October 2008/1

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.

American International Group (AIG) and the US government are close to an agreement that would see the current $123bn bail-out of the troubled insurer replaced with a new $150bn programme that includes the buying up of toxic assets, according to reports.

Fallen insurance giant American International Group has unveiled a staggering $24.47bn third quarter net loss on the day it announced a $150bn revamped bail-out package with the US government it says is a “dramatic step forward for AIG and all of its stak

Lloyd's (re)insurer Hiscox echoed a number of its peers in signaling a hardening (re)insurance market in its interim management statement; predicting a "greatly improved outlook" for 2009.

Shares in Munich Re traded up this morning after the reinsurer booked a EUR260mn consolidated profit for the third quarter – albeit 77 percent down on the prior-year period – as catastrophe losses and a 66 percent fall in investment income took their toll

Michael Bannon, assistant vice president of AIG's London aviation insurance division, has become the latest in a growing number of senior figures to leave their posts at the troubled insurance giant, The Insurance Insider understands.

Reinsurance broker Guy Carpenter has seen Q3 underlying revenue fall 10 percent year on year as reinsurance premiums continued to fall, while sister company, global broker Marsh, managed to grow underlying earnings 1 percent during the period.

Hannover Re has become the latest (re)insurer to slip to a third quarter net loss under the weight of heavy catastrophe claims and investment write-downs.

Global directors' and officers' liability (D&O) and errors and omissions (E&O) losses resulting from the credit crisis could hit $12.1bn, according to a report released today (5 November).

Independent reinsurance broker RK Carvill is separating its underwriting and broking businesses in a corporate restructure that will result in “material” redundancies, The Insurance Insider can reveal.

Flagstone Reinsurance Holdings Limited has revealed a Q3 2008 net loss of $186.5mn, compared to net income of $66.2mn for the same quarter a year earlier as investment and catastrophe losses weighed heavily.

Swiss Re has become the latest reinsurer to slump to a third quarter deficit, as it booked a SFr304mn net loss for the period, driven by a SFr614mn operating loss in its life and health business.

Ironshire Insurance Ltd president and chief underwriting officer Les Rock has resigned from the Bermudian insurer for “personal reasons”.

Shares in Hartford Financial Services Group have slumped more than 35 percent in early trading today after the US insurer booked a $2.6bn Q3 loss, lowered its full-year forecasts, and failed to reassure analysts over its capital position.

Lloyd’s (re)insurer Advent Capital Holdings plc is on course to end the year in the black after a volatile first three quarters that have seen it just about break even for the year to 30 September 2008.

Zurich Financial Services Group (ZFS) has joined a growing chorus of (re)insurers to reveal preliminary hurricane loss estimates, with expected claims payments from hurricanes Gustav and Ike amounting to $600mn before tax.

RenaissanceRe slumped to a $231mn net loss for the third quarter as it was hit by the double impact of net realized investment losses and hurricanes Gustav and Ike.

Newly Swiss-domiciled (re)insurer ACE Ltd has avoided the third quarter net losses posted by a number of its peers, but nevertheless saw its net income decimated by net realised investment losses and catastrophes as it plummeted 92 percent to $54mn.

Modeling firm Risk Management Solutions (RMS) has almost doubled its initial estimate for industry losses from Hurricane Ike to a range of $13bn to $21bn – making it the third most expensive US hurricane in history.

Willis Group shares were trading down heavily after the broking giant reported third quarter profits below analysts’ expectations and said it was reviewing profit targets for 2009 and 2010 because of the financial turmoil.

Lloyd’s insurer Amlin plc has revealed its star head of underwriting Tony Holt will stand down from executive responsibilities at the end of year, taking a non-exec board position.

Up-for-sale Transatlantic Holdings Inc has become the latest (re)insurer to post a net loss for the third quarter as the combination of financial market turmoil and catastrophe losses weighs heavy on the sector.

Securities law firm Klayman & Toskes has filed a class action against a list of prominent investment banks alleging that they failed to identify “misstatements and omissions” in an American International Group prospectus for a debt issue they were underwr

Former Independent Insurance executive Keith Rutter has left (re)insurance broker Lockton International for US insurer AmTrust.

Bermudian (re)insurer Platinum Underwriters Holdings Ltd reported a Q3 net loss of $45.3mn, compared to $91.3mn for the same point in 2007.

US (re)insurer Travelers’ net income for the third quarter plummeted to $214mn compared to $1,198bn in the same period last year. Overall, underwriting losses were $208mn for the quarter compared to an underwriting profit of $520mn in the previous year.

Fitch Ratings has put XL Capital on Rating Watch Negative on concerns over the (re)insurer’s capital position following its announcement of heavy investment losses.

US (re)insurer Travelers’ net income for the third quarter plummeted to $214mn compared to $1.198bn in the same period last year.

Bermudian (re)insurer Platinum Underwriters Holdings Ltd reported a Q3 net loss of $45.3mn, compared to $91.3mn for the same point in 2007.

A $115mn settlement in the litigation brought by New Orleans Teachers' Retirement System against four former AIG chief executives and CV Starr & co has been preliminarily approved by Delaware Chancery Court.

Hannover Re has issued a profits warning as it said would be unable to meet its full-year targets as a result of the double impact of financial markets turmoil and heavy catastrophe losses.

The New York insurance authorities are considering the innovative approach of putting the liquidation of Midland Insurance Company out to tender in a bid to improve the returns available to policyholders.

Lloyd’s expects its members to face net claims of £1.3bn, or $2.34bn, from hurricanes Gustav and Ike, based on an aggregate $20-25bn industry loss.

Flagstone Reinsurance Holdings Ltd has ended its search for a Lloyd’s platform with an agreement to buy Marlborough Underwriting Agency Ltd from Berkshire Hathaway, as it becomes the eighth Bermudian to establish a Lime Street presence since the start of

American International Group (AIG) has agreed to hand over details of all compensation paid to senior executives to New York attorney general Andrew Cuomo as he looks to recover “illegal expenditures” from the beleaguered insurer.

AM Best has downgraded Bermuda-based insurer XL Life reinsurance’s financial strength rating from A to A-, citing declining premium and capitalisation pressure as its parent, XL Capital Ltd has been winding down its business profile...

Shares in specialty (re)insurer Catlin Group Limited, were under pressure in London this morning as it unveiled Q3 estimates for mark to market investment declines and losses from Hurricane Ike and Gustav totalling 11 percent of shareholders’ Q2 equity.

Ascot Underwriting founder Martin Reith has stepped down as its CEO just months after agreeing a deal with American International Group (AIG) for the Lloyd’s insurer to become a wholly owned subsidiary of the troubled US giant.

New York attorney general Andrew Cuomo is to scrutinise executive compensation since the start of 2007 at American International Group (AIG) as he launched a probe into what he called “unwarranted and outrageous” spending by the fallen giant.

After the gains of earlier in the week, European and Asian shares have continued to fall this morning (16 October) amid gloomy economic news both sides of the Atlantic.

Broking giant Aon Corporation has agreed a $154.7mn deal to sell off its auto unit AIS Management Group to Mercury Insurance Group, California’s third-largest personal automobile insurer.

WR Berkley has confirmed the hire of a financial institutions (FI) team from American International Group, as previously revealed by The Insurance Insider.

The directors of nationalised UK bank Northern Rock will not be sued by its new owner over the collapse of the mortgage lender earlier this year.

Bermudian (re)insurer Max Capital Group Ltd will cut its allocation to alternative investments after being hit by poor results from the portfolio, while compatriot Allied World Assurance Company Holdings (AWAC) said it expects to take $210mn investment lo

American International Group's (AIG) rescue deal with the US government will result in its liquidation, according to former chief executive Hank Greenberg.

XL Capital shares have surged after the company reported an estimated third quarter net loss of $1.65bn to $1.67bn that included a $1.4bn charge in relation to its August transaction to close the majority of liabilities to former bond insurer affiliate Se

Berkshire Hathaway is restructuring its London market operations with a view to selling its Lloyd's insurer Marlborough Underwriting Agency, The Insurance Insider can reveal.

Embattled US insurer American International Group (AIG) has borrowed $70.3bn on loans from the government in the three weeks since its initial $85bn bail-out, up $9bn since last Friday (3 October), according to reports.

Fancy buying over $20 for $5? Then perhaps all you need do is instruct your broker to buy XL Capital. The embattled insurer was forced to reassure shareholders on Friday (10 October) that its third quarter book value would be $21-$22.50 after its stock tu

A fundamental disagreement over the issue of mandatory commission disclosure lies at the heart of the decision by the London Market Insurance Brokers’ Committee (LMBC) to break away from the British Insurance Brokers’ Association (BIBA) and form a rival t

The global stock market crash has caused Yamato Life insurance, Japan’s nearly century old insurer, to declare bankruptcy overnight.

On another bleak day on Wall Street, XL Capital shares more than halved to close at $4.01 as fears returned over the Bermudian (re)insurer's investment portfolio.

Start-up energy insurer Torus Insurance Holdings Ltd has confirmed the appointment of Clive Tobin as the group’s CEO, effective 1 January 2009, as revealed by The Insurance Insider in June.

Expansive Lloyd’s insurer Hardy Underwriting Bermuda Ltd has hired a five-strong team from HSBC that will bring renewal rights to a portfolio of high net worth property business.

The London Market Insurance Brokers’ Committee (LMBC) is breaking away from its parent body the British Insurance Brokers’ Association, The Insurance Insider can reveal.

Concerns that American International Group’s $85bn Federal Reserve loan would not be sufficient were relieved late yesterday when the embattled insurance giant received a further $38bn in cash collateral from the Federal Reserve Bank of New York.

Shares in several (re)insurers both sides of the Atlantic have continued to slide today, despite coordinated efforts by central banks to provide stability to the banking sector and wider financial markets.

Bermudian-headquartered run-off specialist Enstar Group Limited has announced that its wholly-owned subsidiary, Royston Run-Off Ltd, has won the race to buy Unionamerica Holdings Ltd, the discontinued operations of the Travelers companies’ Inc’s UK-based

A US congressional committee has criticised former AIG executives during a hearing to examine the regulatory mistakes and financial excesses that led to the $85bn bailout of the insurance giant on 16 September.

Newline Syndicate 1218 active underwriter, Stephen Gordon, has left the Lloyd’s insurer to join expansive US-based property casualty insurer AMTrust, according to sources.

Flagstone Reinsurance Holdings Ltd is set to become the latest Bermudian to establish a Lime Street presence with the acquisition of a Lloyd’s platform, The Insurance Insider can reveal.

Bermudian reinsurer Harbor Point Ltd is looking to build its London presence after being approved by UK regulator the Financial Services Authority to convert its representative office to a fully licensed branch operation.

Lloyd’s (re)insurer RJ Kiln and Co is to form a new syndicate for the 2009 year of account, The Insurance Insider understands.

American International Group’s (AIG) enforced metamorphosis from a global financial services firm to what its new chairman and CEO Edward Liddy hopes will be a “smaller but more nimble company that is solidly profitable and has attractive long-term growth

The soon-to-be broking leviathan Aon Benfield Re has continued to flesh out its senior management structure as the two firms look to complete their union by the end of the year.

AIG’s fate remains uncertain as financial storms continue to rage...

Buffy and his correspondent join us from the Digest of Lloyd’s News, Oliver Carruthers’ splendid journal on Lloyd’s affairs...

Beazley confirms MUM $37.5mn acquisition… and reshuffles following Rowell departure; Kiln appoints new CEO; Swiss Re backs new London equine agency; Amlin buys French coverholder; Ironshore hires Liberty execs; Solicitors’ PI

Specialist environmental inter-dealer broker Evolution Markets has closed its first cat futures trade since launching its new catastrophe derivatives desk in August.

Swiss Re has partnered with on-line weather derivatives platform CelsiusPro Ltd to underwrite European weather derivatives.

UK run-off acquisition firm Randall & Quilter Investment Holdings plc (R&Q) is upbeat about prospects despite the growing competition in London Market run-off acquisition.

Last month The Insurance Insider predicted PwC partner Dan Schwarzmann’s time was likely to become more scarce following his elevation to head the firm’s Business Recovery Service Practice, just as the Western economies teeter...