February 2008/2

Stephen Matanle, the long-standing Marsh executive who left the firm last month as part of a widespread restructuring, has joined Libero Ventures Ltd, the new Lehman Brothers subsidiary.

The proposed abolition of Lloyd's broker status to allow the market to accept business from a wider pool of intermediaries is just one suggested amendment to the legislation governing the Society.

UK insurer Brit Insurance Holdings has posted £62.5mn of net reserves for sub-prime related liability claims, it revealed in its 2007 results this morning that saw pre-tax profits and return on equity beat the previous year's figures.

Bermuda-headquartered (re)insurer Catlin Group Ltd reported an 8 percent increase in combined earnings to $462mn for 2007, on the back of the successful integration of acquired London (re)insurer Wellington Underwriting and growth in its US and internatio

Bermudian-headquartered run-off company Alea Group Holdings’ outstanding liabilities now stand at around $1.5bn after a series of major commutations, the company announced in its 2007 results.

French insurance giant AXA has bought yet another UK broker after agreeing terms to acquire SBJ Group.

Lloyd’s has approved Syndicate 2008 to write reinsurance to close (RITC) business, with the Shelbourne Syndicate Services Ltd (SSSL) managed vehicle already closing four open year syndicates with gross insurance reserves of around $455mn.

Shares in quoted broker Jardine Lloyd Thompson Group plc (JLT) were trading up this morning after the company reported a 5 percent increase in pre-tax 2007 profits to £95.2mn, and turnover up 3 percent to £473.2mn.

Bermuda-headquartered Lloyd's (re)insurer Hiscox Ltd has been propelled to a record full-year profit before tax of £237.2mn, up 18 percent, by the stellar performance of its Global Markets division.

(Re)insurance broker Willis Group Holdings has extended the contract of its chairman and CEO, Joe Plumeri, until 2011 as well as making a number of changes to its senior management.

Insurance giant American International Group (AIG) slumped to a fourth quarter net loss of $5.29bn after taking a staggering $11.12bn pre-tax mark-to-market loss on the super senior credit default swap (CDS) book of its financial products division AIGFP.

Omega Insurance Holdings Ltd Lloyd’s Syndicate 958 has withstood the impact of hurricanes Katrina Wilma and Rita to post a profit for 2005, maintaining its pedigree of a pure underwriting profit in every year it has traded since its launch in 1980.

Swiss Re has reported 2007 net income down 9 percent to SFr4.2bn, as its fourth quarter figures were decimated by a previously announced SFr1.2bn writedown of credit default swaps (CDS) in November.

Shares in American International Group (AIG) slid by more than 7 percent in early trading after the insurer announced the biggest quarterly loss in its history driven by a $11.12bn pre-tax writedown in its financial products division, AIGFP.

The appointment of Peter Zaffino as CEO of Guy Carpenter and Britt Newhouse as chairman does not signify “internal problems” at the reinsurance broker, according to one analyst.

US lawyers have brought a class action lawsuit against Swiss Re in connection with last November’s SFr1.2bn writedown of two credit default swap (CDS) contracts.

Amlin's standing as a leader amongst the quoted Lloyd’s insurers was reinforced today with "record" results that included a 30 percent leap in pre-tax profits to £445mn and a lowly 63 percent combined ratio.

Guy Carpenter has suddenly replaced its chief executive David Spiller with Peter Zaffino, the firm's head of US treaty operations, The Insurance Insider can reveal.

RSA has sold Guildhall Insurance Company to Enstar Group in a move that continues the group's disposal of its legacy business.

Directors’ and officers’ (D&O) rates for financial institutions have surged as the impact of the sub-prime crisis takes grip, according to new research.

As broadly healthy earnings continue to be set against the threat of the softening market, AM Best has affirmed its stable outlook on the reinsurance sector, with a minority of upgrades and downgrades expected to balance out around a majority of...

UK general insurer Royal & Sun Alliance (RSA) bounced back to a profit of £638mn for 2007 despite taking a hit from last summer’s UK floods.

A US jury has returned a verdict of guilty on all counts in the trial of Gen Re and American International Group (AIG) executives over a sham finite reinsurance contract between the two companies.

Further concerns have emerged over the future of XL Capital affiliate Security Capital Assurance (SCA), after the monoline bond insurer’s ratings were slashed by Standard & Poor’s (S&P).

US broker Hilb Rogal & Hobbs’ (HRH) acquisition of London market broker Glencairn hit its 2007 earnings by $0.11 per share it revealed yesterday (25 February).

Swiss reinsurer Glacier Re continued to grow in 2007 with an increase in premiums and the launch of its first securitisation.

Shares in Australian (re)insurer QBE Group dropped 10.2 percent in today’s (26 February) trading after the company missed analyst profit estimates for 2007.

Lloyd's insurer Beazley delivered record profits and strong top line growth for 2007, as it more than doubled business written in its US operation and benefitted from the benign underwriting environment.

Aon Corp has bought Chicago neighbour AJ Gallagher & Co's (AJG) reinsurance arm Gallagher Re - in a move first predicted by The Insurance Insider.

Canadian conglomerate Fairfax Financial Holdings reported record 2007 results fuelled by investment income of $1bn driven by credit default swaps (CDS) tied to US financial groups and bond insurers.

Willis has confirmed that it is not being investigated by the City of London Police over allegations of wrongdoing relating to Indonesian energy business.

City police are again investigating allegations of overseas corruption in connection with London market insurance brokers.

German financial services giant Allianz AG’s 2007 financial year results hit a historical high, with net income increasing 13.5 percent to EUR8bn accompanied by a proposed 45 percent dividend hike to EUR5.50 per share.

Republican Ron Reagan is set to introduce a bill tomorrow in Florida’s House of Representatives supporting proposals to scale back the state’s hurricane fund, potentially handing $3bn of limits back to the private reinsurance market.

Bermudian reinsurer Montpelier Re Holdings Ltd announced increased 2007 profits despite the expense of rolling out new platforms.

Reinsurance intermediary Benfield Group is facing a near “perfect storm” of negative issues that are unlikely to dissipate in the near future, according to a research note by Panmure Gordon & Co analyst Barrie Cornes.

Munich Re beat its increased profit projections for 2007 as it booked a consolidated result of EUR3.9bn for the year, up 11.9 percent on 2006.

The London market has moved closer to eliminating paper from premium processing as the Market Reform Group (MRG) announced today (19 February).

Market veteran John Charman has signed a five-year deal that will see him continue to head up Bermuda-based AXIS Capital Holdings Limited, the company he founded.

AM Best has become the latest ratings agency to respond to American International Group’s (AIG) admission that it faces far greater losses from its exposure to the continuing credit crisis by placing the ratings of the firm under review...

A third senior Marsh Ltd executive, Toby Foster, is also to part company with the firm, The Insurance Insider has learnt.

Zurich Financial Services Group’s (ZFS) cost cutting plans helped push the company’s profit to a record $5.6bn last year with improvements made across all its business divisions.

Lancashire Holdings Ltd has only traded for two years and, with its focus on specialty short-tail lines, couldn't be better timed. The lack of US natural catastrophes, energy or terrorism losses has enabled the "class of 2005" Bermudian start-up to post..

Senior Marsh Ltd executives Stephen Matanle and Julian Wallers are to part company with the broking giant, The Insurance Insider has learnt.

Shareholders in Lloyd's (re)insurer Kiln Ltd have approved the cash acquisition of the firm by Tokio Marine & Nichido Fire Insurance Co Ltd at a special general meeting yesterday.

The introduction of the Solvency II directive will drive an increased focus on run-off across Europe, according to a new survey launched by PricewaterhouseCoopers LLP (PwC) in conjunction with the Association of Run-Off Companies.

French reinsurer SCOR said 1/1 renewals confirmed the successful integration of last year’s acquisition Converium, with a high retention rate and access to new business.

Veteran class action lawyer Bill Lerach, who represented Enron investors and other shareholders suing large corporations, has been sentenced to two years in jail for making improper payments to clients in a kickback scheme.

Ratings agency Standard & Poor's has responded to American International Group's (AIG) admission that it faces far greater losses from its exposure to the continuing credit crisis by placing the ratings of the firm on Negative outlook.

Organic growth boosted Marsh and McLennan Companies Inc’s (MMC) 2007 revenues, the company reported today (12 February).

ESR Insurance Ltd – the Lloyd’s broker hit by allegations of fraud in its surety bond division – has gone into administration.

After two years characterised by more financial strength ratings upgrades than downgrades, AM Best has predicted actions will be more “fairly balanced” for US property and casualty (P&C) insurers in 2008.

American International Group (AIG) saw its share price tumble over ten percent yesterday (11 February) to a five-year low as it spooked investors over the size of its exposures to the continuing credit crisis.

ECF figures improve after re-audit; P&I reinsurance structure static, but costs rise; Lloyd's capacity static for 2008; THB finalises PWS deal...

MGA Euro International Underwriting Ltd underwriter Christopher Henton, who was banned from operating over his "dishonest involvement" in the notorious Sphere Drake managing general agent (MGA) was...

David Bedford, director of Lloyd's broker ESR Insurance Services Limited (ESR), has been arrested and released on bail without charge in connection with a police investigation into an alleged fraud for millions of pounds.

Concord Re, the $730mn sidecar established by American International Group's (AIG) subsidiary Lexington Insurance Company in 2006, has been non-renewed for 2008, as predicted by The Insurance Insider last year.

Risk modelling firm Risk Management Solutions (RMS) is launching a series of natural catastrophe indices for US wind and quake, and European windstorm under the banner Paradex.

In contrast to its troubled rival, ACE Ltd - which was set up with XL on Bermuda in the mid-'80s - reported record full year 2007 net income of $2.58bn, up 12 percent on the prior year...

AJ Gallagher & Co's (AJG) confirmation last month that it was putting loss making reinsurance broker Gallagher Re up for sale has been welcomed by analysts.

An annus horribilis in the space insurance market tailed off with a second potential satellite loss in December.

Sciemus Ltd is set for a 1 March underwriting start in the power market, after securing capital for the venture, The Insurance Insider can reveal.

Enstar Group Ltd is close to a deal that will see it acquire Royal & SunAlliance's (R&SA) up-for-sale UK legacy units, The Insurance Insider can reveal.

DE Shaw-backed $250mn start-up gets A- rating; AM Best affirms New Castle Re; Banks consider bond insurer bailout; SCOR free of monoliner exposure...

Despite what some believe is over-capacity in the sector, Alea chief Mark Cloutier is confident that by setting up the latest reinsurance-to-close (RITC) syndicate at Lloyd's...

The jury in the trial of four former Gen Re and an ex-American International Group (AIG) executive charged with transacting an allegedly sham finite reinsurance contract between the two firms is due to retire in mid-February.

Aon Corp has hired former Max Re chief executive Bob Cooney as managing director of its Capital Markets division, the unit which provides structured finance and capital markets products to the (re)insurance industry.

Swiss Re has closed its $85mn GlobeCat transaction, providing one year of cover for Central American earthquake and six years for Californian earthquake and US windstorm.

Warren Buffett has accused major investment banks of being the architect of their own downfalls through the collapse in the US sub-prime mortgage market.

RK Carvill has confirmed that Deutsche Bank will provide Standard & Poor's AA rated security to hurricane derivatives transformed into reinsurance contracts through transformer vehicle Mount Prospect Ltd.

European reinsurers Munich Re and Hannover Re both declared 1 January renewals a success, despite falling rates.

Brian Duperreault's appointment at the helm of Marsh & McLennan Cos (MMC) looks to have bought the ailing company breathing space from growing pressure exerted by activist investors...

Finality expected on some of the market's kitchen sink years

The run-off market has welcomed a potential new buyer of discontinued books – JMD Specialist Insurance Services.

Our monthly column keeping a check on recent US and EU legislative and regulatory developments, in association with Sidley Austin LLP

A New York court has recognised the jurisdiction of the UK courts in the insolvency of run-off insurer Highlands Insurance Company (UK) Ltd.

Bermudian reinsurer RenaissanceRe is to launch its first cat bond - CPX Re - to provide US all natural perils cover, our sister publication Trading Risk revealed.

In January, IFEX saw trading volumes increase and added depth to the market with the partnership of Swiss Re as market maker.

The US Securities and Exchange Commission (SEC) plans to turn its sights on the hedge fund community as a target for future investigations into business practices.

Despite the unprecedented scale of the Societe Generale "rogue trader" fraud, the bank's insurers may not be exposed to their full limits because of the technical nature of financial institutions (FI) cover...

US retail broker Brown & Brown is poised to launch an EC3 platform, called Decus Insurance Brokers Ltd, which is likely to draw business away from independent wholesalers who currently access the London market on its behalf.

Despite reporting healthy earnings, broker Willis Group disappointed analysts with its lack of organic growth for the fourth quarter.

Recently listed legacy specialist Randall & Quilter Investment Holdings plc (R&Q) is to release £11mn in capital from its Chevanstell Ltd run-off.

Other than the fact that Warren Buffett has promised $37bn+ of his fortune to Bill Gates' charitable foundation, Keefe, Bruyette & Woods analyst William Hawkins' observation...