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Monday
04/28/08
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Your Insurance News "Strategic
Relationship" |
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Read online at
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Read daily by
over 450,000 insurance industry
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Walt Podgurski, CLU, CES, Publisher & Editor
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Monday
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Early Arrival Breakouts -
2:45
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to all attendees and exhibitors)
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Track 1 (Life & Health) -
Electronic
Enrollment / Case Management
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Track 2 (P&C) -
Adding Auto & Home To An Existing Menu Of Voluntary Benefit
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Opening Reception 3:45
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Special Show Presentation - Part
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Tuesday - 07/29/08
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Sponsored
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Special Keynote Presentation - Part
2 - Marshall Sylver - 9:00 a.m. - 10:45 a.m.
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Open Exhibit Hall 10:45 a.m. -
12:15 noon (Meet with 80 of the leading workplace benefits
vendors)
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attendees and exhibitors) 12:15 p.m. - 2:00 p.m.
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- Track 1 (Life & Health) -
Going
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Is
Workplace Property-Casualty The Greatest Untapped Market of
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Wednesday - 07/30/08
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Buffet
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With Exhibitors 7:45 a.m. - 9:00 a.m.
(Meet with 80 of the leading
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Special Workshops - 9:00 a.m. -
11:45 a.m.
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Track 1 (Life & Health) -
Position Your Benefits Agency For Sale
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Track 2
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1.
MarshBerry Releases
2008 Insurance Agency/Broker Value Forecast |
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CLEVELAND,
April 24 /PRNewswire/ -- Marsh, Berry & Company, Inc. has
released a comprehensive overview of the state of the insurance
distribution system for 2008 and beyond. This research report
documents historical and projected insurance agency/broker
value, merger & acquisition activity, and organic growth best
practices that can help agencies and brokers exploit changing
market dynamics.
Based upon
current economic indicators, declining organic growth rates, and
a shift in merger & acquisition supply and demand dynamics,
MarshBerry is forecasting average agency/broker valuations to
drop. Average organic growth rates during 2007 fell to around
3.7%. Combining this with projections of a slowing economy and
continued soft market insurance rate conditions, future earnings
enhancements for agencies/brokers will become increasingly
difficult.
Projected M&A
deal pricing will also stabilize. After several years of fierce
buy-side competition between public brokers, banks, and private
equity firms drove deal pricing to premium levels in excess of
8.0X EBITDA, the future will experience stabilizing pricing for
the masses. The insurance market will see fewer buyers combined
with an increase in supply. Deal supply by independent agencies
will expand over the next several months for a number of
reasons: -- Stock is too narrowly held and the average
weighted age of owners is in the mid 50s
-- Continued
soft market conditions will hinder internal return expectations
-- The fear of
capital gains increases
-- The threat
of national health care
-- Falling
agency valuations
The following
link discusses these concepts in more detail while providing the
reader with the best practices necessary to grow and prosper in
the changing insurance environment:
www.MarshBerry.com/Spring2008StateofIndustry |
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2.
Joe Bastardi of
AccuWeather.com Releases Early 2008 Hurricane Season Forecast Slightly
More Storms than Average with Increased Chances for Landfalls in North
America |
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STATE COLLEGE, PA, April 25, 2008—AccuWeather.com Hurricane Center
meteorologists, led by Chief Long-Range and Hurricane Forecaster Joe
Bastardi, have released an early hurricane season forecast for 2008.
They believe the waning La Niña conditions and a continued warm water
cycle in the Atlantic Basin will be the two defining factors influencing
the 2008 hurricane season, causing the number of storms to be slightly
above average but, more importantly, increasing the chance for U.S.
landfalling storms.
“The warming is not uniform across the entire Atlantic. In some areas
where hurricanes normally form -- the central and eastern tropical
Atlantic -- ocean water temperatures are near or below normal. This
should limit the number of storms, so we do not expect a near record
high number like in the 2005 season. However, considering other factors,
the number of storms should be slightly higher than historical
averages,” said Bastardi. “The warmest waters relative to normal will be
in the northern areas of the Atlantic, especially toward the North
American continent. This could potentially increase the threat of major
landfalls to the U.S. coast.”
“In determining areas of elevated potential for landfall, we try to
understand where the spread of storm tracks will center – but even
within this spread, storms can ‘bunch,’ creating discrete areas of
increased risk,” Bastardi said. Last season, the spread of the storms
shifted southwest with one such bunch in the northern Caribbean. “This
year, early indications show that the spread will move north and east
with a target closer to the Southeast U.S.”
Bastardi and the AccuWeather.com Hurricane Center are looking at 1955,
1996, and 1999 as a few of the years showing similar weather
characteristics to our current large-scale patterns. In 1955, Hurricanes
Connie and Diane hit the Outer Banks and Carolina Beach in North
Carolina. In 1996, Hurricanes Bertha and Fran made landfall in the
Wilmington/Cape Fear area of North Carolina. During the 1999 hurricane
season, Floyd and Dennis made landfall in September on the North
Carolina coast.
Bastardi will provide more details and insight at the AccuWeather.com
Hurricane Summit on May 12, 2008 in Houston, TX. Attendees at the summit
will include leaders in industries heavily impacted by tropical weather,
Bastardi’s AccuWeather.com EnergyPro® clients, and leading members of
the press. To register for the summit, go to
https://wwwl.accuweather.com/hurr_summit.htm. www.accuweather.com |
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3.
Earthquakes Not Covered
In Standard Insurance Policies |
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(Carson City, NV) – Commissioner of Insurance Alice A. Molasky-Arman
urged Nevadans to prepare for future emergencies, noting the recent
devastating earthquake that struck on February 21, 2008 near Wells,
Nevada and the increased earthquake activity west of Reno.
“It is important to remember that earthquake damage is not covered in a
standard homeowners insurance policy. Talk to your insurance agent to
learn more about an earthquake insurance to help you make an informed
decision whether to obtain earthquake insurance,” said Molasky-Arman.
The Commissioner strongly recommends that residents create or update an
emergency plan to be used in the event of a disaster, such as an
earthquake, fire or flood. The plan could outline an escape route, list
emergency numbers, and other important emergency information. She also
urged residents to inventory their assets, a helpful step to financial
recovery when filing an insurance claim after a major loss.
“Review your insurance policies to make certain you are adequately
protected. Do not let a disaster wipe out your finances and belongings
in seconds,” cautioned Molasky-Arman.
In
an event of an earthquake occurring of sufficient magnitude (ranging
between 3 and 4), many insurers will discontinue offering the coverage
until a specific period of time has elapsed. For instance, the November
15, 1995 earthquake of magnitude 4.6 near Bordertown prevented Nevadans
in the Reno-Sparks and Carson City areas from obtaining earthquake
insurance for up to 60 days.
Earthquake endorsements contain a separate deductible, either as a
percentage of the amount of coverage, or as a specified dollar amount.
Masonry veneer over wood is often excluded from coverage. Typically,
earthquake insurance provides coverage for events related to earth
movement and seismic shocks, including landslides, settlement, mudflow
and the rising, sinking and contracting of earth if the damage sustained
is attributable to an earthquake; however, water damage caused by an
earthquake is usually excluded.
For information and tips on earthquake preparedness, visit the Nevada
Seismological web site at
http://www.seismo.unr.edu. |
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4.
U.S. Geological Survey Says Washington, Oregon Are On
Shaky Ground |
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Home and Business Owners Should Be Prepared and Consider Earthquake
Insurance, Notes I.I.I.
NEW YORK, April 24, 2008 — The revised earthquake-hazard maps released
this week by the U.S. Geological Survey (USGS) provide greater
understanding of the seismically active areas of the country,
particularly the Pacific Northwest, while also highlighting the need for
property owners to consider purchasing earthquake coverage, according to
the Insurance Information Institute (I.I.I.).
“The U.S. Geological Survey found that earthquakes remain a serious
threat in 46 U.S. states. And this was clearly illustrated by last
Friday’s 5.2-magnitude earthquake in southern Illinois, which was felt
in neighboring states,” said Michael Barry, vice president of media
relations for the I.I.I. “Despite that fact, only a very small
percentage of home and business owners outside of California purchase
earthquake insurance.”
The southern Illinois earthquake was the strongest in that part of the
state since November 1968, when a 5.4-magnitude earthquake struck,
according to the USGS.
Earthquakes are not covered under standard homeowners or business
insurance policies. Coverage is usually available for earthquake damage
in the form of a supplemental policy to a home or business insurance
policy. Standard homeowners and business insurance policies may,
however, cover losses from a fire following an earthquake, including
additional living expenses and business interruption coverage. Cars and
other vehicles are covered for earthquake damage under the comprehensive
part of an auto insurance policy.
Earthquake insurance often carries a deductible, generally in the form
of a percentage rather than a dollar amount. Deductibles can range
anywhere from 2 percent to 20 percent of the structure’s replacement
value. This means that if it cost $100,000 to rebuild a home and there
was 2 percent deductible, the policyholder would be responsible for
paying the first $2,000.
In
its 2008 hazard maps, the USGS, a federal agency, found that western
Washington and Oregon were especially vulnerable to intense earthquakes
because of their proximity to an underwater fault line situated about 50
miles offshore of both states. Indeed, Washington ranks second and
Oregon fifth in the U.S. when it comes to purchasing earthquake
insurance, with Washington residents spending almost $118 million for
this coverage in 2006 and Oregonians a little over $52 million,
according to the National Association of Insurance Commissioners (NAIC).
“Nevertheless, those two states are not nearly as prepared as they need
to be,” said Barry, who noted that Washington and Oregon were last hit
by a severe earthquake in 2001, an event registering a 6.8 magnitude on
the Richter scale.
Even in California, where earthquake concerns are a fact of life, only
about 12 percent of homeowners have earthquake insurance, down from 30
percent in 1996. “We want homeowners not just in California and the
Pacific Northwest but in other parts of the country to make sure they
have the right type of coverage should an earthquake hit,” said Barry.
Earthquake insurance premium rates are determined differently by each
insurance company and can vary widely depending on several factors. For
example, older homes generally cost more to insure because their
construction predates many of the engineering advances that have made
newer homes more structurally sound. And wood homes often have lower
premium rates than brick buildings because wood tends to withstand
earthquake stresses better.
Many insurance companies now require that your home be bolted to its
foundation—a practice that wasn’t required by building codes until the
early 1960s. There also may be some homeowners that need to show
additional earthquake mitigation efforts since they are at greater risk
than they were before, noted the I.I.I.
U.S. states and regions are graded on a scale of 1 to 5 for the
likelihood of earthquakes, so the latest update to the USGS maps may
have an impact on how certain insurance companies assess earthquake
risk. Previous USGS surveys on the topic were released in 1996 and 2002.
A
key step in preparing for a disaster is to create and regularly update
an inventory of your personal possessions. To encourage consumers to
create a home inventory, the I.I.I. has developed the popular software
program, Know Your Stuff, which can be downloaded free-of-charge at
www.KnowYourStuff.org.
For more information about earthquake preparedness, go to the Institute
for Business & Home Safety’s DisasterSafety.org Web site.
For more information about earthquake insurance, go to the I.I.I. Web
site.
The I.I.I. is a nonprofit, communications organization supported by the
insurance industry.
Insurance Information Institute
110 William Street
New York, NY 10038
(212) 346-5500 www.iii.org
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5.
TIAA-CREF Publishes
Guide to 403(b) Regulations for Plan Sponsors |
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NEW YORK--(BUSINESS WIRE)--TIAA-CREF, the national financial services
organization and leading provider of retirement services in the
academic, medical and cultural fields, today introduced “403(b) Plan
Fundamentals – Your Guide to Compliance,” a comprehensive guide to
regulatory requirements for 403(b) plans. The company announced the
guide at its 2008 Client Forum in Kissimmee, Florida.
“‘403(b) Plan Fundamentals’ is the latest in a series of tools from
TIAA-CREF to help clients comply with added obligations under the new
403(b) plan rules,” said Nancy Heller, Senior Managing Director and Head
of Institutional Relationships at TIAA-CREF. “TIAA-CREF is tapping years
of 403(b) experience to offer substantive information to help clients
navigate the details of plan operation and satisfy their evolving
obligations.” www.tiaa-cref.org |
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6.
New CFA Study Wrongly
Endorses More Restrictions On Auto Insurers |
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Drivers Benefit from Competition, Not Stifling Regulation, Says I.I.I.
NEW YORK, April 25, 2008 — Competition amongst U.S. auto insurers is
vigorous and growing, providing the nation’s drivers with more choices
than ever before. At the same time, the cost of auto insurance is nearly
flat or falling for most drivers while the number of ways to purchase
insurance and compare prices continues to expand. Efforts to impose
onerous and expensive new regulations, such as California’s Proposition
103, on auto insurers nationally can only raise costs and reduce the
policy options available to drivers, according to the Insurance
Information Institute (I.I.I).
“The Consumer Federation of America’s view that costly new regulations
on auto insurers are needed at a time when Americans can barely afford
to put gas in the tank is incorrect and misguided,” said Dr. Robert
Hartwig, an economist and president of the I.I.I.
Auto insurance prices increased just 0.4 percent in 2007—just
one-seventh the 2.8 percent increase in the overall Consumer Price Index
(CPI) last year and less than 1/100th of the 41 percent increase in
gasoline prices. “Maintaining a healthy auto insurance market and
efficient regulatory structure is vital because both factors stimulate
greater competition amongst insurers. Increased competition promotes
more choices and savings for drivers”, noted Hartwig.
Dr. Hartwig’s comments were in response to yesterday’s Consumer
Federation of America (CFA) report, alleging a variety of problems
relating to price, availability and competition in auto insurance
markets. “The most recent CFA study is another in a series of fatally
flawed analyses whose conclusions are based on the selective use or
omission of facts,” said Hartwig. Details of the flaws in the four major
focal points of analysis performed by the CFA follow.
1.
Rates
The CFA claims that more regulation produces lower rates. The analysis
is flawed for several reasons:
The CFA uses “Average Expenditure” figures from the National Association
of Insurance Commissioners—not premium rates—in its analysis.
Expenditures are actually influenced by many factors other than premium
rate, including decisions by individuals as to what type of vehicle they
drive. For example, during much of the CFA study period (1989-2005),
consumer preferences shifted toward larger, more expensive sports
utility vehicles (SUVs) and higher-end luxury vehicles. The effect was
to push expenditures up even if rates remain unchanged. The CFA’s
decision to focus on expenditures as opposed to premium rate is but one
example of why its assertions are flawed and biased in a way that
systematically overestimates the increase in the cost of auto
insurance.
The CFA’s entire rate exercise and claim that policyholders are paying
too much are without merit and are inconsistent with price trends in the
general economy. Auto insurance has become less expensive in relative
terms over the past two decades. The average expenditure for auto
insurance increased by 50.2 percent nationally between 1989 and 2005
(3.1 percent average annual basis), well below the 55.8 percent increase
in the overall CPI (3.5 percent average annual basis). Relative declines
in the cost of auto insurance have continued into 2008.
The CFA inaccurately ascribes modest increases in auto insurance costs
to the additional regulation placed on insurers in the 1980s. The
reality is that crackdowns on fraud and abuse, safer cars and roads,
driver education and a variety of other factors account for the majority
of the savings accrued over the past 20 years.
2.
Insurer Profitability
The CFA claims that there is a “slight trend towards higher profits in
states with less regulation,” but makes no reference to the fact that
profitability during the study period used for this analysis
(1997-2006), irrespective of the type of regulation, was well below
commonly used benchmarks for profitability—such as return on equity
(ROE)—for the Fortune 500 group of companies. The CFA study consistently
neglects to make appropriate comparisons of profitability, as in the
following examples:
The CFA cites a national average auto insurer profit of 8.1 percent
between 1997 and 2006. In contrast, the average profitability among the
Fortune 500 group of companies (as measured by return on equity) over
the same period was 13.5 percent. By this commonly accepted measure,
auto insurer profitability was generally inadequate during the study
period.
Auto insurers in 49 of the 51 states (including the District of
Columbia) produced average profits lower than that of the Fortune 500
between 1997 and 2006. In other words, only two states (Hawaii and the
District of Columbia) produced profits for auto insurers that exceeded
the Fortune 500 group. The CFA fails to mention this important
comparison.
3. Competition
The CFA claims that states with less regulation tend to be less
competitive. Using the Herfindahl-Hirshman Index (HHI), CFA produces
index values for each state ranging from a low of 603 in Maine to a high
of 1548 for Alaska.1 However, the following important points suggest
that auto insurance markets are, in fact, highly competitive:
· The majority of states (27 out of 50) have HHI values under
1000, which is considered to be competitive by the U.S. Department of
Justice (DOJ). The remaining 23 states have values between 1000 and
1548, which the DOJ considers to be “moderately concentrated.” Most
major U.S. industries fit into this latter category. Only when the HHI
exceeds 1800 does DOJ consider the market to be concentrated.
· In most states, including those with higher HHI values,
consumers can choose from dozens of competing insurers. Illinois, for
example, had an HHI value of 1208 in 2005—among the highest in the
country—yet 80 auto insurers wrote business in the state that year and
the statewide average expenditure on auto insurance was 8.4 percent
below the national average (average expenditure ranked 28th nationally).
Notably, Illinois has no restrictions on the rates insurers can charge
customers. This fact is very damaging to the CFA’s contention that more
rate regulation leads to increased competitiveness.
4. Availability of Insurance
The CFA claims that the use of certain underwriting criteria by
insurers, such as credit-based insurance scores, negatively impacts the
availability of auto insurance. Again, the facts tell a different story.
The reality is that auto insurance is readily available to virtually any
driver in every state. Consider the following measures of availability:
The aggregate market share of state-run residual markets for auto
insurance dwindled from 3.5 percent in 2000 to just 1.3 percent in 2005.
These policies are now being competitively underwritten by private
insurers, even though these residual markets exclusively serve high-risk
drivers.
The recent examples of New Jersey and Massachusetts suggest that
deregulation increases competition in auto insurance markets. In both
instances, regulatory reforms were followed by announcements of rate
cuts and new entrants to the market.
Contrary to the CFA’s assertions, credit scoring has been proven to be a
highly accurate predictor of loss in numerous independent studies,
including two separate studies conducted in 2007 by the Federal Trade
Commission and the Federal Reserve. Banning or severely restricting the
use of credit scoring would not only raise costs for consumers but would
force good drivers to subsidize those with poor driving records.
California—heralded by the CFA as a model state for its regulation—is
one of only a very few states that prohibit the use of credit scoring.
Unfortunately, the ban means that millions of good drivers in the state
are forced to subsidize bad drivers, while California consistently ranks
among the top 20 most expensive states in which to purchase auto
insurance.
“Insurance rating systems—how a company assesses the risk a particular
driver represents—have become more accurate and more equitable through
recent innovations in underwriting technology,” Hartwig said. By looking
at a potential policyholder’s credit score, in conjunction with many
other factors such as their driving record and driving habits, insurers
are able to match with greater precision the premium they charge in the
context of the potential claims they may have to pay on behalf of a
policyholder.
“Competitive marketplaces, safer cars, aggressive fraud-fighting and
innovative underwriting have joined forces to keep down the price of an
essential financial product,” added Hartwig. “This is great news for all
drivers, who are facing higher fuel prices and rising auto repair
costs.”
For more information about auto insurance, go to the I.I.I. Web site.
The I.I.I. is a nonprofit, communications organization supported by the
insurance industry.
Insurance Information Institute
110 William Street
New York, NY 10038
(212) 346-5500 www.iii.org |
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7.
Collins Survey: Medical
Liability Insurers Express Short-Term Optimism, but Long-Term Concern
for Competitive Pressures |
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Collins Takes the Pulse of the Marketplace at Seventh Annual Medical
Liability Insurance Networking Forum
LAS VEGAS--(BUSINESS WIRE)--U.S. medical liability insurers anticipate
their primary rate levels to decrease in 2008, compared with 2007, while
the average frequency and severity of claims sustained by their firms
will remain about the same as last year, according to a survey of
medical liability insurance executives conducted by reinsurance broker
Collins at its seventh annual Medical Liability Insurance Networking
Forum here yesterday.
The Forum is held each year to provide insurance and reinsurance company
officials in the medical liability business segment with an opportunity
to hear presentations on marketplace issues and discuss topics of
current interest. The 2008 Forum attracted 70 representatives of medical
liability insurers from across the country, including executives of
stockholder owned companies, mutual insurers and risk retention groups.
Forty reinsurance company executives also attended the event.
“The survey results indicate, overall, optimism and confidence among
medical liability insurers for the near-term future,” commented Charles
(Chip) Ott, executive vice president and co-leader of the professional
liability practice at Collins. “There are, however, signs of growing
concerns about the competitive marketplace.”
Senior Vice President and Professional Liability Practice Co-Leader
Steve Underdal added that medical liability insurers were split on
whether they would declare a policyholder dividend in 2008, with 45
percent indicating they would and 49 percent indicating they would not.
“This speaks not only to favorable market conditions but to the strong
performance and operations of these companies,” Underdal said. “For
those who said they would pay a dividend, estimates as to the sizes of
those dividends ranged from $5 million to more than $40 million.”
www.collins.com |
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8.
Vulture Subprime Buyers
Ramp Up Purchases |
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Fri Apr 25, 2008 5:41pm EDT
By
Jennifer Ablan and Al Yoon - Analysis
NEW YORK (Reuters) - The allure of rotting mortgage bonds has grown so
strong that Wall Street's vultures have begun picking over their
carcasses -- a signal the credit crisis has entered a crucial stage in
its vicious cycle.
In
the past two months, these intrepid investors have begun betting
billions of dollars on a hunch that mortgage security prices have fallen
enough. It is a risk few have taken for a year or more as the credit
crisis rooted in this very market wreaked havoc in financial markets
around the world.
In
early February, bid lists for bonds backed by middle-quality mortgages
found no takers, even at what were then considered fire-sale prices,
between 75 cents and 80 cents on the dollar. But the following month,
though, Jeffrey Gundlach, chief investment officer at bond manager Trust
Company of the West, began snapping up these same securities at 65 cents
on the dollar during what he calls the "darkest moments for the markets.
"You had a massive, massive supply-demand imbalance that had developed
into a death spiral," Gundlach said of the systemic liquidity squeeze in
early March. "Those securities were really cheap against the
fundamentals, so we went in big and started buying."
WATCH THE VULTURES
The behavior of Gundlach and those like him is important because this
brand of investor -- patient, value scavengers willing to stomach some
initial loss in exchange for huge windfalls when a market turns --
frequently signals that a market is forming a bottom when they are
active.
In
early March, banks and hedge funds stripped of access to credit had to
sell mortgage securities to raise cash for margin calls. That helped
send already panicky U.S. markets into a full-fledged credit freeze.
But the Federal Reserve stepped in and announced that it would lend up
to $200 billion of U.S. Treasury securities to banks for 28-day periods
in return for debt, including a range of mortgage-backed securities.
That broke a month-long sell-off, sending the mortgage securities
rallying strongly.
That set in motion a number of major buyers into the mortgage market.
In
recent months, a number of big players have bought battered mortgage
securities, including Marathon Asset Management, an $11.5 billion hedge
fund manager specializing in distressed assets; Trust Company of the
West, with $160 billion with assets under management, and Metropolitan
West Asset Management, with $27 billion in assets, as well as UK-based
investment boutique, Thames River.
PRIME TIME FOR SUBPRIME BONDS
"We're not finding any problems finding opportunity," said Tad Rivelle,
chief investment officer at Metropolitan West Asset Management in Los
Angeles.
The Alt-A mortgage securities, as well as the ones purchased by Gundlach,
which are loans whose quality rests in the vast space between subprime
and prime, and subprime mortgage-backed securities "are as rich an
opportunity set as the corporate market was back in 2002 when the bubble
burst in telecom," Rivelle added.
Bruce Richards, chief executive officer of Marathon Asset Management in
New York, told Reuters recently that his firm has purchased more than $1
billion par value in residential real estate loans. Richards also said
that he expects Marathon to buy another $1 billion or more this year.
Thames River Capital fund manager Ken Kinsey-Quick has moved long into
some battered subprime assets after shorting the sector last year.
Kinsey-Quick, who runs around $2.3 billion in funds of hedge funds, said
he had invested in the securities at the start of April because he
thinks they are cheap.
For his part, Rivelle of MetWest will be looking at the Alt-A market,
but for now he's been a purchaser of the safest part of a subprime bond
that typically gets paid off in full, even in foreclosure.
"Even if there was a substantial and rapid rise in foreclosures and
delinquencies in these deals, the rub is the servicer sells the property
and generates some amount of cash in the process," Rivelle said.
This cash flow gets directed to these 'AAA' securities, causing them to
be repaid at an accelerated rate, he added.
As
for those bonds that Gundlach bought at 65 cents on the dollar: "They
looked great at 65 and at 80, they look kind of fully priced against the
fundamentals."
WAITING FOR THE FORCED SELLING
Truth be told, risks to investing now rather than later persist.
Downgrades of bonds backed by subprime loans by Moody's Investors
Service, Standard & Poor's and Fitch Ratings continue apace as
expectations of falling home prices have led rating companies to boost
expectations on delinquencies.
Subprime loan default rates have more than doubled to 25 percent this
year, and will climb above 30 percent by December as a worsening job
market adds stress to homeowners already faced with unaffordable
mortgages, according to Friedman Billings Ramsey Inc. research.
Credit Suisse on Tuesday boosted its forecast of subprime foreclosures
over the next two years to 1.39 million from its October estimate of
730,000.
"We're certainly looking (at distressed assets), though we think that a
lot more downgrades are coming that will result in substantial supply
from forced sellers," said Julian Mann, a manager of mortgage- and other
asset-backed bonds at First Pacific Advisors in Los Angeles, California.
Gundlach doesn't doubt that, saying, "The fundamentals in housing are
still terrible. You better believe there will be downgrades coming."
At
that point, he'll be looking to buy again, he said.
(Additional reporting by Dane Hamilton in New York and Laurence Fletcher
in London)
(Reporting by Jennifer Ablan and Al Yoon in New York; Editing by Jan
Paschal)
©
Thomson Reuters 2008 All rights reserved |
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9.
Aviva rules itself out
of RBS Insurance bidding |
|
LONDON (Reuters) - Britain's largest general insurer Aviva (AV.L:
) has ruled itself out of the running for the
insurance arm of Royal Bank of Scotland (RBS.L: ), as speculation intensifies over the list of possible suitors
for the unit.
RBS Insurance, which includes Churchill and Direct Line, is the UK's
second-largest general insurer and the largest car insurer, underwriting
a third of British motor premiums.
Aviva, however, dismissed talk of its interest in all or part of the
unit, valued by analysts and bankers at up to 8 billion pounds ($15.8
billion) based on UK sector multiples.
"We have consistently said our priority is to maximize the value of
existing businesses," Aviva Chief Executive Andrew Moss said. "It's very
hard to see any compelling reason for us to go down that route and,
frankly, I think value creation would be difficult for us."
The size of the acquisition, he told analysts on Friday, would make a
deal "very hard".
Aviva had been named by analysts and industry bankers, but most expect a
buyer to come from the ranks of European players such as Allianz (ALVG.DE:
), Zurich Financial Services (ZURN.VX: ), Generali (GASI.MI: ), Axa (AXAF.PA:
), Mapfre (MAP.MC: ) --
or even U.S. giant AIG (AIG.N: ) or U.S.
investor Warren Buffett.
RBS Insurance's former boss, Annette Court, joined Zurich Financial in
late 2006.
Merrill Lynch and Goldman Sachs have been lined up to run the auction, a
source familiar with the situation said.
(Reporting by Clara Ferreira-Marques; Additional reporting by Simon
Challis; Editing by David Hulmes)
©
Thomson Reuters 2008 All rights reserved |
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|
10.
ValueOptions® To Manage
Behavioral Health Care in Newly Awarded TennCare Contract with Volunteer
State Health Plan |
|
NORFOLK, Va.--(BUSINESS WIRE)--ValueOptions®, Inc., the nation’s
largest independent behavioral health care company, will work in
collaboration with Volunteer State Health Plan to oversee behavioral
health care for the East and West regions of Tennessee in two TennCare
contracts awarded to Volunteer State Health Plan (VSHP), a wholly-owned
subsidiary for BlueCross BlueShield of Tennessee. TennCare is
Tennessee’s Medicaid program that provides health coverage to eligible
adults, children and families.
The contracts to manage and deliver integrated physical and behavioral
health services to nearly 373,000 TennCare enrollees go into effect on
November 1, 2008, in the West region and on January 1, 2009, in the East
region. The contracts run for three years with two optional one-year
extensions. www.ValueOptions.com
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|
11.
AIG To Provide
Complementary AIG AmbassadorSM Concierge and Travel Assistance Services
to Attendees of the RIMS 2008 Annual Conference & Exhibition |
|
NEW YORK--(BUSINESS WIRE)--AIG announced it will provide AIG
AmbassadorSM’s concierge and travel assistance services free of charge
to all attendees of the RIMS 2008 Annual Conference & Exhibition in San
Diego, CA.
AIG Ambassador is a highly flexible business travel accident insurance
product combined with a broad portfolio of concierge and travel
assistance services designed to meet the needs of business travelers.
Attendees of RIMS 2008 will have the ability to access a variety of
services on a 24-hour basis, including business entertainment
recommendations and reservations, identity theft support, ground
transportation assistance and help with obtaining sporting and local
event tickets - all from a single, toll-free telephone number.
“We’re delighted to be able to extend AIG Ambassador to attendees at
this year’s RIMS Annual Conference,” said Steve Gold, President and
Chief Executive Officer, AIG Domestic Accident & Health. “This
complimentary sampling of AIG Ambassador’s concierge and travel
assistance services should help provide attendees with a successful and
stress-free experience in San Diego.”
RIMS 2008 commences on April 27th and will run until May 1st, 2008.
Attendees will be able to access the AIG Ambassador service starting
today through May 10.
For U.S.-based multinationals, the AIG Global Ambassador program is
available as part of the AIG PassportSM service. AIG Global Ambassador
includes Global Business Travel Accident Insurance and features the same
travel solutions and services as AIG Ambassador.
For more information on AIG Ambassador contact 877-AIG-4114 or e-mail us
at askus@aig.com. |
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|
12.
2008 Best's Financial
Suite – Reinsurance Released, Tracks Insurers Ceding or Assuming Risk |
|
OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has released the 2008
Best's Financial Suite – Reinsurance, which includes Best’s Schedule F
and Best’s Schedule S. These CD-ROM databases include reinsurance data
from the 2007 financial statements of thousands of property/casualty and
life/health insurance companies, respectively.
Both products now include BestLink® for Excel®, A.M. Best’s
award-winning, online data-retrieval tool, which enables users to
download the latest financial and rating data for these schedules
directly into their spreadsheets from the A.M. Best Web site. Financial
data for Schedule F and Schedule S was made available via BestLink for
Excel on March 24, 2008. Subscribers can use BestLink for Excel to
identify all reinsurers to which a company is ceding business, and all
insurers from which a reinsurer is assuming business.
For more information on Best's Schedule F or Best's Schedule S visit
www.ambest.com/sales/schedulef or
www.ambest.com/sales/schedules. To obtain information on BestLink
for Excel, visit
www.ambest.com/sales/bestlinkforexcel.pdf. |
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|
13.
Direct Group and
CognitiveDATA Form Strategic Alliance To Offer Services That Reduce
Direct Marketing Campaign Costs And Increase ROI |
|
Companies Offer New Category of ‘Campaign Optimization’ Services That
Address Market Needs for Postal Efficiencies, Data Hygiene And
Environmentally Responsible Direct Marketing
PENNINGTON, N.J.--(BUSINESS WIRE)--Direct Group, a fully integrated
direct marketing solutions provider, announced today that it has forged
a multi-year strategic alliance with CognitiveDATA, Inc., the fastest
growing marketing technology company in the United States and the leader
in developing innovative, proprietary data quality technology. Together,
the two companies will offer what truly represents a new category of
technology-driven services in the direct marketing industry – campaign
optimization – which will increase response rates at least 1 to 2
percent on every campaign and reduce costs related to both Undeliverable
as Addressed (UAA) mail and limitations of the National Change of
Address (NCOA) system.
As
general economic and postal rate pressures continue to mount, the
services powerfully address urgent needs in the direct mail marketplace
for increased results and reduced costs, delivering postal efficiencies
through uniquely effective data hygiene. At the same time, the campaign
optimization services also provide a compelling way for direct marketers
to be environmentally responsible by helping to address issues related
to UAA mail. www.directgroup.net
About SV Investment Partners
SV
Investment Partners, formerly known as Schroder Ventures US, is a New
York-based private equity investment firm and is the equity partner of
Direct Group. The firm specializes in buyouts and buildups of business
services companies in the U.S. middle market in partnership with
management. For more information about the company, visit
www.svip.com.
About CognitiveDATA, Inc.
CognitiveDATA is a marketing technology company recognized as the
thought leader of data quality technology. The company recently
celebrated its six year anniversary by being named to the Inc. 500 list
as the 208th fastest growing private company in the United States with a
four-year growth rate in excess of 1,000 percent. The company currently
has over 300 direct national marketing companies using its NCDM Award
winning marketing response technology. The privately held corporation is
headquartered in Little Rock, Ark., with sales operations in Dallas,
Chicago, and New York. For more information, contact CognitiveDATA at
866-243-7883 or visit
www.cognitivedata.com.
|
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|
14.
NFCC And MSN Money To
Release Consumer Survey Results On Capitol Hill |
|
2008 Survey Findings Reveal Serious Gaps in American Financial Literacy
Silver Spring, MD - The National Foundation for Credit Counseling (NFCC)
and MSN Money will release the results of their 2008 Consumer Financial
Literacy Survey during a Congressional Briefing on Capitol Hill next
week at the conclusion of Financial Literacy Month.
WHO: The National Foundation for Credit Counseling and MSN Money
WHAT: Congressional Briefing to release results of the 2008 Consumer
Financial Literacy Survey
WHERE: Capitol Hill, Cannon House Office Building, Room 122
Washington, DC
WHEN: April 29, 2008, 2:00 pm. to 3:00 p.m.
SPEAKERS: Susan C. Keating, President and CEO, NFCC
Richard Jenkins, Editor in Chief, MSN Money
The purpose of this second annual survey, conducted by Princeton Survey
Research Associates International, is to identify what Americans know
about their finances and to assess their overall financial health.
www.nfcc.org |
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|
15.
New Investment
Strategies for Insurance Linked Securities |
|
HAMILTON, Bermuda, April 24 /PRNewswire/ -- Insurance-linked
securities offer investors both a high potential for growth and a
non-correlation with the stock market. Some have even dubbed it "the
ideal asset class" and "the holy grail of investments."
Despite coming
off its biggest growth year in the brief 10 year history of the market,
analysts and economists are still projecting significant growth in the
industry. Now that the market has established itself as a high yield,
low beta risk hedge, investors are flooding to the market increasing the
viability for new products and raising the demand for education.
Join
Finance IQ on July 16th - 18th at the Fairmont Southampton in Bermuda as
we examine in detail the latest deals and product structures, investment
and hedging strategies, and tools for investing in life insurance
securitizations, catastrophe and other P&C securitizations, as well as
the growing life settlement sector.
Peter Wasserman,
Program Director, Finance IQ,
Phone: 646-502-3245,
E-mail: peter.wasserman@iqpc.com,
http://www.iqpc.com/us/ILS |
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16.
NAIC International
Internship Program Expands To Include New Countries: Thailand, Serbia
and Saudi Arabia First-time Participants
|
|
KANSAS CITY, Mo. (April 24, 2008) — The National Association of
Insurance Commissioners (NAIC) this week welcomed nine interns from
Egypt, Serbia, Thailand and Saudi Arabia to the NAIC Executive
Headquarters for its spring 2008 International Internship Program.
The seven-week program — which is conducted twice a year — includes a
week in Kansas City for orientation and five weeks in a host state for
more specialized training. Host states for the spring program include
Alabama, California, Colorado, Nebraska, New York and Washington. The
program concludes with attendance at the NAIC Summer National Meeting in
San Francisco, May 31 - June 2, followed by closing ceremonies in
Washington, D.C., June 4 - 6.
www.naic.org/press_home.htm
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|
17.
CompPartners Marks 10
Years In Business With New Medicare Set-Asides Service |
|
IRVINE, CALIF. (April 24, 2008) — CompPartners, a workers’ compensation
managed care organization, marked its 10th anniversary by adding
Medicare Set-Aside services to its offerings for workers’ compensation
payers.
www.comppartners.com
|
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18.
INSURANCE NEWSCAST "Pictures Of The Day" -- Sponsored By:
|
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|
 |
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Inflation could become new No.1 enemy for
investors. U.S. dollar bills are displayed in Toronto March 26, 2008.
REUTERS/Mark Blinch
Read Entire Story!!! |
 |
TOKYO (Reuters) - American Danica Patrick became
the first woman to win a race in the Indy Racing League (IRL) on
Sunday, powering to victory in the Indy Japan 300 race.
The 26-year-old won by almost six seconds from Brazilian Helio
Castroneves after the race favourites were forced to pit for
fuel in the closing laps in Motegi's Twin Ring Circuit.
IndyCar car driver Danica Patrick arrives to the premiere of
"Baby Mama," the first film of the 2008 Tribeca Film Festival in
New York April 23, 2008. REUTERS/Lucas Jackson |
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No majority for Mugabe party in Zimbabwe recount.
A soldier keeps watch over the crowd during President Robert Mugabe's
tour of the Zimbabwe International Trade Fair in the country's second
city of Bulawayo April 25, 2008. REUTERS/Howard Burditt
Read Entire Story!!! |
 |
NY police cleared in 50-bullet wedding day
shooting. Protesters march along Sutphin Blvd after the three detectives
in the shooting death of Sean Bell were found not guilty in New York
City, April 25, 2008. The detectives were found not guilty on Friday in
the shooting death of unarmed black man Bell killed in a hail of 50
bullets on his wedding day, prompting angry reactions and a federal
review of the case. REUTERS/Joshua Lott
Read Entire Story!!! |
 |
Shark kills man in rare fatal attack in
California. A sign posted by local authorities in Cardiff, California
April 26, 2008 warns against entering the water following a fatal shark
attack yesterday in Solana Beach. Authorities are warning people to stay
out of the water along an eight mile stretch of coastline. REUTERS/Mike
Blake (UNITED STATES)
Read Entire Story!!! |
 |
Prisoners from the Cebu Provincial Detention and
Rehabilitation Center (CCDRC) hold a picture of Mahatma Gandhi as they
dance to Bonnie Tyler's "I Need a Hero" at the prison in Cebu City,
south of Manila April 26, 2008. The prisoners dancing exercises were
made famous after a video of them was posted on the internet last year.
REUTERS/Darren Whiteside |
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British soldiers cover themselves as helicopters
land at Camp Armadillo in Helmand Province April 25, 2008. REUTERS/Omar
Sobhani |
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An Afghan Special Forces policeman walks through
a poppy field as he searches for Taliban fighters in the village of
Sanjaray in Zhari district early April 26, 2008. REUTERS/Goran Tomasevic
(AFGHANISTAN) |
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A girl lays flowers at a monument dedicated to
the victims of Chernobyl nuclear disaster in Kiev, April 26, 2008.
REUTERS/Konstantin Chernichkin (UKRAINE) |
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A couple of Canada Geese accompany their newly
hatched goslings through a shopping center parking lot in Sterling,
Virginia, April 25, 2008. Canada Geese, famous for their life-long
mating, live throughout most of North America. REUTERS/Hyungwon Kang |
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