June 2013/2

With Axis Capital and Lancashire both adding to their capital market teams last week, The Insurance Insider traces all the major moves by P&C (re)insurers to build alternative reinsurance operations

After a rampant nine months where many P&C (re)insurance stocks were re-rated upwards the sector has come under selling pressure in the second quarter, fuelled by concerns over falling cat reinsurance rates.

London market (re)insurers are likely to see their earnings squeezed as a result of declining catastrophe reinsurance rates, according to Numis Securities analyst Nick Johnson.

The nascent hardening of US P&C prices will dwindle by 2014 to set the stage for another soft market phase, Nomura analyst Cliff Gallant has warned.

Aon has reassured Lloyd's that it has no current plans to expand its 7.5 percent Berkshire Hathaway "Sidecar" facility after a series of meetings and discussions between senior executives at the firms.

The fact that an insurance specialist heavyweight investor such as Stone Point Capital does not have ownership of a Lloyd's insurer is a curious anomaly considering the enthusiasm with which more generalist private equity houses have rushed to Lime Street in the past decade.

Legacy acquisition and management firms are pondering the motivation behind run-off giant Enstar's decision to acquire Lloyd's managing agency Atrium for $263mn, a move that was first revealed by The Insurance Insider.

There is "no question" that the overall trend for reserve releases has moved downwards, with further adverse development expected in the near future, according to Siddhartha Ghosh, director at Standard & Poor's rating service.

The level of redundant reserves held by US P&C insurers has declined for the fifth consecutive year, according to research by analysts at Barclays Capital.

In a further illustration of the buyers' market that developed for Florida property cat reinsurance at 1 June the quoting variation between different markets significantly narrowed from 2011 and 2012, with the final terms coming in at the bottom of the spectrum and below.

The Texas Windstorm Insurance Association (TWIA)'s decision on which reinsurance option to select hinges on the financing structure it is able to put in place over the coming weeks.

Endurance CEO John Charman has launched a broad-ranging attack on the major facilities that the big three brokers are currently working on.