All articles by LII editorial
LII editorial
UnitedHealth on the back foot
A class action lawsuit brought against one of the US largest health insurers, UnitedHealth, in 2006 has reached finality with the company agreeing to pay $895 million into a settlement fund for the benefit of class members In the lawsuit CalPERS alleged that UnitedHealth issued materially false and misleading statements regarding the companys business, its stock option plans, compensation practices and its financial results, while employing manipulative acts in connection with UnitedHealths stock option programmes and financial statements.
Discovery shrugs off US setback
Arguably the most dynamic insurer to have entered the South African market in decades, Discovery has built an impressive business on the foundation laid by its health insurance unit Though Discovery had to admit defeat in the US, its South African and UK businesses continue to forge ahead at a brisk pace Breaking into the US health insurance market is a tough challenge, as South African composite insurer Discovery Holdings has found to its cost
PPI mis-selling still rife in the UK
Despite hefty fines having been handed down, the sales methods employed in the UKs £5 billion ($9 billion) annual premium payment protection insurance (PPI) remain far from acceptable This conclusion was drawn by the Financial Services Authority (FSA) following a mystery shopping exercise it conducted to assess customer experiences of face-to-face branch sales of single premium PPI when sold alongside an unsecured personal loan.
Pension funds being burdened by excessive asset management fees
Pension funds are on the hunt for alpha, the added dash of performance over and above the returns generated by a benchmark index A resultant scramble for services of alternative asset managers has been a primary driver of a substantial increase in investment management fees paid by pension funds, an increase that is not always justified, cautions consultancy Watson Wyatt in a research note entitled A fairer deal on fees According to Watson Wyatt, the average investment management fee paid by pension funds and superannuation funds worldwide has jumped by almost 70 percent, from 65 basis points of fund asset value in 2002 to 110 basis points at present.
CNP looks to new markets for growth
French insurer CNP Assurances (CNP) and Greek bank Marfin Popular Bank (MPB) have entered into a bancassurance alliance initially targeting two of Europes most underinsured markets, Greece and Cyprus Under the terms of the agreement CNP and MPB will enter into an exclusive 10-year renewable distribution agreement which carries an extension option in other countries where MBP operates Cementing the alliance, CNP will acquire a 50.1 percent stake in MPBs life insurance units for a cash consideration of 145 million ($225 million) plus an earn-out of 20 million linked to business objectives
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Asset management boost for Generali
Asset management boost for Generali Assicurazioni Generalis expansion strategy in asset management took a decisive step forward in November, with the announcement that it would acquire Swiss Lifes wholly owned Swiss private banking subsidiary, Banca del Gottardo (BDG), for 1.069 billion ($1.59 billion)
Benfield agrees to enter Aon’s fold
In a deal worth $1.75 billion, Aon Corporation is to acquire Benfield Group, a move repressing notable consolidation in the global reinsurance brokerage and risk management industry Benfield, which is UK-based and incorporated in Bermuda, will add annual revenue of almost $1 billion to Aons existing revenue base of about $7.5 billion. In addition to a sizable revenue boost Aon believes Benfield will add significantly to it capabilities in a number of areas
Insurers face life settlements risks
Insurers face life settlements risks Adding its weight to the ongoing controversy surrounding the US life settlements industry, rating agency Fitch has warned that life settlements expose life insurers and their reinsurers to a variety of risks in their core individual life segment
Uniqa entrenches its position in Albanian insurance market
Austrian insurer Uniqa is to acquire a 46 percent stake in Albanian composite insurer Sigal for an undisclosed consideration The purchase cements a co-operation agreement entered into between the two insurers in March 2007 that included an option for Uniqa to acquire a majority stake in Sigal in 2010 Explaining the reason for the decision to purchase a stake in Sigal prior to 2010, Uniqa CEO Konstantin Klien said: The positive experiences we had in the past months of close co-operation with Sigal have moved us to skip a step in our staged plan for acquiring a majority of the company.
Dai-ichi Mutual launches new insurer
Dai-ichi Mutual launches new insurer The final stage of Japans financial markets deregulation will open the door for banks to compete with insurers across the full range of insurance products In anticipation of full deregulation, Japans second-largest life insurer, Dai-ichi Mutual (Dai-ichi), has announced the launch of a new insurance company, Dai-ichi Frontier Life (DFL), which will open for business on 1 October this year