November 2008/2

Kevin Kelley has left his position as president and CEO of American International Group (AIG) subsidiary Lexington Insurance Company to take over as CEO of Ironshore Inc.

Independent reinsurance broker RK Carvill has announced that it is to cease placing or renewing any new treaty business incepting after 1 April 2009, The Insurance Insider has learned.

Omega Insurance Holdings Ltd has become the first quoted Lloyd’s (re)insurer to unveil plans to raise capital to take advantage of the sector’s improved trading prospects.

Lloyd’s managing agent RJ Kiln is to open a new Syndicate in 2009 for intra-group reinsurance as part of the Tokio Marine Group, The Insurance Insider can reveal.

UK finance ministry, Her Majesty’s Treasury (HMT) has convened a working group of ten top insurance executives to consider key issues facing the issue in the next 10-30 years and shape developments in the market, The Insurance Insider has learned.

Lloyd’s insurers writing US business face the challenge of finding additional capital in the New Year to support 2009 underwriting as a result of the dramatic swing in the $/£ exchange rate – even in the absence of expected hardening of rates.

Property Claim Services (PCS) has raised its estimate for onshore insured losses from Hurricane Ike by just over 30 percent to $10.655bn.

Swiss Re has withdrawn from negotiations with private equity firm CVC Capital Partners over its proposed purchase of Royal Bank of Scotland's (RBS) insurance assets, The Insurance Insider can reveal.

Hiscox Ltd, the UK quoted (re)insurance group, is building out its US operations with “10 key appointments” and plans to open four new offices in Lexington, Kansas City, Miami and Los Angeles next year.

Lloyd’s (re)insurer Hiscox has parted company with Robert Forness, the CEO-elect of its Bermuda subsidiary, The Insurance Insider has learned.

American International Group (AIG) has moved onto the next phase of its revamped US government bail-out with the launch of a vehicle to take on multi-sector collateralised debt obligations (CDOs) underlying...

The European Union Council of Economic and Finance Ministers (ECOFIN) has approved a Solvency II directive in which all reference to group support and group supervision has been cut...

Aviation pool Global Aerospace Underwriting Management (GAUM) leads the $47mn hull cover for the Air New Zealand-owned Airbus A320 that crashed yesterday (27 November) in Perpignan, The Insurance Insider understands.

Amlin plc is raising capital to form a new quota share syndicate for 2009 financed by Lloyd’s Names to take advantage of the improving market conditions, The Insurance Insider can reveal.

Fabrice Desnos, CEO of Credit insurance specialist Euler Hermes UK has told The Insurance Insider that an increasing number of risks “have become uninsurable in the strictest sense” and underwriters are having to be more selective...

The audacious hijacking of the Saudi supertanker Sirius Star 400 nautical miles off the coast of Kenya earlier this month upped the ante for piracy in the region and is causing hull, cargo and P&I underwriters to look closely at policy wordings...

The acrimonious defection of a UK construction team to London market broker RFIB Group has failed to wrestle the major Balfour Beatty civil engineering account, The Insurance Insider can reveal.

BMS Group has reached a settlement with former senior employees and rival London market broker CJ Coleman (CJC) over claims of conspiracy and gross breach of duty that it brought to the UK High Court on 24 November, The Insurance Insider has learnt.

American International Group (AIG) has slashed senior executive remuneration as a gesture to its new US political paymasters and in an attempt to speed the group to recovery, with CEO Ed Liddy earning a $1 salary for 2008-2009.

London-based captives and mutual manager Heritage has received the green light to establish Heritage Insurance Management (Bahrain) WLL (HIMB) on the Persian Gulf island kingdom Bahrain.

Private equity backed insurance group Hyperion is poised to take on Benfield Corporate Risk's (BCR) US wholesale property/casualty unit to its broking arm Howden, The Insurance Insider can reveal.

Eric Dinallo, superintendent of the New York Insurance Department, has pulled plans for the state to regulate credit default swaps (CDS) it considers insurance.

The timetable for implementing Solvency II is likely to be delayed to 2013 as the proposal for European-wide insurance regulation struggles in murky political waters and amidst the current financial turmoil.

BMS Group brought its claims of conspiracy and gross breach of duty against former senior employees, competitor CJ Coleman & Co (CJC) and its CEO David Merry to the UK High Court today (20 November).

Run-off provider PRO Insurance Solutions has become an accredited Lloyd's run-off broker, gaining full access to the London market accounting and settlement systems.

Legislation to reform the Lloyd’s Act 1982 officially came into force today (19 November) in a move that the UK government said will modernise the operation of the world’s oldest insurance market.

The Aon Benfield deal is due to close on 28 November after the final regulatory obstacles to the £844mn cash tie-up have been completed.

Amlin plc has predicted a strong rise in reinsurance rating levels as insurers look to retain less of their exposures, reversing the trend of recent years.

The Office of Fair Trading (OFT) has cleared Aon Corporation's proposed takeover of reinsurance broker Benfield Group, removing one of the final potential obstacles to the deal.

Zurich Financial Services Group (ZFS) posted a net income of $2.8bn for the last 9 months ending 30 September, a decrease of 32 percent on the same period last year.

Hurricane Ike, which made landfall as a category two hurricane over Galveston Island, Texas on 17 September after smashing Cuba and the Caribbean, confounded modelling agencies by forming much further west in the Atlantic than any other storm.

Lloyd's based (re)insurers Chaucer and Catlin, have each posted bullish outlooks for 2009 (re)insurance market conditions in respective interim management statements.

Outsourcing specialist Xchanging has said that revenue growth during the four months ending 31 October has been ‘slightly ahead’ of the board’s expectations in a bullish interim management, despite being ruled out of the bidding for the Lloyd’s messaging

The International Underwriting Association (IUA) has thrown its weight behind the proposed Lloyd's messaging hub and announced that it will take part in the pilot of the system, which is due to take place in early 2009 and go live later in the year.

Troubled Australian insurance group IAG has confirmed it is placing its Singapore-based Lloyd’s Syndicate 4455 into run-off and will also close its London-based Lloyd’s managing agent Diagonal.

Deciding the London structure for the combined reinsurance intermediary was always going to be awkward, but this morning senior brokers at the soon-to-be merged firm discovered their new lines of responsibility, The Insurance Insider can reveal.

Until recently, one would be forgiven for thinking the inmates had taken over the M&A asylum. While specialist Lloyd’s and Bermudian (re)insurers were (and indeed are) routinely trading at heavy discounts to their asset value – despite, in many cases, bei

With doom-mongers beginning to measure American International Group’s (AIG) future in terms of weeks as the inadequacy of its September government bail-out package became obvious, a revamped $150bn rescue looks to have bought...

Broker Willis Ltd is seeking investor support for a new industry sidecar, The Insurance Insider can reveal, indicating market sentiment for a hardening property cat market in 2009.

Royal Bank of Scotland’s insurance assets – which include Direct Line, Churchill, Privilege and the specialty insurer NIG – may now fetch less than £4.5bn, as private equity firm CVC enters into advanced talks with the bank...

Despite widespread proclamation of a market changing event, the evidence remains mixed...

Carpet-baggers and pre-emptions…

Shareholders funds at Hannover Re have shrunk by more than 20 percent from EUR3.3bn at the start of the year to EUR2.6bn at the end of September as the German reinsurer booked a Q3 net loss of EUR395mn...

Although investment losses combined with hurricanes led to widespread net losses reported for the third quarter – especially among Bermudians – the majority are still on course to deliver full-year profits...

Despite a moderate rally in its share price, the Hartford Financial Services Group has endured a miserable few weeks in which it reported a $2.6bn Q3 loss, a cut in earnings forecasts and an earnings call that left...

Amid feverish speculation at the beginning of October that Swiss Re was set to unveil drastic measures to ease liquidity pressures, the giant reinsurer did little more than post a relatively modest third quarter loss.

Bermuda’s invasion of Lloyd’s continued unabated as Flagstone Reinsurance Holdings ended its long search for a Lime Street platform with an agreement to buy Marlborough Underwriting Agency Ltd from Berkshire Hathaway.

The New York insurance authorities are again considering selling the insolvent Midland Insurance Company in a bid to improve the returns available to policyholders.

Christopher Droney, the federal judge who oversaw the trial of five former General Re and American International Group (AIG) executives, has ruled that their conspiracy led to huge losses for investors.

October was set to be the busiest month of the year for secondary trading of cat bonds, in part fuelled by hedge funds being forced to de-leverage amidst the financial turmoil.

Hannover Re is currently marketing the renewal of two sidecars, raising the question whether the quota share vehicle will regain popularity with (re)insurers if catastrophe rates continue to harden into 2009.

Arch launches $400mn Dublin hub; FHCF fears mount; Airline premiums up; Rock resigns from Ironshore; Spitzer charges dropped; Carroll to leave Swiss Re

A disagreement over the issue of mandatory commission disclosure was behind the October decision by the London Market Insurance Brokers’ Committee (LMBC) to break away from the British Insurance Brokers’ Association...

Volatility in the financial markets has led to significant fluctuations in the valuation of Lloyd’s listed vehicles – and potential suitors in the international property casualty (re)insurance industry.

FSA green light for Leadenhall; Aon Benfield unit takes shape; Cat futures leap

Bermudian-headquartered run-off specialist Enstar Group Ltd has fought off heavy competition and fears of wilting capital providers to win the race to buy Unionamerica Holdings Ltd, the discontinued UK-based operations...

Credit derivatives – famously described as “financial weapons of mass destruction” by Warren Buffett – came back to bite his Berkshire Hathaway investment conglomerate as its profits slumped 77 percent in the third quarter.

ILS issuance has been stalled by the credit crisis but further activity predicted; 2008 tally will be lower...

The insurance linked securities (ILS) market has performed well during the financial crisis, despite unexpected credit risk leaking into the cat bond structure.

The alternative investment approach taken by Prem Watsa at the helm of Fairfax has helped the Canadian combine navigate a safe passage through the troubled waters of the financial markets.

As Lloyd’s mulls its final decision on where to open regional operations in the Middle East, the market has delivered a clear verdict that it prefers Dubai as the location for the London market outpost to be located.

IT companies ATOS and IBM are now in a head-to-head battle to win the Lloyd’s messaging hub contract, after Xchanging was ruled out of the process.

A number of Lloyd's stocks have seen significant uplift in recent weeks as investors gamble on a 2009 ratings uplift fuelled by the AIG crisis.

ARC forms ICA group; R&Q wins double

Integro Ltd has reduced its employee headcount by almost a quarter as new chief executive Peter Garvey implements a cost-cutting drive at the independent insurance broker, The Insurance Insider can reveal.

Holt steps down; Brit pulls out of Augsburg Re binder; Jubilee hires new reinsurance director; London Fac moves; Brockbank returns; London 100 speaker calls bottom of crisis

It took Aon only four days to agree takeover terms with Benfield Group, but it has taken more than two months to finalise the delicate restructuring of senior London positions for the soon-to-be giant reinsurance broking combine Aon Benfield.

Expansive independent (re)insurance broker Cooper Gay & Co has hired a 10-strong aerospace team from Benfield’s London division.

Global broker Marsh has taken a $33mn charge in its Q3 2008 results after losing a legal dispute emanating from a political risk placement it made on behalf of US west coast energy group, Sempra to cover 1990s investments in Argentina.

A month that has seen the industry’s third quarter results has confirmed many market observers’ worst fears about the impact of Hurricanes Ike and Gustav and has prompted one major modelling agency to hint at a re-evaluation...

The “implosion” of 296 sub-prime mortgage lenders in relation to the credit crisis has led to 418 sub-prime and credit crisis-related lawsuits, including 124 securities class actions lawsuits (SCAS) filed to date...

Former Brit Insurance COO Kathy Lisson is set to be unveiled in a senior position at the European operations of QBE Group, The Insurance Insider understands.

Independent reinsurance broker RK Carvill concluded months of consultation with private equity firm Stone Point Capital with the separation of its underwriting and broking businesses in a corporate restructure...

As the financial world waits for President-elect Obama’s key appointments in the US Treasury, the attention of the (re)insurance industry once again turns to the taxation debate over offshore domiciles and the future...

The uplift in mergers and acquisitions activity in the Lloyd’s market over the last two years has contributed to a shift in the make-up of leading investors in the sector.

American International Group (AIG) has thrown financial incentives at key executives in a bid to prevent a talent drain.

With losses from Hurricane Ike continuing to eat into third quarter results, at least one area of the market looks set to benefit: Offshore energy rates.

The sluggish 2008 reinsurance market saw Guy Carpenter’s underlying revenues fall 10 percent at the third quarter from $226mn to $205mn, although the firm’s cost-cutting programme enabled the margin to remain unchanged.

Scottish Lion Insurance Company, the UK insurer in run-off that used to be run by AXIS Capital founder John Charman, is again looking to crystallise its liabilities via a scheme of arrangement.

Resolute Management Ltd, Berkshire Hathaway’s operation for managing its discontinued London market lines, will now be led by Steve Michael, The Insurance Insider can reveal.