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Two-thirds of teens already know someone who has been killed or injured in a road crash by the time they reach the driving age, a new study reveals. 67% of 16 and 17 year olds know at least one road casualty – with one in five (22%) saying they know three or more.

By their 18th birthday, one in 10 (11%) have themselves been in a crash involving injury or death. Most believe young people themselves hold the key to cutting casualties, according to research by the AA to support a pioneering scheme to tackle crashes among new drivers.

The AA carried out the study to support Drive iQ PRO, a BTEC qualification in driver training designed to help new drivers build safer attitudes and behaviour.

Over two-thirds (69%) of 16-25 year olds said young people and their peers have the biggest role to play in preventing young road casualties – as opposed to the Government (7%) and parents (10%).

Asked for the best solutions, 37% pointed to further training on aspects such as motorway, night or wet weather driving; while another third (30%) said road safety should be added to the school curriculum.

Comment

AA Driving School director Simon Douglas says: “Road tragedies have hit young social networks right across the country. These same networks influence attitudes and behaviour, which are the true causes of many crashes involving young drivers.

“Young people are clear that it’s up to them to act and that better learning is key. A test pass in itself does not guarantee a safe attitude behind the wheel, and it’s this potentially fatal gap that we now aim to help young drivers to bridge.”

Nick Rowley, chief executive of a2om, the online software supplier behind Drive iQ PRO, adds: “Research shows that 19 out of 20 crashes are contributed to by human factors. Tackling these calls for a new approach towards learning to drive.

Drive iQ PRO prepares pupils for a safer future on the road by not only training them to master the controls and manoeuvres, but also coaching them through the way they think, feel and behave towards driving.”

Case Study

Catherine Poole, 18, of South West London signed up for Drive iQ PRO after her school community was rocked by a serious car crash involving a group of pupils. The four teenagers cheated death when the car they were in collided with another at night, in wet weather.

The school challenged pupils to think about road safety and recommended Drive iQ PRO. Catherine has now passed her driving test through the course and is preparing for the post-test unit on night and motorway driving.

“I’m definitely glad I did it,” says Catherine who is now exploring the post-test insurance benefits. “Without the deal through Drive iQ PRO, my parents would have added me to their insurance – but that was going to cost £7,000. Doing the course means I can now get a car plus insurance for less than that!”

Source : AA Press Release

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The Board of specialist insurance and reinsurance broking group THB Group plc has reached agreement to sell THB Clowes to the Lloyd’s broker Ellis Clowes & Company Limited, headed by Karen Ellis.

THB Group CEO Frank Murphy said:

“Karen has a long-held ambition to start her own brokerage and after amicable discussions we concluded that it would be beneficial to the future growth of both businesses, to agree to part. I would like to thank Karen and her team for their contribution to THB and wish them the very best with their new venture.”

Source : THB Press Release

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U.K. insurer Aviva PLC Tuesday said it is positioned to deliver strong, profitable growth and “outstanding capital generation” for 2010 after it posted a better-than-expected 6% rebound in new business sales in the first nine months, helped by strong results in the U.K. and Asia.

Aviva, whose general insurance business was recently a target of RSA Insurance Group PLC, said that total life and pensions new business sales for the three quarters ended Sept. 30 was GBP25.55 billion, up from GBP24.06 billion in the same period last year.

The sales were slightly higher than the GBP25.2 billion average forecast from 14 analysts polled by the company. They also represent a recovery from the same period last year, when the effects of the financial crisis led to an 11% fall in nine-month sales.

Aviva also said its capital position remains strong, with surplus capital of GBP3.6 billion, down from GBP3.8 billion at end-June.

It said it is on target to generate GBP1.5 billion of operational capital by the end of the year and expects to deliver at least as much in 2011 “as we continue to benefit from our combination of life and general insurance.”

Chief Executive Andrew Moss said: “As we look to the next phase of our growth, Aviva will sharpen its geographic focus and deepen its position in its key markets through its strengths in both life and general insurance.”

“Our U.K. business is an excellent example of how this strategy is delivering value for our shareholders and customers,” Moss said.

He said that the company is exiting Taiwan, where it has a small insurance business but which won’t meet the company’s financial targets.

Aviva said it will focus on markets that have the potential to generate both $100 million of operating profit and a 12% return on capital employed.

Moss didn’t comment specifically on reports that Aviva may be looking at buying Turkish insurer Aksigorta, but said that Aviva wants to grow its operations in Turkey.

He said Aviva’s cost savings program, which included job cuts and other operational changes, will save it some GBP750 million by end-2011, from a annual cost base of around GBP5.75 billion back in 2007.

At 0852 GMT, Aviva shares were up 1.7% at 404 pence, while the FTSE 100 index was up 0.3%.

Oriel Securities analyst Marcus Barnard said Aviva released “a solid set of figures” and that he expects “most analysts will have to upgrade their numbers” on the insurer. Barnard kept his buy rating on the stock.

Panmure Gordon analyst Barrie Cornes said that Aviva’s guidance on cash generation “reinforces the overall prospects and dividend-paying capabilities” of the company. Cornes kept his buy rating and 535 pence target price for the stock.

In late July, RSA proposed to buy Aviva’s general insurance businesses in the U.K., Ireland and Canada for GBP5 billion, with the hope of leapfrogging into a much bigger general insurer.

However, that proposal was rejected by Aviva’s board in early August, calling the proposal “unacceptable and not in the best interests of Aviva shareholders.”

In a briefing, Moss reiterated that Aviva’s “composite” business model of running life and general insurance works very well for the company.

In its approach for Aviva’s general insurance business, RSA questioned whether the composite model is the best model for Aviva, suggesting that Aviva may be broken up.

Still, Moss said that any of the company’s businesses can be sold at the right price.

“Of course there’s a price at which we on the board of Aviva would entertain an offer for any of our businesses, just to be clear,” Moss told reporters.

But he said that the price would have to “provide the right value for Aviva shareholders.”

Source : The Wall Street Journal

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Couch potatoes are nearly twice as likely to catch a cold, and a third likelier to suffer bad symptoms of a cold, compared with counterparts who keep fit, American researchers reported on Tuesday.

They tracked 1,002 adults in Wisconsin aged 18-85 for 12 weeks in the autumn and winter of 2008, monitoring them for respiratory illness and weight and quizzing them about diet, lifestyle and aerobic exercise.

People who described themself as fit or who exercised up to five days a week or more, had between 4.4 and 4.9 “cold” days on average. For those who fell in the middle category of fitness, and exercised between one and four days a week, this was 4.9-5.5 days.

But among counterparts who said they were of low fitness and who exercised only one day a week or less, the tally was between 8.2 and 8.6 days. Good fitness also caused the severity of cold symptoms to fall by between 31 and 41 percent lower compared with the most sedentary lifestyle.

Bouts of exercise unleash a temporary rise in immune defences, helping to boost preparedness against viral intruders, the study suggested. It cited figures that the average adult in the US can expect to have a cold two to four times a year, and children between half a dozen and 10 colds a year. The cost to the US economy is put at around 40 billion dollars annually.

The paper, published in the British Journal of Sports Medicine, is headed by David Nieman, director of the Human Performance Laboratory at the Appalachian State University in North Carolina.

Paris, Nov 2, 2010 (AFP)

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Accident-prone young drivers and a surge in fraudulent claims are key factors behind the steep rise in motor insurance premiums which threaten to drive some motorists off the road.

According to the benchmark AA British Insurance Premium Index, motorists faced a startling increase of 11.5% in the third quarter, based on the cheapest three quotes collected in its survey.

In the year to September 30, the cost of annual comprehensive cover jumped by 39.3% to £792, the biggest annual rise ever recorded by the Index which began in 1994.

For third party, fire and theft policies, which is the best that many younger, riskier drivers can get, a 54.6% jump produced an average annual bill of £1,097.

Young drivers face the stiffest increases because they generate so many claims. Over the past year, the average cost of cover has jumped by 51% for 17- to 22-year-olds. Even after shopping around, men of this age can expect annual premiums around £2,500, while women (less dangerous) pay £1,400.

AA Insurance director Simon Douglas says: “Statistics from the Department for Transport (2009) show that a third of men killed or seriously injured on Britain’s roads are under 25.”

He adds: “Car crashes are by far the biggest threat to life among young people – considerably more than drugs or knife crime, for instance. These shock statistics underline why premiums for young drivers are soaring.”

Middle-aged drivers (40-59) have seen a 30% surge in premiums, perhaps because many parents extend their policies to provide cover for children. The pain for all motorists, says Douglas, has been intensified by price comparison sites which drove premiums so low that many companies lost money on car insurance.

“Five years ago we warned that sharp premium inflation would be the result of this competition but the recession is adding to the pain,” he says.

Today, insurers pay out £123 to settle claims for every £100 collected in premiums and the Government will push prices higher on January 1 by adding 1% to insurance premium tax.

The AA thinks premium rises could continue in 2011, although the largest rises may already be factored in.

Meanwhile, few can predict when the bill for settling personal injury claims will level off as “no-win, no-fee” lawyers seek out accident victims to pursue their claims. One estimate suggests 30,000 fraudulent claims are paid out each year, adding an average £80 to the cost of each policy purchased.

New figures from the Association of British Insurers (ABI) from an analysis of 50,000 low value personal injury claims reveal an average compensation payout of £2,430 – plus legal fees of £2,100 a time. A moneysupermarket.com report suggested in September that one motorist in every 20 aged under 35 has “staged” an accident to make a fraudulent insurance claim.

AA spokesman Ian Crowder says: “Ultimately honest motorists pay for this scam through rising premiums. The fact is that it is very difficult to clinically disagree when claimants say they have whiplash injuries, and on low value claims insurers know it is cheaper to pay up than to fight the case in the courts.”

Source : Daily Post

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Uwe E. Reinhardt is an economics professor at Princeton. He has some financial interests in the health care field.

How does competition work in the health insurance market? Do more competitors in a market area — say, a state — invariably mean a better deal for the insured?

These questions are germane as regulators are busy implementing the Affordable Care Act , which imposes a series of stringent new regulations on the market for health insurance, particularly the market for small-group or individually purchased insurance.

After months of hard work, for example, the National Association of Insurance Commissioners on Oct. 21 submitted to Kathleen Sebelius, the secretary of health and human services, its recommendations for defining the minimum loss ratio that health insurers must meet as of Jan. 1.

As I noted in two earlier posts on the ratio, it expresses what portion of the premiums collected by insurers must be paid out in the form of “medical benefits.” For insurance sold in the small-group or individual insurance market, the portion must be at least 80 percent. For insurance sold in the large-group market it must be at least 85 percent.

One can debate whether, with properly conducted health insurance exchanges, this regulation of the minimum-loss ratio was actually necessary. I think not, because if both the benefits and the premium for them are clearly stated, I can comparison-shop. It’s not important for me to know how insurers allocate the premium.

But if it were to be imposed, it should have been phased in gradually, over, say, four years or so, as was done with the Medicare prospective payment system for hospitals introduced under the Reagan administration in the mid-1980s and the Medicare physician-fee schedule introduced by the George H.W. Bush administration in the early 1990s.

If major changes in the health system are imposed rapidly, they tend to generate untoward and sometimes unanticipated side effects that must then be addressed with ad-hoc waivers or other adjustments, such as the esoteric “credibility adjustment” of the minimum-loss ratio, whose details most readers of this blog probably wish to be spared.

Now that the regulation is on the books, one wonders what impact it will have on the number of insurers competing in the market and what effect their numbers will have on the insured.

In a letter submitted to the insurance commissioners in May, the Council for Affordable Health Insurance reminded the commissioners that these states’ traditional “standards for individual-market loss ratios vary between 55 to 65 percent, depending on the type of plan.” The council, as well as the American Health Insurance Plans, argues that the effect of the regulation will be to drive many small insurers from the market and thus to reduce competition for health insurance.

Source : New York Times

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    French insurer Axa SA said Thursday that the world’s biggest bank, ICBC of China, will take a 60 percent stake in its Chinese insurance unit Axa-Minmetals Assurance.

    Axa said the entry of Industrial and Commercial Bank of China (ICBC), ranked the world’s largest by market value, will not affect daily management at the business which will come under an Axa official.

    Axa-Minmetals Assurance specialises in life insurance and was set up in 1999 as a joint venture with China Minmetals corporation, a statement said. Premiums totalled 830 million yuan (90 million euros, 125 million dollars) in the first nine months of the year, up 54 percent from the same period in 2009.

    “This tie-up with ICBC is ideal to allow us to significantly increase our presence in the Chinese insurance market,” Axa chief executive Henri de Castries said.

    “The three of us will be much stronger than if we stayed separate.”

    Axa held 51 percent in the company but this will fall to 27.5 percent after ICBC takes its stake. Minmetals will in turn hold 12.5 percent.

    “It’s better to have 27.5 percent of a larger and growing plate than 51 percent of a smaller plate,” de Castries said.

    Once the deal is completed, the company will be renamed ICBC-Axa Life Insurance.

    ICBC will pay 1.2 billion yuan for the 60 percent stake in the new entity, Yang Kaishen, ICBC executive president said.

    “We will settle the payment as soon as we have the final approval from the regulator,” Yang said.

    Insurance premiums in China’s market grew by 34 percent in the first half of 2010 compared with the same period last year, with foreign insurers collecting only four percent of this, compared to nine percent in 2005, DowJones Newswires said.

    Due to the dominance of Chinese players and a lack of predictability in securing regulatory approvals for new products and outlets, some foreign insurers have been scaling back their businesses in China, Dow Jones said.

    “The Chinese insurance market is still an emerging market” with good potential for growth, said Jiang Jianqing, ICBC chairman.

    The just announced deal is ICBC’s only major investment in an insurance company, he said.

    Beijing, China, Oct 28, 2010 (AFP)

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    The Asian unit of troubled US insurer AIG is set to make its trading debut in Hong Kong on Friday after a monster share offering that could become the world’s second-largest this year.

    However, some say investors could be disappointed in AIA in the long term as its growth potential is limited and it had not performed particularly well in the region so far.

    AIA said last week that it raised 17.8 billion US dollars after pricing its shares at 19.68 Hong Kong dollars (2.53 US dollars), but the insurer’s offering could still top 20 billion US dollars if certain options are exercised.

    Frenzied demand has already made the offering Hong Kong’s largest-ever share sale, attracting a host of big players including the Kuwait Investment Authority sovereign wealth fund and a number of Hong Kong tycoons.

    Chinese sovereign-wealth fund China Investment Corp is also among the buyers, according to reports, while Taiwan’s Fubon Financial said Wednesday that it had picked up about 60 million US dollars worth of AIA shares.

    AIG, which is on the hook to repay US taxpayers after a government bailout in 2008, won approval last month for the sale of its Asian unit.

    The US insurer was forced to look at publicly floating AIA in Hong Kong after the collapse in June of a proposed 35.5-billion US dollar sale to British insurer Prudential.

    AIA’s sale comes after Agricultural Bank of China in July raised a total of 22.1 billion dollars from its IPO, exceeding the previous world record set by the Industrial and Commercial Bank of China, which raised 21.9 billion dollars in 2006.

    However, those listings were split between Hong Kong and Shanghai.

    “The IPO is a critical turning point for AIA and we are delighted that it has been so positively received by investors around the world,” Mark Tucker, AIA’s chief executive, said in a statement last week.

    Earlier, he described AIA as “the only independent, listed life insurance group exclusively focused on the Asian growth opportunity.”

    Observers echoed AIA’s chief, pointing to its reach across 15 Asian countries and the company’s healthy balance sheet. The insurer booked a net profit of 1.75 billion US dollars in 2009.

    But others are less convinced of AIA’s growth potential, noting that it was losing market share in some countries despite a well-known brand.

    “Investors are in Asia for growth. Today’s AIA unfortunately doesn’t measure up too well,” Patricia Cheng, analyst at Hong Kong brokerage CLSA, wrote in a report this month.

    “(AIA’s) influence has been declining across the board. It’s already lost the top positions in China (among foreign operations), Hong Kong and Singapore.”

    AIA traces its roots in Asia back more than 90 years and was the largest foreign life insurer in China in 2009 based on life insurance premiums.

    Hong Kong, October 28, 2010 (AFP)

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    South West general insurance firm Cornish Mutual is expanding its member services team with the creation of six new job roles and the employment of five new staff.

    Five new team leaders and a technical trainer have been appointed to make sure the company maintains and exceeds its high-levels of customer service. The positions of team leader are new to Cornish Mutual and will provide additional support and coaching for their member services advisors.

    The five new team leaders will be split between the insurer’s Truro and Exeter offices, and include four promotions from within the company and one external appointment.

    Of the four promotions, Amanda Booker is the longest standing employee, having worked for Cornish Mutual for over 25 years, and Gemma Whyle, Shirley White, and Dawn Hocking (all pictured) have also worked their way up through the business to the new positions.

    Sara Cape, originally from Plymouth, was recruited externally and has a background in customer services. She will be introducing an internal quality monitoring programme which will inform staff coaching and training plans.

    The new technical trainer, Peter Daniel, was previously responsible for the set up of Cornish Mutual’s Exeter office, and has now been charged with ensuring all staff in member services meet the high technical standard expected of them.

    Sharon Plowright, Member Services Manager, said of the new appointments: “The new team leaders and technical trainer will help to make our member services team as efficient as possible. We are investing in our people through continuous training more than ever before and by focussing on the quality of our service, we will be able to continue to tailor our service and our products to our members’ needs. We have a high-performing team well known for its track record in handling claims in record time with maximum efficiency – we’re making sure we have the right people, with the right skills in the right place, at the right time!”

    Cornish Mutual has also recently taken on three new employees to work in its Personal Lines and Motor Fleet teams, and has appointed a new Marketing Assistant, Verity Dodd, to work in the Truro office.

    Alan Goddard, Managing Director of Cornish Mutual added: “Everyone at Cornish Mutual is delighted to welcome the new team members – they all have a vital role in maintaining high standards for our new and existing members. The expansion of the team demonstrates that we’re also committed to staff training and development, so it’s great to see five of our long standing employees promoted within the company.”

    Source : Cornish Mutual Press Release

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      The baby boom generation turns 65 on January 1, marking a milestone in the graying of America that portends vast economic, social and cultural changes for the United States.

      As the first of the 76 million US boomers reach the magic age in 2011, they will likely transform the notions of retirement and old age instead of following in the footsteps of their parents, say experts.

      The demographic trend means a shock to the economy, government finances, a strain for the health care system, and even a potential shift in America’s role as a global superpower.

      But analysts say this won’t be your grandfather’s retirement.

      “Even though 65 is the conventional retirement age we’ve become accustomed to, this generation doesn’t look at retirement as the kind of cliff-ending of a career that previous generations had to experience,” says John Challenger, chief executive of the consultancy Challenger Gray & Christmas.

      “Today for many reasons both chosen and not chosen people are working for a much longer period at this stage of their lives. There are many studies showing that continuing to find meaningful work into your 60s and 70s is an important part of health and longevity and life balance.”

      A report by insurance firm MetLife confirms this view. It shows fewer than half of boomers expect to be retired between the ages of 65 and 69, whereas in the past three-fourths expected to be retired within a few years of hitting 65.

      Report author and demographer Peter Francese says the first of the generation, the so-called “leading edge” boomers have a tradition of being “trailblazers.”

      “This group was among the first for whom college education was commonplace. They were also among the first to have a sense that their lives would be better than those of their parents,” he said.

      “While their retirement years will be met by financial challenges, they may end up having more social and personal fulfillment than that of their parents through their continued presence in the workplace.”

      Similar demographic trends are occurring in most major industrialized nations, but the US population will not age to the degree of most of Europe or Japan, notes Richard Jackson, director of the Global Aging Initiative at the Center for Strategic and International Studies.

      Jackson wrote recently that for the US, “relative demographic strength will tend to cement its geopolitical power,” but that “the mounting demographic weakness of its traditional allies could undermine their ability to shoulder part of the global security burden.”

      Even so, Jackson told AFP that the US will see a “fiscal shock” and “labor market shock” as older Americans stop working and collect social benefits.

      The trends point to “a potential for a growing conflict or competition between the young and old over scarce public resources,” said Jackson.

      This means a likely renegotiation of the “social contract,” says Jackson: “We should have been doing this 20 years ago. Boomers are turning 65 but there’s not much time to prepare and adjust.”

      One bright spot is the increasing vitality and health of the population, meaning they can work and contribute more in ways they had not in the past.

      “Old people today are younger than old people of the past: Today’s 75-year-old man is the same ‘age’ as a 68-year-old man in 1970. Thus, 75 is the new 68,” says a report by the Stanford University Center on Longevity.

      Challenger said new technology and flexible workplaces will make it easier for older workers to stay active.

      “There are frictions over technology and its adaptation, but each year more of the older generation gets comfortable with technology, so technology also facilitates the ability of older workers to continue their working lives,” he said.

      “It also allows people to telecommute. We no longer work from 9:00 am to 5:00 pm in a particular space.”

      Sandra Timmermann, director of the MetLife Mature Market Institute, said older workers are capable of handling the mostly white-collar jobs that are open to them.

      “This group of highly educated individuals is also apt to find a welcoming employment market where their experience is desirable,” she said.

      Jackson says some research suggests these “younger” elderly want to avoid being ghettoized in retirement homes and communities, and may opt instead to stay in the homes or move in with children in multigenerational families.

      “The whole notion of retirement as a life cycle phase is basically a post-World War II concept,” he said. “Before that, it was something you did to an old machine. We may be moving back to a society where older people are more engaged.”

      Washington, October 26, 2010 (AFP)

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        California’s Pre-Existing Condition Insurance Plan (PCIP) has opened for enrollment and coverage is available immediately. The PCIP is one of the first major provisions of national health care reform to take effect and is designed to bridge the gap between now and 2014, when insurers will no longer be allowed to decline health coverage or charge higher premiums to individuals with pre-existing conditions. Earlier this year, California tasked the Managed Risk Medical Insurance Board (MRMIB) with implementing this new program. The PCIP will be managed through a public-private partnership that will be administered by the MRMIB.

        Funding for the PCIP will come from the Federal Temporary High Risk Health Insurance Fund which was was created earlier this year and currently has $761 million available. The fund and insurance premiums will serve as the sole sources of funding for PCIP and is expected to cover up to 23,000 Californians.

        Coverage under the PCIP is available to Californians who have been without health coverage for at least six months and have been declined coverage from a carrier due to their pre-existing condition or have been offered coverage at a rate higher than the preferred provider premium rate of the state’s high risk pool.

        Governor Schwarzenegger announced earlier this year that he is taking aggressive action to implement federal health care reform in California, and his Administration has been working since federal health care reform passed to implement key elements before the 2014 start date. “Operating the high-risk insurance plan is a win-win for our state because we can maximize federal funds while providing more affordable coverage to individuals who desperately need health insurance,” said Governor Schwarzenegger.

        Source : Civ Source Online

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        A report by independent financial research company Defaqto, published today, has concluded that the home insurance industry is in good shape but faces a number of challenges and a period of transition.

        Defaqto‟s home insurance report found that uncertain economic conditions and changes within the sector have combined to create a difficult climate for insurers.

        Significantly, Defaqto‟s analysis found that the number of providers in the home insurance market has increased by 73% since 2004. This increase has been driven by comparison websites and major retail brands which, while creating unprecedented choice for consumers, has led to greater competition.

        This has resulted in providers moving away from „one size fits all‟ products to a more targeted approach in order to meet the needs of different customer groups. At the same time, however, there are signs that the industry has started to move towards a focus on price, and away from the cover and benefits offered by policies.

        Defaqto‟s report concludes that insurers will be competing in a difficult environment over the coming years, and getting the approach and balance right will be a significant challenge.

        Mike Powell, Defaqto‟s Insight Analyst for General Insurance, said:

        “It is clear that insurance providers will be competing in a challenging environment over the coming years. We believe there are long-term implications for insurers, who may need to consider how they restrict premiums while simultaneously lowering the cost of acquiring and retaining new customers. In addition, there are increasing signs that a race to the bottom with regards to premiums could emerge – and this could be detrimental to consumers and the industry as a whole.

        “Our comprehensive analysis of the home insurance market is focused on helping insurers understand the key trends in the sector, and consumers‟ priorities when purchasing products. Ultimately, this understanding can help firms develop products that meet people’s needs.”

        Source : Defaqto Press release

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        Aon Benfield, reinsurance intermediary and capital advisor, today launches its first survey of global life insurers to understand reinsurance purchasing patterns and help benchmark retention, quantity and price of death & disability catastrophe reinsurance covers.

        This enables actuaries to verify pricing calculations for alternative reinsurance pricing structures, and gives intermediaries the ammunition to place and negotiate the most effective and fair reinsurance terms and conditions.

        The survey is based on the responses of 209 life insurers from 14 countries, which buy a combined catastrophe reinsurance capacity of EUR5.9 billion.  Accounting for the respective market shares, this translates into high quality information on EUR9.0 billion of death & disability catastrophe reinsurance covers.

        Key findings include:

        – On average globally 78% of the insurance companies surveyed purchase excess of loss per event reinsurance.

        – France and Japan purchase the most death & disability catastrophe reinsurance cover, buying total limits of EUR2.2 billion and EUR1.7 billion respectively.

        – The average global Rate-On-Line (amount paid per unit of cover) is just below 1% and the national averages range from 0.5% in The Netherlands to 3% in Colombia.

        – The global trend is to buy cover up to on average 44x Maximum Any One Life (MAOL) over a 5x MAOL deductible.

        – The standard treaty allows one reinstatement costing 100% of original price in most of the studied countries.

        Marc Beckers, head of Aon Benfield Analytics for EMEA, said: “Against a backdrop of more spending power from insureds, maturing markets and increasing risk, it’s crucial to grasp the evolving characteristics of the death & disability catastrophe reinsurance markets.  For most life insurers, pandemics and terrorism attacks are key drivers of purchasing and Solvency II will likely serve as a catalyst for further purchasing of death & disability catastrophe reinsurance to access efficient capital relief.”

        Aon Benfield has surveyed the French market on death & disability catastrophe cover since 2003 and today’s first global survey has evolved to provide a broader insight. This is to reflect the global nature of reinsurance buying, that catastrophe events are likely to affect several countries at the same time, to inform insurers with multinational portfolios and compare the purchasing behaviors and prices to help influence strategic decisions.

        Source : Aon Benfield Press Release

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        E+S Rück – which bears responsibility for German business within the Hannover Re Group – considers the general environment on its domestic market to be broadly favourable. Michael Pickel, Member of the Executive Board, stated at a press conference in Baden-Baden: “Although conditions remain difficult in some lines, including for example motor business, I am nevertheless confident that we shall again maintain our profitability in the coming year.”

        For 2011 the company expects both market conditions and the premium trend to remain largely stable. Looking at the various lines of business, the picture that emerges is a mixed one. In industrial property business the pressure on prices will be sustained. This can be attributed in part to volume lost in the aftermath of the recent economic crisis, most notably in the area of business interruption. In view of the fiercely competitive climate E+S Rück intends to write its business highly selectively.

        Sustained competition can also be observed in motor business, an important line for E+S Rück. Following premium declines and an unusually severe winter with an adverse claims experience, the company nevertheless expects that the premium erosion will be largely halted in 2011. Given the results on the primary market in 2010 and the reduced interest rate level, conditions in reinsurance are likely to improve.

        In industrial liability business the climate remains intensely competitive on the primary insurance side. The prospects for reinsurers, on the other hand, are more encouraging: given the importance of a very good rating for reinsurers, the capacities available in the market will inevitably remain limited. E+S Rück assumes that prices and conditions here will be commensurate with the risks.

        In light of this year’s natural disasters, such as winter storm Xynthia and a number of flood events, E+S Rück expects prices for catastrophe covers to harden. “With an eye to the upcoming round of treaty renewals our clients will reconsider their exposures on account of the recent flood losses. It is our assumption that additional capacities will be purchased”, Mr. Pickel noted.

        All in all, E+S Rück is again looking to attractive business opportunities in 2011 and hopes to continue the profitable expansion of its market share.

        Source : Hannover Re Press Release

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        An autobiography by a meerkat who speaks with a cod Russian accent, splatters conversation with his “simple’s” catchphrase and wears a dressing-gown is being tipped as the literary sensation of the year and is expected to beat the likes of Nelson Mandela, Keith Richards and Tony Blair to the top book slot in the Christmas market.

        The meerkat in question is Aleksandr Orlov, the advertising creation that has helped the price comparison website comparethemarket.com to earn a record £60m this year. The free publicity in newspaper articles and other spin-offs – Orlov has 750,000 Facebook fans, 40,000 followers on Twitter and his iPhone application has been downloaded 700,000 times – can’t have hurt.

        The “autobiography” – A Simples Life, My Life and Times – topped the Amazon Movers and Shakers list when news of its impending publication was announced last month. The book has remained in the retailer’s top 100 list on pre-orders alone and is due to be released this week.

        The meerkat is that rare beast that can sell a product without having to mention the product’s name, according to Dave Trott, creative director of the advertising agency CST. “You can have a cute character, like esure’s Mr Mouse, but the trick is that the character is associated with the product, which Mr Mouse wasn’t,” he says.

        Source : The Independent

        0 1

        Aon Corporation, global provider of risk management services and human capital consulting, today announced the appointment of Regis J. Coccia, a former editor of Business Insurance with over 20 years of experience in journalism, as director of marketing and communications. He joins Aon on November 1.

        In the newly created role, Coccia will support Aon’s corporate marketing and communications teams on projects across the company’s business units with responsibilities including strategic development of client-focused communications and thought leadership.

        “I am extremely excited that we were able to attract someone of Regis’ caliber to the Aon team,” said Phil Clement, Aon’s global chief marketing and communications officer. “His knowledge of our industry and of Aon’s client focus will add great value for our global clients and colleagues as we continue to unite the marketing power of our firm.”

        Before joining Aon, for the past seven years Coccia was editor of Business Insurance, the leading weekly magazine and website serving risk management, insurance and employee benefit professionals, published by Crain Communications Inc. As editor, Coccia led a team of award-winning, veteran reporters and editors in covering the commercial insurance industry.

        During his nearly 18-year tenure at Business Insurance, he led his team to create various programs spotlighting innovation and leadership in the risk management, insurance and benefits fields, including the Readers Choice Awards, honoring leading companies selected solely by the publication’s readers; the Business Insurance Innovation Awards for products and services designed for and awarded by professional risk managers; and Women to Watch, an annual feature recognizing women doing outstanding work in commercial insurance, risk management and benefits. Coccia also led his team in creating a variety of multimedia content, including online video, webinars and audio podcasts.

        Coccia earned a bachelor of arts in American studies from the University of Notre Dame.

        Source : Aon Corporation Press Release

        0 0

        Tropical Storm Richard in the northwestern Caribbean Sea will strengthen into a hurricane this weekend before hitting Belize and Mexico’s Yucatan Peninsula on Monday, the U.S. National Hurricane Center predicted Friday.

        After crossing the Yucatan, the remnants of Richard could emerge in Mexico’s oil-rich Bay of Campeche before possibly tracking toward the U.S. oil and natural gas production facilities in the northern Gulf of Mexico, the NHC and some computer weather models forecast.

        Richard was packing winds of 40 miles per hour. It was located about 235 miles south-southeast of Grand Cayman. Elsewhere, the NHC pointed to two low pressure systems in the Atlantic: one a hundred miles south of the Cape Verde Islands with a 30 percent chance of strengthening into a depression, and another about 1,000 miles east of the eastern Caribbean Islands with a 10 percent chance of developing.

        The weather models forecast the Cape Verde system would pose no threat to land, other than maybe the Cape Verde Islands, as it moves northwest in the Atlantic closer to Africa than North America over the next several days.

        It was too soon for the weather models to project where the other Atlantic system, with a 10 percent chance of developing, would make landfall, if at all.

        Source : Reuters

          0 2

          The Asian unit of troubled US insurer AIG looked set Friday to record the world’s second-largest initial public offering this year, in a monster share sale that could still top 20 billion US dollars.

          AIA said that it had raised 17.8 billion US dollars after pricing its shares at 19.68 Hong Kong dollars (2.53 US dollars) ahead of the insurer’s debut on the Hong Kong stock exchange next week. Frenzied investor demand has already made the IPO Hong Kong’s largest ever share sale while the total amount raised could rise if other options are exercised.

          Agricultural Bank of China in July raised a total of 22.1 billion dollars from its IPO, exceeding the previous world record set by the Industrial and Commercial Bank of China, which raised 21.9 billion dollars in 2006. However, Agbank’s IPO was split with it raising 12 billion dollars in Hong Kong and the rest in Shanghai.

          Shares in AIA’s highly-anticipated offering were priced at almost 16 times forecast earnings this year, Dow Jones Newswires cited an unnamed source as saying.

          “The IPO is a critical turning point for AIA and we are delighted that it has been so positively received by investors around the world,” Mark Tucker, AIA’s chief executive, said in a statement on Friday.

          On Sunday, AIA said it would initially offer 5.86 billion shares at between 18.38 and 19.68 Hong Kong dollars, adding that it could issue additional shares if it exercised a so-called greenshoe option. That may bring the total raised to around 20.5 billion dollars and leave AIG with a stake of just 32.9 percent in the firm.

          AIG, which is on the hook to repay US taxpayers after a government bailout in 2008, won approval last month for the sale. The US insurer was forced to look at publicly floating AIA in Hong Kong after the collapse in June of a proposed 35.5-billion US dollar sale to the British insurer Prudential.

          AIA’s reach across 15 Asian countries and its healthy balance sheet explained the strong investor demand, said Francis Lun, general manager of Hong Kong’s Fulbright Securities. The firm booked a net profit of 1.75 billion US dollars in 2009.

          “The listing should do well because of the strong investor demand (for AIA shares),” Lun told AFP, adding that “AIA is a good company and insurance is always a very strong cash flow business.”

          But Patricia Cheng, an analyst at Hong Kong-based brokerage CLSA, questioned AIA’s growth potential despite the firm’s well-known brand, noting that it was losing market share in some countries.

          “Investors are in Asia for growth. Today’s AIA unfortunately doesn’t measure up too well,” she wrote in a report this month.

          “(AIA’s) influence has been declining across the board. It’s already lost the top positions in China (among foreign operations), Hong Kong and Singapore.”

          Major investors in the AIA sale include the Kuwait Investment Authority, the oil-rich Gulf emirate’s sovereign wealth fund, and a number of Hong Kong tycoons. Chinese sovereign-wealth fund China Investment Corp is also among the buyers, according to reports.

          AIA traces its roots in Asia back more than 90 years and was the largest foreign life insurer in China in 2009 based on life insurance premiums.

          Hong Kong, Oct 22, 2010 (AFP)

            0 3

            Despite a major drop in global pension funding levels in August, strong asset performance in July and September helped boost the overall funded status of global pension plans in the third quarter of 2010, according to a new analysis from Aon Hewitt, the human capital consulting and outsourcing solutions business of Aon Corporation (NYSE: AON).

            Aon Hewitt monitors and analyzes daily pension funding levels of U.S., U.K., Continental European, and Canadian companies in the S&P 500, FTSE 350, DJ Euro Stoxx 50 and TSX, respectively, through its Pension Risk Tracker tool. Aon Hewitt found that the funded status of global pension plans were 80 percent during the third quarter of 2010, up slightly from 79 percent in the second quarter. According to Aon Hewitt’s estimate, global pension assets increased by 12 percent during the quarter while pension liabilities increased by 10 percent over the same period.

            “While the quarter closed with modest gains, market volatility continues to run at very high levels. Managing this risk remains the focus of pension plan sponsors as we head into year-end,” said Ari Jacobs, Aon Hewitt’s North American Retirement Solutions leader. “Plan sponsors that have taken steps to systematically de-risk their plans are benefiting from those decisions, while others continue to look for opportunities to gain control over their pension finances, including funding strategy, liability settlement and investment policy options.”

            Regional Analysis

            According to Hewitt’s analysis, strong pension asset performance attributed to improvements across all regions in the third quarter of 2010.

            United States

            Pension funded status for U.S. plans showed a marginal improvement in the third quarter, increasing from 80 percent to 82 percent. Strong equity markets—up 5 percent to 10 percent for the year—helped pension plans regain the losses they experienced in the second quarter. However, the corporate bond rates used for measuring pension liabilities plummeted to less than 5 percent in August—the lowest in over a decade. Even after a slight uptick in September, these rates fell between 0.3 percent to 0.5 percent from prior quarter levels. As a result, pension liabilities increased by 4 percent to 6 percent, negating much of the benefit from strong equity performance.

            “The modest improvement observed at quarter-end masked what was another wild ride over the course of the quarter,” noted Joe McDonald, Aon Hewitt’s Global Risk Services leader in the U.S. “Funded status volatility continues to draw attention from senior management and has added to the momentum of pension de-risking strategies. The current interest rate environment has also prompted more plan sponsors to consider two- dimensional de-risking programs, which include explicit triggers based on both funded status and the future level of interest rates.”

            United Kingdom

            Accounting deficits declined for U.K. companies in the FTSE 350 index during the third quarter of 2010, although they were significantly higher than at the start of 2010. Assets increased by almost 10 percent, due to accounting-based liability values increasing approximately 7 percent. Despite market volatility during the quarter, the average funded ratio increased from 82 percent at the start of the quarter to around 85 percent. At one point during August, the average funded ratio fell to below 81 percent, which was one of the lowest values Aon Hewitt has recorded since it began tracking the data in January 2007.

            Kevin Wesbroom, Aon Hewitt’s Global Risk Services leader in the U.K., said, “The continued volatility of funded ratios in the region suggests that many U.K. companies will be looking more actively at investment strategies that minimize exposure to asset market fluctuations. An increasing number of companies are taking steps to manage their pension risk, whether by amending benefits—such as freezing plans to existing members, liability management exercises—such as Enhanced Transfer Value exercises, or hedging investment risk.”

            Continental Europe

            Despite significant volatility, European pension plan sponsors saw little change in pension funding status in the third quarter, with an average funded ratio of approximately 66 percent. Pension funds in Europe saw a 6 percent average decline in funding ratios during the month of August, after rising as high as 69 percent at the end of July. A small recovery during September brought the quarter back in line with second quarter levels.

            The low point at the end of August represented the poorest funding ratio since Aon Hewitt began its monitoring. Over that period of time, pension funding ratios were as high as 95 percent.

            Matt Wilmington, Aon Hewitt’s Global Risk Services lead in Europe, said, “Like the U.S., continued volatility in the funded positions of European pension plans has resulted in greater interest in medium and long term de- risking strategies. As a result of revised life expectancy projections in the region and an expected rise in liabilities in certain European countries over the coming months, we expect to see further action among companies to reduce pension plan benefits and manage existing liabilities.”

            Canada

            Like Continental Europe, accounting deficits for companies in the S&P/TSX remained relatively unchanged during the third quarter of 2010. Strong asset returns, led by domestic equities, contributed to total assets increasing by more than 7 percent during the quarter. Unfortunately, this gain was offset by a significant decrease in corporate bond yields over the quarter, resulting in a 6 percent increase in liabilities. The net impact was that average funded ratios only increased incrementally, from 87 percent at the start of the quarter to 88 percent at the quarter’s end.

            “Many organizations have been holding off on implementing liability driven investments (LDI) or risk management strategies, thinking that interest rates were due to increase,” said Rob Vandersanden, a principal in Aon Hewitt’s Calgary office. “However, yields have continued to trend downwards, effectively wiping out the strong investment returns of the past quarter.”

            Source : Aon Press Release

            0 0

            Exeter Family Friendly, the mutual protection and healthcare insurer has announced a record month of new income protection policy sales in September. The sales figures support their growing reputation in the intermediary market.

            Commenting, Head of Intermediary Sales, Mike O’ Brien said:

            “We’re delighted that more and more intermediaries are supporting what we do and recognising the benefits we offer them with our range of simple and innovative protection plans.”

            The sales figures for September represent an increase of nearly 10% of those achieved for September the previous year and are set in a market which is widely accepted to be declining.

            O’Brien continued:

            “This is a great result for us as a business and shows how we are developing, but the bigger picture is a market in a slow decline. Which is bad news for providers and intermediaries, but particularly consumers, as so few are adequately protected against the impact of ill health.”

            “Ultimately, the industry needs a wake-up call and a commitment from all insurers if it is to recover and go on to reach anything like full potential. These results prove that is possible to make positive strides, but we still have a long way to go.”

            The results were announced shortly after Exeter Family had been awarded the Cover Excellence Awards for the Best Individual Income Protection Provider for the 3rd time in 4 years.

            Source : Exeter Family Friendly Press Release

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