Hannover Re predicts good 2009, ROE of 15-20 pct

Hannover Re predicts good 2009
"FRANKFURT, Feb 3 (Reuters) - Hannover Re predicted on Tuesday a return on equity of up to 20 percent in 2009, as the financial crisis ends a downward spiral in reinsurance prices.
'We expect return on equity of 15-20 percent,' Chief Executive Wilhelm Zeller said, adding this corresponded to net profit of almost 700 million euros ($900 million), including the purchase of a life reinsurance portfolio unveiled last month.
Hannover Re has not yet published earnings for 2008, but has described it as a 'lost year' due to the financial crisis. 'Our company has weathered the storm on financial markets,' Zeller said, adding that the company aimed to pay out 35-40 percent of net profit as a dividend for 2009.
While the financial crisis has hit investment income in the insurance industry, it has indirectly helped reinsurers like Hannover, Munich Re and Swiss Re by raising demand for risk cover from their insurance company clients.
Hannover Re, the world's fourth-biggest reinsurer, said the downward trend in reinsurance prices had been halted in negotiations over new contracts that started in January.
The company obtained premium increases in many markets and even double-digit percentage growth in some catastrophe business as well as credit and surety reinsurance.
'Rate increases in worldwide catastrophe business were attainable," the company said in a statement.

"However, prices were only partly risk-adequate. As a consequence, Hannover Re slightly reduced its business."

Source: guardian.co.uk

AIG, CV Starr International set for court battle

AIG, Starr International set for court battle
"NEW YORK, Feb 2 (Reuters) - American International Group Inc (AIG.N) on Monday filed court papers laying out its case for seeking to reclaim a long-contested block of AIG stock from privately held Starr International Co, a company controlled by AIG's former CEO, Maurice Greenberg.

AIG is pursuing its claim for shares held by Starr, claiming breach of fiduciary duty, at the same time as it deals with the more pressing matter of repaying a $60 billion taxpayer loan after the U.S. government stepped in to save it from collapse under bad mortgage bets.

Starr's ownership of AIG stock has been in contention since early 2005 when Greenberg left AIG. The firm held about 290 million shares at the time. It has sold about 80 million shares since, according to Reuters data.

A trial to settle the matter is scheduled to begin in Manhattan on Mar. 2.

'The trial will decide who is entitled to the large block of AIG stock ... Maurice Greenberg, the former AIG chief executive who misappropriated the stock when he left AIG four years ago under investigation for accounting fraud; or the current and future employees of AIG for whom the stock was put in trust nearly 40 years ago,' said AIG's pretrial brief, prepared by law firm Paul, Weiss, Rifkind, and filed in Manhattan federal court late on Monday."

Source: Reuters

A.M. Best Places Ratings of Ironshore Inc. Under Review with Negative Implications

A.M. Best Places Ratings of Ironshore Inc. Under Review with Negative Implications - MarketWatch: "LDWICK, N.J., Feb 03, 2009 (BUSINESS WIRE) -- A.M. Best Co. has placed the issuer credit rating (ICR) of 'bbb-' of Ironshore Inc. (Ironshore) (Cayman Islands) and the ICR of 'a-' and financial strength rating of A- (Excellent) of its operating subsidiaries under review with negative implications. The operating subsidiaries include Ironshore Insurance Ltd., Ironshore Reinsurance Ltd (both of Bermuda), Ironshore Indemnity Inc. (Minneapolis, MN) and Ironshore Specialty Insurance Company (Phoenix, AZ).
The under review status reflects Ironshore's material deviation from its original business plan and the risks in implementing key components of its new plan given current market conditions. While A.M. Best believes the change in business plan will ultimately enhance the Ironshore franchise, executing key components of the plan will be challenging over the short term due to market conditions. The negative implications imply that the current ratings could be affirmed, or should the revised business and capital plans not be executed as expected, downward pressure on the current ratings could result. However, given the prior experience of the new management team in executing similar strategies, A.M. Best expects the ratings will be affirmed once the key components"

Source: A.M. Best via MarketWatch

Hardy expects full year pre-tax profits to be not less than £22 mln

"Hardy Underwriting Bermuda expects full year pre-tax profits to be not less than £22 mln

(RTTNews) - Hardy Underwriting Bermuda Ld (HDU.L: News ) said Tuesday that it expects trading results for the full year to be ahead of market expectations.

The Group expects profits before tax to be not less than £22 million and Gross written premiums to be in excess of £170 million. The property treaty, aviation and marine accounts all performed strongly and the Group particularly benefited from the strengthening of the major currencies against sterling.

Hardy's original estimate for losses arising from hurricanes Gustav and Ike was $23 million after all reinsurance recoveries and reinstatement premiums. The Group's estimate has now reduced to $17.6 million.
As at 1 January 2009, the Group had written total premium income of £69.1 million, a 41.6% increase on the prior year. Overall renewal rates for the Group have increased by 5.2%."

Source: RTTNews

Axis Capital grabs senior Chubb exec to lead new division

Reinsurance - Axis Capital grabs senior Chubb exec to lead new division: "Axis Capital grabs senior Chubb exec to lead new division

AXIS Capital, the Bermudian (re)insurer, said that it is to form an accident & health division. Christopher DiSipio, will lead the division.

DiSipio, who worked as chief operating officer of Chubb's accident, health and life unit, has been given the position of chief executive officer.

According to Axis, DiSipio will 'lead the establishment of Axis Insurance's accident & health division in the US market and expand this presence in the UK, European, Canadian, Australian and Asian markets over time.'

Axis Insurance's accident & health division will offer corporate personal accident and business travel products as well as specialty and catastrophe health products and ancillary P&C coverages."

Source: Reinsurance Magazine

Markel reports net loss in Q4

Markel reports net loss in Q4

Markel, which is engaged in marketing and underwriting specialty insurance products and programs, has reported a net loss of $32.71 million, or $3.33 per diluted share, for the fourth quarter of 2008, as compared to a net income of $93.44 million, or $9.36 per diluted share, for the fourth quarter of 2007.

For the fourth quarter of 2008, total operating revenues were $357.62 million, compared to $584.95 million for the same quarter of 2007.

For the year ended December 31, 2008, net loss was $58.77 million, or $5.95 per diluted share, as compared to a net income of $405.67 million, or $40.64 per diluted share, for the year ended December 31, 2007. Total operating revenues for the year 2008 dropped to $1.9 billion from $2.48 billion for the year 2007.

At December 31, 2008, invested assets decreased 11% to $6.9 billion from $7.8 billion at December 31, 2007. Equity securities and investments in affiliates were $1.2 billion, or 17% of invested assets, at December 31, 2008, compared to $1.9 billion, or 25% of invested assets, at December 31, 2007."

Source: Insurance Business Review

JLT: Middle East Contractors Should Be Wary of Competitive Insurance Pressure

JLT: Middle East Contractors Should Be Wary of Competitive Insurance Pressure: "Development projects in the Middle East continue to be financed at a high rate, but the insurance implications for those projects are becoming more complex as the construction funding emphasis shifts from private to public-private arrangements, according to broker Jardine Lloyd Thompson Ltd..

Tony Rastall, a JLT partner, said in a presentation at the Middle East Project Finance 2009 conference in Bahrain that while there is still demand for insurance for major Middle East projects, given the global financial crisis and the fall in oil prices, the shift to public-private financing for construction of infrastructure such as roads, bridges and tunnels is creating greater complexity for insurers.

'Potential lenders to construction projects are not surprisingly becoming increasingly risk-averse and insurance plays a key role in providing the assurance they need,' Rastall said in his conference presentation. 'At the same time, we are seeing a shift to public-private infrastructure projects which often have more complex insurance requirements and the need to demonstrate high levels of risk management.'

Rastall said the pool of insurance capacity has grown, while the supply of projects in decreasing, "so the competition for the remaining business will continue." While regional insurers are likely to quote lower rates than international insurers, international capacity "remains important" for the largest and most complex jobs, he said"

Source: AMB via Trading Markets

U.S. GAO Probing If Fed Cash Gives AIG an Unfair Edge

"WASHINGTON —The Government Accountability Office has launched a probe into whether American International Group’s federal funding lifeline is providing it with an unfair advantage in the pricing of commercial insurance products.

The probe was launched at the request of Rep. Paul Kanjorski, D-Pa.., chairman of the Capital Markets Subcommittee, and Rep. Spencer Bachus, R-Ala., ranking member of the parent House Financial Services Committee. The pair disclosed their request on Friday night, several hours after the GAO announced its plans.

In addition to a look at market competition, they said they had also asked the GAO to investigate what the likelihood is that the government will recoup the billions it has loaned to AIG in exchange for a 79.9 percent government interest.

Specifically, they asked the GAO to determine “whether or not the AIG rescue package has resulted in measurable progress toward achieving the federal government’s stated goals and objectives.”

They said they were “particularly interested in your analysis of any setbacks experienced as well as any challenges projected in recouping federal taxpayer funds,” the letter said."

Source: National Underwriter Property & Casualty

Marsh Purchases Remaining Stake in Colombia's DeLima

MMC Purchases Remaining Stake in Companias Delima S.A


NEW YORK, February 2, 2009 — Marsh & McLennan Companies, Inc. (MMC) today said it has purchased the remaining 49% stake in the firm Companias DeLima S.A., headquartered in Cali, Colombia, from the company's minority partners. The transaction gives MMC full ownership of the firm, allowing it to expand the business already conducted in the country through its Marsh, Mercer and Guy Carpenter operating units.

Terms of the deal were not disclosed. Under the agreement, Ernesto de Lima will continue as Chairman of the Board of DeLima Marsh, the insurance unit of Companias DeLima. Jorge Alberto Uribe will also maintain his current involvement with the company. Gonzalo Sanin will continue as Chief Executive Officer, managing DeLima Marsh's day-to-day operations.

Companias DeLima has approximately 1,000 employees in Colombia, in locations including Bogota, Cali and Medellin. DeLima Marsh is the largest insurance broker in Colombia.

In June 1999, Marsh, then operating as J&H Marsh & McLennan, Inc., purchased a majority interest (51%) in Companias DeLima, and merged the two companies' insurance businesses in Colombia to form DeLima Marsh. The remaining reinsurance and human resources practices of Companias DeLima were"

Source: MMC News