ZURICH (Reuters) – Zurich Insurance (ZURN.S) said it was buying QBE Insurance Group’s (QBE.AX) Latin American business for $409 million, becoming the leading insurer in Argentina and No.3 in Ecuador.
The acquired business had gross premiums of $790 million last year, with Argentina representing about half and the rest divided among Ecuador, Mexico, Brazil and Colombia, Zurich said in a statement on Sunday.
“This transaction positions us as the leading insurer in Argentina, a market that is demonstrating strong growth, a stable economy and a positive environment for insurance,” Claudia Dill, Zurich’s Chief Executive Officer for Latin America, said in the statement.
Zurich said it expected to achieve an overall return on investment comfortably in excess of 10 percent within the first full year post completion of the transaction. Completion is expected by the end of 2018 and funding is to come from internal resources, Zurich said.
In a separate statement, QBE said it expected a pre-tax profit from the sale of about $100 million.
Australia’s biggest insurer will retain its Puerto Rico operations to service claims from Hurricane Maria, it said.
”The decision to exit Latin America is consistent with our focus on simplifying the group, reducing risk and improving the consistency of our results,” QBE Chief Executive Pat Regan said.
Europe’s fifth-biggest insurer last year bought Australia and New Zealand Banking Group’s (ANZ.AX) life insurance arm for $2.1 billion, a deal that propelled it to the top rank in the attractive Australian market.
By Emma Clarke | The Queensland Times
HER house shaking as the wind rattled through the timber walls, North Ipswich home owner Jessie Harlow thought she was experiencing an earthquake.
It was late October last year when a typical Queensland summer storm rocked Ms Harlow’s 1930s home but it wasn’t until the next month she noticed some alarming damage.
While moving furniture in the living room, she noticed grass and daylight peaking through a sizeable gap between the floor and wall of her home. When she went outside to investigate further, Ms Harlow found her house had shifted on the concrete stumps.
Now she’s facing a damage bill worth tens of thousands of dollars after her insurance claim was rejected.
She said insurer CGU claims soil and stump movement caused the damage, not the storm.
“My whole house shook and it actually moved my house off the stumps. It shifted the whole house.” she said.
“I thought, ‘holy, we’re having an earthquake’. There was not a lot of damage that I could see except there was water coming out of the light fitting on the front veranda and one of the doors wouldn’t close properly.
“It wasn’t until I moved the furniture in the lounge room that I realised there was a gap between the wall and floor. The floor and wall have come apart on the whole length of the house.”
She said her insurance company, CGU, sent inspectors to look at the damage but they claimed it happened before the storm hit.
“Insurance is saying because the stumps have been packed before, it has obviously moved, then it’s likely the soil has subsided over time and that has caused the damage,” Ms Harlow said.
“They won’t pay because they say it’s not caused by the wind. I just thought it would get done because you pay your insurance in good faith and it’s covered for storms. I’ve never missed a payment so I thought this is what I was covered for.
“What I really want to know is who else got damage in those high winds, if anyone else suffered damage or some sort of wind damage so I can prove it’s not just me and I’m not imagining it.”
Ms Harlow said she bought the house three years ago after returning to Ipswich to be near her family.
“It’s such a gorgeous little house, it’s such a cute little house. I really like my house,” she said.
A spokesperson for IAG, the company that manages CGU insurance, said a general approach was applied when assessing all storm damage claims.
“During the event of a storm, our priority is the safety of our customers and to ensure they have immediate help and support,” they said.
“Our builders and technical specialists can then assess the cause of damage to a property and the repairs required to help our customers get back on their feet as soon as possible. We may also be required to use experts, such as engineers, to assess the cause of damage to a property, to ensure we make the appropriate decision in line with the policy.”
Excerpted article was written by | By Elizabeth Dinan
PORTSMOUTH — State insurance regulators advise property owners who fly drones, or have family members who fly drones, to review their insurance policies to ensure they’re covered for liability, while some insurers are limiting or eliminating drone-related coverage.
“It is not unusual for the insurance market to develop forms to address new and emerging risks,” said Danielle Barrick, director of communications for the New Hampshire Insurance Department. “Drone liability would qualify as an emerging risk. To that extent, it is a new trend.”
Barrick said a standard homeowners insurance policy provides coverage for drone damage. What is new, she said, is that some insurers are adding an “exclusionary endorsement,” sometimes called a rider, that removes or limits coverage otherwise provided by the policy.
“Thus, if a drone user wishes to be protected or to have greater protection, the drone user should either have their current insurer issue a policy without an exclusionary endorsement related to drones, or find an insurer that will issue such a policy,” she said. “As the homeowners insurance market is a competitive one, the drone user should be able to obtain multiple quotes for the desired level of coverage.”
Professional drone photographer David Murray of New Castle said he has a specific insurance policy for his drone operation and thinks all drone operators should be responsible for any damage or injury they cause.
“Just like automobile operators,” he said.
But, Murray added he also thinks insurance companies shouldn’t back away from claims for damage caused by drones.
“I think kids playing in the back yard with a ball and bat can do similar damage,” he said, noting there aren’t insurance exclusions for those accidents. “Why one and not the other?”
Murray said there are insurance options that cover single drone flights and blanket policies to cover periods of time, like an auto insurance policy.
“Drones are new so people want to fixate on them and be afraid of them,” he said. “In terms of the danger they pose, you can do more damage with a car. And you certainly can do more damage with a gun. I think it’s appropriate to step back and reasonably look at it.”
According to the state Insurance Department, “the competitive homeowners insurance market allows residents to choose a policy that will provide coverage for drones.” Barrick said people with drones should ensure they have the coverage they want while the market also allows people without drones “to seek a policy that excludes liability coverage for drone use, which might result in a lower premium.”
“This is how a competitive market is designed to operate,” she said.
The Insurance Department does not collect data detailing how often an insurer includes “a particular endorsement,” like drone limits or exclusions, adding “exclusionary drone endorsements are a fairly new type of coverage form.”
Murray said drone hobbyists tend to fly small, lightweight drones and would “have to work pretty hard to cause some damage.”
“Most are made of toy-grade plastic and weigh less than two pounds,” he said. “Most have less mass than a seagull.”
He said some drone controls have more intelligence for piloting than others, meaning some require more work to control than others. He said it also takes many hours of practice to master drone flying.
“I think some people have a good experience when they start flying and get overconfident,” he added. Some insurance policies are also now citing exclusions of coverage for damage caused by drones that interfere with aircraft. Murray said that’s ”
Some insurance policies are also now citing exclusions of coverage for damage caused by drones that interfere with aircraft. Murray said that’s “a major source of potential concern” that could cause loss of life, but is highly unlikely to occur. He said anyone who flies a drone should know it’s prohibited within five miles of an airport or tower and that the law is printed on drone packaging.
He said that’s why the FAA requires all drones weighing more than a half pound to be registered and marked with identifying numbers.
“The department’s advice for drone owners and all insureds is to work with their insurer and/or insurance agent to ensure that they have the appropriate level of liability coverage and to not be reluctant to shop their insurance to find the insurer and policy that best fits their needs,” Barrick said.
Insurance claims from last year’s deadly California wildfires have reached $11.8 billion, the most expensive series of wildfires in state history.
The staggering figure released Wednesday includes $1.8 billion in insurance claims from fires that swept through Southern California in December.
The rest is from a series of fires in Northern California’s wine country in October.
Before last year, California’s most expensive single fire was the 1991 Oakland Hills fire that prompted $2.7 billion in claims in today’s dollars.
Insurance Commissioner Dave Jones says that the firestorms damaged or destroyed 32,000 homes, 4,300 businesses and more than 8,200 vehicles, boats and other equipment.
The totals do not include insurance claims related to mudslides that buried homes and vehicles in Montecito when torrential rain fell on hillsides burned in the December fires.