January 2008/5

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.

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.

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

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.

XL Capital's decision not to bail out Security Capital Assurance Ltd (SCA) and its financial guaranty insurance subsidiaries has led ratings agency Fitch to slash the bond insurer’s financial strength ratings from AAA to A.

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.

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.

US insurer The Hartford Financial Services Group has reported core earnings of $840mn, or $2.66 per diluted share, in the fourth quarter of 2007, a 22 percent increase on the same period in 2006.

Specialty insurance group Markel Corporation has improved on last year's record performance despite seeing its combined ratio rise, it reported in its 2007 results.

In a letter to shareholders Max Re chairman and CEO Marty Becker said the company would be looking to make acquisitions this year as it makes "economic sense" at this time in the reinsurance cycle.

Robert Brown has been appointed head of Aon's UK mid market business following the exit of John Thornton - a role in a competitive sector...

American International Group became the latest financial institution to bail-out a structured investment vehicle (SIV) when it came to the rescue of its $2.5bn vehicle, Nightingale Finance.

(Re)insurance shares recovered from a turbulent last week in the markets clawing back ground by close of trading on Friday (25 January) after falls caused by fears of a US recession.

Chinese insurer Ping An Insurance Co has revealed plans to raise up to $22bn in a public offering in order to fund mergers and acquisitions.

Further evidence of the softening market came with news that average US insurance renewal rates were down 12 percent in the fourth quarter, according to the US commercial insurance brokers association...

In what proved to another brutal week for the monoline insurers, the financial guaranty and credit (re)insurance specialist Assured Guaranty Ltd (AGL) took a $302.9mn after-tax unrealised mark-to-market loss...

A New York federal judge has approved a $13.5mn settlement to the securities class action launched by disaffected RenaissanceRe shareholders against the firm.

Run-off (re)insurer Alea Group Holdings is set to add to Lloyd's growing reinsurance-to-cose (RITC) capacity after receiving conditional approval to set up Syndicate 2740.

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.

Berkshire Hathaway's Swiss Re stake is a "vote of confidence" in its competitor but the potential dilutive effect of the "attached" quota share deal on the reinsurance giant's earnings per share (EPS), left analysts cautious.

Andrew Lothian, a senior member of Benfield Group's accident and health specialty team, is set to leave the reinsurance broker.

Zurich Financial Services Group has bought Turkish general insurer TEB Sigorta from TEB Mali Yatirimlar.

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.

Phil Moyles has joined the legions of ex-MMC executives at private equity firm, Stone Point Capital.

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.

After stop-start talks, specialist UK broker THB Group plc has finally completed its £8.5mn acquisition of PWS Holdings plc's Lloyd's business and overseas interests.

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.

Global broker Marsh has appointed Carrick Lambert as managing director of the Europe, Middle East and Asia (EMEA) financial institutions industry practice.

London-based reinsurance agency ForestRe Ltd has reached an agreement with four Lloyd's syndicates to underwrite the world's only forestry-focused portfolio.

Aon Re Global Fac has appointed Oliver Schofield as head of global strategy and a member of its executive committee.

JRG Reinsurance Company has become the latest reinsurer to launch on Bermuda, with $250mn of capital to write working layer reinsurance business for US specialty insurers.

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