Jul
30
ExpatHealth.org International Health Roundup – July 2011
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July may have brought the end of Europe’s deadly e. coli outbreak, but the economic repercussions will continue to be felt for some time. European farmers are demanding compensation for millions in lost earnings, and the EU slapped a ban on Egyptian agricultural exports after identifying Egyptian fenugreek seeds as the source. Elsewhere, Hong Kong saw a steep rise in scarlet fever cases and a study identified systemic vulnerabilities in the US drug supply. Finally, if you’re feeling ill you might want to tweet about it—research has shown Twitter may be a useful channel for doctor-patient communication.
Here are some of the top international health stories of the past 30 days:
E. coli outbreak ends
The deadly e. coli outbreak that ravaged Europe during June petered out in July. Toward the end of the month both the World Health Organization (WHO) and Germany’s Robert Koch Institute declared the threat had passed. An investigation by European health officials fingered a batch of fenugreek seeds imported from Egypt as the cause—this triggered a spat between the EU and Egypt’s Ministry of Agriculture when on July 25th, the EU announced a ban on agricultural imports from Egypt (a move that could cost the North African country USD 4.2 billion). Egypt continues to deny its seeds were responsible, claiming all produce has tested negative for e. coli. The outbreak sickened 4,000 people and killed 50, the majority of them in Germany. The Robert Koch Institute warned that though the worst is over, isolated cases may still crop up periodically.
For more on this story, click here.
Study finds US drug safety lacking
40% of finished medicines and 80% of active ingredients on US store shelves are manufactured overseas, and recent years have seen several high-profile cases of illness and death as a result of adulteration (replacing ingredients with cheap or even fake substitutes). A 2008 case involving heparin resulted in 81 deaths and nearly 800 severe illnesses. A recent Pew study titled “After Heparin” focused on ways government regulators and pharmaceutical manufacturers could improve drug safety, partly by amending outmoded legislation that dates to the 1930s. ExpatHealth.org spoke to Gabrielle Cosel, Project Manager for the Pew Prescription Project, who said regulators and industry players must work together to tackle this global health risk.
For more on this story, click here.
Scarlet fever strikes Hong Kong
Hong Kong has faced a steep rise in scarlet fever cases this year. Mainland China and Macau have also seen increased numbers of cases, leading a top health official to call the outbreak “a regional phenomenon.” Scarlet fever is in the same family of diseases as strep throat. While it was once a major cause of death among children, fatalities dropped off sharply after a vaccine was developed in 1924. Today scarlet fever is usually treated with antibiotics. The Asian outbreak has health officials concerned because it appears to involve a mutated, drug-resistant strain. “We will be monitoring the situation very closely,” said Dr. Thomas Tsang, Controller of Hong Kong’s Center for Health Protection. “If genetic mutation is responsible for the increased transmissibility of the bacteria, the outbreak may be sustained for some time.”
For more on this story, click here.
Research shows Twitter could help doctors, patients communicate
A study by the International Association for Dental Research (IADR) concluded Twitter is an effective means for the public to communicate health concerns and offers healthcare providers a new channel for contacting patients. The IADR based its findings on 772 tweets specifically mentioning dental pain. Of these, it categorized 83% as “general statements of dental pain;” 22% as “action taken or contemplated” and 15% as “describing impact on daily activities.” 14% of users who either took action or were considering it sought advice from other users.
For more on this story, click here.
Be sure to check back on this space for more updates in August.
About ExpatHealth.org
ExpatHealth.org offers a one-stop source for international best practices in expatriate healthcare, expat trends and regulatory changes impacting the health industry. The site covers both global and regional health issues. http://expathealth.org
Jul
29
India’s second biggest public sector lender, Punjab National Bank (PNB), has agreed to acquire a 30 percent stake in MetLife India for an undisclosed amount, becoming the single largest shareholder in the private insurance company. The move marks the bank’s first foray into the insurance business. Once the transaction is finalized, the two parties have agreed the joint venture company will be renamed PNB MetLife India Ltd to leverage the combined strength of the two brands in the Indian market.
MetLife India, affiliate of global insurer MetLife Inc., the largest life insurer in the United States, was incorporated as a joint venture operation between MetLife International Holdings, The Jammu and Kashmir Bank, M Pallonji and Co, and other private stakeholders in 2001. PNB officials announced that the acquisition of a 30 percent stake in the insurance company would come through issuance of fresh equity, which would in turn dilute the existing percentages of MetLife India’s stakeholders proportionately. After the deal, MetLife US’ stake would reduce to from 26 percent to an estimated 19 percent. India’s current foreign direct investment (FDI) regulations prevent foreign entities from holding more than 26 percent of any Indian insurance enterprise, a rule that could soon change. With FDI capped as it is in India, investments from local entities through fresh shares have become the only option available for companies looking to raise their overall capital base. MetLife would plan to increase its stake back to the 26 percent limit within the first few months of the closure of the deal.
William J Toppeta, President of MetLife’s international operations, told reporters on Thursday that the deal with PNB would grant the insurer the necessary capital to service its growing business in India. “Given its global significance, India is a strategic focus market for MetLife. We believe that the addition of an outstanding financial institution like PNB as a shareholder and partner will greatly enhance MetLife India’s ability to move into the top tier of life companies here. We value PNB and our current shareholders for their integrity, market knowledge, distribution power and financial strength,” Toppeta told the press, adding that if and when the country’s FDI limits are relaxed, Metlife would consider increasing its stake further in their Indian branch.
The path which lead PNB to purchase a stake in Metlife India began in December 2010, when the bank invited expressions of interest (EOI) from both Indian and foreign insurance companies to set up a strategic partnership. PNB received responses from some 26 different insurance companies, each offering their own business model proposal. After evaluating the technical bids, the bank put three life insurance companies on the final short list: Aviva, Metlife and Bharti AXA. Based on the financial bids and a more diversified shareholding, PNB ultimately accepted MetLife India’s offer although the fiscal details of the deal have yet to be disclosed. The transaction is still subject to the approval from The Reserve Bank of India, Insurance Regulatory and Development Authority (IRDA) and other regulatory bodies. The deal would be expected to close by end the end of 2011.
In addition to this influx of fresh capital, the two companies will benefit from a 10-year exclusive distribution arrangement. As part of the deal, PNB have agreed to promote and distribute MetLife India’s insurance products through its branch network. MetLife already has a similar agreement with Karnataka Bank and Barclays in India. The distribution platform PNB provides could prove to be the most distinctive advantage for MetLife. PNB is the largest nationalized bank in India, with a network exceeding 5,000 branches and over 60 million active customers. According to Metlife India Managing Director Rajesh Relan, this strategic affiliation would enable the insurance company to more than double its existing customer base, diversify its products offered, and quickly establish itself amongst the country’s leading insurance providers. “With 60 percent branches in the rural and semi-urban areas, PNB is uniquely positioned to take insurance to the deep pockets of India. This partnership has the potential to drive the company into the top tier of Indian life insurers and more than double its market share,” Relan told reporters in New Delhi.
PNB Chairman and Managing Director K.R. Kamath added that the deal would be beneficial to the bank as it would give them more options in interacting with clients, helping to maintain its leadership position in the Indian financial services market. “The partnership with MetLife will provide PNB insurance expertise and bancassurance capabilities that will be an asset to the bank as it pursues its growth strategy in India and seeks to expand its leadership in the Indian financial services market,” Kamath said.
Since the insurance market in India was first opened up to the private sector and international investment in 1999, total insurance penetration has doubled and the domestic protection industry has overtaken several developed markets in output. There has been a substantial rise in insurance coverage, with both the number of life and health insurance policies increasing many times over. While premium income in the Indian insurance market within the upcoming decade is projected to reach US$ 350-400 billion, a combination of regulatory issues and fierce competition between both local and international companies (including AIG, Allianz, Standard Life and AXA) is expected to hamper profitability and constrict many insurers’ margins in the short term. Recent moves made by India’s regulatory authorities have opened up many of the country’s industries to greater foreign capital investment. This would be a particularly welcome development for the international insurance industry.
Insurance Companies Mentioned
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.
Jul
28
Chinese insurance companies will need to raise more than CNY110 billion(US$17 billion) of fresh external funding to support their industry’s further growth and development over the next three years, according to credit analysts from Standard & Poor’s Ratings Services. Although the credit outlook for China’s life and property insurers will remain stable to positive, the ratings agency expects the industry to slow down.
The Chinese insurance industry has experienced rapid growth within the past decade and still has much to look forward to due to favorable economic conditions and an under-penetrated market. Total written premiums in China’s insurance market reached RMB1,452.8 billion (US$221.4 billion) in 2010, a year-on-year increase of over 30.4 percent. According to the latest China Insurance Regulatory Commission (CIRC) figures, the total premium income reported by Chinese insurance companies’ surpassed CNY 805.66 billion (US$123.95 billion) in the first half of the year, a 13 percent rise on last year’s figures. The largest increase in income in the first six months of 2011 came from the property insurance sector whose premiums surged 16.9 percent from a year previous to CNY 235.96 billion (US$36.49 billion). Meanwhile, the total value of life insurance premium income stands at CNY 569.7 billion (US$ 88.1 billion).
Earlier this year, Standard & Poor’s (S&P) updated its forecast on the Chinese non-life insurance sector to positive from stable and maintained the stable outlook for the Chinese life insurance sector. However, while S&P expect the operating performances of China’s predominant insurers to remain favorable over the next one or two years, these companies will soon face moderate industry risk due to problems involving their relatively low capitalization, unrefined risk management practices and limited asset and liabilities management options. Weaker economic growth and unforeseen catastrophe losses could also pose substantial industry risk in the coming years. “This is particularly true for non-life insurers, given their relatively low capitalization,” S&P insurance analyst Connie Wong told the media at a news briefing on Wednesday.
“Though the credit profiles of the Chinese life insurers are expected to be stable and non-life insurers positive, rating upgrades are unlikely over the next one or two years.” Wong added.
Based on the latest 2010 financial figures released by the CIRC, at least eight non-life insurers, including the leader The People’s Insurance Company of China Ltd (PICC), had an indicative ratio (shareholders’ funds versus total company assets) under 30 percent, which is low in comparison to international standards. According to S&P, Chinese property and casualty insurers will need a capital injection of about CNY82 billion (US$12.72 billion) over the next three years to support a more respectable 40 percent ratio, while achieving an assumed 15 percent growth in premiums over the same period. The ratings agency also expects the underwriting performance of the non-life sector to continue improving on account of further regulatory changes and greater diligence on the part of company shareholders in recent years.
S&P disclosed that at least seven companies in China’s life insurance market had an indicative ratio under 4 percent, and that these insurers would need to raise about CNY32 billion (US$4.96 billion) in fresh capital investment to both improve upon this and meet similar premium growth targets to the non-life sector in the next three years. According the S&P analysts none of the key Chinese companies in the life sector, including China Life, China Pacific Life and Taikang Life Insurance Co Ltd, would require additional funding in the short-medium term nor would most international joint-venture operations present in the country.
While the Chinese insurance industry is technically open to foreign players, they have faced restrictions and a more active regulatory authority than in most other countries. Foreign insurance companies have tended to exist in China through investing and operating as joint venture partners with local Chinese insurance and financial conglomerates. Though the market share for foreign insurers’ has remained below 10 percent in China’s insurance sector, gradual increase is expected. S&P notes the example of CITIC-Prudential Life Insurance Co Ltd, Beijing’s largest international joint-venture business in terms of premium income, which last year saw its market share for new policies sold through insurance brokerages, an important marketing and distribution channel for most life insurers, increase by over 20 percent.
A recently published article by S&P, titled ‘Have Rapid Growth And Regulatory Changes Improved The Credit Profiles Of Chinese Insurers?,’ points out that the performance of Chinese insurers could be slowed down marginally in the short term in conjunction with the country’s economic expansion developments, which would force companies to refocus on more profitable product lines. The report further states that while the recent rise in interest rates will improve investment returns for the country’s insurers, it could ultimately slow down future premium growth if banking and pure investment products become more attractive to consumers than insurance.
Earlier this month, CIRC Chairman, Wu Dingfu confirmed sales of some general insurance products in China had already suffered as a result of the central bank’s decision to raise interest rates. The Chairman told Chinese media outlets that despite the growth potential of the country insurance industry, there remained many challenges to the insurance market in the midst of inflationary pressure, macroeconomic policy changes and weak global capital markets. Insurance companies will need to adapt to changes in the Chinese economy, adjust their business models and increase both equity investments and bank deposits, all while making sure to maintain a healthy solvency ratio.
Despite these noted concerns on the horizon, the Chinese insurance market will continue to be seen lucrative investment opportunity for many large multinational insurance companies as well as investors from the financial-services sector. Around US$25 billion in share offerings in Hong Kong and Shanghai could be coming to the market over the next 12 months from Chinese insurance companies alone. PICC has announced plans to raise between US$5 billion and US$6 billion in a dual listing this year. New China Life Insurance, China’s third-largest life insurance firm with RMB93 billion (US$14.38 billion) in premium income for 2010, has also recently applied to the Hong Kong stock exchange for a dual listing. The insurer is aiming for HK$31.2 billion (US$4 billion) in fresh funds by the end of the year. Taikang Life Insurance, the nations’s fifth-largest insurer by premiums, has also targeted between US$3 billion and US$4 billion from a Hong Kong listing in the next couple of years, all according to industry reports.
Companies Mentioned
New China Life
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.
PICC
People’s Insurance Company of China (PICC) is a state-owned holding company in the PRC, founded in 1949, that sponsors its subsidiaries: PICC Asset Management Company Limited and PICC Property and Casualty Company Limited (PICC P&C) among others. PICC P&C was established in 2002 and is now China’s largest non-life insurer. The insurer remains the designated agent within the People’s Republic of China for most major international insurance companies. In 2005, PICC announced a life-insurance joint venture with Sumitomo Life Insurance Co called PICC Life Insurance Co., which is now the sixth largest life insurer in the country.
Standard & Poor’s
Standard & Poor’s (commonly referred to as S&P) is a business branch of publishing house McGraw-Hill. Operating out of 20 countries, S&P provides the investment community with independent credit ratings on important financial vehicles such as stocks, municipal bonds, corporate bonds and mutual funds. In addition to its risk management, investment research and credit rating services, Standard & Poor’s is known for its indexes, in particular the S&P 500 index.
Taikang Life
Taikang Life Insurance was founded in Beijing in 1996 and offers life, annuity and health insurance through 120 offices throughout China
Jul
27
Philippines Insurance Market Grows
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There may be boom times ahead for the Philippines insurance industry after some difficult years. The Southeast Asian country’s life insurers are particularly confident about the performance forecast for their sector, projecting double-digit growth in written premiums for the second consecutive year due to the country’s positive economic indicators and an increased demand for insurance products.
Mayo Jose B. Ongsingco, president of both the Philippine Life Insurance Association Inc. (PLIA) and Insular Life Assurance Co, told the local press at a briefing on Tuesday that major players within the Philippines life insurance market expect premiums to rise by 23 to 24 percent in the coming year, with first year premiums (premiums for new insurance policies) predicted to expand a further 60 percent. Ongsingco commented that these figures would closely match the growth rate in total premiums the industry reported for 2010. “Based on what we’ve been hearing from the industry, this year’s growth would be close to that seen in 2010,” Ongsingco confirmed.
Newly released PLIA data showed that the insurance industry’s total premium income increased to PHP70.727 billion (US$1.67 billion) from PHP57.241 billion (US$1.34 billion) last year, a 23.5 percent increase. First year premiums meanwhile rose by a significant 59.4 percent to PHP34.28 billion (US$800 million) from PHP21.508 billion (US$507 million) in 2010. Of the first year premiums, the PLIA noted that almost two thirds were sold through bancassurance, with the remaining third being provided through the conventional agency distribution channel.
The Philippines life insurance industry remains largely concentrated with large insurers accounting for over 80 percent of the sector’s combined premiums. The PLIA reported that for 2010 the top five insurance companies in terms of premium income performance were Philam Life with PHP11.255 billion (US$ 265 million) in premiums or 16 percent of total, Sun Life with PHP10.63 billion (US$250 million) at 15 percent; AXA Life, PHP8.36 billion (US$197 million) at 11.8 percent; Pru Life UK with PHP7.36 billion (US$173.5 million) at10.4 percent, and Insular Life, PHP7.13 billion (US$168 million) at 10 percent. The next five were PhilamLife, Manulife, Grepalife, United Cocolife and Generali Pilipinas respectively.
The continued steady development of the Philippine economy has enabled the country’s insurance sector to maintain its positive outlook for sustained premium growth. The six to seven percent rise in the Philippines gross domestic product (GDP) combined with improved consumption patterns, remittances from the overseas Filipino Diaspora, sustained development of business process outsourcing (BPO) fundamentals, and the high liquidity present in the country’s financial system, are all strong internal factors that enable investor confidence to prevail in the emerging Southeast Asian market. Improved structural fundamentals and favorable economic conditions have provided Philippine citizens with more personal disposable income with which to now purchase insurance. Most of the Philippine working population is technically covered by a public health insurance scheme provided through Philippine Health Insurance Corporation (PhiHealth) and this may enable them to pursue other avenues for coverage as well.
The PLIA noted that variable life insurance and group insurance policies have proved to be popular choices among the country’s new emerging consumer class. Variable life insurance policies build cash value and link investment to life insurance. Part of the premium acts as conventional life insurance coverage while the other part is invested in a fund chosen by the policyholder to be paid to the beneficiary upon death. These policies have proven particularly popular and accounted for PHP26.506 billion (US$264 million) of the industry’s total premium income last year. The PLIA disclosed that sale of group insurance policies are also on the rise as more Filipino businesses recognize the value of providing coverage to their employees as a powerful retention tool for their companies. “Insurance is now being included as part of the benefits of employees, and it helps companies keep their people,” Ongsingco stated. Group insurance contributed PHP9.921 billion (US$233.8 million) towards the industry’s cumulative premium income for 2010.
The Philippines, similar to other emerging Asian economies, is also benefiting from the weak economic performance of established industrialized countries in the West. The ongoing debt crises facing both the United States and Europe have pushed substantial capital into emerging economies in the Asia Pacific region. This increase in direct foreign investment has buoyed local bond and equity markets, which will further boost the Philippine insurance industry by increasing companies’ yields on investments. President Ongsingco noted that the weakening of the global economy is currently working in the favor of the Philippines. “A weakening global economy would lead to higher foreign direct investments in the Philippines, including in securities and bond markets. The fundamentals of the Philippine economy are also improving—inflation is in check, the deficit is below target, and remittances continue to grow even with the unrest in the Middle East and North Africa,” Ongsingco said.
While these external international debt issues are currently helping the country attract investment, the PLIA is wary that these developments could change and pose significant risk to insurance growth going forward. Domestic life insurance companies are monitoring these events closely and may prepare for an eventual disruption. If the United States fails to resolve its policy on raising the debt ceiling by the August 2nd deadline and they default on their obligations it could have a ripple effect on markets across the globe, similar to the aftermath of the 2008 financial crisis. For the local insurance industry this would particularly affect interest rates and funds inflow. Ongsingco explained that this would be the most immediate concern for the Philippine insurance sector. “All the negative factors that may work against the industry’s growth is basically external,” the PLIA president said, adding “A lot of the growth now is anchored on expectations that the US is turning the corner.”
Improving insurance awareness and broad financial literacy in the Philippines is something the local industry has control over however. According to government data, life insurance premiums accounted for only 0.75 percent of the country’s GDP in 2010, putting the Philippines on par with Indonesia, but far below that of neighboring Asian countries such as Malaysia and Thailand at 2.8 and 1.8 percent respectively. The PLIA expect this figure to increase significantly with increased participation from overseas Filipinos as well as the introduction and development of innovative new products, such as micro-insurance targeted towards the country’s poorer members of the population.
Mr. Ongsingco concluded that explaining the diversity of protection and investment opportunities available through all insurance disciplines will become the most effective way to further the development of the industry. “Individual insurers are taking it upon themselves to educate the public about the value of insurance. Hopefully with these efforts, we can increase the penetration of insurance in the country,” he finished.
Jul
26
ING Leaving Latin America
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Dutch financial services company ING Groep NV reached an agreement this week to sell off most of its insurance businesses in Latin America to Colombian conglomerate Grupo de Inversiones Suramericana SA for a reported €2.6 billion (US$3.7 billion). The deal, expected to close by year’s end, is part of ING’s attempt to divest assets and repay the Dutch state and could also instigate a slew of activity from other multinational insurers in the region.
Grupo de Inversiones Suramericana, also known as Grupo Sura, will pay ING about €2.62 billion (US$3.7 billion) in cash and assume some €65 million (US$93.4 million) in debt held within the insurance operations, according to a statement released today. The deal includes ING’s pensions, investment management and life insurance businesses in Chile, Colombia, Mexico and Uruguay as well as two stakes in Peruvian insurers. This transaction is the largest ever foreign acquisition by a Colombian company and will establish Grupo Sura as a major player in Latin America’s insurance and pensions industry, a market primed for growth due to the region’s youth leaning demographics and promising economic forecast. According to ING, once the deal is completed Grupo Sura’s combined business will include over 25 million customers and US$120 billion worth of assets across Colombia, Chile, El Salvador, Mexico, Panama, Peru, the Dominican Republic and Uruguay.
The deal, subject to regulatory approval, values ING’s Latin American insurance assets at around six times its cumulative forecast 2011 earnings and at 1.8 times its estimated €1.5 billion (US$2.16 billion) book value, based on International Financial Reporting Standards. Included in the deal were the operations ING acquired from Banco Santander in 2008 for US$1.3 billion. The unit has over 10 million clients and €49 billion worth of assets under management in countries such as, Chile, Columbia, Peru and Mexico. Grupo Sura reportedly beat out rival bids from Chile’s Alvaro Saieh, Mexico’s Grupo Financiero Banorte SAB and Metlife, to acquire these businesses. Among the notable pension funds and insurance groups Grupo Sura also now controls are Integra of Peru and ING Fondos. The transaction hasn’t however included ING’s 36 percent stake in Brazilian insurance company Sul America SA, which will be sold separately at a later date.
Grupo Sura, with holdings in Colombia’s largest bank and pension fund, has been a dominant business force in its home country and has embarked on an aggressive expansion strategy in recent years, diversifying into cement and food production earlier this year. David Bojanini, chief executive of Grupo Sura, explained in a statement that their latest acquisition would enable them to take a leadership position in regional pension and insurance markets. “This acquisition expands Grupo Sura’s presence in the region and continues our growth and internationalization strategy. ING’s operating strength and experience will complement our existing platform and will drive value for our current and future investors”, he said.
Grupo Sura will look to add significant value to its portfolio through this transaction, with an expected US$172 million in additional dividends from its investments by 2012. David Bojanini added that recent acquisitions, once integrated, will maintain Grupo Sura commitment to growth and strong corporate governance. “The similarities between the ING business model and the pension operations of Grupo Sura create an opportunity to increase the value of services for our clients. This acquisition strengthens our participation in the market and confirms our commitment to a variety of Latin American countries,” he said in a statement.
ING meanwhile expect to make a €1 billion (US$1.44 billion) profit from the sale of its Latin American operations. The proceeds will be used to further reduce leverage on the company’s insurance unit by approximately €2.8 billion (US$4 billion). The price ING managed to sell for has been considered a success by market analysts given the circumstances. The Netherlands’ biggest financial services company began selling its worldwide insurance operations earlier this year in preparation for a European Union mandated split and subsequent sale of its insurance operations. ING must divest its entire insurance division and become a pure banking business, to meet the conditions of the €10 billion (US$14.38 billion) bailout package it received from the Dutch government during the 2008 global financial crisis. ING still owes some €3 billion (US$4.3 billion) on its bailout, plus another €1.5 billion (US$2.16 billion) in penalties, and plans to fully pay back the government by May 2012.
The deal marks the latest in a series of disposals by ING as it attempts to repay the Dutch state. Earlier this month the company sold off its European auto leasing division to BMW for €637 million (US$916 million). In June, ING sold its American online banking service, ING Direct USA, to Capital One Financial for around US$9 billion in cash and stock. ING is planning initial public offerings to divest its remaining insurance and investment management businesses in the US, Europe and Asia, worth between €18-19 billion (US$26-27.5 billion), but have yet to set a date.
While ING is probably loathe to be parting with its valuable presence in Latin America, the company is making noted progress with its mandated divestments. ING released a statement that heralded the sale of its assets to Grupo Sura as “the first major step in the divestment of ING’s insurance and investment management activities.”
Jan Hommen, CEO of ING Group, was proud of the work his company had done in the region and was sure Grupo Sura would continue to develop the Latin American region into a first rate business environment for insurance. “Over the years we have built a first rate Latin American franchise with a terrific management team and leading market positions in most countries we operate in. I am pleased that we have found in Grupo Sura a very solid and complementary owner with the ambition to further build on the success of this leading Latin American pensions and insurance provider, in the interests of both our customers and our employees,” he said in a statement.
Insurance Companies Mentioned
ING
ING provides banking, investments, life insurance and retirement services and operates in more than 50 countries. It serves more than 85 million private, corporate and institutional customers in Europe, North and Latin America, Asia and Australia.
GrupoSura
Grupo de Inversiones Suramericana is a Medellin-based conglomerate that either directly or through its subsidiaries holds stakes in over 100 companies belonging to the insurance, energy, food and finance sectors amongst many others. With over 60 years experience, its financial businesses enjoy leading positions, including the number one player in insurance and pensions in Colombia.
Jul
25
Zurich Seeks to Clarify Insurance Coverage of Sony Hack Attack
Filed Under Uncategorized | 1 Comment
Zurich American Insurance Co. (ZAIC) is going to court to determine whether or not they are liable in underwriting or defending Sony Corporation against the subsequent lawsuits and investigations related to the devastating hacker attack and data breach that afflicted the media and electronics conglomerate earlier this year. The outcome of this legal dispute could be a harbinger for further claims as both the threats to the security of information networks and the losses related to our interconnectivity continue to escalate. How to write and police policies that protect online data has now become a contentious subject of debate in the international insurance industry.
In April, Sony suffered a massive data breach when an unknown group of hackers skirted security protocols and gained access to some 100 million user accounts, potentially with corresponding credit card numbers, on the PlayStation Network. The attack was the second-largest online data breach in US history. The global video-game and movie-streaming network was then shut down again for another month as Sony reviewed its safety measures. On May 5th Sony CEO Howard Stringer apologized and offered free identity theft insurance coverage for all their US customers. The total cost of this breach and subsequent network outage is estimated to be 14 billion yen (US $178 million), not mentioning the losses related to scores of now disaffected Sony customers. While the company had agreed to payout compensation to anyone who suffered financially as a result of the incident, Sony is still being sued by a number of users and herein lays Zurich America’s complaint. Investigations conducted by US state and federal regulators looking into the incident are also underway and could end-up before the courts as well.
Zurich American filed suit with the state Supreme Court in New York last week, seeking ‘declaratory relief’ from having to defend and possibly compensate Sony over the 55 class-action lawsuits currently filed against it in the US, or any other subsequent action in response to the data breach. Each lawsuit has alleged in principal that the plaintiffs suffered damages resulting from unauthorized access to personal identification and financial information and also by an alleged delay in notifying members about the cyber attack. The most notable suit brought forward has been from an Ontario woman, filing on behalf of a million Canadian users for US$1 billion in damages. Sony has demanded Zurich American and Zurich Insurance Co. Ltd., both units of Zurich Financial Services, defend and indemnify them against this assortment of class-action claims related to the hacking scandal through their commercial general liability insurance policy written for the company as of April 1 2011. Zurich argues that its policy with Sony only covers claims related to bodily injury, property damage or personal and advertising injury and thus is not liable to indemnify the company for cyber-intrusion. According to the complaint, Zurich’s policy with Sony features exclusions related to ‘class-action complaints and miscellaneous claims’, which would deny coverage from such a circumstance and only apply to certain subsidiaries within the corporation anyway. Sony has 30 days to respond.
Sony intimated early on that the company would look to insurers to help pay for their massive network security breach. The costs associated with cleaning up their network were estimated to be US$20 per member, for a combined total surpassing US$2 billion. Zurich however wishes to clarify that while Sony could claim there was real-world property damage as a result of the network breach, the general liability insurance policy signed with them wasn’t eligible to cover cyberspace attacks or theft, even if all other underlying insurance is exhausted. Sony in fact has held a separate cyber insurance policy with another company but was looking to Zurich American for help covering the expected high costs associated with defending itself against upcoming class-action lawsuits. Zurich American doesn’t believe they are bound to take on such responsibilities going forward and have furthermore sued units of ACE Ltd, AIG and Mitsui Sumitomo Insurance, asking the court to declare what is in fact covered under the various insurance policies they had written for Sony. It is yet to be determined who should pay for upcoming lawsuits or how in fact the loss burden could be shared.
Zurich America’s attempt to extricate itself from these financial liabilities demonstrates the precarious coverage situation currently involving computer hacking and online identity theft and fraud. While Sony’s balance sheet certainly has suffered, the real-world servers housing their afflicted networks have not and thus the question of whether cyber-property damage amounts to real property damage and who covers it remains. One thing is for certain though; internet security is fast becoming a large concern for businesses today. As commerce continues to move online, the gap between technological innovation and the ability to protect data offers criminals an opening to launch attacks and steal sensitive industry information. Network security is fast becoming an issue for business of all sizes. Cyber liability insurance is thus becoming a more necessary and strategically important part of any company’s insurance coverage considerations. Sony’s experience will certainly serve as a lesson to many and if Zurich’s claim succeeds it will set a huge precedent in deciding who has responsibility over these massive online networks and the data within them.
Insurance Company 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.
Jul
22
Vietnam Insurance Market Progress
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New figures released this week by the Vietnamese government shows that, despite an economic slowdown, the Southeast Asian country’s insurance market grew by 20 percent cumulatively in the first half of the year.
The Vietnamese Ministry of Finance’s Insurance Supervisory Authority reported that total insurance premiums in the first half of 2011 reached VND17.4 trillion (US$826.8 million). Non-life insurance policies accounted for more than VND10.1 trillion (US$482 million) worth of premiums, a 22 percent increase over the same period last year. Life insurance meanwhile experienced a 16 percent growth rate in the first six months of the year. Although the life insurance sector contributes less to the industry’s total premiums, it has shown more consistent growth in recent years.
The Insurance Supervisory Authority credits the development of new innovative products in the Vietnamese life insurance market, like joint insurance, with the continued development of the sector. Joint insurance is a life policy written in the names of at least two persons whereby benefits would only be paid on the occasion of the first death claim. The insurance authority claimed this new product clearly met some nascent domestic demands as the ratio of policyholders who would cancel their joint insurance policies was reveled to be much lower than that of other kinds of insurance.
The insurance industry in Vietnam has benefited so far this year from the increasing involvement of brokerage companies in the market, particularly foreign-lead enterprises. They have been credited with introducing both better business practices and more innovative promotion efforts which has lead to increased professionalism in the market. Vietnam’s insurance authority revealed that the total amount of premiums now being brought in by insurance brokers has risen by over 80 percent in the first half of the year to VND1.8 trillion (US$86 million).
The Insurance Supervisory Authority Director, Trinh Thanh Hoan, told local media that he believes the domestic insurance industry will be able to maintain its current growth rate throughout the rest of year and has targeted a year end total insurance premiums collected of VND35.3 trillion (US$1.68 billion). This would represent a 19 percent increase of last year’s VND30.8 trillion (US$ 1.57 billion) totals. Non-life insurance would be expected to make up roughly VND20 trillion (US$952.4 million), between a 23 and 25 percent increase.
To realize these ambitious targets, Mr. Hoan outlined what Vietnamese insurance companies would need to achieve, including increasing their operating capacity to meet solvency requirements, further research and development into new products, restructuring and consolidating business to retain investors, and utilizing new technological developments. Current rules stipulate that local insurers are not permitted to retain risks exceeding 10 percent of their paid-in capital. Many Vietnamese insurers have small capital bases and the Insurance Authority expect more companies to list on the country’s stock exchanges to raise capital and to become financial holding companies.
Vietnam’s insurance market has been growing at a rapid pace in recent years, with total direct written premiums increasing around 20 percent annually since moves were first made to liberalize the industry following the country’s accession to the World Trade Organization (WTO) in 2007. Prior to these developments, domestic insurers were treated much more favorably than international insurers and the market stagnated as a result. When considering its’ true size however, the insurance market in Vietnam remains underdeveloped and small in comparison to many of its Southeast Asian neighbors.
Starting on 1 July 2011, the amended Law on Insurance Business took effect in Vietnam to further codify and standardize business practices. While the law is expected to tighten regulation on multinational companies and brokers offering cross-border insurance services it will also finally enable foreign non-life insurers to establish branches in Vietnam. Previously overseas companies could only participate in the non-life market through joint venture operations with a local firm or through licensing their business off. The Insurance Authority is also looking to introduce a raft of additional changes to better police fraud and to improve their training and recruitment efforts to ensure the industry can grow both larger and smarter.
According to A M Best’s report, ‘Vietnam’s Insurance Market Awakening to Further Change’, there are currently 29 insurance companies (mainly domestic firms) operating in Vietnam’s non-life market, with more expected to enter due to the potential for growth. However, the intense competition, high operating costs and an increased frequency and severity of insured losses has made profitable underwriting difficult to achieve in the current environment. As the market has opened up, the 4 big, partially state-owned non-life insurers have been losing market share to smaller largely-foreign competitors who have implemented aggressive growth strategies at the expense of cost-effective underwriting.
The life insurance industry in Vietnam remains less crowded than the non-life sector, with only 12 registered insurers operating in the country. Foreign insurers dominate this market, and have brought with them substantial capital, expertise and innovative distribution channels to sell a largely unknown product to the Vietnamese people. Due to the young-leaning demographics and low-per-capita income however, demand for life insurance and some other conventional insurance products has remained moderate. This is where innovative products like microinsurance could find significant market share.
Vietnam’s continued demographic and economic development will generate further awareness and demand for insurance. Although the considerable growth potential there, any foreign insurer looking to establish a presence in Vietnam’s insurance market will need to comply with tightening industry regulation, strong competition and operating challenges common to a developing economy in order to prosper.
Jul
21
A Potential US Default and Insurance
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Over the past few weeks, the various worldwide credit analysis and ratings agencies have weighed into the current political gridlock taking place in Washington D.C. and are now forecasting the effect a possible U.S. default could have on the international insurance industry.
The creditworthiness of the United States, which has always enjoyed a top AAA rating internationally, is now being threatened as President Obama and opposing Republican lawmakers continue to clash over how to best resolve the nation’s considerable debt problem. Republicans would like any increase on the US$14.3 trillion debt ceiling to feature substantial cuts in government spending, while the Obama Administration wants to generate significant revenue through tax increases. The country at large is facing an August 2 deadline, after which the federal government will not have enough funds available to pay all of its obligations without being able to borrow more. Two days after that deadline, the Treasury has a US$90 billion bond due to mature.
International insurance analysis and ratings agency A.M. Best has been at the forefront with concern over the continued inability of the U.S. government to resolve a potential debt crisis that will impact the global economy. The agency has been stress-testing US-based insurers to see how their balance sheets would fare if in fact the United States was downgraded from AAA credit rating to AA., and may consider adjusting its outlook for the entire US life and annuity sector to negative from stable.
A.M. Best conducted the tests with its proprietary capital model, Best’s Capital Adequacy Ratio (BCAR), and have thus far found that a U.S. sovereign downgrade would lead many insurers to reevaluate their underwriting leverage, as they would not be able to maintain their operations at historical levels without negatively impacting their long term financial strength. The company released a statement on the findings this week that explained why insurance companies in particular are vulnerable to the effects of potential credit downgrade. “As large-scale investors in U.S. Treasuries and government-backed instruments, insurers would experience a larger impact from a decline in the credit quality of the U.S. government than many other industries because of the asset leverage insurers hold,” A.M. Best noted, adding that too much time had now passed on US debt ceiling negotiations to not consider the gravest of consequences. “Therefore, even though A.M. Best expects a compromise to be worked out to raise the debt ceiling, the probability of a U.S. sovereign downgrade is no longer negligible, and the risk inherent in virtually all investments has increased,” the credit agency reported.
Data from the reports indicate that life insurance companies’ risk-adjusted capital positions in particular would be vulnerable to the effects of credit downgrade as they performed less admirably under extreme stress scenarios. A.M. Best explained that continued economic uncertainty will constrain most US life insurers’ ability to maintain their revenues and earnings. “The life insurance industry is clearly more adversely impacted than the property/casualty (P/C) industry because of its exposure to investment risk through higher asset leverage. In addition to the larger impact to the life industry in this stress test, there are other significant issues the life industry would face (disintermediation, liquidity, etc.).”
Life insurance companies, who always need to safeguard their assets to pay off long-term liabilities, have been major holders of debt for governments around the world. The current economic uncertainty surrounding not only the US but failing European Union members Greece, Portugal and Ireland have left life insurance companies exposed. A.M. Best notes that the current circumstances reflect our interconnected global economy and thus problems become more pervasive and require innovative solutions. “Typically, during economic crises, a global flight to quality would cause portfolios to shift away from emerging market assets toward high credit quality assets in the developed world – traditionally to the “guaranteed safety” of sovereign debt,” A.M. Best stated.
A.M. Best has not been the only ratings agency to recently warn insurers over the threat of a sovereign default. Standard & Poor’s warned last week that a whole range of the US’ most important financial companies, including insurers, could be downgraded if a deal is not struck to raise the debt limit. Moody’s Investor Services came out on Wednesday and said that if the US government defaults on its loan obligations it would result in a ratings downgrade for the four US-based AAA rated insurers. Moody’s identified the four American insurers as New York Life Insurance Company, Northwestern Mutual Life Insurance Company, Teachers Insurance & Annuity Association of America, and United Services Automobile Association. “Moody’s believes that the linkages between an insurer’s credit profile and that of the sovereign should limit the insurer’s financial strength rating to one or two notches above the sovereign bond rating…The AAA-rated US insurers are currently not on review because the rating agency regards them as resilient to a one-notch downgrade of the sovereign rating. However, should the sovereign rating be lowered by more than one notch, these insurers’ ratings could be lowered as a consequence,” Moody’s said in a statement.
The criticisms leveled at national governments by these ratings agencies are certainly interesting when you consider the events following the 2008 global financial crisis. The same demands for greater fiscal responsibility and transparency were being levied at the ratings agencies by these same governments who now may need the same oversight reforms. Whoever is calling the shots at the time, the international insurance industry will only benefit from greater financial stability across as many markets as possible.
Ratings Companies Mentioned
A.M. Best
A.M. Best Company was founded in 1899 and is a full-service credit rating organization dedicated to servicing the financial services industries, including the banking and insurance sectors.
Moody’s
Moody’s Investor Services provides credit ratings, research, credit risk management, and other services for more than a hundred thousand commercial and government entities around the world.
Standard & Poor’s
Standard & Poor’s (commonly referred to as S&P) is a business branch of publishing house McGraw-Hill. Operating out of 20 countries, S&P provides the investment community with independent credit ratings on important financial vehicles such as stocks, municipal bonds, corporate bonds and mutual funds. In addition to its risk management, investment research and credit rating services, Standard & Poor’s is known for its indexes, in particular the S&P 500 index.
Jul
20
Japan’s Post Quake Insurance Claims
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The March 11, 2011 earthquake that struck off the coast of northeast Japan, and the devastation resulting from the subsequent tsunami and nuclear fallout threat that followed, have had a significant impact on the previously under-utilized local catastrophe insurance market.
The catastrophic event is now reported to have destroyed or damaged more than 530,000 Japanese homes, many due to the accompanying tsunami generated by seismic disturbance. Insurance payouts from the earthquake surpassed 1.05 trillion yen (US$12.4 billion) as of July 14, according to the General Insurance Association of Japan (GIAJ).
The GIAJ reported that the country’s 25 top nonlife insurance companies have received 738,373 claims inquiries related to earthquake insurance on housing risks, with 701,558 claims already settled. These same insurers have now paid out 708.4 billion yen (US$ 8.9 billion) on insured properties in the northeastern Tohoku region, settling 353,712 claims in the area associated closest to the catastrophic event. In the eastern region of Japan including Tokyo, insurers have paid out 362.12 billion yen (US$4.6 billion) in claims with 346,417 settled cases. The Hokkaido region has for the moment reported 615 million yen (US$7.8 million) in insurance claims, according to the insurance association.
Japanese life insurers meanwhile have paid out 128.7 billion yen (US$1.63 billion) in claims from the earthquake, including 98.7 billion yen (US$1.25 billion) in life insurance payouts and a further 30 billion yen (US$380 million) in accident related insurance benefits from settling 12,520 claims. Usually these accident benefits would have excluded cover for earthquake-related damages, but the Life Insurance Association of Japan said members had agreed to pay out benefits without applying de jure policy restrictions, a previously unheard of conceit in Japan.
New GIAJ chairman Mr. Shuzo Sumi released a statement on the association’s website, discussing the results and acknowledging that Japan had been reminded of the true purpose and value of insurance in experiencing this unprecedented natural catastrophe. “Difficult circumstances surround us, however, consumers and businesses have an increased awareness of risks following the Earthquake,” Sumi said, adding “the general insurance industry is expected to play an increasingly important role in ensuring protection and safety. It is strongly recognized that the industry should stand to demonstrate its value.”
The association has pledged to do more to ensure people who have not yet made claims in the earthquake-hit region be made aware and receive the necessary information to do so. Sumi further commented that “[T]he GIAJ will make every effort in our post-disaster responses centered on encouraging prompt payments of insurance claims. Further efforts should be made to improve the market penetration of Earthquake Insurance, based on lessons learned from the disaster and the voices of consumers and businesses.”
The Japanese government has planned to increase awareness and the overall penetration of earthquake insurance through improvements to its basic disaster management plan. The national tax regime will provide additional support for this endeavor by approving income tax deductions for local policyholders with earthquake insurance.
Indeed the Japanese public has already heeded this advice. According to the latest GIAJ figures, earthquake insurance policies taken out by homeowners in April grew more than five times from a year ago. A total of 130,776 new policies were sold in April, compared with just 23,847 from the same month a year earlier. Japanese insurance companies had a total of 12.87 million earthquake policies in the month, a 5 percent increase from 2010’s figures, the report said.
The earthquake insurance system in Japan is at present a private-public mixed scheme, whereby domestic insurance companies retain most costs locally by reinsuring each other with backup support from the national government. The insurance claim mechanism allows for indemnity liability to be shared, with a reinsurance system limiting exposure for a single insurer. Japan’s government has also kept an earthquake relief fund, with reserves to help the insurance industry meet cost obligations. To the GIAJ, the government reinsurance system is seen as critical for maintaining the stable operation of the system. However, in lieu of these cataclysmic disasters, there are calls for the government to explore pre-event funding mechanisms for managing the economic losses generated by such large events. These solutions are only available through Japan’s increased involvement in the international reinsurance markets. The present system may not be able to adequately manage the level of risk Japan has experienced. Pressure is rising in the country to increase the maximum coverage for earthquake insurance policyholders substantially up from the current 50 million yen for structure and 10 million yen for contents.
In addition to the natural disasters, the forecast for the Japanese general insurance industry will remain muted due to the significant aging and depopulation of the country, the mature market conditions, and profitability issues surrounding the auto sector, which has seen payments for car insurance increase by 2 percent already this year. Automobile insurance, a stalwart business in Japan, has been under duress due primarily to an increase in the frequency of traffic accidents, injury claims, and skyrocketing prices for auto parts. This consequently keeps underwriting results for these businesses at a level often below the break-even point.
While Japanese insurers remain well positioned and capitalized to absorb the net losses from the record-shattering earth quake and tsunami, look for global reinsurers to raise rates and turn this all into a possible earnings event.
Jul
19
FICCI Drafting Better Regulation for Health Insurance Issues in India
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Although the health insurance sector in India has experienced rapid growth in the past decade, the complexities currently involved in policing the industry has prevented the overall benefits of this positive development from permeating down to the common Indian citizen. The Health Insurance Advisory Group from the Federation of Indian Chambers of Commerce and Industry (FICCI) is now putting together a series of policy recommendations to better standardize the relationship between health insurer and provider and to ensure greater affordability and accessibility of care for all.
Last year, India’s public health insurance sector was in a state of crisis as policyholders were left stranded following a deadlock between the four leading public sector insurers (New India Assurance, Oriental Insurance, United India Insurance and the National Insurance Company) and major private hospitals over the cancellation of cashless medical insurance reimbursement for treatment, known as mediclaim. The state-owned insurers alleged that the hospitals were routinely overcharging consumers, and thus pushing their businesses towards unsubstantiated losses. Following heated negotiations and an intervention by the high court, a truce was brokered between public insurers and private hospitals and the cashless services were partially restored, with the number of enrolled facilities reduced and many treatments now reserved primarily for cases of emergency. Almost 5 percent of India’s 1.2 billion population is estimated to be covered by some form of mediclaim policy and they were left with little option but to pay out-of-pocket for hospitalization during the lockout period.
The Insurance Regulatory and Development Authority of India (IRDA) has been tasked with developing draft norms that better define and standardize terms such as critical illness and hospitalization cost, amongst others, to hopefully reduce the scope for future claims disputes between Indian insurance companies and hospitals. The FICCI has also been brought in to help the insurance regulator and to present a wide range of recommendations, including its own list of excluded expenses in hospital indemnity policies, standard treatment guidelines, and administrative contact norms and billing procedures, all ultimately to ensure better regulation of the public healthcare sector. More details about the FICCI’s plans will no doubt be revealed at its annual conference on health insurance on July 19, 2011 at Hotel Lalit, New Delhi. The title of the conference this year is “Efficiency in Delivery: Win-Win for Stakeholders.”
To further address these operational issues and push towards better national health outcomes, the FICCI and IRDA have been looking to establish a multi-stakeholder group, with representatives from the World Bank, healthcare insurers and providers and other key persons of interest who could work towards streamlining and synchronizing business protocols in the healthcare and health insurance sectors. The healthcare industry should recognize the imperative to now develop innovative models to lower the costs of medical treatment and make care more widely available in India. Much more work can be done to make quality healthcare both accessible and affordable using India’s significant economies of scale.
“The long-term vision to make quality health care affordable for the country should be to increase the health insurance penetration to at least 50 percent of population by the year 2020 and 80 percent by the year 2030,” FICCI said in a statement.
The FICCI noted that the affordability of health care across the socio-economic pyramid in India would be crucial in achieving the South Asian country’s noble objective of providing quality healthcare to everyone. Currently, only 15 percent of the population has access to any form of health protection from catastrophic loss. The government is concerned that an increasing number of people in India are going deep into debt due to medical expenses. The rising costs of inpatient medical treatment, low levels of health insurance penetration, and the accompanying high out of pocket expenditure are all placing an undue burden on individuals, in particular those who remain below the poverty line and the sizeable elderly population. The newfound prevalence in both communicable diseases and the arrival of lifestyle diseases across urban and rural India have also contributed to escalating health cost concerns.
According to the latest data compiled by the National Sample Survey Office (NSSO), around 65 percent of India’s poor population has gone into debt and a further 1 percent, which equates to millions of people, falls below the poverty line segment every year due to a lack of adequate healthcare coverage. The NSSO also estimates that by 2025, over 189 million Indians will be at least 60 years old. Therefore, it is evident that in the face of rising costs, seeking better value for money in long-term care will become a priority. Efficiency discussions regarding long-term care expenses have thus far received relatively little attention in India and better evidence and proactive action based upon what works is urgently required.
The threat of skyrocketing inflation and increasing interest rates has also dampened the ability of many Indians to adequately prepare themselves for health issues later in life. Various pressures are pushing inflation up across Asia, including growing wage bills and the rising global prices of commodities, food and fuel in these emerging resource hungry Asian economies. According to the International Monetary Fund, consumer prices rose by 13.2 percent in India last. The considerable speed at which these prices are rising on the Subcontinent means that people will become poorer if they cannot invest their earnings successfully, despite the fact that, broadly speaking, Asia is getting richer. This particularly affects the elderly population who watch the value of their savings depreciate as health costs continue to rise.
Public sector insurers in India have long succumbed to losses as their pricing strategy cannot match the true costs of operating in this developing and populous healthcare market; private insurers have been able to manage their claims better. If the goal of the Indian government’s fundamental healthcare reform is to provide some level of base cover for every citizen, either premiums or medical costs will have to be lowered substantially. What is certain is that the demand for greater healthcare services and protection will not go away and that this will present significant business opportunities for both domestic and international insurance providers.
Organizations Mentioned
FICCI
Federation of Indian Chambers of Commerce and Industry (FICCI) is India’s head chamber representing over 500 industry associations and business units employing over 20 million people. FICCI works closely with the Indian Central and State governments and regulatory bodies to research and implement policy change.
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