David Sandham looks at the latest reinsurance stories online
Traffic on globalreinsurance.com spiked as we broke the exclusive story that international consultancy Navigant is closing down its (re)insurance division. The company did not return calls for comment. Word is that Navigant (re)insurance consultants in the UK and US are dusting off their CVs to look for jobs. We hope to report where some of these talented individuals land.
Another popular story centred on speculation that Marsh is looking at HSBC Insurance Brokers with a view to acquiring it. One source described the possibility as “the perfect strategic fit” for Marsh.
At this time of year the countdown to 1 January renewals is on everyone’s minds, so pricing predictions were in demand. Hannover Re board member Michael Pickel’s forecasts of a mixed picture for reinsurance prices in 2010 were widely read. Hannover Re predicts largely stable prices for the January renewals.
Thomas Witting, head of client markets for Germany and the Nordic and Baltic markets at Swiss Re, had strong words on the price war in the German motor segment. “This misguided development has raged for years in the German motor market but the insurance industry has failed to counteract it,” he said. “Swiss Re needs to take decisive action to ensure the price war does not have a long-term negative impact on the profitability of our proportional portfolio. We’ll become more selective in our underwriting, and are not prepared to participate in the erosion of motor prices under our reinsurance treaties.”
The long-awaited court decision in the dispute between Warren Buffet’s Equitas and reinsurer Brandywine (owned by Randall & Quilter) drew a flurry of clicks on our website. The case concerns Equitas’s claims under excess of loss reinsurance contracts written within the LMX spiral. Most of those claims are ancient, relating to Kuwait Airways losses from the invasion of Kuwait in August 1990 and oil pollution losses from the Exxon Valdez disaster in 1989. But the court decision is vital: it held that Equitas was entitled to use actuarial models to prove its claims, although this means using estimates. The judgment could have an impact on reinsurance claims generally.
Some who read the story were no doubt quickly on the phone to their stockbrokers – R&Q’s shares tanked from 125p to 105p on the news.
To contribute to the website, email David Sandham at david.sandham@ globalreinsurance.com
The five most read stories at globalreinsurance.com this month
Navigant to close insurance division
International consultancy in the process of closing one of its key sectors
Marsh eyes HSBC Insurance Brokers
Acquisition-hungry Marsh had previously been linked to Oval
Hannover Re points to mixed picture in 2010
Largely stable prices predicted for upcoming January renewals
Swiss Re appeals for continuity
Our focus is on quality not quantity, says reinsurer
Equitas v R&Q decision
Buffet’s Equitas wins landmark legal case