July 2009/2

The Risk and Insurance Management Society (RIMS) has expressed "disappointment" and "concern" at the decision to allow broker AJ Gallagher to begin accepting contingent commissions again.

Aon and Willis reported flat and 1 percent organic revenue growth respectively in their core business for the second quarter, as a lingering soft market and difficult economic conditions combined to produce a challenging climate for the broking giants.

Hannover Re's latest catastrophe bond, Eurus II, closed yesterday (29 July), providing the reinsurer with EUR150mn of European windstorm cover and taking overall 2009 cat bond issuance to $1.8bn.

The House of Lords ruled that London-based facultative reinsurers Wasa International Insurance Company (Wasa) and AGF Insurance Ltd are not obliged to follow a settlement made in a US court.

Bermudian (re)insurer Aspen saw its net income drop from $126.9mn in the second quarter of 2008 to $110.4mn in Q2 2009, while its combined ratio jumped 8.9 percent year-on-year to 87.7 percent.

Joe Plumeri, chairman and CEO of broking giant Willis, has reiterated his firm's strong opposition to charging contingent commissions and stated that if the New York attorney were to re-enable the arrangements, Willis would not participate.

French reinsurer Scor’s net income for the first six months of the year dropped by 24 percent from H1 2008 to EUR184mn, as investment income dropped from EUR348mn to EUR 149mn.

Parkton Re Ltd, the cat bond put together for North Carolina's state wind pool, has become the latest 2009 issue to upsize as it increased from a planned $125mn to $200mn on closing.

A trio of Bermudian (re)insurers – RenaissanceRe, Montpelier Re and Endurance Specialty Holdings – booked higher Q2 net income bolstered by reserve releases and improving investment conditions.

The news this morning that AJ Gallagher has amended its deal with the Illinois regulatory authorities to enable the firm to again start charging contingent commissions is good news for the big three global brokers.

The big three global brokers have all seen their stocks trade upwards today following news that AJ Gallagher will be permitted to again enter into contingent commission arrangements from 1 October.

Lancashire Holdings expressed surprise at the markedly reduced demand for Gulf of Mexico (GOM) energy wind cover it experienced in the second quarter.