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FSA deputy chairman resigns: "The deputy chairman of Britain's Financial Services Authority resigned Wednesday following allegations that as the former head of HBOS PLC he fired a manager who warned the bank was taking too many risks. The bank later needed a taxpayer-funded bailout.
James Crosby, who has also worked as an adviser to Prime Minister Gordon Brown's government alongside his role at the market regulator, said he was confident there was 'no substance' in the allegations but resigned to protect the agency's reputation.
Crosby's departure followed claims by Paul Moore, the former head of regulatory risk at HBOS, that his warnings to executives including Crosby that the bank was growing too rapidly were dismissed and ultimately led to him being fired in 2005."
Source: Forbes
11 February 2009
Fitch May Downgrade Half of Insurers
Fitch May Downgrade Half of Insurers: "More than half of insurers worldwide may be downgraded by Fitch Ratings this year on declines in the value of their investments backing policies.
'Many insurers are feeling significant pressures from the financial crisis,' the ratings firm said yesterday in a statement. The industry has 'diminished financial flexibility as capital markets remain closed to a number of companies'.
Insurance companies have reported profit declines and quarterly losses as the global economic slump pushes down the value of equities, corporate debt and mortgage-related investments. In the US, life insurers including Hartford Financial Services Group Inc. and Genworth Financial Inc. have applied for capital injections from Treasury as private investors shun industry stocks.
'Fitch expects the extent of downgrades to be greater among life insurers' than property-casualty companies, the rating firm said. 'If provided, government funded capital or other forms of financial support could potentially temper downward ratings actions.'"
Source: Bloomberg via The Royal Gazette
'Many insurers are feeling significant pressures from the financial crisis,' the ratings firm said yesterday in a statement. The industry has 'diminished financial flexibility as capital markets remain closed to a number of companies'.
Insurance companies have reported profit declines and quarterly losses as the global economic slump pushes down the value of equities, corporate debt and mortgage-related investments. In the US, life insurers including Hartford Financial Services Group Inc. and Genworth Financial Inc. have applied for capital injections from Treasury as private investors shun industry stocks.
'Fitch expects the extent of downgrades to be greater among life insurers' than property-casualty companies, the rating firm said. 'If provided, government funded capital or other forms of financial support could potentially temper downward ratings actions.'"
Source: Bloomberg via The Royal Gazette
XL Capital Reports 4Q $1.43 Billion Loss; Plans to Cut 10% of Work Force
XL Capital 4Q profit widens to $1.43 billion: "XL Capital Ltd. said late Tuesday its fourth-quarter loss widened as it recorded more than $1 billion in impairment charges. Considering an expected slowdown in business, the insurer is also planning to shed 10 percent of its work force.
XL Capital lost $1.43 billion, or $4.36 per share, during the quarter ended Dec. 31, compared with a loss of $1.22 billion, or $6.88 per share, during the same quarter a year earlier. The loss per share shrank despite an increase in the overall quarterly loss because XL Capital had more shares outstanding during the most recent quarter.
The fourth-quarter loss includes a $990 million noncash charge for impairment of goodwill and $608.5 million in other impairment charges, including a restructuring of the company's investment portfolio. XL Capital also lost $214.2 million from investment fund affiliates during the quarter.
The goodwill charge was primarily related to XL Capital's 1998 acquisition of Mid-Ocean.
Operating income for the fourth quarter, which excludes special goodwill and impairment charges, grew to $189.5 million, or 58 cents per share, from $98 million, or 55 cents per share, during the final quarter in 2007.
Analysts polled by Thomson Reuters, on average, forecast earnings of 38 cents per share for the quarter. Analysts typically exclude special charges in their estimates.
With operating profit beating analysts' expectations, shares of XL Capital spiked in premarket trading Wednesday. Shares rose 43 cents, or 14.8 percent, to $3.33. XL Capital shares closed Tuesday at $2.90.
Net premiums written during the quarter fell 13 percent to $1.11 billion from $1.28 billion during the final quarter in 2007. The insurer said premiums fell during the quarter primarily due to competitive market conditions that led to lower pricing.
XL Capital said it expects written premiums to continue to decline in 2009 amid the ongoing economic slowdown. Because of the expected slowdown in business, XL Capital is taking actions to cut expenses, including plans to slash its work force by about 10 percent during the year."
Source: Yahoo! Finance
XL Capital lost $1.43 billion, or $4.36 per share, during the quarter ended Dec. 31, compared with a loss of $1.22 billion, or $6.88 per share, during the same quarter a year earlier. The loss per share shrank despite an increase in the overall quarterly loss because XL Capital had more shares outstanding during the most recent quarter.
The fourth-quarter loss includes a $990 million noncash charge for impairment of goodwill and $608.5 million in other impairment charges, including a restructuring of the company's investment portfolio. XL Capital also lost $214.2 million from investment fund affiliates during the quarter.
The goodwill charge was primarily related to XL Capital's 1998 acquisition of Mid-Ocean.
Operating income for the fourth quarter, which excludes special goodwill and impairment charges, grew to $189.5 million, or 58 cents per share, from $98 million, or 55 cents per share, during the final quarter in 2007.
Analysts polled by Thomson Reuters, on average, forecast earnings of 38 cents per share for the quarter. Analysts typically exclude special charges in their estimates.
With operating profit beating analysts' expectations, shares of XL Capital spiked in premarket trading Wednesday. Shares rose 43 cents, or 14.8 percent, to $3.33. XL Capital shares closed Tuesday at $2.90.
Net premiums written during the quarter fell 13 percent to $1.11 billion from $1.28 billion during the final quarter in 2007. The insurer said premiums fell during the quarter primarily due to competitive market conditions that led to lower pricing.
XL Capital said it expects written premiums to continue to decline in 2009 amid the ongoing economic slowdown. Because of the expected slowdown in business, XL Capital is taking actions to cut expenses, including plans to slash its work force by about 10 percent during the year."
Source: Yahoo! Finance
Max Capital Group Ltd. Reports 4Q Loss and Full Year Losses
Max Capital Group Ltd. Reports Fourth-Quarter and Year-End 2008 Results : "Max Capital Group Ltd. today reported a net loss for the three months ended December 31, 2008, of $94.1 million, or $1.67 per diluted share, compared to net income of $62.4 million, or $1.00 per diluted share, for the three months ended December 31, 2007. Net operating loss, which represents net income or loss excluding after-tax net realized gains and losses on fixed maturities and foreign exchange, for the three months ended December 31, 2008, was $85.0 million, or $1.51 per diluted share, compared to net operating income of $63.4 million, or $1.01 per diluted share, for the three months ended December 31, 2007.
For the year ended December 31, 2008, the Company had a net loss of $175.3 million, or $3.10 per diluted share, compared to net income of $303.2 million, or $4.75 per diluted share, for the year ended December 31, 2007. For the year ended December 31, 2008, the Company had a net operating loss of $146.7 million, or $2.59 per diluted share, compared to net operating income of $307.2 million, or $4.81 per diluted share, for the year ended December 31, 2007."
Source: MarketWatch
For the year ended December 31, 2008, the Company had a net loss of $175.3 million, or $3.10 per diluted share, compared to net income of $303.2 million, or $4.75 per diluted share, for the year ended December 31, 2007. For the year ended December 31, 2008, the Company had a net operating loss of $146.7 million, or $2.59 per diluted share, compared to net operating income of $307.2 million, or $4.81 per diluted share, for the year ended December 31, 2007."
Source: MarketWatch
Marsh 4Q Profit Down 6 pct
Marsh & McLennan posts lower 4Q profit: "Marsh & McLennan Cos. on Wednesday said its profit slipped 6 percent in the fourth quarter.
The company said it saw significant declines in consulting revenues. Its adusted earnings beat Wall Street estimates and its shares rose nearly 10 percent in premarket trading.
The New York-based company reported it earned $80 million, or 15 cents per share, in the last three months of 2008. That's down from $85 million, or 16 cents per share, a year ago.
Earnings from continuing operations slid 19 percent to $73 million, or 14 cents per share, from $90 million, or 17 cents per share. On an adjusted basis, excluding one-time items, Marsh & McLennan said it earned 37 cents per share, up 54 percent from the year ago period.
Total revenue fell 8.7 percent to $2.66 billion."
Source: International Herald Tribune
The company said it saw significant declines in consulting revenues. Its adusted earnings beat Wall Street estimates and its shares rose nearly 10 percent in premarket trading.
The New York-based company reported it earned $80 million, or 15 cents per share, in the last three months of 2008. That's down from $85 million, or 16 cents per share, a year ago.
Earnings from continuing operations slid 19 percent to $73 million, or 14 cents per share, from $90 million, or 17 cents per share. On an adjusted basis, excluding one-time items, Marsh & McLennan said it earned 37 cents per share, up 54 percent from the year ago period.
Total revenue fell 8.7 percent to $2.66 billion."
Source: International Herald Tribune
Hiscox Warns Reinsurance Having an Effect on Rates
Hiscox warns on rates: "The rise in the cost of reinsurance renewals is having a knock-on effect on rates in the primary market, says Hiscox.
The company said rates for upstream energy – the extraction, production and distribution of oil and gas – had increased in the “double-digits” during 2009. The increases could also be attributed to the cost of claims for hurricanes Gustav and Ike.
Simon Williams, head of marine and energy, said increases would depend on the client and where the assets were based."
Source: Insurance Times
The company said rates for upstream energy – the extraction, production and distribution of oil and gas – had increased in the “double-digits” during 2009. The increases could also be attributed to the cost of claims for hurricanes Gustav and Ike.
Simon Williams, head of marine and energy, said increases would depend on the client and where the assets were based."
Source: Insurance Times
Catastrophe Bonds Return a Profit; Which in Times Like These is Rare
Catastrophe bonds return a profit; which in times like these is rare: "Despite all the negative press about securitization, reports of large catastrophe losses, discussion of the failure of Lehman Brothers and the default of Willow Re catastrophe bonds and insurance-linked securities continue to provide returns.
These returns, while not very large, are significantly higher than comparable securities have performed of late. The latest comparison being made (in the Bloomberg article about Willow Re) is that catastrophe bonds have returned 1.74 percent over the last year (as measured on the Swiss Re Cat Bond Total Return Index) while similarly rated high-yield bonds have declined in value causing investors a loss of over 20 percent. That’s quite a difference between two securities which used to track much more closely."
Source: Artemis.bm
These returns, while not very large, are significantly higher than comparable securities have performed of late. The latest comparison being made (in the Bloomberg article about Willow Re) is that catastrophe bonds have returned 1.74 percent over the last year (as measured on the Swiss Re Cat Bond Total Return Index) while similarly rated high-yield bonds have declined in value causing investors a loss of over 20 percent. That’s quite a difference between two securities which used to track much more closely."
Source: Artemis.bm
Kiln Appoints Wray Managing Director in Asia
Kiln Appoints New Managing Director in Asia: "Kiln Group [51294] has appointed Neil Wray as regional managing director for Asia with the aim to grow the group's specialized underwriting products and services in the region.
The UK-based insurance and reinsurance underwriter has operated in Asia for two years with offices in Hong Kong and Singapore. 'I believe Asia's scale and diversity offer significant potential for long term growth,' said Wray.
In spite of global financial meltdown, Wray said Asian markets are seeing growth in the region, and the company is 'optimistic' for its development.
In Asia, certain business lines have slowed down because of the economic crisis. Wray said the focus of Kiln Asia is more on specialized lines to meet niche market needs.
For its expansion plan, Wray said Kiln Asia is taking a cautiously optimistic approach for products and market development in Asia. The company is looking into markets such as north Asia, China and South Korea. For emerging markets such as Vietnam, Wray said more study and analysis are needed."
Source: AM Vest's via TMC Net
The UK-based insurance and reinsurance underwriter has operated in Asia for two years with offices in Hong Kong and Singapore. 'I believe Asia's scale and diversity offer significant potential for long term growth,' said Wray.
In spite of global financial meltdown, Wray said Asian markets are seeing growth in the region, and the company is 'optimistic' for its development.
In Asia, certain business lines have slowed down because of the economic crisis. Wray said the focus of Kiln Asia is more on specialized lines to meet niche market needs.
For its expansion plan, Wray said Kiln Asia is taking a cautiously optimistic approach for products and market development in Asia. The company is looking into markets such as north Asia, China and South Korea. For emerging markets such as Vietnam, Wray said more study and analysis are needed."
Source: AM Vest's via TMC Net
Scottish Re CFO Leaves the Company
Scottish Re Announces Change to Executive Management: "Scottish Re Group Limited (Pink Sheets:SKRRF) “Scottish Re” or the “Company”, announced today that Terry Eleftheriou has resigned from his position as Executive Vice President and Chief Financial Officer, effective February 09, 2009, to pursue other interests. Mr. Eleftheriou had served as the Company’s Chief Financial Officer since September 2007."
Source: Scottish Re
Source: Scottish Re
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