February 2007/3

Shares in Benfield Group fell over 10 percent this morning (8 March) after the company announced a below forecast 2006 result and a worse than expected loss in its fledgling Corporate Risks division.

UK insurer Brit Insurance Holdings almost trebled its profits last year as it came in ahead of forecasts.

Hannover Re has returned to the capital markets with an innovative transaction it says completes its programme of natural catastrophe protection and gives it “unprecedented independence” from the traditional retro market.

The competitive trading conditions for insurance broking overshadowed Jardine Lloyd Thompson Group plc’s (JLT) 2006 results this morning where the theme of declining rates and the weak dollar was paramount.

Amlin plc opened the Lloyd’s reporting season and set a challenging pace for its peers with record pre-tax profits of £342.7mn on the back of clement cat conditions and its decision to cut back its reinsurance/retro spend.

US giant American International Group (AIG) reported a rise in its 2007 net income and announced an $8bn share buyback scheme.

In a year in which “everything went right in insurance”, investment conglomerate Berkshire Hathaway reported last night a record gain in net worth during 2006 of $16.9bn.

Converium, the Swiss reinsurer fighting a hostile takeover battle from rival SCOR, has regained its desired A- financial strength rating from Standard & Poor’s (S&P).

Despite delivering a doubling of net profits to SFr4.6bn and an unexpected announcement on capital repatriation, Swiss Re’s full-year financials were met with a cautious response by analysts this morning (1 March).

Lloyd’s has strengthened its ties in the fast growing Asian markets with the launch of a Malaysian subsidiary.

The impact on reinsurers of last month’s legislation in Florida may not be quite as severe as first feared, with the state reportedly opting to expand its hurricane catastrophe fund by $12bn, less than the $16bn increase allowed in the bill.

Bavarian giant Munich Re has raised its 2007 earnings guidance on the back of record 2006 profits of over EUR3.5bn – 28.5 percent up on the prior year.

Rating agency Standard & Poor’s (S&P) is launching a new set of ratings for the run-off sector to indicate the expectation of recovering the principal from (re)insurers.

Icap, the world’s largest interdealer broker, has joined forces with JLT Group to operate in areas of increasing convergence between the capital markets and the (re)insurance industry.

SCOR has stepped up its takeover approach for rival Converium by formally pre-announcing a public tender offer for the remaining shares in the company.

QBE Insurance Group pointed to its recent foray of international acquisitions as deliverers of future growth, while joining the ranks of underwriters unveiling record 2006 results.

The Delaware insurance commissioner has given Royal & Sun Alliance (R&SA) the green light to spin-off its run-off US subsidiary, subject to conditions.

Stephen Way has formally completed his departure from HCC Insurance Holdings, the company he founded in 1974, at the same time as the firm announced a 79 percent leap in profits last year.

Risk Management Solutions (RMS) has released the “RMS Infectious Disease Model”, the first commercially available probabilistic model for assessing the risk of influenza pandemics across multiple countries.

Swiss reinsurer Converium has rejected a takeover bid from rival SCOR this weekend saying the unsolicited proposal “fundamentally fails to recognise the value of Converium's franchise and growth prospects”.

If the recent reinsurance legislation had been passed in a foreign country (re)insurers would be asking the State Department to intervene, according to Maurice “Hank” Greenberg, chairman and CEO of CV Starr & Co.

In a further sign of growing innovation between the (re)insurance industry and capital markets, the Chicago Mercantile Exchange (CME) is to begin trading hurricane futures and options in conjunction with reinsurance broker Carvill.

Although Europe suffered its biggest windstorm since 1999 as Kyrill blew across it in January, the continent's largest reinsurers remained miles apart in counting its cost.

Up to 30 percent of property cat profitability 'eliminated'

Although Benfield's share price has shown a moderate recovery in recent days, its 13 percent slump as news broke of Florida's legislative intervention brought into sharp relief the negative earnings impact...

Heath Lambert, the independent UK broker that came close to tying the knot with rival Jardine Lloyd Thompson Group plc last year, looks set to unveil a 2006 turnover of around £121mn...

David Foreman, the former underwriting chief at Wellington Underwriting, is close to confirming the launch of a new Lloyd’s based (re)insurer supported by private equity finance, The Insurance Insider understands.

Although Aon Corp's audacious swoop for rival Benfield's facultative team continues to generate acrimony between the two firms, the UK-headquartered reinsurance broker has begun the process of recruiting new talent.

Besso Holdings Ltd has become the latest London market broker to consider entertaining takeover offers, The Insurance Insider can reveal.

UK insurer prepared to retain minority stake

Florida might seem an unusual place to embrace socialism, but the state's effective nationalisation of its hurricane cat programme last month has continued to reverberate...

FSA follows Bermuda in raising fees; Lancashire reassures after Florida actions; Three-year electronic target for London market; Novae sees reduced deterioration on legacy exposures...

US property catastrophe - a changing climate; State Farm legal developments; Florida action on reinsurance collateral requirements; National catastrophe programme considered

German reinsurer R+V Versicherung was awarded over £14mn in its long-running dispute with the former Lloyd’s-based managing agency Risk.

Aon Corp unveiled a significant restructuring of its senior international management last month which saw Steve McGill, the former JLT Group chief executive, become the head of a newly created Aon Global division.

The internal probe launched by PWS Holdings over an alleged $1.6mn Costa Rican reinsurance fraud did not start until six months after the country’s authorities had begun investigating the case.