December 2016/3

Share price data on The Insurance Insider's universe of P&C (re)insurers

The Insider 50 was up just 0.38 percent for the week when closing bells rang at stock exchanges on either side of the Atlantic on Friday (16 December).

Auto lines have relentlessly undermined the profitability of commercial insurance operations at many of the industry’s biggest players in recent years, and 2016 has been no exception.

Global insured losses from natural catastrophes reached $42bn in 2016, up 51 percent from the prior year, according to a report from Swiss Re’s Sigma unit.

Two Florida insurers have issued debt to insurance-linked securities (ILS) managers in recent weeks, highlighting the fact that a broader group of such companies are prepared to invest in such deals.

Florida Citizens Property Insurance has tentatively set aside $70mn to spend on its reinsurance buying in 2017, as it faces rising losses from water claims and assignment of benefits (AOB) litigation. 

Insurance intermediaries are the agents of change for technological innovation in the (re)insurance market, according to Cedent chairman and CEO Michael Coles.

Bermudian reinsurance experts believe the island's resilience will protect it against any tax changes from US president-elect Donald Trump that might threaten its industry position.

The complexity of (re)insurance has been a major factor in the low level of disruption experienced by the industry, according to a panel of experts.

Enstar's legacy-and-live total return reinsurer KaylaRe, which it launched last week (15 December) with capitalisation of $620mn, looks likely to be the final entrant in the recent spate of such carriers to make it over the line.

Lockton's Texas division is suing two of its former employees after they allegedly led a team defection to rival broker Marsh.

By the time the US Federal Reserve nudged interest rates higher last week (14 December), the change had already been priced in and most investors and treasury managers had made any adjustments to portfolios and allocations that might have been expected as a result.

Matt Fairfield's (re)insurance start-up Exin Partners has struck a deal to buyout AIG's interest in AIG Greece in a deal worth upwards of EUR100mn ($104mn), The Insurance Insider revealed on 20 December.

That Lloyd's has plumped for an EU-based subsidiary workaround for Brexit will come as little surprise to the market.

Lloyd's will establish a subsidiary in Europe should the UK government fail to secure passporting rights following Brexit.

Former Lancashire CEO Richard Brindle's total return carrier Fidelis has agreed a 5 percent private placement on the International Group (IG)'s general excess of loss (GXL) programme, The Insurance Insider can reveal.

Marine (re)insurers have been notified that the ground-up loss from last year's Alpine Eternity collision has risen to $275mn, The Insurance Insider revealed last week.

Rates on the reinsurance programme for the International Group (IG) of protection and indemnity clubs fell by around 7-9 percent for 2017 on a risk-adjusted basis, The Insurance Insider understands.

If successfully consummated, Fairfax Financial's $4.85bn deal to buy Allied World will create a combined company with shareholders' equity of $13.5bn and a book of (re)insurance business generating $12.5bn of gross written premium.

Allied World's founding chief executive Scott Carmilani is poised to receive a $79.6mn payout following the carrier's acquisition by Fairfax Financial.

The agreed sales of Allied World and Endurance in the space of two months has lent credence to the perception that the era of the publicly traded small-to-mid-sized Bermudian (re)insurer is drawing to a close, with the remainder likely to acquire, merge or sell to break through the $7bn market cap threshold.

Whether Fairfax Financial winds up adding Allied World to its expanding array of operating units may depend on how much more the acquisitive Canadian company is willing to spend.

The agreed sales of Allied World and Endurance in the space of two months has lent credence to the perception that the era of the publicly traded small-to-mid-sized Bermudian (re)insurer is drawing to a close, with the remainder likely to acquire, merge or sell to break through the $7bn market cap threshold.

Around this time last year there was talk in M&A circles of intense interest in the Florida homeowners' market as investors looked for liquidity through sales or IPOs.