Morning Briefing: Insurance sector continues to grow, in two ways

Insurance sector continues to grow, in two ways…Consumers believe this affects their auto premiums… ACE names exec VP, non-life head plans for Chubb Group…

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Insurance sector continues to grow, in two ways
Global auditing specialists PricewaterhouseCoopers have released two reports that indicate growth in the insurance sector in two ways. Firstly it says that merger & acquisition activity for the insurance industry globally reached $80 billion in the first 7 months of 2015; a level not seen since 2010 when the whole-year produced $142 billion worth of deals. There have been fewer deals but the value has increased. Efficiency is one of the key reasons given for the M&A activity while capital requirements, including the European Union’s Solvency II rules, have also made merging desirable.

In a separate study PwC says that growth in the financial sector in terms of business volumes has continued to show healthy growth in the three months to September 2015, although the pace is slower than it was earlier in the year. Life insurance business volumes have grown for the fifth consecutive quarter. The survey of financial services businesses, undertaken in conjunction with the Confederation of British Industry, shows that concern about the global economy; including China and US interest rate rises; have dented confidence somewhat.

The CBI’s Rain Newton-Smith says that insurers and the wider financial sector are taking notice of emerging risks: “It’s interesting to see that the sector is waking up to the impact of FinTech. Firms will need to look carefully at their operations and put strategies in place in order to profit from or protect against the impact of new technologies.”
 
Consumers believe this affects their auto premiums
There are many myths and misunderstandings surrounding the insurance industry, as highlighted by a recent study by insurancequotes.com which found that 44 per cent of American consumers wrongly believe that their insurance premium will be affected if they drive a red car. This increases to 53 per cent of millennials and includes 45 per cent who are college graduates. Other misconceptions include 34 per cent believing that items stolen from a car are covered by auto policies and more than half not realizing that repairs are covered even after an at-fault accident. “These results indicate that millions of Americans need a refresher on what insurance does and does not cover,” says Laura Adams, insurancequotes.com’s senior analyst. “A lot of people will be pleasantly surprised to learn their car insurance covers all types of accidents and their homeowners or renters insurance policy covers theft.”
 
ACE names exec VP, non-life head plans for Chubb Group
ACE says that it intends to appoint Juan C. Andrade as executive vice President of the new Chubb Group and president of the international non-life insurance division, which encompasses operations with both retail broker and wholesale market distribution. The appointment will take place once the acquisition of Chubb has completed which is expected to be in the first quarter of 2016. Andrade is currently executive vice president, ACE Group, personal lines and COO of ACE Overseas General, the company’s international non-life insurance division in more than 50 countries and territories outside North America.
 

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