December 2013

Talk Around the Bazaar

Brazil, Russia, India, China and South Africa are planning to set up a reinsurer after India suggested that a reinsurer will cover major infrastructure projects and counter sanctions imposed by western nations, The Economic Times has reported. There are some sensitive issues here. The report, http://articles.economictimes.indiatimes.com/2013-11-11/news/43929958_1_brics-development-bank-reinsurance-crude-purchases suggests countering sanctions by western nations and that will not go down well

New Zealand’s insurance industry is adjusting to a ‘new normal’ following Christchurch earthquakes, according to a unit of KPMG’ New Zealand as reported by Voxy at http://www.voxy.co.nz/business/insurance-industry-adjusts-new-normal/5/173735. But all is not well with claims settlements following the disaster. It would appear that complex issues relating to the land, the Earthquake Commission and other events such as overlapping claims are hampering progress. For more, please go to the Radio New Zealand article of the 14th November at http://www.radionz.co.nz/news/national/227615/reinsurer-says-nz-payouts-held-up-needlessly

According to the World Bank, natural disasters have cost the world more than US$4 trillion and 2,5 million lives over the past 30 years. The report released during a recent UN conference on climate change is sobering. Advisen has details at http://propfpn.advisen.com/fpnHomepagep.shtml?resource_id=2091467912222&userEmail=george.worsley@worldwiderisksolutions.com#top

Not surprising, therefore that a top Philippines government official has urged countries worldwide to come up with a mandatory disaster insurance scheme to share the burden of the aftermath of calamities. The country’s Finance chief also believed that the International Monetary Fund would be the most inclusive organisation to implement such a mandatory disaster insurance programme. Advisen reports on this at http://eurfpn.advisen.com/fpnHomepagep.shtml?resource_id=208760236-90123852&userEmail=george.worsley@worldwiderisksolutions.com#top Meanwhile, the European Parliament has recently issued a draft report on the insurance of natural and man-made disasters and this can be viewed at http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+COMPARL+PE-519.700+01+DOC+PDF+V0//EN&language=EN

After much haggling, European policymakers have finally agreed on the rules for Solvency II which will set the rules for capital requirements for insurers. If/when endorsed by the member states, Solvency II comes into force on the 1st January 2016. Commercial Risk Europe breaks the news at http://www.commercialriskeurope.com/cre/2787/56/Political-agreement-on-Solvency-II-set-to-see-rules-finally-introduced-in-2016/ and Business Insurance gives the first reactions at http://www.businessinsurance.com/article/20131114/NEWS04/131119916?tags=334|371|158|169|168|167|93|98|58|76|73|72

According to the International Monetary Fund, Singapore’s regulation and supervision of its insurance sector and financial system in general has been assessed as amongst the best in the world. This good news is tempered by some risks highlighted in the report by Channel News Asia at http://www.channelnewsasia.com/news/business/singapore/singapore-s-financial/886994.html whereby rising credit growth could be impacted by spikes in interest rates – especially in the United States. You just can’t win!

A high profile visit to China by government and financial leaders from Guernsey has received praise in the local press. Guernsey Finance has been very active and positive in their dealings with the Chinese authorities and they recently agreed Memoranda of Understanding with the Chinese Securities Regulatory Commission. Guernsey Isle News has a very good article at http://guernsey.isle-news.com/archives/guernseys-finance-industry-gets-timely-exposure-in-china/14101/

For many years captive insurance companies have perched safely under the wing of their parent company and not sought to boast their financial fitness by seeking a rating. That is changing and especially for those captives who handle third party business it is – to us – crucial to the comfort levels of the insured. AM Best is now identifying a trend that more and more captives are becoming rated. Captive International tells us the reasons why at http://www.captiveinternational.com/news/am-best-number-of-rated-captives-climbs-despite-soft-market?utm_source=Insurance&utm_campaign=83554f2c25-Captive_Weekly_News_21_11_2013&utm_medium=email&utm_term=0_f246694353-83554f2c25-27166897

An interesting article by Artemis ends with “This year, 2013, has seen considerable discussion on where the reinsurance market is going next, triggered by difficult economic conditions, over-capitalisation and the growing interest from capital markets in reinsurance as an asset class. This discussion is set to rumble on and it will be interesting to see how the tone of conversation changes post January renewals after we see which direction the trajectory of reinsurance rates is headed”. The underlying message is that underwriting is attracting increased focus as alternative reinsurance capital challenges mount. To read this thought-provoking article, please go to http://www.artemis.bm/blog/2013/11/21/underwriting-a-focus-as-alternative-reinsurance-capital-challenges-mount/

And now for some good news: the Atlantic Hurricane Season has been the quietest since 1950. The predictions for the 2013 season had not been good but UPI reports the Atlantic has seen the fewest number of hurricanes since 1982. Read more at http://www.upi.com/Science_News/2013/11/25/2013-hurricane-season-said-quietest-since-1950/UPI-59621385421536/

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

· “If you would hit the mark, you must aim above it:  every arrow that flies feels the attraction of earth” – Henry Wadsworth Longfellow

· “Few great men could pass through Personnel” – Paul Goodman