June 2013/2

The Insurance Insider tracks all the notable P&C sector share prices of the last week and compares year-to-date performances

Willis is facing yet another class action suit stemming from its involvement with the disgraced financier Allen Stanford.

The US Second Court of Appeals has ruled that Chubb subsidiary Federal Insurance Company is not obliged to pay out on an excess layer of directors' and officers' (D&O) cover purchased by Commodore International Ltd because the underlying layers had not been paid.

Toronto-based insurance holding company Fairfax has asked a US appeals court to revive an $8bn defamation suit against SAC Capital and four other hedge funds, marking the latest move of a longstanding dispute between the firms.

US authorities have published a rule that means that all US insurers, large and small, can be liquidated on the recommendation of the newly created Federal Insurance Office (FIO).

The vast potential of the undeveloped Chinese insurance market is being held back by the lack of a state cat-funding scheme that would enable insurers to provide more effective property cover.

Last week the New York Assembly passed a wave of bills that granted more rights to policyholders, including one that banned anti-concurrent clauses and let consumers sue for unfair claims practices.

Eyebrows were raised in the City last week as London market grandee Nick Prettejohn took on a role at the Prudential Regulation Authority (PRA) and surrendered only one of his two insurance directorships. If L&G is a conflict of interest, what about Brit Insurance?

Greater use of group supervision and group solvency modelling by regulators would not have spotted the crisis at AIG before its near collapse in 2008, according to one of its former executives.

Steven Cohen's hedge fund SAC Capital could face investor withdrawals of up to $3.5bn, or more than half the $6.75bn third-party capital it manages, according to recent reports.

Gen Re chairman and CEO Tad Montross said insurance linked securities (ILS) investors should question the idea that the asset class provides non-correlating returns, speaking at a Standard & Poor's insurance conference in New York last week.

Deutsche Bank is set to enter the insurance-linked securities (ILS) management sphere with a $100mn fund that will be led by managing director Michael Amor

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.