Welcome to the autumn edition of the MGAA newsletter.
Whilst Halloween is just around the corner, so are the thematic consultations open for our thoughts. Further details below but I must implore you to review and respond on these three papers as it is essential that we put our thoughts to the regulator before any decisions are taken.
The evolution and growth of the MGA market in recent years has been phenomenal. The root of the MGA model’s success lies in its ability to be nimble, entrepreneurial and untrammelled by the demands of larger organisations. However, the characteristics which have been the ingredients to MGAs’ success, without support, may eventually begin to curtail or even halt their growth. Investing time and resources into digital capabilities is difficult for small teams focussed on growing their businesses and developing contacts in their chosen sectors. We have invested heavily in a cutting edge digital platform which is already being used extensively by delegated authorities in the US, providing them with the software to allow them to do what they do best. This is now being rolled out in the UK and in countries across Europe. We want to support MGAs and we have the capabilities and resources to complement those businesses looking to grow. Click here to view this video
The impact of Macroeconomic trends on London Market Claims
BLM, in partnership with the Institute of Directors, has conducted research into the current macroeconomic trends affecting the Lloyd’s and London Market, investigating the impact of the recent global recession and economic risks over the coming years. This is the second time we have undertaken this research. In 2015 our findings addressed the macroeconomic trends with a focus on professional indemnity, property & environment, and casualty. Now in 2017 and at a time of economic and political uncertainty, it is an optimal time to take another look.
This first paper of the Macroeconomic Trends Series analyses professional and financial risks and covers likely claims trends for a range of different sectors, including financial, construction, property and law. Please click here to read the press release and download the whitepaper.
Discount rate – two bills announced and rate change expected in medium term
On 7 September 2017, the Lord Chancellor issued a regulatory news story to the Stock Exchange which confirms that new draft legislation will be brought forward to re-set the current personal injury discount rate of minus 0.75%. Please click here to read the article in full.
Simply Business MGA
Policy Excess Insure Ltd
MGAA goes to Birmingham
The MGAA ran their first regional learning and development day in Birmingham with the RSA.
This was complimentary to our annual event in Lloyd’s and members were treated to an in-depth training on what makes a good MGA business plan andthe analytics surrounding various classes of business to ensureprofit margins are sustained.
Our thanks go to Steve Hedge and the RSA team for hosting a great event.
MGAA Conference 2017
In my summer edition I referred to our hugely successful conference which was only made possible by the support from our sponsors so once again I would like to extend our thanks to them for investing in the MGAA and in our members.
Highlights from the day including videos,comments from the panel chairman and some of the panellists are available here.
Pleaseview these and pass them to your colleagues so theymay also view the recordings to see what your trade association is doing on their behalf.
In 2018 we will hold our 4th annual conference and at this stage of planning I would welcome any members thoughts on themes or topics which they feel the MGAA should develop and where applicable formulate a panel debate for open discussion.
Working with Associate members, Grant Thornton, we have updated the guidance on FATCA. Throughout the summer months the US Department of Treasury and the IRS have been busy implementing new changes and processes. Below are key dates:
30th December 2016: Final and temporary regulations were issued in regards to the withholding of tax on certain US source income paid to foreign persons, information reporting and backup withholding with respect to payments made to certain US persons. This followed the release of a new FATCA Online Registration User Guide making it easier for foreign financial institutions to comply with FATCA;
6th January 2017: Regulations (REG-103477-14) were published setting forth verification and certification requirements for certain entities under Chapter 4 in the Federal Register; and
27th June 2017: The IRS released a revised version of the Form W-8IMY
DAC Beachcroft has published its Insurance Market Conditions and Trends 2017/2018 report. Now in its 11th year, this flagship publication provides insight and commentary on key issues that are likely to have the greatest impact on the insurance market over the coming year and beyond.
This year, InsurTech is a recurring theme in both the predictions and our in-depth analysis articles which focus on autonomous vehicles, artificial intelligence and blockchain. The report concludes with summaries of the most significant legislative, judicial and other legal developments over the past 12 months.
FCA consultation papers
Insurance Distribution Directive- CP17/23
The FCA has now issued their second paper on the IDD. The consultation closes on the 20th October 2017 and FCA willreview the responses and issue a policy statement in December 2017.
We have sent out details of how to respond to FCA and the MGAA. For details of this consultation click here.
It never rains but it pours. The CP17/33 consultation paper is the 3rd of 3 papers looking at IDD. It focuses upon areas such as conflicts of interest and product oversight.
Whilst this paper is open for feedback until 25th November we do need the MGAA to comment, so pleasesendyour comments to us and we can provide a market response accordingly.
Senior Managers & Certification Regime (SM&CR) – CP17/26
On the 5th October, the MGAA held a shape and share market briefing on this matter. We are grateful for our partners, CMS for hosting this event and would thank all participants for their help.
To remind members, FCA has issued this consultation paper whereby they are extending the Senior Managers & Certification Regime which is focussed upon individual accountability.
Those who attended the FCA “Open Door” meeting on the 3rd October would have heard FCA’s Mike O’Hagan explain more about this consultation paper and encourage MGAA members to respond. For details regarding this consultation, click here.
A briefing note has been compiled for membersby CMS and is intended to be a summary of the FCA’s SM&CR Consultation Paper. It focuses largely on the aspects of the consultation paper which are likely to apply to the majority of MGAA members. Click here to download this paper.
FCA – Good Cyber Security
FCAs Tony Gellett has produced an infographic setting out a number of issues relating to Cyber and also pointing to how the insurance industry should report such attacks.
John King, Manager General Insurance supervision at FCA has recently written an article regarding “Broker due dilligence on Insurers” This was first published in BIBA’s Compliance Rules Q3/2017 and both John and BIBA have agreed to share this editorial with a wider audience. Click here for more details.
InsuranceTimes are carrying out a survey with Brokers in relationto MGA Service. Whilst Brokers may have Delegated Authority Agreements this is our opportunity to show how our sector enhances the UK Market, so send this link to your supporting Brokers and encourage them to vote favourably for your service.
Flood Re have advised that there will be a new release of data from the Valuation Office Agency and the Scottish and Northern Ireland equivalents to the Property Data Hub. This data will be made available in the On-boarding Test Environment (OTE) for offline users to download and was promoted to the live environment in September.
Members are requested to download the data as soon as possible. If you have any questions then please contact the Flood Re service desk on: firstname.lastname@example.org or via telephone on +44 (0)330 024 3131.
LM TOM Market Business Glossary is live
The Market Business Glossary is now live and available to all market participants. Release 1 of the capability is focussed on the reporting of premium and claims data for coverholders, making the process more intuitive and efficient.
This tool is designed to integrate with the majority of market businesses’ own IT infrastructures allowing users to register and sign-on using their existing work credentials. The objective is to make the process simpler and more efficient, making the London Market an easier place to do business.
Helen Crooks, Chief Data Officer at Lloyd’s and Market Champion for the Data Integration solutions, commented “Data is a vital component of our work and our key aim is to get it flowing through the market in a uniform and consistent manner so that everyone can benefit from better quality information, delivered faster. Straight through processing for example cannot happen without a set of common agreed data standards in the market.
“The Market Business Glossary solves that problem by delivering a centralised repository of business definitions and rules and is a vital component in helping us to digitalise the marketplace. Common data will also reduce the risk of errors and inconsistencies and the need for re-work and remediation. This launch is just the first step in the process, and over time the Glossary will evolve with the inclusion of new features and data responding to the market’s priorities and needs.”
To find out more:
Visit the Market Glossary web page or join them at one of the Information and Training workshops; register online.