Best's Review articles from May 2004

Best's Review archives from May 2004

The long haul.(Editor's Prologue)(Editorial)
May 1, 2004... Recently my son asked me, "What's the use of buying a new computer when a year from now, it will be obsolete?" Technology continues to roll forward at a rapid pace, forcing individuals and businesses alike to make critical spending decisions...

Right attitude and right customers.(Comment)(Letter to the Editor)
May 1, 2004... The article, "Beat the Spread" (Best's Review, March 2004), left me wondering whether either of the authors had any experience in managing a workers' comp program. Certainly no one would argue that effective claims and expense management...

Mortality expectations and exceptions.(Comment)(Brief Article)
May 1, 2004... I would like to commend the author of "A Matter of Time" (Best's Review, March 2004) for writing on such a timely issue. I would like to add a few comments to help enhance the discussion on the topic of preferred underwriting. I agree with...

USAA.(People in Insurance)(Brief Article)
May 1, 2004... USAA has named Kristi A. Matus president of USAA Life Insurance Co., succeeding James M. Middleton, who recently retired. She is responsible for the company's investment portfolio as well as the company's life insurance, health insurance and...

Marsh Inc.(People in Insurance)(Brief Article)
May 1, 2004... Marsh Inc. named Robert B. Jones head of strategy. Jones will be responsible for the development and implementation of the company's strategic plan, including acquisitions. Most recently, Jones served as leader of global business development...

Willis Group Holdings Ltd.(People in Insurance)(Brief Article)
May 1, 2004... Willis Group Holdings Ltd. has named Leslie Nylund executive vice president as well as New York regional executive officer. Jeanette Scampas was named executive vice president. Scampas is responsible for Willis' information systems and...

Covering summer games in Athens proves an Olympian task for insurers.(Highlights From BestWeek)
May 1, 2004... The rapid approach of the 2004 Olympics is giving added meaning to the word "risk." Athens, this year's host city and the site of the original Olympics, will be staging a modern Games against an ancient backdrop that's among the world's...

USAuto Holdings Inc.(People in Insurance)(Brief Article)
May 1, 2004... USAuto Holdings Inc. named Charles D. Hamilton senior vice president, chief financial officer and treasurer of USAuto Holdings Co. Hamilton succeeds CFO Michael Bodayle, who will serve as CFO and treasurer of the insurance company...

Allmerica Financial Corp.(People in Insurance)(Brief Article)
May 1, 2004... Allmerica Financial Corp. named Marita Zuraitis president of Allmerica's property/ casualty companies. Zuraitis will be responsible for the personal and commercial lines operations at Citizens Insurance Company of America, Hanover Insurance Co....

Endurance Specialty Insurance Ltd.(People in Insurance)(Brief Article)
May 1, 2004... Endurance Specialty Insurance Ltd., the Bermuda subsidiary of Endurance Specialty Holdings Ltd., named Daniel Izard head of the company's reinsurance operations. Izard will remain executive vice president of the company's aerospace division....

By the numbers.(Most broker acquisitions have been made in the United States, but they are also expanding in Europe.)
May 1, 2004... As risks become more complex in the property/casualty market, brokers are facing greater demand for their services. According to a Swiss Re Sigma study "Commercial Insurance and Reinsurance Brokerage--Love Thy Middleman," the broker's role has...

Meetings.(Brief Article)(Calendar)
May 1, 2004... May 10-12 America's Health Insurance Plans and the American Health Lawyers, 15th annual Law Conference for Health Plans, Providers, and Insurers, The Ritz-Carlton, Amelia Island, Fla. Phone: (877) 291-2247. Web site: www.aahphiaa.org. ...

U.S. Life Insurers say Japan's Kampo must stop WTO violations.(Briefing)(World Trade Organization.)
May 1, 2004... The American Council of Life Insurers says that Japan's government-run life insurer is in violation of World Trade Organization rules, and it is calling on the U.S. Trade Representative and President Bush to rectify the situation. At issue...

Senate GOP fails to pass malpractise bill.(Briefing)(Brief Article)
May 1, 2004... Despite the backing of the White House, a GOP-controlled Congress and the personal efforts of Senate Majority Leader Bill Frist, R-Tenn., an insurer-backed bill to limit jury awards in medical-malpractice cases has faltered in the U.S. Senate...

AIG joins Dow Jones Industrial Average.(Briefing)(American International Group Inc.,Dow Jones and Company Inc.)(Brief Article)
May 1, 2004... American International Group Inc.--the largest American insurer based on revenue--has been added to the Dow Jones Industrial Average index, an investment benchmark of the largest "blue chip" stocks, Dow Jones Co. said. Marking the first...

Companies picked to offer new drug card.(Briefing)(Brief Article)
May 1, 2004... The U.S. Department of Health and Human Services announced the names of companies that have been cleared to provide new prescription-drug discount cards to Medicare recipients beginning this June. The cards are an interim measure in the...

Aon: terrorism is dampening business confidence globally.(Briefing)(Brief Article)
May 1, 2004... In certain parts of the world--most obviously Iraq--terrorism is on the rise, somewhat dampening international business confidence, according to broker and insurance services provider Aon Ltd. A more surprising terrorist hot spot, according to...

Study: obesity threatens life underwriting.(Briefing)(Brief Article)
May 1, 2004... The prevalence of obesity has reached such a high level, it threatens to have a major impact on mortality trends, meaning that life insurers and reinsurers can no longer safely ignore it, a study by Swiss Re Group found. Obesity has more...

Best's Rating Changes.(Ratings)
May 1, 2004... This summary of Best's Rating Changes includes life, health-care and property/casualty insurers domiciled in North America, as well as international insurers that had ratings assigned, changed or placed under review since this section last...

Moving IT forward: insurers' new business/technology partnerships drive information technology investments.(Technology)
May 1, 2004... Insurers who outsource information technology today are doing it mostly in the United States, but tomorrow they're likely to move it offshore. Investing in wireless technology isn't a high priority for many insurers today, but before long, a...

Open for business: ever so slowly, China's market takes shape as regulatory rules solidify.(Globalization)
May 1, 2004... China, that huge potential market waiting to be tapped by the world's insurers, presents a fast-changing challenge to the legal experts of the insurance business. Since its accession to the World Trade Organization toward the end of 2001, the...

End of a tradition: Lloyd's plan to move to U.K. GAAP and then to International Accounting Standards promises to bring transparency to a traditional market that is now dominated by corporate interests.(Lloyd's Industry Strategies)(U.K. Generally Accepted Accounting Principles)
May 1, 2004... On Jan. 1, 2005, Lloyd's of London will end a tradition of more than 300 years by adopting U.K. Generally Accepted Accounting Principles and moving from three-year reporting to annual reporting. Outsiders, who have long been puzzled about the...

Defensive moves: assessing whether to try or settle a bad faith lawsuit involves many factors with much at stake for various parties.(Law)
May 1, 2004... Insurance companies are being sued with increasing frequency for violating an insurance policy's implied duty of good faith and fair dealing--or acting in "bad faith"--in the handling of a claim. Although appropriate internal policies along...

Accelerated growth: competition among companies vying for a piece of the private-passenger auto market is heating up.(Auto)(statistical data included)
May 1, 2004... After getting an A on a test at school, Bob Glasspiegel's 13-year-old son recently came home and joked, "I've got good news! I can save you 10% on auto insurance with Geico!" It was an offhand comment, but it shows the name of an insurance...

A welcome reprieve: auto rates are leveling out as claims volume shrinks.(Auto)
May 1, 2004... Drops in the number of claims filed and successful crackdowns on insurance fraud and abuse should help produce the smallest increase in average private-passenger automobile premiums in four years, according to a new projection from the...

Clarifying claims: independent, public and staff--do insurers really need all these adjusters?(Claims Adjusting)(related article: Independent adjusters - a little help from your friends)
May 1, 2004... Claims adjusters working in the insurance industry these days fall into one of three main categories: staff, independent or public. Many insurers keep a battery of claims adjusters in-house, but when need arises they can supplement those...

Protecting the stone: Jewelers Mutual Insurance finds a gem in tough security measures.(Loss Prevention)
May 1, 2004... Several years of improving claims experience have prompted Jewelers Mutual Insurance Co. to pay out the largest dividend in the company's 90-year history, as the company expands its niche market share. To be successful, Jewelers Mutual...

Priced to sell: some well-capitalized physician-owned mutuals keep competitors at bay with aggressive pricing strategies.(Medical Malpractice)
May 1, 2004... The rates physicians pay for professional liability" insurance have increased by double- and triple-digit percentages in recent years. Some doctors put the onus for the increases at the door of runaway jury awards. Others have been tempted to...

A balancing act: attaining the correct loss reserve level requires knowing how much to save today to pay claims in the future.(Loss Reserves)
May 1, 2004... During 2003, huge increases to carried loss reserves--some ranging into the billions of dollars--were announced by property/casualty insurers such as American International Group, CNA, Employers Re, Hartford Financial Services Group, and...

The actuary's role.(assessment of loss reserves and its reasonableness)
May 1, 2004... The process of estimating, testing, and opining about carried loss reserves usually is performed by professionals who are credentialed members of the Casualty Actuarial Society. Actuaries specialize in the quantification and measurement of risk...

Athletes among targets of AIG's new products.(Marketplace)(American International Group Inc.)(Brief Article)
May 1, 2004... A member company of American International Group Inc.--National Union Fire Insurance Co.--recently launched coverage for independent board members of mutual funds. Mutual Fund IDL Premier can be written either as a complement to an insured's...

St. Paul Travelers augments Global Companion product.(St. Paul Travelers International )(Brief Article)
May 1, 2004... St. Paul Travelers has introduced an enhanced version of Global Companion, an international commercial property and general liability product designed to help protect U.S.-based companies from the risks associated with conducting business...

Chubb unveils print ad campaign.(Marketplace)(Brief Article)
May 1, 2004... As part of an aggressive personal insurance marketing campaign, the Chubb Group of Insurance Cos. has launched a national print advertising program. The new ads are intended to further increase the awareness of the Chubb brand, especially in...

An untapped resource: risk management services provided through employment practices liability insurance can head off employee lawsuits.(Selling Insight)
May 1, 2004... Rate increases and rising retentions have become the norm in the employment practices liability insurance market, leading many insureds to look harder than ever at their insurance programs. Premiums are rising in many professional liability...

Asleep at the wheel.(survey shows drowsy driving takes its toll)(Brief Article)
May 1, 2004... More than one in 10 drivers admits to have fallen asleep at the wheel, and more than two in 10 admit to having momentarily dozed while driving, according to a recent survey of 1,024 drivers done by Farmers Insurance. The U.S. National...

Study: combining insurances can save time and money.(Loss/Risk Management Notes)
May 1, 2004... Employers that use the same insurer to provide short-term disability and medical coverages save more money, and get their disabled workers back on the job sooner, according to a study by Cigna. The study found that many of the main drivers...

A ruling in the cards: an insurer's duty to defend can be stretched only so far.(Loss/Risk Management Insight)
May 1, 2004... My wife and sons would like me to show more enthusiasm for my sons' collection of sports cards. My mother still comments--with great disdain--that my brother showed better care in preserving his baseball cards. I collect nothing. So my interest...

Learning on the job: education and dedication to sound underwriting will foster success in hard and soft market conditions.(Underwriting Insight)
May 1, 2004... The hard market creates a number of challenges for underwriters. From this grows a reminder for underwriters to focus on what keeps the insurance industry stable--the dedication to basic underwriting practices and continuous education. This...

Money-back guarantee: variable-annuity writers have rejuvenated their products by protecting buyers from the dark side of the markets.(Variable Annuities)
May 1, 2004... How would you like to buy a product that lets you invest in the stock market, but if you mess up, it guarantees that you make money anyway? That offer is basically the pitch some variable-annuity writers are able to make these days, and...

Unusual suspects: companies best known for selling stocks or issuing credit cards are making inroads into the life insurance marketplace through selling and manufacturing life and annuity products.(Life and Annuities)
May 1, 2004... In the hallowed halls of the life insurance market, many of the leading companies began writing their first policies long before airplanes, tea bags, and Model Ts were invented. Along the way, these giants honed the craft of writing life...

Selling the stream: life insurers are raising new capital by selling projected cash flows as an investment package.(Capital Markets)
May 1, 2004... Life insurers have traditionally relied upon the reinsurance market for outside capital. In today's economic environment, however, reinsurers' capacity is being strained. Banks are not looking favorably on long-term credit risks and thus letter...

Outside opinion: with greater accountability being demanded in the business world, independent underwriting auditors can help life insurers find problems and pass scrutiny.(Underwriting)
May 1, 2004... Equity Funding Corporation of America, which Fortune once referred to as the fastest growing financial institution in America, actually grew on the basis of fictitious life insurance policyholders and fictitious underwriting files by obtaining...

Protective life joins airline's Mileage program.(Marketplace)(Brief Article)
May 1, 2004... Buy a variable annuity and earn points toward travel on American Airlines. That is now possible under terms of a deal reached between the world's largest airline company and Protective Life Insurance Co., Birmingham, Ala., which in March...

Structured-settlements business booms for MetLife.(Marketplace)(Brief Article)
May 1, 2004... MetLife Inc. reported more than $733 million in sales last year in its structured-settlement business, up by $284 million over sales in 2002. Congress boosted the business in 1982, when it passed a law allowing claimants in lawsuits...

New hybrid life policies tackle VUL problems.(Quantum Life the new product works like variable universal life policy)
May 1, 2004... Bicycle purists say a hybrid bicycle underperforms a mountain bike oft road and a road bike on paved surfaces. But a new kind of hybrid life insurance policy may actually perform better than the sum of its component parts, says Hartford Life...

Top index annuity writer adds product.(Brief Article)
May 1, 2004... Allianz Life Insurance Company of North America, Minneapolis, has added an equity indexed annuity to its line of top-selling EIAs. The new product, the 10% Bonus PowerDex Elite Annuity, pays an immediate 10% bonus on all new premiums during...

Sizing up: managers need to measure costs and revenue to gauge the importance of size and scale in distribution.(Selling Insight)
May 1, 2004... The recent step-up in mergers and acquisitions activity highlights the importance of scale in the distribution business. Size clearly matters in determining the distributor's bargaining power to obtain favorable allowances and special...

U-shaped curves: teleunderwriting's many advantages can be undermined if underwriters consistently overstep prudent boundaries.(Underwriting Insight)
May 1, 2004... Underwriters know (or should know) that there are many so-called U-shaped curves now widely recognized and affirmed in clinical medicine. These curves have important implications for risk appraisal. Perhaps the best known is the U-shaped...

Shopping around: AgoraRe.com offers life insurers and reinsurers an online marketplace for facultative reinsurance.(Reinsurance)
May 1, 2004... Five years ago CNA Life Re created an online global submission and tracking system that continues to change the way life insurers exchange case documentation and data with reinsurers. AgoraRe.com is the brainchild of the organization now...

Packing the portfolio: portfolio management allows IT operations to be measured from a business process-centric perspective.(Technology Insight)
May 1, 2004... Portfolio management within information technology--the systems and processes by which IT investments can be financially monitored and measured--continues to evolve. While strategic investments having a significant inpact on a company's...

Insurers and agents move toward a real-time revolution.
May 1, 2004... Real-time interface--which allows users to make a request electronically and promptly receive a response--has a hand in helping insurance agencies and carriers eliminate backlogs, produce more sales and save steps in work flow, according to a...

Blue Cross Blue Shield of North Carolina.(Web News You Can Use)
May 1, 2004... Blue Cross Blue Shield of North Carolina introduced two new online consumer decision support tools. The Health Care Cost Estimator allows members to choose a condition or specific service from a menu and see the relative costs, based on the...

The Hartford Steam Boiler Inspection and Insurance Co.(Web News You Can Use)(Brief Article)
May 1, 2004... The Hartford Steam Boiler Inspection and Insurance Co. recently launched its HSB Instant-Quote, an online tool to quote and bind equipment breakdown coverage in minutes. It's designed to provide new business equipment breakdown quotes for...

Professional Data Management Again In. and American Fidelity Assurance Co.(Web News You Can Use)(Brief Article)
May 1, 2004... Professional Data Management Again Inc. and American Fidelity Assurance Co. have recently launched a new Web portal providing brokers representing the AFAmeriLife Division of American Fidelity with customized access to their client accounts,...

MetLife launches venture with Chinese Company.(Companies)(Brief Article)
May 1, 2004... MetLife Inc.said it launched life insurance operations in China through a partnership with a Chinese company that owns airports and hotels, among other businesses. The Beijing-based joint-venture company, Sino-U.S. MetLife Insurance Co....

Prudential closes the deal for Cigna retirement business.(Companies)(Brief Article)
May 1, 2004... Prudential Financial Inc. has completed its $2.1 billion cash purchase of the retirement business of Cigna Corp., the companies announced. The agreement between Prudential and Cigna excludes Cigna's corporate life insurance unit and its...

Safeco sells life unit at a loss to focus on P/C.(Companies)(Brief Article)
May 1, 2004... Seattle-based Safeco Corp. has agreed to sell its life and investment operations for $1.35 billion to a group of investors led by White Mountains Insurance Group Ltd. and Berkshire Hathaway Inc. The sale by Safeco includes Safeco Life &...

Transfer of Blues licenses cleared in WellPoint merger.(Companies)(Brief Article)
May 1, 2004... The Blue Cross Blue Shield Association has unanimously approved transfers of Blues licenses related to the merger of WellPoint Health Networks Inc. and Anthem Inc., which would create the largest health insurer in the nation, according to the...

AIG defends its terror insurance pricing.(Companies)
May 1, 2004... American International Group Inc., facing charges from state regulators that it's charging too much for terrorism coverage in its workers' compensation policies, said it's simply trying to make sure it can continue to fund the huge amount of...

Opinions, theories differ in terror rate setting.(Companies)
May 1, 2004... At the root of American International Group Inc.'s ongoing dispute with state regulators over terrorism pricing is the company's dislike for how the Insurance Services Office and the National Council on Compensation Insurance set rates last...

Allstate agents ask judge to reconsider 'tender back' order.(Companies)(Brief Article)
May 1, 2004... Attorneys for former Allstate agents have asked a federal judge to reconsider his ruling that agents seeking to void their waiver agreements with the company would have to pay back any benefits they were paid. The motion, filed with Judge...

Doctor-owned insurer gains Florida license.(Companies)(Brief Article)
May 1, 2004... Now that it has received a license from Florida regulators, a new, doctor-owned medical-liability insurer said it already has gained more than 100 members and even is lifting good risks from the state's overcrowded Joint Underwriting...

Farmers settles Texas mold case with policyholder Ballard.(Companies)(Brief Article)
May 1, 2004... A long-running legal dispute between Farmers Insurance Group and policyholder Melinda Ballard that drew nationwide attention to the issue of "toxic mold" has been settled, both sides confirmed. "The parties have agreed to a confidential...

The other soft market: real estate in the City offers a window on the London market.(The Last Word)
May 1, 2004... Soft markets are not always bad for the insurance industry. Take the London property sector, for instance. Consolidation, staff cutbacks and continuing construction have contributed to an excess of office capacity in London's financial...