business insurance

The BIE 100 is a truly groundbreaking project that offers Business Insurance Europe’s 15,000 readers unique detail on the senior executives responsible for risk and insurance management at Europe’s 100 largest companies ranked by 2006 gross revenues.

This project not only compiles details on these companies and their executives, but also profiles several of these individuals to share insights into their risk and insurance management challenges and philosophies with the rest of BIE’s readership.

This information will serve to educate and inform the entire European risk management community..

Aviation insurance 2008 - a market forecast

Aviation insurance 2008 - a market forecast

28 March 2008

The outlook for the year ahead is not easy to predict for aviation insurance.

Industry experts have forecast that 2008 is to be a ‘fascinating year’ for aviation insurance. With capacity on the increase, coupled with a rise in claims, the outlook for the year ahead is not one that is easy to predict.

Aon aviation industry analyst, Magnus Allan, commented that ‘2008 is going to be fascinating in aviation insurance terms’. "On the one hand there has been a large amount of capacity available over the last few years that has reduced prices significantly; but 2007 saw a high level of hull claims, which is going to encourage insurers to look at their portfolios and question their commitments, potentially," he said.

According to Aon's Airline Insurance Market Review 2007, the high level of hull and liability claims, at US$1.7bn (£0.84bn), alongside the lowest amount of lead hull and liability premium since 2000, US$1.5bn (£0.74bn), meant that the airline insurance market was broadly unprofitable in 2007. The review also reported that the proportion of passengers travelling with flag carriers fell from 66% in 2005 to 48% in 2007. As such, the insurance and risk management firm has predicted that the negotiating process is likely to be far tougher in 2008.

Explaining further, Mr Allan added that it is "basically classic supply and demand; the capacity is bringing down prices but the level of claims could potentially raise prices. A lot depends on what the loss figures are in 2008. If there are no catastrophic losses and it turns out that 2007 was just a blip, then we'd expect the continuation of low, single digit averages that we were seeing towards the end of the year in 2007.”

While Aon's figures suggest flag carriers have seen a decrease in the number of passengers travelling last year, the aviation industry as a whole appears to continue to expand. According to figures from the Civil Aviation Authority, UK airports handled 241 million passengers during 2007. This represents an increase of 2.4% on 2006. However, this growth is slower than that seen over the last decade and continues a trend set in 2005.

In May 2007, aviation analysis firm OAG reported that global aviation growth had hit an ‘all-time high’ with a 5% increase in the number of flights scheduled for May 2007 compared with the same month the year before. According to the latest statistics from OAG, this represents an additional 113,827 flights and 17.7 million extra seats available to travellers. In announcing these figures for May, Duncan Alexander, Managing Director of OAG, said that from an industry perspective ‘this healthy growth bodes very well for the future’.

On predicting an outlook for the year ahead, Mr Allan said: "Ultimately, aviation is a catastrophe business." Comparing the level of claims in 2007 with those of previous years, he said: "The interesting thing about the high level of hull claims is that they haven't come with a high level of liability claims. The number of fatalities in 2007 was below the average from 1995 to 2006. So what you've got is, while there have been these hull claims, you've got a lot of people coming away from those ok."

Looking to some of the aviation incidents to have occurred in the last few years, such analysis appears justified. In January of this year, a British Airways jet from Beijing to London crash landed short of the runway, causing extensive damage to the undercarriage and both wings. Despite there being 136 passengers, only three were treated for injuries. Similarly in August 2005, an Air France jetliner crashed while attempting to land at Toronto's Pearson International Airport. All 297 passengers and 12 crew members survived the crash, despite severe damage to the aircraft.

Citing such examples, Mr Allan explained that ten years ago incidents such as these ‘could have potentially caused a massive loss of life and resulted in significant liability claims’. Yet he added that in actuality ‘you had 250 people being evacuated from a plane with bumps and bruises, but not the liability claims you would have seen historically’.

Such claims are supported by industry statistics. Figures from Ascend's Annual Aviation Safety Report show that in 2007 passenger fatalities fell by 20% compared to 2006, to 631. Both passenger fatalities and the number of fatal accidents in 2007 were well below long-term trends, with the average for the decade standing at 718.9. It is also, reportedly, a significant improvement on the 1990s' average of 954.4 passenger fatalities a year.

Ascend also claims that the long-term trend for the aviation industry is for fewer fatal accidents. On assessing 2006, the aviation analyst confirms that in the late 1940s the figure was between 40 and 50. By the 1980s this figure had halved. Although in the two decades up to 2001, as the industry expanded, this improvement in the number of fatal accidents stalled. This trend has been reversed over the last few years as the industry's growth has continued.

Improvement in safety and therefore liability claims is an obvious priority for those involved in the aviation industry, who Aon describe as being ‘very, very busy’ in ensuring ‘the industry as a whole can be as safe as it possibly can be’. Improving safety standards has been a ‘driver’ alongside capacity in prices coming down, according to Mr Allan of Aon.

"When you look at the loss rates over the last five, ten years, they've been very, very good, and that is what has attracted all this extra capacity. You need to be aware of the risk, but that is what insurance is all about."

This article is provided for general information purposes only and is subject to the full terms and conditions on our website. Any policies referred to in this article will be subject to separate terms and conditions and this article should not be regarded as a substitute for referring to those terms and conditions.

Last updated on 28 Mar 2008

insurance coverage

Home-Based Business Owners, You Need Insurance Coverage

When you start a home-based business, buying insurance may not be your first priority, but you cannot afford to ignore it either. When the unexpected happens -- and it will -- having insurance coverage may mean the difference between the success and failure of your home-based business.

You may not require all types of insurance listed here, but taking some time now to consider your insurance needs can save you money and headaches in the future. Ultimately, after reading this article, the best way to determine your complete needs is to consult with your insurance agent. Explain to them the details of your home-based business and he or she should be able to determine the best insurance coverage for you (and any employees).
Health Insurance

Health insurance should be the first consideration for yourself and any employees you may have. If you have just left your current job to start your own business, you may be eligible for COBRA, which will provide temporary interim coverage. This will keep you covered while you search for the best health insurance policy.
Disability Insurance

Disability insurance will guarantee that you have some income should you suddenly become unable to work because of injury or illness. Having this extra peace of mind is almost always well worth the extra money you pay.
Life Insurance

Life insurance will help ensure that your family has the money it needs should you meet with an untimely death. Some lenders require that you have life insurance before they'll issue a loan; this guarantees that the loan will be repaid if you meet with an untimely end.
Business Property Insurance

Business property insurance helps protect you against loss of inventory or equipment. If your business equipment or inventory is damaged in a flood, fire, or other disaster, this type of insurance will allow you to recoup your losses.
General Liability Insurance

Comprehensive general liability insurance is necessary for your home-based business if you plan on having clients or customers visit your home. Whether you plan to hold meetings, allow customers to pick up merchandise, or have members of the public enter your home for any other reason, this insurance will protect you if someone is injured while on your property. This insurance will typically pay for your legal defense should you face a lawsuit as the result of a fall or other damage that occurs on your property.
Business Interruption Insurance

Business interruption insurance will help your business recover from natural disasters. It will cover you for income lost during the disaster, and will pay for operating expenses that continue to accrue, even though your business isn't up and running.
Workers’ Compensation Insurance

Workers' compensation insurance is an absolute necessity if you plan on having employees working out of your home. Without workers' comp, you'll be responsible for any medical expenses arising from injuries employees sustain while working for you. Many home-based business owners mistakenly believe that this type of insurance is only required by businesses that have a retail or separate location, but that's not the case. Another mistake is assuming that only ‘dangerous’ employers (such as construction or movers) need this type of insurance. But what if your employee slips on the stairs or their chair breaks? While those are both unlikely, they are possible and the less risky your business, the cheaper the insurance will be.

These insurance plans can help ensure that you are prepared to face any eventuality that might occur while you are running your own business. Disasters, accidents, and crises can strike at any time. By preparing now, you may be saving you and your company significant financial loss, wasted time, and difficulty.

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Lessons For The Insurance World

Lessons For The Insurance World

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Jay Himmelstein’s compelling Narrative Matters essay about his niece’s illness and the limits of her student health insurance program presents important lessons for those of us working to ensure adequate economic access to necessary and appropriate health care for college and university students.

Because it is the colleges and universities that decide both their institutional requirements for students to have adequate coverage and the level of benefits for the university-sponsored plan (including plan limits, coinsurance, and deductibles), I sent Himmelstein’s essay to more than fifty campus student health leaders. In my cover note I wrote: "If there are lessons here for the insurance world, they are two: (1) Voluntary plans are problematic because of risk selection, and (2) plan limits for this basically healthy population might harm only a few people, but their physical suffering will be significantly compounded by economic worries, and they might forgo necessary care."

I received extremely positive responses from many of these student health leaders. As evidence of how important Himmelstein’s essay is, let me quote from one of the responses: "It is a very a timely article for us as our university administration and graduate school are currently looking at ways to reduce the cost of student health insurance.... I am afraid they are going to suggest reducing or limiting the benefits of our excellent plan, meaning that what I read in this essay could very well happen to one of our students. I am going to distribute copies of this essay it to our Student Health Insurance Advisory Committee. Thanks for sending it."

In turn, I say thanks to Health Affairs and Himmelstein for this important—and clearly timely—essay.

Stephen C. Caulfield
The Chickering Group, an Aetna Company, Cambridge, Massachusetts

types of insurance

As you already know there are many types of insurance. Knowing which policies will best suit your needs is a key to protecting yourself and your family from unexpected events. BY having the protection that you need, when you need it, you give yourself and your family a tremendous advantage when things go wrong.

If you have a family or run a business, you certainly need life insurance. Life insurance comes in many different flavors and choosing the correct policy is often confusing. One thing is certain, however, and that is you want to provide for your family in the event of your death. The actual type of policy that will best meet your requirements is something that only you, your spouse, and the insurance carrier can decide.

There is another side to life insurance, too. What if you do not have a family? In a case such as this, life insurance, unless it is provided free to you by your employer, may be an unnecessary expense. After all, who will be your beneficiary?

Other types of insurance, such as automobile insurance, are clearer to understand. If you do not own a car, you obviously do not need this type of insurance. If you do own a car and drive it, you almost certainly are required to have it by state law.

Homeowner's insurance is required by most lenders as long as you are paying on the mortgage. In the event something should happen to the home, the insurance on it will help cover the costs of repairing it or replacing it if it is completely destroyed.

Once the mortgage is paid, the homeowner is at liberty to carry or not carry insurance as long as that is allowed by state and local law. Even though a homeowner may be tempted to cancel homeowner's insurance or reduce the coverage once the mortgage is paid that is often a bad idea.

Disability income insurance is another type of insurance that most people should at least consider. A long-term disability insurance policy kicks in should you be injured or suffer from a disease that makes it impossible for you to continue working.

It is true that most employers carry worker's compensation plans that can help should you be out of work for an extended period of time, but worker's comp can be complicated and it often does not provide enough money to cover both medical expenses and household expenses. There are also time limits on how long you can receive payments. A long term disability policy can help offset those costs and help your family maintain a more normal lifestyle.

Health insurance is another of those very important policies that all people should have. Health insurance is often provided by employers, and for many people, this is the only affordable way they can get it. Often employers may offer a choice between HMOs (health maintenance organizations) and traditional fee-for-service care. Rates for HMOs are usually less expensive but they normally have more constraints on which doctor or hospital you can use. Privately purchased health insurance is much more expensive and should be well researched before you decide a policy.

The above are just a few of the many types of insurance that you may wish to look into. An excellent way to learn more about insurance and what you need is to speak with a qualified insurance agent.

Buying Life Insurance Online - Is it a Really Good Idea?

By: Michael Challiner

The advent of the internet has opened up the possibility of cheaper life insurance for all.

In years gone by, if you were considering life insurance you would probably have invited an insurance salesman from your favourite insurance company to meet you or alternatively gone to your local insurance broker. But rarely would you have been courageous enough to get competitive quotations. It just wasn't done. You trusted the salesman to do the best for you and surely you thought, life insurance is somewhat technical and requires specialised knowledge. All very cosy. All very expensive. How life has changed!

People now realise that life insurance is not that complicated. If on a scale of 1 to 10, buying car insurance online rates 9, life insurance must be a 7 or 8. This has opened up the Internet as a prime arena for cut-price life insurance. That's not to imply that life policies bought on the Internet are in any way substandard. No, you're most likely to end up with a policy from one of the UK 's big insurers like Norwich Union or Legal & General and they'll be exactly the same policies as you could buy anywhere else. It's just that the intense competition on the internet and efficiency and simplicity of the system, means that most online brokers decide to cut the commission and roll back the savings into lower prices.

Ah yes I hear you saying, 7 or 8 implies that life insurance is more complicated than car insurance. Yes it is - but that doesn't mean that it represents a problem. The companies selling life insurance online recognise that many clients feel that some level of personal advice is useful and indeed, necessary. They accommodate this with a mix of useful information on the web site and more often than not, with a short telephone conversation with a life insurance adviser prior to you buying. This provides reassurance and helps to ensure you really do get the policy options you need all at rock bottom prices.

Buying online certainly is a good idea.

Author Bio

Michael Challiner has 15 years experience in financial services marketing at senior level. Michael now works as the editor for Express Life Insurance Quotes

Travel Insurance - Few Bargains for the Over 65's

By: Michael Challiner

At last you've retired. It's now time to relax and experience a slower pace of life. Even enjoy spot of gardening. But not all of today's modern over 65's have heard the message! Retirement is taking a new twist.

Less of the slower pace of life and substitute jetting around the world! International travel for the retired is here and booming!

It's all the result of a increased sense of adventure and willingness to experiment, combined with more money in the pocket. Cheaper air tickets have also helped! Even cruises, once the territory of the seriously rich and famous, have become affordable. An escape to Antigua and a fortnight in the Canaries or a weekend in Stockholm are now firmly on the over 65's travelling schedule.

Then a fly sticks in the ointment. Finding economical travel insurance when you're over 65 is not easy. Insurance companies recognise that people have healthier lives and are living longer, and in recognition the insurers are offering far more products for the older market. But with travel insurance, the over 65's are still faced with exorbitant premiums.

Premiums rocket as you get older and if you're looking for an annual policy for an extended holiday or a series of holidays, the problem becomes finding a policy at all rather than simply finding the cheapest price.

The dilemma revolves around the costs of medical claims experienced by the insurers. Over 65's are much more liable to make a medical claim and the claim size is well above average too. Against this, older travellers reportedly lose less luggage - but these savings are counter-balanced by the fact their belongings are liable to be worth more.

The result is that even if you are fit, the lowest priced annual policy for the over 65's could cost £1,000 per person - that could be more than the cost of the holiday itself. Faced with these charges, the solution is to buy a separate policy for each trip. But even with a good medical history, the cost of insuring a 3-week holiday in the South of France starts around £65, and rises enormously for destinations in America and further a-field.

What's the solution? You're recommended to shop around. Your travel agent may offer a quotation but don't snap his hand off until you've got competitive prices. You'll almost certainly find a much cheaper alternative through surfing the Internet and buying online.

But don't make your final decision simply on the basis of cost. Always examine the small print. Some travel policies will insure you for up to 21 days, others up to 31 days or 45 days. Some policies will only cover you if you're staying in booked accommodation rather than staying with friends or relatives. No good for visiting family in New South Wales! Then you need to ensure that you've got adequate cover for medical and hospital expenses and don't spare the horses - think of a high figure and triple it! You'll be amazed how expensive quality medical attention can be whilst you're abroad. Incidentally, it's important that your insurer will fly you home to the UK if your medical condition demands. And don't overlook comparing the excesses you have to pay per claim. Finally, check that the policy pays medical costs direct to the hospital rather than you paying first and having to reclaim.

And now comes the really good bit - jet off and ENJOY yourself!

Author Bio
Michael writes for Brokers Online Life Insurance Quotes who offer most UK financial services including travel insurance

Life Insurance - Money Saving Top Tips

By: Michael Challiner

More and more people are buying life insurance online and the numbers seem to be doubling every two years. The reasons are clear. Prices are lower on the Internet and life insurance is fundamentally a simple insurance product.

Despite the underlying simplicity of life insurance, most web sites channel their online clients through a telephone based help and advice service manned by experienced personnel. They represent your safety net so if a little technical knowledge is called for, help is at hand.

But it's always a good idea to have a few Top Tips in your back pocket when you're shopping online for life insurance. They'll help you ask the right questions and find the best policy.

1. Always have your Life Insurance policy "Written in Trust".

This means that in the event of a claim, the money goes directly and immediately to the person(s) you nominate when you first take the policy out. It also avoids all possibility of your estate having to pay Inheritance Tax on the proceeds of your policy and that could represent a 40% tax saving !

All you have to do is tell the online brokerage organising your policy that you want your policy "Written in Trust" and the names of the people who the life insurance company pay in the event of a claim. They will then sort it all out for you. The extra good news is that this service is invariably free of charge. So it's a win win situation and there aren't many of those around these days !

2. In the early years a Reviewable Life Insurance Policy will be cheaper but a Guaranteed Policy will work out a better buy in the longer term.

With a "Guaranteed Policy" the insurance company guarantees never to increase your policy's premium.

With a "Reviewable Policy" you agree that your insurance company can review the cost of your policy at regular intervals. But don't be kidded - in our experience a "review" is just another word for a price increase. After all, who's ever heard of an insurance company passing up a chance to charge you more! The review intervals are usually between 2 to 5 years but this does vary between insurance companies. You will find the details of the review intervals on the documents sent to you before you accept the insurance - these are called The Key Features Documents.

So, comparing otherwise like for like policies, in the early years the premiums for a "Reviewable Policy" will undoubtedly be lower than the premiums for a "Guaranteed Policy". Thereafter, the premiums for a Reviewable Policy increase eventually catching up with and overtaking, the premium for a "Guaranteed Policy".

In our experience, you can expect the monthly premiums for a Reviewable Policy to exceed those of a Guaranteed policy in about 7 to 10 years and then within the following 10 years, more than double again. If your budget is currently tight then by all means choose a Reviewable Policy - after all your salary may increase in coming years and ease the strain. On the other hand, if the premiums for a Guaranteed Policy are affordable, we think they represent your best buy.

A footnote. Many insurance companies have stopped offering "Guaranteed" rates for standalone critical illness insurance policies. This because they have experienced much higher claim rates than they initially expected. However, you may still find a Guaranteed life insurance policy that also provides critical illness cover. As we have explained, "Guaranteed" rates are especially good value and if you can get a quote for a Guaranteed life policy that includes critical illness cover, you may have a real bargain.

3. Thinking about a Joint Life Insurance Policy?

A Joint Life Insurance policy is usually written on a first death basis. This means that the policy will pay out on the death of the first policyholder, subject to the policy being in force at the time. This leaves the second person uninsured and older. Older people can struggle to get life insurance at an affordable premium, so rather than a Joint Policy consider taking out separate policies now. Overall it will work out a little dearer - but you get twice the cover and double the peace of mind.

4. Taking out a Life Insurance Policy? Now would be an ideal time to include Critical Illness cover.

Are you likely to need Critical Illness Insurance in the future? Yes? Then consider adding it now to the life insurance policy you're arranging. Why? There are three reasons.

Firstly, a Life Insurance policy combined with Critical Illness cover will work out significantly cheaper than buying two separate policies. Secondly, as we have already explained in the footnote to Tip 2, you may be able to buy a combined Life and Critical Illness policy with a guaranteed premium. That could be a real bargain. Finally, premiums for critical illness cover increase rapidly as you get older - so the sooner you take it out, the cheaper it will be.

5. Don't confuse Terminal Illness cover with Critical Illness cover.

There's world of difference between Terminal Illness and Critical Illness cover so it's important to understand the difference.

Terminal Illness cover pays out the insured lump sum if a Medical Doctor diagnoses you with an illness from which the Doctor expects you to die within 12 months. Most good life policies automatically include Terminal Illness cover at no extra cost. It's basically an early, and welcome policy payout.

A Critical Illness policy pays out the insured lump sum if you are diagnosed with one of a wide range chronic illness and there is no life expectancy criteria. Indeed, with many of the insured illnesses you could expect to survive for many years. For example: certain cancers, heart disease, stroke, multiple sclerosis, loss of speech, sight or hearing, onset of Parkinsons or Alzheimers disease, third degree burns etc. Say you were an engineer aged 40 and you lost your sight. A Critical Illness policy would pay out immediately and that money could well be vital in helping you and your family through many difficult financial years ahead. If you just had Terminal Illness cover there'd be no chance of a payout.

So as you can see, Critical Illness cover is far more comprehensive than simple Terminal Illness cover and for that reason critical illness cover always costs you extra.

Author Bio
Michael Challiner has 15 years experience in financial services marketing at senior level, the last 5 of which specialised in online marketing. Prior to that he spent 15 years in advertising with two of the world's top advertising agencies, J Walter Thompson and Saatchi & Saatchi.
Michael now works as the editor of Express Life Insurance on behalf of Andromeda Webs Ltd