Mar
10
Costa Rica welcomes First US Insurance Company to join Local Competition
Filed Under Insurance Company, Life Insurance | 3 Comments
The regulatory agency responsible for overseeing the insurance superintendency in Costa Rica has approved “Pan American Life Insurance de Costa Rica, S.A.” as provider of insurance coverage in the country. This makes of Pan-American Life Insurance Group, an international insurance provider and financial planning service based in New Orleans, Louisiana, the first US insurance company to be officially welcomed into the Costa Rican market.
The Costa Rican insurance market remained closed up till 2009 when competition was opened, after the passing of the Central American Free-Trade Agreement with the United States (CAFTA). For slightly over 84 years, the National Insurance Insitute (INS) had been the sole provider of insurance to Costa Ricans, together with Seguros del Magisterio, a company providing life insurance to teachers.
Over the years of presence in Latin America, Pan-American Life is the main provider of both individual and group life and health insurance policies in the region comprised by Guatemala, Honduras and El Salvador.
“Pan American Life Insurance de Costa Rica, S.A.” is the name of the local corporation through which the Pan-American Life Insurance Group will compete in the Costa Rican insurance market, together with the other five approved providers of insurance coverage in the country: Seguros del Magisterio, Mundial-MAFRE, Alico Costa Rica, Assa Compania de Seguros and INS.
As per statement released by the regulatory agency overseeing the Costa Rican insurance superintendency (SUGESE), these companies will begin selling their products within the next few months.
Insurance Company mentioned:
Pan-American Life Insurance Group
The Pan-American Life Insurance Group was established in New Orleans in 1911 and now has operations in 47 U.S. states, as well Puerto Rico, Colombia, Guatemala, Panama, Ecuador, El Salvador, Honduras and the Cayman Islands. In Costa Rica, the company will offer term life insurance, universal life insurance, health and medical expense insurance and accident insurance.
Mar
9
HuaKang awarded First National Insurance Agency Licence by Chinese Insurance Regulator
Filed Under China, China insurance, Insurance Company, Life Insurance | 1 Comment
The China Insurance Regulatory Commission (CIRC) has recently granted HuaKang Financial Services Inc. authorisation to consolidate its existing 17 subsidiaries under their subsidiary in Shenzhen, which in turn will allow all these subsidiaries to be upgraded into branches.
HuaKang Financial Services Inc. is the first and largest Chinese life insurance agency. The company was founded in 2006 and is based in Guangzhou, China.
With permission of CIRC, new branches in China can now be setup under the name Shenzhen HuaKang Insurance Agency Co. Ltd. and carry on developing insurance agency businesses, which the company plans to augment to up to a 30% share of the national market, and aiming to float its shares by next year.
According to HuaKang, their market share in the Chinese life insurance agency sector during the first 3 quarters of last year was 25%, and more than 50% market share in the provincial markets of cities such as Shanghai, Guangdong, Jiangsu, Shandong, Zhejiang, Tianjin and Chongqing.
The business strategy for the year 2010 announced by HuaKuang is to remain focused and further develop the suburban markets of first-tier cities in China.
The current 17 subsidiaries of HuaKang are located in Zhejiang, Shandong, Hangzhou, Tianjin, Hebei, Henan, Guangzhou, Hunan, Hubei, Sichuan, Chongqing, Shanghai, Beijing, Anhui and Liaonin.
Insurance Company mentioned:
Huakang is the first nationwide independent insurance intermediary company in China which focus on individual life insurance business,in particular regular life insurance business. Huakang’s nation-wide branches and profesional sales and services teams provide customers personalised, unbiased insurance and financial planning services thanks to its dominating market share and tremendous influence in the insurance intermediary industry. Huakang has won the overall recognition from the Media, competitors and investors. IDG capital and Matrix Partners China have concluded investing RMB500 million into Huakang.
Mar
8
AIG and Prudential agree on breakup fee clause
Filed Under AIG, Insurance Company, Life Insurance | 1 Comment
As American Insurance Group’s (AIG) sale of American International Assurance (AIA)to Prudential PLC moves forward, Prudential has agreed to pay American Insurance Group a fee of GB£153 million (US$231 million) should the deal for Asian life insurance unit AIA fall through.
American Insurance Group announced the deal on Monday, March 1st for approximately US$35.5 billion, divided up between US$25 billion in cash, US$8.5 billion in equity and equity-linked securities at nominal value, and US$2 billion in preferred stock. AIG expects the deal to be closed by the end of 2010.
Based on late Friday filings with the U.S. Securities and Exchange Commission (SEC), Prudential has not only agreed to the US$231 million breakup fee, but also payments 0.4% of the outstanding cash value of the deal, possibly over US$100 million per month, should it not be wrapped up by September 1st, 2010. The board members of both Prudential and AIG have given their approval, but the deal still awaits regulatory and shareholder approval.
The deal already has been given the go-ahead by the U.S. Government, which owns nearly 80% of AIG due to a taxpayer funded bailout of the company for US$182.3 billion. While AIG still owes nearly US$130 billion, it plans on using the US$25 billion cash portion of AIA’s sale to Prudential to buy back US$16 billion of preferred interests in the special purpose vehicle holding AIA stocks from the Federal Reserve Bank of New York (FRBNY), and also pay back a further US$9 billion held by the FRBNY Credit Reserve. In total, money paid back from the sale of AIA would make up nearly 20% of the outstanding debt held by taxpayers.
Companies Mentioned:
AIA
AIA is a Hong Kong-based life insurance company doing business across Asia that has been in business since 1919. They service over 20 million policies through 23,000 employees and 300,000 agents throughout markets in Asia, including; Vietnam, Thailand, Taiwan, South Korea, Singapore, Philippines, New Zealand, Malaysia, Macau, Indonesia, India, Hong Kong, Mainland China, Brunei and Australia.
AIG
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
Prudential P.L.C.
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.
Mar
4
Monetary Authority of Singapore presses for greater insurance product transparency
Filed Under Health Insurance, Life Insurance | 2 Comments
The Executive Director of Insurance Supervision at the Monetary Authority of Singapore, Mr. Low Kwok Mun, said insurance products need to be more transparent to consumers in an address to the Life Insurance Association of Singapore at their annual general meeting on March 3rd.
In his address Mr. Low said that while members of the Life Insurance Association (LIA) have done well in addressing consumer education on their products, more remains to be done, such as making a clearer distinction between insurance and savings products. He also noted that many insurance plans do not spell out what portion of premiums paid by consumers goes towards providing coverage, meaning that consumers are unable to make a cost-benefit analysis of their policies.
The executive director also pointed to complaints made to the Monetary Authority of Singapore (MAS) about consumers’ ambiguity over what medical procedures are claimable under health insurance policies.
The MAS also urged insurers to focus more on individual consumer’s needs with more life and health insurance plans, rather than investment linked products which are notably more complex and riskier.
Mr. Low said “Compared with 2008, health insurance sales in 2009 grew by 31 per cent to S$146 million while regular premium non-participating new business, which consists mainly of Accident and Health and Term Policies, grew by 13 per cent. While this is encouraging, I would like to urge all life insurers to keep this momentum on sales of protection plans going instead of being driven only by business considerations.”
The Life Insurance Association also appointed a new president, Mr. Tan Hak Leh, who is also a managing director at Great Eastern Life.
Mar
3
Sino Life Insurance gets regulator approval for Jiangxi expansion and shareholder change
Filed Under China insurance, Life Insurance | Leave a Comment
Sino Life Insurance Co. has been granted permission by the Chinese Insurance Regulatory Commission (CIRC) for a new branch in Jianxi province as well as approval for changing shareholders.
With the CIRC’s go-ahead, current Sino Life shareholder Shenzhen Wuxin Yufu Industrial Co. Ltd. is to transfer the entirety of its 180 million shares to Shenzhen International Commerce Investment Co. Ltd. After the transfer is finalized Shenzhen International Commerce Investment Co. Ltd. will have a total holding in Sino Life Insurance Co. of 397.9 million shares, constituting 17.64% of the shares in the life insurer, while Shenzhen Wuxin Yufu Industrial would no longer hold a stake in Sino Life.
Sino Life Insurance said that by the end of the first half of 2009 it had branches in 22 provinces, making its pending advancement into Jianxi province it’s 23rd. The company was started in 2001 with a registered capital of 2.08 billion yuan (US$304 million), by the end of 2009 they had total original premium income of over 7 billion yuan (US$1.02 billion).
Other than Shenzhen International Commerce Investment Co. Ltd., Sino Life also counts among is shareholders South China Investment Ltd., based in Shenzhen, Dalian Shougang Group, the Beijing iron and steel manufacturer, construction material and chemical producer Shide Group, as well as the Japan-based Tokio Marine & Nichido Fire Insurance Co. and it’s associate company Tokio Marine Asia Pte. Ltd.
Insurance Companies Mentioned:
Sino Life Insurance Co.
Established in Shanghai in 2001, Sino Life Insurance Co., the company moved it’s headquarters to Shenzhen in 2008. After starting with a market capitalization of 2.08 billion yuan (US$304 million) it has grown immensely in the Chinese life insurance market, it now operates in 23 provinces in China, employing over 300,000 people and has over 26 billion yuan (US$3.8 billion) worth of total assets.
Mar
1
Prudential in negotiations to buy American International Assurance
Filed Under AIG, Insurance Company, Life Insurance | 3 Comments
London-based Financial services company, Prudential P.L.C. is in talks over purchasing AIG’s Asian life insurance business, American International Assurance.
Although the deal has not been finalized yet, it would see Prudential buy American International Assurance or AIA for approximately US$35.5 billion; US$25 billion in cash and US$10.5 billion in stocks.
AIG had been planning on an initial public offering for AIA since late 2009, placing the business in a Special Purpose Vehicle in which the Federal Reserve Bank of New York holds the preferred interests and AIG holding all common interests in AIA. The sale of AIA would pave the way for the largest repayment of the US$180 billion that AIG received in U.S. government bailouts, with the Federal Reserve Bank of New York prepared to receive billions from the sale.
Hong Kong-based AIA has been operating since 1919 and is a major player in the Asian life insurance market with extensive distribution networks in 15 geographical markets and over 20 million policies in-force in the region. The addition of AIA’s business operations in addition to Prudential’s existing 11 million policies would make Prudential a market leader in the Asian life insurance industry.
Companies Mentioned:
AIA
AIA is a Hong Kong-based life insurance company doing business across Asia that has been in business since 1919. They service over 20 million policies through 23,000 employees and 300,000 agents throughout markets in Asia, including; Vietnam, Thailand, Taiwan, South Korea, Singapore, Philippines, New Zealand, Malaysia, Macau, Indonesia, India, Hong Kong, Mainland China, Brunei and Australia.
AIG
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
Prudential P.L.C.
Prudential has been in the insurance and financial services business since 1848. Today they operate throughout the UK, US and Asia offering international health insurance and retirement planning services, supported by 27,000 employees worldwide.
Feb
24
American International Group May be on the Road to Recovery
Filed Under AIG, Income Protection, Insurance Company, Life Insurance | 3 Comments
American International Group may be on the road to recovery 17 months after the company received a US$ 182.3 Billion bailout from the American government at the peak of the global financial crisis of 2008/2009.
AIG, whose failure threatened to collapse the USA’s economy, has improved its means to repay the bailout which it received through increased sales in the company’s property-casualty business. Property-Casualty contributed to a third of AIG’s revenue in the three quarters following the opening shots of the great recession. In conjunction with rising Life and Retirement product sales, the mainstay of AIG’s offerings, in the third quarter of 2009 the company looks well placed to pull out of what many industry analysts are referring to as a “death spiral”.
Managing Director of Nomura Securities International, David Havens, said “There are clear signs that AIG has pulled out of what could have been a death spiral.” Nomura Securities was a key player during the Global Financial Crisis, taking over the European and Asian business of defunct banking giant Lehman Brothers.
Industry observers are forecasting a positive outlook for AIG, and point to recently released third quarter results that see the company moving more in line with industry averages, rather than continuing poor performance. During the fourth quarter of 2008, the first full reporting period after they received their bailout, AIG posted Property-Casualty premiums sales of US$ 7.1 billion. This figure has risen during 2009 with the property-casualty arm posting sales of US$ 7.7 billion in the first quarter, US$ 7.9 billion in the second quarter, and US$ 8.1 billion in the third.
Life insurance however, may be slower to recover. During the fourth quarter of 2008, AIG posted Life insurance revenues of US$ 15.2 billion. The first quarter of 2009 saw British clients abandon the firm due to a perceived lack of confidence, and consequently saw Life insurance sales drop to US$ 14.5 billion. The life insurance arm of AIG continued to struggle in the second quarter of 2009 with sales down to US$ 13 billion, but a recent reversal of the downward trend, and an increase in Life insurance sales, up to US$13.7 billion in the third quarter, means that stability may be returning to this beleaguered company.
In other AIG news, AIG Star Life Insurance Co. Ltd, a life insurance subsidiary located in Japan, has formed a partnership with Orix Corp. to sell annuity products. Aiming to enhance AIG Star’s customer base, the two companies will pursue a venture which will see them jointly marketing annuity products to Orix Corp’s existing clients.
Companies Mentioned
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally
A wholly owned subsidiary of Nomura Holdings, Nomura Securities is a finanical services company in addition to being a global investment bank. Based in Tokyo, Nomura Securities has approximately 26,000 staff worldwide.
Feb
3
American International Group to sell American Life Insurance Company
Filed Under AIG, Insurance Company, International Healthcare, Life Insurance, MetLife | 18 Comments
American International Group Inc. has confirmed on Tuesday that it is in talks with MetLife Inc. to sell the groups’ life insurance unit, the American Life Insurance Company. Rumors surfaced last month with regards to a potential MetLife deal for the AIG unit, and market analysts speculated that such a move would be incredibly beneficial to MetLife as the American Life Insurance Company has an extensive international health and life insurance business operating in more than 50 countries around the world.
Despite the discussions around the American Life Insurance Company, AIG has stipulated that it will not consider the sale of two Japanese life insurance companies which it took off the market in 2009. Star Life Insurance Co. and AIG Edison Life Insurance Co. were up for sale following the turning of AIG’s fortunes in 2008 at the peak of the global financial crisis, but had been removed from the market by the fourth quarter of 2009.
With a number of global insurance providers supposedly in position to increase their international reach through acquisitions, some analysts have speculated that AIG may be willing to play in a competitive market. However, AIG spokesman Mark Herr stated of both Star Life and AIG Edison that “they are good businesses and we are pleased to have them in the AIG family.”
The move for MetLife to buy the AIG unit may have its roots in the sharp loss of profits experienced by MetLife in the fourth quarter of 2009. MetLife has stated that the company’s profit dropped by approximately 70% as it paid out more benefits and claims.
Insurance Companies Mentioned:
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
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.
Sep
24
AIG – What is happening, and how it affects you.
Filed Under China insurance, Expat Insurance, Health Insurance, Healthcare, International Healthcare, Life Insurance, Medical Insurance, USA Health Insurance | 2 Comments
AIG: The letters on Manchester United’s football shirts, on buildings dominating skylines in major cities worldwide, and in the past week, on the front covers of the business pages, if not the entire paper.
A company with a long and storied history, AIG had posted total losses of $18.5 billion over the last three quarters, before being bailed out last Tuesday (Sep. 17th) with a loan of up to $85 billion dollars from the Federal Reserve. This was designed to effectively secure the company’s important economic position worldwide, and in exchange the Fed would get around an 80% stake in the company as a kind of security, and 12% interest on the loan.
What happened? Why did AIG suddenly need so much cash to avoid going under? Should they have been lent it?
This was not the start of the story, and it is far from being the end of it. It began, like so many of today’s economic worries, with the sub-prime mortgage crisis. To enable them to continue making yet more bad loans, banks in the US and Europe insured some of the loans with insurers such as AIG. As the largest insurance company in the US, AIG also insured many other deals made by banks or large companies, so as the economy went into recession, it lost a great deal of money, resulting in a situation where the company was very illiquid and could therefore fail. This would have had a huge knock-on effect on banks and companies not just in the US but worldwide, meaning that the Fed felt justified in bailing out AIG (whereas it left Lehman Brothers Holdings Inc., who announced last week that they would file for chapter 11 bankruptcy protection, to their own devices).
The government was fresh from shoring up Freddie Mac and Fannie Mae, (the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association) with guarantees and the prospect of a ‘conservatorship’, and back in March, the Fed backed the purchase of the stricken Bear Stearns by JP Morgan. The Federal Reserve has as a result been rather seriously depleted.
The US is not the only country that is having to take action of this kind. The UK government ‘nationalized’ the Northern Rock bank, another victim of the sub-prime crisis in the US, back in February. Some slack is taken up by companies taking over other companies, e.g. Bank of America buying Merrill Lynch, Lloyds TSB merging with HBOS, or Barclays buying up some of Lehman Brothers’ core assets- which many would argue is how the market should work. At present, however, the US looks likely to spend yet more money to try and solve a problem that, although originating in the country, affects the world’s economy as a whole. It is unlikely that other countries will be able to continue to sit back and watch the US deal with the problem alone for very long.
The AIG bail-out looks to be only the start of an almost unprecedented level of government spending to assist private business. Lawmakers are still hashing out the details of a plan to use taxpayers’ money to buy the bad debts of financial institutions with significant operations in the US. The plan would put about $700 billion dollars spending money into the hands of Treasury Secretary Henry M. Paulson Jr. who would theoretically decide how to spend it in a way that balances the interests of the taxpayer – minimizing immediate costs but ensuring liquidity in the financial markets in the long term. This is a very controversial plan, and has even been called a kind of undemocratic socialism. Paulson in fact used to be head of Goldman Sachs, which along with Morgan Stanley just announced a change of legal status to enable it to take advantage of the proposal. Many politicians, including McCain and Obama, have expressed concern and are demanding greater oversight, but as it is hard even for financial experts to put a value on bad loans of the type that caused the crisis, it is unclear how this would work.
How does this affect my insurance?
Essentially, it shouldn’t. AIG has been more or less guaranteed by the US government. In any case, most private policies are with subsidiaries of AIG that are separately regulated and financially sound. Also, in the US, policies are usually guaranteed to some extent by state run associations should an insurer fail.
However, as anyone who has seen Mary Poppins should know, customers are not necessarily rational beings, as has been demonstrated in the past week, particularly in Asia. The offices of AIG subsidiaries in Singapore, Taiwan and Hong Kong have been mobbed by people wanting to either enquire about the safety of their policies or cancel them altogether. In Hong Kong some 1,700 people surrendered their policies with AIA on Tuesday. This was despite assurances, including from the monetary authority of Singapore, that the subsidiaries of AIG are still sound. AIA in Singapore has announced a policy conservation program to enable those who surrendered their policies in panic last week to reinstate them. While some unscrupous agents might be tempted to advise people to switch insurers to get a new commission, the best course of action is probably to wait and see.
Effects on the presidential election race, and the candidates’ healthcare proposals:
Both candidates are going to have to make significant changes to their policy proposals in the face of the economic realities which will likely face the next administration. They also both have to come up with a stance on this new proposal. So far their responses have been fairly similar, with both calling for more oversight. Both McCain and Joe Biden were supporters of the deregulation in the late 90s that arguably made the sub-prime crisis possible, which may mean Obama has the edge in not having to backtrack too much. What is certain is that there is going to be a lot less money available for expensive programs such as Medicare or Medicaid, and any candidate promising tax-cuts will have serious credibility issues. The future of health insurance and healthcare financing in America is now very unclear.