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Macmillan Sheikh has launched two further schemes to provide a broad range of insurances to both the cleaning industry and tour operators.

The scheme for the cleaning and support services industry will be administered by Macmillan Sheikh. It offers a broad range of cover including, but not limited to, public liability and products liability, employer’s liability and financial loss.

The tour operator scheme will also be administered by Macmillan Sheikh. The comprehensive package includes public liability; professional indemnity; legal expenses and employers liability. The tour operator scheme is arranged on a bespoke basis, tailored to meet the needs of individual clients.

Both schemes offer a range of additional extensions plus broker commission levels and upper policy limits that are highly competitive.

Lord Sheikh commented: “I am delighted to announce the launch of two further schemes which will provide protection for tour operators and companies in the cleaning and supporting industries. While these are new areas for Macmillan Sheikh they are by no means new to myself and the management team who have long-standing experience and relationships with both industries. The schemes have been designed to provide superior protection to clients by offering higher limits than is standard in the market. However, they have also been created with consideration for brokers in the tough current economic climate by offering generous levels of commission.”

Source : Macmillan Sheikh

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Australia plans the world’s toughest laws on  tobacco promotion but Health Minister Nicola Roxon denied Sunday the  government’s ultimate goal was a complete ban on smoking.    Under proposed legislation, due to take effect next year, all logos will be  removed from cigarette packets, which must be a drab olive-green colour and be  plastered with graphic health warnings.

The big tobacco companies have vowed to fight the move in the courts.

Anti-smoking advocates were quoted in the media Sunday as saying a smoking  ban could be a reality within 10 to 15 years, but Roxon said that was not part  of her agenda.    “No, I don’t think it is,” she told the Ten Network’s “Meet the Press”  programme when asked if a complete ban was where she was ultimately heading.

“I think what is logical about it is if tobacco were a brand new product  today, seeking to come on to the market, and we knew about tobacco what we  know now, it would not be a legal product.

“But the truth is that it has been a legal product for many, many  years.

“We’re trying to make sure that we tackle the last remaining  method that tobacco companies use to market their products.     “We know it is successful in marketing their products, because we know that  they are determined to stop it and they are very fearful about what it will do  to their business.

“We know it affects their profits. It means it is good to reduce the number  of smokers. That is the public health aim we have.”

Mike Daube, president of the Australian Council on Smoking and Health, told  the Melbourne Age newspaper public support for banning tobacco was growing.

“The way smoking trends are going, it’s not unrealistic to think that we  should see an end to the commercial sale of cigarettes within 10 to 15 years,”  he said.

Around 15,000 Australians die of smoking-related diseases every year, with  tobacco use costing the country Aus$31.5 billion ($32.9 billion) annually in  healthcare and lost productivity.

Smoking in prohibited in virtually all enclosed public places in Australia,  such as pubs, restaurants and workplaces.

Sydney, May 22, 2011 (AFP)

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Fitch Ratings has affirmed Prudential Plc’s (Prudential) Long-term Issuer Default Rating (IDR) at ‘A+’ and senior unsecured debt at ‘A’. The agency has also affirmed Prudential Assurance Company Ltd’s (PAC) Insurer Financial Strength (IFS) rating at ‘AA’. At the same time, Fitch has affirmed the IFS ratings of Prudential’s US subsidiaries Jackson National Life Insurance Company and Jackson National Life Insurance Company of New York (collectively, JNL) at ‘AA’. The Outlooks on all of the group’s Long-term IDRs and IFS ratings are Stable. A full list of ratings actions is at the end of this comment.

The affirmation reflects Prudential’s very strong and resilient capital position, operational scale and strong business position in each of its key markets: the UK, the US and Asia. Prudential has strong cash generation and a strategy focussed on high-margin products with short pay-back periods.

Partially offsetting these positive rating factors is the company’s relatively high exposure to credit risk, longevity risk and adverse policyholder behaviour risk. This exposure includes the rapidly increasing variable annuity business in the US, which contributed to the downgrade of the group’s ratings in October 2010. While Fitch recognises JNL’s track record of pricing discipline, effective risk hedging on this business through economic cycles and the recently announced measures to further manage the growth of its variable annuity book, it nevertheless views such rapid sales growth as negative from a credit perspective.

“Prudential has a large backbook of UK policies that are highly cash generative,” says Clara Hughes, Director in Fitch’s Insurance team. “However, the future profile of the group will be increasingly driven by the growing business in Asia and US variable annuities.”

Asia and the US accounted for 74% of the group’s sales in 2010. Prudential has a strong track record and a diversified portfolio but a key factor in the group’s future profitability is the emergence of future profits in line with current assumptions in Asia and the US as the business matures. “In Fitch’s view, the main risks to profitability are risks from underperforming hedges and adverse policyholder behaviour on US variable annuities, and increased pricing competition and higher policyholder surrender rates in Asia,” say Hughes.

Factors that could lead to a downgrade of Prudential’s ratings are the crystallisation of credit risk, longevity risk, adverse policyholder behaviour, or if leverage increases or interest coverage falls below 5-6x. An upgrade is unlikely in the near term. However, the rating could be considered for an upgrade if, over an extended period, the company demonstrates sustainable, strong earnings across all geographical regions with sustained capital strength and lower financial leverage.

Fitch views JNL as ‘core’ to the Prudential group (as defined in “Fitch’s Approach to Rating Insurance Groups”, dated 14 December 2010 and available at www.fitchratings.com) and is factoring group support into JNL’s ratings, which would be lower on a standalone basis.

Prudential has the joint-highest IFS rating among European insurance groups. Its ratings continue to reflect its excellent capitalisation and profitability, and its geographical diversification with particularly strong market positions across Asia.

Source : Fitch Ratings

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Consumers could lose out on over £2bn in Payment Protection Insurance (PPI) redress by going to claims management companies (CMCs).

With an average payout of £2,750 for mis-sold PPI and CMCs taking as standard a 25% cut as their fee, consumers could pay £825 each for something they could easily do themselves.

What’s more, people who claim back PPI sold with a loan could find themselves owing money to their CMC, even in the event of a successful claim. If the loan is still being repaid, redress often comes in the form of a reduction of the outstanding balance leaving the consumer to pay the CMC’s fee out of their own pocket.

Which? is calling on consumers who think they may have been mis-sold PPI to complain to their bank themselves and has created a free online PPI complaints tool – www.which.co.uk/ppiclaim – to make the process easier.

The consumer champion is also urging any consumer whose bank rejects their complaint to go to the Financial Ombudsman Service (FOS), which is independent and free to use.

Which? is calling on banks to drastically improve their complaints handling, reducing the burden on the FOS and the proportion of PPI complaints it upholds in favour of the consumer.

Which? chief executive Peter Vicary-Smith, says:

“Anyone who thinks they may have been mis-sold PPI should complain directly to whoever sold it to them. By going to a claims management company, you’ll pay what could be a lot of money for something you can easily do yourself. If your bank rejects your complaint, always go to the Ombudsman – most complaints about PPI are upheld in favour of the consumer.”

Which? has joined forces with Barclays to launch a national public awareness campaign to help consumers avoid the pitfalls of CMCs and instead use Which?’s free online PPI tool to guide consumers through the complaints process.

Deanna Oppenheimer, Chief Executive of Barclays UK Retail Banking, says:
“We are firmly focussed on resolving complaints from our customers as quickly as we can and we are pleased to partner with Which? in this effort.”

Source : Which?

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U.S. health insurers will have to justify big premium rate hikes under new rules issued by the U.S. Health and Human Service Department on Thursday.

Starting in September insurers will have to publicly post proposed rate increases for the small group and individual markets. Any increase of 10 percent or more will have to undergo review by independent experts at the state or federal level, the agency said.

The rules were called for under the healthcare overhaul signed into law last year. HHS Secretary Kathleen Sebelius said they will provide greater scrutiny of health insurance premium rises at a time insurers are demanding premium increases even as they enjoy lower costs and huge profits.

“Health insurance companies have reported some of their highest profits in years and are holding record reserves,” Sebelius told reporters on a conference call.

“Even though insurers are seeing lower medical costs as people put off care and treatment in a recovering economy, insurance companies continue to raise their rates. Often these increases come without any explanation or justification,” she added.

Results of reviews will be posted on the agency’s Internet site and insurers will be required to post that information on their sites as well, she said.

While federal regulators cannot set health insurance rates, Sebelius said a growing number of states have this authority.

Sebelius said shining a light on rate increases can be effective in reining in big rate increases and can help consumers shop for affordable coverage.

Sebelius noted events in California last year where WellPoint Inc’s Anthem unit came under public scrutiny after it planned to increase rates as much as 39 percent.

Sebelius said her agency was working closely with states to undertake the review process. HHS will take over in cases where a state does not take up the responsibility.

The 10 percent threshold will be replaced in September 2012 by a state-specific threshold that takes into account trends in a state’s healthcare market.

Steve Larsen, director of HHS’s Center for Consumer Information and Insurance Oversight, said the current rule applies only to the individual and small group market but that the agency was seeking comment on applying the rules to groups that purchase coverage through associations.

Source : Reuters

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Should investors revise their commodity positions in the light of market movements in recent weeks? This depends on the reasons for investing and involves making a judgement call on whether the falls represent a short-term correction or a reversal in trend.

If commodities were chosen in order to diversify risk, the sell off provided a useful reminder of the inherent volatility of the asset class and its close relationship with other risk assets. In fact, commodities have been positively correlated with equities since 2008, both influenced by investors delivering and demand destruction in the slowdown. Commodities and equities are further entwined because of shared currency influences.

Investors need to pay attention to the information that can be gained from commodity markets, even if not investing directly. It is difficult to generalise across the asset class because there are distinct groupings in commodities – precious metals, industrial metals, energy and agricultural commodities – which move in different directions for different reasons. The physical commodity markets for industrial metals, for example, can provide information about the state of the global economy. Gold prices are based more on sentiment, representing a safe-haven against uncertain equity markets, political risk or US dollar weakness. There are also influences affecting individual commodities. If individual commodity markets are trading together it should flag that the asset class is not trading wholly on fundamentals. This could be because sentiment and speculative influences are dominant.

Bubble characteristics vary considerably between individual commodities. The extent of recent falls in certain commodities, such as silver, in response to five increases in collateral requirements in the space of a few months, suggest that there was substantial speculative element in the price, particularly as the supply and demand fundamentals had not changed significantly in the space of a few days. Similarly, the speculative component in the oil price has been estimated as high as $30, coupled with new evidence of high inventory levels, a correction was on the cards. This means that investors also have to watch what the speculators (often the big investment banks or hedge funds) are doing or saying about commodities. If they change their bets, the price could move substantially.

Commodities carry no income stream so investing directly is a bet on future price appreciation. If this is done using futures there are costs associated with rolling from one contract to the next so the price movement would also have to compensate for this. Standard Life Investments prefers to invest in sustainable yield, so the lack of income is a serious drawback; we would look for other ways of investing, using either stocks or commodity-related currencies, to exploit gains from commodities. Another route is to invest in the technology or means of production rather than the commodity itself. Examples would include investing in fertiliser or irrigation rather than agricultural commodities, or investing in geophysical surveys or oil services or even in the companies that make the huge tyres used for mining trucks.

In the medium term there are good reasons for taking a constructive view of commodities. Among the more interesting are those in short supply that have a role to play in the future, for example platinum and palladium, which are used in catalytic converters for petrol and diesel engines, respectively, to make them more energy-efficient. The less interesting ones are those where supply is abundant, there are alternatives that can be used and the value they add is limited. This includes some of the industrial metals.

Tight markets today may be more indicative of speculative involvement than physical supply and demand conditions. In that case, investor psychology can be used to second-guess the big market players either by following their lead (trading on momentum) or betting against them (contrarian belief that markets will correct towards fundamental value). Alternatively, investors can stand back and monitor commodity markets to glean information from them while investing in related stocks or commodity-related currencies to secure an income stream that will provide at least a partial hedge against future falls.

Source : Standard Life

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The much appreciated 70’s disco song ‘YMCA’ is the soundtrack to the latest Confused.com advert “Con-Fused -Dot-Com” featuring animated logo Cara.

The new thirty second advert, focusing on car insurance, will launch on Sunday 22nd May, with its peak spot taking place during the new ITV 1 drama ‘Vera’.

The new Confused.com advert is once again voiced by Louise Dearman who plays the lead in the popular West End hit musical, Wicked.  Animated and produced by Hornet, with musical arrangement from Speckulation entertainment, the advert will feature living logo Cara singing the catchy anthem before being joined by a lively backing group of animated singers and dancers.

Mike Hoban, Marketing Director at Confused.com, said: “Confused.com is the UK’s first price comparison site and this advert is an entertaining way to remind people how easily they can save money on household bills.

“The new series of adverts have been so successful that Confused.com has added more than 2 million customers since the campaign launched.” He added

In addition to this thirty second car insurance advert, a thirty second advert focusing on home insurance and a sixty second brand advert are also launching. The new thirty second car insurance “Con-Fused-Dot-Com” advert can be viewed on confused.com/cara from 22nd May.

Confused.com is also unveiling a new thirty second radio advert on 1st June in the London region only.

Source : Confused.com

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The chief executive of Assicurazioni Generali said talks on an alliance with Russian bank VTB were at an advanced stage.

“Our priority is to make an insurance accord (with VTB). We are discussing it and we are in a rather advanced stage, Giovanni Perissinotto told reporters on Wednesday.

Italy’s largest insurer has been looking at Russia as part of its expansion into central and eastern Europe and other emerging markets, including Asia, in a strategy favoured by financial markets.

The venture with VTB, Russia’s second-biggest lender, would not only be for bancassurance — sales of insurance via bank branches — but a partnership allowing distribution through various channels, he said, adding Generali would like a 51 percent stake in the joint venture.

Cross-shareholdings between Generali and VTB are not required, he said. “It makes us feel good that an important, well-managed group like VTB shows interest in our shares, but we are not looking for cross-shareholdings.”

Generali took a 1 percent stake in VTB this year. VTB chief executive Andrei Kostin told Reuters on Tuesday he was interested in buying a sizeable stake in Generali.

Source : Reuters

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Fitch Ratings has upgraded Eurco Re Limited’s Insurer Financial Strength (IFS) rating to ‘BBB+’ from ‘BBB’. The Outlook is Stable.

The upgrade reflects Fitch’s view that ongoing uncertainty regarding the business rationale for Eurco Re has reduced. Furthermore, the position of Dexia Insurance Belgium (DIB) within the Dexia Group (‘A+’/Stable) is also viewed with more certainty, reflecting its clarified position in Dexia’s business strategy. Fitch previously downgraded Eurco Re’s rating due to concerns about these points. Eurco Re’s Stable Outlook reflects that held on the Dexia Group.

The rating factors in group support, which Fitch believes would be made available at the DIB level and, if required, by the wider Dexia Group: reflecting the importance of Eurco Re to DIB. An offsetting factor to the rating continues to be the company’s small scale, limited diversification and a high reliance on business coming from DIB. Consequently, the current IFS rating is some way above the rating derived from Eurco Re’s standalone financial profile. Fitch considers that the 2010 financial positions of Eurco Re and that of its immediate parent, DIB, have not changed materially.

Eurco Re’s Fitch-assessed capital and the reinsurer’s consistent profitability are viewed positively although these factors are less material to the rating. Profit after tax was EUR14.9m for 2010 compared with EUR12.4m in 2009. Fitch expects any growth to be organic, stemming largely from the Dexia franchise, with limited prospects for third-party growth.

Eurco Re’s ratings could be upgraded if the rating of Dexia itself was to be upgraded or if Fitch were to view Eurco Re as substantially more important to DIB. Conversely, Eurco Re’s ratings could be downgraded if Dexia were to be downgraded or if Eurco Re’s level of importance to DIB were to decline.

Eurco Re is based in Dublin and licensed by the Central Bank of Ireland to operate as a reinsurance company. It is a fully controlled subsidiary of DIB. DIB is the main entity of Dexia Group’s insurance business. DIB and its subsidiaries contributed around EUR211m to Dexia group profits in 2010.

Source : Fitch Press Release

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The new Continuous Insurance Enforcement regulations create a new offence for keeping a vehicle without insurance.

From Spring 2011, an additional enforcement scheme is being introduced to make sure that all vehicles are insured or a Statutory Off Road Notification (SORN) is made.

All registered vehicle keepers must ensure that their vehicle has the statutory minimum third party motor insurance – failure to comply could result in a series of escalating penalties. Furthermore, if their insurance record does not show on the Motor Insurance Database (MID), keepers of legitimately insured vehicles are at risk of receiving notification that they appear to be uninsured.

This is a fundamental improvement to current practice (previously an uninsured driver needed to be ‘caught’ on the road to face enforcement measures) therefore BIBA is keen to raise awareness of how this will affect insurance intermediaries and what they should do to help existing and potential customers stay compliant.

It is estimated that around 1.4 million of all UK motorists drive uninsured. These drivers cost the UK about £500 million annually, which adds up to an average cost of an extra £30 per car insurance policy.

The police currently seize around 500 uninsured vehicles every day, but much more needs to be done to help identify and combat uninsured driving even further.

CIE differs from existing police on-road enforcement of uninsured driving in that, unless a SORN declaration has been made by the vehicle keeper, the keeper is required to insure the vehicle at all times.

How does CIE work?

CIE systematically compares records between two databases, the Motor Insurance Database (MID) managed by the Motor Insurers’ Bureau (MIB) with those held on the DVLA Registered Vehicle Database to indentify keepers of potentially uninsured vehicles.

This will clearly identify any vehicle keepers who do not have a valid insurance policy on the MID.

If it appears that a vehicle has no insurance or no SORN, than an Insurance Advisory Letter (IAL) will be sent to the registered keeper.

If the registered keeper takes no action, the keeper faces:

– a fixed penalty fine of £100

– having the vehicle clamped, seized and destroyed

– court prosecution and be fined up to £1,000

Starting in spring 2011, the MIB will issue and cover the cost of the new IAL’s to registered keepers informing them that their vehicle appears to be uninsured. The letter will advise the keeper what they need to do to comply with the law and will result in hundreds of thousands of letters being sent to vehicle keepers, some of whom may be insured but have not had correct details loaded onto the MID. These could result in calls to broker’s offices.

DVLA will be responsible for the cost of enforcement, which will take the form of Fixed Penalty Notices (FPN) followed by the possibility of prosecution and/or wheel clamping should the vehicle’s keeper fail to heed the warnings. The cost of enforcement will be more than covered by fine income and is due to commence a short while after the first IAL’s are distributed by MIB.

What is the insurance industry telling customers?

If you are not insured and use your vehicle on the road you are already committing an offence – get insured immediately.

If you are insured and your record does not appear on the MID , then you should contact your insurance provider to get the MID updated immediately. This will avoid the inconvenience of you being unnecessarily contacted by MIB and DVLA, or being stopped by the police.
Check the Motor Insurance Database for FREE to see if you have a valid insurance record – www.askmid.com

If you are keeping your vehicle off the road, make sure that you have submitted a SORN declaration to DVLA. If the vehicle is taxed you need to return the disc (including nil value discs) to DVLA using a V14 form.
When you insure your vehicle, make a point of checking the MID to see if your vehicle is recorded correctly. Although most insurers process the information promptly its best to allow say a week for this to update.

Preventing customers from receiving an IAL in error

It is essential that insurance brokers are aware of their responsibilities. The most important thing that can support customer is to update the MID in a timely and accurate manner. This will mean they should not receive an IAL in error in the first place.

Within the motor trade and motor fleet sector there is a potential issue as certificates of insurance are often issued on a blanket basis, rather than to a specific Vehicle Registration Mark. (VRM) There is a risk of reputational damage if an IAL letter is received by one of your customers in error because their details have not been updated or have been registered incorrectly on the MID.

CIE will have huge benefits to the insurance industry as long as it is carried out effectively, so it is vital that commercial insurance brokers play a role in advising their customers ahead of the change and work closely with insurers to ensure MID compliance.

BIBA, the MIB and DVLA have produced FAQ’s for brokers (these can be viewed on the BIBA Website)

Advice in  renewal letters

Insurance are communicating the CIE messages to customers wherever possible. An important place is the broker’s renewal letter. BIBA and the MIB have prepared this draft wording which many will use in their renewal letter.

“From spring 2011 a new scheme is being introduced to make sure that all vehicles are insured or a Statutory Off Road Notification (SORN) is made.

“All registered vehicle keepers must ensure that their vehicle has the statutory minimum third party motor insurance  – failure to comply could result in a fine (fixed penalty notice), wheel clamping or court prosecution. You can check if you are on MID at www.askmid.com”

Conclusion

CIE is an important change to the motor insurance landscape. This change must be communicated to customers. Brokers, must maintain the correct MID record on behalf of their customers as MIB will be sending tens of thousands of IAL’s a month. CIE benefits will include safer roads, greater premium income for the insurance industry, a reduction in the number of claims made to the MIB, a reduced levy to insurers and an increased IPT income to government.

If you have any queries please contact Graeme Trudgill, BIBA’s Head of Corporate Affairs at trudgillg@biba.org.uk or 0207 397 0218 or check the BIBA website.

By Graeme Trudgill, Head of Corporate Affairs, BIBA

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Dutch insurer Aegon on Thursday published a  12 percent drop in net profit for first quarter 2011 from the same period last  year, linking it to increasing life expectancy in the Netherlands.

The company showed a net profit of 327 million euros ($463 million), down  from 372 million euros in the first quarter of 2010. The result clocked in lower than predicted by analysts polled on the Dow  Jones newswires, who banked on a net profit of 335 million euros.

“In the Netherlands we have observed a strong increase in life expectancy,”  Aegon’s chief executive Alex Wynaendts said in a statement.

“A growth in life expectancy means we have to pay pensions for longer as  part of our pension-saving schemes,” Aegon spokesman Dick Schiethart told AFP.

Life expectancies in the Netherlands were 78.8 years for men and 82.2  years for women in 2010, according to the national Dutch statistics office. By 2020, this is expected to climb to 80.64 years for men and 84.05 years  for women, the statistics office added.

In the first quarter of this year Aegon took out a provision of 24 million  euros for longevity in the Netherlands and planned to add an average of 20  million euros per quarter to the provision, it said.

“(We) are taking a prudent approach by now increasing our provisioning  which will have an impact on the earnings of our Dutch business going  forward,” added Wynaendts.

Aegon, which received three billion euros from the Dutch government amid  the global financial crisis in October 2008, hopes to repay the outstanding  figure of 1,75 billion euros by the end of June.

The sale of Transamerica Reinsurance, the company’s US-based division, in  April for 630 million euros, “supported our aim” to repay the Dutch government  “by the end of June,” Wynaendts stressed.

Aegon’s turnover in the first quarter came to 1,411 billion euros — a two  percent slide from the same time last year while new life insurance sales  clocked in 501 million euros against 503 million euro last year.

Aegon has more than 40 million clients, mainly in the Netherlands, the  United States and Britain. It holds the pensions of a quarter of Dutch  citizens.

The Hague, May 12, 2011 (AFP)

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The British Insurance Brokers’ Association has named Alexandra Dredge of Thomas Carroll (Brokers) as its national Young Broker of the Year, and John Foster of Foster Leighton as winner of the Francis Perkins Award.

Hannah Bell of Jelf Insurance and Jillian Hollywood of Autoline were named as national finalists in the young broker award which recognises the performance of younger brokers and encourages commitment to the future professionalism of insurance broking.

Alexandra was named as winner of the award because of her outstanding achievement for Thomas Carroll (Brokers) and her ability to go ‘the extra mile’ to win business and help growth.

Both awards were presented at BIBA 2011 on the afternoon of Wednesday 11 May, just prior to BIBA’s second keynote speaker, Ed Stafford, where John Foster of Foster Leighton & Co Ltd was also named winner of the 2011 Francis Perkins Award due to his long standing commitment over many years for the West of England region.

John has held many positions on various committees since joining BIBA in 1977 and was selected for the award, which was instigated by BIBA’s first Chairman, in recognition of his longstanding dedication to the furtherance of the Association.

BIBA Chief Executive, Eric Galbraith said: “I was delighted by the high calibre of the entries that we received for the two awards and I’m honored to be able to recognise both an experienced and valued member alongside tomorrow’s stars of insurance broking.”

Source : BIBA Press Release

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In his opening address at BIBA’s 2011 Conference in Manchester, Eric Galbraith, BIBA’s Chief Executive, called on HM Treasury and the new Financial Conduct Authority (FCA) to work together towards delivering the right regulation for insurance brokers. Galbraith called for “regulation that is appropriate and proportionate to the low risks that we pose”.

As part of his call, Galbraith recognised the political pressure for regulatory change but emphasised the importance of this not resulting in detriment to the appropriateness, proportionality and cost of any regime for insurance brokers.

Galbraith outlined that change was needed specifically relating to the unfairness of the current regime and that a more prescribed approach was required on areas like capital requirements and adequate resources.

Galbraith then turned to the need for change to the “totally flawed” structure of the Financial Services Compensation Scheme (FSCS) and demanded that the new rules be in place by April 2012, in time for the next financial year.

He outlined the need for a model which separates the professional insurance broker from other sellers of general insurance and removes the cross-subsidy, and reminded members to sign the BIBA petition on this issue by the 20 May deadline.

Galbraith also announced that BIBA had begun a series of meetings with insurers to seek a market solution to the handling of premiums.  He said that protection of client money was one area that BIBA’s recent regulation research highlighted as a significant risk.

He told brokers: “We have detected an appetite amongst the insurers to help find a solution, where monies can be held on a risk-transferred basis, outside of FSA rules, giving insurers, the regulator and customers comfort about the protection of money.

“I would urge you all to get behind this move and support us in our efforts to try to achieve a secure and simpler solution to client money.”

BIBA’s conference and exhibition is being held in Manchester Central on 11 and 12 May and is free to all BIBA members.

Source : BIBA Press Release

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The biggest European insurance  group, Allianz, Thursday stuck with its full-year forecast even though first  quarter results were hit by a triplet of Asian disasters.

Net group profit fell by 45.2 percent to 857 million euros ($1.2 billion),  the insurance company said in a statement that added to provisional figures  released last week.

“Despite the difficult operating environment Allianz remains on track to  reach its operating profit target for 2011 of eight billion euros, plus or  minus 0.5 billion euros,” Allianz said.

Finance director Oliver Baete was quoted as saying that “for Allianz, the  past quarter took one of the hardest hits from natural catastrophes of any  quarter in the last two decades.”

In addition to the March 11 earthquake and tsunami in Japan, the group was  exposed to losses from devastating floods and a typhoon in Australia in  January and February, and an earthquake in New Zealand in late February.

It faced costs from those catastrophes of 737 million euros in the three  month period, roughly one third more than in the same period of 2010.

First quarter sales fell by 2.2 percent to 29.9 billion euros and Allianz’s  operating profit was 4.2 percent lower at 1.66 billion euros.

Insurers and re-insurers worldwide have told a similar story as the string  of disasters slammed first quarter results.

In Japan alone, the government has estimated that direct damage from the  9.0-magnitude earthquake and tsunami, which also triggered the world’s worst  nuclear accident since Chernobyl 25 years ago, could reach $300 billion.

Frankfurt, Germany, May 12, 2011 (AFP)

 

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A new survey from Aon Hewitt found that after years of market turmoil, pension plan sponsors are shifting their asset allocation away from domestic equities in favor of liability-matching investments in an effort to reduce plan volatility.

Aon Hewitt’s survey of 227 large U.S. employers, representing $389 billion in total assets revealed that in 2010, 38 percent of sponsors reduced their exposure to domestic equities and the same percentage expects to do so in 2011. Just 4 percent expect to increase domestic equity exposure. Plan sponsors are primarily shifting assets to liability-matching investments with long-duration corporate bonds as the asset of choice. Nearly a third (32 percent) of plan sponsors expect to increase allocation to long-duration bonds and 24 percent expect to increase allocation to other corporate bonds, while just 13 percent expect to do so for government bonds.

“Once just a strategic idea without much traction, liability-matching investments continue to grow as a proportion of plan assets,” said Ari Jacobs, retirement strategy leader at Aon Hewitt. “Regardless of the future direction of equity and bond markets, this shift should bring less volatility and greater predictability to pension plan costs.”

Aon Hewitt’s report also showed that static investment policies are giving way to dynamic investment policies, or “glidepaths,” that incorporate plan-specific objectives, such as funded status, to mitigate pension risk. By 2010, more than one-in-five sponsors had already adopted some form of dynamic investment policy, up from 15 percent in 2009. Fully 29 percent of sponsors expect to be operating some form of dynamic policy in the next year.

According to the survey, glidepaths have become an increasingly attractive strategy for a few reasons. Most plan sponsors (78 percent) view glidepaths as a sensible way to reduce risk as their plans’ funded status improves, and 42 percent feel they are an appealing way to take the emotion out of de-risking decisions. Additionally, 33 percent say glidepaths offer the potential to reduce long-term plan costs.

“Most sponsors believe that their plans should take on less risk as they reach full-funded status,” explains Jacobs. “These sponsors find glidepaths compelling because they translate this view into investment policy. Additionally, we believe that this strategy is a smart way to harness market volatility for the benefit of the plan and the sponsor, because glidepaths can potentially reduce cost even as they reduce risk.”

As more plan sponsors have turned to glidepaths to manage pension risk, fewer are making fundamental changes to their plan design. While a majority of plans (61 percent) are already closed to new entrants, many U.S. plan sponsors continue to accrue benefits for at least some portion of their workers. Just under a third (32 percent) of plan sponsors now report frozen plans, up slightly from 30 percent in 2009, and only 16 percent believe a freeze is likely in the future.

“As funding levels continue to creep up from the dangerously low levels we saw in 2008 and 2009, we see the attitudes of plan sponsors shifting,” said Cecil Hemingway, global head of retirement at Aon Hewitt. “Confusion and anxiety have faded, and most sponsors are making substantial changes in the management of their retirement programs.”

Other Key Findings

– One-in-five plan sponsors raised their global equity exposure in 2010, compared to just 13 percent that lowered this exposure. Roughly equal proportions expect to raise and lower this exposure in the next 12 months.

– Nearly 20 percent of plan sponsors raised exposure to alternative asset classes, while only 10 percent lowered exposure in 2010. Nearly one-in-five (19 percent) expect to raise exposures in this category in 2011, just 8 percent expect to lower exposure.

– Sixteen percent of plan sponsors are very likely to implement longevity-hedging strategies, 10 percent have already done so.

– Nearly one-third (32 percent) of pension plan sponsors have already delegated the full responsibility for the implementation of their investment policy, or are very or somewhat likely to do so in the future.

Source :  Aon Hewitt Press Release

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MMA Insurance has appointed Derek Bradshaw as Development Manager, to drive commercial growth through broker partners.

Derek joins MMA from Ecclesiastical Insurance where he was Business Development Manager across central England. He has more than 20 years’ experience in insurance including 18 years with Aviva, where he worked extensively with provincial and national brokers and successfully conducted renewal retention programmes and affinity schemes.

In his new role, Derek will build and maintain broker relationships and deliver strategic business plans for MMA. He starts immediately and will report directly to Claire Ephgrave, MMA’s UK Business Development Manager.

Commenting on the appointment, Claire said: “Derek’s experience and effectiveness in broker relationships means that he is well suited to MMA as a broker only insurer and we are delighted to welcome him to the team.

“We recognised Derek as someone with experience and several key attributes, including exceptional professional standards and a deep understanding of regional commercial insurance, having a successful track record in the Midlands, Merseyside, South West and Home Counties.”

Derek has a degree in business administration from Aston University, during which he spent a year at Connecticut State University, and is an associate of the Chartered Insurance Institute.

Source : MMA Press Release

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    Stop, look and listen: the three words that used to be drilled in to children every time they cross the road are now ignored by almost two thirds (64 per cent) of British adults according to new research out today.

    The ‘Street Walk’ study, commissioned by Sheilas’ Wheels car insurance, shows that a ‘just-step-out’ generation has grown up in the UK with nearly half of adults (49 per cent) saying they do not listen before crossing the road, 46 per cent do not stop, while nearly a quarter (23 per cent) do not look both ways.  This is even more alarming as 71 per cent of those polled did not know that traffic came from the right in the UK when crossing a road.

    The results of this road-blindness are alarming with one in ten Brits (nine per cent) saying they have come into contact with a moving vehicle while crossing the road while a quarter (25 per cent) have had a near miss.  Eight per cent of Brits have had a collision with a bicycle while crossing the road and this rises in major cities with the highest bike collision rate in London (at 16 per cent.)

    The study found that adults are also unwilling to intervene when they see children crossing badly.  Unlike Green Cross Code days, a silent majority emerged with three quarters (72 per cent) of Brits saying they do not intervene when they see children behaving dangerously on the road.

    Jacky Brown at Sheilas’ Wheels car insurance commented: “It is shocking to see pedestrians risk their own lives for little more than shaving a few seconds off their journeys as the roads are still as dangerous as they were when we were first taught the Green Cross Code in school.

    “Stop, look and listen is timeless advice as it will not only protect our own lives, but also those of other road users and ensure that younger pedestrians do not pick up our risky bad habits.”

    As well as the “stop, look and listen” rule, the study revealed that modern-day distractions are also a menace on the roads as 45 per cent of Brits confessed to talking on the phone whilst crossing, 21 per cent admitted texting and a further 29 per cent said they listen to their music.  Proving that it is not just technology that is to blame, six per cent of Brits also admitted to reading a book or newspaper while crossing the road.

    One in ten men (ten per cent) confessed that they flouted the Green Cross Code because they were distracted by admiring other pedestrians and motorists – which was double the number of women (five per cent) who said the same.  The top answer given was being in a hurry, which 44 per cent of Brits said was to blame for their lack of safety.

    Other findings from the study show:

    – Nine out of ten (90 per cent) Brits polled admit they jay-walk by crossing the road just yards away from a dedicated crossing

    – 17 per cent do not know what to do at a pelican crossing and one in five (17 per cent) admit that they do not know the difference between a zebra and pelican crossing

    – More than two thirds (71 per cent) of Brits admit to crossing in front of
    on-coming traffic

    – 86 per cent of Brits cross the road halfway when only one side is clear and 93 per cent cross between parked vehicles

    – Over a quarter (28 per cent) of Brits have had to run back to the pavement to avoid on-coming traffic

    The research revealed that it is not just urban main roads causing us problems, but also the winding country lanes.  Some 86 per cent of pedestrians walk on the inside of a bend along a country road, while 56 per cent have walked with their back to on-coming traffic.

    London was revealed as the home of the country’s most dangerous pedestrians with a staggering three quarters (75 per cent) admitting to not stopping, looking and listening before crossing the road.  Two thirds (66 per cent) of Londoners also confessed to crossing even when there was on-coming traffic.

    The under 25s were the most dangerous pedestrians with 39 per cent admitting to not looking both ways every time they crossed a street, compared to just 15 per cent of over 55s.  Nine out of ten (90 per cent) over 55s also knew the difference between a zebra and pelican crossing, while a staggering 42 per cent of under 25s were left scratching their head.

    Source : Sheilas’ Wheels Press Release

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    AXA Wealth platform sales on Elevate have risen 140%, bringing total platform assets under administration at the end of Q1 to £2.5bn, with platform business now representing 40% of all sales (18%: 2010).

    This growth is reflected not only in AXA Wealth’s new business focus, but in the latest forecast from Platforum which suggests that by end of 2012 total assets under management on platforms through IFAs is anticipated to reach £320bn.

    AXA Wealth grew total assets under administration to £18.6bn, with growth coming in particular from the Elevate platform to £2.5bn and pension and onshore bonds to £4.7bn.

    Elevate, which was recognised for its superior level of features and benefits for the second consecutive year**, has grown assets dramatically since launch two years ago through developing strong strategic partnerships which will help ensure AXA Wealth secures longer term success in what is likely to be a platform and investment dominated market.

    Total AXA Wealth sales grew to £950mn (£852mn: 2010) following strong results from not only its wrap platform, Elevate, but also Architas Multi-Manager and strong demand for offshore bonds via its AXA Wealth International offshore businesses, based in both the Isle of Man and Dublin. AXA Wealth International, which provide offshore bonds from both the Isle of Man and Dublin jurisdictions, provide diversity, with their recognised service and quality platform capability.  Bancassurance is also benefiting from demand from banks for their specialist services.

    Sales highlights:

    – Elevate total sales up 140% to £374mn

    – AXA Wealth International (including Isle of Man and Dublin) total sales for the full year up 8% to £254mn

    – Bancassurance volumes up 23% to £91mn in 2011

    – Mutual Fund premiums up 95% to £259mn

    Mike Kellard, CEO, AXA Wealth, says: “AXA Wealth has had a strong start to 2011, with significant growth in on-platform sales. This is partly a reflection of the shift by IFAs towards wrap, but also I believe the strength of our platform offer, and the changes we have made over recent months to enhance the adviser support and experience.

    “The recent changes include the leveraging of AXA Wealth’s existing 5 star service capability across the Elevate proposition, by bringing firstly wrap adviser support and then wrap back office administration into a single adviser support unit. We have also moved to a single dedicated distribution team. We are also merging the specialist adviser support teams to create a new Professional Edge adviser business service, with capability across both product and platform.”

    AXA Wealth expects the trend towards platform to continue, as the combination of the shift away from insured funds to open market (mutual fund) investment portfolios, RDR, and advisers and their clients seeking more control over the management of their investments, with the support of specialist wealth partners like AXA Wealth, gain traction.

    The Resolution deal in September 2010 repositions AXA Wealth as a new model wealth business, with a focus on offering specialist investment, retirement and tax planning services. It focuses predominantly its offer on mass affluent and high net worth clients and differentiates itself through market leading service and a superior platform based investment management proposition. It also has successful bancassurance relationships, and corporate investment services delivering bespoke investment solutions for corporate pension schemes.

    Source : AXA Wealth Press Release

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    askMID, the website that allows you to check if your vehicle is on the Motor Insurance Database (MID) for free, is working together with some of the leading insurers including Aviva, Zurich, Allianz, RSA and MORE TH>N, to make sure that their customers details are recorded correctly on the database.

    Under the new Continuous Insurance (CIE) scheme, due to launch in June 2011, keepers of vehicles who have no record of insurance on the MID, will receive a letter informing them that they do not appear to have a valid insurance policy.

    The insurance industry is encouraging all customers to check if they are recorded on the MID now by going to www.askmid.com/ and entering their vehicle registration number. If their details do not appear on the MID, customers are advised to contact their insurance provider immediately so that the records can be updated.

    This is to ensure that all policies are correctly recorded and that customers who currently have a valid insurance policy, do not receive a letter in error. If a warning letter is received and no action is taken, a series of escalating penalties can apply which will include a fixed penalty notice; clamping, seizure and disposal of the vehicle and a court prosecution with a fine of up to £1,000.

    The CIE law states that it is now an offence to keep a vehicle that is not insured at all times or declared as off the road to the DVLA. The MID will be systematically checked with DVLA records to identify keepers of potentially uninsured vehicles.

    Ashton West, Chief Executive of MIB said: “The industry is working closely with Government and DVLA as key partners ahead of the launch of the new scheme, which will be in addition to current Police powers in taking uninsured vehicles from our roads. We remain committed to preparing the public ahead of the change in law.”

    Graeme Trudgill, BIBA’s Head of Corporate Affairs said: “CIE is instrumental in combating uninsured driving which currently adds £30 a year to every motorist’s insurance premium, amounting to more than £500m a year in additional expenses. This is a serious and costly issue, and it’s important that insurance providers all play their part to help their customers make sure that they are well prepared and informed ahead of new law enforcement.”

    Source : MIB Press Release

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    Thousands of agents and employees of Nan Shan  Life, the Taiwan unit of US insurance giant AIG, rallied Thursday to push for  a corporate take-over, which they believed could save their jobs.

    The demonstration in downtown Taipei came as a proposed $2.16 billion sale  of Nan Shan to Run Chen, a group headed by one of Taiwan’s top conglomerates  Ruentex, remained in limbo awaiting regulatory approval.    “As long as the deal is not finalised, we don’t know if we have a future as  employees of the company,” said Wu Yi-chiang, a Nan Shan staff member who  convened the gathering outside parliament.

    Nan Shan Life has 32,000 sales agents and 4,000 salaried employees,  according to company officials.

    The government has said it will accept the deal only if the buyer of Nan  Shan meets certain requirements, including professional management skills and  long-term commitment.

    AIG announced a deal to sell Nan Shan Life to a consortium led by Hong  Kong-based Primus Financial for $2.15 billion in 2009, but the deal was  rejected by Taiwan’s financial regulator last year.

    The regulator said it feared the Hong Kong group lacked the experience  needed to manage an insurer and argued it had failed to provide a long-term  management commitment, claims rejected by the consortium.

    Taipai, May 5, 2011 (AFP)

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