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George Stobbart

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Standard Life : welcomes updated IHT analysis to support trusts receiving pension death benefits

Industry News

Jun 17, 2011

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Some of the fog has cleared around the uncertainty of the IHT analysis, which applies to a trust which receives pension death benefits. Historically, there was no clear practical guidance on the IHT treatment of the ongoing “Bypass Trust”.

This has all changed, further to the updated Q&A Paper now circulated by the ABI, which was compiled in liaison with HMRC. There was uncertainty about how the ongoing trust was to be taxed, depending on how many different pension death benefits payments were made to it, for example. The position relating to someone with several historic pension policies acquired over many years was also unclear. The new case study scenarios deal with unresolved questions in this area.

Julie Hutchison, Head of Estate Planning at Standard Life, said “It was useful being involved in these discussions with HMRC, who were willing to engage and help to provide the case studies in this new Q&A paper. Financial advisers who work closely with law firms in particular will find the 5 page analysis really useful, when dealing with advice for clients with large pension pots.

Since the law changed on 6th April, and pension death benefits became inheritable wealth (sometimes subject to some tax), it is more important than ever for advisers and lawyers to think about the use of a trust to control how pension wealth is cascaded down the generations. Concerns over future re-marriage, divorce, children with special needs and the worry of inheritance at too young an age are all issues addressed by using a discretionary trust (also known as a Bypass Trust). We welcome the case studies in this Q&A paper which will shed light on this complex area for advisers working with trustees.”

Source : Standard Life

Riots in Vancouver, Canada after their team lost the game

International

Jun 16, 2011

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The Canucks lost against the Boston Bruins in the NHL’s Stanley Cup. Results : devastation in the city.

Riot police fired tear gas to control a mob after cars were overturned and set ablaze following the Bruins’s 4-0 win over the home team in the deciding Game Seven.

Television showed stores in the downtown area being looted and hockey fans hurling bottles at police and smashing windows in a repeat of ugly scenes that followed Vancouver’s loss to the New York Rangers in the seventh game of the 1994 finals.

“It is extremely disappointing to see the situation in downtown Vancouver turn violent after tonight’s Stanley Cup game. Vancouver is a world-class city and it is embarrassing and shameful to see the type of violence and disorder we’ve seen tonight,” Vancouver mayor Gregor Robertson said in a statement.

“The vast majority of people who were in the downtown tonight were there to enjoy the game in a peaceful and respectful manner.

“It is unfortunate that a small number of people intent on criminal activity have turned pockets of the downtown into areas involving destruction of property and confrontations with police.”

Boos rang out inside the packed stadium when NHL commissioner Gary Bettmann presented the trophy to Boston’s Slovakian captain Zdeno Chara after Patrice Bergeron and Brad Marchand had each scored twice and goaltender Tim Thomas won the most valuable player award after his second shutout of the finals.

The Bruins, one of hockey’s “Original Six” teams, had not won the sport’s most coveted prize since 1972 and defied the odds to win it this time in one of the most enthralling finals series in years.

Three of their four playoff rounds went the full distance of seven games and they came from 2-0 behind in the finals to beat the Canucks, who were favorites to win after finishing the regular season with the NHL’s best record.

“I think it was great the way our team just looked at the small picture,” said Boston coach Claude Julien.

“Every game, all we talked about was going out there and earning it. It wasn’t ours to have, it was ours to earn.”

The Canucks had home advantage for the finals and although they won their first three games in Vancouver, they lost all three in Boston before Wednesday’s decider on home ice.

For Vancouver, the loss ended their dream of winning the Stanley Cup for the first time, just over a year after the city hosted the Winter Olympics.

“I think anybody in our situation right now would feel real disappointed, whether you’re the favorite or not,” Canucks coach Alain Vigneault said.

“BATTLED HARD”

“We battled real hard. I know we gave it our best shot, but in this one game, they were the better team. It’s that simple.”

Bergeron scored the only goal of the first period then added a shorthanded goal at the end of the second to stretch Boston’s lead to 3-0. Rookie Marchand also scored in the second frame and capped the scoring into an empty net in the final period.

But it was Thomas who played the biggest role for the Bruins.

A late bloomer who spent years in the minor leagues and in Europe before finally making it to the NHL at age 28, he proved almost impenetrable throughout the finals, setting a record for the most saves.

In the final game, he saved all 37 shots that were fired at him with a calming look of composure that belied what he was really feeling.

“I was scared. I won’t lie. I had nerves yesterday and today,” he said.

“I faked it as well as I could, and I faked my way all the way to the Stanley Cup.”

Source : Reuters

Appointment : XL group names Peter R. Porrino as new Executive Vice President and CFO

Social

Jun 16, 2011

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XL Group announced the appointment of Peter R. Porrino as Executive Vice President and Chief Financial Officer. Mr. Porrino will join the Company in late August.

Mr. Porrino, who has more than 30 years of experience working in and advising the insurance industry, including considerable property and casualty insurance and reinsurance experience, will report to XL’s Chief Executive Officer, Mike McGavick, and will serve on XL’s Leadership Team.

Since 1999, Mr. Porrino has served as Ernst & Young’s Global Insurance Industry Leader. In that role, he oversees the firm’s worldwide insurance industry delivery of client services, thought leadership and strategic planning. His experience includes designing and implementing solutions to improve the use of financial information, developing strong relationships with the investor and analyst communities, and business strategy assessment and deployment.

Commenting on Mr. Porrino’s appointment, Mr. McGavick said: “We are beyond thrilled to have Peter join XL as CFO. Peter’s considerable insurance industry experience, combined with his broad background in corporate operations and global finance, make him the ideal addition to XL. As someone I have worked with for a number of years, I know the benefit we will gain from his strategic insights. Additionally, as a current advisor to XL, Peter knows the company and many of our leaders and will hit the ground running. I welcome Peter to our Leadership Team and look forward to the impact he will make.”

Mr. Porrino, a CPA, first joined Ernst & Young in 1978 serving in the firm’s New York and National insurance practices for 15 years before leaving to serve in senior management positions with several insurance companies. This experience includes Zurich Financial Services, where Mr. Porrino served as CFO of Zurich’s NYSE listed subsidiary, Zurich Reinsurance Centre, Inc. He rejoined Ernst & Young in 1999.

Mr. Porrino holds an MBA from New York University and BBA in accounting from Pace University.

Source : XL Group

Aviva Canada : warns on summer burglaries

International

Jun 16, 2011

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During the warmer season of the year Canadians spend more time outdoors. Aviva Canada wishes to communicate on the risks of thieves seizing the opportunity to strike.

Aviva insurance claims data shows that residential burglaries spike in summer months with a 13%, 20% and 31% higher frequency in June, July and August respectively, than April, which shows the lowest occurrence of residential theft claims.

“The key factor is more opportunity,” said Wayne Ross, vice president of national property claims at Aviva Canada. “As residents are out of their homes more frequently and for longer periods of time in the summer months, there is more opportunity for burglaries to occur.”

Aviva insurance claims data also indicates that break-ins are more common at the start of the weekend, with Friday showing the greatest incidence at 26% higher than Sunday, the day with the lowest incidence of break-ins. The good news for Canadians is that burglaries overall are on the decline, with Aviva data showing an over 42% decline in burglary claims between 2003 and 2010. National data from statistics Canada also shows a 4% decline in break and enters between 2008 and 2009.

However, while the frequency of this type of crime is on the decline, the value of property being stolen is on the rise. Since 2003, the average dollar value of the articles stolen from burglaries has increased 36% from $4,555 to $6,190 in 2010 – attributable to the popularity of easy to grab valuable items such as laptops, cell phones and video game consoles.

Based on 2005 to 2010 Aviva Canada data, Quebec homeowners have the highest frequency of break-ins at two times that of the national average. At just over one third of the national average, the Atlantic Provinces have the lowest frequency of burglary claims.

Province	Frequency of burglaries (vs National average)
Quebec	99% above the national average
Manitoba	43% above the national average
British Columbia	20% above the national average
SK, NT, NU, YK*	4% above the national average
Alberta	2% above the national average
Ontario	20% below the national average
Atlantic Provinces*	64% below the national average

“Intruders usually enter your home through one of three ways – through the basement, forcing entry through a window or door, or simply opening an unlocked door or window,” said Ross. “Homeowners can take simple precautions to prevent an intruder from entering their property.”

Aviva Canada suggests these precautions:

– If your windows are old, consider upgrading to newer models with improved locking systems. Ensure all windows are locked when out of the home or overnight;

– Make a home look occupied when you’re away. Try parking a car in the driveway, leaving some household lights on, or asking a neighbour to collect mail and newspapers;

– Install a security device with a loud alarm or flashing lights. Some alarms contact authorities directly when they have been activated;

– Use deadbolt locks on all doors, and when moving into a new property have the locks changed.

If you return home to find you’ve been the victim of a burglary, contact your insurance broker as soon as possible. Aviva also offers a single point of contact to begin the claims process quickly and efficiently. The toll-free claims line is 1-866-MY AVIVA, and it’s open 24/7 so customers can talk to an Aviva Claims Care Advisor immediately.

Source : Aviva

XL Group : announces preliminary loss estimates from severe weather in the US

International

Jun 15, 2011

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XL Insurance announced preliminary net loss estimates related to the severe weather occurrences, including devastating tornado activity, which affected the Midwest and Southeast United States over the periods April 22 – 28 and May 20 – 23, 2011.

The Company’s preliminary loss estimates related to the Storms, pretax and net of reinsurance and reinstatement premiums, range from approximately $50 million to $75 million, with the majority attributable to XL’s reinsurance segment.

The Company’s estimates are based on its review of individual treaties and policies expected to be impacted along with available client data. The Company’s loss estimates involve the exercise of considerable judgment and are accordingly subject to revision as additional information becomes available. Actual losses may differ materially from these preliminary estimates.

Source : XL Insurance

AIR Worldwide : 6.0 Earthquake Strikes the Quake-Weary New Zealand City of Christchurch

International

Jun 15, 2011

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Monday 13 June 2011, Christchurch New Zealand was shaken by a series of strong tremors. The city is still recovering from two previous earthquakes that struck the region in September 2010 and February 2011.

According to the United States Geological Survey (USGS), the largest earthquake had a moment magnitude of 6.0 and occurred at a depth of just 9 kilometers. The USGS estimated that the quake’s epicenter was located 13 kilometers southeast of Christchurch at Lyttelton, the city’s port. The quakes collapsed dozens of buildings and knocked out power to thousands.

According to AIR, the city of Christchurch bore the brunt of the damage. Local authorities report that more than 75 buildings were tagged for demolition. There has been significant new damage to already weakened buildings and according to a statement from New Zealand’s Prime Minister, it is now expected that as many as 900 buildings in the city’s central business district (CBD) will need to be demolished for safety reasons as a result of the last two events.

According to AIR, the ground shaking in the CBD caused by this latest earthquake is similar to that of last September’s quake. The areas likely to experience the most severe damage are east and southeast of Christchurch. Given the good performance of New Zealand’s residential wood construction, further significant shake damage to these structures should be limited. However, AIR believes the severity of liquefaction damage in the city’s east and southeast will likely exceed that from the previous earthquakes, while in other areas, such as those near the city center and further north, liquefaction damage is likely to be less than that from the previous events. There have been reports of several sink holes opening up and several rock falls, mainly in eastern hills of Sumner, Taylors Mistake, Redcliffs, Morgan Valley.

Although the recent events were on a different fault from the event that struck Christchurch on February 22, they are part of the same aftershock sequence that was initiated by the Darfield earthquake, according to AIR. Aftershocks occur as a natural readjustment to the changes in stress caused by a quake and can last for many months or even years, depending on the size of the initial shock. New Zealand’s South Island, on which Christchurch is situated, has an active fault zone in the north, which includes a region known as “Porters Pass-Amberley Fault Zone” and two others, the Alpine fault zone and the Hope fault zone. According to AIR, most known historic earthquakes on South Island have occurred in this 200-mile wide collision plate boundary zone. The entire earthquake sequence is broadly associated with the regional plate boundary deformation as the Pacific and Australia plates interact in the central South Island.

Meanwhile, the Earthquake Commission (EQC) confirmed that it will be classifying Monday’s 6.0 tremors as new events. This is an important distinction for insurers who provide coverage for amounts above the EQC coverage; for reinsurers, the standard hours clauses used to define a loss occurrence would also treat these aftershocks as new events. At present, the EQC provides cover for damage to residential properties and contents from earthquakes up to a maximum of $100,000 and $20,000 for contents, along with defined coverage for damage to residential land. The complexity with this event derives from the many structures that are currently being repaired and that may have sustained additional damage, posing additional challenges for estimating incremental damage.

AIR continues to collect and analyze available data on this event. Updates will be provided as warranted.

Source : AIR Worldwide

Allianz : China to internationalise the renminbi (RMB)

Financial News

Jun 14, 2011

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Mark Konyn, CEO Asia Pacific at RCM, a company of Allianz Global Investors discusses the future of the renminbi:

“The long term goal is for China to internationalise its currency. As such the renminbi (RMB) will be more widely used for both trade and investment, ultimately leading to convertibility on the capital account. Part of the programme of reform that will ultimately lead to full convertibility is establishing Hong Kong as an international centre for the RMB.

“There has been much discussion on what the rise of the RMB as an international currency will mean for the global financial system and whether or not the RMB will become a reserve currency at some point in the future. We believe that while China’s growing influence on the global economy and the importance of the RMB will lead to central banks considering the RMB as a reserve currency upon full convertibility, it will not replace the US dollar (USD) as the only reserve currency. This view should be seen in the context of the overall change affecting the way investors and central banks are thinking about reserve currencies more generally, impacted by changes in the pattern of global trade and the increasing need for banks and investors to diversify away from their dependency on the USD as the only reserve currency.

“The People’s Bank of China (PBOC), China’s central bank has itself hinted on a number of occasions that it too is looking to diversify its reserves away from the USD. Currently China has over USD3 trillion of foreign currency reserves with the overwhelming majority – estimated at 70% – held in USD and USD denominated securities. The Yen, Euro and sterling account for the remainder.

“Various key people in China have at times expressed concern about the value of the US dollar, and the management of the Federal budget in the context of China’s ownership of US debt. Most recently these concerns were expressed by a foreign ministry spokesmen. Fitch became the third rating agency to warn that the US could lose its top credit rating.

“It is now widely expected that China will widen the trading band for the RMB in an attempt to control the amount of hot money entering the economy. The policy initiative remains to allow the currency to appreciate gradually and thereby help stem the effects of imported inflation. Hot money entering the economy has been a challenge for the administration which has been looking to cool the economy and reduce speculation in property market and credit conditions. As a result measures to sterilise the hot money entering the economy have added to the nation’s dollar reserves which in-turn have offset attempts to diversify the reserves away from the dollar.

“We can expect to see a little more volatility in the currency as a result of widening the trading band; however the overall pressure is for the RMB to appreciate relative to the dollar in a global environment where the dollar is structurally weak due to the deficit problems in the US.”

Source : Allianz

Marketforce and the IEA’s 14th annual conference

Calendar

Jun 13, 2011

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Discuss a new future for long-term saving, protection and retirement at the UK’s leading event.

Formally known as The Future of Life Assurance this event will bring together the key stakeholders in the life and pensions sector, including banks, life assurers, fund managers, platform providers and IFAs to discuss the critical market issues and to debate how the industry can move forward.

The scope has been widened to include a debate about long-term saving and opportunities in the at and post retirement markets. There will also be the opportunity for more in depth analysis of platforms and the protection industry in the conference streams.

Venue : Venue Radisson Blu Portman Hotel, London

Price members : £1116.00

Price non-members : £1395.00

US : tornado toll hits 151 as fungus strikes victims

International

Jun 11, 2011

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The toll from the deadliest single tornado to strike the United States in six decades rose to 151, and eight hospitalized victims were infected with a rare and potentially deadly fungus kicked up by the storm, officials said Friday.

The toll from the May 22 tornado which destroyed a third of the town of Joplin, Missouri jumped by 13 from the number reported last week because a number of critically ill patients died in hospital, the Jasper County coroner’s office reported.

That brings the year’s total to 535 tornado fatalities, making 2011 the deadliest tornado season since 1927 and the sixth worst on record according to the national weather service.

The Missouri Department of Health and Senior Services said Friday it had received eight reports of patients suffering from “suspected deep skin fungal infection” as a result of their injuries in the tornado.

A spokeswoman for the department did not immediately return a request to confirm reports that at least three of those patients had died, including one woman whose arm was amputated in an attempt to control the infection. However, an epidemiologist with the local county health department said the infections can be quite dangerous.

“Several physicians have stated they could actually see the fungus growing on the wound so they would have to actually go in and scrape the wound out,” said Kendra Williams, administrator of community health and epidemiology Springfield-Greene County Health Department. “Some individuals were having that done on a daily basis.”

The fungus is commonly found in soil and vegetative matter, but only poses a hazard if it is deeply embedded in a traumatic wound, Williams told AFP. It can be successfully treated with antifungal drugs and surgical removal but if someone already had an underlying immune-compromising condition, “they’re going to struggle with it,” Williams said, adding “it could lead to fatalities.”

There is little concern that the hundreds of people working to clean up the miles of tornado damage in Joplin will be impacted, she added. “It’s not (caused by) a scratch and it’s more than probably stepping on a nail or a screw. It’s got to be pretty traumatic.”

Chicago, June 10, 2011 (AFP)

Europe : Germany vows to restore image of Spanish veg

International

Jun 9, 2011

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Germany will help repair damage done to the reputation of Spanish vegetables, falsely blamed for a deadly bacteria outbreak, Spain’s Europe minister said after talks in Berlin Thursday.

“The German government has agreed to make an effort to improve the image of Spanish produce in Germany,” Diego Lopez Garrido told reporters after talks with German counterpart Werner Hoyer.

“Twenty-five percent of our vegetable exports are to Germany, it is our most important export market. Therefore it is also the duty of the German government to assist us with promotion,” he said.

He described as “unfortunate” a false alarm in May by Hamburg’s health senator blaming organic Spanish cucumbers as a source for the outbreak of E. coli poisoning that has now killed at least 25 people.

The warning, later withdrawn, prompted an EU-wide alert and dealt Spanish growers a heavy blow as sales slumped across the 27-nation bloc. Producers in other countries have also been hit.

Spain’s fruit and vegetables exporters association, FEPEX, on Monday estimated losses as 225 million euros ($328 million) per week since the scare began in May.

The European Commission raised its offer of compensation on Wednesday to 210 million euros ($307 million) for vegetable farmers across Europe after Spain, France and others criticised a proposed 150 million euros as too low.

Berlin, June 9, 2011 (AFP)

Live webcast on IAG strategy with CEO Mike Wilkins

Calendar

Jun 8, 2011

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On Tuesday, 14 June 2011, IAG will deliver a half-day market briefing. At the briefing, IAG’s Managing Director and Chief Executive Officer, Mike Wilkins, together with IAG’s senior executive team, will provide an update on IAG’s strategy.

The presentations will be webcast live on IAG’s website from 8.30am (AEST) on Tuesday, 14 June 2011.

You will be able to access the webcast, and copies of the presentations, from the home page of the website at www.iag.com.au

WHO : eight out of 10 countries using mobile health

International

Jun 8, 2011

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Eight in 10 countries are using mobile phone technology to improve health services, from free emergency calls to appointment reminders, the World Health Organisation said on Tuesday.

The global health body found that only 19 of 114 countries surveyed had no mobile health initiative, known as mHealth.

“Eighty three percent are actually saying, yes we are involved with a minimum of one mHealth project,” said Misha Kay, who studies cell phone technology for the WHO. But most of those countries have several projects running, he added.

“So what we’re seeing is a fairly healthy groundswell of activity, also considering that we believe that a lot of the reports were understated,” he said.

With more than five billion cell phone subscribers in the world, and 85 percent of the planet covered by a commercial wireless signal, mHealth is becoming a popular way to strengthen health services. Speaking at a conference on mobile health in Cape Town, Kay said southeast Asia, the Americas and Europe had the most initiatives but around 75 percent of surveyed African countries were also using the technology.

Globally, the most common schemes for cell phones were call centres or help-lines, emergency toll-free numbers, and mobile telemedicine — such as doctors consulting one another.

Among the biggest barriers worldwide were cost, a lack of knowledge and health policies that did not recognise mHealth, the study found.

In Africa, the biggest impediments were operating costs and infrastructure, while in Europe concerns centred on the absence of legal guidelines on privacy and confidentiality.

The survey was based on data from a 2009 study by the WHO.

Cape Town, June 7, 2011 (AFP)

Young driver seminar at Department for Transport

Calendar

Jun 7, 2011

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At a seminar organised by the Driving Standards Agency (DSA) at the Department for Transport in Marsham Street on Wednesday 8 June, created to discuss education and training of young drivers, the AA will be calling for driving responsibility to become part of the National Curriculum.

uSwitch : study shows that less than half of Brits are proud of their local town center

Good to know

Jun 6, 2011

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The Government review, spearheaded by retail guru Mary Portas and designed to breathe new life into Britain’s ailing High Streets, cannot come soon enough according to a new report by uSwitch.com, in conjunction with research company, EasyInsites. It reveals that less than half of Brits (49%) are proud of their local town centre. More worryingly, a quarter of people (25%) used to be proud, but aren’t any more – a sad indictment of how Britain’s High Streets are going downhill.

Poor choice of shops (41%), high prices (29%) and shabbiness (12%) are driving people away from their local High Street. The high cost of parking a car is an issue for almost a quarter (22%) while 25% lament the fact that the recession has closed shops down.

The picture being painted is of a place people want to get away from, rather than go to. In fact, two in ten shoppers have already turned their backs on their local High Street (22%) choosing to shop in shopping centres, retail parks or online instead. Just 6% of loyal shoppers use their local High Street religiously.

Boarded up and vacant shops are the biggest culprit for making Britain’s High Streets look shabby (69%). People blame high rents (66%), high rates (60%) and the fact that small businesses can’t compete with the big retailers (64%) for the rash of vacant shops scarring High Streets up and down the country.

Despite this, almost a quarter of people (24%) would like to see their local town centre get a new lease of life through the arrival of a big name department store, such as John Lewis or House of Fraser. At the same time, almost two in ten (19%) would like to see new independent retailers such as florists, greengrocers, bakers and butchers, livening up their main shopping street. Just over one in ten (14%) would like to see a farmers market set up in their town centre.

The majority of Brits, 97%, care about their local High Street with 61% saying that it is vital to the community. They believe it is the lifeblood of their area because it provides local jobs (80%), is invaluable to those unable to travel, such as the elderly (77%), provides essential services and products (58%) and creates a feeling of local pride (47%).

With so much depending on Britain’s High Streets unsurprisingly 67% of Brits support the idea of an independent Government Review headed by retail guru Mary Portas. As part of the rescue plan, they would like to see free car parking to encourage shoppers back into town (76%), more variety (41%), cleaner pavements and streets (54%) and fewer charity shops (42%)^[10]. Whatever the outcome of the review, what is clear is that Britain’s High Streets are letting consumers and their communities down.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: “Britain’s High Streets should be the lifeblood of the local community – instead they are dying on their feet. High rents, rates and the recession have forced many retailers off the High Street altogether, while preventing new independents or start-ups from taking their place. Consumers often blame the larger retailers for the lack of choice on our High Streets, but the reality is that very often it is only the draw of a larger store that is keeping some town centres alive.

“The good thing is that 97% of consumers care about their local town centre – they want to see it thrive and they would like to be able to spend their money there. We are living in financially difficult times so anything that can relieve this pressure, such as free car parking for shoppers, will go down well. Yes this would cost local councils money, but we would all see the reward in a boost to civic and community pride.”

	Proud of local town centre	Used to be proud but not any more	Poor choice of shops	Shabby	High street is vital to the community
East of England	50%	26%	39%	8%	65%
London	53%	23%	38%	6%	70%
Midlands	48%	32%	40%	10%	58%
North East	53%	25%	45%	15%	59%
North West	52%	23%	33%	11%	52%
South East	47%	22%	45%	11%	66%
South West	57%	18%	39%	13%	65%
Scotland	37%	24%	49%	18%	56%
Wales	46%	30%	41%	13%	63%
Northern Ireland	36%	27%	27%	9%	55%
British average	49%	25%	41%	12%	61%

Source : uSwitch.com

Hiscox Annual General Meeting

Calendar

Jun 6, 2011

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The 2011 AGM will be held at the Elbow Beach Hotel, 60 South Shore Road, Paget PG04, Bermuda on 8 June 2011 at 10.00am.

For the convenience of the European Shareholders, they may attend the AGM via a video link at the Group’s London office, 1 Great St Helen’s, London EC3A 6HX at 2.00pm (BST) on 8 June 2011.

Aon : aerospace insurance market outlook

Industry News

Jun 1, 2011

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The aerospace sector weathered the global financial crisis relatively well, but confidence is still in short supply, with passenger and revenue forecasts still relatively conservative, according to Aon Risk Solutions, the global risk management business of Aon Corporation. The findings are detailed in Aon’s annual report on the aerospace industry, the Aon Aerospace Insurance Market Outlook, 2011.

The sector is now in its fifth consecutive year of falling insurance premium prices, with preliminary data for 2011/12 renewals pointing to a continuation of the trend. The ongoing soft market is being driven by a variety of factors, with changing insurance strategies, falling exposure as a result of the global economic downturn and the industry’s evolving risk profile, all playing a role.

Airport operators enjoyed the best results from the insurance markets, with lead premiums falling on average by 7%. Service providers experienced an average of 5% reduction in prices, an impressive level of consistency after the 6% average reduction reported for 2007/08, 2008/09, 2009/10. Lead premium in the manufacturer sector was stable once again for 2010/11, reflecting the reduction in turnover caused by the global economic downturn, coupled with the overall perception of risk in the sector.

Overall, four of the five regions experienced lead premium prices fall on average, with only the Middle East going against the trend, although as the second smallest region in the world from an aerospace point of view, it is subject to the influence from changes at the region’s major operations.

“The insurance programmes placed for the aerospace sector so far in 2011 suggest a fifth consecutive year of the soft market,” observes Danny Green, head of Aon Risk Solutions’ aerospace team in London. “While the long term declines in premium levels would suggest that insurers will begin raising premium at some point in order to maintain profitability, there are several reasons why this may not happen in the short term. Over capacity attracted by the sector’s relatively good loss history, as well as reductions in exposure, or the actual volume of risks being insured, driven by the global economic conditions have meant that there is lower exposure to be covered. The long term improvements in safety that are being made by organisations across the sector are also a major factor. As a result, there will continue to be pressure on insurance prices.”

Source : Aon Risk Solutions

Legal and General : secures lettings to Dreams, Costa, Home Bargains and Wilkinson

Financial News

May 31, 2011

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The Linked Life Fund attracts four new occupiers across its retail portfolio, driving income and reducing its void rate to a low of 1.6%

Legal & General Property announces that, on behalf of the Linked Life Fund it has secured lettings to Dreams, Costa and Home Bargains at the following retail parks: Solartron Retail Park in Farnborough, Highbridge Retail Park in Waltham Abbey and Southport’s Central Twelve Shopping Park, as well as securing Wilkinson as a tenant at its Clifton retail unit in Bristol.

Dreams Plc, one of the UK’s largest bed retailers, has taken 7,625 sq ft of space at the Solartron Retail Park on a 15 year lease at a rent of £42 per sq ft. Dreams replace Allied Carpets in a letting which reinforces the scheme as the dominant household furnishing retail park in its catchment area.

At Highbridge Retail Park, Waltham Abbey, Harveys lease has been surrendered and TJ Morris, trading as Home Bargains, has taken the 10,041 sq ft unit on a new 15 year lease at a rent of £22 per sq ft.

The Fund has also let 1,500 sq ft at Central Twelve Shopping Park in Southport to coffee chain, Costa Ltd, on a new 10 year lease at a rent of £31.50 per sq ft.

Finally, the Fund has let the former Borders unit at Queens Road, in Clifton, Bristol, to Wilkinson Hardware Stores Ltd on a new 15 year lease at a rent of £320,000 per annum. The letting has created an attractive investment, with Sainsbury’s occupying the adjoining space.

The Linked Life Fund, launched in 1977, is an open-ended commercial property investment fund with £1.15bn (as at end December 2010) of direct and indirect property assets under management located throughout the UK. The Fund generally concentrates on prime assets in core sectors. It seeks to vary the mix of development and added management opportunity across the Fund according to market conditions.

Craig Westmacott, Senior Fund Manager of the Linked Life Fund, comments: “These lettings emphasize the importance of owning well located and configured retail assets which remain appealing to a broad range of retailers, despite challenging economic conditions. The lettings have driven voids to a very low level (1.6%) across the Fund and considerably enhanced the appeal of the individual assets.”

Source : Legal and General

AXA Real Estate : to develop landmark office complex in Paris

Industry News

May 31, 2011

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Latest acquisition for Development Venture III will deliver a unique opportunity of 90,000 sqm office development next to French Ministry of Defence. AXA Real Estate announces that, on behalf of its Development Venture III vehicle it has been selected as partner of the Opale-Défense consortium to develop a major office project located next to Balard, the future site of the French Ministry of Defence in Paris.

AXA Real Estate will work in partnership with leading global construction company, Bouygues Construction, to deliver a new 90,000 sqm office building at the western end of the Balard site for which they expect to submit a planning application for the Wilmotte & Associés designed project later this year. Construction is expected to commence in 2012, with completion due by the end of 2014. The project will comprise four office buildings, with delivery either in a single phase or via two phases of two buildings each. AXA Real Estate and Bouygues Construction are also aiming to obtain the relevant BBC-effinergie®, HQE® and BREEAM sustainability certifications.

Following this transaction, the Venture has now fully committed the €377.5 million of equity it has raised to date, with other acquisitions including a 20,000 sqm office building project in the City of London, and a further 40,000 sqm development project in Paris Region. The Venture recently completed a second closing in January 2011 and is targeting a third and final close of up to €600 million by Q3.

Jean-Manuel Rossi, Global Head of Development of AXA Real Estate, said:
“This prestigious project gives us the opportunity to invest on behalf of our clients in a landmark office asset, which will be the largest current development of its kind in France. Our expert in-house development team will work closely with Bouygues Construction throughout every phase of the project as we ultimately aim to deliver one of France’s most prestigious office buildings. We believe that it will attract strong occupier interest given the high profile nature of the building, its excellent location and its sustainability credentials.”

Denis Morel, Senior Fund Manager of AXA Real Estate’s Development Venture III, added: “We have secured a number of compelling development opportunities for the Venture to date where we believe we can deliver high quality assets into markets where an ongoing supply / demand imbalance means we can expect to take advantage of robust occupier demand. We continue to see strong interest in the Venture from a number of potential investors across the globe, notably overseas, with several already at advanced stages of due diligence. We therefore expect to announce our third and final closing of the Venture by Q3.”

Source : AXA Real Estate

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