Workplace Benefits Renaissance 2008
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List Of Who's Exhibiting Can't Make Orlando? Attend a “Double Your Voluntary Benefits Revenue Stream©" Seminar in one of 10 cities - There will be no cost to attend these seminars for attendees who pre-register. (A complete schedule for the 2008 30-city tour will be released soon.) The validation of voluntary benefits as a mainstream distribution system has been proven in the marketplace. Year after year of impressive growth and increased acceptance by both employers and employees has created an environment for carriers and producers to capitalize on this expanding market. www.workplacebenefits.org
Daily Quote: "He who can suppress a moment's anger may prevent a day of sorrow." - - Tryon Edwards 1. New York Court of Appeals Rules that Policyholder Can Seek Consequential Damages for Breach of Insurance Contract Albany, New York (February 20, 2008) -- Upholding a key principle of the insurance contract, The New York Court of Appeals ruled on February 19, 2008 that policyholders can seek consequential damages when their businesses collapse as a result of the insurance company’s failure to fulfill its contractual obligations. Bi-Economy Market, Inc. v. Harleysville Insurance Company of New York, et al. Reversing a New York Supreme Court decision upheld by the Appellate Division, that “the insurance policy expressly exclude[d] coverage for consequential losses,” the Court of Appeals held that “it is well settled that in breach of contract actions ‘the nonbreaching party may recover general damages which are the natural and probable consequence of the breach’” and that “when an insured...suffers additional damages as a result of an insurer’s excessive delay or improper denial, the insurance company should stand liable for these damages.” Bi-Economy Market, a meat market in Rochester, New York, suffered a major fire in October 2002. Its “deluxe business owner’s policy” with Harleysville Insurance Company provided business interruption coverage along with replacement cost coverage for the building and “contents” loss coverage. Throughout a three year-long coverage dispute, Harleysville offered to pay only seven months of Bi-Economy’s business income claim, though the policy provided for twelve months. Bi-Economy never resumed business operations. Anderson Kill & Olick, P.C., a law that frequently represents policyholders in insurance coverage disputes, filed an amicus brief in the case on behalf of United Policyholders, a nonprofit dedicated to educating the public on insurance issues. In the brief, Anderson Kill countered the insurance companies’ position that exclusions in their policies for “consequential loss” bar recovery for consequential damages, arguing: Such exclusions limit coverage under a property insurance policy, not liability for breach of the policy... In the insurance market today, there is no specific exclusion for the consequences flowing from an insurance company’s deliberate and intentional breach of a policy. Nor could there be. Judge. Eugene F. Pigott, writing for the majority, similarly held: Nor do we read the contractual exclusions for certain consequential ‘losses’ as demonstrating that the parties contemplated, and rejected, the recoverability of consequential ‘damages’ in the event of a contract breach. The consequential ‘losses’ clearly refer to delay caused by third party actors or by the ‘[s]uspension, lapse or cancellation of any license, lease or contract.’ Consequential ‘damages,’ on the other hand, are in addition to the losses caused by a calamitous event...and include those additional damages caused by a carrier’s injurious conduct – in this case, the insurer’s failure to timely investigate, adjust and pay the claim. Eugene R. Anderson of Anderson Kill & Olick commented: “The Court of Appeals has recognized that insurance companies should not be granted the power to insulate themselves from remedies for their breaches of contract. When insurance company bad faith causes the death of a company, they should pay the full consequences. The court upheld that basic principle.” The decision can be accessed at http://www.nycourts.gov/ctapps/decisions/feb08/14opn08.pdf Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 2. Court Rules AIG Ex-CEO Can See Documents: Report Thu Feb 21, 2008 9:12am EST NEW YORK (Reuters) - A New York state appeals court has given Maurice "Hank" Greenberg, the ex-CEO of American International Group Inc (AIG.N:) access to internal company documents that provide details of questionable transactions, according to a New York Times article on Thursday. Greenberg, who was forced out of AIG in 2005 after accusations of improper accounting, has denied any wrongdoing and has said that the documents would help clear his name, according to the article. An AIG spokesman confirmed the court decision and said the company would appeal it. The transactions in question led to a costly restatement and settlement with regulators. (Reporting by Euan Rocha; Editing by Lisa Von Ahn) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 3. Top court rules for Medtronic in devices case Wed Feb 20, 2008 7:10pm EST WASHINGTON (Reuters) - The U.S. Supreme Court handed a victory to Medtronic Inc (MDT.N:) on Wednesday, ruling that patients cannot sue medical-device manufacturers in state court over harm from a device that has approval from federal regulators. By an 8-1 vote, the court ruled a 1976 law creating federal safety oversight for medical devices bars state-law claims challenging safety or effectiveness of devices that have won premarket approval from the Food and Drug Administration. The decision was the Supreme Court's first ruling on the legal effect of the FDA's approval of a medical device on liability lawsuits, Medtronic said. The ruling could benefit other device makers, who have argued that the FDA's judgment that a product is safe and effective should protect companies from being sued for liability in state court. (Reporting by James Vicini, with additional reporting by Lisa Richwine; Editing by Dave Zimmerman © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 4. Allianz Cuts Jobs, Structured Finance At Dresdner Thu Feb 21, 2008 10:17am MUNICH (Reuters) - Europe's biggest insurer, Allianz , is axing hundreds of jobs at its Dresdner Kleinwort investment bank and slashing its complex structured finance business, after suffering big fourth-quarter writedowns. Allianz confirmed on Thursday it made a record net profit of nearly 8 billion euros ($11.79 billion) in 2007, despite the writedowns that pushed Dresdner into the red and halved the insurer's profit in the final three months of the year. Allianz finance head Helmut Perlet said the market situation at the end of last month pointed to possible further writedowns of 300-400 million euros at Dresdner for the first quarter after about 1.5 billion euros of subprime writedowns in 2007. Allianz unit Dresdner Bank, which in turn owns Dresdner Kleinwort, said it was shedding 450 jobs, most already axed, and cutting back on activity in structured investment vehicles (SIV) and other structured debt products, which spread the U.S. subprime loans crisis across the global banking system. "Dresdner Bank will reduce its engagement in the SIV business, as the model of interest arbitrage faces a tough future," Allianz Chief Executive Michael Diekmann said. (Reporting by Jonathan Gould, editing by Will Waterman) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 5. Trade Group Starts List To Track Bond Insurer Debt NEW YORK, Feb 21 (Reuters) - An international derivatives trade group on Thursday invited its members to list debt backing credit default swaps of U.S.-based bond insurers. Confusion over the size and range of debt backing credit default swaps on bond insurers prompted the International Swaps and Derivatives Association to set up a site where market participants can list the debt. Bond insurers, also known as monolines, are in focus as their exposures to risky residential backed mortgages threatens their top "AAA" ratings, and the potential loss of these ratings is expected to have dire results on their ability to generate new business. Troubles at the companies has prompted investors to examine the legal terms of credit protection written on the insurers, which differs from more traditional corporate based contracts and has never been tested in the event of default. The key difference between default swaps on bond insurers, and those on traditional companies, is that the debt backing contracts insured by the firms, and these vary in both quality and structure. "Monoline insurers have guaranteed a wide variety of obligations, ranging from municipal bonds to Collateralized Debt Obligations and asset-backed bonds," the International Swaps and Derivatives Association said in a release. "These different classes of obligations trade at widely varying prices." "Some ISDA members have therefore suggested that it would be helpful to prepare and publicize this list in order to provide market participants with a clearer understanding of the range of potential deliverable obligations," the association said. When a borrower defaults on its debt, which triggers payment of a swap, buyers of protection on the entity are paid the amount insured by the protection seller. In return, the seller receives the defaulted company's debt, also known as the deliverable, or a cash settlement based on the deliverable, and benefits from how much principal the debt recovers. The creation of the list, however, is not based on an expectation that a default by a bond insurer is likely, ISDA said. (Reporting by Karen Brettell; editing by Walker Simon; ) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 6. HLTH says to merge into unit WebMD in $2.31 billion deal Thu Feb 21, 2008 10:20am EST (Reuters) - Health information services provider HLTH Corp (HLTH.O:) said it will merge into its unit WebMD Health Corp (WBMD.O:) in a cash-and-stock deal worth about $2.31 billion. The deal values HLTH shares at a premium of 26 percent, based on Wednesday's closing price of $10.05. HLTH shares were trading up more than 22 percent at $12.30 Thursday on Nasdaq. (Reporting by Swagata Gupta, Jennifer Robin Raj in Bangalore; Editing by Himani Sarkar) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 7. Oppenheimer To Pay $4.5 Million Over Market Timing NEW YORK, Feb 21 (Reuters) - Oppenheimer & Co agreed to pay $4.5 million to settle charges by the Financial Industry Regulatory Authority that it failed to prevent five traders from improper, short-term trading of mutual funds on behalf of hedge fund clients. The penalty includes a $250,000 fine, and $4.25 million of restitution to more than 60 mutual fund firms, FINRA said on Thursday. Oppenheimer did not admit wrongdoing in agreeing to settle. FINRA said the market timing took place between January and September 2003, and generated $9 million of gross revenue for Oppenheimer. It said the traders were barred from the securities industry for failing to cooperate with the probe, and one appealed the bar to the U.S. Securities and Exchange Commission. FINRA was created last July from the merger of the National Association of Securities Dealers and the New York Stock Exchange's regulatory and enforcement arm. It oversees more than 5,000 brokerages. (Reporting by Jonathan Stempel; Editing by Gerald E. McCormick) © Reuters 2008 All rights reservedReturn to Headlines - - Print Article / Read Entire Article / E-Mail Article 8. Draft Guidelines For Wealth Fund Due In October-IMF WASHINGTON, Feb 21 (Reuters) - A first draft of voluntary best practice guidelines for sovereign wealth funds being developed by the International Monetary Fund is expected in October, an IMF spokesman said on Thursday. IMF spokesman Masood Ahmed told reporters that the IMF's executive board will discuss a preliminary paper on sovereign wealth funds in March and consider the first draft of the guidelines in October, ahead of the IMF fall meetings. (Reporting by Lesley Wroughton; Editing by Theodore d'Afflisio) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 9. Aegon Hungary buys UNIQA Asset Management Feb 21 (Reuters) - The following statement was released by Aegon (AEGN.AS:): Aegon N.V. today announces that Aegon Hungary signed an agreement to purchase 100 percent of the registered capital of UNIQA Asset Management Company and Heller-Saldo 2000 Pension Fund Management Company, both Hungarian entities, from UNIQA Insurance Company. The shares will be transferred to Aegon by June 30, 2008, subject to the approval of regulatory authorities. This latest transaction is in line with Aegon's growth strategy to strengthen its position in the developing pension and asset management markets in Central and Eastern Europe. Aegon Hungary's assets under management for the pension business currently amount to 1.6 billion euros. Following the acquisition, assets under management will increase by approximately 300 million euros. After completion, Aegon will rank second in the Hungarian mandatory and third in the voluntary pension fund market. © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 10. Groupama doesn't see change in CNP ownership PARIS, Feb 21 (Reuters) - French unlisted insurance group Groupama said on Thursday it saw no signs that any of CNP Assurances's (CNPP.PA:) major shareholders wanted to sell their stock, but would look closely at CNP if the situation changed. "CNP's three big shareholders have indicated they don't want to sell. Today, movement (in the capital) is not on the agenda," Groupama Chief Executive Jean Azema told a news conference on Groupama's 2007 results. "If there were some, Groupama would look closely," he added. CNP's three biggest shareholders are state bank CDC, with 40 percent, and, with 18 percent each, savings bank Caisses d'Epargne and state-owned postal services group La Poste. (Reporting by Pascale Denis; Editing by Erica Billingham) © Reuters 2008 All rights reservedReturn to Headlines - - Print Article / Read Entire Article / E-Mail Article 11. Oliver Wyman Acquires Research Firm Celent NEW YORK, Feb 21 (Reuters) - Management consulting firm Oliver Wyman said on Thursday it acquired Celent, a research and consulting firm focused on financial services. No terms were disclosed. Oliver Wyman is a unit of Marsh & McLennan Cos Inc (MMC.N:). Celent's operations in Boston, New York, San Francisco, London, Paris, Milan, Tokyo and Beijing will become a separate unit in Oliver Wyman's financial services practice. (Reporting by Mark McSherry, editing by Gerald E. McCormick) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 12. Singapore's Kim Eng, Mitsubishi UFJ form funds JV SINGAPORE, Feb 21 (Reuters) - Mitsubishi UFJ Securities Co (8306.T:) and Singapore's Kim Eng Holdings (KEHS.SI:) have agreed to set up an asset management joint venture as part of a broad cooperation agreement, the two firms said on Thursday. The joint venture will set up funds to invest mainly in Asian equities, with Mitsubishi UFJ committing to distribute no less than S$1 billion ($709.2 million) worth of funds to Japanese investors within the next two years, the firms said. Kim Eng and Mitsubishi will also provide each other with full access to their equity research and execution capabilities, the two firms added. Mitsubishi, the securities arm of Japan's largest financial services group, and Kim Eng, whose shareholders include Taiwan's Yuanta (2885.TW:), signed a memorandum of understanding to set up a funds joint venture in November. (Reporting by Kevin Lim ; Editing by Erica Billingham) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 13. Former Refco CFO Pleads Guilty To Fraud Wed Feb 20, 2008 10:24pm EST NEW YORK (Reuters) - The former chief financial officer of Refco pleaded guilty on Wednesday to a $2.4 billion fraud in a criminal case stemming from the 2005 collapse of the futures and commodities broker. Former CFO Robert Trosten's plea came less than a week after former Chief Executive Phillip Bennett also pleaded guilty to fraud and less than a month ahead of their trial. The case had drawn comparisons to the accounting fraud that drove telecommunications company WorldCom Inc into bankruptcy. Trosten, 38, pleaded guilty to conspiracy, securities fraud, bank fraud, wire fraud and money laundering charges during a hearing before U.S. District Judge Naomi Buchwald in Manhattan federal court. "I take full responsibility for my conduct and my actions," Trosten told the judge, as his voice broke. "I apologize to my family and those I have harmed by my conduct, which I sincerely and deeply regret." (Editing by Toni Reinhold, Richard Chang) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 14. SocGen In Record Loss, May Take New Writedowns Thu Feb 21, 2008 9:58am EST PARIS (Reuters) - Societe Generale (SOGN.PA:) confirmed a record fourth-quarter loss of 3.35 billion euros ($4.93 billion) after absorbing a huge rogue trading scandal that has made France's second-biggest listed bank a potential takeover target. The loss coincided with an internal report acknowledging that better systems might have prevented the costly stock market gambles it blames on junior trader Jerome Kerviel. SocGen, like many of the world's top banks, has also been hit by losses related to a global credit crunch and the bank warned it may make further writedowns in the future. Executive Chairman Daniel Bouton told Reuters the 144-year-old firm was determined to ride out the storm as an independent bank, despite reports of a potential bid from long-time suitor and arch-rival BNP Paribas (BNPP.PA:). (Additional reporting by Tim Hepher; Editing by Paul Bolding, David Cowell) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 15. Top Basel Bank Watchdog To Review Risk Rules ZURICH, Feb 21 (Reuters) - Poor planning and short-sighted risk assessments by banks exacerbated the credit crisis now dogging the global economy, the world's top banking supervisors said on Thursday, promising a thorough review of rules. The Basel Committee, which groups the world's leading banking supervisors, listed a catalogue of failures by banks -- some which actively resisted reforms -- that left the financial sector surprisingly vulnerable when the subprime crisis hit. Banks also assumed that they could come to the market at any time to seek funding, which turned out not to be the case as worries about exposure to risky investments made banks wary of lending to each other. © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 16. Meadowbrook Insurance Group, Inc. And Procentury Corporation Reach Agreement To Merge In $272.6 Million Transaction Conference Call to discuss transaction will be hosted at 11:30 am Eastern on February 21, 2008. SOUTHFIELD, Mich., Feb. 20 /PRNewswire-FirstCall/ -- Meadowbrook Insurance Group, Inc. ("Meadowbrook") (NYSE: MIG) and ProCentury Corporation ("ProCentury") (Nasdaq: PROS) announced today they have executed a definitive merger agreement for a transaction valued at approximately $272.6 million in cash and stock to be paid to ProCentury shareholders. Under the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of both companies, shareholders of ProCentury will be entitled to receive, for each ProCentury common share, either $20.00 in cash or Meadowbrook common stock having a value of $20.00, subject to adjustment as described below. This price represents a premium of 33% to the 30-day volume- weighted average sale price of ProCentury common shares. The combined entity will adopt and operate under the Meadowbrook name and will continue to trade on the NYSE under the ticker symbol "MIG". Robert S. Cubbin, Meadowbrook's Chief Executive Officer, will continue in his current role in the post-merger combined entity and two ProCentury board members will join Meadowbrook's Board of Directors. Meadowbrook's total gross written premium for 2007 was $346.5 million and ProCentury's was $238.3 million. Total shareholders' equity at December 31, 2007 for Meadowbrook and ProCentury was $301.9 million and $161.0 million, respectively. http://www.meadowbrook.com http://www.procentury.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 17. John Hancock 2007 Variable Annuity Sales In Bank Channel Set Record Of $1.4 Billion Up 41% over previous record in 2006 BOSTON, Feb. 20 /PRNewswire-FirstCall/ -- John Hancock Financial said today that full year sales of variable annuities in the bank channel reached $1.4 billion in 2007, up from $1.0 billion in 2006. This full year increase of 41% marks the fifth consecutive year John Hancock has achieved record bank sales of variable annuities while operating in a very dynamic and competitive marketplace. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 18. Allstate Announces Agreement with the Louisiana Department of Insurance Resolving Issues Regarding Inspections, Wind and Hail Coverage BATON ROUGE, La.--(BUSINESS WIRE)--Allstate announced today that it reached an agreement with the Louisiana Department of Insurance concerning its 2006 reinspection programs and wind and hail coverage. “We are pleased to work together with the commissioner and the department to resolve this situation,” said Ron Corbin, field vice president at Allstate. “This agreement is the result of our desire to find a solution that meets the needs of the customers and the agents who serve them.” Under the agreement, Allstate will offer wind and hail coverage to a limited number of customers who had it removed as long as, on the date coverage was removed, the customer had continuously maintained homeowner’s coverage on the same property for more than three years with the Allstate companies. A few hundred customers are included in this group, or far less than one percent of the total number of Louisiana Allstate homeowners’ customers. As part of the agreement related to the reinspection program, Allstate has agreed to pay the sum of $250,000 to the Louisiana Department of Insurance to avoid expenses associated with a hearing on this matter. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 19. State Initiatives Push for Healthcare Reform KENNEBUNK, Maine--(BUSINESS WIRE)--As 2008 presidential hopefuls tout healthcare reform plans, state legislators continue to advocate for state-level policy changes. Universal healthcare solutions and health insurance options for the uninsured are gaining steam in many state House and Senate debates. Mark Farrah Associates (MFA) recapped the latest state policy initiatives in a recent article published in Healthcare Business Strategy, a popular industry analysis series. State health policy highlights from the article are as follows: The California legislature’s defeat of universal healthcare legislation in January 2008 was a blow to reformers who hoped passage of a comprehensive package there would lead other states to tackle healthcare legislation. Meanwhile, the Massachusetts Commonwealth Connector, a program that offers subsidized and lower-cost plans for uninsured residents is turning out to be more expensive than anticipated. A universal plan by Pennsylvania Gov. Rendell would offer subsidies to enrollees with income less than 300% of federal poverty level and premium assistance to small employers. The proposed Illinois Health Care for All Act would provide guaranteed coverage to small businesses and individuals. A group of Minnesota Democratic-Farmer-Labor Party legislators introduced legislation in early February to establish a single-payer healthcare system. The state of Washington will begin to implement recommendations of the Blue Ribbon Commission on Health Care Costs and Access. Bills to set up exchanges or clearinghouses to provide residents easy access to affordable insurance plans are under consideration in Kansas, Oregon and Wisconsin. The MFA assessment finds there is a growing consensus for universal healthcare and mandatory health insurance. Visit http://www.markfarrah.com/healthcarebs.asp?article=37 to read the full article, State Legislatures: The Healthcare Reform Battleground. Healthcare Business Strategy (BS) is a free brief that presents analysis of important issues and developments affecting healthcare business today. To receive email alerts when new issues are published, visit http://www.markfarrah.com/subscribe.asp and subscribe. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 20. INSURANCE NEWSCAST "Pictures Of The Day" -- Sponsored By:
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21. New York Life to Pay Long-Term Care Dividend for the Fourth Consecutive Year Company Continues Double Digit Sales Growth NEW YORK--(BUSINESS WIRE)--New York Life Insurance Company announced today that its LTCSelect Premier long-term care insurance product will pay a dividend to policyholders this year. This is the fourth consecutive year New York Life, a triple-A rated insurer¹, has paid a long-term care dividend. New York Life’s long-term care sales increased 14% in 2007, and represents the company’s third year of double digit increases in sales growth compared to a 3% increase2 in sales industry-wide. www.newyorklife.com/guaranteesmatter/ Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 22. Prudential Financial Reprices Its Term Insurance Products Term Essential® and Term Elite® Utilizes Age-Last Birthday NEWARK, N.J.--(BUSINESS WIRE)--Prudential Financial, Inc. (NYSE:PRU) announced today that it has repriced its term life insurance products, Term Essential® and Term Elite®, to be more competitive in the marketplace, especially for policies over $1 million of protection and across 10, 15, 20 and 30 year level premium paying periods. www.prudential.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 23. ASI Launches MedSolutionsTM Liability Insurance Product for Long-Term Care Facilities, Healthcare Groups ATLANTA--(BUSINESS WIRE)--American Safety Insurance Services, Inc. announces the launch of MedSolutionsTM, a new suite of insurance products that provide customized insurance plans for long-term care facilities and healthcare groups. MedSolutions offers general and professional liability coverage for entities in the long-term care business, such as nursing homes, assisted and independent living facilities, as well as medical directors, allied health entities and physician groups. MedSolutions offers traditional liability coverage and unique solutions for healthcare risks that value the expertise of highly experienced underwriters or desire a creative program structure that can provide a long-term cost advantage over other products in the market. The policy structures are flexible and customized based on the risk’s unique exposures. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 24. Texas Association of Health Underwriters Launches Advocacy Initiative TAHU Touts Objectivity and Information in Operation ‘Health Advocacy’ AUSTIN, Texas--(BUSINESS WIRE)--With the Texas primaries fast approaching, consumers are bombarded by political messages touting reform and change. During this important time, the state’s association of health underwriters is launching a consumer education and advocacy program, dubbed “Operation: Health Advocacy,” designed to cut through political rhetoric and objectively inform consumers regarding the realities of health care, health insurance and the impact of government versus private sector efforts. www.TAHU.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 25. New Study Ranks Financial Advisor Loyalty to Financial Services Firms Cogent's benchmark advisor survey, The Advisor Product Forecast(TM), ranks loyalty metrics into 2009 based on advisor data CAMBRIDGE, Mass., Feb 20, 2008 (BUSINESS WIRE) -- Fewer than one third of all financial services firms providing products across five investment categories enjoy positive loyalty ratings among advisors who sell their products. A new comprehensive study examining advisors' product use and loyalty across multiple sales channels, conducted by Cambridge, Mass.-based Cogent Research, signals major challenges for many product manufacturers, especially as advisors migrate toward new products that support more complex investment strategies. The study, The Advisor Product Forecast(TM), measures advisor loyalty to specific firms across several product categories: open-end mutual funds, variable annuities, SMAs, ETFs and closed-end funds. The Cogent Research study loyalty measures were derived based on Net Promoter(R) Score (NPS), a management tool used to gauge the strength of a firm's customer relationships. Key insights from the five product categories measured include: -- ETFs are the only category where providers have consistently high positive loyalty scores (+19 percent on average), meaning promoters outstrip detractors by a significant margin. -- By contrast, open-end mutual fund companies--long the dominant providers of advisor-sold investment products -- clearly have a loyalty problem. Only one in four companies measured have more promoters than detractors among advisors currently selling their products. The overall average loyalty score for the category was -5 percent. -- Variable annuity and closed-end fund providers receive the lowest average loyalty scores (at -14 percent and -16 percent, respectively). In fact, among 17 VA providers measured, only three manage to garner loyalty scores in positive territory. -- As a category, SMA providers fare somewhat better than VAs and closed-end funds, with promoters outpacing detractors by +4 percent on average. "Companies can no longer afford to think of loyalty as a 'soft' metric," said Bruce Harrington, managing director of syndicated research for Cogent Research. "Our study projects through 2009 flat or negative growth for mutual fund and variable annuity sales, trends that are clearly reflected in these current loyalty scores." The Cogent Research study concludes that mutual fund firms and VA providers need to commit to rebuilding loyalty among advisors across a wide variety of touch points, including client outreach, product and service innovation, and other value-added services to support advisors' changing business models. "This is a major wake-up call," says Tony Ferreira, managing director of Cogent's custom research solutions practice. "Mutual fund companies and VA providers need to adapt more quickly to changing advisor-sold market dynamics, or risk slipping even further in the minds of producers." Additional loyalty-related findings from The Advisor Product Forecast(TM) include: -- A 122 point loyalty gap exists between #1 ranked American Funds and last place Putnam. -- Only eight mutual fund providers, including American Funds, Russell, and Franklin Templeton have more promoters than detractors among advisors selling their products. -- Despite poor loyalty ratings among nearly all VA providers, Ameriprise achieves an NPS rating that rivals top-tier providers across all product categories. -- NFJ Investments (Allianz, Inc.) earns the top advisor loyalty spot among SMA providers, ahead of Goldman Sachs Asset Management and Davis Selected Advisors, which are tied for second. -- While iShares ranks number one in advisor loyalty among ETF providers, WisdomTree shows surprising strength in advisor loyalty as well. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 26. RMS and ImageCat Release Research Report on 2007 U.S. Wildfire Season · Analysis shows marked increase in California wildfire risk · On average, 70% of historical U.S. insured losses from wildfire are from properties in Southern California Newark, Calif. - February 20, 2008 – Risk Management Solutions (RMS) and ImageCat, Inc. have today issued a joint research report on the 2007 U.S. wildfire season. With a potential $2.5 billion in insured losses in California alone, last year ranks as one of the costliest wildfire seasons in recent history. As urban development continues to escalate on the wildland fringes, the risk is likely to increase in the future. In October 2007, Southern California was hit particularly hard by an outbreak of wildfires that resulted in the destruction of over 3,000 buildings. The dry winter and summer months gave rise to abundant surface fuel, which was extremely susceptible to wildfires, and when combined with the strong Santa Ana winds ignited 23 separate fires that consumed almost 520,000 acres of land. Insured losses were primarily due to burnt residential structures and their contents, but other claims included smoke damage, additional living expenses due to the mandatory evacuation, burned automobiles, and a limited number of damaged or destroyed commercial structures. RMS analysis reveals that, in the past ten years of California wildfire history, close to 1,350 structures have burned on average each year, with an estimated annual insured loss of some $490 million—nearly twice the long-term average. Moreover, while on average, less than 10% of the burnt areas in the U.S. are in California, around 70% of the total insured losses are from properties in Southern California. The counties between Santa Barbara and San Diego house some 60% of the Californian population that has been especially hard hit by wildfires. “Housing developments are rapidly expanding into wildland areas, which create an environment in which fire can readily move between structural and vegetation fuels, increasing the threat to people and their properties,” commented Patricia Grossi, senior researcher at RMS. “Last year’s California wildfires serve as a stark reminder of the need to manage and mitigate this peril through more risk-informed decisions.” www.rms.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 27. Willis Re Releases New Sub-Prime Research --Analysis uncovers early indicator warning signals of companies at risk-- London, UK, February 20, 2008 – Willis Re, the reinsurance operations of Willis Group Holdings (NYSE: WSH), the global insurance broker, has released new research analysing the risk to the underwriting portfolios of professional liability re/insurance Underwriters stemming from the sub-prime crisis and subsequent global credit crunch. Willis Re’s Professional Liability Practice Group has developed a sophisticated analytical approach, based on financial markets data, which identifies what may be early warning signals for potential securities class-action lawsuits. This approach has been incorporated into Willis Re’s proprietary D&O modelling tool, eSCAPE. www.willis.com. To access the full report, please click on the link: http://www.willis.com/news/Publications/Subprime_DO_Claims_Early_Indicators_Feb2008.pdf Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 28. Western National Insurance Group Joins Trusted Choice® Minnesota’s Largest Mutual Insurer is Newest Trusted Choice® Company Partner ALEXANDRIA, Va., Feb. 20, 2008— Trusted Choice® is pleased to announce the addition of Western National Insurance as a company partner in its Trusted Choice® consumer brand movement for independent agency system companies. The Edina, Minn.-based Western National is a century-old property-casualty insurer working with nearly 500 independent insurance agencies and 5,000 producers to serve personal and business insurance needs in nine states: Iowa, Minnesota, Nevada, North Dakota, Oregon, South Dakota, Utah, Washington and Wisconsin. More information on these organizations can be found online at www.TrustedChoice.com and www.wnins.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 29. AMS Services Signs New AMS Prevail Network Partner BOTHELL, Wash. — February 21, 2008 — AMS Services, a leader in insurance agency automation, today announced that LG Premium Finance has joined the growing network of premium finance companies available through the AMS Prevail Network™. LG Premium Finance provides premium financing and other financial products to insureds, agents and brokers. Their purpose is to provide superior insurance premium financing services for the insurance broker/agent community. With the AMS Prevail Network, LG Premium Finance is meeting their initiative to help brokers build a more profitable business by providing tools that make financing insurance premiums simple and convenient. www.amsservices.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 30. NAIC Completes Comprehensive Producer-Licensing Assessment Report Outlines Status of Uniformity, Reciprocity Initiatives KANSAS CITY, Mo. (Feb. 20, 2008) — The National Association of Insurance Commissioners (NAIC) today released a comprehensive review of state producer-licensing laws, practices and processes. The report — which provides an accurate national assessment of state producer-licensing regulation — identifies areas where the states’ reciprocity and uniformity initiatives need improvement, along with areas where such efforts have been successful. www.naic.org/press_home.htm. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 31. Just-Released AIS’s Directory of Health Plans: 2008 Includes Data for the Dozen Mergers and Acquisitions Completed Last Year Washington, DC, February 20, 2008 — Atlantic Information Services (AIS), publisher of industry-leading newsletters Health Plan Week, Drug Benefit News and The AIS Report on Blue Cross and Blue Shield Plans is pleased to announce publication of AIS’s Directory of Health Plans: 2008, available in print and CD. This new edition contains every health plan and primary care preferred provider network operating in the U.S. as of year-end 2007. The 2008 directory reflects the more than 12 mergers and acquisitions that were completed during 2007 — across the health plan and PPO markets. These include: Molina Healthcare’s acquisition of Mercy CarePlus; CareSource’s acquisition of Community Choice Michigan; Aetna’s acquisition of Schaller Anderson; PhyTrust of South Carolina’s acquisition of Centene Corp.’s Total Carolina Care; and Viant’s acquisition of Texas True Choice and ppoNext. For more information, visit http://www.aishealth.com/Products/dhp.html. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 32. AIS Announces Health Business Outlook 2008 Atlantic Information Services' (AIS) Health Business Outlook 2008 features interviews with experts from top financial, consulting and health care companies exploring key trends affecting health plans, pharmaceutical companies, hospitals, medical groups and others health care organizations. Washington, DC (PRWEB) February 19, 2008 -- Atlantic Information Services (AIS), publisher of Health Plan Week, Drug Benefit News, Specialty Pharmacy News and Report on Medicare Compliance, announces publication of Health Business Outlook 2008, the first in a series of free health care industry reports available on the AISHealth.com Web site at http://www.AISHealth.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 33. AIA Testifies Against Onerous Wisconsin Zip Code Ban Bill MADISON, WI, February 20, 2008 – The American Insurance Association (AIA) today testified against Wisconsin SB 348, a bill that would ban zip codes as an insurance rating factor, saying it is unfair and hides the real cost of insurance. “SB 348 prevents an insurer from localizing and more accurately placing the cost of insurance where it should be – where the claims are. This hides the true cost for insurance and is unfair and impractical,” said John Birkinbine, AIA assistant vice president, Midwest Region. “Wisconsin consumers enjoy some of the nation’s lowest rates for insurance and eliminating a proven rate factor like zip code could have negative repercussions in what is a stable, healthy market.” Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 34. Undergrads seeking jobs in insurance post resumes on PIANJ Web site TRENTON, N.Y.—Addressing the common and persistent challenge independent agents face finding new talent to join their staff, the Professional Insurance Agents of New Jersey Inc., and the New Jersey Young Insurance Professionals are helping college students from around the state reach potential employers on the PIANJ Web site. In response to the NJYIP outreach campaign, labeled Project Y, more than 60 students already have submitted resumes in search of a job. PIANJ members can view and select these potential job candidates on a new online database, located on the Agency Staffing Assistance Program section of the PIANJ Web site at: www.pia.org/IRC/asap/njresume.php. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 35. GMAC Insurance Launches Post Automotive Repair Inspection Service, Available Free Of Charge Nationwide SmartInspectSM Service Ensures Quality and Value of Repairs, Providing Customers Peace of Mind in Accident Aftermath ST. LOUIS (February 19, 2008) – Today, GMAC Insurance launched SmartInspectSM, a post-repair inspection service designed to promote consumer confidence by ensuring the quality and value of repairs after an accident. As part of the service, customers can opt for a qualified GMAC Insurance representative to re-inspect and approve all work done in the repair process. The benefit is immediately available free of charge to all customers nationwide. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 36. Peerless Insurance Introduces CUSTOM PROTECTOR and The Peerless Package Series New commercial product line delivers greater speed and flexibility to agents Keene, N.H. (February 4, 2008) – Peerless Insurance, a member of Liberty Mutual Group, today announced the introduction of CUSTOM PROTECTOR, a comprehensive array of property and liability coverages that can be customized for nearly 400 eligible classes. In addition to expanded eligibility, CUSTOM PROTECTOR offers optional market segment endorsements for the following twelve industries: condominiums, contractors, food processors, garages, hotels/motels, manufacturers, office/lessors, religious organizations, restaurants, retailers, service providers, and wholesalers. Split-rated property and liability coverages allow for price adjustments to match a customer’s specific exposure. CUSTOM PROTECTOR is available to small to mid-sized businesses with receipts up to $15 million per location. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article
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