All articles by Stafford Thomas

Stafford Thomas

Features

Liquidation toll begins mounting

Setting the stage for the US life and health insurance industrys biggest failure in five years, the Pennsylvania Insurance Department (PID) filed court petitions on 2 October seeking orders of liquidation for Penn Treaty Network America Insurance Company (PTA) and its subsidiary, American Network Insurance Company.PTA, a long-term care insurer founded 35 years ago, has some 120,000 policyholders in all 50 states and the District of Columbia

Law, regulation and tax

European Commission aims to sniff-out risks

I commend this package to the Council and Parliament for rapid adoption, so that the new structures can begin functioning in 2010.Among key changes to the EUs regulatory landscape, the proposed legislation will see creation of a new European Systemic Risk Board (ESRB) to detect risks to the financial system as a whole and to issue early risk warnings to be rapidly acted on.Commenting on the ESRB the EUs Economic and Monetary Affairs Commissioner Joaqun Almunia said: The creation of a European Systemic Risk Board to detect and prevent risks to financial stability in the EU and new arrangements to improve supervision at institution level will go a long way towards tackling the imbalances in our financial systems and solving the weaknesses in our financial supervision system that are at least partly to blame for the financial crisis.In addition to the ESRB, the legislation will create a European System of Financial Supervisors (ESFS) composed of national supervisors, and three new European supervisory authorities for the banking, securities and insurance and occupational pensions sectors

Company analysis

Generali talks up Vietnam’s big growth potential

Generali will become Vietnams 12th life insurer.Speaking enthusiastically about prospects in Vietnam, Generalis CEO Sergio Balbinot praised Vietnams government for steering the economy along what he termed a virtuous path by creating solid development opportunities for the life and general insurance market.Adding attraction to what Generali views as an insurance market ranking amongst those with the highest growth potentials is Vietnams very young, savings-oriented population, he added.Vietnams economy is also among the worlds top performers, having achieved an average annual GDP growth rate of some 8 percent over the past five years.GDP is anticipated to grow at an average of 6 percent annually over the next 10 years, according to Generali.Other factors also favour Vietnams insurance market, noted Balbinot.After entering the World Trade Organisation Vietnam is reforming insurance law with the clear intent of increasing the levels of insurance distribution in the country, he said.Indeed, insurers are receiving strong backing from the government which aims to raise per capita insurance spending from the current $15 to $43 and penetration of insurance premiums from 1.4 percent of GDP to 4.2 percent by 2012.Notably, in a country with a population of 85.8 million, only 5 million insurance contracts were in force at the end of 2008, according to Dai-ichi Life Vietnam.Balbinot continued that conditions favour Vietnam becoming one of Generalis strategic growth markets in Asia.Experience gained in developing our activities in China and in Southeast Asia will be extremely valuable for the future launch of our activities in Vietnam, he concluded.With the addition of Vietnam, Generalis operational markets in Asia will increase to eight, along with China, Hong Kong, India, the Philippines, Indonesia, Thailand and Japan.In 2008 Generali earned life premium income of 270 million ($395 million) in the Asian region

Features

Satisfied clients don’t guarantee success

However, research conducted by Univeris indicates that this measure no longer holds true and that reliance on it can have serious consequences for an advisory practices growth potential.No doubt the average independent financial adviser (IFA) would be relieved to know that his or her clients are satisfied with the level of service delivery Unfortunately, in todays market satisfaction is just not enough, indicates a study undertaken by Univeris.In the study, Univeris highlights that clients have a new set of expectations, needs and desires determining their relationships with their advisers

News

US employers take a dim view of health care insurance reform

Of concern is that conclusions being reached are far from positive, reveals a survey of employers undertaken by consultancy Watson Wyatt in mid-September.Escalating health costs have been top of mind for employers for years now, but the reform debate has pushed this issue to a critical point, said Ted Nussbaum, North America director of group and health care consulting at Watson Wyatt.While the national debate centres on options for expanding coverage and ways to generate revenue to fund reform, employers are concerned that health care costs will rise even higher as a result of the new legislation.In its poll Watson Wyatt found that 73 percent of employers believe health care insurance costs will increase if health care reform legislation is enacted