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Sofia Ashmore

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    Dutch bank and insurance group ING reported Wednesday a return to profit in the first quarter but counselled vigilance amid what it said were volatile markets and a potentially fragile economic recovery.

    Net profit increased to 1.33 billion euros (1.68 billion dollars) in the first quarter of 2010, up from a loss of 793 million euros recorded in the same period a year ago, the company said in a statement. This result, due to higher insurance sales and savings volumes, was better than a profit of 930 million euros predicted by analysts polled by Dow Jones Newswires.

    “The results to date are clearly encouraging,” ING chief executive officer Jan Hommen said in a statement. “We will work hard to build on these successes in the coming quarters, but we must remain vigilant as markets are still volatile and the economic recovery could prove fragile, as we have seen in recent weeks with severe market volatility amid concerns about sovereign risk.”

    ING reported an exposure of 3.2 billion euros to Greek government bonds, 2.8 billion euros to Spanish bonds and 1.6 billion euros to Portuguese ones. Its underlying net profit improved to 1,02 billion euros in the first quarter, compared to a 236-million-euro loss in the same period last year, the group added.

    Hommen said ING’s priority for 2010 was to finalise the separation of its banking and insurance activities “to improve the performance of both organisations to create strong independent companies going forward.” Announcing the split last October, ING said it would eventually lead to the sale of its insurance branch.

    ING said Wednesday its banking division had posted first quarter underlying profit before tax of 1.3 billion euros, up from 769 million last year. Its insurance activities posted a first quarter underlying profit before tax of 269 million euros — up from a 954-million-euro loss in the first quarter of 2009.

    “The performance of both businesses improved, while market-related impacts diminished in the first quarter as markets generally improved,” said Hommen. “Insurance sales regained momentum from the fourth quarter, and savings volumes increased although loan growth remained muted.”

    Loan loss provisions were decreased by loan restructuring and the stabilisation of the US housing market. “However risk costs on the Benelux mid-corporate segment remained elevated given the weak economic environment.” ING also announced having reduced the number of employees by five percent year-on-year to a total of 105,140 world-wide.

    The Hague, May 12, 2010 (AFP)

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      The boss of British insurer Aviva on Tuesday said there was a “very, very low” risk that Greece, Spain or Portugal would default on government debt.

      Chief executive Andrew Moss, speaking to reporters after Aviva gave a trading update, said the risk of default was “unequivocally very, very low in our view.”

      The comments come after the European Union and the International Monetary Fund gave their backing to a one-trillion-dollar (750-billion-euro) rescue package for crisis-hit euro countries to prevent contagion from Greece.

      “It has been clear some European countries’ budget deficits need to be resolved over time,” Moss said. “Therefore, seeing action with the larger countries in the European Union standing behind sovereign debt at this point is helpful, but the reality is that some of these countries would have to take action within their own economies to address their issues.”

      In the trading update, Aviva said its total exposure to debt securities of the governments of Greece, Spain and Portugal stood at 900 million pounds (1.16 billion euros, 1.33 billion dollars), with Greek securities accounting for 150 million pounds.

      Aviva also revealed a drop in sales of new life-and-pensions agreements in the first quarter, hit by lower contributions from North America. Britain’s second largest insurer said new sales fell 4.6 percent to 9.13 billion pounds in the three months to the end of March. That compared with 9.57 billion pounds in the same portion of 2009.

      London, May 11, 2010 (AFP)

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      Britain’s state-rescued lender Royal Bank of Scotland announced on Monday that it plans to axe 2,600 jobs.

      The bank, which is 83-percent owned by the British government after an enormous bailout, will cut 2,000 jobs at its insurance division and another 600 positions at its retail head office, a spokesman told AFP.

      “We are working hard to rebuild RBS in order to repay taxpayers for their support and having to cut jobs is the most difficult part of this process,” the spokesperson said. “We have strived at all times to be open and honest about the tough choices we are making.

      “We will do all we can to support our staff through this process and do everything possible to keep compulsory redundancy to an absolute minimum. “So far the job losses we’ve announced to date have resulted in fewer than one in four people being made compulsorily redundant.”

      There is no time frame for the job cuts, while the bank will concentrate its efforts on avoiding compulsory redundancies, according to the spokesperson. RBS had revealed last week that its net losses narrowed to 248 million pounds (287 million euros, 364 million dollars) in the first quarter, compared with one year earlier.

      The embattled bank, which was rescued at the height of the global financial crisis, had reported losses after tax of 902 million pounds in the first three months of 2009.

      London, May 10, 2010 (AFP)

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      Bristol-based legal insurance specialist ARAG won two awards last week at the prestigious Claims Technology Awards held in Manchester.

      ARAG’s combined After-the-Event (ATE) Claims & Underwriting departments was named outstanding team of the year and ARAG also gained the award for most innovative use of software by an insurer for its online ATE policy application and administration system, which is used by solicitors across the UK. ARAG was the only company to pick up two awards on the night.

      Tony Buss, ARAG’s managing director said he was delighted with the company’s double win: “This is great news for us and recognition of the terrific progress ARAG has made over the last three years. It’s been our aim to pioneer new types of legal expenses insurance and new approaches to doing business in this sector. These awards show we’re on the right track and our progress is making waves in our market.” Last week’s awards were held at the Lowry Hotel in Manchester.

      “The awards recognize the quality of our overall product and service, and further endorses the award of ATE Insurance Provider of the Year that we gained just 6 months ago,” added Mr Buss.

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        US President Barack Obama highlighted the benefits of the newly-adopted health care reform on Saturday, saying it had already made insurance companies more accountable.

        “Aside from providing real, tangible benefits to the American people, the new health care law has also begun to end the worst practices of insurance companies,” Obama said in his weekly radio address. “For too long, we have been held hostage to an insurance industry that jacks up premiums and drops coverage as they please,” he said, adding: “But those days are finally coming to an end.

        The health care legislation, passed by Congress and signed by the president into law in March, will extend medical coverage to an estimated 32 million Americans who currently lack it. It also bans insurance company abuses and stipulates that all US citizens have to buy insurance or face fines — a provision that has drawn lawsuits from several state attorney generals who claim it is unconstitutional.

        Among other key reforms, the legislation also bans insurance companies from denying coverage to people with pre-existing conditions, dropping clients who get sick or from setting lifetime caps. Republicans presented a united front in opposition to the bill, which also drew anti-reform protesters to Washington.

        Obama said his administration will be announcing a new rule on Monday that allows young adults without insurance to stay on their parents’ plan until the age of 26. “Even though insurance companies have until September to comply with this rule, we’ve asked them to do so immediately to avoid coverage gaps for new college graduates and other young adults,” the president said.

        Washington, May 8 (AFP)

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        Armies of lawyers are turning their sights to the massive oil slick spreading across the Gulf of Mexico, eagerly seeking damages from the companies at the center of the disaster.

        Lawyers who faced a massive onslaught of demands after Hurricane Katrina devastated the Gulf Coast in 2005 are now flooded with calls from oil workers and local fishermen eager to receive compensation for their losses. Judy Guice, an attorney based in Biloxi, Mississippi, said the oil spill “has the potential to dwarf Katrina” in terms of the number of lawsuits.

        “Katrina was a natural disaster. I had to deal with clients angry at their insurance companies. But the oil spill is a man-made disaster.” British energy giant BP, in trying to stave off the worst US environmental disaster since the 1989 Exxon Valdez spill in Alaska, is also facing an uphill PR battle to regain its environmentally friendly image, already tarnished by a 1995 explosion at a Texas refinery that left 15 people dead.
        Transocean Ltd, which owns the Deepwater Horizon offshore drilling platform leased to BP, is also the target of lawsuits, along with Halliburton, which was responsible for cementing the well to stabilize its walls. The rig exploded on April 20, killing 11 workers before it sank two days later. Over 210,000 gallons of oil are now spewing out of the ruptured well each day.

        “People do not necessarily want to sue BP right away,” said lawyer James Gardner, who says he is swamped with requests from prospective clients ranging from fishermen to a barber who claimed he might lose customers because people affected by the disaster could no longer afford a haircut.

        Gardner practices at three locations in Mississippi. Early this week, he and his associates took out ads in local media urging fishermen, boat owners and restaurant owners to call his office for a free consultation. Clyde Gunn, another attorney, says he was among the first to sue BP and other companies working on the rig.

        The class action lawsuit, of which AFP obtained a copy, was dated April 30, eight days after the platform capsized. A fisherman, a boat charter worker and three seafood firms in Mississippi are attacking BP and Transocean for “negligence” and say they have suffered an undetermined amount of monetary losses as a consequence of the blast.

        According to the lawyers contacted by AFP, at least 65 lawsuits have been filed against BP and its associates since the explosion. BP declined to confirm or comment. The company has said it would pay all “legitimate” claims. “It’s going to take years before those lawsuits get settled,” said Gunn, who recommended his clients to gather bills, tax filings and other documents to determine their losses compared to recent years.

        Biloxi boat rental business owner Jim Young said he was considering filing his own complaints against the culprits. “Until July, I had 65 reservations” he said were worth about 30,000 dollars. “But right now, it doesn’t look good at all.”

        In order to compensate his losses, Young decided to provide BP access to his 50-foot (15-meter) boat to BP to help in the cleanup effort as part of the company’s “Vessels of Opportunity” program employing fishermen to help protect the fragile gulf coastline. “They pay 2,000 dollars a day,” Young said, warning that “if they don’t call me, I’ll sue them. BP is going to owe a lot of money.”

        BILOXI, Mississippi, May 9 (AFP)

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        Bailed out US insurance giant AIG posted on Friday a better than expected net profit of 1.45 billion dollars in the first quarter, a huge turnaround from a heavy loss a year earlier.

        On a per share basis, excluding exceptional items, the first quarter profit for 2010 was 1.21 dollars, well above market expectations of 48 cents. The US insurer reported sales of 16.3 billion dollars for the first three months of the year.

        American International Group, which was saved from bankruptcy by the US government in September 2008, had suffered a loss of 4.35 billion dollars in the first quarter of last year.

        It returned to profit in the second and third quarters of 2009 before plunging back in the red in the last quarter, when it posted a loss of 8.87 billion dollars. AIG announced last month it was selling its Asian unit AIA to British insurer Prudential for 35.5 billion dollars and another unit, ALICO, to US rival MetLife for 15.5 billion dollars.

        The deals should allow AIG to pay back a huge chunk of its government bailout. “These transactions are expected to close by the end of 2010 and allow the company to substantially reduce its obligations to the Federal Reserve Bank of New York (FRBNY) and take a significant step toward a sustainable capital structure,” AIG chief executive Robert Benmosche said in the earnings statement.

        He added: “We remain focused on further stabilizing and strengthening our businesses while continuing our restructuring activities, closing the pending transactions, and developing plans to address our highly leveraged capital structure.”

        Washington, May 7, 2010 (AFP)

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        Scandinavian airline SAS said Friday it suffered at least 66 million euros in losses owing to a volcanic ash cloud from Iceland that grounded planes across Europe last month.

        “SAS estimates the negative impact on earnings up until May 7 to be between 650 and 700 million Swedish kronor (66.4 and 71.4 million euros, or 84.9 and 91.4 million dollars),” the company said in a statement. It added the estimate included lost booking up to May 7, additional costs for alternative transportation, and reimbursement to customers.

        “In addition to the damage inflicted to our passengers, the aviation industry lost more than 25 billion Swedish kroner (2.5 billion euros, 3.3 billion dollars),” SAS chief executive Mats Jansson stressed in the statement.

        He said SAS would, along with the industry, continue to work for compensation from EU and Scandinavian governments “based on a model that avoids distortion of competition,” as the “natural disaster” was not covered by airline industry insurance.

        SAS, whose main market is Northern Europe — which was particularly affected by the ash cloud and resulting airspace closure — estimated it has lost more than 600,000 passengers because of the chaos. It added its operations gradually returned to normal on April 20 after being halted from April 15 to 19, but that booking in May and June had been affected.

        The airline said it had carried some 1.6 million passengers in April compared to 2.2 million in April 2009, which indicated a “small underlying passenger increase,” after the volcano’s effect was taken into account.

        Stockholm, May 7, 2010 (AFP)

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          The owner of the rig at the center of the Gulf of Mexico oil disaster said Thursday it had set aside 200 million dollars to pay for what now threatens to become an environmental catastrophe.

          Transocean, the world’s largest offshore drilling contractor, said it still did not know why the Deepwater Horizon exploded, killing 11 people, and said it was “inappropriate” to speculate on the causes of the April 20 disaster.

          Two days after the blast, the semi-submersible platform sank 50 miles (80 kilometres) off the ecologically fragile Louisiana coast and started spewing out an estimated 5,000 barrels, or 210,000 gallons, of crude each day from leaks in the riser pipe that had connected it to the wellhead. “We will be dealing with the emotional consequences for some time,” Steven Newman, the CEO of the Swiss-incorporated firm, which has its main headquarters in Houston, Texas, told investors.

          Transocean, which leased the rig to the British energy giant BP, said it had received 581 million dollars in insurance payments and was covered for around one billion dollars, including personal injury claims. Newman said its contract made clear that BP would be responsible for any liability. “We expect that BP will honor that contract,” he said.

          The company reported profits of 677 million dollars in the first three months of this year, but said the costs of the disaster would be felt in the next quarter. Frantic efforts are under way to clear up the giant slick created by the spill before it makes landfall and to permanently seal leaks in the riser pipe, which now lies fractured 1,500 meters (5,000 feet) down on the seabed.

          Gulf of Mexico coastal communities from Texas to Florida are anxiously waiting to see if attempts by BP to contain the leaks with a massive dome are successful, otherwise the oil could be leaking for months.

          Washington, May 6, 2010 (AFP)

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          Aon’s International Space Brokers, the largest specialist risk adviser in the sector, today announced the launch of Investment Protection Insurance, a game-changing policy for space investors. IPI is the first policy strictly for investors, and is designed to cover the loss of an investment in a space satellite, launch failure and satellite assets.

          Previously, investors could not protect their financial interest due to lack of insurance capacity and first-party rights to the spacecraft. For start-up companies, which rely on the revenue generated by the early launches, the ability for the satellite to be successful is crucial. IPI is the solution, enhancing the satellite operator’s initial credit rating by relieving investors of the biggest risk – failure to launch.

          “Aon used its leverage with the insurance markets to introduce new capital, supporting both investors and operators by protecting their investments,” said Clive Smith, space business unit leader for Aon’s International Space Brokers. “As developments continue to increase for areas such as delivering broadband as well as pollution and disaster monitoring, lack of liquidity in the financial markets has delayed industry growth. IPI will restore that growth.”

          A claim will be triggered by any damage to or total loss of the satellite. The policy will react to fluctuations in bond yield and the share price before and after the launch or orbit. It pays an amount that recoups the loss of the publicly or privately traded securities of the satellite operating company in which the insured has invested. In the event of a loss paid, the insurers will receive the securities as salvage.

          “IPI will benefit companies beyond the space industry. Aon is already looking into applications in industries with similar needs that have a technical and financial trigger, which will help avoid the product slipping into the area of financial guarantees,” said Michael Hewins, chief commercial officer of Aon’s International Space Brokers.

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          Swiss insurer Zurich Financial Services on Thursday said its first quarter net profits soared 76 percent to 935 million dollars (729 million euros), despite high claims from the earthquake in Chile.

          The earnings marked a sharp improvement from profits of 532 million dollars a year ago, and beat analysts forecasts of 860 million dollars, according to a poll conducted by economics newswire AWP. “Our general insurance business successfully maintained its focus on protecting profit margins, managing to absorb both the significant impact from the Chilean earthquake as well as the top-line pressures driven by reduced economic activity among our customers,” said the group’s chief executive Martin Senn in a statement.

          Chile’s earthquake in February had a major impact on the group’s general insurance business, which saw its business operating profit fall 30 percent to 621 million dollars. In addition, “the worst winter weather in many years in Europe and parts of the US as well as a high incidence of hail and storm damage in Australia, all… contributed to deterioration,” said the group. The group’s US subsidiary Farmers Management Services meanwhile saw business operating profit soar 43 percent to 462 million dollars, thanks to an acquisition as well as an improvement in premium volumes.

          Zurich, May 6, 2010 (AFP)

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            Swiss Re, one of the world’s biggest reinsurers, on Thursday reported a surge in first quarter profit although its results were dampened by losses from Chile’s earthquake and European storm Xynthia.

            Net profit rose by 21 percent to 158 million dollars (116 million euros) in the first three months of 2009 against 130 million dollars a year earlier, the company said in a statement. “In the first quarter of 2010, we continued to deliver strong underlying performance, even though the result was impacted by high natural catastrophe losses, mainly from the earthquake in Chile and European winter storm Xynthia,” said chief executive Stefan Lippe.

            “While natural catastrophes like these can contribute to earnings volatility, protecting our clients against such extreme events is the essence of our business model,” he added. The company’s quarterly net profit had reached 403 million Swiss francs (362 million dollars, 281 million euros) in the final three months of 2009.

            The reinsurer provisionally estimated that it would have to foot about 200 million dollars of losses from the Deepwater Horizon oil rig blast in the Gulf of Mexico on April 20. The total insurance industry payout could reach 1.5 billion to 3.5 billion dollars, it added in a provisional estimate of the cost of the disaster to the industry.

            Swiss Re said it had to foot about 500 million dollars in claims from the 8.8-magnitude quake and a tsunami that struck south-central Chile on February 27, killing 486 people. Swiss Re’s share of the insurance payout after storm Xynthia, which left 62 people dead when it struck the Atlantic and North Sea coasts of Europe in March, reached 100 million dollars.

            Those claims offset a strong revival from record losses in the financial crisis by depressing operating income in the company’s property and casualty division, which dropped by 69 percent year-on-year to 259 million dollars in the first quarter. Swiss Re said it had further strengthened capital reserves that had been were severely eroded by massive investment losses in the financial crisis.

            By the end of March, core excess capital increased to more than 12 billion dollars. The company gave a cautious outlook on the year ahead, as it hoped that recent disasters would help re-evaluate risk and allow insurance pricing to recover. “Primary insurance volumes and prices remain under pressure, delaying the hardening of the reinsurance market,” said Lippe.

            Zurich, May 6, 2010 (AFP)

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            Chinese regulators have approved a plan by Shenzhen-based powerhouse Ping An Insurance to buy a stake in Shenzhen Development Bank from US private equity firm TPG, Ping An said Wednesday.

            Shenzhen Development Bank, also based in the booming city neighbouring Hong Kong, is one of the few local banks licensed to operate nationwide with more than 300 branches across China. Ping An agreed in June to buy up to 30 percent of Shenzhen Development Bank by buying a 16.76 percent stake from the lender’s biggest shareholder Newbridge Capital, the Asian arm of TPG, and through a separate private share placement.

            On Wednesday Ping An said the China Securities Regulatory Commission had approved a plan to issue 299.09 million Hong Kong-listed shares in exchange for 520.4 million shares of Shenzhen Development Bank held by Newbridge. Ping An aims to build itself into a financial conglomerate with insurance, banking and asset management divisions.

            Ping An, which previously held less than five percent of Shenzhen Bank, had to extend the deadline for the 3.2-billion-dollar proposal from the end of 2009 to April 30 as it awaited regulatory approval. The company has now also received a green light from the China Insurance Regulatory Commission, the Ministry of Commerce and the China Banking Regulatory Commission, it said in the statement to the Shanghai Stock Exchange.

            Shanghai, May 5, 2010 (AFP)

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            British insurer Prudential on Wednesday said it had decided to delay launching a rights issue aimed at helping to fund a 35.5-billion-dollar takeover of AIA, the Asian arm of troubled US insurer AIG.

            Prudential, which had been expected to reveal details of its launch for a rights issue worth about 20 billion dollars on Wednesday, said it had been forced into a delay as it was still in talks with British regulators.

            The insurer added that it still expected to complete the sector’s biggest-ever takeover during the third quarter in 2010. “Prudential has decided to delay the pricing and launch of the rights issue whilst it seeks to bring its discussions with the FSA (Financial Services Authority) to a conclusion,” the insurer said in a statement.

            It added that discussions were ongoing “in particular in relation to the capital position of the enlarged group”. Prudential said it did not expect the delay “to affect the overall timing for the completion of the transaction set out on 1 March 2010. “Other regulatory and anti-trust approvals are progressing as planned and it is still anticipated that completion of the transaction will occur during the third quarter of 2010,” it added.

            In reaction, Prudential’s share price rose 0.45 percent to 561 pence on London’s benchmark FTSE 100 index, which was down 0.12 percent at 5,404.79 points in early trade. Prudential chairman Harvey McGrath said his company remained “entirely committed” regarding the AIA takeover. “The work completed since 1 March with the AIA and Prudential teams has convinced me more than ever that the enlarged group will be in a position to capture sustainable and highly profitable growth and will deliver substantial long term value for our shareholders,” he added in the company’s statement.

            Alongside the rights issue, London-listed Prudential is planning to begin trading existing shares in Hong Kong and Singapore later this month. The planned listings in Asia is seen as a move to garner support from regional investors for the mega rights issue, which needs 75 percent of voter support at a meeting scheduled for May 27. The Hong Kong and Singapore listings will be done by way of introduction, which means adding trading venues without issuing new shares.

            Meanwhile the buyout of AIA will double the size of Prudential and transform it into the world’s top non-Chinese insurer by market capitalisation, ahead of major competitors Allianz and AXA. Sales in Asia already make up half of new contracts for Prudential across a number of countries including China, India, Indonesia, Malaysia and Thailand. The company also has a strong presence in Britain and the United States.

            The purchase of AIA also allows AIG to repay the US government a huge chunk of debt and emphasises a renewed pick-up in cross-border takeover activity since the start of 2010 as the global economy recovers from its deep downturn. AIG has been forced into giving up some of its assets after the company’s near collapse in the depths of the financial crisis led the US government to hand it a bailout of around 180 billion dollars.

            London, May 5, 2010 (AFP)

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              The German insurance giant Allianz said on Wednesday that its first-quarter operating profit gained 21 percent from the same period a year earlier to 1.7 billion euros (2.2 billion dollars).

              The increase came from stronger life and health insurance sales along with profitable asset management activities, a statement said. Allianz’ operating profit suffered however from “more than 500 million euros” in charges stemming from natural disasters in the first three months of the year.

              Overall sales edged higher to 30 billion euros, from 27.7 billion, the statement said. Allianz held its general assembly on Wednesday in Munich, southern Germany, and is to release detailed results on May 12.

              Frankfurt, May 5, 2010 (AFP)

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              Aon Benfield, the world’s premier reinsurance intermediary and capital advisor, today releases its latest Monthly Cat Recap report, which provides an analysis of global natural perils in April.

              Published by the Impact Forecasting team, Aon Benfield’s catastrophe model development center of excellence, the report highlights that a series of earthquakes in Baja California dominated United States natural hazard activity in April. The epicenter of the main earthquake was 11 miles west-southwest of Guadalupe Victoria in Mexico and the Mexican town of Mexicali was hardest hit by the event, with 25,000 residents left homeless and two people killed.

              Economists in Mexico estimated the economic damage to be greater than MXN12.3bn (USD1bn), and insured losses more than MXN3.7bn (USD300mn). The earthquake was also felt in Southern California, where the town of Calexico was most affected with total economic losses across Imperial County, California, estimated at USD91mn.

              Steve Jakubowski, President of Impact Forecasting, said: “The Baja California earthquake was of magnitude 7.2, which makes it a strong quake and one that was felt throughout northwestern Mexico. It also impacted southern California, but economic losses, insured losses and loss of life or injury were far lower due to a lower population density and more robust structures. This event is also a reminder that, based on historical activity, California is overdue for a significant earthquake.”

              The Recap report states that Asia suffered a series of natural perils in April. Severe thunderstorms killed more than 137 people in eastern India and Bangladesh, damaging or destroying in excess of 200,000 homes and leaving at least one million people homeless – possibly the greatest number of people ever to be left homeless as a result of thunderstorm.

              In China, a strong earthquake in Qinghai Province killed at least 2,220 people, injured more than 12,000 others and damaged or destroyed 25,000 structures, while heavy rainfall in Hunan Province and southern China led to several deaths and the destruction of thousands of homes. A fierce sandstorm in Gansu Province damaged more than 1,000 homes as well as more than 206,800 hectares (511,000 acres) of crops.

              Additionally, a magnitude-7.7 earthquake in Northern Sumatra, Indonesia injured at least 62 people and damaged more than 1,000 homes. Meanwhile, in Europe the eruption of a volcano under an Icelandic glacier mid-month proved to be one of this year’s most disruptive and costly natural hazards.

              While there was no loss of life or known damage from the event, a plume of ash emanating from the volcano resulted in the cancellation of 102,000 flights globally and extensive disruption for more than seven million travelers. With airplanes remaining grounded over a period of days, airlines’ lost revenue was estimated at EUR2bn (USD2.6bn), while insurance losses were relatively very minor – forecast at EUR7.4mn (USD10mn).

              In South America, heavy rains inundated northeast Peru, killing at least 28 people and injuring 54 others. Meanwhile, the heaviest rains in 48 years led to severe flooding in Brazil, killing 256 people and injuring hundreds more, and causing an estimated economic loss of BRL370mn (USD207mn). And in Western Australia, a magnitude-5.2 earthquake damaged at least 80 buildings and precipitated a AUD5mn (USD4.6mn) relief effort to restore damaged heritage-listed structures.

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              Leading engineering specialist insurer HSB Engineering Insurance Limited has launched an equipment breakdown product which addresses the green issues faced by businesses, helping them reduce their carbon footprint and gain energy efficiency savings.

              In the event of a failure, HSB’s policy will contribute towards the additional costs of replacement equipment that is more efficient and better for the environment.

              The enhanced policy covers the spectrum of machinery from standard items such as boilers, lifts, air-conditioning and other electrical and mechanical building services systems to highly-specialised equipment for printing and manufacturing. The policy is available on an itemised or blanket basis and also includes cover for temporary plant hired in following a loss and emergency services call out costs.

              UK chief executive officer and managing director Stephanie Watkins said: “The proliferation of new technology and sensitive high-tech equipment means that all kinds of businesses are becoming increasingly reliant on technology. This means breakdowns are a big risk for business in the 21st Century. HSB has designed a product that, not only provides breakdown cover, but responds to the increasing demand for greener and more efficient equipment.”

              She continues: “Currently the take-up of equipment breakdown insurance is relatively low in the UK and is often purchased on an itemised basis. Blanket cover can completely protect businesses as they become more and more reliant on technology and, because excesses are slightly higher, it is also very cost effective.”

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              South Korea’s biggest initial public offering has drawn a huge response from investors, a brokerage said Tuesday, with shares in top insurer Samsung Life more than 40 times oversubscribed.

              Samsung Life Insurance is offering 44.44 million shares at 110,000 won (99 dollars) with 20 percent for small domestic retail investors, 40 percent for foreigners and 20 percent each for local institutional investors and employees. Six securities firms offering the shares had accepted a subscription of 40.6 times the allotted amount for retail investors, said main underwriter Korea Investment and Securities.

              They took in a record amount of subscription deposits valued at 19.84 trillion won, it said. Analysts said Samsung Life’s status as the country’s leading life insurer gave its shares premium value. “Many investors are reacting positively to the listing of Samsung Life shares,” Tong Yang Securities analyst Lee Jae-Man told AFP, adding that it would allow its parent to put more cash aside for investment.

              With annual revenue of around 22 billion dollars, Samsung Life controls a 27.9 percent share of the life insurance market. The prospect of solid institutional purchases also helped fuel retail investors’ appetite. In terms of the IPO price, Samsung Life Insurance will become the sixth largest firm on the main bourse by market capitalisation, with 22 trillion won when it makes its market debut next week. Samsung Life has long been regarded as the virtual holding company of the Samsung group, which has 64 units including Samsung Electronics, the world’s largest computer memory chip maker.

              Seoul, May 4, 2010 (AFP)