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Fitch Ratings has revised the rating outlooks for the Italian life and non-life insurance sectors to negative from stable. This indicates that the majority of Italian life and non-life insurance ratings could be downgraded over the next 12-24 months.

The revision of the rating outlooks follows the downgrade of the Italian sovereign rating (see ‘Fitch Downgrades Italy to ‘A+’; Outlook Negative’ dated 7 October 2011 at www.fitchratings.com).

As indicated in the previous comment “Italian Insurance: Fundamentally Strong Amid Concerns Over Sovereign Risk” dated 27 September 2011 and available at www.fitchratings.com, there is an intrinsic linkage between Italian insurer ratings and the sovereign rating. Italian insurers generally hold material volumes of Italian government bonds as well as securities issued by Italian financial and other institutions. In addition, most Italian insurers rated by Fitch are domestic players with no sizeable operations abroad and therefore highly linked to an economy where government austerity measures are likely to dampen private consumption and investment.

The negative rating outlooks also reflect Fitch’s expectations that Italian insurers’ growth and profitability will remain subdued in the next 12-24 months, which could negatively affect their operating performance.

Mitigating factors are the Italian insurers’ ability to share losses with policyholders, for instance, in the case of unit-linked or participating (with-profit) life insurance contracts, where holdings of Italian sovereign debt back Italian life liabilities. However, Fitch assumes that the greater the level of financial distress of securities backing participating contracts, the less the scope for insurers to share losses with policyholders, as underlying guarantees would start to erode the companies’ capital.

Fitch’s outlooks continue to factor in weak prospects of GDP growth in Italy and deteriorating economic conditions for households. This could exert negative pressure on sales of insurance products in 2011 and 2012. However, underwriting profitability in the non-life segment continues to recover as pricing and claims experience improve. In addition, life insurers’ credit profile remains solid, with technical profitability and margins expected to hold up due to a better business mix.

The rating outlooks could be revised to stable if the Outlook on the Italian sovereign rating is revised to Stable and the degree of uncertainty surrounding the operating environment fades.

As part of its forthcoming series of insurance roadshows, Fitch will visit Milan on 26 October 2011. Chris Waterman, Managing Director in Fitch’s insurance team, will speak on European insurance and implications from the euro zone crisis, Federico Faccio will speak on the Italian insurance market, and Clara Hughes will discuss Solvency II and its Impact on Insurance, Ratings and Asset Allocation. This will be followed by a Solvency II Panel discussion, where Fitch’s analysts will be joined by leading figures from the Insurance market.

Source : Fitch Ratings Press Release

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New research from Aviva shows UK workers add up 26 million extra hours at work every day. The latest Health of the Workplace Report shows that six out of ten work beyond their contracted hours, putting in an average of 1.5 hours ‘overtime’ a day and 23 per cent claim to work an extra 2-3 hours daily.

The vast majority (79%) of these hours are unpaid, which means workers are providing around worth £225 million of ‘free’ hours each day for employers.

As a result of these extra hours, the health of the UK’s workforce is suffering:

– 27% report they feel tired all the time

– 23% say they feel really stressed

– 15% admit that their diet is suffering as they eat junk food

– 9% need to smoke or drink to unwind

Fewer than one in five (18%) report that they still have a good work/life balance in spite of these extra hours.

And sadly only one in five (18%) say they work longer for the love of the job. Most extra hours are put in because employees claim they have too much work (41%) or because they want to give a good impression to the boss (20%).

Staff are adopting a number of strategies to squeeze in these extra hours:

– 37% work in the evenings after their contracted hours

– 28% come in early to get a head start

– 16% put in hours at the weekend

– One in 10 (11%) even admit to working late at night when unable to sleep.

Dr Douglas Wright, head of clinical development for Aviva says: “Most employers make great efforts to look after their workers and ensure they get a good work / life balance. In fact our study showed that this is a top priority for a third of employers over the next 12 months so they may be very surprised to see how some employees are struggling to manage their workloads.

“Working excessively can have a huge impact on people’s mental and physical wellbeing, so anyone who feels they might have a problem, should speak to their manager to address the matter before it becomes a bigger issue. Six per cent of workers actually report they have been off sick as a result of overworking, so it’s very much in employers and employees’ interests to nip any such problems in the bud.”

Source : Aviva

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Early 2012, New Zealand’s government will triple levies paid to New Zealand’s Earthquake Commission to help rebuild a NZ$6 billion (US$4.7 billion) Disaster Fund. New Zealand’s Finance Minister Bill English has announced this earlier this week, made the announcement after the government said its operating deficit before gains and losses for the year to June 30 was a record NZ$18.4 billion, largely due to earthquake-related expenses.

Insured homeowners currently pay the EQC NZ$0.05 per NZ$100 of insurance cover, up to a maximum of NZ$69 a year, as part of their insurance premiums. Under the proposed changes, homeowners will pay NZ$0.15 per NZ$100, with an annual cap of NZ$207. The EQC currently covers an initial NZ$100,000 of insurance for dwellings and NZ$20,000 for contents. The remainder is covered by private insurance.

The EQC’s net cost from a series of earthquakes beginning Sept. 4, 2010, including one in February that left more than 180 people dead, was NZ$7.6 billion in the year to June 30, with more than 400,000 claims filed, according to the New Zealand Treasury.

Among other things, the increased levy will provide revenue to meet the Earthquake Commission’s operating costs and to cover higher reinsurance costs, and will make it possible to rebuild the Natural Disaster Fund to NZ$6 billion in about 30 years.

The annual levy revenue will increase to about NZ$260 million from NZ$86 million, English said.

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After 14 years as chairman of NFU  Mutual, Sir Don Curry will step down at the end of the year. Richard Percy, NFU Mutual Vice Chairman, has been elected to the role of Chairman from January 2012.

Sir Don will be leaving the Mutual in good shape as a successful and growing insurer – it is the UK’s 15th largest insurer with more than 1 million policies and £12 billion of assets under management, a very strong balance sheet and a business widely acknowledged for the high quality of its customer service.

Following his retirement, Sir Don will concentrate on his new role as a Crossbench Peer in the House of Lords, which was announced in September. Sir Don will also continue with his other commitments which include a wide range of posts in public office and agricultural business.

Reflecting on his term at NFU Mutual, Sir Don said: “It has been a huge privilege to have served the Mutual over the last fourteen years with eight of those spent as Chairman. I am extremely proud of the company’s heritage and I am delighted to have seen NFU Mutual through its centenary year in 2010 – a very significant milestone in the history of any business.

“NFU Mutual has been a significant part of my life. I am honoured to have played a small part in its success and will keep a keen interest in the future developments of the company.”

Lindsay Sinclair, Group Chief Executive of NFU Mutual, said: “Under Sir Don’s chairmanship NFU Mutual has flourished and he has played an integral part in the significant growth and development of the business through challenging times. I would like to thank him for the critical part he has played in the company’s success.

“With his farming background, wide experience of rural business and commitment to our philosophy of providing outstanding value and a local service to members, I am certain Richard will continue this good work as Chairman and I very much look forward to working more closely with him.”

Mr Percy joined the NFU Mutual Board in 2003 and became Vice Chairman in 2008. He previously held a number of roles at the National Farmers Union (NFU), most recently as a Member of the NFU Council and also as an NFU County Chairman.

He lives in Bovingdon in Hertfordshire where he has farmed for more than 25 years. Mr Percy also manages an arable and livestock farm in Buckinghamshire. Until 2009 he was a member of the Board of the Environment Agency and remains committed to environmental issues.

Commenting on NFU Mutual’s history and his new role, Mr Percy said: “NFU Mutual’s connection with farming and the rural community remains as strong today as it ever did. Sir Don has been an exemplary Chairman and I am delighted to be taking up the reins.”

Source : NFU Mutual

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Jova, the ninth hurricane of the eastern Pacific season and the tenth named storm is 250 miles southwest of the port city of Manzanillo (population 100,000) in the state of Colima, Mexico. As of the National Hurricane Center’s 8:00 a.m. PDT advisory today, the storm is tracking east at 5 mph. Having undergone significant intensification overnight, maximum sustained winds are now 125 mph with higher gusts.

“The storm is a significant threat because it is slow-moving, and the potential exists for major flooding in Manzanillo and other locations along the coast,” explained Dr. Tim Doggett, principal scientist at AIR Worldwide. “The storm could bring 5 to 10 inches of rain over the states of Michoacan, Colima, and Jalisco with up to 15 inches possible in some locations in mountainous terrain. In addition, a slow-moving storm will also exacerbate wind damage as structures are exposed to battering winds over a prolonged period.”

Most of the forecast models have Jova taking a turn towards the north-northeast east on Tuesday, eventually turning northward after interacting with two upper level disturbances. “Presently, Jova—a small storm, with hurricane-force winds extending outward just 15 miles— is experiencing low-to-moderate wind shear conditions,” said Dr. Doggett. “Ocean temperatures are warm, 28 – 29°C, but the warm waters do not extend to great depth, limiting Jova’s potential for further rapid intensification. While in this favorable environment, the storm should continue to slowly strengthen, possibly nearing Category 4 strength by tomorrow.”

As the storm approaches landfall, the forward speed should increase slightly. The current forecast has the storm weakening slightly just before landfall and coming ashore as a strong Category 3 storm, with maximum winds of 125 mph.

At Category 3 wind speeds, damage is expected to be significant. Structural damage to houses and buildings may occur, particularly to rooftops, while windows and cladding on engineered structures could be damaged by impact from debris. Many trees will likely be uprooted and snapped, blocking roadways or damaging homes and automobiles. According to AIR, most insured residential structures on Mexico’s west coast are made of confined masonry, which performs better than plain masonry under lateral wind loads because of its use of bond beams and columns. However, a large percentage of houses built every year in Mexico are constructed without a building permit, perhaps as high as 50%. Commercial properties tend to be constructed of confined masonry or reinforced concrete.

Currently, a single national building code for structural design does not exist in Mexico. The enactment and adoption of building codes are subjected to the government department in each of the more than 2,400 municipalities.

Source : AIR Worldwide

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The Law Society has received sufficient assurances from the Irish Government and the joint administrators of Quinn Insurance Limited (Quinn) that the interests of the 500-plus solicitors who have run-off professional indemnity insurance (PII) cover with Quinn will not be affected by the transfer of some of its insurance business to Liberty Mutual Direct Insurance Company Limited.

In the Irish High Court last week, the Law Society sought to ensure that the transfer would not materially prejudice the interests of its members.

The Court, which approved the transfer of some of Quinn’s insurance business to Liberty, also approved a payment out of the Irish Insurance Compensation Fund (ICF) of €738 million.

Part of that sum is for the joint administrators of Quinn to apply to the Court for a drawdown from time to time to meet any claims that arise under the policies remaining in Quinn, including those of Law Society members. The Court is to hand down its written judgment on 14 October.

The Society has also been advised that new legislative provisions in Ireland claims to the ICF from ‘risks outside of the State’ would not apply, and that the existing rules which afford protection to solicitors in England & Wales would apply to the Quinn administration.

Law Society chief executive Desmond Hudson said: “The assurances we have received from the joint administrators is good news for our members and helps alleviate many concerns the 500-plus members with Quinn run-off policies had about the partial transfer of Quinn’s insurance business to Liberty.

 “We have also written to all of our members and former members who are likely to be affected, informing them of the outcome of the hearing and we will continue to monitor the administration of Quinn to ensure their interests are protected and take further action if necessary.”

Source : Law Society Press Release

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To fight against cargo theft, Brit Insurance has teamed up with CargoNet, a U.S.-based cargo theft prevention and recovery network.

As a CargoNet member, Brit Insurance provides its policyholders with an extended level of protection where emergency and practical assistance is urgently required by a driver who is a victim of cargo theft. Brit Insurance underwrites in the U.S. on a surplus-lines basis through its Lloyd’s Syndicate 2987 and distributes through a network of selected agents.

In a recent incident that is typical of the risks faced by shippers on a daily basis in the U.S., a trailer containing over $1m of unreleased video games went missing over a 24-hour period, and GPS systems proved ineffective in establishing the location of the truck or its cargo.

However, as a result of the owners contacting CargoNet, the 24/7 Command Centre issued theft alerts and instigated a cargo recovery process that resulted in finding the driver and recovering the cargo intact within the 48 hours of its disappearance.

Reported cargo thefts in the U.S. are predicted to exceed $30 billion in losses each year and this is likely to be the tip of the iceberg, according to law enforcement experts. One reason is that a vast number of victims do not report cargo crime to avoid negative publicity or perceived damage to corporate reputation.

Instead, many victims absorb substantial financial losses rather than make claims for compensation, which is adding an increasing burden for many businesses still reeling from the effects of weak domestic demand and a fragile global economic recovery.

Against this background, there has been a renewed impetus on the part of CargoNet and Brit Insurance to explore new ways of combating cargo crime by bringing together the private sector, insurance industry, law enforcement agencies, and the trucking community itself.
“Brit Insurance was a natural choice for us in creating this network in the U.S. because it brings global expertise in business continuity and significant experience in working with companies to help manage insured risks all over the world,” explains Garry Rivell, vice president of insurance services at CargoNet.

As well as high visibility warnings affixed to cargo trucks, drivers are supported with a 24/7 emergency response Command Center that is capable of launching a coordinated notification and recovery process with law enforcement agencies and task forces — regardless of the state where the incident occurred.

In addition, a national database maps all such incidents in real time, and a sophisticated risk management tool helps transportation managers plan the safest routes for drivers to dramatically reduce their exposure to cargo crime.

Matthew Wilson, CEO, Brit Insurance Global Markets, concludes: “Advanced deterrents, driver education, and a highly advanced 24/7 Command Center – combined with our expertise in business continuity and risk management – has created a totally unique service that will be of assistance to all of our distribution and transportation clients that need to import cargo or operate in the U.S.”

Source : Brit Insurance

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A gold ring engraved with a burning bush stolen from the home of the most senior member of the Church of Scotland. A mysterious envelope delivered nine months later to the Church’s head office containing the ring’s amethyst stone. Sounds like the beginning of a new Dan Brown novel? No, it is actually the conclusion of one of specialist insurer Ecclesiastical’s most intriguing heritage insurance claims of recent years.

On Christmas Eve 2010, the Helensborough home of the Moderator of the Church of Scotland, the Right Reverend John Christie, was broken into and a number of valuable items stolen. Among them was the Moderator’s ceremonial gold and amethyst ring, which has been passed on from one Moderator to the next for a century.

Insurer Ecclesiastical and the Church of Scotland posted rewards for the return of the ring in January this year and even though an arrest was made, the ring was not recovered. But just as hope of recovery was fading, the ring’s amethyst stone was returned to the Church on 27 September in an envelope posted to the Moderator at its Edinburgh head office. The hand-written but unfranked envelope is now with the Scottish police for analysis.

Clare Pardy, Ecclesiastical’s fine art and heritage underwriting manager said: “It is enormously satisfying when we are able to recover important historic artefacts like this – the monetary value is almost irrelevant. What matters to the customer and to us is the restoration of a long-standing tradition.

 “Even though the ring’s gold band has not been returned, we will reset the stone into a new but identical band so that it can be returned to the Moderator to play its traditional role in the Church of Scotland’s ceremonies.”

Ecclesiastical and the police suspect the ring’s original gold band has been sold and melted down. The band bore the church’s Latin motto, “nec tamen consumebatur”, meaning, “yet it was not consumed” – an allusion to the biblical story of the burning bush.

The ring is presented every year by the outgoing Moderator of the General Assembly of the Church of Scotland to his or her successor and is worn at ceremonial occasions.

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According to the Sunday Telegraph, the Royal Bank of Scotland Group is to receive a dividend of as much as GBP1 billion ahead of the flotation of its insurance arm late next year.

The high street banks, which is 83%-owned by the British taxpayer, is to receive a windfall of between GBP500 million and GBP1 billion from RBS Insurance, or RBSI, the owner of Direct Line and Churchill, the paper quotes divisional head Paul Geddes as saying during the presentation.

RBSI is held on RBS’s books with a value of GBP4.3 billion. It quoted Geddes as saying RBSI would look at the possibility of talking on hybrid capital prior to divestment. Hybrid capital is essentially a form of debt substituted fir equity and can include preference shares that can be used to strengthen an company’s capital ratio.

London, October 09, 2011 (Dow Jones)

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According to Standard Life smaller companies present a divers and an under-researched investment opportunity for investors.

Such companies are likely to outperform relative to their larger counterparts, driven by longer term structural trends such as globalisation and technological change.

In the latest edition of Global Outlook, Standard Life Investments examines how smaller companies are key beneficiaries of changes within the global economy, and considers how this creates opportunities for investors. Smaller capitalised and often undervalued relative to their growth prospects, these stocks offer investors the potential for substantial returns that are more difficult to achieve from larger companies that are perceived to be in a more mature phase of development.

Harry Nimmo, Investment Director, Smaller Companies at Standard Life Investments, said, “It is an ideal time to consider global smaller company investment. The sector is a vast but largely underresearched investment territory. The key for investors is how to identify, at an early stage, those small and mid sized firms successful enough to grow into the larger businesses of the future. The growth potential of smaller companies can, in part, be attributed to their lower correlation to global economic growth trends.

Unlike their large company counterparts, which can be overwhelmed by broader macro developments, smaller companies can continue to deliver strong earnings growth regardless of what is happening in the wider economy. Such firms often occupy niche positions in specialist and structural growth markets.

These trends, such as globalisation or technological improvements, are often longer in duration than the standard economic cycles.”

Harry Nimmo continued,

“The current economic and business cycle is likely to remain very different from ones that have gone before. The assumptions which investors have traditionally made in relation to the size of a company have been challenged on a number of levels. Some larger companies have proven just as susceptible as smaller firms to the risks associated with, for example, the collapse of the credit bubble. As many governments are fiscally constrained there may be a temptation for them to raise tax revenues from cash rich larger companies. Additionally, there is always a temptation to apply a harsher regulator environment as a way to compensate the electorate for a difficult economic environment. This is politically easier to impose on larger rather than smaller companies.

“A related reason for governments to target larger companies is that they realise small and medium enterprises (SMEs) are typically the part of the corporate sector that deliver jobs growth in economies as they start to recover – something, more than ever, needed in the current environment. Another on-going driver is the increased use of technology, which again is more easily implemented by smaller companies, as they can be nimbler at adjusting their business models.

“Of course, the small companies’ universe can be subject to bouts of relative weakness in difficult market conditions when risk aversion is the watchword. However, for companies that occupy niche positions in structural growth or specialist sectors the long-term outlook remains positive.”

Source : Standard Life

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Over the last ten years, the European cohesion policy has been a force for change. It has made a genuine contribution to convergence and growth in the EU and directly creating over one million jobs, investing in training to improve the employability of over ten million people, co‑financing the construction of over 2,000km of motorway and 4,000km of railway and setting up at least 800,000 Small and Medium-Sized Enterprises (SMEs).

To continue this work in the future and strengthen the focus on European economic priorities the European Commission has today adopted a legislative package for cohesion policy for the period from 2014 until 2020. It is designed to boost growth and jobs across Europe by targeting EU investment on Europe’s Growth and Jobs Agenda (“Europe 2020”).

The focus on fewer investment priorities in line with these objectives will be at the heart of the new Partnership Contracts, which Member States will agree with the European Commission. They will set clear targets and set aside a financial performance reserve to reward regions who do best in reaching their goals. To ensure that the impact on growth and jobs of EU investments is not undermined by unsound macro-economic policies or by weak administrative capacity Commission can ask to review programmes or suspend the funding if remedial action is not taken.

The impact of the funds will also be strengthened by simplifying and harmonizing the rules of different funds, including rural development and maritime and fisheries. One set of rules for five different funds. And a more integrated approach will make sure the various funds serve coherent goals and strengthen each other’s impact.

Today’s proposals will bolster in particular social investment, empowering people to face future challenges of the labour market, with the Globalisation Adjustment Fund and a new Programme for Social Change and Innovation complementing and reinforcing the European Social Fund.

Johannes Hahn, Commissioner for Regional Policy commented: “Cohesion policy has already contributed a lot to building prosperity in the EU. But given the economic crisis, it must now become a motor for growth and competitiveness. Our proposals will make EU funds work even harder. By targeting investments on the keys to growth — Small- and Medium-Sized Enterprises (SMEs), innovation, energy efficiency – we will achieve a greater impact. And we are modernising the policy with conditions to ensure performance and results, incentives for those who deliver most effectively, and simplified procedures”

László Andor, Commissioner for Employment, Social Affairs and Inclusion added: “This integrated proposal strengthens the social dimension of cohesion policy by securing minimum shares for the European Social Fund and by strengthening the Globalisation Adjustment Fund. Putting people first is an important part of our effort to exit from the crisis. These funds are the financial levers that translate our policies into a reality on the ground for millions of citizens, helping them to find employment and contribute to a job-rich recovery”.

Background

The package includes:

– An overarching regulation setting out common rules governing the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund, the European Agricultural Fund for Rural Development (EAFRD) and the European Maritime and Fisheries Fund (EMFF). This will allow for the better combination of funds for a stronger impact of EU action.

– Three specific regulations for the ERDF, the ESF and the Cohesion Fund.

– Two regulations dealing with the European territorial cooperation goal and the European grouping of territorial cooperation (EGTC).

– Two regulations on the European Globalisation Fund (EGF) and the Programme for Social Change and Innovation.

– A communication on the European Union Solidarity Fund (EUSF)

Next steps

These proposals will now be discussed by the Council and the European Parliament, with a view to adoption by the end of 2012, to allow for the start of a new generation of cohesion policy programmes in 2014.

Negotiations on the Multiannual Financial Framework for the whole EU budget will continue in parallel. The Commission has already proposed to allocate €336 billion for cohesion policy instruments in 2014-2020.

The final allocations by Member State, and lists of eligible regions by category, will only be decided after the final adoption of the package on the table today.

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Taiwan’s financial regulator said Thursday it has approved Chinatrust’s USD180 million acquisition of MetLife’s Taiwanese life insurance unit.

The Financial Supervisory Commission said that, according to the agreement, Chinatrust has three months to transfer funds to Metlife, at which time the deal will be formally approved.

The decision, which took more than five months for the FSC to reach, came after Chinatrust assured the regulator it would uphold the interest of the unit’s policyholders and employees.

Taiwan’s government carries out background checks on buyers, including their nationality and funding sources, if a merger or acquisition target is a local company or a local operation.

Chinatrust Financial, which owns Chinatrust Commercial Bank Co., Taiwan’s largest credit-card issuer, has outlets in Taiwan, the U.S., Canada, the U.K., Japan, the Philippines, Thailand, Vietnam, mainland China, Hong Kong, India, Singapore and Indonesia.

Taipei, October 7, 2011 (Dow Jones)

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Off the coast of New Zealand, a Liberian-flagged vessel struck a reef and started leaking oil early Wednesday.

Some oil-soaked dead birds have been found in the area surrounding the ship, Maritime New Zealand said.

Four little blue penguins and two shags were rescued Friday afternoon from a nearby island by trained oiled wildlife responders, the government agency said, and are being treated.

Maritime New Zealand’s commander at the scene, Rob Service, said teams were inspecting beaches where the public had reported sighting oil but none had yet been found.

Almost all the 1,700 cubic meters (450,000 gallons) of heavy fuel oil carried by the ship was still contained within the vessel’s hull, he said in a prepared statement.

But the operation to remove the oil, being led by Svitzer Salvage, would be complex, he said, adding: “There is no way of doing this quickly.”

Maritime New Zealand has deployed more than 100 people to respond to the incident. Chemical dispersants are being used to try to break down the slick, which the agency said had maintained a constant size Friday.

Officials fear the stricken ship may break up and spill additional oil as its condition deteriorates.

“I think we’d expect that at some point to have further problems and potentially even break up,” Transport Minister Steven Joyce told broadcaster TVNZ.

Greenpeace expressed “extreme concern” about the spill and urged the government to avoid using further toxic chemicals in an attempt to disperse it.

“This is an unfortunate illustration of just how difficult it is to deal with oil spills at sea,” the organization’s Steve Abel said. “Even a slow, and relatively accessible, oil spill like this one has clearly stretched New Zealand’s response capability to its limits.

“It is also potential disaster for the blue whales and dolphins presently calving in the area, as well as numerous other marine species.”

The stranded ship ran aground on the Astrolabe Reef, about 12 nautical miles off the coast, in the early hours of Wednesday.

Source : CNN

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For approximately USD1 billion, HSBC has approached the top three p&c insurers in Japan about the sale of its non-life insurance business.

Japanese insurers have been aggressively pursuing acquisition opportunities overseas as they look to expand beyond their shrinking home market and diversify the risks in their insurance portfolios.

The companies, MS&AD Insurance , Tokio Marine and NKSJ Holdings , are studying the offer to determine whether they will participate in bidding, said the sources, who were not authorised to discuss the matter publicly. The first round of the bidding is expected in mid-October.

European insurers Allianz and AXA SA are also among the potential bidders for HSBC’s general insurance business.

HSBC is selling its non-life insurance operations in Hong Kong, Singapore, some Latin American countries and France. The company has already divested its non-life business in Britain.

The non-life insurance businesses earned profit before tax of about $1 billion in 2010, up from about $750 million in 2009, according to a company presentation in June.

Non-life insurance premiums totalled $1.3 billion in 2010, according to HSBC’s balance sheet.

Source : Reuters 

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Aon Benfield’s latest Monthly Cat Recap report reviews September’s worldwide natural disasters. Published by Impact Forecasting, the report reveals that seasonal monsoonal rains triggered significant flooding and landslide events throughout parts of Asia during the month, with China, Thailand, India, Pakistan and Cambodia being particularly affected.

In China, consecutive weeks of heavy rain led to flash floods, river flooding and landslides in nine separate provincial regions, killing at least 101 people and resulting in an economic loss of CNY27.21 billion (USD4.25 billion) according to the country’s Ministry of Civil Affairs.

In Thailand, August flooding continued into September, claiming more than 206 lives in total and damaging 1.13 million homes amid an economic loss estimated at THB32.4 billion (USD1.1 billion); and in Cambodia, flooding claimed at least 150 people lives in several central provinces, and damaging at least 130,200 homes

Meanwhile, Southern Pakistan witnessed continued flooding that has killed at least 443 people and affected more than 1.52 million homes. In India, two separate waves of flooding affected the states of Orissa, Uttar Pradesh and Bihar during the month, killing at least 97 people and destroying 80,000, with total combined economic losses forecast at more than INR49 billion (USD1 billion).

Steve Jakubowski, President of Impact Forecasting, said: “The monsoon season has affected many parts of Asia with extremely heavy rainfall over the past several months, which is not unexpected for the region during this time of year. However, in many areas, re/insurance penetration remains relatively low. Flood modeling, in general, is still a science in progress, and in these Asian regions particularly, the scientific and modeling communities are striving to understand the peril and its effects, in order that governments can best mitigate the seasonal rainfall, and that the re/insurance industry can structure and price appropriate products to assist in the management of this risk.”

According to the September Cat Recap report, global tropical cyclone activity remained strong during the month, highlighted by Typhoon Nesat, which made landfalls in the Philippines, China and Vietnam, killing at least 60 people and resulting in USD1.39 billion of combined economic damages.

Japan saw separate landfalling cyclones – Roke and Talas – in September, with Talas killing at least 68 people and bringing record rains to multiple prefectures. More than 25,117 structures were damaged by wind or flood as total economic losses breached JPY23 billion (USD300 million). Typhoon Roke killed at least 13 people, injured 308 others and damaged more than 4,819 properties, amid a total economic loss in excess of JPY19.1 billion (USD250 million).

In Europe, the post-tropical remnants of windstorm Katia came ashore in northern sections of the United Kingdom, killing at least one person.  The Association of British Insurers (ABI) reported that damage, clean-up, and business interruption costs would total more than GBP100 million (USD158 million).

Meanwhile, Tropical Storm Lee made landfall along the United States coastline in Louisiana before moving northeastward. Excessive rains from the storm system led to significant flooding throughout parts of the Northeast and Mid-Atlantic. More than 80,000 claims were filed to insurers and the Federal Emergency Management Agency (FEMA) with payouts in excess of USD300 million. In terms of an economic loss, Pennsylvania government officials reported USD1 billion in flood losses in the state alone.

Elsewhere, dozens of wildfires spread across central Texas, with the most destructive – the Bastrop County Complex Fire – destroying at least 1,554 homes. According to the Insurance Council of Texas, in excess of 7,000 claims had already been filed and payouts were anticipated to exceed USD500 million.

Also in September, earthquake events were recorded in India and Guatemala.

Source : Aon Benfield

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Retirees today advise the younger generation to save more for the future, or rather spend less on expensive life events such as weddings. Also, more than a quarter of elders poled by Aviva, suggest that families stay small to be more financially secure and get ahead in later life.

As well as slashing the cost of the big day (60%); other savings advice from beyond retirement is to shop around with every penny (57%), drop designer labels (52%), don’t use credit (48%) and spend less on cars (45%).

Despite the old adage that “you should worry less in life”, this advice was only given by one in ten retirees to the younger generation when it came to their finances.

With the average cost of a wedding standing at £18,500, cutting this cost by half (or more) could provide the happy couple with a significant lump sum to start a pension fund and lay the foundations for future financial security together.

Another potential financial downfall of the young is spending money on designer labels that are often twice the price of non-designer clothing. With the average interest on unsecured debt paid annually by each UK household standing at approximately £2,467, and a second car costing on average £5,869 to keep on the road each year, heeding advice from beyond retirement could go a long way to helping the younger generation cut costs and save more towards the future.

Even taking on board some of this advice, and saving a modest amount each month could make a big difference to a young couple’s income in retirement. For example, a 30 year old male saving £150 a month on designer labels, cars and by shopping around and contributing this to a pension instead, could benefit from £450 income per month, from 65 throughout retirement, in addition to any state pension. His wife saving the same amount from 30 to 65 would enjoy £415 per month.

Source : Aviva

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ObjectWay, a global provider of wealth and investment management solutions, has received three prestigeous 2011 technology awards from financial magazine World Finance.

According to World Finance jury, headed by Alexander Redcliffe, ObjectWay S.p.A. has been recognised as the best technology advisory solution provider for the financial sector, the best software systems developer for the retail as well as the private banking sectors in Western Europe.

Much to his satisfaction Luigi Marciano, ObjectWay President has declared: “ We are very proud of these awards from World Finance. They underline the success of our strategic approach, to be excellent at combining Wealth and Investment Management business know-how with an in-depth technology expertise. The result has been the development of an innovative technology platform that provides advanced, flexible, customised and modular software solutions in Italy and abroad, mainly in Western Europe”.

ObjectWay has been awarded by World Finance Technology Awards 2011 jury, because “ ObjectWay solutions address two major financial market challenges: a margin increase and regulations compliance”. Furthermore “ObjectWay has become a market standard in the private banking sector for customised software and technology solutions ”. The jury has also expressed appreciation for “ the high standard of ObjectWay advisory services and for the fact that banks can directly integrate those services with their own organisation, without the involvement of third parties”.

World Finance and the Awards jury are convinced that innovation and technology are key drivers to investment decisions.

Technology can be implemented at a low cost and can guarantee high efficiency, cost reduction and margin increase to current global institutions. World Finance Technology Awards identifies and selects individuals and companies which distinguish themselves for the best technology.

Source : ObjectWay

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The Insurance Fraud Bureau (IFB) announces that Swinton has agreed to become affiliated to the IFB. Swinton is the first company to take advantage of an offer made a week ago by the IFB, for brokers to join the IFB industry collective, by way of a newly created broker affiliate model.

The ‘IFB Broker Model’, launched on 27 September 2011, enables brokers to work closely with the IFB and its insurer and compensator partners, to prevent fraud in a collaborative manner.

The model is aimed at larger retail brokers with dedicated counter-fraud resources. In 2012 the IFB will also be exploring with the British Insurance Brokers Association (BIBA), how the Bureau could potentially cater for the wider broking market.

The affiliate broker model includes the two-way sharing of fraud intelligence and support provided by the IFB.

Creation of the model is in recognition of the importance of tackling fraud in distribution channels, and in response to interest displayed by brokers to work with the IFB.

The IFB engaged with BIBA, the Institute of Insurance Brokers (IIB) and the Chartered Insurance Institute (CII), to communicate the affiliate model to the broking community.

Glen Marr, IFB Director comments:

“With the IFB already successfully working closely with insurers, compensators, Police forces across the UK, regulators and agencies, we’ve long held the view that bringing brokers into the IFB fold is a logical step. Our dialogue with brokers has reinforced this”.

“We positively welcome Swinton and look forward to embracing further brokers in our work to prevent fraud, helping protect insurers and consumers, and further demonstrating that the industry is intolerant of fraud”.

Jon Howells, Head of Credit & Fraud, Swinton comments:

“Swinton recognises that as a leading intermediary, we have a duty to take preventative steps to stop parties gaining cover from insurers with the view to facilitating fraud. We feel passionately that genuine customers should not be penalised for the actions of fraudulent activity. To that end, Swinton have dedicated considerable resource specifically to counter the threat to the Group and our panel members. We are looking forward to working very closely with the IFB in order to reduce insurer risk and disrupt potential fraudsters as much as possible.”

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AA Insurance has expanded its commercial insurance offering through an exclusive arrangement with Bollington.

The deal means that the AA is launching new products to add to its commercial range, including insurance for recovery operators, the taxi trade, motor traders and repairers and self drive hire companies.

Andrew Strong, the AA’s chief executive, points out that these motor industry products align well with the AA’s motoring pedigree.

“The AA is a household name for roadside assistance as well as motor insurance, including van and commercial vehicle cover.  Adding specific motor trade insurance is a natural extension to the range and, in addition, forms a perfect fit with the AA’s fleet business breakdown cover.”

As part of the deal, Bollington is offering AA fleet cover to its own commercial customers.

Paul Moors, chairman of the Bollington Group says: “We have worked extremely hard to win this imaginative and creative relationship with the AA.  We have over 40 years’ experience in the commercial broking sector and I believe that this is one of the most significant new ventures in the commercial market.

“Our broking experience, coupled with the AA’s marketing ability, is a perfect arrangement.  It offers huge potential including development of new services created through AA’s financial services such as business credit card or fuel cards.”

Mr Strong says that in the past, the AA has concentrated on distribution of commercial insurance through customers who buy other insurance products and, while that has been growing steadily, it represents a small part of the total business market.

Adds Mr Strong: “There’s a greater need today for advice and tailoring products to suit individual requirements.  Now we have that opportunity through our new relationship with Bollington – not just in the motor sector but amongst small businesses of every sort.”

Apart from the motor trade, the AA offers cover for pubs, restaurants, hotels and guest houses; small businesses such as traders, contractors, landlords, consultants and shop keepers; and van and small commercial vehicle fleet cover. Risks include buildings and contents, liability, employers’ and professional indemnity, tools and goods in transit.

“This is a very comprehensive range and I’m confident that we will be able to meet almost every small business insurance requirement.  I firmly believe that we are now poised to mirror our personal lines success in the commercial sector.”

Source : The AA (Ian Crowder : ian.crowder@theAA.com)

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Xl Insurance announced the launch of a new range of insurance solutions for life science companies. The new products are aimed at companies in the following fields: biotech, cosmetics and medical devices in general, as well as small to medium-sized pharmaceutical companies with moderate US exposure and a turnover of up to EUR 1 billion.

The products developed especially to respond to the needs of the Life Science industry include General Liability, Product Liability, Clinical Trial Liability (Domestic and Foreign), Environmental Liability and Property coverage. These are offered as stand-alone or as part of a package and are initially available primarily to buyers in Europe.

Thomas Stamm, Chief Underwriting Officer Primary Casualty, International P&C, said: “Life Science companies today operate in increasingly complex and demanding markets. Changing demographics and customer needs, as well as challenging legal frameworks create opportunities and at the same time result in a highly litigious environment. Our specialized underwriters and risk engineers understand the Life Science industry’s complex risks. As these are global by nature, clients can count on our global network and expertise to insure risks in over 100 countries.”

Daniel Maurer, Chief Underwriting Officer Middle Market, International P&C, commented: “The spectrum of companies active in this industry ranges from start-ups to established market leaders – each with specific risks. We have identified the special needs of this growing and innovative industry and are able to create solutions that unleash the Life Science industry’s capacity to advance.”

Source : XL Insurance

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