May 2006/3

MMC chief executive Michael Cherkasky pointed to the green shoots of recovery in his company's first quarter results on 3 May, but it was also apparent that the global brokers are still operating in a brutally tough trading environment.

Willis Group Holdings Ltd reported on the 3 May net income of $140mn, or $0.89 per share, for the first quarter of 2006, more than double the $67mn, or $0.41 per share, recorded in the prior-year period.

Some of the aura attached to Aon Corp's impressive share price performance in the last year was undone last week after the broking giant narrowly missed analysts' earnings estimates in its first quarter results.

Boston-based insurance giant Liberty Mutual Group engaged in kickbacks and bid-rigging to boost sales, according to lawsuits filed by the New York and Connecticut attorney generals last week.

Troubled Bermudian reinsurer PXRE Group Ltd has been deluged by shareholder suits alleging that the company misled investors by hiding the full impact of last autumn's hurricanes in its initial loss estimates.

Despite unveiling hurricane losses of $3.4bn for last year, Berkshire Hathaway Inc said it remains committed to writing catastrophe (re)insurance.

Beazley Group plc's head of property Jonathan Gray has called for a back to basics approach to catastrophe underwriting last week, advising underwriters to rely more on their common sense and not to become slavishly dependent upon catastrophe models.

Last autumn's record hurricane losses have spurred a sea change in approaches to underwriting catastrophe risk and the use of modelling techniques, said panellists at a market briefing hosted by The Insurance Insider in London last Friday (5 May).

The trade association for Lloyd's insurers was accused of a "thinly veiled attempt to reduce London brokerage levels" last week as the war of words over broker remuneration broke out once again.