Healthcare Ruling Boosts Health Stocks

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Supreme Court ruling and rumoured takeover bid for Humana gives share prices a boost.

Yesterday’s Supreme Court ruling to uphold the Affordable Care Act, a lynchpin in President Barack Obama’s healthcare reform programme, has led to a rise in the prices of stocks in healthcare firms. Rumours of a possible deal by Aetna to acquire Humana Inc, the second-largest U.S. health insurer based on market value, have also helped to instigate the rise in share prices for numerous healthcare companies and hospitals.

The reports, initially circulated by online news magazine Bloomberg, estimated that ‘any proposal would probably value Humana above its $28 billion market capitalization’. The article also asserted that Humana had received a second offer from Cigna. News of this has also raised Humana and Aetna’s own stock prices.

Last week, Cigna itself was the subject of an offer, which was subsequently rejected, by Anthem Inc, with the company stating that ‘the Cigna Board has unanimously determined the proposal is inadequate and not in the best interests of Cigna’s shareholders’.

Shares in HCA Holdings, the Hospital Cooperation of American, rose 9%, whilst Tenet Healthcare, saw their stocks rise an impressive 12.29%. Another firm whose stock price rose dramatically was Community Health Systems, whose shares rose 13%. Universal Health Services also benefitted, with their shares rising 7.73%.

The upholding of the Affordable Care Act safeguards the healthcare benefits of approximately 6.4 million Americans. Many Republicans have been vehemently opposing the scheme since its instigation in 2010.  The ruling was upheld 6-3 in favour of the notion that the offering of the subsidies should not depend on which state the recipient lived in. The average subsidy is $272 a month which is provided in order to help towards the cost of insurance.

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Toyota’s Diversity Drive Hits Problems as American Executive Arrested in Japan

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The Japanese Firm has tried to diversify with a female American executive, but culture clashes led to her arrest in Japan this week.

Toyota Motor Corporation’s new American Chief Communications Officer, Julie Hamp, was arrested in Japan on Thursday 18th June following reports that she had illegally attempted to import drugs, believed to be the prescription painkiller Oxycodone sent to her in a package from the US, into Japan.

The firm appointed Hamp to the position of Managing officer and Chief Communications Officer of the Toyota Motor Corporation in March of this year. Her profile on their website cites Hamp as ‘the first woman named to these positions globally’. Prior to this she was Chief Communications Officer of Toyota Motor North America, Inc, and before joining the Toyota group she had worked for PepsiCO.

Toyota’s decision to appoint Hamp came at a similar time to their appointment of Didier Leroy as the firm’s first non-Japanese executive vice president indicating that the car giant was attempting to diversify away from its traditionally Japanese male senior management.

Akio Toyoda, president of the firm, held a press conference to address the issue on Friday 19th June, during which he announced: ‘We will cooperate fully with the authorities as the investigation continues. In addition to being a close friend of mine, Julie Hamp is an invaluable member of Toyota’s team. We are confident that once the investigation is complete, it will be revealed that there was no intention on Julie’s part to violate any law.’

The arrest comes during a vast period of change for the car firm, who have recently announced a new ‘Toyota New Global Architecture’ scheme which they intend to implement in the future, a manufacturing process involving the sharing the components between various different models of car in order to reduce the manufacturing costs, which if successful could revolutionise the car manufacturing industry.

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Work-Life Balance- The Hidden Motivator

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A recent study by Eagle Hill has highlighted the importance of a work-life balance on the productivity of workers.

Eagle Hill has surveyed employees in the Washington DC area to analyse the factors which contribute to work-life balance and how this affects their relationship with their employer. Eagle Hill defines work- life balance as ‘the healthy blend of an employee’s professional and personal responsibilities. It’s about being able to make the two work together over the long term, understanding that on any given day, employees may not fully “balanced” one way or the other. Rather, positive work-life balance means employees have the control and flexibility to be successful on both fronts.’

The survey was conducted in May of 2014, in the Washington DC area and according to Eagle Hill the subjects were a ‘sample of 389 professionals across multiple industries’. They also state that the survey used subjects who ranged ‘across industries, age groups, and job tenure’.

The survey highlighted the importance of a good work-life balance in creating employee loyalty: ‘over 56% of employees who reported poor work-life balance said they are likely to leave their jobs this year, whereas only 20% of those with positive work-life balance planned to switch employers’. Poor work-life balance ranked above every other factor for leaving their current position offered to the subjects, the other options being decreased pay, no job security, no career advancement, decreased responsibility and no internal networking.

Poor work-life balance was 67.1% of the subject’s reason for leaving their current job, highlighting the important of attaining a situation where employees feel their work and personal lives are in harmony. As Eagle Hill ends their survey report: ‘For the future success of our businesses, organizations must explore new strategies to actively help employees achieve meaningful success—in both their professional and personal lives’.

Eagle Hill contact details: [email protected] or 703.229.8600

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How Safe is Your Identity?

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IRS Commissioner John Koskinen has confirmed that 2.7 million U.S. taxpayers had their identities stolen last year. Speaking before the Senate Finance Committee, Mr Koskinen had been responding to questions concerning the theft of over 104,000 tax forms by fraudsters who had managed to hack into the IRS website.

Large-scale data breaches of this kind are becoming increasingly common, and the trend is by no means confined to the United States alone. Research published in the United Kingdom last week reported a 31% rise in cases of identity theft between the first quarter of 2014 and the same period this year. The problem is global and, as criminals continue to develop more and more sophisticated methods of mining our personal data, it is one that is in growing need of a viable, long-term solution.

One company providing a solution for this is the online-identity firm miiCard, based in Edinburgh, Scotland. According to the company’s CEO, James Varga, “As we continue to do more and more online, as the value of what we do continues to increase, the need to be able to create trust, now more than ever, is paramount. This is especially the case in Fintech, whether retail banking or consumer finance where there is not only a need for trust from a risk and understanding point of view but also regulatory pressures around AML, KYC and ID&V.”

Founded in 2011 with the goal of creating a digital identity that offered a level of trust equivalent to a passport or driver’s license, miiCard (My Internet Identity) leverages the assurance of bank-verified data to allow users to purchase high-value products and services online without the need for document scans. In essence, miiCard takes the trust associated with a bank-verified identity and uses that trust as the basis for a multi-purpose electronic ID.

Crucially, the user also has control over the precise data that is shared with third parties: not an option with a passport, even in those instances when all you need to prove is your legal majority. For Varga, the idea behind miiCard was simply to develop a product that reduced friction for businesses and consumers, “creating an experience that takes seconds to replace what normally takes hours.” He stresses that “letting us control, manage, secure and share our data, from certified bank statements through to our personal details, makes doing more online faster, easier and stronger.”

More recently, the company launched DirectID: a B2B service that operates in much the same way as miiCard, allowing finance applications such as lending and payments quickly and accurately verify a customer’s identity through their existing bank-login credentials. It also provides access to real-time transaction data, removing the dependence on paper-based bank statements and credit reports, significantly limiting the opportunity for fraud to occur and increasing the accuracy of affordability decisions.

As we share our personal information with a growing number of third parties, from social-media websites to online retailers, the value of that information as a means of verifying our identity is inevitably diluted. By contrast, DirectID uses information known to only the customer: their bank-
login credentials.

To the extent that it offers an alternative to KBA (knowledge-based assessment) for electronic verification, DirectID has the potential to eliminate cases of fraud relating to identity theft. In spite of this, Varga says, the financial services industry has been relatively slow to embrace the new technology: “While we have always relied on banks for trust in transferring value, keeping and even managing our money, using this trust for other things online is relatively new. As the pains around trust, fraud, security and identity continue to build year on year, it is now that we are seeing a fundamental shift beyond technical solutions such as authentication and biometrics. In an industry that is traditionally risk averse and slow to do anything different than what they do today, it is taking a movement towards consumer-finance companies disrupting traditional financial services to create a catalyst for change. We empower this change.”

In an environment where each innovation designed to prevent identity theft is matched by one that is designed to facilitate it, miiCard and DirectID can change if not the game, then the rules by which the game is governed. Still in their infancy, the full potential of these products cannot yet be gauged, but they have the power to completely revolutionize the way businesses and consumers transact online.

The company is one to watch for the future.

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Banks Can Take Rapid Action in Competitive Markets as Rates Rise

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Nomis Solutions have announced the release of Nomis 4.6, the latest version of their feature rich price optimization suite, which enables banks to utilize actionable insight to react more quickly in today’s dynamic financial services market.

The 4.6 release follows a period of significant investment into performance and scalability that enables customers to respond swiftly to business opportunities and challenges. Insight gained from the recent Nomis Forum emphasized the increasing pressure banks are under to win and protect market share, grow responsibly, and react quickly. Nomis 4.6 further enables this by equipping banks with the ability to optimize the drivers of profitability and volume across their portfolios at speed and with increased granularity, therefore pricing more effectively, all vital capabilities banks need to master.

For Nomis, the focus is solely on understanding and addressing banking profitability challenges in industry-specific price optimization software. This release adds significant customer value in highly competitive or rising rate environments where speed is essential.

Additional features in Nomis 4.6 include:
A new capability called Active Recalibration™ that dynamically adjusts models, enabling up-to-date and market-informed decisions.
A new reporting suite that quickly surfaces actionable insights.
Enhanced optimization and Efficient Frontier mechanics that reveal key trade-offs to help make strategic decisions quickly.

Nomis also made significant strides in further enhancing their Lending solutions in this release. Below are some of the highlights:
The incorporation of Home Equity loans to round out their widely deployed Home Equity solution.
The integration of third party data from their solution partner, Icon, into their auto finance solution to understand real-time market movement.
Enhanced optimization mechanics for Auto Finance, including user-specific optimization constraints personalizing a user’s solution experience.

Nomis Solutions CEO, Frank Rohde, says of the release, “With rising rates in the U.S., Eastern Europe, and parts of Asia Pacific, the leading economies of the global economic recovery, the question still looms: How do banks tackle the challenge of protecting market share from challengers and benefitting from raising interest rates while satisfying more customer segments? Those who are ready for this challenge will be the winners.

Our solution allows banks to use data science to decide what action to take in a wide range of market scenarios, only one of which is a rising market. In an often-convoluted landscape of approaches to solving price optimization, the Nomis 4.6 Price Optimization Suite offers a simple and integrated software-based approach for incorporating segment, economic, and regulatory variables into pricing decisions based on cutting-edge science and deep understanding of banking economics. Our philosophy has always been to educate the market and provide solutions that make robust price optimization a quickly deployable solution for any bank investing in competitive advantage. Nomis 4.6 makes these capabilities even more accessible for banks seeking to achieve rapid and entirely quantifiable bottom line results.”

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