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The year 2011 is upon us and with the new year now here, health care is set to change thanks to President Obama and his Affordable Health Care Act.

The Affordable Health Care Act was signed back on March 23, 2010, and within it there were yearly changes put in place which would alter health care and how it is administered in the years to come.

Now that the year 2011 is here, some of these benefits and changes are kicking into gear.

The first phase of the Affordable Care Act was set to be activated come January 1, 2011, and indeed it did.

There are going to be changes to medical insurance plans, insurance benefits, etc.

The first and biggest change is the fact that parents can now keep their adult children on their health insurance until the age of 26.

Previously, once kids turned 19 or graduated college, they would be dumped from their parents health insurance plan.

This is a big change that should help more kids remain protected under health insurance for quite some time.

Many kids who get into their 20′s still do not have jobs and thus cannot afford their own health insurance. They live without any, putting them at risk of problems later down the road.

The other change is that all health care insurance plans must cover kids under the age of 19, no matter what pre-existing conditions exist. This should greatly help kids who are ill and have parents who are worried they will not be picked up on their health insurance plan.

These changes and more are going a long way to showcase the benefits of the Affordable Care Act.

Source : Smart About Health

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Home insurance is now the number one target for insurance fraudsters according to the hundreds of fraudulent insurance claims exposed every day says the ABI. The ABI’s latest industry data on fraudulent insurance claims1. shows that:

– Every day insurers detect 335 fraudulent insurance claims worth £2.3 million.
– Dishonest home insurance claims are the most common: 170 cheating householders are caught out each day. Typically these involve alleged accidental damage to carpets and furniture due to spilled drink, which were in fact caused deliberately.
– Fraudulent motor claims are the most costly: 108 bogus motor insurance claims worth £1.12 million are exposed each day.
The daily roll call of insurance cheats exposed include:
– A policyholder claimed on his household policy for the theft of DVDs that he said had been bought locally, despite the fact that they had yet to be released in the UK.
– A policyholder who took his car to participate in a race day at the Nurburgring race track in Germany. He crashed the vehicle causing extensive damage, which he then shipped back to the UK and left alongside a road where it was claimed the damage had taken place.
– A man claimed for head injuries allegedly as a result of falling over a loose paving stone, which were in fact sustained after being hit by a baseball bat during a fight.
Nick Starling, the ABI’s Director of General Insurance and Health, said:
“Insurance cheats do not prosper – they can expect to get caught, face problems getting future insurance and risk getting a criminal record. The majority of customers are honest and rightly object to subsidising the cheats. Insurance fraud adds an extra £44 to the average UK household’s annual insurance bill. This is why 2011 will see insurers intensify their war against the cheats, to protect their honest customers.”
In the five years since the ABI has been collecting data on insurance fraud, many bizarre bogus claims have come to light including:
– A woman reported her husband for exaggerating injuries received in a car accident after he walked out on her having collected £385,000 compensation. For three years he had pretended to be crippled.
– A man, who claimed to be unable to walk following an accident, was photographed in his local newspaper collecting an award for the leading goal scorer in his local football team.
– A car owner claimed his car had been stolen. However, he had in fact pushed it over a cliff and planned to use the insurance payout to meet his outstanding HP repayments on the vehicle.

Source : ABI Press Release

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Insurance companies are uncovering an average of 335 fraudulent claims every day, says a report. According to the Association of British Insurers, the claims, which are being detected with increasingly sophisticated techniques, are costing £2.3m every day.

The most common type of insurance fraud is home insurance, says the report, with 170 bogus claims made each day. Fraudulent home insurance claims usually involve people claiming for alleged accidental damage to carpets or furniture – such as spilled red wine or coffee – only for insurers to find the damage was done deliberately.

The second most common type of insurance fraud was motor insurance, with 108 fraudulent claims made each day, costing approximately £1.1m.

Speaking to Sky News, Malcolm Tarling, of the Association of British Insurers, said: “We’ve had people who have travelled overseas and claimed for stolen cameras and items they’ve never had.”

He said some people also “spill paint and coffee on carpets and then claimed for the complete refurbishment of the home”.

One claimant crashed his car during a race at the Nuerburgring race track in Germany, but shipped it back to the UK to claim it was damaged at the side of the road in Britain.

Another policy holder alleged he had sustained a head injury after tripping over a loose paving stone, only for it to emerge he had been hit by a baseball bat during a fight.

Nick Starling, also of the Association of British Insurers, said: “Insurance cheats do not prosper – they can expect to get caught, face problems getting future insurance and risk getting a criminal record.”

He added: “The majority of customers are honest and rightly object to subsidising the cheats. Insurance fraud adds and extra £44 to the average UK household’s annual insurance bill.

“This is why 2011 will see insurers intensify their war against the cheats to protect their honest customers.”

Source : Sky News

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Japan’s Dai-ichi Life Insurance said it will fully take over the mid-size Tower Australia Group by May as it seeks to shore up its business in growing overseas markets.

Dai-ichi, the country’s number-two life insurer, said the move marks the largest purchase of a foreign competitor by a Japanese life insurer.

The Japanese firm is the largest shareholder in Tower with a 28.96 percent stake, following its purchase of 37.6 billion yen (456 million dollars) in shares in 2008.

To take full control of the Australian insurer, Dai-ichi will make an additional share purchase through a tender offer for about 99.6 billion yen, the Japanese insurance house said.

“The company believes it will be able to strengthen its operating base significantly in Australia by acquiring 100 percent ownership of Tower,”

Dai-ichi said in a statement.

“After the transaction, the company believes its overseas earnings base will expand significantly and therefore the company can make progress in diversifying its earnings geographically.”

The deal represents Dai-ichi’s first acquisition since the company went public in April.

Tower’s predecessor, founded in New Zealand in 1869, spun off its Australian operations in 2006. It registered premium revenues totalling about 942 million Australian dollars (950 million US) in the year ended September, Dai-ichi said.

The Australian life insurance market totals 2.5-3 trillion yen, accounting for about a tenth of Japan’s, but demand for death benefits and medical insurance has been growing rapidly, a Japanese financial daily reported.

Tokyo, Dec 28, 2010 (AFP)

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Taiwan’s China Life Insurance said on Monday it would invest 379 million Chinese yuan ($57 million) in an insurance arm of China Construction Bank.

China Life’s plan highlighted the improving ties across the Taiwan Strait. A landmark financial deal was inked by Taiwan and China earlier this year, opening possibilities for financial firms on both sides to invest in each other.

Earlier this year, China Life said it was in talks with two to three Chinese firms to form an insurance tie-up as it aims to tap the huge mainland market.

The news came after the Taipei stock market closed on Monday. China Life shares jumped their daily limit of 6.9 percent, outperforming the main TAIEX’s 0.35 percent rise.

Source : Reuters

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More than 4 million Florida homeowners, battered by property insurance rate hikes and disappearing coverage, are about to get hit again.

State regulators have approved $718 million in rate increases — despite five years of no hurricanes. They will widen an already $20 billion gap between what Florida consumers this decade paid for protection and what insurers returned by way of claims checks.

Florida insurers continue to claim they are losing money — the top 20 carriers reported losing $111 million the first half of the year after big payments to reinsurers for hurricane protection — but the Herald-Tribune found those figures also hide profits.

Payments to affiliated companies continue to tack on hundreds of dollars to the individual bills of homeowners, charges a consumer advocate says are inflated. Most Florida insurers need not publicly report those profits, but two that do posted earnings of $32 million despite telling state regulators their insurance operations lost $16 million and required double-digit rate hikes.

Most of the rate increases were approved behind closed doors, as insurers avoided triggering public hearings required for increases of 15 percent or more, and regulators granted increases higher than that anyway.

The rate increases will not be applied evenly, and many coastal residents will see increases of 20 to 50 percent — a difficult proposition in a sour economy.

To read the rest of the article please click here…

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Talks have broken down over a joint venture between Standard Life and Bank of China.

The Edinburgh-based finance house had hoped the Chinese financial giant would take a majority stake in its Heng An Standard Life business. That would have made it a domestic insurance company and given it more freedom to operate in China.

The joint venture, which operates in 31 Chinese cities, was set up in 2003, selling a range of insurance products. It has grown to have 350,000 customers, with £116m of business last year.

In September last year, Standard Life announced it was in the final stages of talks with Chinese regulators for Bank of China to take a majority stake in Heng An Standard Life.

As a joint venture with half its ownership in non-Chinese hands, and the other half controlled by state-owned investment agency Tianjin TEDA International, the company has been constrained in where it is allowed to operate.

Alex Salmond

Standard Life said last year that the attraction was Bank of China’s “excellent distribution strengths, and there continues to be significant growth potential across the fast-developing life insurance industry in China”.

Last month, Chief executive David Nish travelled to China as part of a business entourage accompanying Prime Minister David Cameron, and the company has also been backed by Scottish First Minister Alex Salmond on a visit to Tianjin in July.

But 15 months after saying it was in the final stages of talks, Standard Life issued a terse statement to the London Stock Exchange, saying: “It has not proved possible for the parties to reach agreement. Standard Life will continue to develop Heng An Standard Life in partnership with its existing joint venture partner”. No further explanation was given.

A Standard Life source said: “We were very positive about the talks. There’s disappointment that the parties haven’t managed to reach agreement, but our business is well-established out there. We’ve got a very successful joint venture in India, so our focus on Asia will continue.”

According to Standard Life, its joint venture’s business represents only 1% of sales.

Source : BBC

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Swiss Re today announced the transfer of USD 50 million of longevity trend risk to the capital markets through the Kortis Capital Ltd. (“Kortis”) securitisation programme.

This transaction marks an innovative transfer of longevity trend risk to the capital markets. Kortis Capital Ltd. provides cover to Swiss Re against a divergence in mortality improvements experienced between two selected populations. The bond is based on population data and would trigger in the event there is a large divergence in the mortality improvements experienced between male lives aged 75-85 in England & Wales and male lives aged 55-65 in the US. The single tranche Series 2010-I Class E Notes are rated BB+ (sf) by Standard & Poor’s.

“The global longevity issue is already huge and will continue to grow as the result of ageing populations and higher risk awareness. We are uniquely positioned to help develop new and flexible solutions for clients with longevity or mortality exposures, given our core mortality expertise,” said Brian Gray, Swiss Re’s Chief Underwriting Officer. “Swiss Re’s longevity strategy focuses on providing our clients with indemnity protection, while supporting the development of efficient capital market solutions on an indexed basis as a source of future long-term capacity.”

Swiss Re has a strong track record of developing the capital markets for insurance perils, initially with natural catastrophe bonds and more recently by periodically securitising its life risks. Swiss Re has obtained over USD 1.5 billion in extreme mortality risk protection from its Vita programme since 2003.
“The Kortis programme is of particular note as it provides protection against adverse deviation in mortality improvements for both Swiss Re’s mortality and longevity portfolios, whilst taking into account the complementary nature of the two risks,” said Christian Mumenthaler, Swiss Re’s Head of Life & Health.
Swiss Re Capital Markets acted as sole manager and bookrunner on the notes issuance. Risk modelling and analysis were performed by Risk Management Solutions Inc. (RMS). Collateral for the Kortis notes consists of securities issued by the International Bank for Reconstruction and Development.
The Kortis notes were sold in a private placement pursuant to Rule 144A of the U.S. Securities Act of 1933, as amended, (the “Securities Act”) and have not been registered under the Securities Act or any state securities laws; they may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

Source : Swiss Re Press Release

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An increasing number of cases of teeth-grinding in debt-ridden Ireland were being blamed by dentists Wednesday on patients’ financial worries.

Dentists believe that the increased levels of bruxism — the medical name for teeth-grinding — are due to stress brought on by Ireland’s economic crisis.

Doctor Dermot Canavan of the Irish Dental Association says the condition is often linked to anxiety and stress, as well as excessive smoking, alcohol use and the consumption of too much coffee.

“While we don’t have exact figures I know from my own practice and from talking to other dentists that there has been a substantial increase in the number of patients suffering from this condition,” he said.

“From talking to patients it is clear many are facing severe financial pressures.”

Experts believe one in five people will grind their teeth at some time, most commonly at night, but dentists here say they are seeing numbers far in excess of that in many surgeries.

The symptoms of bruxism include headaches, tooth damage, earaches, and mouth and jaw pain.

Ireland’s economy has been hammered by the international financial crisis and the government has brought in a series of severe austerity budgets that have slashed spending and increased taxes.

The eurozone member had to seek an 85-billion-euro (112-billion-dollar) rescue package from the European Union and the International Monetary Fund as massive debt and deficit problems left the country on the verge of collapse.

Dublin, Dec 22, 2010 (AFP)

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Aviva and UBI Banca, the fifth largest banking group in Italy, today announce the renewal of their strategic partnership in the life insurance sector until the end of 2015. The contractual conditions of Aviva’s current agreements with UBI Banca will be unchanged.

Aviva’s partnership with UBI Banca involves the distribution of Aviva life insurance products through 1,151 branches of UBI Banca subsidiaries Banca Popolare Commercio and Industria, Banca Popolare di Bergamo, Banca Carime and Banca Popolare di Ancona.

Andrea Battista, Chief Executive of Aviva Italy, said: “The renewal of our partnership with UBI Banca testifies to the soundness and effectiveness of our agreements in the bancassurance field, together with our desire both to strengthen and to develop further our relations with UBI Banca Group”

Victor Massiah, the Chief Executive Officer of UBI Banca, said: “This agreement confirms the good performance of our business with Aviva and the stability of our industrial partnership, designed to supply products of high standing to our customers”.

Source : Aviva Press Release

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Brit Insurance, the international general insurance and reinsurance group, is pleased to announce the appointment of Mark Figes as Class Underwriter, International Professional Indemnity. In his new role, he has assumed responsibility for the management and development of Brit Insurance’s International Professional Indemnity (PI) Portfolio and reports to Janet Henderson, Divisional Director of Brit Insurance’s PI business.

Mark has 30 years underwriting and underwriting management experience in the PI, Professional Lines and Casualty Underwriting sectors within the London Market. He joins from CNA Europe where he was Casualty Underwriting Director, responsible for the management and strategic direction of the European Casualty portfolio. Prior to this, Mark has held a number of senior roles at Swiss Re International, GE Insurance, GE Frankona Insurance and Alexander Howden Insurance Brokers.

Brit Insurance’s PI book covers a broad range of professions, including but not limited to Advertising Agents, Computer Consultants, Management Consultants, Solicitors, Architects & Engineers, Accountants and Insurance Brokers.
Matthew Wilson, CEO of Brit Insurance’s Global Markets business unit, commented:

“International PI is an important part of our portfolio and we are pleased to have Mark on board. His experience of leading underwriting teams throughout the market cycle spans a wide variety of global territories and books of business. His technical knowledge will also be a huge asset to the team”.

Source : Brit Insurance Press Release

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Catlin Group Limited, international specialty property/casualty insurer and reinsurer, announces an estimate of the financial impact of the 4 September 2010 New Zealand earthquake in view of the increased interest in this event by the investment community.

The Group currently estimates that, based on total insured losses from the New Zealand earthquake of US$5.5 billion to US$6 billion, Catlin’s loss amounts to approximately US$45 million, net of reinsurance and reinstatements. This is an increase of US$10 million from the Group’s previous assumptions.

Catlin’s estimate is based on information obtained to date from brokers and clients, a comprehensive review of direct insurance and reinsurance contracts, and information derived from catastrophe modelling analysis. The vast majority of the loss arises from property treaty reinsurance contracts written by the Group’s London/UK and Bermuda underwriting hubs.

Source : Catlin Press Release

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Insurance South Africa is pleased to announce that they are targeting their service to meet the short term insurance needs of consumers. Virtually any type of insurance can be underwritten as a short term coverage. This is similar in nature to term life insurance coverage that pays off at the face value from day one if the insured dies during the term of coverage.

Homeowners’ coverage and household insurance are two other types of coverage that can be written for a specified term. The rates are generally lower for such policies than whole life policies that stay in place year after year after year. Short term insurance may require multiple deductibles be paid for a single event if several types of damage are experienced.

The short term insurance industry is continuing to grow at a rapid pace. More people are purchasing such coverage while fewer people are making claims.

Source : US News Source

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Joining a growing list of corporate partners supporting America’s war veterans, Aon Corporation, global provider of risk management services, insurance and reinsurance brokerage, and human resource consulting and outsourcing, today announced it will work with American Corporate Partners (ACP), as part of a nationwide career mentoring program for the generation of veterans returning from the wars in Iraq and Afghanistan.

While ACP, a New York-based nonprofit, is not a jobs program, it provides a unique career development opportunity for veterans, from former enlisted members and officers to current Reservists and National Guard members, who have served on active duty after 2001. Also welcome in the program are the spouses of those service members severely wounded or who died while serving.

Approximately 50 Aon professionals around the country will be matched with veterans in Chicago, New York, Houston, Los Angeles, Atlanta, Denver and Baltimore/Washington, cities which currently have a demand for mentors. Aon also will make a financial contribution to ACP in support of its endeavors.

Sid Goodfriend, ACP’s founder, said, “I don’t believe there is another program like this in the country. With so many veterans returning to a tough job market, the need for guidance and advice on career issues is very real. We are delighted that so many Aon employees have volunteered their time to assist transitioning veterans, and we look forward to a long-standing relationship between American Corporate Partners and Aon.”

“Aon has a profound appreciation for the men and women in our Armed Forces,” said Greg Case, president and chief executive officer of Aon.  “So it is an honor and a privilege for us to help those in the military community to transition to the private sector.”

The Aon Salute to America’s Wounded Warriors was held in Chicago in November 2009 to assist disabled veterans find meaningful employment in northern Illinois. A similar event by Aon is scheduled in New York in February, 2011.

Former Chairman of the Joint Chiefs of Staff and current Aon Board Member, General Richard B. Myers, added, “This is a very important program for our service men and women, and I am confident that they will greatly benefit from the experience and insight of Aon’s colleagues who will participate in this partnership.”

Aon joins a growing list of corporate partners including AT&T, Deloitte LLP, General Electric, Goldman Sachs, The Home Depot, IBM, JP Morgan Chase, Liberty Mutual Group, News Corporation, PepsiCo, Travelers, and Verizon Communications. Employees from each company volunteer to mentor veterans in one-on-one partnerships for one year.

ACP is currently accepting applications from qualified veterans in its seventeen participating cities.

Source : Aon Press Release

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Ecclesiastical Insurance Group has appointed Denise Wilson to its Board as a non-executive director.

She has also been appointed as a trustee to Allchurches Trust, the parent company of Ecclesiastical Insurance Group, and as a non-executive director of Ecclesiastical Insurance Office plc, the group’s insurance business.

Ms Wilson is currently Customer Director at National Grid plc, where she is responsible for customer strategy, pricing and Gas Emergency support operations.  Prior to this, Ms Wilson has held several senior roles within National Grid plc and worked for BG Group plc as Head of Investor Relations and Global Head of Insurance & Risk Management. She was also an underwriter with Royal and Sun Alliance in the late 1980s. Ms Wilson is a fellow of the Chartered Insurance Institute (FCII).

Commenting on Ms Wilson’s appointment, Ecclesiastical’s Group Chief Executive Michael Tripp said:

“Denise is a great addition to our Board. Her appointments will provide continuity across all our activities and further strengthen relationships between Allchurches Trust, Ecclesiastical Insurance Group and Ecclesiastical Insurance Office. A highly skilled and credible executive, she brings with her broad experience from a FTSE top 20 business with a real focus on customer service, something that is absolutely central to our philosophy at Ecclesiastical. In addition, Denise has also had a career in insurance, which makes her a rare find. We’re delighted to welcome her and look forward to working together.”

Source : Ecclesiastical Press Release

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    – Highest percentage of snow and ice claims ever: 70 per cent of all claims snow and ice related

    – Drivers risking icy roads are putting themselves at risk

    AA Insurance has experience one of its busiest days today (Monday 20th December) as snow and ice lead to a 100 per cent increase in car insurance claims, compared with a normal December Monday.

    Claims staff at the AA’s Cardiff call centre, which itself is suffering some of the worst snow in the area for many years, have drafted managers in to help handle the work load.

    Simon Douglas, director of AA Insurance says: “Call volumes are at unprecedented levels and we are prioritising the most urgent cases.  The morning commute saw many people struggling to work with some icy roads resembling fairground dodgems as cars collide with each other and with kerbs, lamp posts and bollards.  With heavy snow in many areas this evening we’re expecting a similar pattern to develop.

    “Thankfully, the number of personal injury cases is about 10 per cent lower than on normal December days despite the high volume of claims, thanks to the low speed nature of most accidents.”

    Mr Douglas said that over the weekend, which brought Britain almost to a halt, the number of claims overall was up by a more modest 22 per cent, compared with the previous weekend but traffic levels were considerably lower than normal because of the weather.

    “But of all claims, an extraordinary 71 per cent of customers say that snow or ice contributed to their accident.”

    He urged drivers to heed the advice of local police and only drive if absolutely necessary.

    “It’s clear that highway authorities are unable to clear all roads and those that have been treated are re-freezing because in many areas the temperature is lower than minus 9 degrees C, below which salt becomes ineffective.

    “If you take your car out on icy roads, you are at significantly greater risk of suffering a collision.  Even if you have fitted winter tyres or snow chains, that won’t stop someone else from sliding into your car,” he points out.

    Source : The AA Press Release

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    Japan said it was easing visa requirements for patients seeking care at Japanese hospitals in a bid to promote “medical tourism”, particularly among Asians with rising wealth.

    Under the new Visa for Medical Stay system, which will start next month, foreign patients can receive renewable, multiple-entry six-month visas, compared with single-entry, 90-day visas available now.

    “My feeling is that barriers between nations have to be low in the field of medicine,” the top government spokesman, Chief Cabinet Secretary Yoshito Sengoku, told reporters.

    The centre-left Japanese government in its economic growth strategies announced this year included a push to provide “advanced medical treatment so as to meet growing demand for medical treatment in Asia”.

    The programme is designed to lure wealthy individuals and their families, particularly from China and other Asian nations, to Japan to expand the medical business sector.

    The move follows the example of other Asian nations, such as South Korea and Singapore.

    Until now, Japan’s stringent immigration rules discouraged foreigners from choosing Japanese hospitals for healthcare.

    The existing 90-day visa was too short for many patients. It did not allow multiple entries and did not grant any special visit status for family members wanting to accompany patients during their stay in hospital.

    Japanese embassies will start launching a campaign to promote the new programme next month, the foreign ministry said in a statement.

    Tokyo, Dec 17, 2010 (AFP)

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    As recently reported, the severe weather conditions affecting the majority of the UK have led to a surge in insurance claims.  At the start of the weekend when a further arctic blast has been forecasted, Merlin has committed to ensuring any new claims received from its clients by 21 December will be offered a visit from a Merlin adjuster before Christmas (providing access roads are open).

    Alex Kilpatrick, Client Development Director at Merlin explains: “We recognise the distress and disruption weather related damage can cause to our clients’ policyholders, particularly at this time of year.  We are determined to add value to our clients’ reputations by delivering prompt, professional service, ensuring policyholders feel supported and cared for by responding to their needs whilst reducing claims life cycle and controlling indemnity spend.  Our flexible claims management model combined with our people’s commitment to ‘going the extra mile’, supported by the latest technology, has seen us exceed policyholders’ expectations during these difficult times.”

    Merlin has seen over three times the normal claims volumes in December to date.  Every single claimant received initial contact from Merlin within 2 hours of their claim being notified and each claimant was offered a visit within 3 days of notification of the claim.

    Source : Merlin Press Release

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    Aon Benfield, the global reinsurance intermediary and capital advisor of Aon Corporation, today announces the appointment of Jing Ping Zhang as Head of Facultative for the firm’s China operations.

    Jing Ping will be responsible for building the facultative team, driving strategy and business production, and expanding Aon Benfield’s facultative footprint within the China market. He has spent the past two years as an integral part of the production and placement team of Aon Benfield Fac ¬– the facultative division of Aon Benfield – based in Aon’s Singapore Broking Centre and prior to that spent six years working for Aon Re and Aon Specialty in London, joining the company in 2002 as part of the graduate training program.

    Jing Ping has a Bachelor of Arts degree in Literature and Linguistics from the Jilin University, China, and an MBA from the Cranfield School of Management in the UK. Prior to joining the reinsurance industry, Jing Ping worked in the Chinese government economic and trade service sector.

    He will initially relocate to Hong Kong from 1 January 2011 with a view to ultimately moving to Beijing.

    Jing Ping will have a functional reporting line into Stuart Beatty, Executive Managing Director, Aon Benfield APAC Facultative, and will report into Henry To, Chief Executive Officer, Aon Benfield China and Hong Kong, on day to day operational issues.

    Malcolm Steingold, Chief Executive Officer of Aon Benfield APAC, said: “We look forward to Jing Ping joining the China team as we continue to expand our capabilities in the country and across Asia.  He joins the China team with considerable facultative experience which will prove to be invaluable to our growing client base.”

    Source : Aon Press Release

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    Swiss Re’s latest sigma study “Microinsurance – risk protection for 4 billion people” emphasises the relevance of microinsurance as an effective and viable risk management solution for low-income individuals. Microinsurance, which has the potential to cover up to 4 billion people, concentrates on few risks today, but its scope is broadening. The interest of insurers in microinsurance lies very much in its future potential.

    Microinsurance refers to insurance products especially designed for low-income individuals. The premiums and coverage are kept at a low level in order to make the products affordable and attractive to those policy holders, yet remain commercially sustainable. Currently, the risks covered by microinsurance are heavily tilted towards credit life insurance, but the market could expand to cover areas such as health, agricultural insurance, term life insurance, affordable pension products and other savings products.
    Microinsurance supports socio-economic development and insurance growth in emerging markets
    By reaching many individuals who were formerly excluded from insurance, and thereby reducing the vulnerability of low-income individuals and protecting their income streams, microinsurance helps to improve social stability and supports broad-based economic development.
    Amit Kalra, author of the new sigma study stated: “For insurers, microinsurance creates an opportunity to tap into new markets and build a strong brand value that can be used for selling conventional insurance products in the future.” Kalra added:”It is a win-win situation: Insurers help those who urgently need access to insurance. This in turn supports the long-term economic goals of insurers.”
    Huge untapped market potential at the bottom of the pyramid
    The microinsurance market could generate premiums of up to USD 40 billion. Over the last decade, insurers, NGOs, mutuals and community organisations have launched microinsurance programmes across product lines and major markets. The key drivers supporting this activity’s growth have been increasing microfinance penetration (in particular microcredit), the active involvement of government in certain markets and need-based product offerings.
    Kalra said: ”The Asia-Pacific region is the fastest growing and the largest microinsurance market. Microinsurance has also grown considerably in African and Latin American countries despite these being relatively smaller microinsurance markets at present.”
    As the microinsurance industry expands, organisations must increasingly cope with rising risk exposure and risk accumulation. This will lead to additional needs for capital and reinsurance solutions that leverage both traditional products and tailor-made innovative solutions. The latter includes, for example, weather derivatives and parametric nat cat solutions.
    Market potential and challenges
    While credit life, a mortality cover bundled with microcredit, is the largest selling microinsurance product, there is a strong need for a higher and broader level of protection that can be met with savings/term life, health and agriculture microinsurance.
    Some of the challenges that microinsurance faces are: Insufficient infrastructure, the absence of specific regulatory provisions for microinsurance, and the lack of exposure and risk data. Insurers must also find suitable partners for distribution and claims management. Products must be adapted to client needs as well as the cultural background of the prospective microinsurance buyers.
    Governments can foster the development of microinsurance through favourable regulations and public private partnerships
    The key objectives for governments and policymakers in this regard should be:
    1.        improving access to financial services for the low-income population;
    2.        the development of a sound regulatory framework;
    3.        lowering of barriers and developing efficient markets; and
    4.        increasing awareness and ensuring consumer protection.
    Kalra further said: “Policymakers can deploy multiple approaches to develop the sector, including adopting specific microinsurance regulations, providing financial support and sponsoring insurance schemes targeted to the extremely poor population.”
    Governments in partnership with private players can offer effective alternatives
    For the extremely poor population or markets which otherwise are not commercially viable, governments through public private partnerships (PPP) can effectively channel subsidies through microinsurance programmes by fully funding or subsidising premiums. Kalra added: ”The governments contribute to developing comprehensive natural disaster solutions and formulate collaborative approaches – such as PPPs – to effectively deal with the financial consequences of large-scale natural disasters on the low-income population.”
    Kalra added:”NGOs, international developmental organisations and donors have played an instrumental role in aiding the development of the microinsurance sector. The contribution of social-minded entrepreneurs in the field of microfinance and microinsurance has also been influential in encouraging private players to participate in the socially-driven businesses and thereby create new market opportunities for the bottom of the pyramid population.”

    Source : Swiss Re press Release

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