Building broker business in the construction insurance sector

In the midst of chaos, there is opportunity!

The famous quote from Sun Tzu in The Art of War may not have been intended for the insurance industry – but it is one that stands applicable especially now in relation to the construction sector where the building blocks appear to be crumbling. The July 2019 IHIS Markit construction purchasing managers’ index dropped to its lowest levels since April 2009.

“According to the latest survey of industry executives, the UK construction sector is suffering a loss of momentum, led by the sharpest reduction in new work since March 2009,” Matt Carlick, Broking Director at Citynet Insurance Brokers, told Insurance Business. “As the market tightens, some insurers are looking into decreasing the number of brokers they do business with.”

At the heart of the problem appears to be a shortage of skilled workers, leading to greater use of LOSC and BFSC contractors, according to Carlick.

“Greater use of lower-skilled or non-skilled workers who tend to be less experienced in a particular trade or are new to a company and therefore less aware of the H&S culture of an insured,” he said. “Due to a skilled worker shortage, there is a danger that the cost for these employees increases which can negatively affect profit margins and therefore the funds available for investment in H&S initiatives.”

Amid the clouds, however, there are plenty of silver linings – and savvy brokers have plenty of opportunities to be the cement that keeps businesses watertight amid the onset of economic bad weather.

“Despite the comments about retrenchment in the UK construction sector, underwriters would suggest that they are seeing small organic growth for London and South East based risks,” added Carlick. “This also means an increase in estimates for LOSC and BFSC payments which bring their own insurance issues with them.”

“Of course, there are concerns about the current business outlook and these are overwhelmingly attributed to domestic political uncertainty,” continued Carlick. “The construction sector hasn’t been left unaffected by this current climate. Rising risk aversion and tighter budget setting by contractors in response to Brexit uncertainty can hold back activity, especially in the commercial sub-sector.

“The key is to work with a specialist – and, as wholesale brokers, Citynet has a proven ability to build and maintain relationships with underwriters which is essential to ensuring that the best deal is on the table for our retail broker clients.”

Finding the best deal also means finding the right policy for clients. While each business will have different individual needs, Carlick believes there are certain important areas of a construction policy that every broker should look for.

“Important areas of a construction policy include cover for asbestos; attitude towards criminal defence costs; height and depth limits – ideally there should be none; cover for hazardous locations/activities; attitude towards rehabilitation; insurers’ flexibility to be able to deal with mid-term amendments which are hazardous and/or unusual,” he said.

Above all, however, it’s about finding a trusted partner, Carlick believes – one that has “its’ fingers on the pulse of this dynamic market” and “strong market relationships.”

Source: Insurance Business UK

Winners at BIBA 2019!

#BIBA2019 – VENI…VIDI…VICI! 

Who are the prize winners?

— 1st Prize – An Apple Watch goes to Ms. Michelle Ramsey from Cowens.

— 2nd Prize – A Bottle of Dom Perignon Champagne goes to Mr. Sean McDonagh from Tony McDonagh & Co Ltd.

— 3rd Prize – An Amazon Echo Dot Third Gen goes to Mr. Mark Dacre from Ives and Taylor.

 

CITYNET INSURANCE BROKERS at BIBA 2019!

BIBA 2019 – THE COUNTDOWN FOR THE BIGGEST ANNUAL EVENT FOR INSURANCE PROFESSIONALS FROM ACROSS THE UK HAS BEGUN!

On Wednesday 15^th and Thursday 16^th May, Manchester becomes the HUB of the UK’s insurance industry with BIBA 2019 taking place. This event grows every year, achieving record numbers each time. Ranked as the largest networking event for the insurance industry, this conference brings together staff and associates from across BIBA’s network of almost 2,000 regulated member firms. This year the organisers are expecting over 5,000 registered brokers and around 8,000 delegates to attend over the two day period.

Meet us at BIBA 2019 on Stand D63

Citynet Insurance Brokers are looking forward to continuing our tradition of exhibiting at #BIBA for the fourth year running.  We are a leading provider of specialist insurance throughout the UK and Ireland, therefore, we have an unparalleled level of knowledge. Moreover, we are well-positioned to help our clients with the most intricate risks they have.  Our service, integrity and specialist knowledge is what underpins our culture and stands testament to how we handle our clients’ business.

Citynet’s team led by Richard Scott, CEO and Andrew Walsh, MD will be there to meet you and answer any questions that you may have regarding our schemes and services.

Due to popularity, our traditional raffle will take place again this year with great prizes to be won such as an Apple Watch, Dom Perignon Champagne and an Amazon Echo smart speaker. Have your chance to win one of these prizes by visiting our stand and leaving your business card with us or by scanning your badge bar code.

We have listened to your feedback and as a result, at this year’s #BIBA2019 Conference we will also be serving beer and wine on our stand starting from lunchtime on Wednesday. Please feel free to drop by and join us on Stand D63 for a drink and a chat.

Meet the Citynet team attending BIBA this year

Richard Scott – CEO

Adrian Colosso – Non-Executive Director

Andrew Walsh – Managing Director 

Tim Hicks – Head of Schemes & Specialty Risks 

Graeme Flynn – Head of Motor UK & Ireland 

Lawrence Shortland – Head of Property & Casualty UK 

Colin Jackson – Account Executive 

Rebecca Johnston – Professional Indemnity Broker 

Richard Stiling – Account Director  

Shannon Blewitt – Commercial Account Executive 

Clare O’Neill – Head of Underwriting

Matt Carlick – Broking Director

Josh Autie – Broker 

Matt Wadhams –  Account Executive 

SEE YOU ALL THERE!

CITYNET’S BREXIT CONTINGENCY PLAN

 — UPDATE —

18th February 2019

Further to our Brexit updates, we are now delighted to let you know that Optis Limited have joined Citynet as part of the expanding PIB Group. This further cements the long-established and successful relationship between Optis and Citynet.

The acquisition of Optis Brokers is an exciting expansion for the group into the EU and will, therefore, provide protection for Citynet’s Irish policyholders in the event of a ‘No Deal Brexit’. 

As we move closer to the Brexit deadline – 29^th March 2019 -, we will continue to keep you updated with any changes to our trading procedures and terms of business agreement. We are planning to keep as much as possible the same, including your contacts here at Citynet.

We hope this update will ease some of your worries, but should you have further queries, please do not hesitate to contact David Walland or your account executive.

____________________________________________

— UPDATE —

29th January 2019

Further to the Central Bank of Ireland’s recent press release and the comments from the Deputy Governor we can confirm Citynet is well advanced in its Brexit preparations (for a no deal) and will have a group Irish entity within the next couple of weeks as part of its contingency planning.

Once the Central Bank of Ireland is able to confirm the precise post-Brexit regulatory regime, we expect to be able to handle new and renewal business via the EU entity if required (with existing business unaffected based on the latest guidance).

In order to provide you with continuity of service, we will also work to ensure the same Citynet people you deal with now continue to support you going forward.

We will continue to update you as matters progress and I hope this gives you confidence that Citynet is well placed to continue to service its clients whatever the future holds.

____________________________________________

Updated: 29th November 2018

Insurance Undertaking’s – Brexit Plans

The Central Bank of Ireland recently issued a Dear CEO letter asking for Intermediaries and Insurance Undertaking’s Brexit Plans and how we are communicating those plans to policyholders.

At this stage, we have received correspondence from Lloyd’s with whom we will trade directly via Brussels and our TOBA is already in place, some insurance undertakings are moving their EU business to a new or existing subsidiary within the EU27 which should cause minimal disruption,  and finally some insurers we have not yet received their plans.

We hope to have a Brexit plan from each insurer by 31^st December 2018 which we can communicate to you and minimise or have no disruption for EU policyholders.

____________________________________________

The Central Bank of Ireland has recently written to Irish intermediaries and UK brokers operating in the territory asking for their contingency plans in the event of a hard Brexit, and we thought it would be helpful for you to know how Citynet responded as our plans will undoubtedly have an impact on your response.

Subject to a No deal / No transition period.

Lloyd’s will continue trading from London, however from 1st January 2019 risks emanating from the EEA will be underwritten by Lloyd’s Brussels. The risk is still being placed by Citynet in London as normal, but your insurer security will be located within the EEA. This model should also be the same for placements outside of Lloyd’s market where the insurer is owned or has an EEA presence. We are already discussing with non-Lloyd’s insurers which entity they plan to use for EU business. This will be relevant for almost all UK insurers writing EU business.

In addition, Citynet is well advanced in creating an Irish base to replace our passporting rights should they cease on 31st March 2019. The Irish base will be either or both of 1) the purchase of an existing Irish broker for which talks are already well advanced and 2) application for a new Citynet office with its own approval by the Central Bank.

So although Brexit still has the ability to proceed in many ways, the changes to our current process should be minimal. Please keep in touch with your Citynet account executive if you have any queries and for regular updates.

Citynet’s solution to current trends in the haulage market

Following the Ogden rate change in 2017, the Haulage market has seen the biggest shift in rates within the Motor Fleet sector. Haulage has been the most affected of all the trades, with claims reserving both historically and going forward increasing above and beyond all other.

For markets who have written Haulage in the past, they have either pushed their pricing models up significantly to accommodate the additional costs or pulled out all together. This is most noticeable within the composite market where the appetite to write or renew Haulage business has reduced significantly. These changes have led to London Market becoming the prominent solution for placing Haulage risks.

Graeme Flynn, Head of Motor Fleet at Citynet, shares his views. “Citynet is uniquely placed to be able to offer the most wide-ranging access to markets in London for Haulage placements which includes ‘exclusive’ access to capacity providers that our day to day competitors cannot access,” says Flynn.

These markets have varying appetites in terms of the type of Haulage risk they will retain. Some target the more distressed risks where they can achieve a higher exposure rate while others have risk management solutions that can be tailored to the Insured’s needs.

Long-Term Agreements are also available with built-in reductions agreed subject to specific targets being met as well as capped increases. This is particularly attractive in a climate where Haulage rates are going up on all risks, even those which are performing profitably for Insurers. Similarly, where a risk continues to perform badly there is the comfort of a price being offered, with many Insurers now non-inviting Haulage risks that are running poorly.

“Policies vary widely. We not only make sure your clients take out cover at the right price but ensure that they have the right product for their business needs. Our close proximity to Lloyd’s of London means that we are ideally positioned to offer extremely competitive terms with a superb response time,” says Andrew Walsh, Managing Director at Citynet.

Citynet also has access to markets that are targeting the clean running end of the Haulage market and are prepared to place their minimum exposure rates below that of their market competitors. Experts at Citynet, therefore, have the ability to place Haulage risks regardless of performance with an unrivalled number of potential carriers.

Citynet acquires Motor and Non-Motor wholesale business of Wrightsure Insurance Group

Wholesale specialist Citynet Insurance Brokers are delighted to announce the acquisition of the London Market Wholesale business of Wrightsure Insurance Group.

Lawrence Shortland, the Wholesale Director at Wrightsure, has joined Citynet along with his colleagues Richard Stiling ACII and Hugh Cleland. Both the Motor and Non-Motor Books of business have now transferred over from Wrightsure to Citynet and will be handled out of Citynet’s offices in Fenchurch Street in the City of London.

Ron Powell, Chairman of Wrightsure commented “We are pleased to have found a good home for our successful London Wholesale division and I am sure Citynet will be able to service our agents well and develop the business further. This move allows Wrightsure to focus on and develop its core business from its regional retail offices.”

Andrew Walsh, Managing Director at Citynet added: “ Wrightsure is well respected as a London market broker both for Motor and Non-Motor business. Our acquisition of their Wholesale business is an excellent move for us and further enables Citynet to reaffirm its position as a leading Lloyd’s and London market wholesale Broker”.

Citynet was established almost two decades ago and has become one of the fastest growing and most successful wholesale brokers, acting for regional agents all over the UK and Ireland. Its success has been built on the strength of its relationships with Insurers and agents as well as providing the highest level of customer service, along with the best coverage and pricing available.

Operating out of its City of London offices, Citynet employs over 80 staff and acts for some 500 agents across the UK and Ireland, and has unparalleled facilities for Property, Casualty, Motor Fleet and Professional Indemnity, as well as numerous bespoke Schemes and Binders.

Things to consider when purchasing business Cyber Coverage

Following the new GDPR regulations coming in place, companies are scrutinised now more than ever before. The latest cases are those of Bupa – being fined £175,000 by ICO with for systemic data protection failures (employee offered personal information on the dark web) and Tesco Bank being handed a £16.4 million fine by FCA over cyber breach that happened in 2016 (for failure to exercise due skill, care, and diligence in protecting its personal current account holders against a cyber-attack).

There is no shortage of innovative techniques attackers will utilise to breach business defences, but more often than not, we identify a human element to cyber claims, hence the importance of having proper controls and robust staff training process in place to prevent the worst from happening.

As a wholesale broker, Citynet Cyber Services can map the risks your organisation is facing and ensure these are sufficiently managed through insurance.

• Growing risks of a cyberattack- Understanding the GDPR legislation and the changing DPA (Data Protection Act) is critical for all companies.
• Cyber insurance should be bought from a broker that has expertise in cyber. The broker will need to review existing policies and find any gaps where coverage doesn’t currently exist
• A blend of insurance policies such as Professional Indemnity Insurance together with Cyber Insurance can be used to achieve a suitable level of coverage
• Ensure that the cyber insurer provides comprehensive post-breach services

Based on your business size, sectors and geographic locations it operates in, your cyber protection needs may vary. There are a few further things one can look at for when deciding on a cyber-insurance policy cover, such as:

1. Network security coverage, including hardware, software, physical and staff status – cover extends employee actions, business process outsourcing (BPO) or outsourced IT provider.
2. Data breach incident response, including attack recognition, response planning, and recovery planning – cover includes damages resulting from alleged violations of privacy laws and regulations.
3. Multimedia liability – in other words, infringement of domain name, copyright, trade names, logo, and service mark on internet or intranet site.
4. Laptop insurance
5. Cyber business interruption coverage – includes lost revenue as a result of a cyber-breach.
6. Coverage for cyber extortion and terrorism – cover includes credible threat to introduce malicious code; pharm and phish customer systems; or to corrupt, damage or destroy systems.
7. Litigation and enforcement proceedings, not including governmental fines
8. Loss in association with 3rd party systems
9. Lost/stolen data and digital asset
10. Crisis management and PR – cover to restore your reputation as a result of a data breach
11. Forensics
12. Ransomware – a form of malware that locks victims out of being able to access their data until a ransom is paid

“The accelerated pace of today’s digital transformation, business interruption and data breach will continue to be significant drivers of loss at present and into the future.  Methods used by cyber criminals are becoming more sophisticated, whether it is a small business or a larger corporation, cyber liability insurance will help you keep on top of the threats as well as lessening the damage of the breach,” added Rebecca Johnston – Professional Indemnity Broker at Citynet.

CITYNET INSURANCE BROKERS NEWSLETTER

A newsletter is a great way to keep our customers informed with what is happening at Citynet on a monthly basis. In case you’ve missed our monthly email newsletter, please find your copy below.

NEWSLETTER 2018 NEWSLETTER

OCTOBER 2018 NEWSLETTER

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JUNE 2018 NEWSLETTER

MAY 2018 NEWSLETTER

APRIL 2018 NEWSLETTER

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FEBRUARY 2018 NEWSLETTER 

JANUARY 2018 NEWSLETTER 

Are you a new broker thinking of becoming Citynet partner? – Here is what to expect!

Could your business survive the effects of product recall symptoms?

A product recall or withdrawal can be the most dangerous thing that can happen to a business. Its effects can rock production profits all over the world – a great number of products are being recalled across Europe, every week. Can your business afford to take that risk?

Citynet Insurance Brokers are renowned in the market for their expertise and are leading suppliers of specialist liability products. They fully understand that handling the fallout from a product recall event can be a worrying prospect for businesses, and urge business owners to make sure they have the correct measures in place that will help safeguard against product failure. Often, a typical policy will consist of:

1. Product guarantee (covering the costs of removing, replacing or repairing failed products),
2. Financial loss (including third party costs who have suffered as a result) and;
3. Product recall (the costs of recalling the products if they have failed to perform their intended function, or have caused bodily injury and/or property damage).

Citynet’s expertise can be shown in offering bespoke solutions which can cover not only the three points above but also additional covers such as malicious tampering, brand protection, and pre-crisis consultancy. Citynet’s assistance in sourcing the right policy with the correct cover can help businesses recover quickly if they need to recall a product – something that can spell bankruptcy for many small businesses.

Tim Hicks, Head of Schemes and Specialty Risks at Citynet said: “Companies providing products have a responsibility to their customers to ensure their products work and are safe, however, we all understand that mistakes can happen. Recalls, whether caused by accidental or malicious contamination of products, can potentially keep businesses awake at night if they don’t have the correct insurance in place.”

“If there’s something wrong with a product, consumer reactions tend to flare… and when emotions are in play the ‘domino effect’ can take place – this is how smaller businesses can really take a hit as reputation makes a significant contribution to their success. If a product fails to perform its intended function, it can not only devastate a company’s brand name but also its profitability resulting in an increased pressure on companies to retrieve faulty products and rectify the problem.”

This ‘domino effect’ is amplified now more than ever, as reporting faults via the internet and social media can devastate brands overnight. A food sabotage case in Australia (where needles were found in strawberries) caused a scare among consumers and cost the industry hundreds of jobs. In another incident, a meat producer recalled over 130,000 pounds (around 60,000 kg) of ground beef due to E. coli contamination.

Although a product recall can damage reputation, it doesn’t necessarily mean the end of a brand. If managed correctly, it can show to customers that the company is responsible, and this can restore trust.

Whether you are a manufacturer, wholesalers or retailer, the risk increases as the supply chain grows more complex (and new legislation is put in place), so when a product fails, the management of the event is critical to softening the blow as a result of recalls or liability claims.

Unfortunately, many manufacturers are exposed to large recall events because they choose to only purchase products liability cover which will ordinarily exclude cover for claims arising from the recall or withdrawal of defective or faulty products. The specialists at Citynet understand the impact that a product recall can have on a business and are well placed to assist you in devising the best program to ensure the most comprehensive cover is in place for your clients.

With Citynet’s assistance, you can be sure that your clients’ products insurance is positioned in such a way that their businesses are well prepared to weather any storm that blows their way.