August 2006/3

South African-headquartered broker Alexander Forbes Ltd has reached an £86mn deal with US broker Lockton Companies Inc and private equity firm Stone Point Capital LLC to sell Alexander Forbes Risk Services Holdings, the holding company of its London-based

Swiss giant Zurich Financial Services (ZFS) this morning reported half-year net profits of $1.96bn, up 9 percent on the first six months of 2005, and ahead of analysts’ consensus of $1.8bn.

Randall & Quilter Group Investment Holdings Ltd, the UK based acquirer of run-off businesses, has acquired Chevanstell Ltd, The Insurance Insider can reveal.

Australian-headquartered (re)insurer QBE Insurance Group announced today (16 August) that its after-tax operating profits were up 20 percent to Aus$591mn for the first half of 2006.

Sports underwriter Sportscover today (15 August) announced that it is launching a new Lloyd’s syndicate specialising in covering amateur sports.

Swiss-based reinsurer Glacier Re has responded to rating agency concerns following last year’s hurricanes by further bolstering its capital base with a $30mn cash injection from existing shareholders.

Lloyd's Names will be able to give their views on Hampden Private Capital's acquisition of the Names' advisory business of CBS Private Capital after receiving a questionnaire from the Competition Commission last Friday (11 August).

At a time of perhaps unprecedented capacity shortages for Gulf of Mexico energy risks, Willis Group has formed a global energy business designed to deliver a “deep understanding of its clients’ technical and operational needs”.

Newly floated Bermudian (re)insurer Allied World Assurance Company Ltd (AWAC) reported an increase in net income from $71.5mn in the second quarter of 2005 to $102.4mn in its first accounting period as a public company.

Martin Sullivan, the president and CEO of US giant American International Group (AIG) said the group saw no insurance impact from the terror plot exposed by UK authorities last week.

German reinsurer Hannover Re says it is on target to reach its annual return on equity target of 15 percent, despite producing a relatively modest increase in group net income of 4.2 percent for the first half of the year.

If Converium can sell-off its discontinued US arm, Converium North America, then it is likely to spark an upgrade by Standard & Poor's back to the longed-for A territory.

UK insurer Royal & Sun Alliance (R&SA) last week (10 August) reported interim after-tax profits up 22 percent to £238mn on the first six months of 2005, driven by a strong showing in its so-called core group of business.

Lloyd's has ruled out creating a fully-fledged US insurance company - an idea that was floated as part of the three-year strategic plan delivered in January.

No capital differential for 2007, but performance framework on track As well as ruling out the formation of an admitted lines US insurer – at least for now – Lloyd's last week (10 August) provided a comprehensive progress report on the initiatives...

Fast expanding Lloyd's (re)insurer Ascot Underwriting is considering setting up an overseas operation to ease the penetration of its products into new markets.

The decision by Aon Ltd to outsource its entire back office Client Operations division could provide the framework for a new approach by London market brokers to process their business.

The proposed manager of the WFUM Pools Scheme of Arrangement, PRO Insurance Solutions, has issued scheme documentation and announced that the creditor voting meetings will take place on 27 October 2006.

Fairfax Financial Holdings' controlled reinsurer Odyssey Re said last week that it would delay filing its quarterly financial report while it continues to review its accounting treatment of various investments.

Beleaguered Bermudian reinsurer PXRE Group admitted it was heading towards run-off after announcing on 8 August that its net income had slipped to $2.1mn for the second quarter.

Zurich Financial Services announced last week that Mike Foley, the head of McKinsey's US P&C insurance practice, will become the chief operating officer for its North American Commercial unit.

Bermudian powerhouse AXIS Capital reported record second quarter net income of $223.4mn, or $1.37 a share, up 29 percent on the prior-year period on the back of increased investment income on 7 August.

Distressed insurance company Quanta Capital Holdings Ltd revealed a $42.9mn loss for the second quarter and said it was talking to its bankers after defaulting on its credit facility following the rating downgrades earlier this year.

Four subsidiaries of CV Starr & Co, the managing agency ultimately controlled by former American International Group (AIG) chief executive Maurice "Hank" Greenberg, are suing three AIG employees for attempting to "systematically destroy" their business.

Mark Boucher is to step down as CEO of Endurance Worldwide Insurance Ltd (EWIL), the London market operation of Bermudian (re)insurer Endurance Specialty Holdings Ltd, with effect from January 2007 it was revealed last week (9 August).

Lloyd's insurer Canopius and Neil Utley's Equity Insurance Group (EIG) are to support a new UK commercial lines underwriting operation to be led by former NIG Commercial Lines (NIG) managing director Charles Earle.

Capita Insurance Services, part of the UK outsourcing giant, Capita Group plc, announced on 10 August that it had secured a deal to process claims for Chaucer Syndicates.

Willis Group has confirmed that it has recruited a team of Jardine Lloyd Thompson's (JLT) Financial and Professional lines brokers led by Julian Martin, the recent leader of JLT's UK D&O team.