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Yacht and motorboat insurers are warning boat owners about the damage caused by Diesel Bug.

Unfortunately one of the risks associated with using Biodiesel is contamination of the fuel system caused by Diesel Bug, which can cause boats to break down unexpectedly.  Once diesel bug has got into the fuel system of a boat, it can quickly contaminate filters, pipes and tanks with a nasty black slime that can lead to dangerous and unexpected breakdowns, and high repair bills.  Diesel bug is also unlikely to be covered by boat insurance policies, and the repair costs can be significant.

Navigators have already seen a number of pump failures due to likely seal breakdown caused by Biodiesel. Since the introduction of a recent EU Directive, boat owners are required to use marine diesel with significantly reduced levels of sulphur and one of the ways this is being achieved is through the addition of Biodiesel.

Longer-term risks associated with Diesel Bug include damage to the existing rubber and plastic seals and pipes within fuel systems.  Many may not offer the required resistance to the new bio fuels being used, leading to gradual breakdown and leakage over time.

James Roberts, Head of Navigators & General said, “The earlier Diesel Bug is spotted, the easier it is to clear. There are also many treatments available that work to prevent it taking hold in the first place.

“The best advice seems to be to try and find out if the fuel you are intending to purchase has any Biodiesel or FAME additive, and try to avoid using fuel that does. If this is not an option, then using recommended fuel treatments such as ‘Marine 16′ to prevent and clear diesel bug will help. Also checking for water in fuel tanks which further increases the risk of diesel bug, and exploring methods to check and drain tanks.”

Navigators also advises that in the longer term, and as part of all boat owner’s routine maintenance, it may be worth retro fitting seals and pipes with materials that are compatible and resistant to Biofuels.  The British Marine Federation and experienced yards and surveyors, should be able to assist in this area. Regular checks for fuel leaks and fuel contamination in the bilge should also be carried out to identify pipe or seal breakdown early.

Mr Roberts continues “An engine failure at a critical time could lead to damage and personal injury, so we strongly encourage boat owners to check the fuel they are using and looking for any signs of a leak.”

Source : Zurich Press Release

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The rising cost of living combined with the recent run of expensive bank holidays has led to a 58 per cent increase in demand for payday loans through moneysupermarket.com, compared to the same period in April.

The comparison site is warning consumers to make sure a payday loan is the most suitable product for their circumstances and understand the terms and conditions before applying; otherwise they may find themselves in financial difficulty.

Payday loans are a form of short-term borrowing aimed at struggling consumers who need to bridge the gap until their next payday. The amounts offered to consumers by payday loan companies usually range from £100 to £300, but this amount can go up to £1,000 in some cases. If an application is successful, money can be transferred into the borrowers account on the same day, making them extremely attractive to those that need a quick cash injection.

Due to their short terms nature payday loans carry extremely high interest rates, some as much as 2,000 per cent when converted to an annual percentage rate (APR). These rates vary enormously, but typically, customers borrowing £100 will have to pay back around £125 and the term of the loan is usually set at 31 days – a £300 loan is likely to cost them around £375.

Tim Moss, head of loans and debt at moneysupermarket.com said: “It’s no surprise to see the demand for pay day loans rise so sharply in the current climate, and particularly around bank holiday periods when people have been spending more. These products act as a barometer, giving a unique insight into the state of the nation’s finances, and as people continue to feel the pinch, we can expect to see the popularity of these products continue to increase.

“When you convert the interest rate of a pay day loan to an APR, the costs involved can appear exorbitant, however, because of their short-term nature expressing the rate as an APR can be misleading. For consumers who need money quickly, it can often be cheaper to borrow using a payday loan than exceeding their overdraft limit without authorisation from their provider.

“However, the use of payday loans comes with a huge caveat. There is a real danger that customers could fall into a spiral of debt where they have to take out a loan each month just to make ends meets. Borrowing £100 one month means paying back £125 the next and anyone struggling to stay out of the red could find that taking out a pay day loan ultimately makes the problem worse. Payday loans are not suitable for customers looking for longer term credit or unable to pay off the debt within a few days.

“The golden rule for consumers is not to borrow money unless it is absolutely necessary. Consumers feeling the pinch need to sit down, go through their finances and try to work out where they can reduce their outgoings before considering any kind of loan. If you are a regular user of a payday loan, then you should really look at your circumstances. If you are in a position where you rely on them regularly, then I would advise seeking debt advice from one of the free debt advice charities who can help bring your finances back on track. “

Source : Moneysupermarket.com Press Release

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AXA Assistance, iJET a 3i-MIND company and G4S have confirmed the formation of a new global partnership to provide full travel risk management and protection services for business travellers and expatriate staff working overseas.

The companies, each world leaders in their respective domain, have combined their expertise to create a comprehensive and integrated global travel risk management solution that will provide optimum protection for staff when travelling to or living in countries worldwide.

By combining their complementary areas of expertise, customers will receive:

– Medical assistance, provided by AXA Assistance medical teams, and a full range of medical services from advice and coverage of medical costs for top quality specialists and hospitals, to medical repatriation

– Global Travel Intelligence®, Tracking and Communication from iJET, providing online destination information, travel advice and email threat alerts; giving managers the capability to monitor threats to travellers and expats – as well as to contact employees at risk – all from

iJET’s award-winning Worldcue® technology platform

– Security support from G4S in 120 countries through its specialised risk consulting business,

Hill & Associates – giving advance trip planning, training, advice and support to allow companies to prepare for, understand and manage any crisis that may arise

Business travellers and expatriate staff will be able to access the unified service online or by calling a dedicated command centre. Companies signed up to the service can offer their employees a complete package of protection via a single contract with centralised management procedures and standardised processes, no matter where they are in the world.

The operational efficiency of the partnership has already been proven in various North African and Middle Eastern hotspots, as well as in Japan during the recent tsunami disaster.

Serge Morelli Chairman of AXA Assistance declares: “Associating AXA Assistance’s medical offering with the Security services proposed by Hill & Associates, G4S and iJET, creates a turnkey package that meets companies’ real needs and will thus ensure the enduring success of the partnership.”

Richard Hickson, CEO of G4S Hill & Associates said: “This new partnership brings together a unique travel risk management and protection solution from three market-leading businesses.

It provides any company with the ability to help both their business travellers and expatriate staff feel safe and secure anywhere in the world.”

“iJET is delighted to be partnered with two world class response organizations in providing the market a best of breed option for complete Travel Risk Management,” added Steve Hoffman, CEO of iJET International. “Our partnership will act as one in addressing client requirements as we leverage the global presence and reach of all three companies.”

Source : AXA Assistance Press Release

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Lloyd’s of London market will take a $3.8 billion hit from earthquakes and floods in the first quarter, and predicted the high level of catastrophe claims will lift insurance prices this year.

Lloyd’s estimated catastrophe losses for the first three months of 2011 exceeds the $2.6 billion it paid out in the whole of last year, when hefty claims from an earthquake in Chile and the Gulf of Mexico oil spill halved the market’s profit.

The estimate is still well within the worst case scenarios Lloyd’s prepares for and the market will have no difficulty settling claims, it said on Friday.

Lloyd’s projected losses include $1.95 billion from the earthquake that devastated Japan in March. February’s New Zealand quake accounted for a further $1.2 billion and heavy flooding in Australia cost another $650 million.

Lloyd’s of London Chief Executive Richard Ward said the first quarter’s catastrophes, as well as tornadoes that swept through southern U.S. states in April, should lead to a “firming of rates” as insurers seek to recoup big payouts to customers.

Big natural disasters can trigger a rise in insurance prices as a surge in claims dents the industry’s finances, forcing less well-funded players to retrench and freeing those still in the market to charge more.

Insurers have said a proliferation of natural disasters since the start of 2010 had boosted the cost of catastrophe insurance and reinsurance, but that prices in the broader market are drifting lower for the third year in a row, weighed by intense competition.

Some in the industry reckon there could soon be an across-the-board rise in insurance prices, especially if the June to November U.S. hurricane season generates further big claims.
“People are very much talking about us being much closer to a wider reinsurance market turn,” said Nick Pope, an analyst at brokerage Jefferies. “Bear in mind that we haven’t even gone into the U.S. hurricane season, when traditionally the highest level of losses happens.”

Bermuda-based insurer Catlin, the third-biggest listed insurer operating in the Lloyd’s market, said on Friday a widespread rise in rates would be “totally appropriate” given recent catastrophe losses.

Lloyd’s, which traces its origins back 323 years to a London coffee house where wealthy merchants sold shipping insurance, said its capital reserves would be unaffected by recent earthquakes and floods.

The market, made up of 85 competing syndicates who provide cover against large-scale, complex risks, also said there would be no need to call on its central fund — a financial safety net used in the event of a syndicate being unable to pay claims.

Lloyd’s projected $1.9 billion hit from the Japanese quake is based on a total insured loss of $30 billion, toward the upper end of estimates of between $20 billion and $34 billion calculated by risk modeling agencies.

Source : Reuters

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When it comes to home and auto insurance, consumers in communities across Canada now have an easy way to get the best of both worlds – a quick insurance quote whenever they want it, combined with the value of using an insurance broker.

Plus, there’s a chance help Canadian charity Free The Children.

Aviva Canada, one of the country’s leading providers of home, auto, leisure and business insurance, today announced that consumers can now get insurance quotes online at avivacanada.com. The new capability connects consumers to a local broker of their choosing (where available) and allows them to obtain a no-obligation insurance quote for their home or vehicle, all from the comfort of their home.

“Offering an online quote makes insurance even more accessible for consumers,” states Maurice Tulloch, Aviva Canada president and CEO. “And by ensuring they purchase through a local broker of their choice, consumers will continue to benefit from all the experience, information and options a local broker provides.”

“For our broker partners,” he continued, “the feature will help them connect with and assist even more consumers.” Visit avivacanada.com to watch Maurice Tulloch discuss the new capabilities.

The online quote feature adds to the many helpful sections of avivacanada.com, such as tools to find local brokers and claims restoration vendors, and loss prevention tips and tools for business owners.

Source : Aviva Press Release

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It was a day of revelations for Eric Galbraith, chief executive of the Bitish Insurance Brokers’ Association. As part of his normal duties at the BIBA Conference and Exhibition, he visited the Sterling Insurance stand and was greeted by their resident fortune teller, Christian Humphrey.

Eric was told he would see further success in BIBA’s campaigning and that he was already getting under the skin of one cabinet minister for ensuring MPs were aware of the cost of current regulation and were adding to the ministerial postbag.

The crystal ball also revealed that BIBA’s FCSC petition would received more than 4,000 signatures.

The fortune teller also predicted a great future for Eric as a jockey and yachtsman with numerous wins on land and sea. He was also told he would still be attending the BIBA Conference at the age of 70 to fund his many adventures.

Eric Galbraith was hosted at the Sterling Insurance stand by David Sweeney, head of commercial and personal lines at Sterling.
BIBA Conference delegates are invited to visit Sterling’s stand at C21 to have your future predicted and to take a look at what Sterling has planned for its future relationships with the broker community.

Source : Sterling Press Release

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Aon officially opened its new Manchester office on Tuesday, 10 May, with a celebration attended by clients, insurers, partners and players and staff from its sponsor partners Manchester United.

Aon have had a base in Manchester for 60 years and moved into the prestigious new offices at 40 Spring Gardens, in the heart of the City Centre, earlier this year, taking two floors and over 17,000 sq ft to house its 150 employees. The new office houses colleagues from both Aon Risk Solutions, the global risk management business, and Aon Hewitt, the global human resources outsourcing and consulting business of Aon Corporation (NYSE: AON).

Manchester United players Rio Ferdinand, Nemanja Vidic and Edwin Van der Sar attended the event, along with Richard Arnold, Commercial Director of Manchester United, and stadium announcer Alan Keegan.

Rob Brown, CEO of Aon Risk Solutions, commented: “We’re delighted to take up residence at our new premises at Spring Gardens, which are in keeping with Aon’s success in supporting businesses in the North West with their risk management needs.  We were proud to host our clients, insurers and partners and given it is a crucial time for them were particularly pleased that our friends from Manchester United were able to join us as we share a desire for excellence and winning, based on tradition, integrity, teamwork and success. The team here at Aon Manchester is looking forward to building on the last 60 years and continuing to serve further the businesses of Manchester”

Source : Aon Press Release

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The US government and AIG announced a plan  Wednesday to sell around $9 billion worth of shares in the bailed-out  insurance giant, speeding the firm back toward private ownership.

The treasury will sell 200 million shares and AIG 100 million shares for a  total of $8.9 billion based on current market value.

The sale will be smaller than some reports had suggested. AIG’s current low  stock price appeared to have played a role. It is currently hovering near  yearly lows at $29.62 a share.

Once the world’s largest insurer, AIG received more than 180 billion  dollars from the government to help cover investments that disappeared amid  the collapse of the US real estate bubble.

It has since sold off units AIA and Metlife to pay of its debt to the US  authorities.

In addition, “AIG intends to use $550 million of the net proceeds from this  offering to fund part of a previously disclosed litigation settlement,” the  firm said in a statement.

It did not disclose what that litigation was.

New York, May 11, 2011 (AFP)

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Standard Life Investments predicts that this year will see a robust profits cycle despite event risks, policy tightening and regulatory headwinds which will periodically worry investors.

Notwithstanding a recent moderation in expectations for future earnings, analysis by the global fund manager of the key drivers suggests 2011 will see profits surprise on the upside, driven by a continuation of corporate pricing power and cost control.

In the latest edition of Global Perspective,Standard Life Investment argues that, from a macro viewpoint, global profits at this juncture of the cycle are more likely to be driven by a trade-off between headline sales growth and cost growth, rather than any one-off write-downs or extraneous factors. With investors’ sensitive to numerous event risks around the world, they will rely on the relative strength of the corporate sector to help convince them that assets that carry a risk premium, such as property, credit and equities, are worth holding in portfolios. At this stage of the recovery, profit growth always slows noticeably after the initial bounce. The question is whether it will slow more than the market currently expects.
Richard Batty, Global Investment Strategist, Standard Life Investments, said:

“While the Q1 2011 profits cycle has been robust, with outcomes ahead of initial expectations, investors are rightly worried about the outlook in view of policy headwinds such as tighter fiscal and monetary policy, plus a harsher regulatory environment. Indeed, expectations for profit growth have been moderating recently.

“The global profits cycle is at an important juncture; the growth rate has peaked but much of the profits recovery was driven by operational leverage, where companies cut costs, notably labour in 2008 and 2009, and then enjoyed a rapid margin expansion as sales recovered in 2009 and 2010. The subsequent huge leap in profits, albeit from a recession induced low base, has turned out to be the most robust on record, leading companies to take a record share of economic output.

“This will not be repeated again in this cycle, so the consensus only expects global profits growth of 16% in 2011. However, our macro-economic model of the profits outlook suggests profits could exceed the current consensus this year. Key assumptions are that sales, driven by decent pricing-power, are likely to be robust and cost control is likely to remain intact even in a number of macro scenarios.

“We have also analysed various scenarios. Our results indicate strict cost control can still drive profits even if the economic recovery moderates. Similarly, if cost control is applied while the economy gently accelerates from here, profits could surprise noticeably on the upside. One longer-term limitation though is the danger firms eventually hollow-out their business and erode their future growth potential. Another risk is the return to recessionary conditions where cost cutting is not quick or sufficient enough to off-set the revenue short fall.”

Source : Standard Life Investments Press Release

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Atkinson Smith, insurance broker in the North of England, and Brit Insurance, the international general insurance and reinsurance group, today announce the launch of an online quote and buy system as part of their self build (new build) and home extension/conversion scheme.

The scheme is underwritten by Brit Insurance and has been available through Atkinson Smith since September 2006 when it acquired DMS Insurance, a long-standing and highly respected provider of quality cover to this niche market. It now offers direct access to retail customers and brokers via www.selfbuildonline.co.uk. edge IPK, a leading provider of User Experience Platforms, has developed the technology solution to offer this product online.

Ian Laycock, Managing Director, at Atkinson Smith, commented:

“With over 15,000 self build projects taking place each year in the UK, we felt there was a great opportunity for us to take advantage of this growing, niche market. As we developed our offering, it became increasingly obvious that an online platform to complement our existing capabilities would provide us with the scope to increase our customer base and offer our customers a superior experience. Brit Insurance shared our views on the online potential of this scheme and we have together worked with edge IPK to develop an integrated online solution targeted at both customers and other brokers who wish to place business via this scheme.”

Vivek Banga, Head of UK Distribution at Brit Insurance, adds:

“The online SME market is a growing area for us and we always look to support our brokers in trading SME business via online channels. This solution is one of a series of online platforms that we are involved in, working with partners such as Atkinson Smith to extend their foothold in to new or growing online markets. Too often, technology is regarded as a costly and complex alternative when it can in fact be an enabler, particularly in delivering a speedier, high quality customer experience.”

The new online service, which is a complete quote and buy solution targeted at both customers and brokers, has been developed by edge IPK through its edgeConnect platform. It provides Atkinson Smith with the ability to increase the volume of quotes provided, while reducing the overall cost of sales and providing a self-service facility for Atkinson Smith staff, retail customers and third party brokers.

“edgeConnect was developed to help large and small organisations alike to achieve swift return on their investment and to provide a technology platform that genuinely supports business objectives, not holds them back,” said Mike Williams, CEO of edge IPK. “Atkinson Smith now has a solution that allows it to market its products online to both customers and other brokers and provide a superior customer service.”

Source : Brit Insurance Press Release

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The tornadoes and thunderstorms that carved  a swathe of destruction through the US southeast in late April left as much as  $5.5 billion in insured damages, catastrophe experts said Monday.

Catastrophe modeling firm AIR Worldwide estimated the cost at $3.7-5.5  billion for the extraordinarily violent storms of April 22-28, which left 354  dead across seven states.

The deadliest tornado outbreak since 1925 destroyed thousands of homes,  including an estimated 5,000 alone in the hard-hit Alabama city of Tuscaloosa.

The disaster saw more than 200 tornado touchdowns, according to AIR,  including two rated EF-5, the strongest tornadoes with winds gusting more than  320 kilometers per hour (200 miles per hour).

“These two — the Smithfield tornado in Mississippi and the Hackleburg  tornado in Alabama — both occurred on April 27, marking the first time in  more than 20 years that two EF-5s occurred on the same day,” AIR’s principal  scientist Tim Doggett.

He said there were also 12 EF-4 tornadoes, some with paths extending more  than 110 kilometers (70 miles).    “In areas of Tuscaloosa affected by the EF-4 tornado, large commercial  structures were reduced to rubble,” Doggett said in a statement.

“Many properties closer to the periphery of the tornado sustained  significant damage to their roofs and openings …. With the building envelope  breached, many sustained subsequent structural damage,” the statement read.

Washington, May 9, 2011 (AFP)

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Insurmark/Floodwatch and Bankers Insurance Service, two divisions of Aon Underwriting Managers, today announced they have combined forces to introduce a holistic insurance solution to financial institutions that own or service mortgage loan portfolios. The divisions will underwrite this product together on behalf of Certain Underwriters at Lloyd’s.

The new product, Global Portfolio Protection Program, offers approximately 8,000 U.S. financial institutions mortgage impairment protection, mortgagee errors and omissions coverage , foreclosed/real estate-owned property and liability insurance, and force-placed hazard and flood insurance in one seamless insurance policy. Combining these coverages on one policy form mitigates the potential for coverage gaps, administrative difficulties and reporting restrictions for financial institutions.

“Given the high level of foreclosures and repossessed properties at financial institutions across the United States, we developed GP3 to provide a one-stop solution to address exposures faced by banks, mortgage banks, insurance companies and any other entity that owns and services mortgage loans,” said Bill Kaplan, president and CEO of Bankers Insurance Service. “GP3 is designed as a package program that simplifies administration and protects an institution’s mortgage portfolio from several causes of loss for the entire life of a loan.”

Those institutions with GP3 in place will receive the benefit of each division’s expertise: Bankers Insurance Service is one of the world’s leading underwriters of mortgage impairment protection and Insurmark is an industry leader in underwriting force-placed hazard and REO property insurance.

Source : Aon Press Release

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From June, British motorists will need to be aware of a new law called Continuous Insurance Enforcement which comes into force making it illegal to own a motor vehicle without valid insurance unless it has been declared off road. Research by moneysupermarket.com shows that over half (56 per cent) of motorists will be more vigilant and shop around to find a better deal on their car insurance, but a worrying one in ten will accept a penalty if necessary.

Continuous Insurance Enforcement (CIE) will mean anyone who is registered as an owner of a vehicle or motorbike, which isn’t registered as SORN (Statutory Off Road Notification), MUST have valid car, van or motorbike insurance for it or face a fixed penalty notice and possible further legal action.1 Britain’s number one comparison site asked users how this new legislation would affect the way they insured their cars. Over half (56 per cent) claimed it would make them more vigilant and encourage them to shop around to find a better deal on their car cover, and a quarter (27 per cent) already make certain they are continuously insured. Worryingly however, nearly a tenth (eight per cent) claimed CIE would simply make them automatically renew with their existing insurer and another ten per cent said it wouldn’t affect how they insured their car as they would just accept the fine if caught without cover.

Peter Harrison, car insurance expert at moneysupermarket.com, said: “Uninsured drivers cost the industry £500 million each year, which as a result adds an average of £30 to every motorist’s premium. Our own research has found a staggering one in six UK motorists has admitted to driving a car uninsured.4 With CIE legislation coming into force next month, this should help drive down the number of uninsured drivers on our roads, a move which can only be applauded. All motorists need to be vigilant though – especially leisure drivers or motorbike enthusiasts who only use their vehicles occasionally and let their insurance lapse in the meantime; they need to declare their vehicle as SORN or renew!

“Additionally, our research shows the legislation will go a long way towards encouraging Brits to shop around at renewal time to find a better deal on their insurance. That said, there are clearly still motorists out there who will just accept a renewal quote out of convenience – a bank-breaking move I would advise against. With insurance premiums rising on average by 44p per day, or by 31 per cent last year,5 shopping around for the best deal is crucial to ensure you aren’t paying over the odds for your car insurance. The average saving on an annual car insurance policy using moneysupermarket.com is £282, so I urge everyone to do their research and not automatically accept their renewal without checking there isn’t a better alternative.”

Source : moneysupermarket.com

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New research from Hiscox reveals that 60% of high net worth homeowners are underestimating the true value of their possessions, leaving them at risk of being underinsured.

The insurer analysed the results of surveys carried out on behalf of their clients over the course of a year. In Hiscox’s experience, many homeowners are surprised when they discover the value of the things they own. Many have not considered the items they have accumulated over the years, items inherited or fluctuations in the value of jewellery, art or antiques.

These findings come as further research carried out for Hiscox by YouGov shows that 67% of high net worth homeowners are confident they know the value of their home and its contents – a confidence likely to be misplaced in light of Hiscox’s own findings.

Andrew Cheney, risk and valuation advisor at Hiscox, comments: “After a while even the special things in your home can seem like part of the furniture. This means that when it comes to estimating the value of your home contents, it can be easy to forget about items that actually hold reasonable value.”

The consequences of being underinsured could mean that in the case of a loss, the payout will not cover the total value of the items lost. Regularly taking stock of contents, getting regular valuations and reviewing insurance policies, mean homeowners can then find the right insurance cover to suit their needs.

Cheney adds: “People spend their money in very different ways: some accumulating art collections, others designer labels and accessories. It is therefore important to consider all items in the home and not just those that are front of mind. Using a check list can help people conduct an accurate self assessment as it prompts them to think about including the easily forgotten items such as the curtains, carpets and bed linen.”

Hiscox has launched a contents calculator iPhone application to help homeowners make a more accurate assessment of their home contents. This could be used to go through the value of possessions.

Hiscox has also put together an underinsurance trigger list to help people think about the value of their possessions:

Price changes: items move in and out of fashion or as demand increases, so do prices. A recent example is the value of jewellery which may have increased due to a rise in the value of gold. Homeowners who have not had their jewellery appraised in the last few years run the risk of being unable to replace a loss at current retail levels

– Accumulation: possessions grow over time. A set of crockery, new mirror, painting, vase, clock, watch or designer handbag – the value of these items really can add up over time

– Upgrading: over the years, belongings are replaced with newer, better models – for example, a modern luxurious sofa replaces the old one or some teak garden furniture replaces the plastic set

– Interests broaden over time: CD and book collections, pottery and works of art all come with a value

– Leisure pursuits widen: golf clubs, sporting apparel, fishing equipment – the list is endless

– Children happen: with them come a whole variety of clothes, accessories and toys

Source : Hiscox Press Release

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Aon Benfield, the global reinsurance intermediary and capital advisor of Aon Corporation, will be highlighting how recent natural hazards – coupled with Solvency II – have fuelled demand for more in-depth evaluation of catastrophe models. At its International Analytics conference next week, the firm is advising how insurers can drill deeper than the loss estimates to understand how models perform and in turn influence decisions on their reinsurance purchases.

The insurance industry has recently witnessed evidence of models both under and over estimating loss estimates.  While it is still too early to review the modeling firms’ performance in the recent earthquake in Japan, the models overestimated the actual incurred loss in last year’s Chile earthquake. This is in contrast to the US hurricane events of the past decade where the catastrophe models have consistently underestimated the actual incurred losses, in some cases by a factor of two or greater. This illustrates the need for insurers to understand as much about uncertainty and the vendors’ assumptions before deciding upon capital reserves and reinsurance levels.

In addition, today’s Solvency II environment means users of model output need to be able to demonstrate a robust understanding of the inner workings of the ‘black box’ models.

Aon Benfield’s dedicated team of model evaluation experts works with insurers to assess the reliability of loss estimations and identify the strongest model for each territory and peril. The team combines natural hazard expertise and previous experience at the vendor firms to deliver the following evaluation process:

1.         Initial overview of the new model loss estimates with a high level review of the model changes

2.         In-depth analysis of the key components: the hazard, vulnerability and financial loss

3.         Benchmarking individual insurers against the industry and advising on reasons behind any deviations

4.         Knowledge sharing with clients to assist with their discussions with regulators and rating agencies.

 

Paul Miller, head of International Catastrophe Management at Aon Benfield Analytics, said: “Model evaluation is a crucial part of ensuring a company is adequately capitalized to meet its catastrophe exposures. Through our understanding of the robustness of each catastrophe model and assessing its uncertainty, insurers are armed with the necessary information to make appropriate adjustments to the models’ output.”

 

Ben Fox of the Model Evaluation team at Aon Benfield Analytics added: “There has long been appetite for more transparent catastrophe models as components remain hidden from the end users. The proposed Solvency II regulation has further driven the need for more transparency as insurers are required to explain why they have chosen a particular model. Until ‘open’ models – such as those from Impact Forecasting – are widely available, evaluation is the only way to drill down into the inner workings of these products. Without this insight, it is impossible to critically evaluate their relative strengths and weaknesses.”

Source : Aon Benfield Press Release

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Munich Re unveiled Monday a sharp first quarter loss owing to major disasters  in the Asia Pacific region, but said it should still make a profit this year.

Munich Re suffered a net loss of 948 million euros ($1.37 billion) in the  three months from January to the end of March, compared with a profit of 485  million euros in the same period a year earlier, a statement said.

Analysts polled by Dow Jones Newswires had forecast an even bigger loss of  arund 1.1 billion euros.

The slump was widely anticipated following earthquake and weather-related  catastrophes in Japan, Australia and New Zealand early this year.

For 2011 as a whole, Munich Re said it expected to turn a profit, without  giving a detailed figure.

The March 11 earthquake and tsunami in Japan forced the German group to  ditch its previous forecast for a net profit of 2.4 billion euros this year.

Frankfurt, May 9, 2011 (AFP)

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Fitch Ratings says in a new report that the Nordic insurance market is becoming increasingly important as a supplement to the welfare state.

“The Nordic countries have long been associated with cradle-to-grave welfare states. However, demand is growing for private provision supplied by the insurance industry. Demand for occupational pensions is growing as a consequence of reductions to state benefits due to ageing populations,” says Bjorn Norrman, analyst in Fitch’s Insurance team. “Private health insurance is also gaining importance, reflecting dissatisfaction with public healthcare.”

Fitch expects consolidation in the fragmented Nordic health insurance market because the main profit driver will be scale. This determines insurers’ bargaining power for cost-effective procurement of health services and cost-efficiency in general, which is crucial in a competitive market.

Nordic insurers look set to be well-capitalised under Solvency II. However, clarification of the definition of contract boundaries which future cash flows to take into account in determining reserves and capital requirements will be crucial for group pension schemes, which account for a large part of the Nordic life insurance market.

“The inclusion or exclusion of expected but non-contractual cash flows, for example in respect of new employees joining a company pension scheme, can make a big difference to the capital position calculated,” says Norrman. “This is because expected profits in future premiums are likely to qualify as Tier 1 capital under Solvency II.”

Fitch’s report “Nordic Insurance – a Growing Supplement to the Welfare State” is available at www.fitchratings.com.

Fitch analysts will be touring the Nordic region in June to present a series of seminars on insurance and banking. Chris Waterman, Managing Director of Fitch’s insurance team, and Federico Faccio, Senior Director and co-author of the report, will speak on the Nordic and European insurance markets. The seminars will take place in Helsinki, Stockholm, Oslo and Copenhagen. To register your interest for an event, please click on the following links:

The Fitch Ratings ‘Viking Tour’ – Helsinki 14th June

The Fitch Ratings ‘Viking Tour’ – Stockholm 15th June

The Fitch Ratings ‘Viking Tour’ – Oslo 16th June

The Fitch Ratings ‘Viking Tour’ – Copenhagen 17th June

Source : Fitch Press Release

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Allianz Commercial has signed an exclusive two-year partnership with The Royal Society for the Prevention of Accidents (RoSPA), as part of its ongoing commitment to promote effective risk management for companies operating vehicle fleets.

Allianz has been working with the charity since 2007 to provide commercial motor fleet customers with access to a range of RoSPA courses and services, which provide guidance on managing occupational road risks at preferential prices.

All of the courses on offer have been enhanced and there are now three additional services available to Allianz Commercial policyholders:

– Eco-Driving – provides advice on how to change driving techniques in order to benefit from savings on fuel, tyres and spares

– Licence Check – allows customers to complete an online process to verify their employees’ driving licences and entitlement to drive a vehicle on company business

– Driver Profiler Managed Service – a cost and time-efficient method of risk assessment, where RoSPA manages the ‘back of house’ administration

By taking the Eco-Driving course, clients will also be able to learn defensive driving techniques such as hazard perception, selective use of gears and utilisation of engine-braking. The course can help businesses to make a positive difference to the environment and reduce costs by making at least 10 percent fuel savings.

Jon Dye, commercial motor manager at Allianz, says: “We are delighted to continue our partnership with RoSPA which has benefited many of our commercial policyholders over the past four years. The courses offered provide our brokers and customers with valuable advice and guidance, which helps them to manage and control risk more effectively.

“In the current economic climate, many businesses will be looking to cut back, but it is important that they do not compromise on safety. By investing in risk management, there are many long-term savings to be made. The new Eco-Driving course is an ideal way for companies to ensure their drivers are cost and energy-efficient, whilst remaining safe on the roads.”

Kevin Clinton, head of road safety for RoSPA, says: “The partnership between Allianz Commercial and RoSPA has been a great success and we are very pleased to continue our work together. Allianz has identified the importance of effective risk management and continues to demonstrate best practice by actively encouraging its broker network and clients to take new approaches to occupational road risks.”

Source : Allianz Press Release

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Today Aviva France announced a one-year partnership with the French National Railway (SNCF).

This innovative service will allow motor insurance clients from Aviva and from Eurofil to benefit from a 30 % discount on transporting their car by train. This service allows travel in less stressful conditions and less tiresome. This service could also lower accident rates on long journeys during weekends and holidays as well as help reduce CO2 emissions.

To benefit from this discount Aviva clients must simply show their insurance certificate to the Railway counters.

Furthermore, those who wish to leave their vehicle at home will receive a preferential rate to rent a car upon arrival.

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The Pensions Regulator has set out in its fifth Corporate plan how it will help employers prepare for automatic enrolment, improve standards in the defined contribution (DC) market, and address funding challenges within different segments of the defined benefit (DB) landscape.

The Corporate and Business plan 2011-14 details the regulator’s continued focus on educating and enabling employers and the pensions sector, and addressing risks to retirement savings and the Pension Protection Fund (PPF).

The regulator’s chair Michael O’Higgins said:
“Automatic enrolment and the expansion of DC pensions mean it’s more important than ever that pension products are designed and run with the best interests of members at their heart. We will be working closely with the industry to support good outcomes for new and existing savers.
“Against a backdrop of budgetary constraints, we will continue to target our resources at the areas of greatest risk to members and the PPF, and to regulate in a transparent and proportionate manner.”
The regulator’s chief executive Bill Galvin said:
“Helping employers to comply with the forthcoming automatic enrolment duties is a top priority. In the next few months we will be publishing education material, including simple, web-based tools, to help employers of different sizes, intermediaries and advisers, prepare for changes in pensions law. Work also continues apace on designing a robust operational framework to maximise compliance with the new duties.”
He added:
“Though the majority of employers will choose to automatically enrol their employees into a DC scheme, DB schemes will remain a major part of the picture – and will be paying out benefits for many decades to come. We will be reviewing our approach to DB regulation to address the challenges within different parts of the landscape going forward.”
Over the period covered by this Corporate plan, the regulator’s actions will include:

– Ensuring employers, intermediaries and advisers have the information needed to understand their new pension duties by publishing a series of guides, as well as simple, web-based tools suitable for smaller employers unfamiliar with pension provision.

– Publishing details of our automatic enrolment strategy which will set out how we aim to maximise compliance with the new employer duties, minimising the administration burden on employers whilst ensuring that they understand that they need to comply.

– Continuing to raise governance standards, working with administrators, auditors and other service providers to improve standards in record-keeping and wind-ups.

– Building on our recent DC discussion paper to ensure that DC schemes are designed to deliver good outcomes for savers.

– Revisiting our strategy on DB funding, including assessing how we will treat the increasing number of closed DB schemes that are maturing rapidly.

– Considering whether different DB segments may require more tailored approaches, standards or guidance.

– Using our resources as efficiently and effectively as possible through closer working with other organisations and regulators.

– Continuing to react effectively to market developments, ensuring we direct our resources in the areas of greatest risk to members, educating and enabling the industry to respond to changes and improve, and reducing the risk of calls on the Pension Protection Fund.

Source :Pension Regulator Press Release

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