Jun
8
Starr to Buy Major Stake in Dazhong Insurance
Filed Under Chartis, China, China insurance, Insurance Company | 2 Comments
Starr International, a Bermuda-based private insurance holding company, has acquired a 20 percent stake in the Chinese property insurer Dazhong Insurance Co Ltd.
This week, Starr was finally approved by the China Insurance Regulatory Commission (CIRC) to be a strategic equity investor in Dazhong Insurance and acquired an additional 286.5 million ordinary shares in the company. Neither Dazhong Insurance nor Starr disclosed any further financial details on the transaction.
The CIRC’s approval now enables Starr International, through its subsidiary division, Starr Insurance & Reinsurance, to hold a considerable equity position in Dazhong Insurance and become its single largest shareholder.
Maurice Greenberg, chairman and CEO of Starr International, remarked at the signing ceremony that China has been experiencing incredible growth, which in turn leads to an increasing demand for various insurance products and services.
Together, the companies will now look to leverage Starr International’s expertise in insurance product development and distribution to broaden Dazhong’s services and expand within China’s lucrative market.
“We recognize Dazhong as a company with great potential – one that is positioned to emerge as one of the most significant insurance organizations in the region,” Mr. Greenberg added.
Dazhong Insurance was established by 26 individual insurers in 1995, with a registered capital of CNY1.15 billion (US$177 million). The conglomerate provides property insurance and reinsurance in Shanghai and in the provinces of Anhui, Fujian, Jiangsu, Shandong, and Zhejiang. According to the CIRC, Dazhong Insurance had reported CNY463 million (US$71.3 million) in total original premium income for the first quarter of 2011.
The CIRC is also responsible for designating which localities foreign insurance players can operate in. This month, Chartis Insurance Company China, a wholly-owned subsidiary of Chartis, was granted approval to establish a Jiangsu branch in the city of Nanjing. Chartis China now has five branches operating out of Shanghai, Guangdong, Shenzhen, Beijing and Jiangsu, entrenching its position as the largest foreign property and casualty (P&C) insurer in China.
The CIRC further noted that in the first four months of the year, the Shanghai insurance market alone produced total original premium income exceeding CNY24.82 billion (US$3.8 billion). Of that total, property insurance accounted for CNY6.79 billion (US$1.05 billion); life insurance CNY16.29 billion (US$2.5billion); accident insurance CNY517 million (US$79 million); and health insurance CNY1.23 billion (US$189 million).
The Chinese insurance market has been seen as a lucrative investment opportunity for many large multinational insurance companies as well as investors from the financial-services sector. Industry analysts predict China and India will become the main drivers of global insurance premium growth, as persistent economic growth in these large countries will boost the size and purchasing power of their middle class.
Total written premiums in China’s insurance market reached CNY1,452.8 billion (US$221.4 billion) in 2010, a year on year increase of 30.4%.The acceleration of urbanization, increases in per capita income, an improved social security system, enhanced distribution reforms and service level optimization coupled with stronger insurance awareness, are all positive factors contributing to the brisk development of the domestic Chinese insurance industry. As interest rates rise, profitability for insurance companies will also see further improvement.
While China is technically open to foreign insurers, they are faced with more restrictions and a more active regulatory authority than in many other countries. Foreign insurance companies have normally found success in China through investing and operating as joint venture partners with another major local insurance conglomerate.
Some major current multinational Chinese insurance company joint ventures include the Sun Life Everbright and the Aviva-Cofco partnerships. Other notable foreign insurers with partnering agreements in China include Zurich and Generali, with associations involving both New China Life Insurance and China National Petroleum Corporation respectively.
Merger and acquisition activity throughout the rest of Asia is set to maintain significant growth in 2011 due to stronger investor confidence in the market. Insurance business growth in Asia is expected to outperform that of other more mature markets, with India, Indonesia and China leading the way.
Insurance Companies Mentioned
Chartis
A leading property-casualty and general insurance company, Chartis has over 45 million policyholders in 160 countries worldwide. With more than 90 years experience in the insurance industry, and a range of progressive products, Chartis aims to help clients comprehensively manage risk.
Dazhong Insurance
Dazhong Insurance Co., Ltd. provides insurance products and wealth management services. It operates in the delta region of Yangtze River and in east China. The company was founded in 1995 and is based in Shanghai, China. Dazhong Insurance is a subsidiary of China Life Insurance Co., Ltd.
Starr Insurance
Starr Insurance, comprised of CV Starr & Co and Starr International USA, underwrites aviation, marine, energy, property and excess casualty insurance, including risks with international exposures. The company targets industrial, commercial, retail and government entity risks globally.
Feb
25
AIG Reports Improved Results
Filed Under AIG, Chartis, MetLife | 6 Comments
The American International Group (AIG) reported net income of US$11.2 billion for the fourth quarter period in 2010, which ended on 31st December 2010. The bailed out insurer’s income included the sale of assets as it restructures its business in order to repay the loan received from the US government in 2008 following the global collapse of financial markets.
The New York based insurer’s full year earnings for 2010 totaled US$7.8 billion, reversing the loss in 2009 which amounted to US$10.9 billion. AIG’s fourth quarter 2010 earnings of US$11.2 billion compares with the loss of US$8.87 billion in the same period last year.
However, after disregarding income generated from the sale of AIG assets in 2010, the insurer had an operating loss of US$2.2 billion from its global operations, compared to an operating loss of US$1.3 billion last year.
The troubled insurer received a total of US$182 billion from the US federal government to rescue the insurer from the brink of collapse in 2008, after the US sub-prime mortgage crisis triggered a domino effect in the world financial markets. Since receiving the US government bailout, AIG has been restructuring global operations, which has included selling off international insurance subsidiaries, in order to generate capital to repay the US taxpayer.
Robert H. Benmosche, AIG’s President and Chief Executive Officer, said: “We completed several key restructuring milestones in the quarter and we remain focused on long-term growth and building value at our ongoing insurance operations and other businesses.”
Included in AIG’s fourth quarter earnings was a net charge of US$4.2 billion for AIG’s property insurance arm Chartis. The injection of capital was necessary to strengthen Chartis’ provision against losses as the insurer is expected to face stiff competition in this segment of business. Chartis worldwide net premiums written amounted to US$7.6 billion in the last quarter of 2010.
AIG has sought to restructure the specialist property insurance business with Chartis by rationalizing activities and concentrating on less volatile markets, seeking to write more business with higher margins.
Part of AIG’s restructuring programme saw the insurer sell its Alico subsidiary for US$16.2 billion to US rival Metlife, with the cash from the sale – included in the fourth quarter 2010 results – going towards repaying the US Federal Reserve Bank.
AIG also negotiated the sale of its Japanese insurance arms AIG Star Life Insurance and AIG Edison Life Insurance to another US insurance rival, Prudential Financial, for approximately US$4.8 billion; the sale being completed on the 1st February 2011. The proceeds from the sale will be used to make further repayments to the US government.
Meanwhile in Taiwan, AIG had a bid for its Nan Shan Life company from a Hong Kong led consortium, Premium Financial, rejected in September 2010. This was on the grounds that it did not meet local regulatory criteria. However, in January 2011 a US$2.16 billion cash bid from Taiwan-based Ruen Chen was accepted by AIG for the Nan Shan operation, with the funds again being used to help repay the outstanding US government loan.
Speaking on the future of AIG, Mr. Benmosche said: “In 2011, as we emerge from our restructuring, AIG will focus on growing our already strong businesses domestically and around the world, risk and capital management, strategic asset management, and cost savings throughout the organization.”
AIG’s restructuring of its global insurance network has meant that it has divested business operations in foreign and domestic ventures which did not offer significant returns for the New York based insurer. However, while AIG continues its streamlining, it has retained its profitable Asian arm – the American International Assurance Group (AIA) – which is the leading life insurer in the dynamic Asian region.
AIA is seen as AIG’s jewel in the crown, with the latest company report reflecting the importance this market holds for the group as full year profits jumped by 54 percent in 2010 to reach a total of US$2.7 billion. In 2010, AIA was subject to a US$ 35.5 billion takeover bid from the major UK insurer Prudential; this was finally dropped by the British insurer because shareholders were not prepared to underwrite the initial bid price and a lower bid was not acceptable by AIG. This subsequently lead to AIA being floated on the Hong Kong Stock Exchange in October 2010 in one of Hong Kong’s largest initial public offerings (IPOs), which generated US$17.9 billion. As a result of the better than expected trading results for the year ending 30th November 2010, shares in AIA valued the company at US$32.6 billion at the close of trading on the Hong Kong stock exchange on the 24th February 2011.
Although AIG, along with other insurers, is facing challenging trading conditions in 2011 – particularly in the mature markets in the USA and Europe – with the effects of government imposed austerity measures likely to impact on disposable incomes, the group is well placed in the emerging growth market which exists in the Asia-Pacific region through its AIA business.
The AIA operation is now well placed to exploit the growth potential in the emerging markets in China, Thailand, Vietnam, Indonesia and Malaysia and is expected to make a significant contribution to AIG’s financial results in 2011.
Insurance companies mentioned:
AIG
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
AIA
The AIA Group is a leading life insurance organisation in Asia Pacific that traces its roots in the region back more than 90 years. It provides individuals and businesses with products and services for life insurance, retirement planning, accident and health insurance as well as wealth management solutions. Through an extensive network of more than 320,000 agents and approximately 23,500 employees across 15 geographical markets, the AIA Group serves the customers of over 23 million in-force policies in the region. The AIA Group has branch offices, subsidiaries and affiliates located in jurisdictions including Australia, Brunei, China, Hong Kong, India, Indonesia, Macau, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.
Chartis
A leading property-casualty and general insurance company, Chartis has over 45 million policyholders in 160 countries worldwide. With more than 90 years experience in the insurance industry, and a range of progressive products, Chartis aims to help clients comprehensively manage risk
Prudential Financial Inc
Prudential Financial Inc. is a financial services leader, with approximately US$750 billion of assets under management as at September 2010. Prudential Financial operates in the United States, Europe, Latin American and Asia, with approximately 42,000 employees worldwide
Prudential
Prudential has been in the insurance and financial services business since 1848. Today they operate throughout the UK, US and Asia offering international health insurance and retirement planning services, supported by 27,000 employees worldwide.
MetLife
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Nan Shan
Nan Shan Life Insurance Company, Ltd. was established in July 1963. After its restructuring in January 1970, Mr. K.K. Tse, the then Chairman of American International Underwriters, became the first Chairman of the company. In forty years, Nan Shan has become a super insurance company with the most professional management, the best operational performance, and a solid financial foundation. Its agency force has been recognized as the best in Taiwan’s life insurance industry.
Feb
11
Chartis Insurance Bids For Full Control of Fuji Fire & Marine
Filed Under AIG, Chartis, Insurance Company | 5 Comments
American International Group’s (AIG) general insurance arm Chartis has announced that it has made a cash tender offer to complete a full take-over of Fuji Fire & Marine Insurance of Japan.
Currently Chartis holds a controlling stake of 54.66 percent in Fuji Fire & Marine, which it acquired in 2010. Chartis will spend approximately US$ 571 million (¥47 billion) to acquire 100 percent control of the Japan based insurer. Chartis has offered a purchase price of US$1.7 (¥ 146) per-share, representing a near 30 percent premium over Fuji Fire & Marine closing price at the end of share trading on the 9th February 2011.
The directors of Fuji Fire & Marine support the tender offer as it will reinforce the insurers operations in Japan. Shareholders of Fuji Fire and Marine – the Orix Corporation – an international financial service company, which currently holds a 15.53 percent share in the insurer, are expected to offer their stake in the Japanese based insurer.
Following the tender offer, Fuji Fire & Marine, will be delisted from the Tokyo Stock Exchange. The tender offer is scheduled to commence from Monday the 14th February and run through to March the 24th 2011. The transaction will benefit both parties, with Chartis consolidating its position in Japan – the second largest insurance market in the world. Fuji Fire and Marine will strengthen its presence through Chartis’ global network, financial capacity and product range.
Jose A. Hernandez, CEO of Chartis Far East Holdings K.K. Said: “Including Fuji Fire and Marine as a full member of the Chartis group is a natural progression of the excellent partnership we have developed over the past ten years, most recently as Fuji Fire and Marine’s majority shareholder. Our expanded distribution platform enables us to accelerate our delivery of innovative products and superior services through our loyal agency force to a broader range of Japanese customers.”
The offer is still subject to regulatory approval from the Financial Service Agency in Japan. When the deal is completed Chartis expects to operate under the Fuji Fire and Marine brand in Japan.
The AIG group recently retreated from the Japanese life insurance market by selling AIG Star Life Insurance and AIG Edison Life Insurance to US insurance rival Prudential Financial for US$4.8 billion (¥437.7 billion). AIG, the US-based insurer, will now increase its presence in the Japanese insurance market through the Chartis brand and the full acquisition of Fuji Fire and Marine – a Japanese insurance company which was established in 1918 and now has a national distribution network.
AIG has been going through a period of transition since the world financial markets experienced a recession during 2007, which subsequently lead to the global insurer requiring a US$182 billion (¥15 trillion) bailout package from the US federal government in 2008. Since then AIG has been restructuring its global operations, which has seen them sell-off the Alico brand to Metlife and place Nan Shan its Taiwanese insurance arm up-for-sale – in addition to the recent sale of Star Life and Edison Life to Prudential Financial.
As AIG works towards streamlining its international operations through divestment – as part of a process to repay the US government for the bailout loan – the insurance company has been keen to consolidate its business in core insurance markets that produce substantial written premiums for the group. Along with AIA – AIG’s lucrative insurance arm in Asia – Chartis has become a pivotal general insurance business for the group with a global reach that generated operating income of US$1.1 billion (¥ 98 billion) in the third quarter of 2010.
Chartis has emerged as one of the world’s leading property-casualty and general insurers with more than 45 million clients worldwide. The insurer offers personal line products including: travel, automotive, home and accident care. In business line insurance, Chartis offers: risk solution, special risk cover, travel, accident and healthcare.
AIG has reported that it will boost Chartis’ reserves following the credit rating agency – Fitch Rating – downgrade of the property and casualty insurers status from a +A to A. The grade was made as Fitch believes the insurer may not be able to underwrite strong results as in previous years.
Insurance companies mentioned:
Chartis
A leading property-casualty and general insurance company, Chartis has over 45 million policyholders in 160 countries worldwide. With more than 90 years experience in the insurance industry, and a range of progressive products, Chartis aims to help clients comprehensively manage risk.
Fuji Fire and Marine
The Fuji Fire and Marine Insurance Company Limited was founded in 1918 and through its subsidiaries offers life and non-life insurance products and services for individuals and small and medium-sized companies across Japan.
AIG
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
Prudential Financial Inc
Prudential Financial Inc. is a financial services leader, with approximately US$750 billion of assets under management as at September 2010. Prudential Financial operates in the United States, Europe, Latin American and Asia, with approximately 42,000 employees worldwide
Aug
25
Chartis – AIU to Offer Double Indemnity After Philippines Hostage Crisis
Filed Under Chartis, Health Insurance, Hong Kong, Medical Insurance, Personal Accident, Philippines | 7 Comments
It has emerged that Chartis Insurance, formerly American International Underwriters, was the underwriter for the travel insurance policies held by 4 of the victims in the recent Philippines hostage crisis. Tour operator, Hong Thai Travel, has promised to provide additional compensation to the remaining families not holding travel insurance coverage. The incident on Monday, August 23, left 8 Hong Kong tourists dead, and spurred mass outrage across the South-East Asian region.
Hong Thai Travel has promised HK$ 320,000 (US$ 41,025) in compensation to each victim’s family. Of the total compensation being paid out by the tour operator, HK$ 300,000 (US$ 38,461) is travel accident compensation, while the remaining HK$ 20,000 (US$ 2,564) is a death gratuity.
However, of the families of the 8 victims receiving the Hong Thai Travel compensation package, 4 families stand to receive an additional HK$ 1,000,000 (US$ 128,205) due to the fact that they had purchased extra travel insurance coverage from Chartis Insurance, Hong Thai Travel’s official insurance partner.
Chartis Vice President, Wong Fu-Tat, said “the level of compensation for victims has been doubled, from HK$500,000 to HK$1 million, under insurance covering accidents caused by public transport.” As such, the insurance company had labeled the situation as “special.” Additionally, Chartis has said that “Special Arrangements” were in place to help the survivors of the tragedy, with the company providing up to HK$ 1,000,000 in Philippines Medical Benefits, and covering further medical treatment in Hong Kong up to HK$ 100,000 (US$ 12,820).
Under a typical Chartis/AIU travel policy, the victim’s family would only be able to claim up to HK$ 500,000 (US$ 64,102) due to the fact that all the victims were on a tour, organized by a tour agency. Under the Chartis policy, “Accidents while in a Common Carrier” can be indemnified up to HK$ 1,000,000. However the policy wording states:
The Benefit will be payable to the Insured Person who suffers an Injury while riding as a fare paying passenger, and not as pilot, operator or crew member in or on, boarding or alighting from any Common Carrier, or the carrier as arranged by a travel agent, or while the Insured Person is riding in an automobile at the time of Injury during the insured Journey outside Hong Kong which, directly and independently of all other causes shall result in any Event provided in the Benefit Table…
In this case, as the victims were on a tour, they would normally be excluded from coverage under the “Accidents while in a Common Carrier” benefit, and covered under the policy’s “Other Accidents Benefit;” where the company is only liable for up to HK$ 500,000 in compensation. However, Chartis, recognizing the extremity of the situation has doubled the total amount for which families of the victims can claim.
This affair only serves to highlight the need for comprehensive travel insurance coverage. As we have previously illustrated, travel insurance is one key component of a vacation which often goes overlooked. However, in the event of a serious situation, such as the hostage taking incident, it is important that coverage is in place. The differences between the compensation being received by the families who had insurance coverage in place and those who did not is HK$ 1,000,000 (US$ 128,205); and should serve to highlight the importance of adequate insurance coverage while overseas.
The last victim of the Philippines Hostage crisis was the Hong Thai Travel tour guide, Masa Tse Ting-Chunn, who has been widely praised in Hong Kong for phoning colleagues in Hong Kong and alerting them to the crisis. Tse’s family will receive the HK$ 320,000 accident benefit and death gratuity from Hong Thai Travel, in addition to his annual travel insurance benefits and labor insurance coverage.
Jul
19
Chartis Unveils Two New Cancer Care Plans in the UK PMI Market
Filed Under Chartis, Health Insurance, Medical Insurance, United Kingdom | 4 Comments
Chartis is now offering two new cancer care insurance products in the UK Private Medical Insurance (PMI) market through their voluntary benefits website; the WellWoman and CancerCare plans do not cover the medical expenses associated with cancer, but provide extra financial resources for patients.
Both the WellWoman and CancerCare plans are designed to operate alongside to private medical insurance products which would cover medical treatment of cancers. The benefits offered are a way to ameliorate financial difficulties that may arise from cancer diagnosis and treatment by offering lump sum cash payment upon diagnosis of a covered cancer of GBP 25,000 (USD 38, 282) on the standard cover and GBP 50,000 (USD 76,563) on premium cover. In some cases such as slow growing cancers or early stage cancers, Chartis may give a cash payment of GBP 1,000 (USD 1,531).
The CancerCare Plan covers Leukemia, Carcinoma in situ, Skin cancer, Hodgkin’s and non-Hodgkin’s lymphoma, and any malignant tumors that are neither pre-malignant nor non-invasive. WellWoman covers cancers affecting the reproductive organs including; one or both of the breasts, fallopian tubes and ovaries, the cervix, the uterus, the vagina, and vulva on women and one or both breasts and testes, as well as the prostate and the penis for men. Chartis places no restrictions on the spending of the lump sum cash payments, so the customer may use the money for whatever they deem necessary, whether that is paying for extra childcare, transport or household expenditures.
The Head of Broker Relationships for Chartis’ Accident and Health division, Kim Gilbert said “As employers look to reduce and control benefits costs, there is an increasing trend towards PMI plans that no longer provide cancer cover.
“By making the WellWoman and CancerCare products available through their voluntary benefits scheme, employers can help their employees to address the cancer care options available and signpost them to the cover available.
“When you consider that someone is diagnosed with cancer every two minutes in the UK, helping employees to find ways to limit the financial and emotional costs associated with such a life changing event is an invaluable service.”
Insurance Company Mentioned:
A leading property-casualty and general insurance company, Chartis has over 40 million policyholders in 160 countries worldwide. With more than 90 years experience in the insurance industry, and a range of progressive products, Chartis aims to help clients comprehensively manage risk.
Apr
9
Chartis Partners with MMR Inc
Filed Under Chartis, Health Insurance, Healthcare, International Healthcare, Technology | 3 Comments
Chartis Inc, a globally leading general insurance company specializing in property-casualty products, has announced an innovative partnership with MMR Information Systems to provide electronic health records to health insurance policyholders around the world.
MMR will provide Chartis with access to it’s MyMedicalRecords Technology, enabling policyholders of Chartis’ health insurance products to store, manage, and update their medical records in a smooth and efficient manner. The information will be stored on the website www.mymedicalrecords.com and use sophisticated encryption software to ensure that personal privacy is protected.
In addition to the centralized hosting of electronic medical records, Chartis health insurance policyholders will also be given a separate emergency account which will enable first responders and emergency medical personnel to access vital healthcare information on the spot, without having to wait for physical copies of the information.
According to US government analysis, moving to a paperless healthcare system would see significant savings with regards to healthcare costs. It is estimated that approximately US$ 77 billion per year could be saved if healthcare practitioners did not have to rely on out-dated means of gathering patient data.
As such, the move by Chartis may prove to be a potential cost saver for many policyholders, in addition to providing a vital resource to expatriates worldwide in an era of heightened international mobility.
Chariman and CEO of MMR, Robert Lorsch, said of the partnership, “It is especially exciting to work with Chartis to introduce this life-saving service at a time when the world is spending hundreds of billions of dollars on health information technologies.”
Companies Mentioned
A leading property-casualty and general insurance company, Chartis has over 40 million policyholders in 160 countries worldwide. With more than 90 years experience in the insurance industry, and a range of progressive products, Chartis aims to help clients comprehensively manage risk.
A wholly owned subsidiary of MyMedicalRecords Inc, MMR provides health information technologies to individual consumers and multinational companies around the world.
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