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News digest

Charman: I will return next year

John Charman has vowed to return to the industry in 2013 after his acrimonious ousting from Axis - the Bermudian (re)insurer he built from scratch into a $6bn global specialty powerhouse.

Charman, in an exclusive interview with The Insurance Insider, said he has "clear and unequivocal" legal advice stating that there are no restrictions preventing his immediate return because Axis terminated his employment contract without due cause.

The Bermuda-headquartered (re)insurer suddenly removed Charman from his position as executive chairman while he was away from the company at a medical clinic in Switzerland. The decision cost the firm $36mn and was described by the former Lloyd's deputy chairman as an act of "betrayal".

"If they wanted to get rid of me, why did they unanimously make me chairman only a few months before?

"It was an act of betrayal driven by a few people, including one of those that had been my closest friend and business colleague over the past 10 years," he told The Insurance Insider.

Charman had stepped down as CEO to become executive chairman of the (re)insurer following the elevation of CFO Albert Benchimol earlier this year. But the new structure lasted only a few months before Michael Butt, Charman's right-hand man since the earliest days of Axis, returned to his role as chairman and with Charman removed from his position.

Butt commented: "We are confident that Albert and the team will continue to build the value of the Company for the long-term benefit of all stakeholders."

Charman declined to comment on what role his return might encompass, but a variety of sources close to the former Lloyd's underwriter pointed out the difficulties of gaining traction with a pure start-up in a world of ever more demanding regulation.

Charman set up Axis with $1.7bn of funding in 2001, in the aftermath of 9/11.

Groupama defaults

Embattled French mutual Groupama had its rating downgraded to BB- by Standard & Poor's after the firm announced on 5 October that it will not pay the next coupon on a EUR1bn subordinated debt issuance due on 22 October.

Covea flat

French insurer Covea renewed its 1 October property cat reinsurance programme flat on a risk-adjusted basis. According to underwriting sources, some layers priced up slightly while others fell modestly.

IPO II

Direct Line is set to join German (re)insurer Talanx as the second major P&C IPO in the space of a few weeks, with trading in the stock due to start in London on 11 October.

Liberalising India

The Indian government has approved amendments to the Insurance Laws Bill 2008 that will allow overseas entities to establish branches in the country.

Foreign (re)insurers currently participate in the Indian market through a combination of offshore writing and joint ventures, the ownership of which is capped at 26 percent.

Under the proposals, which still have to pass through India's upper house, the equity cap for joint ventures will rise to 49 percent.

ILS rate drop

Broker dealer Lane Financial estimated that average premiums in the insurance-linked securities (ILS) and industry loss warranty (ILW) market dropped 17 percent during Q3. Lane's synthetic rate-on-line index provides a proxy for ILS spreads by taking into account secondary market trading values from outstanding ILS and ILWs.

Catlin secures

Catlin has provided the capacity for Secure Legal Title's new programme offering legal indemnity and title insurance for major acquisitions in the UK and Europe.

Willis e-accounts

Zurich and Generali have both signed up with Willis as full electronic accounting partners in the London market. E-Accounts are one of the initiatives designed to reduce paper-based transactions and to improve accounting and settlement performance in the London market.

Goodbye to Atrium...

Atrium group finance director Andrew Baddeley has announced his resignation. He will leave the Lloyd's insurer in April 2013.

...And to Jubilee

Jon Clarke, the active underwriter of Jubilee's life insurance syndicate, has also resigned and will step down in March 2013.

He will remain at the syndicate as a consultant next year. He will be replaced by David O'Sullivan, current head of life at Jubilee, subject to regulatory approval.

Cage travels

Rob Cage has taken up his role as chief underwriting officer at Travelers Europe. The appointment follows his resignation from his previous post as head of Chubb's Lloyd's syndicate.

High stocks

After a third consecutive quarter of benign natural catastrophe losses, over a dozen P&C (re)insurance stocks have climbed to trade at their highest levels in the year to date as investors contemplate strong 2012 earnings and fresh capital returns.

As at 5 October, they included London

(re)insurers Beazley and Catlin and a host of Bermudians, including Argo, Arch, Aspen, Ace, Validus and XL Group.

US insurers Chubb and Allstate, along with (re)insurance broker Aon, were also at new highs earlier this month.

Gray sells

Beazley's head of property Jonathan Gray has sold 250,000 ordinary shares in the London-listed firm at 165.22p for a total of £413,000. He continues to hold around 1,009,549 of shares, equivalent to 0.19 percent of the issued share capital.

Blumer departs

Swiss Re's chief investment officer David Blumer will formally leave the company on 1 November.

Blumer joined Swiss Re in May 2008 as head of asset management and was also a member of Swiss Re's executive committee. In 2010, he became the chairman of Admin Re, the unit that acquires closed life insurance businesses.

Last month, the reinsurer completed the sale of its US arm of Admin Re to Jackson National for $600mn.

O'Halloran returns

Former QBE patriarch Frank O'Halloran has returned to the industry to head the Australian firm Steadfast Group as it prepared for a listing on the Australian Stock Exchange.

QBE released O'Halloran from its non-compete obligations to allow him to take up the position.

Steadfast is a broker network operation which channels almost 20 percent of its business with QBE.

Lloyd's bounce

Lloyd's syndicates earned an aggregate profit of £1.53bn for the first six months of 2012, the highest interim profit for five years.

The market's combined ratio was a lowly 88.7 percent, down from the cat-affected 113.3 percent in the first half 2011.

Texan holds 'em

Dallas-based Carlson Capital has bought out fellow US private equity firm Steel Partners' stake in its Lloyd's (re)insurer Barbican Group, giving the firm a 90 percent holding in the business.

Preferred Concepts expands

Stone Point Capital-backed program underwriter and wholesale broker Preferred Concepts has agreed a deal to buy specialist residential program administrator Metro Insurance Services.

The deal was announced ahead of the National Association of Professional Surplus Lines Offices annual convention in Atlanta in early October. Preferred Concepts was launched in 1989 as a program underwriter, and in January 2006 was the subject of an investment from Stone Point.

Amlin in, out

Simon Beale, Amlin's head of underwriting and Lloyd's Council member, has replaced his former colleague David Harris on the board of the Lloyd's Market Association, the trade body for insurers that operate at Lloyd's.

Harris - who left Amlin in the summer - resigned from the board last month.

JLT £17mn expansion

JLT has agreed to pay £17mn to acquire the employee benefits business Alexander Forbes Consultants, part of the South Africa-headquartered Alexander Forbes Group. The UK-based unit generated revenues of £28mn in the year to 31 March.

Eagle takes off

The Florida firm Insurance Office of America has launched a new US personal lines broker, Eagle American Insurance Agency, which will acquire agencies and business portfolios, predominantly along the Eastern seaboard.

Backed by Dowling & Partners' private equity arm Dowling Capital Partners, Eagle American has already announced the acquisition of two Florida firms, Keys Insurance Services and The Johnsons Insurance Agency.

HCC change

Former Willis Re executive Christopher Williams will replace John Molbeck as CEO of HCC earlier than expected when he takes the reins on 19 December.

The succession plan was first announced in April last year with a tentative target date of 31 May 2013. This will now be the date that Molbeck will retire, but HCC said he would remain actively involved with the firm until then.

AIG banks

AIG has restated its four-year, $4bn credit facility, which is led by JP Morgan Securities and Citigroup. The new facility replaces the $4.5bn arrangement entered into in October 2011, but includes greater letter of credit sub-limits. Thirty-four banks are involved in the facility.

Q3 dent

State Auto revealed a $20mn Q3 reserve charge relating to trucking programme business, together with a Q3 midpoint cat loss estimate of $7mn for the six PCS events in the period.

R&Q captivates

London-listed R&Q has completed the acquisition of RAB Insurance Ltd, its third purchase of an end-of-life captive insurer in 2012 so far. RAB is a Guernsey-domiciled captive insurer in run-off since 2011.

XL sues

Travelers filed a suit on 1 October against XL and former Travelers executives Richard DeSimone and Richard Salway for allegedly raiding its entire luxury yacht insurance business, including staff, trade secrets and confidential information.

In a Supreme Court of the State of New York filing, Travelers said it is seeking "substantial damages"

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