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George Stobbart

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The challenging economic conditions are forcing airlines to be realistic about their expected level of growth during their 2009/10 insurance policies, with average fleet values (AFV)* only expected to rise by 1% while passenger numbers are set to decline by 9%, according to Aon’s Airline Insurance Market Indicators 2009/10.

The 2009/10 exposure forecasts stand in stark contrast to the numbers reported in recent years. For the same period in 2008, AFV was expected to rise by 11% and passenger numbers by 13%. Similar exposure growth was forecast in 2007, 2006 and 2005.

The report’s key findings suggest that based on insurance programmes placed so far this year:

Passenger numbers in North America are expected to fall by 15% during the 2009/10 policy period, while AFV will fall by 3%;

Flag carriers expect the steepest declines in exposure, with AFV due to fall by 6% and passenger numbers by 13% as a result of the economic downturn putting pressure on business travel;

Bucking the trend, growth in the Middle East is expected to continue, with a 15% increase in AFV coupled with a 17% growth in passengers. The rate of growth is significantly lower than in previous years however, and a significant proportion of the region’s renewals have yet to be placed.

“Even before many of the premium airlines renew in the final quarter, passenger number forecasts are expected to decline by nearly 10% overall for the industry. While some of the industry data is starting to look more positive, given the well documented decline in the number of business travellers, passenger number forecasts could be even more gloomy by the end of the year once more of the industry’s major players have placed their 2009/10 insurance programmes” says Magnus Allan, Aon Global UK Aviation & Aerospace analyst. “The tension between the insurance markets needing to increase premiums and an industry that is suffering from the effects of the global economic downturn continues.”

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Willis HRH, the North American retail business of Willis Group Holdings (NYSE: WSH), the global insurance broker, today announced the appointment of Jason M. Richardson as Managing Partner of its Colorado operations, effective immediately.

In his new role, Richardson will be responsible for the company’s retail offices in Denver and Greenwood Village, reporting to Bill Creedon, National Partner, South Central Region of Willis HRH. Richardson will be based in Denver.

Richardson most recently served as a Senior Vice President with insurance broker Beecher Carlson in Atlanta, where he focused on large, national risk management clients, in particular those in the Construction and Real Estate (REIT) sectors.

Commenting on the appointment, Don Bailey, Chairman and CEO of Willis HRH, said, “Jason brings outstanding credentials to his new role here. He is a strong advocate for clients, and that dedication is reflected in his tremendous track record of growing his book of business. We are delighted to have Jason as a member of our team. His move to Willis HRH reaffirms our strong position as the employer of choice in this industry.”

Willis HRH is the North American retail brokerage business of Willis Group Holdings. The unit has more than 200 local offices across the United States and Canada, offering a full range of insurance and risk management services, specialist expertise and global resources to large corporate, middle-market and small business clients.

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    Resolution is interested in buying a general insurer. According to John Tiner, its chief executive, it is  part of its ambitious plan to shake up European financial services.

    Mr Tiner, 52, a former head of the Financial Services Authority, told The Times that Resolution was “pretty ambivalent about where the next acquisition comes from … There are currently opportunities among publicly listed companies, European insurers with UK life businesses and domestic finance houses, such as banks, that are thinking about their commitment to the assets they own.”

    Analysts say that Resolution is likely to make at least one more acquisition this year. It has been linked with the British divisions of AXA, the French insurer, and is seen as eyeing Scottish Widows, owned by Lloyds Banking Group, as its ultimate target in the UK.

    Although now is not the right time to buy a general insurer, Mr Tiner said, this could change. He said that it was his job to be “open-minded” and to advise Resolution on timing.

    Mr Tiner said: “For Resolution, 2009 and 2010 is the period of acquisition and beginning the processes of integration. In 2011, the integration completes and towards the end of the year you begin to think about the exit strategy.”

    Resolution, created last year by insurance tycoon Clive Cowdery to buy insurers and asset managers, clinched the first of a hoped-for trio of deals last month with the 1.86 billion pound ($3.11 billion) takeover of life insurer Friends Provident.

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    John Kitson, is to leave the company in March. He was director of the sales and marketing within Aviva’s general insurance business. Kitson joined Aviva from Norwich Union. He has worked for the company for more than 14 years. He was involved in the early growth of Norwich Union Direct and the recent Aviva rebrand.

    Kitson said: ‘This is a personal choice to have a rest, go fishing, write a book, go to Norwich City FC away games, and take stock.’

    The Aviva sales and marketing team will be restructured over the next month. Kitson’s replacement will be announced at a later date.

    Aviva UK General Insurance chief executive Igal Mayer says: “I thank John for bringing so much to Aviva over the last 14 years, from driving the early growth of Norwich Union Direct to his recent prominent role in our rebrand to Aviva.

    “Alongside the news about John, we’ve been planning changes to our future sales and marketing team to take us forward, not just for the next six months but for the long term future.”

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    Innovative mid net worth specialist Plum Underwriting has launched the first ever online quote and buy facility for brokers to obtain Mid Net Worth home insurance with Lloyd’s capacity. The fully transactional website allows ‘clean’ risks to be bound instantly and is based on its established online rating and quote engine.

    The facility dramatically shortens the time it takes for brokers to bind a risk from initial quotation compared with traditional methods.

    Plum Director David Whitaker said: “We are extremely pleased to be able to offer brokers this enhanced service when obtaining MNW cover for their clients. The facility provides our existing and new brokers instant quotes, confirmation and policy documents online, which means instant turnaround for brokers’ clients. Our open market arrangement uniquely combines the advantages of technology based delivery, with the ability to speak to underwriters about individual risks”.

    Plum Underwriting

    Is a London based underwriting agency, utilising Lloyd’s capacity to offer solutions to insurance providers. Plum underwrites niche household schemes, delegating authority to insurance providers, allowing them to white label their products and control of the client experience. The product range includes:

    Plum Flex: Non-Standard Household

    Plum Elite: Mid Net Worth Household

    Plum Let: Landlords and Tenants

    Plum Retreat: UK & European holiday homes

    Plum Schemes: Bespoke Solutions

    Plum is part of the Somerville Group of companies and is backed by Lloyd’s insurer Beazley, which has an AM Best rating of A (Excellent) and, as a member of Lloyd’s, benefits from the Lloyd’s chain of security.

    Somerville

    Independent underwriting and broking group Somerville Holdings plc was formed 25 years ago. From a solo broking operation, the group has expanded both organically and through acquisitions to include HNW and household underwriting, wholesale and retail general insurance broking and IFA businesses.

    Following the acquisition of specialist wholesale broker Voyager Insurance Services in September 2007 the group now manages approximately £50m of gross written premium.

    Is a London based underwriting agency, utilising Lloyd’s capacity to offer solutions to insurance providers.  Plum underwrites niche household schemes, delegating authority to insurance providers, allowing them to white label their products and control of the client experience. The product range includes:

    Plum Flex: Non-Standard Household

    Plum Elite: Mid Net Worth Household

    Plum Let: Landlords and Tenants

    Plum Retreat: UK & European holiday homes

    Plum Schemes: Bespoke Solutions


    Plum is part of the     Somerville Group of companies and is backed by Lloyd’s insurer Beazley, which has an AM Best rating of A (Excellent) and, as a member of Lloyd’s, benefits from the Lloyd’s chain of security.

    Somerville

    Independent underwriting and broking group Somerville Holdings plc was formed 25 years ago.  From a solo broking operation, the group has expanded both organically and through acquisitions to include HNW and household underwriting, wholesale and retail general insurance broking and IFA businesses.

    Following the acquisition of specialist wholesale broker Voyager Insurance Services in September 2007 the group now manages approximately £50m of gross written premium.

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    Further to the announcement on 25 June 2009, Barclays Bank PLC (‘Barclays’) and CNP Assurances SA (‘CNP’) have established a long-term life insurance joint venture in Spain, Portugal and Italy. This follows the completion of the sale of a 50 per cent stake in Barclays Vida y Pensiones Compañía de Seguros (‘BVP’) to CNP.

    Frits Seegers, Chief Executive of Barclays Global Retail and Commercial Banking, said: “We are excited about the opportunities presented by our joint venture with CNP. Combining the strength of Barclays brand and its distribution networks in Spain, Portugal and Italy with CNP’s expertise in insurance product design and manufacture will be a winning combination for both our organisations, our shareholders and, most importantly, our customers.”

    Gilles Benoist, Chief Executive Officer of CNP Assurances, said: “We are delighted to launch this partnership with such a highly regarded bank as Barclays. CNP’s long standing experience and expertise in life insurance, particularly in Southern Europe, combined with the growth capacity of Barclays in this region will create long-term value for all parties. Moreover, this partnership refocuses and strengthens CNP’s footprint in the region, and will be source of positive synergies.”

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    Kiln has today announced the opening of its new office in Paris. Initially the Paris office will underwrite aviation business, including airline hull and liability lines. This business will be managed by Philippe Daouphars, Kiln’s regional aviation manager, who was formerly based in Liège.

    The opening of the Paris office will strengthen Kiln’s presence in continental Europe, and will provide European clients with improved access to Kiln’s syndicates at Lloyd’s.

    Kiln originally established a presence in the European market in 2006 when it acquired the Belgian marine underwriter, Belmarine. Liège-based Belmarine will now trade as Kiln. Olivier Terlinden, who has developed the Liège business successfully since Kiln’s acquisition, will continue in his role as regional managing director.

    Charles Franks, group chief executive officer, Kiln Group, said:

    “This is an exciting milestone in our continued expansion, and the time is right to consolidate the Kiln brand. Just under 15 per cent of Kiln’s business currently comes from mainland Europe and improving access to our products and Lloyd’s for our customers throughout Europe will play an important part in the continued growth and development of Kiln.”

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      WHO is today issuing advice on measures that can be undertaken in schools to reduce the impact of the H1N1 influenza pandemic. Recommendations draw on recent experiences in several countries as well as studies of the health, economic, and social consequences of school closures. These studies were undertaken by members of a WHO informal network for mathematical modelling of the pandemic.

      Experience to date has demonstrated the role of schools in amplifying transmission of the pandemic virus, both within schools and into the wider community. While outbreaks in schools are clearly an important dimension of the current pandemic, no single measure can stop or limit transmission in schools, which provide multiple opportunities for spread of the virus.

      WHO recommends the use of a range of measures that can be adapted to the local epidemiological situation, available resources, and the social role played by many schools. National and local authorities are in the best position to make decisions about these measures and how they should be adapted and implemented.

      WHO continues to recommend that students, teachers, and other staff who feel unwell should stay home. Plans should be in place, and space made available, to isolate students and staff who become ill while at school.

      Schools should promote hand hygiene and respiratory etiquette and be stocked with appropriate supplies. Proper cleaning and ventilation and measures to reduce crowding are also advised.

      School closures and class suspensions

      Decisions about if and when schools should be closed during the pandemic are complex and highly context-specific. WHO cannot provide specific recommendations for or against school closure that are applicable to all settings. However, some general guidance comes from recent experience in several countries in both the northern and southern hemispheres, mathematical modelling, and experience during seasonal epidemics of influenza.

      School closure can operate as a proactive measure, aimed at reducing transmission in the school and spread into the wider community. School closure can also be a reactive measure, when schools close or classes are suspended because high levels of absenteeism among students and staff make it impractical to continue classes.

      The main health benefit of proactive school closure comes from slowing down the spread of an outbreak within a given area and thus flattening the peak of infections. This benefit becomes especially important when the number of people requiring medical care at the peak of the pandemic threatens to saturate or overwhelm health care capacity. By slowing the speed of spread, school closure can also buy some time as countries intensify preparedness measures or build up supplies of vaccines, antiviral drugs, and other interventions.

      The timing of school closure is critically important. Modelling studies suggest that school closure has its greatest benefits when schools are closed very early in an outbreak, ideally before 1% of the population falls ill. Under ideal conditions, school closure can reduce the demand for health care by an estimated 30–50% at the peak of the pandemic. However, if schools close too late in the course of a community-wide outbreak, the resulting reduction in transmission is likely to be very limited.

      Policies for school closure need to include measures that limit contact among students when not in school. If students congregate in a setting other than a school, they will continue to spread the virus, and the benefits of school closure will be greatly reduced, if not negated.

      Economic and social costs

      When making decisions, health officials and school authorities need to be aware of economic and social costs that can be disproportionately high when viewed against these potential benefits.

      The main economic cost arises from absenteeism of working parents or guardians who have to stay home to take care of their children. Studies estimate that school closures can lead to the absence of 16% of the workforce, in addition to normal levels of absenteeism and absenteeism due to illness. Such estimates will, however, vary considerably across countries depending on several factors, including the structure of the workforce.

      Paradoxically, while school closure can reduce the peak demand on health care systems, it can also disrupt the provision of essential health care, as many doctors and nurses are parents of school-age children.

      Decisions also need to consider social welfare issues. Children’s health and well-being can be compromised if highly beneficial school-based social programmes, such as the provision of meals, are interrupted or if young children are left at home without supervision.

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      David Thompson has been appointed head of PPF (Pension Protection Fund) proposition at Aon Consulting, the leading employee risk and benefits management firm.  His key objective is to reduce the time that failed companies’ pension schemes take to enter the PPF in order to decrease costs for schemes and uncertainty for its members.

      David brings technical experience and strong relationships with the PPF and independent trustees to the national role, dedicated to managing the transition of insolvent companies’ pension schemes into the PPF accurately, on budget and on time.  David has worked for Aon for nine years and will also continue his responsibilities as client manager.

      Based in Birmingham, a region identified as accounting for 20% of schemes entering into the PPF, David and a team of specialists will support trustees of schemes that enter the PPF assessment period through a range of actuarial, consultancy, administration, investment, legal and technical advice, coupled with project management skills and the ability to complete PPF Section 143 valuations.

      David commented: “As some 45,000 insolvencies are expected by the end of the year, more companies are relying on the PPF to provide compensation to members. However, schemes take two years on average to enter the PPF and can take much longer if not managed efficiently.  This means considerable uncertainty for members and reduces their ability to plan effectively for their retirement. Using our specialist PPF knowledge means our clients can be ahead of the game and we’re aiming to reduce the assessment period from two years to 18 months thus saving money and ensuring PPF compensation is paid sooner.”

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      Allianz Engineering has launched a free online guide to assist brokers and their clients identify plant machinery equipment, helping them safeguard against the threat of costly claims.

      Identifying types of plant can often be difficult; this new guide will help brokers advise clients on how to meet their statutory and regulatory requirements, what equipment should be inspected and how often inspection of each item should take place.

      The guide provides descriptions and images of a wide range of electrical, mechanical and pressure plant used in a variety of industries, from engines and alternators to fume cupboards, guillotines and café boilers.

      Phil Wright, chief engineer, Allianz Engineering said: “In the UK, there are approximately 13.3 million items of machinery needing regular inspection. At any one time, a proportion of these items will be defective, so regular inspection is an important operational requirement for many businesses.

      “The consequences of plant failure can include damage to other items of plant and buildings, accidents in the workplace and, in extreme cases, loss of life – all of which could result in claims costing millions of pounds. Brokers can play a crucial role in helping to ensure that clients comply with regulations and statutory requirements, which will improve safety and reduce risks in the workplace.”

      This guide is available to brokers and clients via the Allianz eBroker and Allianz Engineering websites.

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      The Supervisory Board of Allianz SE today has appointed Dr. Christof Mascher (49) and Jay Ralph (50) to the Board of Management of Allianz SE. Mascher takes over the responsibility as Allianz Group’s Chief Operating Officer from Oliver Bäte with immediate effect. Bäte assumed responsibility for Controlling, Reporting and Risk on Allianz SE’s Board of Management on September 1, 2009.

      • In addition, Christof Mascher will take over responsibility for the Assistance business (Mondial Group) from Jean-Philippe Thierry (60), who will retire from the Board of Management at the end of this year. Mascher will also keep his mandate on the Board of Management of Allianz Deutschland AG until his contract expires.
      • Jay Ralph, currently Chairman of Allianz Life Insurance Company of North America, will join the Board of Management on January 1, 2010 and at the same time take over responsibility for the NAFTA region from Clement Booth. Booth will continue to be in charge of reinsurance and the global corporate insurance business as well as insurance activities in the United Kingdom, Ireland and Australia, and will assume responsibility for credit insurance from Thierry at year-end.

      Enrico Cucchiani, presently in charge of the Europe I (Southern Europe) and South America division, will take over responsibility for Europe II (France, Benelux) and Africa from Thierry as of January 1, 2010.

      As with all content published on this site, these statements are subject to our Forward Looking Statement disclaimer, provided on the right.

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        On September 15, Allianz will launch an international campaign entitled “The Passion Behind Football”. The focus will be on FC Bayern München and the Allianz Arena.

        The heart of the campaign is a TV format that will offer viewers exclusive glimpses behind the scenes of professional soccer, and that will deal with people’s passion for their club. The films were shot at the Allianz Arena and other famed sites of international football.

        The first of a total of six successive episodes will be made available to international television broadcasters on September 15, and can also be viewed online on various platforms worldwide, including http://sponsoring.allianz.com. A companion infographic to the first episode will be available online as early as September 10, providing fans with exciting information about the Allianz Arena.

        “Without passion nothing can happen”

        “We want to make Allianz’s commitment to sports come alive for a broad target audience,” says Michael Maskus, head of Group Market Management at Allianz SE. “Our partnership with FC Bayern München and our Allianz Arena commitment offer a unique chance to give football fans all over the world a fascinating experience.” Football makes it especially clear how a crowd’s passion for an idea or a task can carry a team to success. From the club’s kit manager, to countless employees at the stadiums, to the fans and their favorite players: they all form a big community whose dedication and loyalty create a fun-filled and emotion-packed football experience.

        Says Uli Hoeness, manager of FC Bayern München: “We at FC Bayern München are very happy that Allianz – a partner of ours for many years – has decided to address a subject without which nothing can happen in sports, and especially in football – passion. For us the focus is on the people whose boundless personal commitment and enthusiasm have made FC Bayern what it is today. They and we are all linked together by a passion for football and for our club.”
        Authentic glimpses into the world of the German record champion

        In each episode, a member of the FC Bayern community leads through a particular topic, with authentic glimpses into the world of the German record champion, as well as many other top international clubs and temples of the sport.

        On September 15, everything will focus on the last few meters to the playing field. Player Mark van Bommel talks about players’ rituals in the tunnel and about his very personal experiences in the Allianz Arena, at Camp Nou, and at other international stations of his career.

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        Following changes within Groupama management announced on 2 September, Philippe Carraud, who is currently Managing Director of Groupama d’Oc, succeeds Christian Collin, appointed Chief Financial Officer at Groupama Group.

        From 1 January, Philippe Carraud will take up his functions as General Secretary – Strategy and HR in the Group. The Board of Directors of the Regional Mutuals of Groupama d’Oc will appoint his successor in the next few weeks.

        At the same time, Francis Thomine, Managing Director of IT Systems, will add to his field of responsibility the Logistics Management and Group Purchasing Department led by François Rajaud.

        • Philippe Carraud, 55, is a graduate of the Institut d’Etudes Politiques in Paris. He started his career at Assurances du Groupe de Paris (AGP) as fire, accident and risk insurance inspector in the south-west region of France and subsequently at head office as manager of the agency sales department. In 1985, he joined Groupama (Samda and then the “joint Group development department”) as marketing manager. Then, between 1990 and 1996, he had the role of general manager of the Mutualité de l’Ain (the “1945” heath/provident Mutual). In 1996, he joined the management of the Union des Caisses Centrales of the Mutualité Agricole (Groupama/Msa/Agrica), being in turn responsible for joint delegation in health policy and HR Management for the FNMA (Fédération Nationale de la Mutualité Agricole). In 1998, he was appointed Managing Director of Groupama Sud-Ouest. He then managed the regrouping of the Caisses Régionales (regional mutuals) of the south-west, Gers, Oc and Pays Verts, which were to form the new Groupama d’Oc mutual, of which he was appointed Managing Director in 2003.

        • Francis Thomine, 47, a computer engineer, began his career in teaching before joining IBM in 1988. In 1993 he joined Athéna Assurances where he in turn held responsibility for the individual data Infocentre, for distributed data production, and then for sales information systems. In 2000, he became Director of the GIE Generali Information Systems production centre. He joined Groupama in 2001, as Director of client relations and production at Groupama Information Systems. He was appointed Managing Director of Groupama Information Systems in 2006.

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        Interim Result Highlights for The Co-operative Financial Services (CFS) for the 28 weeks to 25 July 2009

        Following its merger with Britannia Building Society on 1 August 2009, The Co-operative Financial Services (CFS) is one of the largest and most diversified financial mutual businesses operating in both retail and corporate markets. The combination of the financial strength, customer focus and co-operative values, principles and ethics of the new organisation, will offer our members and customers a trusted and ethical alternative to shareholder-owned banks.

        CFS is part of The Co-operative Group, which is the UK’s largest mutual retailer with 4.5 million members, over £14 billion turnover, over 5,000 retail trading outlets and core business interests in food, financial services, travel, pharmacy and funeralcare.

        Highlights

        • Total shareholder profit before tax, FSCS levy, significant items and short-term investment fluctuations was £81.4m (2008: £73.4m) an increase of £8.0m (11%).
        • £14.6m profit from General Insurance (2008: £1.5m loss).
        • £41.7m profit from Banking activities (2008: £46.2m). Bank wholly funded by customer deposits.
        • General Insurance claims ratio reduced to 73.3% (2008: 74.0%).
        • Strong balance sheet growth achieved in both lending and deposit balances. 12% growth in customer lending, funded by strong growth in customer deposits (up 21%).
        • Strong liquidity and capital ratios with a capital ratio of 12.8% and core tier 1 ratio of 9.2%.
        • Merger between The Co-operative Financial Services and Britannia took place on 1 August 2009, resulting in one of the largest and most diversified financial mutual businesses, with over £70 billion in assets.
        • Winner of the prestigious 2009 Which? Award for Best Financial Services Provider.
        • Strong new business growth including; current accounts sales, which are 68% higher than in 2008, an 18% increase in annualised new premiums for life and savings, and general insurance sales, which increased by 27% over 2008.

        (Long-term business in Life and Savings is transacted on a mutual basis with all profits retained for the benefit of policyholders)

        General Insurance highlight

        The general insurance business achieved a significant improvement in the first half of 2009, delivering profits of £14.6m (2008: loss of £1.5m)

        Gross Written Premium has improved by £7.5m to £228.4m which has been predominantly driven by increasing sales volumes through both our online, telephone, broker and aggregator channels, further continuing the growth seen in 2007 and 2008.

        Retention rates have remained broadly stable despite the economic climate, which is a reflection of the loyalty of our customer base and success of new retention initiatives.  We have also seen an increase in new business income of 27%.

        The general insurance claims ratio was 73.3% (2008: 74%) and this has been achieved despite claims for the cold weather experienced earlier in the year and the growing trend for claims to settle on a periodical, rather than lump sum basis, which has become more attractive to claimants in the current interest rate environment. Overall costs remained broadly unchanged, despite increases in overall income, new business volumes and associated commissions.

        New business developments included the launch of market leading business insurance products, offering customers the chance to tailor policies to suit their needs. Other new developments included improvements to our web sales proposition and full ‘quote and close’ capabilities for our home insurance product provided in our bank branches.

        Customer satisfaction for general insurance also remains high, standing at 75.3% and we have widened the gap over the market average. This year we have won the Corporate Social Responsibility Award at the British Insurance Awards and also a Claims Platinum Award for the quality of our claims handling.

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        Fitch Ratings has today assigned Assicurazioni Generali SpA’s (Generali) EUR1,750m 5,125% senior unsecured notes an ‘A+’ rating.

        The notes will be issued by Generali under a EUR4bn Euro Medium Term Note (EMTN) programme renewed in April 2009. The proceeds will be used to refinance existing senior debt of EUR1,750m maturing on 20 July 2010. The tenor of the issue is 15 years.

        Fitch estimates that financial debt leverage for Generali will rise slightly in the near term, but this impact will reverse out when the July 2010 senior debt matures.

        Overall, Fitch regards the issue in a positive light, as it will remove the 2010 refinancing risk. Generali is rated Insurer Financial Strength ‘AA-‘ and has an Issuer Default Rating (IDR) of ‘A+’ with a Negative Outlook.

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        One in seven people have lied to their insurer in a bid to keep their premiums down, a survey showed today.

        Around 14% of people admitted they or their partner had deliberately submitted false details in order to get a cheaper quote, according to a car insurance company.

        The most common area in which people stretched the truth was claiming that their car was kept in a garage, when it was actually parked on the street, with 39% of people admitting to doing this.

        A further 35% of people lied about their annual mileage in a bid to keep their car insurance costs down, while 7% of people failed to disclose motoring convictions.

        One in 20 people also failed to mention modifications that had been made to their vehicle, such as spoilers or customised wheels.

        People were also dishonest when applying for home insurance, with 31% deliberately underestimating the value of their possessions, while 8% said they had a burglar alarm when they did not.

        Around 3% of all insurance applicants also failed to disclose a previous claim they had made on a policy.

        Men are more likely to lie on an insurance application form than women, with 17% of men admitting to being economical with the truth in a bid to cut their premiums, compared with only 11% of women.

        A spokesperson said: “We can appreciate the temptation to try a few shortcuts in order to get the best deal on insurance, but people may not realise the consequences of their actions.

        “Deliberately withholding information, or submitting inaccurate details, can render your insurance invalid.

        “So, saving a few pounds at the time of taking out a policy could cost thousands in the long run. If the misrepresentation is serious, you may also be prosecuted for insurance fraud.”

        People in Wales are most likely to be economical with the truth when applying for insurance cover at 21%, compared with only 10% of people in the East.

        YouGov questioned 4,135 people during July.

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        Fairfax Financial Holdings Limited (TSX and NYSE: FFH) confirms that it has received commitments to purchase all of the 2,881,844 subordinate voting shares offered on an agency basis in today’s previously announced equity offering. Together with the 600,000 subordinate voting shares agreed to be purchased by the syndicate of underwriters in the underwritten portion of the offering, Fairfax has received commitments for the purchase of $1 billion of subordinate voting shares. The offering is expected to close on or about September 11, 2009.

        Fairfax intends to use the net proceeds of the offering to fund the previously announced proposed acquisition of all of the outstanding shares of common stock of Odyssey Re Holdings Corp. that it does not currently own. There can be no assurance that such acquisition will be completed. If the acquisition is not successfully completed, Fairfax intends to use the net proceeds to augment its cash position, to incrOdyssey Re ease short term investments and marketable securities held at the holding company level, to retire outstanding debt and other corporate obligations from time to time, and for general corporate purposes.

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        Ongoing resilience in volatile market conditions Cash flow and capital position robust

        • Core capital and cash generation after tax of £167m (2008: £143m)
        • Financial Groups Directive surplus of £3.1bn (31 December 2008: £3.3bn)[1]
        • Interim dividend of 4.15p, representing 2.0% growth

        Net flows remains positive

        • Positive net flows of £2.1bn across the Group (2008: £3.3bn)
        • Life and pension PVNBP sales of £7.5bn (2008: £9.1bn)[2]

        Profits impacted by lower financial market levels

        • EEV operating profit before tax of £348m (2008: £534m)
        • IFRS loss after tax attributable to equity holders of £20m (2008: profit £161m)

        Strong progress made towards second phase efficiency target

        • On track to meet £75m annual efficiency savings target by the end of 2010 – £26m achieved to date

        Group Chief Executive Sir Sandy Crombie said:

        “The recession has had an inevitable impact on our performance in the first half of 2009.  However, today’s results highlight Standard Life’s robust business model and the ongoing resilience of our balance sheet.

        “I am particularly pleased with the continued strength of our UK group pensions offering and by Standard Life Investments, where we have achieved good worldwide third party investments net inflows, despite a backdrop of industry slowdown and continuing market volatility. In addition, I am encouraged by the progress that has been made in our Canadian retail product lines following the repositioning of the business.

        “We have announced healthy capital and cash generation and have made good progress towards our efficiency target.  We have maintained a strong capital position and this enables us to develop the business by investing in our key growth areas.

        “With our strong solvency position, proven capital-lite strategy and diversified business offering, I am confident that Standard Life is well positioned.”

        Unless otherwise stated, all comparisons are in Sterling and are with the six months ended 30 June 2008.

        UK financial services

        Within our UK life and pensions business we experienced net inflows of £135m (2008: £1,041m) and a 24% reduction in new business sales to £5.2bn (2008: £6.9bn).  These reductions reflect lower incoming transfer values into our pension product lines and our decision not to renew bulk investment bond deals as noted above. In addition, and as previously highlighted in our Q1 2009 Interim Management Statement, activity levels at the start of the year were temporarily impacted by the revaluation of the Pension Sterling Fund.

        We continue to see strong growth in our Individual SIPP customer base, the total number of accounts increasing by 13% to 74,700 during the period (31 December 2008: 65,900).  Lower net inflows of £959m (2008: £1,435m), and a 26% reduction in new business sales to £1,537m (2008: £2,074m) reflect the impact of market movements on average incoming transfer values, which continue to represent the majority of new business. SIPP assets under administration have increased by 12% to £9.7bn[5] (31 December 2008: £8.7bn). Across our SIPP portfolio the average case size was £130,000 (31 December 2008: £131,000).

        UK group pensions assets under administration have increased by 2% to £14.7bn (31 December 2008: £14.4bn)[6]. Lower net inflows of £671m (2008: £885m) and a 15% reduction in new business sales to £1,527m (2008: £1,803m) reflect lower asset values as well as reduced increment levels.  During the second quarter, regular premium new business benefited from contributions received in respect of the BT scheme (£347m PVNBP), the largest contract based defined contribution scheme to tender in Europe, which was highlighted in our Q4 2008 Interim Management Statement. We expect to receive single premium transfer amounts relating to this scheme later in the year.  Group SIPP volumes increased by 61% and accounted for 54% of total group pensions sales (2008: 28%).  While market conditions remain challenging, the quality and flexibility of our evolving and award winning proposition to the corporate market, combined with the financial strength of the Group, continue to act as key differentiators and enable us to win new business in our chosen markets.  The number of new schemes won during the first half of 2009 was 216 (2008: 248), our pipeline is good and current levels of tender activity remain strong.

        As disclosed in our Q1 2009 Interim Management Statement, our decision not to renew bulk deals with large institutional distributors at lower margins has had a material impact on investment bond sales of £154m (2008: £1,025m) and net outflows of £825m (2008: net inflow £273m).  Excluding these bulk deals, investment bond sales were £417m in the first half of 2008, with adjusted net outflows reducing from £325m in 2008 to £272m in 2009.  Mutual funds sold on our Wrap, Sigma and Fundzone platforms continue to perform well, increasing by 49% to £542m (2008: £364m) with net inflows increasing to £336m (2008: £160m).

        Assets under administration on our Wrap platform increased by 35% to £2.3bn (31 December 2008: £1.7bn)[7]. At 30 June 2009 there were 484 IFA firms using the platform (31 December 2008: 409 firms) and 23,000 customers (31 December 2008: 16,900 customers) with an average fund size of £101,000 (31 December 2008: £101,000).  We continue to see strong momentum in our Wrap offering, with a strong pipeline of IFA firms in the process of adopting the platform.

        A number of endowment policies that were written during the early 1980s reached maturity during the first half of the year.  This has led to a net outflow of £761m (2008: net outflow £785m) in respect of pre-demutualisation life products.  While we expect this trend to continue in the short term, the vast majority of these products are conventional with profits contracts, which generate minimal shareholder margin.

        Claims levels across our UK life and pensions operations remain broadly in line with assumptions, with reduced claims in respect of individual pensions leading to a reduced net outflow from this product line.

        Savings balances in our banking operations have increased to £5.5bn (31 December 2008: £5.0bn).  This total includes combined SIPP and Wrap balances of £1.8bn (31 December 2008: £1.5bn).  Savings inflows were experienced across the product range, with ISAs and business accounts performing well during the first half of 2009.

        Consistent with our strategy to manage our mortgage exposure during the ongoing period of difficult credit market conditions, gross mortgage lending decreased by 80% to £143m (2008: £728m).  Mortgages under management stood at £8.8bn (31 December 2008: £9.7bn), with an arrears rate of 0.68%, which is approximately a quarter of the Council of Mortgage Lenders industry average of 2.61% reported at 31 March 2009.  The average indexed loan to value ratio increased slightly to 48% (31 December 2008: 46%).

        Healthcare sales were 29% lower at £10m (2008: £14m) on an APE basis.

        The full report is available here

        Notes to Editors:

        1 Financial Groups Directive surplus at 31 December 2008 has been adjusted for the payment of the final dividend.

        2 Present value of new business premiums (PVNBP) is calculated as 100% of single premiums plus the expected present value of new regular premiums.

        3 Life and pensions net flows represent gross inflows less redemptions.  Gross inflows are premiums and deposits recognised in the period on a regulatory basis (excluding any switches between funds).  Redemptions are claims and annuity payments (excluding any reinsurance transactions and switches between funds).

        Worldwide life and pensions net flows do not include net flows in respect of our Asia life and pensions joint ventures and our Hong Kong subsidiary.

        4 Certain items are included in both life and pensions and investment flows.  Therefore, at Group level, an elimination adjustment is required to remove any duplication.

        5 Analysis of Individual SIPP assets under administration.

        6 The Group pensions AUA figure as at 31 December 2008 has been restated to align with the methodology used for other product lines.

        7 Wrap assets under administration have been restated to exclude amounts that have been secured but are pending investment onto the Wrap platform.  The impact of this restatement has been immaterial, reducing the assets under administration figures as at 31 December 2008 and 30 June 2009 by £0.1bn.

        8 Offshore bond inflows of £77m (2008: £265m) and sales of £173m (2008: £270m) are now included within the European results rather than the UK.

        9 H1 2008 PVNBP includes a restatement to opening assumptions in India.  The impact is to reduce H1 2008 PVNBP by £53m.

        10 Excludes development costs directly related to back book management initiatives.

        11 The only difference between IFRS normalised underlying profit and IFRS underlying profit for non-covered business arises within global investment management. Net negative fair value movements in respect of the liability remaining following the restructuring of a sub-fund of Standard Life Investments (Global Liquidity Funds) plc and the ‘Contract for Differences’ written in September 2008 which limited this liability for Standard Life Investments and fair value movements of the corresponding assets which were brought directly on to the balance sheet, are included within IFRS underlying profit, but are excluded from IFRS normalised underlying profit.

        12 Excludes specific costs attributable to back book management.

        13 The Interim Results 2009 are available on the Financial Results page of this website.

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        Large corporates need to shift their global insurance buying patterns back to focusing on local policies. Aon Global UK’s technical director Richard Mortlock, speaking to risk managers this morning at an Aon, Airmic & Allianz global programmes seminar, warned that placing too much emphasis on the broad coverage in the master policy could be detrimental by leading to less compliant policies and overall higher tax burdens.

        Risk managers need to consider building programmes upwards from local policies, reversing the current market model of beginning with the master layer. In other words, the local policy must be designed to pay the claim, rather than putting heavy reliance on the master policy.

        Global programmes should be supported by:

        • preferred reinsurance structures to remove problems of co-insurance
        • strong overseas networks of brokers and insurers
        • supplementary documentation for the company, insurer and broker outlining the detail that an insurance policy does not or cannot express
        • compliance products and tools.

        Richard commented: “Cross territory teamwork and incorporation of solutions to local concerns will be the next big event in the evolution of compliant global programmes – even though purchasing strategies need to be centrally coordinated. It may lead to additional technical analysis and administration but cuts down on non-compliant behaviour and the risk of your policy not delivering. Confidence in a global insurance programme can be enhanced by a strategic choice of programme and stand alone local policies.”

        Worst case scenario
        A factory burns down as a result of a nearby earthquake. The local policy has minimal coverage and excludes high level catastrophe related claims. The company looks to the master policy but different interpretation of wordings between local policy and master policy mean the excess master claim may not be paid. Added to this, if the event has happened in a country with a protectionist approach, regulators may impose penalties for having a non-admitted insurance or there may even be problems of the flow of capital into the country to help rebuild the factory.

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