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Barbara karouski

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Greece : health service cuts approved by parliament

International

Mar 1, 2012

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The Greek parliament early Thursday approved a bill to cut health service costs that had been demanded by the European Union and the IMF to unblock a new aid plan for the debt-stricken country.

The text was adopted by a large majority, deputy speaker Grigoris Niotis said, on the eve of an EU summit that should pave the way for fresh loans to Greece.

The move came after Greek unions on Wednesday staged walkouts as part of Europe-wide demonstrations against austerity measures. The bill, passed under an emergency procedure, lays down a cut in pharmaceutical expenses through the development of computerised prescriptions and the use of generic medicines.

It also limits the public health budget via mergers of hospital groups and calls for the setting up of a unified pension scheme consolidating numerous groups whose current total deficit is put at 850 million euros for 2011.

The EU and International Monetary Fund made the passing of this text and other measures a condition for releasing a new bailout of 130 billion euros ($175 billion).

The latest rescue, after a 110-billion-euro EU-IMF loan in 2010, is tied to a massive debt writedown with private creditors designed to reduce Greece’s 350-billion-euro debt by 107 billion.

Athens, March 1, 2012 (AFP)

ARAG : re-launches online legal insurance quote engine as QuickQuote

Market

Feb 29, 2012

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Re-launched today as QuickQuote, ARAG’s online quotation system for commercial legal expenses insurance has received some major upgrades.

Designed to make it easier and more flexible for brokers to use, QuickQuote features a range of improvements, including:

– Fastest quote facility in our market – quotes in just 1 minute

– A simple application form with keyword definitions and guidance throughout

– Instant documentation where quotes and hold-cover notes can be printed from the website or emailed direct to a broker’s email for convenience

– New search facility for existing quotes making them easy to find, amend and resubmit

– Brokers can decide on their own commission rate, 0-25%

– Brokers client’s will benefit from no claims discounts and different levels of indemnity

– Training materials are available to guide brokers through the process

In 2010, ARAG was voted “Best legal expenses provider” and they were commended for their online quotation system which was described as “quick and efficient”. However, not one to rest on their laurels, they felt further improvements could be made which led to the re-launch of QuickQuote.

Head of Sales, Andy Talbot adds, “In terms of volume we provide more commercial legal insurance policies under scheme arrangements, however, the demand for standalone policies remains high and a significant number still require individual rating. It is with this in mind that ARAG further improved the QuickQuote facility now making it even easier for brokers to get quotes for their clients. The fact that we now can pay up to 25% commission puts us ahead of the market in terms of broker remuneration.”

Guest Post : Social Media – Risk or Reward?

Market

Feb 27, 2012

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The world of travel is already awash with companies using social media to interact with their customers, promoting themselves as caring, sharing partners to their holiday experience. As such, it seems a logical step for travel insurance companies to follow…

The inevitable ‘but’ is the risk of interacting within a live and often emotional environment when your customer is having a problem, often during the most anticipated (and most expensive in most cases) two weeks of their year. As such, many travel insurance companies have yet to dive into the deep end. In addition, the costs of managing social media effectively, maintaining a regular feed of information and response, are maybe not best suited for a low-priced insurance product.

There is a reluctance to trust insurance companies and our product is not an impulse or aspirational purchase. We should try to come across as transparent as possible and understand that the way we deal with complaints and negative press can promote our business above the grey mist of suspicion. If we are fearful of being held publically to account, maybe now is a good time to ask what we are scared of, to correct it and then be proud enough to openly talk about it to our customers?

Social media should not be the driver to optimise our service and claims management processes – they should already be close already. There may be changes to culture required to move to a real-time environment but nothing that our industry has not managed in the past. However, if we get it right and a sceptical customer gets an experience they don’t expect, social media is the perfect forum for customers to promote us for free and share the good news with thousands of others. As with anything, how you deal with a customer is what defines their impression of your brand and, ultimately, their loyalty.

At Columbus, we have taken the first steps with our own blog, Facebook page and even a Twitter account, using them to share news of events overseas, advice from the FCO and even video destination guides. We believe that we need to experience this aspect of customer communication as early as possible to ensure that, as it inevitably grows in popularity, we will have already learned lessons to minimise any negative impact. It’s early days but we believe social media is a risk that we can develop into a reward.

Writen by Greg Lawson, Head of Retail at Columbus Direct

Appointment : David Bruce is CCV’s new Operating Director

Social

Feb 24, 2012

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CCV has appointed David Bruce as new Operating Director effective in April.

David has extensive experience of distribution and operational management having run Norwich Union’s National Broker and National Accounts Division, RAC Direct Insurance and Aviva’s Corporate Partnerships Division. David also has a strong background in governance and controls having been UK Chief Auditor for RSA Insurance. He joins from CPP where he has been focused on international development as the Group Expansion and Development Director.

Peter Cullum, CCV’s Executive Chairman, comments: “2011 was another busy year of acquisitions for CCV, with eight deals being completed. Crucially, we have also worked hard to support our existing family of brokers as they strive to achieve their ambitious growth objectives. We have a healthy pipeline of acquisitions in play in 2012 so hiring talented people to help take our business forward is essential and David brings a wealth of experience from his previous roles. I am delighted to welcome him to the CCV management team and indeed into Towergate as we continue to work closely together in our shared ambition to grow our distribution reach in the UK.”

Commenting on his new role at CCV, David Bruce says: “CCV is one of the most dynamic businesses in the UK insurance market today. It truly believes in enabling the firms that it acquires to achieve their potential and provides them support at all levels to ensure they do. I find the drive and passion of CCV people highly energising and can’t wait to be a part of it.”

AIA : announces business results for 2011

Financial News

Feb 24, 2012

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AIA Group Limited announces record new business results for the year ended 30 November 2011. The highlights are:

– 40 per cent increase in Value of New Business (VONB) to US$932 million

VONB is the Group’s key performance measure, representing the shareholder value created from new business written during 2011

– 4.6 pps improvement in VONB margin to 37.2 per cent

– 22 per cent increase in Annualised New Premium (ANP) to US$2,472 million

– Embedded Value (EV) of US$27,239 million, up by US$2,491 million from US$24,748 million as at 30 November 2010

– 13 per cent increase in Operating Profit After Tax (OPAT) to US$1,922 million

– 311 per cent solvency ratio on the Hong Kong Insurance Companies Ordinance (HKICO) basis, reflecting AIA’s very strong capital position

– Final dividend of 22 Hong Kong cents per share recommended, bringing the total dividend in respect of the 2011 financial year to 33 Hong Kong cents per share

Commenting on the record performance, Mark Tucker, AIA’s Group Chief Executive and President, said: “We are proud to have delivered an excellent set of results for our shareholders in 2011. This reflects the combined impact of our powerful distribution platform across Asia Pacific, our financial and technical strength and the consistency with which we are implementing our clear strategy of targeting sustained growth in shareholder value. We have continued to deliver strong growth in our key performance measures. These results demonstrate that the momentum in value creation which we generated in 2010 has been sustained throughout 2011.”

“During 2011 we concentrated our efforts on building our Premier Agency sales force and boosting agency productivity to help meet the savings and protection needs of our customers across Asia Pacific, with a particular focus on promoting the take-up of accident and health cover. We have also taken steps to make further improvements in the persistency and additional sales achieved from our in-force book and to enhance our customer service experience. Outside the agency channel, we have focused on developing deeper and more profitable relationships with our distribution partners. We are confident that we have created a powerful base from which to deliver increasing future value for our shareholders.”

The Board recommends a final dividend of 22 Hong Kong cents per share. This brings the total dividend in respect of the 2011 financial year to 33 Hong Kong cents per share, in line with the guidance given at the 2011 interim results announcement.

Mr Tucker further commented: “This year’s level of dividend payment reflects our strong cash flow position and our commitment to reflect the value achieved for shareholders through dividend returns as well as capital growth. It remains the Board’s intention to self-finance our new business growth whilst maintaining a prudent and progressive dividend policy.”

Total shareholders’ equity increased by 9 per cent in 2011 to US$21,313 million. Net profit of US$1,600 million includes the mark-to-market valuation of equity investments as required under the International Financial Reporting Standards. US$500 million of investment gains on bonds, which are not included in net profit, are included in shareholders’ equity.

Mr Tucker concluded: “AIA remains a very attractive growth story with an unmatched opportunity to benefit from strong economic growth, favourable demographic trends and latent demand for both savings and protection products in Asia. This remains the world’s most dynamic region, which has been our home for over ninety years and is our sole area of operation. Our focus on Asia Pacific markets in which we have a leading position and depth of experience, combined with our financial strength and a highly motivated team, put us in a very strong position to optimise opportunities for further growth and generate strong and sustainable returns for our shareholders.”

RBS : announces annual net loss of almost £2 billion

Financial News

Feb 24, 2012

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State-rescued Royal Bank of Scotland on Thursday said its net losses widened to almost £2.0 billion in 2011, hit by the Greek debt crisis and compensation linked to insurance mis-selling.

RBS, 82-percent owned by the British government after a massive bailout in the wake of the financial crisis, unveiled losses after tax of £1.99 billion (2.35 billion euros, $3.12 billion) for 2011, up from £1.12 billion in 2010.

Pre-tax losses surged 92 percent, while profits at the bank’s investment division tumbled 54 per cent, RBS added in an official earnings statement.

“After the effect of several large one-off items such as … compensation costs, Greek sovereign debt impairments, and integration and restructuring costs, the group reported a pre-tax loss of £766 million,” the bank said. RBS took a £1.1 billion hit on the value of its Greek government bonds.

The lender has also been hit by having to pay compensation totalling hundreds of millions of pounds to customers who were mis-sold insurance policies by the bank.

Chief executive Stephen Hester said: “Our job is to diffuse the biggest-ever time bomb in banking balance sheets.”

The bank paid staff a total bonus pot of £785 million, down 43 per cent compared with 2010.

This included £390 million for its 17,000 investment banking staff, down 58 per cent. Ahead of the results, Hester bowed to public anger and waived his annual bonus of shares worth £963,000 on top of his £1.2 million salary. The large bonus, coming amid on-going government austerity and economic gloom, had sparked outrage among trade unions and opposition politicians because RBS has been almost fully nationalised following its rescue.

In January meanwhile, the former chief executive of the Royal Bank of Scotland, Fred Goodwin, had his knighthood stripped by Queen Elizabeth II over his role in the bank’s near-collapse in 2008.

British finance minister George Osborne welcomed Thursday’s cut in the bonus pool but stressed that in was in the nation’s interest that RBS received the necessary backing to return to health.

“Our main interest should be to get back as much money as possible for taxpayers and we must not let those that want to create an anti-business culture put that at risk,” he added.

Hester meanwhile warned that persistent criticism of RBS harmed its progress.

“No one should be under any illusions. You can’t have your cake and eat it,” he said. “The noise around RBS is very damaging.”

Since 2008, the British state has injected a massive £45.5 billion of state money into RBS, which needed saving from the US housing market crash and a disastrous multi-billion-pound takeover of Dutch rival ABN Amro in 2007.

“The job of rebuilding the group is far from complete,” RBS chairman Philip Hampton said on Thursday.

“The need to address the legacy of losses in a number of businesses means that the group is not yet profitable, although in 2011 our core businesses earned a profit of £6 billion” — a figure that sent the bank’s shares higher.

RBS recently said it would cut 3,500 more jobs over the next three years as the group shrinks its investment banking activities — bringing to 34,000 the number of posts the bank has slashed since late 2008.

On Thursday, the bank added that its core tier one ratio, or buffer against future financial crises, dipped to 10.6 per cent last year, although the level was above the 9.0 per cent mark requested by the EU’s banking regulator. RBS shares rose 3.4 per cent to 28.26 pence in early deals on London’s FTSE 100 index, which was up 0.40 per cent at 5,939.64 points.

London, Feb 23, 2012 (AFP)

Allianz : profits halved by Greece and natural disasters

Financial News

Feb 23, 2012

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German insurance giant Allianz said Thursday natural catastrophes and losses on its investments in Greece slashed its bottom-line in half in 2011.

Allianz said in a statement it had booked net profit of 2.545 billion euros ($3.4 billion) last year, a drop of 49.6 percent from a year earlier. In the fourth quarter alone, net profit fell by 56.6 percent to 492 million euros.

The decline “was mainly due to very conservative writedowns of 1.9 billion euros from Greek sovereign debt and investments, particularly in financials,” Allianz explained. But at an operating level, the insurer insisted that it achieved its targets for 2011, “despite volatile financial markets and an unusually high level of natural catastrophes.” Operating profit fell by 4.6 percent to 7.866 billion euros and revenues were down 2.7 percent at 106.5 billion euros, the statement said.

“2011 was a tough year. But we maintained our stability throughout. That’s an extraordinary achievement,” said chief executive Michael Diekmann. As a result, Allianz said it would pay an unchanged dividend of 4.50 euros per share.

Looking ahead, “we are expecting similar global economic conditions in 2012 with a moderate improvement in the second half of the year,” Diekmann said. “The first steps to stabilise the eurozone have already been implemented successfully. We are confident about our strong business opportunities in 2012,” he said.

Allianz was therefore raising its operating profit outlook to “8.2 billion euros, plus or minus 0.5 billion euros,” the chief executive said. Investors appeared satisfied with the results and Allianz shares were the main gainers on the Frankfurt stock exchange on Thursday, adding 1.04 percent to 90.75 euros.

Frankfurt, Feb 23, 2012 (AFP)

Q360, a new broker launched in partnership with Tawa

Industry News

Feb 23, 2012

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A new London-based broking operation, Q360, was launched today. The new entity will be led by David Merry as CEO, with Tawa providing the capital backing. Q360 Ltd will initially operate within the business sectors of onshore energy, property, binding authorities, professional indemnity and non-recourse finance construction.

The founders of Q360 are David Merry, Graham Kilby and Richard J. Burggraf Jr.

Central to the company’s operational platform is the technology used, using innovative processing software, as well as web-based products giving a uniquely efficient binding authority facility. Tawa’s subsidiary, Pro, has been retained to provide Q360’s post-placement services.

David Merry,CEO of Q360, said:“Q360 has been created by combining the best technology with exceptional broking talent. The wholesale broking sector has a number of systemic issues that many companies are failing to address or do not have the vision or capital to address. Q360 is a totally client-focused business and Tawa is a partner that shares our ambition and vision. Our aim is to innovate and capitalise in the challenging and exciting environment facing our sector. Our trading culture, like our business, is partnership-based and we are seeking to attract the industry’s best talent to expand the sectors in which we operate.”

David Vaughan, COO of Tawa plc said: “At Tawa, we realised that the wholesale broking sector presented an opportunity for a company operating from a high-tech platform, free of legacy issues. This combination gives markets efficient distribution and provides clients with access to broking talent free from external and internal distractions. David and his team have a track record of creating and delivering strategy. Q360 is a company built on a technologically advanced trading platform. Clients and markets will be mutual beneficiaries, which is good for the industry.”

Appointment : Aon Risk Solutions appoints Jane Kielty as area director

Social

Feb 21, 2012

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Aon Risk Solutions, the risk management business of Aon Corporation announces the appointment of Jane Kielty as area director to head the Manchester, Leeds and Sheffield operations of Aon’s Corporate business.

Kielty has a proven track record as the Manchester area director where Aon has achieved six successive years of growth, and will expand her remit to cover the Leeds and Sheffield teams who have delivered another year of strong growth in 2011.

Kielty’s existing knowledge of Aon, her profile in the insurance market combined with her passion for clients make this appointment a strong move for Aon as it combines substantial forces right across its North East and North West operations. Aon’s Manchester, Leeds and Sheffield business employs more than 450 people. Kielty will report to Jim Herbert, CEO of Aon Risk Solutions’ UK retail business.

Commenting on her expanded role, Kielty said: “I’m really looking forward to working across this wider geography, but what excites me the most is the sense of enthusiasm and energy I can already see in the teams about the idea of working even more closely together across the North. We have strong management teams in each location and will continue to build on the success that they have already created.”

Herbert added: “I’m delighted that Jane will now be able to bring her passion for the business to a wider network. The Manchester, Sheffield and Leeds insurance markets are hugely important to Aon and, although we will continue to operate in both markets in exactly the same way as we always have, I know Jane will ensure that we continue to drive the very best deals and provide the highest levels of cover and service for our clients.”

Lloyds Banking Group announces bonus adjustments

Industry News

Feb 21, 2012

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Lloyds Banking Group announced it would claw back some executive bonuses after the state-rescued British lender was forced to pay out billions of pounds (dollars) in compensation over mis-sold insurance.

“The board of Lloyds Banking Group announces that it will make an adjustment to a proportion of the bonus awards in respect of 2010 for a number of its senior employees, including five executive directors,” LBG said in a statement.

In total, LBG was clawing back more than £1.63 million (1.95 million euros, $2.59 million) in share awards, while the bank added that 2011 bonuses have been affected for the same reasons.

It said that former chief executive Eric Daniels would lose 40 percent or £580,000 of his £1.45 million share bonus award, while four other current and former directors would forgo sums of up to £262,500.

A further eight executives, below board level, were to be stripped of five percent of their bonus awards.

LBG, which is 40.2 percent owned by the British government after a huge bailout, made the announcement ahead of its annual results on Friday.

In August, the bank took a hit of £3.2 billion after being forced to compensate clients who were mis-sold payment protection insurance (PPI).

In April 2011, British banks lost a high court appeal against tighter regulation of PPI, which provides insurance for consumers should they fail to meet repayments on a credit product such as loans, mortgages or payment cards. PPI became controversial after it was revealed that numerous consumers had been sold the insurance without understanding that the cost was being added to their loan repayments.

Britain has since banned simultaneous sales of PPI and credit products. LBG said Monday’s announcement reflected the assumed impact of PPI compensation costs on the bank’s earnings in 2010.

“The bonus pool for 2011 will reflect a further reduction in respect of the above mentioned provision, which will affect all individuals eligible to be considered for a discretionary bonus for that year,” it added.

LBG’s move will heap pressure on Royal Bank of Scotland to adopt similar measures. Bailed-out RBS, which is 82-percent owned by the taxpayer, will publish its annual earnings on Thursday.

Current LBG boss Antonio Horta-Osorio, who returned to work in January after a break due to fatigue, has already declined his annual bonus amid ongoing public outrage over excessive banking-sector pay at state-rescued banks.

RBS chief executive Stephen Hester was forced to waive his £963,000 annual bonus under intense political pressure from Prime Minister David Cameron.

LONDON, Feb 20, 2012 (AFP)

RMS : risk analysis of Dutch population longevity for market investors

Industry News

Feb 18, 2012

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Risk Management Solutions (RMS) has announced that it has conducted a mortality risk analysis of the Dutch population to help capital markets investors quantify Dutch longevity risk. This analysis incorporates estimates of lifestyle trend changes, medical advances, and future health care environments specific to the Dutch population. Previous longevity models for the Netherlands have struggled to incorporate future developments in medical science into mortality improvement projections. The RMS analysis uses “cause of improvement” modeling for probabilistic longevity scenario generation.

The Netherlands population presents some specific challenges for modeling future mortality improvement scenarios. It has experienced high mortality improvement rates over the past decade, with up to 4% annual improvement rates across retired ages. The Netherlands has higher smoking rates than other European countries, but slightly fewer deaths from cardiovascular disease. It has lower obesity levels, higher standards of health care, and a marked birth cohort effect around the birth year of 1936, some six years later than the similar cohort effect in United Kingdom.

The need for longevity risk protection results from uncertainty around the future life spans of retired men and women drawing pension benefits. Pension funds, annuity providers, and insurers are increasingly looking to protect themselves from potential funding shortfalls. Longevity risk transfer to the capital markets has proven difficult in the past because of investor reluctance to accept the major uncertainties inherent in longevity risk. Detailed analysis of medical improvement scenarios provided by RMS modeling underpins investor confidence in risk assessments.

In 2010, the increasing levels of mortality improvements seen earlier in the decade were reflected in a major revision of actuarial tables by the Dutch Actuarial Society, which caused a significant increase in liabilities for many pension funds. This results in an increasing demand for longevity protection in the Netherlands.

The RMS approach to longevity risk modeling is more transparent than a statistical model, and is rapidly gaining acceptance within the pension and annuity markets. Traditional approaches involve extrapolation of historical mortality rate volatility out into the future. The RMS model begins with current mortality levels and trends, and then explores scenarios for future trends in the different causes of mortality improvement, incorporating likely timelines for medical developments that are currently in the lab or new drugs at different stages of approval processes.

Risk Management Solutions now has longevity risk models for the United Kingdom, the United States, Canada, the Netherlands, France, and Germany. A growing number of clients are using RMS models to inform their internal model applications and capital management strategies for Solvency II.

“There are very interesting, different local market conditions for the variation in longevity risk from country to country,” said Andrew Coburn, senior vice president of LifeRisks at RMS. “Demographics, social structures, and lifestyle patterns are very different in each country, and the national health care systems result in some very different health outcomes for local populations. These need careful adaptation to model life expectancy projections in each territory.”

“Longevity is one of the most difficult risks to take to market,” said Peter Nakada, managing director of RiskMarkets at RMS. “There is clearly strong demand for longevity de-risking solutions, but there is such a wide spread of opinion and disparity of expectations around the appropriate pricing. We believe that RMS can help facilitate the growth of this market by providing an objective, verifiable benchmark assessment of the risk that has the respect of investors.”

RMS has previously used its longevity models to support de-risking transactions in other territories, including the Kortis bond in 2010 for Swiss Re which protects against mortality divergence in the U.S. and U.K. Other RMS mortality causal models include pandemic, terrorism, and natural catastrophes and have been used to support excess mortality capital markets transactions, including the VITA series of mortality bonds for Swiss Re.

For more information: http://www.db.com/medien/en/content/3862_4047.htm

RDT : new iPhone/iPad application for instant access to real time management information

Market

Feb 17, 2012

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RDT, insurance software specialist, has launched the first in a series of mobile applications. The iphone/ipad application delivers Landscape business managers with real-time management information direct to their mobile device.

In keeping with RDT’s reputation for innovation and thought leadership, this powerful application delivers meaningful data to those that most need it. Landscape customers already have access to extensive MI; this new application means their business information is now available anytime, anywhere.

Mark Bates, RDT’s chief executive says: “There are many ways mobile devices can assist our customers and together we are reviewing the opportunities from a product distribution and claims perspective. As a first step we have developed a sophisticated MI app to deliver instant value, giving senior business managers immediate access to key real time business data.”

The new application will deliver access to live data showing new business, MTA’s, renewals, cancellations and claims. The application provides GWP information with options to compare with historical data – see Editors notes for screen shot. All the data is streamed securely to and from the device and refreshed/updated in seconds.

Bates continues “The current financial climate is driving insurers to maintain an even sharper focus on underwriting for profit. We appreciate that in order to make informed decisions senior business stakeholders need to be empowered with real-time information. Our mobile application frees senior executives from their PCs whilst still allowing them to tap into critical data. This app is the first in a series of innovative, mobile products designed and developed to meet the specific needs of our customers.”

Greece : list of Greek debt held by large European banks and insurers

International

Feb 17, 2012

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Leading European banks and insurance companies hold the following amounts of Greek debt. The data, provided by the institutions thermselves, was valid at the end of September, except where indicated with an asterisk.

A large amount of the Greek bonds covered by an expected partial write-off of the debt 200 billion euros held by private investors is in the hands of private Greek bondholders.

GREECE

NBG 8.7 billion euros

Piraeus Bank 7.7 billion euros

Eurobank 6.9 billion euros

Alpha Bank 3.1 billion euros

FRANCE

BNP Paribas** 1.6 billion euros

Societe Generale 800 million euros

BPCE 535 million euros

Credit Agricole** 173 million euros

Groupama* 540 million euros

Covea* 520 million euros

AXA* 300 million euros

CNP Assurances* 62 million euros

Macif* 58 million euros

GERMANY

Commerzbank 1.4 billion euros

Deutsche Bank**** 448 million euros

Allianz 500 million euros

Munich Re**** 400 million euros

BELGIUM

Dexia 1.3 billion euros

ITALY

Intesa Sanpaolo 586 million euros

UniCredit 221 million euros

Mediobanca 200 million euros

Generali Group 200 million euros

Fondiaria-Sai 34.7 million euros

Unipol 17 million euros

UNITED KINGDOM

RBS**** 822 million euros

HSBC**** 371 million euros

Barclays**** 45 million euros

Aviva*** 120 million euros

NETHERLANDS

ING**** 300 million euros

AUSTRIA

OVAG (Volksbank) 60 million euros

Erste Group** 13.1 million euros

Uniqa 174 million euros

Vienna Insurance Group**** 9.7 million euros

SWITZERLAND

Credit Suisse 83 million euros

UBS 53 million euros

(* End of June 2011 ** End of October 2011 *** Beginning of November 2011 **** End of December 2011)

Paris, Feb 14, 2012 (AFP)

BIBA : business continuity plans are likely to save businesses

Industry News

Feb 15, 2012

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New research from the British Insurance Brokers’ Association (BIBA) and the Cabinet Office has revealed that the business continuity plans are likely to stop businesses from failing after a major disruption such as a flood or fire.

The majority (96%) of respondents with sufficient information on business continuity felt that having a business continuity plan in place would keep businesses trading or reduce the costs they would incur when they would have otherwise likely failed, or it seemed to reduce the cost of the disruption significantly. In addition to keeping businesses running, 62% of respondents said that those with plans benefited from premium discounts, reduced excesses and doors opening to new insurance markets.

Insurers supported this too, with 83% of those asked, saying that they would provide a discount or improved insurance terms to a business interruption policy if a business continuity plan was in place.

The survey showed 74% of all emergencies against businesses were water or fire related. With flood and escape of water (41%) and fire (33%). Small businesses appear to be most at risk from the effects of a major disruption, with only 5% of respondents believing that small and micro businesses have plans in place.

Francis Maude, Minister for Cabinet Office, said: “This survey has underlined the need for simple guidance on business continuity aimed at smaller firms. This echoes the commitment made by the Government in the Strategic Defence and Security Review to provide support to SMEs by improving their business continuity.”

Graeme Trudgill, BIBA Head of Corporate Affairs, said: ”The results are quite striking with small businesses potentially very vulnerable and we look forward to taking these findings from senior executives within the insurance industry forward with the Cabinet Office. Our joint aim is to produce guidance to businesses, especially small businesses to help them to understand the importance and significant benefits of business continuity plans”.

The survey was conducted with BIBA and the Cabinet Office among BIBA members and Insurer partners, aiming to better understand the benefits that having resilience measures in place offer. The research can be viewed here.

M&A :EMEA region businesses continue to be affected by sovereign debt crisis

International

Feb 15, 2012

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The full-year 2011 edition of EMEA Deal Drivers, published by mergermarket in association with Merrill DataSite, provides an extensive review of M&A activity in the EMEA region, offering a detailed analysis of specific sectors and regions and identifying emerging trends in deal flow for the upcoming year.

Across the EMEA region, 2011 was split between an encouragingly busy first half followed by a slump in M&A activity triggered by the eurozone debt crisis and political upheavals. Year-on-year M&A activity is still up, however, with 10% more deals announced this year than last and aggregate deal value up 1%.

Some key findings in the report include:

– TMT has provided a reliable stream of high-profile, high value transactions over the past year, such as the €7.2bn purchase of UK-based software company Autonomy by HP and the €2.4bn purchase of US cloud computing business SuccessFactors by German SaaS specialist SAP.

– Across the EMEA region, the Consumer space has stood out as one of the most resilient sectors for M&A, and after the recent dip in activity, expectations point towards the second half of 2012 witnessing a resurgence in deal making.

– Healthcare and nutrition is currently a hot subsector, driven by the increasing sophistication of consumers in growth territories and the attractive margins that follow.

– The outlook for EMEA in 2012 varies significantly between countries. Germany has already demonstrated that it is poised to build a strong economic future come-what-may, and so it is not unreasonable to expect more deals to take place there this year than last.

– mergermarket’s Heat Chart, which is based on proprietary news intelligence tracking prospective company sales, indicates the second half of 2011 saw an 18% reduction in the number of ‘company for sale’ stories as tracked by mergermarket compared with the first half. This represents a considerable correction after the optimism seen early in the year, and is reflective of a difficult six months that has damaged the overall deal making outlook.

To view the full report, please click here:

http://www.mergermarket.com/pdf/EMEA_Deal_Drivers_FY2011.pdf

Columbus : research from Complete Ski shows costs for injuries on ski slopes

Market

Feb 13, 2012

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Unwary skiers hurt or lost on the slopes in Europe could find themselves being presented with an average bill for £16,000 if a search and rescue team is called out to help them in some countries.

According to information released by Complete Ski, part of travel insurer Columbus Direct, calling out the mountain search and rescue team can cost thousands of pounds. This can come as a very unwelcome surprise to many British skiers, who mistakenly believe these services are free as they are in the UK.

Complete Ski has produced a map showing the average costs for search and rescue operations. The company’s research shows that people are more likely to have to pick up the bill in Europe while in North America, the Coast Guard or National Park Services will pay for search and rescue operations.

Greg Lawson, Head of Retail for Columbus Direct Insurance said: “Most people would assume local emergency services, local government or even the FCO to cover you if you ever had to be rescued but, as our research shows, in most places this is not the case.”

“With half term upon us many British families will be choosing winter adventure holidays such as skiing or trekking. If you go off-piste while on holiday and require search and rescue, you could end up paying the bill. A rescue in the Swiss Alps can easily cost you around €19,000, while in Idaho they are allowed to charge up to US$4,000 for saving out-of-bounds skiers.”

Complete Ski found that, when it came to the different types of costs associated with search and rescue operations, air ambulance repatriation was by far the most expensive bill to pay, costing around £50,000.

General costs associated with search and rescue operations

Continent	Helicopter (to operate)	Airlift to hospital	Repatriation	Helicopter evacuation	Air ambulance repatriation
North America	Up to £3,200	Up to £12,000	Up to £30,000	Up to £2,600	Up to £100,000
Europe	Up to £2,100 per hour	Up to £2,500	Up to £6,000	Up to £9,000	Up to £50,000

Lawson continued: “We urge travelers to make sure they understand the policy they are purchasing. The great majority of travel insurance policies will not provide cover for the more risky activities but some insurers can provide add-ons to an existing policy for any such activities.

Lastly, I would say if you make the decision to venture off-piste make sure you take someone with you and stay within the resort boundaries – unless you are with a qualified guide.”

Complete Ski offers some winter sports travel tips

– The biggest potential cost on any ski holiday is the cost of medical treatment if you have an accident or illness. We recommend that your policy has a winter sports section that specifically covers medical expenses and other specific sections of cover including lost lift pass, ski equipment, ski school classes and ski equipment.

– It is recommended that you have a European Health Insurance Card (EHIC)for covering state hospital care but many resorts have private clinics that will not be covered by the EHIC and travel insurance is strongly recommended.

– Do look for a policy which also covers for piste rescue, whether ‘blood wagon’ or helicopter, in case you have a serious accident on the slopes.

– Take time to consider all the types of activities you will do on your ski/snowboarding holiday. For example, if you plan to go heli-skiing or even ice-skating, then these activities may require you to declare this so, if in doubt, always check with your insurer.

– Don’t consume excessive amounts of alcohol. Most policies have exclusion clauses if you are under the influence (as a guide, don’t drink more than you would if you were going to drive).

Expedite Resolution : a new dispute and resolution service launched

Market

Jan 30, 2012

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A new mediation and dispute resolution service has been launched to offer a flexible, creative, fresh and cost effective approach to claims settlement. Expedite Resolution’s central focus is to offer mediation and dispute resolution as a genuinely viable route to reduce life cycles of claims, and early closure, with a corresponding reduction in costs both direct and indirect.

Expedite Resolution comprises a growing panel of twelve independent, specialist mediators and arbitrators. The panel has extensive practice experience of the claims and insurance sectors and is able to work with claims professionals to help achieve settlement targets.

Expedite Resolution has developed its approach towards claims settlement in direct response to genuine needs within the claims arena that were identified by independent research commissioned by Expedite Resolution and undertaken by C-MAS during Q4 2011.

This identified the fact that despite 70% of respondents having used mediation services, almost half (47%) experienced problems in identifying a mediator who was skilled in the market sector and was available at short notice to take advantage of the settlement momentum generated by the parties. The research also highlighted an industry need for clarity as to when effective mediation could support earlier resolution and on what cases it would be most effective. Both of those issues have been addressed by Expedite Resolution in the way in which they will provide mediation and dispute resolution services.

Well targeted and well designed mediation can assist with resolving difficult claims in a very cost effective way to the real benefit of claimants, policyholders, insurers, reinsurers, brokers, adjusters and their lawyers. Expedite Resolution founder Maurice Nichols explains: “The Expedite Resolution business model is all about having experienced, specialist mediators immediately available for difficult cases. The panellists’ understanding of the dynamics of the claims and insurance sector, as well as the claims process and the litigation that it generates, shortens the length of each mediation and increases the success rates. Early settlements reduce exposure to risk, delivers a reduction in legal fees and frees up valuable claims resources. Jackson (and the observations of the Court of Appeal in Rolf v De Guerin) has made it clear that mediation does need to be used and Expedite Resolution has worked hard to provide mediation that works for the industry and which the industry wants to use because it brings real and worthwhile results ”.

When used on the right cases and introduced at the right time, mediation puts the claimant and the insurer in total control of the outcome of the claim. Maurice Nichols elaborates:

“Unfortunately all too often, mediation services are introduced too late in the claim life cycle – when negotiations have irretrievably broken down, the attitude of the parties has hardened and expensive litigation remains the only option. The experience of our panel members means that we can advise on the right cases to mediate, the right point of the claim life cycle to introduce it, which type of mediation skills are required and the right format for the mediation. The team’s specialist experience also eliminates the need to be ‘brought up to speed’ on the concepts and languages related to the claims environment and the commercial dynamics of settlement. So the mediation can then move forward quickly to its prime purpose – exploring settlement in the way that the parties feel will take them forward in the quickest and best way. We want to bring freshness, energy, innovation, and creativity back to mediation, and our panel members are committed to that.

The team at Expedite Resolution is committed to work independently and neutrally to facilitate cost effective settlement for the parties.

DWP : Government campaign aimed to encourage to save more for retirement

Communication

Jan 21, 2012

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A multi-million pound Government campaign aimed at getting millions of people saving more for their retirement launches in the print press from Monday.

The campaign comes ahead of the start of automatic enrolment into workplace pensions, beginning in October for the largest employers. It will explain the fundamentals of the reforms and signpost people to the Directgov website where they can find out more.

The campaign will include radio, print, online and outdoor advertising and will run in waves to build towards the launch in October.

Launching the press advertisements, the Minister for Pensions said:

“As we head into the final stretch before millions of people begin to be enrolled into a workplace pension, it is vital that we make sure that individuals and employers know what to expect.

“Automatic enrolment will transform this country, putting an end to the decline in pension saving, and setting millions on course for a more prosperous retirement.”

The first ads will appear from Monday 23 January in the national press.

They will run alongside radio ads and outdoor advertising.

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