When it was first introduced at the 1964 New York World’s Fair, the Ford Mustang instantly became a classic American vehicle. The “pony car” became the pace car for that year’s Indianapolis 500, became the first vehicle to win the Tiffany Gold Medal for excellence in American design and captured the hearts of drivers and muscle car fans across the country.

To date, nearly 8.5 million Mustangs have been sold in the United States, but more than 600,000 of those have been stolen.

The US-based National Insurance Crime Bureau (NICB) is looking at the Ford Mustang in its Hot Wheels Classics report.

NICB reviewed Mustang theft data from 1964-2011 and identified 611,093 theft records. Although data for all years is available, confidence in pre-1981 records is low due to the inconsistency in reporting protocols and vehicle identification number (VIN) systems in use prior to 1981.

Since the National Highway Traffic Safety Administration required VIN standardization beginning with the 1981 model year, that year is the oldest reliable data used in this report, NICB says.  Data prior to 1981 is provided for information only.

Overall, from 1981 through 2011, a total of 411,155 Mustangs were reported stolen. The most thefts occurred in 1981 (20,708) and the fewest in 2011 (4,347).

Thefts vs. Sales

During the 30-year period from 1981-2011, a total of 4,110,110 Mustangs were sold in the United States.  However, over the Mustang’s entire lifespan through the end of 2011, a total of 8,450,741 units have been sold in the United States.  The single year with the most U.S. sales was 1966 with 549,436. Conversely, 2009 logged the fewest Mustang sales reaching only 66,623 units.*

The following graph shows the top 10 most stolen Mustang model years for the period 2001-2011. Overall, a total of 91,152 Mustangs were stolen during this time frame; the top 10 listed below accounts for 45,421 thefts or 50 percent of all thefts during that period.

The NICB once helped reunite a stolen Shelby GT-350 with its owner … 25 years later. In 1982, a Mustang owned by a young Marine stationed at Cherry Point, North Carolina, was stolen.  This was no ordinary Mustang; it was a 1965 Shelby GT-350.  The Marine soon deployed and never saw that car again—until 2007 when an NICB agent contacted him with news that his Mustang was located in Maryland.

In the intervening years since it was stolen, the Mustang’s true identity — its VIN — had been painstakingly altered and matched with a fraudulent title.  It was then sold to an unsuspecting buyer who eventually put a new $12,000 Shelby engine in it.

The duped owner was contacted in 2007 by the Maryland State Police and an NICB special agent asking to inspect his Shelby.  As you can imagine, he was absolutely dazed when they informed him that his prized possession was, in fact, stolen property.

That young Marine from 1982—now a professional airline pilot—was overjoyed when he was notified that his dream car had been recovered and was in excellent condition.  And, in a classy gesture of goodwill—he was not legally required to do so—the pilot gave the former owner a check for $12,000 for the engine.

Watch the video of this reunion from NICB:

You might also be interested in: Top 10 stolen vehicles in the United States in 2010 

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Insurer MetLife Inc. plans to buy Eastern European insurance divisions from London-based Aviva PLC as part of its strategy to expand overseas and focus on markets it considers high growth.

MetLife did not disclose financial terms of the deal Monday.

The acquisition is subject to regulatory approval and should close by the end of the year, according to MetLife.

Metlife plans to buy Aviva’s life insurance businesses in the Czech Republic and Hungary, and its life insurance and pension businesses in Romania.

The deal offers MetLife a chance to boost its product offerings in Europe while reaching more customers, Michel Khalaf, president for Europe, the Middle East and Africa said in a statement.

Aviva said in a statement that selling the units is part of its plan to focus its operations in regions where its business is already strong. In December, the company ended its United Arab Emirates partnership with National General Insurance Co. In October, Aviva sold its Investors’ Australian business.

Shares of MetLife fell 32 cents to $35.20 in morning trading Monday.

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Kingsway Financial Services Inc. announced that it is implementing an action to effect a reverse stock split of the Company’s common stock.  The action is intended to ensure that Kingsway remains in compliance with the New York Stock Exchange (NYSE) continued listing standards.  Under NYSE listing standards, the closing price of a stock cannot be under USD $1 for more than 30 consecutive trading days. Kingsway’s stock has been recently trading in the $0.63 range.

Kingsway said the reverse stock split has been approved in principal by the Company’s Board of Directors and remains subject to final Board action and shareholder approval.  The insurer says the reverse stock split is being planned in conjunction with “reviewing various other strategic alternatives including possible acquisitions or mergers to enhance shareholder value.”

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Navigators, a Lloyd’s syndicate, has launched a first-of-its-kind Directors and Officers (D&O) product to protect corporate directors for defence costs.

The policy – NavDefence – offers dedicated defence costs coverage for directors where a charge has been placed on the main D&O policy, and it’s available for directors of private and publicly-traded corporations domiciled in Australia and New Zealand – and for international corporations operating within the region.

Lloyd’s said since introducing the product just one month ago, the number of new clients buying NavDefence is in the double-digits.

Navigators said it recognized the opportunity for such a product following an Australian High Court judgment against directors of Bridgecorp, a company that had gone bankrupt in 2007. The company owed $500 million to creditors and directors were not able to use defence costs under the company’s $20 million D&O policy, leaving them without cover for their criminal defence costs.

“In light of the recent Australian Institute of Company Directors (AICD) survey results and the recent judgment by the Auckland High Court in the Bridgecorp case, directors have felt vulnerable to the potential of funding their own defence costs despite having traditional D&O policies in place,” says Carl Bach, Head of Syndicate 1221′s Navigators Pro division.

Lloyd’s said that while the target market for NavDefence remains Australia and New Zealand, there could be opportunities for the product to be rolled out in other areas if the law in those jurisdictions could make directors vulnerable to being without cover.

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Natural disasters, like the 2011 Japanese earthquake and tsunami, are risks. Economic crises, like that occurring in the Eurozone, are risks. Supply chain risks in an increasingly connected world are risks. But what about some of the “quieter” risks? Insurance broker Willis, through its expert bloggers on WillisWire, has identified “a new set of thorny problems that may be keeping risk managers up at night.” From fracking to space tourism, obesity to batteries, the bloggers, have assembled their thoughts about the 18 top emerging risks for 2012 in the feature “What New Risks Will Emerge in 2012?”

The WillisWire Emerging Risks Round-up includes:

• Energy: “Fracking”
• Environmental: “Fracking”
• Mining: “Contingent Business Interruption”
• Supply Chain Interruption: “Issues at Subtier Suppliers”
• Trade Credit: “Political-Economic Turmoil”
• Financial Institutions: “Bradley Manning 2.0”
• Terrorism: “Cyber Terror”
• Aerospace: “Space Tourism”
• Power & Utilities: “Sodium-Sulfur Batteries”
• Health Care: “Booming Physician Employment”
• Renewable Energy: “Uncertainty Caused by National Energy Policies”
• Captives: “Transfer Pricing”
• Political Risk: “Continued Unrest in Egypt & Libya”
• Analytics: “Over-Reliance on Models”
• D&O: “International Cooperation of Regulators”
• Engineering: “‘Hold Harmless’ Legal Contracts”
• Life Sciences: “’No Fault’ Compensation for Clinical Trial Patients”
• Employee Safety: “Obesity Epidemic”

Willis says some of the risks identified by the WillisWire bloggers might not yet be front-and centre on companies’ radars, like the “perfect storm of cross-border cooperation between regulators” brewing outside boardrooms globally. However, other exposures, like the risks associated with hydraulic fracking for natural gas, are starting to grab headlines with several lawsuits (but no big claims as of yet) making insurance hard to find.

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German reinsurer Hannover Re says the company is expecting “a major loss” as a result of the incident involving the Costa Concordia.

“The loss expenditure from marine hull insurance will be in the region of EUR 30 million (CAD $39 million) for the company’s net account,” the company wrote in a statement.

Hannover Re added that at this point, liability claims are difficult to assess but a market loss running into the triple-digit millions of euros is possible.

“The total loss for Hannover Re – as a leading marine reinsurer – could therefore be in the mid-double-digit million euro range,” the statement added.

You might also be interested in: Carnival reports it self-insures for loss of use of sunken Costa Concordia vessel 

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Swiss Re’s Board of Directors has appointed Michel M. Liès, currently Chairman Global Partnerships at Swiss Re, as new Group Chief Executive Officer as of 1 February 2012. Michel M. Liès succeeds Stefan Lippe who is retiring after nearly three decades at Swiss Re.

The Board of Directors also announced that Moses Ojeisekhoba will join Swiss Re as CEO Reinsurance Asia and Regional President Asia, effective 15 March 2012. Martyn Parker, currently CEO Reinsurance Asia, will return to Europe.

“The Board of Directors is delighted that Michel M. Liès will assume the position of Group CEO as of 1 February 2012,” said Walter B. Kielholz, Chairman of the Board of Directors, in a statement. “Michel M. Liès’ proven track record in reinsurance and broad international experience will support our mission to become the leading player in the wholesale re/insurance industry, while ensuring strategic and operational continuity. He brings with him in-depth knowledge of all facets of the business, an excellent reputation with clients as well as with governmental organizations and tremendous insights into the growth area of emerging markets, one of our main strategic pillars”.

Moses Ojeisekhoba joins Swiss Re from Chubb Group of Insurance Companies where he has been Head for Asia-Pacific since 2009, responsible for the strategy and repositioning of Chubb’s business in this region. Chubb is a leading Property and Casualty insurer based in the US. Ojeisekhoba has spent 16 years with Chubb in various roles in the US, Europe and Asia. Prior to this, he worked with Unico American Corporation and Prudential in the US.

“Moses Ojeisekhoba’s strategic leadership, primary market experience and fresh perspective make him ideal to lead Swiss Re Asia into the next phase of growth and strengthen our position as a partner of choice for local, regional and global clients”, said  Kielholz.

Martyn Parker, who has been serving as CEO Reinsurance Asia since June 2006, will return to Europe. His future role will be announced in due course.

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Fairfax Financial Holdings Limited has entered into an agreement to acquire approximately 25 percent of the issued and outstanding shares of Bangkok-based Thai Reinsurance Public Company Limited for approximately US$70 million. As part of the purchase, Fairfax will have the right to nominate two members to the Board of Directors of Thai Re and will also assist Thai Re with its investment portfolio.

Subject to the approval of the shareholders of Thai Re, the successful conclusion of Thai Re’s previously announced rights offering and the receipt of all requisite regulatory approvals, the transaction is expected to close in the second quarter of 2012.

“We are pleased to be partnering with the leading reinsurer in Thailand,” said Prem Watsa, Chairman and Chief Executive Officer of Toronto-based Fairfax. “Surachai Sirivallop, Chief Executive Officer of Thai Re, has an outstanding track record of underwriting profitability since he began managing the company 22 years ago. We look forward to working with Surachai and his excellent management team to further develop their business.”

Thai Re is a professional reinsurer with over Baht 2 billion (US $63.4 million) in equity providing reinsurance coverage for property, casualty, engineering, marine, and life customers. Thai Re also offers risk management consulting, technical assistance, marketing support, education and information services.

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The capsizing of the Costa Concordia on January 13, 2012 has been the focus of many this week. At least 11 of the 4,200 passengers have been confirmed dead and loss estimates are hovering around between $500 million and $1 billion.

The wreckage of this ship off the coast of Italy is the newest in a long list of maritime disasters.

Perhaps most notably is the sinking of RMS Titanic in 1912 that killed 1,523. It may be the most famous of all shipwrecks, but was not the largest in terms of fatalities. The wartime sinking of the Wilhelm Gustloff during World War II, with an estimated loss of about 9,300 people in 1945 remains the greatest maritime disaster ever. In peacetime, the December 1987 loss of the Doña Paz with an estimated 4,375 dead is the largest non-military loss recorded involving a single ship. The passenger ferry collided with the Vector, an oil tanker, and sank, sparing the lives of just 24 of its passengers.

In Canada, on December 6, 1917, the city of Halifax was devastated by the unexpected detonation of the French cargo ship Mont-Blanc. Fully loaded with wartime explosives, the Mont Blanc exploded after a collision with the Norwegian ship Imo. Roughly 2,000 people were killed by falling debris, fires or collapsing buildings and another 9,000 were injured. This explosion is still ranked as the largest accidental explosion of conventional weapons to date.

Then there’s the Mary Celeste. While it may not be classified as a disaster – nor did it result in a high death toll – it has stumped historians and excited theorists for more than a century. Originally built as the Amazon in Nova Scotia in 1861 and renamed Mary Celeste after a salvage operation in 1869, the ship was found abandoned in the Atlantic Ocean in December 1872. The ship was unmanned and apparently abandoned, with one lifeboat missing. The ship was still sailing toward the Strait of Gibraltar and had been at sea for one month, with still more than six months’ worth of food and water onboard. Cargo – including 1,701 carrels of alcohol – was almost untouched. The crew’s personal belongings were in place, but none of the crew was ever seen or heard from again.

Back in present-day, marine disasters continue to claim lives and cost money. The following data from Swiss Re outlines the more recent history of marine disasters around the world.

MARINE DISASTERS, 2010 (1)

(1) Based on events classified by Swiss Re as a catastrophe. The threshold is $17.4 million in insured losses or at least 20 dead or missing, 50 injured or 2,000 made homeless.

NA = Not applicable.

Source: Swiss Re.

PASSENGER SHIP LOSSES, 2006-2010 (1)

(1) Based on events classified by Swiss Re as a catastrophe. The threshold is $17.4 million in insured losses or at least 20 dead or missing, 50 injured or 2,000 made homeless.

NA = Not applicable.

Source: Swiss Re.

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The Geneva Association, an international insurance think tank, says there are three key areas of interest for the global industry this year: financial stability; governmental management of natural catastrophes and demographics and old age society.

In a press briefing, Secretary General and Managing Director Patrick M. Liedtke made the following comments about each of these key areas.

On financial stability and insurance:

No other topic has worried nation states around the world more persistently in 2011 than the question of global financial stability. And with as yet so many unresolved issues, ranging from a reappraisal of the risk-free nature of sovereign debt to significant new regulation and the further strengthening of the global financial system, the topic will remain at the top of the list for 2012 for insurers.”

Liedtke added that financial regulation has had a “profound impact on the way capital markets and financial systems operates, as well as the velocity and parameters of their evolution.

“Only with a profound understanding of the technical issues can regulators effect sound and efficient reforms, especially for such idiosyncratic industries as insurance. Insurance is a highly complex business and is not readily comparable with any other, even if they share some common elements. Unfortunately, it is also not always well understood by those outside the industry. This creates the risk of a misunderstanding of its operations and raises the likelihood of potentially unintended consequences of a particular regulatory action.”

Liedtke said that over the last two years, the international insurance industry has work to clarify the nature of its contribution to financial stability and has proved how insurance activities are a stabilizing rather than a destabilizing element.

“The next months will see some of the most important decisions made on insurance regulation. The changes arranged during this period – for the first time ever orchestrated through the G-20 at the global level – will be very significant for the insurance industry. It is vital, therefore, that any decisions made fully respect the role of insurance and facilitate sound and sustainable risk management and risk transfer solutions upon which our modern economies depend so much.”

On the governmental management of natural catastrophes, Liedtke reiterated the great costs catastrophes had on the insurance industry in 2011, with estimated claims reaching about USD $380 billion.

“Few governments thoroughly revisited their national risk management –if they even have one. In 2012, governments must make progress in understanding the risks their country and its citizens are exposed to and how to manage them properly. Like companies, they should establish comprehensive risk management processes. The techniques and tools are readily available and while paradoxically many governments expect their industries, and especially the high risk industries, such as nuclear, chemical or transport, to install efficient enterprise risk management systems, they themselves often neglect to do so at the national level. “

The first step, says Liedtke, is governmental recognition of the vulnerabilities present – and the risks facing them.

“For example, the impact on vital infrastructure from natural catastrophes or the degree of reliance on new technologies such as the internet or “the cloud” by essential services represent risks that are not always well enough understood and often not well managed.”

The second step would include implementing risk management policies that help set incentives for people and institutions to behave in a risk adequate manner.

“Whilst governments have focused a lot of their attention on getting to grips with the financial crisis, they must also not be distracted from the very significant financial and human impacts that natural catastrophes and other risks have. Inadequate risk management on the national level can only too easily lead to social instability and chaos.”

Liedtke addresses demographics and old age security and recognizes that the world’s population is aging – and quickly.

“While financial uncertainty has increased, state-systems for old-age provision have been incapable of following the significant shift of demographic trends. Today in most countries these systems are not perceived as resilient enough so that individuals would look towards them for reassurance rather than with anxiety. For too far long, the average age of retirement and retirement expectations have remained largely static while societal expectations have considered any additional increase in life expectancy an increase in the period of retirement only. Current pension systems are still largely based on the pioneering welfare reforms of German Otto von Bismarck who in 1889 established a pension system that early on fixed the retirement age at 65 years. This age has only been reconsidered recently and changes are gradual and too painfully slow to provide much relieve for public pension systems. Extrapolating Bismarck’s retirement age relative to the average gain in life expectancy of Western European populations, the retirement age today should be somewhere north of 90 years. While nobody today is proposing such radical reform, changing one of the fundamental static aspects of the various systems used in different countries seems more than overdue.”

Read the Geneva Association’s full release online (PDF).

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The capsizing of the Costa Concordia could not have come at a worse time for the cruise industry – right at the start of the peak booking season.

Even if passengers aren’t scared away, the accident will cost hundreds of millions of dollars.

It’s too early to tell exactly how much insurance firms will have to pay out to cover the damage to the ship and loss of life, but analysts have estimated that claims could total at least $500 million. One went as far as to say the total bill for insurers could reach $1 billion

“We would be surprised if any single player had more than 5%-10% of the risk,” Numis analyst Nicholas Johnson wrote in a note. He said the risk is similar to that of the Deepwater Horizon oil spill, where no one company had more than 2 per cent of the total insurance liability.

Costa’s parent company, Miami-based Carnival Corp., which operates 101 ships under several brands including Carnival, Cunard, Holland America, Princess and Seabourn, did not respond to requests for an interview about its insurance coverage. But the company is responsible for at least $40 million in insurance deductibles.

At least 11 people died in the accident with nearly two dozen others still missing. .

The capsizing of the Concordia in the waters off Italy comes at the start of a three-month period that is the busiest time of year for bookings, known in the industry as wave season. Sales now set the tone for the rest of the year, which could be affected if passengers are frightened off by the chilling images of the stricken vessel

Although the industry has been slowly recovering from the Great Recession, this incident could further damage bookings.

“The publicity is just going to kill them,” said Blake Fleetwood, president of Cook Travel. “They’ll stay quiet for a week or two. Then Carnival will have a blitz of sales. So for the consumer, it’s going to be a great time to buy a cruise.”

Other cruise lines will follow, slashing prices, Fleetwood said.

“The baby boomer crowd, which the cruise lines are counting on to fill their cabins, is going to be especially spooked by this incident,” he added.

But some experts doubt the tragedy, which was extremely rare, will scare off travellers.

Stewart Chiron, CEO of CruiseGuy.com, a cruise marketing company, thinks the only group turned off by the accident would be first-time cruisers who were already on the fence about booking. Roughly 19 million people took a cruise last year he said without incident.

“People understand that this is an accident,” Chiron said. “I don’t think there will even be a hiccup.”

Gauging cruise demand is tricky. Unlike airplane tickets or hotel rooms which are mostly booked online by vacationers themselves, a large bulk of cruises are sold through travel agents who are paid a commission for each stateroom sold. Tour companies also book large blocks of rooms in advance from the lines and then resell them at a profit. The industry is so fragmented that most booking tare just anecdotal.

Chiron notes that the only real way to judge demand is to see if cruise lines slash prices.

“In a week or two if we are seeing $299 Caribbean cruises, then we’ve got a problem,” he said. An eight-day Carnival cruise in March currently starts at $599.

For the insurance companies, it is also too early to tell the extent of their liability. A lot depends on if the ship can be repaired or not.

Carnival has two different types of insurance policies that would cover the $500 million to $1 billion in claims from the Concordia.

HULL INSURANCE:

This insurance covers damage to the ship. Carnival is responsible for the first $30 million in damage. The rest is covered by a network of insurers led by XL Group, an Irish insurer with executive offices in Bermuda. A company spokeswoman refused to comment.

German insurer Allianz Global said it has a “minor stake” in the Concordia claims. A third firm, London-based RSA Insurance Group is liable for up to $15 million, according to an industry source. Other yet unnamed companies also will have to pay out claims.

Chicago-based Aon Corp. brokered the hull insurance deal but a company spokeswoman refused to comment.

“The amount of this hull claim will heavily depend on whether the ship can be salvaged and repaired or whether, in the worst case, the wreck will have to be disassembled on site,” Allianz said on its website.

LIABILITY INSURANCE:

The second type of insurance coverage purchased by Carnival is for personal injury liability. The company said in a statement Monday that it has a $10 million deductible on that policy. That coverage would include any payments related to injuries and deaths of passengers and crew, the cost to clean up any leaking oil and the loss of cargo.

Claims would be paid out even if the ship’s captain is found to be negligent. The cruise company has said that Capt. Francesco Schettino deviated from his approved course. Later, an Italian coast guard officer ordered Schettino back on the ship to assist in the rescue.

Cruise lines and shipping companies join together in groups, known as protection and indemnity clubs, to spread out their individual risk. Each member of the club pays in dues and then claims are paid out from the collective funds.

Carnival insured the Concordia through two clubs. The first, which has the bulk of the liability, is the Standard Club, according to a spokesman for the group. The second is through a club called Steamship Mutual. After Carnival pays its $10 million deductive, these two clubs are responsible for the next $8 million in combined liability claims.

The next $52 million in claims would be paid out by a larger collective called the International Group P&I Clubs, which represents 13 of the clubs, which insure more than 90 per cent of the world’s ocean shipping.

After that, there is a reinsurance policy taken out with large firms that would cover losses up to $3 billion, according to the Standard Club. Reinsurance companies protect insurance firms against catastrophic losses. Carnival did not take out insurance for loss of use of the ship. The company said it expects lose $85 million to $95 million in bookings.

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These are extraordinarily difficult times for insurers to grow their business, with the U.S. and Europe struggling to jump-start their economies and a double-dip recession not out of the question. But according to a new report from Deloitte, ongoing global economic challenges do not mean that growth is impossible.

By focusing on strategic growth opportunities, operational excellence and innovation, insurers can generate profit and growth, says Deloitte’s “2012 Global Insurance Outlook: Generating growth in a challenging economy takes operational excellence and innovation.”

“Global economic doldrums, low interest rates, persistently high unemployment and a sluggish housing recovery have created challenges for insurers,” said Rebecca Amoroso, vice chairman, Deloitte LLP and insurance sector leader.  “Yet even in such uncertain economic times, there are opportunities to generate profitable growth by attracting new customers and growing market share through product development, distribution and marketing reevaluation, and reinventing the customer experience. At the same time, insurers must keep transforming their operations to improve margins and drive more profit to the bottom line by adopting new technologies and management strategies to squeeze unnecessary costs out of the system, as well as employ their people and capital more productively.”

Sam Freidman, Deloitte’s insurance research leader, adds, “While achieving growth, operational excellence and innovation in such a difficult economic and competitive environment might be easier said than done, opportunities are available for insurers that can seize the moment. There are many options insurers might consider to grow even in the toughest of economies if they can overcome the obstacles they face.”

Deloitte says property and casualty insurer top lines will benefit from rising prices prompted in part by high 2011 catastrophe losses and subsequent hikes in reinsurance premiums. In personal lines, auto and homeowners carriers have both consistently seen higher, loss-driven rates while the soft market in commercial lines appears to have bottomed out with carriers and brokers reporting significant premium increases on renewals.

When looking at generating growth, the Deloitte report says insurers should look to:

Target emerging markets:  With developed economies failing to deliver consistent, large-scale growth, insurers may consider entering emerging markets including China, India and Brazil, where the financial security demands of an expanding middle class could provide significant growth opportunities.  Insurance penetration rates in 2010 reveal the ratio of non-life insurance premiums to gross domestic product (GDP) is just 1.5 percent for Brazil, 1.3 percent for China and 0.70 percent for India. By comparison, the penetration rate is 4.5 percent for the United States, 4.1 percent for Canada and 3.1 to 3.7 percent for major European countries, according to Insurance Information Institute.

Mergers and acquisitions: Mergers and acquisitions volume increased in 2011. However, deals tended to be strategic, niche acquisitions with buyers adding new product lines and distribution channels, and expanding geographic reach into emerging markets. With more carriers undergoing strategic reviews for potential mergers and acquisitions, there is potential for an uptick in bigger deals in 2012, particularly if organic growth remains challenging over the short-to-medium-term.

To achieve operational excellence, Deloitte points to:

Regulatory change:  Policyholder protection takes on increased importance for the new Federal Insurance Office as it reports to Congress by Jan. 31, 2012 about insurance regulation and potential federal oversight protection for consumers. Solvency concerns and efforts to address them have slowed, while certain insurers may face increased regulatory burdens if designated as a nationally or globally Systemically Important Financial Institution.

Enterprise risk management:  Many insurers are integrating enterprise risk management into their standard operating procedure while spreading ownership of risk throughout the strategic decision-making process. There is also an increased emphasis on governance, infrastructure and disclosure over quantitative modeling. Considering “Black Swan” events and tax risks is also a priority.

To spur innovation, Deloitte says insurers should focus on:

New products: Emerging property and casualty exposures are prompting coverage for cyber-liability, green construction, nanotechnology, global political risk, and professional liability associated with new regulations. New personal line products offer private unemployment insurance, as well as protect homeowners whose home values decline below their mortgage. More life and annuity hybrid products are emerging to meet multiple needs, such as incorporating a long-term care benefit into a life or annuity product or combining term and universal life policy attributes.

Predictive analytics: Social media appears ripe for analytic scrutiny. Many insurers have a presence in social media communities, but they have yet to evaluate the impact of their efforts and benchmark their work against competitors. Analytics can also be used to gather cross-selling insights about buyer needs, providing an advanced form of customer relationship management throughout the customer’s life cycle.

To read the full report, click here. (PDF)

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A hard insurance market may be two or three years down the road, according to insurance industry experts who spoke at the Property/Casualty Insurance Joint Industry Forum.

“Premium growth will continue to improve from where we were in the last three or four years, but I don’t expect in 2012 that we’ll see a massive increase in premium,” said Matt Mosher, A.M. Best Co.’s senior vice president of global ratings, in a statement after the forum.

With a more normal catastrophe experience in 2012, Mosher said he’d expect returns to improve. “But it’s still a tepid recovery and a tepid turn in the market,” Mosher said.

As far as a hard market, “We’re not quite there yet,” he said. “I think we’re still a year or two out.”

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Swiss Re’s sigma team said that 2011 would have been the costliest year ever for the insurance industry if Japan had been more fully insured. Regardless, catastrophes cost the global economy a record $350 billion last year and the insurer says seismic events alone caused economic losses of over $276 billion.

Still, despite the earthquake risk around the world, earthquake-prone countries remain underinsured, Swiss Re says.

Lucia Bevere, Senior Catastrophe Data Analyst at Swiss Re Economic Research & Consulting and co-author of the “Lessons from recent major earthquakes publication”, says: “The insurance industry is playing a key role in post-disaster financing of the countries affected. While insurance cannot replace lost lives and livelihoods, appropriate insurance and other risk transfer mechanisms can greatly accelerate the recovery process.” However, the insurance industry’s contribution to the reconstruction effort differs dramatically from country to country.

The insurance industry will pay an estimated 80% of the overall cost of the February 2011 earthquake in New Zealand, but no more than 17% for the disastrous event in Japan in March 2011. Earthquake insurance penetration, in fact, is highest in New Zealand, and is very low in Japan, particularly for commercial properties.

Recent major earthquake events; data from Swiss Re

Overall, earthquake insurance coverage is still quite low, even in some industrialized countries with high seismic risk. Low insurance penetration attests to a population’s low perception of risk. Bevere adds: “The low frequency of earthquake events, compared to other natural catastrophes, tends to shape the perception that earthquake risk is much lower than it actually is, even in places where there have been very deadly and damaging occurrences, like California.” Without insurance coverage, post-disaster reparations come from government funds and ultimately must be borne by taxpayers.

Insurance penetration, premiums as percentage of GDP; Data from Swiss Re

For underwriting as well, there are key lessons to be learnt from the recent earthquakes. Although earthquake models are quite accurate in predicting the immediate physical damage caused by tremors, Balz Grollimund, Head of Earthquake Perils at Swiss Re and co-author of the study, points out: “Secondary loss factors, such as liquefaction and particularly business interruption, add to the complexity of claims assessments for major earthquakes. These factors should be considered more comprehensively in earthquake models.”

The full report can be read online. (PDF)

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Carnival Corp., operator of the grounded Costa Concordia, has addressed the financial implications of the incident that saw the 290-metre long ship sink off the coast of western Italy on January 13, killing at least five.

The company reports it has insurance coverage for damage to the vessel with a deductible of approximately $30 million. Coverage for third-party personal injury liability is subject to an additional deductible of approximately $10 million for this incident.   The company self-insures for loss of use of the vessel.

A damage assessment review of the vessel is currently being undertaken to determine how long it will be out of service.  The vessel is expected to be out of service for the remainder of the current fiscal year, if not longer. For the fiscal year ending November 30, the impact to 2012 earnings for loss of use is expected to be approximately $85-$95 million or $0.11-$0.12 per share.

“At this time, our priority is the safety of our passengers and crew,” said Micky Arison, Carnival Corporation & plc chairman and CEO.  “We are deeply saddened by this tragic event and our hearts go out to everyone affected by the grounding of the Costa Concordia and especially to the families and loved ones of those who lost their lives. They will remain in our thoughts and prayers,” he said.

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A luxury cruise liner operated by Carnival Corp. ran aground off the coast of Tuscany, Italy on January 13 at approximately 9:30 pm local time. The 4,229 people on board were evacuated, but early reports say that at least five people died and another 42 were injured.  Fifteen passengers were still unaccounted for by the end of January 15.  The ship’s captain has been arrested and is accused of manslaughter, causing the wreckage and abandoning ship, said Italian prosecutors.

Collision of Costa Concordia / By Rvongher (Own work) [CC-BY-SA-3.0 (www.creativecommons.org/licenses/by-sa/3.0)

The Costa Concordia ran aground on a reef near Isola del Giglio, having left Civitavecchi, Italy at the beginning of a seven-day cruise.

An Italian broker told local media that he believes the ship will be a total loss, with damages expected to exceed $500 million.

Bloomberg reports that the sunken cruise ship was insured by companies including Assicurazoni Generali SpA, RSA Insurance Group plc and XL Group Plc. Sources with knowledge of the policies say that the insurers are facing costs of about €405 million.

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Insurance brokerage Aon Corp. plans to move its corporate headquarters from Chicago to London to improve its access to emerging markets and increase its financial flexibility.

Aon said Friday the move will help it take advantage of strategic proximity to Lloyd’s and the London market, which it calls one of the key international hubs of insurance and risk brokerage.

The company already has a big presence in the United Kingdom. It is the main sponsor of the soccer team Manchester United through a four-year contract totalling 80 million British pounds ($122.6 million). Manchester United is ranked as the most valuable soccer team in the world by Forbes magazine.

Aon also has about 6,000 employees in London in its risk brokerage and human resources consulting businesses.

The brokerage said the move will provide it with increased financial flexibility and improved capital allocation.

“As the proportion of Aon’s revenue from international operations continues to grow, the ability to allocate capital for investment and growth will be vital to the firm’s continued success,” the company said in a statement.

Last month, U.S. authorities said Aon agreed to pay more than $16 million to settle criminal and civil allegations that it bribed employees of government-owned companies and others in several countries between 1983 and 2007. That included paying $14.5 million in restitution and interest to settle Securities and Exchange Commission civil charges and a $1.76 million criminal fine in an agreement with the Justice Department.

Aon neither admitted nor denied the civil allegations under the SEC settlement. It agreed to avoid future violations of securities laws.

The company’s decision to move its corporate headquarters had “absolutely nothing at all” to do with the settlement, said David Prosperi, Aon’s vice-president of global public relations.

“This is a decision based on our global growth strategy,” he said.

Aon will change its jurisdiction of incorporation from Delaware to England, but it expects Aon UK to be listed on the New York Stock Exchange and to report earnings and other financial statements in accordance with the SEC requirements.

The move needs shareholder approval, and Aon expects it to close in the second quarter. Shareholders will receive one share of the newly formed English public limited company for each share of common stock.

The company said Chicago will remain its headquarters for the Americas and the move won’t result in job loss in Chicago or the United States. The company employs 61,000 people globally and expects to create 1,000 new jobs this year.

Aon provides risk management, insurance and reinsurance brokerage and human resources services.

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Google has been fined €50,000 (CAD $64,975) for an autocomplete suggestion when users searched for a French insurance company.

Insurance company Lyonnaise de Garantie took the search engine giant to court after it discovered defamatory statements appeared when it was searched.

When a person typed “Lyonnaise de g” into Google search, the suggestion of “lyonnaise de garantie escroc” (in English, roughly “lyonnaise de garantie crook” or “lyonnaise de garantie scammer”) automatically appeared. The suggestion appeared for users using google.fr (France), google.be (Belgium), google.uk (United Kingdom), google.es (Spain), google.it (Italy) and google.ca (Canada).

Lyonnaise de Garantie saw this as “intolerable and clearly unlawful to its reputation” and asked Google France to remove the suggestion.

Google said its autocomplete function is based on an automatic algorithm and did not come from human thought. On its website, Google uses the following as an example of its autocomplete function: “As you type within the search box on Google, our autocomplete algorithm offers searches that might be similar to the one you’re typing. Start to type [ new york ] – even just [ new y ] – and you may be able to pick searches for “New York City,” “New York Times,” and “New York University” (to name just a few).”

In addition to the fine, Google must remove the term from any searched related to Lyonnaise de Garantie.

Click here to read the court’s decision (in French.)

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Allstate is so sure that it provides good customer service that it’s offering a Claim Satisfaction Guarantee to any insureds who are not satisfied with the auto claim service.

With the Claim Satisfaction Guarantee, eligible customers who are dissatisfied in any way with the service on a paid auto claim can receive a credit to their premium if they express their dissatisfaction in writing within 180 days of the incident that triggered the claim.

“If the customer isn’t happy, then we haven’t done our job,” Mark LaNeve, Allstate Senior Executive Vice President, Agency Operations, and Chief Marketing Officer said.  “The Claim Satisfaction Guarantee backs up our commitment to deliver a complete, positive experience for the customer, and this feature, furthermore, will be one more way in which we distance ourselves from our competitors.”

The program was tested last year in Indiana, Ohio, Michigan, and Georgia, where it was added, at no additional cost, to standard auto policies. Now it is available in 31 states, with a rollout in more being planned for 2012.

“The Claim Satisfaction Guarantee is more than a new feature for eligible standard auto customers,” said LaNeve. “It’s also an assertion by this organization that we have complete confidence in our claims people, our agency owners, and our processes.  We are certain that the Allstate team will exceed customer expectations.”

What do you think about Allstate’s Claim Satisfaction Guarantee? Is it a good way to keep customer service standards high? Would a program like this work in Canada? Share your thoughts with ILSTV.

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