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An update on what's been going down in the insurance industry this week: Tower shareholders appear jittery; Suncorp launches Tinder-like app; Partners Life gets $200m boost; Delta extends level of cyber security cover available in NZ

An update on what's been going down in the insurance industry this week: Tower shareholders appear jittery; Suncorp launches Tinder-like app; Partners Life gets $200m boost; Delta extends level of cyber security cover available in NZ

There have been a few significant developments in the insurance industry over the past week. Here’s a summary of what has been happening:

Insurance made ‘sexy’

Suncorp Group has partnered with a San Francisco-based fintech startup, Trōv, to launch a “Tinder-like” insurance platform in Australia.

Trōv Protection is an app that allows you to select individual items you’d like to insure using a mobile device.

You simply swipe right to secure protection of an individual item, swipe right again to claim, and swipe left to turn protection off. To make a claim, you send a text message which Trōv picks up through an automated system. It manages the claims process through a live chat set-up.

Trōv Protection has been issued by AAI Limited, a Suncorp Group company.

It will launch in the UK through a partnership with AXA later this year and the US and “other territories” in 2017. It makes no mention of bringing the app here, however New Zealand’s second largest general insurer, Vero, is part of the Suncorp Group, alongside AA Insurance New Zealand.

Trōv founder and CEO, Scott Walchek, says the app targets Millennials - “the most underinsured generation ever for whom almost everything of importance is channelled through the smartphone. Social networking, food delivery, dating – you name it.

“The mobile generation adopts technology at a rapid rate and is consequently spearheading a dramatic shift in purchasing behaviour. Everything is on-demand – and business has to adapt accordingly. It’s no different for insurance.”

At the moment you can only insure electronics through Trōv Protection, but other categories will be added in coming years. The app is also only available on iOS, with Android support coming soon.

The launch of Trōv Protection comes a month after the startup secured US$25.5 million in a Series C funding round led by Oak HC/FT, bringing total funding to US$39 million.

Devon and AMP flog Tower shares

Two of Tower Insurance’s major shareholders have flogged off chunks of their shares, while ACC has increased its piece of the pie.

On Tuesday Tower announced to the NZX that Devon Funds Asset Management has dropped its shareholding from 11.9% to 7.8% and AMP Capital Investors has decreased its shareholding from 6.9% to 5.4%. Meanwhile ACC has increased its stake from 6.9% to 8.3%.

This comes further to the country’s fourth largest general insurer announcing on March 3 that Devon cut its shareholding from 13.0%, and on January 13 announcing that AMP cut its shareholding from 8.0%.

Tower’s share price hasn’t recovered from the knock it took after last week reporting a loss of $8.7 million in the six months to March.

Its share price fell 16.9% after the financial results were announced on May 24, and have only rebounded by 3.4% to $1.52. Tower’s share price was $2.21 a year ago, from which time it’s consistently tracked downward.

Like the other general insurers in New Zealand, Tower has run out of reinsurance to pay for the February 2011 Canterbury earthquake, so has had to fork out to buy costly additional reinsurance cover, as well as dig into its own pockets, to pay for remaining claims.

Partners Life gets $200m capital investment as it plans to float on the stock exchange

One of the world’s largest asset managers, Blackstone Tactical Opportunities, is investing $200 million in Partners Life.

The capital investment equates to a significant minority shareholding in the life insurer and means it won’t have to go back to equity markets to fulfil its medium team capital requirements.

Partners Life’s managing director, Naomi Ballantyne, says the company intends to seek a public listing when share market conditions are right, and Blackstone’s support up to and throughout a future listing process will allow the company to solidify its position in the New Zealand market.

Blackstone’s managing director, Kishore Moorjani, says: “We are delighted to announce our investment in Partners Life, an innovative player in the insurance sector. Through our engagement with the Company, we have been impressed with the growth achieved by Partners Life as well as the quality of its management team and customer centric approach." 

Blackstone’s also invested in five retirement homes in New Zealand. Its investment in Partners Life is subject to shareholder and regulatory approval.

Level of cyber insurance cover available in NZ increased to $30m

Delta Insurance has doubled its liability cover for cyber insurance to $30 million, following its announcement of a new partnership with Antares - an independent managing agent at Lloyd’s.

“Brokers and insureds will have access to policies with increased capacity and existing clients will have the ability to review policies for greater coverage,” Delta says.

“Delta will be the first local New Zealand provider to offer $30 million limits for some specialist liability lines of business in which it already provides market leading coverage: Cyber Insurance; Technology Liability; and Environmental Insurance.

“The additional capacity reflects the growing trend of insured’s increasing their liability limits.”

Cyber insurance is said to be the insurance industry’s largest growth area.

The Government is becoming increasingly conscious of cyber security, investing $22 million over four years to set up a Computer Emergency Response Team (CERT), which will collate data on cyber breaches voluntarily reported to it, and provide advice to businesses on cyber security.

Meanwhile threats are growing. In fact, LinkedIn last Thursday sent its members an email saying:

“On May 17, 2016, we became aware that data stolen from LinkedIn in 2012 was being made available online. This was not a new security breach or hack. We took immediate steps to invalidate the passwords of all LinkedIn accounts that we believed might be at risk. These were accounts created prior to the 2012 breach that had not reset their passwords since that breach.”

It says member email addresses, passwords, and LinkedIn member IDs from 2012 were involved.

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