The Insurance Insider

• Goldman Sachs' insurance units face downgrade threat

  Thu, 23 Feb 2012 11:26:43 +0000

  Moody's Investors Service has placed Goldman Sachs Insurance Group's financial strength ratings on review for a possible downgrade. In a 22 February statement, Moody's assistant vice president Shachar Gonen said: "The review for downgrade of the Goldman Sachs Insurance Group entities was prompted by the review of its parent company, whose ownership and support provides ratings uplift to the insurance companies' stand-alone credit profile." The investment bank provides operational and financial support to its insurance units, including guarantees and keep-well...

• Equity Redstar close to breakeven in H2 2011

  Thu, 23 Feb 2012 11:26:43 +0000

  Troubled Lloyd's motor underwriter Equity Redstar reined in its combined ratio to 102.8 percent in the final six months of 2011 as it showed signs of emerging from the nightmare period that it has endured over the last two years. Equity's parent IAG reported that in the first half of its 2012 fiscal year the group's UK operations had trimmed losses back to just A$5mn. In the first six months of 2011 Equity cost its parent company A$60mn and in...

• Swiss Re calls broad market turn as profits rise

  Thu, 23 Feb 2012 11:26:43 +0000

  Swiss Re's new group CEO Michel Liès says the reinsurer is in a good position to grow during a "modest but broad" market turn, after the firm increased net income for 2011 to $2.6bn despite a downturn in underwriting results. Liès' comments are some of the most optimistic from his peer group, as both European rivals Munich Re and Hannover Re have said pricing improvements were confined to certain types of business. The results pushed Swiss Re's stock up 4...

• RBSI returns to profit despite leap in reinsurance costs

  Thu, 23 Feb 2012 11:26:43 +0000

  RBS Insurance (RBSI) - the UK general insurer that plans to IPO next year - returned to profit in 2011 despite a 70 percent hike in its reinsurance spending. RBSI posted an operating profit of £454mn - a £749mn improvement on 2010's bottom line - after avoiding any further deterioration in its motor reserves. Highlights include the combined ratio narrowing from 121 percent in 2010 to 100 percent last year and a £1.16bn reduction in net claims because of action...

• Lancashire raises sidecar capital as it reports 64% CR

  Thu, 23 Feb 2012 11:26:43 +0000

  London-listed carrier Lancashire delivered net income of $212mn for 2011 and $39.8mn for the fourth quarter, while reporting that it was gearing up for 1 April by raising $75mn of new capital for its sidecar Accordion. Lancashire's business model and risk appetite means its loss experience is closely correlated with severe events in peak zones - chiefly US wind, European windstorm and California earthquake. This focus and the high layers that it tends to write have protected it through a...

• Ambitious Tawa targets live market with new broker Q360

  Thu, 23 Feb 2012 11:26:43 +0000

  Diversified (re)insurance investor Tawa has signalled its intent to ramp up its presence in the London market with the launch of an ambitious new wholesale broker. The new broker, called Q360, will be led by former CJ Coleman CEO David Merry and comes as further evidence of Tawa's expansive drive to diversify its business away from its origins as a pure legacy buyer and more into the live sector. Q360 will initially target five business sectors: onshore energy, property, binding...

• RenaissanceRe and Everest top-up buyback programmes

  Thu, 23 Feb 2012 11:26:43 +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 11:26:43 +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 11:26:43 +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 11:26:43 +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 11:26:43 +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 11:26:43 +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 11:26:43 +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 11:26:43 +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 11:26:43 +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 11:26:43 +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 11:26:43 +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 11:26:43 +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 11:26:43 +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 11:26:43 +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...