July 2009/2

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.

Validus Holdings saw net income climb by $61.6mn or 81.2 percent year-on-year to $136mn for the second quarter, as it benefited from strong net unrealised investment gains.

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.

Brit Insurance Holdings said it was enjoying organic growth in its three main trading divisions while again reassuring investors on the development of its sub-prime/financial liability exposures.

Despite the Willis Group more than doubling second quarter net income from $39mn to $87mn, the sluggish performance of the firm's North American business highlighted the difficult conditions faced by brokers in the US insurance market.

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.

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.

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.

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.

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.

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