Insurance & Reinsurance 01 (May 08 - Sep 14)

Insurance & Reinsurance 01 (May 08 - Sep 14)

Postby iam802 » Thu May 15, 2008 9:45 pm

From DollarDex.

http://www.dollardex.com/sg/index.cfm?c ... entID=3430
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Introducing Life Settlements Wholesale Fund
Last updated 14/May/2008

A life settlement is a financial transaction in which a policy owner who owns an unneeded or unwanted life insurance policy sells the policy to a third party for more than the cash value offered by the life insurance company. The policy owner benefits because he or she gets cash to use and enjoy while they are still alive. Policy owners are typically high-net-worth individuals aged 65 or older. The purchaser (investor) benefits because they become the new beneficiary of the policy, which pays out at maturation or on the death of the policy owner.

The Life Settlements Wholesale Fund is highly regulated and well structured to ensure continuous growth in value to unit holders on a continuous basis regardless of the volatility of financial markets. Investors will be pleased to note that this fund is non-correlated to shares, property, cash or fixed interest. As such, fund performance is not affected by fluctuating stocks and bonds, raising interest rates, skyrocketing oil prices, global economic instability or terrorism. Yield is determined by time, and not market forces.

Being the largest and most accountable life settlements fund in the world, Life Settlements Wholesale Fund is being seen as a "safe harbour" by prudent and savvy investors. The fund is expected to yield an attractive return of over 12% p.a. (actuarially estimated) for investors. Since its inception in May 2006, the fund value has grown by +24.52% as at 1 May 2008.

It is notable that Victorian Fund Management Corporation (VFMC) in Australia, has invested A$500m in the Fund in mid-2007, while a leading South African bank has invested US$100m in early 2008. Mr Leo de Bever, Chief Investment Officer of VFMC explained: "Life Settlements are attractive because of their lack of correlation with any traditional asset class." (Source: Investment & Technology Magazine, Australia, February 2008)

Over a short 23 months, Life Settlements Wholesale Fund has grown from US$10m in June 2006 to over US$1.18b in April 2008. The fund is available online at dollarDEX, only to accredited investors. The fund is listed by MAS under their Restricted Recognised Schemes.

Source: SG LIFE SETTLEMENTS
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Re: Introducing Life Settlements Wholesale Fund (DollarDex)

Postby lioninvestor » Sat May 17, 2008 10:56 pm

This fund is only for accredited investors and has an initial sales charge of 5%.
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US - Market Direction

Postby bulltick » Wed Jun 04, 2008 11:58 pm

Hi All US market gurus,

Sorry for the sidetrack here....
There is an enlightening article from the last issue of The Edge on Estate Planning.

In its last section on foreign estate duty, an insurance broker mentioned "Just because estate duties are removed in Singapore doesn't mean your overseas assets are not taxable.".............."If you have assets in other jurisdictions like in the US, you are not out of the estate duty system. If you have US$1M worth of Microsoft stocks and if you die, about half of that amount will go to uncle Sam. :shock:

These are issues that everybody needs to think about.....A straightforward way to cover your potential foreign estate duty liabilities is to buy insurance. If you have a potential liability to US estate duty of US$1M, the premium for insurance coverage of US$1M is going to be a lot less than the amount. If you bought into a US$1M policy and you were to pass away tomorrow, your US$1M will be there.

Did any of you buy any insurance to cover your US stocks portfolio?

I have an US brokerage account with OptionXpress but I can't remember if I have filled in any nomination form on the beneficiaries portion....Are any of you familiar with the beneficiaries nomination procedures?

Thanks in advance for all your feedbacks.
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Re: US - Foreign estate duty

Postby kennynah » Thu Jun 05, 2008 12:08 am

bulltick wrote:I have an US brokerage account with OptionXpress but I can't remember if I have filled in any nomination form on the beneficiaries portion....Are any of you familiar with the beneficiaries nomination procedures?.


hi bulltick : making your trading account, a joint account, will take care of intestate situation.
regards

K
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Re: Insurance Thread (formerly Life Settlements Wholesale Fund)

Postby lioninvestor » Fri Jun 06, 2008 1:39 am

Hi bulltick,

Another way is to use a product called Global Portfolio. This is a single premium insurance wrapper designed to allow clients to build their own portfolio from a wide range of different asset classes and currencies.

It bypasses the estate duty issue completely by making the foreign assets non-taxable.
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Re: Insurance

Postby winston » Sat Jun 14, 2008 10:00 am

Reverse Mortgages Promise Seniors Cash, Advisers Urge Caution By Alexis Leondis

June 13 (Bloomberg) -- Maurice Shapiro, a retiree from Miami Beach, Florida, is taking a cruise to Alaska this summer, a trip he says he never would have made without his reverse mortgage.

``I'll be 81 in two weeks and life doesn't go on forever,'' he said. ``I got a reverse mortgage and can do things I was never able to, like travel and set up college trusts for my grandnieces and grandnephews.''

Shapiro obtained a reverse mortgage from World Alliance Financial in Melville, New York. Reverse mortgages are for people aged at least 62. The loans, which lenders charge fees equal to as much as 6 percent of a home's value, allow borrowers to use their home equity to get cash tax free. After the borrowers die, or move, the lenders are repaid when the house is sold.

Pending legislation may spur more senior homeowners to consider reverse mortgages. Those who have enough equity in their homes can qualify for loans up to $362,790 backed by the Federal Housing Administration. A housing bill in Congress includes a proposal to raise the payout to as much as $550,000 and eliminate the current limit of 275,000 reverse mortgages that the Department of Housing and Urban Development can insure.

World Alliance Chief Executive Officer David Peskin said he expects the market for reverse mortgages to grow by 30 percent to 40 percent next year if the current credit crisis eases.

``We're trying to change the perception of these mortgages as loans of last resort to products that make financial sense for certain senior homeowners,'' Peskin said.

High Fees

``Homeowners who have enough cash flow should stay away because there are better alternatives for tapping the asset of their homes, like a home equity line of credit,'' said Tom Orecchio, chairman of the National Association of Personal Financial Advisors in Arlington Heights, Illinois.

The high fees are a deterrent and there isn't enough competition to make the market as efficient as it should be, Orecchio said.

Unlike home equity loans, reverse mortgages generally do not have income requirements or minimum credit scores because the interest is added to the balance and the loan isn't repaid until the home is sold. Fees are higher than traditional home equity loans and there is a cap on how much can be borrowed.

Borrowers can choose a lump-sum payment, periodic checks, a line of credit, or a combination of the three. Proceeds remaining after the loan is repaid are passed on to the heirs. The FHA ensures that the homeowners will never owe more than the selling price of the house.

Linked to Libor

For a 70-year-old homeowner in New York with a house worth $500,000, World Alliance may loan as much as $240,000, with $17,000 in fees, including mortgage insurance. The interest rate for the loan is tied to the monthly London Interbank Offered Rate, or Libor, plus a margin and starts at 4 percent as of June 5. The rate may go as high as 13.5 percent during the life of the loan, if interest rates rise substantially.

Homeowners considering a reverse mortgage should take into account their age and how long they plan on being in their houses, Orecchio said. The loans are better suited for homeowners over the age of 75, who plan on being in their homes for a minimum of five years, he said. Borrowers under the age of 75 may outlive the equity in their homes and the fees and costs associated with the loan make an early move prohibitive.

Related financial products offered to borrowers may also tie up their cash. A survey by the American Association of Retired Persons' Public Policy Institute said that 9 percent of borrowers were offered investment products such as annuities and long-term care insurance when they got their loans. Peskin said it is a conflict of interest to sell reverse mortgages along with annuities or long-term care insurance, and won't deal with brokers who do.

Home Equity

Those weighing a reverse mortgage are required to meet with HUD-approved counselors who explain the procedures and potential fees before the loan can be processed.

Shapiro said he wanted to be able to leave the equity in his apartment to family members, but when they said they didn't need it, he considered a reverse mortgage.

``People are living longer and with the prices of health care, gas and food all rising, senior citizens have to be very, very careful with their homes, which are their nest eggs,'' said Jim Dau, a spokesman for the AARP in Washington. ``It's often the most basic asset they have.''

Source: Bloomberg
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European Stocks

Postby winston » Thu Jul 31, 2008 6:57 pm

Prudential books first half loss

British insurance group Prudential said that it made a loss of 116 million pounds (HK$1.78 billion) in the first half when it was hit by lower returns on investments.

Prudential had posted net profit of 661 million pounds in the first six months of 2007, it noted in an earnings statement.

Operating profit meanwhile rose by 8.3 percent to 1.43 billion pounds in the first six months of 2008 from a year earlier, fueled by strong growth in Asia.

"Our Asian story remains compelling,'' Prudential chief executive Mark Tucker said in the earnings release.

Source: AGENCE FRANCE-PRESSE
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Insurance

Postby ishak » Sun Aug 17, 2008 6:34 pm

Is there such a thing as TOO MUCH HEALTH COVERAGE?
In times of inflation, buying private on top of group insurance may be a luxury
By Larry Haverkamp (Doc Money), August 12, 2008

THERE seems to be general agreement that everyone should have health insurance. It comes in two varieties: Basic and advanced.

The basic health insurance is MediShield. It has the advantage of being cheap. But it doesn't cover every conceivable health problem.

More advanced is private health insurance. It starts with MediShield and adds onto it. While it gives more coverage, it is not cheap.

Everyone seems to favour private shield plans. They are offered by five insurers: AIA, Aviva, GE Life, NTUC Income and Prudential.

All are CPF-approved, which means you can use up to $800 a year from your Medisave account to pay the premiums.

Of course, you can also use Medisave to pay MediShield premiums, which are much lower.

Why lower? For one thing, MediShield does not pay commissions. Private shield plans do.

Insurers do not disclose it, but agents and advisers tell me they get 10 to 15 per cent of first-year sales. The commission declines in subsequent years.

It is easy money because most people do not switch health insurers very often. Renewal is automatic.

While no one has a bad word to say about private shield plans, the high costs are a problem.

What you get compared to what you pay - claims to premiums - is low. It is much lower than either MediShield or group health insurance.

DOUBLE COVERAGE

Group insurance is a third option, but it is available only to people who work for an employer that offers it. The coverage also expires when you leave your job.

On the plus side, it offers the best value for money as the claims-to-premiums ratio is highest.

A concern has been that if you leave a job at retirement, you may be in poor health, making it hard to get insurance.

The standard advice has been to buy a shield plan when you are young, before any medical problems surface.

Of course, this means you will be paying for double coverage for many years. It makes health insurance extra expensive, especially if your back-up insurance is not MediShield but a private shield plan.

As explained, it is in the financial interest of advisers to sell private on top of group health insurance. The media also tilts in this direction.

The article, 'Shield plans spare you the worry of having to fork out thousands of dollars for that trip to the hospital' (The Straits Times, 20Jul) explained it well:

'Many people hold off buying private Shield plans because they believe that they are adequately covered by their employers. That's a very short-sighted view.

'Such covers are usually not portable, and there will come a day when you will leave your employer. Also, as you grow older, you may develop medical conditions and it is very difficult to find an insurer who will cover you once you have them.'

I agree. That is good advice IF you can afford it.

But not everyone can pay for protection that sits on the shelf for decades.

Any claims are typically made against the group insurance policy, perhaps thinking that it works like car insurance and making a claim will raise the premiums. (It won't.)

For insurers, it is the best of both worlds: Premiums are high and claims are low. The result is big profits.

Insurers earn 97 per cent of their profits from private shield insurance and only 3 per cent from group insurance.

Double coverage reminds me of my rich Indonesian friend, Jefri.

He typically orders three meals at a time so he can sample the best of each dish. (Surprisingly, he is a thin fellow.)

Big spending is okay if you can afford it. For most of us, ordering one meal at a restaurant is probably enough. One group health insurance plan may also be enough.

If it's not, an inexpensive back-up plan - like MediShield - may be a good choice in these inflationary times.
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Re: Insurance & Reinsurance

Postby winston » Sat Sep 06, 2008 8:49 pm

Munich Re May See Higher Rates, Profits in Wake of 2008 Storms
By Oliver Suess and Jon Menon

Sept. 5 (Bloomberg) -- The worst hurricane season in three years improves the odds that Munich Re and Swiss Reinsurance Co., the biggest reinsurers, can raise rates and profit next year.

Hurricane Katrina, which devastated New Orleans and socked insurers in 2005 with a record $41 billion in claims, had an upside: it pushed reinsurance prices to new highs. On the flip side, the toothless hurricanes of 2006 and 2007 were bad for reinsurers, who will try to reverse a two-year, 20 percent decline in rates when they meet this weekend in Monte Carlo.

``Reinsurance shares tend to get a boost from major disasters like Hurricane Katrina or Hurricane Andrew in 1992,'' said Thomas Radinger, who helps oversee about $80 billion, including Munich Re and Swiss Re shares, at Pioneer Investments in Munich. ``We would need to see a single catastrophe costing more than $10 billion or several disasters causing more than $25 billion in claims.''

This week's Hurricane Gustav was a disappointment by Radinger's standards. Insured damages were a less-than-estimated $3 billion to $7 billion in Louisiana and Mississippi, as Gustav lost steam and spared New Orleans another direct hit, according to the modeling firm Eqecat Inc.

There's still time, though, for 2008 to resemble 2005. Tropical Storm Hanna is forecast to strengthen and hit the Carolinas as a hurricane this week, and Ike is hovering in the Atlantic as an ``extremely dangerous'' Category-4 hurricane, according to the U.S. National Hurricane Center. Josephine could also make landfall next week.

`Sweaty Two Weeks'


``The real story is that there are three storms heading toward the Gulf of Florida,'' said Bronek Masojada, chief executive officer at Bermuda-based Hiscox Ltd., a Lloyd's of London insurer and reinsurer. ``It looks like it's going to be a sweaty two weeks.''

Colorado State University forecasters this week predicted ``well-above-average'' tropical-storm activity in the Atlantic for September, with four or five named hurricanes.

Inaccurate hurricane predictions in 2006 and 2007 made weather forecasters sound like Chicken Little and turned European reinsurers into a bad investment. Munich Re, the world's biggest reinsurer, is down 12 percent in Frankfurt trading from two years ago. Zurich-based Swiss Re, the second-largest reinsurer, is down 29 percent in the same period.

The credit crunch has compounded the drag of declining rates. Munich Re shares fell the most in five years after the company said July 25 that stock-investment writedowns will reduce 2008 profit. Second-quarter earnings fell 47 percent after Munich Re wrote down 889 million euros ($1.3 billion) on its equity investments.

Profit Drops

``We are earning a solid profit, even under the difficult conditions on the capital markets and the growing price pressure in reinsurance,'' Munich Re Chief Executive Officer Nikolaus von Bomhard, 52, said at an Aug. 6 press conference. He declined a request for an interview this week.

Zurich-based Swiss Re said Aug. 5 that second-quarter profit declined 53 percent after 362 million Swiss francs ($327 million) of writedowns related to credit-default swaps.

Munich Re is down 21 percent in Frankfurt this year and trades at about seven times estimated earnings. Swiss Re, led by Chief Executive Officer Jacques Aigrain, 54, is down 16 percent to trade at six times earnings. The multiples trail the median of nine for European insurers and 11 for the 600 companies in the Dow Jones Stoxx Index.

``While reinsurance stocks like Munich Re and especially Swiss Re are dirt cheap, one can't really expect much in terms of profit growth either,'' said Joerg de Vries-Hippen, who oversees about $26 billion as European chief investment officer at Allianz Global Investors in Frankfurt. ``That will only change if the credit crisis really cuts into the sector's capitalization or if a major disaster does so.''

Insurer Writedowns

Munich Re may be able to profit as cash-strapped U.S. insurers try to conserve capital by transferring more risk to reinsurers, said Torsten Jeworrek, head of reinsurance underwriting at Munich Re.

``The U.S. subprime crisis separated well-capitalized insurers from others,'' Jeworrek said in an Aug. 6 interview. ``Those that saw their capital depleted may have to buy more reinsurance cover going forward.''

The biggest insurers in the U.S. and Bermuda posted more than $77 billion of writedowns linked to the collapse of the mortgage market from the start of 2007 through the first quarter. American International Group Inc., the largest insurer in the U.S. by assets, accounts for about half that total, data compiled by Bloomberg show. New York-based AIG had three straight unprofitable quarters on writedowns tied to the housing slump.

`Peak Risks'

AIG considers many factors when it buys reinsurance, spokesman Nicholas Ashooh said. Capital is ``a very important factor in the life of any insurer or reinsurer,'' he said.

``The crisis has created huge writedowns on the asset side of insurance companies,'' said Stephan Kalb, an analyst at Sal. Oppenheim in Frankfurt who recommends buying Munich Re shares. ``To balance out peak risks, primary insurance companies need more reinsurance coverage than before.''

Reinsurers worldwide have not suffered capital erosion. The industry's capital was $129 billion at the end of 2007, up 20 percent from 2005, helped by retained earnings, according to a report by New York-based Guy Carpenter & Co.

``Capitalization at the four major reinsurers is very solid, as they used the last benign years to prop up reserves,'' said Markus Engels, who helps oversee about 60 billion euros, including Munich Re and Hannover Re, at Cominvest Asset Management in Frankfurt. ``Still, it would need a shock event for a real turnaround of the two-year decline of reinsurance rates.''

Gustav No Katrina

While Gustav was no match for Katrina, it did make this year's hurricane season the most costly since 2005. If initial insured-loss estimates are correct, Hurricane Gustav will rank among the 10 most costly hurricanes to hit the U.S., according to Oldwick, New Jersey-based A.M. Best Co., which tracks the insurance industry.

Hurricane Katrina holds the top spot, followed by Hurricane Andrew, with about $23 billion in claims. The next most costly hurricanes, A.M. Best said, were 2005's Wilma, $11 billion; 2004's Hurricane Charley, $8.2 billion; and 2004's Ivan, $7.8 billion.

``While the damage caused by Gustav could have been much greater, this will still represent a significant insured loss,'' said Peter Grant, a reinsurance analyst at Standard & Poor's Ratings Services in London. ``And the capital erosion caused by the credit crisis to date is comparable to a significant natural disaster in terms of its effects on the reinsurance market.''
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Re: Insurance & Reinsurance

Postby winston » Tue Sep 09, 2008 10:57 pm

From Lenahuat with thanks:-

ZURICH : The world's largest reinsurer, Swiss Re, is out of danger from major exposure to the sub-prime mortgage crisis, the group's chief executive Jacques Aigrain said in remarks published Tuesday.

"We have no further material exposure to sub-prime in our insurance products," Aigrain said in an interview with German daily economic newspaper Handelsblatt.

The reinsurer group had been hit by the crisis which unfolded from sub-prime or high-risk loans in the United States. It has written down 2.7 billion Swiss francs (1.7 billion euros) in assets so far.

Aigrain said that he was more concerned about the high level of inflation, which could have a negative impact on the insurance sector. In some emerging markets, inflation is beginning to eat into the capital base of insurers.

But this could also be an opportunity for reinsurers, he said.

"Inflation is the price for uncertainty. Uncertainty is our business. We sell certainty," said Aigrain.

On Monday, Swiss Re said insurance companies could be hit with 20 percent more claims on natural disasters this year, with losses from Hurricane Gustav possibly reaching 8.0 billion dollars.
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