Using the internet as a marketing platform holds many challenges for life insurers, not least of which is product complexity. But if approached creatively, as a number of US insurers such as Nationwide Mutual already are, internet marketing can prove highly rewarding...

REINSURANCE

Converium opts out of the US

National Indemnity, a subsidiary of US financial services group Berkshire Hathaway, has bought the North American business unit of Swiss Life and non-life reinsurer Converium for $295 million. The purchase price comprised $95 million in cash and $200 million in assumption of debt.

Commenting, Converium CEO INGa Beale said: “We can now fully concentrate on building Converium’s future, with our business strategy focused on markets outside the US.”

Converium, which was spun off by Zurich Financial Services in 2001 as a separate company, has experienced considerable problems with its North American business. In 2004 the reinsurer announced that losses related primarily to underwriting between 1997 and 2001 would require a $420 million capital injection to strengthen its reserves.

Rating agencies Standard & Poor’s and AM Best, which downgraded Converium harshly in 2004, have greeted positively the ownership change positively, placing the reinsurer on credit watches with positive outlook implications.

DEVELOPING MARKETS

Metlife pumps capital into India

Metropolitan Life Insurance ( Metlife) is to inject an additional $100 million in capital over the next two years to fund aggressive growth plans in India. The US insurer has a 26 percent interest in Metlife India, a company formed in 2002 as a joint venture between itself, J&K Bank, industrial group M Pallonji and private investors. Plans include a doubling of the number of Metlife India’s branches.

A scathing attack in September by the chairman of the UK’s Financial Services Authority, Callum McCarthy, on what he termed the “unhealthy [marketing] model” being followed by the country’s life insurance industry has been underscored by a study undertaken by research and consulting firm Towers Perrin Tillinghast (TPT).

The Association of British Insurers (ABI) has published the first economic analysis of the UK government’s proposed National Pension Saving Scheme (NPSS) that it believes strongly supports a model based on free competition among product suppliers. This is in sharp contrast to a proposal made by the Turner Pensions Commission earlier this year that the number of personal account pension savings products should be limited to a maximum of ten and be supplied by one producer.

US insurers are scrambling to address the needs of a population with soaring life expectancies and those of an increasing number of post-employment clients whose retirement requirements have changed radically.

Communications programmes targeting employees can generate big increases in pension scheme enrolment, advises Helen Gilchrist, a communication consultant with UK life insurer Winterthur. In some recent incidences, this has been from below 40 percent of employees to almost 90 percent.

A landmark piece of legislation, the US Gramm-Leach-Bliley Act was supposed to create the one-stop, do-everything financial services company when the bill became law in late 1999. All of the regulatory barriers that had kept insurance, banking and brokerage separate came tumbling down, and the result was to be bancassurance – just like in Europe.

HEALTH CARETowards medical cost transparency US President George W Bush has signed an executive order ...

Workplace marketing is rapidly coming of age as people in the UK increasingly look to their employers for access to help in finding and providing financial service products, comment product analysis company Money-Expert.com and broking company thomsons online benefits in a joint research study.