News in numbers

Verdict InsurTech gathers the most important industry news in recent times, including some startling figures


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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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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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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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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iPipeline and dacadoo partner with health engagement app

iPipeline has announced its partnership with dacadoo in the form of a health engagement app.

The firms hope to deliver wellbeing propositions to the EMEA market.

dacadoo has developed a digital health engagement platform for life insurers. it provides a Health Score based on tracking movement, nutrition, sleep, and stress factors to aid users in managing their health. Therefore, dacadoo’s risk models can be used as a proxy for underwriting and simplifying protection sales.

iPipeline’s SSG digital platform is end-to-end and supports customers through producing quotations, completing applications, and underwriting. In addition, it helps with servicing, claims, and ongoing agency management.

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Co-operative Group plans to re-enter life insurance market

UK-based conglomerate The Co-operative Group is reportedly planning to re-enter the life insurance market as part of its strategy to tap its large customer base.

The company, which is making a comeback after six years, believes that it can attract customers, particularly among its 4.6 million members.

In 2013, the Manchester-based firm offloaded a bigger slice of its life insurance business to Royal London for £220m after the former found a £1.5bn capital hole in its banking unit, reported Financial Times.

Customers who opt for the Co-op’s life insurance plan will be offered two six-month payment holidays throughout the lifetime of the policy following a 12-month of qualifying period.

Additionally, they will have flexibility to reduce cover instead of paying back the shortfall. Meanwhile, the insureds can also select critical illness protection.

The Co-op deputy chief executive Pippa Wicks told the publication: “Life insurance is not new territory for us, we have a rich history in this area and we can see a clear need to come back into this sector and provide a distinctive Co-op solution for our members.”

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Scotiabank to offload insurance business in El Salvador

Canadian lender Scotiabank has signed an agreement to divest its insurance as well as banking operations in El Salvador to Imperia Intercontinental.

As per the terms of the agreement, Imperia Intercontinental will acquire Scotiabank El Salvador, its subsidiaries and Scotia Seguros.

The decision to sell both the business is driven by the bank’s strategy to concentrate on important markets that can generate meaningful scale for the group.

The deal, which is subject receipt of regulatory approvals, will result in an after-tax loss of about $170m in the second quarter of this year.

Commenting on the deal, Banco Cuscatlán and SISA Insurance chairman of the board of directors Eduardo Montenegro said: “We are pleased to announce this important agreement, with which we intend to enhance opportunities for the clients of both banks.

“We are confident this acquisition represents an exciting new development for our institutions, employees and for the country. We have a long-term commitment to invest in El Salvador and our main objective is to continue serving our customers in the best possible way.”

Imperia is the main shareholder of Banco Cuscatlan and insurance company Seguros e Inversiones S.A in El Salvador.

The latest move follows an announcement by Scotiabank to divest its banking operations in nine Caribbean countries.

The bank announced the sale of its life insurance businesses in Jamaica and in Trinidad and Tobago in November last year.

In December, it announced sale of its pension and administration and related insurance businesses in the Dominican Republic.

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New Vitality mental health cover package launched

VitalityHealth has launched a new Vitality mental health package to provide support and treatment to its members.

The optional Mental Health Cover module is predicted to make a difference to all members, not only those with severe levels of risk.

Vitality mental health cover provides access to early intervention and support. This includes unlimited Cognitive Behavioural Therapy (CBT) and counselling.

Furthermore, members will have access to an additional £1,500 ($1,935) for out-patient treatment. Also, the most severe cases will receive 28 days of more comprehensive in-patient or day-patient treatment.

As a result, VitalityHealth embraced a holistic approach to mental health and wellbeing cover. It became the only insurer to offer mental health cover as part of its core cover in 2016.

This allows for online support as well as up to eight sessions of talking therapy accessible through self-referral.

In addition, members can access a range of mental health apps for free or at a discounted rate. So far, nearly 20,000 Vitality members have logged over 200,000 mindfulness sessions through a range of apps such as Headpsace, The Mindfulness App, or Calm.

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Start-up Digit offers short duration home protection

Digit Insurance, a “new age” insurance company aiming to “Make Insurance Simple”, is offering a protection plan for stretches as short as a day.

The protection covers burglary of contents, including appliances, gadgets and also jewellery. In addition, damage due to natural disasters and fire is covered.

Digit’s home insurance product can extend between one and 180 days.

Speaking about this offering, Vivek Chaturvedi, Head of Marketing, said: “When we leave home for a vacation, we worry about our home contents especially from the fear of burglary. Which is why we put an extra lock, give the guard extra money, ask our neighbours to keep an extra watch, etc. The idea of this product is that people can secure their home for that period of time only, while they are travelling and are away from their homes. And that too at extremely affordable costs.”

Founded by Kamesh Goyal, and backed by the Fairfax Group, Digit hopes to reimagine products and redesign processes. Ultimately, the end goal is to provide simple and transparent insurance solutions that matter to consumers.

Headquartered in Bangalore, it recently raised $44m from Canadian billion Prem Watsa’s Fairfax Holdings. Following its second round of investment, Digit’s total funding stands at $94m.

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Aon partners with insurtech Claim Central to modernise claim management

UK-based re/insurance broker Aon has teamed up with insurtech firm Claim Central to digitise and modernise its claim management capabilities.

Under the terms of the agreement, Aon will leverage Claim Central’s technology such as live video streaming, aerial imagery, real-time chat, customer sentiment measures, and online payments to improve its claims process.

Aon reinsurance solutions business CEO Andy Marcell said: “Aon is committed to helping clients navigate the insurtech ecosystem and adopt new technologies that advance their strategic initiatives.

“Claim Central is utilising technology to make a meaningful impact in the area of claims management, and this is increasingly important for our re/insurer clients as they manage volatility following another active year for global natural disasters.”

As part of the strategic alliance with Aon, Claim Central will establish an Innovation Centre in Florida. The centre will help Aon’s re/insurer clients’ to slash implementation costs related to technology and help improve their claims processes.

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