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Anglo-Arab Insurance Brokers (AAIB) launched the first on-line global travel plan to include war and terrorism cover as standard at the Arab Travel Markets Conference and Exhibition in Dubai on  30th April 2012.

Marketed under the ‘Frontier Travel’ banner, www.frontiertravelinsurance.com offers insurance to travellers in any country in the world except the US and Canada and countries subject to global sanctions.

The new policy insures against accident as a result of war, invasion, civil war, riot, rebellion, insurrection, revolution, overthrow of the legally constituted government, civil commotion, military or usurped power, explosions of war weapons, murder or assault, terrorist activity and kidnap.

It was designed for companies engaged in the energy sector, reconstruction and development, media companies and even governments and their contractors.

It is the first time such a product has been available off-the-peg. War and terrorism can currently be added to conventional travel cover but only after referral back to an underwriter. This typically takes between 24 and 48 hours to arrange and can lead to a substantial increase in premiums.

The Frontier Travel plan can be bought on-line in minutes. It offers savings of up to 30% on current average prices and is available to anyone travelling in emerging and high risk markets, including security contractors and Journalists.

Because it can be bought on-line it is available to travellers from any non-sanctioned country, including those without a developed insurance infrastructure. It can be booked wherever there is internet access -even after a trip has begun.

The new product was developed by AAIB and its London underwriters drawing on AAIB’s deep knowledge of ‘frontier markets’ and the size of its war & terrorism book, which allows it to confidently assess risk and the minimum premiums required.

Benefits include up to $500,000 personal accident cover, comprehensive accident cover for riot, war terrorism and kidnap, emergency medical treatment and evacuation. The premium for seven days cover for a clerical worker going to Basra, Iraq with $100,000 AD&D and $500,000 medevac will be $41.43. Similar cover in Baghdad and Kabul is $43.24 and $23.34 in Kurdistan.

AAIB CEO William Wakeham said the new product is good news for any country deemed dangerous and any company doing business there. “Our Frontier Travel plan will aid the development of conflict and post-conflict countries by making it easier to do business with them.”

He added: “We want to make life as easy as possible for people working in these markets. Frontier Travel cover will allow companies with people travelling at short notice to insure themselves faster, cheaper and more comprehensively than ever before.”

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The end of the government and insurance industry’s Statement of Principles (SoP) agreement to provide insurance in high flood risk areas in June 2013 may prove positive for the UK insurance industry, Fitch Ratings says. Although potentially problematic for as many as 200,000 UK property owners in flood-exposed regions, a return to a system where insurers can price appropriately for risk and where existing market distortions are removed would be beneficial for UK insurers’ credit profiles.

The Association of British Insurers says the SoP will not be renewed because it believes it grossly distorts the insurance market. Under the SoP, the insurance industry agreed to provide flood cover to existing domestic property and small business customers at significant flood risk provided the government announced plans to reduce the risk to below a 1 in 75 chance of flooding within five years from July 2008. The insurance industry has been frustrated by the speed with which these improvements have been made and has expressed concern about GBP171m cuts made to the Environment Agency’s budget for flood defences.

We consider the most likely outcome to be a pooling of the risks, which may include a government subsidy. This approach to flood risk, and other catastrophe exposures has been taken by many other countries around the world and would ensure the availability and affordability of insurance for the minority of property owners whose properties are located in high flood risk areas.

Any government-backed scheme for flood protection would inevitably be complex and challenging to fund, and administrative costs could be burdensome. However, we would view the alternative of a free insurance market and the implications that this may have for the availability and cost of insurance in flood risk areas as even more challenging.

Another alternative would be to improve education and signposting to ensure that insurance is more likely to be taken up. This is unlikely to have an impact on the price and availability of insurance and could therefore leave some properties unprotected.

We expect insurance losses due to floods to rise in future due to the increase in the frequency and severity of flood losses from climate change, the increase in property values and the propensity to build in flood plains. Flood losses cost the insurance industry about GBP3bn in 2007.

One in four homes in the UK is at risk from flooding, the wettest April in the UK since records began and a forecast for a wet May have brought the importance of flood protection to the fore. Without some form of agreement there could be material declines in the value of properties that are either potentially uninsurable, or where premiums increase dramatically.

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Aon Benfield releases the latest edition of its Global Catastrophe Recap report, which reviews the natural disaster perils that occurred worldwide during April.

Published by Impact Forecasting, the firm’s catastrophe model development center of excellence, the report reveals that a series of severe weather events across central and southern sections of the United States caused upwards of USD1 billion in insured losses. Economic losses were even higher.

During the month’s most notable outbreak, multiple central states sustained widespread tornado, hail and wind damage. At least 94 tornado touchdowns were recorded during a 72-hour stretch. In Kansas, an EF-3 tornado just outside the city of Wichita affected at least 777 homes and 165 businesses. Additional tornado damage occurred in southwest Iowa and northwest Oklahoma, killing at least six people. Total insured losses from the outbreak were expected to reach into the hundreds of millions of dollars.

Meanwhile, a severe weather outbreak in Texas, which comprised at least 21 tornadoes and widespread hail, damaged more than 1,100 homes alone in the greater Dallas-Fort Worth metro region. Total economic losses were estimated at approximately USD1 billion, while various insurers received at least 105,000 claims with payouts in excess of USD650 million.

In South America, at least 18 people were killed and 20 more were injured as severe weather struck the Argentine capital of Buenos Aires, affecting at least 32,000 homes.

Steve Jakubowski, President of Impact Forecasting, said: “While not as substantial as the historic 2011 season to this point in terms of overall losses, the 2012 severe weather season has certainly caused significant damage across portions of central and southern sections of the United States. Tornado frequency data dating to 1991 indicates that May is typically the most active tornado month of the year in the U.S., which is a warning to all residents and insurers to remain cognizant to potential storm threats.”

Flooding was prevalent across South America during April, damaging at least 13,654 homes in Paraguay and killing at least 19 people in Colombia and Peru, where floods destroyed more than 25,000 homes.

In China, several events of hail and damaging winds affected six separate provinces during the month. The first event damaged more than 20,000 homes and caused a CNY750 million (USD120 million) economic loss. The second event killed at least 12 people, damaged 25,400 homes and resulting in a CNY530 million (USD84 million) economic loss.

In Vietnam, high winds and hail destroyed more than 4,780 homes in four northern provinces, killing at least two people, and causing a total economic loss estimated at VND104 billion (USD5 million).

In Japan, a powerful spring storm system brought typhoon-strength winds across much of the country. At least four people died and 372 others were injured. More than 520,000 Tohoku Electric Power Company customers lost electricity, and transportation via air and rail was delayed or cancelled.

Typhoon Pakhar became the first landfalling cyclone of 2012 in the Northwest Pacific as it came ashore in southern Vietnam. At least two people were killed and nine others were injured as the storm damaged more than 5,000 homes and structures in addition to infrastructure and agriculture.

To view the full April Global Catastrophe Recap report, please visit the link below: http://thoughtleadership.aonbenfield.com/Documents/201204_if_monthly_cat_recap_april.pdf

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British insurer Aviva said Thursday that more than half of its shareholders have failed to back its executive pay awards, in the latest sign of growing investor anger over boardroom pay. 

Aviva said in a statement after its annual general meeting in London that 54 per cent of shareholders voted against the insurer’s remuneration report.

Including abstentions, almost 59 per cent of investors failed to endorse the group’s executive pay policy. The rejection vote is non-binding but is nevertheless a major embarrassment for Aviva, which is Britain’s second biggest insurance company after Prudential.

Just last week, meanwhile, British bank Barclays revealed that almost one third of its shareholders had chosen not to back its annual executive pay awards amid controversy over chief executive Bob Diamond’s huge wage package.

Aviva’s defeat came despite chief executive Andrew Moss bowing to investor pressure and waiving a pay rise earlier this week that would have taken his salary above £1 million ($1.6 million, 1.2 million euros). Moss was last month awarded a 4.6-percent increase on his annual salary of £960,000 but decided to decline the hike.

Investor group Pensions Investment Research Consultants (Pirc) had called on Aviva shareholders to vote against its boardroom pay awards, dubbing them “excessive”.

Aviva chairman Lord Colin Sharman apologised to investors on Thursday for ignoring their views when setting pay levels for management.

“We recognise that a number of shareholders feel that we have not reflected their views, and overall shareholder value, in the judgments we made on remuneration and for this the board and I apologise,” he told the AGM.

“We also recognise that companies need to engage with shareholders on a more proactive basis around the sensitive area of executive remuneration and Aviva will continue to consult and engage with shareholders in this regard.”

Scott Wheway, chairman of Aviva’s remuneration committee, agreed that the group would now seek to address shareholders’ concerns.

“We take the views of our shareholders very seriously. I am disappointed that we haven’t done that as well as we should have on this occasion,” Wheway told investors.

“A number of shareholders have indicated that they would like to see a different approach to the way we compensate senior directors on recruitment and an even closer correlation between our pay packages and shareholder returns.

“Having listened to them, we have sought to address their concerns and will continue to engage with them on this matter.”

Earlier this year, the British government launched proposals that would give shareholders binding votes over executive pay, in a package of measures aimed at cracking down on excessive boardroom salaries and bonuses.

Barclays had announced last Friday that 32 per cent of shareholders had either voted against or withheld support for the bank’s 2011 remuneration report.

London, May 3, 2012 (AFP)

 

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The Insurance operations of XL Group has announced the appointment of Joan Lanzagorta as Client & Distribution Leader for its operation in Mexico, effective mid-April.

Bruno Laval, Regional Manager Iberia & Latin America for the Insurance operations of XL (”XL Group”), commented: “I am delighted to count on Joan in the role of Client & Distribution Leader. This is a key role to provide high quality service and attention to our clients and brokers and to our goal to achieve profitable growth for our operation in Mexico. Hence this recruitment represents an important strengthening of our local team and highlights our commitment to this market.”

Joan Lanzagorta has a broad experience in the Insurance industry. Prior to joining XL Group he spent 3 years with Chubb in Mexico as Chief Underwriter. Before that he was approximately ten years as an underwriter with Allianz, having started his career as a reinsurance broker with Guy Carpenter.

Alvaro Salamanca, XL Group’s Country Manager Mexico, commented: “Joan’s underwriting experience, combined with his in-depth knowledge of the market, position him well to expand our relationships in Mexico. He will also be able to provide valuable support to our brokers as well as our local and global program clients.”

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Novae Group today releases its first interim management statement for 2012.  This covers underwriting and investment performance for the first three months of 2012, the Group’s business review for the year to date and its outlook for 2012 as a whole.

Group highlights

–  Group gross written premium for the first three months of 2012: £231.1 million, up 5.7% (Q1 2011: £218.7 million).  This represents 37% of the planned gross written income for the year (Q1 2011: 34% of planned income)

–  Net claims ratio for the first three months: 59% (Q1 2011: 98%)

– Whole account renewal rates were modestly positive in the first quarter, driven by rate improvements in loss-affected classes (Q1 2011: 2% decrease)

– Strong investment return during the first three months of 2012: £6.9 million (Q1 2011: £3.7 million)

– Successful exchange offer for the Group’s 2017 subordinated bond generates a pre-tax gain of £4.9 million

Commenting today, Group Chief Executive Matthew Fosh said: “A year ago the high incidence of catastrophe losses obscured the substantive changes underway at Novae.  In Q1 this year the effect of these changes has gained momentum, building towards the 13-15% pre-tax returns on equity that we have targeted.”

Underwriting

In the first three months of the year the Group wrote £231.1 million of gross premium income (Q1 2011: £218.7 million).  This represents 37% of the planned gross written premium for the year (Q1 2011: 34% of planned income).

The composition of first quarter gross premium by segment, together with the comparative information for 2011, is set out below:

 

Q1 2012 £m

Q1 2012 %

Q1 2011 £m

Q1 2011 %
 

Insurance

106.1

46%

93.4

43%
Reinsurance

125.0

54%

125.3

57%
Total

231.1

100%

218.7

100%

The Board continues to expect the premium split for 2012 as a whole to be around 65% for the insurance segment and 35% for the reinsurance segment (excluding inwards reinstatement premiums).

On a whole account basis, rates on renewal business in the first quarter were modestly positive reflecting rate improvements in loss-affected classes.  This compares to a 2% decrease in the equivalent period in 2011.

Insurance

During the first quarter the insurance segment performed in line with business plan.

In the property hub there was a reduction in loss estimates from the Japanese tsunami and earthquake offset by an increase in the loss estimate from Thai floods.  The UK property units benefited from a much more benign winter than in the two previous years.

The marine hub saw a higher level of claims activity in the first quarter, including losses currently estimated at less than $10 million from the Costa Concordia; this was partially offset by reserve releases from earlier years.

The financial institutions and professional indemnity hub performed in line with business plan.  The credit & political risk hub performed slightly better than plan.

Reinsurance

In the reinsurance segment there was a broadly neutral impact from the major catastrophe events of 2011.  For property reinsurance there were modest reductions in loss estimates from the Japanese tsunami and earthquake and the Thai floods and an increase in the New Zealand earthquake losses.  There was also a reduction in loss estimates from the marine reinsurance hub in respect of the Thai floods.

Elsewhere, there were some reductions in premium estimates in respect of the agriculture reinsurance hub but a benefit from benign loss experience in the aviation reinsurance hub.

 

Investments

As at 31 March 2012 the Group had investment assets of £1,173.7 million (Q1 2011: £1,143.6 million).

Investment return for the first quarter of 2012 was £6.9 million on average assets of £1,191.3 million, equivalent to a return of 0.58% on average assets (Q1 2011:  £3.7 million, £1,136.8 million and 0.33% respectively).  The portfolio had an overall duration at 31 March 2012 of 0.8 years (Q1 2011: 0.9 years).  Its estimated yield to maturity at the end of Q1 was 1.0% (Q1 2011: 1.5%).

The performance in the first quarter is a result of the Group’s asset allocation to strong investment grade bonds, primarily denominated in sterling and US dollars.  As central banks continue to guide towards low interest rates in the short to medium term, the first quarter’s performance reflects a transfer of the recognition of return from future periods.  The Board has re-confirmed its total return target for the year as whole of 1.00-1.25%.

2017 subordinated notes

On 12 March 2012 the Group announced an exchange offer under which holders of its £69.4 million (nominal value) 2017 subordinated notes could exchange their existing holdings for new 6.5% 2017 senior notes at an exchange ratio of £900 new senior notes for every £1,000 existing subordinated notes.

On 19 March 2012 Novae announced that it had received valid acceptances under the exchange offer in respect of £66.6 million (nominal value) existing subordinated notes, equivalent to 96.0% of the outstanding subordinated notes in issue.  The exchange offer therefore generated a pre-tax gain of £6.7 million before deduction of residual unamortised original issue costs of £1.8 million, and thus a net gain of £4.9 million.

Following completion of the exchange offer £2.8 million (nominal value) subordinated notes remain in issue; and £59.9 million (nominal value) of new senior notes have been issued.

Outlook

Compared to Q1 2011, the first quarter of this year shows a pronounced improvement.  This is consistent with the absence of major insured natural peril losses so far in 2012.  2009 and prior underwriting years are generally stable.  2010-2012 underwriting years are performing in line with business plan.

Although a significant proportion of the year remains on risk, performance to date in 2012 has been much more satisfactory than at the same stage last year.  Rating across the whole account is modestly positive with further momentum expected in the second quarter which includes the important 1 April renewal date.  However, there is little evidence in the first quarter of a broadly-based market turn.  Given this environment, Novae’s focus remains on optimising its business mix to enhance return on equity and deliver on the targets set by the Board.

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Business and Enterprise Minister Mark Prisk has announced the next stage of the Government’s new £10 million ‘Start-up Loans’ for young people pilot scheme.

The initiative aims to provide budding entrepreneurs with support and a small amount of capital to help them get started as well as access to training and business mentors.

The Government is now inviting organisations and consortiums who can offer the right level of support to deliver the programme to bring forward their proposals.

Business and Enterprise Minister Mark Prisk said:

“We want to give young people the best possible chance to start and grow their own enterprise. This scheme is not just providing a small amount of funding, but is about looking at the bigger picture and we want to be able to offer a full package of business training and mentoring.

“We want providers to come forward and demonstrate how they will be best placed to deliver this exciting scheme. By encouraging more young people to get into business we will be able to boost their entrepreneurial spirit and help the future growth of the UK economy.”

An initial £10 million has been announced to provide capital for Start-up Loans that will help tens of thousands of young people take their first steps as entrepreneurs every year.

Stu Anderson, Project Director Shell LiveWIRE said:

“These loans offer the chance for many young people with little financial track record to access seed funding to get their ideas off the ground.

“There are thousands of young people with great ideas who find it hard to access funding because of this. This scheme not only offers a chance to finance an idea, but it also packages together support to ensure that they have they best possible chance of success in business.”

Full details of the scheme will be announced following the expressions of interest stage. Any young person between the ages of 18-24 with a viable business idea could be eligible.

This year the Government is running the Business in You campaign to encourage more people to start or grow their business throughout 2012 using a range of existing support services. More information is available at businessinyou.bis.gov.uk.

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Specialist Lloyd’s insurer Jubilee has appointed John McGonigle as Head of Affinity and Special Risks.

McGonigle assumes responsibility for the profitable performance of Jubilee’s diverse affinity and special risks portfolio and its service delivery to broker and affinity partners. He will focus on building on the team’s record of innovative and broad product solutions.

Johnny Rowell, Chief Executive of Jubilee, said: “Affinity and special risks are key to our growth strategy. We have continued to invest in the broadening of the team’s expertise and knowledge which has delivered strong results. The team will no doubt benefit significantly from John’s proven track record and experience.”

John McGonigle said: “Jubilee has proved that building and maintaining a successful affinity partnership is more than just specialist underwriting expertise.

“Innovation and responsive services to business partners are important differentiators in this market, working with the team to build on these strong foundations will be an exciting challenge.”

McGonigle joins Jubilee from AmTrust where he was Head of Underwriting – Property and Special Risks. He has 21 years insurance experience, the majority of which has been spent in the underwriting and management of special risks and affinity business.

Senior Class Underwriter, Piers Faulkner has been appointed as Deputy Head of Affinity and Special Risks to work alongside John in managing the team.

The Affinity and Special Risks portfolio includes all risk gadget and mobile phone insurance, warranty covers and added value and add-on products.

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A Falkirk based business is celebrating a significant milestone; employing its 100th staff member – only six years since launch.

Insurance reinstatement contractor; Edinmore Contracts is continuing to go from strength to strength, almost doubling its workforce in the past year and increasing its fleet of vans on the road to an impressive 65.

The latest addition to the team will go a long way to helping the Carronshore-based company achieve its goal to be the contractor of choice by insurers, with the focus very much on developing the business and indeed growing the team.

Director Clarke Faichnie said:

“To have reached one hundred employees is for us, a momentous milestone. We have gone from a two-strong team starting on mainly maintenance work to one hundred skilled and specialist staff offering a one stop service for building repairs and restoration services to the insurance industry.

 “It is a great feeling being able to employ people and know that you’re doing something for your local community, and we’re all looking forward to a successful future in Falkirk.”

Edinmore has been supported throughout the process by Falkirk for Business, who provided valuable start up advice and support. Business Growth Advisor Dorothy Henke has been following their success over the years, and is delighted to see a home grown company lead the way in its field.

Speaking today Dorothy said:

“It is very rewarding for us to see a business idea like Edinmore Contracts come to fruition. From a team of two to one hundred employees in such a short space of time is testament to their hard work and innovation. It also highlights the positive success stories coming out of the Falkirk area and what a great place it is to do business.

 “By nurturing small businesses and creating a supportive business environment, we are succeeding in diversifying and securing the long term sustainability of the local economy.”

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Thatcham Research reiterated their approach to addressing the UK’s whiplash epidemic at today’s Lyons Davidson International Whiplash Conference in Bristol.

Speaking alongside some of the world leading experts on the topic, Head of Research at the insurers’ research centre, Matthew Avery, told delegates that engineering holds the key, through the continued introduction and availability of Advanced Driver Assistance Systems (ADAS) to prevent and mitigate accidents.

Whilst a wide range of ADAS systems are already providing many motorists with an additional level of safety, it is Autonomous Emergency Braking (AEB) systems in particular that are integral in preventing whiplash. Avery pointed to real world international claims data demonstrating a claims frequency reduction of both personal injury and accident damage of more than 25% in a year long study based on Volvo’s AEB system ‘City Safety’. Other international studies reveal a similar trend for crash reduction associated with AEB fitment and dependent upon the functionality of individual systems.

The vehicle safety experts at Thatcham Research firmly believe that AEB technologies are fundamental in reducing crashes and consequently whiplash claims and are working on a number of initiatives both with insurers and vehicle manufacturers to drive this forward.

These include the development of AEB testing protocols to measure system performance both for car-to-car and car-to-pedestrian impact scenarios – Thatcham are proposing these test procedures to Euro NCAP, the European vehicle safety organisation, for consideration on potential inclusion within their vehicle safety ratings by 2014.

Meanwhile, Avery also revealed that a proposal for AEB to be recognised within the Group Rating system is currently being considered, which has the potential to reduce premiums with standard fitment of such systems.

“The effectiveness of AEB systems as primary vehicle safety technologies in preventing accidents from occurring in the first place is the key to reducing both personal injury and accident damage claims. As we see more and more manufacturers beginning to offer effective crash prevention systems on a range of mainstream, volume selling vehicles, we should begin to see a reduction in claims, which can only be good news for insurers and motorists. Through our testing protocols and with ongoing support from manufacturers, key safety organisations and stakeholders, Thatcham will continue to drive the quality and range of available systems with the view that prevention is better than cure” – Matthew Avery, Head of Research at Thatcham.

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The European Union said Wednesday it was ready to resume negotiations on financial assistance to Hungary after Budapest bowed to pressure to maintain the independence of its central bank. The decision, announced by European Commission spokesman Olivier Bailly, will see talks also involving the International Monetary Fund on a credit line worth 15-20 billion euro ($20-26 billion) that was first sought last November. 

The former communist bloc state, whose Prime Minister Viktor Orban has a two-thirds majority in parliament, has been repeatedly at loggerheads with Brussels over the past year but it needs help from its European partners.

The Eurozone debt crisis has hit the Hungarian economy badly, the forint has tumbled to record lows and borrowing costs having risen sharply, with foreign banks outraged by several government measures, including additional levies.

“The Commission has today assessed that Hungary has taken sufficient action and commitments to enter into negotiations on precautionary balance of payment assistance,” the EU executive said in a statement.

The news gave a boost to Hungary’s currency, the forint, which firmed to 287.50 against the euro from 291.80 before the announcement. On Monday, the forint was trading at around 300.

The level of credit default swaps (CDS), the price of insurance against default on government bonds, fell to 559 basis points (5.59 percentage points) from 570 basis points earlier on Wednesday.

It was down from around 600 on Monday. On Tuesday, European Commission president Jose Manuel Barroso welcomed Hungary’s decision to change a disputed law which Brussels and other critics said fatally compromised the independence of the central bank.

The change of stance was demanded to ensure a “stable and independent legal environment that lies at the heart of … investors’ confidence and influences macroeconomic stability,” Wednesday’s statement said.

While Hungary has changed tack on its central bank, the European Commission will still take Budapest to the European Court of Justice over a data protection law and legislation on the retirement age of judges, Bailly said.

Budapest must now consult with the European Central Bank and the statement stressed that “before the negotiations can be concluded, the Commission expects that the commitments are fully implemented.”

No date was given for the start of the EU and IMF negotiations, with the Commission saying simply that dialogue would now begin with the Hungarian authorities over the “modalities” of the talks.

Earlier this month, Orban attacked the EU in a weekly radio interview slot at home for imposing political conditions on the badly needed loan, saying these “would amount to blackmail.

“We are working in a very good cooperation spirit with Hungary,” Bailly said of the process.

During the 2008-2009 financial crisis, Hungary barely escaped bankruptcy, thanks to a credit line of 20 billion euros from the IMF, World Bank and EU.

The central bank on Tuesday left its base interest rate unchanged at 7.0 per cent for the fourth month in a row. Its governor said that an austerity programme announced Tuesday by the government, which relies heavily on higher taxes, could fuel inflation, which will probably be higher than the 4.2 per cent forecast.

Brussels, April 25, 2012 (AFP)

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The latest benchmark AA British Insurance Premium Index shows that over the first quarter of 2012, the average cost of annual home and contents insurance policies fell slightly after a long period of sustained increases – particularly for buildings cover.

The Shoparound summary, an average of the five cheapest quotes from a range of insurers against a nationwide basket of risks, shows that the cost of buildings cover increased by 0.5% to £181 while for contents cover, the premiums dropped by 1.7% to £109.  The premium for a combined policy, increased by 1.5% to £260.

Over the 12 months ending 31st March, the Shoparound index shows premiums for buildings rose by 7.1%; for contents 3.7% and for combined buildings and contents policies 7.6%.

Simon Douglas, director of AA Insurance says that while the premium increases of the past couple of years, particularly for buildings insurance, appear to have ended insurers remain concerned about the effects of severe weather events on homes.

“We escaped with a relatively mild winter which hasn’t resulted in an avalanche of claims for damage caused by low temperatures and heavy snowfalls.

“In fact, the weather has remained dry which has led to widespread hosepipe bans and speculation that there might be an increase in subsidence claims.

“It is true that extended periods of dry weather can lead to costly subsidence problems and although we are seeing a small increase in such claims it will take sustained low rainfall coupled with high summer temperatures to cause another catastrophic ‘subsidence year’ for the insurance industry.”

Meanwhile, the insurance industry is pressing for government action to ensure that after an agreement between the Association of British Insurers and the Government expires in June 2013, homes in flood-risk areas will still be able to get cover.

Mr Douglas says it’s vital that a solution is reached quickly in order to ensure that at-risk homes can continue to be insured.

 “The UK insurance industry is unique in that its home policies automatically include flood cover.  In other countries, flood risk is bought separately or is underwritten by state pooling arrangements funded by taxpayers,” he adds.

Mr Douglas points out that home insurance continues to provide extremely good value for money.  “The market average premium has risen by only £67 since 1994, when the quarterly AA Index started – an average increase of less than £4 per year.  Over the same period, the market average premium for comprehensive car insurance has risen by over £64 per year.”

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With just 95 days to go before the start of London 2012, Great Britain’s Olympic beach volleyball squad and health benefit company Aetna announce today of their deal for Aetna to become the squad’s first major commercial sponsor.

The Olympic beach volleyball tournament will occur in July and will be staged at the Horse Guards Parade. Tickets for this event, are already the most oversubscribed of the entire Games.  This relationship between Aetna and the UK Volleyball team, covers 2012 whilst also bringing  the athletes much needed financing to aid their progress in the the Olympic Games.

The news comes as Team GB continue their preparations for the Games and their bid to secure extra team spots in both the men’s and women’s competitions, in addition to the automatic entitlement as hosts to one place in each. Team GB has been represented at the Games on only one previous occasion, at Atlanta in 1996, when the women’s team participated.

Under the terms of the sponsorship, Team GB players’ kits will carry the Aetna logo as they face a hectic travel, training and qualifying tournament schedule in the lead up to the Games. The sponsorship was brokered by sports specialist Beach Volleyball UK Ltd.

David Healy, General Manager of Europe, Aetna International, said: “We’re proud to offer our support to Team GB as they seek to use London 2012 as a launchpad to grow interest and participation in beach volleyball.

As an organisation, we are committed to empowering people to live healthier lives through the provision of  both insurance and health management services. This partnership is the perfect fit for us, given the fact that volleyball is a sport that can be played by anyone, yet it also demands its competing athletes maintain the highest levels of health, nutrition and fitness.”

Richard Callicott, President of the British Volleyball Federation, said: “This significant sponsorship with Aetna is wonderfully welcome as an opportunity to intensify our preparations and continuing efforts to both qualify and perform at the London 2012 Games.

It gives us particular pleasure to work with a leading company in the global health care industry, given the emphasis of our sport on activity, strength, fitness and high-quality athleticism, in addition to well-being and fun.”

GB Head Beach Coach, Morph Bowes, furthermore added that the sponsorship will allow the Squad to focus on its efforts on the FIVB Swatch World Beach Tour and other Olympic qualifying events in a bid to qualify both women’s teams for the Horse Guards Parade event, and to further support the best efforts of a men’s team in their bid to represent their country.

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British insurer Aviva is set to pull out of the US in a move that could cost the company around £1 billion ($1.6 billion, 1.2 billion euros), the Sunday Times reported. 

The newspaper said Aviva’s chief executive Andrew Moss was expected to announce the sale of Aviva USA at an investor day on May 24.

“The American life assurance business is likely to fetch no more than about £1 billion — roughly half what the company paid for it six years ago,” the broadsheet said.

The planned sale is part of a change of strategy agreed between Moss and his incoming chairman John McFarlane, the paper added.  Aviva, Britain’s second biggest insurer and the sixth biggest worldwide, last month announced an 85 per cent slump in annual net profits on exceptional charges and due to economic strains in Europe.  The company has 36,600 employees worldwide and around 43 million customers.

London, April 22, 2012 (AFP)

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    Aon Benfield, the global reinsurance intermediary and capital advisor of Aon today releases the latest edition of its Global Catastrophe Recap report, which reviews the natural disaster perils that occurred worldwide during March.

    Published by Impact Forecasting, the firm’s catastrophe model development center of excellence, the report reveals that a significant severe weather outbreak impacted parts of the U.S. Midwest, the Tennessee Valley and the Southeast during the first week of March, killing at least 41 people.

    The U.S. Storm Prediction Center (SPC) cited at least 65 tornado touchdowns, including two EF-4 tornadoes that caused extensive damage in parts of southern Indiana, Kentucky, Tennessee and southwest Ohio. Total economic losses were estimated at approximately USD2.0 billion, while insured losses are expected to breach USD1.1 billion amid more than 170,000 insurance claims.

    Additional U.S. severe weather activity was recorded during the month, including a system that impacted the Great Lakes. In southeastern Michigan, an EF-3 tornado damaged or destroyed at least 207 homes in the town of Dexter. Total economic losses were estimated at USD275 million, while insurers received at least 20,000 claims with payouts expected to exceed USD150 million. Late in the month, another storm system resulted in at least 46 tornado touchdowns across parts of the Plains, Midwest and the Southeast. Tornadoes were also recorded in Indonesia and Australia.

    Steve Jakubowski, President of Impact Forecasting, said: “Following an active 2011 U.S. severe weather season, the first quarter of 2012 has also proven itself to be markedly busy. Through the first three months of 2012, we have already sustained more than USD1.8 billion in insured losses from convective storm events as we enter the climatologically most active severe weather months of the year. Despite the heightened activity thus far, it is nearly impossible to forecast and project losses for the rest of 2012.”

    Elsewhere during the month, a magnitude-7.4 earthquake rattled central and southern Mexico, killing at least two people. The Mexican Association of Insurance Institutions (AMIS) reported insured losses of around MXN2.07 billion (USD163 million), following damage to 44,000 homes, businesses, hospitals and schools.

    In other earthquake activity, a magnitude-7.1 temblor struck central Chile, and was labeled an aftershock from February 2010’s magnitude-8.8 event. Total economic losses were expected to be below USD100 million.

    Meanwhile, in China’s Xinjiang region, a magnitude-5.8 earthquake left 36,641 people homeless and caused direct economic losses of CNY523.5 million (USD82.7 million).

    Flooding affected portions of Australia’s New South Wales (NSW) and Victoria between the end of February and the first half of March, killing at least two people. The Insurance Council of Australia declared a catastrophe for NSW Riverina, NSW Central West, and northern Victoria, as at least 8,914 claims were filed, with insured losses reaching  AUD108.2 million (USD112.5 million).

    Additional flood events during the month were recorded in parts of the Philippines, Fiji, Ecuador, Chile, Colombia and the United States.

    Cyclone Irina’s landfall led to the deaths of at least 84 people in Madagascar, Mozambique and South Africa. More than 78,000 were left homeless and wide swaths of agriculture were submerged.

    Also in March, Cyclone Lua made landfall in Western Australia and caused minimal damage. Total economic losses of AUD217 million (USD230 million) came from lost business when Port Hedland briefly closed.

    To view the full March Global Catastrophe Recap report, please visit the link below:

     http://thoughtleadership.aonbenfield.com/ThoughtLeadership/Documents/201203_if_monthly_cat_recap_march.pdf

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    According to catastrophe modeling firm AIR Worldwide, just one month after a notable tornado outbreak across parts of the Midwest and the Southeast, a severe thunderstorm on April 3 spawned up to 10-12 tornadoes that caused extensive, though localized, damage due to high winds, heavy rain, and hail in seven counties in the Dallas-Fort Worth region of Texas. The suburban communities of Arlington and Lancaster experienced significantly damaged buildings, with several homes and businesses flattened by the tornadoes. In Lancaster alone, 300 structures were damaged by the tornadoes.

     “On average, April and May are the most active months for severe thunderstorm activity in Central Texas, and Tuesday’s activity was typical for the time of year.  However, given the location of this specific cluster of tornadoes, the impact of these storms was magnified,” said Dr. Tim Doggett, principal scientist at AIR Worldwide.

     “Severe thunderstorm activity developed Tuesday, April 3 as a jet stream disturbance interacted with a cold front moving eastward across the southern Great Plains,” commented Dr. Doggett. “Although the conditions were initially only marginally favorable for severe weather, by mid-Tuesday the warm humid air from the Gulf of Mexico had fueled a line of thunderstorms. These storms quickly intensified as they moved north into the Dallas-Fort Worth area.”

    Preliminary severe storm reports available Tuesday night indicated that up to 10 to 12 tornadoes may have impacted the area. Continued damage surveys over the next few days are expected to clarify the number of tornadoes spawned by this storm.

    Dr. Doggett continued, “Several tornadic supercell thunderstorms formed within the line, aided by rotation provided by the jet stream disturbance moving overhead.  The first tornadic storm formed south of Dallas-Fort Worth, between Fort Worth and Arlington.  A tornado was reported in Lancaster, which later crossed Highway I-20 in the Kennedale area and moved northeast toward Arlington before dissipating.  A second tornadic storm produced additional tornadoes further east.  A tornado formed south of the city of Dallas, which moved to the northeast before ending in Mesquite.  A second apparent tornado from this storm tracked between Forney and Terrell, moved northeastward and dissipated before reaching Highway I-30.”

    As of Wednesday morning, the storm system has moved northeast and is predicted to generate severe thunderstorm activity in the lower Mississippi Valley and Tennessee Valley. According to the NOAA Storm Prediction Center, the states at greatest risk for severe storms include Louisiana, Mississippi, Arkansas, Alabama, and western Tennessee. Although tornadoes may be produced by these forecasted storms, the large hail and strong winds are the most likely hazards.

    Until the National Weather Service completes damage surveys of the affected regions of North Texas, the full impact of these tornadoes will not be known. The National Weather Service plans to issue public information statements by the evening of Wednesday, April 4, with further damage information. However, as of Wednesday morning, fully 650 homes and many businesses in suburban communities around Dallas have been damaged. Powerful winds peeled roofs from homes, leveled businesses, and tossed empty big rigs nearly 100 feet into the air. Nearly 14,000 homes and businesses in the region are still without electricity..

    According to AIR, in general, residential structures in the affected area are wood frame buildings that are more vulnerable to strong winds and windborne debris than masonry structures. Although commercial buildings tend to be more resistant to damage than residential structures or automobiles, they exhibit a broader range of damage due to variations in their construction and design. Light metal structures are the most vulnerable to high winds, and can experience severe or total destruction from tornadoes classified as EF-2 or higher.

    For all types of structures, roofs are often the first component to be damaged by the tornado. After roof damage is initiated by the removal of a single shingle, neighboring shingles are easily peeled from the roof. Tornado winds can also peel off unsecured roof slates, roll metal roofs, and damage windward overhangs and eaves. In the direct path of a tornado, roof failure weakens the lateral support of the walls and contributes to the building’s collapse. On the periphery of the storm track, less severe damage is expected.

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    Ten years on from becaming the first countries to legalise euthanasia, the Netherlands and Belgium now provide assisted suicide to 4,000 people a year.

    While most are cancer sufferers, a new interpretation of the law is extending the treatment to those suffering from Alzheimer’s disease as well.

    Since euthanasia became legal in the Netherlands in April 2002, “the statute has remained unchanged, but what has changed is the the way doctors interpret it,” said Inge Freriksen, spokeswoman for the Dutch health ministry.

    ‘Mercy killing’ by lethal injection is allowed in the Netherlands for patients who are fully mentally alert but whose suffering has become “unbearable and unending” due to incurable disease.

    About a third of all the requests deemed to be “serious” are honoured by doctors, the ministry said.

    “The concept of ‘unbearable suffering’ has become much clearer” over the years, said Eric van Wijlick, policy maker at the Royal Dutch Society of Doctors.

    The overwhelming majority of patients who were euthanised in the Netherlands in 2010 suffered from terminal cancer, about 80 percent choosing to die at home.

    Six roving medical teams — each with a doctor and a nurse — were recently set up to assist people to die at home when their own local doctors refused to give them lethal injections.

    Their intervention has already been requested 100 times since the teams were set up in March, De Jong said.

    But this has raised questions in the Dutch medical association.

    Euthanasia has become the central point of conversation between a doctor and a patient who is suffering when it should be seen as a “last resort”, Wijlick said.

    Belgium followed the Dutch example later in 2002 with a law legalising euthanasia after a long debate between Christian and secular parties.

    There were 1,133 mercy killings in Belgium in 2011, representing 1.0 percent of deaths in the country, its Commission for the Evaluation and Control of Euthanasia reported.

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    Many employers are not offering one of the most important benefits to protect their employees and their families according to research conducted by Jelf Employee Benefits. 

    Nearly 3 out of 4 respondents (74%) indicated that Income Protection insurance was of greater importance to their workforce than Life Assurance cover.  Yet the majority of employers offer life cover as standard, with Income Protection coverage a very long way behind.

    Income Protection is a vital insurance for employees, as it offers a continuation of the employee’s income should the employee be off work long-term through illness or injury.  Whilst this has always been of value, this is now ever more important as new legislation creates further barriers to the long term sick claiming state benefits.

    Commenting on the findings, Steve Herbert, head of benefits strategy for Jelf Employee Benefits said:

     “It’s clear from our research that employers accept that Income Protection cover is the most relevant employee benefit for their workforce.  Despite this fact, less than half of companies (47%) offer this benefit currently.

     “Conversely, we found that life assurance was a benefit on offer via a much larger number of employers (82%), even though employees are some three times more likely to be off work with a long-term illness than die.  This is a strange mismatch, and one that employer’s really should seek to address.

     “What’s more, even where an Income Protection policy has been put in place by an employer, it often only covers senior employees.  It’s generally accepted by the industry that only 1 in 10 private sector employees are actually covered by an Income Protection policy.”

    Social demographics have moved on, people are living longer, and many illnesses are now treatable that haven’t been in the past.  As a result Income Protection may now be more relevant than previously, and Jelf Employee Benefits is advising employers to bring their benefits up to date to reflect the changing needs of their workforce.

    Income Protection is a key benefit, as without continued income, an ill employee will often struggle to meet their financial commitments, thus adding financial problems and related stresses to the existing medical issues.  This can be devastating for the wellbeing of the employee and their family.

    In conclusion Herbert said:

     “There is a lack of understanding among both employers and employees in terms of what Income Protection actually involves, and the important benefits it can offer.  In our view it is a vital component of a benefits package for the 21st century, and is one of the most important benefits an employer can offer.

     “We believe that employers may be failing their employees by not offering it.”

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    Build Assure, a trading name of the National Register of Warranted Builders, a subsidiary of the Federation of Master Builders (FMB), the largest trade association for the SME sector in the UK construction industry, today launches a new insurance product which protects its members and general developers against financial loss arising from latent defects in new build properties.

    The product, Build Assure New Home Policy, offers up to £10 million contract value per property protection and, for the first time, is not targeted solely at larger developments.

    It is available to all FMB members and general developers, and can even be purchased in relation to single properties, making it ideally suited to the high net worth (HNW) individuals sector.

    The product has been structured by Aon Benfield and is underwritten by Lloyd’s of London insurer Argo Syndicate 1200, and Swiss Re.

    The latent defects product provides market-standard cover to policyholders, with the additional benefit of a 12-month liability period in relation to structural defects. It meets the cost of rectifying errors in materials, design, workmanship, and specification, which are not apparent when the project is completed but which are discovered at a later date.

    David Hill, Director of Build Assure, said: “More than 2,000 FMB members are involved in new build projects of various sizes, and we believe this product will be of enormous benefit to them, providing peace of mind and financial security should latent defects come to light after completion of the job.”

    Kurt Cripps, Account Executive at Aon Benfield, said: “In structuring this product, Aon Benfield has sourced the highest quality cover from the world’s leading insurance markets. Both Argo Syndicate 1200 at Lloyd’s of London and Swiss Re are hugely experienced in all types of liability cover, and offer the highest level of financial security available in the global insurance markets today.”

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    MetLife has re-launched its Group Life Protection product as part of the ongoing expansion of its growing Employee Benefits business.

    The product changes continue the transformation of MetLife’s employee benefits business following the appointment of Stephanie Baillie as Employee Benefits Director, and build on 2011 growth in both new business and retention of existing clients.

    Registered and excepted policies will now be available. Other product enhancements include increasing maximum ages for cover to 75 from 70 and providing early retirement cover to all retirees, as well as increasing the maximum temporary cover above the free cover limit from £1.25 million to £3 million and expanding cover to include all causes, not just accidental death cover.

    Actively at work requirements have been improved, with scheme members only required to be at work on the day before the scheme starts, and terms for schemes transferring from other providers have also been enhanced.

    MetLife believes the re-launched product will enable it to maintain its strong service commitment which has seen it retain 85% of clients year on year while focusing on developing new business.

    Stephanie Baillie, Employee Benefits Director of MetLife UK said: “Enhancing our existing Group Life product is a logical first step in building our offering in the employee benefits market.

     “MetLife’s global expertise and strong heritage in the group protection market give us a robust base from which to build our tailored approach for the UK market.”

    Additional product launches are planned in 2013 with MetLife also focusing on further developing customer service and distribution to deepen relationships with IFAs and Employee Benefit Consultants.

    The group has set up a dedicated sales support team to help increase the focus on intermediaries with administration now being handled by a dedicated operations team to enable a clearer focus on customer service and retention.

    MetLife is one of the fastest-growing life and pensions groups in the UK and has its UK Employee Benefits division in Brighton*. Employing around 150 people, it is the UK hub for the sales and administration of its employee benefits and individual protection businesses.

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