Insurers must tighten up cyber exclusions: Horgan

Compiled by Insurance24

HARARE, The underwriting community needs to do more due diligence on policy wordings to make sure cyber exclusions in property and other lines of business will actually apply when an event occurs, according to Paul Horgan, head of North America commercial insurance at Zurich NA.

In an interview, the executive told The Insurance Insider that he agreed with the view that the solution for tackling cyber exposure is to build dedicated coverage towers and then exclude it from other lines.

But he warned that the market is not being disciplined or thorough enough in its underwriting of those other lines, particularly in relation to property forms where buyers and their brokers are trying to add cyber coverage back in.

“There is a concern that with a lot of the manuscript forms out there the exclusions being put into policies aren’t doing the work we expect them to do.

“Underwriters are not doing the due diligence of reading the forms from start to finish and we think that unintentional coverage grants are being built in, or that the peril is not being excluded as people think,” he said.

Horgan said Zurich NA has been engaging with brokers to ensure forms are clear in their intent, not in order to restrict cover, but to avoid unintended consequences.

“We’re putting out a lot of net capacity that we’re expecting to have our reinsurers support us. We’re very concerned and the industry should be very concerned about higher net exposure to cyber in property than they think.

“I don’t think it’s intentional, but if there’s a large loss, I think people are going to go to the contract,” the executive continued.

He also suggested that it is in the interest of brokers to make sure there is sufficient clarity around cyber exclusions in coverage.

“It’s a mutual thing. The carriers don’t want unintended net exposures larger than we think we’re putting out, or brokers don’t want E&O exposures out there. Our customers don’t want litigation, our brokers don’t want to get involved, and we don’t want to litigate,” Horgan continued.

He observed that in some cases, buyers currently unable to access sufficient standalone cyber capacity are trying to buy protection as part of property and liability policies.

“That leakage can create a real challenge, especially if hit with a major business interruption event,” the executive suggested.

Instead the risk should be pushed to skilled cyber underwriters with clear policy language and available capacity, he said.

InsuranceInsider

Hollard Life Namibia embraces real-time data analytics with SilverBridge

By Insurance24

HARARE,  Hollard Namibia, the largest privately-owned insurance group in the country, has contracted SilverBridge Holdings to implement a Microsoft-based business intelligence (BI) solution and enable it to extract meaningful insights from its data to help drive business strategy.

“Previously, Hollard did not have access to dynamic information despite the wealth of data at its disposal. The SilverBridge approach focused on integrating both the people-centric and data-rich elements of insurance which placed us in a strong position to assist them in taking the next step,” says Kelly Preston, Data Analytics Manager at SilverBridge.

SilverBridge customised a dashboarding solution by using Microsoft PowerBI as a tool to fit in with the client processes and provide a real-time view of its business position. This meant decision-makers could focus on delivering unbiased insights by having access to trusted data in an efficient manner.

“We wanted to help transition Hollard to be more pro-active in its decision-making process. As such, the project started with a strategic consulting session to ensure that the solution was aligned with the objectives of the business,” adds Preston.

Data warehousing and modelling as well as the design of the business intelligence (BI) solution were implemented through Visual Studio SSIS packages, Azure SQL, and Microsoft PowerBI. Frequent collaboration sessions were held with key members from Hollard to keep the solution aligned to the unique requirements of the organisation.

“Hollard now has a bespoke solution that is always available and provides real-time monitoring of its data. Information can be extracted as and when required empowering the business to make better informed decisions instead of assumptions based on a gut feeling. The data warehouse makes sure that no strain is placed on the production environment to maintain business as usual processes.”

The reporting capability of Hollard has also been streamlined to provide the insurer with information designed to give them a competitive advantage.

“Without pertinent data / information no strategic decisions can be made.” Francois Nel, Operations Manager at Hollard Life Namibia.

Silverbridge Blog

Chinese Court Sentences Anbang Founder To Prison For Fraud
Associated Press
SHANGHAI (AP) — A court in Shanghai sentenced the founder of the  Chinese insurance company that owns New York City’s Waldorf Hotel to

18 years in prison on Thursday after he pleaded guilty to fraudulently
raising billions of dollars from investors, state media reported.
Shanghai’s No. 1 Intermediate People’s Court also ordered the confiscation of 10.5 billion yuan ($1.6 billion) in assets from Wu Xiaohui, the former chairman of Anbang Insurance Group, which had gained a reputation for ambitiously expanding into hotels, real estate and insurance from Canada to South Korea.
Wu, who founded privately owned Anbang in 2004, has been accused of misleading investors and diverting money for his own use. He was detained last year and regulators seized control of Anbang in February. He was shown on state TV in March admitting guilt.
Wu initially had denied his guilt at his one-day trial, according to an earlier court statement. According to Xinhua, Wu concealed his ownership of shares in companies controlled by Anbang, filed false statements with financial authorities and lured investors by offering rates of return above that offered elsewhere. Much of the business relied on selling insurance products to raise investment capital.
It said he used more than 100 companies under his control to manage funds and authorities later recovered bank savings, real estate and other assets. Wu used his position to misappropriate 10 billion yuan
($1.5 billion) in Anbang’s deposits, according to Xinhua’s lengthy
report.
Xinhua said the court determined the length of the sentence according to the facts of the case, the severity of the crime, and its “degree of social harm.” It said more than 50 people were present at the sentencing, including Wu’s relatives and journalists.
Anbang last month said it was receiving a $9.6 billion bailout from a government-run fund. That would mean the government fund owns 98 percent of the company, wiping out most of the equity stake once held by Wu and other shareholders.
The company had engaged in a global asset-buying spree in recent years, raising questions about its stability. Anbang discussed possibly investing in a Manhattan skyscraper owned by the family of U.S. President Donald Trump’s son-in-law and adviser, Jared Kushner.
Those talks ended last year with no deal. The negotiations with Kushner Cos. about 666 Fifth Ave. prompted
members of the U.S. Congress to raise ethics concerns.
The Anbang case is one of a string of scandals in what had been a stodgy Chinese insurance industry long-dominated by state-owned insurers. The industry’s former top regulator was charged in September
with taking bribes and other insurers have been accused of reckless speculation in stocks and real estate.
The Communist Party has made reducing financial risk a priority this year after a surge in debt prompted rating agencies last year to cut Beijing’s credit rating for government borrowing. Anbang is being run by a committee of officials from China’s insurance regulator, central bank and other agencies. They have said its
obligations to policyholders and creditors are unaffected.
Over the years, Anbang grew to more than 30,000 employees with 35 million clients. It diversified into life insurance, banking, asset management, leasing and brokerage services.
Speculation is rife over possible sales of Anbang’s assets, which, in addition to the iconic Waldorf — purchased for almost $2 billion — include Dutch insurer Vivat NV, the San Francisco Westin St. Francis
and hotels, real estate and insurance holdings in Canada, Belgium and
South Korea.
One option for your unwanted life insurance policy: Sell it •       Whether you can’t afford the premiums any more or a prior need for the insurance is gone, one solution might be to sell it via a life settlement.
•       If it makes sense for your financial situation to explore this type of transaction, make sure you consider the tax implications.
•       Also be sure to shop your policy around, because there can be a big variance in the amount offered by different life-settlement companies.

When it comes to life insurance, there’s a variety of reasons why older Americans might wonder if they should let their policy lapse.
For instance, someone who put a policy in place before the estate tax exemption was raised this year — to about $11.2 million from $5.5 million per person — might no longer need the insurance to cover taxes. For others, maybe the premiums have become unaffordable or there’s no one they want to leave the money to anymore.
Regardless of the cause, one option for an unwanted life insurance policy is to sell it. That’s right: Get cash now from investors, who will get the death benefit when you die.

“It is a little weird … and it’s a morbid conversation,” said certified financial planner Ashley Foster, founder of Nxt:Gen Financial Planning in Houston. “But if someone is having trouble paying their premiums … or doesn’t have an insurable need, it can sometimes make sense.”
While the thought of strangers financially benefiting from your death might be creepy, selling a policy can be wiser than simply walking away from it or only getting the surrender value.
“It’s an asset like any other,” said CFP Barry Flagg, managing principal at Triangulum Financial Partners in Tampa. “If I had a mutual fund on my balance sheet and it didn’t perform how I wanted it to, I wouldn’t just give it back to the mutual fund company.”
Here’s the skinny on “life settlements.” How life settlements work The transaction basically involves a life-settlement company giving you cash in exchange for your policy. You no longer pay the premiums,
and when you pass away, the death benefit goes to the investor who now owns it.
Generally speaking, if you’re age 65 or older and your policy’s death benefit is at least $100,000, it could have value to investors, according to the Life Insurance Settlement Association. If you’re worried that a Tony Soprano-like hitman will appear to freeup that benefit quickly, there’s little need to worry.
When you sell the policy, it gets held in a blind pool overseen by a financial institution other than the buyer. Additionally, your policy can only be resold as part of a larger transaction that includes other
policies.
CNBC