National Underwriter - The president of an independent agents group told his membership yesterday that the Sept. 11 terrorist attack has underscored the insurance industry's importance to the nation, William F. Hofmann III, outgoing president of the Independent Insurance Agents of America, made his observations during the opening general session of the Alexandria, Va.-based group's annual convention here. Mr. Hofmann praised those who had made the trip to the convention despite the grief, anger and anxiety many feel in the wake of the terrorist attacks on the nation. Their determination to attend, he said, "speaks to a quality that is uniquely American; a confidence and stubbornness that defies hardship. It speaks to a rebirth of spirit and a genuine sense of purpose. It speaks to a courage that only free people can ever truly know."
Monday, October 29, 2001
Insurance Journal - On Tuesday The National Association of Insurance Commissioners reversed its previous decision to permit Lloyds to deposit 60 percent, rather than 100 percent, of the amount normally required into its U.S. Reinsurance trust fund based on estimates of its gross liabilities. The NAIC sited the "need to fully evaluate any liquidity problems on a syndicate-by-syndicate basis prior to granting an extension application to the entire Lloyds market," as the reason for its decision. It reiterated, however, that "one hundred percent of funding of gross liabilities has been and continues to be the legal requirement for credit for reinsurance for Lloyds of London Syndicates."
Friday, October 26, 2001
National Underwriter - Losses from the destruction of the World Trade Center contributed substantially to $840 million in third-quarter losses for Hamilton, Bermuda, insurer XL Capital, LTD, the company said. "Our losses were overwhelmingly impacted by the results of the Sept. 11 attack," said Brian M. O'Hara, president and chief executive officer for XL during a conference call today. "We are confident that we have identified all of the areas of exposure," added Mr. O'Hara. Other losses for the year made for the most "complex" financial report for the company, noted Mr. O'Hara, adding that last month's events have made risk transfer "an increasingly valuable and scarce resource." For the quarter, XL reported losses of $840 million, or $6.57 per share, compared with net income gain of $139.5 million, or $1.10 per share, for the third quarter of 2000.
Wednesday, October 24, 2001
Insurance Journal - Lloyds confirmed an earlier report from Standard & Poors that gross losses from the events of September 11 will be around £5.4 billion ($7.7 billion). The net loss estimate of £1.3 billion ($1.85 billion) after reinsurance recoveries remains unchanged. "The figure, reached following discussions with Lloyd"s management, is considered broadly consistent with Standard & Poors current estimate of the global industry loss," said a S&P press release. Its considerably lower than the £7 billion ($10.1 billion) figure calculated by some analysts, but is likely to be more accurate. Lloyds spokesman Adrian Beeby indicated several weeks ago that Lloyds provides otherwise private financial information to S&P and A.M. Best, but not usually to other analysts.
Wednesday, October 24, 2001
National Underwriter - The future of insurance coverage and rates will rest upon the decisions of reinsurance treaty renewals come Jan. 1 and decisions made in Washington to develop a terrorism reinsurance program. The observations came today during a CEO Breakfast Forum sponsored by the Insurance Brokers Association of the State of New York headquartered in Glenmont, N.Y. and JP Morgan Chase in downtown New York City. Calling the terrorist attack of Sept. 11 the "biggest event ever" to affect the insurance industry, Harold L. Morrison, senior vice president and managing director, New York brokerage zone officer for Warren-based Chubb, said the reinsurance companies have "taken a pretty significant hit." For them to stay afloat, he said, clients will see rates rise significantly.
Thursday, October 18, 2001
Insurance Journal - The long-term implications of the September 11 terrorist attacks for the insurance industry "will likely be far greater than the ultimate sum of the paid losses," said Larry Mayewski, A.M. Best Co.s Executive Vice President and Chief Rating Officer. "They will also dramatically change how the industry conducts business in the future." In an Oct. 2 conference call with hundreds of participants, Mr. Mayewski called the terrorist attacks of Sept. 11 "unprecedented" in scope and complexity. . . . The direct and indirect impact of this event may not be fully understood for several years," he said. "The insurance industry will be able to meet its commitments," said Mr. Mayewski, noting that A.M. Bests most recent estimate of losses stemming from the attacks remains in excess of $30 billion.
Monday, October 08, 2001
National Underwriter - Under U.S. regulatory requirements, Lloyd's next month will have to fund 100 percent of its gross liabilities from the World Trade Center attack--a price tag of £1.3 billion ($1.9 billion at current exchange rates), or the equivalent of 12 percent of the market's 2001 capacity. Even Lloyd's officials agree this could cause a short-term liquidity problem, but Lloyd's Chairman Sax Riley emphasizes that all requirements will be met. (Under U.S. regulations, all alien reinsurers are required to fund 100 percent of reinsurance gross liabilities, which are kept in the Lloyd's American Trust Fund in New York. After declaring gross liabilities, Lloyd's and other reinsurers must make a cash deposit to the trust fund by Nov. 15.)
Thursday, October 04, 2001
Insurance Journal - Lloyds has received a barrage of questions on its total exposures and its liquidity following the release of its projected net loss figure of $1.94 billion as a result of the attacks on the U.S. (See IJ Website Sept. 27). It also faces further claims from an explosion in Toulouse, France on September 21. Fitch rating agency, which prior to the announcement had downgraded Lloyds by a factor of two from A+ to A-, said that Lloyds faced gross liabilities of £7 billion ($10.25 billion), and questioned whether the amount of reinsurance calculated in achieving the net figure would be fully paid. Lloyds spokesman Adrian Beeby told the IJ last week that "reinsurance had been a major part of our analysis." He indicated that the vast majority of coverage was placed with companies outside of the Lloyds market and that "ninety percent of it is with companies rated "A" or better by A.M. Best and Standard & Poors."
Wednesday, October 03, 2001
Insurance Journal - The International Accident and Health division of Willis Group Holdings has developed a range of products to assist organizations in securing war risks and malicious risks coverage. The group announced that cover can be provided to clients on either a country specific or worldwide basis depending on their situation or need. The policies would protect persons working in or traveling to high risk areas, such as expatriates, aid workers or media personnel. Nicola Fraccalvieri, who heads the Willis unit, stated that " We estimate that less than a third of all organizations which have some degree of exposure to war, terrorism, and malicious acts have the appropriate coverage in place." He believes that in light of current events such coverage is no longer optional, but essential.
Wednesday, October 03, 2001
Insurance Journal - Since the morning of Sept. 11, A.M. Best Co. has been gathering public and private information in order to assess the financial impact as well as the nuances of insurance coverage associated with the tragic attacks. To date, industrywide loss estimates are broad, ranging from $30 billion to $70 billion. Many specific estimates provided by companies directly affected by these events have been subject to significant upward revisions. A.M. Best believes this trend is likely to continue, given the discrepancies between gross estimates before reinsurance and net losses reported by specific companies in different segments of the industry. Although such disparity in loss estimates is typical in the days following the catastrophic events, the tragedy that occurred on Sept. 11 is unique and unprecedented in both its scope and complexity of potential losses.
Tuesday, October 02, 2001