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Artemis: Initial loss estimates from European windstorm Klaus | www.Artemis.bm: "Initial loss estimates from windstorm Klaus which struck Europe at the weekend (France and Spain specifically) have been released by two risk modeling firms. AIR Worldwide and EQECAT have both released their official figures. The loss estimates are quite different as is usual in these cases, we expect the final losses to sit somewhere in the middle of these two estimates.
AIR Worldwide estimate losses to be somewhere between $462m and $924m in France, while EQECAT estimates somewhere between $1.06b and $3.3b. Note that those estimates are both for France and we expect not dissimilar figures to come from Spain.
Final loss figures will be some weeks off by the time all the damage is assessed and claims received. However the figures above do demonstrate the possibility of catastrophe bonds being exposed to losses given the magnitude of loss expected."
28 January 2009
Munich Re sees piracy pushing up marine premiums
Reuters: Munich Re sees piracy pushing up marine premiums: "By Danilo Masoni
TURIN, Italy Jan 28 (Reuters) - Munich Re (MUVGn.DE) expects insurance premiums against high sea piracy to rise, as well as the risk of piracy spreading in the world, the German company's head of marine insurance Dieter Berg said.
At a UN conference on piracy on Wednesday, International Maritime Bureau Director Pottengal Mukundan told Reuters the arrival of foreign navies in the last two months has cut attacks by pirates off the Somali coast.
Speaking on the margins of the conference, Berg told Reuters 'we certainly have to watch what is going on carefully. Naval ships are down there only since early December'.
'I think at the moment insurance rates are on the rise and they have to rise. Also claims have to be paid', he said.
Berg expressed concerns that attempts to hijack ships could spread to other areas such as southeast Asia and the eastern coast of Latin America."
TURIN, Italy Jan 28 (Reuters) - Munich Re (MUVGn.DE) expects insurance premiums against high sea piracy to rise, as well as the risk of piracy spreading in the world, the German company's head of marine insurance Dieter Berg said.
At a UN conference on piracy on Wednesday, International Maritime Bureau Director Pottengal Mukundan told Reuters the arrival of foreign navies in the last two months has cut attacks by pirates off the Somali coast.
Speaking on the margins of the conference, Berg told Reuters 'we certainly have to watch what is going on carefully. Naval ships are down there only since early December'.
'I think at the moment insurance rates are on the rise and they have to rise. Also claims have to be paid', he said.
Berg expressed concerns that attempts to hijack ships could spread to other areas such as southeast Asia and the eastern coast of Latin America."
Willis Re Appoints 17 Carvill Brokers, including co-CEO's, to Drive Growth in US, UK
Source: Willis.com: "Willis Re Appoints 17 Specialty Brokers to Drive Growth in US, UK
London, January 28, 2009 - Willis Re, the re-insurance arm of global broker Willis Group Holdings (NYSE:WSH), today announced the appointment of 17 professionals to extend the global growth of the unit's specialty lines business. The brokers, currently with specialty reinsurance broker Carvill, will join Willis Re starting next week as each individual discharges their current obligations with Carvill. The new associates will be based out of Willis Re's US and UK offices.
Among those joining Willis Re are John Cavanagh, David Thomas and Andrew Newman. Cavanagh and Thomas, joint CEOs of Carvill Group, have 34 and 29 years of experience, respectively, in reinsurance broking across diverse classes of specialty business. Newman, a Director of Carvill London, Ltd., brings 27 years of experience to Willis with a particular acumen in the casualty segment.
Commenting on the appointments, Joe Plumeri, Chairman and CEO of Willis, said: 'The addition of this outstanding group of reinsurance professionals bolsters our specialty capabilities and gives us new growth opportunities in all of our major market segments. With the ongoing evolution in the capital markets, there is a heightened need for expert advisory and execution skills in specialty reinsurance, and our new colleagues - with their extensive experience and knowledge of the marketplace - complement our position in this important area. We are delighted to welcome John, David, Andrew and the rest of the team to Willis.'
Peter Hearn, Chief Executive Officer of Willis Re, said: 'These are some of the most talented and experienced people in our industry, and the capabilities and business relationships they bring to Willis Re will prove to be a major asset in our drive to capitalize on the opportunities ahead in this business class. Our specialty practices continue to evolve as a world-class business line for Willis Re and they underline our continuing efforts to be the world's leading reinsurance intermediary.'"
London, January 28, 2009 - Willis Re, the re-insurance arm of global broker Willis Group Holdings (NYSE:WSH), today announced the appointment of 17 professionals to extend the global growth of the unit's specialty lines business. The brokers, currently with specialty reinsurance broker Carvill, will join Willis Re starting next week as each individual discharges their current obligations with Carvill. The new associates will be based out of Willis Re's US and UK offices.
Among those joining Willis Re are John Cavanagh, David Thomas and Andrew Newman. Cavanagh and Thomas, joint CEOs of Carvill Group, have 34 and 29 years of experience, respectively, in reinsurance broking across diverse classes of specialty business. Newman, a Director of Carvill London, Ltd., brings 27 years of experience to Willis with a particular acumen in the casualty segment.
Commenting on the appointments, Joe Plumeri, Chairman and CEO of Willis, said: 'The addition of this outstanding group of reinsurance professionals bolsters our specialty capabilities and gives us new growth opportunities in all of our major market segments. With the ongoing evolution in the capital markets, there is a heightened need for expert advisory and execution skills in specialty reinsurance, and our new colleagues - with their extensive experience and knowledge of the marketplace - complement our position in this important area. We are delighted to welcome John, David, Andrew and the rest of the team to Willis.'
Peter Hearn, Chief Executive Officer of Willis Re, said: 'These are some of the most talented and experienced people in our industry, and the capabilities and business relationships they bring to Willis Re will prove to be a major asset in our drive to capitalize on the opportunities ahead in this business class. Our specialty practices continue to evolve as a world-class business line for Willis Re and they underline our continuing efforts to be the world's leading reinsurance intermediary.'"
Chaucer to raise £75m in share placing
Source: Insurance Times - Chaucer to raise £75m in share placing: "Chaucer to raise £75m in share placing
Proceeds wil increase syndicate capacity and cover solvency deficits
The Lloyd’s insurer said £69m of the proceeds of the share placing would be deposited as Funds at Lloyd's to cover net solvency deficits, meet increased capital requirements arising from the movement of sterling against the US dollar and support new business growth
The remainder would enable Chaucer to increase the capacity of syndicate 1084 to £545 million for the 2009 year of account, an increase of £100 million or 22% on the 2008 capacity of £445 million.
Chaucer said the placing had been driven by the positive market outlook following market events in 2008, including the US windstorms and the broader global financial crisis, which have impacted the group as well as the wider insurance industry
The insurer added that it add had taken significant steps to de-risk its investment portfolio by reducing its exposure to equities and hedge funds. Further de-risking of current investment portfolio was intended during 2009.
“Given the outlook for underwriting conditions, combined with the rebalancing of Chaucer's investment portfolio, the board is optimistic about the future prospects of the group,” the company said in a statement to the Stock Exchange"
Proceeds wil increase syndicate capacity and cover solvency deficits
The Lloyd’s insurer said £69m of the proceeds of the share placing would be deposited as Funds at Lloyd's to cover net solvency deficits, meet increased capital requirements arising from the movement of sterling against the US dollar and support new business growth
The remainder would enable Chaucer to increase the capacity of syndicate 1084 to £545 million for the 2009 year of account, an increase of £100 million or 22% on the 2008 capacity of £445 million.
Chaucer said the placing had been driven by the positive market outlook following market events in 2008, including the US windstorms and the broader global financial crisis, which have impacted the group as well as the wider insurance industry
The insurer added that it add had taken significant steps to de-risk its investment portfolio by reducing its exposure to equities and hedge funds. Further de-risking of current investment portfolio was intended during 2009.
“Given the outlook for underwriting conditions, combined with the rebalancing of Chaucer's investment portfolio, the board is optimistic about the future prospects of the group,” the company said in a statement to the Stock Exchange"
Sovereign wealth funds bid for AIG aircraft leasing unit
Source: The Daily Mail - Sovereign wealth funds bid for AIG aircraft leasing unit | Mail Online: "Embattled insurer American International Group is understood to have found potential buyers for its aircraft leasing unit.
Bids are said to have come from a range of investors including sovereign wealth funds in Singapore, China and the Middle East.
Among those interested in the business, International Lease Finance, are Singapore's Temasek, Dubai's investment arm Istithmar World, the Kuwait Investment Authority and China Investment Corp, insiders told Reuters.
American International Group
Potential buyers: Embattled insurer American International Group has received bids from sovereign wealth funds for its aircraft leasing unit
Private-equity firms including Carlyle Group, TPG Capital and Kohlberg Kravis Roberts are also said to be bidding."
Bids are said to have come from a range of investors including sovereign wealth funds in Singapore, China and the Middle East.
Among those interested in the business, International Lease Finance, are Singapore's Temasek, Dubai's investment arm Istithmar World, the Kuwait Investment Authority and China Investment Corp, insiders told Reuters.
American International Group
Potential buyers: Embattled insurer American International Group has received bids from sovereign wealth funds for its aircraft leasing unit
Private-equity firms including Carlyle Group, TPG Capital and Kohlberg Kravis Roberts are also said to be bidding."
Polish Re ratings rise after Fairfax buyout
Source: Global Reinsurance - Polish Re ratings rise after buyout: "Standard & Poor's Ratings Services said today that it raised its insurer financial strength and counterparty credit ratings on Polskie Towarzystwo Reasekuracji S.A. (Polish Re) to 'BBB' from 'BBB-'. At the same time, the ratings were removed from CreditWatch, where they had been placed with positive implications on Sept. 8, 2008. The outlook is stable.
This reflects one notch of group support in the ratings following the successfully completed acquisition of the company by Fairfax Financial Holdings Ltd. (BB+/Stable/--; main operating companies are rated BBB+/Stable/--)."
This reflects one notch of group support in the ratings following the successfully completed acquisition of the company by Fairfax Financial Holdings Ltd. (BB+/Stable/--; main operating companies are rated BBB+/Stable/--)."
State Farm to pull out of Florida property insurance
Source: Artemis - State Farm to pull out of Florida property insurance: "The inevitable appears to be happening. State Farm have announced that they intend to leave the Florida property insurance market within two years. This has been on the cards for some time as State Farm has consistently been battling with insurance regulators over proposed rate hikes which State Farm said they needed in such a hurricane affected market. So that’s 703,000 homeowner policies which will be up for grabs to aspiring property market entrants and participants.
Is anybody going to want to take on that risk? If State Farm feels it’s unprofitable at current rate levels and the regulators don’t see the need to increase those rates, how is anyone going to be able to come in and offer coverage to replace State Farm policies?
One possibility would be Citizens, the state run insurance pool and insurer of last resort. However, that might put undue pressure on the Florida Hurricane Catastrophe Fund (itself under increasing pressure of late).
Another possibility would be some new entrant who effectively hedges their risks against hurricane losses through the use of capital market instruments. That could happen, but given the rate rises that State Farm were requesting of 47%, it seems unlikely anyone in the private sector could make this profitable."
Is anybody going to want to take on that risk? If State Farm feels it’s unprofitable at current rate levels and the regulators don’t see the need to increase those rates, how is anyone going to be able to come in and offer coverage to replace State Farm policies?
One possibility would be Citizens, the state run insurance pool and insurer of last resort. However, that might put undue pressure on the Florida Hurricane Catastrophe Fund (itself under increasing pressure of late).
Another possibility would be some new entrant who effectively hedges their risks against hurricane losses through the use of capital market instruments. That could happen, but given the rate rises that State Farm were requesting of 47%, it seems unlikely anyone in the private sector could make this profitable."
AIG offers $450 million to keep Financial Products staff-report
SOURCE: Reuters
AIG offers $450 million to keep unit staff-report
NEW YORK, Jan 27 (Reuters) - Insurer American International Group Inc (AIG) (AIG.N) offered about $450 million in retention bonuses to employees of a financial unit responsible for most of its $42.5 billion in losses in the last year, according to Bloomberg News, citing two people familiar with the situation.
The payments were offered to about 400 employees of AIG Financial Products (AIGFP), according to the report on Tuesday.
AIGFP's heavy losses on toxic mortgage debt left AIG on the verge of bankruptcy, forcing it to seek a taxpayer-funded rescue last September that has since swelled to $150 billion.
AIG spokeswoman Christina Pretto said the retention bonus scheme had been in place for nearly a year, pre-dating the federal rescue. It was instituted under then-chief executive Martin Sullivan, who left AIG last June.
AIG offers $450 million to keep unit staff-report
NEW YORK, Jan 27 (Reuters) - Insurer American International Group Inc (AIG) (AIG.N) offered about $450 million in retention bonuses to employees of a financial unit responsible for most of its $42.5 billion in losses in the last year, according to Bloomberg News, citing two people familiar with the situation.
The payments were offered to about 400 employees of AIG Financial Products (AIGFP), according to the report on Tuesday.
AIGFP's heavy losses on toxic mortgage debt left AIG on the verge of bankruptcy, forcing it to seek a taxpayer-funded rescue last September that has since swelled to $150 billion.
AIG spokeswoman Christina Pretto said the retention bonus scheme had been in place for nearly a year, pre-dating the federal rescue. It was instituted under then-chief executive Martin Sullivan, who left AIG last June.
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