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Today the ABI calls for better co-ordination between the new financial regulatory authorities, with the emphasis on transparency and accountability and a focus on positive consumer outcomes.

Responding to H M Treasury’s consultation: A New Approach to Financial Regulation, Otto Thoresen, the ABI’s Director General, said:

“It is vital that the new Prudential Regulation Authority and Financial Conduct Authority do not duplicate each others’ activities.  Without clear co-ordination and sharing of information, firms could suffer the unnecessary cost of having two overlapping regulators.  To achieve the best outcomes for firms and consumers both the FCA and PRA must work in a co-ordinated, joined-up and transparent manner.  If there is clarity about who is responsible for what, and everyone is aware of the rules and decision making processes across the board, then understanding should increase and consumer detriment decrease.”

The key points in the ABI’s response include:

­- There is particular concern about the cost of dual regulation for members.  It is not yet clear how costs will be apportioned and what safeguards will be in place to ensure that dual regulated firms are not levied twice for the same activity.  Dual regulated firms will also incur additional costs to ensure ongoing compliance with the requirements of two regulators, for example supervisory visits, requests for information, rulebooks, documentation etc.

– As the Government recognises, close co-ordination between the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) will be necessary to ensure that the new regulatory structure operates in an efficient and effective manner.

–  We welcome the Government’s proposal to limit the framework legislation by introducing a statutory duty of co-ordination, a requirement for there to be Memorandum of Understanding between PRA and FCA and cross-membership of the Boards of the two authorities.  This will provide a framework to enable co-operation without imposing bureaucratic restraints on how this is done.

– Consumers, financial companies and the regulatory system itself will benefit if the regulators’ operational approach is made transparent.  Better understanding of the rules and regulations will mean that the authorities will have to be more accountable for their actions and decision making.  This should create a more efficient and trusted regulatory system.

– In line with the FCA’s statutory objectives to promote consumer choice and competition, the FCA should encourage and promote access to financial services to help make it easier for consumers to access services and products that meet their financial needs.

– The role of the Financial Ombudsman Service (FOS) is to resolve individual disputes between consumers and financial services firms.  When the FOS deals with cases that have wider implications, raising regulatory or legal issues which may affect how businesses operate, it is essential that these cases are dealt with by the FCA or a court.

– The FCA should oversee and conduct regular reviews of the FOS to ensure it is accountable and operates effectively and consistently.  The role of the FOS within the new regulatory regime should be clearly defined in statute, including its relationship with the FCA.

– Regulation of complaints management companies should be enhanced, perhaps by bringing them within the FCA’s regulatory remit.  As they are now involved in a growing number of FOS complaints they need to be suitably regulated and supervised to ensure they are acting in the best interests of consumers.

Source : ABI Press Rlease

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    For several decades, business and economic pundits have exoticized Japan’s economy. The supposed lost decades since 1990 have only heightened perceptions of a country whose economic system operates in unique ways, not subject to standard economic analysis.

    As I have argued tonight, this view of Japan as atypical and mysterious is, however, unfounded for macroeconomic policy purposes. With the enormous challenges that Japanese citizens face today, it is important to keep in mind this fundamental commonality – returning to the belief that Japan has its own path economically, not just culturally, could lead to deeply mistaken conclusions about the country’s longer-term economic prospects.

    It is my belief that the human tragedy of the March 2011 earthquake and tsunami will do nothing to dislodge the Japanese economy from the long-term development path common to all advanced economies. If, as I have argued, the story of Japan’s economy in the 1990s is that of Seven Samurai: in which a terrible, negative shock disrupts the normal farming village cycles of Japanese economic life, eroding communal prosperity until strong leadership requiring significant sacrifice is exerted to restore normality. Seen that way, the future for Japan’s economy is continued normality in the absence of new, self-destructive social or policy paths – and even a horrendous natural disaster can be overcome.

    Absent the current crisis, Japan’s prospects over coming decades should be fine for a normal country at the global technology frontier, with ample savings, and secure property rights. This means the economy should grow over time at approximately the rate of productivity growth-around two percent annually-adjusted for changes in prices and population size. The country should have normal business cycles, and be vulnerable to external or further natural shocks, but should not display any unusual patterns.

    The rebuilding from the tsunami will only accelerate the growth rate in the short-term with a surge in capital investment, just as occurred following the devastation of World War II or the Kobe earthquake. This is of course what a Solow-type growth model would tell you would happen when an economy in the steady state suffers a sudden loss of capital (and history bears this theory out in practice beyond Japan).

    Yes, the Japanese population is aging rapidly, but what matters for human welfare and for sustainable performance is per capita income growth, and history shows that slow demographic changes do not prevent sustained growth by that relevant measure. The meaning of the terrible loss of life in the Japan’s 2011 earthquake and tsunami cannot be captured in economics. But from the narrow view of longer-term economic prospects, the loss is insufficient to alter the country’s current or future workforce on a national scale. If the devastation encourages many older Japanese to leave the more exposed rural

    Speech given by Adam Posen at the 12th Annual Mitsui Symposium, Center on Japanese Economy and Business, Columbia University, New York on 13 April 2011

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    Annuitising likely to remain safest and most appropriate option for converting defined contribution pension savings into a retirement income.

    “For the vast majority of people, annuitising is likely to remain the safest and most appropriate option for converting defined contribution pension savings into a retirement income” says Pensions Policy Institute report

    In 2010 the vast majority of people aged between 55 and 75 would not have had a large enough private pension pot to be able to bear the investment and longevity risks associated with Capped Drawdown and would not have been able to meet the Government’s Minimum Income Requirement of having a secure pension income of £20,000 per year, according to new research published today by the Pensions Policy Institute (PPI).

    The research is the fifth report in the PPI’s retirement income and assets series, looking at the future of retirement income and assets in the UK.  The report explores the implications of the Government’s new legislation that ends the effective requirement to purchase an annuity by age 75.

    Commenting on the report, Chris Curry, PPI Research Director, said “The research shows that the vast majority of people aged between 55 and 75 in 2010 – and particularly lower earners with small pension pots – are likely to find that annuitising is still the safest and most appropriate option for converting their defined contribution pension savings into a retirement income.”

    “The PPI’s broad estimates suggest that around 600,000 to 700,000 people in the UK between the age 55 and 75 in 2010 are either already using income drawdown or have enough saved in a defined contribution pension fund to have the potential to use the new Capped Drawdown arrangements from April 2011. This represents around 5% of all people aged between 55 and 75 in the UK and around a quarter of those aged 55 to 75 who have defined contribution pension pots and haven’t yet purchased an annuity.”

    “In addition, the PPI estimates that around 200,000 people could meet the Government’s new Minimum Income Requirement of a secure pension income of at least £20,000 per year, and have some defined contribution pensions saving left over to withdraw under the new Flexible Drawdown arrangements. This represents around 2% of all people aged between 55 and 75 in the UK and 7% of those aged 55 to 75 who have defined contribution pension pots and haven’t yet purchased an annuity.

    “The research suggests that initially a relatively small number of individuals will be able to make use of the Government’s new flexibilities. However, in the future, a greater number of people may be able to take advantage of both Capped and Flexible Drawdown, as more individuals build up defined contribution pension funds and the market for annuities and drawdown products develops.  This is likely to increase the need for advice as to which products are most appropriate for different individuals.”

    Source : Pension Policy Institute Press Release

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    The World Health Organisation is seeking  studies for up to 20 years to keep watch over public health in Japan following  the Fukushima nuclear emergency, a senior official said on Wednesday.

    WHO environmental health chief Maria Neira played down a current risk to  public health outside the 30-kilometre exclusion zone around the Fukushima  Daiichi plant, based on tests and monitoring by Japanese authorities.

    “There is no need for new public health measures,” Neira told journalists.    She nonetheless underlined that the UN health agency could not let its  guard drop while the radiation emergency at the plant was underway, as the WHO  maintained permanent monitoring with the Japanese and global detection  networks.

    “This is an evolving situation and we need to assess and reassess almost on  a one-hour basis, because the situation is unfortunately not yet under control  and we do not know what might happen,” Neira told journalists.

    “Obviously we continue to be very vigilant, we never came down our level of  alert, and we continue to monitor in a very careful way how the situation is  moving; our assessment might change in one hour, I don’t know,” Neira told  journalists.

    Japan upgraded its month-old nuclear emergency on Tuesday to a maximum  seven on an international scale of atomic crises, placing it on a par with the  Chernobyl disaster a quarter-century ago.

    The WHO understood that the change was not made because of public health  concerns, Neira said.

    “It’s clear that this 30-kilometre area provides the best shield for the  protection of the population,” she added, while emphasising that the WHO was  also starting to consider potential future health consequences of the  emergency.

    “We need to start to put the basis for the studies that need to be  conducted for the next 10 to 20 years,” the WHO director of public health and  environment said.

    “It may be too early because we are still in the very acute phase of  detection for human health but we are discussing with Japan.”

    Japanese authorities have screened thyroid functions in more than 940  children, with the results “all under the dose that represent risk,” she  emphasised.

    Geneva, April 13, 2011 (AFP)

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    The latest benchmark AA British Insurance Premium Index brings no joy to motorists as premiums continue to go up at record rates.

    Over the first quarter of 2011 – a period when premiums usually show little movement – the typical Shoparound premium for a comprehensive car insurance policy rose by 5.9% to £892.08; and by 40.1% for the 12 months ending 31 March 2011.

    The average quote for a Third Party, Fire & Theft (TPFT) policy went up by 10.7% to £1,532.62 (12-month increase 82.1%) – but this reflects the typical young driver profile of TPFT insurance buyers.  Many insurers no longer offer this type of cover.

    The AA’s Index analyses quotes from over 50 insurance companies, brokers and schemes against a basket of risks that is typical of the UK driving population.  The Shoparound premium is an average of the cheapest three quotes for each ‘customer’.

    Simon Douglas, director of AA Insurance, says: “The record rises in fuel costs coupled with spiralling car insurance premiums is disappointing news and is making driving unaffordable for many, especially cash-strapped young drivers.

    “This is leading to more people withholding information when taking out a policy or exaggerating personal injury claims to try to reduce their costs.  But this simply piles on costs for insurers and results in yet higher premiums for honest motorists

    “Despite the sharp premium increases, insurers are still making losses although the large underwriting deficits of 2009 have probably now been halved.”

    The main drivers of premium inflation remain fraud and injury claims, Simon Douglas explains.  These were identified by the Commons Transport Committee as being among the chief causes of rising premiums.  Kenneth Clarke MP, Lord Chancellor and Secretary of State for Justice announced on 29 March a number of measures to curb the high costs associated with the UK’s ‘no-win, no-fee’ claims culture which, according to some estimates, is piling up to £80 on every honestly-bought car insurance policy.

    Simon Douglas points out: “Although the number of collisions on Britain’s roads is falling, the number of claims for whiplash injury is rising.  It’s tempting to make such claims with the huge number of ‘accident management’ law firms using cold-call marketing techniques.

    According to the Association of British Insurers, for every £1 paid in compensation, a further 87p is paid in legal costs. Every day over 200 such claims are made, often for accidents that happened up to three years previously, for which no mention of personal injury was made at the time.

    “The proposals made by the Lord Chancellor should help to control these costs if they become law.”

    Drivers aged 17-22 have again taken the brunt of the increases with a typical premium of £2,431 being paid: more than 64% higher than 12 months ago.  Young men continue to pay much higher premiums (average Shoparound quote £3,052) than young women (£1,767).

    “Young men are 10 times more likely to suffer a catastrophic crash than older drivers.  More than half of insurers won’t insure teenage drivers so there is less choice and premiums increase at a faster rate than average.

    “Last year, we said that premiums quoted for young drivers were becoming unsustainable – and that now seems to be happening with many quotes for 17 or 18 year-olds being simply unaffordable.”

    From December 2012, insurers will no longer be able to take gender into account when calculating premiums.  Gender is currently one of the most important factors influencing premiums so the cost of insurance for young women is likely to rise substantially.

    However, Simon Douglas believes that this might provide the impetus needed to make telematics or ‘black box’ pay-as-you-drive policies more acceptable.  Such systems typically measure driving performance.  “They reward careful drivers, typically women, by reducing premiums and penalise those who take risks,” he says.

    The AA is expected to launch its own pay-as-you-drive policy later this year.

    Simon Douglas says that whilst price increases have continued into 2011, he believes that rises over the rest of the year will be much smaller.  “I’d be surprised if they exceed 20% over the year,” he says.

    “As we enter 2012 I think we’ll also see new measures starting to take effect, such as Continuous Insurance Enforcement (which became law on 1 April); improved fraud controls such as access to the DVLA database for insurers and measures to control costs associated with personal injury claims, all of which will help to keep the lid on premiums.”

    Source : The AA Press Release

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    Earthquake coverage demand is on the rise on the American West Coast.

    “We might need some more underwriters,” says Susan Rivera, president and CEO of V3 Insurance Partners, which launched its V3antage EQ+ Difference In Conditions program three weeks ago.

    “We have over 800 submissions” for the program targeting small commercial businesses with primary exposures in California, she reports. “You are seeing a lot of first-time buyers.”

    Tony Morgan, a senior vice president for Bliss & Glennon, a Redondo Beach, Calif.-based wholesale brokerage and MGA, also reports interest in his firm’s 10-year-old residential and commercial programs for Oregon and Washington since the earthquake and tsunami in Japan.

    While Rivera and Morgan spoke to NU Online News Service last week specifically about specialty programs their firms have created, Morgan says he’s seen a big jump in applications for risks outside the boundaries of the two Northwest programs—for nonprogram risks in California individually written on the wholesale side.

    “We see a lot of people who typically would not buy earthquake insurance now buying it. It’s across the board” for all three states, he says, noting that concerns about tsunami threats are also behind the flood of applications. “Typically, tsunamis are covered under the flood portion of the policy,” he says.

    “After New Zealand and Japan, people are saying this isn’t a Hollywood sci-fi film. This is a real exposure. We need to have something in place,” Morgan says.

    Bliss & Glennon offers what Morgan refers to as self-rater programs for residences in Oregon and Washington, allowing brokers to answer a few easy questions and fill out a short application by e-mail or fax to bind coverage.

    “We were always interested in doing a self-rater program,” says Morgan, noting that it’s very difficult to do anything like that in California “because underwriters want the control. They don’t want to give you that authority because it’s California.”

    “But we knew that there was a good market for quake in Washington and Oregon. We also knew insurance companies had a lot of capacity for those two states.” Because they had so much capacity, they were much more open to the idea of finding a different vehicle, like a program, to use that capacity, he says.

    Referring to the residential product for Oregon and Washington, Morgan says total insured values could be as high as $2.5 million. Premiums start at $400.

    “Basically, if it’s built after 1950 and it’s not on bay mud, and the TIV’s not more than $2.5 million, you have coverage,” he says, noting that total premium volume for the program, written on London paper, is roughly $300,000.

    For commercial, TIVs can’t be more than $25 million, and limits up to $10 million are available. Deductibles can be as low as 2.5 percent. “We don’t want unreinforced masonry, and we’ll look at stuff as old as the early 1900s,” he says.

    Rivera says V3’s competitive edge with its California commercial program is its use of risk-modeling technology and actuarial methods to various margin calculations that consider probable-maximum-loss estimates at underwriters’ fingertips.

    “We spent a lot of time building a very technical rating model” that has a direct feed out to Risk Management Solutions (RMS), she says, referring to the Newark, Calif.-based modeling firm. “We actually send data electronically out to RMS and it comes back to our rater on all of these small accounts. We fully model every location.”

    “Rather than worrying about modeling the account, our underwriters are actually spending their time analyzing the output of the actuarial model”—asking why certain indications are high, others are low—and select business “that is best priced for what it’s doing to our overall portfolio.”

    Source : Property Casualty  360

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    Merlin Professional Claims Services (Merlin) announces the appointment of David Robinson as Regional Liability Manager (South).

    Based in Merlin’s Crawley office, David will assist Chris Lewis (Head of Liability) in the continued development and management of Merlin’s Liability division and team. David has over 25 years of experience within liability adjusting and joins Merlin from Quest Partnership where he held the position of Senior Liability Adjuster. David has also held senior roles and worked within Iron Trades, Garwyn, and The Solicitors Indemnity Fund.

    Chris Lewis, Head of Liability comments: “We are delighted to welcome David to the team and the wealth of experience that he brings to the role. The experience within the division and new developments that are in progress, make it an exciting time to be working at Merlin.”

    David Robinson comments: “I am looking forward to being part of Merlin’s dynamic Liability Division and the opportunities the new role presents, and am keen to start working with Chris and the Team to enhance Merlin’s Liability offering.”

    Source : Merlin Press Release

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    A worker battling to cool overheating  reactors at Japan’s tsunami-hit nuclear plant was taken to hospital on Sunday  after complaining of feeling sick, the plant’s operator said.

    The man had no apparent injuries and it was not clear what had caused the  sudden illness, said a spokesman for Tokyo Electric Power (TEPCO), which runs  the stricken Fukushima No. 1 plant.

    “A subcontractor, a man in his 30s, complained that he was feeling unwell  at around 11:10,” said the spokesman. “He was conscious but somewhat wobbly.  He could walk if assisted.

    “He was transferred to a hospital. The cause of his sickness is not yet  known.”    The spokesman said the worker, who has not been identified, was one of 30  who had been laying a water exhaust hose outside the turbine building at  reactor No. 2.

    Increasing amounts of highly radioactive water have been gathering in a  trench at the reactor, where workers successfully plugged a leak that had been  spewing badly contaminated water into the Pacific Ocean.

    The company has dumped more than 10,000 tonnes of low-level contaminated  water into the sea to free up storage space so they can begin draining the  trench.

    Last month three workers working on the turbine in reactor No. 3 were  hospitalised after standing in highly radioactive water.

    They were discharged a short time later, despite having been exposed to an  estimated 2,000 to 6,000 millisieverts of radiation on their feet.

    Normally about half of people who receive a 5,000 millisieverts dose across  the entire body would be expected to die within a month.

    Tokyo, April 10, 2011 (AFP)

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    The earthquake and tsunami in Japan will  likely force the world’s third largest reinsurance group, Hannover Re, to  revise downwards its yearly forecasts, the German group’s chief financial  officer said Sunday.

    Asked by the Frankfurter Allgemeine Sonntagszeitung whether such a revision  was necessary, Roland Vogel replied: “That is likely. But we first want to  wait for our first-quarter results.”

    “We will have to bear costs of around 250 million euros ($362 million).  With Hurricane Katrina and the attacks of September 11, 2001, we had higher  costs,” he told the paper.

    “With the earthquake in New Zealand and the floods in Australia, we had  costs of 500 million euros. That is our entire annual budget for large-scale  losses,” he added.

    The total cost from the damage caused by the devastating earthquake and  tsunami in Japan is estimated at 16-25 trillion yen ($187-292 billion) over  the next three fiscal years, according to the Cabinet Office in Tokyo.

    The upper estimate would put the disaster’s financial impact at more than  double the 9.6 trillion yen of the 1995 Kobe earthquake, which killed more  than 6,400 people.

    The estimate does not account for wider issues such as how radiation from  the stricken Fukushima Daiichi nuclear plant will affect food and water  supply, amid an ongoing food scare.

    Berlin, April 10, 2011 (AFP)

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    Asian finance ministers agreed  Friday to speed up regional integration and pledged to press ahead with plans  for a disaster insurance fund in the wake of Japan’s tsunami disaster.

    They also warned that rising food and oil prices could threaten the global  economic recovery, and expressed concern about massive inflows of  destabilising “hot money” from abroad.

    Indonesia’s rupiah hit four-year highs against the greenback earlier this  week and inflation is running at more than 6.5 percent, underlining concerns  that the region’s more successful economies may be close to boiling point.

    “In contrast (to developed countries), emerging and developing economies  have led the global economic recovery,” Indonesian President Susilo Bambang  Yudhoyono said at the start of the talks on the Indonesian island of Bali.    “This is of course no time to be complacent,” he added, warning of  inflation and the “increasing severity and impact of natural disasters and  climate change”.

    Trade and liquidity imbalances combined with rising commodity prices “may  threaten the global economic recovery, food and energy security and the  achievement of millennium development goals” such as poverty reduction, he  said.

    “The increasing linkage of ASEAN to the global economy has enhanced the  potential spillover from external shocks into our region,” he told finance  ministers and central bankers from the 10-member Association of Southeast  Asian Nations (ASEAN).

    With Europe’s sovereign debt crisis spreading to Portugal and much of the  developing world’s economies still in the doldrums after the global financial  downturn, Asia has become a magnet for capital seeking better returns.

    But much of it has been in the form of volatile portfolio capital that can  be withdrawn just as fast as it is injected, raising fears of instability in  economies that are leading the global recovery.

    A joint statement released at the end of the talks said the ministers had  “discussed concerns about the current surge in capital flows, (and) emerging  inflationary pressures combined with strong commodity price vulnerability”.

    Yudhoyono said the best protection from external shocks was closer regional  cooperation and the creation of a planned ASEAN common market of almost 600  million people by 2015.

    Indonesia is the current chair of the grouping and its biggest economy. The  block also includes Brunei, Cambodia, Laos, Malaysia, Myanmar, the  Philippines, Singapore, Thailand and Vietnam.

    The ministers said they had agreed to implement a $700 million credit  guarantee and investment facility next month as previously promised under a  broad range of initiatives to more closely link the region’s economies.

    Along with the Asian Development Bank, they also pledged initial  contributions of $482 million towards a Malaysia-based ASEAN infrastructure  fund.

    They also agreed to move forward with the liberalisation of financial  services, and emphasised the need for “disaster risk financing” to insure  against the impacts of catastrophes like Japan’s devastating tsunami.

    ASEAN secretary general Surin Pitsuwan said the Japan disaster would have  “minimal impact” on Southeast Asian economies, ahead of an ASEAN-Japan foreign  ministers’ meeting in Jakarta on Saturday.

    Singaporean Finance Minister Tharman Shanmugaratnam said it was “too early”  to tell what impact it would have. He warned that Southeast Asia would be  “prudent” to assume the knock-on effects would last beyond a quarter or two.

    The ASEAN region grew at around five percent last year, up from 1.5 percent  in 2009 in the aftermath of the global credit crunch, yet Yudhoyono said it  still counted almost 120 million people who live on less than $1.25 a day.

    Nusa Dua, Indonesia, April 8, 2011 (AFP)

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    Government hopes that the private sector will provide jobs for unemployed public sector workers look increasingly shaky, according to new research from uSwitchforbusiness.com. The study shows that far from welcoming public sector workers into their businesses, the majority of SME employers are actually put off employing them because of concerns over productivity, training and skills and even attitude.

    Almost a quarter of SMEs (22%) intend to take on more staff in 2011. Unfortunately, these growth plans may prove of little benefit to redundant public sector employees as only 2% of employers stated that they would actively seek to recruit them. Nearly a quarter of small businesses (23%) would only look to recruit a public sector worker if it was for a role that they couldn’t otherwise fill. More damningly, one in ten (12%) would not be prepared to employ a public sector worker at all.

    The biggest barrier seems to be SME owners’ negative perceptions of public sector workers – only 6% of private sector bosses believe that they’d fit in well in their business. Over half (55%) believe that public sector workers have unrealistic expectations regarding pay, holidays and employment terms while just one in ten (11%) agree that they are as productive as private sector workers.

    Four in ten small business owners (41%) believe that there is a cultural issue that would make it very difficult for a public sector worker to successfully adapt to the private sector. Moreover, public sector workers may have a difficult time convincing potential employers of their expertise at interview, as a tiny 8% of bosses see them as ahead of the private sector in terms of training, up-to-date knowledge and skills.

    Public sector redundancy is expected to increase dramatically in 2011 as the coalition Government continues to cut funding to education, the military, hospitals and local authorities. Despite the numbers of qualified public sector candidates that will flood the market, only 18% of SME business owners believe that the private sector will be able to pick up the slack from the expected job cuts. And this cannot be attributed to lack of confidence as 72% of SME owners think that their business will grow or at least retain its size in 2011.

    James Constant, Director of uSwitchforbusiness.com, says: “The Government is pinning its hopes on the private sector being ready, willing and able to offer employment to redundant public sector workers. What it hasn’t grasped is that employers view public and private sector candidates very differently. Small businesses need workers that can fit in quickly, hit the ground running and add value to the bottom line – what this research shows is that there are grave doubts as to whether public sector workers can meet this demanding brief.

    “Trading conditions are tough and business owners have to ensure their business is as agile and competitive as possible. Whether looking to expand or not, all businesses can benefit from looking at their overheads and ensuring that they are not paying more than they need to for the basics such as energy, telephone and broadband and insurance. It’s easy to take your eyes off these but paying more than competitors can have just as big an impact on your business as employing the wrong or right worker.”

    Source : uSwitch.com Press Release

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    Aon Benfield has launched an earthquake model for Cyprus, as insurers seek to increase their understanding of seismic risk in the region. Impact Forecasting, Aon Benfield’s catastrophe model development centre of excellence, has helped to bridge a gap in the market where no viable alternatives to model this peril currently exist.

    Earthquakes in Cyprus are common as the island is situated in close proximity to the boundary between the Anatolian and African plates. In the past 100 years Cyprus has experienced close to 20 earthquakes that have caused property damage, as well as injuries and deaths in some instances. Notable events include the February 1995 earthquake afflicting Paphos and Nicosia and the October 1996 event causing losses in Paphos and Limassol.

    Local insurance companies have been lobbying for a model that is up to date and provides realistic results to assess their exposures. In response, the Impact Forecasting team worked to create a robust model in collaboration with Professor Carydis at the National Technical University of Athens and his team of civil and structural engineers and seismologists.

    The research characterized the following components of the model:
    1. Potential seismic sources in Cyprus that constitute an event set of over 10,000 earthquake scenarios, both onshore and offshore;
    2. The vulnerability of Cypriot building stock by various engineering metrics including construction class, age and seismic zone, as well as geographical distribution.

    The Impact Forecasting model can provide insurers with quantitative loss estimates even when the input exposure data is given at an aggregate or CRESTA zone level and construction information is incomplete.

    Alexander Turner, Deputy CEO of Aon Benfield Greece, said: “Cypriot insurers are increasingly turning to catastrophe models to help determine their reinsurance purchases. We have been able to support this trend by providing the new earthquake model, in addition to demonstrating the value of other analytical technology such as our dynamic financial analysis tools.”

    Steven Jakubowski, President of Impact Forecasting, added: “In the development of peril models, Impact Forecasting always partners with local institutions and universities to incorporate into these models the latest scientific understanding of the peril and the vulnerability of the built environment.”

    Source : Aon Benfield Press Release

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    Ageas UK has today announced key appointments to support the growth of its Retail operations reporting into Retail Managing Director Andy Watson.

    In addition to the announcements made in January 2011, Andy has appointed Nick Lemans as Finance Director, UK Retail. Nick will be responsible for Finance across the Retail businesses which include RIAS where he was previously Finance Director, Kwik Fit Insurance Services, Ageas Insurance Solutions and Castle Cover. Nick is a chartered accountant with 16 years experience in the financial services industry with RIAS and Barclays and prior to that worked with PWC and British Aerospace.

    The move completes the appointment of Andy Watson’s management team which includes Brendan Devine, UK Retail Commercial Director, Janet Connor, Managing Director of RIAS and Castle Cover, Jason Banwell, Managing Director of Ageas Insurance Solutions and June Lynch, Managing Director of Kwik Fit Insurance Services.

    As part of his new UK Retail commercial team, Brendan Devine has also appointed Stevie Sutherland, Stephen Robertson and Tony Way who will report into him.

    Stevie Sutherland is the new Director of Insurer Relations, UK Retail responsible for managing insurer relationships across the Retail businesses. Stevie joined Kwik Fit Insurance Services as Business Development Director in May 2009 and prior to that worked with GE Money for 15 years where he was Global Business Development Leader, Motor Finance.

    Stephen Robertson is the new Director of Pricing, UK Retail and will have oversight for the pricing activity across the Retail businesses. Stephen has had a long career within Kwik Fit, having held a number of positions for the past 13 years and most recently as Pricing Director for Kwik Fit Insurance Services.

    Tony Way is the new Director of Aggregator and Products, UK Retail. Previously, Tony was Managing Director of Express Insurance for 3 years and will now lead on relationships with aggregator partners as well as sourcing and developing the product requirements of the Retail businesses.

    Commenting on all the new appointments, Andy Watson, Managing Director of Ageas UK Retail said:

    “I’m delighted that we have a strong and talented top team in place to support our continuing growth and Nick Lemans is a great addition. Ageas UK Retail goes from strength to strength and the management team is focused on continuing to deliver the results and service to support our clients and partners. It is also indicative of the strength of our people that we have been able to make these appointments from within the wider Ageas UK group.”

    Brendan Devine, Commercial Director of Ageas UK Retail said:

    “This is another step forward in supporting the exciting ambition of our Retail businesses. Stevie, Stephen and Tony have immense experience and drive to help take us to the next level and I’m very much looking forward to working with them in their new roles.”

    Source : Ageas Press Release

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    Cesare Geronzi, the chairman of Italian  insurance giant Generali and a powerful financier, resigned on Wednesday after  less than a year on the job following a no-confidence vote from the board.

    Geronzi resigned after “a large majority” of the board of directors backed  the no-confidence vote, a source close to the matter told AFP.

    Another financial sector source said Geronzi, who was previously the head  of Mediobanca, had been accused of “improper governance” of the company.    Generali has been rocked in recent months by tensions between Geronzi, who  was appointed as chairman in April 2010, and chief executive officer Giovanni  Perissinotto, who called the board meeting to resolve the dispute.

    Geronzi has been accused of announcing strategic goals for the company that  did not correspond to those agreed by the board and came under fire for  agreeing a joint venture deal with the Czech Republic’s PPF.

    Milan, April 6, 2011 (AFP)

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    Europe will lower the levels of  radioactivity allowed in food to match already stricter ceilings set by Japan,  European Commission head Jose Manuel Barroso said Tuesday.

    Barroso said thresholds established after the 1986 nuclear accident at  Chernobyl in then-Soviet Ukraine followed the scientific advice of the day,  but that with Japan being “very sensitive to anything that affects food  security,” it had instigated even tighter leeway.

    As a “precautionary measure,” Barroso said, the European Union would now  “apply the Japanese values, which are lower than our own.”

    The commission said last week it could strengthen controls on imports of  Japanese food to include checks on the presence of plutonium.

    The 27-nation EU’s executive arm the previous week imposed emergency tests  on imports of Japanese food and feed originating in or consigned from areas  most affected by leakage from the Fukushima Daiichi plant, following a massive  earthquake and tsunami.

    According to the commission, Japan has the right to export to the EU  fishery products, bivalve molluscs (seafood), casings and pet food as well as  fruits and vegetables.

    Strasbourg, April 5, 2011 (AFP)

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    The US teen birth rate fell to the lowest  level on record in 2009 but remains one of the highest in developed countries,  a report released Tuesday said.

    In 2009, some 410,000 teenaged girls aged 15 to 19 years gave birth in the  United States, making for a national teen birth rate of around 39 births per  1,000 females, a report released by the Centers for Disease Control and  Prevention (CDC) said.

    The teen birth rate was down 37 percent from 20 years ago, when there were  61.8 births per 1,000 girls aged 15 to 19, said the report, which is the  second in as many months to show a sharp drop in rate of teens giving birth.

    A National Center for Health Statistics (NCHS) report in early February  also showed that teen births have fallen to record-low levels.

    Going hand-in-hand with the decline in the teen birth rate were decreases  in the percentages of US boys and girls who became sexually active during  their teen years and in the percentage of sexually active teens who did not  use birth control, the CDC study found.

    In 2009, less than half of teens — 46 percent — had had sexual  intercourse, compared to 54 percent in 1991.

    And among sexually active US teens, 12 percent said in 2009 that they did  not use birth control the last time they had sex, compared to 16 percent 20  years ago.

    Teen births raise concern because babies born to teens are more likely to  be underweight or preterm than infants born to older women, and are more  likely to die during infancy, both the CDC and NCHS reports say.

    “Teen childbearing also perpetuates a cycle of disadvantage: teen mothers  are less likely to finish high school, and their children are more likely to  have low school achievement, drop out of high school, and give birth  themselves as teens,” the CDC report said.

    “Each year, teen childbearing costs the United States approximately $6  billion in lost tax revenue and nearly $3 billion in public expenditures.  However, these costs are $6.7 billion lower than they would have been had teen  childbearing not decreased.”

    But, despite the good news, the US teen birth rate remains one of the  highest in developed countries, says the CDC report, citing the most recent  available UN data.

    According to the UN Demographic Yearbook 2008, the teen birth rate in  Canada was 14 per 1,000 girls, in Japan it was five per 1,000 and in Singapore  around six per 1,000 girls.

    In France and Germany in 2008, around 10 babies were born to every 1,000  girls age 15 to 19.

    The highest teen birth rate in Europe was in Bulgaria, where in 2008, 43.4  babies were born per 1,000 teen girls.

    To bring down the US teen birth rate, “teens need sex education, the  opportunity to talk with their parents about pregnancy prevention, and those  who become sexually active need access to affordable, effective birth  control,” the CDC said.

    But only around two-thirds of girls and just over half of boys in the  United States received sex education about both abstinence and birth control,  and even smaller percentages — 44 percent of girls and fewer than three in 10  boys — spoke with their parents about sex.

    Sexually active girls were more likely to have received a method of birth  control or a prescription for a contraceptive method from a health care  provider if they had had a sex talk with their parents.

    Sixty-four percent of girls who spoke with their parents about sex had  access to a method of birth control compared to 37 percent who had not had the  sex chat.

    Last month, two Democratic Party lawmakers proposed a bill to end funding  for abstinence-only sex education, saying the policy favored by the  administration of former president George W. Bush had wasted more than $1.5  billion.

    Washington, April 5, 2011 (AFP)

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    Over half (59%) of middle income households would be unable to provide for themselves and their families for longer than six months if they lost their main source of income, according to a report being published today by Friends Life.

    Fuelled by the fear that over half of people unemployed in the UK have been so for over six months (52%), this group – termed the ‘Coping Classes’ – is now focused on reducing debt to stave off the threat of a potential financial survival gap.

    According to the report, entitled ‘The Coping Classes’ and part of Friends Life’s Vision of Britain 2020 series, the recent recession has radically altered attitudes towards debt for a generation.  The group, who make up one in five working age adults in the UK, are committed to shopping around and reducing their borrowings as part of a series of coping mechanisms to help them survive the ongoing effect of the downturn.

    The Coping Classes are middle income earners (£25-50k) who have been impacted by the recession and feel disproportionately affected by public sector spending cuts, as part of the government’s deficit reduction plans.

    With their finances under attack from rising inflation, an expected hike in interest rates and a fragile housing market, the Coping Classes are embracing a new set of behaviours to halt further erosion of their income, including a radical change in attitude towards debt.  84% of them say they are committed to avoiding taking on any more debt in the next six months and nearly three-quarters say they are putting plans in place to pay off most of their debt within ten years.

    Commenting on the findings, David Hynam, Executive Director, Operations at Friends Life, said:

    “Five years ago the Coping Classes were comfortably off, but the recession and the effects of public spending cuts seemingly tilted against them has changed their status.  We’re now seeing them take clear, decisive and urgent steps to address this, in the knowledge that state support and assistance in many areas is unlikely to return.

    “Most striking is the new attitude towards debt. We’re witnessing a slow march down the debt mountain, which will have huge implications for financial planning and for the financial services industry.”

    Other coping mechanisms being employed to survive the downturn identified in the report, include:

    – A renewed commitment to retirement funding: Almost half of the Coping Class identify saving for retirement or for a rainy day as the main reason for saving compared to the rest of the adult population who put saving for a holiday or travel top of the list. Nearly 60% of the Coping Classes believe it is more important than ever before to invest in a pension.

    – The Alexander Effect: the Coping Classes lead the way in shopping around for the best deal. Encouraged by the nation’s favourite meerkat, 70% of them use price comparison websites (compared to just 61% of other adults). According to the report, this has created an emerging social kudos attached to getting the best deal, with more than one in four of the Coping Classes claiming people go to them for financial advice as a result of their savvy approach.

    – Looking after the pennies: overall there has been a 20% increase over the last two years in the number of households who say they are ‘carefully budgeting’ their household spending, with 95% of those that do budget maintaining that they adhere strictly to their budget plan.

    The Coping Classes emerge in the report as a savvy group who are already responding to government spending cuts by assuming more responsibility for their futures.  Fifty percent of them agree that it is the individual’s responsibility to make provision for their own retirement, rather than rely on the state.

    Yet they are also calling on the government and financial institutions to help ease their way.  When asked which of a raft of measures would benefit them most financially – including help with care for elderly relatives and access to affordable childcare – the most highly-rated answer was less complexity in the tax and benefits system, followed by financial products tailored to needs.

    “We’re seeing a new kind of financial activism at play amongst the Coping Classes.  They’re introducing their own personal programme of spending cuts but they want the government and industry to meet them half way”, said David Hynam.

    Source : Friends Life Press Release

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    Proposed Solvency II rules could make the insurance sector more vulnerable to economic downturns and force companies to charge higher prices, senior industry figures have said in an open letter to Michel Barnier, the European Commissioner for Internal Market and Services.

    Europe’s four major industry bodies signed a joint letter to Mr Barnier objecting to onerous new capital requirements imposed by Brussels, reflecting growing concern at how Solvency II will damage the industry.

    The industry bodies – the European insurance and reinsurance federation CEA, the Pan European Insurance Forum, the European Insurance CFO Forum, and the Chief Risk Officer Forum – warned that parts of the draft rules were “excessively conservative and prescriptive” and said the changes would “risk driving insurers out of their long-term business”.

    “Stakes are high and time is running out: a failure to properly implement this reform would have dire consequences for an industry that represents a significant component of the EU economy, capital markets, old age savings and jobs.”

    Solvency II, which has been under discussion for a decade, is being designed to protect consumers by ensuring insurers hold reserves in proportion to the risks they underwrite. The Solvency II framework is being formulated by the European Insurance and Occupational Pensions Authority and the European Commission.

    It is due to come into effect in January 2013 but is still not finalised and recent tests found it to be prohibitive in areas such as disaster insurance.

    The letter stopped short of calling for Solvency II to be abandoned but said Mr Barnier and the new EU insurance super-regulator should resolve the concerns by the summer.

    Source : Financial Times

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    From 1 April, Members of Broker Network (BN) will be able to trade with commercial insurer MMA via BN’s Network Trading Room.

    BN asked MMA to join the Network Trading Room following a recent survey of its Members which named MMA as one of the insurers brokers asked to be included in the facility

    MMA underwriters will be available to write new bespoke SME risks. The move builds on the strong relationships MMA has been developing with BN brokers over the last three years through MMA’s regional offices.

    MMA’s Underwriting Director Commercial Paul Hodgson said: “We’re thrilled to have been asked by BN to join their Network Trading Room. This is a great opportunity for us to build stronger relationships with BN Members and will result in a considerable increase in the volume of business we’re writing. It also gives us a chance to show what we can do in contrast to some of our larger competitors.

    “Broker Network set up its Trading Room because many of its Members didn’t feel they were getting the service they deserved from the larger commercial players. We believe our commitment to high quality locally-based underwriting combined with our appetite for new commercial business will prove a great proposition for BN Members.

    Managing Director of Broker Network, Nick Houghton added:

    “The Network Trading Room has proved to be a huge success amongst our Members as it provides timely, reliable underwriting from a panel of reputable carriers. MMA will fit perfectly into the ethos of the room, with their “can do” approach to writing business and a willingness to trade efficiently with our growing Membership.”

    MMA will continue to have a number of package products available online via Broker Online and PowerPlace including Residential Property Owners, Shops, Offices & Surgeries, and Master Tradesman.

    Source : MMA Press Release

    0 1

    Prior to the recent Budget nearly three quarters (71%) of the UK population said they wouldn’t leave money to charities in their Will, according to research by long-term savings and investment company Standard Life.

    In the past year more than two-fifths (43%) of Britons said they would rather leave their estate to friends and families than give money to charities.

    Other reasons why the public don’t plan to give to charities include a quarter (27%) thinking they couldn’t afford to do so and one in 10 (10%) believing they give enough money to charity during their lives.

    However, the Chancellor has announced plans to introduce an inheritance tax saving from April next year to those willing to leave 10 per cent of their estate to charities. This could drive a change in attitude from the general public when considering the third sector in their Will.

    Julie Hutchison, head of estate planning at Standard Life, said: “As families face economic uncertainty and tightening purse strings it’s easy to see why the public might not consider charities in their Wills. But under the new proposals the amount of tax they could pay will drop from 40 to 36 per cent, from next year. This will mean they could provide more to their family by donating money to charitable causes, which could be a ‘win-win’ for both parties.

    “The complications surrounding IHT and estate planning are vast. And the announcement in the Budget certainly doesn’t make the difficult decision of who to leave your money to any easier. Hopefully what this announcement has done though is encourage people to review and revise their Wills, or even create one. To ensure everything is done correctly I would encourage people to seek professional advice to discuss their estate planning requirements.”

    The research shows the people of Wales & the South West of England and Scotland are the least likely (73%) to leave part of their estate to charity. These regions are closely followed by the North of England (72%) and the Midlands (71%) with the South East (69%) the most likely to do so.

    The research also shows single people (35%) are more likely to give their estate to charities than married/cohabiting or widowed/separated/divorced couples. Nearly three quarters (73%) of men do not plan to consider a charity in their Will – this is higher than the equivalent statistic for females (69%).

    Source : Standard life Press Release

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