August 2006/4

Wellington Underwriting Inc, the US platform of Lloyd’s insurer Wellington Underwriting plc, announced today (29 August) that it is expanding with the launch of a marine reinsurance arm.

Concord Re, the latest sidecar to roll off the industry’s production line, means almost $4bn of capital has been raised for these non-life reinsurance vehicles in the aftermath of Hurricane Katrina.

The blanket ban on contingent commissions or Placement Service Agreements (PSAs) imposed by New York attorney general Eliot Spitzer following his 2004-2005 investigations into the major US brokers have been moderated.

Zurich American Insurance has settled a business interruption claim, stemming from the 2001 World Trade Centre loss, for $80mn with ABM Industries.

Insurance giant Zurich Financial Services (ZFS) last Thursday (17 August) 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.

Lloyd’s insurers Hiscox plc and Omega Underwriting Holdings plc have announced unchanged mid-point profit forecasts for the 2004 and 2005 underwriting years.

Shipowners will face rate rises of up to 10 percent on protection & indemnity (P&I) premiums at the 2007 renewals as the marine industry feels the effect of a raft of social and regulatory legislation, according to a report from Aon.

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.

Fitch Ratings has affirmed Lloyd's Financial Strength (IFS) rating of A (excellent) with an Issuer Default Rating (IDR) of A-. Both ratings have been assigned a stable outlook.

Embattled life reinsurer Scottish Re Group and its subsidiaries suffered further downgrades from rating agency Standard & Poor’s (S&P) last week.

The UK Competition Commission has published a Statement of Issues for its inquiry into Lloyd’s members agency Hampden Private Capital’s acquisition of its rival CBS Private Capital’s advisory business.

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