Global Natural Catastrophes Cost Insurers $50B in 2016: Munich Re

Insurers paid out around $50 billion for natural disaster claims last yr, almost double 2015’s payout of $27 billion, reinsurer munich re stated in its annual herbal disaster evaluation on wednesday.

Earthquakes in japan and devastating floods in china – only 2 percent of whose losses were insured – were the maximum pricey natural catastrophes of 2016. However the yr saw the second one-fewest fatalities from natural screw ups in 30 years.
Some $a hundred twenty five billion of losses were uninsured.

It changed into the most expensive one year for natural disaster harm after 3 years of fairly low losses, and above the ten-year common of $45.1 billion.

“losses in a unmarried 12 months are obviously random and can't be visible as a trend,” said board member torsten jeworrek. “the excessive percent of uninsured losses, mainly in rising markets and developing countries, stays a situation.”

Reinsurers act as a monetary backstop to insurance groups, paying a bit of the massive claims for storms or earthquakes in alternate for part of the top class.

Lower claims payouts improve insurance industry profit however have a drawback for reinsurers, whose coverage corporation clients often then call for lower costs for reinsurers’ backing.

Two earthquakes on the southern jap island of kyushu in april induced basic losses of $31 billion, even as floods in china in june and july precipitated losses of $20 billion.

“there are actually many indicators that positive activities – inclusive of persistent weather structures or storms bringing torrential rain and hail – are more likely to occur in certain regions as a result of weather trade,” said peter hoeppe, head of munich re’s geo dangers research unit.

North the usa became hit via more herbal failures than in any year considering that 1980, with normal losses totalling $10.2 billion and storm matthew the maximum serious event. Its best effect became in haiti, where it killed around 550 humans.

The weather phenomenon known as “el niño” had in 2015 helped reduce the improvement of hurricanes inside the north atlantic, which historically cause some of the heaviest claims for the insurance enterprise.

Globally, eight,seven hundred human beings had been killed by natural screw ups in 2016, some distance fewer than the 25,400 fatalities in 2015 and the 10-year common of 60,six hundred.

The review gave no claims figures for munich re itself. The reinsurer is due to record 2015 results on feb. 7.

Green Investment Bank sale is 'deeply troubling', say Scottish ministers

Green funding bank sale is 'deeply troubling', say scottish ministers

The chance of the United Kingdom inexperienced investment financial institution being stripped of its assets in a sale to australian funding bank macquarie is “deeply troubling”, scottish ministers have instructed westminster.

The sale of the edinburgh-primarily based financial institution, which supports offshore windfarms and different inexperienced initiatives, is expected to be agreed in january. However the labour celebration, liberal democrats, vegetables and previous conservative ministers have all raised concerns in current weeks that privatisation may additionally see the bank lose its environmental reason.

In an unpublished letter to the commercial enterprise branch, visible by using the guardian, the scottish cupboard secretary for the economy said he turned into “annoyed” at being kept in the dark over a sale of the £three.8bn publicly owned bank.

“reports have indicated that the final touch of the transaction procedure will bring about the whole ruin-up of the present day green investment financial institution portfolio and might bring about an asset-stripping exercise with vast financial rewards for any new owner. This is deeply troubling,” said keith brown in the letter to nick hurd, the climate minister.

Brown continued: “the scottish authorities does now not consider that the approach to privatisation being reported is in step with the reassurances given in the autumn of 2015.”

At the same time as the scottish authorities issued a statement voicing its worries just earlier than christmas, the letter famous the volume of its frustration, with brown saying he changed into upset hurd had not taken a name from him, and warning he would continue to press ministers on the problem.

Vince cable, who as former commercial enterprise secretary released the financial institution in 2012, informed the father or mother he “fully shared” scotland’s worries.
“the scottish government has a superbly valid desire to be properly consulted on the problem. The hassle is that as it’s a bidding system they’ve [the government] wrapped themselves in commercial confidentiality and it’s getting inside the manner of getting a proper coverage dialogue.”

He added: “in no way have to they be allowing a choice to proceed which involves a ability break-up of the bank, it’s been a huge fulfillment story.”

Even though not officially showed, macquarie changed into selected as the government’s desired bidder last autumn, after beating off a bid from the sustainable improvement capital consortium. Sources near the london stock change labelled the australian financial institution an “asset-stripper” while it bid for the exchange 12 years ago.
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Clive lewis, labour shadow secretary of state for business and power, stated: “privatising the gib makes no sense by any means. The financial institution is each a tremendous fulfillment as a public organization and presenting a wholesome return to the taxpayer. It’s been multiplying our ability to build extensive low carbon infrastructure and fight climate trade.”

Sepi golzari-munro, who has carefully monitored the bank’s sale and is head of the UK programme at thinktank e3g, said: “the gib is a strategic countrywide asset that could and must be used to attain those ends, as opposed to utilized by foreign banks to make a windfall on the taxpayer’s fee.”

A beis spokeswoman said: “that is a commercially sensitive procedure and therefore it's miles irrelevant for us to comment whilst the technique is ongoing.”

The green funding financial institution declined to remark.

Tillerson to Cash Out Quarter-Billion Dollar Exxon Nest Egg

Rex tillerson will relinquish manipulate of a quarter-billion dollar nest egg amassed over four decades at exxon mobil corp. To avoid a warfare of interest throughout his affirmation hearings to grow to be u.S. President-elect donald trump’s secretary of country.

If showed, the previous exxon chairman and chief government officer will convert about 2 million deferred shares to cash a good way to be surrendered to an independently controlled consider, the business enterprise stated in a announcement dated tuesday. Tillerson will also sell more than 600,000 stocks he already owns in north the united states’s largest oil explorer, abandon $four.1 million in cash bonuses he could were paid over the next three years and take a $3 million haircut at the restrained stock payout.

To avoid a struggle of interest with the multinational corporation he joined in 1975 and led for eleven years starting in 2006, tillerson needed to training session a resolution for the deferred compensation package deal that typically ties former executives’ non-public fortunes to exxon’s performance for a decade when they retire. Exxon’s board stated it consulted with federal ethics officials to make sure the agreement severing tillerson’s ties to the employer was sound.

Tillerson’s affirmation hearing before u.S. Senators may also begin as quickly as next week. The 64-12 months-vintage texan is no stranger to capitol hill, having testified earlier than congressional inquiries in the beyond decade on topics as numerous as gasoline expenses and the deepwater horizon catastrophe.

Tillerson stepped down as exxon chairman and ceo on jan. 1 and become succeeded via refining chief darren woods. The employer generally retains the offerings of ex-ceos put up-retirement to benefit from their lengthy-status relationships with overseas oil ministers, political leaders and dignitaries.

By reducing ties with exxon, tillerson is likewise eschewing publish-employment perks along with a personal office and administrative assist enjoyed by his predecessor and mentor, lee raymond. Tillerson spent his whole professional profession on the irving, texas-based totally corporation that strains its roots to the Eighteen Eighties and john d. Rockefeller’s general oil agree with.

Tillerson directly owns 611,087 shares of exxon, well worth approximately $fifty five.Five million in line with bloomberg calculations based on tuesday’s near in ny. He has a further 2.026 million restrained stocks, worth $184 million.

Correspondent banking: still in rude health?

Correspondent banking represents the cornerstone of the global payment system designed to serve the settlement of financial transactions across country borders. Various activities drive the need for cross-border correspondent banking: in trade finance where goods or services transferred across borders need to be settled; in international infrastructure and aid projects where funds need to be disbursed to vendors and contractors involved; and where an overseas worker looks to remit earnings back to his family back home. Each relies on the banking system, providing just examples of the need for cross-border correspondent banking services.

However in recent years, the number of correspondent banking relationships (CBRs) has declined globally. Data from the Bankers Almanac compiled by Accuity shows that between 2013 and 2016, the number of correspondent banking relationships declined from 360,785 to 223,247, representing a 38% decrease globally. That sharp fall in global correspondent banking relationships is especially significant when contrasted with the increase in the number of banks in the same period. The research shows the total number of financial institutions increasing from 42,708 to 45,893

North America and Western Europe in particular have seen the largest reduction of CBRs, with falls of 46% and 39% reductions respectively, reflecting the general trend of the larger Tier 1 banks reviewing and retrenching their existing relationships. A large bank typically has multiple CBRs, as it deals with counterparty banks in different countries and currencies. It is not uncommon for multinational Tier 1 banks to have thousands of relationships, driven by clients’ requests to remit funds across borders in different currencies. World Bank research also supports this trend, with 75% of large banks reporting they had withdrawn from correspondent relationships.

The impact of the decrease in CBRs, combined with the increase in banks, demonstrates the significant decline of correspondent banking overall. There are three primary factors behind this decline; Regulatory drivers, emerging illicit payment corridors and changing payment models.

Regulatory drivers

Regulatory drivers are certainly a significant factor in driving the decline. Over the past five years, the number of penalties for non-compliance with anti- money laundering (AML) regulations has increased. To date the biggest penalties levied have been BNP Paribas, fined US$8.9bn in 2014 and HSBC US$1.9bn in 2013 for various alleged money laundering offences, including the stripping of references to Iran in US dollar wire payments for clearing in the US.

As a result, large banks are concerned with the inherent risks of dealing with transactions from sanctioned countries, including Iran, North Korea and other high-risk countries in the Middle East, Africa and the Caribbean. The challenge for Western correspondent banks here is the lack of understanding of the customer base of their respondent banks in these high-risk countries. The concern is that these respondent bank customers may be high risk themselves, leading the western correspondent banks to withdraw their CBRs ‘wholesale’ as the cost of conducting enhanced due diligence on each of the respondent bank customers proves too cost prohibitive based on the perceived increase in risks in those countries.

Emerging illicit payment corridors

The second factor is the increase in criminal activity that drive illicit financial flows in new payment corridors. In the European Union (EU), migrant smuggling is a highly attractive business for criminal networks, activity having grown significantly in 2015 and 2016. Smugglers control the whole chain from recruitment to arrival in Europe. A joint Europol/Interpol report shows migrant smuggling worth US$4.85bn annually and growing.

Smuggling proceeds need to be laundered through the financial system, increasing overall transaction risks for correspondent banking. This puts further pressure on banks in Eastern Europe and North Africa to identify source of funds. Western banks, keenly aware of the risks and the reputational damage from being associated with migrant smuggling and the human tragedy of refugees from Syria and elsewhere are more likely to de-risk and withdraw entirely from these regions. There are other payment corridors that continue to see illicit financial flows, including drug smuggling revenues from Latin America and the Caribbean into North America with extensive de-risking occurs in these regions as well.

Changing payment models

The third factor driving the decline in CBRs is related to the changing payment model itself. Globally, payment patterns are changing, with greater volumes of lower value payments crossing borders. Payment and lending roles, traditionally serviced by centralised banking functions, are now being disintermediated by emerging payment service providers and financial technology (fintech firms). These firms offer an alternative to traditional cross border payments, with new technologies such as distributed ledger and new models like payment netting offering consumers and corporates various alternatives.

Digital commerce, driven by Amazon, eBay, Alibaba and others, offer their customers cross-border payment transfer services that do not rely on the traditional ‘rails’ of correspondent banking. Global digital commerce sales (which are typically lower value transactions) are projected to grow from US$1.3 trillion in 2014 to US$3.6 trillion in 2019. These trends drive innovation in cross-border payment services that look to lower or eliminate the current inefficiencies and high transfer costs in traditional cross-border banking services.

The declining trend of CBRs globally will continue, with an estimated rate of decline between 15% to 20% over the next five years from the current 38% decrease in 2016. Implementing financial counterparty know-your-customer (KYC) solutions will help with bank to bank risk modelling. However, this rate of decline may even accelerate as new cross border payment models developed by fintechs mature, become more embedded into the financial ecosystem and provide viable alternatives for corporates that have typically relied on traditional cross-border payment rails to transfer large value payments.

Digital commerce and the ‘Internet of Things’ (IoT) will continue to drive lower value cross-border transactions requiring lower cost payment platforms. Banks will no longer be the only channel for cross- border payment solutions. Indeed, for banks to continue to be relevant, they will need to either partner with fintech providers or develop new cross-border payment solutions that drive down costs, improve transparency and transfer times for their customers.

Perhaps JP Morgan’s chief executive officer (CEO), Jamie Dimon, expressed it best: “Silicon Valley is coming. There are hundreds of startups with a lot of brains and money working on various alternatives to traditional banking. [..] You have all read about Bitcoin, merchants building their own networks, PayPal and PayPal lookalikes …. there is much for us to learn in terms of real-time systems, better encryption techniques, and reduction of costs and “pain points” for customers.”

JRJR Networks Files Third Quarter 10-Q

John walker, the leader economic officer commented, "we're pleased to record the q by way of the authentic submitting extension for the september 30, 2016 10-q granted with the aid of the change. This filing comes just 3 weeks after the december 6, 2016 filing of the 10-q for the duration ended june 30, 2016. Even as the alternate supplied an additional extension to report the september 10-q until january 31, 2017, the organisation felt it changed into crucial to demonstrate the seriousness wherein we have taken this issue. I trust this speaks of the corporation's commitment to adhering to the listing necessities of the alternate and the importance of this facts for our shareholders. While it has been a attempting and high priced exercising regaining compliancy, we are very thrilled with the realization of this procedure and will now begin paintings on our annual audit.

I'm additionally thrilled to document better 12 months to date gross revenues for the 9 months ended september 30, 2016, which can be up 16% percentage over the previous yr. Improvements in our restructuring packages yielded a $782 thousand savings in trendy and administrative charges for the area. At the same time as it has been a challenging 12 months, we're thrilled to have the distracting issues facing the enterprise at the back of us and look forward to specializing in our commercial enterprise and growth initiatives in 2017.

We are reviewing numerous interesting opportunities with a purpose to retain to decorate the logo and commercial enterprise model that we're dedicated to. We stay up for beginning 2017 with a sequence of running initiatives centered on logo supremacy, income penetration and further operational enhancements."

Financial highlights

Gross sales for the 0.33 area was about $34.1 million, in comparison to closing yr's sales of $37.Zero million. The sales for the nine months ended september 30, 2016 expanded to about $106.6 million, as compared to $ninety one.9 million at some stage in the identical length for the prior year, an boom of $14.7 million, or 16%.

Net sales for the third region turned into approximately $28.Five million, that is comparable to last yr's internet sales of $31.1 million. The net sales for the 9 months ended september 30, 2016 became about $88.8 million, in comparison to $79.Eight million at some stage in the same period for the earlier 12 months, an growth of $9.0 million, or eleven.Three%.

Gross profit turned into about $19.4 million, in comparison to $21.Four million in the same area remaining year. The gross income for the nine months ended september 30, 2016 was approximately $60.0 million, in comparison to $fifty five.8 million all through the same period for the earlier yr, an increase of $4.2 million, or 7.Five%.

Gross profit margin all through the sector changed into fifty six.9% of revenue, compared to fifty seven.Nine% of sales in the prior 12 months. The gross profit margin for the nine months ended september 30, 2016 changed into fifty six.Three%, in comparison to 60.7% in the course of the same period for the previous yr. The decrease in gross earnings margin is generally due to our acquisition of betterware which has lower gross profit margins compared to the alternative corporations inside the portfolio.

Operating loss for the 1/3 region advanced to approximately $4.1 million, in comparison to $four.Four million in the earlier 12 months, a trade of $0.3 million. The running loss multiplied to approximately $15.Five million, compared to $11.1 million in the earlier 12 months, a exchange of $4.Four million. The running loss decreased within the third region due to a decrease inside the gross profit which turned into a result of decrease earnings margins.

Net loss because of jrjr33, inc. For the 1/3 sector was about $four.7 million, or a loss of 13.8% of sales, elevated as compared to the $three.9 million, or a lack of 10.Five% of revenue, experienced for the duration of the 0.33 zone of remaining 12 months. The net loss resulting from jrjr33, inc. For the 9 months ended september 30, 2016 became about $sixteen.1 million, or a loss of 15.1% of revenue, compared to $7.6 million, or a lack of 8.3% of revenue, throughout the equal length for the prior 12 months, an boom of $8.5 million. The net loss elevated because of the growth in running losses in addition to the increase in interest cost as a result of the company taking on additional debt in area 4 of final yr in addition to $859 thousand in past due filing penalties to dominion. 

Adjusted ebitda (losses) for the zone became about $1.7 million, or a loss of 4.9% of sales, that is regular with the prior yr's loss of $1.7 million, or a lack of four.Five% of revenue. The adjusted ebitda (losses) for the 9 months ended september 30, 2016 became approximately $8.0 million, or a lack of 7.5% of revenue, which has elevated from the prior year's loss of $2.Four million, or a lack of 2.6% of sales.

The corporation will preserve a convention name wednesday january four, 2017 at four:30 p.M. Jap time, to speak about the employer's third zone 2016 economic results.

To take part in the convention call, please dial toll unfastened 888-428-9470.

For international callers, please dial (toll) 719-325-2366.

An audio replay of the convention name will be to be had within the investor family members section of the employer's internet site following of completion of the call for about 30 commercial enterprise days.

Islamic finance roots grow deeper in Kenya

The coverage (modification) act 2016 signed into law through president uhuru kenyatta ultimate week, is about to enhance kenya’s role because the top of the line islamic economic hub at the african continent.

The flow got here per week after the capital markets authority (cma) changed into admitted by means of the council of the islamic monetary services board (ifsb) as an associate member of the board.

“the new law affords for the licensing and law of takaful coverage enterprise in kenya for you to encourage international funding on this zone, that is a target place for the nairobi worldwide monetary centre,” the coverage (change) act 2016 reads.

Takaful is a co-operative system of compensation or compensation in case of loss, organised as an islamic or sharia-compliant opportunity to traditional insurance products.

General setting

The ifsb, is based totally in kuala lumpur, malaysia, it’s a international popular putting frame, which promotes the development of a prudent and transparent islamic monetary offerings industry.

It does this thru introducing new, or adapting current, global standards constant with sharia principles and recommends them for adoption.

So far, ifbs has issued 26 standards, guiding ideas and technical be aware for the islamic financial offerings industry.

The decision to admit cma become made at the 29th ifsb council meeting held in cairo, egypt on december 14.

In october, the government launched the islamic finance assignment control workplace (pmo).

The pmo is being overseen by the countrywide treasury with the technical and economic help of economic area deepening africa (fsda), and under the mandate delegated to it through kenya’s financial quarter regulators forum (fsrf).

The pmo is led by means of islamic finance advisory and warranty services (ifaas), an worldwide consultancy firm specialized in islamic finance, in collaboration with simmons & simmons, an global law firm.

Cma’s leader govt paul muthaura said the authority club in ifsb is a key step towards the development of kenya as an islamic finance hub in the east african place, that is a crucial aspect inside the establishment of nairobi as an international economic centre.

“imaginative and prescient 2030 identifies monetary offerings as a priority zone predicted to play a primary role and a key facilitator inside the fulfillment of the imaginative and prescient,” stated mr muthaura.

He added: “the monetary pillar has, as one of its principal techniques, the broadening of the product imparting inside the economic markets to each home and overseas buyers. To assist diversify the product portfolio, kenya has for a while now been laying the muse for making the country a financial offerings hub, with one of the attention areas being its emergence as an islamic financial hub.”

The ifsb’s islamic financial services enterprise balance document 2016 indicated that, the global islamic economic offerings enterprise reached an universal overall value of $1.88 trillion in 2015.

There are expectations of the market length developing to $3.Four trillion by means of quit of 2018, an eighty one per cent boom.

Within the first half of of 2015, the worldwide sukuk (islamic bonds) amount first rate stood at $291 billion, while islamic fund’s assets figure changed into $seventy one.Three billion.

At some stage in the eleven months to november 2015, the takaful (coverage) quarter was hooked up to be $23.2 billion, even as the islamic banking quarter’s belongings stood at $1.5 trillion.

Witnessed growth

In keeping with the cma, kenya’s islamic finance marketplace has also witnessed extensive increase over the last few years with several economic region establishments of islamic orientation operating presently.

This include  completely fledged islamic banks and 5 islamic windows, two credit union/saccos, one takaful organization, one retaful window and one capital market unit agree with fund, as of september 2016.

Mr muthaura discovered that based on the worldwide trends, the islamic finance industry inside the u . S . A . Stays in large part untapped considering the full-size real economy funding wishes, in particular in the infrastructure realm, which are nicely aligned to islamic or alternative financing systems.

“as an aspiring islamic finance hub, with the right facilitative environment, we've got a actual possibility to attract investment and capital inflows both from muslim and non-muslims domestically and internationally,” stated mr muthaura.

He introduced: “kenya is in a unique function and handiest desires to put into effect rules a good way to in addition facilitate islamic finance for it to gain the blessings of such efforts.”

The coverage (modification) act 2016, additionally permits the operationalisation of hazard-primarily based solvency necessities for insurers that have been introduced within the finance act 2013.

Among the ones proposals is a requirement that an insurer must maintain a a hundred consistent with cent capital adequacy ratio at all times.