Azim tipped to be new PruBSN chief executive officer

PETALING JAYA: Prudential BSN Takaful Bhd (PruBSN) chief operating officer Azim Mithani will soon helm the company as chief executive officer pending Bank Negara approval.
The British-trained actuary is also currently treasurer of the Actuarial Society of Malaysia.
Before assuming his current position, Azim was chief financial officer and appointed actuary of Prudential Assurance Malaysia Bhd (PAMB).
Azim Mithani is a British-traine d actu ary.
A sister company of PAMB established in 2006, PruBSN is a 51:49 joint venture between Bank Simpanan Nasional Bhd and Prudential Holdings Ltd.
Many industry observers hailed PruBSN’s choice of Azim as a right one; as a qualified actuary and risk manager, he would be able to understand and assess risk effectively since risk was an important consideration in determining premiums.
As an actuary, he would be able to further instill and enhance the company’s risk management practices. This is in line with the regulatory changes in the insurance industry that placed greater focus on risk management.
It is learnt that Azim’s predecessor Mohamad Salihuddin Ahmad, who joined PruBSN in 2006, is now with Great Eastern Life Assurance (M) Bhd heading the project management team to secure a takaful licence for the company.
According to sources, Salihuddin was hand-picked by Great Eastern Holdings group chief executive officer Ng Keng Hooi to head its future Islamic insurance operations. He left PruBSN in August.
Talk is rife that Great Eastern Holdings Ltd, the parent of Great Eastern Life Malaysia, is a front runner to clinch one of two takaful licences to be awarded by Bank Negara later this year, in line with the financial services sector liberalisation.

About Essent

Essent Guaranty, Inc. is a member of the Essent Group Ltd. family of companies, which, through its subsidiaries, is preparing to offer private mortgage insurance and reinsurance coverage with respect to United States risks. The company has secured $500 million in equity funding from a group of experienced financial services investors, including Pine Brook Road Partners, Goldman Sachs, J.P. Morgan, PartnerRe, and Renaissance Re.
Essent's mission is to support homeownership for borrowers who can afford a home, but not a large down payment, by insuring mortgage lenders and investors from credit losses. The company will achieve this mission by providing private capital to take mortgage credit risk, and working as a risk management partner with lenders and other mortgage investors. The company's headquarters are in Radnor, Pennsylvania. Additional information may be found at

Triad Guaranty to Sell Mortgage Insurance Operating Platform to Essent Guaranty; Sale Benefits Triad Stakeholders and Supports New MI Entrant

WINSTON-SALEM, N.C., Oct. 7 /PRNewswire-FirstCall/ -- Triad Guaranty Inc. (Nasdaq: TGIC) today announced that it has reached a definitive agreement to sell its information technology and operating platform to Essent Guaranty, Inc. ("Essent"), a new mortgage insurer founded to provide private capital to America's housing finance system.
Under the terms of the asset purchase agreement, Essent will acquire all of Triad's proprietary mortgage insurance software and substantially all of the supporting hardware, as well as certain other assets, in exchange for up to $30 million in cash and the assumption by Essent of certain software contractual obligations. Approximately $15 million of the consideration is fixed and up to an additional $15 million is contingent on Essent writing a certain minimum amount of insurance in future years. Triad will retain the obligation for all risks insured under its existing insurance contracts and will continue to pursue the voluntary run-off of its existing in-force book of business.
Essent, which is headquartered in Radnor, Pennsylvania, will establish its operations and technology center in Winston-Salem, North Carolina, where Triad is based, and a number of Triad's information technology and operations employees are expected to join Essent upon closing of the transaction. As part of a services agreement between the two companies, Essent will provide ongoing information systems maintenance and services, customer service and policy administration support to Triad after the closing. Triad will continue to directly manage loss mitigation and claim activity during its run-off and will retain its personnel in the loss management, quality assurance and corporate areas to perform these functions.
"We believe that this is a very beneficial transaction for both Triad and Essent," said Ken Jones, president and chief executive officer of Triad. "While preserving our control over loss mitigation and claims processing to protect our policyholders during run-off, Triad stakeholders benefit from the proceeds generated by the sale of the platform and reduced costs to service our run-off book of business going forward. The platform, which we believe will benefit from Essent's ongoing maintenance and investment, provides Essent with the opportunity to enter the market utilizing an established operating platform and a seasoned team of mortgage insurance technology and operations professionals."
"The acquisition of Triad's operating platform is the next major step in the formation of Essent's mortgage insurance business, which is being created to support qualified borrowers who can afford a home, but may not have the funds for a large down payment," said Mark Casale, president and chief executive officer of Essent. "With this transaction, we can begin to provide mortgage insurance in the near future on a proven technology and operating platform in which our clients and regulators can have utmost confidence."
Casale added, "We're also pleased to be making excellent progress in the National Association of Insurance Commissioners' expedited licensing pilot program, and have received approvals from 20 states to date. With the benefit of a strong capital base, we are building a new company that we believe can meet our clients' mortgage insurance and risk management needs today, and for years to come."
The transaction is expected to close in the fourth calendar quarter of 2009.
About Triad
Triad Guaranty Inc.'s wholly owned subsidiary, Triad Guaranty Insurance Corporation, is a nationwide mortgage insurer pursuing a voluntary run-off of its existing in-force book of business. For more information, please visit the Company's website at www.tgic.com
This release includes "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include estimates and assumptions related to economic, competitive, regulatory, operational and legislative developments and also include, but are not limited to, statements relating to the timing of the Asset Sale and satisfaction of conditions to the Asset Sale, subsequent payments related to the Asset Sale, future benefits and services, and future economic and industry conditions and are not historical facts and typically are identified by use of terms such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" and similar words, although some forward-looking statements are expressed differently. These forward-looking statements are subject to change, uncertainty and circumstances that are, in many instances, beyond Triad's control and they have been made based upon Triad's current expectations and beliefs concerning future developments and their potential effect on Triad.
Actual developments and their results could differ materially from those expected by Triad depending on the outcome of a number of factors, including but not limited to: potential difficulties that may be encountered in closing the Asset Sale; potential uncertainties regarding market acceptance of the Asset Sale; uncertainties as to the timing of the Asset Sale and the satisfaction of other closing conditions to the Asset Sale, including the receipt of regulatory approvals; competitive responses to the Asset Sale; impact of current and future economic conditions on the Asset Sale; the possibility that the Illinois Department of Insurance may take various actions regarding Triad if it does not operate its business in accordance with its revised financial and operating plan and the corrective orders, including seeking receivership proceedings; Triad's ability to operate its business in run-off and maintain a solvent run-off; Triad's ability to continue as a going concern; the possibility of general economic and business conditions that are different than anticipated; legislative, regulatory and other similar developments; changes in interest rates, employment rates, the housing market, the mortgage industry and the stock market; and various factors described under "Risk Factors" and in the "Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995" in Triad's Annual Report on Form 10-K for the year ended December 31, 2008 and in other reports and statements filed with the Securities and Exchange Commission. Forward-looking statements are based upon Triad's current expectations and beliefs concerning future events and Triad undertakes no obligation to update or revise any forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements are made, other than as is required

‘People Risk’ Tough For ERM, Regulators To Manage

New York City—No matter how many regulations or internal fail-safe systems an organization or a government puts in place, preventing systemic economic collapses means challenging peoples’ worst instincts, an enterprise risk management conference was warned this week.
Following a wide-ranging panel discussion of the financial meltdown and its implications for corporate governance—entitled, “A Conversation About Risk: What Keeps You Up At Night?”—an audience member asked the experts to explain how companies and regulators can mitigate “people risk” to discourage behavior that is at best reckless, and at worst unethical or even illegal, when the specter of large profits loom.
“One of the clear weaknesses here is people,” said the attendee at the ERM conference put together by the events division of The National Underwriter Company, part of Summit Business Media. “How do you get board buy-in to proceed with caution on risk? How do you mitigate the inherent ‘people risk’?”

“There is a natural human reluctance when things are going well to challenge the status quo,” said Helen Galt, senior vice president, actuary and chief risk officer at Prudential Financial Inc. “Even though some of the markets were defying the laws of gravity, people were reluctant to miss the boat. More attention should have been paid to nightmare scenarios.”
She said CROs need to “challenge management to define their risk tolerance more clearly.”
Ms. Galt later added that collateralized debt obligations packaging subprime mortgages were “embraced because of the high ratings assigned to them by rating agencies”—a level of trust and confidence that turned out to be misplaced.
She suggested that “if you can develop your own internal capabilities to analyze these complex products, you must do so. But if you find you need 300-page documents to fully explain how the product works, it’s probably too complicated.”
Ms. Galt said her firm “basically decided we were not going to invest in CDOs. After they were sliced and diced multiple times, it was hard to understand what we were looking at.”

europe insurance

I would expect much less than the UK, as the plans in Germany are generally not funded and thus no Trustee type work which is good for the pension consulting business. Annual valuations need to be done but these are for tax purposes and of course for International accounting purposes.
"Half the harm that is done in this world is due to people who want to feel important. They don't mean to do harm -- but the harm does not interest them. Or they do not see it, or they justify it because they are absorbed in the endless struggle to think well of themselves."

Cat Bond Market Set for Active Fourth Quarter, Reports Guy Carpenter

The report by Guy Carpenter & Co., LLC, and GC Securities, a division of MMC Securities Corp. concludes that a number of trends are converging that could result in a total of between $3 billion and $4 billion of issuance in 2009. These include an increase in risk capital and the recent upsizing of catastrophe bonds in the third quarter of 2009.
According to the briefing, new risk capital issued in the third quarter of 2009 rose 28.8 percent compared with the third quarter of 2008. Two transactions, both closed in July 2009, resulted in $412 million of new risk capital issued, up from $320 million during the second quarter of 2008. For the first three quarters of 2009, a total of 11 catastrophe bonds have been issued, accounting for $1.79 billion in risk capital. Year-to-date issuance activity has been down 33.5 percent versus the same period in 2008.
FOURTH QUARTER 2009 OUTLOOKImprovement in global financial market conditions improving and advances in the insurance-linked securities (ILS) collateral solutions ⦣8364;" coupled with a stronger demand for issuance and the increasing capacity of investors ⦣8364;" have resulted in a shift in the ILS market relative to the beginning of 2009.
Investors are increasingly focusing on capital deployment and stimulating additional primary issuance, which is contributing to spread tightening, according to the report.
"Given the increase in risk capital and the performance of the two bonds issued in the third quarter ⦣8364;" both in terms of pricing and size ⦣8364;" a fourth quarter that would account for more than 40 percent of the year's total issuance is not unattainable," said David Priebe, chairman of Global Client Development, Guy Carpenter. "Redemptions resulting from cat bonds maturing and a fairly light Atlantic hurricane season should also increase demand for new issuance."
The consensus estimate for 2009 total issuance remains from $3 billion to $4 billion, implying a fourth quarter issuance rate of $1.2 billion to $2.2 billion.
"The recent tightening of spreads has brought the ILS market back, after the unusually wide spread we saw in the first half of 2009 had a dampening effect on issuance activity, particularly from reinsurers," said Chi Hum, global head of distribution, GC Securities. "Sponsors that had been hesitant to enter the market during the first half of 2009 because of pricing concerns may now renew their interest in catastrophe bonds, since the benefits of cat bond protection are available at more favorable price points."
THIRD QUARTER ACTIVITYParkton Re Ltd., on which GC Securities acted as co-lead manager and joint bookrunner, was upsized and ultimately priced below its initial price guidance. The initial target placement of $125 million resulted in a $200 million transaction. The North Carolina Joint Underwriting Association and North Carolina Insurance Underwriting Association (NC JUA/IUA), a new entrant to the catastrophe bond market, sponsored Parkton Re. The bond covers North Carolina hurricane losses based on an indemnity trigger.
The Eurus II Ltd. transaction, which closed a day later, was also upsized to EUR150 million (from EUR75 million). The bond, which covers European windstorm risk in Germany, the United Kingdom, Netherlands, France, Belgium, Denmark and Ireland, replaced Eurus Ltd, a $150 million bond that matured on April 8, 2009.
CATASTROPHE BOND REDEMPTIONSIn addition to new bonds issued, $300 million of catastrophe bond risk capital matured in the third quarter of 2009, bringing the year-to-date total to $2.54 billion.
A total of $660 million is scheduled to mature during the fourth quarter of this year.
RISK CAPITAL OUTSTANDINGFollowing consecutive quarters of declines, total risk capital outstanding increased from the second quarter of 2009 to the third quarter, reaching $11.3 billion ⦣8364;" up from $11.19 billion ⦣8364;" a net increase of $112 million (1 percent).
The current level of risk capital outstanding is consistent with that of mid-year 2007.
ISSUANCE COMPOSITION$200 million of the $412 million issued in the third quarter of 2009 had U.S. hurricane exposure, while the remainder had exposure to European windstorm.

European Actuaries Makes Proposal For Solvency II Standards

In a move to ensure greater protection for policyholders, without inhibiting innovation and market development, The Groupe Consultatif Actuariel Européen (the Groupe) make proposals for Solvency II professional standards.
Reportedly, the majority of those who will carry out the actuarial function under Solvency II, will be qualified actuaries and members of the professional actuarial bodies which make up the Groupe.
The Groupe proposes that there should be two main categories of standards: 1) public interest standards and 2) technical standards. Public interest standards would include qualification standards, ethical standards, governance standards and communication standards. Technical standards would include interpretative standards and technical implementation standards.
Caroline Instance, chief executive of The UK Actuarial Profession, said: “The Groupe’s submission considers the various stages of the process of setting, implementing and enforcing standards and makes some suggestions on how these responsibilities might be allocated. The paper acknowledges that the issues involved in setting a full range of public interest and technical standards are far-reaching and complex. The paper also notes that, currently, there is a wide diversity within Europe of types of standards and arrangements for setting them, with differing roles for the professional bodies, supervisors or regulators and new public interest bodies such as the BAS in the UK.
“We consider that the implications of the Groupe’s submission for the UK should be considered collectively by the FSA, the FRC and the UK Profession and we shall be taking this forward with our colleagues in these organisations.”