September 2013/6

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

Axa Liabilities Managers (Axa LM) has confirmed rumours circulating in the run-off market for some time by sealing a deal for the international arm of Global Re, together with its estimated gross reserves of circa $400mn.

The rising trend towards settling UK injury claims through periodic payment orders (PPO) has brought the issue under the legacy spotlight and sparked a hunt for a viable run-off solution.

Shareholders of Eastern Insurance Holdings are being asked to join a potential class action against the company's directors after they allegedly undervalued the US workers' compensation insurer in its $205mn agreed buyout with ProAssurance Corp.

Liberty Mutual has been thwarted in a bid to move a suit relating to a $50mn pipeline spill, which affected a university building project, to a court in California where the incident occurred.

Scor is set to take its challenge against Caisse Centrale de Reassurance (CCR)'s "virtual monopoly" of the French property cat reinsurance market to the European authorities after losing out in a French Constitutional Council hearing.

Professor Karel Van Hulle, the former European Commission insurance head and cheerleader for the much-delayed Solvency II initiative, has warned about the prospect of yet more interruptions to the regulatory regime's implementation.

New regulations governing the supervision of firms deemed systemically important to the health of the US economy may have unintended consequences that hurt the competitiveness of the market, insurance commissioner Tom Leonardi has warned.

Last week's US Senate Banking Committee hearing on the reauthorisation of the Terrorism Risk Insurance Act (TRIA) has left industry observers cautiously optimistic as lobbyists continue to push for an extension of the government backstop for terrorism losses.

The head of insurance at the UK's Prudential Regulation Authority, Julian Adams, will this week warn (re)insurers about the potential disruption they face from the burgeoning cat bond market.  

Former Execution Re partner Neil Strong has moved to a new business development role at London-based insurance-linked securities (ILS) fund manager Securis Investment Partners.

Markel Corp has secured $215mn of capital to deploy during the 1 January 2014 renewals via its retro-focused New Point sidecar, sister publication Trading Risk reported last week.

France-based insurer Axa is marketing a new European windstorm bond after a two-year hiatus from the cat bond market, our sister publication Trading Risk understands.

Swiss Re is marketing its second subordinated contingent write-off security for 2013, following on from a similar issuance back in March.

Is AmTrust Financial's use of Luxembourg captives to absorb insurance losses clever financial engineering or a breach of US GAAP accounting and the principality's financial regulations?

The London company market wrote almost £18bn in gross premium last year, while a further £6.2bn was under the control and management of London operations, according to a report published by the International Underwriting Association (IUA) last week.

Lloyd's of London last week (26 September) reported a 10 percent dip in its interim profits as the 325-year-old insurance market succumbed to a sharp drop in the value of its bond investments, mirroring the half-year results of the wider (re)insurance industry.

Lloyd's is set to see its busiest day of start-up activity in five years after it granted in-principle approval for three new syndicates to begin underwriting from 1 January.

Broking legend Pat Ryan has said the role of wholesale brokers is "changing dramatically" as clients and retailers expect more expertise and partnership rather than merely being given access to markets.

P&C insurers are unlikely to be able to sustain the level of reserve releases seen in recent periods for much longer, which may have a positive impact on pricing in the excess and surplus (E&S) lines market, according to AM Best.

The Lloyd's insurance market remains the largest player in the US excess and surplus lines (E&S) sector but is set to face increased competition in the near future.

London-headquartered brokers Cooper Gay and Price Forbes both proclaimed 2012 as good years, even though a superficial glance at the trading numbers might give two different impressions.

The industry's largest reinsurance broker unveiled a major management restructure last week that includes a new CEO and a closer alignment with its bigger corporate risks sibling, Aon Risk Solutions (ARS).

The recent terrorist attack on the Westgate shopping centre in Nairobi could inflict the largest loss on the terrorism market since the Bangkok riots in 2010, according to sources.

Both the downstream and upstream energy markets are likely to be under pressure going into 2014 amid a surplus of capacity chasing a limited amount of premium, according to Willis.

Legacy acquirers Enstar and Catalina held takeover talks with stricken US (re)insurer Tower Group after the company's share price continued to weaken dramatically amid uncertainty over the size of its reserving black hole, The Insurance Insider can reveal.

The California Earthquake Authority (CEA)'s risk transfer programme for 1 August decreased limit by 8 percent to a total of $3.1bn, driven mainly by a reduction in collateralised participation, according to August meeting documents published last week.

The outlook for continued rate hardening in the excess and surplus (E&S) lines markets appears to be diminishing amid an abundance of capital and capacity, according to underwriters and brokers attending the Napslo conference in San Diego.

Medical malpractice specialist ProAssurance announced last week that it has agreed to acquire workers' compensation writer Eastern Insurance Holdings in an all-cash deal that values Eastern at $205mn.

Bailed-out Spanish lender Bankia has sold a 12 percent equity stake in Mapfre, the country's biggest insurer, raising about EUR1bn and reducing its holding in the company to just 3 percent.

Liberty restructure, Lloyd's losses, Amlin downgrade, Gulf boom, Aviva reshuffle, Axa buyout and Aon down under

Dublin-domiciled (re)insurer XL Group has said it expects to absorb a net loss of $60mn from severe hailstorms that struck Germany in late July, confirming its status as one of the costliest weather-related events so far in 2013.

Germany's third-biggest insurance group, Talanx, is actively looking for acquisitions in Mexico, Brazil, Poland and Turkey, and will rely on equity investors to finance any deal worth more than EUR180mn ($241mn), its chief executive explained last week.

French insurer Covea's EUR800mn catastrophe reinsurance treaty will renew tomorrow (1 October) with a 5-10 percent risk-adjusted rate reduction, The Insurance Insider understands.

Validus Holdings is launching a Swiss platform with the existing operations of Flagstone Reassurance Suisse that were inherited when it acquired its fellow class of 2005 (re)insurer last year.

It's easy to forget how spoiled we are in this global business of ours. All the main operational hubs of the global P&C (re)insurance sector are also desirable locations in which to live and work.