February 2011/2

Guernsey based private equity firm Terra Firma is in talks to acquire Lloyd's (re)insurer Chaucer plc, The Insurance Insider can reveal.

LMA cool on Suez threat; Marsh unveils Maplecroft link-up; EU announces Eiopa chairperson; GCube $500mn solar expansion driven by demand; Litmus Analysis hires S&P veteran; Oxford hires PI duo after cash injection; AM Best gives Arch ratings boost; RFIB targets growth in Russian retail sector; PWC appoints insurance chief

Insurance services and run-off capital provider Tawa plc is upping its investment in the US as it looks to build out its platform through acquisitions, The Insurance Insider can reveal.

Novae Group, the Lloyd's insurer nearly brought to its knees 10 years ago by a torrent of US casualty reinsurance exposures, looks set to announce that it has finally dealt with its legacy past.

The Bermuda Monetary Authority (BMA) has outlined a roadmap for creating a regulatory framework that is recognised as equivalent to the European Solvency II (SII) regulations.

Solvency II implementation spending by UK regulator the Financial Services Authority (FSA) will amount to £46.4mn in the financial year starting 1 April 2011.

UK regulator the Financial Services Authority (FSA) unveiled a 10.1 percent budget increase for the upcoming financial year as the cost of a more intrusive regulatory regime mounts.

As Cyclone Yasi made landfall as a Category 4 storm on Australia's Queensland coast last week (3 February), reinsurance brokers transacted so-called livecat industry loss warranty (ILW) deals for traders seeking to hedge against losses.

Investment bank JPMorgan completed an innovative longevity hedge last month, with capital markets investors welcoming its short-term duration.

The catalyst for a turn in the pervasive soft market conditions of the insurance underwriting cycle does not have to be a major event, according to MMC chairman and CEO Brian Duperreault.

Soft market pressures and a reduction in the use of reinsurance have left the directors' and officers' (D&O) sector vulnerable to a repeat of the pain it suffered in the late 1990s and early 2000s.

Directors' and officers' (D&O) underwriters need to change the way they price the excess layers on towers of insurance coverage to avoid the pitfalls of past soft markets.

Mapfre achieved an 8.7 percent increase in revenues for full-year 2010, despite a EUR 106.1mn hit from the Chilean earthquake.

Global specialty insurer Ace has revealed a threefold increase in pre-tax catastrophe losses for 2010 to more than $400mn, along with guidance that this figure for 2011 already stands at $370mn.

Munich Re's full-year profits slid by 5 percent to EUR2.43bn as it reported that catastrophes had cost it EUR495mn in the final quarter of 2011 and pushed its full-year combined ratio over 100 percent.

Full-year accounts for The Hartford show that earnings have rebounded from the losses experienced in 2009, although there was significant deterioration in its P&C earnings during the final quarter.

Markel Corp posted a 97 percent combined ratio for 2010, with large prior-year reserve releases in the final quarter enabling the firm to beat Wall Street earnings expectations.

Specialty insurer WR Berkley's full-year net income rose by 45 percent to reach $449mn as the firm bounced back from heavy investment losses in 2009.

US insurance group American Financial Group (AFG) reported an 8 percent year-on-year drop in full-year earnings for 2010 to $479mn, due to deteriorating results from its specialty P&C operations.

White Mountains Insurance Group booked an 80 percent slump in net profits from $470mn in 2009 to $87mn last year, despite a relatively strong performance in its reinsurance division.

Midway through the US and Bermudian Q4 reporting season results have broadly beaten expectations so far, according to UBS analyst Brian Meredith.

The brutal winter storms that struck the US at the start of February will produce insured losses of between $790mn and $1.4bn, reports catastrophe modelling firm AIR Worldwide.

Premiums in the mining industry have fallen for the second consecutive year despite a series of catastrophe losses, according to broker Willis.

Munich Re's revised loss forecast for the New Zealand earthquake has taken the growth in reported reinsurance losses since December past the $650mn mark, analysis from The Insurance Insider shows.

Australian insurer Suncorp has once again reaped the benefits of comprehensive sideways reinsurance protection, as it revealed its net claims costs from last week's Category 5 Cyclone Yasi will be capped at just $10mn.

Rates for treaties covering offshore energy risks rose by 20 percent at the 1 January renewals, according to reinsurer Hannover Re.

Marine insurers have secured further clarity from the UK High Court over one of the crucial issues posed by piracy off the coast of Somalia - the legality of ransom payments.

The marine insurance market continues to expand in 2011, despite fears of overcapacity in the core hull and machinery (H&M) sector that has not delivered underwriting profit for more than a decade.

A return to hard market conditions will require $74bn of excess capacity to be taken out of the US property and casualty market, according to global insurance data and analytics provider Advisen.

The first two major global reinsurers to report, Munich Re and Hannover Re, have expressed satisfaction with their relative market showing in the 1 January renewals

The new rules on the capital charges held against investment risk under the QIS5 version of Solvency II will have a radical impact on (re)insurers' investment portfolios, according to studies

London-based wholesale (re)insurance broker Cooper Gay's plans to convert its European trading team into a single entity will see the firm's bonuses and incentives pooled as if they operated a single profit and loss account, according to sister title Inside FAC.

Ryan Specialty Group has launched a managing general underwriter (MGU) for US excess casualty business - its second MGU launch in the last fortnight, and has announced another acquisition in the excess and surplus lines broking space.

AJ Gallagher achieved a 9.5 percent increase in its 2010 earnings to $135.5mn despite its brokerage segment suffering a 1.7 percent decline in organic revenues over the year.

With Aon already reporting solid numbers for Q4 2010, the attention will now turn to rivals MMC and Willis - with the latter due to report this Wednesday (9 February).

Aon Corp threw down a gauntlet to its rivals MMC and Willis with a solid fourth quarter in broking revenues and margins enabling it to pip the analysts' consensus on forecast earnings.

Towergate Partnership's £520mn bond issuance was oversubscribed by between five and six times, The Insurance Insider understands.

Australian insurer QBE has continued to build out its US platform with a deal for the distribution rights and portfolio of force-placed specialist Balboa, which takes its annual premium base in the US to an estimated $6.6bn.

BlackRock, one of the five biggest holders of London-listed insurance equities, has slashed its stake in Omega Insurance by more than half.

Allianz Plc, the Irish subsidiary of global insurance giant Allianz, has had its financial strength rating downgraded to A- from A by S&P to reflect the corresponding downgrade for Ireland's sovereign debt.

Private equity-backed financial lines managing agency Nexus Underwriting Management (NUM) has secured the backing of new capital providers after Lloyd's (re)insurer Argo Group withdrew support for one of its subsidiaries last month.

Three Lloyd's managing agents have faced an intrusive Section 166 investigation from UK regulator the Financial Services Authority (FSA) in the last two years following compliance concerns, The Insurance Insider has learned.

Joseph Brandon - the former General Re CEO who was forced to resign amid growing pressure from US regulators over a controversial finite reinsurance transaction with American International Group - can return to the industry with his reputation intact.

Guernsey-based private equity firm Terra Firma is in talks to acquire Lloyd's (re)insurer Chaucer plc, The Insurance Insider can reveal.

Declared losses from Australia's recent spate of catastrophes have reached roughly $1.75bn, according to initial analysis from The Insurance Insider.

QBE has confirmed details of its giant $1.3bn multi-year global cat reinsurance cover, which was first revealed by The Insurance Insider last November.

Rates for US property and casualty insurance fell by 5 percent on average in January, according to the latest market barometer from Texas-based insurance exchange MarketScout.

The problem with many US prosecutors' attacks on our industry since the aggression first unleashed by Eliot Spitzer in 2004 bore such spectacular fruit is that they have been so far wide of the mark.

Canny reinsurance purchasing stands to limit Insurance Australia Group's (IAG) net losses from the recent flooding and typhoon activity in the country, The Insurance Insider understands.