October 2007/2

Zurich Financial Services Group (ZFS) has named ex-Converium Holdings CEO Inga Beale as head of organisational transformation and mergers & acquisitions with effect from 1 January 2008.

Insurance giant American International Group (AIG) reported operating results for the third quarter below analysts' expectations, compounded by losses in its AIG Financial Products (AIGFP) division, which suffered a $352mn pre-tax charge on credit default

Marsh & McLennan Companies, Inc (MMC) suffered a slump in its third quarter profits from its continuing operations, which fell to $80mn from $133mn in the prior-year period, the company reported today (8 November).

Roger Townsend, executive director of Xchanging Insurance Services (XIS), has dismissed market accusations that it is taking advantage of a monopoly over the market.

In the first transaction of its kind following Germany’s implementation of the EU Reinsurance Directive, Deutsche Rückversicherung AG (Deutsche Rück) has transferred all of its run-off business to its UK-based subsidiary.

Allianz continued its strategic stake-building in the UK distribution chain this month, with confirmation that it has acquired a 10 percent minority share of Yorkshire-based broker The Oval Group, as predicted by The Insurance Insider in September.

German insurance giant Allianz SE has issued EUR155mn and $65mn of European windstorm cat bonds through a newly created EUR1bn shelf vehicle, Blue Fin Ltd, as predicted by The Insurance Insider last month.

Bermudian Validus Holdings Ltd almost doubled third quarter profits from $69.7mn to $136.5mn year-on-year as it reported its first set of results reflecting the July acquisition of Talbot Underwriting.

Kamp Re 2005, Zurich Financial Services' (ZFS) catastrophe bond, hit by losses from Hurricane Katrina soon after its launch, is due to be tested within the next month, after the bond's administrators finally filed a proof of claim notice on 30 October.

European giant Swiss Re has forced analysts to backtrack on their earnings forecasts after its net income came in well ahead of predictions.

Kiln Ltd is to return £60mn of surplus capital to investors in a share buyback part-paid for by the sale of its 20 percent interest in US insurer WR Berkley’s European operation.

Tawa plc, the UK quoted run-off consolidator, has acquired the US firm PXRE Reinsurance Co (PXRE US) from parent Argo Group International Holdings Ltd in a $114mn transaction.

Goldman Sachs is set to launch a Lloyd’s syndicate for the 2008 year, as the banking sector continues to demonstrate a growing appetite for (re)insurance risk.

Bermudian Max Capital Group Ltd reported third quarter net profits of $66.8mn, up from $26.5mn, and gross premiums written of $223mn, compared to $177.9mn in the prior-year period as a significant deal in its life and annuity business boosted the top line

Bermudian insurance start-up Ironshore Inc’s American subsidiary has added to its US platform after completing the acquisition of admitted insurer Stockbridge Insurance Company from Folksamerica Reinsurance Company.

Stock in US insurance giant, American International Group Inc (AIG) continued its sharp slide in early trading today, losing 4.6 percent and reaching a new 52-week low as investor unease mounted over the group’s sub-prime investment exposures.

Low catastrophe losses drove Bermudian (re)insurer Aspen Insurance Holdings Ltd to a record quarter, it reported yesterday (1 November).

Run-off insurer Highlands Insurance Company (UK) Ltd will apply for insolvent administration at the High Court today (1 November).

Bermudian (re)insurer Endurance Specialty Holdings has reported a rise in income against a background of falling written premiums in the third quarter.

London market reinsurers led by Allianz have had their appeal dismissed against the striking out of significant parts of their defence in the controversial EUR44.3mn dispute with the North Korean national insurer.

Ratings agency Standard & Poor’s (S&P) has warned that if rates in most classes continue at their present level beyond mid-2008, then it may downgrade the outlook for a number of industry sectors.

Validus Holdings-owned Talbot Underwriting has become the latest Lloyd’s insurer to launch an Asian venture through the Corporation’s Singapore platform.

Broking giant Aon is to lose 2,700 jobs in another wide-ranging restructuring that aims to save an annual $240mn by 2010.

Spain’s largest (re)insurer, MAPFRE SA has agreed to buy Massachusetts-based non-life personal lines insurer The COMMERCE Insurance Company in a $2.2bn (EUR1.5bn) cash deal.

Cullum Capital Ventures (CCV), part of the Towergate group, has recruited two teams from troubled property services group Erinaceous.

“Class of 2005” insurer Lancashire Holdings Ltd said the third quarter had been its “best yet” with net income of $105.2mn up 100 percent from $52.6mn in the prior-year period.

Insurance specialists Edwards Angell Palmer & Dodge LLP (EAPD) and London-based Kendall Freeman have confirmed plans to merge the two law firms today (30 October), as predicted by The Insurance Insider last week.

Reinsurance broker Guy Carpenter is developing five different trading indices with the first European index looking to go live as early as six months time.

Bermudian-headquartered (re)insurer, AXIS Capital Holdings Ltd, has reported a 19 percent increase in operating income for the third quarter of 2007, capping eight straight quarters of "record profitability", according to its president and CEO...

Deccan Value Advisors LP, the hedge fund which specialises in buying firms that look under-priced, has continued to build its stake in the UK quoted reinsurance intermediary, Benfield Group.

Munich Re has bought the Lloyd’s insurer Beaufort Underwriting Agency Ltd through the acquisition of its parent company MSP Underwriting Ltd.

The threat of "economic populism" is one of the greatest challenges facing the US insurance industry, according to Property Casualty Insurers Association of America's (PCI) president and CEO David Sampson.

HSBC Insurance has launched a Dublin-based reinsurer to accept risks from the parent company’s banking customers.

Insurance specialists Edwards Angell Palmer & Dodge LLP (EAPD) and London-based Kendall Freeman are understood to be close to reaching a merger deal, sources suggest.

Giant reinsurer Swiss Re has signed an agreement to acquire some of Resolution plc’s life books from Standard Life plc for £2.35bn as it continues to build its Admin Re business.

The southern California wildfires, which have been raging across the region since 21 October, look set to cost (re)insurers between $900mn and $1.6bn in insured losses, according to the latest estimates from catastrophe modelling firm Risk Management Solu

German insurance giant Allianz SE is expected to launch a new issue of European peril catastrophe bonds through a newly created vehicle, Blue Fin Ltd, The Insurance Insider understands.

It may have been another benign year for US hurricanes, but IPCRe’s international book means it has inevitably taken a number of hefty non-US catastrophe losses, not least from the UK summer floods.

Michael Bright, the former chief executive of failed UK insurer Independent Insurance Group plc (IIG), has been jailed for seven years for his role in covering up one of Britain’s “worst commercial disasters”.

John Charman will stay on as CEO and president of AXIS Capital Holdings Ltd for at least a further year after the Bermudian (re)insurer extended his contract to 31 December 2009.

Brian O'Hara, president and CEO of Bermudian (re)insurer XL Capital has announced that he will retire from the post in mid-2008, drawing the current chairman, ex-Chase Manhattan Bank CFO Michael Esposito, to also announce his departure...

Bermudian reinsurers Everest Re and PartnerRe both reported third quarter results comfortably ahead of analysts’ estimates after benefiting from this year’s low US catastrophe losses.

Michael Bright’s lawyer has pleaded with a judge for clemency after being found guilty of fraud ahead of his sentencing tomorrow (24 October).

Amlin Bermuda (ABL) has been upgraded to A (Excellent) from A- (Excellent) by ratings agency AM Best after “conservative implementation” of its business plan and a strong performance from the group’s Lloyd’s syndicate.

Michael Bright, the former chief executive of failed UK insurer Independent Insurance Group plc, and two of his directors were behind bars today for covering up one of Britain’s “worst commercial disasters”.

Lehman Bros has been given the green light by the Financial Services Authority to begin trading at its subsidiary Libero Ventures Ltd - a new unit that aims to improve capital efficiency for (re)insurers by shifting exposures to the capital markets.

Brit CEO Dane Douetil will step down from his role as the head of the group driving London market process reform at the end of the year, he announced at an Insurance Institute of London lecture today (18 October).

New York insurance superintendent, Eric Dinallo, is spearheading new regulation that would remove collateral requirements for the highest rated foreign and non-New York reinsurers, stating that "we cannot afford to maintain outdated and unnecessary...

A US court has ruled that there was "misappropriation of Gen Re trade secrets" in connection with the defection of a team of the reinsurer's senior facultative (fac) executives to Arch Capital Group in April.

Analysts have reacted cautiously to Munich Re's $1.3bn planned purchase of US primary insurer The Midland Company (Midland).

Munich Re has launched a $260mn cat bond to cover earthquake risk for the East Japan Railway Company (EJRC), the first significant issue since the beginning of August

New market entrants are “critical to maintaining the attractiveness of the Lloyd’s market”, according to the Society’s Franchise Performance Director, Rolf Tolle.

The London market has missed its 60 percent third quarter target for usage of electronic claims files (ECF) by 15 percentage points, making the year-end target of 100 percent "more challenging", said the Market Reform Group (MRG) in a statement today.

Hiscox Ltd will not renew its $360mn sidecar Panther Re for the 2008 year, the company revealed today in a London Stock Exchange announcement.

Arthur J Gallagher International (AJGI) is set to launch a joint-venture onshore/offshore energy and utilities broking subsidiary headed by Simon Matson, who has resigned from Aon Energy.

Legacy business purchaser Ruxley Ventures has been given the green light to acquire the London branch of Italian giant Generali’s Swiss subsidiary, Generali Assurances Generale (GAG).

Details of Connecticut attorney general Richard Blumenthal’s lawsuit accusing Guy Carpenter of conspiring with reinsurers to fix prices and terms reveal an alleged catalogue of abuses involving binding authority programmes.

Tysers has bucked the trend for small to mid-size London broker sales to larger rivals and private equity investors, after completing a management buyout transaction it says will secure its independence.

Connecticut attorney general Richard Blumenthal has vowed to draw back the "cloak of secrecy" covering the "entire reinsurance industry" following the filing of an anti-trust lawsuit yesterday against global reinsurance broker Guy Carpenter.

Global reinsurance broker Guy Carpenter has pledged to “vigorously defend” a series of devastating allegations launched by Connecticut attorney general Richard Blumenthal who claims the intermediary violated...

Although Lloyd’s expects sub-prime related claims to be a fraction of the liability losses that hit the market as a result of Enron, WorldCom, laddering, and other corporate scandals of the early noughties...

The proposed Schemes of Arrangement for the 14 WFUM Pools Scheme Companies was sanctioned by the UK High Court on 17 September.

A facultative reinsurance team from London Market broker SBJ Group Ltd may follow the heads of the GCFac team that defected to rival Integro Ltd, according to legal documents obtained by The Insurance Insider.

Run-off purchaser Ruxley Ventures is expected to outline a pioneering financing technique at a business transfer court hearing this month for the firm’s proposed acquisition of Generali Assurances Generale (GAG).

JLT linked with FirstCity; Rivals 'seriously worried' after Towergate buys IT provider; Solicitors PI rates slide; Lightyear backs £135mn start-up Antares syndicate...

MMC effectively ruled out the immediate elevation of executive Phil Moyles as the next leader of its broking business, Marsh Inc, with a reshuffle of its senior executives last week.

As the official 2007 Atlantic hurricane season enters its final two months, speculation continues to mount over potential M&A activity, with players in the Bermudian (re)insurance market at its centre.

It was a familiar story from the remainder of Lloyd's insurers publishing interim figures in September.

Investment bank to structure adverse development cover ILS products

Run-off insurer Alea Group Holdings has received a one-time payment of $203.6mn to "fully and finally" commute all exposures with its Bermudian neighbour Max Capital.

Newly-listed Tawa plc said its first set of results since its initial public offering (IPO) on London's Alternative Investment Market were "on track".

Indemnity style triggers have become an established feature of insurance-linked securities (ILS) and the trend is likely to continue, predicted the president of Aon's capital markets division, Paul Schultz.

Illinois-based sports underwriter Pro Financial Services Inc was sold last month for $73mn - the equivalent of over seven times "base" earnings.

Bermuda is set to welcome Iron Re – a class 3 (re)insurer for corporate asbestos liability risk backed by hedge funds – according to documents seen by The Insurance Insider.

As reinsurance brokers and underwriters await the end of a so far sterile hurricane season to start serious negotiations over 1/1 renewals, warning signs of growing momentum behind the softening market continue.

The start-up Lloyd's insurer Ark Syndicate Management will add accident & health to its list of classes next year following its swoop for senior class underwriters at St Paul Travelers Syndicate 5000 and American International Group (AIG).

Major US insurer Metlife has secured a five-year non-cancelable contract to write the US National Basketball Association (NBA) sports disability insurance programme, according to senior market sources.

In a move that carries on the trend of multi-national companies relocating within Europe, US insurer Chubb Corp is to redomicile its European holding company from Brussels to London.

The trial of three former Independent Insurance executives is drawing to a close in London with the jury expected to start considering its verdict by 21 October, according to the Serious Fraud Office (SFO).

The trading of Industry Loss Warranties (ILW) has gained real momentum in the two years since hurricanes Katrina, Rita and Wilma, but critics say its development has been hampered by the high frictional costs...

With the majority of Lloyd's insurers set to cut back business for 2008, capacity scarcity was the overriding theme of September's auctions.

Despite asset-backed securities remaining persona non-grata in the financial markets after the sub-prime crisis, the emerging insurance-linked securities (ILS) sector should shrug off the current woes...

EU hints on intervention; Bermuda’s Maiden reinsurer poised for $500mn+ IPO; Court dismisses major US RICO suit; AmWINS withdraws IPO; Ariel Re buys US admitted carrier...

EU highlights conflict of interest in broker model; Long-term contracts can be anti-competitive...

Every time you put a gallon of petrol in your car, it has typically been bought and sold forty times beforehand.

When Benfield Group changed its mind in 2003 and floated on the stock exchange in London, rather than New York, its decision was widely applauded.

Despite the gloomy spectre of a soft market, Lloyd's 2007 interim results reflected the strong performance of insurers underwriting in the market.

The legacy of workers' compensation carve-out reinsurance - epitomised by the Unicover pool which collapsed in 1999 - re-emerged when CNA Financial Corporation agreed to pay John Hancock $250mn...

Jonathan Thomas, the former underwriter of personal accident (PA) specialist Syndicate 1607, has joined the Munich Re backed Watkins Syndicate.

London Market-fronted binding authorities specialising in the mortgage banking market look set for a hit from directors and officers (D&O) claims arising out of the sub-prime debacle.

Switzerland is fast becoming the location of choice for companies looking to access the Continental European (re)insurance market.

Crucial test for 2008 prospects as specialist vehicles reach crossroads; prospect of disputes emerging?