.JPG){kind=logo}
Argo expands credit facility: "Bermuda-based Argo Group International Holdings Ltd. has renewed and expanded its revolving credit facility to $100 million.
The property and casualty reinsurer's existing facility, which was set to expire today, has now been replaced by a new, 364-day facility.
The terms of the new facility were expanded to allow for borrowings by various Argo Group companies, in US dollars and other currencies, for general corporate purposes."
Source: The Royal Gazette
06 March 2009
Run-off success sees market contract
Run-off success sees market contract: "The popular saying that run-off professionals are working themselves out of a job is alive and well in the UK legacy market.
The contraction of the size of the UK non-life run-off market is continuing, according to the KPMG Run-off Survey, endorsed by the Association of Run-off Companies. It revealed total liabilities fell to an estimated £28.3bn at the end of 2007 from £32.7bn at the end of 2006.
One of the drivers for this reduction is the impact of Reinsurance-to-Close transactions at Lloyd’s, which contributed to the elimination of £2.3bn of run-off liabilities in 2007.
Other finality tools—including schemes of arrangement and commutations—and the absence of major new run-offs have contributed to the contraction of the market.
Legacy business put to rest
UK run-off is likely to continue shrinking, despite the potential impact of the financial crisis on new run-off business, said Paul Corver, chairman of ARC. Speaking at the association’s 2009 Congress, he said recent scheme sanctions were likely to put to rest large portions of legacy business.
This includes the sanction of the EW Payne pool scheme, which involves 82 participants and is probably the most complex to date. It follows another successful pool scheme—WFUM in 2007, which comprised 14 solvent entities and one insolvent entity. The GLOBAL Re scheme is the first to be sanctioned for business emanating from the UK but written overseas.
“Scheme closures reduce the total amount of liabilities in the market,” explained Corver. “To an extent, we’d expect that to continue.” He added that it would take time to see any impact from the financial crisis translating into new run-off."
Source: Lloyd's.com
The contraction of the size of the UK non-life run-off market is continuing, according to the KPMG Run-off Survey, endorsed by the Association of Run-off Companies. It revealed total liabilities fell to an estimated £28.3bn at the end of 2007 from £32.7bn at the end of 2006.
One of the drivers for this reduction is the impact of Reinsurance-to-Close transactions at Lloyd’s, which contributed to the elimination of £2.3bn of run-off liabilities in 2007.
Other finality tools—including schemes of arrangement and commutations—and the absence of major new run-offs have contributed to the contraction of the market.
Legacy business put to rest
UK run-off is likely to continue shrinking, despite the potential impact of the financial crisis on new run-off business, said Paul Corver, chairman of ARC. Speaking at the association’s 2009 Congress, he said recent scheme sanctions were likely to put to rest large portions of legacy business.
This includes the sanction of the EW Payne pool scheme, which involves 82 participants and is probably the most complex to date. It follows another successful pool scheme—WFUM in 2007, which comprised 14 solvent entities and one insolvent entity. The GLOBAL Re scheme is the first to be sanctioned for business emanating from the UK but written overseas.
“Scheme closures reduce the total amount of liabilities in the market,” explained Corver. “To an extent, we’d expect that to continue.” He added that it would take time to see any impact from the financial crisis translating into new run-off."
Source: Lloyd's.com
Florida's hurricane catastrophe fund needs infusion
Florida's hurricane catastrophe fund needs infusion before : "Insurance regulators have 30 to 45 days to come up with a plan to shore up the state's hurricane catastrophe fund, which backs up the private insurers operating in Florida.
At a meeting of the state Senate Ways and Means Committee, Insurance Commissioner Kevin McCarty gave the first notice of the timeframe state officials are working with to devise a means for the Florida Hurricane Catastrophe Fund to fully fund its obligations.
Hurricane season starts June 1. Insurers working Florida will be shopping aggressive for backup coverage by mid-April so it's in place before the wind begins to blow.
State senators also also urged regulators to see if Florida could keep State Farm Florida Insurance from leaving the state. In late January, State Farm said it would no longer sell property insurance in Florida because it was losing money since it couldn't charge sufficient rates.
The catastrophe fund, created after Hurricane Andrew hit South Florida, can potentially sell up to $29 billion of backup insurance to insurers for the 2009 hurricane season. It doesn't have that money in the bank. There's about $7.6 billion on hand now.
Normally, it would sell bonds to make up the difference.
Given the ''cratering'' of the financial markets, McCarty said it wouldn't be likely that the catastrophe fund could enough bonds to make up the difference. At best, CAT fund officials estimate the fund could sell an estimated $3 billion. McCarty said he made the point that Florida is working with a real deadline for the cat fund when he vistied with U.S. Treasury Secretary Timonthy Geitner last week in Washington D.C.
''It will be 30 to 45 days before we're in a situation where [insurers] are in the market looking for reinsurance coverage and we need'' to have some certainty about the ability of the CAT fund to pay,'' said McCarty.
Most of the private insurers as well as Citizens Property Insurance, the state-run company, rely heavily on the CAT fund for back-up insurance coverage.
More importantly, the CAT fund's coverage is less expensive which has kept some premium rates lower in the past two years. However, if insurers have to buy more reinsurance coverage in the private market, premiums rates could rise.
Private reinsurance would be more expensive and that expense is a factor in premium rates.
There is also a concern some insurers could face lower financial ratings. Without an A-rating some banks might not accept a company's policy on a mortgage, having severe reprecussions for homeowners."
Source: MiamiHerald.com
At a meeting of the state Senate Ways and Means Committee, Insurance Commissioner Kevin McCarty gave the first notice of the timeframe state officials are working with to devise a means for the Florida Hurricane Catastrophe Fund to fully fund its obligations.
Hurricane season starts June 1. Insurers working Florida will be shopping aggressive for backup coverage by mid-April so it's in place before the wind begins to blow.
State senators also also urged regulators to see if Florida could keep State Farm Florida Insurance from leaving the state. In late January, State Farm said it would no longer sell property insurance in Florida because it was losing money since it couldn't charge sufficient rates.
The catastrophe fund, created after Hurricane Andrew hit South Florida, can potentially sell up to $29 billion of backup insurance to insurers for the 2009 hurricane season. It doesn't have that money in the bank. There's about $7.6 billion on hand now.
Normally, it would sell bonds to make up the difference.
Given the ''cratering'' of the financial markets, McCarty said it wouldn't be likely that the catastrophe fund could enough bonds to make up the difference. At best, CAT fund officials estimate the fund could sell an estimated $3 billion. McCarty said he made the point that Florida is working with a real deadline for the cat fund when he vistied with U.S. Treasury Secretary Timonthy Geitner last week in Washington D.C.
''It will be 30 to 45 days before we're in a situation where [insurers] are in the market looking for reinsurance coverage and we need'' to have some certainty about the ability of the CAT fund to pay,'' said McCarty.
Most of the private insurers as well as Citizens Property Insurance, the state-run company, rely heavily on the CAT fund for back-up insurance coverage.
More importantly, the CAT fund's coverage is less expensive which has kept some premium rates lower in the past two years. However, if insurers have to buy more reinsurance coverage in the private market, premiums rates could rise.
Private reinsurance would be more expensive and that expense is a factor in premium rates.
There is also a concern some insurers could face lower financial ratings. Without an A-rating some banks might not accept a company's policy on a mortgage, having severe reprecussions for homeowners."
Source: MiamiHerald.com
Novae updates on Chaucer deal
Novae updates on Chaucer deal: "Lloyd's insurer Novae has given an update on its ongoing discussions with Chaucer.
In a statement, the company said: 'On 28 January 2009 the Group announced that it had made an approach to the Chairman of Chaucer Holdings PLC with a view to starting discussions regarding a possible all-share merger of the two companies. On 10 February 2009, Novae made a subsequent announcement confirming that it had entered into discussions with Chaucer and that due diligence had commenced.
'One of the aims of the due diligence exercise is to confirm the expected material benefits that would arise from a combination of the two groups' complementary operations and underwriting expertise.
'It is anticipated that such benefits would accrue from a more efficient use of capital (including that element of capital which is currently surplus to Novae's short term stand-alone requirements), improved scale and liquidity and synergies in areas such as reinsurance buying and operating infrastructure. Discussions are continuing and a further announcement will be made in due course.'
It added: 'A merger with Chaucer could bring attractive scale and diversification benefits within the context of the Group’s strategic objectives, but will only be pursued on terms which will be beneficial to Novae shareholders.'"
Source: Insurance Times
In a statement, the company said: 'On 28 January 2009 the Group announced that it had made an approach to the Chairman of Chaucer Holdings PLC with a view to starting discussions regarding a possible all-share merger of the two companies. On 10 February 2009, Novae made a subsequent announcement confirming that it had entered into discussions with Chaucer and that due diligence had commenced.
'One of the aims of the due diligence exercise is to confirm the expected material benefits that would arise from a combination of the two groups' complementary operations and underwriting expertise.
'It is anticipated that such benefits would accrue from a more efficient use of capital (including that element of capital which is currently surplus to Novae's short term stand-alone requirements), improved scale and liquidity and synergies in areas such as reinsurance buying and operating infrastructure. Discussions are continuing and a further announcement will be made in due course.'
It added: 'A merger with Chaucer could bring attractive scale and diversification benefits within the context of the Group’s strategic objectives, but will only be pursued on terms which will be beneficial to Novae shareholders.'"
Source: Insurance Times
Ex Willis and Allianz manager Edwards joins ACE
Ex Willis and Allianz manager joins Ace to ramp up major risks arm: "Ace Europe has appointed Shaun Edwards as a client relationship manager for its major risks business, in a move which further enhances Ace’s profile and broker relationships within this area.
Ace said Mr Edwards will work closely with its brokers and will be responsible for the retention of existing clients as well as the development of new client relationships.
He joins Jeff Carr, who was appointed client relationship manager earlier this year.
Prior to joining Ace, Mr Edwards was head of client management at Allianz Global Corporate and Specialty and client executive director at Willis Group Holdings. He will be based in Ace’s Leadenhall Street head office and will report to Phil Sharpe, director of casualty and major risks, UK & Ireland."
Source: Post Online
Ace said Mr Edwards will work closely with its brokers and will be responsible for the retention of existing clients as well as the development of new client relationships.
He joins Jeff Carr, who was appointed client relationship manager earlier this year.
Prior to joining Ace, Mr Edwards was head of client management at Allianz Global Corporate and Specialty and client executive director at Willis Group Holdings. He will be based in Ace’s Leadenhall Street head office and will report to Phil Sharpe, director of casualty and major risks, UK & Ireland."
Source: Post Online
Lawmaker: AIG failure would 'bring down Europe'
Lawmaker: AIG failure would 'bring down Europe': "The U.S. government rescued giant insurer American International Group (AIG.N) in part because its collapse would dramatically hurt European banks, a senior Democratic lawmaker said on Thursday.
The U.S. government has bailed out AIG three times since Sept. 16 and committed about $180 billion to keep the insurer alive and doing business.
'One of the reasons we had to rescue AIG was the fact that it was going to bring down Europe,' Pennsylvania Rep. Paul Kanjorski told reporters after his subcommittee held a hearing on systemic risk.
Later, in an interview with Reuters, Kanjorski said he was told that a large number of AIG's counterparties were European.
'That's why we could not allow AIG to fail as we allowed Lehman (Brothers) to fail, because that would have precipitated the failure of the European banking system,' he said."
Source: Reuters
The U.S. government has bailed out AIG three times since Sept. 16 and committed about $180 billion to keep the insurer alive and doing business.
'One of the reasons we had to rescue AIG was the fact that it was going to bring down Europe,' Pennsylvania Rep. Paul Kanjorski told reporters after his subcommittee held a hearing on systemic risk.
Later, in an interview with Reuters, Kanjorski said he was told that a large number of AIG's counterparties were European.
'That's why we could not allow AIG to fail as we allowed Lehman (Brothers) to fail, because that would have precipitated the failure of the European banking system,' he said."
Source: Reuters
Is Buffett Bullish, Or Just Full Of Bull?
Is Buffett Bullish, Or Just Full Of Bull?: "At a time when business titans are being dismissed as the dumbest guys in the room, one icon--Warren Buffett, head of Berkshire Hathaway--has not been afraid to speak out optimistically about the future of the economy in general and the insurance business in particular.
As usual, Mr. Buffett doesn't pull any punches. In his annual letter to shareholders, he warned that 'the economy will be in shambles throughout 2009--and, for that matter, probably well beyond--but that conclusion does not tell us whether the stock market will rise or fall.'
Refreshingly, he took full responsibility for major investments that went south, and which cost his firm a bundle. “The tennis crowd would call my mistakes ‘unforced errors,’” he joked. (For more on what Mr. Buffett said about his insurance holdings, click here.)
Yet despite reporting a sharply lower profit of $4.99 billion in 2008, down from $13.21 billion the year before (hey, at least he had profits to report!), and even after getting hammered by nearly $7.5 billion in investment and derivative losses, Mr. Buffett remains optimistic about the country's long-term economic future, and insists times have been worse.
Indeed, America faced far greater challenges during a pair of World Wars and The Great Depression, he noted.
'Though the path has not been smooth, our economic system has worked extraordinarily well over time,' he said. 'It has unleashed human potential as no other system has, and it will continue to do so.'
He boldly concluded that 'America's best days lie ahead.'
As for insurance, he remains bullish. “Clearly our insurance CEOs have not had the wind at their back,” he wrote, “yet these managers have excelled to a degree...I never dreamed possible in the early days,” noting that his insurance units have generally outperformed the overall market in terms of underwriting profitability.
He was particularly high (and colorful) on opportunities for GEICO, noting that he and CEO Tony Nicely “feel like two hungry mosquitoes in a nudist camp. Juicy targets are everywhere.'
Is Mr. Buffett being bullish, or is he just full of bull?"
Source: A View From The Press Box
As usual, Mr. Buffett doesn't pull any punches. In his annual letter to shareholders, he warned that 'the economy will be in shambles throughout 2009--and, for that matter, probably well beyond--but that conclusion does not tell us whether the stock market will rise or fall.'
Refreshingly, he took full responsibility for major investments that went south, and which cost his firm a bundle. “The tennis crowd would call my mistakes ‘unforced errors,’” he joked. (For more on what Mr. Buffett said about his insurance holdings, click here.)
Yet despite reporting a sharply lower profit of $4.99 billion in 2008, down from $13.21 billion the year before (hey, at least he had profits to report!), and even after getting hammered by nearly $7.5 billion in investment and derivative losses, Mr. Buffett remains optimistic about the country's long-term economic future, and insists times have been worse.
Indeed, America faced far greater challenges during a pair of World Wars and The Great Depression, he noted.
'Though the path has not been smooth, our economic system has worked extraordinarily well over time,' he said. 'It has unleashed human potential as no other system has, and it will continue to do so.'
He boldly concluded that 'America's best days lie ahead.'
As for insurance, he remains bullish. “Clearly our insurance CEOs have not had the wind at their back,” he wrote, “yet these managers have excelled to a degree...I never dreamed possible in the early days,” noting that his insurance units have generally outperformed the overall market in terms of underwriting profitability.
He was particularly high (and colorful) on opportunities for GEICO, noting that he and CEO Tony Nicely “feel like two hungry mosquitoes in a nudist camp. Juicy targets are everywhere.'
Is Mr. Buffett being bullish, or is he just full of bull?"
Source: A View From The Press Box
Santander interested in AIG's E.Europe bank -paper
Santander interested in AIG's E.Europe bank -paper: "Spain's largest bank, Santander (SAN.MC), is among potential bidders for the Polish banking arm of the troubled insurer American International Group (AIG.N), a Polish daily reported on Friday, citing an unnamed source.
AIG's Polish bank is among non-core assets put up for sale after the insurance giant avoided bankruptcy last year thanks to a U.S. government bailout.
'Spain's Santander is also standing in the queue for AIG Bank Polska,' Rzeczpospolita daily daily quoted an unnamed souce close to the talks as saying.
Poland's top bank PKO BP PKOB.WA has already said it was interested in AIG's banking assets in the European Union's largest ex-communist nation."
Source: Reuters
AIG's Polish bank is among non-core assets put up for sale after the insurance giant avoided bankruptcy last year thanks to a U.S. government bailout.
'Spain's Santander is also standing in the queue for AIG Bank Polska,' Rzeczpospolita daily daily quoted an unnamed souce close to the talks as saying.
Poland's top bank PKO BP PKOB.WA has already said it was interested in AIG's banking assets in the European Union's largest ex-communist nation."
Source: Reuters
Subscribe to:
Posts (Atom)
Posts
