October 2011/5

Parametric insurance will make it easier for public organisations to buy insurance against catastrophes, according to Cooper Gay's Latin America CEO Steve Jackson.

Lloyd's did its job adequately in assessing the plans of loss-making UK motor syndicates, according to director of performance management Tom Bolt

Bermudian reinsurer PartnerRe suffered a bruising $1.35bn of catastrophe losses in 2011, resulting in a net loss of $502.6mn for the first nine months of the year.

The Insurance Insider met former Aon Global chairman and Aon Ltd CEO and chairman Dennis Mahoney earlier in the month and found the retired executive buzzing with enthusiasm from a keynote speech he had just made in London.

Mark Errington has become the latest partner to defect from London-headquartered law firm Barlow Lyde & Gilbert (BLG) on the eve of its effective takeover by Clyde & Co.

A UK court has ruled that insureds are not restricted to using an insurer's panel solicitor and are entitled to be covered for all "reasonable" legal costs endured, even if they exceed the rate stated in their policy.

US trade bodies have urged the two groups of states that have initiated separate schemes on sharing premium taxes for surplus lines policies to compromise.

Bermuda's regulatory scheme for managing larger (re)insurers is broadly equivalent to Europe's forthcoming Solvency II regime, according to the European Insurance and Occupational Pensions Authority (Eiopa).

Traditional reinsurers are failing to offer capacity efficiently and the trend for them to outsource peak risk to capital market providers is likely to continue, Nephila Capital co-founder Frank Majors said at the Baden Baden conference last week.

A US subsidiary of Prudential Financial has closed a $2bn letter of credit deal with a number of banks in the largest life securitisation since the 2008 financial crisis.

Swiss Re is seeking to raise $50mn from a new rated Successor cat bond issue covering US hurricane and European wind risk, as well as from an unrated tranche of notes exposed only to US hurricane perils.

Insurance-linked securities (ILS) investors do not expect the earthquake that struck eastern Turkey on 23 October to threaten the EUR50mn Ianus Capital bond.

With a flurry of proposed reinsurance start-ups looking to launch in 2012 with hedge fund and private equity backing, General Re's CEO has warned cedants about the long-term commitment of some investors in the sector.

Cat modelling agencies AIR Worldwide and Eqecat estimate that insured losses from last week's earthquake in Turkey will come to between $55mn and $200mn, meaning that reinsurers will be spared yet another significant international earthquake loss.

With Thailand's industrial heartlands still swamped and Bangkok fighting peak tides on the Chao Phraya river, the Thai Office of Insurance Commission (OIC) has increased its insured loss estimates from the country's worst flooding in 50 years.

Stockmarket optimism proved short-lived last week after Eurozone leaders finally announced its long-awaited financial restructuring plan on Thursday (27 October).

Insurers' slow adoption of the RMS Version 11 (V11) wind model on both sides of the Atlantic is influencing reinsurance demand and supply in the lead-up to the 1 January renewals.

A number of US regional insurers with reinsurance programmes that renew on 1 January bought increased limits at mid-year to hedge concerns over tighter capacity and higher rates for new cover.

The heavy tornado and hail catastrophe losses in 2011 have woken US insurers up to a "new peak risk" that will change attitudes to severe weather, according to industry experts.

US insurers looking to aggregate covers as a solution to the spate of frequency losses that have decimated earnings this year may find it difficult to secure affordable capacity, The Insurance Insider understands.

Persistently low interest rates and the spectre of inflation are prompting casualty (re)insurers to push for underwriting profitability - a goal that may necessitate rate increases of up to 25 percent across the class, according to industry experts.

Reinsurers at the PCI annual meeting in New Orleans were optimistic that reinsurance rates - at least for property cat business - would maintain their upward trajectory at the key 1 January renewals and into 2012.

Jardine Matheson's move to build up its cornerstone stake in JLT will remove the share price prop provided by the potential for a big three takeover offer, Panmure Gordon analyst Barrie Cornes has said.

Aon Corporation and Arthur J Gallagher reversed their fortunes of a year ago to post stronger organic growth than Willis Group in the third quarter.

It may have been a relatively quiet hurricane season for (re)insurers but the initial stages of the third quarter reporting season has already drawn out costly loss creep claims for some in the industry.

(Re)insurers may be settling in for a long period of low investment returns and after a particularly volatile quarter on the markets there were few stellar investment results among the early Q3 reporters.

Lloyd's syndicates that rely on reinsurance to build up its regulatory capital requirements should steel themselves for more bruising negotiations than normal.

Lloyd's syndicates are looking to increase their exposure to peak US risks for 2012 as they trade diversifying business for premium income growth.

Lloyd's has a reduced pipeline of potential new entrants to the market and will maintain a cautious stance ahead of Solvency II implementation, according to its performance management director Tom Bolt.

Brit Insurance's part private equity owner CVC Capital Partners has tabled a potential bid of around £4bn for the insurance arm of state-owned UK bank RBS, according to reports.

The long-running Transatlantic Re takeover saga must be resolved in the coming weeks if the US reinsurer is not to be hampered at the crucial 1 January renewal by "perception" issues over its future, senior broking sources warned last week.

Lloyd's syndicates are part of an increasing pattern amongst specialty/cat (re)insurers for seeking quota-share catastrophe capacity from US insurance carriers, The Insurance Insider can reveal.

IAG has continued to stand by the ground-up A$1.9bn loss estimate it made in May for the second New Zealand earthquake in February, despite widespread evidence of loss creep elsewhere.

Mark Byrne has said that he will look to use M&A and new lines of business to take Omega's Lloyd's stamp from a current £280mn to £400mn, as the (re)insurer is currently "sub-scale".

The industry's largest property cat cedant Zenkyoren will formally disclose to its 80+ reinsurers early next month that its loss notification from the Great Tohoku quake is rising from 635bn yen ($8.4bn) to 790bn yen ($10.4bn), The Insurance Insider understands.

Rising reinsurance prices have prompted California-based workers' comp and specialty insurer SeaBright to scale back its excess of loss protection.