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Plumeri asks Willis staff to take unpaid leave: "Willis chief executive Joe Plumeri has offered staff cash incentives to cut their working hours in a bid to trim costs, Reinsurance can reveal.
According to sources inside the company, Plumeri told staff at The Willis Building that he was looking for volunteers to work four-day weeks for less pay. It is understood that an internal email had gone round Willis employees in February informing them of the same thing.
After a less-than-lukewarm response from Willis staff initially, Plumeri has now offered staff cash incentives in return for blocks of unpaid leave. Reinsurance understands that one of the ideas is that staff taking a month's sabbatical can earn 30% of the salary for that period.
A number of market sources told Reinsurance that Willis' move may hurt the broker in the long run with regards to account serving, but there is a general agreement amongst London Market brokers and underwriters contacted by Reinsurance that Willis' move may safeguard jobs - even if it is only for the short term.
'Having a month's sabbatical on 30% salary is better than having a permanent sabbatical on zero salary,' one broker said.
When contacted by Reinsurance about the story, Willis said: 'We are offering our associates the option to take some unpaid leave, and/or partly paid sabbaticals. This fits with our policy of moving toward more flexible working and benefit structures. It also gives us another tool that allows us to manage our costs as we, like all other professional services firms, navigate these times of economic turmoil and uncertainty. This scheme is not compulsory, and is managed completely in conjunction with the team leaders to ensure client service is never compromised. It has been extremely well received by our associates.'"
For Source and Full Article Visit: Reinsurance
18 March 2009
NAPSLO encouraged by planned reintroduction of NRRA in U.S. Senate
NAPSLO encouraged by planned reintroduction of NRRA in Senate: "NAPSLO officials said they are encouraged by the planned early reintroduction of the Nonadmitted and Reinsurance Reform Act of 2009 in the Senate and hope that the bill will be approved by the 111th Congress.
Senators Evan Bayh (D-IN) and Mel Martinez (R-FL), members of the Senate Committee on Banking, Housing and Urban Affairs, announced today that they will introduce a version of the Nonadmitted and Reinsurance Reform Act (NRRA) of 2009.
'We are thrilled to have garnered the leadership of Senator Bayh, a senior Democratic member of the Senate Banking Committee, to help lead the effort on surplus lines reform this year along with the continued excellent leadership of Senator Martinez,' said Maria Berthoud of B&D Consulting, who represents NAPSLO in Washington, D.C.
'The new leadership of Senator Bayh shows the momentum the NRRA has this year. With the leadership of Senators Bayh and Martinez, we are optimistic about the bill's chances for passage.' said NAPSLO President John Wood. “This bill was approved unanimously by the House of Representatives the past two sessions and the early introduction in the Senate offers encouragement that the bill will be approved by the 111th Congress and signed into law.”
The Nonadmitted and Reinsurance Reform Act (NRRA) measure is aimed specifically at streamlining and reducing barriers in state regulation of surplus lines insurance and reinsurance. It would create a uniform system, while preserving the role of the state regulator."
For Source and Full Article Visit: NAPSLO BLOG
Senators Evan Bayh (D-IN) and Mel Martinez (R-FL), members of the Senate Committee on Banking, Housing and Urban Affairs, announced today that they will introduce a version of the Nonadmitted and Reinsurance Reform Act (NRRA) of 2009.
'We are thrilled to have garnered the leadership of Senator Bayh, a senior Democratic member of the Senate Banking Committee, to help lead the effort on surplus lines reform this year along with the continued excellent leadership of Senator Martinez,' said Maria Berthoud of B&D Consulting, who represents NAPSLO in Washington, D.C.
'The new leadership of Senator Bayh shows the momentum the NRRA has this year. With the leadership of Senators Bayh and Martinez, we are optimistic about the bill's chances for passage.' said NAPSLO President John Wood. “This bill was approved unanimously by the House of Representatives the past two sessions and the early introduction in the Senate offers encouragement that the bill will be approved by the 111th Congress and signed into law.”
The Nonadmitted and Reinsurance Reform Act (NRRA) measure is aimed specifically at streamlining and reducing barriers in state regulation of surplus lines insurance and reinsurance. It would create a uniform system, while preserving the role of the state regulator."
For Source and Full Article Visit: NAPSLO BLOG
Risk: Gulf wind and energy
Risk: Gulf wind and energy: "Like the oil platforms that were ravaged by hurricane Ike, the Gulf of Mexico wind storm book lies in ruins, writes Lauren MacGillivray.
It wasn’t supposed to be like this. By the time Ike hit land in September 2008, it had weakened to a Category 2 storm, according to the Saffir-Simpson hurricane scale. But it blew hurricane winds over a 125-mile radius and tropical storm winds over a 255-mile radius.
Fifty-four oil platforms were destroyed and a further 95 damaged as Ike overtook hurricane Ivan as the third most expensive insured loss in the past 10 years, at $15bn or £10.8bn (see bar chart, overleaf).
With the market’s capacity expected to be about 30% lower than it was last year – depending on fresh capacity from Berkshire Hathaway – broker Willis has used its latest Energy Market Review to warn that the future of Gulf of Mexico wind storm insurance is in jeopardy. As the report notes, these policies account for a quarter of upstream insurers’ premiums (see chart, right).
“Faced with an even more limited and expensive product, we understand that some energy companies are likely to question the viability of continuing to purchase this cover,” says the report. “Given the potential disconnect between supply and demand for Gulf of Mexico wind insurance products, it is little wonder that market pessimists are forecasting the end of Gulf of Mexico wind as a viable insurance class.”
The report adds that several energy insurers have found their initial loss estimates to be “wholly inadequate”, concluding that Gulf of Mexico risk is “more confused, volatile and expensive than ever before”.
“It is clear that Ike was no normal Category 2 storm and, in terms of the number of platforms damaged, this is a very sizeable event,” says Paul Dawson, underwriter for energy at Beazley Syndicate. “We shouldn’t be surprised that we will be paying a substantial claim.”
On top of this, reinsurance capacity for direct insurers in this market is set to be as little as 70% of last year’s total.
What’s the solution? Willis believes one answer is to introduce a capital market instrument. This would allow reinsurance companies to transfer risk into the capital markets via private investors, allowing them to generate more capacity to the direct market, which may fix the supply and demand imbalance."
For Source and Full Article Visit: Insurance Times
It wasn’t supposed to be like this. By the time Ike hit land in September 2008, it had weakened to a Category 2 storm, according to the Saffir-Simpson hurricane scale. But it blew hurricane winds over a 125-mile radius and tropical storm winds over a 255-mile radius.
Fifty-four oil platforms were destroyed and a further 95 damaged as Ike overtook hurricane Ivan as the third most expensive insured loss in the past 10 years, at $15bn or £10.8bn (see bar chart, overleaf).
With the market’s capacity expected to be about 30% lower than it was last year – depending on fresh capacity from Berkshire Hathaway – broker Willis has used its latest Energy Market Review to warn that the future of Gulf of Mexico wind storm insurance is in jeopardy. As the report notes, these policies account for a quarter of upstream insurers’ premiums (see chart, right).
“Faced with an even more limited and expensive product, we understand that some energy companies are likely to question the viability of continuing to purchase this cover,” says the report. “Given the potential disconnect between supply and demand for Gulf of Mexico wind insurance products, it is little wonder that market pessimists are forecasting the end of Gulf of Mexico wind as a viable insurance class.”
The report adds that several energy insurers have found their initial loss estimates to be “wholly inadequate”, concluding that Gulf of Mexico risk is “more confused, volatile and expensive than ever before”.
“It is clear that Ike was no normal Category 2 storm and, in terms of the number of platforms damaged, this is a very sizeable event,” says Paul Dawson, underwriter for energy at Beazley Syndicate. “We shouldn’t be surprised that we will be paying a substantial claim.”
On top of this, reinsurance capacity for direct insurers in this market is set to be as little as 70% of last year’s total.
What’s the solution? Willis believes one answer is to introduce a capital market instrument. This would allow reinsurance companies to transfer risk into the capital markets via private investors, allowing them to generate more capacity to the direct market, which may fix the supply and demand imbalance."
For Source and Full Article Visit: Insurance Times
Aon Leads Captive Managers
Aon Leads Captive Managers: "Managing 1,269 of the world's 5,211 captives, Aon Global Insurance Managers, the captive management arm of Aon Global Risk Consulting, continues to lead the captive arena with a market share of 24 percent, as published in the March 8 Business Insurance Captive Spotlight Report.
Aon finished well ahead of Marsh and Willis, with 1,120 and 298 captives, respectively. With 42 Protected Cell Companies, AGIM is ranked as the leading PCC manager, followed by Marsh with 40 and HSBC and Willis with 22 PCCs each.
'The Business Insurance survey demonstrates that AGIM continues to be the market leader in the captive arena,' said Clive James, group managing director of AGIM. 'Despite the slowdown in growth of new captives, AGIM has produced over 50 captives and leads the way in cell captive formations through its innovative solutions to risk financing.'
AGIM manages insurance vehicles in more than 30 locations worldwide, generating total premiums of more than $19 billion per year through managed insurance vehicles with total assets in excess of $50 billion."
For Source and Full Article Visit: dBusinessNews
Aon finished well ahead of Marsh and Willis, with 1,120 and 298 captives, respectively. With 42 Protected Cell Companies, AGIM is ranked as the leading PCC manager, followed by Marsh with 40 and HSBC and Willis with 22 PCCs each.
'The Business Insurance survey demonstrates that AGIM continues to be the market leader in the captive arena,' said Clive James, group managing director of AGIM. 'Despite the slowdown in growth of new captives, AGIM has produced over 50 captives and leads the way in cell captive formations through its innovative solutions to risk financing.'
AGIM manages insurance vehicles in more than 30 locations worldwide, generating total premiums of more than $19 billion per year through managed insurance vehicles with total assets in excess of $50 billion."
For Source and Full Article Visit: dBusinessNews
Aviation Insurers Reportedly Remain Confident in Boeing 777 Engines
Aviation Insurers Reportedly Remain Confident in Boeing 777 Engines : "In light of several recent aviation insurance claims, the question of whether specific planes and/or specific engines are more prone to incidents is becoming relevant to aviation underwriters. According to a recent report in Insurance Day, aviation underwriters “remain confident in the insurability of Boeing 777s” despite the possibility that there could be a repeat of the mechanical fault that caused a crash landing at Heathrow Airport in January 2008.
According to reports, the potential mechanical fault is limited to the Rolls Royce Trent 800 engine, which is used in approximately one-fourth of the Boeing 777 worldwide fleet. This engine appears to be susceptible to ice build-up in the fuel heat exchanger in very cold conditions, possibility involving flights over polar routes. Airlines [or is it manufacturers?] have implemented new operating procedures, decreasing the likelihood of business interruption claims as the result of future losses. There is, however, potentially more pressure on the product components market in terms of potential loss settlements.
According to media reports, Rolls Royce has announced that it is developing a modification to the heat exchanger that promises an improvement on the ability to prevent the build-up of ice. Click here for more information about Rolls Royce’s modifications of the Trent 800 engine."
For Source and Full Article Visit: InsureReinsure.Com
According to reports, the potential mechanical fault is limited to the Rolls Royce Trent 800 engine, which is used in approximately one-fourth of the Boeing 777 worldwide fleet. This engine appears to be susceptible to ice build-up in the fuel heat exchanger in very cold conditions, possibility involving flights over polar routes. Airlines [or is it manufacturers?] have implemented new operating procedures, decreasing the likelihood of business interruption claims as the result of future losses. There is, however, potentially more pressure on the product components market in terms of potential loss settlements.
According to media reports, Rolls Royce has announced that it is developing a modification to the heat exchanger that promises an improvement on the ability to prevent the build-up of ice. Click here for more information about Rolls Royce’s modifications of the Trent 800 engine."
For Source and Full Article Visit: InsureReinsure.Com
S&P downgrades Everest
SS&P Downgrades Everest: "Standard & Poor's Ratings Services has lowered its counterparty credit ratings on Bermuda-based Everest Re Group Ltd. and its US-based intermediary holding company, Everest Reinsurance Holdings Inc., to BB+ from A-.
The ratings agency Standard & Poor's also said that it lowered its counterparty credit and financial strength ratings on operating subsidiaries Everest Reinsurance (Bermuda) Ltd., Everest Reinsurance Co., and Everest National Insurance Co. to A+ from AA-.
In addition, Standard & Poor's removed all of these ratings from CreditWatch, where they were placed on December 19, 2008, with negative implications.
The outlook on all these companies is stable.
'The downgrade stems from Everest's inability to exploit its competitive position to generate sustainable, strong underwriting and operating results commensurate with the former rating,' said Standard & Poor's credit analyst Taoufik Gharib.
S&P added that the rating action was also a result of the company's continuous adverse reserve developments, which have plagued earnings. In addition, Everest's enterprise risk management (ERM) program is adequate, but the implementation of a more robust programme has been slower than expected.
The ratings on Everest are based on its strong competitive position with a global market reach, very strong capital adequacy, and strong financial flexibility, the ratings agency added.
The stable outlook reflects S&P's view that Everest will maintain its strong competitive position with a global presence.
'Premium writings will likely grow modestly in 2009, benefiting from hardening prices, mainly in property reinsurance,' the S&P statement added. 'Its international business will likely increase as a percentage of total writings as it continues to diversify its geographic business mix.'
S&P expects Everest will produce a healthy combined ratio of 93% to 95% and a return on revenue of about 15 percent. Supporting these results are rate increases, mainly in the property reinsurance, and the investment income from its large invested asset base.
'Considering the recent downgrade, a revision of the outlook to positive is unlikely in the next 12 to 24 months,' Mr. Gharib added. 'However, if the company cannot sustain strong earnings or suffers further material adverse reserve developments, we could revise the outlook to negative.'"
For Source and Full Article Visit: The Royal Gazette
The ratings agency Standard & Poor's also said that it lowered its counterparty credit and financial strength ratings on operating subsidiaries Everest Reinsurance (Bermuda) Ltd., Everest Reinsurance Co., and Everest National Insurance Co. to A+ from AA-.
In addition, Standard & Poor's removed all of these ratings from CreditWatch, where they were placed on December 19, 2008, with negative implications.
The outlook on all these companies is stable.
'The downgrade stems from Everest's inability to exploit its competitive position to generate sustainable, strong underwriting and operating results commensurate with the former rating,' said Standard & Poor's credit analyst Taoufik Gharib.
S&P added that the rating action was also a result of the company's continuous adverse reserve developments, which have plagued earnings. In addition, Everest's enterprise risk management (ERM) program is adequate, but the implementation of a more robust programme has been slower than expected.
The ratings on Everest are based on its strong competitive position with a global market reach, very strong capital adequacy, and strong financial flexibility, the ratings agency added.
The stable outlook reflects S&P's view that Everest will maintain its strong competitive position with a global presence.
'Premium writings will likely grow modestly in 2009, benefiting from hardening prices, mainly in property reinsurance,' the S&P statement added. 'Its international business will likely increase as a percentage of total writings as it continues to diversify its geographic business mix.'
S&P expects Everest will produce a healthy combined ratio of 93% to 95% and a return on revenue of about 15 percent. Supporting these results are rate increases, mainly in the property reinsurance, and the investment income from its large invested asset base.
'Considering the recent downgrade, a revision of the outlook to positive is unlikely in the next 12 to 24 months,' Mr. Gharib added. 'However, if the company cannot sustain strong earnings or suffers further material adverse reserve developments, we could revise the outlook to negative.'"
For Source and Full Article Visit: The Royal Gazette
US Treasury's Geithner: AIG must pay back bonuses
US Treasury's Geithner: AIG must pay back bonuses: "U.S. Treasury Secretary Timothy Geithner on Tuesday said insurer AIG would have to promise to compensate taxpayers for $165 million in employee bonuses as a condition for receiving a planned $30 billion expansion of its government bailout.
'We will impose on AIG a contractual commitment to pay the Treasury from the operations of the company the amount of the retention awards just paid,' Geithner said in a letter to congressional leaders.
In addition, the Treasury will deduct $165 million from that $30 billion in additional taxpayer funds announced for American International Group (AIG.N) on March 2, Geithner said.
The AIG bonuses, which were agreed early last year before the government moved to rescue the insurance giant, has ignited a furor on Capitol Hill. House of Representatives Speaker Nancy Pelosi said on Tuesday that legislation to recover the funds could come up within days.
The government, which now holds about an 80 percent stake in AIG, has moved to bail out the company three times, to the tune of up to $180 billion.
Geithner said the Treasury was working with the Justice Department to determine whether provisions of a recently passed economic stimulus bill covering compensation for bailout recipients might be useful in clawing back the bonuses."
For Source and Full Article Click: Reuters
'We will impose on AIG a contractual commitment to pay the Treasury from the operations of the company the amount of the retention awards just paid,' Geithner said in a letter to congressional leaders.
In addition, the Treasury will deduct $165 million from that $30 billion in additional taxpayer funds announced for American International Group (AIG.N) on March 2, Geithner said.
The AIG bonuses, which were agreed early last year before the government moved to rescue the insurance giant, has ignited a furor on Capitol Hill. House of Representatives Speaker Nancy Pelosi said on Tuesday that legislation to recover the funds could come up within days.
The government, which now holds about an 80 percent stake in AIG, has moved to bail out the company three times, to the tune of up to $180 billion.
Geithner said the Treasury was working with the Justice Department to determine whether provisions of a recently passed economic stimulus bill covering compensation for bailout recipients might be useful in clawing back the bonuses."
For Source and Full Article Click: Reuters
Why London is not fashionable
Why London is not fashionable: "London is in danger of falling even further out of favour as a place to do business for the insurance industry. This week, after announcing its annual results, Brit Insurance said it is moving headquarters to the Netherlands.
Brit cited London’s fiscal instability as the reason for its move. “We have said for quite a while that the fiscal instability of London, i.e. our inability to plan long term around tax is a big issue. We have tried to get more certainty and we just don’t get what we require. What we need to be certain is that the overall tax rate for the company is competitive with our competitors based in Bermuda, Switzerland, Dublin or elsewhere and we believe that the combination of the infrastructure, regulatory regime, fiscal stability and business outlook for the Netherlands is a good place to put our company headquarters,” said Dane Douetil, chief executive officer of Brit Insurance Holdings PLC.
Jonathan Drake a partner at law firm Ashurst speculates on further reasons for Brit’s move to the Netherlands: “If you set up in Holland you have access to the rest of the EU via insurance passporting. It does have a stable legal system and a favourable tax regime.”
Brit’s intention to move to the Netherlands comes after Beazley moved its headquarters to Dublin, and Hiscox’s move to Bermuda. The Association of British Insurers (ABI) criticised the government for not doing enough to make the UK more competitive. “In 2006/07 tax year the UK insurance industry contributed £9.7bn in taxes, of which £2.9bn was corporation tax, the third highest of any sector,” said the ABI. “The decision by Brit Insurance to leave the UK, the second insurer to do so in a month after Beazley, shows the government cannot take for granted the UK’s position as a global leader in insurance. It is vital the government acts now to ensure the UK is an internationally competitive location.”
Drake feels it unlikely that another insurer will follow Brit’s footsteps soon, but he warns that insurers are now constantly reviewing their reasons for staying in London. “Certainly this issue has been pushed up in the agenda over the last two to three years,” he said."
For Source and Full Article Click: Insurance Times
Brit cited London’s fiscal instability as the reason for its move. “We have said for quite a while that the fiscal instability of London, i.e. our inability to plan long term around tax is a big issue. We have tried to get more certainty and we just don’t get what we require. What we need to be certain is that the overall tax rate for the company is competitive with our competitors based in Bermuda, Switzerland, Dublin or elsewhere and we believe that the combination of the infrastructure, regulatory regime, fiscal stability and business outlook for the Netherlands is a good place to put our company headquarters,” said Dane Douetil, chief executive officer of Brit Insurance Holdings PLC.
Jonathan Drake a partner at law firm Ashurst speculates on further reasons for Brit’s move to the Netherlands: “If you set up in Holland you have access to the rest of the EU via insurance passporting. It does have a stable legal system and a favourable tax regime.”
Brit’s intention to move to the Netherlands comes after Beazley moved its headquarters to Dublin, and Hiscox’s move to Bermuda. The Association of British Insurers (ABI) criticised the government for not doing enough to make the UK more competitive. “In 2006/07 tax year the UK insurance industry contributed £9.7bn in taxes, of which £2.9bn was corporation tax, the third highest of any sector,” said the ABI. “The decision by Brit Insurance to leave the UK, the second insurer to do so in a month after Beazley, shows the government cannot take for granted the UK’s position as a global leader in insurance. It is vital the government acts now to ensure the UK is an internationally competitive location.”
Drake feels it unlikely that another insurer will follow Brit’s footsteps soon, but he warns that insurers are now constantly reviewing their reasons for staying in London. “Certainly this issue has been pushed up in the agenda over the last two to three years,” he said."
For Source and Full Article Click: Insurance Times
Armed guards at AIG offices after death threats over bonuses
Armed guards at AIG offices after death threats over bonuses : "A wave of popular anger over the $165 million (£118 million) in bonuses received by executives of American International Group (AIG) is threatening to engulf the insurance company and cause deep damage to President Obama’s infant Administration.
Armed guards have been stationed outside the Connecticut offices of AIG Financial Products (AIGFP), where death threats have been pouring in and some employees have resigned or have refused to turn up for work.
Yesterday it emerged that 11 AIG workers who had received retention bonuses of $1 million or more had already left the company, stoking the anger on Capitol Hill, where Congress was threatening to introduce taxes to claw back the $165 million bonus payment to 400 staff at the division that caused its near-collapse."
For Source and Full Article Click: Times Online
Armed guards have been stationed outside the Connecticut offices of AIG Financial Products (AIGFP), where death threats have been pouring in and some employees have resigned or have refused to turn up for work.
Yesterday it emerged that 11 AIG workers who had received retention bonuses of $1 million or more had already left the company, stoking the anger on Capitol Hill, where Congress was threatening to introduce taxes to claw back the $165 million bonus payment to 400 staff at the division that caused its near-collapse."
For Source and Full Article Click: Times Online
FEMA says 90% of U.S. natural disasters are floods
FEMA says 90% of U.S. natural disasters are floods: "The Federal Emergency Management Agency and the National Oceanic and Atmospheric Administration launched an educational campaign this week to teach Americans about the dangers of flooding, the nation's most common natural disaster. Officials say many people disregard the risk of flooding because they don't live near a river or other body of water, but 25% of flood insurance claims come from outside of high-risk areas. Officials also are trying to eradicate the myth that only property owners need flood insurance because renters also often lose valuable property in floods. Montgomery Advertiser (Ala.) (03/16)"
For Source and Full Article Click: NAMIC dailyLead
For Source and Full Article Click: NAMIC dailyLead
Report: Man-Made Cat Losses Hit USD7 Billion in 2008
Report: Man-Made Cat Losses Hit USD7 Billion in 2008: "Guy Carpenter on March 10 issued a document entitled Report: Man-Made Cats Hit USD 7 Billion in 2008 which cites statistics compiled by Swiss Re indicating that insured losses from catastrophes of a manmade and technological nature totaled $7 billion during 2008, some 46 percent higher than the annual average of $4.8 billion.
The report cites 19 events in which insured losses exceeded $50 million and 11 countries which experienced man-made cat losses that ranged from $80 million to $2 billion, including:
· The Apache Energy gas plant explosion and fire in Australia that resulted in loss totaling $1.8 billion
· BHP Billiton business interruption loss from flooding that stopped production at Australian coal mines totaling $1.2 billion
· Severstal steel plant blast furnace explosion in Dearborn, Michigan resulting in loss totaling $400 million
· Universal Studios fire in Los Angeles resulting in loss totaling $400 million
· Channel Tunnel fire in the English Channel resulting in loss totaling $230 million
· ISAB power plant fire in Italy resulting in loss totaling $300 million
· Mumbai terrorist attacks in India, resulting in loss that could total $600 million"
For Source and Full Article Click: Insurance Law Center
The report cites 19 events in which insured losses exceeded $50 million and 11 countries which experienced man-made cat losses that ranged from $80 million to $2 billion, including:
· The Apache Energy gas plant explosion and fire in Australia that resulted in loss totaling $1.8 billion
· BHP Billiton business interruption loss from flooding that stopped production at Australian coal mines totaling $1.2 billion
· Severstal steel plant blast furnace explosion in Dearborn, Michigan resulting in loss totaling $400 million
· Universal Studios fire in Los Angeles resulting in loss totaling $400 million
· Channel Tunnel fire in the English Channel resulting in loss totaling $230 million
· ISAB power plant fire in Italy resulting in loss totaling $300 million
· Mumbai terrorist attacks in India, resulting in loss that could total $600 million"
For Source and Full Article Click: Insurance Law Center
BRIT cancels £150m rights issue
Brit cancels £150m rights issue: "Brit Insurance has abandoned plans for a £150m rights issue, The Sunday Telegraph reported.
The paper said “people close to the company” said on Saturday night that the issues would not proceed.
Reuters said Brit was refusing to comment. 'I'm afraid the company is declining to comment on this,' a spokeswoman said."
For Source and Full Article Click: Insurance Times
The paper said “people close to the company” said on Saturday night that the issues would not proceed.
Reuters said Brit was refusing to comment. 'I'm afraid the company is declining to comment on this,' a spokeswoman said."
For Source and Full Article Click: Insurance Times
PICC to raise solvency margin via subordinated debt
"PICC Property and Casualty Co. Ltd. [77633], the largest n domestic nonlife insurer in China, said it will issue not more than 8 billion yuan (US$1.2 billion) in 10-year subordinated term debt securities to raise its solvency margin, subject to shareholder and regulatory approval.
The insurer said the decision has been made after ?conscientiously comparing various proposals' to meet itscapital needs and considering ?the current low interest rate environment.?
PICC said the terms and conditions of such an issue, including issue date, issue size and interest rates, will be determined by the board of directors after taking into account ?the market conditions and all other relevant factors,? according to an announcement filed with the Hong Kong Stock Exchange.
Pandora Leung, an equity analyst at KGI Group in Hong Kong, told BestWeek Asia/Pacific that PICC has decided to issue such debt mainly due to the recent sharp drop of PICC?s share price, wich present the company with financial risk. The share price drop negatively affects PICC's financial situation as the insurer?s capital size is probably ?inadequate? to support its financial stability, she said.
Leung said the insurer?s existing solvency margin is ?too low? at 105.2 by the end of June 2008, far below the Chinese regulator?s solvency margin requirement of 150 -- another reason for its debts issuing.
Leung said the issuing of 8 billion yuan in subordinated debt could help PICC ?ease its financial stress.?
Beijing-based PICC also confirmed that it has decided ?not to participate in the intended capital increase of its associated company, PICC Life.? The insurer did not provide further information about its decision.
According a separate announcement filed with the Hong Kong Stock Exchange, PICC's equity interests in PICC Life ?will be diluted to approximately 14% of the registered capital as enlarged by the capital increase from 28%.?
The proceeds raised from PICC Life will be used for ?business development and satisfying regulatory requirements,? said PICC in a statement.
PICC Life in a joint stock limited company established in China and is mainly engaged in life insurance, health insurance, accidental injury insurance and the related reinsurance business in the country, as well as insurance fund applications.
PICC Life is a subsidiary of the People?s Insurance Company (Group) of China, the controlling shareholder of PICC, which currently holds 51% of the registered capital of PICC Life directly."
For Source and Full Article Click: Bestwire via Individual.com
The insurer said the decision has been made after ?conscientiously comparing various proposals' to meet itscapital needs and considering ?the current low interest rate environment.?
PICC said the terms and conditions of such an issue, including issue date, issue size and interest rates, will be determined by the board of directors after taking into account ?the market conditions and all other relevant factors,? according to an announcement filed with the Hong Kong Stock Exchange.
Pandora Leung, an equity analyst at KGI Group in Hong Kong, told BestWeek Asia/Pacific that PICC has decided to issue such debt mainly due to the recent sharp drop of PICC?s share price, wich present the company with financial risk. The share price drop negatively affects PICC's financial situation as the insurer?s capital size is probably ?inadequate? to support its financial stability, she said.
Leung said the insurer?s existing solvency margin is ?too low? at 105.2 by the end of June 2008, far below the Chinese regulator?s solvency margin requirement of 150 -- another reason for its debts issuing.
Leung said the issuing of 8 billion yuan in subordinated debt could help PICC ?ease its financial stress.?
Beijing-based PICC also confirmed that it has decided ?not to participate in the intended capital increase of its associated company, PICC Life.? The insurer did not provide further information about its decision.
According a separate announcement filed with the Hong Kong Stock Exchange, PICC's equity interests in PICC Life ?will be diluted to approximately 14% of the registered capital as enlarged by the capital increase from 28%.?
The proceeds raised from PICC Life will be used for ?business development and satisfying regulatory requirements,? said PICC in a statement.
PICC Life in a joint stock limited company established in China and is mainly engaged in life insurance, health insurance, accidental injury insurance and the related reinsurance business in the country, as well as insurance fund applications.
PICC Life is a subsidiary of the People?s Insurance Company (Group) of China, the controlling shareholder of PICC, which currently holds 51% of the registered capital of PICC Life directly."
For Source and Full Article Click: Bestwire via Individual.com
General Liability Losses and Expenses to Rise
General Liability Losses and Expenses to Rise: "Just how the recession will affect different lines of insurance is a common topic of discussion these days. A new study by Conning Research and Consulting suggests that the general liability line of insurance will see accelerating growth in losses and expenses in the next couple of years due in part to the recession. According to Conning, the general liability insurance line has produced industry-wide combined ratios below 100 percent for the past two years, but this profitable underwriting performance is unlikely to continue. While premium reduction is expected to moderate and even see a modest increase by 2010, Conning says losses and expenses are forecast to grow more quickly, with combined ratios expected to reach 107 percent by 2010. A press release quotes Stephan Christiansen, director of insurance research at Conning: “History has shown us a cyclical increase in general liability losses in periods following recessions. At the same time, longer term secular trends point to an increase in both smaller claims and larger mega risks.” To meet the challenges to profitability Conning suggests insurers will need to monitor trends in costs – particularly losses – and demand. Longer term, the best prospects for general liability insurers may come from an expanding specialist focus."
For Source and Full Article Click: III Insurance Industry Blog »
For Source and Full Article Click: III Insurance Industry Blog »
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