School Committee Requests Mediation; Deadlock over Teachers' Insurance Costs

The School Committee has requested mediation to break a bargaining deadlock with the teachers' union, primarily over health insurance costs. The Educational Association of Worcester, the local teachers' union, has rejected a school board proposal to increase the employee cost of health insurance by 10 percent. "Given the EAW's refusal to engage in meaningful negotiations regarding health insurance, the School Committee has determined it appropriate to exercise its statutory right to seek the appointment of a mediator," the board said in a prepared statement.

In response, EAW lead negotiator Louis J. Cornacchioli said, "We're not going to cave." The EAW was "absolutely surprised and somewhat concerned" about the School Committee's call for mediation, he said, and he added that introducing a mediator will just muddy the process. He also said that School Committee members have rarely attended negotiations between EAW and School Committee representatives. "They really don't have the understanding of what's going on in bargaining," he said, calling the request a tactical move to delay bargaining and make the EAW look greedy.

"I challenge the School Committee to reject the mediator and to come back to the table," he said. "Let's sit down again and let's keep going until we hammer out a contract. If we go this route, it'll be summertime and we'll be without a contract." The annual cost to the school board for employee health insurance is $16.2 million. The board proposed reducing its share of employee health insurance premiums from 90 percent to 80 percent for current employees and 75 percent for new hires. The decrease would be phased- in and, according to the board, the savings passed on to employees.

Stephen Mills, deputy school superintendent, faulted the union for the breakdown in negotiations. "It is unfortunate that the teachers' union refuses to work with the School Committee to address this problem," he said. "The union does not view this as a common concern but instead believes this is the School Committee's and city's problem. This kind of thinking makes it nearly impossible to make any meaningful progress at the bargaining table."

Mr. Cornacchioli, though, sees it differently, and said he believes the EAW and School Committee representatives were making good progress with negotiations. He also explained that the EAW is not opposed to the premium increase for its members, but said they'd like to see it phased in over three years.
"We understand how everybody's suffering from health insurance," he said. "We're willing to make concessions on health insurance, but we're not willing to jump completely to 80-20 and devastate the vast majority of the people we represent."

The school board said the union canceled two negotiating sessions scheduled for this month, most recently one slated for Tuesday. In its prepared statement, the school board referred to the move as "delay tactics clearly intended to frustrate efforts by the School Committee to enact meaningful health insurance reform at the start of 2006."

The statement also cited, as evidence of the union's unwillingness to bargain, the union's refusal of a school board offer in August to reinstate 10 classroom teachers in exchange for an agreement to expand high school classroom sizes to 27 for one year.

23.31 | 0 komentar | Read More

ZFS Weathers Storms to Reveal Record Results Insurance

Zurich Financial Services shrugged off US hurricanes and European floods to report record results, demonstrating the impact of operational improvements at the once-troubled insurance group. "My priority has been not to over-promise, but over-deliver," said James Schiro, the chief executive app-ointed three years ago to steer ZFS out of crisis.

Mr Schiro declined to comment on the outlook for profitability. But he remarked that recent trends in claims and signals from the reinsurance industry allayed fears of softer pricing. "We are seeing a firming in pricing for 2006 and 2007 and that's good news for us," he said. Net profits rose 21 per cent to Dollars 2.26bn in the first nine months, thanks to strong investment income and improvements on the life assurance side.

Business operating profits, a key internal measure, climbed 15 per cent to Dollars 2.86bn. Net profits in the third quarter reached Dollars 1.06bn, well ahead of market expectations. "ZFS released a very strong set of figures . . . the increase was driven by improvements in all segments," noted Andreas Frick at Sarasin, the private bank.

The rise in profits, also evident at other big insurers such as Allianz of Germany, came in spite of Dollars 1.1bn in losses linked to this year's uncommonly severe hurricanes in the US and flooding in Europe. ZFS's combined ratio in general insurance - an industry benchmark that measures costs and claims as a proportion of premiums - reached 100.9 per cent. The figure, which was lower than analysts had feared, in-cluded a catastrophe impact of 4.9 percentage points.

Mr Schiro attributed the containment of natural catastrophe claims to improvements in assessing risks and modelling damage, leading to more accurate pricing and the renunciation of unattractive business. "The set-up for that has taken us a couple of years," he said. Mr Schiro denied the boost in investment income, and especially capital gains, reflected adversely on the quality of earnings, and noted many insurers had used stronger stock markets to take profits recently.

Life assurance continued to improve its margin on new business, with a rise of 1.4 percentage points to 11.9 per cent in the first nine months. The pick-up was particularly evident in the UK, where ZFS has been restructuring to improve profitability, and where its margin on new business reached 11.1 per cent. Analysts were also re-lieved to see few surprises in reserving policy after massive provisions in 2003 and 2004.

ZFS set aside Dollars 64m in the quarter, taking the full-year figure to about Dollars 160m. Investors were also impressedby plans for additional cost cuts of Dollars 1bn in the nexttwo years. Shares in ZFS, which have performed strongly this year but lagged behind many rivals, surged by 5.6 per cent to SFr251.00.

23.28 | 0 komentar | Read More

Willis Gains Control of Chinese Broker Insurance

Willis, the New York-listed London-based insurance broker, will announce today that it has been granted permission by the Chinese regulator to lift its ownership of Willis Pudong Insurance Brokers, a Chinese insurance broker, to 51 per cent. Willis said it was the first international broker to gain the permission of the China Insurance Regulatory Commission to hold a majority share in a fully licensed Chinese insurance broker.

It added that the approval from CIRC gave it control over Willis Pudong, which would become a subsidiary and have its results consolidated into the Willis group. Sarah Turvill, chief executive of Willis International Holdings, Willis's retail broking operations outside of North America, the UK and Ireland, said: "The (Chinese) broking market is very new and the market share of the broking market is increasing at a very fast rate. We would intend to be at the forefront of that growth."

Willis gained permission last year from the CIRC to acquire a 50 per cent stake in Pudong Insurance Brokers, a 100 per cent Chinese- owned broker, as well as a licence to operate in China's insurance and reinsurance broking markets. Willis did not disclose the amount paid for the initial 50 per cent stake, or what it would pay to lift its holding. Willis Pudong operates in the insurance and reinsurance markets for commercial risks, with strengths in energy, construction, aviation and the property and casualty markets. It also had a growing presence in the employee benefits market. Ms Turvill said.

International insurers are increasingly targeting China. Last week Lloyd's was granted permission by the CIRC to set up its own reinsurance company in China, which will provide reinsurance to Chinese insurers in local currency.

10.23 | 0 komentar | Read More

Homes at Risk from Flooding Given Pledge on Insurance

Households at risk from flooding will find it easier to buy insurance against damage after a new commitment from insurers. The Association of British Insurers said its 400 member companies would continue to cover customers with homes or small businesses in high-risk areas where improved flood defences were due to be in place in the next five years. Previously, ABI members had only pledged to cover such properties if defences were improved by 2007.

Insurers would also continue to offer flood insurance to customers with homes or small businesses in areas that were adequately protected. However, the ABI warned that it could not guarantee cover for all flood-prone properties and where insurance was available the price of cover would reflect the risks involved. The commitment was also dependent on government action to reduce flood risks.

Elliot Morley, the environment and climate change minister, welcomed the commitment, saying it was underpinned by cross- government action to im-prove flood protection. The ABI said the new commitment would affect about 100,000 homes which were in vulnerable areasfor which improvements in flood defences were earmarked over the next five years. Such sites included Selby in North Yorkshire, Fordingbridge in Hampshire and West Bridgford, near Nottingham.

Stephen Haddrill, director-general of the ABI, said: "This is good news for the millions of homeowners and businesses who rely on insurance for financial protection from the cost of flooding." But he added: "We expect climate change dramatically to increase the flood risk, so continued improvements on the ground are vital. For flood insurance to remain widely available, the government must make further progress in reducing the risk in vulnerable communities."

The ABI said that while insurers would offer a "competitive market", the premiums charged would reflect the risks involved. It said its members could not guarantee cover for existing customers in flood- prone areas with insufficient defences where no improvements were planned over the next five years. However, in these cases, insurers would work with the customers and local authorities to explore ways to reduce the risks and make the property insurable in some form.

The ABI estimated that of the 2.2m properties at risk of flooding, only a "handful" were unable to obtain insurance cover. In addition, while the commitment covered only insurers' existing customers, the ABI said that last year its members were able to offer cover to 15,000 new customers in flood-prone areas. It said its commitment was dependent on the government reducing flood risk for 100,000 vulnerable homes over the next three years and maintaining investment in flood defences, taking into account the impact of climate change. It was also dependent on planning reforms to limit development on flood-prone areas, providing more details on flood risk and defence schemes and alleviating the risk of sewer and flash flooding.

09.58 | 0 komentar | Read More

Lloyd's Granted Chinese Licence Insurance

Lloyd's gained a foothold in one of the world's fastest growing insurance markets yesterday after it was granted permission to establish a reinsurance company in China. The announcement was made by Hu Jintao, the Chinese premier, during his state visit to the UK. Lord Levene, chairman of Lloyd's, said the granting of the licence by the Chinese insurance regulator was "a vote of confidence in the strength and expertise of the Lloyd's market".

He did not put a figure on the amount of business that Lloyd's expected to win from China but said "the potential is huge". He admitted it would be several years before Lloyd's made money out of its Chinese investment, although Lloyd's would not invest large amounts initially. "I will be surprised if we make any significant money there for four or five years,'' he said. "But in 10, 15, 20 years, whoever will be running Lloyd's will talk about China as one of our biggest markets.''

Lloyd's will, over the next year, set up a reinsurance company in China, the first time that the market has established a company. This will be considered a local, domestic reinsurer and Chinese insurers will be able to acquire reinsurance cover from it in local currency. Chinese insurers are obliged to buy reinsurance from local companies in local currency. The Lloyd's-owned reinsurer will, in turn, acquire its own reinsurance from the Lloyd's market. Up until now, Chinese insurers have been able to acquire cover in the Lloyd's market but have been forced to do so using foreign currency.

Lloyd's, which has 12 months to set up the reinsurer, will also be able to take advantage of the ending next year of China Re's monopoly, whereby Chinese insurers must cede 20 per cent of all their business to China Re. Reinsurers Swiss Re and Munich Re already have a presence in the Chinese reinsurance market.

Lord Levene said that, although the initial licence was to write reinsurance, Lloyd's had not ruled out writing direct insurance at a later date. Geoff Miller, of Bridgewell Securities, said: "Over the long term, it (China) will probably be very important but on a one or two- year view, the impact on Lloyd's will be de minimis."

02.17 | 0 komentar | Read More