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George Stobbart

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Prudential Financial, Inc. (NYSE: PRU) announced today that Nippon Life Insurance Company, one of the world’s largest life insurance companies, has signed a definitive agreement to purchase a $500 million 10-year exchangeable surplus note issued by The Prudential Insurance Company of America.

The transaction, which is subject to customary conditions, is expected to close on September 18, 2009. Under the terms of the transaction, Nippon Life can exchange the surplus note for shares of Prudential Financial common stock at any time, at Nippon Life’s option, beginning on the fifth anniversary of issuance of the note.

“We are pleased that Nippon Life has chosen to invest in Prudential. We view this investment as a mutually beneficial partnership,” said John Strangfeld, Prudential Financial’s Chairman and Chief Executive Officer. “Our two companies will continue to seek opportunities to work together and to promote the well-being of the life insurance industry around the world.”

“This investment is a reflection of the longstanding relationship, based on mutual respect and admiration, between our two companies,” said Ikuo Uno, Chairman of Nippon Life Insurance Company. “We are very pleased to have the opportunity to strengthen our relationship with Prudential, which shares our values and belief in providing the highest quality products and services to customers in Japan, the United States and around the world.”

Barclays Capital served as financial advisor to Prudential on this transaction.

About Nippon Life Insurance Company

Nippon Life provides a broad array of products including whole life, medical, nursing coverage and annuities for more than 10 million individuals, as well as group insurance products for more than 230,000 corporate clients in Japan. As the world’s largest mutual life insurance company with a formidable capital base, Nippon Life focuses on constantly serving the best interest of its customers by providing “consistent protection” and “superior services” over the long term. At the end of FY2008, Nippon Life had total assets of JPY46 trillion (USD$467 billion) and total revenues of JPY6.6 trillion (USD$67 billion). For more information, visit www.nissay.co.jp/okofficial/english/

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Supersized handbags are becoming a threat to the safety of women motorists, it was revealed this week.

Female drivers spend an average of 416 hours in a lifetime rummaging through handbags in search of “buried” car keys, a poll by a leading car insurance company found.

A third of 1,080 women surveyed said they felt panicked or anxious about not being able to locate keys quickly, especially when travelling alone or late at night.

Also, 12% have had their bag or its contents stolen while they were distracted and 28% sensed they were being followed when they walked to their car alone.

As many as 75% of those polled reckoned they were at their most vulnerable when walking to cars alone at night.

London female drivers felt the most unsafe while rummaging for keys, while women motorists in Wales were the biggest sufferers of handbag crime.

Jenny Fawson, director of personal safety at safety organisation the Suzy Lamplugh Trust, said: “Two of the most important things a woman can do to improve her safety is to stay aware of her surroundings and to avoid potentially dangerous situations.

“If you are distracted from your surroundings because you are chatting on your mobile, listening to an MP3 player or rummaging about in your bag for keys, you will be less likely to see danger approaching and therefore less likely to be able to avoid it.”

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    Aviva Life Insurance and DBS Bank today announced a strategic partnership for bancassurance in India by which DBS Bank will offer its customers, customised insurance solutions from Aviva’s comprehensive portfolio.

    As the corporate agent for Aviva Life Insurance, DBS Bank which provides a holistic offering of banking and wealth management services, will now offer Aviva’s best in class products like Aviva Young Scholar, Aviva Health Plus, Aviva LifeLine, Pension Elite and SaveGuard, to affluent and high net worth (HNI) customers from all its 10 branches.

    Speaking on the occasion, TR Ramachandran, CEO and MD Aviva India said, “The tie-up with DBS Bank is an important milestone for Aviva. We are India’s leading Bancassurer with more partnerships and a first class reputation for implementation. Given the fast changing market dynamics and its volatility, customers today are seeking avenues for financial security. With this strategic tie-up Aviva and DBS can address this very need of the customers through our products and services.”

    Sanjiv Bhasin, CEO, DBS India, said, “We are committed to building a universal banking franchise in India. As we step up our initiatives in the retail domain, teaming with Aviva reaffirms our approach of partnering with the best to offer optimal solutions and service excellence.”

    Both Aviva and DBS have high expectations from the partnership and are fully committed to make it a success. Several joint initiatives have been planned to further promote this association. This partnership expands the ongoing relationship that Aviva and DBS have across Asia to the important and rapidly growing market of India. Aviva and DBS have forged a fruitful partnership in Singapore and Hong Kong since 2001. The two companies also plan to extend their partnership further by providing bancassurance in China and Taiwan in future.

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    Following the recent appointment of Senior Underwriter, Debbie Landes, in Houston, Torus has today announced that Senior Underwriter, Christopher Johnson, has also joined the company’s rapidly expanding Global Onshore Energy team, led by Philip Sexton.

    Mr. Johnson, who will be based in Torus’ London office, joins Torus from ACE European Group where he was Onshore Energy Underwriter responsible for Oil, Gas and Petrochemical risks. Prior to ACE, he was Lead Facultative Property Underwriter for Swiss Re. During his 15 year career he has also worked at CNA, ARIG and AIG Europe.

    Commenting on the latest addition to his team, Mr. Sexton said: “We have worked hard to build Torus’ global onshore energy capabilities and establish our services in London. With the team now in London and Houston we are truly expanding our reach into energy markets worldwide, and Christophers’ international expertise will certainly boost our global offerings.”

    Mr Johnson said: “Torus has already made a big impact on the energy insurance market in its first year of operation. As it enters the second there’s a great opportunity to build on the success to date by working closely with clients and their brokers to design products that respond to the challenges of today’s energy industry.”

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    Marsh, the world’s leading insurance broker and risk advisor, and GreenRoad, a leader in improving driving behavior, today announced that they are teaming together so that all Marsh U.S. brokerage clients will have the opportunity to obtain services from GreenRoad at favorable rates. Marsh first started offering GreenRoad’s services to its captive clients in November 2008.

    GreenRoad provides a comprehensive technology-based service that provides real-time, in-vehicle driver feedback designed to reduce fleet risk by changing driving behavior. It combines safety, risk visibility, functionality, and coaching in a cost-effective, scalable and easy-to-implement package. GreenRoad client experience data suggests that on average, GreenRoad clients have reduced accidents by up to 50 percent and fuel consumption by up to 10 percent. Using GreenRoad’s risk analysis tools, Marsh will work with its clients to make informed decisions about risk retention and insurance.

    GreenRoad’s service continuously rates driving skills and enables drivers and fleet managers to identify and address risky driving behavior and promotes improvements over time through constant reinforcement. Drivers are empowered to change their own behavior behind the wheel based on a combination of automated feedback and constructive coaching as well as access to their individual driving risk profile online.
    Risk management professionals gain better visibility into risk and safety levels using GreenRoad’s online reporting tools. They can review detailed reports by fleet, driver, department, maneuver type, trip, and other variables to identify high-risk areas and develop focused and effective risk management strategies — at the driver, fleet or organizational levels.

    “GreenRoad already is working with several Marsh clients, who have benefited from its services,” said Mark Langer, a managing director of Marsh and leader of the firm’s Transportation Practice.

    “With the fleet industry looking for proven ways to reduce accidents and manage costs, GreenRoad’s services represent a valuable element of a strong overall risk management program for businesses in this sector.”

    “With this announcement Marsh is building on its solid reputation for providing its clients with the industry’s leading risk management services,” said Eric Shishko, senior vice president, Global Insurance at GreenRoad. “We already have a number of joint clients in the U.S. and with this new agreement a broader community of Marsh clients will now be able to take advantage of our fleet safety service at favorable rates.”

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    All vehicles will have to be insured even if they are not driven and are kept on private land, according to measures announced by road-safety minister Paul Clark.

    The only exceptions will be those with a valid statutory off-road notice (SORN), which exempts them from road tax.

    Says Mr Clark said: “Increased police powers already mean more than 400 uninsured vehicles are seized every day. These tough new measures will catch anyone who is keeping an uninsured vehicle.”

    Owners will be warned that their vehicle appears to be uninsured, and subject to a £100 fine. If it remains uninsured it may then be seized and destroyed.

    Estimates suggest that two million UK drivers – 6.5% – are uninsured, which adds an estimated £30 a year – a total of £400 million – to insurance premiums.

    As many as 300,000 offenders a year are convicted for uninsured driving, which carries a maximum fine of £5,000 and 6-8 penalty points.

    The Department for Transport says that the new measures are expected to come into force in the next financial year.

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    As part of its strategy to grow its Financial Lines business in Asia-Pacific, Zurich Financial Services Australia (ZFSA) today announced the senior appointment of Head of Financial Institutions, Asia-Pacific.

    Mr Damian Lynch – who has 13 years experience in underwriting – has been named for this newly-created role. He will be based in Sydney.

    Mr Lynch was previously with Chubb, where he held various senior positions relating to Financial Institutions underwriting, including Australian Manager for Chubb’s Department of Financial Institutions. His career has also included a three-year stint in London, employed by investment and merchant banks.

    “Damian’s appointment is an excellent example of how we are able to attract talent to Zurich and he will be instrumental in the continuing growth of Financial Lines that will benefit the whole region,” said Mr Bernard Poncin, Head of Professional and Financial Lines, Asia-Pacific.

    Added Mr Paul Schappacher, Chief Underwriting Officer, Global Corporate – Australia, “Zurich sees the Financial Lines market as a growth area for its business. Damian is well respected by the industry for his deep understanding of the needs of Financial Lines customers and his appointment will assist in our growing the business in the region.”

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    The Financial Ombudsman Service (FOS) has published figures showing that the number of home insurance complaints has risen in the last 12 months.

    During 2008-09, the FOS reported 3,447 complaints relating to buildings insurance and 1,671 complaints relating to home contents insurance – up from 2,669 and 1,363 complaints respectively in the previous year.

    A report by the FOS noted: “This increase related to all types and areas of household insurance – and probably reflects the recessionary environment, in which consumers and insurers are now clearly taking a tougher line in protecting their financial position.”

    Meanwhile, RatedPeople recently advised homeowners who are taking a tougher financial line that they could reduce their home insurance premiums by following some simple advice.

    The website argued that by fitting new exterior locks to windows and improving home security in general people could see their premiums go down due to a diminished risk of damage to a property caused by a break in.

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    Over a third (39%) of UK motorists become seriously distracted when driving, according to the 2009 RAC Report on Motoring[1]. Young drivers (17 to 24 year olds) are the most likely to lose concentration behind the wheel with over half (55%) confessing that they become ‘seriously distracted’.

    Remarkably, one in five young motorists said they drive while listening to music through headphones, and 16% even admitted to putting on make-up behind the steering wheel. Although over a quarter (26%) of drivers between the ages of 17-24 admitted to texting while on the road, just 3% of the same group actually considered this behaviour acceptable.

    Motorists were also asked which of their in-car gadgets and technologies they found to be most distracting, the top five were:

    1. In-car music/changing CD and radio controls (57%)
    2. Sat-Nav systems (41%)
    3. Mobile phones (32%)
    4. Air-con controls (31%)
    5. Dashboard warning lights (21%)

    The research also looked at the impact in-car distractions can have on driving performance and the potentially fatal distances that vehicles can travel when motorists avert their eyes from the road for just a few seconds.

    The diagram below illustrates the distance a car can travel when engaging in common in-car activities such as re-programming a Sat-Nav device[2].

    Fig.1: In-car distractions and distance travelled

    Fig.1_In-car_distractions_and_distance_travelled(3)

    For example, during the five seconds it takes to change a CD when driving at 70mph, a car will have travelled the length of nearly two football pitches (156m) with the driver largely unaware of their surroundings and the behaviour of other road users.

    When you add this to the typical stopping distance of 96 metres[3], it could even be as far as 252 metres (almost the length of three football pitches) before the driver is able to bring the vehicle to a complete standstill.

    In response to the findings, David Bizley, RAC director of technical said: “This clearly shows that in-car distractions continue to be a significant road safety issue, especially for the new generation of drivers. While in-car gadgets do make journeys easier and more entertaining it’s important that they are used appropriately. Even a split second distraction can have potentially disastrous consequences.

    “Legislation to limit certain distractions is in place, but it’s evident that many of the Government’s messages are not getting through to motorists. The number of fatalities as a result of in vehicle distractions has increased 50% over the last three years[4]. You only have to consider the number of motorists that continue to text and drive to see that greater awareness of how to use in car-technology responsibly is needed.”

    To tackle the issue of in-car distractions, RAC is calling for the focus of safety campaigns to be widened to include all potential in-car distractions, such as adjusting the radio or heating and air-conditioning controls as well as the dangers of using mobile phones.

    Further distraction statistics

    • More than one in three (35%) drivers over 24 admit to becoming seriously distracted behind the wheel

    • 79% of motorists over 65 say they never become seriously distracted by using in-car instruments, equipment or other gadgets while driving
    • The region most easily distracted is the South West, with 45% of motorists often losing concentration while behind the wheel

    • The region with the greatest focus is Yorkshire, where this figure drops to just 32%

    • Londoners (55%) are the most likely to be distracted by their mobile phone. Scottish drivers (22%) are the least likely

    RAC tips on how to focus on the road

    1. Get everything ready before you set off – select your favourite CD or radio station, adjust your seat, check your mirrors, set the temperature, and programme the Sat-Nav before you even release the handbrake.
    2. Familiarise yourself with your car instruction manual so you can recognise the dashboard warning lights. This way you’ll know which require urgent attention, and which you can ignore until you reach a suitable place to stop.
    3. Put your phone on silent, or even better turn it off while you are driving. That way you won’t be distracted by incoming calls and text messages.
    4. If you need to have your phone on then either use a hands-free device or pull over to a safe place to make or receive calls.
    5. If you are using a Sat-Nav and need to make a change to your journey, pull over in a safe place before reprogramming.
    6. If your passengers are distracting you, remember you’re the one in the driving seat so you’re the boss. It’s fine to ask them to sit still or keep the noise down.
    7. However, your passengers can also help you out by doing those simple things such as changing the CD or adjusting the temperature.

    [1] In total, 1,109 British motorists were surveyed (i.e. those who hold a current driving licence and drive at least once a month).The survey was conducted in April 2009, with the questionnaire taking around 20 minutes to complete.

    [2] This diagram illustrates how far a car will travel at a specific speed whilst distracted for a precise amount of time.

    [3] Stopping distances are taken from the Department for Transport – Official Highway Code.

    [4] Figures from the Department for Transport show that the number of fatal accidents on UK roads involving a distraction in vehicle as a “contributory factor” increased 50% between 2005 and 2007.

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    British general insurer RSA is considering acquisitions in the order of 600 million pounds ($1 billion) and may fund any deal by selling new shares, analysts at broker Keefe, Bruyette & Woods said on Tuesday. RSA executives told a KBW conference on Monday the group was mulling bigger takeovers than the ‘bolt-on’ acquisitions it has traditionally pursued, and named Latin America and Canada as areas of potential interest, KBW analysts said in a note.

    RSA, best known in Britain for its More Than car and home insurance business, was reported earlier this month to be considering a 600 million pound rights issue. Leading RSA shareholders have told Reuters they would back a cash call only if the company presented an acqusition plan.

    An RSA spokesman said the company’s presentation to the KBW conference, led by finance chief George Culmer, did not mark a change to its previously-stated acquisitions strategy.

    RSA shares were down 0.8 percent at 125 pence by 0900 GMT, while the FTSE 100 share index was down 0.3 percent. Analysts said large-scale acquisitions could help drive growth at RSA, currently hit by slower sales as the recession bites, and facing limited opportunities for efficiency gains after several years of successful cost-cutting programmes.

    ‘There are challenges there, and that may be one factor driving them to look at acquisitions, said Numis Securities analyst Richard Gradidge. ‘The reports today would suggest they have admitted they’re considering larger deals which could require a rights issue.

    RSA has carried out six small acquisitions so far this year, and the company said at its first-half results last month it had a ‘strong’ deal pipeline.

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    Responding to publication by the Financial Ombudsman Service (FOS) of firm-specific complaints data, Maggie Craig, the ABI’s Director of Consumer Strategy, said:

    “The insurance industry acknowledges that improvements are needed in the way that it handles customer complaints, and is taking steps to address the issue. It’s absolutely right that consumers should know about the performance of firms who look after their insurance and investment needs, and complaints handling is an important part of that. But any such data must be presented in a way that helps consumers make informed choices. Unfortunately, the way that the FOS has chosen to present the data doesn’t achieve this aim, and may in fact mislead consumers about the performance of individual firms. For example, consumers can’t compare performance by sector or by product.

    “In order to try to provide some context to the debate about complaints handling, the ABI has brought together data showing the number of complaints in the context of the overall quantity of different types of insurance policy, such as motor, home and life insurance, and pensions and investments. This is the type of information which will help consumers to make informed choices about where to buy their financial products, and thus inspire companies themselves to improve their performance. We hope that in the future, both the FOS and the FSA will take this on board and adapt the way that they present complaints data.”

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    With the average wedding now costing nearly £16,000*, tying the knot can lead to a big hole in your finances.  However, getting married or entering into a civil partnership can actually save you money on your motoring insurance! According to online insurer swiftcover.com, adding your spouse to your car insurance policy can save you up to 20% compared to your singleton counterparts.

    For example:

    • A man adding his female spouse to his insurance policy could see his premium cut from over £388 to under £345 – if both drivers are male and in a civil partnership, the new premium would be around £348 because male drivers are considered a higher risk
    • However, if a woman driver put her male spouse on her policy, the premium would fall from just over £341 to little more than £303 – the cost for two women in a civil partnership would also be around £303

    swiftcover.com says insurance premiums are cheaper because claims statistics show that married people are safer drivers.  However, couples that aren’t officially ‘hitched’ will also benefit from insurance savings, whether they are heterosexual or same-sex partners, although the savings won’t be as high as drivers in a legally recognised partnership.

    Tina Shortle, marketing director of swiftcover.com, says: “We’re not suggesting that people say “I do” just to push down the cost of their car insurance, but many married couples may not realise that they can make significant savings by adding their spouses to their car insurance. It’s also important to note that same sex couples in a civil partnership will also get lower insurance premiums and swiftcover.com’s online quote system has been designed to enable drivers to add a spouse of either sex.

    “The amount of savings will vary depending on individual circumstances such as the type of car, where you live, your job and your previous claims and motoring history. As long as your spouse is not particularly high risk you will see a saving – and although it may not help with the cost of the ‘big day’, over many years of wedded bliss it could amount to a substantial saving.”

    Shortle pointed out that insurance policies should always be in the name of the main driver – the person that drives the vehicle most often – with the spouse or partner as the named driver. Naming your spouse or partner, or indeed anyone else, as the main driver to bring the cost of premiums down further could invalidate your policy in the event of a claim if it is found that they are not actually the person that drives the vehicle most often. Likewise, incorrectly claiming that a named driver is your spouse could make your policy invalid if you need to claim.

    As swiftcover.com shows, adding your spouse as a named driver to your policy, whatever your gender or orientation can begin to save you money, with the following examples reducing annual premiums by an average of £38, which could add up to £380 over ten years.

    figures

    *You and Your Wedding Magazine

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    Specialist insurance and reinsurance broking group, THB, has announced the appointment of a new deputy managing director for one of its largest and most successful divisions.

    Mick Cole becomes deputy MD of THB North America effective immediately, bringing 30 years of insurance experience to the role, including many years within THB North America itself.  He is well known to the division’s existing clients, having spent a great deal of time liaising with businesses throughout the United States to provide solutions for high exposures or specialty risks.

    THB North America works in tandem with insurance broker and insurance agent partners in North America, specialising in catastrophe cover for a range of clients including the largest industrial risks.  The division has successfully competed with domestic American providers, benefiting from its long standing reputation with underwriters within Lloyd’s, the London insurance market and other world markets.

    Mr Cole’s new role will involve assisting Mark Cody, the Managing Director of THB North America, who said of the appointment:

    “Mick’s knowledge will be invaluable in strengthening the Binding Authority team as well as helping me in the day to day management of this busy department.  He has been a key member in the ongoing success of THB North America and I look forward to his continued input as we seek to strengthen the team and our resources to provide the very best to our clients.”

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    The percentage of a family’s wealth invested in tangible assets, such as property, art and cars, has doubled on average over the last year following the drop in the investment markets, according to Aon Private Risk Management (APRM) – the leading insurance broker for the ultra high net worth sector. In response, APRM has launched an insurance risk auditing service to provide impartial, professional advice to families, trustees and organisations that manage extensive private insurance programmes with an annual premium over £40,000.

    The risk audit service is a three-step process, which starts by reviewing the current exposures faced by the family in relation to the following areas:

    • Tangible assets – property, fine art/jewellery, private aircraft/yachts
    • Liabilities – public and property owners, employers, directors
    • Personal well-being – travel/medical, kidnap and ransom, security, reputation.

    Once this information has been collated and the exposures identified, it is cross-referenced with the current insurance programme, to establish if the existing arrangements are:

    • Appropriate for the type of exposures identified
    • Without gaps or overlaps in cover
    • Utilising full market leverage

    The findings of the audit are published in a report that is given to the family or its adviser during a closing consultation.

    Charles HamiltonStubber, managing director of Aon Private Risk Management, said    : “Investment volatility has meant families are placing more emphasis on protecting their tangible assets. In turn, the role of the insurance broker has become key to insulating wealth by educating and boosting understanding on tackling risks. As confidence has been lost in some elements of the financial services, insurance brokers are in a strong position to respond and offer effective advice on protecting wealth.”

    Harry Dawe-Lane, executive at Aon Private Risk Management, added: “Following a decade of prosperity the size and value of a family’s portfolio of insurable assets has significantly grown.  During this period the insurance may not have been reviewed and updated, which can mean sums insured are incorrect and there are gaps or duplications in cover.  Policies may be placed with numerous insurers with no attention having been paid to premium saving opportunities by utilising market leverage.  Worse still, wordings may be old fashioned and outdated or just inappropriate for the risk insured. We wanted to create a service at the forefront of the ultra high net worth market that would provide the necessary due diligence to eliminate these issues where possible.”

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    XL Capital Ltd (NYSE: XL) announced today that the Company and its Chief Financial Officer, Brian Nocco, have agreed that Mr. Nocco will leave XL effective after year end.

    Mr. Nocco, who has served as XL’s CFO since July 2007, has agreed to remain as CFO until year end to ensure a smooth transition. The Company has initiated a search for a successor to Mr. Nocco.

    “We thank Brian for his many contributions at XL during the last two years,” said Mike McGavick, President and CEO of XL. “In particular, Brian helped XL navigate through the extraordinary challenges
    that XL has faced over the past year. We wish Brian well in his new endeavors.”

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    Forty years after man first set foot on the moon, the aerospace industry with its highly ambitious goals faces risks that are extremely difficult to calculate. Munich Re’s highly sophisticated space insurance policies provide security for the visionary sector of commercial space flight in which technical innovation and professional risk management are key factors.

    In the mid-1960s, a few years even before astronauts Neil Armstrong and Edwin Aldrin set foot on the moon on 20 July 1969, the commercialisation of space travel had already started. In contrast to state-subsidised projects such as the Apollo 11 mission, the private sector was unable to cover failure risks in its space programmes, and so there was urgent need for insurance protection. Parallel to the development of space technology, a highly specialised space insurance market emerged. Now the technology has come a very long way — and it is expensive: “Satellites cost in the region of US$ 250–300m. As a rule, several satellites are needed to build up satellite communications systems. Investment costs are therefore mostly over a billion US dollars,” explained Ernst Steilen, an aerospace expert at Munich Re.

    Even financially sound companies are hardly able to take on such a major economic challenge without insurance cover: “There is always the risk of a high total loss in an extremely inaccessible environment. While minor technical glitches can be easily and quickly sorted out on earth, in orbit they can to the loss of the satellite and thus to the whole investment.”

    In 1968, Munich Re concluded the first launch insurance covering five commercial Intelsat III launches — with one launch failure being contained in the deductible. In the beginning, Munich Re’s space insurances were written by the Aviation Department, but in the early 1980s a dedicated unit was set up. Since then, its highly respected aerospace experts assess these risks from every conceivable angle; calculating premiums requires extensive experience, an inquisitive mind, powers of imagination and a willingness to embrace visionary projects and undertakings.
    Tailored solutions for a highly specialised class of business

    “Aerospace is all about thinking the unthinkable. Conditions in space can only be simulated to a limited degree, everything has to function the first time, and every eventuality legislated for — with our insurance solutions, we have to do more than merely keep pace”, said Steilen by way of explaining Munich Re’s approach. In close cooperation with clients, we devise customised insurance solutions that offer them value and future-proof security. “With a share of 15–20% in global premium volume, we are the recognised market leader and the first port of call for clients seeking innovative and custom-tailored solutions.”

    Major risks can crop up well ahead of the launch. For that reason, space insurance is divided into three main areas reflecting the various phases involved, from preparation and launch to operation of the satellite in orbit: pre-launch, launch, and in-orbit insurance. Pre-launch insurance covers risks that can arise in the pre-launch phase, i.e. transportation of the satellites and the launch vehicles from the manufacturer’s premises to the launch site, assembly of the satellite and rockets, and in particular fuelling the satellite and launch vehicles with highly explosive rocket propellants. Damage incurred in this phase can jeopardise the whole mission.

    Launch insurance is a natural extension of the pre-launch insurance. It covers damage or losses during the actual launch phase, manoeuvring the satellite into its final orbit position and during the subsequent extensive series of satellite tests. The risk of a total loss is very much to the fore in launch insurance. In-orbit insurance covers the partial or total loss of a satellite during the operational phase; coverage of the satellite is renegotiated on a yearly basis. Within the various insurance policy periods, different aspects have to be taken into account such as the book value of the satellite, the costs of repeating the launch sequence following aborted launches, loss of revenue, as well as liability and business interruption losses.
    Innovation risk as an opportunity

    As a result of new technological solutions regarding launch vehicles as well as new satellite technologies, far-reaching risks arise that are difficult to anticipate and go far beyond the boundaries of traditional property insurance. In Ernst Steilen’s view, this is precisely where Munich Re is perfectly positioned: “High total losses, constant technical advances and failure-prone prototypes – these are the challenges space insurance sector always faces. While investor security is increasingly important to our clients, the pressure is also on to become even faster and more successful. For that reason we develop far-sighted solutions designed to secure the success and continuing existence of the whole aerospace industry.”

    In the next ten to 20 years, the aerospace industry will set its sights on expanding and improving existing applications such as communications and navigation systems as well as weather and raw materials research. “Space tourism could also play an increasing role provided a sufficient number of reliable launch vehicles can be developed”, added Steilen. Should this vision actually come about, a new era will dawn for the insurance industry: just like 40 years ago.

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    Aon Corporation, the leading global provider of risk management and human capital consulting, today announced that for the third straight year it has received a perfect 100 percent rating in the Human Rights Campaign Foundation’s Corporate Equality Index. Aon was one of 350 major U.S. businesses to receive a 100 percent rating.

    The Corporate Equality Index (www.hrc.org/cei) rated 590 businesses this year on the extent to which they protected their gay, lesbian, bisexual and transgender employees, consumers and investors. Ratings are based on such factors as nondiscrimination policies, diversity training and benefits for domestic partners and transgender employees.

    “This award is a tremendous tribute to our 37,000 global Aon colleagues who work hard every day to provide a diverse and productive work environment, said Greg Case, president and chief executive officer of Aon. “Winning this recognition for the third year in a row clearly demonstrates to the marketplace that Aon is the destination of choice for the best talent, not only in the insurance and human capital consulting industries, but within the global business community. We are very honored to receive this acknowledgement, and we will continue to focus our efforts on hiring the best, building the best, and being the best.”

    Aon’s goal for its global diversity initiative is to create a working environment that becomes a world-class magnet for talent and which nurtures the unique background, skills and creativity of the firm’s workforce. Aon continues to focus on two global diversity initiatives – – more women in senior management positions within the firm, and four regionalized diversity strategies – – with the objective of embracing the needs of clients and the talent imperatives of each community served by Aon, and to cascade those strategies from the executive level all the way down to the newest Aon colleague.

    About the Human Rights Campaign
    The Human Rights Campaign (http://www.hrc.org/) is America’s largest civil rights organization working to achieve gay, lesbian, bisexual and transgender equality. By inspiring and engaging all Americans, the HRC strives to end discrimination against all GLBT citizens and realize a nation that achieves fundamental fairness and equality for all.

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    Fines for environmental damage have doubled in the last five years[1] and businesses that do not comply with the regulations are facing increasingly severe penalties, warns Aviva Risk Management Solutions (ARMS), the new name for Norwich Union Risk Services.

    The implementation of the EU Environmental Liability Directive (ELD), came into effect across the UK this year – March 2009 in England, May 2009 in Wales and June 2009 in Scotland, and requires that EU member states prevent and remedy environmental damage.

    James Draper, principal consultant for ARMS, says: “With the new legislation and an increase in the cost of landfill tax, businesses are cutting more corners when it comes to waste disposal, one of the most common areas where businesses are penalised.

    “Companies producing a large amount of packaging need to be aware of their environmental obligations, which may involve recycling or recovering an amount from the packaging. Businesses with a turnover of more than £2 million and that handle more than 50 tonnes of packaging a year are obliged to set up a recycling scheme.

    “Many businesses are unaware of their responsibility or fail to make admissions about the levels of packaging being produced. A soft drinks company recently received the largest ever waste fine of £261,268 for failing to meet its requirements to recover and recycle packaging waste between 1999 and 2006. The company also paid £3,755 in costs to the Environment Agency, in addition to £6,854 compensation for unpaid registration fees for the years in question.[2]”

    “After waste disposal, the second most common risk is in relation to trade effluent or liquid waste.  Some businesses will have consent from the Environment Agency or local water undertaker to discharge a certain amount into controlled water, such as a river or to a sewer. If consent has been granted, businesses must adhere to the stipulations to avoid causing damage to sewers or the environment,” adds Draper.

    “Oil tank leaks and spillages are among the most common causes of water pollution.  They can easily be forgotten once installed until something goes wrong, so businesses should ensure they are maintained properly. Under the Oil Storage Regulations stiff penalties will be imposed for not complying.

    “Emissions are another risk to consider. Most businesses are permitted to produce a certain level of gas and vapour, but those that emit over the stipulated amount must have some sort of abatement control in place.  Businesses can implement measures to reduce CO2 emissions from cars through car-sharing schemes, increased use of public transport or video conferencing technology for example.

    “Having identified all the environmental hazards associated with a process or activity, it is important to identify the risks associated with these. To evaluate the risks, the probability and consequences of hazard control mechanisms failing should be considered.

    “Businesses should carry out a review in adequate detail to monitor volumes of waste, effluent or CO2. This should be conducted over a sufficient period to ensure that any day-to-day fluctuations are not given undue weight.

    “When the risks have been assessed, they must be controlled. This can be done by implementing physical safeguards, for example bunds, barriers or control systems, which may be dependent on information given in site rules. Controls may also require training or supervision and any limits set by legislation must be incorporated into these measures.

    “A strong overlap exists between environmental and health and safety hazards control so it may be possible to use information obtained from a health and safety risk assessment as part of the environmental review. Work should always be cross referenced.”

    ARMS provides a range of environmental training services including a one-day awareness course, NEBOSH Environmental Diploma and tailored training at a customer’s premises.

    A series of Hardfacts guides on environmental protection are available here

    [1] www.environment-agency.gov.uk/news/109955.aspx

    [2] www.environment-agency.gov.uk/news/109955.aspx

    0 2

    The Insurance Information Institute (I.I.I.) has experts available to discuss the insurance implications of the September 11 terrorist attacks and the challenges insurers and their policyholders have faced eight years later.

    The 9/11 attack produced insured losses of $39.5 billion (adjusted to 2008 dollars), including property, business interruption, aviation, workers compensation, life and liability insurance claim costs as shown in the graph below:

    A total of 2,976 people perished in the September 11, 2001 terrorist attacks in New York, Washington, D.C. and Pennsylvania, excluding the 19 hijackers. It was the worst terrorist attack on record in terms of fatalities and insured property losses, which totaled about $23 billion (in 2008 dollars).

    Sept 11 industry loss estimates (2008)

    Industry loss estimates

    ($B, Adjusted to 2008 Price Level)

    (1) Estimated September 11 industry loss at 2001 price level is $32.5 billion.

    “9/11 was the largest loss in the history of insurance until Hurricane Katrina in 2005 when insurers paid claims totaling more than $40 billion to help people along the Gulf coast rebuild their homes and businesses,” said Robert P. Hartwig, the I.I.I. president and an economist. “Insurance claim dollars are playing an essential role in rebuilding Lower Manhattan.

    The Insurance Information Institute has two reports online regarding terrorism and insurance: Terrorism Risk and Insurance, an Issue Update paper that is updated regularly; and 9/11 and Insurance: The Five Year Anniversary, a paper issued in September 2006.

    0 0

    The British Insurance Brokers’ Association (BIBA) has today welcomed the recent clarification by George Osborne, the Shadow Chancellor of the Exchequer, where he promised to move cautiously in dismantling the FSA (FT 9 Sep 2009).

    Eric Galbraith, BIBA CEO, said: “Following publication of the Conservative White Paper From Crisis to Confidence: Plan For Sound Banking, we responded setting out our high level concerns for the insurance intermediary industry. We were concerned about possible disruption and take some comfort from this explanation”.

    Galbraith added: “Our major criticism of the current regulatory regime is that the insurance intermediary sector was shoe-horned into an existing regulatory framework designed for the higher-risk parts of the financial services sector. We are concerned that the Conservatives might simply impose their proposed banking regime upon us.”

    Steve White, BIBA’s Head of Compliance and Training, commented: “The insurance intermediary sector is vital; it provides professional advice to businesses and individuals; and plays a key role in the identification, measurement, management, control and transfer of risk. Insurance brokers and intermediaries distribute nearly two-thirds of all UK general insurance and in 2007, UK insurance brokers and intermediaries generated £1.5 billion of invisible earnings”.

    White added: “It is essential that any new regulatory regime is appropriate, proportionate and cost efficient. It is also important that UK insurance intermediaries are not competitively disadvantaged compared to their European peers and BIBA will emphasise this point in its ongoing dialogue with the Shadow Treasury team.”

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