John Cleese: Why I love having insurance

John Cleese: Why I love having insuranceMy dad was an insurance salesman. He started in Bristol when he left school at 15 and then, after fighting in the First World War, sold marine insurance in Bombay, Hong Kong and Canton, until he returned to Somerset in 1924 to work for a big company called Guardian Assurance. Every year, he sold more life insurance than anyone else in the company. The reason for his success? He was a kind and decent man and all the solicitors and bank managers in Somerset liked and trusted him. So if one of their clients needed insurance, they'd say: "Oh, give old Reg Cleese a call. He won't try to sell you too much."  As a result, I grew up with the unquestioning belief that insurance was a "good thing," and this was long before I realized how unpredictable life was. Robin Skynner, the psychiatrist, once said to me: "People always think things are going to go according to plan, despite their lifelong experience that they never do." One business guru advises us to "expect the unexpected," thus proving himself a complete prat since the moment you expect the unexpected, it ceases to be unexpected. It is now expected, and so becomes exactly what you are expecting. On the contrary, the frustrating thing about the unexpected is that, there you are going along, expecting the expected, and things are happening just as you expected, and then, just when you least expect it, it happens. It's an alarming thought and the only way to sleep at night is to get insurance. Or so I've always believed.  Take last January for example. My lovely then-girlfriend-now-wife and I were on holiday for a week. And at that moment, all that mattered was that we had a week together. We arrived in our room and there in an ice bucket was a bottle of champagne. We settled on the sofa, I took the bottle, removed the foil and gently unscrewed the wire securing the cork. As I put the wine on the table and turned to the bottle to ease the cork free, it shot out of the bottle at the speed of light and right into my eye. There was blood everywhere, because as it turns out, my eyebrow had been cut by the wire in the cork. Thank God, it hit my eyebrow, not my eyeball.  Never before had I seen a cork shoot out of an ice-cold, completely unshaken bottle of champagne without a little help from my thumbs. There was no way of anticipating what happened. But, I had a broad-ranging, personal-injury-while-travelling-abroad policy with no champagne-cork exclusion. So if the cork had struck an inch lower, at least I could have had my eye mounted properly.  And so, I love insurance! Especially if I am travelling in the United States of America, where becoming a doc-tor is a quicker way to inconceivable wealth than starting a hedge fund. Tom Lehrer, the U.S. satirical song-writer and mathematician, once told of a friend who entered medical school to study "diseases of the rich."  My experience of American doctors came early, in 1965. I was touring in a musical called "Half a Six-pence" with Tommy Steele. I woke up one Sunday at 5 a.m. with a terrible, agonizing toothache. Some-how, I found a dentist in Boston who was prepared to see me. I shook his hand, sank into the dental chair with a cry of relief and pointed to the offending molar. He examined it and embarked on an exploration of the rest of my dentition, making many disparaging noises as he completed the tour. He later explained that X-rays were going to be necessary. I agreed, they were taken, and after a prolonged period of study, he outlined a course of treatment involving crowns, bridges, root canals and so on. Finally, he shook my hand and informed me we could start at 10 o'clock on Tuesday morning.  Incidentally, it is not widely known, but several of the most notorious pirates who operated in the Caribbean had excellent American medical qualifications. For this reason, if you are travelling abroad, and especially if you are visiting the U.S., you should take out appropriate medical insurance.  A final thought: I wish insurance companies would offer a policy that would cover me in the event of my forgetting to take out a policy. That would bring real peace of mind.  John Cleese is an English actor, comedian, writer and film producer known for his work with the comedy troupe Monty Python and the British sitcom Fawlty Towers. In B.C., he can be heard on the radio in ads for Pacific Blue Cross, B.C.'s largest provider of health, dental and travel benefits. He wrote this as part of that campaign.

Japan to Stop Using Nuclear Power, Get Giant Monster Insurance

TOKYO- The Prime Minister of Japan, Yoshihiko Noda, announced that his country will be discontinuing the use of nuclear energy and will also be shopping for giant monster insurance policies.

The decision was widely expected after the disastrous earthquake that left the Fukushima power plant a veritable spawning pool for giant radioactive monsters.

Right: Image appears courtesy of Heather Gillam. Click to enlarge.

Yoshihiko Noda explained to reporters “We can no longer live in fear for these disasters. Japan’s terrain is not stable enough to safely procure nuclear energy. With giant fissures left after the earthquake and the nuclear waste that was trapped in them, there is no telling what possible giant creatures could be incubating underground. That is why I am moving to protect Japan now, and in the future by purchasing a suitable policy.”

Leading economic experts agree that this is the suitable choice for Japan.

“There is no doubt that the Japanese people have endured an unprecedented level of tragedy,” explains president of Global Insurance Specialists, Damon L. Nasman.

“But they certainly don’t deserve any more trials and tribulations. Unfortunately, that is not the world we live in. Uncertainty is still a continuing problem, especially in regards to the question of weather or not giant mosters will be produced from the amount of radiation the island has been exposed to. This is the best course of action for the country, although their premiums will be considerably high.”

Japan’s Defense Minister, Satoshi Morimoto praised the move by the parliament. He stated, “I am not sure if the Japanese military would be capable of defending the country agains such a monstrous attack. Also, there is no way to depend on one of the monsters feeling empathetic towards humanity enough to defend us from the others.”

There is speculation on the actual applications of the policy.

The Minister of Economy, Yukio Edano, warned his fellow country men of the dangers associated with such an abstract insurance policy. He advised that caution should be shown to assess the individual policy plans to make sure they cover “all damage,” not just damage cause by offending monsters, but damage caused by monsters alligned with the Japanese people as well.

“Insurance companies are in the business of making money. It’s not that I think this idea is absurd, it’s that I want the Japanese people to realize the rates we will be paying for a disaster that may never come to be. I just want the parliament to adequately pay for a program that we need, and not pay for any extra features like roadside assistance or settle for a company who offers them an appliance for signing up. This is serious business.”

There have not been any reports or sightings of giant radioactive monsters in Japan as of yet, but that hasn’t stopped citizens expressing their fears of a possible giant monster battle tearing apart the streets of Tokyo.

Yoshihiko Noda issued reassurance to the population of Japan by stating, “Your government has your interests at heart. We know that the threat of giant monsters is a fear consuming every one, but do not worry. Your government is protecting you.”

Health insurance exchanges: The big unknowns

Physicians navigating the world after health system reform are headed toward a large, uncharted area over the horizon in the form of health insurance exchanges. The coverage marketplaces will serve millions of people, but with few predecessor models to serve as guides, doctors wondering what the exchanges will be like for them are, for the most part, sailing blind.

Health insurance exchanges are scheduled to emerge by 2014, at which point individuals and small businesses will be able to shop for a variety of plan options, including coverage that might come with federal subsidies. Forming competitive marketplaces is a major way in which Affordable Care Act architects intended not only to expand coverage to tens of millions of people, but also to restrain cost growth in the system.
The move from plan to implementation, however, so far has not produced many hard details. In an attempt to have exchanges up and running by October 2013, when open enrollment would begin for the 2014 coverage year, the Dept. of Health and Human Services set a deadline of Nov. 16, 2012, for states to submit exchange blueprint proposals. The leaders of some states opposed to the reform law that created the marketplaces have said they have no intention of submitting proposals, and others might need to rely at least in part on the federal government to get their exchanges up and running.

• Physicians on board?
• States provide some glimpses into health insurance exchanges
• See related content

States are very independent, and health care in particular is very local, said Kevin Counihan, chief executive officer of the health insurance exchange being developed in Connecticut. He expects that 13 to 15 states will end up crafting their own exchanges, about 10 may pursue joint federal-state partnership exchanges and 25 others may default entirely to a federal exchange.
Republican governors have expressed their hopes that a change in White House and Senate control after the November elections will enable a repeal of the ACA before such a federal marketplace is set up for residents of their states. Any deadline delay or other major change to the exchange rollout would need to come out of Congress and be approved by the president.

Will doctors help call the shots?

Some states, such as California and Maryland, have moved relatively quickly on the state exchange option, said Jenna Stento, manager in the health reform practice at Washington consultant group Avalere Health LLC. “They’ve adopted legislation, have boards set up, and are already making key policy and operational decisions to get their exchanges operational by the deadline.”
Some have called for physicians to be on the boards determining how the marketplaces are set up and maintained, saying doctors can offer relevant input on how health insurance should operate. State-based exchanges are the only ones that might have boards to oversee their operations, said Timothy Jost, a professor at Virginia’s Washington and Lee University School of Law. Federal exchanges “will have some form of stakeholder consultation, but I don’t think it’s clear yet on how this will happen,” he said.
For states that do decide to establish governing boards, certain conflict-of-interest requirements may prevent certain doctors and other health care professionals from serving on them.
Federal exchange regulations issued in March “neither require nor preclude physician representation,” Jost said. What they specify is that “you have to have a majority of board members who are not conflicted, and you have to have at least one consumer representative.”
For example, an accountable care organization or another physician group that markets services that will be offered through an exchange could pose a conflict of interest if someone from that organization were to serve on the exchange board, Jost said. In interpreting these federal rules, some states expressly have excluded practicing doctors from participation, Stento said. Others, however, “have either allowed for or explicitly include a role for providers on the board, and that’s in a voting role.”

How involved do physicians want to be?

The American Medical Association has advocated strongly for the inclusion of practicing physicians and patients on the governing structures of health insurance exchanges. But to avoid a conflict of interest, some states will allow only nonpracticing doctors to serve on the boards.
One such nonpracticing physician is Robert Scalettar, MD, MPH, former chief medical officer of Anthem Blue Cross Blue Shield, who serves on Connecticut’s 14-member exchange board along with consumer advocates, an economist, experts with insurance industry and social services backgrounds, and representatives of unions and small businesses. Although there was no allowance for a practicing physician, there was a designated seat for someone with health system delivery expertise, Dr. Scalettar said.
“I was selected for that position as a former practicing primary care physician with experience in various practice settings, including community health center, hospital-based practice and multispecialty group practice, each serving diverse populations and associated with multiple payer arrangements,” he said.
The Connecticut State Medical Society believes the board would have benefited from enlisting a physician who is practicing medicine, someone “with a knowledge of the health care delivery system and dealings with the insurance industry from a physician’s point of view,” said Ken Ferrucci, the society’s senior vice president of government affairs.
It wouldn’t necessarily be a mistake to have more physicians represented on exchange boards, said Jon Kingsdale, PhD, managing director of the Boston office of Wakely Consulting Group, a health care strategy and actuarial consulting group. Still, he questioned whether there was much of an intersection between medical practice and a board that essentially will govern an insurance entity.
“I know that doctors are experts on many different things related to health care, but I’m not sure that most states are seeing a physician’s role [or] clinical knowledge as particularly relevant to insurance regulation and financial oversight,” Kingsdale said.
Massachusetts is a health system reform pioneer that already has an operational insurance marketplace. Although they were pleased that the exchange has helped boost the coverage rate, physicians in the state haven’t been all that involved in its insurance operations, said Richard Aghababian, MD, president of the Massachusetts Medical Society.
Some states have tried to engage physicians by creating advisory committees that don’t have voting authority but that present recommendations for the board to consider. Physicians and other health professionals in Colorado, Maryland and Nevada, among others, are represented on such advisory panels, Avalere’s Stento said. Several practicing physicians serving on Connecticut’s advisory councils played a significant role in helping to select the essential health benefits that all plans on the exchange will be required to offer, Counihan said.
Lawrence Downs, the Medical Society of New Jersey’s CEO and general counsel, said the society has been very vocal with the sponsors of exchange legislation in the state about the need for its governing board to have physician and clinical representation. “If that’s not possible, there needs to be a specific clinical advisory group to the board so that information can be present during deliberations,” he said.

How will exchanges affect practices?

Whether or not practicing physicians are involved in the formation and maintenance of health insurance exchanges, they soon will discover how well the marketplaces work for their practices as well as for their patients who are receiving care through exchanges.
The Connecticut State Medical Society’s Ferrucci said physicians in the state are hoping for a seamless transition to the exchanges. Connecticut typically has had very few insurance carriers. The hope is that new offerings on the exchange will loosen the concentrated market and encourage competition, giving consumers in the state more options, he said.
“It would be nice if there was no intrusion into the physician-patient relationship. By and large I don’t think there will be,” Ferrucci said. The more consistent plans in the exchanges will be, “the easier it will be for physicians to provide services to those patients.”
Some states, such as California, may end up with an “active negotiating exchange” that issues competitive bids and puts significant downward pricing pressure on plans, Stento said. Such a model could pose some risk that physician payment rates will become “more constricted and may look a little bit more like Medicaid,” she said.
A state exchange board also might adopt a more passive approach that allows all plans to enter the marketplace, Stento said. The concern to physicians under this scenario is that “there could be some significant beneficiary confusion in terms of picking a plan and getting enrolled and navigating their benefit design, if there’s too much variation,” she said. In conversations with health professionals, she said most seem to prefer an exchange model that allows for some managed competition but doesn’t impose overly stringent regulations that push down pay rates.
The hope and belief of reform law architects is that these exchanges are going to move the system away from situations in which one insurer is controlling the vast majority of the market, Jost said. “And we’ll get to a situation where insurers are more actively competing with one another.”
But he said one of the ways insurers will cope with this change is to establish very narrow insurance networks that offer less costly coverage options. Doctors may find that they aren’t a part of popular networks, and some patients will find that they can’t stay with their current doctors if they want those services covered.
The low-cost, narrow network possibility “is something we’re starting to hear rumblings about in the exchanges,” Stento said. “I think it’s going to be a cost-conscious market, and so plans are going to be designing benefit offerings that can capture maximum enrollment.”
That’s one route insurance plans already have taken in Massachusetts, where insurers chose a select number of physicians and offered a lower-cost plan. That product ended up being a sought-after option in the state, Stento said.
Doctors aligning themselves with those top payers and being in a good position to be preferred members of the network “could be important in navigating the plan dynamic in these new marketplaces,” she said.

Berth of Mansard marks new era in insurance industry

The CBN had in 2010 directed all banks to divest from non-core banking businesses, which include insurance, pension funds management, brokerage firms, mortgage banks and other interests. The CBN said in the policy dated October 4, 2010, that any bank that intends to keep such interests must evolve a holding company that will hold all of the companies including the bank. The objective of the apex bank directive was to allow professionalism in the financial sector, away from universal banking structure introduced in 2004, which made banks to put their hands in all pies with the intention of being a one-stop shop. Among the insurance companies affected by the development were: Oceanic Insurance Group, Zenith Insurance, Intercontinental Wapic Insurance, Guarantee Trust Assurance Company Limited, Unity Kapital Assurance Limited, ADIC Insurance Limited, Union Assurance Limited, First Life Assurance Company Limited, Sterling Assurance, Finsurance, as well as Spring Life Assurance Company Limited. In his view about the CBN directive, Shehu Mikail, national president, Constance Shareholders Association of Nigeria, agreed that the repeal of the universal banking system was necessary to enable the banks concentrate on their core business of banking, thereby promoting professionalism in the industry. Opportunity for investors The direct implication of the CBN policy was the creation of investment window for some foreign investors who are searching for opportunity to penetrate the Nigerian market considered juicy. Before the expiration of the deadline on April 3, 2012, almost all insurance companies, which were either wholly or substantially owned by banks, were bought by local or foreign investors. Wema Bank divested its stake from GNI, through a management buyout arrangement; Diamond Bank divested from ADIC Insurance, Skye Bank also divested its stake from Law Union and Rock Insurance and Crystalife Assurance, Oceanic International Bank, now Ecobank plc, divested its stake from Oceanic Life and Oceanic General Insurance, selling its shares to a South African firm. International interest in GTAssur now Mansard Guaranty Trust Bank was said to be one of the earliest banks that commenced divestment from its insurance subsidiary, Guaranty Trust Assurance plc. Last year, following changes to the universal banking concept, Assur Africa Holding, a consortium of three European Development Finance Institutions (DFIs), and two Private Equity (PE) firms acquired a 67.68 percent shareholding in GTAssur, resulting in a need to change the company’s corporate identity - now called Mansard Insurance plc. The DFIs are: FMO – Netherlands Development Finance Company (Holland), DEG – German Investment Corporation (Germany), PROPARCO – French Development Finance Company (France). It is gathered that both FMO and DEG are rated AAA by Standard & Poor’s, the world’s leading rating agency. Rebranding, as Mansard berths The significance of rebranding is that it refreshes a product. Experts say that companies that don’t employ rebranding strategies at the right time often find themselves slipping away from competition. The importance of maintaining a strong brand image means always catering to consumer needs. Basically, rebranding is said to be associated with developing a new look, feel, or energy, even for your product, service, business. A successful rebranding effort is built on the concept that a brand has to occupy a place in a consumer’s mind. The importance of rebranding has never been so critical; with new management, new enhanced technology released almost daily, business needs to respond quickly to maintain the image associated with the latest products, new trends and to retain confidence. A brand is built through an internal processing of its brand’s DNA based on empirical research. It was on this concept that Guaranty Trust Assurance plc, one of Nigeria’s foremost insurance companies, was rebranded Mansard Insurance plc. The rebranding marks the conclusion of the company’s evolution from a subsidiary of a leading Nigerian bank into an independent insurance company. Mansard Insurance was incorporated in June 1989, and has gone through many phases including a nine-year ownership by Guaranty Trust Bank, which ended in 2011, with the acquisition of majority shares by Assur Africa Holding. Mansard Insurance was listed on the floor of the Nigerian Stock Exchange (NSE) in November 2009, and its market capitalisation is currently N16 billion, making it the insurance company with the highest market capitalisation on the NSE today. Over the last eight years, Mansard Insurance has grown its turnover at a Compounded Annual Growth Rate (CAGR) of 85 percent in an industry with a CAGR of just 16 percent over the same period. The company has progressed from being in 97th position (in terms of market share) out of 103 insurance companies existing in 2003, to a joint third position out of 50 insurance companies in 2011. This growth has attracted the attention of analysts from across the world. In September 2010, Global Credit Rating Company of South Africa rated the company A+ for Claims Paying Ability and B- for Issuer Credit Rating. In the same year, AM Best, the world’s leading specialist insurance rating agency, gave Mansard Insurance a B rating for International Credit and BB+ for Financial Strength. Also, Agusto & Co gave it a rating of A+ for Credit Risk. These ratings, according to the management, are the highest received by any insurance company in Nigeria. Little wonder the company received the Marketing World award for Brand Excellence in 2011 and Web Jurist adjudged Mansard’s website as the best for Site Content and Technical Structure. Early this year, Mansard received a Great Place to Work award as being the third best place to work in Nigeria. In the words of Tosin Runsewe, chief client officer, “Mansard is another word for a roof. A roof is a symbol of protection. The concept of a roof speaks to the consistency and dependability that our brand has with our customers. Our customers are safe under the Mansard Roof.” He concluded his new brand introduction by stressing that “While GTAssur has evolved into Mansard Insurance plc, the same company continues with the same people having the same values. “The new brand also brings back from our past the colour green, which was the primary colour of Heritage and the old Guaranty Trust. Yet, green is also the colour of growth, the colour of spring, of renewal and rebirth. It renews and restores depleted energy. It is the sanctuary away from the stress of life, restoring us back to a sense of well-being. Green is the great balancer of our mental, emotional and physical energies, which is why there is so much green on our planet. As in nature, green leaves are an indication the plant is still growing. It is also the anticipation of things to come. Green represents the future, as Mansard Insurance represents our future.”

PH Proposes Calamity Risk Insurance

The Philippine government is proposing to multilateral agencies for the establishment of a risk pooling facility that will insure nations from natural disasters, the Department of Finance (DoF) said yesterday.

Finance Secretary Cesar V. Purisima told the Senate during a budget hearing that the government has already submitted its proposal to the World Bank in 2010 for the establishment of a "catastrophe risk insurance."

"We've proposed to the World Bank that all countries be asked to be part of a mandatory insurance pool and the insurance premium to be based on each country's share of the carbon footprint," Purisma said.

The finance chief explained that the facility will be designed to limit the financial impact of catastrophes to member nations by quickly providing short term liquidity when a policy is triggered.

"We are continuing to explore other financial instruments to help us deal with financial risks brought by disasters," Purisma told Senators when asked about the finance department's preparedness in time of a natural disaster.

Purisima said that governments, particularly those most venerable nations like the Philippines, will be protected from catastrophes once this proposal is adopted by the World Bank or the Asian Development Bank (ADB).

"It should be the initiative of many countries, the concept of risk sharing is among the countries and I hope I will get traction," Purisima said.

Though the Philippines has yet to get commitment from other nations, Purisima said that they have already talked to the Japanese government about the risk insurance.

Purisima said he is "hopeful" that other nations will, likewise, support the plan.

The Philippines is looking at the Caribbean Catastrophe Risk Insurance Facility (CCRIF) as a model for its proposal.

CCRIF is the world’s first and, to date, only regional fund utilizing parametric insurance, giving Caribbean governments the unique opportunity to purchase earthquake and hurricane catastrophe coverage with lowest-possible pricing.

CCRIF represents a paradigm shift in the way governments treat risk, with Caribbean governments leading the way in pre-disaster planning.

CCRIF was developed through funding from the Japanese government, and was capitalized through contributions to a multi-donor Trust Fund by the Government of Canada, the European Union, the World Bank, the governments of the UK and France, the Caribbean Development Bank and the governments of Ireland and Bermuda, as well as through membership fees paid by participating governments.

Currently, there 16 governmen members of CCRIF.

These include, Anguilla, Antigua and Barbuda, Bahamas, Barbados, Belize, Bermuda, Cayman Islands, Dominica, Grenada, Haiti, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Trinidad and Tobago and the Turks and Caicos Islands.

In 2007, CCRIF paid out almost $1 million to the Dominican and St Lucian governments after the 29 November earthquake in the eastern Caribbean; in 2008, CCRIF paid out $6.3 million to the Turks and Caicos Islands after Hurricane Ike made a direct hit on Grand Turk; and in 2010, CCRIF made a payment of $7.75 million to the Government of Haiti after the 12 January earthquake.