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Fitch Ratings has affirmed MutRe S.A.’s Insurer Financial Strength (IFS) rating at ‘A-‘. The Outlook is Stable.

MutRe’s rating continues to reflect its healthy solvency and financial flexibility provided by its committed shareholders base. The rating also takes into account the focused and consistent strategy implemented by its management team, its solid business position in the French accident and health reinsurance market and moderate profitability. The rating remains constrained by the company’s modest size and its exposure to some operational risks and potential pandemic outbreaks not fully covered by the company’s retrocession programme.

The company’s financial profile improved in 2010, partly due to a lower amount of risk assumed. However, the company reported a deteriorated net combined ratio of 104% (97% in 2009) and a Solvency I ratio of 194% (217% in 2009).

Key rating drivers that could lead to an upgrade include increased profitability with the combined ratio sustainably maintained below 100%. Conversely, deterioration in profitability or capital adequacy significantly below the current level could result in a downgrade.

Fitch expects MutRe’s profitability to remain moderate with a net combined ratio around 100% and solvency to stabilise around the current level.

MutRe is a French reinsurance company with shareholder’s funds of EUR119m and gross written premiums of EUR297m in 2010. Major business lines are health (53%), protection (mostly death and disability, 35%) and long-term care reinsurance (10%). MutRe predominantly offers proportional reinsurance treaties to more than 50 French primary insurers, mostly mutual organisations. The company currently employs 24 staff.

Source : Fitch Press Release

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Malcolm Randles, who issues cyber insurance policies, explained that Canadian brokers are watching social media trends closely, and are working to create coverage for the bad things that might happen off of a Twitter post or Facebook status.

“It’s very new in Canada. Brokers have caught on to what their colleagues are doing in the U.S. and have been very strong in promoting this class of business,” Randles said to CBC News.

” ‘My boss is a big fat cow,’ is a very common tweet,” he said. “But people often stupidly then say where they work and who their boss is in the tweet.”

For example, world renowned fashion guru Kenneth Cole enraged scores of people after tweeting during the conflict in Egypt that “Millions are in an uproar in Cairo. Rumour is they heard our new spring collection is now available online.”

Source : Digital Journal

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The cost associated with buying a home in the UK is typically 14% lower than renting a property, according to new research by Halifax. The average monthly costs associated with buying1 a three bedroom house in the UK stood at £608 in March 2011; 14% (£98) lower than the average monthly rent paid2 on the same property type of £706. Three years ago, the average cost of buying was 43% more than the typical rent paid.

The significant fall in the monthly cost associated with buying compared to renting has been driven by the decline in the average mortgage rate since 2008. The mortgage rate3 for a new borrower has fallen to an average of 3.59% from 5.82% in March 2008, helping to reduce the average monthly mortgage payment by 39%.

Buying costs currently account for a smaller proportion of average UK disposable income4 (27%) than rental payments (31%). In 2008, buying costs accounted for a greater proportion of average disposable income than rent (56% against 39%).

Despite the improvement in the affordability of buying relative to renting, the tightening in lending criteria since 2007 has meant that many potential buyers have not attempted to enter the market. Nonetheless, market data5 shows that the average deposit paid as a percentage of the purchase price has been broadly stable since early in 2009 at around 27%, following a marked rise in 2008.

Transaction costs including stamp duty and the fees associated with home purchase also add to the overall costs of buying a property. The average stamp duty bill for a three bedroom house was £1,639 in March 2011 (although first-time buyers are exempt on purchases below £250,000); 18% (£358) lower than the average in March 2008.

Switching from buying to renting could release equity worth £55,000

Despite the advantages of buying versus renting, existing mortgage holders looking to switch to renting could enjoy the financial benefits of releasing the remaining equity in their property. Selling up your property and renting instead would provide an average equity of approximately £55,000. Investing this in a fixed rate bond would generate a monthly income of £114 to use to offset rental costs.

Suren Thiru, housing economist at Halifax, commented:

“The typical monthly mortgage payment has declined by over a third since 2008 as a consequence of falling mortgage rates and lower house prices. As such, the fall in the cost of buying a property compared to the average rent paid by tenants has been significant. Such a marked decline in mortgage costs has improved affordability for those able to enter the market as well as helping to ease the pressure on existing homeowners’ disposable income.

Although the current trade-off between buying and renting is expected to narrow when interest rates start to rise again, the long-term benefits associated with investing in bricks and mortar are likely to ensure that buying will continue to be viewed favourably by many.”

OTHER KEY FINDINGS:

Buying is now cheaper than renting in most regions

In March 2011, buying a house was more affordable than renting in ten of the twelve UK regions. In contrast, buying was more expensive than renting in all regions in March 2008.

Buying is currently most cost-effective compared to renting in London with the average borrower taking out a new mortgage to finance house purchase in the capital paying 12% less per month than the typical private tenant. Despite this, Londoners still pay monthly buying costs that are 68% above the UK average. Northern Ireland and Wales are the only regions where renting remains cheaper than buying.

Table 1 – UK average monthly mortgage and rental payments*

Average monthly buying costs Average monthly rental costs % difference
Mar-08 £1,060 £741 43%
Mar-09 £741 £729 2%
Mar-10 £616 £663 -7%
Mar-11 £608 £706 -14%

Sources: Halifax, Birmingham Midshires and ONS

*Weighted average of regional data using housing tenure figures.

nb. Base rate changes impacted difference: March 2008 base rate was 5.25, falling to 0.50 in March 2009

Table 2 – Average monthly mortgage and rental payments by region, March 2011

Average monthly buying costs Average monthly rental costs % difference
North £442 £462 -4%
Yorkshire and the Humber £456 £475 -4%
North West £484 £517 -7%
East Midlands £475 £480 -1%
West Midlands £526 £530 -1%
East Anglia £576 £580 -1%
Wales £470 £463 1%
South West £681 £706 -4%
South East £801 £835 -4%
Greater London £1,024 £1,168 -12%
Northern Ireland £425 £416 2%
Scotland £514 £531 -3%

Sources: Halifax, Birmingham Midshires and ONS

 

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British opposition Labour leader Ed Miliband  is to have surgery on his nose, his spokesman said Friday, but denied reports  that the operation was to improve his nasal-sounding voice.

Miliband, 41, suffers from sleep apnoea, a condition which interrupts  breathing during sleep, exacerbated by a “deviated” septum, his spokesman said.

He will have surgery on the National Health Service (NHS) in July, when the  House of Commons is on its summer break.

“Ed Miliband has been diagnosed with sleep apnoea, made worse by a deviated  septum. On medical advice he is having a routine operation to correct the  deviated septum at the end of July with the NHS,” the spokesman said.    The announcement followed a report in the Daily Mirror that Miliband was  having the surgery to make him sound less bunged-up, “and help turn him into  an election winner”.

Miliband was elected Labour leader in September, four months after the  party was routed in general elections which swept Prime Minister David Cameron  to power as head of a Conservative-Liberal Democrat coalition.

The party is hoping for a good result in local elections being held across  Britain on May 5. Elections for the devolved assemblies in Scotland, Northern  Ireland and Wales also take place on that day along with a referendum on  changing Britain’s voting system, which Miliband supports.

London, April 22, 2011 (AFP)

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She’s been a favourite with young girls for decades. But a life-sized Barbie is being used to demonstrate just how unhealthy the doll’s proportions would be on a real woman.

The mannequin, which stands 5ft 9in (175.26cm) tall, has a 39in (99.06cm) bust, a tiny 18in (45.72cm)waist and 33in (83.82cm) hips. Even her feet would be disproportionate, at a tiny U.S. size 3.

Galia Slayen, who made the model, revealed that a real woman with the same dimensions would weigh just 110lb (49.9kg), giving her a BMI of 16.24 – a figure associated with eating disorders.

Miss Slayen, a former anorexia sufferer, knows the implications of being underweight all too well, and built the doll as part of her recovery and as a means of raising awareness about the dangers of eating disorders.

The giant Barbie, made from chicken wire and papier mache, is now on show at Hamilton College, Oregon, where Miss Slayen is a student, as part of its National Eating Disorder Awareness Week (NEDAW).

She told CBS News: ‘The goal of Barbie is to get just get people’s attention. [Eating disorders are] very prevalent and not talked about.

‘It’s sensationalised in the media every time a star loses weight, but this is a very internal struggle.’

Miss Slayen, who played with Barbie dolls as a child said that her own weight problems began when she was 15.

She revealed that a troubled relationship with her parents and pressure from her peers drove her to excessive calorie-counting and exercise – something that became an obsession.

She explained: ‘I was living on my own and trying to figure out how I was going to survive. My life was completely out of control and it was the one thing I was able to control – the hours at the gym, the calories I was in-taking. It’s a means to control your life.’

Dressing the life-sized Barbie for her debut was a painful reminder for Miss Slayen of how she once looked to the world.

‘I dressed Barbie in my old clothes,’ she wrote on the Huffington Post. ‘The skirt she still has on today is a reminder of who I once was. That skirt, a size double zero, used to slip off my waist when I was struggling with anorexia.

‘I put it on Barbie to serve as a reminder that the way Barbie looks, the way I once looked, is not healthy and is not “normal,” whatever normal might mean.’

Dietitian Marisa Sherry told CBS News that the life-sized Barbie’s dimensions would be of serious concern on a real woman.

‘A BMI of under 17 is considered underweight or anorexic,’ she said. ‘That puts you at high risk for negative side effects like osteoporosis, amenorrhea (not being able to menstruate) and low heart rate.’

Miss Slayen now raises funds for the National Eating Disorder Association, and has already generated over $10,000 for the cause.

She is now urging insurance companies and the government to offer some support to the 10million Americans currently suffering from eating disorders.

‘A lot of insurance companies don’t cover eating disorders,’ she said. ‘They don’t see this is not a choice.’

Source : Daily Mail

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Niche insurance specialist Voyager has published the top ten reasons why couples claim on their wedding insurance on or prior to their big day.

Unlike the era in which previous royal weddings took place, when damage to bridal or wedding attire was the most common claim, today bankruptcy of suppliers tops the list.

Based on the number rather than the value of Voyager Dreamsaver wedding insurance claims, the list is as follows:

– Bankruptcy/liquidation of dress supplier

– Bankruptcy/liquidation of caterers

– Bankruptcy/liquidation of venue

– Bankruptcy/liquidation of other wedding suppliers

– Loss of wedding photography

– Damage to bridal attire

– Adverse weather preventing majority of guests and couple reaching the venue

– Death/injury of family member

– Death/Injury of bride or groom

– Marquee damage

Voyager director Jonathan Buttery said: “The list of most common reasons why wedding claims are made very much reflects the economic times we are in. This explains why wedding insurance has a higher profile and more couples are opting to purchase it in order to financially protect their big day.”

He added: “While bankruptcy of suppliers is highly unlikely to disrupt a royal wedding, everyone else planning theirs should carefully check policy wordings, as cheaper policies will not cover claims for financial failure of suppliers, rings or wedding attire among other things.”

Source : Voyager Press Release

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A five-year-old Cambodian girl has  become the fifth person to die from bird flu in the country this year,  officials said on Thursday.

The child, from southeastern Prey Veng province, died on April 16, the  health ministry and the World Health Organisation said in a joint statement.  Tests confirmed she had contracted H5N1 avian influenza.

The girl is the 15th person in Cambodia known to have become infected with  the H5N1 virus and the 13th to die from complications of the disease since  2003, according to the statement.

“Compared to last year, we have seen more H5N1 cases this year and children  appear to be most vulnerable. I urge parents and guardians to keep children  away from sick or dead poultry,” said Cambodian Health Minister Mam Bun Heng.    All five of Cambodia’s bird flu cases since January have been fatal. Four  of the victims were children.

The H5N1 strain of avian influenza has killed 320 people worldwide since  2003, the statement said.

Phnom Penh, April 21, 2011 (AFP)

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Deputy Prime Minister Nick Clegg and Minister for Pensions Steve Webb visited the Friends Life Centre in Bristol, on a fact-finding tour about pensions and long term savings.

During the visit they met with Friends Life pensions experts including group strategy director Nathan Moss, Martin Palmer, head of corporate pensions marketing and Simon Butler, policy and proposition manager and engaged in a round-table discussion about promoting saving to a wider audience across the UK. They also spent some time with members of Friends Life’s pensions call centre team, finding out about the sort of issues being raised by pensions customers.

During the debate Pensions Minister Steve Webb drew an interesting analogy with the forthcoming London Olympics, noting that many people can be classed as ‘bronze’ savers today and the challenge is to turn them into ‘silver’ or ‘gold’ savers.

Steve Webb also commented that setting a long-term savings goal of a pension pot with a monetary value of £100,000 was too daunting for many people and that an alternative approach could be to show people the age at which their pension pot would buy them a meaningful annuity. A challenge would be help people retire earlier.

Deputy Prime Minister Nick Clegg noted that huge intergenerational issues facing long term savings should not be determined by short term politics, and such a significant social issue needs to be de-politicised.

Martin Palmer, head of corporate pensions marketing at Friends Life, said:
“This was a great opportunity for Friends Life to share our thoughts on the future of long term savings with two senior Government ministers. We’re delighted that they chose Friends Life to host their visit in the south west and that we were able to debate current challenges within the industry.”

Source : Friends Life Press Release

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Munich Re warned Wednesday it would post a loss for the first quarter because  of Japan’s massive earthquake and tsunami in March.

Munich Re said natural catastrophes, mainly the devastating Japanese quake,  will cost it 2.7 billion euros ($3.91 billion) in the first quarter, up on its  previous estimate of 2.5 billion euros.

“Because of the damage caused by these natural disasters, first quarter  results will clearly be negative,” company head Nikolaus von Bomhard said in a  statement.

Last month, the company had warned that the deadly Christchurch earthquake  in New Zealand on February 22 would cost it about $1.0 billion.

Munich Re stuck to its 2011 net profit target of around 2.4 billion euros  at that time but warned that “it will only be able to achieve this target if  random major losses remain below the average level to be expected in the  further course of the year.”

The company will announce its first quarter results on May 9.

Frankfurt, April 20, 2011 (AFP)

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An expectant mother’s diet during  pregnancy can alter her baby’s DNA in the womb, increasing its risk of  obesity, heart disease and diabetes in later life, an international study has  found.

Researchers said the study provided the first scientific evidence linking  pregnant women’s diet to childhood obesity, with major implications for public  health.

“This a a major breakthrough because for the first time it gives us the  potential to work out the optimal diet a mother should eat,” Professor Peter  Gluckman from Auckland University’s Liggins Institute told AFP.

“That’s likely to vary slightly from mother to mother, but it could be a  major tool in addressing the obesity epidemic.”

The study, conducted by scientists in Britain, New Zealand and Singapore,  showed that what a mother ate during pregnancy could change the function of  her child’s DNA through a process called epigenetic change.

Children with a high degree of epigenetic change were more likely to  develop a metabolism that “lays down more fat” and become obese, researchers  found.

Such children were around three kilograms (6.6 pounds) heavier than their  peers by the time they were aged six to nine, Gluckman said.

“That’s a hell of a lot of extra weight at that age,” he said, adding that  the extra fat was likely to be carried into adulthood, raising the chances of  developing diabetes and heart disease.

The researchers used umbilical cord tissue to measure the rate of  epigenetic change in 300 babies, then examined whether it was linked to the  children’s weight when they were aged six to nine.

“The correlation was very strong, we didn’t believe it at first, so we  replicated it again and again,” Gluckman said.

The study found the effect was not linked to either the mother or the  baby’s weight at birth, meaning a slim woman could deliver a small baby which  still went on to became obese because of changes triggered by diet in the womb.

Gluckman said the rate of epigenetic change was possibly linked to a low  carbohydrate diet in the first three months of pregnancy but it was too early  to draw a definitive conclusion and further studies were needed.    He said one theory was that an embryo fed a diet containing few  carbohydrates — which provide the body with energy — assumed it would be  born into a carbohydrate-poor environment and altered its metabolism  accordingly.

This meant it stored more fat, which could be used as fuel when food was  scarce.

Gluckman said the study, which will be published in the journal Diabetes  next week, confirmed long-held suspicions that poor prenatal nutrition could  have a major impact on adult heath.

This meant health officials battling soaring obesity rates should look at  policies designed to improve the health of expectant mothers, rather than  simply focusing on trying to help overweight adults, he said.

“It provides the most compelling argument yet to give greater weight to  improving maternal and infant health as a means of reducing the burden of  chronic disease.”

Wellington, April 19, 2011 (AFP)

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Matthew Bennett, Head of International Equities at NFU Mutual, reviews the markets and economic announcements for the week commencing 11th April 2011.

Market summary

After three successive weeks of gains markets lost ground last week.

The FTSE 100 index fell 1.0% to end the week back below the psychologically important 6,000 mark at 5,996, while the mid-cap FTSE 250 decreased by 0.4%.

Inflation falls but remains a concern

A record monthly fall in the price of food and non-alcoholic beverages meant UK Consumer Price Inflation (CPI) unexpectedly fell to 4% in March (from 4.4% in February). Retail Price Inflation (which includes mortgage interest payments) fell to 5.3% from 5.5%.

The surprise decline will have pleased policy makers as it reduces the pressure on the Bank of England to raise the base rate at a time when the UK economic recovery remains fragile. However CPI is still running at twice its 2% target and on the international front inflationary pressures continue to mount.

– US CPI was higher than expected at 2.7%

– Inflation figures for the eurozone were revised upwards

– Indian CPI ran at nearly 9% in March

– Chinese CPI was higher than expected at 5.4%, prompting Chinese authorities to introduce price controls on basic consumer goods.

Against this backdrop assets such as gold which are traditionally seen as inflation hedges performed well last week. The price of gold reached a new record high at $1,483 per troy ounce while silver traded at thirty one-year highs.

Economic and stock market update

Markets fell last week after weaker commodity prices and disappointing retail sales numbers led the FTSE 100 to its biggest daily decline in a month on Tuesday.

The British Retail Consortium reported like-for-like UK Retail sales tumbled 3.5% in March. It was the largest fall in six years and casts doubts over the strength of the UK consumer in light of the Government cut-backs needed to tackle the budget deficit.

There was better news though from the Office for National Statistics which reported unemployment had declined by 17,000 in the three months to the end of February. The unemployment rate fell to 7.8%. UK jobless claims however registered a surprise increase in March thanks in part to new benefit rules which meant more people were in the labour market.

China’s economy continues to power on. Chinese GDP expanded by 9.7% in the first quarter of 2011 and although this was slightly down on the previous quarter’s 9.8%, it was still above expectations.

The Independent Commission on Banking’s interim report was released last Monday and most banks breathed a sigh of relief as it didn’t contain anything that would significantly impact their earnings. Lloyds Banking Group however criticised a recommendation that it should sell in excess of 600 branches.

In other company news chip designer ARM Holdings received a boost after a broker reiterated their buy rating on the supplier of chips to most smart phones and tablets while on Wall Street US investment bank JP Morgan announced record profits.

The week ahead

The week ahead sees the US quarter one company earnings season get into full swing. This will provide investors with a barometer of how earnings are going and the outlook statements will be very important in setting near term market direction.

In the UK trading volumes are likely to be thin due to the Easter holidays. The minutes from this month’s Bank of England Monetary Policy Committee meeting however are released on Wednesday while the retail sector will remain in the spotlight as Tesco announces its preliminary results and the Office for National Statistics publish their retail sales figures for March.

Source : NFU Mutual

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Aon Benfield, the global reinsurance intermediary and capital advisor of Aon Corporation, today launches the latest edition of its Aon Benfield Aggregate (ABA) report, which analyses the year end 2010 financial position of the world’s leading reinsurers and examines how 2011 catastrophe losses may affect their capital positions.

Aon Benfield Analytics estimates that total Global Reinsurer Capital reached an all-time high of USD470 billion at December 31, 2010 – a 17% increase over the 2009 period.

The latest study compiled by the firm’s Market Analysis unit found that the ABA group of 28 leading reinsurers reported capital totaling USD248 billion at year end 2010 – an increase of 18% or USD38 billion from the end of 2009.

The main contributors to growth were USD22.5 billion of new capital raised by National Indemnity (to part-fund Berkshire Hathaway’s railroad acquisition), USD23.8 billion of net income, and USD10.0 billion of unrealized investment gains. Increased dividends of USD7.4 billion and share buy-backs of USD10.2 billion provided a partial offset.

Across the ABA as a whole, return on equity declined from 11.7% in 2009 to 10.4% in 2010. Catastrophe losses and reduced investment income were countered by sharply increased capital gains and higher prior year reserve releases.

Further key findings of the ABA include:

– Gross property and casualty premiums written were flat at USD12.4 billion, with the impact of weakening pricing offset by positive effects related to reinstatements and acquisitions;

– The combined ratio rose by 5.7 percentage points to 95.3%, driven by disclosed catastrophe losses equivalent to 9.1% of net premium earned;

– Non-life underwriting profit fell by USD6.0 billion to USD4.8 billion, including a contribution of USD5.1 billion from prior year reserves.

Catastrophic loss activity continued to make the news during the first quarter of 2011. Reported loss estimates issued by ABA companies currently total USD12.4 billion and are shown relative to constituent capital in the chart below. Aon Benfield believes the losses to date fall within expected annual income and represent an earnings event rather than a capital event for the reinsurance industry.

Mike Van Slooten, head of Aon Benfield’s International Market Analysis team, said: “The ABA companies performed well in 2010 despite a number of catastrophe losses. Aggregate capital was at record levels at year-end, leaving the sector well-positioned to manage the events that have taken place in the first quarter of 2011.”

Source : Aon Benfield Press Release

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Aviva Canada, provider of home, auto, leisure and business insurance, announced the launch of its new mobile website. The new Aviva Canada mobile website can be accessed by visiting avivacanada.com from any browser-enabled smartphone and offers consumers easy access to important information from anywhere they receive phone coverage.

“Our expansion allows the growing number of Canadians who use smartphones and other mobile devices greater access to Aviva Canada’s services,” explained Debra Ambrose, Senior Vice President of National Sales and Marketing at Aviva Canada.” The website provides our brokers with another value add that they can discuss with their customers.”

Key benefits of the new mobile website include easy and mobile access to:

– Finding a local auto service station or contractor

– The ability to instantly call Aviva’s claims reporting line to start the claims process

– Searching for a local insurance broker

“We’ve been available to our customers 24/7 for years, but consumers can now more easily access insurance information and assistance from Aviva whenever – and wherever – they need it,” continued Ambrose.

To ensure a smooth experience for all consumers, the new website is compatible with all browser-enabled smartphones, not just iPhones and Blackberries.

Source : Aviva Press Release

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One in three people would sacrifice at least 10% of their income to support their parents in retirement, research from Aviva reveals today. This is roughly double the amount that savers in the UK are currently investing in their company pension arrangements on average (5% of gross salary).

The study also shows that it is the younger generation who feel the greatest sense of financial responsibility to their parents, with all under-21s questioned prepared to give up a proportion of their income for older family generations, if they could afford to do so.

However, while nearly two thirds of UK adults (64%) would be prepared to financially support parents and grandparents struggling to make ends meet, one in three (33%) are actually unable to, due to their own financial pressures.

The under-21s are more likely to sacrifice a higher proportion of their income for their parents than any other age group, with nearly one in five (19%) stating they would donate more than a quarter of their income to help mum and dad cope.

Highlighting a gulf between those starting out in their working lives and those approaching retirement, over 40% of under-21s said they would sacrifice at least 10% of their income to help their parents, compared to fewer than 5% of 61-65 year-olds.

However, younger people are the least happy to support retirees more generally through tax and national insurance contributions. Nearly half (44%) of under-21s believe the system of paying for state pensions is unfair as young people today have to pay more and will have more debt; while 34% believe the system is unfair as today’s workers won’t receive the same type of good deal when they come to retire.

High (as well as low) earners unable to support parents financially

Unsurprisingly, the largest proportion of people of all ages who cannot afford to help their parents financially are those on the lowest wages: 50% of people earning up to £15,000, and 28% earning between £15001-25,000, cannot offer any support. Yet higher earners too don’t feel able to support struggling parents, with around 7% of people earning upwards of £85,000 claiming they cannot afford to sacrifice any of their earnings.

The research also reveals that the highest proportion of people (15%) who feel able to sacrifice more than a quarter of their income to their parents are those on more modest incomes between £35,000 and £45,000.

Concerns of those about to enter retirement

Although most people would be willing to help out if they could, significantly 18% of 61-65 year-olds don’t think it’s their responsibility to financially support their parents, perhaps indicative of the concerns this age group has about the cost of living and managing finances as they approach their own retirement years.

Clive Bolton, ‘at retirement’ director at Aviva comments: “There is quite a contradiction in younger people’s financial attitudes towards today’s retirees. They appear to be particularly generous towards their own families, but more reluctant to support the state as a whole.

“Interestingly, our research shows that family philanthropy is also generally higher amongst those on more modest incomes. And those who earn more or who have their own retirement in their sights are less able or willing to help out as they struggle with their own finances.

“We know from Aviva’s Real Retirement Report series that many over 55s are struggling to clear long-term debts before retirement and that that there is a significant pensions gap in the UK. In this period of change, as we work towards a more sustainable way of funding retirement, any solution needs to make sense to all generations – not just those approaching retirement – in order for it to be perceived as fair and to get the support it requires.”

Source : Aviva Press Release

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We’ve told you everything that we include in our car insurance policy, but we want you to have the confidence to know that there’s no “small print” and that we’ll pay out when it comes to the crunch.

Below are some examples of what is excluded under the policy. For full details, please consult the policy wording.

  1. Any accident, injury, loss or damage while any vehicle that is insured under this policy is being:
    1. used otherwise than for the purposes described under the “Description of use” section of your certificate of motor insurance.
    2. driven by, or is in the charge of any person for the purposes of being driven who;
      1. is not described under the section of your certificate of motor insurance headed “Permitted drivers”,
      2. does not have a valid and current licence to drive your car,
      3. is not complying with the terms and conditions of the licence,
      4. does not have the appropriate licence for the type of vehicle,
      5. We will not withdraw this cover,
        1. While your car is in the custody or control of;
          • a member of the motor trade for the purposes of maintenance or repair, or
          • an employee of a hotel or restaurant or car parking service.
        2. If the injury, loss or damage was caused as a result of the theft of your car.
        3. By reason of the person driving not having a driving licence, if you had no knowledge of such deficiency.
  2. Any liability you have accepted in an agreement which you would not have had if that agreement did not exist.
  3. Loss or damage of, or damage to, any property or associated loss or expense, or any subsequent loss, or
  4. Any legal liability that is directly or indirectly caused by, contributed to by or arising from:
    1. Ionising radiations or contamination by radioactivity from any irradiated nuclear fuel or from any nuclear waste from the combustion of nuclear fuel.
    2. The radioactive, toxic, explosive or other hazardous properties of any explosive nuclear assembly or nuclear component thereof.
  5. Any consequence whatsoever which is the direct or indirect result of any of the following, or anything connected with any of the following, whether or not such consequence has been contributed to by any other cause or event:
    1. war, invasion, act of foreign enemy, hostilities or a warlike operation or operations ( whether war be declared or not), civil war, rebellion, revolution, insurrection, civil commotion assuming the proportions of or amounting to an uprising , military or usurped power
    2. any action taken in controlling, preventing, suppressing or in any way relating to (a) above except to the extent that it is necessary to meet the requirements of the Road Traffic Acts.
  6. Any accident, injury, loss or damage if your car is registered outside Great Britain, Northern Ireland, the Isle of Man or the Channel Islands.

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Electrical Contractors’ Insurance Services (ECIS) has announced an affinity partnership with the Electrical Contractors Association of Scotland, known as SELECT.

The partnership will allow ECIS to offer a range of value-add products and services to SELECT members, which will be marketed under the SELECT branding.

ECIS is uniquely positioned to provide this service within the electrical contractors’ sector because it is owned by a trade association and already provides a range of value added products and services designed to benefit members.

The new partnership follows the formation of a new affinity group division within ECInsurance announced in February 2011.

Alastair Torbet, group sales and marketing director for ECInsurance, said: “Our partnership with SELECT is a significant step forward not only because it reflects our national expansion, but it allows us to serve a whole new group of professionals. I am delighted to be working with SELECT to ensure the best insurance and risk management services for its members.”

Newell McGuiness, managing director of SELECT, said: “We are delighted with this new deal and look forward to working with ECIS. I know from experience that electrical contractors value support from companies who truly understand their work. To be able to offer ECIS expertise under the branding of SELECT will be an advantage to our organisation and its members.”

Source : ECIS Press Release

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Kenya’s low income earners now have a wider chance of buying affordable insurance services following an investment by a private equity fund into a local insurer with the money expected to be used for research and develop of new micro insurance products.

LeapFrog Investments, a private equity fund formed in 2008 announced Thursday that it has invested 14 million U.S. dollars in Apollo Investment Ltd (AIL), an East African insurance group.

The money will exclusively be dedicated to developing insurance products for low income earners as per the investment policy of LeapFrog.

Kenya’s low income earners are unable to afford insurance services because of their high cost, despite the fact that they face challenges in financing their health, coping with life after death of the breadwinner or recovering financially in case of a disaster like fire burning their businesses or houses.

As a result, penetration of insurance in Kenya has remained low, estimated at 2.86 of the entries 40 million population based on statistics from the Association of Kenya Insurers (AKI).

“The new money will be of great help in helping us to finance development of new micro insurance products to meet their rising demand.

“We are now taking the next leap,” said Ashok Shah, a member of the board of directors of AIL and CEO of its affiliate APA Insurance.

“The company already offers weather – indexed micro insurance products for crops and also livestock.

“Investments in micro insurance have diverse returns that evolve over time: reputational gains in the short term, knowledge and innovation in the medium term, and strong growth and profitability in the long term.

“If we view insurance as a sector in which knowledge and innovation is decisive resources, then micro insurance can be viewed as a key driver of company success and economic growth.”

LeapFrog will bring in expertise and money and will get undisclosed shareholding in the company.

It has already invested in All Life, an insurance company in South Africa that lends only to people who are HIV-positive.

The private equity fund announced it is looking for opportunities in Asian countries.

Daniel Ndonye, the Apollo Group Board Chairman said the new investment will add value to the company because of the Fund’s “extensive capital and expertise in micro insurance.”

He said both companies are driven by innovation and market penetration as key business drivers.

“In addition to capital, LeapFrog brings expertise in micro insurance to build on AIL’s current micro insurance activities.

“Beyond its diverse current insurance activities, Apollo is now targeting the potential market of 7.9 million people who are self-employed in the informal sector. “

Doug Lacey, the LeapFrog partner who led the investment in Apollo said the choice of Apollo is based on its capacity to tap the vast market of lower-income clients.”

According to a report by Lloyd’s 360 Risk Insight on insurance in developing countries, most markets in the world remain untapped by insurers.

Some 1.5 to 3 billion people are willing and able to buy insurance policies – a vast and a rapidly growing market.

The report further adds that business growth of over 10 percent annually has been observed in developing countries recently and some analysts believe that a seven fold increase is possible over 10 years.

Swiss Re’s recent global report estimates micro insurance to be 40 billion dollars market.

“Success for AIL and LeapFrog will mean a major increase in affordable insurance cover for the people of Kenya and the greater East Africa region,” said Lacey.

LeapFrog is a 135 million dollar private equity fund focusing on providing low income insurance and some of its investors are the International Finance Cooperation, Soros Funds Management, Flagstone Reinsurance, sovereign fund KfW of Germany, FMO of Netherlands, Triodos Bank, Proparco and European Investment Bank among others.

Source : Coast Week

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A five year investigation by Bedfordshire Police into a major insurance fraud by an organised criminal enterprise based in Luton has finally concluded with three of the last four defendants being found Guilty at Luton Crown Court today.

Kamsan Mahmood, 42 of Long Meadow Farm, Chalton, Istafa Hussain, 35, of Lincoln Road, Luton and Peter Charlery, 45, of Long Meadow Farm, Chalton, were all found guilty of conspiracy to defraud. Irtiza Fazal, 40, of Lincoln Road was found not guilty by the jury following a seven week- long trial.

The three convicted men have all been remanded in custody and will be sentenced on April 27 at Luton Crown Court.

The investigation, codenamed Operation Exhort, resulted in a total of 39 defendants who appeared at Crown Court at separate hearings over a period of three years and represents one of the largest fraud rings the industry has ever seen. The earlier court proceedings could not be published for legal reasons until now.

The entire investigation resulted in 33 defendants pleading guilty to a variety of offences in connection with the £5.3 million insurance fraud. The remaining eight pleaded not guilty at two separate trials – seven have been convicted and one acquitted. A further eight people were cautioned for their involvement in the crime.

The impact of the investigation by Bedfordshire Police and industry partner, the Insurance Fraud Bureau, has been huge and uncovered a web of deceit involving people from a number of professions from the legal, medical and motor trade.

“In 2006 Luton was a known hotspot for offences, also known as ‘cash for crash’, but in 2011 that is no longer the case,” said Andrew Richer, Senior Investigating Officer and Assistant Chief Constable of Bedfordshire Police.

Speaking after today’s verdicts he added; “The case had grown considerably in size and complexity since the initial lines of investigation were pursued in May 2006. This was a calculated and systematic fraud perpetrated on numerous victims. In some cases collisions were engineered to involve unsuspecting motorists and in other cases claims were made about accidents which were entirely fictitious. This kind of fraud substantially inflates insurance premiums for every honest driver in the country. I am pleased that working with our industry partner, the Insurance Fraud Bureau (IFB), we have been able to bring offenders to justice and confiscate substantial assets and money which were the proceeds of crime.”

Glen Marr, Director, IFB added: “Today once again demonstrates the effectiveness of the insurance industry and Police working collaboratively to disrupt fraudsters and, protect innocent motorists and genuine policyholders. Additionally, it reinforces the intolerance of the insurance industry towards fraud.”

“On behalf of the industry, we would like to acknowledge and thank Bedfordshire Police for their sterling work on this operation. Furthermore, the support and efforts of employees within individual insurers and their representatives should be recognised, without which the end result would not have been possible. It was very much a successful team effort that contributed to today’s result.

“Undetected general insurance claims fraud is estimated to cost the industry £1.9bn a year and that adds on average £44 to every policyholder’s annual insurance premium.

“We will continue to find, pursue and expose criminals involved in organised insurance fraud.

The message is loud and clear – seek to defraud an insurer and you risk serious repercussions, to include prosecution and seizure of assets.

Source : IFB Press Release

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The number of captives domiciled in Guernsey is expected to increase significantly as the implications of compliance with Solvency II become better understood by captive managers and owners, delegates at Aon’s  Captive and Insurance Master Class today.

The event, held at the Chartered Insurance Institute in London, was hosted by Aon Insurance Managers (Guernsey).

In a keynote address the Chief Minister of Guernsey, Deputy Lyndon Trott, will:

– outline Guernsey’s commitment to sustaining its position as European leader in captive insurance and one of the top four captive jurisdictions globally;

– set out how Guernsey’s industry expertise and world-renowned reputation for robust but responsive regulation will help deliver that commitment;

– emphasise that Guernsey will lead in implementing IAIS international regulatory standards;

– show how Guernsey’s economy has adapted strongly to the changing demands of the global economy.

In advance of his speech, the Chief Minister said: “Guernsey has a well-deserved and hard-earned reputation for leadership and innovation in captive insurance. I will be emphasising that in Guernsey we will not be resting on our laurels, and that we will continue to lead and innovate in the months and years ahead.”

Delegates heard that while the capital requirements of Solvency II may be appropriate for commercial insurers, who are dealing with the general public, many captive managers and owners believe the International Association of Insurance Supervisors’ (IAIS) international regulatory standards will be sufficient for most traditional captives.

Paul Sykes, Managing Director of Aon Insurance Managers (Guernsey), commented “Guernsey is fast becoming Europe’s leading destination for captives. It offers a stable and solid political and regulatory regime while not forcing captives to adhere to the disproportionate demands and excessive capital requirements of Solvency II. Increasingly this will differentiate Guernsey from other domiciles and we fully expect businesses with captives to see Guernsey as the place to do business.’’

“Aon is committed to Guernsey, and we are actively advising new and existing captive insurance company clients to help them achieve better capital efficiency and cost savings through restructuring their captives and reducing collateral requirements.”

Delegates at the Master Class also heard from RBS Senior Economist, Neil Parker, and Barclays Director of Global Investment Strategy, Henk Potts.

Source : Aon Press Release

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BIBA submits response to Treasury calling for an appropriate, proportionate and cost-effective approach to the regulation of insurance brokers.

The British Insurance Brokers’ Association (BIBA) today reiterated its call for the new regulatory regime to adopt a more proportionate and appropriate approach to the regulation of insurance brokers.

In its formal response to HM Treasury’s consultation paper A new approach to regulation: building a stronger system, BIBA welcomed the open approach taken by Government to the consultation process and reiterated its support for a single regulatory body for the insurance intermediary sector.

Eric Galbraith, BIBA Chief Executive said: “Whilst we support the principle of proportionate, appropriate and cost-effective regulation, we do have some serious concerns regarding the proposed supervisory approach as set out in chapter 4 of the paper, which looks very similar to what we have now.”

Galbraith added: “Our recently published research highlights the limited risks that insurance brokers pose and we are actively calling on the Government and regulator to ensure that the approach being developed for insurance brokers is more appropriate than it has been in the recent past.”

Steve White, BIBA Head of Compliance & Training, said: “The direct and indirect cost of regulation for UK insurance brokers is way out of line with the rest of Europe. That cannot be right and it is not acceptable. We understand and accept that the banking crisis has increased pressure on regulators and supervisors around the world and that there is now political interest in the effectiveness of rules and supervision.

However, it is vitally important that our new regulatory regime is better at aligning supervisory scrutiny with risk, otherwise the danger is that a ‘one size fits all’ approach will be adopted, resulting in inappropriate cross-sectoral approaches. This would inevitably be to the detriment of the low risk insurance broking sector, and that would not be acceptable for UK businesses.”

Source : BIBA Press Release

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