February 2013/2

Weekly share price movements and key data on The Insurance Insider's universe of P&C (re)insurers and brokers

Swiss Re may recover a chunk of the $12mn prize money that SCA Promotions paid out to Lance Armstrong after the Texan firm filed a lawsuit against the shamed cyclist.

The New York Court of Appeal has sent a complex asbestos case back to trial to determine whether a Travelers unit improperly structured a $1bn settlement in order to inflate reinsurance cover.

A detailed European Commission report undertaken by Ernst & Young has praised the subscription market model and found no evidence that improper alignment of premiums is occurring in London, the industry's largest subscription market.

The (re)insurance industry needs to cooperate to face up to regulators and avoid being "overwhelmed" by regulation, Axis founder John Charman said at the InsiderScope 2013 event hosted in London last week by The Insurance Insider.

Renaissance Re CEO Neill Currie threw cold water on the idea that growth in the convergence market represented a "watershed" point during the company's earnings call.

RenaissanceRe's rated sidecar DaVinci Re returned profits to investors as it bought back shares worth a net $150mn, while fellow operators Validus and Alterra also began reporting fee income from their post-Tohoku sidecars.

The respite for investors at the start of 2013 after the US avoided falling off the "fiscal cliff" is likely to be short-lived amid global macroeconomic challenges and a low-yield environment that is largely unchanged from last year.

Reinsurers provided divergent commentary on the 1 January US cat renewals, with the most bullish putting rate movements at +5 percent while others suggested that rates were down.

Novae Group surprised the market last week with an unscheduled announcement that its pre-tax profits would be 40 percent higher than the average analyst forecast.

UK-listed firms received a mixed reaction from investors after Beazley kicked off the Lloyd's reporting season with forecast-beating 2012 results, while Catlin saw its share price fall modestly despite its still-solid performance.

After last week's flurry of Q4 results releases from our universe of Bermudian (re)insurers, the clear theme to emerge was of outperformance, with all but one company beating analysts' consensus forecasts.

US P&C insurers quickly put Sandy to one side and set straight back onto the path of capital management in Q4 earnings announcements.17

Return on equity (RoE) across the Bermudian (re)insurance sector has so far averaged in the high single digits for 2012 - typically not thought of as an adequate return for the amount of risk assumed.

The pace of capital management is set to pick up in early 2013 as repatriation plans postponed in the aftermath of Sandy return to the forefront of (re)insurers' minds.

The Insurance Insider runs down some of the potential buyers that it would approach if it was running the auction.

Arch is in line to become the ninth managing agent to join Lloyd's China, just weeks after Brit secured approval, The Insurance Insider understands.

Australian insurer IAG is close to making reinsurance recoveries on its catastrophe programme after taking A$120mn-A$140mn of insured losses from Tropical Cyclone Oswald.

Reinsurers and brokers must adapt to large sophisticated buyers of reinsurance increasingly centralising their reinsurance spend, said Willis Re chairman James Vickers.

Tom Bolt, the former Berkshire Hathaway executive charged with guarding underwriting standards on Lime Street, has responded to criticism of the growing trend of (re)insurers' managing third-party capital.

Hiscox is set to unveil a set of new industry specific professional liability (PL) policy forms this week that it says will target underserved areas of the market as it looks to build its book of business in the US.

Lloyd's insurer Hardy Underwriting weighed on CNA's fourth quarter results with a hefty 153.8 percent combined ratio and a $26mn loss for the period.

TigerRisk has continued to build its Florida client book by winning the United Property & Casualty Insurance Company account from rival reinsurance broker BMS.

The perennially controversial topic of broker remuneration resurfaced last week as two industry heavyweights voiced concerns about the practice of brokers charging insurers for services they perform on their behalf.

Aspen and XL grow; Arch acquires mortgage insurer; Manchester Underwriting recalls; S&P downgrades Beazley on ‘deficient' capital adequacy; Meier heads for the door at Universal; Validus affirmed; Lockton acquires Down Under; Axis spends $116mn on buyback; Lloyd's Council elected; R&Q share price surges

The cyber insurance market is "beyond embryonic but not out of the womb yet", according to Lloyd's performance management director Tom Bolt.

Lloyd's would seriously listen to applications from other alternative reinsurance capacity providers following the entry of Nephila, director of performance management Tom Bolt told The Insurance Insider.

Last week The Insurance Insider held its flagship InsiderScope London event for the fifth consecutive year.

As the deadline for the renewal of the mammoth, loss-affected reinsurance contract that covers the International Group (IG) of P&I clubs nears, signs are emerging that some markets have relaxed their negotiating stance.