World Insurance Report

The Portuguese non-life market, in common with many developed western markets, is suffering the effects of the global financial and credit crisis. Falling investment, a marked reduction in imports and exports, a construction sector in crisis and the disappearance of a manufacturing industry have combined to drive competition to new levels. The predominant financial interests in the Portuguese market are local conglomerates dominated by banks. However, some of these groups are now seeking to divest themselves of their insurance interests, a trend which is expected to increase as a result of the global financial crisis. Indeed, in 2008 the problems of the Banco Portugues de Negocios (BPN), owner of Real Seguros, had a major negative impact on the insurer, and efforts to sell Real Seguros began in September 2008. However, as other insurers are also said to have financial problems, some merger and acquisition activity, which should help to reduce the level of competition and rate cutting in the market, is likely in the immediate future. But for many observers, the strong presence of foreign groups such as Allianz, Ergo and AXA in Portugal attests to the underlying potential in the market

Austria is the largest investor in the Romanian insurance sector, followed by France, Holland and the UK

For many years, the G7 countries could count on having a steady 65% of overall GDP in the world. But the world is changing. James Wolfensohn, investment consultant and former president of the World Bank, warns that the developed countries are now confronted with “the fiscal realities of life”, where heavy debts incurred by bailing out their banks will make it increasingly difficult for governments to meet spending commitments and stimulate their economies back into growth. Here, in an edited extract from his keynote speech last week to the Lloyd’s City Dinner at the Merchant Taylors’ Hall in London, an event attended by senior figures from the worlds of insurance, banking and politics, Mr Wolfensohn says that developed countries also have to deal with the growing economic might of India and China. Over the coming decades these two countries will expand to account for nearly 25% of global output by 2025 and almost half by 2050. A dynamic which, Mr Wolfensohn argues, is occurring virtually unobserved and which represents the true challenge to the City of London and all its institutions as well to the G7 countries

A scenario of high climate change could increase related catastrophe losses by up to 200% over the next 20 years

Funds linked to local inflation levels have performed better than US dollar linked funds

The total volume of issued securities is currently valued at $24bn, or around 12% of total catastrophe reinsurance capacity

India’s national expenditure on health services is on the rise and considerably higher than that of several similar developing countries. The share of health expenditure is approximately 6% of India’s GDP. However, the Indian government’s share of public expenditure is only 2% of this 6%, way below the stipulation of at least 5% of GDP as per the World Health Organization’s recommendation. According to IT research and advisory firm Celent, in the light of this new-found push for health insurance products, both from the regulators and from the health insurance companies, it has become critical to understand customer reaction to and expectations of health insurance services in the Indian market. In particular, Celent points out, there is a profound lack of knowledge on the part of the insurance industry generally of the behavioural factors in the purchase of healthcare insurance products in India. Against this background, Celent conducted a detailed survey of the Indian health insurance market earlier this year. Here, Ravi Nawal, an analyst in Celent’s insurance practice, comments on the survey and its findings. The survey looks at a number of areas including the role of employer provided health insurance in the market, penetration, levels of coverage, the primary sources of health care information for consumers and healthcare product knowledge, claims settlement and the main reasons for non ownership of a healthcare plan or policy

Only one insurer featured in the top 10 of complaints filed to the Financial Ombudsman Service

South Africa’s high crime rates have huge financial implications for, and adversely affect, the short-term (non-life) insurance industry because the higher the incidence of crime, the more insurance companies have to pay out in claims. Tackling these crimes is now a priority for the South African government. Here, Hugo Van Zyl, the Chief Operating Officer of the recently established South African Insurance Crime Bureau, outlines the context within which the SAICB operates. Working closely with local police, prosecuting authorities and the commercial client court, the SAICB makes every effort to ensure insurance companies collect all the necessary information to assist with investigations against crimes which affect the industry

But foreign insurers are not keeping up with the levels of market share set by domestic firms

Insurers report more suspicious claims for all non-life policies

The industry is lobbying for higher cat loss reserves to cover major events

The property market experienced only a mild hardening in rates during the first half of 2009 despite heavy losses last year

In terms of ZFS’s reduced net result, it was in the ‘Other Business’ segment that the group was hardest hit, largely as a result of the segment’s exposure to financial market volatility in the shape of adverse equity market movements, widening credit spreads and the need to increase reserves in order to compensate for deterioration in the run-off of certain portfolios. A notable factor in the loss suffered by this particular operating segment was the deterioration in the valuation of hedge fund investments by Zurich Capital Markets

In contrast with many local markets. Singapore’s life insurance market reported a healthy 7% expansion during 2008, although this was well down on the previous year’s 18% growth rate. However, this small market, with a population of only..

Property and business interruption 4.9, industrial action UK: some of the country’s largest oil refineries and power stations faced being shut down after workers voted to stage official action over the hiring of cheaper foreign labour. The..

Fortis and BNP Paribas Assurance are to take a majority stake (50% plus one share) in Italian insurer UBI Assicurazioni. Fortis and BNP Paribas agreed to pay €120mn ($176mn) in cash on completion of the deal, plus up to €40mn ($59mn) of..

The finances of a number of US state government-managed residual market property plans in hurricane-exposed states are on shaky ground, according to a recent Insurance Information Institute white paper which argues that the credit crunch and..

The insurance and reinsurance stocks tracked by WIR, with a few exceptions, posted some pretty decent gains over the two week period ending 17 September. As usual, the current upturn for sector stocks was on the back of a wave of confidence in the..

The French insurer Groupama has renamed its Bulgarian acquisitions Groupama Zastrahovane and Groupama Jivotozastrahovane. They were formerly the non-life and the life businesses of DSK Garancia. Groupama said it sees significant growth potential for..

The size and scale of insurance companies was becoming increasingly important for rating agencies, investors and clients, according to Tony Ursano, chief executive of Willis Capital Markets & Advisory, a unit within the Willis insurance broking..