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Europe Insurers Shift Focus
Life Operations
Are Expanded in Bid
To Protect Profits
By GORAN MIJUK
June 30, 2008; Page C5
ZURICH -- With prices for property and casualty insurance expected to continue falling this year, some European insurers and reinsurers are boosting their life-insurance operations and could pursue takeovers to protect premium growth and profits.
Some life-insurance markets, especially in emerging Asian economies, promise double-digit growth rates because of rising demand for life savings products from increasing numbers of affluent people. As growth for other insurance business is expected to remain sluggish in mature markets like the U.S. and Europe, analysts also expect more takeovers and business tie-ups.
[Jacques Aigrain]
NOTE: LIFE INSURANCE IS INDEED A NEED MAY IT BE IN TIMES OF CRISIS.
World-wide nonlife premiums fell 0.3% last year, while life premiums rose 4.7%, according to data from Swiss Re, which said the trend is expected to stay in place. In Russia, life-premium volume jumped 30%.
Some industry executives and analysts warn that because of a mass move toward emerging markets, growth rates may be less pronounced than expected. Many also caution that large takeovers may be the wrong avenue to boost growth because of the high cost of capital.
"The efforts to increase the life-insurance portfolio by insurance and reinsurance companies are certainly positive," says Rene Locher, a Zurich-based insurance analyst for Sal. Oppenheim. "But the move toward life insurance alone won't be able to fully compensate the fall in prices in the nonlife sector."
NOTE: RENE LOCHER IS A RESPECTED PERSONALITY IN THE INSURANCE INDUSTRY.
Swiss Re, the world's largest reinsurer in terms of premiums, is shifting focus to life, saying that prices for other insurance, especially in mature markets, are falling. Reinsurance companies provide insurance to insurers, in exchange for a fee.
"We are allocating our capital efficiently to the lines of business with the best return, for example in the life sector," said Swiss Re Chief Executive Officer Jacques Aigrain. He noted that Swiss Re has substantially reduced its exposure to insuring business risk and is now allocating more capital to life-insurance businesses, including those focused on retirement planning.
Companies and analysts say that while life insurance premiums will increase, other insurance and reinsurance prices will weaken fast this year after rising for several years. Besides fierce competition, a weakening economy in the U.S. and in Europe is also expected to put pressure on premiums this year.
Still, emerging markets make up only about a tenth of all the insurance business in industrialized markets. General annual life and nonlife premiums in industrialized countries stood at around $3.6 trillion at the end of 2007, compared with $414 billion in emerging markets.
Hannover Re, which ranks third in premium income among the world's largest reinsurers, after Swiss Re and Munich Re, also hopes that its growing life reinsurance business will help it increase profit this year. CEO Wilhelm Zeller said in June that the company expects to see "double-digit growth" in premiums and net profit from its life and health businesses. The company hopes to boost its life business by 12% to 15% this year, offsetting weak premiums in other businesses, which are expected to shrink by around 5% compared with last year.
French reinsurance company Scor SA also sees strong growth, with less volatility, in the life insurance sector, CEO Denis Kessler said Thursday.
But as the natural growth of business is likely to be too slow, insurance analysts also expect companies to engage in some mergers and acquisitions, although risks will be high given current market volatility.
At Swiss Re, Mr. Aigrain said the company isn't planning any big takeovers but is looking at buying life insurance portfolios from other insurers.
Zurich Financial Services, whose profit depends predominantly on its nonlife business, is believed to be a frontrunner in bidding for Royal Bank of Scotland Group PLC's life and nonlife insurance business. Zurich Financial has repeatedly declined to comment on the market speculation.
The financial market hasn't reacted well to Zurich Financial's presumed interest in the RBS unit, though, fearing that it might pay too much and have to raise new capital. Since the beginning of May, when the Swiss insurer was mentioned for the first time as a possible bidder, its stock has fallen around 20%.
Still, Zurich Financial says it sees growth opportunities in all insurance sectors. "It's not a matter of pitting general insurance against life insurance, since we see attractive opportunities in both", said Zurich Financial Chief Financial Officer Dieter Wemmer Thursday.
Write to Goran Mijuk at goran.mijuk@dowjones.com
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Saturday, July 5, 2008
Friday, July 4, 2008
CAN YOU AFFORD LONG -TERM- CARE INSURANCE?
Click here to find out more!
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Home > Money & Business > Planning to Retire > Can You Afford Long-Term-Care Insurance?
« 8 More Ways to Save in Retirement
Planning to Retire by Emily Brandon
Can You Afford Long-Term-Care Insurance?
June 30, 2008 01:09 PM ET | Emily Brandon | Permanent Link
Long-term care is likely to be most Americans' greatest expense of all in retirement. A private room in a nursing home costs $76,460 annually on average, or $209 a day, and Medicare typically won't cover it.
Long-term-care insurance can help protect you from some of these unpredictable costs. It can be used to pay for nursing home expenses, adult day care, and in-home help for seniors with chronic conditions or who need extra help recovering from an illness.
But this pricey insurance is prohibitively expensive for many people. AARP estimates that a 65-year-old in good health can expect to pay between $2,000 and $3,000 a year for a policy that covers nursing-home and home care. And Fidelity Investments estimates that a couple, both of whom are 65 in 2008, will need $85,000 to insure against a lifetime of long-term-care expenses.
NOTE: THINGS TO CONSIDER PRIOR TO GETTING A LIFE INSURANCE...
If you're going to buy long-term-care insurance, here are a few things to consider:
Premiums. Find out what the premium is now and what it will cost in the future. Ask if a pre-existing medical condition could influence premium prices. AARP says you may not want to buy a policy if the cost of premiums will lower your standard of living or force you to give up other things you need right now. The National Program on Women and Aging recommends that, as a rule of thumb, premiums should be less than 20 percent of your disposable income after all other essential bills are paid. So, this type of insurance is primarily appropriate for people with assets between $200,000 and $1.5 million, according to Consumer Reports. Both long-term-care expenses and insurance are so expensive that almost all middle- and low-income households rely on Medicaid for nursing home care after they spend down their assets to a level at which they qualify.
NOTE: AARP IS A WELL RESPECTED COMPANY IN THE INSURANCE INDUSTRY.
Coverage. You can choose to be covered for different varieties of home healthcare, nursing-home care, or both. Some providers offer lower premiums if you agree to a waiting period of up to 100 days before coverage begins, during which you pay all of your own expenses.
Be sure to ask about the duration of coverage. Long-term-care coverage doesn't always last that long. The average length of stay in a nursing home is 3.7 years for women and 2.7 years for men, according to Joan Bloom, a senior vice president for Fidelity Investments Life Insurance Co. You can choose a benefit period as short as two years or as long as the rest of your life. And you'll want to find out about maximum daily, monthly, or lifetime payouts and whether they are indexed for inflation. If your care costs more than the caps, you will have to pay for it out of your own pocket.
The company. Ask what happens if the insurance company should go out of business before you need long-term-care coverage. And check out its track record for paying out claims. You can examine ratings of companies online at A.M. Best, Moody's, and Standard & Poor's. Consumer Reports recommends that you buy only from insurers that are rated in the top two financial-strength categories by at least two of the ratings services. You can also check up on a company with your state insurance department.
The fine print. Read any contract you sign carefully, and ask questions. Find out how to cancel, what happens if you stop paying the premiums, how many times you can renew, and what needs to happen before you can begin using your benefits. A fee-only financial planner, whom you pay by the hour and who doesn't accept commissions for selling you financial products, can help you decipher the fine-print sales pitch.
Your state. Insurance laws and options vary by state. The nonprofit Family Caregiver Alliance has a Web tool to help consumers peruse long-term-care options in each state. And the National Association of Insurance Commissioners offers consumer tips for buying long-term-care insurance.
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Home > Money & Business > Planning to Retire > Can You Afford Long-Term-Care Insurance?
« 8 More Ways to Save in Retirement
Planning to Retire by Emily Brandon
Can You Afford Long-Term-Care Insurance?
June 30, 2008 01:09 PM ET | Emily Brandon | Permanent Link
Long-term care is likely to be most Americans' greatest expense of all in retirement. A private room in a nursing home costs $76,460 annually on average, or $209 a day, and Medicare typically won't cover it.
Long-term-care insurance can help protect you from some of these unpredictable costs. It can be used to pay for nursing home expenses, adult day care, and in-home help for seniors with chronic conditions or who need extra help recovering from an illness.
But this pricey insurance is prohibitively expensive for many people. AARP estimates that a 65-year-old in good health can expect to pay between $2,000 and $3,000 a year for a policy that covers nursing-home and home care. And Fidelity Investments estimates that a couple, both of whom are 65 in 2008, will need $85,000 to insure against a lifetime of long-term-care expenses.
NOTE: THINGS TO CONSIDER PRIOR TO GETTING A LIFE INSURANCE...
If you're going to buy long-term-care insurance, here are a few things to consider:
Premiums. Find out what the premium is now and what it will cost in the future. Ask if a pre-existing medical condition could influence premium prices. AARP says you may not want to buy a policy if the cost of premiums will lower your standard of living or force you to give up other things you need right now. The National Program on Women and Aging recommends that, as a rule of thumb, premiums should be less than 20 percent of your disposable income after all other essential bills are paid. So, this type of insurance is primarily appropriate for people with assets between $200,000 and $1.5 million, according to Consumer Reports. Both long-term-care expenses and insurance are so expensive that almost all middle- and low-income households rely on Medicaid for nursing home care after they spend down their assets to a level at which they qualify.
NOTE: AARP IS A WELL RESPECTED COMPANY IN THE INSURANCE INDUSTRY.
Coverage. You can choose to be covered for different varieties of home healthcare, nursing-home care, or both. Some providers offer lower premiums if you agree to a waiting period of up to 100 days before coverage begins, during which you pay all of your own expenses.
Be sure to ask about the duration of coverage. Long-term-care coverage doesn't always last that long. The average length of stay in a nursing home is 3.7 years for women and 2.7 years for men, according to Joan Bloom, a senior vice president for Fidelity Investments Life Insurance Co. You can choose a benefit period as short as two years or as long as the rest of your life. And you'll want to find out about maximum daily, monthly, or lifetime payouts and whether they are indexed for inflation. If your care costs more than the caps, you will have to pay for it out of your own pocket.
The company. Ask what happens if the insurance company should go out of business before you need long-term-care coverage. And check out its track record for paying out claims. You can examine ratings of companies online at A.M. Best, Moody's, and Standard & Poor's. Consumer Reports recommends that you buy only from insurers that are rated in the top two financial-strength categories by at least two of the ratings services. You can also check up on a company with your state insurance department.
The fine print. Read any contract you sign carefully, and ask questions. Find out how to cancel, what happens if you stop paying the premiums, how many times you can renew, and what needs to happen before you can begin using your benefits. A fee-only financial planner, whom you pay by the hour and who doesn't accept commissions for selling you financial products, can help you decipher the fine-print sales pitch.
Your state. Insurance laws and options vary by state. The nonprofit Family Caregiver Alliance has a Web tool to help consumers peruse long-term-care options in each state. And the National Association of Insurance Commissioners offers consumer tips for buying long-term-care insurance.
Tags: insurance | retirement
Tools: Share | Yahoo! Buzz | Comments (0)
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OTHER ARTICLES FROM THE PLANNING TO RETIRE BLOG
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* June 2008 (27)
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* April 2008 (12)
1. 8 More Ways to Save in Retirement
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4. Avoiding Bankruptcy in Old Age
5. Traditional Pensions Net Higher Stock Market Returns
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Thursday, July 3, 2008
AEGON RELIGARE LIFE INSURANCE GETS FINAL IRDA NOD
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AEGON Religare Life Insurance gets final IRDA nod
30 Jun, 2008, 1742 hrs IST, ECONOMICTIMES.COM
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MUMBAI: AEGON Religare Life Insurance Company has received the final approval from the Insurance Regulatory & Development Authority to operate in the life insurance space. The R3 license from the IRDA is the last of the three steps in the registration process.
"Our plans for the nationwide launch are now ready for execution. We will strive to delight our customers through a fresh approach, innovative solutions and seamless delivery," said Rajiv Jamkhedkar, CEO, AEGON Religare Life Insurance, which is a joint venture between AEGON and Religare.
NOTE: AEGON AND RELIGARE HAVE A VERY IMPORTANT ROLE IN THE INSURANCE INDUSTRY.
AEGON is one of the world's largest life insurance and pension companies with presence in more than 20 countries. It employs about 30,000 people, and services over 40 million customers across the world.
Religare is a leading integrated financial services institution. The company's retail network is spread in over 1,300 locations across more than 400 cities and towns in India. It has total employee strength of more than 10,000.
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AEGON Religare Life Insurance gets final IRDA nod
30 Jun, 2008, 1742 hrs IST, ECONOMICTIMES.COM
Print EMail
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MUMBAI: AEGON Religare Life Insurance Company has received the final approval from the Insurance Regulatory & Development Authority to operate in the life insurance space. The R3 license from the IRDA is the last of the three steps in the registration process.
"Our plans for the nationwide launch are now ready for execution. We will strive to delight our customers through a fresh approach, innovative solutions and seamless delivery," said Rajiv Jamkhedkar, CEO, AEGON Religare Life Insurance, which is a joint venture between AEGON and Religare.
NOTE: AEGON AND RELIGARE HAVE A VERY IMPORTANT ROLE IN THE INSURANCE INDUSTRY.
AEGON is one of the world's largest life insurance and pension companies with presence in more than 20 countries. It employs about 30,000 people, and services over 40 million customers across the world.
Religare is a leading integrated financial services institution. The company's retail network is spread in over 1,300 locations across more than 400 cities and towns in India. It has total employee strength of more than 10,000.
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Wednesday, July 2, 2008
NAMIBIA: LIFE INSURANCE, RIP-OFF OR PAY-OFF?
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Namibia: Life Insurance, Rip-Off Or Pay-Off?
The Namibian (Windhoek)
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The Namibian (Windhoek)
COLUMN
30 June 2008
Posted to the web 30 June 2008
Windhoek
Seeing the value in life insurance is often, as is the case with many intangible goods, somewhat difficult at first glance.
For example, life insurance that pays out when the insured life dies. Many people believe they will never get anything back in return for their premiums. A closer look, however, quickly shows that this is not true.
NOTE: STUDY OF LIFE INSURANCE IS HIGHLY RECOMMENDED.
In qualifying this statement, it is important to take into account that life cover generally takes on one of two forms - the one form is term insurance which will only pay out the contracted life cover should the person whose life is insured die within the agreed time period for which the cover is taken out.
The other form is whole life insurance which pays out the contracted life cover at whatever point in time the life insured dies.
It is thus clear that if a whole life policy is maintained, at some future time there will be a payoff.
The premium payable for term cover is less than for whole life cover, all other things being equal.
Whether you select a term insurance option or a whole life insurance option should be determined by the need you are attempting to address - if life cover is only needed for a very specific period of time (e.g. for bond cover where it is known in what period the bond will be repaid and there is no additional need for life cover after repayment of the bond) term cover might suffice, but as a general rule it is better and wiser to take out whole life cover.
NOTE: IT IS ALSO IMPORTANT TO LISTEN TO STORIES OF THOSE WHO GOT INSURANCE.
A short example to illustrate the value of taking out whole life insurance is outlined below: Joe is a 35 year old male accountant with a wife and two children.
Joe's financial adviser has done a capital needs analysis for him, from which it is evident that Joe's dependants would require N$1 million capital to replace the loss of income his family would suffer should he die today.
A quotation for N$1 million whole life cover on Joe's life with a level premium shows that Joe would have to pay N$ 261,00 per month for the required cover.
Joe is interested in knowing if, should he decide not to take out the life cover and instead invest the premium he would have paid towards the life cover, what returns he would need to get on his investment to be in the same position.
This situation is outlined in the following table: Monthly Return needed Dies at Age Premium to equal Paid life cover 40 (5 years on) 261,00 123,62% 45 (10 years on) 261,00 51,8% 55 (20 years on) 261,00 21,26% 65 (30 years on) 261,00 12,37% 75 (40 years on) 261,00 8,3% It is therefore clear that even if the life cover is looked at as an investment that will last for Joe's expected lifetime, it still delivers a competitive return. Whilst the return generated by life insurance is one important aspect when considering the value for money of life insurance, there is also another very important aspect to consider - the fact that nobody is exactly sure when he/she is going to die.
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This is where life cover really offers a cost effective solution to create the capital needed by the life insured's dependants. If, in our example, Joe should die in a car accident three months after having taken out his life insurance, he would receive N$1 million in return for total premiums paid of N$783,00 - a very sound investment indeed! A different way of looking at this is to say that Old Mutual in return for N$261,00 per month carries the risk of Joe dying prematurely, instead of Joe's family having to carry that risk.
NOTE: LIFE INSURANCE IS INDEED A WISE INVESTMENT SPECIALLY THOSE WITH DEPENDENTS.
From what we have highlighted above it is obvious that to extract maximum value from your insurance portfolio, your portfolio needs to be based on a proper analysis of your needs.
These needs must be reviewed regularly. For further information and advice tailored to suit your unique needs, please call your Old Mutual Namibia financial adviser or broker -This article was contributed by Mathys du Preez (Manager: Retail Advice) Centre - Old Mutual Namibia
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
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Namibia: Life Insurance, Rip-Off Or Pay-Off?
The Namibian (Windhoek)
Email This Page
Print This Page
Comment on this article
The Namibian (Windhoek)
COLUMN
30 June 2008
Posted to the web 30 June 2008
Windhoek
Seeing the value in life insurance is often, as is the case with many intangible goods, somewhat difficult at first glance.
For example, life insurance that pays out when the insured life dies. Many people believe they will never get anything back in return for their premiums. A closer look, however, quickly shows that this is not true.
NOTE: STUDY OF LIFE INSURANCE IS HIGHLY RECOMMENDED.
In qualifying this statement, it is important to take into account that life cover generally takes on one of two forms - the one form is term insurance which will only pay out the contracted life cover should the person whose life is insured die within the agreed time period for which the cover is taken out.
The other form is whole life insurance which pays out the contracted life cover at whatever point in time the life insured dies.
It is thus clear that if a whole life policy is maintained, at some future time there will be a payoff.
The premium payable for term cover is less than for whole life cover, all other things being equal.
Whether you select a term insurance option or a whole life insurance option should be determined by the need you are attempting to address - if life cover is only needed for a very specific period of time (e.g. for bond cover where it is known in what period the bond will be repaid and there is no additional need for life cover after repayment of the bond) term cover might suffice, but as a general rule it is better and wiser to take out whole life cover.
NOTE: IT IS ALSO IMPORTANT TO LISTEN TO STORIES OF THOSE WHO GOT INSURANCE.
A short example to illustrate the value of taking out whole life insurance is outlined below: Joe is a 35 year old male accountant with a wife and two children.
Joe's financial adviser has done a capital needs analysis for him, from which it is evident that Joe's dependants would require N$1 million capital to replace the loss of income his family would suffer should he die today.
A quotation for N$1 million whole life cover on Joe's life with a level premium shows that Joe would have to pay N$ 261,00 per month for the required cover.
Joe is interested in knowing if, should he decide not to take out the life cover and instead invest the premium he would have paid towards the life cover, what returns he would need to get on his investment to be in the same position.
This situation is outlined in the following table: Monthly Return needed Dies at Age Premium to equal Paid life cover 40 (5 years on) 261,00 123,62% 45 (10 years on) 261,00 51,8% 55 (20 years on) 261,00 21,26% 65 (30 years on) 261,00 12,37% 75 (40 years on) 261,00 8,3% It is therefore clear that even if the life cover is looked at as an investment that will last for Joe's expected lifetime, it still delivers a competitive return. Whilst the return generated by life insurance is one important aspect when considering the value for money of life insurance, there is also another very important aspect to consider - the fact that nobody is exactly sure when he/she is going to die.
Relevant Links
Southern Africa
Banking and Insurance
Economy, Business and Finance
Namibia
This is where life cover really offers a cost effective solution to create the capital needed by the life insured's dependants. If, in our example, Joe should die in a car accident three months after having taken out his life insurance, he would receive N$1 million in return for total premiums paid of N$783,00 - a very sound investment indeed! A different way of looking at this is to say that Old Mutual in return for N$261,00 per month carries the risk of Joe dying prematurely, instead of Joe's family having to carry that risk.
NOTE: LIFE INSURANCE IS INDEED A WISE INVESTMENT SPECIALLY THOSE WITH DEPENDENTS.
From what we have highlighted above it is obvious that to extract maximum value from your insurance portfolio, your portfolio needs to be based on a proper analysis of your needs.
These needs must be reviewed regularly. For further information and advice tailored to suit your unique needs, please call your Old Mutual Namibia financial adviser or broker -This article was contributed by Mathys du Preez (Manager: Retail Advice) Centre - Old Mutual Namibia
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
Share this on:
Digg
Del.icio.us
StumbleUpon
Muti
Copyright © 2008 The Namibian. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here.
Make allAfrica.com your home page | RSS Feed
Top | Site Guide | Who We Are | Advertising | Search | Subscribe
Questions or Comments? Contact us. Read our Privacy Statement.
HOME
allAfrica.com
Relevant Links
Southern Africa
Banking and Insurance
Economy, Business and Finance
Namibia
Centenary Bank Goes to Masaka
Govt to Probe All Banks Over Corruption Scandal
Co-Op Bank Doubles IPO Target to Sh10 Billion
Intercontinental Bank Debuts in UK
Banks Use Depositors' Money to Buy Forex
Today's Most Active Stories
* Most Read
* Most Commented
* Most Emailed
1. Zimbabwe: BBC, Stop Fanning Flames of War
2. Zimbabwe: Consensus Grows on Negotiated End to Crisis
3. Zimbabwe: Odinga Calls for AU to Suspend Mugabe
4. Nigeria: G8 Worried Over Country's Nuclear Programme
5. Zimbabwe: Mbeki Backs Mugabe in Hope of Coalition Deal
6. Zimbabwe: Mugabe Now to Crack Down on His Own Party?
7. Uganda: Do Not Play Guitar Music to a Goat's Ears
8. Zimbabwe: Situation Calls for Decisive Action
9. Liberia: President Sirleaf Arrives in Egypt for African Union Summit
10. Somalia: The Ethiopia Military's Puzzling Maneuvers in Central Region
1. Zimbabwe: MDC Tsvangirai's Political Theatrics
2. Zimbabwe: Worried Over Robert Mugabe Vs. the Western World's Press?
3. Zimbabwe: UN Blocks British, U.S. Attempts to Halt Run-Off
4. Zimbabwe: African Union Has Power to Sanction Mugabe
5. Zimbabwe: Opposition Pulls Out of Election
6. Zimbabwe: Tsvangirai - Please Grow Up
7. Zimbabwe: BBC, Stop Fanning Flames of War
8. Zimbabwe: Barack Obama Condemns Mugabe 'Brutality'
9. Zimbabwe: Tories Advocate Military Action Against Country
10. Zimbabwe: South Africa Boosts Election Legitimacy - Report
1. Zimbabwe: BBC, Stop Fanning Flames of War
2. Nigeria: G8 Worried Over Country's Nuclear Programme
3. Uganda: Archbishop Orombi's Priorities Are Wrong
4. Côte d'Ivoire: American Embassy's National Daily Press Review
5. Ethiopia: Political Landscape Worrying
6. Zimbabwe: No Support for UN Arms Embargo By China
7. Sudan: New UN-AU Chief Mediator for Darfur Appointed
8. Ghana: Scholarship Facility for ICT Students
9. Africa: Obama 'Reframes the Black Question'
10. Namibia: LLD's Striking Workers Suspended
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