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Welcome to our Monthly Newsletter – April 2008

An Established and Successful Force in International Insurance

Worldwide Risk Solutions is a U.K. based commercial organisation which has the sole objective of facilitating global business strategies and business development in the international insurance industry. For more information about us, please go to www.worldwiderisksolutions.com.

Since Our Last Newsletter

In line with the predictions of many, we have seen further expansion of carrier representation, especially in the Middle and Far East. This tends to draw attention away from the traditional markets such as Europe and North America where stable progress seem to be the words. There always appear to be changes going on with the mega-brokers and this continues. There have also been developments with some of the independent broker networks which will help them deliver promises to their members and clients.

By now most people will have booked their flights and are arranging appointments and meetings during the largest networking event of the year: RIMS. Every year more and more insurance professionals from outside North America converge on the lucky host city to renew acquaintances and conduct their business and international conferences are planned before, during and after the exhibition because everybody is “in town.” This is when many organisations review their objectives and strategies and if you would like to discuss your international strategies with us, please contact us.

This month and next month we have two HIGHLIGHT articles of genuine interest for our readers. During the past months we have received a lot of feedback on comments about Climate Change and the response from the insurance world. With kind permission from Benfield Group we are reproducing two articles on this subject from their Global Reinsurance Market Review and if you have any comments on these, we would be very pleased to pass these on.

Water, Water, Everywhere

Professor Bill McGuire, Director of Benfield UCL Hazard Research Centre, discusses the escalation of flood risk. 2007 is described as the year of the flood. Predictions suggest that changes in precipitation are one of the biggest consequences of climate change. Areas of high population density and large wealth concentration, namely, North America, the UK and Europe and the tropical East and South East Asia, all face the prospect of increasing flood exposure.

Global floods

Worldwide, 2007 was the year of the flood. In the UK, torrential summer rains caused flooding of 55,000 homes and businesses in the north east and central England with damage costing more than USD8bn (USD6bn insured).1 Daunting as this sounds, other countries fared far worse. In Africa, two million people suffered the most devastating floods in 35 years, with 650,000 losing their homes, while across Pakistan, India, Nepal and Bangladesh, monsoon floods disrupted the lives of 20 million people and left 1,500 dead.2 Catastrophic floods were also reported from countries as far apart as Korea, China, Indonesia, Argentina, Haiti, Mexico and Nicaragua. The widespread flooding of 2007 might be regarded as a blip, if it were not for the fact that we are seeing progressively more floods. For example, the annual number of major floods worldwide has escalated from around 100 in the early 1990s to more than 250 in the first few years of the new millennium3 and the number of severe flood events has doubled since 1980.4

In the last 15 years more than 1,000 river flood related disasters have taken well over 100,000 lives across the world, made life a misery for billions, and caused economic losses of close to one trillion US dollars. In China alone, where flooding on the Yangtze, Yellow and other rivers dwarfs anything seen elsewhere on the planet, biblical-scale floods in 1991 and 1998 each affected more than 200 million people. 2005 was another bad year, and floods in the Yangtze Basin took close to 2,000 lives and displaced 14 million people. The annual cost of river flooding in China now typically amounts to several billion US dollars, peaking in 1998, with economic losses estimated at USD32bn, and insured losses are progressively increasing. There have always been devastating river floods, but it seems now as if there are even more of them. Few places are immune, with the Mississippi Basin in 1993, much of the UK in 2000 and 2007, Central Europe in 1998 and 2002, and great tracts of Bangladesh and China disappearing beneath the floodwaters almost every year. To read the complete report online please click here.

To read the complete report on the escalation of Flood Risk, Global Floods and the Human Factor, please click here.

In reproducing this Highlight article we would like to acknowledge the whole team and writers at Benfield Research (www.benfieldgroup.com e-mail benfieldresearch@benfieldgroup.com telephone +44 (0)20 7522 4125) whose work we gratefully appreciate.

Our next e-newsletter we will continue to feature Highlight articles in collaboration with Benfield Research at Benfield Group. The second will discuss some of the responses to handling the cost of Flood Risk.

If you would like Worldwide Risk Solutions to conduct an economic, business and insurance survey of any international markets please contact us – Details below.

Worldwide Risk Solutions has access to a wide client base of internationally oriented organisations. Why not utilise this knowledge and experience? We can conduct a swift appraisal of your global activities or answer any questions you may have about international developments. Call +44 (0)1444 450 919 or send us an e-mail and we will respond immediately. And should you be passing through London, please let us know.

For more information about any of the items discussed in the current or previous issues of WoRdS, please see our Contact Details

George Worsley, Director
Worldwide Risk Solutions
Telephone +44 (0)1444 450 919
E-mail info@worldwiderisksolutions.com

Talk Around the Bazaar

  • The General Insurance Association of Japan is planning to take more than US$18 billion of investment income from the Compulsory Automobile Liability Insurance funds to support victims of traffic accidents
  • The large Dutch carrier Aegon has taken over Ankara Emeklilik which will stimulate the Turkish life and pensions market. There is also talk of Takaful products soon to be made available, most likely from large local carriers. According to official statistics, only 20% of all buildings are insured against earthquake
  • The Chinese government is considering the integration of the insurance, banking and securities sectors in an attempt to harmonise supervision
  • Also in China, Taiwan’s largest life insurer, Cathay Life and mainland insurer China Eastern Holding have jointly expanded their network of offices to six throughout the country – another example of integration at work
  • And lastly on China, there have been calls to set up a national catastrophe insurance fund and the first step will be to arrive at generally agreed definitions
  • The Taiwan government is set to raise the retirement age from 60 to 65 – a sign of the times
  • In India, talk has stated again about raising the limit of foreign ownership of local companies from 26% to 49%. This, plus official figures claiming that detariffication has barely affected the premium income of private sector insurers, may result in even more interest from abroad
  • Vietnamese authorities are looking for help in covering the cost of health insurance and may double the contribution to the Health Insurance Fund from 3% to 6%
  • There are noises that with eyes on foreign markets the Russian bear is ready to roll. Whereas foreign investment in Russian companies is limited to 25%, Russian companies are looking at countries where no such limitation exists, thus allowing them a controlling interest

  • Risk Management Solutions (RMS) has announced the launch of the first ever probabilistic model to enhance the way account underwriters quantify and manage exposure to fire risk. Aimed at primary commercial and specialty insurers and reinsurers, the RMS Account Fire Model provides an explicit link between engineering best practices and the account underwriting process and supplies comprehensive data at the account level, which has been unavailable until now
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    We are currently discussing projects in the following markets and are regularly being asked to attend the annual conferences and meetings of the major networks:

  • Cambodia
  • Canada
  • France
  • Germany
  • India
  • Ireland
  • Italy
  • Netherlands
  • New Zealand
  • Poland
  • Portugal
  • Romania
  • Singapore
  • United Kingdom
  • U.S.A.
  • Vietnam
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    We continue to work with a growing number of networks to improve and expand their international capabilities.  If you have not already spoken to us about expanding your international markets, now might be the right time for us to conduct a feasibility study. For more information, please see the contact details below.

    What Clients Say

    “Worldwide Risk Solutions has helped us understand the markets where we wish to do business"

    “Our access to foreign markets has been greatly improved with the help of Worldwide Risk Solutions”

    * * * * * * * * * *

    Worldwide Risk Solutions has access to a wide client base of internationally oriented organisations. Why not utilise this knowledge and experience? We can conduct a swift appraisal of your global activities or answer any questions you may have about international developments. Call +44 (0)1444 450 919 or send us an e-mail and we will respond immediately.

    CONTACT US

    BY POST
    Worldwide Risk Solutions LLP
    20 Blunts Wood Road
    Haywards Heath
    West Sussex
    RH16 1NB, England

    BY TELEPHONE
    Telephone: +44 (0)1444 450 919
    Mobile: +44 (0)7968 191 511

    BY E-MAIL
    info@worldwiderisksolutions.com

    BY SKYPE
    Skype Name: georgeworsley

    Disclaimer
    Information appearing in WoRdS is checked for technical accuracy but is not intended to provide a basis of knowledge upon which advice can be given. Worldwide Risk Solutions accepts no responsibility for any loss occasioned to any person acting or refraining from action as a result of the material included in this newsletter.