Grab launches free prolonged medical leave insurance scheme for its private-hire drivers

SINGAPORE – Ride-hailing platform Grab launched on Wednesday (Jan 16) a free medical leave insurance scheme for drivers who frequently use its service, in a move to protect them against a loss of earnings.

Mr Andrew Chan, Grab Singapore’s transport head, said the company has rolled out the scheme in a move to “push the boundaries in offering even more comprehensive support and benefits” for private-hire drivers on its platform.

“Drivers’ earnings is something we recognise as core to their livelihoods and families,” he added.

Currently, Grab offers a range of benefits, from fuel discounts to scholarship and bursaries, for drivers’ children.

The new scheme comes on the back of recommendations made by a tripartite work group on self-employed persons that the Government accepted in February last year.

It covers “the majority of Grab driver-partners for free”, a spokesman for Grab said, without providing specific figures on its fleet size.

Payouts are determined by how often private-hire drivers use Grab, their earnings and the duration of their medical or hospitalisation leave.

To qualify for the coverage, private-hire drivers had to have earned at least $1,214 through Grab, excluding the cash incentives that the company provides.

The scheme covers medical leave from the sixth day onwards, to a maximum of 14 days, and hospitalisation leave from the second day onwards, to a maximum of 60 days.

Drivers will be reimbursed between 50 and 85 per cent of their average daily earnings, within a range between $30 and $200.

Calculations are done based on their earnings from Grab for the past 90 days before they fell sick or injured themselves.

According to Grab’s website, the payout will take about 10 days after Chubb Insurance received the claim forms, if no additional documents are required.

Drivers who are not covered can sign up for another insurance scheme that the company will launch soon, the Grab spokesman said.

Mr Cedric Lim, a private hire driver on Grab’s platform, suggested that the insurance coverage will be more helpful if the duration for medical leave could be shortened to fewer than six days. 
Rent, which costs $125 a day, is his primary worry.

Mr Lim, 28, who drives a Mercedes E-class for Grab’s higher-end service, said: “When I’m sick, I’m concerned if my rental could be paid or not, not about my earnings for that day.”

A spokesman for its competitor, Gojek, said the company is “close to finalising partnerships with a number of… companies – including insurance and healthcare providers – to offer a comprehensive suite of welfare benefits for all of our driver-partners”.

More details will be released soon, he added.

A Deliveroo spokesman said its riders currently have accident insurance, which the food delivery service rolled out in May last year.

“Deliveroo would like to go further… and offer riders more benefits, but runs the risk of courts reclassifying riders’ employment status, which could reduce riders’ ability to work flexibly,” he added.

“Deliveroo is campaigning for a change in the law so that riders can have both flexibility and security.” 

Mr Ang Hin Kee, executive adviser at the National Private Hire Vehicles Association, said  “the move is a step in the right direction”. 

The association has been in “close consultation with Grab”, he added. 

“We hope more can be done so that eventually, all drivers can be protected with the (prolonged medical leave) insurance,” he said.

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Aberdeen Standard Investments takes US$13m minority stake in Singapore Life

SINGAPORE – Life insurance firm Singapore Life on Tuesday (Jan 15) announced its latest cash investment in a series of Series B transactions.

The Aberdeen Standard Investments’ (ASI) subscription of US$13 million (S$17.6 million) as a minority equity partner immediately follows the recent Aflac Investment of US$20 million, and brings the total capital raised to date to US$97 million.

“With this growth capital, Singapore Life is well placed to begin its expansion plans across South-east Asia and scale into new business technology ventures over the coming year,” it said.

Aberdeen, in a separate announcement, said that the investment extends its “strategic relationship” with Singapore Life beyond the management of its fiduciary assets, to participating in the long-term growth of the next-generation, digitally-focused insurer.

Singapore Life is the first fully digital insurer in Singapore.

Walter de Oude, CEO of Singapore Life, said: “ASI is a leader in insurance asset management who brings not only strong investment expertise and brand credibility, but also deep insight into the challenges facing insurers and their clients globally. We look forward to working together as we grow our footprint in Singapore and beyond, and deliver on digital first journeys to customers via cutting-edge technology.”

He added that bringing in “well-respected investors” such as Aberdeen and Aflac as minority shareholders also adds further credibility to its business model.

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Global natural disasters wreaked $217b in damage in 2018: Munich Re

FRANKFURT AM MAIN (AFP) – Natural disasters, including wildfires, hurricanes and tsunamis, inflicted US$160 billion (S$217.39 billion) of damage and claimed 10,400 lives in 2018, German reinsurer Munich Re said on Tuesday (Jan 8).

The financial toll was far below the US$350 billion (S$475 billion) recorded the previous year in a record hurricane season, the firm said in its annual reckoning, but above the 30-year average of US$140 billion.

As with the previous year, the United States suffered the heaviest losses from disasters globally, with its second record wildfire season in a row.

But it was given some respite from damaging storms, with the hurricanes hitting the country in 2018 inflicting far less destruction than in 2017.

Wildfires dealt US$24 billion of damage in California, while Hurricanes Florence and Michael accounted for a combined US$30 billion.

Just one blaze known as the “Camp Fire” killed 86 people and caused losses of US$16.5 billion in early November as it tore through the foothills of the Sierra Nevada.

As losses from wildfires have grown in step with increasingly frequent hot and dry summers, “many scientists see a link between these developments and advancing climate change”, said Mr Ernst Rauch, Munich Re’s head of climate and geosciences.

What’s more, “burgeoning settlements in areas close to forests at risk from wildfire” mean that “casualties and losses are immense”, he added.

Munich Re board member Torsten Jeworrek warned that “action is urgently needed on building codes and land use” to limit wildfire losses.

Looking to the human cost of catastrophes, the financial firm said the deadliest event was a Sept 28 tsunami that hit the Indonesian city of Palu, killing 2,100 people.

Munich Re highlighted that 2018’s natural disaster death toll was far below the 53,000 average for the previous 30 years.

“From a global perspective, measures to protect human life are starting to take effect,” the Bavarian company said.

Worldwide, the firm pointed to an unusual hurricane season last year as “named tropical storms in all northern-hemisphere ocean basins outnumbered the long-term average”.

Category-five “super typhoon” Mangkhut, also known as Ompong, killed 100 people when it struck the Philippines in September.

Jebi, just one of seven typhoons to strike Japan, dealt US$12.5 billion in damage.

Beyond the hurricanes, a second tsunami that struck the Indonesian islands of Sumatra and Java in December killed “at least” 400.

The tidal wave went undetected by early warning systems as it was caused by an underwater landslide rather than an earthquake.

Meanwhile, Japan suffered a further US$9 billion in damage from two earthquakes.

Europe was spared dramatic one-off disasters in 2018, but a long summer drought inflicted around US$3.9 billion in direct losses to arable and livestock farmers and slowed economies as rivers ebbed too low to be used for freight traffic.

The dry summer also contributed to violent wildfires in Scandinavia.

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HSBC gets regulatory nod to sell Malaysia insurance unit stake to FWD

HONG KONG (REUTERS) HSBC Holdings’ Asia Pacific insurance unit has received regulatory approval to divest its 49 per cent stake in the Malaysian life insurance joint venture to Hong Kong-based FWD Group, owned by tycoon Richard Li.

The deal to sell the stake in HSBC Amanah Takaful Malaysia Bhd has got the approval from the Malaysian central bank, and is expected to be completed in the first half of next year, the UK-headquartered lender said in a statement late on Thursday (Dec 20).

The financial details of the transaction were not disclosed.

“We have decided to exit the takaful manufacturing business and focus on our banking operations in Malaysia,” Stuart Milne, HSBC Malaysia unit chief, said in the statement, adding the bank would continue to distribute insurance products in that market.

Takaful refers to Islamic insurance products. In financial dealings, takaful firms follow religious guidelines including bans on interest and monetary speculation, and a prohibition on investing in industries such as alcohol and gambling.

Reuters reported in August that FWD had agreed to buy a 49 per cent stake in HSBC Amanah Takaful initially, with plans to ultimately own a majority by buying some shares from the existing partners.

Malaysia’s JAB Capital Bhd owns 31 per cent in the venture, while Employees Provident Fund Board of Malaysia controls 20 per cent.

A foray into the South-east Asian country by FWD will add to its Asian market footprint that already covers Indonesia, Japan, Singapore, the Philippines, Thailand and Vietnam.

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MS&AD ups stake in Swiss Re's ReAssure ahead of expected IPO

ZURICH (Reuters) – Reinsurer Swiss Re (SRENH.S) has agreed a deal with Japan’s MS&AD Insurance Group (8725.T) under which MS&AD will invest a further 315 million pounds ($398 million) into Swiss Re’s closed-book business ReAssure.

The deal will increase MS&AD’s stake in the British closed-book business to 25 percent from currently 15 percent, Swiss Re said on Thursday, as the world’s second-largest reinsurer prepare ReAssure for a possible initial public offering (IPO) next year.

“As we continue to work toward the potential IPO of ReAssure in 2019, the increase of MS&AD’s stake to 25 percent is a strong vote of confidence from our minority shareholder and long-term partner,” Swiss Re Life Capital head Thierry Leger said in a statement.

“We are delighted to have them as investors alongside us and together we remain committed to supporting ReAssure in its strategy of leading the way in UK life and pensions consolidation.”

Hit by a 17 percent fall in net profit for the first-half of 2018, Swiss Re in August announced it was exploring a possible 2019 listing for ReAssure on the grounds that the business needed access to new capital to acquire additional closed books.

ReAssure has about 45 billion pounds in assets under management and 3.3 million policies.

MS&AD and rival Japanese property and casualty insurers have been aggressively acquiring and investing in overseas assets as they seek to diversify their risk portfolio.

MS&AD in October 2017 said that by taking a stake in unlisted ReAssure it aimed to build know-how of the closed-book life business, where firms buy policy portfolios from other firms instead of underwriting new ones.

The deal between Swiss Re and MS&AD values ReAssure at 3.5 billion pounds, or $4.4 billion, but analysts have said ReAssure could achieve a market capitalization of about $3 billion, or roughly half its book value.

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Global regulators hold off designating 'too big to fail' insurers

LONDON (Reuters) – Global insurance regulators will suspend designating globally systemically important insurers, who are required to hold extra capital, in a victory for companies such as American International Group (AIG.N) and Prudential (PRU.L).

The International Association of Insurance Supervisors (IAIS) said it wants to replace the list of “too big to fail” insurers, last published in 2016, with a broader framework from 2020.

In the aftermath of the global financial crisis, regulators singled out systemically important insurers who then face onerous bank-like capital rules to cover potential losses, increasing costs and potentially reducing shareholder returns.

The industry has long argued it played no major role in the financial crisis and should not be treated in the same way as global banks, who must also hold extra capital.

Nine insurers featured on the list published in 2016: Aegon (AEGN.AS), Allianz (ALVG.DE), American International Group, Aviva (AV.L), Axa (AXAF.PA), MetLife (MET.N), Ping An Insurance (2318.HK) Company of China, Prudential Financial Inc (PRU.N), and Prudential in Britain.

It was not updated in 2017, and won’t be in 2018 either.

The IAIS said it was moving away from a “binary” approach of imposing extra measures on a small group of insurers to a “proportionate” application of measures targeted at the activities of insurers that lead to systemic risk.

It has proposed a new framework to come into effect in 2020, after which a decision would be made on whether the scrap the list altogether.

The industry has lobbied that regulators should focus on activities rather than issuing extra capital requirements simply because of a company’s size.

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U.S. annuities sales boom after fiduciary rule kicks the bucket

(Reuters) – U.S. annuities sales are booming months after the demise of a regulation that targeted the product, which had required that brokers put customers’ interests ahead of their own compensation.

Several U.S. insurers reported surging annuities sales when outlining third-quarter results in recent weeks. American International Group Inc’s (AIG.N) individual retirement business posted $3.6 billion in annuities sales, a 65 percent jump from the year-ago period. Lincoln National Corp (LNC.N) and Brighthouse Financial Inc (BHF.O) detailed gains of 61 percent and 43 percent, respectively.

The companies can thank the end of a Department of Labor regulation known as the fiduciary rule. Announced during the Obama administration, the rule required brokers to act in clients’ “best interest” when offering retirement advice, and inform them about commissions and other incentives they received for selling products like annuities.

Total annuity sales were $59.5 billion during the quarter ending April 30, according to Limra Secure Retirement Institute. Sales had not been as high since early 2015, just before the rule was being put in place.

But the rule effectively died in June, when the Trump administration declined to pursue a U.S. Supreme Court appeal that might have kept it alive. While the U.S. Securities and Exchange Commission and state regulators are working on their own versions, consumer advocates say they do not expect investors to be as protected, particularly when high-fee annuities are involved.

“It still permits egregious products and egregious sales,” said Barbara Roper, director of investor protection at the Consumer Federation of America, about the most recent draft of a National Association of Insurance Commissioners (NAIC) proposal.

In the most basic annuity, a customer gives a lump sum of cash to an insurer and receives a payment each month over a set number of years, sometimes for life.

Consumers can benefit from that kind of steady income during retirement, but problems often arise with complex products, like fixed-indexed or variable annuities, Roper said. Investors often do not understand the risks and costs, which can be hidden in the fine print, she said.

Fees for complicated annuities can be 4-9 percent of the principal, industry sources said.

The SEC is working on an investor protection rule it calls “Regulation Best Interest,” while the NAIC plans to meet on Thursday in San Francisco to smooth out differences among state regulators for a proposed model rule that other states could later choose to adopt.

New York moved ahead of other states in June by issuing a regulation that requires insurance agents and brokers to act in consumers’ best interest when selling annuities and life insurance. Although the New York State Department of Financial Services wants others to adopt the rule, which becomes effective in August 2019, the NAIC opposed some of the language.

Iowa Insurance Commissioner Doug Ommen expressed concern about using the term “best interest” because it could trigger litigation against insurers and agents, according to minutes of an August meeting.

The NAIC’s most recent draft of the rule would require insurers and agents to “act in the interests of the consumer” without placing their own financial interests first. It would not require them to recommend the best-priced products.

Birny Birnbaum, executive director of the Center of Economic Justice, said the draft does not go far enough. “There is nothing in the proposal that forces the consumers’ interest ahead of the insurers’ interest,” he said.

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Gang of insurance scammers jailed for fake claims on scale 'never seen before'

The organised crime group defrauded insurers out of £1m after making fake claims of property damages at bars and restaurants across England.

The five men, all in their 30s and based in north London, were caught after making a claim on a wine bar that did not have an alcohol licence.

After hitting 14 different insurers, it is the biggest case of commercial property fraud handled by City of London Police’s insurance fraud enforcement department (IFED).

The force said the scale of the investigation had “never been seen before in the insurance industry”.

Following a six-week trial, the five men were sentenced for a mix of conspiracy to defraud and money laundering offences.

:: Tarquinn Orgill, 34, of Cherrydown Avenue, Chingford, London, was sentenced to five years in prison. He was found not found guilty of money laundering charges.

:: Nyron Hughes, 35, of Cherrydown Avenue, Chingford, London, was sentenced to four years in prison

:: Ramone Carty, 36, of Janson Close, London, was sentenced to three years in prison

:: Kashif Bhatti, 35, of Wightman Road, London, was sentenced to two years in prison

:: Jurelle Hayles, 30, of Huntingdon Road, London, was sentenced to 20 months in prison, suspended for two years and 300 unpaid work

Hughes, Hayles and Bhatti pleaded guilty to conspiracy to defraud and money laundering, while Carty was found guilty of conspiracy to defraud and money laundering.

Orgill was also found guilty of conspiracy to defraud.

Police were alerted to the group’s scam after being contacted by insurers Zurich.

They had been suspicious of a claim they received for property damage and business interruption at a wine bar in Sleaford, Lincolnshire, caused by a burst water pipe.

The wine bar did not have an alcohol licence and was not open for trade prior to the claim.

After confirming that the claim against Zurich was fraudulent, the IFED went onto uncover several other instances of fraud carried out by the gang.

It emerged they had faked issues such as burst pipes at businesses in Lincolnshire, Bedfordshire, Staffordshire, Lancashire and London.

Some of the gang were identified through fingerprints left at the wine bar in Lincolnshire.

The gang gained £944,206 through successful claims.

Three of the gang, Hughes, Bhatti and Hayles, also pleaded guilty to defrauding American Express to the value of £62,497.

Detective Constable Daniel Dankoff, who led the investigation for IFED, told Sky News: “The scale of our investigation has never been seen before in the insurance industry and it is the largest commercial fraud organised crime group that our unit has identified to date.

“Insurance fraud is not a victimless crime. Fraudsters, such as the members in this organised crime group, cause significant financial harm to the insurance industry which then leads to higher premiums for everyone who need insurance, whether it be for personal or commercial cover.”

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