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John Stewart

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The Joint Committee of the European Supervisory Authorities (Joint Committee) has published today its first Report on Risks and Vulnerabilities in the European Union’s (EU) Financial System.

The publication identifies the key cross-sectoral risks facing the EU’s financial markets and system, and sets out recommendations on how these can be addressed through coordinated policy and supervisory action by policy-makers, the ESAs and Member States.

The report is the first of what will be a regular publication by the Joint Committee on cross-sectoral financial market risks in the EU.

Gabriel Bernardino, Chairman of EIOPA and current Chairman of the Joint Committee, said: “Today’s first report by the three European Supervisory Authorities has identified some key cross-sectoral risks facing the EU’s financial system including, in particular, the risk of fragmentation, over-reliance on collateral, concerns with regard to the quality of financial institutions’ assets, and the loss of confidence in institutions and benchmarks. This cross-sectoral work provides EU policy-makers and regulators with an overall view of the risks they face and moves us away from a narrow sectoral approach, and the inherent risk of failing to see the big picture”.

Risks

The report has identified the following risks the EU financial system is facing:

  1. Weak macroeconomic outlook and consequently a deterioration for financial institutions’ asset quality and profitability;
  2. Low interest rate environment;
  3. Risk of further fragmentation on the single market ;
  4. Increased reliance on collateral;
  5. Lack of confidence in financial institutions’ balance sheet valuations and risk disclosure; and
  6. Loss of confidence in financial benchmarks.

Recommendations

In light of the findings in the report, the Joint Committee believes that only a concerted response by policy-makers and EU Member States can restore the confidence and trust that has been eroded during the financial crisis.

The Joint Committee urges the EU political leaders to press ahead with the establishment of Banking Union, including the Single Supervisory Mechanism, and bank resolution schemes. In their turn, the ESAs remain committed to fostering supervisory convergence, amongst others, through a strong role in supervisory colleges and through the development of both the EU-wide Single Rulebook and Supervisory Handbooks.

During the crisis, the ESAs have successfully facilitated on-going open communication among national authorities within supervisory colleges and ESA financial stability groups. This was only possible because of the trust that has been built up in recent years with the establishment and coordination of these groups.

Note on the developments in Cyprus

The cut-off date for this report was 13 March 2013. Therefore, recent events in Cyprus are not discussed in the publication. The ESAs have closely monitored the situation in Cyprus as it has developed. The winding-down of Laiki Bank and the restructuring of Bank of Cyprus will lead to losses throughout the financial sector in Cyprus, but the risks of direct international contagion seem to be limited. So far, market conditions and deposit dynamics have remained relatively stable. Recent events manifest the risk of further fragmentation of the single market and underscore the need for closer coordination and integration, including in supervisory colleges, and through full implementation of the banking union.

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Unique, Gallagher Heath’s specialist insurance scheme for people living with pre-existing medical conditions, has teamed up with Beating Bowel Cancer to provide much-needed access to comprehensive insurance covers and help further the charity’s vital work.

With one in every four people in the UK touched by bowel cancer, either directly or via a family member or friend, Beating Bowel Cancer is dedicated to providing emotional and practical support to the 41 000 people diagnosed each year with the condition, as well as their families, carers and supporters.

Through its partnership with Unique, Beating Bowel Cancer can now help all those living with the condition to visit loved ones abroad or enjoy holidays, by offering access to travel insurance that has previously been difficult to obtain.

Customers can choose between Platinum and Gold policies to ensure their cover most closely matches their individual needs, with the partnership extending to home and motor insurance. For every policy sold, Unique will also donate a third of its commission to Beating Bowel Cancer at no extra cost to the policyholder.

Mark Flannagan, Chief Executive of Beating Bowel Cancer, said: “Many bowel cancer patients told us they had struggled to get insurance, particularly travel insurance, because of their condition. This means that patients weren’t able to visit loved ones abroad or take a much-needed holiday.

 “We’re pleased to be partnering with Unique, which will open doors for bowel cancer patients and allow them to make these trips. This partnership will also help to us to continue our vital work supporting bowel cancer patients and their families.”

Unique’s key travel cover benefits include:

– No referrals for medical screening, making it quick and easy to purchase cover;

– No upper age limits on single trip policies – particularly important when over 7 in 10 cases of bowel cancer are diagnosed in people aged 65 and over;

– Replacement of lost or damaged medication, up to a limit of £300;

– All members of a travelling party can be covered under the same policy, even if they do not have any medical conditions to declare.

Diane Caplehorn, Gallagher Heath’s account director for Beating Bowel Cancer, explained:

“We have worked in close partnership with Beating Bowel Cancer to ensure that our Unique products offer the widest, most relevant cover at the most competitive price, backed up by an understanding and sympathetic team.

“Our specialists are on hand to provide advice and support, benefitting as they do from unrivalled years of experience in providing bespoke insurance to individuals with pre-existing medical conditions in partnership with a diverse range of medical charities.

“I am also delighted that we will be making a donation from every policy, helping the charity fund its mission to improve public awareness and increase the rate of early diagnosis – which is vital when more than 90% of those diagnosed with bowel cancer can be successfully treated provided it is caught early.”

Bowel cancer is the third most common form of cancer in the UK and the second biggest killer but at least one in four people are completely unaware of the conditions or its symptoms. Every year 41 000 people are diagnosed with bowel cancer in the UK, more than 70% of which are aged 65 or over, but upwards of 90% of cases can be successfully treated provided the condition is diagnosed early.

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As of April 1, the British insurance company put an end to writing professional indemnity insurance for small and medium-sized enterprises as part of its efforts to “take tough action” on lines of business that are failing to generate profitable returns.

The professional indemnity department at Aviva will now focus on corporate clients and companies that earn fees greater than £10 million a year, PostOnline reported March 27. David Hall, managing director for Aviva corporate and specialty risk, told the news source: “This has been a very strong and very tough call but these lines have been running uneconomically for some years. We have made improvements but there are some [professional indemnity] sub-segments were we can’t make money.

SNL Financial LC

“We have been destroying capital and that is not sustainable.”

The managing director added that Aviva will focus on firms with strong risk management ethics and multilines in future. “We want to be a whole-of-account underwriter,” he said.

Aviva is in a state of flux. With new CEO Mark Wilson at the helm, the company is looking to refocus its business to drag it back to being an attractive investment case. For the full year 2012, Aviva reported a total loss after tax of £3.05 billion, after the company took a £3.3 billion write-down on the disposal of its U.S. business. Group combined ratio of general insurance and health sat at 97% for the full year.

While the company is making progress on its strategy of exiting 16 noncore segments and turning around a further 27, its focus is still unclear. “Looking at the group combined operating ratio, in my view it is barely acceptable,” Investec analyst Kevin Ryan told SNL.

“Therefore there must be little areas like professional indemnity where it’s just not happening for Aviva.”

The lack of focus, however, prevents Aviva from making itself an attractive investment case, he added, noting that Aviva entered the SME market barely two years ago. “I suspect that many in the insurance market might grumble that Aviva provides capacity and then withdraws it, and then changes its mind again,” Ryan said. “I think investors and the market need to see and understand exactly how Aviva is setting out its stall.”

Aviva’s issue lies in the plethora of businesses it is involved in.

While the insurer has toiled away at disposing of Delta Lloyd NV and Aseguradora Valenciana SA de Seguros y Reaseguros — known as Aseval — as well as units in Sri Lanka, Malaysia and Russia, it still has operations in Canada, Ireland, Spain, France and Italy.

Meanwhile, its British core market remains fiercely competitive in general and life insurance — not to mention weighed down with increasingly tough regulatory standards, such as the retail distribution review and gender-neutral pricing.

“I guess it is a question of looking at combined ratio,” said Canaccord Genuity analyst Ben Cohen. “Possibly as a rule, anything with a combined ratio of 98% or more is going to be a focus for them.”

Cohen highlighted U.K. commercial motor, where large losses helped push the overall U.K. commercial combined ratio to 104%.

“In terms of property and casualty, Canada looks fine, but the U.K. is more of an issue with a 98% combined ratio — it needs to be pushed down to the mid-90s really, given where interest rates are.” he said.

“In life, the margins in most areas look alright — however Italy is underperforming, and France looks marginal, so it will depend on what happens with volumes there.”

While Spain appears to be “on target,” one might question how the sale of the Bankia distribution partnership may affect the business, Cohen added, also noting that the introduction of the RDR may also impact life figures for the U.K., which currently looks stable.

While trimming down the business is arguably Aviva’s best plan of action, there could also be consequences. In exiting several lines of business, the company runs the risk of making it more difficult to secure higher-margin deals with brokers.

“As Aviva selectively exits the lines which are lower-margin, I would think the chances of getting higher-margin deals would go down massively,” said Cohen.

This will also be a tougher challenge for the insurer without the leadership of Janice Deakin, the Aviva intermediary and partnership director who left the company earlier in April to join Gallagher International as U.K. commercial head. According to the Insurance Times, the move has been regarded as a “sad loss” for Aviva and brokers by the market.

“It’s a question of how good Aviva is at being selective [in exiting businesses],” said Cohen. “I think we need the passage of time to see how the strategy will all work together.”

But answers are not expected in the immediate future.

“I would have thought this refocus is going to take at least half a year, given that the new CEO started in January,” said Ryan.

“With a group the size of Aviva and the issues it has on its balance sheet there is an awful lot to look at. I would expect to see more of a focus to be apparent, certainly at a high level, by mid-year.”

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The tourism sector in Cape Verde has been growing at a rapid pace. The number of visitors is expected to reach 500,000 by 2015, and just over one million by 2020. In light of this, investors from the UK, Ireland and the US have invested heavily in tourism related infrastructure development projects in the country.

High retention rate may expose insurers’ capital positions during economically challenging times.

Insurers generally invest more in reinsurance in order to avoid financial losses during economically challenging times. In Cape Verde insurance providers tend to retain a large proportion of their revenues and cede less to reinsurance providers. For example, the retention rate of life insurance providers increased from 92.2% in 2008 to 93.1% in 2012. Such a high retention rate reflects the insurance companies’ in-house expertise and high earnings – however it could expose their capital positions during economically challenging times.

The insurance industry in Cape Verde remained unaffected by the global financial crisis and grew in terms of written premium at a CAGR of 4.2% during 2008-2012. The industry’s growth was further supported by the significant growth registered in the life insurance segment, which grew at a CAGR of 27.9% from 2008-2012. According to the Timetric report, the overall insurance industry in Cape Verde is projected to grow at a CAGR of 5.2% until 2017.

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According to catastrophe modeling firm AIR Worldwide a M6.3 earthquake struck 55 miles southeast of Bandar Bushehr near Iran’s southwest coast, however insurance losses are expected to be minimal. According to the United States Geological Survey (USGS), the earthquake occurred at 3:22 p.m. local time (11:52:50 UTC) and struck at a depth of 10 kilometers (6 miles). The main shock was followed by six aftershocks, according to the Iran Seismological Centre, the strongest of which was M5.3.

According to AIR, with its epicenter located at 28.5° North latitude and 51.59° East longitude, the event rattled windows and caused chandeliers to shake in Bandar Bushehr; there were reports of buildings shaking in other Gulf countries, including Bahrain, United Arab Emirates, and Qatar. Workers in Qatar were reported to have been evacuated from high-rise buildings as a precautionary measure.

Notably, shaking was felt at Iran’s sole nuclear power station, about 18 km (11 miles) south of Bandar Bushehr, but operations were reported to be unaffected. The Russian company that built the nuclear reactor claims that the situation is normal there: employees continue to work and radiation is within normal levels.

Two helicopters were sent to survey the damage in the affected area. Traditional residential structures in Iran are typically of adobe construction, which exhibits very poor seismic performance. Significant structural damage and collapse is possible under strong ground shaking. In 2006, the M6.6 Bam, Iran earthquake destroyed some 50,000 homes.

According to AIR, the seismotectonics of southern Iran are dominated by the convergence between Arabian and Eurasian plates. The M6.3 earthquake that struck southern Iran today occurred as a result of northeast-southwest oriented thrust-type motion in the shallow crust of the Arabian plate. Today’s event was an intraplate event, occurring almost 300 km south of the main plate boundary, but it will be difficult to identify the fault that caused it, as this event likely did not break the surface.

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Fitch Ratings has affirmed German life insurer Lebensversicherung von 1871 a.G. Muenchen’s (LV 1871) Insurer Financial Strength (IFS) rating at ‘A+’ with a Stable Outlook.

KEY RATING DRIVERS

The rating reflects LV 1871’s strong market position in German disability insurance and its strong capitalisation at end-2011. Fitch’s view on the company’s capitalisation is based both on the level of the regulatory solvency ratio and the agency’s own risk-adjusted assessment. Fitch expects LV 1871 to have maintained in 2012 both the market position and the strong capitalisation.

Fitch also views positively the high credit quality of LV 1871’s fixed-interest portfolio and robust new business figures. These factors are offset by the life insurer’s relatively small size and lack of geographical and line of business diversification.

Due to the large proportion of disability business underwritten by LV 1871, the company is well positioned to mitigate the impact of the current low interest rate environment. The German life insurance sector remains dominated by guaranteed interest rate (GIR) policies. On average, the industry needs to achieve an investment return slightly above 3% to meet GIR payments. In a sustained low interest rate environment, LV 1871’s technical earnings from its disability business would significantly mitigate any potential challenges in meeting GIR payments, which Fitch views positively.

It is likely that LV 1871 group will have achieved a small profit of EUR2m-EUR3m in its 2012 consolidated accounts after it reported a small loss of EUR0.7m in 2011. Fitch expects LV 1871 to continue improving consolidated bottom-line profitability.

At end-2011, LV 1871’s regulatory solvency margin was 168%, excluding unrealised capital gains on real estate investments. Including these gains, Fitch estimates LV 1871’s solvency margin would have been well above 180% at end-2011. Fitch expects LV 1871 to maintain its level of capitalisation at end-2012 and in 2013.

In 2011, the consolidated LV 1871 group reported gross written premiums (GWP) of EUR735.5m. Fitch expects the consolidated group to have achieved GWP growth of more than 10% in 2012, well above the market average. Fitch believes that LV 1871 will have achieved premium income of more than EUR850m in 2012.

Fitch expects that LV 1871 will have achieved a net investment return rate of 4.6% in 2012 (2011: 4.0%), in line with the agency’s expectation for the German life sector average. In 2011, LV 1871’s acquisition expense ratio improved to 4.8% and its administration expense ratio was stable at 2.5%. Fitch anticipates that LV 1871 will maintain solid expense ratios in 2012.

RATING SENSITIVITIES

Fitch views an upgrade of the rating as unlikely in the near term due to LV 1871’s low geographical and line of business diversification and hence its vulnerability to external effects.

Key rating drivers for a downgrade include a decline in LV 1871’s strong franchise in the disability line as evidenced, for example, by declining new business levels over a period of time, the regulatory solvency margin falling significantly below 170% or a significant decline in unrealised capital gains.

LV 1871 is a Munich-based mutual life insurer that directly owns 100% of the insurance companies Delta Direkt Lebensversicherung AG, TRIAS Versicherung AG, LV 1871 Pensionsfonds AG and LV 1871 Private Assurance AG. The consolidated group had total assets of EUR5.1bn at end-2011. LV 1871 distributes its products through a network of around 9,200 distribution agreements with sales organisations, IFAs, and banks.

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Retail banks are still hesitating to fully integrate social media into their digital marketing strategies, according to a new report from global analysts Ovum. Asia-Pacific and American retail banks are spearheading approaches to social media engagement, believing it to be disruptor of the way in which they interact with their customers. However, European counterparts are lagging far behind, but Ovum expects this change significantly in the next three years as social media becomes a significant channel for retail banks.

Banks must begin to fully integrate social media into their customer communications strategies, evolving their use of various platforms such as Twitter and Facebook beyond the outmoded “broadcast” model – which seeks to only manage institutions’ reputations – to use social media as a true customer engagement tool. In doing so, retail banks must understand and implement relevant risk and compliance requirements to ensure data security and privacy.

Though typically conservative, banks are looking to adopt strategies that will allow them to catch up with current trends and demographics. In addition, as the economic environment is improving and the demand for financial services is increasing, they need to focus on enhancing customer experience, which will translate into increased sales and more effective servicing.

Jaroslaw Knapik, senior analyst within Ovum’s Financial Services Technology practice, commented: “Customer needs are changing – this fact is uncontestable. It is now almost impossible to ignore social media. It transcends geographic boundaries, encouraging interaction and collaboration among disparate users united by a common cause, belief, issue, or interest. It provides a powerful marketing platform for understanding and engaging with customers, allowing banks to improve sales and profitability.”

He continued: “European banks in particular find themselves at the back of an underperforming class when it comes to social media engagement, voicing concerns over data security, ensuring data privacy, as well as the potential reputational damage that can come from a mismanaged communication.”

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Racing Victoria Ltd (RVL) was established in 2001 to provide independent governance of thoroughbred racing in Victoria as well as promoting and managing the conduct of the racing of thoroughbred horses in Victoria. Importantly, in late 2009, the RVL and its associated clubs decided to transfer their workers’ compensation to Xchanging. What precipitated this move? At that time, there were generally only two outcomes for claims – a full return to work or more often total long-term incapacity.

With this in mind, for the last three years, Xchanging worked closely with the RVL to implement a performance improvement strategy which provided $146,120 in funding with the unique intention of supplying and installing lightweight plastic running rails across all major racing clubs in Victoria. These rails were designed with the sole aim of replacing the aluminium running rails, which have been a major safety issue in the racing industry for many years.

The initiative was a world first, and has already had a huge human impact for jockeys across race tracks in Victoria. Darren Gauci, for example, is a jockey who has had big success on the race track, placing second in three Melbourne Cups. However, last year, Gauci’s horse crashed through the plastic rail at Mornington. He sustained a compressed fracture in his lower vertebrae, several broken ribs and a bruised aorta. Most significantly, Doctors told Darren that if the aluminium rails had still been in place, the accident could have been fatal. Though the injury was still severe, Darren returned to riding in April this year – just nine months after the injury.

The practical aspects of the initiative are just as illuminating. Premium rates have dropped significantly, resulting in a substantial reduction in premium. From the 2010/11 financial year to 2012/13, RVL’s premium has reduced by $775,000 and the provision of comprehensive training has seen a reduction in the number of standard claims lodged by RVL.

However, money saving initiate aside, there is also an unseen emotional aspect to these claims. RVL and Xchanging face great difficulty in convincing jockeys to go back to work in jobs that aren’t purely racing (racing is often the only career they have ever known or wanted and many left school at 14 for an apprenticeship and have no transferable skills or literacy). Recognising that, the treating doctor plays a vital role in encouraging workers to attempt retraining and alternative options. RVL employed Dr Gary Zimmerman as their Medical Consultant who treats the jockeys, and also consults with their specialists to ensure the treatment they are receiving is going to ensure a sustainable return to work outcome. Before being permitted to return to race riding, jockeys must obtain a medical clearance from Dr Zimmerman to prevent further injury.

By working with the RVL, Xchanging has managed to implement a shift in thinking – that retraining and finding alternative employment is a far better outcome for both the jockey and RVL. The real measures of success though are the workers who have managed to return to meaningful employment, though they have suffered terrible career-ending injuries.

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York International, a subsidiary of U.S.-based York Risk Services Group and a part of York Specialized Loss Adjusting, has appointed Alistair Jacob as Managing Director.

York International, which is based in London, provides specialist home foreign and international loss adjusting services for Lloyd’s and London market as well as regional insurers and reinsurers

Jacob will be responsible for the strategic business development across all territories outside of North America. He will be building on York International’s recent expansion into Latin America and the Caribbean following the acquisition of Axis International Adjusters.  In particular, he will focus on developing the business’ international footprint in conjunction with BC Johnson Associates, a York subsidiary that specializes in the energy markets. Jacob will be based in York International’s head office in London.

Jacob has over 25 years’ experience in the loss adjusting sector and expertise in the development and delivery of services for the Lloyd’s and London markets and regional insurers and reinsurers in territories including Latin America and the Caribbean.  He has also held roles within Axis International Adjusters and a global claims operation.

Commenting on Jacob’s appointment, Danny Miller, EVP, York Risk Services Group, and President of the York Specialized Loss Adjusting, said, “Alistair brings with him extensive loss adjusting and business development expertise, and is ideally suited to drive our expansion plans. While his focus will be growing our international platform, he will also assist York and BC Johnson Associates with their growth plans related to the London and international markets.”

Commenting on York International’s plans, Jacob said, “We see clear strategic opportunities to build a strong international presence, taking full advantage of the expanded range of services and geographical spread that now exists within the York companies.  Having direct access to York’s U.S. capabilities and energy team will add depth and strength to the international services that we can offer our clients.”

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New research from Affinion International and the Direct Marketing Association has revealed significant differences in UK consumers’ habits and the banking, insurance and added value products they hold.

The newly released research, conducted as part of the seventh annual Financial Services Tracker, shows:

– Women are more likely to take out gadget insurance than men (55% vs 45%)

– Women are also more likely than men to hold breakdown cover (53% vs 47%)

– Men are more likely than women to use a credit management product (57% vs 43%)

The Tracker also revealed some surprising regional differences in the approach UK consumers take to protecting their possessions.

– Nationally, 44% of adults hold motor breakdown cover, yet only 33% of those living in the North East of England do. People in the South East are the most likely (48%) to take out breakdown cover

– People in Northern Ireland are particularly cautious when travelling – 42% hold travel insurance, against a national average of 27%

– One in five Londoners (21%) holds mobile phone insurance against a national average of 14%

– East Anglian’s are best equipped to deal with a broken tablet or e-reader, 7% hold gadget insurance, something only 2% of those living in the West Country do, with the national average 5%

In addition to looking at gender and regional differences, the survey also examined who consumers hold their products with. Although 50% of people hold some form of ‘core’ secondary product (such as a savings account) with their main bank and 25% of people have a cash ISA with their main bank , the major institutions have ground to make up to specialist providers in other areas. Only 37% of people hold a ‘non-core’ product, such as travel insurance, through their main bank, showing that consumers are now well used to shopping around for what they feel is the best deal.

Commenting on the findings, Giles Desforges, Affinion’s Senior Vice President for Northern Europe, said: “The research highlights clear variations in the importance that consumers in the UK place on insuring key aspects of their lives, whether that’s their car, their smartphone, or their belongings on holiday”. He continued: “It also tells us that it is vital for banks to offer products that customers want and need, because consumers who hold added value products, such as travel insurance, with their banks are most likely to recommend that institution to their friends and family.”

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Commercial insurance underwriting agency, APC, has launched a London market broking team to place risks for regional brokers that cannot be facilitated under its regular binding authorities.

APC London Markets will place a wide range of risks including property, casualty, professional indemnity and directors & officers with both Lloyd’s and London company market insurers.  Geographically, the team will cover the majority of UK, European and International risk locations.

Mr Ian Ashworth leads up the team and joins APC from Holman’s where he was a senior broker. The London market broking team also includes Tom Murray, previously divisional director at Bowood and Mark Russell who moves internally from APC Underwriting. Together they combine over 70 years of experience in the London market.

They will be based at APC’s offices on Leadenhall Street, London.

APC achieved Lloyd’s broker accreditation in September 2009, but has not to date used the facility to place risks for its regional brokers.

APC director, Ian Russell said: “While our binders enable us to place a wide range of risks immediately, we have seen a growing demand from our brokers that would like to use us for other business. By launching APC London Markets our supporting brokers will now have access to a one stop shop for securing cover for all aspects of their client’s operation, with a very experienced team to back it up. We have enhanced our-line trading platform to accept submissions in less than a minute, the London Market team will do the rest.”

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Recent large and world-class gas discoveries in Mozambique and Tanzania, with potential for more to come, and commercial oil flows in Kenya, show the potential of the enormous exploration frontiers of Eastern Africa, both onshore and offshore. The impact of this resurgence is rebalancing the Africa oil-gas industry landscape into a wider continental oil and gas/LNG game, with potentially global consequences.

The 4th Eastern Africa Oil, Gas & Energy Conference 2013 gives new insight in the opportunities, acreage, key players and corporate and government strategies in this region. The Conference is hosted annually by Global Pacific & Partners and will be held from June 18th to 20th in the InterContinental Hotel in Nairobi, Kenya, including the pre-Conference 4th Eastern Africa Strategy Briefing by Dr Duncan Clarke, Africa’s foremost strategist in the upstream. The meeting highlights presentations of CEO’s, government officials, Ministers and key executives from within leading corporate and state oil companies.

Eastern Africa has been transformed into a fast-emerging oil and gas frontier region. The on- and offshore potential includes exclusive economic zones, deepwater opportunities and ultra-deep plays. The 15 nation states in the region are diverse in scale, resource potential, contract terms, and venture-types and in regard to exploration cycles and hydrocarbon discoveries.

Increasing numbers of companies have entered open acreage and bid rounds, and more blocks have been leased than ever before, with more drilling commitments concluded. Foreign state-owned companies like CNOOC and PTTEP have invested in Eastern Africa while Super-Majors (Total, Exxon Mobil, Chevron, Shell and BP) have shown renewed interest, and Independents from around the world now abound.

During the 4th Eastern Africa Conference key Speakers will reveal the exploration potential, future opportunities and growth in countries like Kenya, Somalia, Ethiopia, DRC, the Seychelles, Tanzania, Madagascar, Burundi, Rwanda, and regional oil giant Uganda.

“The new discoveries will add substantial net wealth to the Eastern Africa’s littoral states where they are located, and induce higher economic growth rates and regional development,” Dr Duncan Clarke, Chairman of Global Pacific & Partners, says.

Prior to the conference the 4th Eastern Africa Strategy Briefing together with the celebrated 51st PetroAfricanus Dinner, will be held at June 18th. During the Strategy Briefing Dr Duncan Clarke, author of several historiography and economics books about Africa’s oil future, provides key insights on the corporate upstream oil and gas game, governments and state oil firms and licensing agency strategies.

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Ascent Underwriting, cyber risks Managing General Agent (MGA) led by Amlin capacity, is to ring-fence cyber breach notification costs separately from its main insurance policy limit to protect small and mid-market clients.

Launched this week, the new extension covers the potentially considerable cost of complying with privacy legislation by notifying individuals who have been affected by a data breach.

Ring-fencing these expenses away from the main policy limit will ensure the full original limit remains available to deal with other issues such as third party actions in the event of the breach escalating, regulatory fines and other covered clauses.

Ascent’s clients in the UK, Europe, the US and Canada will also benefit from the MGA’s new partnership with identity management and data risk management solutions provider, IDT911. The specialist company will provide clients with pre and post risk services including a 24/7 hotline to access experts consulting on proactive best practices.  Reactively, IDT 911 will provide assistance following a security breach to facilitate a swift claims service.

Ascent already provides comprehensive solutions for professional and non-tangible risks and continues to develop niche products in the fast moving cyber risk environment.

David Umbers, Director of Ascent said: “The notification costs following a cyber breach can run into hundreds of thousands of pounds and potentially burn though a considerable proportion of the main policy limit.  By ring-fencing these costs and introducing expert support we can help to prevent this undesirable scenario and preserve the main limit to protect the client from the impact of wider civil actions and regulatory fines.

“Client demand for emerging cyber risk continues to grow.  While the market already has a number of cyber risk solutions aimed at major companies, we see a substantial demand and need for a broad and innovative product and solution to cater for the smaller end of the market.  We are excited to release this new extension as we continue to explore and improve our offerings and services.”

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Impact Forecasting, the catastrophe model development center of excellence at Aon Benfield, releases the latest edition of its monthly Global Catastrophe Recap report, which reviews the natural disaster perils that occurred worldwide during March 2013.

The report reveals that late-season winter weather affected much of Europe throughout the month, bringing an extended period of heavy snowfall, sub-freezing temperatures, high winds, ice and flooding. Among the hardest-hit areas were France, Germany and Ukraine, where snow accumulations topped 50 centimeters (19.7 inches).

At least 30 fatalities were reported across the continent and early total economic loss estimates stood at EUR1.4 billion (USD1.8 billion), including EUR706 million (USD914 million) for France alone. More than 100,000 insurance claims were filed in France, with auto claims surpassing EUR101 million (USD131 million).

Heavy snowfall engulfed northern sections of Japan between the end of February and early March. At least nine storm-related fatalities were recorded as snow depths up to 5.5 meters (16 feet) were seen in Hokkaido and northern Honshu, which resulted in local governments spending more than JPY1.36 billion (USD14.2 million) in clean-up costs.

Multiple winter storms also affected central and eastern sections of the United States, as an early March weather system killed five people and brought heavy snow and coastal flooding along the Eastern Seaboard. Another system at the end of the month brought nearly 20 inches (50 centimeters) of snow from the Rockies to the East Coast. Total combined economic losses from both systems were cited as less than USD100 million.

Steve Jakubowski, President of Impact Forecasting, said: “The run of frequent winter weather we witnessed in January and February lingered across many of the major economies in the Northern Hemisphere in the month of March. However, the level of losses sustained has not been overwhelming for the industry despite the volume of events during the first quarter of 2013. Impact Forecasting continues to develop its winter storm catastrophe models for multiple territories, in order to help our clients plan for any potential losses they may face.”

A strong derecho event (defined as a long-lived, intense squall line) left widespread hail and wind damage throughout the U.S. Southeast. Mississippi was amongst the hardest-hit states, where at least 18 counties sustained damage. The state insurance department estimated that as many as 50,000 claims would be filed. Total economic losses throughout the region exceeded USD250 million, while insurance losses reached approximately USD150 million.

Preliminary data from the U.S. Storm Prediction Center indicate that only 17 tornadoes touched down during the month, representing the fewest number of March tornadoes in the U.S. since 1978, when 17 tornado touchdowns were also recorded.

Meanwhile, severe weather prevailed in Asia, highlighted by a strong tornado that killed at least 35 people in Bangladesh’s Brahmanbaria district.

In China, an extended stretch of hail, damaging winds and isolated tornadoes killed 29 people, damaged or destroyed 331,250 homes, and resulted in an economic loss estimated at USD443 million.

Several days of hail also left heavy damage in central and northern Vietnam.

Elsewhere, an F3 tornado struck Australia’s northeast Victoria and southwest New South Wales during the month, injuring at least 25 people and causing economic losses estimated at AUD20 million (USD21 million).

Three people were killed in the Azores as high winds and torrential rains caused widespread damage on the islands of Terceira and Sao Miguel, with total economic damages listed at EUR35 million (USD45 million).

Heavy rainfall led to flooding and landslides across parts of South America. At least 30 people were killed in Brazil’s southeastern state of Rio de Janeiro after 12 rivers overflowed their banks. In Colombia, 11,200 families were forced from their homes after the Tamana, Habita, Baudo and Ingara rivers overflowed.

Flooding and landslides were also recorded in Namibia, Mauritius, Indonesia, and China.

A magnitude-5.2 earthquake struck China’s Yunnan Province, injuring at least 30 people. The tremor destroyed 2,108 homes and damaged an additional 83,434. Total economic losses were listed at CNY350 million (USD56 million).

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Bluefin Insurance Group has appointed George Boden as Non-executive Chairman of the Board.  Mr Boden has been a Non-executive director of Bluefin Insurance Group and took up his new role on 6 March 2013.    

George was appointed to the Board of Bluefin Insurance Group as a Non-executive Director in December 2011.  Prior to this appointment he was a member of the Bluefin Management Board.  Mr Boden has taken up the role of Non-executive Chairman following the resignation of Ian Brimecome upon his appointment as Chairman of the Board of AXA UK.

Mr Boden brings a wealth of experience to the role and is also Chairman of Centrix Insurance Holdings Limited, the parent company of Lonmar Global Risks Limited, the international insurance broker and Chairman of Compre Group Limited, the European legacy insurance specialist.

Ian Brimecome, retiring Chairman of Bluefin Insurance Group, said: “It has been a rewarding and enjoyable experience to Chair the Board of Bluefin for the last four years.  Bluefin is a leading broking business with a positive and exciting future and I am delighted to pass on the Chairmanship to George who is a very successful entrepreneur in the insurance market and has a huge amount of practical experience.”

Stuart Reid, Chief Executive of Bluefin Insurance said: “Ian has been an exemplary Chairman of Bluefin and has chaired the board successfully, mainly during a period of economic uncertainty. I would like to thank him for his service and wish him well in his new role as Chairman of the AXA UK Board.  George has played a significant role in Bluefin following the acquisition of SBJ in 2008 and we are looking forward to working with him in his new role as Chairman. His deep knowledge and wealth of experience will continue to benefit Bluefin in the coming years.”

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Insurance Australia Group Limited (IAG) Chairman, Mr Brian Schwartz, announced that Dr Nora Scheinkestel had been appointed to the IAG Board as a non-executive director.

Dr Scheinkestel has extensive experience in corporate transactions including equity and debt raising, corporate restructuring and mergers and acquisitions and has served on a number of boards for the past 20 years. She has worked in listed, private and public companies in sectors including financial services, utilities, telecommunications and mining.

She currently holds non-executive director positions with Telstra, Pacific Brands and Orica, and will be retiring from the AMP Board at the next AGM in line with AMP’s tenure policy. Previously held directorships include Mayne Group, IOOF Funds Management, North and Newcrest Mining.

Dr Scheinkestel’s executive career has included senior roles with CRA, Macquarie Bank, Chase AMP and Deutsche Bank, focussed on international and project financing.

Mr Schwartz said Dr Scheinkestel brings to the IAG Board enormous experience and a deep understanding of organisational opportunities and risks.

“Nora is an outstanding addition to the IAG Board. She has gained impressive business experience from a number of industries and in a range of senior roles with leading organisations. I look forward to her contribution,” he said.

Dr Scheinkestel will commence in the role from 1 July 2013.

Dr Scheinkestel is an Associate Professor at the Melbourne Business School at Melbourne University.

Her background is as an executive responsible for the development and financing of major projects in Australasia and South East Asia. She currently consults in areas such as corporate governance, strategy and finance and serves as a non-executive director with a number of high profile organisations.

Dr Scheinkestel is a member of the Takeovers Panel and a fellow of the Australian Institute of Company Directors. In 2003, she was awarded a centenary medal for services to Australian society in business leadership.

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A survey of UK businesses undertaken by QBE shows that more than two thirds of businesses, 67%, now have a plan to protect their company and its data against a cyber attack, compared to 53% in 2012. This is the second year that QBE has asked businesses about their cyber crime risk management procedures and is now seeing an uptick in awareness and active steps to prevent online fraud and crime by UK companies. Alongside these positive developments, 32% of UK companies still have no plan for either protecting themselves against or responding to a cyber attack – although this is an improvement from the 46% with no plan 12 months ago.

While effective risk management is key to protecting businesses from the threat posed by online criminals, there is also a critical role to be played by comprehensive insurance to cover costs and losses should the worst happen. The survey showed that currently more than half of UK businesses, 52%, have no insurance policy against fraudulent or malicious online activity against them. 40% of UK businesses, however, have responded to this growing problem by buying some form of insurance cover against cyber crime.

Dramatic sector differences on cyber crime

Perhaps unsurprisingly, the financial services sector is one of the best prepared and protected against a cyber attack, with 94% of respondents having a risk management plan and 69% having insurance cover to protect them against online crime. This contrasts sharply with the building and construction industry where only 44% have a plan and just over a quarter, 26% have insurance.

David Harries, Director of Casualty International and Professional and Financial Lines, QBE European Operations: “It is reassuring that there is growing awareness amongst UK businesses about cyber crime. I would urge all organisations to consider cyber insurance as soon as possible and for those with existing cover to check that they are comprehensively protected against all types of online crime and data breaches and no elements are omitted or excluded.”

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The European Insurance and Occupational Pensions Authority (EIOPA) launched a public consultation on Guidelines related to the preparation for Solvency II.

The purpose of the Guidelines is to support both National Competent Authorities (NCA’s) and undertakings in their preparation for the Solvency II requirements.

The Guidelines cover the areas that EIOPA considers fundamental to ensure effective preparation for Solvency II: system of governance, including risk management; forward looking assessment of the undertaking’s own risk (based on the Own Risk and Solvency Assessment (ORSA) principles); submission of information to National Competent Authorities (NCA’s); pre-application of internal models.

It is up to NCAs to determine how to comply with EIOPA’s Guidelines by incorporating them into their regulatory or supervisory framework in an appropriate manner.

NCAs are expected to ensure that insurance companies and groups take active steps towards implementing the relevant aspects of the regulatory framework addressed in these Guidelines, so that when Solvency II is applicable, its requirements can be fully complied with.

However, EIOPA makes it clear that the Guidelines should be applied in a proportionate way and in particular with regard to the burden on small and medium size undertakings.

The public consultation will end on 19 June 2013. EIOPA intends to subsequently publish the final Guidelines in the autumn of this year. This should allow NCAs to put in place certain important aspects of the preparation for Solvency II starting on 1 January 2014.

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The Foreign Office road safety campaign aims to help British nationals drive safely abroad and stay on the right side of foreign road laws.

The campaign has been developed in response to Foreign Office staff based overseas reporting a high number of road traffic incidents affecting British tourists and expats in popular destinations, such as Thailand, Australia and Spain.

Road conditions, driving standards and laws vary widely and some countries experience much higher rates of road traffic accidents and fatalities than the UK. For example, in Thailand, a country with 50,000 British residents and over 870,0001 British visitors per year, there were 68,582 road traffic incidents resulting in 9,205 deaths involving both Thai residents and tourists in 2011.2 In contrast 1,901 people were killed in road accidents in the UK in 20113.

After deaths from natural causes, road traffic deaths are the most common cause of death for British nationals in Thailand and cause a high number of hospitalisations. According to Foreign Office staff in Thailand, the majority of road traffic accidents involve motorcycles and scooters, although serious accidents also occur with other vehicles. For instance, in the past year a number of British nationals were involved in accidents whilst travelling by overnight coach.

Mark Kent, Her Majesty’s Ambassador to the Kingdom of Thailand, said:

British nationals using the roads in Thailand should bear in mind that road laws and driving customs here are different from those in the UK and road conditions, driving standards and road traffic regulations can vary.

Road traffic accidents can have a profound effect on both those individuals involved and their families. Accidents do occur and not all tragedies are avoidable, but the outcome could be very different with many lives being saved and critical injuries reduced if people adopted the same safety precautions abroad that they would naturally take at home.

I have visited hospitals here and heard from doctors how many deaths could have been avoided by following the law and taking the appropriate precautions, such as safety helmets. You should check that your travel insurance specifically covers you for driving a scooter or any other vehicle abroad.

Closer to home, many countries have unusual road laws which Britons might like to be aware of before heading off on holiday this Easter. For example:

– France – all drivers are required to carry a breathalyser

– Scandinavia – it is illegal to drive without headlights, even in daylight

– Spain – if you need to wear glasses, you are required to carry an additional pair when driving

– Germany – it is illegal to drive without Winter tyres at certain times of the year

– Belarus – it is illegal to drive a dirty car

– Spain – in some cities, cars must be parked on different sides of the road according to the day of the week

– Serbia – compulsory equipment to be held by driver includes a tow bar and 3m rope

– Russia – it is forbidden to pick up hitchhikers

As part of the campaign, the Foreign Office is launching an online tool to give people access to specific road safety advice for the country they will be driving in. Click here to see the road safety tool

For up-to-date travel advice on-the-go, the Foreign Office is encouraging people to sign up to FCO travel advice Facebook and FCO travel advice Twitter feeds to ensure they are informed of the latest travel advice.

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Argo International (‘Argo’), the Lloyd’s insurer and member of Argo Group, announces the appointment of James McPartland as an underwriter in its professional indemnity team, he takes up his new position with immediate effect and will report to Ryan Barnes, Class Underwriter.

James has over a decade of experience as a professional indemnity underwriter in the Lloyd’s market. He joins Argo from Barbican Syndicate 1955, where as senior underwriter he was responsible for the consistent growth of the PI account. Prior to this, James spent six years as a professional indemnity underwriter with Hiscox.

Paul Kneafsey, Active Underwriter, said ‘I am very pleased to welcome James to Argo. He is a  skilled underwriter with extensive experience in the professional indemnity market, his appointment will reinforce our capabilities in this sector and ensure that we are well positioned to continue to develop an area of the business where we see significant opportunities for growth.’

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