April 2008/1

Swiss Re shares fell more than 5 percent this morning after the reinsurance giant continued to disappoint analysts with further structured credit losses that halved Q1 profits.

Bermudian giant ACE Ltd reported a 46 percent drop in first quarter profits after it took a net realised investment loss of $480mn.

A significant rise in revenues boosted Aon Corp’s first quarter 2008 profits, the broker revealed yesterday (1May).

Bermudian (re)insurer Aspen Insurance Holdings Ltd cut back its premiums during the first quarter as its profits fell by $40.7mn.

Bermudian reinsurer Endurance Specialty Holdings Ltd followed a number of its contemporaries with a drop in profits but swam against the tide with premium growth in the first quarter of the year.

New issuance of catastrophe bonds and sidecar capacity in 2008 will be less than the record levels in 2007, due to low cat losses and the softening traditional markets, according to ratings agency Standard & Poor's (S&P).

Willis Group's first quarter profits have fallen slightly on the prior year period after the company took a $33mn hit from severance charges to departing staff.

The loss-struck satellite insurance sector is facing another claim with the development of solar array problems on a Nigerian satellite, NIGCOMSAT-1, The Insurance Insider can reveal.

David Buchler, the ex-European chairman of Marsh & McLennan Co's (MMC) security consulting arm Kroll, is leading a move to buy the firm from its parent, according to reports.

Market softening contributed to a $50mn first quarter profit fall at RenaissanceRe Holdings Ltd, compared to the prior-year period.

Munich Re has continued its drive for distribution with the acquisition of US marine insurance underwriting agency and broker Roanoke Trade Services Inc for $52.5mn

Bermudian insurer Lancashire Holdings Ltd has trumped analysts’ expectations with first quarter pre-tax profits of $86.4mn, only marginally down on the $88.3mn it booked in the prior-year period.

Shares in Highway Insurance Holdings plc have dipped after the UK motor specialist offered a bleak update on the sector.

Florida’s state insurer Citizens Property Insurance Corporation is to buy reinsurance in the private market for the first time in its history.

Allianz Group's first quarter results are expected to be hit by a EUR0.9bn writedown at subsidiary Dresdner bank "due to the ongoing financial market crisis", the company has revealed.

The Insurance Services Office (ISO) has estimated that US property & casualty insurers will pay out an estimated $3.35bn in first quarter catastrophe claims in 2008.

Lloyd’s (re)insurer Advent Capital Holdings plc fell to a first quarter pre-tax loss of £5.5mn as it was hit by the succession of heavy industrial catastrophe losses this year, together with deterioration on the 2005-07 underwriting years.

Peter Harmer, CEO of Aon UK, is to become chairman of the London Market Reform Group (MRG), Lloyd’s has announced. Harmer succeeds Stephen Matanle, managing director of Libero Ventures Ltd who left global broker Marsh in February.

Hilb Rogal & Hobbs (HRH) said it has seen a “significant improvement” in the performance of its London market broker Glencairn.

Lloyd's (re)insurer Amlin plc has seen a 10 percent fall in gross written premium (GWP) for the first quarter of the year compared to the same 2007 period driven by renewal rate reductions, the company has announced.

Liberty Mutual Group is to acquire rival Safeco Corporation in a sale worth $6.2bn after the boards of both companies reached a sale agreement.

Insurance Australia Group (IAG) has rebuffed another approach from QBE Insurance after it extended its merger offer until 5 May.

Troubled Bermudian (re)insurer XL Capital Ltd reported a 49 percent drop in net income for the first quarter 2008 on the prior year period, at $276.9mn or $1.57 per ordinary share.

Independent UK broker Price Forbes & Partners is planning to launch in Bermuda in the second quarter of this year.

After 10 years at the company, Mike Sibthorpe, Brit Insurance CEO of global markets is to leave the firm, The Insurance Insider can reveal.

(Re)insurance broker Willis Group Holdings has announced the launch of a new tool which will allow clients to rate and compare carriers on standards such as claims settling and policy administration.

Munich Re warned its first quarter profits are likely to be down on last year’s, following “major losses” in the first three months of 2008.

Lloyd's has become the first admitted reinsurer in Brazil, following deregulation of the country's reinsurance market.

Lloyd’s insurer Omega has terminated talks with potential suitors interested in acquiring the company, the firm has announced.

Insurance Australia Group (IAG) has rejected two merger proposals by rival QBE Insurance Group claiming the offer price is "inadequate".

At current pricing levels, it would take a $30-50bn ground-up property loss to reverse the slide in property cat reinsurance rates, according to Aon Re Global.

The chairman and CEO of General Re Corp, Joseph Brandon has resigned.

Analysts have welcomed reports that Russia’s largest bank Sberbank is considering buying Allianz unit Dresdner Bank’s investment banking business.

Guy Carpenter & Co is preparing to cut around 13 percent of its global workforce, as the reinsurance intermediary responds to the tough market conditions, The Insurance Insider can reveal.

Royal & SunAlliance (R&SA) has continued the disposal of its legacy business with the sale of two run-off portfolios in its Scandinavian subsidiary Codan to Wasa Run-Off.

Berkshire Hathaway has bought one million shares in German giant Munich Re in the last six months, according to reports.

A slump in underwriting results in the US property/casualty insurance industry dented its profitability last year, according to Insurance Services Office (ISO).

The head of Lloyd’s China, Ian Faragher is to step down after two years in the role, The Insurance Insider can reveal.

American International Group (AIG) has renamed its Domestic Brokerage Group and appointed Kristian Moor as head, the insurance giant has announced.

Sagicor Financial Corporation (SFC) – which acquired Lloyd’s insurer Gerling at Lloyd’s and its Syndicate 1206 last September – has announced an increase in net income to over $100mn in 2007.

Japanese renewals unpredictable following losses; ACE to make Swiss move; Junipurus start-up builds underwriting team; Mapfre appliesfor Brazilian licence; S&P warns on Swiss Re’s missing business...

GLOBAL Reinsurance Co - the former reinsurance arm of Germany's Gerling Group which went into run-off in 2002 - is applying to the UK courts for approval for a scheme of arrangement in the UK.

Berkshire Hathaway Inc has taken on two of White Mountains Insurance Group Ltd’s run-off units as part of the $836mn that divests it of its stake in the insurer.

The recent surge in reinsurance-to-close (RITC) transactions is reflected in Lloyd's figures that reveal a dramatic fall in the number of run-off years of account at the end of 2007.

Our monthly column keeping a check on recent US and EU legislative and regulatory developments, in association with Sidley Austin LLP

Insurers owned by US giants American International Group (AIG), Chubb and CNA are facing a multi-million dollar bill for cleaning up the Fox River in Wisconsin after a jury ruled in a paper company's favour.

Marsh & McLennan Cos and Willis Group Holdings Ltd - two of the global brokers who axed contingent commissions in the aftermath of Eliot Spitzer's investigations into the industry - are complying...

Shares in Heritage Underwriting Agency plc surged to a record high at the beginning of the month after its board recommended a 154p a share cash offer from Argo Group International Holdings Ltd that is set...

A leading market figure is calling on Lloyd’s and the UK Government to tackle the Corporation’s complicated capital structure by further amending legislation governing the marketplace.

Insider Comment

The mining sector has hit a "watershed" following a spate of heavy losses accelerated by rising commodity prices that have decimated hard market profits.

Alea Group CFO and COO, Kirk Lusk, has resigned from the Bermudian-headquartered run-off company.

A US federal court has denied AJ Gallagher & Co's January request for a temporary restraining order against start-up broker Edgewood Partners Insurance Center (EPIC) following the defection of several senior employees.

Munich Re confirmed the launch in March of its second ILS transaction this year, following its extreme mortality cat bond Nathan Re in February.

The continued convergence of capital and insurance markets is one of the 'megatrends' facing the insurance industry, according to Joe Plumeri, chairman and CEO of Willis Group Holdings.

The successful launch of US insurer Chubb Group's latest $200mn cat bond, East Lane Re II, is a validation of indemnity triggers as a viable structure for cat bonds.

Momentum continues behind legislation to scale back the Florida Hurricane Catastrophe Fund (FHCF), after the state CFO-backed bill passed both the Senate’s Governmental Operations Committee and its Banking and Insurance Committee.

Embattled Security Capital Assurance Ltd (SCA) has fought back over its downgrade to junk status by Fitch Ratings, as analysts continue to warn over the knock-on impact on 46 percent owner XL Capital.

Lloyd's has sounded a warning over cycle management, with CEO Richard Ward demanding a "clear strategy" from the market to enable it to "maintain discipline and strength in the face of increasing competition".

As securities class actions against beleaguered investment bank Bear Stearns begin to mount, The Insurance Insider revealed that US insurer Chubb insures the first $15mn excess of $25mn layer of the bank's $75mn...