October 2013/2

Weekly share price movements and key data on The Insurance Insider's universe of P&C (re)insurers and brokers

US insurer Assurant has agreed to trim its lender-placed home insurance rates in Florida by 10 percent after talks with the state insurance regulator, it announced last week.

Plans to develop and implement new capital rules for the global insurance industry put forward by International Association of Insurance Supervisors (IAIS) have been criticised by industry bodies.

In the latest development in a complex and long-running dispute relating to a facultative reinsurance of Costa Rican insurer Instituto Nacional de Seguros (INS), a Miami judge last week gave broker Hemispheric Reinsurance Group (HRG) permission to sue Howden for punitive damages in a cross-claim.

Comments by Nephila co-founder Frank Majors on investor return requirements are bad news for any carriers relying on "fat" US catastrophe profits, according to Keefe Bruyette & Woods analyst Chris Hitchings.

Shipowners are facing significant general premium increases at the 20 February 2014 protection and indemnity (P&I) renewals, two major P&I brokers have estimated in separate sector reports published early last week.

Rates in the upstream and downstream energy market are under pressure while even price increases in offshore casualty have dried up, said Lloyd & Partners in its quarterly report on the energy sector released earlier this month.

US property insurance rates will come under downward pricing pressure in 2014 due in part to the impact of new capacity that continues to be attracted to the sector, according to global broker Willis.

Benign catastrophe losses, modest book value growth and earnings in excess of initial analyst forecasts are all expected to be themes in the imminent third quarter reporting season.

The private equity arm of Goldman Sachs has bought a 50 percent stake in UK motor insurer Hastings Direct in a deal that values the company at about £700mn ($1.12bn) including debt.

It's not often that a profit-making listed company is acquired for less than its current share price. But that is what occurred last week when US (re)insurer Markel Corp agreed to buy the UK professional fees insurer Abbey Protection, in a deal that will bolster its presence in the specialist end of the UK retail market.

Direct Line, the UK motor insurer spun out of bailed-out lender Royal Bank of Scotland (RBS) last year, has announced plans to sell a closed book of life policies and return the proceeds to investors via a special dividend of 4 pence per share.

Berkshire Hathaway was among the parties that made first-round bids for The Hartford's Japanese variable annuity business, it is understood.

London-listed Randall & Quilter (R&Q) bought run-off insurer Flagstone Alliance Insurance and Reinsurance (FAIR) from Validus for $24.1mn last week, at a 15 percent discount to net asset value.

The hit to profitability from the well-publicised drop-off in US catastrophe rates in 2013 will start to become apparent in the third quarter, analysts at US investment bank Keefe, Bruyette & Woods (KBW) said in a note previewing the upcoming results season.

If 2013 will be remembered for the growing exercise of broker power, 2014 may be the year when the battlefield moves to the wholesale arena.

More (re)insurers are likely to suffer financial crises of the kind that have engulfed Tower Group and Meadowbrook due to underpriced business and under-reserving in the low interest rate environment, says industry entrepreneur Bill Berkley.

Capacity prices at Lloyd's jumped by nearly two thirds in the second auction of 2013, in a further sign of the 325 year-old insurance market's growing appeal to investors.

The more energetic approach that Lloyd's has taken to bringing the People's Insurance Company of China (PICC) into the market is part of a wider strategic shift that also saw the Corporation reach out to Spanish and Latin American market leader Mapfre earlier in the year, it is understood.

Two equity analysts have written notes with valuations for New York-listed carrier Tower Group based on it going into run-off.

AIG, Ace, CNA and Chubb are among the insurers that look set to take losses as Tower's $100mn directors' and officers' (D&O) cover threatens to be overwhelmed by class action lawsuits on its calamitous under-reserving, The Insurance Insider can reveal.

VisionRe has postponed its launch until next year after failing to find sufficiently attractive opportunities to deploy its capital, it said today (14 October).

Prominent members of the London (re)insurance community have described collateralised insurance-linked securities (ILS) as extremely dangerous and a huge threat to the London market.

Costly Mex; Dual appointments; Uniqa ‘re-IPO'; Equity offloads; Risk spreads like wildfire; Markel promotes; MGAA MD; DWF expands; Saudi sun; Munich reshuffle; Cooper Gay promotes; Japan stable; Phailin hits; Benmosche gaffe; AIG sale; Diversity matters; Jubilee golden.