Daily Quote: "Life shrinks or expands in proportion to one's courage." - - Anais Nin |
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1. "The Simple Truths of Service...." Movie
Cleveland, OH - - 04/10/07 - Each day at InsuranceBroadcasting.com we have the privilege of bringing you content that we believe you will find valuable and interesting. Today we are extra privileged to provide you with a link to a short 3-minute movie that has a customer-service message I implore you not to miss.
In today’s world we are bombarded with messages and it is easy to become jaded to them. That is not the case with this message and I can almost guarantee you will be forwarding it to your associates and that you yourself will be inspired after watching. See for yourself if your mood, attitude, and outlook aren't transformed about 90 seconds into the video.
To view the movie, click here.
Walt Podgurski
InsuranceBroadcasting.com
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2. Citigroup plans 15,000 "net" job cuts: report
Tue Apr 10, 2007 2:50PM EDT
NEW YORK (Reuters) - Citigroup Inc. (C.N: ) is likely to cut a "net" 15,000 jobs as part of its cost-cutting plan, and is in the process of laying off more than 1,000 employees, the Wall Street Journal and Dow Jones Newswires said on Tuesday, citing a person familiar with the matter.
A Citigroup spokesman declined to comment. Citigroup plans to unveil the restructuring plan Wednesday morning.
The net reductions would include layoffs and attrition, and represent about 5 percent of the bank's work force. They include layoffs in the trading and prime brokerage units of Citigroup's investment banking division, the report said, citing people familiar with the matter.
Planned cuts are widespread, including the shuttering of some Smith Barney brokerage offices, the moving offshore of loan collection jobs in Arizona, Florida and Texas, and a possible loss of 10,000 or more U.S. jobs, the report said, without saying where the information came from. Many affected jobs will be in U.S. consumer operations, the report said.
The cuts follow a review of expenses by Chief Operating Officer Robert Druskin that began in December. Shareholders are pressuring Chief Executive Charles Prince to slash Citigroup's $52 billion operating expense base even as the bank grows, especially outside the United States. © Reuters 2007. All Rights Reserved.
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3. Life Partners Wins $550,000 Arbitration Award Against FTI Capital Advisors
WACO, Texas--(BUSINESS WIRE)--Life Partners Holdings, Inc. (NasdaqGM:LPHI), the parent company of Life Partners, Inc., today announced it has won a $550,000 award arising from a counterclaim in an arbitration proceeding against its former investment bankers, FTI Capital Advisors, LLC. The investment banking firm, which is a subsidiary of FTI Consulting, Inc. (NYSE:FCN), initially brought the arbitration proceeding against Life Partners claiming it had “earned” a $2.7 million fee in connection with the formation of a limited partnership that was never funded and never transacted any business.
In a unanimous decision, the arbitration panel ruled that FTI Capital Advisors was not legally entitled to any of the $2.7 million in fees that it claimed and awarded Life Partners $550,000 as a refund of investment banking fees paid, but not owed by Life Partners. FTI Capital Advisors was ordered to pay Life Partners the $550,000 within 30 days.
The award will have a significant positive effect on Life Partners’ fourth quarter financial statements.
Life Partners Chief Executive, Brian Pardo, stated, “We are very pleased with the arbitrator’s decision in this case. From the time FTI first made its claim, we believed it was completely without merit. We are glad the arbitrators agreed with us and believe that justice has been done.”
ABOUT THE COMPANY: Life Partners is the world's the oldest and one of the most active companies in the United States engaged in the secondary market for life insurance, commonly called life settlements. Since its incorporation in 1991, Life Partners has generated a total business volume of approximately $700 million in face value of policies for its worldwide client base of over 15,000 high net worth individuals and institutions. www.lphi.com
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4. Court Grants USI Holdings Corporation’s Motion to Limit Damages Period
BRIARCLIFF MANOR, N.Y.--(BUSINESS WIRE)--USI Holdings Corporation (NASDAQ: USIH) today announced today that a federal court has granted its motion for partial summary judgment on a statue of limitations issue in the copyright infringement action William A. Graham Company v. Thomas P. Haughey and USI MidAtlantic, Inc. (U.S. District Court, Eastern District of Pennsylvania, CA NO. 05-612). The Company’s subsidiary, USI MidAtlantic, Inc. (USIM), and one of its employees, Thomas P. Haughey, are the defendants in the action.
Following a June 2006 jury verdict against USIM and Mr. Haughey for copyright infringement in the amounts of $16.6 million and $2.2 million, respectively, USIM and Mr. Haughey filed post-trial motions on various grounds, requesting that the court overturn the verdict or grant a new trial. On November 21, 2006, the court granted USIM’s and Mr. Haughey’s motion for a new trial on the issue of the application of the statute of limitation and on damages. Thereafter, USIM and Mr. Haughey filed a motion for summary judgment on the statute of limitations issue, which was granted by the court on March 29, 2007. The effect of the court’s most recent ruling is to limit any damages awarded to plaintiff to the period beginning three years prior to plaintiff's commencement of the action rather than the thirteen year period considered by the jury in the original trial. A new trial date has not been set. www.usi.biz
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5. Banking’s Total Insurance Revenue Down Slightly in 2006
Insurance Brokerage Fee Income Up 10.6%
WASHINGTON, April 10 – The nation’s bank holding companies (BHCs) experienced a slight decline of 1.3 percent in their total insurance revenue from $44.1 billion in 2005 to $43.5 billion in 2006. Citigroup, Inc. (NY), Wells Fargo & Company (CA), Countrywide Financial (CA), BB&T Corp.(NC), and HSBC North America Holdings (IL), led all bank holding companies with significant banking activities in total insurance fee income in 2006, according to findings released today by the American Bankers Insurance Association (ABIA) and Michael White Associates (MWA). The findings are based on data reported to the Federal Reserve Board by top-tier BHCs. The analysis measures the banking industry’s insurance business and provides some benchmarks that gauge bank insurance performance.
“While the industry’s insurance underwriting activities registered a decline of 5.2 percent, its insurance brokerage fee income continued growing, increasing 10.6 percent in 2006. Among the top 50 in insurance revenue, the mean ratio of insurance revenue to non-interest income was 14.8 percent in 2006,” said Michael D. White, president of MWA. “So, insurance activities continue to make increasingly meaningful contributions to banking revenues.”
During 2006, 656 bank holding companies (or 67 percent of all top-level BHCs reporting) earned some type of insurance-related revenue, compared to 1,428 in 2005. (Fewer bank holding companies reported total insurance revenues in 2006 because the Federal Reserve redefined “small” BHCs as those with less than $500 million, instead of $150 million, in consolidated assets. This reduced the total number of BHCs that must report detailed fee income information by 1,317 and the number of BHCs that reported total insurance fee income in 2006 by 791.)
“While insurance underwriting income has grown at a compound annual rate of 3.1 percent since 2001, insurance brokerage fee income has been racing upward at a compound yearly average of nearly 20 percent during that same period,” said Valerie Barton, ABIA executive director. “Its growth was slowed in 2006 by softening of property-casualty premiums and declines in some agencies’ contingent commissions. Insurance brokerage remains healthy, and the prospects for continued growth in bank insurance revenues are very positive.”
The analysis includes a ranking of the top 50 bank holding companies on the basis of the absolute dollar amount of total insurance revenue (earnings from sales and underwriting) and on the basis of total insurance revenue as a percentage of the institution’s total non-interest income. Other findings include:
BHCs’ insurance brokerage fee income increased 10.6 percent from $10.98 billion in 2005 to a record $12.14 billion in 2006, as 656 bank holding companies (or 67 percent of all top-level BHCs reporting) engaged in sales activities that produced insurance brokerage fee income.
Joining the top 50 in total insurance revenue in 2006 were First Charter Corp. (NC), CoBiz Inc. (CO), Susquehanna Bancshares Inc. (PA), Bremer Financial Corp. (MN), and The South Financial Group (SC). Sky Financial Group, Inc. (OH) increased its rank in total insurance income the most, having jumped from 41st place at the end of 2005 to 20th by year-end 2006. Capital One Financial Corporation (VA) and The South Financial Group (SC) also jumped fairly dramatically, rising 14 spots and landing respectively at ranks of 26th and 50th.
The American Bankers Insurance Association (ABIA) is the separately chartered insurance affiliate of the American Bankers Association (ABA) and is the only Washington, D.C.-based full service association for bank insurance interests. The ABIA’s mission is to develop policy and provide advocacy for banks in insurance and to support bank insurance operations through research, education, compliance-assistance and peer group networking opportunities. ABIA Membership consists of banks, and their affiliated agencies, insurance companies, marketing, and administrative services suppliers, non-bank lending organizations and other firms involved in the bank affiliated insurance industry.
Michael White Associates (MWA) is a bank insurance consulting firm headquartered in Radnor, PA, and at www.BankInsurance.com. Michael White’s annual Bank and Bank Holding Company Insurance & Investment Fee Income Reports™ provide a more comprehensive analysis of bank insurance, investment, and mutual fund and annuity fee income. Those reports are sponsored by Symetra Financial. Additionally, the MWA Fee Income Ratings Reports™ compare, rank and rate a particular financial institution’s insurance or other non-interest fee income program nationally, regionally, statewide and in its asset-peer group. Copies of MWA’s reports can be obtained from MWA by calling (610) 254-0440, or by visiting www.BankInsurance.com.
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A New Way to Reach the Boomer Market
With U.S. retirement assets expected to reach $19.5 trillion over the next five years, more financial advisors than ever before are focusing their practices on people moving through mid-life. This unique group of clients represents about 26% of the total population. To serve them well, many advisors are exploring ways to expand their understanding of this key market.
“What people tend to miss when targeting this broad segment are the attitudinal factors,” commented David A. Littell, professor at The American College in Bryn Mawr, PA. “For example, people in this demographic often see themselves as being about 15 years younger than their chronological age. That view can impact purchasing decisions, financial planning choices and tolerance for financial risk.”
Littell is instrumental in driving the innovative CASLTM program, five courses that provide an unprecedented depth of information about all aspects of the boomer market.
“Understanding the role of life transitions in thinking about retirement is just as important as understanding the technical aspects of preparing the financial plan,” said Littell. “That’s why our first course in the CASL program focuses on social gerontology and related issues.”
Other courses cover investments and wealth management, estate planning, health and long-term care financing and retirement income distribution strategies.
For more information on the Chartered Advisor for Senior Living (CASL) program, call a student services counselor Monday-Friday 8:00am - 6:00pm, Eastern at 1-888-263-7265, or visit our website at theamericancollege.edu/CASL.
6. Risks rise in credit and financial market: IMF
Tue Apr 10, 2007 9:09AM EDT
WASHINGTON (Reuters) - The stability of the global financial system is underpinned by favorable economic prospects, but some financial markets risks have risen, the International Monetary Fund said on Tuesday.
"Global economic conditions have been supportive of a benign financial environment, but underlying risks and conditions have shifted somewhat since ... September 2006, and have the potential to weaken financial stability," the IMF said in its semi-annual Global Financial Stability Report.
The fund pointed at the U.S. subprime mortgage market, involving borrowers with poor credit history, as one area of risk. It said the deterioration of the subprime market was more rapid than expected at this point in the downturn in the housing market as a whole.
While the fallout in the subprime mortgage market has been limited to a small number of lenders, the IMF warned the problems could spread to other asset markets.
In particular, the IMF said the looser underwriting standards may have gone beyond the subprime sector into portions of the so-called "Alt-A" mortgages, the next riskiest area. And there could be losses in other consumer credit markets, including credit card and subprime auto loans asset-backed securities, it said.
"Financial supervisors need to identify the potential for spillovers from the cooling of the housing market and continue ensuring that mortgage underwriting standards are maintained," the IMF said.
It also said the recent wave of massive corporate buyouts and mergers reveal a weakening of credit discipline.
"So far, target firms are mostly those with high cash flows and low leverage," the fund said, adding:
"However, there are signs that credit risks have risen as valuations of target companies are rising along with leverage, while credit discipline is eroding reflected the continued weakening of loan covenants.
A collapse in one or more high-profile deals could expose banks and trigger a wider reappraisal of risks across a broader range of credit product, the IMF cautioned. © Reuters 2007. All rights reserved.
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7. Marsh's Cherkasky will not go cheap if forced out
Fri Mar 30, 2007 5:15PM EDT
NEW YORK, March 30 (Reuters) - Michael Cherkasky, the sometimes embattled chief executive of the largest insurance brokerage company in the world, will not go cheaply if he is forced out.
In Marsh & McLennan Companies Inc.'s (MMC.N: ) proxy, Cherkasky stands to get $26.7 million if he is terminated due to a change in control of the company.
"Golden parachutes are still in style," said Donald Light, an analyst with Celent LLC.
Cherkasky's termination payment is in sharp contrast to his salary and benefits, which were modest by insurance industry standards.
The Marsh proxy shows that he made $8.7 million in salary, incentives and stock options, with the options accounting for $5 million of his compensation.
Marsh, which has a $16.7 billion market capitalization, would seem an unlikely takeover candidate because of its size.
But in August, when its stock price fell 13 percent after disappointing second-quarter earnings, rumors circulated that Willis Group Holdings Ltd. (WSH.N: ), the third-largest insurance broker, might join with private equity firm Kohlberg Kravis Roberts & Co. LP to buy Marsh.
The threat never materialized, earnings improved and Cherkasky, going along with the wishes of many investors and analysts, sold the Putnam money management unit in January to Canada's Power Financial Corp. (PWF.TO: ), a deal that brought Marsh $2.5 billion after taxes.
Even so, Light said, "We may not have seen the last of insurance broker takeovers."
Marsh spokesman Michael Kachel said the company would not comment beyond what was in its proxy.
Other insurance executives received twice as much in direct compensation as Cherkasky, and in some cases, three times as much. Prudential Financial Inc. (PRU.N: ) Chief Executive Arthur Ryan earned $25.8 million in total compensation in 2006 including stock options.
© Reuters 2007. All rights reserved.
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8. The American College Announces Special Casl™ Retirement Coaching Program Course Discount For Certified In Long-Term Care (Cltc) Designees
BRYN MAWR, PA—April 9, 2007— The American College, the nation’s leading educator of financial service professionals, announced today that individuals who have successfully completed the Certified in Long-Term Care (CLTC) designation program can enroll in The College’s HS 351 course, Health and Long-Term Care Financing for Seniors, at a discounted registration fee of $195. The course, Health and Long-Term Care Financing for Seniors, is part of the curriculum for The American College’s prestigious CASL™ Retirement Coaching Program. This discounted registration fee would reduce the overall cost of earning a CASL designation from The American College by $340.
“This is an opportunity for the more than 9,000 individuals who have earned their CLTC certification to further advance their understanding of the baby boomer market,” said Larry Barton, PhD., President and Chief Executive Office of The American College. “We hope that CLTCs will take advantage of this opportunity and enroll in the nation’s most comprehensive educational program available for addressing the financial decisions affecting Americans during the second half of their lives – the CASL Retirement Coaching Program.”
Harley Gordon, President of The Corporation for Long-Term Care Certification, Inc., which created the CLTC program agrees; “Our program focuses on planning for long-term care and, when appropriate, recommending long-term care insurance. It fits perfectly with CASL’s stated goal of focusing on the broader issues unique to mature clients. We strongly recommend that our graduates invest in their future by enrolling in the CASL program.”
The CASL designation requires individuals to pass five College-level courses and meet specific experience, ethical and continuing education requirements. The five courses in the curriculum are:
• HS 328 Investments
• HS 330 Fundamentals of Estate Planning
• HS 350 Understanding the Older Client
• HS 351 Health and Long-Term Care Financing for Seniors
• HS 352 Financial Decisions for Retirement
The CASL curriculum was developed by The College with an advisory committee of industry professionals. This advisory committee helps insure that the educational program meets the needs of seniors. Companies participating in the development process included New York Life, GE Financial Assurance, State Farm, MetLife, Northwestern Mutual, Mutual of Omaha, John Hancock, Prudential Financial and MassMutual.
“The financial services industry provided incredible insight as we designed the CASL program,” said Barton. “We are delighted by the enthusiasm and commitment these companies and others in the industry have already expressed for this designation.” More than 1,700 financial professionals have earned the CASL designation since it’s inception in 2004.
Accountants, attorneys, CPAs, financial planners, long-term care specialists and life and health insurance agents are all potential CASL designees. Individuals who work every day with seniors, including professionals in the health care industry and senior residency facilities, would also find this curriculum to be valuable.
Courses in the CASL curriculum cost $535 each. This includes all printed study materials, including textbook(s) and student syllabus or study guide. Also included are audio review CDs and access to online courses. All new students pay a one-time $110 nonrefundable matriculation fee. Proof of completion of the CLTC is necessary to take advantage of this discount. This discount will allow CLTCs to save both time and money in the pursuit of a CASL designation from The American College.
The Corporation for Long-term Care Certification, Inc. (CLTCC) created the CLTC designation program in 1999. It was the result of joint efforts of experts in the field of aging, financing long-term care, and long-term care insurance. The purpose of the program is to educate insurance and financial service professionals about the need to talk to clients about the consequences failure to plan for long-term care can have on families and retirement portfolios. Visit: http://www.ltc-cltc.com
The American College is the nation’s leading non-profit educator of professionals in the insurance and financial services industry. Located in Bryn Mawr, Pennsylvania, The College is a public charity founded in 1927 and accredited by the Middle States Association of Colleges and Schools. The American College offers an array of specialized designation programs, Master of Science degrees in several disciplines and customized continuing education programs predominantly on a distance education basis for those pursuing a career in financial services. For more information, visit www.TheAmericanCollege.edu
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9. MassMutual Inviting Over 250,000 Retirement Plan Participants to 'Spring into Savings'
SPRINGFIELD, Mass., April 9 /PRNewswire/ -- MassMutual Retirement Services today launched an educational campaign that will invite more than a quarter million 401(k) plan participants to change their retirement savings behavior to more effectively prepare them for retirement. MassMutual, a leading retirement plan provider, is supporting more than 4,300 retirement plan sponsors by personally reaching out to their retirement plan participants and providing quicker, easier ways for them to take action. The "Spring into Savings" campaign is deliberately timed to leverage MassMutual Financial Group's new television advertising campaign that kicked off on March 17. The ad campaign, including broadcast, print, and online advertising, showcases MassMutual's commitment to helping American consumers move important financial decisions to the "front of the mind" and simplifying the decision-making process. www.massmutual.com/retire
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10. Lord, Bissell & Brook LLP Scores a Decisive Trademark Victory for PBM Products
NEW YORK, April 9 /PRNewswire/ -- A team of attorneys in Lord, Bissell & Brook's Business Technology Group successfully defended PBM Products, Inc. and PBM Pharmaceuticals, Inc. against trademark infringement and unfair competition claims that their use of the mark "Bright Beginnings" in the marketing and sale of infant formula infringed on a prior federally registered trademark.
In 2003, PBM launched a national advertising and marketing campaign introducing its "Bright Beginnings" infant formula. PBM's use of the "Bright Beginnings" mark was challenged by Care Comm, Inc., which claimed to hold two valid and incontestable trademark registrations for the "bright beginnings" mark. Care Comm commenced an action in the United States District Court for the Western District of Kentucky.
After the Court dismissed with prejudice all of Care Comm's claims under its earlier registration as a result of PBM's motion, Care Comm continued to prosecute its claims under the second registration.
On March 28, 2007, Judge Charles R. Simpson III granted PBM's motion for summary judgment dismissing Care Comm's remaining trademark infringement claims. Even though Judge Simpson found PBM had purposefully copied Care Comm's mark, he still held no infringement or unfair competition was engaged in by PBM with respect to the marketing and offering for sale of PBM's Bright Beginnings formula, thereby disposing of all claims raised by Care Comm and dismissing the case with prejudice. The Court's dismissal turned principally upon the Judge's finding of the lack of any likelihood of confusion between customers of PBM's "Bright Beginnings" infant formula and Care Comm's use of the mark in newsletters. PBM was able to establish the differences between its marketing, customers, products and use of the mark and that of Care Comm.
Lord, Bissell & Brook attorneys on the case were David G. Greene, Allen C. Wasserman, Gregory T. Casamento, Sean Fifield, and R.J. DeRose, III.
For a copy of the opinion go to http://www.lordbissell.com/newsstand/1146 and for any further information please contact David G. Greene at 212-812-8338 or dgreene@lordbissell.com.
Founded in 1914, Lord, Bissell & Brook is a full service law firm serving national and international clients from offices in Atlanta, Chicago, London, Los Angeles, New York, Sacramento and Washington, D.C. Attorneys in Lord, Bissell & Brook's Business Technology Group assist clients in achieving their business objectives and successfully navigating the legal complexities unique to intellectual property issues. Companies count on the group to secure, leverage and defend their business interests, from intellectual property and technology rights to outsourcing business processes and development of electronic commerce initiatives. For additional information about Lord, Bissell & Brook's Business Technology Group please visit our Web site at http://www.lordbissell.com/practice/76.
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11. A.M. Best Extends Public Comment Period on Draft Risk Management Methodology
OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. is extending for an additional 30 days the period for comments from market participants in the insurance industry and other interested parties on a draft of its “Risk Management and the Rating Process for Insurance Companies.” The draft document is currently available in the Methodology section of A.M. Best's homepage. Visit www.ambest.com/ratings/methodology.asp to download a PDF copy. The draft methodology outlines how risk management is incorporated into the overall rating process, including the development of capital requirements underpinning A.M. Best’s rating opinion on insurers and reinsurers. A.M. Best will consider feedback from any interested parties prior to publishing its methodology. Written comments can be submitted by email to rating.methodology@ambest.com, no later than May 9, 2007.
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12. Retirement Income White Paper from FundQuest Provides Best Practices for Financial Institutions and Advisors
BOSTON--(BUSINESS WIRE)--FundQuest has published a white paper titled “A Process-Centered Approach to Retirement Income--Best Practices for Institutions and Advisors”. The 24-page paper describes a fully integrated process, including detailed planning, implementation, and monitoring steps, to optimize sustainable retirement income programs for individuals. FundQuest is a leader in providing customized turnkey managed investment account solutions to financial institutions.
The white paper is available at: www.fundquest.com/press-resea.htm
The paper’s key premise is that financial institutions and their advisors can provide better service which will lead to faster asset growth, along with higher advisor productivity and greater client retention by adopting a well-defined process-centric approach to retirement income management. The paper details the practical actionable steps advisors can employ to address each investor’s specific needs in retirement. For example, ongoing monitoring processes help ensure that plan adjustments, often driven by major life changes and investment performance, are implemented on a timely basis. www.fundquest.com/usa
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13. Exchange-Traded Equity Derivatives Set to Skyrocket as Absolute-Return Strategies, Portable Alpha, Hedge Funds and Yield Enhancements Create Seismic Shift in How Futures and Options Trade, says TABB Group
Technology is Driving Change; DMA and FIX Will Usurp Phone Trading as Traditional Funds Migrate from Long Only into 120/20 and 130/30 Portfolios
NEW YORK--(BUSINESS WIRE)--The world of investment management is changing with absolute-return strategies, portable alpha, hedge funds and yield enhancement an integral part of the everyday life of traditional portfolio management. According to TABB Group in its newest benchmark industry study, “Exchange-Traded Equity Derivatives: The Buy-side’s Increasing Exposure,” these changes are creating a seismic shift not only in the way exchange-traded equity derivatives – futures and options – are used but also in who trades them and how they are traded.
“As an increasing number of traditional fund managers migrate from long-only to 120/20 and 130/30 portfolios and become more adept at managing risk, employing absolute return strategies and extending leverage,” writes Andy Nybo, senior analyst at TABB Group and author of the study, “derivatives will become a more important part of traditional investment strategies. As this evolution occurs, institutional investors will have a greater need for a host of tools and services designed for the intricacies of the derivatives market.” He adds that, “as analytics, risk management and the greater use of specialized OTC derivatives become integrated into traditional equity-driven investment and trading tools, derivatives will become even more integral to manager strategies.”
Increased use of technology, specifically leveraging electronic connectivity, will be a prime driver of future change in this global asset class. “Although algorithmic trading in the derivatives markets is still in its infancy,” explains Nybo, “all of the components for its rapid development are present, including electronic liquidity, broad market participation and interconnected markets.”
“The equity derivatives markets are on the cusp of transformation,” adds Larry Tabb, CEO and TABB Group founder. “They are becoming more ‘socially’ acceptable to the conservative long-only asset manager and, perhaps more importantly, to oversight boards that dictate policies and procedures. Long-only funds compete for AUM with less-restricted hedge funds that are aggressively using derivatives to enhance returns. This is forcing traditional asset managers to embrace equity derivatives as a means of both increasing and preserving returns. The best fund managers will continue to embrace derivatives for risk management, capital preservation and the ability to aggressively seek alpha opportunities.” However, adding a cautionary note, he says, “those managers that don’t will simply fall behind.”
Key findings include:
- Hedging is the dominant use of derivatives by over 40% of the traders interviewed, followed by equitizing (31%) and capturing trends (29%).
- Over 50% of the traders say that liquidity is the greatest challenge in trading options. Although penny pricing is expected to improve liquidity, they expect liquidity will become more fragmented, spreads will tighten and liquidity at each price point will decline.
- Despite the importance of phone-based trading, futures traders are dissatisfied with the electronic tools and DMA systems they have access to, saying they would benefit from advanced order routing and execution capabilities.
- Less than 20% currently use FIX in derivatives activities.
- Generating premium income from writing covered calls was a strategy used by 92% of the options traders.
- Nine out of ten say obtaining the right price on trades is far more important than execution speed.
- Traders have relationships with an average of five brokers vs. over 50 for cash equities.
The 54-page study with 50 exhibits is based on in-depth interviews with 55 different buy-side futures and options traders based at a broad variety of asset managers and hedge fund. Participants are segmented by assets under management (AUM) and where appropriate by type of equity derivative employed. The study categorizes asset managers and hedge funds into three different AUM categories, e.g., asset managers were segmented as large (over $50 billion); medium ($10 billion and $50 billion); and small (less than $10 billion). Hedge funds were broken into the same categories but included large (over $1 billion); medium (between $100 million and $1 billion); and small (less than $100 million).
The study is available for download by TABB Group Research Alliance clients and qualified media. To view an executive summary or to purchase the report, visit http://www.tabbgroup.com/research. www.tabbgroup.com
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14. Britt Paulk Announces New Aviation Program
ATLANTA--(BUSINESS WIRE)--AXA Corporate Solutions announce their new national General Aviation program in the US. The new program will be managed through a general agency relationship with Britt Paulk Ins. Agency, Inc. Together Britt Paulk and AXA Corporate Solutions will develop an Aviation Program that specializes in smaller aircrafts and FBO’s.
The focus will be to grow the US market organically through specialty products with strong growth partners. AXA Corporate Solutions is one of the world’s leading aviation insurance companies and they want to become a force in the US market. Patrick de La Morinerie AXA Corporate Solutions Deputy CEO stated that, "Through Britt Paulk’s unique OPUS™ product and strong underwriting team, AXA will be able to 'jump start' their program in 49 States." www.brittpaulk.com
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15. Max Re Capital Ltd. Announces Its Intention to Commence Offering
HAMILTON, Bermuda--(BUSINESS WIRE)--Max Re Capital Ltd. (NASDAQ: MXRE; BSX: MXRE BH), the parent company of Max USA Holdings Ltd. (“Max USA”), a Delaware corporation, today announced that Max USA intends to offer $100 million of senior notes due 2017. Max Re Capital intends to fully and unconditionally guarantee the notes. The net proceeds of the offering, which is expected to close during the second quarter of 2007, will be used to repay short-term indebtedness of Max USA. www.maxre.bm
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16. Great American Insurance Group Announces Winner of “BIG RIG GIVEAWAY”
CINCINNATI--(BUSINESS WIRE)--A long-haul trucker from Janesville, WI was the lucky winner of Great American Insurance Group’s BIG RIG GIVEAWAY at the Mid-America Trucking Show (MATS) on March 24 in Louisville, KY. Bruce Doering’s name was drawn at random from more than 7,500 entries received during the three month contest period. Mr. Doering won a 2002 Freightliner Classic customized by 4 State Trucks, home of the popular Chrome Shop Mafia body shop.
The BIG RIG GIVEAWAY was open to all truckers with a valid commercial drivers’ license. Mr. Doering, an independent owner-operator, has been insured by Great American since April, 2006. Great American Insurance Group’s Trucking Division is a leading provider of insurance products and services to independent owner-operators. The contest demonstrates Great American’s commitment to the trucking industry. www.GreatAmericanTrucker.com
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17. UBS Global Asset Management US Pension Fund Fitness Tracker Finds Funding Ratios Endured Bumpy Ride in First Quarter 2007
CHICAGO, Apr 09, 2007 (BUSINESS WIRE) -- UBS Global Asset Management today announced that its US Pension Fund Fitness Tracker, a quarterly estimate of the overall health of a typical US defined benefit pension plan, finds that pension plan funding ratios went on a wild ride, caused by volatility in both equity markets and interest rates.
The typical pension fund started 2007 with a funding ratio of approximately 103% and ended the quarter at a slightly improved funding ratio of approximately 105%. "While the overall numbers were positive, the first quarter of 2007 points out an area of concern for pension managers: namely, significant funding ratio volatility due to interest rate swings, and plans' over-reliance on equity market risk," said Aaron Meder, UBS Global Asset Management's Head of Asset Liability Investment Solutions in the Americas.
Much like in 2006, the improved health of the typical US defined benefit pension plan in the first quarter was due largely to strong equity market returns. UBS Global Asset Management estimates that the typical large corporate defined benefit plan saw an increase in assets for the quarter of almost 2%, outperforming liabilities, which were roughly flat for the quarter, as measured by the iBoxx US Pension Liability indices.
While a brief interruption in the equity market advance caused some of the funding ratio volatility, interest rates had a far bigger impact in the quarter. For example, liabilities were down 2% in January as interest rates moved higher, but regained all and more of that decline, increasing by almost 4% in February as rates reversed course. Of most interesting note was the single day volatility in the funding ratio experienced on February 27th. On that day, equity markets gave up about 2%, with interest rates falling at the same time.
"We have found this to be a recurring phenomenon in recent years. In this particular case, it resulted in funding ratios deteriorating by almost 4% in a single day. This single-day volatility should make pension managers take heed," said Meder.
While many plans are currently exposed to this risk, there are alternative investment approaches that can help to better align assets and liabilities. "Plans can implement liability-driven strategies that may significantly reduce the uncertainty in their future pension contributions - often without reducing expected plan returns. The improvement in overall pension health in 2006 and the first quarter of 2007 provides many with an excellent opportunity to hedge some of their liability risk," said Meder.
The funding ratio measures a pension fund's ability to meet future payouts to plan participants. The main factors impacting the funding ratio of a typical US defined benefit plan are equity market returns, which grow (or shrink) the asset pool from which plan participants' benefits are paid; and liability returns, which move inversely to interest rates. www.ubs.com Copyright Business Wire 2007
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18. Cunningham Lindsey U.S. Announces Addition To Business Deveopment Team
Dallas, TX – Cunningham Lindsey U.S. (CLUS) has added Barbara Larson to its Business Development Team as a Regional Account Executive. Larson brings over 20 years of experience in the claims business both from an independent claims firm perspective as well as an insurance company staff perspective. She has extensive experience in handling property losses as well as large property loss adjusting. She will be based at our Sacramento, CA office and will focus on the California, Arizona and Nevada markets. www.cunninghamlindseyus.com
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19. NAIC To Participate In National Association Of Hispanic Publications 2007 Convention And 25 Th Anniversary
Kansas City, Mo. (April 10, 2007) — As part of a year–long effort to educate Spanish-speaking consumers on insurance issues, the National Association of Insurance Commissioners (NAIC) today announced that it will be a sponsor of the National Association of Hispanic Publications, Inc. (NAHP) 2007 Convention and 25 th Anniversary, April 11 – 14 at the Scottsdale Hilton Resort & Villas in Scottsdale, Arizona. Arizona Insurance Director Christina Urias will speak with Hispanic journalists from 11:00 a.m. to 4:00 p.m. Friday, April 13 at the NAIC exhibit booth at the NAHP Exhibit Hall. As a sponsor of the annual Hispanic media convention, the NAIC also will co-host an editorial workshop, entitled Attracting Readers to Consumer Education Issues, from 2:30 p.m. to 3:45 p.m. Friday, April 13. NAIC Communications Director Scott Holeman, along with Hispanic journalists from La Opinion , wire service EFE and AARP’s Segunda Juventud , will moderate the workshop.
To better educate insurance consumers, the NAIC launched a Spanish-language version of Insure U, an education–based consumer Web site, in February 2007. The site, www.InsureUonline.org/español, is organized by life stage to help Hispanic consumers get smart about insurance and better understand their evolving insurance needs.
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20. INSURANCE NEWSCAST "Pictures Of The Day" -- Sponsored By:
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An undated handout photo shows a bridal couple.
White wedding gowns might have been the dream of fashionable brides of
old. But the trendiest British weddings are now at least metaphorically
green as couples seek to reduce the impact of their nuptials on the
environment. REUTERS/Richard Merz/Handout. |
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An Asiatic lion rests in Gir forest, about 355 km (221 miles) from the western Indian city of Ahmedabad December 23, 2006. Hundreds of new guards and closed-circuit TV cameras will be used to protect rare Asiatic lions threatened by poachers and villagers in their only natural habitat, Indian officials said on Saturday. REUTERS/Amit Dave |
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Space tourist Simonyi of the US waves before boarding in spacecraft at the Baikonur cosmodrome. REUTERS |
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Former Vice President Al Gore waves to the media at the Japanese premiere of his documentary film "An Inconvenient Truth" in Tokyo January 15, 2007. Gore hopes the Live Earth concerts on July 7 will do for climate change awareness what Live Aid did for Africa. REUTERS/Kiyoshi Ota |
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A worker prepares a chocolate Easter egg at a factory in Sao Paulo April 4, 2007. Some may see a cup of tea as soothing but chocolate is more likely to lower one's blood pressure, German researchers reported on Monday. REUTERS/Paulo Whitaker |
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A model poses for pictures in front of Panasonic's Viera plasma televisions during its launch event of their new 1080p resolution plasma televisions in Tokyo April 10, 2007. REUTERS/Kiyoshi Ota |
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View INSURANCE NEWSCAST "Sports Pictures Of The Day"
View INSURANCE NEWSCAST "Entertainment Pictures Of The Day"
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21. Lighthouse1 and Evolution Benefits Announce Partnership
CDH Industry Leaders Join to Create Innovative Debit Card Solution
MINNEAPOLIS, April 10, 2007 – Lighthouse1 and Evolution Benefits announced today they have formed a partnership through which a broad array of current and potential customers can use both companies’ products as a single solution. Lighthouse1 is the industry leading provider of consumer driven healthcare benefits administration solutions. Evolution Benefits is an award winning provider of electronic consumer driven healthcare payment services, including prepaid employee benefits debit cards. Under the terms of this agreement, Lighthouse1 can now offer its customers the Evolution Benefits card capabilities within its Lighthouse1 OnDemand™ platform to deliver a special purpose debit card for use with consumer driven healthcare accounts including FSAs, HRAs, and HSAs. www.lighthouse1.com www.EvolutionBenefits.com
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22. highlight PIANH’s Annual Conference
CONCORD, N.H.—The Professional Insurance Agents of New Hampshire Inc.’s 2007 Annual Conference will be held Wednesday, May 23, 2007, at the Marriott Courtyard and Grappone Conference Center, Concord, N.H.
During the keynote luncheon, New Hampshire Insurance Commissioner Roger Sevigny will provide conference attendees with an insurance industry update and report on his office’s activities and agenda.
“Helping independent insurance agents maintain a competitive edge in the industry is a top priority for PIANH,” said Judy George, CIC, president of PIANH. “In addition to Commissioner Sevigny’s update, conference attendees have the opportunity to attend classes designed to provide them with the tools to stand out among their competitors and earn required continuing education credits on a number of topics, including ethics.”
This year the PIANH 2007 Annual Conference offers companies the opportunity to exhibit their products and services throughout the daylong event. Additionally, the event also offers the chance to choose from four different CE courses. Participants will have access to the following seminars: www.pia.org/NH
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23. CPCU Society National Leadership Institute Course Coming To Cincinnati
MALVERN, PA, APRIL 10, 2007—On May 8, the CPCU Society and the Society’s Cincinnati Chapter will be hosting a CPCU Society National Leadership Institute (NLI) course: Building Communication Strategies: Leverage Your Best Critical Thinking.
Continental breakfast, course materials, and refreshments will be included.
The CPCU Society National Leadership Institute (NLI) is the CPCU Society’s premier educational program for insurance industry professionals looking to advance their careers or take on leadership roles within their organizations. Both CPCU Society members and nonmembers are invited to attend NLI courses. For further information on these courses, call the Society’s Member Resource Center at (800) 932-CPCU, option 4.
Building Communication Strategies: Leverage Your Best Critical Thinking
Effective communication is surfacing as the number-one skill that leaders, in all professions, cite as the distinguishing factor of a successful career. This course will give attendees an opportunity to reassess their communication skills and reflect on how effective a communicator they are in today’s diverse market.
Two Easy Ways to Register:
Online at www.cpcusociety.org
Call (800) 932-CPCU and select option 4 to speak to our Member Resource Center.
For CPCU Society members, registration is $70; for nonmembers, registration is $75. For more information, call the Society’s Member Resource Center at (800) 932-2728, option 4.
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24. Chief Financial Officers Rally Around Equity Focus for FAS 123R Compliance: Eases Stock Option Review by Auditors
More Than Twenty New Customers Join the Growing List of Venture-Backed and Privately-Held Companies Leveraging Two Step Software's Fully Integrated Stock Plan Administration Solution
NEEDHAM, Mass., April 10 /PRNewswire/ -- Two Step Software, Inc., a leader in corporate governance and stock plan administration solutions, today announced that more than twenty new companies have chosen Equity Focus(TM) to ensure compliance with the new FAS 123R regulations. Equity Focus is designed for chief financial officers who want to reduce the risks associated with manually updating complex spreadsheets. Equity Focus is a fully integrated stock plan administration system that supports both option expensing under FAS 123R and good corporate governance records management. The new FAS 123R regulations require most non-public companies to amortize the compensation expense related to their employee stock options beginning January 1, 2006. www.twostep.com
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25. FACTBOX-Japanese life insurers' 2007/08 investment plans
Tue Apr 10, 2007 5:09AM EDT April 10 (Reuters) - Below is a summary of the investment plans of Japan's top life insurers for the 2007/08 financial year that began on April 1, and actual allocations for 2006/07. As the new business year begins, Reuters is interviewing Japan's top nine life insurers, which have combined assets of around $1.3 billion (157.6 trillion yen), bigger than Spain's economy. © Reuters 2007. All rights reserved.
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26. U.S. MetLife says to partner Bank of Shanghai
Tue Apr 10, 2007 2:14AM EDT
SHANGHAI, April 10 (Reuters) - MetLife's (MET.N: ) China venture said on Tuesday it will partner with Bank of Shanghai to boost its insurance sales in the country. United MetLife Insurance Company Co., a 50/50 joint venture between MetLife, the top U.S. life insurer, and Shanghai Alliance Investment Ltd., will sell its insurance products through counters of the country's biggest city commercial lender, it said in an emailed statement.
Bank of Shanghai, in which HSBC Holdings Plc. (HSBA.L: )(0005.HK: ) holds 8 percent, currently operates more than 200 outlets in China, mostly in Shanghai, one of the country's most wealthy cities. MetLife has already teamed up with Chinese banks, including Industrial and Commercial Bank (601398.SS: )(1398.HK: ) and Pudong Development Bank (600000.SS: ), to help the New York-based insurer sell policies in China, United MetLife's chief executive Bob Pei told Reuters in January. Pei had said MetLife is also in talks with Citigroup Inc. (C.N: ) for such a sales partnership in China.
MetLife became the largest life insurer in the United States after purchasing Travelers Life & Annuity from Citigroup for $11.8 billion in July 2005.
Shanghai-based United MetLife was launched in 2006 with the help of Shanghai Alliance, a major investment arm of the Shanghai city government. Shanghai Alliance is run by Jiang Mianheng, son of former Chinese President Jiang Zemin.
((Reporting by George Chen, editing by Rachael Barker; (C) Reuters 2007. All rights reserved.
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