Category: Risk Management

Cash ManagementRisk Management

Why Are Investor Relations So Important?

Following the implementation of GDPR, consumers, investors and businesses around the world are becoming increasingly aware of every communication they receive from a company.

As such, compliance, in all its forms, is now even more important to businesses than ever before, and in the financial and investment space this is as vital as it always has been, if not more so. Whilst it has always been crucial to success in the investment market, now compliance, and assuring investors of compliance, has been bought to the fore.

For example, the recent announcement that the UK Government is suspending its Tier-One Investment Visa Programme, with a view to making important changes to this to combat the risk of money laundering. Bruno L’ecuyer, Chief Executive Officer of the Investment Migration Council, made the below comment on the changes and how these would affect investors.

“The UK government may not have much influence with the European Parliament these days, but it has provided an object lesson in how to manage investor migration sensibly and for the benefit of its citizens.

“According to reports, potential investors will have to agree to undergoing a thorough audit of their financial assets, proving they have control of the required capital for at least two years, and will require audits to be undertaken by suitably regulated UK firms.

“Most notably, it appears the UK government recognises the value of investment migration and desires any investment made by individuals to have a greater impact on the UK economy, which is why it is apparently looking at scrapping its own government bond option in favour of directing investment into active and trading UK companies.”

As Bruno highlights, the importance of audits and transparency in this space is as vital as ever, and firms need to be able to prove to both their investors and the authorities that they are acting properly and are fully compliant with all relevant regulations to ensure their continued success.

This is why investor relations have, over recent years, become a vital aspect of any company, fund or asset manager. Many multinational companies, such as Hitachi, Etsy and the Coca Cola Company all operate their own investor relations departments, showcasing the increasing focus companies are putting on the role.

After all, as client satisfaction and feedback become buzzwords within the corporate space, it makes sense that investor relations should also increase in importance, and many companies and investors are now embracing this side of their business. Through strong communication and specialist support, companies, investors and fund managers can ensure that their investors remain on-side and that they understand that their money is in safe hands.

ArticlesFinanceRisk ManagementWealth Management

IVA or bankruptcy: what is the best solution for your debts?

If you are suffering from severe cash flow issues, you may be considering both bankruptcy or an individual voluntary arrangement (IVA). Bankruptcy and IVAs are both legally-binding and formal insolvency options between you and your creditors. However, while they might appear similar, there are some vast differences to consider before entering into one of the procedures. Most importantly, you should always seek insolvency advice before doing so to ensure you are not impacting your future finances.

 

With that in mind, Business Rescue Expert – a licensed insolvency practitioner firm – is sharing the difference between the two and what you can expect from both insolvency procedures.

 

Choosing an IVA or bankruptcy

Recently, both insolvency procedures have hit the news due to a number of high-profile celebrities suffering cash flow issues. Katie Price is the most recent victim, with her bankruptcy woes documented in the media. However, she is certainly not the only to face cash flow issues, with the total number of individual insolvencies continuing to rise in 2018. The Q2 Insolvency Service report made for particularly tough reading, with the number of individual insolvencies at its highest since Q1 2012. IVAs accounted for 62% of the total, with bankruptcy behind a further 14%.

 

Individual voluntary arrangements were, originally, intended as a better alternative to bankruptcy. IVAs are, generally, considered the more suitable option for those with assets they wish to protect. The procedure is defined as ‘less extreme’ than bankruptcy and also provides moratorium for the individual, with the breathing space helping to regain control of the issue and get to the root cause of the cash flow problems. However, an IVA is a much longer procedure than bankruptcy, and you could be tied up in the process for up to seven years.

 

Bankruptcy, on the other hand, is often considered as it is much shorter than an IVA – typically lasting no longer than 12 months. Unlike an IVA, however, your assets will be forfeit, and that could include your vehicle and house.

 

There are both advantages and disadvantages to each and, if you are not particularly savvy as to those, we suggest seeking advice to ensure you go down the right path.

 

Can the procedures affect my home?

The effect of the procedures on your home is a common cause of worry for many. If you do enter an IVA procedure, you will not be forced to sell your home. However, if it is highly possible that you could be asked to remortgage six months prior to the end of your IVA to free up any capital to repay your debts. This will only ever happen, though, if it is affordable for you. If not, an additional 12 months may be added to your IVA.

 

In the case of bankruptcy, however, your home will likely be affected. If there is any equity tied up in the house, your creditors may ask you to sell to repay their debts. Either way, you should seek advice at the earliest possible opportunity.

 

What about my car?

Another major cause for concern is your vehicle. IVAs ae much longer procedures than bankruptcy and, as such, you are likely to be able to keep your car. The same, unfortunately, cannot be said for bankruptcy, as the sale of your car could offer a large contribution to your debts. However, if you do require your car/van for your trade and rely on the vehicle to make money and repay your debts, you will, likely, be able to keep it. If this is the case, you must speak to your bankruptcy trustee immediately.

 

Could my job be impacted?

When you do enter insolvency or bankruptcy, the details will be made public. While that doesn’t mean a front page story in your local newspaper, your details will be placed on the Insolvency Register. Similarly, a notice will be placed in The Gazette for your creditors to find. If you work in the finance industry or are a director of a company, both procedures can significantly affect your standing.

 

If you file for bankruptcy, you cannot act as a director of a limited company. However, there is no such prohibition with an IVA. But, there is likely to be restrictions on handling client’s funds and some companies may have stipulations in their contracts for hiring those who have entered or are in the procedures.

 

Why choose an IVA?

There are many reasons to choose an IVA – especially as the consequences appear less severe than bankruptcy. The IVA will be completed after no more than seven years and you can then begin building your credit. Whilst you are in the procedure, your creditors cannot make further demands for repayments or take legal action against you for the debts. Similarly, your assets are afforded more protection, with also far less consequences on your future career – particularly if you are hoping to act as a director for a company.

It’s also important to note the disadvantages, however. If you are looking for a short arrangement with your creditors, you must be aware than an IVA can last up to seven years. Your credit rating will also be affected due to the procedure, meaning you will have to work to build your credit report once complete.

 

Why choose bankruptcy?

Filing for bankruptcy does come with advantages, especially for those that are looking to repay their debts quickly. It is completed in around 12 months. However, if there is any evidence of fraud – such as hiding your assets or not detailing all finances – the trustee could apply for a bankruptcy restriction order, meaning you could be deemed bankrupt indefinitely.

 

Similarly, if you don’t have many belongings/assets or equity tied up in your house, bankruptcy could prove a suitable option. Creditors cannot also demand anymore payments while in the procedure.

 

Like an IVA, bankruptcy does have its disadvantages. The procedure will, almost certainly, affect your ability to work in the finance sector and will stop you from acting as director of a company.

 

Ultimately, there are many differences between the two and any advice you can obtain can only help to ensure you choose the correct option.

ACE Packages New Multinational Insurance Solution for UK and Ireland Customers
InsuranceRisk Management

ACE Packages New Multinational Insurance Solution for UK and Ireland Customers

This cover will be spanning, traditionally separate lines of business, for UK and Ireland based companies with one or more overseas subsidiaries. The cover has been designed by a specially-created project team, selected from across the region and from multiple disciplines, responding to the latest broker and client research.

During 2014, the ACE project team spoke with around 30 UK broker organisations to identify how multinational insurance solutions could be better structured to support the changing needs of their clients as they expand internationally. The common themes that emerged from this research were the need for flexibility, coherence and easily-tailored solutions, combined with the importance of seamless coverage across a client’s international operations and traditional insurance lines. Emphasis was given to the importance of clear and relevant solutions for those organisations that are just beginning to trade internationally or operate in a limited number of overseas territories.

ACE Multinational Partner has been designed to meet these needs as well as the requirements of the Insurance Act 2015, due to take effect next year. At the heart of the new proposition is a recognition of the importance of a globally compliant insurance programme in an increasingly complex regulatory and compliance environment.

Detailed benefits include:

– ACE’s broadest-ever cover as standard and available across a range of lines of business, including property, business interruption (including money, goods in transit, contract works and machinery breakdown), general liability (including environmental liability), employers’ liability, computer, global terrorism.

– Flexible cover to suit all sizes of clients.

– Simple, customer-friendly and jargon-free wording.

– Removal of insurer avoidance remedy for innocent non-disclosure.

– No basis of contract clause (See related ACE press release for full details1).

– Standard policy is warranty free.

– Access to local underwriters across the UK and Ireland, empowered to make underwriting decisions.

– Access to ACE’s global network and local regulatory and compliance know-how – including the ACE Worldview online portal which offers 24/7 real-time programme information.

– Dedicated relationship managers, underwriting, claims and engineering personnel around the world.

– Multinational training and support for brokers throughout the region, where they want it.

Sally Blyfield, ACE Multinational Partner project leader for the UK and Ireland at ACE said:

“Recent ACE research2 shows that the vast majority of European companies believe their risk profile has become more multinational over the past three years. With a mounting array of international regulations bringing ever more complex compliance requirements, they are increasingly at risk of fines, reputational damage and the potential for invalidated claims if their insurance programmes fail to perform as expected. ACE Multinational Partner provides trusted ‘belt and braces’ protection backed-up by comprehensive global service, and we have packaged it in a way that we are confident will work effectively for companies of all sizes and industries.”

Phil Sharpe, Chief Operating Officer for the UK and Ireland at ACE said:

“When we spoke to brokers about their clients’ multinational insurance needs last year, compliance with local insurance standards, advice and support managing international risks and access to on-the-ground account and claims assistance were among the priorities they highlighted. Through our own operations in 54 countries, a global network spanning 200 territories and a team of 2,000 claims handlers around the world, ACE has the right people in the right places to deliver the high level of responsiveness our clients demand and deserve, while minimising cultural and language barriers and time zone issues.”

Darlingtons Solicitors: Raising the Bar
Due DiligenceRisk Management

Darlingtons Solicitors: Raising the Bar

Established in 1999, Darlingtons is a fast growing boutique law firm in London, a modern practice with 50 staff. Covering a wide range of specialisms, the firm serves clients ranging from investors and entrepreneurs to long established, international businesses. Debbie talks us through the firm’s core practice areas and how it aims to provide excellence in these areas.

“At Darlingtons our corporate and commercial team deals with a full range of corporate transactions and advisory services. We are regularly involved in sale and purchases of businesses or assets and shares, MBO, MBI, corporate restructuring, contracts and commercial, advising shareholders and directors on corporate issues. The team also specialises in advising directors and shareholders in relation to disputes that have arisen between themselves and fellow shareholders and directors. Our reputation is built on commercial, practical and insightful advice.

“Expertise and experience are key to our success, but not far behind is the working relationship between lawyer and client. We are dynamic and proactive, taking the time to understand how clients operate and what their objectives are, resulting in structured and tailored advice at the right cost and according to the client timescale.”

Legal practice is changing rapidly, clients are ever more discerning, with perceptions of service quality as well as advice quality just one example of the changes. Debbie outlines how the firm’s ongoing focus remains firmly on providing valuable services in the future.

“Clients have historically seen accountants and not lawyers as their primary trusted advisors. Whilst there are good reasons for this, lawyers are also valuable business advisors, not just to instruct when a transaction is needed or for a contract or a dispute. As lawyers, our challenge is to build proactive, valued business advisor relationships with clients and to remain adaptable and flexible to changing market and clients needs.”

Company: Darlingtons Solicitors LLP
Name: Debbie Serota
Email: [email protected]
Web Address: www.darlingtons.com
Address: Darlingtons House, Spring Villa Park, Edgware, Middlesex, HA8 7EB
Telephone: 0208 951 6666

Effective Threat Detection Strategies for the Financial Industry
Due DiligenceRisk Management

Effective Threat Detection Strategies for the Financial Industry

The research, which forms part of NJR’s cyber security report: how real is the threat and how can you reduce your risk, shows that 23 per cent of employees use the same password for different work applications and 17 per cent write down their passwords, 16 per cent work while connected to public wifi networks and 15 per cent access social media sites on their work PCs. Such bad habits and a lack of awareness about security mean that employees are inadvertently leaving companies’ cyber doors wide open to attack.

This research is supported by a report which incorporates the advice from fifteen experts in the field. Here, Tony Berning, OPSWAT, discusses effective threat detection strategies for the financial industry.

“Over the past few years, the financial industry has been moving towards more digitisation and greater accessibility, mostly due to the industry’s competitive nature. In retail banking, customers expect access to their accounts at all times, from any device that has access to the Internet. Banks are also offering more services than ever before, from digital deposits to money transfers, and any bank that does not offer these services will surely lose customers to competitors that do. Unfortunately, these new services provide an easy way for cyber criminals to attack financial institutions. Some of the threats affecting the financial industry have taken advantage of this digitisation trend by using multiple channels to extract funds that they have compromised.

Similar forces are driving commercial banking towards increased automation and connectivity. With the majority of trades of equity, currency and commodities now done via electronic exchange, transaction speed can make or break a trade. Automated algorithms now execute trades so quickly that the physical distance trade orders travel (at the speed of light), to reach trading platforms significantly impacts profitability. This focus on speed has pushed more operations to become automated with less focus on human interaction.

This combination of greater automation with more information being stored on interconnected networks means that financial institutions have more to lose if hit by a cyber attack. Because of the potential for large gains, malware developers have rapidly adapted their methods, creating new types of threats such as banking malware. There are many different attack vectors that need to be considered, as well as various strategies that attackers may use that need to be addressed.

For instance, some attackers may attempt to get information out of financial institutions, such as customer information, account numbers, etc that they can then use for financial gain. An example of this is the recent Shifu attacks on Japanese banks. Other attackers may be looking to compromise systems within an organisation and modify their behaviour to either move cash out or to create conditions that they can profit from. Other attackers may not have a financial motive at all, instead aiming to sabotage critical networks for geopolitical reasons.

When designing a data security policy, threats need to be addressed as part of a comprehensive program. The first step is to ensure that proper authentication is in place before conducting any transactions, such as multi-factor authentication to ensure that customers are who they say they are. After confirming their identity, it is still important to check all data in the transaction to ensure that the user isn’t unknowingly bringing in any malware. This can be done by defining a secure data workflow to detect and eliminate any threats.

Handling sensitive data is best addressed by keeping it within segregated networks that have limited access to outside networks, reducing the likelihood that the data can be extracted by any malware that has managed to compromise the secure network. A combination of secure data workflow policies and unidirectional transfer devices (data diodes) can be used to make sure that high-security networks stay appropriately isolated.

A regular security scan should be part of any financial institution’s security strategy. Advanced Persistent Threats (APTs) can stay in a network for long periods of time, avoiding detection and waiting to carry out an attack. ZeuS, one of the most persistent threats in the financial industry, has been around for almost nine years and is constantly adapting to compromise more systems. The Shifu virus has continued spreading as well, moving from Japan to the UK. Anti-malware engines are always updating their detection techniques and databases, so it is important to perform regular system scans and continue to check files for threats, even in secure networks that have been fully scanned before.

Financial institutions are at risk from cyber threats because of the large amounts of money they handle as well as the technological innovations they are making that leave them vulnerable to new attack vectors. It is crucial that these organisations consider the security implications of any new technology, in order to keep up with the evolving threat landscape.”

To read more useful and practical insights into topics including: How to assess the scale of your risk level; Managing the immediate aftermath of a security breach; How different sectors are affected, download the full report – http://www.norriejohnstonrecruitment.com/downloads/cyber-security/

The Business Elite UK CEO of the Year 2016
InsuranceRisk Management

The Business Elite UK CEO of the Year 2016

Celebrating its tenth anniversary since writing its first policy in January 2006, Dewsall has built a business which now writes premiums of over £100m annually, insuring businesses across nine European countries, providing a range of products to SMEs across many sectors.

When asked what he thought he would achieve back in 2006, Dewsall explains: “Europe was going through many changes and I had worked successfully across a number of insurance markets. It was clear to me that with the right brand and capital backing, we could build a service offering that would be defined by quality and trust. We set about building Gable from a standing start, creating a product portfolio that was designed to meet what the customer required. It was about offering bespoke products through a selected distribution network of brokers around Europe who we could work with and build a trusted brand in the insurance sector.”

Clearly, customers liked what they saw, and Gable now provides a range of commercial insurance products through specialist brokers in the UK, France, Italy, Ireland, Denmark, Norway, Germany, Sweden and Spain.

Gable commenced underwriting in the UK market with its construction liability insurance products. Over subsequent years since then it has consistently expanded its product range and the number of European markets in which it operates, achieving uninterrupted growth in both premiums written and insurance profits.

“Since inception we have managed our growth carefully, balancing the requirements of our customers with the management of risk. Ultimately, we are there to support our customers with bespoke products that can allow them to do what they are good at. Over the last ten years we have seen many different situations where businesses that we insure have required swift action by us to help them get back on their feet after an event which threatens their business. At the same time, we have managed to qualify our overall risk by the purchase of reinsurance from world-wide A-rated reinsurers” he continues.

Dewsall and his team have certainly delivered on the promise to customers, with high upper quartile retention rates supporting year-on-year growth in the business, allied with a series of new products. Gable has also carefully built a network of trading relationships with a range of specialist brokers in each of the countries in which it has expanded into, providing bespoke products such as Deposit Guarantees, Commercial Bonds, Latent Defect and its core range of Commercial Combined products.

Gable produced another year of growth in 2015 with the underlying business producing a strong core underwriting performance, achieved against a backdrop of challenging markets. Commenting on Gable’s 2015 performance, Dewsall comments: “As always, we have remained focussed on delivering high service levels to our customers whilst managing underwriting profits, delivering a strong and growing cash position which has continued to increase by over 40% on 2014.”

Where does Gable go from here?

Dewsall reveals that his team will continue to focus on building Gable’s brand reputation in each of the markets in which it now operates and continue to listen carefully to what its customers are asking for.

“Clearly we have the key advantage derived from our efficient underwriting platform, affording us the ability to write profitable business across multiple sectors and differentiate through service, product specification, claims handling and settlement to our customers. This has allowed us to grow the business while still maintaining our pricing discipline. There are still a number of markets where we are being asked to provide new bespoke products, there is still much to play for, despite the changes to the regulatory regime across the EU which is a challenge to everyone in the insurance business.

We know that we can build significantly on what we have already achieved, so in essence, it will be more of the same for us” he explains.Gable’s distribution is focused on exclusive distribution relationships in different territories and markets, utilising its networks of brokers, building some commercial partnerships with some major broking networks along the way. Gable’s European business outside of the UK accounts for over 50% of gross written premiums, with an increasingly diversified book of business.

“Our continued strong growth is driven by our bespoke products provided through our expanding European wide distribution channels. Although the economic environment in general remains challenging, I believe we have excellent momentum and can foresee continued expansion supported by our European broker network. The fundamentals of our business are sound and underpin our optimism and growth ambitions for the future” he enthuses.

About William Dewsall

William Dewsall has over 30 years’ experience in the European insurance market having worked at Jardine Glanville (UK) and Alexander Stenhouse. In 2000 he established his own underwriting agency, writing insurance risks in the UK and worldwide on behalf of a number of insurers including Italian giant, Assicuriazoini Generali. He was instrumental in developing policy wordings for the Contractors and Liability insurance sector, credited in the foremost sector reference ‘Construction Insurance and UK Construction Contracts’. He is registered with the FCA as an approved person for insurance activities.

Company: Gable Holdings Inc
Name: William Dewsall, CEO
Email: [email protected]
Website: www.gableholdings.com
Telephone: +44 (0) 20 7337 7460

Leading Dutch Insurance Group Aegon Invests in Microfinance
InsuranceRisk Management

Leading Dutch Insurance Group Aegon Invests in Microfinance

Aegon began investigating the potential of microfinance investments in 2014. The Aegon The Netherlands Risk & Capital Committee which approved the mandate concluded that microfinance was a good fit within Aegon’s portfolio, stating that: “In the current low interest rate environment the returns from microfinance are attractive, the risks and durations are acceptable, and there is essentially no correlation with other asset classes Aegon invests in.”

The biggest single challenge, according to Marcel van Zuilen, a portfolio manager at Aegon Asset Management, was reporting requirements. “Solvency II introduced far-reaching ‘look-through’ reporting requirements. Microfinance funds need to report on their investments in a great amount of detail so that the investor can demonstrate to the regulator that it is compliant. If you consider that data needs to come from microfinance institutions in places like Cambodia, Nigeria and some 100 other countries you realize that’s no simple task.”

To truly understand the microfinance investment chain and to select the microfinance funds that can handle Aegon’s demands necessitated the development of a new area of expertise, which according to Harald Walkate, Global Head of Responsible Investment at Aegon Asset Management, can now also be leveraged to service Aegon and external investment clients in a sustainable manner.

A solid track record and diversified investment products

Swiss-based responsAbility looks back on a 13-year track record of successful microfinance investments. Managing a whole series of investment solutions, responsAbility is the world’s largest private investor in the area of microfinance. At the end of 2015, responsAbility-managed investment vehicles had USD 1.9 bn of capital invested in 314 financial institutions across 76 developing and emerging countries. responsAbility has been active in the Dutch market since January 2016. The largest microfinance fund in the world, which is managed by responsAbility, is now available for retail distribution in the Netherlands along with the vehicles dedicated to institutional investors.

Building on its solid experience in the area of microfinance, responsAbility has since expanded its operations to cover other development-related sectors such as energy and agriculture. In the financial year 2015, responsAbility grew its assets under management by 22% to CHF 3 billion. As was the case each year since 2011, this reflects inflows of new assets totalling around USD 500 million – of which 50% stemmed from retail investors, 31% from institutional investors and 19% from public sector investors. In 2015, a total of 12 responsAbility investment vehicles invested almost USD 1 billion in 522 financial institutions, agricultural companies and energy firms – carrying out more than 700 transactions in this context.

Alexandre Coquet, Head of Sales France & Benelux, stated: “We are pleased to welcome Aegon to our funds’ investor base, especially since their decision to invest followed a very thorough evaluation process. To successfully develop and manage development investments, what is needed first and foremost is a sound knowledge of local markets. Around 150 experts working at our 9 offices across 4 continents identify new investment opportunities on an ongoing basis, thus laying the foundations for the continued successful development of our business.”

For further information, please visit: http://www.aegon.com/Home/ and http://www.responsability.com/investing/

CEO of the Month
Due DiligenceRisk Management

CEO of the Month

Can you give a brief overview of what your company does and your role within it?

To prioritize safety and minimize the impact of disruptive events, organizations need to be able to quickly assemble information and determine exactly who needs to receive each communication. Then, just as importantly, an organization needs to reliably deliver this information to virtually anyone, on any device or contact path, anywhere in the world. An example might be managing a substantial IT outage– network engineers tasked with responding to the problem need one level of information, customer service representatives need another, and both need messages delivered to them in seconds. Global companies need to send notifications in multiple languages, and given the diverse ways people communicate, in multiple modes—via voice, email, text, digital signage, two-way radio, and so on. Our applications automate this process and deliver notifications at very large scale for over 2,700 enterprise customers, including 24 of 25 of North America’s busiest airports, 6 of 10 of the world’s largest auto makers, and in the U.S., 7 of the 10 largest investment banks and 4 of the 10 largest healthcare providers.

My tenure at Everbridge began with my joining the Board of Directors in 2010. In late 2011 we merged a software company I had founded in 2009, CloudFloor, Inc., into Everbridge and I became CEO and Chairman of the Board. Everbridge was founded after the tragic events of September 11, 2001, when the need for instant, reliable communications to prioritize safety became clear. To build our business over the last 15 years we have been fortunate enough to attract great people – in fact over 50 of our current team members have worked together in multiple successful previous ventures. We have a saying at Everbridge: “first the team because the team is the business”—it is our way of highlighting the importance of people. My role is to lead the strategic corporate direction that enables our continued growth while being capital efficient. We focus on the top and bottom lines and pay close attention to a number of key performance metrics. Our entire Senior Management Team also spends a significant amount of time with customers. I personally spend a lot of time with new and current customers who are often the source of our best ideas for improving our platform and extending it to new applications and markets.

Can you go into more detail about the services you offer?

Let me give you a couple of examples of how our products are used. The City of Boston, local hospitals, companies, and a number of nearby towns are all customers of Everbridge. When the Boston Marathon bombing happened, the Boston police used our software to contact and coordinate the actions of first responders. Hospitals used it to communicate to and bring in trauma surgeons to treat the wounded. The Watertown Police Department used it to keep citizens informed as police conducted a door-to-door search for the bombers. Local towns used it to advise citizens to stay indoors, and corporate customers used the software to check on the safety of their employees running in the Marathon.

These were all uses of our core application, Mass Notification. This application organizes the process for constructing and securely and reliably sending out notifications in seconds. It is based on a Software as a Service Architecture, with multiple data centers around the world, so we can scale to sending out millions of messages simultaneously and our infrastructure is never constrained by the severe weather issues that customers may be facing. We deliver messages via over 100 different modalities. In 2015, we sent out over 1 billion messages, we have contact data for over 100 million people, and our platform can deliver messages to over 200 countries and territories and in 14 languages and dialects.

A second application is IT Alerting. When an IT outage or cyberattack occurs at a company, the resulting service downtime can cost thousands or tens of thousands of dollars per minute. Companies use our IT Alerting application to rapidly notify and organize responders across departments in order to shorten the time to restoring service. Incident management procedures can be pre-built into the system based on rules so that the software knows what groups need to be represented, what type of information they should receive, who to contact within the groups, how they are best reached, and, if people with the right skill sets do not respond in a prescribed period of time, who to escalate to. Other stakeholders, such as executive team members and customer service representatives, can be simultaneously notified with messages appropriate to them so they are kept properly informed. Automating the process lowers costs, improves speed, and avoids errors at what are often times of high stress.

We are also leveraging the power of our underlying platform with additional applications. We have introduced a secure messaging application which enables healthcare organizations to replace patient home visits with telemedicine check-ins and to rapidly organize teams to respond to code alerts in hospitals. Safety Connection, our newest solution, enables organizations to determine if traveling or mobile employees are safe in the event of a man-made incident or natural disaster, to get them instructions, and to ensure that buildings have been fully evacuated when required. Safety Connection is the first Internet of Things (IoT)-related application we have introduced. With sensor data and connected devices becoming ubiquitous, we see a growing need for companies to organize employees to respond to whole new classes of alerts and believe IoT applications and use cases represent a significant new market opportunity for us. 

How does it feel to be awarded CEO of the Month?

I am honored to receive this award. I’m especially pleased for our team. We put a strong emphasis on our management team working together— we win or lose as a team. This is a nice win for our team.

What are the main challenges you face in your role, at the helm of the business?

People are by far our most important asset. In the hot tech space, competing against giants like Google and Amazon for talent is difficult. We focus a great deal of effort on attracting, hiring and retaining great people. We have also worked hard to develop our culture. This has been aided by our mission, which is to not only build great technology solutions but to deliver solutions that help people. We hear stories from customers using our solutions to help find a missing child, or to successfully evacuate an area after a dangerous chemical spill, and these results makes all of us at Everbridge proud of what we do!

On the execution side, we have an enormous opportunity to expand our business internationally. Our current sales are driven 85% from North America and 15% internationally. The international space is ultimately much larger than the U.S.—these markets are more mobile oriented, they have a wider diversity of communications requirements, and are just as prone to emergencies and critical events, both man-made and natural. A key question for us is where to build organically overseas and where to buy or partner. The wrong decisions can cost us years of missed opportunity. International growth is an accelerator for Everbridge— we’ve got to get this right.

When hiring staff, what kind of people are you looking for that will help you drive your business?

We are strong operators and I look for senior people who are intelligent, curious, and have a track record of doing what they say they will do and being accountable. We also hire a fairly large number of people as their first or second job after college. Here, I want people with good intellects and a real hunger to learn. Just as important as people’s skills is their fit with our culture. Our teams and leaders are highly collaborative so we involve a lot of people in the interviewing process to make sure we and the candidates are excited about the opportunity to work together.

Can you tell us about your career background prior to becoming a CEO?

I have actually been a CEO for most of my professional career. My second real job as a 21 year old involved my founding of a software company. Since then I have held multiple public and private company Chairman and CEO positions. Some examples include serving as CEO of Gomez, Inc., a private company and leader in the internet performance management space, of S1 Corporation, a public company and the first to provide on-line banking in North America, and of Interleaf, a public company that provided software tools for e-content management. The common thread among the companies I have led was that they were all profitable, high-growth tech companies. Following on from this, how did you attain the position of CEO? I became CEO when Everbridge acquired a company I had founded, CloudFloor, Inc. Everbridge was looking to rebuild the core technology underpinning its platform based on a cloud infrastructure. The Cloud- Floor solution, and the management team behind it, were a great fit.

How do you think your company has performed while you have been CEO?

I set stretch goals and am a tough grader so I tend to not often be fully satisfied with how we perform. That said, we have made dramatic progress over the past 5 years on pretty much all fronts — our people, our products and the underlying platform, customer wins and follow-on purchases, and our vision for the future have led to top-of-class growth overall for Everbridge. From 2012 to 2015 we have achieved average annual revenue growth of 35-40% versus approximately 10% growth in total sales in 2010. And we have been able to achieve this growth without any new capital infusion. I am very excited about where we are and where we are going.

As CEO, what do you see as the main challenges for your company in the future?

The key challenge is to continue add and retain great people while scaling the business. As one measure, we have gone from sending under 50 million notifications in 2010 to over 1 billion in 2015, and from fewer than 20 million people connected to our solutions to over 100 million people connected today. We’ve put in place a scalable architecture on the platform side but we are going to need to hire great sales and marketing, operations, and technical staff, to continue to mature some of our operational processes, and to increase the sophistication of some of our management processes. It’s very important for us to stay ahead of the curve in these areas.

Do you have any plans for 2016 and beyond that you would like to share with our readers? We have been adding new solutions which open up new addressable markets. We have gone from two products on our critical communications platform in 2010 to seven products today. The new products leverage the power and scalability of our underlying platform. In 2016, we have announced Safety Connection, which adds a new location dimension to notifying traveling and mobile employees to keep them safe. We’ll continue to ensure that our customers have effective ways to communicate with people no matter where they are through our resilient platform and innovative applications.

Company: Everbridge
Name: Jaime Ellertson, Chairman & CEO
Web Address: www.everbridge.com
Address: North America Headquarters – East Coast, 25 Corporate Drive,
Burlington, MA 01803 USA
Telephone: 1 818 230 9700

Survey Reveals Misconceptions About Investment Performance and Risk
Due DiligenceRisk Management

Survey Reveals Misconceptions About Investment Performance and Risk

A focus on short-term financial performance and misunderstandings about the nature of investment risk may have an impact on American investors’ financial well-being. According to a new TIAA-CREF survey, 36% of respondents look to one-year performance as the most important indicator of an investment’s return, with an additional 16% looking to quarterly performance as most important. Nearly half (47%) have purchased a fund based on its performance during the previous year rather than looking at its performance over a longer-term investment horizon such as five or 10 years.

“It’s important to look at the big picture when evaluating investment performance. One year or one quarter is a short period of time when you consider that many individuals are investing for 30 years or more,” said Roger W. Ferguson, president and chief executive officer of TIAA-CREF. “Fortunately, investors can avail themselves of a range of resources, including professional financial advice, which can help them make well-informed investment decisions and build portfolios designed to meet their specific financial goals—whatever they may be.”

While investors continue to grapple with the challenges of market volatility, it’s even more critical for them to understand key investment concepts around diversification, asset allocation, risk and returns. However, among those surveyed, 71% of American investors believe they can eliminate investment risk by having a diversified portfolio; in fact, while a diversified portfolio can help to manage investment risk, there is no way to eliminate it altogether. Similarly, although investors should maintain an appropriate level of risk in their portfolios, many are unclear about how that works: 53%think that higher risk guarantees higher returns.

All investors would benefit from better access to financial education on these topics. But for Gen Y, the challenges posed by unpredictable markets and their impact on investing decisions are even more pronounced. While 29% of all respondents misunderstand the nature of various asset classes, indicating that they believe that all investments offer the same level of risk, 40% of Gen Y report the same, and 64% of Gen Y think that higher risk guarantees higher returns.

Investing for Better Outcomes

Despite some misconceptions about investment performance, American investors have a clear picture of what they want from their portfolio. Two-thirds of investors believe it’s more important that their portfolio allows them to achieve their life goals, such as funding a comfortable retirement or paying for a college education, versus one-third who place more importance on a portfolio that consistently meets specific investment criteria, such as a certain percentage return.

In order to achieve their objectives for their investments, however, investors need to ensure they are not taking actions that can undermine long-term performance. For instance, 36% of respondents say that market volatility is the most likely reason they would rebalance their portfolio – in contrast to most advisors’ recommendation to ride out market fluctuations as part of a long-term investing strategy. Fewer say they are most likely to rebalance when most advisors would recommend – at a regular time of year like a birthday (21%) or after a life change such as marriage, the birth of a child or grandchild, or the death of a spouse (20%).

“Having a well-defined vision of one’s financial goals is a good first step for investors,” said Ferguson. “Once you have set your priorities, a financial advisor can help you find the approach that is right for you. By looking at your risk tolerance and your short-term and long-term goals, a financial advisor can help you pick the investment options that may work best with your financial plan.”

No matter what’s going on in the market, TIAA-CREF has focused on delivering long-term results for our clients at competitive costs for nearly 100 years. Morningstar has awarded 65 percent of TIAA-CREF mutual funds and variable annuities overall ratings of 4 and 5 stars, and the organization has won the Lipper Award for Overall Best Large Fund Company, based on delivering risk-adjusted returns, for three years in a row.

Impact Investment Market Opportunities for Wealth Management Sector
Natural CatastropheRisk Management

Impact Investment Market Opportunities for Wealth Management Sector

The report identifies key product and service offerings by major private banks in these regions. It also highlights key strategies adopted by wealth managers, fund managers and governments worldwide to target impact investors. The analysis is based on extensive primary research with key experts in the field to determine current trends and future expectations, enabling financial advisors to remain competitive in the wealth management industry. Impact investments have become a new investment option among HNWIs and UHNWIs worldwide. They have significantly increased in market size, despite their relatively recent development in 2007. JP Morgan and Global Impact Investing Network (GIIN) estimated the market size of impact investments at around US$46 billion in 2013. In the UK market, impact investments valued GBP200 million in 2014, and are set to grow to GBP1 billion by 2016.

While 67% of impact investment funds are headquartered in Europe and North America, 70% of impact investment capital is being channeled towards emerging markets. Microfinance and financial services combined accounted for 42% of global impact investment funds in 2014. This was followed by energy at 11%, housing at 8% food and agriculture at 8%, and healthcare at 6%. Impact investments are becoming more important among European governments and UHNWIs. Demand for socio-economic impact investments is growing in emerging economies. Limited availability of developed social enterprises is a barrier for impact investment growth.

Different investment types – ‘finance first’ or ‘impact first’ – make the asset rather complex and difficult to value. This has led to the development of a separate wealth management division in private banks, often known as sustainable investing, responsible investing, or social finance divisions. While the majority of impact investment supply-side participants – HNWIs, corporate investors, asset managers, wealth managers and private banks – are based in developed countries such as the UK and the US, the majority of demand-side participants are based in emerging countries such as South Africa, Nigeria, Kenya, China, Brazil and India. This structure generates gaps in the wealth management market, requiring further research. This report aims to provide an in-depth analysis of key market insights and the future outlook of impact investment over the forecast period.

This report covers areas like attitudes of wealth managers and private banks to targeting impact investors, a global market snapshot of impact investments, strategies for targeting impact investments and key market regulations as well as high-profile HNWI and UHNWI impact investors. The research helps understand significance of impact investments in the wealth management sector, and recognize how this asset class can have potential benefits to private banks. Be informed about latest market trends on impact investment products and services offerings in the six regions studied, and draw competitor analysis, Be aware of attitudes of wealth managers and private banks towards the future outlook of impact investments and Make informed decisions about impact investment growth and build better business strategies to target impact investors with the help of this report. Comprehensive table of contents and more on Insight Report: Impact Investments 2015 – Global Opportunities here.

Impact Investing Cleared for Take-off
Natural CatastropheRisk Management

Impact Investing Cleared for Take-off

 Two major hurdles to the broader adoption of impact investing are being cleared by structural changes in the capital markets and new guidance issued by the Department of Labor that makes it easier for retirement plans to offer environmental, social and governance (ESG) solutions to investors planning for retirement.

In a new whitepaper, “Impact Investing: The Performance Realities,” Merrill Lynch analyzes these structural changes and the growing body of evidence showing that investors can do well financially by investing in organizations that are doing what’s right for the environment and society. The paper tracks key developments in the impact investing arena, pointing to rapid growth and innovation that are due largely to growing client demand over the past decade, as well as the improving quantity and quality of ESG data.

A recent Merrill Lynch client survey of 1,500 U.S. investors found that awareness and education about impact investing are also among the keys to its continuing growth.

“More of our clients want their portfolios to reflect their beliefs on issues such as social mobility, climate change, women’s rights and other key issues,” said Anna Snider, author of the paper and head of Global Equity and Impact Investing Due Diligence, Merrill Lynch Wealth Management. “Many investors have held back because of a commonly held belief that investing for a better world requires a trade-off in performance. We believe that a combination of more reliable data, enhanced portfolio construction techniques and innovation in structures and investment approaches will start to turn that outdated assumption on its head.”

“Impact Investing: The Performance Realities” assesses the real state of impact
In developing the whitepaper, Merrill Lynch analyzed proprietary, academic and industry data to gain insight into the impact investing landscape. Key findings include:
• Many impact investments can be used in a market-based portfolio without a significant increase in risk, and can serve to lower overall portfolio volatility and aid in the risk adjusted profile of portfolios.
• The risks of many impact investments are not necessarily greater than their traditional counterparts, but they often are different – and understanding those risks is critical for investment decision-making.
• Most impact-oriented, diversified public equity and fixed income strategies can provide market-like returns – and some more-targeted public and private strategies may even outperform.
• Merrill Lynch found wide recognition that companies lacking good governance, which fail to consider environmental risks or disregard community impacts, are ignoring risks to their bottom line.
• New public-private financing structures are gaining interest from not-for-profit organizations, policy makers and government issuers, and there’s been a marked increase in social impact partnerships, green bonds and direct capital investments in thematic ventures such as health and energy.
• Institutional investors, who were among the first to incorporate impact investing criteria into their mandates, still account for the largest share of assets. Recent substantial growth in indexes, network services and other collaborative or aggregative sources of social responsibility data are now making it possible for all investors to use ESG data, along with traditional financial analysis, to make informed decisions about investing in sustainable companies.

Supporting client survey points to need for education and awareness
Merrill Lynch’s client survey of 1,500 U.S. investors found that awareness and education about impact investing are also among the keys to its continuing growth. The survey found:
• Younger investors – millennials under the age of 35 – are leading the way in the demand for impact investing investments. More than any other age group, they are interested in investing in companies that share similar values and are more likely to believe they can achieve competitive returns (59%).
• Millennials also place greater importance on the issues they consider important than on financial returns (47%).
• Nearly one-half (48%) of the 1,500 investors surveyed would be more likely to incorporate impact investing strategies into their portfolios if assured it didn’t mean sacrificing returns.
• Three in five (62%) investors aren’t yet convinced that impact investing investments can deliver competitive returns.
• Approximately half of investors would be spurred to add ESG investments to their portfolio if they better understood them.
• Fewer than 25% of investors are aware of the impact investment options available to them.

Global Wealth and Investment Management and impact investing
Bank of America’s wealth and investment businesses launched their impact investing platform in August 2013 with a range of investment offerings across asset classes and themes, extensive insight and thought leadership, and a major commitment from Bank of America totaling more than $70bn in lending, financing and other investments, as well as $100mn in grants, over a 10-year period.

As of September 2015, Bank of America’s investment businesses had more than $9.7bn in assets with a clearly defined impact investing approach. Of these assets, approximately $8.1bn are assets under management and $1.6bn are advised assets. These businesses include Merrill Lynch Wealth Management, U.S. Trust, Merrill Edge and the institutional investment business.

While there are many impact strategies that have long track records, as the investment approach is expanding, there are many strategies that may have limited performance history. Data availability and standardized frameworks are still evolving for the private and public impact investments industry and will be subject to multiple improvements in coming years. As such, reporting around the particular impacts of impact investing strategies are subject to the manager’s definition of those results, and investors should be aware of these issues prior to investment. Finally, as impact investing approaches are being more widely integrated into investment processes, it is important for investors to acknowledge that certain portfolio managers and other investors offering solutions in this space are still in their developmental stage, and investors need to be aware of these risks. 

Continued Expansion of the Calvert Responsible Index Series
Natural CatastropheRisk Management

Continued Expansion of the Calvert Responsible Index Series

Calvert Investments, Inc., a global leader in responsible investing, announced today the introduction of two new indexes in the Calvert Responsible Index Series: the Calvert Developed Markets Ex-U.S. Responsible Index (CALDMI) and the Calvert U.S. Mid Cap Core Responsible Index (CALMID).

“Calvert is committed to meeting the evolving needs of our clients with both active and indexed responsible investing products,” said John Streur, CEO, Calvert Investments. “Calvert has 30 years of leadership in helping responsible investors define and assess the environmental, social and governance impacts of the corporations they own. Combine this with our shareholder engagement and we can help investors drive real positive change in the world.”

The indexes are driven by the Calvert Research System, a proprietary research platform that synthesizes multiple sources of non-financial data, including environmental, social, and governance (ESG) data. Calvert analysts identify and weight the ESG factors that are most material within each of 156 sub-industries, then rate and rank every company to build the list of index constituents. The firm continues to build upon its global responsible investment research expertise with the newest additions to its responsible index series and related low-cost index funds that will track them and institutional separate account products.

Due DiligenceRisk Management

Shifting the Risk Landscape

Despite market fluctuations occasionally drawing deep breaths from investors as global economies endeavour to move on from the global financial crisis, investment managers have generally enjoyed returning stability and significantly improved trading conditions in recent years.

However, new and emerging challenges are shifting the risk landscape for investment managers, notably the growing threat of cyber-attacks — with cyber criminals finding ever more inventive ways to compromise systems — and increasing regulatory investigations. This poses a challenge not only for investment managers but also their insurer partners in finding ways to address the complexities as they arise and to mitigate the associated risks.

From a regulatory perspective, there is now far greater scrutiny of Financial Institutions across the US, UK and Europe. In the United Kingdom there has been an increase in the number of private warnings issued in recent years. These are a low-touch way of addressing less serious issues, as opposed to a full investigation for more serious and obvious regulatory breaches. While these, in effect, serve as a warning, usually with no lasting implications for the firm, any individuals implicated will likely see this recorded on their employment file, which could affect their prospects.

Private warnings can affect people within an organisation who may not be at the most senior levels, such as anti-money laundering officers or compliance managers. The only way they can challenge a private warning after it has been issued is via a judicial review, which is time consuming and costly. While insurance cannot fund the costs of a Judicial Review, it can provide funding to affected individuals to contest a potential action at the point where the regulator declares its intention to issue a private warning by way of a ‘minded to’ letter. This assistance can be extremely valuable for investment manager clients and is one example of how innovative insurance brokers and insurers are developing insurance products capable of meeting their needs in complex situations such as this.

Part of the issue for investment managers with much of modern-day regulation globally is that it is not prescriptive and therefore can often be difficult to interpret – or be confident you have interpreted it correctly. This has prompted many to voice the concern that it is not a question of if they have a regulatory issue but when.

There has also been an increase in more visible regulatory enforcement action, with numerous examples of investigations or fines being made against FCA-regulated entities. To date, most of the regulatory scrutiny has fallen on the banking sector and not in the investment management space. However, there are organisations within the insurance industry that are making provisions to assist investment managers as it is far better to help clients be prepared, rather than respond after regulatory action has been initiated. Regulatory investigations can take up considerable time and resources and insurance can be an effective tool to offset those costs while supporting investment managers in assisting the regulator with an investigation. Mitigation cover, which allows costs to be incurred under the policy prior to the insurer being notified, is a further development designed to help reduce or mitigate a third party claim, which is clearly valuable for both the insured and insurer.

The other issue of particular concern for many investment managers is the growing risk of a cyber breach and subsequent loss of data. This threat has also long been testing the minds of legislators as to how best to counter the threats. The EU Data Protection Directive, which will lead to specific legislation in the UK, will set out guidelines and penalties in the event that data is lost. Investors too are concerned by the threat of a cyber-attack and, in the same way that potential investors will ask if an investment manager has professional indemnity (PI) insurance, we expect investors will begin to routinely question if adequate cyber cover is in place in order to have the confidence to invest.

Part of the problem here is that while the insurance market provides a broad variety of cyber cover, through the traditional PI, crime and computer crime policies, the introduction of Cyber as a standalone product (available since the late 1990’s but something that has really come into focus in recent years) – which covers, for example, the specific costs relating to a data breach or non-damage business interruption, has caused confusion to insurance buyers.

It is not uncommon therefore to discover that clients don’t fully understand the level of cyber cover they already have and so it is for their broker to not only explain but identify any gaps. Following a broker’s assessment, some clients may say they do not want a standalone policy but it is still the broker’s job to identify the potential issues to ensure the client can make an informed choice.

Currently insurance market conditions are hugely favourable for investment managers due to the competition arising from ample capacity within the market. Investment management firms are very attractive to insurers — with a relatively benign recent claims history many insurers are keen to underwrite more business in this segment. This is also an attractive area to those insurers that used to underwrite tier-one banks and which are looking to diversify their portfolios. All of which spells good news for investment managers.

Demand for standalone cyber products is likely to increase and, given the availability of insurance capacity and the appetite of insurers to gain market share, so too will the availability of multi-year premiums with a locked in discount, which some clients have obtained this year.

Given these conditions, there is great potential for insurance to build its relationship with, and be of greater assistance to, investment management firms. The mature specialty insurance markets in London have a long history of innovation, which is a fundamental reason why London has remained a leading market for complex commercial risks globally. Brokers and insurers that are willing to identify where the exposures are for individual clients, and take a proactive approach to understanding the shifting complexities, will continue to produce innovative insurance solutions that can assist investment managers with these emerging issues, as they seek to grow their standing in this appealing area of financial services.

U.S. Foreclosure Activity Decreases 6 Percent in August
InsuranceRisk Management

U.S. Foreclosure Activity Decreases 6 Percent in August


RealtyTrac® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released its August 2015 U.S. Foreclosure Market Report™, which shows a total of 109,561 U.S. properties with foreclosure filings — default notices, scheduled auctions and bank repossessions — in August, down 12 percent from the previous month and down 6 percent from a year ago. The 6 percent year-over-year decrease in August followed five consecutive months with year-over-year increases.

The report also shows one in every 1,205 U.S. housing units had a foreclosure filing in August.
“Foreclosure starts in August continued to search for a new floor below even pre-recession levels, indicating the housing recovery of the past three years is built on a solid financing foundation,” said Daren Blomquist, vice president at RealtyTrac. “But the continued rise in bank repossessions indicates more batches of bank-owned homes will be rippling through the housing market over the next three to 12 months as lenders list these properties for sale.

“This influx of bank-owned inventory may be good news for an inventory-challenged housing market, but buyers and investors interested in purchasing these bank-owned homes should understand they tend to be lower-value properties in areas where house values have not recovered as quickly and are more likely to have deferred maintenance issues that will need to be addressed,” Blomquist noted. “The average estimated market value of REO properties nationwide is now 33 percent below the average market value of non-distressed properties, and homes that were repossessed in the second quarter of this year on average had been languishing in the foreclosure process for 629 days.”
Foreclosure starts drop to lowest level since November 2005

A total of 45,072 U.S. properties started the foreclosure process for the first time in August, down 1 percent from previous month and down 19 percent from year ago to lowest level since November 2005. So far in 2015, foreclosure starts have averaged 49,362 per month, below the pre-crisis average of 52,279 per month in 2005 and 2006.
Foreclosure starts decreased from a year ago in 30 states, including California (down 29 percent from year ago), Florida (down 40 percent), New Jersey (down 38 percent), Texas (down 17 percent), and Maryland (down 26 percent).
Counter to the national trend, foreclosure starts increased from a year ago in 19 states, including New York (up 20 percent), Virginia (up 16 percent), Missouri (up 77 percent), and Massachusetts (up 61 percent) and Minnesota (up 20 percent).

Bank repossessions increase from a year ago in 36 states
There were a total of 36,792 U.S. properties repossessed by lenders through foreclosure (REO) in August, down 22 percent from previous month but still up 40 percent from a year ago, the sixth consecutive month with REOs increasing on a year-over-year basis. Bank repossessions in August were still well above their pre-crisis average of 23,119 per month in 2005 and 2006, but well below their peak of 102,134 in September 2010.
Bank repossessions increased from a year ago in 36 states, including Florida (up 23 percent), California (up 31 percent), Texas (up 168 percent), Ohio (up 35 percent), and New Jersey (up 295 percent).
“Foreclosure sales from the Trustee still require cash at the time of sale, so as a result lower-priced properties to mid-priced properties tend to sell for close to full value. Higher-priced foreclosures, while rare, can sometimes present an opportunity. With stricter lender requirements we are most likely a few years away from foreclosures truly having an impact on home values in the area,” said Greg Smith, owner/broker at RE/MAX Alliance, covering the Denver market in Colorado where foreclosure activity was down 45 percent from a year ago.
Counter to the national trend, bank repossessions decreased from a year ago in 13 states, including Georgia (down 55 percent), Illinois (down 22 percent), Wisconsin (down 7 percent), Connecticut (down 36 percent), and Kentucky (down 45 percent).

Scheduled foreclosure auctions drop to nine-year low
A total of 41,308 U.S. properties were scheduled for a future foreclosure auction in August, down 14 percent from the previous month and down 19 percent from a year ago to the lowest level since May 2006 — a more than nine-year low. Scheduled foreclosure auctions in August were about one-fourth of their peak of 158,105 in March 2010 but still above their pre-crisis average of 33,634 a month in 2005 and 2006.
Despite the national decrease, scheduled foreclosure auctions increased from a year ago in 23 states, including New Jersey (up 38 percent), Pennsylvania (up 18 percent), New York (up 64 percent), South Carolina (up 38 percent), and Massachusetts (up 21 percent).

Nevada, Maryland, New Jersey post highest state foreclosure rates
Nevada foreclosure activity increased 4 percent from a year ago in August — driven largely by a 233 percent jump in bank repossessions — and the state posted the nation’s highest foreclosure rate for the first time since September 2014. One in every 507 Nevada housing units had a foreclosure filing in August, more than twice the national average.
Maryland foreclosure activity was unchanged from a year ago despite a 429 spike in bank repossessions, and the state posted the nation’s second highest foreclosure rate for the third month in a row. One in every 534 Maryland housing units had a foreclosure filing in August.

New Jersey foreclosure activity increased 3 percent from a year ago — driven largely by a 295 percent year-over-year increase in bank repossessions and 38 percent year-over-year increase in scheduled foreclosure auctions — and the state posted the nation’s third highest state foreclosure rate for the third month in a row. One in every 539 New Jersey housing units had a foreclosure filing in August.

Florida’s foreclosure rate dropped out of the top three highest among the states for the first time since June 2012 thanks in part to a 33 percent year-over-year decrease in foreclosure activity in August to the lowest level since April 2007.
South Carolina foreclosure activity increased 11 percent from a year ago in August, boosting the state’s foreclosure rate to the fifth highest nationwide. One in every 863 South Carolina housing units had a foreclosure filing in August.

Other states with foreclosure rates ranking among the top 10 nationwide in August were Illinois at No. 6 (one in every 921 housing units with a foreclosure filing), North Carolina at No. 7 (one in every 970 housing units), New Mexico at No. 8 (one in every 1,005 housing units), Indiana at No. 8 (one in every 1,037 housing units), and Ohio at No. 10 (one in every 1,037 housing units).

64% of Leading APAC Bankers Feel Unprepared for a Cyberattack
Due DiligenceRisk Management

64% of Leading APAC Bankers Feel Unprepared for a Cyberattack

As incidents of cybercrime continue to make headlines across the globe, financial institutions are giving more attention to cybersecurity, but a new survey by FICO suggests that APAC banks may be lagging. In a survey conducted at FICO’s Asia Pacific CRO Forum, 64% of senior bank executives from the region said they feel unprepared for cyber-attacks today, despite cybersecurity being a clear priority for them.

The survey showed uncertainty from bankers about their institution’s preparedness, with 55% of senior APAC bank executives were unsure if their organization currently ran regular audits of data and networks to check if the company had suffered data loss.

An additional 58% of respondents said they had not heard of a predictive analytics alternative to traditional rules-based SIEMs (security information and event management).

However, awareness appears to be rising with 73% of respondents said their CEO/ company board had prioritized a review of cybersecurity in the last 3-6 months.

The survey was conducted at the 2015 FICO Asia Pacific CRO Forum, held earlier this year in Bangkok, Thailand. A total of 34 senior risk officers and banking executives representing 23 financial institutions across the region participated.

Dan McConaghy, President of FICO Asia Pacific, said, “For many banks, cybersecurity is a shared domain of the IT and Fraud departments. In order to effectively combat ever-evolving cybercriminals, it is necessary for financial institutions in Asia Pacific to connect fraud and cyber information, systems and investigations. This holistic approach is needed to
limit damages to customers, systems and the bank’s reputation.”

FICO has leveraged extensive IP assets from its banking technology, including streaming analytics and anomaly detection techniques used within its market-leading FICO® Falcon® Fraud Manager software, for the creation of an analytics-driven cyber security solution that is highly differentiated from current industry offerings and complementary to existing infrastructures and investments.

Land Insurance Industry Boosted Thanks to Merger
InsuranceRisk Management

Land Insurance Industry Boosted Thanks to Merger

The merger is just part of the South Carolina based brokerage firm’s expansion across the US. The company will merge with Mississippi Land & Lakes, a Meridian based real estate company that has decades of experience in timberland, farmland, forestry consulting and recreational land sales and management. The firm is considered one of the premier recreational design and development companies in the Southeastern United States, making it an influential partner for National Land Realty.

Cathy Haguewood, a broker for MLL, stated that the merger was a real lifeline for the business. ‘We have been looking for a new real estate partner for 18 months, and are thrilled to be joining the National Land Realty team. I haven’t seen another company with such professionalism and attention to detail, in addition to their world-class marketing program.’

The two businesses offer complimentary services, with Mississippi Land & Lakes’ unique recreational consulting services set to integrate well with National Land Realty’s industry-leading marketing and brokerage services. Jason Walter, CEO of National Land Realty said of the merger: ‘This merger continues National Land Realty’s expansion across the country, bringing more opportunities for our land sales and investment customers. Not only does the Meridian team have a wealth of real estate experience, they also offer comprehensive recreational design and development services, which includes lake and lodge development, roads and wildlife food plot layout and construction.’

Life Insurers Challenged by Competitive Landscape
InsuranceRisk Management

Life Insurers Challenged by Competitive Landscape

Chief financial officers (CFOs) at North American life insurance companies say they continue to face sizable competitive challenges to their profitability, yet only a small number (20%) believe they are well prepared to respond to this competitive environment.

Life insurers cited competition (61%) and cost management (61%) as the top challenges to their profits this year, and seem only somewhat better prepared (46%) to address the cost pressures, according to a Life Insurance CFO Survey conducted by global professional services company Towers Watson’s (NASDAQ: TW).

Insurers also acknowledge that the competitive environment (78%) is the biggest challenge to their growth objectives, and the majority rank the economic environment (56%) and regulatory landscape (56%) as the main impediments to meeting their risk objectives. In response to their various challenges, insurers are trying several measures, such as expanding into new products or markets (44%), increasing distribution (39%), and implementing or improving risk management processes, including financial discipline, and risk and capital processes (39%).

“Life insurers face difficult market conditions characterized by moderate return on equity, flat to sluggish sales growth and protracted low interest rates. These threats make countering their competitive challenges even more daunting,” said Elinor Friedman, Towers Watson’s Life Insurance practice leader for the Americas. “Insurers have significant work ahead, yet they have opportunities, too. By developing an organized, comprehensive strategy that firmly connects growth and profit objectives with risk goals, they can counter these strong competitive challenges and exert more control over their business.”

The survey established that CFOs are grappling with technology implementation even as they continue to understand the competitive benefits it provides. They ranked technology limitations (56%) as the primary internal obstacle in realizing their profit goals, and information technology (83%) as the greatest cost and expense management challenge, which far outpaced regulatory and accounting compliance (44%). Nearly three-fifths (59%) said the effective use of technology to create value with customers is their leading distribution-related challenge.

“Operationally, the survey showed that insurers need to utilize technology more effectively,” said Friedman. “This spans multiple functions of their business, from financial modeling, pricing and product development, to distribution and customer service. With the right technology and financial models in place, life insurers can turn data into discernible information, which will help them better understand and serve their customers, and improve top- and bottom-line growth.”

The survey also revealed that insurers’ satisfaction level with their financial models varied by use and that the full benefits of their models have not been realized. While three-quarters expressed a high level of confidence with model results for cash-flow testing and over half (56%) for valuation, insurers are less enthusiastic about other functions, such as hedging (36%) and pricing (22%). Further, insurers are only moderately satisfied with the timeliness of their models. At best, half are extremely pleased with their hedging models, but their satisfaction trails off to a low of 9% for their economic capital or capital

Economic Confidence Rebounds amongst Italian Business Leaders
Due DiligenceRisk Management

Economic Confidence Rebounds amongst Italian Business Leaders

Confidence amongst Italian CEOs bounced back in the first quarter of 2015, following continued low commodity prices and the European Central Bank’s significant quantitative easing package. The YPO Global Pulse Confidence Index for Italy rose 5.3 points to 61.6, its highest level for a year.

Confidence rose in all three key indicators within the survey, with Italian CEOs reporting that they expected to increase revenue, headcount and fixed investment in the 12 months to come.

Across the European Union, CEOs remained positive about the prospects for their organisations and the wider business environment. The YPO Global Pulse Confidence Index for the EU climbed 1.3 points to 62.5, matching the record high that it achieved in the second quarter of 2014.

For the first time in the Global Pulse Index’s six-year history, EU confidence is now higher than the global composite level of 61.5, and only marginally below the world’s two most optimistic regions, Asia, which landed at 63.6, and the United States, which came in at 63.3.

“The results indicate that Italy is receiving a timely boost in economic confidence, after a challenging few years in Europe, following favorable economic policies, low fuel prices and the continued devaluation of the euro,” said Federico Grom, founder and CEO of Grom and a member of the YPO Italy Chapter. “Business leaders in Italy will likely remain cautious throughout the next year, aware of the many threats to sustained economic growth.”

The YPO Global Pulse Confidence Index declined 1.0 point in the April 2015 survey to 61.5 from 62.5. The global index continued to track closely to its peak level for the cycle, but growth prospects around the world were increasingly uneven. While confidence rose in Asia and the European Union and remained high in the United States, the indices for Latin America and non-EU Europe both tumbled to 52.4, their lowest levels since the YPO survey began.

Key findings

Italian business leaders positive about short-term business climate: Two-thirds of Italian CEOs expected the business and economic conditions affecting their organisations to improve in the next six months, with the other third predicting that conditions will remain the same.

Looking ahead 12 months, Italian business leaders were more conservative. Twenty percent indicated they expected to increase their headcounts within the year; 40% indicated increasing capital spending during the same time period.

Confidence levels converge across region: In first quarter 2015, confidence levels evened out across the major European economies, as many countries that had experienced extremely fragile levels of confidence over the past few quarters bounced back. France jumped 9.1 points to 61.2, its highest level since the second quarter of 2011, Greece climbed 8.1 points to 58.8, and Germany gained 2.6 points, landing at 60.8, its highest level since the final quarter of 2010.

In contrast, with its forthcoming national elections in the balance, confidence in the United Kingdom remained almost unchanged, edging up by just 0.1 point to 68.7, still in firmly optimistic territory.

YPO Global Pulse Confidence Index

The quarterly electronic survey, conducted in the first two weeks of April, gathered answers from 2,211 chief executive officers across the globe. Visit www.ypo.org/globalpulse for more information about the survey methodology and results from around the world.

About YPO

YPO (Young Presidents’ Organization) is a not-for-profit, global network of young chief executives connected through the shared mission of becoming Better Leaders Through Education and Idea ExchangeTM. Founded in 1950, YPO today provides 22,000 peers and their families in more than 125 countries with access to unique experiences, extraordinary educational resources, access to alliances with leading institutions, and participation in specialised networks to support their business, community and personal leadership. Altogether, YPO member-run companies employ more than 15 million people around the world and generate US$6 trillion in annual revenues. For more information, visit www.ypo.org.

Business Owners Save 300 Hours a Year with Automated Accounting App
Due DiligenceRisk Management

Business Owners Save 300 Hours a Year with Automated Accounting App

IP Commerce, Inc., developer of innovative products and services that automate business processes for small business owners, launched the newest version of Commerce Sync today.

Commerce Sync is a software application that automatically transfers sales information from a point of sale (POS) system or e-commerce solution directly into accounting software on a daily basis.

“Commerce Sync is an extremely valuable tool that helps optimize and streamline our business processes and ultimately saves us valuable time and money.”

Drawing on its profound understanding of both point of sale (POS) solutions and accounting software, IP Commerce created Commerce Sync to alleviate the burdensome task of manual accounting. The application transfers sales information, including taxable and non-taxable income, tips, discounts, sales tax and refunds – for businesses with one or many locations – into any QuickBooks or Xero account. Commerce Sync is available to business owners that use either Stripe or Clover POS for accepting payments.

U.S. small and medium sized businesses spend billions of hours each year managing their finances. Commerce Sync relieves business owners of this burden by reducing the time spent on manual data entry and increasing the accuracy of their financial accounting. In fact, Commerce Sync saves the average small and medium-sized business (SMB) 300 hours a year – the equivalent to $15,000 annually.

“As a start-up, it is imperative to make sure everything is in place as we grow,” said Bill Willkins, Founder and Chief Operating Officer of PupJoy, a Chicago-based online specialty store for dog lovers. “Commerce Sync is an extremely valuable tool that helps optimize and streamline our business processes and ultimately saves us valuable time and money.”

Commerce Sync has a simple activation process and is fully customizable. The latest version of the app introduces multiple levels of service that range in feature sophistication thereby catering to a wide range of business needs.

“We want to empower merchants to focus on what matters most – growing their business,” said Charlie Wilson, President and Chief Executive Officer of IP Commerce. “With the ultimate goal of helping small business owners and entrepreneurs succeed, we have spent the last year listening to our customers and realizing the true value of the service we offer. We are thrilled to make these innovative enhancements readily available to the market.”

Zurich Responds to International Demand for Comprehensive Cyber Policy
Due DiligenceRisk Management

Zurich Responds to International Demand for Comprehensive Cyber Policy

 It’s never been more important to protect a company’s balance sheets and reputations from cyber risk. Over the past decade we have seen an increase in the costs to organisations as a result of cybercrime and despite advances in cyber security it is clear the hacker is currently winning the battle. Data breaches, network outages, corrupt data, lost customers, regulatory fines, litigation claims, and cyber-extortion payments are issues the majority of companies rarely have the necessary resources to effectively address. Therefore, to protect and help organisations get back to business following a breach, Zurich has developed ‘Security and Privacy ‘ protection and ‘DigitalResolve’.

Zurich’s research highlighted that outside of the US global companies main cyber concern was their first party exposures as a result of a breach rather than their potential liabilities.

For this reason ‘Security and Privacy Protection’ coverage has been specifically developed to cover these first party exposures as well as cover for 3rd party liabilities and includes a new cover to provide loss of income following a data breach or damage to reputation.

‘Zurich Security and Privacy Protection’ also includes a global breach response service called ‘DigitalResolve’. Following a breach, Zurich clientswill be provided with a single dedicated Incident Manager, with 24/7/365 availability to manage the resources needed to recover from a damaging cyber event. The ‘DigitalResolve’ team of global trusted expert providers, co-ordinate and triage the cyber-attack incident response from it’s first notification right through to it’s successful conclusion. ‘

 

Insurers Say Predictive Modeling Is Boosting Their Profits
InsuranceRisk Management

Insurers Say Predictive Modeling Is Boosting Their Profits

Towers Watson first surveyed P&C insurers on their predictive modeling techniques in 2009; since then, a growing proportion of insurers have reported positive impacts on rate accuracy (98% of insurers in 2014 versus 68% 2009), loss ratios (91% versus 57%) and profitability (87% versus 57%).

The survey shows that the increasing percentage of insurers currently using predictive modeling for underwriting, risk selection, rating and pricing continues the long-term growth trend across every line of business compared to last year. For personal lines, auto experienced the most growth (97% in 2014 versus 80% 2013). Two commercial lines (property and auto) sustained year-to-year increases of 19 percentage points in the use of modeling. Specialty lines exhibited the largest increase (44% versus 13%).

Concurrent with insurers’ confidence that the value of predictive modeling for their business is growing, the survey notes its applications are being deployed more broadly across the enterprise, beyond just risk selection and pricing. While less than 30% report they are currently using predictive models to evaluate fraud potential, claim triage, litigation potential or target marketing, an additional 36% anticipate doing so over the next two years across all those applications.

“Insurers’ profitability in the competitive P&C market is hard earned,” said Brian Stoll, director, P&C practice, Towers Watson. “However, many are recognizing the value of predictive modeling to favorably impact loss costs, expenses and premium growth. In fact, more than nine out of 10 (92%) personal lines carriers say sophisticated risk selection and rating techniques are an essential driver of performance, while 86% of small to midsize commercial lines tell us it’s either an essential or a very important driver.”

Insurers say price integration (overlay of customer behavior and loss cost models in setting prices) is one area where progress has been slow. Two-thirds aren’t using price integration for any products, while most have not yet moved on to price optimization for products.

“The disparity between insurers’ optimal use of price integration techniques and the actual level of implementation is surprising. Insurers may be missing the strong competitive advantage that model integration provides,” said Klayton Southwood, director, P&C practice, Towers Watson.

In other notable findings, nearly two-thirds (65%) of respondents characterize their companies as data-driven organizations. For insurers that don’t, access to data and data warehouse constraints are the primary reasons, as opposed to philosophical considerations or disinterest. Carriers exhibit varying levels of adoption of approaches commonly considered to be characteristic of data-driven organizations.

Personal auto carriers are making progress with usage-based insurance (UBI) offerings, with nearly one-quarter (23%) having launched products or planning to in the next year. Further, a clearer road map is emerging for insurers to implement UBI in their auto operations — nearly three in five personal auto (59%) and commercial auto (58%) insurers say they’re in planning stages or considering adoption.

Investment Managers: Fill Your Stockings with Big Data and Real-Time Analytics
Natural CatastropheRisk Management

Investment Managers: Fill Your Stockings with Big Data and Real-Time Analytics

KPMG has today warned that investment managers must invest in big data and real-time analytics, or risk being caught short in 2015, as the firm predicts an increasingly volatile geopolitical landscape.

Tom Brown, global head of investment management at KPMG, said, “While geopolitical risk will always be in the fabric of investment management, it is the ability to manage and quickly respond to these developments that defines success.

“However as recent geopolitical developments such as the falling oil price and volatility in the Rouble suggest, risks are increasing in unprecedented variety, volume and velocity. Investment managers without the ability to analyse as well as make decisions in real-time, risk falling behind and therefore, impacting fund performance.”

KPMG’s economics practice has released five economic themes that investment managers should take note of next year:

●Volatile exchange rates
●Continued low crude oil prices
●Local conflicts from Isis and Ukraine, to the Eurozone
●Business innovation – potential emergence of breakthrough technologies
●Cheap money inflating asset bubbles

Yael Selfin, head of macroeconomics at KPMG, said, “The latest Fed announcement points at US interest rates rising in the second quarter of next year, which could trigger significant market volatility early in 2015, as investors hastily readjust their global holdings.”

Tom Brown adds, “January’s fund performance figures will reveal the industry’s winners and losers in terms those that have been able to respond to the spate geopolitical risks over the past quarter.

“Undoubtedly those who have been caught short will be reflecting on the quality of their data, modelling and ability to respond quickly. However it is equally important for those who have performed well not to be complacent. They must look at whether their existing data, systems and processes are able to cope with the increasing volatility.

“Successful investment managers will be those who invest in advanced big data and real-time analytics. This will not only help them make informed real-time decisions, but can also help with predictive analysis to maximise fund performance. Those who fail or are slow to embrace this technology risk being caught short and will potentially suffer poor fund performance.”

Report Identifies Key Risks for Financial Institutions Across EMEA
InsuranceRisk Management

Report Identifies Key Risks for Financial Institutions Across EMEA

 Aon Risk Solutions, the global risk management business of Aon plc, released an EMEA focused industry report today, highlighting the top risk factors facing EMEA financial institutions. As the industry contends with increasingly complex challenges and new emerging risks, this Aon report provides comprehensive industry analysis to assist financial institutions in proactively managing risk.

The 2014 EMEA Financial Institutions Industry Report offers insight into three key areas: risk priorities, the insurance market and risk management. Highlighting differences between EMEA and global trends including a key divergence in views about technology and liquidity risk, the report identifies the key areas of concern to EMEA-based financial institutions, and demonstrates that managing risk is key to achieving growth and profitability in an increasingly challenging environment.

The report is based on Aon’s Global Risk Management Survey and its Global Risk Insight Platform (GRIP), proprietary Aon data and analytics systems that deliver deep insight based on the collective opinion of risk professionals and insurance placements across the globe.

Enrico Nanni, Chief Commercial Officer, Financial and Professional Services at the Aon Global Broking Centre, said “In today’s global environment, financial institutions face increasingly complex challenges ranging from regulatory scrutiny of risk and capital ratios, through to sustained economic pressure and rising litigation. In addition, the concern around potential technology failures and constant threats of data breaches from cyber-attacks means the stakes for financial institutions have never been higher.

Mr Nanni added, “It is important that we share Aon data and insights with our clients, to ensure they are receiving the right guidance on risk mitigation and can proactively address their business risks. This free industry report is a compact illustration of the analytical insight Aon clients utilise to better manage risk.”

RenaissanceRe to Acquire Platinum Underwriters for US$1.9bn
InsuranceRisk Management

RenaissanceRe to Acquire Platinum Underwriters for US$1.9bn

RenaissanceRe Holdings Ltd. and Platinum Underwriters Holdings, Ltd. announced today that the companies have entered into a definitive merger agreement under which RenaissanceRe will acquire Platinum. Under the terms of the transaction, the common shareholders of Platinum will receive US$76.00 per common share in stock and cash, or approximately US$1.9bn. RenaissanceRe expects the transaction to be accretive to book value per share and earnings per share and that the combined company will have substantial financial strength and flexibility post-closing.

Kevin J. O’Donnell, President and Chief Executive Officer of RenaissanceRe, commented: “We are very pleased to have entered into the definitive agreement to acquire Platinum. It is a well-run company and its integration with RenaissanceRe will benefit our combined companies’ clients through an expanded product offering and broker relationships. It will also accelerate the growth of our US specialty and casualty reinsurance platform and as a result, create enhanced value for our shareholders.”

Mr. O’Donnell continued: “Platinum is a company we know well as we supported its formation and initial public offering in 2002. Platinum’s disciplined approach to underwriting and risk management is a strategic and cultural fit for RenaissanceRe and its book of business will be integrated within our risk management framework. After the transaction closes, we anticipate our combined company will continue to have the very strong capital and liquidity position you have come to expect from RenaissanceRe.”

The aggregate consideration for the transaction will consist of 7.5 million RenaissanceRe common shares, valued at approximately US$761m, and US$1.16bn of cash. The cash consideration will be funded through a pre-closing dividend from Platinum, RenaissanceRe available funds and the proceeds from the issuance of new senior debt.

The acquisition price of US$76.00 represents a 24% premium to Platinum’s closing price per common share as of November 21, 2014. At closing, Platinum shareholders will receive a US$10.00 per share special pre-closing dividend and will be entitled to elect to receive, for each Platinum share held, either (i) US$66.00 in cash, (ii) 0.6504 RenaissanceRe common shares or (iii) 0.2960 RenaissanceRe common shares and US$35.96 in cash. All elections will be subject to proration such that RenaissanceRe issues exactly 7.5 million common shares. Following completion of the transaction, Platinum’s existing shareholders will own approximately 16% of RenaissanceRe’s outstanding shares.

RenaissanceRe’s senior management team, led by Kevin O’Donnell, and eleven member Board of Directors will remain in place. The combined company will retain RenaissanceRe’s name and headquarters.

For the twelve months ended September 30, 2014, the two companies had pro forma gross premiums written of US$2.0 bn. Shareholders’ equity will increase from US$3.7bn to US$4.5bn and total cash and invested assets will increase from US$7.0bn to US$9.4bn on a pro forma basis. RenaissanceRe expects to achieve approximately US$30m of run-rate annual cost savings and to realize meaningful capital efficiencies from the combination.

The agreement has been unanimously approved by both companies’ Boards of Directors. The transaction is expected to close in the first half of 2015 and is subject to customary regulatory approvals as well as the approval of Platinum’s shareholders.

Hire a Hacker to Solve Cyber Skills Crisis
Due DiligenceRisk Management

Hire a Hacker to Solve Cyber Skills Crisis, Say UK Companies

UK companies admit they are considering turning to ex-hackers in a bid to stay one step ahead of cyber criminals, according to the latest research from KPMG.

KPMG surveyed 300 senior IT and HR professionals in organisations employing 500-plus staff to assess how the corporate world is ‘skilling-up’ to protect itself against cyber security breaches. The survey revealed that many companies are becoming increasingly desperate as they struggle to get the right people on board.

Nearly three quarters (74%) say they are facing new cyber security challenges which demand new cyber skills. For example, 70% admit their organisation ‘lacks data protection and privacy expertise’. The same proportions are also wary about their organisation’s ability to assess incoming threats.

The majority are candid enough to admit that the shortfall exists because the skills needed to combat the cyber threat are different to those required for conventional IT security. In particular 60% are worried about finding cyber experts who can effectively communicate with the business – vital to ensuring that cyber threat is well understood by corporate leaders outside the IT department.

While 60% claim to have a strategy to deal with any skills gaps, it is clear that there is a short supply of people with all the relevant skills. 57% agree it has become more difficult to retain staff in specialised cyber skills in the past two years. The same number say the churn rate is higher in cyber than for IT skills and 52% agree there is aggressive headhunting in this field.

According to KPMG’s research, the skills gap is forcing many companies to consider turning to ‘poachers turned game-keepers’ to keep up to speed. 53% of respondents say they would consider using a hacker to bring inside information to their security teams. Just over half (52%) would also consider recruiting an expert even if they had a previous criminal record.

Commenting on the findings Serena Gonsalves-Fersch, head of KPMG’s Cyber Security Academy, says: “The increasing awareness of the cyber threat means the majority of UK companies are clear on their strategy for dealing with any skills gaps. However, they wouldn’t hire pickpockets to be security guards, so the fact that companies are considering former hackers as recruits clearly shows how desperate they are to stay ahead of the game. With such an unwise choice on the menu, it’s encouraging to see other options on the table.

“Rather than relying on hackers to share their secrets, or throwing money at off the shelf programmes that quickly become out of date, UK companies need to take stock of their cyber defence capabilities and act on the gaps that are specific to their own security needs. It is important to have the technical expertise, but it is just as important to translate that into the business environment in a language the senior management can understand and respond to.” 

FCA: Small Firms Need to Better Manage Financial Crime Risks
InsuranceRisk Management

FCA: Small Firms Need to Better Manage Financial Crime Risks

The Financial Conduct Authority (FCA) has found that many small banks and commercial insurance intermediaries fail to effectively manage financial crime risk. The two reviews published today follow related work by the FCA’s predecessor on banks in 2011 and intermediaries in 2010.

While the reviews found some firms had made good progress in addressing areas of weakness and saw examples of good practice, there were significant shortcomings at other firms. The FCA has proposed further guidance for all firms to ensure that expectations are clear.

Tracey McDermott, FCA director of enforcement and financial crime, said:

“Firms must take their responsibility to reduce the risk of financial crime seriously. Significant improvements are still required in this area.

“To do that successfully requires firms to use their judgement and common sense. That is not about box ticking or wholesale de-risking. It is about firms getting the basics right – understanding their customers, the risks they pose and managing those risks proportionately and sensibly.”

The FCA reviewed ten commercial insurance intermediaries and 21 banks – ten of these firms (five banks and five intermediaries) were also part of the 2010 and 2011 thematic reviews. The FCA found:

● Despite extensive work over recent years to address key issues, there were significant and widespread weaknesses in most banks’ anti-money laundering systems and controls, and in some banks’ sanctions controls. Although senior management engagement had improved, a third of banks had inadequate resources; staff often had weak knowledge of money laundering risks; and some overseas banks struggled to reconcile their group policies with higher UK requirements. Since the FCA’s review, several banks have replaced their Money Laundering Reporting Officers; four firms have temporarily restricted their business whilst they correct the weakness in their controls; and the FCA has instructed three banks to undertake an independent review of their systems and controls (a skilled person’s review); and two firms have been referred to the enforcement division for investigation.

● Overall, most intermediaries’ controls failed to manage bribery and corruption risk effectively. While some intermediaries’ policies on remuneration, hospitality and training had improved since the last review, bribery and corruption risk assessments were often too narrow and many firms failed to take a rounded view of the risks associated with individual relationships. Half of the third party and client files reviewed were inadequate and senior management oversight was often weak.

These reviews, enforcement action, and proposed new guidance – which updates the FCA’s financial crime guide for firms – reflect the FCA’s objectives to ensure markets work well, enhance the integrity of the UK financial system and ensure consumers are appropriately protected.

Germany and UK Agree Joint IP Rules Proposal
InsuranceRisk Management

Germany and UK Agree Joint IP Rules Proposal

The proposal is based on the Modified Nexus Approach proposed by theOECD, which requires tax benefits to be connected directly to R&Dexpenditures, but amends these rules to address concerns expressed by some countries and seeks to address outstanding issues in relation to qualification of expenditures, grandfathering and tracking qualifying R&Dexpenditure.

The proposal is designed to bridge different views of OECD and G20 member countries on the application of the modified nexus approach. Germany and the UK will present this to the OECD Forum on Harmful Tax Practices and seek formal approval by the OECD and G20 at the January meeting of the OECD’s Committee on Fiscal Affairs.

Both Germany and the UK remain fully committed to the successful conclusion of the BEPS negotiations by the end of 2015, and to making the necessary progress on all Actions within this project in order to do so. The proposal was developed through bilateral discussions between the two countries, seeking to achieve a balance between maintaining countries’ ability to offer such regimes and preventing misuse of them.

The proposal seeks to achieve this through reinforcing the nexus approach to ensure substantial activity is undertaken in the jurisdiction offering the relief, whilst better reflecting the commercial realities of R&D investment by business. It also makes necessary provision for transitional arrangements between existing and new rules, and proposes further work to develop practical means of implementing the Modified Nexus Approach.

Announcing the proposal, Chancellor of the Exchequer George Osborne said:

“This is a great deal for Britain – we protect our vital scientific research while making sure there are international rules that stop aggressive tax avoidance. Our joint proposal balances the need to allow countries that wish to have these regimes to do so, whilst ensuring that they operate by rules that prevent abuse. This demonstrates the strength of our commitment to the BEPS project that we both helped initiate, and our determination to ensure that we conclude this by the end of 2015.”

Finance Minister Wolfgang Schäuble said:

“We have reached an important agreement on patent boxes. Preferential tax treatment of intellectual property must be dependent on substantial economic activity. More and more countries are speaking out against allowing too much leeway for large multinationals to minimise their taxes. Just because something is legal, does not mean it is fair in tax terms. Multinationals must contribute their fair share to public budgets – just like any other company has to.”

Former Swinton Execs Fined and Banned from Senior Roles
InsuranceRisk Management

Former Swinton Execs Fined and Banned from Senior Roles

The Financial Conduct Authority (FCA) has fined three former senior executives of Swinton Group Limited (Swinton) £928,000. The FCA’s action follows previous enforcement action taken against Swinton: in 2013 it was fined £7.4m after it adopted an aggressive sales strategy that resulted in mis-sales of monthly add-on insurance policies; and in 2009 the firm was fined £770,000 for failures in its sales of PPI.

Peter Halpin (former chief executive) is also banned from acting as chief executive of a financial services firm, while Anthony Clare (former finance director) and Nicholas Bowyer (former marketing director) are banned from performing significant influence functions at financial services firms.

Tracey McDermott, director of enforcement and financial crime at the FCA, said:

‘A culture was allowed to develop within Swinton that pushed for high sales and increased profit without regard to the impact on the firm’s customers. We expect firms to put customers at the heart of their business. These three directors should have recognised the risk to customers and redressed the balance so that the drive to maximise profits did not jeopardise the fair treatment of customers.

‘Those with significant influence within firms are responsible for setting the tone and the culture; they set the example that others will follow. Today’s enforcement action should serve as a timely reminder to those at the very top of firms that the FCA is determined to hold individuals to account where they fall short of the standard we require.’

The FCA has found that a sales-focused culture in Swinton was encouraged by Clare and Bowyer driving a business strategy that was designed to boost the firm’s profits in 2011. The three former directors did not recognise the risk of this culture developing or take reasonable steps to prevent it.

Swinton’s participating directors (including these three directors) stood to gain a bonus of approximately £90million under the directors share scheme if operating profits reached £110million in 2011. Halpin, Clare and Bowyer would have benefited significantly under the scheme had these results been achieved.

Details of the findings against the three individuals are as follows.

Peter Halpin Halpin has been fined £412,700 in addition to a ban from acting as a CEO of an FCA authorised firm because of a lack of competence in his FCA approved CEO role. The FCA found that Halpin failed to ensure that Swinton’s management information was adequate for the firm to identify compliance issues with the sales of the monthly add-ons and to ensure its customers were being treated fairly. He also failed to respond to warning signals about those sales and, when he did act, his actions did not go far enough. He should have stepped back and considered whether, when taken together, those warnings pointed to fundamental problems with Swinton’s sales of the monthly add-ons.

Halpin also failed to recognise the risk that the potentially lucrative incentive scheme for Swinton’s executive directors could give rise to a culture within Swinton that increased the risk of mis-selling.

Anthony Clare Clare has been fined £208,600 and is now banned from holding a position of significant influence in an FCA authorised firm because of a lack of competence as an FCA approved director. In addition to his role as finance director, Clare had oversight for the firm’s compliance department and a particular responsibility for ensuring that Swinton treated its customers fairly.

Similarly to Halpin, Clare also missed warnings of compliance problems with the monthly add-on products and failed in his responsibility to ensure Swinton’s compliance department was producing accurate and representative management information. Further, Clare was involved in specific decisions concerning the development of Swinton’s breakdown and home emergency insurance policies and did not recognise the risk to customers that arose from these decisions.

As finance director, Clare was instrumental in the creation and implementation of a business strategy to maximise Swinton’s operating profits in 2011. Clare should have seen the risk that this strategy was leading to a sales-focused culture that acted to the detriment of the fair treatment of customers. Despite his responsibilities, he missed the warning signs.

Nicholas Bowyer Bowyer has been fined £306,700 and banned from performing any significant influence function at an FCA authorised firm, again because of a lack of competence as an FCA approved director.

As marketing director, Bowyer played a central role in the development and launch of the monthly add-on policies and was responsible for their design, development and marketing. He was involved in a number of decisions which were not fair to consumers.

Bowyer was also integral to the successful delivery of the directors’ strategy to maximise Swinton’s profits in 2011 and encouraged a culture to develop within Swinton that prioritised sales to the detriment of customers. Crucially, Bowyer did not appreciate that – although he was not part of Swinton’s compliance framework – he still had a personal responsibility as an FCA approved director to consider the fair treatment of customers in every decision he took in performing his role.

All three former directors settled at an early stage of the FCA’s investigation and therefore qualified for a 30 per cent discount on their fines.

Arabian Earthquake Catastrophe Model Launched
Natural CatastropheRisk Management

Arabian Earthquake Catastrophe Model Launched

Impact Forecasting, Aon Benfield’s catastrophe model development team, launched a catastrophe model to estimate the financial impact of earthquakes in the Arabian Peninsula. Aon Benfield is the global reinsurance intermediary and capital advisor of Aon plc(NYSE:AON).

The demand for catastrophe modelling in the countries of Gulf Cooperation Council (GCC) is increasing as a result of the region’s rapid economic growth. The new probabilistic earthquake model for the Arabian Peninsula addresses this market demand and can be used by insurers and reinsurers to gain a more accurate view of the seismic hazard for risk pricing and reinsurance purchasing.

The model covers Saudi Arabia, Yemen, Oman, the UAE, Qatar, Bahrain and Kuwait. Key features include:

  • up-to-date understanding of the seismic risk in the region with the model incorporating state-of-the art research on the
  • regional seismic risk published in leading academic forums
  • 500,000+ stochastic events capturing the full range of potentially damaging events
  • understanding of the insured building stock of the region, drilling down to 24 different structural types, three building age and height categories, and detailed residential, commercial and industrial occupancies
  • ability to model buildings, contents and business interruption
  • incorporation of model uncertainty with regards to hazard, location and vulnerability in order to quantify the intrinsic variability behind the model.

Cristina Arango, seismologist and catastrophe model developer at Impact Forecasting, commented: “Our Arabian Peninsula model is built upon the latest scientific data gathered during recent earthquakes as well as research on regional seismic hazard. The model allows insurers and reinsurers to understand how their portfolio will stand up in events of varying severity, as they look to expand their business in the region. Earthquake is considered to be the number one peril in the region, however, countries such as Saudi Arabia have also experienced flood so this peril is also being investigated by the Impact Forecasting team.”

Ahmed Rajab, CEO of Aon Benfield in the Middle East, added: “The new model for the Arabian Peninsula will help insurers and reinsurers to quantify their exposure, making sure that they are adequately protected against this risk and preserving the capital that they have been entrusted with by their shareholders. Crucially, the new insight into the hazard will develop knowledge, open new opportunities and allow better designed insurance products for households, commercial and industrial buyers as well as for governments and reinsurer buyers. This is a clear statement of Aon’s contribution and long-term commitment to the region.”

Cybercrime Incidents on the Rise
Due DiligenceRisk Management

Cybercrime Incidents on the Rise

The number of reported information security incidents around the world rose 48% to 42.8 million, the equivalent of 117,339 attacks per day, according to The Global State of Information Security® Survey 2015, released by PwC in conjunction with CIO and CSO magazines. Detected security incidents have increased 66% year-over-year since 2009, the survey data indicates.

“It’s not surprising that reported security breach incidents and the associated financial impact continue to rise year-over-year,” said David Burg, PwC’s Global and US Advisory Cybersecurity Leader. “However, the actual magnitude of these breaches is much higher when considering the nature of detection and reporting of these incidents.”

As security incidents become more frequent, the associated costs of managing and mitigating breaches are also increasing. Globally, the estimated reported average financial loss from cybersecurity incidents was US$2.7m – a 34% increase over 2013. Big losses have been more common this year as organisations reporting financial hits in excess of US$20m nearly doubled.

But despite elevated concerns, the survey found that global information security budgets actually decreased four% compared with 2013. Security spending as a percentage of IT budget has remained stalled at 4% or less for the past five years.

“Strategic security spending demands that businesses identify and invest in cybersecurity practices that are most relevant to today’s advanced attacks,” explained Mark Lobel, PwC Advisory principal focused on information security. “It’s critical to fund processes that fully integrate predictive, preventive, detective and incident-response capabilities to minimise the impact of these incidents.”

Organisations of all sizes and industries are aware of the serious risks involved with cybersecurity; however, larger companies detect more incidents. Large organisations – with gross annual revenues of US$1bn or more – detected 44% more incidents this year. Medium-sized organisations – with revenues of US$100m to US$1bn – witnessed a 64% increase in the number of incidents detected. And while risk has become universal, the survey found that financial losses also vary widely by organisational size.

“Large companies have been more likely targets for threat actors since they offer more valuable information, and thus detect more incidents,” said Bob Bragdon, publisher of CSO. “However, as large companies implement more effective security measures, threat actors are increasing their assaults on middle-tier companies. Unfortunately, these organisations may not yet have security practices in place to match the efficiency of large companies.”

Insiders have become the most-cited culprits of cybercrime – but in many cases, they unwittingly compromise data through loss of mobile devices or targeted phishing schemes. Respondents said incidents caused by current employees increased 10%, while those attributed to current and former service providers, consultants and contractors rose 15% and 17%, respectively. “Many organisations often handle the consequences of insider cybercrime internally instead of involving law enforcement or legal charges. In doing so, they may leave other organisations vulnerable if they hire these employees in the future,” added Bragdon.

Meanwhile, high profile attacks by nation-states, organised crime and competitors are among the least frequent incidents, yet the fastest-growing cyber threats. This year, respondents who reported a cyber-attack by nation-states increased 86% – and those incidents are also most likely under-reported. The survey also found a striking 64% increase in security incidents attributed to competitors, some of whom may be backed by nation-states.

Effective security awareness requires top-down commitment and communication, a tactic that the survey finds is often lacking across organisations. Only 49% of respondents say their organisation has a cross-organisational team that regularly convenes to discuss, coordinate, and communicate information security issues.

PwC notes that it is critical for companies to focus on rapid detection of security intrusions and to have an effective, timely response. Given today’s interconnected business ecosystem, it is just as important to establish policies and processes regarding third parties that interact with the business.

“Cyber risks will never be completely eliminated, and with the rising tide of cybercrime, organisations must remain vigilant and agile in the face of a constantly evolving landscape,” said PwC’s Burg. “Organisations must shift from security that focuses on prevention and controls, to a risk-based approach that prioritises an organisation’s most valuable assets and its most relevant threats. Investing in robust internal security awareness policies and processes will be critical to the ongoing success of any organisation.”

Risk Appetite Reaches Record Highs
InsuranceRisk Management

Risk Appetite Reaches Record Highs

Risk appetite among the chief financial officers (CFOs) of the UK’s largest companies has reached a seven year high, according to the Deloitte CFO Survey for Q3 2014.

Deloitte’s survey, which gauged the views of 118 CFOs of FTSE 350 and other large private UK companies, suggests that risk appetite is being supported by a rebound in the US economy, UK growth and easy access to finance.
72% of CFOs say now is a good time to take risk onto their balance sheets, up from 65% in Q2 2014 and three times the level (23%) seen in Q3 2012.

However, CFOs’ perceptions of economic and financial uncertainty rose in the third quarter for the first time in two years. 56% said the level of financial and economic uncertainty facing their business was above normal, high or very high, up from 49% in Q2 2014. Scotland’s independence referendum seems to have been a dominant factor. Perceptions of risk amongst CFOs completing the survey before the result were twice as high as for those who responded after.

Sentiment about the euro area has deteriorated markedly, with a net percentage of -39% seeing improving prospects for the region, down from +54% in Q1 2014. Confidence in emerging markets continued to decline, with a net balance seeing an improvement of -13%. By contrast CFOs are upbeat on prospects for the UK, a net balance of +85% reported improved growth prospects.

CFOs have become significantly more positive about official policy in the UK which is seen as increasingly conducive to the long term success of businesses. 97% said that the Bank of England’s monetary policy was appropriate, up from 91% in Q4 2012. 94% approved of the government’s labour market policies, up from 88% in Q4 2012. Tax policy was endorsed by 90% of CFOs, up from 75% in Q4 2012 while public spending plans were backed by 89%, up from 58% two years ago. 73% saw the government’s immigration policy as being appropriate, a rise from 60% in Q4 2012.

However, policy remains a prominent concern for business, more so than economic worries. CFOs ranked the 2015 general election and a future UK referendum on EU membership ahead of deflation, weakness in the Euro area and higher interest rates as risks to their businesses.

Credit conditions continued to improve. A net 83% of CFOs said that credit is easily available and a net 82% said that credit was cheap, the highest levels recorded in the past seven years. CFOs remain confident about growth with a net 90% expecting revenues to increase in the next 12 months.

Ian Stewart, chief economist at Deloitte, said: “With a resurgent US economy, good growth in the UK and plentiful liquidity, CFOs have shrugged off the effects of rising uncertainty and weakness in Europe, sending corporate risk appetite to a seven year high. Expectations for corporate revenues and margins remain close to the four year high seen in Q2.

“Large corporates face few obstacles to raising finance, credit is cheaper, and more available, than at any time in the last seven years. In reversal of the situation during the credit crunch, CFOs say that financing conditions are one of the key factors enabling companies to raise investment spending.

“CFOs have become more positive about official policy – from government, regulators and the Bank of England. Confidence has risen in eleven separate areas of policy, and most markedly on public spending, tax policy, immigration and financial regulation.

“But it’s not all plain sailing for the corporate sector, perceptions of economic and financial uncertainty rose for the first time in two years. Weakness in the euro area economy, events in the Middle East and Ukraine and, particularly, the Scottish referendum have created new uncertainties. Political risk has eclipsed worries about the economy as concerns for CFOs.”

UK Pork Farmers Facing Pressure to Reduce Prices
Due DiligenceRisk Management

UK Pork Farmers Facing Pressure to Reduce Prices

The warning was issued by BPEX, the trade body for pig production in the UK, which went on to say it will detrimentally effect many Western countries, as demand drops and supply is maintained.

Mick Sloyan, the director of BPEX, said:

“This will increase competition on global markets,

“It may have some knock-on effect on the EU market and, hence, the UK,”

Russian Ban and Canada’s Woe

The ban imposed by Vladimir Putin is in response to the sanctions which have been imposed on Russia over the continuing crisis in Ukraine.

Coming into effect from last Thursday, August 7, the ban has been introduced for at least a year. All members of the EU, Australia, Canada, Norway and the US are affected alongside the UK.

With all pork producers likely to undergo further due diligence processes to understand the full potential of the ban, the biggest hit country will be Canada. Russia presently imports about 90% of its pork products, with the North American country supplying 40% of that total.

UK Demand and Chicago’s Warning

The result could see prices in the UK drop significantly, with the boss of Midland Pig Producers, James Leavesley, telling the BBC:

“If Russia bans pork from other countries there is a danger it could be dumped into the UK market,”

With prices falling already and low margins as a result, Mr Leavesley fears for the future of the industry. His fears could be backed up by results overseas.

Chicago is seen as a benchmark for global pork pricing with ‘Lean Hog’ futures and options traded on the Chicago Mercantile Exchange (CME). After peaking in July the market has seen a fall of 18%.

At the time of writing, the market price was hovering at around 114¢.

Global Tensions “Heighten Cyber Security Risks”
Natural CatastropheRisk Management

Global Tensions “Heighten Cyber Security Risks”

“Businesses are so focused on cyber attacks by organised crime that it is easy for them to ignore the possibility of being targeted by groups wanting to make a political point, possibly even with backing from a hostile government,” says Malcolm Marshall, UK and global lead in KPMG’s cyber security practice.

“Over the past five years the international business community has seen a number of incidents where websites have been hacked so that political messages can be uploaded where they will receive widespread exposure – the Syrian Electronic Army is just one example, amongst many. Hacktivists are certainly more active during periods of international tension, but it’s the next step that businesses should be wary of.

“Cyber attacks are becoming part of international conflict and it seems that probing cyber attacks are likely to be the first phase in the hostile phase of future conflicts. The well-worn phrase about who has their ‘finger on the button’ has taken on a new meaning and this is something that banks, financial institutions and global businesses need to consider. After all, the ability to disrupt electronic trade, divert funds, or overload IT systems so that transactions cannot be completed, can have an effect that goes far beyond the geographies where disputes are raging.

“It doesn’t mean organisations should panic and ‘bunker down’. What it does mean is that, just as scenarios are planned to help deal with major physical security breaches, organisations need to put plans in place that recognise we now operate in a world without cyber borders. If they can successfully build these defences and take proactive steps to protect themselves, they will reduce the chances of inadvertently becoming embroiled in a wider dispute.”

Friday the 13th: Unluckier for Some
InsuranceRisk Management

Friday the 13th: Unluckier for Some

The age old superstition about falling prey to bad luck on Friday the 13th does in fact ring true for some motorists according to new data from Aviva, the UK’s largest insurer. Analysis of 10 years of claims data reveals that motor collision claims increase by an average of 13% on Friday 13th, compared to other days in the same month.

This unlucky day spookily sees more bumps and shunts than normal no matter what time of year Friday 13th falls on – be it a cold winter, rainy spring or sunny summer.

And although around two-thirds of people (63%) admit to holding some superstitious beliefs, just one quarter of us (26%) believe that Friday 13th is an unlucky day, according to research from the insurer.

Half of us (50%) admit to using the phrase “touch wood” to prevent bad things from happening, while two-fifths (43%) avoid walking under ladders and more than one in three (36%) avoid opening an umbrella indoors.

The top five superstitions that people believe in:

1. 50% use the phrase “touch wood” in the hope that something bad won’t happen

2. 43% avoid walking under ladders

3. 36% avoid opening an umbrella indoors

4. 30% will not place a pair of new shoes on a table

5. 26% believe Friday the 13th is an unlucky day.

When it comes to drivers, almost one in ten (9%) said that that they keep a lucky charm in their car and 5% said they believe getting bird mess on their car is a good omen.

Heather Smith, marketing director of general insurance at Aviva, said: “Friday the 13th is traditionally a superstitious day for many but it’s spooky to see motor claims rise by an ‘unlucky’ 13%.

“While we don’t wish to cause a bout of friggatriskaidekaphobia (fear of Friday the 13th) among the population, we hope these figures will help encourage people to take extra care today, whatever they might be doing.

 

Natural CatastropheRisk Management

Which are the Riskiest Countries for Business?

The 2014 FM Global Resilience Index finds Norway, Switzerland and Canada top the list of nations most resilient to supply chain disruption, one of the leading causes of business volatility. The first-of-its-kind Index, commissioned by FM Global, one of the world’s largest commercial property insurers, is an online, data-driven tool and repository ranking the business resilience of 130 countries. More than a year in development, the Index is designed to help executives better assess and manage supply chain risk. The Index finds Kyrgyzstan, Venezuela and the Dominican Republic as nations least resilient to supply chain disruption.

“Natural disasters, political unrest and a lack of global uniformity in safety codes and standards all can have an impact on business continuity, competitiveness and reputation,” said Jonathan Hall, executive vice president, FM Global. “As supply chains become more global, complex and interdependent, it is essential for decision makers to have concrete facts and intelligence about where their facilities and their suppliers’ facilities are located. The Resilience Index is a dynamic resource to better understand unknown risk in order to strategically prioritize supply chain risk management and investment efforts.”

Key findings for 2014 include:

• The United States and China are each divided into three separate regions because the geographic spread of these countries produces significantly disparate exposures to natural hazards. All three regions of the US rank in the top 25 and China’s regions rank 61, 66 and 75. China’s weakest grouping, which includes Shanghai, ranks particularly low as a result of poor risk quality due to acute natural hazards.

• The biggest riser since 2013 is Bosnia and Herzegovina, climbing 19 places due to improvements in the country’s political risk and in the quality of local suppliers.

• Bangladesh is one of the top fallers due to declining quality of both natural hazard risk management and fire risk management.

FM Global commissioned analytics and advisory firm Oxford Metrica to develop the rankings with the aim of bolstering intelligent dialogue around building resilience and avoiding supply chain disruption.

The data comes from a combination of independent third-party sources and FM Global’s RiskMark benchmarking algorithm, which measures the risk quality of more than 100,000 insured commercial properties worldwide. The inaugural index allows for browsing of countries’ rankings and scores from 2011 to 2014, to reflect both improvements and declines in individual countries’ relative rankings.

“We live in a volatile world and whether that’s because of what nature wrought or the human element, every nation is prone to some form of risk,” said Margareta Wahlstrom, United Nations Special Representative of the Secretary-General (SRSG) for Disaster Risk Reduction. “The question is why are some countries, whether developing nations or economic power houses, more resistant to supply chain disruption or better able to bounce back? It’s a puzzle that world leaders are perpetually trying to solve and there’s endless value inherent in a tool like the FM Global Resilience Index to help answer that.”

New CEO at Lockton UAE
InsuranceRisk Management

New CEO at Lockton UAE

Lockton, the largest privately held insurance broker in the world, and 9th largest overall, has announced the appointment of Ian Walton as Chief Executive Officer of Lockton Insurance Brokers (LLC), UAE. Walton will be responsible for developing and managing Lockton’s expanding client base in the UAE.

Wael Khatib, Senior Partner & Chairman, Lockton (MENA) Ltd, said: “We are delighted to welcome Ian to our senior management team. Ian’s extensive experience complements our distinctive approach that delivers practical and reliable solutions to our clients, providing an important opportunity to meet and exceed their unique and diverse needs.”

Commenting on his role and appointment, Walton said: “I am thrilled to be joining Lockton, and look forward to working closely with their clients and continuing to provide the level of service and advice for which the company is renowned.”

Prior to his appointment, Ian held senior international positions in both the insurance broking and underwriting sectors, with over 25 years’ working experience in the UAE and the Middle East.

More than 4,950 professionals at Lockton, which was founded in 1966 in Kansas City, Missouri, provide 35,000 clients around the world with risk management, insurance and employee benefits consulting services that improve their businesses.