The Insurance Insider

• RenaissanceRe and Everest top-up buyback programmes

  Thu, 23 Feb 2012 01:26:12 +0000

  Bermudians RenaissanceRe and Everest Re have both seen their boards approve increased share repurchase programmes as they continue to pursue active capital management strategies. RenaissanceRe said its board has approved an increase in its open-ended buyback programme that takes the total current authorization to $500mn. During 2011, the company repurchased around 2.9 million of its common shares in open market transactions at an aggregate cost of $191.6mn and an average share price of $66.31. Since the year-end, RenaissanceRe has bought...

• Catlin well placed to capitalise on improving rates: Nomura

  Thu, 23 Feb 2012 01:26:12 +0000

  Catlin says it is "well placed" to take advantage of rising rates this year, with a capital buffer of 14 percent and third-party capital structures set up for 2012, according to Nomura analysts. The group's reinsurance programme which successfully kicked in during the second half of 2011 will be renewed this year and is "substantially the same" as its predecessor, the research analysts said. The Lloyd's (re)insurer saw a 5 percent increase in rates at the crucial 1 January 2012...

• Greenlight renews retro book with 15% rate increases

  Thu, 23 Feb 2012 01:26:12 +0000

  Hedge fund-owned reinsurer Greenlight Capital Re renewed its property catastrophe retrocession book at rates that rose 15 percent at 1.1, despite competition from new non-traditional players in the market. Speaking on a call with analysts after reporting strong Q4 profits, Greenlight Re CEO Bart Hedges said the firm is cautiously optimistic that rates in the commercial lines it writes are slowly hardening. Hedges said the firm was happy with its renewals despite competing with new entrants to the retro market....

• Flagstone still expects to agree Lloyd's sale in Q1

  Thu, 23 Feb 2012 01:26:12 +0000

  Restructuring Bermudian reinsurer Flagstone has said that despite delays in the sale of its Lloyd's business it is still confident a deal will be struck by 31 March. Flagstone placed its Lloyd's business and its Caribbean home and motor insurer Island Heritage up for sale in October after a torrid year of outsize cat losses. "In both cases we're down to a shortlist of qualified purchasers," CEO David Brown told analysts and investors on an earnings conference call today (22...

• Suncorp adds further A$300mn of NZII losses

  Thu, 23 Feb 2012 01:26:12 +0000

  Suncorp has told reinsurers that its loss estimate for last year's second New Zealand earthquake has risen by A$300mn to A$2.3bn. The increase in the ground-up loss is likely to be handed over in its totality to its 2010/11 reinsurers, keeping Suncorp's net loss steady. However, discussing the company's half year results today (22 February), Suncorp's CFO John Nesbitt told analysts that the 2011/12 reinsurance programme is yet to be impacted by cat losses. Suncorp has taken A$389mn of cat...

• Chartis targets loss ratio with claims team restructure

  Thu, 23 Feb 2012 01:26:12 +0000

  American International Group (AIG) insurance subsidiary Chartis has rearranged its global claims team under a single management structure in a bid to reduce its loss ratio by 2015. "Last May, we provided investors with a blueprint to achieve a double-digit return on equity and a combined ratio for Chartis in the low 90s by year-end 2015," explained Chartis CEO Peter Hancock. "The plan requires successful execution of initiatives in four key strategic areas: business mix shift, loss ratio improvement, expense...

• HCC books $78.3mn net earnings in Q4

  Thu, 23 Feb 2012 01:26:12 +0000

  US-based specialty insurer HCC escaped heavy losses in Q4 and released reserves to produce a set of results that just beat analysts' expectations. Although the Texas-based insurer's reported net earnings for the fourth quarter were down slightly at $78.3mn from $97.3mn for the same period a year earlier, the profit was still obtained on a relatively healthy combined ratio of 86.8 percent. This meant income from underwriting was a key part of profitability. One reason for HCC's relative outperformance on...

• Flagstone shareholders' equity falls 30% in 2011

  Thu, 23 Feb 2012 01:26:12 +0000

  Flagstone Re booked a net loss of $85.2mn for the quarter and $326.1mn for the year as the burden of catastrophe losses decimated the reinsurer's bottom line and contributed to a 30 percent drop in shareholders' equity in 2011. The performance compared to a $15.0mn profit in Q4 2010 and a full-year 2010 profit of $97.1mn. And Flagstone, with its Lloyd's and Island Heritage business units in the process of being sold, said it had reported the majority of its...

• Flagstone silent on Lloyd's suitors; slashes international exposures

  Thu, 23 Feb 2012 01:26:12 +0000

  Flagstone Re said it is making "significant progress" on the sale of its Lloyd's and Island Heritage businesses but has confirmed no details on who makes up the short-list of potential buyers. In a statement today accompanying the release of financials that included Q4 and full-year net losses of $85.2mn and $326.1mn respectively, the Luxembourg reinsurer said it is in discussions with a "short-list of qualified purchasers" for the two business units. The company said it had also made progress...

• Hartford split could lead to P&C upgrade, life downgrade: Moody's

  Thu, 23 Feb 2012 01:26:12 +0000

  Hartford Financial Service Group's P&C business could see a ratings upgrade from Moody's if it is spun-off as standalone unit from the US giant. However, the ratings of the life insurance group that would be left would likely suffer as an independent entity, said the ratings agency as it warned that could prove a significant barrier to winning new business and retaining existing business. John Paulson, whose hedge fund Paulson & Co is the largest single investor in The Hartford,...

• Legal heavyweight Marcoux joins DLA Piper

  Thu, 23 Feb 2012 01:26:12 +0000

  Insurance law veteran William Marcoux has become a partner at law firm DLA Piper and will head up its insurance sector transactions and regulation practice. Marcoux is a highly regarded global legal expert in insurance, M&A and regulation and was previously co-head of the insurance sector group and executive committee member at rival firm Dewey & LeBoeuf. While at Dewey, Marcoux advised on Omega Underwriting Holdings' change of domicile to Bermuda. He has also advised several London market insurers on...

• Bolt urges caution over contingent commissions

  Thu, 23 Feb 2012 01:26:12 +0000

  Lloyd's director of performance management Tom Bolt has weighed in on the re-emerging debate over broker remuneration, urging the market's managing agents to be careful to ensure they remain compliant with the UK's new anti-bribery laws. In a letter to the market's CEOs, obtained by The Insurance Insider, Bolt warned managing agents to take a "very cautious and rigorous approach to compliance" with bribery laws when considering how brokers are paid for their services. The payment of additional fees, charges...

• Glaser: contingents are a 'red herring'

  Thu, 23 Feb 2012 01:26:12 +0000

  Senior Marsh & McLennan Companies (MMC) executive and former Marsh CEO Dan Glaser has dismissed the furore around contingent commissions as "a little bit of a red herring". Glaser was speaking in the immediate aftermath of the surprise revelation that Willis will resume the acceptance of contingents in certain parts of its business after forswearing the commissions for years. "For a long time contingent commission has been a little bit of a red herring, has created a lot more noise...

• Former Swiss Re CEO set for role at Axa

  Thu, 23 Feb 2012 01:26:12 +0000

  Former Swiss Re CEO Stefan Lippe has been nominated as a non-executive director of Axa less than a month after he relinquished his position at the continental reinsurance giant. Lippe comes in to replace Jacques de Chateauvieux, a board member who for a time acted as the Axa's non-executive chairman. De Chateauvieux is leaving the Paris-headquartered insurer to concentrate on his own private investment vehicle Jaccar Holdings. Lippe announced in December that he would be retiring from Swiss Re on...

• More Costa Concordia survivors join lawsuit

  Thu, 23 Feb 2012 01:26:12 +0000

  More than 30 passengers from the ill-fated final cruise of the Costa Concordia have joined a lawsuit that charges the vessel's owners with fraudulent misrepresentation and inducement, taking the total number of plaintiffs to 39. The original January lawsuit against Carnival Corporation included six claimants. This was amended to add 33 more names before it was filed on 14 February at the state circuit court in Miami. No class action has been filed as each complaint is unique. The suit...

• Moex pays out $95mn to US over Macondo

  Thu, 23 Feb 2012 01:26:12 +0000

  Mitsui Oil & Exploration has announced it will pay $45mn to the US Justice Department and around $25mn in total to Alabama, Florida, Louisiana, Mississippi and Texas for pollution violations, ahead of the Deepwater Horizon trial in two weeks. It added that it would also have to pay $20mn for land acquisition projects. The firm's subsidiary Moex Offshore held a 10 percent stake in BP's Macondo well. It said the payment, which was announced on 18 February, was not an...

• More legacy bidders for live companies 'logical' – Noonan

  Thu, 23 Feb 2012 01:26:12 +0000

  Live-market (re)insurers currently trading below book value would make a "logical" target for run-off buyers, according to Validus CEO Ed Noonan. Commenting on the prospect of more buy-it-to-shut-it approaches at the Bank of America Merill Lynch Insurance Conference on 15 February, he said: "It's a logical thought. And in an efficient market some of that should happen." However Noonan, the veteran of many a street-fighting M&A battle himself, said the obstacle to run-off companies making a play in the live...

• Tawa mulls legacy spin-off as stock price nears post-crisis lows

  Thu, 23 Feb 2012 01:26:12 +0000

  Tawa - the UK listed company controlled by billionaires François Pinault and Lakshmi Mittal - is considering separating its run-off and (re)insurance service businesses in a bid to spark interest in its moribund share price. It is just one of the options being considered to address the decline in market value, according to well-placed sources. Tawa's share price - which is illiquid because a majority is owned by investment vehicles linked to Pinault - has lost around 60 percent of...

• Cameron cracks down on whiplash

  Thu, 23 Feb 2012 01:26:12 +0000

  UK Prime Minister David Cameron has vowed to clamp down on excessive whiplash injury claims, which are costing motor insurers up to £2bn a year and driving up premiums on individual policies by £90 on average. In an attempt to redress Britain's status as "the whiplash capital of Europe", the government met with insurance industry representatives on 14 February. It pledged to cut legal fees from minor injury claims, ban referral fees and extend the road traffic accident claims process....

• Slimmed Fatca cuts costs for insurers

  Thu, 23 Feb 2012 01:26:12 +0000

  The global insurance industry has saved almost $3bn from amendments made to the US Foreign Account Tax Compliance Act (Fatca), according to KPMG estimates. On 8 February the US, France, Germany, Italy, Spain and the UK agreed on a proposed intergovernmental framework to tackle tax evasion by US taxpayers using foreign accounts. Fatca originally required foreign funds to enter into an agreement with the US Internal Revenue Service (IRS) or face large tax penalties. However, under the new proposals, firms...