85% of Lithuanians don’t use insurance services on Internet

The survey of clients conducted by the non-life insurance company BTA Draudimas revealed that 85% of the respondents do not use insurance services on the Internet.

68% of these people are not even aware of the possibility to insure themselves via the Internet. The results of the survey showed that 19% of respondents think that they would be unable to perform the procedures of insurance on the Internet properly.



Meanwhile, 13% of people stated that they managed no financial transactions via the Internet.



BTA Draudimas conducted the survey of its clients on September 1-15. It surveyed over 2,000 clients in the major cities and town of Lithuania.



"The survey shows that the residents of Lithuania are not well-informed about the opportunities to manage their affairs on the Internet. We do believe that the insurance on the Internet is indeed very beneficial and timely service for active persons," told Arnis Zekunde, CEO of BTA Draudimas.

Firstrand's poor results

Integrated financial services group, FirstRand, reported a 13 percent reduction in normalised earnings from R10.1-billion to R8.8-billion and a return on equity of 20 percent.

The company released its June full-year earnings on Tuesday.

"As anticipated six months ago, the group has had to weather further tightening in its operating environments across its franchises," it said.

"Global and local capital markets will continue to see unusually high fluctuations, and conditions for the South African consumer will remain difficult."

FirstRand's disappointing results provided little surprise as the group had already warned in a voluntary trading update at the beginning of the month that its profits for the full financial year would be down as much as 10 percent.

At the same time, it warned that its numbers would be hurt by an expensive and unsuccessful entry into Australia by its subsidiary WesBank.

"WesBank took the decision in the year under review to exit its Australian operations.

"The process to sell the auto loan book has been finalised and the sale of WorldMark is on track and the group is optimistic that the net result of disposing of the lending operations should be largely offset by the eventual disposal of WorldMark," FirstRand said on Tuesday.

WesBank's overall profitability was impacted by significant increases in bad debts in its local retail lending businesses for the period under review.

"The compound effect of negative gearing has also resulted in asset growth slowing... Overall normalised earnings declined 38 percent to R573-million."

However, the performance of the Momentum Group reflected the remarkable resilience of the business "given the difficult trading environment," FirstRand said.

The Momentum Group increased normalised earnings 20 percent from R1.7-billion to R2-billion and delivered a return on equity of 30 percent.

This was a result of Momentum's strong market position with the high-end customer, it said.

In addition, its conservative capital management strategy immunised Momentum against volatility in equity markets.

"Sales via the FNB channels were strong, highlighting the success of its channel diversification strategy."

Turning to RMB, the group said losses in the Equity Trading division amounted to R1.4-billion, compared to a profit of R1.4-billion in 2007.

This included a loss of R1.9-billion in the international portfolio that was partially offset by a profit of R0.5-billion in the local businesses.

"The losses in the international portfolio occurred at the time of extreme disruption and dislocation in international equity markets," FirstRand said.

"There was a dramatic increase in volatility which necessitated additional capital to underpin the portfolios.

"There was a severe divergence in the correlation between the portfolio of small and mid cap stocks and the large cap indices that were used to hedge the portfolio."

FirstRand said this resulted in losses being incurred on both the portfolio and the hedges.

Looking ahead, the group said that given the current uncertain market conditions it "would not be appropriate to provide short and medium term earnings growth targets until stability returns to the macro environment and financial markets".

FirstRand is made up of a portfolio of financial services franchises including First National Bank, the retail and commercial bank; Rand Merchant Bank, the investment bank; WesBank, the instalment finance business; Momentum, the life insurance business; and Discovery, the health and life business.

Hurricane hit property owners in US assessing damage with more on the way

Property owners along the Gulf Coast in the US are assessing the damage caused by hurricane Gustav as agencies predict high levels of damage.

Early assessment from insurance companies is that Gustav could be the fourth costliest storm on record and that many property owners have insufficient cover.

Insurance claims of $10 billion are predicted but the cost of repairs will be much higher as property owners either don't have enough insurance or none at all.

Following the costly toll of Hurricane Katrina, three years ago home insurance rates along the Gulf Coast doubled and many homeowners couldn't afford the new premiums. Owners of holiday homes often don't have enough cover.

Although life was spared and Gustav was kind to New Orleans where the new levees and floodgates held, the city has suffered considerable property damage.

Gustav wreaked havoc on homes, causing extensive damage to roofs, doors, and windows, the National Hurricane Center said. Property owners evacuated from New Orleans should be allowed back on Thursday once power has been restored.

While the hurricane delivered only a glancing blow to New Orleans, the rest of Louisiana was hard hit. Gustav devastated parts of Cajun country, destroying roofs and entire homes, and flooding parts of the mostly rural, low-lying parishes across the state's southeastern and central coast.

As the tail end of the storm moved inland Mississippi also suffered with Hancock County taking the brunt of the storm's wrath causing flooding and extensive damages to roofs.

President George W. Bush declared a state of emergency in Louisiana and Mississippi and there is more bad news on the way for the US. Hurricane Hanna has developed near the Bahamas and Storm Ike, now between the Caribbean and Africa, could also become a hurricane within two days, according to experts.