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Aviva has today added pet insurance to its range of direct insurances, offering three levels of cover and protection.

The new pet insurance policy offers the six million dog owners and nine million cat owners in the UK security for the health of their pet. It is available with three levels of cover; Silver, Gold and Platinum, so that owners can find the right policy to suit their needs.

Within the group of policies, the following scenarios are covered:

  • Veterinary fees
  • Third party liability
  • Cremation/burial costs
  • Behavioural problems
  • Overseas travel protection
  • Death from illness or accident (Gold and Platinum covers only).

All policies also provide support helplines to assist with; 24-hour bereavement counselling, 24-hour pet legal advice and healthcare away from home. Additionally, policy holders can access a pet minder service, enabling them to locate a nationally registered Dog Minder who can look after their dog for a few hours or even a few weeks if they go away.

The Silver policy offers cover against:

  • Veterinary fees
  • Pets taken ill abroad
  • Third party liability
  • Cremation/burial costs
  • Behavioural problems.

In addition to the Silver cover, the Gold policy offers:

  • The cost to recover stolen or straying pets – including local advertising and the cost of a suitable reward
  • Kennel fees should the policy holder be hospitalised
  • £1,000 holiday cancellation should they have to cancel or cut short a holiday due to a pet-related illness
  • Death from illness or accident.

The Platinum policy is Aviva’s premium pet insurance policy, which provides increased limits to those of the Gold policy for death from illness, death from accident, recovery costs and theft. In addition, there are increased limits for cancellation and veterinary fees:

  • Up to £2,000 for holiday cancellation
  • Up to £6,500 per year on veterinary fees.

Wayne Ewing, marketing and product manager at Aviva, comments: “If your pet were to fall ill you would naturally want to make sure they had the right care to help get them back to their old self but veterinary bills can run into hundreds of pounds and given the current economic climate no one wants to face a large unexpected bill. Having pet insurance gives you peace of mind so that you know that you – and your pet – are protected.

“Aviva’s pet insurance policy, offers three different levels of cover – Silver, Gold and Platinum to enable you to choose the level of insurance cover that is right for your pet and your purse.”

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Hiscox Ltd, the international specialist insurer, today issues its Interim Management Statement for the first nine months of the year to 30 September v2009.

The Group continues to thrive with good growth. Overall year to date premium income was up 31.7% to £1,212.2 million (2008: £920.1 million). At constant exchange rates year on year growth was 10.5%.

Robert Hiscox, Chairman, commented:

“Hiscox is in good health.  We have continued to benefit from solid investment decisions and have maintained growth in our most profitable underwriting lines.  Rates are stable and still very healthy in most areas, particularly reinsurance which accounts for over a third of our business. Our mix of business is designed for these market conditions.”

To read the full interim result click here

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At 1.30pm GMT today, British sailing duo Dee Caffari and Brian Thompson made a strong start to the 4,800 mile Transat Jacques Vabre race from Le Havre, France to Costa Rica onboard the Open 60 yacht Aviva.

This is the last competitive race in the IMOCA calendar, and brings together some of the rivals from the epic Vendée Globe round the world race which saw Caffari finish sixth out of 30 starters to become the first woman to sail solo, non-stop, both ways around the world.

Before departing Le Havre Caffari said: “It’s great to be back competing against several of the skippers that took part in Vendée Globe – with so many experienced sailors and high speed boats this is guaranteed to be an exciting race both to follow and participate in. I’m really looking forward to sailing with Brian as co-skipper – we’re determined to put in a good show for the British!”

Brian Thompson added: “We’ve been pushing ourselves pretty hard these last few weeks and now it’s time to put the training into practice. We’re looking forward to pushing Aviva to the limit and being as competitive as we can within such a strong fleet. The thought of the sunnier climes of Costa Rica waiting for us at the finish is definitely something to look forward to as well!”

Joining Caffari, Thompson and Aviva on the start line, were 13 other Open 60 racing yachts of which three are British. It is the first time Caffari and Thompson have sailed two-handed together, having been rivals throughout the 2008/09 edition of the Vendée Globe.

The Transat Jacques Vabre has twenty entries in total assembled from two different sailing classes – the Imoca Open 60 monohulls and the Open 50 multihulls. Previous editions of the race have concluded in either Brazil or Columbia with Costa Rica added for the first time this year. The new route will take the fleet across the Caribbean Sea, requiring both tactics and the ability to adapt to changing weather conditions, with the possibility of a light wind finish in the Western Caribbean Sea or even the tail end of a late season hurricane.

Aviva has supported Caffari since 2005 and announced a new partnership with Caffari last month as the racing team’s founding partner. Dee is now actively searching for a new title sponsor to support her 2012 Vendée Globe campaign.

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An estimated £1.5 trillion will be added to the national debt as a result of the financial crisis, the Office of National Statistics (ONS) has said.

The figure – which is the economic output of the entire country in a year – is down to the public balance sheet picking up the liabilities created by bailing out the Royal Bank of Scotland and Lloyds Banking Group.

The financial sector has also benefited from a total of £330 billion in guarantees being taken onto the public debt as of the end of September, the ONS added.

Added to the latest Treasury figures – which forecast UK debt of £792 billion for the current financial year, the sum would take the UK’s national debt to a whopping £2.3 trillion.

It is also at the upper end of the range put forward by the ONS when it made its initial estimate of the impact of the crisis on the public accounts in February.

The liabilities of the bail-outs have been added for classification purposes, but taxpayers are not on the hook for the whole amount.

This would mean every loan held by a bailed-out or fully-nationalised bank such as Northern Rock had turned sour, while sales back to the private sector would eventually reduce the public sector’s exposure.

But the measures taken so far added an extra £4.7 billion to net borrowing in 2008 and a further £3.3 billion in the first three quarters of 2009 – mainly from the extra money the Government needed to finance its intervention.

In April Chancellor Alistair Darling said he expected losses of up to £50 billion to the taxpayer on moves to prop up the banks – although he now expects to revise this figure lower in the forthcoming Pre-Budget statement.

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The term “total disability” means that the consumer has to be totally unable to carry out their occupation, before benefits can be paid under their income protection policy. This is also sometimes referred to as “total incapacity”.

We take the view that the words “total” or “totally” are a very strict test in this context. This means the focus of our investigation in a case like this is on whether the consumer is totally unable to carry out the essential or substantial duties of their occupation – not on whether they are totally unable to carry out all the duties required by their occupation.

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Royal Bank of Scotland reported on Friday a net quarterly loss of 1.8 billion pounds (2.0 billion euros, 3.0 billion dollars) and said it expected a slow recovery, despite massive state support.

The announcement comes just days after the British government increased its stake in RBS to 84 percent, having decided to pump billions more pounds into the bank, making the rescue the world’s biggest bank bailout.

The net loss during the three months to September 30 compared with profit after tax of 871 million pounds during the third quarter of 2008.

Bad debts stood at 3.279 billion pounds in the July-September period.

Looking ahead, RBS chief executive Stephen Hester said that the bank’s recovery would be slow, closely mirroring the global economy’s return to strength after recession.

“Economic recovery is likely to be slow and the pain of economic adjustment will take years to subside. Our business will reflect these issues,” said Hester.

RBS meanwhile reported a third-quarter operating net loss of 1.525 billion pounds.

Royal Bank of Scotland has been ravaged by the credit crunch and the 2007 takeover of Dutch group ABN Amro at the top of the market.

The troubles at RBS have meanwhile led to a boardroom shake-up with Hester replacing disgraced former chief executive Fred Goodwin, who last year led the bank to Britain’s biggest annual corporate loss of more than 24 billion pounds.

Earlier this week, the British government said it would force RBS and another state-rescued bank, Lloyds Banking Group, to sell assets in a massive shake-up for Britain’s banking sector.

The state also agreed to pump an extra 25.5 billion pounds into RBS, which in turn said it would place 282 billion pounds of high-risk debts into the government’s toxic-asset insurance scheme.

As a result of the move, the state’s economic interest in RBS is climbing to 84 percent from 70 percent.

Britain expects new banks to be born as a result of the break-ups which are the result of pressure from EU competition authorities.

The parts being separated from the parent groups add up to about 10 percent of Britain’s troubled retail banking market, which Tuesday suffered further casualties as global giant HSBC said it was axing 1,700 posts.

In return for more state aid, Lloyds and RBS will have to cut bonuses paid to top staff and increase lending to businesses and individuals in recession-hit Britain.

Lloyds meanwhile said it would launch a record 13.5-billion-pound rights issue, representing the biggest-ever sale in Britain of new shares to existing shareholders.

The week’s announcements come soon after the European Commission approved the state aid used in plans to break up and sell Britain’s nationalised bank Northern Rock.

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Bulk annuity market bounces back to life, Q3 sees first rise in over a year, with both value and volume up signficantly. The outlook is positive with “several large” deals in the pipeline.

The insured bulk annuity market for defined benefit (DB) pension schemes is showing signs of a sustainable revival, following four quarters of decline.  The third quarter of 2009 saw the first growth for more than a year, with the value of deals growing 58%, according to research from Aon Consulting.

Aon Consulting’s Q3 bulk annuity survey is based on information provided by leading insurers. Its key findings are:

  • Value of business placed in Q3 2009 rose 58% to £958m, compared to £607m in Q2;
  • Average value per scheme placed up from £15 million to approximately £20 million ;
  • Number of cases placed up 20% to 48, compared to 40 in the previous quarter;
  • Number of quotations provided – an indication of potential future business levels – up, with 303 cases quoted in Q3 compared to 275 in Q2. The total value of schemes quoted up to £31 billion from £24 billion;
  • The market remains competitive, with eight insurers writing business in the quarter;
  • The largest case in the public domain during Q3 2009 was the buyin of a proportion of the MNOPF (Merchant Navy Officers Pension Fund) at £500m – the largest deal this year.

Commenting on the latest data and market outlook, Paul Belok, principal & actuary at Aon Consulting, said: “There are signs that greater stability in the investment markets is encouraging pension schemes to re-examine the bulk annuity market.  Pricing remains attractive relative to scheme funding assumptions, particularly for pensioners.  This means that longevity and investment risks can often be removed for this group through annuity purchase without the need for additional funding from the employer.

“The MNOPF case is one of only a handful of deals over £100m that have transacted this year, compared to 16 in 2008 (two of which exceeded £1bn) but indications are that there are several large deals in the pipeline, some of which may well conclude before the end of the year.

“As schemes increasingly focus on developing de-risking road maps, we anticipate that the bulk annuity market will continue to be a major part of the armoury that will be used.  Ultimately, full buyout is likely to be the goal of many schemes, and approaching this on a phased basis will make sense for many – the trick is to ensure that the scheme is monitoring the market to optimise timing, and that pre-planning is carried out so that the transaction can proceed efficiently when the time is right.

“In a related area, Q3 has also seen the first transactions of longevity swaps by pension schemes, and going forward we expect there to be further interest in this market, particularly from larger schemes.”

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Points on a driver’s licence and even prison could be the consequence of a failure to remember the Highway Code.

An alarming number of Britons are putting their car insurance at risk through their ignorance of road signs, it has been revealed.

Research conducted by a leading price comparison website showed 65 per cent of motorists were unable to correctly identify the sign for ‘no vehicles’, while 62 per cent were incapable of recognising the marker for a zone with a minimum speed limit of 30mph.

Meanwhile, just three per cent of those questioned were able to identify five rules set out in the Highway Code.

According to a spokesperson for the website, the survey highlights a worrying lack of awareness of the rules of the road which could have implications for cheap car insurance.

“Motorists are required by law to be able to recognise and adhere to the rules of the Highway Code,” he commented.

“Any motorist found to be flouting the rules could be fined, given penalty points on their licence – or worse still, disqualified from driving altogether and sent to prison.”

Other results of the survey include the fact that 23 per cent of motorists do not consider pedestrians to be their main priority when reversing into a side road, and that many drivers are unsure of the correct procedure when it comes to making a u-turn.

Just 23 per cent correctly said their first course of action should be to signal so that other drivers can slow down, with nine per cent saying their immediate reaction would be to give “arm signals” and 23 per cent choosing to look over their shoulder.

“It is all well and good learning the ins and outs of the Highway Code in order to pass the standard theory test, but the real test is the ability to recognise the meaning of the rules for years to come,” the spokesperson concluded.

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Willis Group Holdings, the global insurance broker, today announced plans to expand its successful Willis Commercial Network business model for serving independent brokers from its base in the UK to countries around the world.

To oversee the expansion, Willis has appointed Mark Radburn CEO, Willis Networks International. Radburn, who has developed and led Willis Networks for seven years, will report to Sarah Turvill, CEO, Willis International. Phil Scarrett, currently Managing Director of Willis UK & Ireland’s Commercial business, will succeed Radburn as Managing Director, Willis Networks, in the UK, and will continue to report to Brendan McManus, CEO, Willis UK & Ireland.

Willis Networks was established in the UK in 1999 and is comprised of the Willis Commercial Network, representing more than 81 regional brokers who place in excess of GBP 350 million in premium; and Willis N2, which represents 21 smaller, community brokers who place around GBP 50 million in premium. Members of Willis Networks receive technical and sales training from Willis, as well as strategic marketing, compliance, business development and sales support, along with access to Willis’ global placement and industry resources.

Commenting on the appointments, McManus said, “The key to the success of Willis Networks has been the independence of its members and their access to our strong trading relationships with leading insurers, cutting-edge technology and business support and training services. We believe that the name we have created for our Networks in the UK will resonate in other markets around the world and have appointed Mark to lead the initial charge into Europe and Latin America. The UK networks remain the jewel in our crown and Phil’s experience will help us reach our goals of growing the Willis Commercial Network to 100 members and Willis N2 to 120 members by 2011.”

Radburn has 30 years of insurance brokerage experience. He joined Willis from JLT in 1996 as Sales & Marketing Director for the Willis UK & Ireland central region. He was instrumental in formulating the Willis Commercial Network strategy and was appointed Managing Director in 2002. Since then, Radburn has built Willis Networks into the leading partnership of its kind in the UK. He is also the Chairman of the Faculty of Insurance Broking, part of the UK’s Chartered Insurance Institute. He sitson the Board of Polaris, a company owned and controlled by the UK insurance industry that focuses on streamlining insurance transactions. Mark has a Masters Degree in Strategic Marketing and is an Associate of the Chartered Insurance Institute.

Scarrett started at Willis in May 2008 as Managing Director of the UK and Ireland Commercial division. He joined from Norwich Union where he held various roles in their Intermediary Business, the most recent being Director of Trading for Regional Brokers (North) and then Director of Trading for its National Broker business. Scarrett brings a wealth of experience in developing broker relationships to the role. He is a Fellow of the Chartered Insurance Institute.

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A recovery in the property market has been forecast to take place next year, although anyone hoping to boost the price of their home at present might want to consider home improvements.

Jane Marr, company director at the Little House Company, said the property market presently lacks volume, as there are not many people looking to move.

However, she noted: “Once the numbers of people start coming back to the UK housing market, house prices may stay the same or even drop a little as more properties become available.”

Homeowners considering altering their property to increase its value should remember to contact their home insurance provider prior to carrying out any work.

According to this month’s report by Hometrack, UK house prices increased by 0.2 per cent in October 2009, but are still down by 4.2 per cent compared to October 2008.

However, this is the third consecutive monthly rise and an average of 92.9 per cent of the asking price was achieved in October 2009, compared to a recent low of 88.3 per cent in February this year.

Britons contemplating making improvements to their house might like to consider home insurance.

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A.M. Best Co. has affirmed the financial strength ratings (FSRs) of A (Excellent) and issuer credit ratings (ICRs) of “a” of Hiscox Insurance Company (Bermuda) Limited (Hiscox Bermuda), Hiscox Insurance Company Limited (Hisco) (United Kingdom), Hiscox Insurance Company (Guernsey) Limited (Hiscox Guernsey) and Hiscox Insurance Company Inc. (Hiscox US), all operating companies of Hiscox Ltd (Bermuda). The outlook for all ratings remains stable.

In A.M. Best’s opinion, the Hiscox operating entities continue to benefit from the excellent consolidated risk-adjusted capitalisation of the group’s ultimate holding company, Hiscox Ltd. In addition, each operating company has a strong business profile in its respective market, which is enhanced by its membership of the Hiscox group.

A.M. Best expects Hiscox Bermuda to maintain excellent stand-alone risk-adjusted capitalisation, supported by strong financial performance and factoring the likely payment of a significant dividend at year-end 2009. The ratings also reflect A.M. Best’s expectation that the correlation between the reinsurance business written by Hiscox Bermuda and that written by other group companies, particularly Lloyd’s Syndicate 33, will remain strong. This business, together with business ceded from Hisco and Hiscox Guernsey, continues to provide the company with a well established and geographically diverse portfolio.

The ratings of Hiscox Guernsey continue to reflect the explicit support of Hiscox Bermuda, which reinsures substantially all of its gross premiums written in 2009. In addition, the company has an excellent business profile as a specialist underwriter of fine art and kidnap and ransom business.

Hisco is likely to maintain excellent stand-alone risk-adjusted capitalisation in 2009, supported by robust retained earnings. The company’s technical performance is expected to deteriorate in 2009 due to adverse claims experience for its European business. Nevertheless, strong improvement in investment performance is likely to support a modest increase in Hisco’s pre-tax profit from GBP 18.2 million in 2008. The ratings also factor the benefit of reinsurance support from Hiscox Bermuda.

A.M. Best expects Hiscox US to maintain excellent standalone risk-adjusted capitalisation in 2009. In addition, the company’s ratings reflect reinsurance support provided by Hiscox Bermuda and its strategic importance to the Hiscox group in providing access to the U.S. admitted market.

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Dutch insurer Delta Lloyd’s initial public offering priced at 16 euros per share – at the lower end of an indicated range — and was “comfortably oversubscribed,” the group said on Tuesday.

“The IPO was comfortably oversubscribed at the offer price notwithstanding the volatile market backdrop,” Delta Lloyd said in a statement.

Aviva will receive the net proceeds of the IPO, which are about 995 million euros (899 million pounds) based on a minimum 2.5 percent of IPO fees, and excluding a potential over-allotment option of 6.35 million shares.

A source close to the deal had told Reuters the IPO priced at the low end of the range, which was set between 15.50 and 19 euros, due to the decline in financial stocks in the last two weeks.

The DJ European Insurers index .SXIP has dropped 10 percent since October 19, partly because breakup fears for state-aided banks has hit financial shares and due to general concerns stocks may have rallied ahead of the recovery.

Last month, UK insurer and majority shareholder Aviva, which wants to free up capital and potentially make acquisitions, said it wanted to sell up to 42 percent of existing Delta Lloyd shares.

Delta Lloyd shares, which will have a market capitalisation of about 2.65 billion euros, are set to begin trading on the Amsterdam exchange at 0800 GMT.

The offering, consisting of 63.5 million shares and totalling 1.02 billion euros, is Western Europe’s biggest this year and the second-largest for the whole of Europe, after that of Polish utility PGE, which was worth $2.1 billion (1.28 billion pounds) .

About 10 percent of the shares were allocated to retail investors in the Netherlands, while the remainder was allocated to Dutch and international institutional investors, Delta Lloyd said.

With Reuters

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In a significant development to its members’ education offering, AXA is launching Pensions TV – a new online video programme designed to engage younger employees with their corporate pension arrangement.

Recent research by the National Association of Pensions Funds* found that pensions are the benefit employers feel most constrained talking about, despite the fact that it is often the most valuable employee benefit an employer will offer.  Pensions TV is designed to overcome this barrier, particularly with younger members of the workforce who often experience ‘pension inertia’, to help them plan a successful retirement strategy.

Pensions TV complements AXA’s existing bespoke member education programme, which already includes literature, face-to-face seminars and electronic support. The concept is presented in four online programmes, each designed to appeal to an individual’s financial attitude which have been identified through AXA’s research into behavioural finance.

These include people who are:

  • Living for now
  • Savers
  • Have other priorities
  • Regret not starting earlier

The programmes follow three employees who demonstrate these varying approaches to retirement planning in real situations, with a storyline that continues throughout each episode. They aim to help young professionals feel affinity with the characters and identify their own retirement planning short comings, encouraging them to take action.

The multi-media programme will be supported by an intranet site, HTML emails and a teaser poster campaign.

Mark Rowlands, Head of Consultant Relations at AXA, commented: ”AXA meets a lot of employees through our work place marketing support programme and it’s clear that a number of individuals struggle to engage with their pension arrangement, as they’re focusing on the here and now. Our research and experience of behavioural finance and emotional engagement has helped us to develop Pensions TV, giving employers a tool that allows them to communicate effectively with their employees about pensions.”

“We’ve designed Pensions TV as a way of illustrating the long-term impact of not taking an active role in your retirement planning to help everyone, but especially young professionals, understand the need to take control of their pension provision sooner rather than later.”

*NAPF Calls on government to make it easier for employers to talk about pensions – press release.

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Following months of lobbying, the British Insurance Brokers’ Association (BIBA) has received confirmation from the Financial Services Authority (FSA) that a review of the financial services compensation scheme (FSCS) will be carried out.

The review, which was confirmed following a meeting last week between BIBA and the FSA, is the result of ongoing lobbying from BIBA, who challenged that the broker funding and fees for the FSCS are unfair and do not properly reflect the low risk nature of general insurance intermediation.

Eric Galbraith, BIBA Chief Executive, said: “I am delighted that a review has been confirmed.  We have been calling for changes to the funding of the FSCS and the way in which costs are allocated to various classes of regulated activity.  It is madness that brokers are potentially expected to fund compensation in the event of big banking failures such as Bradford and Bingley and I hope that this review will address this important issue.”

Steve White, BIBA Head of Compliance and Training, added: “We are unsure of the timescale of the review but this is a huge step in the right direction to protect our members. I will be inputting as much as possible into the review to ensure that the low risk nature of members’ business is fully represented.”

The FSA confirmed that the review would include the funding model – the composition of classes and sub-classes, the annual thresholds each class can be asked to pay, the allocation of levies among different types of firms, and the limits that apply to different types of FSCS levy. They will also look at the method of apportionment of levies to individual firms, including considering the case for risk based levies, and the treatment of both new entrants to the industry and those firms leaving the industry.

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AXA Insurance has been voted the Insurer of Choice for its vehicle claims management at the Auto Body Professionals (ABP) Club annual ‘Night of Knights’ awards ceremony.

AXA’s vehicle claims management department has implemented a range of processes for interacting with its approved repairer network for motor damage claims to make the whole repair process much more efficient for repairers, customers and AXA.

Working in partnership with repairers, the AXA process allows them to select the most appropriate, safe and cost effective repair method to produce a quality repair and then to complete the required work without the need for inspection by a motor engineer. Repairers can then return the vehicle to the customer much faster, resulting in higher levels of customer satisfaction, a positive experience of the AXA brand, lower average repair costs and the removal of process duplication to drive out unnecessary operating expenses for both AXA and the repairer.

Repairers are rewarded against a balanced KPI scorecard covering a range of customer service and repair cost metrics which AXA proactively helps them to achieve through regular contact with and support from AXA’s regional network managers.

AXA has also been one of the insurance industry’s leading supporters of the BSI Vehicle Repair Standards Kitemark accreditation scheme and has been working with its repair network to support them in attaining this quality assurance standard.

Ian Newell, Head of Vehicle Claims Management at AXA, said: “We are absolutely delighted to have won this award. We have worked in close partnership with our repair network to develop an operating model that is efficient and effective for the repairers, AXA and our customers. It is great to get our model endorsed by industry experts such as the ABP members.”

The Auto Body Professionals Club (ABP Club) was formed in September 2004 with the primary objective to promote the repair industry sector. They currently have around 1,250 members representing all sectors of the motor vehicle repair industry, including vehicle repairers, vehicle manufacturers, motor industry suppliers and insurance companies.

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    Part-nationalised lender Royal Bank of Scotland said it aims to stick with its recovery plan despite potential large-scale disposals ordered by European Union anti-trust regulators.

    “It remains RBS’s goal that any required divestments do not threaten its recovery plan which is already under way,” the bank said in a brief statement on Monday.

    RBS is expected to be told this week to sell its prized insurance arm — including top brands Direct Line and Churchill — to win EU approval for state aid it has received since coming close to collapse last year.

    RBS said talks between EU officials and the British government were in their final stages, and acknowledged that the final deal would include “some divestments not initially contemplated.”

    RBS also said it was close to a deal with the government over its participation in a costly taxpayer-funded scheme to insure it against credit losses.

    A final deal on both the insurance scheme and the EU state aid investigation will be announced no later than Friday, RBS said.

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      International ratings agency Moody’s said on Wednesday it had downgraded ratings on the insurance business that Dutch group ING intends to split off under restructuring required by EU authorities.

      Moody’s also said it would keep the entire group, and also the banking activities, under surveillance with a view possibly to downgrading the long-term ratings.

      ING is to split its insurance and banking activities under radical restructuring arising from EU conditions for allowing Dutch state aid.

      Moody’s noted that the insurance business would not now be backed by support from the banking division.

      In addition, the stand-alone insurance business would be less diversified geographically than when it was part of the whole group.

      The agency downgraded the notation on insurance activities in the United States to A2 from A1, and the notation on senior debt for the insurance side to Baa1 from A2.

      Moody’s said: “The current lower rating reflects the standalone credit profile of the insurance holding company — excluding Group support — and the
      more limited geographical diversification of the insurance group that is likely to result from the disposal of some operations.”

      On Monday, ING announced that it would eventually sell its insurance business and issue shares to raise 7.5 billion euros to repay state aid.

      This deep restructuring, amounting to separation of the banking and insurance businesses, arisis from proposals put to European Union competition authorities and will be enacted by the end of 2013.

      The group also said that it had reached agreement with the Dutch government on an early repayment of part of the support capital provided in October 2008 and January this year. To finance this, it will raise new capital through a share issue.

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      From 4 to 7 October, Rome hosted the 30th biennial congress of the International Association of Agricultural Production Insurers (Association Internationale des Assureurs de la Production Agricole or AIAG ).

      At the congress, Munich Re Agro accentuated a number of important points and generated new impetus to move forward with the worldwide discussion regarding public-private partnerships (PPP) for crop insurance systems.

      Munich Re Agro took the opportunity offered by the congress to present the SystemAgro crop insurance system, which functions within the framework of a public-private partnership (PPP), and to explain clearly why SystemAgro is the system of the future.

      SystemAgro creates a basis for offering all farmers affordable multi-peril crop insurance and reliable protection in the event of catastrophe. This depends particularly on the collaboration of the state government, which subsidises premiums and, in the event of a catastrophe, pays part of the insured losses. The infrastructure of existing crop insurers is used to implement the system on a broad scale. As stated in the presentation, “Only shoulder to shoulder with the government is the insurance industry able to offer multi-peril crop insurance that sustainably covers the increasing severity of climatic oscillations and thus offer farmers a stable financial basis”. To develop this concept, Munich Re analysed all the sustainable crop insurance systems around the world and is consequently able to produce a customised SystemAgro solution for each and every country.

      The congress participants were in agreement that worldwide awareness of the need for public-private partnerships in crop insurance will significantly increase in the future.

      The AIAG was founded in Zurich in 1951 with the aim of providing insurers in the agricultural sector with a platform for exchanging opinions, experience and statistics relating to the insurance of hail and other natural hazards. Munich Re has been active in the AIAG for more than two decades. Participants in the congress also included influential organisations with close ties to national governments.

      Munich Re will present SystemAgro again at the Global Forum for Food and Agriculture (GFFA) in Berlin on 16 January 2010.

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        The projected rise in the UK’s population will exacerbate the nation’s long-term pensions crisis, with the likely outcome being substantial tax rises just to sustain current basic pension levels, according to Aon Consulting, the leading employee risk and benefits management firm.

        The Office for National Statistics (ONS) has estimated that the UK population will rise from 61m to 71.6m by 2033 if current growth trends continue*. Based on their assumptions, Aon has calculated the impact on the ability of the state to provide a basic state pension.

        Marcus Hurd, head of corporate solutions at Aon Consulting, said: “State pensions are like pyramid insurance: you need to keep feeding the bottom to fund those retiring at the top.  Increases in population ease the burden only if there are more people paying tax to fund those currently retiring, but the problem is only being stored up for the future.  Under the state pension system, current tax payers are not really contributing to their retirement income at all, they are merely paying for their parents and grandparents.

        “According to the ONS figures, the number of pensioners will rise by 32% to 15.6m by 2033, which implies that the amount paid in pensions will also have to rise by 32% to keep the level of existing pensions the same.

        “There is some mercy because the ratio of taxpayers to pensioners falls from 3.2 taxpayers for every pensioner to 2.8, hence the net increase in the burden per taxpayer is 14%. In order to restore the ratio back to the current level, then the country would need to defer the retirement of some1.5m pensioners by 2033, which would require adding at least 2 years to the state pension age.

        “In other words, the total state pension bill would have to rise by 32% and the total bill for each individual would have to rise by 14% to maintain the same level of benefits. Another equally unpalatable option is to reduce the UK state pension, already the worst in Europe**, by 14%.”

        *Source: national population projections, Office for National Statistics, 21 October 2009: http://www.statistics.gov.uk/cci/nugget.asp?id=1352

        **According to the most recent Aon Consulting European Pensions Barometer (2007). For more information: http://aon.mediaroom.com/index.php?s=43&item=104

        0 0

        Aviva today announces the appointment of Patrick Regan as chief financial officer (CFO). Patrick will join Aviva during February 2010 and will become a member of the group board.

        Patrick is currently group chief operating officer and chief financial officer of Willis Group Holdings (“Willis”), the global insurance broker. Patrick joined Willis as CFO in 2006 and took on the additional responsibilities of COO last year.  He recently established Willis Capital Markets & Advisory and is chairman of that business.

        Patrick has deep experience of the financial services sector gained in both the UK and USA over 21 years. His previous roles include group financial controller at RSA and finance & claims director, UK general insurance for AXA.  He has also held senior finance roles at GE and specialised in corporate finance and investigations at Grant Thornton.

        Andrew Moss, group chief executive commented: “I’m delighted that Pat will be joining my executive team.  He has a deep understanding of the insurance business and a track record of leading change to improve financial performance and reporting. He brings a global perspective and a disciplined and highly strategic approach.  These are key qualities as we seek to realise Aviva’s full potential and establish ourselves as a global group.”

        Patrick Regan said: “I’m very excited to be joining Aviva at this key point in the group’s development as a global company. Aviva is a great company which has significant future potential. I’ve been very impressed by both the quality of the organisation and the people that I have met during this process, and I very much look forward to working with Andrew and his team.”

        Patrick will succeed Philip Scott who steps down as executive director and chief financial officer of Aviva at the end of 2009, after a career spanning 36 years with the group.

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