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

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 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).

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.

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.

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

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.

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.

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.

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.

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.

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

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.

(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.

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

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.

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.

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

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

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.

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.

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

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

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

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.

Insider Comment

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.

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...

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".

March discussion paper also raises again the prospect of mandatory disclosure

Creditors of OIC Run-Off Ltd (OIC) and The London and Overseas Insurance Company Ltd (L&O) will receive an increased payout of 48 percent, the joint scheme administrator has announced.

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...

Tawa plc closed its acquisition of PXRE Reinsurance Company in a deal which saw a surprise $14.4mn investment from a trust owned by billionaire steel magnate Lakshmi Mittal family members.

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

Insurers are not liable for covering any part of an $80mn settlement made by troubled investment bank Bear Stearns over its stock research practices, the New York Court of Appeals has ruled.

US reinsurer General Re is to pay the US government the $5mn fee it received for a sham finite reinsurance contract with American International Group, according to reports.

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.

Prior-year reserve releases and healthy unearned premium balances were a dominant theme of the reporting season for Lloyd's-listed vehicles.

A total of 259 sub-prime related lawsuits, alleging a variety of misdemeanours, have now been brought against firms in the US to date and have the potential to cause substantial claims against global insurers.

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.

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.

French bank Société Générale has vowed to mount a "vigorous defence" against a class action lawsuit accusing it of misleading investors and failing to clamp down on the EUR4.9bn "rogue trader" fraud.

Second worst ever quarter for single risk losses; but impact on rate pressures remains minimal

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

Latest sat loss adds upward rate pressure;

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.

US giant American International Group (AIG) has confirmed a $13.5mn settlement payout with the Pennsylvania Insurance Department.

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...

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

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.

Aspen Insurance Holdings Ltd became the latest Bermudian to establish a Lloyd’s presence with the launch of start-up Syndicate 4711.

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.

But negotiations complicated by formula flaw that may benefit Ascot execs

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

Markel International and QBE Limit will have to wait until at least the end of May for a verdict in their UK High Court showdown with broker Surety Guarantee Consultants Ltd...

In the second part of our special report on broker commissions and transparency, we turn our attention to UK insurers...

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...

Insurance intermediary Towergate has been forced to put its £1bn refinancing plans on ice.

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

Despite reports that run-off unit Minster is up for sale, JP Morgan is unlikely to dispose of the portfolio if its acquisition of Bear Stearns goes ahead, according to an advisor close to the deal.

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.

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.