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May 2012/4

  • After a bright first quarter filled the sector with optimism, the return of the Eurozone crisis and fears of a disorderly Greek exit from the euro have brought (re)insurance stocks back to a gloomy reality this month.
  • Data is a key element of the internal model review process but the UK Financial Services Authority (FSA) is still developing how a data audit will be done and by whom, according to former head FSA insurance regulator Simon Kirby.
  • British Insurance Brokers Association (Biba) CEO Eric Galbraith has criticised the European Commission for considering mandatory remuneration disclosure for brokers and said that one-size-fits-all regulation for the financial and insurance industries is "utterly ridiculous".
  • Insurers and the Financial Services Authority are under pressure from the reduced time frame to approve internal models, the Association of British Insurers (ABI) warned last week.
  • Senior claims executives have warned that blanket reservation of rights on claims could not only alienate policyholders but could make the London market an unattractive insurance platform.
  • New York State regulatory authorities are to broaden their review of insurance lines beyond force-placed programmes once current hearings on homeowners' coverage are over.
  • Aon has been sued by contractors for the Kleen Energy gas and oil-fired plant over alleged deficiencies in the provision of liability cover for their joint insurance programme.
  • USAA has successfully gained $40mn annual aggregate cover against multiple US perils at a relatively high-frequency level from the cat bond market as part of its new $200mn Residential Re cat bond.
  • Global reinsurer Scor has increased the amount of event-driven contingent capital it can draw on following large natural catastrophe losses to EUR150mn, having triggered the first EUR75mn of its 2010 facility last year.
  • Capital market investors provide about 10-15 percent of the $220bn-$250bn of global catastrophe reinsurance capacity, according to estimates from brokers and bankers.
  • Long-term investors, including some of the largest hitters in the London market, will be among the biggest losers from Canopius' recommended cash bid valuing the company at £164mn.
  • (Re)insurers are likely to come under pressure to be more aggressive in their capital management over the next several months - with the usual caveat of the "no major catastrophes" assumption.