Sutherland insights insurance news flash july 16, 2014

INSURANCE NEWS FLASH July 16, 2014

Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 8 Technology .......................................................................................................................... 15 Strategy .............................................................................................................................. 21

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Sales & Marketing Satisfaction with auto insurance has never been higher in the US July 11, 2014 | Live Insurance News http://www.liveinsurancenews.com/satisfaction-auto-insurance-never-higher-us/ Global market research firm J.D. Power has released its latest U.S. Auto Insurance Study. The study highlights many of the trends that have emerged in the country’s auto insurance sector and examines how these trends are affecting the insurance business. This year, the study showed that consumer satisfaction has reached an all-time high, despite the fact that insurance premiums have been on the rise for the past five years.

Satisfaction reaches 810 points, highest since annual study was first published in 2000 The study examines consumer satisfaction based on five factors: Interaction with insurers, the cost of insurance policies, the type of policies that are available, how billing is handled, and payment options. Overall, consumer satisfaction is high, with many people offering praise for their insurance providers. Satisfaction has increased by 16 points (on a scale of 1,000), reaching 810. This is the highest satisfaction level that has been reported by J.D. Power since its auto insurance study was first published in 2000.

Premiums are growing, but consumers are shopping for insurance coverage less Increasing premiums often influences consumer shopping behavior. Typically, when an insurance company raises premiums, consumers seek out less expensive coverage from other companies. The study shows, however, that consumers are actually shopping less, opting to stay with their current insurance providers. This could be due to several factors, including the fact that more insurers are offering rewards for consumer loyalty. Some of these rewards provide consumers with discounts on their insurance coverage.

Communication between insurers and consumers is becoming better, creating more trust between the two parties The study notes that insurers are communicating with their consumers more effectively. As such, more policyholders are aware of premium increases. Insurers are also informing consumers as to why these premium increases are necessary, highlighting issues like fraud and the changing trends that are emerging in the insurance market as a whole. Better communication is having an effect on how consumers see their insurance providers, and people are beginning to trust their insurers more than they had in the past.

Travel insurance is becoming more expensive for seniors July 11, 2014 | Live Insurance News http://www.liveinsurancenews.com/travel-insurance-becoming-expensive-seniors/ Vacationers in their late 70s and their early 80s are now finding that travel insurance is costing them more than it once did – even more than people who have recently retired – even though the costs associated with covering those individuals on their holidays has been decreasing.

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Typically these insurance policies become more costly with age because of a rise in the risk of accidents and health problems.

For that reason, when older customers buy travel insurance, they are seen as having an increased coverage risk than their younger counterparts. Therefore, insurers are increase the premiums that these individuals are being charged. However, a recent claim stats analysis has revealed that people in their late 70s and older are less likely to make a claim than they were when they were younger.

The cost of a travel insurance claim from an older senior is also lower than from someone freshly retired.

According to Fairer Finance, the consumer website that conducted the insurance news analysis, the claims from people in their late 70s and early 80s are less costly and less frequently, but those consumers see higher premiums because insurers say that these consumers have a higher risk in those areas. The founder of the website, James Daley, said that under typical circumstances, it would be expected that the premiums for this insurance coverage should fall.

However, the analysis showed that the premiums for older vacationers were not only higher, but they were rising. The analysis found that an individual between the ages of 76 and 80 years would pay an average of £80 for their policies. However, comparable individuals who were ten years younger were being charged an average of £68 for the exact same type of coverage. For individuals in their late 80s, the average premiums increased substantially to £132, but at the same time, claims from this group were more frequent and costly, so this appears to have a much more direct connection to actual risk than it did for travels from 76 to 80 years old.

Farmers to add 85 new agency owners in Washington state July 10, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/07/10/farmers-to-add-85-new-agency-owners-inwashington Farmers Insurance is expanding its reach in Washington with plans to add as many as 85 new agency owners across the state this year, according to a news release this week.

“Farmers Insurance has identified the great state of Washington for growth and we are actively seeking strong leaders and self-starters to join us as Agency Owners in the state,” said Larry Pratt, Head of the Northwest Territory for Farmers Insurance. “There has never been a better time for talented individuals interested in becoming an Agency Owner with Farmers to join our organization.”

The firm is specifically targeting former military members as part of this hiring push, offering special incentives for veterans to ease the transition to agency ownership, including bonus funds for marketing, new office opening support and supplemental training opportunities.

Crop Insurance Claims Expected to Soar After Canadian Farm Flooding July 03, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/07/03/crop-insurance-claims-expected-to-soar-aftercanad

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Saskatchewan, Canada’s biggest producer of wheat and canola, expects insurance payouts on crops to increase after floods wiped out acreage.

“It’s a very large area that’s impacted, so we expect to get a number of claims,” said Shawn Jaques, the chief executive officer of Saskatchewan Crop Insurance Corp., a government-owned company based in Melville, Saskatchewan. “There will be a large number of producers that had their crops seeded, and it’ll be flooded out.”

It’s too early to estimate the extent of the damage as producers are just starting to call in with flooding reports, Jaques said today on a call with reporters. Parts of Saskatchewan and Manitoba are experiencing severe flooding after as much as 200 millimeters (8 inches) of rain fell last weekend.

Fifty-four municipalities in Saskatchewan have declared a state of emergency, Colin King, the province’s deputy commissioner of emergency management and fire safety, said on the call.

Wheat sowing in Saskatchewan may decline as much as 15% after excessively wet weather, Whitefish Bay, Wisconsin- based Martell Crop Projections said in report today. Four million acres in the Canadian prairies may be too wet to plant, according to LeftField Commodity Research.

Manitoba Fields The extent of damage in Manitoba is still being assessed and will depend on whether crops were completely washed out or fields can recover as water recedes, said David Koroscil, the manager of insurance projects for Manitoba Agricultural Services Corp., a government-owned company that provides risk-management and financial services to farmers. Growers in the province may file the largest number of claims for acres too wet to plant since 2011, he said.

Symptoms of excess moisture stress, including yellowing and slowed crop development, are evident in Manitoba fields, and plants have been wiped out in some areas, the province said in a report on June 30. Further damage will probably occur because of flooding and saturated soils, according to the report.

About half of the 600 acres Glen Franklin rents out to wheat and canola producers in southwestern Manitoba will not produce any crop this year because the seeded area is underwater and the rest was too wet to sow, he said.

“There’s a lot of water around, a lot of crop lost,” Franklin, 70, said today in a telephone interview from Whitewater Lake, Manitoba.

Online Sales for U.S. Commercial Lines '5 Years Behind U.K.' July 01, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/07/01/online-sales-for-us-commercial-lines-5-yearsbehin After working to establish Hiscox’s direct sales program for small businesses in the U.K., Kevin Kerridge transferred to the insurer’s U.S. headquarters in New York in 2009 to set up a similar program for Hiscox USA. What he found on his arrival surprised him.

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“I literally couldn’t believe what I saw. America is so far ahead [of other countries] in many online spaces—buying books, boking flights, even purchasing personal lines insurance. But for some reason, online business insurance was probably five years behind where the U.K. was,” says Kerridge, head of small business insurance for Hiscox USA. Hiscox USA launched its direct-to-small business online sales in November 2010, starting with professional liability. Over the past three and a half years, the program has expanded to offer BOP and general liability coverage. Hiscox also has established partnerships with a number of retail agents, wholesale brokerages, and even other insurance carriers who direct business through the Hiscox online channel.

“We’ve gone from a standing start to selling about 1,200 policies a week. We think we’re capturing a 15% market share of new buyers of business insurance in our target classes and, considering that we started in the U.S. market as a relatively unknown brand, we’re very happy with that,” Kerridge says.

Technology is the backbone of the online B2B sales process. “It has to be a low-touch process. You can’t have an underwriter touch every application or you’ll never make money on this model,” Kerridge explains. Currently, 48% of applications received by Hiscox pass straight through from quote to issuance without any human touch.

Hiscox leveraged the system it built for U.K. business, which uses Software AG’s webMethods business process management (BPM) tools to connect a number of java-based applications behind a custom-built web UI. Even with reuse of infrastructure, system development to serve the U.S. market cost the insurer more than $10 million.

“The U.S. is a more complex place to trade in than the U.K. because there are 50 states plus D.C. That creates complexity because it’s not just different rates, but different rating procedures,” Kerridge says.

Although many carriers now offer some level of online capability for commercial customers and prospects, the level of functionality varies greatly, according to Mike Bondura, insurance practice director at The Nolan Co. “Some commercial lines insurers end a very abbreviated quoting session with only the identify of an agent to contact, some end a more thorough quoting session with the promise of a return phone call or email, while the leaders in this capability return an actual quote with varying levels of choices and follow-up service available for the customer who wants to make a purchase,” Bondura says.

Online agency insureon represents over a dozen insurers, using rules to guide the underwriting process, determine viable markets, and present bindable quotes. Company CEO Ted Devine says that the ability to present a firm price is essential to succeed in the online space.

“There’s nothing more frustrating to a small business than filling out 20 questions to get a quote for a BOP but having no idea if any carrier even wants the business. When we quote a price, we know the market wants the business,” he says.

That confidence comes from a custom-built technology platform that combines several key components. At the hub is a data warehouse that serves as what insureon calls the “universal application,” housing all the sets and subsets of criteria and specific questions that correspond to as many as 1,000 different business types multiplied by as many different markets as insureon has available for each type.

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A custom-built UI, which insureon terms the “configurator,” presents questions customized to each prospect. For instance, selecting “restaurant” as a class of business will generate follow-up questions about type and size, hours of operation, and percentage of alcohol sales. “As soon as you begin making choices, the application is identifying and narrowing the number of markets that want that type of risk” Devine says.

Aids help guide business owners through the quote process. For instance, hovering over a keyword may launch a popup window with a definition, pictures of different examples, or video links. When the application is complete, XML data streams are sent to carriers’ rating engines to return pricing.

As a final step, before a business owner commits based on a quoted price, an insureon agent calls to review details.

“We’re very particular about getting the underwriting right, putting the right data in, and talking to the client for at least five minutes before they buy,” Devine says, adding that the company targets uses a “shot clock” for call center staff with the goal of making a call within minutes. Prospects can also ask to chat at any time during the quote process.

Insureon is growing its business at a 30% annual rate and is also earning revenue from other agencies that have chosen to use its technology platform on a whitelabel basis.

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Finance Q1 P&C performance deteriorates; A.M. Best charts, analysis show why July 15, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/07/15/q1-pc-performance-deteriorates-am-bestcharts-anal There were still positive signs for the U.S. property and casualty industry during Q1 2014, but financial performance was not as robust as the same period in 2013 as weather losses mounted and the pace of rate increases slowed.

The good news for carriers: the industry managed an underwriting profit for the fifth consecutive quarter (Q4 2012, when Superstorm Sandy struck, remains the last time the industry reported an underwriting loss), and rate increases, while moderating, remained in place for most lines, according to an A.M. Best Q1 Financial Review.

The industry posted Q1 net income of $13.9 billion, down 39.8% from Q1 2013. Underwriting income was $2.2 billion, a 67.1% drop compared to Q1 2013.

Catastrophe losses, which A.M. Best defines as an industry event that causes $25 million or more in insured property losses, climbed to $1.8 billion compared to $772 million in Q1 2013. The report cites the impact of the Polar Vortex this past winter as a primary driver of the losses.

All told, cat losses added 3.4 points to the industry’s Q1 combined ratio, compared to 2.1 points the year before. The 2014 Q1 combined ratio was 96.4, up from 92.7, A.M. Best says.

Net premiums written grew, but more slowly in Q1 2014 (2.7%) than in the same period the year before (4.6%). Direct premiums written grew 3.8%, compared to 5.3% a year ago. A.M. Best says, “Growth rates have declined across the board, with premium reductions accelerating sharply in the accident and health line.” In workers’ comp, A.M. Best says DPW grew 5.4%, compared to 11.1% in Q1 2013.

Explaining the slower premium growth, A.M. says it believes “market conditions are becoming more competitive, driven by reinsurance capacity, capital availability and customer resistance to price increases, particularly in more desirable classes and for more desirable insureds.”

International construction, P&C rates fall as capacity, competition remain high July 15, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/07/15/international-construction-pc-rates-fall-ascapaci Commercial-insurance buyers for international construction and some property and casualty coverages are seeing rate reductions of up to 30% through the first half of 2014, thanks to overcapacity in the marketplace.

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A Willis Group Holdings report, “Willis Q3 2014 Construction, Property & Casualty Market Review,” says benign loss activity combined with a softening global reinsurance market that is having a trickledown effect in the primary market are pressuring rates.

For international construction, Willis says a reduction in construction projects in many parts of the world has intensified competition. Additionally, insurers are not withdrawing from the market, leaving capacity at an all-time high, creating an environment for more favorable rates for buyers.

Willis also says the international P&C insurance market “continues to witness an influx of capital.

Provided that detailed risk information is available, carriers are prepared to offer insurance buyers improved coverage, particularly improved contingent business interruption extensions.”

For property, Willis says premiums are continuing to decrease by between 10% and 15% on claimsfree business. Buyers who “clearly demonstrate robust risk-management practices and detailed risk information” can see larger reductions, Willis adds.

James Nicholson, head of Broking and Industry Practice Groups for Construction, Property and Casualty at Willis, says in a statement, “Our view is that soft-market conditions are likely to continue without necessarily threatening the profitability and solvency of carriers, provided that they actively manage their portfolios. For their part, corporate-insurance buyers can achieve substantially better than average pricing through the provision of good underwriting data, the use of analytics to drive pricing and through strong relationships with carriers. The outlook therefore remains very favorable for corporate buyers and more particularly for the well-informed.”

Aspen releases preliminary Q2 results, trades letters with Endurance over hostile bid July 11, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/07/11/aspen-releases-preliminary-q2-results-tradeslette Aspen Insurance Holdings announced some preliminary Q2 financial results and alerted shareholders in a letter as the specialty insurer/reinsurer continues to make its case against a hostile bid from Endurance Specialty Holdings.

The letter to shareholders, dated yesterday and signed by Chairman Glyn Jones and CEO Chris O’Kane, states, “As you may have seen, this afternoon your company, Aspen Insurance Holdings Limited, reported strong preliminary financial results for the second quarter….”

It also restates Aspen’s opposition to Endurance’s bid and asks shareholders to sign blue revocation cards.

The letter adds, “Our continued strong performance during the second quarter–following an excellent first quarter–clearly demonstrates the continued benefits of the strategic investments we have made in our business and the strength of our plan to drive shareholder value.”

The Aspen letter follows a letter from Endurance sent to Aspen shareholders earlier that same day criticizing Aspen’s standalone plan.

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“Don't be fooled by Aspen's dubious assurances about its ‘standalone plan,’” the Endurance letter, signed by Chairman and CEO John Charman, states. “Under the stewardship of its current board and management, Aspen's performance has lagged that of Endurance across key metrics, including underwriting profitability (i.e., combined ratio), diluted book value per share growth and share price performance. Despite the efforts of Aspen's board and management to distort the truth and confuse shareholders, there is no denying the facts….”

The letter adds charts showing side-by-side performance metrics based on company results.

Aspen’s letter, though, disputes Endurance’s contentions, stating, “In a letter filed publicly this morning, Endurance made a number of erroneous and ill-informed claims about Aspen’s business, which underscores our deep concern about their failure to understand the significant dis-synergies that would result from the misguided transaction they are proposing.”

It includes side-by-side comparisons of its own on certain metrics. For example, Endurance’s letter shows a favorable combined ratio in comparison to Aspen, while Aspen’s letter contends its accident-year combined ratio, excluding the impact of reserve releases, compares favorably to Endurance.

As for its Q2 preliminary results, Aspen says it expects: •

Diluted book value per share of between $44.60 and $44.80; up 4.4% to 4.9% from the end of Q1.

•

Diluted operating earnings per share between $1.30 and $1.35.

•

Diluted earnings per share between $1.70 and $1.75.

•

Gross written premiums between $775 and $780 million.

•

Combined ratio between 90 and 91 or 89 to 90, excluding bid defense costs.

•

Net favorable reserve development equating to between 4.5 and 5.5 combined-ratio points.

•

Annualized operating return on equity between 12% and 12.8%

•

Annualized net income ROE between 16% and 16.8%

A UBS analysis of Aspen’s preliminary report comes with the title, “The Best Defense is Good Earnings,” and notes the expected operating ROE of 12% to 12.8% exceeds Aspen’s target of 10% for the full year of 2014.

The UBS analysis says the improved ROE and higher book value per share may pressure Endurance to again raise its offer.

UBS says, “Strategically, we continue to believe a combination of [Aspen] and [Endurance] makes sense given the benefits of a larger balance sheet (particularly in the increasingly competitive reinsurance business), and the capital and expense efficiencies that would likely be generated. We continue to believe that a fair takeout value for AHL is in the range of 1.2x – 1.3x fully diluted BVPS, or $53 - $58 per share taking into account [Q2] results.”

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Progressive profit declines as investment gains narrow July 10, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/07/10/progressive-profit-declines-as-investmentgains-na Progressive Corp., the fourth-largest U.S. car insurer, said second-quarter profit fell 9.6% as investment gains narrowed.

Net income dropped to $293.4 million, or 49 cents a share, from $324.6 million, or 54 cents, a year earlier, the Mayfield Village, Ohio-based company said today in a statement. Operating profit, which excludes some investment results, was 45 cents a share, missing the average 49-cent estimate of 17 analysts surveyed by Bloomberg.

Innovations that helped Progressive in the past, such as allowing clients to do more business through smartphones, are no longer drawing as many policyholders, according to Paul Newsome, an analyst at Sandler O’Neill & Partners. Chief Executive Officer Glenn Renwick also faced resistance from potential customers to technology that allows the company to track driving behavior and offer better rates to the safest motorists.

“The biggest issue is that they really haven’t had a major change in the last decade,” Newsome said in a phone interview before the results were released. “It’s really about 10 years ago when they had really rapid premium growth.’

Progressive’s stock fell 3.7% this year through yesterday to $25.19, compared with the 1.4% gain by the seven-company Standard & Poor’s 500 Property & Casualty Insurance Index. Renwick reports results monthly and had previously announced earnings for April and May. Policy Sales Policy sales rose 5.5% to $4.63 billion, from $4.39 billion in the same period in 2013. That compares with year- over-year growth of 6.2% in last year’s second quarter.

Realized investment gains narrowed to $40.4 million from $132.9 million during last year’s second quarter when the company benefited from changes in values of derivatives and the sale of investments including preferred stocks.

The insurer had an underwriting profit of 7.4 cents on every premium dollar, compared with 6.7 cents in last year’s second quarter. Progressive said natural disaster claims increased by 57% to $130 million, including costs from storms in Texas and Florida.

Progressive increased advertising spending by a greater dollar amount than other U.S. propertycasualty insurers last year as Renwick sought to attract customers, according to data compiled by SNL Financial. Spending climbed 13% to $595.4 million. The biggest advertiser is Geico, the secondlargest U.S. auto insurer.

Customer Demand Progressive and Geico have focused on direct sales through the Internet, while State Farm Mutual Automobile Insurance Co., the largest U.S. auto insurer by sales, and No. 3 Allstate Corp. traditionally relied more on agents.

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Our customers ‘‘bought online, they pay online, and they want to report their loss online,” Tricia Griffith, Progressive claims group president, said during an investor presentation in May. “This is the investment we will continue to make based on the fact that our customers have told us they need it.”

Swiss Re to Buy Chinese Insurer Sun Alliance July 03, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/07/03/swiss-re-to-buy-chinese-insurer-sun-alliance Swiss Re Ltd., the world’s second-biggest reinsurer, agreed to buy a Chinese unit of the U.K.’s RSA Insurance Group Plc as it shifts capital to regions with higher premium growth prospects.

The company, based in Zurich, is buying Sun Alliance Insurance (China) Ltd. for 71 million pounds ($122 million), according to a statement today. The acquisition, which is subject to regulatory approval, will enable Swiss Re to offer corporate insurance directly from mainland China.

Swiss Re is expanding in faster-growing markets such as China, Indonesia and Brazil to increase the portion of premiums from those regions to between 20% to 25% by 2015 from 18% last year, it said.

The company last year bought a stake in New China Life Insurance Co. for about $493 million, and a holding in Brazilian insurer Sul America SA for $334 million. In October, it invested as much as $425 million in Hong Kong billionaire Richard Li’s FWD Group.

“Growing wealth and increasing urbanization are key drivers for a continuing demand” for insurance and reinsurance products in “high growth markets,” Swiss Re said in the statement. “With the overall outlook for these markets remaining intact, the growth rate for premiums is expected to stay at around 8% per year.”

Related Swiss Re Unit Agrees to Buy HSBC Life U.K. Pension Business Swiss Re Ltd., the world’s second- biggest reinsurer, agreed to buy the U.K. pensions business of HSBC Holdings Plc for...

That’s more than double the 3% premium growth rate foreseen in mature markets from 2013 to 2020, according to a presentation on the company’s website.

Shares Rise Swiss Re rose 0.2% to 79.95 Swiss francs at 10:43 a.m. in Zurich trading, trimming losses this year to 2.6%. RSA climbed 0.1% to 474.6 pence in London. The stock has climbed 17% this year after dropping 27% in 2013.

Swiss Re said it’s “confident” it will reach a return-on-equity goal of 10% to 12% by 2015. It plans to invest $3 billion of excess capital by next year to grow its business and “a good bit” could be spent in high growth markets, Chief Financial Officer David Cole told reporters on a conference call.

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“That doesn’t mean we are going to turn down opportunities in developed markets,” Cole said. Swiss Re will look at ways to return money to shareholders if it can’t invest the capital at a return-onequity of 11%, he said.

RSA Strategy RSA, which also owns businesses in Hong Kong, Singapore and India, is selling non-core assets to bolster capital after three profit warnings in the fourth quarter and an accounting scandal in Ireland.

It sold a Canadian insurance broker to Arthur J. Gallagher & Co. in May and disposed of its eastern European units to PZU SA in April.

“We are continuing to evaluate further non-core disposals, some of which we expect to agree during 2014,” Chief Executive Officer Stephen Hester said in a statement.

The British insurer is looking to raise at least 300 million pounds from asset sales outside of its “core markets” of the U.K., Ireland, Canada, Scandinavia and Latin America in 2014, it said in February.

ING Raises $2.1B With NN IPO July 02, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/07/02/ing-raises-21b-with-nn-ipo NG Groep NV, the biggest Dutch financial services company, raised 1.54 billion euros ($2.1 billion) from the sale of shares in its insurer NN Group NV, the second-biggest initial public offering in Europe this year.

NN Group opened at 21 euros in Amsterdam, above the sale price of 20 euros, and traded at 21.64 euros as of 1:20 p.m. ING sold 77 million NN Group shares, it said yesterday. Including a conversion of 450 million euros in mandatory exchangeable notes under an agreement with three Asian investors, gross proceeds were about 2 billion euros.

The sale of 28.6% of NN Group, with operations in Europe and Japan, brings ING closer to the end of a restructuring program imposed by European Union regulators following a 2008 rescue from the Netherlands. It will use the proceeds to pay debt and further unwind into a bank and insurer.

“Today’s announcement marks a very important event for ING and underscores again that the company will soon complete its restructuring story,” Lemer Salah, an Amsterdam-based analyst at SNS Securities, said in an e-mailed report today. “We remain bullish on the stock given its numerous positive triggers and strong market position in Europe.”

JPMorgan Chase & Co., Morgan Stanley, Deutsche Bank AG and ING Bank managed the NN Group offering. It is Europe’s second- biggest IPO this year behind a sale by AA Ltd., according to data compiled by Bloomberg.

Market Value ING shares rose 0.4% to 10.53 euros, giving the company a market value of 40.5 billion euros. The Stoxx Insurance 600 Index, a gauge of 38 European insurers, rose 0.6%.

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ING had said that it would offer 70 million NN shares for 18.50 euros to 22 euros apiece. It increased the offering to meet “significant investor demand,” according to a statement yesterday. The offer price values NN at 7 billion euros.

NN was the biggest life insurer in the Netherlands, based on 2012 gross written premiums, and the largest provider of mandatory pensions in Poland and Romania, according to a prospectus published on June 17.

Operating profit before taxes in the ongoing businesses was 905 million euros last year and 295 million euros in the first quarter. NN plans to expand earnings on that basis by 5% to 7% on average in the medium term and pay a dividend of 40% to 50% of the result from 2015, according to the document. The firm plans a first 175 million-euro payout to shareholders over the second half of this year.

“We do have a unique feature which is a combination of cash generating and growth businesses, and asset management activities.” NN Chief Executive Officer Lard Friese told reporters today. “We believe that gradually the European macro- economic backdrop will improve.”

ING’s Stake ING’s ownership may shrink to 68.1% if underwriters fully exercise an option to buy as many as 11.6 million additional NN shares, the firm said yesterday.

The company, led by Chief Executive Officer Ralph Hamers, agreed to sell more than half of NN by the end of next year and complete the disposal of its entire global insurance operations by the end of 2016. To do that, it will also have to unwind a remaining stake of about 43% in Voya Financial Inc. in the U.S. ING, which will continue as a Europe-focused bank after the restructuring, said on June 27 it sold a remaining 10% stake in Brazil’s Sul America SA through a block trade for about 170 million euros.

The Dutch government came to the rescue in 2008 with a 10 billion-euro capital injection after ING was hit with losses on assets backed by U.S. mortgages during the financial crisis.

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Technology Report highlights the complexity of the cyber insurance market July 11, 2014 | Live Insurance News http://www.liveinsurancenews.com/report-highlights-complexity-cyber-insurance-market/ A new report from Crawford & Co. shows that the cyber insurance market is becoming increasingly complex. The frequency and complexity of claims is one of the primary challenges facing this market currently. Insurers are typically well suited to address the potential risks that exist in any given market, but the advent of technology has changed many things in the world. The insurance industry has not yet had enough time to fully understand digital risks and how to address them effectively.

The average business in the UK suffers from 70 new malware attacks every day The report notes that in the United Kingdom alone, the average company is falling prey to 70 new malware infections on a daily basis. As more businesses become aware of digital threats, the demand for cyber insurance is beginning to rise. The problem, however, is that policies that address the full spectrum of cyber attacks and other issues are scarce. The lack of policies that are able to protect businesses has left the insurance market somewhat lacking.

The insurance industry has a lot of growing up to do in the digital space The report suggests that the insurance industry, as a whole, is in a sort of “infancy stage� in its response to digital threats. Insurance companies are still trying to figure out how to gauge the risks of the digital world and what impact these risks can have on the physical world. For businesses, these risks are somewhat clear, in that they involve financial damage and a souring reputation with consumers. How insurers can mitigate this damage, however, is a more complex issue.

Cyber attacks are unpredictable, making it difficult for insurers to gauge risks and respond accordingly One of the reasons cyber attacks are not well understood by the insurance industry has to do with their ever evolving nature. These attacks are very similar to natural disasters in their unpredictability. Natural disaster can be predicted to some degree, however, based on various climatic patterns. Cyber attacks cannot be predicted because they are often directed by human action, which can be much more spontaneous than weather.

How Prioritization Technology Boosts Conversion Rates July 10, 2014 | Insurance and Technology http://www.insurancetech.com/architecture-infrastructure/how-prioritization-technologyboosts-con/240168653 It’s easy for salespeople to lose clients in the midst of multitasking and lead sorting. Kanopy Insurance, a personal lines business that provides coverage throughout California and New Jersey, leverages automatic prioritization software from Velocify to improve task management for salespeople and increase its customer base.

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“Prioritization, to us, is of paramount importance,” says Kanopy co-founder and president Ryan McClintock, whose business receives about 300 leads per day. “It’s difficult to manage that volume of lead flow in a very fast and persistent way,” he says.

Kanopy’s leads are acquired online and immediately integrated into the Velocify software. The system provides a centralized holding space for lead data, determines which salespeople are logged in and whether they’re busy, and assigns each lead to an available representative in real time. An immediate connection to potential customers is key, McClintock explains, as they are less likely to purchase from companies who do not reach out first.

Prioritization software helps formulate sales strategy by indicating which leads should be contacted, says McClintock, and personalizing contact attempts according to where each lead is in the sales process. The system enforces a persistent follow-up strategy by sending tailored emails and text messages, which potential clients may opt out of. It also determines when to stop contact with unresponsive leads.

“Sometimes people are put off by all our effort … some people really appreciate it,” he explains.

“We’re constantly trying to figure out where we’re reaching the point of diminishing returns.”

Kanopy launched the advanced version of Velocify’s prioritization system the day it opened in November 2012, about two weeks after the start of implementation. There was no pushback from employees, most of whom came from insurance backgrounds and were accustomed to older technology.

The system is simple and intuitive for end-users, says McClintock, but large data stores and customization capabilities steepen the learning curve for administrators. Data is critical to Kanopy’s business optimization strategy, and the wealth of data contained in the prioritization system can help improve marketing performance and cost-effectiveness. Consumer-targeted emails and databases are constantly being adjusted as more data is added and leads are converted into paying customers.

“It’s constantly trial and error,” McClintock says of Kanopy’s sales strategy. “It’s just a matter of being more organized, being more focused and following a methodology that we know works.”

Rising hail claims raise questions for insurers July 07, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/07/07/rising-hail-claims-raise-questions-for-insurers On average, the NOAA’s National Weather Service receives approximately 10,000 to 12,000 hail reports a year. In 2010, the service stopped reporting hail smaller than 1 inch in diameter because little damage is usually associated with hail of this size. According to The Hail Reporter, within the contiguous 48 states, most states have an average of 120 reports a year involving hail greater than 1 inch in size.

Where the hail falls matters more than the actual size, since 1-inch hail in a metropolitan area like Chicago or New York will do far more damage than larger sized hail that falls in a more uninhabited area like Montana. The National Insurance Crime Bureau (NICB) found that Texas led the country in hail claims from 2010-2012 with 320,823. Rounding out the top 10 states with hail claims during that period were Missouri, Kansas, Colorado, Oklahoma, Illinois, Tennessee, Indiana, Arizona and Kentucky, with a total of almost 1.3 million claims.

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Texas also led the nation in the number of questionable claims for hail from 2010 through 2012 with a total of 1,053 claims or 28% of the U.S. claims. Texas, Illinois, Colorado, Arizona, Oklahoma, Missouri, Georgia, Minnesota, Louisiana and South Carolina, comprised 76% of the questionable claims during this period with 2,915. Referral reasons identified for the questionable claims included hail damage, vendor fraud, catastrophes (hurricane, tornado, wind, fire), prior loss or damage, and inflated damage figures.

The increasing number of fraudulent hail claims creates a number of challenges for adjusters and catastrophe managers as they work to differentiate legitimate claims from fraudulent ones. A number of new technologies allow insurers to track a hail event and analyze its impact on a particular area. Among these are: DamageRecon from Donan which analyzes hundreds (sometimes thousands) of sampling points collected from various sources on the ground following a hail event and uses a proprietary algorithm to determine what size hail fell in a particular location. The data, which is known as “ground truth,” is used to create a critical analysis feature called HailTruthTM, which details the hail sizes and the likelihood of damage for an area being investigated.

Dynamic Weather Solutions, Inc. (DWS) provides a OneSiteTM Report that includes hail size; storm speed, direction, length and intensity; as well as latitude, longitude, elevation and value and other storm details, usually within 30 minutes or less of the storm. DWS captures, stores and analyzes the data every five minutes from NOAA’s 150 NEXRAD radars.

CompuWeather HailTrailTM offers three reports: a Site-Specific Hail Analysis Report provides exact locations over a 24-hour period and is used to determine whether or not damaging hail was present.

The Vicinity Hail Search Report allows insurers to search for hail reports for any period of time within 25 miles of a requested location and provides details such as date, time, report source, hail size and the like. The Hail and Wind Analysis provides peak daily wind speeds, maximum sustained winds and gusts.

Better technology means that insurers are able to close claims faster and that insureds can have repairs made sooner, which translates to higher satisfaction and retention rates. For insurers, the advantage of forensic information means that fewer questionable claims are paid. “Clients call us because they need an expert to gather data, analyze it and draw conclusions that stand up to scrutiny. That’s what forensic investigation is all about and that’s what we’re bringing to the forensic weather industry with DamageRecon,” explains Lyle Donan, president and CEO of Donan.

Today’s hail technology provides critical data in a timely manner and reduces the number of fraudulent claims for insurers, resulting in savings for policyholders and insurers alike.

Telematics could have a major impact on the auto insurance sector July 03, 2014 | Live Insurance News http://www.liveinsurancenews.com/telematics-major-impact-auto-insurance-sector/ Juniper Research, a prominent market research organization, has released a new report concerning the growing popularity of telematics in the transportation sector. Telematics is a branch of technology that is meant to keep track of a person’s driving habits and vehicle information. This technology has become particularly popular in the auto insurance sector, where insurance companies are offering new services designed to promote safe driving and provide consumers discounts for practicing safe behavior.

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Use of in-vehicle applications is expected to skyrocket in the coming years as automakers develop new, mobile friendly vehicles According to the report from Juniper Research, the number of in-vehicle applications in use is expected to reach 269 million by 2018. The growth of in-vehicle apps is likely to be fuelled by the growing number of vehicles being released that make use of such applications. The auto industry is working to make its vehicles more mobile friendly through the support of various applications.

Vehicles that will be released in the coming years will make use of a variety of applications and telematics technology.

App integration may have a profound impact on the monetization of vehicles and the way these vehicles use mobile technology The report suggests that app integration will have a “profound effect” on the monetization of vehicles and mobile technologies. Revenue is expected to drop somewhat, but new apps will allow automakers to comply with new regulations that are being introduced around the world, such as Brazil’s Contran 245 regulation. This particular regulation is focused on fighting theft, requiring all vehicles to be equipped with some type of telematics technology so that they can be tracked effectively.

Telematics could revolutionize the way auto insurance companies provide services to policyholders The growing prevalence of telematics is also expected to have an impact on auto insurance. As this technology becomes more widely used, the cost of auto insurance policies is likely to fall to some degree. Some insurers already offer products that are based on the use of telematics, providing policyholders with significant discounts if their telematics systems can show that they are safe drivers.

Lessons Learned from 1,000 Data Breaches…and Counting July 01, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/07/01/lessons-learned-from-1000-databreachesand-countin Do you know your enemy? Are you fighting the wrong war? Despite everything you’re read about cyber security, despite all the breaches in the news, the fact is well-intentioned business people are still surprisingly behind the times.

Thieves and hackers are by no means the main cause of data breaches. Cyber security is just one element—because physical records, paper and files, continue to play a major role. And too few managers understand that they remain responsible for lost information—even if no one’s noticed it’s been lost or taken advantage of the breach.

What does this tell you? Cyber security is just one part of the equation. Breaches happen many ways. And it could be companies are fighting the wrong war. They’re focused exclusively on protection, on encryption and firewalls for example, when they should be considering what to do after the systems are breached.

My work, my company Beazley, isn’t mainly in the business of preventing breaches. Instead, and perhaps more relevant today, we’re the people who help companies survive them. We’ve resolved over 1,000 cases in the last five years.

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Let me tell a few illustrative stories—and some interesting lessons to be learned.

An angry client of a large, prestigious law firm broke into their offices and stole all their hard drives.

They had a great encryption system, powerful fire walls, all the latest data security software. None of that made a whit of difference; they were breached anyway.

A multi-state health provider sent a free wellness magazine to its older members. They loved it. But one month their printing system got the mailing labels wrong—each one contained not just the member’s address but their patient ID as well—and thoseincluded their social security numbers.

Outside contractors remodeling an office disposed of some old file cabinets. Unfortunately, scores of old computer backup tapes were stored inside them. Did bad actors get hold of the data? Was anybody hurt? No, it was only an accident. But the company was, nevertheless, responsible. They had to search for the tapes in a land fill and notify thousands of customers.

Thieves posing as employees of a recycling company worked their way up the Eastern seaboard removing X-rays from hospital radiology labs. Their plan was to retrieve and sell the silver in the films. The problem was the X-rays were marked with patient data, names, addresses, date of birth and social security. The crooks were not identity thieves. They weren’t after the data. But thanks to HIPAA rules, the hospitals had to navigate around hefty fines.

A doctor was in the habit of motorcycling to work. One day his briefcase came open. He arrived safely at his office, but hundreds of patient records were scattered three miles behind him.

One company’s security system was so complete that they guarded their data against their own employees. Staff had to type in secret codes to get information using special terminals with security cameras watching everything over each one. An insider, however, was stealing employee identities.

She stood behind friends while they looked up data and memorized the information.

What are the lessons?

The first one is that accidents are behind more data breaches than hackers. There are plenty of crooks out there, but your own innocent employees mislay more data. The second lesson is this isn’t only an information systems problem. Pieces of paper, devices and hard-drives, X-ray films and even mailing labels can be vulnerabilities. A third lesson is that thieves come in all manner of disguises.

They’re not just digital wizards in Russia; they’re maintenance men or angry clients or a fellow worker looking over your shoulder.

The last, most significant lesson is that you’re responsible. Thanks to HIPPA rules, legal decisions, state and federal regulations, if important data disappears your company has the burden of recovering it and notifying those who might be harmed. It doesn’t matter if it was an accident, if no injury resulted, if you didn’t even know there was a breach or what went missing.

And that brings us to data breach insurance. It really has two parts. The first part is traditional insurance – to protect your company against potential losses. You need a broad, well-crafted policy, with coverage and limits to address the full variety of claims arising out of your company’s underlying exposures. (There are several ways of setting limits—and we’ve found that a per-person basis, up to, say, two million or five million records—gives us a better way to define the risk.)

The other part of data breach insurance has the characteristics of a service. In the event of a breach, we provide—and pay for—the IT forensics experts, the specialized legal help, the PR consultants and the notifications services you need when there’s a complex breach. The vendor is there to advise you and walk you through the steps, because, believe me, this isn’t something you want to learn while you’re going through it.

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The good news is there’s a lot that you can do to mitigate the damage. It’s in your hands and if your response is sound no liabilities may follow.

And so what happened to the companies in the stories? Our IT experts tracked down what the law firm lost—and we helped notify their clients. We worked with the company that lost its backup tapes. They were never found, but thanks to us their liabilities were covered. For the mailing labels, we know how to notify the readers. For the hospitals with the missing X-rays we supplied expert IT specialists—because some of them had no index for their records. We identified and notified the patients of the motorcycling doctor. We helped find the insider who was memorizing information-— and, even more difficult, we identified the people whose identities she stole.

Data breaches are, unfortunately, a part of doing business. No matter how well you’re protected they will happen. It isn’t “if”; it’s “when.”

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Strategy Senate agrees to add NARAB to TRIA bill, but with a sunset provision July 15, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/07/15/senate-agrees-to-add-narab-to-tria-bill-butwith-a Congress would be required to re-vote several years down the road on whether to sustain enactment of legislation creating a clearinghouse aimed at streamlining agent licensing, according to Senate legislation.

An agreement by the Senate leadership clearing the way for a vote today or Wednesday on legislation reauthorizing the Terrorism Risk Insurance Act (TRIA) for seven years allows a vote on an amendment that will establish the National Association of Registered Agents and Brokers (NARAB).

However, as the price for allowing the amendment to be added, Sen. Tom Coburn, R-Okla., insisted that a provision be included sunsetting NARAB two years after enactment.

Sen. John Tester, D-Montana, is sponsoring the NARAB amendment to the TRIA bill.

According to an industry lobbyist, Coburn last week threatened to hold up the entire TRIA bill if NARAB was offered.

The lobbyist said that Sen. Charles Schumer, D-N.Y., negotiated with Tester and Coburn and came up with a two-year sunset. But the clock on the sunset won’t start ticking until the first license is issued, the lobbyist said. Moreover, the lobbyist said, it will probably take two years to get the program up and running.

An industry lawyer familiar with the bill said the requirement of the sunset provision is not necessarily fatal to the program.

Another official said, “Certainly it is our hope that the House and the Senate will ultimately agree, and NARAB will be created without a sunset.”

But this official added, “This agreement ensures that NARAB will be attached to the Senate [TRIA] bill, just as we now have assurances that NARAB will be attached to the House bill.”

The lawyer added, “Getting it up and running is the important thing. Once it gets going, it will prove itself.”

Indeed, another lobbyist said, “There is very strong, bipartisan, bicameral support for NARAB.” The overall bill is S. 2244, the Terrorism Risk Insurance Program Reauthorization Act of 2014.

The bill extends the TRIA program in its current form for seven years, but does increase industry coshares by one-third under a five-year phase-in period.

Legislation creating NARAB was reported out by the House Financial Services Committee without the sunset provision June 20. The House bill including establishment of NARAB is H. R. 4871, the TRIA Reform Act of 2014.

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The NARAB legislation is modeled after the National Association of Securities Dealers (NASD). On a purely voluntary basis, agents and brokers can apply to NARAB for membership. Upon meeting the NARAB criteria, they can use the agency essentially as a “passport” system for multi-state licensure.

NARAB’s membership criteria will be established by a board that is dominated by state insurance commissioners.

“The big concession we’ve made is on governance—that a majority of the governance has to come from state insurance commissioners,” one lobbyist involved said.

Only 46% of small businesses have capital to execute growth strategy--and banks aren't lending July 15, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/07/15/only-46-of-small-businesses-have-capital-toexecut It's a common trope in today's economy: small businesses are driving economic growth. For agents and brokers, small business comprises a significant portion of their commercial business.

Yet in a recent study conducted by Pepperdine University (2014 Private Capital Markets Project), while nearly 89% of the owners of small, privately held businesses are enthusiastic about executing growth strategies, only 46% report having the necessary capital resources to successfully execute them. Among the smallest businesses (less than $5 million in revenue) that sought bank loans in the previous three months, only 39% successfully secured a loan. It is also quite common for these small company owners to be turned down for loans and not know exactly the reasons why.

The report finds that the No. 1 reason why small business loan requests are rejected is the quality of the applicant's earnings or its cash flow. Other reasons include insufficient collateral, debt load, and size of the company.

What 'super consumers' can mean for the P&C market July 09, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/07/09/what-super-consumers-can-mean-for-the-pcmarket The P&C industry is facing a variety of challenges, including commoditization of products and the ease of shopping and switching, but insurers shouldn’t fall into the commodity trap.

How can they avoid it? Super Consumers are a powerful way for companies – especially those with customer “relationships” – to find growth opportunities. These Super Consumers, which The Cambridge Group identifies as the 10 percent of consumers in any given industry that account for more than 30 percent of revenues and more than 50 percent of profits, have become the rallying cry of a growing number of brands seeking growth.

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What’s the Power of Super Consumers?

They sit at the intersection of big spending and big passion, and that makes all the difference. It’s easy to envision passionate consumers in high-tech electronics, automobiles and even some food categories, but some struggle to see Super Consumers’ presence in the slightly less-sexy categories of, say, life insurance and auto insurance.

And yet, in our analysis, we have found that Super Consumers do exist in P&C insurance (and, in fact, even in life insurance). This top 10 percent of consumers buys significantly more insurance and more premium insurance. Insurance Super Consumers’ principal motivation is around proactively protecting their family and their broader assets. They strongly value customization to their specific needs, and they are powerful, profitable and yearning for providers who understand them.

Identify Your Super Consumers We found that two “flavors” of proactive consumers invest heavily in protecting their family and assets.

One is Strugglers – consumers who are fearful of things going wrong in a difficult situation – for example, damage to their property from floods. They are extremely interested in avoiding negative situations and value the peace of mind that comes from having protected their valuable assets.

The other group is Strivers – consumers who want to feel a sense of achievement. They feel good about taking care of their family and belongings. They are driven not so much by a fear of negative outcomes, but more by a positive feeling of accomplishment.

Because these Super Consumers are heavy users and also emotionally engaged in products, they are open to new products and services that appeal to the underlying need for protection.

Tap into Super Consumers in Six Steps First, find and measure the size of the Super Consumer segment in your portfolio. These are your best customers.

Unlock the cross-sell and incremental relationship building opportunity by understanding these consumers in your portfolio. If you go deeper, you find quickly that a life insurance Super Consumer is an insurance Super Consumer. They spend more than 40 percent more in annual premiums across all forms of insurance (e.g., auto, home, personal liability and long-term care). Super Consumers in any category present a great upsell and cross-sell opportunity – it’s easier to convince them to add protection to their current coverage than it is to acquire a new customer.

Create products and services that appeal to their unmet needs. We have found that presenting a range of innovative offerings, such as Allstate’s “Your Choice Auto,” allows these individuals to customize solutions to their needs, and they are willing to pay a premium – happily.

Use the right messaging to appeal to Super Consumers. Strivers, for instance, might respond to messaging that evokes the super hero with a cape.

Understand the implications for your channel: There is immense value in helping the sales force identify Super Consumers, proactively reach them and retain them. Depending on the needs of these consumers, one approach might be to create a direct channel for them.

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Maintain focus on these consumers to retain them and prevent them from “getting shopped� by competitors. Given their heavy involvement, some Super Consumers may have greater awareness of prices and products available in the market – making them at-risk of switching.

With the insights of this highly passionate and big-spending subgroup of consumers, insurers can rise above the commodity trap. Not only are Super Consumers a valuable source of revenue, but their enthusiasm and participation can drive innovative ideas and word-of-mouth advertising to other potential customers. Find your Super Consumers; it’s worth the effort to engage them and keep them.

Insurance industry is beginning to respond to evolving global market July 08, 2014 | Live Insurance News http://www.liveinsurancenews.com/insurance-industry-beginning-respond-evolving-globalmarket/ Insurance and reinsurance companies are beginning to re-evaluate their business models as prices begin to soften throughout the global market. Risks are beginning to evolve and new investors are beginning to power changes within the commercial insurance market. These changes are encouraging companies to change the way they approach their chosen market sectors in order to better accommodate demand and ensure their continued sustainability. Companies are also feeling a greater need to balance their exposure to certain risks, especially when it comes to catastrophe protection.

Global market sectors are beginning to soften, resulting in falling insurance prices While much of the insurance industry has been trying to protect themselves against growing risks related to natural catastrophes, reinsurance rates have begun to fall significantly. Natural disasters have always been very costly problems for the insurance industry and as these disasters become more frequent and damaging, insurers have begun to take steps to ensure that they are financial resilient against these events. In some cases, this involves breaking away from certain, risk-prone markets, or seeking out capital from new sources.

New capital providers are ensuring that there is no shortage of financial capacity despite a softening market New capital providers have become more plentiful in recent years, ensuring that several market sectors are brimming with financial capacity. This capacity adds some security to insurance companies, but insurers must still take steps to offer consumers relevant coverage and other services in order to remain profitable in a softening market. With prices falling throughout the industry, insurers that offer the most relevant coverage are likely to find the most success.

Insurance industry is beginning to see prominent changes throughout various sectors The insurance industry has been experiencing many changes in recent years, especially in the health care and catastrophe sectors. These changes are forcing insurers to change their business models in order to satisfy consumer interests. Many of the large insurance companies that have been driving up prices over the past several years have had to lower their prices recently in order to remain competitive with their smaller counterparts.

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World’s largest health insurance program to take form in India July 03, 2014 | Live Insurance News http://www.liveinsurancenews.com/worlds-largest-health-insurance-program-take-form-india/ The Indian government is planning to create the world’s largest health insurance program. A recent, significant shift in government has brought more attention to India’s health care sector, as well as other sectors. The new government is eager to address what it perceives to be problems in the country’s health care structure and will be working with the insurance industry in order to do so.

Prime Minister Narendra Modi unveiled plans for this ambitious program during a recent conference held in the U.S. New insurance program to take inspiration from the Affordable Care Act Modi aims to accomplish a “complete transformation” of India’s health care sector. The government is currently researching ways to accomplish this feat and is beginning to focus on introducing new technology and policies to the health care sector. In terms of health insurance, the government is planning to develop a universal system that dwarfs the Affordable Care Act and similar initiatives in scope. The Affordable Care Act will serve as a sort of inspiration, however, as the Indian government believes it has helped improve health care in the U.S. Swasth India allows doctors working in the US to travel to India and provide medical care One of the aspects that will make India’s health insurance program the largest of its kind in the world is an initiative called “Swasth India.” This program is meant to connect patients in India with Indian-born doctors working in the United States. It will allow doctors to choose where they want to work in India and when they would like to work. Patients will be able to schedule appointments to see these doctors and receive medical care.

India will face many challenges in building the world’s largest insurance program Building the world’s largest health insurance program will not be an easy task. There are several Indian agencies that are operating with bureaucratic bottlenecks that could make it difficult for people to receive insurance coverage and the medical care they need. Moreover, is insurance companies are unwilling to support the program, they may opt to reduce their business in India or leave the market entirely.

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