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Hiscox home and contents recorded a 28% rise in claims from last year’s winter freeze. Hiscox offers advice to homeowners across the UK to take steps to safeguard their homes against freezing conditions and to check their household policies to know what is and what is not covered.

Every home has different architectural features and building systems making it important for homeowners to understand the risks particular to their property. Hiscox’s analysis of claims data shows that the age of the property had minimal bearing on the extent of freeze damage – demonstrating that old or new, homeowners need to look at where they might be exposed. For example, of the 58% of freeze claims originating in loft spaces, the problems in older houses were mainly due to antiquated heating systems and poor lagging. In newer homes it was due to over insulation keeping out heat that led to frozen or burst pipes. It is also important for homeowners to check pipes both inside and outside of the house, including those in the garden, to ensure that they are covered by their insurance policy.

Andrew Cheney, Senior Risk Advisor at Hiscox, comments:

“Preparing for freezing conditions isn’t a one size fits all. The damage suffered in the freeze last winter demonstrates the importance of thoroughly understanding your property so that you can take appropriate steps to prepare for the colder weather and not be caught out.

“Furthermore, the weather can change every day and in winter there may be more than one single freeze. Just as you wouldn’t leave a pot boiling on a stove, when the cold sets in, checking your pipes and taking action can prevent damage before it happens. Last year freeze claims coincided with the holidays when people were away. When planning for holidays remember to keep the heating on low and ask someone local to check your property regularly. Being vigilant and finding a leak early can prevent larger scale damage.”

The cold spots

– 26% of freeze claims were for damage to unoccupied properties

– 58% of freeze claims originated in loft spaces

– 16% of damage occurred on the outside of the home (for example, the sheer weight of snow on an outbuilding roof causing it to collapse and blocked or frozen guttering causing water to overflow into a property)

Be prepared and take action

With the potential for another big freeze, homeowners should start to think ahead to minimise the risk of damage from storms, snowfall and freezing pipes. The following are preventative steps to help protect pipes:

– If you have your home surveyed, ask the surveyor to assess the adequacy of pipe lagging

– Ensure your boiler goes through a ‘MOT’, particularly if you’ve inherited an old system with the house. This should be done annually

– Check that water pipes in loft spaces are fully lagged

– Know the location of the stopcock and how to turn it off should you experience frozen pipes

– Insulate pipes, water tanks and cisterns, especially in unheated areas like lofts, outbuildings and under floor spaces

– If you turn on a tap and no water comes out – don’t take chances – call a plumber immediately and turn off the water supply

– Open your attic or hatch door slightly during extreme cold spells to let heat into the loft to help prevent pipes freezing

– When a cold snap is forecast, consider changing your central heating thermostat from a timer to 24 hours until the cold snap ends

If leaving property unoccupied

– Keep the heating switched on at a low temperature to prevent pipes from freezing or turn off the water supply and drain the taps completely to prevent a burst pipe

– Even more importantly for unoccupied properties open your attic or hatch door slightly to let heat into the loft to help prevent pipes freezing

– Have someone check your house regularly to minimise damage should an incident occur in your absence, including checking for frozen pipes by testing if the taps are running water

– Consider draining the water system if the property will be unoccupied for a significant time

Source : Hiscox

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Thai Prime Minister Yingluck Shinawatra, grappling with a devastating flood crisis, was admitted to hospital on Tuesday with food poisoning, her government said. 

“She is suffering from diarrhoea due to food poisoning,” government spokeswoman Titima Chaisang told reporters, adding that Yingluck had asked her deputy to chair a cabinet meeting in her place.

The 44-year-old leader, the younger sister of fugitive ex-premier Thaksin Shinawatra, was a political novice before taking office in August and has struggled to get a grip on Thailand’s worst floods in half a century.

The government has faced criticism for its slow response and confusing public advice about the disaster, which has left more than 600 people dead.

At times the mother-of-one has showed signs of strain, appearing teary-eyed at news conferences and describing the crisis as overwhelming, while her political enemies have sought to use the occasion to undermine her popularity.

Yingluck was hospitalised in the early hours of Tuesday morning with diarrhoea, fatigue, abdominal pain and nausea, the deputy director of the Praram 9 Hospital, Athit Jiranaisilavong, told a news conference.

“The doctor administered oral dehydration salts and agreed that she should rest in hospital for a day or two,” he said.

“We will assess her condition again this evening. So far there are no complications.”

Thailand’s floods have taken a heavy toll on the economy and the vital tourism sector, still recovering from deadly political unrest last year. Yingluck has said that central Bangkok is now safe from the floodwaters, which caused widespread damage in areas north of the capital and seeped into the outskirts of the sprawling metropolis.

Her 62-year-old brother Thaksin remains a deeply divisive figure in Thailand. The former telecoms tycoon was ousted in a 2006 coup and lives abroad to avoid a two-year jail sentence for corruption.

Yingluck has faced criticism over reports — denied by her government — of plans for a royal pardon that could allow Thaksin to return without serving time.

Bangkok, Nov 29, 2011 (AFP)

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Royal London Group’s Scottish Life has added ten new funds in its investment fund range. These ten new funds include eight external funds, all rated by Old Broad Street Research (OBSR), and two brand new funds from in-house manager, Royal London Asset Management. The funds have been specially chosen to complement the existing options available to customers, and range from a specialist ‘cash plus’ fund to a global listed infrastructure fund.

Scottish Life now offers 141 carefully selected funds across 47 different sectors, making it easier for advisers to build high quality portfolios for their clients. Scottish Life’s approach reduces the time advisers have to spend on fund selection, while still giving a wide choice so that advisers can add value for their clients. To make the review process easier, Scottish Life monitors the funds on an ongoing basis to make sure their quality is maintained.

Lorna Blyth, Investment Marketing Manager at Scottish Life, said:

“Through a mixture of adviser feedback and market analysis, we have identified top quality funds for which there is a significant level of demand. We focus on selecting those funds that have a strong track record of meeting objectives and delivering competitive returns to provide real value for advisers and their clients.

“At Scottish Life, we understand the most important thing for advisers is getting the asset allocation of a client’s portfolio spot on. But selecting appropriate funds is still a key part of the investment process, which is why we regularly review our fund range to ensure we offer something to suit different risk appetites in all market conditions.

“It’s not about offering the biggest fund range. It’s about building the best, and keeping it the best.”

The new funds are:

– SL Cash Plus

– SL International Government Bond

– SL/First State Global Listed Infrastructure

– SL/Fidelity South East Asia

– SL/Neptune US Opportunities

– SL/Cazenove European

– SL/Jupiter European Special Situations

– SL/Invesco Perpetual High Income

– SL/Investec UK Special Situations

– SL/M&G Global Leaders

Source : Scottish Life

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Just £200: that’s the average fine meted out by courts in England and Wales to people caught driving without insurance, according to new figures released in a House of Commons written statement. 

The AA says that honest motorists will rightly be outraged by the statistics, which were released by the Justice Minister, Crispin Blunt MP following a parliamentary question by Karl McCartney MP (Con, Lincoln).

Simon Douglas, director of AA Insurance, points out that uninsured drivers kill 160 and injure 23,000 innocent victims every year. He adds that the majority of those guilty of driving without insurance are young men who are five times more likely to have other motoring offences to their name (such as dangerous driving, driving without tax, MoT or driving license), failing to comply with traffic regulations and to have engaged in other criminal activity.

“I certainly think that the UK is far too soft on hard-core uninsured drivers and most people will consider a fine of £200 is an insult,” he says.

“Although there is a fixed penalty of £200 and six penalty points for driving without insurance, the police will prosecute for serious offences– yet the fines imposed by the courts are often less than that. It is hardly a disincentive, given that typical cost of insurance for someone aged between 17 and 22 is around £2,500.”

Mr Douglas accepts that in most cases the defendant’s car will be confiscated and disposed of by police, the value of which can be added to the cost of the fine. Last year, police crushed over 100,000 uninsured vehicles.

“Most of these were old and with little value; as well as being poorly maintained or even downright dangerous,” he says

Mr Douglas notes that penalties are means-tested which is why the maximum fine available, £5,000, is rarely, if ever, imposed.

“I believe uninsured drivers should pay the equivalent of the unpaid insurance premium, which can easily be calculated, in addition to a fine. What’s more, the fine should be sufficiently great to make them think twice before offending.

“This could be coupled with community service orders and for repeat offenders, possibly custodial sentences.”

He points out that the chances of being caught are high, given that the vast majority of traffic police cars are equipped with automatic number plate recognition technology which instantly identifies uninsured vehicles.

“We’re failing honest motorists by such lenient fines. In my view, it’s vital to get the message over to this motoring underclass and, importantly, to their friends and families, that driving without insurance is socially unacceptable,” Mr Douglas says. “People need to be stopped before they get behind the wheel of an uninsured car and go on to risk killing or injuring others.”

During 2010, courts in England and Wales issued 105,082 fines averaging £200 (in addition to fixed penalty notices). Topping the league of uninsured driver fines is the Metropolitan Police area, whose courts issued 21,449 fines averaging £290 during 2010. The highest fines were issued in the City of London, averaging £390.

At the opposite end of the scale, average fines of just £150 were issued in Durham, to 1,040 offenders.

It is estimated that 1 out of every 25 motorists drives without insurance in the UK, one of the poorest records in Europe.  It compares with an estimated 1 out of every 500 in Germany.

Top and bottom areas for number and value of fines
England & Wales (Scotland and Northern Ireland figures not available)

# Highest average fine

At £150, the lowest average fine was in Durham which issued 1,040 fines

Source : The AA

Ian Crowder, 01256 492 844 or ian.crowder@theAA.com

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Fitch Ratings says Rolls-Royce’s longevity swap is an important step in managing one of the key risks facing occupational pension schemes. The deal, announced 28 November, is one of a handful of major transactions so far in a market that is expected to grow. It is not expected to affect Rolls-Royce’s ‘A-‘/Stable rating.

Longevity risk represents both a long and short-term risk to pension schemes. The long term effect is obvious – the longer pensioners live the more has to be paid to them. The short term risk arises from the revaluation of pension liabilities as evidence grows that assumptions need to be changed. In the last five years most companies have built in assumptions of longer lifespans into their pension schemes – causing a one-off increase in liabilities. Under the UK’s existing regulatory system such increases lead to higher funding requirements in the short to medium term.

Longevity hedging – contracting with someone else to bear some or all of a scheme’s longevity risk – is not a cheap option. It carries significant administration costs, plus a premium is paid to insurers or other counterparties to take on the risk. This is usually shown as an immediate increase in liabilities. When ITV in August undertook a longevity swap on GBP 1.7bn of its pensions, the result was an increase in liabilities of GBP50m – or about the equivalent of a one-year change in life expectancy.

Rolls-Royce’s pension scheme is well funded, with an accounting deficit of less than 2% of liabilities at 30 June 2011. The longevity deal it has struck with Deutsche Bank will apply to GBP3bn of the group’s approximate GBP7bn UK pension liabilities. The group said that the transaction cost will be borne by the pension fund and ‘will have no material effect on the funding arrangements.’

Fitch’s pension methodology focuses on the cash funding costs to companies of providing pensions. In the UK longevity can affect this in that changes in assumptions often lead to significant increase in deficits which have to be funded. To the extent that a longevity swap eliminates this risk, this is positive for a company’s credit quality. Against this is the cash cost of such a deal.

Source : Fitch Ratings  Press Release

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After a turbulent year, the Saga Quality of Life Index (QOLI) finally shows signs of stabilising. In its latest Quarterly Report, the Saga QOLI index remains steady on the previous quarter, albeit still firmly in negative territory.  True to form, despite their own economic woes this year, one in three older people are providing financial support to their children and around half will donate to charity this Christmas.  Such generosity is a valuable part of our society.

Tentative signs of stabilisation in Quality of Life

Dr. Ros Altmann, Director-General of Saga, commented: “After falling consistently throughout 2011, I hope that the first signs of stabilisation in our Quality of Life index will turn into a solid improvement in 2012. It is also heart-warming how much the over 50s are helping others, despite high inflation, by supporting family and charity.  These really are generous generations.”

Throughout 2011, Saga has been tracking trends in health, happiness and standard of living for the UK’s 21 million over fifties.  The findings have been pretty gloomy so far, with older people reporting continued declines in their quality of life relative to 2010.

Saga Quarterly Report for Q4 suggests some over 50s planning to increase spending again
However, after the first three quarters of constant deterioration, Saga’s final Quarterly Report for 2011 shows a tiny glimmer of optimism.  The survey of around 10,000 over 50s shows that more of them are now planning fewer cutbacks in their discretionary spending – such as short breaks or going to the cinema – so maybe they will boost the economy a bit next year.

But others still struggling and cutting essential spending such as heating

There are still large variations, though, especially across socio-economic groups and overall, one in five (19%) actually report cutting back their essential spending as a result of high inflation and, in particular, cutting back on heating is a noticeable feature as fuel costs have soared.

Inflation is by far their biggest concern

Worry over crime has increased this quarter, perhaps as a result of August’s riots but fears over living costs remain by far their biggest concern, well above health worries with a third of people over 50 (33%) anticipating that inflation will be above 6% in a year’s time. On average, they expect it to be 5.2% showing that most expect their experienced price rises will be way in excess of the Bank of England’s target of 2.0% over the coming year.

Delaying retirement in response to rising living costs could be good news

The Q4 Saga Quarterly Report shows that many of those in their 50s and early 60s are delaying retirement in response to the rising cost of living.  This may also boost the economy by ensuring they have higher incomes than if they were trying to live only on their pension savings.

Key findings:

– 32% of over 50s are providing financial support to their children and grandchildren.

– 46% will give money directly to charity this Christmas – the older you are, the more likely you are to donate with 53% of people over 75 planning to give money to charity this Christmas.

– 61% report cost of living as a greater concern than it was 12 months ago with people in their early 50s and those from lower socioeconomic groups most worried at 70% and 77% respectively.

– 32% are cutting back on their heating compared with a year ago.

– A third (32%) are cutting back on their short breaks but that is better than 41% last quarter.

– More than one in twelve (8%) are delaying their retirement in response to rising living costs

– Despite financial pressures, only 3% have downsized.

Source : Saga

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Europe is now facing austerity measures, governments are cutting welfare programs and raising taxes. Winter cold is coming as Europeans face a bleak future.

Romanian mayor Florin Cazacu staged a six-day hunger strike last week over cuts to heating subsidies which meant his town of Brad could not afford fuel oil and 10,000 of its residents, public institutions and hospital faced a bitter winter.

“My hunger strike was an extreme solution, a mayor’s cry for help for the community,” Cazacu told Reuters by phone on Sunday.

He called off the strike on Saturday after central government agree to pay 1 million lei ($304,000), but said that would only cover 15-20 days of heating for the town where temperatures can fall as low as minus-30 degrees Celsius.

“So what is needed is for the government to … allot 2,500 tonnes of fuel oil from state reserves to cover heating needs for the entire winter,” said the mayor, whose town hall had a shortfall of 3 million lei to buy fuel oil.

The government of Romania – the EU’s second-poorest member state, where the average wage is less than 400 euros ($530) a month – cut salaries and raised tax to plug its budget gap.

Wood-burning stoves, once a symbol of poverty, are making a comeback as Greeks balk at soaring heating bills after the government in Athens raised energy taxes to help plug finances.

“Business is up 100 percent,” said Costas Mitsionis, who sells the wood burners and is a rare smiling face in a market in Athens. “Everybody is flocking to buy, poor and rich, alike. This crisis has put the fear of God into everyone.”

Even in wealthy Germany, Europe’s paymaster and biggest hope of a bailout lifeline, the crisis has led to a surge in soup kitchens, according to the author of a book on poverty.

“There are now about 700 soup kitchens across the country where poor people can go for a free warm meal,” said Ulrich Schneider, who is managing director of the Parity Welfare Association. “Soup kitchens were almost unheard of in Germany a decade ago. Now about 1 million people each day are going.”

He added: “You’re not going to find a soup kitchen in parts of cities like Berlin where the tourists go. They’re usually pretty much out of sight and out of mind.”

But it is not only the poor who are feeling the extra pinch.

Pawnbrokers report a roaring trade. Paris’s Credit Municipal, founded in 1637, has seen a 20 percent rise in business in the last year with an average of 700 customers a day, catering mainly to the “squeezed middle classes.”

Britain’s Citizens Advice Bureau, a charity which gives advice on issues including debt and employment, said it had seen an increase in enquiries and from a wider section of society.

“We’ve seen a lot of people who have either lost their job or who are being squeezed because of a freeze on their income or a cut in working hours,” said spokeswoman Moira Haynes.

In a country, not part of the euro zone, where it is joked that people care more about their animals than each other, even beloved pets are falling foul of shrinking household budgets.

London’s Battersea Dogs and Cats Home this month reported a surge in the number of people giving up their pets.

“I lost my job four months ago and have tried really hard to find work, but now I’m worried that I might lose my home. Shady’s my best friend and I’ve had him for two years but I can’t afford him any more,” said dog-owner Aaron LeBlanc.

The Guardian newspaper reported a rise in the number of people harming or killing their pets to claim insurance money.

Britain’s allotments are full with people growing their own fruit and vegetables, but for Antonio, an unemployed father who gave up his apartment in Madrid last spring and rented a small house in the Spanish countryside with a plan to grow and sell organic vegetables, there has been little to harvest.

Antonio, who refused to give his last name, saw his crop perish in cold weather and asked his land-owning neighbors for permission to collect olives from their trees with the hope of marinating and selling them. They refused.

“They’re not using the olives but they won’t give them to me either,” he said. “Olives are a tremendous source of nourishment.”

In Athens, Themis, 45, who declined to give his last name, said he had lost his job as a chef at a catering company. “I can’t find the courage to tell my wife,” he said.

Anger across Europe at the scrimping and making do has been compounded by reports some company directors and bankers are doing very well in the crisis and a feeling in some states that the super-rich have evaded taxes or not paid their fair share.

A report that pay for directors of Britain’s top 100 companies rose 49 percent last year has added to the sense of outrage among low-paid public sector workers who will stage Britain’s biggest strike in 30 years next week over pensions.

A general strike halted public transport and factories across Portugal on Thursday, when Bulgarian railway workers also walked out over plans to cut 2,000 jobs.

In Greece, dozens of members of a union clashed with riot police outside an office of the biggest power producer PPV. The company is charged with collecting a new property tax via electricity bills.

Source : Reuters 

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To provide expatriates in the United Arab Emirates (UAE) with compliant international private medical insurance solutions, Aviva UK health business has teamed up with Abu Dhabi based Emirates Insurance company.

The development of a UAE network is the first in a series of enhancements that Aviva is giving its international private medical insurance customers

The new arrangement means that Aviva customers based in the UAE will now be offered one of four bespoke international medical insurance products. Benefits available through the Emirates’ International Solutions product have been designed to specifically meet the needs of the local area. This means that customers based in Abu Dhabi will no longer be required to purchase local insurance to satisfy visa requirements.

Consistent with local practice in the UAE, Aviva has also teamed up with Neuron – a specialist third party administrator based in Dubai. Neuron provides professional administration and management services to clients based in the Middle East. The company has been specifically chosen for its extensive experience in the area and commitment to providing expert customer service. Neuron will manage all claims for Aviva customers receiving treatment in the UAE and work closely with a network of hospitals to arrange treatment and direct settlement of invoices.

Teresa Rogers, international business lead, Aviva, UK Health, said: “Over the past year we’ve been working hard to develop our international private medical insurance capabilities and the introduction of our new UAE network takes us one step further to achieving our ambition of becoming a leading international medical insurance provider.

“Offering health provision in the UAE is complex due to different legislative requirements across each of the Emirates. We’ve worked with a specialist international law firm to help us develop bespoke solutions for our customers based in the UAE and we believe that our four products will enable us to respond to changes in legislation and customer needs both now and in the future.”

Jason Light, chief executive officer, Emirates Insurance Company adds:

“We are delighted to help Aviva serve its international medical insurance customers in the UAE and to join a team offering a seamless service to their global customer base”.

The new Emirates’ International Solutions product range will be available from 1 March 2012. Full details of the products will be announced early next year. At renewal, existing Aviva customers based in the UAE will be invited to transfer to one of Aviva’s Emirate’s International Solutions policies.

Source : Aviva

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The City of London Corporation reports that the insurance and pensions sectors in China and India offer huge potential for rapid growth.

‘Insurance companies and pension funds as institutional investors: global investment patterns’, authored by Trusted Sources, a leading emerging markets research specialist, examines the role that pension funds and insurance companies have played in increasing liquidity in established capital markets, by introducing long-term and stable funds. It goes on to suggest that liberalisation of investment mandates for insurers and pension funds could prove similarly beneficial in the high-growth Chinese and Indian markets, increasing both depth and liquidity in their capital markets.

In China, the role of both insurance companies and pension funds in the stock market is very small – each holds only around 2% of issued shares.  Recommendations flagged up by the report include: increased competition amongst insurance companies; tax incentives for Unit Linked Insurance Products; introducing effective dividend pay-out rules for listed companies; encouraging the development of expertise of fund managers in insurance companies and the relaxation of qualification rules for private companies allowed to issue bonds.

In India, the pension and insurance sectors are still relatively underdeveloped, with assets at 7% and 16% of GDP respectively.  The report identifies measures which could facilitate rapid development of these markets including: lifting restrictions on equity investments; allowing investments in lower-rated corporate debt and derivatives; allowing the Employees’ Provident Fund Organisation to invest in equities; removing tax and regulatory constraints and increasing incentives to buy corporate bonds.

Stuart Fraser, Policy Chairman at the City of London Corporation, said: “The City of London’s position as a global financial centre makes it a natural partner for growing economies such as China and India. The experience of London shows the valuable role that robust capital markets can play in supporting a sophisticated and liquid market which is attractive to both international investors and companies wishing to raise money.

“Capital markets play a vital role in raising debt and equity capital for businesses, offering alternatives to bank financing and channelling funds from savers into the financial sector.  This report finds that greater depth and liquidity in domestic capital markets is needed in both China and India to support the effective growth of their companies.

“Indeed, liberalisation of the insurance and pensions markets will result in a greater provision of capital to both countries’ businesses for their domestic and international expansion.”

Source : City of London Corporation

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A report from Standard & Poor’s shows insurance markets in the six countries of the Gulf Cooperation Council (GCC) region are deepening.

While markets are still growing, to participants used to double-digit growth, current business development probably seems positively sluggish as the global economic slowdown takes effect in the region. Regulatory supervision brings more change, some of it extensive.

In the region’s maturing markets, larger companies are building markets at the expense of smaller competitors. Mid-size firms are falling away, leaving a split in the region between large and small insurance companies. The abundance of small players with insufficient underwriting expertise continues to cause more risk-aware companies difficulty; the resulting fierce competition is unsustainable, in our view.

On Nov. 15, 2011, Standard & Poor’s rated 34 insurers and reinsurers in the region. They assessed the credit ratings outlook for the spectrum of insurers and reinsurers in the GCC region as stable, reflecting the companies’ generally strong capital adequacy, strong asset liquidity, and strong technical earnings. Although all of the GCC insurance markets are very competitive, most primary insurers maintain favorable underwriting margins.

These reflect the strengths of the core business and the persistency of reinsurance capacity provided to the region’s companies, which generates attractive inward commission flows.

Source : S&P

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Standard & Poor’s announced that it revised to stable from negative the outlook on Pinnacle Insurance. At the same time, the ‘BBB+’ long-term counterparty credit and insurer financial strength ratings has been affirmed.

Here is Standard & Poor’s report :

Operating performance at U.K.-based non-life insurer Pinnacle has stabilized in 2011 after three consecutives years of losses. The decline in profitability has slowed and the pressure it put on the rating has abated, in our view. Any future volatility in earnings will be mitigated through profit-sharing treaties with third-party distributors, the ability to reprice at short notice, and the inclusion of robust clauses to limit risk exposure in the terms and conditions of agreements with distributors.

The ratings on Pinnacle reflect the company’s strong capitalization and its conservative, liquid investment strategy. In addition, Standard & Poor’s considers Pinnacle to be moderately strategic to the BNP Paribas (BNPP, AA-/Stable/A-1+) group, and, as a result, we incorporate one notch of implied group support in the ratings. These strengths are partially offset by Pinnacle’s concentrated business profile, the execution risks associated with diversification of the company’s product range, and ongoing earnings recovery to achieve group’s targets.

Although Pinnacle is small compared with the overall group, we consider it to be moderately strategic to the BNPP group. It is important to the group’s long-term strategy, helping it to maintain a presence in one of its key European markets–the U.K. In our view, the group would likely support Pinnacle should it fall into financial difficulty, and it is increasingly integrated into the group.

Despite returning to profitability, Pinnacle has yet to achieve the levels of operating performance the group expects. Supported by increasing risk appetite from its board, Pinnacle is now looking to diversify its business position into other lines of business; however, we see execution risks associated with this strategy because the company does not have proven expertise in some of the targeted lines and market conditions remain very competitive.

The stable outlook reflects our view that earnings at Pinnacle have stabilized after a period of adverse market conditions and a revamp of the company’s strategy, and are likely to start growing again. The underlying loss ratio on the core protection business is returning to prerecessionary levels. This suggests that operating performance is likely to be profitable in the next two to three years, and we do not expect the losses experienced in 2008-2010 to repeat. It also reflects our expectation that Pinnacle will deliver on its strategy to diversify into other business lines profitably. That said, we do recognize the execution risks associated with expanding its product offering.

A negative rating action may follow any radical changes in strategy, failure to generate profits in 2011 and 2012, or failure to increase control of product distribution. These triggers may also lead us to review Pinnacle’s group status in BNPP and the level of support included in its rating.

Positive rating action is not likely over the rating horizon unless Pinnacle substantially improves profitability against group’s targets and establishes a track record of sustainable good earnings, while maintaining the current risk and capital profile.

Source : Standard & Poor’s

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European private equity firm, Cinven, announces the completion of its acquisition of Guardian Financial Services (“Guardian” or “the Company”), the UK closed book of life and pensions business. Cinven reached agreement to acquire Guardian from AEGON in August 2011 for an enterprise value of £275 million.

The transaction was originated by Cinven’s Financial Services team as part of its analysis of the European life assurance market.

The investment provides a consolidation platform for Cinven in the European closed life assurance market driven by factors including the fragmented nature of the market; commercial pressures on smaller operators; banking institutions looking to exit insurance assets and overseas insurers seeking to recycle capital. This strategy would create benefits for shareholders and policy holders through greater efficiencies and de-risking funds.

In the Financial Services sector, Cinven’s acquisition of Guardian follows the recent US$300 million equity investment in Avolon, the Cinven-backed international aircraft leasing group, from the Government of Singapore Investment Corporation (GIC). Avolon successfully completed its initial capital raise from Cinven, along with CVC Capital Partners and Oak Hill Capital Partners, in May 2010, and has now raised equity capital totalling US1.4 billion.

Source : Cinven

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Commercial lines underwriting specialist Arista Insurance has appointed Gary Davies as development underwriter for the West of England. He joins with immediate effect and brings 24 years commercial underwriting expertise to the role.

Gary’s appointment is directly linked to Arista’s stated strategy for growth and his joining follows that of several other highly experienced recruits across the business in 2011. His joining will strengthen the existing team, particularly with its focus on supporting brokers in Somerset, Devon and Cornwall, and he will also help develop new business across the area.

Gary will further improve service by increasing Arista’s underwriting capabilities to cater for larger complex risks. He joins from Fusion in Bristol where he was senior underwriter. Before that Gary worked for a range of insurers including General Accident, NIG and Independent.

Commenting on the appointment, David Aslin, regional manager for South West said: “I am delighted to announce the appointment of Gary, whose specialist knowledge and experience will complement that of the existing team extremely well. In particular his complex risk experience will strengthen and support the service we provide to brokers in the region.”

David continued “Gary is well known to many of our brokers in the region.  By working from home he will be more accessible and will improve our knowledge of brokers’ needs for the future. We now have a number of locally based development underwriters across South West and South Wales; feedback and support from our brokers is extremely positive, meaning Arista will consider additional recruits for 2012.”

Arista currently services over 350 brokers from its network of regional branches in London, St Albans, Bristol, Southampton, Redhill, Manchester, Leeds and Birmingham.

Source : Arista

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New research from Defaqto shows that 13% of single trip travel insurance policies do not cover winter sports. As a result, those planning a sports-based holiday this winter need to look closely at the features and benefits provided by different travel insurance policies to ensure they arrange suitable cover.  

Defaqto’s analysis of the 342 single trip policies on the market that insure winter sports has found significant variation in the cover they offer in a number of key areas:

– Winter sports equipment – 80% of policies provide cover of less than £1,000 for the loss or theft of winter sports equipment, while only 2% provide cover of £2,000 or more; 2% of policies do not provide any cover for equipment

– Hired equipment – while 6% of policies provide no cover for the loss or theft of hired winter sports equipment, 55% provide less than £500 of cover and only 9% of policies offer cover of £750 or more in this area

– Cover for loss of a ski pass – if someone were to lose their ski pass, 31% of policies would provide cover of £200 or less (including 12% that would offer no cover at all), while 24% would offer £500 or more to cover the cost of a replacement pass

– Piste closure – 8% of policies provide cover of £50 or more per day to compensate people where a piste has to be closed, due to adverse weather conditions for example; 56% provide cover of £20 or less per day for this, while 5% offer no cover at all. In terms of total cover limits offered by policies in this area, 18% apply a limit of £400 or over, while 43% of policies have a limit of £200 or less

– Avalanche delay – 16% of policies provide cover of £500 or more to cover the costs of holidaymakers needing to find alternative accommodation, for example, if they are unable to return to their resort due to an avalanche, while 34% offer cover of £200 or less for this; 20% of policies do not offer avalanche delay cover at all

Mike Powell, Defaqto’s Insight Analyst for General Insurance, said:

“At this time of year people may be thinking about booking a skiing holiday, or indeed may be looking forward to a break they have already arranged.  Given the expense often involved, it is important for holidaymakers to arrange suitable travel insurance once their booking is made to safeguard the money they have spent.  When looking at cover for a winter sports break, there are a number of areas in particular where people will need to ensure their cover meets their needs, for example when it comes to protecting their skiing equipment. However, we have found wide-ranging variation across single trip travel insurance policies in terms of the winter sports-related cover they offer.

“To ensure they get the right type and level of cover for their trip, people need to focus first and foremost on pinpointing the features they need from a travel insurance policy and identifying the options that provide that cover.  Although important, price should not be the primary basis for comparison – after all, buying the cheapest cover available could end up being the most expensive option if it doesn’t provide adequate cover for someone’s holiday or their possessions.”

Source : Defaqto

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Tunbridge Wells based schemes broker Darwin Clayton has appointed Simon Henderson as managing director.

In addition to being responsible for the overall management of Darwin Clayton, Simon will be focussed on developing the growth of this leading independent broker. Darwin Clayton is one of the UK’s longest established independent insurance brokers having been founded in 1920.

Reporting to chairman Mike O’Connor, Simon will further grow the historic broker by developing its existing schemes, creating new niche products and by adding new trading models to complement its core business model.

Simon brings over 20 years commercial insurance experience to the role and was previously head of schemes at commercial lines underwriting specialist Arista where he created and managed Arista’s schemes channel. Prior to Arista he was head of schemes at NIG.

Commenting on the appointment chairman Mike O’Connor said: “Simon will be a huge asset to Darwin Clayton and will, I’m sure, move the company on to achieve great things.”

Source : Darwin Clayton

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Fitch Ratings international rating agency is pleased to invite you to its annual business breakfast for heads of Russian insurance companies and media on December 15 2011 from 9 am to 11:30 am.

Presentation topics will include:

Russian insurance sector, a turning point in 2012:

– Increasing concentration and changes in the operating environment
– Trends in the sector’s underwriting performance
– Key challenges for further successful development of the sector

European Insurance Markets Update:

– Rating outlooks for European insurance and reinsurance markets
– Impact of Eurozone sovereign crisis;
– Impact of Solvency II.

Invited Speaker:

– Representative, The Federal Service for Financial Markets.

Fitch Ratings Speakers:

– Anastasia Litvinova, Director, Insurance, Fitch Ratings, Moscow
– Harish Gohil, Managing Director, Insurance, Fitch Ratings, London

REGISTER

Venue : Fitch Ratings Moscow Office, Ducat Place III Business Centre, 6 Gasheka Street, Office 520, Moscow Russia

Participation is free of charge. You are welcome to forward this message to your colleagues who could potentially be interested to take part in the event.

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Britain’s state-rescued Lloyds Banking Group said on Monday that its chief executive Antonio Horta-Osorio was making “good progress” from an illness which has forced him temporarily to stand down. 

Despite the news, LBG said its non-executive director David Roberts would take over as interim chief executive should Horta-Osorio — said to be suffering from fatigue — not return as expected by the end of the year.  LBG’s chief financial officer Tim Tookey is presently the bank’s interim chief executive but is due to leave the organisation early next year.  Horta-Osorio, 47, became chief executive in March and has since announced a massive cost-cutting drive.

“Following the announcement of 2 November 2011 stating that the group CEO, Antonio Horta-Osorio, had taken a short leave of absence on medical advice, the Lloyds Banking Group board is pleased to note that Antonio is continuing to make good progress in his recovery,” a company statement said on Monday.

“As part of its contingency plans the board has agreed that David Roberts, a non-executive director since 2010 … will assume the position of interim group chief executive in the event that Antonio’s return were delayed.”

LBG added in the statement that a key executive from fellow bailed-out lender, Royal Bank of Scotland, would not now be joining the group.

Nathan Bostock, currently head of restructuring and risk at RBS, would instead remain with the Edinburgh-based bank, Lloyds said.

Lloyds Banking Group is 41-percent owned by the British government after a huge bailout at the height of the global financial crisis. Horta-Osorio, meanwhile, is planning annual cost savings of £1.5 billion by scrapping 15,000 jobs, or 14 per cent of the bank’s staff.

LBG has slashed more than 40,000 posts since 2009 as it looks to nurse its way back to health after its part-nationalisation. The lender, which was sunk by the ill-fated 2008 takeover of rival bank HBOS, is also seeking to cut its international presence to just 15 countries by 2014.

Horta-Osorio was formerly head of Santander UK, the British wing of the Spanish bank. The Portuguese national’s predecessor Eric Daniels left amid shareholder anger after he oversaw the government-brokered takeover of HBOS.

London, Nov 21, 2011 (AFP)

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 MORE TH>N  warns pet owners to take extra care of their pets. The pet insurer saw 59 per cent more claims involving dogs and cats in road accidents from November 2010 to January 2011, compared to the previous three months.

In a move to help combat pet accidents, MORE TH>N is launching a new awareness campaign and will be giving away free dog collar blinkers and reflective cat collars to all new customers who purchase pet insurance during Road Safety Week, which runs from 21 – 27 November 2011.

John Ellenger, Head of Pet Insurance at MORE TH>N, said: “It’s an unfortunate fact that during the dark winter days our dogs and cats are not as visible to motorists. However, a simple reflective pet collar or vest can help make all the difference. Having the right insurance policy for your pet will also give financial peace of mind should an accident happen and treatment is needed.”

The top five UK claims hotspots are Ilford, Huddersfield, Carlisle, Halifax and Sutton, where dogs and cats are twice as likely to be involved in road accidents during winter than in other parts of the UK.

Source : More TH>N Press Release

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One in four Israelis was living under the poverty line in 2010, annual figures from the National Insurance Institute showed, although the numbers showed an improvement since 2009. 

The report, published on Thursday, said 1.77 million people, or 24.4 per cent of the population, were living below the poverty line, among them 837,000 children. The statistics showed a slight improvement from 2009 when 25 per cent of the population lived in poverty, with the number of children affected falling to 35.3 per cent, down from 36.3 per cent a year earlier.

In terms of families, the figures showed 433,000 family units — or 19.8 per cent — were living in poverty, which was a slight improvement on the 2009 figure of 20.5 per cent. The improvement in 2010 was attributed to a reduction in the unemployment rate and job growth, which has since slowed as a result of the global economic crisis.

The most impoverished social groups in Israel are the ultra-Orthodox Jews and the country’s Arab Israeli minority, which numbers around 20 per cent of the country’s population of some 7.8 million people.

Among these groups, which both traditionally have large families, one in every two families was living below the poverty line, the report said. At a news conference to launch the report on Thursday, Social Affairs Minister Moshe Kahlon said the slight improvement did not alter the overall picture of poverty in Israel, which he described as “grim.”

“Despite the decline in poverty in 2010, the differences in the prevalence of poverty from one year to the next show no change in the grim picture of poverty in Israel: one fifth of families and one third of children in Israel are poor,” he said in remarks quoted by the business website Globes.

“That is why I call on the government to strongly intervene in the fight against poverty and to reduce it,” he said.

Israel has one of the highest poverty rates among members of the Organisation for Economic Cooperation and Development (OECD), the club of 33 rich nations which it joined in September 2010. In terms of income equality, Israel has one of the largest gaps between rich and poor in the OECD, ranking alongside the United States, Mexico and Chile.

Jerusalem, Nov 18, 2011 (AFP)

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Pensions Minister Steve Webb has spoken exclusively to Saga about the poor image of pensions, how low interest rates and quantitative easing have damaged annuities and why Government is going to use employers to promote pensions and auto-enrolment. 

Saga reports Pension’s Minister Steve Webb’s comments on how pensions have a poor image. Low interest rates and quantitative easing have damaged annuities and Government is going to now use employers to promote pensions and auto-enrolment.

He also sees merit in Andrew Dilnot’s suggestions on care funding.

“Pensions have an image problem” said Steve Webb as he described auto enrolment, the Government’s next great pensions’ scheme, as being like a Ming vase; “very precious, but very fragile”.  The Minister wants to change perceptions and instil confidence in retirement planning ensuring that charges are not too high and that pensions offer value for money.

Radical state pension reform is his goal

“We need to move from a system that’s fiendishly complicated, that still leaves millions of pensioners living in poverty, to one, ideally, where we have a single, simple, decent state pension on which people can build.”  He stresses, however, that his state pension reforms will not be in place before auto enrolment starts, although his proposals for a flat-rate basic state pension should have been published before then.

Ultimately, Mr Webb wants to get the basic state pension right and also to get “millions more people in to pensions saving” via the process of ‘auto-enrolment’ which begins next year.

Government to rely on employers to promote auto enrolment

Mr Webb says it will be the employer’s role to ensure auto enrolment is successfully rolled out: “The employer will choose the scheme … they need to know what’s going on  … communications is crucial”.  Saga is concerned that many employers, especially smaller ones, may not be receptive to taking on this responsibility.

The Minister explained that his department and The Pensions Regulator would provide employers with the best tools possible, for example, the DWP will provide employers with “market tested specimen literature that communicates pensions in plain language and explains what auto enrolment is”  and plans to spend £10 million on communications to make the scheme a success.  The Pensions Advisory Service will also be expected to play an increasing role in communicating about pensions.

Minister changes his tune on flexibility in pension savings

Dr Altmann questioned the Minister on his change of heart on early access to pensions since being in Government. Mr Webb was previously in favour of unlocking pensions early but following a recent consultation, he said there was a noticeable lack of support for this and he was worried that people “would blow their pension pot”.  He said accessing pension pots early would “fundamentally change the nature of the product” and that “now isn’t the right time” with auto-enrolment starting next year.

However, the Government will track people as they auto enrol and if the evidence is that the reason people opt out is that they don’t want to tie their money up, then he would consider increased flexibility again in future.

‘QE has damaged pensions’

When asked about concerns over annuity risk given low interest rates and quantitative easing, the Minister admitted to “an issue about volatility, not knowing what you are going to get [and an issue] about poor returns.” He hinted to an announcement “very shortly” regarding an improvement to the way annuities work which will look at whether shopping around could essentially be the default option.

Previous Government’s policies damaged the UK pensions system

The Minister named the 1997 removal of ACT relief as having badly damaged occupational pensions and said that stakeholder pensions were a failure, with most of them being just “empty shells.”  But he also said that the “fundamental flaw which impacted pensions [was] the mismanagement of the economy.”

Care provision will require an insurance solution

Mr Webb says funding long-term care in light of the catastrophic costs that Andrew Dilnot talks about with only some people facing risk of very high costs “needs an insurance solution” – either social insurance or private insurance.  Webb believes if the Government can deal with the ‘tail risk’ as Dilnot has suggested, then perhaps insurance, disability-linked annuities and pension reforms to provide for care would be possible.

On speaking about her interview with the Minister, Dr Ros Altmann said: I am delighted the Minister took the time to speak to Saga about his plans for Pensions and for older people in this country.  He said the key to helping people over 50, as they look to retirement and future care, will come down to “dignity” and “choice”. We certainly hope this Government can deliver on their promises to improve the lives of pensioners and older people. Saga will be watching!”

Source : Saga