All articles by LII editorial
LII editorial
The Hartford bows to pressure
The Hartfords actions arguably represent an impressive display of the power of shareholder activism. These actions include The Hartfords decision to place its individual annuity business into runoff, as well as pursuing sales or other strategic alternatives for its individual life, Woodbury Financial Services and Retirement Plans businesses. The actions came less than a month after John Paulson, president of The Hartfords largest shareholder, hedge fund management firm Paulson & Co, demanded that it take action to unlock shareholder value.
US life insurers in good shape despite tough environment, reports Moody’s
US life insurers results in Q4 of 2011 continued to reflect a tough environment, says Ann Perry, a vice-president at Moodys Investor services. She notes that US life insurers overall reported modest improvements in operating profit and net income in 2011 but that in the fourth quarter net income came in slightly lower than in the same period in 2010.
Hyman’s Robertson moves to simplify pension fund de-risking
The new indices track the survival patterns of members of pension funds, plotting the differences compared with the population at large and break down the experience for retirees with different sizes of pensions
AIG’s payment further reduces its debt to Uncle Sam
In the latest in a series of repayments, the insurer has made the final payment of $1.5bn to withdraw the US Treasurys interest in AIA Aurora, a special purpose vehicle created to hold ordinary shares in AIGs formerly wholly-owned subsidiary, American International Assurance.
Axa targets growth in Romania
Under the contract IBM will provide systems integration and management services to assist the French insurers Romanian subsidiary, SC AXA Life Insurance, beef up risk management, consolidate data and automate several areas of the insurance process
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Focus on long-term care products
A total of 71% of financial advisers in the UK believe that providers should create new prefunded long-term care products, according to a new study. The research from Defaqto, a financial research and software company, comes after the UKs Commission on Funding of Care and Support published its report Fairer Funding for All in July 2011, which proposed a lifetime cap on care costs. The preferred figure is £35,000 ($55,829) which is the amount someone in long-term care would be responsible for, after which the government would fund care.
Insurers boost technology spending
Spending on information technology (IT) by the worlds insurance companies is rising and will reach a total of $140.6bn in 2012, predicts Celent. This level of spending on IT would represent an increase of 6.3% compared with 2011 when, according to the research firm, IT spending fell by 1.1%. Looking ahead, Celent anticipates that insurers combined spending on IT will grow at an annual average of 5.8% over the next two years to reach $157.5bn in 2014.
UK enhanced annuity sales surged in 2011
With conventional annuity rates being driven down by low interest rates, UK consumers are increasingly recognising the income benefits to be derived from enhanced annuities. This was clearly evident in 2011, a year in which enhanced annuity sales surged by 22% compared with 2010 to £3.02bn ($4.8bn), according to Towers Watson. Last years strong demand for enhanced annuities, which are available to people with medical conditions or lifestyles that lower their life expectation to below average, continued a trend that has gained momentum since they were introduced in the UK in 1995.
Insurance offers ‘golden opportunity’ for US banks
Many US banks are missing out on a golden opportunity to increase service fee income and boost customer retention through greater cross selling of insurance and investment products. This is the key finding of a study, The Value of an Investment and Insurance Customer to a Bank, sponsored by Prudential Financial and Western National Life. The studys results provide the proof needed for banks and credit unions to seize the opportunity for developing investment and insurance relationships with existing customers, comments Kenneth Kehrer, who co-authored the study together with Christine Kehrer and Peter Bielan
Auto-enrolment hopes fade as Populas highlights concerns
There are high hopes that auto-enrolment into workplace pension schemes will increase the number of workers in the UK saving for retirement through a pension scheme by up to 9m. But with just six months to go before auto-enrolment commences, the outlook for the success hoped for is fading, indicates a survey commissioned by the National Association of Pension Funds (NAPF). Conducted by research firm Populas, the survey reveals that 33% of those who are eligible for auto-enrolment intend to exercise their right to opt out.