ITIJITIJ Page 18 Page 20 Page 22 Page 24 International Travel Insurance Journal ISSUE 54 • JULY 2005 ESSENTIAL READING FOR TRAVEL INSURANCE INDUSTRY PROFESSIONALS

TGIC buys Big ‘I’ rejects ‘optional’ federal charter Whitley travel book Thanks, but no thanks, says the inevitable, and that it would Independent Insurance Agents & be detrimental to consumers John Sanders catches up with the latest twists and Brokers of America (the Big ‘I’) to and producers, according to turns regarding Whiteley, after they were forced mounting proposals favouring an Symington. into receivership optional federal charter (OFC) to He adds that the latest OFC regulate and reform the insurance proposal would force the Travel & General Insurance Company plc (TGIC) has industry. Report by Milan Korcok state system to backstop taken over the travel insurance book of Whiteley federally chartered insurers. Insurance Consultants, one of Britain’s biggest travel Responding to recent letters and He said: “This is an insurance brokers, after the Financial Services proposals supporting an OFC from unprecedented intrusion on Authority (FSA) forced Whiteley into receivership at several financial services companies state solvency regulation and the end of April (see ITIJ 53, June 2005). and state banking associations to the potentially a huge detriment TGIC, part of the Travel & General Group, is the federal Senate Banking Committee, to consumers. There is leading provider of bonds and financial failure cover Charles Symington, Jr, senior vice nothing optional about that.” to tour operators and travel agents in the UK. president of the Big ‘I’, said that There is no question reform However, in February 2003 it purchased the business although reform of the industry is is needed, says the Big ‘I’, but of another failed travel insurer, Travel Protection needed, it is best achieved within the agents, brokers and the Group (TPG), and in April 2004 began underwriting existing state regulatory system. consumers they work with travel insurance itself. In that respect he referred to the are better served by “This is why the Whiteley’s purchase was very much proposed State Modernization and reforming the existing system an opportunity for us to develop this fledgling side of Regulatory Transparency (SMART) Act, and by supporting the our business,” TGIC spokesperson Samantha which has been crafted by state level SMART Act legislation as it Callaghan told ITIJ. In the longer term, TGIC expects insurance regulatory associations and is moves ahead to federal to benefit when – as many believe – FSA regulations expected to be introduced in Congress legislative action. are eventually applied to travel agents selling travel this summer. The Act is expected to be “We support the SMART Act insurance. hotly debated by legislators, many of for several reasons, including TGIC has already contacted everyone who bought a whom have been actively stumping for the fact that it would foster policy through Whiteley after it was found to be in more federal regulation over the consistency among the breach of FSA regulations, and is now contacting insurance industry – which traditionally individual states without clients with valid travel policies purchased last year as has been regulated at state level. creating a new, cumbersome they come up for renewal. TGIC is offering to renew Symington said that although there federal bureaucracy or unduly Whiteley policies through its tagdirect subsidiary and may be an impression that many burdening agents and brokers will underwrite the policies itself. insurance companies support federal nationwide with onerous or The FSA took action against Halifax-based Whiteley regulations: “It has been our dual regulations,” said Big ‘I’ after discovering that the company had been acting experience that the vast majority of chief executive officer Robert without permission as an insurer and that some of the insurance companies, and an overwhelming number Although the proponents of an optional federal A Rusbuldt. 10,000 or so travel policies it had issued were not of our agents and brokers, oppose an additional charter say it would not supplant state regulation, the “When it comes to insurance regulation, consumers underwritten. Whitely also traded as Kingfisher Travel federal charter for the insurance marketplace.” Big ‘I’ believes such an occurrence would be continued on p.4 Insurance and Kingfisher Insurance Services.

the cost of your airline ticket refunded (up to US flight insurance contentious $3,000) if you meet the covered criteria. Northwest offers its international passengers a In a hotly debated new move, some US airlines airlines have been accused of making even more more expensive product, called Comprehensive have begun to offer trip cancellation insurance to money out of travellers. Trip Protector, which costs 5.5 per cent of the cost their passengers. Report by Sarah Lee In a report in the Wall Street Journal, fare watcher of the airfare and includes limited medical Terry Trippler commented: “It’s sort of double- coverage and emergency medical transport. One click whilst purchasing an airline ticket from dipping. You set the rules, and then turn around and With either policy, however, covered ‘reasons for Northwest Airlines, Continental Airlines or America charge people to escape them.” cancelling’ have been accused of being ‘fairly West Airlines’ website enables you to buy travel The airlines, however, are pleased with the results of limited’. Not all medical emergencies are covered; insurance along with your air fare. their new enterprise, and insist they are simply neither are pre-existing conditions. Meanwhile, the For four per cent of the total cost of your non- offering passengers a choice. “A significant number of items that are covered have come in for criticism refundable ticket, you are covered by your airline our customers find it to be valuable,” said Julie King, for being either covered elsewhere or highly under the Ticket Protector policy from Access spokeswoman for Continental. restricted. For example, Ticket Protector covers America. But, the insurance has been knocked for So, although this new insurance is very limited when covering only very limited circumstances, and the compared to traditional travel insurance, you do get continued on p.4 2 NEWS

Stamp duty ups travel insurance costs

An increase in stamp duty Editorial premiums on ITIJITIJ general insurance in International Travel Insurance Journal the state of New comment South Wales (NSW), Australia, is WHAT’S IN prompting travel It is alarming that travellers keeping within insurers to take the a limited budget will drop travel insurance opportunity to first from their check-list as they don’t see THIS ISSUE? inform travel agents it as strictly necessary. For those who do that they should not bother to insure themselves, many be dissuaded from cunning travellers will simply put in a false encouraging claim on their return to level out the initial REGULARS customers to take expense of the policy or indeed profit out travel insurance. from the exercise. This is a mind-set that News 1 To take affect in the has grown amongst certain buyers of 2005/2006 financial travel insurance. There is an army of Editorial comment 2 year, the increase in customers out there who believe that they Grapevine 5 stamp duty from five to nine per cent will who should carry the cost. That said, travel agents should get a return on their investment for Insurance matters 7 predominantly apply to all stamp duties on domestic need to be mindful that the need for travellers to buying the policy and this translates to lying Air ambulance news 10 travel insurance and cancellation charges on insure themselves is greater than ever, and about claims. Although this is a crime, it is international travel insurance. supersedes the discomfort of these extra charges,” perceived as a lesser crime, a ‘household Health matters 12 Mondial Assistance estimates that on an average said Mondial Assistance Australia managing director, crime’ that doesn’t have a victim. Travel matters 14 international policy of AUS$264 the new stamp duty Peter Edwards. “While the reality is that the industry However, in the UK alone, insurers have Company brief 16 premiums will result in an increase of approximately will ultimately pass this increase onto the purchaser, lost over a billion pounds every year from News analysis: A bloody pest 18 AUS$5, while an average domestic policy of AUS$127 travel agents need to be aware that any increase for these ‘little white lies’ and that’s theft, pure will incur an additional charge of AUS$4. individual travellers will be negligible and should not and simple. World markets: Belgium 22 “It is disappointing the NSW Government has affect their decision to take travel insurance for Travel insurance can be a hard industry, Service directory 26 chosen to introduce this extra tax without regulating domestic and international travel.” and many of the problems are related to Hot spots 30 the customer’s attitude toward the product. It is this attitude or perception Smile corner 30 that must be addressed and customers Dick’s hotline: Drug law alert 30 should be educated about what they are Diary dates 31 Alabama targets Aruba over missing student spending their money on and why it is On the move 31 important. The message is clear – travel The case of the 18-year-old Alabama student gone Another pressure group from Oregon is also calling insurance needs to assert a stronger Contributors 31 missing in Aruba is reverberating throughout the for a boycott of American tourism to Aruba. That identity. Caribbean and raising anxieties about American group’s statement said: “The only appropriate FEATURES tourists staying away. By Milan Korcok response for the US to make to Aruban authorities is to impose a stringent tourism boycott until a Is it worth it? 20 Stoking those anxieties is a radio campaign begun in more competent, informative, cooperative Is travel insurance a worthwhile business? the city of Birmingham, Alabama, by a morning talk investigation into the disappearance, and probably The claims culture 24 show that is blacklisting the Caribbean and homicide, of Natalee Holloway is instituted.” Does it encourage worldwide fraud? especially Aruba over the way the police in that The Holloway case has mesmerised the American country have been handling the investigation of media since the high-school graduate went missing Richard Forsyth ITIJ TEAM Natalee Holloway’s disappearance. in Aruba on 30 May, while on a graduation Editor Editor-in-chief: Ian Cameron According to Caribbean Net News, the radio talk celebration trip with school friends. show hosts are: “Discouraging everyone from Respondents from Aruba say the investigation is Editor: Richard Forsyth travelling to the Caribbean, and especially to Aruba. going slowly partly because Aruba is one of the Deputy editor: Sarah Lee Our country (US) may not be perfect, but we are safest countries in the Caribbean and the island’s Editorial assistant: Leonie Bennett able to solve crimes and thoroughly investigate police have very little experience dealing with such Indonesian travel missing persons with a greater level of expertise.” matters. Designers: Eli Butler Chris Marke warning US correspondent: Milan Korcok India correspondent: Saby Ganguly Australia has been warning citizens not to travel to Earthquake fears in Los Angeles Indonesia. Travel warnings have been updated to Legal correspondent: Dick Atkins A little known fault line that runs underneath Los of dying of a heart attack or in an auto accident are say that terrorists are in a very advanced stage of Conference manager: Denise Clements Angeles has sparked serious concerns by geologists much greater than of dying from this earthquake. planned attacks. who fear it could lead to the worst earthquake in US That being said, there are other sources of “We continue to receive a stream of credible Production: Adele Brown history, with the potential to kill up to 18,000 earthquakes throughout the region, and it’s not a reporting suggesting that terrorists are in the very Production assistant: Helen Watts people. It’s called the Puente Hills fault and in the question of if, but when, so everyone should take advanced stages of planning attacks in Indonesia,” Advertising sales: Jude Edwards scope of the last 11,000 years it has created four necessary safety precautions.” The fault line is the Department of Foreign Affairs stated. “Attacks David Fitzpatrick earthquakes over a magnitude of seven, according to located under old commercial and industrial could occur at any time, anywhere in Indonesia and the US Geological Survey (USGS) at the University structures. could be directed at any locations known to be Finance: Pauline Lloyd of Southern California. Although these are rare In the journal Earthquake Spectra, a quake of a frequented by foreigners. Recent credible reporting Helen Parker events, emergency planning and strict building codes magnitude of 7.2 to 7.5 on this fault line would lead suggests that international hotels frequented by Cartoonist: Chris Duggan should already be in effect to deal with the to the deaths of a number between 3,000 and westerners in Jakarta are being targeted in current frightening possibility of a major quake. 18,000 people; would displace 142,000 to 735,000 terrorist planning.” Ned Field at USGS said: “As an individual, the odds households; and would cause an estimated $250 Travel advice suggests all non-essential travel to FREE SUBSCRIPTIONS FOR billion in damage to property. Indonesia should be deferred. TRAVEL PROFESSIONALS ITIJ New FSA regulations alarm ABI Voyageur Buildings 43 Colston St Concerns are mounting in the UK hindering their business without necessarily offering Bristol BS1 5AX over the regulations being put greater protection to consumers. UK forward by the Financial Services Some insurers have also complained to the ABI that Authority (FSA), and the the rules for general insurers and brokers to comply editorial: +44 (0)117 922 6600 Association of British Insurers (ABI) with the insurance mediation directive are increasing advertising: +44 (0)117 925 5151 is preparing to send a paper to the costs and leading to additional paper work. fax editoial: +44 (0)117 929 2023 regulator. The ABI hopes to ensure that the FSA is adhering to fax advertising: +44 (0)117 925 2040 The insurance industry is alarmed the principles of risk-based supervision and paying email: [email protected] by the FSA’s rules designed to most attention to the companies that present the most web: www.itij.co.uk protect the consumer. Some risk rather than taking a blanket approach insurers fear the rules are to regulation.

International Travel Insurance Journal www.itij.co.uk

4 NEWS

Israel back on the Sydney Airport Responsible skiing Database mistakes tourist map security update threaten security A bill that puts more responsibility in the hands of Sydney Airport has skiers and winter sports participants has been The US Justice Department’s inspector general, introduced tighter security passed in New Hampshire, US, backed by the Glenn A. Fine, has concluded in a new 84-page controls and baggage Property and Casualty Association of America (PCI). report that the government’s central terrorist protection through on-the- “With the continued growth of sports such as database has missing information which has spot strapping of suitcases. snowboarding, snowtubing and snow shoeing, this heightened the risk to home security. Report by Miles Clarke in bill now requires To illustrate the Sydney participants of these danger of having activities to be held to the incomplete or This follows the furore in the same standards and missing information, wake of the sentencing of responsibilities that skiers an incident Queenslander Schapelle Corby have been held to for occurred last year to 20 years in a Bali jail. Corby years,” said Frank where someone on was discovered to have more O’Brien, regional vice the government’s than four kilogrammes of president for PCI. “We no-fly list boarded a marijuana in her boogy board are pleased this legislation domestic airline bag and there is strong is moving in the right flight. This was due suspicion it may have been direction and hope that to a communication The US has abated travel warnings for Israel planted by corrupt baggage handlers in Sydney. the Governor will sign the flaw between the recently, putting the country back on the tourist The new strapping system will cost $6 (£2.50) per bill as is.” FBI-run Terrorist map. Americans have been advised for several years bag and straps a bag tightly using a heat-sealed HB619 extends and Screening Center to avoid Israel due to the possibility of violence, but strapping applied by a machine so that any modifies the duties and and other law it is back on the map as a sought-after destination interference with the bag can be easily detected. responsibilities of skiers enforcement now that the US has eased warnings against Max Moore-Wilton, CEO of Sydney Airport, said bag and operators as they agencies. travelling there. strapping was one of a number of initiatives being apply to winter sports. Fine said: “There is “The Department of State urges US citizens to taken to improve security for travellers at Australia’s The bill enhances the little room for error carefully weigh the necessity of their travel to Israel largest airport, which processes some 27 million original legislation, passed because a single in light of the risks noted. The Department also passengers a year. in 1979, to include name omitted from urges US citizens to defer unnecessary travel to the Other steps include an increase in the number of additional winter activities the database could West Bank and avoid all travel to Gaza,” said the security guards at access points, closing some existing such as extreme skiing result in a suspected advisory. “Terrorist attacks within Israel have airside access gates and an increase in inspections of and snowboarding as terrorist successfully declined in both frequency and associated casualties. Aviation Security Identification Cards and persons, inherently dangerous applying for a visa, However, the potential for further violence remains goods and vehicles at entry and exit gates. activities. The bill being admitted to high. Resentment against efforts to promote peace, At Brisbane Airport, a company which wraps suitcases maintains that if a person the US, or failing to and ongoing Israeli military operations in the and other luggage in a clear film is reporting an eight participates in one of the be identified when Occupied Territories could incite further violence in times demand for its services since the revelations of named activities and stopped for a traffic Israel and the Occupied Territories.” drug smuggling were raised during the Corby trial in sustains an injury as a result of the activity, through violation.” Although the updated warning is still cautionary, Bali. Some 93 per cent of Australians believe the 27- no negligence of the ski operator, the ski area Other mistakes included names that were put on Americans are no longer advised to avoid the year-old was an innocent victim of the activities of operator is not liable for the damage. the list that should not have been there in the first country altogether as in the previous warning. drug dealers. “This bill is a victory for the ski industry, New place. However, despite the mistakes, Fine Hampshire tourism and the insurance industry,” said concluded that the database was still a ‘significant O’Brien. “The ski industry will be able to maintain accomplishment’ in the fight against terrorism. their economic momentum and not face increased Donna Bucella, the director overseeing the insurance premium costs. New Hampshire tourism database, said that the mistakes pointed out by Fine will not suffer a loss in patrons, and insurers will be had already been corrected and over 16,000 able to provide a product with defined standards for matches have resulted since the system has been up recovery.” and running.

Big ‘I’ rejects ‘optional federal charter continued from p.1

and insurance producers have many issues on the all of their coverages, such as their homeowners, table. For example, agents who inevitably would auto, life, umbrella, business insurance and others, represent both federally-regulated and state-regulated said Rusbuldt. “Consumers would be calling their companies would still have to be licensed in the state insurance department or a bureaucrat in states, in addition to also having to add a new federal Washington for different coverages.” license and education requirements. This just adds The Big ‘I’ is the nation’s oldest and largest national another layer of federal licensing and regulation.” association of independent insurance agents and The OFC would also impose burdens on brokers, representing a network of more than consumers who would have to know and 300,000 agents, brokers and their employees in all understand which regulator their companies had for lines of insurance.

US flight insurance contentious continued from p.1

for disruptions caused by labour strikes, but company for over three years), if your home is passengers are already protected in these cases, rendered ‘uninhabitable’ through fire, vandalism or where competitor airlines usually honour other a natural disaster, or if you are called for jury airlines’ tickets. service, although you can sometimes be excused Also, the policies cover you if cancellation occurs from long trials if you have evidence that you have due to a natural disaster or bad weather, but in already booked a vacation. such circumstances, airlines usually waive change Apparently, the most common claim on these fees to allow passengers to re-book their trip. policies has so far been in cases of illness or injury; Cover is also offered for traffic accidents, if they where these policies offer relatively inexpensive happen on the way to the airport, and terrorism, piece of mind. They are not suitable for travellers but only if your destination country gets hit within who may merely change their mind about when 30 days of your departure and hasn’t been targeted they’d like to travel, but the coverage, even if it is within the last six months. It also covers you if you limited, may just fill a gap that other travel policies are made redundant (and have worked for the leave wide open.

International Travel Insurance Journal www.itij.co.uk NEWS 5

GRAPEVINE•GRAPEVINE•GRAPEVINE•GR APEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE The problem with Travelling gizmos pack suitcases G GRAPEVINE medical screening Long gone, it seems, are the days of taking a good Apparently, more than a quarter (28 per cent) are novel abroad to wallow away the hours on a beach. leaving behind books to make sure there is enough Sainsbury’s Now, tourists are more keen to show off their latest room for their technology – 17 per cent foregoing No kissing in Bank is calling gadgets. In fact, statistics have shown that nearly a third trainers and 16 per cent their beach towel. for the travel of UK tourists are squeezing £500-worth into their However, even with such a heavy load, a third (34 per Zanzibar insurance suitcases, and one in 10 are packing more than cent) of those who suffered gadget theft while abroad industry to £1000-worth of various electronic equipment. The were not insured. As a result, 13 per cent of these Tourists heading to Zanzibar are being warned to improve its problem is, thieves are as eager to get their hands on were forced to shell out limit affectionate behaviour after Islamist groups medical the latest high-tech more than £200 on have expressed their concern over ‘inappropriate screening contraptions, and tourists replacements. behaviour’. procedures as are often coming home Chris Price, Head of Direct Farid Hadi, Chairman of the Zanzibar Imams’ it believes with less in their bags, Top 10 most popular travel gadgets Line Travel Insurance, said: Association, said: “Tourists should not indulge in many may not rather than the norm of 1. Mobile phone (85 per cent) “As the Direct Line research sex acts or kiss openly; this is not something that be more! 2. Digital camera (74 per cent) shows, holiday theft is on the people can accept.” sophisticated Research from Direct 3. Camera (43 per cent) increase as holidaymakers The Association also made known their concerns enough to Line Travel Insurance 4. Camcorder (28 per cent) are becoming more and over the number of bars that are opening up on provide people with adequate cover should they indicates an upsurge in 5. CD player (27 per cent) more reliant on gadgets the islands of Tanzania, but they are being have a medical condition. gadget theft this summer, 6. Ipod/MP3 player (17 per cent) such as mobiles and iPods discouraged to take legal action because of the The UK bank is concerned that this could be as an estimated 38.3 7. Laptop (10 per cent) and want to be able to use wealth these establishments bring to the resulting in thousands of people being needlessly million Brits take their 8. Palm pilots (PDA)/Portable speaker (six the technology whether at economy. turned down for cover or being provided with shiny new gizmos, per cent) home or abroad. inadequate or expensive travel insurance. including iPods, digital 9. Minidisk player/Portable DVD player However, while they’re A well as urging insurers to improve their screening cameras, mobiles and (five per cent) spending a small fortune on procedures, the bank is also encouraging people to laptops, on holiday. 10. GPS/Currency converter (four per cent) these gadgets, many still shop around for their travel insurance as this will According to the research, don’t take out the Trouble in paradise help ensure they receive a competitive quote. If more than four-fifths (85 necessary insurance cover Travel advisories issued by Australia have they have a medical condition, shopping around, per cent) of Brits, unable to to protect them while they’re away. frequently been a source of frustration to explains Sainsbury’s, could increase their chances of be parted with their latest technology, will take their “The last thing holidaymakers want to do when they destinations in Asia, reports TravelWeekly, but finding an insurer that has a screening process that mobile abroad, 74 per cent will take digital cameras, a come home is to shell out money on replacement now the shoe is on the other foot, as Japan’s understands the risks associated with their fifth (17 per cent) will carry iPods or MP3 players and a gadgets. We’d therefore advise holidaymakers to Foreign Ministry has issued a warning about condition. hardcore 10 per cent will pack their laptop. consider travel insurance to protect against this Queensland’s Gold Coast. Michael Liddell, travel insurance manager at How do they fit these gadgets in, one may wonder? additional expense.” The ministry’s website lists a string of recent Sainsbury’s Bank, said: “While most travel insurers assaults and robberies on Japanese tourists in will review medical conditions on a case-by-case Surfers’ Paradise, and the warning advises tourists basis before deciding what level of cover, if any, can not to leave valuables even in locked rooms, or be provided, some can unfortunately be very black open a wallet in front of people, and advises and white and may choose to refuse cover right Enforcing passengers’ rights people to keep a tight hold of handbags. away. Holidaymakers should be aware that not all Tourism minister Margaret Keech said the Gold insurers are the same. We believe travel insurers The European Commission (EC) has sent out a efficiently and that the approach differed from one Coast has been unfairly treated: “I don’t believe need to be more flexible in how they assess the risk warning to member states that they must be tougher country to another, meaning compensation was not the Gold Coast is any worse than any similar of illness, and adjust the level of cover provided on complaints about always received as smoothly as destination anywhere in the world.” accordingly.” delays and flight the Commission had hoped. Premiums can be loaded to take account of higher cancellations to help The Commission has demanded risks, but an individual with an existing illness will protect air passenger that each country of the EU send usually be happy to pay a higher premium for piece rights in line with the ‘precise and detailed’ information of mind, added Mr Liddell. new regulations that about the number of complaints $8,700 lunch He went on to claim that insurers’ failure to ask the came into force this received from passengers and right questions and assess medical conditions year. the resources available to Carol Birmingham almost had a coronary when effectively may also fuel the cases of people The regulations give air enforce the regulations that are she realised the Big Mac she had purchased inadvertently forgetting to disclose an illness, leaving passengers the right to aimed at reducing the frequency probably just cost her $8,700. them without adequate cover should they need it. compensation when of denied or delayed boarding at The 62-year-old British tourist only realised the In conclusion, Mr Liddell is urging holidaymakers to their flights are cancelled airports within the European next morning that she had left her cash-stuffed make themselves better aware of the medical or they are denied Union. wallet at MacDonald’s branch in Orlando, screening process and watch out for insurers with boarding because of The EC even warned that those Florida. no medical screening procedures – where cover, he over-booking. members not complying could The woman’s purse contained a down payment says, is invariably denied or excludes the traveller’s However, since the face legal action. “The for a holiday home, but, to her amazement, an condition – and insurers without adequate screening regulations came into commission reserves the right to assistant manager at the fast-food restaurant procedures – where insufficient cover may be effect in February, the initiate infringement proceedings turned the money over to the county sheriff’s offered. Commission has if it ascertains that the member office, and it was returned to her immediately. “Thousands of people will have travel insurance received ten times as states are not giving due priority The next day, Ms Birmingham returned to the claims turned down this year,” he stated. “To make many complaints as to the protection of air branch to offer a reward to Ilona Barattin, 23, sure medical screening is not a problem in the before. It has been passengers’ rights and are not and fellow manager Aileen Norris.

future, holidaymakers should shop around to ensure found that national applying the European •G they receive adequate cover at a fair price.” bodies are often unable to process such complaints Regulation,” said a commission spokesperson. RAPEVINE•GRAPEVINE•GRAPEVINE•GRA PEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•GRAPEVINE•

www.itij.co.uk International Travel Insurance Journal

INSURANCEMATTERS 7

Mapfre expand in European Parliament says yes Argentina The European Parliament has approved a new deal available wherever it is to be found in the EU.” Mapfre plans to more than double its number of directive for regulation of the reinsurance industry Ireland’s Dublin International Insurance Marketing offices in Argentina over the next two years as across all its 25 member states. The directive means Association (DIMA) CEO Sarah Goddard part of a new expansion drive announced by that European Union (EU) members would be commented: “This vote signals a new and exciting country chairman Diego Sobrini. By David Ing regulated under one set of standardised supervisory era for the reinsurance market operating in Ireland. rules and the EU would introduce level regulatory Over recent years, Dublin has become a major Aiming to be the third biggest insurance group in requirements for reinsurers operating across Europe. centre for the reinsurance business, and Ireland is Argentina by the end of the financial year, the Up until now, there have been no co-ordinated now one of the few net ‘exporters’ of reinsurance in company currently claims around 6.5 per cent of reinsurance supervision rules in the EU. The the European Union. By adopting the provisions of the market. The target is to have at least 500 offices European Commission is the Directive early, Ireland by 2007, although Sobrini said this was only the welcoming the move, is sending out a clear ‘first goal’ and that the number could be higher. and said the lack of a EU message that it champions Around 40 per cent of business is expected to be in regulatory framework for the cause of prudent the capital region of Buenos Aires, but it is in the reinsurance has resulted regulation. To this end, interior of the country where economic growth is in significant differences the market is working expected to be higher and where the company in the level of closely with IFSRA, the hopes to pick up business – especially on small and supervision of [national] regulator, to medium-size company clients. reinsurance undertakings develop a regulatory Spain’s biggest insurance company began its last between different EU framework that embodies expansion drive in the Argentinean market three member states. both the Reinsurance years ago, shortly after the severe financial crisis that The Commission Directive and international hit the country at the end of 2001. believes the different standards of supervision.” Since then it has grown from 60 offices to around national rules have led to Commenting on the EU’s 220, including one in the Antarctic that is claimed to barriers to trade within the EU’s internal market, as reinsurance directive, a US reinsurance expert be the most southerly on the planet. Staff numbers well as giving rise to administrative burdens and suggested the US should adopt a similar legislation. are due to reach 1,400 by the end of 2005, costs. “I think the time is also very ripe for US states to compared with 500 in 2002. The proposed legislation, known as the ‘Reinsurance adopt similar or identical standards for reinsurers,” Sobrini said the previous expansion had shown Directive’, should ensure that all reinsurers operating said Debra Hall, senior vice president and general Mapfre had not been tempted to abandon the in EU countries are operating under the same counsel at the Reinsurance Association of America. Argentinean market despite the economic difficulties regulations. The idea is that reinsurers would get a “Here in the United States, we don’t have New York the country had gone through. regulatory ‘passport’ and be supervised by recognising California, or California recognising The latest plans to extend the branch network will competent authorities in their ‘home’ country, but Illinois. We ought to be subject to regulation by one involve an investment of around €4.3 million, he be allowed to operate throughout the EU, while regulator, not by 50.” added. There were no plans to buy up other reporting only to their home supervisor. This would European member states will have to apply the companies. Sales this year are expected to grow by eliminate the need for reinsurers to apply to be directive two years after adoption. However, in more than 16 per cent. regulated in each EU country where they sell order to take account of potential difficulties that reinsurance. Member States might encounter with the abolition EU Internal Market and Services Commissioner of collateral requirements in national legislation, the Charlie McCreevy claimed: “The directive will fill a European Parliament has proposed a transitional gap in current EU legislation, which does not period of 12 months to comply with this Insurers tackle age regulate specialised reinsurers, and give insurance requirement in addition to the two years provided issues companies greater confidence in seeking the best for the application of the directive as a whole.

Insurance industry bodies, government departments and employer representatives in the UK have launched a campaign to promote best practice and Analysts predict Swiss Re focuses help employers ‘Be ready’ for legislation on age discrimination, scheduled for October 2006. P&C price drop on growth The Age Partnership Group (APG), supported by the Association for British Insurers, is currently Analysts at Cochran, Caronia & Company, the Swiss Re is re-structuring itself into three business mailing employers, outlining best practice independent investment banking firm specialising in functions to be named Client Markets, Products and information to help them create an age diverse the property and casualty, life and health insurance Financial Services. workforce. industries, is predicting, based on cash flow, that “Swiss Re aims to bring its organisation closer to our A spokesperson from the APG said: “We are aiming P&C prices are due to bottom out by 2007. customers, deepen our focus on product skills and to highlight “We believe cash flow is a reliable tool to further enhance financial returns, including the to predict pricing cycles, and based on current acceleration of risk securitisation. The new businesses industry conditions, we’re predicting a organisation better positions Swiss Re in pursuit of of all sizes significant drop in industry cash flow in 2006, these objectives,” said John Coomber, Swiss Re’s the benefits and the bottoming out of the pricing cycle by chief executive officer. of 2007,” said Adam Klauber, an analyst at The Client Markets function, headed by Jacques employing a Cochran, Caronia & Company. Aigrain, consists of four divisions: Americas, Europe, workforce “If the past is any guide, we can expect a Asia and Globals & Large Risks. These divisions will with a particularly sharp deceleration in premiums in drive Swiss Re’s growth across all lines of business, strong age 2006. That’s because cash flow historically focusing on client needs, market trends and mix. People rises one to two years before cycles hit promoting product solutions across distribution should be bottom and premiums flatten. The last peak channels at the point-of-sale. employed in cash flow took place in 2004.” The Products function, headed by Stefan Lippe, will according to The analysts’ study also predicts that the consist of the following units: Property & Specialty, their skills, industry will see shorter cycle durations. Casualty and Life & Health. These units will steer abilities and “We believe that the pricing cycle’s pace is the profitability of each line of business through potential, quickening. The time from cycle peak to disciplined underwriting and consistent pricing. The not because trough should fall from an average of eight Products function will also identify, evaluate and of their age. years to two to three years for the current pursue innovation opportunities and ensure We firmly cycle,” Mr Klauber said. “This is because the consistent claims management across markets and believe that increasing difficulty to use finite reinsurance, lines of business. an age heightened scrutiny by rating agencies and an The Financial Services function, headed by John diverse overall emphasis on transparency all Fitzpatrick, will retain the existing units of Credit workforce is contribute to hastened shifts from pricing Solutions, Capital Management & Advisory and a successful peak to trough. As insurers begin to use less Asset Management, focusing on the performance of workforce. finite reinsurance, that should hasten the shift from Swiss Re’s asset portfolio and its financial market “The new legislation means employers will no pricing peak to trough,” he added. activities. These three units are complemented by a longer be able to selectively recruit, train, promote According to the study, insurance companies are dedicated Insurance Risk Transformation unit, or retire people simply on the basis of their age. likely to see cash flow in 2006 decline to $40-$45 instrumental to transforming Swiss Re’s business However, we’re confident that employers, large and billion from an estimated $75 billion in 2004 and model from buying and holding reinsurance risks to small, will naturally see the benefits of an age show a ‘surprising over reliance on investment buying, transforming and selling these risks through diverse workforce before they are forced to.” income’. securitisations to the capital markets.

www.itij.co.uk International Travel Insurance Journal 8 INSURANCEMATTERS NEWSWIRE Brokers to change? NAIC approves tandard & Poor’s Ratings Services has issued a S report entitled Peer Comparison: Bermuda With the buzz word of the moment – contingent Deloitte found that greater voluntary disclosure risk regulations Property Catastrophe Reinsurers, which examines commission – being banded around and leaving a could reduce conflicts of interest and possibly differences between five Bermuda property bad taste in the industry’s mouth, insurance analysts eliminate the need for companies to divest The National catastrophe reinsurers. The report focuses on lessons have been looking at how to recuperate, adapt and operations that are seen as presenting conflicts. Association of learned in 2004, when new records were set for show the world that, actually, contingent commission More voluntary disclosure, the report found, could Insurance storm-related damages, which in turn are driving a does not have to be a bad, just more transparent. also help reinsurers distinguish legitimate risk transfer Commissioners change in a reinsurance line that is characterised by “Insurers and broker intermediaries need to redefine in their finite risk operations. (NAIC) has high profits and high volatility. their roles and formulate new financial models that “What is needed to solve this problem is a clear approved eliminate industry cross-subsidies,” stated a report by understanding of the various insurance players’ roles regulations NG Capital Life Insurance has opened a joint Deloitte. and the value they provide,” Deolitte’s report noted. regarding finite I venture insurance branch in Beijing. It has also The report also warned that if the industy doesn’t “Only then can the industry devise rational risk, meaning received licence to extend its operations in Liaoning, a change, they risk having it done for them by compensation structures.” enhanced province in north-eastern China. This move, as well as overzealous regulators. Ryan said that infrastructure issues would be brokers’ disclosure the purchase of a 19.9-per-cent stake in the Bank of “Most companies would prefer self-regulation than biggest challenge. requirements for Beijing, was apparently part of a policy of deliberately having a more formal state and federal regulation,” The insurance brokerage executives at Standard & insurers that measured expansion in China. said Owen Ryan, US and global managing partner Poor’s insurance conference, ‘Insurance 2005: utilise reinsurance with Deloitte. “The industry has to move quickly to Under the Microscope’, echoed the Deloitte report with limited risk viva, in the UK, has decided against moving any repair the damage that has been done in the eyes of and said they believed brokers would survive the transfer features. A more work offshore, after creating 8,000 jobs in the community.” contingent commissions investigations and agreed Finite insurance has received a great deal of negative India over the past two years. It is felt that the natural Deloitte’s report said that while contingent that, although settlements to end contingent press recently because of its irregular use by some balance of jobs between India and the UK has been commissions represent little more than five per cent commissions by the four large national brokers insurers, and Eliot Spitzer’s mission to expose the reached, especially after the company’s takeover of of the total 2003 revenues of the 100 largest (Marsh & McLennan, Aon, Willis Group and big players. the RAC, which leaves 41,000 employees in the UK. brokers, they ‘exemplify fundamental inconsistencies Gallagher) will hurt the industry in the short run The NAIC has been evaluating finite reinsurance Meanwhile, Aviva hopes to win two more licences to in insurance placement economics’. The report because of lost income, brokers will benefit over the disclosure requirements and has now proposed sell life assurance policies in China. If successful, it added that compliance reform is needed in the long-term because of the more transparent disclosures. It is suggested that insurers will be would take the number of city life assurance licences ‘post-settlement landscape’ and that those who act environment that has been created. required to report to state regulators any finite held by Aviva’s Chinese joint venture to seven. now may gain a competitive edge. However, the conference did warn that another reinsurance agreement that has the effect of altering “While regulation provides an important foundation, consequence, apart from more disclosures, is higher policyholder surplus by more than three per cent or urich has announced that its Australian entities companies must themselves set the tone of premium commissions as some brokers seek to representing more than three per cent of ceded Z Zurich Financial Services Australia Limited compliance if they are to restore the public’s trust in make up for the lost contingent-commission income. premium or losses. Additional reporting (ZFSA) and Zurich Australian Insurance Limited their integrity,” Ryan said. Also, yet another consequence will likely be a requirements regarding contract terms and (ZAIL) have reached a settlement with both the The report also suggested that while many firms may greater emphasis on the diversity of product management’s intention in entering the contract Australian Prudential Regulation Authority (APRA) and divest operations that could be seen as a conflict of offerings. Instead of focusing on one line of have also been included to improve transparency. the Australian Securities and Investments Commission interest, these divestitures could hurt the insurance insurance, it is thought that brokers will make more The NAIC Property and Casualty Reinsurance Study (ASIC). APRA will not take any legal action against trade by reducing brokers’ ability to fill in gaps in risk of offering their other lines as well. Executives also Group has also approved a standard attestation ZAIL and ZFSA in relation to any matters arising from transfer. agreed that brokers will have to match more form to be signed by the insurer’s chief executive the investigation into certain reinsurance “We understand the need to reduce the appearance carefully the costs to expenses in the lines they are officer and chief financial officer confirming that there arrangements entered into in 2000. of conflict of interest,” Ryan said. “But the major brokering. are no side agreements and that risk transfer has brokers have done a great service over the past 20 One thing is for sure, times are certainly changing for occurred. tandard & Poor’s Ratings Services announced that years in putting their capital at risk setting up reinsurers, yet the outlook seems positive, if a little “The proposed enhanced disclosure requirements S it has withdrawn its ‘A’ long-term counterparty insurance companies in the wake of disasters.” complex. and the attestation by company management will credit and insurer financial strength ratings on Imperio clarify the overall impact of finite reinsurance on the Bonanca Companhia de Seguros S.A., an insurance industry,” said Joe Fritsch, director of insurance operating entity of Portuguese state-owned banking accounting policy for the New York Insurance group Caixa Geral de Depositos S.A. Department and chair of the Study Group. “Since this issue is a priority for state insurance .M. Best has affirmed the financial strength regulators, we believe that this approval will allow A rating A+ for Hang Seng Insurance Company the enhanced disclosure of these practices to be Limited in Hong Kong, with a stable outlook. Best identified in the NAIC 2005 property and casualty noted that Hang Seng demonstrated stronger risk- financial statements.” adjusted capitalisation over the last fiscal year and its The NAIC will also distribute a survey to insurers underwriting performance has remained consistently and actuaries to determine what risk transfer tests profitable over the last five years. are being used for these agreements and what minimum risk transfer requirements industry ssurex Global, the privately held risk practitioners currently use. A management and commercial insurance brokerage group, has expanded its worldwide presence with the addition of an international broker partner, Trafalgar International Ltd, in Bangkok, Thailand. Trafalgar’s clients span a broad range of industries, Zurich taken to including construction and engineering, power and energy, marine, metals, telecommunications, hotels task by APRA and leisure, food and beverage, and financial institutions.

Zurich Financial Services is the latest insurer to have nipol, the Italian insurance company, has been found using irregular financial reinsurance Uincreased its stake in Banca Nazionale del contracts to boosts its profits, according to Lavoro (BNL), the target of a bid by Spain’s BBVA, to Australian regulators. 10 per cent. Unipol is not thought to be able to Two local subsidiaries of Zurich have been accused mount a counter bid for BNL on its own, but if the of deliberately misrepresenting the nature and BBVA bid fails, some speculators are suggesting that accounting treatment of two financial reinsurance Unipol might then combine with an Italian bank or contracts over a long period of time. The Australian strike a deal with other interested groups. Prudential Regulation Authority (APRA) has suggested that the General Re contracts with Zurich nsurance Australia Group (IAG) has agreed to have resulted in the profits of one of the Swiss I purchase a stake in Royal and SunAlliance group’s local subsidiaries being overstated in 2000 (Thailand) Ltd. It marks IAG’s second investment in by AUS$61 million, turning a loss of AUS$24 million the Thai market – in 1998 it acquired a 20 per cent into a AUS$37 million profit. “The effect of this stake in another general insurer, Safety Insurance. The action was that the [subsidiary] appeared to meet investment fits in with the company’s strategy of the regulatory solvency requirement when it did building a portfolio of general insurance assets in Asia. not,” APRA said. It also added that Zurich had co- R&SA (Thailand) writes both personal and commercial operated fully. business and generates approximately AUS$35 million “While the undertakings resolve APRA’s issues from in annual gross written premium. the investigation in relation to [Zurich], APRA is still to consider what action, if any, it needs to take in XA has reported its 2004 results under relation to individuals who were involved in these A International Financial Reporting Standards transactions,” said APRA. Zurich says that there will (IFRS) principles. Last year's net income amounts to be no impact on its 2005 results. €3,738 million under IFRS.

International Travel Insurance Journal www.itij.co.uk INSURANCEMATTERS 9 NEWSWIRE arsh & McLennan has said it is conducting a Personal lines M strategic review of all its businesses, which is expected to finish in July, but also added that sales of market softens major units are unlikely to be in the immediate future. Even though, in recent months, Marsh has reportedly The latest report from Standard and Poor’s Ratings received half dozen or more unsolicited proposals from Services states that the outlook for US personal investments bankers to sell its Putnam Investment lines insurance sector is stable. Despite witnessing asset-management unit. its worst catastrophe losses ever (approximately $27 billion) in 2004, the sector is experiencing a n executive of Berkshire Hathaway Inc.’s relatively soft cycle. Market conditions are A General Reinsurance, John Houldsworth, is to apparently similar to those that helped result in the plead guilty to a charge of criminal conspiracy in last soft market of 1987 to 2001. relation to a transaction the company made with AIG. “Weakened fundamentals, declining premium rates, Mr Houldsworth’s co-operation could lead to further and rising interest rates could all affect the sector’s investigations into the reinsurance business of General operating performance,” said S&P credit analyst Re. Mr Houldsworth could face up to five years in Polina Chernyak, and although falling rates in the prison. The Securities and Exchange Commission has casualty sector are not being reported across the also charged a senior executive of General Re, Richard board, they are in the property sector, where seeds Napier, for his role in the same fraudulent reinsurance of uncertainty are beginning to grow. transactions committed by AIG. “The personal lines sector is at a crucial point now, a point at which companies could be tempted to assachusetts Attorney General Thomas Reilly is discount product offerings to build market share,” M investigating MassMutual Financial Group’s said Chernyak at the beginning of June. “The former chief executive, Robert O’Connell, for concern is that this trend towards weaker operating wrongdoings. MassMutual’s board of directors has results could soon reassert itself, especially given the accused O’Connell of abusing his position to reward higher yields available on investments as interest himself at company expense and punish subordinates. rates rise generally in the US financial markets.” Investigators are now trying to uncover whether state The general result of the softening environment has laws were violated. Mr O’Connell denies any been greater advertising budgets and looser wrongdoing. underwriting standards in certain corners of the market, although improved pricing and firm unich Re is to become the biggest shareholder underwriting accuracy have meant improved M in a combined UniCredito/HypoVereinsbank performance for the personal lines sector over the (HVB), in a development that could lead to a huge last several years. expansion of its existing bancassurance relationship with HVB. Munich Re will have 6.3 per cent of UniCredit, following the acquisition of HVB. Advisors to the deal say no definite agreement has yet been reached on the future insurance partner of the bank. Ground Zero Allianz will be the fifth biggest shareholder. compensation joint study has been carried out by GE A Insurance Solutions and the Institute of New claims are arising from the state body that owns Insurance Economics of Switzerland’s University of St the land at Ground Zero, suggesting that it might not Gallen, of the German reinsurance market from the be over for the insurers of the destroyed World Trade point of view of the buyer. GE said the Reinsurance Center in New York. Market Index polled primary insurers on key market According to reports, the Port Authority of New York indicators such as rate online, attachment points and and New Jersey is demanding a further $2.1 billion limits for non-proportional, as well as ceding from its insurers, which include several Lloyd’s of commissions and retentions for proportional treaties. It London underwriters as well as France’s AXA and concludes that the reinsurance market in Germany at Denmark’s Copenhagen Reinsurance. 2004 renewals appeared stable for most lines of Lloyd’s members have already paid out around $350 business. million of a $3.5 billion insurance policy on the World Trade Center held by the property developer Larry CE Limited has become the latest Bermuda- Silverstein and $950 million to the Port Authority. A based insurer to receive a subpoena from the US However, the Port Authority says it should have Attorney for the Southern District of New York, David additional compensation under a policy it had on the Kelly, as part of the ongoing investigation into finite risk Center site that was separate to Mr Silverstein’s policy. insurance products. ACE intends to comply with the The insurers, who have launched legal action, believe subpoena. Insurer CNA Financial Corporation has also that the contract, a general guarantee of coverage if a received a subpoena from Kelly. The US Securities and tenant in one of its buildings were to suddenly go Exchange Commission is also wanting CNA to produce bust, cannot be used given that the Silverstein policy documents related to its recent financial restatement, was in place. The battle is expected to take up to two especially its relationship with Accord Re Ltd. Again, years. the company has said it will co-operate fully.

merican Independence Corporation (AMIC) has A been upgraded by A.M. Best rating to B++ from B+. The company has a stable outlook. AMIC is Reinsurance US principally engaged in the health insurance and reinsurance business through Independence American The European Commission is rebuking the US over Insurance Company and its managing general rules that force European reinsurers operating in the underwriter division. US to put aside billions of dollars to cover future payouts on outstanding claims. ussian Ingosstrakh Insurance Company outlook Peter Skinner, a UK member of the European R has been revised by Standard & Poor's Rating Parliament, said action was needed to stop the US Services to positive from stable, following improved risk ‘ripping off’ European reinsurers. in its investment portfolio. S&P also affirmed its BB “It has to be said very directly to the US that the long-term counterparty credit and insurer financial logical consequence of all of this is, at the end of the strength ratings, as well as its ruAA Russia national day, you could find yourself in a World Trade scale rating on the insurer. Organisation case if this does not get resolved in a voluntary process,” he said. eneral Re is in talks with the US government to Under the current rules, for a US company to be able G settle a criminal probe into whether the to take credit in its balance sheet for reinsurance insurance unit of Warren Buffett’s Berkshire Hathaway purchased from a non-US reinsurer, the non-US Inc. aided AIG in distorting its finances. One option company needs to deposit in trust up to 100 per cent for General Re is to enter into a so-called deferred- of outstanding claims. Suggestions coming forth, for a prosecution pact and thus agree to a number of fairer system, include a ratings system that would see settlement terms. Talks are ongoing to resolve only financially weaker reinsurance companies having the issues. to put up such a deposit.

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New air ambulance Tug of war in Maui IAFP supports for central CA Debate is surfacing on the Hawaiian island of Maui amount of calls,” he said. USEMSA over the use of Maui Memorial Medical There is another good reason for using the Center’s medevac helicopter for patient helicopter in more than just 911 cases, however. It is The International Association of Flight Paramedics transfers. Protocal dictates that private providing a life-saving service in some of the outlying (IAFP), based in Georgia in the US, has announced company Hawaii Air Ambulance (HAA) is to regions of the county that are far away from medical its support for the development of a US Emergency be called for such services. In these cases, Medical Services Administration (USEMSA). The transfers, but in an hours can be saved by using Association’s Board of Directors approved a position increasing number of the helicopter, as opposed statement in May outlining a dramatic need for the cases, the company is to fixed-wing craft or establishment of such an agency. being bypassed in favour ground ambulance. Curt Entitled Emergency Medical Services in the 21st of the state-run Morimoto of American Century: Strengthening Our Presence in the Federal helicopter service. Medical Response, the Government, the position statement agreed with a Although HAA operates ground ambulance company recent George Washington University information fixed-wing aircraft, which that received the state brief stating the USEMSA should be modeled after, are considered safer, less contract to run the and be at an equivalent level to, the US Fire expensive and capable of helicopter programme last Administration (USFA) under the Department of providing a higher level year, also explained that it Homeland Security. The IAFP joins a growing of patient care during a was expected that the number of other associations, including the National Air ambulance services just improved in central flight, issues with air ambulance helicopter wouldn’t respond Association of EMTs, in supporting the university California with the stationing of a helicopter at the delays have forced the medical to many emergencies in report. Hanford Municipal Airport in King’s county. SkyLife centre to make use of the central and west Maui, as it Although several other organisations believe existing Air Ambulance service will station the aircraft at the helicopter service. Wait times would be just as efficient to federal offices should remain as is, with a airport until the beginning of September as a trial for HAA planes can vary, but move patients in a ground requirement only for a Federal Interagency period, and if it proves useful, the service could be they average four of five hours, ambulance. Adding to the Committee to co-ordinate their efforts, Ron Walter, extended year-round. says Maui Memorial CEO helicopter delay in these IAFP President, stated: “We have waited a long time “Historically, [this] is peak season for trauma and Wesley Lo. Meanwhile, non- particular regions is the fact for EMS, which includes our members in air medical helicopter service,” said Daniel Lynch, administrator emergency patients can wait a that the helicopter services, to have a strong, cohesive voice in the for Central California Emergency Medical Services day or more for transport. ambulance does not have a federal government … [We] believe the creation of Agency. Air ambulances have been requested 135 Doctors are required to use dedicated medical crew, so a USEMSA will best advance our essential role as times in neighbouring Tulare county since May the helicopter only when a HAA plane would take has to pick up medics from Kula or Wailea en route. public safety and healthcare providers. We 2004, and SkyLife alone responded to 240 calls in more than two hours to respond, but ‘sometimes Another restriction with the helicopter is that it is encourage our fellow EMS professionals, especially Kings county last year. protocols are followed and sometimes they are not’, unable to fly in the dark, and can be grounded by those in air and ground critical care, to join us in this Previously, air ambulances for trauma calls in Central according to HAA CEO Andrew Kluger. “There are bad weather. So, the situation isn’t perfect and Maui exciting initiative.” California came out of Fresno or Bakersfield, taking a number of doctors at Maui Memorial that feel the is sometimes facing serious gaps in its ability to about 40 to 45 minutes for ambulances in those helicopter is there to serve the hospital,” he said. respond to emergencies – with HAA planes busy cities to reach Kings and Tulare counties, said Lynch. Kluger added that his company’s response times and the helicopter unable to take off due to a lack of For level-one trauma treatment, the helicopters depend on how many patients need to be day- or moonlight, delays are becoming the norm. then have to travel to University Medical Center in transported, and which ones are the most critical. “We’re stunned that this is an island state…and we Need for localised Fresno. So, by adding this new helicopter station, “There are many days when there’re not any delays, have this air transport that regularly leaves us response time in the area has been reduced, which and there’re some days when there’re an inordinate hanging,” said Dr Pedro Giron, “It’s inadequate.” helicopters ‘could make the difference between life and death’, states Lynch. Medical helicopters have been in greater demand recently, as the population continues to grow in Horry in the US, South Carolina’s largest county. That makes four Redstar jet ready However, the nearest two air ambulances are based 30 to 40 minutes away at level-one trauma centres Simulator training Canadian Global Air Ambulance is pleased to to go in North Carolina; but a new initiative aimed at announce that its fourth owned and operated saving valuable time and lives takes off Learjet 35 is now officially on the company’s could reduce this response time operating certificate. The aircraft will be Vancouver- by about a third. Team DRF, an initiative of German Air Rescue, has based, and available to the company’s insurance By teaming up with a nearby been successfully training its aeromedical staff using industry customers. medical emergency flight service, realistic simulation sessions. In an effort to maximise It comes out of a fresh 12,000-hour inspection and local officials are looking at over patient safety, the air rescue alliance has run several has tandem capabilities, having undergone significant 25 sites throughout the county courses for its medical team. re-equipping for unrestricted worldwide operations: as landing zones for helicopters Last year, DRF organised seven such training RVSM airspace, TCAS (Airborne Collision in preparation for a new service courses for the international repatriation and Avoidance), TAWS (Terrain Avoidance and that could be in place by evacuation team, and five simulator training courses Warning), and upgraded VHF radio frequency range autumn. at its helicopter bases. In this way, adapting to and spacing requirements for European operations. Recently, one of the local air patients’ varying medical ambulances was in use and the status and practicing how to other was in maintenance, when prioritise treatment a call came in from Horry diagnostics and strategies, County requesting an which can change very emergency helicopter transfer. A quickly, especially in pre- helicopter had to be sent from hospital treatment, can be Columbia in nearby Georgia, carried out. Redstar Aviation in Turkey is pleased to announce taking almost an hour to reach the crash victim, The courses use simulated the delivery of a BAE-manufactured Jetstream 32 EP who subsequently, fortunately, made a full recovery. jets, with closing doors and jet. The aircraft was due for delivery on 22 June and Injuries in Horry County have increased annually, real engine sounds and live was purchased following a full C check and overhaul relative to the increase in the population, so the transmission outside of the in the UK. demand for a more local aeromedical service is craft for video-assisted de- The aircraft will be fully ICU-equipped, with two greater than ever. “The reality is with more people briefing for the whole team, state-of-the-art Spectrum Systems stretchers, and we have problems, and that means we need [an air including doctors and will be offering full air medical services in Turkey and ambulance service],” said the county’s public safety paramedics. neighbouring countries. director, Paul Whitten.

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12 HEALTHMATTERS

TEMOS signs up Breathless air travel Expert tips to help prevent TD more hospitals Forget the mile-high club, feeling breathless on a Of the estimated 64 million overseas journeys that with sterilisation tablets for cleaning teeth. Avoid flight could be down to a lack of oxygen to the will be made by UK citizens in 2005, statistics foods that have been washed under the tap, and TEMOS is creating a network of partner hospitals to blood, researchers report. estimate that up to 50 per cent of these travellers don’t have ice in your drinks unless you are certain it better healthcare for overseas travellers. By John The study, in the journal Anaesthesia, of 84 airline will experience ‘travellers diarrhoea’ (TD) while is sterile. Sanders passengers found that when flights were at abroad, characterised by diarrhoea, cramp and • Handle with care: be vigilant about washing your maximum altitude, more than half of the passengers nausea. hands, particularly after going to the toilet and before TEMOS, the German initiative aimed at improving had ‘oxygen saturation’ levels at or below 94 per In the hope of helping prevent people experiencing preparing food as germs can live on surfaces. healthcare for overseas travellers, has been busy cent, meaning that less than 95 per cent of their red TD, Professor Colette Shortt from the University of • Food safety: stick to foods that are freshly cooked during the spring months signing up new partner blood cells were fully Ulster and and sizzling hot, or fruit and vegetables that you can hospitals in Greece and Turkey. Over 20 hospitals in oxygenated. If this were to Director of peel yourself. Where possible, avoid shellfish (which Greece now belong to the network, 17 in Turkey and happen on the ground, a Science at can carry toxins from contaminated waters); salads one in New Delhi, India. person with such low oxygen Yakult, (which can harbour bacteria, often through being The main purpose of the project is to create an levels would be given explained the washed in contaminated water); unpasteurised dairy international network of hospitals certified to TEMOS, supplemental oxygen. causes of TD produce and dishes containing raw egg. which stands for ‘telemedicine for the mobile society’, All of the passengers that took and has • Restaurant critic: inspect restaurants for flies; if they standards for use by German tourists and business part in the study, whether on created a list are visible on tables or in the toilet, you can be sure travellers. As part of the package, TEMOS hospitals short or long haul flights, of tips on they are present in the kitchen. can teleconference with staff at the University Hospital showed declines in their prevention • Good bacteria: live beneficial bacteria in the of Aachen in Germany for advice on treatment or a blood oxygen levels, with the and intestine help protect your digestive system against second opinion. average oxygen saturation management: unfriendly bugs. Prepare for your holiday by taking a In the longer term, TEMOS plans to develop a system decreasing from 97 per cent “Travellers good quality probiotic such as Yakult or Leben each which will allow individual network partners to share on the ground to 93 per cent diarrhoea can day for a few weeks before travelling and while specialist knowledge and experience. This will include, at cruising altitude. be caused by you’re there. for example, training doctors, medical personnel and Such reduction in oxygen is a range of students by means of ‘tele-education’. TEMOS will particularly worrisome for bacteria and Management also encourage joint scientific research projects in people with heart or lung viruses, • Seek medical attention: always seek medical help if travel-related medicine. diseases – causing a shortness including well- symptoms are extreme or prolonged. Medical TEMOS will be outlining its latest plans at the annual of breath or severe chest known advice should be sought immediately if you notice Medicine and Mobility Congress in Cologne, pain. It could also contribute to deep vein culprits such as Campylobacter, Salmonella, Shigella, blood in the faeces or if the TD is accompanied by Germany, between 30 June and 2 July. The first thrombosis. Other effects include less serious E coli and Rotavirus. fever and/or vomiting. TEMOS Symposium is scheduled for November this problems such as physical and mental fatigue, Transmission usually occurs through hand-to-mouth • Rehydrate: TD causes considerable fluid loss, so year in conjunction with the University Hospital of headache and digestive problems – explaining why contact (for example touching a contaminated drink plenty of clean water. It is also advisable to use Athens. we often feel so drained after a flight, even a surface and then putting your hands to your mouth), an oral rehydration solution to help maintain fluid TEMOS was launched at the end of 2004 by the relatively short one. or through eating food infected with bugs (which and electrolyte balance. University Hospital of Aachen under the umbrella of Co-author of the study, Dr Rachel Deyermond of may have been transferred through flies, or simply • Reintroduce food: start off with liquid-based food the European Space Agency (ESA) in cooperation with Ulster Hospital in Belfast, Northern Ireland, suggests poor restaurant hygiene).” such as clear soups, building up to foodstuffs such as the German Aerospace Centre in Cologne, the that passengers with heart or lung disease should bread and potatoes. Centre for Travel Medicine in Düsseldorf, the Paris- ask for additional oxygen if they start to feel unwell. Prevention • Keep clean: ensure that you continue to wash based company Telemedicine Technologies (TTSA) Healthy passengers may need only to drink some • Be wary of the water: unfamiliar bugs in water are your hands regularly – and do not share any items and several assistance companies, including AXA and water, as dehydration compounds the effects of a common cause of TD. Use only water that is (such as cutlery) with others, in order to contain the Mondial. oxygen loss. boiled, from sealed bottles or that has been treated infection.

International Travel Insurance Journal www.itij.co.uk

14 TRAVELMATTERS

Airbus delays US rail future under review US cruise industry disappoint buyers The future of the American national rail line, Amtrak, rational passenger rail system would emerge with booming has been the subject of much deliberation in recent service on routes where there is real ridership Delayed delivery of the new giant airliner, the Airbus years, especially since Congress insisted that it demand and support from local governments,” said A380, is said to have left carriers Qantas and become self-supporting within five years. That was the Department of Transport (DOT) in a statement Singapore Air ‘disappointed’. After a successful and actually in 1997, but now the company is keeping a to Congress. highly praised maiden flight from Toulouse-Blagnac watchful eye on the progress of recent Bush The DOT termed the proposed budget cut a ‘call to airport in France, news of the stalled delivery has proposals that call for the elimination of federal aid to action’ for Amtrak and recommended broad changes dampened the initial excitement. Amtrak in its budget for the fiscal year starting in along the lines of those proposed by the The six-month October. government. Rail Europe, a North American setback means that If the Bush subsidiary of the French National Railroads (SNCF), Airbus may have to proposals are also recommended immediate changes, such as Despite the weak dollar, the US cruise industry is compensate the passed, the better high-sped trains, regular maintenance of burgeoning at a rate not seen since the high-flying carriers under national rail tracks, the establishment of a reputation for on-time days of 2000. Higher ticket prices have given some terms of the line could be arrival, and the choice of only profitable routes on passengers initial sticker shock, but this seems to contracts. Qantas forced into which there is proven demand. This way, the US pass quickly, as bookings for the 2005 season are was expecting Chapter 11 could rebuild its dwindling train-riding clientele. And selling out fast, passengers undeterred in their quest delivery in October bankruptcy, the French should know: their TGV high-speed for sunnier climes. 2006, but has been and unlike in trains, with a top operating speed of 186 mph, has The relatively cold weather across the country has informed this date the case of acquired 95 per cent of the combined air-rail market helped this insatiable demand, but people are has been put back airline on the Paris-Avignon route and 100 per cent on the generally feeling optimistic about the economy. And to April 2007. bankruptcies Paris-Nîmes run, says Rail Europe. Especially on trips cruising provides good value for money – especially Qantas chief where the of three hours or less, trains can easily win leading for those wishing to visit Europe. The all-inclusive executive Geoff operations market share over airlines. Greater frequency and nature of sea-based vacations, coupled with the fact Dixon said, “This is continue in airport links will only add to their appeal. that passengers pay for their holiday in dollars, disappointing, given an effort to Environmentaly-minded people will also be much in means that their currency isn’t diminished by the that we have met reorganise favour of reforming the national rail service. For high European exchange rate. A trip across the all of Airbus’ deadlines for Qantas specifications … the business, Amtrak’s assets would be sold off to every market share point in passenger traffic that rail Atlantic for a land-based holiday would mean less However, we are developing contingency plans to satisfy creditors. Obviously, no one wants this to wins from road transportation, said Fabrice Morel, value for money, as accommodation, food and ensure there is no impact on our schedules or happen, but the rail operator is having to fork out to President of Rail Europe, the equivalent of entertainment will all be paid for in expensive euros, available capacity during the six-month delay.” replace old infrastructure, including electric cables approximately 37,000 tonnes of oil is saved; and if rather than largely included in the price of a pre- Strategies to overcome the delay include putting off laid in the 1930s, and repair potential hazards, like won at the expense of air transportation, the market paid ticket, as they are on a cruise. the retirement of some existing aircraft and the 85-year-old Thames River Bridge in share point saving amounts to 60,000 tonnes – a Many customers raced to book their cruises quickly, redirecting capacity. Connecticut. Washington has spent $29 billion on significant environmental saving, not just in natural this year, in order to lock in rates as the dollar Singapore Airlines (SIA), who will take the very first Amtrak since 1971, and has approved $1.2 billion reserves, but on air pollution levels as well. As the declined, leaving many cruise operators with four A380s ever made, is also reported to be for the current financial year. For the existing list of Bush administration has called for an end to US bumper booking levels. Cruise operator Crystal said disappointed at the delay. SIA spokeswoman repairs, however, the rail line needs $1.5 billion next dependency on oil, this is another argument for the bookings for Europe were 129 per cent higher in Samantha Stewart commented, “While we are year as well. administration spending $2.5 billion less on domestic the first two weeks of this year than they were for disappointed that we will experience a delay in The bankruptcy option, the Bush administration programmes in favour of military and security the same period last year; and Royal Caribbean has taking carriage of the new A380 aircraft, we are insists, would force Amtrak to eliminate profitable initiatives. redeployed a ship from the Caribbean to serve working with Airbus to minimise the length of that routes and adopt various reforms to reorganise its In any case, if Amtrak can’t stick to spending within northern Europe, giving it a total of four ships in the delay. It will not affect Singapore Airlines’ ‘First to railroad system and, resultantly, emerge its funding budget, the future could be a very region – the most it has ever deployed in that area. Fly’ position.” strengthened and economically viable due to better different place for the rail line. This could, however, This ability to move ships to different parts of the economics based on competition as well as state lead eventually to a more economical, efficient and world to follow demand is another advantage of government contributions. “Ultimately, a more profitable railroad system. cruising over land-based tourism. In this way, operators were able to change their itineraries to soften the impact of the hurricanes that hit Florida last year. Philly riding high on new cruise trends So, with strong demand for their product, advance bookings at a level not seen since before 9/11, and Philadelphia is heading full steam towards becoming Will this mean that other ports lose out to this new tickets flying off the shelves even at higher prices, it a major port on the US East coast, as a growing competition? Most likely not, thinks Frank L. Nocera, looks like all is going perfectly well for the cruise trend sees more and more people choosing to Visit Florida President and CEO. Ports closer to industry. The fact that the early booking trend is begin their vacation closer to home. With 25 per Philly, such as those in Baltimore, New York, Virginia leading to a reduction in revenue growth, fuel costs cent of the country’s population within a five and a and Boston, may lose passengers to their neighbour, are high, and some cruise lines are experiencing half hour drive of Philly, as well as the state’s port but Florida, he says, is not in direct competition. Its lower-than-expected onboard spending, has not being within easy reach of its national airport, there proximity to the Caribbean makes it the most worried cruise operators too much. And they are is no reason obvious keeping a strict eye on websites offering passenger for many embarkation discounts, not wanting their brand value debased as people to point for most some feel the airline industry has done by offering make the trek cruise such low-cost fares. Operators, including Carnival down the coast operators in and Royal Caribbean, now require discount to begin their the US, and websites to advertise cruises at list price, although cruise. with the some let agencies pass on commissions, as long as To add to the increase in fuel this is not publicized. As a result, some websites are influx, people costs, many reporting fewer bookings, but the higher prices are choosing to do not want have meant stable revenue levels. embark earlier to spend a At the end of the day, the fact that cruise passengers for their couple of days are starting to book for 2006 because the dates Caribbean collecting they required this year are no longer available vacations and passengers speaks for itself. An increase in gastrointestinal illness more and from up the onboard cruise liners does not appear to have put more ships are coast, just to people off, and cruise companies, including Carnival calling at ports bring them Corp., are expecting their most profitable year ever. outside of back down to The increased demand has also led to competition Florida. Three lines – Norwegian Cruise Lines, the Caribbean. Cruise lines, he argues, prefer to be between cruise companies to offer passengers the Celebrity Cruises and Royal Caribbean Cruise Line – closer to their destinations and it is the Caribbean most impressive onboard features: rock climbing will offer 32 sailings from Philadelphia this season, that remains the destination of choice for most, with walls, huge theatres, state-of-the-art fitness facilities, and many port calls from other lines, including its wide variety of ports and economic prices – not and even bungee jumping are all part of the new Seabourne and Silversea, will follow. In total, this to mention its golden sands and azure sea. era of cruising – a true indication that the only way works out at around 92,450 passengers expected at To prove the point, the World Tourism Organization for offshore vacationing is up. the terminal this year, compared to half the number forecast that the Caribbean will continue to be the “The cruise industry is one of the most exciting of passengers and half the number of sailings in most visited destination, receiving over 50 per cent industries in the world,” concludes Jai George, 2003, and just one sailing in 2002! of passengers, followed by Alaska and the President and CEO of Cruise Network, Inc, “and “We have seen tremendous growth in recent years,” Mediterranean with around 10 per cent each. And we are expecting a record-breaking year in 2005.” If said John J. Matheussen, Delaware River Port with the total number of cruisers worldwide the records have not already been broken for this Authority’s chief executive officer. “This growth has expected to grow to 13.5 million this year, it is no season, they sure will be by 2006 if the trends set in benefited residents of our region who enjoy the wonder that available ports are taking advantage and the US at the moment continue to allow cruise luxury of starting their vacation close to home.” marketing themselves to a wider audience. operators to bask in their smoothest sailing yet.

International Travel Insurance Journal www.itij.co.uk INDUSTRY AWARDS 2005 Who canenter? success. andmarketingliteraturetohighlightyour be usedonstationery this recognitiontofurtheryourbusiness.Theawardslogocan commended finaliststheawardsofferopportunitytouse in thetravelinsuranceindustry. Forthewinnersandhighly The awardsaredesignedtorecogniseandrewardexcellence categories, itwillbeamemorableevening. For thosecompaniesandindividualsshortlistedinanyofthe ceremony inSevilleon11November. Why enter? year willlookforthefollowingkeyfeatures: The jury State yournominationinnomorethan750words. How towriteyourentry Awards ceremonyanddinner:Thursday11 November2005 2005 Judging andannouncementoffinalists:Friday28October Deadline forallentries:Friday30September2005 Dates toremember entered [email protected] yourcompanyshouldbe you areunsurewhichcategory The Categories their contactdetails. industry. Ifyouwishtonominateathirdparty, pleaseemailus How youmeetthecriteriasetforyourrespectivecategory How youplantobuildonthesuccessofpastyear How youhavegrown/progressedyourbusinessinthepast What youhavedonetomerittheawardinpastyear 2005 Awards Entry Form Send yournominationsnow! Job title______Name ______If successful,whowillcollecttheawardonnight? Signature ______Email address:______Contact fax:______Contact tel:______Company address______Company name______Job title______Surname ______First name______Dr MrMrsMissMsOther ______All finalistswillbenotifiedbyFriday28October All entrieswillbeacknowledged Closing dateforreceipt ofentries– Colston Street, Bristol,BS15AX,UK TravelDenise Clements,International Voyageur Insurance Journal, Buildings,43 your completedentryto: Return The awardswillbepresentedataglittering See the entry formbelowforthecategories.If See theentry The awardsareopentoallsectorsofthe Friday 30September2005 candidate ineachcategory. the winnerandhighlycommended The finaljudgingpanelwillselect panellists foreachcategory. all entriesandputforwardfive The shortlistingpanelwillassess travel insuranceindustry. of backgrounds,allwithaninterestinthe The judgescomefromawiderange are treatedinthestrictestofconfidence. All judgingisindependentandentries The Judges knowledge industry in thefollowingcriteria,whererelevant: excellence andprofessionalism The judgeswillalsolookfor Judging Staff training Client relationships Business growth Involvement withtradebodies Marketing andpromotionalactivities Area ofexpertise,including Insurance Awards intheInternationalTravelI wishtoenterthefollowingcategory I enclosethefollowing: including hospitals,clinicsandPPO brokers andallsellersoftravelinsurance Categories category, photocopiesare acceptable) industry. promotional material,whichwillberecognised byyour peergroups andthroughout the other related press. Thisgivesyoutheopportunityto usetheaward inyourownpublicityand ouetto,teedtiswl ecnimdoc o aebe oiida finalist. a as notified been Do notforget thatthewinnersandfinalistswillgainexposure intermsofpublicity have you once supporting confirmed submit be to will opportunity details an these given documentation, be then will category each for finalists five The of the entry of theentry formattachedtoeachcopy A signedandcompletedentry the sixkeyfiguresandcriteriaasoutlinedabove 6 copiesofthe750-wordtextdocumententry, including General Provideroftheyear Air Ambulanceoftheyear Medical &CostContainmentCompanyoftheyear– Assistance orClaimsHandleroftheyear Insurer/Underwriter oftheyear–inludingintermediaries, (All entriesmustbereceived inEnglish) (Please useaseparateentryformforeach ITIJ and 16 COMPANYBRIEF

Gulf Air co-brands Mondial flying Bradford & Bingley MEDEX insures with AXA high move with the times their trip

Gulf Air and AXA have begun selling co-branded Mondial UK is building on its successful partnership After predicting that half of all holidays will be The new TravMed travel insurance from the airline’s sales offices. The with low-cost airline easyJet to offer travellers booked online by 2009, Bradford & Bingley in the Choice plan from Travel Smart Insurance package became available instant insurance through dynamic packaging. This UK has started selling its travel insurance online via MEDEX Assistance from all Gulf Air offices in Bahrain at the beginning latest innovation on the airline’s website enables the company’s website. In recognition of what it combines both of June and is set to be rolled out to the airline’s customers to buy both a flight and insurance cover calls the ‘changing needs of holidaymakers’, the traditional and non- sales offices in the UAE and Oman during the in one convenient transaction, with one simple company is offering its insurance package, along traditional benefits, coming months. payment. Although the flight booking and insurance with Fist Assist, with a ten per cent discount to providing emergency The product provides comprehensive, all-in-one policy remain separate contracts, the combined ecustomers. medical coverage at a insurance benefits, and includes the option of purchasing functionality is designed to make the Nigel Asplin, general insurance director for variety of levels, as well as a flexible deductible of adding cover for medical, baggage, sub-aqua, over- whole process quick and efficient. Bradford & Bingley, explained: “The ease of $250 or $100 per incident, with all choices land travel and dangerous sports. Mondial has been offering insurance to easyJet organising a trip from your own home or office determined by the subscribing traveller’s needs and Commented Richard Morrison, Country Manager customers since 2002, but the new dynamic desk attracts millions and we were keen to offer preferences. The plan also covers emergency of AXA Insurance Gulf: “Our well-established packaging means that while customers are booking people the same convenience when booking their medical evacuation protection up to $100,000; trip product family, which includes comprehensive their flight, insurance calculations specific to their travel insurance.” interruption coverage; lost, stolen or damaged travel insurance will make a significant contribution trip details are simultaneously being worked out. baggage; and even an option that includes to this new partnership.” Once the customer has decided to buy tickets, organising and covering evacuation expenses due to there is then an option to add the calculated terrorism or civil unrest, up to $100,000 per insurance to the purchace. incident. Rachel Start of easyJet commented: “The Cholamandalam “The political evacuation enhancement reflects the insurance offers comprehensive cover at a growing concerns of travellers over safety and competitive price. It has never been quicker, security issues … Most companies specifically easier or simpler to buy travel insurance.” offers to travel exclude this type of political evacuation from their Meanwhile, Nationwide Building Society in Cholamandalam MS General Insurance, a Chennai, coverage,” said Jim Grace, president of the UK has committed to another year of India-based, private insurance company, has launched InsureMyTrip.com, which offers the policy on its partnership with Mondial UK for the its new overseas travel insurance product – Chola website. provision of its travel insurance and Travel Insurance. Policy coverage includes adventure For a dollar a day, this political evacuation coverage assistance services. This follows a review of sports such as bungee jumping, parasailing, can be added to the TravMed plan, which covers its business one year into a three-year paragliding, as well as trekking, in order to cater to removing travellers to the most feasible safe haven contract. Handled completely in-house, the growing demand of vacationers. The policy when appropriate officials in the traveller’s home Mondial provides Nationwide with a fully follows a ‘per day’ pricing model. country issue a written declaration that travellers branded all-encompassing service, managing Also included in the policy is door-to-door coverage should leave the host country for non-medical sales, claims handling, policy fulfillment, for personal accident from a traveller’s home to the reasons. The coverage is also activated when renewals and international medical destination airport and back – another first-of-its-kind government officials of the host country orders assistance. benefit for the Indian overseas traveller. travellers to leave.

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International Travel Insurance Journal www.itij.co.uk

18 NEWSANALYSIS

trotting is to regions where the risk of malaria is growing – South-East Asia, Oceania, Central America – quite apart from Africa, where the risk has traditionally been at its the highest. Dr Nigel Higson, chairman of the Primary Care Virology Group, an association of British GPs with a specific interest in infectious diseases, has warned that vacationers are becoming complacent as the numbers travelling to the less developed world increases: “Many people are now going to Thailand, Malaysia or South America, which are fairly high risk areas but were far too expensive for mass travel a few years ago.” Tens of millions of Europeans and Americans travel each year to regions where there is a potential risk of malarial outbreaks, but many fail to seek adequate health advice before they travel.

Covering all bases Even when the correct prophylactic is taken, too often people fail to remember to complete their course of tablets, which has to be taken after returning from a trip, as well as before and during it. Many countries, however, regularly issue reminders to travellers that it is essential to begin a course of preventative malaria treatment before travelling to parts of the world where the disease is rife, such as Africa, Central and South America, parts of Asia and the Middle East. British warnings had added urgency after five people who booked last-minute holidays to Gambia returned infected with malaria all requiring hospital treatment. Of the five, it transpired that three had not taken recommended preventative medication, while two had taken over-the-counter medication that was insufficient to prevent the onset of infection. Travel insurance policies do not usually refer to such diseases, but anybody failing to take medical advice before departure, after warnings to do so by travel agents or tour companies, would have little case for litigation if he or she subsequently suffered infection by not taking anti-malaria prophylactics. The most pressing need is for travellers not to underestimate risks of infection and follow medical advice appropriate to the area being visited. The Association of British Travel Agents (ABTA), which supports GlazoSmithKline’s Malaria Awareness Campaign, says that under its code of conduct, any affiliated agent must make clear to travellers any official A bloody pest medical advisory notice. But, unlike cigarette packets, there is no printed health In last month’s edition (ITIJ 53, June 2005, Travel outside, in an airport lounge or on an aircraft and European office in Copenhagen, more than 15 warning on tickets or invoices about the dangers of trends increase malaria risk), we reported on the who is to blame? million people in Turkey – 23 per cent of the tropical diseases, while malaria awareness posters do increasing number of people heading to high-risk population – live in places where malaria remains not usually feature on the walls of travel agents or in malaria areas without taking the recommended Know before you go endemic, while another 28 million of the population doctors’ surgeries for that matter. precautions. So do we have cause to worry about Parasitic diseases are sinister, particularly malaria, reside in areas with a high risk of outbreaks. Nevertheless, what might be considered a shock this trend? Robert Bailey bites back where symptoms often do not occur until a traveller There are already alarming signs of more serious approach could alert those who travel on last-minute has returned home. Unfortunately, the incidence of complaints, with UK doctors and others in Europe budget deals to the Far East, for instance, where Nobody goes abroad with the expectation of falling these types of illness is on the rise and nearer home reporting rarer mosquito spread, tropical conditions malaria is on the increase, and who may be unaware ill. Even so, many holidaymakers experience bouts of than we sometimes imagine. such as dengue fever, yellow fever, as well as malaria. of dangers. sickness ranging from flu to stomach upsets and Malaria was endemic in several parts of the US until An increasing number of people are voyaging out of Medical experts say the problem is that malaria is sunburn. Most of us try to ignore passing discomforts the 1950s. While almost all the 1,400 cases reported Europe for their holiday breaks, but many are still becoming harder to control. Two to three billion and just get on with our vacations. to the Centre for Disease Control and Prevention unaware of these risks. The huge expansion in travel people – about one-third of the world’s population – Except for accidents or severe illness, most (CDC) in 2002 were imported, local outbreaks of is the main cause. are now deemed to be at risk. The dramatic increase vacationers do not need recourse to medical help malaria have been identified since 1986 in California, In 1973, 600,000 UK travellers, for example, visited in international travel has also caused imported cases of and claims on their insurance policies. But what Florida, New Jersey, New York and Texas. The most areas where there was potential health risk from malaria to soar. happens if you are taken ill after returning from a trip recent outbreak occurred in Palm Beach County in tropical diseases. By the early 1980s, this figure had and subsequent tests show a parasitic infection from Florida two years ago with seven people infected. doubled and by the 1990s had reached three A critical case a bite. Where did this take place – at a hotel, According to the World Health Organization’s million, and five million last year. Much of this globe In total, some 10,000 to 12,000 cases of imported

International Travel Insurance Journal www.itij.co.uk NEWSANALYSIS 19

malaria are notified in the European Union every Fourteen tourists, including one Briton, staying at year, with the largest number of cases recorded in resorts at Bavoro and Punta Cana in the Dominican continental France and Britain, followed by Republic were infected last autumn. Germany and Italy. Although all the cases are of In Asia, malaria is widespread – in India, Pakistan, imported malaria acquired while visiting endemic Bangladesh, Thailand, Vietnam, Laos, Myanmar areas, there are occasional cases of people being (Burma), Cambodia, Indonesia and in Papua New infected by bites from mosquitoes carried in aircraft. Guinea. Alarmingly, there is also a widespread While many of these cases are among people of resistance to drugs in these regions. African or Asian origin returning to Europe after The risk for visitors, however, is greatest in Africa, visiting their families, about a tenth of the cases south of the Sahara, where over 95 per cent of the occur among holidaymakers and a smaller proportion potentially lethal falciparum malaria is contracted. among business travellers. A number of US and It is important to also note that the threat posed by British soldiers serving in Sierra Leone and Afghanistan malaria in some countries changes over time so have also been infected in the last three years. treatment used in the past in these countries may not There are disturbing signs, though, that the number of remain the most appropriate. It is always best, travellers infected could be about to rise dramatically. therefore, to seek expert advice. A survey carried out two years ago of some 5,500 The disease can even strike non-travellers. In 1983, airport passengers found half had not sought two cases of malaria were reported near Gatwick appropriate medical advice before setting off. US airport, 30 miles south of London, with the victims surveys have mirrored similar levels of ignorance believed to have been infected from mosquitoes among travellers. carried on board aircraft from Africa. Professor David Last-minute travellers are at risk because they often Bradley of the UK’s Malaria Reference Laboratory fail to leave enough time to take proper precautions, Kassianos. While most people survive a bout of won’t happen to them.” This worry is underlined by said: “We want to remind travellers, and also their says Professor Larry Goodyear of Leicester’s De malaria after an illness lasting two to thee weeks, it has veteran adventurer Sir Ranalph Fiennes: “Those travel agents, particularly those booking last-minute Montfort University: “Malaria is a potentially fatal to be remembered that the most serious forms of the travelling to regions where malaria occurs need to deals, that travellers must seek urgent advice from disease. Travellers should not be blasé.” condition can affect the kidneys and brain and result in understand that this is a potentially fatal disease and their GP or travel clinic about medicines to prevent It is a horrifying statistic that malaria is killing more than anaemia, coma and death. everyone is susceptible. The danger comes when you malaria before they travel. For Africa, the medicines one million people a year, and the London School of Since there can also be an extended time lag between think there isn’t a danger.” require a prescription. Some can be started as late as Hygiene and Tropical Medicine is warning that there is being bitten abroad and symptoms of the disease Malaria outbreaks have been reported in some the day before departure, and it is better to start the much more malaria than has previously been being felt, it is vital for those feeling unwell for no locations previously thought to be at elevations too medicines late than not at all.” estimated, particularly in Asia. Professor Snow of apparent reason after returning from a trip to Africa or high for malaria transmission, including the highlands There is a range of prophylactics available widely by Oxford University’s Centre for Tropical Medicine has South America, for example, to tell their doctors of Kenya and also in places thought to have brought prescription, including Fansidar, the controversial estimated 515 million cases worldwide in 2002, with where they have been so appropriate tests can be the problem under control, such as Madagascar and Lariam and the most recent drug Malarone, which more than 70 per cent of these occurring in Africa. done quickly. Zanzibar. Malaria has also occurred in tourist areas needs only to be taken two days prior to visiting an Such figures point to one million new infections a day. The problem with malaria is that an infected person such as South Africa’s Kruger National Park and most infected area. Everyone should take expert advice may not feel symptoms for some weeks, even recently in India’s Assam province. South American from their own doctor or specialist travel clinic on the Just a bite months, after returning from a trip. The effect is countries, such as Brazil, Peru, Columbia, Bolivia, appropriate course required. The disease is caused by an infection of the red blood draining and much worse than flu. An incredible Ecuador, Venezuela, Guyana, Surinam and French Mosquitoes don’t hold to a code of conduct and cells with a minute organism called a protozoa, which feeling of weakness typically sets in accompanied by Guyana, have experienced outbreaks of plasmodium certainly can’t be sued. The basic message is whether is carried from person to person by the anopheles sickness and a very high temperature. This is usually vivax malaria at altitudes below 1,000 feet. you are a backpacker or staying in a five-star hotel, mosquito. By biting an infected person after sucking followed a by a brief period of remission only for Parts of Central America and Southern Mexico at low everyone is potentially at risk and responsible blood containing the parasite, it passes it on when it another bout to occur later. altitude are also vulnerable, especially Nicaragua, individually for taking appropriate medication, so it bites the next victim. The stark message is that ”it only ABTA warns: “More people are becoming exposed to Guatemala and Honduras, Panama and Costa Rica. really is important to be adequately protected and takes one bite from an infected mosquito,” says Dr malaria in long-haul destinations. But they think it Even parts of the Caribbean are not immune. prepared in advance of travel.

www.itij.co.uk International Travel Insurance Journal 20 FEATURE

A broad and most important question posed by Steve Manton, chief executive of M Consulting: Is travel insurance really a worthwhile line of business for insurers? Judging by the seemingly dwindling number of players in the UK market, perhaps not

The Association of British Insurers (ABI) reports that it has around 37 member companies that provide travel cover out of a total of 400 members – so it does not seem to be a popular sector. Indeed, the number of players is believed to be shrinking, although their dwindling number probably reflects industry consolidation as insurers swell in size, buying each other to provide the bulk they need to survive in today’s market, as well as players choosing to quit the travel game. Many of the larger players have slimmed down their travel offerings, leaving it as something to be offered direct, over the phone or via a website, but not pushing it through their brokers in the same way that they try to sell home or motor policies. Anyone looking at the travel market would assume the odds are stacked heavily against profitability for a large insurer that is up against new and stiff sources of competition, as well the pressure to reduce the burden of cost on what is still a relatively complicated product.

Keeping the cost down Russell Dadson, founding director of skiing and adventure sports specialist Snowcard, says: “The main players from the underwriting point of view seem to be shrinking back or pulling out. Whenever I meet other intermediaries, the complaint is that capacity is low and there aren’t carriers out there fighting for business.” Today, competition for insurers comes not only from the direct market – often the Internet for travel policies – but also from the likes of generate enough revenue to make it worthwhile.” then, an R&SA spokesperson sounded somewhat The ABI lobbied for all travel insurance to be FSA supermarkets, the Post Office (PO) and other This is a problem. The insurer needs a way of getting lukewarm about travel insurance: “We don’t push it regulated, and intends to renew its efforts when the organisations selling foreign currency to its product to the mass market while keeping its heavily through the direct channel. There’s a suite of treasury reviews the situation, expected to be in holidaymakers or otherwise able to sell to travellers overheads down or to a less price-sensitive market. products you would expect and travel is one of 2007. about to leave the country. The PO scheme – arranged by Aon and them. The customer is going to expect it to be Another reason the number of travel insurers is Dave Greaves, schemes and affinity manager at underwritten by Fortis and DAS Legal Expenses – there.” falling could be that it is an expensive game – those Royal & SunAlliance in the UK, says: “I’ve seen the shows that an insurer can successfully sell mass- 37 ABI members pay out £4.5 million a week in travel market change radically. In the last two or market travel insurance by being in the right place at An expensive game claims to their insureds. three years, the Post Office has come from nowhere the right time – when the consumer is inclined to Since the Financial Services Authority (FSA) began High-profile claims under travel insurance may be to become a major player. They’ve got very make a purchase. For the insurer, it is all about how regulating the UK insurance industry in January, rare but the Asian tsunami on 26 December 2004 is successful at capturing the customer at the point of it gets its product to market. insurers have had another potential obstacle. Policies thought to have generated significant claims for transaction. If you look at the number of From Royal & SunAlliance (R&SA)’s point of view, sold through travel agents are not subject to FSA medical treatment or repatriation for the thousands opportunities left to go to an intermediary and travel is largely something to be offered through its regulation – raising the prospect that an insurer of foreign tourists affected. Risk Management purchase travel insurance, it’s pretty small. direct channel via More Th>n, a method which selling through an intermediary may have higher Solutions (RMS) estimated that of the 5,000 deaths We still deal with brokers, but most of them don’t keeps the overheads as low as possible. And even costs than a travel agent. in Thailand from the tsunami, about half were foreign

The insurer needs a way of getting its product to the mass market while keeping its overheads down or to a less price-sensitive market

International Travel Insurance Journal www.itij.co.uk FEATURE 21

tourists. Many travel policies include limited cover for accidental death but greater cover for medical treatment and repatriation. RMS estimated that total travel claims could reach $125 million, as a result of a large number of relatively small claims and a smaller number of large claims for medical costs. Again, for the insurer fighting it out for a share of the mass market, it is crucial to keep costs down and be available whenever the traveller is inclined to buy travel insurance. This is exactly the service that travel insurance specialist broker Travsure, owned by Kennet Insurance Brokers, offers. Kennet’s travel insurance manager Frank Chambers says: “There are a lot of us doing this. It’s becoming an Ironically, Chambers’ point about there being less extremely aggressive market place. What we have appetite for providing cover for older travellers tried to do over the last seven or eight years is to creates just such a niche. provide what we consider to be a highly competitive Saga, the group specialising in services for people product while nevertheless offering good cover. aged 50 and over, has been providing travel We’ve also made good use of the Internet, which insurance since 1994. Travel is Saga’s third from top enables us to reach people at any time of day or selling product, behind home and motor and ahead night.” What the Internet does for Travsure is of nine other classes including pet and private effectively keep the office doors open – 24 hours a medical insurance. day, seven days a week, 365 days a year. In-house medical screening was introduced in December 2002, to enable staff to accurately assess The home of insurance customers with medical conditions for their particular As it has taken off as a travel booking tool, customers trip and make sure that customers are fully aware of are finding themselves sorting out their holidays or the cover provided under their policy before travel. flights online at the weekend and then making their And, crucially, there is no upper age limit for Saga’s travel insurance policy the next query they type into travel insurance, which is underwritten by Travel and a search engine. And they are increasingly looking Personal Underwriters Ltd. for annual multi-trip cover. Indeed, a spokesperson says: “We have found no Mr Chambers says: “We can tell from our orders problem in finding underwriters that understand the that people are accessing us at any time. One chap risks associated with our target market.” ordered from us on Christmas Day – when most And at least Saga knows it is catering to a market that other people [in the country] would have been is the UK’s fastest growing demographic group, tucking into their turkey and Christmas pudding. forecast to increase from 19 million to 25 million by Other people order overnight. When we come in 2015. on Monday morning, there’s always a backlog to Back at Snowcard, Dadson argues that a customer clear.” planning a skiing trip in the Alps or the US is less Travsure’s policies are underwritten at Lloyd’s of likely to quibble about the price of their tailored London by one of the market’s largest agencies, RJ travel policy than a customer jetting off for a beach Kiln. Chambers says there is still a significant appetite holiday for whom the insurance could cost 10 per for writing travel business at Lloyd’s, although he cent or more of their trip cost. He says: “You have adds: “It’s very difficult for underwriters to make to have an audience that’s prepared to listen to you. large amounts of money and the capacity in the Another market may not have the time or inclination market seems to be tapering off in regard to older to listen. That’s where a lot of carriers are falling folks.” For the older policy-holder, medical claims are away from the low-cost mass market, because it’s not only more likely, they are also likely to be more expensive to deliver profitably.” expensive. He also blames underwriters themselves for failing to Lloyd’s is often seen as the home of the understand their own business. “There aren’t a lot of entrepreneurial guys in travel underwriter, willing to take underwriting greater risks in return for departments with the greater rewards. But travel skills to get it right. As a insurance brings in only a broker looking in at the tiny fraction of its business. insurance underwriting Travel is projected to providers, I think generate about £14 million there’s a problem of premium income net of there and that’s why, at brokerage for the 2004 board level, there’s an Lloyd’s year of account, attitude of ‘what’s the although this figure comes point of us doing travel with a health warning – any more’.” recent changes to the For Snowcard, then, codes used to identify the challenge is all different types of cover in about developing and the market leave open the expanding its niche. possibility that some sales From its origins in the are not being properly skiing market, the recorded. But even given a business has focussed significant inaccuracy, it is on other mountain clear that travel is only a tiny proportion of the sports and scuba diving for growth. And instead of Lloyd’s total of £11 billion (2003). the expensive game of fighting for new customers all But there is still room for a Lloyd’s broker to the time – as in the mass market – 70 per cent of specialise in travel. This is what Crispin Speers & Snowcard’s custom comes from repeat business. Partners does, dealing with business including credit And, of the remaining portion, 60 to 70 per cent card cover, repatriation, automatic flight insurance, comes in direct recommendation from existing kidnap and ransom and other areas where Lloyds’ customers. worldwide licenses and ability to write high-risk Dadson says: “Is travel insurance worth it? It’s only business come into play. worth it if you’re getting the right premium. Insurers that chase down rates for market share will work A niche market out that it isn’t worth it. But there’s always a need So, insurers can avoid the cutthroat world of the for insurance. Creating the demand is a sales job and mass market by writing niche business within the brokers can do it well. And I’ve certainly got no travel market, which may also be less price-sensitive. intention of going away.”

www.itij.co.uk International Travel Insurance Journal 22 WORLDMARKETS

It’s Wednesday, it must be Belgium

Given their relatively high disposable income and the Non-discriminatory treatment is the rule, and foreign English – most of them to a level where it’s only Relatively small, maybe, small size of their country, plus its sophisticated companies, their subsidiaries and branches setting up their accent and not grammatical nuances and lack of but Europe’s hub transport infrastructure, it is not surprising that shop in the country not only have the same legal vocabulary that gives them away. Belgians are inveterate travellers. At least half of all obligations but can apply for all the same possible National literacy rates run at an admirable 98 per deserves more than a Belgians – and that means some five-million of them incentives as are available to local companies. The cent and most people have a strong work ethic. – travel abroad in any given year, and while much of Belgian authorities have wisely created a framework Further education is fast becoming the norm rather day’s attention as a this movement is to the neighbouring lands of the of incentives that result in a decidedly business- than the exception and Belgium has good universities Netherlands, France, Germany and Luxembourg, friendly environment. These range from direct aid, and business schools. market worth exploring, these people are great sunseekers too – not such as payment of grants linked to inward The country has an excellent logistics and technology surprisingly considering the cold and damp nature of investment, to fiscal measures, labour and training infrastructure – indeed, it was Belgium that argues Roger St Pierre their country for much of the year. It is a market well incentives, research and development and introduced the motorway concept to the world, worth looking at by travel insurance providers. international trade opportunities. back in the 1930s, and the lights of the current extensive network are said to be visible from outer Getting down to business space, along with the Great Wall of China! Direct aid and research and development matters Consequently, there has long been a tradition of are managed at a regional level, while it is EU openness and international trade dating back to regulations that stipulate the aid level and make Roman times and, ever since, this little country has exceptions that allow the regional authorities to give been a business crossroads, as well as the for far too more substantial grants in some specific areas that long ill-fated ‘cockpit of Europe’, trampled over by are considered development zones. Most of the tax competing invading armies. and fiscal issues are managed on the federal level, In speaking of Belgium, you are virtually looking at but some aspects are decided upon by the regions. two nations sharing one country. It was in 1830 that Labour measures come into the orbit of both the country won its independence from Holland in a national and local authorities. bloodless revolution. The Fleming and Catholic While property prices, and thus office rentals, can be north was then unified with the part protestant high, especially in Brussels – administrative capital of French-speaking, or Walloon south, which has a Europe, as well as of Belgium – there’s the decided French culture and, indeed, supplied many thousands advantage of having on tap a highly educated, of men for Napoleon’s ill-fated army – a fact still productive, well-motivated and flexible multi-lingual celebrated in folk festivals to this day. workforce. Belgium has two official languages: In former times, prosperity lay in the south, with its Flemish, which is a form of Dutch (spoken by 58 per verdant farmlands, coal, steel and other heavy cent of the population), and French (40 per cent), industry, but as mines played out and factories closed while there is a two per cent German-speaking down, the region went into deep recession just as minority in the far south east Ardennes region the more service industry-based Flanders started to around Malmedy. But almost everyone speaks fluent assert itself. Tensions between these two populations

International Travel Insurance Journal www.itij.co.uk WORLDMARKETS 23

in recent times have led to constitutional High income and a relatively low cost of living affords spreading to the insurance industry from the banking nationalities and corporate cultures. amendments that have granted these regions formal a high level of discretionary disposable income sector. A large-scale satisfaction survey was “What is needed is an attitude of mutual respect. You recognition and a large degree of autonomy. It has to waiting to be spent on luxury items and leisure – conducted in the banks during 2003 among 500,000 don’t have that in all companies. Too many like to be said that the occupants of each of the regions including travel. clients at more than 1,000 branches. This revealed take over, throw people out and put their own seem to feel more comfortable speaking in English And Belgians do like to travel. At present, France and that the policy is working, with customer satisfaction people in place. At [our company] we like to have than they would in their countryman’s tongue. Spain are the most popular destinations, but long having improved from a worrying 65 per cent up to partnerships going. We value the input of experience haul is no longer regarded as a big deal and the US a ‘we’re doing better’ 70 per cent. Subsequently, and knowledge that others can bring to the table as Travelling large now has third place, with just under a quarter of the some 12,000 employees have participated in a we expand our interests beyond our own borders. Brussels, which today has an increasingly market. Over the past decade, outbound Belgian ‘customer bank’ training programme and insurance In 1990, ten years before anyone was thinking much cosmopolitan population of tourism to America has grown companies are looking seriously at similar schemes. about the euro, I decided it was time to start just over a million, is within a by a massive 200 per cent – Though facing strong competition from companies alliances with foreign companies.” 1,000-mile radius of almost all despite the negative effects of based in partner European countries, Belgium’s own Dutch insurer AMEV had combined with Dutch bank the key European capitals, and 9/11 and its aftermath. financial services sector is prospering. When VSB and later that year, AG Group, a major Belgian there is considerable business This year, around a quarter of a chairman Maurice Lippens took over the Fortis group insurance company, joined the group to form travel traffic, both inbound and million Belgians will make the 20 years ago, its market capitalisation was a modest Europe’s first cross-border merger in the financial outbound. transatlantic trek. It helps that $125 million. Today it stands at some $35 billion and sector. Out of this alliance, Fortis was born: “Co- Not only are major EU they have five or six weeks of Fortis ranks among Europe’s 20 largest financial operation has been key to our phenomenal growth,” institutions, including the paid holiday time, of which an institutions. “We are now the premier says Lippens. parliament and commission average two weeks are spent on ‘bankassurance’ group in the Benelux countries,” he That spirit of co-operation is very much in the wind themselves, headquartered long haul vacations. says proudly of a group that straddles banking and these days, not just through acquisitions and mergers here, but major global Belgians not only travel but they insurance, two industries that he asserts are usually but through the industry presenting a united face. companies such as Toyota, spend, big-time, when they do separated by widely different cultures. “Currently, The Belgian Association of Insurance Companies, the Pfizer and Caterpillar have also so. According to US government there is more distance between banking and Control Service of Insurance and BELRIM (the set up their main European statistics, the average Belgian insurance than between the moon and earth,” he Belgian Risk Management Association) are all highly offices in Brussels. visitor to the US spends $2,500, argues, adding: “Then there are the challenges active, with working parties looking at all manner Industry is still important, excluding airfares, during their presented by cross-border mergers, where it is of challenges facing the industry and its role in the providing 25 per cent of jobs average stay of just under two necessary to integrate very different businesses, new Europe. and 30 per cent of added weeks. That’s a collective spend value. Steel, car production, of some US$600 million. textiles, power generation, manufacturing, Belgium’s winters are usually mild but wet, while construction and civil engineering are all key sectors, summers are, well, mild and wet. But besides while Belgian beer and chocolates capture the world travelling in search of sunshine and a tan, Belgians are public’s attention. also keen skiers and while their own Ardennes Belgium’s active EU and NATO membership have uplands have good cross-country facilities, they need helped transform the country from a rather to travel further afield for the serious stuff. introspective backwater, often looked down on by its Due to the multitude of travel options now operating big three neighbours into a mini powerhouse right at in and out of Belgium, airlines have been forced to the centre of things – giving a new significance to the keep their fares low in order to stay competitive, a stainless steel Atomium monument that was the trend heightened by the arrival on the scene of centrepiece of the 1968 World Fair that kick-started highly pro-active low-cost airlines, some of which are Belgium’s new role on the international scene. headquartered locally. With a total population of some 10,443,000, Belgium has a total landmass of 30,528 square A strong insurance market kilometres and a mere 66 km of coastline. Today, There’s strong competition, too, in the travel Belgium has the sixth highest per-capital income in insurance market, especially since EU residents can the world. Gross Domestic Product stands at now buy their coverage from other member US$299.7 billion, which equates to US$29,000 per countries by making an online transaction. One way capita. Annual growth level is presently 2.8 per cent, of gaining a competitive edge is by improving while inflation is running at 2.2 per cent. customer service levels. It’s a principle that is slowly

www.itij.co.uk International Travel Insurance Journal 24 FEATURE

A nurturing claims culture encourages insurance fraud worldwide. Milan Korcok looks into the trend of ripping off insurers

t’s a sad truth, but growing numbers of consumers worldwide think lying to their insurance company Excerpt of a release from AON UK Iis about as innocuous as bumming an afternoon “A major food manufacturer had serious off work to go to the racetrack or playing hooky problems with high levels of employers’ liability from Professor Primrose’s lecture on Byron. After all, claims. In a typical year, the company suffered who does it hurt to pad a claim, or generate a phony between 80 and 100 small claims, i.e. less than one altogether? An insurance company is just that – a £1,500… company, a faceless entity, an impersonal machine “The firm suffered from a claims culture, for making money into which most of its clients have where union representatives would routinely been pouring pounds, euros, dollars or yen year carry around claim forms for staff to sign in the after year without ever making any claims. Maybe it’s event of a minor incident… time to get something back: cover the deductible, or “We found a shop floor where some at least the premiums already paid. Or a little bit employees were regularly putting in two claims extra, for the summer holidays, or for Christmas. a year: one to finance Christmas and another Yes, it’s scamming. But rationalising such activity is to pay for their summer holidays.” part of a growing and perfidious claims culture in which even innocent, normally honest people have difficulty seeing it for what it is. In an article published In the US, the news is just as discouraging. According by the American Association of Insurance Services, to the consulting firm Accenture, nearly one in four Robert Hoyt, a professor of risk management and respondents to a survey done in 2003 indicated they insurance at the University of Georgia, writes that thought it acceptable to overstate the value of their “[people] rationalise that insurance companies have insurance claim, and the Insurance Research Council lots of money and if they get some they are not reports that up to 35 per cent think it acceptable to hurting anybody.” In addition, he says: “Studies show pad the amount of an insurance claim to make up for that people [believe] that if they inflate or pad a the deductible, while 20 per cent say it’s OK to pad claim, or get more than they really deserve, they are the claim to make up for premiums already paid. just getting back some of the premium dollars they Surveys commissioned by the Irish Insurance paid in.” Federation also show that only 79 per cent of According to the Association of British Insurers (ABI), respondents would not consider inventing or inflating 48 per cent of people surveyed would not rule out a claim if they could get away with it – which leaves submitting a false insurance claim sometime in the 21 per cent sitting on the fence, even though 84 per future – 40 per cent of them thinking it acceptable to cent believe that inflating a claim is dishonest. pad a claim here and there, 29 per cent making one While on the other face of the globe, the Insurance up completely. And who would these scammers be? Council of Australia (ICA), in a 2002 survey, found Not sleazy low-lifes or hardened crooks, but young, that 18 per cent of respondents thought it acceptable married professionals with a good education and to inflate an insurance claim – with that figure rising mortgage – just the people insurers want as their to a whopping 30 per cent among the18 to 30-year- core customers. olds in the survey. The ICA report also noted that Another survey, commissioned by UK-based Direct almost one quarter of respondents knew of Line Travel Insurance, further revealed that one in someone who had committed insurance fraud and five Britons lies when submitting travel insurance yet 94 per cent of respondents admitted that making claims, one in eight padding the value of their claim, a fraudulent claim was dishonest. one in 20 adding items to their list of stolen or lost goods: a camera, an ipod, a wallet. And to add insult So why do it? to injury, most get away with it, free as birds. They know it’s wrong. They know it’s illegal. But

International Travel Insurance Journal www.itij.co.uk FEATURE 25

people who are prepared to scam an insurer don’t seem to carry the same burden of guilt as do those Excerpt from a news report in the preparing to shop lift a CD box-set or pilfer their Rochdale (UK) Observer, neighbour’s silverware. In a paper published by the 5 March 2004 Australian Institute of Criminology (AIC), psychologist A well-known Rochdale van-hire company Grace Duffield and AIC deputy director Peter claims it has ceased trading, laid off four staff Grabosky write that ‘frauds against large companies members and is selling off its fleet of 45 or government departments are often rationalised vehicles because of numerous dubious with the excuse “they can afford it” … in effect insurance claims and because premiums had trivialising the offence, so it becomes a “victimless gone ‘sky high’ in the present day ‘claims crime”. In such cases, it becomes easy to believe that culture’. the victim “had it coming”.’ Said the van company proprietor: “Insurance Another prevailing perception, according to Duffield premiums were going so high we could not and Grabosky, is that ‘everyone does it’, and so afford to pay them any more. People were practices such as tax fraud, insurance fraud and making dubious claims for whiplash injuries. padding expense accounts become ‘normal We have had five such cases in the last six behaviour’, and those choosing not to go along are months when vehicles might have been only seen as naïve. travelling at three miles per hour.” Richard Day, of Tillinghast-Towers Perrin, actuarial and management consultants, says that according to the ABI, insurance fraud costs insurers in Britain an telephone hotline system to try to sort out potential average of £1.2 billion a year and is getting worse, fraudsters by detecting stress levels in their voices with more than three million people caught annually when they called in to report claims. The ‘voice making dishonest home and motor claims, and stress monitors’ (VSMs) were to be used only in perhaps three times that number getting away isolated situations and only after the callers were with it. advised of their use. The rationalisation for such use, According to the United States Insurance Information according to HBOS, was that ‘policyholders with Institute, property and casualty insurance fraud, honest claims have nothing to fear from it’. which includes padding or misrepresenting claims or In HBOS’s wake, several other insurers and financial creating or ‘staging’ accidents, costs insurers in the services firms tried out the VSMs on their clients, but prevent any willful defrauding of healthcare providers insurers, 38 per cent had used someone else’s credit US, and by extension all who buy insurance in the many found the technology unreliable. At best, the or administrators – which includes insurers. When card, 31 per cent had shoplifted as an adult and 51 country, about $30 billion. But health insurance fraud results have been equivocal. psychologists try to parse why ordinarily honest, law- per cent have knowingly bought stolen goods. That in the US completely dwarfs property and casualty, The VSMs were also put into use in the US, abiding people would admit that it is fine to same research shows that 62 per cent of totaling an estimated $95 billion and involves ‘soft’ primarily by law enforcement agencies, where they exaggerate or even create claims, they resort to the respondents view taking too much change from a and ‘hard’ fraud all along the spectrum of consumers have had but mixed results. One official for the euphemism ‘soft’ fraud, as opposed to ‘hard’ fraud, shop as either acceptable or borderline behaviour. and providers – doctors, hospitals, nursing homes, National Institute for Truth Verification stated: “There which is the deliberate, targeted stealing perpetrated Ultimately, getting claimants to change their diagnostic facilities and the private administrators isn’t an ideal tool out there that’s going to say, ‘John by criminals. Yet ‘soft’ fraud, according to the behaviours in a culture that encourages fraud will hired by governments to run the nation’s Medicare Doe, you’re lying’.” Insurance Research Council is far more frequent than depend on changing the culture itself and getting the and Medicaid programmes. US insurers have been hesitant to use VSMs, largely the ‘hard’ variety, and accounts for far more overall miscreants to believe that what they are doing is Professor Uwe Reinhardt, Princeton University for fear of alienating customers, says the Coalition claims loss amounts. illegal, that there is a better than even chance they economist and expert on healthcare financing, has Against Insurance Fraud. But since the 1980s, when Groups such as the ABI and the US Coalition Against will get caught, that scamming the insurer only likened America’s fragmented healthcare system to a the cost of insurance fraud could no longer be Insurance Fraud realise that cracking down on fraud increases their own and their family’s and giant pot of gold, neglected as it had long is going to be a tough job in a society that is neighbours’ costs of coverage, that not everybody with doctors and been by law somewhat ambivalent about dishonesty itself. ABI does it, and perhaps most important – that it’s other providers enforcement, anti-fraud research has shown that of those who have cheated dishonest. And that may be the toughest sell of all. being invited to dip activities have grown their hands in and exponentially around take what they the world, with many need, but ‘please insurance companies be reasonable’. establishing special (Medicare lost investigation units (SIUs) $11.9 billion to to probe suspicious waste, fraud and claims. Most of these mistakes in 2000. are in-house, some The US outsourced to specialist government says services. fraud amounts to According to the 10 per cent of all Coalition, 80 per cent of US healthcare property and casualty expenditures.) insurers in the US had In commenting on SIUs working for them the growing claims by 2001 – twice the culture, Richard number of just three Day notes that it is years earlier. The necessary to growth of such change common investigations units in perception of Britain and other insurance fraud as victimless; that every time a fraud countries has been just as buoyant and the success is perpetrated it is the customer who pays in the end rates positive and measurable – largely because they through increased premiums. He emphasises that pay off. fraud on motor and household cover alone costs A 2000 study by Conning Research & Consulting policyholders an estimated £20 million a week in reported insurers’ returns on their anti-fraud higher premiums in Britain. The residual effects of investment running from a ratio of three to one to a such losses on the economy can be disastrous to high of 27 to one, with much of the success of these individual consumers far beyond the cost of their returns attributable to data-sharing databases, or insurance premiums. ‘data mining’ programmes that can ‘red flag’ unusual Ultimately, says Day, “there needs to be a change in repetitions or anomalies in individual claims patterns. the perception and expectation of the policyholder. The ABI has also introduced an anti-fraud database Essentially, the more people think they will be caught that gives full details of homeowners’ histories, past out, the less likely they are to make a fraudulent claims, and fraudulent activity – if any. Governments, claim. And being caught out must carry some too, have become much more vigilant about penalty, not just the rejection of the claim.” insurance fraud and its effect on consumers. To this He adds, however, that “prosecutions for insurance point, 43 states in the US have set up insurance fraud are all too rare … Insurance companies need fraud bureaus, and insurance fraud is now classed as to put some clear measures in place to ensure that a felony in most state’s penal codes. That means fraudulent claims are rooted out and rejected and transgressors – those who falsify information on ensure that this stance is actively promoted.” applications or claims, or who distort information to try to obtain lower premium rates – can go to jail. Trying to catch liars Several states have also mandated insurers to have In 2003, UK banking giant HBOS launched a ‘voice- anti-fraud programmes in place. The federal sensitive’ lie detection device programme in its government, too, has enacted powerful new laws to

www.itij.co.uk International Travel Insurance Journal 26 SERVICEDIRECTORY To have your company listed in the Service Directory email: [email protected]

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AFRICA Medic’Air International Dr Herve Raffin – General Manager 35 Rue Jules Ferry [email protected] AMREF Flying Doctor Service Dr Bettina Vadera – Medical Director 93170 Bagnolet www.medic-air.com Paris Tel: +33 1 4172 1414 Wilson Airport [email protected] FRANCE Fax: +331 4857 1010 LangataRoad www.amref.org PO Box 18617 Tel: +254 20 600 090 Nairobi Fax: +254 20 344 170 KENYA Medical Jet Services & Partner W Dichtl Radetzkystr 19 [email protected] Netcare 911 Aeromedical Shane Marais Vienna www.medicaljetservice.com 1030 Tel: +43 1 713 2799 Netcare 911 House [email protected] 49 New Road www.netcare911.co.za AUSTRIA Fax: +43 1 713 2799-19 Halfway House Tel: +27 11 254 1392 Midrand 1685 Fax: +27 11 254 1405 SOUTH AFRICA Swiss Air Ambulance/REGA Walter Stunzi – PR/Marketing Mgr AUSTRALASIA PO Box 1414 [email protected] Zurich Airport www.rega.ch Medical Wings Jarin Kiatfuengfoo – Director CH-8058 Tel: +41 333 333 333 SWITZERLAND Fax: +41 44 654 3590 222 Room 3602 [email protected] Bangkok Int Airport www.medicalwings.com Viphavadeo-Rangsit Rd Tel: +662 247 3392 Sikan, Donmuang Fax: +662 535 4355 Tyrol Air Ambulance Jakob Ringler – Managing Director Bangkok 10210, THAILAND PO Box 81 [email protected] A-6026 www.taa.at South Pacific Air Ambulance Simon Barton – General Manager Ops Innsbruck Airport Tel: +43 512 224 220 NEW ZEALAND [email protected] AUSTRIA Fax: +43 512 288 888 AUSTRALIA Tel: +649 256 9000 SINGAPORE Fax: +649 256 9111 NORTH AMERICA

EUROPE Aerojet Stuart Hayman – President 4631 NW 31st Ave #220 [email protected] Aeromed 365 Ltd Alida Benton – Managing Director Ft Lauderdale www.aero-jet.com FL 33309 Tel: +1 954 730 9300 Worth Corner Business Cntr [email protected] USA Fax: +1 954 485 6564 Turnershill Road www.aeromed365.com Pound Hill, Crawley Tel: +44 8707 596 999 W Sussex RH10 7SL Fax: +44 8707 559 599 UK Air Ambulance Professionals, Inc. Brian L. Weisz – President Ft. Lauderdale Executive Airport [email protected] – Director, Fixed Wing DRF German Air Rescue Frank Spirgatis 1535 South Perimeter Rd www.airambulanceprof.com Raiffeisenstr 32 [email protected] Hangar 36B Ft. Lauderdale Tel: +1 954 491 0555 70794 Filderstadt www.german-air-rescue.de Florida 33309 Fax: +1 954 491 6114 GERMANY Tel (24hr): +49 711701070 USA Fax: +49 711701071 Air Ambulance Specialists, Inc. Donald Jones – President Euro-flite Air Ambulance Juani Missonen – Coordinator 8001 S.Interport Blvd. [email protected] Suite 250 www.airaasi.com Helsinki International Airport [email protected] Englewood Toll Free: +1 800 424 7060 PO Box 187 Tel: +358 20510 1900 CO 80111 Tel: +1 720 875 9182 FIN-01531 Fax: +358 20510 1901 USA Fax: +1 720 875 9183 Vantaa FINLAND Air Ambulance Worldwide Inc. Mark Jones – President – Operations Manager FAI – Flight Ambulance International Sven Mueller 35246 US Hwy 19 North [email protected] Flughafenstrasse 100 (GAT) [email protected] #210 www.airambulanceworldwide.com D-90411 Nuremberg www.flightambulance.com Palm Harbor Tel: +1 727 781 1198 GERMANY Tel: +49 911 36009 0 Florida 34684 Fax: +1 727 786 0897 Fax: +49 911 36009 59 1 USA

Air Trek Air Ambulance David Bump – Vice President Global Medical Support Otto Karud – Marketing Director 28000 A-5 Airport Road [email protected] Ullevaal University Hospital [email protected] Punta Gorda www.medjets.com 0407 Oslo www.globalmedicalsupport.com FL 33982 Toll free: +1 800 633 5387 NORWAY Tel: +47 22 96 50 50 USA Tel: +1 941 639 7855 Telfax: +47 22 96 50 51

IFRA Bernhard Fantner – Assistant to Director Canadian Global Air Ambulance Jeff McIntosh – President Bahnhofplatz 13/5 [email protected] Toronto [email protected] POB 160 www.ifra.at Winnipeg www.canadianglobalair.ca 3500 Krems Tel: +43 2732 825 610 Vancouver Toll Free: +1 800 563 3822 AUSTRIA Fax: +43 2732 851 01 Tel: +1 204 888 5555 Fax: +1 204 888 9111

Luxembourg Air Ambulance Andy Breeden – Operations Global Air Response Tom Cox – Director of Business 175A, rue de Cessange [email protected] 7355 S Peoria Street [email protected] L-1321 www.air-ambulance.lu A3/ Suite 209 www.airresponse.net LUXEMBOURG Tel (24 hr): +352 420 440 1 Englewood Tel: +1 800 631 6565 Fax: +352 420 440 366 CO 80112 Fax: +1 888 631 6565 USA

North Flying A/S Jef Sorenson – Sales Director Skyservice Air Ambulance David Ewing – VP Int. Market Development Aalborg Airport [email protected] Norresundby www.northflying.com YUL/Trudeau Int Airport [email protected] DK-9400 Tel: +45 96 32 29 00 9785 Avenue Ryan www.skyservice.com DENMARK Tel: +45 96 32 29 09 Montreal (Quebec) Tel: +1 514 497 7000 H9P 1A2 Fax: +1 514 636 0096 CANADA International Travel Insurance Journal www.itij.co.uk call +44 (0) 117 925 5151 To make an alteration to a listing email: [email protected] SERVICEDIRECTORY 27

ASSISTANCE COMPANIES ASSISTANCE COMPANIES cont. AFRICA TBS Team 24 d.o.o Edvard Hojnik – General Manager Ljubljanska Ulica 42 [email protected] AMREF Flying Doctor Service Dr Bettina Vadera – Medical Director 2000 Maribor www.tbs-team24.com SLOVENIJA Tel: +386 2618 2301 Wilson Airport [email protected] (Croatia, Bosnia, Macedonia, Fax: +386 2618 5800 Langata Road www.amref.org Kosovo, Herzegovina & Serbia) PO Box 18617 Tel: +254 20 600 090 Nairobi Fax: +254 20 344 170 KENYA NORTH & CENTRAL AMERICA

Connex Assistance Egypt Lara Helmi – Int Network Director Assured Assistance Inc. Martha Turnbull – Director of Operations Office II [email protected] 6880 Financial Drive [email protected] Ist Floor www.connexassistance.com Mississauga Tel: +1 905 816 2495 6 Sad El Aali Street Tel (24hr): +2 02 336 0005 Ontario Fax: +1 905 813 4719 Dokki, Cairo Fax (24hr): +2 02 762 0003 L5N 7Y5 EGYPT CANADA

AUSTRALASIA Global Excel Management Brian Allatt – Executive Vice President

Customer Care Pty Ltd Janine Benson – Operations Manager 73 Queen Street [email protected] Lennoxville, Quebec www.globalexcel.ca Level 3 [email protected] JIM IJ3, CANADA Tel: +1 866 566 1130 60 Miller Street www.customercare.com.au 4242 Cranmore Court Fax: +1 819 566 8335 North Sydney 2060 Tel: +612 9202 8222 Belle Isle, Fl 32812, USA NSW Fax: +612 9202 8220 AUSTRALIA Medex Assistance Corporation Linda McGee – SVP of Sales First Assistance Mary-Jo McDonald – Sales & Marketing Mgr 8501 LaSalle Road [email protected] Suite 200 www.medexassist.com PO Box 17-310 [email protected] Baltimore Tel: +1 410 453 6300 Greenlane www.firstassistance.co.nz MD 21286 Fax: +1 410 453 6301 Auckland Tel: +64 9 356 1650 USA NEW ZEALAND Fax: +64 9 525 1278 TMCA Margaret Whartom – Ops Manager Global Assistance & Healthcare Mario Babin – Chief Executive Officer 217 Broadway [email protected] Suite 600 www.tmcatravel.com Jalan Pattimura [email protected] NYC Tel: +1 212 964 8580 15 Kebayoran Baru www.global-assistance.net NY 10007 Fax: +1 212 406 1520 Jakaita Tel: +62 21 725 8115 USA 12110 Fax: +62 21 725 7961 Indonesia World Travel Protection Canada Inc. Dr Ron Mayer – President & Chf Med Officer Medical Wings Jarin Kiatfuengfoo – Director 400 University Avenue [email protected] 15th Floor www.wtp.ca 222 Room 3602 [email protected] Toronto Tel: +1 416 977 3565 Bangkok Int Airport www.medicalwings.com Ontario M5G IS7 Fax: +1 416 205 4676 Viphavadeo-Rangsit Rd Tel: +662 247 3392 CANADA Sikan, Donmuang Fax: +662 535 4355 Bangkok 10210 THAILAND

South Pacific Air Ambulance Simon Barton – General Manager Ops To advertise your company NEW ZEALAND [email protected] AUSTRALIA Tel: +649 256 9000 in the Service Directory SINGAPORE Fax: +649 256 9111 call Jude or Dave on EUROPE & THE MED +44 (0)117 925 5151 Antalya Assistance Murat Arslanoglu – Network Manager Muratpasa Mah. [email protected] FUNERAL DIRECTORS Adnan Menderes Bulvari 19 www.fempatr.com Gazihan K:4 D:21 Tel: +90 242 243 6219 Antalya Fax: +90 242 248 7724 EUROPE TURKEY Defin Funeral Services Murat Arslanoglu – Network Manager ARC Transistance Hans Biekmann – Network Director Muratpasa Mah. [email protected] 11 Avenue Pleiades [email protected] Adnan Menderes Bulvari 19 www.fempatr.com B-1200 Brussels www.arctransistance.com Gazihan K:4 D:21 Tel: +90 242 248 8389 BELGIUM Tel: +32 2 776 04 70 Antalya Fax: +90 242 248 7724 Fax: +32 2 776 04 99 TURKEY

Funeraria Officia Roberto Zega Cristina Zega – General Manager Atlantic Assist Adriano Gouveia – Operations Manager Via Clelia 26-28 [email protected] Rua da Alfandega 10-2.D [email protected] Roma www.zega.it PO Box 750 www.atlanticassist.com ITALY Tel: +39 067 840 300 9000-056 Funchal Tel: +351 291 214 200 Fax: +39 067 802 488 Madeira Fax: +351 291 214 202 PORTUGAL Funeralcare International Roger Waddington Global Voyager Assistance Costas Danilenko – CEO 221 Upper Richmond Road [email protected] PO Box II [email protected] Putney Tel: +44 20 8788 5303 125124 www.gvassistance.com London SW15 6SQ Fax: +44 20 8788 2525 Moscow Tel: +7 095 775 0999 UK RUSSIA Fax: +7 095 775 0998

– Managing Director MK International Emergency Services Minas Kaloumenos – General Manager Global Networks Funeral Assistance Cristina Almudi 95, Ioanninon Street [email protected] 22 Falcon Crescent [email protected] 10444 Athens Tel: +30 210 5154600 Enfield www.globalnetworksfa.com GREECE Fax: +30 210 5131660 EN3 4LT Tel: +44 208 350 0645 UK Fax: +44 208 482 0742

www.itij.co.uk International Travel Insurance Journal 28 SERVICEDIRECTORY To have your company listed in the Service Directory email: [email protected]

FUNERAL DIRECTORS cont. MEDICAL COST CONTAINMENT cont.

Kenyon Christopher Henley Christopher Henley – MD OneWorld Assist Calvin Ball – Business Development Manager 83 Westbourne Grove [email protected] 10th Floor [email protected] Bayswater www.kchrepatriation.com 6081 No. 3 Road www.oneworldassist.com London W2 4UL Tel: +44 20 7313 6920 Richmond, BC Tel: +1 604 278 4108 UK Fax: +44 20 7313 6999 V6Y 2B2 Fax: +1 604 303 2142 CANADA

MK Funeral & Transportation Services Minas Kaloumenos – General Manager Star Healthcare Network Inc. Gigi Galen – President 95, Ioanninon Street [email protected] 850 Seventh Avenue [email protected] 10444 Athens Tel: +30 210 5154600 Suite #803 www.starhealthcarenet.com GREECE Fax: +30 210 5131660 New York 10019 Tel: +1 212 581 8228 USA Fax: +1 212 581 8272

Rowland Brothers International Melanie Walkling TMCA Margaret Whartom – Ops Manager 299-305 Whitehorse Road [email protected] 217 Broadway [email protected] Suite 600 www.tmcatravel.com West Croydon www.rowlandbrothersinternational.co.uk NYC Tel: +1 212 964 8580 Surrey Tel: +44 20 8684 2324 NY 10007 Fax: +1 212 406 1520 CR0 2HR Fax: +44 20 8684 8000 USA UK

Servilusa Vanda Castro – Manager Int Dept Agencias Funerarias SA [email protected] MEDICAL ESCORT ON COMMERCIAL AIRLINES International Dept. www.servilusa.pt Rua do Entreposto Industrial Tel: +35 121 470 6300 AFRICA 8-2 Esq, 2610-135 Amadora Fax: +35 121 470 6499 PORTUGAL AMREF Flying Doctor Service Dr Bettina Vadera – Medical Director NORTH AMERICA Wilson Airport [email protected] Langata Road www.amref.org Bergen Funeral Sevice Scott Nimmo – Funeral Director PO Box 18617 Tel: +254 20 600 090 Nairobi Fax: +254 20 344 170 129 E 7th St. [email protected] KENYA New York www.bergenfuneral.com NY 10009 Tel: +1 212 254 2864 ASIA USA Fax: +1 201 288 5694 “Servicing all of the USA, Canada, South & Central America” Medical Wings Jarin Kiatfuengfoo – Director 222 Room 3602 [email protected] Bangkok Int Airport www.medicalwings.com Viphavadeo-Rangsit Rd Tel: +662 247 3392 MEDICAL COST CONTAINMENT Sikan, Donmuang Fax: +662 535 4355 Bangkok 10210 THAILAND EUROPE EUROPE ChargeCare International Philip Marshall – Director of Operations Medic’Air International Dr Herve Raffin – General Manager PO Box 18 [email protected] Holsworthy www.chargecare.co.uk 35 Rue Jules Ferry [email protected] EX22 7WB Tel: +44 1409 261 368 93170 Bagnolet www.medic-air.com UK Fax: +44 1409 261 633 Paris Tel: +33 1 4172 1414 FRANCE Fax: +33 1 4857 1010

NORTH AMERICA NORTH AMERICA Global Excel Management Brian Allatt – Executive Vice President Air Ambulance Worldwide Inc. Mark Jones – President 73 Queen Street, Lennoxville [email protected] Quebec, JIM 1J3, CANADA www.globalexcel.ca 35246 US Hwy 19 North [email protected] 4242 Cranmore Court Tel: +1 866 566 1130 #210 www.airambulanceworldwide.com Belle Isle, FL 32812 Fax: +1 819 566 8335 Palm Harbor Tel: +1 727 781 1198 Florida 34684 Fax: +1 727 786 0897 USA USA

Global Medical Management Raija Itzchaki – Assistant VP Marketing Global Air Response Tom Cox – Director of Business 7901 SW 36th Street [email protected] 7355 S Peoria Street [email protected] Suite 100 www.gmmusa.com A3/ Suite 209 www.airresponse.net Davie Tel: +1 954 370 6404 Englewood Tel: +1 800 631 6565 FL 33328 Fax: +1 954 370 8613 CO 80112 Fax: +1 888 631 6565 USA USA

Health Systems International Peggy Novotny – VP / Gen Mng. Int Bus. 5975 Castle Creek Parkway [email protected] AIR AMBULANCE INTERIOR Suite 100 www.us-hsi.com Indianapolis Tel: +1 317 806 2000 IN 46250 Fax: +1 317 806 2033 Air Ambulance Technology Egon Kuntner – President USA A-5282 [email protected] Ranshofen www.airambulancetechnology.com Hygeia Corporation Joe Radigan – Chief Operating Officer AUSTRIA Tel: +43 7722 85051 Fax: +43 7722 85051-22 15500 New Barn Road [email protected] Suite 200 www.hygeia.net Miami Lakes Tel: +1 305 594 9291 FL 33014 Fax: +1 305 594 9201 USA To advertise your company Medsave USA Donald Moyle – Chief Marketing Officer in the Service Directory 1400 Old Country Road [email protected] Suite 109 www.medsaveusa.com call Jude or Dave on Westbury Tel: +1 516 622 1700 NY 11590 Fax: +1 516 622 1733 USA +44 (0)117 925 5151

International Travel Insurance Journal www.itij.co.uk call +44 (0) 117 925 5151 To make an alteration to a listing email: [email protected] SERVICEDIRECTORY 29

CLAIMS MANAGEMENT HOSPITALS cont.

MediClub Co Ltd. Dr I Khalilbekov – Dep. General Mgr Global Assistance & Healthcare Nathan Hannah – TPA Mgr Asia/Pac STR. 45 U.Hajlbekov [email protected] Jalan Pattimura [email protected] AZ 1010, Baku www.mediclub.az 15 Kebayoran Baru www.global-assistance.net Azerbaijan Tel: +99412 49709 11/12/13 Jakaita Tel: +62 21 725 8115 AZERBAIJAN REPUBLIC Fax: +99412 49870 96 12110 Fax: +62 21 725 8951 Indonesia

Global Excel Management Brian Allatt – Executive Vice President MEDICAL PROVIDERS 73 Queen Street, Lennoxville [email protected] Quebec, JIM 1J3, CANADA www.globalexcel.ca – Medical Director 4242 Cranmore Court Tel: +1 866 566 1130 AMREF Flying Doctor Service Dr Bettina Vadera Belle Isle, FL 32812 Fax: +1 819 566 8335 Wilson Airport [email protected] USA Langata Road www.amref.org PO Box 18617 Tel: +254 20 600 090 Nairobi Fax: +254 20 344 170 CRITICAL CARE PATIENT TRANSPORTATION KENYA Atlantic Assist Adriano Gouveia – Operations Manager Lufthansa German Airlines Doris Ehring – Product & Process Management Rua da Alfandega 10-2.D [email protected] FRA SQ/B [email protected] PO Box 750 www.atlanticassist.com Frankfurt Airport Tel: +49 172 367 7929 9000-056 Funchal Tel: +351 291 214 200 D-60546 Fax: +49 69 690 58147 Madeira Fax: +351 291 214 202 PORTUGAL GERMANY

MediClub Co Ltd. Dr I Khalilbekov – Dep. General Mgr MediClub Co Ltd. Dr I Khalilbekov – Dep. General Mgr STR. 45 U.Hajlbekov [email protected] AZ 1010, Baku www.mediclub.az STR. 45 U.Hajlbekov [email protected] Azerbaijan Tel: +99412 49709 11/12/13 AZ 1010, Baku www.mediclub.az AZERBAIJAN REPUBLIC Fax: +99412 49870 96 Azerbaijan Tel: +99412 49709 11/12/13 AZERBAIJAN REPUBLIC Fax: +99412 49870 96 MEDICAL SCREENING EMERGENCY EVACUATION Risck Solutions Ltd Ian Findlay – Commercial Director Alba Consulting Ltd. Andrew McGill – Managing Director The Medical Centre [email protected] 238 Broomhill Road www.risck.co.uk 14 Belvedere Gardens [email protected] Brislington Tel: +44 117 300 7007 Crowborough www.albaconsulting.org Bristol BS4 5RG Fax: +44 117 300 7003 East Sussex Tel: +44 1892 610 560 UK TN6 2LR Fax: +44 1892 652 620 UK Travel & Medical Insurance Services Michael J Turner – MD 1st Flr Suite, West House [email protected] HEALTHCARE CLINICS 46 High Street www.travelandmedical.net Orpington, Kent Tel: +44 845 058 8000 BR6 0JQ Fax: +44 845 053 3000 LuzDoc International Medical Serv. Ltd Dr Maria Alice Silva – Medical Director UK Medical & Assistance Services [email protected] Rua 25 de Abril, 12 www.luzdoc.com Villa da Luz Tel: +351 282 780 700 TRAVEL AGENTS 8600-174, LUZ LGS Fax: +351 282 780 709 PORTUGAL Voyageur Aeromedical Travel Marc Lucus – General Manager MediClub Co Ltd. Dr I Khalilbekov – Dep. General Mgr Voyageur Buildings [email protected] 43 Colston Street www.voyageur.co.uk STR. 45 U.Hajlbekov [email protected] Bristol BS1 5AX Tel: +44 (0)117 927 3554 AZ 1010, Baku www.mediclub.az UK Fax: +44 (0)117 925 5940 Azerbaijan Tel: +99412 49709 11/12/13 AZERBAIJAN REPUBLIC Fax: +99412 49870 96

Number One Health Group Dr Charlie Easmon – Director 1 Harley Street [email protected] The 24 Hour Aeromedical Travel Service London www.executivescreen.com W1G 9QD Tel: +44 207 307 8756 UK Fax: +447092 196 169

HOSPITALS

AmeriMed American Hosp & Med. Cnt. Mark R Engelman – MD 4340 E Indian School Road [email protected] STE 21, PMB 564, www.amerimed-hospitals.com Phx, Az 85018 Tel: +1 602 952 0405 USA Fax: +1 602 952 1668

Hospital Clinica Benidorm Ana DaPaz Brown – Medical Director Avenida Alfonso Purchades 8 [email protected] Contact: Marc Lucas, Voyageur AeroMedical Travel, 03500 Benidorm www.clinicabenidorm.com Voyageur Buildings, 43 Colston Street, Bristol BS1 5AX Alicante Tel: +34 96 585 3850 SPAIN Fax: +34 96 586 4345 Tel: +44 117 921 0401 Fax:+44 117 925 5940 Email: [email protected]

www.itij.co.uk International Travel Insurance Journal 30 HOTSPOTS DICK’SHOTLINE Drug law alert

Despite TV and film portrayals such as Midnight Express, travellers still get arrested for possessing illegal drugs. The traveller then faces serious Northern Ireland: problems, ranging from major hassle to execution. US lawyer Dick Atkins explains

renewed troubles There are numerous countries that have the death penalty for drug possession, including marijuana. Several Political attention is turning to the problems ties and Sinn Fein’s blundering handed him a victory. such popular Asian tourist destinations flaring up in Northern Ireland and iJet Risk In an attempt to remind the parties of Sinn Fein’s are China, Vietnam, Singapore, Management analyses the recent troubles capacity to scuttle peace talks, Sinn Fein leaders Thailand and Indonesia. Mere overplayed their hand by refusing to disarm. Public possession itself is sufficient for guilt; the The Good Friday Agreement, perhaps the most reaction to this announcement was swift and defendant does not have to knowingly promising attempt at ending the cycle of conflict in unequivocal: it was time for the paramilitaries to possess the drug. Recent newscasts Northern Ireland, has stalled in the face of crime turn swords into ploughshares. featured the story of a 27-year-old and violence attributed to factions of the Irish The 30 January murder of Robert McCartney, a Australian woman who was arrested as Republican Army (IRA). Companies doing business Catholic without militant ties, by IRA members she arrived in Bali, Indonesia, when in Northern Ireland can best manage the challenges outside of a Belfast pub resulted in unprecedented nine pounds of marijuana were found presented by the persistent sectarian tensions if public demonstrations against violence. And a secreted in her luggage. She was executives have a clear understanding of the subsequent campaign by McCartney’s sisters convicted after the judge rejected her situation. Here is a primer: brought the incident to the attention of US testimony that she was ‘set up’ and Despite the initial success of the 1998 Good Friday President George Bush and the European unaware of the contraband. Although the death destinations, who are arrested because they Agreement, brokered by former US Senator Parliament; both used the opportunity to demand penalty was an authorised sentence, she received travelled with a small amount of marijuana for their George Mitchell and promoted by then President an end to the militias. 20 years imprisonment. Her televised sentencing own personal use. The results can vary widely, Bill Clinton, some IRA factions continue to refuse to showed the woman’s relatives screaming and her from ‘first offender treatment and no permanent publicly renounce armed struggle in their quest for Paramilitaries move to crime countrymen protesting the harsh sentence. conviction’ to a felony conviction with a permanent a united island. Republican disarmament has stalled The loss of critical funding from abroad, combined Entry points to nearby Malaysia prominently display record and incarceration. in the face of Unionist demands for the filmed with diminished domestic support, has led some warnings that Dada (drugs) mean death, but that Study-abroad students are more likely to be destruction of the IRA’s factions to turn more still does not stop some foolish visitors from arrested for alcohol-related offenses, but there are arsenal, a proposal that fully to criminality in violating the strict laws. In Singapore, for small still occasional minor drug violations. A hotline case leaders of Sinn Fein (the order to survive as amounts of a ‘controlled substance’ a defendant last year involved an American studying at a political arm of the IRA) part of a functioning may get lucky and avoid the death penalty, but Japanese college whose single marijuana cigarette consider tantamount to insurgency. The instead be sentenced to lengthy imprisonment plus was found by his host family. This young man, a public humiliation. embrace of criminal ‘caning’, a particularly painful and harsh form of scholarship honors student, was most fortunate to The Independent enterprises in order corporal punishment. spend only a week in jail instead of a year or more. Monitoring Commission, to fill empty coffers In some holiday destinations, visitors fall prey to con His release involved a comprehensive, expensive, which checks the status of will almost certainly artists. In Jamaica, friendly locals convince vulnerable co-ordinated legal and diplomatic effort. the ceasefire between result in public tourists that law enforcement authorities would Another recent example demonstrates the stringent Northern Ireland’s militant alienation, particularly never look inside of hollow wood statues, which drug law enforcement found in Muslim countries, groups, announced 24 if some activities were specifically carved to hide drugs. Vacationers many of which have the death penalty for some May that paramilitary harm economic foolishly pay them a substantial sum for such drug offenses. Several months ago, a woman trying violence in the region development. Years marijuana-filled artifacts and are subsequently to visit Dubai was detained at the airport because of continues to take on the of recruitment for the arrested, either departing Jamaica or upon arrival at a passport irregularity. Such detainees are routinely characteristics of apolitical various paramilitary their destination. given urine tests for the presence of drugs. The criminality and that, groups, Unionist and Another popular scam involves sophisticated laboratory analysis of her urine showed codeine, a despite the decline of Republican alike, have smugglers, often from Nigeria, who con vulnerable common ingredient in cough medicine. The public support for the IRA fostered multiple European and American women into travelling with woman was arrested and held in jail for two and other militant groups, ‘crime families’ bent them to Thailand for a free holiday. At the Bangkok months because internal possession (use) is a crime violent IRA factions are still more on their own airport for their return flight, after hiding heroin in in Dubai. Travelling with a copy of the prescription busy recruiting and training survival than upon the woman’s luggage, the smuggler creates an for any medication, with the generic name included, volunteers for some vague the success of an ill- excuse not to return on the same plane, explaining could avoid such an arrest in countries where drug future mission. Despite defined peace that one of his friends will meet her at the enforcement is vigilant. Carrying prescription drugs such obstacles, the Good process that, at its destination airport to help with the luggage. Many in the original prescription container is an additional Friday Agreement survives, core, seeks to make victims of this scam are arrested in Thailand, and safeguard for avoiding legal problems when driven on by a public those families some have been sentenced to death. Actual travelling outside of Europe, Canada and the US. increasingly vocal in its opposition to sectarian obsolete. To avoid trouble while doing business in innocence makes no difference. ‘Westerner’s’ death Approximately 40 per cent of arrests of foreign violence – and more willing to stand against Northern Ireland: sentences are often commuted to life nationals worldwide are for drug violations, mostly militants. imprisonment. possession. This number could be reduced if • Avoid discussing politics or religion. Even in More frequent drug-related distress calls involve frequent specific alerts and warnings are given Violence and blunders seemingly relaxed atmospheres, such as those of travellers to ‘non death penalty’ holiday to travellers. The diminishing support for paramilitary groups that pubs, sectarian tensions may hover just below the have been the outward face of Northern Ireland for surface. Keep abreast of local news and conflicts. If decades also grows also out of miscalculations by violence has broken out recently, take extra Republican political leaders and members of IRA precautions. woman taps him on the shoulder factions. again and gives him another handful Following arrests in a December bank robbery, Sinn • Steer clear of the gritty West Belfast Smile corner of peanuts. She repeats this gesture a Fein President Gerry Adams conceded that he neighborhoods where various terrorist-paramilitary few more times, when the driver might have been wrong to quickly disavow a link groups have the strongest ties. The IRA is based in A newly qualified tour bus driver was between the IRA and the robbery. The the Falls Road area of West Belfast. The Ulster taking a bus full of seniors on their finally asks: “Why don’t you eat the establishment of a clear IRA link left Sinn Fein Volunteer Force (UVF) and other Protestant- annual trip to Brighton. Driving down peanuts?” leaders humiliated, and led to a public relations Unionist terrorist groups are centered not far away the motorway, he is tapped on the The woman answers: “We can’t coup for Unionists opposed to negotiations with in the Shankill Road neighborhood. Graffiti marks shoulder by one of his passengers, an because of our old teeth.” Republicans. The Democratic Unionist Party (UDP) smaller sectarian enclaves with militant activity; old lady. She offers him a handful of Puzzled, the driver says: “Why do you leader, Rev. Ian Paisley, called the IRA the ‘sole avoid these neighborhoods as well. buy them then?” obstacle to moving forward’. peanuts as a gesture of thanks from She cheerfully replies: “We like the It was a statement thick with irony: Paisley himself • Avoid sectarian marches, which are common in the passengers, which he gratefully has been identified with religious bigotry and has Northern Ireland. Some of these marches, eats. chocolate coating.” often been seen as an immovable boulder in the especially those that wind through ‘enemy After about 15 minutes, the same Yum! path of progress. Nevertheless, the IRA’s criminal territory’, can spark violence.

International Travel Insurance Journal www.itij.co.uk ONTHEMOVE 31

FirstAssist appoints UIB appoints Ramsey named VP CONTRIBUTORS Dick Atkins is chief counsel for International Totty GCD former Marsh man at Hull & Co Recoveries, Philadelphia, which provides global legal assistance to the travel insurance industry. He is in charge of International FirstAssist, the leading United Insurance Hull & Company Recoveries’ legal hotline and has been involved in handling international legal health and wellbeing Brokers (UIB) has has announced the incidents for the past 20 years. He can be solutions partner, is appointed former promotion of Tim reached via email on [email protected] announcing the Marsh chairman Ramsey to Vice appointment of Martin David Trezies as President, National Robert Bailey is an experienced international Totty as Group Executive Chairman Personal Lines. journalist and an expert on the Middle East Commercial Director. of UIB Holdings Tim joined Hull & and Africa. He has contributed to several financial publications including the Wall Street This newly created (UK) with Company in Journal. role highlights immediate effect. January of 1998 as FirstAssist’s ambition to He succeeds Dr Manager of our Miles Clarke is a Sydney-based freelance develop and expand its Mounir Kabban, newly formed journalist with more than two decades’ health, assistance and Chairman since Charlotte Personal experience in newspapers, radio and trade press. As a business and travel writer, his work insurance offerings. 1998, who will become President of UIB Holdings. Lines department, takes him throughout the Pacific, Southeast Totty will assume responsibility for direction of the Mr Trezies is also appointed Chairman of United where he oversaw and East Asia, Australia and New Zealand. Sales, Marketing and Strategy and Innovation Insurance Brokers, the Lloyd’s broking arm of the the development of our personal lines business in functions, reporting to FirstAssist Chief Executive UIB family of companies. Chris Bishop, the current the Carolinas from scratch to an operation iJET Travel Intelligence (www.ijet.com), the Tim Ablett. chairman of United Insurance Brokers, will continue generating over $20 million in gross premium. travel risk management company, provides The decision to appoint Totty follows the to serve as non-executive Director. In May of 2001, Tim was promoted to National real-time travel intelligence information through its award-winning Worldcue appointment of Mark Howard as Group Dr Kabban said: “I welcome David into the UIB Personal Lines Manager and has assisted all of our (copyright) technology platform for tracking Rehabilitation Director and further strengthens family and look forward to working with him. He branch personal lines departments in the continued and communicating with travellers. iJET FirstAssist’s pioneering executive management has a proven track record of building successful development of their programmes and business. services are backed by regional and category team. Totty will draw on 25 years’ commercial businesses and driving forward tangible change. He has been instrumental in setting up new specialists from the fields of intelligence, security, travel, and health who staff an around- experience and an exceptionally strong FMCG David will be a great asset to UIB throughout our programmes, assisting in efforts to find and hire the-clock operations centre in Annapolis, MD. background. His most recent position was as UK global reach. I know that he will add significantly to quality employees and in maintaining strong Sales Director of United Biscuits, a private equity the value that we deliver to our clients.” relationships with companies. Tim possesses an David Ing is a freelance journalist covering backed business. Prior to this, he worked for Mr Trezies added: “I have long been impressed by MBA degree in addition to his CIC designation. mainly travel and tourism issues in Spain. He Pepsico in a succession of senior sales and UIB’s ability to provide tailored and imaginative writes on air transport for a leading marketing roles covering both large established solutions for their clients and was flattered to be international news agency, as well as contributing special features to Newsweek and operations and smaller scale emerging markets. asked to become chairman of UIB. writing in in-flight magazine articles and Tim Ablett, Chief Executive of FirstAssist, adds: “We “My appointment comes at a critical moment in the guidebooks. are delighted that Martin has joined FirstAssist. His insurance cycle and at a time when the insurance ACE new director commercial proficiency will allow us to take a more broking industry is plagued with much publicised Milan Korcok is an award-winning freelance enterprising approach and fully capitalise on our regulatory investigation of the major brokers and ACE European Group has announced the health policy and economics writer who covers travel insurance, public health, and medical previous successes and future opportunities. The insurers with the resultant adverse publicity for our appointment of Isabel Gouveia-Lima as Operations education issues in Canada and the United States. decision to appoint a Group Commercial Director industry. UIB’s client focus, know-how and business Director. She will be based at the Group’s He has been writing about health financing and is a significant endorsement of our commitment to base provides enormous potential for growth. European Headquarters in London and be policy issues in these countries since the 1960s providing the most dynamic health and wellbeing “Through their owned international investments responsible for driving process change and and is a frequent contributor to leading North support services available.” and the IBA network to which they belong, UIB improvements throughout all aspects of the American professional journals and consumer media. He lives in Fort Lauderdale, Florida. has a global presence in well over a hundred company’s service delivery. countries. Over the years, they have cultivated a Ms Gouveia-Lima joins ACE from Citigroup, where M Consulting Limited is a full-service business- highly skilled and committed team of professionals she spent eight years driving business led to-business marketing communications agency who have the distinct ability of building on the operational changes throughout Europe. “In total, specialising exclusively in the insurance, Groupama successful platform already created. I look forward Isabel has a career spanning over twenty years with financial and legal service sectors. The agency provides operational and strategic marketing to working with this talented group.” a strong track record in leading operations functions consultancy, PR, business strategy, design, propositions Harris within the financial services industry,” said a research, direct marketing and new media. M company spokesperson. Consulting clients include leading Groupama international insurance brokers and risk Insurance has management companies, Lloyd’s of London Zurich Financial syndicates, life assurance underwriters and announced the several Top 500 legal practices. appointment of Lynn Harris as Services appoints John Sanders is a freelance journalist, writing Proposition mostly about insurance, technology, Development Zurich Financial Diary dates management and education. His clients include magazines, corporates and the Welsh Assembly Manager, Services Group Government. From 1990 to 1998 he worked for reporting to the (Zurich) has 21-22-July the Reuters news agency in London. For further Head of announced the NCIGF Legal Seminar information see www.johnsanders.clara.net Customer appointment of Jane Proposition at Tutoki (46) to the National Conference of insurance Roger St Pierre is one of the UK's most Groupama, new position of Guaranty Funds experienced travel, music and motoring writers and has visited 111 countries on five continents. Cathie Bruce. Group Chief Claims New York Marriott Marqui, US His insights appear in a wide range of consumer Lynn was Officer for the www.ncigf.org and trade publications. Roger's 33 published previously with General Insurance books include a history of McDonald's, guides 25-July Lumley Limited business. to such destinations as Orlando, Moscow, Australia & New Zealand Insurance Edinburgh and the Costa del Sol, biographies of as Value Creation Manager and has substantial Reporting to John Marilyn Monroe, James Dean, Bob Marley and broking and technical insurance experience. She is Amore, Chief Industry Awards Jimi Hendrix and a range of cycling books, the an Associate of the Chartered Insurance Institute, Executive Officer of Westin, Sydney, Australia latest of which is A Bike Is For Life. was an Associate Director at Marsh Affinity General Insurance, 26-27-July Schemes Division and has broker service she will bring an integrated, group-wide approach The New World of Liability Insurance experience from her time with Norwich Union as a to the claims management processes at Zurich. Published on behalf of Business Development Consultant. This includes the definition of governance and the Sydney, Australia Voyageur UK (Travel Services) Ltd, Voyageur Buildings, 43 Colston Street, Lynn will be involved with designing, building and setting of claims policy for the group’s general 7-11-August Bristol BS15AX, UK implementing a range of different customer insurance operations. Jane Tutoki will also establish Annual Meeting of the American Risk propositions right across Groupama’s product operational claims authority for all general insurance and Insurance Association The information contained in this publication has been range. Says Cathie Bruce: “This is a new and highly business lines. published in good faith and every effort has been made to Sheraton City Centre Hotel, Salt Lake specialist role that will help us develop our range of Jane Tutoki joins Zurich from the Farmers Insurance ensure its accuracy. Neither the publisher nor Voyageur Ltd City, Utah, US can accept any responsibility for any error or products and services for brokers, but will also Exchanges, where she last served as Vice President misinterpretation. All liability for loss, disappointment, support our Key Account Management team in of Specialty Claims, responsible for all commercial www.aria.org negligence or other damage caused by reliance on the building initiatives that deliver business for claims of the Exchanges. After graduating with a information contained in this publication, or in the event of 10-14-September bankruptcy or liquidation or cessation of the trade of any Groupama and opportunities for our intermediary degree in Business Management from Seton Hill 36th Annual URMIA Conference company, individual or firm mentioned, is hereby excluded. partners too. Lynn will be on the road in front of College, she received a law degree from the University Risk Management & Insurance brokers but working very closely with our University of Pittsburgh. Jane Tutoki practiced Printed by St. Ives (Roche) Ltd underwriting and marketing teams to help deliver insurance defence law for much of her early legal Association the various business solutions that our supporting career prior to her entry into strategic claims Charleston, South Carolina, US Copyright © Voyageur Publishing 2004. Materials in this publication may not be reproduced in any form without permission. brokers need.” management. www.urmia.org/Charleston/Charleston.htm INTERNATIONAL TRAVEL INSURANCE JOURNAL ISSN 1743-1522

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