March 2008/2

Lloyd’s (re)insurer Advent Underwriting Ltd has been dealt a blow by the sudden resignation of the chief underwriting officer of its Syndicate 780, Lloyd Tunnicliffe.

A US federal appeal judge last week upheld the decision by Florida’s insurance regulators to bar Allstate Corp from writing new business in the state.

Berkshire Hathaway is under pressure from federal prosecutors to oust Joe Brandon, the CEO of its reinsurance subsidiary General Re, following criminal fraud convictions of four of his former colleagues earlier this year, according to reports.

Lloyd’s is being urged to tackle its complicated capital structure amid a “rare” opportunity to reform the legislation which governs the marketplace.

Lloyd's has reported a profit of £3.846bn for the 2007 financial year - a 4 percent increase on its 2006 figure of £3.662bn, despite a softening market.

Xchanging management are cashing in investments in the outsourcing firm ahead of changes that effectively increase capital gains tax on 6 April.

Venture capital firm 3i has acquired a £50mn stake in the UK-headquartered broking firm Hyperion Insurance Group Ltd, as first revealed by the The Insurance Insider.

Bermudian Argo Group International Holdings Ltd has agreed a 154p a share cash offer to buy Heritage Underwriting Agency plc in a deal that values the Lloyd’s insurer at £136mn on an ex-dividend basis.

Miller Insurance Services Ltd has launched a Singapore-based broker as it seeks to take advantage of the country’s rapid underwriting growth.

Venture capital firm 3i has acquired a stake in the UK-headquartered broking firm Hyperion Insurance Group Ltd, The Insurance Insider can reveal.

Aspen Insurance Holdings Ltd has become the latest Bermudian to establish a Lloyd’s presence with the launch of start-up Syndicate 4711.

UK-listed run-off consolidator Tawa plc is part funding its acquisition of failed Bermudian PXRE Reinsurance Company with $14.4mn investment from a trust owned by billionaire steel magnate Lakshmi Mittal family members.

American International Group (AIG) has filed a lawsuit against its former CEO and chairman Maurice “Hank” Greenberg as part of its long-running legal battle over ownership of shares in the US giant.

Fitch Ratings move to downgrade ratings on Security Capital Assurance Ltd (SCA) and its bond and financial guarantee (re)insurance subsidiaries to junk bond status may weigh on affiliated Bermudian (re)insurer XL Capital, according to analysts.

Aon Limited deputy chairman Jonathan Palmer-Brown has been elected as chairman of the London Market Insurance Brokers’ Committee (LMBC).

US broker Arthur J Gallagher & Co has completed the $40mn divestment of its reinsurance arm to Aon Corp.

Mandatory disclosure of commissions for brokers has been highlighted as a possible solution to the issue of transparency, the Financial Services Authority (FSA) has revealed in its latest discussion paper on insurance intermediaries.

French insurance giant AXA’s UK subsidiary has taken formal control of broker SBJ Group after getting the green light from shareholders and UK regulator the Financial Services Authority.

Chubb insures the primary layer of the Marsh-placed $75mn directors’ and officers’ (D&O) programme for beleaguered investment bank Bear Stearns, The Insurance Insider can reveal.

Newly-redomiciled Lloyd’s (re)insurer Hardy Underwriting Bermuda Ltd reported record 2007 pre-tax profits of £18.3mn.

Troubled Bermudian giant XL Capital has gone outside the firm to name Michael McGavick as CEO in place of Brian O’Hara.

Arch Capital Group Ltd is to form Gulf Re, a Dubai-based $400mn capitalised reinsurer, in a joint venture with the Gulf Investment Corporation.

Montpelier Re Holdings Ltd has appointed Christopher Harris to succeed founding CEO Tony Taylor who is stepping down this summer.

The future of Bear Stearns hangs in the balance after JP Morgan and the Federal Reserve Bank of New York stepped in with an emergency funding package to bail out the beleaguered investment bank.

German financial services giant Allianz AG's expects to take a pre-tax hit of EUR200mn following European Windstorm Emma, it revealed today (13 March).

Benfield Group’s share price slumped in early trading today as the enervating effects of the weak dollar took its toll on the firm’s 2007 results.

After more than doubling net written premium and more than trebling after-tax profits in 2007, Bermuda-based Omega Insurance Holdings Ltd expects further profitable growth in 2008.

Disgraced “Sheriff of Wall Street” Eliot Spitzer has resigned as New York Governor over his links to a prostitution ring.

Despite a heavier burden from natural catastrophes, Hannover Re saw operating profits rise 14 percent to EUR940mn, boosted by strong performance in its life and health division.

Shares in Lloyd's insurer Heritage Underwriting Agency plc closed up 13 percent to 131.5p today (11 March), fuelled by strong results and takeover speculation.

The US Federal Reserve has taken further strong action in a bid to ease fears of a freezing up of credit markets that has sent US financial stocks on a downward spiral in recent days, and led to fears of a squeeze on insurance linked securities (ILS) dema

Embattled New York Governor Eliot Spitzer has been told he has just 48 hours to resign or face impeachment.

Berkshire Hathaway Inc has exited its 16.3 percent stake in White Mountains Insurance Group Ltd in a deal that sees the Bermudian insurer pay $751mn in cash and transfer two of its run-off units to the investment giant.

Buffett goes long on derivatives; Fairfax profits from credit bets; DIFC extends international attractions; AM Best stable on reinsurance; IRS captives tax u-turn...

The Financial Services Authority (FSA) is reviewing claims handling in the UK run-off market but denies this reflects concerns about standards among some legacy insurers.

RSA has sold Guildhall Insurance Company to Enstar Group in a move that continues the group’s disposal of its legacy business.

Insurance specialist law firm Ince & Co has made a number of senior appointments following the decision of senior partner Peter Rogan to step down this month.

Allianz Global Corporate and Specialty (AGCS) has set up a Global Discontinued Business division to handle its vast legacy liabilities, The Insurance Insider has learnt.

Stephen Matanle, the long-standing Marsh executive who left the firm last month as part of a widespread restructuring, has joined Libero, the new Lehman Brothers business which is spearheading collaboration...

The UK broking sector is set for further M&A activity after consolidator Giles Insurance Brokers Ltd was handed a £500mn acquisition fund following private equity fund Charterhouse Capital Partners' buyout of the firm.

Marsh & McLennan (MMC) CEO Brian Duperreault has taken further steps to assemble his senior lieutenants around him in New York with key changes at reinsurance broking subsidiary Guy Carpenter.

Ariel Re's specialist Lloyd's (re)insurer Atrium Underwriting is in another dispute with the North Korean state-owned insurer, this time over a train crash claim.

The future is uncertain for nearly three quarters of Gallagher Re’s 250 employees following the deal worth around $40mn to sell the unit to Aon Corp.

US property catastrophe specialist RenaissanceRe has slashed its Californian earthquake exposures by 75 percent because it believes rates no longer reflect the risk of a major catastrophe.

Lloyd's brokers and underwriters will once again be allowed to invest and own each other if proposals to amend the Act governing the market are ratified later this year.

Shares in Australian (re)insurer QBE Group slumped after the company missed analyst profit estimates for 2007, raising questions over its rapid expansion strategy.

Full-year results from early reporting Lloyd's insurers yielded bumper profits that were tempered by soft market warnings and cycle management strategies.

Bermudian-headquartered run-off company Alea Group Holdings' has reported deterioration in its reserves of around $30mn, largely relating to its North American reinsurance portfolio, in its 2007 results.

In an important ruling, the UK’s Court of Appeal has overturned last year's decision in the "follow the settlement" case between reinsurers WASA International Insurance Company Ltd (WASA) and AGF Insurance Ltd against...

As Ron Sandler, chairman of Bermudian insurer Ironshore Ltd and the former CEO of Lloyd's, takes the helm at newly nationalised UK bank, Northern Rock, the bank's directors' and officers' (D&O) policy looks set for a total loss.

Venture capital firm 3i Quoted Private Equity Ltd (3iQPEL) has acquired 1.7 million shares in AIM-listed UK broker Jelf Group plc, taking its stake in the firm to 27.9 percent.

Towergate's executive chairman Peter Cullum is reportedly in talks with private equity group Candover over the potential sale of a 25 percent stake in the intermediary.

American International Group's (AIG) assertion that the giant $11.12bn pre-tax write down on its credit default swap (CDS) book will reverse over time has done little to arrest the sharp slide in its share price.

A surge of reinsurance-to-close (RITC) deals is set to slash the number of open years at Lloyd's, providing finality for third party investors including the legions of Lloyd's Names who underwrote on the syndicates now effectively in run-off.

Rod Fox has teamed up with his former EW Blanch colleague Ted Blanch to launch a "private boutique" reinsurance broker to compete on large account business with Benfield, Guy Carpenter and Aon.

John Cavanagh, joint CEO of reinsurance intermediary RK Carvill, has moved to Bermuda in a bid to increase the firm's distribution on the island and further expand into the US market.

Lloyd's insurer looks poised to become the next overseas acquisition with new interest from Bermudian predators

Brokers are becoming embroiled in the West’s growing scrutiny over overseas business standards

New York state governor and former attorney general Eliot Spitzer has been caught arranging to meet a high-priced prostitute at a Washington hotel last month, according to reports from the New York Times.

A significant reduction in the UK's run-off market has driven a EUR2bn decrease across Europe, according to a recent survey.

Our monthly column keeping a check on recent US and EU legislative and regulatory developments, in association with Sidley Austin LLP

Listed Bermudian run-off firm Enstar Group Ltd reported a drop in its full-year profits last year despite increasing its assets by over 30 percent.

A US jury has returned a verdict of guilty on all counts in the trial of Gen Re and American International Group (AIG) executives over a sham $500mn finite reinsurance contract between the two companies.

Willis captive manager Ken MacKay has been arrested for allegedly embezzling more than $2mn from the broker and its clients.

Aon has brought a negligence case against Reynolds Porter Chamberlain (RPC) following Standard Life's claim against the broker.

German reinsurance giant Munich Re is approaching the capital markets for the second time in a month, with a EUR150mn European windstorm cat bond, Queen Street, our sister publication Trading Risk revealed.

Fast track legislation to scale back the Florida Hurricane Catastrophe Fund (FHCF) was expected to receive early attention as the state's full legislative session convened on 4 March.

Swiss Re's 20 percent, five-year P&C quota share reinsurance deal with Berkshire Hathaway continues to intrigue, despite the Zurich-headquartered reinsurer providing greater detail with its 2007 results last month.

French insurance giant AXA's UK subsidiary has continued its acquisitive march through the UK broking landscape with an accepted offer to buy 100 percent of broker SBJ Group Ltd for £158mn.

Former RenaissanceRe executive Michael Cash is planning a return to the market with the launch of a new, unrated reinsurance vehicle, Juniperus Partners.

UK takaful start-up finally poised for launch; Amlin: Holt will return; S&P boosts Novae over mooted legacy spin-off; Omega maintains profit record; Marine in Aon job cuts spotlight...

The future for XL Capital affiliate Security Capital Assurance (SCA) looks untenable, as shares in the monoline insurance company plummeted to a 52-week low of just 67 cents.

Bermudian (re)insurer Max Capital Group has purchased two seasonal maximum hurricane derivative contracts for North Atlantic and Florida wind on the Chicago Mercantile Exchange (CME) which are based on the Carvill Hurricane Index (CHI).

Benfield has lost part of the prized Amlin reinsurance account to rivals Aon and Guy Carpenter, The Insurance Insider understands.

Shares in XL Capital have continued their steady decline as doubts linger over the Bermudian's sub-prime related exposures and its long-term strategy and leadership.

Investors looking beyond capital repatriation for share price momentum when 2007 results are published

A New York-based hedge fund is continuing its counterclaim against Fairfax Financial Holdings, accusing it of avoiding paying $400mn in taxes, despite a judge dismissing it from the Canadian firm's racketeering lawsuit.