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May 2013
AIG will continue to own a 9.9% share in Chinese insurer PICC P&C.
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US property/casualty insurance industry releases more than $10.5bn in reserves in 2012, says Conning in a new report. The reserve position is stable despite the 2012 releases.
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AM Best has revised the outlook to stable from negative and affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of “aa” of Partner Reinsurance Company Ltd. (PartnerRe)
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Willis ILS report says $1.6bn of new cat bond issuance in the first quarter, and “2013 is roaring forward with a flurry of cat bond, sidecar, and collateralised reinsurance activity”, with record issuance expected.
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Despite being hardest hit by political instability in the Middle East, Bahrain’s insurance industry is flourishing, partly because it’s less oil-dependent than its neighbours.
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Standard & Poor’s has downgraded Berkshire Hathaway's credit rating one notch to AA from AA+ because of its “dependence on its core insurance operations for most of its dividend income”; AA+ financial strength rating affirmed.
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US insurance and reinsurance firms are calm about the potential contents of the Federal Insurance Office’s regulation modernisation report but worry it will not make the system more efficient, while some predict increasing tensions between the FIO and NAIC.
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Standard & Poor's may have become less prescriptive when assessing insurers’ operating performance as it found identifying coherent peer groups too challenging, Litmus Analysis has argued.
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Swiss insurer Zurich has posted operating profit of $1.35bn for the first quarter, and a combined ratio of 94.9%.
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German insurer Allianz had operating profit of €2.8bn and net income attributable to shareholders reached €1.7bn in the first quarter of 2013.
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AM Best has predicted that Berkshire Hathaway’s E&S market entry will be “controlled and measured”. The rating agency affirmed Berkshire's insurance and reinsurance operations ratings for National Indemnity Company.
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French reinsurer Scor has announced a "very good" first quarter result, while highlighting continued economic uncertainty.
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Have your say on the the best insurance, reinsurance, broking and service provider firms for the Reactions Global Awards 2013. The winners will be anounced at our awards dinner in New York on September 25.
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AIG’s deal to sell its aircraft leasing operation has been extended for a month, but is still expected to close in 2013’s second quarter.
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AIG, Aegis, Erie Family Life, Great American, Nevada General, PURE, RLI, and XL have all been nominated for Novarica’s second annual Novarica Research Council Impact Awards.
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First quarter losses were suffered by seven in eleven Costa Rican insurers, despite the country's premiums jumping 17% in 2012, BNamericas reported.
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Sirius hires Goldman Sach’s Michael Halsband for capital markets initiative in insurance-linked securities and reinsurance capital markets convergence.
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Tokio Millennium Re announces plans to redomesticate to Switzerland, with the reinsurer also planning to establish an operation in the US in the second quarter of 2014.
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PwC is working with UK and London market insurance market clients to reduce a “communications gap” between the development of catastrophe risk models and capital models introduced under regulatory pressure.
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Catlin saw a 12% increase in premium for the first quarter of 2013, thanks to having no large catastrophes and expected operating expenditure.
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The CEO of Risk Management Solutions says his firm's new platform is the result of the risk modelling industry reaching an inflection point, while insurance and reinsurance firms welcome the chance to analyse data faster through the cloud.
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Lloyd’s insurer and reinsurer Beazley has issued its first quarter results update, announcing a 2% overall increase in rates at renewals, gross premium written of $518m.
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New regulatory regimes could have both positive and negative credit implications for insurers, according to a new report released today by Moody's.
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Catastrophe bonds are experiencing an expanding investor base and competitive capacity, while insurance-linked securities may hit issuance levels of $7bn this year, according to GC Securities.
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Netherlands-based insurer Aegon has revealed first quarter net income of €204m and return on equity of 6.3%.
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The UAE insurance market is being kept afloat by compulsory medical schemes, public spending and social programmes despite its slow economy.
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RMS reveals RMS(one), which will allow insurance and reinsurance companies to manage all their risk models, exposures and analytics on a single platform. Partners for the platform include ERN, JBA, Risk Frontiers and Aon Benfield’s ReMetrica.
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Standard & Poor’s explains in an interview with Reactions why the rating agency is preparing to release ratings from its new criteria to insurers around the world starting with global reinsurers and multiline insurers.
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Berkshire Hathaway is on the brink of becoming a sizable player in the commercial insurance market, according to equity analyst Meyer Shields, which will have, overall, a negative impact for specialty insurers such as AIG and Lloyd’s.
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Brazilian reinsurers had an average combined ratio including retrocession of 104.3% in 2012, just over three percentage points higher than it was in 2011, according to a report by Terra Brasis Resseguros.
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Interview: Errors and omissions (E&O) business and benign claims conditions helped Hiscox hit £506.1m gross premium for 2013's first quarter, Hiscox CEO Bronek Masojada tells Reactions.
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Munich Re expects slight price erosion for such cat reinsurance cover in the US at July 1. The world’s biggest reinsurer said it is continuing to aim for a profit of close to €3bn for the whole year.
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Hannover Re says it’s on track to hit its 2013 targets, but the first quarter saw a reduction in investment income and overall profit.
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Pat Ryan says Berkshire Hathaway’s deal for the Aon Lloyd’s business and move into the excess and surplus lines market, coupled with increased convergence between reinsurance and capital markets, make this year one of the most eventful in his career.
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Third Point, the $11.6bn hedge fund run by Dan Loeb, has hired banks for an initial public offering of its reinsurance unit Third Point Re, according to Reuters.
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AIG’s property/casualty group has rating upgraded to A+ by rating agency Standard & Poor’s in light of successful restructuring by over the past two years.
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Insurance Capital Raising Data: Insurance debt issuance was down, while equity issuance was up in April, including the world’s largest IPO so far this year with Banco do Brasil’s pensions and insurance arm raising $5.05bn.
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M&A data: The largest insurance mergers and acquisitions deal in April was Protective Life’s deal to buy the closed blocks of business of Mony Life from Axa for $1.06bn.
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19 Association of Bermuda Insurers and Reinsurers members wrote $66.4bn in global gross written premium, up from $65.8bn in 2011 on a capital and surplus base of $95.2bn, up from $89.7bn in 2011.
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Rating agency Moody’s says IPO is credit positive for ING US, which will obtain, in addition to fresh capital and equity market access, greater dividend capacity from its regulators.
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Insurance IT budgets predicted to be up 6.3% on average in 2013, according to a Celent survey of chief information officers. The survey also reveals a budget shift from 80% maintenance and support and 20% development to closer to a 60/40 split.
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Ontario’s plan to cut auto premiums credit negative for Canadian property/casaulty insurers, warns Moody's.
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Berkshire Hathaway posts $4.89 net earnings, helped by operating earnings from insurance underwriting of $901m, up from $54m in the first quarter of 2012.
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Fitch report reveals the biggest US directors' and officers' liability insurance insurers, and predicts FDIC-related litigation and lawsuits related to Libor manipulation could spur potentially large settlements.
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Insurance brokerages Aon and Marsh & McLennan Companies have ratings put on positive outlook on improved financial leverage.
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Ally Financial takes a $175m pre-closing dividend as part of its deal to sell Mexican personal lines insurer to Ace Limited for $690m.
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AIG Property Casualty’s combined ratio was 97.3%, compared to 102.1% in the first quarter of 2012, including included catastrophe losses of $41m and favourable net prior year development of $52m.
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After the first quarter, Lancashire has announced it has a combined ratio of 51.2%, but CEO Richard Brindle notes added pricing pressure caused by Aon's Berkshire deal in London.
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Feature: Latin America’s insurance and reinsurance markets are growing up fast, but many primary companies active in the region could be at risk of being derailed by a big event. A common complaint is the lack of cat models to quantify risk in the region.
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Nominees unveiled for the Reactions Latin America Awards 2013, highlighting the best insurance, reinsurance, brokerage and service provider firms. They will be announced at the 2nd Annual Latin American (Re)insurance Forum in Miami on May 22.
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Insurer RSA said it is on track for a combined operating ratio of 95% this year, and is focusing on Canada and Argentina in 2013.
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The Swiss reinsurer revealed property and casualty (P&C) reinsurance profit up by 53%, and an “excellent group combined ratio of 72.4%”.
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Tom Larsen, senior vice-president and product architect at Eqecat, gives a model vendor’s perspective on Latin American cat risk.
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Validus’s first quarter profit for 2013 hit an all time high of $223.2m, but investment income shrank by $2.1m.
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Analysis: Axa’s plans to cut pension schemes costs to cut costs and diversify its portfolio away from Europe to stay ahead of struggling peers.
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After Aviva replaced its chief executive Andrew Moss with Mark Wilson, former chief executive of Asian insurer AIA, at the beginning of 2013 the firm has focused on creating operating capital.
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Analysis: After his predecessor was publicly ousted, Mario Greco, Generali CEO, has successfully shaken up the Italian insurer’s management and a focus on developing markets.
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Broker Arthur J Gallagher has acquired Barbon insurance group’s commercial and property business in a “game changing deal for the UK retail market”.
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Reactions reveals the top insurance and reinsurance law firms in the industry. In-house general counsel also reveal what they want to see from their legal partners in the coming year, how legal spend is changing and how fee structures are evolving.
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New transactions covered by investment insurance reached a record $94bn in 2012, the Berne Union reported.
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Virginia- based Markel’s acquisition of Alterra will boost combined assets to $23bn and shareholders' equity to $6bn.
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April 2013
Bosphorus 1 Re cat bond deal completed, with Munich Re acting lead structurer and GC Securities as bookrunner.
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Direct premium in China’s non-life sector annually grew by 23% on average during 2009-2012, according to a report from insurance-focused credit rating agency AM Best.
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The rush of London market insurance, reinsurance and broking companies looking for new office space in London is a sign that the market is the lifeblood of the city’s financial services industry at the moment, says Reactions’ editor Michael Loney.
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Reactions hosted a roundtable, sponsored by Eqecat, to discuss how catastrophe risk models are evolving and debate how insurance and reinsurance firms should develop their own view of risk rather than solely relying on modelled output.
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Conning has partnered with Ramius, an alternative investment portfolio specialist, to help clients access hedge fund investment returns.
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The Bermudian insurer says its leap in first quarter profit over last year's performance is partly thanks to alternative investments and expansions into Europe, Canada and Australia.
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Speakers at the Insurance Data & Analytics Summit held by Accord and Reactions discussed how the effective use of big data could prove to be a transformative driver within the insurance industry.
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Chubb reports a record high operating income per share and net income per share for the first quarter of 2012.
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Presentations by IBM, Guy Carpenter, State Street and The Hartford from the Insurance Data & Analytics Summit, held by Reactions and Acord at the Harvard Club in New York on April 18, are now available to download.
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Social media could become an important tool against insurance fraud, according to insurance industry specialists from IBM and Tata Consultancy Services, who believe it could have a transformative effect on how claims are dealt with and processed.
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Bermudian insurer and reinsurer Aspen announces net income of $91.8m in the first quarter of 2013 with its combined ratio dropping.
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Montpelier Re describes quater as “very successful”. The reinsurance firm’s combined ratio rose to 62.4% from 58.9% in 2012.
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Run-off specialist insurer Randall & Quilter (R&Q) issues its 2012 results and says it plans a domicile move from July “for regulatory, operational and commercial reasons”.
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The reinsurance industry has bounced back from significant losses in 2010 and 2011, but faces worsening investment yield.
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French reinsurer Scor has recorded property and casualty (P&C) premium growth of 6% at April 1 renewals and expects improving profitability.
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The Co-op has pulled out of talks to buy branches of UK banking group Lloyds, raising questions over whether the mutual still intends to sell its insurance arm.
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Bermuda-based Everest Re bolstered its first quarter earnings California workers’ compensation, crop, and non-standard automobile lines.
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A Clear Path Analysis report looks into how catastrophe bonds can be used outside of peak catastrophe risks as the ILS market sees a boom in popularity.
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The Travelers Companies reveals net income of $896m for the first quarter compared to $806m in the same period last year, with a 15.8% return on equity.
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WR Berkley’s net income for the first quarter falls to $117m compared with $135m for the first quarter of 2012, despite average rates on renewed policies increasing 7.3%.
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Ace reports first-quarter net income of $953m and combined ratio of 88.2%. Favourable prior period development of $70m leads firm to increase 2013 guidance.
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Risk managers are struggling to identify and manage the the biggest risks facing their organisations, according to the biannual Aon Global Risk Management Survey. The broker indentifies a decline in "risk readiness".
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Aquiline appoints former Hardy COO as CEO of Equity Insurance Group, which owns the largest motor insurance syndicate at Lloyd’s, following completion of acquisition.
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London-based insurer Aviva is mulling making a £650m takeover offer for The Co-operative group’s general insurance business, according to a report in UK newspaper The Sunday Times.
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Brit has acquired renewal rights and the underwriting platform of Maiden's excess and surplus property business, because Maiden wants to reduce catastrophe exposures.
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Conning expects to see a spike in demand for its new tax-efficient investment solution it is offering to US clients.
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Corporate risk managers suggest they are increasingly prepared for a variety of risks, says new Towers Watson survey.
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Standard & Poor’s rates two tranches of notes from Allstate’s upcoming Sanders Re catastrophe bond, which will cover losses from hurricanes and earthquakes.
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Big data specialists speaking at the Insurance Data and Analytics Summit 2013, hosted by Accord and Reactions, conceded that a big skill gap exists within the industry making talent tougher to find.
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GC Securities and Munich Re place $500m Tar Heel Re cat bond for The North Carolina Joint Underwriting Association and North Carolina Insurance Underwriting Association.
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With deteriorating underwriting results 38% of Saudi Arabian insurers reported a loss in 2012 but strong economic growth offers hope.
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Ascot Underwriting is opening offices in New York as it plans relocate its facultative team and expand its direct lines.
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Sky News is reporting that Lloyd's underwriter Cathedral Capital is up for sale for over £250m.
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Bermudian reinsurer expects to achieve annual savings of between $60m and $70m, pre-tax, with the majority of expense savings achieved by the end of 2014.
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Willis has been given a year extension before it has to decide whether it will acquire Gras Savoye, allowing management time to restructure.
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Brian Tobben joins from PartnerRe and appointed managing director of Aspen Capital Markets.
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Cooper Gay Swett & Crawford has completed a $500m financing exercise from US based investors.
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The London market boosted profits in 2012 but, lacking a widespread upturn, insurers are returning their newly gained capital back to shareholders, according to rating agency AM Best.
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Xchanging has relaunched its commercial insurance products offering and says it intends to go global.
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Swiss insurer Zurich has posted operating profit of $1.35bn for the first quarter, and a combined ratio of 94.9%.
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Mutual insurers are increasingly the preferred clients for traditional reinsurers, according to a report from broker Willis Re, as they cannot access alternative reinsurance capital to the same extent as other insurers.
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Analysis: Beazley, Hiscox, Lancashire and Novae seem to have disaster-proofed their balance sheets as they continually surprise analysts with their results.
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Axa sold its US life unit to speed up its profit-boosting strategy but analysts warn that if Italy and Spain’s economy deteriorates Axa’s credit quality may too.
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Two of Austria’s biggest insurers have reported big profit jumps in Central and Eastern Europe.
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AIG’s share price has seen a rapid increase in the past few days. Having dropped to a low of 37.07 on Friday April 5, it has now risen to 40.13 on Wednesday April 10. But equity analyst John Nadel says this is not yet reason to chase the stock.
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Aon Benfield reports that the world’s largest reinsurers have made a healthy recovery since the financial crisis, doubling pre-tax profits.
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Aon and Manchester United have announced a new deal to extend their relationship to 2021, with Manchester United’s Carrington training ground being renamed the Aon Training Complex.
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The global insurance and reinsurance broker has purchased the remainder of its Chilean business from a Security Financial Services Group subsidiary.
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Eiopa launches industry survey over whether capital requirements for some long-term investment assets should be adjusted match Europe’s economic condition.
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Ironshore International is using its Lloyd’s syndicate to access the Japanese mergers and acquisition market.
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Mortgage insurers’ settlement with US regulator, the Consumer Financial Protection Bureau, ends five-year investigation into payments to captive reinsurance companies.
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Qatar Financial Centre Authority and Ebix say the deal will accelerate Qatarlyst's development as a leading insurance market e-trading platform.
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The mystery over how a Thai firm made a $9.4bn deal to obtain Chinese insurer Ping An shares from HSBC is resolved.
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The London market is said to be puzzled and annoyed by the two firms' “masterstroke” deal to provide a first of its kind sidecar to retail clients.
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Q1 ILS Data: All catastrophe bond deals in the first quarter provided indemnity coverage, with $670m-worth of deals closing.
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AM Best views positively the structural changes that the Turkish reinsurer’s management has since made in both its Turkish and international businesses but still assigns negative outlook.
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“The ILS market is now offering the lowest cost of reinsurance for peak perils witnessed since Hurricane Andrew,” says Aon Benfield. Insurers and reinsurers likely to use ILS and collateralised market to securitise complex commercial property and liability.
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The Connecticut Insurance Department approves first certified reinsurer eligible for reduced credit for reinsurance collateral requirements.
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Torus has received FSA approval to form a Lloyd’s managing agency, to replace its syndicate manager, Chaucer.
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Tough competition means specialty lines insurers are turning their technology strategies towards policy administration system replacement, business intelligence and ratings, according to a Novarica report.
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Data: The value of insurance debt and equity issuance both increased in March, led by a $2.76bn dent issuance from Allianz and the IPO of eSure, although the number of equity deals fell.
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Data: Thirty-one insurance mergers and acquisitions deals worth $2.22bn announced in March, with Allianz’s purchase of a Turkish insurer leading the way.
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Willis Group Holdings has acquired Prime Professions, enhancing its offering in the executive risk market.
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New Citizens Property Insurance cat bond covers losses in Florida from hurricanes on a per-occurrence basis for a three-year term.