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Zurich Sells Stake in Spanish JV to Unnim

Europe’s fourth largest insurer – the Zurich Financial Services Group – has announced that it has entered into an agreement with its Spanish partners Unnim to sell them its 50 percent stake in their Spanish joint venture life and general insurance operation.

Zurich’s decision to sell its equal stake in the Spanish insurance venture follows the merger between Caixa Sabadell, Caixa Terrassa and Caixa Manlieu in July 2010 to form Caixa d’Estalvis Unió de Caixes de Manlleu, Sabadell i Terrassa – also known as Unnim.

The merger has lead Zurich, and the newly formed Unnim, to enter into a definitive agreement for the Spain-based Unnim to buy-out Zurich’s 50 percent share in the joint venture.

The Spanish savings bank Unnim has agreed to pay a cash consideration of €285 million (US$ 388 million) to Zurich in the deal, which will see Unnim become a wholly owned Spanish Insurance Provider. The deal is still subject to regulatory approval, but is expected to be completed in the early part of 2011.

Zurich and Spain based Caixa Sabadell originally entered into a 50-50 partnership in 2008, in a deal which cost Zurich €264 million (US$ 360 million), plus an extra €110 million (US$ 150 million) if agreed performance targets were met.

In recent months Zurich has been positioning its operational focus on emerging markets in the Gulf and Asian regions, highlighting the fact that these nascent insurance markets are evolving in the wake of the global financial crisis. The flourishing Indonesian insurance industry has lead the Swiss insurer to acquire an 80 percent stake in PT Mayapada Life enabling it to gain access to one the fastest growing Asian life markets. Also, Zurich recently invested a further €308 million (USS $420 million) in shares in current Chinese partners New China Life Insurance (NCI) in order to maintain its 20 percent stake in the China-based insurer, enabling Zurich to maintain a strong foothold in the world’s second largest economy.

In October 2010, Zurich also said that it will look for opportunities to expand in the Middle East and Gulf regions, with the international insurers recently acquiring Lebanon based Compagnie Libanaise D’Assurances. This enabled expansion of its operations in the region gaining access to markets in Lebanon, United Arab Emirates, Kuwait and Oman; Zurich has recognized the income potential from premiums in the Islamic insurance sector as demand for takaful products increase in the emerging Islamic markets.

Zurich has stated that it will continue to look for bolt-on acquisitions within emerging markets to ensure it remains competitive in these evolving insurance markets.

In 2009, total premiums in the Spanish insurance industry reached €60.4 billion (US$ 81.5 billion). Although there are still significant returns for insurers operating in the established European markets, higher returns from new written premiums in the developing markets in Asian and the Middle East provide multi-national insurers such as Zurich more profitable returns.

The Swiss based insurer Zurich has reiterated that it remains devoted to the Spanish life and general insurance market and is still committed to its other Spanish bancassurance partners within the country.

Insurance Companies Mentioned:

Zurich

Headquartered in Zurich, Switzerland, Zurich Financial Services Group is an insurance-based financial services provider with a network of subsidiaries and offices in North America and Europe and also in Asia-Pacific, Latin America and other markets. Zurich is one of the world’s largest insurance groups, and one of the few to operate on a truly global basis. With 60,000 employees serving customers in more than 170 countries, our business is concentrated in three business segments: General Insurance, Global Life, and Farmers.

New China Life Insurance

New China Life Insurance Co.,Ltd (NCI）has headquarters in Beijing and was established in 1996 It is a large national insurance company, with products including traditional protection products, bonus products as well as the products that have a strong financial management function. With sustained, healthy and harmonious development of the company, the brand value of NCI is a valuable asset.

Compagnie Libanaise d Assurances

Compagnie Libanaise d Assurances (S.A.L.) was established in the year 1951. Their paid-Up capital is LBP 22,500,000,000 (US$14.98 million) and their activities include insurance and re-insurance, withc offices in Lebanon, United Arab Emirates, Kuwait and Oman.

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Allianz Global Corporate & Specialty Opens New Office in Spain

Allianz Group’s dedicated corporate insurance arm, Allianz Global Corporate & Specialty (AGCS), is set to open up a new branch office in Madrid, Spain.

Allianz Global Corporate & Security will be taking over the local portfolio of large-size corporate insurance customers from the local Allianz unit, Allianz Compañía de Seguros y Reaseguros, SA (Allianz Seguros). The new AGCS branch will work closely with Allianz Seguros in their efforts to write more than EUR 120 million (USD 153.7 million) in 2010.

The new branch of AGCS will be led by Agustin Martin, who will take charge of the 52 employees whom will staff the new office. Clients and brokers will be receiving full service and products across five lines of business from the new AGCS branch; including property, engineering, aviation and marine insurance, financial lines, and liability insurance.

Allianz expects the new Madrid office to benefit from Allianz Global Corporate & Strategy’s AA rating from Standard & Poor’s. The new office will be part of the AGCS network which spans over 150 countries via network partners and Allianz offices.

The Chief Executive Officer of Allianz Global Corporate & Security, Axel Theis, said that “Spain is an important market for AGCS, which is why we need to have a dedicated team in Madrid close to our clients. There is a lot of demand for our services here, particularly from Spanish clients with international insurance requirements who need easy access to our specialist services and worldwide network.”

Insurance Companies Mentioned:

Allianz Group is one of the leading global services providers in insurance and asset management. With approximately 153,000 employees worldwide, the Allianz Group serves approximately 75 million customers in about 70 countries. On the insurance side, Allianz is the market leader in the German market and has a strong international presence.

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Emergency Evacuation Coverage Often Ignored

With the ability to travel across the world getting easier every year, one thing many people do not take into account is the price of getting home should an accident occur. Cases like Carrie-Anne Dudbridge and Ryan Elley are sad illustrations of the necessities of travel insurance in the modern age.

There have been a number of incidents this year involving holidaymakers, many of them from Britain, who have suffered a tragic accident while vacationing in another country. Many of these occurrences have happened within Europe, likely due to the fact that traveling between European Union member states is an easy and economical way to reach some of the most sought after travel destinations in the world.

The European Health Insurance Card (EHIC), which replaced the E111 in 2006, also reassures travelers within the EU, by offering them some level of health insurance coverage when visiting other member states. However, in some cases the EHIC may be lulling people into a false sense of safety, as many are still confused over what exactly is covered by the EHIC.

The EHIC guarantees holder the same access to healthcare as a local resident in the event of illness or accident while traveling. While this can lead to some minor aggravation and bureaucratic hoop-jumping, depending on whether the country the EHIC holder is visiting has copayments, or relies on a system where you pay for treatment up front and claim the costs back, recent accidents have demonstrated that it is no replacement for actual travel or international health insurance.

Should someone suffer an unforeseen catastrophic injury that requires hospitalization while on vacation, it may be necessary to transfer the patient by air ambulance to the nearest medical facility capable of providing the necessary care. Furthermore, depending on the quality of the local healthcare system or the feasibility of waiting for the patient to recover enough to travel home regularly, it may be necessary to transport the patient back to their home nation via medical repatriation. In either case, the costs associated with both air ambulances and medical repatriation are extraordinary; without the appropriate medical insurance in place individuals are left facing thousands of dollars in fees.

Ryan Elley and Carrie-Anne Dudbridge are just two of the most recent in a long line of unfortunate accidents in European getaway locations. Ryan Elley, 20 years old, made a last-minute decision to join his friends in Playa d’en Bossa, a well known party destination on the Spanish island of Ibiza, without taking out health insurance. While at the Jet Apartments at the resort, Elley fell from a second floor balcony, breaking his spine in three places, puncturing a lung and suffering serious head injuries. Elley was the second British national to fall from a balcony at the Jet Apartments, after Peter Carter was injured earlier in 2010 when he attempted to jump from a 3^rd floor balcony into the pool, but misjudged the distance. This activity has apparently happened frequently enough that it is now dubbed ‘balconing’ and Spanish authorities in the Balearic Islands are asking tourists to restrain themselves to prevent injuries.

Ryan Elley was placed in a medical coma at the Son Dureta hospital in Palma, Majorca. His parents are trying to repatriate him to England, but due to the fact he did not take out medical insurance they now face a GBP 15,000 (USD 23,360) bill for the air ambulance. So far his family and friends have raised GBP 8,000 towards the costs of the air ambulance.

Carrie-Anne Dudbridge was a newlywed on her honeymoon to the Greek island of Corfu with husband Michael Dudbridge, when she suffered a tragic accident and fell 20 feet from the balcony, fracturing her spine in three places. The Dudbridges did have the EHIC, which they believed would cover their expenses in the case of an accident, however, they found out that the EHIC does not provide cover for medical transportation.

Because the couple did not have travel insurance, they faced having to pay GBP 16,000 (USD 25,000) for an air ambulance to repatriate Carrie-Anne back to England. Mr. Dudbridge launched an appeal for help on the internet, which thankfully has raised about GBP 20,000 (USD 31,190), enough to have the Dudbridges flown back to England on Sunday, August 22^nd 2010, by Mediaviation, a private air ambulance service.

These incidents occurred in first world nations, Greece and Spain respectively, where the quality of healthcare and medical treatment is generally considered to be fairly high. If Carrie-Anne had suffered her injury in a country where the provision of medical treatment is much more limited the costs involved with transporting her home safely could be much higher. Were Ryan Elley to have been injured somewhere further a field than Spain, it could have been very difficult and cost-prohibitive for his family to fly out and assist him, in effect leaving him alone in a foreign country with no insurance.

Thailand for instance, where approximately 860,000 Briton tourists visited between March 2009 and 2010, happens to be the place where, proportionally, the most number of British tourists are likely to die or end up in hospital according to British Behavior Abroad, a report by the British Foreign & Commonwealth Office (FCO). The report also illustrates the unfortunate fact that due to financial pressures, many holidaymakers are forgoing travel insurance to save money.

It is important to make sure that you have some level of protection when traveling, whether that is through basic travel insurance or an international medical insurance plan that covers emergency evacuations. While having some form of protection is a start, it is necessary to have an understanding of what your insurance covers, as in some cases travel insurance will not cover you if there is an accident where drugs or alcohol are involved. Accidents do happen, and as Chris Bryant, the British Foreign Office Minister said, “Getting comprehensive travel insurance means that whilst an accident may disrupt your holiday, it won’t bankrupt you in extortionate medical or repatriation bills.”

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Bupa Growing Abroad

Bupa, the UK’s largest private medical insurance provider, has announced its financial results for the first half of 2010. The report indicated that while the company’s UK membership numbers remained flat, there was considerable growth in international markets contributing to an overall increase in income of £3.71 billion(US$ 5.7 billion)  for Bupa.

Trading conditions in the UK, US and Spain have been particularly difficult since 2008, reflecting the fallout from the general downturn in business activity in these countries. However, trading in Australia and other non-European countries, and the USA, has helped Bupa generate an overall increase in revenue for the first six months of 2010. The UK health insurer reports a 10 per cent increase in revenue to £3.71 billion (US$ 5.7 billion) producing a 5% increase in surplus funds amounting to overall growth of £183.6 million (US$ 285 million) for the same period. As Bupa is a provident association all funds are reinvested into the company, consequently Bupa does not recognize “profit” per-se, but rather “surplus” revenue.

The 10% increase in revenue for Bupa was driven by organic growth of 4% and agreeable foreign exchange movements of 6%. Higher sales in Australia contributed to higher revenue, and a favorable exchange rate from the Australia Dollar to the Sterling was a strong factor for the company’s success.

As a result of the tough economic conditions in the UK, Bupa experienced a 0.8% decline in membership numbers over the 6 month period. Revenue and profits from the UK market remained flat for the first half of 2010 following one-off restructuring costs, but significant loss was contained by lower claims payments and cost savings resulting from new a new administration system adopted in August 2009.

Trading in the USA private medical market was also adversely affected because of the economic downturn, high unemployment levels, and the reform of the healthcare system in the country. These factors all contributed to the slowdown in new business sales and renewals. Bupa continues to develop new products to meet the changing demands in the American private healthcare market, with new business opportunities arising following the passing of health reform legislation; industry watchers expect increased sales volume for USA private medical insurance as President Obama’s reforms roll out through to 2014.

In international markets, Bupa’s surplus increased from £51.3 million (US$79.8 million) to £88.7 million (US$138 million) over the six month period, until 30^th of June 2010. Bupa International still remains the largest provider of international private medical insurance, with a global 2% increase in policyholders over the reporting period; primarily due to Bupa Arabia, and Bupa Australia experiencing increasing membership numbers.

Ray King, Chief Executive of Bupa commented on the future of the Australian health insurance market by saying: ‘In our Australian insurance business, the integration programme is almost complete and we look forward to the launch of a single product suite later this year which should further enhance our competitive position.”

In other markets, Bupa Latin America reported an increase in profits compared to the same period last year, explained by steady membership growth and lower claims being made. Bupa Hong Kong revenue increased modestly, and Max Bupa, the joint India venture launched in March 2010, has 6 retail offices in major cities across the country; this is planned to increase to 9 outlets by the end of 2010.

The future for Bupa in the UK and US remains unclear due to the stringent economic conditions and the impact on demand for private health insurance products. However with both governments implementing major reviews of healthcare provision it may give the UK medical provider opportunities to accelerate business in these markets. Chief Executive of Bupa, Ray King said “The UK and US government started to articulate their plans for reform of their healthcare systems and we believe that this should offer new opportunities for businesses in the future.”

The future outlook for Bupa internationally looks positive; consolidating their market presence in the international health insurance market. However, the markets in Europe and North America are still subject to difficult economic conditions.

Insurance Company Mentioned:

Bupa

Bupa was established more than 60 years ago in the UK and is now has ten million customers in over 190 countries, and over 52,000 employees around the world. Bupa is a leading international healthcare provider, offering personal and corporate health insurance, workplace health services and health assessments. As a provident association Bupa has no shareholders, because of this it uses its profits to invest in healthcare and medical facilities around the world. Bupa has operations around the world, principally in the UK, Australia, Spain, New Zealand and the US, as well as Hong Kong, Thailand, Saudi Arabia, India, China and across Latin America.

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European Health Insurance Card sees Changes

Issuing of the European Health Insurance Card (EHIC) will no longer be the responsibility of the state of residence of a person linked to the Social Security System of an EU Member State. This change in the European Law becomes effective on 01 May 2010.

The European Commission (EC) has as one of its objectives the free movement of people within the European Union (EU). Workers and pensioners who are linked to the Social Security System of any State can receive healthcare in any other Member State at the cost of the home State. Holders of the EHIC are entitled to necessary healthcare in the public system of any EU/EEA (European Economic Area ) Member State and Switzerland, should they become ill or injured whilst on a temporary stay in that country.

Up until now, an entitled person would be issued with an EHIC by the state of residence. Once the new law takes effect, the State where a person is paying to or benefiting from the Social Security System will be responsible for issuing the EHIC in cases where that person resides in another EU/EEA State.

As an example of this upcoming change, from 01 May 2010 the Health Service Executive (HSE) will have to issue the EHIC for all Irish insured persons or pensioners and their dependants resident in other member States. Meaning that a retired person receiving a contributory pension from the Department of Social Welfare living in Spain will have the EHIC issued by the Irish authorities, and not by the Spanish authorities as it is the case now.

Relieving the issuance of the EHIC by the state of residence of an entitled person may help resolve misunderstandings related to the entitlement of services in other countries, such as the case of Spanish Doctors calling for a re-evaluation of the EHIC scheme.

Organisation mentioned:

Health Service Executive

With an annual budget of over €15 billion, the HSE is one of Ireland’s largest purchasers of supplies and services. The HSE produces a wide range of reports and publications on health issues and developments, including Annual Reports, Guidelines for Nursing Home Subventions and Local Health Office Guides. The HSE also operates a major online repository of health-related reports, research and official publications from the HSE, former Health Boards and other health agencies.

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Spanish Doctors Call for Reevaluation of EHIC Scheme

Politicians and Doctors in Spain have recently joined forces to speak out against certain British ‘health tourists’ who are receiving free-of-charge medical treatment which is ultimately being paid for by taxpayers.

The SiMAP Union, representing public health doctors in Spain, criticized travelers holding the European Health Insurance Card (EHIC) for misusing the provision of emergency care and treatment destined for troubled holidaymakers. This criticism is not directed to expats with rightful residency who pay taxes.

Out of the thousands of British expats and tourists alternating residence between UK and Spain there is a percentage who time their visits to coincide with their needs for medical treatment. An approximate estimate by SiMAP puts this figure at 20 percent of all hospital admissions in Alicante, a favoured tourist destination.

Health professionals for years have kept silent about what politicians labeled as “freeloading” by these expats, and it’s possible that this rare support is instigated by the Doctors’ first-hand perception of the issues; issues which include  ‘medical tourists’  jumping queues, draining the Spanish healthcare system of their limited resources and depriving local people of medical attention they are rightfully entitled to receive.

One point of contention is the definition of ‘emergency treatment’ which has meant that in most instances Doctors do not question the alleged illnesses claimed by these foreign patients.

Addressing the above issue from a different angle, UK-based International healthcare and insurance firm PMI Global recently found that up to 20 per cent of companies are not procuring the correct health insurance for their expat employees in long-term foreign assignments.

In a report compiled by PMI Global, it was also revealed that up to 48 percent of companies didn’t carry the appropriate health assessments for the destinations their expat employees are sent to, and almost 50 percent of the companies neglect organizing the necessary vaccinations. Other problems identified include the level of access to psychological assistance and proper advice on where to receive medical attention.

According to comments by the operations director for PMI Global, too many employers are relying on the European Health Insurance Card (EHIC) in lieu of a proper international health insurance cover to ensure the medical attention their staff may require whilst on overseas assignments.

“While the EHIC entitles any resident in the UK to receive emergency healthcare treatment while traveling in the European Economic Area (EEA) and Switzerland, restrictions mean it isn’t a substitute for standalone international health insurance,” Rachael Floyd, operations director for PMI Global stated.

Given the looming healthcare budget shrinkage for both Spain’s SiMAP and the UK’s NHS, a possible target for cost-cutting measures would be the resources currently allocated for non-essential treatments and such action could potentially solve the perceived ‘medical care freeloading’ problem.

Insurance company and union mentioned:

PMI Global

PMI Global is a pioneering service offering an integrated package of insurance and healthcare support for employees abroad. The service is operated by PMI Health Group, the UK’s largest independent specialist provider of employee healthcare and insurance services.

SiMAP (Spanish)

SiMAP is a union of doctors in Valencia working in the public healthcare sector, covering the 3 provinces in the community. With essential presence in the Health Sector Roundtable, without favouritisms, to achieve greater quality of care and decent working conditions.

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International Health Insurers Expanding Overseas Operations

Both Bupa and Allianz are making moves to expand their international operations this year. Bupa has added a sales and support center in Fuengirola, Spain to provide administrative support for Bupa International and IHI Bupa customers. The 12 person service center will also aid distributors in Europe, Africa and the Middle East.

Allianz, on the other hand, is opening new gateways in China. It has recently been given approval from regulators to change the status of their fully-owned Allianz Insurance Co. Guangzhou Branch from a branch office to a subsidiary of Allianz Versicherungs A.G.

Previously, China only allowed foreign joint-venture companies to enter two new provinces a year. Changing the status of the company to a subsidiary makes the company an independent legal entity which allows it to apply for setting up its own branch offices in other provinces in China. While this may allow Allianz to enter more than two provinces in China per year, it still depends heavily on collaboration and negotiations between the Allianz subsidiary and a variety of Chinese regulators.

The Allianz casualty and property branch office opened in 2003, they have been growing their business selling engineering, domestic credit, liability, property, marine, short-term health insurance and accident insurance in the province to clients both foreign and domestic.

Given the new opportunities for expansion into new provinces, Allianz intends to keep the focus on growing their core industrial and commercial business, as well as expanding retail distribution of their products during 2010.

Companies Mentioned:

Bupa – Since being started in 1947, The British United Provident Association, or Bupa, has grown to an international company offering health insurance, health and care services to over 10 million customers in 190 countries around the world.

IHI Bupa – Originally dubbed IHI Danmark, the company has 30 years of history as an innovative international health insurer. The company was purchased by Bupa in 2005, and became a branch in 2009 beginning to operate under the banner of ihi Bupa.

Allianz – Founded in 1890 as an accident and transport insurer, Allianz has grown into a international insurer with over 75 million customers in approximately 70 countries.