October 2006/4

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.

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.

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).

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 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.

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’.

AXA Group announced today (16 October) that it had agreed to acquire Greek insurer Alpha Insurance for EUR225mn.

Wellington Underwriting plc is “highly likely” to join its Lloyd’s rivals Amlin plc, Hiscox plc and Omega Underwriting Holdings plc by opening a Bermudian operation by the end of the year, according to Numis Securities’ analyst Nick Johnson.

Despite making significant progress over the last decade Lloyd’s run-off vehicle Equitas is “not out of the woods yet”, according to Marcus Rivaldi, a director at Standard & Poor’s (S&P).

Benfield Group’s unexpected profits warning today (16 October) is likely to focus attention on the firm’s new Corporate Risk division which has found the going tougher than expected.

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