July 2012/5

Major 2012 P&C mergers and acquisitions...

Valuations for (re)insurers in The Insurance Insider's P&C universe

Comprehensive analysis of the sector's share price performance, valuations and M&A data

UK insurance board members are not up to speed with preparations for Solvency II, according to a survey by big four accountancy firm KPMG.

Four years after its US government bailout, American International Group (AIG) still lacks complete and comprehensive regulation by financial authorities, a watchdog report has claimed.

A UK Court of Appeal decision on an asbestos-related legal dispute that spans the UK and US has highlighted the importance of insurers securing their first choice jurisdiction in disputes.

Sinochart, a Chinese ship charterer embroiled in a $178mn subrogation dispute with Norwegian marine insurer Gard, has won the right to bring the Japanese sub-charterer Daiichi Chuo Kisen and Chinese joint venture Ocean Line Holdings into the action.

Liz Frederick, the global head of insurance-linked securities (ILS) at Kane who was recently appointed managing director (MD) of Kane USA, has left the insurance manager.

The AlphaCat sidecars contributed $12.1mn to Validus' second quarter profits while the Bermudian reinsurer took a $5mn quarterly loss from the new PaCRe start-up, according to its strong Q2 results.

Lancashire wrote off $25mn in the second quarter for industry loss warranty (ILW) payouts related to the Costa Concordia disaster as ILW losses also hit its retro sidecar Accordion, the company's results showed.

Two diversifying cat bonds significantly increased during the marketing process, adding $575mn to the insurance-linked securities (ILS) issuance tally for 2012.

Amlin has reclaimed the highest premium to tangible book value in our P&C universe. The (re)insurer's crown slipped last year after the sector's heavy cat losses and the poor performance of its continental acquisition, ACI.

Aviation rates were on average 17 percent lower on a risk-adjusted basis in the first half of the year, Aon's latest aviation report shows.

The mis-selling of Arch Cru funds is not expected to create a large loss for the London market due to per claimant deductibles, industry experts say.

Property cat reinsurance prices will fall by 5-10 percent in 2013, as strong expected growth in the insurance-linked securities (ILS) market is likely to depress rates and pose a challenge to traditional reinsurers, Credit Suisse analyst Michael Zaremski said in a 24 July research note.

The cost of insuring against default by Europe's largest (re)insurers dropped rapidly at the end of last week after European Central Bank president Mario Draghi inspired hope of more activist central bank policies.

Investors will be looking to the results of Endurance Specialty, American Financial Group and PartnerRe this week for further positive signs on crop exposures after Ace provided significant reassurance on 24 July.

Although non-US (re)insurers were insulated in the main from the significant second quarter catastrophe losses that were largely retained by US primary carriers, there were examples of loss creep on prior-period losses.

The benign second quarter for catastrophe losses helped the majority of Bermudian reporters-to-date comfortably beat earnings expectations as the Q2 results season picked up in earnest last week.

Brit Insurance announced strong results last week - including a 93 percent combined ratio and a five-fold lift in profits - but CEO Mark Cloutier was quick to dampen any suggestion that the firm's private equity owners might be tempted to seek an earlier exit than initially planned.

The Bank of England, which is soon to take responsibility for insurance regulation, should appoint a new deputy governor to oversee non-banking financial services companies including insurers, Hiscox CEO Bronek Masojada has said.

After posting 7 percent organic growth for the second quarter of 2012, Aon CEO Greg Case has said that he expects Aon Benfield to continue growing at 4-5 percent on an underlying basis in coming quarters.

Novae Group is expected to tell shareholders later this week that it is exiting engineering and materially reducing its motor excess of loss (XoL) reinsurance book after defections at its Zurich subsidiary.

The troubled Italian medical malpractice market has lost another capacity provider after its national regulator ruled that Romanian firm City Insurance had contravened the rules on passporting, The Insurance Insider understands.