In our latest ‘Difficult. Done Well’ case study, we take a look at how Jason Cohen, Executive Director at Hamilton Leigh, helped the CEO of a big technology business carry out a full insurance health check of their business, which led to them enhancing cover without any additional cost to the client.

Background & challenge

Jason was introduced to the CEO of the large technology consultancy business by Matt Grimsdale, who was their consulting CFO. Matt explained that the client was keen to have an insurance review due to the lack of interaction they had from their incumbent insurance broker.

In order to carry out a comprehensive review of the client’s current insurance programme, Matt provided Jason and his team an insight into the background of the company, their operations and the types of clients they work with. Matt also provided Jason with all of the client’s current insurance documentation so that he and his team could review. After carrying out a thorough review, Hamilton Leigh arranged a meeting in London with the client to go through their findings.

Solution

With the client being a tech focussed business, two core fundamental covers they had were Cyber insurance and Professional Indemnity.

When carrying out their review, Jason and his team were able to ascertain that the Cyber insurance limit was unusually low, considering they are an organisation that would rely heavily on their network infrastructure to trade efficiently. Further to this, their Professional Indemnity, whilst in place, had a gap in coverage, specifically in relation to ‘Breach of Contract’ cover, which is a vital aspect of insurance for technology businesses.

During their meeting in London, Jason asked the CEO:

• What did their current relationship with their existing insurance broker look like?
• How did their current renewal process work?
• What was their understanding of the insurance marketplace for their risks?
• How often did their incumbent broker catch up with them on a regular basis to understand what was going on in the business and if their insurance provision needed to be adapted?

The CEO told Jason that they had never met their broker.

Outcome

Following their discussion around the client’s coverage and the service proposition that Hamilton Leigh provides, the client concluded that he would like to work with Hamilton Leigh.

Upon appointment, Jason and his team were able to include and enhance cover without affecting the cost to the client. Subsequently, this business went on to sell and cited that having the correct insurances in place, alongside a responsive insurance partner like Hamilton Leigh, supported their due diligence process with the acquirer enormously.

“From the outset, Jason and the Hamilton Leigh team demonstrated a deep understanding of the various insurance products available and took the time to explain the nuances of each option. Their professionalism and attention to detail made the complex process of selecting the right coverage straightforward and stress-free, especially at a time where the business was experiencing significant change.

What truly sets Jason and Hamilton Leigh apart is their dedication to client engagement and empathy. They are always responsive and willing to go the extra mile to ensure that we have the best possible coverage at the most competitive rates.

Thanks to Jason’s guidance, we feel confident and secure in our insurance choices. His expertise has not only helped us protect our assets but also provided us with peace of mind, knowing we are well-covered.

I would highly recommend Jason and Hamilton Leigh to anyone seeking knowledgeable, reliable, and trustworthy insurance brokerage services. Their commitment to excellence and client-centric approach makes them a standout professional in their field.”

CEO of Tech Consultancy Client

Here to help

To find out more about how we could help support the insurance needs of your technology business, take a look at our dedicated page here and contact us on 0208 236 5350 or email JasonCohen@hamiltonleigh.com

Research undertaken by RebuildCostASSESSMENT.com has revealed that four in every five buildings they survey are underinsured by an average of 37%. It is a growing risk that is affecting buildings, machinery, plant, and other contents which concerns private individuals and businesses of all types and sizes.

If you have not had a professional insurance valuation in the past five years, it is highly likely that your property will be underinsured. You could face serious consequences if you have to make a claim and it is discovered that you do not have the correct level of cover in place. If this was the case, your policy will not operate as intended, delivering less indemnity than needed following a loss.

To help you understand the risks of underinsurance, our sister company, Specialist Risk Insurance Solutions, have published a guide that:

• Explains why we are seeing more underinsurance
• Outlines the implications of underinsurance
• Discusses the actions you should take to prevent underinsurance
• Offers guidance on things to consider when choosing your valuation assessor

Download the guide:

If you would like to discuss this in more detail with a member of our specialist team, please get in touch for an introduction to one of our Commercial insurance experts.

Difficult. Done Well.

Read our latest case study to see how Jason Cohen, Head of Business Development at Hamilton Leigh helped a CFO Centre client in placing a global insurance programme at a competitive rate in a highly efficient timeframe.

Background

Jason Cohen began engaging with CFO Centre client, Stuart Hood, who is an international leading advisor working within the energy, refining and chemical sectors. Jason provided advice and assistance around the placement of one of Stuart’s clients’ global insurance programmes.

Challenge

The UK Limited company, with international presence, were part of a global insurance programme stemming from the US but given potential forthcoming structural changes, Stuart was keen to explore an insurance programme that stemmed from the UK and could then cover the business on the same international basis of cover.

Stuart and Jason Cohen engaged extensively to discuss the covers the business currently had in place, the markets available and the practicalities around structure of programme. It transpired that this particular year was not the right time for the business to move their insurances but nonetheless, Stuart took great value from his interaction with Jason to understand that this could be done and how.

Solution

The following year, Jason and Stuart put their plan into action and at this point Jason engaged the international team at Specialist Risk Group (SRG). On this case, matters were led by Kevin White, Account Director. Kevin and his team are incredibly experienced and knowledgeable about their markets on a global level and in almost every case give a very understated account of what they do how they do it. The truth is their service level and expertise are invaluable in such complex placements.

SRG’s international team have a vast amount of experience working with global insurance markets, this was paramount to ensuring Stuart had the most comprehensive insurance coverage which captured all elements of risk across the regions they operated within.

Following a detailed review of the Group’s insurances, which involved an in-depth gap analysis of the existing policy wordings, SRG’s international team carried out an extensive marketing exercise which included London, US, and Asian markets.

Outcome

SRG’s international team utilised their Worldwide Broker Network membership relations to ensure that the current insurers were advised of Hamilton Leigh being the newly appointed broker, and to formalise this appointment and access local markets in the US for the Professional Indemnity and Cyber policies.

Working in partnership with their US markets, SRG’s international team were able to secure continuous Cyber cover, with broader worldwide coverage at a competitive rate. Similarly with the Professional Indemnity and Directors’ and Officers’ policies, SRG’s international team negotiated competitive premium rates with insurer’s in the name of the Top Company, which was based in the British Virgin Islands, ensuring global cover for the entire group.

Stuart was incredibly complimentary of the work carried out by Jason Cohen and SRG’s international team quoting “Jason has proven to be an invaluable partner for me and various clients, supporting us in not only obtaining a competitive price but more importantly reviewing the suitability and in some circumstances adequacy of cover. On this particular case, it was vitally important that our cover remained stable and at competitive premiums. Given the more complex nature of this business case mentioned, I am very grateful to Jason and his International counterparts for making it such a seamless process.”

Following BT’s recent announcement of the withdrawal of their Redcare Alert security system, our latest blog discusses how to select a new security system.

Any business that relies on computer systems to store or transfer data is exposed to cyber risks. In today’s digital world, this is most businesses. With more businesses than ever investing in Cyber insurance, we have outlined five things to consider if your business has not purchased this type of cover

What are the main reasons for inflation in Liability claims?

Claims inflation continued to be a priority topic for insurers in the UK and worldwide. Increased litigation costs, increases in psychiatric injury claims, and expensive commercial care packages are creating challenges for insurers.

According to Lloyd’s of London, claims inflation refers to the change in the cost of claims of a like-for-like policy over a period¹. Claims inflation is the sum of ordinary economic inflation and excess inflation.

Excess claims inflation

Excess claims inflation is the increase in the cost of a claim beyond that of ordinary economic inflation, which is driven by many different types of inflationary factors such as:

• Advances in medical science and technology
• Increases in certain awards of damages
• New categories of claims
• Professional services spend, such as experts and legal costs
• The rising cost of energy
• The increasing cost of care

Social inflation

In addition to the above economic excess claims inflation factors, social inflation is a subset of excess claims inflation. It is referred to as social inflation because the increased costs are largely attributed to social trends or movements. The ‘social trends’ that are increasing the volume and costs of claims include:

• Third party litigation funding facilitating a larger group of potential claimants to bring proceedings
• Public sentiment driving an increased willingness/appetite to make a claim
• Increases in collective or group actions
• A civil justice jury award system leading to nuclear verdicts
• Shifts in the legal and regulatory environment
• The COVID-19 pandemic
• The cost-of-living crisis

The cost-of-living crisis, professional services spend, the cost of care, and new categories of claims are key inflationary factors driving up the volume and cost of personal injury claims. For example:

Psychiatric injury

The impact of COVID-19, greater use of social media, and the impacts of the cost-of-living crisis have been identified as some of the reasons for the increase. It is also speculated that awareness efforts have contributed to the rise in individuals seeking help for their mental health. In early 2023, the UK government announced £150 million of additional funding would be allocated to mental health services.

Employee mental health and wellbeing have also become a strategic business priority, which is now part of the ‘S’ of their ESG strategy. Simon White, ESG Director at MX Underwriting talks about what the ‘S’ means in ESG here.

Cost of care

Increasing care costs are a significant reason for claims inflation in England and Wales. This has impacted both claims for non-commercial care voluntarily provided by family and friends as well as commercial care required in more complex cases.

Commercial care costs for both directly employed and agency care have also been driven upwards by a shortage of carers and the rising cost of living. Brexit, the pandemic, and a lack of suitable candidates have helped drive these shortages at the very time when there is an increasing demand for care due to the aging population.

In addition, the care sector is suffering from high turnover rates and poor staff retention with other sectors offering better pay, more sociable hours, and better working conditions.

Advances in medical science and technology

Amputation claims have been subject to hyperinflation in recent years and there are several reasons for this trend. The costs of prosthetic devices continue to increase which can be partly attributed to continued technological developments designed to increase levels of function for amputees.

However, even without technological advancements in prosthetic devices, the market is typically seeing price increases of between 5% to 8% per annum for the same products caused by a combination of general economic pressures in the UK and limited competition in the industry.

New surgical techniques such as targeted muscle reinnervation (TMR) or osseointegration (where a titanium rod is implanted into the stump to which the prosthetic is attached rather than the conventional prosthetic socket) can also add an additional layer of costs.

The recent judgments of Swift v Carpenter [2020] and Riley v Salford Royal NHS Foundation Trust [2022]² have assisted claimants in their efforts to push the legal boundaries and are often cited by leading claimant firms in relation to accommodation, life expectancy and loss of earnings.

Finally, the catastrophic nature of injuries suffered by amputees means that there are often claims for inter-dependent losses of accommodation and care which have also been subject to inflation in recent years.

The cost-of-living crisis

Fraudulent claims typically rise during economic downturns. This flux and uncertainty compared with previous economic downturns causes delays in claim processes and increases costs.

The economic downturn has also seen a significant rise in opportunistic property claims in both residential and commercial lines. In commercial lines, arson and escape of water claims remain prevalent as COVID-19 bounce-back loans and general government support have been withdrawn

How we can help

Specialist Risk Insurance Solutions (SRIS) Claims Director, Justin Welham, comments:

“Whilst not as obvious as the property sector, claims inflation is also starting to have a real impact on casualty claims.

Rising inflation means that the Judicial College guidelines, used to assess general damages claims for pain, suffering and loss of amenity, are quickly out of date and claimant solicitors are looking for higher damages.

We are already starting to see a relatively sharp increase in the average value of general damages paid, which in turn will drive up renewal premiums. As part of our risk management offering, we actively engage with clients to ensure that the appropriate loss control measures are in place to prevent accidents occurring in the first place.

When accidents do happen, our award-winning claims team are on hand to walk the client through the process every step of the way.”

For more information on claims inflation and how this may impact you get in touch with our expert team.

What about Motor claims?

Find out more about what’s driving Motor claims inflation.

Sources:
1 https://assets.lloyds.com/media/8a9d0449-0d0d-41f4-bf76-7de7bc289293/Allowing%20for%20Claims%20Inflation%20in%20Reserving%20-%20Lloyd%27s%20Reserving%20Thematic%20Review%202022.pdf 
2 https://www.dacbeachcroft.com/es/gb/articles/2020/october/swift-v-carpenter-the-answer-to-accommodation-claims-or-just-a-halfway-house/#:~:text=Published%209%20octubre%202020&text=In%20summary%2C%20the%20Court%20allowed,discount%20rate%20of%20%2B5%25.&text=Roberts%20calculation%20(%2D0.75%25%20DR,%2D%C2%A3371%2C385%2C%20so%20NIL

What are the main reasons for Property claims inflation?

In 2021, the COVID-19 pandemic was dominating news headlines, now, the cost of living and inflation rates are today’s headlines – but how did we get here? This article drafted by our Group claims specialists provides an overview of some of the specifics that are driving inflation rates and as a result, claims inflation.

Brexit

The impact of Brexit has disrupted supply chains because it has called for new negotiations for cross-border trade. This has resulted in added cost, complexity, and delays in shipping. Some suppliers have even downgraded the UK as a priority market because of Brexit.

Brexit also created a skill shortage, and regulatory changes have made working in the UK less attractive to EU nationals who are increasingly returning home.

Labour

UK unemployment is low, which has resulted in high vacancies and more competition for increased salaries, the lack of skilled labourers required for construction, alteration, and reparations of buildings.

Global supply chain

The world is seeing record highs in the cost of petrol and diesel, which has been driven by supply challenges. Freight shipping costs have more than doubled since 2020, and machinery and plant have longer lead times as a result, particularly with items that are manufactured outside of the UK¹.

Climate change

We are also beginning to see major impacts of global warming, in the form of increased storm and flood frequency and severity. This coupled with inadequate investment in drainage infrastructure in the UK is adding to the damage.

For example, Flood Re estimates that flooding will have increased between 25% and 80% by 2050, depending on the rate in which weather temperatures increase².

How we can help

Specialist Risk Insurance Solutions (SRIS) Claims Director, Justin Welham comments:

“In the property market we’ve seen post-pandemic supply chain bottlenecks, higher energy and transportation costs, and shortages of labour all contributing to higher inflation in 2022.

In 2023 we’ve seen that the war in Ukraine has further fuelled global inflationary and supply chain pressures, causing price shocks for a wide range of commodities, including energy, food and construction materials. This Supply chain disruption and rising prices are driving up replacement and rebuilding costs for property and construction claims.

This will inevitably leave companies exposed to under-insurance across their property portfolios. Our team continue to work closely with our clients in terms of costs mitigation and making sure that their property portfolio sums insured have been recently reviewed to avoid the pitfalls of under-insurance.”

For more information on claims inflation and how this may impact you get in touch with our expert team.

What about injury claims?

Find out more about why claims inflation in relation to liability.

Sources:
1 https://www.axaconnect.co.uk/siteassets/broker-documents/commercial-lines/product-support-documents/guide-to-property-claims-inflation.pdf 
2 https://www.floodre.co.uk/wp-content/uploads/Flood-Re-Response-to-Principles-20Aug2020.pdf 

Inflation has stretched across all industries, and Motor claims is no different. This article drafted by our Group claims specialists outlines the overarching reasons and consequences you’re likely to hear about and experience.

The COVID-19 pandemic

The pandemic impacted supply chain as the world was placed on ‘lockdown’. This resulted in a shortage of semiconductors, which are computer chips used in a wide variety of technological products. For example, a fuel car requires upwards of 40 of these technology chips, and represent about 35% of the vehicle cost; without them our vehicles simply cannot be made.

The shortage is so significant that some manufacturing plants have been forced to close. As a result, the backlog of new vehicles means that second-hand vehicles are more expensive.

War in Ukraine

Conflicts in the country have directly impacted availability and delivery times of a variety of vehicle components. For example, BMW, Audi and Volkswagen have manufacturing resource in Ukraine for harnesses that hold vehicle cabling together. While they’re inexpensive, they are bespoke to each model.

Car plants have closed across Europe, as production can’t begin without these bespoke harnesses.

Employees in the motor industry are in decline

The HSE has said that the number of employees in motor has been in decline in the last few years. Brexit has accelerated this decline as overseas employees leave the nation. Finally, the cost of transport has also increased which has had a knock-on effect on inflation.

The Institute of the Motor Industry (IMI) is predicting that 160,000 vacancies in the sector will need to be filled by 2031_¹.

Technological improvements in the motor industry

The introduction of new and innovative technology in electric vehicles has resulted in an unprecedented increase in car part theft, specifically lithium batteries, which are more expensive to replace or repair due to a lack of specialists in the industry (Only 6.5% of the current motor workforce is qualified to service EVs_²). It also costs a great deal more to dispose of lithium batteries, which inevitably increases premiums.

How will the inflation of motor claims affect you?

Specialist Risk Insurance Solutions (SRIS) Claims Director – Motor, Jamie George, comments:

“The SRIS Motor Claims Team works tirelessly to assist our customers throughout the entirety of the claim journey, from Day One with Own Damage or Third-Party Capture, to minimise and mitigate costs on all heads of claim. The teamwork with the customer to always protect their interests and have their best intentions in mind.”

• Instruction of own repairer/preferred repairer = building on lasting relationships
• SRIS Own Repairer Network availability
• Management of own vehicle consequential losses including downtime and Vehicle Off road costs
• Mitigation of ongoing losses for Fault and Non-Fault Incidents

Third Party

• Report! Report! Report! Is something to remember, the faster you report the smoother the claims process will be
• Ongoing Triage of all Incidents including Fault/Non-Fault
• Market support with Third Party capture including offer of own services for repairs

How we can help

SRIS Client Relationship Director – Motor, Robert Wright, comments “Early reporting is a must, and it will allow us to help you. After any incident, policyholders and drivers must respond quickly to requests for information. Having the right reporting processes in place to provide us with meaningful information in a timely manner is vital as this will allow us to ensure liability is quickly established.”

For more information on claims inflation and how this may impact you get in touch with our expert team.

What about injury claims?

Find out more about why claims inflation in relation to liability.

Sources:
1 https://tide.theimi.org.uk/industry-latest/news/imi-predicts-160000-shortfall-workers-uk-automotive-sector-next-decade 
2 https://www.fleetnews.co.uk/news/latest-fleet-news/electric-fleet-news/2021/08/19/uk-needs-75-000-ev-ready-mechanics-warns-imi 

What are the main reasons for claims inflation?

Over the last year, everyone has seen a rise in the ‘cost of living’ as the Consumer Price Index (CPI) continues to increase. There are several factors that have led to this consequence, with most industries affected.

What is claims inflation?

Put simply, claims inflation is the change in the average price of goods and materials, and services in relation to a portfolio of representative claims.

Our Group claims specialists put together three of the main areas we believe might affect our clients the most. Below, you will be able to read through the reasons for claims inflation in Motor Fleet, Liability, and Property insurance and gain an understanding of how the current economic climate could affect you and your business.

Motor Fleet inflation

With the average claim costing over £5,000¹, it is no wonder people are asking ‘why?’. In this article, the team talks about the specific elements across supply chains, conflict between countries, and the impact of the global COVID-19 pandemic that has amounted to claims inflation for Motor policies.

Click here to read

Property Claims Inflation

From the global pandemic, and new regulations because of Brexit, to climate change, if you’re curious about some of the biggest reasons driving claims prices upwards in Property insurance read our latest article.

Click here to read

Liability Claims Inflation

When the cost of repairs, materials, and labour rise, so does the cost of third-party liability for property damage. Inflation also raises the cost of settlements and damages awarded in court cases.

Click here to read

How we can help

Specialist Risk Insurance Solutions (SRIS) Client Relationship Director – Motor, Robert Wright, comments “Early reporting is a must, and it will allow us to help you. After any incident, policyholders and drivers must respond quickly to requests for information. Having the right reporting processes in place to provide us with meaningful information in a timely manner is vital as this will allow us to ensure liability is quickly established.”

For more information on claims inflation and how this may impact you get in touch with our expert team.

Sources:

1 https://www.wtwco.com/en-gb/news/2022/07/uk-motor-claims-inflation-on-the-rise-with-added-pressure-from-delayed-injury-settlements

If your business has never been the victim of a cyber-attack, it can be difficult to comprehend how vulnerable your business could be. However, as a specialist insurance broker, we are here to help you understand the digital risks your business is exposed to so that you can take the appropriate action.

We often hear from clients that they are unsure of the digital risk their business faces and therefore, we have outlined a couple below with advice from our expert team:

“We invest in IT security, so we don’t need Cyber insurance…”

• Whilst investing in IT security is important, it is likely that your business will still be exposed to cyber risks as cyber threats are continually evolving to bypass these security measures.
• People are the weakest link in your IT security chain. Most cyber-claims are as a result of an easily preventable human error.
• Cyber insurance is a cost-effective way to get access to risk management tools including employee training programs, but it also provides you with an expert response team and covers all financial losses in responding to a cyber-attack.

“We don’t collect any sensitive data, so we don’t need Cyber insurance…”

• Two of the most common cyber-claims are not related to privacy. Fund transfer fraud is often carried out by criminals using fraudulent emails to divert the transfer of funds from a legitimate account to their own.
• Secondly, ransomware can cripple any organisation by freezing or destroying your business-critical computer systems.
• Neither of these types of incidents would be considered a data breach however, both can cause severe financial damage and are covered under a Cyber policy.

“Cyber-attacks only affect big businesses. We’re too small to be a target…”

• High profile cyber-attacks that have affected large organisations have raised awareness of the growing threat of cyber-crime through the media however, surveys conducted by cyber security organisations suggest that may small business owners are operating under a false sense of security because of this.
• As larger organisations get serious about cyber security, small businesses are becoming increasingly attractive targets for cyber criminals – and the results are often devastating for small business owners.
• Not only does insurance cover the costs involved in responding to a cyber-crisis, but it also provides you with instant access to a number of technical and legal experts who you may not have in-house.

“Our other insurance policies cover Cyber risks…”

• While there may elements of cover within traditional insurance policies, it tends to be partial cover at best, falling very short of what is covered under a standalone Cyber policy.
• Property insurance policies are designed to cover your bricks and mortar, not digital assets.
• Crime policies rarely cover social engineering scams (without onerous terms and conditions) which are increasingly conducted by cyber criminals and result in a huge source of financial loss for businesses.
• Generally, Professional Liability policies do not cover the first party costs associated with responding to a cyber event.
• A standalone Cyber insurance policy provides you with access to dedicated cyber claims experts who are trained to get your business back up and running with minimal disruption and financial impact. Without a specialist team, it could take your business weeks or even months to return to business as normal.

We are here to help

With extensive experience in the digital risk’s businesses are exposed to, we are well placed to support and protect your business.

For more information on how your business can benefit from Cyber insurance, get in touch with our specialist, Jason Cohen:

JasonCohen@hamiltonleigh.com