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from Expert Zone:

Long-term motor insurance might just work

(Any opinions expressed here are those of the author and not of Thomson Reuters)

A large number of two-wheelers on Indian roads are uninsured. This is not due to high annual premiums, but because the perceived benefits of taking an insurance policy are just not apparent.

Let us briefly look at the major risks associated with having a vehicle on the roads:

The first risk is the damage to your own vehicle in case of an accident. But unlike cars, where you would run to the paint shop even if there is a small scratch, owners of two-wheelers tend to go to a service centre only if the vehicle is not functional. A paint job requirement or even a minor dent on the bumper is usually ignored.

The second is the risk of causing damage to others. This is a major risk and is covered under the third-party component of an insurance policy. This is mandatory by law as it puts others at risk. But since one generally never makes a claim for one’s own damage, the insurance policy itself is completely ignored.

from Global Investing:

The people buying emerging markets

We've written (most recently here) about all the buying interest that emerging markets have been getting from once-conservative investors such as pension funds and central banks. Last year's taper tantrum, caused by Fed hints about ending bond buying, did not apparently deter these investors . In fact, as mom-and-pop holders of mutual funds rushed for the exits,  there is some evidence pension and sovereign  wealth  funds actually upped emerging allocations, say fund managers. And requests-for-proposals (RFPs) from these deep-pocketed investors are still flooding in,  says Peter Marber, head of emerging market investments at Loomis Sayles.

The reasoning is yield, of course, but also recognition that there is a whole new investable universe out there, Marber says:

from Expert Zone:

LIC launches online term insurance plan, finally

(Any opinions expressed here are those of the author and not of Thomson Reuters)

There are 24 life insurance companies operating in India, and Life Insurance Corporation of India (LIC), the industry’s biggest player, was one of only five which did not have an online term plan, until now.

LIC had earlier tested the online waters with an immediate annuity plan, but stayed away from the most-purchased plan - online term insurance.

from Edward Hadas:

In defence of financial coercion

Last week the British government gave a new freedom to its citizens, or at least to a relatively privileged group of them. No longer will pensioners with defined contribution retirement plans be forced to invest their accumulated funds in an annuity. The old requirement was a form of financial coercion: government rules which influence behaviour.

For the pensioners in question, the new arrangement may feel like liberation. They will no longer be enslaved to a product which offers meagre yields. For the rest of Britain, though, financial freedom has probably been reduced. All taxpayers will end up paying more for the medical bills of some pensioners, those who would have had an annuity income but who might now be forced to turn to the state if they run out of money when they need expensive care.

from Expert Zone:

Health insurance sector poised for more growth

(Any opinions expressed here are those of the author and not of Thomson Reuters)

With the arrival of Cigna TTK, there are now five standalone health insurers offering products and services in India. Religare Health is also a recent entrant that started operations only last year.

At a time when we are seeing several exits in the life insurance sector, this is an indicator of the growth potential in India's health insurance sector.

from The Great Debate UK:

Britain’s floods: How do we pay the £14 billion bill?

-- Nikolas Scherer is researcher at the Hertie School of Governance and Visiting Fellow at LSE IDEAS. The opinions expressed are his own.--

In some parts of the United Kingdom, the recent floods are the worst on record. Since December 2013, over 5,800 homes have been flooded in England alone. The cost to the UK economy had been estimated at as much as £14 billion, from damage, lost business and general economic slowdown. Whatever the exact figures, the bill will be immense.

from Expert Zone:

Taking stock of the insurance sector

(Any opinions expressed here are those of the author and not of Thomson Reuters)

With half the financial year gone by, it’s time to take stock of the insurance sector. Let me start with life insurance.

It was a tough year as new norms for a majority of insurance products - which were to be effective Oct. 1, 2013 but later postponed to Jan. 1, 2014 - were hanging like a sword over the business.

from Cancer in Context:

Obamacare and Cancer – top doctor sees no maligancy

With the Obamacare rhetoric flying, the president of the nation's leading cancer doctors'  group says worried cancer patients may be unnecessarily concerned. He has come to the view that Obamacare will be a boon for cancer patients, and a high-profile advocate for the controversial new national health care policy.

"I think what’s true for your average cancer patient is that nothing changes,” Dr. Clifford Hudis, president of American Society of Clinical Oncology (ASCO), told me recently. 

from Felix Salmon:

Regulatory arbitrageurs of the day, insurance edition

Well done to Benjamin Lawsky, who is getting serious about the regulatory arbitrage which is endemic in the insurance industry -- or, as he put it in a powerfully-worded letter yesterday, "the gamesmanship and abuses associated with the setting of reserves".

The topic here is decidedly gnarly, but also extremely important. Insurance companies, just like banks, have both assets and liabilities. Their assets are generally financial investments (stocks, bonds, private equity limited partnerships, that kind of thing) -- and therefore pretty easy to calculate. Their liabilities, on the other hand, are fuzzier: at some unknown point in the future, they're going to have to pay out some unknown sum of money to an unknown number of insureds claiming on an unknown number of events.

from Financial Regulatory Forum:

U.S. financial regulation has gaps in risk oversight, insurance, infrastructure, global stability board finds

By Nick Paraskeva, Compliance Complete contributing author

NEW YORK, Sept 3. (Thomson Reuters Accelus) - A Financial Stability Board (FSB) peer review of U.S. regulation found gaps in oversight of systemic risk, insurance firms and financial infrastructure.

The report called on the United States to develop the Treasury-led oversight council into a "systematic, analytical and transparent macroprudential framework" that better coordinates the work of its member regulators. The 10 agency heads in Financial Stability Oversight Council have not always seen eye to eye.

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