London broker Chesterfield a ‘cultural fit’

US-based Kaufman Financial Group has bought London broker Chesterfield Group.

Chesterfield Group has businesses in the UK, USA, and Canada.

Kaufman president, chairman and chief executive Alan Jay Kaufman said: “The acquisition of the Chesterfield Group is an important addition to the Kaufman Financial Group and will act as a vehicle to expand our international presence and leverage our strength worldwide.”

“Chesterfield was attractive to our organisation due to their entrepreneurial spirit and drive along with their strong relationships in the London market and beyond.” Kaufman added.

Chesterfield Group’s Lloyd’s broker, Chesterfield Insurance Brokers, is the firm’s principal operating company.

Chesterfield managing director James Stevenson said: “The cultural similarities of the two groups combined with an excellent strategic fit in the USA, Canada and London will enable our combined business to offer a greater depth of products to our clients and producing brokers worldwide. It also extends Chesterfield’s reach and strengthens our relationship with Lloyd’s and London insurers.”

The acquisition also included Chesterfield Canada, a Canadian-based wholesale broker focused on specialty commercial risks. This marks Kaufman Financial Group’s entry into the Canadian market. The Canadian business will operate under the name of Kaufman Financial Group’s largest subsidiary, Burns & Wilcox.

Van Wagoner Companies, one of the oldest managing general agents in the United States, was also included in the deal.

The acquisition adds more than 60 people to the Kaufman Financial Group team, including senior management who will remain in their current leadership positions.

source form: insurancetimes

Ryan Birbeck to lead AXA’s biggest sales team

AXA Commercial Lines has appointed Ryan Birbeck as its new London sales manager.

Birbeck joined AXA in 2005 on the graduate scheme and has worked in a number of roles across AXA Insurance, including underwriting and sales

He was key account manager for some of AXA’s major corporate partner relationships before joining Amanda Blanc’s team when AXA Commercial Lines was launched last year.

AXA Commercial Lines chief Blanc said: “Ryan has proved himself over the last year as an outstanding member of my team and he has a strong customer and delivery focus. Leading the sales team in our largest office is a fantastic challenge for him.”

Birbeck added: “I am really looking forward to getting started in London. We are doing so many exciting things at AXA Commercial Lines and I want to make sure that we get our message across to brokers and provide them with the service they need.”

He will report to Linda Courtney, AXA’s London branch manager.

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The insurer repurchased six million shares in the fourth quarter

Chubb’s net income for the fourth quarter of 2011 fell $168m (£107m) to $452m, compared to $620m for the same period in 2010.

The insurer’s Q4 shares for 2011 were worth $1.60 each, compared to $2.02 each for the same period in 2010.

Operating income fell to $460m for the last quarter from $519m in 2010.

The insurer defines operating income as net income excluding after-tax realised investment gains and losses.

Operating income per share fell 4% to $1.63 from $1.69.

Net written premiums for Q4 last year increased 4% to $3bn from $2.9bn. Premiums were up 3% in the USA and up 6% outside the USA.

The fourth-quarter combined loss and expense ratio was 89.9% in 2011 and 87.0% in 2010. The impact of catastrophes on the combined ratio was 0.4 percentage points in the fourth quarter of 2011.

Losses from catastrophes that occurred in the fourth quarter were partially offset by a downward revision of estimated losses from Hurricane Irene and other catastrophes that occurred earlier in the year.

The impact of catastrophes in the fourth quarter of 2010 was 1.4 points. Excluding the impact of catastrophes, the combined ratio was 89.5% in 2011 and 85.6% in 2010. The expense ratio for the fourth quarter was 30.6% in 2011 and 30.9% in 2010.

During the fourth quarter of 2011, Chubb repurchased six million shares of its common stock at a total cost of $396m or an average cost of $66.10 per share.

source form: insurancetimes

Managing director John Paleomylites offered £2m credit facility to aggregator prior to Google’s £37.1m acquisition

Super-rich Google paid £37.1m for BeatThatQuote despite a year end loss of £262,705 loss and a shareholders’ deficit of £1.7m, latest accounts show.

The accounts ending January 2011 also reveal that founder and managing director John Paleomylites offered a £2m credit facility to the firm, of which £500,000 was drawn down. Including interest, £545,836 was eventually paid back.

The bright spot for BeatThatQuote is that it reduced its after tax loss to £262,705 from £2m in 2010.

Turnover was also up £13.7m (2011) from £8.4m (2010).Google paid £37.1m for BeatThatQuote in March last year.

Google was unavailable for comment.

source form: insurancetimes

Fraud rises 9% in 2011 compared to 2010 but false insurance claims fall

The UK’s economic problems have contributed to record levels of fraud, according to the UK’s Fraud Prevention Service.

CIFAS, a not-for-profit membership association dedicated to fraud prevention, recored over 236,500 cases of frauds during 2011– the highest number ever recorded. That was a 9% rise on 2010.

ID fraud and facility takeover fraud, where a trickster takes over a person’s mobile phone, bank account and credit card, were two types of fraud on the rise.

However, the good news for insurers, who took a tough approach to fraud last year, is that the number of false insurance claims fell 26.3% in 2011 compared to 2010. Cases fell to 396 from 537.

Research by Insurance Times has shown that 70% of industry respondents believe insurance fraud increased last year.

For example, Allianz Insurance recorded a rise in household fraud last year and predicts it will get worse.

“Last year we detected an increase in household insurance fraud, now at 24%,” said fraud manager Mihir Pandya.

“Within an environment of rising costs and unemployment this is a trend that we only feel will get worse before it gets better.”

source form: insurancetimes

Life insurance sales have trended lower in 2011 when compared with 2010, but quarter-to-quarter growth in 2011 has been consistently positive, according to the Kehrer-LIMRA Life Report. Most of the top writers, and about half of the manufacturers overall, grew their sales during the third quarter, as well as for the first nine months of the year (Figure 1).

In the third quarter of 2010, banks sold $513 million in life insurance premium, more than they had in any other quarter on record.

However, a year ago a few companies enacted changes which torpedoed bank life sales in subsequent quarters. This includes Allstate who dropped out of the market and Transamerica who took their leading product off the shelf. The third quarter tally of $363 million was 30 percent below the record set the prior year. In the general life insurance market, first-year recurring premium represents nearly half of the dollars sold, as was the case in banks a decade ago. Because flexible premium products are less of a fit in the transactional bank environment, 95 percent of the premium sold in banks today is paid in one lump-sum. A simplified issue single premium product works well in banks as buyers can complete their application in approximately ten minutes, pay for their policy, and walk out with life insurance coverage.

Nearly 20 percent of the recurring premium sold through banks in the third quarter of 2011 was for term coverage. Term is much more affordable option since it has no cash value and only insures the buyer for a specified period.

Universal Life and Whole Life products represent just about half of the new life insurance premium brought in banks and savings institutions, despite the fact that UL sales are down 38 percent compared with the first nine months of 2010, due in part to the withdrawal of two major underwriters as well as product design changes across the industry.

While most manufactures that sell through banks still offer term, premium sales were once again down, dropping 15 percent for the third quarter and 17 percent year-to-date. However, according to LIMRA’s U.S. Individual Life Insurance Sales Study, the product is significantly more affordable than its permanent counterparts and hence represents about 60 percent of the coverage purchased and 35 percent of policies sold through banks.

“Bank life sales are once again trending in the right direction, and an analysis of the life products being sold indicate bank-based reps are starting to get the hang of the wealth transfer life insurance sale. What would really be impressive is if carriers help banks figure out a way to nail the permanent protection-oriented life insurance sale” said Scott Stathis, managing director of Kehrer-LIMRA. “So far the track record is not impressive.”

Kehrer-LIMRA is a provider of best-practices research, benchmarking, study groups and consulting to the bank brokerage industry. Additional information can be found atwww.kehrerlimra.com.

Contact:
Scott Stathis, Managing Director
scott.stathis@kehrerlimra.com
978.448.0198
300 Day Hill Road
Windsor, CT 06095

source form: insurancenewsnet

Global insurance rates continued to climb in most loss-affected geographies and classes of business in the fourth quarter of 2011, but rate decreases are still achievable in many lines of business, according to a Marsh report.

Despite record insured catastrophe losses of more than $100bn in 2011, Marsh’s Global Insurance Market Quarterly Briefing: Q4 2011 said that capacity in the global insurance market remains plentiful and across the board rate rises are not being seen.

It added that insurers, however, are responding to the record losses by seeking rate increases on accounts with significant losses and catastrophe exposures.

For example, Marsh said almost half of its US property insurance clients experienced rate increases at renewal during the second half of 2011, compared to 31% in the first half.

While most of those rate increases were applied to programmes with catastrophe exposure, accounts with little or no such exposure or losses were often able to secure rate decreases during the second half of the year.

“The global insurance market remains well-capitalised and generally competitive,” said Dean Klisura, US risk practices leader at Marsh.

“This year’s record catastrophic losses are resulting in price firming around catastrophe and loss-driven accounts, but there has been no overall change in market pricing.

“Market fundamentals remain generally strong.”

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Bermudan reinsurer Haverford has withdrawn its offer buy a stake in Lloyd’s insurer Omega Insurance after the two sides failed to agree on a price.

Haverford, led by Mark Byrne, told the London Stock Exchange this morning that it informed the Omega board on December 21 that it was pulling out of all talks over buying a 25% stake in the company.

“All negotiations and discussions relating to a possible transaction in Omega shares have been terminated,” the statement said.

Omega shareholders had agreed to sell Byrne the stake for 83 pence per share last month, valuing the company at about £200m.

However Byrne’s Haverford then tabled a new offer at 74 pence per share, saying its previous bid had lapsed. Haverford raised concerns about Omega’s finances after the company reported large catastrophe-related losses in a November trading update.

Byrne had planned to become Omega’s executive chairman.

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Grahame Millwater to retire in 2012 after quarter of a century at Willis

Willis president Grahame Millwater is retiring “to pursue other interests” after spending more than 25 years at the broker.

Millwater, who also serves as chairman and chief executive of Willis Global, will become the latest executive to leave the global broker when he steps down in the New Year.

“After spending my entire professional career since leaving university with one company, I have been privileged to work with an extraordinary team of people from around the world and am retiring from Willis with many friends,” said Millwater.

“I’m grateful to Joe (Plumeri, Willis chairman and chief executive) for the many leadership roles I’ve enjoyed over the past decade and look forward to spending some time with my family and considering new opportunities.”

Steve Hearn, who was appointed chief executive of Willis Re early this year after serving as head of Willis’ London Market Wholesale Businesses will take over Millwater’s Willis Global responsibilities, becoming chairman and chief executive in addition to his role as boss of Willis Re.

In the retail business, Tim Wright, who was appointed chief executive of Willis International in October 2011 after joining the company as Group COO in 2008 will also oversee Willis UK & Ireland, which is headed by Dan Wilkinson.

Willis said Millwater will remain with the company in 2012 and will provide consulting support in 2013 during a transition period.

Plumeri said  “My partnership, and friendship, with Grahame began upon my arrival to Willis in 2000 and continues to this day.

“I join everyone at Willis in offering Grahame, and his family, my deep gratitude for his enormous contributions to our success over the past 26 years. We wish him all the very best wherever his future career may take him.”

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