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Andy Homer has been named new Chairman of the British Insurance Broker’s Association, and will take up his new role in January 2012.

Andy has a wealth of insurance and broking knowledge with 40 years experience in the insurance industry including appointments as General Manager of Commercial Union UK (now part of Aviva) and CEO of Axa Insurance UK. Andy has also held position of Chairman of the Motor Insurance Bureau and is a past President of the Chartered Insurance Institute.

Andy Homer commented: “I am honoured to be selected for such an important role and I am very much looking forward to taking up my position as BIBA Chairman. It’s important to make a contribution to the industry and I’m pleased to have this opportunity to give something back to broking. I am determined that BIBA will continue to make an impact on the tough issues that it has to deal with and I’m planning to participate wherever possible.”

Patrick Smith, Chairman of BIBA, said: “As my time in the role comes to an end, I am delighted that Andy has agreed to take up the mantle. Andy has a wealth of broking knowledge and experience of the industry which I know he will now apply to the benefit of both BIBA’s Board and the whole Association. I’m sure he will prove to be a strong leader for the organisation and will successfully guide BIBA and its members through the challenges that face insurance brokers and intermediaries in the general insurance sector.”

Source : BIBA

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The Dutch insurance sector is stable according to ratings agency Fitch Ratings. Over the next 12 to 24 months, a large majority of Dutch insurance companies should see their ratings affirmed.

Fitch’s outlook assumes a continued, but weak, economic recovery in the Netherlands, with modest GDP growth. The outlook does not take into account potential exogenous shocks to the Dutch economy but will be updated to reflect such events if they occur.

“The Netherlands insurance market is well established, sophisticated and highly competitive,” says David Prowse, Senior Director in Fitch’s Insurance team in London. “Ratings already take into account the severe pricing pressure threatening the profitability and even the viability of certain product lines. However, ratings also reflect the ambitious cost-cutting that insurers are carrying out to bolster their profitability. Successful implementation of these measures will be essential for insurers’ prospects and is likely to be the main driver of ratings.”

The life insurance market in the Netherlands has declined sharply since 2007 as a consequence of tax changes allowing banks to compete on equal terms with insurers in the savings market. The effect has been exacerbated by a slump in insurers’ products sold through banks, as banks are increasingly promoting their own saving products. Low interest rates have also depressed profitability, particularly for life products with investment guarantees.

In the non-life sector, crucial success factors are disciplined underwriting, lower expense bases and cost-effective sales platforms. Fitch expects established insurers to develop web-based platforms in response to competition from increasingly popular internet providers.

The Netherlands has the largest private health care insurance market in Europe, with annual premiums of around EUR40bn. However, most of this insurance is, in effect, underwritten by the Dutch government, with insurers undertaking a lot of the administration associated with healthcare but taking on little risk. Profitability is driven by market presence (important for negotiating contracts with employers), scale (important for bargaining power to minimise procurement costs for health services), economies of scale, and customer service. Fitch believes the market will become increasingly competitive with the growing use of price comparison websites.

Overall, Dutch insurers look set to be well capitalised under Solvency II. Aggregate capital surplus for the Dutch market under the fifth Quantitative Impact Study (QIS5), which captures more risks than the currently regulatory capital requirements, was EUR17.5bn. This figure is around EUR7.5bn lower than under the current regime, broadly mirroring the Europe-wide trend of reporting a reduced level of surplus capital under Solvency II.

Although Dutch insurers’ earnings benefited from higher equity-market valuations and the tightening of credit spreads in 2010, in the medium term, Fitch expects profitability to be lower than pre-crisis levels as a consequence of lower interest rates and insurers’ more cautious investment portfolios.

Fitch considers that the main risks to Dutch insurers’ ratings over the next 12-24 months are failure to report sufficient operating profits, most likely caused by an inability to cut costs, and potentially unsustainable price competition. These risks are exacerbated by muted GDP growth and, for life insurers, the threat of prolonged low interest rates. However, the established insurers continue to have strong market positions and will be well placed if they succeed with their efficiency programmes.

The Dutch insurance sector is the fourth-largest in the euro zone after France, Germany and Italy with total assets in excess of EUR400bn at end-March 2011. Total premiums in 2010 amounted to EUR76.9bn, comprising EUR21.5bn for life insurance, EUR13.1bn for non-life insurance and EUR42.4bn for accident and health insurance.

As part of its forthcoming series of insurance roadshows, Fitch will visit Amsterdam on 6 October 2011. Chris Waterman, Managing Director of Fitch’s insurance team, will speak on European insurance, David Prowse will speak on the Dutch insurance market, and there will be presentations on reinsurance, US insurance and Solvency II.

Source : Fitch Ratings

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UN leader Ban Ki-moon Monday accused some big corporations of putting public health at risk “to protect their own profits” as he launched a summit on everyday diseases killing tens of millions each year.

The summit on non-communicable diseases such as cancer, heart disease and diabetes is only the second time that the annual UN General Assembly of world leaders has taken up a health issue.  But about 36 million people die each year from the diseases and the UN is predicting an explosion in the numbers, particularly in poor countries in Africa. A World Economic Forum report launched Monday said the world will spend $47 trillion over the next two decades treating the diseases.  Ban told the summit that governments had to launch prevention campaigns, but he also targeted companies who have been strongly attacked by health groups.

“I depend on our friends in industry to do what is right,” the UN secretary general said.  Ban called himself “a champion of the private sector” but said “some hard truths” must be recognized.  “There is a well-documented and shameful history of certain players in industry who ignored the science — sometimes even their own research — and put public health at risk to protect their own profits.

“There are many, many more industry giants which acted responsibly. That is all the more reason we must hold everyone accountable — so that the disgraceful actions of a few do not sully the reputation of the many which are doing such important work to foster our progress.”

Ban called upon corporations that profit from selling processed foods to children “to act with the utmost integrity.”  “I refer not only to food manufacturers, but also the media, marketing and advertising companies that play central roles in these enterprises,” he told the summit.

“Those who profit from alcohol sales have to do their part to promote moderation in alcohol consumption. And we can all work to end tobacco use.”

United Nations, Sept 19, 2011 (AFP) 

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New research from Diamond, specialist in women’s car insurance, shows that 23 per cent of a panel of 2,000 women admit to applying make up while driving. Of those 16 per cent admit to having crashed or have had a near miss as a result.

It is not just just applying make-up; women are using their drive to work to complete routine morning tasks that are equally as dangerous. Almost half (47%) have checked text messages, nearly a third (30%) have brushed their hair behind the wheel, while a similar number have eaten breakfast (34%) and drunk hot drinks (32%). As well, almost a fifth (18%) have checked their emails on a smart phone and nearly one in ten (9%) have read the newspaper.

Diamond managing director, Elwyn Gedrych said, “It’s shocking that quite so many women admit to doing these tasks while driving. We all have busy lives but applying your make-up, or checking emails, when you’re driving is dangerous as it means your full attention is not on the road ahead.

“Even if you’re lucky enough to arrive at your destination safely, you could be charged with careless driving if spotted by the police.”

Although the majority (60%) of the women who admitted to applying their make-up behind the wheel, did it when stopped in traffic or at traffic lights, shockingly one in ten (12%) admitted to applying make-up while the car is moving and 7% take their hands off the wheel completely to do it.

In fact, despite four-fifths (84%) of women who apply make-up whilst driving admitting they think it’s dangerous, more than two-thirds (41%) have done it with passengers in the car, and almost a third (30%) when children have been travelling with them.

So why are women taking these risks? For six out of ten (64%) they’re applying make-up behind the wheel because it saves them time, while one in ten (10%) said it was because they couldn’t be bothered to do before they left home.

Elwyn Gedrych continues, “It’s really not worth trying to save a few minutes in the morning by doing your make-up, or anything other than driving, when you’re behind the wheel.

“And so women never have to do their make-up in their car again, we’ve teamed up with celebrity make-up artist, Caroline Frazer to give women all the tools they need for a quicker, more efficient make-up routine before they leave the house.”

Source : Diamond

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The cost of dying has risen by 61 per cent in seven years, according to a new survey by insurer Sun Life Direct.

A lack of life insurance and planning leaves many families struggling to cover the costs involved, such as funeral arrangements, headstones and probate costs.

Families must now shell out an average of £7,248 when a loved one dies and more than a quarter of those questioned by Sun Life said they had made no plans for this.

Funeral costs seem to be among those that have increased the most sharply and the insurance firm says that these costs are likely to continue to rise and that consumers should account for this by ensuring they have life cover.

Sun Life Direct’s Head of Life Planning, Simon Cox, said, “As a nation we need a wake-up call. Our research indicates that although there is indeed openness to talking about death, action is still greatly lacking. Steps need to be taken to avert the sort of distress and concern experienced by the nearly one-in-five (100,000) people who struggle with funeral costs.”

Figures show that by 2013, 80,000 more people each year will die, which suggests that the infrastructure in place to deal with end-of-life care may need to be reviewed.

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The Office for National Statistics released figures that show a rise in unemployment (ILO measure) to 2.51 million. This must signal the Government to continue with current measures to stimulate the economy and encourage growth.

While today’s figures are disappointing unemployment remains lower than it was six months ago. The latest estimates show that the overall numbers of people claiming out of work benefits have fallen over the past year indicating that Government’s welfare reforms to get people off benefits are working.

The slowdown in the world economy and fragile financial markets across both Europe and North America is clearly having an impact on the UK economy. Ministers are confident that the private sector can continue to create jobs as it has done consistently over the last year.

The Government is determined to tackle youth unemployment, which is why Ministers have committed to increasing the number of adult apprenticeships by an extra 75,000 a year to give young people a head start in finding and keeping a job with a future.

Employment Minister Chris Grayling said:

“Today’s figures underline the scale of the challenge that we face particularly given slower growth across Europe and North America. Unemployment remains lower than it was six months ago but clearly we must continue to focus our efforts on supporting business growth and ensure that people who do lose their jobs have the best possible support to get back into employment.”

The Government is taking the steps needed to support growth and rebalance the economy, including:

– The creation of eleven new Enterprise Zones, designed to boost local growth and create over 30,000 new jobs by 2015;

– Providing real incentives for businesses to grow and create job opportunities;

– Announcing four annual reductions in corporation tax;

– Cutting the small companies rate;

– Expanding loan guarantees;

– Simplifying health and safety laws;

– Investing in science and apprenticeships;

– Promoting exports through major trade missions;

– Launching the New Enterprise Allowance (NEA) which will help up to 40,000 businesses get up and running;

– Supporting work clubs and enterprise clubs across the country;

– Reforming the Welfare State to make work pay.

We will ensure that people who lose their jobs get the best possible support available.  Our new Work Programme is now up and running across the country and will offer flexible support tailored to people’s needs to help them get into employment.

Source : Department for Work and Pensions

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A leading travel industry insurer, Vantage, has warned tour operators that they could be facing large insurance claims and some may not have sufficient excursion cover.

Gary Armstrong of Vantage, said, “Tour operators could find themselves with a very big hole in their cover and a big hole in their bottom line.” He explained that the main problem arises when tour operators face claims after people are hurt on excursions they are seen to org anise. Even if a tour operator is not the main organizer of an excursion in which someone is hurt, they may be seen to be due to their conduct.

“The problem is companies are not telling their insurer what they are doing, meaning there is potentially a gap in cover,” added Mr Armstrong, when speaking to Travel Weekly.

He added that insurers are already seeing an increase in the number of people making claims as a result of being hurt on excursions when on holiday. As a result of how travel firm reps sell excursions, the tour operators can often be seen as liable and must be insured adequately to protect themselves against these expenses. Armstrong said, “What leaflets say in resort or what a rep says can often conflict.”

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Standard & Poor’s has revised its outlook on French insurance company CNP Assurance and its guaranteed entity CNP Caution from stable to negative. At the same time, the long term counterparty credit and financial strength has been affirmed.

The outlook revision follows S&P’s assessment of CNP’s weakened stand-alone credit profile, deriving mainly from further deterioration in its capital adequacy.

The recent adverse developments in capital markets are weighing on CNP’s capital adequacy. Under Standard & Poor-s risk-based insurance capital model, CNP’s weakening capital adequacy stems from its exposure to equities, which represented about 9.3% of total investments at the end of June 2011, as well as its reliance on soft forms of capital, mainly unrealized capital gains and value in force. We also believe that CNP’s credit risk has increased so far this year mainly from its exposure to lower rated European sovereign bonds, issued for instance in Greece, Portugal, and Ireland.

The capital market turmoil is weakening the group’s earnings generation capabilities and therefore its ability to organically restore capitalization in the medium term. Still, S&P continues to consider CNP’s underlying earnings as strong–new business margins were 12.3% at year-end 2010 and 14.3% for the first-half of 2011.

The negative outlook reflects the deterioration of CNP’s capital adequacy as it faces higher market and credit risk. Together with the tough financial landscape, S&P believes these factors could slow CNP’s ability to generate earnings and ultimately delay its efforts to restore its capital adequacy. For the next two years capital adequacy will remain a rating weakness for CNP.

CNP’s competitive position is expected to remain broadly stable. While the company is improving its business mix toward more profitable products, S&P believes the low interest rate environment will weigh on financial income. The group could also hit some hurdles in sales of unit-linked products given the current falling stock markets. Consequently, new business margins are expected to remain just above 11% in 2011 and 2012. CNP’s consolidated net result will likely stand at least at €800 million (before dividends) at year-end 2011.

At this stage, the company is not expected to make any acquisitions involving large capital expenditures, which could cause capital adequacy to fall far below the current rating level.

S&P could lower the ratings if CNP posts earnings short of S&P expectations or if its capital adequacy further deteriorates.

S&P could revise the outlook to stable chiefly if CNP’s capital adequacy rises toward good levels under S&P risk-based capital model at a faster pace than what is currently expect.

Source : Standard & Poor’s

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European stock markets have closed disastrously on Monday evening. France’s CAC 40 lost 4 % while facing the spectre of the Greek sovereign debt and threats on the financial companies. Insurance companies have not been spared.

Fears of a default on Greece and a contamination of Italy continue to hover over the European markets. Monday, French CAC 40 lost 4 % to 2854 points, sunk by banking values. Moody’s has indeed threatened to downgrade some French Banks.

Societe Generale has reached its lowest in 20 years during the exchange and closed at -10.8%. The bank plans to free as much as EUR4 billion in asset sales and cost cutting which will include headcount reduction by 2013. Other banks such as BNP Parisbas and Credit Agricole have also tumbled more than 10 %.

Insurance companies have not been spared by this downfall. Axa lost 9.7 % at 8.484 EUR, Scor lost 5 % at 14.915 EUR and CNP Assurances dropped 6.24 % o 10.21 EUR.

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Societe Generale’s CEO, Frederic Oudea, has met with labour unions to discuss the bank’s announced budget cuts.

Oudea said the cost cutting doesn’t include collective layoffs in France, Michel Marchet, the representative for CGT labor union at Societe Generale told Dow Jones Newswires in a telephone interview. CGT is the largest union in the bank.

Marchet said CGT and other unions said 40 employees were fired over the past month and fear there may be more layoffs as part of the cost-cutting plans.

“We regret the bank started to yield to market’s pressure,” Marchet said, adding the bank’s situation is alright, despite a recent sell off of its shares. Shares in Societe Generale have lost more than half their value since early August.

Societe Generale plans to free as much as EUR4 billion in asset sales and cost cutting–which will include headcount reduction–by 2013. In a conference call with reporters, Oudea said the bank will lay off 2,000 employees in Russia alone.

Paris, September 12, 2011 (Dow Jones)

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The Netherlands will be near recession as 2012 closes in. This would be due to weaker exports and sluggish domestic demand, which poses a setback for Dutch public finances according to ING economists.

In a report, ING said the Netherlands will “balance on the edge of recession” in the second half as the global economic outlook is deteriorating. “Export growth is slowing down due to a decrease in world trade, and this is not offset by domestic demand,” it said.

ING expects Dutch gross domestic product to contract by 0.3% in the third quarter and foresees flat GDP growth for the remainder of the year. As a result, unemployment will rise to 5.5% in 2012, from a projected 5.2% in 2011, it said.

The report comes days before the Dutch government will present its budget for 2012. The administration is widely expected to cut its economic forecasts, which are set to be published Friday.

The Netherlands, the euro zone’s fifth-largest economy, is one of the six triple-A-rated countries in the currency bloc.

ING economist Charles Kalshoven said the gloomier outlook will pose a “setback” for the Dutch Treasury. However, he noted the negative impact will be limited, pointing at the strong fundamentals of the Dutch economy compared with debt-troubled countries in southern Europe.

“The competitiveness of the Dutch economy is good, and that is the most important factor to keep public finances healthy for the longer term,” he said in a phone interview.

The Dutch government aims to cut spending by EUR18 billion by 2015 to rein in its fiscal shortfall, which was 5.4% of GDP in 2010. Prime Minister Mark Rutte has promised no extra budget cuts for 2012. However, he has warned that additional fiscal measures may be necessary after 2012 if the economy weakens further.

For the whole year, ING forecasts the economy to grow by 1.6% in 2011, helped by a strong performance in the first half of this year. For 2012, it expects GDP to increase by 1.2%.

Amsterdam, September 12, 2011 (Dow Jones)

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Recent research form Churchill Home Insurance and Garlik, online fraud and identity experts, shows that common consumers need to be more protective with their information that is stored in laptops and smartphones. The study shows that some 40 per cent of mobile computing devices that have been lost in the last two years were not password protected.

Less than half (48 per cent) of people changed all of their passwords to online personal accounts, such as bank accounts, after their mobile computing device was stolen or lost, while over a quarter (28 per cent) did not change their passwords at all. This gives thieves a large window of opportunity.

Not having password protection could leave people vulnerable to online fraud, as many people store their personal account details and passwords on their mobile computing devices and use them for accessing financial accounts:

– 59 per cent run e-mail accounts from their portable devices

– 29 per cent of respondents said the internet history on at least one of their portable devices was cleared less than once a month

– 21 per cent said they never cleared the internet history on one or more of their portable devices

– 16 per cent store the answers to security questions on one or more mobile devices

– 14 per cent of portable device owners store bank details on portable devices, 9 per cent store credit card details, and 8 per cent PIN numbers

All of this information can be used to impersonate an individual or gain access to other information that will allow fraud to be committed.  For example, knowing a person’s PayPal or bank account number and having access to their email account could allow them to have the password resent, or reset, to something that would allow them to divert funds.  Other personal information such as address, birth city, phone numbers and date of birth were all identified as being kept on mobile computing devices and could easily be used to impersonate an individual for criminal or financial gain.

Furthermore, Churchill Home Insurance has seen the number of theft claims for computing devices and mobile phones increase from 12 per cent to 14 per cent of all home insurance theft claims over the past two years**.

From 1st September 2011 Churchill Home Insurance is offering the Garlik DataPatrol service free to all new customers until 30th November 2011, providing preventative protection for customers against identity fraud and theft when their desktop PC or mobile computing devices are lost or stolen.

Martin Scott, head of Churchill Home Insurance, commented: “Many people take out insurance to cover the cost of replacing their computer or mobile phone, but people often don’t consider the threat of online theft if their mobile computing device is stolen. Just as we would shred our bank statements and personal documents before we bin them, we should also take steps to ensure our online personal information is password-protected to guard against fraudsters. “

“The general public has to protect its digital life, not just physical devices,” said Andy Thomas, managing director at Garlik.  “Churchill’s decision to help customers take a proactive and preventative approach to protecting their personal information is exactly the kind innovation needed in home insurance.  Customers will be alerted to the risk of fraud so that it can be averted, rather than simply offered assistance for a theft or fraud after the horse has bolted.”

Garlik’s DataPatrol service works by constantly scanning the internet and information black market for information provided by customers, such as bank details, driving licence or passport numbers, essentially anything that could regarded as personally identifiable.  When this information is found the customer is immediately alerted and advised on a course of action to protect them against that information being used for illegal activity.  This could be as simple as accidentally displaying a piece of information on a social networking site, or the online sale of their credit card details between criminals.

Tips from Garlik on Smartphones and mobile devices:

– Always use the lock features of your mobile device whether a PIN, screen gesture or password.  It might be a pain to type in all the time but could save you a lot of pain if you device is lost or stolen

– Don’t save documents or notes on your device that contain the passwords/PINs for cards or online accounts with stores or banks

– Once you know a device has been stolen, acting fast is essential.  The quicker you change passwords to accounts the better. You wouldn’t think about it for two days if someone ran off with your wallet

– Learn how to clear the cache on your mobile device and do this periodically.  Some can easily be set to do this automatically at set intervals

Source : Churchill

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The Motor Insurance Bureau reveals uninsured driving hotspots. Despite the overall drop in uninsured driving in the last five years, the rate of progress to reduce the UK’s level of uninsured driving is being held back by illegal motorists in the West Midlands and West Yorkshire.

The numbers of drivers with no insurance in these regions are overrepresented by as much as 8 times the national average, putting them in the spotlight for vehicle seizure, wheel clamping, fines and prosecution.

Ashton West, Chief Executive at MIB said, “We cannot stand by and let uninsured driving continue, otherwise the honest motorist will keep paying the bills for the injury and damage caused to people and property.  We are determined to bring UK levels more in line with the rest of Western Europe and that is why the industry are committed to playing their part by making sure that motor policies are recorded on the MID, thus enabling the police and DVLA to identify vehicles that have no insurance.”

Association of Chief Police Officers (ACPO) Road Policing Lead Chief Constable Phil Gormley said:  “Overall there is good progress being made to reduce the number of vehicles being driven without insurance and today there are 500,000 fewer of these on the roads than five years ago.  There are areas of the United Kingdom however that continue to present a challenge for enforcement authorities.

“The advantage that the MID information provides is that we know where these vehicles are, and can focus our attention on areas where we have the greatest impact.”

Since 2005, police enforcement at the roadside has removed more than 750,000 uninsured vehicles and levels of uninsured driving are expected to be reduced even further with the introduction of the continuous insurance law earlier this year.  Using the MID, the police and DVLA are able to systematically identify vehicles without insurance and take action.

Since June this year registered keepers of cars, vans, motorbikes, motorhomes and trucks without insurance have received letters warning them to either take out insurance or to officially declare the vehicle off the road.  These new measures are allowing the police to be more efficient and focus their efforts on tackling the hard core of offenders and at the same time including sufficient safeguards to protect law-abiding motorists.

A map of the UK’s top 20 uninsured driving hotspots is  available to download at collateral.vuelio.co.uk/RemoteStorage/MIB/Releases/32/UKuninsuredvehiclehotspots.pdf

2010 Rank 2009 Rank Change (none, up, down) Postal district code and district name Police area Index

1

2

Up by 1

Birmingham B  9

West Midlands

7.66

2

1

Down by 1

Birmingham B 10

West Midlands

7.64

3

3

No Change

Birmingham B  8

West Midlands

6.77

4

6

Up by 2

Bradford BD 9

West Yorkshire

6.76

5

4

Down by 1

Bradford BD 3

West Yorkshire

6.35

6

7

Up by 1

Bradford BD 8

West Yorkshire

6.27

7

13

Up by 6

Birmingham B  6

West Midlands

5.73

8

10

Up by 2

Manchester M 12

Greater Manchester

5.58

9

17

Up by 8

Birmingham B 11

West Midlands

5.56

10

5

Down by 5

Birmingham B 21

West Midlands

5.29

11

19

Up by 8

Halifax HX 1

West Yorkshire

5.12

12

8

Down by 4

Bradford BD 7

West Yorkshire

4.99

13

14

Up by 1

Birmingham B 12

West Midlands

4.98

14

12

Down by 2

Manchester M  8

Greater Manchester

4.94

15

38

Up by 23

Wolverhampton WV 2

West Midlands

4.73

16

21

Up by 5

Bradford BD 5

West Yorkshire

4.58

17

58

Up by 41

Birmingham B 18

West Midlands

4.55

18

11

Down by 7

Birmingham B 66

West Midlands

4.43

19

26

Up by 7

Birmingham B 19

West Midlands

4.34

20

204

Up by 184

Romford RM20

Essex

4.23
Source: MIB Top 20 Uninsured Driving Hotspots (2008 – 2010)              2009 Rank: MIB Top 20 Uninsured Driving Hotspots (2007 – 2009)  

Source : MIB

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Aon Benfield has released its Reinsurance Market Outlook – Value Creating Capital report, which reviews major events in the year to date and highlights key considerations for insurers in the approach to the January 1, 2012 reinsurance renewals.

In its analysis of the industry, the 50-page study examines standard predictive pricing variables such as reinsurer and insurer capital, rating agency standards, and actual catastrophe losses. It also contains dedicated commentary on trends in the financial markets, insurance-linked securities (ILS), and mergers and acquisitions, as well as reviewing both catastrophe activity by sector and geography, and the 2011 reinsurance renewal periods.

The report reveals that reinsurers remain well capitalized and have the ability to continue to provide value creating capital to insurers at terms that are accretive to the earnings and capital of insurers. Reinsurers, assuming only modest additional insured catastrophe events in the balance of 2011 are likely to have sufficient capital to meet the demands of insurers globally. The influence of catastrophe model changes and related rating agency capital requirements are not expected to drive new demand for capacity in excess of reinsurers’ supply for January 2012 renewals.

For the first time, the Reinsurance Market Outlook contains insured loss estimates from Impact Forecasting – Aon Benfield’s wholly owned catastrophe model development center of excellence – for recent events, which reflect the firm’s extensive on-the-ground research and analysis.

The figures reveal that the Tohoku earthquake on March 11 is estimated to have resulted in an insured loss of between USD30-40bn (USD15-25bn net of Japanese non-life insurer and government earthquake insurance scheme (JER)) and an economic loss to Japan of USD300bn, while the sum of the New Zealand earthquakes caused approximately USD17bn in insured losses, and economic losses of USD24.8bn.

Insurer and reinsurer capital are both expected to end 2011, in the absence of significant additional catastrophe or other losses, with more capital than they held at year end 2010. Insurer capital is likely to show a more meaningful level of growth than reinsurers in 2011 despite reasonable levels of retained catastrophe losses and continued share repurchases.

Bryon Ehrhart, chairman of Aon Benfield Analytics, said: “Throughout the significant insured catastrophe events of 2011, reinsurance has once again proved its inherent ability to add value as an earnings and capital protection tool. Reinsurers provide value creating capital to insurers that desire efficient capital structures to support risk taking at competitive and accretive terms. There is still plenty of opportunity for insurance and reinsurance partners to collaborate, innovate, add more value to insureds and profit together.”

Source : Aon Benfield

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Absa Group has acquired Takafol South Africa, which is the only company offering Islamic insurance in South Africa.  The transaction amount has not been disclosed.

Islamic insurance, or takaful, makes up only one per cent of the global insurance market, but is growing as highly populated Muslim markets such as Indonesia and Malaysia turn to products compliant with Islamic law.

South Africa’s Islamic insurance market brings in about 3 billion rand ($419 million) in annual premiums, Business Day newspaper said on Friday.

Following the acquisition, Absa eventually plans to roll out Islamic insurance products elsewhere on the African continent, said Uwaiz Jassat, the Takafol South Africa executive who will head the new Absa unit.

Global takaful contributions will likely reach $12 billion by the end of 2011 from $9.15 billion last year, according to a report by consultants Ernst & Young said.

Absa is the South African bank majority owned by Britian’s Barclays.

Source : Reuters  

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Jean-Claude Trichet, European Central Bank president, urges governments to take care of their responsibilities and take act to fend off troubles in the global economy. Trichet does so backing calls from the Group of Seven leading developed economies to take concerted action to support growth.

“We shouldn’t deny the difficulties we’re facing, we’re taking ourselves our responsibilities, within the limit of our mandate and as far as monetary policy is concerned, and we’re asking that governments take theirs, with no exception…in these very challenging times,” Trichet told reporters after the meeting.

G-7 countries agreed to prop up fragile growth in the short-term while still enacting credible long-term deficit-reduction plans, as they vowed to take concerted action in a bid to calm markets, roiled by a slowdown in the global economy and uncertainties over sovereign debt problems in the euro zone.

Marseilles, September 10, 2011 (Dow Jones)

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The Office of Fair Trading (OFT) has announced it is launching a major investigation into the rising cost of car insurance.

The OFT said it is looking at whether more effective competition can be introduced into the industry to bring down prices. It is also looking into whether certain consumers are being treated unfairly.

The investigation has been prompted by figures showing that premiums have risen by as much as 40 per cent since the end of March this year.

The Association of British Insurers, meanwhile, said that members are working hard to try to bring down the cost of motor insurance for drivers. Its director general, Otto Thoresen, said, “Insurers are acutely aware of the impact that higher motor insurance premiums have for their customers.”

Mr Thoresen explained that the industry is taking a series of measures, like its campaign try to reduce “frivolous” claims and bring down “excessive” legal costs for those claiming compensation. Several insurers have been gaining through the practice of referring claimants to personal injury lawyers, thus driving up legal costs for the claimants.

The UK’s largest listed car insurer, Admiral Group, said its shares have fallen partly as a result of the announcement of the OFT investigation.

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A second US appeals court upheld President Barack Obama’s health care overhaul Thursday, but an earlier ruling against the plan means his signature reform is destined for the Supreme Court. 

The three-judge panel of the 4th US Circuit Court in Virginia ruled that suits filed by Virginia Attorney General Kenneth Cuccinelli and Liberty University did not have sufficient merit and were dismissed.

“A state possesses no legitimate interest in protecting its citizens from the government of the United States,” Judge Diana Gribbon Motz wrote for the court, regarding a first ruling in the Virginia case, which was unanimous.

A second 2-1 ruling dismissed the Liberty University suit, arguing that penalties for Americans who do not buy health insurance constitute a tax that can only be challenged after the money has been collected. The decisions marked a second judicial success for the Obama administration, but a ruling by the Atlanta-based 11th Circuit Court on August 12 went the other way, setting up the prospect of a definitive election year decision by the Supreme Court.

Senior White House advisor Stephanie Cutter praised Thursday’s ruling as “another victory for the Affordable Care Act and the tens of millions of Americans already benefiting from this landmark law.”

Obama’s landmark domestic policy achievement, which extends coverage to an extra 32 million people and will require all Americans to buy health insurance by 2014, reflects a long-held dream of Democrats.

However, Republicans strongly oppose the law, which they have dubbed “Obamacare,” as an infringement on individual liberty, and have sworn to repeal it.

Commenting on the decision, Mathew Staver, the president of Liberty University, which bills itself as the largest Christian evangelical school in the world, vowed to take the fight all the way.  “Our next step is to ask the Supreme Court to review this case. We are going to challenge the court ruling in the Supreme Court,” Staver said, adding that the case could be filed as early as October.

Legal experts say the reform’s fate will ultimately be decided by the US Supreme Court, likely around June 2012, but the complaints against the law’s constitutionality have yet to reach the highest court in the land.

Last month the Eleventh Circuit appeals court, based in Atlanta, Georgia, ruled that the law’s individual mandate exceeded Congress’s powers. The Sixth Circuit in Cincinnati, Ohio, however, upheld the law on June 29, the first ruling at the appeals court level in the hotly contested legal battle.

The White House argues that those who choose not to buy insurance in the US private medical system hurt everyone else, because taxpayers end up subsidizing their care when they are taken to emergency rooms.

It also justifies the individual mandate by saying that without it, people would wait until they get sick to apply for coverage, which would cause insurance premiums for everyone to rise.

Republicans see the health care law as an unacceptable intrusion by government into individual freedoms. Rick Perry, the conservative Texas governor who is the current frontrunner in the Republican race for the 2012 presidential nomination, has described the law as an “egregious violation of our constitutional rights.”

Though the health care law is one of Obama’s most significant achievements, its controversial nature means he has reaped little gain from a victory that required a huge investment of political capital.

A CBS News poll taken in June found that 37 per cent of those asked approved of the health care law, while 48 per cent opposed it.

Washington, Sept 8, 2011 (AFP)

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The RMS report, ‘Terrorism Risk in the Post-9/11 Era’, highlights that the global terrorism threat in the last decade has become more diverse, and more dispersed, but no less deadly. Since the attacks of 9/11, there have been more than 2,400 macro terrorism attacks (defined as attacks with the minimum fatalities of twenty people) committed in more than 40 countries worldwide. While the Middle East and South Asia regions are still the epicenter of the threat, terrorist attacks extend far beyond these areas. This dispersion of threat is largely due to the activities of Al-Qaeda and its diverse affiliates within the Salafi-jihadi movement.

Since the 9/11 attacks, the way terrorism risk is managed has also evolved. “Over the last decade, the insurance industry has become much more comfortable using loss models to manage terrorism risk. Insurers are managing accumulations using realistic scenarios and event-specific footprints to monitor exposure across multiple lines of business,” commented Peter Ulrich, senior vice president of emerging risk solutions at RMS.

Probabilistic models – similar to those used to understand natural catastrophe risk – are also gaining traction. Today, the wealth of research and development on terrorism risk has also enabled probabilistic terrorism models to shift from a reliance on expert opinion to an objective methodology to assess the terrorism threat.

The report brings together RMS’ terrorism modeling experts to share their perspectives on the evolution of the terrorism threat, its impact on the insurance industry, and the future of terrorism risk; and discusses the tools and best practices that help insurers manage this risk in a post-9/11 era. Key issues covered in the report are as follows:

– The post-9/11 global terrorism landscape  –  a review of how  the global terrorism landscape has evolved since 9/11, analyzing terrorism patterns, themes, and trends

– Evaluating the Al-Qaeda threat to the U.S. since 9/11 – an outline of Al-Qaeda’s CBRN development efforts in the last decade and the probability of Al-Qaeda launching a successful attack today

– The post-9/11 U.S. counterterrorism landscape – U.S. homeland security initiatives and how the U.S. counterterrorism landscape may change in the future

– Modeling terrorism frequency – an overview of frequency modeling and its underlying methodology to illustrate how frequency estimates can be robustly modeled

– Quantifying and managing terrorism risk – the evolution of terrorism risk management and how approaches to underwriting and managing terrorism risk have evolved since the 9/11 attacks

Source : RMS Press Release

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The introduction of seven new products and the use of IFAs have both been identified as factors that enabled PruProtect to deliver a £2.2 million profit in the first half of 2011.

The new products, which have proven so popular, include whole-of-life cover, education cover and the introduction of “vitality” point for customers who have healthier lifestyles.

PruProtect also claims its use of independent financial advisers has helped it to expand its footprint over the UK. Hershel Mayers, who heads up PruProtect, commented: “Our new products have gone exceptionally well, with 31 per cent of new business coming from them. For a young company to turn significant earnings over that period is impressive, in tough economic times.”

IFAs have boosted the firm’s performance considerably, with an average of 250 new referrals through this rate each day, averaging at £650 each. Not surprisingly, Mayers said that the firm will continue to focus on distribution through IFAs in the future.

Mr Mayers said that IFAs should consider the insurance industry as a major potential source of business. He explained, “Protection is undersold in this country and has not been popular, particularly in light of the payment protection insurance scandal. But there is a definite need for it.”

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