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BIBA : FSCS petition of 7000 signatures presented to MP

Industry News

Jun 13, 2011

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The British Insurance Brokers’ Association (BIBA) has presented its Financial Services Compensation Scheme (FSCS) petition of nearly 7000 member signatures to Jonathan Evans MP at the House of Commons. BIBA’s petition calls for the House of Commons to urge HM Treasury to accelerate the FSA’s review of the FSCS consultation with immediate effect.

Jonathan Evans MP, Chair of the All Party Parliamentary Group on Insurance and Financial Services, is supporting BIBA’s petition and will formally present it to the chamber of the House of Commons tonight. Jonathan has also agreed to apply for an adjournment debate on the subject within the House of Commons as an additional call for action on the unfairness of the current funding model.

Eric Galbraith, BIBA Chief Executive, said: “We are overwhelmed with the response to our petition, it adds weight to our campaign and sends a really strong message from brokers on how big an issue the FSCS is. With this year’s increasing levies landing on brokers’ desks shortly, it drives home the importance of achieving separation for brokers in the FSCS funding model, and once Jonathan presents the petition it will provide another official call to Government to take action.”

Jonathan Evans MP, commented: “The FSCS is clearly in need of reform. The number of signatures on this petition shows the depth of concern among brokers, who are already making significant contributions. The FSCS should do more to recognise this and if liability exists in the system then we need to direct the cost to where it is created.”

The FSA announced in November 2009 that a review of the FSCS would be carried out but this was delayed in November 2010 due to European proposals and changes to the regulatory landscape which the FSA said may have potential consequences for the structure and funding of the FSCS. BIBA is demanding for the review to be completed by April 2012, in time to avoid further increases in levies for brokers next year.

Steve White, BIBA Head of Compliance and Training, added: “We are doing all that we can to apply political pressure to avoid any further delay to the consultation. Our petition is just one way that we are getting our members’ voices heard. We have also been working with MPs who are tabling questions in the House of Commons on the subject and if Jonathan achieves an adjournment debate it will really help to raise the temperature of the issue.”

Galbraith concluded: “We totally agree with the principle of compensation but the current structure of the FSCS is fundamentally flawed.”

Source : BIBA

Which? : acknowledges Barclay’s lead on PPI mis-sellings

Communication

Jun 13, 2011

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Barclays announces that custommers who have been mis-sold Payment Protection Insurance will be compensated on a “no questions asked” basis. Peter Vicary-Smith, Which? Chief Executive comments :

“Banks have a lot to do to re-build their reputation after over a decade of mis-selling PPI and then mishandling complaints about it.

“It’s fantastic to see Barclays stepping up in this way, acknowledging their mistakes and refunding customers what they’re owed, no questions asked. Hopefully this will have a domino effect and other banks will follow suit – the sooner the banking industry can consign the PPI mis-selling scandal to the history books, the better.”

Which? advises anyone who thinks they have been mis-sold PPI to complain direct to their bank and avoid costly claims management companies. Which? has created a free online tool, on Which’s website, to make the process as painless as possible.

Source : Which?

Swiss Re : joins Ethiopian micro-insurance project

Industry News

Jun 10, 2011

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Swiss Re is to reinsure a five-year project that provides drought insurance for crops in Ethiopia, in a micro-insurance programme developed by the World Food Programme (WFP) and Oxfam America.

The reinsurer will commit $1.25 million to the project, it said at the Agricultural Risk Management conference on Friday, which will cover the contract with farmers in Ethiopia as well as three future and yet to be determined countries.

The move comes as insurers seek ways to capitalise on the fledgling micro-insurance sector which insures low-income people against specific perils in exchange for premiums proportionate to the likelihood and cost of the risk involved.

The initial project will allow Ethiopian farmers to use labour to pay for a weather index-based insurance contract that will compensate if a severe drought event hampers crop growth.

National insurers Africa Insurance Company and Nyala Insurance Company will insure the crop contracts, while Swiss Re will provide the reinsurance for the project – which has been co-ordinated by the WFP and Oxfam America.

WIth the country facing a drought-induced food crisis the United Nations appealed for $75 million in food and other aid in April for 2 million people in Ethiopia’s southern region.

Ethiopia is one of the world’s largest recipients of foreign aid, receiving more than $3 billion in 2008, according to the New York-based Human Rights Watch.

Oxfam America said it hoped the insurance initiative would prompt more products to include coverage for live stock in the future.

“We are providing insurance to those who cannot afford it. We have seen micro-insurance take off in the life, property and credit sectors. Agriculture is the final frontier,” said David Satterthwaite, senior global micro-insurance officer at Oxfam America.

In 2009 the first micro-insurance fund LeapFrog Investments launched with Zurich, Munich Re, Allianz and SCOR as members.

The micro-insurance project in Ethiopia will start in November and Oxfam and the WFP want to raise a total of $28 million for the programme.

Source : Reuters

Standard Life : recovery, there could be trouble ahead

Communication

Jun 10, 2011

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Three years on from the global financial crisis, Standard Life Investments argues that while policy makers initially reacted well to the problems, preventing an even deeper recession, many of the most important and difficult decisions have simply been postponed.

Accordingly, investors must prepare for slower economic growth and volatile financial markets for some time to come.

In the latest edition of Global Perspective, Standard Life Investments looks in detail at how the world economy and financial markets have recovered since the crash and considers some of the key issues for policy makers and investors over the next three years.

Andrew Milligan, Head of Global Strategy, Standard Life Investments, said:

“Every downturn is different to some degree but the global recession and crisis of 2009-10 was unusual compared with recent history and the recovery is equally atypical. The good news is that some progress has been made by the corporate and financial sectors, the bad news is that many of the difficult decisions facing the government and household sectors have simply been postponed. This has important implications for investors: economic growth will be slow in the major OECD economies for some years, with financial markets showing a saw toothed pattern as they are affected alternatively by stimulus measures and structural headwinds.

“Every action has a reaction. An important conclusion from our analysis is that investors and policy makers must recognise some of the unintended consequences of the policy decision which were taken back in 2008-09. For example, the US government took several steps to support the housing market but a market clearing price was not achieved leading to an unusual lack of mobility of labour due to persistent negative equity. Another US example would be the adoption of QE causing depreciation in the US dollar and therefore contributing to higher commodity prices and imported inflation.

“Much of the strength of the global economic recovery has been dependant upon emerging markets, which via a strong consumer and an industrialisation process driving commodity demand, has been a chief driver of the recovery in global stock market profits. One risk to monitor is that GEM monetary policy is kept too loose, resulting in an unsustainable mix of consumer inflation, property bubbles, current account imbalances and foreign exchange accumulation. A repeat of the 1997-98 financial crisis when capital leaves an asset class too quickly, would be dangerous. The second risk is political disruptions leading to markedly higher commodity prices, especially oil. A supply side shock could severely squeeze growth prospects.”

Andrew concluded,

“While there has been a degree of rebalancing of the global economy since the crisis considerable problems remain. We expect historically low rates of OECD economic growth and volatile financial markets reacting to policy decisions in both the OECD and GEM. High levels of debt in some countries, high levels of savings in others, combined with unduly low real interest and exchange rates, are all resulting in sizeable sovereign stress. At best the world economy might be half way through the adjustment process, at worse the seeds are being sown for the next investment bubble and bust.”

Sourcve : Standard Life

Taiwan : AIG unit sale conditionaly approuved

International

Jun 10, 2011

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Taiwan’s financial regulator said Friday it has conditionally approved a proposal by US insurance giant American International Group to sell Taiwan unit Nan Shan for $2.16 billion.

A local consortium led by Ruentex, one of Taiwan’s biggest conglomerates, will have to deposit Tw$6 billion ($206 million) cash in a custodial account within 60 days, the Financial Supervisory Commission said.

This is on top of Tw$24 billion previously pledged by the consortium, Ruen Chen Investment Holding, which also includes Pou Chen Corp, a footwear maker.

The consortium has also agreed to place all of its Nan Shan shares in a trust for 10 years to show its long-term commitment and to appoint a president with an insurance industry background, the commission said.

It will also raise an additional Tw$10 billion for Nan Shan by year-end and to ensure the rights of its clients and employees, it said in a statement.

“Nan Shan Life appreciates the authorities’ decision and will collaborate with AIG and Ruen Chen to complete the deal soon under these conditions,” a company statement said.

Troubled AIG, short of cash to repay a US government bailout, announced the planned sale of Nan Shan to the consortium in January in its second bid to find a buyer.

Ruentex is a sprawling conglomerate with interests in sectors as diverse as construction, textile and finance. AIG sold Nan Shan Life to a consortium led by Hong Kong-based Primus Financial Holdings for $2.15 billion in 2009, but the deal was rejected by the Taiwanese regulator last year.

Taipei said the Hong Kong group lacked the experience needed to manage an insurer and argued it had failed to provide a long-term management commitment, claims rejected by the consortium.

The rejection dealt a blow to AIG, once the world’s largest insurer, which has been selling assets to pay back US government loans since its rescue from collapse during the 2008 financial crisis.

Taipei, June 10, 2011 (AFP)

AXA : Big Money Index shows financial pessimism

Communication

Jun 10, 2011

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AXA’s Big Money Index shows that 40 per cent of consumers, or 20 million people have made significant spending cutbacks in their daily lives since the end of last year.

Recording a dramatic fall in financial confidence over 12 months across eight demographic groups, the Index also reveals that one in five regret some of their pre-recession financial decisions and are not confident investing in British shares. One in four consumers have used their savings in the last quarter in order to make ends meet.

AXA’s new quarterly report presents an in-depth view of financial confidence, behaviour and attitudes with a unique, detailed focus on eight distinct demographic groups. It provides a comprehensive portrait of the impact that falling consumer confidence is having on spending habits and confirms that those with least money are feeling the most “squeezed”.

Reinforcing other recent figures, the AXA research carried out by YouGov shows that those feeling financially confident dropped from 23 per cent to 16 per cent in the period between Q1 2010 and Q1 2011. In particular, Under-funded Seniors’ optimism in their financial future plunged from 19 per cent to seven per cent and confidence among The Stretched fell from 24 per cent in Q1 2010 to just 11 per cent in the same period this year.

As a result of this, a striking 40 per cent of consumers chose to go out less between January and March this year, a five percentage point increase on the previous quarter. Half (48 per cent) of those in the most pessimistic group, Young Professionals, cut back on going out. The proportion among The Stretched was even higher at 56 per cent.

With soaring petrol prices, more than a quarter (27 per cent) of consumers reduced car usage in the first three months of the year (up 10 percentage points on Q4 last year) and a similar number say they cut back on food shopping. Thirty five per cent tightened the reins on alcohol and takeaway spending while an increasing number cut back on holidays. The last quarter saw an eight percentage point rise in those cutting expenditure on food, oil, gas and electricity.

One in four were forced to dip into savings to fund everyday expenditure and eight per cent of consumers with debts of £5-10K are prioritising repaying their average monthly credit card bill of £151-200 straight after rent and bills. Seventeen per cent have ‘spent more on’ clearing some or all of the money on a credit card or loan since Q4 (an increase of three percentage points since Q4) and this rose to 30 per cent for worried Young Professionals.

A disheartening one-fifth of the UK population agree that they regret some of the financial decisions they made before the recession. Those regretting their decisions the most are Nest Builders and The Stretched (both 23 per cent), and Modest Middle Years (22 per cent), compared to the overall score of 19 per cent.

AXA UK’s chief investment officer, Eric Lhomond said: “These figures reveal a concerted effort by British consumers to claw back some financial security in the face of a significant drop in optimism that we found across all demographic groups. The result is that we are busy paying off debts, reining in unnecessary spending and clinging onto financial products to protect or grow our assets.”

For those with any money to spare, the number of consumers putting money into savings or investments has risen by four percentage points in the last quarter.The numbers taking out SIPPs or personal pensions suggest that longer term savings are important to consumers if they can afford them. Small rises are also evident in the proportion taking a punt with premium bonds – perhaps reflecting a desire for low risk investment.

When it comes to wealth management and investment, only one in five say they would be confident in investing in British shares at the moment, while 35 per cent would choose to invest in property (rising to 44 per cent in the Exclusive Lifestyles group).

Looking across the wider economic picture, more than half expect more NHS treatments to need private funding in future and a surprisingly high 40 per cent of all consumers would be prepared to pay for some of these.

The report also shows a clear lack of enthusiasm for the UK tax system. Not only do almost half (49 per cent) of people in the UK think inheritance tax should be abolished, when asked if they think the top-end 50 per cent UK income tax rate should be kept for the long term, around half of respondents (47 per cent) agree.

Worryingly, those on low incomes – almost one in four of The Stretched and 30 per cent of Under-funded Seniors – are not using any source of financial information to help them manage their money.

Source : AXA

Appointment : Paul Matthews is Standard Life UK CEO

Social

Jun 9, 2011

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Paul Mathews is Standard Life’s new CEO for the UK business. In addition to his responsibilities as Group Chief Executive, David Nish has been performing the duties of UK Chief Executive since January 2010. Paul’s appointment will allow David to focus on the Group strategy and shaping the future direction of the businesses across the Group.

As UK Chief Executive, Paul’s responsibilities will include UK Operations; Customer Services, UK IT and Change,

Paul has held a number of senior positions within Standard Life since he joined in 1989. Most recently, he was UK Take to Market Director* with responsibility for the Retail, Corporate and Direct to Customer businesses in the UK.

David Nish, Group Chief Executive, said :

“I am very pleased to announce Paul’s promotion to Chief Executive of our UK business.

“Paul is a strong and respected leader. His experience and understanding of the UK market, combined with his customer focused approach, make him the ideal person to lead our UK business, enabling us to maximise the potential within this exciting market.”

Paul Matthews, UK Chief Executive, said :

“In the past 18 months we have taken significant steps to build on our leading position in the UK long-term savings and investment market. We have launched a number of new and exciting products and propositions alongside significant enhancements to both our Corporate and Retail offerings.

“With the introduction of the RDR, NEST and wider pensions reform we will see the biggest set of changes our industry has ever experienced. Standard Life is strategically well positioned for these changes which will fundamentally alter the UK savings environment. I am delighted to be leading our UK business through this exciting period and I am looking forward to the opportunities ahead.”

Source : Standard Life

Aon Risk Solutions : political violence now considered in Aon’s annual Terrorism Threat Map

Industry News

Jun 7, 2011

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Political violence, strikes, riots, civil war and war threaten the sustainable growth, continuity and profitability of businesses as much as terrorism, according to Aon Risk Solutions. Consequently, for the first time in its 10-year history, Aon’s annual Terrorism Threat Map now also takes these factors into account in assessing the severity of threats businesses face around the world.

The 2011 Aon Terrorism and Political Violence Map shows increased risk of political violence in the Middle East and North Africa, reflecting the significant turbulence of the Arab Spring uprisings in the region. The risk of coup d’etat and rebellions in Africa reflect a continent that presents a significant political violence risk. Civil unrest and labor disputes arising from austerity measures in Western European nations such as Greece, France, Spain and the UK are also reflected on the map. Meanwhile, terrorism continues to severely afflict established conflict zones like Iraq, Afghanistan, Pakistan and Somalia as well as parts of Nigeria and the Sahel region. The threat of occasional acts of international terrorism remains significant for most Western nations and major powers.

The map, produced by Aon in collaboration with the security consultancy firm Janusian, which is part of The Risk Advisory Group, reflects data recorded by Terrorism Tracker*, which monitors global indicators of terrorism threat, including attacks, plots, communiqués and government countermeasures, Aon WorldAware*, which provides country risk information for business travelers and an expert assessment of the security situation in more than 200 countries. Each country is assigned a threat level, starting at negligible, and rising through low, medium, high and severe.

The Aon Terrorism and Political Violence Map acts as a gauge for the intensity of the threat of political violence to international business in each country and three icons indicate the forms of political violence likely to be encountered:

– Terrorism and sabotage

– Strikes, riots, civil commotion and malicious damage to property

– Political insurrection, revolution, rebellion, mutiny, coup d’etat, war and civil war

Neil Henderson, head of terrorism in Aon Risk Solutions’ Crisis Management team, commented: “While the attacks of September 11 were the genesis for the Aon Terrorism Threat Map, the issues that should be of most concern to people and businesses have evolved greatly in the nearly 10 years since. While terrorism remains a very real threat around the world, the reality is that threats to business continuity are also coming from political violence in all its many forms. The change in the way the map is scored should not be seen as a decrease in the incidence or severity of terrorist threats, but rather the fact that it provides businesses with a more inclusive view of some of the risk management issues they are facing around the world.

“Businesses should, as a first step, identify the threats they face and implement a comprehensive risk management program to protect their employees, physical assets and ultimately, their bottom line. As the insurance market for terrorism insurance is very mature and can cope with complex international risks, it should be considered as part of a sound risk management program.”

Dr. David Claridge, managing director of Janusian, added: “The threat of terrorism remains a daily concern for business risk managers. Islamist terrorist groups continue to pursue a global agenda, illustrated by plots such as Al-Qaeda in the Arabian Peninsula’s attempt to bomb cargo planes last October last year as well as internationalizing local grievances by attacking targets like Moscow’s Domodedovo airport, which was bombed in January.

“The uprisings in the Middle East and North Africa have highlighted the need for risk managers to take a comprehensive approach by assessing exposure to political violence in all its forms.”

Access to Aon’s online 2011 Terrorism and Political Violence Threat Map and hard copies can be requested via http://www.aon.com/terrorismmap.

Source : Aon Risk Solutions

The AA : to call for driving education at school and overhaul of Pass Plus

Communication

Jun 7, 2011

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At a seminar organised by the Driving Standards Agency (DSA) at the Department for Transport in Marsham Street on Wednesday 8 June, created to discuss education and training of young drivers, the AA will be calling for driving responsibility to become part of the National Curriculum.

Simon Douglas, director of AA Insurance, will also be pressing the DSA to bring greater credibility to the Pass Plus series of post driving-test training sessions by adding an examination.

“Young drivers pay extremely high premiums for their first car – and that is in no small measure down to the high risk of serious injury to themselves, other road users and particularly their passengers,” Mr Douglas points out. “It is vital that the responsibility that goes with owning a car is instilled at an earlier and more receptive age which is why it should be included in mainstream education.”

Teenage drivers are ten times more likely to be killed or seriously injured in crashes than drivers aged 35 or over and, while the number of collisions on Britain’s roads is falling, young drivers are taking a growing share of the total.

Bringing home both the human as well as monetary cost of serious crashes, AA Insurance has dealt with two crashes resulting in claims for over £5 million this year, both involving 18-year-old male drivers. In one, the young driver’s girlfriend suffered injuries expected to leave her wheelchair-bound for the rest of her life; in the other a head-on collision resulted in the driver’s passenger and the driver of the other car were killed.

“If education can help to prevent just a few tragic accidents of this sort it will be worth the investment. Too many young lives are lost in such circumstances. Road collisions are by far the biggest killer of young people in the UK today,” Mr Douglas says.

Pass Plus needs overhaul

The voluntary Pass Plus scheme has become discredited in the insurance industry because there is little difference in the number of crashes experienced by those who take it, compared with those who don’t.

Mr Douglas points out that the scheme involves six sessions covering different aspects of driving such as motorways, night driving, town and country driving. “They sessions are informal and there is no test. Insurers are much less likely to offer insurance discounts because there is no demonstrable benefit in terms of claims experience.

“In my view, Pass Plus should end with a test that will underline that the young driver has learned more about driving responsibly and safely and is putting it into practice.

“Insurers might then be inclined to offer more generous discounts than they do at present.”

Source : The AA

Confused.com : study shows which drivers have the crashiest cars

Jun 6, 2011

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Confused.com studied 12 months of quotes, covering 5 years of claims records, to find out which is the make and model of car with the highest accident rates.

1) Top of the list was Honda’s FR-V six-seater: between them, 2,529 owners of these vehicles made 466 accident claims in the past five years. That’s a claim rate of 18.4 per cent or almost one in five.
2) Next came Volvo’s XC90: of the 3,886 drivers of this model who bought cover through Confused.com, 619 made claims for accidents – a rate of 15.9 per cent.
3) The Lexus RX had a claim rate of 15.5 per cent (574 claims out of 3,701 drivers), followed by the Mazda 5 (15.3 per cent, or 373 out of 2,431).

Also in the top 10 vehicles for claims were Honda’s Jazz and CR-V models, Volkswagen’s Touran, the Hyundai Santa, the Toyota Rav and the Mazda 3. Each had a rate of about one accident claim for every seven vehicles insured through insurers on the Confused.com panel.

Lowest claim rates

We also looked at which cars were least likely to be involved in accident claims.

Apparently the ‘safest’ of all was the Mazda 2 TS TD – out of a total of 1,076 owners, only nine accident claims were recorded in the last five years. That makes a claims rate of less than one in 100.

Also hovering around the 1 per cent claims-rate mark were Nissan’s Skyline, the Ford Focus RS and the Fiat Cinquecento.

Confused.com’s head of car insurance, Gareth Kloet said:

“Car accidents are rarely a result of mechanical failures: they are more often caused by human error or just bad fortune. It could be that drivers of this model happen to be more careless or reckless than other motorists. Or it could simply be that this group of road users has been particularly unlucky in the period when the data was collected.”

Confused.com’s statistics show just a snapshot of accident-related claims made by owners of a particular make and model of vehicle. So it is worth stressing that if one particular car appears to have a relatively high rate of claims, it does not follow that this vehicle is inherently more dangerous than others.

This research reflects only the experience of Confused.com customers: other companies’ figures could show different trends.

*Figures are based on quotes from Confused.com, between 11 May 2010 and 11 May 2011, based on all types of accident claims: this means those where the driver of a particular vehicle was at fault as well as cases where the other party took responsibility, and claims where no blame could be apportioned.

Source : Confused.com

Appointment : Moorhouse subsidiary to quadruple staff numbers within six months

Social

Jun 6, 2011

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Moorhouse’s subsidiary Moorlife has embarked on a recruitment drive to hire 30 people by November.

Moorlife was launched in September with a staff of 10 in response to demand from existing clients to provide standard covers including death, terminal illness and critical illness.

The success of Moorlife since had lead to the decision to drive the business forward by broadening its remit beyond existing commercial clients. The majority of staff being sought will enable Moorlife’s expansion into new markets by developing its capability for online quote and buy life cover.

To help oversee the planned recruitment and expansion Moorlife has appointed two new directors. Phil Roberts joins Moorlife as operations director with 18 years experience. He becomes a full time employee of Moorlife after working for the company as a consultant for two months. Previously he worked for Cardiff-based life broker Y3S Life. Leighton Phillips also joins Moorlife from Y3S where he held the role of head of marketing. He joins Moorlife as commercial director, bringing 14 years experience to the role.

Moorhouse chairman and CEO Lyndon Wood said: “When Moorlife launched in September this was to satisfy a growing demand from our general insurance clients for life products. Since then take up has been fantastic so it is a natural step to scale it out to the wider market.”

Moorhouse Group managing director Sian Pryce added: “Our existing infrastructure gives us the capability to launch into vertical markets very easily, which made a cost-effective and quick launch possible. It also means that now, with the addition of the 30 new staff we will be in an ideal position to scale the business further.

Source : Moorhouse

Gocompare.com : study shows that nearly a quarter of Brits never switched

Industry News

Jun 6, 2011

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Nearly a quarter of Brits have never switched any of the 20 most common financial products including their car and home insurance, energy provider, bank account, mortgage or credit card provider. But, the new research from Gocompare.com also revealed that most consumers (53 per cent) don’t think that they are being rewarded for their loyalty.

The survey found that 23 per cent of consumers have never switched any of the 20 most common financial products:

– 31 per cent have never switched bank accounts

– 18 per cent have never switched mobile phone provider

– 15 per cent have never switched mortgage lender

– 14 per cent have never switched their home insurer

– 14 per cent have never switched savings accounts

– 12 per cent have never switched their car insurer

– Eight per cent have never switched energy provider

John Miles, Gocompare.com’s business development director commented, “Against a backdrop of rising prices for fuel and groceries, car insurance premiums at record highs and low interest rates on savings – consumers could make much needed savings by reviewing their financial products and switching to a better deal. But, as our survey reveals, nearly a quarter of consumers haven’t switched on to the benefits of switching.

“Many people find financial products daunting, and perhaps do not have the confidence to shop around for a better deal. However, with the development of comparison sites, it has never been quicker or easier to compare hundreds of products from different providers. And, there are some considerable savings to be had – if you look at car and home insurance, the average savings on these are £320 and £232 respectively, and with a potential saving of £442 on gas and electricity, these are not savings to be sniffed at!”

Gocompare’s switching survey also looked at the number of consumers who had switched financial products in the last year. The survey revealed that only 36 per cent of consumers have switched their car insurance in the last 12 months, only 22 per cent switched their home insurance, and the figures were even lower for other financial products: nine per cent switched energy supplier, eight per cent for credit cards, five per cent for savings accounts and three per cent for bank current accounts.

John Miles continued, “Usually financial services providers offer the best deals to attract new customers – not to reward loyal customers. While over half of the people questioned in our survey recognised this, many are still not shopping around for best deals.

“Car insurance in particular is an area where significant savings can be made. The average premium has risen by a staggering 94 per cent** in the last three years, so if you haven’t switched providers you could be paying well over the odds for your insurance.”

Source : Gocompare.com

Appointment : Steve Payne is Friends Life’s new Managing Director of Protection

Social

Jun 5, 2011

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Friends Life announced the appointment of Steve Payne as Managing Director for its protection business. In his new role Steve Payne will be responsible for developing and implementing the strategy for Friends Life’s Individual and Group Protection business across all distribution channels.

The newly enlarged Friends Life business recently announced plans to consolidate its individual protection propositions onto a single platform for all new business in a bid to establish a best of breed proposition for the IFA market. This proposition will be built using the platform from the recently acquired life assurance business and will draw on the best elements of the Friends Provident individual protection offering and the heritage protection business acquired from AXA.

Andy Briggs, CEO commented on Steve Payne’s appointment:

“Steve Payne’s new strategic appointment underlines our plans for expansion in the protection market. We are fully focussed on developing a single, compelling protection proposition for IFAs comprising the optimum elements of each of the three historic brands. Steve’s skills and experience will prove invaluable as we complete this process.”

Friends Life recently announced its decision to use a single low cost operating platform for both its Individual and Group Protection new business as it believes this will provide the strongest base for building a best of the best offering to support new and innovative propositions.

Steve Payne said:

“I am tremendously excited to be leading the Friends Life protection business at such a crucial time. We have a hugely compelling offering and the challenge ahead of us is to ensure we develop something truly innovative for the market.”

Source : Friends Life

RMS : updated hurricane model approved by Florida

International

Jun 3, 2011

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Risk Management Solutions (RMS) announced today that the Florida Commission on Hurricane Loss Projection Methodology (FCHLPM) has approved the RMS U.S. Hurricane Model version 11.0 for use in residential rate filings with the Florida Office of Insurance Regulation.

The FCHLPM is a rigorous assessment of a hurricane catastrophe model, employing a team of experts to verify the technical credibility of the science, engineering, actuarial methodology, and software that the model is based upon.

Version 11.0 represents RMS’ latest view of hurricane risk and is driven by significant new hazard and loss data, as well as advances in research and technology since the models were last updated. It incorporates the results of a three-year research and development project into how hurricanes decay over land, conducted with the University of Miami, together with detailed analysis of tens of thousands of wind-speed observations – ten times more than were available in the last hazard update in 2003. As part of a detailed peer review process, the new methodology has been published in scientific literature and the model has been reviewed by independent external experts.

The updated model reveals new information about how hurricane risk is spread across Florida, with decreases in the view of risk to some coastal areas and increases in the view of risk to Central Florida compared to the previous model version. According to the new data and research, wind risk in some coastal locations, such as Miami-Dade, is lower than had previously been understood. At the same time, advances in our understanding of how hurricanes decay over land show that the risk in Central Florida, in areas such as Orange County, is actually higher than previously understood. While the relative risk has changed, coastal locations are still much more subject to hurricane risk than inland locations. Overall, the loss to the state as a whole increases by 6.5% under the new model.

As the market continues to adopt version 11.0, RMS is partnering with stakeholders at all levels to help manage implementation of the model and build understanding and intuition around the new view of risk.

Source : RMS

Appointment : Trevor Matthews is Aviva UK’s new CEO

Social

Jun 2, 2011

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Aviva announces that it has appointed Trevor Matthews as CEO of its UK region and as an executive director of Aviva, subject to FSA approval. Trevor will replace Mark Hodges who has today resigned from the board of Aviva plc to join Towergate Insurance as its group chief executive.

Trevor Matthews is currently vice chairman of Friends Life and was previously CEO of Friends Provident Holdings (UK) plc. Amongst other senior positions, he was also chief executive of Standard Life’s UK life and pensions business, managing director of Legal & General in Australia and is currently Chairman of the Financial Skills Partnership in the UK.

Andrew Moss, group chief executive of Aviva, said:

“After a successful career at Aviva I am very sorry to see Mark leave, but we understand that he wishes to take on a different challenge at this stage in his career. We wish him well in his new position.

“I am delighted that Trevor Matthews has agreed to join Aviva as the UK CEO and as an executive director. Trevor has an outstanding track record of achievement in insurance globally and will be a strong addition to our leadership team.”

Trevor Matthews said:

“It is a privilege to join Andrew Moss and the Aviva leadership team. Aviva is a business that I have always admired and seen as a formidable competitor in my previous roles. Over the coming years I am confident that Aviva UK will continue to strengthen its position as the country’s undisputed leader in insurance.”

Trevor Matthews will join Aviva as soon as possible. David Barral, CEO UK Life, and David McMillan, CEO UK General Insurance, will continue to run Aviva’s market leading insurance operations in the UK with responsibility for driving forward plans to further improve profitability, expand distribution and effectively serve customers’ needs.

Source : Aviva

Friends Life : lead sponsor for the Professional Cricketers’ Association Benevolent Fund

Communication

Jun 2, 2011

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Friends Life is to become lead sponsor of the Professional Cricketers’ Association (PCA) Benevolent Fund, marking a further connection between the new model provider and the sport.

Following a four year existing relationship with the PCA, Friends Life will this year strengthen its commitment to the well-being of past, present and future cricketers by offering both an array of support services and a financial donation to the PCA benevolent fund.

Friends Life has long been associated with cricket becoming the title sponsor of the t20 domestic cricket competition in 2010 after a 3 year period as title sponsors of the 50-over domestic competition, the Friends Provident Trophy. The newly titled Friends Life t20 begins on 1 June 2011 at the Rose Bowl, with a rematch between last year’s finalists, Hampshire and Somerset.

As part of Friends Life’s commitment to the PCA Benevolent Fund, the company has agreed to donate £100 to the charity for every ‘six’ that is hit during the Sky Sports televised games throughout the competition.

Trevor Matthews, Chief Executive Officer Friends Life, said:
“At Friends Life we are passionate about looking after our five million customers. In today’s challenging economic environment savers in the UK have to navigate much financial uncertainty and cricketers are no exception. Through our association with the PCA Benevolent Fund we can help alleviate some of that financial worry and provide a guiding hand through our financial education services. Both the shortened career span and hectic lifestyle of professional cricketers can often mean long-term financial planning falls by the way-side but we hope to address this through our new relationship.”

To celebrate the launch of the new PCA and Friends Life relationship and in particular the new ‘six and counting’ initiative top cricketer Dominic Cork, captain of last year’s winning Hampshire side will be appearing at the Kia Oval. Dominic will face a nets challenge from guests attending. Joining them will be Trevor Matthews, CEO Friends Life and Jason Ratcliffe, Assistant CEO of the PCA.

Commenting on its new sponsor, Angus Porter, Chairman of the PCA, added:
“The PCA Benevolent Fund aims to help cricketers of all generations who need our help, for whatever reason. We are absolutely delighted that Friends Life, a true and valued supporter of English cricket, has agreed to give their generous support to this most worthwhile cause.”

Source : Friends Life

AXA : strategic plan “Ambition AXA”

Financial News

Jun 1, 2011

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AXA has hosted an investor conference in Paris, during which the management team will present its strategic plan “Ambition AXA”, focusing on financial and operational priorities for each of its business lines, Life & Savings, Property & Casualty, and Asset Management.

“The long term potential of Insurance and Asset Management is more promising than ever, addressing global needs for risk and life-style protection, underpinned by long term demographic trends and the rapid advent of emerging economies”, said Henri de Castries, Chairman and CEO of AXA. “Through Ambition AXA, our new strategic plan for the next 5 years, we reaffirm today our objective to become the industry’s preferred company, building on customer centricity and a culture of trust and achievement for our teams”

“Ambition AXA is about three main priorities: Selectivity, Acceleration and Efficiency.

Selectivity, mainly in mature markets where we will concentrate our efforts on actively developing higher margin offers with lower capital consumption which address our customers’ needs. This should allow us to generate sustainable growth of earnings and operational Free Cash Flows. Acceleration, mainly in high growth markets where the Group already benefits from a strong footprint worldwide which has been reasserted by the recent AXA APH transaction, and where we want to grow further and allocate a larger share of our capital. This will allow us to double our size and more than double our profitability organically by 2015 and to continue to attract leading partners in insurance distribution

Efficiency everywhere with a specific focus on mature markets, where we expect to deliver Euro 1.5 billion of cost savings by 2015 whilst continuing to improve customers’ experience with AXA.

We will fulfil our Ambition by building on our key differentiating assets, such as our brand, our unique distribution mix, our capital management agility and our deep international talent pool. This is our Ambition, and we are committed to deliver on it.”

Group wide Ambition:

– Underlying EPS CAGR of 10% by 2015

– Cumulative Euro 24 billion of Group operating Free Cash Flows from 2011 to 2015

– 15% adjusted return on equity in 2015

– 25% debt gearing by 2015

– Euro 1.5 billion pre-tax cost savings in mature markets by 2015 and Euro 0.8 billion by 2013.

Life & Savings Ambition

In Life & Savings, the objective is to actively grow the Protection & Health activity, to reshape the

traditional Savings business by increasing the Unit-Linked share, and to extract more value from

what is today one of the largest life book in mature markets whilst accelerating the development

in high growth markets.

This will translate into the following objectives:

– Cumulative Euro 11 billion of operating Free Cash Flows from 2011 to 2015 and Euro 6

billion from 2011 to 2013

– NBV margin above 28% in 2015

– IRR above 15% in 2015

– Reduction of the cost income ratio by 5 pts by 2015, notably through Euro 0.5 billion pre-tax

cost savings in mature markets

Property & Casualty Ambition:

In Property & Casualty, the objective is to improve profitability through technical excellence and

efficiency, mostly in mature markets, to actively grow the Direct business and to accelerate the

development in high growth markets.

This will translate into the following objectives:

– All year combined ratio below 96% in 2015

– Current year combined ratio at 100% in 2011 and below 97% in 2015

– Reduction of the enlarged expense ratio (including claims handling costs) by 4 pts by 2015,

notably through Euro 1.0 billion pre-tax cost savings in mature markets.

Asset management:

In Asset Management, the objective is to seize the rebound potential of our two asset managers,

AXA IM and AllianceBernstein.

This will translate into the following objectives:

– Turnaround of net flows in 2011

– 4-5% net new money per year over 2012-2015 (as a percentage of average Assets under Management)

Source : AXA

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