Insurance news – week commencing 17/07/22

week commencing 17/07/22:

Inflation is the big story for everyone this week: causing havoc, eroding insurers’ profits and leaving clients hugely exposed. However, if you’re on TikTok you presumably already knew that.

Mind the gap

A study from AGCS found that inflation is widening the gap between replacement costs and insured value and cited one example in particular where a Colorado commercial property’s declared value was half the rebuild value. External-link. [Insurance Business]

Above inflation pay rise

Head-hunters are targeting insurance industry talent with salary increases of up to 30%, forcing firms to make ‘aggressive counter-offers’ to hold on to staff. External-link. [Reinsurance News]

Towering premiums to tumble

The FCA is expected to regulate to push insurance companies and brokers to lower costs for leaseholders insuring high-rise apartments, following years of spiralling costs in the wake of the Grenfell Tower tragedy. External-link. [Bloomberg]

Direct Line hits bump in the road

Direct Line became the second UK motor insurer to warn on profits this week, with claims costs 10% above last year. It has been forced to shelve a £50mn share buyback due to rising inflation. External-link. [Financial Times]

Unappealing judgement

A successful appeal by a plaintiff claiming that Covid-19 caused direct physical loss or damage sufficient to trigger their BI coverage has set a “worrying precedent” according to analysts at Jefferies. External-link. [Reinsurance News]

The price isn’t right for reinsurers

Analysts at Goldman Sachs believe that reinsurers are yet to show evidence that they are benefitting from the hard market in their results but expect that continuing concerns about climate change will support further rate rises. External-link. [Artemis]

Under pressure

Zurich has warned that pressure from the cost-of-living crisis has resulted in £4.2mn in fraudulent property claims between January and May this year, an increase of 25% on the same period in 2021. External-link. [BBC News]

Going for growth

The Financial Services and Markets Bill will introduce a new duty on regulators to consider the financial sector’s international competitiveness. However, some are disappointed at the lack of metrics to hold regulators to account. External-link. [Insurance Insider]

Machines make bad co-workers

A study from the University of Pittsburgh suggests that automation in the workplace makes physical injury less likely, but is also associated with adverse mental health effects for those working alongside robots. External-link. [Insurance Journal]

The news where you are

Research by Ofcom found that the percentage of young adults using social media as their main source of news is rapidly increasing. TikTok is now used by 7% of all adults as their source of news, making it the fastest growing news source in the UK and creating concerns about the spread of misinformation. External-link. [The Guardian]

External-link. External links are being provided as a convenience to relevant content; they do not constitute an endorsement or an approval by Luther Pendragon of any of the services or opinions of external content. Luther Pendragon is not responsible for the accuracy, legality or content of these external sites. Please also note that some external content may require a subscription to view.