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Thursday
07/31/08 |
Your Insurance News "Strategic
Relationship"
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Read online at
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Walt Podgurski, CLU, CES, Publisher & Editor
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Daily Quote:
"Without the strength
to endure the crisis, one will not see the opportunity within. It is
within the process of endurance that opportunity reveals itself." - -
Chin-Ning Chu
"In a time of crisis we all have the potential to morph up to a new
level and do things we never thought possible." - - Stuart Wilde
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We are
Chipping Away at the
Limited Nature of Mini-Med Plans!
Patient Advocacy from The Karis Group - A new value-added
benefit to all Foundation One plans effective September 1st! |
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- The Karis Group is a
patient advocacy service that helps answer the question,
“What happens when plan benefits are not enough?”
- They help patients with
large out-of-pocket balances by mediating between the
patient and providers to resolve outstanding bills.
- Historically, Karis
saves patients over 30% on their bills, and is able to
get some type of reduction on 3 out of 4 bills they work
on.
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Limited
Benefit Healthcare Solutions Since 1999
Call us today for
more information: 877-712-4004, ext. 3
website: www.found1ins.com
email: info@found1ins.com
Foundation One Security is
underwritten by: American Fidelity Assurance Company, Oklahoma City,
OK.
Policy limitations and exclusions apply.
The Karis Group is not part of the fully insured benefits provided
by American Fidelity Assurance Company. |
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M&A / ALLIANCES / EARNINGS
/ CAPITALIZATION |
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Insurance broker Willis net slides 50 pct |
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NEW YORK, July 30 (Reuters) - Willis
Group Holdings Ltd (WSH.N: ), the world's third largest
insurance broker, said on Wednesday that its quarterly net
income tumbled 50 percent on charges for contract buyouts,
severance and other costs.
Willis' second-quarter net fell to $39 million, or 27 cents a
share, from $78 million, or 54 cents, a year-ago.
Willis said it took a $62 million charge in the quarter as it
bought out some employees' contracts and paid others severance
as part of cost cuts it says will be used to fund hires and
initiatives in certain areas.
Excluding those charges, earnings rose 9 percent to 59 cents a
share, in line with analysts' forecasts.
The cost-cutting moves will result in savings of between $25
million and $35 million this year and between $45 million and
$55 million in 2009, Willis said.
Willis, which last month agreed to buy smaller rival Hilb Rogal
& Hobbs Co (HRH.N: ) for $1.7 billion, said it had revised its
outlook as a result, but that it still expects full-year
adjusted earnings per share to be in the range of $2.85 to $2.95
this year.
But it lowered its outlook for 2009 by 15 cents a share to a
range of $3.15 to $3.25 a share. It raised its outlook for 2010
by 5 cents, to a range of $4.05 to $4.15. (Reporting by
Christian Plumb, editing by Leslie Gevirtz)
© Thomson Reuters 2008 All rights reserved
1.
Bush Signs U.S. Housing
Rescue Plan Into Law
By Jeremy Pelofsky
WASHINGTON,
July 30 (Reuters) - As home foreclosures rise and property
values slump, U.S. President George W. Bush on Wednesday signed
into law a rescue package that includes emergency backstops for
mortgage financing companies Fannie Mae (FNM.N: ) and Freddie Mac (FRE.N: ).
Despite
opposition to a provision that offers $4 billion in grants to
states to buy and repair foreclosed homes, Bush reversed his
opposition to the overall legislation because it included
numerous other key housing reforms.
The new law
boosts oversight of Fannie Mae and Freddie Mac, which own or
guarantee almost half the country's $12 trillion in home
mortgage debt. It also expands a temporary line of U.S. Treasury
credit and gives the government the option to buy shares in them
if they ran into trouble.
"We look
forward to put in place new authorities to improve confidence
and stability in markets, and to provide better oversight for
Fannie Mae and Freddie Mac," said White House spokesman Tony
Fratto.
Bush signed the
measure in the Oval Office shortly after 7 a.m. EDT (1100 GMT)
with his economic team on hand, including Treasury Secretary
Henry Paulson who helped negotiate the package with the
Democratic-controlled Congress.
The new
measures come as prices of U.S. single-family homes plunged at a
record pace in May from a year earlier. The closely-watched
Standard & Poor's/Case Shiller composite index of 20
metropolitan areas fell 0.9 percent in May from April, bringing
the measure down 15.8 percent from May 2007.
The new law
also sets up a $300-billion fund under the Federal Housing
Administration to help distressed homeowners get more
affordable, government-backed mortgages and get out from under
exotic mortgages they cannot afford.
"The Federal
Housing Administration will begin to implement new policies
intended to keep more deserving American families in their
homes," Fratto said.
The bill also
offers tax breaks to spur home-buying; sets up the first
national licensing system for mortgage brokers and loan
officers; and raises the limit on the size of mortgages that
federal agencies can guarantee. (Reporting by Jeremy Pelofsky;
Editing by Theodore d'Afflisio)
© Thomson
Reuters 2008 All rights reserved |
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2.
US FDIC May Pay Out
Almost $12 Bln Through 2010 |
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WASHINGTON, July 29 (Reuters) - The Federal Deposit Insurance Corp could
pay almost $12 billion to cover insured bank deposits through fiscal
2010 if more banks fail, updated White House budget estimates show.
So
far this year, seven banks have failed, including IndyMac Bancorp Inc (IDMC.PK: ), the third largest bank failure in
U.S. history.
The FDIC has already put the cost of IndyMac's failure to its insurance
fund at between $4 billion and $8 billion.
The White House's mid-year budget review, issued on Monday estimates the
FDIC's insurance fund will pay out $2.54 billion in fiscal year 2008,
which ends Sept. 30, another $9.21 billion in 2009 and $150 million in
2010.
In
its February budget proposal, the Bush administration had projected the
FDIC would not pay any claims and instead build up its reserves by $9.1
billion between 2008 and 2010, making about a $21 billion swing to the
latest numbers.
"The recent bank failures occurred after we locked down our (latest)
numbers, but those numbers reflected aggregate banking industry
conditions, including higher prospects for deposit insurance losses,"
said Corinne Hirsch, a spokeswoman for the White House Office of
Management and Budget.
The FDIC declined to comment on the White House estimates.
The FDIC oversees an industry-funded reserve of about $53 billion used
to insure up to $100,000 per deposit and $250,000 per individual
retirement account at insured banks.
At
the end of the first quarter, some 90 institutions were on the FDIC's
watch list and historically about 13 percent of banks placed on it have
failed. The list is due to be updated next month.
FDIC Chairman Sheila Bair has said she would be surprised if she saw
another failure like IndyMac, or larger, and the FDIC board will meet in
September to determine how to replenish the insurance fund.
Bank regulators are considering charging higher premiums for banks that
rely on volatile secured funding like brokered deposits -- short-term
deposits accepted by banks to fund lending activity.
Bair has said adjusted premiums for this activity could prove to be a
useful risk management tool and provide banks with an incentive to be
careful about where they seek funding. (Reporting by Jeremy Pelofsky and
John Poirier; Editing by Tim Dobbyn)
©
Thomson Reuters 2008 All rights reserved |
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3.
California Earthquake Authority (CEA) Prepares Response to Possible
Insurance Claims Resulting from Today's Earthquake Affecting the Greater
Los Angeles Area |
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SACRAMENTO, Calif.--(BUSINESS WIRE)--The CEA’s emergency response plan
for policyholders has been implemented and staff members mobilized
immediately upon notification of today’s earthquake. Damages were minor,
according to reports available within two hours of the event.
“We will be working closely with our participating insurance companies
to promptly process any claims under CEA policies,” said CEA CEO Glenn
Pomeroy. “We are fully prepared and funded to cover all eligible
claims.”
CEA policyholders who experienced or suspect damage should contact their
residential or renters insurance agents or companies to file claims. A
list of toll-free telephone numbers for insurance companies that sell
and service CEA insurance is available at
www.EarthquakeAuthority.com.
Of
the approximately 12 percent of households statewide that have
earthquake insurance, CEA provides about 70 percent of those policies.
About 250,000 CEA policyholders – nearly one-third of CEA’s total
770,000 policyholders – live in the greater Los Angeles area and may
have been affected by today’s earthquake.
The CEA is a privately financed, public-managed entity that is funded by
insurance companies and customer premiums. It has nearly $9 billion
available to pay claims resulting from residential earthquake damages to
insured properties. |
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4.
Milliman Survey
Indicates Lower Health Insurance Rate Increases |
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SEATTLE, July 30 /PRNewswire/ -- Preliminary results from Milliman's
2008 Group Health Insurance Survey indicate premium rate increases
continue to exceed the government's official rate of inflation but are
lower than premium increases in recent years. The 2009 estimated January
renewal increases of 8.5% for Health Maintenance Organizations (HMOs)
and 9.4% for Preferred Provider Organizations (PPOs) continue a trend
toward lower increases since peaking at 16.1% in 2002. This marks the
sixteenth year that Milliman has conducted the survey.
The Milliman survey is unique in that it asks HMOs and PPOs to respond
regarding a given set of benefits and demographics. The survey removes
three important factors that can skew the results of other health cost
surveys: differences in benefit design, cost sharing levels and member
demographics.
Doug Proebsting, co-author of the report, notes that "Possible
contributing factors to the rise in healthcare costs beyond the average
rate of inflation (excluding aging and benefits) include increasing
consumer demand due to direct to the consumer marketing and the
availability of medical information on the internet. Rising rates of
chronic conditions (like obesity, diabetes and asthma), new technology,
specialty drugs, a move away from traditional managed care (such as
preauthorization and closed network products), cost shifting impact from
government healthcare programs and the uninsured, and the recent surge
in building new hospitals also may contribute to the rise." On the other
hand, Proebsting noted, "Potential factors contributing to the
deceleration in recent rate increases include added consumer cost
awareness as evidenced by higher use of generic drugs, lower utilization
within HSA high deductible plans, and an economic downturn that may
leave less money available for discretionary care for some people."
The survey was sent to the nation's HMOs and fully insured PPOs that
serve the commercial, large and mid-group employer market. These results
are preliminary; Milliman will continue collecting data for the 2008
Group Health Insurance Survey through the summer months. About 40% of
all eligible insurers typically participate. Final results will be
published in October.
The October report will include premium rates and trends for medical and
prescription drugs. Milliman will also report hospital inpatient cost
and utilization data, physician reimbursement levels, medical expense
ratios and profit levels. Results will be provided by metropolitan area,
state, region and nationwide. Results for HMOs and PPOs will be shown
separately. The survey will also include information on prescription
drug claim costs, premium differences due to deductible levels, growth
in consumer-driven healthcare, broker commissions, and the
implementation of ICD-10 codes.
http://www.milliman.com |
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5.
Eastbridge Releases
Report on Today’s Limited Benefit Medical Plans |
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AVON, Conn.--(BUSINESS WIRE)--One of the voluntary industry’s responses
to the uninsured crisis is the development of voluntary medical
products; specifically, the limited benefit medical plan (also often
called a “mini-med” plan). The mini-med product was originally designed
for employees who do not generally have access to traditional medical
insurance—part-time, seasonal, temporary, hourly, and 1099 employees.
This meant the product was sold primarily in industries with high
concentrations of these types of employees. Today, however, the product
is quickly becoming an alternative for all uninsured workers.
The objective of the Limited Benefit Medical Plans Spotlight Report is
to help carriers stay current on the evolving limited benefit medical
market. The report includes competitive intelligence on these products
(i.e., products that have a hospital indemnity product at the core with
wrap-around, non-insured discount plans and services). Specifically, it
covers the following topics:
*
Plan structure and benefits
*
Underwriting requirements for both employee- and employer-paid plans
*
Plan design limitations
*
Billing practices including handling short premiums
*
Open enrollment period practices
*
Average plan premiums
*
Commissions
In
addition, the report looks at the overall market and some of the trends
driving it. With this information, carriers can measure their products
against others and become familiar with today’s trends in the limited
benefit market.
The report is now available for purchase for $2,000. More information
about the report, including the table of contents, is available on the
Eastbridge website (www.eastbridge.com).
To purchase the report, e-mail us at
info@eastbridge.com or phone
(860) 676-9633. |
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6.
Moody's Profit Drops 48
Pct As CDO Demand Shrivels |
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NEW YORK (Reuters) - Moody's Corp (MCO.N: ), the parent of Moody's Investors Service, on Wednesday said
second-quarter profit fell 48 percent, hurt by a steep slide in demand
for credit ratings for structured products in the year-long credit
crisis.
Results nevertheless topped analyst forecasts. McGraw-Hill Cos (MHP.N: ), which operates Moody's main rival
Standard & Poor's, on Tuesday posted a smaller-than-expected 23 percent
decline in quarterly profit. Both companies also affirmed their 2008
earnings forecasts.
Second-quarter net income for New York-based Moody's, whose largest
investor is Warren Buffett's Berkshire Hathaway Inc (BRKa.N: ) (BRKb.N: ), fell to $135.2 million, or 54 cents per share, from $261.9
million, or 95 cents, a year earlier.
Moody's said profit excluding items was 51 cents per share. On that
basis, analysts on average expected 47 cents per share, according to
Reuters Estimates. Revenue fell 25 percent to $487.6 million, topping
the average $465.7 million forecast.
The revenue decline was driven by a 56 percent plunge in revenue from
structured products such as collateralized debt obligations, often tied
to mortgages. In the United States alone, structured finance revenue
fell 67 percent. Expenses declined 10 percent as Moody's cut jobs.
Though profit and revenue rose from the first quarter, Chief Executive
Raymond McDaniel said first-half results reflected "persistently
difficult" market conditions." He said Moody's was "cautious" about a
credit market recovery in 2008.
Moody's still expects 2008 profit per share of $1.90 to $2.00, with
revenue down by a mid- to high-teens percentage.
Moody's shares closed Tuesday at $36.15 on the New York Stock Exchange.
They have risen 1 percent this year, but have fallen 52 percent from a
peak of $76.09 in February 2007.
(Reporting by Jonathan Stempel; Editing by Maureen Bavdek)
©
Thomson Reuters 2008 All rights reserved |
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7.
Pension Buyout Firms
Face New Challenges |
|
By
Simon Challis
LONDON (Reuters) - Pension buyout insurers, which struggled last year to
prove the market would live up to the hype that surrounded it, now face
a new challenge keeping up with explosive growth in demand for their
products.
The pensions buyout market after a slow start has taken off in the past
nine months, with over 6 billion pounds worth of deals done.
Now insurers, which have exploited a growing eagerness among firms to
offload final-salary pension risks to third parties for a fee, are
struggling to keep up with demand.
Buyout insurers replace a company's pension promise to scheme members
with an insurance policy that guarantees a set income in retirement.
Analysts say this has proven the most popular method of offloading such
pension risks partly because they are regulated by the Financial
Services Authority, which gives trustees more comfort than other
options.
The market may smash initial estimates that deals worth 10 billion
pounds could be done this year due to demand from pension schemes.
"A
number of schemes want to offload as much as 2 billion pounds worth of
liabilities each. You don't need too many of those size deals to double
or even treble that 10 billion estimate," said Chris Wales, managing
director of pension buyout firm Lucida.
Yet the pensions buyout market has an overall estimated current capacity
of around 15 billion pounds and pension trustees who want to do a deal
are starting to worry that insurers won't have the capacity to take
their pension risks.
The credit crunch and gloomy economic outlook may prevent the market
hitting the 20 billion to 30 billion mark, because some firms are likely
to lack the spare cash needed to pay the hefty premiums required by
insurers to take their pension risks.
But the trend is gathering pace as companies find pension costs spiral
due to tougher regulation and to the fact that pensioners are living
longer.
A
recent poll by PwC found that 43 percent of large firms and over a
quarter of smaller ones are looking to transfer their pension
liabilities, meaning the buyout market is set to come under increasing
strain.
©
Thomson Reuters 2008 All rights reserved |
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8.
Dinallo Sees Bond
Insurer Crisis Closer To End |
|
By
Joseph A. Giannone
NEW YORK (Reuters) - The bailout of bond insurer Security Capital
Assurance solved one more piece of the credit crunch puzzle and brought
more certainty to a critical part of the financial markets, New York
Insurance Superintendent Eric Dinallo told Reuters on Tuesday.
Merrill Lynch & Co (MER.N: ) on
Monday helped bail out Security Capital (SCA.N: ) by canceling $3.5 billion of credit default swaps
(CDS) and withdrawing litigation. SCA will be released from swap
guarantees it sold to Merrill and will pay $500 million to the bank.
As
part of the deal, Bermuda reinsurer XL Capital (XL.N: ), which spun off SCA in 2006, will pay $1.78
billion and issue 8 million shares to SCA.
While the deal comes at a cost for all parties involved, it helped
dispel clouds that had hung over all three companies and the rest of the
bond market.
"This is the potential beginning of the resolution," Dinallo said in an
interview. "This offers a template for all the other CDS out there. We
now have some market comparables, some clearing prices for at least some
CDS."
Last year bond insurers, which had expanded into providing guarantees
for mortgage securities, were slammed by the subprime market crisis. By
January 2008, there were fears that insurers such as MBIA Inc (MBI.N: ) and Ambac Financial Group Inc
(ABK.N: ) would lose their triple-A
ratings, sending the market for municipal bonds and investment bank
stocks reeling.
At
that point, Dinallo said he stepped in and pushed for Wall Street to
provide the capital needed to replenish the system and invited outside
investors to form new insurance businesses.
Dinallo said New York state continues to broker deals that will support
other insurers. The state Insurance Department recently extended a
30-day deadline for bond insurer Financial Guaranty Insurance Co to
resolve its financial issues, he noted.
"There are talks with other banks, but we can't comment. We are working
on the other bond insurers in a similar fashion," he said.
In
New York Stock Exchange trading on Tuesday, MBIA shares rose 13 percent
and Ambac soared 17 percent.
In
January, when the crisis and panic peaked, the New York insurance
department estimated the bond insurance market needed $10 billion to $15
billion of new capital. Since then, MBIA and Ambac have issued equity
and Warren Buffett's Berkshire Hathaway (BRKa.N: ) has founded a new bond assurance unit.
With the SCA deal, total new capital to the sector is close to $10
billion, Dinallo said, "and we're not done yet."
Australian bank Macquarie Group (MQG.AX: ) and private equity investor Ripplewood Holdings are also looking
into forming bond insurers, he said.
The credit crisis in some ways has grown worse since January, as seen by
the collapse of Bear Stearns and the failure of lenders such as IndyMac
Bancorp (IDMC.PK: ). But Dinallo
said his earlier estimate of the sector's capital needs still stands.
"At the time, we said we needed an immediate injection of $5 billion and
a $10 billion backstop," he said. "We went in (to those January talks)
with stress scenarios, and so we're still within those limits."
(Editing by John Wallace)
© Thomson Reuters 2008 All rights reserved |
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9.
XL Prices Offering For
Proceeds Of About $2.5 Bln |
|
By
Lilla Zuill
NEW YORK (Reuters) - XL Capital Ltd (XL.N: ), a large Bermuda-based insurer that owns a stake in troubled
bond insurer Security Capital Assurance Ltd (SCA.N: ), said on Tuesday its sale of common shares and
convertible securities was priced to raise about $2.5 billion.
The money will mostly go to fund an agreement that XL reached to shed
its 46 percent stake in Security Capital, including liabilities stemming
from XL's 2006 spin-off of Security Capital through an initial public
offering.
The pact between the two companies, brokered by New York State Insurance
Superintendent Eric Dinallo, extends a lifeline to the bond insurer,
which has been on the brink of insolvency, but at a cost to XL
shareholders.
"While we believe (the) current agreement could overly penalize current
investors, it does put XL on a path (to) separate (it) from its SCA
liabilities," said Citigroup analyst Joshua Shanker, in a research note.
XL
shares fell 6.2 percent to $17.23 on the New York Stock Exchange.
XL
said in a statement it will sell 125 million common shares for $16
apiece. Underwriters have the option of purchasing an additional 18.75
million shares.
It
will also sell 20 million equity security units at a value of $25 each,
giving holders a forward purchase contract requiring the eventual
purchase of stock and debt.
Underwriters have the option to purchase an additional 3 million of the
convertible units, XL said.
The offering is being led by Goldman Sachs and UBS Investment Bank.
LIFELINE
On
Monday, Security Capital also reached an agreement with Merrill Lynch &
Co Inc (MER.N: ) to cancel $3.5
billion in credit default swaps and end litigation in exchange for a
$500 million payment to Merrill.
Bond insurers have been battered by their exposure to complex mortgages
and other debt, leading several of them to lose high credit ratings.
Security Capital, one of the worst hit, stopped writing new business
after a fourth-quarter loss of $1.2 billion.
Under the agreements reached this week, Security Capital will increase
its capital to about $1 billion.
The deals have raised the possibility of similar bailouts being reached
with other bond insurers in need of capital to stay in business.
EXIT STRATEGY
Under its pact with SCA, XL will pay $1.77 billion in cash to Security
Capital and issue 8 million Class A common shares to it. In return, XL
will no longer be tied to risks that Security Capital held before its
IPO, through the cancellation of $64.6 billion in guarantees.
Security Capital's troubles, which came to light last year, have been a
lingering cloud over XL, with investors fearful that the bond insurer's
woes could drag down its former parent.
Michael McGavick, who became chief executive at XL about three months
ago, told investors on Monday the agreement will allow XL to put those
concerns behind it.
XL's stock has fallen about 77 percent over the past year, compared with
a 34 percent decline in the S&P Insurance Index .
The stock's recovery may take time, with Citigroup's Shanker saying he
sees few new buyers given the current financial markets climate.
(Editing by Steve Orlofsky/Jeffrey Benkoe)
©
Thomson Reuters 2008 All rights reserved |
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10.
INSURANCE NEWSLINK
Articles |
|
Recent articles added to INSURANCE NEWSLINK, the worldwide, strategic
concise intelligence database of over 30,000 articles including
interviews, uniquely analysed by company, market, research, regulatory,
and IT topics.
Please click here for a content overview and a 15-day
free review.
THE TIME EFFECTIVE WAY TO STAY AHEAD
Partner Re moves into loss
XL
Capital down 56% and completes arrangement with SCA
CSC signs another outsourcing contract with Americo
Aviva operating profit up and £1bn payout agreed
Endurance drops 24% in second quarter
Good result from Lloyds TSB general insurance
Renaissance Re drops 24%
Sharia-compliant insurer opens in UK
Profit drops at Advent Capital as Fairfax bids for remaining 55.5%
Prudential extends Asian bancassurance contract with Standard Chartered
Hastings fined £735,000 after the FSA decided it failed to treat
customers fairly
IBM move for ILOG
Cover-All signs new contract in New York
Total Systems signs Capita umbrella contract
Pain to head Retail Markets at FSA
Novarica survey looks at usage of web 2.0 by US insurers
Euler Hermes net income down
Second quarter drop at CNA
Aon obtains Qatar licence
Lincoln Financial reports big drop in net income
Gallagher improves
Towergate looking for US acquisition
Safeco net income down 20%
UK
Commercial Property Insurance 2008
Net Income down 13% at Hartford
RBS to sell 50% interest in Tesco Personal Finance
Pre-tax loss at St James's Place but new business up
Net profit up at Admiral
ACE improves in second quarter
MetLIfe dips
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11.
J.D. Power and
Associates Reports: Economic Struggles Lead to Heightened Importance of
Investment Performance Among Investors |
|
Raymond James Ranks Highest in Full Service Investor Satisfaction
WESTLAKE VILLAGE, Calif., July 30, 2008 /PRNewswire via COMTEX/ -- While
the relationship between investors and financial advisors and brokers
remains a key factor in investor satisfaction, changes in the economy
have investors looking more closely at investment performance -- now the
most crucial driver of investor satisfaction -- according to the J.D.
Power and Associates 2008 Full Service Investor Satisfaction Study(SM)
released today.
Now in its sixth year, the study measures overall investor satisfaction
with full service investment firms based on six factors (in order of
importance): investment performance; financial advisor/broker;
commissions and fees; account setup/account offerings; convenience; and
account statements. The study also measures investor satisfaction within
three investor portfolio types: affluent investors (those who have $1
million or more in investable assets); mass affluent investors (between
$100,000 and $999,999 in investable assets); and mass market investors
(less than $100,000 in investable assets).
Raymond James ranks highest in investor satisfaction with a score of 831
on a 1,000-point scale, receiving high ratings from investors in all six
factors and performing particularly well in proactively contacting
investors. Edward Jones follows in the rankings with a score of 806 and
UBS Financial Services ranks third overall with 798.
Investment performance surpasses financial advisor/broker as the most
important factor in satisfaction in 2008, accounting for 24 percent of
overall satisfaction, compared with 19 percent in 2007. Financial
advisor/broker accounts for 22 percent of overall satisfaction -- down
from 24 percent in 2007.
"Current economic conditions, as reflected in declines in stock market
indices, have heightened investor awareness of portfolio performance,"
said David Lo, director of investment services at J.D. Power and
Associates. "Regardless of market conditions, advisors who succeed at
managing the expectations of their investors can help to mitigate some
of the negative effects. For instance, keeping investors informed by
conducting regular portfolio reviews and including portfolio performance
information on account statements can have a considerable impact on
satisfaction."
A
key to managing the relationship is assigning investors to a dedicated
financial advisor or team. Among the 12 percent of investors who report
they do not have a financial advisor or team assigned to them, overall
satisfaction is substantially lower compared with investors in other
types of investment relationships.
Additionally, advisors can improve satisfaction by maintaining periodic
proactive contact with investors. Mass affluent and mass market
investors understand that varying levels of investable assets call for
differences in the frequency of contact. The study finds that to achieve
similar levels of high satisfaction among the three investor segments,
investment firms need to proactively contact affluent investors an
average of 4.2 times per year, mass affluent 2.8 times, and mass market
1.7 times.
"Our advice to investors is that while portfolio performance is of
primary importance, it is only one of several dimensions that drive
investor satisfaction," said Lo. "When shopping for an investment
advisor, discussing the following key issues can help determine a good
fit: whether the investor will be assigned to a specific advisor or
team; the frequency of communication about investment performance and
the investor's changing needs; how the advisor measures investment
performance; what the investor's expectations are; the ease of use of
account statements; fees; and other types of products and services
available from the investment firm."
The 2008 Full Service Investor Satisfaction Study is based on responses
from 4,528 investors who primarily invest with one of the 19 firms
included in the study. The study was fielded from April to May 2008. For
more information, view full service investor ratings or read an article
on http://www.jdpower.com.
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12.
Express Scripts Settles
New York Lawsuit |
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ST. LOUIS, Jul 29, 2008 (PrimeNewswire) -- Express Scripts, Inc. (ESRX)
announced today that it has settled a lawsuit by the State of New York
relating to contracts that it and CIGNA had to provide pharmacy benefit
management services for the New York State employee health plan, called
the Empire Plan. The plan serves New York state and local government
employees, retirees and their dependents.
In
the settlement, Express Scripts does not admit any of the assertions
made by the State of New York in the lawsuit. Express Scripts did not
conduct brand-drug therapeutic interchange programs for the Empire Plan.
The company also does not recommend switches to higher-cost drugs and
does not accept pharmaceutical manufacturer funding for such programs.
Express Scripts' business practices already comply with essentially all
requirements of the settlement. Only minor adjustments in certain
procedures will be needed due to the settlement.
Under the settlement, Express Scripts and CIGNA will jointly pay $27
million. Express Scripts had previously reserved funds sufficient to pay
its share of the settlement. As a result, there will be no effect on the
Company's results for the second quarter of 2008 or any future period.
The contracts amounted to more than one billion dollars annually in drug
spend at the time the lawsuit was filed.
The settlement contains a release of Express Scripts and CIGNA and
provides for dismissal of all of the State's claims in the lawsuit. The
dismissal was "with prejudice," thereby preventing the State from
re-filing the claims at a later date. The settlement terms apply to the
Empire Plan and any other pharmacy benefit plan with its principal place
of business in the State of New York served by either CIGNA or Express
Scripts. Express Scripts served the State through a contract with CIGNA,
which in turn contracted directly with the State, pursuant to a New York
law that required an insurer to be the contracting party.
http://www.express-scripts.com
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13.
CIGNA Issues Statement
on State of New York Agreement |
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PHILADELPHIA--(BUSINESS WIRE)--CIGNA today issued the following
statement after the New York Attorney General announced that Express
Scripts and CIGNA have agreed to a settlement in a New York state
lawsuit:
“We are pleased that there has been an agreement reached with the State
of New York regarding the disputes over ESI’s provision of services to
the state. In order to facilitate that settlement, we agreed to make a
contribution, as prolonged litigation is not in anyone’s best interest.
We believed that at all times, CIGNA fulfilled its obligations to the
State of New York.”
http://www.cigna.com |
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14.
Investment Strategies
and Growth Projections for Insurance Linked Securities |
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HAMILTON, Bermuda--(BUSINESS WIRE)--Organized by Finance IQ, a division
of the International Quality & Productivity Center (IQPC), the 4th
Insurance Linked Securities Summit was held July 16-18, 2008 at The
Fairmont Southampton in Bermuda. ILS professionals on the life and
non-life sides of the insurance, reinsurance and capital markets
industries explored the latest deals, products, tools, and investment
and hedging strategies for life settlements, life insurance,
catastrophe, and property and casualty markets.
Industry-leading companies including JPMorgan Chase, ICAP Capital
Markets, Credit Suisse, Goldman Sachs, Coventry, Munich Re Capital
Markets, Swiss Re Capital Markets, Willis Re, Calyon Securities, Nephila
Capital, Clariden Leu, Stroock & Stroock & Lavan LLP, Plainfield Asset
Management, and JG Wentworth presented at the three-day summit.
After the success of the Bermuda event, Finance IQ has announced that
the next Insurance Linked Securities Summit will be held January 26-28,
2009 in New York City. For details about the event, keep an eye on the
website at www.iqpc.com/us/ILS.
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15.
BB&T Insurance Unit To
Acquire Myrtle Beach, S.C., Agency |
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RALEIGH, N.C., July 30 /PRNewswire/ -- BB&T Insurance Services, the
nation's sixth largest insurance broker, today said it plans to expand
its coastal South Carolina operation with the acquisition of the Grand
Strand's largest insurance agency.
Puckett, Scheetz & Hogan, a coastal property insurance specialist,
provides a full range of risk management services for businesses and
families from its Myrtle Beach headquarters and a branch office in
nearby Pawleys Island.
The merger would give BB&T the largest insurance market share in greater
Myrtle Beach, a little more than a year after gaining the No. 1 banking
market share in the same area.
"South Carolina's Grand Strand is a thriving area. To have the No. 1
market share in both banking and now, insurance, is another great step
forward for BB&T," said Wade Reece, chairman and chief executive officer
of BB&T Insurance Services. "Puckett, Scheetz & Hogan is an outstanding
agency with a thorough understanding of the unique challenges associated
with coastal property insurance."
The transaction is expected to be completed in early August. Terms were
not disclosed.http://www.BBT.com. |
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16.
Oak Street Funding
Lends $5.5 Million to Support Acquisition of Arison Insurance Services
from Anthem Blue Cross Blue Shield of Kentucky |
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Insurance Lender Flourishes Despite Credit Crunch
INDIANAPOLIS--(BUSINESS WIRE)--Oak Street Funding, preeminent insurance
lender, completed a $5.5 million transaction that supported Assurance
Investment Partners’ (AIP) acquisition of the Louisville-based Arison
Insurance Services, a former subsidiary of Anthem Blue Cross Blue Shield
of Kentucky. AIP will use Arison as its platform to create a nationally
recognized agency offering a full line of insurance and benefits
services.
The Indianapolis-based Oak Street Funding, (www.oakstreetfunding.com),
which pioneered commission-based lending for insurance agencies, has
continued its steady growth despite the nation’s credit crunch which has
seen other lenders drop out of the market. |
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17.
Liverpool Victoria
Fined For Insurance Misselling |
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Wed Jul 30, 2008 6:12am EDT
LONDON, July 30 (Reuters) - Britain's financial services regulator fined
mutual society Liverpool Victoria 840,000 pounds ($1.7 million) for
failings in its sales of insurance protection policies from 2005 until
last August.
The Financial Services Authority said on Wednesday that when customers
rang Liverpool Victoria Banking Services to apply for a personal loan it
added the cost of payment protection insurance (PPI) to the quotation,
put pressure on customers to take the PPI and also failed to explain the
cost.
The regulator said LVBS had stopped all sales of PPI and was contacting
customers to pay them compensation where appropriate.
LVBS is the eighth firm to be fined for poor PPI selling practices, and
the fine was the second largest imposed. (Reporting by Steve Slater;
editing by Sue Thomas)
© Thomson Reuters 2008 All rights reserved |
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18.
Changing Face of
Innovation in the Insurance Industry |
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SACRAMENTO, Calif., July 30 /PRNewswire/ -- In the insurance industry,
the pace of innovation continues to pick up, as the industry lags in
overall organic growth. Innovation has a sense of urgency and the
insurance industry has an appetite for change. With the industry's
overall weak organic growth, it creates a perfect storm for change.
Successful innovation strategies can provide your company with
significant benefits, both internally and in the competitive
marketplace. If you are among the first in your industry to embrace
innovation, you could have a significant competitive advantage.
"Many things about innovation are different now," said Davis. "Today's
innovation is driven by people, not technology. For the most part, the
insurance industry has pushed a great deal of cost efficiencies through
better use of technology. Clients, insurance companies, brokers and
agents have all benefited from better technology tools." But Ms. Davis
predicts that in the next five years, innovation in the insurance
industry will change and become more about design, new product
development, creation (and re-creation) of distribution channels and
business models, insight to identify unmet customer needs and ability to
re-package insurance products and services.
During the first half of 2008, approximately 50 insurance carriers and
wholesalers announced new insurance products. In part, they included
AIG, Ace USA, Beazley, Hartford, Lexington, Navigators, OneBeacon,
Philadelphia Insurance Companies, Swett & Crawford, XL Insurance,
Liberty Mutual, Westrope, Zurich, Beecher Carlson, Allied World, Arch
and CNA. "While these new product introductions represent progress,
getting innovation into the DNA of the insurance industry is a
challenge" said Davis.
For more information about the Keynote speech, please send an email
inquiry to Anna Smith at the California Women's Network at
californiawomensnetwork@gmail.com |
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19.
Proliance Reaches
Global Settlement with Insurer for Company’s Southaven Damage Claims |
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NEW HAVEN, Conn.--(BUSINESS WIRE)--Proliance International, Inc. (AMEX:PLI)
has reached a definitive agreement with its insurance company settling
all damage claims resulting from tornadoes on February 5, 2008 that
destroyed Proliance’s leased distribution facility in Southaven, MS and
required relocation to a new facility.
The insurer agreed to pay Proliance $15.3 million by August 15, 2008, in
addition to the $36.7 million paid to date, for a total settlement of
$52.0 million. The total amount is within the range the Company sought
for lost inventory and equipment, and actual and anticipated business
interruption and extra expenses. |
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20.
INSURANCE NEWSCAST "Pictures Of The Day"
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Alaska Sen. Stevens charged with hiding gifts.
Senator Ted Stevens (R-AK) poses in an undated handout photo.
REUTERS/Handout
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Rice, Livni, Qurei meet as peace expectations
ebb. U.S. Secretary of State Condoleezza Rice speaks at a news
conference at Government House in Auckland July 26, 2008. REUTERS/Nigel
Marple
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Earthquake strongly jolts "lucky" L.A..
California Governor Arnold Schwarzenegger addresses the media on the
podium in the state capital of Sacramento July 29, 2008, after the Los
Angeles area was hit by a 5.4 magnitude earthquake earlier in the day.
"I think we were very lucky with this one," Schwarzenegger said.
REUTERS/Handout
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Karadzic taken to Hague for genocide trial.
Ultra-nationalist protesters hold pictures of war crimes suspects
Radovan Karadzic during rally in Belgrade July 29, 2008 in defiance of
Karadzic's arrest and impending transfer to the UN war crimes tribunal
in The Hague. REUTERS/Ivan Milutinovic
Read Entire Story!!!
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Presumptive Democratic nominee for president
Senator Barack Obama (2nd R) stands with Speaker of the House Nancy
Pelosi (D-CA), James Clyburn (D-SC)(2nd L) and John Larson, (D-CT)(L)
after after the Democratic Caucus meeting on Capitol Hill in Washington,
DC, July 29, 2008. REUTERS/Joshua Roberts
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U.S. President George W. Bush sits next to
91-year-old Ruth E. Harris (L) on her birthday after stopping his
motorcade in Gates Mills, Ohio, July 29, 2008. REUTERS/Larry Downing
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Mixed ruling on controversial Florida gun law.
Various assault rifles and handguns sit on display at the 132nd Annual
National Rifle Association Meeting in Orlando, Florida, April 27, 2003.
REUTERS/Shannon Stapleton
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Arctic ice bigger than 2007, but thawing
long-term. Sunlight shines just after midnight on a fjord near the
Norwegian Arctic town of Longyearbyen, April 26, 2007. Arctic sea ice is
unlikely to shrink below a 2007 record low this year in a reprieve from
the worst predictions of climate change even though new evidence
confirms a long-term thaw is under way, experts said. REUTERS/Francois
Lenoir
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U.S. food portions: Monuments of decadence? A man
takes a bite from a hamburger in Hollywood, California October 3, 2007.
REUTERS/Lucy Nicholson
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