Glacier's Nelson Re the next Cat Bond with potential losses

Nelson Re Ltd the next catastrophe bond with potential losses: "Nelson Re Ltd, a Cayman Islands based special purpose vehicle set up to issue catastrophe bonds by Glacier Reinsurance AG, issued a news release. The release states that Glacier Re have informed Nelson Re Ltd that Glacier has incurred approximately $100m worth of claims relating to hurricane Ike. Glacier Re are evaluating the extent to which these claims will impact it’s various reinsurance agreements, including the potential for any loss payment obligation which may be required from Nelson Re.

The latest deal under Nelson Re Ltd was issued in June 2008, it consists of three tranches the first of which at $67.5m provided cover for U.S. windstorm, the other two tranches were believed at the time to cover European windstorms. Whether that tranche is now at risk of being triggered is now seemingly likely."

Source: Artemis.bm

Ironshore Bermuda appoints new CEO

Ironshore Bermuda appoints new boss: "Ironshore Bermuda has appointed Mitch Blaser as its new chief executive officer.

Mr Blaser, who has been with the company since its launch in January 2007, will continue in his current roles as chief operating officer and chief financial officer of Ironshore’s global operations. Commenting on the appointment,

Ironshore global CEO Kevin Kelley said: “Bermuda will continue to play an important role in the future of Ironshore”. He added: “Mitch has been in Bermuda since Ironshore’s formation and has been an integral part of the successful development and expansion of the Bermuda based operations. Prior to joining Ironshore, Mr Blaser served as chief financial officer for Swiss Re’s Americas division and was also part at the leadership team in at Marsh for more than 25 years.

Mr Blaser, along with Bob and John Clements, was instrumental in the founding Ironshore in December 2006."

Source: Reinsurance

Ajax Re catastrophe bond likely to default on interest payment

Ajax Re catastrophe bond likely to default on interest payment: "The Ajax Re Ltd catastrophe bond from Aspen Insurance is looking like it is going to default in the coming days due to it’s inability to pay an upcoming interest payment. Ajax Re is one of the bonds which used Lehman Brothers as a total-return swap counterparty and has since been watched closely after Lehman Brothers collapsed. It will be the second Lehman linked bond to miss an interest payment in a matter of weeks, as recently Allstate’s Willow Re failed to meet it’s interest payment due date. Standard & Poor’s has placed Ajax Re’s Class A notes on creditwatch negative as it awaits the likely default. The interest payment is due on 16th March, a default will be triggered five days after the interest due date if payment isn’t made. The notes had previously been downgraded to ‘CC’ by S&P.

The issue with this particular deal is due to a gap that has appeared between the interest rates on the notes and the assets in the transactions collateral account. The notes are based on 3 month U.S. dollar libor while the investments in the collateral account are based on 1 month U.S. dollar libor. The mismatch between the two has resulted in a shortfall as the assets are not generating enough capital to actually pay the interest. So, it sounds like it’s not strictly the fault of the Lehman default in this case, rather it’s linked to fluctuations in pricing of the assets in the collateral account. A point that makes it even more noteworthy that the recent cat bond deals completed in 2009 are utilising different kinds of assets (such as US-government-backed debt obligations as the underlying securities) to typical catastrophe linked deals. Perhaps that’s a good sign of progress and maturation in the marketplace as issuers seek to reassure investors by striving to improve the way deals are structured as they bring them market."

Source: Artemis.bm

XL Capital's chairman will not stand for re-election

XL Capital's chairman will not stand for re-election: "XL Capital Ltd. said Thursday that Brian O'Hara, its chairman and former chief executive, and board member John Thornton will not stand for re-election at the company's general meeting on April 24. The insurer added that board members Robert Parker and Alan Senter have set plans to retire at the end of the year."

Source: MarketWatch

XL Re appoints senior aviation underwriter

XL Re appoints senior aviation underwriter: "XL Re, the global reinsurance operations of XL Capital Ltd (NYSE: XL), today announced the appointment of Patrick Cove as senior aviation underwriter responsible for XL Re Europe Limited's global aviation practice.

Patrick has over 16 years experience in aviation reinsurance and has been an aviation underwriter at XL Re for five years. In his new role Patrick will report to Mark Berry, general manager of XL Re Europe Limited, London Branch.

David Watson, president and CEO of XL Re Europe Limited, said: 'Aviation is an integral part of our reinsurance book of business. Patrick's significant experience in aviation reinsurance and knowledge of XL Re's Aviation clients makes him ideally placed to lead our aviation practice.'"

Source: Post Online

Bond insurers to get junk rating

Bond insurers to get junk rating: "In an analysis of troubled US bond insurers Ambac and MBIA the FT reports that Moody's has warned it might cut Ambac's ratings to junk status due to losses on mortgage-backed securities, which will impact on the prices of bonds insured."

Source: Insurance Times

Judge rejects bid to dismiss claim on AIG-Starr

Judge rejects bid to dismiss claim on AIG-Starr: "A federal judge has rejected a bid to dismiss one of three remaining claims brought by AIG in a court battle against Starr International Co, a company controlled by former AIG Chief Executive Maurice 'Hank' Greenberg, over rightful ownership of a block of AIG shares.

U.S. District Judge Jed Rakoff, in a Tuesday ruling, dismissed a request by Boies, Schiller & Flexner, Starr's lawyers, for a summary judgment motion related to AIG's claim of conversion.

Conversion refers to the deprivation of another's property without authorization or justification.

'We are pleased by the court's ruling that AIG is entitled to proceed to trial on its claim that SICO (Starr), at the direction of Hank Greenberg, unlawfully converted the AIG shares in dispute,' said AIG spokesman Mark Herr."

Source: Reuters