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Following the establishment of its Brazilian operation in 2009, Lloyd’s underwriter Liberty Syndicates, a member of Liberty Mutual Group, has moved its growing team to larger premises in the country’s biggest city, São Paulo.

The São Paulo and Rio de Janeiro offices were opened in 2009 as part of Liberty Syndicates’ strategy to capitalise on regulatory changes that resulted in a more liberalised local reinsurance market.  The move to a larger office is part of the planned expansion of the syndicate’s local reinsurance capability.

Both Liberty Syndicates offices in Brazil provide brokers access to Treaty and Facultative Reinsurance products, including Property, Specialist Lines and Marine.

Florian Kummer, Liberty Syndicates’ Manager for Latin America, who is based in São Paulo, said: “We moved into the Brazilian market in 2009 because we could see plenty of opportunities with the opening up of the local reinsurance market. By expanding our operations in Sao Paolo, we will have the capacity to pursue opportunities resulting from the new financial landscape created by South America’s strong economic growth.”

The new Liberty Syndicates office is located at 21st Floor – Conj 212, Edificio Igarassu, Rua Surubim, no 577, São Paulo.

Source : Liberty Syndicates Press Release

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The Lloyd’s of London insurance market is confident it can deal easily with claims from Japan’s earthquake even though natural disasters almost halved its profit last year.

Lloyd’s said its businesses had enough capital to withstand a Japanese quake generating insured losses of up to $64 billion (39.9 billion pounds), which compares with the $20 billion to $30 billion hit from the March 11 disaster expected by risk-modellers AIR Worldwide.

“As part of our market oversight we have a realistic disaster scenario which looks at a $64 billion earthquake centred on Tokyo,” Lloyd’s finance chief Luke Savage told Reuters.

“We think that this loss which we have seen will come well within that.”

Lloyd’s plans to give an initial estimate of how much the quake will cost it in May, Savage said.

Credit investors reacted positively, with Lloyd’s of London 5.625 percent 300 million euro bond tightening by 8 basis points on the day, bid at 306 basis points over swaps, according to Tradeweb.

The earthquake, one of the most powerful ever to hit Japan, triggered a tsunami off the country’s north-eastern coast and killed over 11,000 people, with thousands more missing.

The Japanese government has estimated the total economic impact at $198 billion-$309 billion, although the insurance industry is expected to pick up only a fraction of this as most losses to households are covered by a state-funded programme.

Outside Japan, global reinsurers are expected to be most exposed, with sector leaders Munich Re and Swiss Re estimating their losses at $2.1 billion and $1.2 billion respectively.

The Japanese quake followed a spate of disasters in 2010 including earthquakes in Chile and New Zealand and floods in Australia which cost insurers $43 billion, a 60 percent increase on the previous year, according to Swiss Re.

Lloyd’s, which traces its origins back 323 years to a London coffee house where merchants met to insure ships, said last year’s disasters pushed the combined pretax profit of its 85 syndicates down 43 percent to 2.2 billion pounds.

Analysts said that with catastrophe losses already mounting up ahead of the June-November U.S. hurricane season, Lloyd’s profits were likely to fall again in 2011.

“At this stage, I’d say profits will be lower,” said Nick Pope at stockbroker Jefferies.

“The Japan earthquake is a serious loss, the New Zealand earthquake is a serious loss, and the north Atlantic hurricane season, which is traditionally a very active period for losses, has not yet begun.”

The Chilean earthquake of February 2010 was the single costliest event for Lloyd’s last year, accounting for about 40 percent of 2.17 billion pounds in total net claims.

That made 2010 the market’s most expensive year since 2005, when it paid out a record 4 billion pounds, adjusted for inflation, in the wake of hurricane Katrina.

The market, made up of competing insurance and reinsurance syndicates who provide cover against large-scale, complex risks, was also hit by a 29 percent drop in investment income amid weaker financial markets and low interest rates.

Separately, insurer Hiscox (HSX.L), which operates in the Lloyd’s market, said the Japanese quake could cost it about $100 million.

Source : Reuters

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The Lloyd’s of London insurance market said  Wednesday that profits sank last year due to major claims arising from  earthquakes in Chile and New Zealand, floods in Australia and the BP oil spill.

Pre-tax profits tumbled 43 percent to £2.20 billion ($3.5 billion, 2.5  billion euros) in 2010 from £3.87 billion in 2009, Lloyd’s said in a results  statement, as it was also hit by lower investment returns.

“In 2010, Lloyd’s made a profit of £2.2 billion despite facing significant  claims from the tragic earthquakes in Chile and New Zealand, the floods in  Australia and the loss of the Deepwater Horizon oil rig in the Gulf of  Mexico,” Lloyd chairman Lord Levene said.

“The catastrophes of 2010 and 2011 have shown the crucial role insurance  plays in helping communities rebuild after a crisis.”

“We must also keep in mind that insurance is part of a wider financial  services industry that is essential to Britain’s economic recovery. We look to  the government to protect the competitiveness of our industry and its  contribution to both society and the economy.”

Lloyd’s said that 2011 has already proved to be an “extraordinary” year of  disasters, following Japan’s devastating March 11 earthquake and tsunami which  has sparked a nuclear crisis.

“2011 has already been an extraordinary year of tragic natural disasters,”  added Lloyd’s chief executive Richard Ward.    “We extend our deepest sympathies to those affected and we are working hard  to make sure claims are dealt with swiftly so communities in Japan, New  Zealand and Australia can rebuild and recover.”

London, March 30, 2011 (AFP)

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Specialist protection and healthcare insurer Exeter Family Friendly has released its income protection claims statistics for 2010, confirming it paid over 95% of all claims received during 2010.

The Exeter based mutual, which was the first income protection insurer to publish its data in 2005, has released the impressive statistics with the aim of promoting consumer confidence in income protection.

Commenting, Chief Executive Andy Chapman said:

“We made a commitment to publishing our claims numbers in 2005 and we’ve done so ever since. Paying claims is what we’re here to do; so to me there’s nothing more natural than publishing these statistics.”

“More and more providers are now releasing their claims statistics, whilst there are still a few who don’t. I’m not going to issue another rallying call to those few, just reiterate that the reason for releasing statistics in the first place was to raise confidence in the product as a whole, not score points over one another.”

The statistics not only highlighted the overall claims paid, but also categorised claims according to reason, the type of illness or injury.

The most common cause for claim was muscular and skeletal injuries and disorders (excluding back) with 25.56% of claims related to these conditions, whilst the least common cause was as a result of lacerations, scalds and burns which accounted for just 1.74%.

Head of Intermediary Sales, Mike O’Brien commented:

“The fact that over 5% of our paid claims during 2010 were made as a result of viruses, flu and colds shows exactly what we’re about; we’re here to protect our customers and their families from the impact of ill health and if it stops you working, it has an impact.

At the end of the day, to the self-employed and employed people with limited sick pay what keeps them off work doesn’t matter, they’re simply concerned with how to pay their bills in the short term.”

Source : Exeter press Release

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There is growing anger at the Government’s broken promises on State Pension Age rises, according to Age UK, as new figures reveal the number of affected women outstrips the majorities of MPs in 40 constituencies – a sixth of the House of Commons.

The charity is warning that millions will be denied the chance to plan properly for their retirement if the Government pushes ahead with its plans to speed up the rise in State Pension Age.

On the day that the Pensions Bill enters a key stage in the House of Lords, Age UK is predicting an angry backlash from female voters if the Bill goes through unchanged. Those potentially most at risk are the 19 Conservative MPs, 16 Labour MPs and five Liberal Democrat MPs who have a smaller majority than the number of women aged 56-57 in their constituencies the vast majority of whom will be directly affected by the plans.

Of those women, only those who turn 58 before 6 April this year will not be affected by the changes.

Those most at risk – top 10 constituency hotspots:

MP PARTY CONSTITUENCY
  • 1. Nicola Blackwood MP
 Conservative Oxford West and Abingdon
  • 2. Jackie Doyle-Price MP
 Conservative Thurrock
  • 3. Matthew Offord MP
 Conservative Hendon
  • 4. Glenda Jackson MP
 Labour Hampstead and Kilburn
  • 5. George Eustice MP
 Conservative Camborne and Redruth
  • 6. Lorely Burt MP
 Liberal Democrat Solihull
  • 7. Gloria De Piero MP
 Labour Ashfield
  • 8. Julie Hilling MP
 Labour Bolton West
  • 9. Mark Spencer MP
 Conservative Sherwood
  • 10. Annette Brooke MP
 Liberal Democrat Mid Dorset and North Poole

 

Over the past few weeks the charity has been inundated with emails and letters from thousands of women who are furious that having already revised their retirement plans to accommodate previous State Pension Age changes, they may now have to wait even longer for their pension. The vast majority of these women have signed up to Age UK’s State Pension Age campaign and emailed their local MP asking them to support the Early Day Motion calling on the Government to revise the timetable for change.

In its current form the Bill intends to speed up the equalisation of the State Pension Age between men and women and increase the State Pension Age to 66 by 2020 – six years earlier than previously planned. Age UK is warning that these plans not only break a clear promise made in the Coalition Agreement last year but will fail to have an impact on the country’s deficit because no savings will be made until 2016 at the earliest – by which time the Government plans to have eliminated the deficit entirely.

Recent focus group research for the charity revealed a high level of anger about the plans. Despite a clear understanding of the need for an increased State Pension Age due to increasing life expectancy, the participants were universally shocked by the speed of the hike in State Pension Age. More worryingly many mistakenly believed they were still going to retire at 60.

If given the green light, the Government’s plans will not only cost the worst affected women up to £10,000 in lost pension income, they will force millions of women and men to wait longer for vital benefits such as Pension Credit which will also go up in line with the State Pension Age.

The changes, which will affect almost five million people, will force even greater hardship on those who are more heavily reliant on the state pension: those from poorer backgrounds with lower than average life expectancy; those who suffer from health problems or a disability, limiting their ability to carry on working; those who are unemployed with little hope of finding work in their fifties and already stuck in financial limbo; and those with full-time caring responsibilities.

Michelle Mitchell, Age UK’s Charity Director, said: “By breaking its promise on the State Pension Age, the Government is hurting millions of hard-working people who believed their retirement was just around the corner. MPs must wake up to the unfairness of these proposals and the level of anger simmering away in their constituencies.

“Given that life expectancy is increasing, the Government is right to look at reforming the pensions system. But this is too much, too soon. The Pensions Bill must be amended to ensure that the current timetable for equalisation remains and any increase to the State Pension Age beyond 65 does not start until at least 2020.

“Pressing ahead with these changes will deny millions of people the chance to plan properly for retirement. And it will condemn the very poorest in our society to yet more hardship as they struggle to manage without the state pension and benefits they were counting on.”

Marion, born June 1954, said: “It seems most unjust and unfair that having worked for 40 years and contributed so much to the economy this is being forced on me with so little time and opportunity to make any arrangements”

Christine, born July 1954, said: “It’s appalling. We’ve already accepted one change but it’s the fact that we are getting a double whammy… When cutbacks are shared across the population that’s OK but this is a case where a small group has been singled out for extra sacrifice because of our date of birth. That’s unfair.”

Source : Age UK Press Release

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Which? has today submitted a super-complaint to the Office of Fair Trading (OFT) asking it to investigate excessive credit and debit card surcharges.

The consumer champion warns that these charges are unjustifiable and becoming increasingly widespread. While the cost to companies for taking payment by card is around 20 pence to process a debit card payment, and no more than 2 per cent of the transaction value for a credit card, researchers found dozens of examples of companies charging far higher fees.

Some of the worst offenders included:

– A £25 debit card charge to pay a £5,000 deposit to rent a flat through Foxtons, one of London’s biggest letting agents.

– Train booking site The Trainline adds a £3.50 charge for paying by credit card, while Eurostar charges £4.

– London cab firms Dial-a-Cab and Radio Taxis add 12.5 per cent to the cost of their fares for paying with a debit or credit card, and Addison Lee charges £4.40.

– Bath and North East Somerset council charges a 3 per cent credit card charge, while the DVLA adds £2.50 for paying by credit card.

– Admiral Insurance levies a £5.95 fee for credit card use; Swinton Insurance charges 2.5 per cent.

– AOL charges £1.99 on both credit and debit cards

– A family of four booking a return flight with Ryanair would be charged £40 to pay by debit or credit card.

Source : Which Press Release

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The Association of Medical Insurance Intermediaries (AMII) is calling on the Chancellor George Osborne to remove the disincentives in the current tax treatment of employer-paid private medical insurance (PMI) ahead of this week’s Budget, as a way of alleviating some of the cost pressures on the National Health Service.

“The current tax treatment of employer funded PMI is not only inconsistent with how other forms of group risk insurance are treated, but is also a perfect example of taxation working against the good intentions of other Government initiatives,” commented Andrew Tripp, Chairman of AMII.  “Removing the current tax disincentive for employers who wish to fund private healthcare for their employees, would not only have a positive effect on the public finances, by relieving pressure on over-stretched NHS budgets, but prompt access to treatment will also result in lower welfare costs for the Government.”

The previous Labour administration introduced the Employers National Insurance charge on employer-paid private medical insurance.  This charge is due to increase to 13.8% from April this year and comes on top of the 1% increase in Insurance Premium Tax to 6% effective from January 2011.  In addition, employees are also taxed on the cost of this benefit, as a P11D benefit-in-kind, at their marginal rate of tax.  These tax charges are not applied to other group risk health insurance benefits – such as group income protection and group critical illness – or on health prevention benefits such as employee health screening.

Source : Amii Press Release

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Water damage to homes comes with the warm arrival of spring. Data from Aviva Canada indicates that 40% of all home insurance claims are a result of water damage. Aviva Canada data also shows that the average cost of a water damage claim rose 160%, from $5,423 in 2000 to over $14,000 in 2010.

“It’s no secret that water damage to the home is on the rise, both in frequency and severity,” said Wayne Ross, vice president of property claims for Aviva Canada. “The growth can be attributed to two main causes. First, we’ve seen an increased frequency of severe rainstorms compounded by the lack of sufficient infrastructure in most communities to handle large amounts of water in a small period of time. The second key factor behind the dramatic increase is the amount that homeowners are investing in finishing their basements.”

In 2010, Aviva Canada paid out over $124 million in property water damage claims. A provincial breakdown of the increase in the average cost of water damage claims from 2000 to 2010 is included below.

Province* % increase in average cost of water damage claim from 2000 to 2010
British Columbia 205%
Alberta 183%
Ontario 182%
New Brunswick 120%
Quebec 117%
Nova Scotia 68%
Newfoundland and Labrador 51%
National Average 160

 

 

 

 

 

 

 

Homeowners are encouraged to take a few steps to help ensure they do not fall victim to home water damage:

– Inspect your roof:  To prevent leaks, get the roof inspected every few years to check the condition of the shingles. Clear out gutters to prevent blockages that could force water into your home.

– Install a backwater valve:  These valves close automatically if the sewer backs up and can prevent thousands of dollars in damage.

– Scope out your sump pump: If your basement has one, examine it and do a test run if it doesn’t get used frequently.

– Divert snow away from your home: Ensure that snow is removed around your home, its foundation, doors and basement windows.

– Check your foundation: This is especially important as the ice melts.  If you notice water pooling, attempt to lead the liquid away from your home.

– Ensure your window wells are debris-free: Clear any accumulated garbage or leaves to allow water to drain properly.

– Ensure street catch basins are not blocked: These prevent snow from building up on street level and seeping towards your property.

– Protect your valuables: If your home is prone to water damage, consider moving valuables away from high risk areas, such as the basement.

– Start right: If you are finishing your basement, make sure to seal your exterior walls.

Consumers are encouraged to speak with their insurance broker or insurer to understand what types of water damage are covered by their policy. For example, many Canadians are unaware that overland flooding, such as water swells from nearby rivers or lakes, is not covered under standard home insurance policies and not widely available.

Source : Aviva Press Release

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    The global cost of natural and man-made  disasters more than tripled in 2010 to $218 billion (154 billion euros),  reinsurer Swiss Re said Tuesday, with the human toll the highest for decades.

    “2010 was not only characterised by severe earthquakes that ranked among  the deadliest, costliest and most powerful in history, but also by a series of  extreme weather events, such as major floods,” said Thomas Hess, chief e  economist of Swiss Re.

    Such “severe catastrophes” claimed 304,000 lives last year the highest  level since 1976, compared to 15,000 in 2009, the report added.

    These disasters cost the global insurance industry over $43 billion in  2010, up more than 60 percent from the previous year.

    Earthquake losses — in particular those in Chile and New Zealand —  accounted for almost a third of all disaster losses in 2010, and high claims  from seismic activity are expected to continue in 2011.

    “Incidentally, earthquake losses for 2011 will also be above average as the  total insured claims for the February 22 earthquake in Christchurch, New  Zealand, are estimated to be between $6 billion and $12 billion,” said the  reinsurer.

    “The massive Tohoku earthquake that struck Sendai, Japan on March 11 is  also expected to trigger significant insured losses,” it added.

    Swiss Re estimated last week that Japan’s earthquake and tsunami have cost  the company some $1.2 billion, but warned that this figure could be revised  upwards.

    “Although no long-term trend of increasing global earthquake activity has  emerged, the number of fatalities and insured losses from earthquakes are on  the rise,” said Balz Grollimumd, who co-authored Swiss Re’s study on disasters.

    “The main reasons are population growth, the higher number of people living  in urban areas as well as rising wealth and rapidly increasing exposures. Many  of these rapidly growing urban areas are located in seismically active areas,”  he noted.

    More than 222,000 people were killed in Haiti’s earthquake, the deadliest  disaster in 2010.

    The $218 billion worldwide economic losses from natural and man-made  catastrophes last year compared to $68 billion incurred in 2009, Swiss Re said.

    Zurich, March 29, 2011 (AFP)

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    Aon Benfield, the global reinsurance intermediary and capital advisor of Aon Corporation, today celebrates the 50th anniversary of its Thailand operations.

    The firm’s Thailand division was established as IBEC RBH Center on March 28, 1961 in response to a period of rapid growth in Thailand’s insurance industry, and has since provided on-the-ground expertise to both domestic clients and international markets.

    During its 50-year history, the division has undergone several transformations before finally becoming Aon Benfield Thailand in December 2008. It is now Thailand’s largest reinsurance broking organization across both facultative and treaty business.

    Vinod Krishnan, Executive Director of Aon Benfield Thailand, commented: “During the 50 years of our Thailand office, we have demonstrated our ongoing commitment to our Thai clients, who have appreciated our presence, knowledge and skills in the local and worldwide markets. We continually bring to our clients the full spectrum of Aon Benfield’s global offering, including our sophisticated financial and catastrophe modeling tools, rating agency services, and dynamic portfolio analysis solutions, and we are always working on their behalf to ensure they achieve their unique business objectives.”

    Aon Benfield Thailand recently became the first intermediary to introduce life reinsurance services to the Thai market, and remains the only global intermediary with a fully-fledged reinsurance office in the country.

    The division will be hosting a cocktail event to mark its 50th anniversary celebrations, which will bring together all its Thailand clients, and key domestic and international markets.

    In addition, all clients will receive a personal letter of thanks for their support throughout the numerous transformations of the business over the past 50 years, which are outlined below:

    –      March 1961                   IBEC RBH Insurance Center Ltd.

    –      May 1967                        Rolibec International (Thailand) Ltd.

    –      July 1975                        Rollins Heath (Thailand) Ltd.

    –      July 1978                        H L R Re Ltd.

    –      Oct 1985                         HH L Re Ltd.

    –      July 1996                        Aon Re (Thailand) Ltd.

    –      December 2008           Aon Re (Thailand) Ltd, trading as Aon Benfield Thailand

    Source : Aon Benfield Press Release

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    Aviva will invite journalists Wednesday 30 March to a roundtable debate where results will be communicated and hot topics debated upon.

    The topic of debate will be ‘Building your business in 2011 and beyond: what are the biggest challenges for individual intermediary businesses?’

    Aviva will also be releasing the findings of exclusive research analysing the issues and concerns of IFAs with regard to growing their business, income streams, legislation and remuneration.

    This event will act as a forum for key commentators including Dean Lamble (Aviva’s Distribution Development Director), Robert Sinclair (Director, AIFA), Dev Malle (Sales and Marketing Director, Personal Touch Financial Services) and Nick Bamford (Chief Executive, Informed Choice) to share their views on how intermediary firms can prosper in the current economic crisis both as a business and as a consultancy.

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    RAC has around 2,000 patrols that attend 2.8m breakdowns each year, including overseas breakdowns through its RAC Europe unit.

    JP Morgan has been handed the task of selling the car breakdown specialist although any deal is unlikely to see Aviva recoup its original investment. Sources close to the insurer now value the business at between £600m-£700m with Aviva having already disposed of parts of RAC, such as the BSM driver training school and Auto Windscreens.

    RAC, which can trace its roots back to 1897, first introduced uniformed patrols to the UK in 1901. The company now has around 2,000 patrols that attend 2.8m breakdowns each year, including overseas breakdowns through its RAC Europe unit.

    Back in 2005, Aviva claimed the acquisition of the company would create cross selling opportunities and lead to higher customer retention – the “holy grail for insurers”. Despite this, the unit has not performed as strongly as hoped and is now viewed as a non-core asset.

    The potential disposal will not come as a surprise to most industry insiders with Andrew Moss, Aviva’s chief executive, having warned he will target under-performing businesses across the group this year in a bid to slim down its global operations.

    Last week, industry trade magazine Insurance Times revealed Aviva had turned RAC into a standalone business with a new management team in preparation for a sale. Potential bidders for the unit are likely to include private equity firms, which
    have been circling UK insurance assets in recent months.

    Aviva declined to comment although sources said the sale process was still at “a very early stage”.

    News of a potential disposal came as Aviva published its 2010 annual report. This revealed that the company’s directors were handed a combined remuneration package of £7.75m last year – with Mr Moss receiving £2.49m, up marginally from the £2.47m he received in 2009.

    Aviva shares, which have risen by almost 10pc this year, closed down 1.1 at 431.6p on Thursday.

    Earlier this month, the group impressed analysts and investors by unveiling a 35pc jump in pre-tax profits to £2.44bn in 2010. At the time, Mr Moss insisted Aviva had “outperformed” the market in a “tough external environment”.

    The company has also unveiled plans to cut its hybrid debt by £700m over the next three years and has eradicated its pension deficit, which stood at £1.7bn at the end of 2009.

    Source : The Telegraph

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    Fitch Ratings has affirmed non-life insurer Westfaelische Provinzial Versicherung AG’s (WPV) and life insurer Provinzial NordWest Lebensversicherung AG’s (PNWL) Insurer Financial Strength (IFS) ratings at ‘A+’ with Stable Outlook.

    WPV and PNWL are part of the German Provinzial NordWest (PNW) insurance group. Fitch views WPV and PNWL as core entities of PNW. The agency also views PNW as an integral part of the German savings bank group Sparkassen-Finanzgruppe (Sparkassen) (SFG), which has an Issuer Default Rating (IDR) of ‘A+’ with Stable Outlook.

    The ratings reflect Fitch’s view of PNW’s strategic importance within SFG, PNW’s very strong capitalisation, prudent reserving methods and WPV’s strong underwriting performance. Negative rating factors include PNW’s high exposure to windstorms caused by its significant share of home insurance in non-life business which is mitigated by adequate reinsurance, and its regional focus on north-west Germany which limits PNW’s regional diversification and growth potential.

    However, PNW has a strong market position in its home market, which is supported by its dense agency network in its home region and the continuous stable product distribution through SFG banks. PNWL’s ability to attract single premium business also benefits from the company’s membership of SFG.

    In 2009, PNW achieved a net investment return rate (NIRR) of 4.7% (2008: 1.8%) and Fitch expects the NIRR for 2010 will again be over 4%. After the financial crisis led to insufficient investment income to cover guaranteed interest rate (GIR) payments in 2008, PNWL restructured its investments in 2009. Fitch believes that PNWL’s investment restructuring was successful as investment income was sufficient to cover guaranteed interest rate (GIR) payments in 2009 and 2010.

    WPV’s underwriting performance was strong in 2009 and 2008, as shown by its gross combined ratio (CR) of 88.0% (2008: 90.8%), far below the German non-life market average of 94.5% (2008: 93.6%). However, Fitch expects a significant increase in WPV’s gross CR for 2010, as PNW has already announced an increase in gross claims of about 11% for 2010. However, Fitch expects PNW’s comprehensive reinsurance programme to mitigate its net claims.

    Key rating drivers for the ratings include PNW’s strategic importance within SFG. Any movement in SFG’s rating could be reflected in PNWL’s and WPV’s rating.

    PNW had total assets of EUR21.6bn at end-2009 and reported gross written premiums (GWP) of EUR3.2bn in 2009. PNW announced a GWP increase of 1.7% for 2010. PNW consists of several operating insurers, of which WPV with total assets of EUR2.1bn and PNWL with total assets of EUR17.8bn form the largest entities.

    Source : Fitch Ratings Press Release

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    XL Re and Aon Benfield today announced that XL Re Ltd, XL’s Bermuda-domiciled reinsurance subsidiary, has teamed up with Aon Benfield to become the first local reinsurer to successfully implement automated accounts and cash transactions using Association for Cooperative Operations Research and Development (ACORD) messaging standards.

    XL Re Ltd has also implemented automated accounts, cash and claims messaging for all London brokers, including Aon Benfield. The system is integrated with XL Re’s single, global IT reinsurance platform.

    Charles Cooper, President and Chief Underwriting Officer of XL Re Ltd, said: “XL Re Bermuda is proud to be a leader in this effort to raise the standards of electronic data sharing.  The implementation of messaging for backend processing of Bermuda business provides efficiencies by allowing our internal resources to spend more time on business analysis and less on data entry.”

    Ian Summers, Joint Chair of the Rüschlikon initiative and Director of Change Strategy at Aon Benfield,  added: “The adoption of electronic messaging to support the premiums and claims processes is part of Aon Benfield’s global initiative to enhance client service and provide operational efficiencies for our trading partners. The use of ACORD standards and the Rüschlikon initiative are vital components in globalizing this process.”

    The announcement comes as representatives of Aon Benfield’s Global messaging team and other members of the Rüschlikon team are meeting with companies in Bermuda to highlight the advantages of the Rüschlikon Initiative. The not-for-profit venture was started in 2009 and brings together global brokers and reinsurers to identify and realize the business benefits of sharing electronic data using ACORD messaging standards.

    The Initiative aims to achieve the following benefits for its members:

    – Higher  efficiency through the elimination of redundant data capturing and better data quality;

    Process certainty through commonly agreed upon rules and performance standards;

    – Data certainty through the mapping to a single market standard (ACORD XML messages);

    – Process acceleration through automation and reduction of exceptions; and

    – Smoother cash flow and reduction of unallocated payments.

    Greg Maciag, CEO of ACORD, noted: “ACORD standards only realize full potential when trading partners use them to exchange information.  In fact, working with communities of ACORD members (like Rüschlikon) has become a major initiative for us.  Both XL Re and Aon Benfield are the leading organizations driving electronic trading across the industry.  The benefits they realize are well deserved and will serve as models for other trading partners to follow.”

    Source : Aon Press Release

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    Mike Penning MP, Parliamentary Under Secretary of State (Department for Transport), said yesterday that continuous insurance enforcement (CIE) will help drive uninsured drivers off the road without a shadow of a doubt.

    During his address at the British Insurance Brokers’ Association’s (BIBA) parliamentary reception in the House of Commons he also said that CIE is one of largest changes since legislation went on to the statute book.

    Penning thanked the insurance industry for the work they had done together on continuous insurance enforcement, saying he wanted to “drive down the risk and work together”.

    Penning also spoke about allowing insurers to confirm details such as a driver’s penalty point record with the DVLA to reduce fraud.

    Graeme Trudgill, BIBA’s Head of Corporate Affairs, said: “We welcome the Minister’s comments, CIE has been a great example of how the insurance sector can work closely with Government for the benefit of motorists, we will be working hard over the next few months to ensure insurance brokers are ready for the launch of CIE and doing everything we can to help motorists comply.”

    CIE is the new offence of being the keeper of an uninsured vehicle where a Statutory Off Road Notification (SORN) has not been made. It will systematically compare records between the Motor Insurance Database (MID) and the DVLA’s registered vehicle database to identify keepers of potentially uninsured vehicles.  This will clearly identity the 1.4 million vehicle keepers who do not have a valid insurance policy on the MID.

    Following an initial warning letter, a series of escalating penalties will apply starting at a £100 fixed penalty through vehicle clamping, seizure and destruction of the vehicle, as well as court prosecution and a fine of up to £1,000.

    Source : BIBA Press Release

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    Warren Buffett believes Japan’s devastating earthquake is the kind of extraordinary event that creates a buying opportunity for shares in Japanese companies.

    Japan, the world’s third-largest economy, has been battling to bring an overheating nuclear plant under control after it was battered by the March 11 earthquake and tsunami that rattled global markets and prompted massive intervention in currency markets by the Group of Seven industrial nations.

    “It will take some time to rebuild, but it will not change the economic future of Japan,” Buffett said on Monday on a visit to a South Korean factory run by a company owned by one of his funds. “If I owned Japanese stocks, I would certainly not be selling them.

    “Frequently, something out of the blue like this, an extraordinary event, really creates a buying opportunity. I have seen that happen in the United States, I have seen that happen around the world. I don’t think Japan will be an exception,” said the 80-year-old investor, dubbed the “Sage of Omaha” for his successful long-term investment strategy.

    Buffett heads Berkshire Hathaway Inc, which has substantial insurance and utility investments globally.

    Japan’s Nikkei share average rose 2.7 percent on Friday, buoyed by the G7 support, but still ended the week down around 10 percent, with some $350 billion wiped off share values — the market’s biggest weekly slide since the global financial crisis in 2008. Japanese markets were closed on Monday.

    Buffett said Berkshire Hathaway, which at the year-end was sitting on $38 billion of cash equivalent and last week bought U.S. specialty chemicals maker Lubrizol for $9 billion, was looking for more large-scale acquisitions anywhere in the world.

    In his annual letter to Berkshire Hathaway shareholders last month, Buffett had said he was looking for more acquisitions.

    “The United States is most likely where we will do something,” he said at a ground-breaking ceremony for a South Korean factory run by a unit of an Israeli firm owned by his investment vehicle.

    Buffett will have yet more money to invest after Goldman Sachs buys back $5 billion of its preferred stock from Berkshire Hathaway, which the fund bought at the height of the global financial crisis.

    EYE ON KOREA

    Buffett, ranked the world’s third-richest man by Forbes this year, said he was also looking to buy entire businesses and large-cap shares in South Korea — where Berkshire is already a leading shareholder in steelmaker POSCO.

    He said geopolitical risks associated with North Korea had not curbed his interest in South Korea, Asia’s fourth-largest economy. Berkshire also owns a stake in Chinese car and battery maker BYD.

    Buffett did not disclose any holdings in Japan on Monday, and Berkshire Hathaway’s annual report did not show any major investments there. He had been due to visit Japan later this week, but canceled due to the earthquake.

    Unlike many foreign fund managers, Buffett, who arrived in the southeastern city of Daegu on Sunday by private jet, won plaudits from ordinary South Koreans.

    Sporting gray sweat pants and running shoes, Buffett was greeted by signs reading “Mr Buffett: Daegu Loves You.”

    Many in this country of nearly 50 million people have bad memories of the 1998 Asian financial crisis when a deal with the International Monetary Fund bailed out the country but at the cost of tens of thousands of jobs.

    Some U.S. hedge funds have been branded “vultures” for buying South Korean assets on the cheap in the wake of that crisis.

    “It’s a once in a life-time opportunity. I’m honored to meet such a respected businessman,” said Seo Hyun-joo, a housewife wearing Korean traditional dress.

    Buffett later meets South Korean President Lee Myung-bak in Seoul and heads to India on Tuesday to launch his firm’s insurance selling portal.

    Source : Reuters

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    Specialist insurer Hiscox has strengthened its UK Professions and Specialty Commercial (PSC) division with the appointments of Samantha Newman as Head of Emerging Professional Indemnity and Charities, and Ann Meaden as Senior Development Underwriter.

    Samantha Newman, based in London and reporting to John Heaney – Head of Professions and Specialty Commercial, will be responsible for helping to develop Hiscox’s presence in non-traditional professions such as environmental consultants and estate agents as well as developing business in the charity sector. She brings a strong sales background for big brand companies including Procter & Gamble, Mars Confectionery, PepsiCo and was most recently Sales Director of BBC Audiobooks, a subsidiary of BBC Worldwide.

    Ann Meaden, who has joined to bolster Hiscox’s underwriting presence in Bristol, and will report to David Henderson – Regional Manager (South and Midlands), has more than 30 years’ insurance experience. Most recently she was at Brit, where she was instrumental in setting up a scheme for the production service industry, and has also spent 11 years at AIG (Chartis).

    Commenting on the appointments, John Heaney, Head of PSC at Hiscox UK, said: “We have aggressive targets in place to grow the volume and range of quality commercial risks we underwrite, whilst retaining our focus on providing the right cover at the right price. Samantha Newman brings an impressive sales CV to Hiscox which will help us target new and emerging professions, and also sharpen our focus on the charity sector. In addition, our presence in the south west region will be further strengthened by the arrival of Ann Meaden in Bristol as we seek to grow our regional book of commercial risks.”

    Source : Hiscox Press Release

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      Fitch Ratings says in a newly-published report examining the insurance industry’s possible exposure to the 11 March earthquake in Japan that it does not expect significant negative rating action as a result of the event due to a number of loss mitigating factors. The report expands upon the comment issued by Fitch entitled “Japanese Earthquake Losses Manageable for Primary and Reinsurance Companies” dated 13 March 2011 at www.fitchratings.com.

      The agency believes that losses can be absorbed by the insurance and reinsurance industries without any widespread solvency problems, or undue financial strain. However Fitch underlines that the assessments within the report remain subject to change as more information becomes available.

      As Japanese primary insurance companies and global reinsurers start to provide their initial loss estimates from the 11 March earthquake, Fitch will review these companies to determine whether rating action is warranted.

      Rating action is unlikely unless a loss causes capital and leverage ratios to deteriorate beyond previous expectations. Fitch will assess the immediate financial implications of the loss and how capital management may be affected over the next six to 12 months. Companies that are financially weakened may look to raise additional capital to mitigate losses and this will be considered before a rating action is taken. These re/insurers will likely be placed on Rating Watch Negative pending the successful completion of capital raising initiatives. Should fresh capital be raised successfully, ratings are likely to be affirmed. However, if attempts to raise capital are unsuccessful, Fitch will take appropriate rating action.

      An important part of Fitch’s ongoing analytical assessment of re/insurers’ losses from the earthquake will be peer group review. The agency will compare loss estimates across specific peer groups to determine whether a particular company’s loss is proportionally larger than its peers, or Fitch’s previous expectations. A large loss relative to peers may indicate some weaknesses in risk management, underwriting or aggregate exposure management.

      Fitch Ratings would like to express its deep sympathy with the people of Japan whose lives and livelihoods have been affected by the 11 March earthquake and related tsunami.

      Source : Fitch Ratings Press Release

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      Japan instructed local authorities on  Thursday to start screening food for radioactivity after accidents at an  earthquake-hit nuclear power plant sparked fears of wider contamination.

      It is the first time Japan has set radiation limits on domestically  produced food, a health ministry official said.

      The limits are in line with an anti-disaster programme prepared in advance  by the government’s atomic power safety commission, said the official.    Limits vary depending on the type of foodstuff but have been set in  consultation with internationally accepted levels and average intake in the  Japanese diet.

      Radioactivity leaked into the air after explosions at the Fukushima No.1  plant, where last week’s quake and tsunami knocked out the reactor cooling  systems.

      Several Asian nations have said they will screen food imported from Japan  for radiation while the European Union has called for similar checks.

      Tokyo, March 17, 2011 (AFP)

      0 0

      The World Health Organization said Tuesday  it was ready to help Japan, which is grappling with a nuclear emergency after  some reactors were damaged by last week’s deadly earthquake.

      “We have expressed our availability to participate in a mission, to offer  necessary assistance, if it is required,” said Maria Neira, the UN health  agency’s director of public health and environment.

      “We are ready,” she added.

      Radiation near a quake-hit nuclear plant reached levels harmful to human  health, Japan’s government said after two explosions and a fire at the  crippled facility Tuesday.

      Four of the six reactors at the Fukushima No.1 plant, 250 kilometres (155  miles) northeast of Tokyo, have now overheated and sparked explosions since  Friday’s massive earthquake and tsunami knocked out cooling systems.

      The WHO assessed that Japanese authorities have acted appropriately in  imposing exclusion zones around the plant.

      “The actions proposed by the government of Japan are in line with the  existing reommendations based on public health expertise,” said the UN health  agency.

      However, Neira warned: “The situation is evolving very quickly, the  recommendations will have to be adapted with the situation as it evolves.    “For the time being, with the core information that is available with the  prevailing situation, the type of radioactivity that is in the area, the  measures of evacuating, the measures of requesting people to stay indoors, the  measures to preposition and eventually distribute potassium iodide, those are  the ones that the public health community is recommending,” she said.

      Neira also said that the WHO was not making any specific recommendation on  diet at the moment, as “the produce that will be at risk will be the produce  that are growing in the contaminated areas.”

      “Our understanding is that there are no problems at the moment (from what)  they’ve collected from the area, because it’s totally innundated.”

      Geneva, March 15, 2011 (AFP)

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