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Willis Towers Watson Asia Pacific business receives accreditation

Willis Towers Watson, the global advisory, broking and solutions company, today announced that its Insurance Consulting and Technology (ICT) business in Hong Kong, Singapore, Malaysia and Indonesia has received accreditation under the Quality Assurance Scheme (QAS) by the Institute and Faculty of Actuaries (IFoA).

Willis Towers Watson was one of the first organisations to be accredited when the IFoA introduced the Scheme in the UK back in 2015. “Willis Towers Watson was one of the first organisations to be accredited when the IFoA introduced the Scheme in the UK back in 2015,” said Mark Birch, global leader, professional excellence for Insurance Consulting and Technology. “Professional excellence is a core value of Willis Towers Watson and this QAS accreditation recognises that. It was a natural step for us to seek to extend the accreditation to our Asia Pacific practice,” said Birch, who attended the recent IFoA Asia Conference in Bangkok where, in recognition of the accreditation, he received a trophy on behalf of the practice.

He added: “We are committed to leading and sustaining professional excellence. This means ongoing communication to educate and engage our colleagues in our Professional Excellence approach; we provide colleagues with tools and clear guidance to meet our standards and recognise and reward for outstanding contributions to Professional Excellence.”

The IFoA has over 28,000 members worldwide. It encourages actuarial employers to provide an appropriate environment and support systems to help actuaries produce high quality actuarial work. To gain the accreditation, the offices underwent a vigorous independent assessment that examined areas such as quality assurance, conflicts of interest, employee development and training, along with creating an environment that supports speaking up about issues that cause concern. It also looked at client relationships, including engagement and communication, and the handling and resolution of any issues raised.

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Exclusive Insight: Making the most of Brexit transition time

A major trading company seeking a “Brexit-safe” solution; an automotive supplier concerned about financial complexity; a big FMCG player with questions about its logistics and supply chain.

These are among the corporate clients in close discussion with HSBC as they seek out post-Brexit opportunities and strive to mitigate any impacts of the UK’s withdrawal from the EU.

Chairing the webcast conversation, Andrew Betts, Regional Head of Global Trade & Receivables Finance, Europe, said clients were currently preoccupied with two main themes: digital disruption and regulatory changes, Brexit being one of the latter.

The forthcoming Brexit changes have triggered open and wide-ranging discussions between businesses and banks, according to Ian Tandy, Head of HSBC Global Trade & Receivables Finance, UK.

While much uncertainty remains, the potential transition period is widely seen as good news by businesses, he noted. They welcome the prospect of limited immediate impact for a period after March 2019.

However, Tandy urged corporates to make good use of that period: “It gives a little extra time for companies to prepare. The winners from Brexit will be those who plan most effectively.”

Braced for tariff changes

The panel emphasised that the importance of planning applies equally to EU-based as to UK-based corporates. Beatrice Collot, Head of HSBC Global Trade and Receivables Finance in France, said some France-based businesses were wrongly considering Brexit’s impact as falling purely on the UK.

This point was underlined by a recent report cited by Tandy, that calculates the costs of red tape if the UK is forced to fall back on World Trade Organisation rules after Brexit. This report predicts that this scenario would cost the UK economy £27bn, while its EU trading partners would lose £31bn.

Tandy pointed to the huge variations in tariffs that different sectors would be subject to: “A UK grocer importing vegetables from France would see the costs rise by 7.3%; UK fishing businesses exporting to Germany would see extra costs of 10.8%, affecting both partners,” he added.

Collot saw sectors responding in different ways. “In luxury goods, where margins are high, businesses are more able to increase prices to offset the cost of the customs tariff,” she said. “In the automotive industry and other sectors where margins are thinner, it’s more complex to absorb the additional cost.”

Facing up to complexity

Besides potential extra costs of border controls and warehousing, businesses are considering whether they need to source suppliers in new countries, or to seek business in new markets. Talent flow is a concern for some UK-based businesses, while licensing arrangements are an issue in sectors such as pharmaceuticals.

As part of their preparation, clients need to examine their entire supply chain with “intellectual curiosity”, Tandy said. He pointed to one major FMCG (Fast-moving consumer goods) business which had outsourced some elements of manufacturing. It is now working to track and understand every player involved, to ensure future compliance.

Alex Mutter, Head of HSBC Global Trade and Receivables Finance in Germany, said one automotive supplier with a huge European operation asked HSBC to help it reduce complexity, in readiness for any impact on areas such as foreign exchange and financing.

Another client, a major trader operating from the UK and Germany, was working to secure a “Brexit-safe” solution, Mutter said: “We have been able to help them achieve their objectives on balance sheet optimisation and risk mitigation as well as funding sources.”

Finance: the future is flexible

Clients will require flexible finance options in the post-Brexit era, the panel noted. Solutions will need to alleviate the impact of border controls on cost and working capital cycles, and to mitigate payment risk where businesses decide to seek out new markets beyond Europe, for example.

The panel’s trio of trade finance experts from across Europe underlined HSBC’s capabilities here, said Andrew Betts.

“With an established European network on both sides of the channel, and working with over 6,500 multinationals across Europe, we’re confident that we’re in a strong position to support customers regardless of the Brexit outcome,” he said.

Trade and technology

Brexit is far from the only issue on corporates’ agendas, Betts acknowledged, with regulatory changes and digital disruption also prominent. The webcast took place shortly after HSBC completed its first-ever distributed ledger trade transaction.

Collot, who leads a Paris-based innovation hub in trade finance, sees potential for big efficiency gains: “At present, financial and physical supply chains don’t talk to each other much. Convergence is an opportunity to gain full transparency and suppress the current inefficiencies of trade finance.

“It’s difficult to know where we will be in 10 or 15 years – but there’s a huge opportunity to change a paper-based business that has not evolved much in the past 30 years.”

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Knights joins UK law firms heading to the stock market

London is set for its biggest legal float so far as regional solicitor Knights Law confirmed plans for a City listing.

The move is set to value the company at more than £100 million and generate a paper fortune for chief executive David Beech, who owns 65% of the company along with other managers.

Knights, which traces its roots back to 1759, has around 7,500 clients including big corporate names such as Aldi, Paddy Power and Rolls-Royce.

Gateley was the first law firm to float in London in 2015, followed by Gordon Dadds and then Keystone Law last year, as practices move from the traditional partnership model and look for other sources of capital for acquisitions in a consolidating sector.

“The old model for the legal sector is rapidly becoming redundant,” said Beech.

Part of the proceeds from the IPO will be used to pay down the majority of the existing debt pile. The funds will also be used as “an alternative financing option to the group to further assist its strong acquisition strategy”, Knights said.

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New Insurance Authority regulation to impact insurance consultants

Published on May 20th, 2018, Decision No. (12) of 2018 issued by the United Arab Emirates (“UAE”) Insurance Authority regulates the licensing and registration of insurance consultants and organizes their operations.

The strict requirements introduced will allow the UAE Insurance Authority to ensure a high quality of insurance consultancy services provided to clients throughout the UAE.

All consultants currently registered are granted a period of six months to rectify their situation and submit all documents required by the Insurance Authority to maintain their registration. Failure to do so will result in cancellation of their registration and would prevent them from legally providing insurance consultancy services to their clients until they are fully compliant with the Decision No. (12) of 2018.

The new law implements strict requirements which aim to better organize the practice of insurance consultancy in the UAE:

– It prohibits all insurance consultants from combining their profession (as insurance consultants), with any other profession associated with insurance. For example, an insurance consultant may not also act as an insurance broker.
– Educational requirements and practical experience requirements have been specified for individual insurance consultants and an assessment to pass prior to registration has been introduced.
– Stricter conditions issued for foreign companies wishing to practice insurance consultancy in the UAE as these companies will need to be licensed as insurance consultants in their country of origin.
– Decision No (12) of 2018 has also introduced a professional indemnity and an insurance policy as follows:
– Corporate insurance consultants will need to submit to the Insurance Authority a professional indemnity and an insurance policy with a sum insured of 3 million dirhams, with a maximum deductible amount of thirty thousand dirhams (AED 30,000). Employees of corporate insurance consultants are not subject to this requirement.
– Individual insurance consultants will need to submit to the Insurance Authority a professional indemnity and an insurance policy with a sum insured of 5 million dirhams, with a maximum deductible amount of thirty thousand dirhams (AED 30,000).
– Penalties for infringement have been introduced. Any violation of the Decision No. 12 will put insurance consultants at risk for penalties, including but not limited to license suspension and/or cancellation.
– This decision will undoubtedly result in a significant decrease in the number of insurance consultants currently registered at the Insurance Authority as many won’t be able to satisfy the new prerequisites.

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The Kilpatrick Renaissance wins Excellence in Masonry Award

The Kilpatrick Renaissance recently won an Excellence in Masonry award from the Masonry Advisory Council. Worn Jerabek Wiltse Architects, P.C. is proud to have been a team member on this project. Congratulations to everyone involved!

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The Kilpatrick Renaissance is a 4-story independent senior’s apartment building located in Chicago’s Portage Park neighborhood. The project was built to address the need for affordable housing options that would allow local seniors to remain in the neighborhood they call home. It includes 98 residential units available to seniors ages 55+ that consist of 38 studio apartments, 54 one bedroom apartments, and 6 two bedroom apartments. In addition to the residential units, The Kilpatrick Renaissance features numerous common amenities available to the residents including an on-site management office; club room with a fireplace, lounge areas, and a kitchen; sun room opening onto a beautifully landscaped private courtyard with a pergola, fire pit, and seating areas; library with computer stations; fitness room; resident storage units; and a 4th floor roof terrace with a pergola and lounge. In addition, the project includes a public pocket park on-site with seating areas, landscaped planting beds, and community garden plots that are open to all members of the community.

The building’s exterior facade consists primarily of brick and stone masonry with detail elements of composite metal panels at the projecting bays. The massing of the 4-story building was broken up into smaller volumes to fit better within the neighborhood context. The project has incorporated a number of sustainable design features including energy efficient variable refrigerant flow mechanical systems for heating and cooling, energy recovery on the building’s ventilation system, high efficiency lighting, water-conserving plumbing fixtures, Energy Star appliances, and a rainwater harvesting system that will supply water for the landscaping irrigation system.

The Masonry Advisory Council is a collaboration of Educators, Experienced Professionals, Engineers, and Supplier Groups that support masonry construction, materials and assemblies. Contact us with your masonry questions, we are here to help!

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The 10 countries that make the most money from taxes

Paying taxes is something no one enjoys doing, but the amount individuals and companies pay varies enormously throughout the world. The Organisation for Economic Co-operation and Development (OECD) has calculated how much tax was paid in 2016 by 10 countries. Here’s what it discovered. How does your country measure up?

Australia: $348 Billion

The latest figures available show Australia raised $348 billion from its 24.13 million-strong population. Individuals pay income tax on a progressive basis from 19% to 45%. A Medicare Levy is payable on top to pay for public healthcare; this was increased from 1.5% to 2% in 2014, while since 2015 higher earners who don’t have private hospital cover must also pay the Medicare Levy Surcharge of between 1% and 1.5% on top. Corporate taxes stand at 30%, however the government is pushing for this to be cut to 25% by 2025.

Japan: $351.6 Billion

Japan received $351.6 billion from its population of 127 million, according to the most recent figures. In 2017 the country’s ruling bloc approved a plan to cut the corporate tax rate from 30% to 20%, although only for companies that raise wages and increase capital spending. Japan has a progressive income tax system, with rates from 20% to 40%.

South Korea: $371.1 Billion

South Korea, which received $371.1 billion from its 51 million population, is undergoing huge changes this year as the country enacts a 2018 tax reform bill. Some of the changes include adding a new 25% corporate income tax bracket for taxable income in excess of $270 million, instead of the previous flat rate of 22%. Meanwhile the top income tax bracket has been increased from 40% to 42% for higher earners.

Spain: $412.4 Billion

With a population of 46.6 million, Spain generated tax receipts of $412.4 billion in 2016 according to the report. The country operates a sliding scale of income tax from 19% to 45%, while the general corporation tax rate is 25%. Meanwhile, residents of the Andalucia region had some good news this year, as it was announced changes to inheritance tax rules mean that the vast majority of children or spouses will not have to pay it anymore.

Canada: $491.1 Billion

The system of paying federal tax is simple in Canada: there is a sliding scale of 15% to 33% depending on how much you earn, however it gets a bit trickier when you need to add on provincial and territorial tax as the rate you pay depends on your income – and where you live. The rates vary dramatically from 4%, the lowest bracket in Nunavut, up to the highest bracket in Nova Scotia of 21%. The country’s population of 36.3 million brought in a total of $491.1 billion in 2016.

Italy: $792.8 Billion

Italy’s 60.6 million-strong population helped contribute to vast tax revenues of $792.8 billion. Italians pay personal income tax of between 23% to 43%, plus regional tax which is typically between 1.23% and 3.33%

United Kingdom: $869.4 Billion

The UK generated $869.4 billion in tax from its population of 65.6 million people, according to the OECD report. The UK uses a progressive income tax system, where those living in England, Wales and Northern Ireland pay between 20% and 45% tax, while those in Scotland pay 19% to 46% tax depending in their earnings. Residents must also pay National Insurance contributions too, which are 12%, although workers who earn more than $62,380 pay only 2% on earnings over that threshold. The Corporation Tax main rate is 19% but is set to be reduced to 17% in 2020.

France: $1,115.9 Billion

With a population of 66.9 million, France generated $1,115.9 billion in tax. However it will be interesting to see the results of dramatic tax cuts President Emmanuel Macron made in 2017, including slashing the contentious wealth tax effectively by 70% and introducing a 30% flat rate on capital gains.

Germany: $1,305.7 Billion

A combination of being the biggest economy in Europe, a population of 82 million and a relatively high taxation system means Germany has the second-largest tax revenue in the report at $1,305.7 billion. In addition to income tax, which varies from 14% to 45% for very high incomes, everyone has to pay solidarity tax, which is capped at 5.5% of an individual’s income tax. Also, if you’re a member of a church registered in Germany, you will also be required to pay a church tax of 8% or 9% of your income, depending on which federal state you live in.

United States: $4,846.3 Billion

The US tops the list in the report for having the highest level of tax revenues, with $4,846.3 billion tax generated from its population of 325.7 million. However with the US going through huge tax reforms this year under President Trump, it will be interesting to see the impact that has on those figures in future. Most analyses suggests that while the changes aren’t the biggest tax cuts the country has ever seen, the reduction of the corporate tax rate from 35% to 21% is the biggest corporate tax cut in US history.