit both government ministries and petrochemical firms, generating significant losses with the potential to impact the D&O market. Saudi Aramco has seen an increase in attempted cyber attacks since the final quarter of 2019, which the company has so far successfully countered. However, the increasing magnitude and frequency of these incidents is a trend that is only expected to worsen over time.
It is unclear at this early stage, but it is likely that we will also see a string of claims against directors and officers as a result of the coronavirus pandemic. The situation is still evolving, but businesses in the Middle East and elsewhere should brace themselves for a likely flood of shareholder lawsuits. We have seen some massive share price drops, and if investors feel they were not fully informed about supply chain vulnerabilities or distribution problems they may choose to litigate. While there is no guarantee that these claims will be upheld, there is a potentially significant exposure to directors and officers in terms of defence costs.
Emerging risks
Potentially an even bigger pandemic-related threat to directors and officers in the Middle East and elsewhere is the ongoing recession. With the near-term economic and political outlook remaining uncertain, D&O claims resulting from company insolvency are likely to increase. Insolvency rates had already been increasing in certain regions prior to the pandemic due to slowing global trade and political threats.
Meanwhile, with COVID-19 vaccines finally being rolled out, dealmakers are hoping for an economic rebound and are targeting vulnerable or attractive assets. There has been a dramatic increase in the number of special purpose access companies - listed vehicles that are pre-funded by backers and set up ready to acquire a portfolio of businesses that look ripe for investment - and blank cheque companies. Anyone and everyone are looking to raise funds, which could lead to bad deals being negotiated and agreed in a rush to market. With rushed deals comes a very high chance of failure - leading to an uptick in D&O claims.
This would, without doubt, prolong the hard market cycle already being experienced, which could continue for another 24 months. Underwriters, brokers and insurance buyers are trackirig D&O developments in the Middle East closely. There could be tough times ahead.
The article below, by Rachel Cohen, Senior Treaty Broker at New Dawn Risk, was originally published in Insurance Day in March 2021.
The market is hoping that as Covid-induced losses start to come through, and reinsurance rates harden, it will drive further increases in underlying liability rates in the region.
Before the onset of the global pandemic and the subsequent lockdown at the end of March 2020, the reinsurance sector had certainly seen some hardening of rates in the January 1, 2020 renewals, compared to the recent past.
In the international casualty treaty sector, this hardening was more prevalent on loss-affected programmes. Reinsureds were achieving more and more increases in underlying rates, in particular on directors' and officers' (D&O) and the professional lines business, where increases were anything between 25% and 200%, even where accounts were claims-free. However, it could still be argued that rates were still not quite where they should be, mainly because of the abundance of reinsurance capacity in the market.
Modest rate rises
Fast forward to the recent January 1, 2021 renewals and it can be said that for the most part, casualty treaty reinsurers remain fairly subdued about the overall reinsurance rate changes that were achieved. There was certainly a hardening of rates, particularly on distressed accounts, but not the emergence of the hard market that many had speculated would finally occur post-pandemic.
In the Middle East, many cedants during the July 2020 and January 2021 renewal meetings told their reinsurers they were achieving underlying rate increases on bankers' blanket bond and D&O business for the first time in a long time. These rate increases range from +5% to +30%, which is considered significant for the Middle East.
This certainly brings a glimmer of hope that the United Arab Emirates (UAE) market is turning, even if that turn is in its very early stages. Even on general liability policies where rate decreases have traditionally been recorded year on year, cedants were reporting that rates were finally holding flat, which can certainly be described as an achievement.
These rate increases bring welcome news to those reinsurers who participate on proportional placements and therefore directly benefit from these increases. In addition to this, the treaties that New Dawn Risk places in the UAE continue to remain even more profitable because of the absence of significant casualty losses, certainly compared to London market placements.
It was also apparent, particularly during the recent renewal season, that reinsurers were holding firm on the ceding commission and profit commission levels on their casualty proportional treaty renewals; certainly no decreases were being granted to the reinsureds, and reinsurance rate decreases on non-proportional contracts were also rarely seen.
One key trend in the Middle East market at the moment is the growth in single-project professional indemnity (PI) business risks because of the increase in construction projects in the region. ·while rate increases are being achieved on this line of business, many reinsurers remain cautious about the extensive longtail nature of this line of business, and some are reducing capacity, since 10 years of extended reporting period coverage tends to be standard in the territory.
Covid claims expected
In terms of Covid-19-related claims, liability claims are typically long tail with a lag in reporting, so general liability and workers' compensation claims have not yet materialised. However, the prediction is there will be a significant rise in these loss notifications all over the world over the next few years.
Several outbreaks of coronavirus have already been linked to high-risk environments, such as gyms, hotels and cruise ships. There is a significant likelihood that all these environments will be sued for not taking proper care of their clients by either allowing them to enter against the government rules or failing to provide a Covid-19-safe environment, resulting in clients catching the virus.
The more of these liability losses that come to fruition, the greater the likelihood that underlying rate increases in the liability sector in the UAE will finally turn positive along with more hardening of reinsurance rates.
As a result of the fallout from the pandemic, closer attention is now being given to wording coverages and more questions are being asked in relation to any existing clauses in contracts that could be construed as ambiguous. Certainly, in the UAE, the majority of cedants are imposing the Covid-19 specific or communicable disease exclusions on all their new and renewal business. Most of our clients have informed us that they have not received pushback from their brokers on applying these clauses to the contracts, which is a great comfort for the reinsurers.
Finally, changes in the Middle East market continue, with insurers and reinsurers moving in and out of the Dubai International Financial Centre and some reinsurers making the decision to write the business out of their European offices instead going forward. In addition, new reinsurance capacity continues to be set up, with the capabilities to write Middle Eastern business.
As 2021 continues, time will tell if there will be an increase in casualty losses, particularly in relation to Covid-19, to continue hardening reinsurance rates or if new reinsurance capacities will continue to suppress this.
The article below, by Max Carter, CEO of New Dawn Risk, was originally published in Insurance Day in March 2021.
Underwriters and brokers alike must be more responsive and innovative when it comes to addressing client needs to repair London's reputation with regional and international clients.
Over the last year, the COVID pandemic has changed almost every part of the global economy, and insurance is no exception. Working online, with data held in the cloud, has proved robust and practical. Like other industries we have experienced a revolution in working practices, creating a new normal.
The signs now are that many firms will soon begin adopting a hybrid office/home model that should end up being just as effective and more efficient, adding back in that missing element of human interaction.
Beyond the purely practical, though, there are other areas where the past year has not gone as smoothly as we may at first have imagined. In some cases, we have, I believe, made the mistake of thinking that continuing to function in any way at all was a success, and we have failed to acknowledge that our clients require more than just the basics. In my view there has been resulting collateral damage done, and it will require effort on our parts to help our economic bounce-back.
Service standards
Firstly, it seems that to many the London market has appeared expensive and gained an unwelcome word-of-mouth reputation for delivering poor service to regional and international buyers over the past twelve months. Lloyd's Decile 10 remediation was already well underway when COVID hit and, as a consequence, London pricing was out of kilter with the wider market. It was a tricky time for clients to be suddenly unable to talk to their brokers/insurers face-to-face; and some important conversations were undoubtedly mishandled or avoided, simply because it is easier to ignore the hard yards when you are not physically present within a market.
Perhaps it would be more charitable to consider some teams were simply swamped and were finding everything was taking longer to work through (I wonder if this is subtle support for the old argument that face-to-face broking is more efficient for the underwriters, if not for the brokers). Response times to brokers certainly suffered through the second half of 2020.
To my mind, the consequences of this could ultimately be serious, because this sort of criticism soon ripples around the world. We cannot take our pre-eminence for granted. Clients who have been loyal to London for many decades now have alternative options available to them and could head for the exits if they continue to be faced with an expensive market that is hard to communicate with. We have an opportunity now to step up and demonstrate that our reticence over the last year was a covid-related blip, not a permanent step down or backwards, and we must take it.
What are the remedies for all this reputational damage? First (and urgently) both underwriters and brokers in the London market need to focus on being more responsive. It is bad enough having to give out bad news, but if the news comes late, the person giving the news is reluctant to engage, and overall service is also poor, we must ask ourselves why anyone would bother to come back to London next time, particularly as the market starts easing again.
Innovation
Innovation is also important to help create a step change in perception. All of us in the market need to work to rebuild our lost reputation by creating new and innovative products that seek to cover the business interruption risks caused by future epidemics (including Covid).
Organisations like the London Market Group (LMG) have a role to play too. We are in great need of a strong promotional campaign that reaches far into the international markets that feed into London and I applaud the LMG for its work in this field. Its "London makes it possible" campaign must now, more than ever, be our mantra around the globe: not just a slogan, but an approach to live and work by for our international market.
Underwriters also need more help in delivering upon this endeavour. Busy teams are cut too thin at present; this makes it hard to come up with smart, bespoke solutions. Insurers perhaps need to consider how to deliver digital underwriting better by staffing up on the underwriting support side. Moving to a more radical option, would it be so wrong for insurers to start publicly agreeing service standards for underwriting engagement and setting out to adhere to them?
Finally, insurers and brokers need to recover their teamwork, rather than trying to eat each other's lunch. Let us stop quibbling about commission, especially in a hard market, and look outwards to our clients. We all realise the market needs to squeeze costs out of distribution, but let us not do this until we have worked through these more pressing issues together.
We must work as one to rebuild London's reputation as a great insurance centre as the pandemic comes to an end.
New Dawn Risk Group Limited, the international specialist insurance intermediary, announced today the appointment of Manuel Sicard to lead the company’s expansion into Latin America.
Max Carter, CEO of New Dawn Risk, said: “Latin America is a dynamic and developing region that is experiencing growing demand for increasingly complex insurance products, translating into a broad range of opportunities for international reinsurers. Given that this is relatively uncharted territory for some, cedants and reinsurers alike need to know their broker can provide local specialist knowledge of the markets they are operating in. Manuel’s depth of experience in the region – spanning underwriting, broking and risk management – combined with the strength of the relationships he has built up over more than two decades working in the industry, means we are now able to offer clients a more engaging and valuable proposition in Latin America.”
Prior to joining New Dawn, Manuel was vice-president, financial lines at Guy Carpenter. He previously held a similar role at Willis Towers Watson in London. Earlier in his career he worked in Colombia as a reinsurance analyst for Allianz and a risk consultant at RE Ingenieria. He has an MBA from the University of Cardiff.
Notes to Editors
Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims.
What can we expect in 2021?
Silent cyber, also called non-affirmative cyber, is the unknown vulnerability in an insurer’s portfolio caused by any cyber risks that have not been explicitly excluded from policies where coverage was not intended to be provided.Whereas standalone cyber policies define clear boundaries for cyber cover, many traditional policies do not anticipate cyber risks; this does not preclude claimants filing claims, and courts agreeing with them, which could result in insurers paying certain cyber loss claims.
In July 2019, Lloyd’s mandated that all policies across all classes of business must explicitly clarify whether they provide cover for cyber risks by either excluding or affirmatively covering such exposures. They released a timetable for enforcing these measures, issuing four phases and pushing rollout every 6 months. The first phase, applied from 1 January 2020, addressed first party property damage policies. The second phase, from 1 July 2020, covered bankers blanket bond (BBB) and crime policies. The third phase, effective 1 January 2021, addressed professional indemnity (PI), D&O and other liability policies. The final phase will take effect on 1 July 2021, and includes lines such as marine XL, casualty treaty and employers liability/WCA.
With such a short timeline for insurers to become compliant, the industry has seen a trend amongst insurers of opting for umbrella-like cyber exclusions rather than offering affirmative cover when scrambling to meet these deadlines. This pattern has been clearly seen throughout phases one and two, and even the newly-implemented phase three. It is unlikely that we will see much of a difference in phase four come July.
The lack of clarity provided by Lloyd’s when implementing overarching policy mandates has unintentionally created an echo effect, and the gaps in coverage once attributed to silent cyber are now still very evident, but just no longer “silent”. As carriers continue to exclude coverage, the only solution is for policyholders to pursue standalone cyber, which can cover gaps and may offer coverage clients had not previously considered. In 2021 it will be more important than ever to determine whether a separate cyber insurance policy is required and to meticulously ensure appropriate coverage is put in place.
James Bullock-Webster
The article below, by Tom Malcolm, Head of UK Broking at New Dawn Risk, was originally published in Insurance Day in January 2021.
The confidence of insurers in building regulations as a protection against large-scale claims was undermined by the failings the Grenfell Tower fire investigation uncovered.
While all professional indemnity insurance has faced a hardening market during 2020, last year the sub-category of architect’s professional indemnity saw the culmination of four years of tumult, resulting in immense challenges for architects, their brokers and insurers.
The difficulties of renewing and maintaining adequate professional indemnity insurance for architects has caused industry uproar and a swathe of negative publicity within that professional community. The Royal institution of British Architects (Riba) has called on the Ministry of Justice to review the situation but, as yet, no solution has been found.
The problem began with the 2017 Grenfell Tower fire. The tragedy and subsequent Hackitt Report called into question the safety of accepted design and building practices for high-rise buildings, including the use of many types of common cladding, fire safety management and the principles and responsibility for the sign-off of any building as being “safe”. What this brought to the fore were a number of systemic issues with the UK’s building regulations regime.
Tearing up the rulebook
Previously, any architect’s insurer could rely on the standards and efficacy of all architects’ work being guaranteed by adherence to building regulations, but the confidence of insurers in this as a protection against large-scale claims was undermined by the failings the Grenfell Tower tragedy uncovered, including a lack of any clarity as to who was ultimately responsible for a building’s safety.
Since 2017, that uncertainty, coupled with the impact of many years of underpriced policies and combined with multiple claims post-Grenfell, has seen many insurers withdrawing from the professional indemnity market altogether. This has caused demand to far outstrip supply, especially following the Lloyd’s review of underperforming syndicates in 2018, which further increased insurer exits from the segment as they looked to focus on more profitable lines of business.
In early 2020, there were government moves afoot to rewrite the UK’s buildings regulations regime to help improve the situation, but Covid-19 has compounded the market’s issues by drawing governmental attention elsewhere, leaving unresolved issues and resulting in continued uncertainty.
Catastrophic pricing
Much of the impact of all of this has been price-related, with subsequent negative publicity for insurers attached. In May 2020, Architects’ Journal highlighted professional indemnity renewal prices rises of up to 800% and campaigned for government support on this issue for the industry.
By October Riba had issued a further statement, detailing its concerns about the significant restrictions of cover that had begun to be common. During the autumn 2020 renewals, it was reported fire protection was excluded from almost all available architect’s professional indemnity policies.
Insurers have also put strict restrictions on “any one claim” limits; as well as excluding any buildings with aluminium composite material cladding from their cover – a significant restriction for commercial architects.
Restrictions in cover also limit the types of work architects can carry out (for example basements, swimming pools, anything firerelated), meaning some bread-and-butter project types are becoming close to uninsurable.
The Architects Registration Board (ARB) head of professional standards, Simon Howard, recently spoke to Architects’ Journal about the difficulties architects were experiencing in acquiring adequate insurance at an affordable price. He suggested these could prevent some firms operating, saying: “No architect should purchase a professional indemnity policy that fails to provide them with adequate cover for the work they do – and that includes fire safety cover. It is clear that if a firm is employed as a fire safety consultant and the policy excludes these activities, then the policy isn’t fit for purpose.”
The virtually universal restriction on protection for fire safety and strategy in professional indemnity insurance policies issued to architects has led to mistrust of insurers, while insurers have been obliged to take defensive action in response to brokers seeking quickly to “block notify” all projects that may in the future face a challenge to their fire strategy. The ultimate outcome in some cases, depending on the breadth of the fire safety exclusion, has been some firms have had to cease practising.
No quick resolution
Looking ahead to 2021, it seems unlikely any of these problems will be quickly resolved. Architects are heavily exposed to the vagaries of the economy. If GDP falls just 1 %, it .is normal to see a contraction in the architectural market of up to 12%, as large projects are taken off-stream by developers until the economic environment improves. With Covid-19 looking likely to bring a much larger contraction in GDP than 1 %, insurers will, therefore, be extra cautious in the risks they are willing to underwrite this year. The insurer supply is not going to increase and, as a consequence, it is unlikely prices will stabilise in the near term, at least.
Perhaps the only solution is for all parties to work together. Riba is seriously concerned about the rising costs of professional indemnity insurance and prevalence of fire safety exclusions, which pose significant risks to architects’ practices, clients and the public.
The institute has suggested all sides, convened by Riba, should continue to engage closely, including the insurance industry, construction lawyers and other professional bodies, and put pressure on the Ministry of Housing, Communities and Local Government and the ARB to broker a solution that supports architects.
We remain sceptical such an outcome is likely and, in the meantime, look ahead to navigating another challenging year in a sector that makes the rocketfuelled directors’ and officers’ liability market seem stable and positively dull by comparison.
The original article can be viewed here
I lead the Technology, Media and Cyber team at New Dawn Risk. Our team is responsible for structuring and placing liability programmes for a variety of US and International clients.
Wow, hmm I’m not sure I have any favourite insurance facts. But I recently re-watched Woody Allen’s Love and Death and chuckled when he said “There are worse things in life than death. Have you ever spent an evening with an insurance salesman?”
I served 11 years in the British Army, completing several operations tours (Iraq & Afghanistan) before having a career change. I started my broking career at Paragon in 2015 and joined New Dawn Risk in 2019.
I am an ambassador for a wonderful military charity called The Not Forgotten Association https://thenotforgotten.org/. They do a huge amount of good work supporting our veterans and I’m proud to be associated with them.
My wife and I are blessed to have three children (8,6,3); their needs aren’t entirely compatible with hobbies. That said, I love skiing, cooking and travel. My new year’s resolution is to take up Judo.
The article below, by Jonathan Franke, Tech, Media and Cyber Broker at New Dawn Risk, was originally published in Insurance Day in January 2021.
The market must be more proactive in terms of understanding and reviewing policy wordings, to accommodate the new exposures relating to 5G-enabled products and technologies…
The next 12 months will see the scaling up of the worldwide roll-out of 5G networks, with North America, Europe and East Asia leading the way.
The importance of 5G has grown since the onset of the pandemic. With much of the world switching to remote working and with the prospect of home offices becoming the new norm, businesses and individuals are requiring faster, more reliable data speeds. Companies are also adapting to network management across multiple locations to continue operating efficiently.
When it comes to data transmission and storage, the majority of the developed world will soon swing towards 5G, as we continue to transition to a progressively cloud-based economy, and that change brings with it a brand new cyber threat landscape – one that is yet to be clearly understood.
Before considering the insurance challenges 5G brings, it is important to understand exactly what 5G is. It builds on the evolution and development of its predecessors, 3G and 4G, allowing societies to smoothly transition into the increased usage of smart devices and offering faster wireless browsing and streaming. According to Ofcom, 5G is “much faster than previous generations and also offers greater capacity, allowing thousands of devices in a small area to be connected at the same time”.
The 5G roll-out will continue to enhance the expansion of the internet of things (IoT) in almost all industry sectors and many homes, as more and more smart devices connected to the internet become essential equipment. While this technology explosion is welcome, not all manufacturers of IoT devices have made cyber security a priority within their business plans.
Globally, there are now billions of interconnected devices, all communicating with each other; these devices have wide-ranging and differing security controls, leading to an unimaginable number of potential vulnerabilities for criminals to exploit. A lack of shared security standards for IoT devices means network breaches and hacking have the potential to travel widely and loopholes occurring between two unmatched systems could easily be exploited by organised criminals.
All this means criminals have already recognised an opportunity to access seemingly secure networks almost undetected. Consumer and individual data could be compromised simply by having a domestic smart meter to measure electricity and gas usage. However, even more significantly for business insurers, 5G is being used in various industry sectors, from farming to manufacturing.
Investment in monitoring
Pre-5G networks have fewer “traffic points” and this means security monitoring and scanning is simpler, less time-intensive, and less expensive for businesses. However, 5G’s dynamic software-based systems have led to a huge increase in traffic points, and to take account of this, both business-to-business and business-to-consumer companies must prepare to invest in more sophisticated and increased levels of monitoring of their networks, controls and technology.
Companies will need to place more and more reliance on IT experts to ensure adequate protection is in place, in spite of a widening IT skills gap. And they will have to do so at speed – planning for the increased risks associated with 5G should already be well developed. Those who have taken their eye off the ball, perhaps distracted by adjusting their operations to cope with Covid-19, run the risk of increased vulnerability.
The same applies to cyber and technology insurers. They have a responsibility to be 5G-ready too, in terms of making sure their cyber insurance offerings are up to speed and they are providing their clients with adequate protection. It is also a responsibility for insurers to ensure their breach response providers are well informed about the developments and roll-out of 5G, as well as being able to respond even quicker to incident notifications and to start negotiations in the case of complex ransomware demands.
In 2021, we will see cyber insurers and buyers scrambling to be ready for the roll-out of 5G; wordings are likely to change, and coverage could be challenged. Some better-informed and more proactive insureds may start to enquire into manuscript wording to cover the threats relating to 5G-enabled products and technology; it is up to insurers to understand these threats and to learn how to respond to these questions before clients come knocking.
This could make 2021 an even tougher year for this already challenged class. A new and unexplored threat is likely to unsettle insurers and it also poses the questions of how new or changed risks should be rated on a premium basis. Given an increasingly litigious and claims-active cyber sector, we would expect rates to increase and possibly capacity to constrict for new business in the year ahead and 2021 could be a difficult year for cyber insurers and buyers alike.
The original article can be viewed here
Moves come as clients demand alternatives to ‘big brokers’
New Dawn Risk, the international specialist insurance intermediary, today announced the launch of a new division focused on the UK market. It will provide liability and specialty solutions direct to insurance buyers, as well as partner with UK regional brokers looking for a bespoke and specialist service. The new offering will mirror New Dawn’s existing offering for international businesses.
Max Carter, CEO of New Dawn Risk, said: “At the moment in the UK market there is clear demand for an alternative to the larger broking houses and our new division will bring New Dawn’s independent, high-touch and tailored approach to the UK for the first time. Many businesses that need insurance are suffering the effects of a difficult and uncertain trading environment, while broker consolidation and soaring rates in some classes bring opportunities for specialists to make a difference for particular groups of buyers.”
Tom Malcolm, Head of UK Broking, said: “Now, more than ever, the UK market is crying out for brokers that have the requisite skillset and expertise to steer businesses through these challenging times. Our newly established UK division is well set to meet these demands via our team of product specialists who put client service at the core of everything they do.”
Notes to Editors
Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims. 95% of our business emanates from outside the United Kingdom.
For further information contact: Victoria Sisson, Luther Pendragon, +44 7941 294872
By Aditya Singh, Treaty Broker at New Dawn Risk
From April 1st 2020, India introduced a new version of its state-subsidised agricultural insurance programme. Most importantly, contracts changed from one-year renewals to every three years.
It will be interesting to see how the treaties have performed over the last year and if there will be any corrective measures taken by their treaty leaders at 1st April 2021.
The past two years have seen significant losses (floods, heavy rain), so insurers and reinsurers are feeling the pinch. Whilst they understand that the government scheme is designed to help the farmers, there needs to be a clear route to profit, even if modest, for the insurance industry. In the bigger picture, reinsurers are unhappy with the instability of the Indian agricultural scheme and would prefer to have the ability to view the business as a long-term strategy instead of seeing new rules introduced so frequently, wreaking havoc with their planning.
That said, we still anticipate new capacity coming into the market over the next few years. The large volume of the underlying business continues to attract some of the bigger reinsurance players, who are looking at expanding their specialty lines sectors.
In our view, upside remains. Given that market penetration is still very low, we continue to believe that the Indian crop market will sustain its growth of 2020, in spite of current rate challenges.
Reinsurers are no longer participating on a market-wide basis, and are choosing to only work with cedants that have a strong understanding of the local agriculture market and are serious players who have had a consistent strategy over the last three years.
The main challenge is consistency. The scheme has changed drastically in a very short space of time. However, the introduction of more scientific approaches and systems will definitely aid the scheme in the long-run, and we foresee crop performance data collection and loss analysis being facilitated through increased digital adoption. Overall, we believe 2021 will be a positive year for India’s crop scheme participants, in spite of enduring challenges.
By Jonathan Franke, Tech, Media and Cyber Broker at New Dawn Risk
2021 will see the scaling up of the worldwide rollout of 5G networks, with North America, Europe and East Asia leading the way. 5G’s importance has grown since the onset of the pandemic, with much of the world switching to remote working and requiring faster, more reliable data speeds and network management in order to continue operating efficiently.
As we continue to transition to a progressively cloud-based society, when it comes to data transmission and storage, the majority of the developed world will swing towards 5G, which brings with it a brand new cyber threat landscape that is yet to be understood.
The rollout of 5G will continue to enhance the expansion of the Internet of Things Age in almost all industry sectors and many homes, as more and more smart devices connected to the internet become essential everyday equipment. This poses an explosion of vulnerability avenues for criminals to exploit seemingly secure networks almost undetected.
Both B2B and B2C companies must prepare to invest in more sophisticated and increased levels of monitoring of their networks, controls and technology. They will place more and more reliance on IT experts to ensure adequate protection is in place, in spite of a widening IT skills gap. And they will have to do so at speed – planning for the increased risks associated with 5G should already be well developed. Those who have taken their eye off the ball, perhaps distracted by adjusting their operations to cope with COVID-19, run the risk of increased vulnerability.
The same applies to cyber insurers. They have a responsibility to be 5G-ready too, in terms of making sure that their cyber insurance offerings are up to speed and they are providing their clients with adequate protection. In 2021, we will see cyber insurers and buyers scrambling to be ready for the roll-out of 5G; wordings are likely to change, coverage could be challenged, and we should expect some related upheaval.
By Max Carter, Chief Executive Officer of New Dawn Risk
The combination of a perception that insurers are looking to ‘wriggle out’ of paying covid-related business interruption claims and general insurance premiums rising as a result of hard-market reinsurance rating pressure will further dent consumer confidence in the value of insurance. Back in 2017, a survey by comparison site Claims Rated[1] found that only 37% of younger consumers (aged 16-29) believed that an insurance company would pay out in the event of a claim. The PPI scandal still lingers in the memory of many, and rising general insurance premiums over the past couple of years have continued to compound the issue. In specific sectors, such as the construction industry, struggling with massive liability insurance premium increases and additional exclusions in the wake of Grenfell Tower, confidence in the value of insurance has fallen even lower.
We predict that commercial SME buyers will be more inclined to allow non-mandated insurance to lapse as they struggle with increased financial pressures from the impact of covid, justifying their decisions on the basis that insurers try to avoid claims in any case. Purchases of newer products, such as cyber insurance, will almost certainly fall off as well. It will take an industry-wide coordinated campaign to rebuild consumer trust in the industry.
[1] https://www.insurancetimes.co.uk/only-half-of-british-consumers-trust-insurance-companies-to-pay-claims/1425151.article
By Nicky Stokes, Head of Management Liability and Financial Institutions at New Dawn Risk
In what has been the most unpredictable year ever, the road for D&O and other management liability classes has been particularly bumpy. In summer 2020 many in our industry had hoped that by the end of the year life would have been returning to ‘normal’, with the main concern being the ongoing hard market, driven by years of insufficient rates, under-reserving and inadequate retentions.
But Covid-19 was having none of that. The virus bit back, and a second wave wreaked even more social and economic havoc, leaving a swathe of companies financially weakened, with many still trading under significant restrictions.
With a Covid-19 vaccine finally here, we predict an economic boom in the US – private-sector capital-raising is already at unprecedented levels. We are seeing an increase in the number of SPACs* or ‘blank cheque’ companies popping up; it feels like anyone and everyone is looking to raise funds. This will almost certainly lead to bad deals being done in a rush to market.
With rushed deals comes a very high chance of failure, inevitably leading to D&O claims. This could extend the hard market cycle for a further 24 months. We predict tough times ahead for clients and brokers who buy D&O in 2021.
*Special Purpose Acquisition Company – this is a listed vehicle that is pre-funded by backers and set up ready to acquire a portfolio of businesses that look ripe for investment.
By Rachel Cohen, Senior Treaty Broker at New Dawn Risk
2021 will see casualty treaties impacted by an accelerating hardening of reinsurance rates, restricted terms and conditions, and reduced capacity as the losses from Covid-19 continue to bite.
There are already several US D&O class actions related to Covid-19 but liability claims are typically long-tail with a lag in reporting, so general liability and workers’ compensation claims related to Covid-19 have yet to filter through. However, we predict that there will be a significant rise in these loss notifications starting in 2021 and continuing over the next few years.
Several outbreaks of coronavirus have already been linked to high-risk environments, such as gyms, hotels, casinos, care homes, cruise ships or food/meat processing plants. There is a significant likelihood that all these environments will be sued for not taking proper care of their clients, either by allowing them to enter against the government rules, or by failing to provide a Covid-19-safe environment. The same situation will apply to workplaces, resulting in a rise in employers’ liability / workers’ compensation / employment practices liability claims, due to companies not taking the adequate steps to make their workplaces Covid-19 safe or forcing their employees back into the offices unnecessarily or against their will.
There are already liability losses affecting cruise line companies where passengers brought the Covid-19 virus back onto the ship after a day trip, as staff did not adequately assess them before allowing them to re-embark. We expect more of these claims to come to fruition within the next year or so, with a knock-on effect in terms of pricing and coverage for reinsurance treaties.
I am the business development and marketing manager for New Dawn Risk, responsible for everything from brand awareness and content creation to maximizing engagement opportunities for each of our broking teams.
There are so many weird ones, but probably the fact that America Ferrera's smile is insured for $10 million!
I'm American, born and raised in "the South". In 2019, however, I traded my cowboy boots for a kilt and left the USA to pursue a master’s degree up at the University of Glasgow in Scotland. Up until my big UK move, I served as the Director of Marketing at a wealth management company in Raleigh, North Carolina.
I have a BA in Creative Writing from North Carolina State University. I used to think one day I might write a book, but now I’m very positive that I’m better suited for shorter pieces…. typically ones that stick to a 250-character limit.
Outside of work, I used to enjoy traveling - but the current conditions have pretty much tossed that hobby out the window. These days I spend most of my time enjoying walks through Clapham Common, listening to true crime podcasts, and cooking up any dishes that only require some gut instinct and a large handful of garlic.
New Dawn Risk’s report casts light on the improved prospects for international firms as India aims to deploy drones, satellites and mobile technology in an effort to cut insurance costs
Download the white paper here.
Singapore, November 2nd 2020: Lloyd’s broker New Dawn Risk has today launched its new report: Technology brings new opportunities for India's crop insurance scheme
The report details changes that have been made to the government-sponsored scheme during 2020, which are designed to make it more efficient and ultimately more attractive for the nation’s farmers and for participating insurers. These include the introduction of a three-year contract for insurers; and strict rules to both prevent delays in claims handling and avoid moral hazard.
The centre point for change, however, is the introduction of a range of new technologies, including a mobile portal, and the use of sophisticated drone and satellite technologies. All of these are designed to allow automated handling of the many claims that the scheme generates, and, ultimately have the power to transform the profitability of the scheme for insurers and reinsurers.
Contributing to the report, the Agricultural Insurance Company of India commented: “With the advent of new concepts in agriculture, the scope for crop / agriculture insurance in India is vast. The main challenge is consistency. The scheme has changed drastically in a very short space of time. Reinsurers believe there is ample opportunity but only if they decide to commit to this product for the longer term and take a long-term view despite the changes."
Max Carter, CEO of New Dawn Risk commented: “India could certainly see new reinsurers entering its state-sponsored agricultural insurance market if costs were driven down for the local insurers, who have previously borne heavy administrative and operating costs.”
“The increased use of satellites and drone imagery technology and adoption of high-quality mobile apps to carry out CCE’s, remote sensing methodologies to assess crops and low-lying satellites (LEOs), means that India has taken positive steps towards increasing efficiency and reducing costs of administration. We hope that, with such positive news, our guide will be a useful source of information for international reinsurers who might consider participating in this refreshed scheme.”
For more information: Victoria Sisson, Luther Pendragon, +44 (0)7941 294872
London, October 27th 2020: The London chapter of PLUS (the Professional Liability Underwriting Society) met last week for a webinar to talk through the evolution of the market, in a session entitled “London, You’re on Mute! The New Normal”
In a sign of both the importance of the topic, and the growing usage of virtual events, a record 160 members of PLUS in both London and North America gathered to debate the topic alongside panel members:
The panel was moderated by Max Carter, CEO of New Dawn Risk.
Following the debate, the audience was asked for their views on how the market is currently working, and the results were positive. Of 160 members polled:
Max Carter, CEO of New Dawn Risk and Moderator of today’s PLUS webinar commented “This debate brought broad consensus that the way we work has permanently changed. For an industry that has not historically been known for thriving with technology, the market was able to adapt quickly and continue trading without missing a beat during 2020, and this has helped acceptance.”
“Relationships have been the hallmark of the success of the London Market in the past. If we are to have continued success in the future, we have to find ways not just of maintaining existing relationships in this new working environment, but of forging new ones.”
“The situation that we are currently facing is unprecedented; there is no established playbook or roadmap for navigating our way through it. That’s why events like this week’s PLUS debate are so important. We might not have all the answers, but reaching consensus on the questions we should be asking is an important step in the right direction.”
For more information: Victoria Sisson, Luther Pendragon, +44 (0)7941 294872
The article below, by Rachel Cohen, Senior Treaty Broker at New Dawn Risk, was originally published in the Middle East Insurance Review in September 2020.
Prior to the global pandemic and subsequent lockdown that occurred towards the end of March, the reinsurance sector had certainly seen some hardening of rates in the 1 January 2020 renewals, compared to what had been experienced in the past.
In the international casualty treaty sector, this hardening was more prevalent on loss affected programmes. Reinsureds were enjoying more and more increases in underlying rates, in particular on D&O and the professional lines of business, where increases were anything between 25% and 200%, even where accounts were claims-free. However, it could still be argued that rates were still not quite where they should be, mainly due to the excessive capacity in the market. As has always been the case, there was still a gap between the hardening of rates on the underlying business and the increase in the reinsurance pricing, although this gap was certainly becoming smaller.
Deteriorating results
In addition to this, the spotlight in the last six to 12 months before the pandemic had been shining brightly on the casualty lines of business, especially on the reinsurance side, which was never the case in the past. Lloyd's was starting to voice its concerns over the long-term profitability of this sector.
In 2015 and 2016, the softening of terms and conditions in the international casualty market was paramount. There was an abundance of capacity and an absence of any severity or systemic losses, which meant that rates were at the bottom of the cycle or were approaching bottom. Fast forward to 2019/2020 and it became very clear that there was a plethora of under-reserving of claims in the past years and the prices charged by reinsurers were unsustainable, meaning the profitable results in many reinsurers' casualty books were fast deteriorating.
Shifting sentiments
Although it is still very early days in terms of quantifying the impact of the pandemic on the underwriting results, it can certainly be said that reinsurers are more nervous than ever before. Their concerns over the challenges of insufficient reserving on casualty lines of business and inadequate pricing still remain, but now there is much more caution from reinsurers on writing any new business on their books, regardless if the casualty class in question is deemed to be potentially impacted by COVID-19 or not. This is because closer scrutiny by internal management is now even more prevalent across all reinsurance teams. There is not just scrutiny in terms of price, but much more close attention is now being given to wording coverages and more questions are being asked over any existing clauses in contracts that could be construed as ambiguous. It is still difficult to predict how the reinsurance rates will move as a result of the pandemic; in the next few months this will become much more apparent as reinsurers slowly begin to assess any potential pandemic losses.
Looking at the casualty treaty programmes for New Dawn Risk's UAE clients that have been placed in the last four months, the main challenge is to make sure reinsurers are comfortable with the reinsureds' assessment of COVID-19. Many questions have been posed to the client, for example are COVID-19 exclusions being put on the original policies? What exposures do they think they may have to COVID-19? Have there been any loss notifications so far? The main concern that reinsurers currently have is about picking up any additional exposures to COVID-19. Certainly, in the UAE, the majority of clients are imposing a COVID-19 specific exclusion or the communicable disease exclusion, both of which have been published by the Lloyd's Market Association. There are also questions being raised as to whether insureds will see this as an opportunity to pursue claims where they would not necessarily have pursued previously, as a way of attempting to recoup money lost as a result of the pandemic.
Increasing rates
In the Middle East, there has been an increase in the number of casualty losses in the last couple of years, and it remains to be seen if these losses will increase post COVID-19. For the first time in a very long while, independent of the pandemic, there are underlying rate increases being seen in the UAE on bankers blanket bond and D&O business, which may be a sign of things to come if reinsurers start to feel the impact of the pandemic.
For the major part, it seems the reinsurance industry has been largely unaffected by the lockdown. One of the most integral features of the insurance and reinsurance market is the relationships between brokers, reinsurers and clients. However, the lockdown has proven that business can just as effectively be placed in the market with all parties working remotely. Brokers have probably been impacted by the lockdown more than underwriters as negotiations are much harder to carry out effectively over a video call rather than face-to-face at the Lloyd's box or in a meeting room.
In addition, brokers who started 2020 very successfully with new business forecasts being met have now been faced with a big challenge in being able to meet their new business budgets for the next few months. Many businesses across the world will undoubtedly no longer be able to operate and others are no longer able to afford the big insurance capacity they previously purchased. In addition, premiums paid by clients to brokers and reinsurers are being delayed as businesses struggle with their cash flow.
Evolving loss picture
Business interruption cover given in property reinsurance covers is predicted to make up the majority of pandemic-related losses, while event cancellation and medical malpractice risks will also be impacted. There are also other policies, in particular cyber insurance, general liability or environmental policies, which may be available to meet third-party claims and therefore need to be considered.
Since the intention of D&O insurance is to protect a company's board of directors and senior officers against claims, investigations and associated defence costs in relation to their actions in the course of managing
the company, this means that many COVID-19-related claims are expected to fall within the insuring clause of the policy. In the US, securities class actions have already been filed against corporations and their senior management in relation to COVID-19. As an example, it is alleged by investors that Norwegian Cruise Line Holdings misled customers with unproven or false statements about COVID-19, enticing them to buy cruises. In addition, Inovio Pharmaceuticals made false and misleading statements about a COVID-19 vaccination that it was producing. In both actions, it is alleged that the value of the company's shares fell dramatically because of disclosures about the company's true positions.
The knock-on effect of these pandemic-related claims is that all underwriters will be considering policy wordings carefully going forward and the need for specific exclusions for COVID-19-related (or more generally virus-related) losses. Certainly in the D&O space, both in the UAE and on a global scale, insurers and reinsurers are imposing more restrictions, but more concerning is that they are already drastically reducing capacity, looking to push rates even further, and squeezing commission rates. This may be the sign of things to come at the 1 January 2021 renewals, particularly in those classes of business mentioned above that are potentially facing the most serious impact from the virus. As everyone knows, reduced capacity is a catalyst for a hard market. The heightened scrutiny on renewals will continue and there will certainly be some reinsurers who will be reserving their capacity for renewals only.
Continuing uncertainty
The extent to which reinsurers can withstand continued asset-side volatility and increased claims emergence remains to be seen. Reinsurers have started to de-risk their balance sheets by holding cash, which will have
a significant impact on investment returns. The two biggest Indian insurance companies, GIC Re and New India, have already been downgraded in the wake of the pandemic, and this possibly could mean a bleak future for other currently A-rated insurers and reinsurers across the world. These downgrades may certainly pave the way for opportunities for other prominent players in the market, as well as a chance for brokers to capitalise on their relationships with London and other leading international reinsurers.
The original article can be viewed here
Early September means Monte Carlo, and its physical absence has created a big hole in the 2020 reinsurance calendar, in spite of the excellent virtual initiatives that have been created.
The problem is that its absence will create a real communications gap. The opportunity to informally have discussions with contacts who we might otherwise never see, is an invaluable oil in the wheels of major reinsurance and capacity deals across the market. That face-to-face interaction not only helps bring together ideas, allows capacity providers and backers to set up opportunities for new business ventures and structure complex reinsurance programmes; but it also gives everyone an opportunity to get real transparency over barriers that might hinder the signing of deals that are underway.
Monte Carlo gives a window to brokers to extend negotiations and to get the most difficult deals done, and its absence could exacerbate some of the existing problems in appetite for new business among insurers and reinsurers in the London market at present.
Meanwhile, we have also now undoubtedly arrived at a hard market. Within New Dawn Risk’s field, (the casualty and specialty market), this means the reinsurers are in control and will, to a large part, be able to dictate terms to brokers and cedants. For brokers this means negotiations will become more difficult and commission will undoubtedly also be squeezed. Cedants must expect that prices will be flat at best, terms will be tightened, capacity reduced and the number of exclusions increased.
Reinsurers won’t be pushed into deals that don’t tempt them. In 2020 they will have the option to walk away. All of this behaviour is reinforced, not just by hardening pricing, but also by the increased focus on deal scrutiny by internal management. New business is harder for reinsurers to get across the line internally, and we see this lack of appetite as being particularly acute in the treaty market. No one, it seems, is currently actively looking for new treaty business. All in all, this reinsurance season could be challenging for all parties, and we will be working hard to mitigate this for our clients.
Max Carter and Rachel Cohen
New Dawn Risk Group Limited, the international specialist insurance intermediary, has announced it is entering into a partnership with Singapore-based SpecialistRe, to strengthen its reach and offering across China, Japan and South-East Asia.
Max Carter, CEO of New Dawn Risk, commented: “At this time of unprecedented change, Asia is powering growth in the global insurance industry. We have been tracking opportunities in the region for some time, and our new partnership with SpecialistRe – a well-established presence in Singapore – will help us to deliver experienced expertise for treaty reinsurance in the specialty space. As we further extend our international footprint so we can best meet the evolving needs of cedants and reinsurers, we will continue to maintain our core focus on professional indemnity, financial and specialty liability lines, as well as accident & health, both on the direct and on the reinsurance sides.”
SpecialistRe was originally established in Malaysia and has been operating in Singapore since 2015 as an advisory and consulting firm with a strong focus on treaty reinsurance. SpecialistRe utilises technology in association with its insurtech partners to provide fast and innovative risk transfer arrangements for its network of cedants across Asia.
Andrew Harris, Managing Director at SpecialistRe, said: “We are delighted to be partnering with New Dawn Risk at this time of evolving change in the reinsurance market. The ability to provide independent treaty capability in these specialist growth areas is an exciting development that will allow us to broaden the range of solutions we can provide to clients.”
Notes to Editors
Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary and a Lloyd’s broker providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims. 95% of our business emanates from outside the United Kingdom.
For further information contact: Victoria Sisson, Luther Pendragon, +44 7941 294872
By Nicky Stokes, James Bullock Webster and James Barrett of Lloyd’s broker New Dawn Risk
2020 has been a year of unprecedented turmoil across every aspect of life and this has been reflected in the insurance industry. While much of the immediate noise around claims has focused on business interruption insurance, there is a longer tail of impact that sits across the liability spectrum, most clearly seen in the classes of D&O, medical malpractice and cyber insurance.
A wave of D&O claims
Few classes will feel quite the same impact as directors and officers (D&O). It is easy to forget that even before the onset of the pandemic the D&O market worldwide had already been hardening over the preceding 18 months. This process has subsequently accelerated with D&O rates up 44% in the first quarter of the year according to a study from AM Best. Markets have been cutting capacity, increasing retentions by multiples and pulling out of some sectors completely, such as the hospitality and airline industries, as well as anything on the fringes of their core appetite.
The reasons are clear. A number of class actions have already emerged in the US against companies and their managers in connection with COVID-19 that may lead to claims on D&O policies.
Video conferencing provider Zoom, which has become a household name since the start of the pandemic, was hit with a class-action lawsuit by one of its shareholders, who alleged the company failed to disclose issues with its platform’s privacy and security.
Elsewhere, in one example in the pharmaceutical industry, biopharma company Sorrento Therapeutics and its officials have been accused of making misleading comments about a COVID-19 “cure”, which has triggered a securities class action lawsuit on behalf of investors.
Insolvencies and worker class actions to rise
Meanwhile, company directors will also face a number of exposures which could see them facing investigations, claims and prosecutions, for example, for wrongful trading, fraudulent trading, misfeasance or breach of fiduciary duty. We can also expect D&O claims from other sources. Management may be exposed to risks related to the way they have dealt with the process of putting staff into furlough, laying them off, or reducing their salaries and working hours.
Suppliers and creditors are also going to be affected. It's likely we'll see a number of speculative and opportunistic claims, especially in the more litigious environments. Although these may not succeed, the costs incurred in defending these claims have the potential to be substantial.
All of this translates into ever tougher conditions for new and existing purchasers. It is not difficult to see a future in which D&O insurance in certain markets is no longer available or affordable, or provides the coverage expected or required. The industry is going to have to think creatively to effectively manage and transfer D&O risk in a sustainable way. This may include greater use of self-insurance and captive insurers, but the D&O market needs to come together to pool its knowledge and experience to deliver innovative solutions.
Medical malpractice sees radical constriction of appetite
Smaller Allied Health and Long-Term Care facilities in the US had already been struggling with an increasingly poor claims record in the years before COVID-19. The market had also been impacted by historic underpricing of risk and the increased cost of claims due to social inflationary pressures. Those insurers who had marketed policies with a $0 deductible have suffered the most, resulting in adjustments to appetite.
In spite of this the market remained well-supplied, with many insurers at Lloyd’s still remaining positive and even looking to grow their Allied Healthcare books up until now. However, COVID-19 has now caused a rapid and dramatic shift in appetite among insurers, one which many smaller healthcare providers have yet to understand, but which will become clear to all during the next round of renewals.
Most insurance companies now expect a significant increase in medical malpractice claims relating to COVID-19, particularly for the smaller health providers, such as care homes, in-home care providers and hospices. There is an expectation that law firms are likely to look for opportunities to bring class actions against this type of care providers where, for example, it can be shown that lack of PPE may have contributed to some COVID deaths.
As a result, many insurers have become extremely specific about which risks they will consider. Many will only look at health providers in a state with a more benign claims record; or require evidence from the insured to demonstrate exceptional risk management procedures are in place to handle COVID exposures. Insurers in Lloyd’s have developed long lists of US states, drilling down to county level, of where they will not consider taking a risk. Examples of no-go areas include Cook County in Chicago, the five boroughs of New York and increasing concern for insureds domiciled in the state of New Mexico.
Other insurers have introduced COVID-19 exclusions (or communicable disease exclusions) on all renewals, including some of the recent series of wordings recommended by Lloyd’s itself. The more radical of these exclusions include refusal to provide cover for facilities that are doing any testing for COVID or are seeing any patients with COVID-19. Obviously, such exclusions cannot be applied to larger hospital groups (many of which, in any case, have their own captive insurers), but they are being put in place for smaller facilities, care home groups and in-home providers. Insurers placing these types of exclusions across their entire portfolio are luckily in the minority, but it is still a concern for the market.
Prices are also hardening, and current rate increases are already moving towards 15%. We expect rate increases to continue over the coming year, with insurers beginning to place reserves and prepare for the influx of COVID related matters to flood in over the next 12 to 18 months. All those in this category should expect to see double-digit price increases, depending on their individual situation.
The good news is that most insurance companies are at least not denying renewals to existing insureds, even if offering them at higher prices. However, choice of other insurers will be much reduced. In summary, the mid-tier and smaller healthcare provider medical malpractice market in the US is looking ahead to challenging times, and will find renewals, whether insuring internationally with Lloyd’s or domestically, much more difficult than they had previously.
Cyber stays steady as other classes see seismic shifts
Meanwhile there is happier news elsewhere. Cyber is one of the few classes of business that has not been significantly negatively impacted by COVID-19. Policies have not required significant rewording, and the London market has continued to see a flow of submissions, as well as enquiries for both renewals and new business from the domestic and international markets.
There has been some discernible caution from first-time buyers, reflecting the fact that cyber remains primarily a discretionary spend, unless a company is buying cover to meet the conditions of a contract. This has, however, been counterbalanced by the fact that that many companies have a majority of their staff working from home and may do so for the foreseeable future. This has led to concern about an increase in attempted cyber breaches. Companies also now typically have a heightened awareness of cyber criminality and are beginning to look for protection against it. They want to know that the right processes are in place in terms of monitoring, controls and supervision. Companies look at how to train their staff; and beyond this may also budget for an increased spend on cyber insurance.
One of the longer-term impacts of the pandemic has been the increased global tension with both China and Russia. While global leaders play politics with human lives in front-line locations such as Hong Kong, the cyber war continues to accelerate for everyone. It is widely acknowledged that the Chinese are exceptionally active in the cyber space, and that this is not just state-sponsored criminality. China, North Korea and Russia are all home to well-organised cyber-crime syndicates, who are likely to take advantage of fluctuating working locations and conditions caused by the pandemic.
Overall, the future of cyber insurance over the next year is likely to be linked to the bigger forces at play in the market. The huge claims arising from COVID in other areas such as BI are like to drive up prices and bring a harder market to all classes of business. With a global recession reducing total premium size, wordings are also likely to become tighter. This will be a shock to a class of business that has, until recently, suffered from an oversupply and soft pricing. Our expectation is that this will ultimately lead to an increase in cyber cover coming into Lloyd’s as other markets dry up, and buyers of scale find they need to look further afield.
In this area, as in almost all others, the impact of COVID-19 can ultimately be summarised in just a few words: a higher cost for the insured, with a restricted offering on cover. Challenging times are ahead for all, no matter what class of business.
—Ends–
Nicky Stokes is Head of Management Liability and Financial Institutions, James Barrett is Head of Professional Risks and James Bullock-Webster is Head of Tech, Media and Cyber at New Dawn Risk
New Dawn Risk Group Limited, the international specialist insurance intermediary, has announced the recent appointment of Charlie Mills as Senior Broker in its Management Liability and Financial Institutions team.
Max Carter, CEO of New Dawn Risk, commented: “At this time of unprecedented turmoil, much of the immediate attention in the insurance industry has been centred on business interruption insurance, but there is a longer tail of impact that sits across the liability spectrum, and will be seen clearly in classes including D&O. As they navigate their way through this challenging environment, clients need strong, close relationships with experienced and dynamic brokers who can deliver them the solutions they need.”
Charlie joins New Dawn from The Hartford where he was a Financial Institutions Underwriter. Prior to that he held roles at Tokio Marine HCC and Sompo Japan Nipponkoa. He holds an honours degree in Environment and Business from the University of Leeds.
Notes to Editors
Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims. 95% of our business emanates from outside the United Kingdom.
See below for Max Carter’s recent interview in Insurance Day
New Dawn Risk, the London market specialty lines broking firm, is more than ready to navigate its way through the challenges, and take advantage of the opportunities thrown up by a global insurance market environment which is being transformed by a combination of Covid-19, the rapid consolidation in the specialty lines broking sector, and a hard market which is becoming more entrenched.
According to Max Carter, the firm’s chief executive, operating in challenging market conditions is very much part of New Dawn Risk’s DNA. Founded by Carter in 2008 to focus on emerging risk areas in the US and on the emerging markets of the Middle East and Asia, the firm successfully traded its way through the global financial crisis, which he admits he did not see coming.
Launching the business, Carter says, was about fulfilling a long-standing ambition of setting up and running his own successful company. But it was a very nerve-wracking time, particularly in the autumn of 2008, when Lehmann Brothers collapsed, and there was a period of great uncertainty. “The crisis created a period of disruption and discontinuity in the global insurance market from 2009 to 2011/12, a time when a lot of business changed hands, rates hardened and capacity became scarcer,” Carter adds.
However, for those specialty lines brokers with a strategy, who were not too caught up by the rising sense of crisis, the dust settled reasonably quickly, he says. Companies still needed to buy insurance. Despite the financial pressures, there had not been mass business failures. “So, the client base was still there. The market hardened, particularly in our space, specialty liability lines, which is still the core business for the firm today. There were great opportunities on the professional indemnity and financial lines side of the business, and the crisis led to a raft of D&O claims. For any broking business looking for opportunities, there were plenty around,” he adds.
For Carter, there are a number of similarities between the market today, and the hard markets of 2002 and 2009. “There are other, important dimensions to this hard market which we did not have back then, but I think similar opportunities will present themselves both for insurers and for brokers like us that focus on specialty liability products – for which there will be a growing demand over the next three to five years.”
One of those dimensions is technology. Carter describes New Dawn Risk as a business that has embraced technology from the day it was founded. This was in a large part due to Carter’s involvement in the London market’s earliest attempts at electronic trading and distribution of specialty lines risks. He founded Iwix.net, a business-to-business insurance exchange targeting the specialty insurance marketplace in the US, in 1999 and later served as commercial director for Lloyds.com, the online trading division set up by Lloyd’s in the early 2000s.
As a result, New Dawn Risk has always been a paperless business, Carter says. “We have never had a filing cabinet in our offices. A few days before lockdown started, we were able, with almost no notice, to move out of our offices into a remote working environment. This was well before Lloyd’s shut down, and well before the government required us to do so. At New Dawn Risk, remote working presented no real change in the way things were getting done.”
He sees a number of challenges ahead for wholesale brokers in the London market, who came under significant pressure in 2019 as a result of the Decile-10 measures imposed on the market by Lloyd’s. It meant that last year was quite challenging for the wholesale broking sector in terms of new business. “We did not see as much new business coming into London as we had seen in previous years because the market hardened in London first, before it did in other global markets in the US, Asia and the Middle East.”
Proactive and innovative
Painful as it was, Carter’s view is that the market needed a nudge in the direction of improved profitability. But now, with the rest of the world having caught up, the situation has changed, he says. “Rates have been going up quite dramatically in the US, particularly in the D&O space. The volume of demand for capacity is increasing day by day. It is quite extraordinary. So, having had a relatively challenging year for new business last year, we are seeing some great opportunities.”
But to take advantage of many of those opportunities, wholesale brokers, particularly the smaller ones, will need to be a lot more proactive and innovative. Carter believes that London market wholesalers “will have to invest in broadening their knowledge and deepening their expertise in specialist product areas. That is going to be really important for our sector going forward.”
Wholesale brokers will also have to be both bold and nimble, Carter says, if they wish to be at the forefront of innovation in terms of new product development. “In this regard, the opportunities in the pandemic business interruption space will be tremendous. At New Dawn Risk, we are already looking at that as an opportunity.”
But, for the moment, in terms of emerging risks, the firm’s focus is on cyber and cannabis. Carter anticipates a tremendous demand for cyber cover because people will work more remotely than they have done in the past, and will continue to do so over the long term, which will present a host of new challenges to be solved by the insurance market. “And we intend to be ahead of the game in solving those challenges,” he says.
Carter sees the emerging cyber risk market as a great example of the need for innovation on the part of wholesale brokers. His experience with cyber goes back nearly 20 years to the time when he worked as head of business development for specialty lines at Beazley. Carter says when he joined Beazley in 2002, the company had 75 people working for it. “Within five years, it was a business with 800 employees. And that was really off the back of the hard market.” At this time the company was very much leading the market in terms of providing innovative cyber and other emerging risk covers.
Indeed, New Dawn Risk’s focus on cyber has seen it increase its presence in the retail market in the UK. UK business currently accounts for around 5% of New Dawn Risk’s overall brokerage, but the hope is that the firm’s new cyber initiative will help grow the size of that presence.
The demand for cyber cover in the UK is currently low, but Carter is confident that this will change. He describes cyber as possibly the most important cover that any enterprise could buy today, because of the absolute dependence of business on technology. “And it makes absolute sense that the risks associated with those technologies should be mitigated by insurance. We see cyber as a great opportunity. I have no doubt that, as a result of the changes in working practices that we are experiencing now, there will be a growing demand for cyber insurance as we come out of this crisis. Companies are beginning to realise the importance of technology to business continuity.”
There is, however, a great deal of work that still needs to be done by the insurance market in terms of raising awareness. The reality, according to Carter, is that so few businesses today buy cyber insurance in the UK, that the biggest challenge for brokers is persuading clients to buy the cover in the first place rather than competing with other brokers for business. Recruiting the right talent is now an absolute priority for both carriers and brokers, he says. “Who we hire will be critical for the development of the cyber insurance market over the coming years,” he adds.
The other interesting area for Carter is the risks associated with the production and use of cannabis. Indeed, New Dawn Risk has invested time over the last three or four years trying to understand the challenges and the opportunities. Unlike cyber, there is a great demand for insurance cover in the cannabis sector, but that demand is not being met, for all sorts of reasons.
This includes the fact that the US federal government still considers cannabis an illegal substance. “And yet, in 30 states, it is considered to be legal for medicinal purposes. And, in 12 states, it is considered to be legal for recreational purposes. If we, as an industry, can find ways to provide effective forms of cover that work within the constraints that currently exist and that addresses the concerns of companies who are operating in a space which is deemed illegal by the federal government, that will really be of real benefit. The cannabis sector is booming and could be worth $40bn in five years’ time. But it is also sector in which the companies operating in it are desperate for insurance cover, which they can’t get,” Carter says.
New Dawn Risk are currently working with a number of insurers to come up with a solution. “I am not saying we have got all the answers at this point. There is a lot of work that still needs to be done. But we are making progress.”
When Carter moved from US, where he was involved in setting up Beazley US, back to the UK in 2007, his remit was to develop Beazley’s international business, including in the emerging markets of the Middle East and Asia. “I felt very strongly that there was a tremendous opportunity. Things were happening in some of the Middle Eastern markets that really favoured a business like ours that was focused on specialty liability risks. The demand for D&O and professional liability was really growing. Prior to that, liability had not been an issue in the region. Businesses did not sue each other. But that was beginning to change. And liability cover was becoming an important part of insurance buying in the region. It was a very fertile time and we did a lot of business in the Middle East, particularly in the early days of New Dawn Risk.”
London opportunities
But it would have been foolish to ignore the opportunities that were in the US, particularly as it recovered the global financial crisis, Carter says. “We set up the business with a focus on emerging market opportunities, but we also included the new risks that were emerging in the US and being placed into London. “
Indeed, today, New Dawn Risk’s business very much reflects the decisions that were taken back then. “About half of our business comes from the US. The other half is international business, predominantly Middle Eastern and Asian reinsurance business. So, what we did in the early days is still very much in our blood today.”
Going forward, Carter is looking at new opportunities in the agricultural sector on the treaty reinsurance side in India, where New Dawn Risk is already well known. Latin America, where the firm has clients in Mexico, Columbia and Argentina, is another part of the world where Carter sees opportunities to expand. “But the reality is we have to operate within the constraints of our size. It is important that we don’t stretch ourselves too thin. By doing that, there is a risk that you can fail to provide the high level of service essential in our business.”
While the firm’s international business is very much focused on treaty than on facultative reinsurance business, more facultative opportunities are emerging as the market hardens and as the level of local capacity reduces. “In the short term, I am sure, we will see a growth in facultative business coming into London from international emerging markets. But our long-term strategy in the international reinsurance space is to focus on treaty business. We are seeing a number of new opportunities, particularly in Asia, and we are talking to insurance companies in places such as the Philippines, Thailand and Vietnam. Again, it is about making sure we are not stretched too thin on the ground.”
Carter’s vision for New Dawn Risk is to maintain its focus on professional indemnity, financial and specialty liability lines, both on the direct and on the reinsurance sides. “The plan is both to grow our international footprint over the coming few years, but at the same time to deepen our expertise and our capability to provide that high level of service that we believe is essential to success.”
He has no doubt that the way in which business is done in the market will change over the next few years as a result of Covid-19. “But, from my point of view, I think the most important thing that we must hold onto in London is that personal touch, the ability to maintain those personal relationships that allow us to get deals done and make business happen, even as we move into a much more virtual world of business. We have maintained the face-to-face model in the UK very successfully when most of the rest of the world has transitioned to something else. And that brings tremendous value which the market must not underestimate.”
Brokers and underwriters in the London market recognise the value that face-to-face model brings in terms of solving complex and challenging risk issues. “And, frankly, there is no better way of solving those issues than sitting down around a table or at a box in Lloyd’s and working through them. I just don’t think that the face-to-face element is going to go away.”
New Dawn Risk will be firmly rooted in the London market in the coming years, both physically and strategically, according to Carter. “I believe that the London market will continue to be the most important specialist re/insurance market in the world. I think that high volume, purely transactional business will become even less of a feature than it is now in the London market. Complex transactions that require deep expertise will continue to be done in London. To be clear, it won’t be the same market as it is today, but we want to be at the heart of this new London market. And that, as I have said before, will require us to focus on deepening our expertise in our chosen risk areas, have a better product knowledge and a better knowledge of our clients than our competitors.”
The transactional side of the new London market will be much more automated, according to Carter. “It already is. But for a wholesale and reinsurance brokers such as New Dawn Risk, it will come down to our expertise, our personal relationships with clients and our ability to be able to get deals done. Those factors will be central to our success in the next five years or so.”
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We would like to thank Insurance Day for giving us permission to produce the above article.
The article below, by Nicky Stokes, Head of Management Liability and Financial Institutions at New Dawn Risk, was originally published in Insurance Day on 15th July 2020.
2020 has been a year of unprecedented turmoil across every aspect of life but for the insurance industry, few classes will feel quite the same impact as directors and officers (D&O). It is easy to forget that even before the onset of the pandemic the D&O market worldwide had already been seeing hardening over the preceding 18 months. This process has subsequently accelerated with D&O rates up 44% in the first quarter of the year according to a study from AM Best, which forecasts triple digit increases in a post-COVID world, as insurers respond to increased litigation and emerging claims. While the accuracy of that prediction remains to be seen, there is no doubt that these are turbulent times.
A wave of claims
A number of class actions have already emerged in the US against companies and their managers in connection with COVID-19 that may lead to claims on D&O policies. Norwegian Cruise Lines and its directors are facing a claim brought by shareholders alleging that the company issued false or misleading statements to encourage employees to downplay the virus and keep pressure on customers to maintain bookings, endangering the lives of both customers and crew members. In the days after the claim was brought, the company’s shares fell by almost 53%, causing significant losses for shareholders. A similar class action has since been brought against another cruise ship company, Carnival Corporation. We should expect more to come.
But while the cruise ship industry was one of the first industries to see claims, it is by no means the only one. Video conferencing provider Zoom, which has become a household name since the start of the pandemic, was hit with a class-action lawsuit by one of its shareholders, who alleged the company failed to disclose issues with its platform’s privacy and security.
Elsewhere, in one example in the pharmaceutical industry, biopharma company Sorrento Therapeutics and its officials have been accused of making misleading comments about a COVID-19 “cure”. The firm announced in May 15 that it had discovered an antibody that had “demonstrated 100% inhibition” of the coronavirus infection. This led to a steep rise in the company’s share price but shortly after Sorrento was to make a U-turn to stress that it had “potentially” found a cure. The subsequent major dip in the firm’s share price triggered a securities class action lawsuit on behalf of investors.
Insolvencies to rise
It is still too early to call the depth and length of the recession but it is safe to say it could be the worst in living memory, even without the possibility of a second wave of COVID-19 and a return to a stricter lockdown, with all the economic pressure that would bring. There will be bankruptcies, it is just a question of how many. As a result, directors will face a number of exposures which could see them facing investigations, claims and prosecutions, for example, for wrongful trading, fraudulent trading, misfeasance or breach of fiduciary duty. The courts may see a pandemic of bankruptcy cases.
We can also expect D&O claims from other sources. Management may be exposed to risks related to the way they have dealt with the process of putting staff into furlough, laying them off, or reducing their salaries and working hours. For example, in Mexico, factory workers are suing companies who they say refused to let them stop working even after the Mexican president ordered a lockdown. There may be risks relating to privacy infringement if employees have been asked questions around their personal health and that of their families. There is also the possibility of cases being brought alleging discrimination based on national origin or suspicion of being infected. And we are also seeing claims from workers given insufficient PPE.
Questions are also being asked of businesses' cyber security now that many have the majority of their staff working from home for the foreseeable future. There has been an increase in attempted cyber breaches – insurers need to know that policyholders are well placed to withstand these. They also want to know that the right processes are in place in terms of monitoring, controls and supervision. Does the company's working from home protocol ensure that this diligence is maintained?
Suppliers and creditors are also going to be affected. It's likely we'll see a number of speculative and opportunistic claims, especially in the more litigious environments. Although these may not succeed, the costs incurred in defending these claims have the potential to be substantial.
A challenging market
Prior to COVID-19, the D&O market was already under pressure with some insurers exiting the market and others putting up premiums exponentially. What we are seeing now is almost unprecedented as D&O insurers impose more restrictions, cut capacity, and look to push rates even further. Many are reserving their capacity for renewals and some underwriters are not considering business in certain countries or sectors.
All of this translates into ever tougher conditions for new and existing purchasers. It is not difficult to see a future in which D&O insurance in certain markets is no longer available or affordable, or provides the coverage expected or required. While Tesla’s decision not to renew its D&O cover generated headlines, it raised an important point: the industry is going to have to think creatively to effectively manage and transfer D&O risk in a sustainable way. This may include greater use of self-insurance and captive insurers, but the D&O market needs to come together to pool its knowledge and experience to deliver innovative solutions.
The original article can be viewed here
I am a senior treaty broker, responsible for structuring and placing casualty treaty programmes with London and International markets for our clients. Currently, the majority of our clients are based in the UAE.
I remember in my first week of my career, I excitedly came home to my parents to tell them I learnt that the chocolate tester for Cadbury's had her taste buds insured by Lloyd’s for £1 million.
I was an International Casualty Treaty underwriter at Barbican Syndicate 1955 in Lloyd’s for 10 years.
I teach the Under 35’s Reinsurance underwriting pricing seminar every year to 25-30 Reinsurance professionals who have 1-2 years relevant experience. I have also been a Lloyd’s mentor.
I always hate that questions as I wish I had some real hobbies! Outside of work I mainly enjoy drinking in good pubs, eating in good restaurants and travelling to European cities!
Juggling. Broking requires the ability to keep a lot of balls in the air. The challenge is keeping all the balls happy all the time….
You can actually buy alien abduction insurance!!
Spent last 5 years in the Middle East and the 15 years prior to that in the South African insurance market – mostly in underwriting
For the first 16 years of my insurance career, I studied various diplomas or degrees while working. Everything from insurance to financial management to nursery school teaching to medical jurisprudence and finally my MBA.
Dragon boating, travelling and various other fitness activities (changes often, short attention span…)
New Dawn Risk has become a member of a/e ProNet, a leading network of independent insurance brokers specializing in the professional liability insurance and risk management needs of professional architects and engineers in the US. Membership of a/e ProNet is by invitation only.
Max Carter, CEO of New Dawn Risk, said: “This is a critical time for architects and engineers in the US. Even before the COVID-19 outbreak we were seeing upward pressure on premiums combined with an increase in both the volume and severity of claims, due in part to legal costs and awards inflation. Now those pressures are even greater, so there has never been a better time for us to share our expertise and creativity in professional liability risks with the US design industry.”
Dave Johnston, Executive Director of a/e ProNet, said: “We are delighted to welcome New Dawn Risk to the network. Their experience in placing complex liability and other specialty risks in all major markets worldwide will benefit our members as well as architects and engineers looking for risk transfer solutions across the US.”
Find out more about a/e ProNet at https://aepronet.org/
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Notes to Editors
Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims. 95% of our business emanates from outside the United Kingdom.
The article below, by Max Carter, CEO at New Dawn Risk, was originally published in Insurance Day magazine on 26th April 2020.
It is self-evident to state that, within insurance, a huge shift has occurred in front of our eyes. Within one month the move to an online insurance market has been forced upon all of us. The shock of COVID-19 social isolation means that face-to-face opportunities to organise and plan complex – or even ordinary – (re)insurance placements are suddenly entirely gone.
It is our good fortune that, through the work of PPL (and its competitors) there is a modern and well-tested technology infrastructure in place for the electronic placement of risks, and with that in existence the UK insurance market has moved smoothly online – after decades of prevarication. This, in itself is cause for celebration. To put it bluntly, London needed a kick (though perhaps no one considered anything of this magnitude) to catch up and adopt.
Many companies in the London Market undertook trial home-working days before mandatory lockdown was introduced, and most have reported full functionality in a matter of a few days. As a test of business continuity preparedness, whilst this transition all happened in relative slow-motion (compared to, say, a major terrorist attack shutting down the City overnight), our clients and our regulators should be satisfied that as an industry we can provide business continuity in the event of a disaster.
But let’s be honest, this is only part of the story. The real challenge is for brokers and insurers to rise to the cultural demands of developing and placing new business in the video-connected world.
The biggest surprise is the almost instantaneous adoption of videoconferencing platforms. At New Dawn Risk, we had already started to use Teams, albeit with little videoconferencing, late in 2019. We now communicate routinely with colleagues, seemingly all day long, using Teams as our video chat platform. This works amazingly well and provides a sense of connection that is close to actually being in the same office.
Cloud-based IT alongside videoconferencing will largely work well alongside the electronic placement systems that are in place for discussions occurring inside the Market, but, more critically, we need to pay attention to the client-side changes that must be made. Yes, we can all now reach clients on screen, and we can still email and phone. But some of the spontaneous relationship building that was possible at events, conferences and client meetings is currently impossible. Renewals will work where a relationship is already in place, but how do you create the sort of trust that can bring in new business when you can’t ever meet face-to-face?
If we make the assumption that social distancing in some form will be with us for at least a year to come, we are forced to come to the conclusion that a new way of building and managing client relationships is now required. Whether it is via formal regular presentations to clients, or informal LinkedIn groups, it is the ability to put yourself and your skill sets in front of your prospective client’s eyes on their desktop that is going to count in the market going forward.
Of course, for many people under thirty-five, living life online is as natural as breathing. If you date online, share your social life online and study online, you are used to building relationships remotely, and this is where I notice real inconsistency of approach, split by the age demographic of users.
Younger users, on the whole, are completely at home with using technology as a tool. They are skilled at developing strong personal relationships without the need to interact face-to-face, and I predict that the new online world could bring to the fore a next generation of stars, based on this sort of talent. It is the older users, particularly with people in their fifties or older, that seem to be struggling. Don’t misunderstand me; there are many older people in our industry who are as fluent at using new technologies as any twenty-something. However, there is a worrying number of otherwise extremely experienced older professionals who appear to be finding it tricky to operate in the new paradigm.
Last week, I heard one peer in his fifties complain that he was really struggling with the technology and that he’d much rather be working out the intricacies of a deal face to face. This struggle cannot be ignored as being insignificant, as many of these individuals have a wealth of experience, particularly in dealing with the hard market conditions that are now prevalent. There is a real danger that in these challenging times, experienced brokers and underwriters will find themselves left behind simply because of a lack of experience at building professional relationships online.
One way to address this lack of confidence among older practitioners might be for their employers to acknowledge that this is an issue and arrange coaching and tutorials for those who feel out of the loop. We may be in lockdown for some time to come, but even if life returns to ‘normal’ sooner rather than later there will be changes that have been made in the way we work that will not be reversed. Employers need to recognise this issue and ensure that we do not lose the benefit of our most senior, and experienced, colleagues.
The original article can be viewed here.
Working from home has become the new normal for almost anyone with an office-based job. Bringing with it many benefits but also a number of additional challenges. Most importantly, home workers now need to become much more active in managing their own cyber security.
In order for businesses to feel more secure it is essential that your workforce follows these five simple rules to reduce the likelihood of a cyber incident and the resulting impact on the business.
Be careful about who you share data with, and how you share it. Is it really necessary to send that spreadsheet, client presentation, HR data etc? If so, add passwords to the most sensitive documents and follow up with the recipient to ensure it has gone to the correct email address.
Always question documents received from outside of your network; even if you know and trust the sender. Although your company’s own internal security might be strong you can’t presume the same of your contacts, no matter how honest they might personally be.
Always be vigilant, especially if connecting to your work network via a personal device. This means that you shouldn’t allow yourself to go into ‘home’ mode. Follow office rules:
If you are a manager, it is important when working remotely to ensure employees are continually reminded to remain vigilant and to treat their work computers and other technology (especially phones) in the way required by company policy. This can be done via daily or weekly email reminders, to ensure that cyber security always remains top of mind for your staff.
This one is simple. Keep on top of software updates. These are now more crucial than ever and you should restart your computer to allow updates to complete as soon as it is viable to do so. In addition shut down computers at the end of every day to allow overnight updates to occur.
A VPN provides a secure and properly encrypted web connection for you and your employees’ work devices to access the work network. By encrypting traffic - where an employee has to connect to the internal network via public internet - it reduces the chances of exposing them, in particular to man-in-the-middle-attacks, but also to other intrusions from cyber criminals.
If you have responsibility for projects which contain data (which these days means most of us), make sure that you confirm with your IT team or IT service provider that backups of your files are occurring daily. To make these effective, set up protocols with teams to save all work to the company network, not onto the desktop. This ensures it will be backed up and also that it is protected by a more robust level of security. The new environment has driven us a huge step further towards paperless working, and this means that protecting our online information is even more important.
Download the white paper here.
The report: “Understanding and opening up the US cannabis insurance market”, exposes both the potential premiums and the size of the insurance gap for cannabis-related products in the US. Headline statistics include:
The report also looks at the challenging legal environment for insurers, discusses possible coverage solutions and analyses the issues for each category of insurance cover, including: D&O, cyber, product liability, workers compensation, cash and contents insurance, crop insurance and fleet auto and cargo.
Max Carter, CEO of New Dawn Risk, commented: “Legal cannabis is a rapidly growing market, currently with a legal foothold in over thirty US states. Right now, the COVID-19 outbreak has led to increased demand for cannabis in the US and stores in many states have been allowed to reopen or offer curbside sales. However, the crisis has also exposed the financial pressures on many cannabis firms, with many VC-backed cannabis firms struggling already to meet financial projections. A COVID-19 recession, which seems all but a certainty, will only increase such financial pressures for young cannabis businesses.
“The pandemic will make it even tougher for cannabis producers to obtain insurance as providers further tighten terms and conditions and introduce exclusions, while insurers who may have been looking to enter the marker will put their plans on hold. With the Federal Government shut down and the possibility of a change of administration in November’s presidential election, the progress of legislation that would open up the cannabis market to insurers will be delayed.
“This reality fails to reflect the fact that many firms have significant insurance needs that are critical to help them manage the risks that exist in this young industry, with its untried legal and societal framework.
“Despite all this, the growth of the sector is inexorable and New Dawn Risk is committed to working with carriers and clients to share knowledge and insights to help identify and deliver creative solutions for this market. In just one example, we have already successfully placed cyber cover for a number of cannabis businesses. But we want to do more. And that means furthering the discussion, which is where we hope this report can contribute.”
Notes to Editors
Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims. 95% of our business emanates from outside the United Kingdom.
The article below, by Nicky Stokes, Head of Management Liability and Financial Institutions at New Dawn Risk, was originally published in Insurance Day magazine on 21st March 2020.
Historically, directors and officers (D&O) insurance has not seen significant demand across markets in the Middle East. There have been a number of factors behind this. Perhaps most significantly, the region is home to a swathe of large and wealthy family-owned private companies who have simply not seen the need for this type of risk transfer product. With demand for D&O insurance low, pricing of the product has been relatively cheap and it has been viewed as something that is a nice-to-have rather than as a necessity. Furthermore, the litigation environment – a potentially key driver for claims to be brought against directors and officers – has been comparatively benign in the Middle East.
Regulatory developments
However, there are signs that the situation is changing. Up until recently, there had been a patchwork of litigation regulation across region; requirements are different under United Arab Emirates’ law and in the Dubai International Financial Centre, for example. But governments across the Middle East are keen to attract inbound investment into emerging markets and to compete with Western economies on a level playing field. In order to achieve this, standards of accountability and responsibility need to be approached in the same way. As a result, the regulatory burden is increasing as Middle Eastern states look to align with global standards and reporting requirements.
In the Kingdom of Saudi Arabia (KSA) there is a massive drive to regulate the financial services industry as part of the government's National Transformation Plan 2020 and Saudi Vision 2030, designed to reduce Saudi Arabia's dependence on oil, diversify its economy, and develop public service sectors. One key development among a string of reforms under Vision 2030 was the introduction of a Bankruptcy Law in 2018, to further encourage the participation of foreign and domestic investors by structuring the business legal framework and putting new regulations around businesses operating in KSA. This is having a direct effect on directors and officers as it makes it much easier to identify where obligations have not been met. Where duties are codified into law, it much more straightforward to bring a claim.
In another development in December 2017, in a first for the region, the Capital Market Authority in KSA introduced a new class action regime for claims by shareholders of listed companies in the country. Earlier this year, the first lawsuit filed under the regime was brought against the former Board of Directors of Al-Mojil Group, its senior management and its auditor for alleged violations committed during the subscription in the company's shares as part of its 2008 IPO. We should expect more to follow.
An international market
Meanwhile, recent events have underlined the global nature of the insurance market. A combination of increasing litigation and regulatory risks, more notifications, and profit pressures following years of premium reductions are prompting underwriters to carefully manage the capital they deploy for D&O risks. This has diminished insurer competition for buyers and resulted in higher rates and less favourable coverage terms for most buyers.
Rates for D&O insurance have been hardening in the UK, and latterly the US, for some time. But in the last few weeks we have seen prices in the Middle East follow suit, broadly in line with US levels with increases ranging between broadly flat up to 15% to 20%. Because the D&O market is comprised of a large number of international insurers, price changes in the region are being driven from a top-down perspective. Those that have been hit hard in terms of losses in the UK and US for example, are looking to remediate their books elsewhere.
Looking ahead, risks facing directors and officers in the Middle East are broadly in line with those that their counterparts are exposed to elsewhere in the world. Cyber is high on the agenda and there been a number of recent cyber events in KSA that have hit both government ministries and petrochemical firms, generating significant losses with the potential to impact the D&O market. Saudi Aramco has seen an increase in attempted cyber attacks since the final quarter of 2019, which the company has so far successfully countered, but is seeing a trend of increasing magnitude and frequency of incidents, a trend it expects to continue.
It is unknown at this early stage, but likely that we will also see a string of claims against directors and officers as a result of the coronavirus pandemic. The situation is changing rapidly but businesses in the Middle East and elsewhere should brace themselves for a likely flood of shareholder lawsuits. We have already seen massive share price drops and if investors feel they were not fully informed about supply chain vulnerabilities or distribution problems, they may choose to litigate. While there is no guarantee that these claims will be upheld, there is a potentially significant exposure to directors and officers in terms of defence costs. Underwriters and brokers alike are tracking D&O developments in the Middle East closely.
Nicky Stokes is Head of Management Liability and Financial Institutions at New Dawn Risk
The original article can be viewed here
For the time being, while the infection risks from COVID 19 are high, and in line with government advice, we have taken the decision to switch all the New Dawn Risk team to a home working protocol.
The good news is that we have upgraded the quality of our remote working facilities across the board, with this eventuality in mind. This means that our entire team will still be accessible on their office phone numbers (or via their mobiles), by email and by videoconference (using Microsoft Teams, or indeed any other videoconference channel).
Both we and the London Market remain very much open for business, and we are in continuous contact with our underwriters. If you are having trouble connecting with London insurers through other channels, I have no doubt that we can assist. Please feel free to call or email any of us. You can find phone numbers and email addresses here:
https://www.newdawnrisk.com/our-people/
We look forward to working with you in new ways, via conference calls and videoconferences, for as long as the health issues remain significant.
Stay safe and healthy!
Max Carter, CEO at New Dawn Risk
The article below, by George Styles, Professional Risks Broker at New Dawn Risk, was originally published in Insurance Day magazine on 28th February 2020.
Steps are being taken to legalise marijuana, but the opportunity is too significant for insurers to hang around for the law-makers to catch up with the market
The legal medical and recreational marijuana industry in the US is already sizeable. In 2018 it was estimated at $10.4bn, outstripping the American population’s collective spending on Netflix.
This is set to grow further. Marijuana companies raised $13.8bn in funding in 2018, four times the amount raised the previous year, according to cannabis industry research firm Viridian Capital Advisors. With a growing number of states voting to legalise marijuana, a report by AM Best released last year forecast the market for legal sales is projected to increase to $22bn by 2022.
The industry already employs hundreds of thousands of workers, spanning a range of business segments. These include cultivation, processing and harvesting, manufacturing, testing, distribution and retail. Each business has need of protection against a selection of specific risks including crop insurance, equipment breakdown, motor liability, directors’ and officers’ liability, errors and emissions, cargo, employee theft and so on. But despite this growing demand, many carriers are reluctant to get involved.
Unusual situation
The US cannabis industry is operating in something of an unusual situation at the moment. Thirty-three US states and the District of Columbia have laws allowing the use of medical marijuana. Ten of those 33, as well as DC, have legalised recreational marijuana. However, the plant remains illegal under federal law as a Schedule 1 drug.
As a result, it is difficult for companies in the cannabis industry to secure banking and insurance relationships. The Lloyd’s market, for example, does not provide coverage for businesses in the US because of the drug’s federal status as an illegal substance. In contrast, it does in Canada, where its use became legal in 2018.
Insurers are wise to be wary – this is something of a legal minefield. For example, the Federal Bank Secrecy Act requires financial institutions – including insurers and broker-dealers – to report to the Department of the Treasury any transactions in excess of $5,000 they have reason to believe involve assets derived from illegal sources. The penalties for failing to do so are severe, including prison terms.
Elsewhere, the Money Laundering Statute makes it a felony for any person to engage in a financial transaction the individual knows involves the proceeds of an unlawful activity. This would include any activity involving (directly or indirectly) the proceeds of cannabis and penalties include up to 20 years in prison.
Crucially, enforcement of these laws depends on the view of the attorney-general, who directs the attitude of the Department of Justice with regards to prosecution. In 2019, attorney-general William Barr said he will not pursue cannabis businesses that are operating legally within their state jurisdiction. However, insurers have no assurance these comments extend to financial institutions engaging with cannabis businesses, nor is there any guarantee the policy extends beyond the tenure of the incumbent attorney-general who made this statement.
On top of this is the judiciary, which, all the way through to the Supreme Court, has shown a more consistent willingness to affirm and uphold criminal prosecutions involving cannabis.
Moving forward
Against this backdrop, carriers are unlikely to enter into the market until marijuana is decriminalised at the federal level and banking regulations change. However, we are seeing steps being taken towards legalisation.
For example, the Secure and Fair Enforcement Banking Act, which would enable banks to offer loans and other banking services to marijuana businesses, including contractors and vendors who never touch the plant, passed through the House of Representatives last year, but it is uncertain if or when it will get through the Republican-controlled Senate. Meanwhile, the Marijuana Opportunity, Reinvestment and Expungement Act, which would remove marijuana from the Controlled Substances Act, continues to make slow but steady progress though the House.
While it is exceedingly unlikely this legislation will be passed this year, it seems certain to be at some point – the momentum behind legal marijuana appears unstoppable. The insurance industry cannot afford to wait and is not hanging around for law-makers to catch up with the market.
In December, the National Association of Insurance Commissioners’ cannabis insurance working group approved a white paper outlining the challenges for the insurance industry in regulating cannabis and establishing a guideline for state insurance regulations. In the same month, the US National Cannabis Risk Management Association set up a member-owned insurance company to help it manage and transfer its risks.
These are positive steps forward but there are clearly issues still to be resolved. This is an emerging area and insurers are just finding out the full scope of the risks they may have to deal with and the types of claims they may get. This means both personal and commercial lines insurers need greater access to quality statistics on actual losses. That will come through studying early claims in states where marijuana has been legalised to help determine their risk appetite.
Ultimately, the size of the opportunity is significant – all stakeholders in the insurance industry need to work together to understand the issues and develop innovative solutions to be able to maximise it
George Styles is a professional risks broker at New Dawn Risk
The original article can be viewed here
New Dawn Risk Group Limited, the international specialist insurance intermediary, announced today the appointment of Rachel Cohen as a Senior Treaty Broker.
Max Carter, CEO of New Dawn Risk, commented: “Over the last decade we have built a robust treaty business and a strong offering in multiple markets. As we embark on the next phase of growth, Rachel’s appointment helps to further strengthen our team and ensure that we can offer cedants an even more valuable proposition.”
Rachel has over 10 years of underwriting experience in the casualty reinsurance sector both internationally and in the UK. Prior to joining New Dawn Risk she was most recently a Class Underwriter of International Casualty Treaty at Barbican Syndicate at Lloyd’s 1955. Rachel graduated from the University of Manchester with a BSc degree in Business Management, she is ACII qualified and a committee member of the Under 35’s Reinsurance Group with a focus on education and training events where she organises and attends international market visits and runs seminars on reinsurance treaty pricing for the underwriters and brokers in the U35 group.
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Notes to Editors
Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims. 95% of our business emanates from outside the United Kingdom.
The article below, by Tom Malcolm, Head of UK Cyber at New Dawn Risk, was originally published in Insurance Day magazine on 3rd February 2020.
Most people look forward to retirement, and many have a ‘bucket list’ of ideas for what they want to do.
However, in the rapidly moving world of cyber risk, one fact of growing importance that is regularly missed by new retirees is that the withdrawal of the corporate umbrella also means the withdrawal of corporate cyber protection. Once the company laptop and phone are handed in, retirees are on their own with IT, and will, possibly for the first time in their lives, have to navigate their own way through the murky waters of cyber safety.
A critical multiplier of this problem is that not-for-profit organisations which interact with the retired community tend to have much lower levels of cyber protection than actively commercial companies. This means that this area is high risk and yet also severely under-protected – an almost perfect storm of increased vulnerability.
Active retirement
Most people who retire want to try something new, and the most common list of ideas includes taking holidays, volunteering or joining a club.
Unfortunately, all of these activities are characterised by high levels of cyber risk. Take travel. With 81% of holidays being booked online (Association of British Travel Agents) it is estimated that only 29% of travel sites offer full protection against phishing attempts. Holiday money firm Travelex was subject to a large-scale ransomware attack in January 2020. Although denied by Travelex, the hackers claim they had been in the Travelex systems for six months and had taken 5GB of sensitive customer data.
Meanwhile, local clubs and volunteer organisations also carry high data risk for participants. Almost all clubs and volunteer organisations have extremely low levels of data protection and limited cyber awareness. Payment protocols for club membership fees can be very insecure. Sports and social clubs and the like often have amateur committees, which leave levels of cyber awareness low-level and subject to chance. For example, if the club treasurer’s computer gets hacked, the direct debit and payment details of all members can quite easily be accessed.
With the exception of a few of the largest, very few charities also have the manpower to manage and protect fully against cyber risk. At their core, charities are looking to help the people they serve. This is done by maximising the money spent on their chosen sector and so additional spend and allocation of time on other security matters is limited.
But at the same time, they hold funds as well as personal, financial and commercial data. There are signs that this risk is now being recognised. The number of charities who treat cyber security as a high priority has gone up to 75% in 2019, compared with just 53% the year before, and is now at the same level as businesses.
With good news at the charity level, individuals here can help widen awareness of the issue by focusing on cyber security for any small community organisations that they’re involved in, and by asking whether some form of protection can be afforded.
Ill health and social care
Many older retirees have issues with health, mobility and care. People become more vulnerable, and yet the organisations that they interact with are not famed for their ability to protect the people they look after from hacking and related issues.
Hospitals and doctors’ surgeries have been at the centre of large-scale hacking incidents more than once, while care homes are acknowledged as often lacking strong central IT resources, let alone the risk factors that come from large numbers of care workers having direct access to residents’ belongings, including bank cards and data. A glance at the findings of Australia’s recent Royal Commission on care for the elderly gives some horrifying evidence of how regularly those who live in homes can be preyed upon by the teams that are supposed to care for them.
Individuals can do little to influence hospitals or doctors’ surgeries, but here the risks have become more well-known since the 2017 Wannacry attack paralysed 60% of NHS services. We are all reliant on both private and NHS organisations investing in cyber protection and ensuring that they prioritise the safe management of patient data. Of course, it is worth considering that private medical facilities are in some ways more of a risk than the NHS because, although better funded, they will hold details of patients’ payment information alongside their medical records, doubling the impact for those involved.
Creating a cyber shield
Those who are cared for at home will also be vulnerable. They are often alone, accessible to casual visitors, and with their bank details and cash available to anyone who visits the home. The risks are obvious, but what is less clear is how to take action to build a complete protective shield around the growing retired community, helping them to ensure that they, their data and their finances are protected throughout the later years of their lives.
Families cannot shoulder the whole burden. So, what can those businesses who work with the elderly do to protect their community? Care homes are a particularly vulnerable part of the front line, as they hold a huge amount of PII (Personally Identifiable Information) data on their patients. Much work could be done here, in terms of increased training and awareness for care home staff and for families of residents, combined with an up to date and well-maintained IT infrastructure. Insurance coverage also needs to be increased, with a step change needed in residential home groups awareness of the need to protect their residents from cyber risk at every level.
Solutions can be found
Action is needed, and the insurance industry can help with this. Care homes, private hospitals and charities are at the front line. All of them need to tighten their cyber protections, and also develop greater awareness of the need to knit together full protection for the people in their care. Let’s work with these groups to build their educations and protection as much as we can.
Tom Malcolm is Head of UK Cyber at New Dawn Risk
The original article can be viewed here
The article below, by Amal Jallouq Head of Treaty Placement at New Dawn Risk, was originally published in Insurance Day magazine on January 9th, 2019.
The turnaround of the Egyptian economy in the past three years has not gone unnoticed and last year it was hailed by investors as the best reform story in the Middle East. The country’s economic growth rate in 2018 was the highest since 2010 and Egypt’s deficit fell to 8.2% of GDP in June 2018 from 12.2% three years ago.
The reforms launched by the authorities cover competition policy, public procurement, industrial land allocation and state-owned enterprises and sustained implementation will be essential to ensure statutory changes achieve meaningful results in the business climate. Alongside this, the government has also begun to strengthen its financial services regime, which, combined with strong economic growth, makes Egypt an emerging economy to watch for insurers in the next 12 months.
The authorities are introducing new insurance regulations. The current capital level for life and non-life companies is set at E£60m ($3.7m). The Financial Regulatory Authority (FRA) said the minimum capital of life and non-life insurers will be raised to E£150m, while the capital of non-life insurers covering oil or aviation risks will be set at E£300m and the minimum capital of health insurance shall be established at E£60m. The minimum capital of reinsurance activities will be set at E£1bn and the minimum capital insurance and reinsurance brokerage shall rise from E£2m to E£5m.
With the introduction of the new amendments, healthcare companies will be controlled by the FRA.
In compliance with the new law on minimum capital, eight Egyptian insurance companies – Misr Takaful, Suez Canal Life, Suez Canal P&C, Mohandes Insurance, Mohandes Life, Delta Insurance, Royal Insurance and Egyptian Takaful – have increased their capital.
Risk management
Under pressure from the supervisory authorities, Egyptian insurers are establishing risk management committees to meet the credit rating requirements of international agencies such as S&P Global, AM Best and Moody’s. The objective is to comply with the new regulatory and prudential requirements imposed by the new international standards.
The FRA has granted takaful insurance companies an additional six months to comply with the new regulatory requirements. The deadline is set for February 24, 2020. However, the companies involved were required to submit a plan of action to the FRA by September 30, 2019.
A new comprehensive health insurance system has started with a pilot in the coastal governorate of Port Said in July last year, registering close to half a million citizens. The system will be rolled out nationwide by 2032. The scheme was first announced in 2018 as a mandatory subscription to health insurance at a cost ranging from E£1,300 to E£4,000 a year, on a scale linked to income. Poorer families, reckoned by the government to account for about one-quarter of the population, will receive cover free of charge.
The FRA has recently made it compulsory for microinsurance institutions to provide borrowers with insurance protection against death and total disability. The limit is equal to the balance of the microloan owed by the borrower. There are 650 microfinance institutions and the target audience is a new segment that has not been served before.
In recent years, the Egyptian market has seen the formation of a number of risk pools, with the newest being the compulsory motor insurance pool with a total member count of 18 companies. Older pools include one covering trains and subway accidents. The motor pool was approved in February 2019 by the FRA.
There have been proposals by private sector companies to establish pools for aviation and oil risk to retain more of the risks within Egypt and allow smaller, newer companies to write a share of the risk
The Insurance Federation of Egypt has announced it is working on a pool covering natural disasters. In addition, there have been proposals by private sector companies to establish pools for aviation and oil risk to retain more of the risks within Egypt and allow the smaller, newer companies to write a share of the risk, as opposed to it being concentrated with more established companies.
Finally, the FRA has proposed a bill imposing an insurance cover against divorce. This insurance will be compulsory for any marriage. According to the authorities, the objective of this law is to protect the Egyptian woman in case of divorce.
However, there are a number of ambiguities surrounding this project. For instance, the conditions for the designation of the policy’s beneficiary are not clear. Also, no clarifications have been made on the scope of the law: will it apply to all communities? FRA is preparing an actuarial study to determine the insurance premiums and compensation amounts in the event of divorce. As of 2017, the divorce rates in Egyptian cities skyrocketed to 60%, while some villages reported 39% and some reported less. Most divorcees fall in the 25- to 30-year-old age group.
Amal Jallouq is head of treaty reinsurance placement at New Dawn Risk
The original article can be viewed here
New Dawn Risk announced today the strengthening of its senior team with the appointment of Nicky Stokes as Head of Management Liability and Financial Institutions.
Max Carter, CEO of New Dawn Risk, commented: “With rates increasing dramatically in all regions for D&O and financial institutions insurance, clients need experienced brokers to ensure that they are getting the best possible results in an extremely challenging environment. Nicky’s breadth of international experience in both underwriting and broking will help us to deliver an even more compelling proposition to our clients, wherever they operate.”
Nicky joins New Dawn from Liberty Specialty Markets in Dubai where she was AVP, Professional Indemnity with additional responsibility for the D&O, Bankers Blanket Bond and Cyber portfolio for local and international clients throughout the Middle East and Africa.
With more than 20 years’ experience in the insurance industry, she was previously based in South Africa where she held senior roles at companies including Marsh and AIG. Nicky holds an MBA from the University of Reading in the UK and a PMD from the University of Pretoria.
—Ends–
Notes to Editors
Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims. 95% of our business emanates from outside the United Kingdom.
In an interview with Middle East Insurance Review, New Dawn Risk’s Head of Treaty Production, Dermot Dick, explained why small reinsurance brokers are finding a niche in emerging markets as more customers are prioritising value over price.
The article considers how independent, nimble intermediaries are better placed to focus on areas of a client’s business that the larger players may not really be interested in or are not capable of dealing with. This is leading to a shift back to small and medium-sized brokers who are often more responsive to client needs and have the ability to offer bespoke products instead of just providing something off the shelf.
The article below, by Max Carter, CEO at New Dawn Risk, was originally published in Insurance Day magazine on November 8th, 2019
The overall size of the global professional liability (PL) insurance market is expected to top US$45 billion by the end of 2023. The United States will continue to represent the lion’s share of this figure but there is a very real risk that the London market will be underwriting a decreasing proportion of US PL business.
Historically, hundreds of millions of dollars of US PL premium has been written in the London market every year. But these are challenging times. Over the last three to five years it has become increasingly difficult to persuade new US PL business to come to London. The longest soft market in living memory and what that has meant in terms of pricing and the availability led to a point where something had to give.
The Lloyd’s Decile 10 review last year, even though it did not include US PL business in its scope, was very much a tipping point. US Directors & Officers insurance was part of the Decile 10 and this had a knock-on effect with many London-based underwriters taking a more aggressive view; they have since been taking a long, hard look at their portfolios and made the decision to pull back from US PL business.
Those that remain have been taking a more disciplined view – raising prices, cutting back on capacity and offering more restrictive terms. Meanwhile, London’s main competitor for US PL business – the US domestic market – has continued to see soft conditions. This is not to say that the US domestic market is not seeing similar pressures to those that London has to contend with, it is simply that as it is a larger market, home to many more insurers, it can sustain lower prices for longer. The US market will start to harden, just some way behind London.
In the meantime, as London draws back, US PL business is moving back to the US at a faster rate than for some time. In theory, this should be a temporary shift, part of the natural cycle of the market. There is a parallel here with the US D&O market, where rates went up about six months before US PL, around 12 to 14 months ago. We are now seeing US D&O business starting to flow back to London, particularly for public D&O where capacity is a factor, so it is not unreasonable to expect that US PL business will follow suit and come back to London as rates in the US domestic market firm up over the next 12 months.
Taking a strategic approach
However, there is no cast-iron guarantee that it will. Much will depend on how the London market approaches the current imbalance between the US and UK when it comes to US PL business. If we look back to the last hard market in the early part of the last decade, London effectively shut out US D&O business and it took a very long time for trust to be regained. We would not want a repeat of that situation with US PL.
It is irrefutable that a correction was needed in the US PL market, as in many others. The fact that London moved first to address this would suggest that the damage should be less than elsewhere, and it should be able to regain a strong position.
But there are risks. If this period is managed too aggressively and relationships with US brokers and clients are damaged, London-based underwriters may find it difficult to rebuild their portfolios when prices return to a sustainable level.
It is vital not that they do not alienate the US market by coming across as unreasonable or unwilling to engage with US clients and brokers. Of course, price corrections are necessary, but not best achieved through a knee-jerk reaction. A 50% rate hike in one go is hard to swallow, much better to spread it over three years so the blow is softened. Likewise, playing hardball by turning your back and walking out of the door if your terms are not met might seem an attractive short-term strategy but it does rather leave one open to having to do some significant bridge re-building at some point in the future.
Taking a balanced, long-term view is necessary to protect future market share. And that means keeping the channels of communication open now, prioritising face-to-face renewal discussions with clients to hear their side of the story.
The role of the London wholesale broker in this process needs to be respected too. Underwriters need to work closely with them to help negotiate a healthy position of compromise. They are widely represented in the US PL market, not just by independent specialists like New Dawn Risk, but also by the likes of mid-size brokers including Gallagher, RKH and Lockton, as well as the largest global players at the top end. Together this represents an important distribution channel that also supports client engagement, especially if bad news needs to be delivered – something always better communicated in person with a view to keeping the door open for the future.
The London market can win back its share of the US PL market, but only by taking a sensible and sustainable approach.
Max Carter, CEO, New Dawn Risk
The original article can be viewed here
Dermot Dick, Head of Treaty Production, gives his feedback on the recent SIRC conference
So, what did we make of SIRC 2019 and the “Winds of Change” themed conference?
On the plane back to UK, most people’s thoughts were predominantly positive, despite the obvious challenges facing the market in Asia and its worldwide support network of reinsurers and brokers.
Some these are global. Climate change threatens all of the major conurbations in Asia and brings particular risks to new industrial developments on vulnerable land in Vietnam, Cambodia, Laos (as well as other countries in the region). Similarly, global trade tensions, allied to the likely impact of Brexit remain a significant generator of concern in this region, as elsewhere.
Cyber is another common thread, although the scale of loss highlighted this week in Asia was in the marine market. Lloyd’s identified a cyber loss scenario of US $110bn if there were to be a simultaneous attack on a number of major Asian ports - well above the normal maximum total catastrophe annual loss in Asia. With that said, the amazing speed of the growth of the cyber insurance industry and reinsurance industry gives hope that we may be able to meet it with market innovation, as we have done many times before with new and emerging threats.
Reinsurance is also facing some turmoil. After years of a soft-market pricing cycle most reinsurers’ profitability is low or non-existent and, given the worldwide scenario, has led to significant repositioning /re-underwriting of reinsurers portfolios – a project that is currently live as we speak.
Meanwhile, it was clear at SIRC that retro shortages continued as the mismatch between direct reinsurance pricing and retro highlighted during the last renewal season looks to continue and worsen this year. ILS funds remain trapped by this pricing issue. Without relief, they cannot effectively reload but the traditional markets are still absorbing loss-creep from previous losses, with the cost of Super Tyhoon Hagibis (potentially US $15bn ) to be reserved in Q4.
On the positive side, it was great to see Trust Re looking confident at SIRC under new CEO Talal Al Zain. They seem to be gaining momentum and it would be great for the MENA and Asian market to see them succeed.
Resilience required
The real buzz word of the conference was resilience. The lack of it, in even the most developed Asian countries is alarming, and this was clearly highlighted. The Asian insurance gap remains very big, even though Asian economies continue to grow at double-digit pace.
However, the first ever ILS transactions and cat bonds in Singapore are a highly positive step towards the region beginning to plug its insurance provision gaps and improve resilience to major loss events. Here Singapore has taken the lead, and in fact continues to lead the whole region in insurance innovation and provision.
Insurtech was as ever, an eye-opener. The huge innovation spurt in Asian insurtech is impressive and again Singapore is very active in this area. It is frankly amazing to see these ideas being turned into functioning reality so fast – the London market could learn from some of the rapid-fire activity taking place in this region.
So, that was SIRC 2019. The meetings and discussions were great, as always, and show the intense competition and innovation in the market, which is good news for our clients and customers. Times are hard but there are reasons to be hopeful as we travel into 2020!
Dermot Dick, Head of Treaty Production, New Dawn Risk
I’m the COO – I basically grease the wheels of commerce and try to keep everything (and everyone!) on the straight and narrow.
David Beckham’s legs were insured in Lloyd’s for £100,000,000!
I spent my three years at university in a lab coat studying Cell Biology, then a brief stint at a stockbroking firm before finding my calling in insurance…
On an early business trip to the USA, I drove a Fiat 500 over four hundred miles across the MidWest. I drew some odd looks at the traffic lights.
Cooking curries and child-rearing.
The article below, by Amal Jallouq, Head of Treaty Placement at New Dawn Risk, was originally published in Insurance Day magazine on October 20th, 2019.
In recent years the Indian government has made a number of moves designed to strengthen the domestic reinsurance market, while at the same time opening up opportunities for foreign players. These included the raising of foreign ownership limits from 26% to 49%, permitting Lloyd’s to set up a platform in India, and introducing changes to the regulations pertaining to foreign reinsurers which have seen most of the world’s largest international players set up branches in the country.
The appeal to these businesses of doing so is clear – India offers huge potential. GDP growth, while slightly down on forecasts in 2018, this year remains at around a healthy 7%. It is the world’s second most populous country, yet insurance penetration remains low, albeit growing. In 2017, it reached 3.7%, up from 2.7% in 2001, but still some way behind mature insurance markets.
A growing insurance industry
A number of factors will continue to drive the development of the insurance industry in India. These include rising levels of wealth, growing awareness of the role of insurance, increased risk of natural catastrophes due to climate change and growing involvement from a government that is recognising the societal good that insurance can deliver.
Recent Indian government initiatives include the introduction of: a National Health Protection Scheme to provide coverage of up to 500,000 rupees to more than 100 million vulnerable families; an agricultural crop insurance scheme that benefitted 47.9 million farmers in 2017-18; a life insurance policy of 200,000 rupees to those who previously had no access to such services; accidental death and disability cover; and a recently launched research project that is trialling a number of complementary solutions, including drought and flood insurance, improved seed varieties, weather forecasting services and climate-smart farming practices. These developments offer tremendous potential to the re/insurance industry.
Technology is another key growth driver. While Indian re/insurers initially approached insurtech-led innovation with a degree of caution, they witnessed the change that it could bring to other industries and are now embracing it wholeheartedly. As they seek to make up for lost time and generate real value, whether by way of data analytics, cost reductions, process efficiencies or radical changes to the customer experience, the insurance landscape in India is being transformed.
Playing the long game
As international reinsurers consider these opportunities, they rapidly come to realise that the Indian reinsurance market is unique. It is intensely competitive, marked by a dynamism and an entrepreneurial culture that sets it apart from other more conservative emerging insurance markets, such as those in the Middle East.
Buyers negotiate adroitly; they drive a hard bargain and are not afraid to walk away if they think they can get a better deal elsewhere. Many are looking for the broadest coverage on the cheapest terms and as a result are placing business all over the world, including in locations with no established reinsurance track record. Inevitably, a decision to buy mainly based on price may not ultimately have a positive outcome, but this is part of a steep learning curve.
The Indian reinsurance industry can benefit greatly from more hands-on support from established international players, who can share knowledge and experience to help accelerate the development of the market. For example, to properly assess and price risks of export-oriented Indian manufacturers, technology, and business service companies with US exposure, it is vital to understand the effect of the US legal system – characterised by high defence and legal costs, class actions, and large awards/damages – on professional, product, and management liability claims. Other knowledge and expertise transfer opportunities exist for cyber, terrorism, space and aviation and natural catastrophe coverage.
This, of course, can be a two-way street: an exchange of information can be mutually beneficial as non-Indian reinsurers need guidance of their own to navigate what is, after all, a foreign market with its unique forms of business systems and institutions, and a distinctive form of capitalism that cannot be understood using the Western frameworks. To this end it is vital to seek out and build strong, mutually beneficial relationships with local entities, as well as the regulator.
Indeed, those with intentions to operate in the Indian reinsurance market need to have a long-term strategy. According to IRDAI, out of the nine foreign reinsurance branches in India, in FY18 only three reported a net profit while the rest reported losses.
A global reinsurance hub?
Yet the regulator’s ambition is undimmed – IRDAI has now set its sights on making India a global reinsurance hub. Its annual report in 2018 highlighted the ample scope for the re/insurance industry to expand “aggressively and inclusively”, and claimed that India’s geographical location in the heartland of South Asia, as well as its relationships with the Chinese and Middle Eastern markets, will position it to become a reinsurance leader.
The regulator also points to the development of Gujarat International Financial Tec-City (GIFT City) in Ahmedabad as a step in the right direction, indicating India’s aspiration to compete with global financial centres like Singapore, London and Tokyo.
However, a potential fly in the ointment is the current need for foreign reinsurance branches in India to maintain a minimum retention of 50% of Indian business, and IRDAI has upheld its order of preference rules that give first refusal in reinsurance contracts to the country’s only active domestic reinsurer, GIC Re. Some feel that the regulator should first create a level-playing field for reinsurers in the country and then look at making India a reinsurance hub. In the meantime, insurance businesses of all sizes operating in India need to position themselves for the opportunities that are right around the corner.
Amal Jallouq, Head of Treaty Placement, New Dawn Risk
The original article can be viewed here
That the term ‘underwriter’ comes from exactly that; someone who wrote their name under the terms of an early insurance contract (usually executed in Edward Lloyd’s Coffee House).
I’m very proud to have been involved in setting up the new United Arab Emirates employment guarantee insurance scheme which has already insured 3,500,000 workers in its first twelve months.
When choosing the name of the company, we wanted something that reflected our ambition to bring something new and fresh to a very old and often staid industry; and a name that can be easily translated into any other language and that was totally different to anything else in our market.
I can’t really call it a hobby, because I don’t spend enough time doing it, but I love sailing and hope to do more of it!
The cyber health of an organisation can be measured with some accuracy. A company’s attitude towards its cyber security, training, accreditations and insurance gives a clear picture of how well-managed cyber risk is by that individual firm.
For many firms, however, their measured score on this topic would be disappointingly low. Cyber risk has been a buzzword for the last three or four years, and corporate focus has heightened further due to the GDPR legislation, which shifted responsibility for data security firmly into each individual firm’s lap.
Firms such as British Airways have lost or been fined millions for cyber breaches, and many organisations, including NHS hospitals have had their operations closed down temporarily by cyber hackers.
But human nature is amazingly resistant to change. In spite of numerous high-profile attacks in the last couple of years, there is still a fundamental lack of true cyber awareness in many businesses and a low adoption of cyber basics. Just take a look at your own online profile and consider the following statements.
The unpalatable truth is that the cyber security community is beginning to understand that corporate firms need government support. This is most important in the areas of education and training. In most regulated industries there is a requirement to Know Your Customer (KYC). It is also mandatory for the company to deliver ongoing training and learning programmes to all staff, as well as CPD (continuing professional development), and compliance training.
Love or hate the regulated environments that exist, they promote and maintain high levels of safety and financial security for the industries they serve.
By contrast, the 2019 UK government survey on cyber security found that only 38% of small firms were aware of Government cyber security initiatives and accreditations, rising to 48% in large firms*. However, 80% of the cyber-attacks occurring every year could be prevented by adherence to the five controls recommended by the UK Cyber Essentials training programme
Now, for the first time, decisive steps are being taken by the government to provide education and training, and firms need to be aware of them. The Cyber Essentials Scheme was first off the blocks. This is the UK government accreditation, designed to educate the workforce, and protect organisations from the most common cyber-attacks. Find out more at https://www.cyberessentials.ncsc.gov.uk
The Cyber Essentials programme had an initially high uptake but, has since disappointed with low corporate retention. Many firms have slipped behind and are now non-compliant with the accreditation. This lack of focus has forced the government for the first time to take measure to push education in the field.
From 2020 all UK government vendors will be required to hold the Cyber Essentials accreditation, and to keep it updated. This move is intended to create a non-regulated half-way house, making it important for firms to become accredited; and for the Cyber Essentials credential to become widely accepted as a pre-requisite for doing business with any organisation.
Regulation is not here yet, but it is clear that the government is serious about ensuring firms prioritise and manage their cyber security. Firms who do not currently do this need to up their game.
Even if your firm is not prepared to work towards Cyber Essentials, there are other steps that can be taken. All firms, no matter how big or small, should be reviewing their cyber exposure and regularly checking the controls they have in place are adequate. Educating the workforce is a further important step to consider. All this can then be supported by a cyber insurance policy, which if these measures fail to prevent a cyber incident, will help an organisation to mitigate the effects both during and after the event, and get back on their feet again.
In summary, there is much that can, and should be done to protect a firm of any size against this new and pervasive risk to businesses.
If you fit into the category of ‘let down by human nature’ and would like to do more to cyber-secure your organisation, here is our checklist of steps to take to improve your cyber status:
Tom Malcolm is Head of UK Cyber at New Dawn Risk and advises clients on all aspects of cyber cover, protection and risk. For further information please get in touch cyber@newdawnrisk.com
Board members are key decision makers for every firm. They also play a pivotal role in safeguarding a company from both internal and external pressures. In a listed firm the board will look to protect the interests of shareholders and employees; while in a private company the focus is usually on helping management to make consistent and effective decisions for the business.
However, it is a fact that boards are not generally perfectly structured for assessing and prioritising cyber risk. Age is one factor. But there is also recruitment bias to contend with. When recruiting for the board, the typical skillsets that are favoured by recruiters include law, regulatory expertise, financial and accounting qualifications or HR experience. Notably missing from this list are IT, risk management or cyber security expertise.
The UK government’s own 2019 survey found that currently only 38% of small firms have in place board members or trustees with responsibility for cyber security. In large firms, less than 60% have a specific board member with oversight of this key risk. Worst of all are charities, where the number is only 30%*.
This is shocking, given the potential impacts a cyber event can have on a firm – from prevention of trading to loss of reputation, or data theft fines and reparations.
The challenge to be faced is increased by the fact that, not only are a board’s external Non-Executives are unlikely to have been recruited because of IT skills; but frequently a firm’s staff Chief Information Security Officer (CISO) – or equivalent – will often not sit on the board, leaving a gap in decision-taking expertise, and sometimes even in board awareness of the risk at all.
The challenge is not just one of ‘being in the room’. Attitude and communication are also important barriers to board’s understanding of how to manage cyber risk. Former CEO of Lloyd’s, Dame Inga Beale commented that “communicating in the same language is one of the barriers to effective collaboration between boards and information security functions”** The challenge is for an IT specialist to speak clearly to the board, to address their main priorities; and in doing so, to move beyond technicalities and into overall business risk
How can this be achieved? There are some simple rules which can make a big difference. Firstly, it is critical to use effective and simple tools to illustrate the risk, for example, using financial models to demonstrate the cost of a data breach, rather than system maps showing outages in terms of time and physical areas affected.
The CISO needs to team up with other departments to clearly analyse the effect of a cyber incident, including looking at elements that are not within their remit such as public relations and associated negative publicity, legal ramifications and impacts on share price / revenues or profits. These issues are ones that boards understand and can respond to much more easily than system-focused descriptors.
Overall, the approach must be to give the board issues that they can quantify and use to measure the potential financial impact to the business. Conversely, don’t use jargon that may make the board feel out of their depth, as this will make them reluctant to question, become involved or take decisive action. The point of having a board is that regardless of their technical knowledge they should still be able to provide valuable advice and help management steer around both new and old risks.
Managing a board is a skill in itself, and getting the decisions made that you need becomes doubly tricky in the relatively new and complex field of cyber risk. If cyber security is your responsibility in a firm, you need to arm yourself with the understanding of a board’s approach, as well as taking time to talk in their language. The board’s input can be valuable. The key to getting the best out of them is to articulate clearly the whole-business impacts of a cyber risk. It is simply a case of learning how to speak the language of the board.
Tom Malcolm is Head of UK Cyber at New Dawn Risk and advises clients on all aspects of cyber cover, protection and risk. For further information please get in touch cyber@newdawnrisk.com
** SOURCE:
https://www.infosecurity-magazine.com/interviews/infosec19-interview-dame-inga-1-1-1/
New Dawn Risk, the international specialist insurance intermediary, today announced the further strengthening of its team with the appointment of James Bullock-Webster as Head of Technology, Media and Cyber.
Max Carter, CEO of New Dawn Risk, said: “Clients of all types are increasingly worried about this aspect of risk and James’ appointment strengthens our ability to meet this need. His energy, creativity and expertise, combined with his experience in building innovative products to address changing client needs, make him an ideal fit for New Dawn Risk. As well as taking responsibility for our book of IT and media risks and existing international cyber liability offering, he will work closely with the team rolling out our new online cyber insurance product for UK businesses.”
James joins New Dawn Risk from Paragon International Insurance Brokers where he spent the last four years as a wholesale and retail broker. Prior to this role James served in the British Army for eleven years, where he rose to the rank of Major. He is CII qualified, holds an Extended Diploma in Strategic Management & Leadership from the Defence Academy United Kingdom, completed leadership and management training at the Royal Military Academy Sandhurst, and holds a BA (Hons) in Ancient History and Archaeology from the University of Newcastle Upon Tyne.
--Ends--
Notes to Editors
Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims. 95% of our business emanates from outside the United Kingdom.
By Dermot Dick, Head of Treaty Production
Published in Insurance Day on 8 September 2019
The Middle East has long been touted has a growth market with huge potential. Rising levels of wealth, a burgeoning middle class and a level of insurance penetration that considerably lags the global average suggests that there are ripe pickings to be had. Encouraged by these factors, many international re/insurers looking for opportunities in emerging markets have moved to set up operations in the region.
But things are changing. Two years ago, if you had taken a straw poll of London market insurers around whether they had ambitions to build a business in the Middle East, the answer in the majority of cases would have been a resounding yes. However, today the picture is somewhat different. The direction of travel has been reversed with a number of high-profile businesses choosing to exit the market.
So what exactly has gone wrong?
On one level, it is easy to point to tensions between Iran and the US and UK, which have been affecting shipping and the transportation of oil and gas out of the Arabian Gulf. However, the Middle East is a political cauldron that is constantly bubbling and every now and there is a spike in tension, whether it's Iran, Syria, Yemen or elsewhere. Many in the international re/insurance market are put off and steer clear entirely, but the trick is being able to navigate around the issues and seize on the opportunities they can offer. John Charman famously built his reputation and his fortune underwriting war risk during the first Gulf War in the 1990’s.
However, in reality, this is just a small part of the market; business which in the main is done in London. The bigger question is why, when the broker community appears to be thriving, we are seeing an exodus of international re/insurers who relatively recently set up operations in the Dubai International Financial Centre with the intention of establishing a hub for growing business across the region?
The short answer is they are unhappy with the returns they have been able to generate and have decided to cut their losses. But many have made some fundamental strategic missteps that have led to unfavourable results. Most commonly this has started with people, opting to staff their operations with expatriate workers who do not have sufficient local underwriting expertise based on true knowledge of the region to offer a compelling proposition to local buyers.
Furthermore, those that have set up in the DIFC have entered an incredibly aggressive market to operate in and may have suffered from a combination of insufficient ambition and innovative thinking. They have essentially offered the same products – there has been no differentiation nor have they been able to articulate how they add value that helps address client needs. When considering working with an international re/insurer, local buyers will inevitably ask the question what can you do for me that others can't?
Undoubtedly, the economic position is exacerbating the situation. In April, the International Monetary Fund almost halved its growth forecasts for the Middle East and North Africa for this year, to 1.3%, a sharp fall from the previous estimate of 2.5% made in October. The IMF has lowered its projected growth rate for 17 of the 20 economies in the region, mostly due to a combination of slower oil sector growth in some countries and geopolitical tensions and civil strife in others.
The downturn is not just impacting re/insurers and the wider business community, it is posing a headache for governments too. Pressure on oil and gas prices is showing little sign of relenting and is more likely to increase given heightened concerns around climate change and efforts to move away from fossil fuels. In the face of this shifting economic outlook, governments across the Middle East are waking up to the fact that things need to change. They have to reduce costs, such as those associated with expatriate medical and healthcare. In order to do this effectively, they need to bring in the private sector. And herein lie opportunities for re/insurers.
In one example, Dubai Insurance Company, working with reinsurance support from AmTrust and New Dawn Risk Group, recently created a unique new insurance scheme for the government of the United Arab Emirates that is having a transformational effect on business, the insurance industry and the wider economy. The Employment Protection Insurance Programme replaced the bank guarantee requirement for those employing private sector employees and domestic workers against employers’ failure to meet their financial obligations. The move has been widely praised due to its immediate effect in releasing billions of dirhams in the economy which were otherwise locked in bank guarantees, improving the recruitment cost for businesses, while at the same time protecting the rights of employees to receive their complete benefits and unpaid dues in case of an employer’s lack of liquidity or insolvency. There are a couple of key takeaways from this success story. In order to get people's attention in the Middle East, re/insurers need to think big and look to create something new that facilitates significant change. But in order to do this they need a deep understanding of individual markets within the region. This means having close relationships with the right people on the ground who understand the changing needs of insurance buyers and can help you grow your business.
New Dawn Risk, the international specialist insurance intermediary, today announced the launch of its UK Cyber Insurance product. Delivered through an easy-to-use online platform to small and medium-sized enterprises, or face-to-face to larger businesses or those with more complex needs, the new offering complements New Dawn’s existing cyber liability offering for international clients.
Max Carter, CEO of New Dawn Risk, said: “The SME segment in the UK is as prone to a data breach or cyber attack as larger businesses, but finds it much harder to buy the right cover for their needs. Our objective is to make dealing with a complex risk as simple as possible – available to buy online in minutes, at any time of the day. Most importantly, it provides the 24/7 breach response businesses need to minimise damage and help them get back on their feet following data breaches and cyber attacks.”
New Dawn’s UK Cyber Insurance uses easy-to-understand language to enable companies to make an informed decision. The product has been designed with low premiums, no hidden charges and free cancellation. Key features include immediate access to a cyber response manager who will coordinate appropriate experts in IT crisis management and forensics, PR, legal, regulator / data subject notification, and credit monitoring.
Tom Malcolm, Head of UK Cyber, said: “Businesses of every size and in every industry that hold sensitive information on their employees and clients, or rely on computer systems to operate their business, are at risk. Insurance – in conjunction with cyber awareness and security – is a vital element of protection.”
To find out more visit www.newdawncyber.co.uk
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Notes to Editors
Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims. 95% of our business emanates from outside the United Kingdom.
New Dawn Risk Group Limited announced today the appointment of Dermot Dick as Head of Treaty Production. Dermot was most recently Chief Underwriting Officer at Emirates International and his appointment is immediate.
Max Carter, CEO of New Dawn Risk, commented: “Over the last decade we have built a robust treaty business and a strong offering in the Middle East, Africa and Asia. Dermot’s depth of experience in those regions, the strength of his relationships and in-depth knowledge means we are able to offer cedants an even more valuable proposition.”
Dermot Dick added "It is very exciting to be joining New Dawn Risk at such a pivotal moment in their development and be part of the next phase of their growth. I have watched their progress with interest and admiration and am confident that we are offering a credible and innovative alternative to the big players and access to key developing markets. We will grow that footprint across all emerging markets worldwide and encompass all treaty classes to add to our speciality expertise."
Prior to joining New Dawn, Dermot was CUO of Emirates International, SVP at XL Re in London underwriting a book of Middle Eastern reinsurance business and Chief Executive of QRe in Qatar.
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Notes to Editors
Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims. 95% of our business emanates from outside the United Kingdom.