January 2008/5

January has continued to be a record month for derivatives trading platform Insurance Futures Exchange Services (IFEX), with a further 701 lots, or $7,010,000 of (re)insurance limit, traded last week.

German financial services giant Allianz AG's pre-announced EUR10.8bn of 2007 operating profit, prompting analysts at Keefe, Bruyette & Woods (KBW), to revise their forecast for the firm from Underperform to Market Perform.

A long-running lawsuit filed by Massachusetts State over a fatal tunnel collapse and numerous leaks and design flaws in the massive Big Dig highway project has been settled.

The US state of Massachusetts has issued subpoenas to ailing financial guaranty insurers Ambac Financial Group and MBIA Inc seeking disclosure on their exposure to sub-prime investments.

Predicted sub-prime losses for insured management and professional lines have shot up to $9bn from an earlier $3bn as notifications and class action lawsuits continue to mount, according to Bear Stearns analyst David Small.

Bermudians Arch Capital and RenaissanceRe Holdings have emerged as the companies courting Lloyd's insurer Heritage Underwriting Agency, according to sources.

US insurance giant American International Group (AIG) has announced five appointments in an executive reshuffle.

UK consolidator Towergate Partnership has bought Scottish broker, McAra Associates Ltd, together with the mortgage payment specialist, British Insurance.

The judge in the trial of five executives charged with transacting an allegedly sham finite reinsurance contract between General Re and American International Group (AIG) rejected the defence's motion for a mistrial last week.

The biggest fraud in investment banking history, at French bank Société Générale, is unlikely to translate into a large insured loss because it did not buy unauthorised trading cover, according to senior market sources.

Lloyd's has confirmed underwriting capacity at 1 January 2008 of £15.95bn, only fractionally down on the £16.1bn the market began 2007 with.

Troubled XL Capital's downgrade to A by both AM Best and Fitch Ratings late last week would limit its competitive position, particularly in US casualty business, analysts have warned.