October 2012

Talk Around the Bazaar

During the past few months the international insurance industry has published some well-written papers on the design and implementation of cross border- and global programmes. These are welcome because there are still many misconceptions about doing business internationally. Recently our good source of information in Australia, JMD Ross (http://www.jmdross.com.au/) sent us additional pertinent comment on the importance of choice-of-law questions in contracts with international elements. The study by Clayton Utz Insights at http://www.claytonutz.com/publications/edition/30_august_2012/20120830/does_your_choice_of_law_for_the_contract_extend_to_the_international_arbitration_agreement.page is worth the read

Insurance Insight recently reported on a briefing by Standard and Poor’s which advises reinsurers to tread with caution when considering diversifying their operations in natural catastrophe prone regions (http://www.insuranceinsight.com/insurance-insight/news/2202868/reinsurers-to-diversify-more-cautiously-after-2011-cat-losses).  As we will see in a separate item, from AM Best (http://www.bestweek.com/europe/promo/apreinsurrpt.pdf), the ratings organisations are targeting the attention to large scale natural catastrophes as vital when preserving capital before primary carriers and reinsurers diversify their activities

Very recently, the EU Code of Conduct Group agreed Guernsey’s repeal of clauses in its distribution provisions removed the deemed “harmful effects” of certain adjustments to the Island’s corporate tax regime. It is now “business as usual” as readers can see at http://www.guernseyfinance.com/press-room/news/2012/09/guernsey%E2%80%99s-zero-10-regime-given-eu-approval/

No wonder the champagne is flowing in St Peter Port: Business Life reports that Guernsey has moved up in the rankings of global finance centres, as one can read at http://www.businesslife.co/BusinessNews.aspx?id=guernsey-moves-up-rankings-of-global-finance-centres

A question we have for our readers is: what is the link between submersible switches and New York City? The attached article from Advisen will clarify this at http://propfpn.advisen.com/fpnHomepagep.shtml?resource_id=1840898131886207275&userEmail=george.worsley@worldwiderisksolutions.com#top and a clue is – water around Manhattan has been rising by about an inch a decade…

The scale of fees applied by Lloyd’s Agents when settling claims abroad has been revised. To see the new provisions, please click here.

The excellent South African magazine Cover has reported on the latest Swiss Re study by Sigma: Facing the Interest Rate Challenge. Although interest rates affect all insurers, some lines of business are much more vulnerable than others. There are many observations to be made and, obviously, the starkest is that non-Life insurance premiums can only go up. Read more at http://www.cover.co.za/news/swiss-res-latest-sigma-study-facing-the-interest-rate-challenge

For many years, Burma was the name of a country pretty well closed off to the western world. Apart from news about Nobel Peace prize winners, there was not much people could find to read. Gradually, the name the country’s dictators forced upon people is becoming accepted and as moves are underfoot to open the insurance sector to foreigners, Myanmar is the country people are talking about. Business Insurance reports about developments there at http://www.businessinsurance.com/article/20120914/NEWS04/120919927?tags=158|159|58|76|59 but there is no mention of which name the former capital and most important city will have: Rangoon or Yangon

Only a few days ago, Lloyd’s proudly unveiled a very healthy set of figures: half year results represented an interim profit of £1.54 billion (http://www.lloyds.com/lloyds/investor-relations/financial-performance/financial-results/2012-interim-results). A couple of centuries after a certain Horatio Nelson became the talk of the town in this venerable institution, another Nelson is getting all the attention. John Nelson became the chairman of Lloyd’s last year and now that he has settled down, he gave an interview with Business Insurance which highlights an outsider’s view from the inside, as readers will see at http://www.businessinsurance.com/article/20120916/NEWS04/309169985

After decades of talk about raising the level of professionalism in the insurance industry to that of lawyers, for example, one country has learned the lesson that one must link qualifications to approval and permission to carry out insurance-related activities. And which country has done this? The UAE has published draft laws which demand that, amongst other things, brokers will have to hold a UK Chartered Institute of Insurance or equivalent qualification before they can become licensed. The International Adviser has the full story at http://www.international-adviser.com/news/middle-east/uae-brokers-face-sweeping-and-punitive

Tax and regulatory news can also bring relief – in the form of exemptions, clarification and amendments to onerous rules. Commercial Insurance Europe has a very good article about developments in many countries at http://www.commercialriskeurope.com/cre/1688/15/Tax-and-regulatory-news/

As most of our readers will be aware, Pojistný obzor is the insurance magazine in Hungary which is produced by a member of the PIA. We are able to publish the latest issue of Insurance Horizon and can direct you to interesting comments in English on pages 3 and 39-43.

Ace advise us that they have acquired 80% of Asuransi Jaya Proteksi in Indonesia. For the full text of the news release, please go to http://news.acegroup.com/news/acegroup/20120918006956/en/ACE-Acquires-80-Asuransi-Jaya-Proteksi-Indonesia

Did you know? Here are some interesting facts which could come in handy to know…

  • Bacteria, the tiniest living cells are so small that a single drop of liquid contains as many as 50 million of them
  • Clouds fly higher during the day than during the night