December 2012/4

Weekly share price movements and key data on The Insurance Insider's universe of P&C (re)insurers and brokers

The European Insurance and Occupational Pensions Authority (Eiopa) has released its first legal opinion on "Solvency 1.5", which briefly outlines its proposal to get certain elements of Solvency II in place by 1 January 2014.

Carriers domiciled outside of the US could be eligible for reduced reinsurance collateral requirements provided the foreign jurisdiction meets a new set of standards proposed by the National Association of Insurance Commissioners (NAIC).

Alterra's sidecar New Point V has increased in size from $210mn to $247mn, the company said.

Allied World Assurance Company has bought a minority stake in Bermudian collateralised reinsurance writer Aeolus to expand its Allied World Financial Services platform.

Leading insurance-linked securities (ILS) fund manager Nephila is believed to have matched its $1bn+ first-half fundraising feat in the second half of the year as it heads toward the 2013 renewals.

The Solicitors Regulatory Authority (SRA) has taken another step to improve the quality of capacity in the UK solicitors' professional indemnity (PI) market, having provided greater clarity on the role of non-UK-based insurers.

Allstate and Axis Capital have reset for significant share buybacks in 2013 after shaking off Sandy losses, while Chubb is expected to direct proceeds from its Alterra stake after the Markel takeover to repurchase stock.

Analysts are looking forward to a resumption of share buybacks at American International Group (AIG) in 2013 after the US insurer cashed out 90 percent of its stake in aircraft leasing arm ILFC and its remaining interest in AIA Group.

Airline insurance rates are down 9-15 percent for 2012 as abundant capacity combines with another low loss year, according to reports by leading airline insurance brokers Aon and JLT.

Moody's became the latest ratings agency to express workers' comp concerns and warned of weak employment profitability, long-term structural changes in the US labour markets and persistently low interest rates.

Net ultimate asbestos losses have crept up by $10bn to $85bn for the US P&C industry, according to rating agency AM Best's latest figures.

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.