Insurers of burnt container ship make interim payment to Sri Lanka for cleanup, compensation
The insurers of X-Press Pearl ship, which caught fire and sank off the western coast of Sri Lanka two years ago, have made an interim payment to the Sri Lankan government, a minister said Sunday.
Minister of Justice Wijeyadasa Rajapakshe told local media that the payment will cover the cost incurred by the Maritime Environment Protection Authority (MEPA) for the beach clean-up operations and compensation for the fishermen affected by the maritime disaster.
Sri Lanka’s treasury has received 890,000 US dollars and 16 million rupees (around 49,400 dollars) as the interim payment, the minister said.
The second interim environmental assessment report compiled by the MEPA-convened expert committee priced the environmental damage from the X-Press Pearl disaster at 6.4 billion dollars.
The ship, registered under the flag of Singapore, caught fire near Colombo Port in May 2021 when carrying 1,486 containers with 25 tons of nitric acid and several other chemicals and cosmetics.Source: Xinhua
WTW Survey: IFRS 17 disrupting business as usual for insurers
Insurers have revealed major post-implementation challenges still need to be overcome after reporting their half-year 2023 results under IFRS 17 for the first time, according to a worldwide survey by WTW (NASDAQ: WTW).
The study, which polled 235 insurers from 37 countries/markets and is believed to be the industry’s most comprehensive IFRS 17 survey, includes 160 (68%) reporting for the first time during 2023.
Key findings:
IFRS 17 progress: While material progress has been made, survey participants state that much work remains post-implementation.
Major challenges ahead as IFRS 17 moves into production: Data, availability of skilled resources and systems/technology remain the three greatest challenges.
Barriers to understanding and explaining results: Only 55% of 2023 reporters feel “very confident” in explaining IFRS 17 simple scenario results to senior management or investors. This falls to only 18% and 9% when explaining complex scenarios and extreme scenarios respectively. More than half of 2023 reporters are not ready to perform business planning/P&L projections based on IFRS 17/9.
Far from “business as usual”: With almost 70% of 2023 reporters expecting a longer working-day timetable (WDT), most insurers recognised substantial work is required to move IFRS 17 into business as usual reporting to address critical issues. Besides shortening the WDT, this includes material system/process improvements, as well as developing a greater analysis and understanding of IFRS 17 results.
Dividend-paying capacity unaffected: Nearly all 2023 survey participants declared that dividend-paying capacity has been unaffected by IFRS 17.
The total cost faced by the global insurance industry to implement the IFRS 17 accounting standard is now estimated to be US$21-27bn. This represents a substantial 15% increase compared to the previous assessment made in 2022. Average cumulative programme costs for the largest multinationals are now predicted to be US$240m each, and US$30m each for the remaining insurers.
Kamran Foroughi, Global IFRS 17 Advisory Leader at WTW, said: “With insurers facing hefty costs to implement IFRS 17, future investments need to be strategic and targeted, delivering quick and tangible benefits. Substantial operational efficiencies also need to be found to maximise the benefits of IFRS 17 and move the reporting into business as usual.”
Insurers raise premiums for Black Sea tankers as tensions mount – traders
Insurance companies have notified charterers of ships operating in Russia’s Black Sea ports of an increase in additional payments known as “war risk premiums”, four traders said.
A war risk premium was added to the common insurance costs for tankers last year after the start of Russia’s military action in Ukraine, which Moscow calls a special military operation.
Military actions in the Black Sea area of Russian and Ukrainian Black Sea ports have escalated since the grain export deal fell apart in mid-July.
Most recently Russia reported several attacks at its Black Sea ports. So far, oil loadings from Russia’s Black Sea ports have not been affected by the attacks, but risks are mounting, traders said.
The war risk premium was increased from around 1% of the cargo’s cost to some 1.20-1.25%, the traders said.
The increase means every voyage will cost $200,000 per one Suezmax tanker (can carry 120,000-200,000 tonnes) more if Russian oil is delivered to India. The rise in the premium means the overall cost of the premium will be almost $1 million.
Although the sum is not huge it adds to Russia’s overall oil export costs, which have soared since February 2022 due to sanctions.
At the peak of Russian supply and sanctions crisis Russian companies were paying as much as $20 million per tanker towards insurance shipping and freight costs representing more than a third of each cargo’s value.
Traders added the increase was mostly applied to cargoes carrying Russian oil and products, while the premium of cargoes carrying Kazakh origin volumes was generally stable around 1%.
“Volumes originated from Russia are associated with higher risks than others, though current situation gives insurers lots of reason to raise prices for anyone operating in Russian Black Sea ports,” one of the traders said.
Grain traders have expressed concerns about the security of grains shipments and the rise in war risk premium for oil tankers shows the worries have spread to wider markets.
Overall loadings from Black Sea Novorossiisk and CPC terminal account for some 2% of global supply. Oil product exports from Russia’s Black Sea ports is about 4 million tonnes per year.
Source: Reuters
World’s Largest Insurers 2020: AM Best Ranks UnitedHealth
UnitedHealth Group Inc. takes the top spot in AM Best’s ranking of the world’s 25 largest insurance companies for a sixth straight year, with $189.7 billion in net premiums written (NPW) in 2019.
In addition, Allianz SE and Prudential Financial, Inc. jumped ahead of AXA S.A. into the No. 1 and No. 2 spots, respectively, in AM Best’s ranking by 2019 non-banking assets.
AM Best released the rankings of the world’s largest global insurance companies, by NPW and non-banking assets, in the Jan. 4, 2021, issue of BestWeek. AM Best said the two rankings are based on BestLink data and additional research. Overall, the annual non-banking ranking saw some reshuffling in the top 5, while the leading five companies in the NPW ranking remained in their spots from the previous year.
CVS Health Corp. Group moved up in the NPW ranking for a second-straight year, driven predominantly by its acquisition of Aetna Inc., climbing to No. 16 from No. 20. In the latest non-banking asset ranking, UK-based Prudential plc dropped to No. 20 from No. 8 in the previous ranking, following completion of its demerger with investment management business M&G plc.
The top 10 global insurers ranked by 2019 NPW are as follows:
1. UnitedHealth Group Incorporated, United States2. Ping An Insurance (Group) Company of China Ltd., China3. AXA S.A., France4. China Life Insurance (Group) Company, China5. Kaiser Foundation Group of Health Plans, United States6. Anthem, Inc., United States7. Allianz SE, Germany8. People’s Insurance Company (Group) of China Ltd., China9. Assicurazioni Generali S.p.A., Italy10. Centene Corporation, United States
The top 10 global insurers ranked by 2019 non-banking assets are as follows:
1. Allianz SE, Germany2. Prudential Financial Inc., United States3. AXA S.A., France4. Berkshire Hathaway Inc., United States5. Nippon Life Insurance Company, Japan6. MetLife Inc., United States7. Legal & General Group plc, United Kingdom8. Ping An Insurance (Group) Company of China Ltd., China9. Japan Post Insurance Co., Ltd., Japan10. China Life Insurance (Group) Company, China
FRISS and Munich Re Extend Partnership to Bring Value to Insurers Globally
FRISS, the market leader in AI-powered fraud and risk solutions for the P&C insurance industry, today announced to have extended their partnership with Munich Re, one of the world’s leading providers of reinsurance, primary insurance and insurance-related risk solutions, to now globally support insurers in their fight against fraud.
Extension of the contract follows on the successful cooperation in Latin America and Iberia, where both parties work extensively together to fight fraud and mitigate risks at P&C insurers. The parties now agree to support insurance companies worldwide.
Munich Re’s Global Consulting Unit is driving transformative change in the insurance industry through the application of data science and digitalization. The unique FRISS solutions provide a fully integrated hybrid combination of powerful AI, predictive models, network analysis, and text mining and over 600 out-of-the-box risk and fraud indicators, that are used by insurers for real-time risk assessment at underwriting, fraud detection at claims and investigations at the special investigation unit. These will be part of Munich Re’s consultative portfolio to bring value to the customer besides traditional reinsurance services.
Munich Re and FRISS will combine industry best practices and come up with practical solutions to help develop and improve business. Insurers will benefit from more efficient operations and fast-track customer service, which increases the customer satisfaction and experience.
Joachim Mathe, Head of Munich Re’s Global Consulting, says: “Many of our insurance clients see the need to increase efficiencies, reduce claims costs and improve their competitive edge by an increased use of automation. To take full advantage of these new opportunities, insurers must arm themselves with relevant digital and data analytics competency including a modern IT system supporting such competences. The combination of our strategy expertise and global player know-how with AI-powered fraud and risk solutions provided by FRISS, will help our clients make effective big picture decisions.”
Ariane Braam-Verkoren, SVP Global Alliances at FRISS, says: “I’m extremely happy with the extension of our partnership with Munich Re. This is a confirmation of trust after our fruitful cooperation we have had for years in Latin America and Iberia. As an established Insurtech, FRISS helps insurers to transform their business. Together with Munich Re we can enable the digital transformation of our clients even better. We will globally work on making insurance more honest.”