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EC Insurance Holdings Ltd (ECIH) announced that Gavin Richardson and Mark Crilley have both been appointed as ECA nominated Non-Executive Directors on the boards of EC Insurance Holdings Ltd (ECIH) and its subsidiaries Electrical Contractors’ Insurance Company Ltd (ECIC) and Electrical Contractors Insurance Services Ltd (ECIS). 

Gavin has almost 20 years experience in the electrical technology industry and has set up his own businesses OPUS Green, where he is currently Director and OPUS Building Services where he is currently Managing Director. His previous roles include Project Manager at Lorne Stewart, Regional Mechanical and Electrical Manager at Syncro Projects and Electrical Project Engineer at ABB Building Technologies Ltd.

Mark has over 30 years experience in the electrical contracting industry and currently holds the role of Managing Director for Marcoe Electrical Ltd (MEL), where he has worked on contracts such as the Olympics Aquatics Centre and Water Polo venues. In addition Mark is Managing Director at JBOS Holdings Ltd, the property development business he established. He also previously held the role of Director at Amerco Electrical Distributers Ltd.

Roger Brown, Managing Director for ECIH, commented: “Both Gavin and Mark have extensive knowledge of the electrical contracting industry and will be representing the members of our parent trade association, the Electrical Contractors’ Association (ECA). We very much welcome the insight they will bring and the board look forward to working with them both, to support the overall plans and objectives for the group.”

Gavin added: “I am delighted to be joining the ECIH board. I have been an ECA member throughout my career and know the great work they do for contractors. I see this as an opportunity to give something back to the association and the industry and look forward to working with both the ECA and the ECIH group.”

Mark continued: “ECIH has had a successful 2012 and I envisage next year will be even more prosperous. I look forward to being a part of the business and sharing my knowledge and experience with the team.”

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Swiss Re’s latest study, “Global re/insurance review 2012 and outlook 2013/14” provides a mildly optimistic view of the future of the global economy and insurance markets. Economic activity is expected to be moderately stronger next year and insurance pricing is projected to improve. Global non-life direct premiums are projected to grow by 3% in real terms, fuelled by emerging market growth of nearly 8%. After not growing this year, primary life insurance premiums are expected to increase by about 2% next year as emerging markets strengthen and advanced markets recover from a decline last year. Non-life reinsurance markets will continue to grow, while life reinsurance shrinks.  

The global economy is currently fairly weak, but an improving housing market in the US, fiscal and monetary stimulus in China and a slow turnaround in the Euro area are expected to boost growth in 2013. Monetary policy will remain accommodative in the major economies well into 2015, providing the stimulus necessary to sustain growth, but with low interest rates reducing insurers’ investment returns. Inflation will stay tame since wage gains will be modest given the only gradual decline in unemployment rates. Kurt Karl, head of Swiss Re’s sigma program and an author of the report, emphasized:  “Global growth will not be robust next year, but any improvement is welcome in these stressful times.”

Topline growth and stronger pricing power in non-life insurance during 2012 will continue into 2013
Growth in non-life premiums accelerated a bit in 2012 and this will continue into next year as rates rise at a moderate pace. Underwriting results improved in 2012, compared to 2011 – a year with high catastrophe losses. Rates were stable to slightly up this year, but not enough to compensate for decreasing investment yields. Next year, reserve releases are expected to dry up, supporting a stronger pace of price increases, particularly in the casualty lines. Currently, capacity is adequate, but appears robust under GAAP accounting due to low interest rates which boost the mark-to-market value of insurers’ bond portfolios. Thomas Holzheu, one of the authors, clarified: “The expected price increases in the casualty lines will likely be gradual due to the weak economic environment and fierce competition.” Developments in the reinsurance segment are following the primary sector closely, but profits will be slightly lower due to a higher-than-average cat year. This outlook assumes that the estimates for losses from Hurricane Sandy are consistent with recent forecasts from the major cat modelers.

Interest rate squeeze on life insurance continues

Global primary life premium growth was close to zero this year, but is expected to be better next year. Emerging markets, in particular, are expected to have stronger premium growth as India and China more fully adjust to regulations passed in 2010/11.  Advanced markets will also have positive real premium growth as many markets, including the US, Canada and Australia, rebound from declines in 2012. Stronger economic activity and rising interest rates will fuel the modest uptick in growth. Growth will improve in all product lines, including savings, term life and disability lines. Profitability will remain constrained, however, because investment yields will continue to decline as bonds mature and must be replaced with lower yielding assets. Also, regulatory changes are expected to have a greater impact on life insurance business. Finally, life insurers with large books of savings products with rigid guarantees will particularly struggle until interest rates rise.

The life reinsurance segment will continue to contract as regulatory challenges undermine its value proposition. Reinsurers are seeking to grow premiums by expanding in emerging markets, taking on large transactions which provide capital relief and through new products, such as longevity reinsurance. Profitability of life reinsurers is challenged, as is the industry, by the low interest rate environment. However, reinsurers do not typically have large books of savings products with guarantees.

Opportunities in emerging markets for 2013

After struggling in 2011 and 2012, life insurance premium growth is expected to rebound in Emerging Asia next year, growing by about 5% in real terms. Clarence Wong, Swiss Re Chief Economist for Asia who also contributed to the report, pointed out:  “All emerging market regions are expected to maintain robust growth in life and non-life premiums next year.” Growth in life insurance will increasingly focus on risk products because regulatory changes and low investment yields will continue to dampen savings product growth. Huge protection gaps, which exist in many key emerging markets including India and China, will help drive the shift to risk products. In the Middle East and Latin America, life insurance premium growth will continue to be robust. In Central and Eastern Europe premium growth will moderate a bit along with economic activity as the Euro debt crisis continues. Non-life premium growth moderated from about 9% growth in 2011 to 8% growth in 2012. Cat losses were fairly low in emerging markets so underwriting profitability improved. Premium growth will be driven by the growing wealth in emerging markets, which has been particularly beneficial to motor lines. Ongoing regulatory developments will strengthen the industry and enhance profitability in the long run.

Global non-life reinsurance premiums and GAAP capital 

The figure above illustrates that, excluding the mark-to-market benefit of lower interest rates (dashed line), global non-life reinsurance capacity has been stable, even while risk premiums have risen.

Source: Swiss Re Economic Research & Consulting

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Innovative PMI and Vitality wellness programme provider PruHealth has broken new ground in PMI cover with the announcement of a range of enhancements to the cover it offers.

One such PMI innovation includes help with recovery at home following discharge from hospital. The Assistance at Home cover is provided by Aria Assistance, a partner able to deliver a consistently-reliable service nationwide from day one.

Assistance at Home cover helps people to recover at home by providing assistance when they most need it – immediately after discharge from hospital. It can include help with getting in and out of bed, bathing and showering, cooking, cleaning and laundry. The Assistance at Home cover is available to all eligible PruHealth individual, corporate and SME members.

PruHealth chief executive Neville Koopowitz said: “These new services will only add real value if they are delivered effectively and to a high standard, and Aria Assistance is a partner that we can trust to do that. It was critical that we found a partner with the competency and the people in place to deliver both locally and nationally: Aria Assistance clearly demonstrated that ability, as well as sharing our enthusiasm to develop something new.”

Aria Assistance CEO Patrick Leroy said; “The addition of Assistance at Home cover as part of a fully-integrated service offers a genuine benefit to those in need of assistance at the time they need it most.  We have enjoyed working with PruHealth to bring this ground breaking service to market and will continue to differentiate ourselves by demonstrating out passion for innovation.

“For many people, the most positive medical outcome – that is to say a speedy return to full health and work – will depend on well-managed and supported recuperation.

“When we launched Aria Assistance we promised to bring innovative ideas and products to market, and this is a good example of how we are fulfilling that promise. We are in a unique position with a nationwide, top-quality support network and are able to co-ordinate help from our established assistance centres that consistently set standards others can only follow.

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US government-controlled insurance group AIG said Friday it was in talks to sell a majority stake in International Lease Finance Corporation (ILFC) to a consortium of Chinese companies.

American International Group said the Chinese companies could buy 90 per cent of ILFC, one of the world’s top aviation leasing firms with more than 1,000 owned and managed aircraft.

The Chinese companies are led by New China Trust, New China Life Insurance, and P3 Investments, along with China Aviation Industrial Fund and an investment arm of Chinese bank ICBC International, AIG said.

No pricing details were available, but AIG stressed that the possible sale of part of its 100 per cent stake in ILFC has always been possible.

“AIG has consistently stated that ILFC is a non-core asset,” it said in a statement.

It emphasized as well that the sale would require approval by regulators in China and the US. The US government threw some $182 billion into the rescue of AIG at the height of the financial crisis four years ago, and has slowly been clawing back its investment by pushing AIG back to profitability and selling off its own shares in the company.

Washington, Dec 7, 2012 (AFP)

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Asian insurance giant AIA said Wednesday it had completed the takeover of Sri Lankan insurer Aviva NDB Insurance for $109 million, further increasing its presence in Asia. 

Hong Kong-listed AIA, which is partly owned by troubled US insurance giant American International Group (AIG), said it bought a 92.3 per cent stake in Aviva NDB from British insurer Aviva and Sri Lanka’s National Development Bank (NDB).

“Sri Lanka is AIA’s 16th market in Asia Pacific and adds further strength to the group’s position as the leading pan-Asian insurer,” the company said in an emailed statement.

AIA, which has also entered into an exclusive 20 year bancassurance agreement with NDB, said its acquisition will be financed by its existing cash resources.

The remaining 7.7 per cent stake in Aviva NDB Insurance represents shares publicly traded on Sri Lanka’s Colombo stock exchange. AIA said it will not make any offers for the remaining shares.

AIA in October announced that the value of its new business in the three months to August 31 grew 22 per cent year-on-year to $300 million, driven by growth in the Singapore, Indonesia and the Philippine markets.

The firm raised $20.5 billion in an initial public offering in 2010.

Hong Kong, Dec 5, 2012 (AFP)

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The Financial Services Authority (FSA) has proposed new rules and regulations for financial benchmarks. This follows the recommendations of the Wheatley Review of the London Interbank Offered Rate (LIBOR).

Benchmarks are used across financial markets in a broad range of activities.  They have historically been set by the financial markets themselves, and existed outside of any regulatory regime.  In the case of LIBOR, this industry-led approach has failed.  On 2 July 2012 the Chancellor of the Exchequer commissioned Martin Wheatley, managing director of the FSA and CEO designate of the Financial Conduct Authority (FCA), to undertake a review of the structure and governance of LIBOR and the corresponding criminal sanctions regime.

On 28 September 2012 ‘The Wheatley Review of LIBOR’ was published, which included a 10-point plan for comprehensive reform of LIBOR. One of its key recommendations was that while the setting of LIBOR should remain an industry-led activity; the submission to, and administration of, the rate should be regulated by the FCA. On 17 October 2012 the government accepted the Review’s recommendations in full, and amended the upcoming Financial Services Bill (the Bill) accordingly.

The FSA has considered both the Wheatley Review recommendations and the Treasury’s proposed legislative amendments in designing an approach to regulating the setting of benchmarks. At least initially, the only ‘regulated benchmark’ in the UK will be LIBOR. However, the new regime provides a framework for regulation that can be extended to cover additional benchmarks in the future, were the government to consider it appropriate to do so.

The proposals include:

– Benchmark administrators will be required to corroborate submissions and monitor for any suspicious activity;

– Those submitting data to benchmarks will be required to have in place a clear conflicts of interest policy and appropriate systems and controls. This will result in clear, robust rules which will give firms and their employees comfort that the regulatory regime clarifies what is expected of them; and

– Two new significant influence controlled functions created under the FSA’s

Approved Persons Regime for the administrator and submitting firms.

The FSA also seeks comments on ensuring the continuity of LIBOR and broadening participation in the rate. The Wheatley Review concluded that global markets benefit from the continuing participation of major firms in the LIBOR panels and that market integrity could be undermined if submitting firms were to leave them.  In addition the Review noted that larger panel sizes would benefit the accuracy and reliability of the benchmark.

As a consequence, the FSA has asked for feedback on how best to broaden the participation in LIBOR panels, including the use of the FCA’s powers to require firms to contribute to the rate on a permanent basis which the government is proposing to grant. As set out in chapter 4 of the Consultation Paper, it would be beneficial to the quality of the LIBOR benchmark, and therefore wider market integrity, if firms were to review their LIBOR participation against the FCA’s suggested criteria and approach the administrator with a view to submitting to LIBOR Panels if they concluded that this was appropriate.

Martin Wheatley, managing director of the FSA and CEO designate of the FCA, said: “Confidence and trust are critical to financial markets. The disturbing events uncovered in the manipulation of LIBOR have severely damaged that trust. Today’s proposals will bring in clear rules for the setting and governance of benchmarks and are a key step to ensuring the integrity of LIBOR.”

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MetLife’sUKbusiness has been voted Financial Adviser Company of the Year 2012 by theUK’s independent financial advisers (IFAs). It is the second time in three years that MetLifeUKhas won this highly regarded industry award which is organised by Financial Adviser, the Financial Times Group’s leading IFA publication.

In addition to Company of the Year, MetLife also retained its 5 Star Service Awards for Life, Pensions and Investments for the third year running, scoring very highly across a wide range of performance measures.

Dominic Grinstead, Managing Director, MetLifeUK, said: “The achievement reflects a superb team effort by everyone in theUKbusiness and is all the more remarkable given that we only recently celebrated our fifth anniversary.

“Core to our strategy is listening to the needs of financial advisers and their customers so that we can deliver innovation, value and an enhanced service proposition.

“We passed the £3 billion assets under management milestone this year and have a clear growth strategy in theUKfocused on the intermediary market and innovation in the retirement income, investment and employee benefit sectors.”

In February, MetLife launched its Managed Wealth Portfolios managed by world-leading asset manager BlackRock, which help savers better manage market fluctuations while still having the potential to achieve growth.  Their launch enabled MetLife to enhance its product range through the introduction of annual unlimited lock-ins of potential gains on its range of capital and income guarantee products, and to offer an enhanced annual deferred income increase of 4.25% on its income guaranteed products.

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    New analysis from independent insurance industry experts Consumer Intelligence has unveiled the fastest growing home and motor insurance providers for 2012.

    The data, from Consumer Intelligence’s Insurance Behaviour Tracker product, comes from in-depth analysis1 of the car insurance and home insurance markets through 48,000 consumer interviews over the last 12 months.

    Among the home insurance brands that have attracted the greatest net number of customers this year are John Lewis, Saga and Swift Cover. Motor insurers who have grown the most include Allianz, Hastings and LV.

    However, Aviva, Axa, Sainsbury’s, Sheila’s Wheels and Swinton achieved top 10 places in both the home and motor lists, meaning they can be considered the most successful brands of 2012.

    Ian Hughes, Chief Executive of Consumer Intelligence, explained: “Insurance customer behaviour has been affected by a great number of factors during 2012, including the impact of new legislation and on-going economic concerns. The insurers who have made the most progress this year have addressed these concerns in their own ways, from Swinton’s low-cost approach to Sainsbury’s clever use of the Nectar scheme to offer discounted insurance as well as shopping rewards.”

    Insurance providers that have shown the most growth in 2012

    Top 10 HOME insurance providers for growth in 2012

    (in alphabetical order)

    		 Top 10 MOTOR insurance providers for growth in 2012

    (in alphabetical order)
    Aviva 1st Central
    Axa Allianz
    Esure Aviva
    John Lewis Axa
    L&G Hastings
    Saga LV
    Sainsbury’s QuoteMeHappy
    Sheila’s Wheels Sainsbury’s
    Swift Cover Sheila’s Wheels
    Swinton Swinton

    Source: Consumer Intelligence

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    Auto-Enrolment (AE) will continue to dominate the UK pensions landscape for the forthcoming year, according to Jelf Employee Benefits. The company expects that the entire pensions industry’s resources will be stretched to, or beyond, capacity in dealing with AE planning for SMEs given the late notification about the final AE legislation; the wider uptake of pensions across the board; and the impact of the Retail Distribution Review’s on the industry

    Steve Herbert, Head of Benefits Strategy at Jelf Employee Benefits said: “The pensions industry has a lot on its plate in 2013 and although Auto-enrolment (AE) began in earnest in September 2012, I believe we’ve only just touched the tip of the iceberg. Many of the larger employers already had some pensions experience – but we are about to head into unchartered territory with many smaller enterprises. We believe a perfect pensions storm could be brewing.”

    Jelf Employee Benefits’ DC Pensions Predictions for 2013:

    – Increased Auto-Enrolment Activity:
    2013 is likely to see the UK’s SME community finally taking serious action to prepare and implement Auto-Enrolment. Many SMEs enrol in 2013, or early 2014, so with only a matter of months left to prepare, employer activity will suddenly increase significantly, particularly given the potential penalties for non-compliance with AE duties. The legislation really is very complex and challenging, even for employers who have previously engaged with company-supported pensions, so it’s likely that most employers will be seeking professional assistance in this area. Which leads us to the second point.

    – Industry Capacity:
    The entire pensions industry is going to be stretched very thin for the next two years. With the final drafts of AE legislation requirements taking place very late in the day, and thousands of employers (not to mention millions of employees) engaging with pensions at a much higher level than before, the industry will be working flat-out to ensure that existing customers and clients are in a position to comply with AE duties. This will be an unprecedented spike in activity for the pensions industry, which will create a major capacity problem at just the point when UK employers need help the most. And this will not be helped by…

    – The Retail Distribution Review (RDR):
    The unfortunate timing of the RDR (1 January 2013) will mean that many SMEs who had yet to take action with regard to Auto-Enrolment will now be left with an additional cost for consultancy services. The FSA appear to have only recently decided that the proposed solution [to the removal of traditional factored commission] will not be allowed where this commission structure reduces the amount invested in a pension plan below the Auto-Enrolment minimum. And there are also questions about whether it could even work for higher levels of pensions contributions.

    Steve Herbert, Head of Benefits Strategy at Jelf Employee Benefits said: “The recent tweaks to the RDR basis should have been made clearer much, much sooner. The pensions industry has spent millions of pounds, and thousands of hours, creating a new charging structure which is redundant before it even begins, and in doing so has not been able to commit as much time and expertise as would have been liked to help employers comply with Auto-Enrolment. Sadly the result is likely to see many SMEs defaulting to the lowest level of employer engagement with pensions, given that they will struggle to meet the AE costs in the current economic climate.”

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    Transactor London Market (TLM) announces it will move into the London Underwriting Centre (LUC), at 3 Minster Court, London, on February 1st 2013. This follows significant growth in its first full year of trading including major orders from Barbican, Walsingham Underwriting, and the Bollington Group.

    TLM, the specialist London Market subsidiary of Transactor Global Solutions Ltd (TGSL), provides highly configurable, flexible, functional and cost effective technology solutions to the London Market via a dedicated London presence in the square mile with access to cost effective resources in the UK and Europe.  Established in 2011, TLM focuses on Cover holders and MGA operations writing speciality lines on binding authorities for Lloyd’s and London Market capacity providers.

    Chris Newman, TLM’s Chief Executive Officer, said, “Our primary aim is to provide existing and ‘new entrant’ MGAs with a complete turnkey solution using a version of the class leading Transactor insurance enterprise which covers the full range of insurance processes. TGSL already had a significant presence amongst the insurance broking community with its leading product set Transactor, but the formation of a specialist London Market company last year allowed us a greater focus on this target community.”

    Ray Vincent, Chairman of TLM and Chief Executive of parent company, Transactor Global Solutions, said “The board of TGSL is committed to providing the insurance industry globally with a total supply chain solution. TLM has had a fantastic first year, and together with the Enterprise Division of TGSL, we will now dedicate this part of our business to providing mould breaking technology for capacity deployment operations, with all the routes to market open for both direct and B2B channels.”

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    As Financial Planning Week draws to a close, the final Institute of Financial Planning (IFP) poll, which was conducted by YouGov for Financial Planning Week in association with Liontrust, questioned over 1,000 people across Britain, has produced some particularly interesting results.

    In it, the survey of GB adults asked whether they are likely or unlikely to consider investment in the stockmarket in 2013 in the hope of gaining improved returns over those available from bank or building society deposit accounts. The poll found that people are not in the mood for taking risks, preferring to play it safe instead:

    – Only 10% are likely or very likely to consider stockmarket investment next year in the hope of gaining improved returns over those available from bank and building society deposit accounts

    – Women appear to have even less confidence than men to invest, with just 7% saying they are likely or very likely to do so compared to 14% of men

    – Two thirds (66%) of those aged 55 and over say that they are very unlikely to consider investing, with only 8% being likely or very likely to do so

    – 71% of people aged between 18-34 are unlikely or very unlikely to invest, showing that even those who could be saving for their long term financial future are still risk averse.

    The worry is that savers are paying a high price for a safe place to keep their savings. Bank and building society deposit accounts might appear to be more risk averse, but there is an elephant in the room – inflation.

    With the returns available from deposit accounts at near record lows, when tax and particularly inflation are taken into account, it is quite a challenge for savers to generate a “real” return on their hard earned cash with inflation currently running at 2.7% (November 2012).  Despite this, the huge majority of respondents are not considering investing in the stock market, perhaps preferring to stick with the paltry returns available from bank and building society accounts and taking the risk that the value of their money can depreciate instead.

    Nick Cann, CEO of IFP comments: “Today’s result shows us that more than ever, the consumer needs professional help with planning their finances.  Just leaving money in a bank account is going to see it erode over time with the effects of inflation and that is very dangerous. A plan of action is required to determine what short, medium and long term goals exist so that effective savings and investment strategies can be used which will be mindful of the individual’s attitude to risk and loss, and give the chance of them maintaining the value of their capital over the longer term. Understanding the options at least has to be a positive step forward.”

    John Ions, Chief Executive of Liontrust, says: “It is worrying that despite low interest rates from banks and building societies so many people are unlikely to invest in stock markets in the next year.  Whilst investing comes with risks, the fact that people are prepared to let the spending power of their money diminish and be eroded by inflation is a cause for concern.  Equity investing and the income that can be generated can be a very powerful way of maintaining and improving income over the longer term.  It only goes to highlight the need to seek proper advice and gain a better understanding and confidence of other options.  Apathy could be the biggest destroyer of future financial goals.”

    Rebecca Taylor FIFP, CFPCM IFP President and MD of Dunham Financial Services comments: “While keeping your money on deposit is fine for the short term and particularly for those funds you might need in an emergency, there are considerable risks to doing so for the longer term as inflation will erode their value. Of course, if they are investing in the stockmarket people must be prepared to see the value of their capital fluctuate. However, over the long term, by investing in “real” assets like stocks and shares, people have the chance that the value of their capital will appreciate rather than depreciate.”

    The Institute of Financial Planning (IFP) is running a series of daily polls with consumers throughout Financial Planning Week to find out what people are thinking and doing when it comes to their money – and how they are coping with their personal finances during these uncertain times. Tips and tools are available free of charge on www.financialplanningweek.org.uk.

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    AXA Commercial Lines and Personal Intermediary is supporting households and businesses hit by floods with interim payments to help meet the immediate needs of securing temporary accommodation and aid cash flow.

    Martin Ashfield, Head of Commercial Property Claims, said: “This is an extremely stressful time for our customers. Our immediate priority is to help with the most basic requirement of getting households into alternative accommodation supported by interim payments where required of £1,000 to meet their immediate needs, while for our business customers we are making early interim payments where possible to aid cash flow.”

    He continues “Our teams are working extended hours and we’ve redeployed staff into our front line notification teams to ensure our customers can reach us easily. At the same time we have teams in place to keep in touch with our customers to provide as much support as possible, make sure they’re happy with progress and have quick answers to any questions.”

    With still over 70 flood warnings in place around the country, Ashfield added that it is too early to predict total values as the final number of cases is uncertain as claims continue to be received and it is not possible to assess the full extent of damage until there has been an opportunity to inspect properties once the flood waters have receded.

    He concludes: “Each event is different in nature and character and the type and depth of water makes an impact. Right now our focus is on arranging restoration and cleaning work along with securing temporary accommodation for families whose homes are inhabitable, and mitigation work for businesses.”

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    Serco Group, the international service company that employs experts as diverse as custodial workers and test pilots, has saved over £1 million by implementing an innovative absence management strategy. Central to this strategy is a unique online system which enables a large workforce across 200+ sites to be proactively managed from day one of absence through coordination of all absence stake holders, including income protection insurer, rehabilitation services and occupational health.

    This make it possible for management, HR staff and individual line managers to have a real-time view of absent employees across the entire company and allows engagement consistent with the group-wide philosophy, where the absence is understood and the relevant parties actively help the employee.

    As part of its ongoing consultancy work, Jelf Employee Benefits recommended using a bespoke technology system developed by Medicals Direct which was particularly effective at dealing with off-site workers, shift workers and more junior staff, where absence was proving to be particularly difficult to track.

    Early buy-in from all has been vital to ensuring the practical application of the overhaul of Serco’s absence management strategy, with the stakeholder activity regularly monitored by Jelf.

    Serco employees benefit from maximum assistance with early access to practical rehabilitation support and in the event the absence is longer-term the income protection benefit commences timely.  The process starts as soon as absence is notified with all employees assessed and rehab treatment advised, this includes if and how any treatment is referred to the healthcare scheme.

    Communication

    As well as Jelf Employee Benefits and Medicals Direct providing dedicated support teams to Serco, Jelf Employee Benefits has supported the organisation in providing line manager training and a range of communication information to engage with as many members of staff as possible.  This includes forums, workshops, policy handbook, intranet and internal magazine

    Chris Ford, director of group risk at Jelf Employee Benefits said: “The beauty of the process is that all employees receive consistent and proactive support, where the emphasis is on the individual and return-to-work solutions, which has significantly reduced the duration of absences and in turn the cost of absence”.

    Savings

    Through this process, savings in excess of £1million were saved by Serco last year through significant reductions in the number of days lost due to employee absence, together with savings in administration, medical costs and access to rehabilitation case-management.

    Ashleigh Witcher, senior benefits administrator at Serco Group, says: “By understanding our business and the range of services that we deliver, Jelf Employee Benefits has been able to fully integrate the income protection product with all our other benefits, and providers. Through a bespoke system we are able to centrally capture all activity across multiple operating sites. This provides the employee and line manager with maximum support from the vital early stages of absence.”

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    Friends Life today announces significant enhancements to its Group Critical Illness proposition. Changes include enhanced definitions over and above ABI model definitions, enhanced products terms, greater flexibility for flexible benefit clients and enhancements to Best Doctors including a new microsite to help employers communicate the benefits to the scheme members.

    Cardiac arrest has been added to the Standard Cover along with enhanced definitions for cancer, major organ transplant, multiple sclerosis, Parkinson’s disease and stroke. The Comprehensive Cover product has enhanced definitions for aorta graft surgery, blindness, coma, HIV infection and third degree burns. The Friends Life comprehensive product now has 16 conditions that are better than the Association of British Insurer’s (ABI) model definitions.

    Enhancements have also been introduced to the product terms and conditions including increasing the maximum benefit to the lower of 5 times salary or £500,000. For children’s cover, the maximum age has been extended from 18 to 21 for those in full time education.

    Increased features for flexible benefit schemes now allow members unlimited benefit increases during the selection window and at standard lifestyle events.

    Best Doctors is available to all Friends Life Group Critical Illness Cover scheme members and their dependants at any time and not just at the claims stage. These new enhancements make it easier for the employer to communicate this valuable benefit to their employees by introducing an employer microsite toolkit that hosts all of the information regarding the services of Best Doctors in one convenient place.

    There are two new additions to the existing Best Doctors InterConsultation service which provides a second opinion from a world leading expert:

    – ‘Ask The Expert’ is for those situations that do not require a full collection of medical records. It offers a streamlined process that provides access to a world-leading specialist for the specified condition, within a few days.

    –  ‘Ask Best Doctors’ gives access to Best Doctors’ expertise and knowledge at the click of a mouse for all members including use of an exclusive online Multimedia Library hosting on-demand videos with detailed explanations about medical conditions, treatments and testing.

    David Williams, Director of Group Protection at Friends Life said, “These enhancements reinforce the quality of Friends Life’s Group Critical Illness offering. Our critical illness product is an attractive benefit option for employers to offer their staff, providing members with access to expert medical opinion and a potential financial benefit when they are at their most vulnerable through illness.”

    These critical illness enhancements are available for new customers immediately and for existing customers at their next rate review.

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    According to catastrophe modeling firm AIR Worldwide, heavy rainfall began lashing the British Isles on Thursday, November 22, prompting hundreds of warnings and alerts. As of Tuesday, November 27 at 3 PM GMT, there were 182 flood warnings, two severe flood warnings, and 225 flood alerts in place, affecting virtually every region in England and Wales.

    The southwest areas of England, particularly the counties of Cornwall and Devon, have thus far borne the brunt of the rainfall, with some places recording over 150 mm of precipitation over the past seven days. According to the UK Environment Agency, 960 homes have been flooded, the majority of them in the southwest. Aside from the devastation to homes, businesses and the tragic loss of life in the affected regions, there has also been widespread disruption to rail and transport networks, including the partial closure of major motorways.

    According to AIR, while the weather forecast is improving, groundwater and river levels have not yet peaked, indicating a high possibility of continued flooding, especially in the northeast regions of England and northern Wales.

    The excessive rainfall was the result of consecutive low pressure systems that approached from the southwest, bringing warm, moist air from Africa and the Atlantic. The UK Met Office began issuing flood warnings as early as Monday, November 19, as the first low pressure system was forecast to impact Cornwall and Devon. Heavy rains began in the early hours of the morning of the 21st. At Exeter airport in Devon, 39.2 mm of precipitation was recorded between midnight and 8 a.m. on the 21st. This heavy band of rainfall and gusty winds were the result of a cold front that moved eastward over the southern British Isles before passing to the east through the Netherlands and across France, bringing some respite late Friday and early Saturday.

    However, at the southern end of the cold front, which reached down as far as the Iberian Peninsula, another depression was developing. The warm, moist air caused this depression to deepen and, as it moved north-eastward, warnings of heavy rainfall and strong winds were issued, with up to 60 mm of precipitation expected first in the southern counties and then continuing along the path of the storm. As this new system arrived on Saturday, the heavy rains fell on already saturated soils, causing the first floods.

    According to AIR, the system continued to dump heavy rainfall across the Midlands, across the Pennines, and into the northeast before moving into the North Sea on the evening of Sunday, November 25. This passing system resulted in rainfall totals, recorded between midnight and 8 a.m. Saturday morning, of 56.8 mm in the town of Plymouth on the south coast and another 48 mm at Exeter airport, where the previous high was recorded days earlier. As the system moved northeast through Saturday night, the counties of Yorkshire and Humberside in the northeast began to see totals of 30–36 mm between midnight on Saturday and 8 a.m. Sunday morning.

    Yet another low pressure system followed closely behind, again approaching England from the southwest. This system reached the southern counties in the early hours of Monday morning and proceeded along a similar northeast path. The system temporarily stalled over the northeast under the influence of cold winds from the North Sea before finally moving offshore Monday evening.

    According to AIR, rains have continued into today (Tuesday) but are expected to abate later in the day. However, river and groundwater levels are expected to peak in the next 48 hours, indicating the possibility of further flooding.

    According to AIR, since the first flooding began on Saturday, November 24, some 960 properties have been damaged. Disruption to rail and transport networks was also widespread with closures and delays experienced across much of the country. There have also been widespread road closures, particularly in the southwest and the Midlands, including parts of the M5 motorway in Gloucestershire.

    In the village of Malmesbury near the southern Welsh/English border, floodwaters reached over 1 meter in the center of the town. The Elwy River in North Wales, has overtopped flood defenses with a river height of almost 1 meter higher than the previous record. Approximately 100 homes have been flooded from the Elwy River in the town of St. Aspath, and 400 properties are at risk in the nearby village of Ruthin.

    Voluntary evacuations were in effect in the town of Tewkesbury in Gloucerstershire as floodwaters began to rise on the Severn and Avon rivers. To the north, in York, the River Oust burst its banks, resulting in the flooding of riverside buildings.

    According to authorities, an estimated 55,000 homes have been protected from flooding so far by the new flood defenses built since the disastrous flooding in 2007. Newly built flood defenses, however, were overtopped in Kempsey in Worcestershire when one of the pumps designed to redirect the water failed to start. The new defenses cost approximately GBP 1.5 million to build and were designed to protect “the most flooded village in the country” from events such as this; Kempsey has been flooded 20 times in the past 30 years by the nearby river Severn.

    According to AIR, the current spate of heavy rains and flooding follows a summer in which the UK experienced multiple flooding events. Most of the summer’s floods were localized in nature, with estimates of insured losses totaling approximately GBP 1 billion. AIR estimates average annual insured losses of approximately GBP 343 million, so 2012 is proving to be an above average year. However, 2012 is still far shy of the approximately GBP 3 billion of loss experienced in the devastating 2007 floods.

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    Doctors and staff at public hospitals in Madrid launched a strike Monday complaining that authorities plan to privatise health services to save money in the financial crisis. 

    Crowds of doctors in white coats demonstrated outside La Paz hospital and others, where minimum services were in operation, and collected signatures for petitions against the regional government’s 2013 budget plan.

    “Public healthcare is not for sale, it is for defending,” read their banners.

    Spain’s regions are under pressure to curb spending as the national government seeks to cut seven billion euros ($9 billion) a year from the health budget.

    In Madrid, the conservative regional government plans to make savings by outsourcing and reshuffling services. Protestors say this will undermine healthcare.

    “We want to demonstrate until the Madrid government stops its plan,” said Cristina Diez, 29, an internal medicine specialist at the Hospital Gregorio Maranon, a major hospital in central Madrid.

    “The central government is already cutting spending. If in addition to that they privatise, it is to try and make healthcare profitable. We are against that,” she added.

    “They are using the crisis as an excuse to do what they have been planning to do for a long time.”  The CESM medical union announced a strike for Monday and Tuesday to be repeated on December 4 and 5. The Madrid specialists’ association AFEM called for a longer strike this week, from Monday to Thursday.

    On November 18, tens of thousands of doctors, nurses and other staff marched in Madrid in one of many mass demonstrations against crisis spending cuts in various sectors over recent months.

    Beatriz Marquez, a trainee pharmacist working in the laboratory at Gregorio Maranon, said transferring samples away to private companies for lab analysis would complicate work in the hospitals.

    “If a private company comes into public healthcare, it will lead to a worse quality of service,” she said.

    Madrid, Nov 26, 2012 (AFP) 

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    US insurance giant AIG said Thursday it would form a joint venture with Chinese insurer PICC and invest $500 million in its Hong Kong share sale next month, as the firm boosts its presence in China. 

    American International Group, which traces its roots to an agency founded in Shanghai in 1919, plans to “distribute life insurance and other insurance products” with PICC in major Chinese cities, according to a company statement.

    The tie-up puts AIG in competition with its former Asian unit AIA, in which it owns about a 13.7 per cent stake, as it tries to break into a market where domestic players dominate.

    AIG’s multi-million dollar move represents one its biggest investments in Asia since it was bailed out by the US government during the 2008-2009 financial crisis.

    In a statement announcing the bid, AIG promised it would not sell over 25 per cent of the People’s Insurance Company’s shares in the next five years without the Chinese insurer’s consent.  PICC, parent of the nation’s largest non-life insurer PICC Property and Casualty, is seeking to raise $3.6 billion from its initial public offering in Hong Kong next month, according to Dow Jones Newswires quoting a term sheet.

    The IPO, expected to be one of the world’s biggest of its kind this year and the largest offering from a Chinese company since 2010, is scheduled for December 7, Dow Jones added.

    It could also mark a reversal from a stagnant IPO market in Hong Kong, the top such market for the past three years which has taken a hit after Chinese companies grew worried about slowing economic growth.  Once the world’s largest insurance company, AIG was rescued from bankruptcy by the Federal Reserve and the US Treasury with a record $182 billion bailout at the height of the financial crisis.

    AIG has sold off assets as it restructured itself back to a path of profitability, raising money to repay the rescue.

    Hong Kong, Nov 22, 2012 (AFP) 

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    Swiss Re’s latest sigma research publication “Insurance accounting reform: a glass half empty or half full?” takes a fresh look at the long-running debate over upgrading and harmonising insurance accounting practices. A key conclusion is that the proposed accounting reforms can contribute to more meaningful financial reporting in insurance. But they probably need to be complemented with additional metrics that clearly and concisely communicate insurers’ underlying economic value to their stakeholders.

    Insurance accounting reform progressing slowly

    For over a decade, accounting standard-setters have been wrestling with how best to improve insurance accounting practices. In particular, the International Accounting Standards Board (IASB), in collaboration with the US-based Financial Accounting Standards Board (FASB), has been developing a new valuation framework for insurance contracts and has sought to upgrade existing accounting standards for other financial instruments.

    At its September 2012 meeting, the IASB decided to seek additional industry feedback on its proposals. According to Kurt Karl, Chief Economist of Swiss Re, “The IASB’s decision to reconsult highlights the continued willingness to move these reforms forward, but realistically, it means that new international accounting standards for insurance are now unlikely before 2016.” Furthermore, the near-term prospect of a single global accounting standard for insurance has dimmed somewhat. While the FASB are due to expose their proposals for external review in the first half of next year, they announced in June 2012 that a converged international standard for insurance contracts is unlikely to emerge any time soon.

    Insurance presents significant challenges for accounting

    In order to prepare their financial statements, companies need methods to value their assets and liabilities and to recognise associated revenue and expenses. At face value, this would seem straightforward. But in fact it raises significant questions concerning valuation and measurement. Although these issues are not unique to insurance, they are arguably more acute than in many other industries.

    A key challenge is that future cash flows stemming from insurance contracts are difficult to estimate in advance and hence it is hard to place a value on them. Some insurance risks, such as motor cover, are reasonably easy to assess. But other insurance products are very complex and their associated liabilities can extend over very long time periods, making valuation – and thus accounting − difficult. For example, to give long-term life insurance guarantees a value, an insurer must consider not only the timing and size of the possible benefits, but also the policyholder’s continued willingness to pay premiums.

    Existing accounting can lead to measurement mismatches

    In light of these measurement challenges, a “mixed attribute” model of accounting has developed. Insurers value their assets at historic costs or at current market values depending on their intended use and establish actuarial-based loss reserves to cover future insurance obligations. This not only creates the potential for various accounting mismatches but can also mask important economic mismatches if the intrinsic value of assets and liabilities respond differently to changes in economic conditions.

    For example, long-tail liabilities on some insurance covers will be more sensitive to changes in interest rates than their supporting assets which may not show up in insurers’ accounts if the actuarial assumptions are locked-in at inception. Moreover, there are significant differences in accounting practice across countries making problematic international comparisons of insurers’ financial statements.

    Key reform details still under debate

    In a bid to reflect better the economic substance of an insurer’s business in its financial statements as well as improve comparability across countries, accounting standard setters have progressively sought to introduce more market-consistent measurement methods. However, while there is broad acceptance in the insurance industry about the overall thrust of the proposed reforms, considerable debate persists about key details of the proposals.

    Insurers need to anticipate the ramifications of the final accounting standards
    “Shifting towards a more economic valuation of asset and liabilities should, in principle, help to illuminate the full costs of producing insurance, including the cost of capital required to support the business,” says Külli Tamm, co-author of the sigma study. At the same time, it may make insurers’ reported financial statements more volatile, which could unduly drive up insurers’ cost of capital and put them at a disadvantage compared with other industries.

    Such cost of capital fears may be exaggerated. Further, the changes in financial reporting could bring potential benefits for insurers. Darren Pain, co-author of the sigma study says: “The new accounting standards should encourage insurers to be more open about the source of uncertainty surrounding their estimated assets and liabilities as well as the rewards for bearing risk, but to foster improved transparency, additional reporting metrics will probably be needed.”

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    Jelf Employee Benefits warns that seeking medical treatment abroad must be considered very carefully, in light of reports that UAE residents and expats are going abroad for treatment because of unsatisfactory care. 

    According to a survey reported in Abu Dhabi’s newspaper The National, areas of dissatisfaction reported include the long waiting time to get a doctor’s opinion, lack of specialist care and communication problems.

    Jelf Employee Benefits warns that terms and conditions of specific policies must be checked in detail before considering treatment abroad.  Individuals must check that the medical treatment they want is covered in the region where they want to be treated.  They must also check they will have access to the facilities they will need, such as a full range of clinical expertise and doctors that speak their language.

    David Williams, international business manager for Jelf Employee Benefits says: ‘In the first instance, we would advise expats to be on a comprehensive plan which will cover all the treatment they need.  If they don’t have full cover in place and feel forced to go abroad for treatment, they need to be sure their policy will cover them in that region.  It is paramount that individuals considering going abroad for treatment do their homework first and are confident in the medical and clinical facilities.’

    The company cautions individuals that choose to travel outside of their region for medical treatment to remember that these travel costs will not be covered by the insurer and will have to be self-funded, an extra cost that can often be overlooked.

    Jelf Employee Benefits says that as treatment in the UAE is expensive and costs are increasing there are some groups that are particularly vulnerable: expats without a comprehensive policy may feel forced to choose cheaper hospitals and this can mean longer waiting times, so this group may decide to go abroad for treatment

    Similarly, local nationals or migrant workers on a local domestic plan – without the overall level of benefit of an international policy – may look to use cheaper hospitals or go abroad for expensive treatments that would otherwise use up their allowances very quickly.

    David Williams continued: ‘We’ve all heard stories of poor treatment and problems with follow-up care when individuals go abroad for medical treatment to save costs or beat waiting times: it isn’t always the panacea that it might appear.  We want individuals to make informed decisions if considering going abroad for treatment.’

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    The world economy would be boosted by billions of dollars if all women had access to contraception, the United Nations said on Wednesday in its annual State of World Population report.

    The report said inadequate family planning in developing countries contributed significantly to poverty and ill health, and that $5.7 billion (4.5 billion euros) could be saved by preventing unintended pregnancies and unsafe abortions.

    “Family planning is not a privilege, but a right. Yet, too many women — and men — are denied this human right,” said Babatunde Osotimehin, executive director of the UN Population Fund (UNFPA).

    “The data that we have shows that access to family planning unlocks unprecedented rewards, both at the individual and national level,” the former Nigerian health minister told a press conference in London.

    “Women who have access to family planning can contribute enormously to economic development. The accumulated effect of these highly personal decisions can influence entire countries and regions.”

    Around 222 million women currently have insufficient access to contraceptives, the UN report estimated.  It described “an array of economic benefits” brought by family planning, including a rise in the number of women in the workforce and wealthier households as the number of children in each home decreases.

    But it noted that global funding for family planning has declined and said an extra $4.1 billion would be needed each year to fund contraceptives for everyone who needs them in developing countries.

    The UN cited one study that attributed a third of the growth in the Asian “tiger” economies to increased use of contraceptives, which caused a drop in the number of children dependent on every working adult.

    If an additional 120 million women who wanted contraceptives could get them by 2020, the report said, an estimated three million fewer babies would die in their first year of life.  A woman’s chances of dying in childbirth were cut by a third by access to birth control, Osotimehin added.

    “Thirteen per cent of maternal mortality around the world is due to unsafe abortion,” he told journalists.

    “That, in many circumstances, occurs in people who want family planning and they don’t get it.”

    The report said that access to family planning was a “fundamental human right” that governments had an obligation to protect.

    Osotimehin described contraception as “one of the most effective means of empowering women”, but he added that the right to birth control did not necessarily include the right to abortion in all countries.

    “Abortion should not be promoted as a method of contraception. Where it is legal, we advocate that it should be done safely,” he told AFP.

    Africa and South Asia were the regions with the worst access to contraception, he added, “essentially because of poverty.”

    London, Nov 14, 2012 (AFP) 

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