P&C analysts rank climate change and other environmental issues as the industry’s top challenge

NEW YORK & LONDON--(BUSINESS WIRE)--Insurance equity analysts expect a significant increase in property and casualty (P&C) mergers and acquisitions this year and say that life insurers who expand into emerging markets over the next three years are likely to be rewarded with superior ratings, according to findings of a global survey by Accenture (NYSE: ACN).

Conducted by Institutional Investor Market Research Group as part of Accenture’s High Performance Business research, the survey queried more than 100 leading insurance equity analysts in 14 of the world’s largest insurance markets and covered a diverse range of topics, including profit and growth strategies, capital utilization priorities, critical industry challenges, operational excellence and industry top performers.

Among the survey’s other key findings: More than three-quarters (77 percent) of analysts rate operational efficiency improvement – or “transformation” – programs as the most valuable use of capital after share-buybacks and dividend increases (cited by 83 percent of respondents). Nine out of ten (89 percent) P&C analysts cited climate change and environmental issues among the industry’s top three challenges, making it the most widely cited P&C industry challenge in the survey.

“The determinants of success within the $3.7 trillion insurance industry are rapidly changing, as new threats and opportunities emerge both regionally and globally,” said Serge Callet, managing director of Accenture’s Insurance practice. “We tapped the collective insights of these critical industry observers to deepen our understanding of how insurers can earn superior ratings and how they can achieve high performance in a challenging market environment.”

Life Insurance Analysts Reward Expansion into Emerging Markets

The vast majority (85 percent) of life insurance analysts said expansion initiatives by North American, European and Japanese insurers into Brazil, Russia, India, China, Mexico or South Korea will be a key driver of superior ratings over the next three years. Asked to identify the preferred means of expansion into such emerging markets, life analysts were far more likely to cite organic growth as a high priority (cited by 82 percent) than to cite M&A (48 percent).

“While opportunities for life insurers vary by geography and market circumstances, our research suggests that analysts overall are looking to reward carriers with bold visions for the longer-term opportunities in emerging markets,” said Callet. “The winners will be those who have flexible, scalable and efficient operations and can strike the best partnerships and joint ventures around the globe.”

P&C Analysts Predict M&A But Favor Organic Growth

More than two-thirds (71 percent) of all P&C analysts surveyed said they anticipate a “significant increase” in merger and acquisition (M&A) activity in 2008. At the same, the findings indicate significant differences by geography, with P&C analysts in North America three times as likely as those in Europe to predict a significant increase in M&A activity.

“The logic of consolidation within the property and casualty industry, particularly in North America, may be gaining favor as the economy slows and as rates soften,” said John Del Santo, managing director of Accenture’s Insurance practice in North America. “However, our research suggests that analysts might not fully value these transactions without a clear linkage to organic growth or until efficiencies are realized.”

P&C analysts globally attached modest importance to M&A in terms of earning superior ratings, but they widely favored organic growth:

Less than half (45 percent) ranked M&A among the most valuable uses of capital;

Two-thirds (67 percent) said that M&A within mature markets is important or critical to earning superior ratings over the next three years, compared with 84 percent who said the same of organic growth; and

One-third (33 percent) described M&A within mature markets as “unimportant” to earning superior ratings over the next three years, compared with 16 percent who said the same of organic growth.

DelSanto added: “M&A winners will focus on rigorous deal discipline and early post-merger integration planning in order to quickly realize synergies and demonstrate a path to profits.”

P&C and Life Analysts Strongly Favor Operational Efficiency Programs

Operational efficiency improvement – or “transformation” – programs were ranked only slightly behind share-buybacks and dividend increases among the most important uses of capital, but significantly ahead of product and service innovations, M&A and business line expansion.

“One of the most remarkable findings of our research is that such a vast majority of analysts hold such bullish views on longer-term transformation programs and see an opportunity for insurers to outperform the market through increased efficiency,” said Callet. “Our recent analysis suggests that when it comes to return on equity, transformation programs can have an equal or greater positive effect than share buybacks can.”

Further highlighting the analysts’ focus on efficiency, “aging systems and IT modernization” was the second most widely cited industry challenge among both P&C and Life analyst respondents.

Climate Change Cited as top P&C Industry Challenge

“Climate change and environmental issues” was the most widely cited industry challenge among P&C insurers – ahead of aging systems and IT modernization (85 percent), new regulations and reforms (76 percent), cross-border competition (69 percent), terrorism and geopolitical instability (61 percent), growing risk to investment portfolios (59 percent), changing customer demographics (58 percent), workforce demographic changes (52 percent), and competition from banks (35 percent) and capital market firms (27 percent).

Among the survey’s other findings:

The majority (57 percent) of analysts said that IT investment in areas such as policy administration, claims management, process optimization and call centers are “critical” to the insurance industry over the next three years, with another 34 percent describing such IT investment as “important.”

Eighty-two percent of analysts said the insurance analyst community would benefit from more education on new technologies and their role in business performance.  www.accenture.com

This resource was created by both brokerage general agencies (BGAs) and carriers to alleviate one of the most cumbersome procedures in the entire life insurance application pipeline -- the informal process. 

For more information on the Standard Informal Transmittal, visit http://www.nailba.org/content/membershipbenefits/informal.cfm

ATLANTA (April 14, 2008) – A.D.A.M., Inc. (NASDAQ: ADAM), the leading provider of high-quality health information and benefits technology solutions, today announced a new feature for AgencyWare, its agency management system for benefits brokers. The new feature, called “Send to Benergy,” enables brokers to leverage benefit plan data stored in AgencyWare to instantly update employee portals. Besides eliminating redundant work, “Send to Benergy” helps brokers modernize their clients’ employee communications and achieve greater client retention.

A.D.A.M.’s AgencyWare – used by more than 150 agencies nationwide – gives brokers a comprehensive system for client management, sales, service and commission tracking. But until now, brokers didn’t have the ability to take that valuable information and repackage it for employee consumption. With the “Send to Benergy” feature, plan details within AgencyWare can be immediately sent to employee communications portal templates within Benergy™, A.D.A.M.’s award-winning employee benefits and health management portal. Employers looking for better benefits communication will get more value from brokers who can implement effective portals for them.

“We spend a lot of time finding the right plans for our clients and then making sure they have the right information for their employees,” said Jack Bruce, COO of BIS Benefits, a Georgia-based brokerage firm and AgencyWare user. “Our clients expect employee communications from us in a timely fashion, but entering information into Benergy can be time-consuming. Being able to seamlessly do this through AgencyWare is a big advantage, as it makes the communication process more efficient and saves us time and money in building portals for our clients.”

“High-quality employee portals have become a must-have service for benefits brokers to win and keep clients,” said Andrew Ceccon, chief marketing officer for A.D.A.M. “‘Send to Benergy’ may be a simple button in AgencyWare, but it removes a significant hurdle by speeding up the creation of portals for chronically time-strapped brokers. More importantly, brokers close the communications gap between employers and employees and look like heroes to their clients.”

A.D.A.M. will be offering a complimentary Webinar for brokers, called “Employee Communications: The New Frontier for Agency Management Systems,” on April 22, at 2 pm EST. To register, please visit http://adam.webex.com. For more information on AgencyWare or Benergy, visit www.adambenefits.com for free demos.

About A.D.A.M., Inc.

A.D.A.M. (NASDAQ: ADAM) is a leading provider of high-quality health information and benefits technology solutions to healthcare organizations, employers, consumers, and educational institutions. A.D.A.M.’s portfolio of products includes its award-winning Health Illustrated Encyclopedia and Benergy™, the leading benefits communication and healthcare decision support platform for small and mid-sized employers. A.D.A.M.’s content and technology solutions equip consumers to better understand their health, wellness and benefits, while helping healthcare organizations and employers reduce the costs of healthcare and benefits administration. For more information, visit www.adam.com or call 1-800-408-ADAM.

With more volatile equity markets likely in 2008, past reliance on investment income may become a greater problem as clubs emphasise stability over yield in their portfolios.

A.M. Best anticipates record ultimate claims for 2006 for the International Group of P&I Clubs.  www.bestweek.com..

MedReview helps self-insured employers control their healthcare costs by providing a full range of audit services

MedReview, LLC is looking for benefits consultants who would like to "refer" clients to us who have a current or future need for any of our audit services.

If any of your clients are in need of our services, we pay a substantial "referral fee." 

We are a national company with regional offices in Chicago, Cleveland, Denver, Philadelphia, Seattle, Scottsdale, and Thomasville, Georgia. Many of America's largest and most respected firms use our services. Each year, we conduct hundreds of medical claims audits and pharmacy audits with dozens of different ASO firms, TPA firms, and PBM firms.

We conduct audits for a wide variety of plan sponsors. They are from all economic sectors - manufacturing, transportation, finance, communications, etc. Some of our clients are also healthcare providers who self-insure their group health plans. We also conduct audits for non-profit organizations and governmental agencies. Some of our clients have as few as 500 employees enrolled on their group plans; others have as many as 50,000.

MedReview, LLC Audit Services:

1. electronic claims audit
2. focused sample claim audit
3. random sample claims audit
4. operational review or procedural audit
5. pharmacy audit
6. dependent eligibility audit

The U.S. Department of Labor today sued Chicago-based AA Capital Partners Inc. and its executives for improperly causing more than $25 million in losses for five Michigan pension funds by misusing plan assets to benefit themselves and by charging the plans excessive investment management fees. The Labor Department's suit seeks to restore all losses incurred by the plans as a result of the defendants' improper actions.

"This case involves gross abuse of the trust that workers and their families placed in the management of these pension funds," said Secretary of Labor Elaine L. Chao. "We are seeking full restitution to the pension plans, including the illegal profits that the defendants realized at the expense of workers and their families."

The department's suit alleges that AA Capital Partners, its co-owner and president John Orecchio, chief financial officer Mary Elizabeth Stevens, and affiliate AA Capital Liquidity Management LLC violated the Employee Retirement Income Security Act (ERISA) by imprudently misusing plan assets and charging the plans excessive fees on investments.

The pension plans covered more than 60,000 participants of the Carpenters Pension Trust Fund of Detroit and Vicinity, Operating Engineers Local Number 324 Pension Fund, Michigan Regional Council of Carpenters Annuity Fund, Millwrights' Local Number 1102 Supplemental Pension Fund and Michigan Teamsters Joint Council #43 Pension Fund. As of April 30, 2006, the pension plans had total assets of approximately $3.1 billion, the latest data available.

At various times from 2002 to 2006, the defendants are alleged to have improperly used $25.9 million of the plans' assets to pay for, among other things, the operating expenses of the firm, renovations to a horse farm and a strip club managed by Orecchio. In addition, they allegedly caused the plans to pay unauthorized fees to AA Capital Partners. The suit seeks a court order to require that the defendants restore to the plans all losses, return illegal profits and correct transactions prohibited by law. The suit also asks that the defendants be permanently barred from serving as fiduciaries to any plan governed by ERISA in the future.

SOURCE U.S. Department of Labor

http://www.dol.gov

THE TIME EFFECTIVE WAY TO STAY AHEAD   

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http://www.insurancenewslink.com/Articles/ExternalView?u=7

TODAY'S BANK INSURANCE IN BRIEF" is provided each week courtesy of Michael White Associates @www.bankinsurance.com.  To read these stories , visit http://www.bankinsurance.com/editorial/news/default.htm

SOURCE     PROFESSIONAL     9-10 YRS 

BLS - Borbely     RN     3.59% 

LPN   4.49% 

BLS-OES   RN   4.75% 

LPN   4.48% 

According to Blue Cross and Blue Shield, medflation has exhibited nearly double-digit increases in certain medical areas. Hospitals continue to experience profit pressures; salary cost increases for nursing staff are one of the largest. Salary cost pressures will continue to increase as the shortage of nurses grows; compounding these pressures are the 47 million Americans without healthcare, 73 million Americans who are “underinsured” and the prospect of national health insurance.

ATLANTA--(BUSINESS WIRE)--Digital Insurance, Inc. (www.digitalinsurance.com), the fastest-growing national employee benefits broker focused on small business insurance coverage is expanding its product line to include non-traditional or “limited medical and wellness” offerings. The addition of these plans is a significant enhancement to Digital’s INcompassSM suite of services, enabling the company to provide a wider range of low-cost healthcare products to small employers.

In response to spiraling major medical premiums, an estimated 39 percent of employers don’t offer health insurance. In fact, less than half of small businesses with three to nine employees offer this benefit.1 “We believe small businesses would offer a benefits package to valuable employees if they could do so within their budget,” says Adam Bruckman, president and chief executive officer of Digital Insurance. “Limited medical benefit plans – being used by more than a million Americans -- may be an affordable option.”

Although not the right choice for everyone, limited medical and wellness benefit plans are gaining interest among small businesses and employers with low-wage, part-time or contract workers. These products are designed for employees who may not have health insurance, whose coverage is being reduced or who can no longer afford family coverage. With price points of $100, $150 and $200 per employee per month, they help people gain access to basic medical care such as doctor visits, prescription drugs and wellness solutions.

Through a new strategic partnership with Cost Containment Group (CCG) and access to its limited medical products, Digital now offers this viable low-cost alternative to expensive traditional healthcare plans. The relationship between Digital and CCG supports both organizations’ goal to bring the best products and value to the small business community, serving this underserved segment of the market.

Cost Containment Group and its family of companies is a brokers’ resource of global proportion. The corporate philosophy is to provide a level of care which far exceeds the members’ expectations while reducing costs and simplifying delivery in the health care and insurance industries. Cost Containment Group family of companies include: Patriot Health, United Health Programs of America and Ocean Consulting Group.

NEW YORK (Reuters) - Wachovia Corp posted a surprising first-quarter loss on Monday as credit problems from mortgages and other debt soared, prompting the bank to lower its dividend, raise $7 billion in capital and cut jobs.

(Additional reporting by Dan Wilchins; Editing by Maureen Bavdek and John Wallace)

© Reuters 2008 All rights reserved

Have you thought about taking an insurance law course in law school?

"Elective insurance law courses cover everything from property, life, disability and health to auto, mortgage and long-term care. Whether you ultimately want to defend corporate insurance companies or represent the insured, it's a course that will reap real benefits. Insurance is everywhere and it is often hard to understand and difficult to square what you thought you bought with what you actually received," says Darras. 

In his case, Darras says he wanted to be the voice of the disabled, so no matter whether they were rich or poor, they would know his name meant real protection when they needed it most. An insurance law elective, would have been a wonderful way for him to hit the ground running after graduation but it wasn't available.

"Twenty years later, Frank N. Darras is famous for setting the standard to which insurance lawyers are held. He has been a hero for the sick, the elderly and he really is a modern day David fighting Goliath," says James A. Hayes, Jr., Assistant Dean of Academic Programs and Associate Professor at Western State University College of Law. See http://www.wsulaw.edu. 

"Last month, at WSU, we held the first annual Frank N. Darras Disability Law Moot Court Competition, at the school's Fullerton campus. As far as we can tell, it is the only moot court competition in the country that focuses exclusively on disability law," says Hayes. "For tomorrow's lawyers to compete in this unique competition opens opportunities for their futures, but also for everyday Americans who buy insurance to protect them from the unthinkable."

"This competition affords law students the opportunity to understand insurance law and determine if this is the field they want to explore and master as a career. We sure could use some great insurance lawyers to stand up for everyday people," says Darras.

See http://darrasnews.mediaroom.com or call 800-458-4577.

WASHINGTON (Reuters) - U.S. officials, worried on inflation even as the economy weakens, took the rare step on the weekend of toughening their talk on the downtrodden dollar in the hope that they won't have to back it up with action.

European leaders had been pushing for months for U.S. Treasury Secretary Henry Paulson to step up his defense of the dollar as the euro soared to an all-time high, making euro zone exporters uncomfortable.

In the end, the strongest push came from an unlikely source -- emerging markets, where rising costs for food and fuel are contributing to a distressing bout of global inflation.

(Reporting by Emily Kaiser and Glenn Somerville)

© Reuters 2008 All rights reserved

The ACE Entity endorsement provides up to GBP 1 million protection for the insured company, in addition to that provided to the directors and officers. For many small to medium sized companies this protection is vital in providing better security to the directors, officers and employees who are likely to have a substantial financial interest in the company.

The extended cover includes protection for claims of wrongful acts committed by the company. In addition, cover is also extended to include legal expenses in respect of corporate manslaughter, corporate homicide and health and safety investigations. www.aceeuropeangroup.com  www.acelimited.com

Vision insurance is a wellness benefit that helps combat the costs of regular eye exams and vision correction. Routine eye exams can provide information about overall health and help spot health problems, including diabetes, hypertension, high cholesterol and glaucoma, in the early stages of development.