ABI announces ‘UK insurance industry remains strong’

The Association of British Insurers (ABI) announced today figures related to the UK Insurance market and report that despite the recession, the UK insurance industry remains strong overall.

• The number of people employed in the sector in 2008, at 313,000, rose slightly (by 1.3%) over 2007, and accounted for nearly a third of all financial services jobs.

• Net premium income from general insurance in 2008 was £34 billion, up 3% on 2007.

• Premium income for overseas business during 2008 was £54 billion, up 13% on 2007.

• Every day, UK insurers pay out nearly £300 million to customers. Of this, £239 million is in pensions and life insurance benefits, and £57 million in general insurance, such as motor and household, claims.

• Despite a fall in life and pensions new business, long-term premium income in 2008 was the third highest in the last decade.

Dr Rebecca Driver, the ABI’s Director of Research and Chief Economist, said:

“The UK insurance industry continues to show resilience in the recession. But there is no room for complacency. These remain difficult times, and the UK can only remain a world leader in insurance if it stays competitive. The role of insurers, as major investors and providers of financial security to millions of customers, is vital in building a sustainable economic recovery. Insurers must not be forced to move overseas, and the UK must be able to attract new capital.

“Future regulation must therefore strike the right balance between proportionate consumer protection, and ensuring the sector is strong and competitive. This will enable the industry to continue to innovate, and provide products that are relied upon by millions of families and businesses.”

The Hartford appoints Liam E. McGee as Chairman and CEO

The Hartford Financial Services Group, Inc. announced today that Liam E. McGee has been appointed Chairman of the Board of Directors and Chief Executive Officer, effective October 1, 2009. Until recently, McGee was President of the Consumer and Small Business Bank for Bank of America Corporation where he operated the nation’s largest retail bank, serving more than 50 million consumer households and small businesses with over 6,100 domestic banking centers, nearly 100,000 employees and the nation’s largest online and mobile bank.

Michael G. Morris, The Hartford’s presiding director said: “Liam’s strong track record of success in leading large, complex financial services organizations makes him the ideal person to build on The Hartford’s strong foundation. “He has an outstanding combination of leadership skills, financial acumen and operational and technology experience, along with a demonstrated ability to evolve and profitably grow businesses in response to changing business environments and customer needs. We welcome Liam to The Hartford and look forward to working with him as he leads the company into its third century.”

McGee stated: “The Hartford has a strong brand that has been associated with trust and integrity for 200 years, great business franchises, a talented team of employees, and enduring relationships with distribution partners. In an environment of intense competition, technological innovation and changing consumer and business behavior, there are clear opportunities to create competitive advantages. By leveraging and building on The Hartford’s strengths, we will enter our third century as an industry leader, well positioned to achieve the expectations of our customers, shareholders, partners and employees.”

McGee succeeds Ramani Ayer, who in June announced his intention to retire from the Company. Ayer will resign as Chairman and CEO effective October 1, 2009 and will retire on November 1, 2009, following a brief transition period. Ayer has served as Chairman and CEO of The Hartford since February 1997 and has spent his entire career serving the company.

Commenting on the announcement, Ayer said: “Liam is a proven leader in the financial services industry with an outstanding set of skills, a deep appreciation of balancing risk and return, and broad experience in a variety of financial businesses. He also shares The Hartford’s values, including product and customer service excellence, integrity, and a commitment to giving back to the communities in which we operate. I look forward to working with Liam to ensure a smooth transition.”

“Ramani’s deep industry experience, integrity, and strong leadership skills have been instrumental to the success of The Hartford over the course of his 36-year career with the company,” added Morris. “We are grateful for the contributions he has made and for his continuing dedication to The Hartford. On behalf of the Board and our 29,000 employees, I sincerely thank Ramani for his lifetime of service to – and his distinguished leadership of – The Hartford.”

New record established for Irish international re/insurance market

DIMA, the representative body for the international re/insurance industry in Ireland, today announced another record year of premium income growth in its membership. The annually-produced DIMA membership statistics show that gross written premiums for 2008 reached €26.2bn, with net premiums increasing to €21.7bn.

Other statistics include:

• total assets of DIMA members:                      €65.1bn

• total capital and surplus:                                 €12.4bn

• total cash and investments:                            €36.2bn

• number of DIMA member companies:                    61

• number of employees:                                             876

Sarah Goddard, CEO of DIMA, said: “Despite the general turmoil last year in the international financial services sector, re/insurance substantially has proved resistant to the tribulations affecting other areas and shown its overall resilience as an industry. In Dublin’s 20^th year as an international re/insurance hub, these statistics show that the market is truly established as a leading centre for the industry. We continue to see new companies set up operations in Dublin, and the majority of companies already established here expect to see growth in their business over the course of this year.”

Commenting on DIMA’s findings, Barry O’Leary, IDA, CEO said, ‘’Another year of premium growth in DIMA membership is a welcome reflection of the resources the Irish Government with the support of IDA Ireland have dedicated to attracting investment in the International Services Sector to Ireland. Ireland continues to grow as a leading centre for international financial service activities and IDA looks forward to continuing to work with DIMA to avail of future opportunities in the international re/insurance industry.”

Willis acquires 100% of its Argentina Businesses to form Willis Argentina S.A.

Willis Group Holdings, today announced that it has completed the purchase of 100 percent of the share capital of Herzfeld Willis S.A. (Retail operation) and Willis S.A. (Reinsurance operation) in Argentina. The business will now be known as Willis Argentina S.A. Terms of the transaction were not disclosed.

Willis established a presence in Argentina in 1999 by acquiring 20 percent of Herzfeld & Levy, a leading national insurance broker, to become Herzfeld Willis, and setting up Willis S.A., a reinsurance company in which the Group took a 60 percent stake, with the remaining 40 percent owned by two private individual investors. In 2000, Willis acquired a further 20 percent stake in Herzfeld Willis and then in 2004, became the majority shareholder of Herzfeld Willis by acquiring a further 20 percent stake to move to an overall 60 percent holding. The latest deal sees Willis increase its stake to 100 percent in both the retail and the reinsurance operations.

Eugenio Paschoal, Chief Executive Officer for Willis Latin America, said: “We have taken full ownership of Willis Argentina because we see excellent growth prospects in this country and are committed to becoming the leading broker there. We have ambitious expansion plans for Latin America as a whole and a strong foothold in Argentina will help us maintain the double-digit growth momentum that we have built up in the region.”

Fabiana Scalone, Chief Executive Officer of Willis Argentina S.A., said: “Together with Willis, we have developed a dynamic hub of insurance and reinsurance broking expertise in Argentina. By coming fully under the Willis umbrella, we believe that our clients will continue to benefit from high-touch local service, backed by the extensive global resources and expertise of one of the world’s leading broker power houses.”

Willis Argentina has 130 Associates located in its office in Buenos Aires. All told, the global broker has 26 offices throughout Latin America in Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela.

Recession makes employees worry about their retirement

Many employees are waiting for an economic recovery before moving forward with retirement, and employers are taking the same attitude with retirement program changes and risk issues, according to Aon Consulting.

The survey concerned 1,313 employers nationwide in its 2009 Benefits & Talent Survey, and found that more than 90 percent are not changing their retirement programs, either in terms of benefits or management. Along those lines, 87 percent of respondents said employees are delaying retirement due to economic conditions. What’s more, a third of employers have less than 70 percent of their employees enrolled in their defined contribution (DC) plans, with the majority (67 percent) saying they believe workers are not enrolled because they can’t afford it.

Meanwhile, 38 percent of these employers believe employees have little knowledge of the funds needed for retirement and 52 percent said employees have only some idea of what’s needed to retire with enough funds. Just 8 percent believe their employees have a strong understanding of the funds needed in retirement. Workers wanting to learn more about retirement savings have turned to their employers for additional information. In fact, 64 percent of responding employers said there was an increase in investment-related questions in 2008 vs. 2007, but only about a third of these organizations increased their communications around the importance of saving for retirement last year, while 62 percent said their communication remained unchanged from the previous year.

Amol Mhatre, senior vice president responsible for retirement innovation said: “The ‘wait-and-see’ attitude is not surprising”. “We may continue to see dramatic economic swings, as interdependencies grow in the global economy, and retirement programs and savings can’t stop with every downturn. Retirement security for working Americans will soon become a challenge for policy makers and employers, along the lines of health care reform. With a trend toward individual responsibility, increased mobility, complex investment choices, rising cost of health care and improved life expectancy, employers may have to do more to help workers understand and plan for their retirement needs.”

In addition to not changing their retirement communications strategy, 92 percent of organizations are not changing their pension/defined benefit (DB) programs in the near future, citing the high cost of company-required contributions (71 percent), volatility (47 percent) and administrative costs (35 percent) as the main reasons. Employers also are not changing the risk profile of their pension plans, as two-thirds of these organizations have not made changes to their pension investments during the past two years and do not intend to do so in the next two years.

The survey also revealed that only 45 percent of employers offer a DB plan to their employees. That said, 41 percent of employers have frozen their pension plans to new entrants, 25 percent have frozen their plans entirely and do not have a strategy regarding plan termination, and 20 percent have frozen their plans and intend to terminate the plan once funding allows.

Kemp Ross, senior vice president and head of Aon Investment Consulting said:”We do not subscribe to the ‘wait-and-see’ attitude for employers with frozen pension plans,”. “Employers have no real upside for taking on the financial risks and costs of frozen pension plans, so organizations need to establish an exit strategy for such plans, which can be executed with a balanced approach to funding and investments during the next few years, as financial markets recover.”

Trends in 401k Matches/Auto Enrollment

This survey also revealed that 56 percent of respondents offer matching contributions on DC plans. Of those, approximately half provide a higher than 3 percent match. Additionally, 41 percent of employers have an automatic enrollment plan, with 53 percent implementing a default at 3 percent, and nearly all (99 percent) planning to keep their default percentage the same this year.

“While most of our survey respondents did not cite changes to matching contributions, some financially constrained companies did suspend or modify their 401k match in response to the economic downturn,” said Mhatre. “Companies should take this opportunity to look strategically at their retirement programs in the context of total reward strategies.

“Defined contribution plans are increasingly the primary retirement vehicles for American workers. This will surely change how workers and policy makers view companies’ fiduciary responsibilities. We had a third of survey respondents suggest that their fiduciary risks have increased since only a year ago. It is surprising that most companies have not taken actions to mitigate such risks by taking measures such as fiduciary training and review of their governance processes.”

UBS appoints Michael Ostow to head the insurance practice in North America

Swiss bank UBS is appointing a Morgan Stanley investment banker to head its insurance practice in North America, months after it lost two senior insurance bankers to Greenhill & Co.

Michael Ostow will join UBS as a managing director and report to Gary Howe and Halle Benett, Americas co-heads of the financial institutions group.

Ostow, 41, was co-head of the North American insurance group within Morgan Stanley’s FIG practice.

Halle Benett comments: “The insurance sector is currently undergoing enormous change, and we are seeing a significant pipeline of insurance-related transactions”.

In April, boutique investment bank Greenhill said it hired three bankers from UBS, including Alejandro Przygoda, who was head of UBS’s global insurance practice, and Steven Friedman, who was co-head of its insurance practice for North America.

Gary Howe added: “Two years after the start of the financial crisis, financial institutions continue to face unprecedented challenges, which have led to a high volume of transactions, from capital raising to restructuring to M&A”

Paternoster shareholders to inject £5 million of new capital into the Group

Paternoster, the regulated insurance company which takes responsibility for the risks associated with companies’ defined benefit pension schemes, announces today that:

• Paternoster shareholders will inject £5 million of new capital into the Group to ensure that the company retains the capability to write new business once it has raised further money or when there is significant improvement in the economic outlook. The new capital will also enable the Group to assist in the rapid growth of the longevity-only risk transfer market.

• It predicts greater demand in the future from companies to buy out defined benefit pensions scheme obligations as credit markets improve and a more immediate demand for longevity-only risk transfer solutions.

• However, while the volume of transactions will continue to be subdued for some time and Paternoster focuses on raising more capital, the company’s headcount will reduce from 130 to 106.

• CEO Mark Wood becomes Deputy Chairman and is succeeded by Ed Jervis, previously Commercial Director.

Ed Jervis, Chief Executive, commented: ‘The current interest being shown by defined benefit pension trustees and their corporate sponsors in ‘longevity swaps’ illustrates the continuing focus on reducing the risks inherent in their schemes.

‘Although credit markets have improved over recent months, the market for defined benefit pension scheme buy outs will remain subdued for some time yet. At the same time many corporate sponsors face pressure on their cash flows. As a result, pension trustees and their corporate sponsors’ desire to reduce risk will increasingly focus on longevity-only solutions.

‘Nonetheless there remains an overwhelming logic for corporate sponsors to fully transfer their pension scheme obligations from their balance sheets to an insurer, which provides solvency capital to support the promise made to pay pensions.

‘As the risk of credit defaults diminishes and asset values improve at the same time as underlying corporate cash flows strengthen, so pension scheme buyouts will again become viable and demand must be expected to soar. These conditions will also be conducive to raising further capital.’

Mark Wood, Deputy Chairman of Paternoster, added: ‘Paternoster’s board and shareholders are determined that the company will remain a leader in what will once again be a rapidly growing market. Meanwhile, the proper governance of our business and of course the interests of our policyholders are of paramount importance.’

A new ‘nonlife insurer’ giant has born in Japan’s

The details related to the mege of Mitsui Sumitomo Insurance Group Holdings Inc, Aioi Insurance Co. and Nissay Dowa General Insurance Co. have been released today. This planned merger will create Japan’s largest nonlife insurer by premium revenue.

Under the merger agreement, the trio said one Aioi share will be exchanged for 0.190 Mitsui Sumitomo shares. Meanwhile, one Nissay share will be exchanged for 0.191 Mitsui Sumitomo shares.

The companies plan to integrate operations next April under a holding company named MS&AD Insurance Group Holdings Inc.

Mitsui Sumitomo President Toshiaki Egashira will become the holding company’s president.

RSA Insurance Group announces sale of British Engine for £28 million

RSA Insurance Group plc announces the sale of British Engine Insurance Limited to Knapton Holdings Limited, a wholly-owned subsidiary of Enstar Group Limited, for £28m to be paid in cash.

British Engine is an inwards reinsurance business and has been in run-off since 2001. This transaction removes £107m of net insurance liabilities from the Group’s balance sheet and subject to regulatory approval is expected to complete by 31 December 2009.

Lucida to secure The Trustee of the Merchant Navy Officers Pension Fund with a £500 million pension liabilities

The Trustee of the Merchant Navy Officers Pension Fund (MNOPF) has secured around £500 million of pension liabilities through a bulk annuity contract purchased from Lucida plc, an insurance company focused on the annuity and longevity risk business.

The agreement entails Lucida insuring over half of the total pensioner benefits of the Old Section; a section of the fund which closed in 1978 and covers almost 22,000 retired members.

Andrew Waring, the Chief Executive of MNOPF said: “Security has been the Trustee’s watchword in deciding to de-risk, in selecting a provider and in negotiating the contract. This insurance policy takes a significant step along that path and is an important contribution to our wider strategy of progressively reducing risks across the Fund.”

Jonathan Bloomer, Executive Chairman of Lucida, commented, “We are delighted that MNOPF has chosen to partner with Lucida to help them manage their risks and protect their members’ benefits. Our team, our commitment to excellent customer care and our strong capital position enabled us to be successful in this competitive process.”

Watson Wyatt Project Lead and Senior Consultant, Paul Kitson said “Annuities and similar solutions are the ultimate matching asset for pension schemes and protect them from market movements and increasing life expectancy. Multi-billion pound pension funds like MNOPF are looking to de-risk in stages but be ready to move quickly and take advantage of opportunities such as this as they arise”

Robert West, Head of Pensions at Baker & McKenzie who provided legal advice, comments, “The uncertainties of the last year in the financial markets have left many trustee boards with a strong desire to increase members’ security through buy-in arrangements. This agreement between MNOPF and Lucida breaks new ground for industry-wide schemes and provides renewed impetus in the marketplace”.

Brits could see home insurance premiums rising by ‘lettings’

Britons could see their home insurance impacted upon should they fail to inform their insurer that they are letting or sub-letting to a lodger, it has been claimed.

Matt Hutchinson, director of Spareroom.com, estimated earlier this week that the number of spare rooms being let in the UK has risen dramatically in the past year from a figure of around 477,000 to approximately 720,000.

In response to this, Malcolm Tarling, spokesperson for the Association of British Insurers, has stated that Britons who take on a lodger should inform their home insurance provider immediately of any changes to who is living in a residence, as this can have an impact upon premiums or in fact, if cover will be provided at all.

He commented: “If you are applying for insurance and you are taking a lodger, or if you have got a lodger, you should disclose that to your insurance company.”

Meanwhile, Mr Tarling added that some home insurance providers will require anyone taking on a lodger to disclose any criminal convictions by themselves or their prospective tenant, as this too have an affect on the cost of a premium.

FSA to take measures to protect PPI consumers

The Financial Services Authority (FSA) has today announced a package of tough measures to protect consumers in the Payment Protection Insurance (PPI) market and ensure they are better treated when buying PPI or complaining about it.

Firms representing more than 40% of face-to-face sales in the Single Premium Unsecured Personal Loan PPI market have agreed to review these sales and redress those consumers identified as mis-sold.  Ongoing supervisory action continues with the remainder of this market place.

These measures build on the agreement the FSA obtained from the industry earlier in 2009 to stop selling Single Premium PPI on unsecured loans.

For complaints about all PPI products, new measures will tackle the key issue that too many complaints are rejected by firms and then overturned by the Financial Ombudsman Service (FOS) in favour of the consumer:

• new guidance (due to take effect by the end of the year) will ensure PPI complaints are handled properly, and redressed fairly where appropriate – the FOS has indicated support for the FSA’s proposed approach; and

• a new rule will require firms to reopen some 185,000 previously rejected PPI complaints and reassess them against the guidance.

In addition, the FSA is launching targeted assessment of sales practices for PPI on secured loans and credit cards; if the potential for mis-selling is identified, pro-active reviews by firms may be extended to these areas too.

Jon Pain, FSA managing director of retail markets, said: “Consumers should not be pressured or deceived into buying PPI and they are entitled to have a policy properly explained to them.  It is unacceptable that despite previous warnings about poor sales practices, backed by 22 enforcement cases and significant fines, the PPI sector still needs the FSA to intervene on this.

“And the outcome of a complaint about a PPI sale should not depend on whether or not the complainant persists past the firm on to the FOS.

“The industry must show it can act fairly, consistently and in the best interest of consumers on PPI. All firms operating in this sector should take note and where necessary get their house in order. Where we find problems in PPI sales or complaint handling, firms can expect tough action, including requiring them to undertake reviews and, where appropriate, pay redress.”

Government to extend car scrappage scheme

The government has announced that it is to extend its car scrappage scheme by an additional 100,000 cars and vans – good news for anyone looking to trade in their old vehicle.

The National Franchised Dealers Association (NFDA) noted Lord Mandelson’s decision to increase the number of vehicles eligible under the scheme will help provide a boost to the automotive and car insurance sectors in the UK, as newer cars are more expensive both to purchase and insure.

Paul Williams, chairman of NDFA, commented: “The extension of the vehicle scrappage scheme by the government is a victory for common sense over dogma.”

However, Alistair Jeff, director of Carsite.co.uk, recently noted it is becoming more difficult for young motorists to find affordable vehicles due to many of these cars being traded in for newer models.

Mr Jeff stated this reduction in availability is artificially boosting the value of those older vehicles that are left on the market.

London: number one for uninsured drivers

More than one in 10 cars in London is thought to be uninsured, research has found.

According to The Motor Insurers’ Bureau (MIB), 13% of vehicles in the London area were flagged as being driven illegally because they were uninsured, the highest proportion for any region.

The capital was followed by Merseyside, where 12% of vehicles are thought to be uninsured, and Greater Manchester at 10%. West Yorkshire and the West Midlands came in joint fourth place at 7%.

The West Midlands also contains six of the 10 worst postcodes for uninsured drivers, while nearly half of all vehicles registered in the BD3 postcode of Barkerend in Bradford were flagged as being uninsured.

Overall, the MIB estimates more than 1.7 million motorists broke the law during 2008 by driving despite not having motor insurance.

The figures were released as the group, which compensates people involved in accidents with uninsured drivers, launched a campaign aimed at drivers who may be tempted to let their insurance lapse in a bid to reduce their motoring costs.

It warned that people who drove without car insurance could have their vehicle seized, while they would also receive a minimum of six penalty points on their licence and incur a fixed penalty of £200.

Barack Obama declares Samoa Tsuami as ‘major disaster’

United States President Barack Obama declared American Samoa as “a major disaster”, after the remote Pacific island was hit by a tsunami that left at least 14 people dead there.

“The president tonight declared a major disaster exists in the territory of American Samoa and ordered federal aid to supplement territory and local recovery efforts in the area struck by an earthquake, tsunami, and flooding,” a statement from the White House said.

A tsunami triggered by a massive 8.0-magnitude earthquake struck American Samoa and neighboring independent Samoa, killing at least 36 people across the two remote islands. Of those, 14 were reported killed in American Samoa.

The presidential declaration will make available both immediate resources for emergency response measures as well as federal funding for American Samoa, the statement said.

The US Federal Emergency Management Agency has named Kenneth Tingman the federal coordinating officer for federal recovery operations in the affected area, the statement added.

FEMA said they were dispatching two emergency teams to the region, though it was unclear how quickly its personnel would arrive. It has also pre-positioned supplies in Hawaii that could be used for emergency response.

Officials in Apia in independent Samoa said the death toll from the earthquake and subsequent tsunami was at least 36, and was expected to rise significantly.

“It was an earthquake, which caused a tidal wave 15 feet (4.5 meters) in height,” said Eni Faleomavaega, American Samoa’s delegate to the US Congress.

“Some of the areas there are only a few feet above sea level, so you can imagine the devastation,” Faleomavaega told AFP by telephone.

With AFP

UK non-life strong, but challenges ahead

A new report from AM Best states that the absence of large weather-related losses, cautious investment and positive reserve development led to an overall improved underwriting performance compared with 2007.

Torus forms Bermuda MGA

Torus has formed a managing general agent in Bermuda for Torus Insurance UK to expand its distribution network, the company announced Wednesday.

Five things you didn’t know about…

Mondial Assistance UK chief executive Mike Webb

Zurich Latin America appoints Peter Rebrin as CEO

Zurich Financial Services Group announces the appointment of Peter Rebrin (47, Brazilian) to the position of CEO for Zurich Latin America, effective October 1, 2009. He has been serving as interim CEO for Zurich Latin America since Jaime Paredes stepped down in May 2009.

In his new position, Mr. Rebrin is responsible for driving further profitable growth in Zurich’s General and Life insurance businesses in Latin America aimed at strengthening its customer-focused leadership throughout the region’s insurance market. This important strategic growth market for Zurich currently consists of operations in Argentina, Bolivia, Brazil, Chile, Mexico and Venezuela. Mr. Rebrin will report to Paul N. Hopkins, CEO Americas, and will remain based in Miami, Florida.

Mr. Rebrin joined Zurich in 1999 and since then held various international and Latin American leadership positions such as Head of Corporate Development with Zurich Brazil, General Manager Latin American Shared Services in Chile and various HR leadership positions. Since 2007 he has been Chief Operating Officer for Zurich Latin America. Rebrin holds a bachelor’s degree in International Relations from the University of Pennsylvania and an MBA from the Thunderbird Graduate School of International Management in Arizona.

Flagstone Re completes purchase of remaining stake in Flagstone Reinsurance Africa

Flagstone Reinsurance Holdings Limited announced today that it has reached an agreement to become the sole shareholder of Flagstone Reinsurance Africa Limited (FRA), previously called Imperial Re, by acquiring the remaining 35% share currently held by Imperial Holdings Limited. Based on the successful integration of all aspects of FRA into the Flagstone Group and the substantial progress made in terms of business development, Flagstone and Imperial have decided to accelerate the transition to full Flagstone ownership. The transaction is subject to necessary regulatory approvals.

Mark Byrne, Chairman of Flagstone and Flagstone Re Africa, commented, “We are excited to have completed the integration work early, and with the substantial progress made in our African strategy. We would like to thank Imperial Holdings for their fine partnership, and look forward to a continuing business relationship with Imperial.”

Flagstone had previously acquired a 65% majority shareholding of FRA in June 2008 at which time the company’s name was changed and an AM Best international rating of A- was attained.

Cardinus and THB Risk Solutions launches Global Continuity’s BusinessAssist to the UK broker market

Sister companies within THB Group plc, Cardinus Risk Management based in East Grinstead and  THB Risk Solutions based in Peterborough, have signed an agreement with Berkshire-based Global Continuity to launch an innovative business continuity solution, BusinessAssist, to the UK regional broker market.

Commented Glen McCully, Managing Director of THB Risk Solutions, “BusinessAssist is the first business continuity solution designed for the SME market that delivers a low cost, efficient and pragmatic approach. Most SME’s cannot afford expensive consultants to plan and test solutions so it is not surprising that 80% of all SMEs fail within 18 months of a major loss. BusinessAssist is different in that it provides a practical solution to loss recovery at a low cost. Together with Cardinus’ wider risk management solutions we believe that we can offer brokers and their clients with practical and competitively priced solutions.”

BusinessAssist has been developed over the past 2 years by experts in the business continuity arena who recognised the gap in the market for SME clients.

Added Richard Pursey, Global Continuity’s Managing Director, “BusinessAssist delivers a very tangible value added service to customers, at price points that finally make real disaster recovery solutions affordable to small and medium sized businesses. BusinessAssist provides key next business day services required to get the core administrative functions back up and running as quickly and efficiently as possible.”
BusinessAssist provides clients with:

• convenient high quality temporary office accommodation,

• a comprehensive IT infrastructure,

• on site technical assistance with the restoration of  business data and

• management of both  telecommunications and internet network access.

BusinessAssist will deliver next business day recovery of the core business and administrative functions which is achieved with minimal disruption and allows a company to be up and running again quickly and effectively servicing  customers and communicating with  suppliers.

The smooth recovery of your business will allow a company to continue collecting cash, generating invoices and maintain a healthy balance sheet.
Pursey  added added, “we are delighted to be working with THB Group as they not only provide a strong insurance distribution route but through their risk management arm, Cardinus, have a full understanding of how business continuity solutions are essential to all firms, regardless of size.”

Allianz SE and BMW Group intensify collaboration

Allianz SE and the BMW Group plan to intensify their collaboration on a global level. The CEOs of the two companies, Michael Diekmann and Norbert Reithofer, signed a declaration of intent to this effect in Munich yesterday.

The focus is to offer clients vehicle and mobility related insurance products such as car insurance and used car guarantees. The Allianz products will supplement the comprehensive range of financial services that BMW Financial Services already offers its customers.

“Allianz is a strong partner for the BMW Group and its customers,” said Michael Diekmann, CEO of Allianz SE, at the signing of the declaration of intent. “Allianz has in-depth product and sales expertise in insurance solutions for car manufacturers and their dealer networks, as well as a global presence and profound knowledge of the respective local market conditions. The global partnership builds on the existing successful cooperation between BMW Group and the international subsidiaries of Allianz.”

“In Allianz SE we have an ideal partner who can support us and our customers all over the world with comprehensive, transparent and high-quality premium products,” added Norbert Reithofer, CEO of BMW Group. “That is one of the components in the implementation of our Number ONE strategy: we want to become the world’s leading provider of premium products and premium services for personal mobility.”

How are National Insurance contributions paid?

You are entitled to the basic State Pension if you have paid, been treated as having paid or been credited with enough UK National Insurance (NI) contributions:

• If you are in paid work and you earn more than £100 in any week (for 2007/2008) from a single employer, you will pay NI contributions through your wages

• If you are working and earning between £87 and £100 in a week (for 2007/2008) from a single employer, you will be treated as if you have paid NI contributions

• If you have not been able to make NI contributions (for example, if you haven’t been able to work due to illness or because you have been looking after a sick or disabled person and getting Carer’s Allowance), you may be granted NI credits. Or, if you have been caring for children, been a foster carer, or been looking after a seriously ill or disabled person (but not able to get Carer’s Allowance), you may have the number of your qualifying years reduced to help increase your State Pension entitlement.

• If you are self-employed, you must pay NI contributions unless you have made a successful application not to pay because of low earnings. You must make these payments to HM Revenue & Customs yourself

• In some circumstances you may be able to use your wife’s, husband’s or civil partner’s NI contributions to help you get a better State Pension

From April 2010, you may be credited with contributions for periods when you were:

• receiving Child Benefit for a child under 12

• caring for a sick or disabled person for at least 20 hours

• an approved foster carer

If you reach state pension age on or after 6 April 2010, periods for which you have been awarded HRP before this date will be converted to credits.

If you have gaps in your National Insurance record which mean you will not get a full basic State Pension when you reach State Pension age you may be able to fill them by paying voluntary contributions. For further information please see:

National Insurance Contributions on the HM Revenue & Customs website

State Pension – Paying Class 3 National Insurance contributions

Additional Voluntary National Insurance contribution factsheets

The Pension Service website is closing

On 30 September the website for The Pension Service will close.

Directgov will replace The Pensions Service website as the place to find all government information for citizens about Pensions, Retirement and Later Life.  Content for citizens has already been made available via Directgov.

Corporate information about The Pension Service has moved to the About DWP section of the DWP website.

Businesslink will replace the Pension Service site as the place to find all government information for employers about Pensions, Retirement and Later Life from September 09.

Anyone who tries to visit The Pension Service site after it has closed will find a landing page which will signpost them to the relevant information on Directgov, businesslink.gov.uk, or the DWP main site.

This work forms part of a wider long-term plan to move our customer-facing online information onto Directgov.  All government departments are required to do this as part of the Varney review by 2011, and DWP is setting a good example by taking the lead and moving towards this goal.

For more information see The Pension Service website

National insurance record determine social security benefits

Commerzbank takes over Allianz employees

The approximately 200 employees of Allianz Shared Infrastructure Services SE in Frankfurt who currently deliver application services for the former Dresdner Bank will be taken on by Commerzbank and integrated into Commerz Systems GmbH.

Commerz Systems GmbH develops and maintains IT solutions for Commerzbank, for example for retail and corporate banking, payment and securities systems, particularly systems relating to risk and compliance. The company currently has 155 employees in Frankfurt and Bremen.

In taking this step, Commerzbank intends to ensure that operation of the Dresdner Bank applications remains as stable and reliable as ever until the Dresdner Bank systems are finally decommissioned. In addition, Commerzbank is acquiring the years of experience and expertise of Allianz Shared Infrastructure Services SE employees in the IT banking sector for future projects and activities. An extensive qualification program is also being launched to help the employees with their start at Commerzbank Systems.

The integration into Commerzbank offers the employees concerned reliable and excellent future perspectives. The exact time of the staff transition will be decided in the coming weeks, and discussions are already underway with works’ council representatives.

P J Hayman launches the Free Spirit Travel for Treatment

P J Hayman & Company is launching the ‘FREE SPIRIT Travel for Treatment’: a new travel insurance policy for UK nationals travelling abroad for treatment and medical procedures. The product is designed to provides wide-ranging cover and peace of mind protection.

Standard travel insurance schemes do not provide this cover. While there are some specific policies that will provide some protection for additional travel/accommodation costs they do not cover medical costs arising from complications. Without full cover there is a risk of incurring large medical bills and increased expenses.

Features of FREE SPIRIT Travel for Treatment:

• Cosmetic Surgery, Dentistry and Elective procedures covered – click to view list

• Available to UK nationals resident in the EEA and the Channel Islands

• Cover for persons up to age 74

• Reduced premiums for accompanying persons

• Essential cover including Emergency Medical Expenses, Repatriation and Cancellation

• Specific cover for complications occurring after 48 hours and up to 31 days whilst abroad

• BONDPLUS Financial Failure cover due to the financial failure of your travel/ accommodation provider

• Option to ‘top up’ Cancellation cover (standard limit £1,000)

• Medical Emergency Helpline – 24 hours a day, 365 days a year

Eligibility:

Available to UK or Channel Island nationals up to age 74 who are registered with a Medical Practitioner in the European Economic Area (the European Union plus Iceland, Liechtenstein and Norway) or the Channel Islands.

For example a UK national living in France would be eligible to take out cover.

Underwritten by:

Free Spirit Travel for Treatment is underwritten by AXA Insurance UK plc except for BONDPLUS (Financial Failure) which is underwritten by IGI Insurance Company Limited.

How to Apply:

You can contact P J Hayman by click here

Willis to contract insurance brokerage services to Panama Canal Authority

The Panama Canal Authority (ACP) announced today that it has awarded a contract for insurance brokerage services to Willis Limited, a unit of Willis Group Holdings, a global insurance broker. Beginning October 2009, Willis will provide strategic risk management counsel, and advise the ACP on the best policies to cover property, floating equipment, loss of income and maritime contingencies, among others. The contract will be for one year with an option to renew for three additional years.

Willis Limited is also the ACP’s broker for its Owner Controlled Insurance Program that includes the Third Party Liability and Construction All Risk coverage for the design and construction of the new set of locks and the fourth dry excavation projects under the Panama Canal Expansion Program.

“Willis has the industry experience and knowledge that we need. We are confident that their experience will help the ACP secure the most cost effective and competitive insurance plans. We look forward to working with our current and future insurers through Willis,” said ACP Executive Vice President for Administration and Finance Francisco J. Miguez.

The well-established ACP bidding system follows a fair, rigorous and transparent contracting process that welcomes open competition.

The ACP received three bids September 4 from top-level internationally renowned insurance brokerage firms vying for the contract. After careful review and thorough evaluation of the submissions, the ACP selected the firm with the lowest bid that met the contract’s objectives as described in the request for proposal released August 4.

Partner RE announced acquisition of PARIS RE

PartnerRe Ltd. today announced that it has entered into definitive agreements amending the previously announced acquisition structure of PARIS RE Holdings Limited, the French-listed, Swiss-based diversified reinsurer. By moving directly to a merger vote in lieu of an exchange offer, the amended structure is expected to expedite PartnerRe’s acquisition of PARIS RE, while keeping unchanged the consideration granted to PARIS RE shareholders.

As previously announced, PartnerRe has entered into agreements to acquire 77%, and previously acquired approximately 6%, of PARIS RE’s outstanding common shares. In these transactions, PartnerRe offered (subject to certain adjustments) the same exchange ratio of 0.30 PartnerRe common shares for each PARIS RE common share. The closing of the 77% block purchase is currently expected to occur in October 2009, subject to certain conditions, including the approval of certain insurance and competition regulatory authorities. All PartnerRe and PARIS RE shareholder approvals required in connection with the closing of the 77% block purchase have been obtained. As a result of the closing of the purchase of the 77% of PARIS RE’s outstanding common shares referred to above, PartnerRe will hold 83% of PARIS RE’s outstanding common shares.

Following the closing of the block purchase, PARIS RE has agreed to call a meeting of its shareholders to vote on a proposal to effect a merger, governed by Swiss law, of PARIS RE into a wholly-owned subsidiary of PartnerRe. Through such merger, PartnerRe would acquire the remainder of PARIS RE’s outstanding shares at the same 0.30 exchange ratio. PartnerRe expects that PARIS RE will provide its shareholders, together with the invitation for the shareholders’ meeting, a shareholders’ information letter detailing the revised acquisition structure and informing the PARIS RE shareholders of their right to inspect the merger documentation (including the merger agreement and a merger audit report) during the 30-day period prior to the meeting. The merger, when approved by the holders of at least 90% of all outstanding PARIS RE voting rights, is expected to become effective in December 2009.

PartnerRe intends to obtain a listing for its shares on the Euronext Paris stock exchange, which will be effective upon completion of the merger. PartnerRe will also seek to implement measures to enhance shareholders’ access to liquidity including through the New York Stock Exchange. Further details as to these measures will be provided in another press release to be issued before the meeting of PARIS RE’s shareholders to vote on the merger.

In the revised acquisition structure, the merger will no longer be preceded by a voluntary exchange offer. However, if (1) the affirmative vote of the holders of at least 90% of all outstanding PARIS RE voting rights in favor of the merger is not obtained at the shareholders’ meeting to be called by PARIS RE’s Board of Directors or at any adjournment or postponement thereof, or (2) the merger is not effective on or prior to January 31, 2010, the original transaction structure will be reinstated.

In the coming weeks, PartnerRe may enter into agreements to purchase additional PARIS RE shares or secure voting commitments from certain other shareholders of PARIS RE in connection with the merger vote. Such purchases will be disclosed in filings with the Securities and Exchange Commission and with the Autorité des marchés financiers (the French listing authority) as required.

Prior to the closing of the purchase of the 77% of PARIS RE common shares, the consideration payable in all stages of the transaction (including the initial purchases of 6%) remains subject to adjustment up or down if the parties’ relative tangible book values diverge significantly. In addition, the number of PartnerRe shares payable for each PARIS RE share in the merger will be appropriately adjusted upwards to account for any dividends declared on the PartnerRe common shares having a record date following the closing of such purchase and prior to the effective time of the merger.

As previously announced, PARIS RE intends to effect a capital distribution by way of a reduction of the nominal value of all PARIS RE’s shares of up to CHF 4.17 per PARIS RE common share (the Swiss franc equivalent of $3.85 as of July 7, 2009, the date on which PARIS RE fixed the U.S. dollar/Swiss franc currency exchange rate to be used for the share capital repayment) to all of its shareholders. This distribution, which has been approved by PARIS RE’s shareholders, remains subject to the obtaining of regulatory approvals. To the extent that the distribution is not paid prior to the closing of PartnerRe’s purchase of the 77% of PARIS RE’s outstanding common shares described above, it will be paid immediately prior to the merger, or earlier, if all conditions to the payment of the capital distribution have been satisfied and PartnerRe has entered into commitments ensuring that the requisite PARIS RE shareholder approval for the merger will be obtained.

The amended structure of the transaction does not change the companies’ stated approach to all renewals prior to July 1, 2010, for which PartnerRe and PARIS RE will renew their portfolios separately, and with the underwriting approach customary for each company.

PartnerRe is listed on the New York Stock Exchange, and shareholders can obtain more information about PartnerRe from the documents it has filed with the SEC, which are available free of charge as described below.

UK SMEs diversify their business in order to survive the recession

Over half (56%) of small and medium-sized enterprises (SME) in the UK have taken deliberate steps to diversify their business in order to survive the recession according to new research by Aviva[¹].

Diversification through new products or services, opening at weekends, trading for longer hours and targeting new customer groups were the most common actions taken by SMEs to weather the economic storm, compared to additional promotions and increased discounts (28%). Reducing staff pay, benefits and/or hours (18%), and reducing the number of permanent staff employed (10%) were other frequent actions taken by SME owners. Interestingly, only two per cent of those polled declared that they had applied for one of the Government’s business assistance programmes such as the Enterprise Finance Guarantee.

The survey also highlighted the fact that the recession is forcing some SMEs into taking unnecessary risks; enforced reductions in overheads are leading to cut-backs on crucial areas of business protection and operational security. Over one in 10 (12%) SMEs admitted that they don’t have any commercial insurance in place. Given that employers liability insurance is required by law, there is a risk that some companies could be trading illegally. With an estimated 4.7 million SMEs in the UK[²], that means there could be around 560,000 businesses that are potentially at risk of being out of pocket should a disaster strike^[3].

David Bruce, commercial product manager at Aviva, comments: “Britain’s small business community remains entrepreneurial, creative and opportunist at heart, with an innate ability to be both flexible and versatile. The ability to anticipate and adapt to the changing environment is key for any successful business, and business owners are clearly leading the way in this regard.

“However, it is worrying to see how many businesses have admitted they have no insurance at all. If one of your staff, or a customer, has an accident at work it is unlikely you would be able to pay out a claim that could run into thousands of pounds yourself. Protecting what you’ve already got and what you’re trying to build for the future should be fundamental for any conscientious business owner.”

Other business concerns

Cash flow
It is clear that cash is still king, with 69% of SMEs polled citing cash flow as their toughest business challenge in 2009 and 38% describing it as the aspect of their business that worried them most.

This concern is reflected across multiple business sectors. Of those polled, restaurants, pubs and companies trading in the leisure sector were the most concerned about money, with 75% citing cash flow as their primary area of concern. 70% of shops, salons and beauticians cited cash flow as their main challenge, while the Professional Services sector seemed least affected by financial worries.

Despite the current economic environment, the survey revealed that almost a quarter of SMEs (23%) found dealing with paperwork, due to cuts to services from specialist providers, a tougher challenge than obtaining capital from the bank (19%).

Bruce continues: “Running a business can be stressful at the best of times but you don’t have to be a ‘jack of all trades’ so play to your strengths and try to focus on the reason you became your own boss in the first place. Dealing with red tape and paperwork can be quite daunting but remember that expert advice need not be costly and can free up your time to concentrate on more important areas, like generating income.

“For example, instead of worrying about what sort of insurance you should have why not let your local insurance broker sort it all out for you.  That would be one less job for you to do and peace of mind that your business is adequately protected.”

Putting in the hours
One in five SMEs of those surveyed regularly works over 50 hours per week, equating to 104 hours or 4.3 days per year over the EU Working Directive’s specified rules. Given this devotion, it’s perhaps no surprise that SME owners rate determination and hard work as the character traits most commonly found in successful businessmen and women.

The hardest workers in the UK (calculated by number of hours worked) appear to be in Wales, with 23% of those polled regularly working 56+ hours per week. Greater London and the North East of England are also amongst the regions investing the most time into their businesses.

Comparatively, the shortest working week, and possibly the best work-life balance is enjoyed by those based in Northern Ireland, with three in four SME owners (75%) working 35 to 40 hours per week and only six per cent working a 56+ hour week. Overall it appears that the recession is forcing SMEs to work longer hours in order to keep their businesses going; time is one of the first areas to be sacrificed in a recession.

Table 1.0:  SME working hours, by region

Region	35 to 40 hours	46 to 50 hours	56 + hours
East Midlands	68%	15%	17%
East of England	53%	29%	18%
Greater London	53%	25%	22%
North East	43%	36%	21%
North West	69%	17%	13%
Northern Ireland	75%	19%	6%
Scotland	62%	24%	13%
South East	54%	34%	12%
South West	72%	17%	11%
Wales	54%	23%	23%
West Midlands	69%	28%	3%
Yorkshire/Humberside	62%	31%	7%

Bruce continues: “Businesses need to be aware that longer working hours can affect performance at work. For example, the result could be a higher number of accidents or injuries.

“With 38% of all major accidents involving slips, trips and falls amounting to nearly 11,000 serious injuries in the workplace every year it is important to take steps to safeguard yourself against a claim[4]. Talk to your broker to make sure you have the right level of insurance for your particular business.”

Sources of specialist business knowledge
Aviva’s research found SMEs preferred the internet for sourcing specialist business knowledge, scoring higher than asking a family member or friend (35%), with 84 per cent of those polled looking online for solutions to their business challenges.

Of those companies using specialist services, it seems the majority are concerned with staying on the right side of HM Revenue and Customs with 91% using accountancy services.

Bruce said: “The internet is a fantastic research tool but the sheer quantity of sites you can visit for information can make finding help or advice a complicated and overwhelming task.

“We know businesses already have enough to do every day without having to search around for the right advice so we have put all the information in one place. Our website provides free information on a range of legal and health and safety matters, as well as advice on risk and guides to sales, marketing and business planning to our customers.“

[¹] Research conducted online by Red Shift Research with 500 SME owners in August and September 2009

[²] The Department for Business, Enterprise and Regulatory Reform, 30 July 2008. http://stats.berr.gov.uk/ed/sme

[³] 12% of 4.7 million SME’s = 564,000

[⁴] www.hse.gov.uk/slips/index.htm and www.hse.gov.uk/slips/index.htm

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