News in Brief: Agency withdraws rating of direct insurer

by Maryvonne Gray 13 Apr 2015

News in Brief: Agency withdraws rating of direct insurer

Agency withdraws rating of direct insurer
AM Best has withdrawn its ratings of IAG’s AMI Insurance saying it was at the company’s request.

The agency affirmed AMI’s financial strength rating of A- (Excellent) and issuer credit rating of ‘a-‘ with a stable outlook, saying it reflected AMI’s ‘established business profile and good operating performance’.

Despite the good rating, AMI was being withdrawn from AM Best to bring it into line with IAG’s other brands, said IAG’s head of corporate affairs Craig Dowling.

“When IAG in New Zealand purchased AMI in 2012 it was always the intention to transition the provision of our ratings service to S&P from AM Best to achieve consistency across our group.
 
“We maintained the relationship with AM Best for a period while other integration work was completed, and have appreciated their involvement with our business over this time, but it is simply a matter now of completing another step in the integration process.”
 
 
Company failure due to cyber-attack expected this year
A cyber security specialist at Lloyd’s insurer AEGIS London says business failure due to the financial consequences of a cyber-attack is ‘fully expected’ in 2015.

Joe Hancock said attacks were becoming more and more destructive and the trend would only continue.

“Affected businesses [will be] squeezed between a shrinking top-line due to reputational harm and rising costs to get back on their feet,” SC Magazine reported him as saying.

Hancock said directors and their governance processes were clearly implicated.

“Cyber attacks are the new normal. It is not enough to say ‘it won’t affect us’, ‘it wasn’t patchable’ or that an attack just wasn’t detected,” he said.
 
Economic losses from natural catastrophes could triple in 15 years
Natural disasters could cost US$750 billion annually in 15 years unless steps are taken to reduce bad development choices, according to results of a catastrophe modelling study presented at the third UN World Conference on Disaster Risk Reduction in Sendai, Japan.

The study, which was conducted by modelling firm AIR Worldwide, examined the trend of growing economic losses from global natural catastrophes by looking at nearly 20 years of historical events.

The company normalised the losses based on today’s conditions including changes in population, wealth and urbanization of catastrophe prone areas and found they oscillated around a baseline value of US$240 billion, Insurance Journal reported.

Managing director of AIR Worldwide international operations, Dr Milan Simic, said: “Although global catastrophe losses are trending upwards over the past decades, much of this can be attributed to population and wealth growth, and an increase in properties being built in areas of high catastrophe risk, such as coastlines.”

Jerry Velasquez, chief of advocacy and outreach for the United Nations Office for Disaster Risk Reduction (UNISDR), which commissioned the study, added: “In order to limit economic losses in the future, we need to improve urban planning and make economic growth resilient.”