Another insurer will dump coal and oil sands

Another insurer will dump coal and oil sands

Axis Capital, Chubb and a handful of European insurers embrace a business shift to renewable energy insurance

The article was written By Rachel Koning Beals

Market Watch

Axis Capital Holdings Ltd AXS, +0.40%  is the latest insurer to give up profit potential from coal and oil sands, a departure it says supports the transition to a low-carbon economy.

Axis said Wednesday it will not provide new insurance or facultative reinsurance for construction and infrastructure for new thermal coal plants or mines, nor for oil sands extraction and pipeline projects.

Specifically, Axis will not insure companies that generate 30% or more of their revenue from thermal coal mining or hold more than 20% of their reserves in oil sands. Renewals, however will be on a case-by-case basis.

“We believe insurers have an important role to play in mitigating climate risk and transitioning to a low-carbon economy,” said Axis President and CEO Albert Benchimol in a release. For oil sands production, oil is forced from sand at intense temperatures, using water and natural gas to separate out the extremely thick bitumen. Impure and too viscous to flow, it goes through an “upgrading” process before traveling via pipeline to an oil refinery.

“This policy is in line with our broader strategies such as reducing investments in lines that do not align with our long-term approach; investing in growth areas, such as renewable energy insurance, where we are a top five global player; and growing our corporate citizenship program, a core focus of which is creating a positive environmental impact,” Benchimol said.

The Unfriend Coal campaign said in a report last year that global losses tied to coal hit $337 billion in 2017, including insured losses of $144 billion.

“While Axis’s policy is a good step, it must eliminate the geographic loophole in its policy and stop insuring new coal projects everywhere today, especially in Southeast Asia where there are hundreds of proposed power plants. We call on insurers around the globe to step up and improve upon Axis’s policy,” said Brett Fleishman, head of global finance campaigns at advocacy group 350.org, in a tweet from Insure Our Future campaign, a consortium of activist groups.

The Bermuda-based insurer’s policy shift aligns with that of competitor Chubb Ltd CB, -1.05%   , which in July became the first U.S. insurer to pledge to phase out its coal investments and insurance policies, saying then it will no longer sell new insurance policies to or invest in companies that make more than 30% of their revenue from coal mining. The company said for existing coal plants, insurance coverage for risks that exceed the 30% threshold will be phased out by 2022, and for utilities beginning in 2022.

Axis shares are down 2.6% over the past month, though up more than 22% in the year to date. Chubb shares are down 2.9% over the past month and up nearly 20% so far in 2019.

Germany’s Allianz and Italy’s Generali also pulled back some underwriting for coal companies in 2018, while the French firm Axa tightened its policy further, the Guardian reported. Lloyd’s of London agreed to exclude coal from its investment strategy beginning in April 2018. Reinsurance firms Swiss Re and Munich Re said last year they were limiting their underwriting for coal.

Climate activists at nonprofit RAN have called out other insurers including privately held Liberty Mutual for dropping coverage of corporate clients facing increased climate-linked risk while keeping up their own investment in fossil fuels and insuring coal and oil sands projects.

The Insure Our Future campaign highlighted the move’s potential significance beyond broad climate goals. It’s seen as at least a small victory for the First Nations Native American groups that have been fighting the oil sands industry for indigenous land rights.

Joining forces with the European Space Agency to make healthcare accessible worldwide

What was the impetus for this partnership between AXA and ESA?

Hassan El Shabrawishi: We met with ESA at the Internet of Things Tech Expo in Amsterdam in June 2019, where both organizations soon became very interested in the possibility of forming a partnership in areas where our goals are aligned.

Nick Appleyard: We quickly realized that there is a lot of symmetry between our two organizations, so we developed a memorandum to formally acknowledge this common interest and we agreed to take steps to develop this synergy.

What will be the main benefits for users?

Hassan El Shabrawishi: AXA is now a key player in the healthcare sector in Africa and we’ve found that there is a big gap between what our clients would like us to provide as a service, and what we are able to offer today. To address this gap, AXA is becoming a primary healthcare provider, with the aim of building a network of primary care clinics across the continent. There are two approaches: a bricks and mortar-type solution, or by providing things like teleconsultation for immediate access to quality care. A huge issue in Africa is that the infrastructure for digital technologies is currently lacking. So we are exploring how to leverage ESA’s satellite technology to provide remote areas with Internet coverage, as well as back up for urban areas to ensure the sustainability of our service. We aim to use digital services and technologies that don’t even exist yet in western markets, such as medication delivery to homes, teleconsultations, the concept of health coaches, and more. In addition, we will provide educational programs for our staff, and harness the power of data to inform the public so they can better manage their own healthcare. ESA is showing us how its technologies could leverage much more reliable and affordable healthcare, at costs that would have been unimaginable just 10 or 20 years ago. So the benefits to millions of African customers are threefold: accessibility, affordability and quality.

On which countries will you initially focus?

Hassan El Shabrawishi: We started this project by looking at what we call out-of-pocket expenses, which is the amount people pay for healthcare directly from their own funds. In Africa this can reach up to 90% of total health care expenditure. Nigeria and Egypt were the obvious places to launch this program, as targeting these two countries alone would cover around 400 million people. We have assembled a dedicated AXA One Health team with a pan-African focus, but we can go beyond Africa as what we are doing here is relevant to Asia, Latin America, and some countries in Southern Europe.

Nick Appleyard: The partnership will start in Egypt, as our satellites extend around the world, so any service we develop for one market can be developed for anywhere else. Wherever the partnership allows us to open up new market access, we’ll go side-by-side with AXA into those areas.

Are you planning to work on other joint projects in future?

Nick Appleyard: I hope so! The insurance industry is a natural partner for us. We are active in areas like infrastructure monitoring and in all forms of mobility and transport – all sorts of markets where AXA also has activities. So there are many areas of possible synergy with an organization such as AXA.

Hassan El Shabrawishi: There are so many points of interest in common that the answer is almost certainly yes. We signed our memorandum of intent between AXA and ESA, which is our first step. This memorandum is intentionally very broad because there are so many projects and technologies that ESA is willing to share with us.

Source:

axa.com

Marking the 500th anniversary of the death of Leonardo da Vinci, the Louvre Museum has completed major renovations of the Salle des États, where the Mona Lisa is displayed. The work was carried out with the support of AXA, which is also a sponsor of a retrospective of the Italian master’s career.

Read more

Insurance brokerage Hub bulking up Canadian benefits business with acquisition spree

The biggest insurance brokerage in Canada has been on a dealmaking blitz that may only be about halfway done, according to the company’s Ontario chairman.

Chicago-based Hub International Ltd. sells insurance, but it has also spent the past year expanding the Canadian side of its business, which advises companies on their employee benefits, such as health or retirement plans. It has been doing so in part by acquiring a number of boutique firms.

On Tuesday, Hub said it acquired for an undisclosed sum Toronto’s PDF Financial Group Inc., an independent brokerage that helps a company’s human-resources department manage employee programs. The acquisition was one of five such deals Hub has announced to date in October, involving three companies in Canada and two in the United States.

Hub is Canada’s biggest property and casualty insurance broker by a “healthy margin,” but it had heard back from some clients wanting advice about benefits and pensions as well, according to Gregory Belton, the executive chairman of Hub Ontario.

“We’re not only getting larger and filling out a geographic footprint, but we’re developing services for what we think is the under-served middle market of Canadian business,” Belton said in an interview with the Financial Post.

After announcing its Canadian benefit strategy in July 2018, Hub noted at the beginning of this year that it had already acquired 13 Canadian employee-benefit and pension brokerages since 2018, increased fee revenue to more than $50 million and opened seven new offices. Hub wants to earn more than $100 million in commission fees by 2021, and said it expected to open an additional 10 offices.

“I would say that we’re about halfway done in our acquisition strategy,” Belton said. “We have a fairly robust pipeline across the country, and you’ll see further acquisitions being closed in the coming months.”

Mike Berris, a partner at accounting firm Smythe LLP who specializes in valuations and M&A consulting in the Canadian P&C insurance industry, said he expects more activity in the benefits space — although not all brokers may be able to pull it off.

Even though it’s a risk-based product, you really have to have scale and expertise to do it properly.

Mike Berris, partner, Smythe LLP

“There’s a lot of desire, but there’s only so many people who are capable of doing that,” Berris said. “Even though it’s a risk-based product, you really have to have scale and expertise to do it properly.”

Hub has been scaling up since it formed in 1998 with the merger of 11 Canadian brokerages. It went public soon after, expanded into the U.S. and in 2007 was bought by private-equity firm Apax Partners and investment bank Morgan Stanley.

In 2013 Hub announced it was being acquired by funds advised by another private-equity firm, Hellman & Friedman LLC, in a deal that valued the brokerage at around US$4.4 billion.

Hub then said in October 2018 that it had agreed to a deal involving “a substantial minority investment” from funds managed by Toronto-based investment firm Altas Partners. The agreement implied a total enterprise value for Hub of more than $10 billion.

Since the deal, Hub’s website shows it has made more than 50 acquisition-related announcements. Currently, the brokerage has more than 11,000 employees, with more than 250 offices in the U.S. and about 200 in Canada, a spokesperson said.

“Like a lot of private-equity-owned brokerages, they have been very, very aggressive and they’re very, very effective in growing through acquisitions,” Berris said.

Belton said most Canadian businesses fit the mid-market mold, but that there is no “dominant player” in that section of the market right now for the sort of benefits business Hub is expanding. Even so, he said there has been “very robust competition” for the types of companies Hub is buying.

“Our aspiration is to become the dominant player, just as we are in the property-casualty side of the business,” Belton said.

IMS Demonstrates Insurance Telematics First: 42% Crash Reduction & 7% Combined Ratio Improvement

Waterloo, ON, Canada, Oct. 08, 2019 (GLOBE NEWSWIRE) — IMS, the insurance telematics technology arm of Trak Global Group (TGG) is now positioned to offer North American and European insurers unprecedented access to the learnings from driver data via TGG’s award-winning Carrot Insurance brand.

Carrot’s direct interaction with its installed customer base has driven innovative product development, including the latest telematics smartphone based “Better Driver” app, which  recently won the prestigious 2019 UK Insurance Times Technology and Innovation Award for Best Customer Mobile app.

“Carrot’s award-winning technology has modified driver behavior in a positive way, and we are eager to make our learnings accessible to insurers,” said Nino Tarantino, CEO- Americas, IMS.

Accessing this critical data will enable insurers to:

  • Improve policyholder engagement
  • Offer a reward platform that builds loyalty
  • Motivate safer driving behavior
  • Realize the positive impact on combined ratios

“We have developed and tested our insurance telematics propositions with our own Carrot customers so our insurer partners don’t have to,” Tarantino continued.  “No other telematics service provider has this kind of direct-to-policyholder experience and insight, but we do through Carrot, and we want to share what we have learned with the insurance companies we work with.”

Carrot, which launched in 2012, has since overseen a 42% reduction in the number of accidents among its customer base, thanks to its pioneering technology and an active risk management program, including rewards for good driving, which has turned the insurance experience on its head for policyholders.

Carrot’s policy has also built customer loyalty. The company has returned $5M to customers during the past seven years and the rewards program, in turn, offers a built-in incentive for consumers to check their status and driving feedback.  In doing so, frequently, consumers drive better and safer.

“Carrot’s telematics program has made a previously unprofitable market segment for us profitable again,” said Ed Rochfort, Managing Director of Carrot Insurance. “By analyzing telematics data we’ve been able to dramatically improve our risk pricing while reducing the cost of claims. A huge win by all accounts.”

“We’re making big improvements in reducing the cost of motor claims for our insurer clients, saving them time and money by providing indisputable proof of what actually happened in an incident. We believe Carrot’s claims data analytics has reduced CORs for our insurer partners by 7.7%,” Tarantino said. “In turn, our insurance customers are using these same insights from Carrot to create their own digital insurance strategies.”

For further detail on the Carrot difference, insurers can download IMS’ Carrot case study to access learnings and insights from this award-winning offering: https://www.intellimec.com/carrot-insurance-rewards-case-study. Alternatively, insurers can contact IMS for more information at: https://www.intellimec.com/carrot-insurance-insights.

About IMS

IMS, part of Trak Global Group, is a leading connected car and telematics solutions provider, delivering services and analytics to insurers, governments and enterprises. IMS is the developer of the cloud-based DriveSync® connected car platform which has received industry acclaim for its ability to offer customers a data source-agnostic, multi-device strategy for service provision.

About Trak Global Group

Trak Global Group (TGG) is one of the world’s largest telematics companies, gathering and interpreting data from connected devices to help organizations manage driver and vehicle risk. The group has long-standing partnerships with global insurers, leading motor manufacturers, corporate fleets and daily rental companies and is the UK’s largest insurance telematics business.

In late 2018, TGG acquired IMS, the 3rd largest insurance telematics business in North America. In addition to its partnerships with major insurers, it has more than 130 patents associated with connected car services and has pioneered the use of telematics technology for Road Usage Charging in the United States.

In September 2019, private equity house Three Hills Capital Partners took a significant minority stake in the business, providing in excess of $50 million in growth capital.

About Carrot Insurance

Carrot Insurance, also part of TGG, is a UK-based, award-winning telematics insurance broker specializing in novice drivers. In 2015, Carrot received the Prince Michael International Road Safety Award for its work in reducing young driver accident frequency, and in 2015, it launched Better Driver, an app-based product representing the UK’s first mass-market usage-based insurance product.

For more information on IMS:

Visit: https://www.intellimec.com

Hub International Acquires Ontario-based PDF Financial Group Inc.

Chicago, October 8, 2019Hub International Limited (Hub), a leading global insurance brokerage, announced today that it has acquired PDF Financial Group Inc. (PDF). Terms of the transaction were not disclosed.

Based in Toronto, Ontario, Canada, PDF is an independent brokerage offering consulting and outsourcing services for employee benefit programs, human resources, and related financial advice. Peter Demangos, Founder and President of PDF, will join Hub International Ontario Limited (Hub Ontario).

The move continues to reinforce Hub’s ongoing Canadian employee benefits growth and services strategy to expand its best-in-class employee benefits and retirement solution, addressing the challenges clients are facing, including in benefits communication, health and wellness, and retirement.

About Hub’s M&A Activities
Hub International Limited is committed to growing organically and through acquisitions to expand its geographic footprint and strengthen industry and product expertise. For more information on the Hub M&A experience, visit WeAreHub.com.

About Hub International
Headquartered in Chicago, Illinois, Hub International Limited is a leading full-service global insurance broker providing property and casualty, life and health, employee benefits, investment and risk management products and services. With more than 11,000 employees in offices located throughout North America, Hub’s vast network of specialists provides peace of mind on what matters most by protecting clients through unrelenting advocacy and tailored insurance solutions. For more information, please visit www.hubinternational.com.

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