Daily briefing: Wednesday - Assessing the aftermath

The clean-up job from the recent rioting and looting across the UK has only just begun, but this is one event that insurers won’t be able to sweep under the carpet. In the aftermath of the destruction caused by gangs of youths, insurers are now firmly in the spotlight.

The national media is reporting figures of between £100m and £200m losses for the insurance industry, and it is taking a keen interest in the 1886 Riot Damages Act, which allows insurance companies, individuals and businesses to reclaim their losses from local police authorities.

But the insurance industry is also making its voice heard and is so far fairing pretty well. For example, Biba’s head of corporate affairs Graeme Trudgill today spoke on the BBC about the many implications for customers affected by the riots.

Who pays?

It is still unclear whether the situation will be officially declared as a riot. We reported today loss adjuster Crawfords' view that it is unlikely that police will do this. In this instance, insurers will not be able to claim back property losses from the government, which has so far steered clear from using the term. However, the opposition leader Ed Miliband has called for the government to work with insurers to fast-track claims to victims of the widespread destruction.

If insurers do end up picking up a large chunk of the bill, it might not hit their balance sheets as severely as some fear. Fitch said today that insurers’ financial strength ratings would be unaffected, with losses absorbed into earnings. If the chaos continues, however, this could change. But, as many have already noted, insurance exists to pick up the pieces, and it’s time to start showing its worth.

MORE TH>N lures Connor

RSA-owned insurer MORE TH>N made a big appointment today. It has hired RIAS boss Janet Connor as its new managing director, and she comes with a great pedigree of leading a personal lines business.

Connor helped over-50s broker RIAS achieve a 4% rise in post-tax profit to £18.4m in 2010, as revenue increased 4.6% to £84.3m. Other recent developments led by Connor include launching RIAS’s motor product on aggregator Go Compare and taking over the reins at Castle Cover, the broker acquired by Ageas for £53m in March.

The timing of Connor's appointment comes as RSA’s personal lines business reported a strong performance in its recent results, offsetting losses in commercial lines. Personal lines underwriting almost doubled to £27m, which RSA attributed to its household book. Compare this to the commercial business, which made a loss of £19m. The chance to lead the MORE TH>N brand will have proved too good an opportunity to resist for Connor.