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Aon Risk solutions has released it latest edition of its aviation data report : Airline Insurance Market Indicators 2011/12. As the frenetic renewal season in the aviation insurance market starts, the report states that premium volumes are so far holding steady despite significant increases in forecast risk exposures.

Aon reports that as a result, the underlying cost of insurance continues to slide, most significantly for carriers that are growing allied to a strong brand and track record with the market as a whole. Capacity remains buoyant but to a degree, risk selective, considering that pricing is at a 10 year low-point, the report says. The market remains sympathetic and buyer friendly for those with the brand and profile to leverage capacity.

Airlines have forecast that fleet values will increase by around 10% on average during the course of their 2011/12 insurance programmes, with passenger numbers due to rise by 14% during the same period. Conversely, premium has grown by only 1% on a year to date basis. Although exposure growth may slow a little as many of the world’s major programmes are negotiated and placed in November and December, there is little to suggest the underlying trend will change.

The report reveals that following two years of exceptionally high claims, 2011 has so far been very low in comparison. Estimates suggest that that there has been around US$469 million of airline hull and liability claims between January and October, compared to an average of US$862 million for the same period between 1995 and 2010. Fatalities are similarly well below average.

Commenting on the report’s findings Simon Knechtli, Aon Risk Solution’s aviation leader said, “The divergence of the airline insurance market can be seen very clearly when examining renewals by region. African and Asia Pacific exposure has leapt forward, bringing increased premium to the market but the value of this to insurers comes at a cost of needing to swallow reduced rates. European carriers are growing more steadily but the rates have equally fallen to the point where less premium has been generated compared to last year.

“The renewal season continues to heat up and as it does so the market’s players are increasingly vocal about the direction of pricing,” Knechtli continues. “Today the position is clear, but it is the individual strategies of influential insurers that may be just as telling as the mere balance of capacity supply and demand and the level of airline losses. Our clients will be keen to see the detail and our Airline Insurance Market Indicators report helps with an overview and focus on the statistics.”

Source : Aon Risk Solutions

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In the first nine months of 2011, sales rose 10 per cent for Prudential compared with the same part of last year thanks to strong performances across Asia.   

The company said insurance sales totalled £2.7 billion (3.15 billion euros, $4.34 billion), up from £2.46 billion in the first nine months of 2010. The result beat analyst expectations for sales of £2.675 billion, according to Dow Jones Newswires.

“Prudential has delivered strong results in the third quarter in a volatile and challenging environment,” said chief executive Tidjane Thiam.

“Our main strength is Asia. We grow anywhere between 15 and 25 per cent per year in Asia, which shows business doubles every three to five years. We’re still well on track to do that.”     Thiam added that he expected Prudential to overcome economic turbulence in Europe.

“Whatever happens in Europe, we’ll be less affected than others … We’ll do better than others because everybody else is more exposed,” he said, adding that the company’s exposure to the troubled Eurozone economies was limited.

London, Nov 8, 2011 (AFP)

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Neil Wormald has been promoted as Arista’s branch manager for the North East of England. Based in Arista’s Leeds office, Neil will take on greater responsibility in the drive for the development and growth of Arista in the North East.

With this promotion, Neil’s responsibilities will extend to include the leadership of the underwriting team and broker development in the area, as well as identifying further opportunities for Arista in the region.

Neil brings over 20 years’ insurance experience to his new role, with extensive experience of the local market and commercial insurance. Since joining Arista from NIG in January 2010, where he was previously a regional manager based in Leeds, Neil has played a significant part in launching Arista’s Leeds office and developing its offering.

With this strategic move, Arista is putting in place the management structure required to fulfill its ambitions in the North East as well as bringing an increased level of support to independent brokers.

Commenting on Neil Wormald’s promotion, chief executive Charles Earle, said: “Neil has been instrumental in establishing Arista’s Leeds office and developing Arista’s North East market. Since its opening in January this year, the Leeds office has gone from strength to strength. I am delighted that Neil will continue to lead the team of highly successful and talented individuals in forging even stronger relationships with local brokers.”

Source : Arista

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AIR Worldwide has released an inland flood model for Germany, which offers a fully probabilistic approach for determining the likelihood of flood losses from all types of storms.

The model provides insurers and reinsurers with a robust tool for managing inland flood risk — allowing companies to make informed underwriting decisions, to monitor and quantify aggregate concentrations of flood risk across their portfolios, and to assess the potential impact of less frequent but large loss events.

 “To meet the challenge of capturing both large-scale and small-scale precipitation patterns, AIR has adopted the innovative approach of coupling a state-of-the-art Global Climate Model (GCM) with a detailed Numerical Weather Prediction (NWP) model,” said Dr. Jayanta Guin, senior vice president of research and modeling at AIR Worldwide. “The result is a sophisticated model that simulates realistic and robust storm patterns over space and time, allowing companies to manage their risk from flooding both on and off the floodplain.”

The AIR Inland Flood Model for Germany includes on-floodplain flooding, which covers a river network extending more than 160,000 kilometers and comprising more than 30,000 stream links, and off-floodplain flooding, which is modeled according to the specifics of more than 35,000 small catchments (drainage areas) in Germany.

Flooding is a regular occurrence in Germany — and not limited to the coast or low-lying river valleys, but nearly ubiquitous due to off-floodplain flash flooding. With a significant percentage of losses from the 2002 floods occurring off-floodplain and much of that loss occurring in highly exposed urban areas, AIR has developed an explicit module for off-floodplain loss estimation. The off-floodplain model accounts for elevation, runoff, drainage backups, and facility aging at each modeled location.

Furthermore, the NWP model provides all the necessary input — liquid and frozen precipitation, surface wind, surface temperature, and solar radiation — to account for the impact of snowmelt and soil moisture conditions, both important contributors to flood risk.

Among the factors influencing the extent of property damage from flood are building characteristics such as construction material, building height, and basements. The model can also account for site-specific flood defense systems often deployed by large industrial facilities. Based on engineering analyses, findings from published research, damage surveys conducted by AIR, and insurance loss data, AIR engineers have developed flood-specific damage functions, or relationships between flood depth and the amount of damage caused to a given building/property, for 34 different construction classes and 50 occupancy classes in Germany.

Other highlights of the model include:

– A state-of-the-art approach accounts for the impact of topography and terrain on regional precipitation fields at high resolution for improved risk selection and better assessment of portfolio risk.

– Topography, soil type, geology, urbanization, and other local factors are used in calculating precipitation runoff throughout the river network.

– A physically based hydraulic model transforms river discharge to water level, or elevation. This step is critical for assessing inundation depth at each location of interest for each event and ultimately for determining loss.

– A component-based approach — one that divides a building into building fabric, fixture and fittings, and services — helps estimate the vulnerability of commercial buildings and their contents.

– Flood defenses play a critical role in protecting properties within Germany’s floodplains. The AIR flood model accounts for flood defense structures such as levees, dikes, and flood walls using a probabilistic approach that incorporates the most prominently used standards of flood protection. The model also supports custom flood defenses, which is particularly useful for accurately assessing the risk to high-value properties such as industrial facilities.

– The model supports the evaluation of reinsurance contracts incorporating a 504-hours clause as well as other durations.

– Extensive analyses of detailed loss experience data, including that from the 2002 Elbe floods, provide validation.

 “Limited historical experience and company claims data are not sufficient to estimate potential losses from the most extreme events because the exposure continues to change in number, value, and location,” continued Dr. Guin. “The average annual insured loss today from inland floods in Germany is estimated around EUR 300 million, and this figure will only grow as more homes and businesses are constructed in flood-prone locations.”

Source : AIR Worldwide

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To handle the more unique and complex risks, XL Insurance has created a new department within its Professional Lines unit.

Former XLIB Professional Lines Chief Underwriting Officer James Loder will lead the CSI-Complex Situational Insurance department. This unit will focus on the creation of novel solutions for complex and “one off” non-traditional insurance risks as well as transactional and contingent liability exposures.

In his new role as Chief Underwriting Officer/Senior Vice President of CSI, Mr. Loder’s responsibilities will include development of a portfolio of unique risk products which fall outside the mainstream insurance marketplace, development and implementation of new or modified underwriting strategies, and leading a team in the management of high-performance specialists comprised of underwriters, analysts, chartered accountants, attorneys and other professionals.

Mr. Loder’s career in the insurance industry spans over 25 years. He joined XLIB as Vice President of Underwriting, Professional Lines, in September 1999. His role involved underwriting of Employment Practices Liability, Directors and Officers Liability and Professional Liability, with a particular emphasis on Lawyer’s Errors and

Omissions coverage. The role also included providing regional responsibility for underwriting matters in Professional Lines within XL Insurance’s Latin America region, including the Itau-XL joint venture in Brazil.

Prior to joining XLIB, Mr. Loder spent four years with Aon Group (Bermuda) Limited as Vice President of Professional Liability. Before this he was a Professional Lines retail broker for a large independent brokerage based out of Minneapolis, Minnesota. Mr. Loder began his career in the industry as an underwriter for St. Paul Companies

(Travelers) in their Chicago and home offices.

Chief Executive of XL’s Global Professional Insurance operations, Bernard Horovitz, said: “XL Insurance’s Professional Lines business is well known for its creative, entrepreneurial spirit. This is another example of the talent and innovation that we provide to address existing and emerging risks facing our clients.”

Patrick Tannock, XLIB President, said: “Since inception, the Bermuda market has had a reputation for being an incubator for solutions to complex risk. This new department will not only serve as a center of excellence for XLIB but we anticipate that it will also serve to enhance the broader Bermuda market as we work to address the ever evolving needs of our corporate clients. With Jim’s technical underwriting knowledge and vast experience, I have every confidence that this department will be beneficial to XLIB and Bermuda.”

Source : XL Group

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Axa Wealth has announced the appointment of Mike Webb as the new corporate pensions investment team’s head of sales. The team is responsible for the strategy and sale of the company’s institutional investment platform and offers investment services to trustees of corporate pension plans.

In his new role at AXA Wealth, Mike will report to Ian Colquhoun, director of AXA Wealth’s corporate investment services.

Commenting on Mike’s appointment, Ian said: “Mike brings a significant bank of knowledge and 25 years’ experience in the industry to our team, as we look to grow and enhance our client offering. Mike’s appointment will ensure that we are better placed than ever to respond to the changing market dynamic.”

Mike Webb said: “With significant opportunity in the corporate pensions market, AXA Wealth has developed a technology solution which makes portfolio management easier and ultimately more productive, placing it in an excellent position to develop and deliver a market-leading investment solution.”

Source : Axa Wealth

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Aviva has appointed John Lister as new chief risk officer for the UK. John will take up his new role in March 2012, and will be responsible for leading the risk management and governance agenda of the UK business. He will report to new UK CEO Trevor Matthews with an independent functional reporting line to Aviva plc chief risk officer Robin Spencer.

John joined the company as a newly qualified actuary and has worked for Aviva for 25 years. He has been chief financial officer of the UK Life business since 2009. In 2003 he was appointed with-profits actuary for all Norwich Union life companies until he became chief actuary in 2005.

John has undertaken a number of actuarial roles including product design, reinsurance and with-profits. He was responsible for the reattribution of the inherited estate in 2009, and is part of the global finance executive team delivering greater transparency in financial reporting. John is also very much involved in the local community and is a member of York Cares and the York Fairness Commission.

John will succeed Craig Thornton, who became UK commercial director on 1st November.

Robin Spencer, group chief risk officer of Aviva said: “John’s detailed knowledge is an invaluable asset and we are delighted he will continue to play an important role in the future success of our business as UK chief risk officer. John’s passion, leadership and broad commercial skills are perfectly suited to supporting the delivery of our risk agenda.” John’s appointment is subject to FSA approval.

Source : Aviva

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The World Health Organisation plans financial reforms as it seeks to cope with budget shortfalls the global economic crisis.   

Proposals include reducing the size of the UN agency’s Geneva headquarters by sending some staff to work in less expensive areas, the WHO’s director of strategy Daniel Lopez-Acuna told reporters.

The WHO’s executive body said after an extraordinary session this week that the organisation was planning “ambitious reforms designed to build on the organisation’s already strong foundations and better equip it to respond to public health challenges in the 21st century.”

A “big bang” is not to be expcted according to Lopez-Acuna. Reforms at the 63-year-old organisation with a staff of nearly 8,500 around the world will be “a process that takes some time,” he said.

In May, the WHO’s 193 members adopted an austerity budget for 2012-2013 in the face of a deficit of some $300 million (215 million euros) in donor contributions prompted by the global crisis.

Some 300 headquarters staff will be axed, but further reforms are needed.

Resources will increasingly be transferred to in-country programmes, Lopez-Acuna said, and some activities could be shut down entirely depending on funding and priorities.

The executive council’s statement Thursday following a three-day meeting said the body would meet again in January to examine ways to “better  anticipate and be more flexible in its financing”.    In the interim, it authorised the WHO leadership to take “immediate measures”, the statement said, without elaborating.

Geneva, Nov 4, 2011 (AFP)

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Fitch Ratings says the European Central Bank’s 25bps interest rate cut today puts into focus the pressure on life insurers’ margins and earnings from low interest rates. Although insurers are exposed to long-term bond yields rather than the ECB’s short-term interest rates, the ECB’s rate decision means long-term interest rates are expected to remain low. Although not generally a threat to capital or existing ratings in the near-term, prolonged low interest rates will create challenges.

Life insurers are exposed to interest rate risk through investment leverage, product guarantees and policyholder options. Most sensitive would be insurers with a duration of liabilities in excess of assets and a high exposure to bonds that exhibit negative convexity ie, whose prices do not rise as much as most bonds when interest rates go down.

There has been sustained pressure on life insurers’ profitability for several years as their investment portfolios need to produce sufficient returns to meet the guarantees on their products. This problem is compounded for the majority of life insurers that have reduced the risk profile of their investment portfolios since the start of the crisis. Insurers have increased investments in AAA-rated government bonds and reduced investments in shares. This trend has accelerated this year as concerns have risen about the credit quality of Southern European government debt.

Although insurers practice sound risk management on interest rate risk, they may have to take on additional risk to cope with the effect of low returns. This could include investing in higher margin instruments, which may lead to deterioration in credit quality and potentially inadequate pricing relative to risk. Alternatively insurers may extend the duration of their asset portfolio. This could lead to asset and liability mismatches that increase liquidity risk.

Life insurers’ credit profile and exposure to low interest rates varies between countries. In Germany, the running yield on 10-year German government bonds (1.9%) is below the current guaranteed crediting rate for newly sold life insurance policies (2.25%). The yield difference appears even more severe, relative to the average guaranteed crediting rate of a life insurance portfolio of an average company, which is around 3.3%

At first sight this appears a negative margin on the life insurance business, suggesting that companies might not be able to meet the guarantees of their policyholders at current market yields. However, companies can still meet their guarantees at current market interest rate levels. For more information see Fitch’s 2012 rating outlooks for the insurance sector.

In France, there is still a significant gap between guaranteed interest rates on French life products (1% on average) and actual returns credited by French life insurers (3.4% on average for 2010), which gives them flexibility to adjust the bonus rates they pay for 2011. If substantial, this reduction in bonus rates would be beneficial for insurers’ profitability and solvency, both of which are suffering from the low yields on most Northern European government bonds and the deteriorated credit quality of several Southern European government bonds.

Source : Fitch Ratings Press Release

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A new agreement has been signed between Best Doctors and Friends Life. The new agreement means that Friends Life will work in partnership with Best Doctors developing innovative services in the IFA market.

The service, which will be available to all individual protection customers and their immediate family during the lifetime of the policy, will be an option on the new Friends Life Protect+ Defaqto 5-star-rated critical illness and income protection products. It is also available on all term products providing Friends Life with a demonstrable difference in its offering.

Commenting on the partnership, Steve Casey, head of marketing and proposition development at Friends Life, said:

“Having seen at first hand the difference this service makes to the lives of so many people, I am delighted that we are able to sign this agreement and demonstrate our continued commitment to offering quality propositions for our customers.”

Dominic Howard, director, Europe, at Best Doctors, said:

“We are genuinely excited about our partnership with Friends Life. Our service complements what is already a strong product and will be valued not just by Friends Life customers but by their IFA and partnership channels.”

Source : Friends Life

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The Manchester branch of the Chartered Insurance Institute (CII) has awarded Ecclesiastical its training and development award for the second year running.

Ecclesiastical’s groundbreaking Claims Academy initiative took top position at an event at the Lowry Hotel, Manchester in early October for its work with the company’s Manchester-based casualty claims team.

David Bonehill, Ecclesiastical’s Claims and Risk Services Director said: “Last year we made a formal promise to always be on our customers’ side.  To achieve this and to ensure every single member of our claims team lives and breathes the same values, we launched an internal Claims Academy to deliver a clear, consistent claims training and development programme.

 “This award marks the CII’s recognition of the value of that programme and we are thrilled to have received it.”

Ecclesiastical’s Claims Academy was launched in 2010 to provide a more consistent claims training for Ecclesiastical’s entire claims department, using a varied and targeted response to training and coaching needs.

The Claims Academy encourages staff to be responsible for their individual training plans and gives them the ability to request specific training.  The training is then delivered in a variety of ways including at desk counselling, group discussion, research, role play and observation.

The Manchester casualty claims team was established in 2008. Shortly after its establishment, Ecclesiastical’s management realised that there was a need for training all members of the new team to ensure consistent understanding and application of the Ecclesiastical claims philosophy and high service standards.

Last year, Ecclesiastical won the Manchester CII training and development awards for its Sales Academy.

Ecclesiastical’s casualty claims team in Manchester has 20 staff and handles all the insurer’s UK casualty claims. It is also responsible for the smaller Ecclesiastical managed companies Methodist Insurance and Baptist Insurance and Ecclesiastical’s business division Ansvar Insurance. At any one time the team has an approximate 3,200 live claims and handles a total of nearly 2,000 new claims per year.

Ecclesiastical also runs academy-style training programmes for its underwriters and business development teams.

Source : Ecclesiastical

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The Financial Services Authority (FSA) and the Office of Fair Trading (OFT) have joined forces to help prevent the problems associated with payment protection insurance (PPI) recurring in a new generation of products.

The FSA and the OFT are consulting on proposed guidance to firms in relation to payment protection products – which can fall within either regulator’s remit.  This is a key time as the market shifts away from PPI and firms begin to develop new products or product features – such as short-term income protection, or debt freeze or debt waiver as elements of a credit agreement or mortgage.

The two organisations will continue to monitor developments in the market, and will take appropriate action under their respective powers where firms’ products or practices risk causing detriment to consumers.

Payment protection products within the FSA’s jurisdiction

The FSA’s guidance stresses that firms should ensure that product features reflect the needs of the consumers they are targeting.  There are four key areas of concern that providers should think about carefully:

– Firms not properly identifying the target market for the protection product;

– The protection not reflecting the needs of the intended consumers;

– The benefit of a successful claim not matching the needs of the claimant; and

– Product features or pricing structures creating barriers to comparing products, exiting a policy or switching cover.

Margaret Cole, FSA managing director, said:

“This is the first time that the FSA has issued guidance on the design of a specific product. Firms must learn the lessons of the past and make sure they have consumers’ needs at the heart of new product development.

“That is why we are acting early to ensure firms understand the risks they should bear in mind when designing these products, and how they can manage these risks when developing or distributing the product.

“The FSA cited new forms of payment protection products as an emerging risk in its Retail Conduct Risk Outlook earlier this year, and we are following up on that warning with this important piece of work.  We want to put consumers ‘front of mind’ for the providers and distributors of these products.”

Payment protection products within the OFT’s jurisdiction

The OFT’s guidance sets out how the OFT considers the Consumer Credit Act (CCA) applies to payment protection products such as debt freeze or debt waivers linked to a regulated credit agreement, and what firms can do to ensure compliance with the CCA.

In particular, firms should ensure that consumers are absolutely clear about the nature, price and implications of payment protection products. For example, if an agreement is offered with an option to choose debt waiver terms, upon payment of a fee, it may be necessary to provide financial information including and excluding the cost of the debt waiver.

The guidance also sets out examples of business practices in relation to payment protection products which the OFT is likely to regard as unfair or improper (whether unlawful or not) and so may cast doubt on fitness to hold a consumer credit licence.

David Fisher, the OFT’s Director of Consumer Credit, said:

“It is important that the problems encountered with mis-selling of PPI do not arise in relation to new payment protection products. Firms need to ensure that they comply with relevant legislation and do not engage in unfair or improper business practices. In particular, they should make clear to consumers what they are signing up to, and how much it costs, so that they can make properly informed decisions.”

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Fitch Ratings has confirmed Amlin Corporate Insurance’s insurers financial strength rating at ‘A’ with a stable outlook.

The affirmation reflects ACI’s strategic importance within the Amlin group, which Fitch views as core under its rating criteria, based on material size (30% of 2010 gross written premiums -GWP) and increasing operational synergies. This relationship is reinforced by the continued integration process between the two organisations, ACI’s solid financial profile and merging strategic orientation with that of the wider group. ACI’s standalone rating is uplifted by one notch through Amlin group’s stronger financial profile.

These strengths are marginally offset by the further deterioration in ACI’s reported results. Fitch notes that the full benefits of the significant re-underwriting process, which has been undertaken since ACI was acquired, have yet to fully feed through to earnings. The agency maintains the expectation that results will improve in the next 18 to 24 months.

In H111, ACI’s reported combined ratio deteriorated to 119% (H110: 100%), largely due to some large claims on the marine book that rose above the level that would have been expected historically. GWP decreased to GBP301.7m (H110: GBP425.1m), reflecting the non-renewal of predominantly marine class business.

The Positive Outlook indicates that Fitch would consider upgrading ACI if the integration process in the Amlin group were successfully finalised and if the company were able to restore profitability and sustain a combined ratio below 100%.

The most likely reason for a downgrade would be a weakening of the Amlin group’s financial profile due to the significant erosion of capital strength.

ACI is a leading commercial lines writer in the Benelux region, with strong business positions in marine, property and liability insurance. Amlin group provides insurance coverage to commercial enterprises and reinsurance protections through operations at Lloyd’s of London (IFS Rating ‘A+’/Stable), Bermuda, France, Switzerland and Singapore. At end-H111, Amlin group GWP totalled GBP1.51bn (H110: GBP1.49bn) while the combined ratio deteriorated to 121% (H110: 88%), reflecting the unprecedented level of insured catastrophe losses during the period.

Source : Fitch Ratings

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European insurance companies have manageable exposure to Greek government bonds, according to Fitch Ratings. Therefor there should be no downgrade if they accept the EU’s offer of a 50% haircut in return for the new debt.

Some French life insurance companies are a notable exception. They have significant exposure to southern European government bonds, and we expect reduced profits as a consequence of impairments taken on Greece and possibly other countries. Although the French life insurance sector as whole is on Outlook Negative, exposure varies considerably between insurers. The threat to their profitability is not all from assets. Financial market volatility has put pressure on sales of unit-linked policies, which tend to be more profitable and less capital intensive.

Fitch first tested the impact of a Greek default on insurance companies in August 2010. All insurers in its rated portfolio could withstand a loss of 70% on Greek government bonds and the impact from adverse changes to mark-to-market movements in other sovereign bonds. Most insurers are in a stronger position now than they were then and many have reduced their exposure to Greek government bonds.

UK, German and Italian insurers typically have minimal direct exposure to Greek sovereign debt. UK and German insurers have also improved their risk profile. They have limited exposure to debt in Ireland, Portugal, Spain and Italy and have reduced their exposure to equities. The UK life sector reported strong results for 2010 and H111, with larger regulatory capital surpluses and prudent credit default provisions.

The net loss that life insurance companies will take as a result of a Greek government default could be considerably lower than the gross amount of debt the company holds. Life insurers could pass a large proportion of the losses to policyholders. The exact amount depends on the jurisdiction, type of products and the company’s investment return in excess of the minimum guarantees if offers its clients. This further insulates insurers’ credit profiles from a sovereign default.

Source : Fitch Ratings

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Research released by uSwitch.com shows that parents’ finances will be pushed to breaking limits. Students who have started their degrees will be the last to benefit from lower tuition fees before they rise to £9,000 next year.

The average student graduates with a debt in excess of £21,000. And this is putting parents under financial pressure too. 41% of parents feel pressured to pay for their children’s University fees which has led to over half of all parents (51%) paying the entire fee or contributing significantly[9]. Four in ten (40%) of those parents who cover the cost do so to stop their child getting into debt, while over half (55%) pay because it’s the only way their child could afford to go.

But nearly six in ten parents (56%) who support their child will experience a significant strain on their finances. A quarter (27%) save money over the years in order to cover the cost, but a third (34%) will be forced to raid their own savings.

Three times as many parents with children yet to go to University will need to borrow – 5% of those whose children have already been to University took out a loan, but this will rise to 15% of those with children planning to go to University. They are also more likely to cut back on essential spending – one in ten (10%) whose children have previously been to University had to cut back, but this will rise to three in ten (33%) of those with children planning to attend in the future. More worryingly, if the current squeeze on household finances continues and fees rise further, future generations could end up missing out as parents struggle to make ends meet.

Annual fees will rise to up to £9,000 from next year, and it’s not just parents who think this is too expensive. In fact just a quarter of people (26%) think universities should charge at all and over a third (36%) think University should be free for everyone. Of those who accept universities should charge, just 14% think £9,000 is acceptable. Over half (54%) think the maximum charged should be between £1,000 and £4,000.

To make matters worse, only 5% of people think University is of enough value to justify the fees and nearly four in ten (37%) think it isn’t the best route for a career. And as the number of applicants for University continues to rise, nearly two thirds of people (63%) worry that degrees are becoming devalued. But young people today face a catch-22 as, despite the high fees and student debt, three in ten people (30%) think children have no choice – they have to get a degree just to secure a basic job.

Parents point to employers as being both part of the problem and part of the solution. Over two thirds of people (68%) think that employers have a role to play by offering more entry level roles that don’t require a degree. However, despite this sentiment, one in ten (11%) wouldn’t offer a young person a job without a degree.

Michael Ossei, personal finance expert at uSwitch.com, says: “The fact that future generations could miss out on University because of costs is very worrying. Young people looking at getting a degree today are facing a double whammy of rising tuition fees and a stagnant job market. To make matters worse, their parents, who may have been able to help out, are facing an uphill battle to keep their household afloat in the face of the rising cost of living, job losses and pay freezes. It is often the squeeze on their finances that will mean their children miss out on a University education.

“The good news is that loans for living costs are available to all students and this will only need to be paid back when graduates start earning over £21,000 a year. There are also grants available for anyone whose family household income is less than £42,600. For parents who want to plan ahead, it’s important to get the best possible rate on a savings account – especially in the current difficult climate.”

Source : uSwitch.om

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Research from Allianz with brokers and customers has lead to the introduction of new motor fleet products.

There is now a distinction between ‘Small fleet’ cover for clients with between 5 and 15 vehicles, and ‘Motor Fleet’ cover for mid to large businesses.

The revisions include the following :

– New facility to provide like-for-like replacement vehicles

– Uninsured loss recovery and defence costs up to £100k per claim

– UK-based claims handlers – 24/7 claims helpline

– New web-based claims reporting

– Improved access and up to 66% discount on AA breakdown services.

Customers will continue to receive access to a range of free in-house services, such as the award-winning online risk management tool, RiskDirector, as well third-party providers including the AA, RoSPA and Tracker, at preferential prices.

Jon Dye, commercial motor manager at Allianz Commercial, said:

“We have listened to our customers’ needs and introduced services that they have specifically requested. We believe this will help us stay at the forefront of an ever-changing and challenging fleet market.

“We are confident that the improvements will also strengthen our customer loyalty by giving greater value for money through a combination of market-leading cover, excellent service and a range of additional benefits that add value to our clients’ business.”

He adds: “As one of the leading fleet insurers in the UK, we already have a very strong offering but we understand that is essential for us to evolve our proposition to enable profitable growth in what remains a challenging market.”

Source : Allianz

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Standard Life released new research suggesting that the UK could be heading towards a perfect retirement storm; one in five (21%) of 45-65 year olds who have financial plans in place to provide for their long term future no longer feeling their financial plans will support them into the future.  6% in this age group who aren’t already retired don’t think they will ever be able to retire, equating to over three quarters of a million people.

Of those who have financial plans in place to provide for their long term future, 64% of 45-65s feel confident that their financial plans will support their future post retirement.  21% of these adults no longer feel their plans will support them into the future, with a further 10% having never felt confident.  37% of 45-65s have no financial plans in place for their long-term future.  And yet 72% of people currently aged between 45 and 65 who aren’t retired think they will retire between 61 and 70 years old.

John Lawson, Head of Pensions Policy at Standard Life said: “The current financial crisis has brought into sharp focus the need to make and review appropriate plans.  This will clearly be challenging but there are many things you can do to make your retirement years as secure as possible.”

Source : Standard Life

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The US Supreme Court will decide on November 10 whether or not to take up the case of President Barack Obama’s historic health care law.

The decision by the nine justices, to be made in closed session, could be made public that day or on the following Monday, November 14, the sources said. The top US court has received six requests to rule on the legislation passed in 2010, which was fiercely contested by Republicans.

Five of those requests will be considered on November 10. The Obama administration last month asked the court to uphold the law, after a federal appeals court in Georgia ruled in August that the individual mandate exceeded Congress’s powers. But that court also ruled that the remainder of the health care law, which extended coverage to an extra 32 million people and was a long-held dream of Democrats, was within the bounds of the constitution.

The Justice Department asked the court to declare the key provision of the new law, requiring everyone to buy health insurance by 2014 if they can afford it, constitutional.

“We know the Affordable Care Act is constitutional. We are confident the Supreme Court will agree. We hope the Supreme Court takes up the case and we are confident we will win,” top Obama advisor Stephanie Cutter said last month.

Republican opponents of the law say the government has no power to compel people to buy health insurance and have vowed to repeal the law in the courts and eventually replace it through new legislation.

A group of 26 states and small businesses have called on the Supreme Court to strike down the totality of Obama’s reform, as has the state of Virginia as a separate entity.

The justices will not consider the Virginia filing right away. A number of other courts have struck down challenges to the law, making it inevitable that the Supreme Court would eventually be called upon to judge the law, possibly in 2012 amid the political heat of Obama’s reelection campaign.

Many legal experts believe the Supreme Court will agree to take up the case since lower courts are in conflict on the constitutionality of the law.

If the court does decide to weigh the case, arguments would follow and the justices would be expected to rule by the end of their term in June 2012, in a judgment likely to reverberate before the November general election.  Washington, Oct 26, 2011 (AFP)

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Europe’s leaders hailed a successful end to 10-days of pressure on the bank lobby with what they termed a breakthrough deal that prevents lenders triggering Greek credit default insurance. 

Leaders, who had originally hoped to clinch the grand bargain at a summit on October 17, finally closed the deal at around 3:00 am (0100 GMT). After one cancelled summit, a frantic weekend of preparations involving finance and foreign ministers, and four emergency EU and eurozone summits, carefully orchestrated arm-twisting saw the Institute of International Finance (IIF), representing the banks, finally sign up to one magic word.

“Voluntary,” said eurozone chief Jean-Claude Juncker — who started and finished the 10-day campaign in tough negotiations with IIF negotiator Charles Dallara.

“The bankers understood,” Juncker said, after several meetings last week alongside EU President Herman Van Rompuy, and a final dramatic sit-down with German Chancellor Angela Merkel, French President Nicolas Sarkozy and IMF managing director Christine Lagarde.

The crucial face-to-face, which Sarkozy warned would take place during a now-infamous off-the-record briefing on Sunday, lasted just 45 minutes.

The bankers realised the EU had “resolved not to envisage a default for Greece, had the bankers not been ready to do the deal they now have,” Juncker said on his way out.

Eurozone states will mobilise 30 billion euros in guarantees for those parts of the Greek debt not written off in Brussels, as well as “a new 100-billion-euro” bailout.

Banks accepted a 50-per cent writedown on their Greek bonds to reduce the country’s debt mountain by 100 billion euros after hours of tough negotiations at a summit that ran from Wednesday evening to early Thursday morning.

Also agreed in a four-point package of measures was an agreement for banks to beef up their capital buffers to absorb losses on Greek bonds, as well as pledges to tighten economic governance and fiscal discipline.

In July, the eurozone offered Greece a second bailout and also agreed that banks would take a 21-per cent loss on their bond holdings. But the economic situation deteriorated rapidly.

Dallara had said in a statement mid-negotiation that there was “no agreement on any element of a deal.”

Leaders also agreed a 106-billion-euro bank recapitalisation, “that wasn’t watered down, it now has been agreed,” British Prime Minister David Cameron said.

In a summit statement, EU leaders said measures to restore confidence in Europe’s banks “are urgently needed and are necessary in the context of strengthening prudential control of the EU banking sector.”

They declared a “broad agreement” for banks to increase their core Tier 1 capital ratio to 9.0 per cent of assets by June 30, 2012. This is two percentage points higher and seven years earlier than under new international banking rules recently agreed in the Basel III regulators accord.

Banks must first try to raise funds through “private sources of capital, including through restructuring and conversion of debt to equity instruments.”

Until the target is reached, the statement said, “banks should be subject to constraints regarding the distribution of dividends and bonus payments.”

Governments should provide aid if necessary, the document says. But if such aid is impossible among eurozone nations, the bloc’s bailout fund, the European Financial Stability Facility (EFSF), could provide the money.

Brussels, Oct 27, 2011 (AFP)

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Thailand is facing the worst floods in decades. Thais have been facing crocodiles, poisonous snakes and electrocution. Three months into a crisis that has ravaged the kingdom and is now encroaching on the capital Bangkok, conditions are ripe for a humanitarian disaster and aid agencies are racing to heighten awareness. 

“You don’t want to create mass panic,” said Matthew Cochrane of the International Federation of Red Cross and Red Crescent Societies. “You need to find a balance between being alert and alarmed.”

Inundated communities have been warned to watch out for poisonous snakes swimming in the murky floodwaters, as well as electrocution from submerged power points and dangling electricity cables. Images of crocodiles being captured on Bangkok’s outskirts, after escaping from flooded farms where they are bred commercially, have further rattled nerves.

Unusually heavy monsoon rains have swamped much of Thailand, killing more than 370 people and forcing vast numbers to seek refuge in shelters. The waters are now closing in on Bangkok’s city centre where they could remain for weeks.

Experts say the priority is to maintain hygiene levels and aid agencies are trying to provide clean water and bathroom facilities — including floating and collapsible latrines — to tens of thousands of affected families.

“We’re talking about basic sanitation: drinking water that’s clean, washing your hands and making sure that areas where you wash and where you defecate are separated,” Cochrane said.

“The general concern in any floods is water-borne diseases and mosquito-borne diseases,” he added, warning there was often “an increased risk of malaria and dengue fever” in waterlogged areas.

Given the right precautions, a serious outbreak of flood-related disease is not inevitable, he said. In a country where many cannot swim, the number one cause of death during the disaster has not been disease, but drowning, said Maureen Birmingham, the World Health Organisation’s representative in Thailand.

“That’s very concerning,” she said. “One of the risk behaviours reported is fishing, so we urge people to take care with that.”

Cochrane said Thais were generally well-educated on hygiene, which bodes well for epidemic prevention, but a recurring complaint among those affected is a lack of toilet facilities, especially in deeply submerged regions.

“The water came up to the toilet in my house,” said Kusuma Glomjai, 34, who lives in a badly hit area of Pathum Thani province, just north of the capital.

“I can’t use my toilet so I have to go to a relative’s house across the road.”

Others in her situation have resorted to defecating in plastic bags, while many other flood victims have voiced concern over the filthy water they are forced to wade through.

“I have no choice. But when I get home, I wash myself,” said Surapol Pinpol, 57, as he stood in chest-deep brown water in Pathum Thani.

Birmingham said communicable diseases such as conjunctivitis could spread easily among evacuees, as well as fungal infections of the skin and leptospirosis, a bacterial infection spread through contaminated water.

Cases of skin infections, especially athlete’s foot, already number in the thousands, according to Thai health ministry which has deployed mobile medical teams to flood-stricken areas that have treated over half a million people.

Birmingham said hygiene kits, water and sanitation facilities were a top priority but admitted it was “very challenging” to deliver them to all of those of need.

With millions of homes and livelihoods damaged across the country, the impact on mental health is increasingly as worrying as physical damage. The government said it has set up special mental health units across various provinces and dispatched teams of psychiatrists and psychologists to help almost 100,000 people thought to be suffering from flood-related stress.

Bangkok, Oct 26, 2011 (AFP)

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