North of the border: Judicial awards in fatal claims Feature articles
Claims club dinner and awards – The Claims Awards 2011
Jonathan Swift, chairman of the judging panel and Post's editor-in-chief, welcomed guests to the 2011 Claims Club annual dinner at Grand Connaught Rooms, London by praising the hard work that the claims industry does and explained that in aiming to provide a full service to its members this year, the claims awards have been introduced.
Lloyd's & London Market – Remuneration: War of the words
Lloyd's brokers are on the defensive after controversy surrounding commissions and fees re-emerged. But as underwriters demand clarity once and for all, are buyers happy as long as premiums stay low and their own charges stay transparent? Post Magazine reports.
Legal expenses – ATE: End of the road?
With the government giving the green light to implementation of Lord Jackson's civil litigation reforms, Post Magazine details the adverse reaction of legal expenses insurers and whether this sounds the death knell for the ATE market.
Parent company responsible for subsidiary action in asbestos case
False statements alone will not prove contempt of court
FSA turns up heat on specialist products as complaints rocket 66%
Hiscox chief predicts rate rise after run of disasters Feature articles
Interview: Michael Casella, Chubb
'I need customers who recognise that I need to make money, or I won’t be in business with them’.
IT Spotlights Claims: Still paying for winter
UK insurers are still recovering from last year’s big freeze, which cost the industry £1.4bn.
IT Spotlights: Claims casebook
The recent insurance-related legal judgments and what they mean for the sector.
Transatlantic to launch UK personal lines brand
Transatlantic Re is set to launch a new UK personal lines general insurance venture, as the US giant looks to capitalise on hardening premium rates in the motor market.
Post has learnt the venture will be domiciled in Gibraltar, and has been registered with the Financial Services Commission there and as a US trademark under the name Calpe Insurance. The Financial Services Authority granted Calpe Insurance permission to passport into the UK in March.
A source close to Calpe told Post that Transatlantic had yet to identify a leader for the operation, but it understands a board of directors is already in place to support the venture: "Through the various cycles, Transatlantic has been involved with the UK motor market before, and the time is coming around where the business looks a better proposition. This will be another avenue to try and get a piece of that business."
According to FSA filings, Trans- atlantic's Calpe Insurance operation has been granted permission to passport lines including motor vehicle liability, general liability, assistance, land vehicles, fire & natural forces, and property damage. Calpe Insurance was filed with the Intellectual Property Office in the UK in July 2010, and registered in October last year.
The Calpe source added that the new vehicle would reduce the firm's reliance on "business coming through the door in its London operation", but declined to comment on distribution plans.
The development bucks trends in recent years which have seen notable exits from the UK personal motor market, including HSBC Insurance, NIG, Chartis and QBE.
However, the AA's latest premium index noted that in the first quarter of 2011 the typical premium for a comprehensive car insurance policy rose by 5.9% to £892.08; and by 40.1% for the 12 months ending 31 March 2011.
Mark Winlow, partner at KPMG, said increasing interest in the UK motor market was "logical", but added claims inflation would remain a challenge: "You could ask why a firm would join a market where the combined ratio is 140%, but that hides a whole range of different performances. I'm sure any firm would be looking to emulate the success of Admiral in this market.
"The biggest threat will be claims, but the advantages would be a low-cost operating model and low expense ratio. The claims ratio will be the one a company has to work hardest on.
"The logic is right as the market is hardening, but the gradient is pretty shallow at the moment. I don't think the market will overcorrect with new players entering, as the aggregator market will keep this in check."
Transatlantic Re's New York office was unavailable for comment as Post went to press.
Calpe is the Latin name for Gibraltar.
Mitsui Sumitomo has “adequate capacity” following Japan situation
Mitsui Sumitomo at Lloyd’s has updated the UK insurance market on the current situation in Japan following the earthquake and tsunami at the beginning of this year.
Andrew McKee, CEO of Mitsui Sumitomo at Lloyd's, said: "It is still too early to assess the full economic impact of the Tohuku Pacific earthquake on the MS&AD Insurance Group, and specifically on Mitsui Sumitomo at Lloyd's. However, I can confirm that the business remains strong, has adequate capacity to pay any claims arising and continues to maintain extremely strong financial reserves."
Based on best current estimates it appears that earthquake and tsunami claims for domestic (Japanese) insurers are likely to reach approximately one trillion yen (approximately £7.5bn). MS&AD anticipates exposure of around 65 billion yen (approximately £500m).
Given the scale and financial strength of the group, this is a very manageable exposure.
Commenting on the recent rating changes following the tragedy and Mitsui Sumitomo's undiminished appetite to write business, Mr McKee continued: "The recent ‘revisions of outlook' of the major Japanese insurers by the rating agencies following an event of this magnitude are necessary and welcome. We are communicating closely with the agencies and hope that our financial rating will be unaffected.
"Closer to home, Mitsui Sumitomo at Lloyd's has experienced very little exposure to the Japanese catastrophes and continues to operate normally. Our appetite and capacity to expand our business remains undiminished, we continue to seek to underwrite new risks and our commitment to this territory, our brokers and our clients is absolute."
Ageas to hike household rates to emulate motor
Ageas is set to continue hiking rates on its household insurance, on top of the 10% it has already pushed through in the first quarter of 2011, in a bid to replicate the improved combined ratio already seen in its UK private motor performance.
Speaking following the insurer's Q1 results, which showed a profit before tax for its non-life business of £3.9m — a £9.2m improvement over the same period last year — Barry Smith, chief executive of Ageas UK, told Post that compared to motor "it still feels like there is more to be done" on property.
"A lot of insurers have seen corrective action in motor and our relative position is quite strong," he said. "The improvement in the combined ratio to 97.3% provides evidence that we took a lot of action in 2009 and 2010 to get us to the position we are in today.
"But we have put our building rates up quite considerably in property and that is a direction we will continue to follow."
The insurer recorded an overall combined ratio of 104.6% (Q1 2010: 110.2%), despite higher than anticipated prior-year escape of water claims that added 17.5% to the household combined ratio during the first quarter of 2011.
Ageas added that Tesco Underwriting, its new insurance business with Tesco Bank, of which 50.1% is owned by Ageas, now has 575 000 customers and has generated GWP of £219.8m since launch in October 2010, including £133.2m in the first quarter of 2011.
Mr Smith told Post that its priority for the Tesco partnership is to "deliver on what we already have" in 2011, although it may well expand from the household & motor footprint in the future.
"It's a big year in the context of building on what we made happen in 2009 and 2010," he said. "The Tesco Underwriting deal, more electronic trading, commercial growth and the 2010 acquisition of Kwik Fit.
"All of these things will continue to be priorities for us over the course of this year and that's why we have a degree of encouragement in the first quarter."
Chaucer takeover set
The acquisition of Chaucer by The Hanover Insurance Group, set for completion by 1 July, will create a combined premium income of $4bn, and bring scale, diversity and financial strength benefits to all stakeholders, according to the Lloyd's insurer.
Speaking following Chaucer's first quarter results for 2011, which recorded gross written premium income of £274.1m (2010 Q1: £250.1m), a spokeswoman told Post: "It is very much business-as-usual at Chaucer — the management team will remain and there will be enhanced US distribution channels."
Heath wins GI contract
Recently acquired Heath Lambert has won the contract to supply general insurance to listed urban regeneration and strategic land specialist, MJ Gleeson Group. Gleeson specialises in housing developments on Brownfield land in the North of England. It also purchases options over land in the South of England to increase the value of the sites securing residential planning consent, while investing in social housing through private finance initiative schemes. Heath Lambert projects head of projects risk team Mike Hawkes said: “ We are delighted to be working with such an outstanding company at Gleeson. The land regeneration and land trading sector is growing rapidly and Gleeson recognised our team’s determination to offer the best service for their needs”.
Zurich rings changes to commercial broker division
Zurich has made a number of new appointments as part of the planned restructure of its UKGI commercial division.
James Roberts will become head of broker market, South, and be based in Croydon. He replaces Dave Carey who has moved on from his role as head of navigators & general to become head of mid-corporate.
Jake Algar is promoted from assistant City manager to become City manager. He replaces Roy Standish who is now head of real estate insurance.
Matt Hartigan will become head of broker market, North West, based in Manchester. He moves from the same role in Bristol.
Richard Smith, currently head of broker market, North West, is to become learning & development manager for commercial broker. In the new role based in Bristol, Mr Smith will be tasked with driving learning & development across the division, creating a consistent, co-ordinated L&D environment.
Gary Wainwright, director, commercial middle market and specialties said: "We have made some significant leadership changes in the first quarter of the year in our new commercial broker operation. It's a great that we have the expertise in our UK business to create fresh challenges and opportunities for our top talent, which serves as a catalyst for further development of our business. I'm particularly pleased that we now have such a senior position within commercial broker dedicated to L&D, demonstrating our commitment to our commercial broker workforce."
Insurers rail against solicitors’ PI burden
The insurance market should not bear the burden of "regulating the solicitors' profession" due to insufficient regulatory intervention, the Association of British Insurers has warned.
This was the argument made by ABI policy adviser Matthew Young at a panel debate last week on the failures of the assigned risks pool, which the Solicitors Regulation Authority will scrap from October 2013. The ARP, a temporary fund of last resort for firms unable to secure commercial cover, is already facing a shortfall of available premium to pay claims for the year 2011/2012.
In 2013, the ARP will be replaced with a system where insurers offer a three-month extended policy period to firms struggling to obtain cover. Speaking at the event, hosted by Greenwoods Solicitors at Lloyd's, Mr Young said insurers had effectively provided "de-facto" regulation, by pinpointing the firms unfit for professional indemnity cover.
This was a job for the SRA, he said, and one it needed to handle more efficiently: "We need to look at why the ARP failed; it was because it was a substitute for regulation. In the absence of the regulator stepping in to say firms did not have the necessary skills, insurers were making the decisions for them."
Elliot Vigar, head of regulation at the Law Society, acknowledged the ABI's stance, adding: "It is fair to say insurers should be insurers and the regulator should regulate." For 2011/2012, solicitors' PI qualifying insurers will have to front up £38.6m to fund the ARP.
Mr Vigar also added it is important the legal profession "helps to cover its share of ARP liabilities" — something welcomed by Mr Young as a "more mature approach".
Garwyn sector groups
Liability adjuster Garwyn will have launched 11 sector-specific practice groups by the year end, with engineering & manufacturing; environment and waste; facilities management & security; and sports, leisure & entertainment set to be up and running by December 2011. The loss adjuster established its first group focusing on food and drink last autumn and has added three more dedicated units over the past nine months. A further three are set launch in June.
Ford tackles credit hire fees with claims service
Car manufacturing giant Ford is to launch a dedicated 'credit hire free' accident management arm for its customers in a bid to help eradicate personal injury claims inflation.
Ford of Britain will launch the proposition — Ford Accident Management — with business process outsourcer The Innovation Group on 1 July, as it seeks to boost its offering to consumers in the retail market. The offering will apply to owners of all Ford models in the UK, and Post understands it has plans to move the scheme into fleet.
TIG will take control of the claims experience for Ford customers, from first notification of loss, to finding a suitable Ford garage to make repairs. Both parties claim they will not profit from Ford replacement cars issued to customers.
If a Ford driver is at fault, it will take on the cost of replacement vehicles. If not, the replacement car cost will be charged to the at-fault insurer at a general terms of agreement rate less 15%. Simon Hall, director of UK motor at TIG, said: "We think this will be a market-changing model, and it is an insurer-friendly one."
Paul McDermott, collision repair manager at Ford of Britain, added: "There is no incentive for us to string out the repair; a credit hire firm would want someone to be in a car for as long as possible. We cannot be paid referral fees. At-fault insurers will pay substantially less, and the insurers we have spoken to are keen."
Martin Dowding, manager of Ford Accident Management, added: "We wanted to do something that was brand new to the market. TIG gets a flat fee for a car they hire, and it doesn't matter whether it is one day or 50."
Mr Dowding said he hoped motor insurers would take note of the proposition — and plan for a reduction in premium rates for Ford customers if it is a success: "Premiums are high because of credit hire and personal injury. We have taken action to remove that cost and, in the long term, hope we will be in lower insurance groups. I'm sure that would be the long-term goal of all car manufacturers."
North of the border: Judicial awards in fatal claims
After six months of consistently increased Scottish civil jury damages awards for fatalities, Bellingham & Others v James Todd has now demonstrated the prospective impact on judicial awards.
Section 1(4) of the Damages (Scotland) Act 1976 permits qualifying relatives — including siblings since 2006 — to claim damages for grief caused by a wrongful death, and for loss of the deceased's future society and guidance. North of the border, there is no statutory ceiling on such awards. Recent awards have peaked at £120 000 for one claimant, a 17-year-old girl whose mother was killed in a road traffic accident.
Mr Bellingham, a 40-year-old motorcyclist, was held 80% responsible for his collision with a van he was tailgating, the van driver bearing the balance of responsibility. The deceased's parents, children, brother and widow claimed s1(4) damages, and parties' valuations diverged widely. The claimants founded upon jury awards as setting a pattern which the judge should follow.
Lord Woolman extrapolated principles from previous authorities on addressing differences between judicial and jury awards. Awards should reflect society's expectations and so are a jury matter. Consistent patterns in jury awards should, therefore, guide judges. Relying on a single jury award or treating all classes of relative identically should be approached with caution, though.
In considering recent jury awards, it was only in relation to the loss of a child that a pattern could be demonstrated. Lord Woolman was also wary of relying upon awards made arising out of a Nimrod accident in Afghanistan in 2006, due to the emotive impact on a jury of the negligent loss of sons on active service for their country. Two of the other recent jury awards are being appealed by the defenders as excessive.
The judicial awards made after this analysis were at most only marginally higher than the defenders' original valuations (see box).
Since Bellingham another case has been heard by a judge on the appropriate level of s1(4) claims in a mesothelioma case. That decision will hopefully be issued shortly and provide an indication as to figures for different family members.
Lesley Allan is an associate in the Glasgow office of Simpson & Marwick
Parent company responsible for subsidiary action in asbestos case
Chandler v Cape
(Queen's Bench Division — 14 April 2011)
The claimant was exposed to asbestos whilst employed by Cape Building Products for two periods in 1959 and 1961/1962. Although he did not work directly with asbestos, production of asbestolux boards caused asbestos to permeate the entire site and, as a consequence, the claimant developed mesothelioma.
Cape Products had ceased to exist and no employers' liability insurance was available to compensate the claimant. The claimant argued that Cape, as parent company, also owed a duty of care to the claimant and was concurrently liable.
Mr Justice Wyn Williams in the High Court decided for the claimant on the basis that Cape owed a concurrent and independent duty of care to the claimant because: it had actual knowledge of the working conditions on site; the production of asbestos in a building without sides caused the escape of dust and was a systematic failure that Cape knew about; the risk was obvious; Cape employed group scientific and medical officers who were responsible for health and safety issues for the group as a whole; and, on the evidence, Cape and not its subsidiaries dictated health and safety policy.
This case should not be seen as representing a departure in imposing liability on a parent company. To pierce the 'corporate veil' and impose a liability for the acts of subsidiaries, claimants need to prove that the parent and subsidiaries operate as a single economic entity with subsidiaries operating under the complete control of the parent.
Also, claimants will have to prove the corporate arrangements were such that the parent operates effective sole and exclusive control of the subsidiary's activities or that the arrangements were effectively a 'sham' designed to evade liability.
However, the duty considered in this case arose because the particular level of control and strategic direction by the parent over the subsidiary was to such an extent that, in relevant matters such as health and safety, it was a parent and not the subsidiary that called the shots.
Parent companies consequently need to look to their own actions and determine whether they themselves enjoy a direct liability even if they feel confident in the protection of the corporate veil. A parent company of subsequently acquired subsidiaries with legacy liabilities will not find itself liable but equally a parent of a recently disposed subsidiary may be at risk if a claimant can establish that the parent at the time of tortuous activity (eg asbestos exposure), enjoyed a close and controlling relationship with its former subsidiaries. Failure to consider this possibility and investigate accordingly at the diligence stage in corporate acquisition can, therefore, lead to unwelcome consequences in the future. Toby Scott, BLM Leeds
False statements alone will not prove contempt of court
Montgomery v Brown
(Queen's Bench Division — 8 April 2011)
Insurers are faced with the difficult task of having to 'self police' their industry and have been reminded of the required standards to achieve a successful contempt of court action and enforce deterrence policies.
The Honourable Mrs Justice Cox dismissed an application for contempt of court proceedings in this case, as the defendant was unable to prove that the claimant had knowingly made false statements and was seeking to suppress or misrepresent his true employment status in order to advance a dishonest claim.
The claimant pursued substantial damages following a serious road traffic accident, caused by the negligence of the defendant. Two days prior to the assessment of damages, the claim was compromised at a substantially reduced figure than prior negotiations. Evidence came to light that contradicted the claimant's pleaded case. The defendant, therefore, alleged that the claimant had lied about his employment following the accident, concealing his highly remunerative role and colluded with his father, seeking inflated damages.
The court heard evidence from the claimant and his father on two occasions before passing judgment. It found that the claimant had never attempted to hide his employment history and that his former solicitors had not complied with Civil Procedure Rule 22 when endorsing the original and the updated schedules of loss.
However, the claimant had still endorsed a misleading statement which said he had not really worked. Conversely, he had been in highly remunerative employment, often earning more than he had done prior to the accident. Notwithstanding the failures of his former solicitors, who had failed to question the respondent on key disputed issues when taking his statement, the claimant had still signed the statement which he claimed not to have read.
While there were some unsatisfactory features, the court could not be satisfied that the claimant had deliberately misled the court and attempted to interfere with the administration of justice. Despite the misleading statement, the claimant had provided full financial disclosure all of which negated any suggestion of dishonesty. The application was dismissed.
Despite CPR 23.14 this is a stark reminder that when considering such action, having possession of misleading evidence, it is the criminal standard for contempt of court and one cannot rely solely upon a false statement of truth alone to satisfy the standard of criminal intent. Each case is determined on its own merits and further investigations may be required before such serious action is commenced. The case of Motor Insurers' Bureau v Shikell & Others (2011) in which the claimant sought to misled experts, his solicitors, the MIB and the court about the severity of his injuries following a road traffic accident, highlights how such actions can succeed an the need to self-police the insurance industry in order to deter fraudsters. Craig Nunn, BLM Manchester
'Crime of violence' debate over suicide
Jones (by his mother and litigation friend Maureen Caldwell) v First Tier Tribunal (Social Entitlement Chamber) and Criminal Injuries Compensation Authority
(Court of Appeal — 12 April 2011)
At about 2.20am on 18 January 2005, Barry Hughes parked his car on the hard shoulder of the A282 then ran into the middle of the central carriageway, before turning to face an oncoming lorry, presumably to commit suicide, whereby he was killed instantly. As a result of braking, the vehicle strayed into the path of a gritter lorry on the nearside carriageway and a collision occurred. The driver of the gritter, Gareth Jones, was thrown from the vehicle and suffered catastrophic injuries.
Mr Jones applied to the Criminal Injuries Compensation Authority for compensation. His application was refused on the basis that there had been no crime of violence, which is a requirement of the scheme. Mr Jones appealed, claiming that Mr Hughes had inflicted grievous bodily harm, contravening section 20 of the Offences Against the Person Act 1861.
This was rejected by the first tier tribunal, which was not satisfied that Mr Hughes intended to cause harm or was reckless to the degree considered under s20 of the Act.
Mr Jones sought judicial review of the decision, which was again unsuccessful. The upper tribunal accepted that it was open to the FTT to consider that Mr Hughes was so focused on his impending suicide that he was blind to all other consequences of his actions.
The Court of Appeal disagreed with the test applied by the lower tribunals. It did not accept that Mr Hughes' actions could not amount to a crime of violence.
While there was an absence of direct evidence as to the actual state of mind of Mr Hughes, this did not mean that there was no evidence capable of supporting the necessary inference that he must have foreseen the likelihood of harm being caused to persons other than himself. The test adopted by the FTT was too narrow.
This is an example of a case where it is not always clear whether injuries have resulted from a crime of violence for the purpose of a CICA application for compensation. The case provides a useful reminder of the correct test which a tribunal should adopt in deciding whether an s20 offence, and thus a crime of violence, had been committed. Paul Lever, BLM Manchester
FSA turns up heat on specialist products as complaints rocket 66%
Brokers must tread carefully to avoid being drawn into another mis-selling scandal.
Industry leaders are being warned the FSA is preparing a clampdown on ancillary and specialist products following latest figures showing an alarming rise in customer complaints against the insurance market.
The Financial Ombudsman Service (FOS) figures for 2010 showed payment protection insurance (PPI) complaints more than doubled to 104,597, fuelled by claims farming. Complaints against specialist insurance products in general rocketed 66% to 1,791 last year.
Aware that it must avoid another mis-selling scandal, the FSA has specialist products on its radar, including mobile phone insurance and ID theft, as well as some add-on products.
There is concern that customers are being pressured into buying the products, only to later find that they were never eligible to claim or were already covered by another insurance product.
The FSA has raised the issue with larger brokers, especially those operating in personal lines, during its recent Arrow inspection visits.
Towergate chief executive Andy Homer told the recent Biba conference that Towergate had received “attention” from the FSA over add-on/bundled products. He said that there was going to be extra scrutiny around conduct of business. Brokers would need to think carefully about how their products had been sold. Unless intermediaries were careful about explaining products to customers “we could find ourselves being drawn into apparent mis-selling”, he warned.
Both the FSA and Westminster are alarmed by some of the huge margins being made through the sale of add-on products.
A study by Deloitte, released last October, revealed that personal lines brokers on aggregators can take 80%-95% commission selling motor legal products for £20-£25. Commissions of 60%-80% can be taken from selling a key cover policy for £10-£15.
Chairman of the parliamentary all-party group on insurance Jonathan Evans said he was aware of the large margins being made through the sales of add-ons. He said: “If commissions are at 90%, one suspects that it comes back to instances of mis-selling.”
Compliance expert Branko Bjelobaba said that many brokers were doing very little to explain how the price of bundled and add-on products were being arrived at. He said: “They make the broker lots of money, which comes in handy as there is no interest to be made on bank account balances.”
An FSA spokesman stressed its new policy strategy was to intervene in the design of products, as well as swooping on products already being mis-sold on the open market.
The FSA bared its teeth by swooping on credit card insurer CPP in March to prevent it selling ID theft insurance, a specialist insurance product that has undergone a sales boom in recent years. The intervention triggered a profits warning for CPP and a share price crash. The intervention followed concerns over the validity and purpose of the product.
Another specialist product, mobile phone insurance, is next in line in the intervention priority list. The FOS said in its annual report that customers had been misled into believing they were obliged to buy insurance alongside their phones.
Mobile phone complaints took up around half of the 1,791 complaints against specialist products. Biba has not yet had any official contact from the FSA over the sale of specialist or add-on products.
Director of sales at UK General John Bibby leapt to the defence of brokers, stressing that ancillary and add-on products had a valuable role to play, although it should be explained clearly to the customer exactly what they were getting.
He said the commission earnings also helped brokers to subsidise other insurance products sold at a very competitive rate.
Bibby added: “The majority of brokers want to provide a good, professional service and, by and large, they do exactly that.”
Hiscox chief predicts rate rise after run of disasters
Bronek Masojada says reinsurance rates will spike, but doubts the increase will last.
Hiscox chief executive Bronek Masojada believes reinsurance rates will spike, following a spate of catastrophe losses, but questioned whether the rises were sustainable.
Reinsurers are counting the cost of disasters including the Japanese earthquake and tsunami in March, the New Zealand earthquake in February and January’s heavy flooding in Australia. Lloyd’s faced £2.3bn in claims after these events.
Masojada said mid-term reinsurance renewals would undergo rate rises because of these. “In terms of the 1 June and 1 July renewals, prices in property and casualty are going to rise 10% plus with cumulative losses and the impact of RMS 11.”
But Masojada said reinsurance rates for January 2012 renewals still hung in the balance.
“Looking ahead, rates will become tepid unless there is a $10bn [£6bn] loss or more during the Atlantic hurricane season,” he said. “A $10bn loss is not big, but after you’ve already had $10bn worth of tornado losses it’s all about the cumulative position.”
Panmure Gordon analyst Barrie Cornes said rate rises were likely to hit reinsurers, but skip the primary market. He said: “A lot of the London-based smaller primary insurers are saying, because of their losses in the first quarter, any losses from US windstorms are likely to go straight to reinsurers and miss them out.
“It’s good from their point of view because it won’t affect their net tangible assets. But if it only hits reinsurers, it will take a while before it creates reduced insurer capacity.”
Cornes believes the market can still undergo further catastrophe losses without primary rates moving. He said: “Previously, a $10bn storm would have been the final straw. Now I’m not convinced it’s enough.”
Pass notes: This year's rates What affected 2011 reinsurance rates?
In January, rates fell 5%-10%. After a string of natural disasters in late December and early 2011, rates rose by up to 50% in loss affected areas. The next renewal periods begin on 1 June, 1 July and 1 January.
What can we expect now?
The Atlantic hurricane season runs from 1 June to 30 November. Twelve to 18 storms are predicted, of which three to six are expected to be major.
How can insurers prepare?
Lloyd's chief executive, Richard Ward has warned insurers to raise premiums or face severe losses in the event of a major event. Following two seasons without a hurricane making landfall, Ward said: "At some point, our luck will run out."
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