Amazon may start selling insurance after IRDA approval

Amazon India will soon offer life, health, and general insurance products as a corporate agent, according to a Registrar of Companies (RoC) filing, reports BloombergQuint. According to both, BloombergQunit and Economic Times, the company is yet to seek an approval from the Insurance Regulatory and Development Authority (IRDA).

A company spokesperson told MediaNama that “Amazon Pay is looking to serve the needs of customers around Insurance. Stay tuned in.”

Amazon is not the only company to expand its offerings in the financial services sector as its arch rival, Flipkart has already applied for a license to start selling insurance products. According to industry sources that MediaNama spoke to, many payments companies are keen on tapping into the insurance sector, given that insurance penetration in India is extremely low.

Competition in the online insurance space

In the online insurance ecosystem, Amazon will be competing with a host of other players including Paytm, EasyPolicy, Bankbazaar and PolicyBazaar. In terms of payment wallets, MobiKwik also plans to venture into newer domains of personal and consumer finance with a focus on lending and insurance. We reported last year that Flipkart would start selling insurance products on its platform. While these companies are aggregators, Narayan Murthy’s Catamaran Ventures-backed digital insurance company Acko General Insurance is the first insurance company with an online-only policy, which also received the final license from IRDAI in September last year.

Amazon Pay launches EMI facility

This week, Amazon Pay also launched a service which will enable users, who neither have access to credit services nor credit cards, to make purchases via EMIs for up to Rs 60,000. The service, currently an invite only program, will require users to complete a two-step registration process to get an assigned credit limit, according to a press release. Amazon has tied up with Capital Float to offer the instalment service. Amazon claims to offer zero cost EMIs for customers taking loans for a duration of 3 and 6 months, while an interest rate of 18% will be levied on customers opting for a duration of 9 and 12 months.

Amazon India’s payment journey so far

  • In December 2016, Amazon launched ‘Pay’ in India
  • In April 2017, it received a wallet license from the RBI
  • In February this year, the company added a UPI based payments option to its website
  • Last month, Amazon Pay acquired ‘all-in-one app’ Tapzo to strengthen its payments offerings
  • In August, Amazon India launched a bill payment service across 100 utility providers
  • In the same month we also reported that its plan to launch a Unified Payments Interface (UPI)-based payments service had been hampered owing to RBI’s concerns regarding the storage of user data in India.

Source: Medianama

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Marsh & McLennan to Acquire Broker JLT

 

(Reuters) – Marsh & McLennan Companies Inc (MMC.N) has agreed to buy Jardine Lloyd Thompson (JLT.L) for about 4.3 billion pounds ($5.7 billion) as the U.S. financial services group looks to boost its speciality risk broking and global reinsurance business.

Shares of the UK insurance and reinsurance broker rose 32.3 percent to 1,894 pence, just below MMC’s all-cash offer of 1,915 pence, which was set at a premium of about 33.7 percent to JLT stock’s closing price on Monday.

The deal consideration implies an enterprise value of about 4.9 billion pounds for JLT.

The deal comes as insurers have been looking to consolidate in a competitive market that has seen tougher regulations and softer pricing.

France’s AXA (AXAF.PA) moved to buy Bermuda-based XL Group for $15.3 billion in March, just over a month after American International Group (AIG.N) said it would buy reinsurer Validus for around $5.6 billion.

More recently, mutual insurer Covea offered to buy Scor (SCOR.PA), but was spurned by the French reinsurer. The sector has also seen interest from private equity, with Apollo Global Management (APO.N) agreeing to buy Aspen Insurance Holdings (AHL.N) last month.

“JLT has been fiercely independent in the past and so we are surprised to see a recommended bid from Marsh & McLennan (MMC) and uncertain about JLT’s motivations behind the headlines, Keefe, Bruyette and Woods analysts wrote in anote.

“But our knee-jerk response is that this is a good deal for JLT shareholders with the key governance parties already behind it and so closure is highly likely at the 19.15 pounds price.”

Investors representing 40.45 percent of JLT’s stock, including top shareholder Jardine Matheson Group, have already given irrevocable undertakings or letters of intent to support the tie-up.

JLT’s independent directors, advised by J.P. Morgan Cazenove and Simon Robertson Associates, intend to unanimously recommend that shareholders vote in favor of the deal, the companies said.

JLT has been building out its U.S. speciality business, which represented about 5 percent of the company’s revenue.

MMC, which expects annual revenue to rise to $17 billion after the deal closes, said JLT Chief Executive Dominic Burke is set to join MMC as vice chairman.

Goldman Sachs was acting as financial adviser to MMC and MMC’s unit.

Slaughter and May and Wachtell, Lipton, Rosen & Katz provided legal advisers to MMC and its unit, while Clifford Chance LLP was legal advisers to JLT.

Reporting by Arathy S Nair in Bengaluru; Editing by Amrutha Gayathri and Keith Weir

FEMA’s flood insurance chief says agency ready for onslaught of Florence claims

Excerpted article was written by 

The head of the National Flood Insurance Program told CNBC’s “Squawk on the Street” Monday that the government is prepared to handle the anticipated rash of claims filed by homeowners in the upcoming days and weeks.

“As the days continue, we’ll be able to start to get the number of claims being submitted, get adjusters out in the field when it’s safe, and when it’s safe for policyholders to be in their homes,” said David Maurstad, the Federal Emergency Management Agency’s Deputy Associate Administrator for Insurance and Mitigation and the chief executive of the NFIP.

Parts of North Carolina continues to be battered by rainfall from the remnants of Florence, now a tropical depression. The massive, slow-moving storm has left widespread flooding and destruction in its wake since slamming into the Carolinas with destructive winds and torrential rainfall late last week. More than 30 inches of rain already has fallen in some places.

Even as the storm moves farther north, “catastrophic/historic river flooding” is expected to continue over a broad swath of the region, according to the National Hurricane Center. Roughly 31 million residents remain under a flood watch.

Maurstad said there are more than 335,000 policyholders in the Carolinas.

“NFIP policyholders can know that we’re gonna be there to make sure they are treated fairly and receive every dollar they have coming from their NFIP policy that they purchased,” Maurstad said.

You need separate flood insurance

He also said this storm is a good reminder to homeowners of the importance of having separate insurance coverage flood damage. You can get coverage through the NFIP or a private insurer, depending on where you live.

“People think their homeowner’s [policy] may cover them from floods and it doesn’t,” Maurstad said.

There are are coverage exclusions and limitations, however. For example, a government flood policy won’t cover all of your belongings in your basement outside of things such as washers and dryers and water heaters. Separate insurance would be required.

If the magnitude of the flooding in North Carolina has caused you to consider a flood policy, don’t wait for storm clouds to appear on the horizon. You need 30 days for it to take effect.

There’s also a good chance your homeowners insurance policy has a hurricane deductible. It typically ranges from about 1 percent to 5 percent, depending on the specifics of your insurance contract.The percentage is based on the insured value of your home, not the damage caused.

Source: CNBC

US: Closed ports, lost power: How storm could hurt area economy

By Paul Wiseman, Tom Krisher And Christopher Rugaber

THE ASSOCIATED PRESS

WASHINGTON _ Ports are closing. Farmers are moving hogs to high ground. Dealers are moving cars into service bays for refuge. And up to 3 million energy customers in North and South Carolina could lose power for weeks.

Across the Carolinas, Virginia and Georgia, businesses are bracing for the economic damage Hurricane Florence is expected to inflict on the area. Industries like tourism and agriculture will likely suffer, and the losses won’t be easily or quickly overcome.

Once it makes landfall, Florence is expected to lash coastal communities with high winds and to dump several feet of water. Flooding could prove devastating. The storm will likely damage homes and businesses, kill crops, drown livestock, wash away cars and suspend much of the area’s economic activity.

“These storms can be very disruptive to regional economies, and it takes time for them to recover,” said Ryan Sweet, an economist at Moody’s Analytics.

Sweet said he thinks Hurricane Florence could cause the U.S. economy’s growth to slow a few tenths of a percentage point, on an annual basis, in the July-September quarter. Michael Walden, an economist at North Carolina State University, calculates that Florence will deduct about $200 million of output a day from North Carolina’s $550 billion-a-year economy until business returns to something close to normal.

It could have been worse. Labor Day marked the end of the peak tourism season in the Outer Banks of North Carolina and other coastal getaways. There are now fewer tourists to send away.

In fact, as with the aftermath of previous hurricanes, the region could eventually receive an economic boost once construction crews come out to rebuild and repair damage and as insurance payments and federal disaster aid flow in.

“The ironic thing is, when there’s a rebuilding effort, that can energize local economies,” Walden said.

“Typically, we see a stimulus effect that creates jobs and raises incomes for South Carolinians,” said Joseph Von Nessen, a research economist at the University of South Carolina. Hiring is likely to be especially strong in construction and at retailers that sell building materials and supplies.

Hurricane Florence is slamming a region that is economically diverse as well as sizable. Combined, North and South Carolina boast an economy bigger than Saudi Arabia’s. High-tech auto plants co-exist with beachfront bed-and-breakfast inns and peanut farms. North Carolina’s Duplin and Sampson counties, just inland, sell more hogs and pigs than anywhere else in America.

Duke Energy warned that Florence could cut off power to anywhere from 1 million to 3 million customers in North and South Carolina, potentially leaving them without electricity for several weeks, said spokeswoman Grace Rountree.

Two big fuel pipelines stand in the hurricane’s path, but analysts say they think the storm is unlikely to disrupt the flow of gasoline or other products. Still, analysts for S&P Global Platts say it’s possible the Colonial and Plantation pipelines could be affected by power outages or damage to pump stations. Those pipelines carry fuel from the Gulf Coast to much of the eastern United States.

Analysts expect a temporary boost in gasoline demand as people flee Florence, followed by weaker demand during and immediately after the storm. But the damage to energy facilities is likely to be far milder than the devastation left by Hurricane Harvey, which last year battered Houston, the heart of the U.S. energy industry. Flooding closed refineries along the Texas and Louisiana coasts and caused gasoline prices to spike.

No ships were entering or leaving the Port of Virginia in Hampton Roads on Wednesday. And the port in Charleston, South Carolina, was suspending operations from Thursday through Saturday and possibly on Sunday.

And Florence will almost surely depress auto production in South Carolina, where Volvo already has closed a new factory near Charleston because it’s in an area under mandatory evacuation orders, said spokesman Russell Datz. Volvo is co-ordinating with parts suppliers so it will be ready to resume production, according to Datz, who said he wasn’t sure how long the plant would be down.

Three hours to the northwest in Spartanburg, BMW’s sprawling SUV factory remains open. But rail cars with vehicles bound for Charleston and export markets abroad have been moved to secure areas until the storm passes. Spokesman Kenn Sparks said BMW is monitoring parts supply plants, which could be affected by the storm.

At auto dealerships in 48 counties of Virginia and North and South Carolina, Florence could destroy about 125,000 vehicles, Citi Investment Research analyst Itay Michaeli estimated in a note to investors. It also could cut September auto sales by about 110,000 vehicles, which would have to be made up later, he wrote.

Analysts at Cox Automotive predicted that Florence won’t destroy as many cars as Hurricane Harvey did in the car-dependent Houston area. Though about 9 million vehicles are in Florence’s path, the area has only about 162 vehicles per square mile _ less than half the figure in car-crazy Houston. Many car dealerships on the coast were already closed Wednesday ahead of the storm.

But even inland dealerships are bracing for damage. Workers at Florence Toyota in Florence, South Carolina, plan to pull high-value luxury vehicles into the service bays on Thursday to protect them.

“We’ll probably move some of our bigger trucks in front of the building to try to stop some of the debris,” said Terrell Small, the new-car sales manager.

The city of Florence, about 70 miles northwest of Myrtle Beach, could absorb 70-to-110 mph winds and 3 to 6 inches of rain, according to the National Weather Service. The area is under tropical storm and flash flood watches into the weekend.

Small said the precautions have worked in previous hurricanes, but he said he remained wary of the flooding potential from the storm with the same name as his town.

Cyber insurance market sees steady growth as awareness increases

By Modestus Anaesoronye | Business Day

Cyber attacks were once again in the spotlight in 2017, with increasing frequency and severity, offering plentiful opportunities for growth of insurance, especially in small and medium-sized companies, according to A.M Best report.

The WannaCry and NotPetya ransomware attacks and the Equifax data breach received significant media attention and affected millions of people and businesses. The NotPetya attack in particular highlights the growing business interruption exposure associated with cyber risks. Also, in October 2017, Yahoo! updated its 2013 data breach tally from one billion to three billion of its accounts, potentially making this the most substantial, most extensive cyber breach ever recorded.

These events highlight the vital need for cyber insurance, but the market is bifurcated. On the one hand, national accounts and Fortune 500 companies seem to be embracing the need to partner with insurers and brokers as a way to counter cyber risks.

Financial institutions and healthcare companies are acutely aware of their cyber exposures and are increasing their coverage. Average policy limits are rising, with some of the largest companies’ coverage towers above the half-billion dollar mark.

On the other hand, the take-up rate for small to medium-sized enterprises (SMEs) remains in the low teens, presenting an area where insurers would like to see growth.

In 2017, cyber packaged policies in force increased 28 per cent, some of which was due to the addition of affirmative cyber coverage to packaged policies. This increase is significant, but this is still something of a fledgeling business, and an increase of this magnitude, while material, does minimal to close the protection gap. However, interest from SMEs does seem to be gaining traction, and capacity from insurers is ample.

In the short term, despite the inherent challenges in managing aggregations and pricing, we believe the cyber insurance market presents a favourable opportunity for insurers. Demand is expected to grow due to the accelerating adoption of technology and the increasing awareness of cyber risks, especially among SMEs. Given the abundant supply of capital and the cautious growth strategies of insurers, we expect the overall exposure of the property and casualty industry.

However, as insurers expand their cyber offerings, they will need to be prudent in establishing underwriting standards and limits, and exercise appropriate risk management and mitigation measures to ensure that these exposures remain aligned with the company’s risk tolerances and appetites.

The extent to which an insurer grows its cyber business should also lend to a broader understanding of this relatively new risk and a company’s ability to aggregate, monitor, and manage its exposure in various scenarios. Data quality is a crucial factor when insurers provide information to regulators, other stakeholders.

Overall, cyber insurance take-up remains low, as SMEs remain complacent about these risks, under two assumptions: that hackers target only more prominent businesses such as Target or Home Depot or that they already have coverage under another policy when they might not. However, this sentiment and tepid interest in cyber insurance among SMEs may be changing, in light of the near daily reminders of cyber-threats, attacks, and breaches feeding social media.

Pricing is another factor, as more business owners see the cost benefits and also realize their vulnerabilities due to their interconnectivity with vendors, suppliers, and customers.

A data breach is only one factor in cyber risk, however many SMEs may be underestimating business interruption risks, and the impact on smaller enterprises of business interruption could be much higher, as they may not be as resilient or diverse as national account clients.

Source: Business Day By Modestus Anaesoronye
Edited for ILSTV

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