December 2012/4

Endurance Specialty became the latest Bermudian to disclose an initial Sandy loss estimate as it said the storm will have a pre-tax impact of $160mn net of reinsurance and reinstatement premium.

Lloyd's exclusive £1bn+ capacity club will grow by 50 percent in 2013 as Beazley 623 and Liberty secured capacity increases that make them eligible for entry.

IAG's A$4bn+ cat treaty renewal has paid an increase to underwriters to reflect the deterioration in its New Zealand quake loss numbers for the year, but a number of major accounts have priced down.

With US property catastrophe renewals proceeding relatively straightforwardly and loss-free business renewing roughly flat, attention is shifting towards a marine market caught in deadlock post-Sandy.

The proposed takeover of Alterra Capital by US insurer Markel has again highlighted that companies valued at a discount to their net assets are ripe for a take-out.

The acquisition of Bermudian (re)insurer Alterra will allow Markel to expand into reinsurance and give the firm a more diverse product and geographic underwriting portfolio, executives of the two companies have explained.

Through its proposed acquisition of Alterra, Markel is aiming to create a bigger, more diversified carrier whose profitability is made greater than its constituent parts by synergies, increased cat appetite and an overhaul of the Bermudian company's investment portfolio.

With Alterra's board agreeing to sell the company for just below book value without any evidence of a formal sales process, the question of a competitor bid is naturally being raised.

Markel has decided against moving its domicile to Bermuda as part of its deal with Alterra, stating that it is "almost impossible" to structure the deal in such a way and retain the tax benefit.

Most of the ratings agencies have reacted positively to Alterra's proposed acquisition by Markel, with Moody's the only one of the four major agencies to put the companies on negative outlook.  

The sell-off that decimated Markel's stock trading premium after the US specialty insurer's proposed takeover of Alterra was announced appears a strong indication of investor displeasure.  

Global broker Willis has announced it will take circa $750mn of non-cash impairment charges in its fourth quarter accounts for HRH-related goodwill write-downs and a change in its treatment of retention bonuses.