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Bank of China Hong Kong is the local unit of the mainland Chinese lender Bank of China, which has announced the possibility to issue up to USD 15 billion worth of bonds. These will be available to professional and institutional investors over the next 12 months as part of a note issuing program.

The blue-chip bank said the bonds sold under the program may be denominated in any currency, and noted it has hired BOC International, Citigroup, and Deutsche Bank as joint arrangers for the bond issues.
“BOCHK considers that the (program) as a platform will enable it to achieve greater flexibility and diversity in asset and liability management from a medium to long-term perspective,” the bank said in a statement to the Hong Kong stock exchange.
It said it intends to use the net proceeds from each issue of the bonds for general corporate purposes.

 Hong Kong, September 3, 2011, (Dow Jones)

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As the Friends Life t20 reaches a climax this weekend, all attention is on who will win the coveted trophy for 2011.

It has been an exciting competition and this weekend will see last year’s finalists Hampshire and Somerset pitted against each other, while Leicestershire face Lancashire, who made it to finals day by beating Sussex by 20 runs last week.

However the Friends Life t20 trophy is not all that is at stake, as this month they asked how each of the finals day counties would fare in an “alternative” county competition, testing financial prudence and independence. Residents from Lancashire, Hampshire, Leicestershire and Somerset were asked about their personal finances, and the results revealed some interesting truths about the nation’s attitudes.

Lancashire were bowled out in the Friends Life competition with regard to savings, with over a quarter of those asked in the county (29%) admitting that they never put money aside. This was in sharp contrast to the other counties, including Leicestershire, where only 18% of people admitted this.

Similarly, a staggering three-quarters (76%) of Lancashire residents were found to have not started saving for a pension – a much greater proportion than people from the three other competing counties (59%).

The Friends Life survey also revealed that Lancashire did not fare well when it came to other forms of protection, with almost two-thirds (64%) of those surveyed having no life insurance, compared to just 45% of those in the other areas.

When combined, these statistics paints a worrying picture for residents in the North West, who are already struggling with increasing levels of unemployment since the recession.

Although Hampshire may have smashed it for six in terms of savings, they didn’t fare so well when it came to other protection, with 41% saying that they had not taken out life insurance.

Karen Burrell, head of marketing services, Friends Life, said:

“Although times are hard for many at the moment, making sure that we have the appropriate cover in place is vital to ensuring that those closest to us are protected. These findings reveal a gap in certain regions that is worrying. Taking control of our finances now will mean we will be protected further down the line, despite current economic uncertainties.”

Overall, the survey revealed a growing number of financially savvy investors as well as exposing some real gaps in cover. Region by region, Somerset arguably exhibited the most financial independence with an average of 13% of income being put away in savings each month. Hampshire lagged behind in terms of financial autonomy, with just 9% of income being invested in saving for the future.

Source : Standard Life

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http://MedicareAgentTraining.com
Interview by Christopher Westfall with one of his agents on going door to door for life insurance sales. . Going door to door for final expense is tough. Yes, it works, but there is a MUCH easier way to sell insurance.

How to sell insurance door to door.

source

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In Britain, GBP 468 million worth of gadgets have been thrown in the bin in the past five years according to swiftcover.com.

Research of more than 2,000 UK adults revealed that more than 300 million gadgets – an average of six per person – worth £15bn, have been bought in the past five years; while a third (36 per cent) of Brits have bought six or more gadgets in this time. Furthermore, 1.6 million Brits have bought more than 21 gadgets since 2006, spending at least £1.5bn in the process.

With gadgets being updated so frequently – in some cases every six months, they are quickly superseded by new models. So much so that a third (35 per cent) of all gadgets bought in the past five years are no longer in use by the original owner, while 27 per cent of people use less than half of their purchases.

James Barclay, home insurance manager at swiftcover.com, said: “We’re most definitely a gadget nation and our thirst for the newest and the best is growing rapidly, apparently regardless of any financial restraints we currently have.”

Of those now not used, the location of 60 per cent of gadgets isn’t known by their owners. Furthermore, according to swiftcover.com 9.3 million gadgets worth at least £500 million have been discarded and thrown in the bin. Interestingly, recycling (19 per cent) or giving the gadget to friends or family (21 per cent) is common for gadget loving Brits while 16 per cent have resold their item to recoup costs or enable the purchase of new gizmos.

The research also highlighted differences between men and women: while 40 per cent of women choose to recycle or hand-down gadgets to friends or family, a third (31 per cent) of men preferred to sell or discard their unwanted gadgets.

Barclay continued: “The lifespan of a gadget is getting shorter and shorter as they are being replaced by more up to date and in many cases, more expensive models. Having the right insurance in place is essential otherwise the risk of losing thousands of pounds worth of gadgets and their content is very real.”

A third (29 per cent) of those who’d bought gadgets in the past five years assumed that their contents insurance covered all of their gadgets. More concerning was that 36 per cent of those surveyed said that they ‘hadn’t insured any gadgets’.

The research was commissioned for swiftcover.com’s home insurance product, which includes £500 cover for digital assets such as MP3s or films stored on a computer or digital media player, alongside competitive cover for gadgets and home entertainment systems.

Source : swiftcover.com

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More than half of Americans aged 12 and up drink alcohol, a quarter binge-drank in the past month, and one in 14 teens has used marijuana, a US government agency says in a report on substance abuse.   

Around 52 per cent of 137,436 Americans interviewed in 2008 and 2009 said they had a tipple in the past month, the report released late last month by the Substance Abuse and Mental Health Services Administration (SAMHSA) says.

Drinking was most prevalent among 18-25 year olds, with the northeastern state of New Hampshire leading the charge: three-quarters of young adults in the state said they’d used alcohol in the past month, the report says.

The legal drinking age in all 50 states is 21, although exceptions in many states allow under-age drinking in certain circumstances, such as in private premises with parental consent.

SAMHSA also found that almost a quarter (23.5 per cent) of Americans binge-drank in the past month — defined as having four or more drinks for women or girls and five or more for men or boys.

In North Dakota, nearly one in three residents binge-drank, the highest rate in the United States.

The number of Americans who used marijuana in the past month was also up for the period covered by the report: 6.4 per cent of Americans aged 12 and older said they had used marijuana in the past month compared to six per cent in 2007-2008, the report says.

In the 12 to 17 year age group, marijuana use fell, but seven per cent of US teens still use cannabis, the report said.

The 10 states that saw the highest use of marijuana were Alaska, Colorado, the District of Columbia, Hawaii, Maine, Massachusetts, New Hampshire, Oregon, Rhode Island, and Vermont.

Medical marijuana is legal in all of those states except for Massachusetts and New Hampshire. The report is based on the 2008 and 2009 National Surveys on Drug Use and Health (NSDUHs).

Washington, A August 2011 (AFP)

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Aviva research shows adviser confidence is growing. It shows fewer advisers say they will leave the industry, due to forthcoming market changes including the retail distribution review (RDR) and capital adequacy, than at any time over the last two-and-a-half years. Just 7% now plan to stop trading, compared to 10% in December 2010 and 36% in January 2009.

Aviva’s research also shows that advisory firms are making good progress getting their businesses ready for RDR. More than two-thirds of advisers (69%) are changing their business models, with three-quarters (74%) introducing different service levels for different types of client.

More firms (71%) plan to offer independent advice, up from 65% in December 2010, with fewer firms planning to offer restricted advice or a multi-advice model.

As more advisers work towards their qualifications, the focus of their concerns is shifting towards the financial reality of running a business post-RDR. Qualifications are now less of a concern (39%) than worries about remaining profitable (47%), adopting adviser charging (44%) and applying VAT to the new charging model (40%).

Dean Lamble, director of distribution development at Aviva said: “It’s encouraging to see growing adviser effort and confidence as the RDR deadline moves ever closer. We’ve seen membership of the Aviva Adviser Academy increase to over 10,000 this year as advisers study hard for the new qualification to meet the RDR requirement. The increase in confidence is down to all the hard work advisers are putting in, getting to grips with RDR requirements and preparing their businesses to trade after 2012.

 “At Aviva we constantly review what intermediaries are telling us through our research, so we can take steps to put technical support and practical guidance in place for advisers.  Our websites, Aviva for Advisers and the Adviser Academy, together with our business transition programme are all ways in which we are supporting advisers through the significant changes that RDR is bringing to our industry.”

Source : Aviva

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In the Pakistani capital Islamabad, adverts for terrorism insurance can be seen throughout the city. The National Bank of Pakistan’s Protection shield insurance scheme adverts offer coverage for a wide range of disasters with the most visible being terrorism insurance. There is even a fine print at the bottom of the ads, probably to prevent terrorists from using insurance as a money-making scheme, makes sure to add, “provided the insured is not directly involved in these activities.”

The NBP, according to a public-relations official at the bank, is operating the Protection Shield scheme in conjunction with American Life Insurance Company (Pakistan) Limited. He says that terrorism was added to the list of calamities under which beneficiaries could claim insurance in 2005. For a sum of Rs 20 a month, the policy pays out insurance of Rs 200,000 (1,639.33 EUR).

In the last couple of years there has been a boom in insurance companies offering coverage to those fearful of terrorism. In 2010, Allied Bank inked a deal with the New Hampshire Insurance Company to provide insurance to individuals who lost their lives or suffered damages in acts of terrorism. Other companies that offer insurance against terrorism include the State Life Insurance Corporation of Pakistan, which witnessed a nearly 50% increase in sales in the two years since terrorism insurance was started, New Jubilee Insurance and the National Insurance Company Limited (NICL).

Farid Khan, a human resource manager at a private company, says that the recent rise in terrorism insurance is a way for the insurance industry to pull itself out of the doldrums.  “Life insurers have to come up with new ways to convince people that they need insurance. Right now, playing on fears of the security situation is the best way to do that. This is basically a marketing method.” Farid points out that less than one per cent of the population has any form of insurance so fears of terrorism can be a good way of penetrating the market.

NICL even provides terrorism insurance to foreigners travelling to Pakistan and has an expanded definition of “terrorism acts” which, apart from including militant attacks, also covers gang rape and civil commotion. A human-resources official at NICL, speaking under condition of anonymity, says that the policy was slightly amended recently, after reports of Blackwater and CIA agents operating in the country began to surface.

The NICl policy now does not provide coverage to foreigners who have “engaged in any kind of spying activity or on secret assignments”, those who “are guest military troops on any kind of declared or undeclared activity” and those who are “engaged in any activity that is against the interests of the state.” The official said they had not yet had any case of foreigners claiming insurance for anti-state activity and that the company would decide how to interpret the phrase.

Even foreign companies are trying to get in to the terrorism insurance business. Siegfried Busch, a Swiss reinsurance company, made a presentation to the Pakistan Insurance Institute, according to a insurance executive who was present at the meeting.

The executive says that, among the proposals made by Siegfried Busch was that the insurance companies to lobby the government to make terrorism insurance mandatory for all citizens of Pakistan, possibly by including monthly payments to utility bills. The executive also provided a copy of the power point presentation made by Siegfried Busch to The Express Tribune. Other proposals included separating terrorism insurance from all other forms of life insurance and getting the government to be a re-insurer of the last resort.

The Pakistan Insurance Institute hasn’t yet acted on Seigfried Busch’s recommendations, says the executive, because it would require all the insurance companies to pool their insurance policies and re-insure it with the Swiss company.

Source : Tribune

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Britain suffers from ‘Peter Pan’ syndrome as 16 million people say they have delayed at least one major life step including marriage, having a baby or buying a home, according to a new report from LV=.

LV=’s ‘Delayed Lifestyle’ report looks at the long-term trends in Britons’ key life stages – assessing how average ages have changed over the last few decades and forecasts these trends to the year 2025.

The report shows the average age for tying the knot for the first time is now 32 years for men and 30 years for women. This looks set to increase to 35 years for men and 34 for women by 2025 and has risen steadily since 1970 – when, on average, men got married at 24 and women at 22. Meanwhile, Britons have also put off starting a family – the average age of first time mothers is currently 28 years, increasing from 24 in 1970. This looks set to rise to 29 years by 2025.

LV=’s report also looks at what age Britons are getting on the housing ladder and forecasts the average age of a first time buyer will be 41 years by the year 2025. This is a big leap from the 1980s when people bought their first house at 29 years old. With the majority taking a mortgage for a term of 25 years or more, this delay is likely to have a significant impact on people being able to pay their mortgage off before reaching retirement. The average age of a first time buyer in the UK today is 38 years.

Along with not being ready to settle down, high costs is the most common reason for people holding back on starting these life events. The research reveals 14.7 million people (30%) say they cannot afford to get married, have a child or buy a house.

Richard Rowney, LV= life and pensions managing director said: “The cost of living is having an impact on when Brits are able to settle down, have children and buy a house. Many people are struggling to afford these major life steps and our report shows this is set to get worse in the years to come as the average age for marriage, starting a family and getting on the housing ladder are all set to increase.

“Faced with high property prices, high inflation, uncertainty over the movement of interest rates and a tough economic climate, it is not surprising Brits are developing “Peter Pan syndrome”. However, people need to consider the long term financial impact of delaying major financial steps, particularly if it means they will still have high debts to pay when they are much older and approaching retirement.”

LV=’s report shows over half (55%) of 20 – 29 year olds are not yet married but expect to get hitched later in their life. However, with the average age of a groom set to be 35 years old and brides to be 34 years old by 2025 some of them could be in for a long wait.

Unsurprisingly the impact of rising costs has led to people postponing their marriage dreams with just under a fifth (19%) of those in their 20s saying they can’t afford to get married and a further (14%) saying they have not yet enough saved to pay for a wedding. However, it is not just high costs which are holding people back from walking down the aisle – nearly one in three of those in their 20s (31%) say they are just not ready to get married and over a third (34%) are still looking for the right partner.

Up until the mid-90s, statistics show that people would marry first and then have children. For example, in the 1970s, mothers tended to have their first baby at age 24, about a year after they got married. However this is no longer the case. The average age for a first marriage for single women is now six years later (at 30 years old) and the average age of a first time mother is two years before that – at 28 years old. This shift occurred over time so that by 1995 more people started a family first and then married later (see graph 4 below). This gap is on the increase as women will, on average, get married five years after their first child by 2025.

Today, half of those in their 20s (50%) and a fifth of those in their 30s (19%) say they are putting off having children.

The most common reason is not having found the right partner (25%), followed by not being ready to settle down (19%) and not being able to afford to have children (14%).

Nearly half of those in their 20s and 30s (47%) say they cannot afford to buy a house on their current salary. In addition to this, among those who have not yet bought a property, 46% say they have been unable to because they cannot afford the deposit and 16% were unable to get a mortgage.

Of those who have bought a house but did so later than they expected, a quarter (26%) delayed buying because they did not have the money for a deposit and one in five (19%) were not ready to settle down (see table 5 below).

When looking at people’s priorities in life, just 7% of people said that saving for retirement was a top priority for them. As the LV= report shows, with people struggling to afford the more immediate priorities of buying a home, getting married and starting a family it isn’t surprising that so few prioritise saving for the future.

Richard Rowney continued: “With increasing financial pressures it seems some people feel like it is never going to be a right time to fulfill their goals. Seeking expert financial advice earlier on in life could help people plan better to meet these costs. It is also important to keep the bigger picture in mind and understand the impact that delaying saving for the future and getting financial protection in place may have on your long term financial position.”

Source : LV=

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When I consider purchasing an individual health insurance plan for myself or my family, do I have any financial obligations beyond the monthly premium and annual deductible?

Answers: It depends on the plan, but some plans have the following cost-sharing elements that you should be aware of.

Co-Payments: Some plans include a co-payment, which is typically a specific flat fee you pay for each medical service, such as $30 for an office visit. After the co-payment is made, the insurance company typically pays the remainder of the covered medical charges.

Deductibles: Some plans include a deductible, which typically refers to the amount of money you must pay each year before your health insurance plan starts to pay for covered medical expenses.

Coinsurance: Some plans include coinsurance. Coinsurance is a cost sharing requirement that makes you responsible for paying a certain percentage of any costs. The insurance company pays the remaining percentage of the covered medical expenses after your insurance deductible is met.

Out-of-pocket limit: Some plans include an out-of-pocket limit. Typically, the out-of-pocket limit is the maximum amount you will pay out of your own pocket for covered medical expenses in a given year. The out-of-pocket limit typically includes deductibles and coinsurance. But, out-of-pocket limits don’t typically apply to co-payments.

Lifetime maximum: Most plans include a lifetime maximum. Typically the lifetime maximum is the amount your insurance plan will pay for covered medical expenses in the course of your lifetime.

Exclusions & Limitations: Most health insurance carriers disclose exclusions & limitations of their plans. It is always a good idea to know what benefits are limited and which services are excluded on your plan. You will be obligated to pay for 100% of services that are excluded on your policy.

Beginning September 23, 2010, the Patient Protection and Affordable Care Act (health care reform) begins to phase out annual dollar limits. Starting on September 23, 2012, annual limits on health insurance plans must be at least $2 million. By 2014 no new health insurance plan will be permitted to have an annual dollar limit on most covered benefits.

Some health insurance plans purchased before March 23, 2010 have what is called “grandfathered status.” Health Insurance Plans with Grandfathered status are exempt from several changes required by health care reform including this phase out of annual limits on health coverage.

If you purchased your health insurance policy after March 23, 2010 and you’re due for a routine preventive care screening like a mammogram or colonoscopy, you may be able to receive that preventive care screening without making a co-payment. You can talk to your insurer or your licensed eHealthInsurance agent if you need help determining whether or not you qualify for a screening without a co-payment.

There are five important changes that occurred with individual and family health insurance policies on September 23, 2010.

Those changes are:
1. Added protection from rate increases: Insurance companies will need to publically disclose any rate increases and provide justification before raising your monthly premiums.
2. Added protection from having insurance canceled: An insurance company cannot cancel your policy except in cases of intentional misrepresentations or fraud.
3. Coverage for preventive care: Certain recommended preventive services, immunizations, and screenings will be covered with no cost sharing requirement.
4. No lifetime maximums on health coverage: No lifetime limits on the dollar value of those health benefits deemed to be essential by the Department of Health and Human Services.
5. No pre-existing condition exclusions for children: If you have children under the age of 19 with pre-existing medical conditions, their application for health insurance cannot be declined due to a pre-existing medical condition. In some states a child may need to wait for the state’s open-enrollment period before their application will be approved.

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David Barral has been appointed CEO, UK Life. He will report to Aviva’s UK CEO, Mark Hodges, and will also join the UK Board and UK Executive team. David was previously chief operating officer, UK Life. He joined the Group in 1999 and has 30 years financial services experience covering business development, distribution, marketing, customer service and operations.

David replaces Toby Strauss who is leaving Aviva to take up a new role with Lloyds Banking Group. Toby has been with the Group for three years.

David’s previous responsibilities have been split between two new appointments to the UK Life Executive team. Phil Willcock, currently managing director, UK Health, will become propositions director, in addition to his UK Health responsibilities. Hugh Hessing will broaden his customer service responsibilities becoming customer experience director.

Mark Hodges said: “I’m delighted to welcome David to my UK Executive team. David has extensive financial services experience, a track record in business transformation and a great passion for delivering the best for our customers.

“We’re also pleased to appoint Phil and Hugh to the Life Executive team. These appointments demonstrate the bench strength we have in Aviva and their energy and focus will make a significant contribution.

“Toby has led a strong team in the UK Life business, making a valuable contribution to Aviva, and we wish him well for the future. The UK Life business is in great shape with a clear strategy, which the new team will continue to drive forward.”

Source : Aviva Press Release

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Fitch Ratings has affirmed Bupa Insurance Insurer Financial Strength (IFS) rating at ‘A+’ and Long-term Issuer Default Rating (IDR) at ‘A’ with Stable Outlooks. Fitch has also affirmed BIL’s GBP330m subordinated perpetual bond, issued by Bupa Finance plc (BF) and guaranteed by BIL on a subordinated basis, at ‘BBB+’.

Bupa Finance plc (BF, rated ‘A-‘/Stable/’F2’) is the holding company for BIL and an intermediate holding company for the Bupa Group (see ‘Fitch Affirms Bupa Finance Plc at ‘A-‘; Outlook Stable; dated 13 May 2011).

The rating rationale primarily reflects BIL’s strong and stable underwriting profitability, which has held up comparatively well despite the challenging economic environment; solid capitalisation that is supportive of the current rating level; strong franchise and leading market position in the UK; and the low risk nature of the short-tail medical insurance class of business which can be re-priced in a timely manner in response to a deterioration in profitability. Offsetting these positives is the company’s reliance on a single line of business as well as the loan to its parent, which Fitch believes negatively affects the quality of its capital.

Fitch recognises management’s continued focus on profitability. As a result the loss ratio declined to 74.3% at year-end 2010 from 76.0% at the prior year-end. Fitch believes earnings generation will remain strong in 2011 and 2012.

BIL’s capitalisation is supportive of the current rating level and shareholders’ funds have increased in recent years due to high retained earnings. Fitch notes that the loan that BIL is providing to BF increased to GBP575m in 2010 from GBP511m in 2009. The loan, which is almost entirely deducted from available capital for regulatory solvency purposes, is expected to further increase in 2011 as Bupa targets a regulatory solvency position of at least 150% at the BIL level. Fitch recognises that parts of this loan could be repaid at anytime should BIL require additional capital. From the Bupa Group perspective, capitalisation is equally strong and improved in 2010. Although high levels of goodwill at the group level impair the quality of capital to a certain extent, capital remains supportive of the current rating level.

Fitch considers the risk profile of the investment portfolio to be consistent with the rating level. At year-end 2010, 85% of BIL’s portfolio consisted of highly rated cash and cash equivalents which reflect the short-term nature of BIL’s liabilities. Following losses in 2008, BIL de-risked the asset side of its balance sheet by selling a portion of its return-seeking portfolio and at year-end 2010 this portfolio represented 15% of total investments.

The group’s ultimate parent, British United Provident Association Ltd, is a company limited by guarantee with no external shareholders. Activities include the private medical insurance (PMI) business in the UK, Australia and Spain amongst other countries, care services ownership and operation of UK and Spanish private hospitals, and PMI-orientated activities in other countries including Australia and Spain. BIL’s gross written premiums amounted to GBP2.2bn in 2010, and shareholder funds had risen to GBP842m at year-end 2010 from GBP773m in 2009.

Given the company’s current lack of business line diversification evident in its almost complete reliance on medical insurance, Fitch does not anticipate an upgrade in the near future.

The key rating drivers that could result in a downgrade include:

–Deterioration in operating performance as evidenced by an increase in the combined ratio to over 100% for an extended period of time and earnings-based interest coverage declining to below 4-8x level;

–Sustained drop in capitalisation below management’s target of 150% of regulatory solvency;

–Any changes in government healthcare policy that impact BIL’s ability to appropriately price its products or otherwise hinders the company’s financial or operating profile.

Source : Fitch Press Release

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Hiscox today issues its Interim Management Statement for the first three months of the year to 31 March 2011.

Hiscox’s gross written premiums year on year reduced as expected by 8.0% to £453.5 million (2010: £504.1 million) as the Group maintained underwriting discipline and walked away from poorly rated risks.

Bronek Masojada, Chief Executive, commented: “We continue to underwrite for profit over volume in these tough market conditions. This discipline has allowed us to keep our powder dry and we are ready to take advantage of rising reinsurance rates. Our own reinsurance cover remains substantially in place for the upcoming US hurricane season.”

 

Gross Written Premiums for the period:

Gross Written Premiums
to 31 March 2011		 Gross Written Premiums to 31 March 2010 Growth in local Currency Growth in Sterling
US$/€m £m US$/€m £m % %
Hiscox London Market £182.4 £234.8 -19.8% -22.3%
Hiscox International
– Hiscox Bermuda US$139.0 £86.8 US$136.3 £87.3 1.9% -0.6%
– Hiscox Guernsey US$30.0 £18.8 US$33.1 £21.2 -9.2% -11.5%
– Hiscox USA US$39.3 £24.6 US$39.8 £25.5 -1.2% -3.7%
Hiscox UK £86.2 £79.8 9.3% 8.0%
Hiscox Europe €64.3 £54.7 €62.1 £55.5 3.5% -1.4%
Total £453.5 £504.1 -8.0% -10.1%

Rates
The first quarter began with rate reductions in reinsurance lines but the recent catastrophes have changed the market. Reinsurance rates are now back to 2010 levels with increases in some areas, especially in the Asia Pacific. We expect increases to become widespread during the June/July renewal period with potential average rate rises of around 10% in US catastrophe business, as the market is also impacted by the new RMS 11 model.

Other rates are mostly stable or rising with few classes of business experiencing reductions.

Catastrophes
Our claims estimates for the 2011 New Zealand earthquake and Queensland floods remain unchanged at £60 million and £15 million respectively based on an insured market loss of US$10 billion for the New Zealand Earthquake and US$2.4 billion for the floods in Queensland.

Our previously announced position on the Japanese earthquake also remains unchanged. Although considerable uncertainties still exist, we believe our previously published model1 is valid. From an insured market loss of approximately US$24 billion, Hiscox could incur net claims of between $60 million and $150 million with a mean loss of $100 million.

Hiscox’s own reinsurance programme
The Group’s strategy to reinsure catastrophe exposure predominantly on a pro-rata basis means we have substantial protection in the event of a large individual loss, or a series of losses. Pro-rata reinsurance shares with the reinsurer a proportion of the overall liability, premium and losses of risks underwritten, giving greater depth of cover than a conventional excess of loss or aggregate reinsurance policy.

Investments
The investment result to 31 March 2011 was +0.4%. Government bonds and cash provided little by way of return with our allocation to corporate bonds and risk assets accounting for the bulk of the gains. Invested assets totalled approximately £2.8 billion at the end of March and asset allocation was substantially unchanged during the first quarter.

Whilst the timing remains uncertain, our expectation is that interest rates in the US and the UK will rise. Duration will therefore remain short in our US Dollar and Sterling bond portfolios in line with our focus on preserving capital rather than chasing yield in current market conditions. Equities appear more reasonably valued and we remain optimistic that our weighting towards risk assets will add incremental value to returns.

Hiscox London Market
Hiscox London Market reduced premium income as planned by 22.3% to £182.4 million (2010: £234.8 million). In the first quarter this business cut back in areas where rates were under pressure, mainly reinsurance and professional indemnity, but now sees opportunity where markets are improving, for example reinsurance.

Hiscox Bermuda
Gross premium income for Hiscox Bermuda was stable at US$139.0 million (2010: US$136.3 million) with increased capacity from third party quota shares in 2011.

Hiscox Guernsey
Hiscox Guernsey reduced premium income by 9.2% to US$30.0 million (2010: US$33.1million) mainly due to a disciplined approach in the piracy market.

Hiscox USA
Hiscox USA reduced by 1.2% to US$39.3 million (2010: US$39.8 million). The small reduction in income reflects last year’s refocus of the business. Growth in core Specialty and Wholesale lines is ahead of plan this year.

Hiscox UK
The retail business in the UK grew premium income by 8.0% to £86.2 million (2010: £79.8 million). This continued good growth came from the Direct business and the new underwriting partnership with Dual.

Hiscox Europe
Hiscox Europe maintained its premium income at €64.3 million (2010: €62.1 million). The Art and Private Client book reduced slightly after a higher deductible was applied. Profitable commercial business grew by 20% as we increased its distribution.

Scrip dividend
As previously announced, subject to shareholder approval at the forthcoming AGM, a scrip dividend alternative to the cash dividend is to be offered to shareholders and the Company’s Dividend Access Plan will be suspended. The Scrip Reference Price is 381.36p being the average of the closing share price for the 5 days following the announcement of the cash dividend.

Source : Hiscox Press Release

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The US Justice Department sued German giant  Deutsche Bank Tuesday for more than $1 billion for mortgage fraud, saying the  bank illegally obtained government insurance for substandard mortgages during  the US housing boom.

Deutsche Bank and its subsidiary MortgageIT “repeatedly lied to be included  in a government program to select mortgages for insurance by the government,”  the Justice Department complaint said.

“While Deutsche Bank and MortgageIT profited from the resale of these  government-insured mortgages, thousands of American homeowners have faced  default and eviction, and the government has paid hundreds of millions of  dollars in insurance claims, with hundreds of millions of dollars more  expected in the future,” it said. The government asked the court to award it triple the amount it has already  paid out on mortgages that should not have been insured, an amount that could  run over $1 billion, as well as other compensation and punitive damages.

“MortgageIT and Deutsche Bank ignored every type of red flag and breached  every duty of due diligence before underwriting thousands of federally insured  mortgages,” said US attorney Preet Bhahara.

“While the homes the defendants issued loans for may have been built on  solid ground, the defendants’ lending practices were built on quicksand.”

The suit, filed Tuesday in New York federal district court, said that  MortgageIT, acquired by Deutsche Bank in January 2007, insured 39,000 home  loans worth more than $5 billion with the Federal Housing Administration (FHA)  in the decade to 2009.

The mortgages were “recklessly” approved by the company in “blatant  disregard” of whether the borrowers would be able to make payments on them. Both the bank and MortgageIT “made substantial profits through (the) resale  of these FHA-insured mortgages,” many of which later ended up in default, the  complaint said.

Despite the mortgages’ low quality, MortgageIT falsely claimed it had  performed due diligence and asserted them as eligible for FHA insurance. It also failed to monitor defaults as required, the suit alleged.

“MortgageIT took the only staff member dedicated to auditing FHA-insured  mortgages and reassigned him to production instead,” it said.

The company also “literally stuffed” into a closet unopened, unread outside  auditor reports on the problem, it said.

Deutsche Bank’s and MortgageIT’s mortgage operations were in “egregious  violations” of FHA requirements. The result was that, not long after being sold on to investors by Deutsche  Bank and its subsidiary, thousands of the loans went into default, costing the  insurer while the bank profited.

The government said it had paid out $386 million as of February this year  for claims on 3,100 home loans, 1,100 of which defaulted within one year.

It expected to pay “hundreds of millions of dollars more” in the future on  another 7,500 more loans currently in default but insurance claims have yet to  be filed or paid.

Germany’s biggest bank rejected the charges and pledged to mount a vigorous  defense.

“The suit is unfounded and we intend to defend ourselves vigorously against  this action,” a Deutsche Bank spokesman told AFP, declining to comment further.

In late trading on the Frankfurt stock exchange, shares in Deutsche Bank  were down 2.21 percent at 43.22 euros.

New York, May 3, 2011 (AFP)

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New claims for US unemployment insurance  benefits surged more than expected last week to the highest level since  January, official data showed Thursday.

The Labor Department reported initial jobless claims rose to a seasonally  adjusted 429,000 in the week ending April 23.

That was sharply higher than the average analyst estimate of 390,000.

The Labor Department revised slightly upward the prior week’s claims number  to 404,000.

The department gave no explanation for the unexpected rise in the weekly  indicator on the jobs market.

The four-week moving average, which helps to smooth volatility, was 408,500  claims, an increase of 9,250 from the prior week. The average had been below  the 400,000 threshold for eight consecutive weeks.

The US unemployment rate fell to 8.8 percent in March, its lowest level in  two years, as the economy struggles to recover from recession.

Washington, April 28, 2011 (AFP)

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Quinn Insurance, the leading insurance firm founded by tycoon Sean Quinn, had losses of 706 million euro in 2009.

Operating losses represented EUR 559m and EUR 147m was due to write-downs of assets. EUR 333m of the loss comes from the UK insurance business, the bulk of that loss relating to non-motor insurance.

The losses will mean a claim of around €600m on the Insurance Compensation Fund (ICF), which will be paid for through a levy on all non-life insurance holders in the Republic.

The fund is intended to ensure that customers of all insurance companies get paid even if their own insurer gets into financial difficulty.

Michael McAteer and Paul McCann, the administrators of the company, have also revealed they signed the deal today to sell off the company to Anglo Irish Bank and US insurance firm Liberty Mutual.

Liberty Mutual will inject €102m into the company and Anglo Irish Bank will put in €98m to re-stabilise the company, which will be called Liberty Mutual Direct Insurance.

All 1,570 jobs will be saved across their three locations in Fermanagh, Cavan and Dublin, they said.

The company expects to record a further €160m of losses in 2010.

They have stated however that since March 2010 their losses have been stemmed.

The ICF will be called upon at the end of 2011 for compensation of around €180m.

However, the profits from Liberty Mutual Direct Insurance will also be used to reduce the amount needed from the ICF.

“In accepting the proposal, we have successfully mitigated against the worst case scenario – one in which a sale of Quinn Insurance Limited did not occur and where, as a consequence, the Insurance Compensation Fund was liable for the total liabilities of the company,” commented Mr McAteer.

Source : Inside Ireland

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Most large employers are now beginning to rethink their retiree health care strategy as a result of federal health care reform, according to a recent report by Aon Hewitt, the global human resource consulting and outsourcing business of Aon Corporation.

In late 2010, Aon Hewitt surveyed 344 companies, representing 2.2 million retirees nationwide, and found that 61 percent were either already evaluating or were expected to evaluate their long-term retiree medical strategy by the end of 2011, due to health care reform.  Meanwhile, 23 percent of respondents indicated they were still considering whether to assess their current strategy and only 16 percent had no immediate plans to review their current approach.

“Health care reform creates both challenges and opportunities for employers sponsoring retiree medical programs,” said John Grosso, retiree health care group leader with Aon Hewitt.  “Most employers have been studying the new legislation to understand how to effectively manage the challenges, while taking full advantage of the new opportunities going forward.  Many will find that the new legislation will create significant and immediate savings opportunities.”

Most immediately, among those planning to apply for the temporary Early Retiree Reinsurance Program (ERRP) to help offset a portion of the cost of health claims for retirees age 55 to 64, about half (48 percent) anticipate using the proceeds to reduce premiums, including both employer and participant share, while 21 percent intend to reduce the employer share of premiums only.

As for companies in the survey that pay a portion of health coverage for their retirees age 65 or older, three-quarters currently collect the Retiree Drug Subsidy (RDS).  Of those, 73 percent said they are altering their retiree drug benefits strategy, as health reform eliminates the RDS tax advantages for 2013, and creates enhancements to the Medicare Part D program for retiree drug benefits beginning in 2011.  In fact, 61 percent anticipate announcing these changes by the end of 2011 in order to begin recognizing accounting savings quickly, while 86 percent expect to actually implement these changes by 2013.

Alternatives most favored by employers making or contemplating changes to their post-65 retiree medical programs include contracting with a Part D Prescription Drug Plan (34 percent) or moving to a pure defined contribution approach (30 percent) where post-65 retirees can purchase benefits through the individual Medicare retiree plan market.  Other employers that anticipate leveraging an expanded market for Medicare retiree prescription drug plans support combining access to individual Part D plans with premium subsidization (5 percent) or out-of-pocket cost subsidization (5 percent).  Another 9 percent prefer eliminating employer-sponsored retiree prescription drug benefits altogether.

Of the employers favoring contracting with a Part D Prescription Drug Plan on a group basis, 57 percent will look to utilize an “Employer Group Waiver Plan (EGWP) + Wrap” approach, whereby the employer contracts for a Standard Medicare Part D plan design with a wraparound benefit that attempts to preserve the current prescription drug plan design and formulary strategy for the retiree.

“Many employers are looking to access cost-reduction opportunities created by the new changes to the Part D program,” said Grosso. “For those wanting to continue to manage and control their group program, contracting with a Medicare Part D plan on a group basis, leveraging the EGWP process, will make sense. Conversely, for those looking to move away from a group-based model, individual market-based benefit sourcing, supported by some level of tax-effective defined contribution funding, may be a desirable strategy.”

State Exchanges

In addition, Aon Hewitt’s survey found that 36 percent of respondents plan to make changes to their pre-65 retiree benefits strategy to directly leverage the health insurance exchanges that states, or the federal government, are required to create in 2014.  What’s more, 21 percent prefer moving to a pure defined contribution approach, where retirees could use an account established by the employer to purchase coverage through the exchanges.  The balance of these employers anticipate eliminating pre-65 coverage in response to the creation of exchanges.

“It is clear that a growing number of companies realize now is the time to take a closer look at their retiree medical strategies in an effort to leverage key cost and risk management opportunities created by reform,” said Milind Desai, retirement actuary with Aon Hewitt.  “Individual market benefit-sourcing, supported by state and private exchanges, can create cost-effective coverage opportunities for retirees that do not exist today, even within most employer-sponsored retiree group health plans. This is a primary reason why employer programs will evolve toward individual market-based benefit strategies over time.”

Source : Aon Hewitt Press Release

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BIBA’s annual conference and exhibition is the largest UK insurance event of its kind, attracting over 4,000 visitors to London ExCeL in 2010. There’s no better place to make fresh contacts, talk about new business opportunities, or to catch up with old friends and colleagues. Quite simply, it’s the best place to meet so many companies wanting to do business with the broker channel.

 

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* Find Information and Get Free Insurance Quotes* https://online-insurance-advisor.com/life-insurance-info.html?cid=details

Life insurance may be purchased for many reasons. Insurance is purchased to provide an income for your family when you die. Or, you may purchase a life insurance policy to assist with your children’s college education if you live by using a cash value policy.

You may use a life insurance policy to insure your business partner’s life so that if he dies, you can buy out his half of the business from his family. Alternatively, you can use cash value life insurance as a way to supplement your retirement income.

During your life, you may accumulate many debts and financial obligations. As a spouse and a parent, you will need life insurance. But, you’ll also need to know what it is and how it works before you buy it.

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