CATEX Reports
Issue 23 April 2013
In This Issue
New Capital and the Aon Berkshire Deal
ILS Capacity May be Leading to Interest Cuts
Underwriters Warned Again on Standards
Claims Examiners and Underwriters
Roger Crombie on Internet Censorship in UK
Lack of Sandy data, Tom Cruise, Richard Branson and Obese Plane Passengers

 

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Dear Colleague,

I am pleased to send you this month's edition of CATEX Reports. 

As we were completing this month's issue, the news of the Boston Marathon incident dominated American media. Our thoughts and prayers are with the victims and their families.

As with any tragedy, there will eventually be insurance and reinsurance implications.  As observers have noted, the Congressional debate on the reauthorization of the US federal TRIPRA terrorism insurance backstop will be affected by the events in Boston.

 

The proliferation of ILS insurance and reinsurance now have some metrics attached to it. Certainly the discussion about traditional vs. ILS (re)insurance continues.

 

Statistics may be indicating that the investor return on ILS securities is at a low point --so much so that there is a downward pressure on ILS management fees. Many have speculated that this may be a case of oversupply of a product, resulting in lower prices.

 

We have our monthly Roger Crombie article for you once again. This month Roger is quite upset. The focus of his ire is the EU and a British lawmaker seeking to "censor" (Roger's word) Internet publications. 

 

Well, CATEX Reports newsletter is an Internet publication so I suppose we should monitor his concerns closely.

 

As always, if you have any questions about CATEX, our product suite, or any comments on CATEX Reports please feel free to contact us. We always enjoy hearing from our readers.

 

Thank you very much.

 

Sincerely,

 

Stephanie Fucetola

Senior Vice President/CATEX

 

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 aon benfieldGC logo

   New Capital: A Lot of It

 

 

Now we have some measurements about the size of the flow of new capital that's come into the (re)insurance market recently. Aon Benfield, Guy Carpenter and Willis each released studies last month looking at the size of reinsurance market capitalization. They all agreed that it had increased, and increased substantially. Keep in mind that following catastrophic claims a flood of new capital is a standard phenomenon and that natural disaster claims in 2012 were the third highest ever but relatively low in comparison to the natural CAT hit parade of 2011.

 

Still though, the money came in. How much? According to Willis about $35 billion in capital flowed into the market after Superstorm Sandy struck the northeastern US and much of it is going into less permanent structures such as insurance-linked securities and sidecars.

 

The April 1 renewals provided a stark indication of how this new capital may affect premium prices at the July 1 and January 1 renewals. According to Aon Benfield, clients renewing significant capacity in the insurance-linked securities (ILS) and collateralized reinsurance market saw prices reduce by between 25% and 70% for peak US hurricane and earthquake exposed transactions.

 

Outside the US, substantially all of the Japanese market was placed, and programs in India and Korea found adequate capacity despite multiple 2012 storm losses in Korea.

 

Aon Benfield observed that "the reinsurance market is beginning to respond to competition from the alternative markets with leading reinsurers reducing costs".  

 

Here's the big number. In spite of Superstorm Sandy traditional reinsurance capacity grew 11% in 2012 to end the year at $505 billion.

 

My goodness! The ILS market was able to provide cedents with premium reductions of up to 70% and the biggest broker in the world says that leading reinsurers are beginning to respond by "reducing costs"? And combined with those reinsurer cost reductions, earning only negligible returns, is $505 billion in capacity waiting to be put to work to underwrite risks and collect premiums?

 

Remember the admonition to underwriters from John Charman about not to reduce standards simply to intake premium in the face of inadequate rates? With a half trillion dollars in capacity that's a little like dangling a piece of cheese in front of a hungry mouse.
 

Buffett ajit

                         Buffet                                                          Jain

 

There seems to be one very large mouse who usually manages to get the cheese and avoid the trap. Warren Buffett noted last month that Berkshire Hathaway had access to some $73 billion in "float" (premium and claim reserves) coming from its insurance and reinsurance operations. Buffett was justifiably crowing about Berkshire's situation where they can profitably invest the $73 billion after having already earned an underwriting profit for 10 consecutive years. He rightly said "it's like having your cake and eating it too". 

 

Several weeks ago Berkshire and Aon announced that Aon will deliver 7.5% of $2.5 billion ($187.5 million) in premium to Berkshire in exchange for Berkshire providing a 7.5% quota share stake in business placed in London through Aon Risk Managers. Aon describes the arrangement as a "sidecar" with Aon acting as the coverholder on behalf of Berkshire.

 

If you look at that whole pie of $2.5 billion in premium that Aon brokes through Lloyd's as subscription business it will be diminished by 7.5% or $187 million. Instead of looking to place $2.5 billion in premium through Lloyd's Aon will seek to place $2.33 billion through Lloyd's (assuming all the numbers remain the same). Syndicates won't even see the business represented by the Berkshire quota share amount as it will simply be built-in. It will be as if Aon is retaining it and the size of the pie made available to the market decreases.

 

This "pie" is attractive business too. It comes from Aon's retail side and represents a wide, diversified swath of risk for which Berkshire will have no production or servicing costs.

 

It would seem that the new path chosen by Mr. Buffett will be one of those "cost reductions" as cited by Aon Benfield but at what price for the rest of the market? The syndicates are concerned and that means Lloyd's is concerned. Aon's CEO, Greg Case, apparently made a trip to London from Chicago to discuss this with Richard Ward and John Nelson but there have been no announced changes to the plan.

 

case R Ward

                            Case                                                          Ward

 

So...this is a "permanent sidecar" that is deploying Berkshire's highly rated capital to cover retail clients who normally wouldn't have access to this type of arrangement. The quota share will reach the London market only after the Berkshire 7.5% is subtracted. Instead of 100% placed in the market it will now be 92.5% placed.

 

Why are the Lloyd's markets upset? First, there is a fear that the Berkshire move is the start of the "slippery slope" argument. Will other (re)insurers start similar arrangements? How many more percentage points will be subtracted out of what will be offered to the Lloyd's market?

 

Next is pricing. It always seems to come down to that doesn't it? The way the Lloyd's market works is that the Aon business comes into the market and the syndicates who are the different leads begin to quote against each other. This kind of bargaining and negotiating is facilitated by the broker who is obligated to serve his client the buyer.

 

What will happen now is that the 92.5% of the quota share that will get to the market will be discussed, bargained over and eventually agreed to at a competitive price. Who benefits? Certainly the client does who is assured that any "fat" in the quote has been boiled out. The broker benefits as a commission is paid to them, antithetically the better they do their job and reduce the premium the lower their commission is. The coverholder benefits too. They receive a placement commission that is usually a straight percentage of the business placed through them. Who else benefits under this scenario?

 

Berkshire benefits from the price negotiations hammered out between the broker and the syndicates fighting for the 92.5% of the quote share. The Lloyd's price that is agreed to is also then the price that Berkshire will receive thus benefitting from the Lloyd's market mechanics and pricing without having to have done anything.

 

Berkshire eliminates production costs for the premium. Aon is responsible for servicing the business, including claim management. Berkshire also ensures that it receives the least risk for the highest premium simply by letting their competitors fight out the terms of the remaining 92.5% of the quota share as their terms are on a full follow form basis to everyone else's. And of course for payment for the 7.5% share Berkshire receives 7.5% of the expected $2.5 billion in premium.

 

It's a very smart deal for Berkshire. Ajit Jain has been able to combine the best features of the temporary ILS sidecar structure by effectively setting up a permanent sidecar with Aon. There are no production or servicing costs and the premium price has been thoroughly vetted via the controlled frenzy that is the give and take of the Lloyd's market.

 

In some ways it's a strong endorsement of the Lloyd's underwriting mechanism as Berkshire will exclusively rely on the Lloyd's process to set the price and terms of the placement. It would be hard to imagine Berkshire would be willing to surrender its own profitable underwriting record to any entity other than Lloyd's.

 

If we had some spare money we would buy Berkshire Class A at $155,000 a share. You have to hand it to them. Berkshire has responded to the ILS capacity flood by beating it at its own game by establishing a permanent sidecar with the world's biggest broker. It has managed to shed real costs and will benefit from pricing mechanics of the world's oldest (re)insurance marketplace.

 

For Aon, it seems that the calculation is a little less clear. Yes, Aon indeed has lined up some of the highest rated paper in the world to underwrite a straight 7.5% line of its entire quota share for this overall $2.5 billion group of placements. However they may be getting some pushback from their own clients whose risks are included in that package.

 

The Insurance Insider is reporting that the Norwegian oil company, Statoil, snubbed Berkshire Hathaway's Aon-brokered underwriting facility and turned down the offer of a 7.5 percent line and instead offered a standard starting line of just 0.25 percent on its main program. There are rumors that other longstanding supporters of the program are uncomfortable with the arrangement as well.

 

statoil 

 

Why? Statoil's position is that this is their risk and they have the right to determine who is going to insure it. After all, they do pay the premium. There is apparently some discomfort at Statoil over the sudden inclusion of any new market with a percentage stake as high as 7.5%. Given the quality of the Berkshire paper Aon can no doubt offer plenty of good arguments to Statoil why this is a positive arrangement and not one to be wary of.

 

Is it perhaps a feeling on the part of Statoil (and others) that Aon is using its position as the world's largest broker to mandate a coverage distribution of its own choice? No one is saying publicly but suffice it to say that between pushback from some of the coverage purchasers and concerns expressed by syndicates over the reduced size of their potential premium (while their own underwriting and pricing accrues to the benefit of Berkshire) there were enough questions to motivate Greg Case to fly to London from Chicago to meet with Lloyd's executives.

 

We will no doubt be hearing more about this arrangement in the near future and we will be following it.

 

 

ILS Oversupply Having Pricing Effects?

 

 

 

 aon benfield

 

 

 

Speaking of Insurance Linked, Securities Aon Benfield issued an interesting quarterly report on the ILS market. Two interesting numbers pop up. First, the interest rate of CAT bonds remains quite high especially in comparison to current US Treasury interest rates. Interest rates of new issuance of CAT bonds in Q1, 2013 seem to average in the 5% to 10% range but with one notable exception.

 

 

 

State Farm secured $300 million in capacity to provide indemnity coverage against New Madrid earthquake risk. State Farm originally had sought $250 million in coverage but interest was so high they pushed it up to $300 million. They had originally intended to pay an interest rate of 2.75% but the deal closed at 2.50%.

 

 

 

Artemis in Bermuda noted that the State Farm bond "has one of the lowest coupons seen in recent cat bond deals, due to the low risk nature of the covered peril, but a return of just 2.5% is still attractive enough to investors seeking to deploy recent capital inflows and ensure their cash is put to work".

 

 

 

Aon Benfield also noted that the Nationwide CAT Bond, Caelus Re 2013, experienced strong demand as well. This cat bond increased in size by 35% to $270m during the marketing phase due to investor demand. The price eventually closed at a coupon of 5.25% well down from an initial expected range of 6.75% to 7.75%.

 

 

 

It seems as if the feared trend of lowered underwriting standards resulting in lower premiums due to excess capacity may be having a similar effect on the pricing of CAT bonds simply because of an oversupply of interested investors. Where there is high demand a CAT bond issuer can get a lower interest rate. In the secondary market the strong demand has also driven down prices.

 

 

We would just note as well that the four ILS Indices that Aon Benfield tracks to compose its Aon Benfield ILS Index were outperformed by the Q1 performance of the S&P 500 index that posted a 10.03% gain for the period. Presumably there remain some risk bearers who have some investments in equities. We know one (re)insurer (Berkshire Hathaway) who does.

 

 

What does all this mean? Remember that there were two routes that prognosticators theorize would end the flow of new capital into non-traditional reinsurance. One route involved the anticipated reverse stampede that could occur if a really big claim hit, wiping out not only interest returns, but involving loss of either bond principal or deposited collateralized funds.

 

 

The second route involved a narrowing of the gap between ILS returns and other more familiar investments. The gap is certainly narrowing per the Aon Benfield report but with the US Federal Funds rate at 0.25%, as Artemis notes, "a return of 2.5% is still attractive".

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 Underwriters Warned Again
 
ace europe kendrick
                                     Kendrick             
 
  
  

 

  

In the face of the continued flood of incoming new capital ending up in non-traditional reinsurance solutions underwriters remain concerned. John Charman, it seems, is not the only one who has worries!

 

The chairman of Ace Europe, Andrew Kendrick, has urged underwriters to change their ways to compete with a new "permasoft" market environment, driven by entry of new capital that is more mobile and quicker to deploy than ever before.

 

At a talk at Lloyd's in front of the Insurance Institute of London, Kendrick said that the soft premium rates and low investment returns mean that underwriters have to target a combined ratio in the low to mid 90s to deliver adequate returns. It's not impossible, Kendrick said, but it may be only a distant memory. He noted that in 40 of the 60 years from 1920 to 1980 the US insurance industry recorded a combined ratio of less than 100%.

 

The bad news is that in the 32 recorded years since 1980 the US insurance industry has recorded only 4 years when a single ratio was under 100%.

 

Kendrick noted that any reserve releases that may "have flattered results" over the past years will taper off. In fact he wonders "whether reserves booked now will prove adequate when the reality of today's market and economic climate comes to fruition".

 

Kendrick said that carriers should plan on the "permasoft" conditions and not hope for a major catastrophic event to drive premiums upwards. He said that "There is plenty more contingent capital waiting in the wings". "Some talk about 'hot money', others about na´ve capacity. For me, we are now in an era of 'fast capital', that's more mobile and quicker to deploy than ever".

 

 

nephila 

Interestingly, Kendrick pointed to Nephila's arrival in London as a syndicate backer as a good example of the dynamic currently in play. He said "We simply better get used to more variable and generally higher levels of fast capital in the new normal".

 

Kendrick's comments seem to suggest that the 'fast capital' is and will be part of the 'new normal'. It's almost like he is saying enough already. The situation has changed and we need to deal with it. He says you deal with a situation by controlling the things you can control which in his case is ensuring that his book produces an underwriting profit.

 

Not a bad strategy. If you keep things simple, and stick to what you know, then things tend to be clear.

 

    
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Contact Between Claims Examiners and Underwriters? 
  
  

 

  

claims journal  

   

We read an article in the "Claims Journal" last month. The start of the first sentence caught our attention. "There are good business reasons why claims and underwriting professionals of casualty insurance carriers don't talk to each other about claim denials....."

 

We have often experienced the disconnectedness within insurers and broker companies between the claims and underwriting or placement related departments. Frankly we had always assumed that the separation was due more to the different nature of the operations and skill sets needed to perform each rather than a semi-official policy discouraging discussion.

 

Claims personnel are trained to both serve the client and to be cautious in disbursing money. Especially in light of low investment yields any action they take to post a claim reserve against anticipated future possible claim payments is bound to be scrutinized closely. We had never thought that the separation between claims and underwriting was an intentionally followed practice until we read that Joseph Cellura, SVP for Allied World, said when the article quoted him "There's a lot of separation of church and state that supports the credibility of how claims get handled."

 

We thought about this and came to understand that there is a dynamic at work even internal to the carrier. On a long tail casualty policy that may have been written years ago claims professionals can be subject to various "creative" arguments by prospective claimants (or the attorneys representing them).

 

We've seen this in the past with asbestos claims which evolved from attaching liability to the asbestos manufacturers all the way to the commercial haulers which delivered the material to the claimant as well as all the sectors in between on the supply chain. When there is a grievous harm courts have responded to creative arguments brought on behalf of plaintiffs even if those eventually held liable were not foreseen within either the original policy or for that matter even identified as a potential payer when the policy was written.

 

If, as most claims professionals answer, "the policy speaks for itself" is the guide used when examining whether a potential claim is valid or not, some attendees at the Advisen Casualty Insights Conference asked why don't the claims people at least contact the underwriter who wrote the policy to understand what the intent of the coverage was in the first place?

 

On the face of it this seems to be a logical request doesn't it? After all if the underwriter has worked with the client to produce and agree to a policy why wouldn't the claims personnel at least consult with the underwriter before making any determination?

 

From what we could glean from both the article and from calls we have made the reason the "separation" exists is more for an Enterprise Risk Management (ERM) reason than anything else. Again, on the face of it, we can see that an underwriter could try to influence a claims examiner's loss reserve as it could negatively impact that underwriter's P&L. To avoid later legal challenges to a claim, or the manner in which it was handled, some insurers, especially with long term excess casualty on an occurrence cover, do not encourage any discussion between the examiner and underwriter.

 

Claim examiners seemed to be put on the spot by this line of questioning at the conference which seemed to originate mainly from non-insurance company attorneys. One examiner said that a conversation with an underwriter (presumably one within his own company) was unnecessary as the examiner has "the functional equivalent" of that discussion with the broker who was involved in the placement of the coverage "and knows what went on."

 

Still, we came away from this feeling a little odd. We can understand that on a policy written 15 or 20 years ago the underwriter could have retired or moved on and there is no underwriter to contact. We can even understand the logical desire to maintain some separation, in light of subsequent possible legal proceedings, to keep claim examiner - underwriter discussions to a minimum.

 

matthew jacobs 

                                                                        Jacobs

But as Matthew Jacobs, a partner in the Washington, DC office of the law firm Jenner & Block, said insurance buyers "want to be comforted that when they submit claims that those claims will be handled in a manner that is consistent with the underwriting intent at the time they bought the coverage".

 

Claim examiners at the conference did say that there is much more coordination today between examiners and underwriters than there was only 10 years ago. And Mr. Cellura agreed that the "disconnect" is an issue that "absolutely has to be addressed" even in light of the ERM issues. As Mr. Cellura said "How do you maintain that (the ERM standards) and still have the communication so that the client's best interests are met?"

 

We wonder if the same semi-official "disconnect" exists in areas other than long-tail casualty and would be interested in hearing from you.

 

Roger Crombie writing for CATEX Reports takes an off-beat view of the world of insurance
  roger 
Roger Crombie

  COWARDLY NEW WORLD 

 

 

Roger Crombie is appalled by the overweening new powers of governments

 

In the past month, two government policies have been introduced that significantly and permanently change the very nature of life for insurers and ordinary people. Both emanate from Europe, but will doubtless one day resonate throughout the rest of the world. Like genies, monstrous ideology doesn't go back into the bottle.
 
The first, of the greatest possible interest to the insurance community, was the unexpected revelation of the true nature of the European Union. Looking to solve a crisis of its own making - the bankruptcy of Cyprus - the EU decided to help itself to money from bank deposits to foot the bail-out bill. Twenty-six of the 27 Governments of the EU (Cyprus was not allowed a say in its own future) decided that they would help themselves to a share of every bank account in Cyprus.

 

 

The president of the Euro Group, Jeroen Dijsselbloem, casually mentioned that this would happen in subsequent cases where the EU's finances did not add up. In short, the EU is a naked kleptocracy, Dijsselbloem confirmed.

 

Governments taking people's money is old news, but until now most elected governments of the past few hundred years had limited their share to legally mandated taxation, usually following parliamentary debate. The Cyprus debacle showed that such niceties will no longer be respected. If your Government decides it needs money, it will take it from you, like a four-year-old rifling through your wallet.

 

Cyprus set the precedent: be under no illusion. If you have money in a European bank account, it is yours only for as long as your Government feels like letting you have it. This won't apply to American accounts (yet).

 

Which industry routinely has more money in its coffers than any other? Insurance. The insurance model requires companies to take in money that it might not need to use for decades. Life insurance is the most extreme example. What Cyprus shows us is that, in dealing with Europe, political risk insurance is more necessary than auto cover. You might or might not wreck your car; you will have your money stolen by the EU, sooner or later. In the grand scheme of things, Somalia is now not much riskier than Belgium or the UK.

 

Ignore for the purposes of this discussion for what purpose governments might need the dough. In this case, it's for propping up the expense accounts and salaries of unelected European officials, but next time it could be for something silly. It won't matter: the money's not ours. It's simply parked, awaiting disposition by the new co-signatory on every bank account, the Government.

 

Fund aggregators in Cyprus, such as attorneys whose client accounts held the assets of many others, were not exempt from the grab and nor, as far as I can find out, were insurance companies. The final 'tax rate' was about 40 percent of balances above €100,000.

 

If you're one of those who believes EU officials when they say this was a 'one-off', good luck. Income tax was introduced that way, at a shilling per window. Before too long, in the UK, it had reached beyond 100 percent (late 1960s: top rate, 105 percent on earned income, 125 percent on unearned). Taxes, once introduced, stick and only increase. Dismiss me as an alarmist at your peril.

 

Will the increased risk in bank deposits, now and forever, mean a commensurate increase in interest rates? Nope. Can't. The economic mastermind Alan Greenberg and his henchman Ben Bernanke have seen to another stark banking reality: interest rates are, more or less, at zero and will not rise again in our lifetimes. Lord, Lord, how I wish that weren't true.

 

When the thug Greenberg cut interest rates to zero, he gave no thought to whether he might ever be able to restore the idea of paying interest on deposits. What government on the face of the planet will ever raise its national bank rate, thus increasing the cost of mortgages and business loans? No votes in that idea.

 

Welcome to the future, in which the prudent have their savings confiscated to pay for the poor habits of everyone else. On the plus side, I finally see the point of dying: who would want to live in a world like this?

 

I have acres to say on the month's other big development, but the Internet isn't big enough to hold my thoughts; I'll summarize. The most powerful press censorship since the days of Adolf and Il Duce is to be introduced in Britain. The brains behind this development is Hugh Grant, a criminal (lewd conduct) who is now Britain's leading legislator.

 

 The new law will cover print and Internet publications. I am obliged to point out that, as the law is currently worded, CATEX Reports may now only include my ravings without being forced to register in the UK for the full censorship programme because the majority of its readers are not based in the UK.

 

In other words, if this extraordinarily good e-zine catches fire in the UK and thousands of readers flock on board, CATEX Reports will face a stark choice. It will have to face unlimited punitive damages and the automatic loss of both sides' legal fees (win or lose) every time something I write vaguely upsets someone - or fire me.

 

Just kidding: I'd quit. Press censorship has already deported and barred me from one country for doing my job. I only want to live in a country where a man may speak his mind. Old-fashioned, or what?

 

Late news: Stung by the realization that they were about to criminalize almost everyone in Britian, UK politicians have proposed an amendment to the new censorship laws. The Guardian reports that bloggers with a turnover of less than two million pounds annually (about $3 million) and fewer than 10 employees will be excluded from certain punitive elements of the proposed new press regulation. Bloggers must continue to respect the libel laws, but will not be subject to the same punishments as the major newspaper publishers. The proposed law remains nonsensical, and I'm now free to tell you that. 

 

 

 

 

  

* * *

 

Roger Crombie is an American Society of Business Publication Editors national award winner. An English chartered accountant who lives in London, he writes and broadcasts news and opinion in the US, UK, Bermuda and the Caribbean, in print and online. His main beat is insurance and financial services, with 30-year sidelines in music and humour. All views expressed in Roger's columns are exclusively his own. Contact Roger at roger.crombie@catex.com.

Copyright CATEX Reports

April 22, 2013

 

 

 

 

 

Quick "Bytes"
 
 
 
The Royal Gazette writing about Swiss Re's latest Sigma Study said that poor data quality regarding the likely impact of Sandy's storm surge and the importance of policy deductibles have been brought to light in the wake of the hurricane, which accounted for $35 billion of insured losses. We've written in the past about the lack of this data even in the most densely populated part of the US.....To make this data issue even more important the US NOAA says that in seven years 134 million Americans will be concentrated in counties directly on the coastline.....CFO.com released a survey indicating that 61% of CFO's working for companies with less than $499 million in annual sales are the actual buyers of P&C insurance.....Reuters is reporting that pension funds accounted for 14% of direct investment in new CAT bonds issued in 2012 compared to 0% in 2007....
 
cruise 
 
The preview trailer for the new Tom Cruise movie "Jack Reacher" released by Paramount had a scene of "an explosion where a whole cliff came down" that enticed a New Zealand fan identified only as J. Congdon to buy a ticket and see the movie. Paramount, however, had edited that "split-second" scene out of the film and in response to an action brought on behalf of Congdon by the New Zealand Advertising Standards Authority refunded Mr. Congdon's ticket price. We think Congdon has entirely too much time on his hands....
 
branson 
New Mexico has enacted a law that exempts spacecraft parts suppliers from liability lawsuits by passengers. We checked this and Virgin Galactic and New Mexico have indeed set up a facility called Spaceport America from which Sir Richard Branson plans to soon start a space tourism business for $200,000 a ride. He had been threatening to move his operation if the law was not enacted....Finally, and this may be a new wave, Samoa Air has begun to charge passengers for airfare based on their weight. Samoa is ranked 4th in the world in obesity by the WHO with nearly 60% of the population fitting (or not) that definition. As the Samoa Air CEO said "people who are up around 440 lbs recognize that they will be paying for 440 lbs so they deserve to get 440 lbs of comfort.
 
samoa plane 
The company flies small propeller planes carrying up to 10 passengers. Presumably takeoffs would be strained, if not impossible, with ten 440 lbs passengers onboard....
  
                                          
  
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