All articles by LII editorial
LII editorial
Taking a close look at non-disclosure
Though honesty may be the best policy, this does not appear to be a sentiment shared by the 1.5 million life insurance policyholders in the UK that AXA estimates to be at risk of having a claim rejected. These policyholders 7 percent of the total number in the UK have put themselves at risk by knowingly having misled insurers when completing application forms in a quest for what AXA terms a desire for the perfect insurance self.
The long road to optimum ERM
It is starkly evident that certain life insurers, banks and other financial services companies have experienced far more severe financial damage at the hands of the US subprime residential mortgage debacle than others A recent study by the Senior Supervisors Group (SSG) concluded that the reason lay in variations in the levels of adherence to effective enterprise risk management (ERM) In its finding the SSG, which comprises US, UK, French, German and Swiss supervisory agencies, stressed that as a result of poor ERM many companies failed to react to an array of data indicating rising stress in the sub-prime mortgage market.
Skandia UK turns its back on the ABI
In a surprise move, Skandia UK announced on 3 November that it is ending its membership of the Association of British Insurers (ABI), an industry body with some 400 members that between them provide 94 percent of domestic insurance services in the UK A unit of UK-domiciled life insurer Old Mutual, Skandia UK had total assets under management of £39.5 billion ($62 billion) at the end of June 2008. Rationale for Skandia UKs decision is based on its view that the position adopted by the ABI and many of its members on the issue of financial advice is wrong and will undermine the role of independent financial advisers (IFA).
Prudential gets Saudi Arabian asset management go-ahead
In a significant development in what it termed an ambitious expansion plan in the Gulf region, UK insurer Prudentials Asian asset management unit Prudential Asset Management (PAM), has received approval from Saudi Arabias Capital Market Authority to establish an asset management company The new company will be formed as a joint venture with Saudi Arabian bank Bank AlJazira and is to be named Prudential Jazira Asset Management. In addition to asset management the new venture will incorporate Bank AlJaziras takaful (Islamic Sharia law compliant) insurance business.
Growing pressure on US insurers to enhance management systems
Watson Wyatts view is based on what it termed significant change in the financial reporting environment, driven by the movements toward an international reporting standard and toward principles-based approaches to setting reserves and capital for US life insurers The consultancy pointed out that at the same time regulations are changing, risk measurement and management demands are becoming more complex and, indeed, some insurers may find that their existing systems are a source of risk that needs attention. Increasingly, there is a competitive advantage for executives who are able to undertake a sophisticated analysis of their companys performance and explain it to stakeholders, said Buck
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Standard Bank bolsters African bancassurance
In a move long lobbied for by institutional investors the Standard Bank of South Africa (SBSA) is to remove a pyramid structure through which it has controlled South African life insurer Liberty Group since 1999 To achieve the restructuring SBSA is to make a cash offer worth a total of ZAR4.4 billion ($575 million) to acquire the 40.83 percent interest it does not own in the top company in the pyramid, Liberty Holdings, which has a 52.2 percent stake in Liberty Group SBSAs ZAR219.25 per share cash offer to Liberty Holdings minorities represents a 23.2 percent premium compared with Liberty Holdings closing price immediately prior to SBSAs announcement.
Allianz targets Middle East growth
Allianz targets Middle East growth Allianz has designated the Middle East as its third major growth region, a strategic decision the European insurer has marked with the establishment of a regional office in Bahrain that will have responsibility for its businesses in Bahrain, Egypt, India, Jordan, Lebanon, Pakistan, Saudi Arabia and Sri Lanka
Reward day for whistleblower
Honesty displayed by Cleveland Tyson, a former vice-president of US health insurer Amerigroup, has been amply rewarded: to the tune of $56.25 million. The sum is his share of $225 million which Amerigroup has agreed to pay as a settlement to resolve claims its Illinois subsidiary defrauded the Illinois Medicaid programme, in a case brought by the United States government and the State of Illinois. Specifically, the settlement resolves allegations that Amerigroup and its Illinois unit systematically avoided enrolling pregnant women and unhealthy patients in their managed care programme in Illinois, as they were more costly to treat and would have eroded Amerigroups profit margin.
Cigna launches medical crystal ball
Increasingly, health insurers and employers are acknowledging that a proactive approach to healthcare is a major weapon in the continuous fight against spiraling health costs One of the US largest health insurers, Cigna has taken up the challenge with the introduction of its Trend Management System (TMS) which takes the unique approach of predicting the likelihood of an individual experiencing serious health problems years in advance of them occurring. TMS is based on research conducted over more than 30 years by researchers headed by Dee Edington, director of the University of Michigan Health Management Research Center
Insurer takes a bold leap into Web 2.0
Insurer takes a bold leap into Web 2.0 Web 2.0, a broad term covering emerging internet-based communications, is being recognised by corporates as a means of enhancing efficiency and disseminating knowledge