`Coalition to Insure Against Terrorism As Cost to Corporate Business is Taking Its Toll ‘

#AceFinanceNews- says back in November 13 2013 the Coalition to Insure Against Terrorism (CIAT) met together with a number of people to thrash out aspects of Terrorist Risk. This was a “Statement in Conjunction with House Financial Services Subcommittee Hearing on Terrorism Risk Insurance Act (TRIA)”

According to WASHINGTON, Nov. 13, 2013 /PRNewswire-USNewswire/ — The following letter is being issued on November 13, 2013, by the Coalition to Insure Against Terrorism (CIAT):

Attendees:

The Honorable Randy Neugebauer      The Honorable Michael Capuano

Chairman                            Ranking Member

Subcommittee on Housing &            Subcommittee on Housing &
Insurance                           Insurance

Committee on Financial Services     Committee on Financial Services

United States House of               United States House of
Representatives                     Representatives

Washington, DC 20515                Washington, DC 20515

Statement as Follows:

Dear Chairman Neugebauer and Ranking Member Capuano:

Thank you for convening this important hearing to further examine the Terrorism Risk Insurance Act (TRIA). CIAT is a broad coalition of commercial insurance consumers, formed immediately after 9/11 to seek a way to restore availability of commercial terrorism insurance for American businesses and the broader economy. CIAT’s diverse membership represents, among others, commercial real estate, banking, energy, construction, hotel and hospitality, entertainment, manufacturing, transportation, the major league sports, as well as public sector buyers of insurance including colleges and universities. CIAT is the true consumer voice on terrorism risk insurance, as we are comprised of the principal policyholders of commercial property and casualty lines of insurance in the United States.

CIAT strongly supports the TRIA program. For more than a decade, TRIA has made it possible for businesses to purchase the terrorism risk coverage they need at almost no cost to the taxpayer. TRIA brought stability to a marketplace that was severely paralyzed following 9/11, and it remains a critical component of ensuring economic continuity following another large-scale terrorist attack.

It is imperative that TRIA be extended beyond 2014. A recent study by Fitch Ratings concluded that it is “unlikely that substantial private market capacity would arise as a substitute” were TRIA to expire(1). Bloomberg Government’s analysis concurs, indicating “there is no reason to assume that reinsurers will re-enter the market if the TRIA program expires, and every reason to assume that the availability of coverage will fall.”(2)

We remember all too well what happens when terrorism coverage is not available: commercial borrowers lose their ability to get financing – or go into technical default on financing covenants, billions of dollars in real estate-related transactions stalled or cancelled, hundreds of thousands of jobs lost. Simply letting TRIA expire is not a realistic option.

Under TRIA, all insurance against terrorism risk is written in the private marketplace with no upfront federal liability. All losses recognized in the TRIA plan go first through the private insurance mechanism where much of the loss is retained by design. In the absence of TRIA, which ensures industry participation, the federal share of such a disaster could well be larger. TRIA replaces government exposure with private capital, since insurers retain the cost of all but the largest terror incidents.

As a coalition of primarily commercial entities, we instinctively prefer private market solutions. However, the unique characteristics of terrorism (e.g., adaptive, intentionally driven to inflict catastrophic damage, can strike anytime/anywhere, etc.), significantly hampers the reliability of traditional actuarial risk models, thus necessitating a program like TRIA. To this end, we believe one of the strengths of TRIA is the manner in which it utilizes the private insurance marketplace to manage terrorism risk – indeed, as mentioned above all exposure under TRIA starts with private insurance contracts and, due to both significant retentions and the recoupment mechanism, the ultimate risk-bearers under TRIA are the policyholders and the private insurers. We are always willing, however, to consider ways to further limit taxpayer exposure under the program,  which we know is your focus as well.

Overall, we support the current structure of TRIA and are wary of major structural changes. We are open to modifications so long as they do not have the effect of restricting the availability of terrorism insurance. The current retrospective pooling arrangement, nevertheless, has advantages over various “pre-funding” mechanisms because:

—  the retrospective pooling arrangement avoids the need to set
contribution rates based on some guess as to how much in terrorism
losses there will be
—  a pre-funded pool poses temptation to spend the funds on other purposes
—  the uncertain nature and timing of large terrorist attacks leads to the
risk that a pre-funded pool could be either insufficient or
over-capitalized

With respect to the various private sector retention levels under TRIA (i.e., the program trigger, insurer deductibles, etc.), we remain concerned that increasing these levels too much too quickly could restrict the availability of terrorism insurance. We understand, after all, that reinsurance capacity for even the existing retention levels under TRIA is limited.(3) This fact alone demonstrates that TRIA is not “crowding out” the private sector.

Lastly, reasonable measures to attract greater reinsurance and other private sector capacity to the terrorism insurance marketplace are to be encouraged. To date, however, we see no evidence that creative private sector capital alternatives such as CAT Bonds and insurance link securities are sufficiently developed to inject meaningful private capital into the terrorism insurance marketplace. Ultimately, it is important that Congress find ways to incentivize this without impairing TRIA to ensure that terrorism insurance remains available in the event that private sector capacity does not develop to the degree assumed.

We are committed to working with you as you craft a solution to extend TRIA beyond 2014, and we again thank you on your leadership on this critical issue.

Sincerely,

The Coalition to Insure Against Terrorism

American Bankers Association

American Bankers Insurance Association

ABA Securities Association

American Council of Engineering Companies

American Gaming Association

American Hotel and Lodging Association

American Land Title Association

American Public Gas Association

American Public Power Association

American Resort Development Association

American Society of Association Executives

Associated Builders and Contractors

Associated General Contractors of America

Association of American Railroads

Association of Art Museum Directors

Building Owners and Managers Association International

Boston Properties

CCMI Institute

Campbell Soup Company

Citigroup

CRE Finance Council

Cornerstone Real Estate Advisors, LLC

CSX Corporation

Emerson

Financial Services Roundtable

The Food Marketing Institute

Helicopter Associates International

Hilton Worldwide

Host Hotel & Resorts, Inc.

Institute of Real Estate Management

InterContinental Hotel Group

International Council of Shopping Centers

International Franchise Association

International Safety Equipment Association

International Speedway Corporation

Long Island Import Export Association (LIIEA)

Marriott International

Mortgage Bankers Association

National Apartment Association

National Association of Chain Drug Stores

National Association of Home Builders

NAIOP

NASCAR

National Association of Manufacturers

National Association of REALTORS

National Association of Real Estate Investment Trusts

National Association of Waterfront Employers

National Basketball Association

National Collegiate Athletic Association

National Council of Chain Restaurants

National Football League

National Hockey League

National Multi Housing Council

National Restaurant Association

National Retail Federation

National Roofing Contractors Association

National Rural Electric Cooperative Association

New England Council

Office of the Commissioner of Baseball

Public Utilities Risk Management Association

The Real Estate Board of New York

The Real Estate Roundtable

Securities Industries and Financial Market Association

Self Insurance Institute of America

Starwood Hotels and Resorts

Taxicab, Limousine & Paratransit Association

Union Pacific

University Risk Management and Insurance Association

U.S. Chamber of Commerce

U.S. Travel Association

UJA Federation of NYC

(1) Fitch Ratings U.S. Terrorism Reinsurance: Looming Uncertainty of Program Renewal, 1 (2013).

(2) Bloomberg Government, Extending Terrorism Insurance: The case is strong for maintaining a federal backstop in a market too risky for private sector alone, 5 (2013).

(3) According to Eric Smith of Swiss Re, “Based on the most recent estimate, the total amount of reinsurance capacity available for terrorism in the United States is approximately $6-10b — well below the $27.5b insurance marketplace aggregate retention under TRIA and the $34-35b cumulative insurer loss retentions.” The Terrorism Risk Insurance Act of 2002; Hearing Before the H. Comm. on Financial Services, 113th Cong. (2013) (statement of J. Eric Smith, President & CEO, Swiss Re Americas, at 4).

SOURCE  Coalition to Insure Against Terrorism (CIAT)

Coalition to Insure Against Terrorism (CIAT)

#ANS2014

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UK Government Says for Every £1.00 Spent on Investing in Broadband the Economy will Benefit by Twenty Times – True or False?

#AceFinanceNews – BRITAIN – May 17 – For every £1 the government is investing in broadband, the UK economy will benefit by £20, an expert report published recently revealed. 

The report also reveals that in addition to offering outstanding value for taxpayer money the roll-out of super-fast broadband nationwide will also make a real impact on the way we live – from working at home to watching TV content on-line.

UK Broadband Impact Study – Impact Report, by analysts SQW (with Cambridge Econometrics) says the government’s investment in super-fast broadband will deliver a major boost to the UK economy.

The study is the most in-depth and rigorous examination of the impact of broadband in the UK, and looks at the economic, environmental and social benefits of superfast broadband.

Key findings on the impact of the government’s broadband investment include:

  • excellent value for taxpayer money with a net return of £20 for every £1 spent by 2024
  • significant short-term boost to the UK economy as the network construction adds around £1.5 billion to the economy; adding £0.5 billion and about 11,000 jobs in 2014 alone
  • long-term growth to the UK economy with public investment increasing annual GVA by £6.3 billion and causing a net increase of 20,000 jobs in the UK by 2024
  • household savings of £45 million a year by 2024 made through people being able to work from home more
  • benefits to be shared across the UK, helping the rebalancing of our economy. Approximately 89% of the benefits will be in areas outside London and the South East of England with rural areas set to benefit most
  • around 0.4 million tonnes a year of CO2e savings through reduced commuting, business travel and firms shifting to more energy-efficient cloud computing. 

Secretary of State for Culture, Media and Sport Maria Miller said:

What this report shows us is that as well as superfast broadband being good for economic growth it will make even more of a positive impact on the way we live, helping us work more productively and get online faster.

Our broadband rollout is one of the best in Europe with almost three quarters of the UK able to access superfast speeds. This is making a real difference to people in communities across the UK from small businesses able to expand, school children being able to log on to do their homework or people being able to work from home. This investment in technology is vital for our future and will help Britain continue to compete in the global race and improve the way we live and work.

Dr Pantelis Koutroumpis, Research Fellow at Imperial College and Advisor of the Broadband Impact Report said:

Looking at the evolution of broadband speeds in different geographies, and the ongoing network deployments across the UK, this study brings new insights into the impact of improved broadband access on the national and local economies.

Notably, the added capacity particularly affects small and medium businesses across industries, while the intervention helps address a growing digital divide. This motivates further research in the future as more empirical data become available – for example, in the relationship between business speed increases and productivity growth.

#ANS2104

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The World’s Largest Companies: China Takes Over The Top Three Spots

#AFN2014 – China has grown but watch India as Modi takes charge!

Stop Making Sense

Liyan Chen reports for Forbes:

G2000 region pie chart 2014‘The FORBES Global 2000 is a comprehensive list of the world’s largest, most powerful public companies, as measured by revenues, profits, assets and market value. We weight the four numbers equally to come up with a composite score, in pursuit of our goal to best capture the full picture of corporate size.  This year, the Global 2000 companies hail from 62 countries, up from 46 in our inaugural 2003 ranking. In total, they raked in revenues of $38 trillion and profits of $3 trillion, with assets worth $161 trillion and a market value of $44 trillion. All those totals are higher than a year ago, with the largest growth being in market value (up 13% year-over-year). These firms employ 90 million people worldwide.

For the first time, China is home to the world’s three biggest public companies and five of the top 10. State-controlled…

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In the next big data breach, crowd-sourcing could find the culprits

#AFN2014

What happens when the money finally runs out?

#AFN2014 – Adjustment of priorities of what people NEED and not what they WANT is required #mustread

willisbryanblog

In the American home that is supported by independent, self-reliant, self-sufficient and self-determined, commonly known as responsible, individuals this rarely happens. Why, is answered by this, prioritization, the needs are met first and then the wants. The basic needs of food, clothing and shelter are met first, after these are met the less important needs are met, the last would be the niceties and luxuries. The responsible also manage to save a little to see themselves through disasters, hard times and even retirement. The family budget breaks the money down into separate piles, if the important pile runs low, money must be taken from a less important pile to ensure the more important is accomplished. This is called adjustment to events. If the money being earned is not enough, the responsible will find a way to earn more even if they have to make personal sacrifices. This called self-reliance. The…

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