August 2008/1

The relationship between alternative capital markets and reinsurance is maturing, according to Guy Carpenter’s David Priebe, as insurance linked securities (ILS) cement themselves as an “integral part” of major cat buyers’ strategy.

Guy Carpenter is to target growth in its international facultative reinsurance business in the fall-out of the proposed acquisition of Benfield by Aon.

Reinsurance rates are declining in a “controlled glide rather than a crash landing”, according to rating agency AM Best.

The finite reinsurance deal used to inflate American International Group’s (AIG) loss reserves cost the giant $1bn, according to US prosecutors.

Hurricane Ike is on target to hit the south-east coast of the US from Miami to the Carolinas around 9 September either as a Category 3 or 4 storm, according to forecasters.

Industry veteran Bill Riker - who was due to become a director at Benfield Group Ltd - will not now join the reinsurance broker following its pending acquisition by Aon Corp.

John Charman, chief executive of Bermudian (re)insurer Axis Capital Holdings Ltd has revealed his firm is actively seeking acquisitions and that the industry has fellow Bermudian XL Capital in its sights as a potential takeover target, according to...

Shares in RSA were up by more than 4.5 percent in early trading today as German giant Allianz is linked with a possible takeover bid for the UK insurer.

Industry veterans Rod Fox and Jim Stanard's start-up reinsurance brokerage has formally launched under the new banner of TigerRisk Partners.

Hurricane Gustav has been downgraded to tropical storm status after skirting past New Orleans, with insured losses arising mainly from disruption to offshore oil and gas rigs.

RSA's UK chief executive Bridget McIntyre is stepping down, to be replaced by current chief operating officer Adrian Brown.

Gallagher UK is poised to buy the agency operations of London-headquartered Oxygen Holdings plc, The Insurance Insider can reveal.

Insider Publishing Ltd is delighted to announce the launch of Inside FAC, its latest title providing exclusive insight and analysis of the latest trends and developments in the growing global facultative marketplace.

Canadian (re)insurance conglomerate Fairfax Financial Holdings has declared its 165p a share cash offer for Lloyd’s (re)insurer Advent Capital Holdings Plc unconditional after securing a controlling interest in the company, as the Advent board reiterated

William Stovin has been appointed as president and COO of Markel Corporation's London subsidiary Markel International, replacing US-bound Gerry Albanese.

Swiss-domiciled reinsurer Paris Re Holdings Limited has announced improved results for the first half of 2008, with net income up by around a third to $150.6mn despite taking a $14.2mn hit from Windstorm Emma.

Lloyd's insurer Chaucer Holdings plc reported a slump in half-year profits as it was hit by the double whammy of heavy claims and difficult investment conditions.

UK insurer Liverpool Victoria Insurance Company Ltd (LV) has emerged as the bidder for UK motor insurer Highway Insurance Group plc.

Bermudian CastlePoint Reinsurance Company Ltd has agreed a $135mn deal to buy US excess and surplus (E&S) lines and admitted insurer Hermitage Insurance Group.

Highway Insurance Group plc has confirmed that it is in "advanced discussions with a third party" about a potential takeover after shares in the motor insurer surged this morning amid M&A speculation.

In common with many (re)insurers reporting half-year figures, Brit Insurance Holdings plc saw profits suffer as a result of unrealised losses on its investment portfolio, partly offset by reserve releases and a foreign exchange profit.

SCOR has reported a 24.3 percent rise in half-year net profits as last year's Converium acquisition continues to fuel the reinsurer's results.

Swiss Re is re-shuffling senior management in its beleaguered financial markets division, and putting its "non-core" businesses into run-off, The Insurance Insider can reveal.

AM Best has become the latest ratings agency to affirm XL Capital ratings and remove them from review after the Bermudian reinsurer closed a deal to end the majority of its exposure to former bond insurance arm Security Capital Assurance (SCA).

Paul Lumbis, the former managing director at Guy Carpenter & Co Ltd's M&A division at GC Securities Ltd is to head a new corporate finance advisory practice Atlas Partners LLP.

Allianz has a 10 percent share of the slip for the Spanair McDonnell Douglas MD-82 that crashed at Madrid airport on Wednesday, claiming 153 lives.

Aon Corporation is set to buy London-listed Benfield Group in a £844mn deal cementing the Chicago-headquartered firm's position as the world's largest reinsurance broker.

Lloyd's (re)insurer Amlin plc has reported a drop of over £40mn in its post-tax profits for the first six months of the year after reporting a slump in investment income.

Marsh & McLennan Companies Inc (MMC) has announced the appointment of Vanessa Wittman as the group's new CFO, who replaces outgoing executive officer Matthew Bartley.

Australian insurer QBE Insurance Group saw overall profits rise after strong performance from its insurance underwriting division during the first half of 2008.

Benfield Group Ltd has announced a management restructure at its specialist space insurance broker International Space Brokers Inc (ISB) following the resignation of former CEO Roger Bathurst.

The former CEO of Guy Carpenter, David Spiller, has been appointed chairman of Lloyd's insurer Heritage Managing Agency plc.

Randall & Quilter Investment Holdings plc (R&Q) and GLOBAL Reinsurance Company have formed a partnership for the purchase and management of non-life run-off companies in Europe.

Bermudian (re)insurer ACE Ltd leads the cover on the passenger plane that swerved off the runway in Madrid killing more than 150 people, The Insurance Insider understands.

As windstorm Fay prepares to make landfall in Florida again after initially crossing the Florida peninsula some analysts are predicting a stronger impact on its return.

Five former General Re and American International Group (AIG) executives found guilty for their part in a sham reinsurance transaction could face lengthy sentences, according to reports.

Senior producer Bill Farnan has resigned as executive vice president of Aon's US energy subsidiary to join Alesco Risk Management Solutions in a move that is likely to make the sector sit up and take notice of...

Run-off specialist Enstar has completed the acquisition of failed (re)insurer Goshawk Insurance Holdings plc after securing ownership or offer acceptances for 89.4 percent of its issued shares.

Alabama insurance commissioner Walter Bell is to join Swiss Re as chairman of its American division Swiss Re America Holding Corporation.

The head of Marsh's global industry practices, James Enelow, is to part company with the broker, The Insurance Insider can reveal.

Lloyd's insurer Hiscox Ltd has posted a rise in pre-tax profits with reserve releases, a solid investment performance and strong underwriting returns defying the gloom of the soft market and credit crunch.

RSA Insurance Group plc shares have closed the week up at 145p on the London Stock Exchange following fresh speculation over a possible imminent bid.

Benfield Group Ltd received a boost yesterday (13 August) after Merrill Lynch upgraded the stock to "buy" following its solid first-half year results.

Ratings agency Standard & Poor's (S&P) revised its outlook for the US commercial lines and property & casualty sector to negative yesterday on the back of continued price softening and declining investment returns.

Zurich Financial Services has announced net profits of $2.7bn and a combined ratio of 96.2 percent for the first half of the year, but only after making higher than expected reserve releases of $609mn.

Royal Bank of Scotland's up-for-sale insurance division said operating profits leapt from £258mn to £403mn at the half-year stage although revenues were down slightly on business distributed by brokers and partners.

Catlin Group Ltd's pre-tax profits fell by $40mn in the first half of 2008 in what one analyst has called a "mixed bag" of results for the Bermudian-headquartered (re)insurer.

Willis Group Holdings has announced two senior appointments as part of an overhaul of its reinsurance arm, Willis Re.

Hannover Re's operating profit was down 14.4 percent in the first half of 2008 to EUR400mn after being hit by a 24.1 percent fall in investment income in the period as the German reinsurance giant missed analyst targets.

Despite 30 percent growth in its marine, energy and power book, Benfield Corporate Risk continued to be a loss-maker for the reinsurance intermediary in the first half of 2008.

American International Group (AIG) shares are on course for their biggest single daily fall on record as investors reacted to the insurance giant’s announcement of a $5.36bn loss on heavy credit and investment writedowns.

A 23 percent rise in first-half post-tax profits for RSA Insurance Group plc could make it a potential merger & acquisition (M&A) target, says Keefe, Bruyette & Woods (KBW) analyst Grieg Paterson.

German insurer Allianz Group's net earnings fell 28 percent to EUR1.5bn in the second quarter of 2008, due mainly to a poor result in its banking arm, Dresdner Bank, which reported a EUR566mn operating loss for the period.

Marsh & McLennan Companies Inc (MMC) has confirmed that at least 2,000 jobs will be cut in 2008 after announcing a further 900 positions will be axed.

Shares in American International Group (AIG) are set to suffer in trading today after the US giant booked a higher than expected $5.36bn net loss driven by more than $12bn in credit and investment writedowns.

American International Group (AIG) has reported a $5.36bn net loss for the second quarter after taking a hit of more than $12bn in relation to further charges in its Financial Products Corp (AIGFP) division and investment writedowns.

Despite the “extremely competitive market conditions”, AXIS Capital’s founding chief executive John Charman said the firm’s strong second quarter was testament to its underwriting strengths and strategy of diversifying its business relationships.

The recent leadership changes at Marsh & McLennan Companies (MMC) and its insurance broking unit Marsh appear to be having an impact on performance, with increased revenues and operating profits in the second quarter.

Munich Re has confirmed its earnings warning in its first half results, with profits slashed to EUR1.4bn in the period, after the bottom line was hit by a slump in investment returns.

Standard & Poor’s (S&P) has removed its CreditWatch on XL Capital after the Bermudian successfully completed a deal to shed the lion’s share of its pre-IPO exposure to Security Capital Assurance (SCA) last night.

Shares in Lloyd's (re)insurer Advent Capital have climbed a further 4 percent today (5 August) after the company rejected an overture from its largest shareholder, Fairfax Financial Holdings.

Swiss Re is to pay £753mn for the life assurance arm of Barclays, the group has confirmed.

For the second quarter in a row, analysts were upbeat on Lancashire Holdings Ltd, despite the Bermudian insurer booking a fall in profits hit by the "unusually large" number of Q2 industry losses.

New York headquartered Tower Group is to buy CastlePoint Holdings, the Bermudian reinsurer it established in 2006 for $490mn.

Florida gives go-ahead for Berkshire Hathaway deal; Munich Re slumps on profits warning; Ex IAG boss gets A$1.9mn payoff; Underwriting refocus with Swiss Re shuffle; Max co-founder Doucette joins Everest; $4.7bn Philadelphia buyout for expansive Tokio

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

Randall & Quilter's appetite for acquisitions shows no sign of waning with the group's founding CEO Ken Randall eyeing "numerous opportunities".

An inevitable sign of the times is that insurers are seeing their revenues either flat or falling – a trend that featured heavily in AM Best’s table of top US property casualty writers.

As the softening insurance cycle continues to pervade the industry – putting pressure on commissions and increasing competition between brokers for clients – the battle for market share is as fierce as ever.

Despite both booking a 6 percent rise in total revenues for the second quarter, Aon was able to trump rival Willis on its reinsurance operations.

A second consecutive quarter of heavy catastrophe losses took its toll on early reporting US insurers as profits slipped at Allstate Corp, Travelers, Liberty Mutual, WR Berkley and Chubb.

US national carriers and Florida-only insurers created a surge in demand for Industry Loss Warranties (ILWs) last month, according to Jim Bryce, president and CEO of Bermudian cat specialist IPCRe.

Early reporting Lloyd's (re)insurers offered results hit by the year's heavy cat claims and difficult investment conditions.

Aspen Insurance Holdings warned of the danger to the (re)insurance industry from inflation – particularly in crop prices – as it booked Q2 net profits up 11 percent to $126.9mn, boosted by strong underwriting results and "solid returns" from investments.

In line with plans to refocus its business on its core (re)insurance operations, XL Capital also signalled a shift in its investment strategy, which has proved costly in the current credit and financial markets turmoil.

In the weeks leading up to XL's announcement of plans to cut loose from SCA, speculation had mounted over what rescue package new CEO McGavick would negotiate with regulators, and the potential role of third parties from within the (re)insurance industry.

Asked about the gathering storm of sub-prime last year, Henry Keeling described the crisis as presenting an "attractive opportunity" for the Bermudian (re)insurer.

Despite agreeing a deal with SCA and regulators to shed the majority of its $65.7bn pre-IPO notional exposures to the bond insurer, XL is still on the hook for potential liabilities under guarantees that were around $1.1bn in notional value at the end of

Trading in Carvill's reinsurance catastrophe derivative contracts is now over $60mn in nominal value as the US hurricane season is sizing up to be the most potent since 2005.

After keeping his counsel for most of his first three months at the helm of XL Capital, Michael McGavick was refreshingly candid in his assessment of the embattled (re)insurer as he addressed analysts at the start its Q2 earnings call.

American International Group's (AIG) new chief executive Rob Willumstad has given himself until Labor day (1 September) to demonstrate how he plans to restore the leviathan's fortunes.

Later this month, potential acquirers of a EUR100mn German run-off portfolio should receive information packs which will enable them to price their interest.

Xchanging has agreed a major outsourcing deal with Cooper Gay, first revealed by The Insurance Insider, which will see 66 of the broker's legacy and ongoing business process staff transfer to the firm.

The scramble for an EC3 platform is continuing apace with the acquisition of Imagine Group's Lloyd's operations and a takeover bid for the AIM quoted (re)insurer, Advent Capital Holdings.

New CEO Michael McGavick was quick to acknowledge the influence of rating agency pressure on XL Capital's attempts to secure a solution to relieve it of its SCA exposures, and the size of its capital raise.

First-time cat bond sponsor Platinum Underwriters Bermuda Ltd issued a $200mn multi peril cat bond in August, affording it cover against US wind and quake, European windstorm and Japanese earthquake.

In contrast to the familiar pattern of capital-strong Bermudians boosting figures in the soft market with reserve releases, White Mountains Insurance Group took a $51mn Q2 hit as a result of adverse development in its reinsurance business.

Settlement talks between the New York attorney general's office and Maurice "Hank" Greenberg have postponed a deposition involving the former American International Group (AIG) CEO until after 1 September.

Shares in Jardine Lloyd Thompson Group plc (JLT) fell around 2 percent to 404.5p despite the firm booking a 9 percent increase in revenues and trading profits in its half-year results.

Like its larger rivals Aon and Willis, Arthur J Gallagher & Co was able to report a rise in total brokerage and risk management revenue of 6 percent, but the Chicago-based firm missed Wall Street estimates in its Q2 figures as the soft market hit results.

The head of specialist reinsurance broker RK Carvill & Co Ltd's New York office has left the company, The Insurance Insider can reveal.

Mangrove Bay has become the first major contingent capital facility issued by a non-life (re)insurer to be called upon after the Bermudian (re)insurer confirmed last month that it would be exercised.

Hiscox Bermuda CEO and chief underwriting officer Robert Childs is to return to London and be replaced by Imagine Group Holdings Ltd's head of underwriting, Robert Forness.

"Every little helps" is Tesco's advertising catchphrase but it might also have been coined for Royal Bank of Scotland’s increasingly desperate need to sell-off assets to plug its £6bn+ exposures to the credit crisis and raise its crucial tier 1 capital re

Marsh is set to undertake a significant shake-up later this year with the new management duo of Brian Duperreault and Dan Glaser poised to unveil sweeping changes at the global broking giant, The Insurance Insider understands.

Travelers has placed $1.4bn of run-off liabilities that sit in a UK subsidiary up for sale as it hopes to capitalise on the strong interest in acquiring discontinued business.

Florida is made up of 67 separate counties while Texas - where everything has to be big - consists of 254 individual counties.

The scheme of arrangement on the four EW Payne Pools was finally approved in the UK High Court last month.

A dispute between RSA plc and BAE Systems over a multi-million dollar reinsurance claim on a policy structured to cover revenue shortfalls on aircraft leased for regional routes is to be heard by the courts at the end of September.

Two former directors of failed Lloyd's insurer Euclidian Underwriting Ltd have been fined, ordered to pay costs and agreed not to transact business at or set foot in Lloyd's without prior permission after being found to have failed to deal "in a transpare

Lloyd's insurer Jubilee Managing Agency Ltd is continuing its expansion strategy with the appointment of property underwriter Martin Pope and a team from Travelers, The Insurance Insider understands.

Aon recruits Benfield marine duo; Marketform expands into new lines; Xchanging continues $250mn M&A talks; UK Islamic insurer launched; Marsh UK parts company with senior exec; Coverzones boosts funding as carrier invests; RSA settles GM dispute; Amlin

Willis's London market broker Glencairn, acquired as part of the $2.1bn Hilb Rogal & Hobbs (HRH) takeover, will be re-branded and allowed to function as a stand-alone wholesaler, The Insurance Insider has learnt.

RK Carvill & Co Ltd has confirmed it is in "exploratory talks" to sell a stake to insurance focussed private equity firm, Stone Point Capital.

American International Group (AIG) has been stung by the first wave of high profile departures at Ascot Underwriting, the Lloyd's managing agency it bought out last month.