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Sofia Ashmore

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Iran expands oil tanker insurance because of EU sanctions

Industry News

Jul 29, 2012

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Iran is expanding a promise to insure shipments of its oil to include both Iranian and foreign tankers, in an effort to get around EU sanctions crimping its crude exports, reports said Saturday.

The insurance will be made possible through a new multi-billion-dollar line of state credit, Iran’s OPEC representative, Mohammad Ali Khatibi, was quoted as saying.

“Iran is ready to give total insurance for the transport of its oil… and the commitments by Iranian insurers are no different from those by Western insurers and therefore all risks and dangers are insured,” state-run newspaper IRAN reported him saying. Crude buyers have the option of using Iran’s fleet of 47 oil tankers or their own, he said.

“Deliveries that don’t obtain insurance from other countries will be insured by Iran,” Khatibi told the weekly news magazine Mosalas in an interview.

The Fars news agency cited an unnamed official saying the government had given the central state insurance agency, Bimeh Markazi, a line of credit worth several billion dollars to insure the tankers. It said 10 per cent of the money had already been transferred.

The measure expands on a promise of insurance for deliveries of its oil using Iranian tankers to major customers China and India. South Korea is also mulling joining that offer.

Iran is suffering a cut in oil sales abroad of up to 40 per cent, according to the International Energy Agency (IEA), because of an EU embargo on Iranian crude imports and a related ban on European insurers providing cover for deliveries of Iranian oil anywhere in the world. European insurers accounted for 90 percent of coverage for Iran before the EU sanctions took effect on July 1.

Iran is striving to maintain a semblance of business as usual in its oil exports.

“Export volumes are the same as before” the sanctions, Khatibi told Mosalas. By attempting to fill the insurance gap itself, Iran faces several obstacles. US sanctions targeting Iranian financial transactions worldwide make it unclear how Iran could pay out any claims arising from accidents involving its tankers.

Oil tankers are typically insured for up to $1 billion because of the risk of oil spills.

A European analyst in Tehran noted that the 40 tankers in Iran’s fleet owned by the NITC, formerly known as the National Iranian Tanker Company, each had a long-distance capacity of up to two million barrels of oil. Iran, before the EU sanctions, exported around 2.5 million barrels of oil per day.

The IEA estimates that has now been cut to around 1.5 million barrels per day. Several of the NITC vessels were being used in June to store Iranian offshore crude that Tehran has not been able to sell because of the sanctions, according to industry specialists. Iran has announced plans to quickly expand its onshore storage capacity, which has been saturated, including by subcontracting to private firms.

Tehran has also ordered 12 new super tankers from China and should receive the first in December.

Teheran, July 28, 2012 (AFP)

Aviva plans to exit Taiwan

Industry News

Jul 28, 2012

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British insurer Aviva said Friday it plans to leave Taiwan to focus on higher growth markets, making it the latest global firm to exit the island’s insurance industry.

“Our intention is to streamline our business by focusing on fewer high performing markets,” said Simon Machell, Aviva’s chief executive of higher growth markets.

“As such, we are exiting Taiwan to optimise the group business portfolio and deliver the maximum financial performance,” he said in a statement, adding the firm is seeking Taiwan’s regulatory approval.

The exit of Aviva, Britain’s second biggest insurer after Prudential, follows US-based AIG and MetLife, which sold their local units last year. Aviva reportedly plans to offload its 49 per cent stake in First-Aviva Life Insurance, a joint venture with Taiwan’s First Financial Holding Co. in 2008.

The British firm announced in May plans for a strategic review of all its businesses and to strengthen its capital base after the resignation of its chief executive officer.

Since last year, Aviva has sold businesses in Australia, the United Arab Emirates, the Czech Republic, Hungary and Romania.

Taipei, July 27, 2012 (AFP)

Aria Assistance : new director of medical services

Social

Jul 25, 2012

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Dr Jude McSharry has been named Director of Medical Services at Aria Assistance, the new independent company formed after the management buyout of Europ Assistance UK & Ireland.

Dr McSharry was previously at CEGA coordinating repatriations and tending to patients in- flight. Before that he had his own GP practice in Dublin. Dr McSharry has extensive experience of emergency medicine and aviation, having worked voluntarily in remote locations such as Somalia and Albania, where he helped repatriate seriously ill children to Australia, the UK, USA and Ireland for life saving surgeries.

At Aria Assistance Dr McSharry will be based from the firm’s office in Haywards Heath, heading up a team of 35 medics. His responsibilities include making decisions about treatment and repatriation, clinical governance and overseeing the firm’s healthcare products, such as nurse-led triage and chronic disease management.

“My charity work abroad sparked a passion for medical assistance, which fuelled my career choices,” explains Dr McSharry. “I enjoy coordinating repatriation cases and at Aria Assistance I have the back up of an excellent team, which makes for a dynamic working environment and the safe return of patients.

“Aria Assistance works on behalf of some of the UK’s major insurance and travel brands, overseeing the care of sick or injured customers while they are abroad and repatriating them safely home where necessary. We are available 24/7 to help people when they are at their most vulnerable, so I am delighted to join the firm.”

At Aria Assistance, Dr McSharry will as cases require travel out to escort patients home, offering the highest level of medical support and managing difficult cases in the challenging aviation environment. His experience will stand him in good stead for his new role.

Dr McSharry is the latest in a string of high profile appointments for Aria Assistance as it works to deliver its vision of a single source of insurance and assistance services. Patrick Leroy, Chief executive Officer, comments: “I am delighted to welcome Dr McSharry to the Aria Assistance family and wish him every success for the future.”

IFB joins in insurance identity fraud crackdown

Industry News

Jul 23, 2012

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Three suspected identity fraudsters have been arrested by the Metropolitan Police marking the Insurance Fraud Bureau’s (IFB) first involvement in one of the UK’s biggest investigations into identity fraud.

Working alongside the Metropolitan Police’s Amberhill Unit, the IFB has started to investigate the insurance records of suspected identity fraudsters – individuals who have obtained a genuine driving licence using false or forged documents. As a result, three men were arrested in May 2012.

As part of a pilot project, the IFB is investigating the insurance histories of 579 suspected identity fraudsters across the UK. IFB intelligence has already linked that sample of people to insurance claims now considered to be at ‘high-risk’ of fraud – amounting to potential scams worth in excess of £170,000. The IFB has issued alerts to its customers who may be affected by the scams as investigations continue.

Phil Bird, Director of the IFB, said: “People who commit identity fraud are inevitably involved in other forms of manipulation and criminal activity. IFB investigations on just a small sample of suspects have proved that these people are using their false identities to purchase insurance and make fraudulent claims.

“IFB intelligence has already helped the Metropolitan Police to track down and arrest three suspects and we are working with our insurer customers to uncover related insurance scams. It is another good example of how the IFB is able to tackle insurance fraud from a number of different angles.”

Detective Inspector Gary Miles, of the Metropolitan Police’s Amberhill Unit, said: “The partnership work between Amberhill and the IFB has proved pivotal in identifying a number of suspects who have had live insurance policies and claims. This in turn has enabled the perpetrators to be identified, arrested and has led to financials savings being identified.”

Europe : international trade deals could boost GDP by 2 per cent

International

Jul 23, 2012

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As recent estimates show, deepening relationships between the EU and its key trading partners can contribute significantly to Europe’s recovery.

If the EU pursues its ambitious external trade agenda, this could boost the EU’s GDP by 2% or more than €250 billion. This is equivalent to adding an economy of the size of Austria or Denmark. An ambitious agenda could also help create more than 2 million jobs across the EU.

By 2015, 90% of economic growth will be generated outside Europe, with one third in China alone. Hence, tapping into the markets of our key trading partners will play an increasingly significant role for Europe’s growth in the future.

More than two-thirds of these gains in growth and jobs would materialise through trade agreements with the US and Japan. On 18 July the European Commission requested the EU’s Member States’ approval to open negotiations with Japan. In June 2012, the interim report of the EU-US High Level Working Group on growth and jobs underlined the benefits of a comprehensive trade agreement between the EU and the US. A recommendation should follow later this year on prospects for launching negotiations.

What are the prospects of the EU’s current trade negotiations?

This year, free trade agreements (FTAs) are within reach with Canada and Singapore. Both are important precedents for other potential agreements with similar or neighbouring countries. A positive dynamic with other member countries of the Association of South East Asian Nations (ASEAN) would reinforce the EU’s position in Asia.

On-going FTA negotiations with large emerging economies such as India or the Mercosur countries, albeit being very challenging, are important to prepare for the future. The key question for the EU remains whether we will be able to conclude these agreements within a realistic timetable and at an acceptable level of ambition.

All this would form an agenda of bilateral negotiations of an unprecedented scale – probably the most ambitious trade and investment agenda in the world today.

Despite difficulties in moving forward in the multilateral context of the World Trade Organisation (WTO), the EU has not stood still in the face of rapid changes in the global economy and is moving ahead to further connect to new global growth centres: FTAs covered less than a quarter of EU trade before 2006; concluding on-going negotiations with Canada, Singapore, India and other ASEAN states would bring this figure up to half; and moving forward with the US and Japan would bring it up to two-thirds.

Stepping up the pace of negotiation and ratification would be essential to reap the benefits of external trade.

How strong is the EU’s trade performance?

The EU remains the world’s largest exporter, importer, source and recipient of foreign direct investment. The EU has managed to hold on to its 20% share of total world exports despite the rise of China, whereas Japan and the US have seen significant declines in their shares.

The EU has a massive manufacturing trade surplus of €281 billion, a figure that has increased five-fold since 2000 and has more than compensated for the increase in the energy bill over the same period. The EU’s surplus in services has expanded by a factor of 17 in 10 years, to stand at €86 billion in 2010. On agricultural products, the balance has shifted from a deficit of €3.3 billion in 2000 to a surplus of about €7 billion in 2011.

About 30 million jobs in the EU, or more than 10% of the total workforce, depend on sales to the rest of the world, an increase of almost 50% since 1995.

What contribution can trade make to growth?

Robust external demand is the main source of growth for the moment, as domestic demand components (public or private) remain weak. Only the contribution of trade to GDP in 2012 (+0.7 percentage points) should enable the EU economy to avoid falling back into recession this year, as the contribution of domestic demand and inventories is expected to be negative (-0.4 and -0.3 points respectively, according to the European Commission’s Economic Spring Forecast 2012).

The contribution of external demand to economic growth is bound to increase in the future, as 90% of global economic growth by 2015 is expected to be generated outside Europe, a third of it in China alone¹. To be sustainable, economic recovery will therefore need to be consolidated by stronger links with the new global growth centres.

More trade also benefits growth via the supply side of the economy. Trade liberalisation is a major structural reform in itself, creating new opportunities for innovation and stronger productivity growth. Trade and investment flows spread new ideas and innovation, new technologies and the best research, leading to improvements in the products and services that people and companies use. Long-term evidence from EU countries shows that a 1% increase in the openness of the economy leads to an increase of 0.6% in labour productivity². Therefore deep and comprehensive, truly transformative agreements with our largest trading partners can be powerful catalysts for economic change.

By operating on both supply and demand at the same time, the leveraging of trade policy is a condition for the success and sustainability of any recovery strategy. It is an essential complement to other internal EU instruments such as industrial policy tools or financing instruments for investment. It is essential for jobs as well.

Concretely, how will the trade agreements currently negotiated impact on Europe’s economy?

The impact of all on-going and potential negotiations taken together could provide an increase of about 1.2 percentage points of GDP or some €150 billion to the EU economy in the short to medium term (table 1). Productivity gains stemming from trade integration further increase the impact of trade agreements by more than half. Once taken into account, the longer-term effect of all on-going and potential negotiations could amount to 2% of GDP or more than €250 billion.

On-going negotiations with the ASEAN countries, Canada, India, and Mercosur would generate almost a third of total potential GDP gains, while possible agreements with Japan and the US would account for more than two-thirds. This would of course depend on the actual outcome of the negotiations.

NIG’s Essential Property Owners offered to the wider broker market

Uncategorized

Jul 18, 2012

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NIG has begun offering its Essential Property Owners (EPO) proposition to the wider broker market following a successful six-month period of exclusivity with a specific group of brokers including NIG First. Selected brokers are now being invited to access EPO as the company takes to the road to promote the product across the country.

Introduced to the NIG First community back in January 2012, EPO is an SME-focused version of NIG’s Premium Property Owners (PPO) product. It was developed following feedback from brokers that the SME market can be underserved in terms of policy coverage. EPO has core benefits including damage to buildings, loss of rent, property owners’ liability and engineering breakdown, and a suite of additional covers can also be added such as employers’ liability, legal expenses and financial loss.

EPO sits between NIG Network’s property products and PPO, and completes NIG’s end-to-end property strategy. NIG Network’s package products include Commercial Landlord and Residential Landlord; PPO, which was launched in July 2010 for NIG’s large property owning clients, continues to be extremely well received and has enabled NIG to significantly grow its market share and profile in the sector.

Stewart Anderson, Head of Property Owners at NIG, said: “EPO has been well received during its initial period. We were keen to make EPO available to other partner brokers in the market after this period as there is a great opportunity to grow our market share based on the strength of its policy coverage and our sector expertise. We have high expectations for the performance of the product. In our view it fills an important gap in the SME market and completes the property portfolio at NIG.

“We have had an extremely positive market response since spearheading our push into the property owners market two years ago via PPO, and with EPO we believe we have identified a new demographic that requires a similar innovative approach to policy coverage.”

Liberty Mutual Insurance Europe is reporting substantial profitable growth

Financial News

Jul 16, 2012

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Just over 12 months after it was launched, Liberty Mutual Insurance (LMI), the commercial lines division of Liberty Mutual Insurance Europe Limited (LMIE), and part of Liberty Mutual Insurance Group, is reporting substantial profitable growth.

Writing in this year’s LMIE annual report, LMIE chief executive Sean Rocks noted that the division has broadened the distribution of its products, primarily property, casualty and financial lines and almost doubled its headcount.

He said: “I am pleased to report that LMIE’s commercial business is already showing substantial profitable growth, with more scope ahead to secure and expand our position in the market.”

Rocks concluded that he expected to see further growth in LMIE’s commercial operation in 2012.

LMI was launched in March 2011, representing LMIE’s first major push into the UK’s commercial mid-to-large SME market. The move has seen a major expansion to LMI’s network of regional offices with new offices in Birmingham, Leeds and the South East. LMIE also has offices in London, Bristol, Cheltenham and Manchester.

The AA : British motorists shaken and stirred as severe weather closes in

Communication

Jul 15, 2012

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Just two weeks of severe weather has brought a heavy toll to Britain’s motorists as well as to home owners.

Over the fortnight since 28 June, when heavy rain flooded several parts of the UK and storms lobbed hailstones the size and weight of cricket balls across the East Midlands, AA Insurance estimates that over 14,000 cars have been severely damaged or written off by the weather.

Simon Douglas, director of AA Insurance, says that the AA’s own claims staff have dealt with over 400 claims for cars damaged by hail or flooding.

“Scaled up nationally, this equates to over 14,000 cars damaged by the weather in less than two weeks, to the tune of at least £35 million,” he says.

“We noticed a sharp claims ‘spike’ at lunchtime on 28 June with a large number of claims for cars in Leicestershire that had been battered by giant hailstones. That storm alone led to just over 200 claims.”

One customer said that his car ‘looked like a golf ball’ with the number of dents after being hammered by ‘golf-ball sized’ hailstones.

Another said his car was ‘destroyed’ by ‘lumps of ice as big and heavy as cricket balls’. Hundreds of workers returned to their cars that evening to find them damaged.

“Hail can ruin a car,” Mr Douglas said. “If it has perhaps hundreds of dents in the roof, bonnet and boot panels it will probably be uneconomical to repair it. We are seeing several cars being written-off in this way.

“Since then, we have dealt with a large number of claims for cars affected by floodwater. Again, insurers usually write cars off that have been submerged because electronic systems are likely to be affected, while brakes and engine components may also be damaged beyond repair.

“And, if water is sucked into the air intake while the car is running, which can happen if you hit flood water at any speed, the engine will almost certainly be destroyed,” he points out.

During the downpours, the AA’s roadside patrols have also been called out to hundreds of motorists who have driven through or become stuck in flood water or mud. The AA Special Operations Response Team (SORT) water rescue Land Rovers have been deployed to the worst affected parts of the UK.

Mr Douglas points out that it only takes six inches to fast-flowing water to pick up a car.

“Never attempt to drive through flood water – you can’t tell how deep it is or what the water might be hiding. If you hit deep water your car will be swamped. Fast flowing water can very easily sweep your car off the road, putting your life at danger, too: we have taken distressing claims for cars lost in this way.”

AA motoring flood advice

– Keep speed down, be watchful for standing water and not risk driving through flood water

– Don’t try driving through fast-moving water – you could easily get swept away

– Driving fast through standing water is dangerous; tyres lose contact with the road and you lose steering control – known as “aquaplaning”

– If this happens, hold the steering wheel lightly and lift off the throttle until the tyres regain grip

– If you break down in heavy rain, don’t prop the bonnet open while you wait for help to arrive. The engine will be more difficult to start again if the electrics are rain-soaked.

Written by Ian Crowder, ian.crowder@theAA.com

Appointment : NIG strengthens North East proposition

Social

Jul 15, 2012

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Commercial insurer NIG has moved to strengthen its proposition in the North East with the appointment of two highly qualified individuals to its team.

Mick Laws joins NIG as Senior Business Manager, having spent five years at Chartis as Business Development Manager. Mick gained experience working in positions at HSBC and ACE European Group and is also a former president of the Newcastle Insurance Institute. He will report to Steve Scott, NIG’s Area Business Development Manager.

In addition, Jamie Darling joins NIG as Development Underwriter, having previously worked as Commercial Combined Underwriter at Chartis since 2007. Prior to this, Jamie worked for NIG for five years covering the North East as a Commercial Underwriter. In his new role, he will report to Chris Robinson, Area Underwriting Manager.

Under the umbrella of the regional headquarters in Leeds, the North East team will continue to focus on excellent local service while looking to actively grow the book across the local area. The team in the North East will continue to be supported by new and existing dedicated business underwriters.

Steve Scott, Area Business Development Manager, said: “Mick brings with him a wealth of insurance experience as well as excellent local contacts and relationships, and I know he will significantly enhance NIG’s proposition in the North East. He is a superb addition to the team and I’m delighted to welcome him on board.”

Stuart Webb, Head of Regional Trading, added: “NIG is proud of its reputation for delivering excellent local service, and by hiring staff with strong local connections we can ensure that this will continue. NIG has been investing in its customer facing capability and the North East is no exception. It is a thriving region for business, and both Mick and Jamie will play key roles in expanding our business with brokers in this key market.”

ECIC : renewable energy products launched

Market

Jul 10, 2012

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Electrical Contractors’ Insurance Company Ltd (ECIC) has launched a new product specifically designed for the green energy industry, targeting those contractors who operate in the domestic and light commercial marketplace.

The new product features a comprehensive range of cover including:

– Employers’ Liability

– Public/Products Liability

– Professional Indemnity

– Contractors’ All Risks

– All Risks Property, Business Interruption, Money and Goods in Transit

The Renewable Energy product is suitable for contractors who specialise in the installation of renewable energies such as solar energy, hydro electricity, air source heat pumps and rainwater harvesting.

Richard Forrest-Smith, Chief Underwriting Officer and Deputy Managing Director at ECIC said: “With consumer -interest becoming “greener” and financial incentives for renewable energies such as solar panel installation, it is no wonder customers and contractors are looking at the new opportunities available in the renewable energy sector.

“Undertaking work such as solar panel installation now requires electrical contractors to have access to roofs. They need to have a real understanding of all the risks involved in carrying out this sort of work and ensure they have the right amount of cover for the work they will be carrying out.”

The product is available now and also features Efficacy cover, Financial Loss Feed-In Tariffs Extension, Interest free instalment plan and cover for Defective Products Supplied.

Fitch Ratings : affirms Lloyd’s of London’s IFS rating at ‘A+’ with a stable outlook

Industry News

Jul 9, 2012

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Fitch Ratings has affirmed Lloyd’s of London’s (Lloyd’s) Insurer Financial Strength (IFS) rating at ‘A+’. Fitch has also affirmed the Society of Lloyd’s Long-term Issuer Default Rating (IDR) at ‘A’ and Lloyd’s Insurance Company (China) Ltd’s IFS rating at ‘A+’. All three ratings have Stable Outlooks. Fitch has additionally affirmed Lloyd’s subordinated debt issues at ‘BBB+’ (see below).

The affirmations reflect the strong financial profile of Lloyd’s, which has demonstrated the ability to absorb what proved to be an unprecedented level of natural catastrophe losses sustained by the insurance industry during 2011. The rating actions also reflect Fitch’s expectations that Lloyd’s earnings will recover through 2012, driven by a marked improvement in the underwriting result. The agency’s central forecast includes a pre-tax profit of GBP1.6bn and combined ratio of 95%, assuming a normalised level of catastrophe losses through the remainder of 2012. Lloyd’s strong capital position and the conservative allocation of both several and mutual assets are also viewed as positive rating factors.

Fitch remains cautious about the significance that rising premium prices will play in improving 2012 profitability, noting that meaningful premium rate rises during H112 have been confined to loss affected insurance classes and geographies. This expectation is reflected by the Stable Outlook.

The historical volatility of Lloyd’s results has been driven by its substantial exposure to catastrophe events, which has resulted in higher-than-industry-average losses in years of significant catastrophe activity. Fitch continues to view the work of Lloyds’ Performance Management Directorate (PMD), which reviews and controls the performance of individual syndicates, as a key mechanism in improving the stability of earnings at Lloyd’s in the medium term.

A marked erosion of capital strength, as measured on Fitch’s risk-adjusted basis, but also considering losses falling to central fund assets, and poor underwriting performance relative to peers could lead to a downgrade.

Key drivers for an upgrade would be a reduced level of earnings volatility and underwriting results versus peers, in the wake of a large catastrophe event, or evidence of earnings resilience during a prolonged period of increased attritional losses and lower premium pricing conditions.

Market participants at Lloyd’s collectively underwrote GBP23.5bn of gross written premiums in 2011, a y-o-y increase of 3.9% (6% at a constant rate of exchange) and a loss before tax of GBP516m. Lloyd’s has a global franchise and operates in over 200 countries and territories. It is a leading market for reinsurance and specialist property, casualty, marine, energy and aviation insurance.

The subordinated debt ratings are as follows:

GBP300m 6.875% per annum subordinated debt with final maturity in November 2025, callable from November 2015, affirmed at ‘BBB+’

EUR253m 5.625% per annum subordinated debt with final maturity in November 2024, callable from November 2014, affirmed at ‘BBB+’

GBP392m 7.421% per annum perpetual subordinated debt, callable in 2017, affirmed at ‘BBB+’

Aviva : £318 million from Delta Lloyd shares sale

Industry News

Jul 6, 2012

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British insurer Aviva announced it had sold another 21 per cent of shares in Dutch unit Delta Lloyd for £318 million ($493 million, 398 million euros), one day after unveiling a large restructuring.

Aviva said it has placed 37 million Delta Lloyd shares at 10.75 euros per share, in a deal which slashes its holding from 41 per cent to about 20 per cent.

“The offering was completed very successfully with strong investor demand allowing the transaction to be increased from an initial sale of 25 million shares to a final sale of 37 million shares. The transaction was several times oversubscribed at the increased size,” it said in a statement.

The group added that, after completion of the deal, Aviva’s remaining stake will comprise approximately 34 million Delta Lloyd ordinary shares, equivalent to just below 20 per cent of ordinary share capital.

In late 2009, Aviva had sold a large 42-percent stake in Delta Lloyd in an initial public offering on NYSE Euronext Amsterdam. The group subsequently offloaded another 15 per cent of shares in May 2011.

Delta Lloyd Group is a financial services provider which offers life insurance, general insurance, asset management and banking products and services.

Friday’s announcement came one day after Aviva revealed plans to exit 16 non-core business areas and announced senior management changes following a major strategic review of the embattled group.

Aviva is seeking to strengthen its capital base and share price after the shock resignation of its chief executive earlier this year.

CEO Andrew Moss sensationally quit in May as head of Aviva — Britain’s second biggest insurer after Prudential — amid spreading shareholder revolts over pay for top managers viewed as underperforming.

London, July 6, 2012 (AFP)

U.S. : John Roberts ‘wrote both sides of US health care ruling’

International

Jul 4, 2012

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Chief Justice John Roberts flipped late in the game on the Supreme Court ruling on “Obamacare” and ended up writing both the majority opinion and most of the opposing dissent, sources said Tuesday.

Supreme Court experts described the move by Roberts, whose decisive swing vote to uphold President Barack Obama’s overhaul of the failing US health care system, as unprecedented.

The ruling on the reforms, Obama’s signature domestic policy which aims to provide insurance to most of the 50 million Americans who lack it, was written in such a way that one can tell it was at first rejected, they say.

Internal sources — both independent and within the court’s jurisdiction — confirmed Roberts changed his stance on the law during the three months of deliberations, prior to delivering the stunning decision on Thursday.

“Roberts did change his vote fairly late in the process,” professor of law at the University of Colorado at Boulder, Paul Campos, told AFP, based on his sources, which confirmed an earlier report from US broadcaster CBS. Joining the ranks of four progressive judges, Roberts, who was appointed by Republican President George W. Bush, saved Obama’s legislative opus from being struck down by the majority conservative court.

As is not unusual, Roberts chose to write and deliver the ruling of the 5-4 majority, reading it aloud on Thursday.

But Roberts also wrote “three quarters” of the dissent, where the minority explains its reasons for opposing the decision, Campos wrote on news site Salon, citing a source “within the court with direct knowledge of the drafting process.”

“What is very unusual is for someone to end up in a position where they end up offering large parts of both the majority and the dissent. That’s unprecedented,” Campos told AFP.

Washington, July 3, 2012 (AFP)

Insurance fraud : OCADO stricks hard on ‘Crash for Cash’ fraud

Industry News

Jul 4, 2012

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Ocado, award-winning online supermarket and retail distributor, has teamed up with Hill Dickinson to take a stand against ‘crash-for-cash’ scams following an incident with one of its delivery vans and the subsequent prosecution of three fraudsters.

The staged road traffic accident (RTA), which happened on 17^th September 2009 in London, saw the perpetrators ‘slam on the brakes’ directly in front of an Ocado delivery van, forcing it to crash into the back of the gang’s Vauxhall Astra.

Initial investigations into the RTA led the driver, Mr Fatah, and his two passengers Mr Karim and Mr Saied, to blame a car in front of them for their sudden braking and then to blame a pedestrian who was about to step off the pavement. All parties entered into personal injury claims against the retail distributor. However, a statement from the Ocado driver and video footage taken from the delivery van, proved their story to be false.

Ocado takes a robust approach against fraud and immediately sought the advice of Hill Dickinson who investigated the matter further and secured the evidence required to take the case to the Metropolitan Police. All three men were subsequently charged with offences under the Fraud Act and appeared in Croydon County Court for a four day trial. They were found guilty and sentenced to three months in prison.

John Norfolk, Head of Risk Management at Ocado, said: “Crash-for-cash claims are becoming more widespread but as a business we will not tolerate being targeted in this way. Our vans are fitted with black box technology for safety reasons and in this case the footage was extremely valuable as it proved our driver was an innocent party in the RTA. Working in partnership with Hill Dickinson and the Metropolitan Police we have been able to achieve a positive outcome.”

Ian Emery, Associate in Hill Dickinson’s Insurance Business Group, said: “Unfortunately we are seeing an increasing number of individuals prepared to provoke a road traffic accident to make a personal injury claim and large retail distribution fleets are particularly at risk. 99 per cent of the time, if you drive into the back of someone else, it’s going to be seen as your fault and these fraudsters depend on it. By picking fleet vehicles it is assumed that they will be guaranteed to pay the claim, but as it becomes more frequent corporate organisations are becoming more vigilant, investing in technology and are prepared to robustly defend these claims.

“My advice to drivers who think they may have been a victim of ‘crash-for-cash’ fraud is to tell your fleet manager and insurer immediately. Also, get as many details as possible on the car, driver, passengers and the damage, but don’t put yourself at risk.”

BIBA : concerns with the revision of Insurance Mediation Directive

Industry News

Jul 3, 2012

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The European Commission has published a revised Insurance Mediation Directive (IMD II), outlining changes to insurance broker regulation across Europe.

The British Insurance Brokers’ Association (BIBA) is pleased that the Commission has taken on board two of the main points made by both BIBA and the European Federation of Insurance and Financial Intermediaries (BIPAR) during the development process of this directive text.

BIBA made strong representations to the Commission that the scope of the directive should remain wide and is therefore pleased to see that both price comparison websites and travel agents are specifically listed as being within the scope of the new directive.

BIBA also made representations that both the disclosure and professional requirements articles should apply to all firms within the scope of the directive and is pleased that the Commission has reflected this within the new text.

However, BIBA is very disappointed that the Commission has ignored the views of EIOPA (the European Insurance and Occupational Pension Authority), HM Treasury, the Financial Services Authority and all the leading insurance broking representative bodies in Europe by imposing a five year timetable to mandate the disclosure of commission in the general insurance sector.

Furthermore BIBA is extremely concerned that the Commission has not fully reflected the level playing field in respect of an insurer equivalent to remuneration disclosure. BIBA will be working with members to propose an alternative wording on this issue.

Steve White, BIBA Head of Compliance and Training, said: “We are pleased that the majority of points that we have made to the Commission have been taken on board in this text, but we still have major concerns in some areas. Our primary concern is around mandatory disclosure and where it is imperative from a European perspective that a level playing field is established with insurers when selling direct.”

Eric Galbraith, BIBA Chief Executive, added: “BIBA alongside BIPAR, will in the coming months, continue to actively promote its detailed views during the final stages towards the definitive adoption of the Directive by the EU co-legislators, the European Parliament and the Council of Ministers.”

The IMD text now enters the European legislative process and is expected to be finalised and published in late 2013 or early 2014, with an implementation no later than two years after.

Keychoice : The Apprentice advisor, Karren Brady, is keynote speaker for 2012 conference

Communication

Jul 2, 2012

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Keychoice has announced that Karren Brady, the right-hand woman to Lord Sugar on the BBC TV show, The Apprentice, has been confirmed as the keynote speaker at its annual conference.

Karren Brady, who has been rated as one of the world’s most powerful business women, will be leading an array of speakers at the conference and exhibition to be held at the Telford International Centre on Thursday 18th October 2012.

Delegates will hear from a range of high profile industry leaders and business experts, including Ageas’ Mark Cliff, BIBA’s Eric Galbraith, Sam Hudson of Aviva, Keith Stern from Lloyd’s, digital marketing expert Andy Heap, Steve Lathrope from SSP and guest speaker, entrepreneur and adventurer Neil Laughton.

The conference, themed Opening new doors, is designed to help independent brokers get the skills, knowledge and relationships they need to compete effectively in today’s challenging insurance market. Thought provoking seminars and practical training sessions will run throughout the day, covering key areas such as regulation and compliance, digital marketing, social media, business development and e-trading.

Jonathan Davey, managing director of Keychoice, said: “Despite the challenging market, there are opportunities for growth – if brokers know where to find them and how to seize them. And that’s what this conference is all about, opening new doors to new opportunities. Britain’s independent brokers are at the heart of the insurance industry, and we’re determined to help keep them there. Our members will enjoy an action-packed day of learning. They’ll gain new skills, listen to industry experts, and network with insurers which will help them to win new business and build deeper, more profitable relationships with existing clients.

“When you’re looking to inspire and motivate people, Karren is the right person for the job. She is passionate and straight-talking, with the all-round business expertise to give brokers the advice they need to succeed in today’s challenging business environment. We’re looking forward to sharing her tips and insights.

As well as the conference programme, brokers and their teams will also have access to the exhibition and one to one access with senior representatives from over 30 insurers and other service providers.

The AA : west Midlands flooding and hailstorms

Industry News

Jul 1, 2012

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The AA alone has attended around 100 cars driven through or stuck in flood water in the Midlands so far today (as at 14:00) and has deployed its team of water rescue Land Rovers, AA Special Operations Response Team.

Darron Burness, the AA’s Head of Special Operations, says: “The flash flooding and hailstorms in the Midlands today has caught out a lot of people. The tragic case of a man swept away in Shropshire illustrates the dangers as it only takes as little as six inches of fast flowing water to knock you off your feet.”

With torrential downpours forecast for many other areas, the AA is advising drivers to keep their speed down, be watchful for standing water and not risk driving through flood water.

Darron Burness continues: “It’s often impossible to gauge the depth of flood water, so don’t even chance it. Not only do you risk wrecking your engine but there are often hidden dangers like dislodged manhole covers and other debris. Also, it takes only one foot of water to float a car.”

HAIL WRECKS CARS IN LEICESTERSHIRE

Over the space of half an hour at lunchtime today (28 June) AA Insurance received 29 claims for cars damaged by freak hail in and around Leicester.

Customers reported that hail stones the ‘size of golf balls’ battered their cars. One said his car was ‘covered in dimples’, another reported that his car had been ‘wrecked’ by ‘giant lumps of ice falling from the sky’ and all said that their cars were extensively damaged.

Often, damage of this sort results in the car having to be written off although such damaging hail is thankfully rare in the UK.

The severe weather locally also produced a tornado and torrential rain, causing damage and flooding to homes after drains and waterways were blocked by massive hailstones.

“If your car is comprehensively insured, damage of this sort is covered by your policy, while damage to property should also be covered by buildings insurance,” said Simon Douglas, director of AA Insurance.

“We are seeing some freak weather conditions this year with floods, tornaodes and now hail.

“Hail can be particularly damaging and we are expecting dozens more claims today as customers return to their parked cars and find them ruined. Other insurers will be seeing a similar spike in claims.”

Fitch Ratings : ECJ gender ruling will have no serious impact on life insurers

Industry News

Jun 29, 2012

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Fitch Ratings expects UK life insurers to face no serious impacts to their business when they adapt their pricing to comply with the European Court of Justice ruling on gender-neutral insurance premiums. The agency believes that insurers have the necessary underwriting and pricing expertise to maintain profitability as they adjust to the new requirements. Fitch does not envisage any changes to insurers’ credit ratings driven by the consequences of the ruling.

From 21 December 2012, insurers will no longer be allowed to charge different premium rates based on gender. This has the potential to distort pricing, introducing cross-subsidies between the genders, most notably in the annuity market (GBP10-15bn of new business a year) and life protection market (around GBP1bn a year).

“Mortality/longevity is the main risk in these markets, and insurers set their prices to reflect the risk for each policyholder,” says David Prowse, Senior Director in Fitch’s Insurance team. “They currently use gender as one of their main pricing factors, given the proven link between gender and mortality. Annuity rates, for example, differ by around 10% between the genders, with women paying more to reflect their longer life expectancy. However, as a consequence of the gender ruling, annuity rates look set to fall for men and rise for women. In contrast, men may get a better deal on protection, at the expense of women.”

Insurers will now place more weight on other factors such as age and health, when pricing their business. However, Fitch expects the impact of this to be limited because age and health are already more significant pricing factors than gender, as they are stronger indicators of mortality.

Premium/annuity rates for joint-life business are unlikely to change significantly as a result of the ruling, as they typically cover one life of each gender. Most annuity business and a significant proportion of protection business is joint-life.

Annuity/premium rates vary significantly between competitors as they manoeuvre in response to market conditions and tactical positioning. Pricing impacts from the gender ruling could be blurred by these variations, and by other influences such as Solvency II, regulatory changes affecting distribution and – for protection business – tax changes.

Fitch does not expect pricing shifts between the genders to significantly affect overall business volumes in the protection and annuity markets.

“Most protection customers have a clear need for life cover, often in connection with a mortgage, and will have little option but to accept the post-gender-ruling premium rates available,” says Prowse. “The annuity market is dominated by savers converting their pension pots into a retirement income. Typically, they have little alternative, given the restrictions on how pensions savings can be accessed, so they too will largely have to accept the new rates.”

“Shifts in pricing between the genders may lead to unpredictable changes in the gender mix of the business coming onto insurers’ books, which could expose insurers to a higher risk profile than expected,” says Clara Hughes, Senior Director in Fitch’s Insurance team. “Insurers could be expected to add a loading into their premiums to reflect this uncertainty and for the cost of holding additional capital against it.”

Implementation costs arising from the gender ruling may also be passed to customers through premium loadings, to recoup the industry’s outlay on new pricing systems, for example. Some insurers may also look to make opportunistic price hikes at a time when prices generally are shifting with the introduction of the new rules.

The main area of uncertainty is indirect gender discrimination. Many risk factors used in pricing, such as occupation, have a disproportionate gender mix. The use of such factors may constitute indirect gender discrimination unless they can be demonstrated to be risk factors in their own right. Fitch expects clarity to evolve, with legal input likely to play a defining role.

Fitch analysts will be covering the gender ruling and other UK life topics in a seminar, “The UK Life Insurance Market”, on Friday 6 July. Although the event is free of charge, pre-registration is required at: http://fitchratings.nyws.com/Page.asp?ID=2338.

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