Wednesday, August 27, 2014

Asia: The New Frontier of the Insurance Industry?

Even though the region has a notoriety of being “underinsured”, will the Asian region prove to be the new marketing frontier of the world’s leading insurance providers? 

By: Ringo Bones 

The tragic November 8, 2013 super-typhoon Haiyan / Yolanda that battered Tacloban, Leyte has highlighted the Asian region’s notoriety of being underinsured, but if Prudential has its way, Asia might prove to be a veritable growth industry for the world’s leading insurance providers. Given that a majority of this region’s inhabitants can hardly afford the relatively exorbitant premiums of top-tier insurance policies that cover climate change related catastrophes, will the Asian region prove to be a new and lucrative marketing frontier for the global insurance providers? 

U.K. based international insurance provider Prudential plc, which started in London back in May 1848 as The Prudential Mutual Assurance Investment and Loan Association that provided loans to professionals and working people has now provided their interim second quarter results for the year 2014 a few weeks ago showing that most of their profits and expected growth will be in its Asian markets. At the moment, Prudential operates across 13 Asian markets and is one of the Top 3 insurance providers in the Philippines, Malaysia, Indonesia, Vietnam, Hong Kong, India and Cambodia. 

Given the projected results showing that most of its positive growth market will be in Asia, the insurance company is now focusing its Asian market – as in its largest division in the name of Prudential Corporation Asia. The insurance company’s 13-million clients are expected to grow in the future, and most of the growth will probably be in Asia. Prudential also owns Jackson National Life Insurance Company which is currently the largest life insurance provider in the United States. Will Prudential now be concentrating more on its Asian clients than its American and European ones? 

Thursday, June 5, 2014

Insurance Providers Without Borders, Anyone?

Given that the latest spate of climate change related catastrophes affecting largely uninsured poor countries, should commercial insurance based policies be made available to these people?

By: Ringo Bones 

It is a quite a sobering thought that over 90 percent of the surviving victims of Typhoon Haiyan that hit Tacloban City in Leyte of the central part of the Philippines back in November 8, 2013 don’t have any kind of insurance policy. A little over six months after the tragedy, a majority of the survivors are still scrimping and saving their own hard earned cash to fix their own homes and small business establishments since they don’t have any insurance payouts to collect and use to fix their own homes damaged by the most powerful typhoon on record so far to ever hit landfall. 

Trevor Maynard of Lloyd’s of London says current models used to predict disasters use historical data and the insurance company’s latest actuarial studies have shown that hurricanes poses the greatest damage in terms of payout costs when it comes to insurance policies tailored to meet latest climate change related catastrophes. Given that the world’s major insurance providers dismiss providing insurance services for the world’s poorest uninsured since such business schemes are “not economically viable” from their perspective, could insurance providing schemes based on Muhammad Yunus’ microfinance banking be a solution? 

Even though various kinds of microfinance insurance schemes already exists, creating one as a basis for a “insurance companies without borders” that would provide insurance coverage of climate change related catastrophes for the world’s poorest could solve the problem of typhoon and flooding victims unable to start over after their homes and businesses, livestock, farms, etc. are destroyed. Such solutions are likely to succeed given that they are congruent to existing conventional insurance underwriting schemes – except they are underwritten by a local microfinance banking scheme. 

Wednesday, June 4, 2014

The Uninsured Mount Everest Sherpa

Should the Nepalese government provide adequate insurance for the Mount Everest Sherpas? 

By: Ringo Bones 

Given that it was the tragic April 18, 2014 avalanche that shed light that probably all Mont Everest Sherpas are uninsured, the rest of the world now wonders why the Nepalese government has failed to provide adequate insurance to the Sherpas that assist foreign mountain climbers climb the world’s highest mountain. After all, Nepal earns millions of dollars in annual climbing fees from Everest alone. For the 2014 season, the Nepalese government had issued climbing permits to 734 people including 400 guides for 32 expeditions. The world has now been speculating whether the millions paid in climbing permits had been simply pocketed by Nepal’s political elites – rather than being set aside as an insurance / compensation fund for Sherpas.
Immediately after the tragic April 18, 2014 avalanche, the Nepalese government offered US$400 to each of the 13 victims’ families as a way to pay off “funeral costs.” Unsurprisingly, none had been pleased by the government’s offer. 

The average annual income in Nepal is around US$700 – while a Sherpa working for a typical 3-month season earns US$4,000. Despite earning more than the average Nepalese, being a Sherpa is a hazardous profession – a lot can happen to one hauling gear up a mountain for international climbers waiting at the Everest Base Camp.  

Mingna Sherpa said in an interview:”We love the mountains…but a mountaineer could climb in peace if he knew that his family will be taken cared of if something bad happens to him.” Nepal’s Deputy Prime Minister Prakash Man Singh said the government has been working to help the Sherpas, but unless the Nepalese government establish an effective social security for the Sherpas, international climbers could be put-off climbing Mount Everest via the Nepalese side because the government has scant social responsibility due to its inability to provide a well-underwritten insurance policies for the Everest Sherpas. 

Thursday, March 20, 2014

Penis Insurance, Anyone?

The idea might seem like the proverbial red herring, but did you know that Lloyd’s of London seriously considered underwriting such a policy? 

By: Ringo Bones 

Penis insurance might seem like something “to ballsy” for an established insurance underwriter like Lloyd’s of London to even seriously consider. But recently, they’ve almost underwritten one but at the last minute pulled out of a recent “penis insurance promotion”.
A Montreal based underwear company had recently planned to offer a 50,000-US dollar penis insurance policy to its male customers ended up as a “half-cocked” proposition. The Lloyd’s of London Penis Insurance Policy literally goes limp because their actuarial analysts have doubts about its long-term economic viability. 

Lloyd’s of London, the insurance market engaged to underwrite the said policy, has decided to pull out of the promotion. And given Lloyd’s practice of underwriting insurance policies whose actuarial figures are either too mathematically vague or virtually nonexistent over the years, such a move was deemed unprecedented. Although, Lloyd’s of London had been cautious in the recent years on choosing which “novel insurance policies” to underwrite given their declining profits due to recent catastrophic disasters like the Japanese tsunami of March 2011, Hurricane Katrina and the BP Offshore Oil Rig disaster of April 2010.
Montreal based UNDZ underwear recently announced during the start of March 2014 that all men who purchase three or more pairs of UNDZ underwear via the company’s website would get a Lloyd’s of London insurance policy to be paid out if their sex organ becomes detached from their body. UNDZ founder Bertrand Dore said the company had struck a deal with Lloyd’s Canadian syndicate, La Turquoise, to offer the policies. Will it cover a situation akin to that King Missile song titled Detachable Penis style mishap perhaps? 

A Lloyd’s of London representative told Huffington Post back in March 18, 2014 that the UNDZ announcement was premature and that no deal was ever confirmed. Bertrand Dore believes the insurance syndicate only decided to disavow the policy after they saw a very graphic and not fit for general viewing promotional video. 

Lloyd’s of London has offered penis insurance in the past to people like David Lee Roth back during his stint as a frontman for Van Halen because his stage antics back then has always resulted in a near mishap of penile dismemberment and of alarming regularity as well. But Bertrand Dore suspects that Lloyd’s are just trying to build a more serious brand and that “penis insurance” was just a “bit too ballsy”.