May 2007/2

Bermudian (re)insurer Validus Holdings Ltd has increased the size of its pending initial public offering (IPO) to $350mn following its $382.2mn acquisition of Lloyd’s based Talbot Underwriting Holdings.

Lloyd’s announced today (6 June) that it is to return to the debt markets with a benchmark issue of between £300-500mn in Tier 1 perpetual subordinated debt.

Munich Re is leading an innovative $110mn reinsurance programme for the World Bank-sponsored Caribbean Catastrophe Risk Insurance Facility (CCRIF), which goes on risk for 16 countries in the region today (1 June).

Shareholders in Alea Group Holdings (Bermuda) Ltd failed to support the increased offer from the US private equity firm Fortress Investment Group (FIN) in a vote on 21 May, but the company said the deal...

Hiscox’s chief operating officer and G6 chair Sue Langley is leaving the insurer to join Lloyd’s as director of Market Operations and North America.

Swiss Re is to sell the UK life operation it acquired as part of its takeover of GE Insurance Solutions (GEIS) in 2006.

Paris Re, the former reinsurance arm of AXA Re, has confirmed plans to list on the Paris based, European Stock Exchange, Euronext, a year after it was acquired by a consortium of private equity firms.

Rating agency Standard & Poor’s (S&P) has updated its insurance capital model to include an explicit allowance for diversification.

A temporary restraining order has been issued against Bermudian (re)insurer Arch Capital Group (Arch) over its poaching of a 30-strong property fac team from US rival General Reinsurance Corporation (Gen Re), The Insurance Insider can reveal.

Bermudian start-up Ironshore Insurance Ltd has confirmed its approval to write property, property catastrophe and casualty insurance on an excess and surplus basis in Florida, as first revealed by Insider Week on Monday (21 May).

Seven insurers have reached a $2bn settlement with World Trade Center developer Larry Silverstein bringing to an end more than five years of litigation between the parties.

Ironshore Inc has confirmed its entry into the professional liability sector with a US platform, a move predicted by The Insurance Insider earlier this month.

Shareholders in Alea Group Holdings (Bermuda) Ltd will vote on an increased offer from Fortress Investment Group (FIN) next Monday (21 May) of 96.5p a share as the reinsurer's suitor attempts to fend off a rival bid.

The industry’s thirst for alternative reinsurance capacity continues to grow with the $120mn issue of notes under a $500mn shelf programme providing Swiss Re with retrocession cover for Japanese typhoons.

Smaller shareholders in Alea Group Holdings (Bermuda) Ltd may have got their wish with the news that the failed reinsurer has received an approach that might lead to a higher offer than the 93p a share offered by Fortress Investment Group (FIN).

Bermudian start-up Ironshore Insurance Ltd has taken its first step to a US presence after being approved to write property and catastrophe insurance on an excess and surplus basis in South Carolina.

Bermudian (re)insurer Validus Holdings Ltd has agreed terms for its acquisition of Lloyd’s based Talbot Underwriting Holdings, as predicted by The Insurance Insider.

RenaissanceRe is set to launch a second Starbound Florida-dedicated sidecar as evidence emerges that the impact of the state's hurricane catastrophe fund expansion earlier this year may be less severe than first feared.

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

Faced with falling rates, insurers are increasingly looking to capture control of their distribution by buying brokers and agencies. But, with competition from other acquisitive brokers and hungry private equity investors, all this is doing is chasing up

Munich Re continued the trend for (re)insurers to buy brokers and agents to increase control over distribution with its acquisition of UK intermediary Bell & Clements Group this month.

US-based brokers Arthur J Gallagher & Co (AJG) and Hilb Rogal & Hobbs (HRH) disappointed analysts with first quarter profits down on expectations last month as the top line suffered from the impact of declining insurance rates.

First quarter results from the big three brokers met with a mixed response, as Aon and Willis found favour for growing revenues and profits, while Marsh & McLennan Companies, Inc (MMC) traded down on sluggish results.

It was a long time coming, but Brit Insurance finally confirmed the sale of a controlling stake in its electronic trading platform RI3K to a consortium including ICAP founder Michael Spencer, and hedge fund giant Eton Park LLP.

Strong earnings but falling top-line figures were the dominant features of first quarter results from Bermuda’s public (re)insurers as pipeline profits from the end of the hard market were countered by growing signs of softening underwriting conditions.

The latest developments in the international (re)insurance market

In a further sign of dramatically changed supply conditions in the retro market, rates for Industry Loss Warranties (ILWs) have slumped 30 percent since 1 January 2007, according to Montpelier Re chairman and CEO Tony Taylor.

Latest developments in the London (re)insurance market

The Bermudian (re)insurer Validus Holdings Ltd is set to complete the acquisition of Lloyd’s based Talbot Underwriting Holdings, as first revealed by The Insurance Insider.

If reports are true, Patrick Snowball’s decision to reappear at Towergate is masterful. Snowball was widely thought to have fallen out with his Aviva colleague Andrew Moss

RITC Syndicate Management, the Lloyd’s start-up syndicate headed by former Markel Intl chief executive Nigel Rogers, has yet to do its first transaction but has nevertheless brought fresh capacity to the sector.

Lockton Companies Inc burst onto the UK shores in November 2006, with the Stone Point Capital-backed acquisition of Alexander Forbes International Risk Services (AFIRS) and immediately claimed the title of largest privately-owned global insurance broker.

European giant Allianz has launched a UK High Court counterclaim against the North Korean state insurer over a controversial EUR45mn reinsurance dispute.

Warren Buffett has signalled his intention to undertake a large acquisition, saying that Berkshire Hathaway Inc (Berkshire) has more cash than investment opportunities.

US insurers Chubb Corporation, The Hartford and WR Berkley reported profits up and premiums down for the first quarter of 2007, while the longevity of Travelers’ continued growth was also questioned.

Lloyd’s insurer Managing Agency Partners Ltd (MAP) announced last month that its founder David Shipley would be stepping down from Syndicate 2791 at the end of the year with his colleagues Richard Trubshaw and Aidan Kong becoming the named and deputy unde