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US health insurance giant Cigna Corp. has announced plans to buy UK-based travel insurance provider, FirstAssist Insurance Services.

The firm is currently owned by Barclays Private Equity and is being targeted by Cigna in a move to expand its business offerings outside the US.

FirstAssist employs some 480 people and has three million customers in the UK. Cigna claims that a takeover of the UK firm will help it to move into the UK market, as well as helping it to expand elsewhere. As well as travel insurance, FirstAssist also offers health and employment cover, as well as legal insurance.

Cigna offers insurance to people living as expats outside their native countries, alongside its regular US health insurance and products offered through several international divisions.

Cigna’s International divisions president, William Atwell, said, “This acquisition closely aligns with our growth strategy and mission to help the customers we serve improve their health, well-being and sense of security.

“We have made great strides in the travel insurance sector and will benefit further from Cigna’s long-term commitment to growth,’ he added. The £71 million deal is expected to be completed by the end of the year.

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The Obama administration announced it would not ask a US appeals court to reconsider its finding that part of the landmark health reform bill is unconstitutional. 

Legal observers said the decision makes it likely that the legal challenge to the health care reform law — the signature domestic achievement of Barack Obama’s presidency — will be heard by the US Supreme Court, which begins a new session next week.

A spokeswoman with the US Justice Department, Tracy Schmaler, told AFP the the administration “didn’t seek en banc review” of last month’s decision by a Georgia appeals court, which ruled that part of the law is unconstitutional. Schmaler added that the Justice Department is “not commenting further at this point.”

The August 12 ruling by a three-member panel of the Atlanta-based 11th Circuit Court found the Congress exceeded its mandate in passing the provision of the law requiring individuals to purchase health insurance.  The administration could have opted to ask the full court to reconsider the ruling — a process that could have dragged on for months.

It decided instead to skip the full review in the Georgia court, increasing the likelihood that the US Supreme Court will be asked to hear the case during its upcoming term. In that case, the decision would fall just weeks before the November 2012 presidential election, and would provide him either a major re-election boost, or an embarrassing defeat that would diminish his chances of winning a second term.

The health reform bill, which extends coverage to an extra 32 million people and will require all Americans to buy medical insurance by 2014, reflects a long-held dream of Democrats.

The White House argues that those who choose not to buy insurance in the US private medical system hurt everyone else, because taxpayers end up subsidizing their care when they are taken to emergency rooms.

It also justifies the individual mandate by saying that without it, people would wait until they get sick to apply for coverage, which would cause insurance premiums for everyone to rise. But Republicans strongly oppose the law, which they have dubbed “Obamacare,” as an infringement on individual liberty, and have sworn to repeal it.

Washington, Sept 27, 2011 (AFP)

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According to Fitch Ratings, the UK life insurance sector remains stable, indicating that a vast majority of life insurer ratings may be affirmed over the next 12 to 24 months.

Fitch’s outlook assumes a continued, but weak, economic recovery, with modest GDP growth. The outlook does not take into account potential exogenous shocks to the economy but will be updated to reflect such events if they occur.

Fitch’s ratings recognise that insurers have strengthened their balance sheets and reduced their exposure to equity markets. Direct shareholder exposure to the sovereign debt of Greece, Ireland, Portugal, Spain and Italy is generally minimal. However, the agency expects earnings in the medium term to be below pre-crisis levels as a consequence of lower interest rates and insurers’ more cautious investment portfolios, despite the cost cutting that many insurers are undertaking to bolster profitability.

“Although sales volumes do not generally drive ratings in the short term, they are a barometer of consumer confidence in the life insurance industry,” says David Prowse, Senior Director in Fitch’s Insurance team in London. “Sales are likely to be held back as lower wage growth and higher price inflation squeeze disposable income, consumers continue to deleverage at the expense of saving, and demand for mortgage-related protection products continues to suffer from the slow housing market. However, the bulk annuity market looks set to grow, giving insurers an avenue to bolster otherwise flagging sales.”

Fitch expects business generated by pensions auto-enrolment to be low-margin, with limited prospects for insurers because they will be in competition with the government’s low-cost NEST scheme and contributions amounts are likely to be small – until September 2016, the minimum required contribution will be only 2% of qualifying earnings.

UK life insurers are preparing for an unprecedented wave of reforms that will transform how they are regulated and how their products are distributed. Solvency II, the new risk-based regulatory regime for European insurers, and the Retail Distribution Review (RDR), which will bring about a step-change in how investment advice is paid for, are due to take effect on 1 January 2013. Fitch expects these reforms to cause some short-term disruption to the UK life market but expects major insurers to adapt successfully to the new landscape, with no significant implications for credit ratings in the near term.

Fitch expects Solvency II capital requirements to be manageable for most major UK life insurers. However, the ultimate impact will depend on several major decisions still to be made, including the capital treatment of expected profits in future premiums and the length of transitional measures to ensure a smooth transition to Solvency II – notably for hybrid capital, discount rates for provisions (particularly important for annuity business), and equivalence with third countries.

“The RDR is likely to lead to reduced distribution costs for insurers and, through the scrapping of commission, to better standards of financial advice, with less mis-selling and lower policyholder surrender rates,” says Prowse. “However, many customers may be deterred by explicit fees and shift towards cheaper, restricted advice or no advice at all, with the IFA channel contracting as a result.”

Fitch considers the main risks to UK life insurers’ ratings in the next 12-24 months to be lower-than-expected GDP growth, the threat of prolonged low interest rates, and potential disruptions from Solvency II, the RDR and other regulatory reforms. In the longer term, the large, diverse insurers, which are typically best-placed for the transition to Solvency II and the RDR, stand to benefit relative to the market and their credit profiles may improve as a result.

Source : Fitch Ratings

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Fitch Ratings has further downgraded the insurer financial strength of Groupama and four of its core subsidiaries to ‘BBB‘ from ‘A-‘.

The subsidiaries are Groupama GAN Vie, GAN Assurances, GAN Eurocourtage and Groupama Transport. Fitch has also downgraded Groupama S.A.’s Long-term Issuer Default Rating (IDR) to ‘BBB-‘ from ‘BBB+’. Groupama S.A.’s subordinated debt ratings are downgraded to ‘BB’ from ‘BBB-‘ and placed on Rating Watch Negative. All rating Outlooks are Negative. A full list of rating actions is at the end of this comment.

The downgrade reflects the deterioration of Fitch’s view of Groupama’s capital adequacy following volatility in the financial markets, as a result of the group’s continued exposure to volatile asset classes, including equities.

The downgrade and placement of subordinated debt ratings on Rating Watch Negative reflects Fitch’s view of the increased risk of coupon deferral given the declining level of Groupama’s regulatory solvency. Should the group’s regulatory solvency margin improve following the remedial action being taken by management to strengthen capitalisation, the Rating Watch Negative would likely be withdrawn. However, if the group’s regulatory solvency margin continues to decline, or core group ratings are further downgraded, Fitch would expect to downgrade the subordinated debt ratings.

The key rating drivers that could result in a further downgrade include deterioration of the group’s financial profile, especially in terms of solvency, as well as its inability to translate measures aimed at improving underwriting results into a sustainable strong performance in non-life (combined ratio near 100%) and life (new business margin near 1%).

The ratings are supported by Groupama’s risk profile, which benefits from a large degree of business and risk diversification. The ratings also take into account its solid business position and improving underwriting profitability.

Fitch will carefully monitor Groupama’s ability to rebuild its capital adequacy via retained earnings to compensate for increased unrealised capital losses. The agency considers Groupama’s largest challenge will be to smoothly manage the reduction of its exposure to equities and southern European government bonds, especially Greece.

Source : Fitch Ratings

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Typhoon Nesat made landfall on September 26, over northeast Luzon Island, Philippines. According to the Joint Typhoon Warning Center, the system maintained typhoon strength at landfall, with maximum sustained winds equivalent to that of a Category 2 hurricane on the Saffir-Simpson Hurricane Wind Scale.

Reports from the Philippine capital Manila indicate that precautionary measures were taken as the storm approached; including large scale power shut downs, which shut the financial markets. Manila Electric Company has reported that large power outages resulted from high winds and emerging reports also indicate that flooding has occurred. Little information is available at this time from outside the capital.

Under the forecast, as of 00:00 UTC Tuesday, September 27, Nesat is forecast to track across northern Luzon, around 100 miles north of the Philippine capital Manila, weakening as it tracks west due to interaction with land. Nesat is forecast to re-merge over the South China Sea in approximately 12 hours, and is then forecast to track west-northwest. The extended forecast, while containing a large degree of uncertainty, has the system approaching southern China – with the center of the system currently forecast to track over Hainan Island, China, as a typhoon.

Source : RMS

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Rating agency Standard & Poor’s has affirmed its BB+ long-term counterparty credit and financial strength rating for Congregational & General Insurance PLC (C&GI).

The move comes as the insurance firm has sold a majority share of its subsidiary MGA, Integra Insurance Solutions Ltd. to the Hannover Re Group. In response, the ratings agency revised the firm’s outlook to positive in reflection of the expectation that C&GI will shortly clarify its long-term strategy and maintain a strong capital adequacy.

Earlier the group had held a rating of ‘stable’ after a review in February of this year had unveiled concerns regarding the company’s unproven strategy to accelerate its growth through its managing general agency. A reliance on third-party capital was also taken into consideration and the execution risk of the insurance firm’s plans were considered to be high.

Now, S&P remarked, the concerns have “turned out to be unfounded” as the advanced sale of the majority stake in Integra demonstrated the management’s ability to “execute its strategy successfully”.

The ratings agency added that it expects the risk profile and capitalisation to further improve over the course of the next year when the company will cease to underwrite household business.

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Standard & Poor’s has revised its outlook on Italian marine insurer SIAT (Società Italiana Assicurazioni e Riassicurazioni) to negative from stable. The financial strength and counterparty credit ratings have been affirmed at ‘BBB-‘.

The rating action follows the same rating action we took earlier today on SIAT’s parent, Italian composite insurer Fondiaria-SAI SpA (see “Outlooks On Italy-Based Insurer Fondiaria-SAI And Core Subsidiary Milano Assicurazioni Revised To Negative From Stable,” published Sept. 23, 2011). Under our criteria, the ratings on SIAT, as a subsidiary of Fondiaria-SAI, are capped by those on its parent. Our assessment of SIAT’s stand-alone credit profile (SACP) remains unchanged at ‘bbb’.

The negative outlook reflects that on Fondiaria-SAI. According to our group methodology criteria, the ratings on SIAT are capped by those on its parent and will likely move in tandem.

Source : S&P

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According to a new report from Fitch Ratings, the UK Financial Services Authority’s Retail Distribution Review (RDR) will cause some short-term market disruption as advisers and consumers adapt to the new rules, but expects no impact on ratings in the near term. However, insurers that are highly reliant on independent financial adviser (IFA) distribution may lose market share to competitors selling through channels with restricted or no advice, which could have rating implications in the longer term.

In general, Fitch believes that insurance companies and financial advice firms are well prepared for the RDR as the implementation date of 1 January 2013 looms nearer.

“Insurance groups have undertaken thorough reviews of their distribution models in light of the reforms and many financial advisers have already made the transition to fee-based charging for advice in anticipation of the scrapping of sales-based commission,” says Ella Spencer, Analyst in Fitch’s Insurance team.

The market for non-intermediated sales of relatively simple products is likely to develop and the agency believes that bancassurers will have the opportunity to gain market share.

Fitch expects platforms to grow as a sales channel, reflecting their user-friendly nature. Well-designed platforms allow IFAs to better service their clients and may also encourage more sophisticated consumers from the mass market to manage their own portfolios without financial advice.

Source : Fitch Ratings

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The IFB has been deploying its upgraded analytical software, NetReveal from Detica, which has included partnering with Detica to build a unique web-portal service.  A period of successful testing by the IFB and its insurer partners has been completed and the IFB is now to commence the roll-out programme of its first web-portal service.  

The portal will provide counter-fraud teams in insurers and compensators who are partnered with the IFB, 24/7 access to conduct searches of c128 million industry records held by the IFB, for fraud prevention purposes.  Searches of the portal will provide end users with automated on-demand fraud risk scoring and the ability to secure supporting intelligence reports from the IFB. The secure, user friendly portal requires no integration and minimal end user training.

The portal deployment will be in two phases, with additional functionality added in the second phase and a future road map that includes major new data sets. Whilst the existing focus is on providing current IFB partners with portal access, 2012 is planned to see the deployment extend to firms supplying counter-fraud services to IFB partners.

Commenting on the portal deployment, Glen Marr, Director of the IFB said:

“Data and technology are absolutely critical to preventing insurance fraud. Our first portal successfully combines both, and is representative of a significant level of work this year by the IFB and Detica. It is one of many enhancements to the IFB model and an exciting one for the team.

“We remain absolutely committed to our role as the industry platform to prevent insurance fraud. Over the past 12 months our development has accelerated and there is more to come from the IFB”.

Imam Hoque, Managing Director, Detica NetReveal said:

“Helping the IFB enhance its capabilities to also become a real-time counter-fraud platform for UK insurers represents a major step and ideally positions them to play a significant role in the fight to protect UK plc across industry sectors”.

Source : IFB

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Top investors in U.K. engineering firm Charter International are threatening to block a proposed takeover unless its U.S. suitor, manufacturing firm Colfax Corp, pays more than GBP10 a share, the Sunday Times reported.

Aviva and Schroders, which are Charter’s two biggest investors with a combined stake of 17.5%, have indicated they will vote against the Colfax offer, the report said.

Colfax offered 910 pence a share for Charter, valuing the business at GBP1.5 billion but Aviva and Schroders prefer a rival 850 pence cash-and-shares proposal from Melrose, a U.K. turnaround specialist, it said.

Chris Murphy, U.K. equities fund manager at Aviva, was cited as saying: “The Colfax bid materially undervalues Charter against what we believe Melrose will deliver for us and our clients in the medium to long term.”

The report said Aviva and Schroders believe Melrose’s strong track record of reviving and selling on under performing businesses means it will deliver better long-term returns.

Two weeks ago, the Daily Telegraph cited Schroders fund manager Richard Buxton as saying: “As far as we understand, the general consensus among most Charter shareholders is that they would have preferred to have seen the company recommend the Melrose offer because it would allow investors to participate in any future upside.”

London, September 25, 2011 (Dow Jones)

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News that a satellite the size of a double-decker bus is about to crash to earth shouldn’t be of great concern – by the time it has broken up in the atmosphere only fragments are likely to reach the surface. 

 But the fragments could land anywhere and in the unlikely event of a piece striking a house in the UK, home insurance would cover the damage, according to AA Insurance.

“Part of a falling satellite could potentially cause a lot of damage, given that it may be travelling at up to 4.6 miles (7.5km) per second* and will be white-hot,” says Simon Douglas, director of AA Insurance.

“Although so far as I am aware no-one in the UK has ever claimed for damage from falling space junk, impact from parts of aircraft or chunks of ice that have formed on an aircraft does occasionally happen.  The cost of damage would be met from the ‘impact damage’ section of a typical home buildings insurance policy and if your car was hit, that would be covered by your comprehensive policy too.”

However, under the Space Liability Convention of 1976, the state that launches a space vehicle is responsible for any damage it causes but damage from space debris is so rare that the treaty has never been invoked.  “In theory, this means that if a bit of the falling satellite crashed on the UK, the cost of damage could be claimed from NASA,” Mr Douglas explains.

Scientists expect the satellite to break up into about 26 pieces as it descends to Earth.  Weighing about six tonnes, the Upper Earth Research Satellite was launched in 1991 to measure the chemical composition of the upper atmosphere.  It completed its work in 2005 and has been gradually descending ever since.

Source : The AA

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Catastrophe modeling firm AIR Worldwide estimates insured losses from Typhoon Roke at between JPY 12 billion (USD 150 million) and JPY 46 billion (USD 600 million). Typhoon Roke, the 15th named storm of the 2011 Northwest Pacific typhoon season, made landfall near Japan’s Hamamatsu City in Shizuoka Prefecture at 2:00 pm local time (05:00 UTC) on September 21. Maximum sustained winds at landfall were 180 km/h, making Roke a strong Category 2 storm. Note that this is the same range announced for Typhoon Talas on September 7th. Despite the similarity in estimated losses, however, Roke—primarily a wind event—was very unlike Talas—which was primarily a flood event—from a meteorological perspective.

“After crossing more than 350 kilometers of the main Japanese island of Honshu—during which time it was undergoing extratropical transition and its winds were weakening to about 150 km/h—Roke moved out to sea in the North Pacific Ocean, where it has since further weakened,” said Dr. Peter Sousounis, principal scientist at AIR Worldwide.

Though Roke was primarily a wind event, the most readily available damage reports are from typhoon-induced flooding. As of the Japan Fire and Disaster Management Agency’s (FDMA) latest report today, roughly 550 homes have experienced inundation above the first floor level and more than 1,160 homes have experienced inundation below the first-floor. It should be noted that although Roke has exited Japan, the threat from typhoon-induced flooding and landslides persists; evacuation orders remain in place for 60,000 people living in the east coast prefectures of Aichi and Mie. In Odawara and Kanagawa prefectures, also on the country’s east coast, the threat of flooding and landslides has prompted the evacuation of 240,000 residents. In total, evacuation orders from Roke have impacted 1.21 million people.

Dr. Sousounis commented, “In terms of wind damage, Shizuoka prefecture was most heavily affected, although damage here and in other prefectures was mitigated by Roke’s short duration; the storm moved across central Japan in just 12 hours. Furthermore, Roke weakened quickly after landfall and its strongest winds remained over water as it moved across Japan and began extratropical transition, mitigating wind damage to onshore properties. All these factors contributed to Roke’s relatively low expected losses, despite the fact that the storm made landfall as a strong Category 2 typhoon, just 250 km southwest of Tokyo.”

According to AIR, Japan has strict and well-enforced construction codes; so far, minimal structural damage from wind has been reported. In Tokyo, there have been no reports of significant damage to buildings.

North of Tokyo, Roke’s passage over the Fukushima Dai-Ichi reactor buildings—which were significantly impacted by the Tohoku earthquake—has not caused further damage; the plant escaped the storm’s strongest winds. Roke did drop 204.5 millimeters of rain on Namie, a town nearby, however.

Dr. Sousounis stated, “Over the last several days, total precipitation amounts from Roke have exceeded 400mm at about a dozen monitoring stations; isolated mountainous regions have received 400-600 mm of rainfall. The rain from Roke has caused 28 landslides, according to the latest report from the FDMA, not to mention the flooding of streets and homes. Earlier this month, on September 2nd, another typhoon brought significant rainfall to Japan; though weaker at landfall, this storm—Tropical Storm Talas—was unusually large, with tropical storm force winds extending outwards up to 600 kilometers. It delivered up to 1,600 millimeters of rainfall in isolated parts of Nara Prefecture over a 24 hour period. By contrast, Roke’s smaller rainfall amount fell over the span of several days, mitigating its impact.”

As outlined above, although Roke had stronger winds than Talas, and thus might have been expected to cause significant wind damage, damage was mitigated by its short duration over Japan, its rapid inland weakening, and the position of its strongest winds, which were over open water. Thus, although some wind damage undoubtedly occurred, it was not as significant as might have been expected for a storm of Roke’s landfall intensity. Precipitation from Roke, meanwhile, was much less than that from Talas.

“As of the Japan Meteorological Agency’s (JMA) 6:40 UTC advisory today (1:40 am local time), Roke is an extratropical low, which means the storm has essentially left tropical latitudes and is now getting its energy from the atmosphere rather than from the ocean,” continued Dr. Sousounis. “Roke, located northeast of Hokkaido in the Sea of Okhotsk, is no longer a threat to Japanese soil.”

Source : AIR Worldwide

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Liberty Syndicate Management Limited (Liberty Syndicates), a member of Liberty Mutual Group, has enhanced its presence in Brazil with the appointment of Douglas Sakamoto.

Mr Sakamoto was previously a marine underwriter for a global reinsurance company in Brazil for four years, at a time when Marine clients were first starting to participate in an open reinsurance marketplace. He has more than 14 years of underwriting experience.

His arrival strengthens the position of the Liberty Syndicates’ Brazil office across all lines including Marine (Hull, Cargo and Liability), War (Marine and Aviation), Terrorism, Space and Specie facultative reinsurance sectors.

The Brazil office of Liberty Syndicates was opened in 2009 with the creation of a multi-line capability headed by Florian Kummer.

Mr Sakamoto is an expert within all classes of marine and will complement the established Marine Division within Liberty Syndicates headed by Matthew Moore. He will report to Florian Kummer.

Commenting on the appointment, Nick Metcalf, Chief Executive of Liberty Syndicates, said: “Douglas’ experience will be a very valuable addition to our team. His technical expertise is very good and clearly on the upper end in the Brazilian market place. He has been very visible in the market over the last four years when companies structured their Marine programmes for the first time and prepared for life in an open reinsurance marketplace.”

Source : Liberty syndicates

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Dutch trucks carrying flowers were allowed to enter Romania on Thursday after being held up for nearly a week by authorities saying they feared dangerous bacteria, official sources said. 

“A total of 32 trucks were blocked since Friday evening. Twenty-five have been authorised to enter Romania after being sealed, so tax authorities can make further checks once they reach their destination”, the chief of the Romanian tax administration (ANAF), Sorin Blejnar, told AFP.

He added that five trucks had turned back while authorities seized two others because of fiscal problems.

Blejnar said that a type of larva was discovered in the truck that first triggered the alert, while viral, mycological and bacteriological tests were still being performed.

Agriculture Minister Valeriu Tabara told AFP that the insects discovered did not require putting the freight in quarantine.  “I am pleased that nothing dangerous has been found but we had to be prudent”, Tabara said.  Dutch flowers and bulbs represent 90 percent of the Romanian market and local florists have been complaining of the lack of merchandise in recent days.

“The situation is gradually coming to normal, the first trucks have already arrived in Bucharest”, the president of the florists’ association, Florin Georgescu, told AFP.

He added that florists estimate losses at 300,000 euros and plan to demand compensation from the agriculture ministry.  Local media linked the measures to the Dutch government’s opposition to the bid by Romania and Bulgaria to enter Europe’s visa-free Schengen zone.

“The ‘war of flowers’ did not take us into Schengen, it simply deprived us of tulips”, Romania libera daily read.  Romanian authorities rejected the accusations.

Bucharest, Sept 22, 2011 (AFP)

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The Lloyd’s of London insurance market announced that it has slashed its exposure to European government debt and pulled cash out of some of the region’s banks amid the deepening Eurozone crisis. 

“Given the uncertainty around the Eurozone, it’s only natural that we would seek to reduce any potential downside risk,” Lloyd’s Finance Director Luke Savage told Dow Jones Newswires on Wednesday.

“As a result, we’re not holding government debt of any peripheral EU country and have sought to reduce our exposure to banks in these countries.”

The Eurozone sovereign debt crisis accelerated this week amid intense speculation that troubled Greece was on the brink of default.

The International Monetary Fund and the European Commission warned Tuesday about the health of European lenders exposed to Greece’s debt mountain and indicated that their capital levels should be hiked.

Sentiment took another heavy blow after Italy was slapped with a sovereign debt rating downgrade from Standard & Poor’s.  Many analysts say that Italy and Spain could be the next dominoes to fall in the fast-moving Eurozone crisis, which has so far witnessed enormous bailouts for debt-ravaged Greece, Ireland and Portugal.

Earlier on Wednesday, Lloyd’s revealed that it had plunged into first-half losses due to an unprecedented number of major natural catastrophes including the Japanese earthquake and tsunami.  The company made a pre-tax loss of £697 million ($1.09 billion, 800 million euros) in the six months to the end of June, as it was hit by soaring claims.  That compared with a profit of £628 million in the same period of the previous financial year.

London, Sept 21, 2011 (AFP)

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Aon Benfield is hosting its 12th Hazards Conference in Australia on 29 September to 1 October in the aftermath of major earthquakes, tsunamis and floods to have hit the Asia-Pacific region.

Catastrophic events are becoming more complex due to the increasingly interdependent global economy and the technological sophistication of society. For example, a volcano in Iceland caused massive travel disruption; a mechanical failure led to the Deepwater Horizon oil spill; unmapped faults triggered two large earthquakes in Christchurch; La Nina is linked to a cluster of meteorological events in Australia; and a massive earthquake and tsunami in Japan crippled nuclear facilities and triggered supply chain disruptions across the world.

The conference looks at the bigger picture and acts as a catalyst for insurance company leaders to address wider issues to support businesses, individuals and society as a whole in coping with extreme events in today’s complex world.

Robert De Souza, President APAC / CEO Australia & New Zealand, said: “Navigating this world of increasing catastrophic complexity requires new ways of thinking about risk and how to manage it. Our society has been transformed in recent decades by globalization, increasingly complex technological systems, shifting economic power and new regulation. Combined with the universal use of the internet, business leaders face the challenge of managing systems too complicated for them to understand individually. This requires new risk management paradigms and robust internal controls.”

Rade Musulin, COO of Aon Benfield Analytics APAC, added: “Overall the industry has successfully met the succession of challenges from 9/11 to the Great Tohuko earthquake. However it is not a time for the industry to become complacent as catastrophic complexity is certain to be a major issue in coming years. The conference is designed to stimulate thinking among our delegates about big picture trends ahead of us.”

Improved data, catastrophe models and dynamic financial analysis are keys to the insurance industry handling the increasing complexity of catastrophe risk.

Global academic and insurance industry thought leaders will present at the 2011 Aon Benfield Hazards Conference from 29 September to 1 October in Surfers Paradise, Australia to review the lessons learnt and ultimately reduce the list of unknown risks.

Source : Aon Benfield

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Sterling insurance has decided to further refine its insurer and loss adjuster model by granting individual loss adjusting licences.

A recent tender to award loss adjusting services focused on individuals as well as loss adjusting firms and introduced a significant change, which was the launch of individual Sterling licenses to selected skilled adjusters within each firm. Only these licensed adjusters will be allowed to handle Sterling claims, following a successful interview and induction training focused on Sterling’s culture, customer and broker profiles and philosophies.

Sterling Insurance Group has a long history in the personal lines and commercial arena and the company is celebrating its 60th anniversary in November 2011. The company has always prided itself on its claims handling.

In recent Broker Surveys Sterling’s claims service received strong reviews, with the majority of brokers saying the service was excellent compared with other companies in the market. However, there was a general feeling that the excellent service was not always mirrored by Sterling’s loss adjusters.

Garry Simmons, head of property and liability claims at Sterling, commented: “Loss adjusters are an integral part of our claims team and the review process was an opportunity to evaluate and improve the quality of our external claims team. It is vital from our perspective that anyone delivering our brand message has the required experience and skill to follow our service ethos.

“Making a claim is when our customers need us the most and it can be a stressful and demanding time. It is vital that we use individuals who have the right combination of both soft and technical skills, supported by employers who understand the need for a bespoke and not one size fits all service.”

Sterling went out to tender earlier in 2011 to the loss adjusting market and from an initial tender process involving 15 companies, 3 firms ultimately stood out from the crowd:

– Davies (HNW)

– vrs Vericlaim (Commercial)

– Quest Gates (HNW & Commercial)

A phased introduction is taking place during September and October to allow for initial interviews and training of the successful adjusters.

The new loss adjusting process will be enhanced by Sterling’s recently appointed in-house Claims Inspector (Executive Claims Manager) and a Customer Claims Survey that has the ability to monitor performance at individual licensed adjuster level, as well as the loss adjusting firm overall. Sterling is working hard to ensure that loss adjusting is seen exactly for what it is, a skilled art rather than a mere task driven process and these developments can only yield positive benefits to both customer and brokers alike.

Source : Sterling Insurance

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As Typhoon Roke advances towards central and western Japan, more than a million people have been evacuated. Formed on September 10, Roke is the 15th named storm of the 2011 Northwest Pacific Typhoon Season. The storm is currently being steered around the western boundary of a nearly stationary subtropical ridge. The eye of Roke, which has become less organised over the last few hours, was located about 500 km southwest of Osaka and is moving 16 km/h in a northeastward direction according to the Japan Meteorological Agency’s 1400 UTC advisory.

Typhoon-force winds extend outward up to 80 kilometers from its center, while tropical-storm force winds extend outward up to 260 kilometers. Maximum 1-minute sustained wind speeds are currently 200 km/h, making Roke a Category 3 typhoon. Severe weather warnings are in effect for central and western regions of Honshu.

“The storm is expected to accelerate and maintain its present northeastward movement toward Japan’s coast,” said Dr. Peter Sousounis, principal scientist at AIR Worldwide. “Roke is projected to slowly weaken as it approaches Japan. Roke is currently forecast to make landfall in central Honshu, about 200 km southwest of Tokyo, and then move northeastward across central Japan on Wednesday. There is some concern that this current path could take the storm towards Japan’s earthquake-devastated Tohoku region.  Roke will undergo extratropical transitioning and begin weakening after landfall, and its rapid forward speed should carry the storm across Japan in approximately 12 hours.”

“Last Thursday, Typhoon Roke stalled east of Okinawa, and began a 360-degree loop while continuously tapping into abundant monsoonal moisture from the south,” explained Dr. Sousounis. “This resulted in moist, onshore flow for eastern Kyushu, Shikoku, and southern Kinki producing more than 1,000 mm of precipitation in the Kyushu mountains, and as much as 400 mm in some of the larger cities, including Miyazaki , Kochi, and Tokushima.”

“Japan’s mountainous coast will enhance precipitation on the north and east sides of the storm, creating flood and landslide hazards,” added Dr. Sousounis. “Additional precipitation is estimated on the order of 200-300 mm in low-lying coastal regions. However, the increased forward speed should limit the most extreme precipitation scenarios.” The JMA has warned of flooding and landslide threat in the western prefecture of Wakayama after it was badly affected by Typhoon Talas.

Authorities are now concerned that rain from Roke will cause the collapse of mud dams that formed in the aftermath of Typhoon Talas, which would cause downstream flooding. The water level behind a mud dam in the city of Tanabe in Wakayama had already risen to 60 cm below full capacity in the afternoon, compared with 2.5 meters just a few hours prior.

According to AIR, Japan has strict and well-enforced construction codes; modern structures are expected to withstand Roke’s forecast wind speeds with minimal damage, again, making the primary concern from Roke flood damage. Flood damage in Japan is not automatically included in wind policies.

The vulnerability of buildings to flood damage varies by construction type. For a given flood depth, a residential wood-frame building is expected to sustain more damage than a residential masonry building. Concrete construction is less vulnerable to flood than steel or masonry. Commercial and apartment buildings usually have stronger foundations than residential buildings, and are thus better able to resist flood loads.

Flood vulnerability also varies by building height. Because damage is usually limited to the lower stories of a building, high-rise buildings will experience a lower damage ratio—the ratio of the repair cost and the total replacement value of the building—than low-rise buildings because a smaller proportion of the building is affected.

Source : AIR Worldwide

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A new customisable travel insurance option is being launched by Marks & Spencer Money in an attempt to make their products more flexible.

The new product can be adapted to include different levels of cancellation, excess and curtailment cover depending on individual holidaymakers’ requirements. M&S claims that this new level of flexibility is necessary in response to the changing needs of the British holidaymaker, with more people taking very different kinds of trips and trying more adventurous activities and locations.

M&S now offers holidaymakers the chance to opt in or out of certain additions to their cover, depending on factors such as the value of their baggage, the countries they are visiting and how much traveling they are likely to be doing. For example, a couple going for a two-week all inclusive holiday to a beach resort in Florida would want to opt out of several areas of cover that a couple backpacking around Mexico for a fortnight may want to include.

While some holidaymakers may want more cover, others will want to take the very minimum cover options to help their holiday budgets stretch a little further, explained Crawford Prentice, M&S Money’s director.

The new product replaces the Standard and Premier policies that M&S used to offer, instead allowing the holidaymaker to pay only for what they need. Mr Prentice said that the ‘one size fits all’ approach to insurance is rarely appropriate and that individual needs should be taken into consideration by insurers.

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New research from Standard Life shows people in East midlands save more into a pensions plan each month than any other region in the UK.

On average, they save £172 a month towards their pension, £35 more than average. Those in the North East save the least into a pension each month, just £102, followed by people in Scotland who save £110 a month.

Overall, those in Wales have more regular financial commitments, such as mortgages, rent and utility bills, than any other region. Yet they still spend £84 less on these each month than people in London who have the fewest. On average, Londoners spend £1056 a month on their regular financial commitments, with their mortgage making up the lion’s share of this at £814 a month on average.

Standard Life’s research exploring commitments has been developed with psychologist Professor Janet Reibstein. It illustrates how understanding the link between financial and emotional commitments can help us plan for the future and the key stages in our lives much more effectively. People can find out more about this research and how it applies to them at knowyourcommitments.co.uk

The research reveals three core commitment life stages with transition phases in between:

– Commitment Sleepwalkers (18-24) who have a smaller amount of financial and personal relationship commitments. Their regular financial commitments amount to just £458 a month. They spend the least amount of time thinking about their finances so are at risk of overlooking the long term cumulative affects of these costs.

– The Fully Committed (35-44) who are at the peak of their regular financial commitments, spending an average of £1,160 each month and likely to be paying a mortgage, looking after a child and paying off any debt accrued in earlier life.

– Commitment Slowdowns (55+) who are starting to become less financially and emotionally committed. They are spending £818 on their commitments each month, almost £100 less that the average.

Commenting on the research findings, Professor Reibstein said: “Planning our personal finances can provide a foundation for our emotional commitments. It can also impact on our ability to achieve future goals. To make sensible, lasting, and satisfying commitments in life you must first start with your future and your aspirations. Then you work back from that – planning the financial circumstances that will allow you to achieve what you want in life, so you can look toward your future with optimism. Our research suggests that many people across the UK have still to make this connection and approach their finances in this way.”

Standard Life’s John Lawson added: “Understanding how our emotional and financial commitments are linked and how they are likely to change at each life stage makes it easier to plan ahead. Planning for a financially secure and happy retirement is just one example of this. It is vital that people engage with their personal finances and their emotional relationships, not as two separate commitments, but as one single entity that supports their aspirations. With the financial plans in place to support their aspirations, they will be able to feel much more confident about the future.”

Source : Standard Life