December 2013/3

Our group of publicly listed brokers experienced a tough week of trading last week, with most firms' share prices coming under pressure.

London-listed Lloyd's (re)insurers Novae and Beazley continued to power ahead of their peers last week, as their share prices rose by 2.94 percent and 2.06 percent respectively.

European (re)insurance stocks came under pressure last week, with share prices down for all but one company.

It was a generally bad week for US (re)insurance stocks last week, mirroring poor market performance as the S&P 500 declined 1.65 percent.

The National Association of Insurance Commissioners (NAIC) has welcomed the Federal Insurance Office (FIO) report on modernisation of insurance regulation for its commitment to maintaining the state-based system at its core.

A newly formed Prudential Regulation Authority (PRA) panel representing the interests of the UK financial services industry has elected Aberdeen Asset Management CEO and former Chaucer chairman Martin Gilbert as its head.

Lloyd's and UK regulator the Prudential Regulation Authority (PRA) will be "mindful of duplication of where oversight might be experienced by those who are subject to PRA and Lloyd's jurisdiction," a new protocol between the two institutions confirmed.

Regulators need to supervise the insurance-linked securities (ILS) market to ensure that investors have sufficient expertise to analyse insurance risks, the European Insurance and Occupational Pensions Authority (Eiopa) said on 12 December.

The California Earthquake Authority (CEA) will seek board approval today (16 December) to maintain its claims-paying capacity at the same level in 2014 as in 2013, according to meeting agenda documents.

The cat bond market has returned to its pre-financial crisis heights, with 2013 issuance set to reach $7.5bn if all three bonds currently in the pipeline close on target before the end of the year.

Axis has established a new class 3A Bermudian reinsurer, Axis Ventures Re, as well as a management company, Axis Ventures, according to the latest registration statistics from the Bermuda Monetary Authority.

Three new cat bonds launched in the past week, including two from debut sponsors and a complex deal from Argo that offered direct and facultative risk to the insurance-linked securities market, sister publication Trading Risk reported.

The benign catastrophe climate in 2013 has helped mask underlying margin pressure on Bermudian (re)insurers, according to Keefe, Bruyette & Woods (KBW) analyst Meyer Shields.

Industry-wide insured losses stemming from Windstorm Xaver could reach EUR1.4bn, catastrophe modelling firm AIR Worldwide warned last week (12 December).

The 2013 Atlantic hurricane season was the least active in over 20 years with the lowest number of hurricanes since 1982, Willis Re estimated in a report published last week.

The (re)insurance broker space has been a hive of M&A activity during 2013, characterised by mounting private equity (PE) interest, particularly in North America, and continued industry consolidation.

After years of struggling to keep afloat and engaging in a largely successful battle to positively change the market's perception of the company, London-listed carrier Novae finds itself confronted by a strategic dilemma about its future direction.

Falling prices on excess layers more than offsets hardening primary business

QBE is on course for one of the worst stock market performances of any major international insurer in 2013 after a shock profit warning from the group earlier this month wiped out all of its share price gains for the year.

IAG has announced the A$1.8bn acquisition of Wesfarmers' Australian and New Zealand insurance underwriting operations.

Q360, the insurance broking arm of troubled run-off acquirer and insurance services group Tawa, is facing an uncertain future due to the impending departure of founding partner and head of broking Graham Kilby, The Insurance Insider can reveal.

Shares in UK general insurer RSA have fallen to a level where they may be worth buying again, some analysts said on 16 December, amid mounting speculation that the embattled carrier will put itself up for sale or try to repair its tattered balance sheet through large-scale disposals.

AmTrust Financial Services is set to hold a conference call this evening (16 December) to comment on its turbulent share price performance last week and to provide an update on the outlook for year-end 2013 and 2014.

The generous ceding commission given to XL on its professional lines reinsurance quota share has prompted memories of some of the most extreme soft markets in living memory.