Re/insurers are experiencing more scrutiny and pressure than ever before to comply with a myriad of new climate change-related standards, frameworks and reporting requirements. Ultimately, it is positive for the industry and the communities around the world in which they do business, says Pro Global Head of Insurance Services Richard Emmett.
There have been clear policy signals globally for some time now that climate and environmental related impact reporting is rising up the regulatory agenda. Different governments are moving at different paces, but November’s COP26 conference in Glasgow, UK, was a clear focus point and call to action for all.
Just ahead of COP26, the UK government announced it would enshrine mandatory climate disclosures for the largest companies into law. Firms will be required to disclose climate-related financial information, ensuring they consider the risks and opportunities they face as a result of climate change.
It is likely that other regulatory authorities will follow suit, while rating agencies are also actively exploring how best to analyse climate change in their rating assessments, especially those that assess investments in fossil fuels.
At the same time, re/insurers themselves are responding to pressure to play their part in accelerating the transition to net-zero emission economies by shifting their underwriting portfolios away from carbon intensive industries. A key initiative gaining momentum here is the UN-convened Net-Zero Insurance Alliance (NZIA), which at the time of writing brings together 15 of the world’s leading insurers and reinsurers to commit to individually transition their underwriting portfolios to net-zero greenhouse gas emissions by 2050.
Limited knowledge
However, Fitch Ratings has warned that enhanced climate risk disclosure will challenge some corporations due to limited and inconsistent knowledge of environmental issues and how standards can be implemented across an organisation, tracked and reported on.
In addition, the International Financial Reporting Standards Foundation Trustees announced during COP26 the creation of the International Sustainability Standards Board with a vision to achieve consistent and global climate impact reporting standards. This will be critical in helping corporations and stakeholders consistently navigate the current myriad of sustainability standards, frameworks and metrics.
Whether they be mandatory reporting or voluntary initiatives, it is clear that much still needs to be done to achieve consistent, global standards for assessing and reporting on climate vulnerability and risk associated with the transition to a low-carbon economy.
But what is clear is that the re/insurance sector as well as its regulatory authorities, investors, shareholders and other stakeholders are energised and focussed on their responsibilities when it comes to climate change. It is no longer an issue that is up for debate or one that companies can gloss over or ignore.
There is much scrutiny and absolutely no room for greenwashing – and standing still is not an option for any re/insurer. Increased regulation, more sophisticated and demanding consumers and the simple humanitarian imperative to transition to net-zero mean that many re/insurers need to change how they operate, while still delivering value consistently in a challenging and constantly changing environment.
Getting methodologies in place
It is critical therefore to work with a partner who can combine subject matter expertise with deep methodology knowledge and business transformation skills, to help re/insurers deliver tangible and sustainable results, and to be able to independently verify their efforts.
Our consultants are highly experienced insurance practitioners who can work across your organisation, with your staff and within your teams for all your project and change requirements. Our specialist teams provide a complete range of insurance and underwriting support services, together with audit and risk assessment services across the entire insurance value chain.
As one of the largest providers of audit services to the Lloyd’s and Company markets, our team has practical experience in underwriting, technical accounting / finance, claims adjusting, IT and compliance.
Working together we can achieve the ambitious goals set during COP26 and beyond. We are committed to helping re/insurers comply with climate change reporting standards as they come on board, and accurately and independently verify their efforts and achievements.
Name: Richard Emmett
Job title: Head of Insurance Services
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London, 6th January 2022: Global re/insurance outsourcing and consulting specialist Pro Global Holdings Limited (‘Pro’) has announced an exciting re-positioning of the company, moving it from being a Trusted Provider to a wider, more holistic Trusted Advisor role.
With a new website, updated branding under the banner of ‘Expert Guidance – Specialist Implementation’ and a recalibration of its offering, Pro has grown from a company founded in 1993 to provide expert run-off services to one that now delivers deep insights and advice across a broad range of insurance areas and specialties, backed by a highly knowledgeable international team.
The business is focused on four key areas: supporting clients with improving underwriting processes, cashflow management and accounting services; complex claims management; consulting, audit and advisory services; and our sister company pro MGA Solutions which provides a flexible global platform for ambitious MGAs.
Steve Lewis, CEO of Pro Global, said:
“As we move into 2022, demand has never been stronger from the re/insurance sector for a trusted advisor to help simplify, transform and enable profitable growth in their operations. Pro Global is the unique, ‘onshore and local’ specialist insurance expert and I’m very proud of the excellent reputation we have established in the industry to date.
A huge amount of time, effort and deep thinking has gone into this rebranding and repositioning of ourselves in the global insurance market, and I’m extremely pleased with the result the team has produced to take us forward.
We remain exclusively specialist re/insurance experts, working with insurers, brokers, MGAs, risk modelers, and insurtechs offering holistic advisory, outsourcing, auditing and incubating services.
2022 will see us focus on growth across all areas of our business, as well as expanding our strategic partnership model as we look to continue to develop as a platform partner ecosystem to deliver the best possible outcome for clients.”
Pro supports many of the largest Lloyd’s syndicates, as well as leading P&C insurers and reinsurers worldwide, employing over 650 people from offices based in London, New York, Cologne, Buenos Aires and Sao Paulo.
– ENDS –
Notes for Editors:
About Pro Global
Pro is the leading trusted advisor for the specialist insurance sector.
Founded in 1993, Pro has some 160 clients spanning the global insurance market, including insurers, reinsurers, brokers, MGAs lawyers and corporate investors.
For more information, please visit: www.pro-global.com.
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Mike Keating, CEO of the MGAA discusses the state of the MGA market with Danny Maleary, CEO of Pro MGA Global Solutions (‘Pro.MS’),.
We know MGAs and indeed the whole market has been experiencing interesting times but there are still opportunities and exciting times for hungry MGAs who are ahead of the curve.
In this discussion they provide opinions on the following:
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London, 20 December 2021: Global re/insurance trusted advisor, Pro Global Holdings Limited (Pro), has announced the incubation of ambitious environmentally focussed MGA, Tierra Underwriting Limited (Tierra), by its independent Managing General Agent incubator subsidiary, Pro MGA Solutions (Pro.MS).
Tierra is a Managing General Agent (MGA) that underwrites on behalf of two Lloyd’s syndicates, Argo Syndicate 1200 and Ascot Syndicate 1414. Tierra provides underwriting services on behalf of each of these partners for credit insurance related to green project finance transactions.
Tierra now operates as an Appointed Representative under the FCA permissions of Pro MGA Solutions who provide regulatory oversight, compliance and back office services.
Danny Maleary, CEO of Pro MS, said:
“As an independent MGA incubator platform, we are known for our ambition to provide a unique, innovative and entrepreneurial environment for underwriters – particularly those with a strong focus on green underwriting where Pro.MS can provide the perfect springboard for growth.
We are delighted to have entered into this agreement with Tierra who are developing a strong reputation in the credit insurance and renewable energy banking markets.
Over the last year we have been embracing global growth and as we head into 2022, we expect to see this success continue as we remain laser focused on being the partner of choice for a broad range of insurance providers.”
Andrew Beechey, Managing Director at Tierra, commented:
“Tierra is a company of dedicated individuals who are passionate about environmental issues and we are fully committed to supporting transactions that benefit the planet. We set up Tierra in response to a need for credit insurance capacity dedicated to supporting green project finance transactions.
This partnership with Pro.MS will allow us to provide a full-service underwriting platform to our clients and will help us to take the next steps in our exciting growth plans.”
About Pro Global
Pro Global is a specialist insurance expert and companies across the global insurance sector come to us to transform, outsource, audit or scale their specialist insurance operations. We provide advisory, change consulting, outsourcing or auditing services as well as MGA incubation.
We were founded in 1993 as a run-off services provider. Since then, we have developed deep expertise in a broad range of specialised policy areas with over 600 staff around the world. We have offices in London, New York, Cologne, Buenos Aires and Sao Paulo and can deliver multi-territory solutions for businesses of all sizes and specialisms.
For more information, please visit: www.pro-global.com
About Tierra Underwriting Limited
Tierra provides long-term credit insurance for individually selected green project finance transactions right across the world. We underwrite on behalf of our capacity providers, who must be rated A+ to qualify as one of our insurance partners.
Our knowledge and expertise allow us to offer an efficient and flexible underwriting service and an insurance solution tailored to the needs of each of our clients.
For more information, please visit: https://www.tierraunderwriting.com/
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Steve Bellingham, Pro Global’s Head of Strategy, Disease and Injury, was recently interviewed by Mark Geoghegan, host of the popular Voice of Insurance podcast, to explore the hot topic of sports injury claims.
Increasing volumes and severity of Sports Injury claims is an issue that is front-of-mind for many UK liability insurers, particularly in relation to the potential for sports head injuries developing into a new source of casualty claims.
There have been regular high profile news stories in the media covering ground-breaking medical research and legal rulings about the potential causal link between head injuries sustained while playing contact sports and devastating illnesses such as dementia.
Professional and amateur sports
Crucially, this does not simply relate to professional contact sports but amateur as well with popular sports such as football, rugby and boxing – with the potential to develop into mass tort and a significant new liability exposure as well as arguments about duty of care and causation.
Talking with Mark Geoghegan on the topic, Steve Bellingham commented: “The sports sector has always produced liability claims but what we are seeing now is a new tranche and a different type of claim that will carry with it its own particular complications and issues.
There have been a number of high profile cases reported in the media but what we are increasingly seeing are cases and claims involving allegations of the on-set of neurological conditions such as the early on-set of dementia – as a result of repeated events over time such as head injuries or impacts and concussion.
Insurers need to understand what their potential exposures might be on an historic basis as it looks as if there will be a lot of potential claimants and defendants out there. It is particularly important for carriers to secure the best and most knowledgeable subject matter experts to help them navigate through these highly complex issues.”
Listen to the full recording of this informative interview here.
Name: Steve Bellingham
Job title: Head of Strategy Disease & Injury
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There’s no getting away from the fact that cybercrime is big business. Large scale attacks most notably come in the form of ransomware, where cyber criminals hack into a computer system, freeze and encrypt the user’s data, before demanding a ransom – usually in the form of crypto-currency.
In 2020 alone, it was reported that hackers received more than $350 million worth of cryptocurrency from cyber victims; a figure nearly three times as much compared to previous years.
The magnitude of these attacks has also increased; they are now sophisticated global events, set on bringing down technology service providers in the hopes of securing the biggest rewards.
The results can be highly disruptive, as seen with the recent cyber attack impacting payment systems including Coop supermarkets in Sweden. The attack was targeted on US-based IT service provider Kaseya, putting more than 1,000 businesses at risk and bringing a whole payment system down, with the true impact of the attack yet to be understood.
The latest prediction is that cyber-attacks will take aim at cloud-based SaaS platforms, encrypting cloud services and data; the most concerning of which – as reported by Forbes – is Ransomware 2.0.
Resilience is key
The frequency and scale of cyber-attacks are, without doubt increasing, and the focus for any organisation must be on resilience.
Insurance is one tool that companies turn to in order to improve resilience. And demand for cyber insurance has, unsurprisingly, rocketed. For insureds, not only do they need to get a better understanding and mitigation of their risk, but they need to get a handle on the exposure they are underwriting too.
In a previous article, I referenced how by 2022, the global cyber insurance market is projected to reach US$15 billion in value; current modelled cyber insurance pay-outs in the event of a significant cloud service provider outage, however, comes in at US$14.3 billion alone.
Mitigating cyber-attacks
However, the increasing sophistication of cybercrime can make it challenging to understand exposure to cyber risks and data breaches; however, the real vulnerability comes down to understanding a businesses’ cyber defenses and training, improving and preparing for an attack.
The solution to understanding and rectifying these weaknesses is through cyber audits. From risk assessments, user awareness training, security assessments, and even highlighting emerging threats and their preventive measures.
By understanding the risk, insurers can recognise what technology they – and their insureds – need to protect themselves. By undertaking regular cyber audits, insurance buyers can also demonstrate to their insurers the measures they have in place to counter the cyber threat – a demonstration that may prove useful in negotiating coverage terms and conditions.
Together with its expert cyber security partner, Cyber Security Associates, Pro conducts cyber audits for companies across sectors. To find out more visit https://pro-global.com/what-we-do/audit/cyber-audit/
To read the Pro Global 2020 and 2021 Gender Pay Gap Statement please download the PDF here.
Litigation in medical malpractice claims is increasing across Europe, and it is a trend that we expect to continue across both ‘claims made’ and ‘claims occurred’ markets.
The former policies cover incidents that happen and are reported within a policy’s timeframe and the claim lies with the original insurer that issued the policy, while occurrence policies have lifetime coverage regardless of when the claim is reported and which insurer has inherited the claim (if a book of business has been sold).
A split in the market
Currently, the European market is split, with Germany handling medical malpractice claims on a claims-occurred principle, while the rest of Europe works on claims-made principles.
Over the last 20 years, however, a combination of longer-term settlements and increasing treatment costs has meant insurers are looking closely at medical malpractice lines of business across territories.
Several factors are also impacting the cost of insuring medical malpractice, including a long-term and higher than inflation increase in the cost of treatments across the board, and an increase in longevity of claimants due to improved treatment options.
Uninsurable risks?
In Germany, larger players have already left the market and it is complex for new market entrants to join from a regulatory perspective. This, combined with the trend for increased litigation from social security carriers looking to recover long-term treatment costs, is driving up premiums.
Midwifery is a case in point, where in Germany the average self-employed midwife has seen premiums triple or even quadruple in some regions. This is an essential profession and clearly it is a situation that needs to be addressed.
Elsewhere in Europe
Beyond Germany, the claims-made principle markets in Spain and Italy see a more competitive environment between insurers, with higher fluctuations on coverage, and a rapidly changing picture in terms of market participants in recent years, particularly with respect to hospital insurance.
However, where some of the key players have underwritten significant lines, they are now in danger of claims developments catching up with them.
We are also seeing increasing direct requests from hospitals in Spain and Italy to enquire around self-retention of risk, with claims managed by Pro’s experts, as a more cost-effective alternative to the private insurance market. This also has the advantage of allowing hospitals to recover VAT.
COVID-19 Impact
It is likely that the pandemic crisis will have an impact on future medical malpractice claims, potentially driving up claims against hospitals and care home settings where it can be proven that patients originally contracted the virus.
Although it must be highlighted that we have not seen this trend emerge as yet, the impact of COVID should be a top priority for insurers taking on medical malpractice today, especially as the long-term impacts related to COVID on an individual level are still largely unknown.
Proactive claims management
Medical malpractice is, understandably, a very emotional and sensitive topic, and often leads to complex, multifaceted claims. But the reality is that most claims costs tend to be associated with social security carriers trying to recover money from insurers, over and above individual claimants, who rarely have to battle to recover costs for ongoing treatment and support.
Regardless of whether claims occurred or claims made principles are governing in the territory, we expect litigation to increase across Europe in the coming months and years.
A clear view of your exposure
As such, we strongly believe that insurers should embark on thorough reserve analysis and portfolio reviews, and carefully assess their claims administration procedures to ensure they have the most efficient, cost-effective procedures in place.
Providing clear and quick settlements wherever possible is essential in the medical malpractice market, while at the same time keeping control of legal costs and expenses.
This is prompting some innovative thinking from insurers and companies like Pro that work with insurers and medical establishments to help manage claims. Pro’s experts approach medical malpractice portfolios proactively, using a systems and data analytics approach to identify trends.
We also partner with medical malpractice experts to help advise on complex cases, and work to appoint panel law firms that reduce the timelines of claims disputes – a factor that works to the best interests of both claimants and insurers.
Having independent, expert advice during arbitration and litigation is essential to achieving transparent negotiating with policyholders and cedants.
Please get in touch to find out more about how Pro’s medical malpractice experts can support you.
London, 12 August, 2021: Global re/insurance outsourcing and consulting specialist Pro Global Holdings Limited (‘Pro’) is pleased to announce the appointment of Louisa Pavis to head up its Consulting business.
Louisa joins Pro from innovation-led private equity group Apater Capital, where she was Chief Operating Officer and Head of Advisory. Louisa’s background is as a professional transformation and change expert, with a deep understanding of portfolio management and programme delivery, including governance, management of incubator start-ups and heading up advisory servicing networks focused on harnessing technology and data advancements.
Prior to Apater Capital, Louisa was appointed as NED for Propel Consult Limit a specialist digital transformation consultancy focusing on robotic process automation and before that, she held senior strategic consultancy, change delivery and transformation roles at a number of household names including HSBC, Legal & General, Close Brothers, Prudential plc and MetLife. Louisa began her career as a consultant with Accenture.
Pro is a leader in providing consultancy services for the re/insurance industry and it has a strong record of creating value-creating solutions for its clients – combining subject matter expertise with business transformation capabilities. Louisa’s appointment reinforces further Pro’s commitment to working in partnership with its clients in areas such as major change and transformation projects, business analysis, process improvement, data and communications services.
Steve Lewis, CEO of Pro Global, said:
“We are a business of problem solvers and pride ourselves on providing our clients with innovative solutions to meet their often complex needs. It’s a real pleasure to welcome Louisa to the Pro team – I’m confident that her extensive consulting and change management background will be invaluable as we continue to enhance further our capabilities in this key area of our business. Louisa brings a wealth of highly relevant experience across multiple industries, as well as enthusiasm and strong management skills, and I know that our consulting business will be in very good hands under her leadership.”
Louisa Pavis, Head of Consulting at Pro Global, added:
“I am delighted to be joining the Pro team and am looking forward to bringing my cross-industry experience to bear in helping our clients translate their often complex strategic visions into prioritised business outcomes that generate real value. Pro has a proven track record of partnering with companies as they seek better, faster and more efficient ways of working – including in particular through innovation and automation – and I am very much looking forward to working with the team to help these clients achieve their strategic goals.”
– Ends –
Notes for Editors – About Pro Global
Pro is a leading international consultancy and service provider that focuses on delivering flexible outsourcing solutions for live and run-off business, operational consultancy and audit services exclusively to the global insurance industry.
Founded in 1993, Pro has some 160 clients spanning the global insurance market, including insurers, reinsurers, brokers, lawyers and corporate investors.
The company has over 500 employees around the world, with recent geographic expansion in Germany and North America. Pro has offices in London, Cologne, Zurich, New York and Buenos Aires, all supported by regional delivery centres, enabling Pro to act for clients across multiple markets, cultures and territories.
For more information, please visit: www.pro-global.com.
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The fundamentals: 5 key principles for robust and secure insurance auditing
An insurance audit can surface insight that help navigate a businesses’ growth trajectory. Best practice insurance audits are underpinned by these 5 principles.
1: Document collation
Collating all relevant documentation to commence the audit process is a complex process, but one which the insurance audit depends upon.
Documentation required for this process includes:
2: Process mapping
Process mapping ensures that the complexity of a business process does not block anything or cause operational issues. Responsibilities, success indicators and quality assurance all fall within the area of process mapping. There are a number of key tasks involved:
3: Operational evaluation
Operational evaluation involves deep scrutiny of business processes. Accounting and operational procedures are thoroughly examined, including mid-term adjustments, query monitoring and unallocated cash management. The claims management and automatch system are also evaluated to ensure accounting is clearly defined, reporting is accurate and that accounts are reported punctually and accurately to the general ledger.
4: Control policies
From theft to mismanagement of funds, there are many risks attached to poor internal controls and policy management. A robust insurance audit should evaluate and optimise policies on:
5: Reconciling records
As a fundamental aspect of a robust insurance audit, reconciliation covers a number of key areas that enable compliance and boost growth:
The insurance audit landscape
Assuring the reliability of internal cash management processes is only possible through forensic auditing. In order to ensure the deep analysis and accuracy that defends a business, it is imperative to leverage specialist knowledge.
As part of the insurance audit, a TPA’s internal control environment can be verified through a third-party audit.
During a TPA audit, detailed tests can be conducted on the claims processed during a defined time period and forensic analysis can help identify irregularities in claims and policies.
A typical TPA audit includes rigorous inspection on TPA services and risk mapping covering all data and major classes of direct and reinsurance business.
This process enables you to benchmark underwriting, claims, accounting and management of your business so you can be confident that your reputation, brand and quality standards are being protected.
Inspection teams undertake audit & due diligence programmes on an anonymised ‘third party’ basis to get a true picture of the TPA’s operations.
Coverholder Audit
Coverholder audits can focus on compliance, claims handling, claims reporting, underwriting, or systems and can help management teams review issues related to specific areas of concern, supporting decision making and informing wider strategic objectives.
Both coverholders and insurers can benefit from coverholder audits by enabling coverholders to identify opportunities to streamline processes.
In addition to identifying and reducing unnecessary operating expenditures, audits can improve credit control, reduce cyber threats, and ensure compliance with regulations.
Governance coverholder audit components
Operational coverholder audit elements
Most organisations have process maps which can be used and interrogated to identify the causes of unallocated cash. Having established the extent of the problem, a remediation plan can then be defined to allocate ownership. This includes identifying the resource required, as well as setting high level KPIs; this ensures progress is monitored and meets expectations.
A vital part of an insurance audit, the remediation plan will also enable you to assess the required budget to address the problem and then to maintain an effective cash management process thereafter.
5 key components to an unallocated cash audit
Access to historic data: Where cash relates to historic systems or acquired accounts, access to the data is essential when undertaking an insurance audit. Where the data is simply not available a decision has to be made as to whether the business requests information from brokers or clients.
Access to technical resources: Where technical transactions are incorrectly processed or missing, technical resources will be needed to reprocess transactions so the cash can be cleared.
Query resolution: Robust query monitoring is necessary to ensure that queries which are preventing the allocation of cash are answered.
Interaction with credit control: Procedures should be established to ensure the immediate referral of identified funding and previously unidentified outstanding aged debt (premium or claims) become apparent.
Write-off parameters: Cost efficiency dictates that an acceptable de minimis limit for investigation is set.
Defending your business against legacy and ongoing threats requires a rigorous insurance audit. Keeping the above principles and operational components in mind will ensure the process is a useful one.
The Ultimate Insurance Industry Toolkit:
