October 2006/4

Today's (20 October) $7bn deal between Equitas and Berkshire Hathaway lays a framework for reinsured Names and Lloyd's to achieve finality for pre-1993 liabilities and, if completed, nearly doubles the assets available to the run-off vehicle.

Few of the 34,000 Lloyd’s Names who reinsured themselves into Equitas in 1996 probably thought it would happen, but it is now possible they will receive a premium following today’s transaction with Berkshire Hathaway.

In a landmark transaction, Lloyd’s run-off vehicle Equitas has agreed a $7bn reinsurance deal with Berkshire Hathaway which, once completed, will bring finality to the vehicle.

Bermuda-based insurer Catlin Insurance Company Ltd had its A financial strength rating placed under review with negative implications by rating agency AM Best today (19 October).

The Swiss reinsurer Converium has agreed to sell its US operations to Berkshire Hathaway for $295mn, paving the way for a possible upgrade of the company.

Bermudian-headquartered Endurance Specialty Holdings is pulling out of the offshore energy market and parting company with Paul Upton, who ran the business out of its London subsidiary, The Insurance Insider can reveal.

The risk gap is widening for insurers who are taking less premium for more risk, leading to significant concern about sustaining their profitability levels, according to Aon’s ‘2006 European Property, Liability and D&O Report’.

US insurer Allstate Corp announced the next phase of its leadership succession plan on 9 October, with George Ruebenson set to take over from Thomas Wilson as president of Allstate Protection.

US reinsurers enjoyed a strong first half of the year, as rate rises in key property & casualty lines together with mild catastrophe losses contributed to favourable underwriting conditions, according to broker Benfield in its latest report on the sector.

The Salvage Arbitration branch of Lloyd’s Agency Department has appointed John Reeder QC as its appeal arbitrator.

Berkshire Hathaway chairman Warren Buffett has warned his senior managers against using “accounting gimmicks” to manipulate stock options in a memo.

Giant reinsurer Swiss Re has agreed to acquire General Electric’s GE Life businesses for £465mn, it announced on 13 October. Swiss Re said the transaction would provide further scale and infrastructure for Swiss Re’s Admin Re business in the United Kingd