Aon Second-Quarter Net Income Rise 69% on Revenue Increase

(c) 2011 A.M. Best Company, Inc.

Aon Corp. has reported net income attributable to stockholders rose 69% in the second quarter to $258 million. For the first half of the year, earnings were $504 million, up 52% from last year's first half.

"We delivered solid organic revenue growth in our retail brokerage business while delivering on the synergy savings related to Aon Hewitt," said Greg Case, president and chief executive officer, in a webcast on July 29. "We continue to execute on strategy to strengthen and unite Aon around the globe irrespective of the soft market, economic conditions or other conditions outside our control."

Total revenue increased 48% to $2.8 billion from the prior year's quarter due in part to a 42% increase in commissions and fees resulting from acquisitions, primarily of Hewitt, a 6% increase from foreign currency translation, and a 1% increase in organic revenue.

Case said while macro conditions remain challenging, the company is on track to deliver growth in 2011. Its restructuring programs are delivering costs savings, he said.

The restructurings are of businesses Aon acquired in a $4.9 billion merger in 2010 with Hewitt Associates, a 2008 merger with Benfield Group Ltd., and a restructuring program in 2007. Restructuring savings in the second quarter related to the 2007 program are estimated at $134 million, compared with $113 million in the prior year's quarter. Before any potential reinvestment of savings, the 2007 restructuring program is expected to deliver cumulative costs savings of $536 million in 2011, the company said in a release.

The Benfield program is expected to deliver cumulative cost savings of $122 million this year, and the Aon Hewitt program is expected to deliver savings of $355 million in 2013, according to the company.

Aon's two major segments performed positively. Risk Solutions' revenue increased 9% to $1.7 billion with organic revenue growth of 2%, and its operating margin was 20.5%. HR Solutions, which became much bigger when Aon acquired Hewitt last year, had total revenue of $1.1 billion and an operating margin of 10.6%.

Also in the quarter, Aon closed on the acquisition of South African broker Glenrand M.I.B. Case said Aon is also expanding its international footprint in Asia.

Aon is the second-largest global insurance broker, with $8.51 billion in revenues, according to Best's Review. Its top lines are risk solutions, human resource consulting, and outsourcing.

In the late afternoon on July 29, Aon shares were trading at $48.12, down 2.58% from the previous day's close.

(By Ron Panko, senior associate editor, Best's Review: Ronald.Panko@ambest.com)

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Update: MetLife CEO Says Majority of Business Shouldn't Be Governed by Banking Regulations

(c) 2011 A.M. Best Company, Inc.

(Updates stock price and corrects date in last paragraph.) As MetLife Inc.'s second-quarter net dropped 21% on catastrophe losses, its chief executive officer said the company doesn't think it's appropriate "for the overwhelming majority of our business to be governed by regulations written for banking institutions."

Net income dropped to $1.2 billion, as MetLife saw a $56 million operating loss from severe storms causing $174 million in catastrophe losses in its homeowners and auto business after tax -- $137 million higher than planned.

Operating earnings grew by 45% to $1.3 billion, and the company generated record premiums, fees and other revenues of $11.8 billion, a 38% increase, said Steven Kandarian, MetLife's president and CEO, on a conference call.

"We achieved these results despite losses of $218 million related to the natural disasters in the United States and Japan," said Kandarian, who took the helm on May 1.

Earlier this month, MetLife said it plans to exit the banking business in order to focus on its insurance operations. It's exploring the sale of MetLife Bank, which includes savings accounts, certificates of deposit and money market accounts (BestWire, July 21, 2011).

In the competitive global insurance market, "it is imperative that we be able to operate under the same regulatory framework as other insurance companies," Kandarian said. "Even if we are designated a systemically important financial institution, it would be as an insurance company, not as a bank."

Aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act place new oversight over commercial banks and thrift institutions insured by the Federal Deposit Insurance Corp., a category that includes many insurance groups (BestWire, July 21, 2011)

In November 2010, MetLife (NYSE: MET) completed its $16.2 billion acquisition of American International Group Inc.'s (NYSE: AIG) American Life Insurance Co. international subsidiary, which expanded its geographic footprint, especially in Japan.

Earlier this year, MetLife expected between a $45 million to $65 million hit to second-quarter operating earnings on insurance claims and higher operating expenses as a result of the earthquake that struck Japan in March. Most of the claims are on life insurance policies, with a portion from accidental death and hospital coverage riders and polices also (BestWire, May 5, 2011).

However, the claims and higher operating expenses came in just under its initial projection, at $44 million.

Premiums, fees and other revenues in Japan were up 5% over the first quarter at $1.8 billion and reflected strong sales in life and accident and supplemental health insurance.

At June 30, total assets for MetLife Bank were $16.5 billion, including deposits of $10 billion, up 13%.

MetLife expects the sale of the bank's depository business to occur in the second quarter of 2012, and would require approval by the Fed, Kandarian said.

Also hurting MetLife's net income was an investment portfolio loss of $38 million, including impairments of $77 million, after tax. But it also recorded $189 million in gains on derivatives, due mostly to lower interest rates.

Since the start of the year, MetLife sold its businesses in Venezuela and Taiwan, and a portion of its businesses in the United Kingdom and Japan, Kandarian said. "The specific reasons vary, from political uncertainty to asset liability mismatches to integration costs," he said, noting these divestitures will free up about $1 billion in capital that can be redeployed.

Total operating revenues jumped 33% to $16.8 billion.

Metropolitan Life Insurance Co. currently has a Best's Financial Strength Rating of A+ (Superior).

On the afternoon of July 29, shares of MetLife were trading at $40.96, up 2.89% from the previous close.

(By Fran Matso Lysiak, senior associate editor, BestWeek: fran.lysiak@ambest.com)

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USHEALTH Advisors, LLC Sets New Single-Week Record for Health Insurance Sales

Grapevine, TX (PRWEB) July 31, 2011

USHEALTH Advisors, LLC (USHA), the wholly-owned national distribution agency of USHEALTH Group, Inc. reported a new single-week sales record on July 29th, 2011.

"This sales record offers further evidence of USHA's remarkable growth as a company, over the past 2 1/2 years," said USHA's sr. vice president Bill Shelton. "The fact that it has occurred at a time when sales are traditionally slowing down, suggests to me that USHEALTH's growth rate is really heating up."

"Our people are simple the best," said Brian Clark, USHA's Chief Marketing Officer. "I believe we'll see even more records being set at USHA through the remainder of the year."

Company sales results for year-to-date 2011 are 28% ahead of its 2010 sales volume for the same period of time.

"When you combine the innovative products that USHEALTH brings to the marketplace, with the remarkable sales efforts of our Agents and Field Leaders, you simply have to believe that this company and its people will have a significant impact on the American health insurance market" said Troy McQuagge, the company's president and CEO. "I couldn't be more proud of any group of people, than I am of the men and women who represent USHEALTH Advisors and USHEALTH Group."

About USHealth Advisors, L.L.C.
USHEALTH Advisors was founded in 2009 as Security Health Advisors, L.L.C. It is a wholly-owned national health insurance distribution arm of USHEALTH Group, Inc. The company sells individual health insurance plans and supplementary products underwritten by The Freedom Life Insurance Company of America and National Foundation Life Insurance Company, wholly-owned subsidiaries of USHEALTH Group, Inc. The company is focused on serving America’s self-employed and individual insurance market through its captive Agent sales force.

About USHEALTH Group, Inc.
USHEALTH Group, Inc. is an insurance holding company based in Ft. Worth, Texas focused on providing innovative health insurance coverage for self-employed individuals and small business owners. The goal of USHEALTH is to combine the talents of its employees and agents to market competitive and profitable insurance products, while providing superior customer service in every aspect of the company’s operations.

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Mr. Colin Daigle Joins National Association of Construction Auditors’ Advisory Board

Midlothian, VA (PRWEB) July 30, 2011

National Association of Construction Auditors (NACA) (http://www.thenaca.org) is excited to welcome Mr. Colin Daigle, CCA, CPA, CFF, CITP, FCPA, to its Advisory Board.

Mr. Daigle is the Global Practice Leader for Marsh Risk Consulting’s (MRC) Construction Consulting Practice. The Advisory Board was formed to seek out experts in the fields of construction management and risk, auditing, real estate development, architecture, and engineering to help serve the association and its members by providing expert counsel and guidance.

“Mr. Daigle is an outstanding addition to our Advisory Board,” said NACA Chairman & Founder, Brian Felix. “He is an active leader in the construction industry focusing on financial and operational matters through his experience working in public accounting for construction industry clients, a large contractor and as a forensic construction dispute and management consultant.”

Mr. Daigle’s responsibilities at MRC include leading a team of financial, engineering, construction and management experts engaging in various types of services including project governance assessments, construction performance audits and investigations, contract disputes, and insurance claims preparation.

Mr. Daigle is frequently retained to assist clients during construction by identifying and implementing project controls to enhance the transparency and accountability related to contract compliance and progress reporting while effecting best practices to manage performance metrics. In addition, Mr. Daigle has provided construction cost, schedule and contract audit services for variety of clients in locations around the world. He has been retained as lead auditor for an array of institutional, infrastructure and heavy civil projects. Based on his experience with project delivery and contract types, he has provided financial and performance assurance to protect owners and assist contractors in resolving payment delays. Mr. Daigle has also assisted clients in maximizing loss recoveries under a variety of construction related insurance policies, such as Builders Risk, Surety, Errors and Omissions and Subcontractor Default.

An active leader in the industry, Mr. Daigle has regularly spoken about construction financial matters, and been published on the topics. His writing has appeared in the American Bar Association book “Construction Accounting, A Guide for Attorneys and Other Professionals,” and he has served as a guest instructor at Columbia University’s School of Engineering on multiple occasions. Mr. Daigle also recently served on the National Accounting and Reporting Committee for the Construction Financial Management Association (CFMA).

MRC’s Construction Consulting Practice is also part of Marsh’s Global Construction Practice, a team of 500-plus experts that include professional engineers, economists, finance specialists, statisticians, project managers, certified public accountants, and specialists in insurance, contracts, safety, loss control and claims. Leveraging this depth and breadth of expertise, Marsh provides assurance to clients that capital deployed around risk is protected in the most cost-efficient way.

Marsh Risk Consulting (http://www.marshriskconsulting.com) offers customized, innovative solutions across a comprehensive range of insurable and non-insurable risks and the global expertise of seasoned consultants that is required by today’s organizations to effectively manage risk, meet business objectives, realize opportunities, and be successful. Marsh Risk Consulting’s four primary areas of service include:

   •  Business Risk Consulting - Marsh Risk Consulting’s (MRC) Business Risk Consulting group provides enterprise risk and resiliency services to organizations that help them to preserve, protect, and defend critical business assets, whether tangible such as property or intangible such as reputation; ensure compliance with a wide range of regulatory requirements; and develop and implement processes and procedures that meet with stakeholder corporate governance expectations.

•  Financial Advisory, Claims, and Litigation Support - With expertise in areas such as casualty claim management, claim accounting preparation, mass tort consulting, forensic accounting, investigative services, dispute resolution, capital projects, product safety, and government contracting, Marsh Risk Consulting (MRC) provides organizations with full-service financial advisory, claims consulting, and litigation support.

•  Workforce Strategies - Marsh Risk Consulting’s (MRC) Workforce Strategies Practice brings experienced and credentialed consultants to the table to assist organizations with their workforce-related risk management, workers’ compensation cost containment, and operational safety challenges.

•  Marsh Business Analytics - Marsh Business Analytics (MBA) employs award-winning tools and experts to help organizations use risk analysis in all facets of their risk management and insurance purchase decision making.

As stated on their website (http://www.thenaca.org), the NACA mission is to unite those individuals and be recognized as the authority on construction project controls. “Our vision,” explains Brian Felix “is to bring all the project team members together to exchange knowledge and ideas to improve the overall control environment for the Owners, delivering them greater value.”

The NACA grants the designation of Certified Construction Auditor (CCA) and Construction Control Professional (CCP) to the individuals with the expertise in these areas. The National Association of Construction Auditors is committed to providing resources, information, and leadership for NACA members, their clients, and the public to ensure the highest standard of construction controls possible. For a limited period of time, the National Association of Construction Auditors (NACA) is currently accepting applications under the grandfathering provision for the Certified Construction Auditor (CCA) and Construction Control Professional (CCP) designations, setting the standard in these fields (http://www.thenaca.org). The provisions are a point-based system based upon education, training, and experience.

The National Association of Construction Auditors’ (NACA) inaugural Annual Conference will be held at the Rio All-Suite Hotel & Casino Resort in Las Vegas, September 19-21, 2011. The National Association of State Boards of Accountancy (NASBA) certified CPE sessions include topics related to the control environment of construction projects, fraud, government contracting, and ethics; led by recognized training leaders such as Rich Townsend, Denise Cicchella, John Croy, Joe Kranz, and John Wisz. Additionally, James D. Ratley, CFE, President of the Association of Certified Fraud Examiners will be the keynote speaker.

“All those involved in controlling capital projects, such as Auditors, Architects, Owners, Owners Representatives, Project Managers, Cost Engineers, Risk Professionals, and Project Accountants will benefit from this one of a kind event.” Brian Felix remarked.

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Fla. Citizens Inches Closer to Massive Sinkhole Rate Hike

(c) 2011 A.M. Best Company, Inc.

Florida'sCitizens Property Insurance Corp. moved one step closer to implementing a significant increase in sinkhole coverage rates when the board that oversees the agency unanimously voted in favor of the hike. If the increase is approved by the Florida Office of Insurance Regulation, policyholders would see their sinkhole premiums jump by an average of 429% and up to 2000% in parts of the Tampa Bay area.

Citizens officials have said the increases are necessary to bring premiums more in line with the losses it sees on sinkhole claims. During the past nine years, Citizens has paid out more than $1 billion in sinkhole claims. Last year alone, Citizens collected some $32 million in sinkhole premiums and paid $245 million, according to figures provided by Citizens.

Citizens is a not-for-profit, tax-exempt government corporation that serves as an insurer of last resort for Florida residents.

The current average sinkhole premium is $156 annually in Tampa, and $260 for Hillsborough County residents outside of Tampa. That premium would jump to $3,651 under the proposed filing.

Residents in coastal areas of Pasco County, who currently pay an average of $1,270, would see premiums rise to $3,598, while other county residents who currently pay an average $1,475 would pay $4,440. Residents in coastal areas of Hernando County, who currently pay an average $1,356, would pay $5,734, and other county residents, who currently pay an average $1,084, would pay $6,192.

"These numbers highlight the significance of the sinkhole crisis in Florida," said Citizens spokeswoman Christine Ashburn earlier this week when the actuarial and underwriting committee of the state-run insurer approved the plan (BestWire, July 27, 2011).

Critics of the rate increase have said if Citizens' premiums rise, other insurers will likely follow suit, pointing to a property insurance law passed earlier this year that was designed to address cost drivers in the system. That bill, S.B. 408, exempts sinkhole coverage from the state-mandated 10% rate cap on Citizens (BestWire, May 18, 2011).

"The sad thing is that this is only the beginning," Sen. Mike Fasano, whose district includes parts of Hernando and Pasco Counties, said in a written statement this week. "The most consumer-unfriendly piece of legislation in our lifetime, S.B. 408 also allows private insurers to do the same. I have no doubt they will quickly follow suit."

The top five writers in the Florida homeowners' multiperil market in 2010 were Citizens Property Insurance Corp., with a 16.06% market share; State Farm Group, with 13.61%; Universal Insurance Holdings Group, with 8.38%; USAA Group, with 4.87%; and St. Johns Insurance Co. Inc., with 3.44%, according to BestLink, which provides online access to A.M. Best's database of insurance information.

(By Jeff Jeffrey, Washington Correspondent: jeff.jeffrey@ambest.com)

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Rent My Vacation Home (RMVH) Prevents Damage & Identity Theft with new Technology

San Francisco, California (PRWEB) July 30, 2011

Rent My Vacation Home dot com has new technology that checks every id and issues Travel Guard insurance for each stay unless the homeowner declines to offer this service.For a limited time this Rent My Vacation Home service is free for 30 days.

Mr. Jay Kalin CEO of Rent My Vacation Home dot com said, “No one who follows our patented check out system has ever had damage like below and we have never had identity theft or major damage to any homes in the 25 years we have need renting homes. This is not luck it’s our patented check out system. We rented Vacation homes before the internet unlike our competitors who try this the other way around .If she would have rented with the Rent my vacation home system the owner below would have had renters insurance to cover damage and she would have know the id of the person staying as well. I really am trying to prevent this from happening to homeowners. “

Recently a woman's apartment in California was ransacked by a seemingly cordial renter who rented out her apartment on a competitors website. She had her home completely destroyed by a renter who turned out to be a vandal and a total fraud.

The Rent My Vacation Home dot com system verifies all data and identity then notifies the home owner of the inquiry and if they want to accept the rental.

The guy not only destroyed the apartment, but he also stole her identity, her locked-away valuables and and left the apartment in a terrifying state of disarray.

She returned home after a week of business travel to a "pungent odor" wafting from her apartment and opened the door to find a harrowing series of sights: The creep had "smashed a hole through a locked closet door" to remove her passport, credit cards and her grandmother's jewelry she had secured away. A camera, iPod and an old laptop had been stolen along with a backup drive containing "her entire life." Her own scanner had been used to photocopy her birth certificate and social security card. And then it gets really bizarre:

They did weird stuff too she said: "moving things around in a spooky, psychotic kind of way - creepy little things that I am still discovering as I dig through the wreckage - like cutting the tags off my pillows, and hanging a painting of Paris on the wall that I had never hung before."

Rent My Vacation Home dot com system would have prevented this from happening. Rent My Vacation Home has over 70,000 homes at this time and 83 network sites that cover every city in the USA and every state, the identities are checked and insurance issued before the renter enters the home. Rent My Vacation Home also has a scam section on the site and work with various laws enforcement agencies who report crimes of this nature. The Rent My Vacation Home system guarantees against fraud and guarantees the homeowner rentals or the money is returned. When renting out a home be safe and try to use a company that is prepared for the worst in advance.

Rent My Vacation Home dot com system would have prevented this from happening .They have 70,000 homes at this time and 83 network sites that cover every city in the USA and every state for sale and for rent. The Identities are checked and insurance issued before the renter enters the home. Rent My Vacation Home also has a scam section on the site and work with various law enforcement agencies who report crimes of this nature. When renting out your home be safe and good luck this year.

This technology from Rent My Vacation Home dot com must be catching fire as Alexa the internet reporting agency reports Rent My Vacation Home is up over one thousand percent on web prescience over a 3 month period.

For moe information call 800-699-7684

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High cotton prices deferring and destroying demand?

Whether high cotton prices of 2010-11 deferred cotton demand, or destroyed a portion of it, is an uncertainty the cotton market will tackle in the coming months, according to Joe Nicosia, CEO of Allenberg Cotton Co., featured speaker at the Cotton Roundtable in New York City in July.

Nicosia said during the event held at the Intercontinental Exchange in Manhattan that 3 million to 4 million bales have been replaced with polyester in response to record high prices in 2010-11. It amounts to a 2 percent to 3 percent change in the cotton-to-polyester blend percentage.

“Now that cotton prices have fallen back and are much closer to polyester prices, will some of this demand come back to cotton? Or will consumers find manmade fibers acceptable now that they’ve tried them in alternative applications. How much has been deferred and how much has been lost?”

Nicosia said the market performed as it needed to in 2010-11 with prices climbing high enough to produce “a needed downward shift in the demand curve for cotton to get us through extremely tight stocks.”

High prices shrunk demand by about 7 million bales — to around 113 million bales — to match the smaller supply, Nicosia said. Now the market has three issues to resolve — regain its market share from polyester through either consumer demand or price; regain overall demand hurt by the high prices; and figure out how to regulate the market in 2011-12.

On the latter, Nicosia said, “If prices get too low versus corn, wheat and soybean prices, which are substantially higher, we know what will happen to our cotton acres. The market must be careful to not make the same mistake it made in 2006-09 when we lost 40 percent of our cotton acreage, and then we had the largest bull run in history.”

As for supply, Nicosia said the world has planted enough cotton acres this year “to handle a disaster of the proportion it has seen in Texas, but it cannot handle a second one. If production in the United States varies 5 percent to 10 percent up or down, we believe the outcome in prices could be as much as 50 cents. In that type of scenario, we think it is very prudent for growers to maintain upside insurance via use of the options market by buying calls once they have sold their crop.”

The foreign area response to prices this year “has also been outstanding,” Nicosia said. Worldwide, Nicosia expects a 10 percent increase in cotton acres to about 93 million acres, possibly the highest in history “and a fitting response to the price action we’ve seen over the past year.

“French West Africa is going to see a 17 percent increase in cotton area and in Greece and Turkey, a 27 percent increase. In China, although their response has been more muted, they are expecting a 7 percent increase. India’s cotton area has responded by over 10 percent for a 3 million-acre increase this year.”

Nicosia says that India will grow a 29 million-bale crop this year, but since they consume only 20.5 million bales, “this will leave them as a formidable competitor in the foreign market.”

Another question is whether India’s protectionist tendencies will again provide opportunities for U.S. exports. Last season, Indian export bans along with a global shortage of cotton resulted in “one of the greatest runs in history in U.S. cotton export sales, along with one of the greatest runs in history for cotton prices.

“However, India does produce cotton very cheaply, and it will maintain and expand cotton area even at current prices. It is possible that in the next five years, India will be the world’s largest cotton producer and its exports will rival those of the United States.”

Intense competition will also come from Australia, which has good water supplies “and with cotton at near $1 a pound, it will grow 4.7 million bales, almost all of it for export. That’s a major departure from recent years in which production has been under 2 million bales.

“Brazil will also produce a very large crop, between 8.5 million to 9 million bales in 2011-12, while consuming only around 5 million bales with the balance for export.”

Nicosia noted that large unsold stocks in Uzbekistan and Turkmenistan from 2010-11 as well as the unsold new crop harvest “will also have to fight for export share.”

Nicosia reminded listeners that a year ago, cotton fundamentals and prices were relatively stable. “As the season began we were in recovery and on track to consume 120 million bales globally. But the combined disasters in Pakistan and China brought the world crop under 113 million bales, when stocks were already tight, causing us to have to destroy the use of 7 million bales. It took prices to over $2 a pound before that job was done. Inverses of almost 80 cents a pound provided the entire pipeline with the incentive to contract and suppress nearby spinning activity as much as possible. The destruction of demand caused large export sales cancellations and switches to polyester.”

As this year’s new crop becomes available, “the question is when will more normal spinning activity occur,” Nicosia said.

The Cotton Roundtable was sponsored by the Intercontinental Exchange, Certified FiberMax, Cotton Incorporated, Ag Market Network and Farm Press Publications.

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