All articles by LII editorial
LII editorial
Legal & General’s rating hit by UK market woes
Reflecting its continued negative view of the UKs life market, rating agency Moodys Investors Service has downgraded the insurance financial strength rating of one of the countrys largest life insurers, Legal & General (L&G), from Aa3 from Aa2. The reason for its move, according to Moodys, is that the company expects any UK economic growth will be sluggish and a high level of household indebtedness will limit life insurance market growth opportunities in the near-term, negatively impacting UK life insurers business and profitability growth.
Risk transfer deals soar to new record
With the effects of the financial crisis behind it, the UKs defined benefit risk transfer market continued its rapid growth during the first quarter of 2010 In an otherwise lacklustre UK life market, the defined benefit (DB) pensions risk transfer sector shone in the first quarter of 2010
Taiwan’s accounting standards blamed for driving foreign life insurers out of market
These included Asian-market orientated UK insurer Prudential which, in June 2009, sold its agency distribution business to Taiwanese insurer China Life Insurance Company of Taiwan for a nominal amount of T$1 ($0.03)
LIC rides high in India
Indias largest life insurer, state-owned Life Insurance Corporation (LIC), is sustaining its market share recovery, reveals April 2010 data released by the Insurance Regulatory and Development Authority (IRDA). According to the IRDA, LIC recorded first-year premium income of INR41.73bn ($750m) in April, up 97.5% compared with INR21.13bn 12 months earlier, and was the primary driver of a 59.6% increase in total industry new business to INR57.46bn LICs premium income surge gave it a 72.6% market share, up from 58% in April 2009 and its highest since the 2003-04 fiscal year.
EU takes US to task on reinsurance tax proposal
Angelos Pangratis, acting head of the European Union (EU) delegation to the US, has been praised by the Coalition for Competitive Insurance Rates (CCIR) for his stance in opposing action to deny US tax deductions to foreign insurers on reinsurance cessions to affiliates outside the US Pangratis expressed the EUs opposition to the proposed tax move, which forms part of President Obamas 2010 fiscal year budget proposal, in a letter to, among others, US Treasury Secretary Timothy Geithner. Pangratis wrote: We believe the proposal is at odds with the principle of a level playing field for all US insurers and reinsurers, by introducing a tax regime that would penalise foreign-owned US insurance companies that reinsure their risks with affiliated foreign companies.
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The Hartford aims to slash the cost of cover
US insurer The Hartford aims to slash permanent life cover costs thanks to its new underwriting process which it claims substantially improves its ability to assess an individuals health and mortality risk. According to the insurers chief medical strategist, Robert Pokorski, it is estimated that more than half of new policyholders will qualify for one of the companys two lower-cost preferred classifications and could save significantly on annual premiums.
Poland still an unfinished growth story
Having shrugged off deteriorating economic conditions in 2008 to produce record premium income growth, Polands life market succumbed to global economic woes in 2009
Major regulatory change lies ahead for Australia
The Australian Prudential Regulation Authority (APRA) has taken the first step towards the introduction of significant change in the regulation of the countrys insurance industry with the release of a discussion paper describing its proposals to update capital standards. Proposed changes for general insurers are quite limited and focus on more risk-sensitive capital standards
Uniqa reports solid gains in Slovakia
Austrian composite insurer Uniqa made impressive gains in Slovakias insurance market, bucking a downturn in the countrys life and general insurance sectors. In the life insurance sector, which saw a 4% year-on year fall in premium income, Uniqa reported premium income of 28.1m ($38m), up 7.9% compared with 2008
Aviva aims to axe UK final salary schemes
In a sign of the times UK insurer Aviva has taken the first step towards closure of its Aviva and RAC final salary pension schemes to accruals from 1 April 2011 According to Aviva, the UK and RAC final salary schemes take two-thirds of Avivas contributions to UK staff pension arrangements, yet only one-third of the insurers UK workforce of 21,600 have the final salary benefit