February 2010/4

Aegis scoops Odyssey Re hire for treaty expansion; Validus hires former Swiss Re executive for board

Montpelier Re saw its 2009 combined ratio fall to a mere 62.2 percent - against 91.0 percent in 2008 - on the back of a gentle claims season.

Validus Holdings' net income rose to $897.4mn in 2009, against $53.1mn in 2008, after a $287.1mn gain from its acquisition of IPC.

Flagstone Re turned around 2008 losses to post a net profit of $242mn last year, as it enjoyed strong underwriting and investment returns.

Platinum Underwriters Holdings has added its name to a growing roll call of Bermudian (re)insurers with bumper full-year results, after posting a 77 percent increase in its net income last year.

French insurance giant Axa SA saw net profit almost quadruple from EUR923mn in 2008 to EUR3.61bn in 2009 - beating analysts' forecasts of EUR2.97bn - as it shook off the worst effects of the financial crisis.

Bahrain-headquartered reinsurer Arab Insurance Group (Arig) delivered net profits of $21.9mn in 2009, reversing a $28.6mn loss in 2008. However, reduced demand for reinsurance and falling rates stunted its top-line growth.

Arch Capital became the latest Bermudian (re)insurer to reveal a surge in net income in 2009 with more-than-threefold growth to $851.1mn despite a decline in premiums written.

Partner Re has repurchased almost 1.5 million common shares valued at more than $100mn, as the capital management theme continues to dominate the sector.

Expansive broker Gallagher International will open a facultative reinsurance operation in Brazil after purchasing local reinsurance broker Securitas Re.

Run-off (re)insurer Alea Group has appointed Jeffrey Rosenthal as its new president and CEO to replace Mark Cloutier, who steps down on 31 March.

Bob Deutsch, the industry veteran and founding CEO of Ironshore Inc, has joined the (re)insurance-focused private equity firm Greenhill Capital Partners as a managing director.

Jean Azema, CEO of Groupama, revealed the French mutual giant is considering a listing on the Paris stock market so that it will be in a position to make a significant acquisition.

Euler Hermes, the world's biggest credit insurer, saw its net income nosedive by 77 percent in 2009, as business insolvencies drove its combined ratio well in excess of 100 percent.

AM Best has reported that downgrade action in the US P&C market has outpaced upgrades, with US subsidiaries of troubled Canadian auto insurer Kingsway Financial Services (KFSI) accounting for nearly 20 percent of negative actions.

Victims of the global fraud allegedly run by disgraced financier Allen Stanford have filed a class-action lawsuit against the Eastern Caribbean Central Bank (ECCB), five regional financial institutions and the government of Antigua and Barbuda.

Aon has accused over a dozen Lloyd's syndicates and London market insurers of breach of contract after being allegedly denied PI coverage in its reinsurance spat with UNIC.

The current pricing for portfolios of legacy business is still a "free-for-all" and the economic downturn has done little to flatten what many see as a trend of over-paying, according to a survey of senior practitioners.

In another eventful week, American International Group (AIG) has dropped plans to sell all of its controversial derivatives portfolio and walked straight into a...

Ratings agency Fitch is the latest commentator to note that rates are falling in most reinsurance classes because of abundant capacity.

Berkshire Hathaway's capital injection helped Swiss Re boost its shareholders equity by SFr5.7bn in 2009 to SFr26.2bn.

The growing international sanctions emerging in response to the Tehran government's nuclear ambitions have raised the alarm among P&I clubs, with ship-owner members operating to and from Iran.

Germany's heavyweight (re)insurance sector has lined up to suspend or clarify the extent of its business in Iran, amid mounting international concerns over the country's nuclear capability.

Finlay Smith, head of the UK property portfolio at QBE, has said that there is no evidence that the recession will increase UK property claims.

German reinsurers Munich Re and Hannover are understood to have exposure to the 15 February head-on collision between two passenger trains in Belgium.

Within three years of his death, Oliver Cromwell's body was being violently disinterred and the Stuarts were restored to the throne. It was almost as if...

Although last week's agreement between the "big three" brokers and US state regulators came close to abolishing Spitzer, contingent commissions look unlikely to ever recover to 2004 levels.

BMW today (22 February) announced a £3bn transfer of longevity risks from its UK pension fund, with reinsurance support provided by a consortium including Hannover Re and Partner Re.

Despite a modest investment setback in Q4, Fairfax Financial Holdings (FFH) added almost a third to its book value in 2009 as workers' compensation underwriter Zenith National Insurance (ZNT) was unveiled as its latest takeover target.

In an unexpected move, Endurance founder Kenneth LeStrange confirmed last week he will be replaced as CEO by his underwriting lieutenant David Cash, as the Bermudian (re)insurer basks in record results for 2009.

Bermuda continues to take steps to match regulatory frameworks in rival jurisdictions by releasing details on how it proposes to introduce group supervision.

Axis Capital could tolerate a full $399mn loss on its exposure to Blue City bonds - but Moody's has warned that additional losses from its credit/political risk book could cause a downgrade of its financial strength ratings.

Omega's long-running boardroom showdown became more personal in the last week when the firm named names in a strongly worded shareholder circular ahead of its upcoming special general meeting (SGM), and then reacted strongly to rating agency moves.

London is waiting to see where the next blow will fall after medical malpractice specialist Marketform acknowledged a $48mn adverse development in its Italian book of business earlier this month.

Credit default swap (CDS) spreads have widened in recent weeks for some (re)insurers identified with significant exposures to government bonds.

Sluggish rates, surplus capacity and depressed market valuations are deterring private equity from investing in the P&C (re)insurance sector, so the new $150mn investment by Corsair Capital is particularly notable.