September 2012/1

Major 2012 P&C mergers and acquisitions

Valuations for (re)insurers in The Insurance Insider's P&C universe

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

Ruxley Ventures, a boutique buyer of asbestos, pollution and health (APH) liabilities, warned today (3 September) that European insurers are more complacent than US counterparts in managing legacy asbestos liabilities at a time of renewed claims activity.

Following its recommended acquisition by Validus, Flagstone Re will have to pay back tax benefits worth just under $12mn to the Swiss government if the sale completes, The Insurance Insider understands.

The key European Parliament vote on Omnibus II has been pushed back again by a month from October to 20 November.

The UK Financial Services Authority (FSA) has proposed a ban on "conditional" risk transfer between insurers and intermediaries in order to prevent policies not being honoured if a broker fails.

Hannover Re's groundbreaking Fac Pool Re securitisation is facing the prospect of major losses as a legal dispute begins over some of the business ceded into the pool.

Insurance-linked securities (ILS) investors kept a close watch on the Pelican Re cat bond as Hurricane Isaac hit Louisiana, while parts of the state continue to struggle with flooding a week after the storm.

Despite reviving bleak memories for the residents of New Orleans, Hurricane Isaac ultimately appears to have turned into a damp squib for (re)insurers, at least according to the cat modelling agencies.

In addition to the $8.43 a share offer to Flagstone Re investors, the Validus proposal includes $135.2mn of balance sheet adjustments to the Swiss-based reinsurer.

A successful combination between Validus and its smaller rival Flagstone Re would create Bermuda's largest property catastrophe reinsurance writer, edging out short-tail specialist RenaissanceRe.

The niche residual value insurance (RVI) market could form part of the EC3 landscape once again, with Korean underwriter Samsung Fire & Marine Insurance Company of Europe (SFME) considering writing the product.

Kidnap and ransom (K&R) and contingency could soon be written by Ace Global Markets (AGM), the London market arm of Ace European Group (AEG), reports sister title Inside FAC.

American Financial Group (AFG) has consolidated its ownership of Lloyd's insurer Marketform five years after acquiring a majority stake in the business.

Market veteran Michael Pritchard, the active underwriter for Beaufort-managed and Munich Re-owned Lloyd's Syndicate 318, is to step down from the role with effect from 30 June 2013.

Beazley Group is close to becoming the first Lloyd's insurer to raise capital from private savers by issuing a UK retail bond that will provide it with up to £250mn of funding (and what is expected to be £50mn-£75mn)

Private equity backed Lloyd's (re)insurer Barbican Group is building out its property treaty platform with the hire of James Winn from its rival Ark Syndicate Management.

Lloyd's anoints new execs; Nuclear option; US reinsurers return to profit; Thai floods dent China Taiping; Third Point Re to launch London platform; UK P&I Club confirms SII restructure; Isaac micro trigger; Hitchings joins Newton Follis; SeaBright downgrade threat; Darwin evolves; MSIG converts German branch; Singapore sling; Admiral sails on; Lockton secures fac JV; Montpelier Re move; Charles Taylor on track

RBS-owned insurer Direct Line reported a 43 percent drop in half-year profit before tax to £106.5mn - due largely to restructuring costs involved in its separation from the bank before an initial public offer planned for this autumn.

Fitch Ratings has praised the global reinsurance industry for its underwriting discipline and caution over capital management ahead of the 2012 Monte Carlo Reinsurance Rendez-Vous.

The greatest advantage of capitalism is its ability to adapt to the changing economic environment. Given time and a free run, Adam Smith's invisible hand invariably nudges collective action in the direction that causes the most favourable outcome for the greatest number of people.

Validus will be fortunate to push through its offer for Flagstone without coming under fire from rival bidders, which may include recent suitor Montpelier Re and earlier unsuccessful bidders like Enstar, it is understood.