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Thomas Hickey

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Lloyds Banking Group (LBG) will have their CEO back next year, after Antonio Horta-Osorio announced he was fit to return to work.

Mr Horta-Osorio temporarily stood down in September because he was suffering from ‘fatigue’. Lloyds CFO Tim Tookey took up the interim role of chief executive but he is due to leave the company after Mr Horta-Osorio’s return next year.

“Following due consideration the board has decided [Mr Horta-Osorio] will return to the bank as group chief executive on 9 January 2012,” the bank said in a statement.

The LBG board has completed a rigorous process, including obtaining independent medical advice, to assess Antonio’s ability to return and effectively lead the group.

“The independent medical advice has concluded that he has made a full recovery,” they said.

LBG, which is 40.2 per cent state-owned after a huge bailout at the height of the global financial crisis, has slashed more than 40,000 posts since 2009 as it looks to nurse its way back to health after its part-nationalisation.

The lender, which was sunk by the ill-fated 2008 takeover of rival bank HBOS, is also seeking to cut its international presence to just 15 countries by 2014.

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The Office of Fair Trading (OFT) has today launched a market study into the private motor insurance industry to “find out the reasons behind recent reported increases in private motor insurance premiums”.

The OFT reports that premium prices rose by a per cent every month between 2009 and September 2011, and because of this and other factors they have “reasonable grounds for suspecting that there are features of the UK’s private motor insurance market that restrict and distort competition.”

Sonya Branch OFT Senior Director of Services, said, “Our concerns relate to the provision of third party vehicle repairs and credit hire replacement vehicles to claimants, where we suspect companies may be competing to extract money from each other rather than keeping premiums as low as possible and providing car owners with value for money.

“By carrying out a market study, we aim to clarify whether a market investigation reference to the Competition Commission is appropriate.”

It reported the two main findings so far are that:

– private motor insurers responsible for meeting third party claims for credit hire replacement vehicles and/or vehicle repairs appear to have only limited control over the choice of provider and appear to find it difficult to assess the extent to which the costs claimed are reasonable, and

– rival private motor insurers, brokers and credit hire providers may therefore have the opportunity, and the incentive, to carry out practices which allow them to generate revenues through referral fees, while simultaneously inflating the costs that the third party insurer has to meet. This in turn may contribute to car owners having to pay higher premiums.

As part of the OFT investigation, they called on the Financial Services Authority to work with private motor insurers to ensure the product they are selling is fully understood by consumers.

The OFT expects to complete the study by Spring 2012.

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China Life had a turbulent debut on the Hong Kong stock exchange, trading near the bottom of its market price range and finishing 10 per cent below its initial public offering (IPO).

The stock opened yesterday at HK25.95 (GBP2.15), down 9 per cent from its IPO of HK28.5 (GBP2.36), and finished they day at HK25.65 (GBO2.13).

New China Life raised around GBP1.3 billion after listing on both the Honk Kong and Singapore stock exchanges last week. The insurer is set to debut in Singapore tomorrow and analysts are predicting a better performance than today.

The weak debut comes amid turmoil on the global stock markets, with traders anxious over the US economy and unconvinced by attempts to mitigate Europe’s sovereign debt crisis.

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The husband of a woman found dead in a lake in France will profit from her life insurance if found innocent, a French court heard yesterday.

Robert Lund, 57, is on trial in Southern France for the third time having appealed his 2007 conviction of involuntary manslaughter.

Lund reported his 52-year-old wife Evelyn missing on New Year’s Day 2000, telling investigators he believed she had an accident after drinking heavily and setting off to visit friends in the picturesque rural Tarn region.

Her body was found in her car in nearby Lake Bancalie two years later when a drought lowered the water level. Lund was arrested and later sentenced to 12 years in jail. He lost his first appeal but is now trying again.

Since the beginning Lund has denied any wrongdoing and pleaded innocent.

The main trouble prosecutors were having was finding a motive for the killing, so the potential life insurance profits may prove pivotal in the case.

In 1996 Evelyn changed her life insurance policy to make Lund, her second husband, the sole beneficiary.

In a call taped by investigators between Lund and his brother, Lund allegedly said he was pushing hard for acquittal because “that’s the only way… to get the life insurance and inheritance.”

The case continues.

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German insurance company Talanx and Japanese Meiji Yasuda partnered on Monday to buy Polish company Europa for 912 million Polish zloyts (GBP169 million pounds), the Financial Times reported.

Europa, previously owned by local billionaire Leszek Czarnecki, saw share prices jump 20.8 per cent on the Warsaw stock exchange in response to the announcement.

The final breakdown of ownership after the deal, which is expected to take four months to close, will see Talanx holding 50 per cent, Meiji with 34 per cent and Mr Czarnecki’s Getin Holding financial group keeping the remaining 16 per cent, the Times said.

“The redistribution of wealth happens in times of crisis,” says Torsten Leue, Talanx’s chief executive, speaking in the offices of Getin Holding. “It is very unpredictable over the next six months… but over the longer term Poland is on a growth trend which cannot be stopped.”

“This is the best time for investing, not consuming,” he says.

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Macedonian police on Wednesday detained 57 people, including 17 police officiers, for involvement in traffic accident insurance fraud totalling almost EUR15 million (GBP13 million).

During the investigation, launched in 2007, police examined more than 15,000 traffic accidents and established that dozens were fake claims made to cheat money out of insurance companies, officials said.

Interior Minister Gordana Jankulovska told the media that the suspects had provided already smashed-up vehicles to the scene of the ‘accident’, made fake records and even issued medical documents on non-existent injuries.

The police investigation continues.

AFP

 

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Insurance Australia Group (IAG) is considering buying a stake in the general insurance unit of Malaysia’s Kurnia Asia, the Star newspaper reported today.

According to the reports, Kurnia Asia will likely announce the deal at the end of this week and use the sale of Kurnia Insurans to venture into a new business or acquire assets.

The paper said the size of the deal would be around 1.8-2.2 billion ringgit (GBP360 – 443 million) if Kurnia also sold its general insurance arm at around 2.5 to 3 times the value of the company.

The size of IAG’s stake was not commented on, but foreign ownership of local insurers in Malaysia is capped at 70 per cent.

IAG has built up a strong presence in Malaysia and Thailand and has been looking to expand it’s business presence in the rest of Asia. The company’s chief executive, Mike Wilkins, wants to double the gross written premium contribution from Asia to 10 percent by 2016.

SMH

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Italian insurance giants Generali and Fondiaria-SAI are among the latest insures to be downgraded by Fitch, after ‘stress tests’ in Italy and Spain, the ratings company said last night.

Generali’s rating was downgraded from AA- to A- with a negative outlook, and Fondiaria-SAI moved from BB+ to BB- because the companies were being affected by “ongoing pressures” from the debt crisis in Italy and Spain, Fitch said. Mutua was also downgraded from BBB+ to BBB, and Maprfe was affirmed at A-.

The ratings company warned the insurers of challenging investment conditions and fundamental uncertainties regarding sovereign debt, and added, “The ratings actions consequently reflect the degree of sensitivity of the insurers’ capital adequacy to stress test assumptions over the credit quality of their holdings of Italian and Spanish government and bank debt,”

It had been no secret that Generali had been suffering from the depreciation of its Greek bonds and market turbulence. The insurer reported a quarterly profit of EUR19.5 million, just 4 per cent of its profit for the same quarter last year (EUR439.8 million).

Fitch finished by adding the ratings may rise if the the debt situation “improves and stabilises”.

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The entire Board of Directors at Swinton Group Limited has been sacked for putting “their short term interests ahead of the long term interests of the company and its employees.” The decision was made by the board at Swinton’s parent company, Covea.

Covea said in a statement that it had lost confidence in the executive board, and that a key factor in the decision was the executive board’s performance-related share scheme payments, due to have been made in the first quarter of 2012.

They said that as the shareholder, Covea had a “responsibility to protect Swinton and to take appropriate action where it identifies any circumstances not beneficial to the business as a whole.”

The new executive board consists of Christophe Bardet as CEO, Charles Bellringer as Financial Director, Rob Hornby as IT Director and Kelly Ogley who will be appointed Operations Director as previously planned.

In his first public statement as Swinton CEO, Bardet said, “We are committed to ensuring that this course of action has minimal impact on our staff, customers and insurers. There will be no change to our values, products, business model and distribution, as Swinton remains a healthy and profitable company.”

The changes are effective immediately.

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UK pet owners are endangering their animals by giving them human medication before taking them to a vet, new research by Sainsbury’s has revealed.

The research interviewed 50 veterinarians and found that 65 per cent had seen an increase in the amount of pets being administered after taking over the counter and prescription medicine.

One surgery reported it was receiving two or three calls a day from worried pet owners, whose animals had reacted badly to medication such as paracetamol, which can cause irreversible liver or kidney problems.

Some hyperactive pets had been given anti-depressants to calm them down causing vomiting and lethargy and even violent tremors and seizures in some cases. The research also revealed that Ibuprofen had been given to some pets, which can cause serious ulcers and kidney problems.

The finding come after a gocompare.com study revealed that less than half of Brits actually insure their pets.

“Vet fees are on the increase and the thought of paying a consultation fee for a visit to the vet in addition to any treatment required could be a daunting prospect, especially if your cat or dog seems like it could be easily treated with some over the counter, household medication.” said Helen Williams, Head of Sainsbury’s Pet Insurance.

“We would urge pet owners not to take any risks with their pet’s health and to consider pet insurance which will cover the cost of the expert care your pet needs.”

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Defendant insurance law firm, Plexus Law, has announced the hiring of two new employees in its Reinsurance and Specialty Group.

Ken Silk and Graham Brow have both moved to Plexus Law from legacy law firm Davis Arnold.

Mr. Silk specialises in the areas of marine, aviation, transport and specie claims advising on both reinsurance and insurance matters and Mr. Brown is a reinsurance and coverage specialist with over 25 years experience in the industry.

“In Ken and Graham we have two very experienced and well-respected lawyers who have added to the depth of capability and knowledge we can offer clients,” said Darren Hanison, head of the Reinsurance and Specialty Group.

Ken Silk regularly defends assureds as well as bringing recovery actions. He is currently advising on a substantial South American CIT claim and major loss of aircraft following a fire at a European airport. He has advised on various other substantial MAT and Specie claims and has advised on coverage. He joins Plexus Law as a Senior Associate.

Graham Brown has extensive experience of advising on claims involving property, personal accident and liability, contingency risks, as well as E&O and all forms of reinsurance. He has been involved in advising on key disputes such as LMX PA spiral, Polly Peck, Pacific & General v Baltica and a number of Lloyd’s managing / members agents disputes. He joins Plexus Law as an Associate Partner.

“As a Group we now have a compelling range of services to offer the reinsurance market,” said Tim Oliver, Senior Partner at Plexus Law. “The specialist appointments we have made on the legal side complement the reinsurance expertise we possess across the group, enabling us to offer a fully rounded and complete service to our clients.”

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 The British government has said that it is “disappointed” with new EU gender equality laws, because of the effects they will have on insurance prices.

The law, to be implemented in December next year, will make it illegal to use gender as a factor in assessing the price of premium for a customer. It will only effect contracts made after 21 December 2012. Any policies made before this will remain the same, even if they used gender as a factor.

Industry has been asked for their opinion and respondents will have until February 29 to make their views known.

“We believe the judgment will have unintended and unpredictable consequences beyond simply achieving gender-neutral pricing – including for women and vulnerable groups who can least afford it, such as the elderly,” the Treasury said.

“We believe that the ability of insurers to price on the basis of [gender based] risk is integral to their need to conduct business efficiently. Due to the nature of the ruling, however, there is no right of appeal against the outcome. The only option available is to implement the ruling, in this case by secondary legislation, which is likely to be made in the spring of 2012,” it said.

The government estimated that the ‘net’ cost of the new law on motorists alone would be GBP300 million.

“Gender is one of the most important risk indicators that an insurer can use to price a number of business lines,” the Treasury said. “If insurers were unable to take gender into account when assessing the risk that they are covering, insurers are likely to have to average prices between high and low-risk individuals in those lines where gender in a risk factor. In such a scenario, a policy at an average price would be more attractive to higher risk individuals, as the policy would not be priced according to their risk.”

A copy of the full treasury response to the law is available at the treasury website.

Graph illustrating average claims cost for motor insurance acording to age and gender (ABI Research Paper No 24, 200 – The Use of Gender in Insurance Pricing)

 

Graph illustrating the percentage change in average premium for motor insurance according to age and gender, following the removal of gender as a risk factor in the pricing of individual policies (ABI Research Paper No 24, 2010 – The use of gender in insurance pricing)

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Malaysia’s insurance sector is ‘stable’ because of sound operating profitability, steady market growth, and manageable exposure to investment risks, a new Fitch Ratings report has said.

The agency expect the industry to continue performing. Fitch believe that growth of the Malaysian insurance market will be driven by various government measures, a low penetration rate and wider product reach.

While the ratings agency sees the Malaysian insurance sector as stable, it warned that current market volatility has the potential to effect this.

The report also said that the “…formation of larger insurance conglomerates along with increased foreign ownership will likely intensify market competition.”

Terrence Wong, Director in Fitche’s Insurance team, said that Bank Negara Malaysia’s premium change plan would not have  a drastic effect on the industry as a whole.

“Bank Negara Malaysia’s plan to make gradual premium adjustments in motor cover will likely mitigate underwriting losses. However, given the modest premium change, Fitch believes its impact on general insurers’ underwriting profitability will be minimal in 2012,” he said.

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Admiral is considering branching into the legal industry as a response to the Ministry of Justice’s plan to ban referral fees, the Telegraph has reported.

The loss of income when the ban comes into place is expected to be millions of pounds per year. To combat this the insurer plans to either set up it’s own personal injury law firm or become a majority backer in an existing firm, according to the paper.

The Ministry of Justice said it would abolish referral fees (the fee a law firm pays to an insurer for information on a potential personal injury claimant) because they are inflating the price of car insurance.

While they declined to comment today, the insurer said in September, “Admiral does not sell customer data; if one of our policyholders has a non-fault accident, suffers a bodily injury and they require assistance, we will put them in touch with a personal injury lawyer.”

Admiral would not be the first insurance company to enter the law business, with Axa Insurance owning Knight Legal Services.

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When you hear the word ‘insurance’ what comes to mind? Car insurance? Home and contents cover? Life insurance? All very sensible policies to take out, but a rather boring subject.

Well insurance doesn’t always have to be sensible, and it’s definitely not always boring. On top of the standard insurance policies that everyone takes out there are plenty more, slightly more bizarre policies available.

Here are a few insurance policies available that you may, or may not have heard of:

Body Part Coverage.

If you rely on a specific part of your body to earn a living, it’s insurable – and doing so is much more popular than you may think. We’ve all heard the rumors about celebrities insuring their legs, smiles, bums and boobs, but the list doesn’t stop there.

Merv Hughes, a famous Australian cricket player, allegedly insured his mo for over AUD300,000.

Rumor has it in 1957, food critic Egon Ronay insured his taste buds for USD400,000.

And in the 1980’s Bruce Springsteen apparently took out a USD6 million policy on his voice.

Financial edge http://financialedge.investopedia.com/financial-edge/0210/5-Bizarre-Insurance-Policies.aspx#axzz1gJWJvib9

Hole-In-One Coverage.

Golf competitions often offer huge prizes for a golfer to hit a hole in one, so what would happen there was more than one hole-in-one in a single day? Lloyd’s has a surprisingly popular deal for this, and sells policies to competitions holders for up to USD50,000

http://www.telegraph.co.uk/finance/personalfinance/insurance/specialrisks/4962817/Costa-Coffee-taster-Ten-of-the-weirdest-insurance-policies.html

Goodfellow Rebecca Ingram Pearson Insurers

We thought that this company deserved a point all to itself. Goodfellow Rebecca Ingram Pearson is a company that specialises in policies such as alien abduction and immaculate conception, so if you are continually looking over your shoulder worried about Martin the Martian why not get piece of mind and take out a policy just in case. The company has around 4,000 alien abduction clients worldwide, and several hundred virgins have taken out policies for immaculate conception. While the company said they haven’t yet seen a legitimate claim for an abduction, they couldn’t say the same for immaculate conception.

http://www.independent.co.uk/news/cult-insured-against-aliens-1276075.html?CMP=ILC-refresh

‘Taco Bell’ policy

In 2001 Taco Bell held a promotion where if a part of a falling space station hit a designated target they would give everyone in America (almost 313 million people) a free taco. They took out an insurance policy to cover the cost if it actually worked.

http://www.spaceref.com/news/viewpr.html?pid=4152

Twins Insurance

If you are expecting and you don’t think you can handle twins, twin insurance is for you. While they wont go as far as taking one of them back, ‘twin insurance’ will cover the addition costs that having two kids instead of one incurrs.

While these are just a few examples, the list of crazy policies goes on. The chances are if you can think of a risk you can take out insurance for it, so insurance isn’t always sensible, and it’s definitely not (always) boring.

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After winds of up to 165MPH lashed Scotland and Northern England over the weekend, insurers are preparing for the inevitable stampede of claims.

PWC said an estimate of the precise cost of the storm was going to be difficult, as they are expecting a large value of low value claims. The main claims to come out of the storms are expected to be from damaged roofs and tree damage.

“It is hard to put a value on the potential cost of the damage as there have been few recent storm losses in Scotland to benchmark against. However … the insurance industry should step in to take most losses to household policies,” said Mohammad Khan, Insurance Partner at PWC.

PWC estimated that the cost of the storms on the economy as a whole could be as much as GBP100 million due to daily productivity loss. But strangely, this rarely effects GDP, as the losses incurred are normally made back through other means. For example according to PWC in 1962 – the coldest winter on record – manufacturing output fell 7 per cent in Feburary, but there was actually no negative impact on GDP because consumers and industry spent much more on heating.

But not all businesses will make back the money they lose as a result of the storms. Industries such as retail and hospitality may see drastic losses while customers stay at home because of storms, during what is normally the most profitable time of the year for them.

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After almost 30 years with the company, Swiss Re’s CEO will step down next year.

Stefan Lippe joined Baverian Re (which later merged with Swiss Re) in 1983 on a business analysis project. From there he spent 26 years with the company before becoming CEO in 2009.

“In the course of my career at Swiss Re, the company has offered me a series of exciting opportunities. Three years ago I took on the challenge of leading the company through turbulent times as CEO. Today we can say proudly that we have delivered on all of the ambitious targets that we set out at that time,” Lippe said.

“Now that the turnaround has been achieved, a new era begins for Swiss Re with a new corporate structure and refined strategy. This was the right moment for me to choose to inform the Board about my intention to retire early. This lead time should be sufficient to allow for a smooth transition.”

A successor is expected to be appointed soon. Swiss Re provided no details of what Lippe plans to do next.

Walter Kielholz, Chairman of the Board of Directors, said, “The Board of Directors very much regrets Stefan Lippe’s decision to retire early after almost three decades at Swiss Re. Since becoming CEO in 2009, he has led Swiss Re through challenging times, during which we were able to turn around the company”

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Standard and Poor’s have lowered their rating for Czech insurer CSOB. The previous insurer financial strength (IFS) rating of ‘A-‘ was revised and taken down one notch to ‘BBB+’.

The rating comes the day after Standard and Poor’s lowered their rating for the owner of CSOB, KBC Bank. Standard and Poor’s said that the strong strategic relationship between the banks was the reason that they were both downgraded in such quick succession.

“In our view, CSOP is strategically important to its parent KBC Insurance. Under our group rating methodology, we cap the rating on strategically important entities at one notch below the rating on the parent. Therefore, we lowered [CSOB’s rating] one notch,” the agency said in their press release.

Despite the downgrade, Standard and Poor’s said CSOB, the fourth largest insurer in the Czech Republic, “continues to reflect strong capitalisation, investments and liquidity,” despite a highly competitive Czech insurance/banking market.

Standard and Poor’s finished by saying that CSOB remains an important asset for its parent company, KBC, and that they would be likely to follow suit if the KBC rating changed again.

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With Christmas just around the corner, it is a safe bet to assume that most houses have presents under the bed or in the wardrobe, hidden safe from excited kids.

But are they really safe?

While this is the time of year for stocking up on presents it is also the time of the year with an exceptionally high crime rate. Last year around 70,000  houses (ABI, 2011) were broken into in the run up to Christmas, so it is important to take some precautions for the festive season.

Aside from barring your windows, there are other things you can do to protect your presents. First of all, make sure you let your insurer know if you have any gifts worth over GBP1,000 in the house, as it can be a pain claiming on expenses like this if your insurer isn’t aware of the item.

Another tip is to pay for your gifts with bank cards. While it is possible to pay by cash and keep a paper receipt as proof of purchase of a gift, it is often good to have the bank record of the transaction available as well. If you do pay by cash, make sure keep your receipt in a safe place because without it you will have a very hard time persuading an insurer to cover anything.

There are also a number of things you can do to make sure nothing goes missing in the first place. Here are a few:

– Don’t leave presents where they can easily be seen from outside. This counts for in the car as well. Try to leave your gifts in the cupboard or the boot of your car.

– Always park in a well lit area when shopping.

– If you leave the house for a few days let your neighbour know that you wont be around.

– If you are out of the house, leave the lights on or set them on timers so that it looks like you are home.

– When unloading items from you car, don’t leave the door open when you are taking a load inside. Many thefts, even car thefts, happen this way.

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Ecclesiastical has become the first UK insurer to be awarded the new Quality in Credit Management (QICM) accreditation from the Institute of Credit Management.

A range of factors were considered in the judging such as credit risk policy, customer services, and compliance, and Ecclesiastical achieved the required standard in all areas.

The award, launched in 2009, recognises “best practices” in credit management and has been presented to companies such as HSBC, Invoice Finance and Shell International.

Paul Brooker, Ecclesiastical’s group credit risk manager, said: “This is a fantastic achievement for the team as it demonstrates our pursuit of operational excellence to help deliver strong financial performance and customer service

“Embedding the credit risk policy required increased collaboration between Group Credit Risk Management and commercial areas. This has helped produce credit management results of which we all can be proud”.

The Chief Executive of the Institute of Credit Management, Philip King, will present Ecclesiastical with the award early next year. “QICM is now widely recognised as the benchmark for excellence,” he said, “and the Ecclesiastical team has set the standard for the insurance industry.”

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