Welcome to the May edition of REG Reviews. This month we discover Aviva’s AI partnership, insights on car insurance prices, The FCA’s staff strike and so much more. Read these articles and many more, along with our usual updates from REG and the REG Tech sector.
FCA staff go on strike for the first time in history
A statement from the Unite Union revealed employees at the Financial Conduct Authority (FCA) in the United Kingdom went on strike for the first time in history. Workers are set to begin the 48-hour strike by marching to the Financial Conduct Authority’s main office in London to protest salary, working conditions and union recognition. The Unite Union revealed that the strike was sparked by the FCA’s “refusal” to listen to its employees for months. According to the statement, “the FCA has refused all requests to participate in discussions with staff representatives.”
The strike will be followed by a “constant ‘work to rule’ by the workers, who will stop doing the regular overtime and extra work that they currently do outside of their contractual obligations.” There are currently also walkouts planned to take place on June 9, June 10, July 5, and July 6.
Aviva partners up with Tractable to bring the benefits of AI to motor claims
Aviva, one of the largest insurers in the United Kingdom, has signed an agreement with Tractable to improve the accuracy and efficiency of UK motor claims by using artificial intelligence (AI).
Tractable, a billion-dollar firm based in the United Kingdom, currently uses visual AI to assist in the repair of vehicles and homes by utilising photographs to diagnose damage and calculate repair costs accurately in just minutes. By adopting the method of using AI to help and advise engineers, Aviva will be able to execute remote assessments of repair estimates more quickly and accurately, improving diagnosis uniformity and decreasing the risk of errors, which can cause delays in vehicle claims. Aviva plans to implement the technology across its entire repair network in the United Kingdom. The partnership will also aid Aviva in meeting its environmental goals by ensuring that parts that may be safely fixed are not replaced instead.
Simon Smith, Managing Director, said: “Implementing Tractable’s AI into our motor claims will deliver multiple benefits. It will improve the accuracy of repair diagnostics across Aviva’s UK repair network, making the way in which we assess vehicle damage more efficient.”
Marsh launches new marketplace services to assist clients in procuring cybersecurity solutions more efficiently
Marsh has launched new cybersecurity marketplace services intended to make the procurement process easier for their United States clients looking to defend their businesses from cyber threats. Marsh will help clients discover cybersecurity products and services that are tailored for them, as well as analyse offerings that improve cyber resilience and insurability.
“Protecting your company from cyberattacks is difficult enough; actually obtaining solutions to defend your company may be even more difficult,” said Tom Reagan, Marsh’s Cyber Practice Leader for the United States and Canada. “Identifying, assessing, piloting, and appointing cybersecurity providers can take months for our clients, which is inconvenient in today’s fast-paced cyber market.”
The Olympics arrived early at REG Technologies!
The REG workforce come together for our regular monthly social event. This month was a little different as we hosted the first REG Olympics in our London Office. The evening consisted of our collaegues split into teams and completing a number of challenges. Congratulations to our winners; Victoria Slade, Niamh Doyle, Diogo Luíz and Joel Derrick.
We would also like to take this opportunity to thank the hosts; CFO Chris Bourke and Operations Manager Ben Merchant, for organising such a fun event. Until next month…
New insight on the price of car insurance
Following a second consecutive quarter of price rises, the industry has seen the first annual uplift in the Car Insurance Price Index since the autumn of 2020. The average cost for UK motorists is now £550, the increase arrived after the introduction of the Financial Conduct Authority’s ban on dual pricing which went live at the start of the year. The findings echoed previous analysis by Consumer Intelligence which had found a 4.9% premium leap in January alone levelling out to a 4.3% rise.
Law firm Kennedys develops £1.2 million reputational risk project
Kennedys; a global law firm, is leading a partnership that will work on a £1.2 million initiative to build technologies capable of detecting and analysing reputational risk. Innovate; UK’s Smart Grants scheme, which is donating £783,000 to the project, is part-funding it. The rest will be covered by Kennedys and consortium members; University of Manchester, University College London, Cicero/Amo, and RiskCovered Limited.
Reputation risk is a company’s intangible asset that is increasing in value. Intangible assets now account for more than 85% of asset value, according to a joint Lloyd’s of London/KPMG analysis, with reputation and brand being the most crucial. If the risk is activated, it can result in significant financial losses, such as those experienced by Facebook in 2018 when its stock dropped following a big data breach and privacy controversy.
According to data from Allianz; companies who fail to adequately plan for incidents that may harm their reputation might see their value plummet by as much as 30%.
Cyber takes the lead in scheme commission earnings
With cyber threats rising by 81% since the pandemic began it’s no surprise that this month SchemeServe has found cyber has seen the highest increase in commission earnings.
Research from SchemeServe has showed that cyber has outpaced other insurance schemes with an 87% increase in commission earnings over the past six months. Cyber volumes increased by 32% in the last six months and nearly 500% since the pandemic began.
FCA announces changes to PRIIPs regulations
The new requirements are one of the first examples of the FCA confirming UK divergence from EU rules following Brexit.
Those that manufacture, advise on, or sell Packaged Retail and Insurance-based Investment Products (PRIIPs) are required to produce and provide a Key Information Document (KID) about the products they are selling. The changes remove information about the performance of certain products which can be misleading for consumers and will help those buying without financial advice to rely on the KID to make more informed investment choices.
Following feedback from respondents; firms will now have until the 31 December 2022 to implement the changes, and the FCA provided more clarity on how they expect firms to construct narrative descriptions of performance within KIDs. While some respondents called for a fundamental review of the whole PRIIPs regime, the legislative changes made by HM Treasury were targeted to fix the most harmful issues quickly following the UK’s exit from the EU. However, HM Treasury have committed to carrying out a review of retail disclosure in the future and the FCA will work closely with them as this develops.
REG’s expansion into Portugal
To support our operations throughout Europe, REG Technologies have opened a branch in Lisbon.
Paul Tasker, REG’s CEO said: “We have always benefited from a diverse workforce at REG and through opening in Portugal we are ensuring that we can continue to attract talent from throughout Europe. Our CTO is based in Portugal and leads our in-house research and development operation from both there and our City of London hub. With major European insurers and brokers among our customers it is important we can continue to build our presence there.” The news was released as REG announced the full automation of regulatory data from Belgium and Spain.
Relm launches the world's first cryptocurrency reinsurance business
On April 6th, 2022, Relm; the world’s top crypto insurance provider and the first and only commercial insurer to have Bermuda’s IIGB License, launched Relm II; the world’s first fully regulated collateralised reinsurance firm that can accept both fiat and crypto as collateral.
For enterprises functioning in the crypto industry, Relm II permits the formation of regulated reinsurance capacity. These companies are developing cutting-edge technology, goods, and services, and thus require substantially larger insurance coverage limits than the present (re)insurance market can give. As a result of this increased capacity, Relm will be able to expand its support for crypto firms, allowing them to achieve substantial scale and growth while maintaining higher levels of insurance protection.
Corvus Insurance reveals ransom payment trends
Corvus Insurance has revealed the results of its second Corvus Risk Insights Index, which is a compilation of industry trends and data analysis based on the Corvus Scan, the company’s IT security scanning tool.
One of the report’s main conclusions was that ransomware assaults have fallen from previous highs, as the prices and frequency of claims have decreased. According to the research; the rate of ransomware claims fell from 0.6% to 0.3% in Q4, less than half of the peak reported in Q1 2021. While the average ransom paid in Q3 2021 was “atypically high,” the total ransoms paid in 2021 per quarter averaged $167k, 44.2% less than the Q3 number.
Furthermore, fewer ransoms are paid in comparison to those demanded. According to the data, the percentage remained stable in the low twenties in the fourth quarter of 2021, a considerable decrease from previous levels of 50%. The ratio was 44% as recently as Q3 2020.
This drop in cost and severity can be ascribed in part to underwriting entities requesting more robust backups for insurance coverage, which is contributing to the larger trend toward more sophisticated and resilient approaches to ransomware risk mitigation.
FCA expands early and high growth oversight
Following a successful pilot, The FCA are expanding Early and High Growth Oversight. The changes will provide closer support for 300 newly authorised businesses by the end of 2022/23.
Despite the FCA stating that firms will face challenges in meeting the regulatory obligations in the few years after authorisation, they have initiated a new approach called Early and High Growth Oversight. This provides enhanced supervision for firms as they get used to their regulatory status and supports them to understand their obligations so they can meet the standards expected as they grow. It will also ensure that firms can identify and address harm developing in newly authorised firms quicker.