:00:00. > :00:00.This is Business Live from BBC News with Rachel Horne
:00:00. > :00:10.Insuring against nature - as Hurricane Irma
:00:11. > :00:12.continues to batter the Caribbean the insurance industry braces
:00:13. > :00:15.for one of its most expensive years on record.
:00:16. > :00:17.Live from London, that's our top story on Friday
:00:18. > :00:36.With Irma on course to overtake Katrina as America's
:00:37. > :00:39.costliest hurricane, we'll look at the spiralling cost
:00:40. > :00:45.Also in the programme, the public relations disaster that
:00:46. > :00:50.Bell Pottinger's Asia unit says it will separate from its British
:00:51. > :00:59.parent after its South Africa controversy.
:01:00. > :01:05.The European markets have opened, not a huge amount of movement so
:01:06. > :01:07.far. Many investors holding their breath to see the economic impact of
:01:08. > :01:15.the hurricane season. We'll be getting inside track on
:01:16. > :01:21.Saudi Arabia's plans to sell off oil operations. Plus, after an estimated
:01:22. > :01:32.143 million customers were affected by the massive Equifax incident, we
:01:33. > :01:38.want to know how often you change your password.
:01:39. > :01:45.Hurricane Irma is continuing its path of destruction
:01:46. > :01:49.The International Red Cross says that more than 1.2 million people
:01:50. > :01:54.have already been affected by one of the strong storms ever recorded.
:01:55. > :01:59.And many more are expected to suffer as it continues
:02:00. > :02:02.heading towards the US - it's predicted to reach
:02:03. > :02:09.Aside from the human cost of the disaster, experts warn
:02:10. > :02:12.it could also be one of the most expensive.
:02:13. > :02:14.Much depends on its exact path when it reaches
:02:15. > :02:16.densely populated Miami - but estimates range from $70
:02:17. > :02:24.There's no official figure yet for Hurricane Harvey,
:02:25. > :02:27.which caused severe flooding and displaced more than a million
:02:28. > :02:36.But some, including the Governor of Texas, are estimating costs
:02:37. > :02:39.If that figure is accurate, it would put Harvey ahead
:02:40. > :02:41.of Hurricane Katrina in 2005 - officially the costliest
:02:42. > :02:48.Katrina did damage of nearly ?160 billion.
:02:49. > :02:52.Until this year nothing had come close to Katrina -
:02:53. > :02:55.although Hurricane Sandy in 2012 caused more than $68
:02:56. > :03:01.But it's clear the economic damage from extreme weather is on the rise.
:03:02. > :03:03.Since 1980 the US has experienced 212 major weather disasters
:03:04. > :03:14.And the Chief Executive of Hiscox insurance, Bronek Masojada,
:03:15. > :03:17.told me this year was on course to be one of the most
:03:18. > :03:21.In terms of Irma, we expect it to be a far bigger
:03:22. > :03:28.Most people buy insurance against wind damage.
:03:29. > :03:31.So the economic cost, the insurance costs, could be
:03:32. > :03:34.anything between $50 billion and $150 billion, so a much
:03:35. > :03:39.bigger proportion of the total economic cost.
:03:40. > :03:42.David Marrock is the Chief Executive of Charles Taylor Insurance Services
:03:43. > :03:50.- among other things they help the industry process claims.
:03:51. > :03:55.In the immediate aftermath, it's going to be emergency shelter and
:03:56. > :04:00.food that people will need. How quickly can insurance companies give
:04:01. > :04:02.them emergency funding so that they can survive? I think a lot of the
:04:03. > :04:09.initial emergency funding will actually come through FEMA, the
:04:10. > :04:13.government agencies. The insurance agencies will have to go out and
:04:14. > :04:16.assess the claims, assess if they are covered and then they will stop
:04:17. > :04:22.providing funding. You say assess if they are covered, with flooding it
:04:23. > :04:24.is a grey area. Lots of people don't take out specific flooding
:04:25. > :04:29.insurance, even though the flooding may have been caused by a hurricane,
:04:30. > :04:33.which they are insured against? Essentially, if you look at Texas,
:04:34. > :04:38.for example, the estimate is only 20% of household is actually have
:04:39. > :04:41.coverage for flood in place. That compares to, if you go back to
:04:42. > :04:46.Katrina, over half of people had flood damage cover in place. If the
:04:47. > :04:52.damage is caused by flood, the reality is that the insurers will
:04:53. > :04:56.say that is under your flood insurance. If you don't have flood
:04:57. > :04:59.insurance, those individuals will be looking at FEMA for emergency
:05:00. > :05:04.assistance and it will take quite some time. Part of what Charles
:05:05. > :05:08.Taylor Davis do is loss adjusting, getting onto the ground, assess the
:05:09. > :05:13.damage and what claim people can make. How quickly are you on the
:05:14. > :05:21.ground after incidents like this? We have offices in Houston and Florida.
:05:22. > :05:24.We have people on the ground, right now, ready to assess claims. I think
:05:25. > :05:28.the reality is that there are still a lot of areas that are
:05:29. > :05:33.inaccessible. We deal quite heavily on the commercial end of the world.
:05:34. > :05:36.In that space, people are still getting back to their offices and
:05:37. > :05:40.workplaces to assess what damage there is, and to start making those
:05:41. > :05:43.claims. We seem to have have an increasing number of extreme weather
:05:44. > :05:48.events. Just today we had an earthquake in Mexico. How does the
:05:49. > :05:54.insurance industry factor these in, in projections going forward,
:05:55. > :05:58.working out how much to charge customers? Well, it is clearly one
:05:59. > :06:03.of the more difficult assessments to make because it is essentially a low
:06:04. > :06:06.probability event. When it happens, the costs are enormous. It's always
:06:07. > :06:13.a tough call, exactly how to rate that. They use models to help that
:06:14. > :06:16.assessment and they will have made a view about how many hurricanes, what
:06:17. > :06:22.sort of frequency and with what sort of cost. I think what we are seeing
:06:23. > :06:25.this year is that it will be above what people were expecting, to have
:06:26. > :06:32.two hurricanes of this scale and nature in such close proximity, it
:06:33. > :06:37.would be unexpected, if you like. Briefly, do you think it means
:06:38. > :06:40.insurance premiums will go up? I think there is definitely the
:06:41. > :06:46.potential for that. When insurers get surprised, that is typically the
:06:47. > :06:50.reaction. The caveat to that is that, at the moment, the market is
:06:51. > :06:56.awash with capital. There is always the potential that money will flow
:06:57. > :07:03.back in two, if you like, put capital back into those insurers and
:07:04. > :07:06.rates will end up staying the same. Wait and see? Overall, we would
:07:07. > :07:07.expect rates to go up. Thank you for talking to us.
:07:08. > :07:10.Let's take a look at some of the other stories making the news.
:07:11. > :07:13.The credit rating giant Equifax says its computer systems have
:07:14. > :07:16.It means more than 140 million customers across the United States
:07:17. > :07:18.may have had data compromised which includes addresses
:07:19. > :07:26.The company said its main credit rating databases weren't affected.
:07:27. > :07:28.The world's biggest internet retailer Amazon has announced plans
:07:29. > :07:31.to build a second headquarters in North America.
:07:32. > :07:34.It's sparked fierce competition from cities including Toronto,
:07:35. > :07:37.Texas and Chicago who are all keen to attract the $5 billion investment
:07:38. > :07:49.The new centre will support at least 50,000 jobs.
:07:50. > :07:50.Chinese imports grew slower than expected in August,
:07:51. > :07:53.hit by weak global demand, but a jump in imports
:07:54. > :08:06.It's been a terrible week for the British public relations
:08:07. > :08:10.It was kicked out of its industry body after being accused of stirring
:08:11. > :08:13.up racial hatred in South Africa and now as it nears
:08:14. > :08:15.collapse it's Asian unit is planning to go it alone.
:08:16. > :08:22.It's based in Singapore and Monica Miller is there for us.
:08:23. > :08:28.What have you discovered? Yes, the Asian firm's unit wasted little time
:08:29. > :08:32.to rebrand itself and get some distance from the London based
:08:33. > :08:37.parent. It plans to relaunch its business with a new ownership
:08:38. > :08:41.structure. It will operate under a new name, Clerical Communications.
:08:42. > :08:45.It comes after Bell Pottinger was expelled from the industry trade
:08:46. > :08:49.body after being accused of stirring up racial tensions in South Africa.
:08:50. > :08:53.Big-name companies like HSBC have already cut ties with the British
:08:54. > :09:01.public relations firm since the scandal broke. Here in Asia it
:09:02. > :09:03.story. Revenues have been growing at a steady pace in recent years. They
:09:04. > :09:08.have established offices in Hong Kong, Asia, me and
:09:09. > :09:14.it says the operations are solvent and it is business as usual.
:09:15. > :09:17.Stocks in Asia mixed - the Nikkei has been kept
:09:18. > :09:21.The Japanese stock market is stuffed full of exporters so a strong yen
:09:22. > :09:23.makes their items more expensive for foreign buyers -
:09:24. > :09:26.that pushes down the value of the companies and by extension,
:09:27. > :09:48.You can see the numbers, down 0.63%. The dollar is holding onto current
:09:49. > :09:55.price, investors holding their breath for the aftermath of
:09:56. > :10:00.Hurricane Irma. No huge movements in Europe. Familiar issues at play, a
:10:01. > :10:03.strong euro, a weaker pound. The strength of the Euro consolidated by
:10:04. > :10:06.the ECB meeting where they revised growth forecasts high and indicated
:10:07. > :10:11.they had started to talk about papering. No firm details yet. Let's
:10:12. > :10:14.go to somebody with details, Samira Hussein is on Wall Street.
:10:15. > :10:16.US supermarket operator Kroger will be reporting earnings on Friday
:10:17. > :10:19.and it's expected to show an increase to profits
:10:20. > :10:22.That's because of investments in categories like milk and eggs.
:10:23. > :10:24.The supermarket wars are really heating up in America,
:10:25. > :10:26.as many big US retailers are putting more deficits of groceries.
:10:27. > :10:29.Walmart has been investing heavily in its groceries division, including
:10:30. > :10:36.And of course, the big tie-up between Amazon
:10:37. > :10:43.Also happening on Friday, we'll get numbers for sales at US wholesalers.
:10:44. > :10:47.That likely went up by 0.4% in the month of July.
:10:48. > :11:03.That's after a 0.7% increase back in June.
:11:04. > :11:06.releasing the latest consumer credit numbers.
:11:07. > :11:08.Now, the availability of credit supports purchasing big-ticket items
:11:09. > :11:11.like cars and appliances, which is all part of the highly
:11:12. > :11:13.important consumer spending for the United States.
:11:14. > :11:15.Joining us is Mike Amey, Managing Director and
:11:16. > :11:27.Hello. Let's talk about insurers. What has happened to their share
:11:28. > :11:30.prices, given the hurricane ripping through the Caribbean? So far, so
:11:31. > :11:34.good. The insurance sector as a whole, if you look at the main
:11:35. > :11:38.insurance indices, they are down 2% of 3% over the last couple of days,
:11:39. > :11:42.about 10% on the peek at the beginning of August. That year to
:11:43. > :11:46.date, flat or slightly up. There are some that have done worse than that,
:11:47. > :11:51.but, generally speaking, as you were saying earlier, the market has taken
:11:52. > :11:57.it relatively well. They had a very, very good years before this. They've
:11:58. > :12:01.got a lot of capital? Yes, that is what the markets are focused on. You
:12:02. > :12:04.have the hit two innings this year, but it is not an event that is
:12:05. > :12:09.putting serious pressure on the insurance industry. Let's talk about
:12:10. > :12:13.the ECB, the big meeting that happened yesterday. What headlines
:12:14. > :12:16.came out of it? The ECB is still spending money. It is one of the few
:12:17. > :12:21.central banks trying to put more money into the economy. The European
:12:22. > :12:24.economy is doing quite well as a result. It will grow stronger than
:12:25. > :12:28.the UK for the next couple of years. There is a question mark as to when
:12:29. > :12:33.they are going to stop doing that. That is the focus. What Mario Draghi
:12:34. > :12:37.said to us yesterday, the President of the central bank, is that he is
:12:38. > :12:41.thinking about it, but not yet. He did mention the timing going
:12:42. > :12:45.forward? At the moment they are still spending money, most
:12:46. > :12:48.expectations are that they will slow down the cash spend next year. It is
:12:49. > :12:52.how quickly he is going to admit his own to do that. That is one of the
:12:53. > :12:56.focuses for yesterday. He said, I'm thinking about it, rather than it is
:12:57. > :13:01.a done deal and I'm going to do it starting next month. Still an issue
:13:02. > :13:05.with inflation? The UK is one of the few places with inflation above
:13:06. > :13:08.target. The US has inflation below target. The Europeans, the forecast
:13:09. > :13:14.for 2019 is still only 1.5% inflation. This is the challenge
:13:15. > :13:17.that we have, trying to get growth up, wages up. If you get wages up,
:13:18. > :13:21.hopefully we'll get inflation as well. Many thanks, you will be
:13:22. > :13:23.coming back later to talk through some of the stories making the
:13:24. > :13:23.papers. Our business editor Simon Jack
:13:24. > :13:28.will be here to talk about migration after Brexit and the latest
:13:29. > :13:30.on Saudi Arabia's plans to sell Lots of MPs are concerned about
:13:31. > :13:38.that. You're with Business
:13:39. > :13:43.Live from BBC News. There could be some very good news
:13:44. > :13:46.for those looking for jobs, at least that's according
:13:47. > :13:48.to the latest Recruitment and The REC has found that demand
:13:49. > :13:54.for staff has increased at the fastest rate since April
:13:55. > :13:57.2015, resulting in an And with candidate availability
:13:58. > :14:02.continuing to decline, pay rates are being pushed
:14:03. > :14:05.higher than ever. Tom Hadley, REC's Director
:14:06. > :14:19.of Policy and Professional Welcome to the programme. Can you
:14:20. > :14:23.give us an outline, what sort of jobs are we talking about? It cuts
:14:24. > :14:27.across, and what is interesting is the whole Brexit debate, in some
:14:28. > :14:30.ways, is creating some new jobs. There's a big demand for managerial,
:14:31. > :14:35.leadership roles to help companies navigate these uncertain waters.
:14:36. > :14:40.Also things like risk managers, legal staff, HR staff. There is huge
:14:41. > :14:43.demand there. Also big demand in sectors like the blue collar
:14:44. > :14:53.sectors, hospitality being one, logistics, construction. It cuts
:14:54. > :14:55.across most sectors of the economy. We talked about a lack of
:14:56. > :14:58.availability of candidates. Why are we seeing this? Anything to do with
:14:59. > :15:01.Brexit? To some extent, the demand for engineering and IT has been
:15:02. > :15:06.strong for many years, that predates Brexit, although it is getting
:15:07. > :15:08.harder. Some sectors like blue-collar, hospitality, there is
:15:09. > :15:11.no doubt it is getting tougher. Month on month, professionals are
:15:12. > :15:15.telling us we are making more placements, demand for staff is
:15:16. > :15:19.increasing, how are we going to fill that supply? Our members are working
:15:20. > :15:22.very hard to meet the demand. The challenge ahead is if the hammer
:15:23. > :15:26.does come down on immigration policy, how are we going to be able
:15:27. > :15:30.to meet that demand from employers? That is one of our messages to
:15:31. > :15:34.government. We need a progressive immigration policy to meet the
:15:35. > :15:38.demand for staff. Very briefly, how are the pay rates being pushed high?
:15:39. > :15:41.We keep hearing that pay is not matching inflation and wage growth
:15:42. > :15:47.is slowing. Is it lack of available candidates? Yes, we track starting
:15:48. > :15:51.salaries. Because it is hard to find of candidates to fill the roles,
:15:52. > :15:53.employers are having to put more cash in to attract people to
:15:54. > :16:01.companies. It's not just cash, a lot of companies are looking differently
:16:02. > :16:04.at how they hire, can we get people with less experience and build them
:16:05. > :16:07.up, can we have a printer ships? This is happening while we need to
:16:08. > :16:08.impress the need for progressive immigration policies in the short
:16:09. > :16:19.term. Becky. We will be talking about immigration
:16:20. > :16:35.a little later with Simon Jack, our business editor. You are watching
:16:36. > :16:38.Business Live. Our top story is about Hurricane Irma and the impact
:16:39. > :16:38.it is having on the insurance market.
:16:39. > :16:43.A quick look at how markets are faring...
:16:44. > :16:57.Europe has been open for about 45 minutes. A lot of investors waiting
:16:58. > :16:59.to see what impact the hurricane is going to have on the markets.
:17:00. > :17:02.And now let's get the inside track on this week's big economics stories
:17:03. > :17:08.with the BBC's business editor Simon Jack.
:17:09. > :17:13.What is concentrating minds in the city is the flotation of part of the
:17:14. > :17:21.Saudi Arabian oil industry. There are MPs who are not very happy with
:17:22. > :17:25.the way this deal has progressed. All the financial centres in the
:17:26. > :17:29.world love premium listings - the bring jobs, fee revenue, prestige.
:17:30. > :17:35.This is the place you come to raise money. New York, Hong Kong, London,
:17:36. > :17:42.or would like this because it would be a super premium listing. It will
:17:43. > :17:46.be worth double the amount of Apple, around $2 trillion, to give some
:17:47. > :17:54.perspective. The prestige question is interesting. Because it is 95%
:17:55. > :17:57.owned by the Saudi Arabian Government, its revenue generation
:17:58. > :18:02.machine, you would only have 5% available for the public to buy, and
:18:03. > :18:05.our concerns that smaller shareholders' interests wouldn't be
:18:06. > :18:11.look after. There are strict rules about that. Recently, Theresa May
:18:12. > :18:15.and the head of the London stock exchange went to Riyadh to talk to
:18:16. > :18:19.them, obviously to say, why don't you come to London? Hey presto, a
:18:20. > :18:25.little later, the financial watchdog said it was considering consulting
:18:26. > :18:30.on loosening the rules. They didn't mention Saudi Arabia or Aramco, but
:18:31. > :18:36.everyone knew what they meant. There were loosening the rules to make it
:18:37. > :18:39.easier for Aramco to list here. The question is, should you do that and
:18:40. > :18:48.weaken the standards to get them here, and others are saying, get
:18:49. > :18:53.real. That is one of the big reasons why the FTSE are going after it. But
:18:54. > :18:57.what other stock exchanges are in the race? New York and London are
:18:58. > :19:01.probably the leading candidates. You are right when you talk about
:19:02. > :19:04.Brexit, because there are those who think that after Brexit, some
:19:05. > :19:11.operations will move out of London and it may lose its prestige. Are we
:19:12. > :19:16.seeing this loosening as getting this premium bitter business as a
:19:17. > :19:18.counterweight to some loss of influencing global markets? Some
:19:19. > :19:23.people would say we don't need to that. On Brexit, there was this
:19:24. > :19:27.leaked immigration report. You have been looking into this, and it has
:19:28. > :19:33.sent a bit of a chill through the business community, hasn't it?
:19:34. > :19:39.Basically, some sectors are very reliant on large numbers of EU
:19:40. > :19:47.migrants, such as the hospitality industry. Their trade body said that
:19:48. > :19:53.clamping down on low skilled work in particular would be catastrophic.
:19:54. > :19:56.That was the word they used. Construction is well. Businesses
:19:57. > :20:00.have had the luxury of having almost limitless supplies of labour from
:20:01. > :20:05.the EU. Some people think that has pushed down working conditions and
:20:06. > :20:08.wages here in the UK, and the Government has been trying to walk
:20:09. > :20:12.this tightrope between looking after the concerns of voters on that and
:20:13. > :20:18.also the needs of business. People think that with this leaked report
:20:19. > :20:25.saying they would come down much harder than people thought, they are
:20:26. > :20:28.murdering two is -- they are leaning too hard on the side of voters.
:20:29. > :20:32.Everybody thinks that migration brings down wages. There has been a
:20:33. > :20:36.lot of research done, and at the lower end, there is some evidence of
:20:37. > :20:46.a small reduction in wages in some industries, but generally, it
:20:47. > :20:50.doesn't mean that. Unemployment is 4.4%, almost full employment in
:20:51. > :20:57.economic terms. There that many spare UK workers around to up, and
:20:58. > :20:59.there is a recruitment and employment Federation report saying,
:21:00. > :21:03.we're beginning to feel the pinch and wages will have to start going
:21:04. > :21:08.up. The Bank of England will look at that. If wages go up, good - if
:21:09. > :21:14.prices go up, not so good. The Bank of England will be watching those
:21:15. > :21:17.numbers incredibly closely. Many in the hospitality industry trying to
:21:18. > :21:24.recruit those staff would say, they are skilled, the waiters and the
:21:25. > :21:28.chefs. The definition of skilled and unskilled is a Bay Area, probably
:21:29. > :21:40.the subject for another programme. Thank you, Simon.
:21:41. > :21:42.Aaron has been munching his way through TV dinners in our latest
:21:43. > :21:45.million-dollar idea. Precooked, frozen meals in a tray -
:21:46. > :21:48.and we love them. The idea started
:21:49. > :21:49.with in-flight meals. They first took
:21:50. > :21:52.to the skies in 1945. But the packaged
:21:53. > :21:53.dinner to eat at home Picture the scene -
:21:54. > :22:01.it's Thanksgiving, the US food company Swanson has
:22:02. > :22:05.a problem - it is stuck with 260 Well, someone in the company
:22:06. > :22:14.had a bright idea. Turn them into ready meals
:22:15. > :22:17.with all the trimmings, using the same metal
:22:18. > :22:22.trays as the airlines, and they hit on the brand
:22:23. > :22:26.name TV dinners. Swanson sold 10 million
:22:27. > :22:28.in the first year alone. Well, TV was the new craze in
:22:29. > :22:39.America at the time, and the packets were designed to look like TV sets,
:22:40. > :22:42.with the food on the screen. Whatever it was, these
:22:43. > :22:44.little babies have taken off, with ready meals
:22:45. > :22:45.as we call them today now worth more
:22:46. > :23:03.than $100 billion every single year. I wonder if there is anyone watching
:23:04. > :23:04.this eating a TV dinner, or a TV breakfast.
:23:05. > :23:06.What other business stories has the media been
:23:07. > :23:12.Mike Amey is joining us again to discuss.
:23:13. > :23:20.We were discussing passwords earlier, asking people how much they
:23:21. > :23:28.change them - what about you? Do you change that enough? There has been
:23:29. > :23:31.this huge data breach. In all honesty, I probably don't. If our
:23:32. > :23:35.chief technology officer is watching, then I do regularly change
:23:36. > :23:40.it, but I don't think any of us do, really. The challenge, of course,
:23:41. > :23:49.is, if you keep changing it, you have to remember them all. And then
:23:50. > :23:52.you end up writing them down. The key thing is to monitor your
:23:53. > :23:58.accounts to make sure there isn't any kind of payment that you didn't
:23:59. > :24:04.expect to be going up. Exactly. As long as you keep a close eye on
:24:05. > :24:07.it... If you see any unusual factors, just change them
:24:08. > :24:15.immediately. Think a lot of the reason why people are lax about
:24:16. > :24:19.changing passwords it's because we have this feeling that whatever
:24:20. > :24:22.happens we'll be compensated, we'll get the money back. It's not really
:24:23. > :24:30.going to have an impact on us apart from inconvenience. At some point,
:24:31. > :24:34.that's going to change. 143 million accounts have been compromised, so
:24:35. > :24:40.huge numbers of people compromised on that particular one. The risk we
:24:41. > :24:45.have is that we think it is somebody else's responsibility for us to keep
:24:46. > :24:49.our own online security. Ultimately, it is our responsibility as much as
:24:50. > :24:55.anyone else's. Another story making the papers is about how Poland could
:24:56. > :24:59.end up scuppering the EU- Canada trade deal. This is all about when
:25:00. > :25:04.there is a conflict and there has to be a resolution to a trade conflict,
:25:05. > :25:10.isn't it? Very interesting to people like me. The interesting thing about
:25:11. > :25:13.it is, with any Trego, if you have a disagreement between the two
:25:14. > :25:26.parties, somebody has to be the judge, and typically... -- with any
:25:27. > :25:37.trade deal, if you have a disagreement... Poland have the
:25:38. > :25:41.ability to scupper the deal if they want to. An important one to watch,
:25:42. > :25:46.this one. And it shows how difficult trade deals can be. We thought it
:25:47. > :25:48.was a done deal, but it could be unwound. Indeed. Mike, thank you for
:25:49. > :25:49.joining us. There will be more business news
:25:50. > :25:54.throughout the day on the BBC Live webpage and on World Business
:25:55. > :26:12.Report. Good morning. The weather will
:26:13. > :26:13.remain unsettled through today