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A 6.2 earthquake struck a remote area in southern Kyrgyzstan on the border with Uzbekistan according to the US Geological Survey.

No casualties or serious damage were immediately reported from the temblor, which hit at about 1:35 a.m. local time 400 kilometers (250 miles) from Bishkek, the capital of Kyrgyzstan, a mountainous Central Asian nation.

The closest heavily populated area appears to be the Uzbek city of Ferghana.

In Andijan, the next largest city in Uzbekistan’s Ferghana Valley, residents told The Associated Press that many people have left their homes in panic and are standing in the streets. That industrial city is roughly 100 kilometers (60 miles) from the epicenter.

Source : Official Wire

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The strong Typhoon Ma-On stroke southern Japan with torrential rains and strong winds leaving dozens injured and cancelling more than 100 flights.

Packing gusts of up to 180kmh, the storm made landfall over south-western Shikoku late on Tuesday, bringing up to 120cm of rain since Sunday, the Japan Meteorological Agency said.

Ma-On – named after a Hong Kong mountain – was 40km west of Wakayama prefecture, some 450km from Tokyo, slowly moving east at the speed of 15kmh on Wednesday morning, it said.

At least one person was missing and 51 injured, while 130 domestic flights were cancelled, public broadcaster NHK reported.

The weather agency warned that the tsunami-hit north-east coastal area would see rainfall of up to 20cm over a day to Thursday morning, urging the region to brace for possible landslides and floods.

Tokyo, July 20, 2011 (AFP)

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Aon Risk Solutions has appointed Nicki Tilney as head broker of construction, power and infrastructure for Aon’s Global Broking Centre in Singapore. The Global Broking Centre in Singapore is one of Aon’s hubs around the world for insurance placement and ensures clients have access to insurance markets outside their immediate geography.

Tilney joins from JLT and will be relocating from London to Singapore.

With over 20 years of experience in the insurance industry, Tilney will coordinate the placement of construction, power and infrastructure business in local markets, and work with the other Aon GBCs around the world to place business with the most appropriate markets for the benefit of clients.

Hamish Roberts, CEO of Aon Risk Solutions’ Power Specialty, commented: “We are delighted to welcome Nicki to Aon. The experience and expertise she brings will further strengthen what is already the leading global team in the power industry. This appointment demonstrates Aon’s commitment and ability to leverage its global footprint to find the best markets around the world for our clients, and ultimately develop and place the most efficient and effective insurance policies possible for them.”

Ted Hodgkinson, executive vice president and chief broking officer for Asia, added: “Nicki’s arrival to lead our construction, power and infrastructure broking team here in Asia underlines Aon’s continued commitment to focused broking in the region.”

Source : Aon

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According to News Assurances sources, confirmed by Allianz Global Assistance, François-Philippe Pic, France’s Managing Director, will step down in late August 2011. There is no successor considered as of yet.

Last week, Allianz Global Assistance France, also called Mondial Assistance, has announced internally the departure of François-Philippe Pic, Managing Director since 2009.

According to News Assurances sources, confirmed by Mondial Assistance, Mr. Pic has decided to leave his position in the end of August 2011 to follow professional and personal opportunities abroad.

The managing team of the French subsidiary of Allianz Global Assistance will act as interim after the departure of François Phlippe Pic. Ida Luka-Lognoné, Executive Committee member of the group, will take responsibility until a successor is appointed.

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Standard & Poor’s Ratings Services has lowered its local currency long-term counterparty credit and insurer financial strength ratings on Morocco-based Société Centrale de Réassurance (SCR) to ‘BBB’ from ‘BBB+’. The outlook is stable.

The downgrade follows the similar rating action we took on the Kingdom of Morocco (see “Morocco’s ‘BBB-‘ FC Rating Affirmed; Local Currency Rating Lowered To ‘BBB’ On Revised Methodology; Outlook Stable,” published July 13, 2011), linked to a change in our methodology for rating sovereign governments.

We consider SCR to be a government-related entity (GRE). In accordance with our criteria for GREs, the rating on SCR reflects our opinion that the likelihood of timely and sufficient extraordinary government support to SCR is almost certain in the event of financial distress. Therefore, we equalize the local currency long-term rating on SCR with that on the sovereign. We base our approach on our view of SCR’s integral link with and critical role for the government.

Our assessment of SCR’s stand-alone credit profile remains unchanged at ‘bbb’.

The stable outlook on SCR reflects that on Morocco. In application of our GRE rating methodology, any upward or downward movement in the local currency long-term sovereign rating on Morocco would trigger a similar change in the rating on SCR.

We believe that, notwithstanding the gradual end of legal cessions, SCR will continue to play a critical role for the government, which has specifically mandated it to provide protection for some catastrophe risks. Equally, we consider that SCR’s integral link with the Moroccan government, underpinned by the full guarantee on SCR’s balance sheet, will remain unaltered over the next two years.

Source : Standard & Poor’s

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According to catastrophe modelling firm AIR Worldwide, with winds gusting to 157 kilometres per hour (98 miles per hour), Category 2 Typhoon Ma-On (local name “Ineng”) has passed Minami Daito Island and is moving at about 19 kph (12 mph) toward the north. Currently about 885 kilometres (550 miles) southwest of  Tokyo, Ma-On is expected to stay at its current intensity for the next 24 hours and make landfall on Shikoku Island Tuesday morning local time. Ma-On is a large storm with typhoon force winds extending outward up to 80 kilometres (50 miles) from its centre, while tropical storm force winds extend outward up to 360 (225 miles) kilometres. Severe weather warnings are in effect for Kyushu, Shikoku, and Tokai regions.

In preparation for the storm’s arrival, Tokyo Electric Power Co. is working to install a cover over a building at its crippled Fukushima Daiichi nuclear plant to protect it from Ma-On’s winds and rain.

“Earlier forecasts put Ma-On traveling just to the east of Japan, much closer to Tokyo, but at present the Japan Meteorological Agency has Ma-On making landfall on Shikoku Island Tuesday morning local time and then recurving sharply towards the east, passing well south of Tokyo,” said Dr. Peter Sousounis, principal scientist at AIR Worldwide. “However, because of the orientation of Japan’s coastline, even slight disparities in forecast tracks have significant implications for loss potential.”

 “The storm is expected to bring destructive winds to Japan’s southern coasts and some 12 to 24 centimetres of precipitation as the storm slows and  begins to recurve before undergoing extratropical transitioning. In Japan, more than half of storms undergo extratropical transition, which can exacerbate flooding. Even weak storms several hundred kilometres offshore can cause flood damage on land.”

According to AIR, due to the country’s strict construction codes, modern homes along the coastal areas of Japan are well engineered and the region has been equipped with storm surge barriers along the most vulnerable coastal regions. Insurance penetration for wind insurance in Japan is roughly 50% for residential buildings and 95% for commercial buildings, respectively.

Source : AIR Worldwide

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Commercial aircraft operators will now benefit from a Fatigue Risk Management Systems (FRMS) Implementation Guide. This has been jointly developed by the International Air Transport Association (IATA), the International Civil Aviation Organization (ICAO), and the International Federation of Airline Pilots’ Associations (IFALPA).

FRMS is a methodology based on scientific principles that will allow operators to manage the fatigue-related risks particular to their types of operations and context.

It provides a viable alternative to traditional prescriptive flight and duty time rules. Advancements in science have brought a better understanding of the correlation between fatigue and performance as well as fatigue mitigation methods.

The FRMS Implementation Guide applies these advancements to enhance flight safety at a time when fatigue is increasingly cited as a contributing factor in accidents.

Nancy Graham, Director of ICAO’s Air Navigation Bureau stated that “Safety is aviation’s number one priority and we all share in the responsibility to protect the lives of passengers and crews.

The collaborative process for developing the FRMS Guidance is a perfect example of what can be achieved when we commit to finding and implementing a common solution.”

IATA, ICAO and IFALPA collaborated on developing an FRMS Implementation Guide for Operators, in line with specific guidance for regulators.

The Guide includes valuable insight into the methodology and framework for implementing an effective fatigue risk management program and an explanation of the science supporting it.

“FRMS enhances safety scientifically and in consideration of today’s operational realities and accumulated experience. This Implementation Guide now puts regulators, pilots and the industry on the same page when it comes to ensuring safe operations with optimum crew performance,” said Guenther Matschnigg, IATA’s Senior Vice President, Safety, Operations and Infrastructure.

 “The value of this document is that pilots, regulators and operators have all agreed to a common approach to the complex issue of fatigue. I am enthusiastic as this is just the beginning of a progressive and productive relationship with our industry partners on this important issue,” concluded Captain Don Wykoff, IFALPA’s President.

In support of this cooperation and to further facilitate understanding and implementation, IATA, ICAO and IFALPA are joining forces to deliver FRMS information workshops around the globe to outline the context for the FRMS requirements from the perspective of each of the stakeholders – regulator, operator and pilot.

Accordingly, the Council of ICAO recently adopted international standards for FRMS, to ensure both consistent implementation of FRMS by operators and oversight by regulators.

Source: IATA/ICAO/IFALPA

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Moneysupermarket.com sais distracted drivers are rife on UK roads. They face hikes in their motor insurance premiums if they are caught being careless behind the wheel.

Analysis shows that the 16,485 motorists who are convicted of driving without due care and attention each year are not only facing a £60 fine and three points on their license but also an increase in their car insurance premiums of over £200 (27 per cent), amounting to an additional £3.3m on annual premiums.

Additional moneysupermarket.com research reveals that over eight in ten drivers (82 per cent) get preoccupied whilst driving. The top three distractions admitted by motorists include:

– Changing stations on the radio/changing a CD (61 per cent)

– Eating and drinking (51 per cent)

– Taking mobile phone calls (23 per cent)

Furthermore, a fifth of drivers (16 per cent) admit sending text messages while driving, with over a third (36 per cent) of under 35s saying they had done this. Motorists also admit to ignoring basic safety measures, with 15 per cent of drivers not wearing a seatbelt. The research found motorists living in Northern Ireland are the biggest danger on the roads, with 87 per cent of drivers admitting to having been distracted to the point of driving without due care and attention – compared to 74 per cent of those living in the North West.

Peter Harrison, car insurance expert at moneysupermarket.com said: “The UK’s roads are becoming busier every year so taking your eyes off the road, even for a second to make a phone call or eat a quick snack, could lead to severe, or even fatal, consequences. More worryingly, as our research shows, some motorists are not only being unnecessarily distracted but are even failing to take basic safety precautions when driving such as wearing a seatbelt.

Motorists who are convicted of “driving without due care and attention” (conviction code CD10) can expect their insurance premiums to increase by an average 27 per cent – or £202 a year2. In some instances, having a CD10 conviction could add as much as an extra £402 to the cost, an increase of 63 per cent.

Peter Harrison continued: “Although it may be unintentional, careless drivers are a menace on the roads and are a danger to both themselves and others. The penalties for this kind of behaviour are huge and can really impact on the cost of your insurance premiums. Not only are these bad driving habits, but also expensive habits if you are caught – it really isn’t worth taking the risk.”

Source : Moneysupermarket.com

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Legal & General Workplace Savings has appointed Ian Foster in the newly created role of Development Director focusing on direct enquiries from the corporate market.

Ian joined in his new role in June and will report to Helen Buchanan, Legal & General’s Distribution Director Workplace Savings.

Helen said: “We have received direct enquiries from employers in the past and have dealt with these on an ad hoc basis often in parallel with an Employee Benefit Consultant (EBC). As we see an increase in the number of direct enquiries, we want to ensure they are serviced effectively. Ian’s role will ensure we are able to communicate our WorkSave propositions while continuing to support the EBC community through our dedicated EBC service team. We anticipate that the number of enquires is likely to increase ahead of Auto Enrolment and RDR next year.

Our distribution model has not changed, as we remain absolutely committed to the Employee Benefit Consultancy (EBC) market and continue to have an excellent relationship with all employee benefit organisations.

Ian brings a wealth of experience and knowledge in the corporate market and I look forward to working with him as we continue to grow our business.”

Ian Foster commented; “The Workplace arena is set to grow as more employers look to strengthen their employee benefits packages ahead of AE. Legal & General’s distribution strategy has been successful over recent years in terms of new scheme wins and we are keen to ensure we deal with direct enquiries without deflecting our dedicated EBC teams from their core role supporting the EBC community. I am excited to have joined Legal & General Workplace Savings at a time when its services and products are leading in the drive toward Auto Enrolment. “

Ian has previously worked for Legal & General and more recently widened his experience with Xafinity Consulting and at Friends Life.

Source : Legal & General

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    This summer many UK drivers will be taking their car to mainland Europe to enjoy the open roads, and all the freedom that a car can bring.

    Miles that pass by with barely another car in sight might be wishful thinking: but across the Channel you don’t have to go far to find well-maintained, open roads that are free of traffic.

    Driving in Europe isn’t difficult. And it’s fun. But, according to an AA/Populus survey of AA members, common concerns about driving outside the UK include ‘driving on the wrong side of the road’, not understanding local traffic laws or about the driving standards of local people. Even so, one in five (19%) thought that the standard of driving in mainland Europe is generally better than in the UK.

    How do I know whether my comprehensive insurance covers me for driving in Europe?

    It is very important that you check with your insurer first to ensure that you do, in fact, have comprehensive cover when driving outside the UK. Many insurers have withdrawn this cover to reduce costs and either don’t offer it at all or charge an additional premium. AA comprehensive insurance is among the few policies that includes up to 90 days without charge. You don’t need to tell the AA when you are driving in Europe, others that offer similar cover may want to know when you are travelling.

    If I don’t have comprehensive cover, does that make it illegal for me to drive in Europe?

    No. If you are travelling to an EC country, provided your car is insured in your home country (comprehensive or third party) then you can legally drive in most European countries including those not in the EC (such as Norway and Switzerland). EC law means that you will have the minimum legal level of cover in the countries you drive through which in most cases is third party only. So if you have a crash that’s your fault, you will be covered for the injuries you cause to anyone else and/or for damage to cars or property you hit, but not damage to your own car. You’ll end up having to foot the local bills for getting your car removed, repaired, repatriated or even scrapped if the damage is severe – quite apart from costs for onward travel, hotel bills and so-on. So it is vital to ensure that your insurance is in place before you go!

    So how do I cover myself if I do have an accident or break down?

    Taking out European Breakdown Cover is a must. ‘Gives you real peace of mind’ is a much-misused term but in this case, it genuinely is true. Help is proved 24/7 through the AA’s call handlers in Lyon, who are multilingual. If your car breaks down or you do have an accident miles from home, you need to know that you will be rescued and your car repaired, or if not, you will be able to continue your journey and your car sorted out or repatriated while you enjoy the rest of your holiday. In the event of a crash, AA European Breakdown Cover will talk to your insurer about repair or recovery. Not all European breakdown services will attend if you have a crash.

    What hints do you have if I have a crash in another country?

    – A collision should be handled in much the same way as in the UK.

    – Make a note of the Europe-wide emergency number – it’s 112 (the equivalent of 999) the number works in the UK as well. This will enable you to contact the Police and Ambulance services. It is compulsory in some countries to call the police in the event of any accident no matter how minor.

    – Get names and addresses of those involved, note where you are, distinguishing features, make a note of registration numbers and makes / colours of cars. Take photos if you can (use your mobile phone if necessary). Exchange details (your insurer may be able to send you a European Accident Report Form which will help). Get a report from the police who attend. Tell your insurer as soon as possible; and call AA European Breakdown Cover using the number provided with your documentation

    What if I’m stopped for speeding or get flashed by a speed camera?

    Take great care to stick to speed limits. In many countries the penalties can be both tough and instant. If you are stopped for a motoring offence by police you are likely to be required to pay an on-the-spot fine and most police will accept credit or debit cards. If you don’t pay, your car may be impounded. There are reciprocal arrangements between the UK and most other EU countries for motoring offences, such as from an enforcement camera, so the fine will follow you home and will be recovered by a UK court. Take note that some motorways as well as urban highways measure average speed between cameras.

    What else should I take with me?

    Check local road traffic rules before you go – you’ll find a host of information on the on the AA’s website. You should understand speed limits, which might be different when it’s raining (in France for instance); and road signs (which are mostly familiar although there are some you won’t see in the UK). And remember never, ever drink and drive – alcohol limits in almost all other European countries are a lot lower than in the UK!
    Your insurer may provide a translation confirming that you are comprehensively insured – however, EC countries no longer require visiting drivers to carry a ‘green card’. Check with your insurer.

    Don’t forget your driving licence of course – both the pink card and the paper counterpart.

    If you are towing a caravan, make sure that your caravan’s insurance extends to the countries you are visiting. Most do and some provide very comprehensive overseas touring cover year-round (thus covering ex-pats as well)

    Make sure you have your European Breakdown Cover documents!

    Take your vehicle registration document

    Take your EHIC (European Health Insurance Card – used to be E111) – free from www.euhealthcard.org which provides reciprocal medical treatment in EU countries. However, EHIC is not a replacement for travel insurance and it doesn’t necessarily mean that treatment will be free!

    You will need travel insurance. Remember, if your home insurance covers your personal property outside the home anywhere in the world: you won’t need baggage cover on your travel insurance – ask for this to be excluded and for the premium to be reduced accordingly.

    Check you have your tickets and passports! You’d be amazed how many people get to the ferry or Eurotunnel terminal and find they’ve left them behind…
    Check what car equipment you will need for the country or countries you are driving through. This may include high-visibility jackets (kept in the car not in the boot); warning triangle; fist aid kit. You can get a kit from the AA Shop which includes all these things as well as a set of headlight beam converters and a magnetic GB plate (both legal requirements) and a useful European Driver’s Handbook, or buy them individually. You can also buy guide books and atlases to help you on your way!

    Most of this is, of course, common sense but it is easy in the excitement of arranging your trip to miss something vital.

    But perhaps the most important thing of all is to not forget your camera and have a really great time absorbing the local culture and cuisine!

    Bon voyage…

    Written by Ian Crowder

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    Two-fifths (41%) of Britons have saved the same amount of money, or more, in the last year compared with the same period 12 months before, according to research by Standard Life.

    The findings, by the long-term life and savings’ company, show that despite the backdrop of austerity measures and fiscal tightening the public is still being financially responsible.

    25 to 34 year olds were the most likely to save with more than half (51%) setting aside the same, or more, savings since last year, when measured against the same period the year before. They’re followed by 18 to 24 year olds (46%) and the over 55’s (41%).

    John Lawson, Head of Pensions Policy at Standard Life, said: “It is encouraging to see that even when the public is faced with increasing financial pressures, with inflation pressures and rising utility costs to name but a few, they’re taking the sensible approach by saving their money.

    “Savings, whether it is for a new home, holiday or the long term is vitally important. People don’t have to set aside a lot of money to feel the benefit of an investment in the future. Whether it’s putting it into a mutual fund, pension or ISA, a little is better than nothing at all.”

    Regionally the North East (48%) is saving the same or more in the past year, with East Midlands (46%), London (45%), Wales and Scotland (both 44%) closely behind. These are followed by the North of England (43%), Northern Ireland, Yorkshire & Humber (both 42%), South East, North West, East of England (all 40%) and the West Midlands and South West (36%).

    Source : Standard Life

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    The All-Party Parliamentary Group for Building Societies and Financial Mutuals has today set out important recommendations as to how the Government should deliver its Coalition commitment to foster diversity and promote mutuals.

    Following a short inquiry, which included evidence sessions with the Chief Executive of the FSA, Hector Sants, the Financial Secretary to the Treasury, Mark Hoban MP and the BSA, the Group has published its final report Fostering diversity: promoting mutuals.

    The BSA particularly welcomes the following recommendations from the MPs:

    – The Government should adopt a comprehensive policy strategy to implement its Coalition Agreement commitment to promote mutuals.

    – Legislation establishing the new regulatory authorities must include ‘promoting mutuals and fostering diversity’ within the statutory objectives.

    – The Government should fully consider remutualising Northern Rock and publish advice that it has received in relation to this matter.

    – A Government endorsed ‘Diversity Index’ should be established across the whole financial services sector.

    Relating to the final recommendation above, the BSA is today announcing that it has commissioned Oxford University¹ to establish a diversity index to measure the level of diversity in UK financial services markets over time.

    The index will measure a number of factors – such as ownership structure, size and geography – across the UK mortgage, savings and current account markets.  It will also provide an overall measure of diversity in each of these markets. It is intended the research will be published this winter, with the index then updated annually to assess how diversity is changing.

    Commenting, Adrian Coles, BSA Director-General, said:

    “Today’s report makes an important contribution to the debate on diversity in financial services.  A diverse financial system is better able to weather the strains of the business cycle and the Government has rightly committed to a more competitive banking industry by fostering diversity.  We urge them to take on board fully the recommendations of the All Party Group of MPs.

    “The independent diversity index which the BSA has commissioned Oxford University to develop is intended to assist the Government in meeting its commitment to promoting diversity, and should be of interest to all those with an interest in a healthy and robust financial services sector.”

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    Standard & Poor’s Ratings Services said that it assigned preliminary ratings to the $100 million principal-at-risk variable-rate mortality catastrophe-indexed series V class D notes and series VI class E notes to be issued by Vita Capital IV Ltd. (see list below).

    The notes will provide Swiss Reinsurance Company Ltd. (Swiss Re; A+/Positive/A-1) with a degree of protection against extreme mortality events occurring to specified age and gender distributions in the U.S., Canada, Germany, and the U.K.

    Swiss Re has previously securitized mortality risk through the Vita Capital Ltd., Vita Capital II Ltd., Vita Capital III Ltd., and earlier takedowns of the Vita Capital IV Ltd. transaction.

    Vita Capital IV was created for the sole purpose of issuing one or more series of notes out of a mortality catastrophe shelf program. Standard & Poor’s has not assigned ratings to the shelf program.

    The series V noteholders will be at risk from an increase in age and gender-weighted mortality rates that exceeds a specified percentage of a predefined index (the mortality index value; MIV) in Canada and Germany. The series VI noteholders will be at risk from an increase in age and gender-weighted mortality rates that exceeds a specified percentage of the MIV in Canada, Germany, the U.K. and the U.S. The risk period for both series runs from Jan. 1, 2011, to Dec. 31, 2015.

    The MIV will be defined on a rolling two-year period, and the probability of a loss attaching and the magnitude of the loss in principal will depend on the extent to which the MIV for any country and measurement period (that is, two consecutive years) exceeds the attachment point for the notes. Index values corresponding to future measurement periods will be measured against the index value for 2010 for all four covered countries. Adjustments will be applied for changes in mortality over the risk period.

    At closing, Swiss Re will enter into a contract with the issuer using standard International Swaps and Derivatives Association (ISDA) wording. Under this contract, Swiss Re will make payments to the issuer in exchange for extreme mortality protection. The issuance proceeds are to be invested in collateral in the form of ‘AAA’ rated notes issued by the International Bank for Reconstruction and Development. The coupon on the notes will be paid from the payments made by Swiss Re under the ISDA contract and from investment earnings on the collateral held in trust.

    The ratings reflect:

    – Standard & Poor’s qualitative assessments of the potential event risk;

    – Our view of the modeled probability of default;

    – The diversification of the underlying mortality risk exposure in terms of geographic location, age, and gender; and

    – The application of Standard & Poor’s catastrophe bond criteria.

    Source : Standard & Poor’s

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    Brit Insurance announces the formation of a new, specialist team offering insurance to property investors as part of its UK business unit. The team will be led by Kevin Simmons, and will include a team of underwriters drawn from the Group’s existing operations in London and throughout the UK.

    With 30 years in the UK general insurance market, Kevin Simmons’s most recent role was Head of Real Estate at Zurich Insurance. His experience at senior level crosses service delivery, performance improvement and customer relations, as well as managing regional underwriting operations.

    Commenting on the new team, Ray Cox, Chief Executive Officer of Brit Insurance UK, said:

    “This is a significant area of the UK property insurance market and we see opportunities for profitable growth capitalising on our existing portfolio in this area and complementing our overall UK property book. Kevin has considerable experience in the property investor insurance market, with an impressive track record of creating and developing successful and profitable underwriting operations. Under his leadership, our team of property experts will be well-equipped to make a real mark in this specialist area.”

    Kevin Simmons will be joined by other Brit Insurance property specialists, including Andrew Jackson, UK Property & Packages portfolio manager, Amanda Doran, Property & Commercial Packages Underwriting Manager, and Andrew Tacey, a specialist underwriter. These key members of Brit Insurance’s Property Investors team all have extensive experience in this field.

    Kevin Simmons commented:

    “Property investors insurance is a significant market and one Brit Insurance is well-placed to serve, particularly with the expertise already on board and with its customer focussed approach. With the backing of an experienced team, I look forward to increasing our market share, creating a competitive range of solutions and making us a recognised leader in this business.”

    Property investors cover will be available, via brokers, throughout Brit Insurance’s network of regional offices.

    Source : Brit Insurance

     

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    Fitch Ratings has affirmed Legal & General Assurance Society Ltd’s Insurer Financial Strength (IFS) rating at ‘AA-‘. Fitch simultaneously affirmed Legal & General Group Plc’s (L&G) Long-term Issuer Default Rating (IDR) at ‘A’. The agency has also affirmed the senior unsecured debt issued by Legal & General Finance PLC and guaranteed by L&G at ‘A-‘ and L&G’s subordinated debt rating at ‘BBB’. The Outlooks on the Long-term IDRs and IFS rating are Stable. A full list of ratings actions is at the end of this release.

    The affirmations and Stable Outlook reflect L&G’s robust capital position, strong brand and franchise in the UK, its liquidity and operating cash generation. Capital adequacy on a Fitch basis is strong relative to its peers. Liquidity at the holding company level is good with short-term liquidity arrangements in place and a resilient dividend stream from the operating companies.

    L&G’s operating performance has been strong over the past two years. In 2010, the group reported IFRS net profit of GBP820m (GBP844m 2009). Leverage is high for the rating level on a Fitch basis at 35% and high relative compared to peers, although coverage in 2010 was strong at 12x (11x 2009).

    L&G is one of the top five largest providers of retail and institutional funds by funds under management (FUM) and is the second-largest UK life and pensions provider by net premium. The company has a widely diversified product range in its main market, the UK, including protection, savings and an asset management business with over GBP350bn assets under management.

    About a quarter of Legal & General’s cash generation comes from its annuity business with assets of GBP25bn. “With its leading position in annuities, L&G is well positioned to benefit from expansion in this market,” says Clara Hughes, Director in Fitch’s Insurance team. “Demand for annuities will increase, driven by employers looking to offload their defined benefit pension commitments and by the maturing of defined contribution pension savings, much of which must be annuitised. However, to write profitable business L&G will have to maintain its pricing discipline, possibly in the face of stiff competition.”

    There are a number of key risks to L&G’s rating offsetting the positive factors noted above. The group has high exposure to the credit markets through its large non-linked non-profit investment portfolio and shareholder funds. As at 31 December 2010, invested assets net of derivative liabilities were GBP33bn, including approximately GBP29bn invested in corporate bonds. A default reserve of GBP1.5bn has been set up against this portfolio. Net default experience was GBP1m in 2009 and 2010 combined, which is significantly below the reserving assumptions. The annuity book, which has liabilities of over GBP23bn, also carries risks of improvements in longevity expectations. Any significant deterioration in default experience, credit migration or improvements in longevity expectations could lead to a downgrade.

    In addition, damage to the group’s franchise, falling sales or margins, or a structural increase in leverage from the current level could also lead to a downgrade. An upgrade is unlikely in the near term, given the group’s concentration in the UK market and relatively high leverage.

    Source : Fitch Ratings

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    The Taiwanese financial regulator on Thursday  said a local conglomerate had met its conditional requirements to buy US  insurance giant AIG’s Taiwan unit, closing the $2.16 billion deal.

    The Ruen Chen consortium led by Ruentex, one of Taiwan’s biggest  conglomerates, will be allowed to acquire 97.57 percent of the shares  controlled by AIG in its Taiwan unit Nan Shan Life, Taiwan’s Financial  Supervisory Commission said in a statement.

    The Commission last month conditionally approved the deal but demanded the buyer meet some other requirements.

    Among them was an additional Tw$6 billion ($207.6 million) in a custodial  account, bringing the total amount of cash deposited in the account to Tw$30  billion, the Commission said.

    As a show of its long-term commitment to the insurer, Ruen Chen also agreed  to keep all of its shares in Nan Shan in a trust for 10 years, and placed 70 per cent of holders’ shares in Ruen Chen in a trust for 10 years, it said.

    Troubled AIG, short of cash to repay a US government bailout, announced the planned sale of Nan Shan to the consortium in January in its second bid to  find a buyer. Ruentex is a sprawling conglomerate with interests in sectors as diverse as  construction, textiles and finance.

    AIG sold Nan Shan Life to a consortium led by Hong Kong-based Primus  Financial Holdings for $2.15 billion in 2009, but the deal was rejected by the Taiwanese regulator last year.    Taipei said the Hong Kong group lacked the experience needed to manage an insurer and argued it had failed to provide a long-term management commitment,  claims rejected by the consortium.

    The rejection dealt a blow to AIG, once the world’s largest insurer, which  has been selling assets to pay back US government loans since its rescue from  collapse during the 2008 financial crisis.

    Taipei, July 14, 2011 (AFP)

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    More than 5.2 million (11 per cent) people have not reported a crime because they were scared it would drive away potential purchasers or renters when the incident appeared on an online police crime map (http://www.police.uk/), reveals new research from Direct Line.

    Of those not reporting crimes, 3.9 million (75 per cent) ignored anti-social behaviour such as drug dealing or vandalism for fear of demeaning the neighbourhood.  Almost half (45 per cent) of those not reporting crimes had seen vehicles stolen or vandalised near their homes.  Worryingly, serious aggravated crime is also going unreported; 11 per cent of those not reporting a crime witnessed, or was a victim of, a violent assault.  A further 16 per cent of those not reporting crimes were mugged, or witnessed someone being robbed on the street, near their home.

    Online police crime maps are playing an increasingly important role in property purchase and rental decisions.  Three quarters (74 per cent) of people would use a police online crime map to research a new home and would be deterred by high levels of reported crime.  A quarter (24 per cent) of people would not report a future crime if they felt it would impact their ability to sell or rent out their property.  A further 9 per cent of people would actively discourage a neighbour from reporting a crime if they felt it would impact their ability to move.

    Andrew Morrell, head of Direct Line Home Insurance, said: “It is extremely worrying that we may see crimes go unreported.  With a struggling housing market, home owners are concerned about doing anything that could prevent a potential property sale or rental and that can include turning a blind eye if the incident could appear later on a police crime map.”

    “Householders who do not report a crime may struggle to secure payment from their insurer for any losses incurred, as they will not have a crime number to reference an incident occurred.”

    Along with the traumatic emotional impact of becoming a victim of crime, householders failing to report crimes to the police also suffered a financial impact as just 12 per cent recouped the financial cost of an incident from their insurer.  Without a crime number many homeowners were unwilling, or unable, to secure reimbursement for any financial costs sustained.

    Of all the regions, residents of London (14 per cent) were most concerned about the extent to which reporting a crime could impact on their ability to sell and rent their homes.  Residents of the South West were the least concerned about the issue.

    Table one:  Regional map of unreported crimes

    Region Percentage of residents that have not reported a crime for fear of it showing on a police crime map and affecting house sale or rental
    London 14 per cent
    Yorkshire and Humber 13 per cent
    North West 12 per cent
    West Midlands 12 per cent
    Northern Ireland 11 per cent
    Scotland 11 per cent
    South East 11 per cent
    Wales 11 per cent
    East 8 per cent
    East Midlands 8 per cent
    North East 8 per cent
    South West 7 per cent

    Source : Direct Line

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    BIBA has won the Social Initiative award at the Trade Association Forum Best Practice Awards.

    The judges were particularly impressed with BIBA’s signposting initiative which helps customers find insurance from a broker, and has gained support from HM Treasury.

    The judging panel said: “BIBA have clearly thought long and hard about the problems traditionally associated with insurance in terms of age or medical condition and recognised an opportunity which they have maximised both for their industry and consumers.

    “The initiative has had a huge impact, helping many vulnerable consumers struggling to obtain insurance protection and the introduction of a Find A Broker helpline and website has ensured that this will continue.”

    BIBA Chief Executive, Eric Galbraith, said: “Many customers and businesses do not know where to find advice on suitable insurance protection. BIBA’s Find a Broker helpline and website are excellent examples of how BIBA is achieving success on behalf of members.  This award is a testament to the hard work of the BIBA team and we are delighted to receive recognition from our trade association peers.”

    The awards, hosted by the Trade Association Forum, received more than 100 entries and were presented at a ceremony at Plaisterers’ Hall, on 7July.

    Source : BIBA

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    James Carrick, LGIM economist believes there are currently different dynamics at work with in the major European economies. It would seem that while Northern Europe appears set for a self-reinforcing recovery, countries in the south (example Spain or Italy) could be stuck in a self sustaining slump.

    “While we know a lot about the troubles in the euro area’s ‘periphery’, one of the founding ‘core’ members, Italy, now also appears at risk. The combination of fiscal austerity, tight credit conditions and relatively poor corporate finances means that Italy looks vulnerable to a vicious circle of cost cuts ahead.” James explained.

    By contrast, LGIM’s outlook for Germany and France looks brighter. “Germany remains the growth engine of the region and appears to be in a self-reinforcing recovery, with unemployment the lowest since reunification in 1991 and the availability of credit now almost back to pre-crisis levels.” James said France also appeared to be on the road to recovery, albeit due to different reasons, “France is benefiting from a domestic credit boom rather than strong competitiveness. It therefore seems somewhat more vulnerable than Germany to a renewed European banking crisis”.

    James discussed the dire situation within Spain, where unemployment is at 21.3%, taxes are rising, consumer spending is weak and house prices are in decline forcing banks to tighten lending standards.

    It was one of the European Union’s founding members, however, which James flagged as the greatest concern for the euro area. “While government borrowing in Italy is not as high as it is France, its debt stock is higher”. James said that Italy chose to tighten fiscal policy to avoid a financial crisis but real government spending fell in 2010 and this has hurt the labour market. Moreover, James argued that corporate interest gearing in Italy is higher now than it was following the dot.com bust and the banking sector remains very weak. “We believe business investment will remain subdued and this, coupled with government spending cuts, high unemployment and weak consumer spending, means that Italy looks very vulnerable to further economic shocks.” James said.

    Source : LG

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    Fitch Ratings has affirmed Assicurazioni Generali SpA’s (Generali) and its core subsidiaries’ Insurer Financial Strength (IFS) ratings at ‘AA-‘ and Long-term Issuer Default Ratings (IDR) at ‘A+’. The Outlooks are Stable. Fitch has also affirmed Generali’s hybrid subordinated notes at ‘A-‘ and senior notes at ‘A+’. A full list of rating actions is shown below.

    The affirmations reflect Generali’s strong operating performance in 2010 as well as Fitch’s expectations that the company will continue to deliver strong underwriting margins in its main markets Italy, France and Germany, and extract value from its presence in Central and Eastern Europe (CEE) region. The ratings are underpinned by the group’s multi-channel/multi-brand approach and geographical diversification, its underwriting discipline, prudent reserve practices and capitalisation which, however, Fitch views as just adequate for IFS ratings in the ‘AA’ range.

    Offsetting these positives are the company’s significant investment leverage; relatively high gross debt leverage and weak interest coverage; and a challenging operating and investment environment in Italy, as reflected by prospects for sluggish economic growth and capital markets volatility.

    While Fitch acknowledges that capital adequacy has improved from 2008 levels, the agency believes it remains just adequate for the current ratings level. The significant amount of goodwill and intangibles negatively affects the quality of capital. However, Fitch notes positively that Generali’s capitalisation was more resilient than its peers through the financial crisis and financial flexibility remains strong.

    Fitch views Generali’s financial leverage as relatively high but acceptable for the current rating level. In addition, interest coverage on debt servicing capabilities, as calculated by Fitch, despite displaying a positive trend, remains below historical levels and is considered weak but acceptable for the rating level. Generali’s investment leverage is significant, resulting in exposure to investment market fluctuations, particularly given the group’s current capitalisation.

    Fitch views Generali’s earnings profile as strong and helped by geographical diversification, and believes the group is becoming increasingly efficient. Generali has demonstrated resilience to volatile and adverse trading conditions in its main markets in the property and casualty (P&C) business. In Italy in particular, Generali, as market leader, can leverage its strong pricing power and has done so in recent years through increased motor tariffs.

    Life results in 2010 were negatively affected by the extraordinary widening of government bond spreads in many European countries where Generali operates, as well as lower swap interest rates and higher interest rate volatilities. This trend is continuing over 2011.

    Generali is exposed to euro zone sovereign credit risk. Fitch believes that the company would be able to withstand deterioration in the credit quality of certain sovereigns or sharp changes in market values for the securities of these sovereigns, However, should the financial dislocation spread from Greece, Portugal and Ireland to other European markets and the risks of contagion amplify, leading to severe and broad impact across the European markets, with significant credit spread widening and sharp falls in market values, then there could be a risk of negative rating actions for Generali.

    Other rating drivers that could result in a downgrade include failure to maintain its risk-based capitalisation, as calculated by Fitch, at the current level or a deterioration in the level of the consolidated Solvency 1 regulatory capital position (including unrealised gains on real estate) below 130% for a prolonged period of time; deterioration in non-life results as evidenced by an increase in the reported combined ratio to over 100% for a number of quarters; or a structural increase in financial leverage from current levels (33% on a gross basis).

    Rating drivers that could trigger an upgrade are group capitalisation at higher levels, steady or reducing debt leverage and stronger interest coverage. However, given Generali’s high ratings and the uncertainty over the future macroeconomic implications of the euro zone sovereign credit risk, Fitch does not anticipate an upgrade in the near to intermediate term.

    Generali is the parent company and main operating entity of one of Europe’s largest insurance groups. Total group-wide life sales in 2010 were EUR51.1bn. It holds a dominant position in Italy through its ownership of INA Assitalia and Alleanza Toro. Generali is also well established in Germany (through Generali Deutschland), France (Generali Iard and Generali Vie), Spain (Generali Espana), Switzerland (BSI and Generali Switzerland) and central and eastern Europe through its joint venture, Generali PPF Holding.

    Source : Fitch Ratngs

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