Turkey: Insurers concerned about rising mandatory TP auto loss

Source: MEIR eDaily | 28 Jan 2016

The insurance industry in Turkey reported a loss of TRY1.7 billion (US$561 million) in the compulsory motor insurance business for the first nine months of last year, according to the Insurance Association of Turkey (TSB) in a statement.

The figure is three times the losses of TRY566.7 million reported for this class of business for the first three quarters of 2014 and almost double the losses of TRY884.8 million suffered for the whole of 2014.

The situation is beginning to create risks for the sustainability of insurance companies, reported the Insurance Gazette, citing the TSB statement.

The insurers have attempted to mitigate the losses by hiking premiums, a move which has drawn protests especially from the commercial vehicle sector.

The TSB said that compulsory third-party auto insurance is affected by several factors, including: lack of standards in compensation and vehicle depreciation calculation; weakening of the Turkish currency leading to increased auto part replacement costs; more accident-prone drivers on the road; and uncertainty in legislation.



Singapore: Most drivers are frustrated and stressed out

Source: eDaily | 27 Jan 2016

Drivers in Singapore are frustrated on the roads, with more than three quarters (77%) saying they are annoyed about driving conditions in the city state, while more than half (53%) report feeling stressed, say research released last week by AIG Asia Pacific Insurance (AIG Singapore)

The top three causes of irritation for Singaporean drivers are reckless driving (60%), drivers changing lanes without indicating (54%), and drivers not letting in cars wanting to change lanes (50%).

AIG Singapore’s Head of Auto, Ms Wong Siew Lee, said Singapore drivers are frustrated on the roads as they have to deal with escalating unsafe and inconsiderate behaviour. “This rise in impatient and reckless driving can be seen in latest Traffic Police data where the number of speeding violations increased by 6.5% from 261,540 violations in 2013 to 278,545 violations in 2014. Fatal accidents involving speeding also increased, from 39 accidents in 2013 to 42 in 2014,” said Ms Wong.

Young drivers

AIG Singapore’s research also found that younger drivers, in particular, engage in risky driving behaviour, with 63% of drivers aged 18 to 35 admitting to being unsafe on the roads. More than a quarter (27%) of these drivers accelerate when the traffic lights turn to amber. The research further revealed that the drivers, who are predominantly well-educated working professionals, frequently have young children on board.

Ms Wong said: “It is worrying that children are being placed at risk. Our survey results show that these drivers are more likely to programme their GPS (24%), text (20%) and use or check their mobile phones (18%) while driving.”

Young and single drivers are also more likely to be involved in a road accident. AIG Singapore’s claims data shows that drivers making the highest number of auto claims are under 35 and single, and these drivers are often fully or partially to blame for the accident. AIG Singapore has encountered cases of young drivers who borrow their parents’ cars and do not drive with care. A customer’s young son has been involved in nine accidents in the past eight years. In one of the instances, a motorcyclist was injured. Ms Wong stressed that road safety awareness and good driving habits need to be cultivated from a young age.

As part of its advocacy efforts for safer communities, AIG Singapore launched a road safety education programme in 2015 to help keep children in Singapore safe by teaching them basic traffic rules. So far, the programme has reached more than 2,600 pre-schoolers aged four to six years old.


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Bhutan’s first chopper lands

Bhutan’s first chopper lands

October 31, 2015.

Aviation: In a historic development for the aviation industry in Bhutan, the country’s first helicopter
sporting the country’s national flag, touched down at Paro international airport, yesterday.
The helicopter, an Airbus H130, arrives ahead of a November 4 expected delivery date. The
helicopter services are on schedule to be launched on November 5.

The helicopter was assembled, painted and tested in Singapore. It began its journey to Bhutan on
October 27. It stopped over in Thailand, Myanmar, and Bangladesh, before reaching Bhutan. Upon
entering Bhutanese airspace, the helicopter landed at the Gelephu domestic airport to refuel before
heading to Paro airport.

The chairman of the helicopter board, Cabinet Secretary Kinzang Wangdi, was on board the
helicopter. He joined the flight crew as a passenger from Dhaka, Bangladesh. The flight crew
consisted of two test pilots and one engineer working for Airbus Helicopters. One of the Airbus pilots
was the CEO of Airbus Helicopters.

The helicopter can accommodate up to seven passengers, excluding the pilot.
The chairman, who had never flown in a helicopter prior, said that he was initially nervous but that
the flight had been “pleasant”, quiet and comfortable. He also pointed out that it was quite an
experience given the panoramic view as a result of the large wrap-around windscreen and wide

Kinzang Wangdi said it is significant that Bhutan is receiving its first helicopter and will be
introducing its services on the 60th Birth Anniversary of His Majesty The Fourth Druk Gyalpo.
The government plans to use the helicopters for search and rescue, air medical evacuations, fire
fighting, moving cargo, transport of VIPs and government officials, and possibly even for tourism,
among others.

The helicopter will be undergoing proving flights in the next few days as required by the Bhutan Civil
Aviation Authority. Flights could occur to other parts of the country.

News of the helicopter’s arrival was welcomed by citizens on social media with many offering their
congratulations. Many posted and shared photos of the helicopter.

The helicopter will be based at the old hangar at Paro airport, which is the headquarters of the Royal
Bhutan Helicopter Services Ltd (RBHS). The state-owned company has already recruited a pilot
recommended by Airbus, and a helicopter engineer from India. Both have already started working for
the company.

The second helicopter is expected to arrive sometime mid-next year.

Gyalsten K Dorji

Risk based capital to assess solvency: IRDAI

Risk based capital to assess solvency: IRDAI 

BS Reporter | Mumbai Oct 07, 2015 12:40 AM IST

Risk-based capital approach is the preferred way to assess the solvency capital of the branch of a foreign reinsurance company operating out of International Financial Services Centre (IFSC), according to the latest report of Insurance Regulatory and Development Authority of India (Irdai)'s reinsurance committee.

The committee, headed by Thomas Mathew, however, said adopting this would take time as the matter would have to be discussed with insurance sector stakeholders.

amendments to the Insurance Act, 1938 enabled foreign reinsurance companies to open their branch offices in India and operate in the Indian market.

The committee has recommended a new cadre of 'certifying actuary' to be introduced for branch reinsurance branches. The committee also recommended that a separate certifying actuary be appointed for life and non-life reinsurance operations.

The committee noted the limited availability of qualified actuaries, especially those working in general insurance and those with requisite knowledge of reinsurance business. To overcome this, it suggested foreign branch operations of reinsurers, operating out of IFSC, be allowed to use the services of their group / regional actuary or actuarial function head as 'certifying actuary' until local talent is developed.

Further, it said Irdai may allow the repatriation of surplus from a branch of foreign reinsurer, if the available solvency margin is above 175 per cent of the required solvency margin.



Llyod's for fair and business-friendly regulations

MUMBAI: As the insurance regulator IRDAI is preparing regulations to facilitate the entry of global re-insurers in the Indian market, Lloyd's has pitched for fair and business-friendly regulations for the industry.

Lloyd's, which is planning to set up operations in India, feels there is a need for prudential, proportional regulation supporting well capitalised re-insurers.

"We also regulate the Lloyd's markets consisting of large syndicates and not only our regulations are tough, but also we operate in many global markets, having strong yet business-friendly regulations. There should be no place for bureaucratic hurdles or over-regulations blocking business development," Lloyd's chairman John Nelson said in statement.

Describing the current non-life market in the country as highly competitive one where low margin or negative returns prevail, Nelson said, "It is an under-penetrated market and we would act as a specialist insurer which has a huge potential in the country.

"We are very pleased that the Insurance Bill with Lloyd's chapter has been passed by the Indian Parliament, which will increase insurance penetration. It will aid growth of economy and help diversify some of the major risks out of country."

He expected several members of Lloyd's to set up base in the country over time, and confirmed that Lloyd's is in discussions with IRDAI on the modalities of Lloyd's entry.

There is no clarity yet on where Lloyd's branch will be established or how many syndicates will co-locate with it to India to begin with, Nelson said.

However he hinted that Indian operation will be on the similar pattern as Lloyd's Singapore operations where it has 18 syndicates underwriting the Asian business.

The Singapore operations gives Lloyd's an underwriting base to access both local and regional insurance and regional business.

India: Insurers disappointed by 'moderate' premium hikes for 3rd party auto

The insurance regulator has approved 'moderate' increases in compulsory third-party motor insurance premiums, to the disappointment of several auto insurers.

The Insurance Regulatory and Development Authority of India increased the premium rate by 14-15% for the financial year which started on 1 April, a level which is much lower than the 40-50% expected by the industry, reported The Economic Times.

The increase is also lower than that envisaged by IRDAI in its own draft report last month in which it had proposed a hike in the range of 14-108%. Third-party motor is the only business in the non-life insurance industry whose tariff is fixed by the IRDAI.

General insurers feel that the moderate hike would not ease mounting losses in the portfolio. At present, the insurers have on average a loss ratio of 140-150% in this class of business.Some of them may raise  premiums in other classes of business to compensate for the lower than expected increase.

Tata AIG General Insurance Chief Executive, Mr K K Mishra, told Press Trust of India, that in the long run,  losses in the third-party motor portfolio will strain the underwriting health of the industry.



India: Non-life insurers unprepared for IPOs

While some private-sector life insurance companies are gearing up for initial public offerings (IPOs), non-life insurers are less ready to tap the stock market for funds.

Huge underwriting losses affecting their valuations, and stiff opposition from staff unions in the case of the state-owned general insurers, are the main reasons holding back IPO plans for non-life insurers. It is expected that the valuations of general insurance companies will be less than half that of life insurers, because of claims that exceed premiums collected in some key lines of business, like motor insurance, reported Business Standard.

"Motor third-party and corporate health have seen heavy losses, because the claims incurred are much higher than the premiums collected. The books would first have to be cleared of these before  the insurers approach the regulators (Securities and Exchange Board of India and the Insurance Regulatory and Development Authority of India) with a listing proposal. Otherwise, they would not be able to sustain their return to shareholders," said the head of insurance business in a large accounting firm.

The net incurred claim ratio of general insurers is 81.9% for the financial year ended 31 March 2014, with this ratio exceeding 100% for motor third-party and aviation insurance.

"The insurers would be in a better position for an IPO after two or three years, when the overall industry improves, from an underwriting perspective," said Mr Ashvin Parekh, managing partner of Ashvin Parekh Advisory Services.

The new insurance law passed by Parliament this month paves the way for the public listing of the four state-owned general insurers. However, no decision or timeline has been decided for the listing of these entities. Their employee unions, meanwhile, are opposed to the insurers being listed.