All articles by LII editorial
LII editorial
South African insurers stage a comeback
South African insurers stage a comeback South African life insurers could have regained the confidence of consumers, believes Gerhard Joubert, CEO of industry body the Life Offices Association (LOA) According to the LOA, new recurring premium RA funds of ZAR747.1 million ($115 million) were recorded in the first half of 2007, up 36 percent compared with the same period last year
SEC regulation a mixed blessing
Rule 151A, the US Securities and Exchange Commissions (SEC) proposed regulation that would classify indexed annuities as securities, has far-reaching implications for the insurance industry, believes Rachel Alt-Simmons, research director in the insurance practice at consultancy TowerGroup Alt-Simmons explained that indexed annuities have offered investors a middle-ground option between low-return fixed annuities and variable annuities that are fully exposed to market volatility
A tough road to economic recovery
Klaus Schmidt-Hebbel, the Organisation for Economic Co-operation and Developments (OECD) recently appointed chief economist, has delivered a message of hope for global economic recovery tinged with a strong element of caution. Our OECDs base scenario is built on the premise that the current freeze in short-term financial markets will be resolved in a relatively short time span, but that bank deleveraging and recapitalisation, as well as re-building of trust in the markets, will take much more time, said Schmidt-Hebbel. He continued that the OECD expects a significant weakening in the world economy, with many OECD economies slipping into recession sooner or later. He added that economic recovery will be slower than in recent economic downturns, though the actual pace of recovery will depend largely on how quickly financial markets resume transactions and lending, even if that lending remains relatively restricted.
Swiss Life targets accelerated growth
A share buyback totalling CHF2.5 billion ($2.4 billion) over the next two years and a bolstered distribution structure are among key inputs into Swiss Lifes strategy to achieve average annual earnings per share growth of 12 percent and maintain return on equity at above 12 percent While these objectives could be viewed as conservative, they represent a show of confidence from Switzerlands largest life insurer, which has recovered well from net losses of CHF1.7 billion in 2002 and CHF115 million in 2001 The targets were announced at an investors day held in December 2007 and followed Swiss Lifes recent sales of its private banking unit, Banca del Gottardo, to Italian insurer Assicurazioni Generali for CHF1.875 billion and of its Belgian and Netherlands units to Netherlands bancassurer SNS Reaal for 1.45 billion ($2.12 billion) to 1.54 billion.
Complacency takes a heavy toll
Financial markets are in turmoil sparked by the collapse of a housing boom in the US built largely on the shaky foundation of subprime mortgage lending A wealth of evidence indicates that more robust risk management would have spared many financial institutions from the pain they are now enduring. Addressing the European Parliament on the financial crisis sparked by the US subprime mortgage fiasco, commissioner for internal market and services Charlie McCreevy emphasised: In the light of events over the past year it has been incredible to see how little understanding senior managers of financial institutions had of the risk they were taking on board.
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Automating mortality management
Life insurers are starting to consider using mortality management technology systems as a strategy to improve profitability, reveals a study unveiled at industry body ACORD LOMAs Insurance Systems Forum held in Las Vegas in May The study was conducted by Transamerica Reinsurance, a US-based unit of Netherlands insurer AEGON, and MajescoMastek, a US-based unit of Mastek, an Indian IT company focused on the development of insurance industry software and technology solutions development. While insurers historically have not invested in technology tools and processes to manage mortality expenses, that could be changing as insurers recognise the potential to increase profits and reduce costs, said Harold Apple, senior vice president of VectorMastek, a unit of MajescoMastek.
Allianz shakes up Australian life insurance market
Allianz shakes up Australian life insurance market In a move it described as shaking up the Australian life insurance markets status quo, European insurer Allianzs Australian unit has slashed the cost of cover and greatly simplified the application process
IDBI Fortis launches in India
Almost two years in the making, Indias newest life insurer IDBI Fortis Life Insurance (IDBI Fortis) has commenced business operations Formation of IDBI Fortis dates back to July 2006 when negotiations commenced between Belgo-Netherlands bancassurer Fortis, public sector bank the Industrial Development Bank of India (IDBI) and Indian private sector bank Federal Bank Regulatory approval for the formation of IDBI Fortis, Indias 12th private sector life insurer, was received in December 2007.
New product combines life and health insurance
New product combines life and health insurance Life Investors Insurance Company of America (Life Investors), a unit of Netherlands insurer AEGON, and US insurer Madison National Life Insurance have joined forces to launch a product that combines all the key features of health, life and disability insurance
Minnesota attorney general sues third insurer for miss-selling
Lori Swanson, the Attorney General of the US state of Minnesota, has brought a charge of undertaking unsuitable sales of long-term deferred annuities to Minnesota senior citizens against Midland National Life Insurance Company Iowa-based Midland National became the third insurer in 2007 to be sued by Swanson for the miss-selling of annuities In the lawsuit, Swanson alleges that Midland National did not comply with the states suitability laws that require an insurance company to ensure an annuity is suitable for the particular senior citizen