December 2007/2

Recently listed UK run-off firm Randall & Quilter Investment Holdings (R&Q) has received approval to establish a Bermudian reinsurer, R&Q Re (Bermuda) Ltd, The Insurance Insider can reveal.

Run-off (re)insurer Alea Group Holdings has reached agreement to “fully and finally” commute all exposure under an excess-of-loss reinsurance treaty.

BMS, the independent London market broker, has confirmed the resignation of its chief executive, John Spencer.

Capita Group plc has won the £200mn contract to run Marsh UK’s back office in a deal which will see 650 of the broker’s staff move to the outsourcing firm.

Derivatives platform Insurance Futures Exchange Services (IFEX) which began trading in US catastrophe risks as futures contracts in September, now has cumulative trading volumes totalling more than $31mn...

Bermudian corporate asbestos liability risk reinsurer St George Re is set to begin trading offering US companies protection against asbestos claims, the company confirmed today (9 January).

US insurer CV Starr & Co Inc has launched a Lloyd’s energy syndicate with £30mn 2008 capacity in partnership with private equity firm First Reserve Corporation.

Bermudian reinsurer White Mountains Re has cancelled its quota share arrangement with Helicon Re and Olympus Re for the 2008 year as a result of the softening property cat market.

The proposed insurance company focusing on energy and commercial property lines and backed by ex-Aon Natural Resources London chairman Tim Fillingham and former Navigators UK and Europe CEO David Hope will be called Torus, The Insurance Insider can reveal

Leading insurance linked securities (ILS) issuer Swiss Re has once again returned to the capital markets with a $496mn continuation of the Redwood series of cat bonds, issued on behalf of the California Earthquake Authority (CEA).

Another equity analyst piled the pressure on reinsurance intermediary Benfield Group’s share price by lowering its forecasts and reiterating a SELL recommendation on the company’s stock.

Bermudian insurer Ironshore Inc has continued to grow its US platform with the acquisition of an excess and surplus lines shell from TIG Insurance Company, a Fairfax Financial Holdings Ltd subsidiary in run-off.

US insurer HCC Insurance Holdings Inc has announced the acquisition of Indiana-based MultiNational Underwriters (MNU) and the establishment of a new $24mn capacity Lloyd’s syndicate.

Troubled broking giant Marsh Inc has been hit by the sudden resignation of its key executive Phil Moyles, The Insurance Insider can reveal.

Marsh Inc is set for a second management reshuffle in a matter of months as The Insurance Insider can reveal the chief operating officer of its US operations, Mark Feuer, is also leaving the firm.

The continuing trend for softening in the reinsurance market has seen property catastrophe rates drop by around 9 percent at the 1 January renewals, according to reinsurance broker Guy Carpenter & Co.

Michael Cherkasky, the president and chief executive of Marsh & McLennan Companies Inc (MMC), has been axed by the firm following continuing criticisms of the group’s performance.

Lloyd’s is planning to enter the Brazilian reinsurance market as an admitted carrier following the country’s approval of plans to scrap its collateral requirements for higher rated reinsurers.

The sub-prime woes of Bermudian (re)insurer XL Capital Ltd continue to deepen as ratings agency Moody’s Investors Service placed the firm’s ratings on review for possible downgrade.

Bermudian giant ACE Ltd has sought to reassure investors over the potential exposure of its investment portfolio to the sub-prime fallout.

Bermuda’s Progressive Labour Party (PLP) has emerged victorious in the island nation’s general election.

Jardine Lloyd Thompson Group plc (JLT) has hired James Gerry to head up Thistle Underwriters Ltd (TUL), a new operation launched by the UK-listed broker.

The UK’s restrictive tax regime as well as proximity to the US market are key reasons for Lloyd’s (re)insurer Hardy Underwriting Group’s decision to redomicile to Bermuda, the company has explained.

Aon Corp is selling its US property and casualty arm Combined Insurance Co to ACE Ltd for $2.4bn and has committed to returning all the proceeds to its shareholders.

US insurance group American Finance Group Inc (AFG) has bought a majority interest in Lloyd's insurer Marketform Group Ltd, The Insurance Insider can reveal.

Catlin Group Ltd’s Bermudian operating subsidiary is poised to launch a new cat bond believed to be providing $225mn of US wind and quake cover for the firm.

Arthur J Gallagher & Co (AJG) has acquired a 38.5 percent interest in Jamaican-headquartered intermediary CGM Group (CGM) as part of the US-firm's strategic growth in the region, The Insurance Insider has learnt.

The board of Kiln plc has recommended a 150p per share cash offer for the Lloyd's insurer by Tokio Marine & Nichido Fire Insurance Co (TMNF), as predicted by The Insurance Insider.

Shares in Kiln plc surged a further 13.18 percent this morning after the Lloyd’s insurer announced it would recommend a £442.2mn offer from Japan’s Tokio Marine & Nichido Fire Insurance Co (TMNF).

Standard & Poor’s (S&P) has upgraded ratings on Renaissance Reinsurance Ltd from A+ to AA- as it acknowledged uncertainty that had surrounded the company’s parent over the departure of senior management in 2005 has lifted.

The Financial Services Authority (FSA) has banned four executives from operating in the market over their "dishonest involvement" in the Sphere Drake managing general agent (MGA) debacle of the late 1990s.

Ratings agency Fitch has placed monoline bond insurer Security Capital Assurance (SCA) on review for possible downgrade in a move that will continue to increase pressure on its 46 percent owner XL Capital.

Bond investors on Zurich Financial Services' (ZFS) loss-stricken Kamp Re 2005 will pay out $29.7mn in losses from the principal amount of the notes on 14 December.

Paris Re Holdings Ltd has become the latest reinsurer to announce capital management initiatives including the approval of a share buy-back programme and plans to distribute $400mn of capital by reducing the nominal value of shares, funded by a propose

Tokio Marine & Nichido Fire Insurance Co has emerged as a possible bidder for Kiln plc amid feverish speculation after the Lloyd’s insurer revealed yesterday it was in talks with an unnamed party over a possible takeover.

Shares in Lloyd’s insurer Kiln Ltd have jumped by 13.5 percent today as the company has emerged as a takeover target.

AM Best has bolstered its London operations with the hiring of Lloyd’s head of capital and broker relationships, Nick Charteris-Black.

Standard & Poor's (S&P) has upgraded the financial strength ratings on the main subsidiaries of The Royal & SunAlliance Group (R&SA) from A- to A.

Listed Bermudian-headquartered legacy firm Enstar Group has acquired AMP Ltd’s Australian-based closed (re)insurance operations for A$585mn ($518mn).

The joint venture platform established by the world's largest interdealer-broker ICAP plc and insurance broker JLT Group plc has brokered its first catastrophe swap trade, for 2008 North American windstorm.

The UK Financial Services Authority (FSA) is to further investigate inefficiencies in the commercial general insurance market before deciding on whether to mandate commission disclosure.

Shares in reinsurance broker Benfield Group have fallen almost 8 percent to 280p in early trading today (10 December) after it made a profit warning this morning.

UK run-off firm Randall & Quilter Investment Holdings (R&Q) is looking to raise around £20mn when it lists on the London Stock Exchange’s Alternative Investment Market (AIM) later this month.

Cevian Capital, the activist investment fund backed by Carl Icahn, has taken a 3 percent stake in Munich Re.

Bermudian insurer Aspen Insurance Ltd (AIL) has had its financial strength rating upgraded to A (Excellent) from A- (Excellent) by AM Best.

Closing prices for 2008 US cat windstorm losses leapt nearly six percent yesterday on the derivatives platform Insurance Futures Exchange Services (IFEX) signalling that traders think there is a greater chance of a major windstorm loss next year.

UK run-off firm Randall & Quilter Investment Holdings (R&Q) is poised to float on the London Stock Exchange’s Alternative Investment Market (AIM), The Insurance Insider can reveal.

Capacity moderately down as start-ups offset de-emptions

American International Group (AIG) executives including CEO Martin Sullivan and CFO Steven Bensinger have been named in a suit filed by shareholders over the firm’s handling of its exposure to the sub-prime crisis.

Swiss Re's shares lost 20 percent of their value in just four weeks following the firm’s shock SFr1.2bn ($1.1bn) mark-to-market loss from credit default swap exposures.

Stocks in the insurance sector continued to suffer in the last month, with investors apparently not heeding assurances from a number of London market companies over exposure to investment and underwriting losses related to the sub-prime fallout.

Credit default swap (CDS) spreads for European insurance companies have again leapt, reflecting renewed sub-prime fears over insurance security.

Analysts and commentators are becoming more confident in offering predictions on the estimated level of sub-prime related losses in financial markets and (re)insurance markets alike, with most agreeing that the worst news has yet to emerge.

US prosecutors have named Berkshire Hathaway chairman Warren Buffett as a witness in the criminal trial of former General Re and American International Group (AIG) executives.

Loss-hit cat bond Kamp Re 2005 is in "uncharted waters" following the move by the bond’s administrators to extend the original maturity date, according to Zurich Financial Services...

Tawa plc, the UK quoted run-off consolidator controlled by French billionaire Francois Pinault, has launched Tawa Consulting Ltd, which will take on consulting and advisory operations.

The dusty arguments over the UK’s ability to wind up solvent (re)insurance companies through a process called schemes of arrangement were given a fresh airing last month at the Mealey's Global Reinsurance Forum in Bermuda.

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

Ratings agency Standard & Poor's (S&P) lowered its counterparty credit ratings on global financial services firm Marsh & McLennan Cos (MMC) to BBB- from BBB, with a stable outlook.

The industry will continue to securitise (re)insurance risk despite the continuing prospect of falling rates.

French (re)insurers Groupama SA and SCOR SA have both issued Euro denominated cat bonds.

With year end fast approaching, sidecar participants are beginning to take action on the renewal of the remaining capacity due to expire in the next few weeks.

UK broking consolidator, Towergate Partnership agreed a £95mn cash offer for Yorkshire-based Broker Network Group last month, valuing the firm at almost four times revenues.

The founder and chairman of struggling Primary General, Jonathan Davey, has left the company, which looks set to restructure further.

AIM listed Heritage rejects approach; Ironshore remains interested

The proposed Scheme of Arrangement for Sphere Drake, part of the WFUM pool, was sanctioned in the UK High Court on 6 November.

In a special three-page report, The Insurance Insider has a comprehensive analysis of the various initiatives being deployed by brokers to raise revenues in the soft market

The Insurance Insider believes Marsh has made an excellent capture with its new chief executive, Dan Glaser

Erik Manning has left ABN Amro's insurance and weather derivatives group to join rival Deutsche Bank...

The Bermudian insurance group Ironshore Inc has confirmed it has made an approach for the Lloyd’s insurer Heritage Underwriting Agency, as revealed by The Insurance Insider today.

AIG leads Turkish crash cover; Earthquake triggered Caribbean cat fund; Ping An takes Fortis stake; Aon raids Willis for construction executives...

Takeover speculation has again gripped reinsurance broker Benfield Group with Aon Corp the latest to be linked with the firm.

In addition to recent brokerage increases by its UK and European operations, Marsh is in discussions with carriers to introduce "enhanced commissions" in its US middle market and small commercial business.

Members of a personal accident (PA) team dismissed by Imagine Group's Danish Re after handing in their notice are suing the reinsurer for unfair dismissal.

Ironshore Inc's approach for Lloyd's insurer Heritage Underwriting Agency will renew the interest of other Bermudian firms looking to buy their way into Lime Street, according to Numis Securities analyst Nick Johnson.

Additional commissions are only one of a number of new initiatives being imposed by brokers as they seek to protect their revenues in the current soft market conditions.

Gallagher 'not thrilled' with reinsurance results; Newly formed AIG UK appoints board heavyweights; Hardy outlines Bermuda redomiciliation plan; Levene says tax break still on...

Aon Corp has hired an outside law firm to investigate its compliance with anti-bribery laws, the company revealed in a Securities and Exchange Commission (SEC) filing last month.

It may still be unlikely, but there is always the potential of the nightmare scenario envisaged more than 20 years ago by industry legends Robert Clements and Robert Newhouse when they set up...

Barbican Syndicate 1955 became the latest Lloyd's start-up welcomed into the fold in November, the eighth new venture approved this year combining to bring in excess of £650mn fresh capacity to the market for 2008.

Philip Grant, chairman of The Association of Run-Off Companies (ARC), is behind a new run-off service provider in London.

A recent UK High Court decision has outlined the dangers to reinsureds of making misrepresentations to their reinsurers either directly or through a broker.

Marsh UK is mulling a major overhaul of its embedded legacy burden with the outsourcing of its entire back office, The Insurance Insider can reveal.

Reinsurers have been ordered to settle a $57mn disputed all risks reinsurance claim with global mining giant Anglo American's captive insurance company Coromin.

The world's largest interbroker-dealer ICAP plc and insurance broker JLT Group plc have launched their joint venture to establish an insurance based derivatives and securities broking platform, subject to FSA approval.