Identity burglary cost the UK an estimated £150 million in the past year

One in seven burglaries that took place last year was carried out solely to steal the homeowner’s personal details, a report claimed.

Identity burglary cost the UK an estimated £150 million in the past year alone, according to a home insurance provider.

It claimed the trend is set to rise sharply over the next five years with a quarter of all burglary victims now falling victim to ID fraud as a result of a break-in.

The survey said ‘bundles’ of personal identity documents can fetch £150 on the black market.

Among all break-ins, 74% now result in the theft of personal and financial documents such as credit cards, driving licences and bank statements, with 15% of victims being targeted specifically for documents containing their personal details.

The report revealed a credit card, coupled with a form of ID such as a bank statement, utility bill or National Insurance number, are prized items on the black market as they make it easier for fraudsters to steal an identity.

Individual identity documents can change hands for around £15.

A spokesperson explained: “As the trend for identity fraud increases, we would strongly urge homeowners to take appropriate measures to limit their chances of being targeted by thieves and fraudsters.

“As well as installing home security measures such as burglary alarms and security lights, homeowners should ensure they store personal documents securely and if possible separately to minimise the risk of ID theft.”

Research shows car and home insurance premiums are significantly increasing

Car insurance premiums are rising faster than at any time over the past 15 years, according to the latest quarterly index from a leading insurer.

The index, which tracks the quarterly movement of car and home insurance quotes, recorded a 5.6 per cent jump for comprehensive car insurance, over the three months ending 30th September.

This is the biggest single quarterly jump since the Index started in 1994. The index has also shown the greatest-ever annual increase with 14 per cent added to the average comprehensive premium.

The Index analyses quotes from over 90 insurance companies, brokers and schemes for 1,000 ‘customers’ nationwide. The average quoted premium for an annual comprehensive car insurance policy now stands at over £821, compared to £778 in July 2009 and £721 in October 2008.

“Most drivers will be seeing sharp increases when they renew their annual insurance premiums,” said a spokesperson for the insurer. “The Index suggests that 89 per cent of insurers have increased their premiums by more than £5 over the past quarter. Only 2.5 per cent reduced them.”

The Shoparound index, which is an average of the cheapest three quotes for each ‘customer’ in the Index and closer to the price customers would pay after shopping around, showed a slightly lower increase of 4.8 per cent, to just under £552.

Key factors fuelling premium increases:

• Fraud cost the industry £1.9bn, equivalent to £44 for every household’s home insurance costs.

• Personal Injury claims and associated legal costs are rising, topping £9.6bn last year, of which 40 per cent was legal costs

• Around 1 in 20 drivers is uninsured. Police success in prosecuting uninsured drivers and confiscating their cars (around 185,000 last year) doesn’t seem to be discouraging people from risking driving without cover to save money, despite the likelihood of being caught

• Car thefts are rising, especially expensive models, by first stealing the keys, with 15 per cent more claims over the past year

• Insurance underwriting losses – about £110 paid out for every £100 taken in premiums coupled with depleted reserves and poor investment returns

US flood programme extended to Dec 18

Namic today commended Congress for including an extension of the National Flood Insurance Program in a continuing resolution, keeping the programme in place until December 18.

CCV on the march

What is the long-term outlook for the acquisition vehicle

Head of GCFac in Latin America named

Reinsurance broker Guy Carpenter today announced that Hernán Irarrazaval has been appointed the leader of GCFac in the Latin America and Caribbean region.

Aon reports $120m Q3 profit

Chicago-headquartered broker Aon has reported net income of $120m, compared with $117m for the same period last year.

Solvency II: the principal challenge for Europe’s insurers

On an economic basis, many insurers experienced a drastic slump in their equity capital in 2008. The first signs of a recovery were only visible this year. Insurance companies are now having to gear up for the new regulatory framework under Solvency II, which is scheduled to be introduced in Europe as from 2012.

Ludger Arnoldussen, member of Munich Re’s Board of Management responsible for reinsurance business in Germany, Asia Pacific and Africa. said: “Insurers have mastered the financial crisis comparatively well so far. They now need to regain their former capital strength and secure it long term in order to meet the higher standards required by Solvency II. Munich Re will offer clients its full support in this connection. We create individual solutions for risk transfer that are specifically designed to provide the required capital relief for our clients”.

With the advent of Solvency II, insurers have to prepare themselves for a consistently economic evaluation of all risks. Besides greater emphasis on sound risk management, it is expected that small or specialist insurers in particular will face a need for more risk capital. With Solvency II, more precise monitoring and controlling of risks will become standard practice. Uniform rules applying to the insurance industry in Europe will also serve as a model for countries outside Europe, for example in Asia. The industry as a whole will be more crisis-resistant and internationally competitive as a result.

For primary insurers, reinsurance will assume a new quality with Solvency II. On the one hand, the capital-relief effect of reinsurance will be taken into account in the risk-based models from 2012 and reinsurance cessions will no longer be limited to certain volumes. On the other hand, the need for tailored advice and consultancy will increase with Solvency II.

“In terms of implementing Solvency II, Munich Re has a clear advantage as a service reinsurer. With advice and consultancy services ranging from analysis of necessary risk capital to assessment of asset-liability management, we can let our clients benefit from our long-standing experience in this area”, said Arnoldussen. The first pilot projects have confirmed the transferability of these concepts to Munich Re’s clients.

While economic conditions have improved markedly in 2009, insurance premiums nevertheless remain under pressure due to dampened economic development and reduced purchasing power. “In times when margins are reduced, individual risk-transfer solutions are particularly valuable. This is precisely where Munich Re’s strength lies”, said Arnoldussen.

Also due to its solid capitalisation, Munich Re will continue to provide substantial capacity in the forthcoming round of renewals. Assuming appropriate prices, terms and conditions, there are no plans to restrict liability limits.

Mixed response to Lloyd’s cat concerns

There has been a mixed response from players in the London market to the news that Lloyd’s is taking a close look at the amount of catastrophe-related exposure in the market.

Moody’s downgrades ING insurance on corporate split

International ratings agency Moody’s said on Wednesday it had downgraded ratings on the insurance business that Dutch group ING intends to split off under restructuring required by EU authorities.

Moody’s also said it would keep the entire group, and also the banking activities, under surveillance with a view possibly to downgrading the long-term ratings.

ING is to split its insurance and banking activities under radical restructuring arising from EU conditions for allowing Dutch state aid.

Moody’s noted that the insurance business would not now be backed by support from the banking division.

In addition, the stand-alone insurance business would be less diversified geographically than when it was part of the whole group.

The agency downgraded the notation on insurance activities in the United States to A2 from A1, and the notation on senior debt for the insurance side to Baa1 from A2.

Moody’s said: “The current lower rating reflects the standalone credit profile of the insurance holding company — excluding Group support — and the
more limited geographical diversification of the insurance group that is likely to result from the disposal of some operations.”

On Monday, ING announced that it would eventually sell its insurance business and issue shares to raise 7.5 billion euros to repay state aid.

This deep restructuring, amounting to separation of the banking and insurance businesses, arisis from proposals put to European Union competition authorities and will be enacted by the end of 2013.

The group also said that it had reached agreement with the Dutch government on an early repayment of part of the support capital provided in October 2008 and January this year. To finance this, it will raise new capital through a share issue.

AON launches a new insurance cover for pandemic building closure

Companies can now insure themselves for costs incurred if their building or the vicinity is officially closed due to a pandemic. With an expected spike in H1N1 cases this winter, Aon, the insurance broker, has created a standalone insurance policy to reimburse companies for wages, fixed costs and extra expenses if they are unable to access their buildings.

After the H1N1 outbreak in April 2009, both the Mexican and Argentinean governments shut their central business districts, public buildings and educational institutes to prevent the spread of infection. If the UK or other governments take similar action in the event that the pandemic escalates, companies may not be able to rely on their standard business interruption insurance policies which traditionally restrict cover to disruption caused only by:

• physical damage

• notifiable diseases of which H1N1 is often not included and is subject to low limits.

The new Aon product is believed to be the first available to all industry groups, rather than solely focusing on hospitals and the healthcare industry. Retail, transport and manufacturing are likely to be the most affected sectors as they rely on public access and staff on site, whereas most financial services employees, for example, are able to work from home.

Matt Harvey, senior wordings technician/broker at Aon for UK/Europe, commented: “Imagine Oxford Street is quarantined in the run up to Christmas. This could lead to massive losses in the retail sector. Winter is looming and companies across the board are working on business continuity plans, identifying everything that could go wrong and looking for ways to protect their business.

“Aon’s new property insurance cover complements these continuity plans to help companies recover the fixed costs of running the business in face of lower revenues. The policy covers costs for additional expenses such as decontamination and additional staff to ensure a business is up and running again as soon as possible after an official closure is lifted.”

Cover can be adapted on a global, regional or single territory basis and companies will also receive a free Business Continuity Management guide to assist in creating, implementing and testing reaction plans.

Delta Lloyd’s initial public offering fully covered

Investors have already placed enough orders to back Delta Lloyd’s 1.2 billion euro (1.1 billion pound) initial public offering (IPO) with about a week to spare, pointing to decent demand for Western Europe’s biggest flotation this year.

A spokeswoman for Delta Lloyd, the Dutch unit of Aviva, confirmed on Tuesday that bookbuilding for the offering was fully covered.

The deal is underwritten by Goldman Sachs, Morgan Stanley, Bank of America Merrill Lynch, J.P. Morgan and RBS.

People familiar with the matter told Reuters earlier on Tuesday Delta Lloyd’s offering, which began bookbuilding on October 19 and will close on November 2, had been covered since Friday.

For all of Europe, the largest deal this year is top Polish utility PGE’s impending $2.2 billion offering.

PGE, which also had its book covered within the first week of bookbuilding, will price its IPO late on Tuesday.

With two major deals closing, Europe’s IPO volume is set to jump to $4.8 billion, from $801 million, according to Thomson Reuters data, bringing Europe’s share in global IPO volume to 6.8 percent, from 1.8 percent.

Bankers are hoping Delta Lloyd and PGE will re-open the IPO market in Europe, which has been stuck in the doldrums — U.S. IPOs have raised $25 billion while Asia registered $38 billion worth of listings excluding Japan, according to Thomson Reuters data.

Europe has seen only 32 IPOs so far this year, including Delta LLoyd and PGE. But there are many deals in the queue.

Private equity-backed travel reservations giant Amadeus, for example, has hired Goldman Sachs, J.P. Morgan and Morgan Stanley for a potential 2 billion euro (1.8 billion pound) offering next year.

Unity Media, Germany’s No. 2 cable operator, is preparing to raise some 1 billion euros towards the end of this year.

Blackstone is also preparing to float Merlin Entertainments, the second biggest theme park operator after Disney, in early 2010, sources have said.

But not all of the IPO candidates will necessarily launch their deals.

“They are not like rights issues — buyers don’t have to buy and sellers don’t have to sell,” said one London-based banker.

An RBS poll of investors showed 15 percent expect the IPO market to re-open in the fourth quarter, while more than half predict it will kick into life in the first half of 2010.

Jonty Turner and Liz Kuhler appointed as Proposition Managers to help develop closer links with brokers

In a move to enhance the development of products and services through even closer links with brokers, Groupama Insurances has strengthened its Proposition Team with the appointments of Jonty Turner and Liz Kuhler as Proposition Managers. Jonty moves over from Groupama Healthcare where he was Claims Manager while Liz joins from Groupama’s Marketing team where she was an Analyst within the company’s specialist research unit. Jonty and Liz now report to Lynn Harris, Head of Customer Proposition.

Lynn Harris, said: “This is a great example of how valuable knowledge already in the business is being used to bring a fresh approach to the Proposition area. These appointments are the first of a number of initiatives that will help us forge even stronger relationships with brokers. We want to gain an in-depth understanding of what our partners need to ensure that our product innovations offer compelling reasons to trade with us. Liz and Jonty will be able to draw on their particular knowledge and experience to help us deliver products to market that brokers and their clients appreciate and value. In particular, we will be using Liz’s research skills to help us create a new networking initiative that will encourage an on-going dialogue with a wide range of partner brokers.”

Liz Kuhler joined Groupama in 2006 and will use her specialist research background to help the company to really understand broker and customer needs.

She added: “I have a strong marketing background and over the past few years have been involved in some detailed analysis of the insurance market and customer expectations. This should really help me to shape initiatives that can really make a difference and help to set us apart from the competition.”

A highly experienced claims professional, Jonty Turner has been with Groupama since 2001 and moves into his new role from the company’s Groupama Healthcare subsidiary where he was Claims Manager from 2005.

He comments: “This is a fresh challenge for me. My years in claims have given me a really solid understanding of the way in which Groupama can differentiate itself for brokers and policyholders. Now I want to put my knowledge into practice to enhance our product and broker service proposition.”

Lynn Harris concludes: “It is great to welcome Liz and Jonty to the team. These are two important appointments, which together with our programme of broker forums and our planned networking initiative really demonstrates how serious we are about the way in which we design and build our various customer propositions. We have a deserved reputation for listening carefully to our customers and we are now intent on responding to this feedback even more quickly so as to gain maximum benefit for Groupama.”

“It is also especially pleasing that we have been able to make these new appointments from within the company – offering further evidence of the depth of talent that exists within our business.”

Lloyd’s examines cat exposure – report

Lloyd’s of London is planning to ask some of its member companies to reduce their exposure to catastrophe-related insurance, the Financial Times reports.

AIR warns of north-east hurricane risk

Insurers and reinsurers should not overlook the possibility of a strong hurricane making landfall on the north-east US coast, Ming Lee, president and CEO of AIR Worldwide, and Jayanta Guin, AIR’s senior vice-president of research and modeling, told the PCI Reporter.

Consolidators at the crossroads

Analysis: And so the consolidation mania rolls on

Aon launches new pandemic cover

With an expected spike in H1N1 cases this winter, Aon has created a standalone insurance policy to reimburse companies for wages, fixed costs and extra expenses if they are unable to access their buildings.

Collins not the end of GC’s US growth

Guy Carpenter is in bullish mood at this year’s PCI meeting. It arrived in Orlando beefed up from its acquisition earlier this year of fellow reinsurance broker Collins.

Brokers not “tuned up or turned on”

Start-up reinsurance broker TigerRisk is adopting a rigorous plan to employ the best people in the brokerage business, Rod Fox, CEO of Tiger Risk, told the PCI Reporter.

Aon acquires Nasdaq insurance unit

Aon has acquired Nasdaq OMX Group’s Carpenter Moore Insurance Services, an executive liability risk management services provider.

AJG to cut 4% of workforce, profits up

Arthur J Gallagher, one of the largest US insurance brokers, has said it plans to slash around 4% of its workforce because of concerns about the market’s operating environment.

Cleaning up claims

Participants at the recent FINEOS roundtable debated the future of the claims process, tackling such topics as customer empathy, new technologies, credit hire and recruitment

Igal and Towergate

Analysis: What’s next for the consolidators and the UK’s largest insurer?

British supermarket Tesco to create 1,000 jobs

Britain’s biggest retailer Tesco said Wednesday that it will create 1,000 jobs at a new customer services centre for its banking division in Newcastle, northeastern England.

“Tesco Bank is creating 1,000 new jobs in Newcastle following a decision to establish a customer service centre in the city,” Tesco said in a statement.
The first 500 posts will be created by the end of 2010.

The government’s Business Secretary, Peter Mandelson, applauded the announcement.

“I welcome this decision and I am proud of the government support that has helped make it happen,” Mandelson said in the statement.

“The jobs created by this investment will be invaluable to the north east and to the wider UK economy.”

The new centre at the Quorum Business Park in Newcastle will handle sales and services for Tesco Bank’s home and motor insurance customers.

The banking division recently created 800 new jobs at a separate facility in Glasgow, as well as 200 additional positions in Edinburgh.

Tesco Bank, which provides credit cards, insurance policies, small loans and savings accounts, has almost six million customers in Britain.

Tesco, the third largest supermarket in the world, is hoping to attract more customers away from Britain’s traditional banking sector amid widespread public anger over the global financial crisis and subsequent recession.

The group bought Royal Bank of Scotland’s 50-percent share in their former joint venture, Tesco Personal Finance, for 950 million pounds (1.4 billion
dollars) last year.

Earlier this month, the supermarket chain relaunched the financial services division as Tesco Bank.

Hibernian Aviva Health looking out for your family with safety advice before Halloween

Every year, children end up injured as a direct result of taking part in Halloween activities. Halloween is one of the busiest times of the year for emergency services and startling figures on the increase of injuries treated at Hibernian Aviva Health’s Xpress Med Urgent Care Centre confirms this avoidable trend. Admissions to Xpress Med during the Halloween period increase by 50%.

Dr Richard Aboud, medical director at Hibernian Aviva Health’s Xpress Med Urgent Care Centres, said: “Hibernia Aviva Xpress Med has seen a 50% increase in easily avoidable injuries such as burn injuries and minor trauma from falls and fire-works during the Halloween break. Halloween is a fun time for adults and children alike but children are more prone to accidents when taking part in Halloween activities, taking a common sense approach to the evening will without doubt prevent the vast majority of injuries.”

Hibernian Aviva Health, as part of National Kids Health month, is calling on parents to be extra vigilant and has the following advice and simple safety precautions to help make sure Halloween is a fun time for all the family.

• Help your child pick out or make a costume that will be safe. Make sure the costume fits properly so it doesn’t drag along the ground and pay particular attention to the shoes, ill fitting shoes can easily cause a fall. Remember to leave enough room for kids to wear warm clothes under their costume as Halloween night can get very cold.

• The eye holes in masks should be large enough for good peripheral vision. This will prevent trips and falls on the road.

• Check that the material in costumes and all accessories including wigs, beards, scarves and hats are flame resistant as bonfires and fireworks are a big part of Halloween. A fire proof costume could prevent severe burns or respiratory problems should it catch fire.

• Don’t forget to put reflective tape and stickers on the costume to ensure trick-or-treaters are visible to traffic.

• If the costume has accessories such as a sword, check that there are no sharp edges and that it is smooth and flexible so it won’t cause an injury if it is fallen on.

• Avoid nasty skin irritations and rashes by spot testing facepaints and glitter before applying to the face. Always use non-toxic paints.

Not only are the tricks a cause for concern, parents should also keep an eye out for the treats too.

• Start Halloween night with a “spooky” dinner. This will help reduce the amount of sweets kids eat while trick-or-treating.

• Nuts and boiled sweets could potentially cause obstruction and choking so parents’ should check their child’s goodie bags.

Hibernian Aviva Health National Kids Health Month runs for the month of October. It is a health information campaign which aims to raise family health awareness among consumers around the country with a particular focus on safety, first aid and healthy eating.

Barclays buys insurer Standard Life for £226 million

Barclays bought the bank arm of insurer Standard Life for 226 million pounds on Monday to build up its mortgage and savings business.

The country’s second-biggest bank said Standard Life Bank would bring with it 78,000 mortgages and 8.8 billion pounds of outstanding balances, and a savings book of about 5.5 billion pounds in 287,000 accounts.

The deal will add about 10 percent to Barclays’ mortgage loan book, which stood at 84.4 billion pounds at the end of June, and 6 percent to its deposit balance of 88.5 billion.

About 270 Standard Life employees will transfer to Barclays when the deal completes.

Barclays, which has weathered the crisis better than most rivals, staying out of state hands, said the deal fitted its aim to target high quality loan and savings books.

At the end of June the average Standard Life Bank mortgage was about 48 percent of the value of the related property, better covered than the average and near the Barclays average of 44 percent. Loans more than three months in arrears were 0.68 percent, compared with 1.16 percent at Barclays, both well below the industry average.

There had been speculation Standard Life might offload its banking business and a source said last month it was in talks with Barclays. The insurer said in February it would not be replacing the unit’s departing chief executive.

Edinburgh-based Standard Life launched its bank in 1998 and became known as one of the relatively few lenders offering long-term fixed-rate mortgages and focussed on lending to customers with a sound credit history.

The unit made an underlying pretax profit of 26 million pounds in 2008, but it dramatically scaled back operations in response to the banking crisis and house price slump, with 2008 gross lending down 70 percent on the year at 1.1 billion pounds.

Barclays and Standard Life said they also plan to enter into a strategic agreement to explore joint opportunities in the retail long-term savings and investments sector.

With reuters

Lloyd’s of London insurance market warns of waning market surge

The Lloyd’s of London insurance market cautioned that a strong investment performance from surging share and bond markets would not be sustained and said its full-year expectations were unchanged.

“There have been no events that have resulted in any material changes to our expectations for the full year,” Lloyd’s said in a trading statement on Tuesday.

Lloyd’s, which traces its origins back 321 years to a London coffee house where merchants met to insure ships, said its investment returns were better than expected thanks to a dramatic recovery in stock and bond markets from lows reached in the wake of last year’s financial crisis.

It said the scope for keeping up this investment performance in the months ahead was “increasingly limited” as the financial market recovery runs its course.

“We expect that current market levels will make it difficult to achieve significant returns in the balance of the year,” Lloyd’s said.

Lloyd’s said it remained financially strong, with total assets exceeding solvency shortfalls by its members by 2.55 billion pounds at September 30, little changed from 2.5 billion pounds three months earlier.

Insurers’ finances look set to get a boost this year thanks to a quiet U.S. hurricane season.

In 2008, Lloyd’s of London’s profit halved after hurricanes Ike and Gustav contributed to total catastrophe-related losses of about $50 billion (31 billion pounds), making it the industry’s second-costliest year on record.

With Reuters

Pension provider Delta Lloyd offers first year’s budget to employers

The pension provider Delta Lloyd is offering the First Year’s Budget to employers from 1 October. The First Year’s Budget meets the costs which employers incur when they take out a pension plan.

Employers can use this as a reduction in the costs of the pension plan or can offset it against the extra man hours put in by pension advisers when setting up the insurance. In addition to the introduction of the First Year’s Budget Delta Lloyd is adjusting the level of the pension provision for the Personal Pension Plan.

The experience of pension advisers and surveys shows that many employers need some means of offsetting the costs which they incur when they conclude a pension contract. The lion’s share of the costs of a pension plan is incurred in the start-up period. The Resolution on the Monitoring of Conduct of Financial Companies (BGFO, in Dutch) states that sales-related commissions are no longer permitted since the start of this year. With budgets in free-fall, Delta Lloyd is taking employers’ needs on board by introducing a First Year’s Budget.

What’s included in the First Year’s Budget?
The First Year’s Budget is based on the annual premium under the contract. The First Year’s Budget only applies to the setting up of the pension contract. It applies both to new contracts and to contracts that have been extended by a minimum contract period of five years based on a premium volume of €10,000.

Why have a First Year’s Budget?
Despite the fact that 55% of employers consider a good pension provision to be the most important secondary condition of employment for their employees (after leave allowance), 25% would currently make direct savings on their employees’ pensions if they could do so*. So employers have an eye on affordability and want to have more insight into setting up pensions. Employers need clear communication when it comes to pensions. This is why it costs more time and money for employers to set up a good pension plan. The First Year’s Budget absorbs the initial costs when taking out pension insurance.

Why is the maximum provision for the Personal Pension Plan being adjusted?
In the interest of an available premium plan for the individual stakeholder, Delta Lloyd has reduced the maximum provision of the Personal Pension Plan. The current provision of the Personal Pension Plan is being maximised to 8% and a maximum of 50% of this can be converted to cash.

30th Congress of AIAG: Sustainable crop insurance systems needed throughout the world

From 4 to 7 October, Rome hosted the 30th biennial congress of the International Association of Agricultural Production Insurers (Association Internationale des Assureurs de la Production Agricole or AIAG ).

At the congress, Munich Re Agro accentuated a number of important points and generated new impetus to move forward with the worldwide discussion regarding public-private partnerships (PPP) for crop insurance systems.

Munich Re Agro took the opportunity offered by the congress to present the SystemAgro crop insurance system, which functions within the framework of a public-private partnership (PPP), and to explain clearly why SystemAgro is the system of the future.

SystemAgro creates a basis for offering all farmers affordable multi-peril crop insurance and reliable protection in the event of catastrophe. This depends particularly on the collaboration of the state government, which subsidises premiums and, in the event of a catastrophe, pays part of the insured losses. The infrastructure of existing crop insurers is used to implement the system on a broad scale. As stated in the presentation, “Only shoulder to shoulder with the government is the insurance industry able to offer multi-peril crop insurance that sustainably covers the increasing severity of climatic oscillations and thus offer farmers a stable financial basis”. To develop this concept, Munich Re analysed all the sustainable crop insurance systems around the world and is consequently able to produce a customised SystemAgro solution for each and every country.

The congress participants were in agreement that worldwide awareness of the need for public-private partnerships in crop insurance will significantly increase in the future.

The AIAG was founded in Zurich in 1951 with the aim of providing insurers in the agricultural sector with a platform for exchanging opinions, experience and statistics relating to the insurance of hail and other natural hazards. Munich Re has been active in the AIAG for more than two decades. Participants in the congress also included influential organisations with close ties to national governments.

Munich Re will present SystemAgro again at the Global Forum for Food and Agriculture (GFFA) in Berlin on 16 January 2010.

Willis Re launches new service designed to manage client risk and maximize franchise value

Value Based Capital Management is the First and Only Commercially Available Service Created to Measure Risk, Manage Capital and Protect Current and Future Earnings

Willis Re, the reinsurance division of global insurance broker Willis Group Holdings Limited, today unveiled Value Based Capital Management (VBCM), the reinsurance industry’s first and only practical, commercially available service designed to measure risk, manage capital, and maximize franchise value.

Launched at the 2009 Property Casualty Insurers Association of America’s Annual Meeting here, VBCM enables Willis Re clients to answer three key questions: how much overall risk are we taking; how much capital should we have; and what actions can we take to make our firm more valuable? While insurers have traditionally used reinsurance to reduce their underwriting risk, up to now they have had no effective mechanism to evaluate which products best protect their firm’s value. VBCM not only solves that problem, but goes further, offering insurers a holistic tool to measure and address their complete risk profile based on how best to protect and grow franchise value.

Bill Panning, Executive Vice President of Willis Re said: “Willis Re believes that insurers should no longer face the difficult tradeoff between maximizing earnings and protecting against risk,”. “VBCM enables insurers to determine for the first time which particular strategic choices will enable them to maximize their franchise value as a going concern. Today’s announcement is the latest in Willis Re’s long history of providing key strategic tools that enable our clients to thrive.”

In focusing on franchise value, VBCM rejects the notion, implicit in many analytic tools, that a client’s business should be valued and therefore managed as if it were in runoff. Like traditional Enterprise Risk Management (ERM), VBCM begins with a comprehensive assessment of an insurer’s overall risk from multiple sources, including underwriting, adverse loss reserve development, stock market volatility, bond defaults, and reinsurer default risk. But VBCM goes well beyond typical ERM analysis. It not only addresses how much and what form of capital a firm should have given its overall risk profile, but also responds to these critical questions by identifying the amount and type of capital that maximizes the insurer’s value as a going concern.

“VBCM’s methodology and the answers it provides are both transparent and practical,” added Panning. “At Willis Re, we believe our clients deserve tools that can be indispensable not just to informing strategic decisions, but also to answering the key questions posed by shareholders, rating agencies, analysts, and regulators. In the current market environment, that kind of information is more important than ever.”

One of the world’s leading reinsurance brokers, Willis Re is known for its world-class, applied Analytics capabilities, which it combines with its Capital Markets and Reinsurance expertise in a seamless, integrated offering that helps clients increase the value of their businesses. Willis Re serves the risk management and risk transfer needs of a diverse, global client base that includes all of the world’s top insurance carriers. The broker’s global team of experts offers services and advice that help clients make better reinsurance decisions, access worldwide capital markets and negotiate optimum terms.

Time to revisit earthquake risk

The market is still adjusting to recent cat model changes. Risk Management Solutions (RMS) unveiled its new models for US earthquake risk in August.

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