January 2008/2

The sub-prime related professional liability (PL) litigation faced by US financial services firm State Street Corp has set alarm bells ringing among errors and omissions (E&O) insurers.

With Lloyd's global capacity thought to see a moderate fall at the start of 2008, new start-ups have played a significant part in offsetting de-emptions by some of the market’s larger players.

As well as cutting 2008 capacity on Lloyd's syndicates, a number of the market's listed insurers have already begun to hand capital back to shareholders - a pattern likely to continue this year...

Alongside access to international risks, and the Society's A+ Standard & Poor's (S&P) rating, the lower capital requirements of operating at Lloyd's are one of its key attractions to new entrants and acquirers of existing businesses.

With six significant M&A deals in the Lloyd's sector since the takeover of Wellington Underwriting by Catlin Group in December 2006 - including two agreed transactions last month - the theme looks set to continue this year.

US insurer CV Starr & Co Inc has launched a Lloyd's energy syndicate with £30mn 2008 capacity in partnership with private equity firm First Reserve Corporation.

Renewable energy insurer GCube has opened for business offering up to $600mn cover per project, for onshore and offshore, with capacity provided by a consortium of Lloyd’s underwriters.

Aon Corp has continued to strengthen its European reinsurance arm as it prepares for the arrival of Geoff Bromley, the former chairman of Guy Carpenter’s European and Asian operations, next month.

Competition has forced reinsurance rate reductions of up to 15 percent at 1 January as the industry shows signs of reverting to its historic pattern of "feast and famine", according to leading market players.

The departures from Aon Natural Resources & Construction in London has continued with a number of key staff tendering their resignations recently, including Derek Thrumble.

New Marsh CEO Dan Glaser wasted little time in stamping his authority on the broker as the MMC subsidiary made its second management reshuffle in a matter of months as part of an organisational restructure to "improve efficiencies".

Cherkasky departure linked to activist; break-up pressures grow (again)