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Top 10 industry news stories of the week: August 9 – 15, 2013 | Canadian Insurance
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Top 10 industry news stories of the week: August 9 – 15, 2013

EGI to sell US insurance operations; Applied Systems to release TAM 2013

Get up-to-date on the latest P&C insurance industry news, company reports and ratings, and product releases.

The Top 10 industry news stories of the week:     

1. EGI Financial agrees to sell US insurance operations:  EGI Financial Holdings Inc., which operates in the property and casualty insurance industry in Canada, the United States and Europe, has entered into a definitive stock purchase agreement with White Pine Insurance Company, a Michigan-based specialty insurance company, to sell its United States non-standard automobile insurance operations. EGI announced that the transaction will result in a pre-tax $5.7 million reduction in book value. “The results of our U.S. business were not tracking to profitability as quickly as originally planned,” commented Steve Dobronyi, CEO, in a press release.  “The exit from the U.S. is expected to add $0.30 per share to our annual 2014 earnings and will allow management to concentrate its time and resources on our profitable Canadian and European businesses.” 

2. Applied Systems announces upcoming release of Applied TAM 2013:

The upcoming release will introduce an enhanced user interface to improve the user experience and increase user productivity. Many new capabilities in Applied TAM 2013 were identified in collaboration with the Applied Systems Client Network’s (ASCnet) Product Advisory Committee (PAC) to drive growth and profitability in today’s rapidly changing insurance marketplace. These product enhancements include updates to the user interface and greater integration with Applied MobileProducer and the upcoming release of Applied CSR24 2013 to improve the user experience and increase online customer self-service capabilities and mobility.

Read: Real-Time Real Deal?

3. Zurich releases updated Z-Choice Policy: Property and casualty insurer Zurich has announced that Z Choice, one of its fixed facility environmental liability suite of products, has been newly revised to include built in coverage features, including emergency expenses and crisis management. The new form provides for increased usability while being easily customizable to help meet a variety of insureds’ needs and requirements in an ever changing legal and regulatory marketplace. A key enhancement of the revised Z Choice Policy is the elimination of sublimits within the Emergency Expense Coverage. “Eliminating emergency expenses sublimits is a one of the key coverage enhancements in today’s  marketplace,” said Bob Newmarker, head of Zurich in North America’s Environmental Site Practice, in a press release. “Z Choice gives policy holders the ability to know that emergency expenses may not be restricted by a specific sublimit.”

4. Aviva plc release interim results: Aviva plc has released its interim results for 2013. According to the company, results in the six months to 30 June 2013 were satisfactory, with operating profit from continuing operations 5% higher, driven primarily by expense reductions. Aviva continues to focus on improving the capital efficiency of its business through lower new business strain, more efficient back-book cash generation and improved remittances, states a release. “In the first half we have taken a number of steps to deliver our investment thesis of cash flow and growth. These results show satisfactory progress in Aviva’s turnaround,” said Mark Wilson, group chief executive officer, said in a press release. “We have achieved profit after tax of £776 million, in contrast to the £624 million loss last year. Cash flows to the Group have increased by 30% to £573 million. Our key measure of sales – value of new business – has increased 17%, driven by the UK, France, Poland, Turkey and Asia. Although these results continue the positive trends of the first quarter, tackling our legacy issues will take time. I am committed to achieving for investors what we set out to do: turning around the company to unlock the considerable value in Aviva.” Aviva plc had a half-year combined operating ratio (COR) of 92.4% vs. 89.8% for the same period last year. The increase is directly attributable to the number of flooding-related claims in Alberta, states an Aviva Canada representative.

Read: Aviva plc focused on “disposing of under-performing assets”

5. EGI Financial Holdings reports Q2 results:  EGI has reported net operating income of $5.2 million, or $0.43 per diluted share, for the three months ended June 30, 2013.  This compares to a net operating loss of $0.6 million, or $0.05 per diluted share, for the same period in 2012. The company reported underwriting income of $3.2 million, compared to a $4.3 million loss in the second quarter of 2012; overall combined operating ratio of 94%, compared to 110% in the second quarter of 2012; and a 23% increase in direct written premiums over the same period in 2012 to $81 million. “These are our best underwriting results in over five years”, stated Steve Dobronyi, CEO of EGI, in a press release. “We exceeded our overall profit targets, despite the impact of natural disasters on industry results and we continue to generate steady increases in book value per share, despite the impact of rising interest rates on our investment portfolio.” He added: “All of our businesses recorded improved underwriting results over the same period in 2012. Our core Personal Lines business continues to produce consistently strong results, and has now reported underwriting profits in 10 of the past 11 quarters.”

6. Policy Bill introduces the Everest Payment Plan: Everest Insurance Company of Canada and Policy Bill have joined forces to provide a “Point of Sale” solution for monthly payment plans on most Everest Insurance policies. Now Everest Insurance Underwriters can provide a monthly payment plan for clients with qualifying policies. The payment plan is pre-approved; once signed by the insured, the broker submits it directly to Policy Bill. 

See: Photos from the Policy Bill Broker Bash

7. Cellutrak releases Driver Behaviour Module: Cellutrak’s Accident Reconstruction Interface (ARI) and Driver Behaviour Module have come together in a single package to promote driver safety. The ARI system acts as a “black box” recalling the events leading up to a crash while the driver behaviour module acts a corrective measure for poor driving patterns, including harsh breaking, speeding and excessive overturns. Based on the data collected from the driver behaviour module, a fuel and score card are created, ranking driver performance. This gives parents, for example, a measurable way to monitor the progress of young drivers and businesses the ability to track their fleets’ safety and fuel consumption. As a result, vehicle owners and insurance companies can make considerable savings on auto insurance premiums, states a Cellutrak release.

8. Manulife Financial and RBC Insurance enter into travel insurance business arrangements: Manulife Financial has entered into an agreement with RBC Insurance Company of Canada in which Manulife will reinsure the travel insurance coverage sold by RBC Insurance through travel agencies. The arrangements include transitioning to Manulife the sales and distribution support of RBC Insurance’s travel agency insurance business. In addition, the travel agencies will be offered the opportunity to renew their agency agreements with Manulife upon the expiration of their current RBC Insurance contracts. RBC Insurance will continue to be the insurance provider to the travel agencies until the expiration of the current travel agency contracts. Manulife Financial will make employment offers to the majority of the RBC Insurance employees who provide sales, and sales support, directly to the travel agencies. The arrangements are not subject to regulatory approval and are expected to commence during the third quarter of 2013. Financial terms of the business arrangements were not disclosed.

Read: Canadians risk travelling without insurance

9. Applied Systems acquires Insurecom to expand operations into the UK:  Applied Systems, Inc has acquired Insurecom, a software and connectivity solutions company serving the insurance industry in the United Kingdom.The acquisition of Insurecom will operate as Applied Systems UK and will enable Applied Systems to establish company-owned operations in the UK and deliver greater service and new products to the marketplace. Insurecom had been an Applied Systems business partner for more than 10 years and was the exclusive distributor of Applied TAM to insurance brokerages in the UK. “As longstanding business partners, our companies have a strong foundation in place to quickly integrate operations and begin delivering greater service and new products to customers in the UK insurance market,” said Reid French, CEO, Applied Systems, in a press release. “Expanding our international operations enables Applied Systems to deliver enhanced support to our growing list of multinational customers as the insurance industry continues to globalize.”

10. Oil Insurance Limited Declares $100 Million Premium Credit for 2013 : The Oil Insurance Limited (OIL) board of directors, at the July 2013 board meeting, approved a $100 million premium credit for current (2013) Shareholders, who were shareholders of record on December 31, 2012. This credit will approximate a 16% reduction in total premium charged to the membership during 2013. Members will see the premium credit in their 4th quarter premium billing. “OIL is in a strong financial position as a result of healthy investment returns and positive underwriting results over the past 18 months. We regularly evaluate our value proposition to make sure that our members benefit from the positive results of our long term investment strategy and premium system,” said Robert D. Stauffer, president & CEO of OIL, in a press release.

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