Posts tagged "Commercial Client"

Plan ahead to avoid the impact of inflation on motor trade insurance premiums

September 22nd, 2022 Posted by Uncategorised 0 comments on “Plan ahead to avoid the impact of inflation on motor trade insurance premiums”

According to US bank Citi, consumer price inflation is set to peak at 18% in early 2023 — nine times the Bank of England’s target, raising their forecast once again in the light of the latest jump in energy prices.

This couldn’t come at a worse time for motor dealers as high running costs, new vehicle production disruption and staff retention/salary pressures continue to add strain to an already low margin industry.

Post-pandemic supply chain bottlenecks, higher energy and transportation costs, along with shortages of labour were already contributing to higher inflation at the start of 2022. Now the war in Ukraine has further fuelled global inflationary and supply chain pressures, affecting motor trade Business Interruption claims, due to longer waiting periods for parts and materials.

All of the above directly impact insurers’ overall claims costs, none of which were factored into their 2021 pricing.

Tight labour markets are also increasing the severity for large claims. In what has been described as the ‘Great Resignation’, skilled and unskilled workers are in short supply as many have changed career or taken early retirement, just as demand soared after the pandemic. In the UK, job vacancies outpaced unemployment in the first quarter of 2022 for the first time on record. Increased competition for workers and higher wages drives up repair costs, as well as the cost of defending legal claims.

The question being asked by insurers is where are costs going to go next?

To generate forecasts, actuaries look back at past influences on claims inflation to assist with their estimations of ongoing impact. However, with so many recent seismic events, actuaries can no longer rely on historic patterns or data.

Data on the claims impact of new technologies, such as hybrid and electric technology is sparse; however, specialist repairs are often necessary due to the high voltage exposure and the safe and responsible disposal of damaged batteries.

What we do know is that improvements in motor technologies, such as advanced breaking systems, lane discipline technology and light detecting headlamps are expensive and all impact the cost of vehicle repairs. For example, since 2013, Trend Tracker reports vehicle repair costs increased by 48% as a result of new technology, such as Advanced Driver Assistance Systems.

The fall in motor insurance claims during the pandemic has been widely reported, but less well understood is the bottleneck of personal injury claims which are taking insurers longer to process and impacting ‘claims experience’ within the motor trade sector.

It has been a challenge for injured parties to be examined and treated due to COVID-19 restrictions, and this has led to the processing times for claims taking longer than at any point over the previous four years. This delay in personal injury claim settlements meant that settlements in 2021 had a distinct bias to lower cost ‘vehicle damage only’ claims, temporarily preventing a sharper spike in claims inflation.

Furthermore, people are working longer and increasing their earning potential in order to fund retirement; damages awarded to injured parties are still rising faster than inflation. Medical advancements make survival following a serious accident more likely. While this is of course extremely positive, claim values are increasing significantly, covering future loss of earnings, medical and care provisions along with home adaptations.

Furthermore, insurers cannot ignore the huge impact of climate change, which is an additional concern. The UK has seen a considerable increase in the frequency and severity of flooding over the last 20 years. Forecasts indicate that similar weather patterns will continue in the short to medium term. According to the Met Office, record-breaking rainfall could be 10 times more likely by 2100.

On 18 July, Direct Line issued a profit warning, stating that the soaring prices of used cars, parts and longer repair times have pushed up the cost of claims. Following this, shares in the insurer plunged 13%, making Direct Line the biggest faller on the FTSE 250 to its lowest level since 2013, as the company said that overall claim costs are rising at about 10%.

Direct Line’s current predicament is not unique. The motor trade insurance market is no different. Higher used car prices, increased third party claims costs, longer repair times and inflation in the cost of car parts means insurance premium inflation has continued to fall short of the increases in claims inflation.

Steps you can take to control your insurance premium costs

Our businesses operate in a completely different world today, bringing new and challenging risk exposures, including Cyber threats and cultural employment risks, such as diversity & inclusion, all of which threaten our businesses, people, reputation and brand.

Motor dealers are greatly exposed to accidents and incidents, given the number of sites, vehicles and people within their control. Due to market capacity, insurance premiums weren’t fully reflective of these exposures previously, but after 19 years of insurance premium rate decline, motor dealers can no longer rely on ‘soft’ insurance premium rating.

Insurers are now taking a different approach from the normal ‘pound swapping’ insurance premium vs claims costs exercise that we’ve all become used to – this will no longer work!

An immediate change of focus is required. The only way to avoid increased premium costs is to implement a structured risk management programme in full collaboration with your broker and insurer.

With only seven recognised insurers underwriting motor dealer insurance in the open market, all with a history of incredibly narrow profit margins, motor trade underwriters’ primary focus is on the management of risk and whether it meets expectation. Insurers will be seeking firm evidence of a structured risk management plan, with full, board level buy-in and will also want to have direct input to ensure its effectiveness. Basically, underwriters’ want to see better risk management systems and controls so that the insurance you buy is the last line of defence – not the first!

Even insurer Long-Term Agreements (LTA’s) are now under scrutiny as there is pressure from reinsurers to make existing pricing work. Insurance companies are reviewing all long-term contracts with the view to exiting those considered unlikely to remain profitable.

There are further added benefits to improved risk management controls. Understandably, a motor dealer’s main focus will always be on the insurance premium cost, yet one exposure largely overlooked by motor dealers is their ‘retained risk’ costs. These are the costs of incidents that fall within a motor dealers’ policy excess and/or for damages deemed to be uninsured. In my experience, much of this cost goes unrecorded and lost in ‘miscellaneous’ expense but if properly accounted, can add up to a seriously large number.

Insurers consider pro-active risk management essential and motor dealers that embrace this culture now will receive valuable insurer support, avoid future increases in insurance premiums and reduce their retained risk costs.

Your approach to your insurance renewal can also make a difference. Start your renewal process much earlier than normal; insurers are becoming more selective about the risks they choose to write. Agree your renewal strategy with your broker, devise a plan to reflect your risk tolerance appetite and demonstrate your risk management controls.

Hamilton Leigh facilitates Risk Awareness Workshops for motor dealers, designed to help motor dealers identify and eradicate risk and hazards in the workplace, reducing exposure to accidents and incidents. The workshops are recognised by the specialist motor trade insurers and have a proven track record of creating a safer working environment, closer working relationships with underwriters and achieving significant cost saving benefits for motor dealers.

The Importance of Two-factor Authentication

September 13th, 2021 Posted by Uncategorised 0 comments on “The Importance of Two-factor Authentication”

Cyber-security is an integral part of risk management for any organisation. Cyber-criminals are capable of executing devastating attacks that can result in financial losses, reputational damage and government fines. With those potential consequences in mind, employers should be mindful and take any precautions that might be able to protect them, such as using two-factor authentication.

Insuring Automotive dealerships. Ensuring IT savings and security

September 13th, 2021 Posted by Uncategorised 0 comments on “Insuring Automotive dealerships. Ensuring IT savings and security”

Is it possible to find savings whilst improving the IT security within your automotive dealership? And why is cyber insurance so essential?

Major Changes to Flood Risk in the UK

March 18th, 2021 Posted by Uncategorised 0 comments on “Major Changes to Flood Risk in the UK”

The insurance market is currently going through an extensive period of ‘hardening’. Insurers are driving higher premiums and tighter terms and conditions, with particular emphasis on flood risk. This process will affect all sectors of the economy and it is crucial that business owners understand how this is likely to impact their insurance coverage and cost.

A major contributor to the ‘hardening’ market is natural catastrophe losses, which continue to escalate around the world. The systemic effects of climate change are here. Stronger and more frequent natural disasters, for example, are destroying homes and businesses at record-breaking rates and putting entire flood systems at risk.

2020 was significant in many ways. After three relatively dry years, winter 2019/20 saw major storms causing widespread flooding across the UK. Between November 2019 and February 2020, thousands of homes and businesses were flooded in South Wales, Northern and Central England and the Scottish Borders. These storms, costing in excess of £360 million, were a timely reminder of the challenge’s insurers face from the growing threat of flooding due to climate change. Furthermore, the flooding in parts of south Yorkshire and the Midlands in November last year added an additional £110 million to insurers claims costs.

The impact of climate change will see more than 1.2 million properties in the UK ‘newly at risk’ of flooding and 1.9 million addresses ‘newly at risk’ of subsidence by 2050, leading to a potential insurance liability of £122 billion, based on data from UK Climate Predictions and a 2˚C global temperature rise.

Global warming is already having an impact on our daily lives, but the effects of it will become far more tangible and extreme in the years to come. The reality is that global temperatures are continuing to rise and flooding is becoming more common place. If expected trends continue, a large number of properties will be newly impacted, which is why insurers have completely reassessed their flood mapping data to better manage their flood exposure.

As well as flooding, climate change is also increasing the risk to buildings stemming from subsidence. The dry summer in 2018 saw massive increases in losses and insurers are bracing themselves for a repeat of those losses in 2021/22.

As climate change brings more intense storms and rising seas, Britain faces rapidly growing and shifting flood threats; something few of those at risk are yet to be aware of, potentially facing the prospect of huge insurance premium increases, restricted flood risk cover or being unable to buy flood cover at all.

Insurers are exposed as Britain fails to confront flood risk

This lack of awareness, combined with fast-increasing demand for new housing, limited available land and often disjointed policymaking and regulation mean efforts to keep people and property safe are becoming more and more strained.

About 5.2 million homes and other properties in England are at risk of flooding. Sea levels have risen about 16 cm (6 inches) in Britain since 1990, making coastal areas more vulnerable to storm surges.

Heavier rainfall is degenerating surface floods away from rivers and shorelines, in places where we never previously expected them, as rain cannot run off fast enough. The Met Office has reported that extended periods of extreme winter rainfall are now 7 times more likely than before.

Owners of flood-prone homes in Britain can buy affordable insurance through Flood Re, a government and insurance industry initiative that shares the cost of flood risk across all home insurance policies sold.

Businesses, however, do not have access to this facility and, hit by more frequent and severe flooding, are finding it harder to buy or afford flood insurance coverage, raising the prospect of them being fully exposed to flood losses themselves. It is a sad reality that several businesses have been forced to close in this last year due to them being unable to secure flood insurance cover; required to satisfy their bank/stock funders.

We have huge pressures for growth in this country and government ambition to build more homes, presents us with a real dilemma. According to the Town and Country Planning Association, which campaigns for reforms in Britain’s planning system, increasingly relaxed planning permission rules meant more properties were being built in high-risk zones.

There’s also the added dilemma for many property owners and communities not wanting to discuss climate change and flood risks, fearing it might hurt their ability to get insurance or drive away buyers and investment.

Impact to insurers from losses related to climate change

Where global average temperatures have risen in the past, incidences of climate-related weather events tended to become both more common and more severe. Insurers protect society against these risks, and these events will continue to become more expensive to cover.

The insurance industry is, of course, used to dealing with losses from physical risks. For example, recent research suggests that the frequency of climatic natural disasters has grown as much as threefold since 1980. Despite such an increase, the industry has managed to demonstrate resilience and innovation in diversifying the risk. However, there is now concern whether further deterioration of extreme climatic events might result in an increase in the protection gap.

The first quarter of 2021 has seen many homes and businesses not previously situated in traditional flood risk areas, now affected by insurers’ reassessed flood mapping. This has had a significant impact on their insurance premiums and policy coverage. Hamilton Leigh has designed a Business Flood Plan template, available to all of our clients, in addition to a Flood Toolkit to help our clients proactively manage their flood risk exposure.

Invest in flood risk management

Business owners need to be investing in proactive flood risk management to provide practical and manageable solutions for underwriters to insure them against flood. To position yourself to do this as best as possible, working with knowledgeable partners is a must. Aligning with Hamilton Leigh to provide a united stance on presenting your requirements to insurers in the best and most accurate light is paramount for securing flood risk cover, where many businesses will struggle.

An increased frequency and severity of major weather events means a higher number of more costly claims for insurers to deal with, globally as well as in the UK.

To reduce exposure and resultant interruption to your business, it’s imperative that business owners recognise the need to improve their flood resilience, before the storm clouds gather, not after. 

What Hamilton Leigh can do to help you

  • Design a comprehensive and robust Business Flood Plan
  • Ensure your Business Flood Plan strategy is communicated throughout the business
  • Communicate your Business Flood Plan with your insurers to demonstrate your proactivity
  • Help you sign up for advance flood warning alerts in your area
  • Create Flood Toolkit templates
  • Guidance for the preparation of your property for flooding
  • Agree a risk retention strategy that accurately reflects the business’s risk tolerance appetite
  • Reassess loss prevention practices

The Environment Agency estimates that with proper flood preparation, most businesses can save up to 90% on the cost of lost stock due to flooding, with a proper Business Flood Plan.

It is now more important than ever to work proactively with Hamilton Leigh to ensure your interests remain fully protected.

For further information and to receive a copy of our Business Flood Preparation Checklist and Flood Toolkit, please contact your Hamilton Leigh client service executive or email

Unoccupied Property

January 26th, 2021 Posted by Uncategorised 0 comments on “Unoccupied Property”

As the third national lockdown continues, many are still unable to use their business premises. This may mean your business or your tenants have vacated the premises entirely or there is a change to the pattern of occupancy. In the past, the premises may have been occupied daily, whereas now they are only occupied on a limited number of days each week.

This could have implications for your insurance as most property insurance policies only provide cover where the premises are unoccupied for no more than a period of 30 days. Beyond this cover may be reduced or even automatically excluded. These conditions apply to both Building and Contents insurance.

During the first national lockdown, most insurers granted extensions to the 30-day limit, however, insurers’ have since ended these special arrangements. 

Given the current national lockdown, there is some uncertainty as to what stance insurers will take now if properties are vacated or unused or are only partially used.

The one known fact is that insurers must be advised where the occupancy has changed.

What you must tell us now:

If we arrange Business Insurance (Buildings and/or Contents) or Property Insurance for you as a property owner, please contact us if the level of occupancy has changed.

Examples of these changes include:

  • Part occupancy or complete vacancy of the premises during the working week
  • Significant changes to the opening times of business premises
  • Changes to physical, intruder or fire security (perimeter fencing/gates, alarms or CCTV)
  • Weekend occupancy (if not disclosed already)
  • New subletting to a third party
  • Change of tenants
  • In the case of multi-tenure properties, details of any vacant units or properties.

Have you changed your business activities?

You must also inform us if you or your tenants have either changed or diversified your business activities so that we can inform your insurer. This also applies to any business activities that you may have ceased.

What Happens Next

Once you have contacted us, we will notify your insurer of any changes to your property’s occupancy or security. This will mean you are meeting your obligation of ‘disclosure of information that your insurers need to know’. Policy terms may change but we would expect sympathy from insurers where you are meeting this obligation.

Should you wish to discuss this in more detail, please contact your Hamilton Leigh Client Service Executive.

FCA Business Interruption Insurance Test Case Appeal Supreme Court Ruling

January 26th, 2021 Posted by Uncategorised 0 comments on “FCA Business Interruption Insurance Test Case Appeal Supreme Court Ruling”

The Supreme Court handed down judgment on the FCA Business Interruption Insurance test case appeal on Friday 15th January.

This largely agreed with the High Court ruling, in favour of the FCA and those policyholders with Non-Damage Business Interruption policy wordings. 

The case was brought forward by the FCA to appeal certain issues on which it did not succeed in the High Court. Six insurance companies also appealed certain decisions made by the High Court and responded to the FCA’s appeal. The insurers were Arch, Argenta, Hiscox, MS Amlin, RSA and QBE; all of whom had their appeals dismissed. 

The Test Case was designed to achieve clarity for policyholders, by seeking a binding court decision on the meaning and effect of the twenty-one sample policy wordings, provided by eight defendant insurance companies, albeit only six insurers appealed the High Court decision.

The sample wordings were chosen to be representative of those in the market that provide coverage for:

  • Infectious and notifiable diseases (except where the policy contains a list of diseases or includes a limited number of notifiable disease).
  • Official actions or advice which affect a policyholder’s ability to access or use the insured premises.

The Supreme Court also considered the issue of causation and the basis on which successful claims might be quantified.

As previously explained, the vast majority of insurers were not party to the test case, nor are their policy wordings impacted by the Judgment. This is because physical damage to property is required by the majority of policies in order for there to be a valid Business Interruption claim or the list of diseases for which cover is provided is an exhaustive list and COVID-19 is not included.

The Judgment document consists of 114 pages, therefore, the FCA will publish a set of Q&As to assist brokers and their clients in understanding the test case ruling. The FCA will also publish a definitive list of Business Interruption policy types that potentially respond to the pandemic based on data that we will be gathering from insurers.

We welcome the clarity that the Judgment provides and we expect any issues not addressed by the Judgment will be assessed on a case-by-case basis as part of the normal insurance loss adjustment process. This should apply to all government restrictions, whether national or local, provided that a relevant policy was in force at the start of the relevant lockdown period.

Although the judgment establishes a number of points of principle on policy wording interpretation, the key point to keep in mind is that each policy and claim will need to be considered on its own merits, guided by points made in the judgment.

The Supreme Court’s judgment will be condensed into a set of declarations. The FCA and all defendant insurers are working as quickly as possible with the Supreme Court to enable the Court to issue these declarations.  

While there may never be a way to completely make up for the financial losses that the pandemic wreaked upon businesses, the Supreme Court ruling is one of the most significant for business in modern times. The result should leave the insurance industry in no doubt that they should immediately start doing the right thing and settle valid claims.

We have studied the judgment in extreme detail and written to those clients with policies which we believe to be affected, albeit we are still awaiting the definitive list from insurers. Should you have any questions that you would like to discuss or require any additional support, please do not hesitate to contact your Hamilton Leigh Client Service Executive.

Please click on the link for the Supreme Court judgment here.

A summary of the ruling from Herbert Smith Freehills can also be found by clicking on the link here.

What does the Brexit trade deal mean for you, your business and your business insurance programme?

January 7th, 2021 Posted by Uncategorised 0 comments on “What does the Brexit trade deal mean for you, your business and your business insurance programme?”

The Trade and Cooperation Agreement (TCA) signed by the UK Government and the EU on 24th December 2020 ensures tariff-free trade for goods will continue as before. The agreement stipulates how the two economies will interact on a vast range of issues but it does not currently provide access for UK insurers or brokers to the EU’s single market from 1 January 2021. This will impact the arrangement of insurance for businesses, people or property situate in the EU. It does not however impact the insurance of businesses that simply sells their goods into the EU.

Both sides agreed during the negotiations to discuss financial services separately. In a document published on 24th December, the UK. government said the agreement includes provisions to support trade in services, including financial services and legal services.

From 1st January 2021, UK financial services firms (including insurance companies and brokers) no longer have automatic passporting rights. Passporting previously allowed firms to sell their services into the EU from their UK base without the need for additional regulatory clearances.

In order to continue to access the single market without passporting, UK based financial services firms will have to rely on ‘equivalence’ decisions, currently being negotiated between The Treasury and their EU counterparts.

The UK has implemented a Temporary Permissions Regime to support EU based firms operating in the UK with passporting rights but currently, there is no equivalent EU wide scheme for UK firms operating in the EU. We are hopeful an agreement will be reached during the first quarter of 2021. As Britain’s Services sector accounts for 80% of our economy and employs over 1.1 million people, this has now become a priority.

We have been taking proactive steps to provide our clients with compliant insurance solutions in a post-Brexit trading world.  Over the last year we have been engaging regularly with insurance companies and our EU broking partners, preparing for this eventuality and to identify and mitigate any potential risks to our clients and their businesses.

Hamilton Leigh is committed to ensuring we continue to provide our clients with EU cover solutions, with continuity of service for their risk and insurance needs in the EU and has formed an alliance with an associated partner brokerage; Crotty Insurance Brokers Ltd, based in Dublin and regulated by the Central Bank or Ireland. This alliance enables us to continue supporting our client relationships and to provide a practical solution for those clients with businesses, people or property situate in the EU.

With regards to existing insurance contracts, EU coverage remains in force up until your renewal, at which time we shall agree a strategy for the year ahead. Please rest assured we will do all we can to ensure any changes are as seamless as possible.

We shall be in touch with you over the next few weeks to discuss your EU cover requirements in more detail but should you require more information in the meantime, please contact your Hamilton Leigh Client Service Executive.

You Might Need a Green Card if You Are Driving Abroad From 1st January 2021

December 30th, 2020 Posted by Uncategorised 0 comments on “You Might Need a Green Card if You Are Driving Abroad From 1st January 2021”

The UK formally left the European Union on 31 January 2020. Whilst we now have a Free Trade Agreement, uncertainty remains on whether this will be extended to facilitate access to the EU’s single market for UK financial services.

From 1st January 2021, UK motorists including road hauliers driving in the European Economic Area, Andorra, Serbia and Switzerland will need physical proof of motor insurance when they travel; commonly referred to as a Green Card, until such time as the EU Commission agrees that the UK can remain part of the Green Card Free Circulation Zone. The Green Card requirement will also apply to motorists in Northern Ireland driving across the border with the Republic of Ireland.

All European Economic Area (EEA) countries (EU countries, and Iceland, Liechtenstein, Norway) are part of a Green Card free circulation area, meaning that motorists based there do not have to carry Green Cards when visiting other countries in the area. UK motorists will be required to carry Green Cards for driving in the Republic and other EU states, until such time as the European Commission agrees that the UK can remain in the Green Card Free Circulation Zone.

Motorists failing to carry a Green Card when one is needed, risk having their vehicle seized and facing prosecution.

What is a Green Card?

A Green Card is an international certificate of insurance that proves you are insured to drive in the EU. They’re issued and signed by your vehicle insurer, and include your vehicle and registration details. You’ll need to have one with you if you’re driving in Europe and you’ll need a second one if you’re towing a trailer or caravan.

You also need to take your vehicle registration document (V5) to prove you own the vehicle and have a GB sticker on your vehicle and any trailer. In some countries you’ll need an international driving permit (IDP) Check if you need an IDP.

How long do they last for?

A Green Card can last for up to 90 days (or until you’re due to renew your motor insurance, if your renewal date is less than 90 days away), but you should check your policy booklet for details on how long you’re covered to drive in a single trip abroad.

What happens if my insurance renews whilst I’m driving abroad?

When you renew your insurance you’ll need a new Green Card for your new policy, even if you keep your insurance with the same insurance company. If you decide to switch to a new insurer, you’ll need to ask them for a new Green Card.

If you plan to be driving your vehicle abroad, please make sure you apply for a Green Card at least 3-4 weeks in advance of your trip as some insurers require a minimum of 3 weeks’ notice in order to produce the document.

What will happen if I don’t have a Green Card when I travel abroad?

You could be breaking the law, be refused entry into the European country, receive a fine and/or have your vehicle seized. Motor insurance policies do not cover loss or damage caused by the legal confiscation of your vehicle by HM Revenue and Customs, the police, a local authority or any other government authority – check your policy booklet for full terms and conditions.

What happens if I’m driving with a trailer or caravan?

You’ll need to inform us when you ask for your Green Card as you need a second Green Card for your caravan or trailer.

If you plan to take a commercial trailer weighing over 750kg or a non-commercial trailer weighing over 3,500kg, you must also register it with the Government before you can travel to, or through, most EU and EEA countries.


Although talks remain ongoing for UK financial services firms to replace passporting rights to offer insurance coverage in the EU, an agreement is unlikely to be reached for several months, if at all. If you are planning on driving abroad in 2021, we strongly recommend planning in advance to ensure you have the correct documentation.

For more information, please contact your Hamilton Leigh Client Service Executive.

Risk Insights – Lowering Employment Practices Liability Risks

December 9th, 2020 Posted by Uncategorised 0 comments on “Risk Insights – Lowering Employment Practices Liability Risks”

Employment practices liability insurance (EPL) is a critical type of cover that provides various protections for policyholders. Employers face a variety of risks related to employment practices liability claims. These claims have become more prevalent in 2020, given the effect of Coronavirous to our economy and the number of redundancies.

Review the full article here

We’re open for business and here to help

November 5th, 2020 Posted by Uncategorised 0 comments on “We’re open for business and here to help”

Following the Government’s announcement on the new lockdown measures, we want to reassure you of our continued commitment and support for you and your business. 

We have closed our office in accordance with government guidelines, but remain fully operational, working remotely and most importantly, working closely with our Clients to ensure their interests remain fully protected when it comes to their Insurance needs.

Our contingency plans were already in place to support you throughout the previous lockdown period and we are here to help you manage current impacts to your business by delivering solutions to help mitigate current and future risks.

Should you wish to discuss your policy coverage or have any questions, please contact your Hamilton Leigh service executive.

Please be assured, the delivery of our broking and claims service remains an absolute priority. Helping our clients during these extremely difficult times is core to who we are.

As before, we shall continue to update you on the latest insurance information on the Insights page on our website. Please also follow us on LinkedIn for news articles, guidance and advice.

Stay safe and healthy.

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