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Investment losses hit Odyssey Re FY profits: "Odyssey Re, the US (re)insurer said that full year net income fell narrowly to $543.1 m, compared to $587.2 m, for the year ended December 31, 2007.
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Fourth quarter net income fell to $107.4m, from $243m, for the corresponding quarter in 2007.
Operating income after tax was $93.1m in 2008 compared to operating income after tax of $236.8 m in 2007. Operating income after tax in the fourth quarter fell to $24.9 m, from $59.5m in the quarter before.
The results were hit by $450m of net realised investment losses, up from around $350m the year before.
Gross premiums written for the quarter ended December 31, 2008 were $494.1m, a decrease of 5.9% compared to $525.3m for the quarter ended December 31, 2007. This reflects a 9.3% increase in the Company’s insurance premiums compared to the fourth quarter of 2007, which is more than offset by a decline of 13.3% in the Company’s worldwide reinsurance premiums. Net premiums written during the fourth quarter of 2008 were $437.7m, a decrease of 9.3% compared to fourth quarter of 2007 net premiums written of $482.4m, resulting from an increase in reinsurance purchased related to our insurance business.
The combined ratio for the year ended December 31, 2008 was 101.2%, which included 11.7 combined ratio points related to current year catastrophe losses, compared to 95.5% for the year ended December 31, 2007, which included 4.7 combined ratio points related to current year catastrophe events. The combined ratio for the fourth quarter of 2008 was 93.9%, compared to 93.7% for the fourth quarter of 2007."
Post Online
22 February 2009
Groups form for AIG aircraft leasing unit bid
Groups form for AIG aircraft leasing unit bid: "Carlyle Group is in one of at least two groups emerging to bid for American International Group Inc.'s aircraft leasing business, while Kohlberg Kravis Roberts & Co. and Singapore's Temasek Holdings Pte Ltd. are no longer interested, according to sources.
Private equity firms Greenbriar Equity Group L.L.C. and Onex Corp. are leading a second group to bid for International Lease Finance Corp., people familiar with the matter said.
Sovereign wealth fund Temasek and private equity firm KKR follow TPG Capital L.P. in bowing out after initially expressing an interest.
Other parties remain interested in the business, one of the sources said, adding that many bidders were talking to each other about working together to buy the unit."
Business Insurance
Private equity firms Greenbriar Equity Group L.L.C. and Onex Corp. are leading a second group to bid for International Lease Finance Corp., people familiar with the matter said.
Sovereign wealth fund Temasek and private equity firm KKR follow TPG Capital L.P. in bowing out after initially expressing an interest.
Other parties remain interested in the business, one of the sources said, adding that many bidders were talking to each other about working together to buy the unit."
Business Insurance
Scottish Re Appoints Ratajczak as President and CEO for North America
Scottish Re Announces North America Management Change: "Scottish Re announced today that it has appointed Meredith Ratajczak as President and Chief Executive Officer of the Company’s North American business. Meredith has been with Scottish Re since 2006 and has served as the Company’s Chief Actuary and Interim Chief Financial Officer for the North American business.
Prior to joining Scottish Re in 2006, Meredith was a Principal and Consulting Actuary at Milliman for nineteen years. She has also worked as an actuary for Investors Life Insurance Company of North America and Penn Mutual Life Insurance Company. Meredith served on the planning committee for the Valuation Actuary Symposium for twelve years, four of those years as Chairperson. She also served on the faculty of the Life and Health Qualifications Seminar for two years."
Business Wire
Prior to joining Scottish Re in 2006, Meredith was a Principal and Consulting Actuary at Milliman for nineteen years. She has also worked as an actuary for Investors Life Insurance Company of North America and Penn Mutual Life Insurance Company. Meredith served on the planning committee for the Valuation Actuary Symposium for twelve years, four of those years as Chairperson. She also served on the faculty of the Life and Health Qualifications Seminar for two years."
Business Wire
N.Y.'s Dinallo: AIG Shouldn't Be Nationalized 'Yet''
AIG N.Y.'s Dinallo: AIG Shouldn't Be Nationalized 'Yet': "New York Insurance Superintendent Eric Dinallo says American International Group Inc. should not be fully nationalized, though he concedes a fire sale of all of the company's current assets likely wouldn't yield enough to pay off its more than $150 billion in federal loans and guaranties.
'I don't think AIG should be fully nationalized yet; we need to see how this larger transaction plays out,' Dinallo said in an exclusive interview with BestWire. 'As to whether the loans are going to be paid off, I think it's a question that really is related to the markets. If the markets pick up, (Chairman) Ed Liddy has the time to wait a bit and wait for better market conditions.
'Of course, if you had to do all the sales right now, there would probably not be enough (to pay off the loans), but that's not what the plan is. The plan, I hope, is to wait for the markets to pick up significantly,' said Dinallo, AIG's primary domestic regulator.
According to a Feb. 19 filing by the Federal Reserve Bank of New York, interest on two Fed facilities established to unwind the company's credit default swaps and securities lending positions has grown to $158 million, up from $146 million a week earlier.
The $27.7 billion Maiden Lane III facility, established in November, was set up to purchase multisector collateralized debt obligations on which AIG wrote credit default swaps. The facility has thus accrued $5.05 billion in outstanding principal and interest that will be payable to AIG once its senior federal loans are paid off. The $18.6 billion Maiden Lane II facility, established in December, purchases residential mortgage-backed securities from AIG's U.S. securities lending reinvestment portfolio. It has accrued $1.01 billion in deferred payments and accrued interest eventually payable to AIG."
Trading Markets
'I don't think AIG should be fully nationalized yet; we need to see how this larger transaction plays out,' Dinallo said in an exclusive interview with BestWire. 'As to whether the loans are going to be paid off, I think it's a question that really is related to the markets. If the markets pick up, (Chairman) Ed Liddy has the time to wait a bit and wait for better market conditions.
'Of course, if you had to do all the sales right now, there would probably not be enough (to pay off the loans), but that's not what the plan is. The plan, I hope, is to wait for the markets to pick up significantly,' said Dinallo, AIG's primary domestic regulator.
According to a Feb. 19 filing by the Federal Reserve Bank of New York, interest on two Fed facilities established to unwind the company's credit default swaps and securities lending positions has grown to $158 million, up from $146 million a week earlier.
The $27.7 billion Maiden Lane III facility, established in November, was set up to purchase multisector collateralized debt obligations on which AIG wrote credit default swaps. The facility has thus accrued $5.05 billion in outstanding principal and interest that will be payable to AIG once its senior federal loans are paid off. The $18.6 billion Maiden Lane II facility, established in December, purchases residential mortgage-backed securities from AIG's U.S. securities lending reinvestment portfolio. It has accrued $1.01 billion in deferred payments and accrued interest eventually payable to AIG."
Trading Markets
Lloyd's has Stanford exposure but not for client funds
Lloyd's of London has Stanford exposure but not for client funds: "Lloyd's of London said it had sold insurance to the financial empire of Allen Stanford, but not to cover any client funds in the possible fraud the Texas billionaire has been charged with.
'We are aware that Stanford International Bank has insurance arrangements with the Lloyd's market,' the group said in an emailed statement on Saturday.
'Stanford International Bank's policies at Lloyd's do not extend to investors' funds,' it also said.
The group -- an insurance market that prides itself for its 17th-century roots -- did therefore not expect claims for any client funds hurt by the $8 billion (5.6 billion pound) possible scam.
Officials at Stanford's bank said deposits were insured through an agreement with Lloyd's of London, some customers swarming local offices in countries across the Caribbean and Latin-America said this week.
Lloyd's declined to say what other types of business lines it had sold to Stanford, who has handed in his passport to U.S. authorities after the fraud charges, but said it had not seen any claims from the bank so far."
Reuters
'We are aware that Stanford International Bank has insurance arrangements with the Lloyd's market,' the group said in an emailed statement on Saturday.
'Stanford International Bank's policies at Lloyd's do not extend to investors' funds,' it also said.
The group -- an insurance market that prides itself for its 17th-century roots -- did therefore not expect claims for any client funds hurt by the $8 billion (5.6 billion pound) possible scam.
Officials at Stanford's bank said deposits were insured through an agreement with Lloyd's of London, some customers swarming local offices in countries across the Caribbean and Latin-America said this week.
Lloyd's declined to say what other types of business lines it had sold to Stanford, who has handed in his passport to U.S. authorities after the fraud charges, but said it had not seen any claims from the bank so far."
Reuters
Former Swiss Re IT head hired for ACORD post
Former Swiss Re IT head hired for ACORD post: "Juergen Heck, formerly Head of Global IT Operations for Swiss Re has joined ACORD as its program director for Europe for the next several months.
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In his role at ACORD, Heck will focus on engaging, educating and facilitating relationships with insurers, brokers, reinsurers, solution providers and European standards organizations across the continent. The goal is to foster understanding and accelerate implementation of international standards to improve data flow across the industry.
'For years, Juergen has been an active and dedicated ACORD member working to enhance implementation of ACORD standards. Now, he's expanding that role as ACORD's presence increases in Europe. He's a perfect fit to help ACORD and we're thrilled to have him on our team,' said ACORD President and CEO Gregory A. Maciag.
Efforts including the Rueschlikon Initiative and Solvency II illustrate the need for data standards to improve data communication across the industry. Heck combines experience in these areas with a deep knowledge of ACORD standards - ideal assets to show the vital role of standards in the European insurance community."
Post Online
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In his role at ACORD, Heck will focus on engaging, educating and facilitating relationships with insurers, brokers, reinsurers, solution providers and European standards organizations across the continent. The goal is to foster understanding and accelerate implementation of international standards to improve data flow across the industry.
'For years, Juergen has been an active and dedicated ACORD member working to enhance implementation of ACORD standards. Now, he's expanding that role as ACORD's presence increases in Europe. He's a perfect fit to help ACORD and we're thrilled to have him on our team,' said ACORD President and CEO Gregory A. Maciag.
Efforts including the Rueschlikon Initiative and Solvency II illustrate the need for data standards to improve data communication across the industry. Heck combines experience in these areas with a deep knowledge of ACORD standards - ideal assets to show the vital role of standards in the European insurance community."
Post Online
Allianz announces von Weichs will become new CEO of Allianz Re
Allianz announces management changes: "Germany-based Allianz has announced that Wilfried Verstraete will become CEO of Euler Hermes, the credit insurance operation within the group, as of April 1, 2009.
Currently Mr Verstraete is serving as CFO of Allianz Global & Corporate Specialty (AGCS). As former CEO of Atradius, Mr Verstraete is an experienced credit insurance manager and well-positioned for his new assignment, said Allianz.
Mr Verstraete will take over this function from Clemens von Weichs, who will become CEO of Allianz Re, the reinsurance operation of Allianz SE, on April 1, 2009.
Jay Ralph, currently acting as CEO of Allianz Re, will concentrate on his responsibilities as chairman of Allianz Life of North America and closely co-operate with CEO Gary Bhojwani. Mr Ralph will continue to hold board positions at Fireman's Fund, Allianz of America, AGCS and Allianz Risk Transfer."
Insurance Business Review
Currently Mr Verstraete is serving as CFO of Allianz Global & Corporate Specialty (AGCS). As former CEO of Atradius, Mr Verstraete is an experienced credit insurance manager and well-positioned for his new assignment, said Allianz.
Mr Verstraete will take over this function from Clemens von Weichs, who will become CEO of Allianz Re, the reinsurance operation of Allianz SE, on April 1, 2009.
Jay Ralph, currently acting as CEO of Allianz Re, will concentrate on his responsibilities as chairman of Allianz Life of North America and closely co-operate with CEO Gary Bhojwani. Mr Ralph will continue to hold board positions at Fireman's Fund, Allianz of America, AGCS and Allianz Risk Transfer."
Insurance Business Review
RenaissanceRe Promotes Ian D. Branagan to Chief Risk Officer
RenaissanceRe Promotes Ian D. Branagan to Chief Risk Officer - : "RenaissanceRe Holdings Ltd. announced today that Senior Vice President Ian D. Branagan has been promoted to the position of Chief Risk Officer, effective immediately. In his new role, Mr. Branagan will also join the company's Executive Management Committee.
Neill Currie, Chief Executive Officer, said: 'Risk management is a key component of our long-term success and is at the core of all of our activities. Robust, forward-looking risk management is ever more critical given our ongoing growth and development. Ian has been a major contributor to the evolution of our risk management culture, systems and processes over the last ten years and he will bring his experience, expertise and dedicated focus to the position. I would like to thank Todd Fonner for his contributions in the Chief Risk Officer role over the last several years. Going forward, Todd will focus on his responsibilities as Chief Investment Officer and a member of our Executive Committee.'
As Chief Risk Officer, Mr. Branagan will be responsible for oversight and management of enterprise-wide risk management practices at RenaissanceRe, which are currently rated 'Excellent' by Standard & Poor's, the highest applicable ERM rating. Mr. Branagan joined RenaissanceRe in 1998 to open the company's Dublin office, later relocating to Bermuda with additional responsibilities for underwriting risk and modeling across RenaissanceRe's insurance and reinsurance operations. He has served as the Head of Group Risk Modeling since 2005. Prior to joining RenaissanceRe, Mr. Branagan led Applied Insurance Research Inc.'s (AIR) international activities, which included the development and marketing of AIR's cat models and tools. He also worked in the London market at DP Mann Limited, developing pricing and risk analytics."
MarketWatch
Neill Currie, Chief Executive Officer, said: 'Risk management is a key component of our long-term success and is at the core of all of our activities. Robust, forward-looking risk management is ever more critical given our ongoing growth and development. Ian has been a major contributor to the evolution of our risk management culture, systems and processes over the last ten years and he will bring his experience, expertise and dedicated focus to the position. I would like to thank Todd Fonner for his contributions in the Chief Risk Officer role over the last several years. Going forward, Todd will focus on his responsibilities as Chief Investment Officer and a member of our Executive Committee.'
As Chief Risk Officer, Mr. Branagan will be responsible for oversight and management of enterprise-wide risk management practices at RenaissanceRe, which are currently rated 'Excellent' by Standard & Poor's, the highest applicable ERM rating. Mr. Branagan joined RenaissanceRe in 1998 to open the company's Dublin office, later relocating to Bermuda with additional responsibilities for underwriting risk and modeling across RenaissanceRe's insurance and reinsurance operations. He has served as the Head of Group Risk Modeling since 2005. Prior to joining RenaissanceRe, Mr. Branagan led Applied Insurance Research Inc.'s (AIR) international activities, which included the development and marketing of AIR's cat models and tools. He also worked in the London market at DP Mann Limited, developing pricing and risk analytics."
MarketWatch
Chubb cat bond covers Florida hurricanes
Chubb cat bond covers Florida hurricanes: "WARREN, N.J.—Chubb Corp. has placed a $150 million catastrophe bond to protect it against losses from Florida hurricanes, according to Standard & Poor's Corp., which assigned ratings to the notes Friday.
The bond, issued by Cayman Islands-based special purpose vehicle East Lane Re III Ltd., provides three years of reinsurance protection to Chubb and its subsidiaries. According to New York-based S&P, which rated the notes BB, the bond covers personal lines losses to the ceding companies at or above $850 million. The notes currently cover a 50% share of losses between $850 million and $1.15 billion.
Under the terms of the transaction, Chubb will retain at least 10% of the exposure in the ceded layer.
Boston-based risk modeler AIR Worldwide Corp. provided the risk analysis for the transaction."
Business Insurance
The bond, issued by Cayman Islands-based special purpose vehicle East Lane Re III Ltd., provides three years of reinsurance protection to Chubb and its subsidiaries. According to New York-based S&P, which rated the notes BB, the bond covers personal lines losses to the ceding companies at or above $850 million. The notes currently cover a 50% share of losses between $850 million and $1.15 billion.
Under the terms of the transaction, Chubb will retain at least 10% of the exposure in the ceded layer.
Boston-based risk modeler AIR Worldwide Corp. provided the risk analysis for the transaction."
Business Insurance
Katrina Reinsurance Case Moves On To Trial
Katrina Reinsurance Case Moves On To Trial: "Katrina Reinsurance Case Moves On To Trial
Law360, New York (February 20, 2009) -- A lawsuit accusing five major insurance providers that served on the board of a Mississippi state-mandated insurance association of failing to purchase enough reinsurance prior to Hurricane Katrina will go to trial now that a federal judge has denied the insurance companies' motion for summary judgment."
Law360
Law360, New York (February 20, 2009) -- A lawsuit accusing five major insurance providers that served on the board of a Mississippi state-mandated insurance association of failing to purchase enough reinsurance prior to Hurricane Katrina will go to trial now that a federal judge has denied the insurance companies' motion for summary judgment."
Law360
Marine Insurers Continue To Seek Increases For P&I Cover
Marine Insurers Continue To Seek Increases For P&I Cover: "Ship owners will experience another round of premium increases as underwriters have been seeking increases ranging from 10-29 percent for the 2009-2010 protection and indemnity insurance renewals, according to an executive with Aon.
P&I is broad coverage for maritime risks.
Steve Griffiths, a director with the Chicago based insurance brokerage firm, out of London, said this is the ninth year in succession where the clubs [underwriting pools for these risks] have attempted to improve their underwriting results through the imposition of a general increase, resulting in at least a threefold premium hike in owners’ premiums since 2001.
However, he said, after almost a decade of increases, the clubs are still failing to achieve the rates they need to balance claims and overhead against premiums.
In the midst of financial turmoil, regulators and rating agencies continue to focus on solvency margins, he continued. The consequences of the global financial crisis in the second half of 2008 will not be known until the 2008-2009 year accounts are released in late spring, but it is estimated that reserves will have fallen by an average of 30 percent, he related."
National Underwriter
P&I is broad coverage for maritime risks.
Steve Griffiths, a director with the Chicago based insurance brokerage firm, out of London, said this is the ninth year in succession where the clubs [underwriting pools for these risks] have attempted to improve their underwriting results through the imposition of a general increase, resulting in at least a threefold premium hike in owners’ premiums since 2001.
However, he said, after almost a decade of increases, the clubs are still failing to achieve the rates they need to balance claims and overhead against premiums.
In the midst of financial turmoil, regulators and rating agencies continue to focus on solvency margins, he continued. The consequences of the global financial crisis in the second half of 2008 will not be known until the 2008-2009 year accounts are released in late spring, but it is estimated that reserves will have fallen by an average of 30 percent, he related."
National Underwriter
Willis acts for Allen Stanford
Willis acts for Allen Stanford: "Alleged fraudster’s bank uses Willis and London accountant
London-based Willis handles the risk management and insurance of Allen Stanford’s bank at the centre of the US investigation, The Guardian reports, claiming Willis refused to comment.
The Stanford International Bank uses a family-run Antigua and London-based accountancy firm CAS Hewlett as auditor."
Insurance Times
London-based Willis handles the risk management and insurance of Allen Stanford’s bank at the centre of the US investigation, The Guardian reports, claiming Willis refused to comment.
The Stanford International Bank uses a family-run Antigua and London-based accountancy firm CAS Hewlett as auditor."
Insurance Times
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