July 2011/4

Second quarter results from US insurers are showing the pressure of tornado claims as a trio of firms reported in July.

New Zealand's Earthquake Commission failed to renew one of its multi-year reinsurance contracts at the July renewals and had to source the cover on an annual basis, according to local press.

Offshore haven Jersey will not implement Solvency II when the new regime is launched at the start of 2013.

Rivalry has intensified between competing Transatlantic Re bidders today (26 July), with Allied World describing Validus' offer as "desperate", "financially driven" and "opportunistic".

Lloyd's underwriter Hardy will cease writing high net worth insurance from 2012, just three underwriting years after it set up a team to target clients with large personal wealth, The Insurance Insider has learned.

The winding up of the liabilities of insolvent UK insurer Highlands Insurance Company (HUK) will enter its final stage next month, as reinsurance cedants will have the chance to vote on a proposed scheme of arrangement.

Tokio Marine Europe Insurance Limited (TME) has filed a motion in a New York court aimed at protecting a scheme of arrangement agreed with its UK creditors.

Financial watchdogs the Financial Stability Board (FSB) and the Basel Committee on Banking Supervision are asking for input on their proposals on how to supervise systemically important financial institutions.

Regulatory actions against financial firms have begun to decline from the zenith of the post-financial crisis litigation frenzy, according to a report by analytics firm Advisen.

The International Association of Insurance Supervisors (IAIS) is seeking comments on its proposals for a new supervision framework that will set out how regulators should oversee international insurance firms.

The Financial Services Authority (FSA) will not need to turn to the new Bribery Act to enforce anti-corruption measures, as the almost £7mn fine it imposed on broker Willis last week showed.

The number of commercial cases launched in the UK High Court in 2010 fell by nearly a third year-on-year, but this is likely to mask a high number of out of court disputes, according to City law firm Reynolds Porter Chamberlain (RPC).

Insurance specialist law firms Beachcroft and Davies Arnold Cooper are to merge under the banner of DAC Beachcroft on 1 November.

Glacier Re, the Swiss-based reinsurer currently in run-off, could reclaim $27mn from a cat bond it sponsored in 2008 to help pay $175mn estimated net losses from 2008's Hurricane Ike.

Three diversifying cat bonds are currently in the market and are likely to be welcomed by the specialist investors who have endured an unusually quiet run-up to the hurricane season and are keen for non-US wind exposures.

Capital market reinsurers could gain an edge on their traditional competitors in the European market as economic instability grows, broker Aon Benfield Securities said in its quarterly report on the insurance-linked securities (ILS) market.

Regulators praised the stability of European insurers as they released stress test findings this month but investor confidence ebbed and flowed ahead of a key political decision on the Greek debt crisis towards the end of July.

Munich Re has identified "growth and maintenance of broker relationships" as being "critical to success" in its overall P&C strategy, while also highlighting the increasing importance of the US to its strategy.

Marsh & McLennan Companies (MMC) held its position at the head of the league table of the top 20 global brokers based on 2010 total revenue figures, despite modest erosion of its market share.

Specialist insurance broker BMS Group plans to buy out its only external shareholder, fellow Lloyd's broker AHJ Holdings, with the help of a £10mn credit facility.

Diversified financial group BB&T has reported strong earnings for the second quarter of 2011, with a 46 percent year-on-year increase in net income.

Falling contingents, increased expenses and continued organic retrenchment pushed expansive US retail broker Brown & Brown's second quarter net income down more than 10 percent.

US insurance giant Travelers reported a $364mn quarterly net loss, as tornado losses contributed to more than $1.67bn in pre-tax cat costs for the firm - equivalent to its exposure to a 1-in-100 year hurricane.

Chubb reported an almost 20 percent year-on-year drop in second quarter net income to $419mn but managed to remain in the black - and beat the Wall Street consensus - despite the recent spate of deadly tornadoes.

Second quarter catastrophe losses and deteriorating estimates from events in Q1 have pushed Platinum Underwriters Holdings to a $20.4mn net loss for the period, taking the reinsurer's deficit for the first half of 2011 to $177.6mn.

The quoted Lloyd's (re)insurers have shrunk by an average of 11 percent in the past six months as a result of the brutal roll-call of 2011 catastrophe losses.

Beazley's $24.2mn half-year loss got a mixed reception from analysts last week, as the company reported a 108 percent combined ratio on major disaster losses of $183mn.

Transatlantic CEO Bob Orlich could receive $17.5mn under the change of control provisions of his contract if he leaves the reinsurer following a Validus takeover.

Pivotal Transatlantic shareholder Davis Selected Advisors has turned down the opportunity to become an "insider" on the TransAllied deal, The Insurance Insider understands.

Validus' pursuit of Transatlantic Holdings is growing increasingly hostile, as the Bermudian rejected a request to sign an agreement not to approach the US company's shareholders without its board's permission.

Peter Boardman, the co-head of BMS' newly launched Professional & Financial Services division, has resigned and is expected to re-emerge at rival London wholesaler, Lloyd & Partners.

American International Group (AIG) is beginning to show signs of recovery, but the US taxpayers' return from its rescue of the firm will depend on its long-term health and market conditions, according to a report from the US Government Accountability Office (GAO).

Steel magnate Lakshmi Mittal may contribute to the financing of Tawa's circa-$50mn attempt to buy Lloyd's managing agent Whittington, The Insurance Insider can reveal.

Annual average losses (AAL) computed by Eqecat's updated North Atlantic Hurricane model are down circa-10 percent overall compared to its predecessor.

With broad consensus pointing to hardening prices at the mid-year US property cat reinsurance renewals, there is also growing evidence of rate rises on underlying primary property business in the world's biggest insurance market.

Suncorp's loss notification for the second Christchurch earthquake has grown yet again, as the Australian insurer increased its loss estimate by A$500mn to A$2.1bn this month, The Insurance Insider can reveal.