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John Stewart

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U.S. : weekly jobless claims plunge

International

Oct 11, 2012

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New claims for US unemployment insurance benefits plunged unexpectedly last week to the lowest level since February 2008, at the outset of the Great Recession, the Labor Department reported Thursday.

In a fresh sign of improvement in the jobs market, new jobless claims, a sign of the pace of layoffs, came in at 339,000 in the week to October 6, far below the previous week’s 369,000 and the then-four-week average of 375,500.

The moving average was pulled down to 364,000 by the new data. The last time weekly claims were that low was in mid-February 2008, as the country plunged into a 19-month recession that sent the unemployment rate soaring to 10.0 per cent.

At the height of the downturn in early 2009, more than 600,000 fresh claims a week were being reported as businesses and government offices slashed their rolls.

While job creation has been somewhat weak in recent months, in August the official jobless rate fell to 7.8 per cent.

That was good news for President Barack Obama as he battles to win re-election with the electorate focused on his performance leading the economy out of recession.

Washington, Oct 11, 2012 (AFP)

WHO : 350 million people have depression in world

Good to know

Oct 9, 2012

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More than 350 million people suffer from depression globally, the World Health Organization said, ahead of World Mental Health Day on Wednesday.

“It is not a disease of developed countries, it is a global phenomenon. It is present in both genders and in rich and poor populations,” Dr Shekhar Saxena, head of the WHO’s mental health and substance abuse department, said in Geneva.

No region is free from the disorder and around five per cent of the world’s population suffers depression in the course of a year, the health expert said.

Fifty per cent more women suffer symptoms than men, said Saxena, who added that post-natal depression affected one in five mothers and one in 10 of all young mothers in the developed world.

According to the UN’s global health arm, depression is more than just a bout of the blues, rather a “sustained feeling of sadness for two weeks or more” which interferes with “work, school or home”.

At its worst, depression can lead to suicide, the WHO expert said, citing a “very clear correlation”.

Nearly one million people take their lives every year and more than half of them have depression, Saxena said, although he noted that it was not the sole cause.

“Depression has existed for centuries, the news is, we’re not doing anything about it,” said Saxena, noting that the shame associated with having the illness meant that fewer than half of those with depression received the care they need.

The figure dropped to less than 10 per cent in many countries, he added. Effective treatment was available, Saxena said, but health workers needed to do more to spot the signs of depression in people who complained of other symptoms, particularly in children as young as 12 and young adults who they did not expect to have the illness.

One of the best ways to treat depression was to talk openly about it, the WHO said, adding that medicine was not the only solution.

“It should not be taken for granted that depression means taking pills,” Saxena said.

Geneva, Oct 09, 2012 (AFP)

Aon Hewitt : workers are advised to do research before enrolling in benefits this season

Uncategorized

Oct 8, 2012

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U.S. employees soon will be asked to make decisions about their 2013 benefits during open enrolment season. According to Aon Hewitt the benefits offered to employees next year may be impacted by a number of factors, including rising health care costs, the declining health of the population and phase-in of provisions under the Patient Protection and Affordable Care Act (PPACA).

According to Aon Hewitt, 55 per cent of employees default to their current benefit coverage for the coming year, instead of actively reassessing their plan options. What many workers do not realize is that the old selection may not be the best option.

Data from Aon Hewitt shows health care costs are expected to rise 6.3 per cent in 2013 to $11,188 per employee, compared to $10,522 in 2012. In most cases, employers still shoulder much of the cost, but workers should expect to see their portion of the total cost rise in the form of increased premiums and out-of-pocket costs. The amount employees will pay for their health care benefits in 2013 is expected to be close to $5,000 — $2,385 in premiums and another $2,449 in out-of-pocket costs.

“It is easy to fall back on the status quo and assume that your 2012 benefits choices will continue to meet your needs in 2013,” said Craig Rosenberg, Aon Hewitt’s national leader for Health & Welfare Benefits Administration. “But changes to family health care needs, employer plan offerings and costs make it important for workers to revaluate their selections every year.”

Aon Hewitt offers the following tips for employees this open enrolment season:

Understand what’s changing for you and with your benefits. Start by evaluating how you and your family used health care in 2012. Consider how much was spent out-of-pocket on deductibles and coinsurance, the number of doctor visits and the cost of on-going medications. If you are participating in a Flexible Spending Account (FSA), evaluate if the contribution is too little or too much based on actual expenses. If you currently have a Health Reimbursement Account (HRA) or Health Savings Account (HSA), determine what remaining balance you might have to apply to 2013 expenses. In the case of an HRA, check to confirm whether unused funds roll over to 2013.

Beginning in 2013 under the PPACA, employees’ contributions to Health Care FSAs will be capped at $2,500 annually. Previously, there was no regulatory limit but many employers capped contributions at $5,000 or more. However, most workers do not contribute at that level. Among Aon Hewitt clients, employees contribute an average of $1,600 annually to their FSAs.

In addition, carefully review information from your employer about your 2013 benefit plan offerings. According to Aon Hewitt, more employers are offering Consumer-Driven Health Plans (CDHPs) than Health Maintenance Organization (HMO) options. As a result, plan options offered in the past may no longer be available.

Also new this year under the PPACA, employees will have access to Summary of Benefits and Coverage (SBC) statements that provide a standardized overview of health plan coverage features, such as coinsurance, deductibles, and examples of out-of-pocket costs related to having a child and managing Type 2 diabetes. For workers at most large employers that provide decision support tools, SBCs will serve primarily as a supplement. For those employees at smaller companies, SBCs may provide new information that will be helpful in selecting coverage for 2013.

Take advantage of incentives and opportunities to improve your health. Employers continue to offer tools to help employees, and increasingly, their spouses and partners, better understand their health risks. According to a recent Aon Hewitt survey, most companies (68 per cent) offer Health Risk Questionnaires (HRQs) and 57 per cent offer biometric screenings such as cholesterol, blood pressure and blood glucose.

Recognizing the importance of these programs, many companies offer incentives to participate. In fact, 84 per cent of employers that offer HRQs provide incentives for completing them. Often, these incentives are monetary, like a reduction in medical premium cost, but they can also take the form of a reduction to your deductible so the plan starts paying benefits sooner.

“In order to manage rising health care costs, employers are increasingly turning toward strategies aimed at improving the overall health of their workers by encouraging behaviour change and making them more accountable for the health decisions they make,” said Jim Winkler, chief innovation officer for Health & Benefits at Aon Hewitt. “Employees should expect to see incentive programs like in past years, but now, companies are moving past simply asking workers to participate—they want to see improved health results too.”

Aon Hewitt advises workers to take full advantage of all health and wellness programs available. In addition to receiving incentives from your employer, you can benefit from longer-term savings by getting a good picture of your health and identifying and addressing any health risks as soon as you can. Many employers make it convenient to complete these health improvement actions by offering worksite biometric testing and health evaluations, on-line HRQs, and follow-up so you can take steps to improve your health based on the information you learn.

Consider whether a Consumer Driven Health Plan meets your needs. CDHPs continue to rise in popularity as another way to encourage you to take an active part in managing your health care. Employers typically pair CDHPs with either an HRA or an HSA. Employees can use one of these accounts to help pay for eligible out-of-pocket health care costs, controlling how and when they use these funds.

CDHPs may be available at a lower cost than other coverage. However, it is also important to consider how much you will spend out of pocket – for example, before you meet your deductible. In the case of CDHPs offered with an HSA, the deductible may be higher than you have experienced in the past. Employees should also ensure they understand how the accounts – either HRA or HSA – work.

Key factors to keep in mind:

– HRAs: Review how much your employer will contribute as well as how unused funds are handled at the end of the year or if you terminate.

– HSA: Determine how much you will be able to contribute in 2013 – up to $3,250 ($6,450 if you have family coverage). If you will be age 55 or older in 2013, you can contribute an additional $1,000. These funds often grow over time by earning tax-free interest, and there is no “use it or lose it” rule, even if you leave your company. In some cases, employers make contributions that supplement money you contribute.

“While workers are more frequently enrolling in CDHPs with an HSA or HRA because they often pay less out of their paychecks, they find these plans and accounts confusing and hard to navigate, especially at the beginning,” said Joann Hall Swenson, partner and health engagement best practice leader at Aon Hewitt. “However, employees also report that they are often willing to reenrol in CDHPs. As they become more familiar with these plans, they find that they like having a better sense of what their care and prescriptions actually cost and the ability to manage their costs more carefully. Many workers even report that they make smarter health decisions as a result of being in this type of plan.”

Assess dependent coverage. Finally, consider which dependents will need to be covered in 2013. The PPACA allows you to cover your children through the month in which they reach age 26 in most cases, regardless if they are full-time students. It is important to consider all available coverage options for dependents. If a spouse or partner has access to medical coverage through an employer, it may be more cost effective to enrol in that coverage instead, particularly since some companies apply a surcharge to cover a spouse or partner who has declined coverage from their own employer.

The new SBC statements will be a helpful tool in comparing coverage from your employer with coverage available from other sources since they present information in a standardized way.

Rosenberg added, “The health care landscape continues to change, and 2013 will be no exception. It is critically important that employees spend time to understand their needs, assess the options available to them and use the tools and resources available to effectively meet their needs and the needs of their families.”

The AA : calls for driving education at schools

Market

Oct 8, 2012

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The AA is again calling for driving education to be part of the National Curriculum, at a Conservative Party conference fringe meeting, on Monday 8 October.

Simon Douglas, director of AA Insurance, believes that that driving and road safety education from an early age could help to cut the shocking toll that driving brings on young lives.

The meeting, sponsored by the Association of British Insurers, followed the publication last week of the Association of British Insurers’ (ABI) report ‘Improving the safety of young drivers‘ which presented a range of proposals to reduce the shocking toll on young lives in car crashes.

The AA’s Charitable Trust also published a report in July: ‘Young Drivers at Risk‘ as part of the ‘Make Roads Safe’ campaign for global road safety.

Speaking before the meeting, Simon Douglas said: “The AA shares the ABI’s concern about the distressing young driver accident statistics.”

But he believes that many of the proposals from the ABI treat the symptoms, rather than the cause, of young driver casualties.

While supporting the concept of reducing the learning age to 16½ and extending the earliest age of passing a driving test to 17½. “This could be coupled with a logbook system to ensure that young drivers have been adequately trained,” he said.

But he said that while a minimum learning period would permit people to learn for longer, it wouldn’t necessarily happen. “It may simply lead to people getting licences at a younger age but wouldn’t stop them later ‘cramming’ to pass their test, which would be difficult to police.

“This also needs to be considered very carefully in terms of the impact on wider youth issues such as high unemployment.

“Should a 21-year-old graduate be forced to reject a job offer because they need to drive to their place of work and are not allowed to try to pass their test within a few months?”

Mr Douglas also questions the reduction in the alcohol limit for young drivers. “What kind of message does this send? That young drivers shouldn’t drink but it’s OK when they’re older?

“It would be far better to bring down the blood-alcohol limit from 80mg per 100ml of blood, which is the highest in Europe, to 50mg per 100ml of blood for everyone. That would bring the UK in line with most EU countries.

Mr Douglas believes that the best way of bringing down the death and injury rate among young drivers and make Britain’s roads safer for all is to start with education.

“This must start at a young age – many years before someone is old enough to even think about driving.

“I urge the Government to make road safety and driving science part of the national curriculum.

“It’s hard to think of a measure that would have a more profound effect on reducing the risk to young peoples’ lives. We owe it to our children to act now,” he added, pointing to statistics from the Under-17 Car Club which shows that young people who have passed their driving test following training during their early teens are half as likely to have a crash as those who learned to drive after their 17^th birthday.

Mr Douglas also says that telematic or ‘pay how you drive’ insurance can play a significant role in helping to reduce young driver casualties, although he stopped short of calling for it to be made compulsory for young drivers.

“Systems such as AA Drivesafe insurance provide an accurate risk analysis by measuring driver behaviour such as speed, braking, cornering and night driving.

“Young people who demonstrate a responsible driving style can not only reduce their insurance premium by as much as 50% in one year, including no-claim discount, but are at least a third less likely to have a crash.

“Careful drivers using these systems save money as well as potentially save lives.”

FSA : kick-back payments banned between discretionary investment managers and advisors

Industry News

Oct 7, 2012

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The Financial Services Authority (FSA) is consulting on a change to its adviser charging rules to ensure advisory firms do not receive any kick-back payments from discretionary investment managers in exchange for recommending their services.

Under the Retail Distribution Review’s adviser charging rules, advisory firms should only be paid for the personal recommendations and related services they provide to their clients through the charge agreed with their client. They should not be remunerated by discretionary investment managers.

The FSA made this intention clear in its March 2010 Policy Statement (PS10/6), saying: ‘adviser firms should not be allowed to receive commission set by discretionary investment managers for recommending their services, just as they cannot receive commission set by product providers for recommending their products’.

The FSA is now consulting on rules to ensure that discretionary investment managers and advisory firms are left in no doubt about the FSA’s requirements.

If an adviser is making personal recommendations on retail investment products to a client If an adviser introduces the client to a DIM, but makes no personal recommendations at all
The adviser cannot receive a payment from the discretionary investment manager – for referring the client or for managing the relationship between the client and the discretionary investment manager

The adviser can receive an introductory fee or payment

The adviser is paid solely out of the charges agreed with the client No advice has been given (so the referral is not a related service and is not subject to the adviser charging rules)

The ban on referral payments will apply to referrals of new clients only, from 31 December 2012 onwards.

For the consultation paper on payments for referrals to discretionary investment managers, please click here and see chapter 6.

Healthcare team realigned for Jelf Employee Benefits

Communication

Oct 6, 2012

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Jelf Employee Benefits has undertaken a strategic reallocation of resources to meet its goal to substantially grow its healthcare division. Having performed a pivotal role at Jelf Employee Benefits’ new London office, Chris Cannon, business development manager will now join Debra Clark, and Beth Alahakoon in creating a new team to manage the requirements of this dynamic division of the business.

Debra, business development manager – retention, was previously responsible for individual healthcare policies within the employee benefits business and will now focus on client retention within the SME and small corporate market, an area where Jelf has excelled over the years. Beth, business development manager – individual, was team leader in operations and will now head up a renewed focus on increasing the consumer PMI market for Jelf, whilst Chris and his team will focus on SME acquisition.

Steve Hope will continue to develop and grow the telesales function in line with the strategy of the business.

Jamie Cleall-Harding, UK PMI healthcare director (South) said: “This formidable team will provide a real boost to the healthcare team by allowing us to confidently win new business and guarantee that those new relationships are nurtured from the very beginning. Whilst none of them are new to Jelf Employee Benefits, they haven’t worked together before and I’m confident that they will be a very beneficial addition to our business unit.”

ID Fraud : Equifax survey shows nearly half don’t clear browser history on mobiles and a third don’t log out of smartphone apps

Communication

Oct 3, 2012

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UK consumers are the most likely in Europe to become victims of ID fraud and new research from ID fraud expert Equifax has revealed one of the key ways that Brits are putting themselves at risk. A third of respondents to Equifax research conducted at the end of September 2012, said that they stay ‘logged in’ to smartphone apps and almost half fail to clear their browser history (42%). Both activities could make personal information, including bank details, easy to access if these devices are lost or stolen.

As part of National Identity Fraud Prevention month which started on Monday 1^st October, Equifax is campaigning to reduce the risk of fraud to consumers, urging a change in attitudes to protect personal information.

“Our research shows that people in the UK are making it far too easy for ID fraudsters, with many failing to log out of internet banking and 1 in 5 storing passwords, PINs or bank account or credit card details on their smartphones,” says Neil Munroe, External Affairs Director for Equifax and Chair of the Identity Fraud Communications Awareness Group (IFCAG). “A third of people we surveyed said they don’t log out of social media or internet banking websites on their mobile (32%). With over a quarter of people doing online banking through a mobile device, it’s shocking to discover that 45% don’t password protect their smartphone, leaving all that information available to anyone who can get their hands on it.”

Munroe adds, “More and more people are using smartphones for all aspects of their life and enjoy the convenience of shopping and banking on the go. But it seems that many users simply don’t realise just how much data they are holding – and how at risk their identity could be. There seems to be a real culture of ‘it couldn’t happen to me’. That’s why we’re keen to support this month’s ‘Don’t let it be you’ campaign.

“A stolen phone can provide all the passwords, email addresses, telephone numbers and personal information criminals need to open new accounts and wrack up huge debts in the victim’s name. Yet people are failing to clear their browser history and many don’t even log out of social network and online banking sites, leaving them wide open to fraudsters.

“We are urging consumers to protect their personal information, starting with their smartphone. A passcode on a mobile device is the first line of defence, but 45% of people are currently failing to even do that. Consumers need to think about the value of their personal information. Don’t make it easy for fraudsters, log out and take steps to protect themselves.”

An added level of protection for consumers is regular monitoring of their credit information – particularly as the European research* commissioned by Fellowes highlighted that, on average, it takes 7 months for UK consumers to learn that they have been victims of ID theft.

The Equifax Credit Report is accessible for 30 days free simply by logging onto www.equifax.co.uk. If customers do not cancel before the end of the 30 Day Free Trial, the service will continue at £8.99 per month, giving them unlimited online access to their credit information and weekly alerts on any changes to their credit file. It also includes an online dispute facility to help them correct any errors on their credit file simply and quickly.

The Equifax app is available free from the Apple iTunes Store on iPhone and iPad and from Google Play for Androids.

Business Bermuda : receives The New Economy Award for Best Offshore FDI Facilities, Americas, 2012

Communication

Oct 1, 2012

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Business Bermuda, an organisation working with Bermuda-resident companies and government to develop and promote Bermuda internationally as the jurisdiction of choice, has been awarded the New Economy Award for Best Offshore FDI Facilities, Americas, 2012.

When accepting the award, Cheryl Packwood, Chief Executive of Business Bermuda, explained the important relationships that business owners and investors can make through Business Bermuda and the many advantages that drive companies to operate in Bermuda. Ms Packwood also thanked The New Economy for its recognition of the work undertaken by Business Bermuda in promoting Bermuda as a business destination.

Cheryl Packwood, Chief Executive Officer of Business Bermuda, commented:

“I am delighted to receive this award on behalf of Business Bermuda. It is truly an honour to be recognised for all our hard work. We strive very hard to create a business friendly environment for our investors in Bermuda, and it is wonderful that our efforts are recognised. Bermuda is known globally as a top place to do business and it’s fantastic that this has been recognised by The New Economy.

“Bermuda is a premium jurisdiction and has one of the highest sovereign debt ratings for an offshore jurisdiction of its size. It is the number one re-insurance jurisdiction in the world and a well-known funds jurisdiction. This is because of Bermuda’s global reputation as a top place to do business. It is a proven, reputable business centre offering expertise, stability, and direct access to many of the world’s major commercial concerns.”

The award is the latest acknowledgement of Bermuda as the leading jurisdiction of choice. Bermuda was recently named the “Best Global Hedge Funds and Captive Insurance Destination 2012” by Global Banking and Finance Magazine and shortlisted for “Best Offshore Centre” by Global Investor/ISF. The Bermuda Monetary Authority (BMA) also recently won the Best Regulatory Initiative of the Year, a US Captive Services Award 2012 at the Captive Live USA conference. Cheryl Packwood, who was named as an industry leader in the MENA FM Service Provider Power 50, accepted the award on behalf of the BMA.

The full video of Ms Packwood interview with The New Economy at the London Stock Exchange can be found here: http://www.videos.theneweconomy.com/banking-and-finance/cheryl-packwood-bermuda-investors

Oak Underwriting latest addition to ARAG UK’s HNW portfolio

Communication

Sep 12, 2012

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ARAG announces a new partnership with specialist High Net Worth (HNW) insurer Oak Underwriting to provide legal expenses and home emergency assistance insurance to their HNW portfolio.

Launching for new business on 1 September, the account moved to ARAG after Oak Underwriting responded to broker feedback that enhancements needed to be made to these add-on sections.

Both the Family and Home Emergency covers have been enhanced above the level currently provided and will include high grade, non-call centre legal advice, bespoke in-house legal expenses claims handling at ARAG, experienced solicitors working on claims and a quality Home Emergency claims solution.

Director of Oak Underwriting, Calvin Owen said: “We are dedicated to serving the HNW insurance market and understand their unique lifestyles, responding with an individually tailored approach for each client. Moving an account like this is never an easy decision; however ARAG stepped up to the challenge, their experience in this sector is clear to see. We have already had positive feedback from our brokers who welcome the new partnership.”

Head of Sales at ARAG, Andy Talbot adds: “We are delighted to add Oak Underwriting to our expanding HNW portfolio. Not only do we relish the opportunity to work with their customers, but also the team who we have known and respected for many years. It is a sign of our expertise in this field to be handpicked by Oak Underwriting in such a competitive marketplace. Aligning with our approach to product and service provision as well as our commitment to total customer satisfaction we look forward to working together to add unique value to this discerning market.”

QBE Re : assigned an A+ rating by Standard & Poor’s

Industry News

Sep 11, 2012

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QBE European Operations has announced the restructure of QBE Re (Europe) Limited which will take effect on 30 September 2012. This follows the formation of QBE Re that was announced on 7 March 2012, which brought together QBE Insurance Group’s treaty reinsurance operations under a single global division.

Under the restructure, which received UK court approval on 7 September 2012, QBE Reinsurance (Europe) Limited in Dublin and Secura N.V. in Belgium, will become branch offices of QBE Re (Europe) and will benefit from its consolidated capital base of €536million.

QBE Re will now operate across three underwriting platforms: QBE Re (Europe); Syndicate 566 and QBE Reinsurance Corporation (Americas). Syndicate 566 and QBE Reinsurance Corporation (Americas) are unaffected by this restructure.

At the same time, ratings agency Standard & Poor’s has confirmed it will assign an A+ financial strength rating to QBE Re (Europe) once the newly merged operation becomes effective.

Jonathan Parry, Chief Underwriting Officer, QBE Re commented: “With the simplified operating structure in place and with confirmation that excellent financial strength ratings extend across all three of our underwriting platforms, QBE Re is well positioned to deliver the anticipated benefits of our global platform to brokers and clients. Clients of our Dublin and Secura operations will now benefit from the enhanced capital strength of QBE Re (Europe) and the A+ Standard & Poor’s rating. All clients worldwide will enjoy a consistent underwriting approach from expert underwriters who are empowered to make local underwriting decisions and who are backed by the strength of each of our three operating platforms.”

U.S. : drought worsens and crop insurance claims rise

International

Aug 28, 2012

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The drought in the U.S. agricultural heartland continues to deteriorate crops in the Corn Belt with no meaningful precipitation relief in sight. After the hottest July on record, insured losses from the 2012 drought are now expected to surpass losses of other historical droughts. AIR estimates that losses resulting from farmer claims for the crop insurance industry may exceed USD 13 billion with potential losses as high as USD 20 billion.

Although the 2012 growing season began on a very promising note, it became clear by the end of June that the crop insurance industry was facing one of the worst agricultural droughts. By the end of July 2012, the area of the contiguous U.S. affected by severe to extreme drought increased to 42%.

“AIR’s current estimate for this year’s crop insurance losses point to a gross loss ratio for the whole industry of 120-180%, which translates to payouts of USD 13-20 billion assuming USD 11 billion in total premiums,” said Dr. Gerhard Zuba, senior principal scientist at AIR Worldwide. “After government recoveries, which are available through the standard reinsurance agreement between crop insurers and the government, the total responsibility for the insurance companies and their private reinsurers, net after accounting for premiums collected, will be about USD 1-3 billion, again on the basis of USD 11 billion of assumed total premiums for 2012. However, it should be noted that the exact value of the total premiums for 2012 is not yet available.”

“The drought of 2012 will greatly reduce the harvest of major crops such as corn and soybeans. The AIR model indicates yields as low as 40% below normal in some areas. These low yields and the expected shortage at harvest have already increased prices for these commodities. Since planting this spring, corn prices have risen by 142% and soybeans by 138% (as of August 24). With high prices and high-take-up rates, most corn and soybean farmers will not suffer a loss, as they bought revenue protection policies. Because their monetary compensation will be calculated based on the final harvest price in the fall, typical deductibles in the drought areas of the Corn Belt with respect to yield shortfalls of 20 to 25% will be compensated by the higher fall price for the commodities.”

Swiss Re provides insights into the future of Italy’s insurance market

Aug 27, 2012

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According to Swiss Re’s latest expertise study, “The Italian insurance market: opportunities in the land of the Renaissance”, Italy stands at the crossroads of economic and social change, and therefore offers interesting opportunities for the insurance industry. The expected scaling down of the government’s role in the provision of social benefits will mean that more individuals will have to make their own arrangements for risk protection and retirement financing. The insurance industry must brace itself to help fill the widening protection gap.

Italy, as the world’s eighth largest economy, boasts a large and diversified economy, made up of small and medium enterprises exporting high quality products. Italy houses the world’s oldest bank and gave birth to the world’s oldest known insurance contract, both of which are a small testimonial to the country’s rich economic history.

The role of the insurance industry in Italy is expected to grow overall
In the adverse macroeconomic environment, growth opportunities are expected to emerge for insurers, particularly in underdeveloped, non-motor lines of business. The recent and expected legislative reforms should pave the way for greater involvement from the insurance industry and help it to play a more prominent role in supporting the country’s economic and demographic challenges.

According to Kurt Karl, Swiss Re’s Chief Economist: “The financial crisis has resulted in fiscal tightening and spending cuts which are accelerating the reduction and rebalancing of the welfare system in Italy, leaving a significant protection gap not only in healthcare and old-age provision, but also in natural catastrophe coverage. The insurance industry must prepare itself to take charge of its new, expanded role in Italy to support the state, private entities, and individuals in addressing some of their greatest economic challenges ever.”

Italy’s pension system is under pressure
Italy faces severe demographic challenges. It has the second-largest old-age dependency ratio in the world, ranking just behind Japan, and is expected to continue having one of the most aged populations on earth.

Growing fiscal austerity combined with a shrinking working population means that now, more than ever, Italians are in need of pension provisions. However, the state pension system, once one of the most generous in the world, has been heavily trimmed. As the burden of financing retirement increasingly falls to individuals, insurers are being called upon to step in and play a more prominent role to fill the growing gap.

In non-life insurance, non-motor lines of business in Italy are underdeveloped compared to the rest of Europe
Italy’s motor insurance sector is well developed but has historically suffered from low profitability. To address this issue, a law was passed in March 2012 aimed at tackling fraud in motor insurance. Carlo Coletta, Swiss Re’s Italian Market Head, says: “If the regulatory measures succeed in improving the loss ratio of third-party motor liability sector and stabilise this troubled line of business, an eventual reduction in product prices can be expected, which would be greatly welcomed in the current recessionary environment.”

Up until now, non-motor insurance remained underdeveloped for many reasons, including the general public’s low inclination to buy insurance coverage unless it is mandatory. Recent regulations are making certain types of non-life insurance mandatory, such as professional liability. In addition, non-motor insurance is likely to receive a boost from the spending cuts and new reforms.

Spending cuts will extend to disaster indemnifications
Italy has the lowest property insurance penetration among advanced markets in Europe. Indeed, one of many areas where protection is needed is property insurance, particularly for natural catastrophe coverage. Traditionally, there was heavy reliance on the state as an insurer of last resort. However, the recent earthquake in Emilia offers a stark reminder that Italy is highly exposed to natural catastrophes and over-reliant on post-disaster government intervention. Given the state’s reduced ability to cover costs in the future, non-life insurance will have room to expand and meet Italy’s new protection needs.

Lorega announces retirement of Chairman

Industry News

Aug 26, 2012

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Lorega, the pioneer of Loss Recovery Insurance, announces the retirement of Malcolm Harvey as Director and Chairman.

Mr Harvey, together with his wife Judy Jago, founded Lorega in 1983. Its products, which help commercial and high net worth policyholders achieve the quickest and fairest settlement following a major loss, are now sold by over 500 UK insurance brokers and agents.

Malcolm’s decision to step down from the day to day running of the business follows a long and successful career within the company which has seen Loss Recovery Insurance achieve market-wide acceptance.

Responsibility for leading Lorega going forward will be assumed by current Group Managing Director, Neill Johnstone. Neill joined Lorega in 1988 and has over 25 years of insurance market experience. He is already closely involved in the day to day management of the business, and is responsible for its operational and commercial functions.

Commenting on his retirement Malcolm Harvey said: “My decision to retire is part of a long term plan and I would like to depart while I am young enough to enjoy it and indulge in my passion for professional, off-shore sailing. I have full confidence that the board and senior management team will deliver the significant growth planned for Lorega in the years ahead.”

US insurer Aetna announces acquisition of Coventry Health Care for $7.3 billion

Industry News

Aug 22, 2012

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The US insurance giant Aetna will acquire managed health care company Coventry in a transaction valued at $7.3 billion, the two companies announced early Monday. Under the terms of the agreement, which has been approved by the board of directors of each company, Coventry stockholders will receive $27.30 in cash and 0.3885 Aetna common shares for each Coventry share, according to a statement issued by the two firms.

The acquisition is projected to add nearly 5.5 million regular and Medicare clients to Aetna’s membership, company officials said.

“Integrating Coventry into Aetna will complement our strategy to expand our core insurance business, increase our presence in the fast-growing Government sector and expand our relationships with providers in local geographies,” said Mark Bertolini, Aetna’s chairman, chief executive and president.

He added that a larger capital base would also enhance Aetna’s ability to continue to invest in innovation, new technologies and capabilities. Coventry chairman and CEO Allen Wise said the combined businesses will be positioned to better serve a broader market and develop new partnerships.

“We look forward to working together to build upon the strengths of each company to take advantage of opportunities during this dynamic time for our industry,” Wise said.

Coventry, which is based in Bethesda, Maryland, provides Medicare and Medicaid programs as well as group and individual health insurance.

It currently serves approximately five million individuals in all 50 US states.

Aetna is one of leading US health insurance companies, serving approximately 36.7 million people.

New York, Aug 20, 2012 (AFP)

1st Central : continues its focus on fraud prevention and detection

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Aug 13, 2012

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1^st Central announces the appointment of Chris Hallett as Operations Manager. Chris, who joins from RBSi, will be responsible for the operational management of 1^st Central’s recently formed Counter Fraud Services (CFS) team, reinforcing its commitment to protecting honest policyholders by preventing fraud.

With over 15 years operational management experience in the insurance and financial services market, Chris’ appointment will serve to further strengthen the CFS team structure and optimise 1^st Central’s fraud risk management strategy. Chris’ expert skills lie in driving and managing his team through a process of continuous improvement, with an unerring focus on service delivery. Chris joins 1^st Central having spent 12 years as Claims Transformation Manager at RBSi.

Glen Marr, Director of Fraud at 1^st Central, to whom Chris reports, comments: “We are delighted to welcome Chris to the team and he has very quickly made a positive impact, in what is a fast moving environment. His appointment demonstrates our continued investment in 1^st Central’s fraud prevention and detection capabilities. When we say we adopt a zero tolerance approach to fraud – we mean it, and our approach to tackling fraud is holistic”.

Chris Hallett commented: “This role is a great opportunity for me to bring my knowledge and experience to 1^st Central and build on the great work achieved by the CFS team to date. I believe in developing strong relationships, identifying areas for personal development and rigorously monitoring SLA’s to deliver maximum operational efficiency and team performance. I am very excited by the opportunities the role presents and have hit the ground running”.

Prudential : strong performance for first six months of 2012

Financial News

Aug 12, 2012

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British insurance company Prudential announced first-half net profits jumped by almost 15 per cent, boosted as Asian growth offset an uncertain economic climate.

Earnings after taxation climbed to £952 million ($1.5 billion, 1.2 billion euros) in the six months to June from £829 million in same period a year earlier, the London-listed company said in a results statement.

“Prudential has produced a strong performance during the first six months of 2012 … despite the considerable global macroeconomic challenges,” chief executive Tidjane Thiam said in the statement.

Operating profit, or earnings before tax and interest payments, rallied 13 per cent to £1.16 billion in the reporting period. Thiam added: “We manage our business so that it is resilient in times of economic and financial market stress, and our track record through the crisis is evidence of this.

“Our balance sheet remains defensively positioned and we continue to capitalise on the long-term growth opportunities available to us.

“Those opportunities are most evident in southeast Asia, where the depth and breadth of Prudential’s franchise is a source of strength.”

London, Aug 10, 2012 (AFP)

Aviva : falls into first-half net loss

Financial News

Aug 9, 2012

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British insurer Aviva said Thursday that it fell into a net loss in the first half, hit by restructuring costs, adverse foreign exchange movements and bad weather.

Aviva said in a results statement that it made a loss after taxation of £745 million ($1.17 billion, 943 million euros) in the six months to June, compared with a net profit of £125 million a year earlier.

The results also reflected lower contributions from Dutch group Delta Lloyd, in which it sold a 21-percent stake in July, cutting its shareholding to under 20 per cent.

The insurer said it has reduced its Italian sovereign bond holdings by just under 2.0 billion euros, as it seeks to build the group’s financial strength amid the ongoing Eurozone debt crisis.

“While this has been a challenging first half, we are taking the necessary actions to improve our position going forward,” chairman John McFarlane said in the statement.

“This environment is likely to continue and therefore we expect second-half performance trends to be broadly similar to the first six months, but with higher restructuring costs as we implement our strategic plan.”

Aviva is seeking to focus on core insurance and savings businesses in priority markets. The group sold British roadside rescue division RAC to private equity firm Carlyle for £1.0 billion last year.

It also offloaded businesses in the Czech Republic, Hungary and Romania to US peer MetLife for an undisclosed amount earlier this year.

London, Aug 9, 2012 (AFP)

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