(Re)insurers are not banks, says Geneva Association
Ahead of the G20 meeting earlier in the month, the heads of the world’s (re)insurance industry called on global political leaders not to punish the sector as it attempts to apply the lessons from the global financial crisis.
In a six-point letter signed by the Geneva Association president and Munich Re chairman Nikolaus von Bomhard, dated 5 November, (re)insurers asked politicians to recognise that the positive economic benefits of the sector should be taken into account when redrawing the global supervisory rulebook in the wake of the financial debacle of the last 18 months.
Describing the sector as a “stabiliser for the global economy” the association called for recognition of the specificities of (re)insurance when new supervisory architecture is being drawn up. The international grouping also appealed against any unnecessary imposition of “overly prudent capital requirements” on a sector that “had weathered the global financial crisis relatively well” and was fundamentally different from the tarnished banking industry.
Axa on M&A trail with EUR2bn rights issue
Axa unveiled a EUR2bn rights issue it said it will use “to seize future acquisition opportunities, primarily in high growth markets”. The French giant said the move will allow it to maintain a strong balance sheet while funding a proposed buyout of Australian financial services partner AMP’s Asian holdings in the two firms’ Axa Asia Pacific Holdings life unit. It also cited potential deals to acquire other minority interests in Central and Eastern Europe.
Hedge fund takes Glacier reins
Founding shareholder HBK Capital Management has provided up-for-sale Glacier Group with a new CEO after the departure of Robbie Klaus. Todd Hart was HBK’s representative on the Swiss reinsurer’s board, in his role as head of the Texan hedge fund’s insurance group.
Klaus had been CEO since the company was launched in 2004 with $300mn of equity capital, backed by HBK, Soros Fund Management and Benfield.
IPC gains boost Validus and Max profits
The IPC Holdings bid saga aided the third quarter financials of both the successful suitor Validus and the jilted party Max Capital. A bumper $302.9mn gain booked on the acquisition helped Validus Holdings report a $499.2mn net profit for the third quarter, compared to a $126.3mn net loss in the prior-year period.
And the $50mn termination fee Max Capital received after failing to win over IPC shareholders resulted in a net gain of $41.4mn, once $8.6mn of expenses were deducted. This helped the Bermudian to a Q3 net profit of $95.3mn, compared to a prior-period $163.2mn net loss.
WR Berkley confirms successor
US insurer WR Berkley elected William Berkley Jnr (Robert) to its board as president and COO, paving the way for an eventual move into his father’s chief executive role.
Speaking to The Insurance Insider, founding chairman and chief executive William Berkley confirmed: “Give or take five years, Robert will likely become chief executive and I will become chairman.”
Frank Crystal eliminates president role
The long-serving president and COO of US-based independent retail insurance brokerage Frank Crystal & Company has left the firm, The Insurance Insider revealed.
Mark Freitas left the New York-based outfit following a 30 October management reshuffle that eliminated the roles of president and COO and established a new executive committee to manage day-to-day operations and long-term strategy. Led by chairman and CEO James Crystal, the committee includes executives from the firm’s key business areas.
Barnard docks at Harbor Point
Bermudian Harbor Point has lured international treaty underwriter Andrew Barnard from the reinsurance arm of compatriot White Mountains. It comes after White Mountains unveiled a reorganisation of its Bermuda reinsurance unit in July.
Markel president takes leave of absence
Markel’s group president and COO Paul Springman has taken an unexplained leave of absence for “personal reasons”. Springman was promoted to the role of president at the specialty reinsurer last year when Tony Markel took a back seat from running the day-to-day operations.
His responsibilities will be assumed by other members of the senior management team during his absence, said the company.
Gallagher to cut 400 jobs
US-headquartered insurance broker AJ Gallagher has revealed plans to shed 400 jobs – approximately 4 percent of its 10,000-strong global workforce – as part of a cost saving exercise. Unveiling Q3 results that saw organic revenue down 5.5 percent, the broker said the cuts would fall on its existing middle and back office workforce through a combination of job elimination and attrition, to produce annual savings of approximately $25 to $28mn.
Kingsway losses widen
Troubled Canadian truck and auto insurer Kingsway Financial Services booked a $118.1mn Q3 net loss, against a loss of $17.4mn at Q3 2008, after seeing $128.8mn in losses from discontinued business .
However, Kingsway heralded the quarter as a “turning point”, after it donated its interest in the discontinued Lincoln General unit – which contributed $95.5mn to the quarter’s loss – to charity last month, removing the company from its ongoing operations. The move is part of efforts to cut annualised costs by $80mn, Kingsway said.