December 2007/6

AM Best has removed the ratings of General Insurance Corporation of India (GIC) from negative and revised them to stable.

Insurance linked securities (ILS) pioneer and prolific cat bond issuer Swiss Re has returned to the capital markets with the issue of a further $60mn of notes under its $1.5bn Successor Hurricane Industry shelf programme.

Lehman Brothers, the largest US underwriter of mortgage-backed bonds, faces legal action by Australian municipal governments after the value of its sub-prime related investments dropped by as much as 86 percent.

Despite the absence of so-called "megacatastrophes", a high number of loss events resulted in a 50 percent increase in economic losses from natural catastrophes to $75bn, with subsequent insured losses almost doubling to just under $30bn.

General Re has been ordered to produce records of its internal investigations in the criminal trial of four of its former executives that is due to begin in Connecticut on 7 January.

French mutual Groupama SA has completed its first insurance linked securities (ILS) transaction with its EUR200mn securitisation of French windstorm risk.

Major brokers Aon Corp and Willis Group Holdings have welcomed the seven-year extension of the Terrorism Risk Insurance Act (TRIA) that was signed into US law by President Bush on 26 December.

Ratings agency AM Best has upgraded the financial strength rating (FSR) of Argo Group subsidiary Peleus Reinsurance Ltd from A- (Excellent) to A (Excellent).

Specialist broker THB is still in talks with PWS holdings over the acquisition of PWS' Lloyd's business and overseas interests.

Financial guaranty and credit (re)insurer Assured Guaranty Ltd (AGL) has successfully raised net proceeds of $304mn on the sale of 12,483,960 shares in a public offering priced at $25.50 a share.

In a further twist of the sub-prime knife, ratings agency Fitch has placed the world’s second largest monoline bond insurer, Ambac Assurance Corp on Rating Watch Negative.

Shares in reinsurance broker Benfield Group are continuing to fall following another bearish note from analysts at Numis Securities.