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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.
  • Endurance will remain one of the few major Bermudians without a Lloyd's operation under its new leadership, but will look to substantially bulk out its London company market platform.
  • After 11 years at the head of Axis, there is a widespread expectation that Charman will want to lure some of the team that he assembled there across to his new shop, but it is unlikely to include Jack Gressier, after his employment contract extension today
  • Writers of property catastrophe reinsurance are going to struggle over the next couple of years due to excess capacity and the deleterious impact of third-party capital
  • Severe weather events in the US during May will cost insurers $4bn, Aon Benfield's Impact Forecasting unit estimated in its monthly Global Catastrophe Recap report.
  • The European floods that have impacted Germany and surrounding countries are expected to cause around EUR2.75bn in insured losses with circa EUR1.3bn falling to reinsurers, according to KBW analysis.
  • Investors' enthusiasm for the insurance sector was demonstrated again last week when Partnership Assurance closed up 17 percent in its first day of trading on the London Stock Exchange on 7 June.
  • The 1 June hull and machinery (H&M) and increased value (IV) renewal placement for loss-hit cruise operator Costa Crociere has settled with flat nominal pricing on the basis that the insured would not collect a no-claims bonus, The Insurance Insider understands.
  • Hiscox has appointed Jeremy Pinchin to the new role of CEO of Hiscox Re as it prepares to merge its reinsurance functions in London, Paris and Bermuda into a single business unit.
  • Senior casualty treaty underwriter Jim Quinn has left Brit Insurance to join Ironshore's Lloyd's subsidiary Pembroke, The Insurance Insider has learned.
  • The Lloyd's Market Association (LMA) has narrowed down a shortlist of candidates as it proceeds with plans to launch a new shared data capture service dubbed Project Genesis, The Insurance Insider understands.
  • Improved risk management and pricing discipline from reinsurers means sector investors should forget about waiting for windfall returns in hard markets and accept lower but more stable returns on equity (RoEs), Aspen CEO Chris O'Kane said last week.
  • Towers Watson has highlighted the impact that cheaper reinsurance is having on underlying US property insurance business.