EUROPA : launches Quantitative Impact Study for occupational pensions

he European Insurance and Occupational Pensions Authority (EIOPA) launches today the first Quantitative Impact Study (QIS) on Institutions for Occupational Retirement Provision (IORPs), as part of its process to advise the European Commission on the review of the IORP Directive. 

The QIS will assess the financial impact of different sets of options for the valuation of the holistic balance sheet and the calculation of capital requirements.

It will also deal with the quantification of the security and benefit adjustment mechanisms existing in different countries. The exercise is targeted at IORPs that run defined benefit pension plans.

IORPs that only provide pure defined contribution schemes are excluded from the scope. In order to facilitate the participation in the QIS of smaller IORPs, EIOPA developed so-called ’helper tabs’ – spread sheets that will assist IORPs in valuing sponsor support and pension protection schemes by using simplifications.

Nine European countries, in which defined benefit pension plans are most prevalent, have volunteered to participate in the study: Belgium, France, Germany, Ireland, the Netherlands, Norway, Portugal, Sweden and the United Kingdom. The national supervisory authorities (NSAs) are responsible for conducting the QIS in their country.

The exercise will be performed by either selected IORPs or by the NSAs themselves using real or aggregate data; or by actuarial firms acting on behalf of NSAs; or a combination.

EIOPA will coordinate the QIS at the European level, will be in charge of a question & answer procedure and will analyse the individual data in order to ensure consistency of the results.

The exercise runs until 17 December 2012 and the report on the QIS outcome is expected to be released in spring 2013.

Gabriel Bernardino, Chairman of EIOPA, said: “I am pleased that we have been able to take this important step in the development of a new European framework for occupational pension funds. In our advice to the European Commission we proposed the holistic balance sheet (HBS) concept as a means to capture the wide diversity of retirement systems in a single prudential regime. This QIS will allow us to investigate the feasibility of implementing the HBS in practice”.

Reliance Life Insurance begins post-sales service in insurance market

NEW DELHI: Taking a leaf out of its Japanese partner Nippon Life's book, private sector insurer Reliance Life has begun its post-sales service drive across the country and plans to cover over 10 lakh customers by March next. 

Reliance Life Insurance Company (RLIC) has asked its 1.5 lakh representatives, including staff, advisors and channel partners to meet about ten per cent (over one million) of its existing customers by end of current fiscal to provide services beyond premium collection. 

RLIC, part of Anil Ambani-led Reliance Group's financial services arm Reliance Capital, has begun this drive under its 'Reliance Life Plus Club' initiative. 

According to RLIC, it is the first Insurance company in India to introduce a structured post-sales customer service platform. 

Commenting on the new initiative, RLIC President and Executive Director Malay Ghosh said: "Our post-sales service drive is already in force and action is part of our daily business routine. We have instructed over 1200 pan-India branches to implement it like sales targets. We hope to meet one million customers by March 2013".

The initiative is inspired by 'Zutto Motto' (Forever More Service) service at Nippon Life, Japan's leading insurer and Reliance Life's strategic partner with a 26 per cent stake. 

"We hope to replicate the success that this model enjoys in Japan," Ghosh said. 

Post-sales service is a widely prevalent practice in a host of consumer-focused businesses, including consumer goods and home appliances. 

It involves a continued relationship between the company and its customers through maintenance and advice-like offerings for years after the actual sale. 

Stressing on the need for an after-sales service, Ghosh said that life insurance is a long-term product and the customers' needs may change over a period of time. 

"It is very important for sales agents to periodically visit the customers to find out their diversifying needs in their various life stages. This is the key point in enhancing customer satisfaction," he said. 

"We have made it a rule that all our sales people visit every customer periodically at least once a year. Such visits also help in selling new products to the existing customers and in acquiring new clients," Ghosh added. 

The company is spending about Rs 12 crore in the current financial year for this initiative to meet about 10 per cent of its customer base. At present, Reliance Life has more than nine million policyholders.

Metropolitan Police Commissioner Bernard Hogan-Howe visited MIB

Bernard Hogan-Howe, Commissioner of the Metropolitan Police, visited the Motor Insurers’ Bureau (MIB) on 8 October 2012 to see first-hand how MIB supports his officers in the Capital, as well as all police officers in the UK, in taking uninsured cars off the road.

During the visit, Commissioner Hogan-Howe met with MIB Chief Executive, Ashton West and MIB Chairman Keith Morris. Commissioner Hogan-Howe then listened in to calls coming in to the dedicated Police Helpline from road-side officers with vehicles they suspected of being driven without insurance.

The Metropolitan Police are targeting uninsured drivers through Operation Cubo – a sustained programme across the network of roads around the capital. The monthly operation sees mobile checkpoints appearing on London’s roads with Roads Policing teams using automatic number plate recognition (ANPR) cameras, which are connected to MIB’s Motor Insurance Database via the Police National Computer.  It quickly indicates whether or not a vehicle is on the database. To date, around 37,000 vehicles have been seized by the Met since Operation Cubo began in October 2011.

Recently, a £227,000 Ferrari FF was seized for having no insurance in the Royal Borough of Kensington and Chelsea and was put on display outside Scotland Yard alongside an £18,000 Mercedes – also seized for no insurance.

The UK’s level of insured driving has fallen by 30% in the last five years and is currently estimated to be 1.2m.

HSBC : over half of family lenders expect loans repaid and three quarters expect interests

More than half of family members that give money to first time buyers (FTBs) expect to get it back – and three quarters want to be paid interest on top.

The ‘bank of mum and dad’ has its own terms and conditions according to new research from HSBC. While almost one in five (19%) first time buyers (FTBs) received family financing in the last year, more than half (52%) of family members who offered financial assistance provided it with an expectation to be paid back.

Just 31% of those families who offered financial assistance to their FTB relatives gave outright cash gifts as the primary source of family financing, and even fewer (17%) requested part-ownership in the property in order to collect their money when the house is eventually sold on.

The survey of 1,000 FTBs revealed that for those who expect to be paid back nearly three quarters (73%) want to be paid interest as well. The most common rate ranged between 2.1% and 2.5%, around the current rate of inflation. Women are slightly less likely to be asked to pay interest than men, (70% vs. 77%). The bank of mum and dad is also more likely to ask for interest if their FTB relative is purchasing a first home with a partner (75%), rather than on his or her own (69%).

How likely families are to charge interest to their FTB relatives also differs by region. In the South East, 56% of families want interest to be paid on any financial assistance they offer to the FTB. In London, this figure rises to 77%. Moving north, families are even keener to be paid interest. In Yorkshire, 92% of families who help their FTB relatives request interest, as do 94% of families in the North West.

The size of the property is another important factor at the bank of mum and dad, with purchasers of larger homes more likely to be asked to pay interest than those buying smaller ones. More than 8 out of 10 (82%) families lending to an FTB buying a detached house expect to receive interest, compared with 72% of those buying a semi-detached house, and 63% of those purchasing a terraced property.

Peter Dockar, Head of Mortgages at HSBC, commented: “Family support has become an important part of the first-time buyer financing mix, however the research shows that many relatives would like to be repaid at a later date. To avoid unnecessary strain on relations further down the line it is best to agree the terms with family members at the outset. Whether first time buyers receive financial support or not, we will continue to offer accessible mortgages at competitive interest rates.

THE BANK OF MUM AND DAD – KEY FACTS:

1. One in five (19%) of families provided some sort of financing to the first-time buyer relatives last year.
2. Of the families that provided financing, approximately 52% want to be repaid.
3. Only 31% of families providing family financing give an outright gift as the primary source of family financing.
4. Some 17% of those families who provided family financing bought a part-share in their FTB relative’s home as the primary source of family financing.
5. Nearly three-quarters (73%) of families who want to be repaid also charge interest.
6. Families are more likely to charge interest to males (77%) than to females (70%)
7. Families are more likely to charge interest if their FTB relative is purchasing a first home with a partner (75%) rather than on his or her own (69%)
8. More than 8 out of 10 (82%) families expect to receive interest if they offer assistance on a detached house, compared with 72% and 63% for semi-detached and terraced houses respectively.
9. For those families providing family financing, some form of gift is provided to 80% of FTBs
10. Some 83% of FTBs whose families have provided family financing and who purchased their first home with a partner get some form of gift, compared with only 75% for those who purchased without a partner.

Caregiving for an elderly or sick loved one: people's panel

We're collecting stories from people who care for loved ones while also taking care of themselves. Photograph: Corbis

Read a selection of the responses here

If you're one of the millions Americans who struggles to care for an aging or sick loved one while holding down a job and raising children, chances are you want to scream. And you're not alone.

According to a new report from the AARP, 42 million Americans perform some form of consistent care for older or impaired adult relatives or friends. These caregivers, though many don't identify as such, provide a staggering $450bn worth of unpaid care annually in the US.

Caregivers take on extra responsibilities that range from paying bills, to driving mom to doctor appointments, to more hands-on care such as bathing, and even tasks once left to nurses such as the care of open wounds. What's more is that AARP research makes clear that the stress and time involved can take a toll on the caregivers' own health and finances, as they put off their own doctor visits, dip into their savings and cut back their working hours.

As part of our people's panel series, we're collecting stories from people who care for loved ones. What's been your experience? Are you stressed? Or do you love to help? Answer the questions below and we'll feature your story on the Guardian.

Points record is licence for car insurance firms to raise premiums

I got three penalty points on my driving licence that were removed last month after the statutory four-year period. But when I attempted to renew my car insurance I was told by my provider that it retains points on its records – and charges the consequently higher premiums – for five years. I have paid the price for my speeding offence; surely it's unethical that my provider should punish me for an additional year. DG, Woodford Green, Essex

You've guessed the reason: money. Insurers price their policies according to the perceived risk of a claim. The riskier a customer's profile is perceived to be, the more they'll be charged and, although new laws forbid firms from taking gender into account they are free to use other personal circumstances to calculate premiums.

Most insurers will require details of any endorsements or convictions for the last five years and, although you say this is the only time you've ever been penalised for speeding, if an insurer's claims history shows that customers with speeding convictions are more likely to make a future claim, it will judge you to be a higher risk even after your penalty has expired.

Drivers should spend a year as learners, insurers say

The Association of British Insurers says a minimum 12-month learning period would enable young drivers to gain more supervised practice. Photograph: Alamy

Novice drivers should be subject to restrictions on night time driving and a reduced drink driving limit, according to the Association of British Insurers.

It also recommended learners spend at least a year displaying their L-plates before being allowed to take a driving test, although young people could start learning six months earlier than the current age limit of 17.

The minimum 12-month learning period would allow young drivers to gain more supervised practice, the ABI said, as it called for graduated driver licensing for the first six months after passing a driving test.

This would include restrictions on the number of young passengers that can be carried by a newly qualified driver, restrictions on driving between 11pm and 4am, and no blood alcohol content.

According to the ABI, only one in eight licenced drivers in the UK is aged 25 or under, yet they account for a third of those killed on the roads.

The association said that an 18-year-old driver was more than three times as likely to be involved in a crash as their 48-year-old counterpart. In addition, 27% of personal injury car insurance claims in excess of £500,000 result from a crash involving a driver aged 17-24.

Director general of the ABI, Otto Thoresen, said: "Radical action is needed to reduce the tragic waste of young lives on our roads."

"A car is potentially a lethal weapon, and we must do more to help young drivers better deal with the dangers of driving. Improving the safety of young drivers will also mean they will face lower motor insurance costs.

"We have all sidestepped this issue for too long. Northern Ireland is introducing reforms, and politicians in Westminster should follow their lead in introducing meaningful reform to help today's young drivers become tomorrow's safer motorists."

The report looked at policies adopted in other countries and found that graduated driver licensing had reduced the number of crashes involving young drivers.

It said: "The situation can be improved and countries similar to ours such as the United States, Canada, Australia and New Zealand have introduced bold measures that have improved the safety of young drivers, namely introducing graduated driver licensing."

Young drivers have faced steep rises in insurance costs over the past few years. In April, figures from the AA showed that while premiums for men aged 40-49 had gone up by 6% since April 2010, those aged 17-22 had seen increases of 40%. It is not uncommon for young drivers to be quoted thousands of pounds to cover their car.

Car insurers have been introducing telematics technology which tracks how a car has been driven as a way to reward young motorists who drive carefully and at the safest time of day, and research by one insurer suggested this is effective.

Barclays increases provision for PPI mis-selling by £700m

Barclays has now increased its original £1bn provision for PPI compensation twice. Photograph: Dominic Lipinski/PA

The scale of the payment protection insurance mis-selling scandal was ratcheted up again on Thursday when Barclays set aside another £700m to cover the cost of claims, taking its bill to £2bn.

The decision by Barclays, under new chief executive Antony Jenkins, to announce the increased provision in an unscheduled statement sparked speculation that rival banks would also need to increase their provisions.

The additional £700m is likely to result in Barclays reporting a loss for the third quarter, figures for which will be released on 31 October. The bank also admitted that it may need to put yet more money aside in the future.

Selling PPI – which is designed to cover repayments for customers if they fall sick or lose their jobs – alongside loans proved very profitable for the banking industry. But it is now being shown to have been a very costly exercise, with all the major banks making huge provisions for mis-selling.

Barclays said it had "experienced higher than previously anticipated levels of PPI claim volumes since the end of the first half" on 30 June and had therefore decided to set more money aside.

It the third provision made by Barclays. The first £1bn was set aside last year and an extra £300m was added earlier this year.

"Based on claims experience to date and anticipated future volumes, the resulting provision includes Barclays' best estimate of expected costs of future PPI redress," the bank said. "Barclays will continue to monitor actual claims volumes and the assumptions underlying the calculation of its PPI provision."

In August, Barclays admitted that claims for PPI had risen to 280,000 in the first half of the year and Jenkins, who ran the retail bank before his promotion to chief executive, has committed the bank to lowering the number of complaints it receives. He previously ran Barclaycard, which was among the banks' business units selling PPI to customers.

The banking industry has complained that claims management companies, which make claims on behalf of customers for a fee, are clogging up the PPI redress process by putting in claims for customers who do not have policies. Lloyds, for instance, has employed 1,000 people to process PPI claims and reckons that 50% of complaints put in by customers are false.

Lloyds was the first bank to start making provisions for PPI mis-selling, breaking ranks with rivals who were trying to fight a decision by the Financial Services Authority to make them pay out to customers. Lloyds took a £3.2bn provision in May 2011, although this has now risen to £4.3bn. Royal Bank of Scotland's bill is £1.3bn, HSBC's £1.1bn and Santander – which did not take an additional provision in the first half – has made a £550m provision.

The total for the big five banks now stands at more than £9bn but other sellers of PPI are also taking provisions.

Ian Gordon, bank analyst at Investec, calculates that Lloyds is the bank now most likely to need to make an extra provision, on the basis that, like Barclays, it had paid out almost 70% of its existing provision for PPI. The proportions paid out by RBS and HSBC are not as high, which may make them less likely to increase their provisions.

Coface H1 profit rises 23% despite tough conditions

Combined ratio increases by 1.3 points to 81.6% as claims rise

French credit insurer Coface made a profit after tax of €68m in the first half of 2012, up 22.5% on the €55m it made in last year’s first half.

A big driver of the increase was the lack of restructuring costs, which reduced the first half 2011 profit by €8m. Excluding the restructuring costs, the first half 2012 profit was up 7%.

The higher profit came on the back of a 5.8% increase in overall turnover to €808m (H1 2011: €764m). Turnover in Coface’s core insurance business grew 7.2% to €766m (H1 2011: €715m). However, this was partly offset by a 14.3% drop in factoring turnover to €43m (H1 2011: €50m).

Coface chief executive Jean-Marc Pillu said: “In a deteriorated economic context, Coface has been able both to pursue its growth and support its clients through refined management of risk. Our performance in the first half of 2012 confirms the relevancy of our strategy to refocus on credit insurance.” 

Despite the increase in net profit, underwriting profitability deteriorates lightly. Coface’s combined ratio increased by 1.3 percentage points to 81.6% (H1 2011 80.3%).

Coface described the the combined ratio as “under control” and said it had been able to hold it relatively steady despite a higher claims rate. The company attributed this to its “refined management of risk”.

Willis Networks signs 12 new members

Sign-ups take Willis Networks’ 2012 new members to 22

Willis has announced that 12 new members have joined its Willis N2 network and Willis Commercial Network.

Willis N2 signed up H S Coleman (Insurance Services), Evans and Lewis, Abaco Insurance Brokers, Bestford & Company, Penn Insure, Stonehouse Financial Services and Financial Management (UK), trading as Commercial Direct.

Willis Commercial has expanded to include Chesham Insurance Brokers, Cumbria Insurance Brokers, Brownhill Insurance Group, Houghton Insurance Bureau and Grove Insurance Services.

Willis Networks managing director Sara Fardon said: “Twenty-two new members have joined Willis N² and Willis Commercial Network this year, demonstrating how relevant our networks are to forward-thinking brokers of all sizes across the UK.”

Russian Insurance Community Works on Implementing ACORD Standards

Global standards development organization ACORD announced that a coalition of major Russian insurers, including subsidiaries of Allianz and Zurich, have agreed to work together to implement its standards. “When completed, this will become the first documented ACORD implementation in the Eastern European region and a historic milestone for ACORD,” said the bulletin.

Representatives from ACORD and top Russian companies met in Moscow on August 23, 2012 to sign a memorandum of agreement to work together on this implementation initiative.

“We’re very excited to introduce ACORD Standards to the Russian marketplace,” stated Lloyd Chumbley, ACORD Vice President of Standards. “We look forward to helping these organizations realize the many efficiencies that standards can bring to their businesses.”

The bulletin explained that the Russian insurance industry “became aware of ACORD through a project entitled ‘Technologies for the Insurance Market,’ which brought top managers from leading insurers to a roundtable on ways to improve the Russian market’s internal business processes. The discussions led the group to ACORD Standards, in particular back office and front office functions for accounting, settlement and claims, and the ACORD Framework, the enterprise architecture for the global insurance industry.”

Igor Khromov, Deputy General Director of Ingosstrakh Insurance Company, observed: “We see enormous value in bringing the internationally recognized ACORD Standards to Russia. The development of our insurance market demands that we take this important step towards greater efficiency and faster exchange of data, which will benefit both our companies and our customers.”

ACORD noted that the following Russian insurance organizations are working on the ACORD implementation initiative:
• Rosgosstrakh
• SOGAZ
• Ingosstrakh
• RESO-Garantiya
• Alfa Strakhovaniye
• Allianz
• MSK
• Renaissance Strakhovaniye
• VSK
• Consent
• Insurance Technologies (Russia)
• Zurich

House Lawmakers Reach Deal on Russia Trade Pact, Rights Bill

The top Republican and Democrat on the House of Representatives Ways and Means Committee said on Thursday they had reached a deal to move forward on Russian trade legislation, including human rights provisions opposed by Moscow.

“I am pleased that we were able to gain bipartisan support for this important legislation that supports U.S. jobs and exports, and I look forward to marking it up next week,” Committee Chairman Dave Camp, a Republican, said in a statement with Democratic Representative Sander Levin.

Business groups, such as the U.S. Chamber of Commerce, want Congress to pass the trade legislation before its August recess to make sure U.S. companies share in the benefits of Russia’s upcoming entry in the World Trade Organization.

Russia is the largest economy still outside the WTO and its entry is expected to help double U.S. exports to that country to about $19 billion annually over the next five years.

Representatives Kevin Brady and Jim McDermott, the top Republican and Democrat on the Ways and Means trade subcommittee, said they were joining Camp and Levin on the bill to grant “permanent normal trade relations,” or PNTR, with Russia.

U.S. Trade Representative Ron Kirk said more exports to Russia would mean more American jobs.

“We look forward to working with Congress to put a final bill on the president’s desk as soon as possible,” Kirk said in a statement.

SENATE BILL

The bill is similar to one approved unanimously on Wednesday by the Senate Finance Committee and which contains a number of provisions to put pressure on the U.S. Trade Representative’s Office to ensure Russia honors its WTO commitments, they said.

“The bill we are introducing today includes important additional measures relating to the enforcement of key provisions, ranging from the protection of intellectual property rights, to barriers to U.S. exports, and Russia’s compliance with its WTO commitments,” Levin said.

It would exclude certain human rights provisions in the Finance Committee package because that is outside the jurisdiction of the Ways and Means Committee.

But the four lawmakers said they would push for the “Magnitsky bill” to be added by House leaders to the PNTR package before it goes to the floor for a vote.

“As a long-time supporter of the Magnitsky legislation, I am advocating that it be paired with PNTR before a House vote,” Camp said.

Russia is expected to join the World Trade Organization in August, 18 years after it first asked for membership, putting pressure on Congress to lift a Cold War-provision known as the Jackson-Vanik amendment, which is inconsistent with WTO rules.

If Congress does not act to terminate the provision and grant PNTR, Russia could deny U.S. exporters some of the market-opening concessions it made to join the WTO, and the United States would not be able to challenge those actions through the WTO’s dispute settlement system.

Concern about Russia’s commitment to human rights, democracy and the rule of law is propelling the Magnitsky bill, named after a Russian anti-corruption lawyer who died in 2009 after a year in Russian jails.

It would bar Russian officials guilty of human rights violations from traveling to the United States and freeze assets they hold in U.S. banks.

The White House had pushed for a bill free of human rights provisions to terminate Jackson-Vanik and establish “permanent normal trade relations” with Moscow.

But it appears resigned to the bill passed by the Senate Finance Committee, which included the Magnitsky provisions.

“Passage of this bill through the House and full Senate will enable the president to extend Permanent Normal Trade Relations to Russia and allow American businesses, ranchers, farmers, and workers receive the full benefit of Russia’s WTO commitment,” White House spokeswoman Caitlin Hayden said in a statement.

Federal insurance regulation needed, U.S. panel told

Noting that the Obama administration is expected to unveil its plan to enhance government oversight of financial markets on Wednesday, “it also appears likely that we will soon consider reforms aimed at mitigating systemic risk,” Rep. Paul E. Kanjorski, D-Pa., chairman of the House Financial Services Committee’s Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, said at the hearing.

He added that while the specifics of a plan regarding insurance remain unknown, “we have spent enough time debating those issues to come to some conclusions. For example, I believe that only ostriches can now deny the need for establishing a federal insurance resource center and a basic federal regulatory structure.”

“We can no longer sweep insurance regulation under the rug and cross our fingers that nothing will go wrong,” Rep. Kanjorski said at the hearing of the subcommittee he chairs. “We tried it before and learned that such an action may hide the mess for the short term, but pose greater problems in the long term.”

Rep. Kanjorski said the federal government should “actively regulate” lines of insurance that present systemic risk or have national significance, citing bond issuers, mortgage insurers and reinsurers. “I also believe that we should examine how we can promote greater uniformity in the industry, with or without the establishment of a federal charter” for insurers.

A member of the European Parliament told Tuesday’s hearing that the lack of a single regulatory voice for U.S. insurers could work to their detriment.

“The USA’s state-based regulatory system makes the dialogue between the E.U. and USA much more complicated,” testified Peter Skinner, a U.K. member of the European Parliament and rapporteur on Solvency II, which will overhaul the regulation of insurers in the European Union. “The significant divergence in regulatory systems also makes it more difficult to resolve problems such as the perennial issue of the discriminatory collateral requirements applied by USA regulators to non-USA reinsurers,” he told the House panel.

“The U.S. is disadvantaged by the lack of a federal entity with constitutional authority to make decisions for the country and to negotiate international insurance agreements,” said Frank Nutter, president of the Washington-based Reinsurance Assn. of America.

But not all witnesses supported federal insurance regulation.

Property/casualty insurance does not pose a systemic risk and therefore should not be subject to any new federal systemic authority, John Hill, chairman-elect of the National Assn. of Mutual Insurance Cos. and president and chief operating officer of New York-based Magna Carta Cos., told the subcommittee.

Premiums of Listed Life Insurance Firms Jan. up 12.7%

Total premiums of listed life insurance companies increased 12.7% in January 2012, according to insurance premium data issued by those companies.

The insurance premium of New China Life Insurance Co., Ltd. (SHSE: 601336; SEHK: 1336) hiked 19.6%; that of China Life Insurance Co., Ltd. (NYSE: LFC, SEHK: 2628, SHSE: 601628) grew 11.8%; that of Taiping Life Insurance Co., Ltd. increased 10.7%; that of China Pacific Life Insurance Company rose 4.3%.

Meanwhile, the China Insurance Regulatory Commission (CIRC) issued each company's scale premium and standard premium data for 2011, which shows that in life insurance industry, the scale premium increased 5.1% year on year, but the standard premium slipped 0.5% in 2011.

In January 2012, the original insurance premium of China Life Insurance accumulated to CNY 49.1 billion, increasing 11.8% year on year; that of China Pacific Life Insurance was CNY 12.2 billion; that of China Pacific Property Insurance Co., Ltd. was CNY 6.8 billion; that of Ping An Life Insurance Company of China was CNY 21.1 billion; that of Ping An Property & Casualty Insurance Company of China, Ltd. was CNY 9.7 billion; that of New China Life Insurance was CNY 13.2 billion.

Even though those life insurance companies' insurance premium increased in January, a reliable result on whether the increasing situation can be kept can not be made until the end of February at the earliest. The result will be made according to the combination of data in January and February, according to a research report of China International Capital Corporation Limited (CICC). 

Reinsurance prices expected to be flat at year-end renewals: Rendez-vous meeting

MONTE CARLO, Monaco — Reinsurance prices largely will be flat at year-end renewals, barring any major catastrophes, according to reinsurers, brokers and other experts meeting in Monte Carlo, Monaco, this week.

While reinsurance capacity remains plentiful, the continued influence of 2011 catastrophe losses on the market and low interest rates dampening investment income likely will stifle attempts by cedents to significantly lower reinsurance rates, experts say.

And demand for reinsurance may increase next year as insurers in Europe prepare for increased capital requirements under the Solvency II regulatory regime, they say.

Reinsurers, brokers and other market participants are meeting in Monte Carlo for the annual Rendez-vous de Septembre reinsurance meeting, which marks the traditional start of year-end renewal negotiations.

Rate hikes moderating

Reinsurance rates for contracts renewing throughout 2011 have seen increases, but rate hikes have been moderating as the year progresses, said Ulrich Wallin, CEO of Hannover Reinsurance Co.

“Provided that there's no significant loss between now and year-end, we expect further moderation,” he said. Rates likely will vary depending on classes of business, but U.S. catastrophe reinsurance “should see increases of around 5%,” Mr. Wallin said.

But some U.S. catastrophe programs could see modest decreases in rates, said David Priebe, vice chairman of Guy Carpenter & Co.

“U.S. property cat rates represent the most attractive pieces of business in the world … the market feels that the margins in that area are attractive,” he said.

Non-catastrophe programs, such as aggregate excess of loss programs, may still see some increases, depending on the individual risks, Mr. Priebe said. “But there is good dialogue between cedents and capital providers on developing program structures and pricing that makes sense.”

Eurozone heads towards second recession

Single-currency bloc reports 0.2% GDP drop in Q2

Gross domestic product (GDP) in the eurozone dropped 0.2% in the second quarter of 2012 despite growth in Germany and the Netherlands.

This follows on from zero growth in the single-currency bloc in the first quarter of the year

If GDP falls again in the third quarter, the eurozone will enter its second recession in three years.

The German economy grew by 0.3% and the Netherlands’ by 0.2%, while France’s growth was flat. But this failed to offset declines elsewhere.

There are also concerns that stronger economies such as Germany and France will not be able to keep up their current performance. The Financial Times quoted BNP Paribas economist Catherine Stephan as saying: “Against a backdrop of high tensions in financial markets, weak domestic demand among almost all eurozone members, output may fall over the next quarter.”

Lorica takes three from Towergate in hiring spree

Broker also taps Swinton and JLT for latest recruits

Lorica Insurance brokers has announced five new hires – three from Towergate and one each from Swinton and JLT.

Daniel Schofield joined on 13 August as branch director of Lorica’s newly-opened Leeds office. He was previously area broking and business unit director at Towergate in Leeds. He has also served as a director of DE Ford Insurance Brokers in York.

Also from Towergate are Sapphire Kalinski, who joined Lorica’s Hemel Hempstead SME team as SME account manager on 13 August, and Linda Scurry, who will join the claims team in Hemel Hempstead as claims handler on 4 September.

Kalinski was a personal lines team leader at Towergate, while Scurry was a personal lines manager.

Lorica has also hired former Swinton commercial manager Kelly Belton-Brown as affinities manager. She will join the broker on 3 September.

Former JLT executive Jim Cadle joined Lorica’s head office team on 13 August as sales executive. He has also previously worked for insurers AXA and Travelers.

Commenting on the hires, Lorica chief executive Matthew Bray said: “I am delighted to continue our drive to recruit talented individuals and I look forward to working with them at Lorica Insurance Brokers.”

Scottish police start uninsured driving blitz

Three-day campaign launched

Scottish police have started a crackdown on uninsured and unlicensed drivers, according to The Scotsman.

The police will ramp up checks on drivers’ insurance details, as well as being more vigilant for other driving offences.

Tayside Police head of road policing chief inspector Sandy Bowman said the campaign would increase road safety.

Those caught driving uninsured face a maximum £5,000 fine and possible disqualification. The crackdown will finish tomorrow.

Quindell completes purchase of claims management network

Quindell is paying for the company in stock, and has issued 27.1m new shares to satisfy this. The shares are expected to start trading on the London Stock Exchange’s Alternative Investment Market on 20 August.

Quindell’s rationale for buying ICM is to forge closer relations with the independent claims managers that use the network.

Under the terms of the deal, ICM has pledged to make a profit after tax of £500,000 for the year to to 31 May 2013 and generate cash at least equal to the profit target. If ICM misses its profit or cash targets under the deal, it will pay Quindell the cash equivalent of 6.5 times the shortfall.

In the year ended 31 December 2011 ICM reported turnover of £1.2m and profit before tax of £300,000.

Quindell chairman and chief executive Rob Terry said: “As a result of working with ICM over the past months, a number of joint client contracts have been achieved validating our shared vision for the use of technology to facilitate change within the insurance industry to stamp down the cost of claims.

“These wins and other initial pilots won independently of ICM with a number of major brands has ensured that July has been the strongest month in Quindell’s history, with regards to all key performance indicators (including profit, cash generation and EPS) providing a great foundation for the second half of 2012 and beyond.”

Oval boss Blanc reveals company results in buoyant staff email

Consolidator boosts underlying earnings by 16% and trims debts by £6m

Oval improved its underlying earnings (EBITDAE) by 16% to £17.7m for the year ended in May 2012.

Oval chief executive Peter Blanc fired off an upbeat email to staff revealing that gross sales increased by £5.5m to £108.1m, when compared to the year ended May 2011.

The email read: “We have performed well and should be proud of the progress we have made in the year and the potential it suggests for the coming year….

“We made some very tough decisions in the year; losing some good people in the process, however the result is that the business is leaner and better structured to focus on our future challenges.”

Oval has undergone a big year of transformation at director level. Former chief executive Philip Hodson stepped down to be replaced by Peter Blanc who has installed his own management team. The shake-up led to the exit of operations director Jeff Herdman.

The consolidator also managed to trim its debts by £6m. The 2011 accounts revealed the firm had net debt of £39.7m.

Blanc has previously told Insurance Times of his desire to pay off minority shareholders once he is happy with the firm’s debt dynamics.

He said in June: “Debt-wise we stopped just in time in my view. We called a halt in 2008 when the world started to end just a bit. By the end of this year, we’ll have net senior debt of 1.5 to 2 times EBITDA which in the grand scheme of things is almost insignificant.

“We would have debt where is helpful to the business. If I had my way it would be a nice thing to do to acquire a big slice of those minority shareholders. Its good for two things: it would value enhancing for the rest of the shareholder group and it gives an option of a liquidity event for shareholders where they need a liquidity event.

“We’ve got some shareholders who have been with the company quite a long while, and quite frankly they probably weren’t still expecting to be with the company now.”

Life Insurance Net Inflows In France

Life Insurance News : Net new contracts of life insurance in France was divided by seven in 2011 to 7.6 billion euros, against 51.1 billion in 2010. 

The total premiums fell 9% last year to 189.6 billion, an amount that is very important in terms of flow.This is by far the largest investment in France long life insurance is the first product of the French savings with an outstanding volume of more than 1.3 trillion euros of the French was known in 2011 an economic and financial unprecedented.

An unprecedented context for this product long-term savings

Life insurance has had to deal with sovereign debt crisis that forced insurers to seek the highest-quality and therefore less profitable and the decline in stock exchanges in the second half penalty which also yields .

The funds affected by the euro sovereign debt crisis

German government bonds to 10 years are less than 2.5 point and 3.2 points in French titles which is unprecedented.

Companies of life insurance reduced their exposure to government securities in the countries of southern Europe and tried to diversify

Insurers have been provisioned losses on securities Greek for 60% of their value.

The shares have not been able to play their role of dopant

The shares fell 18% in 2011 in the euro area and Japan. In Italy, the fall was 27% and 17% in France. The shares were down 6% in the UK but also in China 19%, 11% Korea 26% in Brazil and 14% in Mexico. Only the United States have benefited from an increase of 5% of Dow Jones in 2011.

After the return to growth in 2010, investors did not bet on a turnaround as pronounced in 2011. Net growth stopped after the second quarter with a very negative expectations. Economic factors such as the earthquake in Japan and rising oil prices also contributed to slow growth. The second part of the year was dominated by the crisis in the euro area.

Banks that after developing their life Insurance subsidiary in the last twenty years have given their liquidity problems, encouraged their customers to place their availability on passbook accounts which are carried on bank balance sheets.

The highly competitive real estate financial investments

The French continued to invest in stone in 2011 as part of their primary residence or as rental investment in spite of the high value of real estate.

The property has captured some of the savings allocated to investments long before. Due to the repayment of loans, it decreases the portion of income devoted to financial investments. Finally, with the credit crunch, households have had to increase the amount of their personal contributions which resulted in redemptions of long products such as life insurance.

Life insurance is a mature product

The double-digit growth of life insurance could not continue indefinitely.

Life insurance has captured much of the savings flows, but also benefited from transfers from other products with a housing savings scheme (due to a change in the tax system).

The end of translocations explains the smaller increase in life insurance.

In addition, a majority of contracts of life insurance and 64% of the outstanding have over 8 years. The outputs are made with lower taxation under the law, outings encouraged by rumors for years that a tightening of the tax system is to be expected.

Life insurance is the key tool of long-term savings

France has few tools for long-term savings. With the crisis in the financing bank, it is important to maintain funding for the long term especially with the crisis of public debt, the savings market is refocusing country by country. States should be less outside financing. Companies will, moreover, sought their resources more on the bond markets as with banks.