November 2013

Talk Around the Bazaar

According to Insurance Insight, the Chinese regulator is backing a new free trade zone in Shanghai (http://www.insuranceinsight.com/insurance-insight/news/2297437/chinese-regulator-backs-shanghai-free-trade-zone?wt.mc_ev=click&WT.tsrc=Email&utm_term=&utm_content=Chinese%20regulator%20backs%20Shanghai%20free%20trade%20zone&utm_campaign=Insurance%20Insight%20Asia%202%20October%202013&utm_source=Insurance%20Insight%20Daily%20Newsletter&utm_medium=Email) citing the attraction of a more foreign-friendly business environment. Although reference to flexible foreign exchange regulations is intimated, it does not go as far as the FTZ-Shanghai business publication which highlights eight advantages of a free trade zone at http://www.ftz-shanghai.com/ Compare that to the European Union!

The European Commission has asked for a delay in the implementation of the Solvency II regulations, stating that the current planned date is no longer tenable. LSE has the story at http://www.lse.co.uk/AllNews.asp?code=lgt6s0so&headline=European_Commission_Asks_To_Delay_Solvency_II_Insurance_Rules_To_2016 whereby too many ifs and buts are making it difficult to achieve the necessary harmonisation of the treatment of insurance products with long-term guarantees. It keeps someone in a job…

The insurance industry’s interest in Africa is growing, as the continent is expected to be home to seven of the world’s fastest-growing economies by 2015. But the industry faces a number of challenges, including disparities in economic conditions and local regulations. Advisen quotes our good friend Michael Duncan in a very interesting article at http://eurfpn.advisen.com/fpnHomepagep.shtml?resource_id=206669568110112057&userEmail=george.worsley@worldwiderisksolutions.com#top

The Aon Benfield Insurance Risk Study continues to be one of the industry’s leading sets of risk parameters for modelling and benchmarking underwriting risk and global profitability. The 2013 study quantifies the systemic risk by line for 49 countries worldwide has just been published and can be accessed at http://thoughtleadership.aonbenfield.com/Documents/20130903_ab_analytics_insurance_risk_study.pdf Study this with a cup of coffee in the morning, a cup of tea in the afternoon or a good glass of wine at the end of the day

For those of us who prefer to walk on two legs, the second cup or glass should accompany the well-written article by FM on Managing Tomorrow’s Risks at http://www.fmglobal-touchpoints.co.uk/risk-manager-7-13.htm

Despite the fact that captives have been around for more than 50 years, too few of the smart people in our industry realise that investment in a captive is but a fraction of the benefit. With the launch of an offering to the US market, Alterra has articulated a message many people do not seem to have understood. See the article in Captive International at http://www.captiveinternational.com/news/the-captive-benefit-at-a-fraction-of-the-investment

The Central Bank of Russia has issued a worrying message to the insurance industry: eight of the country’s 20 largest insurance companies could be heading for bankruptcy. This is startling – not in the least for the instability it causes. Read the article in Advisen at http://eurfpn.advisen.com/fpnHomepagep.shtml?resource_id=206786713-948461507&userEmail=george.worsley@worldwiderisksolutions.com#top and make up your own mind

Aon Benfield has been busy. A study highlighting the dearth of Natural Disaster Insurance has just come out. A summary by Intelligent Insurer can be read at http://www.intelligentinsurer.com/news/loss-highlight-dearth-of-national-disaster-insurance?utm_source=Insurance&utm_campaign=0886692253-Intelligent_Insurer_Weekly_09_10_2013&utm_medium=email&utm_term=0_f246694353-0886692253-27166897 The full Global Recap report is a click away at http://thoughtleadership.aonbenfield.com/Documents/20131007_if_september_global_recap.pdf

Sir Isaac Newton’s Law of Motion has been found wanting in the world of piracy. For “To every action there is always an equal and opposite reaction” to be correct, ransom and measures to restrict piracy should cost insurers in excess of US$6 billion – and that is not the case. Someone is making that sort of money out of piracy and it is neither the pirates nor the insurers. The Times of India knows the answer and you can read all about it at http://articles.timesofindia.indiatimes.com/2013-10-18/india/43177659_1_guards-maritime-security-features

iNavigator is always quick with good news and their latest issue is no exception. The report of the NIBA Award Winners highlights an individual who has done a lot to further the growth and development of enterprising brokers in Australia. To read the big picture naming award winners, please see http://www.inavigator.com.au/members/blogArticle.asp?id=942 and to read the big story continue with Insurance and Risk Professional at http://insuranceandrisk.com.au/4bc07221/Five_minutes_with__Lach_McKeough_Austbrokers

One has to be careful with the term fat cat because that is not the abbreviation of the Foreign Account Tax Compliance Act (FATCA), an agreement recently signed by the UK and Guernsey. This inter-governmental agreement (IGA) is aimed at advancing automatic tax information exchange provisions and is much easier to understand if you read the explanation provided by Guernsey Finance at http://www.guernseyfinance.com/press-room/news/2013/10/guernsey-signs-%27fatca%27-agreement-with-the-uk/

Famous quotations. Here are some words of wisdom which have survived the passage of time…

· “I suppose leadership at one time meant muscles; but today it means getting along with people” – Indira Ghandi

· “I am not young enough to know everything” – Oscar Wilde