Rules for ‘Too Big to Fail’ Insurance Firms Coming Soon: Fed Official
Source: Reuters | May 20, 2016
The Federal Reserve will soon take up rules for insurance companies deemed “too big to fail” intended to head off risks to U.S. financial stability, as well as requirements on how much capital firms across the industry should hold, Fed Governor Daniel Tarullo said on Friday.
The capital requirements to be unveiled in the coming weeks will follow two tracks: one for the handful of insurance companies designated as “systemically important” and one for smaller holding companies that own banks.
Zurich Restructure on Track, but Organization Still too Complex: CEO Greco
Source: Insurance Journal | May 16, 2016
While Zurich Insurance Group’s new chief executive officer believes the insurer is on the right track in terms of growth and profit, the organizational structure remains too complicated, he suggested during an investor conference yesterday.
“Zurich is world famous for [a] complex organization—for having…triple, even four layers of matrix” on its organizational map, Mario Greco said, during his first earnings conference as a Zurich executive with analysts.
Auto Insurance Customers Disappointed in Their Insurers’ Websites: J.D. Power
Source: Insurance Journal | May 20, 2016
While overall customers are more satisfied with their experience shopping online for auto insurance, they are less thrilled with the websites of individual insurance companies, with only slightly more half saying they “definitely will” return to the site for their servicing needs, according to the latest J.D. Power study.
The J.D. Power 2016 Insurance Digital Evaluation Study, now in its fifth year, measures online consumer experiences among auto insurance shoppers. The study examines the functional aspects of websites rather than such aesthetic aspects as look and feel. Consumers performed a number of tasks online and then rated the ease of performing them on a 5-point scale. Their ratings were used to compute an overall index for shopping and servicing experiences based on a 500-point scale.
Rising Premiums for Universal Life Insurance Draw Scrutiny
Source: The New York Times | May 20, 2016
Some consumers who bought universal life insurance policies decades ago are now facing double-digit premium increases to maintain the policies. The policyholders have limited options, since finding affordable replacement policies would probably be difficult now that they are much older.
The increases are drawing the attention of consumer advocates, who are urging state insurance commissioners to verify that the increases are justified. And some policyholders are taking the matter to court.
Credit Suisse Takes Out Insurance on Itself
Source: Wall Street Journal | May 17, 2016
Getting rid of unproductive assets is a good way to boost returns. Banks are still busily doing this eight years after the global financial crisis.
But now Credit Suisse has a plan to shed something that isn’t really an asset at all: it wants investors to help fund its exposure to operational risks.
The Switzerland-based bank has come up with a kind of catastrophe bond designed to put a cap on any really big losses it suffers—be that from rogue traders or systems failures for instance.
Liberty Mutual Insurance Global Consumer Markets Launches New Venture Capital Group, Announces First Investment
Source: PR Newswire | May 19, 2016
Continuing its commitment to innovation, Liberty Mutual Global Consumer Markets, the insurer’s personal insurance business unit, is excited to announce the formation of a new venture capital initiative, Liberty Mutual Strategic Ventures (LMSV), and its first investment, August Home. LMSV is a $150 million early-stage venture fund focused on the intersection of innovative technology and services and the insurance industry.
The fund’s focus areas are aligned to Liberty Mutual Global Consumer Markets’ overall innovation strategy centered on the Connected Home, Next-Generation Vehicle and Sharing Economy. LMSV seeks to support entrepreneurs in these areas to help them bring their products and services faster to market.