UK food and drink market update 2016A review of insurance market conditions for buyers and risk managers

Aon Risk SolutionsNational | Food and Drink Practice

Risk. Reinsurance. Human Resources.

Table of Contents

Introduction – Guy Malyon, Head of ARS UK Broking, London . . . . . . . 3

Your property and premises – An improving picture . . . . . . . . . . . . . . . 5

Your employees and the public – Room for manoeuvre . . . . . . . . . . . . 7

Your vehicles – The end of whiplash? . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Protecting your cash flow – Credit where it’s due . . . . . . . . . . . . . . . . . 9

Product liability and crisis management – Avoiding drama . . . . . . . . . 11

Cyber liability – Message getting through? . . . . . . . . . . . . . . . . . . . . . . 12

The outlook for claims – Slow pace of reform . . . . . . . . . . . . . . . . . . . . 13

Aon Risk Solutions 3

Introduction – Guy Malyon, Head of ARS UK Broking, London

For a company like Aon, sectors like food and drink manufacturing are our life blood. The industry employs over 400,000 people in the UK, accounts for more than £80bn in annual turnover and we are proud to work with many of the sector’s leading companies in the UK and across the world.

As managers of risk and insurance, you will know

the challenges facing your business; food price

deflation, the national living wage, regulatory

oversight, pressure for betterment and above all,

competition for market share.

But how do these factors translate into a risk

profile and what effect can they have so that

insurers want to underwrite them at a good

price, or lower, than last time around?

Like any responsible supplier, we know that

the answer to delivering a good service is to

ensure our customers are fully furnished with the

facts that may influence their buying decisions.

This report provides the context so that food

and drink organisations can understand how

those factors are influencing the price of their

risk in 2016.

Competition, everywhereJust as your industry faces tough competition,

so it is the case for insurers. Rates for the key

business lines of property and casualty (55.5%

of total food and drink industry insurance

spend2) have typically been falling and the

picture is broadly positive for buyers with many

manufacturers expecting stable prices in 2016

after a year in which renewals frequently

achieved discounts (see tables overleaf).

Insurers themselves are looking towards economies

of scale and 2015 was a year in which mergers

almost took centre stage. A surplus of capital in

the insurance market drove the likes of XL and

Catlin together, while Ace surprised many with its

takeover of Chubb. Interestingly, the latter brand

has now been adopted globally by the group.

The most significant deal for food manufacturers

in the UK had it happened, would have been

the acquisition of RSA by Zurich Insurance.

The potential £5.4bn transaction would have

influenced the programmes of many buyers in

the UK and refreshed memories of the M&A

fever which saw names like General Accident and

Commercial Union become CGU before quickly

being swallowed up by Norwich Union (now

Aviva). Many of the same economic indicators exist

today as they did when UK insurers consolidated in

the late 1990s and early 2000s. With today’s players

struggling to push through the kinds of prices they

might prefer to charge, it seems inevitable that

partnerships will once again seem favourable.

New options availableWhile price reductions are available, there is more

opportunity in 2016 to enhance cover and add

new products to a programme. Aon has been

seeing an increase in enquiries for its weather

products which are becoming more competitively

priced for companies at the larger end of the

scale. Businesses continue to suffer seasonal losses

and these products which pay out based on a

pre-defined ‘tolerance’ to climatic conditions are

making increasing amounts of sense to buyers and

finance directors alike.

Also at the larger end of manufacturing where

captive programmes are more common, Aon has

been instructed on an increasing number of loss

portfolio transfers (LPTs). This trend is a result of

the appetite within traditional insurance markets

to win new business; LPTs eliminate the need for

the captive owner to post collateral to cover its

risk and deliver a level of certainty (i.e. no need

to prop up prior year reserves) which is otherwise

not possible.

1 Source: Food and Drink Federation

2 Source: Aon GRIP 2014

4 UK food and drink market update 2016

Risks on the horizonHardly a ‘new risk’ but changes in the climate

affect the food industry more acutely than

most. Therefore we chose ‘El Nino’ as our number

one risk for the sector, not least because of its

potential to impact commodity prices and spread

risk and uncertainty right across the supply chain.

Aon’s 2013 report Commodity Price Volatility, the

Role of Risk Management, highlighted how many

food manufacturers are lacking the sort of cohesive

risk management systems which can help them

manage uncertainty. In the absence of such

a programme which integrates every aspect of

their operations, some companies may struggle

to maintain profitability, service and compliance

if prices become unpredictable.

Our second key risk for 2016 is much closer to

home. The new Insurance Act comes into force

in August 2016 and aims to rebalance fairness for

both parties of an insurance contract. Aon has

already taken steps to ensure that our clients have

the requisite knowledge about how the law is

changing and we will continue to work with you

in this regard.

Guy Malyon Head of ARS UK Broking, London guy.malyon@aon.co.uk

The Insurance Act – what does it mean for you?

The Act will impose a range of new duties on us as brokers, on insurers

and also on you as buyers of insurance.

The most significant of these will require you to meet a new duty to

make a fair presentation of the risk. While the definition of ‘material

information’ has not changed, the new disclosure duty is more

prescriptive than the current law in describing from whom such

knowledge needs to be obtained and the manner of disclosure.

For example the Act states that what ”the insured knows” is deemed to

include knowledge held by the insured’s senior management (i.e. those

who make decisions about managing and organising the insured’s

activities) and individuals with responsibility for the insured’s insurance.

The definition of “senior management” is intentionally flexible so that

is suits companies of all shapes and sizes. Of course the more complex

your company structure e.g. company control is vested in several

operating divisions, the more individuals you will need to consult for

risk information.

Additionally you will be required to disclose material information

that your senior management and individuals with responsibility for

your insurance “ought to know”. This means that they will need to

carry out a reasonable search of not just information held by ‘the

insured’ but also by ‘any other person’. This includes agents and

persons covered by the insurance (e.g. a director or officer), but is

open to interpretation and may go far wider than this e.g. to include

consultants or service providers.

Finally you need to avoid data dumping i.e. providing large volumes

of information without sufficient structure. All disclosures need

to be accessible and clearly presented, structured, indexed and

sign-posted. We will of course continue to work with you in order

to achieve this.

4.0%

2.0%

0.0%

-2.0%

-4.0%

-6.0%

-8.0%Q3 ‘14

-2.7%

1.3% 1.3%

2.5%

-0.1%

-6.8%

Q4 ‘14 Q1 ‘15 Q2 ‘15 Q3 ‘15 Q4 ‘15[Forecast]

Food System, Agribusiness and Beverage – All Products Percentage Change in Rates at Renewal

FY2014 - GBR Food, Agribusiness & Beverage Premium by Product

34.5%

18.4%15.3%

8.5%

7.0%

5.9%

3.4%6.8%

n Property

n Health & Benefits

n Employers

Liability/Workers

Compensation

n Automobile

n Casualty/Liability

n Marine

n Crisis Management

n Other

Aon Risk Solutions 5

Your property and premises– An improving picture

Property accounted for 34.5%3 of the food and drink sector’s overall premium spend in 2014, dwarfing its budget for employers’ liability (15.3%) and healthcare and benefits (18.4%). According to Aon GRIP data, rates for property insurance for the United Kingdom were flat in Q3 2014 (-0.18%) and softened slightly in the same quarter 2015 (-0.59%), reflecting a continued pattern of softening which has pervaded the market in both property and casualty lines for more than a decade.

In the food manufacturing sector specifically,

well managed risks frequently achieve discounts

in excess of 15% and the industry’s focus on

safety and resilience in recent years appears

to be bearing fruit in the form of fewer large

losses and a more manageable risk profile.

If consolidation continues in the insurance

market, this could impact buyers in a variety

of ways. For property risks, the picture may be

influenced by insurers willing to take larger slices

of major accounts and risk managers therefore

seeing fewer layers on large programmes.

From a buyers’ point of view this may be

beneficial in helping to smooth claims handling

in the event of loss, but competitiveness

could be impacted if a merger on the scale of

Zurich/RSA emerges once again in 2016.

Food manufacturing remains a hazardous

sector and while insurers have experienced

a series of fairly benign years in relation to

property claims, their demand for transparency

over the use of composite insulating panels

remains an important factor for companies

wishing to achieve those discounts.

In need of an upgrade?Properties, plant and equipment in the sector

have in many cases been earmarked for

improvement, with research published in

mid-2015 indicating a 3-5% increase in investment

in construction and automation4. This focus on

generating higher output at reduced cost is a

theme likely to continue across the sector and

is broadly welcomed by the insurance market.

Flooding also returned to the headlines in late

2015 after two benign years. Businesses with

flood-prone premises may not receive access

to the same affordable insurance homeowners

have access to under the new insurance industry

scheme, Flood Re5, which when launched

will provide homeowners with better access

to affordable insurance. Those in particularly

threatened locations could expect further

loading of their premiums.

A risk management success storyElectrical fires and arson have also been a

persistent issue throughout 2015 with industry

trade media frequently reporting on blazes

at factories across the UK. However, the

importance of robust business continuity

planning was perfectly illustrated by one

reported incident when David Berryman, a

provider of processed fruit juices, was able to

supply customers just two days after its factory

burned to the ground6. The company highlighted

its flexible supply chain which ensured that

a collection of contract manufacturers were

able to step in and replicate its production.

Improving the attractiveness of your risk• Plan and regularly test your business continuity

procedures and be in a position to present them

to insurers

3 Source: Aon Grip

4 Source: Construction activity in the Food & Drink Manufacturing & Processing Industry Market Report - UK 2015–2019 Analysis

5 Source: Association of British Insurers, The Future of Flood Insurance, what happens next?

6 Source: Food Manufacture 5 October 2015

6 UK food and drink market update 2016

• Avoid business continuity planning with

prescriptive methods alone – ‘plan ownership’

should be shared between management and

site managers who understand the local risks

and emergency procedures

• Be aware of your limits in business interruption.

Does your supply chain have flexibility to bring

production back online within normal policy

term limits (12/24 months)?

• Review/remove composite insulated panels in

areas near hazardous processes

• Regular documented electrical maintenance and

thermographic checks for ‘hot spots’

• Ensure spot protection and speciality

extinguishers near hazardous heat processes

• Invest in risk surveys to obtain comprehensive

underwriting data that will enable

insurers to fully appraise your risk

Aon Risk Solutions 7

Your employees and the public– Room for manoeuvre

Casualty and liability underwriters remain eager to write business from the UK food and drink sector. The market has generally improved its approach to health and safety and remains a growing part of the UK economy, creating jobs and driving demand for insurance.

Casualty rates across the UK continued to fall

consistently throughout 2015, with Aon GRIP

data showing public liability rates at renewal

averaging -3.6% in Q3 2014 and -2.3% for the

same quarter in 2015. Each of the five quarters

from the end of 2014 onwards reported falls in

premiums for this class of business. On employers’

liability, the deflation was broadly similar with

EL rates at renewal in Q3 2014 falling 1.3% and

3.1% in Q3 2015.

Food and drink manufacturing businesses

spent 22.3% of their combined premium on

public and employers’ liability programmes

in 2014, making this the second largest part

of their risk transfer budget.

With insurers competing hard for their business,

manufacturers are in a good position to secure

discounts at renewal but they should keep an eye

on key emerging risks around personal injury and

employment practices liability.

Aon’s brokers expect no change in typical

pricing dynamics for buyers in 2016. Those with

particularly well managed risks can achieve

double digit discounts and only those with poor

claims history may find themselves subject to any

premium loading.

Improving the attractiveness of your riskOrganisations who invest in liability risk surveys

have been able to approach the insurance

market with a much greater degree of certainty

about their programme over recent years.

These surveys are provided by independent

companies who will review an organisation’s

profile and feed that information back to brokers

and insurers. On-site information about exposure

to potential losses from premises, products, and

completed operations can be extremely influential

to the end result of a programme review,

particularly for insurers looking to understand the

supply chain process in industries such as food

manufacturing ascertain the chain of responsibility.

Consider these points of action to increase insurer appetite• Conduct noise studies and consider

installing acoustic panels, damping materials,

silencers and other reduction remedies

• Implement rehabilitation and occupational

health programmes

• Claims analysis to identify areas of

attritional loss

• Day one absence management for all

injury types

• Invest in liability risk surveys

8 UK food and drink market update 2016

Your vehicles– The end of whiplash?

The fleet motor insurance market has been hardening for two to three years before levelling off in 2015. The withdrawal of significant reinsurance capacity in January 2013 forced up prices in this attritional risk category, where today many insurers are looking to combine and package casualty, property and motor in order to blend and smooth out their loss ratios.

According to GRIP data, rates for automobile

for the United Kingdom were flat in Q3 2014

(-0.17%) and hardened slightly in Q3 2015

(+0.93%). Aon’s role has increasingly been to

collaborate with food manufacturers across all

lines of business and those who analyse and react

to the data emerging from their claims experience

can expect flat rates or even reductions into 2016.

The picture for fleets with poorer risk management

is understandably more challenging with an

expected price range of +2.5%-15% at renewal

in 2016.

Autumn statement – good news for fleet ownersPerhaps the most significant piece of news to

emerge since the civil justice reforms, was in the

Chancellor’s Autumn Statement in November

2015, in which George Osborne announced plans

to increase the small claims limit to £5000 and

to withdraw the right to financial compensation

for soft tissue injuries such as whiplash.

This was a potentially game-changing

announcement illustrated by one of the

UK’s largest claimant law firms, Slater &

Gordon, seeing its share price crash 50%

when markets opened the next day7.

Essentially, the government is hoping to

create a system which provides claimants with

‘soft tissue injuries’ recourse in the form of

rehabilitation rather than monetary compensation.

If successfully implemented, this should have

the effect of removing the financial incentive for

speculative and also fraudulent whiplash claims.

If the Government’s proposals have the desired

impact, fleets which are often targeted by crash

for cash fraudsters may be less threatened.

The corollary is of course that fleet managers

themselves will have to ensure that vocational

rehabilitation becomes an essential part of their

own return to work programmes for drivers

directly employed who suffer injuries at the wheel.

Road safety improvementsWith the UK’s roads frequently congested,

continuing safety improvement should be

of great relief to fleet owners. Those which

regularly drive in London will have the added

complication of sharing the roads with more

than 300,000 cyclists8 and news that a scheme

to segregate them from vehicles with the

construction of new cycle paths as part of a

£913m investment should be warmly received.

Improve the attractiveness of your riskAon is able to support customers operating

fleets in the food and drink manufacturing

sector with its Fleet Complete solution which

is designed to provide complete visibility of

their exposures. However, all fleets should at

least observe the following advice to ensure

their profile meets the typical benchmarks.

• Conduct online licence checks for

agency drivers

• Consider telematics, GPS and vehicle

tracking systems

• Reduce time incentivised deliveries

• Be aware of staged accident gangs

targeting liveried vehicles

7 Source: City A.M. 26 November 2015 – Quindell buyer Slater & Gordon share price halves after George Osborne reveals plans to

overhaul personal injury law

8 Source: BBC News 4th June 2015 – Number of cyclists in London reaches record high

Aon Risk Solutions 9

Protecting your cash flow– Credit where it’s due

Few insurance markets suffered more profoundly during the financial crisis than credit insurance, but the sector has re-emerged as a competitive force with a broadly positive approach to the food and drink sector.

Risk managers can expect plenty of capacity

available and a large number of markets willing

to provide quotes with competitive terms.

One element of the financial crash for which

manufacturers can be thankful is the impact it had

on underwriters’ themselves. Historically high

levels of insolvency around 2009–2010 forced the

market to improve its own capability to identify

problems to the extent that now in 2015, they are

alert to the potential changes which can occur

throughout the supply chain.

Buyers with a higher risk profile will always be

monitored very closely and this element of the

market has proven itself a major benefit of trade

credit insurance. The industry now has the most

up to date information available in the market,

with highly sophisticated real-time risk intelligence

at its fingertips; far beyond the information filed

at Companies House. Credit insurers today are

reviewing current management information which

shows up to date trading performance meaning

they will be alerted very early on if there is a

deteriorating margin or a weaker balance sheet.

New entrants in 2015For many years credit insurance has been

characterised by a trio of market leaders who

remain in a relatively dominant position.

Euler Hermes and Atradius account for

upwards of 55% of the UK credit insurance

market, while Coface also takes up a

considerable volume of available premium.

There has been one significant change in 2015

in that HCC has been acquired by Tokio Marine,

giving HCC a global footprint and a partner with

no overlap in its own product portfolio.

This could create a real opportunity for trade

credit should that insurer choose to promote

this line of business. This could benefit

buyers with the promise of new products

from a well-capitalised competitor.

In addition, HCC may be able to apply

more pressure on the dominant players,

with buyers potentially able to receive

more competitive credit limits.

New risk factorsIt is no surprise to say that food and drink

manufacturers are under considerable margin

pressure and this dynamic will be at the front

of mind for credit insurers looking at the

industry as a whole. The twin pillars of food

price deflation and the pending wage inflation

(April 2016’s new living wage of £7.60) mean

that the sector has a considerable challenge to

remain profitable. Meanwhile insolvencies have

remained a problem within the manufacturing

sector itself. One market observer reported

a 54% rise9 in the 12 months to Q2 2015 in

companies experiencing financial distress, with

supermarket pressure blamed for the squeeze.

On the positive side, there have been some signs

that manufacturers have the ball in their court.

The Government’s creation of the Groceries

Code Adjudicator in 2013 may finally be

creating an environment in which relationships

between major supermarkets and their supply

chains can work to their mutual benefit.

Versatile coverageMatters beyond the UK have also challenged

the sector but can help to emphasise the

value of trade credit for the number of

potential risks that it will insure against.

9 Source: Begbies Traynor’s Red Flag Alert Report Q2 2015

10 UK food and drink market update 2016

Broadly speaking trade credit insurance is

used for non-payment due to insolvency

or protracted default but it also covers

political risks, natural disaster, terrorism

and a range of other unique scenarios.

UK exporters of food and drink saw a -5.3% fall

in the value of exports during the first half of

201510 with insolvencies across the European

Union responsible for a considerable slice of this

fall. However there have also been politically

charged issues facing exporters such as the recent

sanctions regime introduced by Russia banning

exports from the EU and other global regions.

Housekeeping tipsMost companies in the food manufacturing

sector recognise the importance of trade credit

insurance today. It serves a dual purpose of

providing robust risk mitigation and support in

obtaining finance from lenders. Having emerged

from the worst of the financial crash, both buyers

and underwriters acknowledge how crucial

it is that companies maintain an open line of

communication with insurers so that they are

alerted to issues around buyers very quickly.

In addition, there are a number of steps

that companies can take to make their

risk more appealing to insurers;

• Identify gaps in credit risk management

• Build/deploy systems to assess the security

of debts

• Demonstrate improvements in time spent

on debt recovery

• Link up back office accounting and financial

processes with sales to better manage the

deal-to-payment cycle

• Purge high risk customers where possible

10 Food and Drink Federation - Exports Snapshot January–June 2015

Aon Risk Solutions 11

Product liability and crisis management– Avoiding drama

A downward push on pricing has encouraged insurers to innovate, with crisis management consulting a helpful option for organisations.

Market dynamics shifted again in 2014 toward

increased competition and new entrants at Lloyd’s

at the beginning of 2015, while global insurers

also eyed product recall as a profitable business

line leading to flat and in many cases, a downward

pressure on prices.

Where turnovers are increasing, market appetite

is strong for the best accounts, while decreased

rates of up to 10-20% are being seen on renewals

for the most attractive businesses.

Policy wordings vary widely and clients have to

be aware of the advantages and disadvantages

of moving from one carrier to another,

however terms and conditions have remained

quite stable across Aon’s UK food and drink

portfolio. This has presented an opportunity

for Aon to push for enhancements to market

wordings which have included adding sub limits

for claims preparation expenses utilising Aon’s

complex claims teams and higher sub limits on

rehabilitation expenses.

Crisis consultancyCover for malicious tamper and contamination

remains an important part of many companies’

programmes. In addition to providing for the

direct recall and business interruption costs they

also put in place a range of support services to

aid in crisis management when an incident occurs

and can mitigate against the risks of supply chain

vulnerability, which have picked up so many

headlines recently. Crisis consultancy is becoming

a key aspect of the product recall armoury and

with a 5% standard bursary (of net premium)

available for clients to spend with their insurer’s

crisis consultant, clients can take some comfort

by having that expertise available to assist them

in the review of their supply chain management,

business continuity and recall management plans.

The Elliott ReviewThe Elliott Review into the integrity and assurance

of food supply networks is now just over a year old

and despite its recommendations, there appears

to be little sign that the UK government will invest

in any independent testing facilities.

Managing supply chain is key to avoiding incidents

in the food industry. It is vital to consider where

in a supply chain an organisation needs to

implement checks to assure that its products

haven’t been corrupted; if your supply chain is

transparent, you’ll be much more able to react in

a crisis scenario and any response plans that have

been rehearsed will run that much smoother.

Shareholders will demand assurances that a crisis

is dealt with and the expectation will inevitably be

that production is largely uninterrupted.

12 UK food and drink market update 2016

11 US Department of Homeland Security – ICS-CERT Year in Review 2014 – US-Cert

Cyber liability– Message getting through?

Despite suggestions to the contrary, the take up of specific cyber liability insurance remains fairly cool across most industries, with food manufacturing no exception. Underwriters still have little to go on in terms of claims history and many are more concerned about how their existing property and casualty contracts may unintentionally pick up claims should a major cyber-attack occur against, say, the financial services industry.

Aon’s advice to manufacturers is to consider their

own exposures carefully, particularly given the

potential for cyber-attacks against assets such

as Industrial Control Systems (ICS), which are of

course running thousands of production lines

across the UK.

ICS systems at large scale operations like power

stations have been very publicly undermined

by viruses such as Stuxnet and more recently

‘Energetic Bear’ and the Russian malware,

Black Energy. There is relatively little in the public

domain about the threat to UK food and drink

industries’ integrity, although in 2014 2.1% of

attempts at web facing ICS/SCADA (supervisory

control and data acquisition systems) were in the

Food and Agriculture sector11.

Potential scenarios from a continuity, third party

and 1st party property perspective exist if an ICS

is ‘taken over’ in a cyber-attack. The systems that

control manufacturing are typically older, less

secure and could have been purchased through

long term service contracts with software vendors

so they may not be patched or updated very

often. Adding to their vulnerability is the fact that

they are more and more connected as we seek to

monitor and control their operations or review

performance for management intelligence.

Food and drink companies are also being

advised about the potential intellectual property

exposures created by cyber threats to ICS systems.

A manufacturer’s recipe is very often their

most valuable asset and with the controlling of

ingredients in manufacturing typically managed

by ICS systems there is also a chance that formulae

may be targeted by counterfeiters.

Aon Risk Solutions 13

12 Source: Health and safety in manufacturing in Great Britain, 2014/15

13 Source: HSE – Sound solutions for the food and drink industries – reducing noise in food and drink manufacturing

14 Source: Aviva PLC – Call for clampdown on spurious industrial disease claims

15 Source: Claims Portal Executive Dashboard

The outlook for claims– Slow pace of reform

Workplace injury claim statistics published by the Health and Safety Executive show that food and drink continues to be a significant contributor to the overall picture on accidents and illnesses at work. Between 2011 and 2015, 17% of the 80,000 self-reported cases of work related ill health were from employees in food and drink manufacturing12. However, the industry’s safety record should be applauded given the fact that its illness numbers are not statistically significantly different to any others in the UK.

Insurers have expressed great concern over the

prevalence of particular injury claims such as noise

induced hearing loss (NIHL), which the HSE has

published some recent updated guidance13 on

to help employers protect its staff. From a safety

perspective, Aon is advising all of its customers to

observe their own noise levels on site to ensure

they deliver the correct protection when legally

required to do so. Conversely, insurers are keen to

remind employers that NIHL claims are frequently

investigated and found to be spurious, with Aviva

in particular reporting that as many 85% have no

basis in fact14.

The influence of civil justice reformThe legal landscape has shifted considerably in

recent years. First the Legal Aid, Sentencing and

Punishment of Offenders Act became law in 2013,

followed shortly afterward by the Enterprise

and Regulatory Reform Act 2013; both of which

promised to support employers by reducing the

costs of litigation and increasing the burden of

proof on claimants.

The introduction of fixed legal fees for employers’

liability claims valued up to £25,000 has yet

to influence claims volumes. Indeed, the

opposite seems to be true in relation to claims

notified via the Claims Portal. In the year to

July 31 2014 there were just over 33,000 Claims

Notification Forms issued, a figure which rose to

54,634 in the year to July 31 201515.

Improving your claims defensibilityIt remains to be seen what impact these twin

reforms could have on the cost of claims for

employers, but companies that engage Aon will

be able to put their best foot forward. There are

a number of trends which risk managers should

be aware of;

• Claimant lawyers seeking easy wins and hoping

to benefit from defendants with a less than ideal

accident reporting and investigation processes

• Be aware that ‘Special Damage’ claims are

being made to boost the level of damages

recovered by the claimant. Early intervention

into accidents to identify what has happened

and how serious an injured party actually is,

is essential

• Claims for rehabilitation and psychiatric referrals

are increasing, not always with justification.

Good claims defensibility requires consideration

of rehabilitation by the employer and potential

defendant early on, as opposed to waiting for a

claimant lawyer to do it at their cost

• While costs are decreasing in the new world

(post MOJ/LASPO), costs on old world claims

are increasing as firms look to maximise

their recovery

14 UK food and drink market update 2016

• The move away from the recoverability of

success fees and ATE premiums from defendants

has seen claimant solicitors seeking higher

damages to try to help their clients mitigate

the impact of their success fees which are now

being paid out of the claimant’s damages

• There has been an increase in requests for

pre-med offers to the insurance industry.

Caution when considering pre-med offers as

there is a propensity for the claim to be bogus

or inflated due to the speed of settlement

• Keep production area floors free from

contamination at all times

• Use appropriate footwear at all times

• Ensure a clearly identified, documented and

enforced cleaning regime is in place

• To assist with claims defensibility some

clients are embracing tablet and smartphone

technology to capture incident details quickly

and efficiently

• For multi-site businesses it is useful to identify

the sites with the highest number of claims per

100,000 hours worked to allow focus on an in

depth claims and accident analysis accompanied

by a site visit and management system review

About Aon Aon plc (NYSE:AON) is a leading global provider of risk management, insurance brokerage and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 72,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative risk and people solutions. For further information on our capabilities and to learn how we empower results for clients, please visit: http://aon.mediaroom.com/

Aon specialises in providing risk management and insurance solutions to the food and drink sector. Our experts will work with your business to assess your total cost of risk and develop solutions that fit your distinct industry needs.

© Aon plc 2016. All rights reserved.The information contained herein and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information and use sources we consider reliable, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Aon UK Limited is authorised and regulated by the Financial Conduct Authority. Aon UK Limited Registered Office: The Aon Centre, The Leadenhall Building, 122 Leadenhall Street, London, EC3V 4AN. Registered No. 210725. VAT Registration No. 480 8401 48. Some links on this website may redirect you to third party sites. Aon is not responsible for this content. Telephone calls are recorded and may be monitored.

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Risk. Reinsurance. Human Resources.

For more informationNicola Collins| Senior Marketing Executive

Aon Risk Solutions | National e nicola.collins@aon.co.uk