London insurance market loses £4.5bn premium to Brexit

London insurers lost a whopping £4.5 billion premium last year as companies restructure for Brexit  says the International Underwriting Association (IUA).

This ‘controlled’ premium was previously written in European offices but managed by London market companies. The London market still wrote some £6.2bn in controlled premiums, which are written outside the UK’s capital but managed within, last year. But this is down from £8.8bn in 2018.

The IUA said planning for Brexit had cost London market companies.

“Reorganisation and the impending loss of financial services passporting rules has meant that a large amount of business written in Europe is no longer overseen and managed in the same way by London, but reported directly to operations located within the EU,” said Dave Matcham, its chief executive.

“Such restructuring has increased costs for IUA members, making them globally more inefficient and, ultimately, less able to offer a better deal for clients,” he added.

Overall, London market companies increased premium income from commercial and wholesale risks by 10% last year to £21.4bn, the IUA says in a new report. The figure rises to £27.6bn when combined with £6.2bn in controlled premiums, but excluding those now recorded by European entities.

The IUA said London market companies had seen strong premium rate increases across almost all business lines in 2019. “The hardening market conditions are supplemented by firms developing growth areas such as cyber and transfers of business from Lloyd’s of London into the company market,” it said.

The IUA’s annual statistics report recorded three new lines of business. These were: political risk, which recorded premiums of £261m; trade credit, where premiums totalled £243m; and standalone cyber with premiums of £253m.

Mr Matcham said the London company market had returned “a remarkable performance” in 2019, with growth in energy, aviation, property and professional lines. He added that business written through managing agents with delegated authority increased by 28%.

In its tenth year, the IUA’s statistics report has tracked growth in the London company market from premiums of £19.6bn in 2010.

“The make-up of market participants has also altered with an increase in overseas capital, consolidation among the largest players and firms increasingly operating in both the Lloyd’s and company markets,” Mr Matcham said.

Hong Kong insurance premium increase by 10% in 2019

The Hong Kong insurance industry has announced a gross premiums of HK$566.9bn for 2019, representing 10.2 percent according to the latest insurance business statistics released by the Insurance Authority of Hong Kong.

The figures are based on audited returns and actuarial information submitted by individual insurers.

The authority said that in 2019, total gross premiums of general business totalled HK$55.4bn, an increase of 4.4%. Net premiums of general business increased by 8.6% to HK$37.7bn. Underwriting profit rose from HK$583m in 2018 to HK$869m in 2019. Gross claims incurred by authorised insurers related to the recent social events were HK$1.3bn. Net claims were HK$411m.

In terms of classes of general insurance business, property damage business recorded total gross premiums of HK$10.3bn for 2019, an increase of 13.7%, benefiting from additional demands and hardening of rates on account of losses inflicted by super-typhoons in the past two years, said the authority. Accident and health business registered gross premiums of HK$18.3bn for 2019, an increase of 7.2%.

The Authority said that the improved overall performance for 2019was driven by direct property damage business, which saw underwriting profit expand from HK$199m in 2018 to HK$823m in 2019. It said this was offset in part by losses for direct motor vehicle business, which increased from HK$441m to HK$514m. Losses for direct employees’ compensation business also increased for 2019, from HK$150m to HK$260m in the same period, due to adverse claims experience.

Ethiopian, Oman Airlines provide insurance coverage for Covid-19

In partnership with AXA Partner and Awash Insurance Company, Ethiopian Airlines is providing Covid-19 coverage for passengers on the company’s international flights from 1 October 2020 to 31 March 2021.

Also, Oman Air is providing free insurance coverage to passengers who test positive for coronavirus within 31 days of travel.

Ethiopian Airline coverage called Sheba Comfort” is valid for 92 days for a round trip and 31 days for a one-way trip. It covers up to 100 000 EUR (117 500 USD) of medical and hospital fees.

The guarantee includes quarantine fees set at 150 EUR (176 USD) per day for a maximum of 14 days. Sheba Comfort also covers the repatriation costs in the event of a Covid-19 infection and provides 24/7 assistance via its hotline.

The Oman coverage, valid from 1 October 2020 to 31 March 2021, will include medical and repatriation expenses as well as quarantine accommodation. The cost of the PCR tests will not be covered by this policy.

This coverage does not apply to passengers holding an Omani resident card (non-citizen) traveling to Oman. Covid-19 coverage is underwritten by Oman United Insurance Company, Orient Insurance (Bahrain office) and Doha Insurance.

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