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Aon Suspends Business In Iran, Plus Other News
Aon will suspend all business activities in Iran from April 1.
• Aon will suspend all business activities in Iran from April 1. The broker said in a statement that neither it nor any of its subsidiaries will maintain a presence in the country, or do work for government or business entities domiciled there. Aon attributed the decision to the actions and statements made by the Iranian government.
• U.S. life insurer Metlife has transferred what it describes as a large block of guaranteed minimum death benefits risk to Catalyst Re, a reinsurance company owned by French banking group Société Générale. The transaction protects Metlife against severe downturns in the equity market, which can cause big losses to guaranteed benefits business. Metlife claims the deal is a first for both the company and the industry.
• Fairfax-owned reinsurer Odyssey Re has reclaimed £38 million ($67.9 million) of assets that it had previously pledged to Lloyd's firm Advent Capital. The assets were intended to support Advent for the 2005 and prior underwriting years. Following the transfer, Odyssey Re now has £72 million left supporting Advent.
• U.S. insurer The Hartford made a net profit of $2.28 billion in 2005, up from $2.12 billion in 2004. However, profits in the fourth quarter fell to $474 million, compared with $620 million in the same period in 2004. The Hartford's fourth-quarter earnings included $85 million in net catastrophe losses and reinstatement premiums.
The insurer has also revealed that it lost a $117 million asbestos case against some of its reinsurers in December in the Connecticut Superior Court. In 2003, The Hartford paid a $1.15 billion claim to MacArthur Company, a bankrupt asbestos insulation distributor and installer, and then tried to claim $117 million of the settlement from the reinsurers, which they refused to pay. The Hartford is appealing the court's decision.
• Computer-based risks are the greatest concern to senior executives of multinational corporations, according to a survey by reinsurer Swiss Re. Executives from all six countries surveyed – France, Germany, Italy, Japan, the U.K. and the U.S. – put this risk in their top three concerns.
The survey found that executives' other big risk concerns depended on the industry they work in. For example, financial executives considered corporate governance as their second-biggest concern, but executives in the manufacturing industry ranked this risk 11th.
• IPC Holdings has raised its estimates of losses from hurricanes Katrina and Rita. The company estimates that its losses from the two storms will be about $744 million – a 4% increase on its previous estimate. In addition, IPC estimates that its losses from Hurricane Wilma will be $105 million.
• Arch Capital Group has agreed to sell $200 million of non-cumulative preferred shares. The shares will be sold in an underwritten public offering. The company will use the capital raised to support the underwriting activities of its insurance and reinsurance subsidiaries and for general corporate purposes.
• Bond insurer Ambac Financial Group made a net profit of $751 million for the full year of 2005, compared with a profit of $724.6 million in 2004. In the fourth quarter of 2005 alone, the company made a $204.3 million profit compared with a $188.8 million profit in the same period the previous year.
• Rating agency AM Best has upgraded the financial strength rating of Liberty Life Assurance Company of Boston to A from A-. AM Best attributed the upgrade to Liberty's strong capital position and prudent management of its investment portfolio.
• Swiss Re has completed its first credit reinsurance securitisation. The €252 million ($309 million) deal will provide the company with coverage if claims on its trade credit portfolio are higher than expected over a three-year period.
• U.S. insurer Markel Corporation reported net income of $147.9 million for the full year of 2005. This is 10% lower than the $165.4 million profit it made in 2004. Markel's combined ratio was 101% for 2005 compared with 96% the year before.