All articles by LII editorial
LII editorial
Brokers unite to oppose reform
A coalition led by the US Council of Insurance Agents and Brokers (CIAB) has been formed to oppose the swift implementation of health insurance reform, a key objective of President Barack Obama and Democrat Party leaders If approved the impact on private health insurers and brokers could be devastating.As matters now stand, reform centred on the proposed creation of a public health plan will be included in the reconciliation of the 2010 budget announced by the president in February 2009
Australian life market takes a big hit
Years of solid growth in Australias life insurance industry came to an abrupt halt in 2008 as a number of factors contrived to send premium inflows plummeting Australias life insurance industry went from feast in 2007, a year in which premium inflows surged by 37.4 percent, to famine in 2008 as inflows slumped by 28 percent to A$37 billion ($27 billion)
Fortis completes its makeover
Ending months of protracted negotiations, Fortis Holdings shareholders have voted in favour of a transaction under which French bancassurer BNP Paribas (BNPP) will acquire 75 percent of Fortis Bank from the Belgian government In addition, 25 percent of Fortis Insurance Belgium (FIB) will be transferred to Fortis Bank giving BNPP an effective 18.8 percent stake in the composite insurer
US reinsurance market faces a legislative upheaval
A controversy is raging over legislation under consideration by Congress that would radically alter taxation of foreign reinsurers in the US by closing a loophole that enables them to strip income from writing US business into tax havens Contrasting with this, domestic reinsurers are taxed in the US on income derived from their US business.Vehemently opposing change is the Coalition for Competitive Insurance Rates (CCIR), a group that includes the US-based Risk and Insurance Management Society (RIMS), the Association of Bermuda Insurers and the Organisation for International Investment, a body representing US subsidiaries of companies headquartered abroad Reinforcing the CCIRs opposition to change consultancy The Brattle Group found in a study undertaken for the group that legislation to increase tax on non-US reinsurers would reduce the supply of reinsurance by up to 20 percent and add between $10 billion and $12 billion annually to US insurers costs
Mixed results from China’s insurers
Chinas equity market provided welcome relief for the countrys insurance industry in the first quarter of 2009, with the benchmark Shanghai Composite Index rising 28 percent, compared with a 34 percent decline recorded in the first quarter of 2008 The markets recovery powered a significant improvement in the industrys total investment income which rose 41 percent compared with the first quarter of 2008 to CNY43.3 billion ($6.3 billion), according to the China Insurance Regulatory Commission Boosted by the stronger equity market, China Life, the countrys largest life insurer, reported a CNY841 million investment gain in the first quarter of 2009, a major improvement on the CNY5.5 billion investment loss in the first quarter of 2008
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Chesnara talks up Swedish buy
Snapping up an apparent bargain, UK insurer Chesnara has acquired Swedish life insurer Moderna Life for SEK250 million ($29.5 million) The cash consideration represents a 63 percent discount to Moderna Lifes embedded value of SEK670 million at the end of 2008, Chesnara estimates.Chesnara CEO Graham Kettleborough said: In my opinion, this is a high-quality business which is well positioned in the market, which we have bought at an attractive price. Moderna Life is being bought from Moderna Finance a unit of Icelands third-largest bank, Glitnir Bank, in which the Icelandic government bought a 75 percent stake in a rescue move in September 2008.
UK PPI market reform hits a snag
A ruling by the UKs Competition Commission (CC) to bring sweeping reform to the countrys payment protection insurance (PPI) market in 2010 has hit a snag Barclays Bank and Lloyds Banking Group are appealing against the ruling to the Competition Appeal Tribunal.In particular, the banks are opposed to the banning of the sale of PPI by a credit provider within seven days of the sale of credit.
Asset management M&A activity slows
Merger and acquisition (M&A) activity in the asset management industry got off to a slow start in 2009, with 37 transactions announced in the first quarter compared with 57 in the first quarter of 2008, investment bank Jefferies Putnam Lovell (JPL) reported Despite this, JPL anticipates that, with insurers and banks selling desirable asset management operations to raise capital, 2009 will still be a year which will see headline-grabbing M&A transactions, though fewer in number than in 2008. As they seek ways to raise capital, distressed banks and insurers are finding their fund businesses are among the most saleable assets, with pure-play asset managers and private equity firms the most motivated buyers, said Aaron Dorr, JPLs New York-based managing director.
Making the saving decision simpler
Saving for retirement is one thing Making sure you are saving enough is another, and the difference between the two is the rationale behind an online peer data comparison tool launched in the US by Dutch insurer ING With a dedicated website (http:www.ingcompareme.com), the tool is designed to enable anyone to see where they stand in relation to others on a wide range of saving, spending, investing, debt and personal finance matters.
Norwich Union takes top position in UK equity release market
In a close race, Norwich Union (NU) ousted rival insurer Prudential from the top position in the UKs equity release market in 2008 According to NU it achieved total equity release sales of £249 million ($360 million), marginally ahead of Prudentials sales of £242 million NUs equity release sales in 2008 were up 14.7 percent compared with sales of £217 million achieved in 2007