Aetna scoops top efficiency
Fiserv teams up with Stone Point
Getting tough on
Prudential Financial sees
Brazilian potential…
UK marketing
opportunity knocks…


Aetna scoops top efficiency honours

Aetna has walked off with top honours in an efficiency ranking of
US national commercial health insurers. The adjudication was
performed by athenahealth, a provider of business services to
physician practices and was based on the analysis of 2007 data from
12,000 medical services providers representing 30 million medical
cost lines.

Seven performance parameters were assessed with the most important
in terms of total scores being speed of payment to physicians,
claims settled on first submission and claims completely

On speed of payment to physicians Aetna achieved an average of 26.9
days, ahead of overall second-ranked Cigna (30.1 days) and overall
third-ranked Humana (32.6 days).

In the second category there was little between the top three
insurers. Cigna settled 95.8 percent of claims on the first
submission and Aetna and Humana 95.6 percent.

Based on overall claim denials Aetna achieved a level of 5.9
percent, followed by Cigna (6.4 percent) and Humana (6.6



Fiserv teams up with Stone Point Capital

US financial services technology developer Fiserve has agreed to
sell a 51 percent stake in its specialist life and general
insurance unit to Trident IV, a private equity fund managed by
Stone Point Capital (SPC). The fund will invest $205 million in
equity and $335 million in debt in the unit in which is to be named
Fiserv Insurance Solutions (FIS) Fiserv will retain a 49 percent
stake in FIS.

“Stone Point Capital brings a proven track record of insurance
industry success that we believe will accelerate the growth
opportunities for Fiserv Insurance Solutions,” said Jeffery Yabuki,
Fiserv’s president and CEO.

SOC investments in the insurance sector include Wilton Re, a
Bermuda based life reinsurer established by SPC in 2004, Paris Re,
a Bermuda based general reinsurer, and Lockton International, a
holding company formed in 2006 to acquire insurance broker
Alexander Forbes’ International Risk Services which has operations
in the UK and Latin America.



Getting tough on mis-selling

The Senior Investor Protections Enhancement Act, aimed at curbing
mis-selling of investment products to people aged 62 and older, has
been introduced in the US Senate. “This bill will ramp up the
punishment for those who advantage of older Americans’ well-earned
retirement savings,” said Senator Herb Kohl, one of the bill’s

Kohl and the bill’s co-sponsor Bob Casey explained that their
motivation for introducing the bill was that seniors are
increasingly being offered many new but complicated investment
tools such as reverse mortgages and various annuity products. They
stressed that while products such as these can be very valuable to
Americans generally and seniors specifically, they can also be

Under the proposed act, penalties for existing mis-selling
violations could include an additional $50,000 civil fine for each
violation that is primarily directed toward, specifically targets,
or is committed against a senior.

The senators noted that seniors account for more than half of all
investor complaints received by state securities regulators.



Prudential Financial sees Brazilian

Prudential Financial has taken its first step into the Brazilian
asset management market with the acquisition of a 40 percent stake
in GAP Asset Management of Brazil (GAP) for an undisclosed sum. The
investment in GAP will be housed in the US life insurer’s
Prudential International Investments unit.

The initial focus of the strategic partnership will be in the areas
of retirement, wealth management and the development of mutual fund
products for institutional investors, sectors Prudential believes
have “great potential”. Notably, the World Wealth 2007 study
published by Capgemini and Merrill Lynch reported that Brazil’s
high net worth individual population grew by 19.1 percent last
year, the third highest increase in the world.

Acquisition of a stake in GAP marks Prudential’s third venture in
Brazil. The first came in 1998 with the establishment of Prudential
do Brasil Seguros de Vida which is focused primarily on whole and
term life insurance. The second move came in 2000 with the
establishment by Prudential Real Estate Investors (PREI) of a
regional office in a joint venture with a Brazilian bank. In 2003
PREI acquired full control of this venture.



Technology gives UK insurers the edge

Effective use of technology is enabling UK insurers to lead the
world when it comes to integrating underwriting, back office and
claims systems to support new products. This was the finding of a
joint study by Irish government agency Enterprise Ireland and
research firm Datamonitor.

According to the study UK insurers take an average of 3.75 months
to complete the integration of new products. The global average for
this integration process was found to be 5.1 months and, taking an
average of 9 months to complete integration, Nordic insurers took
the longest.

“The variation in the time it takes insurers to integrate new
products is indicative of global attitudes toward using technology
to improve efficiency,” observed Judi Blackmur, a financial
services senior advisor at Enterprise Ireland, when commenting on
the findings.



Aon eliminates the guesswork

Aon Consulting, a unit of insurance brokerage company Aon
Corporation, has launched Aon Annuity Finder, an online service
aimed at UK companies with defined contribution (DC) pension funds.
The objective of the service is to enable companies to assist their
DC fund members in making sound retirement investment

Aon explained that based on individual member details and
requirements, the service provides accurate quotes from most
leading annuity providers within seconds. The service also provides
DC fund members with access to a helpline staffed by qualified
annuity consultants.

Highlighting the need for the service Aon noted that the difference
between the best and worst annuity rates can be as high as 30
percent, a level that would equate to an income loss to UK
pensioners of £350 million ($697 million) a year.



UK marketing opportunity knocks

Pensioners in the UK represent a big marketing opportunity for life
insurers. There is, however, one significant hurdle to overcome:
apathy of the target market.

By and large UK pensioners are well off but most pay scant
attention to maximizing income from their assets, reveals research
by Prudential. Indeed the UK insurer found that a mere 17 percent
of pensioners have consulted a financial adviser for guidance on
their pension and maximising their retirement income.

Assets and savings of retirees are not inconsiderable. Excluding
their pensions, couples have average savings and assets of £269,479
($535,000) while single pensioners have an average of £134,739,
found Prudential.

Of these totals the average amount of equity tied up in pensioners’
homes (minus outstanding mortgages) is £134,145 for a retired
couple and £67,072 for a single pensioner. A further 35 percent is
in cash, stocks and shares, equivalent to £95,649 per retired
couple and £47,824 per single pensioner, with the rest split
between insurance policies and other assets (minus debts).

“The average pensioner could substantially boost their retirement
income simply by using their savings and assets in different ways
and exploring other options such as equity release to deliver an
income,” commented Retail Life & Pensions unit’s MD Gary



NAVA initiative takes a big step forward

US variable annuity trade association NAVA Incorporated has made
available a technology framework to assist annuity distributors and
insurers participating in its Straight Through Processing (STP)
Standards Initiative. Termed a common reference architecture model
the framework was jointly developed by NAVA and technology giant
International Business Machines (IBM).

“This is the first time that any segment of the financial industry
has undertaken a business process automation programme of this size
and magnitude,” said IBM Software Standards’ vice-president Karla

NAVA vice-president Deborah Tucker explained that the STP
initiative seeks to “address the existing complex, inefficient and
highly regulated,” manually-intensive and paper-constrained annuity
business processes.

“STP is the first programme of its kind to comprehensively address
these issues by defining a streamlined annuity sales process that
is all electronic and in compliance with federal and state
regulations,” Tucker says.

“The reference architecture is an important component in our
ongoing effort to facilitate industry-wide implementation of
STP-compliant technologies and services.”

Areas covered by NAVA’s STP standards include annuity sales
suitability, uniform processes for electronic signatures,
electronic forms, privacy policies, and records management.



ING enters Turkish pension market

Marking its first move into Turkey’s pension market Netherlands
bancassurer ING is to acquire full control of Oyak Emeklilik, a
voluntary pension fund, from OYAK Group, Turkey’s armed forces
pension fund. Commenting on the €110 million ($173 million) cash
deal Jacques de Vaucleroy, a member of ING’s executive board, said
that it provided ING with a “unique opportunity” to expand in the
fast growing Turkish market.

Established in 2003, Oyak Emeklilik is the first and only voluntary
pension fund in Turkey specifically established for private pension
fund management and has over 150,000 customers. Product
distribution is via independent agents and ING Bank Turkey,
formerly Oyak Bank which ING acquired from Oyak Group in June 2007
for $2.67 billion.

Within the first year after the closing of the acquisition of Oyak
Emeklilik it will be integrated into ING Insurance Central Europe
and re-branded under the ING brand.



More consolidation in Australia

Australia’s health insurance industry appears set for further
consolidation following confirmation by Australia Health Management
(AHM) that it has received a conditional acquisition proposal from
government-owned Medibank Private, the country’s largest health
insurer. The move comes as UK insurer BUPA’s Australian unit is at
an advanced stage of closing the acquisition of Australian health
insurer MBF, a development that will create a merged entity closely
rivaling Medibank in size.

If successful the acquisition of AHM would add about 250,000
members to Medibank’s existing membership of 3 million. The latter
total represents about 30 percent of Australia’s private health

Medibank’s rationale for the proposed acquisition was to gain
access to AHM’s expertise in prevention and health management
programmes. “AHM is currently managing these programmes better than
any other health insurer,” said Medibank’s MD George Savvides in a



South African industry bodies to merge

Indicative of the increasingly integrated nature of the financial
services industry four South African industry associations,
including the Life Offices’ Association (LOA), are to merge. The
LOA will join the Association of Collective Investments, the
Investment Management Association of South Africa and the Linked
Investment Service Providers Association.

The as yet unnamed unified association, which will be formerly
inaugurated on 1 October, is the result of a two-year study aimed
at creating a single body that can engage with government and
regulators on policy issues. “The trend of convergence in the
financial services industry has necessitated that the investments
and life industry start speaking with one voice,” said the LOA’s
CEO Gerhard Joubert.

Seven life insurance executives will represent the industry as
directors of the new association.



China Post gets life insurance go-ahead

Yet another life insurer is set to enter the Chinese market
following the granting of a license to China Post Group by the
China Insurance Regulatory Commission. To be launched within a year
the new insurer China Post Life Insurance Company will have an
initial capital of CNY500 million ($73 million), according to a
release by Xinhua, China’s official news agency.

China Post Group was established December 2006 as the business unit
responsible for mail delivery and the operation of the China Postal
Savings Bank (CPSB), launched in April 2007. CPSB is the country’s
fifth largest bank and had total assets of CNY1.8 trillion at the
end of May 2008, according to Xinhua.

China Post Life will focus farmers, low-income urban residents and
migrant workers in cities, reported Xinhua. China Post is already
actively marketing third party insurance products via its 36,000



Ping An and IMG partner in China

International Medical Group (IMG), a specialist in international
health insurance administration, and China’s second largest life
insurer Ping An have joined forces to offer Ping An GlobalSelect –
a health insurance product it claims is “tailored for the domestic
Chinese market.”

“Because the product can cover expatriate and local nationals who
are internationally mobile makes it unique in the market,” said
IMG’s president Joseph Brougher. The product is available for
individuals, families and companies with two or more employees
living, working or traveling worldwide.

Headquartered in the US IMG designs, distributes and administers
insurance products and is represented in 170 countries. IMG’s
products are underwritten by Sirius International Insurance
Corporation, a unit of Bermuda-domiciled White Mountains Insurance
Group, a holding company with interests in general insurance and



US life expectancy still on the increase

The death rate in the US is on the decline reveals data published
by the Center for Disease Control’s (CDC) National Center for
Health Statistics.

Based on 2006 findings the CDC reported that the age-adjusted death
rate fell to 776.4 deaths per 100,000 population from 799 deaths
per 100,000 in 2005, while death rates for eight of the 10 leading
causes of death all dropped significantly.

Among the most significant falls in disease related deaths were
recorded in strokes (down 6.4 percent compared with 2005), heart
disease (down 5.5 percent) and diabetes (down 5.3 percent).

Notably, Alzheimer’s disease overtook diabetes as the sixth leading
cause of death in the US in 2006.

In tandem with lower disease-related deaths, life expectancy is
also on the increase. The average life expectancy at birth rose to
78.1 years in 2006, up 0.3 years compared with 2005. Record-high
life expectancy was recorded for both white males and black males –
76 years and 70 years, respectively – and for white females and
black females – 81 years and 76.9 years, respectively.



US individual life activity disappoints

Continuing a trend now extending over more than two years, new
individually underwritten life insurance business in the US
declined again in June 2008.

According to market analytical company MIB Group application
activity in June was 0.9 percent down compared with June 2007 and
brought the total decline for the first six months of 2008 to 2.5
percent compared with the first half of 2007.

The only growth in new business in June was in the 60 and over age
group, where continuing a more than one year trend activity was up
5.1 percent compared with June 2007. During the second quarter of
2008 activity in this age category was up 4.2 percent compared with
the second quarter of 2007.

Activity in all other age categories continued to retreat in June
with the most significant year-on-year decline – 2.3 percent –
experienced in the up to 44 year age group. In the 45 to 59 age
group activity fell by 0.5 percent year-on-year.



UK DB membership slumps to all-time low

Membership of non-government defined benefit (DB) pension schemes
fell to an all-time low in 2007, reveals data from the Office for
National Statistics (ONS).

According to the ONS there were 2.7 million employees still
accruing new DB pensions in 2007, down from 3 million at the end of
2006. In addition only 1.3 million of these employees worked for
employers who still offer DB pensions to new staff.

John Ball, head of consultancy Watson Wyatt’s UK DB unit,
commented: “In 2004, the Pensions Commission thought the decline in
defined benefit provision might never get this bad. In fact, it has
already got worse. These figures are already a year out of date and
more employers have closed their schemes in that time.

“Defined benefit pensions have not died out completely, but the
companies sticking with them are increasingly few and far between,”
he added. “Most have decided that the costs are simply too big and
too unpredictable.”



BUPA heads east

The European Health Plan (EHP), a new product focused on consumers
in new European Union countries, has been launched by UK health
insurer BUPA.

Available in Bulgaria, the Czech Republic, Estonia, Hungary,
Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia EHP
provides customers with access to treatment in hospitals or clinics
anywhere throughout Europe as well as cover for chronic diseases
such as diabetes, worldwide emergency travel and the facility to
add dental and optical cover.

“The region is developing rapidly,” said Bupa International
European development consultant Steven

Martin. “With the European Health Plan, Bupa International is
meeting the growing demand for international health insurance from
companies and expats, as well as local professionals who want to
ensure all their health needs are covered.”

The EHP, which costs from €507 ($780) per person per year, also
provides customers access to BUPA’s worldwide medical assistance
helpline, which is staffed by a team of advisers who, between them,
speak 34 languages.



ING gets go-ahead in Ukraine

The Netherlands bancassurer ING has received approval from
authorities in the Ukraine to establish a life insurance unit in
the country.

“Starting this life insurance greenfield is in line with ING’s
sharpened strategic focus on banking, investments, life insurance
and retirement services,” said Jacques de Vaucleroy, a member of
ING’s executive board.

ING is aiming to establish a leading position in the Ukraine’s
small but fast growing life insurance market that in 2007 recorded
a 68.7 percent increase in total premium income to $151 million,
according to reinsurer Swiss Re.

Premium income averaged a mere $3.30 per capita, the lowest of any
European country, and represented 0.1 percent of the Ukraine’s GDP
in 2007.

The life insurance unit, which is expected to begin operations in
the first quarter of 2009, builds on ING’s presence in the Ukraine
dating back to 1994 when it established leasing and wholesale
banking services operations.

In June 2008 ING extended its activities in Ukraine when it
commenced the roll out of a retail banking network of 250 outlets
which ING believes will enable it to become one of the top five
retail banks in the country.



Groupama builds on its position in Turkey

Already well established in Turkey, French insurer Groupama is to
further entrench its presence with the acquisition of 100 per- cent
of specialist agricultural insurance company Güven Sigorta and its
life insurance subsidiary Güven Hayat from the Central Union of
Agricultural Credit Co-operatives for €180 million ($283

Turkey’s 15th largest life insurer Güven Hayat, which was
established in 1973, generated total revenue of €13 million in 2007
giving it a 1.2 percent market share. Güven Hayat joins Groupama’s
existing life insurance unit in Turkey, Groupama Basak Emeklilik
which it acquired in February 2006.

Groupama Basak Emeklilik ranked as Turkey’s second largest life
insurer in 2007, a position it has improved on this year. According
to data published by the Association of Insurance and Reinsurance
Companies of Turkey, Groupama Basak Emeklilik generated premium
income of TRY127.08 million ($104 million) in the first three
months of 2008, ranking it first with a market share of 27.5

Groupama noted its latest Turkish acquisitions are in line with its
strategy of international development which combines organic growth
and acquisitions.

The insurer added that its objective is to reinforce its presence
in each country where it operates and to bolster its positions on
the fast-growth markets of Southern, Central and Eastern