News in numbers
Verdict InsurTech gathers the most important industry news in recent times, including some startling figures
$200bn
A planned global cyberattack caused by ransomware has potential to wreak havoc on the global economy with potential losses hitting $200bn, reveals a new report.
The report, issued by the Cyber Risk Management (CyRiM) project – the Singapore-based public-private initiative that assesses cyber risks – estimates that the planned attack could also affect more than 600,000 businesses around the globe.
Titled ‘Bashe Attack: Global infection by contagious malware’, the report shows that a ransomware attack on a large scale will reduce productivity and consumption, increase IT clean-up costs, ransom payments and supply chain disruption.
In the report’s scenario, the attack is launched through an infected email, which, on opening, has potential to encrypt all data on 30 million devices worldwide within 24 hours.
Subsequently, companies of all sizes would be forced to pay a ransom to decrypt their data or to change their infected devices.
The report also forecasts that total claims paid by the insurance sector in this scenario would be between $10bn and $27bn, where the loss of data from the malware triggers additional claims for data and software loss.
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$25m
American insurtech start-up Jetty has raised $25m in a series B funding round led by Keith Rabois of Khosla Ventures.
The funding round was also joined by the start-up’s existing investors, including Valar Ventures and Ribbit Capital.
Jetty provides low-cost insurance for renters that protect them from problems ranging from bedbug infestations to electronic damages.
The New York-based company also delivers deposit insurance along with lease guarantor services. It competes with insurtech start-ups such as Lemonade and insurers like State Farm and Geico.
As part of the investment, Khosla Ventures managing director Keith Rabois will join the Jetty’s board of directors.
The latest investment brings the fintech company’s total funding to over $40m.
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140
Up to 140 people could be affected by LV redundancies due to the firm’s new restructuring plans.
The UK-based insurer has put forward a change to the claims team. As a result, this may affect the offices in Bournemouth, Ipswich and Leeds and put jobs at risk. Jobs affected will only relate to the General Insurance business.
However, it is said that the vast majority of those affected will be offered other roles.
Martin Milliner, claims director for LV= General Insurance, said: “The motor insurance industry is changing fast and customer expectations are increasing. To make sure our customers stay at the heart of what we do and that we keep pace with our competitors, we need to adapt and improve our claims handling processes, so we’re proposing to make some changes.
“As a result of these proposals, we’ve had to make the difficult decision to put the people who work in certain teams at risk. These changes will affect around 140 people, less than 10% of the overall Claims team, but we will be able to offer the vast majority of those affected other opportunities in our business and keep unwanted redundancies to an absolute minimum. The people affected work in our Bournemouth, Ipswich and Leeds offices. These sorts of decisions are never easy to make and we’ll be doing everything we can to give our people all the support they need.”
The business, Britain’s biggest friendly society, currently employs around 2,000 people in its three buildings.
The firm has history of this. In September 2017, it revealed it had axed 400 jobs group-wide during the previous 12 months as part of its strategy to save over £40m in operational expenses by the year after.
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$58m
Insurtech firm CoverHound has raised $58m capital in new Series D funding round led by Bermuda-incorporated specialist insurer Hiscox.
The other investors in the funding round were Chubb, Aflac Ventures and Japan-based MS&AD.
CoverHound operates as a property and casualty insurance platform for digital distribution. Through its subsidiary CyberPolicy, the insurtech company offers cyber insurance to small businesses.
With closing of the latest funding, the total capital raised by the Insurtech firm crosses more than $112m mark since its launch in 2010.
CoverHound said that the proceeds will be used to further develop CyberPolicy and to expand its footprint in California, North Carolina as well as Japan and other global markets.
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NEWS IN BRIEF
Leave.EU and Arron Banks’ insurance unit face fines over data breach
Leave.EU, a Brexit campaign group, and Arron Banks-owned insurance unit Eldon face fines totalling £130,000 from the UK’s Information Commissioner’s Office (ICO) over violation of data privacy rules.
The ICO, which published its finding following an investigation into the misuse of personal data for political campaigns, stated that both Leave.EU and Eldon Insurance (trading as GoSkippy) breached the Privacy and Electronic Communications Regulations 2003 (PECR) that governs electronic marketing.
The two entities face fines of £60,000 each for sending emails in August 2016 following the referendum and the ensuing year.
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Co-op insurance sale now a real possibility with Makerstudy
The much troubled Co-op Group could be set to sell its insurance arm to Makerstudy.
Valued at roughly £300m ($391m), the Co-op insurance sale is in advanced talks, but nothing has been decided.
Makerstudy Group, a privately owned company, already owns 5% of the UK’s motor insurance policies.
GSO, the credit arm of Blackstone, is one of the approached parties to help Makerstudy fund the acquisition.
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No threat to EU financial stability from British insurers in hard Brexit
The British and Gibraltarian insurance firms, which are yet to transfer contracts with European Economic Area (EEA) customers to the bloc, do not pose any threat to the financial stability of the EU.
This is according to the European Insurance and Occupational Pensions Authority (EIOPA).
The EIOPA was quoted by Reuters as saying that the biggest insurers in the UK and its overseas territory Gibraltar are transferring approximately 30 million contracts to ensure ‘continuity’ is not affected even if Britain comes out of the EU without a withdrawal Brexit deal in March 2019.
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Zurich restructures Canadian insurance operations
Commercial insurance provider Zurich has reshuffled its organisational structure and team for its Canadian operations.
The new structure and team, according to Zurich, is part of its plan to streamline and boost its ‘go-to-market approach’.
The latest organisational structure follows the recent appointment of Saad Mered as the CEO of Zurich Canada.
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UK and EU sign tentative Brexit deal on financial services
The UK has signed a tentative deal with the EU to provide domestic financial service providers continued access to European market following Brexit.
Citing government sources, a report from The Times stated that both the parties agreed on all key aspects of future partnership including information sharing.
It added that the deal will enable UK companies to operate across the European markets till the British and EU financial regulations are aligned.
As the UK is set to leave EU in March next year, all the major global banks with operations in the country had to restructure their operations.
Many financial companies have set up new hubs and moved their staff to new locations, as a part of this reorganisation.
Under the current system, EU allows foreign banks and insurers access to the European market when they are guided by similar financial regulations.
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