World Insurance Report

Late reports 27.9, crash, fatality South Korea: a light aircraft crashed at the site of an international fair packed with thousands of visitors in South Korea, killing one of the two people on board and injuring 11 people on the ground. The aircraft..

Salary budgets in the p/c industry unaffected by the financial crisis

Kaj Ahlmann, former chairman of Employers Re, has joined Deutsche Bank as managing director and global head of strategic business development at Deutsche Insurance Asset Management. Mr Ahlmann will be based in San Francisco and will report to Randy..

Foreign insurers are heavily involved and influential in the Mexican market, having brought new capital and expertise. Among the 72 private insurers in the market no fewer than 61 had majority foreign capital. In March 2009, it was announced that AXA, which had acquired the Mexican insurance operations of Dutch financial services group ING, a year earlier, planned over the next three years to invest US$100mn in the Mexican market in view of its growth potential. But there are a number of challenges. The market is very competitive, among both insurers and brokers. Indeed, the market regulator, the National Commission of Insurance and Bonding (Comision Nacional de Seguros y Fianzas or CNSF) has stated that it does not intend to limit the number of companies authorised to operate in the market. However, at the same time security has become increasingly important for clients. In addition, property insurers, as a result of changes in the way in which the market’s natural catastrophe exposures are calculated, are under pressure to buy much more reinsurance protection. Indeed, three local companies have withdrawn from the property insurance business, including writing catastrophe perils in the Mexican Caribbean, including Cancun, following Hurricane Wilma

The number of motor thefts has risen by 109% in the first six months of 2009

The highly attritional UK motor market doubled overall underwriting losses in 2008

Broker Jardine Lloyd Thompson (JLT) has appointed Anthony Langridge as regional chairman of JLT Asia. Mr Langridge will take up the post from January 4, 2010. JLT said it has identified Asia as having the potential to add significantly to the group...

The market is expected to total between $3-$4bn for 2009, although bonds for half of this figure have yet to be issued

The assistance provided by insurers in the UK to those at risk of flooding is a vital one, demonstrated very clearly in 2007 when they had to deal with over 180,000 claims, equivalent to four years of normal claims totals. 17,000 households were housed in alternative accommodation by insurers. Indeed, Sir Michael Pitt, in his review of the floods, very clearly recognised that industry played a major role in helping the country to recover from the floods. However, Lord Chris Smith, chairman of the Environment Agency, believes that the industry can do more in terms of providing financial incentives (which the government cannot provide) that can help to change the way people respond to the dangers they face. In a recent speech to a London Insurance Institute seminar, Lord Smith noted that in the 18th century, the London insurance industry was able to take the lead in providing incentives for people to reduce their fire risk, by introducing the first building fire codes in the form of fire marks. In this edited extract from that speech, Lord Smith urged the industry to consider taking the same approach, for flood risk in particular, but also for some of the wider challenges we face as a result of climate change. He also called on insurers to rebuild flood-hit properties to more resistant and resilient standards

Reinsurance is about the transfer of risk, not about shifting income from one country to another, the CEA has argued

Henri de Castries will become chairman and chief executive of the new board

An academic said several federal regulatory agencies with authority over AIG were “asleep at the wheel”

Capital tied-up in solvent UK companies in run-off increased by almost £1.0bn

Ever more confident predictions of a global economic recovery in 2010 continued to drive investor sentiment in the broader market and, as the table shows, a great deal of this optimism was very much in evidence over the two weeks ending 15th October..

Swiss Re is sharing the placement of a three-year securitisation for $290mn of hurricane and earthquake risk for the Mexican government. The securitisation is the first in the World Bank’s new Multicat programme; a cat bond issuance platform..

W R Berkley Insurance (Europe) has named Javier Esteban to the newly-created position of Presidente Ejecutivo of its Spanish branch, Sucursal en España. Mr Esteban is the former chief executive officer of the Spanish and Portuguese reinsurance..

UK insurance group Aviva has started trading on the New York Stock Exchange (NYSE). Andrew Moss, group chief executive of Aviva, rang the Opening Bell at the NYSE to mark Aviva’s first day of trading on October 21, 2009. The company has..

Most data security breaches occur because the procedures that so many companies introduce become so cumbersome and restrictive that users find a way around them, according to Mark Fullbrook, UK & Ireland director of information security company, Cyber-Ark. Mr Fullbrook identifies this trend as the common issue in many of the recent highly publicised security breaches. Mr Fullbrook believes that the answer to the problem is to put in place controls that not only provide companies with the highest level of security, but also empower users to get on with their everyday jobs. Here he considers how this balancing act, security versus productivity, which he describes as the cornerstone of any security process, can be achieved

The Mississippi Supreme Court has issued a unanimous decision in Corban v USAA, settling the legal issues surrounding hurricane Katrina claims in Mississippi and confirming that Texas-based USAA handled claims arising from the 2005 hurricane..

The last year has been a difficult one for life insurers in the United Kingdom and Europe, for although they had limited exposure to US subprime mortgagees, the secondary effects have been severe. The economic crisis brings declining demand for life insurance products along with an increasing lapse rate as personal disposable income comes under pressure. Underwriting profits are put under further pressure with poor performing stock markets. New products such as variable annuities remain under pressure because of the decline in assets under management and the increased costs in hedging. Declining asset value along with decreased interest rates have also increased the costs of providing guarantees for “with-profit” business. Here, Catherine Stagg-Macey, a senior analyst in insurance practice of IT research and advisory firm, Celent (a division of the Oliver Wyman Group) considers the drivers in the UK life insurance market that will impact the nature of the market in the future. These include the changing demographics (including the growing ageing population bulge which is likely to force insurers to look at new products and services for this underserved group), the changes that will be brought about by the Financial Services Authority’s Retail Distribution Review including the introduction of professional standards for advisors, commission and fees, and a guided advice process. There is no doubt that the traditional role of the insurer is being challenged and indeed, many insurers are moving into the role of distributor. In this regard, Ms Stagg-Macey comments on the growing importance of the direct channel as a result of the increased willingness of consumes, supported by changes to regulation, to buy online.

The company’s net result was heavily impacted by the financial crisis in 2008. The impact, however, was greatly accentuated by Partner Re’s decision to adopt more transparent accounting rules which meant that unrealised net investment losses or gains on equities and fixed maturities are now recorded directly in the net income statement rather than in shareholders’ funds. Indeed, of the $531.0mn in investment losses suffered by the company in 2008, well over half (around $296.0mn) were unrealised losses which previously would have been discreetly posted to shareholders’ funds. The 93.5% reduction in the company’s bottom line result was also due to natural catastrophe losses. The latter was almost entirely the result of the damage caused by Hurricane Ike as it swept through the Caribbean, the Gulf of Mexico and the US